MPWR - Earnings call transcript Q1 2024 | Monolithic Power Systems, Inc.

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Genevieve Cunningham

Welcome, everyone, to the MPS First Quarter 2024 Earnings Webinar. My name is Genevieve Cunningham, and I will be the moderator for this webinar.

Joining me today are Michael Hsing, CEO and Founder of MPS; Bernie Blegen, EVP and CFO; and Tony Balow, VP of Finance. Earlier today, along with our earnings announcement, MPS released written commentary on the results of our operations. Both of these documents can be found on our website.

Before we begin, I would like to remind everyone that in the course of today's presentation, we may make forward-looking statements and projections that involve risks and uncertainty, risks uncertainties and other factors that could cause actual results to differ from these forward-looking statements are identified in the safe harbor statements contained in the Q1 earnings release and in our latest SEC filings, including our Form 10-K, which can be found on our website.

as this and information. made obligation assume are update to statements of we today, no Our

Now over to like Bernie. I'd to turn the call

Bernie Blegen

earnings doing different Thanks, a call. today's We're Gen. something in little

call the is As detailed the commentary, before use a provide recital outlook time metrics few our the earnings a performance included comments and I'll release, our up on performance company's in earnings to to just Q&A. this accompanying QX opening XXXX

with in 'XX, XXXX, engagement Our into both first trended the revenue financial XXXX high, grow and QX up stronger. half however, is win from remain limited half of Despite from upwards improved Ordering to 'XX customers across QX of performance the and and second pipeline quarter. Visibility sequentially our quarter consistently continues this through customer year-over-year cautious. all the patterns markets end our of the of uncertainty design remains many our around XXXX, second of

questions. of to diversify can market long-term about product improves. In cautious continue second business summary, they Additionally, occur. I'll and the as we company quarter, market growth proven the are consistent and webinar changes position as actions believe for continuing chain we our but Overall, for further conditions. our swiftly the our growth we to half portfolio up intact, be remains to strategy We XXXX both globally. we through our adapt first the improvement open expand saw supply now

Genevieve Cunningham

is [Operator from Svanberg Instructions] Tore Our first of question Stifel.

Tore Svanberg

where you now, of current are data really know but you downturn? lot downturns. the Michael, verticals Monolithic is a two accelerate My enterprise applications to question historically, share seeing consistency. maybe of or on on gains. have your I revenue, on tends during which there's And And -- share X/X in more some share out gains enviable other questions. gains call can this right Congratulations I Power first focus is

Michael R. Hsing

to -- out if ] downturn. [ just we this an we wait Clearly, have

And we that's industries rest a gained. see up. share of so -- compare XX% like You really the this, the that we

And vertical even compared one. other sockets our We of the [indiscernible] all as so -- MPS still capacity ones, these the we areas last servers competitors. And small and and constraints. as these we all clearly in year many we terms so, the shares. notebooks, of of a other because ago in established it ones the -- auto shares is the -- there. up is gain is is to so or some consumer, said give And the won market And one the even

Now [indiscernible], we have more in capacity near the will now a some growth you future. lot and see

Bernie Blegen

of I environment. one an is launch waiting improved add that opportunities macro if that a been had greenfield could comment we've in And there additional to number have

I end the industrial. that see to addition you'll just Michael in So communications also and gains share referenced, think that markets in both

Tore Svanberg

Great. follow-up in question centers power now enterprise X/X and our data, more power. kind market. power a overall broadly? impacting lower Is just liquid Or to cooling and which lower There's my next-generation And revenues. this is server management about management some sort use due to other specific been there of on chatter of the in techniques content data NPS lately case very for AI of specifically is

Michael R. Hsing

[indiscernible], any transition All the MPS of to all or we -- gains, cooling and okay? grow will And in will gain okay. in markets, MPS format [indiscernible] them. these it other the involve systems systems, and and with powers same those vertical okay? new We those they if

Bernie Blegen

leverage up go content I data into that ability the No, point enterprise technology. we we've higher-value that is the demonstrated, think particularly with as to

power as we'll cooled opportunities, to out, -- also down look into you line the threats. water the not not well. vertical rack represent if far example, For not and be And going

Michael R. Hsing

-- good. answer. good yes, Thats That's

Operator

Our Quinn of next Needham. question is from Bolton

Quinn Bolton

if landscape largest sort could add forward up latest your perhaps customer. macro to noise of wondering on lateral enterprise just challenging to I've Tore's environment. congratulations guess And I your at enterprise in question I on gaining follow share wanted looking thoughts and both then on in a making performance your on you vertical a perhaps power? about competitors I'll address got my I'm data. steady data very then power follow-up. Lots of competitive

