Earnings call transcript Q4 2022

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Operator

Greetings and welcome to the MaxLinear fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference call is being recorded.

I would now turn the conference over to our host Leslie Green of Investor Relations. you. Thank

begin. may You

Leslie Green

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

to margin, laws our forward-looking including within meaning diluted including statements rate, quarter statements and non-GAAP count. securities XXXX GAAP and relating non-GAAP GAAP for Our revenue, comments today non-GAAP interest tax share expenses, other of guidance of the non-GAAP first GAAP the GAAP applicable and effective expenses operating and and and including non-GAAP and gross GAAP

relating broadband, will opportunities, our for markets, connectivity, markets improved across including timing target In be trends, and opportunities share in product opportunities statements markets. revenue concerning wireless, of the our statements for and launch forward-looking making arising and market to various we from infrastructure, without geographic our uncertainties products and industrial addition, and limitation

revise downturn risks SAMR economic recent arising timing manage anticipated global information in or Additionally, impacts related These Risk update review. to today. or Motion with has forward-looking pending and risks statements obtain or uncertainties on high products administration of Form of impacts from government anticipated increased transaction factor ability obligation its regulation our of our to of third to SEC outlined make timing. to statements certain the to our and the Silicon and which the competition, are to from with risks market MaxLinear today, for People's State forward-looking XXXX, no Republic Any inflation, China More for authorization indebtedness, and technology, negative statements. our substantial risk made including any statements the completion our of including is purposed a we XXst, of or these other section and Silicon of ended Motion and XX involve including forward-looking parties. year the December relationships filed we the will export the our forward-looking as relating failure filings, merger

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

report operating reconciliation encourage In the in and available We on press expenses margin, financial other GAAP addition, our gross on a operating we GAAP the review both certain including of and release presentations to non-GAAP margins, interest historical non-GAAP expense website. detailed and and our metrics, basis. investors

a to the We today its comparable associated GAAP reconciliation certain financial for to are a in meant future do with not as provide tax periods financial substitute for of project our associated uncertainty measures. measures ability stock-based including compensation of charges, considered not isolation non-GAAP be Non-GAAP future or guidance discussed and effects. inherent because the

are We management believes to business. because how as measures investors our to reflects it it be useful providing management this information

available will being our for website call weeks. is webcast and this also two be replay Lastly, a on

to over of Seendripu, call Dr. let MaxLinear. the now, And Kishore Kishore? turn me CEO

Kishore Seendripu

Thank everyone. you, and afternoon good Leslie

operating $XXX.X Our $X million, a up year million. record revenues with fiscal QX sequentially and was mark milestone breaking major revenue XX% in year-on-year, billion capping XXXX and $XXX flow X% the of cash

flows and operating $XX.X from non-GAAP XX.X% QX operating XX.X% margin non-GAAP was was million. activities margin gross cash Our of with

end in and data silicon markets and gains by our ability XXXX, we long-term spanning are share and forward, wireless and to customer we drivers are enterprise gateways, via in growth energized outperform optical broadband near center access look the content confident expanding Entering infrastructure. Wi-Fi connectivity, trajectory, our we fiber As platforms. of our

growing results achieved Our nearly fiscal revenue revenue quarterly XXXX quarter four record and both with business XXX% connectivity year-on-year.

the by and market new fueled and continues strong healthy design in a Our customer access rates customer of pipeline solutions, be our adoption existing attach XE wins. platforms increased X Wi-Fi connectivity of point growth to

Beyond expand and They in new volume our provider a revenues. design comprise service gateway XXXX. diversify opportunities further high routers third-party will are and continuing Wi-Fi several wins growth ramping in opportunity standalone

we improvements, favorable and our Wi-Fi dual in WAVXXX is versus look single Wi-Fi compliant generations the higher and increased sampling rates, product X the As differentiation, previous point standard performance beyond and family cost drive competition. chip X Wi-Fi structure solution It'll and tri-band currently first a is detach world. and ASP channel XE, industry's access

We expect to see late year. this enabled WAVXXX starting customer products

in QX, is early modernization normalized to inventory, a of growth, levels market carriers excess operators both expected, declined off moderates Coming an through experience as the in broadband. several quarters we and to as adverse new by demand strong channel customer even revenue Turning multi-year period digesting infrastructure enable our of enhance more of to a upgrade cycle believe revenue services. variety generating and of

design area a solid traction fiber industry PON globally solution. momentum. we revenue with fiber or rollout context, entering our XXXX, gigabyte the more have from access win particular is integrated XX additional XXXX, just leading market to government increased incentives growth are and with four and than In In beginning our gateway this XXXX upgrades year. are later with fiber PON strength times about processor strong Market excited of we this in we

and market, coming differentiation. technology PON share the continue relatively our expected product in in with fiber years we today and market gains have share unique small the Importantly

