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    MPWR
    Earnings call· Sep 2025(Q3 FY25)

    MONOLITHIC POWER SYSTEMS INC MPWR

    Oct 30, 2025 Source

    Executive summary

    Monolithic Power Systems Q3 FY25 — Record Revenue and Diversified Growth

    Monolithic Power Systems delivered record Q3 FY25 revenue, driven by its diversified market strategy and strong execution across all end markets. The company is actively transforming into a full-service silicon-based solutions provider, securing key design wins in robotics and ADAS. While gross margins are expected to remain stable in the mid-50s due to short-term order patterns, MPS anticipates significant growth in enterprise data in 2026 and is strategically investing in advanced technologies like silicon carbide and 800-volt solutions for future opportunities.

    Highlights

    5

    • Achieved record quarterly revenue of $737.2 million, up 18.9% YoY and 10.9% QoQ.

    • Diversified market strategy drove year-over-year revenue growth across all end markets.

    • Secured first design win for a full BMS solution on a robotics platform, supporting transformation to a full-service silicon-based solutions provider.

    • Enterprise data segment expected to grow 30% to 40% in 2026, with material ramps weighted to H2 2026.

    • Automotive segment expanding customer base with a major Tier 1 supplier adopting MPS for next-gen ADAS solution.

    Concerns

    3

    • Gross margins expected to remain in the mid-55% range (plus/minus 20-30 bps) for the foreseeable future due to short-term order nature and limited visibility into business mix.

    • Limited visibility into the first half of next year, with no strong view on Q1.

    • AI market presents challenges due to concentration and visibility, though MPS engages with both large and small companies.

    Guidance & targets

    6
    CategoryTargetConfidence
    Enterprise data revenue growth
    30% to 40%
    high materiality
    Medium
    Non-GAAP gross margin
    mid-55% range
    medium materiality
    Medium
    BMS robotics revenue ramp
    starting in 2026
    low materiality
    Medium
    800-volt solutions for data center revenue ramp
    '27, '28 revenue ramps
    medium materiality
    Medium
    Automotive zonal designs market entry
    hit market next year then ramping through into '27
    medium materiality
    Medium
    Automotive BMS and traction inverter solutions revenue ramp
    more like '27 and beyond
    medium materiality
    Medium

    Operational metrics

    10
    Revenue growth
    18.9%YoY
    Q3 FY25

    Record quarterly revenue of $737.2 million.

    Revenue growth
    10.9%QoQ
    Q3 FY25

    Record quarterly revenue of $737.2 million.

    Non-GAAP gross margin
    mid-55%plus/minus 20-30 bps
    foreseeable future

    Expected to remain in this range due to short-term order nature and limited visibility into business mix.

    Module power revenue share
    <1/3
    Q3 FY25

    Module power business within enterprise data is currently less than one-third of total revenue but is growing.

    Total products
    few thousand
    current

    MPS offers a wide range of products.

    Total customers
    40,000-50,000
    current

    MPS serves a large and diversified customer base.

    PPM failures
    low single-digit
    current

    Achieved through automated test systems for high-volume integrated modules.

    Test system automation
    100%
    current

    MPS uses fully automated test systems, including reliability test, for high-volume production.

    Automotive ADAS revenue share
    <50%
    current

    ADAS is a growing part of automotive revenue but currently less than half.

    Modules revenue share (ex-enterprise data)
    10-15%
    prior quarter

    Analyst referenced prior quarter's statement that modules outside enterprise data could be 10% to 15% of total revenues.

    Industry KPIs

    1
    MetricValueDetails
    Inventory channel inventoryunchangeddays

    Deals & partnerships

    2
    Major Tier 1 supplierAdoption of MPS solutions for next-generation ADAS

    MPS continues to expand its automotive customer base with another major Tier 1 supplier adopting MPS for its next-generation ADAS solution.

