Monolithic Power (NASDAQ: MPWR) Q2 profit surges and outlook tops $1.14B
Rhea-AI Filing Summary
Monolithic Power Systems reported record Q2 2026 revenue of $980.6 million, 21.9% above Q1 2026 and 47.6% above Q2 2025. GAAP gross margin was 55.2% and operating margin 31.0%. GAAP net income reached $257.3 million with diluted EPS of $5.22, while non-GAAP net income was $320.1 million with diluted EPS of $6.50.
Growth was broad-based, led by Enterprise Data revenue of $380.6 million, up 44.8% sequentially and 164.3% year over year, with all end markets growing sequentially. Cash, cash equivalents and short-term investments totaled $1,413.8 million, and Q2 operating cash flow was $227.9 million. Internal inventories were $675.8 million, with days of inventory of 140 days based on current-quarter revenue, improving from 157 days in Q1 2026.
For Q3 2026, the company forecasts revenue between $1,140 million and $1,160 million, GAAP gross margin of 55.2%–55.8% and non-GAAP gross margin of 55.4%–56.0%. The board authorized an additional $500 million for stock repurchases, bringing the current authorization to $1 billion.
Positive
- Record Q2 2026 revenue of $980.6 million, up 47.6% year over year and 21.9% sequentially, with broad-based growth across all end markets.
- GAAP diluted EPS rose to $5.22 and non-GAAP diluted EPS to $6.50, increases of 85.8% and 54.4% year over year, respectively.
- Q3 2026 revenue guidance of $1,140–$1,160 million alongside forecast non-GAAP gross margin of 55.4%–56.0% signals expectations for continued strong performance.
- The board expanded the share repurchase authorization by $500 million, bringing total buyback capacity to $1 billion, enhancing capital return flexibility.
Negative
- None.
Filing Explained
As of June 30, the filing reports shares outstanding; the $1 billion buyback remains authorization rather than reported completed repurchases.
A Form 8-K reports specified material events; this filing furnishes Monolithic Power Systems’ second-quarter results and outlook, with the Item 2.02 information and Exhibit 99.1 expressly not deemed filed.
The $1 billion stock-repurchase authorization is authorization capacity, not a reported completed repurchase or disclosed reduction in shares outstanding.
The June 30 balance sheet reports issued and outstanding shares, compared with the prior year-end figure; the filing also forecasts third-quarter diluted shares within a range.
If the higher issued share count reflects additional issuance, the supplied dilution definition means existing holders’ percentage ownership would decline absent offsetting changes; the filing does not establish that cause from the share counts alone.
The company also reports initial orders for high-speed DDR5 memory components, sampling of high-voltage AC-to-DC products for 800V data-center architectures, and a capacity goal significantly beyond $6 billion; these are disclosed developments, not completed revenue or capacity.
The next specified checkpoint is the quarter ending
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q2 2026 Revenue: $980.6 million
Q2 2026 GAAP net income: $257.3 million
Q2 2026 GAAP diluted EPS: $5.22
+5 more
8 metrics
Q2 2026 Revenue
$980.6 million
Record quarterly revenue, up 21.9% QoQ and 47.6% YoY
Q2 2026 GAAP net income
$257.3 million
Quarter ended June 30, 2026; up 33.2% QoQ and 90.6% YoY
Q2 2026 GAAP diluted EPS
$5.22
Quarter ended June 30, 2026; up 33.2% QoQ and 85.8% YoY
Q2 2026 non-GAAP diluted EPS
$6.50
Quarter ended June 30, 2026; up 27.5% QoQ and 54.4% YoY
Cash and short-term investments
$1,413.8 million
Cash, cash equivalents and short-term investments at June 30, 2026
Q2 2026 operating cash flow
$227.9 million
Operating cash flow for the quarter ended June 30, 2026
Q3 2026 revenue guidance range
$1,140–$1,160 million
Forecast revenue for quarter ending September 30, 2026
Stock repurchase authorization
$1 billion
Total current authorization after additional $500 million approval
Key Terms
non-GAAP, stock-based compensation, Deferred compensation plan expense, Days of Inventory, +1 more
5 terms
non-GAAP financial
"This earnings commentary contains references to certain non-GAAP financial measures."
Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.
stock-based compensation financial
"Total stock-based compensation and related expenses, including approximately $1.8 million charged to cost of goods sold, was $53.5 million."
Stock-based compensation is when a company pays employees, directors or consultants with shares or the right to buy shares instead of or in addition to cash. It matters to investors because issuing stock or options spreads ownership thinner (like cutting a pie into more slices), which can reduce each existing share’s claim on profits and can also change reported earnings; investors watch it to assess true cost of running the business and how management is incentivized.
Deferred compensation plan expense financial
"The differences between non-GAAP operating expenses and GAAP operating expenses ... are primarily stock-based compensation and related expenses and deferred compensation plan expense."
