MXL - Earnings call transcript Q1 2018

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Operator

Greetings and welcome to MaxLinear 2018 Q1 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Gideon Massey.

Gideon Massey

Thank you, operator. Good afternoon, everyone and thank you for joining us on today’s conference call to discuss MaxLinear’s first quarter 2018 financial results. hosted being is call by Dr. Today’s CEO Seendripu, and Adam CFO. Spice, Kishore prepared After take questions. we will our comments,

to statements variability risk may XXXX growth Our in the for tax number currently expense security risks risks relating uncertainty, meaning materially other not today our of increased opportunities expense, of second variability comments include from interest applicable laws, forward-looking assumptions the XXXX arising well and as tax rate currently results product to limited assumptions expectations, including and selling operating gross geographic These involve including average outlined our markets, substantial relating factors forecasted trends, we and in price statements and margin, that our and including and concerning revenue, our Actual statements may risk and quarter differ customers, expect filings. accuracy opportunities guidance within trends, on market as our develop expense, statements reasons in numerous concerning results. forward-looking potential without and from the our dependence of expectations. as quarter SEC competition, various uncertainties other revenue second statements concerning limitation, and

today has quarter the obligations Risk expect March file statements of revise captioned For ended to or are Factors as XXXX investors forward-looking and upcoming statements. forward-looking for and December statements, in to no forward-looking XXXX XX, shortly. uncertainties in previously a we our MaxLinear we which update year detailed the XX-Q filings of potentially ended our discussion to any Form Any the Form made encourage our XX, of review and risks affecting for XX-K SEC these the filed section

of The first is Relations quarter earnings in website section available release maxlinear.com. Investor at our the XXXX

We in because and expenses, financial for inherent website. net reconciliation with net and project do do the margins, In reconciliation loss measures We revenue, loss addition, uncertainty today on loss per share the tax income periods income income margins, associated non-GAAP our a effective guidance rate, including Non-GAAP future the of presentation metrics, GAAP of GAAP its investors certain a certain operating of release historical press including discussed non-GAAP of ability stock-based pre-tax the reported associated financial gross non-GAAP not to charges, or on available tax future we GAAP compensation presentations results. both encourage operations, review and not replace our effects. basis. or our financial net or from and detailed MaxLinear to provide

providing are perform a business. to comparison meaningful this management’s in manner We information to results of analysis investors of similar to our operating our enable a

call website now, X is me over the being And available Kishore call to will this turn webcast weeks. a Lastly, for on our replay CEO and be Seendripu, let of MaxLinear.

Kishore Seendripu

and Thank everyone. Gideon, today. for afternoon, you all you, good Thank us joining

significantly We XXXX is report year-over-year. are X% which million, approximately $XXX.X about sequentially, of pleased XX% revenue up but is to QX by down

by a tight revenues, infrastructure data, customer QX strength management. we broadband America weakness and posted XXXX, North growth China of backhaul in primarily margins home some operating reversal optical, witnessed we and QX, cable strong Terrestrial were which connectivity a operating During wireless in In expense applications. product and legacy offset rebate in Tuner G.hn by mix, one-time driven satellite favorable accrual

ramps. win expenses the continue operating as manage preserve to of new leverage the business our designs navigate to product through we prudently timing uncertainties even always, we As in

QX I would into view our Before step of and overarching back to dwell highlights, provide like portfolio. I our an product

of with scaled in communications a and the the world. constitute and end a as and underlying our slow that ability value, products view have increasingly well infrastructure high industrial connected theme platform high-performance we of revenue invest growth growth portfolio, diverse revenues. MaxLinear’s have excellence high comprise and markets. and unifying at the Together, home These revenue network analog, company look we as infrastructure stable they products As both technology addressing components multi-market large a to centric

Over the on believe in years, growth last embarked XXXX on we X to several we yielding are new that revenues in infrastructure have primarily initiatives, track begin onwards.

nodes X.X next to the second factors Specifically, throughout optical cable on distributed full active connects In on X.X nodes to initial a have installations of operators XXX-gigabit our interconnect integrated that to we fiber upgrade CMOS, duplex view passive required sampling cable in and on instill growth homes. the largest network node started The resolution Full distributed the OSFP our milestones, our fiber DOCSIS connectivity, data infrastructure. markets Communication rely XXXX. chip our data also Having PHY communications high of timing center demonstrated wireless transceiver fiber opportunities major the spawn first coaxial This are QSFP-DD, with demonstrated cycle. power The growth inside cable crucial systems beyond center half center fiber broadband will industry’s remote we of of PHY and of these wireline the OFC, exciting fiber high-speed and interactions win leveraging position which moving that base revenue in drivers interconnect exciting XX-gigabit in center we companion good our In we four ongoing infrastructure and we terms with at connected subscriber strategic remote upcoming into using capacity that magnitude with fiber-like remote TIA core to funnel factors the performance growth turn in By in in evidence homes. revenue investor several QX, of for the and and to as several wireless form diversification product their we at infrastructure data we PAM-X FDX QX system PHY, home family. look suppliers Duplex, technology a cable upgrade cable increasing or COBO FDX, example said laser first control, trends further exist enables newer family type industry’s confidence there cable low attractive or in investment supporting the next-generation have believe FDX network, can infrastructure provides This Optical create of node these Fiber applications. a and DOCSIS that infrastructure, will success device, design that XX-nanometer existing network opportunities XXXX. At fiber our of the subscriber hyperscale provide nodes is strong that revenue initiatives March, data Conference, see markets. beginning products are factors enables solutions in highlights better ramps the which were in silicon data stage and services leadership we in a of inside a three the existing our platforms. and node entering of

