01—Abstract
Summary
Summary of the 10-K filed March 1, 2018. Cited figures are marked; the original filing is the authoritative source.
Monolithic Power Systems Inc. (MPWR) reported strong growth in its 2017 fiscal year, with revenue increasing by 21.2% to $470.9 milliona, driven by broad-based demand across its key end markets, particularly in Computing and Storage, and Automotive.
The company's gross margin also improved to 54.8% from 54.3% in the prior year, indicating effective cost management and pricing power. MPWR continues to invest in research and development, with R&D expenses increasing by 11.8% to $82.4 millionb, reflecting a commitment to innovation and new product introductions.
The company also announced an increase in its quarterly cash dividend to $0.30c per share, signaling confidence in its financial health and commitment to returning value to shareholders. Despite facing challenges inherent in the cyclical semiconductor industry, MPWR's focus on high-performance, integrated power solutions across diverse markets positions it for continued growth.
02—Key points
Key Highlights
- Revenue grew 21.2% year-over-year to $470.9 million in 2017.
- Gross margin improved to 54.8% in 2017 from 54.3% in 2016.
- Research and Development expenses increased by 11.8% to $82.4 million, indicating continued investment in innovation.
- The company increased its quarterly cash dividend from $0.20 to $0.30 per share.
- Automotive revenue saw significant growth of 58.7%, driven by infotainment, safety, and connectivity applications.
- Consumer products remained the largest revenue segment, accounting for 40.3% of total revenue.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, Monolithic Power Systems kept $0.14.
- Revenue$470.9M100.0%
- Cost of revenue−$212.6M45.2%
- Gross profit$258.3M54.8%
- Operating costs−$180.9M38.4%
- Operating income$77.4M16.4%
- Interest, other & tax−$12.2M2.6%
- Net income$65.2M13.8%
Where FY2017 revenue went
$470.9M- Cost of revenue: $212.6M, 45% of revenue
- SG&A: $97.3M, 21% of revenue
- Other operating costs: $83.6M, 18% of revenue
- Net income: $65.2M, 14% of revenue
- Interest, other & tax: $12.2M, 2.6% of revenue
Kept 14% as net incomeNet income $65.2M · 14%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2017filed March 1, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $470.93M$388.67M | +21.2% |
| Cost of Revenue | $212.65M$177.79M | +19.6% |
| Gross Profit | $258.28M$210.87M | +22.5% |
| SG&A Expenses | $97.26M$83.01M | +17.2% |
| Operating Expenses | $180.86M$156.43M | +15.6% |
| Operating Income | $77.42M$54.45M | +42.2% |
| Net Income | $65.20M$52.72M | +23.7% |
| EPS (Basic) | $1.58$1.30 | +21.5% |
| EPS (Diluted) | $1.50$1.26 | +19.0% |
| Shares Outstanding (Basic) | 41.35M40.44M | +2.3% |
| Shares Outstanding (Diluted) | 43.58M41.91M | +4.0% |
05—Questions
Frequently Asked Questions
What were the main drivers of MPWR's revenue growth in 2017?
MPWR's revenue growth in 2017 was driven by strong demand across most end markets, with notable increases in Computing and Storage (up 25.1%) and Automotive (up 58.7%). This growth was fueled by increased unit shipments and a rise in average selling prices.
How did MPWR's profitability perform in 2017?
The company demonstrated improved profitability, with gross margin increasing to 54.8% in 2017 from 54.3% in 2016. Income from operations also saw a substantial increase of 42.2% year-over-year, reflecting operational efficiency and revenue growth.
What is MPWR's strategy regarding R&D?
MPWR continues to prioritize research and development, increasing R&D expenses by 11.8% to $82.4 million in 2017. This investment is focused on developing new products within existing families, expanding into new product categories, and enhancing proprietary process technologies to maintain a competitive edge.
What is MPWR's approach to capital return to shareholders?
MPWR has a shareholder-friendly capital return policy. The company increased its quarterly cash dividend by 50% to $0.30 per share, effective Q1 2018, signaling confidence in its financial stability and future cash flows. The company also has a history of stock repurchases, though none were made in 2017 as the program expired.
06—Continue