Days of Inventory financial
"Days of Inventory (current quarter revenue) | 140 Days | | 157 Days | | 150 Days |"
Days of inventory measures how many days, on average, a company holds goods before selling them — think of it as how long items sit on a store shelf or in a pantry. Investors use it to judge operational efficiency and risk: a lower number suggests faster sales and healthier cash flow, while a higher number can signal slow demand, excess stock or potential write-downs.
forward-looking statements regulatory
"This earnings commentary contains, and statements that will be made during the accompanying webinar will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995."
Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.
Earnings Snapshot
Revenue: $980.6 million · Guidance included
Quarter ended June 30, 2026
Revenue
$980.6 million
up 21.9% sequentially and 47.6% year over year
GAAP diluted EPS
$5.22
up 33.2% sequentially and 85.8% year over year
Non-GAAP diluted EPS
$6.50
up 27.5% sequentially and 54.4% year over year
GAAP net income
$257.3 million
up 33.2% sequentially and 90.6% year over year
Non-GAAP net income
$320.1 million
up 27.4% sequentially and 58.3% year over year
Guidance
For Q3 2026, the company forecasts revenue of $1,140–$1,160 million, GAAP gross margin of 55.2%–55.8%, non-GAAP gross margin of 55.4%–56.0%, GAAP operating expenses of $252.7–$258.7 million, non-GAAP operating expenses of $201.2–$205.2 million, and a non-GAAP tax rate of 15% for 2026.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What were Monolithic Power Systems (MPWR) Q2 2026 revenue and growth rates?
Monolithic Power Systems generated Q2 2026 revenue of $980.6 million, a 21.9% increase over Q1 2026 and 47.6% above Q2 2025. This record quarter reflected broad-based strength, particularly in Enterprise Data and Communications end markets.
What Q3 2026 financial outlook did Monolithic Power Systems (MPWR) provide?
For Q3 2026, the company forecasts revenue between $1,140 million and $1,160 million. It expects GAAP gross margin of 55.2%–55.8% and non-GAAP gross margin of 55.4%–56.0%, with non-GAAP operating expenses projected at $201.2–$205.2 million.
How strong was MPWR’s balance sheet and cash flow at the end of Q2 2026?
At June 30, 2026, cash, cash equivalents and short-term investments totaled $1,413.8 million. Q2 2026 operating cash flow was $227.9 million, while internal inventories stood at $675.8 million with days of inventory improving to 140 days on current-quarter revenue.
How did MPWR’s key end markets perform in Q2 2026?
Enterprise Data led with revenue of $380.6 million, up 44.8% sequentially and 164.3% year over year. Communications grew 18.0% sequentially, while Storage & Computing, Industrial, Automotive and Consumer all posted sequential gains, contributing to overall revenue of $980.6 million.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
______________________________________________________________________
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||
(Address of principal executive offices)(Zip Code)(1) | ||
| (Registrant’s telephone number, including area code) | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ ___________________________
(1)We have operations in multiple locations in the US, Europe and Asia and have not identified a single location as the Company’s headquarters. We are including this address to comply with the Securities and Exchange Commission’s requirements.
Item 2.02 Results of Operations and Financial Condition.
On July 30, 2026, Monolithic Power Systems, Inc. issued a press release regarding its financial results for the quarter ended June 30, 2026. The press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
The information under Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “1934 Act”), nor shall they be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the 1934 Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits.
| Exhibit | Description | |||||||
| 99.1 | Press release issued on July 30, 2026 for the quarter ended June 30, 2026. | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: July 30, 2026 | By: | /s/ Robert Dean | |||||||||
| Robert Dean | |||||||||||
| Interim Chief Financial Officer | |||||||||||
Exhibit 99.1
Monolithic Power Systems
Q2'26 Earnings Commentary
The highest quality power solutions for
Industrial Applications, Telecom Infrastructures,
Cloud Computing, Automotive, and Consumer Applications
1
