Analysis of Investments
Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Monolithic Power Systems Inc., adjustment to net income
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The financial data shows a clear upward trend in both reported and adjusted net income over the analyzed period.
- Reported Net Income
- The reported net income increased steadily from US$164,375 thousand in 2020 to US$242,023 thousand in 2021, representing notable growth. The increase became even more pronounced in 2022, reaching US$437,672 thousand, nearly doubling the previous year's figure. In 2023, there was a slight decline to US$427,374 thousand, which indicates a marginal decrease but still maintains the significantly higher level compared to the years before 2022. The forecast or projection for 2024 shows a substantial jump to US$1,786,700 thousand, marking a dramatic increase beyond previous years.
- Adjusted Net Income
- The trend in adjusted net income parallels that of reported net income, starting from US$165,841 thousand in 2020, then rising to US$239,359 thousand in 2021. In 2022, adjusted net income saw a significant increase to US$431,008 thousand, closely following the reported net income's surge. There was a slight rise in 2023 to US$432,917 thousand, showing stability near the 2022 level. For 2024, the adjusted net income is projected to climb sharply to US$1,788,094 thousand, nearly equal to the forecasted reported net income, demonstrating consistency between reported and adjusted figures moving forward.
Overall, both reported and adjusted net incomes indicate strong growth, especially between 2021 and 2022. The slight dip or plateau in 2023 is minor given the substantial increases from 2020 through 2022. The projection for 2024 suggests a significant expansion, implying strong anticipated financial performance. The close alignment between reported and adjusted net incomes suggests that adjustments have a minimal impact on the income figures, reflecting consistent underlying business profitability trends throughout the period.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Monolithic Power Systems Inc., adjusted profitability ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Net Profit Margin
- The reported net profit margin exhibited a generally positive trend from 19.47% in 2020 to 24.39% in 2022, indicating improving profitability over this period. In 2023, a slight decrease to 23.47% occurred, followed by a substantial increase to 80.95% in 2024. The adjusted net profit margin followed a similar pattern, rising from 19.64% in 2020 to 24.02% in 2022, marginally decreasing to 23.77% in 2023, and then surging to 81.02% in 2024. The sharp increase in 2024 for both reported and adjusted margins suggests a significant improvement in operational efficiency or a one-time gain affecting profitability.
- Return on Equity (ROE)
- Reported ROE demonstrated growth from 17.01% in 2020 to a peak of 26.23% in 2022, signalling enhanced shareholder value generation. This was followed by a decline to 20.85% in 2023, and then a pronounced jump to 56.8% in 2024. The adjusted ROE mirrored this trend closely, rising from 17.16% in 2020 to 25.83% in 2022, dropping slightly to 21.12% in 2023, and sharply increasing to 56.84% in 2024. The significant increase in 2024 suggests an extraordinary improvement in equity profitability, potentially attributable to extraordinary items or restructuring effects reflected in both reported and adjusted figures.
- Return on Assets (ROA)
- Reported ROA showed a strong upward trend from 13.6% in 2020 to 21.26% in 2022, indicating better asset utilization and profitability. It then declined to 17.56% in 2023 before again increasing sharply to 49.4% in 2024. Adjusted ROA followed a consistent pattern, rising from 13.72% in 2020 to 20.93% in 2022, reducing slightly to 17.78% in 2023, and jumping to 49.43% in 2024. The substantial rise in 2024 points to an exceptional increase in asset efficiency or profitability drivers affecting the company's overall asset base.
- General Observations
- All key profitability and efficiency metrics—net profit margin, ROE, and ROA—demonstrated steady improvement from 2020 through 2022, slight decreases in 2023, and a remarkable surge in 2024. The consistency between reported and adjusted figures across all periods suggests that the adjustments made to underlying financials do not materially alter the trends observed. The dramatic increase in 2024 across all metrics may reflect extraordinary events or shifts impacting the company's financial performance profoundly, warranting further investigation to understand the sustainability and drivers of such growth.
Monolithic Power Systems Inc., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Net profit margin = 100 × Net income ÷ Revenue
= 100 × 1,786,700 ÷ 2,207,100 = 80.95%
2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × 1,788,094 ÷ 2,207,100 = 81.02%
- Net Income Trends
- The reported net income exhibited a strong upward trend from 164,375 US$ thousand in 2020 to 427,374 US$ thousand in 2023, representing a consistent increase over the four-year period. In 2024, a notable surge occurred, with reported net income reaching 1,786,700 US$ thousand, indicating a significant boost in profitability during that year.