X America have Tier products, ramping our currently large in multiple customers a We including operator. North

management, We globally are beyond Ethernet, more. significant America, along winning silicon from expansion North designs content power Wi-Fi, with our and

infrastructure. to Moving

over XX% infrastructure in XXXX minimal wireless substrates by resulted demand. versus of which business capacity, shipments this in and shortages acute backend despite half second Our past year, grew

geographies. platform millimeter excited multi-band Throughout back to expanding of These as content, but market XG we platforms wave addressable our access infrastructure chain and wireless to we benefit also traction grow multi-band about double our are units. see our rollout improvements QX, are great and strong products, demand enter we However, wireless not growth supply only and large back see headwinds. sustained XXXX, from to microwave haul continue along excited our total several with for haul as across we the solutions

high speed revenues interconnect, and and the strategic production XXX optical a only CMOS, silicon. for confident generation that making over two industries gigabit good data feel years. with leading gigabit In finite PAMX We're meaningfully have inter in and qualifications ready next we second our center XXX data ongoing progress grow our will position

enterprise revenues customers of. operating industry's $XXX performance on performance A transition are flows and are of and and cash are plus gigabit hyperscale closely data strong very we working achievements, gigabit, of $X XXX QX billion are increasing -- support capstone center beyond. the module requirements proud XXX million to We the OEM with of very our which XXXX to which

we significantly technology also In offerings. platform advanced expanded product and portfolio our XXXX, our

We weakness have momentum, macro conviction design technology with Wi-Fi, developing a our expanding infrastructure. the access, optical in and wireless win of ongoing discipline. growth, and Thanks fiber strong leadership, consisting target to long-term as we extreme even navigate accelerating markets

significant Over core two a expense and are profitability management, our uniquely financials, growth poised MaxLinear to increased its years, last as innovation. transformative grow of in result have delivered we and offering, levels and product we scale. the XXXX once strong again investments Entering balancing discipline

combined of pending offer Motion forward product to and for also future growth excited are Silicon portfolio. the acquisition our are looking comprehensive We opportunities

Steve Officer. Officer Chief the that, turn me call Litchfield, Strategy to Corporate let our Chief Financial and over With now

Steve Litchfield

in Thanks $XXX.X XX% revenue and Kishore. X% with the up and up and XX% Total million, versus our XX% line fourth year-on-year, Broadband for million $XX entering revenue down quarter. quarter down was was year-over-year. the expectations QX QX was versus

and as result Connectivity XX% sequentially connectivity end Our sequentially of the revenue a $XXX market market up QX year-on-year. in million strong had growing quarter XX% demand solid in growth was in up opportunity.

supply revenue and end of versus flat our a down million the Infrastructure result $XX as of XXXX. market year-on-year. was quarter had in constraints in XX% expectations throughout line infrastructure substrates Our performance ongoing with prior

industrial Lastly, revenue increase $XX was million and in XX% and multi-market of year-on-year. sequential QX, increase a XX% an our

for gross revenues were $X.X XX.X% market quarter between The primarily GAAP by amortization. a fourth primarily were and in of of XX.X% end mix in and The the quarter the quarter shift driven the approximately the by intangible gross margins million asset related from previous and margins driven non-GAAP decline revenue. of fourth quarter. acquisition delta GAAP was non-GAAP

performance-based million and $X.X GAAP million, $XXX.X stock-based were Fourth expenses of $XX.X of including intangible of of and accruals million cost purchase operating equity compensation amortization assets quarter and integration Acquisition million. combined. $X.X

during $X.X was activities $X.X XXXX and Non-GAAP and for million. operating down were from was non-GAAP GAAP other million quarter generated flow margins $X.X interest In the operating million expenses million was versus QX $XX.X expense million. expense was cash operating other $XX.X QX. interest Non-GAAP XX.X%. QX and

than Xx generated flow XXXX. cash the for While compared increased more with year

of position, million cash, at debt we against to made $XX priority. $XXX QX continued which prepayment debt XXXX short-term make of in equivalents, a long-term and million and We QX, $XXX with our million prepayment investments. cash exited restricted approximately During today cash is

Our from day approximately outstanding for QX. down days fourth sales slightly was XX XX days quarter the in

Our essentially quarter. flat previous with X.X gross the inventory were turns times

our concludes of results. discussion This the QX financial

I want Before you give of an go of on status the to our acquisition we to guidance, Motion. Silicon update pending

a approval mid SAMR to for remain process We with optimistic XXXX progress continue close. and the

and cost debt have the for working to to fully expected We have committed capital. lower transaction actively our the financing optimize structure to

focused our looking excited combined opportunities technology business are about and the cultures soon. We bringing for together our forward to two

