Earnings call transcript: MaxLinear Q2 2025 reports steady growth, meets EPS forecast

MaxLinear Inc. (MXL) has reported its financial results for the second quarter of 2025, showcasing steady growth in revenue and meeting earnings per share (EPS) expectations. The company achieved a revenue of $108.8 million, surpassing the forecasted $104.89 million, while EPS stood at $0.02, aligning with analyst expectations. Following the announcement, MaxLinear’s stock saw a slight uptick in aftermarket trading, reflecting a modest 0.13% increase to $15.46 per share. According to InvestingPro data, the company has shown strong returns over the past three months, despite not being profitable over the last twelve months.

Key Takeaways

• MaxLinear’s Q2 2025 revenue increased by 18% year-over-year.
• The company returned to profitability on a non-GAAP basis.
• Infrastructure, broadband, and connectivity segments showed strong recovery.
• Stock price experienced a minor increase in aftermarket trading.
• Forward guidance suggests continued growth in upcoming quarters.

Company Performance

MaxLinear demonstrated robust performance in Q2 2025, with revenue climbing 18% compared to the same period last year. The company benefitted from a recovery in key markets, including infrastructure and broadband, which contributed to its return to profitability. This performance aligns with broader industry trends of increased carrier capital expenditures and a resurgence in connectivity demand. With a market capitalization of $1.32 billion and operating with a moderate level of debt, the company maintains a current ratio of 1.63, indicating solid short-term liquidity.

Financial Highlights

• Revenue: $108.8 million, up 18% year-over-year
• Earnings per share: $0.02, meeting forecast
• Gross margin: 59.1% non-GAAP
• Cash position: $110 million at the end of Q2

Earnings vs. Forecast

MaxLinear’s Q2 2025 earnings per share of $0.02 met the forecast, while revenue exceeded expectations by approximately 3.73%. This marks a positive surprise in revenue performance, signaling effective execution and strong market demand for its products.

Market Reaction

Following the earnings announcement, MaxLinear’s stock price experienced a minor increase in aftermarket trading, rising by 0.13% to $15.46. This movement reflects investor confidence in the company’s growth trajectory, despite a broader market environment that remains challenging. InvestingPro analysis suggests the stock is currently trading near its Fair Value, with notable volatility in price movements. While the stock has taken a significant hit over the last six months (-36.17%), it has shown strong momentum in recent weeks.

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Outlook & Guidance

Looking ahead, MaxLinear has provided revenue guidance for Q3 2025, projecting between $115 million and $135 million. The company anticipates growth across all market segments, with significant opportunities in emerging technologies such as 2.5G Ethernet and AI infrastructure. MaxLinear’s strategic initiatives, including new product launches, are expected to drive accelerated growth into 2026. InvestingPro data reveals that analysts predict the company will return to profitability this year, with an EPS forecast of $0.29 for FY2025, though 11 analysts have recently revised their earnings expectations downward.

Executive Commentary

CEO Kishore Siddhrypu expressed confidence in the company’s performance, stating, "We are proud of our strong growth, return to profitability, and positive cash flow generation in Q2." He emphasized the impact of investments in high-value categories on product traction with Tier One customers.

Risks and Challenges

• Tariff uncertainties could impact supply chain costs.
• Market saturation in certain segments may limit growth potential.
• Macroeconomic pressures could affect customer spending.
• Competition in the optical interconnect market remains intense.
• Dependence on Chinese market dynamics for transceiver volumes.

Q&A

During the earnings call, analysts inquired about the potential impacts of tariff uncertainties and the strength of order pipelines. Discussions also covered geographic market dynamics and the company’s roadmap for co-packaged optics and storage accelerators, highlighting MaxLinear’s strategic focus on innovation and efficiency.

Full transcript - MaxLinear Inc (MXL) Q2 2025:

Julian, Conference Call Moderator: Greetings, and welcome to the MaxLinear Q2 twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce Leslie Green, Investor Relations.

Thank you, Leslie. You may begin.

Leslie Green, Investor Relations, MaxLinear: Thank you, Julian. Good afternoon, everyone, and thank you for joining us on today’s conference call to discuss MaxLinear’s second quarter twenty twenty five financial results. Today’s call is being hosted by Doctor. Kishore Sidripoot, CEO and Steve Litchfield, Chief Financial Officer and Chief Corporate Strategy Officer. After our prepared comments, we will take questions.

Our comments today include forward looking statements within the meaning of applicable securities laws, including statements relating to our guidance for the third quarter of twenty twenty five, including revenue, GAAP and non GAAP gross margin, GAAP and non GAAP operating expenses, GAAP and non GAAP interest and other expense, GAAP and non GAAP income taxes and GAAP and non GAAP diluted share count. In addition, we will make forward looking statements relating to trends, opportunities, execution of our business plan and potential growth and uncertainties in various product and geographic markets, including without limitation statements concerning future financial and operating results, opportunities for revenue and market share across our target markets, new products, including the timing and production of launches of products, demand for and adoption of certain technologies and our total addressable market. These forward looking statements involve risks and uncertainties, including risks outlined in our Risk Factors section of our recent SEC filings, including our Form 10 Q for the quarter ended 06/30/2025, which we filed today. Any forward looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward looking statements. The second quarter twenty twenty five earnings release is available in the Investor Relations section of our website at maxlinear.com.

