Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Return on Sales
Return on Investment
Monolithic Power Systems Inc., 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).
The profitability profile from 2020 to 2024 exhibits a general upward trajectory in efficiency and returns, characterized by a peak in operational margins in 2022 and a significant surge in bottom-line metrics in 2024.
- Margin Analysis
- Gross profit margins remained relatively stable throughout the period, fluctuating between 55.18% and 58.44%. A peak was reached in 2022, followed by a gradual normalization to 55.32% by 2024. Operating profit margins showed more volatility, increasing steadily from 18.81% in 2020 to a high of 29.36% in 2022, before experiencing a consistent decline over the subsequent two years to end at 24.44%.
- Net Profitability
- The net profit margin remained closely aligned with operating trends until 2024. While it grew moderately from 19.47% in 2020 to 23.47% in 2023, a substantial increase to 80.95% is observed in 2024. This sharp divergence from the operating profit margin suggests the impact of significant non-operating income or a one-time financial gain during the final year of the period.
- Return Metrics
- Return on Equity (ROE) and Return on Assets (ROA) followed a parallel pattern to the net profit margin. ROE climbed from 17.01% in 2020 to 26.23% in 2022, dipped to 20.85% in 2023, and then accelerated sharply to 56.80% in 2024. Similarly, ROA rose from 13.60% in 2020 to 21.26% in 2022, before spiking to 49.40% in 2024. The simultaneous surge in both ratios indicates a dramatic increase in the efficiency of generating profit from both the asset base and shareholder equity in the final year.
Overall, the data indicates that while core operational profitability peaked in 2022 and has since moderated, the net financial performance in 2024 experienced an anomalous and significant expansion.
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Gross Profit Margin
Monolithic Power Systems Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Gross profit | 1,220,870) | 1,021,119) | 1,048,552) | 685,459) | 465,954) | |
| Revenue | 2,207,100) | 1,821,072) | 1,794,148) | 1,207,798) | 844,452) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 55.32% | 56.07% | 58.44% | 56.75% | 55.18% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 49.35% | 46.12% | 44.93% | 48.25% | — | |
| Analog Devices Inc. | 57.08% | 64.01% | 62.70% | 61.83% | 65.87% | |
| Applied Materials Inc. | 47.46% | 46.70% | 46.51% | 47.32% | 44.72% | |
| Broadcom Inc. | 63.03% | 68.93% | 66.55% | 61.36% | 56.58% | |
| Intel Corp. | 32.66% | 40.04% | 42.61% | 55.45% | — | |
| KLA Corp. | 59.97% | 59.81% | 61.00% | 59.93% | — | |
| Lam Research Corp. | 47.32% | 44.62% | 45.69% | 46.53% | — | |
| Marvell Technology Inc. | 41.64% | 50.47% | 46.26% | 50.13% | — | |
| Micron Technology Inc. | 22.35% | -9.11% | 45.18% | 37.62% | — | |
| NVIDIA Corp. | 72.72% | 56.93% | 64.93% | 62.34% | — | |
| Qualcomm Inc. | 56.21% | 55.70% | 57.84% | 57.51% | 60.67% | |
| Texas Instruments Inc. | 58.14% | 62.90% | 68.76% | 67.47% | — | |
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).
1 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × 1,220,870 ÷ 2,207,100 = 55.32%
2 Click competitor name to see calculations.
Financial performance between 2020 and 2024 is characterized by significant top-line growth and a period of margin expansion followed by a moderate contraction. Revenue increased from 844,452 thousand US dollars in 2020 to 2,207,100 thousand US dollars in 2024, representing a substantial upward trajectory over the five-year period.
- Revenue and Gross Profit Growth
- A consistent increase in both revenue and gross profit is observed from 2020 through 2022. Gross profit rose from 465,954 thousand US dollars in 2020 to a peak of 1,048,552 thousand US dollars in 2022. While a slight decline in gross profit occurred in 2023, the trend resumed its upward movement in 2024, reaching 1,220,870 thousand US dollars.
- Gross Profit Margin Fluctuations
- The gross profit margin exhibited a peak-and-trough pattern. Margin efficiency improved steadily from 55.18% in 2020 to a maximum of 58.44% in 2022. However, this trend reversed in the subsequent two years, with the margin declining to 56.07% in 2023 and further to 55.32% in 2024.