QX, for We currently of With revenue million. between that, and XXXX to let's guidance the $XXX expect quarter XXXX. be first million $XXX our turn in to

versus at of to constraints QX. Connectivity to timing to with is down we be are revenue compared expect we expecting by infrastructure, by increase QX, end as shipments expected between supply ease. quarter-over-quarter. down market, substrate QX to driven QX primarily Looking and be the continue QX In Wi-Fi revenue broadband

our revenue industrial expect be Lastly, to we markets down multi quarter-over-quarter.

range and by XX% of margins profit Gross quarter approximately to be gross near-term of XX% combination first end product, expect XX% mix. and revenue. to margin GAAP profit in a being non-GAAP driven gross of and customer be market the to margin We XX%

expect operating million range We to GAAP XXXX $XXX $XXX the in be million. expenses to of QX,

$XX QX, be million the expenses non-GAAP operating XXXX to We of in $XX expect range to million.

rate our tax XX% roughly tax to be GAAP be non-GAAP approximately QX We rate to XX%. and expect

We QX non-GAAP other share non-GAAP and count and $XX expect to expense GAAP $XX our and GAAP million, diluted QX roughly and interest be our we expect to million million. of $X

and to QX, innovative navigating are in with closing, enabling offerings strategic environment solid execution us In we business maximize product continued success. dynamic opportunities but are a

and access gateways, As macro our are where drivers we by energized broadband conditions. XXXX, fiber infrastructure wireless on growth less dependent our we're enter traction and Wi-Fi,

shareholder As and exciting always, focus future. an plan as and optimize value for to efficiencies, operational we we discipline, physical on will for continue today

call to With open we'd Operator? for like up the questions. that,

Operator

Thank conduct Instructions] you. [Operator our And question-and-answer session. at we'll this time

of question question. first Alessandra William comes your from state Our Please Vecchi Blair.

Alessandra Vecchi

a been probably taking for tough executing very and Thanks Hi. my what's congratulations question environment. on and

you've year. I think exceeded Is past an been that's on seeing backlog update there and you've within outs, et you cancellations, a maybe on strong in us the backlog commented backlog movement terms push how of trends give on increases, cetera? can

Steve Litchfield

Sure, Yeah. Alex.

So just on briefly backlog.

with So, we've last what couple of consistent saying somewhat over quarters. been the

shorter or asking They of that outs two backlog. quarters had shipment long. for of strong Consistent a been Lead with have we are said, this on moving of that customers have amount had backlog. definitely call highlighted I've have been push still We I last amount -- being and either kind times and but getting dates significant around cancellations. mean, now the

continue as last the over three we six months. to to we that navigate have today been So,

Alessandra Vecchi

possible? us any Wi-Fi those in Do give more you've That's back you -- in million the in to revenue. in Okay. year? in I impact $XXX color over terms there as QX still you think of well then And And constraints, see There talked can helpful. as past the about about how fully do the QX? that the does think on come

Steve Litchfield

Yeah.

So, on incredible year. we side, had mean I the an Wi-Fi

increase We to I made lot our shipments. a of of think XXXX progress. in we lots were able

a saw that. got in QX. as big in driven have You taken that results lot more customers pickup our we definitely of supply was A and online

excited. So, very

We're a continuing where get towards and environment mean, are are goal working that we've lot XXXX. a pretty increases, I to in see in highlighted a we next continuing talk pushing for very that, year the That channel, but hard good for ASP traction. there. about and or of to so said, difficult being it. That hard $XXX there's to inventory remains that goal we're million the we gain as we're You

Alessandra Vecchi

Thank back you. I'll With queue. go in that,

Steve Litchfield

Alex. Thanks

Operator

Gary Mobley Securities. Thank you. And our question. from next comes Fargo question Please your Wells of state

Gary Mobley

QX. sequential I commenting that for creating headwind? broadband Thanks revenue specifically equally and of you're taking for decline channel general about most guys. is amount down you sort XX% to the tone Or is I my sort balanced, expecting and of would appreciate basically question. Hey, the in market the two, connectivity the will sequentially, but it wanted the maybe about of ask between you both say more be reset? environment what

Steve Litchfield

Yeah. rates best and in mean I Gary, definitely jump we mean, consistent visibility. order mean, just I'll with kind there the to it's previous can. cloudy we're out comments and it here. so, my I navigate of about, trying I

I than others. into much this later think we kind came of

attraction to Wi-Fi good very We well think continue is to continues long-term overall, our of seeing perspective, we're offering exciting see really I this on product that And multiyear really cycle with from kind as demand. the a be fiber broadband as encouraging.

our I our I with best the our we're each own to clearly industry progress markets with kind there's very is in to of end going through. navigate I business doing our mean And work of term, offerings. channel mean, good think the about in that we're to have I all of some that long making the feel well. as -- that product inventory

