• Monolithic Power Systems Announces Results for the Fourth Quarter and Year Ended December 31, 2023 and an Increase in Quarterly Cash Dividend

    Source: Nasdaq GlobeNewswire / 07 Feb 2024 15:01:30   America/Chicago

    KIRKLAND, Wash., Feb. 07, 2024 (GLOBE NEWSWIRE) -- Monolithic Power Systems, Inc. (“MPS”) (Nasdaq: MPWR), a fabless global company that provides high-performance, semiconductor-based power electronics solutions, today announced financial results for the quarter and year ended December 31, 2023. MPS also announced that its Board of Directors has approved an increase in the quarterly cash dividend from $1.00 per share to $1.25 per share. The first quarter dividend of $1.25 per share will be paid on April 15, 2024 to all stockholders of record as of the close of business on March 29, 2024.

    The financial results for the quarter ended December 31, 2023 were as follows:

    Revenue was $454.0 million for the quarter ended December 31, 2023, a 4.4% decrease from $474.9 million for the quarter ended September 30, 2023 and a 1.3% decrease from $460.0 million for the quarter ended December 31, 2022.
      
    GAAP gross margin was 55.3% for the quarter ended December 31, 2023, compared with 58.2% for the quarter ended December 31, 2022.
      
    Non-GAAP gross margin (1) was 55.7% for the quarter ended December 31, 2023, excluding the impact of $1.2 million for stock-based compensation expense and $0.5 million for deferred compensation plan expense, compared with 58.5% for the quarter ended December 31, 2022, excluding the impact of $1.0 million for stock-based compensation expense and $0.1 million for deferred compensation plan expense. 
      
    GAAP operating expenses were $141.6 million for the quarter ended December 31, 2023, compared with $130.9 million for the quarter ended December 31, 2022.
      
    Non-GAAP operating expenses (1) were $96.7 million for the quarter ended December 31, 2023, excluding $39.9 million for stock-based compensation expense and $4.9 million for deferred compensation plan expense, compared with $94.8 million for the quarter ended December 31, 2022, excluding $34.2 million for stock-based compensation expense and $1.9 million for deferred compensation plan expense.
      
    GAAP operating income was $109.6 million for the quarter ended December 31, 2023, compared with $136.9 million for the quarter ended December 31, 2022.
      
    Non-GAAP operating income (1) was $156.1 million for the quarter ended December 31, 2023, excluding $41.1 million for stock-based compensation expense and $5.4 million for deferred compensation plan expense, compared with $174.1 million for the quarter ended December 31, 2022, excluding $35.3 million for stock-based compensation expense and $1.9 million for deferred compensation plan expense.
      
    GAAP other income, net, was $10.0 million for the quarter ended December 31, 2023, compared with $3.9 million for the quarter ended December 31, 2022.
      
    Non-GAAP other income, net (1) was $4.9 million for the quarter ended December 31, 2023, excluding $5.1 million for deferred compensation plan income, compared with $1.9 million for the quarter ended December 31, 2022, excluding $2.0 million for deferred compensation plan income.
      
    GAAP income before income taxes was $119.5 million for the quarter ended December 31, 2023, compared with $140.8 million for the quarter ended December 31, 2022.
      
    Non-GAAP income before income taxes (1) was $161.0 million for the quarter ended December 31, 2023, excluding $41.1 million for stock-based compensation expense and $0.3 million for net deferred compensation plan expense, compared with $176.0 million for the quarter ended December 31, 2022, excluding $35.3 million for stock-based compensation expense and $0.1 million for net deferred compensation plan income.
      
    GAAP net income was $96.9 million and $1.98 per diluted share for the quarter ended December 31, 2023. Comparatively, GAAP net income was $119.1 million and $2.45 per diluted share for the quarter ended December 31, 2022.
      
    Non-GAAP net income (1) was $140.9 million and $2.88 per diluted share for the quarter ended December 31, 2023, excluding $41.1 million for stock-based compensation expense, $0.3 million for net deferred compensation plan expense and $2.5 million for related tax effects, compared with $154.0 million and $3.17 per diluted share for the quarter ended December 31, 2022, excluding $35.3 million for stock-based compensation expense, $0.1 million for net deferred compensation plan income and $0.3 million for related tax effects.
      

