MaxLinear : Earnings Release Q1 2019

Published: 2025-07-11 05:34:13 ET MXL

Published on 07/11/2025 at 05:34

May 1, 2019

CARLSBAD, Calif.--(BUSINESS WIRE)-- MaxLinear, Inc. (NYSE: MXL), a leading provider of RF, analog and mixed-signal integrated circuits for the connected home, and industrial and multi-market applications, today announced financial results for the first quarter ended March 31, 2019.

GAAP basis:

$58.2 million in the year-ago quarter, or 53% of net revenue.

$0.00 in the prior quarter, and diluted earnings per share of $0.03 in the year-ago quarter.

Non-GAAP basis:

$36.7 million or 42% of revenue in the prior quarter, and $39.3 million or 35% of

revenue in the year-ago quarter.

"In the first quarter, we continued to execute on our core 5G wireless, optical fiber datacenter interconnect, and power management initiatives that comprise our growing Infrastructure revenues and target addressable market. We established further design-win traction in the hyperscale datacenter end-market with our 400 gigabit PAM4 DSP SoC with

integrated laser drivers and companion quad-TIA system solution. We also achieved significant engineering milestones in customer engagements for our industry-leading 5G wireless 14nm CMOS 4x4 Quad RF transceiver system-on-chip solution. This brings us closer to realizing production revenues in the large and transforming high speed optical data center interconnect and 5G wireless access infrastructure markets. At the same time, we are effectively navigating interim weakness in our connected home market owing to technology transition challenges of our end customers, general demand softness, and the impact of

U.S. government import tariffs on our customer manufacturing supply chains," commented Kishore Seendripu, Ph.D., Chairman and CEO.

"In the quarter, solid revenue results in line with our guidance, gross margin improvement, and lower operating expenses due to disciplined execution, have yielded strong operating cash flows of approximately $16.0 million. As a result, we pre-paid an additional $15.0 million towards our outstanding term-loan debt during the first quarter of 2019, which further reduces our leverage ratio. In the second half of the year and longer term, we are excited about the operating leverage in our business that will be enabled by improvements in our cost structure and continued execution on our infrastructure growth initiatives," continued Dr. Seendripu.

The company expects revenue in the second quarter 2019 to be approximately $83 million to $88 million, and also estimates the following:

MaxLinear will host its first quarter financial results conference call today, May 1, 2019 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). To access this call, dial US toll free: 1-877-407-3109 / International: 1-201-493-6798. A live webcast of the conference call will be accessible from the investor relations section of the MaxLinear website at https://http://investors.maxlinear.com, and will be archived and available after the call at https://http://investors.maxlinear.com until May 14, 2019. A replay of the conference call will also be available until May 14, 2019 by dialing US toll free: 1-877-660-6853 / International: 1-201-612-7415 and Conference ID#: 13689640.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements concerning our future financial performance (including our current guidance for second quarter 2019 revenue, gross margins, and operating expense and statements concerning expectations of potential developments in our target markets, including management's views

with respect to trends in our DOCSIS, Connected Home and Infrastructure markets. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by the forward-looking statements. Forward-looking statements are based on management's current, preliminary expectations and are subject to various risks and uncertainties. Risks and uncertainties affecting our business and future operating results include, without limitation, intense competition in our industry; our dependence on a limited number of customers for a substantial portion of our revenues; uncertainties concerning how end user markets for our products will develop, including in particular new markets we are entering but also existing markets such as cable; potential uncertainties arising from continued consolidation among cable television and satellite operators in our target markets and continued consolidation among competitors within the semiconductor industry generally; our ability to develop and introduce new and enhanced products on a timely basis and achieve market acceptance of those products, particularly as we seek to expand outside of our historic markets; potential decreases in average selling prices for our products; risks relating to intellectual property protection and the prevalence of intellectual property litigation in our industry; the impact on our financial condition of the indebtedness arising from the Exar transaction; our reliance on a limited number of third party manufacturers; and our lack of long-term supply contracts and dependence on limited sources of supply.

