MONOLITHIC POWER SYSTEMS, INC. 10-Q

Item 1. Financial Statements MONOLITHIC POWER SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except par value) (Unaudited) June 30, 2026 December 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 1,005,587 $ 1,099,302 Short-term investments 408,174 157,243 Accounts receivable, net 343,620 255,626 Inventories 675,849 564,649 Other current assets 44,156 106,982 Total current assets 2,477,386 2,183,802 Property and equipment, net 774,549 627,689 Acquisition-related intangible assets, net 8,216 8,790 Goodwill 25,944 25,944 Deferred tax assets, net 1,182,833 1,182,883 Other long-term assets 217,279 165,091 Total assets $ 4,686,207 $ 4,194,199 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 182,224 $ 138,272 Accrued compensation and related benefits 93,635 85,963 Other accrued liabilities 222,075 145,130 Total current liabilities 497,934 369,365 Income tax liabilities 75,022 75,022 Deferred tax liabilities 90,316 90,480 Other long-term liabilities 127,511 127,835 Total liabilities 790,783 662,702 Commitments and contingencies (Note 7) Stockholders’ equity: Common stock and additional paid-in capital: $ 0.001 par value; shares authorized: 150,000 ; shares issued and outstanding: 49,142 and 48,709 , respectively 1,033,062 936,998 Retained earnings 2,861,853 2,609,651 Accumulated other comprehensive income (loss) 509 ( 15,152 ) Total stockholders’ equity 3,895,424 3,531,497 Total liabilities and stockholders’ equity $ 4,686,207 $ 4,194,199 See accompanying notes to unaudited condensed consolidated financial statements. 3 Table of Contents MONOLITHIC POWER SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per-share amounts) (Unaudited) 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: Research and development 118,618 96,266 219,184 188,493 Selling, general and administrative 118,558 104,992 221,905 197,236 Total operating expenses 237,176 201,258 441,089 385,729 Operating income 303,894 164,758 545,046 333,517 Other income, net 17,835 12,220 23,865 17,351 Income before income taxes 321,729 176,978 568,911 350,868 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. 4 Table of Contents MONOLITHIC POWER SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited) 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 Foreign currency translation adjustments 10,656 19,634 15,695 24,773 Net change in unrealized gains and losses on available-for-sale securities ( 35 ) ( 1 ) ( 34 ) 47 Other comprehensive income, net of tax 10,621 19,633 15,661 24,820 Comprehensive income $ 267,919 $ 154,642 $ 466,185 $ 294,881 See accompanying notes to unaudited condensed consolidated financial statements. 5 Table of Contents MONOLITHIC POWER SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except per-share amounts) (Unaudited) Common Stock and Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity 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 Dividends and dividend equivalents declared ($ 2.00 per share) - - ( 99,041 ) - ( 99,041 ) Common stock issued 16 - - - - Repurchases of common stock ( 3 ) ( 4,048 ) - - ( 4,048 ) Stock-based compensation expense - 53,184 - - 53,184 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 Other Comprehensive Loss Total Stockholders’ Equity 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 Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity 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 Net income - - 450,524 - 450,524 Other comprehensive income - - - 15,661 15,661 Dividends and dividend equivalents declared ($ 4.00 per share) - - ( 198,322 ) - ( 198,322 ) Common stock issued 436 5,830 - - 5,830 Repurchases of common stock ( 3 ) ( 4,048 ) - - ( 4,048 ) Stock-based compensation expense - 94,282 - - 94,282 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 Other Comprehensive Loss Total Stockholders’ Equity 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. 6 Table of Contents MONOLITHIC POWER SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Six Months Ended June 30, 2026 2025 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 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 Accrued compensation and related benefits 6,983 15,584 Income tax liabilities 32,640 33,798 Other accrued liabilities 19,211 2,958 Net cash provided by operating activities 478,159 494,024 Cash flows from investing activities: Purchases of property and equipment ( 153,272 ) ( 88,485 ) Purchases of investments ( 263,797 ) ( 393,010 ) Maturities and sales of investments 14,591 211,227 Other 5,621 ( 3,015 ) Net cash used in investing activities ( 396,857 ) ( 273,283 ) Cash flows from financing activities: Property and equipment purchased on extended payment terms ( 897 ) ( 1,902 ) 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 ) Net cash used in financing activities ( 178,611 ) ( 135,327 ) Effect of change in exchange rates 3,591 10,169 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 Cash, cash equivalents and restricted cash, end of period $ 1,005,803 $ 787,524 Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets: Cash and cash equivalents $ 1,005,587 $ 787,382 Restricted cash included in other long-term assets 216 142 Total cash, cash equivalents, and restricted cash $ 1,005,803 $ 787,524 Supplemental disclosures for cash flow information: Cash paid for income taxes, net $ 88,705 $ 17,007 Non-cash investing and financing activities: Liability accrued for property and equipment purchases $ 26,997 $ 6,108 Liability accrued for dividends and dividend equivalents $ 100,326 $ 77,193 See accompanying notes to unaudited condensed consolidated financial statements. 