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8-K

Monolithic Power Systems Inc (MPWR)

8-K 2025-07-31 For: 2025-07-31
View Original
Added on April 11, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (date of earliest event reported):

July 31, 2025

MONOLITHIC POWER SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware 000-51026 77-0466789
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
5808 Lake Washington Blvd. NE,<br><br> <br>Kirkland, Washington<br><br> <br>(Address of principal executive offices) 98033<br><br> <br>(Zip Code)
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(425) 296-9956
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(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.001 per share MPWR The NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02 Results of Operations and Financial Condition.

On July 31, 2025, Monolithic Power Systems, Inc. issued a press release regarding its financial results for the quarter ended June 30, 2025. The press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

Attached hereto as Exhibit 99.2 and incorporated by reference herein is financial information and commentary regarding results of the quarter ended June 30, 2025.

The information under Item 2.02 of this Current Report on Form 8-K and Exhibits 99.1 and 99.2 attached hereto are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “1934 Act”), nor shall they be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the 1934 Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Description
99.1 Press release issued on July 31, 2025, announcing the financial results for the quarter ended June 30, 2025.
99.2 Earnings commentary for the quarter ended June 30, 2025.
104 Cover Page Interactive Data File (embedded within the Inline XBRL Document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: July 31, 2025 By: /s/ T. Bernie Blegen
T. Bernie Blegen
Executive Vice President and Chief Financial Officer

ex_815328.htm

Exhibit 99.1

logosmall.jpg

PRESS RELEASE
For Immediate Release

Monolithic Power Systems Announces

Results for the Second Quarter Ended June 30, 2025

KIRKLAND, WASHINGTON, July 31, 2025-- Monolithic Power Systems, Inc. (“MPS”) (Nasdaq: MPWR), a fabless global company that provides high-performance, semiconductor-based power electronics solutions, today announced financial results for the quarter ended June 30, 2025.

The financial results for the quarter ended June 30, 2025 were as follows:

● Revenue was $664.6 million for the quarter ended June 30, 2025, a 4.2% increase from $637.6 million for the quarter ended March 31, 2025 and a 31.0% increase from $507.4 million for the quarter ended June 30, 2024.
● GAAP gross margin was 55.1% for the quarter ended June 30, 2025, compared with 55.3% for the quarter ended June 30, 2024.
● Non-GAAP gross margin (1) was 55.5% for the quarter ended June 30, 2025, excluding the impact of $1.9 million for stock-based compensation and related expenses, $0.6 million for deferred compensation plan expense and $0.3 million for amortization of acquisition-related intangible assets, compared with 55.7% for the quarter ended June 30, 2024, excluding the impact of $1.6 million for stock-based compensation and related expenses, $0.3 million for amortization of acquisition-related intangible assets and $0.1 million for deferred compensation plan expense.
● GAAP operating expenses were $201.3 million for the quarter ended June 30, 2025, compared with $164.0 million for the quarter ended June 30, 2024.
● Non-GAAP operating expenses (1) were $137.6 million for the quarter ended June 30, 2025, excluding $58.4 million for stock-based compensation and related expenses and $5.3 million for deferred compensation plan expense, compared with $111.7 million for the quarter ended June 30, 2024, excluding $51.1 million for stock-based compensation and related expenses and $1.3 million for deferred compensation plan expense.
● GAAP operating income was $164.8 million for the quarter ended June 30, 2025, compared with $116.5 million for the quarter ended June 30, 2024.
● Non-GAAP operating income (1) was $231.2 million for the quarter ended June 30, 2025, excluding $60.3 million for stock-based compensation and related expenses, $5.9 million for deferred compensation plan expense and $0.3 million for amortization of acquisition-related intangible assets, compared with $171.0 million for the quarter ended June 30, 2024, excluding $52.7 million for stock-based compensation and related expenses, $1.4 million for deferred compensation plan expense and $0.4 million for amortization of acquisition-related intangible assets.
● GAAP other income, net was $12.2 million for the quarter ended June 30, 2025, compared with $7.5 million for the quarter ended June 30, 2024.
● Non-GAAP other income, net (1) was $6.6 million for the quarter ended June 30, 2025, excluding $5.6 million for deferred compensation plan income, compared with $6.2 million for the quarter ended June 30, 2024, excluding $1.3 million for deferred compensation plan income.
● GAAP income before income taxes was $177.0 million for the quarter ended June 30, 2025, compared with $124.0 million for the quarter ended June 30, 2024.
● Non-GAAP income before income taxes (1) was $237.9 million for the quarter ended June 30, 2025, excluding $60.3 million for stock-based compensation and related expenses, $0.3 million for amortization of acquisition-related intangible assets and $0.3 million for net deferred compensation plan expense, compared with $177.2 million for the quarter ended June 30, 2024, excluding $52.7 million for stock-based compensation and related expenses, $0.4 million for amortization of acquisition-related intangible assets and $0.1 million for net deferred compensation plan expense.
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● GAAP net income was $133.7 million and $2.78 per diluted share for the quarter ended June 30, 2025. Comparatively, GAAP net income was $100.4 million and $2.05 per diluted share for the quarter ended June 30, 2024.
● Non-GAAP net income (1) was $202.2 million and $4.21 per diluted share for the quarter ended June 30, 2025, excluding $60.3 million for stock-based compensation and related expenses, $0.3 million for amortization of acquisition-related intangible assets, $0.3 million for net deferred compensation plan expense and $7.6 million for related tax effects, compared with $155.1 million and $3.17 per diluted share for the quarter ended June 30, 2024, excluding $52.7 million for stock-based compensation and related expenses, $0.4 million for amortization of acquisition-related intangible assets, $0.1 million for net deferred compensation plan expense and $1.5 million for related tax effects.

