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MaxLinear Inc (MXL) Q1 2021 Earnings Call Transcript

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MXL earnings call for the period ending March 31, 2021.

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MaxLinear Inc (MXL -6.94%)
Q1 2021 Earnings Call
Apr 28, 2021, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the MaxLinear Incorporated First Quarter 2021 Earnings Call. [Operator Instructions]

It is now my pleasure to introduce your host Brian Nugent. Thank you, sir. 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 first quarter 2021 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 second quarter 2021 revenue, revenue growth expectations in our principal target markets, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expense, 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 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 related to the acquisitions, as well as risks arising more generally in our business from competition, global trade and export restrict, 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 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, 2020, and our first quarter 2021 Form 10-Q which was filed today.

Any forward-looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward-looking statements. The first quarter 2021 earnings release is available on 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 also 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 Q1 financial results highlight record quarterly revenue of $209.4 million, up 8% sequentially. Cash flow from operations of $40.3 million, and non-GAAP gross margin of 58.6%. Our results and outlook are moderated by the industrywide semiconductor manufacturing supply chain constraints, even as we are proactively developing strategies to minimize the impact for our customers. In Q1, our broadband access revenue stood at 59%, infrastructure at 14%, industrial and multimarket 14%, and connectivity at 13% of overall revenues.

Now turning to some of the Q1 business highlights. In broadband access end market demand remains robust, driven by continued strong MSO deployment, sustaining subscriber broadband consumption demand trends and our share gains across our target markets. Further, the breadth of our broadband access and WiFi SoC assets continues to expand customer engagements on next generation broadband access and in home connectivity architectures. In our Connectivity business, which consist of multi-gigabit WiFi, Ethernet MoCA and G.HN technologies shipments took a temporary pause owing primarily to supply constraints.

We expect a strong recovery in Q2 with all four products growing quarter-over-quarter. We are pleased with the strong WiFi design win momentum and product ramp on WAV600, along with the adoption of our WAV600 release to silicon. We see multiple tri-band WiFi platforms ramping in 2022, which utilize the 2.4 gigahertz, 5 gigahertz, and 6 gigahertz spectrum capabilities of our solutions across North America cable and service providers. Our WiFi business is on track to double in 2021 and has the momentum to potentially double again in 2022.

Additionally in Q1, our MoCA shipments to our flagship US telco customer, and to an additional new Canadian telco customer continue to grow. We also expect our G.HN business to post double-digit growth in 2021. During Q1, we released the industry's first quad-port gigabit PHY optimized for 2.5 gigabit applications, which builds on our earlier success of 1-gigabit and 2.5-gigabit PHY and 1-gigabit switches.

We expect the adoption of 2.5GBASE-T to accelerate over the next several years, driven by new and growing multi-gigabit broadband applications such as 10-gigabit PON, DOCSIS 3.1 modem and Wi-Fi 6 routers, as well as its mass market adoption in the enterprise industrial laptop market. We are positioned extremely well at the front end of the 1-gigabit to 2.5-gigabit Ethernet upgrade cycle.

Moving to wireless infrastructure market, our Q1 revenue rebounded strongly, nearly doubling quarter-over-quarter owing to a strong recovery in wireless backhaul deployments, combined with the anticipated initial production revenue shipments from our 5G massive MIMO RF transceiver SoC. Our current wireless infrastructure bookings momentum supports continued growth throughout the year. In 5G access, we also announced our partnership with Facebook on the Evenstar program to develop an integrated ORAN SoC, which incorporates our state-of-the-art 5G RF transceiver, digital Pre Distortion algorithms and open RAN functionality.

In optical datacenter, we are making progress toward mass production ramp of our 400-G PAM4 DSP in the second half 2021 along with strong adoption of our 100-G PAM4 offering by Tier 1 customers. Additionally, we are on track to sample our industry-leading new keystone family of 5 nanometer CMOS, 800-gigabit PAM4 associate products in Q2. Keystone solidifies our ability to capitalize on the PAM4 optical interconnect market, which will dominate cloud and edge data center deployments over the next several years.

