Monolithic Power Systems Q4 2024 Earnings Call Transcript

AlphaStreet
Provided by AlphaStreet
February 6, 2025
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Genevieve Cunningham
Senior Manager of Marketing Communications at Monolithic Power Systems

Welcome everyone to the MPS 4th-quarter 2024 Earnings Webinar. My name is Genovie Cunningham, and I will be the moderator for this webinar. Joining me today are Michael Singh, CEO and Founder of MPF; Bernie, EVP and CFO; and Tony Ballow, Vice-President of Finance. Earlier today, along with our earnings announcement, MPS released a written commentary on the results of our operations. Both documents can be found on our website. Before we begin, I would like to remind everyone that in the course of today's presentation, we may make forward-looking statements and projections within the meaning of the Private Securities Litigation Reform Act of 1995. That involves risks and uncertainty, risks, uncertainties and other factors that could cause actual results to differ from these forward-looking statements are identified in the safe-harbor statements contained in the Q4 2024 earnings release and in our SEC filings, including our Form 10-K, which can be found on our website. Our statements are made as of today, and we assume no obligation to update this information.

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

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

Thanks, Jen. Good afternoon, and welcome to our Q4 2024 earnings call. In 2024, MPS posted its 13th consecutive year of growth with full-year revenue of $2.2 billion, up 21% from 2023. For Q4 2024, we had record quarterly revenue of $621.7 million above Q3 2024 and 37% higher than the 4th-quarter of 2023. This performance reflected the strength of our diversified market strategy, consistent execution, continued innovation and strong customer focus.

Let me call-out a few highlights from 2024. We introduced the silicon carbide inverter for high-powered clean-energy applications. Additional revenue is expected to ramp-in late 2025. Other silicon carbide-based applications are expected to be introduced in multiple geographies during both 2025 and 2026. We developed a family of high-quality, cost-effective automotive audio products utilizing DSP technology from our 2024 Exxon acquisition powered by MPS Solutions. For enterprise notebooks, we launched a battery management solution and are sampling a new mini phase power stage.

These products enable faster charge time and significantly improved notebook battery life. Building on our first analog to digital converter design-win in 2024, we are developing new high accuracy 24-bit converters, which are expected to ramp-in the second-half of 2025. 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-chain stability and swiftly adapt to-market changes as they occur.

Finally, I'm pleased to announce our quarterly dividend will increase 25% to $1.56 per share. And during Q4 2024, we completed share repurchases under a 2023 $640 million authorization. This week, our Board of Directors authorized a new $500 million three-year share repurchase program. For the three years ending December 2024, MPS has returned 86% of its free-cash flow to shareholders through share repurchases and dividends paid.

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 . I will now open the webinar up for questions.

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Genevieve Cunningham
Senior Manager of Marketing Communications at Monolithic Power Systems

Thank you, Bernie. Analysts, I would now like to begin our Q&A session. As a reminder, if you would like to ask a question, please click on the participants icon on the menu bar and then click the Raise hand button. Our first question is from Tori Sponberg of Stifel. Tory, your line is now open.

Tore Svanberg
Analyst at Stifel Nicolaus

Yes. Thank you and congratulations on the solid results. Either Michael or Bernie, could you talk a little bit about the dynamics here in the March quarter, especially by segment? And obviously, we know some end-markets are still soft, yet others are actually quite healthy. So any more color on how you see the various segments in the March quarter would be really helpful.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Sure. As far as our Q1 outlook, I think need to take the perspective that relative to the size of the market, we're a fairly small player. But we have a lot of greenfield design-wins, which have been previously delayed that are now starting to ramp as we enter 2025. So when we look at two of the areas that are going to drive most of the growth in the quarter, automotive is continuing to grow and communications, where we launched some new products in Q3 are bouncing back from Q4 and will continue strong. Memories demand profile is also very good and notebooks look to be having a Q1 uplift. We don't know for sure, but we've had many design-wins and believe that those are coming into the market. On industrial consumer, we have a lot of new product ramps, but those are likely to start to contribute at the end of 2025. And on the enterprise data will be down.

