MXL - Earnings call transcript Q3 2020

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Operator

Greetings, and welcome to the MaxLinear Inc.

Third Quarter 2020 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Brian Nugent. ahead. go Please

Brian Nugent

by Good Strategy us operator. third and you we Officer questions. being thank XXXX Steve take CEO Thank Chief will After Litchfield, today’s afternoon, our conference joining Financial hosted is call on results. Chief MaxLinear’s Kishore call for Seendripu, financial and Corporate you, and Today’s everyone Dr. Officer. to quarter comments, discuss prepared

expense. guidance statements for the within quarter Our margin, comments and expenses, relating of and tax operating securities quarter to laws, forward-looking non-GAAP tax non-GAAP our in target effective fourth today revenue, rate meaning including expectations our fourth other applicable XXXX statements gross growth interest markets and and expenses include revenue GAAP principal GAAP and

these improved make arising business relating for growth trade opportunities markets. concerning Intel’s export acquisitions are acquisitions statements well our in risks and markets growth third these other and any restrictions, or risks no filings, and supply substantial SEC risks outlined we impact to may statements the XXXX may and in forward-looking generally as for and These our and dependence assumptions today. including global we quarter that as XXXX our risks not as number and target limited revenues Home to recent and integration that statements opportunities and Form product various our information Gateway across is Risk addition, incorrect. customers, involve uncertainties, completed trends, More NanoSemi, opportunities infrastructure the and expect in the employee from markets, the update constraints, price to of of as revise forward-looking on year from obligation our retention for Any competition, MaxLinear including, XX-K which a opportunities opportunities concerning forward-looking our more and our related XX-Q, limitation, pandemic, has ended Factors potential and made on prove COVID-XX filed In geographic today, business of our connectivity December currently risks our wireless selling XX, recently was and uncertainties will and of of Form without our statements. markets opportunities average section trends including arising statements forward-looking develop of

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

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

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

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

Kishore Seendripu

Thank afternoon and everyone. Brian good you,

XX%. at broadband strong acquisitions overall sequentially, $XXX.X XXX% non-GAAP were an of results contributions guidance Intel’s from healthy up organic ahead record financial and partial our QX and million, organic on and strong gross was margin Our gross NanoSemi Corporation. an a growth assets QX, representing Wi-Fi of include also In double-digit our basis, revenue quarter of high and

market multi Home driven both Connected Ethernet lines. at demand gains were The Our business revenues at acquisitions market product and broadband at across by share well industrial stood Intel’s in revenues. of infrastructure asset stronger-than-expected XX% broadband Wi-Fi overall at increase XX%; were multiple XX%; as XX%; as

Our recovering in macro also improved significantly, a first XXXX. half from of backdrop business weak Wireless Infrastructure the

highlights, turning Before team. Corporation excited I’m to design to welcome the business and IP NanoSemi our

XG aggressively it GaN amplifiers acquisition business to a technology, high open-market we performance, We is RF and across baseband, prove massive customer MIMO only IPs expands integrate for Tier wide test in expect proposition also previous also this and organ for for massive essential licensing OEM will XG, for proprietary both our business. licenses other our proven which existing XG especially be X RAN suited NanoSemi applications. greatly solution and applications. P to XG enhancing game-changer power transceiver digital and into products, our these infrastructure NanoSemi’s solutions. brings equipment base open high-power wireless the Simultaneously, value for MIMO IP band, working macro systems are XG as is our is

have competitive and NanoSemi, wireless addition and With large we growing positioning this bolstered of market. in XG significantly offerings XG the infrastructure our rapidly

business our state the to art of about Wi-Fi billion, consisting $X technologies, highlights, acquired addressable access, XC Intel of industry-leading target broadband access X Gateway and of to associate our combined Fiber solutions. in with assets XXG Ethernet platform market the QX broadband turning and DOCSIS, Now, some the PON immediately double

comprising flagship DOCSIS and X a North cable DOCSIS gigabit X.X full a including, ramping importantly, MAXIMUS SoCs, America to gateway platform, Wi-Fi MSO shipments Ethernet. of are suite most We cable X.X

compelling connectivity, deployments share Wi-Fi capabilities. best-in-class wireline our as home our MSO our market work resurge connectivity the up suite technologies expect grow from We dynamic and due of G.hn MoCA growth. existing overall to to and net build new revenues and subscriber In

slightly bed ramps [indiscernible] design demand platform premier chipset customer. sampling mentioned, deployments MoCA undergoing operator for production the and large meaningful large as of in is for is telco to delayed, at customers at Wi-Fi early first hyperscale flagship is stages our carrier are seeing it are are our towards a Canadian MSO industry’s opportunities. In connectivity, new large a we wired while Wi-Fi Er certification center, latest center penetrating Tier Alliance. we data MSO a Our the test sectors Wi-Fi just Notwithstanding I In X strong X cable that the still Wi-Fi at data optical X.X mass XXX-gig even telco. X in U.S. telco progress PAMX the and

new several the gigabit PAMX growth to SoC are adoption edge expect growing positioned PAMX traction deployments by and We X-nanometer and mid XXX X into center designs XXX-gigabit to our markets well which a for next-generation which XXXX XXX-gigabit optical ongoing XXX are years. convert with in dominate also, will and center capitalize early we have our data G continue this production offering long-term we CMOS our customers opportunity. cloud platforms. tremendous in we outlook and PAMX ability With Both on ramp to product, confident to data as sample the plan over next mid-XXXX, Tier

