MPWR - Earnings call transcript Q3 2024 | Monolithic Power Systems, Inc.

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Genevieve Cunningham

Welcome, everyone, to the MPS Third 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, Vice President of Finance.

Earlier today, along with our earnings announcement, MPS released a written commentary on the results of our operations. Both of these documents can be found on our website.

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

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

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

Bernie Blegen

million, quarter in the Thanks, XX% our Gen. quarterly 'XX revenue to XX% Good of higher revenue than of earnings quarter $XXX.X QX higher the in XXXX and achieved than call. and second afternoon, XXXX. welcome MPS third of record revenue

our as markets ordering Our strength design quarter reflected the prior the wins of benefited secured additionally and across strategy diversified ramps trends initial in from performance associated market revenue with improved experienced most during years. we end

MPS the the router revenue highest notebooks. up focus demand to quality. Let of strength the XX% with was product in on me problems DDRX innovation, XXXX solutions. and for lighting, most Compute highlights. SSD few optical, Communication infotainment, controls. and ramps solving sequentially prior from networking sequentially level quarter, ADAS challenging maintaining and and Wi-Fi, body reflecting up improvements for was revenue XX% continues Storage call revenue a XX% Automotive our on and memory out up QX was new of and customers'

they capture supply stability our as expand and market us will In adapt supply chain and addition, we maintain growth, allow diversify changes chain, to global occur. future which swiftly to continue to

for chip-only open supplier growth solutions webinar long-term up I'll intact from a now provider. remains transformation the semiconductor full-service to proven being our questions. we strategy as continue a silicon-based Our

Genevieve Cunningham

first question Schafer Our of Instructions] [Operator Bernie. is Oppenheimer. Rick you, Thank from

Richard Schafer

Congrats, if a I've X-part guys. guess question, I got I could.

It was sustained know if in as look you more then looks into I onetime first Is that on into shift The that reflect like Data. Does that about XX% segment sequentially. in nature? on a we down Enterprise it 'XX? some that. could XQ color give and is don't

second it And a then my listed -- like few you Automotive, up my sequentially. materially I of Industrial, were Bernie. them, of all part Consumer, question, mean, and Comms, like looked they pretty look auto

lagging would last the that characterize feel the is like those you segments, sort you those Do -- few have quarters? of So how which made been have turn?

Bernie Blegen

Sure, Rick. This Bernie. is

me start that with customers' about. One a QX. ordering about Let And we is from don't -- Sequentially, the control Data. things that we've X.X% of patterns. down we couple our talked were that Enterprise

different relates quarter, past to it the as a So see we trend the X quarters. than did in ordering we'd observed current of each

introduced on as to far as that, the competitor second to been fact the require as very then customers share. as a or open be And far chain that's our we've supply that security for going looking third ahead, about

about a been there's so and we've And issues lot managing. that here we're talking of that

view, We that's But sort to company on couple have one try particular a a call don't but the out of that MPS' point in the may the market's and end total. And diversity, strength comments in Michael very important view. is is results. a to longer-term we of try short-term deliver

Michael R. Hsing

growing. AI the we market at mean you that last or requirements Yes. transcript growing you if market is and the from about knows the is I big talked everybody year, that -- the probably is look the

as what the we the the will Bernie speed -- solution talk their and the or fulfill needs okay? applications. development third also to this best that about -- customers will best so And initially talk solutions also and service, the -- take be the these have always happen, and And we take we when will And know, a in -- supplier of And second in bigger. shares, okay, happened we MPS solutions And in next again, last quarters. market very join the again, in There be a -- year, big is earlier. last -- growing always fast. the or large couple is market and that's and market best said don't is to the will occupied It too segment. of see said, why this the okay? we on pretty And years, will we fourth this the

said, one small, still ones SoC the up And hyperscales they diversity. And and own Bernie of other emphasize AI always market ramping. past, other And yet ramping like the and or an tensor will company. be supply those next MPS, have hasn't not processors. company, And like the okay? segments ramped in their known started companies ones is their be computing TPUs, and as we're other we cloud the call that the power quarters, SoCs to side own it We we few in really

Bernie Blegen

I for waiting from more of onetime design And a if broader step-up believe, whether trend a the And the event. then Automotive a as you think a to we a line question we Rick, in is and been pipeline it or was QX opportunity. not far step-up or observed this, the where wins right have had that of as was QX lot

expected X product the quarters. next to next in do number we or X discussion ramps specific into not the the but And are so that the that come the believe stream into -- us, us come market, broader a specific to about of to

