Monolithic Power Systems, Inc. ( MPWR Quick Quote MPWR - Free Report) reported second-quarter 2021 non-GAAP earnings of $1.81 per share, which beat the Zacks Consensus Estimate by 7.1%. The bottom line increased 67.6% on a year-over-year basis. Revenues of $293.3 million rose 57.5% from the year-ago quarter’s figure and surpassed the Zacks Consensus Estimate by 4.5%. On a sequential basis, the top line surged 15.3%. The reported figure was also above the higher end of management’s guidance of $274-$286 million. Strong demand across each of the segments, along with incremental investment in production capacity and a diversified multi-market strategy drove year-over-year growth. Quarter in Detail Revenues by Product Family
Revenues in the DC to DC segment (95.1% of total revenues) soared 58.3% year over year to $278.8 million. Lighting Control (4.9% of total revenues) revenues rallied 43.7% to $14.5 million.
Revenues by End Market
Computing & Storage (29.9% of total revenues) revenues increased 36.9% year over year to $87.7 million. The market’s robust performance was driven by increases in market share for servers, solid uptick in storage and high-end notebooks on growing clout of cloud computing.
Consumer (25.9%) revenues surged 59.7% from the year-ago quarter’s levels to $76.1 million, reflecting gains from continued demand for new gaming consoles. Automotive (16.6%) revenues were $48.7 million, up 173.9% from the prior-year quarter’s figure. The company continued sales growth in infotainment products. Industrial (14.8%) revenues surged 62.9% to $43.3 million, courtesy of higher sales of power source applications’ products. Communications (12.8%) revenues advanced 24.5% to $37.5 million. The end-market gained from robust uptick in networking and wireless applications’ sales. Margins in Detail
Non-GAAP gross margin expanded 60 basis points (bps) from the year-ago quarter’s level to 56.3% due to lower overhead costs. Management had predicted the figure between 55.5% and 56.1%.
Non-GAAP operating expenses amounted to $70.3 million during the reported quarter, up 38.8% year over year. As a percentage of revenues, the figure contracted 320 bps on a year-over-year basis to 24%. Non-GAAP operating income climbed 79% year over year to $94.9 million. Non-GAAP operating margin (as a percentage of revenues) expanded 390 bps from the year-ago quarter’s level to 32.4%. Balance Sheet & Cash Flow
As of Jun 30, 2021, cash, cash equivalents and investments were $672.9 million, compared with $641.6 million reported as of Mar 31, 2021.
Monolithic Power generated operating cash flow of $96.9 million compared with $77.1 million in the prior quarter. Capital spending totaled $39.3 million in the second quarter. Guidance
For third-quarter 2021, the company projects revenues between $309 million and $321 million. The Zacks Consensus Estimate for revenues is currently pegged at $296.6 million, which indicates growth of 14.3% from the year-ago quarter’s reported figure.
Management anticipates non-GAAP gross margin between 57.6% and 58.2%. Zacks Rank & Other Stocks to Consider
Currently, Monolithic Power carries a Zacks Rank #2 (Buy).
Some better-ranked stocks worth considering in the broader technology sector are Avnet ( AVT Quick Quote AVT - Free Report) , CyberArk Software ( CYBR Quick Quote CYBR - Free Report) and Fortinet ( FTNT Quick Quote FTNT - Free Report) . Avnet, and CyberArk sport a Zacks Rank #1 (Strong Buy) while Fortinet carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here. Fortinet is scheduled to report earnings on Jul 29 while Avnet and CyberArk are scheduled to release earnings on Aug 11, and Aug 12, respectively. Long-term earnings growth rate for CyberArk, Avnet and Fortinet is currently pegged at 12.1%, 22.7%, and 14.3%, respectively.