wins X feedback MIMO Turning industry’s new is This continue to in positioned the RFQs. operator XX-nanometer wireless is us XG across In XG half win positive first XxX transceiver aggregation wireless and and CMOS, RF strong a from backhaul, our have players. to MaxLinear strong XXXX. now we during to Tier in channel the X, uniquely we COVID-related RF saw infrastructure several solution. Tier installation X binary double-digit design facto on market, massive new delays de growth add SoC, has recovered first requirement Tier received as both Meanwhile, the which demand a feature

we’re In NanoSemi’s systems. portfolio, our IG addition proposition with in IP value strong greatly enhancing MIMO massive

Chief data strong to our to to the two customers work continue which uniquely initiatives QX drive our and organic infrastructure center and markets, summary, and let drive our recent strong Strategy market growing Officer. broadband wireless, analog call aggressively expanded addressable Officer lead Financial Chief over growth and optical With me applications, combined get to high-value, acquisitions, turn market XG greatly beyond. will to in profitable high-performance platform of Litchfield, XXXX. rapidly In We Steve the that, in connectivity network target growth with in our

Steve Litchfield

our we gains. QX connected owing share of up saw further results for work demand well will QX sequentially, for from and strong business first by our and review home to cable the XXXX. home XXXX guidance, I Kishore. our revenue led then million, Thanks, above dynamic $XXX.X On discuss XX% outlook products

grew backhaul our partly business. access, and by analog weakness infrastructure offset sequentially, business high-performance in wireless XX% driven by Our

in Our industrial multi-market and business inventory to softness due Asia reductions. was market down end XX% sequentially

GAAP were broadband XX.X% and Our acquisition-related quarter assets well XXXX amortization gross gross million step-up, million of gross well acquisition quarter, related stock-based acquired through made business XX% approximately the impact XX.X%, compensation of during the margin quarter. and our our compares above and we bonus quarter XX.X% accounted XX.X%, to in the plan. $X.X The non-GAAP of $XX.X Intel intangible GAAP between X the $X.X reflects and GAAP during which million for acquisitions Wi-Fi accruals delta to to of and of margin respectively. of This XX.X% guidance third as for million the to the non-GAAP the estimates. gross and and third of guidance margins margins the of prior inventory as excluded revenue, $XX.X non-GAAP

quarter-over-quarter compensation due were and Non-GAAP operating combined, cost $X.X the to to acquisition-related primarily million costs expenses $XXX.X included impact of the the GAAP X and that of which million, sequentially, operating million expenses amortization stock-based was restructuring acquisition $XX.X up and of acquisitions up assets acquisitions stock-based million. purchased accruals of closed quarter million million, $X.X charges. million, quarter. due were intangible GAAP of Third during $XX.X $X.X approximately expenses of operating $XX.X bonus

in second in versus the generated sheet balance in used of million Moving of flow XXXX. quarter $XX.X to cash the activities was statement, flow the third operating $X.X our and quarter cash million XXXX

raised We cash in intentions priorities $XXX strategic stands and the assets around $XXX uses consistent acquisitions. Wi-Fi the loan with Loan on of remain debt Our A million, of and quarter broadband pay-down balance acquisition. at Term for million in factoring this our

days for quarter outstanding the in days approximately XX quarter. third to was days XX prior Our sales the compared

Our to at compared quarter our $XXX leads the million, X.X X.X inventory to in turns range. to midpoint guidance We of the be $XXX XXXX approximately fourth expect That XX% revenue the QX. in million currently to guidance. sequentially up me were of

expect in transparency end do the transition. during our market maintain current an to adjust we in to are effort this we breakdown breakdown While reporting maintaining QX,

Home and We data driven expect be revenues cable up growth connectivity. Connected with again by to

new the in from home work well tailwinds continue ramps expecting are QX. as dynamic program from as customer We to

increased constraints have We a factor suppliers to working supply our market. closely the as of in more support are with the become demand

dynamics. expect driven wireless primarily trade We related revenues revenue be the China infrastructure to to down, by lower

We as channel multi-market to and consumed. industrial expect down is inventory our be slightly

broadband XX% to be and margins Wi-Fi, approximately fourth profit in by to non-GAAP toward flat category. to profit improvement expect of the GAAP gross margin to this quarter offset approximately be We XX% margin revenue, partially approximately gross mix revenue, XX% gross and with of shift XX%

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

line of fund in targeted in leverage beyond, focus stated and strategic increasing delivering the We on growth at development continue to strong operating with Wi-Fi programs XXXX particular business. initiatives, our and top infrastructure the and goal

We of amortization stock-based of $X expect to million, $XXX mainly QX XXXX a GAAP range operating bonus. full to driven million intangibles quarter-on-quarter to and $XXX and approximately impact by of the compensation expenses million increase quarter

$XX expect operating sequentially up million to range million to to approximately XXXX QX million. of We be non-GAAP $XX expenses $XX a

non-GAAP expect expense X%. X and approximately be to We of rate GAAP tax tax

in pleased interest to $X.X million share dynamics million. on businesses $X.X in based of strengthening cycles, be to and report expect all market expenses and product are improved gains. dynamics closing, the In other to improving quarter we We our

