Monolithic Power's (MPWR) Q1 Earnings Beat on Solid Revenues

Monolithic Power Systems, Inc. MPWR reported solid first-quarter 2023 results, with the bottom and the top line surpassing the respective Zacks Consensus Estimate.

The Kirkland, Washington-based company reported higher revenues year over year, driven by solid momentum in Automotive, Communication and Storage and Computing verticals. However, elevated inventory levels induced from supply demand disequilibrium following the pandemic still remain a concern.

Net Income

On a GAAP basis, net income rose to $109.8 million or $2.26 per share from $79.6 million or $1.65 per share in the prior-year quarter. Despite greater operating expenses year over year, growth in net sales supported the bottom line.

Non-GAAP net income was $146 million or $3 per share compared with $118.3 million or $2.45 per share in the year-ago quarter. The bottom-line surpassed Consensus Estimate by a penny.

Monolithic Power Systems, Inc. Price, Consensus and EPS Surprise


Monolithic Power Systems, Inc. price-consensus-eps-surprise-chart | Monolithic Power Systems, Inc. Quote



During the quarter, Monolithic Power generated $451.1 million in revenues, up from $377.7 million in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $450 million. Solid performance in Storage and Computing, Automotive and Communications verticals supported the year over year net sales improvement.

In the first quarter, Storage and Computing revenues improve to $119.8 million from the prior-year quarter’s figure of $96.6 million. Despite decline in storage sales, higher notebook sales cushioned the top-line.

Communications revenue grew 22.1% to $67.9 million with improvement in 5G infrastructure.

In the March quarter, revenues in the Automotive segment were up by a solid 93.1% year over year to $105.3 million. Rising demand for highly integrated solutions for advanced driver assistance systems, the digital cockpit and lighting applications supported the net sales growth.

During the first quarter, revenues from Enterprise Data rose to $47.2 million from $42.5 million. Weakness in data center spending partially offset the gain from this vertical.

In the first quarter, Industrial revenues declined to $47.5 million from $48.5 million in the year-ago quarter. Lower security and power source revenues hampered the net sales from this vertical.

Revenues in the Consumer segment was $63.4 million down from $80 million in the prior-year quarter.

By product family, revenues in DC to DC surged to $425.2 million from $358.8 million. In the first quarter, Lighting Control revenues increased to $25.9 million from $18.9 million in the previous year quarter.

Other Details

Non-GAAP gross margin was 57.7%, down 60 basis points from the year-earlier quarter. Elevated inventory induced from supply demand imbalance following the pandemic is causing a downward trend in gross margin.

Non-GAAP operating expenses rose to $96 million from $86.6 million reported in the previous-year period. Non-GAAP operating income was $164.1 million, up from $133.6 million primarily driven by top-line improvement.

Cash Flow & Liquidity

During the quarter, the company generated operating cash flow of $218.8 million. As of Mar 31, 2023, cash and cash equivalents aggregated $489 million with $77.6 million in long-term liabilities.


For the second quarter of 2023, the company projects revenues within the range of $430-$450 million. Non-GAAP gross margin is estimated between 55.9% and 56.5%. On a non-GAAP basis, research and development and selling, general and administrative expenditure is expected between $94.9 million to $96.9 million. Management expects interest and other income to be in the range of $3.8-$4.2 million. Total stock-based compensation expenses are expected in the vicinity of $38.8 million to $40.8 million.

Management remains cautious about near-term uncertainty and continues to focus on commercial expansion and investment in necessary infrastructure development to sustain long term growth

Zacks Rank & Stocks to Consider

MPWR currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bandwidth Inc. BAND, carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 341.97%, on average, in the trailing four quarters. It operates as a Communications Platform-as-a-Service (CPaaS) provider, offering avant-garde software application programming interfaces for voice and messaging services. It is the only application programming interface (API) platform provider that owns a Tier 1 network with enhanced network capacity, primarily catering to business enterprises.
With 8,800 on-net rate centers, it delivers unparalleled network quality and proactively monitors network operations 24/7 to resolve quality issues, capitalizing on an efficient cost structure for seamless connectivity and speed-to-market.

Meta Platforms Inc. META, sporting a Zacks Rank #1, delivered an earnings surprise of 15.46%, on average, in the trailing four quarters. Meta Platforms is the world’s largest social media platform. The company’s portfolio offering evolved from a single Facebook app to multiple apps like photo and video sharing app Instagram and WhatsApp messaging app owing to acquisitions.

Meta is considered to have pioneered the concept of social networking, which is why it enjoys a first mover’s advantage in this market. As developed regions mature, Meta undertakes measures to drive penetration in emerging markets of South East Asia, Latin America and Africa.

Workday Inc WDAY, carrying a Zacks Rank #2, delivered an earnings surprise of 7.67%, on average, in the trailing four quarters. In the last reported quarter, it pulled off an earnings surprise of 11.24%.

Workday is a provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes it easier for organizations to provide analytical insights and decision support.

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