MONOLITHIC POWER SYSTEMS INC (MPWR)

Business overview

Business General Monolithic Power Systems, Inc. is a fabless global company that provides high-performance, semiconductor-based power electronics solutions. Incorporated in 1997, our three core strengths include deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging. These combined advantages enable us to deliver reliable, compact, and monolithic solutions found in storage and computing, enterprise data, automotive, industrial, communications and consumer applications. Our mission is to reduce energy and material consumption to improve all aspects of quality of life and create a sustainable future. We believe that we differentiate ourselves by offering solutions that are more highly integrated, smaller in size, more energy-efficient, more accurate and more reliable with respect to performance specifications and, consequently, more cost-effective than many competing solutions.

We plan to continue to introduce new products within our existing product families, as well as new, innovative products that expand our market. We have over 4,500 employees worldwide, with various locations in Asia, Europe and the U. S. Industry and Product Overview Semiconductors comprise the basic building blocks of electronic systems and equipment. Within the semiconductor industry, components can be classified either as discrete devices, such as individual transistors, or integrated circuits (“ICs”), in which a number of transistors and other elements are combined to form a more complicated electronic circuit. ICs can be further divided into three primary categories: digital, analog, and mixed-signal.

Digital ICs, such as memory devices and microprocessors, can store or perform arithmetic functions on data that is represented by a series of ones and zeroes. Analog ICs, in contrast, handle real world signals such as temperature, pressure, light, sound, or speed. In addition, analog ICs also perform power management functions, such as regulating or converting voltages, for electronic devices. Mixed-signal ICs combine digital and analog functions onto a single chip and play an important role in bridging real world applications to digital systems. We focus on the market for high performance analog and mixed-signal solutions. High performance products generally are differentiated by functionality and performance factors, which include integration of higher levels of functionality into a single chip or module, greater precision, better power efficiency and density, higher speed, and lower heat and noise.

There are several key factors that distinguish the analog and mixed-signal IC markets from digital IC markets. These factors include longer product life cycles, numerous market segments, technology that is difficult to replicate, relative complexity of design and process technologies, importance of experienced design engineers, lower capital requirements and diversity of end markets. We have targeted product and market areas that we believe allow us to operate at above-average growth over the long term compared to the semiconductor industry as a whole. End Markets and Applications We design and develop our products for the storage and computing, enterprise data, automotive, communications, consumer, and industrial end markets. Storage and computing was our largest end market in 2025, closely followed by enterprise data.

The following table is a summary of the various key end market applications for our products, and those markets’ contribution as a percentage of our total revenue for the periods presented: Percentage of Total Revenue End Markets Applications 2025 2024 2023 Storage and Computing Memory, storage solutions, notebooks, and graphics cards 26. 3 % 22. 7 % 27. 0 % Enterprise Data Cloud-based and on-premises CPU servers and workstations, and artificial intelligence (“AI”) systems 25. 2 % 32. 5 % 17.

7 % Automotive Advanced driver assistance systems, infotainment, USB connectors, body electronics, motion control, and lighting systems 21. 2 % 18. 8 % 21. 7 % Communications Network infrastructure, satellite communications, optical modules, switches, and other wireless solutions 11. 1 % 10. 2 % 11.

3 % Consumer Home appliances, gaming, smart TVs, lighting, monitors, and stereos 9. 1 % 9. 1 % 12. 9 % Industrial Power sources, industrial meters, security, and other industrial equipment 7. 1 % 6. 7 % 9.

4 % 7 Product Families Our proprietary process and packaging technologies enable us to design and deliver smaller, single-chip power management solutions. These technologies simplify the design process and are applicable across a wide range of analog applications within the storage and computing, enterprise data, automotive, communications, consumer, and industrial end markets. Our key product families include, but are not limited to, the Direct Current (“DC”) to DC, Alternating Current (“AC”) to DC, driver metal-oxide-semiconductor field-effect transistor, power management IC, current limit switch and lighting control products. […]

Management discussion and analysis

Management’s Discussion and Analysis of Financial Condition and Results of Operations. For example, due to the complexity associated with the calculation of our tax provision, including the effects of the enactment of new tax laws, we engage third-party tax advisors to assist us in the calculation. If we or our tax advisors fail to resolve or fully understand certain issues that we may have had in the past and issues that may arise in the future, we could be subject to errors, which, if material, would result in a restatement of our financial statements. Restatements are generally costly and could adversely impact our results of operations, damage our reputation, and/or have a negative impact on the trading price of our common stock.

Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock. The restatement of our 2024 annual financial statements and our 2025 quarterly financial statements may affect investor confidence and raise reputational issues and may subject us to additional risks and uncertainties, including increased professional costs and the increased possibility of legal proceedings and regulatory inquiries.

As discussed in Notes 2 and 17 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K, we restated our audited consolidated financial statements for the fiscal year ended December 31, 2024 and our unaudited condensed consolidated financial statements for the quarterly periods ended March 31, 2025, June 30, 2025 and September 30, 2025 after we determined that we had not appropriately accounted for deferred income taxes associated with a one-time tax incentive granted by a certain foreign jurisdiction. As a result of this error and the resulting restatement of our audited consolidated financial statements and unaudited condensed consolidated financial statements for the impacted periods, we have incurred, and may continue to incur, unanticipated accounting and legal fees in connection with or related to the restatement, and are subject to a number of additional risks and uncertainties, including the increased possibility of litigation and regulatory inquiries.

