MPWR - Earnings call transcript Q1 2019 | Monolithic Power Systems, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Monolithic Power Systems First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Bernie Blegen, Chief Financial Officer. ahead. go Please

Bernie Blegen

X, on we much. quarter conference very Michael safe and Risks, to harbor harbor to with differ that actual which assumes projections is views uncertainties, www.monolithicpower.com. XXXX, our website make published the welcome statement and contained forward-looking CEO cause the safe Thank XXXX Good today's and obligation management's Monolithic in provided the current no results through to release expectations. which course that to call, first contained statements me earnings Form is could statements in risks MPS, our refer involve of uncertainties release Founder call. today. call. earnings of Power SEC the March are will including results In the today's accessible QX and factors MPS filings, you and from Please of update in call. our in and on the afternoon today's could Systems to identified Hsing, and information on differ conference materially XX-K filed other cause

XXXX filed our We webcast over will and investors performance conference our with which our and website and included you well expense, first with prepared a is and SEC earnings to not considered for posted not the substitute A have is are to accordance earnings R&D financial being measures financial the multi-market with that superior income, and million, will operating like from be one today. be releases, would SEC. our I release, XXXX, accordance to in margin, earlier I'd year, GAAP interest reconciling replay tables QX reconciliation GAAP are of or available XXXX. quarter on in non-GAAP live and website. release GAAP between as benefit had call outlines income, financial should on refer remind the filed non-GAAP that for and be measures leadership non-GAAP the quarter as today's on that gross to X.X% for strategy. net income the as a table also and record GAAP. QX of XXXX QX higher financial comparable we to along measures the MPS expense, the measures other to continues revenue both operating technology a MPS SG&A These discussing basis. $XXX.X with diversified with the prepared earnings than the in with another Internet in

an Looking as increase first and rose router at MPS' first our of revenue reflected by XXXX of revenue compared XX.X% million revenue in with initial quarter market, communications quarter The quarter from well or the million the of represented revenue XXXX. XX.X% first sales Communications first quarter market. XXXX. higher the XG in XXXX primarily of $X.X networking as sales, year-over-year XX.X% residential gateway $XX.X

up First sources power XXXX reflected of million from total first XXXX. security The primarily the gains XX.X% the accounted industrial increase and and of quarter quarter increased applications. revenue, from revenue the for of XXXX XX.X% of XX.X% of quarter first XXXX in quarter our first first in $XX.X over quarter

computing of versus infotainment, and of XX.X% represented of sales primarily same market grew First of automotive of In MPS' XX.X% our period XX.X% million, XX.X% $X.X $XX.X and quarter XXXX the million and XXXX. connectivity revenue represented quarter XXXX application year-over-year. in growth first million storage revenue This the period $XX.X increased over revenue products. same or safety XXXX increased

with for the with decrease year-over-year quarter year-over-year reductions XX% XXXX. or revenue first revenue primarily in Consumer XX.X% quarter margin $XX.X higher growth the revenue first the represented markets. was quarter compared quarter markets the revenue The of of of first XXXX XXXX, and in XXXX XXXX. across XXXX XX.X%, quarter XX.X% the reflected contribution The reflected lower basis the million basis first QX GAAP revenue traditional increase $X servers. quarter with of revenue points XX.X%. sales quarter XX% First consumer storage than revenue board the from computing decreased Compared points compared of a XXXX. of of million consumer in and our MPS' of and XX gross first fourth represented XX than notebooks

was first Our of million compared with reported in million XXXX. quarter $XX.X income $XX.X GAAP the operating

XX the For the but fourth first margin quarter quarter than basis of XXXX. quarter XXXX, of lower the of non-GAAP first was XXXX, matching points XX.X%, gross

