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MPWR Q3 Earnings Surpass Estimates on Enterprise Data Strength
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Key Takeaways
MPWR's Q3 2026 earnings rose 73.2% to $8.19 per share, while revenues surged 63.1% to a record $1.20 billion.
Enterprise Data revenues surged 164.6% on strong AI and server demand, lifting the 2026 growth outlook.
Monolithic Power forecasts Q4 2026 revenues of $1.315B-$1.385B and targets $8B in annual capacity by H2 2027.
Monolithic Power Systems, Inc. (MPWR - Free Report) reported third-quarter 2026 non-GAAP earnings of $8.19 per share, which increased 73.2% year over year and beat the Zacks Consensus Estimate of $7.80 by 5%. Revenues surged 63.1% to $1.20 billion, beating the consensus mark of $1.16 billion by 3.6%.
Record sales reflected strong demand for artificial intelligence (AI) and server power solutions, supported by expanding customer relationships and higher module content. Enterprise Data revenues jumped 164.6% year over year, accounting for 42.1% of total sales.
MPWR's Profitability Expands Despite Higher Costs
GAAP net income increased 50.8% to $271.1 million, or $5.51 per share, from $179.8 million, or $3.74 per share, a year earlier. Non-GAAP net income climbed 77.3% to $402.7 million. GAAP operating income rose to $357.7 million from $195.2 million.
Non-GAAP gross margin expanded 20 basis points (bps) year over year to 55.7%. Non-GAAP operating expenses increased 38.4% to $205.3 million, while the non-GAAP operating margin improved 320 bps to 38.6%.
Stock-based compensation and related expenses totaled $106.3 million compared with $53.5 million in the preceding quarter. Management reiterated its preference for gradual gross margin expansion while maintaining pricing discipline amid rising supplier costs.
Monolithic Power Systems, Inc. Price, Consensus and EPS Surprise
Enterprise Data revenues reached $506.7 million, up 33.2% sequentially. Higher sales of power management solutions for AI and server applications drove growth, supported by stronger demand across existing customers.
Management raised its 2026 Enterprise Data revenue growth floor to 150% from 130%. Increasing adoption of power modules, customer diversification and higher content per computing platform remain major drivers. Application-specific integrated circuit customers have also contributed to demand for higher-value modules.
Storage and Computing revenues increased 3% year over year to $192.2 million but declined 3.8% sequentially. DDR5 power management products and storage applications supported sales, while weaker notebook demand, partly related to downstream memory constraints, remained a headwind.
MPWR's Communications and Automotive Sales Rise
Communications revenues surged 134.7% year over year to $187.4 million, representing 15.6% of total sales. Sequential growth of 42.5% reflected higher demand for power solutions used in optical modules and network switches.
Management expects optical module upgrades, including the transition to 1.6-terabit technology, and additional switching applications to support growth into 2027. Communications is expected to remain the company's second-fastest-growing end market.
Automotive revenues advanced 19.2% to $180.7 million, primarily benefiting from higher sales of advanced driver-assistance system power solutions. Monolithic received initial orders for its 48-volt power products, with 48-volt and zonal electrical architectures expected to drive further design opportunities in 2027.
Monolithic Broadens Its Industrial Product Portfolio
Industrial revenues increased 29% year over year to $71.4 million, reflecting higher sales of power sources. The company began ramping robotics solutions featuring sensors and motor control products across multiple geographic markets.
Consumer revenues declined 11.6% year over year to $64 million, although sales improved 12.6% sequentially. Management continues to prioritize new design wins across industrial and consumer applications to support future revenue opportunities.
The company also secured its first major data converter design win, with revenues ramp-up expected in 2027. Its expanding high-speed memory portfolio includes additional clock driver and registered clock driver products, which management expects to contribute in 2027 and 2028.
MPWR Expands Capacity and Maintains Liquidity
Cash, cash equivalents and short-term investments totaled $1.09 billion at September quarter-end, down from $1.41 billion in the preceding quarter. Operating cash flow increased to $289.9 million from $227.9 million.
