Monolithic Power Systems, Inc. (NASDAQ:MPWR) Q4 2018 Earnings Conference Call Transcript

Feb 12, 2019 • 05:00 pm ET


Monolithic Power Systems, Inc. (NASDAQ:MPWR) Q4 2018 Earnings Conference Call Transcript


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Good day, ladies and gentlemen, and welcome to the Monolithic Power Systems Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. (Operator Instructions). Later we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, today's conference is being recorded.

I'd now like to introduce your host for today's conference, Mr. Bernie Blegen, Chief Financial Officer. Sir, please go ahead.

Bernie Blegen

Good afternoon and welcome to the fourth quarter 2018 Monolithic Power Systems Conference Call. In the course of today's conference call, we will make forward-looking statements and projections that involve risk and uncertainty, which could cause results to differ materially from management's current views and expectations. Please refer to the Safe Harbor statement contained in the earnings release published today.

Risks, uncertainties and other factors that could cause actual results to differ are identified in the Safe Harbor statements contained in the Q4 earnings release and in our SEC filings, included in our Form 10-K filed on March 1, 2018, and Form 10-Q filed on November 2, 2018, both of which are accessible through our website, MPS assumes no obligation to update the information provided on today's call.

We will be discussing gross margin, operating expenses, R&D and SG&A expense, operating income, interest and other income, net income and earnings on both a GAAP and on a non-GAAP basis. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A table that outlines the reconciliation between the non-GAAP financial measures to GAAP financial measures is included in our earnings release, which we have filed with the SEC. I would refer investors to the Q4 2017, Q3 2018, and Q4 2018 earnings releases as well as to the reconciling tables that are posted on our website. I'd also like to remind you that today's conference call is being webcast live over the Internet, and will be available for replay on our website for one year, along with the earnings release filed with the SEC earlier today.

I'd like to begin today's comments with a few highlights of what was a very successful year for MPS. For the full year 2018, MPS achieved record revenue of $582.4 million, 23.7% higher than revenue from 2017, the $111 million increase in year-over-year revenue was the largest annual gain in the company's history. The 23.7% annual increase was the highest growth rate for MPS since the company redirected its focus in 2010 to the industrial, cloud computing, automotive and high-end consumer markets. Although we cannot escape the current macroeconomic conditions, we see momentum in these segments continuing strong for the next several years. This was the sixth consecutive year of double-digit growth.

2018 was a significant year for MPS. On the technology front, we widened our lead with BCD5 solidly in volume production, and with the development of BCD6 a 55-nanometer