The correlation between revenue growth and profitability indicates that while the scale of operations has expanded significantly, the efficiency of converting revenue into gross profit peaked in 2022. The subsequent decline in the margin percentage, despite the continued increase in absolute revenue and gross profit in 2024, suggests an increase in the cost of goods sold relative to sales growth in the latter part of the analyzed period.
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Operating Profit Margin
Monolithic Power Systems Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Operating income | 539,358) | 481,736) | 526,785) | 262,417) | 158,882) | |
| Revenue | 2,207,100) | 1,821,072) | 1,794,148) | 1,207,798) | 844,452) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 24.44% | 26.45% | 29.36% | 21.73% | 18.81% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 7.37% | 1.77% | 5.36% | 22.20% | — | |
| Analog Devices Inc. | 21.56% | 31.07% | 27.29% | 23.12% | 26.74% | |
| Applied Materials Inc. | 28.95% | 28.86% | 30.20% | 29.87% | 25.37% | |
| Broadcom Inc. | 26.10% | 45.25% | 42.84% | 31.03% | 16.80% | |
| Intel Corp. | -21.99% | 0.17% | 3.70% | 24.62% | — | |
| KLA Corp. | 34.10% | 38.06% | 39.67% | 35.97% | — | |
| Lam Research Corp. | 28.61% | 29.69% | 31.24% | 30.64% | — | |
| Marvell Technology Inc. | -10.31% | 4.02% | -7.79% | -8.70% | — | |
| Micron Technology Inc. | 5.19% | -36.97% | 31.54% | 22.68% | — | |
| NVIDIA Corp. | 54.12% | 15.66% | 37.31% | 27.18% | — | |
| Qualcomm Inc. | 25.85% | 21.74% | 35.88% | 29.16% | 26.58% | |
| Texas Instruments Inc. | 34.94% | 41.85% | 50.63% | 48.84% | — | |
| Operating Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 20.84% | 18.20% | 26.84% | 27.90% | — | |
| Operating Profit Margin, Industry | ||||||
| Information Technology | 26.46% | 24.34% | 26.23% | 26.58% | — | |
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).
1 2024 Calculation
Operating profit margin = 100 × Operating income ÷ Revenue
= 100 × 539,358 ÷ 2,207,100 = 24.44%
2 Click competitor name to see calculations.
The financial performance between 2020 and 2024 is characterized by a strong initial phase of operational efficiency gains and revenue expansion, followed by a recent trend of margin contraction despite sustained growth in total sales.
- Revenue and Operating Income Trends
- Revenue exhibited consistent year-over-year growth, increasing from US$ 844.45 million in 2020 to US$ 2.21 billion by 2024. Operating income followed a similar upward trajectory initially, rising sharply from US$ 158.88 million in 2020 to a peak of US$ 526.79 million in 2022. While operating income experienced a temporary decline in 2023 to US$ 481.74 million, it recovered to its highest level of US$ 539.36 million in 2024.
- Operating Profit Margin Analysis
- The operating profit margin demonstrated a period of significant expansion from 2020 to 2022, climbing from 18.81% to 29.36%. This suggests that the company successfully scaled its operations while maintaining high control over its cost structure during this interval. However, a downward trend emerged after 2022, with the margin contracting to 26.45% in 2023 and further to 24.44% in 2024.
- Efficiency and Scalability Insights
- The divergence between revenue growth and margin performance in the latter period is notable. Although revenue grew from US$ 1.82 billion in 2023 to US$ 2.21 billion in 2024, the operating profit margin declined. This indicates that operating expenses grew at a faster pace than revenue during this period, leading to a reduction in operational efficiency relative to the peak observed in 2022.
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Net Profit Margin
Monolithic Power Systems Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 1,786,700) | 427,374) | 437,672) | 242,023) | 164,375) | |
| Revenue | 2,207,100) | 1,821,072) | 1,794,148) | 1,207,798) | 844,452) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 80.95% | 23.47% | 24.39% | 20.04% | 19.47% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 6.36% | 3.77% | 5.59% | 19.24% | — | |
| Analog Devices Inc. | 17.35% | 26.94% | 22.88% | 19.00% | 21.79% | |
| Applied Materials Inc. | 26.41% | 25.86% | 25.31% | 25.53% | 21.04% | |
| Broadcom Inc. | 11.43% | 39.31% | 34.62% | 24.54% | 12.39% | |
| Intel Corp. | -35.32% | 3.11% | 12.71% | 25.14% | — | |
| KLA Corp. | 28.15% | 32.27% | 36.06% | 30.04% | — | |
| Lam Research Corp. | 25.68% | 25.88% | 26.73% | 26.72% | — | |
| Marvell Technology Inc. | -16.95% | -2.76% | -9.44% | -9.34% | — | |
| Micron Technology Inc. | 3.10% | -37.54% | 28.24% | 21.16% | — | |
| NVIDIA Corp. | 48.85% | 16.19% | 36.23% | 25.98% | — | |
| Qualcomm Inc. | 26.03% | 20.19% | 29.27% | 26.94% | 22.09% | |
| Texas Instruments Inc. | 30.68% | 37.16% | 43.68% | 42.35% | — | |
| Net Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 14.42% | 16.64% | 25.04% | 25.45% | — | |
| Net Profit Margin, Industry | ||||||
| Information Technology | 20.48% | 20.24% | 22.27% | 23.48% | — | |
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).
