MONOLITHIC POWER SYSTEMS INC — Call Transcript 2025

Welcome everyone to the MPS second quarter 2025 earnings webinar. My name is Arthur Lee and I will be the moderator for this webinar. Joining me today are Michael Hsing, CEO and Founder of MPS, Bernie Blegen, EVP and CFO, and Tony Balow, 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 involve risk and uncertainties. The 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 Q2 2025 earnings release, our Q2 2025 earnings commentary, 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 would like to turn the call over to Bernie Blegen. Thanks Arthur. Good afternoon and welcome to our Q2 2025 earnings call. In Q2, MPS achieved record quarterly revenue of $664.6 million, 4.2% higher than the first quarter of 2025 and 31.0% higher than Q2 2024. This performance reflected the ongoing strength of our diversified market strategy, consistent execution, continued innovation, and strong customer focus. Let me call out a few highlights from the second quarter. We continue to see diversified revenue growth across all of our end markets. We began initial shipments of our power solutions to support our customers. New AI ASIC-based products, storage, and compute revenue grew sequentially off a strong Q1 as we continue to see demand for both memory solutions and notebook power solutions. MPS continues to focus on innovation and solving our customers' most challenging problems. We continue to invest in new technology, expand into new markets, and diversify our end market application and global supply chain. This will allow us to capture further future growth opportunities, maintain supply chain 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. I will now open the webinar up for questions. Thank you Bernie and A`nalyst. 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 in the menu bar and then click the raise hand button. Our first question is from Tore Svanberg of Stifel. Tore, your line is now open. Yes, thank you. Congratulations on another record quarter. Michael, Bernie, I was hoping you could talk a little bit more about the September quarter. What the setup is there. You're guiding for 8% sequential growth at the midpoint. I was just hoping you could give us some puts and takes of the six end markets in the September quarter. Sure. Happy to, Tore. When we look at Q3, we've got enterprise data growing between 20% and 30% sequentially. We also see a seasonal uplift in consumer, and with the exception of storage and compute, all of our other lines of business are up high single digits. In storage and compute, we just have a little bit of caution primarily because you're coming off of two very strong quarters in Q1 and Q2. That's great, caller. Just as my follow up, you mentioned the AI ASIC-based products programs now starting to ramp up. I was hoping you could add a bit more color there. Are we talking about multiple customers? Are these primarily vertical power architectures? I guess a really important question is back at the analyst day, you gave us that $4 billion SAM for your enterprise data market and there's a lot that's happened since then. I was just wondering if that number is starting to move quite a bit upward. Yeah, you're right. Since the endless day, things are changing fast and everything's good. After a couple of years of these enterprise data segments, and clearly you establish a winner or losers, and the NPSS appear to be winners. We do engage multiple customers, if it's not all large customers or large customers or potential customers. Like Amanda, we have a lot of design weights and design activities, and while their threatens are ramping up in the near terms, and also a lot of small emerging players, and we see the peripheral of not only the, in the data centers but all kind of applications. That's what we very excited in the long terms, the short term ones. I said in year terms it doesn't mean, okay, next six months, the next 12 months. I keep saying, okay, our forecast revenues is always a ±6-12 months. You said earlier is a $4 billion. That's what we said. That's where we see it, and we're going to get there. Great. Thank you and congrats again. Okay, thank you. Our next question is from Chris Caso of Wolfe Research. Chris, your line is now open. Yes, thanks. Good evening. I guess the first question is with regard to enterprise data. Previously you had provided some guidance on that to be flat ±20%. You've talked about guidance for the September quarter and any more visibility with regard to the full year guidance for that. Any more narrowing of that range and whatever kind of color you can provide on your expectations there. Sure, Chris. The market, as Michael just said, remains dynamic. We have fairly short lead times even for Q4. We don't believe we have our arms around all the business that's likely to occur. That's just the nature of the dynamic of this fast-moving market. At Q2, we identified the range as being flat to down potentially 20%. While we're not guiding on Q4, in addition to the, you know, growing Q3 sequentially by 20-30%, I can say that Q4 will be up sequentially. Whatever we said in the beginning of the year, we feel comfortable. Got it. Okay, that's helpful. Just in general, you've obviously listened to the calls from some of your peers that there's some degree of macro uncertainty out there. Some of the customers, some of your competitors rather, have expressed some caution and some concern about some pull ins in certain areas. I wonder if you could comment on that with respect to your business and in general as compared to 90 days ago. Is there anything that's changed in your view of the overall markets or your expectations with respect to the year? I'll give you an arrogant answer. Sorry, I don't listen to any other cost. You tell me that maybe I know from you. We focus ourselves as always. Market condition is a market conditions. Again, we provide the components to the multiple segments. That's where we focus on it, and we focus on the internal executions and executions with our customers demanding in the futures. That's what we always do, and whatever happens, happens. As long as we're much better than everybody else. If I could add to that. In. Q2 we used the phrase that we were cautiously optimistic about the outlook for the balance of the year. I think that still describes how we feel from the standpoint that we have seen broad-based, strong, continued strong demand profile in all of our end markets. However, the ordering pattern, because there is a little bit different risk pattern, remains with short lead times. As a result, we're not necessarily building backlog that we have visibility out beyond two quarters. That's a little bit different from most recoveries that we've experienced. I want to stress that we feel very good about our overall positioning for the remainder of the year. Helpful. Thank you. Our next question is from Quinn Bolton of Needham. Quinn, your line is now open. Thank you. Congratulations on another good quarter, Michael, Bernie, and Tony. I guess, Michael or Bernie, just wanted to ask, as you start to ship into some of these ASIC platforms, can you give us a sense, are the ASIC platforms, do they tend to be sourced by multiple PMIC suppliers, or do you tend to see sole, you know, sole source sockets for a given generation of an ASIC, and then the ASIC vendor may source the first generation with yourself and, say, a second generation with a competitor? That's a question I've gotten a fair amount, and just wondering if you could give us some sense on whether those ASIC programs tend to be single sourced or multiple sourced. Yeah, we see a variety of single-sourced and double-sourced, multiple-sourced, high-cost source and the low-cost source, all source. We deliver what our customer, we develop assisting vertical power, which is more module-like solutions and even a chip site, and we do whatever our customers demand. Maybe I can say that. Okay, too vague. Okay. I disappointed that you didn't ask any more specific technical questions. I'll save those for Analyst Day or maybe the callback. Let me add real quickly, each of the end customers has their own reasons for how they're selecting their suppliers. Some of them, it's supply chain resilience, others want innovation. Like every opportunity we have, we provide strong customer focus and consistent execution. That's what makes us feel that we're very well positioned across all of these opportunities. Yeah. What I tell you, them high cost, low cost, multiple customer, one, one, one source, two source, multiple sources, they all source nothing but the truth. Okay, got it. The second question, I'll move to the automotive end market. Kind of wondering if you guys could give us your outlook for the second half of the year. What are the biggest drivers of growth? I think you have a couple of platforms with Western OEMs set to ramp where you have some pretty good content. Wondering the extent that those ramp, does that drive growth half-over-half in the automotive business, or are you looking for sort of more of a flattish half-over-half in that segment in the second half. Automotive. We've been very consistent on how we've described the rollout for calendar 2025. We enjoyed a nice step up sequentially from Q4-Q1. We anticipated that would be flattening a little bit in the middle part of the year and then picking up end of Q3 and Q4 as these new content opportunities come online. While there is some back and forth on the SAR and units, and in particular with individual companies, we're less affected by that than the timing of these new content ramps. Quinn, I think just one thing to add on that, right. I know we're hyper focused just on the year, but I think if we step back and look longer term into 2026, the opportunities around 48V, some of the zonal architectures, I think they continue to be opportunity for us going forward, and this will be a growth area for us over the long term. Thank you. Okay, there are too many things I can't remember. Our next question is from Ross Seymore of Deutsche Bank. Ross, your line is now open. Hi guys. Congrats on the quarter and guide. Just wanted to dive first into the enterprise data side. You mentioned in your preamble or the press release that both the AI side and the server side were strong. Can you talk a little bit about any differences between those two growth rates, composition, kind of the breakdown of EDM between those in both 2Q and 3Q. Again, something that we've talked about as it relates to enterprise data is that the lines between traditional CPU and AI are getting a little blurry. It's very hard to make clear statements of relative growth or importance. Having said that, I think that the overall profile both for the near term or midterm and the long term remains very positive. Great. I guess as my follow up there's been a decent number of concerns about pull ins and tariff related activity. Obviously you haven't mentioned anything on that, but outside of the enterprise data segment, when we think about the cyclical recovery that's happening, are you seeing any evidence of that kind of tariff influenced behavior, and or do you think this, the cycle itself is really what's driving demand? We believe this cycle is driving demand. We really don't have enough information to support a change in our customers' ordering pattern that would be related to tariffs. We don't want to pretend to know that. These are our control, and whatever happens, happens. Perfect. Thank you, guys. Oh, by the way, our inventory is low. Ross. I didn't want to go there, but. It was nice to see. Thank you. Our next question is from Rick Schafer of Oppenheimer. Rick, your line is now open. Yeah, thanks guys. Congrats on another nice quarter. You guys make it look easy. I wanted to ask a quick follow-up on the $4 billion enterprise data SAM number. I was curious if that considers the eventual conversion of server CPU to 48V, does that factor that in or is that incremental to that number? Second part of that question, I'm curious how much does HVDC increase that SAM or that TAM? When do you expect direct current rack power to start to really take off? I think you started sampling last quarter if I'm correct. Yes. Okay, that was a. These are the 800V systems and 400V systems, and yes, we'll start to sampling. These are not in the factors, and both what you mentioned, the 48V, 48V servers, and also the 48V systems and 800V system where this far in the future. Maybe far in the future is maybe a couple years, a year, 18-24 months kind of things, or maybe even longer. Okay, we don't want to call the market. We are the only solution providers, and these one we believe ultimately all data center will convert into this type of a 48V and 800V systems. That's what we targeting. That's what we emerge and focus our development. Not really in the last couple years, we said many years ago, even 2016, we foresee 48V that would be the solution, and we became one of the key supplier in last couple years. Three years ago, we started working on the 800V systems, and also not only that, also the BMS, the Battery Management Systems, and these are absolutely fit for that type of applications and not only for vehicles, energy storage, and