In addition, we report certain historical financial metrics, including but not limited to gross margin, income from operations, operating expenses and interest and other expense on both a GAAP and non GAAP basis. We encourage investors to review the detailed reconciliation of our GAAP and non GAAP presentations in the press release available on our website. We do not provide a reconciliation of non GAAP guidance for future periods because of the inherent uncertainty associated with our ability to project certain future changes, including stock based compensation and its related tax effects as well as potential impairments. Non GAAP financial measures discussed today are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures. We are providing this information because management believes it is useful to investors as it reflects how management measures our business.

Lastly, this call is also being webcast and the replay will be available on our website for two weeks. And now let me turn the call over to Doctor. Kishore Siddhrypu, CEO of MaxLinear. Kishore?

Kishore Siddhrypu, CEO, MaxLinear: Thank you, Leslie, and good afternoon, everyone. Our Q2 results not only reflect 13% sequential and 18% year over year growth in our business, but also point to strong positive inflection in our business recovery and growth trajectory. Our revenue of $109,000,000 approximately exceeded the midpoint of our guidance. Non GAAP gross margin was 59.1% and we delivered a meaningful reduction in our operating expenses. With solid execution in Q2, we returned to profitability on a non GAAP basis and generated positive free cash flow.

We continue to drive strong customer and product traction in high speed data center optical interconnects, PON broadband access, Wi Fi and Ethernet. Our growing success in these strategic markets, robust customer order rates and backlog coupled with increasing telco CapEx spending reinforce our confidence in the strength of our growth for 2025 and 2026. In our infrastructure end market, we are excited with the sustained growth trajectory in 2025 and expect revenue acceleration in 2026 as new design wins begin to ramp across our portfolio. In high speed data center optical interconnects, we are on track to deliver 60,000,000 to $70,000,000 in revenue this year, primarily from our 800 gigabit five nanometer Keystone PAM4 DSP product family. We anticipate additional 800 gigabit PAM4 DSP customer calls and production rollout throughout 2025, which will drive incremental revenue growth in 2026.

Further customer interest and design in activity for our Rushmore 200 gigabit per lane, 1.64 terabit PAM4 DSP has been robust since our live demonstration at the Optical Fiber Conference twenty twenty five this year in San Francisco. Like Keystone, our Rushmore family of PAM4 TIAs and 200 gigabit per lane DSPs per 1.6 terabit interconnects offer superior low power and performance advantages. This continues to be the basis of our competitive differentiation and expectations of design win momentum. In wireless infrastructure, the market continues to recover with expected increases in carrier CapEx spending driving demand for the 2025 as well as 2026. Our Sierra five gs wireless access single chip radio SoC and our millimeter wave and microwave backhaul transceivers and modems are essential for supporting increasing mobile usage and data rates as well as new functionality such as edge AI.

We have new design wins with our Sierra based products with two major North American telecom providers launching Sierra based macro base station RU products in Q3. We expect to see sustained growth in five gs wireless access and backhaul as the needs for cloud and edge AI functionality continue to increase in 2026 and beyond. Also within our infrastructure category, we continue to see strong design win success for our Panther family of hardware storage accelerators, SoCs across Tier one network appliance and cloud service providers. In August, we will showcase our next generation Panther five storage accelerator at the future of memory and storage FMS twenty twenty five conference in Santa Clara. Also at FMS twenty twenty five, we will have a joint keynote address with advanced micro devices on the transformation of enterprise data storage.

Panther delivers significant advantages over traditional software based compression, including more than a 4x improvement in power savings and much more efficient usage of CPUs and CPU cores and AI accelerators. Panther five is PCIe Gen five capable and at 500 gigabits per second throughput speeds, it delivers more than two times the performance of Panther three to enable ultra low latency data processing across file, block and object storage. Moving to broadband and connectivity, we continue to see steady growth and are excited by the market outlook for meaningful increases in service provider CapEx spending. For example, both major North American carriers have announced plans to increase the scope and pace of their FiberPON access build outs. These increased infrastructure investments by carriers and operators are driving continued booking strength and incremental demand for our fiber PON, cable DOCSIS and Wi Fi solutions.

Later this year, we will ramp our single chip integrated fiber PON and 10 gigabit processor gateway SoC plus Tri Band Wi Fi seven single chip platform solution with a second major Tier one North American carrier. This new gateway SoC platform win represents an exciting growth opportunity and is also a significant validation of our technology on competitive positioning in the growing fiber PON market. In the Ethernet market, we continue to expand our 2.5 gigabit Ethernet switch and PHY portfolio into commercial enterprise industrial applications. MaxLinear has one of the broadest and most competitive offerings to enable the upgrade from one gigabit per second Ethernet legacy data rates to 2.5 gigabit per second using existing Cat five cabling. This upgrade is driven by edge cloud expansion, IoT gateways and enterprise access point transition to Wi Fi six and Wi Fi seven.

It represents a significant opportunity size for MaxLinear of approximately $100,000,000 per year in revenues by 2028. In Q2, we were pleased to announce 2.5 gigabit ethernet based multiport PHY and switch adoption by several notable partners including ASUS, HighSource and others. We look forward to closing the additional Tier one names in our design win pipeline. In conclusion, we are proud of our strong growth, return to profitability and positive cash flow generation in Q2. Our success in the strategic areas of our product portfolio and the incremental tailwind from the ongoing recovery in our core markets has enabled us to turn an important corner in our business.

