Monolithic Power Systems (MPWR) Tops Q3 EPS by 2c, Beats on Revenues; Q4 Revenues Guidance Above Consensus

Monolithic Power Systems (NASDAQ: MPWR) reported Q3 EPS of $0.84, $0.02 better than the analyst estimate of $0.82. Revenue for the quarter came in at $128.9 million versus the consensus estimate of $126.16 million.

Business Outlook

The following are MPS’ financial targets for the fourth quarter ending December 31, 2017:

• Revenue in the range of $123.0 million to $129.0 million.
• GAAP gross margin between 54.4% and 55.4%. Non-GAAP (1) gross margin between 55.2% and 56.2%, which excludes an estimated impact of stock-based compensation expenses of 0.4% and amortization of acquisition-related intangible assets of 0.4%.
• GAAP research and development (“R&D”) and selling, general and administrative (“SG&A”) expenses between $44.0 million and $48.0 million. Non-GAAP (1) R&D and SG&A expenses between $31.5 million and $33.5 million, which excludes an estimate of stock-based compensation expenses in the range of $12.5 million to $14.5 million.
• Total stock-based compensation expense of $13.0 million to $15.0 million.
• Litigation expenses of $250,000 to $350,000.
• Interest and other income, net, of $600,000 to $700,000 before foreign exchange gains or losses.
• Fully diluted shares outstanding between 43.7 million and 44.7 million before shares buybacks.

GUIDANCE:

Monolithic Power Systems sees Q4 2017 revenue of $123-129 million, versus the consensus of $122.94 million.

Highlights

• Revenue was $128.9 million, a 14.9% increase from $112.2 million for the quarter ended June 30, 2017 and a 21.1% increase from $106.5 million for the quarter ended September 30, 2016.
• GAAP gross margin was 55.0%, compared with 54.4% for the quarter ended September 30, 2016.
• Non-GAAP (1) gross margin was 55.7%, excluding the impact of $0.5 million for stock-based compensation expense and $0.5 million for the amortization of acquisition-related intangible assets, compared with 55.3% for the quarter ended September 30, 2016, excluding the impact of $0.4 million for stock-based compensation expense and $0.5 million for the amortization of acquisition-related intangible assets.
• GAAP operating expenses were $47.0 million, compared with $42.9 million for the quarter ended September 30, 2016.
• Non-GAAP (1) operating expenses were $32.9 million, excluding $13.5 million for stock-based compensation expense and $0.6 million for deferred compensation plan expense, compared with $29.4 million, excluding $13.1 million for stock-based compensation expense and $0.4 million for deferred compensation plan expense, for the quarter ended September 30, 2016.
• GAAP operating income was $23.8 million, compared with $15.0 million for the quarter ended September 30, 2016.
• Non-GAAP (1) operating income was $38.9 million, excluding $14.0 million for stock-based compensation expense, $0.5 million for the amortization of acquisition-related intangible assets and $0.6 million for deferred compensation plan expense, compared with $29.4 million, excluding $13.5 million for stock-based compensation expense, $0.5 million for the amortization of acquisition-related intangible assets and $0.4 million for deferred compensation plan expense, for the quarter ended September 30, 2016.
• GAAP interest and other income, net was $1.3 million, compared with $0.8 million for the quarter ended September 30, 2016.
• Non-GAAP (1) interest and other income, net was $0.6 million, excluding $0.7 million for deferred compensation plan income, compared with $0.3 million, excluding $0.5 million for deferred compensation plan income, for the quarter ended September 30, 2016.
• GAAP net income was $23.6 million and GAAP earnings per share were $0.54 per diluted share. Comparatively, GAAP net income was $14.4 million and GAAP earnings per share were $0.34 per diluted share for the quarter ended September 30, 2016.
• Non-GAAP (1) net income was $36.6 million and non-GAAP earnings per share were $0.84 per diluted share, excluding stock-based compensation expense, amortization of acquisition-related intangible assets, net deferred compensation plan income and related tax effects, compared with non-GAAP net income of $27.5 million and non-GAAP earnings per share of $0.66 per diluted share, excluding stock-based compensation income, amortization of acquisition-related intangible assets, net deferred compensation plan income and related tax effects, for the quarter ended September 30, 2016.

For earnings history and earnings-related data on Monolithic Power Systems (MPWR) click here.

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