Monolithic Power Systems Q1 2026 Earnings Report

Monolithic Power Systems EPS Results

• Actual EPS: $5.10
• Consensus EPS: $4.90
• Beat/Miss: Beat by +$0.20
• One Year Ago EPS: $4.04

Monolithic Power Systems Revenue Results

• Actual Revenue: $804.19 million
• Expected Revenue: $781.93 million
• Beat/Miss: Beat by +$22.26 million
• YoY Revenue Growth: +26.10%

Monolithic Power Systems Announcement Details

• Quarter: Q1 2026
• Date: 4/30/2026
• Time: After Market Closes
• Conference Call Date: Thursday, April 30, 2026
• Conference Call Time: 5:00PM ET

Monolithic Power Systems (NASDAQ:MPWR) (NASDAQ: MPWR) is a semiconductor company that designs, develops and markets high-performance power-management solutions. Its products help convert, regulate and control electrical power in electronic systems, with applications spanning computing and storage, automotive, industrial, communications infrastructure, consumer electronics and other markets.

The company’s product portfolio includes power-management integrated circuits, DC-to-DC converters, power modules, battery-charging and management solutions, LED drivers, motor drivers, voltage regulators and related analog and mixed-signal devices. These products are used by manufacturers to improve the efficiency, reliability and size of electronic equipment and systems.

Monolithic Power Systems was founded in 1997 by Michael Hsing, who serves as the company’s chief executive officer. The company is headquartered in Kirkland, Washington, and serves customers globally through operations and sales activities in North America, Asia, Europe and other international markets.

Monolithic Power Systems Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: MPS reported record Q1 revenue of $804 million, up 7% sequentially and 26% year‑over‑year, led by a 33% sequential jump in communications (optical modules and switches).
• Positive Sentiment: The company raised its enterprise data growth floor to about 85% year‑over‑year, citing extended ordering/backlog and sampling of high‑speed DDR5 interface products at major customers, improving near‑term visibility.
• Positive Sentiment: MPS is expanding manufacturing capacity beyond its prior $4 billion plan toward a $6 billion target with geographically diversified supply‑chain plans and ongoing BCD scaling and module automation to support higher power‑density applications.
• Negative Sentiment: Gross margin remains near the low end of the company’s model (~55.5%) with only modest Q2 improvement guided and caution about potential second‑half headwinds that could constrain profit expansion despite revenue gains.
• Neutral Sentiment: MPS is sampling 800‑volt SiC step‑down solutions, developing GaN for lower‑voltage segments, and pursuing robotics/physical‑AI design wins — signaling longer‑term TAM upside but with uncertain timing and revenue impact.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Monolithic Power Systems, Inc. first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. We are joined by speakers Michael Hsing, CEO and Founder of MPS; Robert Dean, Interim CFO; Tony Balow, Vice President of Finance. Now I would like to turn the conference over to Arthur Lee to read a safe harbor statement. Please go ahead.

[Arthur Lee, Finance Manager at Monolithic Power Systems]

Earlier today, MPS released a written commentary on our results of operations for the first quarter ended March 31, 2026. This document can be found on our website. Before we begin, I would like to remind everyone that in the course of today's presentation, we may make forward-looking statements and projections within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risk and uncertainties. The risk, uncertainties, and other factors that could cause actual results to differ from these forward-looking statements are identified in the safe harbor statements contained in the Q1 2026 earnings commentaries and in our SEC filings, including our Form 10-K and Forms 10-Q, which can be found on our website. Our statements are made as of today, and we assume no obligation to update this information. I would like to turn the call over to Tony.

[Tony Balow, VP of Finance at Monolithic Power Systems]

Thanks, Arthur. Good afternoon, and welcome to our Q1 2026 earnings call. In Q1, MPS achieved record quarterly revenue of $804 million, 7% higher than the fourth quarter of 2025 and 26% higher than the first quarter of 2025. Our quarterly performance was a result of our continued innovation, our consistent execution, and the resilience of our diversified market strategy. Let me call out a few highlights from the quarter. Our communications end market grew 33% sequentially on the strength of our power solutions for optical modules and switches. The pipeline for our automotive and enterprise data end markets, including server, continue to accelerate as we won multiple new projects across customers and regions.