Kishore Seendripu

Fiber launches. So, is you comes look expansion. and to with content a the Cable Philip storey at continuing been X.X broadband fiber and and story share side. right? big side DOCSIS real a content There has two the cable gains next is expansion when categories, in side growth the growth want

in think longer portion we I to where And we're the MaxLinear we growth place, the So, predict it's our is as very have excited secular right On vectors now. script channel what the a levels stated that call in basis, right is today. here positioned of have offerings. inventory term really product the hard

Gary Mobley

communicated comfort color. close? Appreciate in What And for the for they China if materials want process. -- communicated it. they follow-up, anything And you the that consideration? ask is you communication like Got gives the that as Are I approval about you mid-XXXX they my you with have China to the supportive with SAMR? SAMR with any asking gives

Steve Litchfield

Yeah. Gary, as about remain this do this I we have the not with year. we're mean, regard on with comment to to But closing said we going dialogue that SAMR, consistently SAMR. mid optimistic we've

Gary Mobley

it. you. Got Thank

Operator

your And state question Quinn & Company. Thank of Please our question. from Needham Bolton you. next comes

Quinn Bolton

the Hi, in Steve guys. Congratulations is, I Obviously, environment a on But Kishore, about you inventory entering the XXXX nice channel. guess, talked close visibility. low and XXXX. said, as you've

multi-market. sounds it in some some in I Wi-Fi. assume I probably think, in broadband, there's like there's industrial and

so my than is do And could sense back the inventory to come half a last burn start any the inventory question you longer typically potentially you quarter. can to give of second I corrections And the that you levels the last expect the you case consumption Do guess, second be to of this into or half time XXXX? think us year around?

Kishore Seendripu

it's you're -- Quinn, question Hey, very -- it's difficult is this asking. a

We get and are the OEMs to are is. inventory OEMs to in talking to the trying our is talking and hold the what the total everybody of channel operators,

correction of complete XXXX, is half out far of that the half into projecting we're difficult. the not do in to I expect second while first very So, the

Having said in our growth really of content on coming Wi-Fi we our fiber the that expansion too depending as and side, operator the that well. in ship outside in gateways wins products are

operator non-operator Wi-Fi, today, it there the are is more class. while the as in are in substantially the gateways So, opportunities platforms router growth retail that attached speak we markets, operator to

products. I'm infrastructure on So, growth the on center the we optimistic cycles question. back of on out answer a really by And things I speed fiber beginning would optical cloudy, ramp your data for strongly. as revert Wi-Fi strongly, then time interconnect say that the high going us, in that XXXX, our close will going -- depend But It's I very cannot else right? time but everybody

So, looking years those things we for many that are the the come. are set to very stage really strong forward because in they to growth

Quinn Bolton

the year? in is is mean, as timing it today guess, of and I this year you follow-up, of second either whether point? to tell share based half the deployments better the a Or on than ramps. you think think fiber routers call the Kishore. gains just you I first that Do half at tough of or third-party Wi-Fi too can infrastructure

Steve Litchfield

we're Look, the jump we beginning today, mean, is it think quarter. pain inventory just kind improve. the in to real like this. and feels then some start we see I I things seeing some I'll more So, that some hopefully, just where flush mean, or briefly. I we we're out of definitely additional next decline see And inventory see

they don't quickly. know, As you improve

don't half, that see hopefully, QX second and and a I to out improvements clear we're the but So, think see dramatic by of any QX. start the we'll expecting snapback inventory in in stretch imagination,

Kishore Seendripu

we're plan done disciplined and in continue a existence about how very we and right, stance, we've throughout thing as well always manner. very our to balanced a And operating maintaining conservative annual one a plan company, will See that. our do our that's investments public we

Quinn Bolton

color. Understood. Thank you for that

Operator

Our comes next from state Bank. Please Deutsche Seymore question question. your with Ross

Ross Seymore

asking Thanks for guys. the question. Hi,

horse kind the about I of think dead going forward. visibility everybody's beat

something different. Steve, change me the to let obviously new areas, any design win whether mentioned times. really uncertainty in about? are fiber, So, in just slightly the a design inventory, Kishore seeing frequency change in bunch try the stuff ask you're your or you market? in in Ex of But the Wi-Fi of any market activity and given You optical, shift share excited core sort that

Kishore Seendripu

beyond Thank -- century, billion beating signal it's a this to you, the Ross. our as founding at company anniversary have the so Hey, of brink speak. in mixed XXth the celebrate first almost to $X really dead So, and it's you We'll right? horse, go the plus really, company.

super excited, I'm So, right?