1 2024 Calculation
Net profit margin = 100 × Net income ÷ Revenue
= 100 × 1,786,700 ÷ 2,207,100 = 80.95%
2 Click competitor name to see calculations.
The financial trajectory from 2020 to 2024 is characterized by steady expansion in scale and a culminating, extraordinary surge in profitability during the final fiscal year.
- Revenue and Net Income Trends
- Revenue demonstrated consistent year-over-year growth, rising from 844.45 million US dollars in 2020 to 2.21 billion US dollars in 2024. Net income exhibited a similar upward trend from 2020 through 2022, increasing from 164.38 million US dollars to 437.67 million US dollars. A slight stagnation occurred in 2023, with net income dipping marginally to 427.37 million US dollars, followed by a substantial escalation to 1.79 billion US dollars in 2024.
- Net Profit Margin Analysis
- Between 2020 and 2023, the net profit margin remained relatively stable, oscillating within a range of 19.47% to 24.39%. The peak during this period was reached in 2022 at 24.39%, followed by a minor contraction to 23.47% in 2023, reflecting a period of normalized operational profitability.
- Observation of 2024 Profitability Anomaly
- A sharp divergence is observed in 2024, where the net profit margin expanded to 80.95%. This spike is disproportionate to the growth in revenue, which increased by approximately 21% between 2023 and 2024, while net income grew by approximately 318% in the same timeframe. This disparity indicates that the 2024 results were likely influenced by non-operating gains, a significant one-time financial event, or substantial tax benefits rather than exclusively through operational efficiency or sales growth.
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Return on Equity (ROE)
Monolithic Power Systems Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 1,786,700) | 427,374) | 437,672) | 242,023) | 164,375) | |
| Stockholders’ equity | 3,145,767) | 2,049,939) | 1,668,602) | 1,243,985) | 966,587) | |
| Profitability Ratio | ||||||
| ROE1 | 56.80% | 20.85% | 26.23% | 19.46% | 17.01% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 2.85% | 1.53% | 2.41% | 42.18% | — | |
| Analog Devices Inc. | 4.65% | 9.32% | 7.54% | 3.66% | 10.17% | |
| Applied Materials Inc. | 37.77% | 41.94% | 53.51% | 48.08% | 34.21% | |
| Broadcom Inc. | 8.71% | 58.70% | 50.62% | 26.99% | 12.40% | |
| Intel Corp. | -18.89% | 1.60% | 7.90% | 20.83% | — | |
| KLA Corp. | 82.00% | 116.01% | 237.04% | 61.53% | — | |
| Lam Research Corp. | 44.82% | 54.94% | 73.35% | 64.85% | — | |
| Marvell Technology Inc. | -6.29% | -1.05% | -2.68% | -3.29% | — | |
| Micron Technology Inc. | 1.72% | -13.22% | 17.41% | 13.34% | — | |
| NVIDIA Corp. | 69.24% | 19.76% | 36.65% | 25.64% | — | |
| Qualcomm Inc. | 38.60% | 33.51% | 71.81% | 90.88% | 85.54% | |
| Texas Instruments Inc. | 28.39% | 38.53% | 60.02% | 58.27% | — | |
| ROE, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 11.16% | 12.69% | 21.59% | 24.91% | — | |
| ROE, Industry | ||||||
| Information Technology | 28.82% | 31.26% | 38.03% | 41.64% | — | |
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).
1 2024 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 1,786,700 ÷ 3,145,767 = 56.80%
2 Click competitor name to see calculations.
Financial performance from 2020 through 2024 is characterized by substantial growth in both net earnings and the equity base, culminating in a sharp increase in capital efficiency by the end of the period. While growth was steady through 2022, a brief stabilization occurred in 2023 before a significant surge in profitability in 2024.