[Tony Balow, VP of Finance at Monolithic Power Systems]

We sampled our first high-speed interface products for DDR5 at major customers. MPS continued to grow our capacity past our original $4 billion plan with a new goal of reaching $6 billion in the near future. We continue to adjust to the fluid geopolitical and macroeconomic environment. Our diversified market strategy remains unchanged. MPS focuses on innovation and solving our customers' most challenging problems. We consistently invest in new technologies that open new end markets and applications and accelerate our transition from chips only to a full-service silicon-based solution provider. Finally, we continue to expand and diversify our global supply chain, allowing us to capture future growth opportunities, maintain supply stability, and rapidly adapt to market changes as they occur. Operator, you may now open the webinar for questions.

[Operator]

As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Ross Seymore with Deutsche Bank. Your line is open.

[Ross Seymore, Analyst at Deutsche Bank]

Hi, guys. Thanks for letting me ask a question. I just wanted to dig a little bit into the enterprise data side of things. Can you just talk about the different trends you're seeing between kind of the XPU side versus the CPU, server CPU side? I know you mentioned in your preamble that the backlog and visibility was improving in both, Given the strength of demand we're hearing elsewhere in the server CPU side of things, I wondered how you guys are doing there.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Both are good. Yeah, maybe, Tony, you can talk to that.

[Tony Balow, VP of Finance at Monolithic Power Systems]

I'll give a little more color. Ross, if you recall, even last year in 2025, we had talked about CPU being a tailwind, and we continue to see that here in 2026. If you look across enterprise data for us, right, as we've said, it's increasingly hard to differentiate between sort of AI solutions and CPU, but in general, all the growth drivers are intact. We're ramping new customers, we've been ramping existing customers. We continue to see the transition to modules, and like I said, plain server has been a tailwind, and we think it will continue to be so.

[Ross Seymore, Analyst at Deutsche Bank]

Thanks for that. I guess the second question would be on the storage and computing side of things that seem to be a little bit better than feared in the first quarter. Talk about the tailwinds or headwinds given what's happening from a macro perspective, and then potentially the difference between what you guys do on the storage side versus the computing side?

[Tony Balow, VP of Finance at Monolithic Power Systems]

Yeah, I'll start on that one, and then I'll let Michael and Rob jump in. As you know, right, that segment really has sort of 2 separate businesses in it. The storage side obviously has remained strong as it's really been indexed to a lot of the enterprise data center business, and we've seen strength in DDR5, we've seen strength in HDD, SSD, continue out of last year and into Q1. On the notebook side, we're still more cautious on that side. As you know, there's really 2 dynamics there. I'm sure you've heard other companies talk about potential TAM headwinds associated with memory shortages or elasticity from memory prices. Remember, we also selectively play in that part of the market that has lower margins around consumer.

[Tony Balow, VP of Finance at Monolithic Power Systems]

I think, and if we look forward on that business going through the year, I think we're still very optimistic about storage staying strong, probably much more cautious on the notebook side.

[Ross Seymore, Analyst at Deutsche Bank]

Thank you.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

The notebooks, we don't really care this quarter or next quarter. As long as we develop the best solutions, our power densities and our customers ease of use and these design win that we have, the revenue will run.

[Tony Balow, VP of Finance at Monolithic Power Systems]

All right, operator, next question.

[Operator]

Thank you. Our next question comes from William Stein with Truist Securities. Your line is open.

[William Stein, Analyst at Truist Securities]

Great. First I'd like to ask about manufacturing. You noted in the press release that you passed the $4 billion target. You are now working to $6 billion capacity. Maybe you can update us as to the strategy around geographic placement of your capacity, and maybe remind us what's going on from a technology perspective. This used to be a big focus, you know, of the various BCD iterations that you that you produce. Can you bring us up to speed as to what is the latest BCD generation? Thank you.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

I answer your last portions that first. We are still around the 60 nanometers, and okay, maybe we'll go down to 40-45 nanometers. These ones like, as a power density keep as a market trend, the power increase it, and we increase the power densities. It's just old stories. You know, we keep doing the same things in the last 20 years. We just do better than our competitors. For the $6 billion goal for manufacturing pipelines, we clearly and we have, we see our near futures. We see a lot more activities, of a lot more potentials.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

All these design win is imminent come, they'll turn into our revenues.