Our high-performance analog business posted strong growth in Q1, across both infrastructure and industrial multimarket applications. Despite a challenging supply chain environment in high-performance analog, we believe that our lean channel inventory levels, rapidly growing design win funnel, and exciting new product developments, position us very favorably for growth in 2021 and beyond.

We have made significant progress in expanding our portfolio in all our end markets and are broadening our full penetration and customer traction in new exciting growth markets. We believe this expanded value proposition and our enhanced target addressable market across high growth broadband, connectivity and adverse infrastructure, both together position us well for strong profitable growth in 2021 and beyond.

Now 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 Q1 2021 results, and then further discuss our outlook for Q2 2021. Revenue for the quarter was $209.4 million, up 8% versus Q4. Infrastructure revenue was increased by 61% compared with Q4, above our expectations, and driven by a strong recovery in both our wireless backhaul and high-performance analog end markets along with growing 5G access market contribution. Our broadband business demonstrated strong growth during the quarter, up 10% sequentially and slightly better than our expectations, driven by upside in gateway SoC shipments.

Solid demand for our broadband products is being driven by a combination of end-market strength and company-specific drivers, including silicon content increases and share gains. Our connectivity business was down 20% sequentially as supply constraints in WiFi and Ethernet was only partially offset by growth in G.HN and MoCA.

Lastly, our industrial and multi-market business was down 1% sequentially and in line with the expectations as softness in components was largely offset by strength in the HPA demand. GAAP and non-GAAP gross margin for the first quarter was approximately 53.4% and 58.6% of revenue, up 10.7 percentage points and 80 basis points over last quarter, respectively. The delta between GAAP and non-GAAP gross margin in the first quarter is primarily driven by $10.7 million of acquisition-related intangible assets, amortization in addition to $0.3 million of stock-based compensation and performance-based equity.

First-quarter GAAP and operating expenses were $101.8 million, down sequentially and slightly below the low end of our $103 million to $107 million guidance range. The GAAP operating expenses included stock-based compensation and stock-based bonus accruals of $19.3 million combined, amortization of purchased intangible assets of $6.1 million, restructuring charges of $2.2 million, and acquisition and integration cost of $1.7 million. Non-GAAP operating expenses were $72.6 million, down $3.2 million versus Q4, and at the low end of our guidance range of $72 million to $76 million. Non-GAAP operating margin for Q1 2021 of 24% was the highest level in the past six quarters.

Moving to the balance sheet and cash flow statement, our cash flow generated from operating activities in the first quarter 2021 was $40.3 million and we ended the period with $149.2 million in cash, cash equivalents, and restricted cash. Our loan balance stood at $350 million exiting Q1 as we made principal payments of $20 million during the quarter and we have subsequently paid down another $15 million. We remain consistent in our intentions around uses of cash with priorities on debt pay down and strategic acquisitions. We also purchased $2.7 million of stock late in the quarter after the Board approved the $100 million buyback program.

Our day sales outstanding for the first quarter was approximately 38 days, slightly up from 32 days in the prior quarter due to shipment linearity. Our inventory turns were 4.1 compared to 4.4 in Q4. That leads me to our guidance. We currently expect revenue in the second quarter of 2021 to be approximately $200 million to $210 million, down 2% sequentially at the midpoint of the guidance range. We expect broadband revenue to be down quarter-over-quarter as semiconductor manufacturing supply chain tightness is expected to constraint shipments below actual end-market demand. We expect infrastructure revenue to be up slightly versus Q1 due to modest growth in wireless backhaul and wireless access. We expect our industrial multimarket revenue to be flat to down on a sequential basis.

Lastly, we expect our connectivity to grow double-digits quarter-over-quarter with the rebound being driven by a combination of solid demand and supply improvement. While the theme of broader supply constraint continues to be prevalent across the entire industry, we continue to aggressively manage these issues in order to support our customers.

