Executive Summary

Record Q2 revenue of $664.6M (+31% YoY, +4.2% QoQ) with non-GAAP EPS of $4.21; both exceeded S&P Global consensus: revenue by ~2.4% and EPS by ~$0.09, driven by broad-based strength across end-markets and the initial ramp of AI ASIC power solutions . Estimates from S&P Global; see table footnote.
Mix and incremental OpEx kept gross margin roughly flat (GAAP 55.1%, non-GAAP 55.5%), while non-GAAP operating margin expanded YoY to 34.8% on scale benefits .
Q3 guide implies ~8% QoQ growth at the midpoint (revenue $710–$730M), with non-GAAP GM 55.2–55.8% and non-GAAP OpEx $143–$147M; management expects Enterprise Data up 20–30% QoQ in Q3 and further up in Q4 amid AI/customer ramps .
Stock-reaction catalysts: continued upside from AI ASIC and server ramps, sustained PC/memory share gains, and validation of guidance cadence (Q3 up, Q4 “flattish-to-up” commentary) against short lead-time ordering patterns .

What Went Well and What Went Wrong

What Went Well
- Broad-based growth: 5 of 6 end-markets rose YoY; Storage & Computing up 70% YoY on memory and notebook wins; Automotive +66% YoY; Communications +69% YoY; Consumer +42% YoY; Industrial +45% YoY .
- AI momentum: “We began initial shipments of our power solutions to support our customers’ new ASIC-based AI products,” underscoring diversification beyond the lead GPU customer . CFO added Enterprise Data is “very positive” near- and longer-term amid blurred CPU/AI lines .
- Operating leverage on non-GAAP basis: Operating income up to $231.2M (+35% YoY), non-GAAP EPS to $4.21 (+33% YoY) with tax rate at 15% .
What Went Wrong
- Enterprise Data still down YoY (-23%) given last year’s tough comp, despite sequential improvement; concentration there is normalizing as more customers ramp .
- Ordering visibility remains short; management stays “cautiously optimistic” and not building backlog beyond ~two quarters, which tempers near-term conviction, particularly for Q4 pacing .
- GAAP OpEx rose 23% YoY (stock comp and growth investments), pressuring GAAP operating margin QoQ (24.8% vs 26.5% Q1) even as non-GAAP margin improved YoY .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($M)	$507.4	$637.6	$664.6
GAAP Gross Margin %	55.3%	55.4%	55.1%
Non-GAAP Gross Margin %	55.7%	55.7%	55.5%
GAAP Operating Margin %	23.0%	26.5%	24.8%
Non-GAAP Operating Margin %	33.7%	34.7%	34.8%
GAAP Diluted EPS ($)	$2.05	$2.79	$2.78
Non-GAAP Diluted EPS ($)	$3.17	$4.04	$4.21

Estimates comparison (S&P Global; asterisk indicates values retrieved from S&P Global)

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue Consensus Mean ($M)*	$608.1	$633.4	$649.3
Revenue Actual ($M)	$621.7	$637.6	$664.6
Beat/(Miss) vs Est	+2.2%	+0.7%	+2.4%
Primary EPS Consensus Mean ($)*	$3.98	$4.00	$4.12
Primary EPS Actual ($)	$4.09	$4.04	$4.21
Beat/(Miss) vs Est ($)	+$0.11	+$0.04	+$0.09

Segment revenue (YoY and mix)

End Market	Q2 2024 ($M)	Q2 2025 ($M)	YoY %	Mix Q2’25
Storage & Computing	$114.9	$195.3	+70.0%	29.4%
Automotive	$87.2	$145.1	+66.4%	21.8%
Enterprise Data	$187.2	$144.0	-23.1%	21.7%
Communications	$43.6	$73.8	+69.3%	11.1%
Consumer	$42.2	$59.7	+41.5%	9.0%
Industrial	$32.3	$46.7	+44.6%	7.0%
Total	$507.4	$664.6	+31.0%	100%

Key KPIs and Balance Sheet

KPI	Q2 2024	Q1 2025	Q2 2025
Cash & Short-term Investments ($M)	$1,307.2	$1,026.7	$1,146.1
Operating Cash Flow ($M)	$141.0	$256.4	$237.6
Accounts Receivable ($M)	$157.9	$214.9	$194.8
Days Sales Outstanding (days)	28	31	27
Internal Inventories ($M)	$426.8	$454.8	$490.6
Days of Inventory (current qtr rev)	171	146	150
Days of Inventory (next qtr rev)	140	139	139

Non-GAAP adjustments (Q2’25): add-backs included stock-based comp ($60.3M), amortization of intangibles ($0.3M), net deferred comp expense ($0.3M), and related tax effects ($7.6M) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q3 2025	N/A	$710–$730	New
GAAP Gross Margin %	Q3 2025	N/A	54.9–55.5	New
Non-GAAP Gross Margin %	Q3 2025	N/A	55.2–55.8	New
GAAP OpEx ($M)	Q3 2025	N/A	$201.3–$207.3	New
Non-GAAP OpEx ($M)	Q3 2025	N/A	$143.0–$147.0	New
Stock-based comp ($M)	Q3 2025	N/A	$60.1–$62.1 (incl. ~$1.8M in COGS)	New
Interest & other income ($M)	Q3 2025	N/A	$6.4–$6.8 (pre-FX)	New
Non-GAAP Tax Rate	FY 2025	15% (implied run-rate)	15% reaffirmed	Maintained
Fully diluted shares (M)	Q3 2025	N/A	47.9–48.3	New
Dividend ($/sh)	Q2 2025	$1.25 (prior quarterly rate FY24)	$1.56 declared (paid July 15, 2025)	Raised in 2025