[Tony Balow, VP of Finance at Monolithic Power Systems]

Maybe just to add, Will, I think I'm telling you what you know, on the $4 billion of capacity, we talked about that being very geographically diverse, both inside and outside of China. Remember, our strategy really is to maintain that supply chain diversity. We'll continue to try to have that balance going forward.

[Operator]

Thank you. Our next question comes from Joshua Buchalter with TD Cowen. Your line is open.

[Joshua Buchalter, Analyst at TD Cowen]

Hey, guys. Thank you for taking my question, and congrats on the results. Maybe to start, can you just help us a little bit with the models? Any help you can give us on the guidance by segment as we think about even sort of a 12% sequential growth for the June quarter, which segment should be above and below? Thank you.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Well, I think that let me start with you guys are more interested the most, okay? Bernie last time, okay, talk to you guys about have a 50% of flaws. I'll have 50% flaws. Okay, I, I'll let Tony talk about, but give you a better news today, okay? I'm more excited about the other projects that I people involved, okay? Me and the building automations and audio project site and as well, as well as the robotics. These ones will pave the way for our next 2-3 years out, and again, the the remain on the same growth trajectory.

[Tony Balow, VP of Finance at Monolithic Power Systems]

Yeah. I'll follow up a little bit as kind of marching through. Josh, I know one of the first thing people are interested in is enterprise data, I'll start there. As you recall, we tend to be fairly conservative in how we look at these things, waiting for the backlog to be in place. Late last year, we talked about 30%-40% growth year-over-year. In the last call, we kinda rose that to a 50% floor. The strong ordering patterns that we saw start last year have kind of continued through Q1. At this point in time, I think we're comfortable raising that floor up to around 85% year-over-year growth.

[Tony Balow, VP of Finance at Monolithic Power Systems]

That will certainly be one of the drivers of growth for the year for MPS. Oh, sorry, Mike.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

I'll let Tony deliver better than our last CM, last.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Last CFO.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Okay.

[Tony Balow, VP of Finance at Monolithic Power Systems]

You know, if you look at the others, Josh, is I think we've been signaling on communication as we become increasingly excited about that end market with not only the optical module growth, but due to switches as well. We certainly would expect those to be drivers. Auto, I think is a very consistent story. We said that would be, you know, roughly flat through the first half of the year and ramping in later in the year. Storage and compute, we talked about a bit already with Ross, right? There's really two different dynamics going in there, where we're still very optimistic on storage pull through by data center, more cautious on notebook.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Here again, overall, we cannot Predict which quarter goes ramp, what volumes. That's not our business to do that. Our winning strategy is same as the last 20 years. As long as we deliver the best product and service our solving our problem for our customers. I don't see we lose any socket, okay? The major socket at least, okay? We keep winning. Those business, those design wins will turn into revenues.

[Joshua Buchalter, Analyst at TD Cowen]

Thank you both for all the color there. You know, unfortunately, when you deliver good news, you still get annoying follow-up questions. Yeah, I guess if we think about the incremental upside since last quarter, any help you can give us on how much of that's coming from CPUs, as Ross mentioned earlier, versus more confidence into either content or visibility into share on the AI accelerator side? Thank you both and congratulations again.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

That's a good try. Okay, now I'm not gonna give it to you. Okay.

[Tony Balow, VP of Finance at Monolithic Power Systems]

Yeah, Josh, I think we just fall back, and maybe we've talked about all the growth drivers and say they're intact. I don't think we wanna try to parse out between volume and content, 'cause it'd be very specific.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

In reality, it's very difficult to separate it. What is called AI? What is called servers? There's a lot of agents, a small segment. These are very a small utility box. We see a lot happening. I mean, maybe I don't use the right words, you guys use it. I mean, these are portable AI devices, just based on GPUs. These are happening. That's clearly overlapped with the CPU and the GPU powered.

[Joshua Buchalter, Analyst at TD Cowen]

Okay. Kind of to try. Thank you, guys.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Okay.

[Operator]

Thank you. Our next question comes from Rick Schafer with Oppenheimer & Co. Your line is open.