Our as growth year next platforms well XG meaningful begin production ramp. and continue set with up infrastructure PAMX in coming efforts to to

as business. see in business to broadband our recovery from Wi-Fi considerable encouraged early are well the growth We as

We flow accelerating cash are profitability execute We through infrastructure intent strong continuing integration generation environment emerging on market a supply remain dynamic well our focused to supporting while as demand developments. and on on our customers maintaining constraints. organic with as efforts and

of XXXX to up With these to our we leverage like the existing open deliver initiatives With in positioned their we in the and Operator? our believe call and opportunities, strong would I remaining into are questions. and that, XXXX. uniquely respective business growth newly acquired to portion assets

Operator

Please [Operator Thank your the comes Your first Gary Instructions] you. Fargo. line question from with Wells with of question. proceed Mobley

Gary Mobley

you baseline question. guys. for from operating taking Thanks acquisitions. your margin quarter the on fourth to and once gross Hey, level expense of sort my focus integrate the on fully Wanted

example, in and from improvement more And gross OpEx, wafers so start acquisitions for I further business, of XX.X% $XX do as see OpEx any and guess, about priced million then your some you Intel the guidance you integrate thinking X margin synergies? that the recent as to favorably sort how run, and well

Steve Litchfield

for thanks Gary, Yes, joining us.

mean we’ve we don’t that comment expected, initially – think anything I I I margin a a from than and think a of So have we gross found kind the different on that can bit. I potential little front.

do expect the talked the able year next about in the So overall I somewhere seeing business we’ve to year, range. XX% exit

nice the XX%. in I do improvements. kind a first that then and the year half good expect of see some I So towards step-up trending pretty of just

think that talked are services. services you’re months’ about, and I and aware we’ve transitional worth about on OpEx the with as it’s deal, some that side, of X come the there

down So in I QX. of kind do late come expect to see in that

with overall And the synergies-wise additional the but off. we’ve that well, expense and that of comes – I we’re business. cost, just that and think see on so as front we’ll the I profitability the I nice been some making progress just improvements mean, improving pleased mean, And very overall,

Gary Mobley

Thanks, Steve.

focus So the data well. It’s doing you cable business. wanted of the side as no a guys follow-up, to wonder on are I

gross it, trends bigger in largest gateway of within You cable your can see cable the additions sub some partners. strong some see strong you your can customers. And MSO

can general market whether for increased gateway business? if it it market demand? driving you in uptick in be the order is you Is that stay-at-home gains, share or And was rank put it cable Is so your I just Is materials? wondering customers? it bill what

Kishore Seendripu

really. Gary, hi, of it’s those all reasons,

home. access, upgrading they – tier the the bandwidth, what of and what just not of quality their their One around everybody – is distribute they but

the in So it’s upgrade of are that deployed. being lot boxes a driving

we are DOCSIS America. the pretty most major So operators X.X in of in trending strongly full towards rollout North now

we earlier in did – lost good in the For operator us, market is on news had North and now specifically, not recovery we cable – mode. share that’s a at America, but materials full bit, there. of major these our that even a best-in-class has we increased that are X owing to operators the the today the to below – solutions they’re supplying are quite deployment Wi-Fi so and And

MSOs And reinforced getting very so And there’s so I just cable in in it’s right? all from pandemic factors. are gaining say subscriber we’re the the clear BOM and driven have more from work home has so I of habits and net as think are forth. of people as changed at market a need some now home bandwidth lot expansion on, for addition, I well. we’re would viewing the as dynamic beyond dramatically, now, So well component those think bandwidth go benefiting upgrade that a of

Gary Mobley

Thanks guys.

Operator

of your Your with next Vecchi question William Alessandra proceed comes with Please from the question. line Blair.

Alessandra Vecchi

we well out us the the assuming Hi, congratulations that? hyperscale great some If infrastructure China – the impact of and what segment about can we and of I’m maybe the the of a timing takes results. as you just sort sort as and puts touch base band on large on ramp how can the be help of thinking should is if with bit the little

Steve Litchfield

is Steve. this Alex, Hey, Okay.

of kind of infrastructure see mean, maybe well Kishore that well, fall kind impact of see as in stuff. extremely in seeing I So as QX, recovery We if some that bit far little a some quarter-to-quarter of standpoint, to we’d It QX. in a all, wireless a PAMX happened and I’ll nice was definitely little from China we just and in QX. then on QX. first highlight so but thought jump of had bit it did in give kind of anticipated wants back But you of the a

driven by it China. Some is definitely of

that, about the impact We specifically. have Huawei talked

that see we not a down definitely for take completely. come that our us, of out number numbers as huge While it’s we

Kishore Seendripu

the now general know in the that delayed optical On rollout PAMX PAMX. or think I side, PAMX XXX-gig has we XXX-gig all the

