MPS(MPWR) - 2025 Q2 - Quarterly Results

Press Release Overview Q2 2025 Financial Highlights MPS announced Q2 2025 financial results, with revenue up 31.0% YoY to $664.6 million and strong GAAP and non-GAAP profit growth Key Financial Data for Q2 2025 (GAAP vs. Non-GAAP) | Metric | Q2 2025 (Million USD) | Q2 2024 (Million USD) | YoY Growth | Q1 2025 (Million USD) | QoQ Growth | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 664.6 | 507.4 | 31.0% | 637.6 | 4.2% | | GAAP Gross Margin | 55.1% | 55.3% | -0.2 pp | - | - | | Non-GAAP Gross Margin | 55.5% | 55.7% | -0.2 pp | - | - | | GAAP Operating Expenses | 201.3 | 164.0 | 22.7% | - | - | | Non-GAAP Operating Expenses | 137.6 | 111.7 | 23.2% | - | - | | GAAP Operating Income | 164.8 | 116.5 | 41.5% | - | - | | Non-GAAP Operating Income | 231.2 | 171.0 | 35.2% | - | - | | GAAP Net Income | 133.7 | 100.4 | 33.2% | - | - | | Non-GAAP Net Income | 202.2 | 155.1 | 30.4% | - | - | | GAAP Diluted EPS | 2.78 | 2.05 | 35.6% | - | - | | Non-GAAP Diluted EPS | 4.21 | 3.17 | 32.8% | - | - | Six Months Ended June 30, 2025 Financial Highlights For H1 2025, MPS revenue reached $1.3021 billion, up 34.9% YoY, showing substantial GAAP and non-GAAP net income and EPS growth Key Financial Data for H1 2025 (GAAP vs. Non-GAAP) | Metric | H1 2025 (Million USD) | H1 2024 (Million USD) | YoY Growth | | :--- | :--- | :--- | :--- | | Revenue | 1,302.1 | 965.3 | 34.9% | | GAAP Gross Margin | 55.2% | 55.2% | 0.0 pp | | Non-GAAP Gross Margin | 55.6% | 55.7% | -0.1 pp | | GAAP Operating Expenses | 385.7 | 321.0 | 20.2% | | Non-GAAP Operating Expenses | 271.1 | 215.1 | 26.0% | | GAAP Operating Income | 333.5 | 212.0 | 57.3% | | Non-GAAP Operating Income | 452.8 | 322.6 | 40.4% | | GAAP Net Income | 267.5 | 192.9 | 38.7% | | Non-GAAP Net Income | 396.0 | 292.6 | 35.3% | | GAAP Diluted EPS | 5.57 | 3.94 | 41.4% | | Non-GAAP Diluted EPS | 8.25 | 5.98 | 37.9% | Revenue by End Market Q2 and H1 2025 saw significant growth across key end markets, with Storage & Computing emerging as the largest revenue contributor Revenue by End Market (Thousand USD) | End Market | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Storage & Computing | 195,320 | 114,955 | 383,831 | 221,076 | | Automotive | 145,132 | 87,193 | 290,036 | 174,285 | | Enterprise Data | 143,964 | 187,211 | 276,888 | 336,938 | | Communications | 73,783 | 43,566 | 145,454 | 90,211 | | Consumer | 59,663 | 42,229 | 116,610 | 80,303 | | Industrial | 46,712 | 32,277 | 89,309 | 62,503 | | Total | 664,574 | 507,431 | 1,302,128 | 965,316 | CEO Statement CEO Michael Hsing affirmed MPS's long-term growth strategy, emphasizing its transition to a comprehensive silicon-based solutions provider - CEO Michael Hsing emphasized the company's transition from a "single-chip semiconductor supplier" to a "comprehensive silicon-based solutions provider," with its long-term growth strategy remaining unchanged[5] Business Outlook Q3 2025 Financial Targets MPS forecasts Q3 2025 revenue of $710-730 million, with GAAP gross margin at 54.9-55.5% and non-GAAP at 55.2-55.8% Q3 2025 Financial Targets | Metric | Range (Million USD) | | :--- | :--- | | Revenue | $710.0 - $730.0 | | GAAP Gross Margin | 54.9% - 55.5% | | Non-GAAP Gross Margin | 55.2% - 55.8% | | GAAP Operating Expenses | $201.3 - $207.3 | | Non-GAAP Operating Expenses | $143.0 - $147.0 | | Stock-based Compensation and Related Expenses | $60.1 - $62.1 (approximately $1.8 included in cost of sales) | | Interest and Other Income (excluding foreign exchange gains/losses) | $6.4 - $6.8 | | Non-GAAP Tax Rate (2025) | 15% | | Fully Diluted Shares | 47.9 - 48.3 (Million Shares) | Non-GAAP Financial Measures Explanation MPS uses non-GAAP metrics to evaluate core operational performance, providing a comprehensive view of results and trends when combined with GAAP, enhancing comparability - MPS uses non-GAAP financial measures (such as non-GAAP net income, gross margin, operating expenses, operating income, other income, and income before income taxes) to evaluate core operational performance, believing they provide a more comprehensive view of operating results and trends when used in conjunction with GAAP metrics[6] - Non-GAAP measures primarily exclude the impact of stock-based compensation and related expenses, deferred compensation plan expenses, amortization of acquisition-related intangible assets, and related tax effects[6] - The company advises investors that non-GAAP financial measures used by other companies may not be comparable to those used by MPS[6][8] Additional Information Earnings Commentary & Webinar MPS has published Q2 2025 operating results commentary and will host a Q&A webinar