Executive Summary

Q1 2025 revenue was $637.6M (+2.6% q/q; +39.2% y/y) and non-GAAP diluted EPS was $4.04; both were modest beats vs S&P Global consensus ($633.4M revenue; $4.00 EPS). Strength came from Storage & Computing (+38% q/q), while Enterprise Data declined sequentially with ramps expected in 2H25 . Estimates data marked with asterisks below are from S&P Global.
Q2 2025 guidance: revenue $640–$660M, GAAP GM 54.9–55.5% (non-GAAP 55.2–55.8%) and GAAP opex $189–$195M; gross margin midpoint down ~20 bps on mix conservatism, not tariffs or pricing .
Cash generation was strong (OCF $256.4M), cash and short-term investments rose to $1.03B; inventories increased (146 days on current-quarter revenue), positioning MPS to support ramps .
Management emphasized broad-based design-win momentum (AI/data center, notebooks/memory, auto) and reiterated the shift from chip supplier to silicon-based solutions provider; 400V rack-power modules are sampling now with material revenue expected in 2026 .

What Went Well and What Went Wrong

What Went Well
- Record revenue $637.6M; Storage & Computing up 38.1% q/q on strong memory and notebook demand; Automotive up 12.9% q/q (third straight quarter of double-digit sequential growth) .
- Non-GAAP gross margin held 55.7% (flat y/y), and non-GAAP operating margin 34.7% (up 1.6 pts y/y); broad-based execution across markets .
- “Our proven, long-term growth strategy remains intact as we continue our transformation from being a chip-only, semiconductor supplier to a full service, silicon-based solutions provider,” said CEO Michael Hsing .
What Went Wrong
- Enterprise Data fell 31.8% q/q and 11.2% y/y; ramps are expected in 2H but timing remains outside MPS’s control .
- Q2 gross margin guided down ~20 bps at midpoint due to product mix; management explicitly said no direct tariff or demand impact is assumed in the Q2 guide .
- Inventory days rose to 146 (current-quarter basis) and 143 on next-quarter basis, up sequentially; non-GAAP operating expenses increased q/q and are guided higher in Q2 .

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($M)	$457.9	$621.7	$637.6
GAAP Gross Margin %	55.1%	55.4%	55.4%
Non-GAAP Gross Margin %	55.7%	55.8%	55.7%
GAAP Operating Expenses ($M)	$157.0	$181.1	$184.5
Non-GAAP Operating Expenses ($M)	$103.4	$126.1	$133.5
GAAP Operating Margin %	20.9%	26.3%	26.5%
Non-GAAP Operating Margin %	33.1%	35.5%	34.7%
GAAP Diluted EPS ($)	$1.89	$29.88 (tax benefit)	$2.79
Non-GAAP Diluted EPS ($)	$2.81	$4.09	$4.04
Cash + ST Investments ($B)	$1.29	$0.86	$1.03

Segment revenue (end markets)

End Market ($M)	Q1 2024	Q1 2025	YoY %
Storage & Computing	$106.1	$188.5	+77.7%
Automotive	$87.1	$144.9	+66.4%
Enterprise Data	$149.7	$132.9	-11.2%
Communications	$46.7	$71.7	+53.7%
Consumer	$38.1	$56.9	+49.3%
Industrial	$30.2	$42.6	+41.1%
Total	$457.9	$637.6	+39.2%

Key operating/BS KPIs

KPI	Q1 2024	Q4 2024	Q1 2025
Operating Cash Flow ($M)	$248.0	$167.7	$256.4
DSO (days)	39	25	31
Internal Inventories ($M)	$396.0	$419.6	$454.8
Days of Inventory (current qtr rev basis)	175	138	146
Cash + ST Investments ($M)	$1,286.4	$862.9	$1,026.7

Non-GAAP adjustments (Q1 2025)

Stock-based comp and related: $53.8M; amortization: $0.3M; deferred comp plan (income): $0.006M; tax effect: $5.9M .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q1 2025	$610–$630M (2/6/25)	$630–$640M (3/20/25)	Raised
GAAP Gross Margin	Q1 2025	55.1–55.7%	—	—
Non-GAAP Gross Margin	Q1 2025	55.4–56.0%	—	—
GAAP OpEx	Q1 2025	$180.2–$186.2M	$184.9–$190.9M	Raised
Non-GAAP OpEx	Q1 2025	$126.9–$130.9M	$131.6–$135.6M	Raised
OI&E (pre-FX)	Q1 2025	$5.8–$6.2M	—	—
Non-GAAP Tax Rate	FY 2025	15%	15%	Maintained
Diluted Shares	Q1 2025	47.8–48.2M	—	—
Revenue	Q2 2025	—	$640–$660M	New
GAAP Gross Margin	Q2 2025	—	54.9–55.5%	New
Non-GAAP Gross Margin	Q2 2025	—	55.2–55.8%	New
GAAP OpEx	Q2 2025	—	$189–$195M	New
Non-GAAP OpEx	Q2 2025	—	$132.6–$136.6M	New
OI&E (pre-FX)	Q2 2025	—	$6.2–$6.6M	New
Non-GAAP Tax Rate	FY 2025	—	15%	New
Diluted Shares	Q2 2025	—	47.9–48.3M	New
Dividend	Q1 2025	$1.25 prior	Increased to $1.56/sh; paid Apr 15, 2025 (record Mar 31, 2025)	Raised

