- Revenue was
$457 .9 million for the quarter endedMarch 31, 2024 , a 0.9% increase from $454.0 million for the quarter ended December 31, 2023 and a 1.5% increase from$451 .1 million for the quarter endedMarch 31, 2023 .
- GAAP gross margin was 55.1% for the quarter ended
March 31, 2024 , compared with 57.4% for the quarter endedMarch 31, 2023 .
- Non-GAAP gross margin (1) was 55.7% for the quarter ended
March 31, 2024 , excluding the impact of$1 .9 million for stock-based compensation and related expenses, $0.4 million for deferred compensation plan expense and $0.3 million for amortization of acquisition-related intangible assets, compared with 57.7% for the quarter endedMarch 31, 2023 , excluding the impact of$1 .1 million for stock-based compensation expense and$0 .2 million for deferred compensation plan expense.
- GAAP operating expenses were
$157 .0 million for the quarter endedMarch 31, 2024 , compared with$134 .5 million for the quarter endedMarch 31, 2023 .
- Non-GAAP operating expenses (1) were
$103 .4 million for the quarter endedMarch 31, 2024 , excluding$49 .9 million for stock-based compensation and related expenses and$3 .6 million for deferred compensation plan expense, compared with$96 .0 million for the quarter endedMarch 31, 2023 , excluding$35 .9 million for stock-based compensation expense and$2 .6 million for deferred compensation plan expense.
- GAAP operating income was
$95 .5 million for the quarter endedMarch 31, 2024 , compared with$124 .3 million for the quarter endedMarch 31, 2023 .
- Non-GAAP operating income (1) was
$151 .6 million for the quarter endedMarch 31, 2024 , excluding$51 .8 million for stock-based compensation and related expenses,$4 .1 million for deferred compensation plan expense and $0.3 million for amortization of acquisition-related intangible assets, compared with$164 .1 million for the quarter endedMarch 31, 2023 , excluding$37 .0 million for stock-based compensation expense and$2 .8 million for deferred compensation plan expense.
- GAAP other income, net, was
$9 .5 million for the quarter endedMarch 31, 2024 , compared with $5.3 million for the quarter endedMarch 31, 2023 .
- Non-GAAP other income, net (1) was
$5 .5 million for the quarter endedMarch 31, 2024 , excluding$4 .0 million for deferred compensation plan income, compared with$2 .8 million for the quarter endedMarch 31, 2023 , excluding$2 .5 million for deferred compensation plan income.
- GAAP income before income taxes was
$105 .0 million for the quarter endedMarch 31, 2024 , compared with$129 .6 million for the quarter endedMarch 31, 2023 .
- Non-GAAP income before income taxes (1) was
$157 .1 million for the quarter endedMarch 31, 2024 , excluding$51 .8 million for stock-based compensation and related expenses and $0.3 million for amortization of acquisition-related intangible assets, compared with$166 .9 million for the quarter endedMarch 31, 2023 , excluding$37 .0 million for stock-based compensation expense and$0 .3 million for net deferred compensation plan expense.
- GAAP net income was
$92 .5 million and$1 .89 per diluted share for the quarter endedMarch 31, 2024 . Comparatively, GAAP net income was$109 .8 million and$2 .26 per diluted share for the quarter endedMarch 31, 2023 .
- Non-GAAP net income (1) was
$137 .5 million and$2 .81 per diluted share for the quarter endedMarch 31, 2024 , excluding$51 .8 million for stock-based compensation and related expenses, $0.3 million for amortization of acquisition-related intangible assets and $7.2 million for related tax effects, compared with $146.0 million and$3 .00 per diluted share for the quarter endedMarch 31, 2023 , excluding$37 .0 million for stock-based compensation expense,$0 .3 million for net deferred compensation plan expense and$1 .1 million for related tax effects.