So And our major side. but I as XXXX. PAMX bit XXX-gig of we who market process, the module well, middle that a on think is that the have the said had that, in from of the expectation has That’s customer. little select a ready center ramp PAMX for result pushed hyperscale we a data getting a own number expected slower customers, per than are the as revenue optical potential going are through of which having we qualification with out

specific the secular particular not profile. On It’s a data XXX-gig more to PAMX, it’s center. any

has drives reduce So replace hard PAMX become the really optics. how XXX-gig because the cost cost XXX-gig of to now quite to goal the it the dramatically, – CWDMX down of

or lambda a lot center are with XXX-gig it replacing So single markets customers all in PAMX, of enterprise preparing and companies CWDMX for XXX-gig markets. potentially data be

also So think going the Once in I mid-XXXX to that’s that’s be an cycle. be to exciting again, onwards. going

hand, But lambda the are reaffirms outlook. very, if it’s well And single in the next whether with be in would strong sample that as the you’ve disappointing. report, position investment growth we’ll participant the pretty XXX-gig counting growth a other center, generation latest as in we the I that it of a PAMX data to delays PAMX the terms future X-nanometer of XXX-gig year, of on a in – PAMX, enjoying for with the future is our So, investments middle say, technologies, latest profile with the XXX-gig market – or seen light really this hope in PAMX our a opportunities opportunity. very of leadership

Alessandra Vecchi

gives bit about follow-up how you the is as there discussion. the then acquiring to recently, grab PAMX little a Obviously, Marvell a big additional And us opportunity potentially you was potentially you walk it And on there? Inphi. competitive dynamic any announcement just Can the that share? think through if

Kishore Seendripu

don’t offering. see the in we additional world, center to right? combined positioning participant the how players, them. competitive Marvell-Inphi And in any a not they was market. bring I three are now, right there PAMX are Marvell among Look, data And the

young, to agile fund nodes because quite And want always out we scale node well. acquisition if is big the exciting, exciting be to hogs. technology as a of And because with Intel’s grow. to that in assets, will pretty you the you it’s X-nanometer products company as at silicon Wi-Fi stand latest investing technology Home Gateway us, our pretty also look have are we’ll SoC the For

So and X-nanometer the on I across be think spread all development amortize platforms. will we these able to costs

very, actually position. feel I very a we’re that in So strong

we proven – time infrastructure take they happen really really, long proven have also for backhaul, we yours time. But they I the our think repeatedly revenues should wireless have think that we but been to wrong, we think come. think things is I in game. And then are a I where where right, come, a long like instantaneously, when

how I up. would that’s So it sum

Alessandra Vecchi

That’s I really helpful. in will myself you. queue. take back Thank

Kishore Seendripu

Alex. Thanks,

Operator

with next Bolton Company. comes with question from the of proceed Please question. Quinn Needham Your line & you

Quinn Bolton

late wanted I been Hey, Alex’s give the guys. sense what you been question. PAMX I hyperscaler now on you can Inphi holdup to I for into shipping, do guess, that follow-up year. a think the think, has on over some us qualification, has

firmware running or the So demand it what’s some I it’s you really issues into market issue. delay? mean testing? feel walk a are like doesn’t behind Can interoperability you us through

Kishore Seendripu

what me for news that for shipping a one surprise was competitor Actually, the say you is year. full

qualified that non have module module qualification. they companies the bit fact, a China with pandemic issues then there makers, the slower know issues the get trying of the get importation the with data center In and but has tax are, China put qualify whatever been been vendors there don’t import to import And emphasis trade-related are to to and is they much are delays ready been related, the to I real are China-based with one there, on issues, blocker. how has on – then little

know, have barely quantities XXX-gig far XXX-gig of actually. of PAMX, of modules as tens both and a few So shipped PAMX in as I PAMX thousands

PAMX would had more been that I’ve told be that have which statement the been even fact, in PAMX. XXX-gig there So still quantity shipped, XXX-gig

way. goes. put a I’m of So sell-through for shipments speak how still I let’s understand full happened have struggling to year it far as sell-in, cannot that as

Quinn Bolton

I strength an core any driving about us think, the I is, of you second but given get down I And the little the insight, in it, gave where that assume acquired MaxLinear. business. And the outlook quarter for I’m might could business. cable a Intel I’m missed X gross you think margins of full I then But with you say Steve, that’s up question, the us some traditional data gave buckets guess some business at comments core you into quarter, because Okay. don’t have surprised at stepping especially I be Intel MaxLinear the business. of helpful. would a the the

and business Is getting the just and through think Intel from to that’s the pressure contribution more into lot causing you’re puts margin trying the a what’s So it quarter. fourth just the quarter-over-quarter? takes

Steve Litchfield

Yes. exactly Sure, you’re through Quinn. you’re thinking Yes. that. as No, right

a So whole in quarter. more lot we contribution the have definitely

so broadband – to So like of and improve, we from part first much Wi-Fi we to continuing answer well. question, going business, is the see your our Intel broadband do that extremely own

QX. is there’s And a just down so that right? frankly, slightly. that in yes, do portfolio, we a expect And to so And grow contribution product bringing lower-margin gross from, bigger margins

that As we I am of confident bit I earlier, in the recover first year. half mentioned this a see next little

So very was is more of it related, QX. It a slightly not just but down of come you’ve mix then it strong infrastructure off bit up. just coming little got also a – down some – does

brings down you’ll and it of move see QX. then it So kind QX a little, and backup combination that in right

Quinn Bolton

of transceiver. Is just we XG mid-XXXX? for stream when And you last thoughts meaningful. think second-generation meaningful any then becomes wait starts the us Can Do that that revenue you me, before also updated give need on kind for to ramp? X-channel on cellular the a that

