10-QPeriod: Q3 FY2021

MONOLITHIC POWER SYSTEMS INC Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 8, 2021For Securities:MPWR

Summary

Monolithic Power Systems Inc. (MPWR) reported strong financial performance for the nine months ended September 30, 2021, with revenue growing 42.5% year-over-year to $871.3 million. This growth was driven by a significant increase in unit shipments (28%) and higher average selling prices (11%) across key end markets, particularly Automotive and Industrial. The company demonstrated improved profitability with gross margins expanding to 56.4% from 55.1% in the prior year period, aided by a favorable product mix and lower manufacturing overhead. Operating expenses also increased, notably in R&D and SG&A, reflecting increased headcount and stock-based compensation. Net income rose substantially to $169.4 million for the nine months, up from $121.5 million in the prior year. The company maintains a strong liquidity position with over $742 million in cash, cash equivalents, and short-term investments as of September 30, 2021, and generated $291.8 million in operating cash flow for the period. The company noted that the COVID-19 pandemic did not materially impact its operations in this period.

Financial Highlights

48 data points
Beta

Revenue

$323.52M

57.6% Gross Margin

Net Income

$68.77M

21.3% Net Margin

EPS (Diluted)

$1.44

Total Assets

$1.50B

Cash & Equivalents

$226.21M

Free Cash Flow

$99.22M

Financial Statements
Beta
Revenue$323.52M
Cost of Revenue$137.21M
Gross Profit$186.31M
SG&A Expenses$56.29M
Operating Expenses$109.18M
Operating Income$77.13M
Net Income$68.77M
EPS (Basic)$1.50
EPS (Diluted)$1.44
Shares Outstanding (Basic)45.97M
Shares Outstanding (Diluted)47.85M

Key Highlights

  • 1Revenue increased by 42.5% to $871.3 million for the nine months ended September 30, 2021, compared to the same period in 2020.
  • 2Gross profit margin improved to 56.4% for the nine months ended September 30, 2021, up from 55.1% in the prior year period.
  • 3Net income for the nine months ended September 30, 2021, increased to $169.4 million from $121.5 million in the corresponding period of 2020.
  • 4Operating cash flow remained strong, generating $291.8 million for the nine months ended September 30, 2021.
  • 5The company ended the period with $742.0 million in cash, cash equivalents, and short-term investments, indicating a healthy liquidity position.
  • 6Significant revenue growth was observed in the Automotive (112.6%) and Industrial (64.0%) end markets for the nine-month period.
  • 7Stock-based compensation expense increased significantly, reflecting the company's equity incentive plans.

Frequently Asked Questions

Revenue growth was primarily driven by a 28% increase in overall unit shipments and an 11% increase in average selling prices, supported by strength in key end markets like Automotive and Industrial.

Profitability improved, with gross margin increasing to 56.4% for the nine months ended September 30, 2021, up from 55.1% in the prior year. This was attributed to a favorable product mix, lower manufacturing overhead costs, and a one-time benefit from a litigation settlement.

Monolithic Power Systems maintained a strong liquidity position, with cash, cash equivalents, and short-term investments totaling $742.0 million as of September 30, 2021.

The company stated that the COVID-19 pandemic did not materially and adversely impact its overall operating results or business operations during the three and nine months ended September 30, 2021. Revenue even increased across all end markets compared to the same period in 2020.