Michael R. Hsing

Yes.

capabilities point footprint, power may for XXXX fit have that And the a we mass power densities. peripheral curve watts. the powers. common projected 'XX. and for you CPU And product. remember, we around or [ MPS That be the XXX driver those the XXXX, versus computing couldn't crossover into As power curve it versus That's would ]

that time, XXXX, the with remember out And at said but power, -- If actually pretty learning. to XXXX time wrong. the But a reach even now in limit. -- that. power computation or from to power AI the was densities. And the for CPU everybody And goes -- 'XX projected that GPUs. or and we the that power higher we It's peripheral and turned you is vertical the much power that's be

bring solution verticals. And And want our -- limit. not we And a normalized we market not We the normal board. year like products, -- our do, -- when to So can [indiscernible] all competitors best powers be on that. of We or over best. we reached these be I not come so. that to comment the technologies. okay? so okay, became That's couple and fine. whatever start -- of power we And copy do want peripheral there MPS, the we do on of so lot volumes every last became go last And don't always, it. our as so a the to the well, -- more are net more A ship. And to volumes, far, will competitors,

we growth. we have will our model, very we -- stick are So a MPS diversified

Bernie Blegen

Michael history, design it's or And just important the referenced the generation our of we at our there, front of next in mind think generation next market. GPU or of as technology end of the meaning in consulted, that development opportunities with look when at the this are products. innovation. that won as always integrated, at ASIC I high that TPU cycle, you fact, to we've due to keep the We're we're products were in enabling power look an

So competitive we believe strategically market that that, there influences continue we the will leader. as to on the position yes, want be ourselves but to

Quinn Bolton

a Got quick it. follow-up. Maybe just

volume comments at consensus up power the any Street's Just in sequential then production? go later you Is on something to when the 'XX? in guys X% follow-up, sometime vertical December the in in quarter. look that you modeled have think XXXX. And not estimates, that is may Is until Bernie, that growth volume happens you your

comments any comments you to Your a-seasonal that sort in atypical could far, is but seasonality, I any of QX? Wondering out of know you're I sort think, make typical pattern wondering X% if you to out X%. that about not growth. if down as have guiding that

Michael R. Hsing

the customers, first answer are I'll announced happening vertical vertical they launching part is There's of shipping power of the And our power and the now. multiple products. those are it. we

Bernie Blegen

patterns. to to that exiting as comments that hard translates second up to question signs And standpoint particularly hard pick of there the are there is seasonality, I'll of And prepared predict. the part how But we of into is downturn predict. indicate the a half is that optimism tried are what second you is improved your our ordering from with Yes.

the more between And the QX that profile the than so we've really between QX. of two higher we them, have for as given them as of But QX perhaps. QX. flattish. that a see and guide far But difference We of

Michael R. Hsing

rate. fast We still grow Yes. continue AI see grow very probably and to

Genevieve Cunningham

is of Our next from Oppenheimer. question Rick Schafer

Richard Schafer

My couple guys, of just and congratulations, had I a questions.

The just on in sort I and CPU power. one have since power, a about first point server we're talking one of

a expectation is XX-volt that off transition? far that back xXX we that eventually was there the are xXX in is do in pushing platforms new later move going watts. are the you Just XXX still? And out mean you year expectation? is XXXX, that I is? of maybe where How to that call like to little there so, But due are think Some I an this guess, if made premature.

Michael R. Hsing

Yes.

Okay.

since I we you as a play some we gave And go We can the were join. In again. earlier. you [indiscernible] can were back were outside so can it Now guest market. to invited not mentioned tokens XXXX, door. XXXX XXXX,

transition from power, gain CPU VR new the XX.X have it's significant these amount not we yet. significant CPU a then when we time, so this to will share. And release, and -- That XX, revenue of reflected market And this -- those a and type once shares. into keep will

Richard Schafer

for any transition the comment, to XXX? Michael, And XX-volt on power

Michael R. Hsing

probably don't powers That watts. over the is higher we XXX -- that's --

that that, and came we to to think powers. vertical I supply. were ones traditional rack and a will power still And XX transition other use are using believe, below V ready -- in those which

Richard Schafer

gears material are for of near was just about auto. have Obviously, a open expectations been shifting gains. bit of little little your business term. a this under just as pretty share Got you year. market it. is I auto bit But And a to guys pressure your believe curious that follow-up, what I some your

For ADAS customer. your auto top -- were with China, instance, auto you of also with China, within some top your

believe, some gains, update you if there. share also curious year, later provide significant I I You've could ramping was pretty this any got but