The financial results for the six months ended June 30, 2025 were as follows:

● Revenue was $1,302.1 million for the six months ended June 30, 2025, a 34.9% increase from $965.3 million for the six months ended June 30, 2024.
● GAAP gross margin was 55.2% for the six months ended June 30, 2025, flat as compared to the six months ended June 30, 2024.
● Non-GAAP gross margin (1) was 55.6% for the six months ended June 30, 2025, excluding the impact of $3.6 million for stock-based compensation and related expenses, $0.6 million for amortization of acquisition-related intangible assets and $0.4 million for deferred compensation plan expense, compared with 55.7% for the six months ended June 30, 2024, excluding the impact of $3.5 million for stock-based compensation and related expenses, $0.6 million for amortization of acquisition-related intangible assets and $0.5 million for deferred compensation plan expense.
● GAAP operating expenses were $385.7 million for the six months ended June 30, 2025, compared with $321.0 million for the six months ended June 30, 2024.
● Non-GAAP operating expenses (1) were $271.1 million for the six months ended June 30, 2025, excluding $110.5 million for stock-based compensation and related expenses, $4.1 million for deferred compensation plan expense and $0.1 million for amortization of acquisition-related intangible assets, compared with $215.1 million for the six months ended June 30, 2024, excluding $100.9 million for stock-based compensation and related expenses, $4.9 million for deferred compensation plan expense and $0.1 million for amortization of acquisition-related intangible assets.
● GAAP operating income was $333.5 million for the six months ended June 30, 2025, compared with $212.0 million for the six months ended June 30, 2024.
● Non-GAAP operating income (1) was $452.8 million for the six months ended June 30, 2025, excluding $114.1 million for stock-based compensation and related expenses, $4.5 million for deferred compensation plan expense and $0.6 million for amortization of acquisition-related intangible assets, compared with $322.6 million for the six months ended June 30, 2024, excluding $104.5 million for stock-based compensation and related expenses, $5.4 million for deferred compensation plan expense and $0.7 million for amortization of acquisition-related intangible assets.
● GAAP other income, net was $17.4 million for the six months ended June 30, 2025, compared with $17.1 million for the six months ended June 30, 2024.
● Non-GAAP other income, net (1) was $13.1 million for the six months ended June 30, 2025, excluding $4.2 million for deferred compensation plan income, compared with $11.8 million for the six months ended June 30, 2024, excluding $5.3 million for deferred compensation plan income.
● GAAP income before income taxes was $350.9 million for the six months ended June 30, 2025, compared with $229.1 million for the six months ended June 30, 2024.
● Non-GAAP income before income taxes (1) was $465.9 million for the six months ended June 30, 2025, excluding $114.1 million for stock-based compensation and related expenses, $0.6 million for amortization of acquisition-related intangible assets and $0.3 million for net deferred compensation plan expense, compared with $334.4 million for the six months ended June 30, 2024, excluding $104.5 million for stock-based compensation and related expenses, $0.7 million for amortization of acquisition-related intangible assets and $0.2 million for net deferred compensation plan expense.
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● GAAP net income was $267.5 million and $5.57 per diluted share for the six months ended June 30, 2025. Comparatively, GAAP net income was $192.9 million and $3.94 per diluted share for the six months ended June 30, 2024.
● Non-GAAP net income (1) was $396.0 million and $8.25 per diluted share for the six months ended June 30, 2025, excluding $114.1 million for stock-based compensation and related expenses, $0.6 million for amortization of acquisition-related intangible assets, $0.3 million for net deferred compensation plan expense and $13.5 million for related tax effects, compared with $292.6 million and $5.98 per diluted share for the six months ended June 30, 2024, excluding $104.5 million for stock-based compensation and related expenses, $0.7 million for amortization of acquisition-related intangible assets, $0.2 million for net deferred compensation plan expense and $5.6 million for related tax effects.

The following is a summary of revenue by end market (in thousands):

Three Months Ended June 30, Six Months Ended June 30,
End Market 2025 2024 2025 2024
Storage and Computing $ 195,320 $ 114,955 $ 383,831 $ 221,076
Automotive 145,132 87,193 290,036 174,285
Enterprise Data 143,964 187,211 276,888 336,938
Communications 73,783 43,566 145,454 90,211
Consumer 59,663 42,229 116,610 80,303
Industrial 46,712 32,277 89,309 62,503
Total $ 664,574 $ 507,431 $ 1,302,128 $ 965,316

“Our proven, long-term growth strategy remains intact as we continue our transformation from being a chip-only, semiconductor supplier to a full service, silicon-based solutions provider,” said Michael Hsing, CEO and founder of MPS.

Business Outlook

The following are MPS’s financial targets for the third quarter ending September 30, 2025:

● Revenue in the range of $710.0 million to $730.0 million.
● GAAP gross margin between 54.9% and 55.5%. Non-GAAP gross margin (1) between 55.2% and 55.8%, which excludes the impact from stock-based compensation and related expenses as well as the impact from amortization of acquisition-related intangible assets.
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● GAAP operating expenses between $201.3 million and $207.3 million. Non-GAAP operating expenses (1) between $143.0 million and $147.0 million, which excludes estimated stock-based compensation and related expenses in the range of $58.3 million to $60.3 million.
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● Total stock-based compensation and related expenses of $60.1 million to $62.1 million including approximately $1.8 million that would be charged to cost of goods sold.
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● Interest and other income in the range of $6.4 million to $6.8 million before foreign exchange gains or losses.
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● Non-GAAP tax rate of 15% for 2025.
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● Fully diluted shares outstanding between 47.9 million and 48.3 million.
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(1) Non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP other income, net and non-GAAP income before income taxes differ from net income, net income per share, gross margin, operating expenses, operating income, other income, net and income before income taxes determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Non-GAAP net income and non-GAAP net income per share exclude the effect of stock-based compensation and related expenses, which include stock-based compensation expense and employer payroll taxes in relation to the stock-based compensation, net deferred compensation plan expense, amortization of acquisition-related intangible assets and related tax effects. Non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating income excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP other income, net excludes the effect of deferred compensation plan income. Non-GAAP income before income taxes excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and net deferred compensation plan expense. Projected non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, and amortization of acquisition-related intangible assets. Projected non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A schedule reconciling non-GAAP financial measures is included at the end of this press release. MPS utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. MPS believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors’ understanding of MPS’s core operating results and trends. Additionally, MPS believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financial measures used by MPS. See the GAAP to non-GAAP reconciliations in the tables set forth below.