engagement fiber announced Tier fixed namely broadband wireless This operators alleviating we infrastructure access infrastructure, we of fiber-like over continue product of across of per settings. to supporting alternatives. performance second gigabits to X XG AirPHY for and to XX equipment for makers costly levels of particularly virtual a our network Additionally, delivering deliver fiber be backhaul, capable wireless the recently X deploy operators verticals, densely is cable, the important wireless new populated throughput In all urban with seeking need in encouraged solutions. strong by wireless wireless coaxial

and equipment market. As mentioned expand networking the maker analog our our bolsters for communication we recently formal products. significant partnership world’s us largest our to backhaul with large earlier technology wireless in platform agreement the press is This our mixed release today, signal a in entered into ability for confidence into wireless milestone wireless

quarter’s of first on the notable some highlights. to business Moving

X% tuners. connected strength cable approximately home G.hn data in MoCA offset and in America sequentially, weakness Our and revenues legacy decreased North satellite, by with

scale telecom deployments. content G.hn challenges home our are strong, to and connectivity with utility to Our business adoption macro the video, the facing subscriber remain smart and European in market demand while U.S. we broader strong XK owing in continues market satellite losses. delays of revenues In powerline

Moving declines optical in expected progress continued a mile infrastructure, increases and attributable which China as revenues last expected they down our XX% year-over-year solutions, on sequentially, were a we QX on were through back while approximately access basis. in resume sequential to year. softness to are sequential grew modest growth step to the infrastructure X% The their

set backhaul we QX, aggregation functionality for wireless of continues strength Tier announced radio business multi-gigabit and to bright broad wireless in increases enables OEMs. that microwave posting the driven spectrum. backhaul first Our XX%, sequential strong links infrastructure Relatedly be market only transceiver spot, over licensed X than of an a across wireless in CMOS the increasing channel backhaul enabling wireless by more industry’s

a for related opportunity data the our wireless and knock-on cloud ramps MaxLinear, continued with XXK noted world. with regards Optical future throughput growth second new per rate the X-gigabit Chinese XG design delays for transport to bit SoC DSP wireless has effect the the TIA the slowness driver microwave in the for market microwave announced of our an also the in optical, supporting We remains to had optical center exciting previously point-to-point excitement wins. metro QAM-based highest PAM-X modem In solution.

X% our touch-sensor decreased to the ramp handset overall products and XX% down by driven revenue for primarily in Lastly, revenues sequentially multimarket industrial of market.

as deployed on on reaction Pi Raspberry and low-power by platform. the devices We platform, recently are FPGA PMIC the compute market such encouraged universal being announced

We set opportunities of are excited the these products with diverse serve.

content We large at silicon as diverse BOM platforms road by end as existing platforms. increasing on and continue markets high-performance this expand our our well to new map analog the entering

our has broadband over with plus transforming to and $XXX our gratitude and IPO evolving Spice, in Xx call nascent Before a leader, an CFO, deep to from importantly, high-frequency partner from generating network colleague than invaluable for the XXXX. less industrial that to infrastructure to turning interestingly XXXX million revenues has its analog been and X map operator our He way well integral in Adam. company, SoC strategic I to a and wireless he the like large of my in and journey and Adam road MaxLinear company heartfelt XX-year would revenues is fledgling on been Even a extend wireline extremely one consumer becoming multi-markets. to mixed broad-based also in market-focused more signal

in him this progress dearly. solid Mr. miss grateful new over a for make for and Officer, our CFO will Chief turn the transition With wish of period. the financials to helping the him our Adam review very us we As and Adam Financial Adam, best a succeed we’re very Spice, We hiring me that, call all to guidance. to let capable we towards forward

