MPS Q4 Revenue Surpasses $750M Amid AI-Driven Backlog Surge

Date of Call: Feb 5, 2026

Financials Results

• Revenue: Q4 2025: $751.2M, up 20.8% YOY and 1.9% sequentially; Full year 2025: $2.8B, up 26.4% YOY
• Gross Margin: Current range is low end of corporate target (55.5% to 55.8%), up from previous quarters with backlog expected to support improvement

Guidance:

• Enterprise Data growth for 2026 raised to a floor of 50% (from prior 30-40% range).
• Automotive growth drivers include 48V zonal and ADAS, but no specific rate given due to macro uncertainty.
• Optical modules and communications expected to grow in 2026 with data center interconnect ramp.
• Q4 2025 backlog extends into Q2 and Q3 2026, supporting more linear revenue trajectory.

Business Commentary:

Revenue and Growth:

• Monolithic Power Systems reported a record quarterly revenue of $751.2 million for Q4 2025, up 20.8% year-over-year.
• This growth was driven by consistent execution, continued innovation, and strong customer focus, particularly in the enterprise data and communications segments.

Enterprise Data and AI Demand:

• The company's non-Enterprise Data end markets grew by over 40% year-over-year, showcasing the strength of its diversified business model.
• The growth was attributed to a shift towards AI and data center applications, with significant contributions from new design wins and increased capacity to meet demand.

Automotive Segment Growth:

• Monolithic Power Systems' automotive segment grew by 43% year-over-year in 2025.
• This was driven by new solutions for 48-volt and zonal architectures, as well as strong design wins in automotive applications, positioning the company for continued growth in 2026.

Module and Capacity Expansion:

• The company achieved record module revenue and expanded its capacity to over $4 billion, securing geographically balanced capacity.
• This expansion is aimed at supporting future growth and meeting the increasing demand for modules and solutions across various segments, including data centers and automotive.

Gross Margin and Efficiency:

• Monolithic Power Systems' gross margin has been trending between 55.5% and 55.8%, which is the low end of their target range of 55% to 60%.
• The company is working on improving its gross margin through better backlog management and operational efficiencies as it transitions towards more integrated systems and modules.

Sentiment Analysis:

Overall Tone: Positive

• Confidence in growth from strong order patterns and backlog, with book-to-bill >1.40% growth in non-Enterprise Data markets. Management emphasizes 'prospects remain bright,' 'consistent execution,' and 'record quarterly revenue.'

Q&A:

• Question from Christopher Caso (Wolfe Research): Could you give color on what you're seeing with respect to the different segments for Q1?
  Response: Strong ordering trends with book-to-bill >1 and backlog extending into Q2/Q3 2026; Enterprise Data and Communications strength expected to continue.

• Question from Christopher Caso (Wolfe Research): Thoughts on Enterprise Data growth for 2026 and any seasonality?
  Response: Raised floor for 2026 growth to 50% (from 30-40% prior); demand remains strong with no clear seasonality mentioned.

• Question from Joseph Quatrochi (Wells Fargo): How much of the increased Enterprise Data outlook is related to traditional server CPU demand?
  Response: Lines between AI/GPU and CPU are blurring; MPS sees strength in both but does not separate figures.

• Question from Joseph Quatrochi (Wells Fargo): Any memory price increases or demand destruction in PCs?
  Response: No constraints on capacity side; PC demand is different from data centers, with trends uncertain.

• Question from Joshua Buchalter (TD Cowen): Is visibility in Enterprise Data improving compared to a year ago?
  Response: Yes, due to longer ordering patterns from customer capacity concerns, providing more confidence.

• Question from Joshua Buchalter (TD Cowen): Is the 40% non-Enterprise Data growth for 2025 indicative of 2026?
  Response: Not stated for 2026, but company expects continued growth across diverse markets.

• Question from Quinn Bolton (Needham): Are you gaining share in the AI power segment?
  Response: Confident in product portfolio and design wins, but refrains from direct share commentary.

• Question from Quinn Bolton (Needham): What is the preference for GaN vs. silicon carbide in 800V solutions?
  Response: MPS has both technologies and is first to sample 800V solution; market demand will determine mix.

• Question from Richard Schafer (Oppenheimer): Are server CPUs migrating to 48V?
  Response: Most still use 12V, but some advanced models use 48V; trend is toward modules for efficiency.

• Question from Richard Schafer (Oppenheimer): Expectations for optical transceiver business in 2026?
  Response: Optical modules expected to continue growing with data center interconnect ramp; communications growth from modules and switches.

• Question from Richard Schafer (Oppenheimer): Top drivers of automotive growth in 2026?
  Response: 48V zonal architectures and ADAS, but growth dependent on customer implementation pace; macro uncertainty prevents specific rate.

• Question from Gary Mobley (Loop Capital): What drove consistent market outperformance in 2025?
  Response: Differentiation through broad end-market presence and rapid adaptation to market changes, not a single factor.

• Question from Gary Mobley (Loop Capital): Is the 2026 year shape more linear given backlog?
  Response: First half more secure; second half trajectory uncertain but initial ordering patterns are positive.

• Question from Tore Svanberg (Stifel): Position in SSD power for data center in 2026?
  Response: Engaged in DDR5 and single-site memory modules; storage growth is data center-driven.