Just thinking you. how be XG? should Thank we about

Steve Litchfield

Yes. Yes.

impact. this it’s of dynamics trade on And with now interesting, China, side, it’s they’re lot that. talked right, the XG next But with had we ramp in meaningful to is a small year, amount the that more really see see the would second kind we’ve revenues dynamics on a some of the in interesting track definitely So half of year.

our overall mentioned I don’t revenue I’d in expectation happening from that an that slowed in XG earnest. know prepared ‘XX. part think start so think changes the does starting much in definitely has – it of in year. But those about that mid I – remarks the I overall, ramps outlook slightly. the

So we to see are that. track on

Quinn Bolton

you. Thank

Operator

Our next Please question. line Tore from with with question proceed of Svanberg comes the Stifel. you

Tore Svanberg

and you strength here. congratulations the on thank Yes,

breakdown your question, Is what’s saw First I XX-Q, revenue versus at going and maybe difference will that new can new just there. breakdown elaborate revenue look the looked between trying how broadband/Wi-Fi home get straight the there? everything a to I of forward? sort you on And connected like

Steve Litchfield

Tore. sure, No, Yes.

effectively Sorry, we hoping to to prepared out we remarks, just were broke transparent, broke the we acquisition, the bucket out markets. Intel earnings, X results so we we that very QX for on and the our assets actually the kind make so that then had clear way previous the from end broadband in but was in we so it’s so And Wi-Fi be – that our did wanted and of based clear. X

we’ve intend we markets. change Going end those forward, to as stated,

that next break quarter’s separately. as on call out we you’ll And that earnings see so

So Intel to is is, broadband the assets the in and answer the the broken – your out piece that’s Q. question what Wi-Fi

Tore Svanberg

mainly gained with? that talked some gains the those other seen That’s or that And Okay. the as benefited from? but all follow-up, are share on you some have share share side my content obviously, you’ve you great. there Wi-Fi growth, about And you products some gains

Kishore Seendripu

So Tore, It’s not no, right. Wi-Fi, no, a combination. just it’s

– DOCSIS now got it’s all X.X got the Intel the and Processor. includes share, the has It platform. MaxLinear It of there. we’re end. the even includes that the course, include? the the X.X-gigabit has with so right? What start getting Wi-Fi. one, It and had the and that’s SoC Ethernet. MSO, And front full combination So In this first Let’s platform lost right? Gateway It does large we cable, MOCA,

add that’s is carriers pure you to various volume example, release the go back a there for flavors is unit CenturyLink platform growth – new share from – ramping public, where Wi-Fi platforms past, are the in other been if CenturyLink is Intel now of growth. this – And an So press by market. are who has

we And the gained share have share shortages Additionally, have customers’ market competition because gains shortages. are supply versus end. – severe gotten there because our supply our some we at some

right, you so – the full that’s growth, well simultaneously. BOM so of And impact and get increased volume as the

there Additionally, a solutions. component our MOCA North operator at large telco been some have U.S. American for growth

Home So if call Connected broadband. assets – the and the recovering acquired. you it’s It’s is we that nicely say that that of a we is mix what Intel everything on the

Okay?

Tore Svanberg

great. great, Okay,

Just your one, one largest be going the that’s last today, right? at to X-nanometer, foundry

Kishore Seendripu

Excuse me?

Steve Litchfield

X-nanometer.

Kishore Seendripu

Is to it going be what? Sorry.

Tore Svanberg

to with – largest X-nanometer going there, It’s be right, your foundry partnering Yes. your technology? process

Kishore Seendripu

it. Got it. Got Got it.

Okay. in world are only We TSMC. now foundry, news it’s there X – think don’t disclose but are it’s I old to foundries the which capable, that X-nanometer Samsung and

So like them. of we in That’s one to we are would – correct.

Tore Svanberg

Great. Thank you.

Operator

proceed of comes from Seymore Please question. next with your Our question Bank. Deutsche Ross the with line

Ross Seymore

the to into Hey, like strong a guys. know versus inorganic, Organic Congrats on maybe quarter. just but split bit little it higher a I the much the switching level. million that the I up, any. And going million, results NanoSemi of you’re I XX% and segments guide. how the Gateway fourth just seems wanted But at to it is Home then to owning versus have more please? $XXX versus of Intel much out midpoint don’t business. how organic inorganic, you’re the time $XXX contributes, know dive if

Steve Litchfield

Yes.

the mean, So slightly mean, business I Connected infrastructure be and was, up. guess quarter, break Ross, will I in so mean industrial I down, – up is talked is about down be Intel we will Home it we the what didn’t out. I

is our dynamic. Huawei position what is, has the different, only is then infrastructure. with on little to There’s stronger with track a So whole we’re mix the infrastructure regard slightly the bit not really and right? I different, I all-in, way But mix X lighter So definitely little organic our the a I growth side Home lot the a would probably the mean not changed that Connected mean seeing given on – expectations it slight expectations original on were. on is difference.