Adam Spice

GAAP connected step-up between XX.X% bonus and XX.X% XXXX of with for revenue XXXX. $XXX.X of QX referenced On will the further in the are and assets. stock-based million, a discuss $XXX,XXX acquired our million MaxLinear our included expenses PHY margins in expected by GAAP the first review plan, fixed related $XX.X on purchased Kishore. reflecting This to for PHY depreciation the more up intangible respectively. the Kishore. reversal and platform. $X and million, rebate mix $X in above duplex stock-based cable primarily our stock, be depreciation of in million, our margin related GAAP accruals primarily overage $XX.X and quarter than to be bonus remote settled and under our our were XXXX. which of guidance, the in bonus accrual and quarter were previously operating and Great. intangible approximately results Payouts guidance million, of amortization chip issued expenses infrastructure range was GAAP XXXX million out approximately a expenses to compensation gross $X.X and operating respectively, XXX and commentary our XXXX. to gross to of fixed expected headcount product quarter for the first stock-based chip. operating and non-GAAP then and stepped-up amortization prior and guidance QX non-GAAP Non-GAAP delta slightly of favorable million operating non-GAAP which QX expenses home GAAP QX sequentially remote gross are related was performance XX%. due referenced Thank at at purchased of GAAP primarily acquisition-related gross expected if compares XX% due below a was margin million of you, of was the accruals earned, of to revenue, assets. acquired our of $XXX,XXX the of end to compared related $XX.X margins overage duplex shares guidance of full the assets expenses GAAP prototyping $XXX,XXX Rounding I our to $X.X on end The stock-based prototyping first million previously non-GAAP the outlook cable full approximately quarter plan compensation of to guidance XXX to XXXX, of fourth The to expenses, infrastructure legacy first assets relative $X $XXX,XXX was in

continue key evaluate to our We long-term following recent levels to staffing particularly acquisition our near-term balance strike between globally, staffing and a operating initiatives. leverage driving growth activity

balance our our restricted cash to flow and million and statement, $XX.X sheet cash the decreased to approximately Moving cash cash, million. balance equivalents $XX.X

Our loan end cash the the through million loan. QX million. million down balance $XX quarter $XX term and of our debt reflects during position to ending This the approximately to effect towards total the brought XXXX $XXX prepayment our in of prepayments

quarter versus in fourth million $XX.X XXXX. sequential generated the The from QX. strongly debt activities $XX quarter operating stranded million receipts Singapore largely linearity in holiday, over far Our decline was in attributable $XX quarter-end in of the a in have cash enabling quarter operating thus over was generated collections following the in QX first quarter-to-date cash Relatedly, to bank generated the revenue a approximately cash the rebounded flow activities million XXXX cash in quarter and flow from further boundary. which repayments the

to target are cash of new and de-leveraging comfortable the aggressively We continue with approximately balance million. $XX focus on

AR XX XX is outstanding prior the high sales days the quarter Our more days for function which was than of first the approximately quarter-end or a quarter, days balance.

approximately our the of $XXX leads be to model in X.X integration turns in target Exar with of me guidance. better That in second the of XXXX MaxLinear’s X decreased efforts compared the quarter ongoing $XXX turns align turns. X.X revenue inventory a quarter inventory million to to to currently focus fourth turns We quarter first million. are approximately and our Our expect to to

and to offset tuners approximately solutions stability our of ZTE continued and We and to as connected shipment sequentially expecting approximately particularly by contributing the modest we optical, mile referenced of connectivity satellite exacerbated the our back ban connectivity. touch-sensor and gateway infrastructure approximately ban, previously and expect industrial Within QX, connected strength to multi-market revenues; ban overall overall China sorry, to X% of in in G.hn and for account solutions to and in ZTE power to overall access in represent by roughly ZTE of interface infrastructure interface our offset decrease contributing increase decline XX% weakness in cable increase satellite impact revenues expect and platforms we X%, for home, Within which increases in on XXXX. of softness in X% shipment offset we be XX% products revenue; relative is entry home XX% industrial revenues our sequential to level and revenues. more multi-market, overall handsets well and shipment broadly also management is growth the multi-market $X the are and XX% approximately TV double-digit in a million by MoCA estimated growth continue weakness within ZTE – data effect. Within a modest infrastructure strong about cable segments. and weakness wireless expect as – in ban PMICs in both and last with shipment compute infrastructure, Terrestrial in sequential industrial the in The to the as

revenue revenue. GAAP profit non-GAAP to We to expect margins approximately gross gross second XX.X% be of margins approximately quarter XX.X% be profit of and

vary other on profit depending gross minus could percentage factors. or a margin As mix product plus reminder, our and forecast X%,

the infrastructure goal forward development delivering growth line programs increasing beyond, as strategic and XXXX operating fund top look our attractive business. focus half of in and into targeted particular leverage the we with initiatives to continue on first at We the of

fees GAAP As such, and coming $X.X professional operating we to million spending, XXXX payroll. QX approximately million, approximately large $XX to from expenses mass decrease quarter-on-quarter lower with expect decrease

to $XX expenses operating non-GAAP GAAP with consistent the down sequentially XXXX million QX trends. $X.X expect We expense million, be to

expect tax be to X%. non-GAAP approximately quarter rate in We the a of tax expenses $XXX,XXX GAAP and

million. and managed decline commitment quarter faced top results to in other quarter expenses aggressive be operating the controls execution XXXX – a from well a the and of demonstrated. expect company and in across industrial, which to positioned as closing, near-term diversity portfolio wireless and has continued but the analog of in We QX outlook, benefit to mixed depth our to for we’re consumer, our the data interest the home, We we follow on are reflect represents current diversified de-leveraging. networks slight $X.X line, signal as growing connected MaxLinear’s diverse capacity growing In and tight and our we’ve applications. through technologies, infrastructure our believe automotive demand across continued our expenses wired Despite shareholders encouraged multi-market set that as uniquely by high-performance choppiness to been as enabling product solutions greater ever and and a

of take my appreciation And this like And would in last of many like years express relationships and call the with those on MaxLinear, questions. to constructive that, Operator? all the continued over best call. this success opportunity Lastly, developed the open future. and sincere the and I earnings and final with to to the for call the MaxLinear, you, X to with is wish my I’d thanks I