the data centers. This is all about the energy utilizations. Hey Rick, the only thing I'd add, I know you asked a very specific enterprise data question, but remember we kind of think about the overall data center opportunity, and you know, whether that's optical module growth, whether that's going to be memory. All those things, I think, play in as opportunities for us. I'm just trying to get us to step back a bit from only focusing on the enterprise data segment. I appreciate that, Tony. That actually leads me to my second question, which is I know it's not your largest segment, but communication seems to be firing on all cylinders. I mean satellite, Wi-Fi, 5G, and transceiver power that you just mentioned. I didn't know if you guys could elaborate at all or talk at all about order-to-order trends, order velocities there, outlook for that segment, like just basically any color you'd be able to share there. If you look at about a year ago, we saw a large step up from Q2 2023-Q2 2024. A lot of that was in the core networking telecom business. That element has plateaued. At the same time, we saw growth in the optical modules within the data center. That's been growing very nicely. Right now I think that we're positioned very well, but I don't necessarily have a strong signal of additional investment in the network category. Okay, thanks guys. Our next question is from Josh Buchalter of Cowen. Josh, your line is now open. Hey guys, thank you for taking my question and congrats on the record results as well. My shock, but I'm also going to ask about enterprise data as we get into the back half of this year. Any metrics or guidelines you can give us on how much this new AI ASIC is contributing to the back half of the year, how it compares to, you know, your lead GPU customer. I mean, is this opportunity comparable in size to what you, you know, you've been able to generate on the GPU side? Thank you. All these questions are being asked being similar questions that we all answered. Okay, we're looking in the futures, even the near term future looking good. That's only about what, 25% of MPS business. The bigger revenue growth is the rest of the company. I hope we should have more question on the rest of the business. I will take the subtle hint there and ask about auto. Is auto and the enterprise data add together maybe only 40%. How about something else? All right. I mean, storage and compute, then we can take this anywhere. No, I'm just joking. Ask whatever you want to ask. I'm going to stick with storage and compute then. You mentioned some caution there into the back half of the year, is that sort of an inventory dynamic? You had gained a bunch of share, I believe on DDR5 to start the year. Is there still more room to run with from that on the share and content side on the DDR side within storage and compute? Thank you. Yeah, Josh, that's an excellent question because we had a very significant step up in our position competitively as well as from revenue in both storage and notebook. The reason that I use the term cautious is because both end markets tend to be a different demand profile from like automotive, for example. What I mean by that is historically notebooks have always been like Consumer. And been. Expansion in Q3. We had such an atypical seasonality with a buildup in Q1 and Q2 that it just pays to be a little bit cautious there. Likewise on memory, I have nothing to indicate that there's a slowdown or change of market positioning. Again, it's just that in the past they've had historic boom and bust cycles. That's the only reason that I'm offering now. Having said that, we were pleasantly surprised in Q2 that the results for that particular group came in better than expected. Yeah. You know we grow significantly this year, right? Yeah. Our full year results are going to be well above what we've been doing. We're probably in for the full year will be between 40%-50% growth for the year. Yeah, that's the reason Bernie asked you. Okay. If you're more cautious, okay, not going to be 100% next quarters. Okay. That's what we mean. Relatively, what cautious means, okay, cautious is not expected another 50% or higher. Yeah. Got it. Thanks, guys. Next quarter's questions on TVs. Okay. All right, thank you. Our next question is from Gary Mobley of Loop Capital. Gary, your line is now open. Hey guys, thanks for taking my question. Bernie, I appreciate the fact that you don't have a lot of visibility out into the fourth quarter, but I want to ask about the seasonality of the fourth quarter. Typically Q4 might be down, what, mid single digit % sequentially. How do you see it shaping up this year? I don't have a seasonality anymore. Yeah, okay. I think Michael said it all there. If you look at that historic trend and I don't know the last time we actually fulfilled being down, it's in a fairly narrow range. I think flattish is probably the easiest way to describe the outlook. Helpful. All right, it sounds like you've got plenty of capacity, plenty of inventory. Can you remind us what sort of annual revenue you could support with your internal and external capacity? Can you confirm whether or not the book to bill ratio is in fact trending above parity? Yeah. Two separate questions, but I'll try to address pretty quickly. I'll answer the second part, our inventory is low. Our current capacity, and we've talked about this in the past, is to be able to support $4 billion of revenue with diversification of 50% of that outside of China. What we're trying to do is be able to support all of our customers' requirements in whatever supply chain profile they're looking for. When you look at the book-to-bill ratio, I commented on this earlier that we're having sort of an atypical ordering pattern. When you consider that we do believe we're in the middle of a cyclical recovery that's very broad-based, what I mean by that is the ordering patterns are much more short-term. We're not building book-to-bill ratios of like 1.4/1.5 where we'd have backlog continuing out into Q1 and Q2 of next year. It's really a more near-term focus. With those short lead times, that's the only reason I have a little bit of concern about Q4 and I don't want to send a negative signal. It's just that that's the nature of the demand profile. That's it. I don't want to send a negative signal or the low inventories. We are expanding our supply chains and we can meet it in Q4 in our customer demand. For next year, we start to, even now we continuously qualify the newer supplier and whatever it takes to meet the customer demand, that's what we always do. The only thing I'd add, I don't know if it was part of your question, was in addition to the overall capacity, the geographical balance of it, and what we've said is we would by the end of the year have half of that capacity outside of China, half of it inside. To Michael's point, we just want to be able to and believe we can meet customer demand no matter how they want to route their product. Thank you, guys. Our next question is from Kelsey Chia of Citi Research. Kelsey, your line is now open. Hi Michael and Bernie. Congrats on your strong results. I have a question on customer concentration. It's great to hear that you guys are shipping to the ASIC platforms. Does it mean that MPS is sort of back to the historical kind of diversified growth where there's no one customer that's more than 5% of your sales by the end of the year, or is the ASIC ramp sort of lumpy as well that can tilt that kind of customer concentration? Yeah, I think that when we had the high customer concentration, particularly in enterprise data, that was an aberration from our normal model of being broadly diversified in terms of customers and markets and geography. I think now that the portfolio of market entrants is starting to build up and we're going to have exposure to all of those opportunities. You'll see us go back to a more normal profile of customers, not contributing more than mid, mid high single digits. Okay, got it. My second question is on the growth rate. It seems that the analog industry has sort of been going through a downturn in the last two years and potentially for 2026 we could see pretty strong growth due to the cyclical recovery. You guys have a 10%-15% outperformance target versus PE peers. That would imply sort of like a close to a 20% growth rate perhaps for next year. Is that the right assumption? If you can provide some color as to which end markets would be driving majority of that growth based on the content or design wins. Sure. I think that your rule of thumb as far as our traditional outperformance and also what the broader market looks like for 2026 are both accurate. I think within, you know, plus minus a couple percentage points, I can support that those numbers again. As far as the particular end market drivers for next year, we believe it's going to be broad based. Although with all of the enterprise data opportunities ramping next year, that will probably be a key contributor. Thank you. Thank you very much. Our next question is from William Stein of Truist. William, your line is now open. Great. Thanks for taking my question. First, I wanted to clarify about the short lead times and ordering patterns. Is it fair to say that the only thing that's really going to cause that to stabilize and lengthen is your extending the lead times that you quote to customers, which likewise is sort of difficult as long as revenue is, you know, fairly meaningfully below your capacity level. Is that a fair way to think about it? I don't know. It's correct. Characterization is meaningfully below our capacities, and I don't know that's an accurate statement or not, but overall it's a fast changing market and customers updating their models. Okay, we just keep it up. Yeah, I think we're being responsive to real demand. One thing we haven't touched on is that our channel inventories in each of the GEOs, major GEOs for us, are down in the quarter. They're also very lean. Right now we believe we're meeting real customer demand. Got it. That's great. By the way, Michael, what I meant was comparing the revenue guidance, revenue results, and guidance relative to a $4 billion level of capacity, there's a gap there. That's all I meant. Wasn't a criticism. It was, oh yeah, for billings and okay. It's not only for, it's for enterprise. We're building capacity towards it. That's the process. Got it. The other thing I wanted to ask about was to comment on the product development and revenue trajectory in three areas that you've highlighted in the past as sort of unique growth opportunities. One is modules, the other is converters, D-A and A-D converters. I think you hired a team a couple years ago. We haven't heard that much about it. The other is motion, which I know has ramped up, but I wonder how meaningful that's become relative to your overall. Thank you very much. Thank you very much. First thing, the e-commerce is kind of flopped, right? I answered your question, that part of your question, a few quarters ago. The good news is the module business is really growing, other than in the enterprise data and industrials, and again industrial sides, even consumer's sides. We offer those solutions that our customer doesn't want to get into the detailed design, and we provide a solution for them. These revenues next year are about 10%-15% of our total revenues, other than the enterprise data power modules. These actually are very much related to when we provide assisting solutions. We're transforming a company, as Bernie said earlier, to be system providers, as solution providers. That's what our customer wants. If they want a chip, also we provide chips. The same. Time to help MPS revenue growth. We're not depending on only selling chips. A few years ago, I'm talking about Thailand selling chips only, okay, and that's where our revenue grows. The other things you're talking about, data converter. The data converter is kind of slow moving, okay, and we are releasing a standard product for that, okay, and for only some $2 billion of revenues. I. Maybe contributes very little and that doesn't, will not move the needles. As a product and in the product categories that provides a total solution, that's a part of a picture that really benefits the top line growth in terms of solutions, emotions. Finally, we get a needle moving and it's been for a while. We get over about $100 million some in the past few years and they are not too bad. It's slower than the MPS total growth. Now robotics, and we see it, AI-driven robotics will be okay. We see a lot of opportunities and a lot of potential to grow in the next couple of years. We. Provide the total AI power and. Not. Only AI power, we provide all the actuators, actuator solutions and motion controls, as well as battery, BMS solutions. These all combine all together. The motion will grow a lot faster than in the past few years. Thank you. If there are any follow up questions, please raise your hand. There are no further questions. I'd like to just say a few closing comments. I'd like to thank you for all joining us this conference call. I look forward to talking again during the third quarter 2025 conference call, which will likely be held in late October. Thank you. Have a nice day.

