What changed in this filing

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Item 1. Financial Statements

2026-08-05 compared with 2026-05-04 · 192 added, 323 removed, 339 unchanged (60% of the section changed)

3 unchanged sentences

(In thousands, except par value)

2026 December 31,

Current assets:

Cash and cash equivalents $ 1,005,587 $ 1,099,302

$ 1,062,930 $ 1,099,302

Short-term investments 408,174 157,243

304,179 157,243

Accounts receivable, net 343,620 255,626

302,138 255,626

619,159 564,649

Inventories 675,849 564,649

Other current assets 44,156 106,982

42,689 106,982

Total current assets 2,477,386 2,183,802

2,331,095 2,183,802

Property and equipment, net 774,549 627,689

693,864 627,689

Acquisition-related intangible assets, net 8,216 8,790

25,944 25,944

Goodwill 25,944 25,944

Deferred tax assets, net 1,182,833 1,182,883

1,182,845 1,182,883

Other long-term assets 217,279 165,091

206,615 165,091

$ 4,448,866 $ 4,194,199

Total assets $ 4,686,207 $ 4,194,199

LIABILITIES AND STOCKHOLDERS’ EQUITY

1 unchanged sentence

Accounts payable $ 182,224 $ 138,272

$ 174,499 $ 138,272

Accrued compensation and related benefits 93,635 85,963

98,768 85,963

Other accrued liabilities 222,075 145,130

213,691 145,130

Total current liabilities 497,934 369,365

486,958 369,365

Income tax liabilities 75,022 75,022

75,022 75,022

Deferred tax liabilities 90,316 90,480

90,316 90,480

Other long-term liabilities 127,511 127,835

119,160 127,835

Total liabilities 790,783 662,702

771,456 662,702

Commitments and contingencies (Note 7)

7 unchanged sentences

Retained earnings 2,861,853 2,609,651

2,703,596 2,609,651

Accumulated other comprehensive loss

( 10,112 ) ( 15,152 )

Accumulated other comprehensive income (loss) 509 ( 15,152 )

Total stockholders’ equity 3,895,424 3,531,497

3,677,410 3,531,497

Total liabilities and stockholders’ equity $ 4,686,207 $ 4,194,199

$ 4,448,866 $ 4,194,199

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(In thousands, except per-share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Revenue $ 980,642 $ 664,574 $ 1,784,827 $ 1,302,128

Cost of revenue 439,572 298,558 798,692 582,882

Gross profit 541,070 366,016 986,135 719,246

Operating expenses:

6 unchanged sentences

Income tax expense 64,431 41,969 118,387 80,807

Net income $ 257,298 $ 135,009 $ 450,524 $ 270,061

Net income per share:

Basic $ 5.24 $ 2.82 $ 9.17 $ 5.64

Diluted $ 5.22 $ 2.81 $ 9.15 $ 5.62

Weighted-average shares outstanding:

Basic 49,138 47,887 49,118 47,869

Diluted 49,260 48,019 49,251 48,012

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Net income $ 257,298 $ 135,009 $ 450,524 $ 270,061

Other comprehensive income, net of tax

8 unchanged sentences

Common Stock and

Additional Paid-in Capital

Additional Paid-in Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total

Stockholders’

Three Months Ended March 31, 2026

Balance as of January 1, 2026

48,709 $ 936,998 $ 2,609,651 $ ( 15,152 ) $ 3,531,497

- - 193,226 - 193,226

Three Months Ended June 30, 2026 Shares Amount

Balance as of April 1, 2026 49,129 $ 983,926 $ 2,703,596 $ ( 10,112 ) $ 3,677,410

Net income - - 257,298 - 257,298

Other comprehensive income - - - 10,621 10,621

- - - 5,040 5,040

Dividends and dividend equivalents declared ($ 2.00 per share)

1 unchanged sentence

Common stock issued 16 - - - -

420 5,830 - - 5,830

Repurchases of common stock ( 3 ) ( 4,048 ) - - ( 4,048 )

Stock-based compensation expense - 53,184 - - 53,184

- 41,098 - - 41,098

Balance as of March 31, 2026

Balance as of June 30, 2026 49,142 $ 1,033,062 $ 2,861,853 $ 509 $ 3,895,424

Common Stock and

Additional Paid-in Capital Retained

Earnings Accumulated

Comprehensive

Stockholders’

Three Months Ended June 30, 2025 Shares Amount

Balance as of April 1, 2025 47,877 $ 764,959 $ 2,351,994 $ ( 43,324 ) $ 3,073,629

Net income - - 135,009 - 135,009

Other comprehensive income - - - 19,633 19,633

Dividends and dividend equivalents declared ($ 1.56 per share)

- - ( 75,924 ) - ( 75,924 )

Common stock issued 19 - - - -

Repurchases of common stock ( 4 ) ( 2,484 ) - - ( 2,484 )

Stock-based compensation expense - 60,107 - - 60,107

Balance as of June 30, 2025 47,892 $ 822,582 $ 2,411,079 $ ( 23,691 ) $ 3,209,970

Common Stock and

Additional Paid-in Capital

Additional Paid-in Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total

Stockholders’

Three Months Ended March 31, 2025

Six Months Ended June 30, 2026 Shares Amount

Balance as of January 1, 2026 48,709 $ 936,998 $ 2,609,651 $ ( 15,152 ) $ 3,531,497

47,823 $ 706,817 $ 2,292,819 $ ( 48,511 ) $ 2,951,125

- - 135,052 - 135,052

Net income - - 450,524 - 450,524

Other comprehensive income - - - 15,661 15,661

- - - 5,187 5,187

Dividends and dividend equivalents declared ($ 4.00 per share)