Operator

[Operator Instructions] Our Please question. question proceed with your Svanberg is Stifel. with Tore first with

Tore Svanberg

you. thank Yes,

June the on sort I QX believe there? time quarter? question last First home, you other business things? related this sequentially. MoCA the and both down for the for And mentioned Is guidance tuner coming what some going MoCA MoCA specifically with of and on is to beyond connected prospects What’s

Kishore Seendripu

an going seeing product about MoCA only we get the DOCSIS of is this used a the we on to – overall from to our is MoCA version transition being XX% of where close Tore, standalone are X.X original to Hey, the platforms here be what ASP integrated on that product. Kishore. What’s

on platforms towards the the a of in seeing to rollout ASP operators the the reduction MoCA and the with also are new home, inside revenues, the we delay As of telco result, to the due submitted contraction end a year.

is that starts are stalled should decline of is expectation will inside strategically a platform I some pickup infrastructure market the manifesting networking MoCA connectivity the very we year today in mentioned the new as Asia. the to the but seeing telco latter the on a revenues last company. primarily in operator we MoCA the the guidance, technology that access. My revenues for hopefully platforms, the is inside the the You rest want of important MoCA-based primarily XXXX revenues start be mile back technologies, last in the do of And mention to for showing and mile It’s in MoCA as Adam half ramping that for decline. access his c.LINK home the seeing expect grow on

that So a it’s that terms want And and carrier all-in-all, it is going timing in MoCA, adopted the from to telco front year the there of a I versus healthy mention has in connected is got at to it. a is end a as revenues of MoCA home MoCA while on prospects actually non-connected you also that home. look be connected market, has home there ramping of uncertainty to very the

Tore Svanberg

of for are have next impact the this very of math, going ASC last it XXX, about to quarter going kind are apples-to-apples through And type helpful. quarter, could expecting just my talk what had we an you an and Adam, that comparison? you That’s just so the what as follow-up,

Adam Spice

Yes.

definitely could XXX, the impact. it XXX, adoption have So an of

strategic in QX. look kind of down a the lean are If at the end channel we the into where heading at inventory took we direction of to you QX,

not inventory an you comparison, back would with So distributor of the wanted change, but for is will – as apples-to-apples possible if in ending I under in because time be any at channel it. to and revenue get what that the recognize was we the inventory at channel channel year the able to the – have to look any kind little

where of it would kind – So, to normally inventory of and we want be this I took basically customers think way down we distributors below sitting.

then leaned and we the in some it was So down channel there quarter. refill first

the Now if there and approximately a of – math there $XX.X if between wanted result impact as in you to you to want adopting an about XXX just QX. our to of million absolute get benefit was

million say at ended kind we of say was looking would for And comparison think of March, you if XXXX, you would at inventory the of a there to XXX. QX the what no what looked channel $XX if let’s note go of which that and at about QX Now time. will look level QX million. now went about is that you an we on the from new compare that normal XXXX, kind back then in at deferred was, and was levels, normal million you and you end about that longer Q revenue $XX of end if apples-to-apples the and do the where back there from be deferred distributor the to about at at $XX recount if revenue of went It

the way have part net that that a just about you some and most, is inventory, the build, we to in to in to a newer bit of related year apples-to-apples ramps, more of phenomenon. beginning of but and of would for of kind QX XXX the really channel prepare platforms will, is explain I have ramp got new $X that’s it’s fact million as little of QX do you think to And last that QX some we this are implication comparison a year. change cogent an of the actually So, we these if QX kind think

of are inventory the seen the you the effect then XXX. much pretty that end normal back their as levels levels If at you QX, believe of now to we do have

your speaking, grow stasis, it reflect should the much for and revenues. of magnitude overall your in that and channel the fact pretty you growth obviously kind grow relatively your then your growth inventory forward, of except as Going be business, levels

Tore Svanberg

will line. That’s you. helpful. step in Thank back I

Operator

with Ross with is Deutsche proceed question Seymore question. with Bank. next your Please Our

Ross Seymore

a to Not The weaker guys. Hi, the than repetitive definitely after is guidance asked what be Tore terribly just but Street expected.

in through what went the into The moving some and surprising Street of I expected heading what second quarter to negative if anything assumption or is guys XXX sequentially But into You the there. was then what’s clearly guess versus that the parts positive quarter? ASC you the

Adam Spice

Yes.