Earnings Commentary

Earnings commentary on the results of operations for the quarter ended June 30, 2025 is available under the Investor Relations page on the MPS website.

Earnings Webinar

MPS plans to host a question-and-answer webinar covering its financial results at 2:00 p.m. PT / 5:00 p.m. ET, July 31, 2025. The live event will be held via a Zoom webcast, which can be accessed at: https://mpsic.zoom.us/j/98147401910. The Zoom webcast can also be accessed live over the phone by dialing (669) 444-9171; the webcast ID is 98147401910. A replay of the event will be archived and available for replay for one year under the Investor Relations page on the MPS website.

Safe Harbor Statement

This press release contains, and statements that will be made during the accompanying earnings webinar will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including under the “Business Outlook” section and the quote from our CEO herein, including, among other things, (i) projected revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, stock-based compensation and related expenses, amortization of acquisition-related intangible assets, other income before foreign exchange gains or losses, and fully diluted shares outstanding, (ii) our outlook for the third quarter of fiscal year 2025 and the near-term, medium-term and long-term prospects of MPS, including our ability to adapt to changing market conditions, performance against our business plan, our ability to grow despite the various challenges facing our business, our industry and the global economic environment, revenue growth in certain of our market segments, potential new business segments, our continued investment in research and development (“R&D”), expected revenue growth, customers’ acceptance of our new product offerings, the prospects of our new product development, our expectations regarding market and industry segment trends and prospects, and our projected expansion of capacity and the impact it may have on our business, (iii) our ability to penetrate new markets and expand our market share, (iv) the seasonality of our business, (v) our ability to reduce our expenses, and (vi) statements regarding the assumptions underlying or relating to any statement described in (i), (ii), (iii), (iv), or (v). These forward-looking statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve significant known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this press release and listeners to the accompanying earnings webinar are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ include, but are not limited to, continued uncertainties in the global economy, including due to the Russia-Ukraine and Middle East conflicts, global tariffs and retaliatory measures and announcements regarding same, inflation, consumer sentiment and other factors; adverse events arising from orders or regulations of governmental entities, including such orders or regulations that impact our customers or suppliers, and adoption of new or amended accounting standards; adverse changes in laws and government regulations such as tariffs on imports of foreign goods, export regulations and export classifications, and tax laws (including the recent H.R.1 Act signed into law on July 4, 2025) or the interpretation of same, including in foreign countries where MPS has offices or operations; the effect of export controls, trade and economic sanctions regulations and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets, particularly in China; our ability to obtain governmental licenses and approvals for international trading activities or technology transfers, including export licenses; acceptance of, or demand for, our products, in particular the new products launched recently, being different than expected; our ability to increase market share in our targeted markets; difficulty in predicting or budgeting for future customer demand and channel inventories, expenses and financial contingencies (including as a result of any continuing impact from the Russia-Ukraine and Middle East conflicts); our ability to efficiently and effectively develop new products and receive a return on our R&D expense investment; our ability to attract new customers and retain existing customers; our ability to meet customer demand for our products due to constraints on our third-party suppliers’ ability to manufacture sufficient quantities of our products or otherwise; our ability to expand manufacturing capacity to support future growth; adverse changes in production and testing efficiency of our products; any political, cultural, military, regulatory, economic, foreign exchange and operational changes in China, where a significant portion of our manufacturing capacity comes from; any market disruptions or interruptions in our schedule of new product development releases; our ability to manage our inventory levels; adequate supply of our products from our third-party manufacturing partners; adverse changes or developments in the semiconductor industry generally, which is cyclical in nature, and our ability to adjust our operations to address such changes or developments; the ongoing consolidation of companies in the semiconductor industry; competition generally and the increasingly competitive nature of our industry; our ability to realize the anticipated benefits of companies and products that MPS acquires, and our ability to effectively and efficiently integrate these acquired companies and products into our operations; the risks, uncertainties and costs of litigation in which MPS is involved; the outcome of any upcoming trials, hearings, motions and appeals; the adverse impact on our financial performance if our tax and litigation provisions are inadequate; our ability to effectively manage our growth and attract and retain qualified personnel; the effect of epidemics and pandemics on the global economy and on our business; the risks associated with the financial market, economy, global tariffs and retaliatory measures and announcements regarding same, and geopolitical uncertainties, including the Russia-Ukraine and Middle East conflicts; and other important risk factors identified under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K filed with the SEC on March 3, 2025. MPS assumes no obligation to update the information in this press release or in the accompanying earnings webinar.

About Monolithic Power Systems

Monolithic Power Systems, Inc. (“MPS”) is a fabless global company that provides high-performance, semiconductor-based power electronics solutions. MPS’s mission is to reduce energy and material consumption to improve all aspects of quality of life. Founded in 1997 by our CEO Michael Hsing, MPS has three core strengths: deep system-level knowledge, strong semiconductor expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging. These combined advantages enable MPS to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders. MPS can be contacted through its website at www.monolithicpower.com or its support offices around the world.

