10-QPeriod: Q3 FY2023

MONOLITHIC POWER SYSTEMS INC Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 8, 2023For Securities:MPWR

Summary

Monolithic Power Systems, Inc. (MPWR) reported its financial results for the third quarter and the first nine months of 2023. For the third quarter, revenue decreased by 4.1% year-over-year to $474.9 million, impacted by lower shipment volumes, though partially offset by higher average selling prices due to product mix. Net income for the quarter was $121.2 million, a slight decrease from $124.3 million in the prior year. For the nine-month period, revenue saw a modest increase of 2.5% to $1.37 billion, driven by higher average selling prices, despite lower shipment volumes. Net income for the first nine months rose to $330.5 million from $318.6 million in the comparable period of 2022. The company's balance sheet remains strong, with total assets growing to $2.33 billion and working capital increasing significantly. MPWR also highlighted its ongoing commitment to product development and market expansion, particularly in high-growth areas like storage and computing and enterprise data (driven by AI applications).

Financial Highlights

49 data points
Beta

Revenue

$474.87M

55.5% Gross Margin

Net Income

$121.16M

25.5% Net Margin

EPS (Diluted)

$2.48

Total Assets

$2.33B

Cash & Equivalents

$421.18M

Free Cash Flow

$148.82M

Financial Statements
Beta
Revenue$474.87M
Cost of Revenue$211.33M
Gross Profit$263.54M
SG&A Expenses$63.19M
Operating Expenses$127.97M
Operating Income$135.57M
Net Income$121.16M
EPS (Basic)$2.54
EPS (Diluted)$2.48
Shares Outstanding (Basic)47.78M
Shares Outstanding (Diluted)48.79M

Key Highlights

  • 1Revenue for Q3 2023 declined 4.1% year-over-year to $474.9 million, primarily due to lower shipment volumes.
  • 2Nine-month revenue increased 2.5% year-over-year to $1.37 billion, supported by higher average selling prices.
  • 3Net income for Q3 2023 was $121.2 million, slightly down from $124.3 million in Q3 2022.
  • 4Nine-month net income increased to $330.5 million from $318.6 million in the prior year.
  • 5The company reported strong working capital of $1.49 billion as of September 30, 2023.
  • 6Significant revenue growth was observed in the Storage and Computing (+14.7% Q3 YoY) and Enterprise Data (+31.4% Q3 YoY) segments.
  • 7The company ended the quarter with $1.04 billion in cash, cash equivalents, and short-term investments.

Frequently Asked Questions

The primary driver for the revenue decrease in the third quarter of 2023 compared to the prior year was lower shipment volumes. However, this was partially offset by higher average selling prices, mainly due to favorable product mix.

Profitability improved in the first nine months of 2023. Net income increased to $330.5 million, up from $318.6 million in the same period of 2022, indicating better cost management or higher margin product sales over the longer term.

Based on the filing, key growth areas include the Storage and Computing market, which saw a 14.7% increase in revenue for Q3 year-over-year, and the Enterprise Data market, which experienced a 31.4% increase in Q3 year-over-year revenue. The growth in Enterprise Data is specifically attributed to higher demand for generative AI applications.

Monolithic Power Systems maintained a strong liquidity position with $1.04 billion in cash, cash equivalents, and short-term investments as of September 30, 2023. The company also reported robust working capital of $1.49 billion.