    The financial results for the year ended December 31, 2023 were as follows:

    Revenue was $1,821.1 million for the year ended December 31, 2023, a 1.5% increase from $1,794.1 million for the year ended December 31, 2022.
      
    GAAP gross margin was 56.1% for the year ended December 31, 2023, compared with 58.4% for the year ended December 31, 2022.
      
    Non-GAAP gross margin (1) was 56.4% for the year ended December 31, 2023, excluding the impact of $4.5 million for stock-based compensation expense and $0.9 million for deferred compensation plan expense, compared with 58.7% for the year ended December 31, 2022, excluding the impact of $4.7 million for stock-based compensation expense.
      
    GAAP operating expenses were $539.4 million for the year ended December 31, 2023, compared with $521.8 million for the year ended December 31, 2022.
      
    Non-GAAP operating expenses (1) were $385.4 million for the year ended December 31, 2023, excluding $145.2 million for stock-based compensation expense, $8.7 million for deferred compensation plan expense and $0.1 million for amortization of purchased intangible assets, compared with $372.4 million for the year ended December 31, 2022, excluding $156.3 million for stock-based compensation expense, $7.1 million for deferred compensation plan income and $0.1 million for amortization of purchased intangible assets.
      
    GAAP operating income was $481.7 million for the year ended December 31, 2023, compared with $526.8 million for the year ended December 31, 2022.
      
    Non-GAAP operating income (1) was $641.1 million for the year ended December 31, 2023, excluding $149.7 million for stock-based compensation expense, $9.6 million for deferred compensation plan expense and $0.1 million for amortization of purchased intangible assets, compared with $680.9 million for the year ended December 31, 2022, excluding $161.0 million for stock-based compensation expense, $7.0 million for deferred compensation plan income, and $0.1 million for amortization of purchased intangible assets.
      
    GAAP other income, net, was $24.1 million for the year ended December 31, 2023, compared with other expense, net, of $1.8 million for the year ended December 31, 2022.
      
    Non-GAAP other income, net (1) was $15.6 million for the year ended December 31, 2023, excluding $8.5 million for deferred compensation plan income, compared with $4.8 million for the year ended December 31, 2022, excluding $6.6 million for deferred compensation plan expense.
      
    GAAP income before income taxes was $505.8 million for the year ended December 31, 2023, compared with $524.9 million for the year ended December 31, 2022.
      
    Non-GAAP income before income taxes (1) was $656.7 million for the year ended December 31, 2023, excluding $149.7 million for stock-based compensation expense, $1.1 million for net deferred compensation plan expense and $0.1 million for amortization of purchased intangible assets, compared with $685.7 million for the year ended December 31, 2022, excluding $161.0 million for stock-based compensation expense, $0.4 million for net deferred compensation plan income and $0.1 million for amortization of purchased intangible assets.
      
    GAAP net income was $427.4 million and $8.76 per diluted share for the year ended December 31, 2023. Comparatively, GAAP net income was $437.7 million and $9.05 per diluted share for the year ended December 31, 2022.
      
    Non-GAAP net income (1) was $574.6 million and $11.78 per diluted share for the year ended December 31, 2023, excluding $149.7 million for stock-based compensation expense, $1.1 million for net deferred compensation plan expense, $0.1 million for amortization of purchased intangible assets and $3.6 million for related tax effects, compared with $599.9 million and $12.41 per diluted share for the year ended December 31, 2022, excluding $161.0 million for stock-based compensation expense, $0.4 million for net deferred compensation plan income, $0.1 million for amortization of purchased intangible assets and $1.6 million for related tax effects.
      