[Rick Schafer, Analyst at Oppenheimer]

Thanks, guys, I'll add my congratulations. Just a wow, I guess, on the outlook. Maybe if I could just for a second talk about enterprise data. I've got a follow-up, Michael, that you'll like better. You know, the top 4 CSPs, I think just last night, I mean, now we're over $700 billion in CapEx just from them. I mean, seems like you guys are clearly seeing that increased order velocity. My real question is, are you able to capture all of that upside? I mean, is there anything, you know, curbing your supply, your ability to capitalize, Michael? 'Cause in years past, you guys have, you know, MPS has kind of, you've kinda made your bones on always being ready for that upside and kinda never being caught short.

[Rick Schafer, Analyst at Oppenheimer]

I'm just kinda curious is that still the case or kinda what you're seeing?

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

I think that's exactly right. Although we have a few more players. Let me go back a few quarters ago, like in these AIs and, like, GPU powers. In the given times will be the performance and also the manufacturing capabilities and the reliability will remain as only a few players. After a year, couple of years, it's being very clear. MPS is one of my players. As I promised over a year ago or so. We continue to do well, like in many aspects, especially for the power density side.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

We are the best in the market segment because we provide a total monolithic power solutions. We can use a single piece of silicon versus our competitor use a multiple piece of silicon. That clearly shows our advantage. Yet we don't wanna be the dominant suppliers, we more just wanna be a part of it. Our goal is diversified growth.

[Rick Schafer, Analyst at Oppenheimer]

Got it. For my follow-up, Michael, yeah, I'm just curious on physical AI. Obviously, you know, it's getting a lot more, you know, a lot more people talking about it and seeing a lot more focus. I'm just curious if you could flesh out maybe a little more your plans for that segment. You know, what kind of TAM have you guys identified there? I mean, you called out robotics, you know, a minute ago on the call. I mean, can that be a meaningful revenue contributor next year? When would we start to see, you know, robotics start to drive top line?

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

We see this year, the volume is still low, but it can kind of move the needle slightly. If we go up the trends, this is still at the very beginning, it's very difficult to predict. Many companies have launched the first high volume robotics. Though we clearly benefited from it. After that, we cannot call the market segment growth, the future is there. Like, clearly when more AI adopted it in robotics, the application will be widened.

[Tony Balow, VP of Finance at Monolithic Power Systems]

I think what you see is us try to run the typical MPS playbook, which right now we're trying to engage broadly and win all the designs we can. We can't control when the customers ramp, but we can control winning the sockets, and that's the broad engagement you really see happening in 2026.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

That's very good point. Yep.

[Rick Schafer, Analyst at Oppenheimer]

Great. Well, thanks guys.

[Operator]

Thank you. Our next question comes from Quinn Bolton with Needham & Company. Your line is open.

[Quinn Bolton, Analyst at Needham]

Hey, guys. I'll offer my congratulations as well on the results and outlook. Michael, Tony, I guess I wanted to ask on the comms segment, it was up 33% sequentially in March. It sounds like it's gonna be one of the faster-growing segments in the June quarter. When I look at optical modules, I think 800 gig modules are more than doubling in 2026. My question is, do you think the comms segment could actually grow as fast, if not faster, than enterprise data this year, given those trends?

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Yeah. Again, I'll follow Tony's answer for the last one. Like, we're in a business to predicting what the market trend is. Okay. We these happens, okay, in this particular segments. We saw a lot of activities and a lot of demand for high power density product and especially modules. I think as I mentioned about maybe a few quarters ago, this quarters it's just jumps out. From what we learned, the power density of the module in a, with a very confined area, and the data rate keep increasing. With the opticals or with the other type of a format, okay, the power will keep increasing, okay?

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

In what rate, I cannot predict, but in a small confined areas and the power density is critical. That's our basic technologies that we can apply in that segments, and then we execute it fast, and then we capture the market.

[Tony Balow, VP of Finance at Monolithic Power Systems]

Yeah, I think as ordering patterns have continued to be strong and extend, we still don't have them all the way through the year. I think it's pretty tough for us to call, you know, all the way through the back half right now. Certainly, we'd put that end market, you know, above the corporate average.

[Quinn Bolton, Analyst at Needham]

Got it. Okay.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Yeah, the same way, same way. I'll go back to servers, okay, and go back to the server side, okay. We, in the last years, we don't know, okay, I mean, the server market will pick it up or not picking up, okay. As far as we listen to our customers, we get our inventory ready, okay, and when they need it, they have those product. We just focus on deliver better product, winning more socket.