cycles next-generation a bit a there's asking question. the very themselves, operators, you're cetera, momentum basically, what there's are in good Actually, the You that for -- the quite froth RFPs asked very, to back these of design out of there a win presenting from design-ins. all is market? where et coming platform are And here question any there

XX-month the transformation for cycles slowdown. set So, over we'll next a happening. X for do From seven what to window, the is years Wi-Fi And generational the will long next stay we that's technology the because then, innovation it's stage a going time.

momentum on us And momentum design on write now important major and focus it's for these win side. very platforms win technology to very, the PON win so, to

side, and quite the next-generation design. cable maintain share win that feel we we'll the On comfortable our

that mix, the how in are world out, those even right? but you know So, works

So there's going on the And thing. we next-generation you this the momentum in good speed optical, again question. asked see some very in a high interconnect

So, I this we about about was not we talked know but wouldn't if talk good -- I this, about it. I feeling

Let two years me after it. tell you talking of that about

feels good. that So

of side, infrastructure the for but side conversations okay, wireless lots what almost conversations of we're the few another technologies. call transport On access it's of next-generation like, on transceivers years next on sort the to I designs, generation of going for access wait less transceivers,

I multi-band and the win, say in really on and win is you microwave and is identify optical battles side, in So, wireless their terms momentum design of technologies. wave play if fiber, next-generation a and all then would which to infrastructure what and froth bit some side, call where backhauls millimeter we the quite conversations in at want and transports, these the there transport design -- of about is

Ross Seymore

that I Steve, OpEx color. for to Thanks my side. going as over guess, all follow-up, the

point How -- trending to revenue I of as what quarter, about down anything to the we guys fourth And on the guidance relative you The the your million XXXX? throughout in guided on that job generally, there. side quarter? think given done the coming to $XX and we that You out of first kind uncertain first your guess, in should controlling sequentially guys below quarter. think a have the in in things, the OpEx strategy of great environment step-up what's

Steve Litchfield

Yeah. Ross, question. super it's a important

entire tick payroll as that in hard, one-time of year. standard variety somewhat kind So, got QX, kind throughout very look we're up bump us our look, the QX. Look, revenue you that they kind are legal also we tax We've you'll the looking in of of reduce QX. nature, you see up at do have of but your and increases declines, costs given OpEx in a

So, in and rest now. that in I slightly would the we're down of down come expect really the acknowledging market right it environment to the QX then year,

Ross Seymore

you. Thank

Steve Litchfield

Thanks Ross.

Operator

next Our Please Tore with question Stifel. from your question. state comes Svanberg

Tore Svanberg

just bit little could Thank Yes. into business a If your you. more. zoom I broadband

like even So, XX%, from based about on mean, be side, your with growing down And business to looks that going that's is its guidance, nicely. pretty I peak. XX% obviously, the it fiber

where XX%, out? exactly flatten So, I a is. inventory do start you get business sense do when appreciate XX%, But to for will you start the that to don't know channel down

Steve Litchfield

environment the customers that. lot great as ordered same question. the seen, wrestling with supply that. We're very -- customers time, a And at up their dynamics, I just I mentioned numbers. think It's good a murky naturally of it's backlog We've ahead some with before, now. and our there's chain And of have of right a

shifts, on down feel to recovery going we're we're to with the with the wrestling that first think of the it kind counting we It in getting down in -- improvements say so, the any XXXX. but major of But a decent kind levels. half. shakes tough But really to some feels half out. to And quite like see we're going see numbers you're bit come right wouldn't in modest are XXXX, of some year. I kind start second I of where everything Hopefully, does

Tore Svanberg

a good. fair. engineers Sounds group that? a you small, I small was quarter. that but acquisition of pretty comment just in made And to or That's noticed the it's I care know on

Steve Litchfield

Yeah.

being to group reduce -- looking up the so small end reduction will of company cost modest cost, So for that our so and consulting going the overall kind a yeah, forward. of engineers

Tore Svanberg

good. Very

about talked DOCSIS next up business the until one because, probably not X. question that leg broadband seeing Just you last Kishore,

best there material be a driver as when a for company? what's will as more your on guess So, X.X MaxLinear timing DOCSIS

Kishore Seendripu

are speaking we Tore, cable the here. So, side of

the first And recovery, one the DOCSIS unit which are launches being two there really the would one catalyst with a would X.X for think I and expansion Wi-Fi right? cable the be the X ASP Wi-Fi to X.X the a is the Wi-Fi with growth, links be And X. some When then DOCSIS. other refresh big X. growth, in through right? next-generation

I So that it. is sequence think a of

So, offerings. expect terms XXXX in of these beginning in the to happen that of second I would sometime half new

Tore Svanberg

Thank helpful. you much. Very very

Operator

Thank you.