Inventories increased to $764.9 million from $675.8 million, while inventory days based on current-quarter revenues declined to 130 from 140. The company repurchased $453.4 million of shares during the quarter.
Annual revenue-supporting capacity exceeded $6 billion, with management targeting $8 billion by the second half of 2027. The company also began sampling gallium nitride solutions for 800-volt data center architectures, complementing its silicon carbide offerings.
Monolithic Projects Higher Q4 Revenues
For the fourth quarter of 2026, management expects revenues between $1.315 billion and $1.385 billion. Non-GAAP gross margin is projected between 55.5% and 56.1%, while non-GAAP operating expenses are expected to be in the range of $216.8 million to $220.8 million.
GAAP operating expenses are forecast between $334 million and $342 million. Management expects a non-GAAP tax rate of 15% for 2026.
In October, the board authorized an additional $500 million in share repurchases, bringing the total current authorization to $1 billion after third-quarter buybacks.
Arista Networks Inc. (ANET - Free Report) is scheduled to release third-quarter 2026 earnings on Nov. 3. The Zacks Consensus Estimate for earnings is pegged at $1.08 per share, suggesting growth of 44% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 22.75%. The company delivered an average earnings surprise of 8.88% in the last four reported quarters.
Motorola Solutions, Inc. (MSI - Free Report) is set to release third-quarter 2026 earnings Nov. 4. The Zacks Consensus Estimate for earnings is pegged at $4.41 per share, implying growth of 8.62% from the year-ago reported figure.
Motorola has a long-term earnings growth expectation of 10.55%. The company delivered an average earnings surprise of 7.17% in the last four reported quarters.
HubSpot, Inc. (HUBS - Free Report) is scheduled to release third-quarter 2026 earnings on Nov. 4. The Zacks Consensus Estimate for earnings is pegged at $3.28 per share, suggesting growth of 23.31% from the year-ago reported figure.
HubSpot has a long-term earnings growth expectation of 21.25%. The company delivered an average earnings surprise of 6.13% in the last four reported quarters.
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MPWR Q3 Earnings Surpass Estimates on Enterprise Data Strength
Key Takeaways
Monolithic Power Systems, Inc. (MPWR - Free Report) reported third-quarter 2026 non-GAAP earnings of $8.19 per share, which increased 73.2% year over year and beat the Zacks Consensus Estimate of $7.80 by 5%. Revenues surged 63.1% to $1.20 billion, beating the consensus mark of $1.16 billion by 3.6%.
Record sales reflected strong demand for artificial intelligence (AI) and server power solutions, supported by expanding customer relationships and higher module content. Enterprise Data revenues jumped 164.6% year over year, accounting for 42.1% of total sales.
MPWR's Profitability Expands Despite Higher Costs
GAAP net income increased 50.8% to $271.1 million, or $5.51 per share, from $179.8 million, or $3.74 per share, a year earlier. Non-GAAP net income climbed 77.3% to $402.7 million. GAAP operating income rose to $357.7 million from $195.2 million.
Non-GAAP gross margin expanded 20 basis points (bps) year over year to 55.7%. Non-GAAP operating expenses increased 38.4% to $205.3 million, while the non-GAAP operating margin improved 320 bps to 38.6%.
Stock-based compensation and related expenses totaled $106.3 million compared with $53.5 million in the preceding quarter. Management reiterated its preference for gradual gross margin expansion while maintaining pricing discipline amid rising supplier costs.
Monolithic Power Systems, Inc. Price, Consensus and EPS Surprise
Monolithic Power Systems, Inc. price-consensus-eps-surprise-chart | Monolithic Power Systems, Inc. Quote
Monolithic's Enterprise Data Business Accelerates
Enterprise Data revenues reached $506.7 million, up 33.2% sequentially. Higher sales of power management solutions for AI and server applications drove growth, supported by stronger demand across existing customers.