Monolithic Power Systems, MPS, and the MPS logo are registered trademarks of Monolithic Power Systems, Inc. in the U.S. and trademarked in certain other countries.

Contact:

Bernie Blegen

Executive Vice President and Chief Financial Officer

Monolithic Power Systems, Inc.

408-826-0777

MPSInvestor.Relations@monolithicpower.com

Monolithic Power Systems, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands, except par value)

December 31,
2024
ASSETS **** ****
Current assets:
Cash and cash equivalents 787,382 $ 691,816
Short-term investments 358,695 171,130
Accounts receivable, net 194,821 172,518
Inventories 490,642 419,611
Other current assets 87,217 109,978
Total current assets 1,918,757 1,565,053
Property and equipment, net 563,885 494,945
Acquisition-related intangible assets, net 9,364 9,938
Goodwill 25,944 25,944
Deferred tax assets, net 1,309,981 1,326,840
Other long-term assets 144,279 194,377
Total assets 3,972,210 $ 3,617,097
LIABILITIES AND STOCKHOLDERS’ EQUITY **** ****
Current liabilities:
Accounts payable 129,919 $ 102,526
Accrued compensation and related benefits 81,296 63,918
Other accrued liabilities 172,293 128,123
Total current liabilities 383,508 294,567
Income tax liabilities 73,185 65,193
Other long-term liabilities 113,449 111,570
Total liabilities 570,142 471,330
Commitments and contingencies
Stockholders’ equity:
Common stock and additional paid-in capital: 0.001 par value; shares authorized: 150,000; shares issued and outstanding: 47,892 and 47,823, respectively 822,582 706,817
Retained earnings 2,603,177 2,487,461
Accumulated other comprehensive loss (23,691 ) (48,511 )
Total stockholders’ equity 3,402,068 3,145,767
Total liabilities and stockholders’ equity 3,972,210 $ 3,617,097

All values are in US Dollars.

Monolithic Power Systems, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share amounts)

Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Revenue $ 664,574 $ 507,431 $ 1,302,128 $ 965,316
Cost of revenue 298,558 226,853 582,882 432,297
Gross profit 366,016 280,578 719,246 533,019
Operating expenses:
Research and development 96,266 77,945 188,493 153,935
Selling, general and administrative 104,992 86,097 197,236 167,061
Total operating expenses 201,258 164,042 385,729 320,996
Operating income 164,758 116,536 333,517 212,023
Other income, net 12,220 7,512 17,351 17,052
Income before income taxes 176,978 124,048 350,868 229,075
Income tax expense 43,252 23,682 83,351 36,168
Net income $ 133,726 $ 100,366 $ 267,517 $ 192,907
Net income per share:
Basic $ 2.79 $ 2.06 $ 5.59 $ 3.96
Diluted $ 2.78 $ 2.05 $ 5.57 $ 3.94
Weighted-average shares outstanding:
Basic 47,887 48,687 47,869 48,660
Diluted 48,019 48,945 48,012 48,935
RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME
(Unaudited, in thousands, except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
--- --- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Net income $ 133,726 $ 100,366 $ 267,517 $ 192,907
Adjustments to reconcile net income to non-GAAP net income:
Stock-based compensation and related expenses 60,280 52,704 114,091 104,473
Amortization of acquisition-related intangible assets 320 372 640 663
Deferred compensation plan expense, net 281 106 275 153
Tax effect 7,573 1,528 13,470 (5,628 )
Non-GAAP net income $ 202,180 $ 155,076 $ 395,993 $ 292,568
Non-GAAP net income per share:
Basic $ 4.22 $ 3.19 $ 8.27 $ 6.01
Diluted $ 4.21 $ 3.17 $ 8.25 $ 5.98
Shares used in the calculation of non-GAAP net income per share:
Basic 47,887 48,687 47,869 48,660
Diluted 48,019 48,945 48,012 48,935
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
(Unaudited, in thousands)
Three Months Ended June 30, Six Months Ended June 30,
--- --- --- --- --- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Gross profit $ 366,016 $ 280,578 $ 719,246 $ 533,019
Gross margin 55.1 % 55.3 % 55.2 % 55.2 %
Adjustments to reconcile gross profit to non-GAAP gross profit:
Stock-based compensation and related expenses 1,915 1,635 3,621 3,535
Amortization of acquisition-related intangible assets 287 339 574 597
Deferred compensation plan expense 605 100 442 540
Non-GAAP gross profit $ 368,823 $ 282,652 $ 723,883 $ 537,691
Non-GAAP gross margin 55.5 % 55.7 % 55.6 % 55.7 %
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
---
(Unaudited, in thousands)
Three Months Ended June 30, Six Months Ended June 30,
--- --- --- --- --- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Total operating expenses $ 201,258 $ 164,042 $ 385,729 $ 320,996
Adjustments to reconcile total operating expenses to non-GAAP total operating expenses:
Stock-based compensation and related expenses (58,365 ) (51,069 ) (110,470 ) (100,938 )
Amortization of acquisition-related intangible assets (33 ) (33 ) (66 ) (66 )
Deferred compensation plan expense (5,256 ) (1,273 ) (4,063 ) (4,899 )
Non-GAAP operating expenses $ 137,604 $ 111,667 $ 271,130 $ 215,093
RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME
(Unaudited, in thousands)
Three Months Ended June 30, Six Months Ended June 30,
--- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Total operating income $ 164,758 $ 116,536 $ 333,517 $ 212,023
Adjustments to reconcile total operating income to non-GAAP total operating income:
Stock-based compensation and related expenses 60,280 52,704 114,091 104,473
Amortization of acquisition-related intangible assets 320 372 640 663
Deferred compensation plan expense 5,861 1,373 4,505 5,439
Non-GAAP operating income $ 231,219 $ 170,985 $ 452,753 $ 322,598
RECONCILIATION OF OTHER INCOME, NET, TO NON-GAAP OTHER INCOME, NET
---
(Unaudited, in thousands)
Three Months Ended June 30, Six Months Ended June 30,
--- --- --- --- --- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Total other income, net $ 12,220 $ 7,512 $ 17,351 $ 17,052
Adjustments to reconcile other income, net to non-GAAP other income, net:
Deferred compensation plan income (5,580 ) (1,266 ) (4,230 ) (5,285 )
Non-GAAP other income, net $ 6,640 $ 6,246 $ 13,121 $ 11,767
RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES
---
(Unaudited, in thousands)
Three Months Ended June 30, Six Months Ended June 30,
--- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Total income before income taxes $ 176,978 $ 124,048 $ 350,868 $ 229,075
Adjustments to reconcile income before income taxes to non-GAAP income before income taxes:
Stock-based compensation and related expenses 60,280 52,704 114,091 104,473
Amortization of acquisition-related intangible assets 320 372 640 663
Deferred compensation plan expense, net 281 106 275 153
Non-GAAP income before income taxes $ 237,859 $ 177,230 $ 465,874 $ 334,364
2025 THIRD QUARTER OUTLOOK
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
(Unaudited)
Three Months Ending
--- --- --- --- --- --- ---
September 30, 2025
Low High
Gross margin 54.9 % 55.5 %
Adjustment to reconcile gross margin to non-GAAP gross margin:
Stock-based compensation and other expenses 0.3 % 0.3 %
Non-GAAP gross margin 55.2 % 55.8 %
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
---
(Unaudited, in thousands)
Three Months Ending
--- --- --- --- --- --- ---
September 30, 2025
Low High
Operating expenses $ 201,300 $ 207,300
Adjustments to reconcile operating expenses to non-GAAP operating expenses:
Stock-based compensation and other expenses (58,300 ) (60,300 )
Non-GAAP operating expenses $ 143,000 $ 147,000