    The following is a summary of revenue by end market (in thousands):

      Three Months Ended
    December 31,
      Year Ended December
    31,
     
    End Market 2023  2022  2023  2022 
    Storage and Computing $117,312  $120,840  $491,139  $452,594 
    Enterprise Data  128,897   68,433   322,980   251,415 
    Automotive  89,758   97,378   394,665   300,016 
    Industrial  33,378   56,063   172,717   219,179 
    Communications  40,926   64,283   204,911   251,452 
    Consumer  43,741   53,015   234,660   319,492 
    Total $454,012  $460,012  $1,821,072  $1,794,148 
     

    The following is a summary of revenue by product family (in thousands):

      Three Months Ended
    December 31,
      Year Ended December
    31,
     
    Product Family 2023  2022  2023  2022 
    DC to DC $427,873  $432,513  $1,718,623  $1,696,594 
    Lighting Control  26,139   27,499   102,449   97,554 
    Total $454,012  $460,012  $1,821,072  $1,794,148 
     

    “While we continue to be cautious about near-term business conditions, we believe our long-term growth strategy remains intact, and we can swiftly adapt to market changes as they occur,” said Michael Hsing, CEO and founder of MPS.

    Business Outlook

    The following are MPS’s financial targets for the first quarter ending March 31, 2024:

     Revenue in the range of $437.0 million to $457.0 million.
       
     GAAP gross margin between 55.1% and 55.7%. Non-GAAP gross margin (1) between 55.4% and 56.0%, which excludes an estimated 0.3% impact from stock-based compensation and related expenses.
       
     GAAP operating expenses between $147.2 million and $151.2 million. Non-GAAP operating expenses (1) between $101.8 million and $103.8 million, which excludes estimated stock-based compensation and related expenses, and amortization of recently purchased intangible assets. The total of non-GAAP adjustments to operating expenses are in the range of  $45.4 million to $47.4 million.
       
     Total stock-based compensation and related expenses of $46.2 million to $48.2 million.
       
     ● Other income of $5.3 million to $5.7 million before foreign exchange gains or losses.
       
     ● 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 (expense), net, operating income and income before income taxes determined in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). Non-GAAP net income and non-GAAP net income per share exclude the effect of stock-based compensation expense, net deferred compensation plan expense (income), amortization of purchased intangible assets and related tax effects. Non-GAAP gross margin excludes the effect of stock-based compensation expense and deferred compensation plan expense. Non-GAAP operating expenses exclude the effect of stock-based compensation expense, amortization of purchased intangible assets and deferred compensation plan income (expense). Non-GAAP operating income excludes the effect of stock-based compensation expense, amortization of purchased intangible assets and deferred compensation plan expense (income). Non-GAAP other income, net excludes the effect of deferred compensation plan expense (income). Non-GAAP income before income taxes excludes the effect of stock-based compensation expense, amortization of purchased intangible assets and net deferred compensation plan expense (income). Projected non-GAAP gross margin excludes the effect of stock-based compensation and related expenses, which include stock-based compensation expense and employer payroll taxes in relation to the stock-based compensation. Projected non-GAAP operating expenses exclude the effect of stock-based compensation and related expenses, and amortization of purchased intangible assets. These non-GAAP financial measures are not prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. A schedule reconciling non-GAAP financial measures is included at the end of this press release. MPS utilizes both GAAP and non-GAAP financial measures to assess what it believes to be its core operating performance and to evaluate and manage its internal business and assist in making financial operating decisions. MPS believes that the inclusion of non-GAAP financial measures, together with GAAP measures, provides investors with an alternative presentation useful to investors’ understanding of MPS’s core operating results and trends. Additionally, MPS believes that the inclusion of non-GAAP measures, together with GAAP measures, provides investors with an additional dimension of comparability to similar companies. However, investors should be aware that non-GAAP financial measures utilized by other companies are not likely to be comparable in most cases to the non-GAAP financial measures used by MPS.

