Monolithic Power Systems (MPWR) Dips 3% After Earnings After Massive Run

Monolithic Power Systems (NASDAQ: MPWR) delivered a fifth consecutive earnings beat after the close Thursday, posting $4.73 in adjusted EPS against a $4.63 estimate and $737.18M in revenue versus $720.92M expected.

The stock slipped 3% in after-hours trading, a modest pullback after surging through October and hitting a 52-week high just before the report. Investors had already priced in strong execution. The real question now is whether the company can sustain this momentum into 2026.

Enterprise Data revenue hit $191.48M, the largest segment contributor, while Storage and Computing came in at $186.57M. Automotive delivered $151.54M. The company’s overall revenue grew 18.9% year over year and 10.9% quarter over quarter, reflecting broad-based demand across data center, edge computing, and electrification markets.

Net income climbed 23.4% year over year to $178.27M. Operating income rose 19.0% to $195.18M. GAAP gross margin expanded to 55.1%, a level that underscores the company’s pricing power and operational efficiency in a competitive semiconductor landscape.

Management guided Q4 revenue to a range of $730M to $750M, implying growth of 1.8% to 5.0% sequentially. That’s a meaningful deceleration from Q3’s 10.9% quarter-over-quarter pace. Gross margin guidance sits at 54.9% to 55.5% on a GAAP basis, essentially flat with current levels. Operating expenses are expected to land between $206.8M and $212.8M.

The sequential slowdown reflects typical seasonal patterns but also signals that management isn’t expecting a sharp acceleration in demand as the year closes. This tempers some of the optimism baked into the stock’s recent rally.

• Adjusted EPS: $4.73 vs. $4.63 expected; up 16.6% year over year

• Revenue: $737.18M vs. $720.92M expected; up 18.9% year over year

• GAAP Gross Margin: 55.1%; consistent with recent quarters

• Net Income: $178.27M; up 23.4% year over year

• Operating Income: $195.18M; up 19.0% year over year

The earnings growth rate outpaced revenue growth, a sign that operational leverage is working in the company’s favor as it scales.

CEO Michael Hsing said the company is “transforming from a chip-only, semiconductor supplier to a full service, silicon-based solutions provider.” That shift matters. It suggests MPWR is moving beyond commodity chip sales into higher-margin integrated systems, a narrative that aligns with the company’s gross margin resilience and its positioning in data center power management and automotive power delivery.

The tone was cautiously optimistic. Management acknowledged strong execution but stopped short of signaling aggressive expansion or demand acceleration ahead. That restraint is worth noting given the stock’s sharp pre-earnings climb.

The earnings call will offer insight into how management frames demand trends heading into 2026 and whether the data center cycle continues to support growth. Watch for commentary on automotive electrification timing and whether enterprise customers are pulling forward orders or moderating spending as the year winds down.

With five consecutive beats and consistent margin performance, MPWR has proven its operational discipline. The question for the next quarter is whether that consistency can hold as growth rates normalize seasonally and the broader semiconductor cycle evolves.