Monolithic Power Systems Reports Second Quarter Results on July 30, 2026 Monolithic Power Systems, Inc. (“MPS”) reported its results after market close on July 30, 2026 and will host a question-and-answer webinar at 2:00 p.m. PT / 5:00 p.m. ET. The webinar can be accessed from the Investor Relations section of the MPS website at www.monolithicpower.com. | ||
Q2 2026 Financial Summary | (Unaudited) | ||||
| GAAP | |||||||||||||||||||||||||||||||||||
| Q2'26 | Q1'26 | Q2'25 | QoQ Change | YoY Change | |||||||||||||||||||||||||||||||
| Revenue ($M) | $ 980.6 | $ 804.2 | $ 664.6 | 21.9 | % | 47.6 | % | ||||||||||||||||||||||||||||
| Gross Margin | 55.2 | % | 55.3 | % | 55.1 | % | (0.1) pts | 0.1 pts | |||||||||||||||||||||||||||
| Opex ($M) | $ 237.2 | $ 203.9 | $ 201.3 | 16.3 | % | 17.8 | % | ||||||||||||||||||||||||||||
| Operating Margin | 31.0 | % | 30.0 | % | 24.8 | % | 1.0 pts | 6.2 pts | |||||||||||||||||||||||||||
| Net income ($M) | $ 257.3 | $ 193.2 | $ 135.0 | 33.2 | % | 90.6 | % | ||||||||||||||||||||||||||||
| Diluted EPS | $ 5.22 | $ 3.92 | $ 2.81 | 33.2 | % | 85.8 | % | ||||||||||||||||||||||||||||
| Non-GAAP | |||||||||||||||||||||||||||||||||||
| Q2'26 | Q1'26 | Q2'25 | QoQ Change | YoY Change | |||||||||||||||||||||||||||||||
| Revenue ($M) | $ 980.6 | $ 804.2 | $ 664.6 | 21.9 | % | 47.6 | % | ||||||||||||||||||||||||||||
| Gross Margin | 55.6 | % | 55.5 | % | 55.5 | % | 0.1 pts | 0.1 pts | |||||||||||||||||||||||||||
| Opex ($M) | $ 177.6 | $ 158.3 | $ 137.6 | 12.1 | % | 29.1 | % | ||||||||||||||||||||||||||||
| Operating Margin | 37.5 | % | 35.8 | % | 34.8 | % | 1.7 pts | 2.7 pts | |||||||||||||||||||||||||||
| Net income ($M) | $ 320.1 | $ 251.3 | $ 202.2 | 27.4 | % | 58.3 | % | ||||||||||||||||||||||||||||
| Diluted EPS | $ 6.50 | $ 5.10 | $ 4.21 | 27.5 | % | 54.4 | % | ||||||||||||||||||||||||||||
| Tax Rate | 15.0 | % | 15.0 | % | 15.0 | % | Flat | Flat | |||||||||||||||||||||||||||
| Revenue by End Market | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | % Change | % of Revenue | |||||||||||||||||||||||||||||||||||||||||||||
| End Market ($M) | Q2'26 | Q1'26 | Q2'25 | QoQ | YoY | Q2'26 | Q1'26 | ||||||||||||||||||||||||||||||||||||||||
| Enterprise Data | $ 380.6 | $ 262.8 | $ 144.0 | 44.8 | % | 164.3 | % | 38.8 | % | 32.7 | % | ||||||||||||||||||||||||||||||||||||
| Storage & Computing | 199.8 | 174.4 | 195.3 | 14.6 | % | 2.3 | % | 20.4 | 21.7 | ||||||||||||||||||||||||||||||||||||||
| Automotive | 157.1 | 152.4 | 145.1 | 3.1 | % | 8.2 | % | 16.0 | 18.9 | ||||||||||||||||||||||||||||||||||||||
| Communications | 131.5 | 111.5 | 73.8 | 18.0 | % | 78.3 | % | 13.4 | 13.9 | ||||||||||||||||||||||||||||||||||||||
| Consumer | 56.8 | 54.5 | 59.7 | 4.2 | % | (4.8 | %) | 5.8 | 6.8 | ||||||||||||||||||||||||||||||||||||||
| Industrial | 54.8 | 48.6 | 46.7 | 12.7 | % | 17.3 | % | 5.6 | 6.0 | ||||||||||||||||||||||||||||||||||||||
| Total | $ 980.6 | $ 804.2 | $ 664.6 | 21.9 | % | 47.6 | % | 100 | % | 100 | % | ||||||||||||||||||||||||||||||||||||
2
Ongoing Business Conditions
In the second quarter of 2026, MPS achieved record quarterly revenue of $980.6 million, 21.9% higher than the first quarter of 2026 and 47.6% higher than revenue in the second quarter of 2025.
Our quarterly performance was the result of our continued innovation, our consistent execution and the resilience of our diversified market and supply chain strategy.
Q2 2026 highlights include:
•All end markets grew sequentially with Enterprise Data growing 45% as we continued to see strong, broad-based ordering patterns.
•We extended our capacity goal significantly beyond $6B to support future revenue growth and our transformation into a full solution provider.
•We received initial orders for high-speed DDR5 memory components which we expect to grow our SAM into next year.
•We began sampling High Voltage AC to DC products for 800V data center architectures as we expand beyond our current AI and server core power solutions.
•In our Automotive market, so far this year, we have shipped products for over 1500 new sockets as we increase our footprint in both ADAS and other applications within the vehicle.
We continue to adjust to the fluid geopolitical and macro-economic environment, but our diversified market strategy remains unchanged:
•MPS focuses on innovation and solving our customers’ most challenging problems.
•We consistently invest in new technologies that open new end markets and applications.
•We continuously expand and diversify our global supply chain allowing us to capture future growth opportunities, maintain supply stability, and rapidly adapt to market changes as they occur.