The following is a summary of revenue by end market (in thousands):
Three Months Ended | ||||||||
End Market | 2024 | 2023 | ||||||
Enterprise Data | $ | 149,727 | $ | 47,163 | ||||
Storage and Computing | 106,121 | 119,822 | ||||||
Automotive | 87,092 | 105,342 | ||||||
Communications | 46,645 | 67,906 | ||||||
Consumer | 38,074 | 63,363 | ||||||
Industrial | 30,226 | 47,469 | ||||||
Total | $ | 457,885 | $ | 451,065 | ||||
The following is a summary of revenue by product family (in thousands):
Three Months Ended | ||||||||
Product Family | 2024 | 2023 | ||||||
DC to DC | $ | 415,975 | $ | 425,181 | ||||
Lighting Control | 41,910 | 25,884 | ||||||
Total | $ | 457,885 | $ | 451,065 | ||||
“We saw consistent improvement through the first quarter, but we continue to be cautious about second half 2024 business conditions. Overall, our proven, long-term growth strategy remains intact, and we can swiftly adapt to market changes as they occur,” said
Business Outlook
The following are MPS’s financial targets for the second quarter ending
- Revenue in the range of
$480 .0 million to$500 .0 million.
- GAAP gross margin between 55.1% and 55.7%. Non-GAAP gross margin (1) between 55.4% and 56.0%, which excludes the impact from stock-based compensation and related expenses as well as the impact from amortization of acquisition-related intangible assets.
- GAAP operating expenses between
$147.9 million and$151.9 million . Non-GAAP operating expenses (1) between$106.1 million and$108 .1 million, which excludes estimated stock-based compensation and related expenses in the range of$41.8 million to$43.8 million .
- Total stock-based compensation and related expenses of
$43 .2 million to$45.2 million .
- Other income of
$5 .3 million to$5 .7 million before foreign exchange gains or losses.
- Non-GAAP tax rate of 12.5% for 2024.
- Fully diluted shares outstanding between 48.8 million and 49.2 million.
(1) Non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other income, net, non-GAAP operating income and non-GAAP income before income taxes differ from net income, net income per share, gross margin, operating expenses, other income, net, operating income and income before income taxes determined in accordance with
Earnings Commentary
Earnings commentary on the results of operations for the quarter ended March 31, 2024 is available under the Investor Relations page on the MPS website.
Earnings Webinar
MPS plans to host a question-and-answer conference call covering its financial results at 2:00 p.m. PT / 5:00 p.m. ET, May 1, 2024. You can access the conference call at: https://mpsic.zoom.us/j/95055935379. The conference call will be archived and available for replay for one year under the Investor Relations page on the MPS website.
Safe Harbor Statement
This press release contains, and statements that will be made during the accompanying webinar will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including under the sections “Business Outlook” and the quote from our CEO herein, including, among other things, (i) projected revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, stock-based compensation and related expenses, amortization of acquisition-related intangible assets, other income before foreign exchange gains or losses, and fully diluted shares outstanding, (ii) our outlook for the second quarter of fiscal year 2024 and the near-term, medium-term and long-term prospects of MPS, including our ability to adapt to changing market conditions, performance against our business plan, our ability to grow despite the softening in our business, our industry and the global economic environment, revenue growth in certain of our market segments, potential new business segments, our continued investment in research and development (“R&D”), expected revenue growth, customers’ acceptance of our new product offerings, the prospects of our new product development, our expectations regarding market and industry segment trends and prospects, and our projected expansion of capacity and the impact it may have on our business, (iii) our ability to penetrate new markets and expand our market share, (iv) the seasonality of our business, (v) our ability to reduce our expenses, and (vi) statements regarding the assumptions underlying or relating to any statement described in (i), (ii), (iii), (iv), or (v). These forward-looking statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve significant known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this press release and listeners to the accompanying conference call are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ include, but are not limited to, continued downturn in the global economy, including due to the
About
Contact:
Executive Vice President and Chief Financial Officer
408-826-0777
MPSInvestor.Relations@monolithicpower.com