Tore Svanberg
Analyst at Stifel Nicolaus

Very good. And as my follow-up on enterprise data, how should we think about that business throughout calendar '25? Again, obviously, a lot of different dynamics, different players, you know, the growth trajectory for that business throughout calendar '25, any color you can share with us there?

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

Yeah. We don't talk about it in the near-terms in the Pacific customers as we always do to give me enough. The near-term is that we can control our customers' buying pattern, their allocations and this year is -- but overall the -- this is a multi-billion dollars market segment. We are getting ready for these next few years growth and it's clearly is a multi-billion dollar opportunities. But for us, let's -- in near-terms, we -- this year could be even or maybe slightly up, okay, we -- this is our best guess. We don't know.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Yeah. Just to add a little bit of color to how we see the year rolling out. We believe that we will be off to a slower start in the first-half of the year. But as the year develops, the customer-base is expected to broaden as hyperscalers launch their new products. And so we have multiple product ramps with both existing customers as well as with these new hyperscalers.

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

So as Michael just said, we believe it's likely to be a flattish year, but we believe that from a quality and supply availability perspective, we're in very good shape. Could be up too much. We don't know. Yeah, exactly.

Tore Svanberg
Analyst at Stifel Nicolaus

That's fair. Congrats again on the results.

Genevieve Cunningham
Senior Manager of Marketing Communications at Monolithic Power Systems

Thank you. Our next question is from Rick Schafer of Oppenheimer. Rick, your line is now open.

Richard Schafer
Analyst at Oppenheimer

Yeah, thanks, guys. I'll add my congratulations. And if I could maybe tack-on to the back of Tor's question. I was wondering if you could update us maybe just to give us a sense of the number of accelerated projects that you expect to ramp this year and into 2026? Just to kind of get a sense, I heard you loud and clear, Michael, this is a $1 billion-plus TAM. I'm just trying to get a sense of how multiple right now. Don't be shy about that. We're not shy on that. We don't want to lose that.

Tony Balow
Vice President of Finance at Monolithic Power Systems

Okay. Hey, Rick, this is Tony. I'll jump-in. I think -- I think what we want to say is we're engaged across all the hyperscalers, but what you heard Michael say was that the exact timing of the ramp is very difficult for us to call. So I don't think we want to put a specific number of customers or exact ramp times out there other than saying that we're engaged broadly across them. As Bernie said, we believe that's going to scale through the second-half.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

I can give you examples and we foresee that these projects are ramping. In the 2022, 2023, you look at the automotive side, we said we have a lot of design-wins and we said, all these are going to ramp-up, but we put a lot -- have a lot of inventories. And 2023 is kind of flattish years. Our customer delayed their launch. So the '23 affected us. And but I keep saying we don't really care and as long as we have a product and designing and designing their new product especially and we're turning to a revenue plus-minus 12 months, 18 months.

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

And if I could just add to Michael's comments there, when you look at automotive, it was delayed not just in '23, but also in the first-half of '24 against what we had built inventory against our expectations. But now as you can see, it's very solidly on-track with two consecutive quarters of growth. And likewise, you could apply that same formula to what we're seeing in the communications with the release of the fiber -- fiber-optics in the data center. So we have the technology, but where it intersects and ramps in the market, a lot of that's a little bit out of our control.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Or even the directly AI powers, we have so many projects working with multiple hyperscale companies and so we cannot tell which one is well ramping first, okay, and what the magnitude ramping. Just we are -- get the supply-chain ready, get our quality testing facility ready to get these to receive these revenues turn into these revenues. And so the timing we care less.

