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    MPWR
    Earnings call· Jun 2026(Q2 FY26)

    MONOLITHIC POWER SYSTEMS Q2 FY26 earnings call MPWR

    Jul 30, 2026 Source

    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

    5

    • 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

    3

    • 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

    3
    CategoryTargetConfidence
    Enterprise Data end market growth
    130% for the year
    high materiality
    High
    Automotive end market growth
    mid-teens kind of year-over-year
    medium materiality
    Medium
    Gross margin trajectory
    probably stay similar or maybe slightly higher
    medium materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    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
    		————

    Operational metrics

    7
    Stock repurchase authorization
    $1 billionincreased by $500 million
    current

    Board of Directors authorized an additional $500 million for stock repurchases, increasing the total current authorization to $1 billion.

    CPU server power market share
    >30%
    current

    Michael Hsing stated that the company has comfortably surpassed its internal target of 30% market share in the CPU side, which was previously considered a failure if below that level.

    Capacity goal
    >$6 billionsignificantly beyond prior goal
    future

    Extended the company's capacity goal significantly beyond $6 billion to support future revenue growth and transformation into a full solution provider.

    Pricing approach
    —
    current

    MPS maintains a consistent pricing approach, not gouging prices when supply is tight. Price increases are primarily for input cost recovery, expedite requests, or specific non-China supply chains.

    48-volt vertical power modules
    —
    current

    The company is shipping 48-volt vertical power modules to more than a couple of customers, with new customers coming online. Modules and solutions are expected to be an increasingly important part of the business over the long term as power requirements increase.

    GaN development
    —
    since last year

    Michael Hsing acknowledged that he was wrong about GaN and that the company has been developing its own GaN technology since last year, now having a working device.

    Book-to-bill ratio
    >1well above 1
    Q2 FY26

    The book-to-bill ratio for the quarter was again well above 1, indicating strong demand and good visibility.

    Industry KPIs

    4
    MetricValueDetails
    Book to bill ratio>1
    Design wins socket pipeline1,500 new socketssockets
    Inventory channel inventoryvery low
    End market segment revenue mixAll end markets grew sequentially

    Product announcements

    2
    ProductTypeDetails
    High-speed DDR5 memory componentslaunch
    High-voltage AC to DC products for 800-volt data center architectureslaunch

    Risks & headwinds

    3
    Lagging Consumer Marketcurrent

    not quantified

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

    Cautious Notebook Marketsecond half of the year

    not quantified

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

    Lagging Industrial Segmentcurrent

    not quantified

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

    What to watch in Q3 FY26

    5

    Enterprise Data segment growth

    Q3 FY26
    Current45% QoQ, full-year guide raised to 130%
    TargetContinued 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.

    Q&A highlights

    5

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.