Condensed Consolidated Balance Sheets (Unaudited, in thousands, except par value) | |||||||
2024 | 2023 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 488,273 | $ | 527,843 | |||
Short-term investments | 798,116 | 580,633 | |||||
Accounts receivable, net | 194,428 | 179,858 | |||||
Inventories | 395,990 | 383,702 | |||||
Other current assets | 99,685 | 147,463 | |||||
Total current assets | 1,976,492 | 1,819,499 | |||||
Property and equipment, net | 375,573 | 368,952 | |||||
Acquisition-related intangible assets, net | 9,518 | - | |||||
27,311 | 6,571 | ||||||
Deferred tax assets, net | 32,784 | 28,054 | |||||
Other long-term assets | 157,023 | 211,277 | |||||
Total assets | $ | 2,578,701 | $ | 2,434,353 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 103,471 | $ | 62,958 | |||
Accrued compensation and related benefits | 70,541 | 56,286 | |||||
Other accrued liabilities | 137,868 | 115,791 | |||||
Total current liabilities | 311,880 | 235,035 | |||||
Income tax liabilities | 66,337 | 60,724 | |||||
Other long-term liabilities | 86,927 | 88,655 | |||||
Total liabilities | 465,144 | 384,414 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock and additional paid-in capital: | 1,176,382 | 1,129,937 | |||||
Retained earnings | 977,724 | 947,064 | |||||
Accumulated other comprehensive loss | (40,549 | ) | (27,062 | ) | |||
Total stockholders’ equity | 2,113,557 | 2,049,939 | |||||
Total liabilities and stockholders’ equity | $ | 2,578,701 | $ | 2,434,353 | |||
Condensed Consolidated Statements of Operations (Unaudited, in thousands, except per share amounts) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Revenue | $ | 457,885 | $ | 451,065 | |||
Cost of revenue | 205,444 | 192,285 | |||||
Gross profit | 252,441 | 258,780 | |||||
Operating expenses: | |||||||
Research and development | 75,990 | 63,709 | |||||
Selling, general and administrative | 80,964 | 70,795 | |||||
Total operating expenses | 156,954 | 134,504 | |||||
Operating income | 95,487 | 124,276 | |||||
Other income, net | 9,540 | 5,297 | |||||
Income before income taxes | 105,027 | 129,573 | |||||
Income tax expense | 12,486 | 19,771 | |||||
Net income | $ | 92,541 | $ | 109,802 | |||
Net income per share: | |||||||
Basic | $ | 1.90 | $ | 2.32 | |||
Diluted | $ | 1.89 | $ | 2.26 | |||
Weighted-average shares outstanding: | |||||||
Basic | 48,635 | 47,234 | |||||
Diluted | 48,928 | 48,655 | |||||
SUPPLEMENTAL FINANCIAL INFORMATION STOCK-BASED COMPENSATION EXPENSE (Unaudited, in thousands) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Cost of revenue | $ | 1,398 | $ | 1,147 | |||
Research and development | 10,447 | 8,614 | |||||
Selling, general and administrative | 34,081 | 27,248 | |||||
Total stock-based compensation expense | $ | 45,926 | $ | 37,009 | |||
RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME (Unaudited, in thousands, except per share amounts) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Net income | $ | 92,541 | $ | 109,802 | |||
Adjustments to reconcile net income to non-GAAP net income: | |||||||
Stock-based compensation and related expenses* | 51,769 | 37,009 | |||||
Amortization of acquisition-related intangible assets | 291 | 33 | |||||
Deferred compensation plan expense, net | 47 | 251 | |||||
Tax effect | (7,156 | ) | (1,087 | ) | |||
Non-GAAP net income | $ | 137,492 | $ | 146,008 | |||
Non-GAAP net income per share: | |||||||
Basic | $ | 2.83 | $ | 3.09 | |||
Diluted | $ | 2.81 | $ | 3.00 | |||
Shares used in the calculation of non-GAAP net income per share: | |||||||
Basic | 48,635 | 47,234 | |||||
Diluted | 48,928 | 48,655 | |||||
*Prior period excludes stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN (Unaudited, in thousands) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Gross profit | $ | 252,441 | $ | 258,780 | |||
Gross margin | 55.1 | % | 57.4 | % | |||
Adjustments to reconcile gross profit to non-GAAP gross profit: | |||||||
Stock-based compensation and related expenses* | 1,900 | 1,147 | |||||
Amortization of acquisition-related intangible assets | 258 | - | |||||
Deferred compensation plan expense | 440 | 181 | |||||
Non-GAAP gross profit | $ | 255,039 | $ | 260,108 | |||
Non-GAAP gross margin | 55.7 | % | 57.7 | % | |||
*Prior period excludes stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES (Unaudited, in thousands) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Total operating expenses | $ | 156,954 | $ | 134,504 | |||
Adjustments to reconcile total operating expenses to non-GAAP total operating expenses: | |||||||
Stock-based compensation and related expenses* | (49,869 | ) | (35,862 | ) | |||
Amortization of acquisition-related intangible assets | (33 | ) | (33 | ) | |||
Deferred compensation plan expense | (3,626 | ) | (2,604 | ) | |||
Non-GAAP operating expenses | $ | 103,426 | $ | 96,005 | |||
*Prior period excludes stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.
RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME (Unaudited, in thousands) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Total operating income | $ | 95,487 | $ | 124,276 | |||
Adjustments to reconcile total operating income to non-GAAP total operating income: | |||||||
Stock-based compensation and related expenses* | 51,769 | 37,009 | |||||
Amortization of acquisition-related intangible assets | 291 | 33 | |||||
Deferred compensation plan expense | 4,066 | 2,785 | |||||
Non-GAAP operating income | $ | 151,613 | $ | 164,103 | |||
*Prior period excludes stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.
RECONCILIATION OF OTHER INCOME, NET, TO NON-GAAP OTHER INCOME, NET (Unaudited, in thousands) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Total other income, net | $ | 9,540 | $ | 5,297 | |||
Adjustments to reconcile other income, net to non-GAAP other income, net: | |||||||
Deferred compensation plan income | (4,019 | ) | (2,534 | ) | |||
Non-GAAP other income, net | $ | 5,521 | $ | 2,763 | |||
RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES (Unaudited, in thousands) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Total income before income taxes | $ | 105,027 | $ | 129,573 | |||
Adjustments to reconcile income before income taxes to non-GAAP income before income taxes: | |||||||
Stock-based compensation and related expenses* | 51,769 | 37,009 | |||||
Amortization of acquisition-related intangible assets | 291 | 33 | |||||
Deferred compensation plan expense, net | 47 | 251 | |||||
Non-GAAP income before income taxes | $ | 157,134 | $ | 166,866 | |||
*Prior period excludes stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.
2024 SECOND QUARTER OUTLOOK RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN (Unaudited) | |||||||
Three Months Ending | |||||||
Low | High | ||||||
Gross margin | 55.1 | % | 55.7 | % | |||
Adjustment to reconcile gross margin to non-GAAP gross margin: | |||||||
Stock-based compensation and other expenses | 0.3 | % | 0.3 | % | |||
Non-GAAP gross margin | 55.4 | % | 56.0 | % | |||
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES (Unaudited, in thousands) | |||||||
Three Months Ending | |||||||
Low | High | ||||||
Operating expenses | $ | 147,900 | $ | 151,900 | |||
Adjustments to reconcile operating expenses to non-GAAP operating expenses: | |||||||
Stock-based compensation and related expenses | (41,800 | ) | (43,800 | ) | |||
Non-GAAP operating expenses | $ | 106,100 | $ | 108,100 | |||
Q1’24 Earnings Commentary
MPS will report its results after the market closes on |
Q1 2024 Financial Summary | (Unaudited) | |||||
GAAP | ||||||
Q1'24 | Q4'23 | Q1'23 | QoQ Change | YoY Change | ||
Revenue ($k) | Up 0.9% | Up 1.5% | ||||
Gross Margin | 55.1% | 55.3% | 57.4% | Down 0.2 pts | Down 2.3 pts | |
Opex ($k) | Up 10.9% | Up 16.7% | ||||
Operating Margin | 20.9% | 24.1% | 27.6% | Down 3.2 pts | Down 6.7 pts | |
Net income ($k) | Down 4.5% | Down 15.7% | ||||
Diluted EPS | Down 4.5% | Down 16.4% | ||||
Non-GAAP | ||||||
Q1'24 | Q4'23 | Q1'23 | QoQ Change | YoY Change | ||
Revenue ($k) | Up 0.9% | Up 1.5% | ||||
Gross Margin | 55.7% | 55.7% | 57.7% | Flat | Down 2.0 pts | |
Opex ($k) | Up 6.9% | Up 7.7% | ||||
Operating Margin | 33.1% | 34.4% | 36.4% | Down 1.3 pts | Down 3.3 pts | |
Net income ($k) | Down 2.4% | Down 5.8% | ||||
Diluted EPS | Down 2.4% | Down 6.3% | ||||
