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Monolithic Power (MPWR) Q2 Earnings Beat on Solid AI Traction
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Monolithic Power Systems, Inc. (MPWR - Free Report) , the leading provider of power management solutions, reported better-than-expected second-quarter results. Non-GAAP earnings of $3.17 per share surpassed the Zacks Consensus Estimate by 10 cents. The company recorded non-GAAP earnings of $2.82 in the year-ago quarter.
Revenues surged 15% year over year to $507.4 million, surpassing the Zacks Consensus Estimate by $22 million. Solid demand for AI power solutions, growing orders in multiple end markets and revenues realized from design wins in past years primarily drove the outperformance.
Monolithic Power Systems, Inc. Price, Consensus and EPS Surprise
Net sales from the Enterprise Data segment surged 290% year over year to $187.2 million. Sales growth of power management solutions for AI applications boosted the top line in this segment. Net sales beat Zacks Consensus Estimate of $169.20 million. The company is steadily expanding its power management portfolio by integrating leading-edge technologies such as liquid cooling features and vertical power systems. This is enhancing its commercial prospects and enabling it to capitalize on the growing demand for high-power AI computation in data centers.
The Storage and Computing segment contributed $114.9 million in revenues, down 7.7% year over year, owing to lower sales of storage and graphic card applications. However, revenues surpassed the Zacks Consensus Estimate of $109.45 million.
The Automotive segment generated $87.2 million in revenues, down 16.5% year over year. The figure fell short of Zacks Consensus Estimate of $92.54 million. Soft demand for applications supporting body electronics, digital cockpits and infotainment affected the top line in this segment.
Revenues from the Communications segment were $43.6 million, down 11.6% year over year, owing to lower network sales. The net sales missed Zacks Consensus Estimate of $47.36 million.
Net sales in the Consumer segment stood at $42.2 million, down 35.3% year over year, owing to lower sales of gaming products and home appliances. However, Segment’s net sales beat the Zacks Consensus Estimate of $38.56 million.
The Industrial segment’s revenues declined 35% year over year to $32.3 million, owing to lower sales of products related to industrial meters, power sources and security applications. The figure surpassed the Zacks Consensus Estimate of $31.06 million.
Financial Position
In the June quarter, non-GAAP operating expenses were $111.7 million, up from $96 million reported in the year-ago quarter. Research and development costs increased to $77.9 million from $63.7 million in the year-ago quarter.
The company reported an operating cash flow of $141 million, up from $90.2 million in the prior year quarter. As of Jun 30, 2024, MPWR had $550.5 million in cash and cash equivalents, with $96.7 million in other long-term liabilities.
In the second quarter, this Zacks Rank #3 (Hold) company bought back 6,300 shares worth $4.5 million from its total $640 million repurchase authorization, which is valid till October 2026.
Guidance
For the third quarter of 2024, the company projected revenues in the range of $590-$610 million. Non-GAAP gross margin is projected to be between 55.5% and 56.1%. Non-GAAP operating expenses are estimated to be between $118.3 million and $120.3 million. Total stock-based compensation expenses are expected in the range of $51.7 million-$53.7 million.
Management expects that the Storage and Computing segment will drive revenue growth in the forthcoming quarters, backed by growing sales of products for storage solutions. Healthy traction in the wireless and 5G market will likely improve revenues from the Communications segment. Increasing demand for AI native power management solutions will likely drive sales in the Enterprise Data vertical. Near term outlook for the Automotive segment remains uncertain, owing to fluctuating market trends, specifically in the EV vertical.
The company is putting a strong emphasis on expanding and diversifying its global supply chain to bolster supply stability and capitalize on future growth prospects.
It is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.
Motorola Solutions Inc. (MSI - Free Report) provides services and solutions to government segments and public safety programs, along with large enterprises and wireless infrastructure services. Motorola carries a Zacks Rank #2 (Buy) at present.
It delivered a trailing four-quarter average earnings surprise of 8.06% and has a long-term growth expectation of 9.63%. In the last reported quarter, Motorola delivered an earnings surprise of 7.64%.
CommScope Holding Company, Inc. (COMM - Free Report) , sporting a Zacks Rank #1 at present, delivered an earnings surprise of 65.22% in the last reported quarter.
It is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. The company has created a niche market for itself, helping customers scale network capacity, delivering better network response time and performance, and simplifying technology migration.
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Monolithic Power (MPWR) Q2 Earnings Beat on Solid AI Traction
Monolithic Power Systems, Inc. (MPWR - Free Report) , the leading provider of power management solutions, reported better-than-expected second-quarter results. Non-GAAP earnings of $3.17 per share surpassed the Zacks Consensus Estimate by 10 cents. The company recorded non-GAAP earnings of $2.82 in the year-ago quarter.