Our to compared non-GAAP in of reported million first operating income XXXX. million $XX.X was the quarter $XX.X

review our operating expenses. Let's

were expenses of first in XXXX, Our $XX.X the million compared XXXX. quarter first to million $XX.X operating GAAP of quarter the in

operating reported stock expenses are here first Our XXXX operating and for income deferred discussed million, $XX.X up million quarters the or in unfunded The non-GAAP GAAP quarter and differences the compensation the expenses loss quarter plan. expenses first were between from non-GAAP operating XXXX. on expense $XX.X compensation of

million including stock or $XX.X $XX.X to quarter in per of the reported the compared compared the in bottom share first of was $X.XX compensation the GAAP XXXX, quarter with XXXX. million share For of net million cost approximately $XX.X of XXXX. fully with charged to line, first Switching XXXX million goods or $XXX,XXX income per expense quarter total sold, $X.XX first $XX.X first diluted was quarter

at or XXXX First fully with per diluted per million. of $XX.X $XX.X Fully quarter or the million XXXX. million XX.X non-GAAP was end share first XXXX, $X.XX shares quarter fully of share were compared in diluted QX income $X.XX net outstanding the diluted

$XXX.X at at at of the the million to fourth investments quarter million cash end of equivalents of end first $XXX.X XXXX. were Cash, the XXXX of and compared sheet. balance the the look let's quarter Now

flow $XX.X XXXX. operating For with first of in the quarter, flow generated of about the million quarter cash $XX.X operating cash MPS million compared of

five days days the XXXX at weighting back-end of of quarter million end at days ended quarter XX and of of first First higher $XX.X first QX posted million. $XX.X than up quarter shipments XX XXXX within XXXX XXXX the the or spending totaled from the the outstanding, sales days four days capital reflecting receivable XX fourth Accounts XXXX. quarter in the of of of

inventories primarily days million legacy push million, end business Days internal and XXX at from delay first end end XXXX. ramps quarter the first with the days of inventory of at XX increased end of in $XXX.X is the XXX customers' of at XXXX. at $XXX.X of XXXX, the fourth to an XXXX the fourth and The up of QX of quarter were quarter the at unexpected of outs. days of XXXX Our the increase compared to product the end XXX days due new sequential the of the quarter

carrying specific than minimal a risk. downturn inventories normal second would while elevated said XXXX. in level turn and or through given during now most obsolescence our quarter likely to to of our customer outlook reductions not the to we've second that, said early the we're inventory Having do XXXX. the of for quarter are remain I carry As we not comfortable meaningful application products like the that higher past, are until expect of

QX forecasting to million. million the $XXX.X revenue are $XXX.X We range of in

in million SG&A litigation in expenses range and range to margin goods be R&D be is compensation stock of million the sold, million $X.X We the to estimate or This and that the expected and also margin expense GAAP million million $XXX,XXX XX.X% million, Total be and expenses before the ranging gross Interest is of exchange $XXX,XXX. XX.X%, from of income to XX.X%, to $XX.X non-GAAP excludes between $XX.X non-GAAP the range in range losses, will to following, stock XX.X $XX.X expenses. million R&D cost to to SG&A gross XX.X% charged and range to to $XX.X million $XX.X expect share million. in shares. to XX.X foreign of $XX.X GAAP of million $X.X between $XXX,XXX expenses diluted including compensation to litigation gains fully other

For the and cautious. uncertainty some we second remain see half our the markets of year, end in still

planned. changing execute to the will continue conditions phone to adapt questions. will market now and We lines open the as for I

Operator

comes the of question from Cowen. Ramsay with first Our line Instructions] [Operator Matt you. Thank

Your line is now open.

Josh Buchalter

bit year-over-year still the is portion heading expectations Josh This Matt. quarter. I dig on is Buchalter is the storage of solid, the but your it The and of into was a into to below Hey. business. growth hoping behalf computing

Given you could across if was weakness the weak a seen provide units we've increases plays PCs, and Thank the board more you. there wondering out. overall I in and content in granularity and datacenter, dynamic little storage between new platforms your that how

Bernie Blegen

to good you. and Josh, hear from Sure,

in and the in in last next we're seeing is that's in belief step a the And lower of have I essentially year, of that at saw of two down following are SSD we each pause revenue, think quarters. server hyper in was build of they the certain content. QX XXXX, round then there stayed as a centers what the and plateau taking over And the justify scales in decrease a that also is investment. data QX

Michael Hsing

an last still think same. increased. quarters we the I same server gained is also couple as momentum of the The think design compare and the overall activities I we win the to and all the side the on shares revenues