Richard Schafer
Analyst at Oppenheimer

Thanks for all the color, Michael. It's funny talk about auto because that's my second question, if I could. The EV conversion to 48-volt power and 800-volt batteries is sort of set to ramp this year, I believe. And I know you mentioned in the prepared remarks, Bernie, that you're going to be shipping power isolation content second-half, I think I heard you say and I believe EV is about 3/4 of your auto business. So I just wonder if you could talk us through sort of what your potential content given all those changes, right, all these additional drivers, what your content looked like last year or potential content per vehicle versus what it looks like in 2025 with all this with all these new -- with all these new jump balls.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

That's very good questions. And I -- we mentioned about 48-volt system many, many years ago, okay. And particularly for auto, now it became a hot topics. And we have all these product ready. We're designing those new vehicles and these have a based on 48 volt systems, we can capture a lot in the once their products once their vehicles are ramping-up put on the market and initially will be another dominant players.

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

And I think that this is a -- the rollout in automotive starts with EV, which is quicker to adapt new technologies onto their platform, but we expect it to continue for a multiyear period. Yeah, again, MPS, well, again, we provide a 48-volt integrated solutions.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

And all the -- all of these are high-power modules all based on the MPS silicon solutions. And those were significantly changed all these are discrete way of doing accrusion together the 48-volt solutions. So that definitely sets NPS apart from the rest of a.

Tony Balow
Vice President of Finance at Monolithic Power Systems

And Rick, beyond just pure 48 volt, remember what you saw begin in Q3 was designs outside of ADAS start to hit the market and we saw more broad-based growth in the auto segment and we'd expect that to continue as additional sockets come to-market. So I think that's the other dynamic that's happening as well.

Richard Schafer
Analyst at Oppenheimer

Great. Thanks, you guys.

Genevieve Cunningham
Senior Manager of Marketing Communications at Monolithic Power Systems

Our next question is from Ross Seymour of Deutsche Bank. Ross, your line is now open

Ross Seymore
Analyst at Deutsche Bank Aktiengesellschaft

Can you hear me now? Yeah. Hi, Ross. Perfect. Hi, there. I just want to revisit the enterprise data side of things and not to overplay that, but the market-share gains and dynamics in the server CPU side of things, has that changed at all? Because I think everybody knows what's going on with one key customer and the diversification, market-share shifts and those sorts of things. But you guys have other things that are happening as we speak as well. So I really want to focus on the dynamics outside of those, not just with the ASIC providers and other GPU providers, but also with the CPU market-share in servers. So any update on that would be helpful.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Well, also, let me say something Elsa first. Our inventory low -- our inventory low and the channel inventories are low, we're going to ramping-up. Okay. Okay. And the rest of us. I don't know if I had a follow-up on that.

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

It's a very good question and -- but let me just give you a little bit of what we're seeing. It's a fast-changing landscape. And what I mean by that, it's difficult to offer commentary on enterprise data its -- in these different components. The lines between CPU and GPU are becoming blurry. And in support of both lines of business, we have a lot of standard products. So while we've historically had better visibility in the separation and could track them a little more easily, it's hard for us to make more than just a generalized comment about what direction either market segment is going-in.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Yeah, well, let me add it. Okay, we have us -- we're getting significant shares about on the server side. And once you see the server markets start to ramping-up, will be NPS revenue will ramping -- ramp with it?

Ross Seymore
Analyst at Deutsche Bank Aktiengesellschaft

Great. I guess as my non-inventory follow-up. On the communications side, you guys did well in that in the second-half of the year. It's a little bit choppy still, but can you just give us an idea of the profile of that business? How much is kind of the old comms versus the new comms and give us a little bit more color on what the growth driver is that gives you the confidence for the year? And I assume it's on the optical side of things, but just a little more details on that will be helpful.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

We're all laughing. And would you say the beginning of the question. It was, right?

Ross Seymore
Analyst at Deutsche Bank Aktiengesellschaft

On the communications side, it just you guys have been talking about that growing for many, many, many years and it finally did last year, but I know there's some legacy pieces and some new pieces. So I just wanted to try to get some color on the difference between them.

