10-QPeriod: Q3 FY2020

MONOLITHIC POWER SYSTEMS INC Quarterly Report for Q3 Ended Sep 30, 2020

Filed November 6, 2020For Securities:MPWR

Summary

Monolithic Power Systems, Inc. (MPWR) reported strong financial performance for the nine months ended September 30, 2020, with revenue increasing by 32.6% to $611.4 million compared to the same period in 2019. This growth was driven by robust sales across all end markets, notably communications, computing and storage, and consumer sectors, with significant contributions from Asia. The company demonstrated healthy gross margins of 55.1% for the period. Net income for the nine months rose to $121.5 million, a substantial increase from $76.4 million in the prior year, translating to diluted EPS of $2.59. The company's balance sheet remains solid, with total assets growing to $1.16 billion and a healthy working capital of $660.9 million. MPWR also generated substantial operating cash flow of $188.2 million for the nine months ended September 30, 2020, underscoring its financial stability and operational efficiency. Despite the ongoing COVID-19 pandemic, MPWR did not experience a material adverse impact on its overall operating results or business operations during the period, and has maintained strong liquidity.

Financial Highlights

48 data points
Beta

Revenue

$259.42M

55.1% Gross Margin

Net Income

$55.57M

21.4% Net Margin

EPS (Diluted)

$1.18

Total Assets

$1.16B

Cash & Equivalents

$179.59M

Free Cash Flow

$57.81M

Financial Statements
Beta
Revenue$259.42M
Cost of Revenue$116.38M
Gross Profit$143.04M
SG&A Expenses$43.50M
Operating Expenses$83.06M
Operating Income$59.98M
Net Income$55.57M
EPS (Basic)$1.24
EPS (Diluted)$1.18
Shares Outstanding (Basic)44.97M
Shares Outstanding (Diluted)46.95M

Key Highlights

  • 1Revenue surged by 32.6% to $611.4 million for the first nine months of 2020 compared to the prior year.
  • 2Net income more than doubled, reaching $121.5 million for the nine months ended September 30, 2020, up from $76.4 million in 2019.
  • 3Diluted Earnings Per Share (EPS) grew to $2.59 for the nine-month period, a significant increase from $1.68 in the prior year.
  • 4Gross margin remained strong at 55.1% for the nine months ended September 30, 2020.
  • 5Operating cash flow remained robust, totaling $188.2 million for the nine months ended September 30, 2020.
  • 6The company reported a healthy cash and short-term investment balance of $551.5 million as of September 30, 2020.
  • 7MPWR noted that the COVID-19 pandemic did not materially adversely impact its overall operating results or business operations during the period.

Frequently Asked Questions

Monolithic Power Systems reported a significant increase in revenue, which grew by 32.6% to $611.4 million for the nine months ended September 30, 2020, compared to $461.2 million for the same period in 2019. This growth was driven by strong sales across all end markets, with notable contributions from the communications, computing and storage, and consumer sectors.

Profitability saw a substantial improvement. Net income for the first nine months of 2020 increased to $121.5 million, up from $76.4 million in the prior year. This translated to diluted Earnings Per Share (EPS) of $2.59 for the nine-month period, compared to $1.68 in the same period of 2019.

MPWR maintains a strong financial position with total assets of $1.16 billion as of September 30, 2020. The company reported a healthy working capital of $660.9 million and robust operating cash flow of $188.2 million for the nine months ended September 30, 2020. Additionally, its liquidity remains strong, with $551.5 million in cash and short-term investments.

The company stated that the COVID-19 pandemic did not materially adversely impact its overall operating results or business operations during the reported periods. They continued to operate facilities, experienced no major supply chain issues, and saw revenue increase across all end markets during the third quarter of 2020.