Our investments in high value categories such as high speed interconnect for the data center, multi gigabit PON access, Wi Fi connectivity, Ethernet storage accelerators and wireless infrastructure are all driving strong product traction with Tier one customers and partners. We believe this positions us well for accelerated growth in 2026 and beyond. With that, let me now turn the call over to Steve Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer. Steve?

Steve Litchfield, CFO and Chief Corporate Strategy Officer, MaxLinear: Thanks, Kishore. Total revenue for the second quarter was $108,800,000 up 13% from $95,900,000 in the previous quarter and up 18% from the $92,000,000 in second quarter of twenty twenty four. Infrastructure revenue for the second quarter was approximately $35,000,000 Broadband revenue was approximately 48,000,000 Connectivity revenue was approximately $21,000,000 and Industrial Multimarket revenue was approximately $6,000,000 GAAP and non GAAP gross margin for the second quarter were approximately 56.559.1% of revenue. The delta between GAAP and non GAAP gross margin in the second quarter was primarily driven by $2,600,000 of acquisition related intangible asset amortization. Second quarter GAAP operating expenses were $86,100,000 and non GAAP operating expenses were $56,600,000 The delta between GAAP and non GAAP operating expenses were primarily due to stock based compensation and performance based equity accruals of $19,300,000 combined, restructuring cost of $5,600,000 and acquisition related cost of $4,100,000 GAAP loss from operations for Q2 twenty twenty five was 22% and non GAAP income from operations in Q2 was 7% of net revenue.

GAAP and non GAAP interest and other expense during the quarter was $6,100,000 and $5,900,000 respectively. The increase over prior quarter was primarily due to $4,000,000 in foreign exchange cost. In Q2, net cash flow provided in operating activities was approximately 10,500,000.0 We exited 2025 with approximately $110,000,000 in cash, cash equivalents and restricted cash ahead of our 2025 plan. Our day sales outstanding was down in Q2 to approximately eighty nine days. Our gross inventory was approximately flat versus the previous quarter with inventory turns improving to 1.5 times.

This concludes the discussion of our Q2 financial results. With that, let’s turn to the guidance for Q3 of twenty twenty five. We currently expect revenue in the 2025 to be between $115,000,000 and $135,000,000 Looking at Q3 by end market, we expect all end markets infrastructure broadband connectivity and industrial multimarket to be up in the quarter. We expect third quarter GAAP gross margin to be approximately 55% to 58% and non GAAP gross margin to be in the range of fifty seven point five percent and sixty point five percent of revenue. We expect Q3 twenty twenty five GAAP operating expenses to be in the range of 84,000,000 to $90,000,000 We expect Q3 twenty twenty five non GAAP operating expenses to be in the range of $55,000,000 to 61,000,000 We expect our Q3 GAAP and non GAAP interest and other expense each to be in the range of approximately $3,500,000 to $4,500,000 We expect a $600,000 tax benefit on GAAP basis and a non GAAP tax of $1,300,000 or 11%.

We expect our Q3 basic and diluted share count to be approximately eighty seven point one and eighty seven point five respectively. In closing, we’re pleased to report another quarter of solid progress marked by continued improvement in customer orders and growing traction across our product portfolio. Our focused investments in strategic high growth areas such as optical high speed interconnects, wireless infrastructure, storage, Ethernet, Wi Fi and fiber PON gateways are beginning to generate exciting business opportunities that we expect to accelerate revenues in 2026. This reinforces our confidence in our sustainable growth and profitability through 2025 and beyond. With that, I’d like to open up the call for questions.

Julian?

Julian, Conference Call Moderator: Thank you. We will now be conducting a question and answer And our first question comes from the line of Tore Svanberg with Stifel. Please proceed with your question.

Tore Svanberg, Analyst, Stifel: Yes. Thank you and congratulations on the continuous recovery here. I guess my first question is on the Q3 outlook. I do appreciate that all segments are going be up sequentially, but I mean they have been quite volatile, right? So can you maybe give us a little bit more granularity on how the segments are going to perform in the quarter or at least maybe which segments could potentially be stronger than the others?

Steve Litchfield, CFO and Chief Corporate Strategy Officer, MaxLinear: Hey, Tore, this is Steve. Yes, I mean look I think you can see I mean one of the biggest commitments that we’ve had here is infrastructure. I think that’s the one that we continue to see nice performance particularly in the back half of the year. So I think that should continue. I mean clearly you’re seeing continued recovery in the broadband and connectivity in markets.

And so those are two other ones that are getting good traction with some of the newer products as well as a recovery. And then probably industrial multimarket would be the third one there, which has clearly been a struggle, but we do expect to see a recovery there.