Note: Q3 revenue midpoint (+~8.3% QoQ) aligns with call commentary: Enterprise Data up 20–30% QoQ; most other end-markets up HSD; Storage & Computing “cautious” after strong 1H .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
AI/ASIC power ramps	Broad engagements across hyperscalers; 2H’25 weighted; samples for 400–800V rack power; material revs likely 2026 .	Initial shipments to AI ASIC customers; Enterprise Data up 8% QoQ; Q3 Enterprise Data +20–30% QoQ; Q4 up sequentially .	Accelerating
Supply chain/geographic capacity	Goal to support $4B revenue and diversify capacity 50% outside China; inventory model 180–200 days .	Capacity can support ~$4B; on track for ~50% outside China by year-end; inventories “low,” channel lean .	Strengthening
Ordering/visibility & macro/tariffs	No direct tariff impact in Q2 guide; short lead times in some end-markets .	“Cautiously optimistic”; short lead times persist; no clear tariff-driven ordering shifts seen .	Mixed but stable
Storage & Computing	Atypical Q1 seasonal uplift; share/content gains in DDR5, notebooks .	+3.6% QoQ; +70% YoY; cautious H2 after strong 1H .	Moderating QoQ
Communications/optical	Optical modules a key growth driver vs legacy networking .	Up 2.8% QoQ; up 69% YoY; optical within data centers “growing nicely” .	Improving
Automotive	EV content ramps, 48V and 800V architectures; 2H’25 pick-up; multi-year growth .	Flat QoQ on tough comp; +66% YoY; 2H pick-up expected; longer-term 48V/zonal opportunities .	Positive LT
Product strategy (modules/solutions)	Move from “chip-only” to silicon-based solutions; showcase across end-markets .	Modules growing across Enterprise Data, Industrial, Consumer; aim to monetize systems know-how; motion to grow faster ahead .	Broadening

Management Commentary

“We began initial shipments of our power solutions to support our customers’ new ASIC based AI products.” — Q2 earnings commentary .
“When we look at Q3, we’ve got enterprise data growing between 20% and 30% sequentially… with the exception of storage and compute, all of our other lines of business are up high single digits.” — CFO .
“Our current capacity… is to be able to support $4 billion of revenue with diversification of 50% of that outside of China.” — CFO .
“We continue our transformation from being a chip-only, semiconductor supplier to a full service, silicon-based solutions provider.” — CEO .

Q&A Highlights

Enterprise Data cadence: Q3 +20–30% QoQ and Q4 up sequentially; still dynamic with short lead times; broader customer base reducing concentration risk .
Storage & Computing outlook: caution post-strong 1H given historical cyclicality in notebooks/memory despite continued share/content gains .
Capacity/supply chain: ~$4B rev capacity with ~50% ex-China by year-end; inventories/channel lean; book-to-bill not far above 1 given short-dated ordering .
Competitive positioning in AI power: engagements span multiple ASIC/GPU programs; mix of single/dual-sourced sockets; emphasis on innovation/time-to-market to secure sockets .
Long-term auto: 48V and zonal architecture content opportunities; 2H’25 pickup from prior wins; 2026 outlook constructive .

Estimates Context

Q2 2025 beats: Revenue $664.6M vs $649.3M consensus (+2.4%); Primary EPS $4.21 vs $4.12 (+$0.09). Q1 2025 and Q4 2024 also modest beats on both lines. Values retrieved from S&P Global; see table for details. Actuals reconciled to 8-K and press materials .
Implications: Upward revisions likely in Enterprise Data for Q3–Q4 given sequential growth commentary; OpEx trajectory and gross margin holding within bands should support stable FY25 non-GAAP EPS frameworks .

Key Takeaways for Investors

Broad-based upside with AI optionality: Continued PC/memory share gains plus accelerating AI ASIC/server ramps create multiple paths to sustain above-consensus growth into H2’25 and 2026 .
Quality of beats: Revenue/EPS outperformance came with disciplined non-GAAP OpEx and stable margins; non-GAAP operating margin expanded YoY to 34.8% despite investment needs .
Guidance credibility: Q3 revenue guide (+~8% QoQ midpoint) corroborated by segment color (Enterprise Data +20–30%); watch delivery against short lead-time demand .
De-risking supply chain: ~$4B capacity, ~50% ex-China by YE supports large AI/customer ramps and geopolitical resilience; lean channel suggests demand is “real” rather than pulled-in .
Mix watchpoints: Enterprise Data still below prior-year peak; Storage & Computing faces near-term caution after outsized 1H; but Communications optics and Auto content provide offsets .
Capital returns: Quarterly dividend set at $1.56/share in Q2; balance sheet strength (>$1.1B cash/STI) and robust OCF support ongoing returns and growth capex .
Stock setup: Catalysts include Q3 print vs guide, visibility into Q4 sequential growth, evidence of AI ASIC/customer ramps broadening, and sustained PC/memory share capture—each a potential re-rating driver given execution track record .

Additional Q2-period items: ECARX strategic partnership (auto/robotics AI collaboration) potentially enhances automotive pipeline and global supply-chain resilience .

MONOLITHIC POWER SYSTEMS INC (MPWR)·Q2 2025 Earnings Summary