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Power management chips maker Monolithic Power Systems (NASDAQ:MPWR) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, with sales up 39.2% year on year to $637.6 million. The company expects next quarter’s revenue to be around $650 million, close to analysts’ estimates. Its non-GAAP profit of $4.04 per share was 0.8% above analysts’ consensus estimates.

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Monolithic Power Systems (MPWR) Q1 CY2025 Highlights:

• Revenue: $637.6 million vs analyst estimates of $633.3 million (39.2% year-on-year growth, 0.7% beat)

• Adjusted EPS: $4.04 vs analyst estimates of $4.00 (0.8% beat)

• Adjusted EBITDA: $233 million vs analyst estimates of $229.7 million (36.5% margin, 1.4% beat)

• Revenue Guidance for Q2 CY2025 is $650 million at the midpoint, roughly in line with what analysts were expecting

• Operating Margin: 26.5%, up from 20.9% in the same quarter last year

• Free Cash Flow Margin: 30.1%, down from 50.7% in the same quarter last year

• Inventory Days Outstanding: 146, up from 138 in the previous quarter

• Market Capitalization: $35.16 billion

StockStory’s Take

Monolithic Power Systems delivered revenue above Wall Street’s expectations for Q1, with management highlighting the impact of broad-based demand across storage, computing, and automotive segments. CEO Michael Hsing attributed the quarter’s results to strong design win momentum, especially in enterprise data and automotive, and emphasized the company’s ongoing transformation from a chip supplier to a full-service silicon solutions provider. CFO Bernie Blegen also noted the positive contribution of new product ramps and an improved operating margin compared to last year.

Looking ahead, management pointed to continued investment in technology and supply chain diversification as key drivers for the rest of the year. Michael Hsing described growing confidence in the second half due to a backlog of design wins, particularly in enterprise data and automotive, but acknowledged some uncertainty in the timing and magnitude of customer ramps. The company expects revenue for the next quarter to remain steady, with margins influenced by product mix and ongoing supply chain adjustments.

Key Insights from Management’s Remarks

Management emphasized that the company’s diversified strategy and design wins were central to Q1’s performance and set the stage for future growth across several end markets.

• Enterprise Data Momentum: Management cited broad-based design wins and ramping qualifications with major customers, positioning the company for increased enterprise data revenue later this year. Michael Hsing stated that while visibility is improving, the major ramps are expected in the second half.

• Automotive Content Expansion: The automotive business posted its third consecutive quarter of double-digit sequential growth. Management credited this to increased content per vehicle, particularly from new power management modules supporting next-generation vehicle platforms in North America and Europe.

• Storage & Computing Upswing: Segment revenue increased sharply due to both memory and notebook demand. Management said growth was balanced across memory types (like DDR5) and end-user devices, and that results were driven by design wins rather than inventory build-up.

• Supply Chain Diversification: The company’s multi-year effort to localize manufacturing and R&D across regions has improved resilience to tariffs and geopolitical risks. Hsing explained that post-pandemic capacity expansions outside China now support both China and global customers.

• Transformation to Solutions Provider: Management reiterated its strategy of evolving from a chip-only supplier to a provider of complete silicon-based solutions, including system-level modules for building automation and medical devices. Early customer engagement on these new products was described as encouraging for long-term growth.