Speaker 8: Welcome everyone to the MPS second quarter 2025 earnings webinar. My name is Arthur Lee and I will be the moderator for this webinar. Joining me today are Michael Hsing, CEO and Founder of MPS, Bernie Blegen, EVP and CFO, and Tony Balow, 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 involve risk and uncertainties. Welcome everyone to the MPS second quarter 2025 earnings webinar. welcome everyone to the mps second quarter 2025 earnings webinar My name is Arthur Lee and I will be the moderator for this webinar. my name is arthur lee and i will be the moderator for this webinar Joining me today are Michael Hsing, CEO and Founder of MPS, Bernie Blegen, EVP and CFO, and Tony Balow, Vice President of Finance. joining me today are michael hsing ceo and founder of mps bernie blegen evp and cfo and tony balow vice president of finance Earlier today along with our earnings announcement, MPS released a written commentary on the results of our operations. 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. 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 involve risk and uncertainties. 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 involve risk and uncertainties The 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 Q2 2025 earnings release, our Q2 2025 earnings commentary, 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 would like to turn the call over to Bernie Blegen. The 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 Q2 2025 earnings release, our Q2 2025 earnings commentary, and in our SEC filings, including our Form 10-K which can be found on our website. the 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 q2 2025 earnings release our q2 2025 earnings commentary 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. our statements are made as of today and we assume no obligation to update this information Now I would like to turn the call over to Bernie Blegen. now i would like to turn the call over to bernie blegen

Speaker 6: Thanks Arthur. Good afternoon and welcome to our Q2 2025 earnings call. In Q2, MPS achieved record quarterly revenue of $664.6 million, 4.2% higher than the first quarter of 2025 and 31.0% higher than Q2 2024. This performance reflected the ongoing strength of our diversified market strategy, consistent execution, continued innovation, and strong customer focus. Let me call out a few highlights from the second quarter. We continue to see diversified revenue growth across all of our end markets. We began initial shipments of our power solutions to support our customers. New AI ASIC-based products, storage, and compute revenue grew sequentially off a strong Q1 as we continue to see demand for both memory solutions and notebook power solutions. MPS continues to focus on innovation and solving our customers' most challenging problems. Thanks Arthur. thanks arthur Good afternoon and welcome to our Q2 2025 earnings call. good afternoon and welcome to our q2 2025 earnings call In Q2, MPS achieved record quarterly revenue of $664.6 million, 4.2% higher than the first quarter of 2025 and 31.0% higher than Q2 2024. in q2 mps achieved record quarterly revenue of $664.6 million 4.2% higher than the first quarter of 2025 and 31.0% higher than q2 2024 This performance reflected the ongoing strength of our diversified market strategy, consistent execution, continued innovation, and strong customer focus. this performance reflected the ongoing strength of our diversified market strategy consistent execution continued innovation and strong customer focus Let me call out a few highlights from the second quarter. let me call out a few highlights from the second quarter We continue to see diversified revenue growth across all of our end markets. we continue to see diversified revenue growth across all of our end markets We began initial shipments of our power solutions to support our customers. we began initial shipments of our power solutions to support our customers New AI ASIC-based products, storage, and compute revenue grew sequentially off a strong Q1 as we continue to see demand for both memory solutions and notebook power solutions. new ai asic-based products storage and compute revenue grew sequentially off a strong q1 as we continue to see demand for both memory solutions and notebook power solutions MPS continues to focus on innovation and solving our customers' most challenging problems. mps continues to focus on innovation and solving our customers' most challenging problems We continue to invest in new technology, expand into new markets, and diversify our end market application and global supply chain. This will allow us to capture further future growth opportunities, maintain supply chain 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. I will now open the webinar up for questions. We continue to invest in new technology, expand into new markets, and diversify our end market application and global supply chain. we continue to invest in new technology expand into new markets and diversify our end market application and global supply chain This will allow us to capture further future growth opportunities, maintain supply chain stability, and swiftly adapt to market changes as they occur. this will allow us to capture further future growth opportunities maintain supply chain 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. 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. i will now open the webinar up for questions

Speaker 8: Thank you Bernie and Analyst. 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 in the menu bar and then click the raise hand button. Our first question is from Tore Svanberg of Stifel. Tore, your line is now open. Thank you Bernie and Analyst. thank you bernie and a`nalyst I would now like to begin our Q&A session. 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 in the menu bar and then click the raise hand button. as a reminder if you would like to ask a question please click on the participants icon in the menu bar and then click the raise hand button Our first question is from Tore Svanberg of Stifel. our first question is from tore svanberg of stifel Tore, your line is now open. tore your line is now open

Speaker 2: Yes, thank you. Congratulations on another record quarter. Michael, Bernie, I was hoping you could talk a little bit more about the September quarter. What the setup is there. You're guiding for 8% sequential growth at the midpoint. I was just hoping you could give us some puts and takes of the six end markets in the September quarter. Yes, thank you. yes thank you Congratulations on another record quarter. congratulations on another record quarter Michael, Bernie, I was hoping you could talk a little bit more about the September quarter. michael bernie i was hoping you could talk a little bit more about the september quarter What the setup is there. what the setup is there You're guiding for 8% sequential growth at the midpoint. you're guiding for 8% sequential growth at the midpoint I was just hoping you could give us some puts and takes of the six end markets in the September quarter. i was just hoping you could give us some puts and takes of the six end markets in the september quarter

Speaker 6: Sure. Happy to, Tore. When we look at Q3, we've got enterprise data growing between 20% and 30% sequentially. We also see a seasonal uplift in consumer, and with the exception of storage and compute, all of our other lines of business are up high single digits. In storage and compute, we just have a little bit of caution primarily because you're coming off of two very strong quarters in Q1 and Q2. Sure. sure Happy to, Tore. happy to tore When we look at Q3, we've got enterprise data growing between 20% and 30% sequentially. when we look at q3 we've got enterprise data growing between 20% and 30% sequentially We also see a seasonal uplift in consumer, and with the exception of storage and compute, all of our other lines of business are up high single digits. we also see a seasonal uplift in consumer and with the exception of storage and compute all of our other lines of business are up high single digits In storage and compute, we just have a little bit of caution primarily because you're coming off of two very strong quarters in Q1 and Q2. in storage and compute we just have a little bit of caution primarily because you're coming off of two very strong quarters in q1 and q2

Speaker 2: That's great, caller. Just as my follow up, you mentioned the AI ASIC-based products programs now starting to ramp up. I was hoping you could add a bit more color there. Are we talking about multiple customers? Are these primarily vertical power architectures? I guess a really important question is back at the analyst day, you gave us that $4 billion SAM for your enterprise data market and there's a lot that's happened since then. I was just wondering if that number is starting to move quite a bit upward. That's great, caller. that's great caller Just as my follow up, you mentioned the AI ASIC-based products programs now starting to ramp up. just as my follow up you mentioned the ai asic-based products programs now starting to ramp up I was hoping you could add a bit more color there. i was hoping you could add a bit more color there Are we talking about multiple customers? are we talking about multiple customers Are these primarily vertical power architectures? are these primarily vertical power architectures I guess a really important question is back at the analyst day, you gave us that $4 billion SAM for your enterprise data market and there's a lot that's happened since then. i guess a really important question is back at the analyst day you gave us that $4 billion sam for your enterprise data market and there's a lot that's happened since then I was just wondering if that number is starting to move quite a bit upward. i was just wondering if that number is starting to move quite a bit upward

Speaker 13: Yeah, you're right. Since the endless day, things are changing fast and everything's good. After a couple of years of these enterprise data segments, and clearly you establish a winner or losers, and the NPSS appear to be winners. We do engage multiple customers, if it's not all large customers or large customers or potential customers. Like Amanda, we have a lot of design weights and design activities, and while their threatens are ramping up in the near terms, and also a lot of small emerging players, and we see the peripheral of not only the, in the data centers but all kind of applications. That's what we very excited in the long terms, the short term ones. I said in year terms it doesn't mean, okay, next six months, the next 12 months. I keep saying, okay, our forecast revenues is always a ±6-12 months. Yeah, you're right. yeah you're right Since the endless day, things are changing fast and everything's good. since the endless day things are changing fast and everything's good After a couple of years of these enterprise data segments, and clearly you establish a winner or losers, and the NPSS appear to be winners. after a couple of years of these enterprise data segments and clearly you establish a winner or losers and the npss appear to be winners We do engage multiple customers, if it's not all large customers or large customers or potential customers. we do engage multiple customers if it's not all large customers or large customers or potential customers Like Amanda, we have a lot of design weights and design activities, and while their threatens are ramping up in the near terms, and also a lot of small emerging players, and we see the peripheral of not only the, in the data centers but all kind of applications. like amanda we have a lot of design weights and design activities and while their threatens are ramping up in the near terms and also a lot of small emerging players and we see the peripheral of not only the in the data centers but all kind of applications That's what we very excited in the long terms, the short term ones. that's what we very excited in the long terms the short term ones I said in year terms it doesn't mean, okay, next six months, the next 12 months. i said in year terms it doesn't mean okay next six months the next 12 months I keep saying, okay, our forecast revenues is always a ± 6- 12 months. i keep saying okay our forecast revenues is always a ± 6- 12 months You said earlier is a $4 billion. That's what we said. That's where we see it, and we're going to get there. You said earlier is a $4 billion. you said earlier is a $4 billion That's what we said. that's what we said That's where we see it, and we're going to get there. that's where we see it and we're going to get there

Speaker 2: Great. Thank you and congrats again. Great. great Thank you and congrats again. thank you and congrats again

Speaker 13: Okay, thank you. Okay, thank you. okay thank you

Speaker 8: Our next question is from Chris Caso of Wolfe Research. Chris, your line is now open. Our next question is from Chris Caso of Wolfe Research. our next question is from chris caso of wolfe research Chris, your line is now open. chris your line is now open