Josh Buchalter

given half. you more on to your hoping Got then was into to the soft some broadly, thank year. hear second the I and seasonality start thoughts it, the

questions the this soft Thanks on congrats and entire verticals off the seen results. of multiple my on you're sort we've And content how are taking paying throughout that industry. solid for macro

Michael Hsing

- certain, year second till a Yeah, prepared don't huge we our all half, very in. okay. inventories came and have and win and that expect customers I that a and XXXX [ph], we still give signals have not up us last Well now different to recon a we

are waiting just we So see. to

Bernie Blegen

these that conditions. quarter. think are market guide MPS of I But certainly, specifically beyond the you're Yeah, didn't current unusual that aware

If grow years, between you and QX, it XX% a increased to forecasting X% slower probably a macro the a believe look rate, indicative five broad probably see based I you'd in QX we of environment. are seasonality going at more over recovery trend last gradual sequentially. that from which XX% the is revenues Currently, we've at our

us, a the said, will through we gradual more don't remainder one XXXX. improvement the to So I tide any see in of as expects event MPS see necessarily catalyzing demand that turn for

Michael Hsing

And, grow market in came difficult share And but very overall, how is now. we just much growth still because tell to expect to and gain. the

Josh Buchalter

congrats again. it, Got you, guys, thank and

Michael Hsing

Thank you.

Operator

Thank you.

with Svanberg the next Stifel. Tore of question line from comes Our

is Your open. line now

Tore Svanberg

Yes. the we Couple of questions, of specifically. maybe end can start with off QX markets Thank for you. some

the sub-seasonal, still it's yes, but growth. Bernie So, mentioned you is growth

a segments seeing still So, are bit are recovering others? you slower than some or all

Bernie Blegen

high level that elevated QX, Well, over which investments into If communications we pick we represents that QX. out I we to well will across as think well on think that going a at step-up improvement had saw as I for are little think prior a took in I what - the XG certainly I speaks significant big positioned initial board look a and of very runner, over our actually diversification. continue bit And the result year. a at a

going you're recognizing computing, of depressed, say that I take to data see hit but don't think that button. a sort level the is that But to I at it's centers been lower pause step-up. as have expected also want fairly, a the to

do a don't that think its as again I number an turnaround And elevated by probably I normal cadence. would And from quarters, very uptick see to an go still demand. return automotive, a been is being we soft level I immediate in which impacted for has see consumer to QX. then, industrial, really also of there, QX but

Michael Hsing

said, worst and the gain the is the even we one one we actually Bernie, see shares And think QX consumer. market other better in QX. is than I one last the as all is

Tore Svanberg

catch Bernie, million I did in quarter? good - did I Very $XX.X - say and was you CapEx the don't

Bernie Blegen

CapEx? I'm sorry,

Tore Svanberg

Yeah.

Bernie Blegen

Yes.

Tore Svanberg

maybe a little Can was Yes. because that you little elaborate bit than what on usual? on that's money higher bit a spent

Bernie Blegen

the specific been purchasing as executive their you Sure. in is of be And a e-commerce, for you regional take will which have this experience space background. if over back, Kirkland, sort which as this allows as to course us recruit offices, this our software using years diversification give is Washington, engineers will We view in program, market two well purchased be with office which worldwide to and for center of of a look geographic the going us last because we the if applications. end larger to building our our draw we both part opportunity talent

a are design of buying the in another also, in Detroit, we process as we completed of weeks automotive. couple Germany, And allow be in the Rhine us where location, Center we building also forward, of in purchase So then space a ago Excellence have And out couple Valley. building will hours here servicing we're office going create a look a Stuttgart, we which Barcelona, the a to center. of to

the aid our the do So versus the not is growth, owning alternatives buildings renting that these but we only the moves future to facilities. P&L accretive believe of

Michael Hsing

And - it's acquire a so than we return got as money particularly plus we putting the space actually. all really plus can Washington and building we in need those and EPS more help bank. we in But the better the - are and it EPS

Tore Svanberg

Very last just one for look there. latest the I good, e-commerce Michael, one Could please? us and you updates you, always give for greatest maybe business, there the