1 unchanged sentence

Common stock issued 436 5,830 - - 5,830

54 5,335 - - 5,335

Repurchases of common stock ( 3 ) ( 4,048 ) - - ( 4,048 )

Stock-based compensation expense - 94,282 - - 94,282

- 52,807 - - 52,807

Balance as of March 31, 2025

Balance as of June 30, 2026 49,142 $ 1,033,062 $ 2,861,853 $ 509 $ 3,895,424

Common Stock and

Additional Paid-in Capital Retained

Earnings Accumulated

Comprehensive

Stockholders’

Six Months Ended June 30, 2025 Shares Amount

Balance as of January 1, 2025 47,823 $ 706,817 $ 2,292,819 $ ( 48,511 ) $ 2,951,125

Net income - - 270,061 - 270,061

Other comprehensive income - - - 24,820 24,820

Dividends and dividend equivalents declared ($ 3.12 per share)

- - ( 151,801 ) - ( 151,801 )

Common stock issued 73 5,335 - - 5,335

Repurchases of common stock ( 4 ) ( 2,484 ) - - ( 2,484 )

Stock-based compensation expense - 112,914 - - 112,914

Balance as of June 30, 2025 47,892 $ 822,582 $ 2,411,079 $ ( 23,691 ) $ 3,209,970

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net income $ 450,524 $ 270,061

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 32,173 24,569

Loss on deferred compensation plan investments

Amortization of discount on available-for-sale securities ( 484 ) ( 2,885 )

Gain on deferred compensation plan investments ( 7,343 ) ( 4,230 )

Deferred taxes, net ( 125 ) 14,496

Stock-based compensation expense 94,282 112,904

Other ( 1,102 ) 29

Changes in operating assets and liabilities:

Accounts receivable ( 88,002 ) ( 22,264 )

Inventories ( 111,194 ) ( 71,018 )

Other assets 17,320 83,395

Accounts payable 33,276 36,627

5 unchanged sentences

Purchases of property and equipment ( 153,272 ) ( 88,485 )

Sales of property and equipment

Purchases of investments ( 263,797 ) ( 393,010 )

Maturities and sales of investments 14,591 211,227

Contributions to deferred compensation plan

Other 5,621 ( 3,015 )

Net cash used in investing activities ( 396,857 ) ( 273,283 )

2 unchanged sentences

Proceeds from common stock issued 5,830 5,335

Repurchases of common stock ( 4,048 ) ( 3,687 )

Dividends and dividend equivalents paid ( 179,496 ) ( 135,073 )

1 unchanged sentence

Effect of change in exchange rates 3,591 10,169

Net decrease in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash ( 93,718 ) 95,583

Cash, cash equivalents and restricted cash, beginning of period 1,099,521 691,941

5 unchanged sentences

Supplemental disclosures for cash flow information:

Cash paid (refunded) for income taxes, net

Cash paid for income taxes, net $ 88,705 $ 17,007

Non-cash investing and financing activities:

14 unchanged sentences

Summary of Significant Accounting Policies

There have been no changes to the Company’s significant accounting policies during the three months ended March 31, 2026 from those described in the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2025.

There have been no changes to the Company’s significant accounting policies during the three and six months ended June 30, 2026 from those described in the Company’s audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2025.

Use of Estimates

3 unchanged sentences

Actual results could differ from these estimates and assumptions, and any such differences may be material to the Company’s condensed consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted as of March 31, 2026

New Accounting Pronouncements Not Yet Adopted as of June 30, 2026

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

5 unchanged sentences

The Company generates revenue primarily from product sales, which include assembled and tested integrated circuits (“ICs”), power modules as well as dies in wafer form.

The remaining revenue, which primarily consists of royalty revenue from licensing arrangements and revenue from wafer testing services performed for third parties, was not significant in any of the periods presented.

The Company derives a majority of its revenue from sales to customers located outside North America, with geographic revenue based on the customers’ ship-to locations.

The following is a summary of revenue by geographic region for the periods presented (in thousands):

Three Months Ended March 31,

The remaining revenue, which primarily consists of royalty revenue from licensing arrangements with value-added resellers and revenue from wafer testing services performed for third parties, was not significant in any of the periods presented.

The following is a summary of revenue by geographic region based on the direct customers’ ship-to locations for the periods presented (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Country or Region 2026 2025 2026 2025

$ 411,153 $ 363,720

181,616 116,341

81,806 64,364

China $ 501,973 $ 397,951 $ 913,126 $ 761,671

Taiwan 260,487 104,970 442,103 221,311

South Korea 87,887 63,501 169,693 127,865

Southeast Asia 48,960 34,867 89,709 67,573

40,749 32,706

35,799 24,992

29,774 15,249

23,184 20,101

Europe 34,832 26,497 70,631 51,489

26,212 18,127 55,986 33,376

The Company sells its products to end customers primarily through third-party distributors and value-added resellers.

For the three months ended March 31, 2026 and 2025, 88 % and 83 %, respectively, of the Company’s total sales were made through distribution arrangements.

These distribution arrangements contain enforceable rights and obligations specific to those distributors and not the end customers.

The following table summarizes those customers with sales equal to 10% or more of the Company’s total revenue for the periods presented:

Three Months Ended March 31,

Japan 20,171 18,536 43,355 38,637

Other 120 125 224 206

Total $ 980,642 $ 664,574 $ 1,784,827 $ 1,302,128

The Company’s direct customers are primarily third-party distributors and value-added resellers.

For each of the three and six months ended June 30, 2026, 88 % of the Company’s total sales were made through distribution arrangements.