Note: The Q2 2025 GM midpoint is ~20 bps lower q/q due to mix conservatism (not tariffs/pricing) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q3 2024; Q-1: Q4 2024)	Current Period (Q1 2025)	Trend
AI / Enterprise Data	Strong y/y growth in Q3; Enterprise Data $184.5M Q3; Q4 Enterprise Data $194.9M (largest end market)	Enterprise Data $132.9M; design wins/qualifications across major customers; ramps expected 2H25	Near-term softness; growing 2H visibility
Storage & Computing	$144.0M in Q3; $136.5M in Q4	$188.5M (+38% q/q) on memory and notebook strength	Accelerating on multiple drivers (DDR5, notebooks, AI PC)
Automotive	$111.3M Q3; $128.3M Q4	$144.9M (+12.9% q/q); content ramps, 48V and 800V transitions to benefit 2026–27	Consistent sequential growth; content story
Gross Margin	GAAP GM 55.4% in Q3; 55.4% in Q4; non-GAAP GM ~55.8%	GAAP GM 55.4%; non-GAAP 55.7%; Q2 guide slight down on mix	Stable at mid-55s; conservative Q2 mix
Supply chain / Tariffs	Diversification ongoing; no specific tariff effects cited in PRs	Long-running geographic diversification; “No” to direct tariff demand/cost in Q2 guide	Resilient; limited tariff impact
Inventory & Lead Times	Inventory normalized through 2024	Internal inventory up; model target 180–200 days; channel lean; lead times stable	Building buffers ahead of ramps

Management Commentary

CEO strategic framing: “Our proven, long-term growth strategy remains intact as we continue our transformation from being a chip-only, semiconductor supplier to a full service, silicon-based solutions provider.” — Michael Hsing .
Data center ramps: “We continue to win designs across all major enterprise data customers with revenue ramps expected in the second half of this year.” — Bernie Blegen .
Gross margin outlook: “There’s not a specific event…we’re just being basically 20 basis points more conservative [on Q2 GM].” — Bernie Blegen .
Tariffs: “No to both” (no direct unit cost/price or demand impact influencing Q2 guidance). — Bernie Blegen .
Rack-power modules: Samples now; material revenue expected in 2026. — Michael Hsing .

Q&A Highlights

Enterprise Data visibility: Management sees broader qualifications/design wins across multiple customers, but ramp timing is outside their control; confidence improved versus 90 days ago with 2H weighting .
Gross margin guide: Slightly lower Q2 midpoint due to mix; management intends to operate within its model; no tariff-related headwind implied .
Storage & Computing strength: +38% q/q driven by DDR5, SSD/HDD, and notebooks/desktop CPUs; not solely seasonality; multiple drivers including AI PC and Windows 10 transition .
Automotive content: Early shipments into 48V/800V; expect more in 2026–27; 2H25 momentum driven by past design wins in NA/EU .
Supply chain/inventory: Targeting 180–200 days internal inventory; channel lean; lead times holding; flexibility to support ramps .

Estimates Context

Actuals vs S&P Global consensus

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($M) – Actual	$457.9	$621.7	$637.6
Revenue ($M) – Consensus	$445.0*	$608.1*	$633.4*
EPS (non-GAAP) – Actual	$2.81	$4.09	$4.04
EPS (non-GAAP) – Consensus	$2.64*	$3.98*	$4.00*
# of EPS Estimates	14*	14*	15*
# of Revenue Estimates	14*	15*	15*

Q1 2025 modest beat: revenue +$4.1M vs consensus; EPS +$0.04 vs consensus. Prior quarters also beat on both revenue and EPS, establishing positive estimate surprise momentum into 2025. Values marked with an asterisk were retrieved from S&P Global.

Key Takeaways for Investors

Broad-based growth with record revenue and stable mid-55% gross margins; Storage & Computing is the near-term engine while Enterprise Data is a 2H25 story .
Q2 guide is balanced (revenue $640–$660M) with conservative GM mix; no tariff shock contemplated, reducing macro headline risk near term .
Strong cash generation and rising liquidity ($1.03B cash+ST investments) support continued R&D and capacity readiness ahead of ramps; inventory build appears intentional to meet short lead-time customers .
Automotive remains a content-driven growth vector; 48V/800V transitions skew to 2026–2027, underpinning medium-term visibility .
AI data center opportunity broadens beyond a single hyperscaler; management sees significant content opportunities and is advancing modules (400V rack power) with material revenue in 2026 .
Watch for 2H Enterprise Data ramps and updates on module commercialization; these are likely the next stock catalysts alongside sustained Storage & Computing strength .
Expense discipline matters: non-GAAP opex is trending up into Q2; maintaining operating leverage will be key if Enterprise Data ramps slip .

Appendix: Additional Details and Reconciliations

Q1 2025 non-GAAP metrics exclude $53.8M SBC and related, $0.3M amortization, and $5.9M tax effects; non-GAAP GM 55.7% and non-GAAP operating income $221.5M .
Segment sequential changes (Q1 2025 vs Q4 2024): Storage & Computing +38.1%, Automotive +12.9%, Communications +12.3%, Industrial +4.3%, Consumer -0.6%, Enterprise Data -31.8% .
Q2 2025 guidance details include OI&E $6.2–$6.6M (pre-FX), non-GAAP tax rate 15%, FDSO 47.9–48.3M .

Notes on sources: Company press release (8-K Exhibit 99.1), CFO commentary (8-K Exhibit 99.2), and Q1 2025 earnings call transcript were used for facts and quotes. All consensus estimate figures marked with an asterisk were retrieved from S&P Global.

MONOLITHIC POWER SYSTEMS INC (MPWR)·Q1 2025 Earnings Summary