10-KPeriod: FY2021

MONOLITHIC POWER SYSTEMS INC Annual Report, Year Ended Dec 31, 2021

Filed February 25, 2022For Securities:MPWR

Summary

Monolithic Power Systems, Inc. (MPWR) reported a strong financial performance in its 2021 10-K filing, showcasing significant revenue growth and improved profitability. The company experienced a robust 43% increase in revenue to $1.21 billion, driven by broad-based demand across its key end markets, particularly automotive, computing and storage, and industrial sectors. This growth was supported by a 31% increase in unit shipments and an 8% rise in average selling prices, attributed to a favorable product mix. Profitability also saw a substantial improvement, with gross margin expanding to 56.8% from 55.2% in the prior year, benefiting from higher average selling prices and a one-time litigation settlement. Operating income grew by 65%, reflecting strong revenue growth outpacing increases in operating expenses, which themselves were managed effectively as a percentage of revenue. The company ended the year with a solid liquidity position, maintaining substantial cash and short-term investments, and continued its commitment to shareholders through increased dividend payments. MPWR's focus on high-performance, energy-efficient power solutions in growing markets positions it well for continued expansion.

Financial Highlights

49 data points
Beta

Revenue

$1.21B

56.8% Gross Margin

Net Income

$242.02M

20.0% Net Margin

EPS (Diluted)

$5.05

Total Assets

$1.59B

Cash & Equivalents

$189.39M

Free Cash Flow

$225.59M

Financial Statements
Beta
Revenue$1.21B
Cost of Revenue$522.34M
Gross Profit$685.46M
SG&A Expenses$232.41M
Operating Expenses$423.04M
Operating Income$262.42M
Net Income$242.02M
EPS (Basic)$5.28
EPS (Diluted)$5.05
Shares Outstanding (Basic)45.85M
Shares Outstanding (Diluted)47.89M

Key Highlights

  • 1Revenue increased by 43.0% to $1.21 billion in 2021, up from $844.5 million in 2020.
  • 2Gross margin improved to 56.8% in 2021, compared to 55.2% in 2020, driven by favorable product mix and average selling price increases.
  • 3Operating income grew significantly by 65% year-over-year, reaching $262.4 million.
  • 4Strong growth was observed across multiple end markets, with Automotive up 87.5%, Computing and Storage up 47.0%, and Industrial up 54.5%.
  • 5R&D expenses increased by 38.5% but decreased as a percentage of revenue to 15.8% from 16.3%.
  • 6SG&A expenses increased by 39.9% but also decreased as a percentage of revenue to 18.7% from 19.1%.
  • 7The company ended the year with $725.1 million in cash, cash equivalents, and short-term investments.

Frequently Asked Questions

MPWR reported a 43.0% increase in revenue for the year ended December 31, 2021, reaching $1.208 billion, up from $844.5 million in 2020. This growth was driven by increased unit shipments and a higher average selling price, reflecting strong demand across its key end markets.

MPWR's gross profit increased by 47.1% to $685.5 million, resulting in a gross margin of 56.8% for 2021, an improvement from 55.2% in 2020. Operating income saw a substantial increase of 65.3% to $262.4 million, and net income grew by 47.2% to $242.0 million.

The automotive market showed the strongest growth, increasing by 87.5%. The computing and storage market grew by 47.0%, and the industrial market increased by 54.5%. These segments, along with communications and consumer markets, all contributed to the overall revenue expansion.

As of December 31, 2021, MPWR had a strong liquidity position with $725.1 million in total cash, cash equivalents, and short-term investments. Working capital was $897.9 million, indicating a healthy financial footing to support ongoing operations and growth initiatives.

Key risks identified include the cyclical nature of the semiconductor industry, significant dependence on Asian markets and operations (particularly China), intense competition, potential supply chain disruptions, reliance on a limited number of customers, and the need for continuous product innovation. Geopolitical factors and international trade policies also pose risks.