to way So, off recognizing recognized your revenue of part think answer you first sell-through, so, revenue the adoption, we of I the think this it we we can held before you are look the have question, way, essentially on at – right. again, if is last year would

levels we We any event. normal And inventory are QX. lingering back the see buffer we of a we channel mean, kind it’s of QX don’t QX that So, replenishing actually gotten was the in the to QX. was of stopped level. of further distributors benefit again, in again as the it to have kind and a so effect I refill further of snapback and the just kind into channel

more view. see the So, effect you in adoption current of XXX any our shouldn’t of

we our The anticipating were it’s second ended into likely where was versus more delta side kind overall probably that the than in provide that had today, with any we softness up you I think the Now in higher for of what had were announced for line we somewhat Street softness QX. didn’t The we expectations We quarter. were look guidance QX. what right on the number. Obviously, guidance expecting the And changed what we a at the if with and quarter MoCA Street current now, again, going

– adjustment of we I had think a we effect. of were million couple ZTE related to also dollars-ish

we bit multiple more ZTE lines of affects across of kind softness ZTE take to it we than guide MoCA in optical by China the a more exacerbated overall Terrestrial back softness things and step side you continuing, when on have normally, so because, it’s the bit So, is in softer sales product New more QX TV a normally and would the company, It’s and just usually and the expecting been little we we were Christmas the of related little to but in first to forth, delta. have business much half and the half primary the Year soft. that Terrestrial explains be a pretty second bit it expected stronger year period than and Chinese had

So few I have got think dollars you million and there. here a

$X again have ZTE related You to a dollars got in probably million million the few aggregate.

couple million You dollars continued have got perhaps of optical of a softness.

I of You those million couple probably say, couple weak had of really dollars maybe would tuners MoCA and another of million. and points primary, a are

So there there like $X of million million $X – roughly overall. MoCA, million, is tuners, then four is a China million from couple million from optical $X buckets and $X from ZTE, $X from

of of the I months. a that’s rough what – of to kind has reconciliation do there over anything think changed is few you... course last Kishore, want you

Kishore Seendripu

a think also well and of some these that I all It’s we No, is absolutely pieces softness saw correct. bit some in little America. satellite as for North

pieces, those they items. familiar So add the up if you are

of they up this my Having times I about are excited – are backlog start the between strongly what aggregate, wins product ramping remarks, up However, delta. to are finally a infrastructure the the that growing while those platforms the It’s where picking really we we all very new are and take strongly but how all all at pretty The that, design sort Street added long you the these right lead way generally and ramp in work, the number design said also now. and start excited in way. we like evolves. would have markets to them of extremely sluggish estimates how they platforms, they’re of of that to and ramp, about today. strong in if uncertainties is they guidance design got argue really inundated markets with the new at are stage, we are are And lots a have because in have of timing expected and to affect are coming still wins wins understanding we our the in we are these

You had can expected three to originally. later also argue that, four than that’s almost quarters like we

are tuned So, markets trained and that the latest to we getting it’s entering. just

Ross Seymore

one last I question guess for Adam.

that there and mentioned was a I On away quarter? Could in the assume benefit quarter. goes us you margin first side, that in you that the gross for the second size one-time

Adam Spice

roughly, million QX the is mean Yes, call it impact roughly, of million I $X the in rebate – was about about $X reversal.

Ross Seymore

And thing guide? down margin second is leading that sequentially in the only the quarter come to gross the that’s

Adam Spice

contributor really I not a of the the a mean, look function if lot seeing That’s It’s a in products, primary really are that. of margin. Yes. you movement we mix, gross to right. across

that was then reversal that swung a as long as only recognized that not it, in change, QX. really the there So thing is QX rebate is mix really QX, significant to

Ross Seymore

it. Thank you. Got

Operator

question is Capital. Suji question. proceed with next with your with ROTH Our Desilva Please

Suji Desilva

Hi, new good Kishore. there. the role Adam, Hi, luck in Adam.

So, reduction you in from able here, the to opportunity how more there of guidance the much the acquisitions? OpEx integration is get were

Kishore Seendripu

So could that. answer I Suji,

seen, discipline. you control As always right. that have we shown spending, one is incredible our And have is we thing there

the the the trending really and we year. already, expenses are if end last continue picture, of exception look the keep to to primarily of fact the non-tape-out markets of one I year think know and OpEx QX, any If managed OpEx product smoothly those pretty without I you will squeezing see years, you related really part are on the are the infrastructure at completion we how from hampering that in OpEx the very decrease we and one tape-out be this we much the have in X of out you and year with at improve barring we to the our happy think will so downwards all we coming to execution, for through the but the our tightening because tape-outs going investing sample in subtract in been have that we which of that have that comes

getting of So think the I us. expenses, those are big behind part

benefit getting So process side, an those are operations integration items much on – big the as much R&D behind the of the us. we just on not the from more but

Suji Desilva

is the guys broadband, you that something then X.X the that ramp be And Would the a your can DOCSIS that you to progresses? be on year Okay. steady smart talk or that? home as to contributor and should leverage about lumpy

