Q2 2025 Financial Summary (Unaudited) GAAP | | | | | QoQ | | | --- | --- | --- | --- | --- | --- | | | Q2'25 | Q1'25 | Q2'24 | ChangeYoY Change | | | Revenue ($k) | $664,574 | $637,554 | $507,431 | Up 4.2% | Up 31.0% | | Gross Margin | 55.1% | 55.4% | 55.3% | Down 0.3 ptsDown 0.2 pts | | | Opex ($k) | $201,258 | $184,471 | $164,042 | Up 9.1% | Up 22.7% | | Operating Margin | 24.8% | 26.5% | 23.0% | Down 1.7 pts | Up 1.8 pts | | Net income ($k) | $133,726 | $133,791 | $100,366 | Flat | Up 33.2% | | Diluted E ...

Key Takeaways Monolithic Power Systems, Inc. (MPWR) is set to release second-quarter 2025 results on July 31, after the closing bell. It delivered a four-quarter earnings surprise of 2.20%, on average, beating estimates on each occasion. In the last reported quarter, the company pulled off an earnings surprise of 1%. This Kirkland, WA-based company is likely to record higher revenues in the to-be-reported quarter, driven by solid traction in several verticals. Management's effort to expand and diversify its ...

Core Viewpoint - Analysts project that Monolithic Power (MPWR) will report quarterly earnings of $4.12 per share, reflecting a 30% year-over-year increase, with revenues expected to reach $650.41 million, a 28.2% increase from the same quarter last year [1]. Revenue Estimates by End Market - Revenue from the Storage and Computing market is forecasted to be $185.05 million, indicating a year-over-year increase of 61.1% [5]. - Revenue from the Communications market is expected to reach $75.73 million, representing a 73.7% increase year-over-year [5]. - Revenue from the Automotive market is projected at $149.41 million, showing a 71.4% increase from the prior-year quarter [5]. - Revenue from the Enterprise Data market is estimated to be $137.45 million, indicating a decline of 26.6% from the prior-year quarter [6]. - Revenue from the Industrial market is expected to be $44.27 million, reflecting a 37.1% year-over-year increase [6]. - Revenue from the Consumer market is projected at $58.56 million, indicating a 38.8% increase from the prior-year quarter [7]. Analyst Consensus and Market Performance - The consensus EPS estimate for the quarter has not changed over the past 30 days, indicating stability in analysts' projections [2]. - Revisions to earnings projections are critical for predicting investor behavior and are linked to short-term stock price performance [3]. - Monolithic shares have decreased by 2.9% in the past month, contrasting with a 4.9% increase in the Zacks S&P 500 composite [7]. - With a Zacks Rank 2 (Buy), MPWR is expected to outperform the overall market in the near future [7].

Core Insights - Return on Invested Capital (ROIC) is a critical metric for assessing future investment performance, indicating a company's ability to generate returns from investor capital [1] - High ROICs suggest a competitive advantage, which can lead to stock market outperformance over time [2] Company Analysis: AppLovin - AppLovin has achieved a ROIC of approximately 52% and its shares have increased by about 348% over the past 52 weeks [3][4] - The company is transitioning from mobile game advertising to e-commerce advertising, generating $1 billion in annual run-rate revenues in this new sector [4][5] - The sustainability of AppLovin's high ROIC will depend on the success of its e-commerce push, as early results are positive but still in the experimental phase [5] Company Analysis: Monolithic Power Systems - Monolithic Power Systems has generated a ROIC of nearly 56%, but its shares have decreased by around 10% in the same period [7][8] - The company's relationship with NVIDIA has been a key advantage, but NVIDIA is diversifying its suppliers, raising concerns about Monolithic's future ROIC [8][9] - Approximately 68% of Monolithic's revenue comes from markets outside of data centers, which could help offset potential declines in business with NVIDIA [10] - Despite potential competition for NVIDIA's business, Monolithic is expected to maintain a high overall ROIC, which is favorable for its future share performance [11] Overall Market Outlook - Both AppLovin and Monolithic Power Systems have demonstrated strong ROIC, suggesting potential for continued outperformance [12] - AppLovin's rapid share price increase and entry into a new market may present more uncertainty compared to Monolithic's established advantages [12]

Core Insights - ECARX Holdings Inc. has signed a strategic cooperation agreement with Monolithic Power Systems, focusing on automotive intelligence and robotics, aiming to establish a global supply chain and intelligent industrial ecosystem [1][2] - The partnership will enhance product adaptation, validation, and system optimization, reducing development cycles and accelerating time-to-market for customers [2] - MPS will leverage its global R&D and engineering support to help ECARX build a resilient supply chain and accelerate product rollout, supporting ECARX's global expansion strategy [2][4] Company Overview - ECARX is a global automotive technology provider delivering turnkey solutions for next-generation smart vehicles, including system on a chip (SoC) and central computing platforms [5] - Founded in 2017 and listed on Nasdaq in 2022, ECARX has over 1,800 employees across 12 locations and its products are present in over 8.7 million vehicles worldwide [6] Partner Overview - Monolithic Power Systems, founded in 1997, specializes in high-performance semiconductor-based power electronics solutions, focusing on reducing energy and material consumption [7] - MPS is recognized for its deep system-level knowledge, semiconductor expertise, and innovative technologies, enabling reliable and energy-efficient solutions across various sectors [3][7]

