MONOLITHIC POWER SYSTEMS INC Q4 FY2024 earnings call

• Introduced silicon carbide inverter for high-powered clean energy applications, with initial revenue expected to ramp in late 2025 and other silicon carbide-based applications to be introduced in multiple geographies during 2025-2026.
• Developed family of high-quality, cost-effective automotive audio products utilizing DSP technology from the 2024 XSign acquisition.
• Launched battery management solution and sampled new mini phase power stage for enterprise notebooks, enabling faster charge time and improved battery life.
• Developing new high-accuracy 24-bit converters expected to ramp in the second half of 2025.
• Increased quarterly dividend by 25% to $1.56 per share. Completed share repurchases under a 2023 $640 million authorization and board authorized a new $500 million three-year share repurchase program.
• Returned 86% of free cash flow to shareholders through share repurchases and dividends paid from 2022-2024. Focus on innovation, solving customer problems, maintaining quality, investing in new technology, expanding into new markets, and diversifying end markets and supply chain.

In 2024, Monolithic Power Systems, Inc. posted its thirteenth consecutive year of growth with full-year revenue of $2.2 billion, up 21% from 2023. For Q4 2024, the company had record quarterly revenue of $621.7 million, which was 37% higher than the fourth quarter of 2023. Specific segment revenue contributions were not detailed in the transcript.

• Q1 2025 outlook: Automotive continuing to grow, communications bouncing back from Q4 2024, memory demand good, notebooks expected to have Q1 uplift, enterprise data down. Full-year 2025 likely to be flattish year, weighted to back half. Exact timing of ramps for enterprise data and other segments difficult to call. Diversified growth strategy to capture opportunities.

• Uncertainty in timing of ramp-ups for silicon carbide inverter, automotive audio products, converters, and other new applications. Volatility in enterprise data market with blurring lines between CPU and GPU. Supply chain and customer allocation uncertainties affecting ramp-up timelines.

Q: Tore Svanberg asked about dynamics in the March quarter by segment, especially end markets being soft or healthy.

A: Bernie Blegen said Q1 outlook considers greenfield design wins ramping, automotive growing, communications bouncing back, memory demand good, notebooks having Q1 uplift, enterprise data down.

Q: Rick Schafer asked about accelerated projects ramping this year and into 2026.

A: Tony Balow said engaged broadly across hyperscalers but exact timing of ramps hard to call. Michael Hsing gave examples of projects ramping but timing is revenue plus minus 12-18 months.

Q: Ross Seymore asked about enterprise data market share dynamics.

A: Michael Hsing said inventory is low and channel inventory is low, ramping up. Bernie Blegen said enterprise data is fast-changing with blurry lines between CPU and GPU, hard to make generalized comments.

Q: Gary Mobley asked about greater than ten percent customers and revenue diversification.

A: Bernie Blegen said had two direct distributors and one indirect customer greater than ten percent in 2024. Michael Hsing and Tony Balow said revenue diversification includes multiple opportunities like silicon carbide, data converters, etc., but no specific timelines or numbers given.

Q: Quinn Bolton asked about enterprise data revenue pattern and ASP trends.

A: Bernie Blegen said year likely flattish weighted to back half, hard to determine exact curve. Michael Hsing said Monolithic sticks to business model, provides performance, and is leading in silicon and power modules.

Q: Chris Caso asked about enterprise data revenue shape and lumpiness.

A: Michael Hsing said difficult to tell sooner than year by year, customers push out or pull products. Tony Balow said focus on best products and quality, revenue will come as market plays through.

Q: Joshua Buchalter asked about hyperscale program competitive environment and enterprise data growth.

A: Bernie Blegen said lead with strengths, cautiously optimistic. Michael Hsing said large customers have push and pull, can't tell exact ramp timing.

Q: William Stein asked about microcontrollers and digital logic becoming bigger part of revenue.

A: Michael Hsing said don't list microcontrollers as standalone, but many projects ongoing with microcontrollers integrated into systems, evolving to silicon-based solutions company.

Q: William Kirwan asked about 2025 demand for automotive and communication markets.

A: Bernie Blegen said automotive has long design cycles, EVs in China growing, European OEM and North American EVs contributing. Communication side early stages with fiber optics, customer base expected to diversify. Michael Hsing said most exciting product not announced yet, wait for Analyst Day on March 20th.

Q: Hans Mosesman asked about enterprise data split between AI and non-AI.

A: Bernie Blegen said lines are blurry, hard to divide. Michael Hsing said customers don't appreciate disclosing those numbers.

Q: Joe Kotraki asked about notebook strength drivers and enterprise data second half projects.

A: Bernie Blegen said notebook wins tied to new AI product demand, but no definitive why. Bernie Blegen said won't talk specific customer architectures, focus on portfolio of best products.