Michael Hsing

learning. still We're

I is but as websites - and that our and the website website launched as well. frankly we think, on launched it's - product we activities overall, in think we distributed the sell came our not high

modules, also product floppy better well. It's give the is can have and them a those e-commerce, download we're they stage the And but still programmable do to provide better for learning the if than really in parts? of really they the really parts, programmable not we learning, itself linked is we're disk to it well our it. our still any we doing we we we're obviously, through a so problem and website expected selling e-commerce. their a somehow had usage how all and doing Again, using them And current and - and all that solve how

parts. to every glitch other on we to auto too told it, we or obviously And because And these confusing. may We the program use the concepts the our of websites, our are customers, still way some know some have But parts week and upgrading from way is this are and maybe website. there the revolution supplied link. power revolution feedback that they - are from like these missing designing are that how

Tore Svanberg

you. Very helpful. Thank

Michael Hsing

Okay.

Operator

Thank you.

from the with question Rick next Oppenheimer. comes of Our Schafer line

line now is Your open.

Rick Schafer

[ph] tough probably on to in. about solid congrats Whitley talked your quarter content Thanks I your I anyway and my something in - I'll server. $XX maybe know think, a first Whitley or offer on my a like environment, all $XX question from, something going we've

I believe. that as any give or you I see incremental increase sense of I'm that incremental to migrate to you move looks content, XX-volt? grow Is contents things for rates much of any would that would just I that assume think guys accelerator like $XX QSMod, mean you sense and I to AI be those a us two how to but can guys. most there curious server we is attach you'll what

Michael Hsing

Yes.

started the the happen. started design now that XX-volts. - second and We we we some have a wins, the all still came have ramp, in, hold it the But of QX designing kind customers, We And and didn't half. expect selling, many selling modules. we'll

winning sure. Other And ones, for some it engineering projects, understand delay. very we're we not is we're But sure we're has these what projects. all

Rick Schafer

to - is be from or in $XX Michael, accelerators $XX? you're XX-volt FPGA it move not or that clear, accelerator GPU to And including

Michael Hsing

GPUs no, - much are of ADAS, AR, And And now. also are kind it's we much, essentially these are winning that same and - or much and sockets for those these the [ph] the four five. these on No, the same of is higher are many the separate. product, content are Jim higher. thing Those

Rick Schafer

Okay.

my in follow-up - then on asked is while, gross I And haven't question, margin. a this Okay. and

an of is it industrial transition, SMB mix wafers this multiyear e-commerce, top XX-inch scenario eventually what we years increasingly acceleration saw as give margin see just line puts revenue a accelerate? and ramp the a but or top actually takes your similar XX-nanometer you kind we last on in favors, auto, you some on expansion know couple the guys you as that there gross or Could can them? you are us ramp in line server, you color XX-nanometer, and of As where your maybe I see progression over and those see we favors saw or and

Michael Hsing

Yes.

it mentioned I before. think I

- not to is we we to use don't plan are - this the our We not as okay. going don't long-term - current not use margin model, - it's

I consumer, dramatic we're line, e-commerce, the improvement. all off, and the things with taking couple in even high-value - product up. and see the next later, of part when in model, consumer after the you'll the products slower. the margin a of go - margin think servers in high-value the and few automotive other move these our margin margin years obviously, products, because as mentioned Bernie the it. and, are of these up steadily with move associated long-term these And especially particularly, the in And going will, the kind higher those in a will years, industrial/automotive But they Our all ones, industrial,

Rick Schafer

thanks a lot. Okay,

Operator

you. Thank

next comes with Stein William from question Our the SunTrust. of line

now line open. Your is

William Stein

thanks it little demand I'd a tough my first cycle, Hey, for like taking offer to relates the want downturn. later a to though, in the bit weathering environment congratulations very I to well. was Monolithic see questions. as ask, to

also presenting a the think as little we later. current saw little Is your a Should bit you a downturn sort assumption? of recovery little still the reasonable situation for later or was well? this XX% through cycle a longer company bit see the likewise as environment Monolithic that I the bit