Revenue by End Market | ||||||||||
Revenue | YoY Change | % of Total Rev | ||||||||
End Market ($M) | Q1’24 | Q1’23 | $ | % | Q1’24 | Q1’23 | ||||
Storage & Computing | (13.7) | (11.4%) | 23.2% | 26.6% | ||||||
Enterprise Data | 149.7 | 47.2 | 102.5 | 217.2% | 32.7% | 10.5% | ||||
Automotive | 87.1 | 105.3 | (18.2) | (17.3%) | 19.0% | 23.3% | ||||
Industrial | 30.2 | 47.5 | (17.3) | (36.4%) | 6.6% | 10.5% | ||||
Communications | 46.7 | 67.9 | (21.2) | (31.2%) | 10.2% | 15.1% | ||||
Consumer | 38.1 | 63.4 | (25.3) | (39.9%) | 8.3% | 14.1% | ||||
Total | 6.8 | 1.5% | 100% | 100% | ||||||
Ongoing Business Conditions
Our financial performance improved in the first quarter of 2024 with revenue up both sequentially and from the first quarter of 2023. Ordering patterns consistently trended upward through the quarter. Visibility into the second half of 2024, however, is limited and many customers remain cautious.
Despite this uncertainty around the second half of 2024, customer engagement across all our end markets remains very high and our design win pipeline continues to grow stronger. Additionally, we are continuing to expand our product portfolio and diversify our supply chain globally. We believe both actions position our company for further growth as the market improves.
“We saw consistent improvement through the first quarter, but we continue to be cautious about second half 2024 business conditions. Overall, our proven, long-term growth strategy remains intact, and we can swiftly adapt to market changes as they occur,” said
Revenue
MPS reported first quarter revenue of
In our Enterprise Data market, first quarter 2024 revenue of
First quarter 2024 Communications revenue of
First quarter Automotive revenue of
Storage and Computing revenue of
First quarter 2024 Industrial revenue of
First quarter Consumer revenue of
Gross Margin & Operating Income
GAAP gross margin was 55.1%, 20 basis points lower than the fourth quarter of 2023. The quarter-over-quarter decrease was attributed primarily to an unfavorable product mix. Our GAAP operating income was approximately
Non-GAAP gross margin for the first quarter of 2024 was 55.7%, flat to the fourth quarter of 2023. Our non-GAAP operating income was
Operating Expenses
Our GAAP operating expenses were
Our Non-GAAP first quarter 2024 operating expenses were approximately
The differences between non-GAAP operating expenses and GAAP operating expenses for the quarters discussed here are primarily stock compensation and related expense and deferred compensation plan expense.
For the first quarter of 2024, total stock compensation and related expenses, including approximately
The Bottom Line
First quarter 2024 GAAP net income was
First quarter 2024 non-GAAP net income was
There were 48.9 million fully diluted shares outstanding at the end of the first quarter of 2024.
Balance Sheet and Cash Flow
Cash, cash equivalents and investments were
Accounts receivable ended the first quarter of 2024 at
Our internal inventories at the end of the first quarter of 2024 were
We have carefully managed our internal inventories throughout the year, balancing the uncertainty in the market with being prepared to capture market upturns when they occur. Comparing current inventory levels using next quarter’s projected revenue, days of inventory decreased to 165 days at the end of the first quarter from 170 days at the end of the fourth quarter of 2023.