Tony Balow
Vice President of Finance at Monolithic Power Systems

Yeah, Ross, I think you kind of hit it when you were asking the question, right? If you look at comps going-forward, the area of strength that we've really been calling out is in optical and we'd expect that to continue as part of the overall data center opportunity that you heard Michael talk about. So I think that's probably the biggest inflection point that you've seen over the past couple of quarters versus the legacy business.

Ross Seymore
Analyst at Deutsche Bank Aktiengesellschaft

Got it. Thank you.

Genevieve Cunningham
Senior Manager of Marketing Communications at Monolithic Power Systems

Our next question is from Gary Mobley of Loop Capital. Gary, your line is now open.

Gary Mobley
Analyst at Loop Capital Markets

Hey, guys. Let me extend my congratulations as well. I wanted to start with the housekeeping question. Were there any greater than 10% customers in fiscal year '24? And if you can't name the customer, can you at least give us a sense of how big that customer was in the year?

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

Yeah. Certainly for the 3/4 Q1, in our 10-Q, we said that we had two direct customers, which are distributors that were greater than 10% and one indirect customer that was greater than 10% and that carries through for the full-year as well.

Gary Mobley
Analyst at Loop Capital Markets

Okay, but you can't give us a number that we'll publish in the 10-K in terms of the percentage of revenue from that direct customer.

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

Not at this time.

Gary Mobley
Analyst at Loop Capital Markets

Okay. I tried. All right. I wanted to ask about revenue diversification outside of your traditional power management market. And if I count correctly, there's maybe four shots on goal and you highlighted some of those in your press release and that would be data converters, silicon carbide, DSP audio and battery management systems. So my question is, how big in revenue terms can that be in the fiscal year '26 timeframe or said differently, how much of a growth catalyst can be on-top of what you're producing in traditional power management.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Traditional power management, they're talking about these are low voltage things if it's what you mean. And okay, the silicon carbide is of course to me is also in the power management and -- but these are much higher powers, very-high power management. And we don't want to put on the numbers, but these are again it's a billion or a couple of billion-dollar opportunity for all of them for NPS. I don't want to put a timeline on it.

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

Okay. And the only thing is, we picked a couple for the script, but we only could put a few in for time, but I think our strategy continues to be plant a lot of seeds in a lot of different areas that can turn into revenue as the market decides what to -- what to prioritize.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Well, that's a good point. I own it on a March 20, we have an Analyst Day. And this time you come over, you will see a lot of showcase on the MPS new technology and these all will contribute in the next few years of growth, okay. And if you want to paying down what is the numbers and okay, I would say that, okay, if you look at the past for NPS, what the model is, we will -- I don't see anything -- any reason we should change, okay, so faster or slower

Gary Mobley
Analyst at Loop Capital Markets

Thanks guys.

Genevieve Cunningham
Senior Manager of Marketing Communications at Monolithic Power Systems

Our next question is from Quinn Bolton of Needham. Quinn, your line is now open.

Quinn Bolton
Analyst at Needham & Company LLC

Hey guys, I'll offer my congratulations as well. I guess, Bernie and Michael, obviously, a very strong start to the year in the March quarter. Your comments about enterprise data certainly sound like that business might be more second-half weighted. And so I guess I'm just trying to think what sort of revenue pattern would you expect through 2025? Is the first-half of slower the second-half materially stronger? Do you think that you have some puts and takes? And so it's a kind of more linear ramp through the year. Just any sort of thoughts on the shape of revenue through '25 would be helpful.

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

Yeah. So the comment that we made as far as the outlook for the year really looks at the design-wins we've secured and an expectation of what is going to be ramping. Keep in mind though that particularly in the AI side of enterprise data that has tended to be very volatile and that we have relatively short lead times as far as when we get hard information or POs for actual delivery. So I think that within the context of what we believe is most likely to happen, we're very secure by saying a flattish year that's weighted to the back-half. But how that curve actually plays out over the quarters is to-be-determined.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Yeah, let me add it. Bernie said volatile means that this industry is and look at this applications, if you will look at and very -- is at the initial ramp. And so you're only involved with we have a few customers. Now, we talked about it before, so we have multiple customers and they start to ramp. So very good for NPS, very -- we focus on the diversifications and even within a single segment.

