Monolithic Power Systems reported first‑quarter 2026 revenue of $804.2 million, a 7.1 % sequential increase from $751.2 million in Q4 2025 and a 26.1 % year‑over‑year rise from $637.6 million in Q1 2025. Non‑GAAP diluted earnings per share were $5.10, beating the consensus estimate of $4.90 by $0.20, or 4 %. The beat reflects a mix of higher revenue in high‑margin segments and disciplined cost management that kept operating expenses in line with revenue growth.
The communications segment drove the strongest growth, with revenue up 33.1 % sequentially, driven by demand for power solutions in optical modules and switches. Enterprise data revenue increased 12.6 % sequentially, supported by power‑management solutions for AI and server applications. Automotive demand remained robust, contributing to overall revenue growth. The combination of these segments lifted the company’s gross margin to 55.5 %, the fourth consecutive quarter at that level, although it sits near the lower end of the company’s historical range and could face compression later in the year.
Operating cash flow fell 59 % to $104.9 million, a decline that reflects higher working‑capital requirements, including an increase in inventory days outstanding. Management cautioned that the notebook computing market remains a headwind, and the company is monitoring inventory levels closely. Despite the cash flow dip, the company’s capital allocation remains focused on expanding manufacturing capacity, with a new target of $6 billion versus the previous $4 billion plan.
For the second quarter, management guided revenue of $890 million to $910 million, well above the analyst consensus of $817.2 million. The raised guidance signals confidence in continued demand across the communications and enterprise data segments, and reflects the company’s expectation of sustained growth in AI, data‑center, and automotive markets. The guidance also indicates that the company anticipates maintaining its gross margin trajectory while managing inventory and working‑capital pressures.
CEO Michael Hsing said, “Our results demonstrate the strength of our diversified model and our continued success in transforming from a chip‑only, semiconductor supplier to a full‑service, silicon‑based solutions provider.” He added, “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).” Hsing also noted that robust adoption in enterprise data, particularly servers and AI‑related projects, contributed significantly to the quarter, while cautioning about the notebook computing market and increased inventory days outstanding.
The results reinforce Monolithic Power Systems’ position as a key supplier in high‑growth technology sectors. Strong demand from AI, data‑center, and automotive electrification continues to drive revenue, while the raised Q2 guidance and expanded capacity plan suggest the company is positioning itself to capture future market share. However, the company must navigate inventory buildup and potential margin compression in the second half, which could temper the upside if demand slows or cost pressures intensify.
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