MONOLITHIC POWER SYSTEMS INC Q1 FY2025 earnings call

• MPS achieved record Q1 2025 revenue of $637.6 million, 39.2% higher than Q1 2024. • At the March 20 Investor Day, MPS showcased innovation across robotics, automotive, data center, building automation, medical, and audio. • Storage and computing segment saw 38% QoQ revenue growth due to strong demand for memory and notebook solutions, with revenue ramps expected in the second half of 2025. • Automotive revenue increased 13% from Q4 2024, third consecutive quarter of double-digit sequential growth. • Focus on innovation, solving customer challenges, investing in new technology, expanding markets, and diversifying supply chain.

In Q1 2025, MPS achieved record quarterly revenue of $637.6 million. The storage and computing segment revenue increased 38% quarter-over-quarter on strong demand for memory and notebook solutions. The automotive segment revenue increased 13% from Q4 2024, marking the third consecutive quarter of sequential double-digit growth. Storage and computing contributed significantly to the overall revenue growth, while automotive also showed robust performance.

• Gross margin is expected to tick down by about 20 basis points at the midpoint in Q2. • Increased visibility due to design wins and qualification processes, but timing of product ramps remains outside of MPS's control. • Feeling more confident overall regarding enterprise data segment due to recent design wins and qualifications, but no specific half-year forecast provided yet.

• Uncertainty regarding customer product ramp timings which can impact revenue projections. • Potential tariff-related pull-ins/push-outs, though overall numbers remain consistent. • Timing of product ramps for enterprise data and other segments is outside MPS's control, affecting precise guidance.

Q: Tore Svanberg of Stifel asked about enterprise data segment and if Q1 2025 was the low point.

A: Michael Hsing said they feel better as customers have qualified many products and expect ramps, but timing of ramps is outside control.

Q: Quinn Bolton of Needham asked about enterprise data segment and second quarter guidance.

A: Michael Hsing stated customers have qualified products but timing of ramps is out of control, and Bernie Blegen mentioned increased visibility but range remains wide.

Q: Ross Seymore of Deutsche Bank asked about customer behavior and tariff impact.

A: Michael Hsing said there are small push/pull effects but overall numbers consistent, and Tony Balow noted other business factors like AI PC, Win 10 end support, gaming driving business.

Q: Rick Schafer of Oppenheimer asked about data center rack power and auto BMS.

A: Michael Hsing said they'll deliver samples soon and automotive has momentum from design wins in North America and Europe.

Q: Joe Quatrochi of Wells Fargo asked about storage and compute segment seasonality.

A: Michael Hsing and Bernie Blegen discussed even growth across segments and broad-based performance.

Q: Gary Mobley of Loop Capital asked about China business and customer order lead times.

A: Bernie Blegen talked about inventory levels and lead times holding well, with MPS well-positioned.

Q: Joshua Buchalter of Cowen asked about storage and compute segment share gains and enterprise data confidence.

A: Michael Hsing and Bernie Blegen mentioned increased confidence due to design wins and qualifications but timing still uncertain.

Q: William Stein of Truist asked about tariffs and new products.

A: Bernie Blegen said no direct impact on Q2 guidance, and Michael Hsing discussed leveraging know-how in new solutions.

Q: Christopher Caso of Wolfe asked about AI power in enterprise data and confidence in enterprise data.

A: Michael Hsing and Bernie Blegen talked about AI opportunities and more positive data points but range of outcomes remains.

Q: Jack Egan of Charter asked about margin outlook for new accelerators and analog cycle.

A: Bernie Blegen said no structural change in margin model, and Michael Hsing emphasized staying within margin model.

Q: Kelsey Chia of Citi Research asked about gross margin expansion and communications end market.

A: Bernie Blegen said there's room for gross margin expansion, and discussed balanced performance in communications market.