7 Table of Contents MONOLITHIC POWER SYSTEMS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Monolithic Power Systems, Inc., a Delaware corporation, and its wholly owned subsidiaries (the “Company” or “MPS”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted in accordance with these accounting principles, rules and regulations. All intercompany accounts and transactions have been eliminated. The information in this report should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 27, 2026. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. The financial statements contained in this Quarterly Report on Form 10-Q are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or for any other future periods. Summary of Significant Accounting Policies 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 The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions used in these condensed consolidated financial statements primarily include those related to income tax valuation allowances and stock-based compensation. 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 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): Disaggregation of Income Statement Expenses , which aims to provide more detailed information about the types of expenses in commonly presented expense captions. The Company will adopt this standard in its Form 10-K for the fiscal year ending December 31, 2027. The Company is evaluating the impact of adoption on its Consolidated Financial Statements. 8 Table of Contents 2. REVENUE RECOGNITION Revenue from Product Sales 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 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 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 Europe 34,832 26,497 70,631 51,489 U.S. 26,212 18,127 55,986 33,376 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 % Distributor B 15 % 17 % 15 % 18 % Distributor C * 11 % * 11 % Distributor D 10 % * * * ____________________________ * Represents less than 10%. The Company’s agreements with these third-party distributors were made in the ordinary course of business and may be terminated with or without cause by these distributors with advance notice. Although the Company may experience a short-term disruption in the distribution of its products and a short-term decline in revenue if its agreement with any of the distributors were terminated, the Company believes that such termination would not have a material adverse effect on its financial statements because it would be able to engage alternative distributors, resellers and other distribution channels to deliver its products to end customers within a relatively short period following any termination of the agreement with a distributor. Purchase orders, which are generally governed by sales agreements or the Company’s standard terms of sale, set the final terms for unit price, quantity, shipping and payment agreed upon between the Company and the customer. The Company considers purchase orders to be contracts with the customers. The unit price as stated on the purchase orders is considered the observable, stand-alone selling price for the contracts. 9 Table of Contents The Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised goods or services to its customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company excludes taxes assessed by government authorities, such as sales taxes, from revenue. Product sales consist of a single performance obligation that the Company satisfies at a point in time. The Company recognizes product revenue from distributors and direct end customers when the following events have occurred: (a) the Company has transferred physical possession of the products, (b) the Company has a present right to payment, (c) the customer has legal title to the products, and (d) the customer bears significant risks and rewards of ownership of the products. In accordance with the shipping terms specified in the contracts, these criteria are generally met when the products are shipped from the Company’s facilities (such as the “Ex Works” shipping term) or delivered to the customers’ locations (such as the “Delivered Duty Paid” shipping term). Under certain consignment agreements, the Company recognizes revenue when customers consume products from the consigned inventory locations, at which time control transfers to the customers and the Company issues invoices. Variable Consideration The Company accounts for price adjustments and stock rotation rights as variable consideration that reduces the transaction price and recognizes that reduction in the same period the associated revenue is recognized. Certain distributors have limited stock rotation rights that permit the return of a small percentage of the previous six months’ purchases in accordance with the contract terms. The Company estimates the stock rotation returns using the expected value method based on an analysis of historical returns, and the current level of inventory in the distribution channel. The Company records a liability for the stock rotation reserve, with a corresponding reduction to revenue. In addition, the Company recognizes an asset for product returns which represents the right to recover products from the customers related to stock