Welcome everyone to the MPS second quarter 2025 earnings webinar. My name is Arthur Lee and I will be the moderator for this webinar. Joining me today are Michael Hsing, CEO and Founder of MPS, Bernie Blegen, EVP and CFO, and Tony Balow, Vice President of Finance. Earlier today along with our earnings announcement, MPS released a written commentary on the results of our operations. Both documents can be found on our website. Before we begin, I would like to remind everyone that in the course of today's presentation we may make forward-looking statements and projections within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risk and uncertainties. The risks, uncertainties, and other factors that could cause actual results to differ from these forward-looking statements are identified in the Safe Harbor statements contained in the Q2 2025 earnings release, our Q2 2025 earnings commentary, and in our SEC filings, including our Form 10-K which can be found on our website. Our statements are made as of today and we assume no obligation to update this information. Now I would like to turn the call over to Bernie Blegen. Thanks Arthur. Good afternoon and welcome to our Q2 2025 earnings call. In Q2, MPS achieved record quarterly revenue of $664.6 million, 4.2% higher than the first quarter of 2025 and 31.0% higher than Q2 2024. This performance reflected the ongoing strength of our diversified market strategy, consistent execution, continued innovation, and strong customer focus. Let me call out a few highlights from the second quarter. We continue to see diversified revenue growth across all of our end markets. We began initial shipments of our power solutions to support our customers. New AI ASIC-based products, storage, and compute revenue grew sequentially off a strong Q1 as we continue to see demand for both memory solutions and notebook power solutions. MPS continues to focus on innovation and solving our customers' most challenging problems. We continue to invest in new technology, expand into new markets, and diversify our end market application and global supply chain. This will allow us to capture further future growth opportunities, maintain supply chain stability, and swiftly adapt to market changes as they occur. Our proven long-term growth strategy remains intact as we continue our transformation from being a chip-only semiconductor supplier to a full-service silicon-based solutions provider. I will now open the webinar up for questions. Thank you Bernie and Analyst. I would now like to begin our Q&A session. As a reminder, if you would like to ask a question, please click on the participants icon in the menu bar and then click the raise hand button. Our first question is from Tore Svanberg of Stifel. Tore, your line is now open. Yes, thank you. Congratulations on another record quarter. Michael, Bernie, I was hoping you could talk a little bit more about the September quarter. What the setup is there. You're guiding for 8% sequential growth at the midpoint. I was just hoping you could give us some puts and takes of the six end markets in the September quarter. Sure. Happy to, Tore. When we look at Q3, we've got enterprise data growing between 20% and 30% sequentially. We also see a seasonal uplift in consumer, and with the exception of storage and compute, all of our other lines of business are up high single digits. In storage and compute, we just have a little bit of caution primarily because you're coming off of two very strong quarters in Q1 and Q2. That's great, caller. Just as my follow up, you mentioned the AI ASIC-based products programs now starting to ramp up. I was hoping you could add a bit more color there. Are we talking about multiple customers? Are these primarily vertical power architectures? I guess a really important question is back at the Analyst Day, you gave us that $4 billion SAM for your enterprise data market and there's a lot that's happened since then. I was just wondering if that number is starting to move quite a bit upward. Yeah, you're right. Since the Analyst Day, things are changing fast and everything's good. After a couple of years of these enterprise data segments, and clearly you establish a winner or losers, and the NPSS appear to be winners. We do engage multiple customers, if it's not all large customers or large customers or potential customers. Like Amanda, we have a lot of design weights and design activities, and while their threatens are ramping up in the near terms, and also a lot of small emerging players, and we see the peripheral of not only the, in the data centers but all kind of applications. That's what we very excited in the long terms, the short term ones. I said in year terms it doesn't mean, okay, next six months, the next 12 months. I keep saying, okay, our forecast revenues is always a ± 6- 12 months. You said earlier is a $4 billion. That's what we said. That's where we see it, and we're going to get there. Great. Thank you and congrats again. Okay, thank you. Our next question is from Chris Caso of Wolfe Research. Chris, your line is now open. Yes, thanks. Good evening. I guess the first question is with regard to enterprise data. Previously you had provided some guidance on that to be flat ± 20%. You've talked about guidance for the September quarter and any more visibility with regard to the full year guidance for that. Any more narrowing of that range and whatever kind of color you can provide on your expectations there. Sure, Chris. The