MPS(MPWR) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, with detailed notes Condensed Consolidated Balance Sheets This section details the company's financial position, presenting assets, liabilities, and equity for the reported periods | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total assets | $3,972,210 | $3,617,097 | $355,113 | 9.8% | | Total liabilities | $570,142 | $471,330 | $98,812 | 21.0% | | Total stockholders' equity | $3,402,068 | $3,145,767 | $256,301 | 8.1% | | Cash and cash equivalents | $787,382 | $691,816 | $95,566 | 13.8% | | Short-term investments | $358,695 | $171,130 | $187,565 | 109.6% | | Inventories | $490,642 | $419,611 | $71,031 | 16.9% | Condensed Consolidated Statements of Operations This section presents the company's financial performance, including revenue, net income, and diluted EPS for the reported periods | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | :------- | | Revenue | $664,574 | $507,431 | $157,143 | 31.0% | | Net income | $133,726 | $100,366 | $33,360 | 33.2% | | Diluted EPS | $2.78 | $2.05 | $0.73 | 35.6% | | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :------------------------------------------- | :------------------------------------------- | :-------------------- | :------- | | Revenue | $1,302,128 | $965,316 | $336,812 | 34.9% | | Net income | $267,517 | $192,907 | $74,610 | 38.7% | | Diluted EPS | $5.57 | $3.94 | $1.63 | 41.4% | Condensed Consolidated Statements of Comprehensive Income This section details the company's comprehensive income, including net income and other comprehensive income components | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | :------- | | Comprehensive income | $153,359 | $96,421 | $56,938 | 59.0% | | Foreign currency translation adjustments | $19,634 | $(4,313) | $23,947 | -555.2% | | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | :-------------------- | :------- | | Comprehensive income | $292,337 | $175,475 | $116,862 | 66.6% | | Foreign currency translation adjustments | $24,773 | $(18,135) | $42,908 | -236.6% | Condensed Consolidated Statements of Stockholders' Equity This section outlines changes in stockholders' equity, including dividends, stock-based compensation, and stock repurchases | Metric | June 30, 2025 (in thousands) | January 1, 2025 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Total stockholders' equity | $3,402,068 | $3,145,767 | $256,301 | 8.1% | | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | % Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :----- | :------- | | Dividends declared per share | $1.56 | $1.25 | $0.31 | 24.8% | | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | :-------------------- | :------- | | Dividends declared per share | $3.12 | $2.50 | $0.62 | 24.8% | | Stock-based compensation expense | $112,914 | $98,227 | $14,687 | 14.9% | | Repurchases of common stock | $(2,484) | $(8,626) | $6,142 | -71.2% | Condensed Consolidated Statements of Cash Flows This section presents the company's cash flow activities from operations, investing, and financing for the reported periods | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------------------------- | :------------------------------------------- | :------------------------------------------- | :-------------------- | :------- | | Net cash provided by operating activities | $494,024 | $389,026 | $104,998 | 27.0% | | Net cash used in investing activities | $(273,283) | $(269,366) | $(3,917) | 1.5% | | Net cash used in financing activities | $(135,327) | $(123,638) | $(11,689) | 9.5% | | Net increase (decrease) in cash, cash equivalents and restricted cash | $95,583 | $(10,581) | $106,164 | -1003.3% | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements Note 1. BASIS OF PRESENTATION This note explains the basis of presentation for the unaudited financial statements, confirming U.S. GAAP compliance and no significant accounting policy changes - The financial statements are unaudited and prepared in accordance with SEC rules and U.S. GAAP, reflecting only normal recurring adjustments[22][23] - No changes to the Company's significant accounting policies occurred during the three and six months ended June 30, 2025[24] - New accounting pronouncements, ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation), are effective for annual periods beginning January 1, 2025, and January 1, 2027, respectively, and will result in expanded disclosures[26][27] Note 2. REVENUE RECOGNITION This note details the company's revenue recognition policies, primarily from product sales, with a significant portion made through third-party distributors - Revenue is primarily generated from product sales, including integrated circuits and power modules, with royalty and wafer testing services being insignificant[28] - 83% of total sales for the three and six months ended June 30, 2025, were made through distribution arrangements, a decrease from 89% in the prior year[29] - Variable consideration, including price adjustments and stock rotation rights, reduces the transaction price and is recognized in the same period as the associated revenue[33][34] | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Customer prepayments | $7,200 | $6,900 | $300 | 4.3% |