With that said, we have seen limitations dating back to the fourth quarter and believe supply will continue to be an issue through the balance of the calendar year and into the first half of 2022. This uncertainty does impact our visibility with respect to product mix. We expect second-quarter GAAP gross profit margin to be approximately 52.5% to 54.5%, and non-GAAP gross profit margin to be between 58% to 60% of revenue, with the midpoint up from 40 basis points from Q1.

As a reminder, our gross profit margin percentage forecast could vary plus or minus 2% depending on the 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 Q2 2021 GAAP operating expenses to increase approximately $2.7 million quarter-on-quarter to a range of $102.5 million to $106.5 million, primarily driven by increased prototyping expenses and payroll-related expenses. We expect Q2 2021 non-GAAP operating expenses to be up approximately $2.4 million versus Q1 to a range of $73 million to $77 million. We expect GAAP tax expense to be approximately zero and a non-GAAP tax rate of 6%. We expect GAAP interest and other expense to be $3.9 million to $4.1 million and non-GAAP interest and other expense to be $3.8 million to $4 million.

In closing, we continue to see sustainable fundamental expansion across all of our addressable markets. This is largely being driven by a combination of company-specific catalyst, including new product introductions, market share gains and content per platform increases. We believe our end markets are also demonstrating favorable growth profiles due to the proliferation of global networking, in addition to the recent trend toward the incremental dependency on reliable and robust connectivity.

Our infrastructure efforts in PAM4 and 5G continue to foreshadow meaningful growth coming in 2021 and beyond as production platform ramps commence. We are also pleased with both the near-term customer traction and development milestones in our WiFi business. We remain steadfast in supporting customers through a dynamic market environment, which pairs accelerating demand with tight supply constraints. We remain focused on expanding upon our recent profitability, advancements, and strong cash flow generation, while continuing to execute on the integration efforts as well as our organic infrastructure developments. With these profitable growth initiatives, we continue to believe we are uniquely positioned to deliver strong leverage in our business in 2021.

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

Questions and Answers:

Operator

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

Tore Svanberg -- Stifel Financial Corp -- Analyst

Yes, thank you, and congratulations on the record results. First question is on capacity, Can you just add a little bit of color on what's going on there, what some of the puts and takes are? Especially when I think about your connectivity business being hampered a bit this quarter, but relief is coming next quarter, while broadband is the other way around. So if you could just add a little bit of color there, that'd be great.

Brian D. Nugent -- Head of Investor Relations

Yeah, Tore. Thanks for joining. So, yeah, look I think supply constraints are definitely across the board in all of our end markets, across all of our products, some are worse than others. I think, as I mentioned before, I think in the MaxLinear case, in particular, is probably a little more back-end constraint than front-end constraint. As far as the mix that we highlighted, yeah, we did see connectivity impacted a little bit more in Q1, no doubt about that, but we're confident that we will see that pick back up in Q2. So I'm not concerned about the mix quarter-to-quarter between those particular end markets, but we are working very hard to make improvements on the supply chain situations as we've kind of highlighted in the call.

Tore Svanberg -- Stifel Financial Corp -- Analyst

Very good. And on your infrastructure business, obviously, you had a tremendous quarter, and I was hoping you could just talk a little bit about the geographical contribution to that growth. I mean, is this kind of like the new run rate and it can grow from here on? Because obviously it grew significantly better than what you had expected.

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

Yeah. So you're right, it did grow quite a bit, and we highlighted that we definitely saw backhaul finally recover, HPA did extremely well. We're starting to see really nice contribution from wireless access, which we are excited about and anticipating, and then looking forward to see you optical really ramp up in the second half of the year as well. So yeah, I do think this is -- I don't know if it's the new normal, but it's definitely a higher level that should sustain for a while. We've been kind of pushing that infrastructure business anticipating it getting over 100, and I think you'll see it really easily exceed that $100 million level in 2021.

Tore Svanberg -- Stifel Financial Corp -- Analyst

Great. Just one last question, could you just give us a sense for where you expect inventory days to be longer term for the new business model now? You obviously slightly below 100 days right now, but where are you trying to sort of get the inventory day level to?

