Stock Analysis on Net
Stock Analysis on Net

Monolithic Power Systems Inc. (NASDAQ:MPWR)

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Monolithic Power Systems Inc., income tax expense (benefit), continuing operations

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Federal 61,064 95,176 24,955 2,842 1,682
State 4,257 12 35 (1) 8
Foreign 5,702 5,019 3,801 3,814 3,105
Current 71,023 100,207 28,791 6,655 4,795
Federal (1,705) (8,523) 4,929 (1,221) (213)
State (744) — — — —
Foreign 9,893 (4,419) (3,524) (467) (301)
Deferred 7,444 (12,942) 1,405 (1,688) (514)
Income tax expense 78,467 87,265 30,196 4,967 4,281

Based on: 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), 10-K (reporting date: 2019-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Monolithic Power Systems Inc. current increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Monolithic Power Systems Inc. deferred decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Income tax expense Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Monolithic Power Systems Inc. income tax expense increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Effective Income Tax Rate (EITR)

Monolithic Power Systems Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
U.S. statutory federal tax rate 21.00% 21.00% 21.00% 21.00% 21.00%
Foreign income at lower rates -21.90% -22.80% -23.20% -15.20% -20.70%
GILTI 13.50% 16.00% 11.40% 11.10% 11.00%
Changes in valuation allowance 2.90% 0.20% 0.50% 1.60% 2.10%
Stock-based compensation 2.20% 2.80% 1.60% -11.20% -1.50%
Return to provision true-up adjustment -2.00% 0.00% -1.10% 0.00% 0.00%
Tax credits, net of reserves -1.10% -1.20% -0.50% -3.80% -6.20%
State income taxes 0.00% -0.20% 1.60% -1.60% -0.70%
Other adjustments 0.90% 0.80% -0.20% 1.00% -1.20%
Effective tax rate 15.50% 16.60% 11.10% 2.90% 3.80%

Based on: 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), 10-K (reporting date: 2019-12-31).

Item Description The company
Effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Monolithic Power Systems Inc. effective tax rate increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Components of Deferred Tax Assets and Liabilities

Monolithic Power Systems Inc., components of deferred tax assets and liabilities

US$ in thousands

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Tax credits 37,518 32,037 26,302 23,501 18,080
Stock-based compensation 3,404 2,900 2,027 2,392 6,237
Deferred compensation 11,126 9,844 8,526 7,895 7,110
Net operating losses 12,115 9,000 5,818 1,150 615
Other expenses not currently deductible 7,755 8,891 5,151 4,617 2,323
Deferred tax assets, gross 71,918 62,672 47,824 39,555 34,365
Valuation allowance (35,008) (20,321) (19,520) (18,190) (15,411)
Deferred tax assets, net of valuation allowance 36,910 42,351 28,304 21,365 18,954
Depreciation and amortization (6,420) (5,927) (5,067) (1,600) (1,259)
Undistributed foreign earnings (817) (358) (375) (77) (77)
Other expenses currently deductible (1,619) (814) (945) (1,132) (425)
Deferred tax liabilities (8,856) (7,099) (6,387) (2,809) (1,761)
Net deferred tax assets (liabilities) 28,054 35,252 21,917 18,556 17,193

Based on: 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), 10-K (reporting date: 2019-12-31).

Item Description The company
Deferred tax assets, gross Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Monolithic Power Systems Inc. deferred tax assets, gross increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax assets, net of valuation allowance Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Monolithic Power Systems Inc. deferred tax assets, net of valuation allowance increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Monolithic Power Systems Inc. net deferred tax assets (liabilities) increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Deferred Tax Assets and Liabilities, Classification

Monolithic Power Systems Inc., deferred tax assets and liabilities, classification

US$ in thousands

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Deferred tax assets, net 28,054 35,252 21,917 18,556 17,193

Based on: 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), 10-K (reporting date: 2019-12-31).

Item Description The company
Deferred tax assets, net Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Monolithic Power Systems Inc. deferred tax assets, net increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Adjustments to Financial Statements: Removal of Deferred Taxes

Monolithic Power Systems Inc., adjustments to financial statements

US$ in thousands

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 2,434,353 2,058,885 1,585,825 1,208,491 956,375
Less: Noncurrent deferred tax assets, net 28,054 35,252 21,917 18,556 17,193
Total assets (adjusted) 2,406,299 2,023,633 1,563,908 1,189,935 939,182
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 2,049,939 1,668,602 1,243,985 966,587 773,491
Less: Net deferred tax assets (liabilities) 28,054 35,252 21,917 18,556 17,193
Stockholders’ equity (adjusted) 2,021,885 1,633,350 1,222,068 948,031 756,298
Adjustment to Net Income
Net income (as reported) 427,374 437,672 242,023 164,375 108,839
Add: Deferred income tax expense (benefit) 7,444 (12,942) 1,405 (1,688) (514)
Net income (adjusted) 434,818 424,730 243,428 162,687 108,325

Based on: 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), 10-K (reporting date: 2019-12-31).