The restatement may adversely affect investor confidence in the accuracy of our financial disclosures, may harm our reputation and our business and could cause our stock price to decline. 24 We face risks in connection with our internal control over financial reporting and the identified material weakness. Effective internal control over financial reporting is necessary for us to provide reliable and accurate financial reports. If we cannot provide reliable financial reports or prevent fraud or other financial misconduct, our business and operating results could be harmed. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. As more fully disclosed in Item 9A.

Controls and Procedures of this Annual Report, a material weakness was identified in internal control over financial reporting related to the accounting for deferred income taxes. Due to this finding of a material weakness, we concluded that our internal control over financial reporting was not effective as of December 31, 2024 and December 31, 2025. Until this material weakness is remediated, there is a reasonable possibility that a material misstatement of our interim or annual financial statements will not be prevented or detected on a timely basis. In addition, we may experience delays in satisfying our reporting obligations to comply with SEC rules and regulations, which could result in investigations and sanctions by regulatory authorities.

Furthermore, we may in the future identify additional material weaknesses in our internal control over financial reporting, which may impact the reliability of our financial reporting and financial statements. Any of these results could adversely affect our business and the value of our common stock. Risks Associated with Regulatory Compliance, Intellectual Property Protection and Litigation We are subject to anti-corruption laws in the jurisdictions in which we operate. Our failure to comply with these laws could result in penalties that could harm our reputation and have a material adverse effect on our business, financial condition and results of operations. We are subject to the U. S.

Foreign Corrupt Practices Act, or FCPA, the U. K. Bribery Act and various anti-corruption laws of other jurisdictions, which generally prohibit companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or keeping business and/or other benefits. While the U. S. […]

Key risk disclosures

Risk Factors.” Except as required by law, we disclaim any duty, and undertake no obligation, to update any forward-looking statements, whether as a result of new information relating to existing conditions, future events or otherwise or to release publicly the results of any future revisions we may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this Annual Report on Form 10-K and entail significant risks. Readers should carefully review future reports and documents that we file from time to time with the Securities and Exchange Commission (the “SEC”), such as our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Unless stated otherwise or the context otherwise requires, references to the terms “Monolithic Power Systems,” “MPS,” “Registrant,” the “Company,” “we,” “us,” or “our” as used herein are references to Monolithic Power Systems, Inc. and its consolidated subsidiaries. 6 PART I Item 1. Business General Monolithic Power Systems, Inc. is a fabless global company that provides high-performance, semiconductor-based power electronics solutions. Incorporated in 1997, our three core strengths include deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging.

These combined advantages enable us to deliver reliable, compact, and monolithic solutions found in storage and computing, enterprise data, automotive, industrial, communications and consumer applications. Our mission is to reduce energy and material consumption to improve all aspects of quality of life and create a sustainable future. We believe that we differentiate ourselves by offering solutions that are more highly integrated, smaller in size, more energy-efficient, more accurate and more reliable with respect to performance specifications and, consequently, more cost-effective than many competing solutions. We plan to continue to introduce new products within our existing product families, as well as new, innovative products that expand our market. We have over 4,500 employees worldwide, with various locations in Asia, Europe and the U.

S. Industry and Product Overview Semiconductors comprise the basic building blocks of electronic systems and equipment. Within the semiconductor industry, components can be classified either as discrete devices, such as individual transistors, or integrated circuits (“ICs”), in which a number of transistors and other elements are combined to form a more complicated electronic circuit. ICs can be further divided into three primary categories: digital, analog, and mixed-signal. Digital ICs, such as memory devices and microprocessors, can store or perform arithmetic functions on data that is represented by a series of ones and zeroes. Analog ICs, in contrast, handle real world signals such as temperature, pressure, light, sound, or speed.

In addition, analog ICs also perform power management functions, such as regulating or converting voltages, for electronic devices. Mixed-signal ICs combine digital and analog functions onto a single chip and play an important role in bridging real world applications to digital systems. We focus on the market for high performance analog and mixed-signal solutions. High performance products generally are differentiated by functionality and performance factors, which include integration of higher levels of functionality into a single chip or module, greater precision, better power efficiency and density, higher speed, and lower heat and noise. There are several key factors that distinguish the analog and mixed-signal IC markets from digital IC markets.

These factors include longer product life cycles, numerous market segments, technology that is difficult to replicate, relative complexity of design and process technologies, importance of experienced design engineers, lower capital requirements and diversity of end markets. We have targeted product and market areas that we believe allow us to operate at above-average growth over the long term compared to the semiconductor industry as a whole. End Markets and Applications We design and develop our products for the storage and computing, enterprise data, automotive, communications, consumer, and industrial end markets. Storage and computing was our largest end market in 2025, closely followed by enterprise data. […]

Source and methodology

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