Tore Svanberg, Analyst, Stifel: Very good. And specifically on broadband, was very, very strong this quarter. I know this can be a little bit difficult for you to assess, but any sense for how much of that is growth is driven by inventory replenishment versus some of the newer products that you have there, especially when I start thinking about some of the newer gateways that your end customers are launching? Well,

Steve Litchfield, CFO and Chief Corporate Strategy Officer, MaxLinear: Tore, I mean, as you know, this I mean, there has been a recovery underway, but I think what you’re seeing in the market and I think this is reflected in our numbers and our guidance and outlook I guess is kind of beyond that recovery. I mean we’re seeing CapEx dollars being deployed. You’re hearing a lot about that in the market right now about people reinvested The service providers in particular carriers are being a lot more aggressive. You’re also seeing the cable folks start to upgrade as well. So for all those reasons we’re seeing excitement around our business.

I would also add that we’re continuing to gain market share and really win in the market and I think that speaks to the value of our products themselves, the support that we’re giving these customers and our commitment to these customers.

Tore Svanberg, Analyst, Stifel: Very good. I’ll go back in line. Thank you.

Steve Litchfield, CFO and Chief Corporate Strategy Officer, MaxLinear: Thanks, Tore.

Julian, Conference Call Moderator: Thank you. And our next question comes from the line of Christopher Rolland with Susquehanna International Group. Please proceed with your question.

Christopher Rolland, Analyst, Susquehanna International Group: Thanks for the question guys and congrats on the results. I’d love to kind of dig a little bit deeper into Rushmore and Keystone, kind of design wins you’re seeing in terms of like the makeup of those design wins or qualifications? Are they module makers? Has anything shifted? Do you have any anchor hyperscale customers?

Just yes, and any more details around optical DSP in particular would be great.

Kishore Siddhrypu, CEO, MaxLinear: Hello, Chris. This is Kishore. Yes, thank you. I’m also feeling pretty encouraged that we’ve finally turned the corner on the business here and we see very strong robust growth continuing moving forward not just second half twenty twenty five into 2026 and beyond. And with all the new products that we’re going to add to the mix here.

Coming back to the optical, like we said, we’re going to double our revenue compared to last year 60,000,000 to $70,000,000 range we feel. There is obviously some expected ramps towards the end of the year that will follow through into 2026 growth. And almost all of it is at the strength of on the back of Keystone. And I just want to point out that our Keystone design wins are not inside. We have never participated in the NVIDIA ramps.

So it’s really more on the front side of the network if you will. So yes, we have a number of we have designs with all the major module makers. In fact, I would like to say 100%, but I don’t want to say that because I don’t know what I’m missing so to speak. So we are really in some sense are sort of a drag along in terms of the wait times where something takes to call at the various data centers. So we really don’t dictate the acceleration of it.

Sometimes it’s the interop is late through the DSP issues, sometimes through the optics issues, but we work them together. And having said that, we’re in multiple call intraop stages with the data centers with some we’re already shipping and some we’re the pilot ramp phase, various phases. So I hope that answers your question. That’s why we have all we have never disclosed who the end customers are and we have been very careful because we don’t want to mislead you either. So, but the revenues are very good and the lead times expanding, threatening to move increasing as well.

We should start seeing more order pickup as we move into 2026. So that’s one side of the story on Keystone. Moving to Rushmore, we really feel that Rushmore maybe the tipping point for us from a technology incumbency point of view now really building on what Keystone has offered as the number three guy. And maybe, maybe you hopefully move into the top two players, right? All our companies are in very nascent phases.

They originally came out with the five nanometer solution. Now they’re scrambling to offer a three nanometer solution, but we feel we made the right bet as the first guys to move into a more advanced node. Our power, low power offering and our superior performance we have focused on and we’re getting a lot of product details from all the vendors who have tried the competitive solutions. So I think it’s going to be a long game because 1.6 terabit is just still in starting innings. Why we not you do not see much discussions about AECs and such yet on 1.6 terabit.

Technically I feel that if there’s a play for copper AECs will be real as we move towards 1.6 terabit and beyond. So to that extent, we’re very heavily engaged with both optical module makers and with, what you call the copper dies. And we’re also seeing the module makers also trying to now get into, copper cables as well. And our track record on Keystone is what gives them confidence that we are going to be a pretty viable and a differentiating supplier and with a long term roadmap. And with all the hoopless surrounding, the PAM4 stuff, I can still claim legitimately there are only three vendors with credible solution for optical transceivers and the quality of the offering that is required in an AI network with robustness is even more important than an end to end in the interop scenario.

I hope that answers your question.

Christopher Rolland, Analyst, Susquehanna International Group: That does. Thank you, Kishore. Maybe a second question for Steve. I think OpEx was a little bit higher than we were expecting. Just wondering what that was about and where the investment was?

Also interest and other expense was higher. Lastly, the SIMO arbitration is still expected I think for the end of the year if I remember correctly?

Steve Litchfield, CFO and Chief Corporate Strategy Officer, MaxLinear: That was a real savvy way to get three questions into one, but I’m going to roll

Tore Svanberg, Analyst, Stifel: with it.

Steve Litchfield, CFO and Chief Corporate Strategy Officer, MaxLinear: So real quick, really important one OpEx. OpEx is actually below our midpoint of our guide. And honestly some of I think what you’re referring to is the guidance was probably a little bit higher than your expectation. So we did have some expenses that were pushed into Q3 and that kind of moves that number up a little bit more than we expected. I do expect it to come back down in Q4, but we’re making great progress.