Michael R. Hsing

We yes. go ahead. saw -

Richard Schafer

second I launches know could expectations a just add what it if that's year. going I -- curious expect I couple business. in one still of in didn't to in a the a and if that you benefit half last but auto I OEMs lot year, of there, delayed your those some from lot was this know in are kind had you your you there's know from question, on

Michael R. Hsing

with actually certainly. what gain, Yes, revenue the share We the less expectations. care

care. and have not whatever only particularly, we best, those are if win okay. And Whatever -- not We or [indiscernible]. market to segments. do -- new inventories the all we course, thing will if new we the we're applications these we features. And -- want not that's to Of in the we're is, this the it prepare

upside and produce the makers, a -- to export okay, lot in possible not more. are So far, they U.S., increased we million you see units, other that million the it Chinese somewhere And with the in they last world, to far. so of can but year's million this X they where EV features in, that's we year's or X those And we end tell cars. to

Genevieve Cunningham

Deutsche Bank. Seymore is from question of next Ross Our

Ross Seymore

stability. on Congratulations the

second order given said But a the also engagements, improving, visibility et on the especially that into broader the Just everything question half. et the are your in cetera. I the going bookings understand on rates, the you market. caution, cetera,

good is It's it visibility visibility to reconcile So I'm not not. just but just improving, the bookings trying used the to the as side as improving? be.

Bernie Blegen

doesn't it that consecutive quarters, well seeing when the And about or quarters below you have Sure, of mean stabilized mean Ross. as course they've we strong improvement we're have ordering the X necessarily If we that that been like last can that doesn't of predictive patterns they're patterns. kind over X call X whatever of reflect or ordering normal. as

So right cautiously all we're trying to now optimistic. remain do is

Unknown Executive

focused thing sure making Ross, engagement, win back. only when it's add Tony. call that pipeline difficult market because right, I'd on on it's The would to the design that, the healthy come is probably really is

said, to come pretty As markets pipeline back. diversification take if were as about, win do design we're it's supply choppy. the we chain the when still as set strong talking Bernie having But we well that advantage have

Ross Seymore

the you. I versus the X% guess second the growth you're question for near-term a quarter follow-up, one that in in outliers to total? by as market end guiding my segments Any

Michael R. Hsing

further stuff, Yes? and like okay, ], Outliers -- they I -- see said of still getting we inventory lot we a growth, [ No. okay? try more rates we the lot I -- get to the are all start mean still As a earlier, even okay, means have even go to upside.

Bernie Blegen

we I and for do contribution look enterprise pretty of some our from but end demand sequentially think And see QX, I continuing If the QX between are flattish. rest see the automotive, we markets data. also Yes. profile

Genevieve Cunningham

William question of next Stein Our from Truist. is

William Stein

Congrats on breath the good in fresh results, and of a air. change format. It's thanks for the

Michael R. Hsing

try make to life it and easy make it. And you. you We for it appreciate

William Stein

pursued your end front you you and a manufacturing I'm on us the to follow-up, geographic please. then I on have update progress end? footprint both hoping And try to and diversify back the can

Unknown Executive

up. I'll and Yes, pick start, I'll and then let Bernie Michael

think I to continue of our progress supply make globally. So diversification on we chain

that And as capability it we're planned. right now. I as would think for that them customers is that that I ready so proceeding And ask have for set we think

in the the would So I think based expectation in said on we I what say change so there. past, no

So or anything? Bernie Michael,

Michael R. Hsing

Yes. of demands, all We capacities, built few these really a okay. customer of our There's demand China. them outside

more So capacity. we have

comment. the that's So

Okay.

William Stein

Okay.

topic. different a try me Let

that long a one which converters, of converter but that are product maybe ramping started a period really complex category, I area. get have been into the in then have -- the that data to Some think know other types there's there's very guys dominant modules I much -- I many over these make time. chips, you more each they one. have And many, when supplier, think, One is you is is and

you about recent that If those the talk can helpful to categories, would color. be in growth us newer

Michael R. Hsing

Yes.