For each of the three and six months ended June 30, 2025, 83 % of the Company’s total sales were made through distribution arrangements.

These distribution arrangements contain enforceable rights and obligations specific to those distributors and value-added resellers and not the end customers.

The following table summarizes the direct customers with sales equal to 10% or more of the Company’s total revenue for the periods presented:

Three Months Ended June 30, Six Months Ended June 30,

Customer 2026 2025 2026 2025

Distributor A 28 % 25 % 27 % 25 %

1 unchanged sentence

Distributor C * 11 % * 11 %

Distributor D 10 % * * *

____________________________

* Represents less than 10%.

26 unchanged sentences

The Company did not recognize any write-offs of accounts receivable or record any allowance for credit losses for the periods presented.

The following table summarizes those customers with accounts receivable equal to 10% or more of the Company’s total accounts receivable:

The following table summarizes the customers with accounts receivable equal to 10% or more of the Company’s total accounts receivable:

Customer June 30,

2026 December 31,

Distributor A 33 % 35 %

1 unchanged sentence

Distributor B 15 % 14 %

____________________________

* Represents less than 10%.

13 unchanged sentences

The Amended and Restated 2014 Plan will cease being available for new awards on June 11, 2030.

As of March 31, 2026, 3.4 million shares remained available for future issuance under the Amended and Restated 2014 Plan.

As of June 30, 2026, 3.4 million shares remained available for future issuance under the Amended and Restated 2014 Plan.

Stock-Based Compensation Expense

The Company recognized stock-based compensation expense as follows for the periods presented (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Cost of revenue $ 1,764 $ 1,913 $ 3,238 $ 3,586

3 unchanged sentences

Tax benefit related to stock-based compensation (1)

$ 606 $ 703 $ 1,364 $ 1,163

____________________________

(1) Amount reflects the tax benefit related to stock-based compensation recorded for equity awards that are expected to generate tax deductions when they vest in future periods.

1 unchanged sentence

Restricted Stock Units ( “ RSUs ” )

The Company’s RSUs include time-based RSUs, RSUs with performance conditions (“PSUs”) and RSUs with market conditions (“MSUs”).

The Company’s RSUs include time-based RSUs, RSUs with performance conditions (“PSUs”), RSUs with market conditions (“MSUs”), and RSUs with performance and market conditions (“MPSUs”).

Vesting of awards with performance conditions or market conditions is subject to the achievement of pre-determined performance or market goals and the approval of such achievement by the Compensation Committee of the Board of Directors (the “Compensation Committee”).

All awards include service conditions which require continued employment with or service to the Company.

All such awards include service conditions which require continued employment with or service to the Company.

A summary of RSU activity is presented in the table below (in thousands, except per-share amounts):

Total Time-based RSUs, PSUs and MSUs

Number of Shares

Weighted-Average Grant Date Fair Value Per Share

Number of Shares Weighted-Average Grant Date Fair Value Per Share

Outstanding at January 1, 2026 771 $ 535.78

( 64 ) $ 398.06

Granted 251 (1)

Vested ( 80 ) $ 430.30

Forfeited ( 50 ) $ 571.38

Outstanding at June 30, 2026 892 $ 687.48

____________________________

Outstanding at March 31, 2026

(1) Amount reflects the number of awards that may ultimately be earned based on management’s probability assessment of the achievement of performance conditions at each reporting period.

The fair value related to vested RSUs, as of their respective vesting dates, was $ 75.2 million and $ 31.0 million for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, unamortized compensation expense related to all outstanding RSUs was $ 390.2 million with a weighted-average remaining recognition period of approximately two years.

RSUs generally vest over four years for non-executive employees, three years for executives, and one year for directors, all subject to continued service with the Company.

The fair value related to vested RSUs, as of their respective vesting dates, was $ 25.2 million and $ 11.5 million for the three months ended June 30, 2026 and 2025, respectively.

The fair value related to vested RSUs, as of their respective vesting dates, was $ 100.3 million and $ 42.6 million for the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, unamortized compensation expense related to all outstanding RSUs was $ 350.0 million with a weighted-average remaining recognition period of approximately two years .

RSUs generally vest over four years for non-executive employees, three years for executives, and one year for directors serving on the Board of Directors, all subject to continued service to the Company.

2026 Executive PSUs:

5 unchanged sentences

The 2026 Executive PSUs contain a purchase price feature, which requires the executives to pay the Company up to $ 300 per share upon vesting of the shares.

The $ 300 purchase price requirement for executives is deemed satisfied and fully waived if the Company’s stock price on the last trading day of the applicable performance period is $ 300 higher than the grant date stock price of $ 1,164.83 .

The $ 300 purchase price requirement for executives is deemed satisfied and fully waived if the Company’s stock price on the last trading day of the applicable performance period is $ 300 or more higher than the grant date stock price of $ 1,164.83 .

The Company determined the grant date fair value of the 2026 Executive PSUs using a Monte Carlo simulation model with the following assumptions:

2 unchanged sentences

BALANCE SHEET COMPONENTS

Inventories consist of the following (in thousands):

Inventories consisted of the following (in thousands):

2026 December 31,

Raw materials $ 86,874 $ 107,801

$ 86,218 $ 107,801

Work in process 306,554 220,410

263,067 220,410

Finished goods 282,421 236,438

269,874 236,438

$ 619,159 $ 564,649

Total $ 675,849 $ 564,649

Other Current Assets

Other current assets consist of the following (in thousands):

Other current assets consisted of the following (in thousands):

2026 December 31,

Prepaids and other $ 44,156 $ 46,982

$ 42,689 $ 46,982

Other receivables (1)

Total $ 44,156 $ 106,982

____________________________

Other receivables relate to an annually refundable deposit made to a supplier under a long-term wafer supply agreement.