Speaker 12: Yes, thanks. Good evening. I guess the first question is with regard to enterprise data. Previously you had provided some guidance on that to be flat ±20%. You've talked about guidance for the September quarter and any more visibility with regard to the full year guidance for that. Any more narrowing of that range and whatever kind of color you can provide on your expectations there. Yes, thanks. yes thanks Good evening. good evening I guess the first question is with regard to enterprise data. i guess the first question is with regard to enterprise data Previously you had provided some guidance on that to be flat ± 20%. previously you had provided some guidance on that to be flat ± 20% You've talked about guidance for the September quarter and any more visibility with regard to the full year guidance for that. you've talked about guidance for the september quarter and any more visibility with regard to the full year guidance for that Any more narrowing of that range and whatever kind of color you can provide on your expectations there. any more narrowing of that range and whatever kind of color you can provide on your expectations there

Speaker 6: Sure, Chris. The market, as Michael just said, remains dynamic. We have fairly short lead times even for Q4. We don't believe we have our arms around all the business that's likely to occur. That's just the nature of the dynamic of this fast-moving market. At Q2, we identified the range as being flat to down potentially 20%. While we're not guiding on Q4, in addition to the, you know, growing Q3 sequentially by 20-30%, I can say that Q4 will be up sequentially. Sure, Chris. sure chris The market, as Michael just said, remains dynamic. the market as michael just said remains dynamic We have fairly short lead times even for Q4. we have fairly short lead times even for q4 We don't believe we have our arms around all the business that's likely to occur. we don't believe we have our arms around all the business that's likely to occur That's just the nature of the dynamic of this fast-moving market. that's just the nature of the dynamic of this fast-moving market At Q2, we identified the range as being flat to down potentially 20%. at q2 we identified the range as being flat to down potentially 20% While we're not guiding on Q4, in addition to the, you know, growing Q3 sequentially by 20- 30%, I can say that Q4 will be up sequentially. while we're not guiding on q4 in addition to the you know growing q3 sequentially by 20- 30% i can say that q4 will be up sequentially

Speaker 13: Whatever we said in the beginning of the year, we feel comfortable. Whatever we said in the beginning of the year, we feel comfortable. whatever we said in the beginning of the year we feel comfortable

Speaker 12: Got it. Okay, that's helpful. Just in general, you've obviously listened to the calls from some of your peers that there's some degree of macro uncertainty out there. Some of the customers, some of your competitors rather, have expressed some caution and some concern about some pull ins in certain areas. I wonder if you could comment on that with respect to your business and in general as compared to 90 days ago. Is there anything that's changed in your view of the overall markets or your expectations with respect to the year? Got it. got it Okay, that's helpful. okay that's helpful Just in general, you've obviously listened to the calls from some of your peers that there's some degree of macro uncertainty out there. just in general you've obviously listened to the calls from some of your peers that there's some degree of macro uncertainty out there Some of the customers, some of your competitors rather, have expressed some caution and some concern about some pull ins in certain areas. some of the customers some of your competitors rather have expressed some caution and some concern about some pull ins in certain areas I wonder if you could comment on that with respect to your business and in general as compared to 90 days ago. i wonder if you could comment on that with respect to your business and in general as compared to 90 days ago Is there anything that's changed in your view of the overall markets or your expectations with respect to the year? is there anything that's changed in your view of the overall markets or your expectations with respect to the year

Speaker 13: I'll give you an arrogant answer. Sorry, I don't listen to any other cost. You tell me that maybe I know from you. We focus ourselves as always. Market condition is a market conditions. Again, we provide the components to the multiple segments. That's where we focus on it, and we focus on the internal executions and executions with our customers demanding in the futures. That's what we always do, and whatever happens, happens. As long as we're much better than everybody else. I'll give you an arrogant answer. i'll give you an arrogant answer Sorry, I don't listen to any other cost. sorry i don't listen to any other cost You tell me that maybe I know from you. you tell me that maybe i know from you We focus ourselves as always. we focus ourselves as always Market condition is a market conditions. market condition is a market conditions Again, we provide the components to the multiple segments. again we provide the components to the multiple segments That's where we focus on it, and we focus on the internal executions and executions with our customers demanding in the futures. that's where we focus on it and we focus on the internal executions and executions with our customers demanding in the futures That's what we always do, and whatever happens, happens. that's what we always do and whatever happens happens As long as we're much better than everybody else. as long as we're much better than everybody else

Speaker 9: If I could add to that. If I could add to that. if i could add to that In. In. in Q2 we used the phrase that we were cautiously optimistic about the outlook for the balance of the year. I think that still describes how we feel from the standpoint that we have seen broad-based, strong, continued strong demand profile in all of our end markets. However, the ordering pattern, because there is a little bit different risk pattern, remains with short lead times. As a result, we're not necessarily building backlog that we have visibility out beyond two quarters. That's a little bit different from most recoveries that we've experienced. I want to stress that we feel very good about our overall positioning for the remainder of the year. Q2 we used the phrase that we were cautiously optimistic about the outlook for the balance of the year. q2 we used the phrase that we were cautiously optimistic about the outlook for the balance of the year I think that still describes how we feel from the standpoint that we have seen broad-based, strong, continued strong demand profile in all of our end markets. i think that still describes how we feel from the standpoint that we have seen broad-based strong continued strong demand profile in all of our end markets However, the ordering pattern, because there is a little bit different risk pattern, remains with short lead times. however the ordering pattern because there is a little bit different risk pattern remains with short lead times As a result, we're not necessarily building backlog that we have visibility out beyond two quarters. as a result we're not necessarily building backlog that we have visibility out beyond two quarters That's a little bit different from most recoveries that we've experienced. that's a little bit different from most recoveries that we've experienced I want to stress that we feel very good about our overall positioning for the remainder of the year. i want to stress that we feel very good about our overall positioning for the remainder of the year

Speaker 12: Helpful. Thank you. Helpful. helpful Thank you. thank you

Speaker 8: Our next question is from Quinn Bolton of Needham. Quinn, your line is now open. Our next question is from Quinn Bolton of Needham. our next question is from quinn bolton of needham Quinn, your line is now open. quinn your line is now open

Speaker 5: Thank you. Congratulations on another good quarter, Michael, Bernie, and Tony. I guess, Michael or Bernie, just wanted to ask, as you start to ship into some of these ASIC platforms, can you give us a sense, are the ASIC platforms, do they tend to be sourced by multiple PMIC suppliers, or do you tend to see sole, you know, sole source sockets for a given generation of an ASIC, and then the ASIC vendor may source the first generation with yourself and, say, a second generation with a competitor? That's a question I've gotten a fair amount, and just wondering if you could give us some sense on whether those ASIC programs tend to be single sourced or multiple sourced. Thank you. thank you Congratulations on another good quarter, Michael, Bernie, and Tony. congratulations on another good quarter michael bernie and tony I guess, Michael or Bernie, just wanted to ask, as you start to ship into some of these ASIC platforms, can you give us a sense, are the ASIC platforms, do they tend to be sourced by multiple PMIC suppliers, or do you tend to see sole, you know, sole source sockets for a given generation of an ASIC, and then the ASIC vendor may source the first generation with yourself and, say, a second generation with a competitor? i guess michael or bernie just wanted to ask as you start to ship into some of these asic platforms can you give us a sense are the asic platforms do they tend to be sourced by multiple pmic suppliers or do you tend to see sole you know sole source sockets for a given generation of an asic and then the asic vendor may source the first generation with yourself and say a second generation with a competitor That's a question I've gotten a fair amount, and just wondering if you could give us some sense on whether those ASIC programs tend to be single sourced or multiple sourced. that's a question i've gotten a fair amount and just wondering if you could give us some sense on whether those asic programs tend to be single sourced or multiple sourced

Speaker 13: Yeah, we see a variety of single-sourced and double-sourced, multiple-sourced, high-cost source and the low-cost source, all source. We deliver what our customer, we develop assisting vertical power, which is more module-like solutions and even a chip site, and we do whatever our customers demand. Maybe I can say that. Okay, too vague. Okay. I disappointed that you didn't ask any more specific technical questions. Yeah, we see a variety of single-sourced and double- sourced, multiple- sourced, high-cost source and the low-cost source, all source. yeah we see a variety of single-sourced and double- sourced multiple- sourced high-cost source and the low-cost source all source We deliver what our customer, we develop assisting vertical power, which is more module-like solutions and even a chip site, and we do whatever our customers demand. we deliver what our customer we develop assisting vertical power which is more module-like solutions and even a chip site and we do whatever our customers demand Maybe I can say that. maybe i can say that Okay, too vague. okay too vague Okay. okay I disappointed that you didn't ask any more specific technical questions. i disappointed that you didn't ask any more specific technical questions

Speaker 5: I'll save those for Analyst Day or maybe the callback. I'll save those for Analyst Day or maybe the callback. i'll save those for analyst day or maybe the callback

Speaker 6: Let me add real quickly, each of the end customers has their own reasons for how they're selecting their suppliers. Some of them, it's supply chain resilience, others want innovation. Like every opportunity we have, we provide strong customer focus and consistent execution. That's what makes us feel that we're very well positioned across all of these opportunities. Let me add real quickly, each of the end customers has their own reasons for how they're selecting their suppliers. let me add real quickly each of the end customers has their own reasons for how they're selecting their suppliers Some of them, it's supply chain resilience, others want innovation. some of them it's supply chain resilience others want innovation Like every opportunity we have, we provide strong customer focus and consistent execution. like every opportunity we have we provide strong customer focus and consistent execution That's what makes us feel that we're very well positioned across all of these opportunities. that's what makes us feel that we're very well positioned across all of these opportunities Yeah. Yeah. yeah

Speaker 13: What I tell you, them high cost, low cost, multiple customer, one, one, one source, two source, multiple sources, they all source nothing but the truth. What I tell you, them high cost, low cost, multiple customer, one, one, one source, two source, multiple sources, they all source nothing but the truth. what i tell you them high cost low cost multiple customer one one one source two source multiple sources they all source nothing but the truth