[Tony Balow, VP of Finance at Monolithic Power Systems]

Yeah. I mean, and I'm a broken record, but I think it's a great example of, again, diversified approach. You land, and you sort of look at the other sockets available to the applications and continue to grow your SAM.

[Quinn Bolton, Analyst at Needham]

Great. My follow-up question, Michael, you guys have been sampling your products for 800 or ±400 volts for a few quarters now. Wondering if you could provide any feedback on how that activity is, you know, going. Can you give us any thoughts on there's a lot of debate between whether those higher power conversion steps will be more GaN-based or silicon carbide-based. If it goes GaN, will you guys have GaN-based solutions ready for that for that opportunity?

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

No. We based on silicon carbide and that's our solutions. We do in the past, I openly said I don't believe GaN, okay. Now start to, I didn't know what I was talking about, I guess. Okay. We in the last, start of last year, we developed our GaN, but it's not for 800 volts. It's for low voltage and lower powers and lower power segments. We start to develop these fundamental technologies in GaN. To answer the first part of our question, yes, we're sampling, okay, and rather sample or co-develop that systems with our customers, okay. And also our customers' customers.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

We don't talk about those, right, until, I guess, you guys ask for it, okay. 800 volts became a household numbers, like a household names in the on Wall Street, okay. We start to talk about it. Our products is working and I think the overall the environment and in the new 800 volts power bus data centers, a lot of things has to be resolved. We just have our for that application is ready, okay? Also have a 800 volts, okay, go to a 10,000 volts, okay? That's another segment, has to be developed a lot more, lot more efficient power conversions.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

These are all part of the pictures. MPS will play in that, in those segments.

[Operator]

Thank you, Michael. Thank you. As a reminder, to ask a question, please press star one one on your telephone. Again, that is star one one to ask a question. Our next question comes from Tore Svanberg with Stifel. Your line is open.

[Tore Svanberg, Managing Director at Stifel]

Yes, thanks, Michael, Tony. Congrats on another record quarter. I had a question maybe as a, as a follow-up to a previous question on power. I do realize there's a lot of focus on 800 volt, but before we get there, you know, there's the move to 2,000 or 2, to 2,000 watt GPUs. I know there's a lot of sort of wannabe power management companies out there, Michael. You know, just hoping you could touch on, you know, 2 of the 3 things that really make MPS so unique and differentiated to handle those types of power levels. Cause that is not like a 2028 timeframe, right? I mean, that's already next year. Yeah, if you could give some color there, that'd be great.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Yeah. Okay. That's a good question. I can touch it. One of them I already said earlier. Like, MPS is focused on the monolithics. We do what is the most cost-effective, and we do, and how we do the integrations. We have the capabilities, like, to integrate or disintegrate, okay? The integrations in a way we can put it in one modules, and that's a huge advantage. With the multiple other chips, okay, and if we use a particularly discrete power component, okay, discrete power FETs, it's very difficult to do for manufacturing the modules. The second things I should mention that, and that we invested in a module development unit for other segments, actually.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Since 2000, 2016, we want to move up from providing silicon-only power conversions, we do a plug-and-play solution. That journey we started 2016. Immediately we know how we test these devices and how we qualify these devices. If it's high volumes and high qualities, it can't be touched by humans. Like, we develop our own test systems and own reliability systems. These are fully automated. Actually, it's all based on MPS motion product. These ones are very unique. Before these systems put in productions, we can't find anything like this on the market. That's, I think to me, this is a huge advantage.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

The other one is the last one that will go back to semiconductors, and again, we, as we talk about this, we use the 60 nanometers, and okay, now we move it to 40 nanometers. Those increase the power density by, last time we talked about 3 amps per millimeters cube. Now we've gone past that.

[Tore Svanberg, Managing Director at Stifel]

Great. Thank you for that, Michael. As my follow-up, you know, when you mention a new product, I always, you know, listen to you because I remember you talked about, you know, 800 gig optical components being in your market, and before you knew it, you had a huge business there. You now mentioned you have your first high-speed interface product sampling for DDR5. Just curious, when should we start to see material revenue from that business? Could that also grow into a, you know, several hundred million dollar business over the next few years? Thank you.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

That's absolutely right. Okay. Frankly, I don't know anything about this high speed. Which is the highest of best engineers, they cut them loose, and they create this, okay. From a business side, it's our natural to like a way of expanding the service total service market segment that increase our SAM. We have a pretty good positions in PMIC in memory. We introduce timing timer timing drivers, okay. And timing control, whatever it's like. I mean, also temperature sensors. Now there's RCD or whatever the things that came in. I know it's very difficult. It is beyond my understanding.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Like, our engineers and our people, they pull it off. We have a few people that are compare other company, like they have 50 people or that design groups. We will be able to pull it off in a few years. These are brilliant guys, they want to make things happen. The revenue, usually we don't talk about it, talk about a product, we sample those products. Our, clearly in that market segment, our customers are very much welcome. We have another player.