Selected Balance Sheet and Inventory Data (Q1’24 Unaudited) | |||
Q1'24 | Q4'23 | Q1'23 | |
Cash, Cash Equivalents, and Investments | |||
Operating Cash Flow | |||
Accounts Receivable | |||
Days of Sales Outstanding | 39 Days | 36 Days | 37 Days |
Internal Inventories | |||
Days of Inventory (current quarter revenue) | 175 Days | 172 Days | 204 Days |
Days of Inventory (next quarter revenue) | 165 Days | 170 Days | 203 Days |
Q2’24 Business Outlook
For the second quarter of 2024 ending
- Revenue in the range of
$480 million to$500 million .
- GAAP gross margin in the range of 55.1% to 55.7%.
- Non-GAAP gross margin in the range of 55.4% to 56.0% which excludes the impact from stock-based compensation and related expenses as well as the impact from amortization of acquisition-related intangible assets.
- Total stock-based compensation and related expenses in the range of
$43.2 million to$45.2 million including approximately$1.4 million that would be charged to cost of goods sold.
- GAAP operating expenses between
$147.9 million and$151.9 million .
- Non-GAAP operating expenses in the range of
$106.1 million to$108.1 million . This estimate excludes stock-based compensation and related expenses.
- Interest and other income in the range from
$5.3 million to$5.7 million before foreign exchange gains or losses.
- Non-GAAP tax rate of 12.5% for 2024.
- Fully diluted shares outstanding in the range of 48.8 to 49.2 million shares.
For further information, contact:
Executive Vice President and Chief Financial Officer
408-826-0777
MPSInvestor.Relations@monolithicpower.com
Safe Harbor Statement
This earnings commentary contains, and statements that will be made during the accompanying webinar will contain, forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, including under the “Business Outlook” section and the quote from our CEO herein, including, among other things, (i) projected revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, stock-based compensation and related expenses, amortization of acquisition-related intangible assets, other income before foreign exchange gains or losses, and fully diluted shares outstanding, (ii) our outlook for the second quarter of fiscal year 2024 and the near-term, medium-term and long-term prospects of MPS, including our performance against our business plan, our ability to grow despite the softening in our business, our industry and the global economic environment, revenue growth in certain of our market segments, potential new business segments, our continued investment in research and development (“R&D”), expected revenue growth, customers’ acceptance of our new product offerings, the prospects of our new product development, our expectations regarding market and industry segment trends and prospects, and our projected expansion of capacity and the impact it may have on our business, (iii) our ability to penetrate new markets and expand our market share, (iv) the seasonality of our business, (v) our ability to reduce our expenses, and (vi) statements of the assumptions underlying or relating to any statement described in (i), (ii), (iii), (iv), or (v). These forward-looking statements are not historical facts or guarantees of future performance or events, are based on current expectations, estimates, beliefs, assumptions, goals, and objectives, and involve significant known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed by these statements. Readers of this earnings commentary and listeners to the accompanying conference call are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ include, but are not limited to, continued downturn in the global economy, including due to the
Non-GAAP Financial Measures
This CFO Commentary contains references to certain non-GAAP financial measures. Non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other income, net, non-GAAP operating income and non-GAAP income before income taxes differ from net income, net income per share, gross margin, operating expenses, other income, net, operating income and income before income taxes determined in accordance with
RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME (Unaudited, in thousands, except per share amounts) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Net income | $ | 92,541 | $ | 109,802 | |||
Adjustments to reconcile net income to non-GAAP net income: | |||||||