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

Yeah. So it's a tough question to answer right now, Tore, I mean, especially given the environment that we're in. With the increased business that we have along with the supply constraints and just kind of uncertainty in the kind of global world right now, we're trying to anticipate that we're more than likely going to have to -- we want to build up some more inventory, but we're not quite to that stage. So I can't really answer your question quite yet.

Tore Svanberg -- Stifel Financial Corp -- Analyst

Sounds good, and congrats again.

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

Thanks, Tore.

Operator

Thank you. Our next question comes from Ananda Baruah with Loop Capital Markets. Please proceed with your question.

Ananda Baruah -- Loop Capital Market -- Analyst

Hi. Good afternoon, guys. Thanks for taking the question, and congrats on the strong execution. I guess, a couple if I could, Kishore you mentioned, when you're talking about and Steve, this is actually you I think you gave the broadband guidance. But one of the remarks was supply constraints around broadband, demand remained stronger than supply, but Kishore just a moment ago I think you also said that that's generally across the business. And so really can you just clarify is it across the business that demand is stronger than supply? I guess you said you're supply constrained across the business. Is it also the case that demand is meaningfully stronger than supply across the business? And then with regards to broadband specifically, is there any sense of how much revenue you're -- sort of how much demand you're not able to meet right now? And then I have a quick follow-up. Thanks.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Yeah, well, so let me address the question. In general, at this point, right, we have a very, very strong bookings in place, and there are several factors that contribute to it, obviously, the supply constraints despite the exceptional booking. However, beyond that we have new product cycle, our product cycles ramping across connectivity and our new product initiative the infrastructure.

So we have a little bit more, what I call real demand that is coming about with all due to the investments we have made in the past, and securing capacity for those is our biggest goal right now. And so to that extent, we have constraints across the board, all above that on the broadband side there is very strong demand, there it seems very self-sustaining or sustaining due to I think a secular situation in terms of broadband demand consumption on the subscriber side.

So we don't see any let-up in the demand for product or the deployment of the end carriers and operators. So I would say we're in a great place, great product cycles that are building up some momentum here, infrastructure is beginning to show good -- show spontaneity in the growth here. And so we're really constrained by supply of how much we can share. And we do not believe our issues are related to over booking of product from customers, it is real demand that we -- that is mostly non-perishable, and we will be able to fulfill as the supply chain eases up a bit as we bring more capacity online.

Ananda Baruah -- Loop Capital Market -- Analyst

That's fantastic context, Kishore. I appreciate it. And the quick follow-up to that is you mentioned in the press release, I just want to ask you, I think this is your comment, we feel increasingly confident in the company's outlook for the remainder of this year. So, would you mind -- I mean, would you be able to sort of give us some sense of what that outlook is, since you mentioned it in the press release that you feel confident in it? And that's it for me. Thanks.

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

Yeah, thanks, Ananda. So I'm not sure we only guide one quarter out, so we're not going to give any guidance beyond that, we do see supply constraints continuing. As I mentioned in the prepared remarks in the second half and into the first half of 2022. I'll reiterate what Kishore said, the demand is extremely strong across all of our end markets. I would say that we've seen a real fundamental shift in the broadband markets in general, right? I mean, connectivity has been a big play because these are new products for us, there are content increases, which is very meaningful. But I think you're also seeing the operators telecom and cable really starting to invest, I think as we look out over the next three to five years, you're going to see a substantial increase in the markets there, and the amount of spend that these guys intent to make.

Ananda Baruah -- Loop Capital Market -- Analyst

That's great context, Steve. Thanks, guys.

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

Great, thanks.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Quinn Bolton with Needham. Please proceed with your question.