    Robotics platform customerFirst design win for a full BMS solution on a robotics platform

    MPS secured its first design win for a full BMS solution on a robotics platform, which further supports its transformation for being a chip-only semiconductor supplier to a full-service silicon-based solutions provider.

    Risks & headwinds

    4
    Short-term order natureforeseeable future

    orders are more short term in nature

    Mitigation: MPS is positioning the company to be as responsive as possible to dynamic market changes.

    Limited visibility into business mixforeseeable future

    not seeing a large buildup in backlog in future quarters

    Mitigation: Limits capacity to manage business mix for gross margin expansion; company focuses on innovation and customer engagement.

    AI market concentration and visibilitycurrent

    concentration and visibility

    Mitigation: Engaging with both large and small AI companies, demonstrating best technology and customer service.

    Dynamic market conditionscurrent

    very dynamic market

    Mitigation: MPS is positioning itself to be responsive to changing market conditions and customer requests.

    What to watch in Q4 FY25

    5

    Enterprise Data Segment Momentum

    Q4 FY25 / Q1 FY26
    Currentgood momentum as we look ahead into the early part of next year
    TargetContinued sequential growth

    Why it matters

    Enterprise data is a key growth driver, and its momentum is crucial for overall revenue.

    we're seeing a layering of additional customers that began this layering effect in Q4 and is providing this good momentum as we look ahead into the early part of next year.

    Q&A highlights

    6

    What are the puts and takes for end-market growth in Q4, and any updates on enterprise data guidance (previously flat to down 20%)?

    Q3 saw better-than-anticipated performance in enterprise data and industrial. For enterprise data, additional customers are being layered in, providing momentum into early next year.

    “we're seeing a layering of additional customers that began this layering effect in Q4 and is providing this good momentum as we look ahead into the early part of next year.”

    asked by Josh Buchalter · answered by Bernie Blegen

    2 min read6 chapters

    Detailed Narrative

    01

    Q3 FY25 Performance Highlights

    MPS reported record quarterly revenue of $737.2 million, marking a 10.9% sequential increase and 18.9% year-over-year growth. This performance was attributed to the company's diversified market strategy, consistent execution, and continuous innovation, with all end markets contributing to YoY revenue growth.

    02

    Strategic Transformation and New Design Wins

    The company is transitioning from a chip-only supplier to a full-service silicon-based solutions provider. This was highlighted by a new design win for a full Battery Management System (BMS) solution on a robotics platform, expected to ramp revenue in 2026. MPS also expanded its automotive customer base with a major Tier 1 supplier adopting its solutions for next-generation ADAS.

    03

    Enterprise Data Market Outlook

    MPS anticipates significant growth in its enterprise data segment, projecting 30% to 40% growth in 2026, primarily weighted towards the second half⚖️ of the year. This growth is driven by layering in additional customers and the company's high-density power products. The module power business within enterprise data, currently less than one-third of revenue, is expected to grow substantially.

    04

    Automotive Market Evolution

    The automotive segment is seeing new content adoption, with zonal designs hitting the market next year and ramping through 2027. BMS and traction inverter solutions are expected to contribute revenue from 2027 onwards. MPS is also focusing on the trend towards 48-volt systems and 800-volt solutions for EVs, particularly in the China market, leveraging its silicon carbide offerings for control systems.

    05

    Gross Margin and Market Dynamics

    Gross margins are expected to remain stable in the mid-55% range for the foreseeable future, with fluctuations of plus/minus 20-30 basis points. This stability is due to the short-term nature of orders and limited visibility into future business mix, preventing optimal management of the product mix for margin expansion. The company notes that while the AI market is dynamic, it has not seen sustainable pricing trends.

    06

    Operational Efficiency and Future Investments

    MPS is investing in fully automated test systems, including reliability testing, to achieve low single-digit PPM failures for high-volume integrated modules, with a goal of producing millions of units per month. The company is also evaluating GaN and developing its own silicon carbide solutions, while noting recent advancements in silicon power MOSFETs that can compete with silicon carbide in cost-effectiveness.

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