Revenues surged 15% year over year to $507.4 million, surpassing the Zacks Consensus Estimate by $22 million. Solid demand for AI power solutions, growing orders in multiple end markets and revenues realized from design wins in past years primarily drove the outperformance.
Monolithic Power Systems, Inc. Price, Consensus and EPS Surprise
Monolithic Power Systems, Inc. price-consensus-eps-surprise-chart | Monolithic Power Systems, Inc. Quote
Segment Performance
Net sales from the Enterprise Data segment surged 290% year over year to $187.2 million. Sales growth of power management solutions for AI applications boosted the top line in this segment. Net sales beat Zacks Consensus Estimate of $169.20 million. The company is steadily expanding its power management portfolio by integrating leading-edge technologies such as liquid cooling features and vertical power systems. This is enhancing its commercial prospects and enabling it to capitalize on the growing demand for high-power AI computation in data centers.
The Storage and Computing segment contributed $114.9 million in revenues, down 7.7% year over year, owing to lower sales of storage and graphic card applications. However, revenues surpassed the Zacks Consensus Estimate of $109.45 million.
The Automotive segment generated $87.2 million in revenues, down 16.5% year over year. The figure fell short of Zacks Consensus Estimate of $92.54 million. Soft demand for applications supporting body electronics, digital cockpits and infotainment affected the top line in this segment.
Revenues from the Communications segment were $43.6 million, down 11.6% year over year, owing to lower network sales. The net sales missed Zacks Consensus Estimate of $47.36 million.
Net sales in the Consumer segment stood at $42.2 million, down 35.3% year over year, owing to lower sales of gaming products and home appliances. However, Segment’s net sales beat the Zacks Consensus Estimate of $38.56 million.
The Industrial segment’s revenues declined 35% year over year to $32.3 million, owing to lower sales of products related to industrial meters, power sources and security applications. The figure surpassed the Zacks Consensus Estimate of $31.06 million.
Financial Position
In the June quarter, non-GAAP operating expenses were $111.7 million, up from $96 million reported in the year-ago quarter. Research and development costs increased to $77.9 million from $63.7 million in the year-ago quarter.
The company reported an operating cash flow of $141 million, up from $90.2 million in the prior year quarter. As of Jun 30, 2024, MPWR had $550.5 million in cash and cash equivalents, with $96.7 million in other long-term liabilities.
In the second quarter, this Zacks Rank #3 (Hold) company bought back 6,300 shares worth $4.5 million from its total $640 million repurchase authorization, which is valid till October 2026.
Guidance
For the third quarter of 2024, the company projected revenues in the range of $590-$610 million. Non-GAAP gross margin is projected to be between 55.5% and 56.1%. Non-GAAP operating expenses are estimated to be between $118.3 million and $120.3 million. Total stock-based compensation expenses are expected in the range of $51.7 million-$53.7 million.
Management expects that the Storage and Computing segment will drive revenue growth in the forthcoming quarters, backed by growing sales of products for storage solutions. Healthy traction in the wireless and 5G market will likely improve revenues from the Communications segment. Increasing demand for AI native power management solutions will likely drive sales in the Enterprise Data vertical. Near term outlook for the Automotive segment remains uncertain, owing to fluctuating market trends, specifically in the EV vertical.
The company is putting a strong emphasis on expanding and diversifying its global supply chain to bolster supply stability and capitalize on future growth prospects.
Stocks to Consider
Arista Networks, Inc. (ANET - Free Report) sports a Zacks Rank #1 (Strong Buy) at present. In the last reported quarter, it delivered an earnings surprise of 8.25%. You can see the complete list of today’s Zacks #1 Rank stocks here.
It is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.
Motorola Solutions Inc. (MSI - Free Report) provides services and solutions to government segments and public safety programs, along with large enterprises and wireless infrastructure services. Motorola carries a Zacks Rank #2 (Buy) at present.
It delivered a trailing four-quarter average earnings surprise of 8.06% and has a long-term growth expectation of 9.63%. In the last reported quarter, Motorola delivered an earnings surprise of 7.64%.
CommScope Holding Company, Inc. (COMM - Free Report) , sporting a Zacks Rank #1 at present, delivered an earnings surprise of 65.22% in the last reported quarter.
It is a premier provider of infrastructure solutions, including wireless and fiber optic solutions, for the core, access and edge layers of communication networks. The company has created a niche market for itself, helping customers scale network capacity, delivering better network response time and performance, and simplifying technology migration.