I mean if you look at the improvement that we made year over year on OpEx, it’s been exceptional and I think we’ll continue to make improvements there. I mean we are making big investments as well. We’re seeing nice growth and so we’ve got some good commitment to some of the newer products that Kishore spoke about earlier. So we’re definitely spending on that front. Interest in other was a little higher.

Yes, called out in my prepared remarks about the $4,000,000 of FX impact that we had in the quarter that rolls up in that interest in other line. I mean, I think the whole world is seeing what’s going on with the weakness of the dollar and so that did impact us. I think it really speaks to the strength to the rest of the business because we’ve been able to overcome that. We’ll see where the dollar goes. It still feels like there might be a little more headwind in the back half of the year but regardless I think we’re really focused on our core business and executing there.

Kishore Siddhrypu, CEO, MaxLinear: I think bringing back to where the investments are, our absolute strategic focus is on investing on the what’s the future of the AI world, data center related and the other important thing we are focused on is cost down improvements of our products. I think I don’t think they’re the only ones but the way the foundry business has evolved that we got tremendous cost pressures coming from the foundry suppliers and, we have to take steps now to invest for cost reduction so that we maintain and improve our gross margin as we move forward. So I think, the second answer may be a little bit of a surprise for you, but I think that’s absolutely a prudent thing to do to shore up our profitability and bring back more leverage in our business model.

Christopher Rolland, Analyst, Susquehanna International Group: Understood.

Steve Litchfield, CFO and Chief Corporate Strategy Officer, MaxLinear: I think Chris probably dropped off, but I’ll answer that last part. You did ask about Silicon Motion. So no change on that front. We do expect arbitration in Q4 of this year and then hopefully we kind of get some resolution in the first half of next year. And then I think the ultimate finalization probably come somewhere in 2027 or 2028.

If there was any cash to transact, I mean it probably wouldn’t push it would probably push until 2027 or 2028.

Tore Svanberg, Analyst, Stifel: Thanks

Christopher Rolland, Analyst, Susquehanna International Group: guys. If you can still hear me.

Julian, Conference Call Moderator: Thank you. And our next question comes from the line of Ananda Baru with Loop Capital Markets. Please proceed with your question.

Ananda Baru, Analyst, Loop Capital Markets: Hey, thanks guys for taking the question. Kishore, just a little bit more on PAM4 DSP. Do you you mentioned greater accelerating growth in 2026 rev ramp. Do you think that comes from the current from the wins you have going into 2026 primarily? Or can you see a big impact from the new qualifications as well from Rushmore?

And I have a quick follow-up as well. Thanks.

Kishore Siddhrypu, CEO, MaxLinear: So Anand, good question. I just want to be very clear that the revenues in 2026 will still be 800 gigabit dominated. I don’t see 1.6 terabit rush more shipping until at the end of next year leading into 2027 honestly. And what has come as a huge surprise or shouldn’t be anymore after these years is that is indeed pretty rigorous. Everybody has their own timeline and they go it in phases from small volumes to bigger volumes and larger volumes after that.

And from a deployment point of view, I don’t think anybody outside of the AI back end network guys are really, really, in a position to deploy 1.6 gigabit yet on the front end networks. So and the AI, even from an NVIDIA point of view, they don’t expect this is my hearsay story. They don’t expect revenues of 1.6 terabyte to pick up until the second half of next year that is peaking today. And I I would dare say that 800 gigabit will be the dominant shipment node for the next few years to come.

Ananda Baru, Analyst, Loop Capital Markets: That’s helpful. Yeah. They’re thinking it’s a Reuben thing. So it sounds like you guys are are thinking along the same lines as well. And then just given your your remarks that as of right now, it’s really the module makers where the calls are.

Does that position you well for the growing neo cloud opportunity and the sovereign opportunity if sovereign can get the licenses signed as you go through 2026?

Kishore Siddhrypu, CEO, MaxLinear: We hope so. One of the things you know, you really want to keep this account is that this market has been starting for the third supplier.

Ananda Baru, Analyst, Loop Capital Markets: Yep.

Kishore Siddhrypu, CEO, MaxLinear: Whichever way you look at it. And we have been a steady 80 in terms of not being there and doing the stuff and really putting an effort in differentiation enabling our module customers rather than dragging along the module guys with us, right? And I think that really helps us in favor and they have opportunities where they’re not beholden to using the incumbents. They they give us chance every time. And I think that that really help us in all these other opportunities you’re referring to.

Ananda Baru, Analyst, Loop Capital Markets: Yes, that’s great. I’ll leave it there guys. I appreciate it. Thanks.

Kishore Siddhrypu, CEO, MaxLinear: Great. Thanks, Ananda.

Julian, Conference Call Moderator: Thank you. And our next question comes from the line of Quinn Bolton with Needham and Company. Please proceed with your question.

Quinn Bolton, Analyst, Needham and Company: Hey, guys. I guess a couple of questions and congratulations on the nice outlook. First, I hate to ask, but since some other analog mixed signal guys have talked about starting to see some pull in activity or inventory builds given tariff uncertainty, especially ahead of August 1. Wondering if you think any of the orders you’ve seen, I know you’ve seen orders strengthening now for several quarters, any of that you might be able to distinguish as sort of tariff or pull in related or do you think it’s been pretty steady? And then I’ve got a follow-up.