• Question from Tore Svanberg (Stifel): Capacity plans beyond $4B?
  Response: Continuously expanding capacity and supply chain management with rigorous quality standards.

• Question from Wei Chia (Citi Research): Is updated Enterprise Data guidance based on share gains or industry growth?
  Response: Combination of strategic customer engagement and a large market opportunity; positioned to take advantage.

• Question from Wei Chia (Citi Research): Update on gross margin drivers?
  Response: Currently at low end of 55-60% target; backlog development expected to support sequential improvements.

• Question from Jack Egan (Charter Research): Update on packaging innovation doubling current density?
  Response: Sampling products, with shipping expected this or next quarter.

• Question from Jack Egan (Charter Research): Impact of moving to system provider on OpEx and SG&A?
  Response: Transformation has occurred organically over 10+ years with maintained R&D efficiency; OpEx growth remains slower than revenue.

• Question from Sebastien Cyrus Naji (William Blair): Expectations for vertical power solutions adoption in 2026?
  Response: Vertical power is market direction for efficiency; revenue contribution expected in 2026.

• Question from Sebastien Cyrus Naji (William Blair): Impact of co-packaged optics on optical module revenue?
  Response: Higher current density and integration benefit ASPs; more long-term than near-term impact on 2026.

Contradiction Point 1

Enterprise Data 2026 Growth Outlook

Specific growth guidance for Enterprise Data in 2026 was raised significantly between Q3 and Q4.

What are your thoughts on Enterprise Data in 2026, and are there seasonal factors? - Christopher Caso (Wolfe Research, LLC)

2025Q4: Bernie Blegen conservatively raised the growth floor for Enterprise Data in 2026 to 50% from a previous range of 30–40%. - [Bernie Blegen](CFO)

Will Enterprise Data grow next year, and what factors could influence this growth? - Christopher Caso (Wolfe Research)

20251031-2025 Q3: Bernie Blegen provided a specific range of 30-40% growth for 2026. - [Bernie Blegen](CFO)

Contradiction Point 2

Gross Margin Outlook

The expected near-term trajectory for gross margins shifted from a steady range to an expectation of sequential improvement.

What's the update on the 55–60% gross margin target, and which end markets are above or below the corporate average? - Wei Chia (Citigroup Inc. Exchange Research)

2025Q4: A backlog is beginning to develop, which should allow the company to resume its historical pattern of incremental sequential improvements (10–20 bps per quarter) at some point during the year. - [Michael R. Hsing](CEO) and [Bernie Blegen](CFO)

With gross margins declining, what is the expected trajectory over the next 1-2 years—will they remain in the mid-55% range, rise, or stay flat? - Quinn Bolton (Needham)

20251031-2025 Q3: Gross margins are expected to remain in a steady range of mid-55% plus or minus 20-30 basis points for the foreseeable future. - [Bernie Blegen](CFO) and [Michael R. Hsing](CEO)

Contradiction Point 3

Timeline for Module/Systems Transition

The expected timeline for significant revenue from modules/systems shifted from a long-term (3-4+ years) opportunity to a more immediate contributor.

How will MPS's transition from silicon supplier to system provider affect OpEx and R&D? - Jack Egan (Charter Equity Research)

2025Q4: The transition to systems (like modules) should increase net margins and efficiency.... The Investor Day model already accounted for this transition, projecting OpEx to grow slower than revenue for leverage. - [Michael R. Hsing](CEO), [Bernie Blegen](CFO), and [Tony Balow](CFO)

What is your progress in transitioning from chip sales to subsystems and systems in the Enterprise Data segment? - Tore Svanberg (Stifel)

20251031-2025 Q3: The near-term goal is to achieve high-volume, highly automated module production... New solutions like 800V data center power (e.g., 2728 revenue ramp) support the view that this is a long-term opportunity (3-4+ years to see significant revenue). - [Michael R. Hsing](CEO) and [Bernie Blegen](CFO)

Contradiction Point 4

Visibility and Order Patterns

Contradiction on the visibility and predictability of enterprise data bookings.

Has visibility in Enterprise Data increased compared to a year ago? - Joshua Buchalter (TD Cowen)

2025Q4: Visibility has improved due to longer ordering patterns as customers express concern over general capacity constraints. - [Bernie Blegen](CFO)

Are bookings improving sequentially, and what seasonal factors impact Q1? - Gary Mobley (Loop Capital Markets)

20251031-2025 Q3: Bernie Blegen: The market remains dynamic. Visibility into the first half of next year is limited. - [Bernie Blegen](CFO)

Contradiction Point 5

Automotive Segment Growth Guidance and Visibility

The specificity and confidence in providing 2026 automotive growth guidance have decreased from a projected 40-50% growth to a refusal to give specific rates.

What are the top drivers of automotive growth in 2026, and what is the ADAS content per vehicle? - Richard Schafer (Oppenheimer & Co. Inc.)

2025Q4: The company is... but macro uncertainties (tariffs, EV subsidies, memory shortages) make it hesitant to provide specific 2026 growth rates. - [Bernie Blegen](CFO), [Michael R. Hsing](CEO), and [Tony Balow](CFO)

What is the outlook for the automotive segment in the second half? - Nathaniel Quinn Bolton (Needham & Company)

20251031-2025 Q3: Full-year automotive growth is expected to be 40-50%. - [Bernie Blegen](CFO) and [Michael Hsing](CEO)