Michelle -- Analyst

Hi, guys. This is Michelle on for Quinn. Thanks for taking the question, and congrats on the solid results. So just two quick ones for me. Can you guys give me an update on the next-generation 5G cellular transceiver the 8x8 massive MIMO cellular transceiver? And then the second question just between the supply constraints and elevated shipping costs for COVID -- due to COVID and so on, we're just wondering how you guys feel about the target for the 60% gross margins at the exit of -- exiting this calendar year. Do you guys still fell comfortable with that. I know you don't guide more than a quarter out, but that -- I believe that was the target you guys had mentioned after closing the Intel acquisition.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Michelle, I'll answer the first part of the question regarding the 5G product. We were the industry leaders in terms of launching our 8x8 RF transceiver, and even in our 4x4 massive MIMO first generation product. We were the only ones to support 400 megahertz of bandwidth throughput that spans all the way to 6 gigahertz, right, not just the lower frequency bands, obviously, we are now production-ready and we got garnering design wins for the product. And obviously our competition is mimicking what we are doing. So we expect to be gathering some momentum in design wins that we speak, obviously, the slowdown and what happened in China has been a setback for us, and however we are gaining meaningful design wins at various OEMs. And as we move forward and look at the last 18 months, we'll be tallying of those wins that should convert into shipments on the 8x8 product.

Today, most the shipments that have begun for our products are primarily in the 4x4 product, which we were not incumbents, remember that we were the ones who came from behind to enter this market. So -- but we're very pleased that we were the leaders when we launched 8x8, and the competition is now playing catch up. Obviously, they are strong they have incumbent positions, however, eventually we will win. That's our conviction. Okay, Steve.

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

Yeah, Michelle, on your supply constraint question I think tying back to gross margins yeah, I don't think anything has changed as far as our expectation that we hit that 60% point exiting the year. Definitely we're seeing price increases in a number of places and as many of our peers are seeing across the industry. So we're working very hard. I mean, our real priority right now is just to get supply, demand has been extremely strong, and we're doing our best to get supply as quick as we can.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

And I want to add that mix will have an important contribution in gross margin. And so it's going to be a balance between our infrastructure products and non-infrastructure products. So, we wait to see how that mix plays out, but for now we only are guiding the next quarter out.

Michelle -- Analyst

Okay. Thanks, guys. Appreciate it.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Thanks, Michelle.

Operator

Thank you. Our next question comes from Suji Desilva with Roth Capital. Please proceed with your question.

Suji Desilva -- Roth Capital -- Analyst

Hi, Kishore, Hi, Steve. Congratulations on the strong quarter. Perhaps first on the infrastructure optical ramp, I want to clarify, you said 400 gig. We expect the second half of this year, you'll start to see contribution there. And I just want to get a realistic sense of what kind of linearity initial shipment levels we can expect out of the gate or whether it takes several quarters to ramp up?

Kishore Seendripu -- Chairman, President and Chief Executive Officer

This has been such a tough one to answer, Suji. On 400-gig we were the first one to enter the market as well. And personally, I've been surprised how the market plays out in terms of our own customers and the end data center player. So at this point, we feel we're making good progress toward ramp in the second half, but I still do not have a good sense of linearity or otherwise. And in this world of trying to secure supply for the new product initiatives, how that effects the ordering patterns at the end customer is also not very clear right now. So the good news is we are making progress and are feeling increasingly confident of a ramp in the second half. However, I cannot give you more color on the linearity of those shipments.

Suji Desilva -- Roth Capital -- Analyst

Yeah. I can also imagine optical being a tricky supply chain as well. So I understand that. And then moving over to the broadband business, the WiFi, can you help us understand if the upgrade to Wi-Fi 6E tri-band sweeps in MaxLinear where you weren't before or does it -- is an upgrade of your prior product, if so what's the content increase? Give us a sense of how that -- of those upgrade will help you guys?

Kishore Seendripu -- Chairman, President and Chief Executive Officer

So it's a mix of both going on. We have products that are shipping, what we call the WAV500, this is a pre -- this is before the 6 gigahertz band was added to the WiFi product line, we have WAV600 that's a tri-band solution, but it's called Release 1. It has got -- and then there is the Wi-Fi 6E R2 version, which is the increased data throughput, better utilization of air capacity, multi-user MIMO that's called the Release 2 silicon. So all of those are getting designed in or ramping in production, while our BOM quantity is increasing even with all the older generation products.