Kishore Siddhrypu, CEO, MaxLinear: So the orders have been very steady and strengthening. I think I referred to that as last quarter itself when you asked the same question and I said, I cannot speak for the future orders, but I can definitely speak for the orders that we already have that they’ve been seeded these will carry fresh. Now look, from my point of view, we have been post pandemic peak ordering and all the things that you had dealt with, we were not in a hurry to order or acknowledge order so to speak. But I think we will start seeing accelerating orders now relate to sort of late reaction from some of our customers. And however, we are not in a position to respond to them because the lead times already stretched very, very rapidly.

So I don’t think that’s going to benefit us all in terms of the revenues that we expect to generate in the next at least the next couple of quarters to come because right now, the lead times of the OSAT, the SMB houses now is as long as the Foundry is now. So you can assume that you’re looking at six months of lead time now, right? Okay, maybe thereabouts. So I don’t think we can respond to this. I think the orders don’t make a difference as to what it means to our revenues moving forward.

Quinn Bolton, Analyst, Needham and Company: Got it. No, that was I think consistent with how you addressed that last quarter. And then you guys I think in the prepared script talked about seeing strength in the 2025 and accelerating growth in 2026. And I just want to make sure, I’m not misinterpreting your comments. Are you sort of suggesting you think annual growth in 2026 is even higher than what you’re growing here or appear to be growing in 2025?

Or just should we be thinking about the acceleration comment is specifically talking about year over year growth ’26 versus ’25? Or are you just sort of talking about orders or other parts of the business and it’s not sort of a comment per se about the revenue.

Kishore Siddhrypu, CEO, MaxLinear: So, when we talk about accelerating revenues, I was talking sort of design wins within categories. So I think you want to parse through the script and section by section. We have this great design win with the major new North America operator, tier one operator, and we expect that to ramp in pretty serious, heavy volume at the end of this year. So that clearly is an acceleration in my view. We talked about all these calls that are going on the optical in the infrastructure segment that will result in such an outcome.

We also talked of access customers of our five gs product that are just beginning to ship in the second half for five gs applications to major North America operators. So I think it is the context of sort of new design wins with major players that will start ramping and obviously that’s a great outcome for those product categories. Can I

Quinn Bolton, Analyst, Needham and Company: squeeze in one quick one for Steve? I don’t think you guys have ever sort of called out significant FX effects in past quarters. So the 4,000,000 kind of FX charge this or charge expense kind of caught me by surprise. Can you just sort of say where is that FX coming from? I assume you’re pricing most stuff in dollars, you maybe have employees or fixed costs located overseas.

Is that the origin of Yes. The

Steve Litchfield, CFO and Chief Corporate Strategy Officer, MaxLinear: I mean as you know I mean these are kind of historical moves in the dollar. I mean it’s been over thirty years since you’ve seen this much. But we typically I mean we transact in dollars and so this is really just employees that we have is where it gets impacted. A few of the regions that were impacted the euro is probably the biggest is where we saw the worst. Shekel as well.

I mean we’re exposed in Israel. And in some of these places we do hold some cash. I mean, it ended up being bigger than expected in the quarter. We’ve had it from time to time in the past and we’ve been able to overcome it with the strength of the business. Got

Tore Svanberg, Analyst, Stifel: it. Okay. Thank you.

Julian, Conference Call Moderator: Thank you. And our next question comes from the line of David Williams with The Benchmark Company. Please proceed with your question.

David Williams, Analyst, The Benchmark Company: Hey, gentlemen. Thanks for taking the question. And let me also give you my congrats on the solid progress here. So maybe first, Kishore, maybe from a geographic standpoint and in China specifically, can you talk about any of the dynamics you’re seeing there in terms of the strength that’s building or where there are still areas that are not quite up to where you would hope they would be in terms of demand?

Kishore Siddhrypu, CEO, MaxLinear: So, hi David, thank you. Look from a geographic point of view, strength areas for us are US and Europe. But China, we’re seeing different parts of the market behave very differently. I mean, talked about the industrial multi market segment being down and there’s really two parts to that. One is there’s a strong push for made in China product and the same time that alone creates surprising pressure.

And we are taking very disciplined approach where we are walking away from businesses revenues where margins are not accretive to what we feel is the right benchmark for MaxLinear. And some cases we are taking the business because strategically positioned us for holding out right now with the pressures, but later it will strengthen our offering and therefore we can build back. So those are puts and takes in how we go about it. But in China, there’s a big push now developing for them deploying their data center networks. So there’s going be a lot of spend in data center China.

In fact, if you look at today’s data center volumes for transceivers, they are maybe less than 20% of the market. But if we just forecast it three years out, China will be 40% of the transceiver volumes in the world. So that’s a significant acceleration more than on a unit basis than what the USC. So the great yes, are lagging by a generation or so The U. S.

Technology and they are the incumbency is not very well established yet, right, because we are not behind in our offering timings. And so that gives us a very great position to work and see how we can build and grab more market share. And likewise, are seeing strengthening in other infrastructure areas in where there’s some spend going on, related spend. And but we are just generally seeing a certain weakness in industry and sort of areas besides the pressure from internal made in China China story. So I hope that gives you some color.

