Monolithic Power (MPWR) Tops Q4 Earnings & Revenue Estimates
Monolithic Power Systems, Inc. MPWR reported healthy fourth-quarter 2023 results, with the bottom and top lines beating the Zacks Consensus Estimate.
Net Income
On a GAAP basis, net income fell to $96.9 million or $1.98 per share from $119.1 million or $2.45 per share in the prior-year quarter. The decline was primarily due to an increase in operating expenses.
Non-GAAP net income was $140.9 million or $2.88 per share compared with $154 million or $3.17 per share in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate by 3 cents.
For 2023, GAAP net income was $427.4 million or $8.76 per share compared with $437.7 million or $9.05 per share in 2022. Excluding stock-based compensation of $149.7 million, net deferred compensation plan expense of $1.1 million, amortization of purchased intangible assets of $0.1 million and $3.6 million for related tax effects non-GAAP net income amounted to $574.6 million or $11.78 per share compared with $599.9 million or $12.41 per share in 2022.
Monolithic Power Systems, Inc. Price, Consensus and EPS Surprise
Monolithic Power Systems, Inc. price-consensus-eps-surprise-chart | Monolithic Power Systems, Inc. Quote
Revenues
Quarterly revenues for Monolithic Power were $454 million compared with $460 million a year ago. The top line surpassed the Zacks Consensus Estimate by 0.4%.
For 2023, the company experienced a 1.5% top-line expansion, with net sales increasing to $1,821.1 million from $1,794.1 million in 2022. Despite revenue decline in the Industrial, Communications and Consumer markets, healthy growth trends in the Automative, Enterprise Data and Storage and Computing segments positively impacted the top-line performance.
During the quarter, Storage and Computing revenues decreased to $117.3 million from $120.8 million in the prior-year quarter. For 2023, revenues grew to $491.1 million from $452.5 million in 2022. This 8.5% increase was primarily driven by higher sales of products for enterprise notebooks and storage applications.
In the fourth quarter, Enterprise data saw massive growth of $128.8 million compared with $68.4 million in the prior-year quarter. For 2023, revenues from the segment increased 28.5% to $323 million. Increased sales of power management solutions for AI applications contributed to the impressive growth.
Revenues from the Automative segment grew 31.5% to $394.7 million in 2023 from $300 million in 2022. The growth was primarily attributable to increased sales of highly integrated applications supporting advanced driver assistance systems, the digital cockpit and lighting applications. For the fourth quarter, it fell to $89.7 million from $97.3 million a year ago.
As 4G and 5G infrastructure sales decreased, the Communications segment witnessed a decline of 18.5% to 204.9 million year over year for 2023. It recorded revenues of $40.9 million in the fourth quarter compared with $64.2 million in the prior-year quarter.
In the December quarter, Industrial revenues were down to $33.3 million from $56 million in previous year's quarter. It fell 21.2% year over year to $172.7 million in 2023 from $219.1 million in 2022. The drop reflected lower sales in applications for industrial automation, security and power sources.
Revenues from the Consumer segment witnessed a 26.6% decline to $234.7 million year over year in 2023. For the quarter, revenues were $43.7 million compared with $53 million in prior year quarter.
By product family, revenues in DC to DC surged to $427.8 million in the fourth quarter from $432.5 million in the prior-year quarter. The year’s revenues increased to $1,718.6 million from $1,696.5 million in 2022.
For the fourth quarter, Lighting Control revenues were marginally down to $26.1 million from $27.5 million. However, 2023’s revenues totaled $102.4 million compared with $97.5 million in 2022.
Other Details
Non-GAAP gross margin contracted 280 basis points from the year-ago quarter to 55.7%. The reduction was mainly due to the sales mix.
Non-GAAP operating expenses were $96.7 million, up from $94.8 million in the prior-year quarter. Non-GAAP operating income fell 10.3% year over year to $156.1 million.
Cash Flow & Liquidity
As of Dec 31, 2023, cash and cash equivalents amounted to $527.8 million and long-term liabilities were $88.6 million compared with respective tallies of $288.6 million and $73.4 million as of Dec 31, 2022.
Outlook
MPWR remains cautious about near-term business conditions as competition in the supply chain persists. For the first quarter of 2024, the company projects revenues within the range of $437 million to $457 million. Non-GAAP gross margin is estimated between 55.4% and 56.0%. On a non-GAAP basis, operating expenses are expected to be between $101.8 million and $103.8 million.
Zacks Rank & Stocks to Consider
Monolithic Power currently carries a Zacks Rank #4 (Sell). ,
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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