market, as Michael just said, remains dynamic. We have fairly short lead times even for Q4. We don't believe we have our arms around all the business that's likely to occur. That's just the nature of the dynamic of this fast-moving market. At Q2, we identified the range as being flat to down potentially 20%. While we're not guiding on Q4, in addition to the, you know, growing Q3 sequentially by 20- 30%, I can say that Q4 will be up sequentially. Whatever we said in the beginning of the year, we feel comfortable. Got it. Okay, that's helpful. Just in general, you've obviously listened to the calls from some of your peers that there's some degree of macro uncertainty out there. Some of the customers, some of your competitors rather, have expressed some caution and some concern about some pull ins in certain areas. I wonder if you could comment on that with respect to your business and in general as compared to 90 days ago. Is there anything that's changed in your view of the overall markets or your expectations with respect to the year? I'll give you an arrogant answer. Sorry, I don't listen to any other cost. You tell me that maybe I know from you. We focus ourselves as always. Market condition is a market conditions. Again, we provide the components to the multiple segments. That's where we focus on it, and we focus on the internal executions and executions with our customers demanding in the futures. That's what we always do, and whatever happens, happens. As long as we're much better than everybody else. If I could add to that. In. Q2 we used the phrase that we were cautiously optimistic about the outlook for the balance of the year. I think that still describes how we feel from the standpoint that we have seen broad-based, strong, continued strong demand profile in all of our end markets. However, the ordering pattern, because there is a little bit different risk pattern, remains with short lead times. As a result, we're not necessarily building backlog that we have visibility out beyond two quarters. That's a little bit different from most recoveries that we've experienced. I want to stress that we feel very good about our overall positioning for the remainder of the year. Helpful. Thank you. Our next question is from Quinn Bolton of Needham. Quinn, your line is now open. Thank you. Congratulations on another good quarter, Michael, Bernie, and Tony. I guess, Michael or Bernie, just wanted to ask, as you start to ship into some of these ASIC platforms, can you give us a sense, are the ASIC platforms, do they tend to be sourced by multiple PMIC suppliers, or do you tend to see sole, you know, sole source sockets for a given generation of an ASIC, and then the ASIC vendor may source the first generation with yourself and, say, a second generation with a competitor? That's a question I've gotten a fair amount, and just wondering if you could give us some sense on whether those ASIC programs tend to be single sourced or multiple sourced. Yeah, we see a variety of single-sourced and double- sourced, multiple- sourced, high-cost source and the low-cost source, all source. We deliver what our customer, we develop assisting vertical power, which is more module-like solutions and even a chip site, and we do whatever our customers demand. Maybe I can say that. Okay, too vague. Okay. I disappointed that you didn't ask any more specific technical questions. I'll save those for Analyst Day or maybe the callback. Let me add real quickly, each of the end customers has their own reasons for how they're selecting their suppliers. Some of them, it's supply chain resilience, others want innovation. Like every opportunity we have, we provide strong customer focus and consistent execution. That's what makes us feel that we're very well positioned across all of these opportunities. Yeah. What I tell you, them high cost, low cost, multiple customer, one, one, one source, two source, multiple sources, they all source nothing but the truth. Okay, got it. The second question, I'll move to the automotive end market. Kind of wondering if you guys could give us your outlook for the second half of the year. What are the biggest drivers of growth? I think you have a couple of platforms with Western OEMs set to ramp where you have some pretty good content. Wondering the extent that those ramp, does that drive growth half- over- half in the automotive business, or are you looking for sort of more of a flattish half-over-half in that segment in the second half. Automotive. We've been very consistent on how we've described the rollout for calendar 2025. We enjoyed a nice step up sequentially from Q4- Q1. We anticipated that would be flattening a little bit in the middle part of the year and then picking up end of Q3 and Q4 as these new content opportunities come online. While there is some back and forth on the SAR and units, and in particular with individual companies, we're less affected by that than the timing of these new content ramps. Quinn, I think just one thing to add on that, right. I know we're hyper focused just on the year, but I think if we step back and look longer term into 2026, the opportunities around 48V, some of the zonal architectures, I think they continue to be opportunity for us going forward, and this will be a growth area for us over the long term. Thank you. Okay, there are too many things I can't remember. Our next question is from Ross Seymore of Deutsche Bank. Ross, your line is now open. Hi