MaxLinear, Inc. Q1 FY2025 earnings call

• Q1 results exceeded guidance with $95.9 million in revenue, non-GAAP gross margin of 59.1%, and reduced operating expenses.
• Made progress towards return to profit with new product wins in high-speed datacenter interconnects, PON, Wi-Fi, and Ethernet.
• Saw improvement in customer order rates and backlog.
• In infrastructure, made progress with Keystone PAM4 DSP product, demonstrated Keystone-powered modules at Optical Fiber Conference, and showcased Rushmore 1.6 terabyte 200 gigabit per lane PAM4 DSP.
• In wireless infrastructure, demonstrated Sierra radio system on chip at Mobile World Congress and has strong potential for growth.
• In broadband, expecting recovery with ramp of single-chip integrated fiber PON and 10 gigabit process gateway SoC plus tri-band Wi-Fi 7 single-chip platform solution with a major Tier 1 North American carrier later this year.
• Bookings continued to strengthen with incremental demand for cable data DOCSIS products, Wi-Fi, and Ethernet solutions.

Total revenue for the first quarter was $95.9 million. Infrastructure revenue was approximately $27 million, broadband revenue was approximately $41 million, connectivity revenue was $20 million, and industrial multi-market revenue was $8 million. GAAP gross margin for the first quarter was approximately 56.1% of revenue, while non-GAAP gross margin was 59.1% of revenue.

• For Q2 2025, revenue is expected to be between $95 million and $115 million.
• GAAP gross margin is expected to be approximately and non-GAAP gross margin is in the range of 57.5% and 59.5% of revenue.
• Q2 2025 GAAP operating expenses are expected to be in the range of $92 million to $98 million, and non-GAAP operating expenses in the range of $55 million to $61 million.
• Q2 GAAP and non-GAAP interest and other expense each are expected to be in the range of $2 million to $3 million.
• Expect a $2.4 million tax expense on a GAAP basis and a non-GAAP tax rate of 10.5%.
• Q2 GAAP and non-GAAP diluted share count is expected to be approximately 87.0 million to 87.5 million.

• Uncertainty in the trade environment, including tariffs and geopolitical dynamics around semiconductors.
• Supply chain risks, though MaxLinear's supply chain is relatively good, but watching customer demand and how tariffs impact it.
• Volatility in certain markets like industrial multi-market, especially with China exposure.

Q: Christopher Rolland asked about supply chain risks, especially regarding broadband equipment manufactured in China and how to mitigate them.

A: Steven Litchfield responded that MaxLinear's supply chain is pretty good with no direct impact from tariffs on semiconductors, and most broadband customers have moved out of China. They are watching tariff proposals, especially on China, and customer demand.

Q: David Williams asked about the magnitude of design wins for Keystone DSP and the North American Tier 1 ramp.

A: Kishore Seendripu said they had 20 designs on display at the Optical Fiber Conference, expecting revenue from Keystone to double in 2026, and the North American Tier 1 broadband ramp is expected to start late this year with growth next year.

Q: Quinn Bolton asked about tariffs in Southeast Asia and semiconductor shipments to China.

A: Steven Litchfield and Kishore Seendripu responded that while there are uncertainties, demand in broadband is inelastic, and MaxLinear's lead time for chips is 16-20 weeks, so no immediate impact from tariff pauses.

Q: Ananda Baruah asked about pull forward of revenue due to tariff pauses.

A: Kishore Seendripu stated that lead time for chips is 16-20 weeks, so no immediate impact from 90-day tariff pauses, and they will be measured about any spikes in orders.

Q: Richard Shannon asked about wireless infrastructure revenue growth from content and unit side.

A: Kishore Seendripu said wireless infrastructure revenues are expected to grow with recovery in millimeter wave, microwave, backhaul transceivers, modems, and strong traction with the single-chip radio unit platform.

Q: Suji Desilva asked about content gain in broadband growth.

A: Kishore Seendripu explained that new product cycles in broadband are driven by BOM expansion, such as transition to XGS PON, Wi-Fi 7, and DOCSIS 4.0, leading to content increase.

Q: Tim Savageaux asked about concentration of AI optical revenue.

A: Kishore Seendripu said AI optical revenue is concentrated with major data center module makers, expecting a two-thirds, one-third spread.

Q: Karl Ackerman asked about broadband growth drivers and inventory date target.

A: Steven Litchfield and Kishore Seendripu responded that broadband growth is from cyclical recovery and new product wins, and inventory is expected to come down for a few more quarters before stabilizing.

Q: Tore Svanberg asked about supply chain contingencies and inventory date target.

A: Steven Litchfield and Kishore Seendripu discussed supply chain contingencies being chaotic, and inventory expected to come down for a few more quarters before stabilizing as growth outlook improves.