(1) Other receivables related to an annually refundable deposit made to a supplier under a long-term wafer supply agreement.

The deposit was received in the quarter ended March 31, 2026.

Other Long-Term Assets

Other long-term assets consist of the following (in thousands):

Other long-term assets consisted of the following (in thousands):

2026 December 31,

Deferred compensation plan assets $ 115,366 $ 107,096

$ 106,031 $ 107,096

Refundable deposit (1)

60,584 57,995

Operating lease right-of-use (“ROU”) assets 23,867 24,886

Other 38,046 33,109

Total $ 217,279 $ 165,091

____________________________

The refundable deposit as of March 31, 2026 is for a long-term assembly service agreement.

(1) The refundable deposit as of June 30, 2026 was for a long-term assembly service agreement.

Other Accrued Liabilities

Other accrued liabilities consist of the following (in thousands):

Other accrued liabilities consisted of the following (in thousands):

2026 December 31,

Dividends and dividend equivalents $ 101,683 $ 81,510

$ 103,485 $ 81,510

Stock rotation and sales returns 19,197 17,150

21,635 17,150

Income tax payable 35,606 2,920

59,659 43,550

$ 213,691 $ 145,130

Other 65,589 43,550

Total $ 222,075 $ 145,130

Other Long-Term Liabilities

Other long-term liabilities consist of the following (in thousands):

Other long-term liabilities consisted of the following (in thousands):

2026 December 31,

Deferred compensation plan liabilities $ 106,014 $ 103,954

$ 96,374 $ 103,954

Operating lease liabilities 18,934 19,972

19,968 19,972

Dividend equivalents 2,563 3,909

$ 119,160 $ 127,835

Total $ 127,511 $ 127,835

NET INCOME PER SHARE

4 unchanged sentences

The following table sets forth the computation of basic and diluted net income per share for the periods presented (in thousands, except per-share amounts):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Net income $ 257,298 $ 135,009 $ 450,524 $ 270,061

Weighted-average outstanding shares—basic 49,138 47,887 49,118 47,869

2 unchanged sentences

Net income per share:

Basic $ 5.24 $ 2.82 $ 9.17 $ 5.64

Diluted $ 5.22 $ 2.81 $ 9.15 $ 5.62

Anti-dilutive common stock equivalents were not material for the periods presented.

5 unchanged sentences

The following is a summary of long-lived assets by geographic region (in thousands):

$ 356,585 $ 332,506

205,534 165,107

64,981 65,081

66,764 64,995

Country June 30,

2026 December 31,

China $ 432,821 $ 332,506

204,655 165,107

Taiwan 68,477 65,081

Other 68,596 64,995

Total $ 774,549 $ 627,689

COMMITMENTS AND CONTINGENCIES

4 unchanged sentences

Historically, the Company’s warranty obligations and rework costs associated with product-related claims have not been material.

The estimated amount of product warranty and rework liabilities was $ 12.2 million and $ 10.1 million for the periods ended March 31, 2026 and December 31, 2025.

The estimated amount of product warranty and rework liabilities was $ 14.0 million and $ 10.1 million as of June 30, 2026 and December 31, 2025, respectively.

Purchase Commitments

1 unchanged sentence

The purchase obligations primarily consist of wafer and other inventory purchases, assembly and other manufacturing services, construction of manufacturing and R&D facilities, purchases of production and other equipment, and license arrangements.

Total estimated future unconditional purchase commitments to all suppliers and other parties as of March 31, 2026 were as follows (in thousands):

2026 (remaining nine months)

Total estimated future unconditional purchase commitments to all suppliers and other parties as of June 30, 2026 were as follows (in thousands):

2026 (remaining six months) $ 256,444

Total $ 571,036

The Company is a party to actions and proceedings in the ordinary course of business, including challenges to the enforceability or validity of its intellectual property, claims that the Company’s products infringe on the intellectual property rights of others, and employment matters.

2 unchanged sentences

The Company defends itself vigorously against any such claims.

Based on current information, the Company does not believe that a material loss from known matters is probable as of March 31, 2026.

Based on current information, the Company does not believe that a material loss from known matters is probable as of June 30, 2026.

CASH, CASH EQUIVALENTS AND INVESTMENTS

The following is a summary of the Company’s cash, cash equivalents and debt investments (in thousands):

$ 932,144 $ 969,628

2026 December 31,

Cash $ 771,683 $ 969,628

Money market funds 233,904 129,674

130,786 129,674

Certificates of deposit 309,162 157,243

304,179 157,243

treasuries and government agency bonds 99,012 -

Auction-rate securities backed by student-loan notes 25 49

$ 1,367,158 $ 1,256,594

Total $ 1,413,786 $ 1,256,594

2026 December 31,

Cash and cash equivalents $ 1,005,587 $ 1,099,302

$ 1,062,930 $ 1,099,302

Short-term investments 408,174 157,243

304,179 157,243

Investment within other long-term assets 25 49

$ 1,367,158 $ 1,256,594

The following table summarizes the contractual maturities of the short-term and long-term available-for-sale investments as of March 31, 2026 (in thousands):

Amortized Cost

Total $ 1,413,786 $ 1,256,594

The following table summarizes the contractual maturities of the short-term and long-term available-for-sale investments as of June 30, 2026 (in thousands):

Amortized Cost Fair Value

Due in less than 1 year $ 305,167 $ 305,120

$ 202,786 $ 202,786

Due in 1 - 5 years 103,054 103,054

101,393 101,393

Due in greater than 5 years 25 25

$ 304,229 $ 304,228

Total $ 408,246 $ 408,199

Gross realized gains and losses recognized on the sales of available-for-sale investments were not material for the periods presented.