In addition to these risks and uncertainties, investors should review the risks and uncertainties contained in our filings with the Securities and Exchange Commission (SEC), including our most recent Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 5, 2019 and our Current Reports on Form 8-K, as well as the information to be set forth under the caption "Risk Factors" in MaxLinear's Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, which we expect to file shortly. All forward-looking statements are based on the estimates, projections and assumptions of management as of May 1, 2019, and MaxLinear is under no obligation (and expressly disclaims any such obligation) to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

To supplement our unaudited consolidated financial statements presented on a basis consistent with GAAP, we disclose certain non-GAAP financial measures, including non-GAAP gross margin, operating expenses, operating expenses as a percentage of revenue, income from operations as percentage of revenue, effective tax rate, net income and diluted earnings per share. These supplemental measures exclude the effects of (i) stock-based compensation expense; (ii) accruals related to our performance based bonus plan for 2019, which we currently intend to settle in shares of our common stock; (iii) accruals related to our performance based bonus plan for 2018 which we settled in shares of common stock in 2019; (iv) amortization of purchased intangible assets; (v) depreciation of fixed assets step-up; (vi) professional fees and settlement costs related to our previously disclosed IP and commercial litigation matters; (vii) severance and other restructuring charges; and (viii) non-cash income tax benefits and expenses and effects of the 2017 Tax Cuts and Jobs Act, or Tax Act, as applicable. These non-GAAP measures are not in accordance with and do not serve as an alternative for GAAP. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our GAAP results of operations. These non-GAAP measures should only be viewed in conjunction with

corresponding GAAP measures. We compensate for the limitations of non-GAAP financial measures by relying upon GAAP results to gain a complete picture of our performance.

We believe that non-GAAP financial measures can provide useful information to both management and investors by excluding certain non-cash and other one-time expenses that are not indicative of our core operating results. Among other uses, our management uses non-GAAP measures to compare our performance relative to forecasts and strategic plans and to benchmark our performance externally against competitors. In addition, management's incentive compensation will be determined in part using these non-GAAP measures because we believe non-GAAP measures better reflect our core operating performance.

The following are explanations of each type of adjustment that we incorporate into non-GAAP financial measures:

Stock-based compensation expense relates to equity incentive awards granted to our employees, directors, and consultants. Our equity incentive plans are important components of our employee incentive compensation arrangements and are reflected as expenses in our GAAP results. Stock-based compensation expense has been and will continue to be a significant recurring expense for MaxLinear.

Bonuses under our executive and non-executive bonus programs have been excluded from our non-GAAP net income for all periods reported. Bonus payments for the 2018 performance periods were settled through the issuance of shares of common stock under our equity incentive plans in February 2019. We currently expect that bonus awards under our fiscal 2019 program will be settled in common stock in the first quarter of fiscal 2020.

While we include the dilutive impact of equity awards in weighted average shares outstanding, the expense associated with stock-based awards reflects a non-cash charge that we exclude from non-GAAP net income.

Expenses incurred in relation to acquisitions include amortization of purchased intangible assets and depreciation of step-up of property and equipment to fair value.

Restructuring charges incurred are related to our restructuring plans which eliminate redundancies and primarily include severance and restructuring costs related to exiting certain facilities.

Expenses incurred in relation to our intellectual property and commercial litigation include professional fees incurred.

Income tax benefits and expense adjustments are those that do not affect cash income taxes payable. Effects of the Tax Act were excluded from Non-GAAP effective tax rate, as applicable.

Reconciliations of non-GAAP measures for the historic periods disclosed in this press release appear below. Because of the inherent uncertainty associated with our ability to project future charges, particularly related to stock-based compensation and its related tax effects as well as potential impairments, we have not provided a reconciliation for non-GAAP guidance provided for the second quarter 2019.

MaxLinear, Inc. (NYSE:MXL) is a leading provider of radio frequency (RF), analog and mixed-signal integrated circuits for the connected home, wired and wireless infrastructure, and industrial and multi-market applications. MaxLinear is headquartered in Carlsbad, California. For more information, please visit https://www.maxlinear.com.

MXL is MaxLinear's registered trademark. Other trademarks appearing herein are the property of their respective owners.

2019

2018

Net revenue

$ 84,635

$ 87,627

$110,827

Cost of net revenue

39,558

41,727

48,159

Gross profit

45,077

45,900

62,668

Operating expenses:

Research and development

27,399

29,667

31,121

Selling, general and administrative

23,591

25,208

27,117

Restructuring charges

1,917

1,737

Total operating expenses

52,907

56,612

58,238

Income (loss) from operations

(7,830)

(10,712)

4,430

Interest income

147

Interest expense

(2,975)

(3,194)

(3,894)

Other income (expense), net

(655)

229

(571)

Total interest and other expense, net

(3,483)

(2,941)

(4,447)

Loss before income taxes

(11,313)

(13,653)

(17)

Income tax benefit

(6,462)

