10-QPeriod: Q2 FY2023

MONOLITHIC POWER SYSTEMS INC Quarterly Report for Q2 Ended Jun 30, 2023

Filed August 4, 2023For Securities:MPWR

Summary

Monolithic Power Systems Inc. (MPWR) reported its financial results for the quarter and six months ended June 30, 2023. The company experienced a slight revenue decrease of 4.3% year-over-year for the quarter, bringing in $441.1 million, primarily due to lower shipment volumes, although this was partially offset by higher average selling prices. For the six-month period, revenue increased by 6.4% to $892.2 million, driven by increased average selling prices outweighing a decrease in shipment volume. Profitability saw a decrease in the quarter, with Net Income falling to $99.5 million ($2.04 diluted EPS) from $114.7 million ($2.37 diluted EPS) in the prior year's quarter. The gross margin also declined to 56.1% from 58.8% year-over-year for the quarter, attributed to higher manufacturing overhead costs. Research and development expenses increased, while Selling, General & Administrative (SG&A) expenses remained relatively flat year-over-year. The company ended the period with a strong cash position, with $507 million in cash and cash equivalents and $433.5 million in short-term investments.

Financial Highlights

49 data points
Beta

Revenue

$441.13M

56.1% Gross Margin

Net Income

$99.50M

22.6% Net Margin

EPS (Diluted)

$2.04

Total Assets

$2.22B

Cash & Equivalents

$506.96M

Free Cash Flow

$82.36M

Financial Statements
Beta
Revenue$441.13M
Cost of Revenue$193.45M
Gross Profit$247.68M
SG&A Expenses$71.66M
Operating Expenses$135.35M
Operating Income$112.33M
Net Income$99.50M
EPS (Basic)$2.10
EPS (Diluted)$2.04
Shares Outstanding (Basic)47.49M
Shares Outstanding (Diluted)48.76M

Key Highlights

  • 1Revenue for the second quarter of 2023 was $441.1 million, a decrease of 4.3% compared to $461.0 million in the second quarter of 2022, primarily due to lower shipment volumes.
  • 2Net income for the second quarter of 2023 was $99.5 million, or $2.04 per diluted share, compared to $114.7 million, or $2.37 per diluted share, in the second quarter of 2022.
  • 3Gross margin for the second quarter of 2023 was 56.1%, down from 58.8% in the second quarter of 2022, impacted by higher manufacturing overhead costs.
  • 4Revenue for the six months ended June 30, 2023, increased by 6.4% to $892.2 million, compared to $838.7 million for the same period in 2022, driven by higher average selling prices.
  • 5The Automotive market showed significant growth, with revenue increasing by 71.1% year-over-year for the quarter and 81.5% for the six-month period.
  • 6The company maintained a strong liquidity position with $507.0 million in cash and cash equivalents and $433.5 million in short-term investments as of June 30, 2023.
  • 7Research and Development expenses increased to $63.7 million for the quarter and $127.4 million for the six months, reflecting increased new product development expenses.

Frequently Asked Questions

The primary driver for the 4.3% revenue decrease in the second quarter of 2023 was lower shipment volumes across several market segments. This was partially offset by higher average selling prices, mainly due to a favorable product mix.

Net income decreased to $99.5 million ($2.04 per diluted share) in Q2 2023 from $114.7 million ($2.37 per diluted share) in Q2 2022. This decline was accompanied by a decrease in gross margin to 56.1% from 58.8%, largely due to increased manufacturing overhead costs.

The Automotive market demonstrated strong growth, with revenue up 71.1% year-over-year. Conversely, the Enterprise Data and Consumer markets experienced significant declines of 26.4% and 33.0%, respectively, in the second quarter.

As of June 30, 2023, Monolithic Power Systems held $507.0 million in cash and cash equivalents and $433.5 million in short-term investments, indicating a robust liquidity position. The company believes these resources, along with operational cash flow, will be sufficient for its liquidity needs for the next 12 months and beyond.