rotations, with a corresponding reduction to cost of revenue. Contract Balances Accounts Receivable: The Company records a receivable when it has an unconditional right to receive consideration after the performance obligations are satisfied. The Company’s accounts receivable are short-term, with standard payment terms generally ranging from 30 to 90 days. The Company does not require its customers to provide collateral to support accounts receivable. The Company assesses collectability by reviewing accounts receivable on a customer-by-customer basis. To manage credit risk, management performs ongoing credit evaluations of the customers’ financial condition, monitors payment performance, and assesses current economic conditions, as well as reasonable and supportable forecasts of future economic conditions, that may affect collectability of the outstanding receivables. For certain customers, the Company requires standby letters of credit or advance payments prior to shipments of goods. 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 the customers with accounts receivable equal to 10% or more of the Company’s total accounts receivable: Customer June 30, 2026 December 31, 2025 Distributor A 33 % 35 % Value-added reseller A 20 % * Distributor B 15 % 14 % ____________________________ * Represents less than 10%. 10 Table of Contents Practical Expedients The Company has elected the practical expedient to expense sales commissions as incurred because the amortization period would have been one year or less. The Company’s standard payment terms generally require customers to pay 30 to 90 days after the Company satisfies the performance obligations. For this reason, the Company has elected not to determine whether contracts with customers contain significant financing components. The Company’s unsatisfied performance obligations primarily include products held in consignment arrangements and customer purchase orders for products that the Company has not yet shipped. Because the Company expects to fulfill these performance obligations within one year, the Company has elected not to disclose the amount of these remaining performance obligations. 3. STOCK-BASED COMPENSATION 2014 Equity Incentive Plan In April 2013, the Board of Directors adopted the Company’s 2014 Equity Incentive Plan (the “2014 Plan”), which the Company’s stockholders approved in June 2013. In October 2014, the Board of Directors approved certain amendments to the 2014 Plan. The amended 2014 Plan became effective on November 13, 2014 and provided for the issuance of up to 5.5 million shares. In April 2020, the Board of Directors further amended and restated the amended 2014 Plan (the “Amended and Restated 2014 Plan”), which the Company’s stockholders approved in June 2020. The Amended and Restated 2014 Plan became effective on June 11, 2020 and provides for the issuance of up to 10.5 million shares. The Amended and Restated 2014 Plan will cease being available for new awards on June 11, 2030. 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of revenue $ 1,764 $ 1,913 $ 3,238 $ 3,586 Research and development (“R&D”) 12,483 12,469 23,758 24,147 Selling, general and administrative (“SG&A”) 38,937 45,716 67,286 85,171 Total stock-based compensation expense $ 53,184 $ 60,098 $ 94,282 $ 112,904 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. Equity awards granted to the Company’s executive officers are subject to the tax deduction limitations set by Section 162(m) of the Internal Revenue Code. Restricted Stock Units ( “ RSUs ” ) 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 such awards include service conditions which require continued employment with or service to the Company. 11 Table of Contents 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 Outstanding at January 1, 2026 771 $ 535.78 Granted 251 (1) $ 1,005.72 Vested ( 80 ) $ 430.30 Forfeited ( 50 ) $ 571.38 Outstanding at June 30, 2026 892 $ 687.48 ____________________________ (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 $ 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: In February 2026, the Compensation Committee granted 42,000 PSUs to the executive officers, which represent the target number of shares that can be earned based on the degree of achievement of two sets of independent performance goals (the “2026 Executive PSUs”). For the first goal, the executive officers can earn up to 300 % of the target number of the 2026 Executive PSUs based on the achievement of the Company’s three-year (2026 through 2028) average revenue growth rate in excess of the analog industry’s three-year average revenue growth rate as published by the Semiconductor Industry Association (the “SIA”). For the second goal, the executive officers can earn up to 200 % of the target number of the 2026 Executive PSUs if the Company secures manufacturing capacity that can support a specified level of annual revenue at the end of the three-year performance period. For both goals, a percentage of the 2026 Executive PSUs will fully vest on December 31, 2028, depending on the degree to which the pre-determined goals are met during the performance period. Assuming the achievement of the highest level of the performance goals, the total stock-based compensation cost for the 2026 Executive PSUs will be $ 208.2 million. 