Quinn Bolton
Analyst at Needham & Company LLC

Well, Ken, I guess that was going to be my sort of second question just thinking about the enterprise data segment. Can you just give us a sense what you're seeing in terms of, one, like-for-like pricing pressure and then two, I think some of the newer designs really move away from a silicon only solution to much more of a module solution and I assume that those carry much higher dollar content for you. And so do you see as you mix the customer, you ramp some of the new hyperscaler designs, do you think the blended ASP trends in that business, even if you see some like-for-like pricing, can that go higher through the year as these new platforms ramp?

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Well, NPS, I'm going to stick with our models in that game in the margin models in the gross margin model. We provide performance and if it doesn't fit the NPS business model, we don't take those businesses. And so-far we are the leading suppliers in silicon As well as our power modules. And so this is the reason we in a very short times in the last 12 24 months, we have engaged with all these hyperscales. We have all these projects designed away -- design inning. And also we have a future products where many future products in the development.

Quinn Bolton
Analyst at Needham & Company LLC

Got it. Thank you, Michael.

Genevieve Cunningham
Senior Manager of Marketing Communications at Monolithic Power Systems

Yeah. Our next question is from Chris of Wolfe. Chris, your line is now open.

Christopher Caso
Analyst at Wolfe Research

Yes, thanks. I guess just to start, I just want to make sure I understood correctly some of the comments. So when you hear about the enterprise data flattish for the year weighted to the back-half, and I'm assuming that's the entirety of the enterprise data segment, not just that associated with AI. And maybe you could talk about how you talked about some of the hyperscalers, some of the custom ramps happen in the second-half of the year. Is that what's driving that strength in the back-half of the year? What's kind of driving that back-half weighting?

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

Chris, that's an accurate observation. It's -- as we look at the ramps for both the SOCs and some of the tensor processor products that are expected to come out, we've been prototyping those, but the revenue ramps are really weighted to the second-half. And in addition, some of our existing customers in the AI business in particular, have multiple new products that they're ramping and those will have different demand profiles as well. And then that's just within the enterprise data. I think another important ingredient is what we've referred to as the trickle-down effect as we see the other applications that are allied to enterprise data or AI specifically in-memory, optical and networking and all three of those are areas for growth as well during 2025.

Christopher Caso
Analyst at Wolfe Research

Right. And I guess as you look at the full-year, you know, obviously, you know from what you guys are seeing and the better than the seasonal Q1, it's safe to say you're starting out a little better than you know some of the others in this space. You know, what's your thought as you go through the year? I mean, is there any lumpiness with regard to some of the opportunities that are ramping early in the year that we should consider as we go through the year? Or is excluding the enterprise Datas business do you see revenue kind of on a fairly a stable traject -- upslope trajectory as you go through the year?

Tony Balow
Vice President of Finance at Monolithic Power Systems

Yeah. I couldn't tell you something. It's very difficult to say. Sooner, you go by year-by-year, we don't go by year-by year. I mean although we have to report a year-by year. And I'll give you examples, our large customers start to push-out some product, pulling a lot of other works. So we can -- we can't really tell me -- and other customers, other hyperscale start to ramp, okay, started telling us we're going to keep a ramp. Whether the ramp have effected our move our revenue needles in Q4 of this year or Q1 of next year, we can tell.

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

Yeah. Maybe the only thing I'd add-on Michael is and it just comes back to the focus on what you can control, right? And you have the organization looking at providing the best products with the best quality. And that's what we can do right now. And as the market then plays through that will turn into revenue. So I don't think we're trying to get into a quarter-by-quarter debate here, Chris. I think that's how we've more landed kind of in a first-half, second-half dynamic at this point.