“Our results demonstrate the strength of our diversified model and our continued success in transforming from a chip-only, semiconductor supplier to a full service solutions provider,” said Michael Hsing, CEO and founder of MPS.
Q2 2026 Revenue Results
MPS reported second quarter revenue of $980.6 million, 21.9% higher than the first quarter of 2026 and 47.6% higher than revenue in the second quarter of 2025. Compared with the first quarter of 2026, sales improved sequentially across all end markets.
3
In our Enterprise Data market, second quarter 2026 revenue of $380.6 million increased 44.8% from the first quarter of 2026. The sequential increase was driven by higher sales of our power management solutions for AI and server applications. Second quarter 2026 Enterprise Data revenue was up 164.3% year over year. Enterprise Data revenue represented 38.8% of our total second quarter 2026 revenue compared with 32.7% in the first quarter of 2026.
Second quarter 2026 Communications revenue of $131.5 million was up 18.0% from the first quarter of 2026 primarily as a result of higher sales of power solutions for optical modules and switches. Second quarter 2026 Communications revenue was up 78.3% year over year. Communications sales represented 13.4% of our total second quarter 2026 revenue compared with 13.9% the first quarter of 2026.
Second quarter 2026 Storage and Computing revenue of $199.8 million increased 14.6% from the first quarter of 2026 on higher sales for memory and storage power management solutions. Second quarter 2026 Storage and Computing revenue was up 2.3% year over year. Storage and Computing revenue represented 20.4% of MPS’s second quarter 2026 revenue compared with 21.7% in the first quarter of 2026.
Second quarter 2026 Industrial revenue of $54.8 million increased 12.7% from the first quarter of 2026. Second quarter 2026 Industrial revenue was up 17.3% year over year. Industrial revenue represented 5.6% of our total second quarter 2026 revenue compared with 6.0% in the first quarter of 2026.
Second quarter 2026 Consumer revenue of $56.8 million increased 4.2% from the first quarter of 2026. Second quarter 2026 Consumer revenue was down 4.8% year over year. Consumer revenue represented 5.8% of our total second quarter 2026 revenue compared with 6.8% in the first quarter of 2026.
Second quarter Automotive revenue of $157.1 million increased 3.1% from the first quarter of 2026 primarily from higher sales of Infotainment and ADAS power solutions. Second quarter 2026 Automotive revenue was up 8.2% year over year. Automotive revenue represented 16.0% of our second quarter 2026 revenue compared with 18.9% in the first quarter of 2026.
Q2 2026 Gross Margin & Operating Income
GAAP gross margin was 55.2%, 0.1 percentage points lower than the first quarter of 2026. Our GAAP operating income was $303.9 million compared to $241.2 million reported in the first quarter of 2026.
Non-GAAP gross margin for the second quarter of 2026 was 55.6%, 0.1 percentage points higher than the first quarter of 2026. Our non-GAAP operating income was $367.7 million compared to $288.0 million reported in the first quarter of 2026.
Q2 2026 Operating Expenses
GAAP operating expenses were $237.2 million in the second quarter of 2026 compared with $203.9 million in the first quarter of 2026. Non-GAAP operating expenses were $177.6 million, up from $158.3 million in the first quarter of 2026.
4
The differences between non-GAAP operating expenses and GAAP operating expenses for the quarters discussed here are primarily stock-based compensation and related expenses and deferred compensation plan expense.
Total stock-based compensation and related expenses, including approximately $1.8 million charged to cost of goods sold, was $53.5 million in the second quarter of 2026 compared with $48.5 million in the first quarter of 2026.
The Bottom Line
Second quarter 2026 GAAP net income was $257.3 million or $5.22 per fully diluted share, compared with $193.2 million or $3.92 per fully diluted share in the first quarter of 2026.
Second quarter 2026 non-GAAP net income was $320.1 million or $6.50 per fully diluted share, compared with $251.3 million or $5.10 per fully diluted share in the first quarter of 2026.
Second quarter 2026 non-GAAP tax rate of 15% was flat to the first quarter of 2026.
There were 49.3 million fully diluted shares outstanding at the end of the second quarter of 2026.
Balance Sheet and Cash Flow
Cash, cash equivalents and short-term investments were $1,413.8 million at the end of the second quarter of 2026 compared to $1,367.1 million at the end of the first quarter of 2026. For the second quarter of 2026, MPS generated operating cash flow of $227.9 million compared with first quarter of 2026 operating cash flow of $250.3 million.
Accounts receivable at the end of the second quarter of 2026 were $343.6 million, representing 32 days of sales outstanding, which was 2 days lower than the 34 days reported at the end of the first quarter of 2026.
Our internal inventories at the end of the second quarter of 2026 were $675.8 million, up from $619.2 million at the end of the first quarter of 2026. Days of inventory of 140 days at the end of the second quarter of 2026 was 17 days lower than at the end of the first quarter of 2026.