    Earnings Webinar
    MPS plans to host a Zoom webinar covering its financial results at 2:00 p.m. PT / 5:00 p.m. ET, February 7, 2024. You can access the webinar at: https://mpsic.zoom.us/j/91485774615. The webinar 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 purchased intangible assets, other income before foreign exchange gains or losses, and fully diluted shares outstanding, (ii) our outlook for the first 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 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 Russia-Ukraine and Middle East conflicts, inflation, consumer sentiment and other factors; adverse events arising from orders or regulations of governmental entities, including such orders or regulations that impact our customers or suppliers, and adoption of new or amended accounting standards; adverse changes in laws and government regulations such as tariffs on imports of foreign goods, export regulations and export classifications, including in foreign countries where MPS has offices or operations; the effect of export controls, trade and economic sanctions regulations and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets, particularly in China; our ability to obtain governmental licenses and approvals for international trading activities or technology transfers, including export licenses; acceptance of, or demand for, our products, in particular the new products launched recently, being different than expected; our ability to increase market share in our targeted markets; difficulty in predicting or budgeting for future customer demand and channel inventories, expenses and financial contingencies (including as a result of any continuing impact from the Russia-Ukraine and Middle East conflicts); our ability to efficiently and effectively develop new products and receive a return on our R&D expense investment; our ability to attract new customers and retain existing customers; our ability to meet customer demand for our products due to constraints on our third-party suppliers’ ability to manufacture sufficient quantities of our products or otherwise; our ability to expand manufacturing capacity to support future growth; adverse changes in production and testing efficiency of our products; any political, cultural, military, regulatory, economic, foreign exchange and operational changes in China, where a significant portion of our manufacturing capacity comes from; any market disruptions or interruptions in our schedule of new product development releases; our ability to manage our inventory levels; adequate supply of our products from our third-party manufacturing partners; adverse changes or developments in the semiconductor industry generally, which is cyclical in nature, and our ability to adjust our operations to address such changes or developments; the ongoing consolidation of companies in the semiconductor industry; competition generally and the increasingly competitive nature of our industry; our ability to realize the anticipated benefits of companies and products that MPS acquires, and our ability to effectively and efficiently integrate these acquired companies and products into our operations; the risks, uncertainties and costs of litigation in which MPS is involved; the outcome of any upcoming trials, hearings, motions and appeals; the adverse impact on our financial performance if its tax and litigation provisions are inadequate; our ability to effectively manage our growth and attract and retain qualified personnel; the effect of epidemics and pandemics on the global economy and on our business; the risks associated with the financial market, economy and geopolitical uncertainties, including the recent collapse of certain banks in the U.S. and elsewhere and the Russia-Ukraine and Middle East conflicts; and other important risk factors identified under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission (“SEC”) filings, including, but not limited to, our Annual Report on Form 10-K filed with the SEC on February 24, 2023 and our Quarterly Reports on Form 10-Q filed with the SEC on May 5, 2023, August 4, 2023 and November 8, 2023. MPS assumes no obligation to update the information in this press release or in the accompanying webinar.

    About Monolithic Power Systems
    Monolithic Power Systems, Inc. (“MPS”) is a fabless global company that provides high-performance, semiconductor-based power electronic solutions. MPS’s mission is to reduce energy and material consumption to improve all aspects of quality of life. Founded in 1997 by our CEO Michael Hsing, MPS has three core strengths: deep system-level knowledge, strong semiconductor expertise, and innovative proprietary technologies in the areas of semiconductor processes, system integration, and packaging. These combined advantages enable MPS to deliver reliable, compact, and monolithic solutions that are highly energy-efficient, cost-effective, and environmentally responsible while providing a consistent return on investment to our stockholders. MPS can be contacted through its website at www.monolithicpower.com or its support offices around the world.

    Monolithic Power Systems, MPS, and the MPS logo are registered trademarks of Monolithic Power Systems, Inc. in the U.S. and trademarked in certain other countries.

    Contact:
    Bernie Blegen
    Executive Vice President and Chief Financial Officer
    Monolithic Power Systems, Inc.
    408-826-0777
    MPSInvestor.Relations@monolithicpower.com


    Monolithic Power Systems, Inc.
    Condensed Consolidated Balance Sheets
    (Unaudited, in thousands, except par value)
     