If you when you think broadband and connectivity, please think North America, Europe and some Latin America. When you think data centers, please think U. S, China. And then when you think about our when you think other infrastructure that’s Ethernet or storage accelerators, it’s across the board geographies made over their enterprise providers. So I think that would give you a good sense of where the product mix is playing out.

Tore Svanberg, Analyst, Stifel: Okay?

David Williams, Analyst, The Benchmark Company: Yes. Very good color there. Thank you for that. Then maybe just from a technology progression, we’re clearly in the early stages with Keystone and Rushmore. But as you think further out into as we get to silicon photonics and co packaged optics, do you have a roadmap to get there?

And how do you think MaxLinear plays into that trend as we move that direction? Thank you.

Kishore Siddhrypu, CEO, MaxLinear: Yes. Very, very good question. Am I was really looking forward to that question. Actually, if you just look at the offering of any PAM4 DSP and TIA companies, they have all the product technology platform to offer CPO related products. Whether it is, you know, we can get to the details of that.

So for us, it’s about full filling order portfolio through derivatives and some level of customization with working with customers. So the most important thing is to work with optics companies to develop our CPU offerings and we are engaged with optics companies to really customize our offerings, related to, CPU solutions. Having talked talking about CPUs, it’s going to be a very mixed world. CPU is going to be a very, very, what I call contained offering, whereas much of the network is going to be pretty much a pluggable offering with more skated DSP transceivers or LROs that sort of a mixed mode offering. So I think that, CPO is one thing we’ll be definitely beginning to engage in to fill out our portfolio, but there’s time yet to come for, but there’s no scenario in the world where CPO is sort of a broad base across the network is going be much more sort of, I don’t use the word bitchy, but a containerized containerized solution offering to where everything is predetermined.

Okay. So when you talk of CPOs, you generally talk about an NVIDIA or a Broadcom switch offering, but it’s really not a broad across the network offering and all hyperscale network providers will readily acknowledge it, not even some of them even completely dismissing it. Okay. But we as a silicon company, we are working with the optics companies to offer a CPO, CPO silicon solution to obviously the offering is much more analog intensive when you go CPOs and less on the mixed signal side, digital less digital intensive. Okay.

Tore Svanberg, Analyst, Stifel: Great color. Thanks again. Thank

Julian, Conference Call Moderator: you. And our next question comes from the line of Karl Ackerman with BNP Paribas. Please proceed with your question.

Karl Ackerman, Analyst, BNP Paribas: Yes, thank you. I was hoping you could discuss which areas you’ve seen the most improvement in order visibility, just given the effect of beat and raise this quarter. And in particular, with the second major Tier one U. S. Carrier ramping your integrated PON and Wi Fi gateway SoC, is this where you have a strongest visibility and confidence in order recovery or other areas as well?

And I have a follow-up, please.

Kishore Siddhrypu, CEO, MaxLinear: Across the board, really, if the uncertainty is there, it’s really about the call timings and our optical when we get through each call. But that can that really is sometimes like a big flash, it goes, you know, and that’s where the uncertainties in the forecasting. But having said that, they put a stake in the ground saying, we feel good that we’ll get to that 60 to $70,000,000 revenue for the year in our data center revenue. Otherwise, across the board, we have very good visibility. And would say that’s got nothing to do with the new design win that we have in broadband.

Karl Ackerman, Analyst, BNP Paribas: Yes. Understood. Thank you. And for my follow-up, you mentioned again just some of the opportunities you see in front of you with regard to your Panther family of hardware SOCs storage hardware SOCs. I was hoping you could discuss the breadth of wins and the visibility that you see there because it does appear to be picking up.

So if you could discuss that, that would be helpful. Thank you.

Kishore Siddhrypu, CEO, MaxLinear: So we have been investing in this Panther storage compression and hardware accelerators for both storage compression, decryption and security for a while now. And it’s again one of those heavy duty, intra like a lot of validation drops just like any high end infrastructure product is going to be. But we got a number of proof of concept design wins complete. We have a number of major players in enterprise who are now incorporating and the only one we have talked about publicly is the Dell PowerMax platform, but it’s proliferating across various competitors in the storage appliance market. Having said that, have just started initial forays and proof of concept at cloud compute hyperscale data center companies as well.

And, I’m very pleased with the reception it’s having with those. So I hope to break break into one of those as well. So and then, obviously this part of it was the cloud data center is evolving very, very rapidly and the specification requirements also evolve very rapidly. So we’re really engaged in making sure the next generation offering has got all the bells and whistles that is perfectly and beautifully tuned for the cloud data centers. Having said that, it’s a strong pipeline and I say that again, next year we’re to maybe triple the revenue of this year range 2x to 3x.

And they said that product line definitely in two to three years could be 75,000,000 to $100,000,000 based on the offerings we know now. But with the proof of concept traction we have, could it be double that? I really hope so. And but I just want to save the verdict for a little bit more time. Okay?

Karl Ackerman, Analyst, BNP Paribas: Thank you.

Julian, Conference Call Moderator: And our next question comes from the line of Suji Desilva with ROTH Capital Partners. Please proceed with your question.

Leslie Green, Investor Relations, MaxLinear0: Keesha. Hi, Steve. Congrats on the progress here. In the high speed interconnect, if I heard you correctly, I think you talked about your optical module customers exploring AEC opportunities. I’m wondering if you have a roadmap to support any effort they’re doing in terms of moving to either copper or from the front end to the back end or any thoughts there as to your roadmap and how that could play?