- Net Income Trends
- Net income experienced consistent growth from 164,375 thousand US$ in 2020 to 437,672 thousand US$ in 2022. A slight contraction occurred in 2023, with income dipping to 427,374 thousand US$, followed by an exceptional increase in 2024 to 1,786,700 thousand US$, representing a more than fourfold increase over the previous year.
- Stockholders' Equity Expansion
- The equity base demonstrated an uninterrupted upward trajectory throughout the five-year period. Stockholders' equity grew from 966,587 thousand US$ in 2020 to 3,145,767 thousand US$ in 2024, indicating consistent retention of earnings and a strengthening of the company's financial position.
- Return on Equity (ROE) Dynamics
- ROE increased from 17.01% in 2020 to a peak of 26.23% in 2022. A decline to 20.85% was observed in 2023, correlating with the plateau in net income relative to the continuing growth of the equity base. However, 2024 saw a dramatic spike to 56.80%, reflecting a highly accelerated capacity to generate profit from shareholders' investments.
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Return on Assets (ROA)
Monolithic Power Systems Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 1,786,700) | 427,374) | 437,672) | 242,023) | 164,375) | |
| Total assets | 3,617,097) | 2,434,353) | 2,058,885) | 1,585,825) | 1,208,491) | |
| Profitability Ratio | ||||||
| ROA1 | 49.40% | 17.56% | 21.26% | 15.26% | 13.60% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 2.37% | 1.26% | 1.95% | 25.46% | — | |
| Analog Devices Inc. | 3.39% | 6.79% | 5.46% | 2.66% | 5.69% | |
| Applied Materials Inc. | 20.86% | 22.31% | 24.41% | 22.80% | 16.19% | |
| Broadcom Inc. | 3.56% | 19.33% | 15.69% | 8.91% | 3.90% | |
| Intel Corp. | -9.55% | 0.88% | 4.40% | 11.80% | — | |
| KLA Corp. | 17.90% | 24.07% | 26.37% | 20.23% | — | |
| Lam Research Corp. | 20.42% | 24.02% | 26.78% | 24.59% | — | |
| Marvell Technology Inc. | -4.40% | -0.73% | -1.90% | -2.58% | — | |
| Micron Technology Inc. | 1.12% | -9.08% | 13.11% | 9.96% | — | |
| NVIDIA Corp. | 45.28% | 10.61% | 22.07% | 15.05% | — | |
| Qualcomm Inc. | 18.39% | 14.17% | 26.39% | 21.93% | 14.60% | |
| Texas Instruments Inc. | 13.51% | 20.12% | 32.16% | 31.48% | — | |
| ROA, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 6.13% | 7.13% | 12.17% | 13.29% | — | |
| ROA, Industry | ||||||
| Information Technology | 11.80% | 12.34% | 14.33% | 14.52% | — | |
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).
1 2024 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 1,786,700 ÷ 3,617,097 = 49.40%
2 Click competitor name to see calculations.
The financial trajectory from 2020 to 2024 is characterized by substantial growth in both bottom-line profitability and the total asset base. A consistent expansion of resources has been coupled with an accelerating ability to generate profit from those assets, culminating in a significant surge in capital efficiency by the end of the analyzed period.
- Net Income Performance
- Net income experienced an aggressive upward trend, rising from 164,375 thousand US$ in 2020 to 1,786,700 thousand US$ in 2024. While a marginal contraction was noted between 2022 and 2023, where income dipped from 437,672 thousand US$ to 427,374 thousand US$, this was followed by an exponential increase in 2024, representing a growth of approximately 318% in a single year.
- Asset Base Expansion
- Total assets grew steadily and consistently throughout the period, increasing from 1,208,491 thousand US$ in 2020 to 3,617,097 thousand US$ in 2024. This sustained growth indicates a continuous enlargement of the company's operational footprint and resource investment.
- Return on Assets (ROA) Analysis
- The ROA progressed from 13.60% in 2020 to 49.40% in 2024. The ratio showed a steady climb through 2022, peaking at 21.26%, before a temporary decline to 17.56% in 2023. The subsequent jump to 49.40% in 2024 reveals a decoupling of profit growth from asset growth, signifying a period of extraordinary operational efficiency and a heightened capacity to generate earnings relative to the invested asset base.
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