Speaker 5: Okay, got it. The second question, I'll move to the automotive end market. Kind of wondering if you guys could give us your outlook for the second half of the year. What are the biggest drivers of growth? I think you have a couple of platforms with Western OEMs set to ramp where you have some pretty good content. Wondering the extent that those ramp, does that drive growth half-over-half in the automotive business, or are you looking for sort of more of a flattish half-over-half in that segment in the second half. Okay, got it. okay got it The second question, I'll move to the automotive end market. the second question i'll move to the automotive end market Kind of wondering if you guys could give us your outlook for the second half of the year. kind of wondering if you guys could give us your outlook for the second half of the year What are the biggest drivers of growth? what are the biggest drivers of growth I think you have a couple of platforms with Western OEMs set to ramp where you have some pretty good content. i think you have a couple of platforms with western oems set to ramp where you have some pretty good content Wondering the extent that those ramp, does that drive growth half- over- half in the automotive business, or are you looking for sort of more of a flattish half-over-half in that segment in the second half. wondering the extent that those ramp does that drive growth half- over- half in the automotive business or are you looking for sort of more of a flattish half-over-half in that segment in the second half

Speaker 6: Automotive. We've been very consistent on how we've described the rollout for calendar 2025. We enjoyed a nice step up sequentially from Q4-Q1. We anticipated that would be flattening a little bit in the middle part of the year and then picking up end of Q3 and Q4 as these new content opportunities come online. While there is some back and forth on the SAR and units, and in particular with individual companies, we're less affected by that than the timing of these new content ramps. Automotive. automotive We've been very consistent on how we've described the rollout for calendar 2025. we've been very consistent on how we've described the rollout for calendar 2025 We enjoyed a nice step up sequentially from Q4- Q1. we enjoyed a nice step up sequentially from q4- q1 We anticipated that would be flattening a little bit in the middle part of the year and then picking up end of Q3 and Q4 as these new content opportunities come online. we anticipated that would be flattening a little bit in the middle part of the year and then picking up end of q3 and q4 as these new content opportunities come online While there is some back and forth on the SAR and units, and in particular with individual companies, we're less affected by that than the timing of these new content ramps. while there is some back and forth on the sar and units and in particular with individual companies we're less affected by that than the timing of these new content ramps

Speaker 9: Quinn, I think just one thing to add on that, right. I know we're hyper focused just on the year, but I think if we step back and look longer term into 2026, the opportunities around 48V, some of the zonal architectures, I think they continue to be opportunity for us going forward, and this will be a growth area for us over the long term. Quinn, I think just one thing to add on that, right. quinn i think just one thing to add on that right I know we're hyper focused just on the year, but I think if we step back and look longer term into 2026, the opportunities around 48V, some of the zonal architectures, I think they continue to be opportunity for us going forward, and this will be a growth area for us over the long term. i know we're hyper focused just on the year but i think if we step back and look longer term into 2026 the opportunities around 48v some of the zonal architectures i think they continue to be opportunity for us going forward and this will be a growth area for us over the long term

Speaker 5: Thank you. Thank you. thank you

Speaker 13: Okay, there are too many things I can't remember. Okay, there are too many things I can't remember. okay, there are too many things i can't remember

Speaker 8: Our next question is from Ross Seymore of Deutsche Bank. Ross, your line is now open. Our next question is from Ross Seymore of Deutsche Bank. our next question is from ross seymore of deutsche bank Ross, your line is now open. ross your line is now open

Speaker 10: Hi guys. Congrats on the quarter and guide. Just wanted to dive first into the enterprise data side. You mentioned in your preamble or the press release that both the AI side and the server side were strong. Can you talk a little bit about any differences between those two growth rates, composition, kind of the breakdown of EDM between those in both 2Q and 3Q. Hi guys. hi guys Congrats on the quarter and guide. congrats on the quarter and guide Just wanted to dive first into the enterprise data side. just wanted to dive first into the enterprise data side You mentioned in your preamble or the press release that both the AI side and the server side were strong. you mentioned in your preamble or the press release that both the ai side and the server side were strong Can you talk a little bit about any differences between those two growth rates, composition, kind of the breakdown of EDM between those in both 2Q and 3Q. can you talk a little bit about any differences between those two growth rates composition kind of the breakdown of edm between those in both 2q and 3q

Speaker 6: Again, something that we've talked about as it relates to enterprise data is that the lines between traditional CPU and AI are getting a little blurry. It's very hard to make clear statements of relative growth or importance. Having said that, I think that the overall profile both for the near term or midterm and the long term remains very positive. Again, something that we've talked about as it relates to enterprise data is that the lines between traditional CPU and AI are getting a little blurry. again something that we've talked about as it relates to enterprise data is that the lines between traditional cpu and ai are getting a little blurry It's very hard to make clear statements of relative growth or importance. it's very hard to make clear statements of relative growth or importance Having said that, I think that the overall profile both for the near term or midterm and the long term remains very positive. having said that i think that the overall profile both for the near term or midterm and the long term remains very positive

Speaker 10: Great. I guess as my follow up there's been a decent number of concerns about pull ins and tariff related activity. Obviously you haven't mentioned anything on that, but outside of the enterprise data segment, when we think about the cyclical recovery that's happening, are you seeing any evidence of that kind of tariff influenced behavior, and or do you think this, the cycle itself is really what's driving demand? Great. great I guess as my follow up there's been a decent number of concerns about pull ins and tariff related activity. i guess as my follow up there's been a decent number of concerns about pull ins and tariff related activity Obviously you haven't mentioned anything on that, but outside of the enterprise data segment, when we think about the cyclical recovery that's happening, are you seeing any evidence of that kind of tariff influenced behavior, and or do you think this, the cycle itself is really what's driving demand? obviously you haven't mentioned anything on that but outside of the enterprise data segment when we think about the cyclical recovery that's happening are you seeing any evidence of that kind of tariff influenced behavior and or do you think this the cycle itself is really what's driving demand

Speaker 6: We believe this cycle is driving demand. We really don't have enough information to support a change in our customers' ordering pattern that would be related to tariffs. We believe this cycle is driving demand. we believe this cycle is driving demand We really don't have enough information to support a change in our customers' ordering pattern that would be related to tariffs. we really don't have enough information to support a change in our customers' ordering pattern that would be related to tariffs

Speaker 13: We don't want to pretend to know that. These are our control, and whatever happens, happens. We don't want to pretend to know that. we don't want to pretend to know that These are our control, and whatever happens, happens. these are our control and whatever happens happens

Speaker 10: Perfect. Thank you, guys. Perfect. perfect Thank you, guys. thank you guys

Speaker 13: Oh, by the way, our inventory is low. Ross. Oh, by the way, our inventory is low. oh by the way our inventory is low Ross. ross

Speaker 10: I didn't want to go there, but. I didn't want to go there, but. i didn't want to go there but It was nice to see. It was nice to see. it was nice to see Thank you. Thank you. thank you

Speaker 8: Our next question is from Rick Schafer of Oppenheimer. Rick, your line is now open. Our next question is from Rick Schafer of Oppenheimer. our next question is from rick schafer of oppenheimer Rick, your line is now open. rick your line is now open

Speaker 1: Yeah, thanks guys. Congrats on another nice quarter. You guys make it look easy. I wanted to ask a quick follow-up on the $4 billion enterprise data SAM number. I was curious if that considers the eventual conversion of server CPU to 48V, does that factor that in or is that incremental to that number? Second part of that question, I'm curious how much does HVDC increase that SAM or that TAM? When do you expect direct current rack power to start to really take off? I think you started sampling last quarter if I'm correct. Yeah, thanks guys. yeah thanks guys Congrats on another nice quarter. congrats on another nice quarter You guys make it look easy. you guys make it look easy I wanted to ask a quick follow-up on the $4 billion enterprise data SAM number. i wanted to ask a quick follow-up on the $4 billion enterprise data sam number I was curious if that considers the eventual conversion of server CPU to 48V, does that factor that in or is that incremental to that number? i was curious if that considers the eventual conversion of server cpu to 48v does that factor that in or is that incremental to that number Second part of that question, I'm curious how much does HVDC increase that SAM or that TAM? second part of that question i'm curious how much does hvdc increase that sam or that tam When do you expect direct current rack power to start to really take off? when do you expect direct current rack power to start to really take off I think you started sampling last quarter if I'm correct. i think you started sampling last quarter if i'm correct

Speaker 13: Yes. Okay, that was a. These are the 800V systems and 400V systems, and yes, we'll start to sampling. These are not in the factors, and both what you mentioned, the 48V, 48V servers, and also the 48V systems and 800V system where this far in the future. Maybe far in the future is maybe a couple years, a year, 18-24 months kind of things, or maybe even longer. Okay, we don't want to call the market. We are the only solution providers, and these one we believe ultimately all data center will convert into this type of a 48V and 800V systems. That's what we targeting. That's what we emerge and focus our development. Yes. yes Okay, that was a. okay that was a These are the 800 V systems and 400V systems, and yes, we'll start to sampling. these are the 800 v systems and 400v systems and yes we'll start to sampling These are not in the factors, and both what you mentioned, the 48V, 48V servers, and also the 48V systems and 800V system where this far in the future. these are not in the factors and both what you mentioned the 48v 48v servers and also the 48v systems and 800v system where this far in the future Maybe far in the future is maybe a couple years, a year, 18- 24 months kind of things, or maybe even longer. maybe far in the future is maybe a couple years a year 18- 24 months kind of things or maybe even longer Okay, we don't want to call the market. okay we don't want to call the market We are the only solution providers, and these one we believe ultimately all data center will convert into this type of a 48V and 800V systems. we are the only solution providers and these one we believe ultimately all data center will convert into this type of a 48v and 800v systems That's what we targeting. that's what we targeting That's what we emerge and focus our development. that's what we emerge and focus our development Not really in the last couple years, we said many years ago, even 2016, we foresee 48V that would be the solution, and we became one of the key supplier in last couple years. Three years ago, we started working on the 800V systems, and also not only that, also the BMS, the Battery Management Systems, and these are absolutely fit for that type of applications and not only for vehicles, energy storage, and the data centers. This is all about the energy utilizations. Not really in the last couple years, we said many years ago, even 2016, we foresee 48V that would be the solution, and we became one of the key supplier in last couple years. not really in the last couple years we said many years ago even 2016 we foresee 48v that would be the solution and we became one of the key supplier in last couple years Three years ago, we started working on the 800V systems, and also not only that, also the BMS, the Battery Management Systems, and these are absolutely fit for that type of applications and not only for vehicles, energy storage, and the data centers. three years ago we started working on the 800v systems and also not only that also the bms the battery management systems and these are absolutely fit for that type of applications and not only for vehicles energy storage and the data centers This is all about the energy utilizations. this is all about the energy utilizations