Comparing current inventory levels using next quarter’s projected revenue, days of inventory at the end of the second quarter of 121 days was 7 days lower than at the end of the first quarter of 2026.
5
| Selected Balance Sheet and Inventory Data | (Unaudited) | |||||||||||||||||||
| Q2'26 | Q1'26 | Q2'25 | ||||||||||||||||||
| Cash, Cash Equivalents, and Short-Term Investments | $ 1,413.8 M | $ 1,367.1 M | $ 1,146.1 M | |||||||||||||||||
| Operating Cash Flow | $ 227.9 M | $ 250.3 M | $ 237.6 M | |||||||||||||||||
| Accounts Receivable | $ 343.6 M | $ 302.1 M | $ 194.8 M | |||||||||||||||||
| Days of Sales Outstanding | 32 Days | 34 Days | 27 Days | |||||||||||||||||
| Internal Inventories | $ 675.8 M | $ 619.2 M | $ 490.6 M | |||||||||||||||||
| Days of Inventory (current quarter revenue) | 140 Days | 157 Days | 150 Days | |||||||||||||||||
| Days of Inventory (next quarter revenue) | 121 Days | 128 Days | 135 Days | |||||||||||||||||
Q3 2026 Business Outlook
For the third quarter of 2026 ending September 30, we are forecasting:
•Revenue in the range of $1,140 million to $1,160 million.
•GAAP gross margin in the range of 55.2% to 55.8%.
•Non-GAAP gross margin in the range of 55.4% to 56.0%, which excludes the impact from stock-based compensation and related expenses as well as the impact from amortization of acquisition-related intangible assets.
•Total stock-based compensation and related expenses in the range of $53.2 million to $55.2 million including approximately $1.7 million that would be charged to cost of goods sold.
•GAAP operating expenses between $252.7 million and $258.7 million.
•Non-GAAP operating expenses in the range of $201.2 million to $205.2 million. This estimate excludes stock-based compensation and related expenses in the range of $51.5 million to $53.5 million.
•Interest and other income in the range from $7.8 million to $8.2 million before foreign exchange gains or losses.
•Non-GAAP tax rate of 15% for 2026.
•Fully diluted shares outstanding in the range of 49.1 to 49.5 million shares.
In addition, our Board of Directors has authorized an additional $500 million for stock repurchases bringing our total current authorization to $1 billion.
For further information, contact:
Tony Balow
Vice President, Finance
Monolithic Power Systems, Inc.
MPSInvestor.Relations@monolithicpower.com
6
Safe Harbor Statement
This earnings commentary contains, and statements that will be made during the accompanying webinar will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, that should not be unduly relied upon, including under the “Q3 2026 Business Outlook” section herein, our statement regarding our business focus, our statement regarding our capacity growth goal, our statement regarding our expected shipments for the Automotive end market, our statement regarding our expected expansion of our SAM for high-speed DDR5 memory components, our statement regarding the expansion and diversification of our supply chain to allow us to capture future growth opportunities, maintain supply stability and swiftly adapt to market changes as they occur, and our statement regarding the major customer sampling of our first high speed interface products for DDR5, including, among other things, (i) projected revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, stock-based compensation and related expenses, amortization of acquisition-related intangible assets, other income before foreign exchange gains or losses, and fully diluted shares outstanding, (ii) our outlook for the third quarter of fiscal year 2026 and the near-term, medium-term and long-term prospects of MPS, including our ability to adapt to changing market conditions, performance against our business plan, our ability to grow despite the various challenges facing our business, our industry and the global economic environment, potential new business segments, our continued investment in research and development (“R&D”), expected revenue growth, customers’ acceptance of our new product offerings, the prospects of our new product development, our expectations regarding market and industry trends and prospects, and our goal to expand our capacity and the impact it may have on our business, (iii) our ability to penetrate new markets and expand our market share, (iv) our ability to reduce our expenses, and (vi) statements regarding the assumptions underlying or relating to any statement described above. These forward-looking statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve significant known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this earnings commentary and listeners to the accompanying conference call are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ include, but are not limited to, continued uncertainties in the global economy, including due to current and potential global conflicts, global tariffs, export controls and retaliatory measures and announcements regarding same, inflation, consumer sentiment and other factors; adverse events arising from orders or regulations of governmental entities, including such orders or regulations that impact our customers or suppliers, and adoption of new or amended accounting standards; adverse changes in laws and government regulations such as tariffs on imports of foreign goods, export regulations and export classifications, and tax laws or the interpretation of same, including in foreign countries where MPS has offices or operations; the effect of export controls, trade and economic sanctions regulations and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets, particularly in China; our ability to obtain governmental licenses and approvals for international trading activities or technology transfers, including export licenses; acceptance of, or demand for, our products, in particular the new products launched recently, being different than expected; our ability to increase market share in our targeted markets; difficulty in predicting or budgeting for future customer
