Monolithic Power Systems Reports 30.6% Revenue Growth in Q3 2024, Driven by Strong Enterprise Data Market Performance

Monolithic Power Systems, Inc. (MPS) reported significant financial growth for the third quarter and the first nine months of 2024, with total revenue reaching $620.1 million for the three months ended September 30, 2024, a 30.6% increase from $474.9 million in the same period of 2023. For the nine months, revenue rose to $1,585.4 million, up 16.0% from $1,367.1 million year-over-year. The growth was primarily driven by strong performance in the enterprise data market, which saw an 86.4% increase in revenue, and a notable rise in sales from communications and automotive sectors.

Gross profit for Q3 2024 was $343.4 million, maintaining a gross margin of 55.4%, slightly down from 55.5% in Q3 2023. Operating income for the quarter was $164.0 million, representing 26.5% of revenue, compared to 28.6% in the prior year. Net income for Q3 2024 was $144.4 million, or 23.3% of revenue, up from $121.2 million (25.5% of revenue) in Q3 2023. For the nine-month period, net income was $337.3 million, a marginal increase from $330.5 million in 2023.

MPS's total current assets increased to $2.16 billion as of September 30, 2024, from $1.82 billion at the end of 2023, with cash and cash equivalents rising to $700.3 million from $527.8 million. The company also reported total assets of $2.85 billion, up from $2.43 billion at the end of 2023. Stockholders' equity increased to $2.35 billion, reflecting a strong financial position.

In terms of strategic developments, MPS completed the acquisition of Axign B.V. for $33.4 million in January 2024, aimed at enhancing its capabilities in low power consumption solutions for consumer and automotive markets. The company also initiated a stock repurchase program in October 2023, authorizing up to $640 million, with $5.5 million spent on repurchases during Q3 2024.

Operating expenses saw an increase, with SG&A expenses rising to $94.4 million in Q3 2024, up from $63.2 million in Q3 2023, driven by higher stock-based compensation and other costs. Research and development expenses also increased, reflecting MPS's commitment to innovation.

Despite these advancements, MPS reported a material weakness in its internal controls related to inventory demand forecasting, which management is actively working to remediate. The company continues to monitor macroeconomic conditions affecting the semiconductor industry, including consumer spending and regulatory compliance.