      December 31,  December 31, 
      2023  2022 
    ASSETS        
    Current assets:        
    Cash and cash equivalents $527,843  $288,607 
    Short-term investments  580,633   449,266 
    Accounts receivable, net  179,858   182,714 
    Inventories  383,702   447,290 
    Other current assets  147,463   42,742 
    Total current assets  1,819,499   1,410,619 
    Property and equipment, net  368,952   357,157 
    Goodwill  6,571   6,571 
    Deferred tax assets, net  28,054   35,252 
    Other long-term assets  211,277   249,286 
    Total assets $2,434,353  $2,058,885 
             
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    Current liabilities:        
    Accounts payable $62,958  $61,461 
    Accrued compensation and related benefits  56,286   88,260 
    Other accrued liabilities  115,791   113,679 
    Total current liabilities  235,035   263,400 
    Income tax liabilities  60,724   53,509 
    Other long-term liabilities  88,655   73,374 
    Total liabilities  384,414   390,283 
    Commitments and contingencies        
    Stockholders’ equity:        
    Common stock and additional paid-in capital: $0.001 par value; shares authorized: 150,000; shares issued and outstanding: 48,028 and 47,107, respectively  1,129,937   975,276 
    Retained earnings  947,064   716,403 
    Accumulated other comprehensive loss  (27,062)  (23,077)
    Total stockholders’ equity  2,049,939   1,668,602 
    Total liabilities and stockholders’ equity $2,434,353  $2,058,885 


    Monolithic Power Systems, Inc.
    Condensed Consolidated Statements of Operations
    (Unaudited, in thousands, except per share amounts)
     
      Three Months Ended
    December 31,
      Year Ended December
    31,
     
      2023  2022  2023  2022 
    Revenue $454,012  $460,012  $1,821,072  $1,794,148 
    Cost of revenue  202,889   192,203   799,953   745,596 
      Gross profit  251,123   267,809   1,021,119   1,048,552 
    Operating expenses:                
    Research and development  71,459   61,674   263,643   240,171 
    Selling, general and administrative  70,095   69,243   275,740   281,596 
      Total operating expenses  141,554   130,917   539,383   521,767 
    Operating income  109,569   136,892   481,736   526,785 
    Other income (expense), net  9,976   3,872   24,105   (1,848)
    Income before income taxes  119,545   140,764   505,841   524,937 
    Income tax expense  22,640   21,674   78,467   87,265 
    Net income $96,905  $119,090  $427,374  $437,672 
                     
    Net income per share:                
      Basic $2.02  $2.53  $8.98  $9.37 
      Diluted $1.98  $2.45  $8.76  $9.05 
    Weighted-average shares outstanding:                
      Basic  47,936   46,979   47,610   46,727 
      Diluted  48,881   48,549   48,771   48,358 


    SUPPLEMENTAL FINANCIAL INFORMATION
    STOCK-BASED COMPENSATION EXPENSE
    (Unaudited, in thousands)
     
      Three Months Ended
    December 31,
      Year Ended December
    31,
     
      2023  2022  2023  2022 
    Cost of revenue $1,228  $1,030  $4,545  $4,721 
    Research and development  10,204   8,480   36,611   35,355 
    Selling, general and administrative  29,675   25,759   108,555   120,916 
    Total stock-based compensation expense $41,107  $35,269  $149,711  $160,992 


    RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME
    (Unaudited, in thousands, except per share amounts)
     
      Three Months Ended
    December 31,
      Year Ended December
    31,
     
      2023  2022  2023  2022 
    Net income $96,905  $119,090  $427,374  $437,672 
                     
    Adjustments to reconcile net income to non-GAAP net income:                
    Stock-based compensation expense  41,107   35,269   149,711   160,992 
    Amortization of purchased intangible assets  33   33   132   132 
    Deferred compensation plan expense (income), net  288   (61)  1,055   (411)
    Tax effect  2,519   (326)  (3,625)  1,559 
    Non-GAAP net income $140,852  $154,005  $574,647  $599,944 
                     
    Non-GAAP net income per share:                
    Basic $2.94  $3.28  $12.07  $12.84 
    Diluted $2.88  $3.17  $11.78  $12.41 
                     
    Shares used in the calculation of non-GAAP net income per share:                
    Basic  47,936   46,979   47,610   46,727 
    Diluted  48,881   48,549   48,771   48,358 


    RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
    (Unaudited, in thousands)
     