Michael R. Hsing

to to there's start lot rejuvenate, products see know. okay? a will okay, you care? we said be as or Will new And design don't when many revenue so? ago, we and And plus/minus years these wins. year a again, it take date. Well, of We ramp all Do off, what that's the we the now in greenfield don't,

Tony Balow

just about that saw more maybe that the is those body revenue. talking strength comment heard start now including across But in sign we've one really for generating Automotive strength we all Rick about previously ADAS. been won of in that sockets was segments, traditionally, Bernie kind infotainment, controls, we then of what you had And a talk

So broad-based within talked than it's Automotive more maybe we about previously.

Richard Schafer

I'm point guys or are maybe realize know Orin, power X do things on believe, auto that -- And specifically, you, and is -- with curious, did well pickup did right there. last broad-based as DRIVE guys. I I specific that win-driven on the it's really I design you a mean, year all basically I NVIDIA with But and this

how know about like China content now auto there? you for specifically talk if a didn't of and I could give guys sort So as what a is segment? sense of of you China maybe auto your portion auto trends big And overall look

Michael R. Hsing

little now EV a like And in off Well, okay? is infotainments adopted right And widely direction And and in a bit booming. And China. type booming business they we're new lot and again, of okay? requirements. is ADAS there's and also again, taper the infotainments the again, China's -- looks we're going the of the

see see is -- ramping a other we where the U.S. it products a we China. of will portion also, lot see And from in that's we the bigger Germany and of ADAS, grow and so other than and And

Genevieve Cunningham

Svanberg is question Tore Stifel. from of next Our

Tore Svanberg

XXXX. had very year. follow to quarters, of half took how business ramps talked record I expect Congratulations up about X wanted in many should Obviously, revenue. know that I that But this just QX, Enterprise December on the for perform? we specifically strong to Data. you a first quarter. quarter? the new about It how business we into product think And sort on breather of But you Michael, should the

Michael R. Hsing

this going And -- as any it -- we the to was we us in the -- don't was just forecast us a we quarters given We again, As can't it's we know, that far in ago, fulfill demand. as probably, I forecast. tell. few QX, really and don't don't lose shares. same And

we last quarters. So MNO the couple [ in built ] we'll what that's have of for --

Bernie Blegen

somewhere and Enterprise as the Data was to provided plus Yes. And outlook I that really, think the low guidance digits. we the look single in we

our are again, So there. the performance drives ordering patterns really customers' what

Tore Svanberg

this one to fair. very And me Communications. was that's No, the quarter big surprise

strongest was think growth quarter. your segment this I it

Could optical color maybe you new there? bit the there that segments it Wi-Fi, are mean, what's on does optical I just give networking. more going sound us you have especially some a little penetrating, on highlighted You you side. like

Michael R. Hsing

it. again, these Well, your across a data into to it designs. That's new start the turn up, what reference lot ramping Wi-Fi all is so a that's MPS the -- of communications revenue not Other now. And have format portion optical that's a projects all And see is that's we But okay? converter continent, and within is of centers, data of reps, the data one the okay? within them.

Bernie Blegen

in remains outlook new So for, solid. for first quarter you 'XX. a half very Generally, initial tends we specifically I after think Communications stocking it of see But with have a revenue sustainable the off ramp, to tail the in growth quarter. through a the MPS again, big

Genevieve Cunningham

is question of from next Cowen. Our Joshua Buchalter

Joshua Buchalter

you to question, mentioned sourcing. patterns those guess are the factors Or diversifying Enterprise accelerator the think are the impact and maybe near market? suppliers, in ramping? newer order Data platforms X of one I the term? think AI second tied you being you could in is response on of order had as we to seeing sort drove I flattening And in about bigger Rick's their that customers of that more rank your currently which that are this particular, out this platforms already

Bernie Blegen

Michael change. QX we're position think offered see I QX that expecting not QX, to So share in and

trying opportunities, these a ship of acknowledge TPUs, will begin And leader referred to then time, the which that as AI. new to So all just of see that, is layering market probably to a we the really in late... being was AI over Michael that function

Michael R. Hsing

name, also, And TPU name. -- a the TPU remember, Google's trademark is the maybe well,

tensor me, to So it's a processor.