on July 31, 2025, to discuss financial performance - Operating results commentary for the quarter ended June 30, 2025, is available on the MPS investor relations website[9] - MPS plans to host a Q&A session via Zoom webinar on July 31, 2025, at 2:00 PM PT / 5:00 PM ET to discuss financial results[10] Safe Harbor Statement This press release and webinar contain forward-looking statements about future performance, subject to risks and uncertainties that could cause actual results to differ materially - This press release contains forward-looking statements regarding expectations for future revenue, gross margin, operating expenses, market outlook, new product development, market share growth, and expense reductions[11] - These statements are based on current expectations but involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from those stated[11] - Risk factors include global economic uncertainties (such as the Russia-Ukraine conflict, Middle East conflicts, and inflation), changes in government regulations, export controls, market acceptance of products, supply chain limitations, industry competition, acquisition integration risks, and litigation risks[11] Company Information MPS is a fabless global company providing high-performance, semiconductor-based power electronics solutions, leveraging deep system-level knowledge and proprietary technology - Monolithic Power Systems (MPS) is a fabless global company focused on providing high-performance, semiconductor-based power electronics solutions[12] - The company's mission is to reduce energy and material consumption to improve all aspects of quality of life[12] - MPS's core strengths include deep system-level knowledge, strong semiconductor expertise, and innovative proprietary technologies in semiconductor processes, system integration, and packaging[12] Contact Information Investors can contact Bernie Blegen, Executive Vice President and Chief Financial Officer, for further information - Investors may contact Bernie Blegen, Executive Vice President and Chief Financial Officer, at MPSInvestor.Relations@monolithicpower.com or by phone at 408-826-0777[14] Financial Statements (Unaudited) Condensed Consolidated Balance Sheets As of June 30, 2025, MPS's total assets increased to $3.9722 billion, up 9.8% from December 31, 2024, driven by cash and short-term investments Condensed Consolidated Balance Sheets Summary (Thousand USD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets: | | | | Cash and Cash Equivalents | 787,382 | 691,816 | | Short-term Investments | 358,695 | 171,130 | | Inventory | 490,642 | 419,611 | | Total Current Assets | 1,918,757 | 1,565,053 | | Net Deferred Tax Assets | 1,309,981 | 1,326,840 | | Total Assets | 3,972,210 | 3,617,097 | | Liabilities: | | | | Total Current Liabilities | 383,508 | 294,567 | | Total Liabilities | 570,142 | 471,330 | | Stockholders' Equity: | | | | Retained Earnings | 2,603,177 | 2,487,461 | | Total Stockholders' Equity | 3,402,068 | 3,145,767 | | Total Liabilities and Stockholders' Equity | 3,972,210 | 3,617,097 | Condensed Consolidated Statements of Operations In Q2 2025, MPS reported revenue of $664.6 million and net income of $133.7 million; H1 revenue was $1.3021 billion and net income $267.5 million, reflecting significant profit growth Condensed Consolidated Statements of Operations Summary (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 664,574 | 507,431 | 1,302,128 | 965,316 | | Cost of Sales | 298,558 | 226,853 | 582,882 | 432,297 | | Gross Profit | 366,016 | 280,578 | 719,246 | 533,019 | | Research and Development Expenses | 96,266 | 77,945 | 188,493 | 153,935 | | Selling, General and Administrative Expenses | 104,992 | 86,097 | 197,236 | 167,061 | | Total Operating Expenses | 201,258 | 164,042 | 385,729 | 320,996 | | Operating Income | 164,758 | 116,536 | 333,517 | 212,023 | | Other Income, Net | 12,220 | 7,512 | 17,351 | 17,052 | | Income Before Income Taxes | 176,978 | 124,048 | 350,868 | 229,075 | | Income Tax Expense | 43,252 | 23,682 | 83,351 | 36,168 | | Net Income | 133,726 | 100,366 | 267,517 | 192,907 | | Diluted Earnings Per Share | 2.78 | 2.05 | 5.57 | 3.94 | GAAP to Non-GAAP Reconciliations (Unaudited) Net Income Reconciliation MPS's non-GAAP net income for Q2 and H1 2025 significantly exceeded GAAP net income after adjustments for stock-based compensation and other non-cash items, reflecting core profitability Net Income Reconciliation (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income (GAAP) | 133,726 | 100,366 | 267,517 | 192,907 | | Stock-based Compensation and Related Expenses | 60,280 | 52,704 | 114,091 | 104,473 | | Amortization of Acquisition-related