Monolithic Power Systems’ first quarter saw revenue and adjusted earnings both exceed Wall Street expectations. Management highlighted the communications segment as a standout, with demand for power solutions in optical modules and switches driving substantial sequential growth. CEO Michael Hsing noted that robust adoption in enterprise data, particularly servers and AI-related projects, also contributed significantly to the quarter. However, management expressed caution regarding the notebook computing market and acknowledged an increase in inventory days outstanding.
Is now the time to buy MPWR? Find out in our full research report (it’s free for active Edge members).
Monolithic Power Systems (MPWR) Q1 CY2026 Highlights:
- Revenue: $804.2 million vs analyst estimates of $782 million (26.1% year-on-year growth, 2.8% beat)
- Adjusted EPS: $5.10 vs analyst estimates of $4.90 (4.1% beat)
- Adjusted EBITDA: $303.2 million vs analyst estimates of $289.6 million (37.7% margin, 4.7% beat)
- Revenue Guidance for Q2 CY2026 is $900 million at the midpoint, above analyst estimates of $817.2 million
- Operating Margin: 30%, up from 26.5% in the same quarter last year
- Inventory Days Outstanding: 157, up from 153 in the previous quarter
- Market Capitalization: $81.18 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Monolithic Power Systems’s Q1 Earnings Call
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Ross Seymore (Deutsche Bank) asked about trends within the enterprise data segment, particularly the balance between AI (XPU) and traditional CPU servers. CFO Tony Balow explained that growth drivers remain intact across both, with ongoing customer ramps and no major differentiation in demand outlook.
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Richard Schafer (Oppenheimer & Co.) pressed on manufacturing capacity and the ability to capture upside from hyperscaler spending. CEO Michael Hsing emphasized MPS’s readiness and supply chain diversity, stating, “We continue to do well in many aspects, especially for the power density side.”
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Quinn Bolton (Needham & Company) questioned whether communications could outpace enterprise data growth given optical module trends. Hsing said it is too early to call, but acknowledged that communications demand, especially for high-power density modules, was above the corporate average.
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Joseph Quatrochi (Wells Fargo) asked for details on gross margin dynamics amid rising revenue. Hsing and Balow both noted that current margins are at the low end of the model, with improvements dependent on module yields and ongoing cost management, but they cautioned against expecting sharp near-term increases.
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Kelsey Chia (Citi) queried the rationale for focusing on silicon carbide versus gallium nitride in high-voltage applications. Hsing explained that silicon carbide provides proven reliability for high-power use, while gallium nitride is reserved for lower voltage, lower power segments due to its current limitations.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace of adoption and revenue contribution from new DDR5 interface and robotics products, (2) whether enterprise data and communications segments continue to outperform expectations amid industry AI and data center investment trends, and (3) how effectively expanded manufacturing capacity and supply chain diversification support sustained growth and margin stability. Progress in automotive and updates on input cost management will also be important signposts.
Monolithic Power Systems currently trades at $1,651, up from $1,614 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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