Management raised its 2026 Enterprise Data revenue growth floor to 150% from 130%. Increasing adoption of power modules, customer diversification and higher content per computing platform remain major drivers. Application-specific integrated circuit customers have also contributed to demand for higher-value modules.
Storage and Computing revenues increased 3% year over year to $192.2 million but declined 3.8% sequentially. DDR5 power management products and storage applications supported sales, while weaker notebook demand, partly related to downstream memory constraints, remained a headwind.
MPWR's Communications and Automotive Sales Rise
Communications revenues surged 134.7% year over year to $187.4 million, representing 15.6% of total sales. Sequential growth of 42.5% reflected higher demand for power solutions used in optical modules and network switches.
Management expects optical module upgrades, including the transition to 1.6-terabit technology, and additional switching applications to support growth into 2027. Communications is expected to remain the company's second-fastest-growing end market.
Automotive revenues advanced 19.2% to $180.7 million, primarily benefiting from higher sales of advanced driver-assistance system power solutions. Monolithic received initial orders for its 48-volt power products, with 48-volt and zonal electrical architectures expected to drive further design opportunities in 2027.
Monolithic Broadens Its Industrial Product Portfolio
Industrial revenues increased 29% year over year to $71.4 million, reflecting higher sales of power sources. The company began ramping robotics solutions featuring sensors and motor control products across multiple geographic markets.
Consumer revenues declined 11.6% year over year to $64 million, although sales improved 12.6% sequentially. Management continues to prioritize new design wins across industrial and consumer applications to support future revenue opportunities.
The company also secured its first major data converter design win, with revenues ramp-up expected in 2027. Its expanding high-speed memory portfolio includes additional clock driver and registered clock driver products, which management expects to contribute in 2027 and 2028.
MPWR Expands Capacity and Maintains Liquidity
Cash, cash equivalents and short-term investments totaled $1.09 billion at September quarter-end, down from $1.41 billion in the preceding quarter. Operating cash flow increased to $289.9 million from $227.9 million.
Inventories increased to $764.9 million from $675.8 million, while inventory days based on current-quarter revenues declined to 130 from 140. The company repurchased $453.4 million of shares during the quarter.
Annual revenue-supporting capacity exceeded $6 billion, with management targeting $8 billion by the second half of 2027. The company also began sampling gallium nitride solutions for 800-volt data center architectures, complementing its silicon carbide offerings.
Monolithic Projects Higher Q4 Revenues
For the fourth quarter of 2026, management expects revenues between $1.315 billion and $1.385 billion. Non-GAAP gross margin is projected between 55.5% and 56.1%, while non-GAAP operating expenses are expected to be in the range of $216.8 million to $220.8 million.
GAAP operating expenses are forecast between $334 million and $342 million. Management expects a non-GAAP tax rate of 15% for 2026.
In October, the board authorized an additional $500 million in share repurchases, bringing the total current authorization to $1 billion after third-quarter buybacks.
Zacks Rank
Monolithic Power currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Arista Networks Inc. (ANET - Free Report) is scheduled to release third-quarter 2026 earnings on Nov. 3. The Zacks Consensus Estimate for earnings is pegged at $1.08 per share, suggesting growth of 44% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 22.75%. The company delivered an average earnings surprise of 8.88% in the last four reported quarters.
Motorola Solutions, Inc. (MSI - Free Report) is set to release third-quarter 2026 earnings Nov. 4. The Zacks Consensus Estimate for earnings is pegged at $4.41 per share, implying growth of 8.62% from the year-ago reported figure.
Motorola has a long-term earnings growth expectation of 10.55%. The company delivered an average earnings surprise of 7.17% in the last four reported quarters.
HubSpot, Inc. (HUBS - Free Report) is scheduled to release third-quarter 2026 earnings on Nov. 4. The Zacks Consensus Estimate for earnings is pegged at $3.28 per share, suggesting growth of 23.31% from the year-ago reported figure.
HubSpot has a long-term earnings growth expectation of 21.25%. The company delivered an average earnings surprise of 6.13% in the last four reported quarters.