Monolithic Power Systems (MPWR 1.84%), a semiconductor company focused on high-performance analog and mixed-signal integrated circuits, announced its results for the second quarter on July 31, 2025. For the period, the company reported GAAP revenue of $664.6 million and non-GAAP earnings per share (EPS) of $4.21—both above Wall Street estimates, which had forecast $651.99 million in GAAP revenue and $4.12 in non-GAAP EPS. This marks a 31.0% increase in revenue and a 32.8% rise in non-GAAP EPS compared to the same quarter last year. While gross margins saw a slight decline, the quarter featured robust expansion in storage and computing and automotive markets, offset somewhat by a pullback in enterprise data. Overall, the company sustained its growth trajectory and maintained balance sheet strength.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $4.21 | $4.12 | $3.17 | 32.8% |
| Revenue | $664.6 million | $651.99 million | $507.4 million | 31.0% |
| Gross Margin (Non-GAAP) | 55.5% | 55.7% | (0.2 pp) | |
| Operating Income (Non-GAAP) | $231.2 million | $171.0 million | 35.2% | |
| Net Income (Non-GAAP) | $202.2 million | $155.1 million | 30.4% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company Overview and Business Focus
Monolithic Power Systems designs and markets power solutions used in computing, automotive, enterprise data, communications, consumer, and industrial applications. It operates on a fabless model, contracting manufacturing to partners and focusing internally on design and innovation.
Recently, the company has shifted from being a traditional chip supplier to developing silicon-based system solutions. The strategy centers on proprietary technology, continuous innovation, and a diversified portfolio spanning several end markets. A critical focus is maintaining a balance of growth between different segments and investing in research and development to protect its competitive edge.
Quarter Highlights and Segment Performance
Revenue for storage and computing increased approximately 69.9% year-over-year, totaling $195.3 million (GAAP), driven by demand across memory, notebook, and desktop products. Automotive revenue (GAAP) also climbed sharply, increasing approximately 66% year-over-year to $145.1 million.
Enterprise data, which includes components for data centers and servers, saw revenue decline approximately 23% year-over-year to $144.0 million (GAAP). This drop follows a period of rapid growth and reflects changing cycles in customer capital spending. Management indicated that new platform qualifications are underway, with stronger demand expected later in the year.
Other segments posted strong gains: Communications revenue (GAAP) rose approximately 69% year-over-year to $73.8 million. The overall mix demonstrates Monolithic Power Systems’ strategic push for market diversification.
Gross margin remained steady by industry standards, reaching 55.5% on a non-GAAP basis. Management explained that various factors, including product mix, contributed to the margin movement. GAAP operating expenses grew 22.7% year over year, reflecting ongoing investment in research and development activities and a larger non-cash stock-based compensation charge.
Looking Ahead: Guidance and Investor Focus
For the next quarter, management guided GAAP revenue to a range of $710 million to $730 million. Guidance also calls for GAAP gross margins to remain between 54.9% and 55.5%, and non-GAAP gross margins between 55.2% and 55.8%, which aligns with recent performance ranges.
Non-GAAP operating expenses are forecast between $143.0 million and $147.0 million. The company maintained its estimate of a 15% effective non-GAAP tax rate. With substantial growth in inventory and cash reserves, Monolithic Power Systems’ balance sheet remains healthy. Investors are now watching for signs of improvement in the enterprise data segment, margin trends tied to product mix, and developments around the new system-level solutions that could further boost revenue diversity.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