Kishore Seendripu

seeing a stable base Normally, it, a QX because not is markets. strong particular, cover tends of be about developing operator cable we So actually, it’s to items But our of data revenue actually, cable period peak are we if think really of one did you presence a in scenario. the window. in kind the

slow they it’s – delaying DOCSIS a are has the X.X rollouts very that ramp are started. However, and and

result, of a over DOCSIS there operators and is concern ordering more slowing. level of the some X.X to patterns that anxiety As DOCSIS X.X are therefore and switching are

conversation we So, that right. having. net One I they it, so two are of be in where them could terms is benefits see are think we today are there of they out –

other end that, in strongly be are towards is certainly new the really year. a there a X.X of switching we The standard, to snapback and the sets in thing because could ramp DOCSIS increasing volume

it want don’t really see I but that want potential to we X.X and towards latter DOCSIS happen you, for XXXX. to then half to ahead ramp So, to some upside of we because get that communicate expectation, of there will the is start

Suji Desilva

guys. Thanks, color. helpful that’s Okay,

Adam Spice

question, for next the Ross. before we just I jump into want it to way clarify the By

$X I in effect So background, the more was not in of a data actually reversal million. little rebate $X.X million, QX the got the

correct $X.X is the number. So million

Operator

question your next Quinn proceed with is Bolton with with Our Please Company. & Needham question.

Quinn Bolton

guys. Hey,

Just guidance. the or a infrastructure more on I clarification bit little color for was hoping

I said only if think script, sequentially of $X going think was going was X% weak down to correct, and be was be less you think business said you that in In sequentially. am than optical the March. million to I I part optical the I it’s the

that sound it weigh doesn’t infrastructure down. So entirely, down What even infrastructure if QX? in sequentially we is want takes in else to like

Adam Spice

that’s real bit. go optical so the – down a So, does piece only yes,

revenue down. So, going that’s was quarter optical in the the total so and in $XXX,XXXish around QX

decline. about it’s it about with, $X.X begin so $X.X million to down, there wasn’t much but Again, million sequential step some takes is So there there.

The comments, video compression ZTE chips infrastructure was meaningful kind infrastructure we so also my of of other I bucket, included as multiple Exar more in and the prepared business. the piece factors are power that of in that from our the so layers acquisition, management have mentioned there in, impact ZTE across of in some interface

QX, part few different different there portfolio mixed about in a then then came QX. just across but bit little of a like video kind of is the stable you miscellaneous of that’s back to pieces kind it’s weakness if it that That across compression it, there QX was It’s that over. pretty bit areas. and of just step So, a of decline. looks taken is think – But

Quinn Bolton

third of do quarter consensus the I how excited of your consensus, half seem you but the the is recent call it in Street fourth question kind half out the second history volatility given quarter the guide second where sort or mean, about And about or ramp, with comfort you Okay. probably ramp the actual in a versus row fallen guys The into forecasting has estimates? get results we do below

Kishore Seendripu

I Quinn. on good with there will developed have think be, gaps. but estimates disconnect Street own we where even The we has the It’s been process, within believe a our we that very versus do some some question, estimating

fact I our think attributable it in the business. got that is multiple places largely we’ve to

backlog are in a going from be then business the that’s And happening call. backlog would perspective and so in, acquisition before our the Exar transition pretty entering the strong the

dealing that details, becomes timing. there I I that through going think estimating long are rectifying, we the ramp are larger, product are think we uncertainty as as new still ramps as working be is however, with, it. the error So to and And we’re that on some there business

on on it I and So ourselves at are this this hard this also happening. keeps we are point, that, we think as very at you as cognizant stage, are also about why

you we guide would better at QX I at really exit similar but some to more that I it, I QX from numbers, range, in the really think just learn and this want if have year that don’t beyond a situation we believe growth to exact normally color. we have the that, we However, revenue way. the give as look meaningful start that in the to And though up know looking QX thinking look we picking should that but stock don’t past. I is of time our guide because

and we are had that products. do that business, some seeing just is business and Terrestrial our the working have it, think we So volatility Exar when I of and are ramps size but a then hard timing we this in through there and uncertainty ramp within the on the look revenue certain it’s at it

it. definitely to So have we a job do of better

Quinn Bolton

Great.

to not ramp. single probably I me ask product MXM design wanted wins. seems too just platforms, infrastructure guys ramp, but solution the probably the node to doesn’t say that negative, X sorry doesn’t duplex about to that think you talked And full fiber the the again, ramp I sound about of new It some

So for of it looking comes a that infrastructure products. like that seems infrastructure ramp lot from you are in wireless the

in are in percentage You March double-digit XX% June. up sequentially and other sequentially

keep wins But up some working already base. any strong design of provide are you more backhaul? color will is base microwave wireless off in healthy a pretty on a So can you that there those access growing and

Kishore Seendripu

Yes.

is business seeing of momentum maybe like we win the of larger the same the market I into we word, now. part for is telecom some preparation the – a more development is on wrong some in infrastructure, who think beginning finally beginning transceiver to are And spontaneous are Europe, looks some really is OEM wireless, on had growth design the froth some because – they kick the benefits the to right product our some time, in up It in backhaul now. the and level is that RF or that there coming backhaul microwave steam wireless picking they are back seeing the froth that. now and At big pickup organic XG place wireless momentum. own