Bernie Blegen

processor. Tensor

Michael R. Hsing

SoCs, customers of the ago. products really -- in Yes, mean. refer many We we And And as see engaged in those last and years to have you ramp is we some many it's quarter. what that's of all with start this it's design. our all we you many actually, --

Joshua Buchalter

got cards. multiple these And I sockets content of you've on different accelerator realize in many

opportunity draw Or next is oversimplify about some -- try so we can fine-tune of models how new power into think our accelerator rules content of give of in we about as to your helpful platforms, relationship question actual my to to going And any we year? you to us think it. thumbs processors? should the other try AI maybe as these But

Michael R. Hsing

revenue most get Well, stuff, -- so believe And believe, the solution The we that our the the is as and the portion grow. don't efficient. bigger, our of I best power market don't and is rest we will if you products, our of care.

Just let happen. it

the numbers itself. speak Let

Genevieve Cunningham

is from question of Wolfe. next Our Caso Chris

Christopher Caso

at your quarter, not basis. for a look we I sequential as the guidance the guess changing on first question, a lot December

think sequentially as you will that of the kind average as of you March? seasonality December? single that would different digits low quarter? that the in as be Enterprise given does that, Data the shrinking we in you following grown I customer about a December. out there as affect growing to And look mentioned from into revenue, anything or else different should Data into has the Enterprise thinking go be with then up call that Anything percentage Is mix respect we March

Bernie Blegen

Sure.

mid-single If have some more don't change digits. markets than end we minus it's of end currently, you plus or that you're believe by to looking But any by QX interesting, going at are the market, seasonality.

that into a So 'XX, have down it's momentum don't been don't view look And I very for about we're currently. lot But beyond narrow to but guide companies, we a range when QX. going we seasonally quarter into talking has a on obviously, carried the that's of out what like very, look it there.

Michael R. Hsing

essentially, we don't don't care. We -- really

those as products So customers. and customers, project we're design, start have our take happen, its we clear the own we our cost. when to a with ramps have they -- views as let let don't and design in long And those a it

speak itself. Let the numbers

Christopher Caso

Okay.

been that But the Data share guess area next year, traditional what while. seeing improve. waiting of some -- you go some week. one XXXX? you've the part I Enterprise as Can guys for Enterprise on you that into the Data on of vendors have your a business a to give a news for favorable least of in this server, part look We as that's As heard been of little better the you market you're follow-up, an other at of the content, into business from view kind CPU you

Michael R. Hsing

suppliers version, quarter a or ] as and it's [ this do And Yes, in Rapid In prove we [ many the supplier the of In Sapphire ] pick we're the (sic) question. picking and with see something, many -- VRXXs, up Sapphire serendipity we good growth. we Sapphire the the volumes a of ago, will yes, Sapphire it, shortages, this Rapids said years one up. that. we this started or will okay, significant VRXXs, And significant XX.X, by be (sic) shares. we big Rapid in Rapids in

Tony Balow

just maybe like ramp, Enterprise the they'll memory well. just a you some DDRX be solutions itself, right, and And beyond see other segment through those Data segments continue of the other as as pull tailwind in to

Genevieve Cunningham

next Our Stein of question William from Truist. is

William Stein

home has be if the market. talk solutions end come from I than next involved in sometimes were that years some know available things interesting sort market idiosyncratic can some to market. about I time, understand for and some Michael, focus for us the for was your tinkering of I in the know the you market perhaps recently. more growth might you couple company. searching that more you in the in sort often end And And what of are the of in automation effective in famously been company Automotive drivers wonder more I the on

Michael R. Hsing

Yes.

Okay.

MPS, As that have you so can thousands of a few in know, products.

fan window lighting, we making window So are controls, everything in be and and all we in And box we're actuators. in now, and box. we in is are sell including just the with is models door while as a softwares, we shades actuators, and thermostat, a one putting one also the putting those these MCU in use. MCU are it. we're other we are and the security, of open and And Everything the kit. of and The can brain key we're in ease

I building segment market think this automations. will change for the

William Stein

There's you That's follow-up, your now. relatively MCUs as recently. you entered helpful. category a that mentioned Maybe another

as but it data You're not for converters. really much, known

maybe a end results product talk that good medical for I that initial in think you in hired team area, and you market. please? Can some traction product, in very you had the category, about

Michael R. Hsing

in segment. is growing still The We that revenue are small.

are life industrial is As segment the last product as those forever. you as medical win XX, they okay? couple of side, more product, quarters, as we some have fact, in as long, well XX have product years, cycles And all a family matter we we'll shares in in the design more next okay? standard gain the cycle And market know, -- rolling segment. and of these out, of And this side also, will very will some

Genevieve Cunningham

Ross from of Deutsche is question next Seymore Our Bank.