9 unchanged sentences

The following tables detail the fair value of the Company’s financial assets measured on a recurring basis (in thousands):

March 31, 2026

June 30, 2026

Total Level 1 Level 2 Level 3

Money market funds $ 233,904 $ 233,904 $ - $ -

$ 130,786 $ 130,786 $ - $ -

Certificates of deposit 309,162 - 309,162 -

304,179 - 304,179 -

treasuries and government agency bonds 99,012 - 99,012 -

Auction-rate securities backed by student-loan notes 25 - - 25

Mutual funds and money market funds under deferred compensation plan 80,083 80,083 - -

75,231 75,231 - -

$ 510,245 $ 206,017 $ 304,179 $ 49

Total $ 722,186 $ 313,987 $ 408,174 $ 25

December 31, 2025

Total Level 1 Level 2 Level 3

Money market funds $ 129,674 $ 129,674 $ - $ -

$ 129,674 $ 129,674 $ - $ -

Certificates of deposit 157,243 - 157,243 -

157,243 - 157,243 -

Auction-rate securities backed by student-loan notes 49 - - 49

Mutual funds and money market funds under deferred compensation plan 75,484 75,484 - -

75,484 75,484 - -

$ 362,450 $ 205,158 $ 157,243 $ 49

Total $ 362,450 $ 205,158 $ 157,243 $ 49

DEFERRED COMPENSATION PLAN

The following table summarizes the deferred compensation plan balances on the Condensed Consolidated Balance Sheets (in thousands):

2026 December 31,

Deferred compensation plan asset components:

Cash surrender value of corporate-owned life insurance policies $ 35,283 $ 31,612

$ 30,800 $ 31,612

Fair value of mutual funds and money market funds 80,083 75,484

75,231 75,484

$ 106,031 $ 107,096

Total $ 115,366 $ 107,096

Deferred compensation plan assets reported in:

Other long-term assets $ 115,366 $ 107,096

$ 106,031 $ 107,096

Deferred compensation plan liabilities reported in:

Accrued compensation and related benefits $ 6,795 $ 3,707

$ 6,136 $ 3,707

Other long-term liabilities 106,014 103,954

96,374 103,954

$ 102,510 $ 107,661

Total $ 112,809 $ 107,661

OTHER INCOME, NET

The components of other income, net, were as follows for the periods presented (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Interest income $ 8,322 $ 6,043 $ 16,263 $ 11,740

Gain on deferred compensation plan investments 8,931 5,580 7,343 4,230

Amortization of discount on available-for-sale securities 484 2,117 484 2,885

Charitable commitments - ( 900 ) ( 900 ) ( 900 )

Loss on deferred compensation plan investments

The income tax expense for the three months ended March 31, 2026 and 2025, was $ 54.0 million and $ 38.8 million respectively, or an effective tax rate of 21.8 % and 22.3 % respectively.

The reduction in rate was primarily due to a reduction in non-deductible stock-based compensation.

Other 98 ( 620 ) 675 ( 604 )

Total $ 17,835 $ 12,220 $ 23,865 $ 17,351

The income tax expense for the three and six months ended June 30, 2026 was $ 64.4 million and $ 118.4 million, respectively, or an effective tax rate of 20.0 % and 20.8 %, respectively.

The income tax expense for the three and six months ended June 30, 2025 was $ 42.0 million and $ 80.8 million, respectively, or an effective tax rate of 23.7 % and 23.0 %, respectively.

The reduction in rates from the comparable periods was primarily due to the impact of higher non-deductible stock-based compensation reported in the periods in 2025 than in 2026.

STOCKHOLDERS’ EQUITY

2 unchanged sentences

The Board of Directors declared the following cash dividends for the periods presented (in thousands, except per-share amounts):

Three Months Ended March 31,

Dividend declared per share

$ 2.00 $ 1.56

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

As of March 31, 2026 and December 31, 2025, accrued dividends totaled $ 98.3 million and $ 76.0 million, respectively.

Dividend declared per share $ 2.00 $ 1.56 $ 4.00 $ 3.12

Total amount $ 98,285 $ 74,711 $ 196,543 $ 149,399

As of June 30, 2026 and December 31, 2025, accrued dividends totaled $ 98.3 million and $ 76.0 million, respectively.

The declaration of any future cash dividends is at the discretion of the Board of Directors and will depend on, among other things, the Company’s financial condition, results of operations, capital requirements, business conditions, and other factors that the Board of Directors may deem relevant, as well as a determination that cash dividends are in the best interests of the Company’s stockholders.

6 unchanged sentences

Dividend equivalents accumulated on the underlying RSUs are forfeited if the underlying RSUs do not vest.

As of March 31, 2026 and December 31, 2025 , accrued dividend equivalents totaled $ 8.0 million and $ 9.4 million, respectively.

As of June 30, 2026 and December 31, 2025 , accrued dividend equivalents totaled $ 6.0 million and $ 9.4 million, respectively.

Stock Repurchase Program

1 unchanged sentence

Shares are retired upon repurchase.

The Company did not make any repurchases under this program during the three months ended March 31, 2026 and 2025, respectively.

The Company repurchased 3,000 shares of its

common stock for an aggregate purchase price of $ 4.0 million during the three and six months ended June 30, 2026.

The Company repurchased 4,000 shares of its common stock for an aggregate purchase price of $ 2.6 million during the three and six months ended June 30, 2025.