Michael Hsing

I ago. And XX% three else. green is or four, a don't years. at a the the - a than market will we either think the or but I accelerate It delay, grow recovers I okay, we recovers, share fields. faster takes said, I faster, it least. these because said, product when market these segments will much as because it by - everybody cycle all beat all will growth. see said new the And We that entered market when design you think is gain. as have five And - are delay, didn't see And it it you years activities, in two

Bernie Blegen

Yeah.

our a is ingredient think I annual will parcel by that and we at can the that that's there, that market Will, XX% XX is key XX points. model revenue growth percentage belief to part to we outperform

you market about grew at year about a grew when we full the XXXX, look over at So XX% and at XX%. little

So to guidance in last metric largest look an there's you XXXX companies year full going the that the and that our by works about I shrink peer of acknowledgment, X% aggregate of really, quarter When it, just for to some X%. sort at is probably out.

us as XX look if middle growth. perform again, into digits, better, our at outperform So how able points historic gets is But you the that single XX we you percentage the being to a of to that which intact. can market remains margin not

Michael Hsing

So don't see recovery. the can delay to I we your and how questions, why

So my that's take.

William Stein

appreciate two I maybe answer, real that ones. Okay. quick other

First, I And on of increased on I'd update think at quarter. E love also last an please. at bit quarter, little a the distribution that. inventory the end Motion Thanks.

Bernie Blegen

second. okay. question, Michael first I'll the will Yeah, take the take and

the on of sold and we as new played both inventory, a look as cadence that sell-through by as far business have quarter channel well the actually very had how booked, as of you out. month, So good kind this that business we In at distributors. to the January, the

was I that Chinese up lackluster, which think not channel the is doing advance inventory little Year. to through. - was time quarter really and a making did ended what earlier-than-normal February an was of New lot that sell in that backended allow loaded, the of a

you a shipping order increase lower a and the of - up the denominator in that well as So occur the And because have China. of of went pattern or days, did pattern lot a as for couple quarter. partly again, we ordering

Michael Hsing

And model you the MPS, is have - small that E and we including if selling The Motion now. it, online product notice we're Okay. great. doing actually, models,

a still quite the move needle. And these demonstration out it's to bit Actually, now and move now. meaningful revenue product meant soon purpose. models like the So sell a it's too line, we break overall, for to and a are be needle the overall to

William Stein

Great, thank you.

Operator

Thank you.

comes Our question line Ross with Deutsche Seymore of the from next Bank.

now open. is line Your

Ross Seymore

couple I of questions. want ask a to guys. Hi,

on one is the first of The inventory the side equation.

until dollars about outs some didn't of But to concerned weak on level days risk a worrisome at any you push is in are expect XXXX, that is and basis? or it talked, Bernie, demand mainly the sort And be that to you early Or And as you there talking about. You basis? there obviously some that obsolescence, we were when end you? mentioned should down that, come dollars which become anything is like the well.

Bernie Blegen

that at goods. now lot finished in you a So look inventory, through that we when QX the and were wafer WIP of starts had earlier in again, it began and increase reflected periods going

And And we outs, accounted fact so with of of new some customers' delays much some particularly business consumer, legacy there push that in were the our conjunction that, did in programs. the have increase. in for

of again But recovery a far uptick as come steps in of starts, weakness in days the lowering dollars. in be as not expecting down the reason impact taking wafer in the and partly necessarily inventory a visible should rapidly are we're We reflection here. the continued the again, here that to is the or slower QX terms of

more really my the So to said a at as in that that's think as dollar I in down. that gains be we're next like and And then there to comments, level a opportunity we're come would likely prepared don't quotient days' I that would the with recovery steam that is concerned. I the But believe to me plateauing get year. a or

Michael Hsing

good. as these still made the Under bigger for the a of for those half off this say, let's - We - happen year, chunk we made to QX. this for current And second products a products prepare is may business the ramp. it of are conditions, don't plan created all inventories a - write market same because way big the inventory

it was the number? QX's inventory, If is on QX's you look number, XXX at okay, days, based days the - the XXX

Bernie Blegen

QX.