ex_815329.htm

Exhibit 99.2

Monolithic Power Systems

Q2’25 Earnings Commentary

logosmall.jpg

The highest quality power solutions for

Industrial Applications, Telecom Infrastructures,

Cloud Computing, Automotive, and Consumer Applications

Monolithic Power Systems to Report Second Quarter Results on July 31, 2025<br><br> <br><br><br> <br>MPS will report its results after the market closes on July 31, 2025 and host a question-and-answer webinar at 2:00 p.m. PT / 5:00 p.m. ET. The live event will be held via a Zoom webcast, which can be accessed at https://mpsic.zoom.us/j/98147401910

.

Q2 2025 Financial Summary (Unaudited)
GAAP
---
Q1'25 Q2'24 QoQ Change YoY Change
--- --- --- --- --- --- --- ---
Revenue (k) 664,574 637,554 507,431 Up 4.2% Up 31.0%
Gross Margin 55.1 55.4 55.3 Down 0.3 pts Down 0.2 pts
Opex (k) 201,258 184,471 164,042 Up 9.1% Up 22.7%
Operating Margin 24.8 26.5 23.0 Down 1.7 pts Up 1.8 pts
Net income (k) 133,726 133,791 100,366 Flat Up 33.2%
Diluted EPS 2.78 2.79 2.05 Down 0.4% Up 35.6%

All values are in US Dollars.

Non-GAAP
Q1'25 Q2'24 QoQ Change YoY Change
--- --- --- --- --- --- --- ---
Revenue (k) 664,574 637,554 507,431 Up 4.2% Up 31.0%
Gross Margin 55.5 55.7 55.7 Down 0.2 pts Down 0.2 pts
Opex (k) 137,604 133,526 111,667 Up 3.1% Up 23.2%
Operating Margin 34.8 34.7 33.7 Up 0.1 pts Up 1.1 pts
Net income (k) 202,180 193,813 155,076 Up 4.3% Up 30.4%
Diluted EPS 4.21 4.04 3.17 Up 4.2% Up 32.8%
Tax Rate 15.0 15.0 12.5 Flat Up 2.5 pts

All values are in US Dollars.

Revenue by End Market
Revenue **** % of Revenue
--- --- --- --- --- --- --- --- --- --- --- --- ---
End Market ($M) Q2'25 % Q2'25 Q2'24
Storage & Computing 195.3 114.9 70.0 % 29.4 % 22.7 %
Automotive 145.1 87.2 66.4 % 21.8 17.2
Enterprise Data 144.0 187.2 (23.1 %) 21.7 36.9
Communications 73.8 43.6 69.3 % 11.1 8.5
Consumer 59.7 42.2 41.5 % 9.0 8.3
Industrial 46.7 32.3 44.6 % 7.0 6.4
Total 664.6 507.4 31.0 % 100 % 100 %

All values are in US Dollars.

2

Ongoing Business Conditions

In Q2 2025, MPS achieved record quarterly revenue of $664.6 million, 4.2% higher than revenue in the first quarter of 2025 and 31.0% higher than revenue in the second quarter of 2024.

Our performance during the quarter reflected the resilience of our diversified market strategy as we continued to see strong broad-based ordering patterns.

Q2 2025 highlights include:

● We continued to see diversified revenue growth across all our end markets.
● We began initial shipments of our power solutions to support our customers new ASIC based AI products.
--- ---
● Storage and Compute revenue grew sequentially off a strong Q1 as we continued to see demand for both memory and notebook power solutions.
--- ---

MPS continues to focus on innovation, solving our customers’ most challenging problems, and maintaining the highest level of quality. We continue to invest in new technology, expand into new markets, and to diversify our end-market applications and global supply chain. This will allow us to capture future growth opportunities, maintain supply stability, and swiftly adapt to market changes as they occur.