Stock repurchased under the program may be made through open market repurchases, privately negotiated transactions, or other structures, in accordance with applicable state and federal securities laws, at times and in amounts as management deems appropriate.

1 unchanged sentence

The repurchase program does not obligate the Company to purchase any particular number of shares, and may be suspended, modified, or discontinued at any time without prior notice.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that have been made pursuant to and in reliance on the provisions of the Private Securities Litigation Reform Act of 1995.

These statements include, among others, statements concerning:

the above-average industry growth of product and market areas that we have targeted;

our plans to increase revenue in a diversified way across regions and through the introduction of new products within our existing product families as well as in new product categories and families;

our mission statement to reduce energy and material consumption to improve all aspects of quality of life and create a sustainable future;

the effects of macroeconomic factors, global economic uncertainties, current and potential global conflicts and global tariffs, export controls and retaliatory measures on the semiconductor industry and our business;

the effect of changes in laws or economic policies in China or the U.S.;

the effect that liquidity of our investments has on our capital resources;

the continuing application of our products in the storage and computing, enterprise data, automotive, industrial, communications and consumer end markets;

estimates of our future liquidity requirements and the sufficiency of our cash, cash equivalents and short-term investments to operate our business;

the cyclical nature of the semiconductor industry;

our belief that we may incur significant legal expenses that vary with the level of activity in each of our current or future legal proceedings;

expectations regarding protection of our proprietary technology;

our business outlook for the remainder of 2026 and beyond;

the factors that we believe will impact our business, operations and financial condition, as well as our ability to achieve revenue growth;

the expected percentage of our total revenue from various end markets;

our ability to identify, acquire and integrate companies, businesses and products, and achieve the anticipated benefits from such acquisitions and integrations;

the expected impact of various U.S.

and international tax laws and regulations on our income tax provision, financial position and cash flows;

our plan to repatriate cash from our foreign subsidiaries;

our ability to fulfill our customers’ evolving needs, enter new market segments and obtain design wins;

our ability to forecast demand accurately and align inventory levels accordingly;

our ability to develop and leverage process technologies as key strategic components of our future growth;

our expectation to capitalize on the length of product life cycles to reduce manufacturing intensity and related emissions;

our ability to recruit and retain application and design engineering personnel;

our expectation to continue devoting significant resources to research and development including related increased expenses;

our ability to engage additional supply chain partners to support future growth and to leverage a diversified and resilient supply chain to reduce exposure to trade- and tariff-related risks;

our intention and ability to execute our stock repurchase program and pay cash dividends and dividend equivalents;

the factors that differentiate us from our competitors;

our ability to timely and adequately remediate our material weakness.

These forward-looking statements generally are identified by the words “would,” “could,” “may,” “should,” “predict,” “potential,” “targets,” “continue,” “anticipate,” “expect,” “intend,” “plan,” “believe,” “seek,” “estimate,” “project,” “forecast,” “will,” and similar expressions.

All forward-looking statements are based on our current outlook, expectations, estimates, projections, beliefs and plans or objectives about our business, our industry and the global economy, including our expectations regarding the potential impacts of macroeconomic factors, global economic uncertainties, including tariffs, export controls and retaliatory measures, and geopolitical tensions on the semiconductor industry and our business.

These statements are not guarantees of future performance and are subject to significant risks and uncertainties.

Actual events or results could differ materially and adversely from those expressed in any such forward-looking statements.

Risks and uncertainties that could cause actual results to differ materially include those set forth throughout this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K including, in particular, in the sections entitled “Risk Factors.” Except as required by law, we disclaim any duty, and undertake no obligation, to update any forward-looking statements, whether as a result of new information relating to existing conditions, future events or otherwise or to release publicly the results of any future revisions we may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this Quarterly Report on Form 10-Q and entail significant risks.

Readers should carefully review future reports and documents that we file from time to time with the SEC, such as our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K.

Unless stated otherwise or the context otherwise requires, references to the terms “Monolithic Power Systems,” “MPS,” “Registrant,” the “Company,” “we,” “our,” and “us” as used herein are references to Monolithic Power Systems, Inc.

and its consolidated subsidiaries.

We are a fabless global company that provides high-performance, semiconductor-based power electronics solutions.

Our mission is to reduce energy and material consumption to improve all aspects of quality of life and create a sustainable future.

Founded in 1997 by our CEO Michael Hsing, we have three core strengths:

deep system-level knowledge, strong semiconductor design expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging.

These combined advantages enable us to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders.

We operate in the cyclical semiconductor industry.

We are subject to industry downturns, but we have targeted product and market areas that we believe allow us to operate at above average industry performance levels over the long term.

We work with third parties to manufacture, assemble and test our ICs.

This has enabled us to limit our capital expenditures and fixed costs, while focusing our engineering and design resources on our core strengths.

Following the introduction of a product, our sales cycle generally takes a number of quarters after we receive an initial customer order for a new product to ramp up.

Typical supply chain lead times for orders are generally 16 to 26 weeks.

These factors, combined with the fact that our customers can cancel or reschedule orders without incurring a significant penalty, make the forecasting of our orders, revenue and expenses difficult.

We derive most of our revenue from sales through distribution arrangements and direct sales to customers in Asia, where our products are incorporated into end-user products.

Our revenue from sales to customers in Asia was 92% and 94% of our total revenue for the three months ended March 31, 2026 and 2025, respectively.

We believe our ability to achieve revenue growth will depend, in part, on our ability to develop new products, enter new markets, gain market share, manage litigation risk, diversify our customer base and continue to secure manufacturing capacity.