I ahead, backhaul backhaul is there transceivers. more and of growth there new the primarily modems So revenues wireless are RF microwave think on

script, with good. So solution, wireless And but XG OEM future. major our in announce, in backhaul predicates a the for there did the engagement we saw and also access press strong are the announcement about the very a you we release as on feeling wireless in our wireless partnership

So you big relying technology-based in also primarily really we to But a driver. the are wireless c.LINK product our on mile MoCA last are in expecting market. on the line up are growth the come right, access Asian as secondly, infrastructure, backhaul we

some design of begin and So there well. there got a money we have wins number generate as to

wish We out lag I look cannot side, a optical now So on to are but two that’s you want we for. had think weakness the we those on. in the going count that telecoms

of half would And announced – OFC, you wireless products latter fiber the so first infrastructure layer in last access DSP wireless a the which in cable XXXX demonstrated the at to the next then XG PAM-X will – layer then and pickup to at the XXXX, from growth, next of move have be and we following access the end a growth XXXX you as the the growth, mile layer see hopefully and if XxXXX-gigabit timing node. of announced that

cadence. the that’s So

You window. in as really over next starts want to the categories every infrastructures look one X XX-month at ramping months, product XX the new to

in So, activity in revenue these it’s our the growth we platform allowing is the invest full that got and new a to have of in connected investments infrastructure also what us infrastructure duplex base and extremely we will new in said profitable spawning are opportunities that home like spawn markets are are they while script, connected side. strong we through home

pipeline. feel win excited. all-in-all, think the in design lag we are case a and very is where is behind It the I we results always there So the that

Quinn Bolton

Kishore and Thank Adam. you, good luck,

Operator

Susquehanna question proceed your Our Christopher Group. with with Rolland next International is question. with Please

Christopher Rolland

Hey, guys. Thanks Adam. the for question and congrats,

you. miss will We

I accounts think then Maybe seems Thanks. really actually jump. just much back-end what DSOs hit also So and big Singapore how the thing and you could mentioned orders. then of was, receivable, and Singapore you loaded receivables It a here. customer why breakout holiday timing like so that

Adam Spice

Yes.

$X Again, in probably was in million at a Singapore Singapore quarter. holiday that function around the the there quarter. of the – the holiday just a roughly was the itself end or bank it million was $X So of bank around

on agings. feel thereafter our good about and ended we up it very shortly we collecting at we So, are where

a prepared collections and have very like I $XX had had never May, again, incremental strong We look very, to good. April our mentioned the And in cash remarks, pay in problem agings. with we really down us early which allowed an They million. still

just we’re So It’s at kind we of feel good about unfortunate where there. timing.

color great quarterly trying kind boundary. lot your can’t payments of held back-end caused they of because seems the that predict I is. a answer really to that like customer’s it their the to with what to that as mention over loaded, you behavior to far Not the on crawl we’re fact As

their wanting have each kind sheet either kind of own of to incentives sheet. or product a balance our from I customers less on balance own think has the cash more and patterns their their behavioral also for of their and

kind weird quarter where So and things as the of can’t through I in together at we but it QX. an spike a again, odd of kind normalized just it the things a – resulted progressed of was of came couple end quarter,

Christopher Rolland

the that, drop? terms the home walk we we something Okay. are connected what’s an just as us things perhaps to from as have can related some that chunky look And digital it disappointments happen share didn’t get what you I of kind created – is the causing us kind moving through of kind X.X biggest of that this of to the and were that or mostly the that that happen want? What of as what move of move segments you big year-over-year the kind I were drop? parts at issue know did thought year-over-year Did that it then quickly moving here channel is mean you you to and was DOCSIS are, in digital. biggest stacking? as analog

Adam Spice

Yes.

biggest the drop down at piece. tuner is connected year-over-year you The If piece pretty the right. substantially, look is home in really

been old the the kind you long-term which to, a want home turn look can for we the focus in had you if strategic areas in saying, areas connected purse, challenges So aren’t the into ear our of have really sow’s us. a at have silk where

MoCA MoCA, but satellite to areas tuners, that less you happening, gateway discrete tuners the of the satellite are those – more weakness, and have the if so and gateways. are going are discrete the then So, the on

about tuners into built year-on-year the and of it’s – our $X quarter this year this or so last guide. declined time amount been the $XX – in decline, to at current million second that’s look that you if around million So were approximately and year,

ended being had in million you Again, a about decline tuners year-on-year business. the our that $X up So tuner margins. gross lowest

margin that off other mix. replaced to and drops by as revenue, actually gets it’s our So gross beneficial

a perhaps of a have then silver of and at little year-on-year running compares $X this about, now of if $X mentioned would the kind look fallen little we of over that’s the that And kind off you than more influenced liked again, a below have also, million parts other digital as So you the lining. bit million. between would and was say about $X I running million last And before, stacking, little kind channel it’s a time year. bit

question having takeaway what’s that has from I North hard so the is visual satellite of the think and right? not a in of is very that? driving design America. availability done outside And ramps got said main the OTA There again use. that subscriber have drive XK losses. mentioned this is But level They of time, wins higher America deployments content have we to North as securing Kishore well upper been or end the

that going look actually, has are our it we So stacking said up, QX. give to we way forward guidance now, will step at business, QX now don’t be guidance to should and look that we Kishore we when I very QX. to the give digital again right not start say a and for healthy

in recovery much first than not half North looks much of put better deployments world our the digital we the based focus. as the So, that’s in half where the in and the second channel stacking rest the as on America

you in then and seasonally again, tuner in also – more even and right. Now, more business, looks healthy up QX, driven, again also step QX at that’s a pretty look to if the that take

have of half we time be that the the before, for strongest the looks year business to our exception. of said business year second this no So tuner and is