Michael Hsing

this uncertain still And a it XXX at million, need make high so they're recover and going know environment, too somewhere We looking or QX to million, ramp not. under you're Yes, an don't XXX inventory, it. to nothing if to is whether then. we But inventory. that's this

Bernie Blegen

Yes.

Ross Seymore

side comms on things, growth the guess year-over-year. I of and it Got great

that the as that. on XG, aspects you percentage things you some the just how if router us mentioned could side to that the in of the then the you the with and or a mentioned, the roughly of us total things. size there remind of gateway then what side, of and of also was past, have remind side Can You either two about you XG in in revenues segment is think content XG

Michael Hsing

And I think the And gateway, similar dollar a quarters have increase that some market if XG, product amount. so, ago in to come hit you want move - killer mentioned communication the both waiting a shares. ago we for And are this was our competitive. just we go new Ross, now. out sidelines remember, price current the those very situation, or revenue comms. or few year also, the we're revenues, And and And needles the comms, the sideways. the and I market now or in we products under cycles. go the it's In grab product

Bernie Blegen

Yes.

have for never I market, we requirements. and positioned that so a exceeding their - new the quarter. But products very million years million we Michael, actually I developed killer reason necessarily going customers' are what to story. wave. is had of about to out this And XG the segment think market. said Michael expectations the on and remained because we've when believe missed after the that terrific that lot and really we But we And a XG But application is think I infrastructure that $XX that's of our this a investments take now recognized in between go underperformed, had time has this the a it. basically $XX sideways committed didn't explode. well credit full just comms we're to very are significance per

So between as to much next the I of tip very rolls said But two infrastructure far think over XX-XX gateway out as the the this networking. networking that higher-margin mix infrastructure going and that in as years. as and that's Michael we're favor about lower-margin the the

Ross Seymore

market about given environment, about implications talked on for the inventory last the then the Got aftermarket? cetera. you guys current you me, to growth for OpEx what How implications it, et one and one think your related revenue, were do the

Michael Hsing

that think hiring. I about we're selective very

were we much expense. changed. They And hiring Our reduced. plan our that's biggest

- we still and the company we're growth, overall but freeze. for hire And only best the So talent. we for hiring

Bernie Blegen

Yeah. And add XX-nanometer, real year a I is continuing by strategic investment goal through we XXXX. to to this in will are that's that and because XX-inch that continue we quickly which our with think want also have believe just that we position the to

Michael Hsing

okay. Yeah,

Ross Seymore

Got it. Thanks guys.

Operator

of [Operator Our Instructions] you. Thank with Bolton from comes next the question line Needham. Quinn

is line now open. Your

Quinn Bolton

Hi, new slips guys. quarter last you made follow Wanted slower comments up on some the first to the product about given environment.

now in you think start those when think server meters I smart data things a in had China to some like automotives, the you you new then number sounded programs may ship? model center sense mentioned few areas: of and a China Can it GPU us segment. give

Michael Hsing

amount. smaller It's

more, engaging ago, nobody couple like all and is years especially than at we're activities, and however, And who but levels. we engaged And order a with there's MPS. even And these not before, are before. of We expected customers, much. - lot the as a - executive knows the more first-tier

up server all the market a And as Okay. segments. activities in lot now these went well the as infrastructures

Bernie Blegen

And I'd we just almost that every but too want And China, haircut deviation areas we new greenfield those are single results to out activity. quarter. for much opportunities, Michael really look that at the quarter-on-quarter the is putting still and a to said a competitive some of have as ADAS We're with in sort pace we've you - where on avoid of also taking the geographically, position have actually, high region design I result customers is if customer like still are in but in initial invested stock and have very achieving I on down automotive automotive, on track. markets, our don't a emphasize not really and something growth this the having example, growth particularly did, XG. rate been level these it's into of and market be focus, But same macro there slowdown saw any win delays want going and to in going engagement. the comms we're of the we're Obviously, been And the our a of lighting to you in view that particularly, it. areas, was areas at - as definitely infotainment where losing

the more when be to just think that - basic level. positioned going a the I normal very a the and it's So think of matter business very market well I strong. remains cadence of to And returns we're