[Tony Balow, VP of Finance at Monolithic Power Systems]

Tor, I'll just help you with the model a little bit. I wouldn't really have that as being a contributor to 2026 revenue. I think we're really highlighting it as we continue to expand our footprint, you know, in that market.

[Tore Svanberg, Managing Director at Stifel]

That's fair. Thank you again, and congrats.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Thank you. Mm-hmm.

[Operator]

Thank you. Our next question comes from Gary Mobley with Loop Capital. Your line is open.

[Gary Mobley, Analyst at Loop Capital]

Hi, guys. Let me also extend my congratulations. I'm curious about the comms business. That definitely is a standout for the quarter in terms of growth upside, and I presume carrying through into the second quarter and for the balance of the year as you previewed already. What I'm most curious about is, you know, how much content you have in these 800 gig optical modules, and I assume maybe top rack switches. You know, maybe if you can put it in the context of, you know, by how much you see your content increasing in rack scale solutions for accelerated compute, you know, given this beachhead, you know, in these two new applications.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

I think it's more than a beachhead now. So like we're pretty well beyond the beach now. Okay, and, Tony, you want it?

[Tony Balow, VP of Finance at Monolithic Power Systems]

Yeah. I think we're gonna stop short of kind of giving a dollar content. Obviously in the optical modules, right, we have a module in the module doing that. We obviously look at more of that than a discrete device. If you talk about switches and things of that sort, you have a whole different number of trays, for example. You have switches, you have NIC cards, you have other things like that, which all require power. I think the opportunity is, right, is you have a number of different processors that sit in these racks that we can provide power for and that we've been expanding that all sit within our Communication segment. I think we're, as usual, right, we're not gonna talk about specific content layers, especially for specific customers.

[Gary Mobley, Analyst at Loop Capital]

Okay. As my follow-up, I wanted to ask about distribution channel inventory. I know it's been running lean. Is it still, you know, lean relative to, you know, where you would normally, you know, place your distribution inventory? Then as well, maybe if you can talk about the sort of inflationary-related pricing trends that you have to pass along?

[Tony Balow, VP of Finance at Monolithic Power Systems]

I'll take that one. With regards to our distribution channel, we don't have a great deal of perfect visibility there. What we have seen, at least in 2025 and carrying into 2026, is that the channel has been very lean and that, you know, implies to us that, you know, we're shipping to what demand is at the market. Beyond that, we're looking good.

[Gary Mobley, Analyst at Loop Capital]

Okay. Pricing?

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

On the-

[Gary Mobley, Analyst at Loop Capital]

Go ahead.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

For the pricing, cost pricings and, yeah, the, some of the costs, is higher, and, we see the, a lot of activities, and. We will keep, the goal is that we keeping our margin, profiles.

[Tony Balow, VP of Finance at Monolithic Power Systems]

Yeah. I think, just to add to Michael, we're not looking at it as a broad-based across the board, but there are places where, you know, input costs have gotten higher. People are asking for expedited supply chains and things of that sort. In those cases, yeah, you could see us raise prices to stay within our gross margin model.

[Gary Mobley, Analyst at Loop Capital]

Thank you.

[Operator]

Thank you. Our next question comes from Joe Quattrocchi with Wells Fargo. Your line is open.

[Joe Quattrocchi, Analyst at Wells Fargo]

Yeah. Thanks for taking the question. Maybe just to follow up there on the gross margin. Wondering if you could just share any of the puts and takes on the guide? It just feels like, you know, obviously very positive revenue acceleration and kinda not a ton of follow-through on gross margin, kind of still stay in that range.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Yeah. Okay. I again, I said the margins in the last couple of quarters since margins are on the low end. Although it's in our, in our models, okay, it's on the low end. We still improve the yields on the modules. I think that we don't have much of a headwind, okay. We're moving up. I don't wanna give you a false hope that we're gonna jump very high so like it seems okay. That's not MPS. We don't do that kind of things, okay.