Macroeconomic Conditions and Regulations

The semiconductor industry is impacted by various macroeconomic challenges including fluctuations in consumer spending, fluctuations in demand for semiconductors, rising inflation, global tariffs and retaliatory measures and announcements regarding the same, increased interest rates, and fluctuations in currency rates.

We remain cautious in light of continued challenging global macroeconomic conditions and will continue to monitor the potential impact on our operations.

The extent and duration of the direct and indirect impact of macroeconomic events on our business, results of operations and overall financial position remain uncertain and depend on future developments.

We closely monitor changes to export control laws, tariffs, trade regulations and other trade requirements.

For the three months ended March 31, 2026 and through the date we filed this Quarterly Report on Form 10-Q, no restrictions or requirements have had a material impact on our revenue and operations.

We believe that our diverse, agile and resilient supply chain is structured in a way to minimize the impact of tariffs;

however, such restrictions or requirements can be enacted quickly and unexpectedly and could impact our business in the future.

To the extent tariffs, trade regulations or retaliatory measures or announcements regarding the same that affect us are implemented, we will seek to take mitigating actions in the near- and medium-term, as necessary, but there can be no assurance we will be successful.

We are committed to complying with all applicable trade laws, regulations and other requirements.

Critical Accounting Estimates

In preparing our condensed consolidated financial statements in accordance with U.S.

GAAP, we are required to make estimates, assumptions and judgments that affect the amounts reported in our financial statements and the accompanying disclosures.

Estimates and judgments used in the preparation of our financial statements are, by their nature, uncertain and unpredictable, and depend upon, among other things, many factors outside of our control.

These factors include demand for our products, economic conditions and other current and future events, such as macroeconomic factors, global economic uncertainties, current and potential global conflicts and global tariffs, export controls and retaliatory measures and announcements regarding the same.

Actual results could differ from these estimates and assumptions, and any such differences may be material to our condensed consolidated financial statements.

There have been no material changes during the three months ended March 31, 2026 to our critical accounting estimates from the information provided in the “Critical Accounting Estimates” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Results of Operations

The table below sets forth the data on the Condensed Consolidated Statements of Operations as a percentage of revenue for the periods presented:

Three Months Ended March 31,

(In thousands, except percentages)

Cost of revenue

Operating expenses:

Research and development

Selling, general and administrative

Total operating expenses

Operating income

Other income, net

Income before income taxes

Income tax expense

The following table summarizes our revenue by end market for the periods presented:

Three Months Ended March 31,

(In thousands, except percentages)

Enterprise Data

Storage and Computing

Communications

Revenue for the three months ended March 31, 2026 was $804.2 million, an increase of $166.6 million, or 26.1%, from $637.6 million for the three months ended March 31, 2025.

The increase in revenue was primarily due to higher shipment volume and higher average selling prices resulting primarily from product mix.

By end market, first quarter 2026 revenue for enterprise data increased $129.9 million, or 97.7%, from the same period in 2025.

This increase was primarily due to higher sales of power solutions for artificial intelligence (“AI”) and server applications.

Revenue from the storage and computing market of $174.4 million decreased $14.1 million, or 7.5%, from the same period in 2025 primarily due to decreased sales of power solutions for notebooks and graphics cards, partially offset by increased sales of memory and storage applications.

First quarter 2026 automotive revenue of $152.3 million increased $7.4 million, or 5.1%, from the same period in 2025.

Communications revenue of $111.5 million increased $39.8 million, or 55.5%, from the same period in 2025 due to higher sales of power solutions for optical modules and switches.

First quarter 2026 consumer revenue decreased $2.4 million, or 4.2%, from the same period in 2025.

Revenue of $48.6 million from the industrial market increased $6.0 million, or 14.2%, from the same period in 2025.

Cost of Revenue and Gross Margin

Cost of revenue primarily consists of costs incurred to manufacture, assemble and test our products, as well as warranty costs, inventory-related and other overhead costs, and stock-based compensation expenses.

Three Months Ended March 31,

(In thousands, except percentages)

Cost of revenue

As a percentage of revenue

Cost of revenue was $359.1 million, or 44.7% of revenue, for the three months ended March 31, 2026, and $284.3 million, or 44.6% of revenue, for the three months ended March 31, 2025.

The $74.8 million increase in cost of revenue was primarily driven by product mix and higher shipment volume.

Gross margin was 55.3% for the three months ended March 31, 2026, compared with 55.4% for the three months ended March 31, 2025.

The decrease in gross margin was mainly driven by higher warranty expenses as a percentage of revenue, partially offset by lower manufacturing overhead costs as a percentage of revenue.

Research and Development

R&D expenses primarily consist of cash-based compensation and benefits, stock-based compensation and deferred compensation for design and product engineers, expenses related to new product development and supplies, and facilities costs.

Three Months Ended March 31,

(In thousands, except percentages)

As a percentage of revenue

R&D expenses were $100.6 million, or 12.4% of revenue, for the three months ended March 31, 2026, and $92.2 million, or 14.4% of revenue, for the three months ended March 31, 2025.

The $8.4 million increase in R&D expenses was primarily due to a $4.3 million increase in cash-based compensation and benefits, a $1.3 million increase in laboratory and other supplies, and a $1.3 million increase in facilities costs.

Selling, General and Administrative

SG&A expenses primarily include cash-based compensation and benefits, stock-based compensation and deferred compensation for sales, marketing and administrative personnel, travel expenses, facilities costs, third-party service fees and legal expenses.

Three Months Ended March 31,

(In thousands, except percentages)

SG&A expenses

As a percentage of revenue

SG&A expenses were $103.3 million, or 12.9% of revenue, for the three months ended March 31, 2026, and $92.2 million, or 14.5% of revenue, for the three months ended March 31, 2025.