Ross Seymore

Data I non-Enterprise want side. to to back go the

are I for think my wins, up ton a of design recovery But XX%, by bookings of you're know about to just ramp, was the on seems peers that sequentially. them kind XX% with I ramp. just of have magnitude guys waiting other them are and be seeing. at it improving to commentary math, you diversity it that very of odds the muted the and so the many that

is on conditions cyclical think you do Power-specific that? explain, Monolithic color are this just sort getting dynamic? very Any you of could a So better? Or

Bernie Blegen

we're bit both. Ross, think, of a little somebody... I Is experiencing

Michael R. Hsing

mute, can Okay, it. yes? you mute can Ross, you

Bernie Blegen

of in received we that in memory lot now, profile new market. coming previous particularly a And of was Ross, an the between what they're difference what we we're consistent quarter improvements quarter we But the and -- the current Communications, market asking also, saw current the But trend. overall or seeing in are to patterns. design particularly specific from to let then So we me ordering Automotive. wins back. And improvement in market. you're in saw not go growth the The in secured us saw our in actually quarter, revenue a that opportunities years previous in the

Michael R. Hsing

see Well, across matter all fact, the we as board. it of a

Bernie Blegen

Yes.

Michael R. Hsing

power. board. Other than AI the across All

Ross Seymore

my side been And it's AI market shortages, you to has the I a or how over to -- guess, of lot otherwise, last the are as follow-up, cetera. whether couple address in supply the years et added of

going increase more evidence mentioned of any that? to that it's is guys holistic a power pressure you you Are fear pressure. competition pricing in just whether that pricing more earlier in or And seeing have people so is AI a ensue, aggregate

Michael R. Hsing

also That's to -- the played. Well, some the our the competitors, in to get in lower to the not game the market Chinese they want and socket. we where price suppliers, always get of

they lot those our don't so change. And Don't socket. even of customers, a they change don't --

one quickly. those a swap into -- volumes go can products lot shipments Our and diversity, in particular out And lot one is applications. of kind of emphasize a things also, and we of so and not segment a

examples, we AI. provide For like And the values. will

choose. Our customers value And other is we all products, the our let highest performance. the

next the history revenue as growing the into So years, the see the in we of long will design growing operate first next principles, And especially now it, way. sign revenue we the and all us, And the and couple of these all as see we history see And years, these same just grow. product telling we same turn and keep the now. will showed. win

Genevieve Cunningham

of Our is from Quinn next Needham. Bolton question

Quinn Bolton

had was what I provide I think June quarter? disclosure, And off, XX% Q be but if time And for the sorry, customer. first yet, an going guys guess plus to I'm you if to XX% June XX-Q, any be you start that a customer? know it that's in first, I you your percent in if so, customers ever, disclosed filed revenue able haven't wondering, of September ongoing you to the -- would us was the

Bernie Blegen

certain the put the by we direct that. to the So referencing and to is you're hits guidelines, -- when customer exposure need And revenue threshold, reference to a SEC a Quinn, customer what indirect. basically according

Michael R. Hsing

we're name out a putting there. never But

Bernie Blegen

We no. No, do not.

Michael R. Hsing

customer can right? so So is one have there. Is bigger time, X? Bernie we -- only the numbers This about have check than still that Yes. will XX%,

Bernie Blegen

Yes.

Michael R. Hsing

in the customers above Two XX%.

Quinn Bolton

in the get Okay. the percentages Q? And we'll

Bernie Blegen

X. or one It's

Michael R. Hsing

check. so I'll believe again, or Yes, it's And maybe it's Bernie check. can think one I one. I X,

Bernie Blegen

No, it's one.

Michael R. Hsing

It's in will don't big. numbers. only one. Two I the be believe very

Bernie Blegen

We know.

Michael R. Hsing

Yes.

Quinn Bolton

Okay.

don't to yet. The second know question to you XXXX is, I guide want

Michael R. Hsing

Tony, a second. you... on could Hold

Tony Balow

that? Check

Michael R. Hsing

Could Yes. at So one I than X? you or check one X%. Is that? is less think the it second

Tony Balow

to check seconds, Yes, me I'll back it. you. XX Give get I'll so

Michael R. Hsing

yes. Yes,

-- are clear. record. this it be okay, we So let's had the make to Go ahead. on then And

Okay.

