Given the nearly $120 million sequential gain in Enterprise Data, what are the drivers, and how confident is management that there's no inventory build, especially recalling past shortages?

Drivers include ramping existing/new customers, increased module content, platform refreshes, and CPU. Channel inventory remains very low, indicating sell-through. The company is raising its full-year growth floor for this segment from 85% to 130%. Michael Hsing emphasized their commitment to not over-shipping and maintaining long-term customer relationships. “I think right now, based on what we can see, we're willing to raise the floor for that particular end market from 85% for the year to 130% for the year.”

With initial DDR5 orders, how much SAM expansion is expected, and can this technology be applied to other applications beyond memory controllers?

DDR5 is a new, high-speed analog capability that can expand to other communications applications. It's early innings for revenue, but it's part of the playbook to find new sockets. Michael Hsing noted that when MPS mentions something, it typically turns into revenue. “But in the history, when we were mentioning something, it will turn into our revenue.”

When can MPS expect revenue from the 800-volt solution, and is it based on silicon GaN or silicon carbide?

The 800-volt solution relies on MPS's own silicon carbide devices. Revenue will materialize when the data center transition happens, but the exact timing is uncertain. Michael Hsing admitted being wrong about GaN in the past and confirmed MPS has developed its own GaN technology since last year. “In terms of 800-volt solution, now we totally rely on MPS' own silicon carbide device. And revenue-wise, probably you will know and all the market will know where is the data center transition happened. When that happens, we will have revenues.”

MPWR

Monolithic Power Systems (MPWR) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Jul 30, 2026

Source: earnings call transcript

Executive summary

Monolithic Power Systems, Inc. Q2 FY26 — Record Revenue and Strong Enterprise Data Growth

Monolithic Power Systems reported record Q2 FY26 revenue, driven by strong sequential growth across all end markets, particularly Enterprise Data. The company emphasized its diversified market strategy, continuous innovation, and expansion into new technologies like DDR5 and 800-volt data center solutions. Management also highlighted significant capacity expansion and a substantial increase in its stock repurchase authorization, while maintaining a consistent pricing approach and focusing on long-term growth.

Highlights

Achieved record quarterly revenue of $981 million, up 22% QoQ and 48% YoY.
Enterprise Data segment grew 45% sequentially, driven by broad-based ordering patterns.
Extended capacity goal significantly beyond $6 billion to support future revenue growth.
Board authorized an additional $500 million for stock repurchases, increasing total authorization to $1 billion.
Initial orders received for high-speed DDR5 memory components, expanding SAM into next year.

Concerns

Consumer market continues to lag, remaining an area of caution.
Notebook side of storage and compute remains cautious for the second half of the year.
Industrial segment is lagging a little, primarily a design win year rather than revenue growth.

Guidance & targets

Category	Target	Timeline	Confidence
Enterprise Data end market growth	130% for the year high materiality	FY26	High
Automotive end market growth	mid-teens kind of year-over-year medium materiality	FY26	Medium
Gross margin trajectory	probably stay similar or maybe slightly higher medium materiality	near future	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Enterprise Data Grew 45% sequentially, driven by strong broad-based ordering patterns. Underlying growth drivers include ramping existing and new customers, increased module content, platform refreshes, and CPU. Channel inventory remains very low.	—	—	45%	—
Communications Grew 80% sequentially, driven by both optical module solutions and switches (including top-of-rack, DPUs, NIC cards). Optical is still the larger portion but switches are growing.	—	—	80%	—
Automotive Shipped products for over 1,500 new sockets year-to-date, increasing footprint in ADAS and other vehicle applications. Focus on zonals, 48-volt systems, battery, and LiDAR. Expected to ramp in H2 FY26. New sockets shipped YTD: 1,500	—	—	—	—

Product announcements

Product	Type	Timeline	Details
High-speed DDR5 memory components	launch	initial orders received, grow SAM into next year
High-voltage AC to DC products for 800-volt data center architectures	launch	began sampling

Risks & headwinds

Lagging Consumer Market current

not quantified

Mitigation:Continued diversified growth strategy, focus on other segments.

Cautious Notebook Market second half of the year

not quantified

Mitigation:Not explicitly stated, but implied by diversified strategy.

Lagging Industrial Segment current

not quantified

Mitigation:Focus on design wins for future revenue, not defocused.

What to watch in Q3 FY26

Enterprise Data segment growth

Q3 FY26

Current 45% QoQ, full-year guide raised to 130%

Target Continued strong growth, sustained above 130% full-year target

Why it matters

Enterprise Data is a primary growth driver; sustained momentum is key to overall revenue performance and thesis.

I think right now, based on what we can see, we're willing to raise the floor for that particular end market from 85% for the year to 130% for the year.

Find out whether MPWR delivers this. Inve re-checks your case every morning.

Q&A highlights

What is driving the 80% growth in Communications, specifically if it's beyond transceiver power to switches, DPUs, and SmartNICs, and if this momentum will continue into Q3?

The growth is coming from both optical module solutions and switches (including top-of-rack, DPUs, NIC cards). Optical modules are still a larger portion due to a longer runway, but switches are growing. Momentum is expected to continue.

“Optical is still the bigger portion just because it's had a longer runway since last year, but you are seeing growth from both of those really driving the comms end market.”

asked by Richard Schafer · answered by Tony Balow

2 min read 6 chapters

Detailed narrative

Record Revenue and Diversified Growth

Monolithic Power Systems achieved record quarterly revenue of $981 million in Q2 FY26, representing a 22% sequential increase and a 48% year-over-year growth. This performance was attributed to continued innovation, consistent execution, and a resilient diversified market strategy. All end markets experienced sequential growth, with Enterprise Data leading the way with a 45% increase.

Strategic Capacity Expansion

The company significantly extended its capacity goal beyond $6 billion to support future revenue growth and its transformation into a full solution provider. This expansion focuses not only on foundry capacity but also on the more complex back-end processes for module assembly, which is crucial for its high-power density solutions. The approach is geographically balanced, adapting to customer requirements and supply chain needs.

New Product and Market Opportunities

MPS received initial orders for high-speed DDR5 memory components, which are expected to expand its Serviceable Addressable Market (SAM) into next year. The company also began sampling high-voltage AC to DC products for 800-volt data center architectures, leveraging its own silicon carbide devices. These initiatives demonstrate MPS's strategy of investing in new technologies to open new end markets and applications.

Automotive and CPU Server Power Traction

In the automotive market, MPS shipped products for over 1,500 new sockets year-to-date, increasing its footprint in ADAS and other vehicle applications, with a focus on zonals, 48-volt systems, battery, and LiDAR. In CPU server power, the company has comfortably surpassed its internal market share target of 30%, indicating strong participation across both x86 and ARM players and contributing significantly to Enterprise Data growth.

Consistent Pricing and Supply Chain Strategy

Management reiterated its consistent pricing approach, stating that it does not 'gouge price' during tight supply chains. Price adjustments are primarily made to offset increased input costs, accommodate expedite requests, or for specific non-China supply chain requirements. The company continuously expands and diversifies its global supply chain to capture growth opportunities, maintain stability, and adapt to market changes.

Gross Margin and Operating Expense Leverage

While gross margins are at the lower end of the company's desired model, management expects them to remain similar or slightly higher in the near future, with a focus on revenue and EPS growth. The company is seeing additional leverage from higher revenue levels, leading to healthy expansion in operating margin, as it's difficult to scale operating expenses at the same rate as revenue growth.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.