MPS Shocks With 20.8% Revenue Surge Amid AI and Auto Push

Date of Call: Feb 5, 2026

Financials Results

• Revenue: $751.2 million for Q4, 1.9% above Q3 2025 and 20.8% higher than Q4 2024; full year 2025 revenue $2.8 billion, up 26.4% from 2024
• Gross Margin: Between 55.5% and 55.8%, at the low end of the 55% to 60% target range

Guidance:

• Increased the 2026 growth floor for Enterprise Data to 50%.
• Automotive growth is expected to continue, driven by 48V zonal and ADAS content, though no specific rate is given due to macro uncertainty.
• Non-Enterprise Data markets grew over 40% in 2025, and growth is expected to continue in 2026, though at a rate not specified.
• Optical modules and data center switches are expected to be growth areas in 2026.
• The company is positioned to benefit from the shift to 800V power solutions in data centers, with sampling underway.

Business Commentary:

Record Revenue Growth:

• Monolithic Power Systems, Inc. reported record quarterly revenue of $751.2 million for Q4 2025, 1.9% above Q3 2025 and 20.8% higher than the fourth quarter of 2024.
• The growth was driven by consistent execution, continued innovation, and customer focus, with a notable increase in non-Enterprise Data end markets, which grew by over 40% year-over-year.

Enterprise Data and AI Demand:

• The company's Enterprise Data segment showed pronounced growth in Q4 2025, leading to an updated outlook for 2026 with a conservative floor growth estimate of 50%.
• This trend was fueled by strong ordering patterns, significant design wins with major customers, and robust demand for AI and data center applications.

Automotive Segment Expansion:

• Automotive revenue grew by 43% year-over-year in 2025, driven by new solutions for 48-volt and zonal architectures.
• The growth is attributed to increasing adoption of advanced driver-assistance systems (ADAS) and new technologies in automotive power management.

Optical Module and Storage Growth:

• The company experienced record module revenue and saw significant growth in optical modules, driven by data center demand for higher power density and efficiency.
• Storage growth was propelled by the transition to DDR5 and increased data center-driven demand for SSDs and HDDs.

Capacity and Supply Chain Management:

• Monolithic Power Systems secured over $4 billion in geographically balanced capacity to support future growth, expanding its supply chain with new partners.
• The strategic capacity expansion ensures stability and ability to meet rising demand, especially in the data center and AI sectors.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed strong confidence with statements like 'MPS' prospects remain bright' and 'we are well positioned to sustain the broad-based growth.' They highlighted record revenue, strong ordering trends, and a raised growth outlook for Enterprise Data. The tone was optimistic about future opportunities in AI, automotive, and new product transitions.

Q&A:

• Question from Christopher Caso (Wolfe Research, LLC): Could you give some color on what you're seeing with respect to the different segments for the March quarter?
  Response: Ordering patterns strengthened with a book-to-bill ratio well above 1, and backlog extends into Q2 and Q3 2026. Enterprise Data and Communications are expected to remain strong.

• Question from Christopher Caso (Wolfe Research, LLC): What are your thoughts on Enterprise Data growth for the year and any seasonal elements?
  Response: CFO lowered his previous 30-40% growth range to a floor of 50% for 2026, citing improved ordering patterns and confidence.

• Question from Joseph Quatrochi (Wells Fargo Securities, LLC): How much of the increased Enterprise Data outlook is related to traditional server CPU demand?
  Response: Management noted the lines between AI, GPU, and CPU are blurring, and they are winning new design wins across these areas.

• Question from Joseph Quatrochi (Wells Fargo Securities, LLC): Are you seeing memory price increases and potential demand destruction in PCs?
  Response: CEO stated they focus on delivering what customers ask for and do not see PC memory constraints affecting them currently.

• Question from Joshua Buchalter (TD Cowen): Is visibility in Enterprise Data better now compared to a year ago, and how does that growth compare to non-compute verticals?
  Response: CFO said visibility improved due to longer ordering patterns and customer capacity concerns. He refrained from giving 2026 growth rates for non-Enterprise Data but noted ongoing growth.

• Question from Quinn Bolton (Needham & Company, LLC): Are you gaining share in the AI power segment in 2026?
  Response: CEO declined to enter a 'pis**** contest' but expressed confidence in their product portfolio and design wins.

• Question from Quinn Bolton (Needham & Company, LLC): What is the market preference for 800V rack solutions between GaN and silicon carbide?
  Response: CEO and CFO noted they have developed both GaN and silicon carbide devices, and the company is well-positioned to adapt to whichever technology is demanded.

• Question from Richard Schafer (Oppenheimer & Co. Inc.): What are expectations for the optical transceiver business and the comms segment in 2026?
  Response: Vice President of Finance expects optical modules to continue growing with the 1.6T ramp and for communications to be a growth area in 2026.

• Question from Richard Schafer (Oppenheimer & Co. Inc.): What are the top drivers of automotive segment growth in 2026, and how big is ADAS?
  Response: CFO highlighted diversification into 48V zonal and ADAS content, but growth depends on customer implementation pace. They are hesitant to quantify full-year growth due to macro uncertainty.

• Question from Gary Mobley (Loop Capital Markets LLC): What drove your outperformance in 2025, and can you provide KPIs on module mix?
  Response: CFO attributed outperformance to consistent execution, differentiation across end markets, and quick adaptation to market changes, not to a specific rabbit-out-of-hat strategy.

• Question from Gary Mobley (Loop Capital Markets LLC): Is the 2026 year shape more linear now given stronger bookings?
  Response: CFO said the first half is more secure, but second-half trajectory depends on variables. They have adapted to similar issues before.