“Our proven, long-term growth strategy remains intact as we continue our transformation from being a chip-only, semiconductor supplier to a full service, silicon-based solutions provider,” said Michael Hsing, CEO and founder of MPS.

Q2’25 Revenue Results

MPS reported second quarter revenue of $664.6 million, 4.2% higher than the first quarter of 2025 and 31.0% higher than the second quarter of 2024. Compared with the first quarter of 2025, sales improved sequentially across all end markets.

Second quarter 2025 Industrial revenue of $46.7 million increased 9.6% from the first quarter of 2025 primarily due to higher sales for instrumentation and security applications. Second quarter 2025 Industrial revenue was up 44.6% year over year. Industrial revenue represented 7.0% of our total second quarter 2025 revenue compared with 6.7% in the first quarter of 2025.

In our Enterprise Data market, second quarter 2025 revenue of $144.0 million increased 8.4% from the first quarter of 2025 from higher sales of our power management solutions for AI and server applications. Second quarter 2025 Enterprise Data revenue was down 23.1% year over year. Enterprise Data revenue represented 21.7% of our total second quarter 2025 revenue compared with 20.8% in the first quarter of 2025.

Second quarter 2025 Consumer revenue of $59.7 million increased 4.9% from the first quarter of 2025 primarily from higher sales in monitors and gaming solutions. Second quarter 2025 Consumer revenue was up 41.5% year over year. Consumer revenue represented 9.0% of our total second quarter 2025 revenue compared with 8.9% in the first quarter of 2025.

3

Second quarter 2025 Storage and Computing revenue of $195.3 million increased 3.6% from the first quarter of 2025. The sequential increase was primarily driven by higher sales of power solutions for notebooks as well as memory. Second quarter 2025 Storage and Computing revenue was up 70.0% year over year. Storage and Computing revenue represented 29.4% of MPS’s second quarter 2025 revenue compared with 29.6% in the first quarter of 2025.

Second quarter 2025 Communications revenue of $73.8 million was up 2.8% from the first quarter of 2025 primarily on higher sales of power solutions for optical modules and routers. Second quarter 2025 Communications revenue was up 69.3% year over year. Communications sales represented 11.1% of our total second quarter 2025 revenue compared with 11.3% the first quarter of 2025.

Second quarter Automotive revenue of $145.1 million increased 0.1% from the from the first quarter of 2025. Second quarter 2025 Automotive revenue was up 66.4% year over year. Automotive revenue represented 21.8% of MPS’s second quarter 2025 revenue compared with 22.7% in the first quarter of 2025.

Q2'25 Gross Margin & Operating Income

GAAP gross margin was 55.1%, down 0.3 percentage points compared to the first quarter of 2025. Our GAAP operating income was $164.8 million compared to $168.8 million reported in the first quarter of 2025.

Non-GAAP gross margin for the second quarter of 2025 was 55.5%, down 0.2 percentage points compared to the first quarter of 2025. Our non-GAAP operating income was $231.2 million compared to $221.5 million reported in the first quarter of 2025.

Q2'25 Operating Expenses

Our GAAP operating expenses were $201.3 million in the second quarter of 2025 compared with $184.5 million in the first quarter of 2025.

Our Non-GAAP operating expenses were $137.6 million, up from $133.5 million in the first quarter of 2025.

The differences between non-GAAP operating expenses and GAAP operating expenses for the quarters discussed here are primarily stock-based compensation and related expenses and deferred compensation plan expense.

Total stock-based compensation and related expenses, including approximately $1.9 million charged to cost of goods sold, was $60.3 million compared with $53.8 million recorded in the first quarter of 2025.

4

The Bottom Line

Second quarter 2025 GAAP net income was $133.7 million or $2.78 per fully diluted share, compared with $133.8 million or $2.79 per share in the first quarter of 2025.

Second quarter 2025 non-GAAP net income was $202.2 million or $4.21 per fully diluted share, compared with $193.8 million or $4.04 per fully diluted share in the first quarter of 2025.

Second quarter 2025 non-GAAP tax rate of 15% was flat to the first quarter of 2025.

There were 48 million fully diluted shares outstanding at the end of the second quarter of 2025.

Balance Sheet and Cash Flow

Cash, cash equivalents and short-term investments were $1,146.1 million at the end of the second quarter of 2025 compared to $1,026.7 million at the end of the first quarter of 2025. For the second quarter of 2025, MPS generated operating cash flow of $237.6 million compared with the first quarter of 2025 operating cash flow of $256.4 million.

Accounts receivable at the end of the second quarter of 2025 were $194.8 million, representing 27 days of sales outstanding, which was 4 days lower than the 31 days reported at the end of the first quarter of 2025.

Our internal inventories at the end of the second quarter of 2025 were $490.6 million, up from $454.8 million at the end of the first quarter of 2025. Days of inventory of 150 days at the end of the second quarter of 2025 was 4 days higher than at the end of the first quarter of 2025.

We continue to manage our internal inventories, balancing the uncertainty in the market with being prepared to capture market upturns as they occur. Comparing current inventory levels using next quarter’s projected revenue, days of inventory at the end of the second quarter of 139 days was flat to the end of the first quarter of 2025.

5

Selected Balance Sheet and Inventory Data (Unaudited)
Q2'25
Cash, Cash Equivalents, and Short-Term Investments 1,146.1 M 1,026.7 M $ 1,307.2 M
Operating Cash Flow 237.6 M 256.4 M $ 141.0 M
Accounts Receivable 194.8 M 214.9 M $ 157.9 M
Days of Sales Outstanding 27 Days
Internal Inventories 490.6 M 454.8 M $ 426.8 M
Days of Inventory (current quarter revenue) 150 Days
Days of Inventory (next quarter revenue) 139 Days

All values are in US Dollars.

