Oct 29, 2026 earnings call — Revenue milestone and capacity expansion
Q3 revenue was $1.2 billion, the first quarter above $1 billion.
Revenue $1.2B (est $1.2B) · EPS $8.19 (est $7.79)
Key quotes
"In our enterprise data end market, we saw strong demand across existing customers, which we expect to continue into 2027."
"We expect to have $8 billion of capacity in place by the second half of 2027 on our way to $10 billion in support of our rapidly expanding business."
"And we continue to build out our high-voltage portfolio and began sampling GaN-based solutions for use in 800-volt data center architectures, complementing our existing silicon carbide-based designs."
Analyst Q&A 10
Growth outlook and 800V GaN timing
Q (Tore Svanberg · Stifel): Analyst asked when the company expects the $10 billion capacity and to elaborate on the accelerated growth. He also asked technical positioning of the 800-volt GaN sampling and when revenue might start.
A: Management said they see an explosive growth period with no sign of slowdown and growth across multiple end markets including auto and robotics. They said the 800-volt GaN is MPS's own development, is being sampled, customers can choose GaN or silicon carbide, and they are cautious about reliability; timing for larger revenue is expected around late '27 and more in '28. They also noted a threshold of shipping about 50 million units before calling GaN proven.
"So I think it's not just the existing businesses, it's adding on the additional growth areas over time, which is really giving us confidence going forward." — Tony Balow
Storage/compute mix and OpEx path
Q (Richard Schafer · Oppenheimer): Analyst asked how the storage and compute segment breaks down (SSD, HDD, DDR5, PMIC, PC VCore) and whether notebook weakness matches market. He also asked about OpEx growth and operating leverage at high revenue growth.
A: Management said DDR5, primarily the PMIC solution, has been the biggest driver in that segment while HDD and SSD have also shown healthy growth; notebook weakness tracks the downstream memory constraints but long-term notebook opportunity remains. They said new products like clock drivers and RCD will line up for revenue in 2027 or '28 and that R&D efficiency matters more than just spending; at very high growth they expect to undershoot their OpEx model range because they cannot spend that fast.
"I think just kind of mechanically, if you look at it, the big driver of growth in that segment has been the DDR5, primarily on the PMIC solution." — Tony Balow
Enterprise data growth floor and comms drivers
Q (Quinn Bolton · Needham & Company): Analyst asked whether the enterprise data growth floor should be raised given Q3 results, and what to expect in 2027. He also asked what drove the big comms quarter and whether that pace continues.
A: Management said they are comfortable raising the enterprise data floor from 130% to 150% year-over-year but it is too early to give a 2027 percentage. They said growth drivers (customer diversification, modules, content gains) remain intact and that comms growth was driven by both optical modules and the newer switch business; comms should be the second-fastest-growing end market behind enterprise data.
"But to your point, I think we're comfortable with a floor of 150% year-over-year now going forward." — Tony Balow
Enterprise data: modules, ASICs, and new converter win
Q (Joshua Buchalter · TD Cowen): Analyst asked how enterprise data revenue is split between GPUs, ASICs, modules versus discrete, and how much the new high-speed data converter win might eventually contribute and how big that TAM is.
A: Management said growth comes from a mix of modules, chip power supplies and ICs, and many ASIC customers are using modules which carry higher ASPs. They said they cannot quantify revenue from the high-speed converter yet because they have "well over 6,000 products" in development and do not know which designs will scale into big revenue; they are still early in that process and not ready to call long-term contribution.
"This is -- we can't tell because we have -- we just counted, these are over -- conservatively well over 6,000 products, okay?" — Michael R. Hsing
Vertical power conversion and gross margin trend
Q (William Stein · Truist): Analyst asked whether a remaining lateral customer will convert to vertical power (and whether that requires a module). He also asked if gross margin expansion could exceed the historical 10–20 bps per quarter.
A: Management would not speak for specific customers but said the logic favors vertical designs as GPU power increases and peripheral space runs out; most of the industry has already moved to modules. On gross margin they said Q3 rose 10 bps, their Q4 midpoint implies another 10 bps, and they remain in a 55% to 60% target range with slow, methodical expansion rather than lumpy swings.
"55% to 60% is the sweet spot for sure." — Tony Balow
Rising costs and 800-volt EV importance
Q (Christopher Caso · Wolfe): Analyst asked how the company is handling rising costs (foundry wafer price increases) and whether they are passing costs to customers. He also asked how important the 800-volt transition is for EV content in '27.
A: Management said they absorb some cost increases and share the cost with customers, and pricing has not been a significant driver of recent revenue growth; they focus on protecting gross margin. On 800-volt, management said revenue is expected to come around the end of '27 and into 2028, that 800-volt DC supplies address high power needs and can deliver multi-percent power savings, but their current enterprise-data excitement is not primarily driven by an 800-volt ramp.
"And I think if what you're asking is from some of the results, how much of that is from pricing, it's really not a significant contributor to the revenue growth that we've had." — Tony Balow
Integrated regulators risk and building automation update
Q (Sebastien Cyrus Naji · William Blair): Analyst asked whether integrated voltage regulators (IVR) are a competitive risk after ADI acquired Empower, and asked for progress on the building automation opportunity and software bottleneck.
A: Management declined to comment on other companies and said MPS has its own solutions and will speak when revenue is visible. On building automation, they said they are running experiments in a 1 million square feet building in China with AC-to-DC and 800-volt supply projects just started; hardware components are largely in place but the software side remains a bottleneck and reaching the large market will take time.
"And we just have installed in our 1 million square feet building." — Michael R. Hsing
Switching business and robotics in industrial
Q (Wei Chia · Citi): Analyst asked how much the new switching business contributed to Q3 comms growth and whether it will be accretive to gross margin into 2027. He also asked what drove strong industrial growth and how robotics will ramp.
A: Management said the switching business grew fast from a small base and combined with optical modules produced the Q3 acceleration; optical modules and switch sockets will continue to drive comms into 2027 and end markets should stay near the corporate gross-margin average. On industrial and robotics, they said robotics design wins are accumulating, vision and AI improvements are enabling robot deployments, and they expect these design wins to support revenue in future years with more visible ramps in 2027.
"As we go forward, again, I still think that and optical modules are going to be significant growth drivers for communications into 2027." — Tony Balow
Scaling capacity to $8B and auto pipeline
Q (Joseph Quatrochi · Wells Fargo): Analyst asked what investments (working capital or go-to-market) are needed to support the $8 billion capacity goal. He also asked about geographic breadth and the auto design pipeline into 2027.
A: Management said as a fabless company they do not expect a large increase in capital intensity to ramp capacity and they have flexibility to add capacity without heavy fixed investment. They said auto demand and design activity are broad across the U.S., Europe and China (with notable activity in China), and customer and regional diversity gives confidence in the ramp alongside architectural transitions like 48-volt and zonal architectures.
"I don't anticipate at this point seeing a large increase in capital intensity just to go ramp this capacity, right?" — Tony Balow
Capacity signaling and inventory levels
Q (Gary Mobley · StoneX): Analyst asked whether the $8 billion capacity milestone implies revenue velocity exiting fiscal 2027 and confirmed distribution and internal inventory levels and whether inventory is sufficient for sales.
A: Management said the capacity milestones signal they are keeping capacity ahead of demand and they see demand coming, but it is too early to translate that into a specific quarterly revenue ramp for 2027. On inventory, they said distribution inventory is at the lean end of the normal 5- to 8-week range, internal inventory days have come down as revenues ramp, and current inventory is not limiting the business.
"I think right now, we're still on the channel side, certainly in the lean end of our range like we've been for some time now." — Tony Balow