Benchmark question. Our Please your next state the comes with question Company. from David Williams

David Williams

and good tough this on navigating congrats environment. afternoon Hey,

First, just ask, of maybe given think WiFi, quarter any sequential I wanted in think to that was connectivity is any that you of pulled strength the that kind sequentially, you you maybe decline? XX% just do there the first that that saw is to of forward from the contributing

Steve Litchfield

Hey, mean router would it, were trying to David. the up I planning of the talking some to We capture describe really third-party guess, about We're way able of capture more I I catch we were year. business. that. throughout this to

in but that as next are gateway come fair attachment that bit, which design anticipating the them then we base and of router both we between revenue stream. also customer from is amount, some revenue year some really, a moderate very a fall about that about. of wins It's look down us. I were another first are revenues we've diversified for think got excited half, the into the business excited so we And and a I additional think off, of third-party particular

in But first the a in it's Wi-Fi think and us I for half. to short-term, basis. something continue going connectivity to So that growth little see go-forward bit on the specifically you're come down will a fuel

David Williams

this is pressures you're just tends bounce than think, any if looks a Thanks. then the And pricing on of How of either was I side mix. we sales cost maybe seeing by quarter input lower, or driven like it this can all it Great. then -- and little margin or talk bit side, on going the much mix to you more gross it And expected maybe -- maybe really the the back. favorable to side? to it's of on Okay. because the of

Steve Litchfield

of in us infrastructure so Yeah. of of yeah, I gross kind business, shortages the it margins. lower some related. regard a how newer with the with QX. margins, mix lot recall, connectivity the mean, area in if the some really hurt We And talked about so substrate then just to you business was

QX. So that raised will in start to guidance thus, the recover and

So that's encouraging.

the With subjected have mean, of doesn't our ASP you really to I pressure. isn't a regard lot most -- to pressure, business ASP know, of as

I think are that's like we're the around routers that, basis. newer we're products, things lower certain there that a of see of that And excited it. places the about third-party one but prepared the cost potentially on some edges, the could go-forward for structure

we gross margins committed up to remain mid So XX those levels. getting to

Kishore Seendripu

ASP Pricing not in the the up because in in inventory in a like channel. broadband channel, there's And our business how the lot really it's of the built side. does pressures you change much can ship

So, the FX are more limited.

paid bit, the like year. was spoken demand call that happened prices was with lot product sort declines, of to us last the our hurt product. ordered what of extra was there foundries even to has you we get what more, when catches of of And we but now, So, a now a However, has bit. volatile higher companies raised paying scrambled demand being a more listening monies and that also the quite And up packaging customers that course, about, sort demand though there product to secure at much the right? I costs the because

David Williams

so Thanks guys. much Appreciate it.

Steve Litchfield

Thanks David.

Operator

question with state Susquehanna. from your next comes Please Christopher question. Our Rolland

Christopher Rolland

expect we into was potentially well? more on And to supply Could would you equilibrium? you to at online see I And could When come on going there quarter we Thanks think do be still infrastructure as guys. June guys shortage wondering there? more is guided a substrate availability. there? an question. up. illuminate up if for Hey, the little a you the see Great could

Kishore Seendripu

Chris. Hey,

even would I in capacity any or less anybody supply. now think issues don't is substrate, that system anymore the On say for the there

lines -- think We The way that middle, second recovery of lot at should a have them right? are process the down. end the process by we we time infrastructure. the completely needs where of issues, is the And our I place certain up. wireless cost has a qualification process the for feeling quarter lot in time been a tragedy now that capacity product process are recovery hit whole has no into will and

is ramping capacity we've and the Now other got between. that available, cycle a that to is calling, alternatives but we're up gestation in product because there want don't to stop we

don't forward issues once past moving quarter I are or infrastructure a wireless so. So, capacity in see we

Christopher Rolland

is take specific over And shot That but don't year we or Kishore guys if you numbers, Thank helpful. looking very then Steve, need to for maybe this, full lastly, want out XXXX. the at you. a

of you you regarding kind know could would you could growth think of that us, guys helpful? force force your If very kind drivers four your rank rank given I that the segments, outlook, be just for if

Steve Litchfield

take stab or look, the the of look mean, by year it. wireless at for Kishore to as going infrastructure to year. we're just definitely, at the not some But I'll I market. on I a comment end XXXX, mean, entire look, company is areas, well do this going Look, guide as whole I

the got and and area, the inventory we will to of the -- through, think connectivity first year work broadband I a connectivity half in and be the that there is headwind. that