[Tony Balow, VP of Finance at Monolithic Power Systems]

I'll expand a little bit on what Michael just said. Historically, we've been very consistent with delivering to our gross margin guide. For the last 4 quarters, we've been flat at 55.5%, which is at the low end of our gross margin model for growth, which ranges 55%, mid-50s%-upper 50s%. For Q2, as you noticed, we did have the confidence to increase incrementally our gross margins, mainly because we've gotten better visibility to our backlog. We saw this happening in the fourth quarter of last year, and it's continued into the first quarter of this year. That has again given us some confidence.

[Tony Balow, VP of Finance at Monolithic Power Systems]

We do, however, do see some strong headwinds, potentially in the second half, and so we're not, we're remaining cautious, for the guide in the second half of the year.

[Joe Quattrocchi, Analyst at Wells Fargo]

Got it. That's helpful. Maybe just on the robotics socket opportunities you talked about, you know, up for grabs or to win this year. Do we think about those as being incremental? I think you talked about $150 of content, like for humanoid back at the Analyst Day. Is that the right way to think about it, or are those expanding opportunities?

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

It really varies. I mean, humanoid is the most visible. You only see some dancing robots, and those kind of. What we focus on is in the robotics. If it's remote and without a power cord plugging the robot. Those have the battery operations. Our battery management product plays a role in there. The other one is the AI side, the compute side, for power the GPUs, and these autonomous control units, and also as well as these sensors. The other segment is the actuators, the motion side. That's overall we sell. We offer for the robotic companies.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Many applications, it's in the, in the, in the actuators, and they can be in a medical assist.

[Tony Balow, VP of Finance at Monolithic Power Systems]

Uh, uh, r-

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

For rehab purposes, okay. We've seen those kind of things happening. For the dollar content, as I go back to your dollar content, it's very difficult to say, okay. It's a variety of applications. We sell in chip and to selling modules, okay. So the dollar content is also different, and it's very difficult to judge. The trend is, these robot will happen, and the world will be a lot more automated, and it can assist the human to do a lot of things, okay.

[Joe Quattrocchi, Analyst at Wells Fargo]

Thank you.

[Operator]

Thank you. As a reminder, to ask a question, please press star one one on your telephone. Again, that is star one one to ask a question. Our next question comes from Chris Caso with Wolfe Research. Your line is open.

[Chris Caso, Managing Director at Wolfe Research]

Yes, thank you. Good evening. I guess the first question would be about the ED segment. And if you could talk about the growth on merchant solutions versus ASIC solutions this year, and, you know, what you're expecting with regard to content. I know you've got a strong position in both, but do you expect outsized growth in one area or the other? Any color you could provide would be helpful. Thank you.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

We don't, we don't divide it into these are the learning side and influencing sides, okay. Frankly, we don't know how to separate it, and they could use the same, similar product. What we do is that while we're winning all these segments is because the power density, as I said earlier, okay? Nobody want to waste the power. Efficiency is power density is directly related to power efficiency. They want a smaller size, and they wanna have a high efficiency. It really doesn't matter to us which segment.

[Tony Balow, VP of Finance at Monolithic Power Systems]

Chris, the only thing I'd add, right, is I think is we're comfortable raising the floor from 50% to 85%, not because there's been a fundamental change in the growth drivers or how we're approaching the market. It's really, as you know, our more comfort about what's in backlog, and we've seen that extended ordering pattern. I think to Michael's point, you know, I don't think we subdivided the content and volume. I just wanna make sure you know that I don't think anything's changed other than being able to see more orders in the books going forward.

[Chris Caso, Managing Director at Wolfe Research]

Got it. Thanks. As a follow-up, if I could ask about the auto segment, and you talked about that being flattish in the first half with some growth in the second half. You know, obviously auto's been a little more variable in terms of, you know, its recovery. You know, there was some data out of China, which was a little weaker in the beginning of the year. You know, perhaps you give some color on the visibility you have at auto and why you think that starts to grow again in the second half?