Quinn Bolton

of while Data looking the to growth I my not is Street specific question to for out know of a give second you're enter some guidance segment. I lots existing we're designs sort start pressure Maybe but Enterprise market, was strong the waiting pretty competition cross some year. that the in ASIC to XXXX, also pricing that at continued of talked customers, additional about expecting but know Yes. you've for terms going next Tony, currents to you ramp in have

of -- you've think is almost to business mentioned? crystal of a we you given reasonable cross sort And is that the $X.X given wondering looking that ball, do that just a kind tempering hit expectations for Or some expectation? should Do keep if currents Street kind be it The one quarter you to that for is of in revenue. that billion segment, at just of want time? your

Michael R. Hsing

very And not significant that. a server okay, -- in tell when reached market, this regular do be now at equilibrium that. what will market player let's can say -- I turn when Yes. call it, a confidently, be AI a you And like we yet. will has you market become this this into MPS --

Bernie Blegen

run Not rate. a

Michael R. Hsing

starts when this Yes. ramping ramping, up. it still -- kind is is lumpy. segment when And ramping This of it is

this forever can't the don't couple You and like the quarter couple X -- first years next. first and this going first of last keep don't of year's You -- -- since you the see quarters in see the okay? this,

years, I have questions into ramping So design customers. those We'll will more -- for we turn revenues. turn clearly, to to lot said your it those earlier, will design. to we answer next start a

Tony Balow

disty, back, to relative call just circle we'll out Michael, X. to

we'll call direct, out For one.

Bernie Blegen

Okay. direct customer, That's a not disty? a

Tony Balow

it one direct. call as multiple disties call we'll out So We'll than greater XX%.

Michael R. Hsing

X%. -- is the we disty, less we all All it's is, okay, I the definitely, that's because customer -- next than creation, about the below it's them, all -- The only design the One one well, reporting. the in Yes. believe, never is count -- exposures end one. for reporting,

Tony Balow

Yes.

Genevieve Cunningham

question next Tore from Our of Svanberg Stifel. is

Tore Svanberg

similar power. to more a but question Quinn, vertical had about I thinking

over low. So year, next Enterprise base could I that's Data see we is assume the contribution And as to vertical this quite does case, million. basically vertical the if few power this than $XXX power, market the more market years? transition even still the from accelerate

Michael R. Hsing

Absolutely.

Bernie Blegen

Yes.

Michael R. Hsing

years, next Yes. quarters. in next few Not few the

said, that module segments are As playing shipping for speaking, in good power market benefit these these are we power. will the And all we those since really all these products I'm we volumes. vertical technology, And and in as XXXX. capabilities, now manufacturing

Genevieve Cunningham

Our is Bank. Ross of from question next Deutsche Seymore

Ross Seymore

me have letting times past. for here. little you snuck in many laughed get know, Michael, this Thanks a I in that and in follow-up I about Inventory. like the

Michael R. Hsing

my That's favorite.

Ross Seymore

inventory by came sequential There that down you my growth, this Was external bit looking ago, go. did do? channel of initial lean? a In lot a inventory little at are XX% you channel instance, days-wise. I inventory internal some in stayed How the What that? question to fill? Or has that referred

Bernie Blegen

lean. staying channel is the No,

fact, in In went total the our days quarter. down

Michael R. Hsing

not we is We build to always, Ross, build it's you're with as to And this up. -- you we MPS expert -- want demand. of synced and okay, see inventory market inventory. the Well, our want the not And good.

the level of is very run it's is now inventory that a don't opposite market the high, demand check into And you the low. And is it's levels, at we inventory to so going our that issue. market we're demand. uncomfortable the MPS inventory But levels. think now the If for shortage

Ross Seymore

essentially? you. down, guess said days just fell, total just you Bernie, inventory I Got went mean channel And total when clarify, you to actually inventory

Bernie Blegen

Channel inventory, yes.

Michael R. Hsing

low. is channel inventory Yes, also

Bernie Blegen

Yes.

Genevieve Cunningham

concludes back now our to Bernie. the Q&A This to I now would webinar turn over like session.

Bernie Blegen

joining all is you forward February. you. thank in to nice conference a our again us this Thank call early for Thank to conference look likely call, in Have you be you. day. to I'd talking which quarter and for like to fourth

Monolithic Power Systems (MPWR) 30 Oct 242024 Q3 Earnings call transcript