Ross Seymore

sustainable Is a So obviously, work competitors the my could equation, have bunch – Gateway? a getting start there it should Intel the is just perspective Connected forward Is and of broadband when of and persistence into to just business, seasonality/sustainability. year? with that of amongst follow-up, next we kind big forward of even the does the XXXX? And how debate seasonality to on legs? all revenue side get pull that will we I is this investors are a Home and into we The of about some your bit all a to you this from to get or off be? lot is enter going it little that think want as at concerned this the maybe you into way a home some And combination a of lead without of the COVID of because from lull of Home pull bit a that is more

Steve Litchfield

mean an two I of happened real mean over as the bit echo the The it I of board. think supply we’re of recovery, across are years. – earlier. probably was so to would that a I I exceptional definitely well. I seeing But would start kind an constraints answer what way level demand Yes. that and the underspend sharing kind a last Kishore of of adding probably there’s kind little

about the year. And track. so talked that earlier it of We on kind was had in

home top of On we’re piece from of that. seen share work that other But well. little demand there’s I’m winning bit a back. that, is of sure as we’ve So this the

had that advantage have to our all of new These more to are hurt some able dollars But BoM that. we’ve the Ethernet. more bringing so take Some increase, bringing Wi-Fi, then – definitely been of are system, is we bringing of the we that right, historically. haven’t and competitors this right, this supply constraints

So different. are those dynamics are that pretty big very

from we’re kind there running we’re little by much, what our mean, work that But share replicate? were. that of at level these expectations have we than driven bit maybe Yes, And home potentially. content this boxes. very a higher really I business, on much confident the of doesn’t a that is and that’s original So

Kishore Seendripu

are on. business, are interest to SoC revenue modulate as lot versus our offering And trying software that, new having to and trying huge product carefully so we an gateway we supporting in said we dynamic a component well. of see versus the of customers OpEx growth is a profitability Because and balance on and

any hate truth correctly. that, I we bit So little are modulate we’re that a giving think I dragging but say that we on so – expense some there’s can we the are up to revenue, profitability side to

Steve Litchfield

thing, And we coming because further clarification I Ross, about part year is and from. into that’s that contributor to increase as Wi-Fi, right. your question talk mean, next just that’s look a big a out I where content as the last guess I think mean I of

lot size business. of talked have the we So about a that

the year above $XX And next for that’s so probably to so or range. I in maybe slightly million double year, that’s mean, that. expected this MaxLinear,

So good there’s contribution.

historically. So that you we is had that content talk about new haven’t This all where come upside year? next does from

Ross Seymore

about year. next think on are for Great. any on OpEx XX to side, the think about way quarter it side. for Steve, a side, Is gross on band But as I And modulating kind a final you would $XX exiting back pointing one The now before. things said in know the of said it guiding side your of what we us you XQ, OpEx was gross next year? spent one could guess to sort XX% bit you OpEx margin work that’s to touched we to XQ. a there up drop about sounds I that rate the of you kind akin And on you of to. Kishore like million helpful it little that bit of modeling-wise. kind exit will late the margin little

Steve Litchfield

pretty Well, we We months. services, just right? so to also that got we the been but of it on business, I of that cost realized a have – pull have out we what to about efficiencies still lot transitional have have next there’s think have get this, and we the XX said consistent think over I be that

in we April we of in even low I when And And think exiting was we about being early on think do and initially that about set talked so talked are XXs to the have out it. kind ‘XX that. track I

see is definitely getting business, at think This Intel than quite exciting bit And that. we higher So in the there. particular. any part I then real don’t business the a problems run look I can

following. hit and and profitability continue exiting the And see so year that those of the the kind realized efficiencies – beginning into level of we moving to will

Ross Seymore

Congrats. guys. thanks Okay

Steve Litchfield

Thanks. Sure.

Operator

comes with question with the next from your Ananda Your Markets. of question. Please Baruah line Loop proceed Capital

Ananda Baruah

order on. actually of would I in at the they execution XXXX you then you guys. on do a helpful? the went what order, Which if ones have for follow-up. navigating business influences incremental going couple most will Steve, – everything and you sort afternoon Congrats quick just you least be rank me, Hi, of handful And think Could do from good A have be through? anecdotally, of that that could. I the the think sort for well, I guess, you broadband

Steve Litchfield

difference gains the I on of pure There going can spoke as you’re little – Yes. platforms that these just out I’m now. it’s lot roll the share and just right convoluted is – I them. I Kishore sure on getting. mean, rank not a gaining how dynamics mean, And order earlier that a about much we’re

competitors, are gains same share at increasing time. content the We also we’re from getting but

don’t I So it. I know rank order that can

are All them inflow. will a you throughout that think And see ‘XX. continue of positive really having I

Ananda Baruah

It sounds portion at-home of like is of least think significant all variants? actually the the it, you the

Steve Litchfield

a we people achieving whole kind it’s don’t portion. think we gains exceptional and more I content. edges, a I the course. more mean, we’re a of But change that share increased broadband? structural this Yes, is around more we think and have taken where of I have I step-up what are a seeing of lot But content. through it’s smaller the the realize think share that

Ananda Baruah

a are hey, you on center think quarter just mention, made quick just And are follow-up we lean the actually CSPs, this. starting you into listen, very – last That’s of sort data to at guys helpful. then I

proxy CSP some So comfortable so of overall more statement? you the for ago a of on of environment use your a you what making environment us feel because a want comments do spending like as do And things sort – philosophically, maybe how hyperscale a right about don’t kind what’s sense going XXXG? there spending there you now? is you And do, see months if spending. you ask if actually I few to made But have

Steve Litchfield

I it at question. – stab mean, that I will take a

you We last right? CapEx quarter. to think kind just trends, referring that of are center on I had data commented

Ananda Baruah

you yes, yes but and bandwidth Totally, specifically, have? whatever obviously,

Steve Litchfield

It’s a yes. because market a new Yes, all little this is for tougher us.

