Monolithic Power Systems, Inc.
MPWR · Nasdaq
Next quarter
Expected to report Feb 4, 2027 — estimated from last year’s reporting date.
Consensus is $7.16 EPS for Dec 2026 across 6 estimates, ranging $6.58 to $7.56.
MPWR Sep 2026
- 11.32%
- +1.07%
- $6.80
- $6.03
- —
- $1.20B
Reported results
- $1.20B
- 55.35%
- $357.69M
- 29.75%
- $271.07M
- $5.51
Highlights
- Record revenue: Q3 revenue was $1,202.4 million, up 22.6% sequentially and 63.1% year over year, marking the first quarter above $1 billion.
- EPS comparison: The supplied analyst data lists EPS of $6.03 versus $6.80 consensus, an 11.3% miss. The release itself reports GAAP diluted EPS of $5.51 and non-GAAP diluted EPS of $8.19, so its GAAP figure does not match the supplied reported-EPS figure.
- AI and communications demand: Enterprise Data revenue rose 33.2% sequentially to $506.7 million, while Communications rose 42.5% to $187.4 million; both more than doubled year over year.
- GAAP profitability: Net income was $271.1 million, up 5.4% sequentially and 50.8% year over year. GAAP operating margin was 29.7%, down from 31.0% in Q2 but up from 26.5% a year earlier.
- Non-GAAP results: Non-GAAP net income was $402.7 million and diluted EPS was $8.19, up 25.8% and 26.0% sequentially, respectively; non-GAAP operating margin reached 38.6%.
- Fourth-quarter outlook: MPS forecasts revenue of $1,315 million to $1,385 million, implying sequential growth of about 9% to 15% from Q3, with non-GAAP gross margin of 55.5% to 56.1%.
- Capital returns and liquidity: MPS repurchased $453.4 million of stock in Q3, and the board added $500 million to repurchase authorization, bringing it to $1 billion. Cash, equivalents and short-term investments ended at $1,091.2 million.
- Capacity and adjacencies: Revenue-support capacity has surpassed $6 billion annually; MPS expects $8 billion by the second half of 2027. It also cited initial 48V automotive orders, robotics ramps and sampling GaN solutions for 800V data centers.
Analysis
MPS delivered a record quarter, with revenue of $1,202.4 million rising 22.6% from Q2 and 63.1% from a year earlier. GAAP net income increased to $271.1 million from $257.3 million in Q2 and $179.8 million in Q3 2025; GAAP diluted EPS was $5.51 versus $5.22 and $3.74, respectively. The supplied analyst data gives reported EPS of $6.03 against $6.80 consensus, an 11.3% miss, but that reported figure conflicts with the earnings release, which states GAAP diluted EPS of $5.51. The release also reports non-GAAP diluted EPS of $8.19, up from $6.50 in Q2 and $4.73 a year ago.
The defining feature was the acceleration in AI-related and adjacent demand: Enterprise Data reached $506.7 million, up 33.2% sequentially, and Communications reached $187.4 million, up 42.5%. GAAP gross margin edged up to 55.4%, but operating expenses increased 29.8% sequentially to $307.9 million and GAAP operating margin fell 1.3 points to 29.7%. Stock-based compensation and related expenses rose to $106.3 million. Looking ahead, Q4 revenue guidance of $1,315 million to $1,385 million points to further sequential growth, while capacity expansion and new automotive, robotics and data-center products extend the growth agenda.
AI and communications demand
Enterprise Data and Communications together generated $694.1 million, or 57.7% of Q3 revenue. Enterprise Data grew on higher sales of power-management solutions for AI and server applications; MPS said demand from existing customers is expected to continue into 2027. Communications growth reflected stronger sales for optical modules and switches. Both markets also expanded as a share of revenue from Q2.
- Enterprise Data: Revenue was $506.7 million, up 33.2% sequentially and 164.6% year over year, representing 42.1% of sales versus 38.8% in Q2.