guys. Congrats on the quarter and guide. Just wanted to dive first into the enterprise data side. You mentioned in your preamble or the press release that both the AI side and the server side were strong. Can you talk a little bit about any differences between those two growth rates, composition, kind of the breakdown of EDM between those in both 2Q and 3Q. Again, something that we've talked about as it relates to enterprise data is that the lines between traditional CPU and AI are getting a little blurry. It's very hard to make clear statements of relative growth or importance. Having said that, I think that the overall profile both for the near term or midterm and the long term remains very positive. Great. I guess as my follow up there's been a decent number of concerns about pull ins and tariff related activity. Obviously you haven't mentioned anything on that, but outside of the enterprise data segment, when we think about the cyclical recovery that's happening, are you seeing any evidence of that kind of tariff influenced behavior, and or do you think this, the cycle itself is really what's driving demand? We believe this cycle is driving demand. We really don't have enough information to support a change in our customers' ordering pattern that would be related to tariffs. We don't want to pretend to know that. These are our control, and whatever happens, happens. Perfect. Thank you, guys. Oh, by the way, our inventory is low. Ross. I didn't want to go there, but. It was nice to see. Thank you. Our next question is from Rick Schafer of Oppenheimer. Rick, your line is now open. Yeah, thanks guys. Congrats on another nice quarter. You guys make it look easy. I wanted to ask a quick follow-up on the $4 billion enterprise data SAM number. I was curious if that considers the eventual conversion of server CPU to 48V, does that factor that in or is that incremental to that number? Second part of that question, I'm curious how much does HVDC increase that SAM or that TAM? When do you expect direct current rack power to start to really take off? I think you started sampling last quarter if I'm correct. Yes. Okay, that was a. These are the 800 V systems and 400V systems, and yes, we'll start to sampling. These are not in the factors, and both what you mentioned, the 48V, 48V servers, and also the 48V systems and 800V system where this far in the future. Maybe far in the future is maybe a couple years, a year, 18- 24 months kind of things, or maybe even longer. Okay, we don't want to call the market. We are the only solution providers, and these one we believe ultimately all data center will convert into this type of a 48V and 800V systems. That's what we targeting. That's what we emerge and focus our development. Not really in the last couple years, we said many years ago, even 2016, we foresee 48V that would be the solution, and we became one of the key supplier in last couple years. Three years ago, we started working on the 800V systems, and also not only that, also the BMS, the Battery Management Systems, and these are absolutely fit for that type of applications and not only for vehicles, energy storage, and the data centers. This is all about the energy utilizations. Hey Rick, the only thing I'd add, I know you asked a very specific enterprise data question, but remember we kind of think about the overall data center opportunity, and you know, whether that's optical module growth, whether that's going to be memory. All those things, I think, play in as opportunities for us. I'm just trying to get us to step back a bit from only focusing on the enterprise data segment. I appreciate that, Tony. That actually leads me to my second question, which is I know it's not your largest segment, but communication seems to be firing on all cylinders. I mean satellite, Wi-Fi, 5G, and transceiver power that you just mentioned. I didn't know if you guys could elaborate at all or talk at all about order-to-order trends, order velocities there, outlook for that segment, like just basically any color you'd be able to share there. If you look at about a year ago, we saw a large step up from Q2 2023- Q2 2024. A lot of that was in the core networking telecom business. That element has plateaued. At the same time, we saw growth in the optical modules within the data center. That's been growing very nicely. Right now I think that we're positioned very well, but I don't necessarily have a strong signal of additional investment in the network category. Okay, thanks guys. Our next question is from Josh Buchalter of Cowen. Josh, your line is now open. Hey guys, thank you for taking my question and congrats on the record results as well. My shock, but I'm also going to ask about enterprise data as we get into the back half of this year. Any metrics or guidelines you can give us on how much this new AI ASIC is contributing to the back half of the year, how it compares to, you know, your lead GPU customer. I mean, is this opportunity comparable in size to what you, you know, you've been able to generate on the GPU side? Thank you. All these questions are being asked being similar questions that we all answered. Okay, we're looking in the futures, even the near term future looking good. That's only about what, 25% of MPS business. The bigger revenue growth is the rest of the company. I hope we should have more question on the rest of the business. I will take the subtle hint there and ask about auto. Is auto and the enterprise data add together