MPWR Q3 2025 Earnings: Automotive & Computing Segments Drive 19% Revenue Growth

Monolithic Power Systems (MPWR), a key player in the high-performance power electronics space, just dropped its third-quarter financial results for 2025. As a "fabless" semiconductor company, MPWR designs its chips but outsources the manufacturing, allowing it to focus on innovation in energy-efficient power solutions. Let's peel back the layers of their latest 10-Q filing to see how the company is performing.

For the third quarter of 2025, MPWR reported strong top-line growth, with revenue hitting $737.2 million, an 18.9% jump from the $620.1 million recorded in the same quarter last year. This growth trickled down to the bottom line, with net income rising to $178.3 million from $144.4 million year-over-year.

To better visualize how the company's revenue translates into profit, the following flow diagram breaks down the quarterly income statement.

The company's gross margin, a crucial measure of profitability in the semiconductor industry, saw a slight dip to 55.1% from 55.4% a year ago. The company attributed this minor compression to a changing "product mix," a common occurrence as sales shift between different products with varying profitability.

Shifting Gears in Revenue Growth

A closer look at MPWR's revenue by end market reveals a fascinating story of diversification and shifting momentum. While all segments grew, two stood out as the primary growth engines this quarter:

• Automotive: This segment was the star performer, surging 36.1% year-over-year to $151.5 million. The growth was fueled by strong demand for power solutions in advanced driver assistance systems (ADAS), in-car infotainment, and motion control—all key areas in modern vehicles.
• Storage and Computing: This division also posted impressive results, growing 29.6% to $186.6 million, largely thanks to higher sales for storage applications.

Meanwhile, the Enterprise Data segment, traditionally a major contributor, grew by a more modest 3.8% to $191.5 million. While it remains the largest segment by revenue, its slower growth rate contrasts sharply with the nine-month trend, where it actually saw a 10.2% decline compared to the same period in 2024. This highlights a strategic pivot in MPWR's growth drivers toward the automotive and computing sectors.

Prudent Spending and Strong Liquidity

As revenue grew, so did operating expenses. Research & Development (R&D) costs increased to $98.2 million, and Selling, General & Administrative (SG&A) expenses rose to $112.9 million. However, as a percentage of revenue, these costs remained well-managed, indicating disciplined spending even as the company scales.

MPWR maintains a robust balance sheet. As of September 30, 2025, the company held nearly $1.27 billion in cash, cash equivalents, and short-term investments. This strong liquidity position supports continued R&D investment and allows for shareholder returns. On that front, the company declared a quarterly dividend of $1.56 per share and has a new $500 million stock repurchase program authorized in February 2025, with $495.3 million still available.

Looking Ahead

Monolithic Power Systems' Q3 results paint a picture of a company successfully navigating the cyclical semiconductor industry. The impressive growth in its Automotive and Storage & Computing segments demonstrates its ability to capitalize on powerful secular trends.

The company's significant purchase commitments, totaling nearly $500 million, underscore the importance of securing manufacturing capacity in a competitive landscape. With a strong cash position and a diversified product portfolio, MPWR appears well-equipped to continue its growth trajectory, though investors will be keenly watching whether its Enterprise Data segment can rebound and contribute more meaningfully to its expansion.