Monolithic Power Systems delivered a robust Q2 performance, with results exceeding Wall Street’s expectations and prompting a significant positive market reaction. Management cited broad-based end market growth as a key driver, with enterprise data and communications segments leading the way. CEO Michael Hsing highlighted that, “All end markets grew sequentially with enterprise data growing 45% as we continue to see strong broad based ordering patterns.” The company’s ongoing diversification across market segments also contributed to improved operating margins and inventory efficiency.
Is now the time to buy MPWR? Find out in our full research report (it’s free for active Edge members).
Monolithic Power Systems (MPWR) Q2 CY2026 Highlights:
- Revenue: $980.6 million vs analyst estimates of $903.3 million (47.6% year-on-year growth, 8.6% beat)
- Adjusted EPS: $6.50 vs analyst estimates of $5.88 (10.5% beat)
- Adjusted Operating Income: $367.7 million vs analyst estimates of $332.2 million (37.5% margin, 10.7% beat)
- Revenue Guidance for Q3 CY2026 is $1.15 billion at the midpoint, above analyst estimates of $986.8 million
- Operating Margin: 31%, up from 24.8% in the same quarter last year
- Inventory Days Outstanding: 140, down from 157 in the previous quarter
- Market Capitalization: $66.12 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Monolithic Power Systems’s Q2 Earnings Call
- Rick Schafer (Oppenheimer) asked about the drivers of growth in the communications segment and the mix of optical modules versus switches. CEO Michael Hsing and SVP Tony Balow explained both areas are contributing, with optical still dominant but switch-related solutions gaining share.
- Joshua Buchalter (TD Cowen) questioned the sustainability of enterprise data growth and the risk of inventory build-up. Balow responded that channel inventories remain low and customer demand is broad-based, supporting management’s raised outlook for the segment.
- Tore Svanberg (Stifel) inquired about the timing and technology base for 800-volt data center product revenues. Hsing clarified that current sampling uses Monolithic Power Systems’ silicon carbide devices and that revenue will depend on broader data center adoption.
- William Stein (Truist Securities) asked whether pricing contributed to sequential growth. Hsing stated that price increases were limited and only used to offset input cost inflation or accommodate expedited supply requests.
- Quinn Bolton (Needham & Company) sought clarity on competitive positioning within optical transceivers. Hsing emphasized the company’s advantage in power density and fully integrated module design, while Balow noted continued share gain opportunities.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will be closely monitoring (1) the pace of adoption and revenue contribution from new data center and communications products, (2) the ramp-up of automotive design wins into production revenue, and (3) the company’s ability to maintain supply chain resilience and inventory discipline. Additional drivers include progress in emerging markets like robotics and building automation, as well as management’s execution on product diversification and capacity expansion.
Monolithic Power Systems currently trades at $1,339, up from $1,316 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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