Power management chips maker Monolithic Power Systems (NASDAQ: MPWR) reported revenue ahead of Wall Streets expectations in Q3 CY2025, with sales up 18.9% year on year to $737.2 million. Guidance for next quarter’s revenue was optimistic at $740 million at the midpoint, 2% above analysts’ estimates. Its non-GAAP profit of $4.73 per share was 2.2% above analysts’ consensus estimates.
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Monolithic Power Systems (MPWR) Q3 CY2025 Highlights:
- Revenue: $737.2 million vs analyst estimates of $722.4 million (18.9% year-on-year growth, 2% beat)
- Adjusted EPS: $4.73 vs analyst estimates of $4.63 (2.2% beat)
- Adjusted Operating Income: $260.6 million vs analyst estimates of $255.2 million (35.4% margin, 2.1% beat)
- Revenue Guidance for Q4 CY2025 is $740 million at the midpoint, above analyst estimates of $725.2 million
- Operating Margin: 26.5%, in line with the same quarter last year
- Inventory Days Outstanding: 139, down from 150 in the previous quarter
- Market Capitalization: $52.4 billion
“Our results demonstrate our continued success in transforming from a chip-only, semiconductor supplier to a full service, silicon-based solutions provider,” said Michael Hsing, CEO and founder of MPS.
Company Overview
Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ: MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Monolithic Power Systems’s sales grew at an incredible 27.9% compounded annual growth rate over the last five years. Its growth surpassed the average semiconductor company and shows its offerings resonate with customers, a great starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions (which can sometimes offer opportune times to buy).
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Monolithic Power Systems’s annualized revenue growth of 20.7% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, Monolithic Power Systems reported year-on-year revenue growth of 18.9%, and its $737.2 million of revenue exceeded Wall Street’s estimates by 2%. Beyond the beat, this marks 7 straight quarters of growth, showing that the current upcycle has had a good run - a typical upcycle usually lasts 8-10 quarters. Company management is currently guiding for a 19% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 14.7% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is admirable and indicates the market is baking in success for its products and services.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Monolithic Power Systems’s DIO came in at 139, which is 24 days below its five-year average. At the moment, these numbers show no indication of an excessive inventory buildup.
Key Takeaways from Monolithic Power Systems’s Q3 Results
It was great to see a material improvement in Monolithic Power Systems’s inventory levels. We were also glad its revenue guidance for next quarter exceeded Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 1.5% to $1,103 immediately after reporting.
Indeed, Monolithic Power Systems had a rock-solid quarterly earnings result, but is this stock a good investment here? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.