Q3’25 Business Outlook

For the third quarter of 2025 ending September 30, we are forecasting:

• Revenue in the range of $710 million to $730 million.
• GAAP gross margin in the range of 54.9% to 55.5%.
--- ---
• Non-GAAP gross margin in the range of 55.2% to 55.8%, which excludes the impact from stock-based compensation and related expenses as well as the impact from amortization of acquisition-related intangible assets.
--- ---
• Total stock-based compensation and related expenses in the range of $60.1 million to $62.1 million including approximately $1.8 million that would be charged to cost of goods sold.
--- ---
• GAAP operating expenses between $201.3 million and $207.3 million.
--- ---
• Non-GAAP operating expenses in the range of $143.0 million to $147.0 million. This estimate excludes stock-based compensation and related expenses in the range of $58.3 million to $60.3 million.
--- ---
• Interest and other income in the range from $6.4 million to $6.8 million before foreign exchange gains or losses.
--- ---
• Non-GAAP tax rate of 15% for 2025.
--- ---
• Fully diluted shares outstanding in the range of 47.9 to 48.3 million shares.
--- ---

6

For further information, contact:

Bernie Blegen

Executive Vice President and Chief Financial Officer

Monolithic Power Systems, Inc.

408-826-0777

MPSInvestor.Relations@monolithicpower.com

Safe Harbor Statement

This earnings commentary contains, and statements that will be made during the accompanying webinar will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including under the “Q3’25 Business Outlook” section herein, our statement regarding our business focus, our statement regarding the expansion and diversification of our global supply chain, our statement regarding the expected ramping of ASIC AI power products, our statement regarding geographically balanced capacity, our statement regarding our ability to capture future growth opportunities, maintain supply stability and swiftly adapt to market changes as they occur, and the quote from our CEO and founder, including, among other things, (i) projected revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, stock-based compensation and related expenses, amortization of acquisition-related intangible assets, other income before foreign exchange gains or losses, and fully diluted shares outstanding, (ii) our outlook for the third quarter of fiscal year 2025 and the near-term, medium-term and long-term prospects of MPS, including our ability to adapt to changing market conditions, performance against our business plan, our ability to grow despite the various challenges facing our business, our industry and the global economic environment, revenue growth in certain of our end markets, potential new business segments, our continued investment in research and development (“R&D”), expected revenue growth, customers’ acceptance of our new product offerings, the prospects of our new product development, our expectations regarding market and industry trends and prospects, and our projected expansion of capacity and the impact it may have on our business, (iii) our ability to penetrate new markets and expand our market share, (iv) the seasonality of our business, (v) our ability to reduce our expenses, and (vi) statements regarding the assumptions underlying or relating to any statement described in (i), (ii), (iii), (iv), or (v). These forward-looking statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve significant known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this earnings commentary and listeners to the accompanying conference call are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ include, but are not limited to, continued uncertainties in the global economy, including due to the Russia-Ukraine and Middle East conflicts, global tariffs and retaliatory measures and announcements regarding same, inflation, consumer sentiment and other factors; adverse events arising from orders or regulations of governmental entities, including such orders or regulations that impact our customers or suppliers, and adoption of new or amended accounting standards; adverse changes in laws and government regulations such as tariffs on imports of foreign goods, export regulations and export classifications, and tax laws (including the recent H.R.1 Act signed into law on July 4, 2025) or the interpretation of same, including in foreign countries where MPS has offices or operations; the effect of export controls, trade and economic sanctions regulations and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets, particularly in China; our ability to obtain governmental licenses and approvals for international trading activities or technology transfers, including export licenses; acceptance of, or demand for, our products, in particular the new products launched recently, being different than expected; our ability to increase market share in our targeted markets; difficulty in predicting or budgeting for future customer demand and channel inventories, expenses and financial contingencies (including as a result of any continuing impact from the Russia-Ukraine and Middle East conflicts); our ability to efficiently and effectively develop new products and receive a return on our R&D expense investment; our ability to attract new customers and retain existing customers; our ability to meet customer demand for our products due to constraints on our third-party suppliers’ ability to manufacture sufficient quantities of our products or otherwise; our ability to expand manufacturing capacity to support future growth; adverse changes in production and testing efficiency of our products; any political, cultural, military, regulatory, economic, foreign exchange and operational changes in China, where a significant portion of our manufacturing capacity comes from; any market disruptions or interruptions in our schedule of new product development releases; our ability to manage our inventory levels; adequate supply of our products from our third-party manufacturing partners; adverse changes or developments in the semiconductor industry generally, which is cyclical in nature, and our ability to adjust our operations to address such changes or developments; the ongoing consolidation of companies in the semiconductor industry; competition generally and the increasingly competitive nature of our industry; our ability to realize the anticipated benefits of companies and products that MPS acquires, and our ability to effectively and efficiently integrate these acquired companies and products into our operations; the risks, uncertainties and costs of litigation in which MPS is involved; the outcome of any upcoming trials, hearings, motions and appeals; the adverse impact on our financial performance if its tax and litigation provisions are inadequate; our ability to effectively manage our growth and attract and retain qualified personnel; the effect of epidemics and pandemics on the global economy and on our business; the risks associated with the financial market, economy, global tariffs and retaliatory measures and announcements regarding same, and geopolitical uncertainties, including the Russia-Ukraine and Middle East conflicts; and other important risk factors identified under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K filed with the SEC on March 3, 2025. MPS assumes no obligation to update the information in this earnings commentary or in the accompanying webinar.