Christopher Caso
Analyst at Wolfe Research

Got it. Thank you.

Genevieve Cunningham
Senior Manager of Marketing Communications at Monolithic Power Systems

Our next question is from Joshua Buchalter of Cowen. Joshua, your line is now open.

Joshua Buchalter
Analyst at TD Cowen

Thank you for taking my question. A couple of times you've talked about the hyperscale program sort of driving growth more so in the back-half of the year. I guess if we compare these sockets to what you've already done in AI and the accelerator side, there's a lot of companies in the analog space that are saying that they have power engagements with ASIC vendors as well. Would you expect the majority of these merchant -- the ASIC programs to be dual sourced? And I know you're not going to necessarily quantify share, but I'd just be curious to hear how you're seeing the competitive environment in these sockets? Thank you

Tony Balow
Vice President of Finance at Monolithic Power Systems

Sure. Let me take the first opportunity there. If you look at our most recent track-record in the new -- and I say new, relatively new AI business. The reason we were able to secure a lead position initially is because of our ability to innovate and our time-to-market along with our overall performance characteristics. So to the extent that is valued in these product launches, those are the qualities that give us an opportunity to have a first-mover advantage. But as we've said a couple of times on this call that when we look at our customers, we don't necessarily control what their decision process is or why. And so again, we lead with our strengths and believe that we're well-positioned and then we'll see how the numbers turn out towards the end-of-the year here.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Yeah, you mentioned the second-half, you're paying that down us on the second-half of the ramp. What we mean is in the very near futures, it could be Q1, but Q1 of next year's or could be Q3 of this year or even overlapsing in Q2. And a lot of things as I said earlier, okay, and our larger customers, some of the other ones are pulling again and pulling very urgently, okay, I mean so we cannot tell. I guess to put a punctuation statement, we remain cautiously optimistic, but our momentum is certainly in the right direction. Well, that's the -- that's the professional way to say it.

Joshua Buchalter
Analyst at TD Cowen

We always get the more professional answers from Bernie. Okay. No, thank you. Thank you both for the color there. And as my follow-up, I guess you're kind enough to give sort of a rough outlook for enterprise data growth for 2025. Any more clues you can give us on how you're expecting either at the company-level 2025 growth to shake-out and any sort of which segments you would expect to be the biggest contributors to growth? Thank you.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Bigger swims or thinking is a multiple of them? Yeah. And whether multiple of us will ramp-in a different many different segments and we are sometimes we pick the numbers and look at what's wrong, okay, but other ones are coming up and we focus on the diversified growth that is the key strategy. So we we've been playing the same principles for last 25 years. And if this thing doesn't work, then other things will work because that's always with always our strengths. And as long as we bring up a the best performance -- highest performance product on in the market, we will -- if this segment slows down for whatever the reasons other segment will pick-up?

Joshua Buchalter
Analyst at TD Cowen

Thank you both and congrats on the results.

Genevieve Cunningham
Senior Manager of Marketing Communications at Monolithic Power Systems

Thank you. Our next question is from Will Stein of Truist. Will, your line is now open.

William Stein
Analyst at Truist Securities

Great. Thanks for taking my question. Let me start with what everyone has been asking about is enterprise data. I think you highlighted, Bernie, that it's going to be down sequentially. Can you give us a little help on the modeling because down could be down like 3% or like 30%. Maybe just dimensionalize it a little bit to give us some context, please?

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

Yeah. I think that it would be really hard. Again, what Michael just said is that the strength of our model is the diversification. And I would probably point to the outlook that we've given in total for Q1 as being a risk profile that we believe we can deliver comfortably against based on what we can see in our backlog and the continuing the ongoing ordering patterns. But Again, trying to actually stratisfy with a level of precision on the end-market at this point might be difficult.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Yeah, you may looking for precisions and okay. And the reality is in the business, we go for long-terms and we go for long-term. It doesn't mean near-term will have uplifting, okay. In annual revenues. Okay.

