Power management chips maker Monolithic Power Systems (NASDAQ: MPWR) reported revenue ahead of Wall Streets expectations in Q4 CY2025, with sales up 20.8% year on year to $751.2 million. On top of that, next quarter’s revenue guidance ($780 million at the midpoint) was surprisingly good and 5.7% above what analysts were expecting. Its non-GAAP profit of $4.79 per share was 1.1% above analysts’ consensus estimates.
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Monolithic Power Systems (MPWR) Q4 CY2025 Highlights:
- Revenue: $751.2 million vs analyst estimates of $742.4 million (20.8% year-on-year growth, 1.2% beat)
- Adjusted EPS: $4.79 vs analyst estimates of $4.74 (1.1% beat)
- Adjusted Operating Income: $269 million vs analyst estimates of $263.7 million (35.8% margin, 2% beat)
- Revenue Guidance for Q1 CY2026 is $780 million at the midpoint, above analyst estimates of $738 million
- Operating Margin: 26.6%, in line with the same quarter last year
- Inventory Days Outstanding: 152, up from 139 in the previous quarter
- Market Capitalization: $54.46 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
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, Monolithic Power Systems’s 27% annualized revenue growth over the last five years was incredible. 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).
Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore's Law) could make yesterday's hit product obsolete today. Monolithic Power Systems’s annualized revenue growth of 23.8% 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 robust year-on-year revenue growth of 20.8%, and its $751.2 million of revenue topped Wall Street estimates by 1.2%. Beyond the beat, this marks 8 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 22.3% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 16.6% over the next 12 months, a deceleration versus the last two years. Still, this projection is above average for the sector and implies the market is baking in some success for its newer 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 152, which is 11 days below its five-year average. These numbers show that despite the recent increase, there’s no indication of an excessive inventory buildup.
Key Takeaways from Monolithic Power Systems’s Q4 Results
It was great to see Monolithic Power Systems’s revenue guidance for next quarter top analysts’ expectations. We were also happy its adjusted operating income outperformed Wall Street’s estimates. On the other hand, its inventory levels materially increased. Overall, this print had some key positives. The stock traded up 1.5% to $1,175 immediately following the results.
So should you invest in Monolithic Power Systems right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