(13,964)

(1,864)

Net income (loss)

$ (4,851)

$ 311

$ 1,847

Net income (loss) per share:

Basic

$ (0.07)

$ -

$ 0.03

Diluted

$ (0.07)

$ -

$ 0.03

Shares used to compute net income (loss) per share:

Basic

69,968

69,186

67,674

Diluted

69,968

71,267

70,440

2019

2018

Operating Activities

Net income (loss)

$ (4,851)

$ 311

$ 1,847

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Amortization and depreciation

16,863

19,125

20,084

Amortization of debt issuance costs and accretion of discount on debt and leases

402

287

Stock-based compensation

7,747

7,999

8,473

Deferred income taxes

(6,476)

(8,827)

(2,332)

Loss on disposal of property and equipment

430

Impairment of leasehold improvements

1,442

Impairment of long-lived assets

2,182

Gain on extinguishment of lease liabilities

(2,880)

(Gain) loss on foreign currency

567

(268)

471

Excess tax benefits on stock-based awards

(1,737)

(820)

(797)

Changes in operating assets and liabilities:

Accounts receivable

(142)

(867)

(24,533)

Inventory

(1,015)

7,676

Prepaid expenses and other assets

604

1,905

1,003

Leased right-of-use assets

645

Accounts payable, accrued expenses and other current liabilities

1,921

648

(421)

Accrued compensation

893

2,387

2,502

Deferred revenue and deferred profit

(138)

Accrued price protection liability

2,489

2,036

(1,359)

Lease liabilities

(2,125)

Other long-term liabilities

(519)

(227)

(792)

Net cash provided by operating activities

16,045

24,173

11,971

Investing Activities

Purchases of property and equipment

(2,155)

(1,412)

(2,381)

Net cash used in investing activities

(2,155)

(1,412)

(2,381)

Financing Activities

Repayment of debt

(15,000)

(25,000)

Net proceeds from issuance of common stock

2,628

2,732

980

Minimum tax withholding paid on behalf of employees for restricted stock units

(4,419)

(2,606)

(2,391)

Net cash used in financing activities

(16,791)

(14,874)

(26,411)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

577

(1,939)

(258)

Increase (decrease) in cash, cash equivalents and restricted cash

(2,324)

5,948

(17,079)

Cash, cash equivalents and restricted cash at beginning of period

74,191

68,243

74,412

Cash, cash equivalents and restricted cash at end of period

$ 71,867

$ 74,191

$ 57,333

2019

2018 (1)

Assets

Current assets:

Cash and cash equivalents

$ 71,102

$ 73,142

$ 55,645

Short-term restricted cash

347

645

617

Accounts receivable, net

59,639

59,491

90,632

Inventory

42,753

41,738

45,758

Prepaid expenses and other current assets

5,479

5,595

8,413

Total current assets

179,320

180,611

201,065

Long-term restricted cash

418

404

1,071

Property and equipment, net

16,987

18,404

21,993

Leased right-of-use assets

21,543

Intangible assets, net

230,634

244,900

298,031

Goodwill

238,330

237,810

Deferred tax assets

58,067

51,518

41,426

Other long-term assets

3,583

4,664

7,318

Total assets

$748,882

$ 738,831

$808,714

Liabilities and stockholders' equity

Current liabilities

$ 73,483

$ 70,567

$ 67,061

Long-term lease liabilities

18,132

4,097

4,718

Long-term debt

241,044

255,757

322,896

Other long-term liabilities

8,019

8,474

7,591

Stockholders' equity

408,204

399,936

406,448

Total liabilities and stockholders' equity

$748,882

$ 738,831

$808,714

(1) Long-term lease liabilities have been reclassified from other long-term liabilities to conform to current period presentation.

2019

2018

GAAP gross profit

$ 45,077

$ 45,900

$ 62,668

Stock-based compensation

130

132

106

Performance based equity

Amortization of purchased intangible assets

8,424

8,875

8,969

Depreciation of fixed asset step-up

112

Non-GAAP gross profit

53,704

54,963

71,933

GAAP R&D expenses

27,399

29,667

31,121

Stock-based compensation

(4,213)

(4,399)

(4,374)

Performance based equity

(925)

(1,254)

(1,140)

Depreciation of fixed asset step-up

(6)

(76)

(329)

Non-GAAP R&D expenses

22,255

23,938

25,278

GAAP SG&A expenses

23,591

25,208

27,117

Stock-based compensation

(3,404)