maybe only 40%. How about something else? All right. I mean, storage and compute, then we can take this anywhere. No, I'm just joking. Ask whatever you want to ask. I'm going to stick with storage and compute then. You mentioned some caution there into the back half of the year, is that sort of an inventory dynamic? You had gained a bunch of share, I believe on DDR5 to start the year. Is there still more room to run with from that on the share and content side on the DDR side within storage and compute? Thank you. Yeah, Josh, that's an excellent question because we had a very significant step up in our position competitively as well as from revenue in both storage and notebook. The reason that I use the term cautious is because both end markets tend to be a different demand profile from like automotive, for example. What I mean by that is historically notebooks have always been like Consumer. And been. Expansion in Q3. We had such an atypical seasonality with a buildup in Q1 and Q2 that it just pays to be a little bit cautious there. Likewise on memory, I have nothing to indicate that there's a slowdown or change of market positioning. Again, it's just that in the past they've had historic boom and bust cycles. That's the only reason that I'm offering now. Having said that, we were pleasantly surprised in Q2 that the results for that particular group came in better than expected. Yeah. You know we grow significantly this year, right? Yeah. Our full year results are going to be well above what we've been doing. We're probably in for the full year will be between 40%- 50% growth for the year. Yeah, that's the reason Bernie asked you. Okay. If you're more cautious, okay, not going to be 100% next quarters. Okay. That's what we mean. Relatively, what cautious means, okay, cautious is not expected another 50% or higher. Yeah. Got it. Thanks, guys. Next quarter's questions on TVs. Okay. All right, thank you. Our next question is from Gary Mobley of Loop Capital. Gary, your line is now open. Hey guys, thanks for taking my question. Bernie, I appreciate the fact that you don't have a lot of visibility out into the fourth quarter, but I want to ask about the seasonality of the fourth quarter. Typically Q4 might be down, what, mid single digit% sequentially. How do you see it shaping up this year? I don't have a seasonality anymore. Yeah, okay. I think Michael said it all there. If you look at that historic trend and I don't know the last time we actually fulfilled being down, it's in a fairly narrow range. I think flattish is probably the easiest way to describe the outlook. Helpful. All right, it sounds like you've got plenty of capacity, plenty of inventory. Can you remind us what sort of annual revenue you could support with your internal and external capacity? Can you confirm whether or not the book to bill ratio is in fact trending above parity? Yeah. Two separate questions, but I'll try to address pretty quickly. I'll answer the second part, our inventory is low. Our current capacity, and we've talked about this in the past, is to be able to support $4 billion of revenue with diversification of 50% of that outside of China. What we're trying to do is be able to support all of our customers' requirements in whatever supply chain profile they're looking for. When you look at the book-to-bill ratio, I commented on this earlier that we're having sort of an atypical ordering pattern. When you consider that we do believe we're in the middle of a cyclical recovery that's very broad-based, what I mean by that is the ordering patterns are much more short-term. We're not building book-to-bill ratios of like 1.4/ 1.5 where we'd have backlog continuing out into Q1 and Q2 of next year. It's really a more near-term focus. With those short lead times, that's the only reason I have a little bit of concern about Q4 and I don't want to send a negative signal. It's just that that's the nature of the demand profile. That's it. I don't want to send a negative signal or the low inventories. We are expanding our supply chains and we can meet it in Q4 in our customer demand. For next year, we start to, even now we continuously qualify the newer supplier and whatever it takes to meet the customer demand, that's what we always do. The only thing I'd add, I don't know if it was part of your question, was in addition to the overall capacity, the geographical balance of it, and what we've said is we would by the end of the year have half of that capacity outside of China, half of it inside. To Michael's point, we just want to be able to and believe we can meet customer demand no matter how they want to route their product. Thank you, guys. Our next question is from Kelsey Chia of Citi Research. Kelsey, your line is now open. Hi Michael and Bernie. Congrats on your strong results. I have a question on customer concentration. It's great to hear that you guys are shipping to the ASIC platforms. Does it mean that MPS is sort of back to the historical kind of diversified growth where there's no one customer that's more than 5% of your sales by the end of the year, or is the ASIC ramp sort of lumpy as well that can tilt that kind of customer concentration? Yeah, I think that when we had the high customer concentration, particularly in enterprise data, that was an aberration from our normal model of being broadly diversified in terms of customers and markets and geography. I think now that the portfolio of market entrants is starting to