Group 1: AI Transformation in the Workforce - Tech companies are increasingly replacing human workers with AI, with Amazon's CEO stating that human jobs are disappearing because AI is cheaper and smarter [5][6] - Amazon is projecting a reduction in its corporate workforce over the next few years, urging employees to become proficient in AI tools, which may lead to them training AI to replace their own roles [6][7] - The shift from human labor to AI is seen as an unstoppable trend, with significant implications for middle management and white-collar workers [6] Group 2: AI Infrastructure and Energy Demand - The electricity demand for AI technologies is substantial, with ChatGPT consuming enough electricity annually to power 20,000 American homes, and this usage is expected to double every two to three years [7] - AI data centers require significant cooling systems to prevent overheating of processors, which is critical to avoid costly outages [8] Group 3: Investment Opportunity in Monolithic Power Systems (MPWR) - Monolithic Power Systems (MPWR) is identified as a key player in the AI growth sector, providing essential power regulation technology that supports AI processors [9] - MPWR has a strong dividend track record, increasing its dividend by 25% annually, and has a modest payout ratio of 14%, indicating potential for future dividend growth [9][11] - The company has experienced significant revenue growth of 672% over the past decade, with dividends surging 680% and stock prices increasing over 1,300% [11] - MPWR is expanding into new markets, including automotive and telecommunications, which are driving revenue growth and cash flow [12] - The company's fabless business model allows for rapid scaling without heavy capital expenditures, further enhancing its profitability and dividend potential [12]

Core Viewpoint - Monolithic Power Systems, Inc. (MPS) is set to report its financial results for the second quarter ended June 30, 2025, on July 31, 2025, after market close [1][2]. Company Overview - MPS is a fabless global company specializing in high-performance, semiconductor-based power electronics solutions, founded in 1997 by CEO Michael Hsing [4]. - The company's mission focuses on reducing energy and material consumption to enhance quality of life and promote sustainability [4]. - MPS possesses three core strengths: deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in semiconductor processes, system integration, and packaging [4]. - These advantages allow MPS to deliver reliable, compact, and energy-efficient solutions that are cost-effective and environmentally responsible, ensuring consistent returns for stockholders [4]. Upcoming Events - MPS will provide written commentary on its second-quarter results alongside the earnings announcement [2]. - A question-and-answer conference call is scheduled for 2:00 p.m. PT / 5:00 p.m. ET, accessible via a Zoom webcast [3]. - A replay of the conference call will be available for one year on the Investor Relations website two hours after the live event [3].

Core Insights - Theodore Blegen, EVP and CFO of Monolithic Power Systems, executed an open market sale of 6,000 shares valued at $4.5 million on July 2, 2025, which is significantly larger than his typical trading activity [1][3][11] Group 1: Transaction Details - The transaction involved the sale of 6,000 shares, with a total value of $4.5 million, reported on July 2, 2025 [2] - Post-transaction, Blegen retains 46,939 shares, valued at approximately $34.8 million [5] - The sale occurred at a price 7.02% above the 50-day moving average and 9.95% above the 200-day moving average as of July 10, 2025 [4] Group 2: Company Overview - Monolithic Power Systems has a market capitalization of $35.45 billion, trailing twelve-month revenue of $2.21 billion, and a net income of $1.79 billion [7] - The company specializes in semiconductor-based power electronics solutions, including DC to DC integrated circuits, serving various markets such as computing, automotive, and consumer electronics [8][10] Group 3: Insider Trading Context - Blegen's recent sale is more than three times his median trade size of 1,884 shares, indicating an unusually large transaction [3] - This sale marks Blegen's first reported trade in 140 days, contrasting with his historical average of 14.8 trades per year, suggesting a lower trading frequency recently [6] - The timing of the sale aligns with a previous pause in trading activity, which may have been influenced by stock price fluctuations [11][14] Group 4: Market Performance - Monolithic Power Systems has consistently surpassed analysts' consensus targets for over three years, despite a recent stock price drop due to modest guidance targets [13] - The stock has seen a 24% price increase year-to-date, and it is currently valued at 19.5 times earnings, indicating reasonable valuation [14]

Core Insights - The technology sector has been the top performer over the past decade, significantly outpacing other sectors, with an average annual return of 20.9% [14] - Major trends driving investment in technology include semiconductors, big data, the Internet of Things, cloud computing, machine learning, and artificial intelligence [1][4] Group 1: Technology Sector Performance - Technology investing is synonymous with growth investing, responsible for five of the top ten performing stocks in the market over the past decade [4] - The technology sector has consistently outperformed the S&P 500, with a 7 percentage point advantage over the index [14] - Nearly 32% of the S&P 500 Index's weight is assigned to the information technology sector, with tech and tech-adjacent stocks exceeding 41% [16][17] Group 2: Characteristics of Tech Stocks - The technology sector includes companies involved in IT services, software development, technology hardware distribution, and semiconductor manufacturing [11] - The classification of tech stocks has become complex due to the emergence of the communication services sector, which includes former tech companies like Meta Platforms and Alphabet [8][9] Group 3: Investment Rationale - Companies across all sectors are increasingly reliant on technology for growth, leading to sustained demand for tech stocks [12][13] - The trend of technology integration into various industries is expected to continue, reinforcing the growth potential of tech investments [12] Group 4: Identifying Top Tech Stocks - A quality screen for selecting tech stocks includes criteria such as a long-term estimated earnings-per-share growth rate of at least 15% and expected revenue growth of at least 15% annually over the next two years [19][20] - Stocks must have at least ten analysts covering them and a consensus Buy rating of 2.5 or lower to be considered for investment [20][21]

MPS Management August 2, 2024 Forward Looking Statements This presentation includes forward-looking statements that involve risks and uncertainties, including our belief in continued expansion of our product lines, advances in our technology, anticipated market opportunities, gross margin targets, net & operating margin targets, inventory targets, continuing business diversification, growth and opportunities in China and Taiwan, and increasing sales penetration in Japan, Korea, the U.S., Singapore and Europ ...