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Monolithic Power Systems reported Q3 FY2026 revenue of $1.2 billion, up 63.1% from $737.2 million a year earlier and above the consensus. Adjusted earnings per share of $8.19 also exceeded the consensus estimate of $7.80; diluted EPS was $5.51, compared with $3.71 a year earlier.
In its filing, MPS attributed the revenue increase primarily to demand in enterprise data, communications and automotive, as well as a greater mix of power solutions, which have higher average selling prices than discrete chips. Enterprise data revenue rose 164.6% year over year, driven primarily by power-management sales for AI and servers. Communications revenue increased 134.7%, while automotive revenue rose 19.2%.
The company reported gross margin of 55.4%, compared with 55.1% a year earlier, with the filing attributing the increase mainly to product mix. Operating margin was 29.7%, up from 26.5%, and MPS generated $289.9 million in operating cash flow during the quarter. The company repurchased $453.4 million of shares.
MPS reported revenue above its own quarterly guidance and gross margin within its guided range.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $1.2 billion | $737.2 million | 63.1% |
| Diluted EPS | $5.51 | $3.71 | 48.6% |
| Gross margin | 55.4% | 55.1% | 0.2 percentage points |
| Operating margin | 29.7% | 26.5% | 3.3 percentage points |
| Free cash flow | $153.7 million | $398.7 million | −61.5% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $8.19 | $7.80 | Beat by 5.00% |
| Revenue | $1.2 billion | $1.2 billion | Beat by 3.56% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
| Against its own guidance | For | Guided | Reported | Result |
|---|---|---|---|---|
| Gross margin, GAAP | Q3 FY2026 | 55.2%–55.8% | 55.4% | Within the guide |
| Revenue | Q3 FY2026 | $1.1 billion–$1.2 billion | $1.2 billion | Above the guide |
What management said on the call
CFO Tony Balow said demand from existing enterprise data customers was expected to continue into 2027. He also pointed to customer diversification, growth in modules and increased content as new platforms roll out. CEO Michael Hsing said design activity and customer interest in new products informed his view of growth beyond next year.
Analysts asked how much business was coming from different types of chips and modules. Balow said MPS had seen growth among customers developing application-specific chips, which primarily use modules. Hsing said server customers were using modules to meet high power demand, but did not quantify the mix.
On automotive, Hsing described demand across the U.S., Europe and Asia, with activity in China. Balow said the second-half ramp was spread across customers and regions. He said MPS had received its first orders for 48-volt power solutions and expected 48-volt and zonal architecture design wins to drive growth in 2027. Balow also expected optical modules to drive communications growth into 2027.
Asked about rising manufacturing costs, Hsing said MPS absorbs some increases and shares costs with customers. Balow said pricing was “not a significant contributor to the revenue growth that we’ve had.” On margins, he said end markets generally operate around the corporate average and described a 55 to 60 range for the company’s gross-margin model.
Balow said quarterly capacity had surpassed $6 billion in annual revenue support and MPS expected $8 billion by the second half of 2027. Asked whether the capacity milestone signaled a revenue pace, he said it was too early to specify a quarterly ramp and that “capacity stays ahead of the business.”
For 800-volt data-center architectures, Balow said MPS was working on designs ahead of ramps expected in late 2027, with more in 2028. He said the enterprise data outlook rested on existing and new customers and the transition to modules, rather than a large built-in 800-volt ramp.
Guidance
Balow said that, based on what he had seen in Q3 and Q4, he was comfortable raising the floor for year-over-year enterprise data revenue growth in FY2026. MPS now expects growth of at least 150%, up from its previous floor of 130%.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Revenue, Storage and Compute New Products | FY2028 | Monolithic Power Systems expects its new storage and compute products to ramp in FY2028. | — | — |
| Revenue, Optical Modules | FY2027 | Monolithic Power Systems expects optical modules to be significant communications growth drivers in FY2027. | — | — |
| Revenue, Data Converter | FY2027 | Monolithic Power Systems expects its first large data converter design win to ramp in FY2027. | — | — |
| Revenue, Automotive | FY2027 | Monolithic Power Systems expects 48-volt and zonal architecture design wins to drive automotive growth in FY2027. | — | — |
| Revenue, Communications | FY2026 | Monolithic Power Systems expects communications to be its second-fastest-growing end market in FY2026. | — | — |
| Revenue growth, Enterprise Data | FY2026 | 150.0% | 130.0% | Raised |
| Revenue, Automotive | FY2026 | Monolithic Power Systems expects automotive revenue to continue ramping through the second half of FY2026. | — | — |
| Tax rate, non-GAAP | FY2026 | 15.0% | 15.0% | Held |
| Operating expenses, non-GAAP | Q4 FY2026 | $216.8 million–$220.8 million | Q3 FY2026: $201.2 million–$205.2 million | Raised |
| Operating expenses, GAAP | Q4 FY2026 | $334.0 million–$342.0 million | Q3 FY2026: $252.7 million–$258.7 million | Raised |
| Gross margin, non-GAAP | Q4 FY2026 | 55.5%–56.1% | Q3 FY2026: 55.4%–56.0% | Raised |
| Gross margin, GAAP | Q4 FY2026 | 55.2%–55.8% | Q3 FY2026: 55.2%–55.8%; reported 55.4% | Held |
| Revenue | Q4 FY2026 | $1.3 billion–$1.4 billion | Q3 FY2026: $1.1 billion–$1.2 billion; reported $1.2 billion | Raised |