Stock-based compensation and related expenses* | 51,769 | 37,009 | |||||
Amortization of acquisition-related intangible assets | 291 | 33 | |||||
Deferred compensation plan expense, net | 47 | 251 | |||||
Tax effect | (7,156 | ) | (1,087 | ) | |||
Non-GAAP net income | $ | 137,492 | $ | 146,008 | |||
Non-GAAP net income per share: | |||||||
Basic | $ | 2.83 | $ | 3.09 | |||
Diluted | $ | 2.81 | $ | 3.00 | |||
Shares used in the calculation of non-GAAP net income per share: | |||||||
Basic | 48,635 | 47,234 | |||||
Diluted | 48,928 | 48,655 | |||||
*Prior period excludes stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN (Unaudited, in thousands) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Gross profit | $ | 252,441 | $ | 258,780 | |||
Gross margin | 55.1 | % | 57.4 | % | |||
Adjustments to reconcile gross profit to non-GAAP gross profit: | |||||||
Stock-based compensation and related expenses* | 1,900 | 1,147 | |||||
Amortization of acquisition-related intangible assets | 258 | - | |||||
Deferred compensation plan expense | 440 | 181 | |||||
Non-GAAP gross profit | $ | 255,039 | $ | 260,108 | |||
Non-GAAP gross margin | 55.7 | % | 57.7 | % | |||
*Prior period excludes stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES (Unaudited, in thousands) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Total operating expenses | $ | 156,954 | $ | 134,504 | |||
Adjustments to reconcile total operating expenses to non-GAAP total operating expenses: | |||||||
Stock-based compensation and related expenses* | (49,869 | ) | (35,862 | ) | |||
Amortization of acquisition-related intangible assets | (33 | ) | (33 | ) | |||
Deferred compensation plan expense | (3,626 | ) | (2,604 | ) | |||
Non-GAAP operating expenses | $ | 103,426 | $ | 96,005 | |||
*Prior period excludes stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.
RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME (Unaudited, in thousands) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Total operating income | $ | 95,487 | $ | 124,276 | |||
Adjustments to reconcile total operating income to non-GAAP total operating income: | |||||||
Stock-based compensation and related expenses* | 51,769 | 37,009 | |||||
Amortization of acquisition-related intangible assets | 291 | 33 | |||||
Deferred compensation plan expense | 4,066 | 2,785 | |||||
Non-GAAP operating income | $ | 151,613 | $ | 164,103 | |||
*Prior period excludes stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.
RECONCILIATION OF OTHER INCOME, NET, TO NON-GAAP OTHER INCOME, NET (Unaudited, in thousands) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Total other income, net | $ | 9,540 | $ | 5,297 | |||
Adjustments to reconcile other income, net to non-GAAP other income, net: | |||||||
Deferred compensation plan income | (4,019 | ) | (2,534 | ) | |||
Non-GAAP other income, net | $ | 5,521 | $ | 2,763 | |||
RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES (Unaudited, in thousands) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Total income before income taxes | $ | 105,027 | $ | 129,573 | |||
Adjustments to reconcile income before income taxes to non-GAAP income before income taxes: | |||||||
Stock-based compensation and related expenses* | 51,769 | 37,009 | |||||
Amortization of acquisition-related intangible assets | 291 | 33 | |||||
Deferred compensation plan expense, net | 47 | 251 | |||||
Non-GAAP income before income taxes | $ | 157,134 | $ | 166,866 | |||
*Prior period excludes stock-based compensation related employer payroll taxes from non-GAAP measures due to immateriality.
2024 SECOND QUARTER OUTLOOK RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN (Unaudited) | |||||||
Three Months Ending | |||||||
Low | High | ||||||
Gross margin | 55.1 | % | 55.7 | % | |||
Adjustment to reconcile gross margin to non-GAAP gross margin: | |||||||
Stock-based compensation and other expenses | 0.3 | 0.3 | |||||
Non-GAAP gross margin | 55.4 | % | 56.0 | % | |||
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES (Unaudited, in thousands) | |||||||
Three Months Ending | |||||||
Low | High | ||||||
Operating expenses | $ | 147,900 | $ | 151,900 | |||
Adjustments to reconcile operating expenses to non-GAAP operating expenses: | |||||||
Stock-based compensation and related expenses | (41,800 | ) | (43,800 | ) | |||
Non-GAAP operating expenses | $ | 106,100 | $ | 108,100 | |||
Source:
2024 GlobeNewswire, Inc., source