• Question from Tore Svanberg (Stifel, Nicolaus & Company, Incorporated): What is the profile of the SSD power business for data centers in 2026?
  Response: CEO and VP of Finance noted growth in both DDR5 and non-DDR5 (SSD/HDD) segments, pulled by enterprise demand.

• Question from Tore Svanberg (Stifel, Nicolaus & Company, Incorporated): What are you doing on capacity expansion for the next 3 years?
  Response: CEO stated they are continuously expanding capacity and have established a supply chain management framework to ensure quality and meet growing demand.

• Question from Wei Chia (Citigroup Inc. Exchange Research): Is the updated Enterprise Data guidance assuming market share gains, and can MPS navigate supply constraints to gain share?
  Response: CFO refrained from breaking down gains but emphasized strategic engagement with key customers and a long tail in the market, positioning them well to take advantage of opportunities.

• Question from Wei Chia (Citigroup Inc. Exchange Research): Can you provide an update on gross margin drivers and which end markets are above or below corporate average?
  Response: CFO noted gross margin is at the low end of the 55-60% target range and needs a longer backlog horizon to resume historical sequential improvements.

• Question from Jack Egan (Charter Equity Research): Are there updates on the packaging innovation that doubles current density?
  Response: CEO said sampling has begun, with shipping expected in the current or next quarter.

• Question from Jack Egan (Charter Equity Research): What is the impact of moving to system provider on OpEx and R&D?
  Response: CEO and CFO stated the transformation has been ongoing for over a decade without compressing margins, emphasizing efficiency and adding new skill sets organically.

• Question from Sebastien Cyrus Naji (William Blair & Company L.L.C.): What are expectations for adoption of vertical power solutions in 2026?
  Response: CEO and CFO said vertical power is the natural market direction for energy efficiency and will drive revenue in 2026.

• Question from Sebastien Cyrus Naji (William Blair & Company L.L.C.): How might co-packaged optics change your revenue opportunity in optics?
  Response: CEO and CFO noted higher current density and integration benefit them, widening the competition gap, though it is a longer-term move.

Contradiction Point 1

Enterprise Data Segment Growth Outlook

The projected growth rate for the Enterprise Data segment for 2026 was raised significantly between two quarters.

Annualizing Q4 numbers align with prior guidance. What are your thoughts for the year and potential seasonal factors? - Christopher Caso (Wolfe Research)

2025Q4: The previously indicated 30-40% growth range is now raised to a floor of 50% growth for 2026. - [Bernie Blegen](CFO)

What challenges and opportunities does enterprise data face next year, and will it grow? - Christopher Caso (Wolfe Research)

20251031-2025 Q3: Enterprise data is expected to grow 30-40% in 2026, with growth weighted to the second half of the year. - [Bernie Blegen](CFO)

Contradiction Point 2

Gross Margin Expectations

The expected trajectory and drivers for gross margin improvement shifted notably.

What is the update on the gross margin target of 55-60% and which end markets are performing above or below average? - Wei Chia (Citi Research)

2025Q4: Trending between 55.5% and 55.8%, low end of model; backlog developing suggests potential for sequential improvements of 10-20 bps per quarter. - [Bernie Blegen](CFO)

What is the projected trend for gross margins over the next 12-24 months? - Quinn Bolton (Needham)

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

Contradiction Point 3

Nature of Customer Ordering Patterns and Visibility

The characterization of market predictability and the underlying causes for improved visibility changed.

Is visibility into Enterprise Data better now than a year ago, and how does it compare? - Joshua Buchalter (TD Cowen)

2025Q4: Now, longer ordering patterns are seen due to customer concerns about general capacity constraints, providing more confidence in the outlook. - [Bernie Blegen](CFO)

Have there been changes in lead times or pricing for voltage regulators in the enterprise data segment over the last quarter? - Quinn Bolton (Needham)

20251031-2025 Q3: Improved predictability comes from layering more customers, but recent blockbuster announcements cause rapid changes. The company positions itself to be as responsive as possible. - [Bernie Blegen](CFO)

Contradiction Point 4

2026 Growth Expectations for Non-Enterprise Data Verticals

Previously implied broad-based growth for 2026, now disavows 40%+ growth for non-compute verticals.

Given the 40% non-Enterprise Data growth in 2025, will non-compute verticals see similar growth in 2026? - Joshua Buchalter (TD Cowen)

2025Q4: Growth in 2026 is not projected at 40%%; the company is still a small player in large markets and will grow, but specific rates are not provided. - [Michael R. Hsing](CEO)

Does the analog industry's 10-15% outperformance target in a cyclical recovery imply ~20% growth by 2026, and which end markets will drive it? - Wei Qi Chia (Citigroup)

2025Q2: Growth for 2026 is expected to be broad-based, but the ramping enterprise data opportunities will be a key contributor. - [Bernie Blegen](CFO)

Contradiction Point 5

Enterprise Data Growth Outlook for 2026

Raised 2026 growth guidance from prior range, now citing 50%+ growth as a floor.

How does annualizing Q4 Enterprise Data numbers align with guidance, and what's the outlook for the year, including seasonality? - Christopher Caso (Wolfe Research)

2025Q4: Previously indicated 30-40% growth range is now raised to a floor of 50% growth for 2026. - [Bernie Blegen](CFO)

Has the full-year guidance in the enterprise data market seen increased visibility or a narrowed range? - Christopher Caso (Wolfe Research)

2025Q2: The previous range of flat to down potentially 20% for the full year is still the guidance. However, Q4 is expected to be up sequentially. - [Bernie Blegen](CFO)