Q2 2026 Monolithic Power Systems Inc Earnings Call Transcript
Key Points
- Record quarterly revenue of $981 million, up 22% sequentially and 48% year-over-year, driven by strong broad-based growth across all end markets.
- Enterprise data segment grew 45% sequentially, with management raising the full-year growth outlook for this segment from 85% to 130%.
- Expanded capacity goals significantly beyond $6 billion to support future revenue growth and the transition to a full solution provider.
- Received initial orders for high-speed DDR5 memory components, which are expected to expand the company's serviceable addressable market (SAM) into next year.
- Began sampling high-voltage AC-to-DC products for 800-volt data center architectures, leveraging in-house silicon carbide (SiC) technology.
- Shipped products for over 1,500 new automotive sockets year-to-date, broadening its footprint in ADAS and other vehicle applications.
- Board authorized an additional $500 million for stock repurchases, increasing the total current authorization to $1 billion.
- Channel inventory remains very low, indicating strong sell-through and reducing concerns about inventory build-up in the enterprise data segment.
- Communications segment grew 80% sequentially, driven by both optical module solutions and power solutions for switches, GPUs, and NIC cards.
- Management expressed confidence in the long-term growth trajectory, citing a diversified market strategy and a strong pipeline of design wins across multiple end markets.
- Consumer market segment remains a laggard, with management noting it is 'still lagging' due to a strategic focus on other areas.
- Industrial segment is expected to grow only modestly with the market, as the company focuses on design wins rather than immediate revenue in this area.
- Management remains cautious on the notebook segment within storage and compute, expecting continued softness in the second half of the year.
- The company is still in the early innings of ramping its high-speed DDR5 memory components, with no clear timeline for meaningful revenue contribution.
- Revenue from the 800-volt AC-to-DC products is dependent on the pace of data center architecture transitions, which management admits is uncertain.
- Gross margins are currently at the low end of the company's target model, with management expressing a desire to improve them but not providing a specific timeline.
- The company faces increasing complexity in expanding capacity, particularly in module assembly, which is described as more complicated than assembling a phone.
- Management acknowledged that pricing increases have been implemented in certain areas, such as expedite fees and non-China supply chain requests, which could impact customer relationships.
- The company's heavy reliance on the enterprise data and communications segments for growth raises concerns about concentration risk, despite management's diversification efforts.
- Visibility into 2027 remains limited, with management stating it is 'too early to put a number on it' despite strong structural growth drivers.
Good day and thank you for standing by. Welcome to Monolytic Power System, Inc.'s second quarter earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automated message advising that your hand is raised.
Please be advised that today's conference is being recorded.
Now I'd like to send the conference over to Arthur Lee to read the safe harbor statement. Please go ahead.
Earlier today, MPS released a written commentary on the results of its operations for the second quarter ended June 30th, 2026. This document can be found on our website.
Before we begin, I would like to remind everyone that in the course of today's presentation, we may make forward-looking statements and projections within the meaning of the Private Securities Litigation Reform
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