MPWR · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

MONOLITHIC POWER SYSTEMS, INC. · 2026-11-03 · Importance 18 · Surprise 14 · No source text

Third-quarter 2026 gross margin increased to 55.4% from 55.1% a year earlier, primarily because of product mix. Nine-month gross margin was 55.3%, compared with 55.2% in 2025. Cost of revenue increased $206.0 million in the quarter and $421.8 million for nine months, primarily from higher shipment volume and a greater mix of power solutions, which have higher average costs than discrete ICs.

Key facts

• Three-month cost of revenue was $536.9 million, or 44.6% of revenue, in 2026 versus $330.9 million, or 44.9%, in 2025; the $206.0 million increase was primarily driven by higher shipment volume and a higher mix of power solutions, which carry higher average costs than discrete ICs. source
• Nine-month cost of revenue was $1,335.6 million, or 44.7% of revenue, in 2026 versus $913.8 million, or 44.8%, in 2025; the $421.8 million increase was primarily driven by higher shipment volume and a higher mix of power solutions, which carry higher average costs than discrete ICs. source
• Gross margin was 55.4% for the three months ended September 30, 2026, compared with 55.1% in the same 2025 period; the increase was mainly driven by product mix. source
• Gross margin was 55.3% for the nine months ended September 30, 2026, compared with 55.2% for the same 2025 period. source

Impact estimates