7
demand and channel inventories, expenses and financial contingencies (including as a result of any impact from current and potential global conflicts); our ability to efficiently and effectively develop new products and receive a return on our R&D expense investment; our ability to attract new customers and retain existing customers; our ability to meet customer demand for our products due to constraints on our third-party suppliers’ ability to manufacture sufficient quantities of our products or otherwise; our ability to expand manufacturing capacity to support future growth; adverse changes in production and testing efficiency of our products; any political, cultural, military, regulatory, economic, foreign exchange and operational changes in China, where a significant portion of our manufacturing capacity comes from; any market disruptions or interruptions in our schedule of new product development releases; our ability to manage our inventory levels; adequate supply of our products from our third-party manufacturing partners; adverse changes or developments in the semiconductor industry generally, which is cyclical in nature, and our ability to adjust our operations to address such changes or developments; the ongoing consolidation of companies in the semiconductor industry; competition generally and the increasingly competitive nature of our industry; our ability to realize the anticipated benefits of companies and products that MPS acquires, and our ability to effectively and efficiently integrate these acquired companies and products into our operations; the risks, uncertainties and costs of litigation in which MPS is involved; the outcome of any upcoming trials, hearings, motions and appeals; the adverse impact on our financial performance if its tax and litigation provisions are inadequate; our ability to effectively manage our growth and attract and retain qualified personnel; the effect of epidemics and pandemics on the global economy and on our business; the risks associated with the financial market, economy, global tariffs, export controls and retaliatory measures and announcements regarding same, and geopolitical uncertainties, including current and potential global conflicts; the Company’s ability to timely and adequately remediate its material weakness; and other important risk factors identified under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K filed with the SEC on February 27, 2026. MPS assumes no obligation to update the information in this earnings commentary or in the accompanying webinar.
Non-GAAP Financial Measures
This earnings commentary contains references to certain non-GAAP financial measures. Non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP other income, net, and non-GAAP income before income taxes differ from net income, net income per share, gross margin, operating expenses, operating income, other income, net, and income before income taxes determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Non-GAAP net income and non-GAAP net income per share exclude the effect of stock-based compensation and related expenses, which include stock-based compensation expense and employer payroll taxes in relation to the stock-based compensation, amortization of acquisition-related intangible assets, net deferred compensation plan expense, and related tax effects. Non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating income excludes the effect of stock-based compensation and related expenses, amortization of
8
acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP other income, net excludes the effect of deferred compensation plan income. Non-GAAP income before income taxes excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and net deferred compensation plan expense. Projected non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, and amortization of acquisition-related intangible assets. Projected non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. MPS utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. MPS believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors’ understanding of MPS’s core operating results and trends. Additionally, MPS believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financial measures used by MPS. See the GAAP to Non-GAAP reconciliations in the tables set forth below.
About Monolithic Power Systems