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 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: stock price of $ 1,164.83 , simulation term of three years , expected volatility of 53.39 %, risk-free interest rate of 3.60 %, and expected dividend yield of 0.69 %. There is no illiquidity discount because the awards do not contain any post-vesting sales restrictions. 12 Table of Contents 4. BALANCE SHEET COMPONENTS Inventories Inventories consisted of the following (in thousands): June 30, 2026 December 31, 2025 Raw materials $ 86,874 $ 107,801 Work in process 306,554 220,410 Finished goods 282,421 236,438 Total $ 675,849 $ 564,649 Other Current Assets Other current assets consisted of the following (in thousands): June 30, 2026 December 31, 2025 Prepaids and other $ 44,156 $ 46,982 Other receivables (1) - 60,000 Total $ 44,156 $ 106,982 ____________________________ (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 consisted of the following (in thousands): June 30, 2026 December 31, 2025 Deferred compensation plan assets $ 115,366 $ 107,096 Refundable deposit (1) 40,000 - Operating lease right-of-use (“ROU”) assets 23,867 24,886 Other 38,046 33,109 Total $ 217,279 $ 165,091 ____________________________ (1) The refundable deposit as of June 30, 2026 was for a long-term assembly service agreement. Other Accrued Liabilities Other accrued liabilities consisted of the following (in thousands): June 30, 2026 December 31, 2025 Dividends and dividend equivalents $ 101,683 $ 81,510 Stock rotation and sales returns 19,197 17,150 Income tax payable 35,606 2,920 Other 65,589 43,550 Total $ 222,075 $ 145,130 13 Table of Contents Other Long-Term Liabilities Other long-term liabilities consisted of the following (in thousands): June 30, 2026 December 31, 2025 Deferred compensation plan liabilities $ 106,014 $ 103,954 Operating lease liabilities 18,934 19,972 Dividend equivalents 2,563 3,909 Total $ 127,511 $ 127,835 5. NET INCOME PER SHARE Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share reflects the potential dilution from contingently issuable shares and is calculated using the treasury stock method. Contingently issuable shares, including all types of equity awards, are considered outstanding shares of common stock and included in basic net income per share as of the date that all necessary conditions to earn the awards have been satisfied. Prior to the end of the contingency period, the number of contingently issuable shares included in diluted net income per share is based on the number of shares, if any, that would be issuable under the terms of the arrangement at the end of the reporting period as if the end of the reporting period were the end of the contingency period. 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Numerator: Net income $ 257,298 $ 135,009 $ 450,524 $ 270,061 Denominator: Weighted-average outstanding shares—basic 49,138 47,887 49,118 47,869 Effect of dilutive securities 122 132 133 143 Weighted-average outstanding shares—diluted 49,260 48,019 49,251 48,012 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. 6. SEGMENT AND GEOGRAPHIC INFORMATION The Company operates in one reportable segment that includes the design, development, marketing and sale of high-performance, semiconductor-based power electronics solutions for the storage and computing, enterprise data, automotive, industrial, communications, and consumer end markets. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for the purposes of allocating resources and evaluating financial performance. Specifically, the CODM uses net income that is reported on the Condensed Consolidated Statements of Operations, and cash provided by operating activities reported in the Condensed Consolidated Statements of Cash Flows, to decide whether and how much to reinvest profits into core business operations or to return to stockholders in the form of stock repurchases and dividends. All significant segment expenses have been captured on the face of the Condensed Consolidated Statements of Operations. 14 Table of Contents The following is a summary of long-lived assets by geographic region (in thousands): Country June 30, 2026 December 31, 2025 China $ 432,821 $ 332,506 U.S. 204,655 165,107 Taiwan 68,477 65,081 Other 68,596 64,995 Total $ 774,549 $ 627,689 7. COMMITMENTS AND CONTINGENCIES Product Warranties and Rework The Company generally provides either a one - or two-year warranty against defects in materials and workmanship and will repair the products, provide replacements at no charge to customers or issue a refund. As they are considered assurance-type warranties, the Company does not account for them as separate performance obligations. The Company accrues for warranty and rework costs upon evaluation of customer specific claims. 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 $ 14.0 million and $ 10.1 million as of June 30, 2026 and December 31, 2025, respectively. Purchase Commitments The Company has outstanding purchase obligations with its suppliers and other parties that require the purchases of goods or services. 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 June 30, 2026 were as follows (in thousands): 2026 (remaining six months) $ 256,444 2027 313,075 2028 1,031 2029 486 Total $ 571,036 Litigation 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. The Company is also subject to litigation initiated by its stockholders. These proceedings often involve complex questions of fact and law and may require the expenditure of significant funds and the diversion of other resources to prosecute and defend. 