Monolithic Power Systems Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Monolithic Power Systems Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net Profit Margin
Reported net profit margin 23.47% 24.39% 20.04% 19.47% 17.33%
Adjusted net profit margin 23.88% 23.67% 20.15% 19.27% 17.25%
Total Asset Turnover
Reported total asset turnover 0.75 0.87 0.76 0.70 0.66
Adjusted total asset turnover 0.76 0.89 0.77 0.71 0.67
Financial Leverage
Reported financial leverage 1.19 1.23 1.27 1.25 1.24
Adjusted financial leverage 1.19 1.24 1.28 1.26 1.24
Return on Equity (ROE)
Reported ROE 20.85% 26.23% 19.46% 17.01% 14.07%
Adjusted ROE 21.51% 26.00% 19.92% 17.16% 14.32%
Return on Assets (ROA)
Reported ROA 17.56% 21.26% 15.26% 13.60% 11.38%
Adjusted ROA 18.07% 20.99% 15.57% 13.67% 11.53%

Based on: 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), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Monolithic Power Systems Inc. adjusted net profit margin ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Monolithic Power Systems Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Monolithic Power Systems Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Monolithic Power Systems Inc. adjusted ROE improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Monolithic Power Systems Inc. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Monolithic Power Systems Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income 427,374 437,672 242,023 164,375 108,839
Revenue 1,821,072 1,794,148 1,207,798 844,452 627,921
Profitability Ratio
Net profit margin1 23.47% 24.39% 20.04% 19.47% 17.33%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income 434,818 424,730 243,428 162,687 108,325
Revenue 1,821,072 1,794,148 1,207,798 844,452 627,921
Profitability Ratio
Adjusted net profit margin2 23.88% 23.67% 20.15% 19.27% 17.25%

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Net profit margin = 100 × Net income ÷ Revenue
= 100 × 427,374 ÷ 1,821,072 = 23.47%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × 434,818 ÷ 1,821,072 = 23.88%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Monolithic Power Systems Inc. adjusted net profit margin ratio improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Revenue 1,821,072 1,794,148 1,207,798 844,452 627,921
Total assets 2,434,353 2,058,885 1,585,825 1,208,491 956,375
Activity Ratio
Total asset turnover1 0.75 0.87 0.76 0.70 0.66
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Revenue 1,821,072 1,794,148 1,207,798 844,452 627,921
Adjusted total assets 2,406,299 2,023,633 1,563,908 1,189,935 939,182
Activity Ratio
Adjusted total asset turnover2 0.76 0.89 0.77 0.71 0.67

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Revenue ÷ Total assets
= 1,821,072 ÷ 2,434,353 = 0.75

2 Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 1,821,072 ÷ 2,406,299 = 0.76

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Monolithic Power Systems Inc. adjusted total asset turnover ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Total assets 2,434,353 2,058,885 1,585,825 1,208,491 956,375
Stockholders’ equity 2,049,939 1,668,602 1,243,985 966,587 773,491
Solvency Ratio
Financial leverage1 1.19 1.23 1.27 1.25 1.24
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets 2,406,299 2,023,633 1,563,908 1,189,935 939,182
Adjusted stockholders’ equity 2,021,885 1,633,350 1,222,068 948,031 756,298
Solvency Ratio
Adjusted financial leverage2 1.19 1.24 1.28 1.26 1.24

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 2,434,353 ÷ 2,049,939 = 1.19

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 2,406,299 ÷ 2,021,885 = 1.19

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Monolithic Power Systems Inc. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income 427,374 437,672 242,023 164,375 108,839
Stockholders’ equity 2,049,939 1,668,602 1,243,985 966,587 773,491
Profitability Ratio
ROE1 20.85% 26.23% 19.46% 17.01% 14.07%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income 434,818 424,730 243,428 162,687 108,325
Adjusted stockholders’ equity 2,021,885 1,633,350 1,222,068 948,031 756,298
Profitability Ratio
Adjusted ROE2 21.51% 26.00% 19.92% 17.16% 14.32%

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 427,374 ÷ 2,049,939 = 20.85%

2 Adjusted ROE = 100 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × 434,818 ÷ 2,021,885 = 21.51%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Monolithic Power Systems Inc. adjusted ROE improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income 427,374 437,672 242,023 164,375 108,839
Total assets 2,434,353 2,058,885 1,585,825 1,208,491 956,375
Profitability Ratio
ROA1 17.56% 21.26% 15.26% 13.60% 11.38%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income 434,818 424,730 243,428 162,687 108,325
Adjusted total assets 2,406,299 2,023,633 1,563,908 1,189,935 939,182
Profitability Ratio
Adjusted ROA2 18.07% 20.99% 15.57% 13.67% 11.53%

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 427,374 ÷ 2,434,353 = 17.56%

2 Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 434,818 ÷ 2,406,299 = 18.07%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Monolithic Power Systems Inc. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.