MPS is a fabless global company that provides high-performance, semiconductor-based power electronics solutions. MPS’s mission is to reduce energy and material consumption to improve all aspects of quality of life and create a sustainable future. Founded in 1997 by our CEO Michael Hsing, MPS has three core strengths: deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging. These combined advantages enable MPS to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders. MPS can be contacted through its website at www.monolithicpower.com or its support offices around the world.
Monolithic Power Systems, MPS, and the MPS logo are registered trademarks of Monolithic Power Systems, Inc. in the U.S. and trademarked in certain other countries.
9
Monolithic Power Systems, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except par value)
| June 30, | December 31, | ||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| ASSETS | |||||||||||||||||
| Current assets: | |||||||||||||||||
| Cash and cash equivalents | $ | 1,005,587 | $ | 1,099,302 | |||||||||||||
| Short-term investments | 408,174 | 157,243 | |||||||||||||||
| Accounts receivable, net | 343,620 | 255,626 | |||||||||||||||
| Inventories | 675,849 | 564,649 | |||||||||||||||
| Other current assets | 44,156 | 106,982 | |||||||||||||||
| Total current assets | 2,477,386 | 2,183,802 | |||||||||||||||
| Property and equipment, net | 774,549 | 627,689 | |||||||||||||||
| Acquisition-related intangible assets, net | 8,216 | 8,790 | |||||||||||||||
| Goodwill | 25,944 | 25,944 | |||||||||||||||
| Deferred tax assets, net | 1,182,833 | 1,182,883 | |||||||||||||||
| Other long-term assets | 217,279 | 165,091 | |||||||||||||||
| Total assets | $ | 4,686,207 | $ | 4,194,199 | |||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
| Current liabilities: | |||||||||||||||||
| Accounts payable | $ | 182,224 | $ | 138,272 | |||||||||||||
| Accrued compensation and related benefits | 93,635 | 85,963 | |||||||||||||||
| Other accrued liabilities | 222,075 | 145,130 | |||||||||||||||
| Total current liabilities | 497,934 | 369,365 | |||||||||||||||
| Income tax liabilities | 75,022 | 75,022 | |||||||||||||||
| Deferred tax liabilities | 90,316 | 90,480 | |||||||||||||||
| Other long-term liabilities | 127,511 | 127,835 | |||||||||||||||
| Total liabilities | 790,783 | 662,702 | |||||||||||||||
| Commitments and contingencies | |||||||||||||||||
| Stockholders’ equity: | |||||||||||||||||
| Common stock and additional paid-in capital: $0.001 par value; shares authorized: 150,000; shares issued and outstanding: 49,142 and 48,709, respectively | 1,033,062 | 936,998 | |||||||||||||||
| Retained earnings | 2,861,853 | 2,609,651 | |||||||||||||||
| Accumulated other comprehensive income (loss) | 509 | (15,152) | |||||||||||||||
| Total stockholders’ equity | 3,895,424 | 3,531,497 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 4,686,207 | $ | 4,194,199 | |||||||||||||
10
Monolithic Power Systems, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Revenue | $ | 980,642 | $ | 664,574 | $ | 1,784,827 | $ | 1,302,128 | |||||||||||||||||||||||||||
| Cost of revenue | 439,572 | 298,558 | 798,692 | 582,882 | |||||||||||||||||||||||||||||||
| Gross profit | 541,070 | 366,016 | 986,135 | 719,246 | |||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Research and development | 118,618 | 96,266 | 219,184 | 188,493 | |||||||||||||||||||||||||||||||
| Selling, general and administrative | 118,558 | 104,992 | 221,905 | 197,236 | |||||||||||||||||||||||||||||||
| Total operating expenses | 237,176 | 201,258 | 441,089 | 385,729 | |||||||||||||||||||||||||||||||
| Operating income | 303,894 | 164,758 | 545,046 | 333,517 | |||||||||||||||||||||||||||||||
| Other income, net | 17,835 | 12,220 | 23,865 | 17,351 | |||||||||||||||||||||||||||||||
| Income before income taxes | 321,729 | 176,978 | 568,911 | 350,868 | |||||||||||||||||||||||||||||||
| Income tax expense | 64,431 | 41,969 | 118,387 | 80,807 | |||||||||||||||||||||||||||||||
| Net income | $ | 257,298 | $ | 135,009 | $ | 450,524 | $ | 270,061 | |||||||||||||||||||||||||||
| Net income per share: | |||||||||||||||||||||||||||||||||||
| Basic | $ | 5.24 | $ | 2.82 | $ | 9.17 | $ | 5.64 | |||||||||||||||||||||||||||
| Diluted | $ | 5.22 | $ | 2.81 | $ | 9.15 | $ | 5.62 | |||||||||||||||||||||||||||
| Weighted-average shares outstanding: | |||||||||||||||||||||||||||||||||||
| Basic | 49,138 | 47,887 | 49,118 | 47,869 | |||||||||||||||||||||||||||||||
| Diluted | 49,260 | 48,019 | 49,251 | 48,012 | |||||||||||||||||||||||||||||||
11
RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME
(Unaudited, in thousands, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Net income | $ | 257,298 | $ | 135,009 | $ | 450,524 | $ | 270,061 | |||||||||||||||||||||||||||
| Adjustments to reconcile net income to non-GAAP net income: | |||||||||||||||||||||||||||||||||||
| Stock-based compensation and related expenses | 53,549 | 60,280 | 102,087 | 114,091 | |||||||||||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 320 | 320 | 640 | 640 | |||||||||||||||||||||||||||||||
| Deferred compensation plan expense, net | 963 | 281 | 585 | 275 | |||||||||||||||||||||||||||||||
| Tax effect | 7,948 | 6,290 | 17,554 | 10,926 | |||||||||||||||||||||||||||||||
| Non-GAAP net income | $ | 320,078 | $ | 202,180 | $ | 571,390 | $ | 395,993 | |||||||||||||||||||||||||||
| Non-GAAP net income per share: | |||||||||||||||||||||||||||||||||||