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 June 30, 2026. 15 Table of Contents 8. CASH, CASH EQUIVALENTS AND INVESTMENTS The following is a summary of the Company’s cash, cash equivalents and debt investments (in thousands): June 30, 2026 December 31, 2025 Cash $ 771,683 $ 969,628 Money market funds 233,904 129,674 Certificates of deposit 309,162 157,243 U.S. treasuries and government agency bonds 99,012 - Auction-rate securities backed by student-loan notes 25 49 Total $ 1,413,786 $ 1,256,594 June 30, 2026 December 31, 2025 Reported as: Cash and cash equivalents $ 1,005,587 $ 1,099,302 Short-term investments 408,174 157,243 Investment within other long-term assets 25 49 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 Due in 1 - 5 years 103,054 103,054 Due in greater than 5 years 25 25 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. FAIR VALUE MEASUREMENTS Fair Value Hierarchy The Company has estimated the fair value of its financial assets by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1—includes instruments with quoted prices in active markets for identical assets. • Level 2—includes instruments for which the valuations are based upon quoted market prices in active markets involving similar assets or inputs other than quoted prices that are observable for the assets. The market inputs used to value these instruments generally consist of market yields, recently executed transactions, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. Pricing sources may include industry standard data providers, security master files from large financial institutions, and other third-party sources used to determine a daily market value. • Level 3—includes instruments for which the valuations are based on inputs that are unobservable and significant to the overall fair value measurement. 16 Table of Contents Financial Assets Measured at Fair Value on a Recurring Basis The following tables detail the fair value of the Company’s financial assets measured on a recurring basis (in thousands): June 30, 2026 Total Level 1 Level 2 Level 3 Money market funds $ 233,904 $ 233,904 $ - $ - Certificates of deposit 309,162 - 309,162 - U.S. 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 - - 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 $ - $ - Certificates of deposit 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 - - Total $ 362,450 $ 205,158 $ 157,243 $ 49 10. DEFERRED COMPENSATION PLAN The following table summarizes the deferred compensation plan balances on the Condensed Consolidated Balance Sheets (in thousands): June 30, 2026 December 31, 2025 Deferred compensation plan asset components: Cash surrender value of corporate-owned life insurance policies $ 35,283 $ 31,612 Fair value of mutual funds and money market funds 80,083 75,484 Total $ 115,366 $ 107,096 Deferred compensation plan assets reported in: Other long-term assets $ 115,366 $ 107,096 Deferred compensation plan liabilities reported in: Accrued compensation and related benefits $ 6,795 $ 3,707 Other long-term liabilities 106,014 103,954 Total $ 112,809 $ 107,661 17 Table of Contents 11. OTHER INCOME, NET The components of other income, net, were as follows for the periods presented (in thousands): 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 ) Other 98 ( 620 ) 675 ( 604 ) Total $ 17,835 $ 12,220 $ 23,865 $ 17,351 12. INCOME TAXES 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. 13. STOCKHOLDERS’ EQUITY Cash Dividend Program The Company has a dividend program approved by its Board of Directors, pursuant to which the Company intends to pay quarterly cash dividends on its common stock. The Board of Directors declared the following cash dividends for the periods presented (in thousands, except per-share amounts): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 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. The Company anticipates that cash used for future dividend payments will come from its domestic cash, cash generated from ongoing U.S. operations, and cash repatriated from certain foreign subsidiaries. The Company also anticipates that earnings from other foreign subsidiaries will continue to be indefinitely reinvested. Cash Dividend Equivalent Rights The Company’s RSUs contain rights to receive cash dividend equivalents, which entitle employees who hold RSUs to the same dividend value per share as holders of common stock. The dividend equivalents are accumulated and paid to the employees after the underlying RSUs vest. Dividend equivalents accumulated on the underlying RSUs are forfeited if the underlying RSUs do not vest. As of June 30, 2026 and December 31, 2025 , accrued dividend equivalents totaled $ 6.0 million and $ 9.4 million, respectively. Stock Repurchase Program In February 2025, the Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $ 500.0 million of its common stock through February 2028. Shares are retired upon repurchase. The Company repurchased 3,000 shares of its 18 Table of Contents 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. The timing and the number of shares of any repurchased common stock will be determined by the Company’s management based on its evaluation of market conditions, legal requirements, share price, and other factors. 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. 14. SUBSEQUENT EVENTS MPSU Awards 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. 19 Table of Contents