10-QPeriod: Q1 FY2026

MONOLITHIC POWER SYSTEMS INC Quarterly Report for Q1 Ended Mar 31, 2026

Filed May 4, 2026For Securities:MPWR

Summary

Monolithic Power Systems, Inc. (MPWR) reported strong financial results for the first quarter ended March 31, 2026. Revenue surged by 26.1% year-over-year to $804.2 million, driven by robust demand in the enterprise data sector, particularly for AI and server applications, along with significant growth in communications. This top-line expansion, coupled with stable gross margins at 55.3%, translated into a substantial increase in operating income, up 42.9% to $241.2 million. Net income also saw a significant rise of 43.1% to $193.2 million, with diluted EPS growing to $3.92 from $2.81 in the prior year's quarter. The company maintained a strong liquidity position with over $1.36 billion in cash, cash equivalents, and short-term investments, providing ample resources to fund operations, capital expenditures, and shareholder returns.

Financial Highlights

48 data points
Beta

Revenue

$804.18M

55.3% Gross Margin

Net Income

$193.23M

24.0% Net Margin

EPS (Diluted)

$3.92

Total Assets

$4.45B

Cash & Equivalents

$1.06B

Free Cash Flow

$179.40M

Financial Statements
Beta
Revenue$804.18M
Cost of Revenue$359.12M
Gross Profit$445.06M
SG&A Expenses$103.35M
Operating Expenses$203.91M
Operating Income$241.15M
Net Income$193.23M
EPS (Basic)$3.94
EPS (Diluted)$3.92
Shares Outstanding (Basic)49.10M
Shares Outstanding (Diluted)49.24M

Key Highlights

  • 1Revenue increased by 26.1% to $804.2 million for the first quarter of 2026, compared to $637.6 million in the prior year period.
  • 2Enterprise Data revenue saw a substantial increase of 97.7% to $262.8 million, driven by AI and server applications.
  • 3Gross margin remained strong at 55.3%, slightly down from 55.4% in the prior year, reflecting stable operational efficiency.
  • 4Operating income grew significantly by 42.9% to $241.2 million, indicating strong operational leverage.
  • 5Net income rose by 43.1% to $193.2 million, demonstrating robust profitability.
  • 6Diluted earnings per share (EPS) increased to $3.92 from $2.81 year-over-year.
  • 7The company ended the quarter with a healthy cash, cash equivalents, and short-term investment balance of $1.37 billion.

Frequently Asked Questions

Revenue growth was primarily driven by higher shipment volumes and improved average selling prices, largely due to a favorable product mix. The Enterprise Data segment, particularly for AI and server applications, showed exceptional growth, and the Communications segment also contributed significantly.

The gross margin remained stable at 55.3% for the first quarter of 2026, compared to 55.4% in the same period last year. This slight decrease was mainly attributed to higher warranty expenses as a percentage of revenue, partially offset by lower manufacturing overhead costs.

Monolithic Power Systems maintains a strong liquidity position, with cash, cash equivalents, and short-term investments totaling $1.37 billion as of March 31, 2026. This is a significant increase from $1.26 billion at the end of the previous year, indicating ample resources to fund operations, capital expenditures, and shareholder returns.

The company reported a material weakness in internal control over financial reporting related to the accounting for deferred income taxes. While remediation efforts are underway, management has concluded that disclosure controls were not effective as of March 31, 2026. The company is working to remediate this issue by the end of fiscal year 2026. Additionally, the company acknowledges risks related to macroeconomic conditions, global tariffs, and potential litigation.