Speaker 9: Hey Rick, the only thing I'd add, I know you asked a very specific enterprise data question, but remember we kind of think about the overall data center opportunity, and you know, whether that's optical module growth, whether that's going to be memory. All those things, I think, play in as opportunities for us. I'm just trying to get us to step back a bit from only focusing on the enterprise data segment. Hey Rick, the only thing I'd add, I know you asked a very specific enterprise data question, but remember we kind of think about the overall data center opportunity, and you know, whether that's optical module growth, whether that's going to be memory. hey rick the only thing i'd add i know you asked a very specific enterprise data question but remember we kind of think about the overall data center opportunity and you know whether that's optical module growth whether that's going to be memory All those things, I think, play in as opportunities for us. all those things i think play in as opportunities for us I'm just trying to get us to step back a bit from only focusing on the enterprise data segment. i'm just trying to get us to step back a bit from only focusing on the enterprise data segment

Speaker 1: I appreciate that, Tony. That actually leads me to my second question, which is I know it's not your largest segment, but communication seems to be firing on all cylinders. I mean satellite, Wi-Fi, 5G, and transceiver power that you just mentioned. I didn't know if you guys could elaborate at all or talk at all about order-to-order trends, order velocities there, outlook for that segment, like just basically any color you'd be able to share there. I appreciate that, Tony. i appreciate that tony That actually leads me to my second question, which is I know it's not your largest segment, but communication seems to be firing on all cylinders. that actually leads me to my second question which is i know it's not your largest segment but communication seems to be firing on all cylinders I mean satellite, Wi-Fi, 5G, and transceiver power that you just mentioned. i mean satellite wi-fi 5g and transceiver power that you just mentioned I didn't know if you guys could elaborate at all or talk at all about order-to-order trends, order velocities there, outlook for that segment, like just basically any color you'd be able to share there. i didn't know if you guys could elaborate at all or talk at all about order-to-order trends order velocities there outlook for that segment like just basically any color you'd be able to share there

Speaker 6: If you look at about a year ago, we saw a large step up from Q2 2023-Q2 2024. A lot of that was in the core networking telecom business. That element has plateaued. At the same time, we saw growth in the optical modules within the data center. That's been growing very nicely. Right now I think that we're positioned very well, but I don't necessarily have a strong signal of additional investment in the network category. If you look at about a year ago, we saw a large step up from Q2 2023- Q2 2024. if you look at about a year ago we saw a large step up from q2 2023- q2 2024 A lot of that was in the core networking telecom business. a lot of that was in the core networking telecom business That element has plateaued. that element has plateaued At the same time, we saw growth in the optical modules within the data center. at the same time we saw growth in the optical modules within the data center That's been growing very nicely. that's been growing very nicely Right now I think that we're positioned very well, but I don't necessarily have a strong signal of additional investment in the network category. right now i think that we're positioned very well but i don't necessarily have a strong signal of additional investment in the network category

Speaker 1: Okay, thanks guys. Okay, thanks guys. okay thanks guys

Speaker 8: Our next question is from Josh Buchalter of Cowen. Josh, your line is now open. Our next question is from Josh Buchalter of Cowen. our next question is from josh buchalter of cowen Josh, your line is now open. josh your line is now open

Speaker 11: Hey guys, thank you for taking my question and congrats on the record results as well. My shock, but I'm also going to ask about enterprise data as we get into the back half of this year. Any metrics or guidelines you can give us on how much this new AI ASIC is contributing to the back half of the year, how it compares to, you know, your lead GPU customer. I mean, is this opportunity comparable in size to what you, you know, you've been able to generate on the GPU side? Thank you. Hey guys, thank you for taking my question and congrats on the record results as well. hey guys thank you for taking my question and congrats on the record results as well My shock, but I'm also going to ask about enterprise data as we get into the back half of this year. my shock but i'm also going to ask about enterprise data as we get into the back half of this year Any metrics or guidelines you can give us on how much this new AI ASIC is contributing to the back half of the year, how it compares to, you know, your lead GPU customer. any metrics or guidelines you can give us on how much this new ai asic is contributing to the back half of the year how it compares to you know your lead gpu customer I mean, is this opportunity comparable in size to what you, you know, you've been able to generate on the GPU side? i mean is this opportunity comparable in size to what you you know you've been able to generate on the gpu side Thank you. thank you

Speaker 13: All these questions are being asked being similar questions that we all answered. Okay, we're looking in the futures, even the near term future looking good. That's only about what, 25% of MPS business. The bigger revenue growth is the rest of the company. I hope we should have more question on the rest of the business. All these questions are being asked being similar questions that we all answered. all these questions are being asked being similar questions that we all answered Okay, we're looking in the futures, even the near term future looking good. okay we're looking in the futures even the near term future looking good That's only about what, 25% of MPS business. that's only about what 25% of mps business The bigger revenue growth is the rest of the company. the bigger revenue growth is the rest of the company I hope we should have more question on the rest of the business. i hope we should have more question on the rest of the business

Speaker 11: I will take the subtle hint there and ask about auto. I will take the subtle hint there and ask about auto. i will take the subtle hint there and ask about auto

Speaker 13: Is auto and the enterprise data add together maybe only 40%. How about something else? Is auto and the enterprise data add together maybe only 40%. is auto and the enterprise data add together maybe only 40% How about something else? how about something else

Speaker 11: All right. All right. all right I mean, storage and compute, then we can take this anywhere. I mean, storage and compute, then we can take this anywhere. i mean storage and compute then we can take this anywhere

Speaker 13: No, I'm just joking. Ask whatever you want to ask. No, I'm just joking. no i'm just joking Ask whatever you want to ask. ask whatever you want to ask I'm going to stick with storage and compute then. You mentioned some caution there into the back half of the year, is that sort of an inventory dynamic? You had gained a bunch of share, I believe on DDR5 to start the year. Is there still more room to run with from that on the share and content side on the DDR side within storage and compute? Thank you. I'm going to stick with storage and compute then. i'm going to stick with storage and compute then You mentioned some caution there into the back half of the year, is that sort of an inventory dynamic? you mentioned some caution there into the back half of the year is that sort of an inventory dynamic You had gained a bunch of share, I believe on DDR5 to start the year. you had gained a bunch of share i believe on ddr5 to start the year Is there still more room to run with from that on the share and content side on the DDR side within storage and compute? is there still more room to run with from that on the share and content side on the ddr side within storage and compute Thank you. thank you

Speaker 6: Yeah, Josh, that's an excellent question because we had a very significant step up in our position competitively as well as from revenue in both storage and notebook. The reason that I use the term cautious is because both end markets tend to be a different demand profile from like automotive, for example. What I mean by that is historically notebooks have always been like Consumer. Yeah, Josh, that's an excellent question because we had a very significant step up in our position competitively as well as from revenue in both storage and notebook. yeah josh that's an excellent question because we had a very significant step up in our position competitively as well as from revenue in both storage and notebook The reason that I use the term cautious is because both end markets tend to be a different demand profile from like automotive, for example. the reason that i use the term cautious is because both end markets tend to be a different demand profile from like automotive for example What I mean by that is historically notebooks have always been like Consumer. what i mean by that is historically notebooks have always been like consumer And been. And been. and been Expansion in Q3. We had such an atypical seasonality with a buildup in Q1 and Q2 that it just pays to be a little bit cautious there. Likewise on memory, I have nothing to indicate that there's a slowdown or change of market positioning. Again, it's just that in the past they've had historic boom and bust cycles. That's the only reason that I'm offering now. Having said that, we were pleasantly surprised in Q2 that the results for that particular group came in better than expected. Yeah. Expansion in Q3. expansion in q3 We had such an atypical seasonality with a buildup in Q1 and Q2 that it just pays to be a little bit cautious there. we had such an atypical seasonality with a buildup in q1 and q2 that it just pays to be a little bit cautious there Likewise on memory, I have nothing to indicate that there's a slowdown or change of market positioning. likewise on memory i have nothing to indicate that there's a slowdown or change of market positioning Again, it's just that in the past they've had historic boom and bust cycles. again it's just that in the past they've had historic boom and bust cycles That's the only reason that I'm offering now. that's the only reason that i'm offering now Having said that, we were pleasantly surprised in Q2 that the results for that particular group came in better than expected. having said that we were pleasantly surprised in q2 that the results for that particular group came in better than expected Yeah. yeah

Speaker 13: You know we grow significantly this year, right? You know we grow significantly this year, right? you know we grow significantly this year right

Speaker 6: Yeah. Yeah. yeah Our full year results are going to be well above what we've been doing. We're probably in for the full year will be between 40%-50% growth for the year. Our full year results are going to be well above what we've been doing. our full year results are going to be well above what we've been doing We're probably in for the full year will be between 40%- 50% growth for the year. we're probably in for the full year will be between 40%- 50% growth for the year

Speaker 13: Yeah, that's the reason Bernie asked you. Yeah, that's the reason Bernie asked you. yeah that's the reason bernie asked you Okay. Okay. okay If you're more cautious, okay, not going to be 100% next quarters. If you're more cautious, okay, not going to be 100% next quarters. if you're more cautious okay not going to be 100% next quarters Okay. Okay. okay That's what we mean. Relatively, what cautious means, okay, cautious is not expected another 50% or higher. That's what we mean. that's what we mean Relatively, what cautious means, okay, cautious is not expected another 50% or higher. relatively what cautious means okay cautious is not expected another 50% or higher

Speaker 6: Yeah. Yeah. yeah

Speaker 11: Got it. Got it. got it Thanks, guys. Next quarter's questions on TVs. Thanks, guys. thanks guys Next quarter's questions on TVs. next quarter's questions on tvs

Speaker 9: Okay. Okay. okay

Speaker 13: All right, thank you. All right, thank you. all right thank you

Speaker 8: Our next question is from Gary Mobley of Loop Capital. Gary, your line is now open. Our next question is from Gary Mobley of Loop Capital. our next question is from gary mobley of loop capital Gary, your line is now open. gary your line is now open