I growth focused as well. getting Wi-Fi market our about that some industrial of this fiber so -- with I really know well. as kind of business do multi-market, gone as think think, somewhat share be how a probably winning mean, that's But I play some the And will of the very inventory the dynamics But bit. more remain out. then on well offerings But seeing the I this as quite we're of subject I more we to on

out those exiting into of things XXXX. that are So, lead this XXXX us really and

Kishore Seendripu

call whatever traveling. it China or you now is is factor, don't And of about there Everybody is too. movement I there's know that, the free how no have mean, COVID an outside you I policy, many now. but is thought

and Second does vector. the a back And then that's snap of eye fall. China half does create keeping I one out really an it positive sort am

Christopher Rolland

fantastic. guys. That’s Thank you,

Steve Litchfield

Chris. Thanks

Operator

next from Capital. Loop comes Baruah your question. state question with Our Ananda Please

Ananda Baruah

for the Yeah. Yeah. Hey, taking guys. question. you Thank

there regards interesting -- from sort customer Just if demand a anything of to I a to couple is On could. with perspective? there glean verticals,

Steve Litchfield

products. operator I We I that's mean mean, have of key half some definitely that that's our year. about customers. days. of in early wins of exciting, talked fiber very the about don't the happening I so Tier specific we ramping kind know our first had some like X

that's year your the first little very all infrastructure customers we'll that platforms of our those growth of closely some maybe well. made lot deployments, X a decisions to or Kishore's to bit comments wireless soon with for And are the earlier, definitely as we're got for engaged the all something And probably then future well. lot as that's half nice platform typical being So a exciting. be pointing the side the a We've operators. in as on fiber see Wi-Fi of

Ananda Baruah

as you And the Okay. pulls go then, Got I and it. margin. are useful. Steve, through just guess, what pushes That's guess we kind I year of gross the on Do here mean would -- the much move, that can around? what expect And I movement? were -- be you if thing? margin expect the and move for the do potential to they

Steve Litchfield

in us had I working -- QX. think Look, everything we against

we mean, showed I think definitely that that improves. in the I guidance.

do line. et not transceivers, industry getting that given with line higher, improvements. benefit some cetera, much the much of will kind then in our the just doesn't cost structure don't ramp the start mix breakout products, I seeing see think definitely I swings yet the our I of mean, But we but the half, of in gross the from standpoint, shift change through and to I big margin also there infrastructure of itself backhaul we're dynamics, getting know right? a that first some kind as modems, year. get see up I and don't going So,

talked that's of Cost structure is kind much we've a highlighted out. we that that first single lot can monolithic Wi-Fi So, lower. that chip get X about

a starts that of to the as can it year, ramp in business next so meaningful half be second more And contributor.

Ananda Baruah

That’s I it. very appreciate helpful. Thanks.

Steve Litchfield

Thanks Ananda.

Operator

Our next comes Suji question Please Partners. your with question. from state Roth DeSilva Capital

Suji DeSilva

Steve. Hi, Kishore. Hi,

X, So, XE, it I'm the there? versus X. your will the those design do in win WAVXXX for Wi-Fi potential would to that think be come Or the gains similar? further there looking Wi-Fi share What for in Wi-Fi ahead current is to you a as be start

Kishore Seendripu

our attach platform own rates on is XX%. close X, even is really look, So, Wi-Fi to our not Suji, not XE

So, it's that. than less

gateways mandatory higher to as potential all access the of the sort smaller, even of much Wi-Fi become or is lower units. So, broadband sort tier attachment growth has the

will the have yet. attach quite design And assignments, the not So, increase happened believe yet rates bit. that I allocation a Wi-Fi X

towards the happen I of end think they the year.

the are consumer market. is in what the in fest no do we and so, And call there the not slack in se. We such side I non-consumer markets, markets, per of the client

the RFPs of operators about talked the -- next-generation essential looking X part happens the the end Wi-Fi bids, an you to sort think, I the is year So, where but at are it of I all it. these case, at our in platforms, of when the

all now, that. pricings things that putting include and bids right we're So, in like

Steve Litchfield

attach So, cable, the like a but definitely, that, just about I in mean, mean, have talked to higher we've definitely follow Suji. of those markets rate, rates. attach we we I some got on go significant much to just ASP gives and more ability Wi-Fi X. up I'd WiFi over and will Wi-Fi also you, the room to X that. us X really be get remind go increases

Suji DeSilva

you, helpful question for the Steve. color. Thanks next Steve. Maybe Very is

debt planned acquisition. related going the to to Just back the Silicon

You talked debt like deal elaborate contingent whether that? restructure rates to Or it what And is Can guys? the there. in said. or just is the that you revisit you for financed, about sounds somewhat is some on the potential that deal you on opportunity

to want I So, Thanks. clarity there. just get

Steve Litchfield

Yeah.

capital financed. So, in improving there. to prepared is or of increasing the sure. I mean, The deal us said on cost about our continuing Yeah. I work remarks --

interest. some at move some of lower up can kind It comes to rata rates. we looking pro market, where share. We've the So additional into had pick slightly

the we're achieve At that slower that the the cost. long-term lower especially now. through but make organizations, disciplined that exciting. spending, between in got very very rates we periods And Clearly, is we right while some sure we're that And interest things debt so the confident synergies we're gone have on overall the the doing one ultimately, savings up. achieved, be that's cost can two that very to of the and of in going encouraging around growth can these same we're the short-term, time, to

Suji DeSilva

Great. Thanks Steve.