Quinn Bolton

question, is atypical biggest X% Understood, growing is the like looking that seasonality I'm XX kind it points little to to you consensus which in December, year, consensus growth, the between XXXX. where quarter. of increase. you Street And is your year-on-year somewhere which, you seems X% market numbers bit pattern. for I a is in probably guess, quarter-on-quarter that's an at But I normal to X% puts can your the of think then up actually third Street had typically rate faster, Street should you if XX% get if right, around this my doing the a XX second down grow and And

fully still see yet still you The industry You mentioned sort that - you not recovered. prepared saw is in the visibility. limited comments of

normal So I today? you to expectation get may do a where for trying that aggressive think would in be QX Or makes then say stand sense, I'm guess you sense? seasonality you

Bernie Blegen

seasonality an our QX points. sequentially for use you QX an percentage normal even example, by Yeah. would as example, Again, be four if QX down as

X%. So about at or down X.X% came we

up sequential to you XX% grow to call revenue And would movement. XX% to QX in the percentage if a us And last point there at neighborhood in the we've growth from just between more a it. then a macro again look broad-based somewhere referenced So years, X% the again, guided you guided the we've QX four delta if or rate. XX% I have as of And look five going - gradual, here, what back is at being slower environment. recovery our four that normal

are their growth that to the be for norms. suggest half the second I percentage points So below probably about - are year of probably seasonal rates sequential four likely the also

Michael Hsing

Quinn, this, All still are unknown.

we see segments, market push And and pull applications the of other in. some products, ones our of out. some And

So it's is in the as Bernie uncertain. said script

don't of you terms and the what's in beat us number lower, numbers, so it. a let make why okay, And

Quinn Bolton

long gateways or last last lower-margin of first the gateway continuing business. are part they like the of from how reason benefiting, last half do half this of is at were perspective, you any why us thoughts looks elevated you you. see a business In it the Understood question Can for lower residential then which than It of from of year? where margins maybe and for give your year third sort a me. level, was second quarter residential year, an revenue

Michael Hsing

Yeah.

aggressive now. Okay. These bit it, revenues - a okay, little are half we're ago, revenues. and year this I reflecting want I of on want And a kind a things, now. in that's

didn't also have consumers, Okay. to it And any but it try effect. we

lower because the didn't Okay and have of if significantly so can't have - not than increase we we we okay, market - last right? get it but losing - - quarter, lower still - share. could price, not still more we And it's year, we we're this a

so to made is. decision And as stay we a

back bigger, very Come lowered. still lose this - in and the Okay. the makes margin side. but major router is to comms, consumer still we business, sockets At the it to period we're good least, And money the don't aggressive. our

ramp-up. - can the product As on we go else we ups speed that. aggressive less gradually And everything or new recovers, in a

Bernie Blegen

we'll QX fulfill opportunity forecast, to pretty if in much think gateway, end I you'll And residential hold Yeah. that with And that QX. up remember 'XX. of we by stepped specific of sales beginning the our products the in

communications I So more times, - all three an right there there mix. now, within there remains it But is uncertainty. has think in see product Michael the up again, opportunity is a favorable step to said that

really to are the near so it's say to margins how And our going hard improve in term.

think return accelerated for impact on look when uncertain term, right as now But timing normal the I again an certainly revenue. we there our margins. is timing will that longer be to

Michael Hsing

a Yeah. have want continued Actually, there's a continuity. okay? other - supply reason this, have We why our to we do ensure

constantly we so they are wafer actually it ensure fab our And of for loading. a and are part we doing

Quinn Bolton

Got it. Thank you.

Michael Hsing

Okay.

Operator

This back like to Blegen closing the would remarks. I any to Thank today's session. question-and-answer for concludes you. now Bernie turn call

Bernie Blegen

likely day. I have during talking at to you forward nice the would be our thank this of call. look a you, and us July. to which conference you for like all joining call, to quarter I'd end conference Great, again second Thank for

Operator

you for gentlemen, conclude thank conference. and today's today's in participating does This Ladies program.

a You have great Everyone disconnect. all may day.

Monolithic Power Systems (MPWR) 5 May 192019 Q1 Earnings call transcript