The $11.1 million increase in SG&A expenses was primarily driven by a $10.0 million increase in cash-based compensation and benefits, a $5.1 million increase in stock-based compensation related payroll taxes, and a $4.4 million increase in legal expenses, partially offset by an $11.1 million decrease in stock-based compensation.

Other Income, Net

Other income, net, was $6.0 million for the three months ended March 31, 2026, compared with $5.1 million for the three months ended March 31, 2025.

Income Tax Expense

The income tax expense for the three months ended March 31, 2026 and 2025, was $54.0 million and $38.8 million respectively, or an effective tax rate of 21.8% and 22.3% respectively.

The reduction in rate was primarily due to a reduction in non-deductible stock-based compensation.

Liquidity and Capital Resources

(In thousands, except percentages)

Cash and cash equivalents

Short-term investments

Total cash, cash equivalents and short-term investments

Percentage of total assets

Total current assets

Total current liabilities

Working capital

As of March 31, 2026, we had cash and cash equivalents of $1,062.9 million and short-term investments of $304.2 million, compared with cash and cash equivalents of $1,099.3 million and short-term investments of $157.2 million as of December 31, 2025.

As of March 31, 2026, $683.0 million of cash and cash equivalents and $304.2 million of short-term investments were held by our foreign subsidiaries.

We may continue to repatriate cash from certain of our foreign subsidiaries to the U.S.

to fund our expenditures in future periods.

We anticipate that earnings from other foreign subsidiaries will continue to be indefinitely reinvested.

Summary of Cash Flows

The following table summarizes our cash flow activities for the periods presented:

Three Months Ended March 31,

(In thousands)

Net cash provided by operating activities

Net cash used in investing activities

Net cash used in financing activities

Effect of change in exchange rates

Net decrease in cash, cash equivalents and restricted cash

For the three months ended March 31, 2026, the $6.1 million decrease in net cash provided by operating activities compared to the same period in 2025 was primarily due to increased inventory purchases and other changes in working capital, partially offset by increased accounts receivable collections.

For the three months ended March 31, 2026, the $45.2 million decrease in net cash used in investing activities compared to the same period in 2025 was primarily due to $69.2 million higher net purchases of investments, partially offset by $24.1 million higher purchases of property and equipment.

For the three months ended March 31, 2026, the $19.4 million increase in net cash used in financing activities compared to the same period in 2025 was primarily due to an increase of $18.4 million in dividend and dividend equivalent payments.

Cash Requirements

Although consequences of economic uncertainties and macroeconomic conditions, including tariffs and retaliatory measures and announcements regarding the same, and many other factors could adversely affect our liquidity and capital resources in the future, and cash requirements may fluctuate based on the timing and extent of many factors such as those discussed above, we believe that our balances of cash, cash equivalents and short-term investments of $1,367.1 million as of March 31, 2026, along with cash generated by ongoing operations, will be sufficient to satisfy our liquidity requirements for the next 12 months.

Our material cash requirements include the following contractual and other obligations:

Purchase Obligations

Purchase obligations represent commitments to our suppliers and other parties requiring the purchases of goods or services.

Our purchase obligations primarily consist of wafer and other inventory purchases, assembly and other manufacturing services, construction of manufacturing and R&D facilities, purchases of production and other equipment, and license arrangements.

As of March 31, 2026, total estimated future unconditional purchase commitments to all suppliers and other parties were $588.7 million, of which $557.5 million was due within a year.

Capital Return to Stockholders

In February 2025, our Board of Directors approved a new stock repurchase program authorizing us to repurchase up to $500.0 million of our common stock through February 2028.

Shares are retired upon repurchase.

The Company did not make any repurchases under this program during the three months ended March 31, 2026.

As of March 31, 2026, $493.4 million remained available for future repurchases under the program.

We currently have a dividend program approved by our Board of Directors, pursuant to which we intend to pay quarterly cash dividends on our common stock.

Based on our historical practice, stockholders of record as of the last business day of the quarter are entitled to receive the quarterly cash dividends when and if declared by the Board of Directors, which are payable to the stockholders in the following month.

As of March 31, 2026, accrued dividends totaled $98.3 million.

The declaration of any future cash dividends is at the discretion of our Board of Directors and will depend on, among other things, our financial condition, results of operations, capital requirements, business conditions and other factors that our Board of Directors may deem relevant, as well as a determination that cash dividends are in the best interests of our stockholders.

Other Long-Term Obligations

Other long-term obligations primarily include deferred compensation plan liabilities and accrued dividend equivalents.

As of March 31, 2026, these obligations totaled $99.2 million.

SUBSEQUENT EVENTS

In July 2026, the Compensation Committee approved MPSU grants to the Company’s executive officers and over 2,000 non-executive employees.

The employees and executive officers can earn up to approximately 697,000 shares based on achievement of certain performance and market conditions as measured through July 2029.

The MPSUs granted to executive officers include a holding period in the event the vesting conditions are met prior to July 2029.

The MPSUs granted to non-executive employees include a time-based vesting condition of up to three years after July 2029.

The fair value of the MPSUs will be estimated using the Monte Carlo valuation simulation model that incorporates various assumptions, including expected volatility, risk-free interest rate, expected dividend yield, illiquidity discount rate, and probability assessment results of the performance conditions.

The Company will perform the probability assessment on a quarterly basis beginning with the quarter ending September 30, 2026.

Share Repurchase Program

In July 2026, the Board of Directors approved an additional $ 500.0 million to the stock repurchase program initially approved in 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements