MaxLinear Inc (MXL) Q4 2020 Earnings Call Transcript

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MaxLinear Inc (MXL 4.84%)
Q4 2020 Earnings Call
Feb 3, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings and welcome to MaxLinear's Q4 2020 Earnings Conference Call. [Operator Instructions] [Operator Instructions]

I would now like to turn the conference over to your host, Brian Nugent. Thank you. You may begin.

Brian D. Nugent -- Head of Investor Relations

Thank you, operator. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear's fourth quarter 2020 financial Results. Today's call is being hosted by Dr. Kishore Seendripu, CEO; and Steve Litchfield, Chief Financial Officer and Chief Corporate Strategy Officer. After our prepared comments, we will take questions.

Our comments today include forward-looking statements within the meaning of applicable securities laws, including statements relating to our guidance for first quarter 2021 revenue, revenue growth expectations in our principal target markets, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, tax expenses and effective tax rate and interest and other expense.

In addition, we will make forward-looking statements relating to trends, opportunities and uncertainties in various product and geographic markets including, without limitation statements concerning opportunities arising from our recently completed acquisitions of Intel's Home Gateway business and of NanoSemi, growth opportunities for our wireless infrastructure and connectivity markets, and opportunities for improved revenues across our target markets.

These forward-looking statements involve substantial risks and uncertainties, including integration and employee retention risks associated with the acquisitions; as well as risks arising more generally in our business from competition, global trade and export restrictions, potential supply constraints, the impact of the COVID-19 pandemic, our dependence on a limited number of customers, average selling price trends and risks that our markets and growth opportunities may not develop as we currently expect and that our assumptions concerning these opportunities may prove incorrect.

More information on these and other risks is outlined in the risk factors section of our recent SEC filings, including our Form 10-K for the year ended December 31, 2019, and our Form 10-K for the year ended December 31, 2020, which will be filed in the coming days. Any forward-looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward-looking statements. The fourth quarter 2020 earnings release is available in the Investor Relations section of our website at maxlinear.com.

In addition, we report certain historical financial metrics, including net revenues, gross margins, operating expenses, income or loss from operations, interest and other expense, income taxes, net income or loss, and net income or loss per share on both a GAAP and non-GAAP basis. We encourage investors to review the detailed reconciliation of our GAAP and non-GAAP presentations in the press release available on our website.

We do not provide a reconciliation of non-GAAP guidance for future periods because of the inherent uncertainty associated with our ability to project certain future charges, including stock-based compensation and its associated tax effects. Non-GAAP financial measures discussed today do not replace the presentation of MaxLinear's GAAP financial results. We are providing this information to enable investors to perform more meaningful comparisons of our operating results in a manner similar to management's analysis of our business. Lastly, this call is being webcast, and a replay will be available on our website for two weeks.

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

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Thank you, Brian, and good afternoon, everyone. Our Q4 financial results were strong and highlight record revenues, up 24% sequentially; record cash flow from operations of $74.3 million; and non-GAAP gross margin of 57.8%. While our Q4 results and Q1 guidance were impacted by the challenging and intensifying semiconductor manufacturing supply chain constraints, we are taking every possible measure we can to ensure that our customers are minimally impacted.

It is our topmost priority. Later in the call, Steve will outline our revised reporting categories. But in Q4, our broadband access revenue stood at 58%; infrastructure at 10%; industrial and multi-market, 15%; and connectivity at 18%. Now turning to some of the Q4 business highlights. In broadband access, end market demand remains very strong, driven both by our company-specific drivers and continued strong MSO deployment and subscriber broadband consumption trends.

In Q4, we continued to ramp and gain box level market share at our flagship DOCSIS 3.1 U.S. cable MSO platform. Additionally, we are benefiting from increasing SoC and front-end platform content driven by the continuing DOCSIS 3.1 upgrade cycle throughout 2020. Our new broadband access and WiFi SoC assets have added significant depth to our offering and expanded our served market across not only DOCSIS but also 10g PON fiber and other broadband access gateways.

Our connectivity business comprising WiFi, Ethernet, MoCA and G.HN, grew strongly in Q4 aided by resumption of MoCA 2.5 shipments to our flagship U.S. telco customer and to a new Canadian telco. We also realized the full quarter impact of our WiFi and Ethernet businesses. We are still in the early stages of penetrating the connectivity opportunities in our own large cable MSO and telco SoC platforms. Additionally, the pace of our investments continues to open up exciting new growth opportunities in connectivity. The WiFi Alliance recently selected our WAV664 platform as an official access point test bed for the emerging Wi-Fi 6E market.

Our WAV664 solution enables routers and gateways to deliver 4.8 gigabits per second in the 60 gigahertz band higher-quality user experiences, supports up to 256 clients simultaneously, and optimizes total network efficiency for high bandwidth and low latency. The expansion to a triband Wi-Fi 6E configuration of six gigahertz spectrum, combined with legacy 2.4 gigahertz and five gigahertz band, delivers a threefold increase in data capacity. We are making similar strides in our Ethernet road map development initiatives and look forward to sharing more details in the coming weeks.

In optical data center, we are seeing meaningful progress toward mass production ramp of our 400G PAM4 DSP in mid-2021 at our Tier one hyperscale data center customer. We also have strong early traction and ongoing adoption of our 100G PAM4 offering by Tier one customers. Both 100G and 400G PAM4 markets continue to have a tremendous growth outlook and will dominate cloud and edge data center deployments over the next several years. They are on track to sample our Keystone family of 5-nanometer CMOS 800G PAM4 SoC products in mid-2021.

Keystone solidifies our ability to capitalize the secure optical internet growth opportunity in the data center market with an industry-leading product. We have multiple customers already starting module designs in preparation with the chips' return. Turning to wireless infrastructure market, as expected, Q4 revenue declined due to the Huawei trade dynamic impacting our wireless backhaul business. However, our bookings support a strong Q1 demand.

Our customer and new product traction point to strong growth throughout 2021. In 5G wireless access, we have received strong positive feedback on our new 14-nanometer CMOS 5G RF transceiver, which is the industry's first eight times8 massive MIMO solution. In addition, we are moving aggressively to integrate our highly differentiated and critical design -- and critical digital pre-distortion NanoSemi IP technology into all our next-generation 5G platforms. During Q4, we also joined the 5G O-RAN Alliance, which is reshaping the radio access network industry into more intelligent, open, virtualized and fully interoperable mobile networks.

We further announced that MTI is using our transceiver in its remote radio units targeting open line deployments for 4G and 5G applications. Our high-performance analog business enters 2021 with lean channel inventory levels and improving attach rate funnel and exciting new product development that position us for growth in 2021 and beyond. Specifically, increasing power management attach rates across our broadband infrastructure applications will drive incremental content on our existing platforms.

We recently announced three new high DC/DC power modules focused on powering FPGA, DSP and SOC high current core and memory supply rails as well as our 5G transceivers, long-haul optical transceivers and cable infrastructure SOC. We are very excited about our organic infrastructure initiatives. Combined with our recent two acquisitions, we have greatly expanded our TAM, which now spans both high-growth and high-value broadband connectivity and network infrastructure applications. As a result, we are confident of driving strong profitable growth in 2021 and beyond.

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

Steven Litchfield -- Chief Financial Officer and Chief Corporate Strategy Officer

Thanks, Kishore. I will first review our Q4 2020 results, and then further discuss our outlook for Q1 2021. First, as Kishore alluded to and consistent with our prior updates, we are revising our reporting to align with changing end market conditions and our go-forward business priorities and growth opportunities. We will report four categories. In infrastructure, this will be an unchanged category with the products that you have seen from us in the past with our high performance analog, data center and wireless infrastructure products.

Revenue from this category was $17.9 million in Q4 and $76.2 million in fiscal 2020 versus $85.4 million in fiscal 2019. Our broadband category includes our prior connected home category plus the SoC business from Intel, but this category excludes wired connectivity. Revenue from this category was $113.3 million in Q4 and $244.4 million in fiscal 2020 versus $119.3 million in fiscal 2019. Our connectivity category includes primarily our MoCA and G.HN products and WiFi and Ethernet revenues from the Intel transaction.

Revenue from this category was $34.4 million in Q4 and $70.7 million in fiscal 2020 versus $33.4 million in fiscal 2019. Industrial and multi-market includes the previously reported revenue plus component revenues from the Intel acquisition. Revenue from this category was $29.2 million in Q4 and $87.3 million in fiscal 2020 versus $79.1 million in fiscal 2019. In terms of the Q4 trends on revenue of $194.7 million, our broadband business was up 38% sequentially, driven by a full quarter impact of the broadband and WiFi business from Intel as well as continued strong demand from cable products owing to the work-from-home dynamic, content increases and share gains.

Our connectivity business was also up 43% given the acquisition, but was also above our expectations, driven primarily by the strength of the WiFi demand. Our infrastructure business declined 17% sequentially, driven by wireless backhaul and high-performance analog weakness, consistent with our expectations. We do expect a recovery in Q1, as I'll detail in a moment. Our industrial and multi-market business was up 1% sequentially, with expected softness in HBA offset by the full quarter impact of the broadband and WiFi asset component-related revenue.

GAAP and non-GAAP gross margin for the fourth quarter were approximately 42.7% and 57.8% of revenue, respectively. This compares to GAAP gross margin guidance of 40% to 44% and non-GAAP gross margin guidance of 56% to 59%. The delta between GAAP and non-GAAP gross margins in the fourth quarter reflects the amortization of $18.5 million of inventory fair value adjustments and $10.7 million of acquisition-related intangible assets as well as $0.3 million of stock-based compensation and accruals related to our 2020 bonus plan.

Fourth quarter GAAP operating expenses were approximately $106.7 million, which was up quarter-over-quarter due to the full quarter impact of the two acquisitions that closed in Q3, partially offset by decreases in acquisition, integration costs and related restructuring costs. GAAP operating expenses included stock-based compensation and stock-based bonus accruals of $23.5 million combined, amortization of purchased intangible assets of $6.2 million, and acquisition costs of $1.2 million. Non-GAAP operating expenses were $75.8 million, up $14.8 million sequentially, due primarily to the impact of the two acquisitions that closed during Q3. Moving to the balance sheet and cash flow statement.

Our cash flow generated from operating activities in the fourth quarter of 2020 was $74.3 million versus $16.6 million used in the third quarter of 2020. Our loan balance stood at $370 million, factoring in the retirement of $17.2 million during Q4. We have subsequently paid down another $20 million during Q1. We remain consistent in our intentions around uses of cash with priorities on debt paydown and strategic acquisitions. Our days sales outstanding for the fourth quarter was approximately 32 days compared to 61 days in the prior quarter. Our inventory turns were 4.4 compared to 5.2 in Q3.

These metrics are impacted by the timing, purchase price accounting and relative size of the Q3 acquisitions. This leads me to our guidance. We currently expect revenue in the first quarter of 2021 to be approximately $200 million to $210 million, up 5% sequentially at the midpoint of the guidance range.

We expect broadband revenues to be up modestly, with growth driven primarily by cable front ends and SoCs. We expect infrastructure revenue to be up significantly, primarily driven by wireless backhaul. We expect our industrial multi-market revenues to be flat to slightly up, while connectivity will be flat to slightly down.

Like much of the industry, we are working closely with our suppliers to address current supply constraints in the market as these constraints have become a challenge in delivering to our current customer demand. We saw limitations in Q4 and continue to see impacts in the first half of 2021, which could impact the mix. We expect first quarter GAAP gross profit margin to be approximately 51.5% to 53.5% of revenue and non-GAAP gross profit margins to be approximately 57.5% to 59.5% of revenue, up 70 basis points from the previous quarter at the midpoint of the range.

As a reminder, our gross profit margin percentage forecast could vary plus or minus 2% depending on product mix and other factors. We continue to fund strategic development programs targeted at delivering strong top line growth in 2021 and beyond, with particular focus on infrastructure and connectivity initiatives and our stated goal of increasing the operating leverage in the business.

We expect Q1 2021 GAAP operating expenses to decrease approximately $2 million quarter-on-quarter to a range of $103 million to $107 million, driven mainly by the reduction in integration-related activities, partially offset by seasonal payroll step-up and head count additions.

We expect Q1 2021 non-GAAP operating expenses to be down approximately $2 million sequentially to a range of $72 million to $76 million. We expect GAAP tax expense to be approximately 0 and non-GAAP tax rate of 6%. We expect GAAP interest and other expense to be $4.3 million to $4.5 million, and non-GAAP interest and other expense to be $4 million to $4.2 million. In closing, we are pleased to report improving dynamics in all of our businesses based on strengthening product cycles, improved market dynamics, and share gains.

Our infrastructure efforts in PAM4 and 5G continue to set up well with meaningful growth coming in 2021 and beyond as production platforms begin to ramp. We're also pleased with both the near-term customer traction and development milestones in our WiFi business. We are intent in supporting customers through a dynamic market environment with accelerating demand and intensifying supply constraints.

We remain focused on maintaining strong profitability and cash flow generation while continuing to execute on our integration efforts as well as our organic infrastructure developments. With these profitable growth initiatives, we believe we are uniquely positioned to deliver strong leverage in our business in 2021.

With that, I'd like to turn the call back over to the operator for questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from the line of Tore Svanberg with Stifel. Please proceed with your question.

Tore Svanberg -- Stifel -- Analyst

Yes. Thank you and congratulations on the results. First question is on visibility. I mean I assume you guys are pretty booked. But perhaps, could you talk a little bit about visibility beyond the March quarter? And also as it relates to capacity, are you taking some actions to perhaps expand your capacity at this point?

Steven Litchfield -- Chief Financial Officer and Chief Corporate Strategy Officer

Hey, Tore, yeah, thanks for joining us. So absolutely, visibility is extremely good right now, bookings at record levels, and we really did have a tremendous quarter. Yeah, these supply constraints are a bit challenging for us, and we're trying to do our best to resolve them as quickly as possible. Are there actions? There's lots of actions. I mean there's numerous things that our operations teams have been working on.

I do think -- I mean there's lots of speculation as to how long this will continue. I think we have certain issues that are going to have a bigger impact in the first half of the year, Q1 and Q2. And then I -- but I also think that there'll probably be some restrictions that even limit some abilities even in the second half of the year. So I can't give you specific actions. It's a long list that we're working diligently to reconcile.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

So Tore, having said that, our guidance contemplates those dynamics. And while the bookings are incredibly strong, we really measure our business performance based on throughput of our revenues. And so we are tempered in that matter as well. Meanwhile, like I said in my section of the call, making sure our customers have the supply they need is our topmost priority. And we are taking every measure to ensure that they are not in a position that they cannot be successful.

Tore Svanberg -- Stifel -- Analyst

Very good. And as my follow-up, you indicated that infrastructure is going to be up strongly, especially with wireless backhaul ramping. Could you elaborate a little bit on that? Is that a specific program? Or is it multiple customers? And any regions of note?

Kishore Seendripu -- Chairman, President and Chief Executive Officer

So on the wireless backhaul side, right, I mean we will be -- now have fully absorbed the Huawei impact is what I've concluded. And so really resuming strong growth back in Q1 is really indicating upselling designings we have done at certain key customers, Tier one customers that are beginning to ramp primarily on our RF transceivers. And at the same time, we are also seeing increased demand for our backhaul modem products. So I think that it's not one customer, it's multiple customers, with the exclusion of Huawei in the mix. Which is unfortunately a huge revenue loss for us, but that's now in the rearview mirror.

Tore Svanberg -- Stifel -- Analyst

Just one -- squeeze one last one in. If you look at trimode WiFi, I assume we're still in the very early innings of that upgrade cycle, right?

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Yes, trimode WiFi, you know how all these markets play out. First, you start in some consumer retail shelf device. And then it goes into the handsets. And then finally, it makes its way into the operator platforms, right? And so we're in the early phase. But having said that, the WiFi 6E already contemplates the new bands in six gigahertz. It's really effectively triband.

However, there are changes in the way it works that involve the base band. So we're really in the early phase of the access point evolution of triband both across the board, whether it's client side or access side. So -- and we'll be in a great position to execute on that because we -- as I said, we already got the certification of the Wi-Fi 6E. And we feel we are in a very good position, and we'll have the best silicon we can for the platform in a timely manner.

Tore Svanberg -- Stifel -- Analyst

Excellent. Congrats, again.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Thanks.

Operator

Our next question comes from the line of Alessandra Vecchi with William Blair. Proceed with your question.

Alessandra Vecchi -- William Blair -- Analyst

Hi. Just a couple of questions. Steve, any chance you can give us some color on how you view the growth rates for the different segments going forward?

Steven Litchfield -- Chief Financial Officer and Chief Corporate Strategy Officer

Hey, Alex. Well, so we, in our prepared remarks, we did include kind of directionally what we saw coming. I mean, I do think infrastructure is going to be exceptionally strong in Q1 as that business recovers, I mean, post the weakness that we saw in Q4. Kishore just spoke about the backhaul, but I mean we also see some of the HPA businesses recovering. And so there's other components of that, that we'll definitely see pick-up in Q1.

Broadband, I do mention that as well. I can see some modest improvements there in Q1, which is really counter to what we typically see. We usually would see a weaker Q1. And so I see that slightly up. And then connectivity, probably flat to slightly down. We had an exceptionally strong quarter in Q4. And so we've just got a little bit of digestion that happens there.

But I'm really excited about that business and the growth that we would expect to see throughout the year. And then industrial and multi-market, a weak Q4, which we had talked about previously, right? But frankly, going into 2021, I see the channel inventory levels have come down quite a bit, and demand has definitely picked up. So I see that probably flat to slightly up in Q1. So some of that reiterating from our prepared remarks, but hopefully, that's helpful.

Alessandra Vecchi -- William Blair -- Analyst

Yes, that is. But I was actually -- sorry, I should have been clearer. I was actually thinking more on a term basis, particularly maybe for the connectivity market in...

Steven Litchfield -- Chief Financial Officer and Chief Corporate Strategy Officer

Yes. Okay. Yes, my apologies if I misunderstood that. I mean look, connectivity and infrastructure are both really big investments that we've made. We expect to see substantial growth there. Big markets, right, whether it be WiFi driving some of the connectivity markets, Ethernet.

I mean, those are big growth drivers that should grow solid double-digit growth for a while to come, especially with these newer products that are coming out. I mean the same thing applies on the infrastructure side, where we've described and talked about similar market dynamics with some of the newer products.

And I don't think -- I mean with regard to the broadband segment as well, I mean that's -- I'd probably reflect back on some of our commentary that we've made throughout the year. I mean that's still kind of a low to potentially mid-single-digit grower. And then, industrial multi-market, it would be consistent with what we've said historically, growing around the rate of GDP.

Alessandra Vecchi -- William Blair -- Analyst

Okay. That's very helpful. Thank you. And then just on a more housekeeping question, can you just update us on, how to think about operating expenses, as we progress through the year? Should we sort of continue to expect opex down in Q2? And then, continue to migrate down a little bit? Or is there any change to your previous commentary there?

Steven Litchfield -- Chief Financial Officer and Chief Corporate Strategy Officer

Yeah. Look, I mean I'll give you a little bit of color because there's some moving parts. I mean we don't like to guide more than one quarter out, just kind of given the changing world that we live in. That being said, the -- look, we've got a lot of integration efforts that are ongoing. We've mentioned the -- some of the transitional expenses that we have between us and Intel. That continues throughout Q1.

And so, those will start to come out in Q1. And so we'll start to see some improvements in the back half of the year due to Intel. We do have some mass expenses that will contribute in Q2, and to some degree, in Q3. So we'll see that pick up. And then hopefully by the end of the year, we'll see more of these Intel expenses and some of the -- some of our integration efforts really pay off. And you'll see kind of the exit of the year pretty good. I think you'll see some nice improvements throughout the year, on the opex side.

Alessandra Vecchi -- William Blair -- Analyst

Great. Thank you. With that, I'll pass it on to the next person.

Steven Litchfield -- Chief Financial Officer and Chief Corporate Strategy Officer

Great, thanks.

Operator

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

Quinn Bolton -- Needham and Company -- Analyst

Hey, Kishore and Steve, congratulations on the nice results and the outlook. I guess my first question, Steve, you talked about the supply constraints, and it certainly sounds like it's limiting your ability perhaps in the near-term. Wondering, if you think, you're leaving some revenue on the table as a result of those supply constraints in Q1? And I assume that most of that demand probably is nonperishable.

And so, to the extent you're leaving some demand on the table in Q1, does that push into Q2 and Q3 and sets you up potentially for higher sequential growth through the year? Or would you still expect sort of a pause in the broadband and connectivity businesses after a strong Q4 and Q1, you'll pause kind of in Q2?

Steven Litchfield -- Chief Financial Officer and Chief Corporate Strategy Officer

Yeah, Quinn, I mean, so clearly we're, working very hard on these supply constraints. It absolutely limited kind of our guidance in Q1. I mean, your specific question, does that push out? I mean, I think the reality is it probably does. And so I think we're going to -- we'll do all that we can. Will that mitigate? So my -- we talked a little bit about typical seasonality and kind of what's going on in the world today.

I think we -- I think a lot of folks have kind of anticipated seeing that slowdown happen in Q2 per your comment, right, in that, we would typically see the seasonal softness in Q1, but it seems to be shifted into Q2, which I think we don't disagree with. We've seen incredible demand over the last six to nine months. And so it would be logical to see somewhat of a pause. These supply constraints pushing out, will mitigate some of that, I do agree with that.

Quinn Bolton -- Needham and Company -- Analyst

Great. And then, your commentary around your lead customer on the 400G ramp seems to be kind of increasingly optimistic. Just maybe I'm reading too much into your tone, but it seems like you guys are more excited about that opportunity. What's leading you to kind of the more bullish statements around kind of the timing and perhaps size of that ramp at the lead customer?

Kishore Seendripu -- Chairman, President and Chief Executive Officer

So I think that from our point of view, this has taken far longer than it should ever have. So it seems the bottlenecks at the lead operator customer, data center customer, will allow them to qualify. There's a whole interop qualification process that they put each module vendors through, and it seems it's our turn to get our module vendors through the process now. So the fact that you're at that phase implies -- and then debottleneck has opened up, so we feel optimistic that when the real ramp gathers momentum, we'll be participating in that.

Now also I think in general if you look at the dynamics of the optical high-speed big data on the market, the increasing consolidation that's going on in the marketplace really proves the thesis that a high-performance, aggressive, high-technology capability, mixed capability that we bring to bear is really the call for the day, right?

And so, we feel very good about where we are positioned, not just with our 400-gig offering, but also with both 100-gig. And then we'll be the world's first one to do a 5-nanometer CMOS Keystone product that they call the 800-gig product, and nobody will have the product.

And there could be a lot of derivatives to that product, whether it is pluggable market or co-packaged optics, that may be a trend five years from now. I think we're very, very well positioned. I think our portfolio has finally come to mature where we become very interesting to everybody.

Quinn Bolton -- Needham and Company -- Analyst

Thank you, Kishore.

Operator

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

Ananda Baruah -- Loop Capital Markets -- Analyst

Hey. Good afternoon. Yeah. Congrats on the solid results and a good start to the year. Thanks for taking the question. Kishore and Steve, can we just go back to the comments you made a moment ago about sort of anticipate -- I'm paraphrasing here, but anticipation of 2Q, June Q, maybe slowdown in the broadband trend, maybe that gets offset to some degree by the relieving of the supply constraints.

I would love context just around why the view of Q2 slowdown actually developed in the first place. And one of the questions I was going to ask you was thoughts on lengths through the year, from the at-home trends. But I do just love the context that leads to the thought process that 2Q, there is a sort of meaningful slowdown. And then I have a follow-up off of that.

Steven Litchfield -- Chief Financial Officer and Chief Corporate Strategy Officer

Well, so Ananda, I guess, I'm not sure kind of where you're coming from. So the Q2, so we've seen significant strength on the broadband side, and I think that business is performing extremely well. Demand has been extremely good. And so, we've been very pleased with that.

I think the market was, is kind of anticipating that to slow down a bit, which I think we would not disagree with that at all. That being said, the demand continues to be extremely strong, and we talked a lot about the content increase.

Remember that our content increase is going up on the order -- I mean, typically, some of these boxes are running at $15 to $20, and now you're seeing these things -- our content has the potential to capture up to $30, and even in some cases, above that. So that's extremely positive. The share gains is the other one that has continued to go well for us. I think if you look over the last 18 to 24 months, I mean we've struggled on the share.

We dropped kind of below that typical 50% level. And so we've been regaining that. And so a lot of these numbers may appear like they're stronger than what was expected, but this is really making up share gains that we have executed on as well as bringing in these content increases. So these are substantial gains that we're excited about, we think continue.

I think this also adds to our enthusiasm on broadband as well as connectivity over the long-term growth rate of the business, right, in that -- and that we've kind of broken out this way. So you can see that connectivity piece in particular that will demonstrate kind of the growth in WiFi as well as Ethernet going forward.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

So one thing I want to point out that we're in the early phase of our connectivity attached to our SoC platforms. I mean our WiFi product has just started attaching onto these platforms. So that's a very, very important point. So we expect growth to come from BOM content increase quite meaningfully.

And the share gain is a very, very important factor. I think some of the things that could be missed in this scenario of supply constraints and some presumed expectation of overbookings really misses the fact that we are growing through share gains and content increase, and no unusual events that are onetime events for us. This is going to be a steady drumbeat of growth in both broadband access and connectivity for MaxLinear.

Ananda Baruah -- Loop Capital Markets -- Analyst

And -- yes, and I appreciate that. Because really what I'm trying to just get -- make sure that I have a clear view of -- because I'm totally there on the content increase on the share gain aspects of the story. And then so for the sort of the market component, are you guys -- is it -- I know you're not giving June quarter guidance, but I want to make sure this distinction, I'm clear on, distinction between it is a MaxLinear perspective that there will be a slowdown in June quarter from at home?

Or is that -- is it sort of just -- has it become just sort of the accepted perspective? Or are there some of your main OEMs that are telling you that, hey, listen, this is actually what's going to take place. I don't mean to be long-winded, but I think the longer we get into this, we're in February now and at home is not slowing down yet, right?

And so I just want to see if there's something that you're actually seeing that's causing you to say, hey, listen, guys, we think this starts in like April, which is only like eight weeks away, right? Versus you're just sort of saying, Hey, listen, like sooner or later, it's going to start to slow down. And we think the June quarter, it could happen. I know I'm being long-winded, but I want to make sure I'm clear on the distinction behind that, that June quarter comment.

Steven Litchfield -- Chief Financial Officer and Chief Corporate Strategy Officer

So Ananda, I mean so you're -- probably the best way to answer this is that we're not going to answer, and we're not going to give guidance for Q2. I mean demand is exceptionally strong. We expect that to continue throughout the year. And we're really pleased actually with the content that we've been able to capture, the share gains that we've been able to capture. And so I look at this, there's kind of a new normal at MaxLinear, if you will, right? I mean what we've kind of viewed historically, I mean, the whole world has changed.

We're able to capture a tremendous amount of this BOM now that we've never had access to historically, right? And so that's really been a game changer, and we're working closely. I mean Kishore talked a little bit about the customers earlier. But the content increase and the opportunity that we have going forward is incredible for MaxLinear. That being said, I mean look, we're going to keep working through these supply constraints. And we're going to do our best for our customer to be able to address that demand level that we can hit.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

I think, once again, I'd hark back to the think: our growth story is very company-specific drivers of growth. And we are going to guide based on those specific -- and those specific, as Steve mentioned, looked very positive. And regarding the BOM part, it leads to a whole different dialogue with customers now, strategic partnerships on their future investment needs on their side, and they are partnering with us. And in the consolidated world, we feel we have a huge role to play in terms of -- in this marketplace.

Ananda Baruah -- Loop Capital Markets -- Analyst

That's very helpful. Thank you, guys.

Operator

Our final question comes from the line of Tim Savageaux with Northland Capital Markets. Please proceed with your question.

Tim Savageaux -- Northland Capital Markets -- Analyst

Okay. At long last. Well just to summarize, there was this pandemic. Everyone started working from home. Cable subscribers went through the roof, and that might normalize. Just to address the previous 20 minutes on the question there. Let me move on to a couple of my own. And maybe I'll make it a little clearer. Do you expect Q1 to be your peak revenue quarter in 2021?

Steven Litchfield -- Chief Financial Officer and Chief Corporate Strategy Officer

Hey, Tim. Good stop here. Thanks for joining us. Look, we're very excited about the positioning, as we've been talking about. I appreciate your comments. Well made. Look, execution is going extremely well right now in a pretty difficult environment, right? Demand levels that the company has never seen. And -- but we're doing a great job. I mean Kishore's previous comments about the customer right now, we really -- the game's changed tremendously.

And so our relationships to customers have really improved and we're very excited about the market and the opportunity that we have before on the broadband, the Intel side. But frankly, we're also continuing to move nicely along on the infrastructure outlook, right? I mean this has been a long investment cycle. And so we're very optimistic going into 2021 about our optical opportunities as well as the 5G opportunities.

Tim Savageaux -- Northland Capital Markets -- Analyst

Got it. Let's dig into some of those quickly. I wanted -- well, first, kind of housekeeping. But important, I wonder if you could address, 10% customers for either the quarter or the year in terms of in the aggregate or individual concentration or whatever you're willing to share?

Steven Litchfield -- Chief Financial Officer and Chief Corporate Strategy Officer

Yes. We did have three 10% customers in the quarter.

Tim Savageaux -- Northland Capital Markets -- Analyst

Okay. That's it? That's fair enough. And final one for me, you mentioned somewhere along the line, opportunities related to 10-gig PON. And I assume that refers to kind of the CPE or client side of the wire, but maybe not. I think there might be some infrastructure opportunities. We're hearing a lot about growth in 10-gig PON here in '21. And I'm wondering how material a driver that could be for you guys, in addition to what you're doing in cable?

Kishore Seendripu -- Chairman, President and Chief Executive Officer

So we-the great news is 10G PON, we're just starting to ramp and ship because of major design wins. And those design wins and ramps will happen throughout 2021, 2022. And so, 10G PON is going to be a very meaningful broadband growth story for MaxLinear. Having said that, the revenues are all in the CPE client side, we don't have any infrastructure 10G PON offering. So I think that should answer your question on that.

So, we totally agree that the 10G PON is going to be a phenomenal growth story for years to come as the telcos upgrade their networks. And copper has lost its conductivity, if you will, right? So, I think we are very excited that we are one of the world's premier gateway platform for PON applications. And even as we speak, they're shipping actually. And that's where the demand is quite substantial, and we're trying to manage our supply situation on that front as well.

Tim Savageaux -- Northland Capital Markets -- Analyst

Great. Thanks very much, and congrats on the results and outlook.

Operator

We do have another question from the line of Richard Shannon with Craig-Hallum. Please proceed with your question.

Richard Shannon -- Craig-Hallum -- Analyst

Hi, guys. Thanks for taking my question. I apologize for any background noise. I'm out in the public here. I guess a two-part question on PAM4. First of all, can you give us a sense of when you're expecting to see the contributions in revenues from your 100-gig PAM4? And then just want to clarify, on the 800-gig 5-nanometer project you're talking about, are you saying you're the first one in the market with those sampling? Or if not, can you kind of discuss the competitive environment as you're seeing it right now? Thanks.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

So, as we see the competitive environment right now on the 800-gigabit PAM4 DSP, in the 5-nanometer, we expect to be the first ones to be sampling in the marketplace. So that gives us a nice flagship leadership advantage and edge with respect to the data center folks. And so, we don't avail based on our knowledge, right, who else is going to be there in that time frame?

So on the timing for the 100-gig PAM4, we expect it all to be in the same timeframe around 400-gig, because they are in the same design cycle qualification validation, though there maybe different OEMs or module makers who would be shipping those. I just want to note that 100-gig is not just data center market. It has got a larger application than just -- than directly to the data center folks. There are other OEMs who would be buying these kinds of product.

Richard Shannon -- Craig-Hallum -- Analyst

Okay, great. That's helpful for me guys. Thank you.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Great, thanks Richard. So...

Operator

With that, we reached the...

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Go ahead please.

Operator

Yeah. I was just going to say, with that we reached the end of our question-and-answer session. I'll turn the floor back over to management for any closing remarks.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

All right. Thank you, operator. We will be participating in the following upcoming conferences: the Morgan Stanley, TMT Conference on March 3; the SIG's 9th Annual Technology Conference on March 10; Loop Capital's Inaugural Investor Conference on March 11 to 12; the ROTH 2021 Conference on March 16. I just want to remind everyone that all of these conferences are virtual but we hope to connect with many of you there.

With that being said, we thank you all for joining us today. And we look forward to reporting on our progress to you next quarter. Thank you very much.

Operator

[Operator Closing Remarks]

Duration: 47 minutes

Call participants:

Brian D. Nugent -- Head of Investor Relations

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Steven Litchfield -- Chief Financial Officer and Chief Corporate Strategy Officer

Tore Svanberg -- Stifel -- Analyst

Alessandra Vecchi -- William Blair -- Analyst

Quinn Bolton -- Needham and Company -- Analyst

Ananda Baruah -- Loop Capital Markets -- Analyst

Tim Savageaux -- Northland Capital Markets -- Analyst

Richard Shannon -- Craig-Hallum -- Analyst

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