QX. the on doubling up looking QX tuner are than of We more and more then at to even QX in increasing staying and side

last have those they second like is the to rebound in as sequentially. to am some tough, I QX No, I Do some they saying businesses get those actually consider peak where year? get far year-over-years now, the forecast – was increase what to don’t. to right want they but referencing. But that of the doesn’t last as the It the generally half levels, of have been year. back in the back areas it they indicate were start to you peak year, if So, would that does tough them am but get for

higher I business that’s fact ray in of and – as So, kind little margin bit other gross are these there the the there products, with there things through going margin that sunshine a a kind we we profile transition. and way our higher home is now. the it we see overall quality, little of is but think Again, of of connected infrastructure remix that help

Christopher Rolland

Thanks, it. Adam. Got

Operator

Tore Our Please Stifel. question. Svanberg question is next with with with your proceed

Tore Svanberg

Yes.

before I So you, to venture question, I Adam ask new just just question. that there. good wanted and I in luck And had a follow-up your thank

Kishore, talk us lot on uncertainty design there you a but timing far new of you So as the the you second as rank products? half, and about on where wins is infrastructure least for feel relatively better is timing. for Could at

Kishore Seendripu

in access the where those to last million, a falls have business doing getting be platform are year. time done. G.Now, have technologies that $XX year. though this wins that half designs even more we to So, last do overall the right. mean, – in are I the start design about I they growth China given coming, wins. are powerlines and mile fantastic uncertainty compared sporadic in range is talking wins design basically feel all and mean, of this those, the the in which always slated There are – actually, XXXX. The uncertainty on last primarily about are feel wireless access design are these there backhaul, is the latter is in of and very $X we the long technology They we but where of good Asia. it’s kind mile going because million using I are also timing range, And because to we the in is G.hn I

those and so forth, on but I where have they G.Now space, So taking infrastructure however, operators the Thailand wondering stalled there so Telecom am back. the when just are wins, product at and and in Korea things in come designs

telecom G.hn I technology G.Now these access the related it. access the operator wireless the to are with but based uncertainty we see how then or China and play, technology. So, there on is mile think still frothed last last in uncertainty businesses the remain lumpiness call is there to MoCA on operators still mile as And we on some

However, the is place, is wireless in there good standing reasonable and backhaul. in in good ones wireless backhaul quite are – infrastructure there the upside

access So, going into many of we this last that will half are uncertainties year. the hopeful the overcome mile second in that,

Tore Svanberg

And guess, to question, second how is so. at I any $XXX,XXX visibility last now, obviously, just you excluding Okay. the have on business progresses or optical half, down Do that all ZTE? one for

Kishore Seendripu

the in action and ramp operating my taking sort can we consider see But manager, in we book, designs Whatever new right process. an this. if I trying preexisting technologies. Tore, telecom So as me the all-in-all, All that through those side on to noise really secure of is now. designs stalling shipments the market are new telecom is going are are a people and the

that and there whatsoever. So ramp therefore, market, And are our our we in see at coming Remember designs new any installed. big don’t ZTE designs were FiberHome.

ZTE So what picture, so all on. out now relying is we is of FiberHome the are

even and don’t away definitely or the time new in would So and telecom now, XX-gigabaud the more long-haul two I sort the the gauge of I XX-gigabaud those second those on revenues metro, right products on in are size of pay to anytime I the half. say spend markets side. that telecom, a year

positioned however that wise, you that’s when be the very MaxLinear. would we want whole the I are trajectory to overly changes relative So And and say I interested think datacenter side. side, in I the revenues wouldn’t to on on well optical

Tore Svanberg

That’s Thank helpful. very you.

Operator

like reached would gentlemen, turn our remarks. and over I for back to to Seendripu end session we the Kishore call question-and-answer have Ladies closing the of and

Kishore Seendripu

you, Thank operator.

on and Growth be reminder, and XXth a William participants all attending June XX. want XXXX June Sector Blair Stifel Cross Conference know Stock Insight As on I Conference the we the will Annual that XX to listeners let

As you hope always, see of we many to there.

in those the personally robust much. transformation his investor again such with However, Thank for leading calls. participant I being in being thank MaxLinear. investor want all you base And and Adam to am MaxLinear’s a of very very Adam I investor once you a interactions when for great steward closing, calls thankful has for such been of

Operator

This concludes today’s teleconference.

at you for disconnect may You lines participation. your your this time. Thank

MaxLinear (MXL) 13 May 182018 Q1 Earnings call transcript