Monolithic Power (MPWR) Q3 2026: Data Center Revenue Beats, Floor Raised to 150%

Monolithic Power Systems (MPWR) reported third-quarter 2026 results on October 29, 2026, and quarterly revenue topped $1 billion for the first time as data center demand grew faster than the company had expected [1][2]. The questions going in were whether data center demand could support the company's floor of 130% full-year growth for its Enterprise Data market, whether automotive revenue would ramp in the second half, and whether profit and cash conversion would hold during a capacity build-out. Data center revenue beat the required pace and the floor rose to 150% [2]. Automotive reached its ramp level while notebook-related revenue fell [3][4]. Gross margin and cash flow held, but GAAP operating expenses exceeded guidance after stock-based compensation doubled [5]. Overall, the growth case strengthened and revenue became more concentrated.

Monolithic Power Systems is a fabless power chip company that makes DC-DC converters and power modules at foundries using its own process technology [6]. It sells mainly through distributors to server, automotive, communications and consumer customers; its three largest distributors were 26%, 18% and 10% of 2025 revenue [7]. The company reports revenue by end market [8].

Data center revenue ran ahead of the full-year floor

Third-quarter revenue was $1,202.4 million, up 63.1% year over year and above the company's guidance of $1,140 million to $1,160 million [1][9]. Enterprise Data, which covers power for servers and AI systems, generated $506.7 million, up 164.6% year over year and 42.1% of revenue [8]. On 2025 revenue of $701.8 million, the 130% floor required at least about $485 million per quarter in the second half, and the third quarter cleared it [10][11].

The company attributed the increase to higher sales of AI and server power solutions and a broader customer base [12][13]. Management raised the full-year floor to 150%, citing growth at ASIC customers and module adoption [2][14]. That floor implies at least about $604 million of Enterprise Data revenue in the fourth quarter.

Communications revenue was $187.4 million, up 42.5% sequentially, driven by optical modules and switches [15][14]. The two data center markets made up 57.7% of revenue and about 80% of the sequential increase [8]. The company guided fourth-quarter revenue to $1,315 million to $1,385 million [16]. The company does not break out customers or product types, so customer stockpiling cannot be tested independently.

Automotive ramped while notebooks and consumer weakened

Third-quarter automotive revenue was $180.7 million, up 15.0% sequentially, which the company attributed to ADAS (advanced driver assistance) power solutions [3]. In the second quarter the company kept its view of mid-teens full-year automotive growth, implying about $180 million to $192 million per quarter in the second half [11]. The company won its first 48V power orders and expects them to drive 2027 growth [13], but available materials do not show it restating the full-year view.

Storage and Computing revenue fell from $199.8 million to $192.2 million [4], and management said notebooks were held back by downstream memory shortages [17]. Consumer revenue declined 11.6% year over year [18]. The four non-AI markets fell from 47.8% to 42.3% of revenue [8].

Stock-based compensation doubled and GAAP expenses beat guidance

Third-quarter GAAP gross margin was 55.4%, inside the 55.2% to 55.8% guidance range but below its midpoint [1][9]. Management said the company absorbed part of the rise in foundry wafer costs [19].

GAAP operating expenses were $307.9 million, about $49 million above the $258.7 million top of guidance [5][9], as stock-based compensation and related expenses rose from $53.5 million to $106.3 million; the release did not explain the increase [5]. GAAP operating margin fell from 31.0% to 29.7%, while the non-GAAP operating margin rose to 38.6% [1]. GAAP operating income of $357.7 million trailed the roughly $383 million implied by guidance midpoints [20]. The company guided fourth-quarter stock-based compensation to $121.0 million to $125.0 million, so this expense level will continue [16].

Cash conversion recovered. Operating cash flow was $289.9 million, above net income of $271.1 million [21][1], and inventory stood at 117 days based on next quarter's projected revenue [22]. Cash and short-term investments fell to $1,091 million, mainly on $453.4 million of buybacks [23][21]. Capacity now supports more than $6 billion of annual revenue [13].

Conclusion

The quarter strengthened the view of the data center as Monolithic Power Systems' growth engine. Stable gross margin and cash flow above net income show the build-out has not eroded cash generation, while higher stock-based compensation leaves GAAP profit conversion weaker than non-GAAP figures suggest. The 150% floor, fourth-quarter guidance and 48V contribution remain management expectations. The next tests are whether fourth-quarter Enterprise Data revenue reaches about $604 million, whether automotive revenue holds its level and whether GAAP expenses stay within the new guidance. Separately, the material weakness tied to the income tax restatement was not remediated as of June 30 [24].

Sources

[1] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · Q3 2026 financial summary (https://www.sec.gov/Archives/edgar/data/0001280452/000162828026068202/mpwr-20260930xexx991.htm) [2] MPWR Q3 2026 earnings call 2026-10-29 · Drillr earning_call_summary · guidance [3] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · Q3 2026 Automotive revenue commentary [4] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · Q3 2026 Storage and Computing revenue commentary [5] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · Q3 2026 operating expenses [6] MPWR 10-K filed 2026-02-27 · business overview and fabless model (https://www.sec.gov/Archives/edgar/data/1280452/000143774926006113/mpwr20251231_10k.htm) [7] MPWR 10-K filed 2026-02-27 · distributor channel and concentration [8] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · Q3 2026 revenue by end market table [9] MPWR 8-K filed 2026-07-30 · Q3 2026 business outlook (https://www.sec.gov/Archives/edgar/data/1280452/000162828026051029/mpwr-20260630xexx991.htm) [10] MPWR 10-K filed 2026-02-27 · 2025 revenue by end market [11] MPWR Q2 2026 earnings call 2026-07-30 · guidance remarks [12] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · Q3 2026 Enterprise Data revenue commentary [13] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · ongoing business conditions [14] MPWR Q3 2026 earnings call 2026-10-29 · Drillr earning_call_summary · Q&A on Enterprise Data floor and Comms [15] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · Q3 2026 Communications revenue commentary [16] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · Q4 2026 business outlook [17] MPWR Q3 2026 earnings call 2026-10-29 · Drillr earning_call_summary · Q&A on Storage/Compute split [18] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · Q3 2026 Consumer revenue commentary [19] MPWR Q3 2026 earnings call 2026-10-29 · Drillr earning_call_summary · risks [20] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · Q3 2026 gross margin & operating income [21] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · Q3 2026 balance sheet and cash flow [22] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · Q3 2026 balance sheet and inventory [23] MPWR 8-K filed 2026-10-29 · Exhibit 99.1 Q3 2026 results press release · the bottom line [24] MPWR 10-Q filed 2026-08-05 · material weakness not remediated at June 30, 2026 (https://www.sec.gov/Archives/edgar/data/1280452/000162828026053275/mpwr-20260630.htm)