10-QPeriod: Q3 FY2019

MONOLITHIC POWER SYSTEMS INC Quarterly Report for Q3 Ended Sep 30, 2019

Filed November 1, 2019For Securities:MPWR

Summary

Monolithic Power Systems, Inc. (MPWR) reported its third-quarter and nine-month results for the period ending September 29, 2019. For the third quarter, revenue increased 5.5% year-over-year to $168.8 million, primarily driven by growth in the automotive, industrial, and computing and storage markets, while the consumer market saw a decline. Net income for the quarter was $29.5 million, resulting in diluted earnings per share of $0.64. For the first nine months of 2019, revenue grew 7.5% to $461.2 million, with notable strength in communications and industrial sectors. Net income for the year-to-date period was $76.4 million, with diluted earnings per share of $1.68. The company maintained a strong liquidity position, with cash, cash equivalents, and short-term investments totaling $418.7 million. Operating expenses, particularly R&D and SG&A, increased driven by investments in personnel and stock-based compensation, impacting operating income margins.

Financial Highlights

48 data points
Beta

Revenue

$168.81M

55.2% Gross Margin

Net Income

$29.53M

17.5% Net Margin

EPS (Diluted)

$0.64

Total Assets

$916.13M

Cash & Equivalents

$206.50M

Free Cash Flow

$62.93M

Financial Statements
Beta
Revenue$168.81M
Cost of Revenue$75.66M
Gross Profit$93.16M
SG&A Expenses$34.69M
Operating Expenses$63.13M
Operating Income$30.03M
Net Income$29.53M
EPS (Basic)$0.68
EPS (Diluted)$0.64
Shares Outstanding (Basic)43.31M
Shares Outstanding (Diluted)45.83M

Key Highlights

  • 1Revenue for Q3 2019 increased by 5.5% to $168.8 million compared to Q3 2018, driven by automotive, industrial, and computing & storage markets.
  • 2Nine-month revenue grew 7.5% to $461.2 million, with positive contributions from most end markets except consumer.
  • 3Gross margin remained strong at 55.2% for Q3 2019, slightly down from 55.6% in Q3 2018.
  • 4Operating expenses increased, with R&D expenses up 8.2% and SG&A up 17.4% for the quarter, largely due to increased compensation and stock-based compensation.
  • 5Net income for Q3 2019 was $29.5 million ($0.64/share diluted), down from $31.6 million ($0.71/share diluted) in Q3 2018.
  • 6The company reported $418.7 million in cash, cash equivalents, and short-term investments as of September 30, 2019, indicating a solid liquidity position.
  • 7China remains the largest geographic revenue contributor, accounting for approximately 63% of revenue for the nine-month period.

Frequently Asked Questions

MPWR's revenue for the third quarter of 2019 was $168.8 million, an increase of 5.5% from $159.9 million in the third quarter of 2018. This growth was primarily driven by higher sales in the automotive, industrial, and computing and storage markets.

For the third quarter of 2019, MPWR reported a net income of $29.5 million, or $0.64 per diluted share. This is a decrease from the $31.6 million, or $0.71 per diluted share, reported in the same quarter of the previous year.

As of September 30, 2019, MPWR had a strong liquidity position with $205.2 million in cash and cash equivalents and $213.5 million in short-term investments, totaling $418.7 million. This provided a working capital of $524.3 million.

Operating expenses increased in the third quarter of 2019. Research and development expenses rose by 8.2% to $27.7 million, and selling, general, and administrative (SG&A) expenses increased by 17.4% to $34.7 million. These increases were primarily attributed to higher compensation expenses and increased stock-based compensation, reflecting investments in personnel and performance-based awards.