| Basic | $ | 6.51 | $ | 4.22 | $ | 11.63 | $ | 8.27 | |||||||||||||||||||||||||||
| Diluted | $ | 6.50 | $ | 4.21 | $ | 11.60 | $ | 8.25 | |||||||||||||||||||||||||||
| Shares used in the calculation of non-GAAP net income per share: | |||||||||||||||||||||||||||||||||||
| Basic | 49,138 | 47,887 | 49,118 | 47,869 | |||||||||||||||||||||||||||||||
| Diluted | 49,260 | 48,019 | 49,251 | 48,012 | |||||||||||||||||||||||||||||||
12
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
(Unaudited, in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Gross profit | $ | 541,070 | $ | 366,016 | $ | 986,135 | $ | 719,246 | |||||||||||||||||||||||||||
| Gross margin | 55.2% | 55.1% | 55.3% | 55.2% | |||||||||||||||||||||||||||||||
| Adjustments to reconcile gross profit to non-GAAP gross profit: | |||||||||||||||||||||||||||||||||||
| Stock-based compensation and related expenses | 1,767 | 1,915 | 3,449 | 3,621 | |||||||||||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 287 | 287 | 574 | 574 | |||||||||||||||||||||||||||||||
| Deferred compensation plan expense | 2,113 | 605 | 1,470 | 442 | |||||||||||||||||||||||||||||||
| Non-GAAP gross profit | $ | 545,237 | $ | 368,823 | $ | 991,628 | $ | 723,883 | |||||||||||||||||||||||||||
| Non-GAAP gross margin | 55.6% | 55.5% | 55.6% | 55.6% | |||||||||||||||||||||||||||||||
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
(Unaudited, in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Total operating expenses | $ | 237,176 | $ | 201,258 | $ | 441,089 | $ | 385,729 | |||||||||||||||||||||||||||
| Adjustments to reconcile total operating expenses to non-GAAP total operating expenses: | |||||||||||||||||||||||||||||||||||
| Stock-based compensation and related expenses | (51,782) | (58,365) | (98,638) | (110,470) | |||||||||||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | (33) | (33) | (66) | (66) | |||||||||||||||||||||||||||||||
| Deferred compensation plan expense | (7,781) | (5,256) | (6,458) | (4,063) | |||||||||||||||||||||||||||||||
| Non-GAAP operating expenses | $ | 177,580 | $ | 137,604 | $ | 335,927 | $ | 271,130 | |||||||||||||||||||||||||||
13
RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME
(Unaudited, in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Total operating income | $ | 303,894 | $ | 164,758 | $ | 545,046 | $ | 333,517 | |||||||||||||||||||||||||||
| Adjustments to reconcile total operating income to non-GAAP total operating income: | |||||||||||||||||||||||||||||||||||
| Stock-based compensation and related expenses | 53,549 | 60,280 | 102,087 | 114,091 | |||||||||||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 320 | 320 | 640 | 640 | |||||||||||||||||||||||||||||||
| Deferred compensation plan expense | 9,894 | 5,861 | 7,928 | 4,505 | |||||||||||||||||||||||||||||||
| Non-GAAP operating income | $ | 367,657 | $ | 231,219 | $ | 655,701 | $ | 452,753 | |||||||||||||||||||||||||||
RECONCILIATION OF OTHER INCOME, NET, TO NON-GAAP OTHER INCOME, NET
(Unaudited, in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Total other income, net | $ | 17,835 | $ | 12,220 | $ | 23,865 | $ | 17,351 | |||||||||||||||||||||||||||
| Adjustments to reconcile other income, net to non-GAAP other income, net: | |||||||||||||||||||||||||||||||||||
| Deferred compensation plan income | (8,931) | (5,580) | (7,343) | (4,230) | |||||||||||||||||||||||||||||||
| Non-GAAP other income, net | $ | 8,904 | $ | 6,640 | $ | 16,522 | $ | 13,121 | |||||||||||||||||||||||||||
RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES
(Unaudited, in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| Total income before income taxes | $ | 321,729 | $ | 176,978 | $ | 568,911 | $ | 350,868 | |||||||||||||||||||||||||||
| Adjustments to reconcile income before income taxes to non-GAAP income before income taxes: | |||||||||||||||||||||||||||||||||||
| Stock-based compensation and related expenses | 53,549 | 60,280 | 102,087 | 114,091 | |||||||||||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 320 | 320 | 640 | 640 | |||||||||||||||||||||||||||||||
| Deferred compensation plan expense, net | 963 | 281 | 585 | 275 | |||||||||||||||||||||||||||||||
| Non-GAAP income before income taxes | $ | 376,561 | $ | 237,859 | $ | 672,223 | $ | 465,874 | |||||||||||||||||||||||||||
14
2026 THIRD QUARTER OUTLOOK
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
(Unaudited)
| Three Months Ending | |||||||||||||||||
| September 30, 2026 | |||||||||||||||||
| Low | High | ||||||||||||||||
| Gross margin | 55.2 | % | 55.8 | % | |||||||||||||
| Adjustment to reconcile gross margin to non-GAAP gross margin: | |||||||||||||||||
| Stock-based compensation and other expenses | 0.2 | 0.2 | |||||||||||||||
| Non-GAAP gross margin | 55.4 | % | 56.0 | % | |||||||||||||
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
(Unaudited, in thousands)
| Three Months Ending | |||||||||||||||||
| September 30, 2026 | |||||||||||||||||
| Low | High | ||||||||||||||||
| Operating expenses | $ | 252,700 | $ | 258,700 | |||||||||||||
| Adjustments to reconcile operating expenses to non-GAAP operating expenses: | |||||||||||||||||
| Stock-based compensation and other expenses | (51,500) | (53,500) | |||||||||||||||
| Non-GAAP operating expenses | $ | 201,200 | $ | 205,200 | |||||||||||||
15