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

I don't pay attention to these, which one is strong, which one's, which segment is strong, which continent is more strong or weaker. Again, because these are chasing the market. We're not chasing the market. Whatever happen, happens, and okay, we have the product ready, we can deliver. Tony, you can talk about in near term, okay, I don't pay any attention to it.

[Tony Balow, VP of Finance at Monolithic Power Systems]

Yeah, I mean, I can add a little bit more there. I think, Chris, the shape of the year, as you said, right, our expectation there hasn't necessarily changed. Why we've talked about seeing that ramp later in the year is really on our belief on one of some of these designs that we previously won come to market. We can't control when our customers ramp, the pipeline in auto has been expanding, based on our current belief, we would expect to see that ramp later in the year. Again, as always, right, we'll monitor as things go through, that's our belief at the moment.

[Chris Caso, Managing Director at Wolfe Research]

Thanks.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Well, the bottom line is we winning socket and we're expanding our market shares.

[Operator]

Thank you. Our next question comes from Kelsey Chia with Citi. Your line is open.

[Kelsey Chia, Analyst at Citigroup]

Hi. Hi, Mike and Tony. Congrats on the results. Could you talk about the rationale behind focusing on silicon carbide for 800 volts step-down while focused on gallium nitride just for the lower voltage, lower power segments? It seems that some of your peers are also using GaN for higher voltage step-down. How would that influence your competitive positioning?

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Well, it's a long, Olivia, it's a long question. It's a long answer. Starting, I said I didn't believe in GaN? I still don't believe that, okay, for high power. Okay, I mean, we still have to be approved that in the market segment. The reason we use the silicon carbide is these devices are proven in the history, like 20 years ago, okay? I mean, they're making diodes, okay, I mean, the material is a lot more reliable, okay. There's some fundamental issues, we started this try to improve, it started 2016.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

As a result, you know, we have a deep know-how to make, to use these silicon carbide, okay? The MPS is unlike other company, we're selling, we don't sell silicon carbide FETs. These are passive semiconductive device. We always integrate it into our modules. That's a kind of short story for you. Okay.

[Kelsey Chia, Analyst at Citigroup]

Thank you. Got it. I know that the team historically has been able to gain share in tight supply environments. Could you talk more about your supply chain management strategy and also your confidence in meeting customer demand if other suppliers face capacity constraints?

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Throughout the history, if you look at it, especially time, especially during 2021, and these are after COVID. MPS always listen to our customers. We don't play a passive role. When the customers tell you to pull in too late. We have actively, preemptively, to build these inventory, get these inventory ready. Our product life cycle is very long. We don't have any materials and like a large amount and scrapping. We know these one sooner or later will sell. Again, like, you ask me where these product ramping, I don't know. Plus minus a years, it will sell.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

We don't mind and have a little high inventory, although in the last recent quarters, we cannot have enough to build up.

[Tony Balow, VP of Finance at Monolithic Power Systems]

Yeah, I just think the last thing I'd add, just so it's really clear, is nothing about our outlook or anything we said about enterprise data flow is because we see any constraints in the supply chain. It's something we've continuously stayed ahead at. If the root of your question, Kelsey, was whether or not the 85% flow was limited by something, that's not an issue right now.

[Kelsey Chia, Analyst at Citigroup]

Got it. Thank you.

[Michael Hsing, CEO and Founder at Monolithic Power Systems]

Yep. Mm-hmm.

[Operator]

Thank you. I'm showing no further questions at this time. I would now like to turn it back to Tony Balow for closing remarks.

[Tony Balow, VP of Finance at Monolithic Power Systems]

Thank you, operator, thank you all for joining us on this conference call today. I look forward to speaking with you on our next call for our second quarter of 2026 results. Thanks, and have a great day.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

• Arthur Lee, Finance Manager
• Michael Hsing, CEO and Founder
• Tony Balow, VP of Finance

Analysts

• Chris Caso, Managing Director at Wolfe Research
• Gary Mobley, Analyst at Loop Capital
• Joe Quattrocchi, Analyst at Wells Fargo
• Joshua Buchalter, Analyst at TD Cowen
• Kelsey Chia, Analyst at Citigroup
• Quinn Bolton, Analyst at Needham
• Rick Schafer, Analyst at Oppenheimer
• Ross Seymore, Analyst at Deutsche Bank
• Tore Svanberg, Managing Director at Stifel
• William Stein, Analyst at Truist Securities