- Communications: Revenue was $187.4 million, up 42.5% sequentially and 134.7% year over year; its share of sales rose to 15.6% from 13.4%.
- Other markets: Automotive revenue increased 15.0% sequentially to $180.7 million, helped by ADAS power solutions. Industrial rose 30.2% to $71.4 million and Consumer rose 12.6% to $64.0 million. Storage and Computing declined 3.8% to $192.2 million.
Margins and expenses
Revenue growth translated into higher operating income, but the GAAP margin profile was mixed: gross margin improved slightly while operating margin contracted sequentially as expenses rose faster than sales. The difference between GAAP and non-GAAP results was especially large this quarter, reflecting $106.3 million of stock-based compensation and related expenses, including approximately $3.7 million in cost of goods sold.
- GAAP: Gross margin was 55.4%, up 0.2 percentage points from Q2 and 0.3 points year over year. Operating income rose to $357.7 million from $303.9 million in Q2, while operating margin declined to 29.7% from 31.0%.
- Non-GAAP: Gross margin was 55.7% and operating income was $464.5 million, for a 38.6% operating margin. Non-GAAP net income of $402.7 million and diluted EPS of $8.19 were up 25.8% and 26.0% sequentially.
- Expense growth: GAAP operating expenses increased to $307.9 million from $237.2 million in Q2; non-GAAP operating expenses were $205.3 million, up from $177.6 million.
Fourth-quarter outlook
Management forecast another step up in revenue for the quarter ending December 31, 2026. The midpoint of the revenue range is $1.35 billion, about 12.3% above Q3. The gross-margin range is broadly consistent with Q3, while operating expenses are expected to rise further. The outlook includes substantial stock-based compensation, making the distinction between GAAP and non-GAAP expense guidance important.
- Revenue and gross margin: Revenue is forecast at $1,315 million to $1,385 million; GAAP gross margin at 55.2% to 55.8% and non-GAAP gross margin at 55.5% to 56.1%.
- Operating expenses: GAAP operating expenses are forecast at $334 million to $342 million; non-GAAP operating expenses at $216.8 million to $220.8 million.
- Other assumptions: Stock-based compensation and related expenses are expected to be $121 million to $125 million, including about $3.8 million in cost of goods sold. The non-GAAP tax-rate outlook for 2026 remains 15%, with 48.9 million to 49.3 million diluted shares expected.
Capacity and new products
MPS framed the quarter as evidence that its diversified growth strategy is gaining traction and paired the demand commentary with a capacity build-out plan. Capacity now supports more than $6 billion of annual revenue, with $8 billion targeted by the second half of 2027 and $10 billion as a longer-term goal. New offerings are intended to broaden participation beyond current AI and server demand.
- Automotive: MPS received first orders for 48V power solutions and expects 48V and zonal-architecture design wins to contribute to growth in 2027.
- New applications: The company said robotics solutions using sensor and motor-control products are ramping across multiple geographies, and a first large data-converter design win is expected to ramp in 2027.
- Data-center portfolio: MPS began sampling GaN-based solutions for 800V data-center architectures to complement its SiC designs, while also citing continued expansion in high-speed memory products.
Cash and repurchases
Operating cash flow increased sequentially, while cash and short-term investments fell as the company made substantial repurchases. Working capital also expanded alongside the higher revenue base: receivables and inventory both rose, though inventory days calculated on current-quarter revenue improved.
- Cash flow and liquidity: Operating cash flow was $289.9 million, compared with $227.9 million in Q2. Cash, cash equivalents and short-term investments were $1,091.2 million, down from $1,413.8 million at the prior quarter-end.
- Working capital: Accounts receivable was $461.6 million and days sales outstanding rose to 35 from 32. Inventory increased to $764.9 million; inventory days on current-quarter revenue fell to 130 from 140, while the next-quarter-revenue measure rose to 117 from 115.
- Capital return: MPS repurchased $453.4 million of stock in Q3, versus $4.0 million in Q2. An additional $500 million authorization in October brought total current authorization to $1 billion.
