01—Abstract
Summary
Summary of the 10-Q filed November 3, 2026. Cited figures are marked; the original filing is the authoritative source.
Monolithic Power Systems (MPWR) reported strong financial results for the nine months ended September 30, 2026, with revenue growing significantly year-over-year.
This growth was primarily driven by increased demand in the Enterprise Data, Communications, and Automotive end markets, fueled by strong sales in AI and server applications, advanced driver assistance systems, and optical modules/switches. The company demonstrated robust profitability, with gross margins holding steady around 55%a and operating income showing substantial improvement.
Despite increased operating expenses, particularly in R&D and SG&A due to higher compensation and stock-based expenses, MPWR maintained impressive operating and net income margins. The balance sheet remains strong, though cash and cash equivalents have decreased due to significant stock repurchases and increased capital expenditures.
02—Key points
Key Highlights
- Revenue for the nine months ended September 30, 2026, increased by 46.5% to $2.99 billion compared to the same period in 2025, driven by strong performance in Enterprise Data, Communications, and Automotive sectors.
- Gross margin remained healthy, consistently above 55%, reflecting favorable product mix and efficient cost management.
- Operating income saw substantial growth, increasing by 71% for the nine months ended September 30, 2026, compared to the prior year period, indicating strong operational leverage.
- Research and Development (R&D) expenses increased by 27% for the nine months, reflecting continued investment in new product development, with R&D as a percentage of revenue decreasing to 12.1% from 14.1%.
- Selling, General, and Administrative (SG&A) expenses rose by 25% for the nine months, primarily due to increased stock-based compensation and higher cash-based compensation and benefits.
- The company repurchased $457.5 million of its common stock during the nine months ended September 30, 2026, a significant increase from the prior year, and declared dividends totaling $297.2 million.
- Cash and cash equivalents decreased by approximately 49% from December 31, 2025, to $560.5 million as of September 30, 2026, largely due to substantial share repurchases and increased investing activities.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Monolithic Power Systems kept $0.23.
- Revenue$1.20B100.0%
- Cost of revenue−$536.9M44.6%
- Gross profit$665.5M55.4%
- Operating costs−$307.9M25.6%
- Operating income$357.7M29.7%
- Interest, other & tax−$86.6M7.2%
- Net income$271.1M22.5%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed November 3, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $1.20B$737.18M | +63.1% |
| Cost of Revenue | $536.87M$330.95M | +62.2% |
| Gross Profit | $665.54M$406.23M | +63.8% |
| SG&A Expenses | $167.27M$112.87M | +48.2% |
| Operating Expenses | $307.85M$211.04M | +45.9% |
| Operating Income | $357.69M$195.18M | +83.3% |
| Net Income | $271.07M$179.77M | +50.8% |
| EPS (Basic) | $5.53$3.75 | +47.5% |
| EPS (Diluted) | $5.51$3.74 | +47.3% |
| Shares Outstanding (Basic) | 49.05M47.90M | +2.4% |
| Shares Outstanding (Diluted) | 49.18M48.04M | +2.4% |
05—Questions
Frequently Asked Questions
What were the primary drivers of revenue growth in the nine months ended September 30, 2026?
Revenue growth was primarily driven by increased demand for products serving the Enterprise Data (especially for AI and server applications), Communications (for optical modules and switches), and Automotive (supporting advanced driver assistance systems) end markets. A favorable product mix, with a higher proportion of power solutions, also contributed to the revenue increase.
How has Monolithic Power Systems managed its expenses relative to revenue growth?
While revenue and operating income grew substantially, operating expenses also increased. R&D expenses rose in absolute terms, but as a percentage of revenue, they decreased, indicating improved efficiency. SG&A expenses also increased, notably due to higher stock-based compensation. Despite these increases, the company maintained strong operating and net income margins, demonstrating effective cost management in the face of significant top-line growth.
What is the company's liquidity position and how has it been impacted by recent activities?
As of September 30, 2026, MPWR had $1.09 billion in cash, cash equivalents, and short-term investments. However, cash and cash equivalents alone decreased significantly from the end of 2025 due to substantial stock repurchases ($457.5 million YTD) and increased capital expenditures for property and equipment. The company believes its current liquidity, along with ongoing operating cash flows, will be sufficient for the next 12 months.
Are there any significant accounting or control issues disclosed in this filing?
Management identified a material weakness in internal control over financial reporting related to the accounting for deferred income taxes, which was not remediated as of September 30, 2026. The company is actively working on remediation and expects to resolve it by the end of fiscal year 2026. Despite this, management believes the financial statements presented fairly reflect the company's financial position.
06—Continue