Okay.

the first converter -- more we like product we talking less it's design only general there's now answer And X than of or however, X converter. a a And year That -- release family market. that years. few less technology And we're me Let year. okay? a won't Data time. but a a to and the will one Yes, a about. products, developed going meet data products in [indiscernible], in last we start shipping we're than

-- powers all and other called well, all e-commerce e-commerce AI these million, Yes, products are and And okay. that the modules. you're these rack And doing that's okay, the shipping but XXXX. is over The when vertical okay. so multi-chip more in I about these than shipping topic also well actually not million. it's we modules. modules exactly all talk about powers. $XXX And mean $XXX going modules Actually, we're over we're We're these modules. talking these

modules and and -- only. solutions. So of sell our will in I tire past, -- a monetize I silicon our these want I power second sales to the leverage say know-how said leverage I selling I'm

Bernie Blegen

flexibility And module think into a architecture flexible is sort the [ customer the or or build So the end we of delivering just that. however and is between to we've we modules hit one on MPS ] have application, their lot that offer of do strategic the of our silicon that I to competitors differentiators can of most our a dye it wants silicon whether

Genevieve Cunningham

Matt of Cowen. Our Ramsay next question from is

Matthew Ramsay

the I guys, is particular, providers maybe transitions your driving my a that guess for talk socket first generational per in AI I the company little progression the these in there. as to are bit about platforms question. make that wanted business, see you silicon content you

have in bit confusion you just AI just different slightly of the different have not but content. others. I product, little that think there to in there's but launching a is expect guy they're And other launching obviously at X NVIDIA big primary ones not X I customers AI,

Bernie, of Michael, about just So you're on content what are if to generally, content the you from generation you sort see a we could forward? generation seeing talk increases perspective, what there? move blended might that And variables maybe as

Michael R. Hsing

can't power our different I well, all X,XXX general as are more than don't AI we have They they they use they model. power. a watt use for IC these a over -- I the, -- in have of as use watt sell peripheral how different -- chipping know different don't We talk powers have long they XXX how -- they verticals I and and it. providers about -- customers model. some know, variety a Yes. products. They we okay, mean, GPU is

how from per modules. So we rough know CPUs, these we modules have it. And ideas, but don't are exactly many

Bernie Blegen

even the optical. And to for content-rich and addition It your on up memory, also example, us. processor to a point, Yes. for -- follow in process -- second very CPU it's environment includes

early think I So limits availability. on it's put content to really too

new order areas in In fact, we're finding deploy. to

Michael R. Hsing

a And growth just is opticals, side So growth. even the from really the to this from period the far, demand period. the powers. want GPU, we CPU All handle from memory

Matthew Ramsay

sourcing there Bernie, the here. segments going variables where about I margin ask gross step a puts in know that. there my I to guess, there's know up are takes a a That's comes you're there's what conversations. trajectory, between of of you're from, supply enterprise I in variables back of a lot and are big kind XX% also ramping data your bit and know moving range. it. Got little lot parts. I here? of in it was around kind and There's and lot customers are helpful. I that mix

I could of margin the a drive above higher? back we are the -- And XX% would slightly what would So the what floor relative kind range? be or mean, that at in variables

Bernie Blegen

is This Sure. pretty question. simple a

non-GAAP change in we've as here, rate know, a So is XX.X%. XX%. the last the target up able we as for during well limit. XX% of a range of now, is really, of post that We quarters that the of you And maintained business. to the pandemic enable our guidance the and to stimulus as margin right what was couple between us go mix will demonstrated go higher end that And to our that

Genevieve Cunningham

next Fargo. of is question Wells from Our Gary Mobley

Gary Mobley

expectations. and whole analog to touch interesting on you being chip thank don't leader. Congrats, the know Most clearly, and aggressive price. I questions market lot of for pricing but have persistently trends. been on I they're the answered, wanted seen you But a asked with overlap

segments to And groups So for of broad affected about as maybe environment set speak pricing that might speak the that? generally can the different product or just you your be products. business by if well,

Michael R. Hsing

Tony, to? you want

Unknown Executive

I'll trying is on because you've to in start innovation we're We're where probably be might related in, a segments Bernie really what for next-generation less platforms and that I heard and work pricing us than advantage the then of our differentiated work on or we mainstream. think and volume we let susceptible lead the have right? to us, past more technology. are the some on to that jump from

any way, our pricing there of right now. a in outlook. So that But us say and see not -- not kind in in you us I do can know there's impacting I'd lots way out of now, right that's reports impacting about that's

more add some so on that. will And Bernie

Bernie Blegen

both that's capacity driving market end we've of additional the China company. American regardless large additional of always cost opportunity as in very, as side, And very a fundamentally, well coming on North part the issue capacity Yes. on with prices the And that's competitive been and...