William Stein
Analyst at Truist Securities

Yeah, clearly, my ability to model the near-term is problematic. A follow-up if I can. Maybe let me switch gears a little bit. Michael, I think in the past, you talked about having some capability in microcontrollers. Historically, I know that's not like a focus or it's -- it's not a meaningful part of your revenue as well as I understand. Should we expect that to change? There's so many new products, you talk about silicon carbide power and converters now and DSPs even. Should we expect microcontrollers or another -- any other digital sort of logic technology to become a bigger part of your revenue over-time?

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Very good questions. And we don't listen out a microcontroller as a standalone standal product that we sell. As a matter of fact,, we as a as we have a many -- we sell many microcontrollers now, okay, and as I recall in my mind can come up, 12, 13 microcontrol projects is ongoing. Some of that stuff is shipping. But what we sell microcontroller is on the system-level. And as Bernie earlier said in a last field conference said as NPS is evolving to a silicon-based solution company, microcontrollers plays a key role. And all these powers, all these other lighting, all these other audios and including power supply, including AIs, they all have microcontrollers in it. And we don't separate other items in the standard microcontroller part, but clearly also a lot of microcontrollers were integrated and that's the reason we don't list it apart this is separately

William Stein
Analyst at Truist Securities

Okay thank you

Genevieve Cunningham
Senior Manager of Marketing Communications at Monolithic Power Systems

Our next question is from William Kirwin of Morningstar. William, your line is now open.

William Kerwin
Analyst at Morningstar

Hey, everyone. Thanks for letting us get a question in here. A lot of good questions so-far, so I'll try not to beat any dead horses. But maybe it sounds like at least in the March quarter, automotive communications seem to be driving some of the growth. So I'm wondering if you could just give a broader view into the demand for those markets for 2025 and your opportunities for share gains in those two.

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

Sure. Well, good to hear you in the Q&A, by the way. When you look at the end-markets, most of the ones that we have are long design cycles. And automotive probably lends itself to being the most predictive because we secure a design-win two to three years for an EV in advance when it gets launched or as many as four to five years for a traditional internal combustion. Now having said that, the timing of those ramps when we get -- the design-win comes to-market still remains a question mark. But within the context of six to nine months, we can be reasonably predictive. So in automotive, we see a continuation of what's been driving our last two quarters of growth as far as EVs in China. And those will be supplemented in the second-half of the year more likely by a European OEM that is going to be bringing up a autonomous driving ADOS solution as well as additional content opportunities in North American EV company. And then when you look at the communications side, I think that is we're very early stages of being able to ramp the revenue opportunities, particularly in fiber-optics. We started out with two primary customers, but that we expect that customer-base diversify over the year. As always the pattern.

William Kerwin
Analyst at Morningstar

Yeah. That's excellent. And then maybe one just on some of the new products that were introduced at the start of the call. Really just which one of these maybe excite you the most and what are the new markets that you might be able to enter with these that are the most attractive, do you think from a growth perspective? Thanks.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

The most exciting product we haven't announced yet. Come on over -- coming to Analyst Day, March 20 March 20 okay. And these are equal babies, okay? They all grow should be very same right now.

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

Again, we picked four, but there's many more behind that. So it's hard to pick this one. Actually, we wanted to have a teaser to make sure we had the best turnout for the Investor Day.

William Kerwin
Analyst at Morningstar

Okay, excellent. Well, we'll wait for more detail in March. Thanks, guys.

Genevieve Cunningham
Senior Manager of Marketing Communications at Monolithic Power Systems

All right. Okay. Our next question is from Hans Mosesman of Rosenblatt. Hans, your line is now open.

Hans Mosesmann
Analyst at Rosenblatt Securities

Thanks. Congrats guys. I'll be quick. What is the split for your enterprise data between AI and non-AI, if that's possible? And I have a follow-up. Yeah, again, I think we already answered that question by saying that those lines are getting blurry. So we really don't have a meaningful -- meaningful way to make that divide. And our customers are not -- and we're not -- we're not appreciated and we are disclose those numbers. And our customers have made it very clear. Is non-AI considered memory and optical? Historically?