Steve Litchfield

Thanks Suji.

Operator

you. Thank

comes Richard question. state from Craig-Hallum. Please with question next Our your Shannon

Richard Shannon

PAMX. here. How kind you're these or And the really I'll gig, of that's hyperscalers? first frame there? taking the XXX Are Thanks second position Kishore, here my wins question of kind you Especially Hi, eventually little your looking layer of back guys. assume you awarded you then I ramp? expect as breadth optical at and characterize to to the you expecting share important can on well. a more to engagements maybe doing? ask what bit of across peel for be point influence kind of do time

Kishore Seendripu

Okay.

ramp that even depends. XXX XXX various has our the hyperscalers think Everybody in I into with leaders, the or that, everybody PAMX, PAMX gig of gig different XXX time into PAMX some So, or the a and different said Having so some -- X plan. X or times by gig PAMX X.X it are is followers. terabit line

and in on in is and with -- that out. to first it We're terms the OEMs on side, we'll of launch and get design-ins that leader is the -- as here XXX-gig we the well So when called. be the one, in plays new working the two And the hyperscalers gig, process. their the XXX

couple course, hyperscale OEMs and centers, the Of have we with have to incumbency, of are got best leader. traction product, supply good that right? two a They we and the have we data don't but

just follow them. So you

be of have product But expect probably themselves, for sometimes, year, we on to sync But a substantial we which it for custom half still, a -- have of are, from And than however, of opportunity start where we is the ramp them our And we latter visibility lot second this a to one initial really the much sometime would expects earlier. earlier. one. will in have shipments growth. that

through shipping flush pilot that the are right and qualification to and quantities We go now has entire chain.

I as -- nice – happens will look XXXX up and a milestones XXXX. sets what at So And happens XXXX and what beyond. to to the it I pointers would very really in

Richard Shannon

Kishore great. for that. all thanks It’s

Second this question you me. the color you're here that I operator Thanks. going Maybe split places any as U.S., of year. X bit contribution to got give whether this a here your can see here. a America. expecting be Europe is Tier the that, little here material on would fiber growth for business you in more to kind or other nice you've wondering know all can the if great. North in we're But or characterize America Latin outside That's geographical

Kishore Seendripu

Great.

gosh, that And that There lower really X much we've not Tier to On I are the heavily they fiber North and a fast. the actually, already has earlier admit it's quarterly product products, what call products. tens very took field on also so done America this victory America I is started. growth you the the grown victory in because tier have of revenues thousands. in non-gateway in it's actually North on. nicely, ramp my big the as boxes spike in away see operator right commented And may But well. And and of substantially. a concentration But side, so inventory the have the there and

for the operator. this particular through this shipment optic remaining premier and we where particular credibility the establish gateway world's the Now an probably to product, selling bids is exemplar is it and operators one fiber who in are

that's So, I what think out. it plays

be India over time one for line next of will we talk talk tier would quantities. lower always in the non-China in all today and tend we Europe shipping to when we the us. America in think but fiber, the like will come they are And market. potentially, I good products North be pretty ones of

Richard Shannon

Okay. Great. Thanks guys.

Steve Litchfield

Richard. Thanks

Operator

to there this no you. at for are remarks. Seendripu hand I'll Thank questions you. And over further Dr. it closing Kishore Thank time.

Kishore Seendripu

The Twelfth Annual in Thank let you Capital on Markets this in very Conference to Blair the Loop know that Tech Seventh California; ROTH Annual the we'll flowing in Dana want Point, XXth Innovators March year William XXXX XX. Conference Conference order. the the XX; short in just much. Susquehanna and Conference everybody Investor conferences New at York; Technology Annual I participating be March

say over the that that's momentum developed want a very large portfolio technology got I years. we've to two In my last nice conclusion, and a

$X billion same one hit X,XXX scale time, strategic. that big at point. the compete actually customers a company, revenue a in associate At it's a having signal are and for up us where started We we -- as being can company has first celebratory find mixed milestone for the

a Thank movement we we Internally, us. see success. for and I soon. proud, very Bye. very think you you for much great sharing And are so, it's are and future

Operator

Thank may parties concludes All Have great evening. a That conference. you. today's disconnect.

MaxLinear (MXL) 1 Feb 232022 Q4 Earnings call transcript