Name: Monolithic Power Systems Inc. (NASDAQ:MPWR) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Monolithic Power Systems Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	1,786,700)	427,374)	437,672)	242,023)	164,375)
Depreciation and amortization	36,430)	40,168)	37,114)	28,699)	19,186)
Amortization of premium (discount) on available-for-sale securities	(20,145)	(5,277)	4,375)	4,674)	2,979)
(Gain) loss on deferred compensation plan investments	(9,400)	(8,505)	6,600)	(4,563)	(4,592)
Deferred taxes, net	(1,302,911)	5,865)	(13,220)	(2,772)	(1,627)
Gain on sale of equity investment	—)	(1,424)	—)	—)	—)
Stock-based compensation expense	205,640)	149,711)	160,992)	123,479)	85,551)
Other	28)	(23)	97)	110)	(1,072)
Accounts receivable	7,325)	2,884)	(77,903)	(37,976)	(14,123)
Inventories	(35,215)	63,583)	(188,073)	(102,323)	(29,503)
Other assets	54,544)	(24,310)	(177,284)	(15,311)	(3,003)
Accounts payable	23,169)	4,797)	(11,240)	32,926)	10,410)
Accrued compensation and related benefits	8,743)	(31,187)	28,514)	16,536)	18,524)
Income tax liabilities	13,226)	(308)	16,559)	11,771)	747)
Other accrued liabilities	20,276)	14,865)	22,471)	22,737)	19,951)
Changes in operating assets and liabilities	92,068)	30,324)	(386,956)	(71,640)	3,003)
Adjustments to reconcile net income to net cash provided by operating activities	(998,290)	210,839)	(190,998)	77,987)	103,428)
Net cash provided by operating activities	788,410)	638,213)	246,674)	320,010)	267,803)
Purchases of property and equipment	(146,118)	(57,578)	(58,843)	(94,420)	(55,610)
Cash paid for an assumed lease	(18,175)	—)	—)	—)	—)
Purchases of investments	(1,082,706)	(582,603)	(65,785)	(394,886)	(338,263)
Maturities and sales of investments	1,508,135)	468,308)	128,610)	113,755)	357,392)
Cash paid for acquisition, net of cash acquired	(33,283)	—)	—)	—)	—)
Contributions to deferred compensation plan, net	(4,806)	(6,853)	(16,492)	(2,542)	(2,696)
Purchases of intangible assets	—)	—)	—)	(793)	—)
Net cash (used in) provided by investing activities	223,047)	(178,726)	(12,510)	(378,886)	(39,177)
Property and equipment purchased on extended payment terms	(4,087)	(2,826)	(2,055)	(2,834)	(5,357)
Proceeds from common stock issued under the employee equity incentive plan	—)	1,118)	5,358)	17,322)	18,767)
Proceeds from common stock issued under the employee stock purchase plan	8,727)	7,568)	5,877)	4,670)	3,819)
Repurchases of common stock	(636,244)	(3,741)	—)	—)	—)
Dividends and dividend equivalents paid	(240,623)	(185,844)	(137,965)	(109,364)	(88,786)
Net cash used in financing activities	(872,227)	(183,725)	(128,785)	(90,206)	(71,557)
Effect of change in exchange rates	(8,470)	(3,310)	(6,039)	3,400)	4,926)
Net increase (decrease) in cash, cash equivalents and restricted cash	130,760)	272,452)	99,340)	(145,682)	161,995)
Cash, cash equivalents and restricted cash, beginning of period	561,181)	288,729)	189,389)	335,071)	173,076)
Cash, cash equivalents and restricted cash, end of period	691,941)	561,181)	288,729)	189,389)	335,071)

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 income exhibited substantial growth over the five-year period, rising from 164,375 thousand US dollars in 2020 to 1,786,700 thousand US dollars in 2024. Despite this rapid growth in profitability, net cash provided by operating activities followed a more moderate upward trajectory, ending at 788,410 thousand US dollars in 2024. A significant divergence between net income and operating cash flow occurred in 2024, primarily driven by a large negative adjustment in deferred taxes totaling 1,302,911 thousand US dollars.

Operating Cash Flow and Working Capital Trends: Operating cash flows remained positive throughout the period, though they experienced a contraction in 2022. This dip was largely attributable to aggressive increases in inventories and other assets, which acted as significant cash drains in 2021 and 2022. Specifically, inventory investments peaked at a negative 188,073 thousand US dollars in 2022 before reversing to a positive cash contribution of 63,583 thousand US dollars in 2023, suggesting a period of inventory optimization following a build-up phase.
Investment and Capital Expenditure Patterns: Capital expenditures for property and equipment showed a general increase, peaking in 2024 at 146,118 thousand US dollars. The company maintained an active investment portfolio, with purchases and maturities fluctuating annually. In 2024, a net inflow was realized from investing activities, as maturities and sales of investments reached 1,508,135 thousand US dollars, offsetting both capital expenditures and a new 33,283 thousand US dollar cash outlay for acquisitions.
Financing and Shareholder Returns: Financing activities were consistently cash-negative, reflecting a commitment to shareholder returns. Dividend payments grew steadily each year, from 88,786 thousand US dollars in 2020 to 240,623 thousand US dollars in 2024. A notable shift in capital allocation occurred in 2024, characterized by a substantial increase in common stock repurchases, which totaled 636,244 thousand US dollars, compared to negligible amounts in previous years.
Liquidity and Cash Position: The company's overall liquidity position strengthened over the analyzed period. Cash, cash equivalents, and restricted cash increased from 173,076 thousand US dollars at the beginning of 2020 to 691,941 thousand US dollars by the end of 2024. This growth was supported by strong operating cash generation and the liquidation of certain investments, providing a cushion for the increased share buybacks and dividend payments observed in the final year.

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