MONOLITHIC POWER SYSTEMS INC Q1 FY2026 earnings call

• Record quarterly revenue of $804 million, 7% higher than Q4 2025 and 26% higher than Q1 2025. • Communications end market grew 33% sequentially due to power solutions for optical modules and switches. • Pipeline for automotive and enterprise data end markets, including server, accelerated with multiple new projects. • Sampled first high-speed interface products for DDR5 at major customers. • Grew capacity past $4 billion plan to target $6 billion in the near future. • Focus on innovation, solving customers' challenging problems, investing in new technologies to become full-service silicon-based solution provider. • Expand and diversify global supply chain for growth, stability, and adaptability.

In Q1, MPS achieved record quarterly revenue of $804 million. Communications end market grew 33% sequentially on the strength of power solutions for optical modules and switches. Pipeline for automotive and enterprise data end markets, including server, continued to accelerate. Sampled first high-speed interface products for DDR5 at major customers. MPS grew capacity past original $4 billion plan to aim for $6 billion in the near future. Revenue contribution % not explicitly broken down in detail but overall diversified market strategy is key.

• Expect 12% sequential growth for June quarter. • For enterprise data, floor for year over year growth raised to around 85% from previous 50% floor. • Auto segment expected to ramp later in the year after being roughly flat in first half. • Storage and compute have different dynamics with storage optimistic due to data center and notebook more cautious. • Not predicting which quarter ramps volumes but focused on winning designs.

• Need to adjust to fluid geopolitical and macroeconomic environment. • Supply chain risks related to maintaining diversity and potential constraints faced by other suppliers. • Uncertainties in predicting market trends and the timing of customer ramps for various segments.

Q: Dig into enterprise data side, trends between XPU and CPU server side.

A: CPU has been tailwind, growth drives intact, ramping new and existing customers, transition to modules, plain server tailwind continues.

Q: Storage and computing side, tailwinds/headwinds and difference between storage and computing.

A: Storage side strong indexed to data center, DDR5, HDD and SDD strong; notebook side more cautious due to potential TAM headwinds and lower margins in consumer part.

Q: Manufacturing, strategy around geographic placement of capacity and latest BCD generation.

A: Still around 60 nanometers, may go to 40 nanometers, $4 billion capacity geographically diverse both inside and outside China, focus on maintaining supply chain diversity.

Q: Guidance by segment, which segments above and below.

A: Enterprise data has 85% year over year growth floor as strong ordering patterns continued.

Q: Incremental upside from CPUs vs AI accelerator side.

A: Growth drivers intact, difficult to parse out between volume and content as overlapped.

Q: Capture enterprise data upside, supply or ability to capitalize.

A: NPS is one of the players, provides monolithic power solutions with advantage in power density, focus on delivering better product and winning sockets.

Q: Comms segment growth, could it grow as fast as enterprise data.

A: Comms segment saw strong activities and demand for high power density products, but not predicting market trend exactly.

Q: Sampling of products for 800 or plus minus 400 volts, plans for higher power conversion steps.

A: Sampling, focus on monolithics, integration capabilities, invested in module development since 2016, moving to 40 nanometers for higher power density.

Q: Material revenue from DDR5 high-speed interface product, when to see.

A: Not expecting contributor to 2026 revenue yet, but expanding footprint in the market.

Q: Comms business content in 800 gig optical modules and switches.

A: Don't talk about specific content layers for specific customers.

Q: Distribution channel inventory, inflationary-related pricing trends.

A: Channel lean, shipping to end market demand, input costs higher in some places, may raise prices to maintain margin profiles.

Q: Gross margin, puts and takes on guide.

A: Historically consistent with gross margin guide, Q2 increased incrementally due to better backlog visibility, cautious for second half.

Q: Robotics socket opportunities, incremental content.

A: Battery management, AI compute, actuators involved, variety of applications, difficult to judge dialogue content.

Q: ED segment, growth on merchant vs ASIC solutions.

A: Don't divide into such sides, winning due to power density.

Q: Auto segment visibility and growth in second half.

A: Pipeline expanding, belief ramp later in the year as designs won previously come to market.

Q: Rationale behind focusing on silicon carbide for 800 volt step down vs gallium nitride for lower voltage.

A: Silicon carbide devices proven, reliable, have deep know-how, integrated into modules; previously didn't believe in gallium nitride for higher powers.

Q: Supply chain management strategy and confidence in meeting customer demand.

A: Actively build inventory, listen to customers, product life cycle long, not passive, not limited by supply chain for enterprise data growth outlook.