So it’s all upside in new our mind, right? are So programs. these

market commented Kishore outlook. the think on I

think have since really today, a advantage I from all it’s to center we it’s that business we’re huge customers think and But both of are know mean upside XXX-gig again, really hearing encouraging. Albeit – mean, – take I positioned I a markets. XXX-gig what we have don’t we to don’t data is I that I us. think I our well –

Ananda Baruah

It’s awesome. appreciate Thanks guys. a I get it. it. I lot

Steve Litchfield

Yes, you. thank

Operator

comes of Please with question Bill proceed Your your next from line JPMorgan. with Peterson the question.

Bill Peterson

Yes from a question. coming upside I questions. see hi. a I Thanks my the for the Intel taking have clarification then asset. few

are clarify Do fourth if can you for referring are have go to you what they you can you understand you for basically getting assume quarter. I in if You I Are – quarter? I you licenses, that? the third in assume Huawei, to And don’t help us guess they accounted the X – licenses? applying

Steve Litchfield

you. to Yes, good with Bill, Yes. chat

less an Huawei on said break don’t million annual we it slightly basis. was what out contributes. So We $XX than exactly

out And so decent that. feel I yes, probably think can And you have it a QX. we get for pulled – you of can out completely

Bill Peterson

Okay.

slightly should calling up think being about more I I where that what markets, I a plus think recovery recovery into we million, importantly, $XX down? happen of to didn’t were multi But that think for up. range, what we what guess, And how plus ended industrial – next as year? a to or Just you occurred kind back guess, historical about $XX flat million

Steve Litchfield

Bill. Yes,

still It’s then really strong declines the But interesting We did quite QX. I that volatile slightly a quarter, we year, would moving up. that some in QX. trade like amount right? mean domestic given we’re really of of are Chinese in participating QX. And think fair in didn’t we the okay some but kind is been continue seemed saw that of in customers big be an these to dynamic, it it thought were they dynamics, it that’s to in, recovery So – this consuming parts a of yet, flat inventory. We the supplier. think do a

the that then So home. some probably of it portion video kind that think, of cards some another goes need is to seen business, good. of you to that – in for we’ve away need we these And of be

time continue or continue taken longer just that to But to do recovery. recover. to a to that’s we so And expect

got as our been analog We’ve industrial them. in long-term some about as products We’ve well think just I view interface management of multi-market really business as power general. products. our well new our as the over year, quarter the are meaningful stuff we’ve kind They years. that time X.X this will hitting of frame, sampling. of on around next first say, be been That’s year the real last, talking working

those really part traction, And the there. get win hit start so the as that’s design exciting some market, to

where we’re necessarily short-term multi inputs. newer positioned dynamics the that’s doesn’t that I think the kind based on products of reflect with but customer really these Now in to on market, some industrial come up

Bill Peterson

as size – year, the you mean a your year. you and understand about Hoping next the at business, guess in Thanks to like that’s of I business, should I to more you to new now, if PON does million Wi-Fi try where Okay. Ethernet? on the maybe move we content fourth When one. importantly, are about progression XX? have for we Wi-Fi last the happening? helps ZIP win close that to revenue think disclosures the And and somewhere potentially frame confirm Hopefully, right the for then of in least – of picking lot business $XXX design XE the start some through that your opportunity. calculate the based kind providing to you I up broadband guess But to Wi-Fi would million fiber, How can code think $XXX I quarter. this the us areas about. pipeline,

Kishore Seendripu

Yes.

and all I think Wi-Fi pipeline. platform, topic. more with assure hope the information it’s I the a the we the MoCA you the on of call. very being And bells is large robust bands long a world’s and Premier to just to and a meshes hopefully, whistles that’s all XXG next more PON which sort that share want

So in large this call. to topic it’s a cover

Steve Litchfield

I question, code. you’re But in ZIP right to answer first mean, the your

aligns that what said with I think I earlier.

Bill Peterson

and good thanks Okay, luck.

Steve Litchfield

Bill. Great. Thanks,

Operator

with Please with question ROTH. Suji from Your question. comes next line your proceed of Desilva the

Suji Desilva

Steve. some, acquisitions? acquisitive you have on acquisitions, be are assume been Hi, what talk to about further additional sheet kind your Congrats here. of willing thoughts to you Kishore. Maybe in on what Hi, you leverage the any might progress if could balance

Steve Litchfield

and I at so we what and do mean, to acquisitions question clearly, mean, our with I leverage. willing be prudent market I to look mean, about on. continue that yes. are take we going intend mentioned to think Suji, we’re specific to I had leverage and we your

fortunate very really flows the originally take or little we in the anticipated. think I negotiate Intel had probably think the in particular in we debt were leverage able acquisition didn’t that cash to I of way we acquisition. are a additional a faster on where coming lot than And what

So that’s very going well.