Intangible Assets | 320 | 372 | 640 | 663 | | Net Deferred Compensation Plan Expenses | 281 | 106 | 275 | 153 | | Tax Impact | 7,573 | 1,528 | 13,470 | (5,628) | | Non-GAAP Net Income | 202,180 | 155,076 | 395,993 | 292,568 | | Non-GAAP Diluted Earnings Per Share | 4.21 | 3.17 | 8.25 | 5.98 | Gross Margin Reconciliation Non-GAAP gross margin for Q2 and H1 2025 was slightly higher than GAAP gross margin, after excluding stock-based compensation and other expenses, indicating strong core business gross profit Gross Margin Reconciliation (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Gross Profit (GAAP) | 366,016 | 280,578 | 719,246 | 533,019 | | Gross Margin (GAAP) | 55.1% | 55.3% | 55.2% | 55.2% | | Stock-based Compensation and Related Expenses | 1,915 | 1,635 | 3,621 | 3,535 | | Amortization of Acquisition-related Intangible Assets | 287 | 339 | 574 | 597 | | Deferred Compensation Plan Expenses | 605 | 100 | 442 | 540 | | Non-GAAP Gross Profit | 368,823 | 282,652 | 723,883 | 537,691 | | Non-GAAP Gross Margin | 55.5% | 55.7% | 55.6% | 55.7% | Operating Expenses Reconciliation Non-GAAP operating expenses for Q2 and H1 2025 were lower than GAAP operating expenses, after excluding stock-based compensation and other expenses, indicating effective core operational cost control Operating Expenses Reconciliation (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Operating Expenses (GAAP) | 201,258 | 164,042 | 385,729 | 320,996 | | Stock-based Compensation and Related Expenses | (58,365) | (51,069) | (110,470) | (100,938) | | Amortization of Acquisition-related Intangible Assets | (33) | (33) | (66) | (66) | | Deferred Compensation Plan Expenses | (5,256) | (1,273) | (4,063) | (4,899) | | Non-GAAP Operating Expenses | 137,604 | 111,667 | 271,130 | 215,093 | Operating Income Reconciliation Non-GAAP operating income for Q2 and H1 2025 exceeded GAAP operating income, after adding back stock-based compensation and other expenses, demonstrating strong core business operational performance Operating Income Reconciliation (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Operating Income (GAAP) | 164,758 | 116,536 | 333,517 | 212,023 | | Stock-based Compensation and Related Expenses | 60,280 | 52,704 | 114,091 | 104,473 | | Amortization of Acquisition-related Intangible Assets | 320 | 372 | 640 | 663 | | Deferred Compensation Plan Expenses | 5,861 | 1,373 | 4,505 | 5,439 | | Non-GAAP Operating Income | 231,219 | 170,985 | 452,753 | 322,598 | Other Income, Net Reconciliation Non-GAAP other income, net, for Q2 and H1 2025 was slightly lower than GAAP other income, net, after excluding deferred compensation plan income Other Income, Net Reconciliation (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Other Income, Net (GAAP) | 12,220 | 7,512 | 17,351 | 17,052 | | Deferred Compensation Plan Income | (5,580) | (1,266) | (4,230) | (5,285) | | Non-GAAP Other Income, Net | 6,640 | 6,246 | 13,121 | 11,767 | Income Before Income Taxes Reconciliation Non-GAAP income before income taxes for Q2 and H1 2025 exceeded GAAP income before income taxes, after adjusting for stock-based compensation and other non-cash items, highlighting core profitability Income Before Income Taxes Reconciliation (Thousand USD) | Item | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Income Before Income Taxes (GAAP) | 176,978 | 124,048 | 350,868 | 229,075 | | Stock-based Compensation and Related Expenses | 60,280 | 52,704 | 114,091 | 104,473 | | Amortization of Acquisition-related Intangible Assets | 320 | 372 | 640 | 663 | | Net Deferred Compensation Plan Expenses | 281 | 106 | 275 | 153 | | Non-GAAP Income Before Income Taxes | 237,859 | 177,230 | 465,874 | 334,364 | Q3 2025 Outlook: Gross Margin Reconciliation MPS projects Q3 2025 non-GAAP gross margin between 55.2% and 55.8%, slightly above GAAP forecasts after adjusting for stock-based compensation and other expenses Q3 2025 Outlook: Gross Margin Reconciliation | Item | Q3 2025 (Low) | Q3 2025 (High) | | :--- | :--- | :--- | | Gross Margin (GAAP) | 54.9% | 55.5% | | Stock-based Compensation and Other Expenses | 0.3% | 0.3% | | Non-GAAP Gross Margin | 55.2% | 55.8% | Q3 2025 Outlook: Operating Expenses Reconciliation MPS anticipates Q3 2025 non-GAAP operating expenses to range from $143 million to $147 million, significantly lower than GAAP forecasts after exclusions Q3 2025 Outlook: Operating Expenses Reconciliation (Thousand USD) | Item | Q3 2025 (Low) | Q3 2025 (High) | | :--- | :--- | :--- | | Operating Expenses (GAAP) | 201,300 | 207,300 | | Stock-based Compensation and Other Expenses | (58,300) | (60,300) | | Non-GAAP Operating Expenses | 143,000 | 147,000 |