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

Just different market segments.

Tony Balow
Vice President of Finance at Monolithic Power Systems

Opticals and communication, memories and storage.

Hans Mosesmann
Analyst at Rosenblatt Securities

Fine. Okay, at the risk of upsetting your customers, if you answer, what is the share between your historical AI customer for this year versus accelerator customers? What's the split? Is it 1090 or 50-50 year and

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

For this year and at the end of end-of-the year and we probably will have a more -- or in the near-term where we have a more clear pictures, but then now we don't and we are in a -- frankly, as Bernie said, we're not in a position to answer it. And again and also by either by-product, they share the same product and also to look at our customers and doesn't want us to release these informations.

Hans Mosesmann
Analyst at Rosenblatt Securities

Okay. Thank you very much.

Genevieve Cunningham
Senior Manager of Marketing Communications at Monolithic Power Systems

Our last question is from Joe from Wells Fargo. Joe, your line is now open.

Joseph Quatrochi
Analyst at Wells Fargo Securities

Yeah, thanks for taking the questions. Just curious on the notebook strength that you guys are talking about into the first-quarter. I'm wondering this what's driving that? Is that strength from -- you're starting to see pull for AIPCs or is that channel refill? Just trying to understand some of those dynamics.

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

That's a great question. In fact, we believe that a lot of the design-wins that we've had in notebooks more recently are tied into new AI product demand. But as I said, it's a little bit of an atypical ramp for Q1. So we really don't have a definitive answer on the why behind it? Got it. And then just trying to think about the new projects that are ramping in the second-half

Joseph Quatrochi
Analyst at Wells Fargo Securities

For enterprise data, any help that you can provide on just how to think about like the architectures of those solutions that you're shipping to your customers? Are you still largely seeing as being lateral power opportunities or they're starting to move to more vertical solutions?

Tony Balow
Vice President of Finance at Monolithic Power Systems

Yeah. I think you heard us talk a couple of times that we're not going to talk specifically any customer or their particular architectural solution. I think for us, what you see us again focus on is providing a portfolio of products with the best quality, the best performance and then the customers can choose what works for them. And going back to Michael's earlier comment as far as the basically the value proposition of the principles we operate under, what we're most interested in doing and continuing to do is winning sockets.

Michael R. Hsing
Founder, Chairman, President and Chief Executive Officer at Monolithic Power Systems

Yeah, our customers particularly does not want us to reveal the lateral power or vertical power.

Joseph Quatrochi
Analyst at Wells Fargo Securities

Got it. That's helpful. Thank you.

Genevieve Cunningham
Senior Manager of Marketing Communications at Monolithic Power Systems

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

Bernie Blegen
Executive Vice President and Chief Financial Officer at Monolithic Power Systems

I'd like to thank you all for joining us for this conference call. As a quick reminder, we will be hosting our Investor Day on March 20, 2025. Michael and other NPS executives will showcase our vision for innovation and outline key elements of the company's long-term growth strategy. The event will be held at our San Jose offices and will include live -- live presentations, a Q&A session and demos of our latest solutions for a number of applications and a lot of -- a number of other markets. If you haven't done so already, please email your RSVP to MPS investor oneword.relations@monolithicpower.com. You can also access a live stream of the event on our Investor Relations website. Separately, I look-forward to talking to you again during our first-quarter 2025 conference call, which will likely be held in May. Thank you, and have a nice day.

Corporate Executives
  • Genevieve Cunningham
    Senior Manager of Marketing Communications
  • Bernie Blegen
    Executive Vice President and Chief Financial Officer
  • Michael R. Hsing
    Founder, Chairman, President and Chief Executive Officer
  • Tony Balow
    Vice President of Finance
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