Speaker 4: Hey guys, thanks for taking my question. Bernie, I appreciate the fact that you don't have a lot of visibility out into the fourth quarter, but I want to ask about the seasonality of the fourth quarter. Typically Q4 might be down, what, mid single digit % sequentially. How do you see it shaping up this year? Hey guys, thanks for taking my question. hey guys thanks for taking my question Bernie, I appreciate the fact that you don't have a lot of visibility out into the fourth quarter, but I want to ask about the seasonality of the fourth quarter. bernie i appreciate the fact that you don't have a lot of visibility out into the fourth quarter but i want to ask about the seasonality of the fourth quarter Typically Q4 might be down, what, mid single digit % sequentially. typically q4 might be down what mid single digit % sequentially How do you see it shaping up this year? how do you see it shaping up this year

Speaker 13: I don't have a seasonality anymore. Yeah, okay. I don't have a seasonality anymore. i don't have a seasonality anymore Yeah, okay. yeah okay

Speaker 6: I think Michael said it all there. If you look at that historic trend and I don't know the last time we actually fulfilled being down, it's in a fairly narrow range. I think flattish is probably the easiest way to describe the outlook. Helpful. I think Michael said it all there. i think michael said it all there If you look at that historic trend and I don't know the last time we actually fulfilled being down, it's in a fairly narrow range. if you look at that historic trend and i don't know the last time we actually fulfilled being down it's in a fairly narrow range I think flattish is probably the easiest way to describe the outlook. i think flattish is probably the easiest way to describe the outlook Helpful. helpful

Speaker 4: All right, it sounds like you've got plenty of capacity, plenty of inventory. Can you remind us what sort of annual revenue you could support with your internal and external capacity? Can you confirm whether or not the book to bill ratio is in fact trending above parity? All right, it sounds like you've got plenty of capacity, plenty of inventory. all right it sounds like you've got plenty of capacity plenty of inventory Can you remind us what sort of annual revenue you could support with your internal and external capacity? can you remind us what sort of annual revenue you could support with your internal and external capacity Can you confirm whether or not the book to bill ratio is in fact trending above parity? can you confirm whether or not the book to bill ratio is in fact trending above parity

Speaker 6: Yeah. Yeah. yeah Two separate questions, but I'll try to address pretty quickly. Two separate questions, but I'll try to address pretty quickly. two separate questions but i'll try to address pretty quickly

Speaker 13: I'll answer the second part, our inventory is low. I'll answer the second part, our inventory is low. i'll answer the second part our inventory is low Our current capacity, and we've talked about this in the past, is to be able to support $4 billion of revenue with diversification of 50% of that outside of China. What we're trying to do is be able to support all of our customers' requirements in whatever supply chain profile they're looking for. When you look at the book-to-bill ratio, I commented on this earlier that we're having sort of an atypical ordering pattern. When you consider that we do believe we're in the middle of a cyclical recovery that's very broad-based, what I mean by that is the ordering patterns are much more short-term. We're not building book-to-bill ratios of like 1.4/1.5 where we'd have backlog continuing out into Q1 and Q2 of next year. It's really a more near-term focus. Our current capacity, and we've talked about this in the past, is to be able to support $4 billion of revenue with diversification of 50% of that outside of China. our current capacity and we've talked about this in the past is to be able to support $4 billion of revenue with diversification of 50% of that outside of china What we're trying to do is be able to support all of our customers' requirements in whatever supply chain profile they're looking for. what we're trying to do is be able to support all of our customers' requirements in whatever supply chain profile they're looking for When you look at the book-to-bill ratio, I commented on this earlier that we're having sort of an atypical ordering pattern. when you look at the book-to-bill ratio i commented on this earlier that we're having sort of an atypical ordering pattern When you consider that we do believe we're in the middle of a cyclical recovery that's very broad-based , what I mean by that is the ordering patterns are much more short-term . when you consider that we do believe we're in the middle of a cyclical recovery that's very broad-based what i mean by that is the ordering patterns are much more short-term We're not building book-to-bill ratios of like 1.4/ 1.5 where we'd have backlog continuing out into Q1 and Q2 of next year. we're not building book-to-bill ratios of like 1.4/ 1.5 where we'd have backlog continuing out into q1 and q2 of next year It's really a more near-term focus. it's really a more near-term focus With those short lead times, that's the only reason I have a little bit of concern about Q4 and I don't want to send a negative signal. It's just that that's the nature of the demand profile. With those short lead times, that's the only reason I have a little bit of concern about Q4 and I don't want to send a negative signal. with those short lead times that's the only reason i have a little bit of concern about q4 and i don't want to send a negative signal It's just that that's the nature of the demand profile. it's just that that's the nature of the demand profile That's it. That's it. that's it I don't want to send a negative signal or the low inventories. We are expanding our supply chains and we can meet it in Q4 in our customer demand. For next year, we start to, even now we continuously qualify the newer supplier and whatever it takes to meet the customer demand, that's what we always do. I don't want to send a negative signal or the low inventories. i don't want to send a negative signal or the low inventories We are expanding our supply chains and we can meet it in Q4 in our customer demand. we are expanding our supply chains and we can meet it in q4 in our customer demand For next year, we start to, even now we continuously qualify the newer supplier and whatever it takes to meet the customer demand, that's what we always do. for next year we start to even now we continuously qualify the newer supplier and whatever it takes to meet the customer demand that's what we always do

Speaker 9: The only thing I'd add, I don't know if it was part of your question, was in addition to the overall capacity, the geographical balance of it, and what we've said is we would by the end of the year have half of that capacity outside of China, half of it inside. To Michael's point, we just want to be able to and believe we can meet customer demand no matter how they want to route their product. The only thing I'd add, I don't know if it was part of your question, was in addition to the overall capacity, the geographical balance of it, and what we've said is we would by the end of the year have half of that capacity outside of China, half of it inside. the only thing i'd add i don't know if it was part of your question was in addition to the overall capacity the geographical balance of it and what we've said is we would by the end of the year have half of that capacity outside of china half of it inside To Michael's point, we just want to be able to and believe we can meet customer demand no matter how they want to route their product. to michael's point we just want to be able to and believe we can meet customer demand no matter how they want to route their product

Speaker 4: Thank you, guys. Thank you, guys. thank you guys

Speaker 8: Our next question is from Kelsey Chia of Citi Research. Kelsey, your line is now open. Our next question is from Kelsey Chia of Citi Research. our next question is from kelsey chia of citi research Kelsey, your line is now open. kelsey your line is now open

Speaker 7: Hi Michael and Bernie. Congrats on your strong results. I have a question on customer concentration. It's great to hear that you guys are shipping to the ASIC platforms. Does it mean that MPS is sort of back to the historical kind of diversified growth where there's no one customer that's more than 5% of your sales by the end of the year, or is the ASIC ramp sort of lumpy as well that can tilt that kind of customer concentration? Hi Michael and Bernie. hi michael and bernie Congrats on your strong results. congrats on your strong results I have a question on customer concentration. i have a question on customer concentration It's great to hear that you guys are shipping to the ASIC platforms. it's great to hear that you guys are shipping to the asic platforms Does it mean that MPS is sort of back to the historical kind of diversified growth where there's no one customer that's more than 5% of your sales by the end of the year, or is the ASIC ramp sort of lumpy as well that can tilt that kind of customer concentration? does it mean that mps is sort of back to the historical kind of diversified growth where there's no one customer that's more than 5% of your sales by the end of the year or is the asic ramp sort of lumpy as well that can tilt that kind of customer concentration

Speaker 6: Yeah, I think that when we had the high customer concentration, particularly in enterprise data, that was an aberration from our normal model of being broadly diversified in terms of customers and markets and geography. I think now that the portfolio of market entrants is starting to build up and we're going to have exposure to all of those opportunities. You'll see us go back to a more normal profile of customers, not contributing more than mid, mid high single digits. Yeah, I think that when we had the high customer concentration, particularly in enterprise data, that was an aberration from our normal model of being broadly diversified in terms of customers and markets and geography. yeah i think that when we had the high customer concentration particularly in enterprise data that was an aberration from our normal model of being broadly diversified in terms of customers and markets and geography I think now that the portfolio of market entrants is starting to build up and we're going to have exposure to all of those opportunities. i think now that the portfolio of market entrants is starting to build up and we're going to have exposure to all of those opportunities You'll see us go back to a more normal profile of customers, not contributing more than mid, mid high single digits. you'll see us go back to a more normal profile of customers not contributing more than mid mid high single digits

Speaker 7: Okay, got it. My second question is on the growth rate. It seems that the analog industry has sort of been going through a downturn in the last two years and potentially for 2026 we could see pretty strong growth due to the cyclical recovery. You guys have a 10%-15% outperformance target versus PE peers. That would imply sort of like a close to a 20% growth rate perhaps for next year. Is that the right assumption? If you can provide some color as to which end markets would be driving majority of that growth based on the content or design wins. Okay, got it. okay got it My second question is on the growth rate. my second question is on the growth rate It seems that the analog industry has sort of been going through a downturn in the last two years and potentially for 2026 we could see pretty strong growth due to the cyclical recovery. it seems that the analog industry has sort of been going through a downturn in the last two years and potentially for 2026 we could see pretty strong growth due to the cyclical recovery You guys have a 10%- 15% outperformance target versus PE peers. you guys have a 10%- 15% outperformance target versus pe peers That would imply sort of like a close to a 20% growth rate perhaps for next year. that would imply sort of like a close to a 20% growth rate perhaps for next year Is that the right assumption? is that the right assumption If you can provide some color as to which end markets would be driving majority of that growth based on the content or design wins. if you can provide some color as to which end markets would be driving majority of that growth based on the content or design wins

