Monolithic Power 2025 Q2 Earnings Beats Expectations as Net Income Surges 33.2%

Monolithic Power (MPWR) reported its fiscal 2025 Q2 earnings on July 31st, 2025. The company's revenue exceeded expectations, showing a 31% year-over-year increase to $664.6 million, surpassing Wall Street estimates of $652.1 million. Monolithic Power also raised its revenue guidance for Q3, projecting figures between $710–$730 million, which is above analysts' expectations. Additionally, the company anticipates 8% sequential revenue growth, showcasing a positive outlook for the upcoming quarters. This strong performance is attributed to diversified growth across all end markets and strategic investments in AI-driven power solutions.

Revenue
Monolithic Power reported a notable revenue increase of 31.0% in 2025 Q2, totaling $664.57 million, compared to $507.43 million in 2024 Q2. The Storage and Computing segment contributed significantly, generating $195.32 million. The Automotive sector followed with $145.13 million, while Enterprise Data added $143.96 million. The Communications segment reported $73.78 million, and Consumer added $59.66 million. Industrial sector revenue amounted to $46.71 million, collectively driving the overall revenue growth.

Earnings/Net Income
Monolithic Power's earnings per share (EPS) rose 35.4%, reaching $2.79 in 2025 Q2 compared to $2.06 in 2024 Q2, signaling robust earnings growth. The company's net income increased by 33.2%, achieving $133.73 million, a record high for fiscal Q2 net income over the past 20 years. This EPS growth indicates strong financial health and profitability.

Price Action
The stock price of Monolithic Power has edged down 2.74% during the latest trading day, has edged down 0.25% during the most recent full trading week, and has edged down 2.75% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing MPWR shares following earnings beats and holding for 30 days has yielded strong returns, with an overall gain of 89.14% compared to a benchmark return of 86.38%, resulting in an excess return of 2.76%. The strategy's compound annual growth rate (CAGR) was 14.46%, demonstrating significant capital appreciation. Despite a maximum drawdown of 0.00%, the strategy experienced high volatility at 34.21%, likely due to market reactions to earnings beats. A Sharpe ratio of 0.42 indicates that while the risk-adjusted return was acceptable, volatility remains a factor to consider.

CEO Commentary
Michael R. Hsing, CEO of Monolithic Power Systems, emphasized the company's record quarterly revenue of $664.6 million, reflecting a 31.0% increase year-over-year. He noted that growth was driven by diversified revenue across all end markets and initial shipments supporting ASIC-based AI products. Hsing highlighted the importance of continuous innovation and investment in technology to adapt to market changes, stating, "we do whatever our customers demand." He expressed cautious optimism about the future, indicating a strong positioning in the enterprise data segments and a commitment to maintaining supply chain stability.

Guidance
For Q3, Monolithic Power Systems anticipates 8% sequential revenue growth, with enterprise data projected to grow between 20% to 30%. The company maintains a positive outlook for Q4, expecting it to be up sequentially, although specific guidance remains dynamic due to short lead times and market conditions. Hsing expressed confidence in reaching the previously identified $4 billion serviceable available market in enterprise data over time, while also highlighting ongoing efforts to support customer demand across various segments.

Additional News
Monolithic Power Systems has been actively engaging in strategic initiatives to bolster its market position. Recently, the company announced a significant collaboration with ECARX Holdings Inc., focusing on developing automotive and robotics AI solutions. This partnership aims to enhance global supply chain expansion, system optimization, and accelerate time-to-market for intelligent automotive and industrial applications. Additionally, Monolithic Power has increased its shareholder returns, with dividends paid amounting to $240.62 million in 2024, up from $185.84 million in 2023. Moreover, the company executed substantial share repurchases in 2024, totaling $636.24 million, signaling a strong commitment to enhancing shareholder value.