Monolithic Power Systems (MPWR) Q4 FY25 earnings call: guidance and Q&A

What are the segment trends for Q1, and what is the updated outlook for Enterprise Data in 2026?

MPS saw a good step-up in Q4 ordering patterns with book-to-bill well over 1, extending backlog into Q2/Q3 2026. Strengths in enterprise data, communications, and automotive are expected to continue. The 2026 Enterprise Data growth outlook was increased to a floor of 50% from the previous 30-40% range, driven by new design wins and available capacity.

“I'd probably say that whereas last quarter, I talked about a range of between 30% and 40%. Maybe I can increase that to a floor of 50% growth for 2025.”

asked by Chris Caso · answered by Bernie Blegen

How much of the Enterprise Data growth is related to traditional server CPU demand versus AI/GPU?

The lines between AI/GPU and traditional CPU data centers are blurring as they are integral to each other and use similar power supplies. MPS has many new design wins, particularly in the last 1.5 years, and is trending well in both categories, winning the market with its power densities.

“The lines between AI, GPUs and CPU are getting pretty blurry because they're so integral to 1 another these days.”

asked by Joseph Quatrochi · answered by Bernie Blegen

Is the visibility in Enterprise Data better now compared to a year ago?

Yes, visibility is better. In prior quarters, MPS experienced short lead times, but now they are seeing longer ordering patterns and backlog development. This is primarily due to customers being concerned about general capacity constraints in the market, leading them to place orders further out.

“I'd say that the fundamental change that also making us more confident right now is that we are seeing longer ordering patterns because some of our customers are concerned about capacity constraints, not necessarily with us, but just in general.”

asked by Joshua Buchalter · answered by Bernie Blegen

Are MPS gaining market share in the AI power segment, given competitors' claims of doubling their business?

Michael Hsing declined to engage in a 'pissing contest' regarding market share, stating that the numbers will speak for themselves. Bernie Blegen added that MPS has great products, broad customer engagement, and design wins across a wide swath of customers, positioning them well regardless of how the market plays out.

“I'll refuse to get in to pis**** contest, and the whole -- who wear less on the stage, okay? We let the numbers speak itself.”

asked by Quinn Bolton · answered by Michael R. Hsing

What are the expectations for the optical transceiver business this year, and what does that imply for the communications segment?

MPS has seen great growth in optical modules over the past 1.5 years, which is expected to continue with the 1.6 ramp. The communications segment, including both optical modules and data center switches, is anticipated to be an area of growth for MPS in 2026.

“we would expect optical module to continue to grow as you start to see the 1.6 ramp, as we go through. And for communications, it should be an area of growth for us in '26, both on optical modules and in switches because that's where our data center switches are as well.”

asked by Richard Schafer · answered by Tony Balow

Given increased visibility and backlog, is the year's revenue trajectory more linear, or still second-half weighted?

The first half of the year, particularly for enterprise data, is now more secure due to strong ordering patterns in Q4 and continuing into the year. However, there are still many variables for the second half. Management acknowledged the high-level issue of distinguishing real demand from potential customer double ordering for capacity.

“I'd say that the first half for enterprise data in particular, but for the company, it is more secure I think there's still a lot of variables that need to be shaped before we really understand what the second half trajectory is going to look like.”

asked by Gary Mobley · answered by Bernie Blegen

Can you provide an update on the gross margin target and its drivers?

Gross margin is currently at the low end of the 55%-60% model, specifically between 55.5% and 55.8%. Management expects to resume sequential improvements of 10 to 20 basis points quarter-over-quarter at some point during the year, as a longer time horizon for backlog develops, allowing for better management.

“when we've been trending it between 55.5% and 55.8%, which as Michael said, is the low end of our model. that in order for us to show improvement, we really need to have a little longer time horizon as far as backlog to be able to manage in it.”

asked by Wei Chia · answered by Bernie Blegen