      Three Months Ended
    December 31,
      Year Ended December
    31,
     
      2023  2022  2023  2022 
    Gross profit $251,123  $267,809  $1,021,119  $1,048,552 
    Gross margin  55.3%  58.2%  56.1%  58.4%
                     
    Adjustments to reconcile gross profit to non-GAAP gross profit:                
    Stock-based compensation expense  1,228   1,030   4,545   4,721 
    Deferred compensation plan expense  486   95   871   49 
    Non-GAAP gross profit $252,837  $268,934  $1,026,535  $1,053,322 
    Non-GAAP gross margin  55.7%  58.5%  56.4%  58.7%


    RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES
    (Unaudited, in thousands)
     
      Three Months Ended
    December 31,
      Year Ended December
    31,
     
      2023  2022  2023  2022 
    Total operating expenses $141,554  $130,917  $539,383  $521,767 
                     
    Adjustments to reconcile total operating expenses to non-GAAP total operating expenses:                
    Stock-based compensation expense  (39,879)  (34,239)  (145,166)  (156,271)
    Amortization of purchased intangible assets  (33)  (33)  (132)  (132)
    Deferred compensation plan income (expense)  (4,897)  (1,851)  (8,690)  7,060 
    Non-GAAP operating expenses $96,745  $94,794  $385,395  $372,424 


    RECONCILIATION OF OPERATING INCOME TO NON-GAAP OPERATING INCOME
    (Unaudited, in thousands)
     
      Three Months Ended
    December 31,
      Year Ended December
    31,
     
      2023  2022  2023  2022 
    Total operating income $109,569  $136,892  $481,736  $526,785 
                     
    Adjustments to reconcile total operating income to non-GAAP total operating income:                
    Stock-based compensation expense  41,107   35,269   149,711   160,992 
    Amortization of purchased intangible assets  33   33   132   132 
    Deferred compensation plan expense (income)  5,383   1,946   9,561   (7,011)
    Non-GAAP operating income $156,092  $174,140  $641,140  $680,898 


    RECONCILIATION OF OTHER INCOME (EXPENSE), NET, TO NON-GAAP OTHER INCOME, NET
    (Unaudited, in thousands)
     
      Three Months Ended
    December 31,
      Year Ended December
    31,
     
      2023  2022  2023  2022 
    Total other income (expense), net $9,976  $3,872  $24,105  $(1,848)
                     
    Adjustments to reconcile other income (expense), net to non-GAAP other income, net:                
    Deferred compensation plan expense (income)  (5,095)  (2,007)  (8,506)  6,600 
    Non-GAAP other income, net $4,881  $1,865  $15,599  $4,752 


    RECONCILIATION OF INCOME BEFORE INCOME TAXES TO NON-GAAP INCOME BEFORE INCOME TAXES
    (Unaudited, in thousands)
     
      Three Months Ended
    December 31,
      Year Ended December
    31,
     
      2023  2022  2023  2022 
    Total income before income taxes $119,545  $140,764  $505,841  $524,937 
                     
    Adjustments to reconcile income before income taxes to non-GAAP income before income taxes:                
    Stock-based compensation expense  41,107   35,269   149,711   160,992 
    Amortization of purchased intangible assets  33   33   132   132 
    Deferred compensation plan expense (income), net  288   (61)  1,055   (411)
    Non-GAAP income before income taxes $160,973  $176,005  $656,739  $685,650 


    2024 FIRST QUARTER OUTLOOK
    RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN
    (Unaudited)
     
      Three Months Ending 
      March 31, 2024 
      Low  High 
    Gross margin  55.1%  55.7%
    Adjustment to reconcile gross margin to non-GAAP gross margin:        
    Stock-based compensation and related 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 
      March 31, 2024 
      Low  High 
    Operating expenses $147,200  $151,200 
    Adjustments to reconcile operating expenses to non-GAAP operating expenses:        
    Stock-based compensation and related expenses  (44,800)  (46,800)
    Amortization of purchased intangible assets  (600)  (600)
    Non-GAAP operating expenses $101,800  $103,800 

     


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