(3,481)

(3,993)

Performance based equity

(939)

(948)

(1,049)

Amortization of purchased intangible assets

(5,798)

(7,994)

Depreciation of fixed asset step-up

(2)

(10)

IP litigation costs, net

(3)

(42)

Non-GAAP SG&A expenses

13,450

12,780

14,029

GAAP restructuring expenses

1,917

1,737

Restructuring charges

(1,917)

(1,737)

Non-GAAP restructuring expenses

GAAP income (loss) from operations

(7,830)

(10,712)

4,430

Total non-GAAP adjustments

25,829

28,957

28,196

Non-GAAP income from operations

17,999

18,245

32,626

GAAP and non-GAAP interest and other income (expense), net

(3,483)

(2,941)

(4,447)

GAAP loss before income taxes

(11,313)

(13,653)

(17)

Total non-GAAP adjustments

25,829

28,957

28,196

Non-GAAP income before income taxes

14,516

15,304

28,179

GAAP income tax benefit

(6,462)

(13,964)

(1,864)

Adjustment for non-cash tax benefits/expenses and effects of the Tax Act

7,478

15,035

3,837

Non-GAAP income tax provision

1,016

1,071

1,973

GAAP net income (loss)

(4,851)

311

1,847

Total non-GAAP adjustments before income taxes

25,829

28,957

28,196

Less: total tax adjustments

7,478

15,035

3,837

Non-GAAP net income

$ 13,500

$ 14,233

$ 26,206

Shares used in computing non-GAAP basic net income per share

69,968

69,186

67,674

Shares used in computing non-GAAP diluted net income per share

71,900

71,267

70,440

Non-GAAP basic net income per share

$ 0.19

$ 0.21

$ 0.39

Non-GAAP diluted net income per share

$ 0.19

$ 0.20

$ 0.37

2019

2018

GAAP gross profit

53.3%

52.4%

56.5%

Stock-based compensation

0.2%

0.1%

Performance based equity

0.1%

Amortization of purchased intangible assets

10.0%

10.1%

8.1%

Depreciation of fixed asset step-up

0.1%

Non-GAAP gross profit

63.5%

62.7%

64.9%

GAAP R&D expenses

32.4%

33.9%

28.1%

Stock-based compensation

(5.0)%

(3.9)%

Performance based equity

(1.1)%

(1.4)%

(1.0)%

Depreciation of fixed asset step-up

(0.1)%

(0.4)%

Non-GAAP R&D expenses

26.3%

27.3%

22.8%

GAAP SG&A expenses

27.9%

28.8%

24.5%

Stock-based compensation

(4.0)%

(3.6)%

Performance based equity

(1.1)%

(0.9)%

Amortization of purchased intangible assets

(6.9)%

(9.1)%

(7.2)%

Depreciation of fixed asset step-up

(0.1)%

IP litigation costs, net

Non-GAAP SG&A expenses

15.9%

14.6%

12.7%

GAAP restructuring expenses

2.3%

2.0%

Restructuring charges

(2.3)%

(2.0)%

Non-GAAP restructuring expenses

GAAP income (loss) from operations

(9.3)%

(12.2)%

4.0%

Total non-GAAP adjustments

30.5%

33.0%

25.4%

Non-GAAP income from operations

21.3%

20.8%

29.4%

GAAP and non-GAAP interest and other income (expense), net

(4.1)%

(3.4)%

(4.0)%

GAAP loss before income taxes

(13.4)%

(15.6)%

Total non-GAAP adjustments before income taxes

30.5%

33.0%

25.4%

Non-GAAP income before income taxes

17.2%

17.5%

25.4%

GAAP income tax benefit

(7.6)%

(15.9)%

(1.7)%

Adjustment for non-cash tax benefits/expenses and the effects of the Tax Act

8.8%

17.2%

3.5%

Non-GAAP income tax provision

1.2%

1.8%

GAAP net income (loss)

(5.7)%

0.4%

1.7%

Total non-GAAP adjustments before income taxes

30.5%

33.0%

25.4%

Less: total tax adjustments

8.8%

17.2%

3.5%

Non-GAAP net income

16.0%

16.2%

23.6%

View source version on businesswire.com: https://www.businesswire.com/news/home/20190501005922/en/

Steven Litchfield Tel: 949-333-0080

[email protected]

Source: MaxLinear, Inc.

Disclaimer

MaxLinear Inc. published this content on July 11, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on July 11, 2025 at 09:33 UTC.