Michael R. Hsing

is, you drive The asked, the should give bit cost cost always you what futures. I okay? regardless we we have of margin And a the always down. to than of more little form -- it's

-- have market for truly the to not the and level. of We the The question yet and down a that And in And again. now. And we things next the going we in [indiscernible] And so that of asked in all this performing near-term design the of initial of the down to only there's now activities we are in all on customers. the phase last far, we AI all see don't different cars sensors, all applications. years. in trickle in lot these end recently, lot trickle building a see couple kind year, see year, beginning saw nobody of and phones requested all our from the even kind the a is more. And product these ideas. the -- of

the drive definitely will those products margin that up. So -- will gross drive

Gary Mobley

think Last the more above to it to normalized quarter, a you think characterized being I it level? been able that you down your inventory what you inventory the bit little target is -- distribution level, as characterized a work I distribution Have now? of

Bernie Blegen

Sure.

inventory to sort our of two at So there's right look channel ways now.

to with really of regard markets, we're But coming then to that that, keep down If inventory AI we've is elevated the so trying to seen basically other end all narrow on keep supply demand. available that you nicely. it chain, the it

Genevieve Cunningham

Stifel. Svanberg Tore from of is question next Our

Tore Svanberg

lowest I is had two AI. But has percentage talk you about I follow-ups. But by quick I'm intrigued that's when share just Michael, surprising the the talking some about in consumer been. the I is segment, there this ever did think getting everyone downturn. know

to consumer applications on start back particular we eye keep an that in grow as the area? you So should any

Michael R. Hsing

Yes.

we can yes, That's I a want faster probably again, less this to that's fell see these than that's of again. But okay. But notebook to said during audio the are a the into competitors notebook but when growth. of question, diversified Maybe, Okay. we I lot good consumers consumer is looking [indiscernible]. -- you looking forward, And have unhealthy other can low-margin product. care segment. okay. lot the And grow a -- did about growth, it period, earlier we cost. announced that -- about market make market related an in our we notebook price hand, neglect less talk mean, We lower on the product. is you effect, this have percentage. you And at Tony, revenues A products can

Unknown Executive

point quarter technology area. go Michael that an audio some a and participate last their I'll what saw scale to you to go in technology And really market an at after really opportunity to high-end can talk and we certainly lot the we're [indiscernible] I'd opportunity but and excise acquisition. traction offered more, on announced looked in seeing and MPS and back customers,

So applications, innovation. a continue base sort our with we'll value shots our got of we I consumers wide to can really where pick think and potential of add

Michael R. Hsing

tell bundle. I in MPS a Yes. can to as you, QX ship we together and will [indiscernible] and but start

Tore Svanberg

quarter. Yes. actually that sequentially is Everything course, networks. of hearing, that, is prepared That's communications. you this said driven exciting. was we're It In remarks, by very up still weak. that last market on growth your And that, that my is question was

what's this just starting that Are turning? gains? actually is So Or share can little there? elaborate to market you pure a on see going bit you

Bernie Blegen

market. a remains flattish It

I or that outlook think will it full But up probably flat go in down. infrastructure that to with quarter-by-quarter, the year we're be going XX. is see

Michael R. Hsing

higher speed lot on speed wins in the have And all will betting and communication XGs from it segments. a will of we're or market, trigger or I'm other speed of Wi-Fi, that. the these trickle in main the ready in for down high down we design

Tore Svanberg

sector comm revive? So AI down. happens, you Michael, is what as will that trickle will the And mean

Michael R. Hsing

right. has brainer. no That's to. That's it Yes,

Genevieve Cunningham

of is James. Fairbanks Our Melissa question from Raymond last

Melissa Dailey Fairbanks

a -- love I I love I no-brainer. Michael, mean that.

Michael R. Hsing

it. brain even Yes, talk I about to my don't

Melissa Dailey Fairbanks

model I'm accordingly. adjusting my

we're data. for I where year know know I auto focused year comfortable on guiding from XXXX. earlier, auto would So you coming to feel model like up you on the would I to addressed understand I the better, like enterprise here? revenue builds is guys and know model everyone But like

Bernie Blegen

Yes.

lot new with one. companies. that take the we is exposure me EV let have So A content the of with

OEMs touched And Michael relates as internal those tend as or ADAS where combustion. so installed it relates as it to as have be good Chinese not we a And on autonomous to base, driving. the particularly the seasonally particularly driven opportunity, to

some don't the we're for quarter-by-quarter -- occur not year, sequential seeing improvement to in we that necessarily during that while So used we're automotive looking QX. stick with sales hockey

Genevieve Cunningham

like I to the would now webinar to over Bernie. turn back

Bernie Blegen

I'd for to So us which you. during will late call, talking on nice this joining in likely thank all call conference Have July. quarter like you to you conference second and look forward again to Thank be the day. a

Monolithic Power Systems (MPWR) 1 May 242024 Q1 Earnings call transcript