right in we – two it integration. middle we want asset look, assets purchase. But an So have got it’s mean, I of well. I are is think we mean, and the I progressing

really of in the done a early work our process. was lot So

well something us do as don’t as half able But the of there’s an to to maybe I be early know leverage. second exact year. of So the I number that think that positions

the as I well asset as depends on think a environment lot of that the itself. market

Suji Desilva

what just ask Okay, for question the to to this just was profile you us that? of I great. the of some ‘XX think don’t is in know the general businesses And I typically thumbnail or seasonality not, can look a new a going portfolio, in sense, maybe try maybe give before, asked then but typical with like, kind be is more

Steve Litchfield

seasonality in our – stronger connected I mean, business QX home QX. historically is make the would that comment only on Yes. I the and

And assets add little to see. see QX. typically that. bit what softness in these in softness QX of is and you and we a QX would I would QX So But typically

year to So well. that’s What mean, coming lot the strength, as very in second strength half expect early what I in seems heading see. because year? whole Hard year that you seeing a next right, saw the strong would to of say, are the of you into happens

yes, So determine rolls of seasonality we in out that how kind will definitely to that watch ‘XX.

Suji Desilva

Steve. Thanks Alright.

Operator

your line of Please the Your next proceed with Rolland Susquehanna. with question. Christopher question comes from

David Haberle

about gone on we of total a aggregate thinking Does term, that have it’s near that deal long-term Congrats It’s on it If being have lot than the David sounds you Chris. grow I But business? you growth Haberle could, on your MaxLinear you seems of expected. weigh certainly how at the about there growth on this had how kind now better and you under like far, business? it success the are asset the closing deal, have the behalf control the like into longer of of helping or tailwinds growth on long-term should all this XXXX. term business just so

Steve Litchfield

Yes. Sure, David.

really that short the growth meaningful. and the are good term, Overall, definitely lot think been very So look what itself, what contributing, single-digit the low the the increases kind I profile has I like? expectations gains Intel I the very well, does still BOM I demand it’s share growth term, a – we’ve consistent mean rate that been pretty asset have in messaging – mean, think talked in of we are. is are short our I think about in

Ethernet start and I to as think Wi-Fi really pick up.

product than number. lines start can see ability single-digit and You But at grow to are still small to that it’s definitely low our those faster fairly this early, little a today.

from take and large. about market technology excited the advantage The we’re I is positioned extremely investing bit a big then been have we talked still I our business, optical he about our products really think, one works side, positioning is again, the where mean little well. And Kishore, that and the we opportunities today, I that where with it XG we’re have opportunity, market. a And opportunity out think investment growth a infrastructure think and very the it’s very earlier, itself much but to expecting business, bigger I of.

the you’ll next expect where XX really over over growth you that XX well to that’s that see months. So double-digit to see

David Haberle

for going more The operating play and normal. uncertainty others margin or it, your for business the bit this feel this wider how quarter I in gross a And Got out getting there Steve. also if than you, could, then a mix? to in that’s than Is new just of Steve. any range is is terms

Steve Litchfield

honest, done doubling very with business are Look, size let’s I acquisition that’s a sure. Yes, large be carve-out. we a right, our in mean, of the

there So is here. there some look, okay, of uncertainty, lot moving – parts so, a

as earlier, year, supply from about I range forward, kind services. a clearer, we I and would be see probably and am are a just think I into a away we mentioned going chain. of these move expect confident have and So more next range. us is We this What it you own we again. get that then get completely for lot to narrow wider confident that Things to lot transitional prudent

Kishore Seendripu

QX have want into QX partial we the do that quarter expenses what expenses. a will are in actually quarter. even real So QX, first you And lot many right? even service the account was be learned take of transitional a to categories, And in we

So be well will no first we quarter, with have the go actually clean service sort DSA to – QX into costs. of

we’re are really about assets than say itself pretty we it. progress. saying confidence at a at would do that our very good – what our point, should that making, And say, really a acquired of the is that would I managing up. have think track we gross I record at good, stage. we We margins do good better I And for similar this job are So steady at this speaks we this

Steve Litchfield

We – Yes. did, next XX% of kind over mean, low I years. to kind business XX it acquisition the points gross of doing mean, up acquisition the The was X.X that took Kishore’s last point, last the I over we year, margin.

a track So we record a And good just demand, really here. strong by the do really mean have business. right? hold gotten have of we’re we I benefiting

So of gross improve us margin. going take bit little to a the it’s time to

bit going QX you we as our gross a get are forward. hands to So going while see on the this, it’s lighter on mean progression a margin in little I nice

David Haberle

Thank you.

Operator

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

Kishore Seendripu

operator. Summit X participating conference Barclays and November at everyone want conference on Network Stifel’s December know Virtual Roth conference the Global I just on Technology November we’ll the to XX. you, Security on TMT XXXX Thank conference let X XX, Midwest December Fargo be one-on-one Needham XX, to Communications that November TMT on Virtual XX, the growth and Wells on

Just hope look Have for quarter. don’t we of conferences progress forward us and you there. these all to with our a many reporting next you thank to of before being to that joining With connect reminder are on and if you or today. then Thanksgiving we see all that you a virtual to talk said, you happy you

Operator

today’s concludes conference. This

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

MaxLinear (MXL) 8 Nov 202020 Q3 Earnings call transcript