7

Non-GAAP Financial Measures

This earnings commentary contains references to certain non-GAAP financial measures. Non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP other income, net, and non-GAAP income before income taxes differ from net income, net income per share, gross margin, operating expenses, other income, net, operating income and income before income taxes determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Non-GAAP net income and non-GAAP net income per share exclude the effect of stock-based compensation and related expenses, which include stock-based compensation expense and employer payroll taxes in relation to the stock-based compensation, net deferred compensation plan expense, amortization of acquisition-related intangible assets and related tax effects. Non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP operating income excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and deferred compensation plan expense. Non-GAAP other income, net excludes the effect of deferred compensation plan income. Non-GAAP income before income taxes excludes the effect of stock-based compensation and related expenses, amortization of acquisition-related intangible assets and net deferred compensation plan expense. Projected non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, and amortization of acquisition-related intangible assets. Projected non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A schedule reconciling non-GAAP financial measures is included at the end of this press release. MPS utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. MPS believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors’ understanding of MPS’s core operating results and trends. Additionally, MPS believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financial measures used by MPS. See the GAAP to Non-GAAP reconciliations in the tables set forth below.

8

RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME
(Unaudited, in thousands, except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
--- --- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Net income $ 133,726 $ 100,366 $ 267,517 $ 192,907
Adjustments to reconcile net income to non-GAAP net income:
Stock-based compensation and related expenses 60,280 52,704 114,091 104,473
Amortization of acquisition-related intangible assets 320 372 640 663
Deferred compensation plan expense, net 281 106 275 153
Tax effect 7,573 1,528 13,470 (5,628 )
Non-GAAP net income $ 202,180 $ 155,076 $ 395,993 $ 292,568
Non-GAAP net income per share:
Basic $ 4.22 $ 3.19 $ 8.27 $ 6.01
Diluted $ 4.21 $ 3.17 $ 8.25 $ 5.98
Shares used in the calculation of non-GAAP net income per share:
Basic 47,887 48,687 47,869 48,660
Diluted 48,019 48,945 48,012 48,935

9

RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
(Unaudited, in thousands)
Three Months Ended June 30, Six Months Ended June 30,
--- --- --- --- --- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Gross profit $ 366,016 $ 280,578 $ 719,246 $ 533,019
Gross margin 55.1 % 55.3 % 55.2 % 55.2 %
Adjustments to reconcile gross profit to non-GAAP gross profit:
Stock-based compensation and related expenses 1,915 1,635 3,621 3,535
Amortization of acquisition-related intangible assets 287 339 574 597
Deferred compensation plan expense 605 100 442 540
Non-GAAP gross profit $ 368,823 $ 282,652 $ 723,883 $ 537,691
Non-GAAP gross margin 55.5 % 55.7 % 55.6 % 55.7 %
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
---
(Unaudited, in thousands)
Three Months Ended June 30, Six Months Ended June 30,
--- --- --- --- --- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Total operating expenses $ 201,258 $ 164,042 $ 385,729 $ 320,996
Adjustments to reconcile total operating expenses to non-GAAP total operating expenses:
Stock-based compensation and related expenses (58,365 ) (51,069 ) (110,470 ) (100,938 )
Amortization of acquisition-related intangible assets (33 ) (33 ) (66 ) (66 )
Deferred compensation plan expense (5,256 ) (1,273 ) (4,063 ) (4,899 )
Non-GAAP operating expenses $ 137,604 $ 111,667 $ 271,130 $ 215,093

10

RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME
(Unaudited, in thousands)
Three Months Ended June 30, Six Months Ended June 30,
--- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Total operating income $ 164,758 $ 116,536 $ 333,517 $ 212,023
Adjustments to reconcile total operating income to non-GAAP total operating income:
Stock-based compensation and related expenses 60,280 52,704 114,091 104,473
Amortization of acquisition-related intangible assets 320 372 640 663
Deferred compensation plan expense 5,861 1,373 4,505 5,439
Non-GAAP operating income $ 231,219 $ 170,985 $ 452,753 $ 322,598
RECONCILIATION OF OTHER INCOME, NET, TO NON-GAAP OTHER INCOME, NET
---
(Unaudited, in thousands)
Three Months Ended June 30, Six Months Ended June 30,
--- --- --- --- --- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Total other income, net $ 12,220 $ 7,512 $ 17,351 $ 17,052
Adjustments to reconcile other income, net to non-GAAP other income, net:
Deferred compensation plan income (5,580 ) (1,266 ) (4,230 ) (5,285 )
Non-GAAP other income, net $ 6,640 $ 6,246 $ 13,121 $ 11,767
RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES
---
(Unaudited, in thousands)
Three Months Ended June 30, Six Months Ended June 30,
--- --- --- --- --- --- --- --- ---
2025 2024 2025 2024
Total income before income taxes $ 176,978 $ 124,048 $ 350,868 $ 229,075
Adjustments to reconcile income before income taxes to non-GAAP income before income taxes:
Stock-based compensation and related expenses 60,280 52,704 114,091 104,473
Amortization of acquisition-related intangible assets 320 372 640 663
Deferred compensation plan expense, net 281 106 275 153
Non-GAAP income before income taxes $ 237,859 $ 177,230 $ 465,874 $ 334,364

11

2025 THIRD QUARTER OUTLOOK
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
(Unaudited)
Three Months Ending
--- --- --- --- --- --- ---
September 30, 2025
Low High
Gross margin 54.9 % 55.5 %
Adjustment to reconcile gross margin to non-GAAP gross margin:
Stock-based compensation and other expenses 0.3 % 0.3 %
Non-GAAP gross margin 55.2 % 55.8 %
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
---
(Unaudited, in thousands)
Three Months Ending
--- --- --- --- --- --- ---
September 30, 2025
Low High
Operating expenses $ 201,300 $ 207,300
Adjustments to reconcile operating expenses to non-GAAP operating expenses:
Stock-based compensation and other expenses (58,300 ) (60,300 )
Non-GAAP operating expenses $ 143,000 $ 147,000

12

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