- Similarly, the adjusted net income followed a comparable pattern, starting at 165,841 US$ thousand in 2020 and rising steadily to 432,917 US$ thousand by 2023. The 2024 figure showed a pronounced increase to 1,788,094 US$ thousand, closely mirroring the reported net income trend and confirming the substantial growth in financial performance.
- Net Profit Margin Analysis
- The reported net profit margin demonstrated improvement from 19.47% in 2020 to 24.39% in 2022, followed by a slight decline to 23.47% in 2023. A remarkable jump was observed in 2024, with the margin reaching 80.95%, signaling an extraordinary increase in profitability relative to revenue during this period.
- The adjusted net profit margin behaved similarly, increasing from 19.64% in 2020 to 24.02% in 2022, then modestly decreasing to 23.77% in 2023 before escalating sharply to 81.02% in 2024. This again emphasizes the exceptional profitability enhancement reflected in the adjusted figures for the final year.
- Overall Observations
- Both reported and adjusted figures indicate consistent growth in profitability and net margin up to 2023, with slight fluctuations in margin percentages suggesting stable operational efficiency. The dramatic increase in both net income and profit margin in 2024 is a key highlight, indicating an extraordinary event or change in business conditions that substantially improved financial outcomes.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 1,786,700 ÷ 3,145,767 = 56.80%
2 Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity
= 100 × 1,788,094 ÷ 3,145,767 = 56.84%
The financial data reveals significant growth and variability in the company’s net income and return on equity (ROE) over the five-year period.
- Net Income Trends
- Both reported and adjusted net incomes demonstrate a strong upward trajectory from 2020 through 2024. Reported net income increased from approximately 164 million USD in 2020 to nearly 1.79 billion USD in 2024, representing more than a tenfold increase over the period. Adjusted net income follows a similar pattern, rising from about 166 million USD to approximately 1.79 billion USD. This consistent growth indicates strengthened profitability and operational performance.
- Return on Equity (ROE) Trends
- ROE values, both reported and adjusted, initially show moderate growth from 2020 to 2022, rising from the 17% range to around 26%. However, ROE declines slightly in 2023 to approximately 21%, before surging dramatically in 2024 to nearly 57%. The substantial increase in ROE for 2024 suggests a considerable improvement in the company’s efficiency in generating profits from shareholders’ equity during that year.
- Comparison Between Reported and Adjusted Figures
- The reported and adjusted figures for both net income and ROE closely align throughout the period, with minor differences. Adjusted net income values are slightly higher than reported figures in most years except for 2024, where the difference is negligible. Similarly, adjusted ROE closely tracks reported ROE percentages, suggesting consistent application of adjustments that do not materially alter overall profitability metrics.
- Insights
- The substantial increase in net income and ROE in 2024 points to a notable change in the business environment, operational model, or one-time events driving exceptional profitability. The consistent upward trend in net income over the years reflects ongoing improvements, while the volatility observed in ROE, particularly the sharp rise in the final year, warrants further investigation to understand the drivers behind this performance enhancement.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × 1,786,700 ÷ 3,617,097 = 49.40%
2 Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × 1,788,094 ÷ 3,617,097 = 49.43%
The financial data indicates a significant upward trajectory in net income for the company over the analyzed period. Both reported and adjusted net incomes exhibit a consistent increase, reflecting strong earnings growth, particularly notable in the latest period ending December 31, 2024, where net income surpassed 1.7 million thousand US dollars, representing a substantial jump from prior years.
- Net Income Trends
- Reported net income rose from 164,375 thousand US dollars in 2020 to 1,786,700 thousand US dollars in 2024. Adjusted net income followed a similar pattern, starting at 165,841 thousand US dollars in 2020 and reaching 1,788,094 thousand US dollars in 2024. The closely aligned values indicate that accounting adjustments have minimal impact on the overall profitability figures.
- Return on Assets (ROA) Trends
- Reported ROA shows an overall increase over the period with some fluctuation: starting at 13.6% in 2020, peaking at 21.26% in 2022, then slightly declining to 17.56% in 2023 before sharply rising to 49.4% in 2024. Adjusted ROA mirrors this trend, indicating consistency between reported and adjusted metrics.
- Insights and Observations
- The progressive growth in net income suggests expanding profitability and possibly enhanced operational efficiency or market position. The ROA values reinforce this observation, especially the steep rise in 2024, indicating a significantly improved ability to generate earnings from assets. The minor differences between reported and adjusted figures imply that underlying operational performance remains robust and adjustments do not materially affect financial outcomes.