build up and we're going to have exposure to all of those opportunities. You'll see us go back to a more normal profile of customers, not contributing more than mid, mid high single digits. Okay, got it. My second question is on the growth rate. It seems that the analog industry has sort of been going through a downturn in the last two years and potentially for 2026 we could see pretty strong growth due to the cyclical recovery. You guys have a 10%- 15% outperformance target versus PE peers. That would imply sort of like a close to a 20% growth rate perhaps for next year. Is that the right assumption? If you can provide some color as to which end markets would be driving majority of that growth based on the content or design wins. Sure. I think that your rule of thumb as far as our traditional outperformance and also what the broader market looks like for 2026 are both accurate. I think within, you know, plus minus a couple percentage points, I can support that those numbers again. As far as the particular end market drivers for next year, we believe it's going to be broad based. Although with all of the enterprise data opportunities ramping next year, that will probably be a key contributor. Thank you. Thank you very much. Our next question is from William Stein of Truist. William, your line is now open. Great. Thanks for taking my question. First, I wanted to clarify about the short lead times and ordering patterns. Is it fair to say that the only thing that's really going to cause that to stabilize and lengthen is your extending the lead times that you quote to customers, which likewise is sort of difficult as long as revenue is, you know, fairly meaningfully below your capacity level. Is that a fair way to think about it? I don't know. It's correct. Characterization is meaningfully below our capacities, and I don't know that's an accurate statement or not, but overall it's a fast changing market and customers updating their models. Okay, we just keep it up. Yeah, I think we're being responsive to real demand. One thing we haven't touched on is that our channel inventories in each of the GEOs, major GEOs for us, are down in the quarter. They're also very lean. Right now we believe we're meeting real customer demand. Got it. That's great. By the way, Michael, what I meant was comparing the revenue guidance, revenue results, and guidance relative to a $4 billion level of capacity, there's a gap there. That's all I meant. Wasn't a criticism. It was, oh yeah, for billings and okay. It's not only for, it's for enterprise. We're building capacity towards it. That's the process. Got it. The other thing I wanted to ask about was to comment on the product development and revenue trajectory in three areas that you've highlighted in the past as sort of unique growth opportunities. One is modules, the other is converters, D- A and A- D converters. I think you hired a team a couple years ago. We haven't heard that much about it. The other is motion, which I know has ramped up, but I wonder how meaningful that's become relative to your overall. Thank you very much. Thank you very much. First thing, the e-commerce is kind of flopped, right? I answered your question, that part of your question, a few quarters ago. The good news is the module business is really growing, other than in the enterprise data and industrials, and again industrial sides, even consumer's sides. We offer those solutions that our customer doesn't want to get into the detailed design, and we provide a solution for them. These revenues next year are about 10%- 15% of our total revenues, other than the enterprise data power modules. These actually are very much related to when we provide assisting solutions. We're transforming a company, as Bernie said earlier, to be system providers, as solution providers. That's what our customer wants. If they want a chip, also we provide chips. The same. Time to help MPS revenue growth. We're not depending on only selling chips. A few years ago, I'm talking about Thailand selling chips only, okay, and that's where our revenue grows. The other things you're talking about, data converter. The data converter is kind of slow moving, okay, and we are releasing a standard product for that, okay, and for only some $2 billion of revenues. I. Maybe contributes very little and that doesn't, will not move the needles. As a product and in the product categories that provides a total solution, that's a part of a picture that really benefits the top line growth in terms of solutions, emotions. Finally, we get a needle moving and it's been for a while. We get over about $100 million some in the past few years and they are not too bad. It's slower than the MPS total growth. Now robotics, and we see it, AI-driven robotics will be okay. We see a lot of opportunities and a lot of potential to grow in the next couple of years. We. Provide the total AI power and. Not. Only AI power, we provide all the actuators, actuator solutions and motion controls, as well as battery, BMS solutions. These all combine all together. The motion will grow a lot faster than in the past few years. Thank you. If there are any follow up questions, please raise your hand. There are no further questions. I'd like to just say a few closing comments. I'd like to thank you for all joining us this conference call. I look forward to talking again during the third quarter 2025 conference call, which will likely be held in late October. Thank you. Have a nice day.