Speaker 6: Sure. I think that your rule of thumb as far as our traditional outperformance and also what the broader market looks like for 2026 are both accurate. I think within, you know, plus minus a couple percentage points, I can support that those numbers again. As far as the particular end market drivers for next year, we believe it's going to be broad based. Although with all of the enterprise data opportunities ramping next year, that will probably be a key contributor. Sure. sure I think that your rule of thumb as far as our traditional outperformance and also what the broader market looks like for 2026 are both accurate. i think that your rule of thumb as far as our traditional outperformance and also what the broader market looks like for 2026 are both accurate I think within, you know, plus minus a couple percentage points, I can support that those numbers again. i think within you know plus minus a couple percentage points i can support that those numbers again As far as the particular end market drivers for next year, we believe it's going to be broad based. as far as the particular end market drivers for next year we believe it's going to be broad based Although with all of the enterprise data opportunities ramping next year, that will probably be a key contributor. although with all of the enterprise data opportunities ramping next year that will probably be a key contributor

Speaker 7: Thank you. Thank you very much. Thank you. thank you Thank you very much. thank you very much

Speaker 8: Our next question is from William Stein of Truist. William, your line is now open. Our next question is from William Stein of Truist. our next question is from william stein of truist William, your line is now open. william your line is now open

Speaker 3: Great. Thanks for taking my question. First, I wanted to clarify about the short lead times and ordering patterns. Is it fair to say that the only thing that's really going to cause that to stabilize and lengthen is your extending the lead times that you quote to customers, which likewise is sort of difficult as long as revenue is, you know, fairly meaningfully below your capacity level. Is that a fair way to think about it? Great. great Thanks for taking my question. thanks for taking my question First, I wanted to clarify about the short lead times and ordering patterns. first i wanted to clarify about the short lead times and ordering patterns Is it fair to say that the only thing that's really going to cause that to stabilize and lengthen is your extending the lead times that you quote to customers, which likewise is sort of difficult as long as revenue is, you know, fairly meaningfully below your capacity level. is it fair to say that the only thing that's really going to cause that to stabilize and lengthen is your extending the lead times that you quote to customers which likewise is sort of difficult as long as revenue is you know fairly meaningfully below your capacity level Is that a fair way to think about it? is that a fair way to think about it

Speaker 13: I don't know. It's correct. Characterization is meaningfully below our capacities, and I don't know that's an accurate statement or not, but overall it's a fast changing market and customers updating their models. Okay, we just keep it up. I don't know. i don't know It's correct. it's correct Characterization is meaningfully below our capacities, and I don't know that's an accurate statement or not, but overall it's a fast changing market and customers updating their models. characterization is meaningfully below our capacities and i don't know that's an accurate statement or not but overall it's a fast changing market and customers updating their models Okay, we just keep it up. okay we just keep it up

Speaker 6: Yeah, I think we're being responsive to real demand. One thing we haven't touched on is that our channel inventories in each of the GEOs, major GEOs for us, are down in the quarter. They're also very lean. Right now we believe we're meeting real customer demand. Got it. Yeah, I think we're being responsive to real demand. yeah i think we're being responsive to real demand One thing we haven't touched on is that our channel inventories in each of the GEOs, major GEOs for us, are down in the quarter. one thing we haven't touched on is that our channel inventories in each of the geos major geos for us are down in the quarter They're also very lean. they're also very lean Right now we believe we're meeting real customer demand. right now we believe we're meeting real customer demand Got it. got it

Speaker 3: That's great. By the way, Michael, what I meant was comparing the revenue guidance, revenue results, and guidance relative to a $4 billion level of capacity, there's a gap there. That's all I meant. Wasn't a criticism. That's great. that's great By the way, Michael, what I meant was comparing the revenue guidance, revenue results, and guidance relative to a $4 billion level of capacity, there's a gap there. by the way michael what i meant was comparing the revenue guidance revenue results and guidance relative to a $4 billion level of capacity there's a gap there That's all I meant. that's all i meant Wasn't a criticism. wasn't a criticism

Speaker 13: It was, oh yeah, for billings and okay. It's not only for, it's for enterprise. We're building capacity towards it. That's the process. It was, oh yeah, for billings and okay. it was oh yeah for billings and okay It's not only for, it's for enterprise. it's not only for it's for enterprise We're building capacity towards it. we're building capacity towards it That's the process. that's the process

Speaker 3: Got it. Got it. got it The other thing I wanted to ask about was to comment on the product development and revenue trajectory in three areas that you've highlighted in the past as sort of unique growth opportunities. One is modules, the other is converters, D-A and A-D converters. I think you hired a team a couple years ago. We haven't heard that much about it. The other is motion, which I know has ramped up, but I wonder how meaningful that's become relative to your overall. The other thing I wanted to ask about was to comment on the product development and revenue trajectory in three areas that you've highlighted in the past as sort of unique growth opportunities. the other thing i wanted to ask about was to comment on the product development and revenue trajectory in three areas that you've highlighted in the past as sort of unique growth opportunities One is modules, the other is converters, D- A and A- D converters. one is modules the other is converters d- a and a- d converters I think you hired a team a couple years ago. i think you hired a team a couple years ago We haven't heard that much about it. we haven't heard that much about it The other is motion, which I know has ramped up, but I wonder how meaningful that's become relative to your overall. the other is motion which i know has ramped up but i wonder how meaningful that's become relative to your overall

Speaker 13: Thank you very much. Thank you very much. First thing, the e-commerce is kind of flopped, right? I answered your question, that part of your question, a few quarters ago. The good news is the module business is really growing, other than in the enterprise data and industrials, and again industrial sides, even consumer's sides. We offer those solutions that our customer doesn't want to get into the detailed design, and we provide a solution for them. These revenues next year are about 10%-15% of our total revenues, other than the enterprise data power modules. These actually are very much related to when we provide assisting solutions. We're transforming a company, as Bernie said earlier, to be system providers, as solution providers. That's what our customer wants. If they want a chip, also we provide chips. Thank you very much. thank you very much Thank you very much. thank you very much First thing, the e-commerce is kind of flopped, right? first thing the e-commerce is kind of flopped right I answered your question, that part of your question, a few quarters ago. i answered your question that part of your question a few quarters ago The good news is the module business is really growing, other than in the enterprise data and industrials, and again industrial sides, even consumer's sides. the good news is the module business is really growing other than in the enterprise data and industrials and again industrial sides even consumer's sides We offer those solutions that our customer doesn't want to get into the detailed design, and we provide a solution for them. we offer those solutions that our customer doesn't want to get into the detailed design and we provide a solution for them These revenues next year are about 10%- 15% of our total revenues, other than the enterprise data power modules. these revenues next year are about 10%- 15% of our total revenues other than the enterprise data power modules These actually are very much related to when we provide assisting solutions. these actually are very much related to when we provide assisting solutions We're transforming a company, as Bernie said earlier, to be system providers, as solution providers. we're transforming a company as bernie said earlier to be system providers as solution providers That's what our customer wants. that's what our customer wants If they want a chip, also we provide chips. if they want a chip also we provide chips The same. The same. the same Time to help MPS revenue growth. We're not depending on only selling chips. A few years ago, I'm talking about Thailand selling chips only, okay, and that's where our revenue grows. The other things you're talking about, data converter. The data converter is kind of slow moving, okay, and we are releasing a standard product for that, okay, and for only some $2 billion of revenues. Time to help MPS revenue growth. time to help mps revenue growth We're not depending on only selling chips. we're not depending on only selling chips A few years ago, I'm talking about Thailand selling chips only, okay, and that's where our revenue grows. a few years ago i'm talking about thailand selling chips only okay and that's where our revenue grows The other things you're talking about, data converter. the other things you're talking about data converter The data converter is kind of slow moving, okay, and we are releasing a standard product for that, okay, and for only some $2 billion of revenues. the data converter is kind of slow moving okay and we are releasing a standard product for that okay and for only some $2 billion of revenues I. I. i Maybe contributes very little and that doesn't, will not move the needles. As a product and in the product categories that provides a total solution, that's a part of a picture that really benefits the top line growth in terms of solutions, emotions. Finally, we get a needle moving and it's been for a while. We get over about $100 million some in the past few years and they are not too bad. It's slower than the MPS total growth. Now robotics, and we see it, AI-driven robotics will be okay. We see a lot of opportunities and a lot of potential to grow in the next couple of years. Maybe contributes very little and that doesn't, will not move the needles. maybe contributes very little and that doesn't will not move the needles As a product and in the product categories that provides a total solution, that's a part of a picture that really benefits the top line growth in terms of solutions, emotions. as a product and in the product categories that provides a total solution that's a part of a picture that really benefits the top line growth in terms of solutions emotions Finally, we get a needle moving and it's been for a while. finally we get a needle moving and it's been for a while We get over about $100 million some in the past few years and they are not too bad. we get over about $100 million some in the past few years and they are not too bad It's slower than the MPS total growth. it's slower than the mps total growth Now robotics, and we see it, AI-driven robotics will be okay. now robotics and we see it ai-driven robotics will be okay We see a lot of opportunities and a lot of potential to grow in the next couple of years. we see a lot of opportunities and a lot of potential to grow in the next couple of years We. We. we Provide the total AI power and. Provide the total AI power and. provide the total ai power and Not. Not. not Only AI power, we provide all the actuators, actuator solutions and motion controls, as well as battery, BMS solutions. These all combine all together. The motion will grow a lot faster than in the past few years. Only AI power, we provide all the actuators, actuator solutions and motion controls, as well as battery, BMS solutions. only ai power we provide all the actuators actuator solutions and motion controls as well as battery bms solutions These all combine all together. these all combine all together The motion will grow a lot faster than in the past few years. the motion will grow a lot faster than in the past few years

Speaker 3: Thank you. Thank you. thank you

Speaker 6: If there are any follow up questions, please raise your hand. There are no further questions. I'd like to just say a few closing comments. I'd like to thank you for all joining us this conference call. I look forward to talking again during the third quarter 2025 conference call, which will likely be held in late October. Thank you. Have a nice day. If there are any follow up questions, please raise your hand. if there are any follow up questions please raise your hand There are no further questions. there are no further questions I'd like to just say a few closing comments. i'd like to just say a few closing comments I'd like to thank you for all joining us this conference call. i'd like to thank you for all joining us this conference call I look forward to talking again during the third quarter 2025 conference call, which will likely be held in late October. i look forward to talking again during the third quarter 2025 conference call which will likely be held in late october Thank you. thank you Have a nice day. have a nice day