Kishore Siddhrypu, CEO, MaxLinear: So, Jee, yes, absolutely. I mean all our products are designed to handle now the AEC requirements and they always been. However, so far AEC has been super nichey. So it’s like a watch and go sort of environment. However, by the time you but now, you know, it is really a it is really remains to be seen, you know, who are the ones without these these beyond.

And so I I I didn’t believe that even though optical transceiver companies are looking at it and try to create keep their options open. So they’re now working towards creating their own AEC’s and ACC’s and so on. So so we are readily able to support them. And remember that the power is incredibly important. You can imagine an end to end copper cable and you don’t have all the fancy coolings and everything that others can do in an optical transceiver module.

This is really, really power consumption sensitive product. And we’ve always seen MaxLinear’s reason for existence is low power, low power, low power and high speed. And I think there’s a perfect application. Hopefully it becomes a big application. But right now we are just doing the cockroach things laying eggs that will become cockroaches later so to speak.

The survivor of the longest time. Sorry, got carried away. But yes, we are engaged in this product line. Okay.

Leslie Green, Investor Relations, MaxLinear0: And then a quick question on Panther. I figured you mentioned enterprise quite a bit there. I’m just curious if there is an application for Panther as well into AI infrastructure?

Kishore Siddhrypu, CEO, MaxLinear: Absolutely. Very, very, very, very much so. Look, if you think of Panther, what are the biggest drivers for AI scenarios right now? Power, power, power is one part. Memory, memory, memory.

We talk of high bandwidth throughput memories. How you get more out of the HBMs? How do you relieve the bottlenecks that happens in the connection to these memories? Right? And all of these are incredibly important and latency is super important.

So and how do you offload some level of inline compute? Right? These are all very, important factors. And, I don’t think there is a more sweeter place for storage accelerators and and smart storage accelerators than AI actually. So, however, it will require some level of future futuristic sort of engagements and repositioning of the product features.

So I think that this is going to be very, very important and for AI is very, very valuable. Having said that small cloud service providers right now are actually one of them is already using it. There’s one more is about to use it and there’s some big guys are looking at it as well. So I think it’s very, very, very, very conceivable that is going to become pretty AI centric product as well. And I will not be surprised if the biggest AI system solution providers are not doing one of these things themselves as well internally.

I don’t see why they won’t be doing it really frankly. That’s my own conjecture, but, so we feel very good that we will be in a leadership position in this product.

Leslie Green, Investor Relations, MaxLinear0: Thanks, Kishore.

Julian, Conference Call Moderator: And our final question comes from the line of Tore Svanberg with Stifel. Please proceed with your question.

Tore Svanberg, Analyst, Stifel: Kishore, I just had two follow ups. The first one and it’s kind of related to the last question there. In infrastructure, especially on the data center side, your two main competitors are building more and more custom silicon. As we think about rack level infrastructure, I’m just curious, are you sort of getting pulled into potentially developing any sort of custom technology at this point or are you still very much focused on shipping merchant products?

Kishore Siddhrypu, CEO, MaxLinear: Okay. I guess your second question will come later. Let me answer the first question here. Look. One of the most important what is the our incumbents have as an advantage?

They’re already suppliers to these guys, and they have caught these corporations that are beyond interconnects. Right? So for us too, it’s the same credit path. We are right now establishing credibility with our interconnects and we are showing various colors of all the technologies we bring and nobody can dispute the breadth of our technology platform and depth. I do think that’s that’s that’s the dazzle.

Right? And so, we are engaged with them and but, right now from a scale positioning point of view, you know, we are not doing any custom silicon like one of our competitors doing. However, we are customizing our offering to the differentiation requirements that these guys are looking forward to. I think it’s very, very different. We do not have an internal custom ASIC business yet.

We are still a standard product offering. However, the standard product offering comes with some custom features for certain customers. And so I would differentiate that customization from the custom ASIC business that you are asking. Having said that, have recently lowered up on some leadership here to do business development work to get business beyond the interconnect because we didn’t think about it. Interconnect is a bookended solution and the interest having the third player in the system cannot be just be for the bookended solution.

It has to be for something even more as a strategic vendor. And I think that’s what we are working towards right now is to be really a broad based strategic partner for these hyperscale data centers so that buying interconnect is just a face of complete. It’s not really the be all end all for the company.

Tore Svanberg, Analyst, Stifel: That makes sense. Thank you.

Steve Litchfield, CFO and Chief Corporate Strategy Officer, MaxLinear: Thanks, Troy.

Julian, Conference Call Moderator: Thank you.

Kishore Siddhrypu, CEO, MaxLinear: With that, I want to thank everyone for this call today. As you have seen, we are really excited about where things are headed now, the recovery in our business generating strong cash positive cash flow now moving forward. So and further in this quarter we’ll be presenting a number of financial conferences, virtual events. I’m sure where we’ll meet again and the details of these events will be on our Investor Relations page. With that, thank you very much and look forward to the next meeting.

Thank you. Bye.

Julian, Conference Call Moderator: Thank you. And with that, this does conclude today’s teleconference. We thank you for your participation. You may now disconnect your lines.

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