The good news is also we're winning market share because we have started initial foray into the fiber platforms. I hope to share a lot of good news in the near future because fiber is a huge growth opportunity for us, in front of us and at the full platform ownership. So I think here the goal is to get as much supply as possible so that we can ship as much content as possible in new platforms and expand our market share because we're really in a great place to do that.

Suji Desilva -- Roth Capital -- Analyst

Okay, helpful color, Kishore. Thanks, guys.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Thanks, Suji.

Operator

Thank you. Our next question comes from Alessandra Vecchi with William Blair. Please proceed with your question.

Alessandra Vecchi -- William Blair -- Analyst

Hey, guys. Congrats on the quarter. Just a quick question on the operating expenses, I feel like I ask you guys this every quarter, but you've done such a tremendous job holding those costs down. I think, I remember discussion last quarter about some mass costs coming in Q2 or Q3, is the -- is sort of the streamlined opex in the Q2 guidance a function of the mass costs hitting in Q3, or is there something else going on there?

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

Hey, Alex. Good to chat with you today. So from an opex standpoint, so we -- as kind of expected, we did anticipate this going up. There were some payroll increases as well as some mass additions in Q2. So we do see it going up, not quite as much as I think what we had originally expected, but some of those costs I suspect will push into the second half of the year. So I mean net-net, I think, it's a little bit better than kind of what we went into the year with, but there were some of those costs that will push out into Q3.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

But to answer your question, mass costs related to the 5-nanometer product, which we just talked about in my -- in the call, the Keystone product is part of those increased expenses and some of it may push out into Q3.

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

Yes, further color...

Alessandra Vecchi -- William Blair -- Analyst

Okay, got it.

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

Just -- Alex, just to further clarify the bigger 5 nanometer stuff will hit next year though.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Yeah.

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

And so that's not anticipated in the first half of this year.

Alessandra Vecchi -- William Blair -- Analyst

Okay. Okay, that helps. That helps. And then just on the broadband side, there -- heading into the quarter, there was some -- there has been investor concern, that at some point, because of the work from home trends the broadband revenue would sort of trend down or moderate in the back half of the year? Obviously, we're seeing a little moderation in Q2 because of the constraints, but I guess where I'm trying to go with that is if the supply below the demand and you have all these drivers in terms of increased contacts and the operator is finally starting to spend a little bit more and open up the per string, does that sort of alleviates the original worries in Q1 of maybe a back half tail-off or a 2022 tail-off?

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

So I think the best way to answer that -- so first of all, I think really I mean what's happened kind of post-COVID, I think you've --actually you've seen this acceleration of the cycle that we've been through where operators don't spend and we were starting to see the beginning of the cycle where they would start to spend. We saw a lot of that increased demand start because of work from home, but I think what you've seen more recently and what you've heard from a lot of our peers, our customers, operators is that that you're probably going to see a multi-year cycle.

I think going into this, even the acquisition of Intel, we'd highlight numerous times that this broadband business would probably grow in the kind of low-single digits. I think at this point based on visibility that we have, feedback from operators and customers is that that could be up mid-to-high single digits going forward, and then hopefully we'll see some additional content increases and share gains on top of that. So, yeah, I think the world has changed. I think you've heard a lot of this commentary about the importance that the operators are placing on the home and wanting to really control and derive services and things like that. They're going to continue to invest further. And I think that started to really shift in our own business. And so that's really driving that outlook.

So yes, we would agree that things have changed a little bit. Demand has definitely picked up quite a bit and really on top of that, I think, as you look out over multiple years, you're going to see more of that spending going forward.

Alessandra Vecchi -- William Blair -- Analyst

Perfect. That was incredibly helpful. Thank you.

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

Sure, thank you.

Operator

Thank you. Our next question comes from Christopher Rolland with Susquehanna. Please proceed with your question.

Christopher Rolland -- Susquehanna International Group, LLP -- Analyst

Hey, guys. Thanks for the question. I want to dig into the supply situation a little bit more here. You mentioned it was more back-end, is this the substrate issue that most people are having, or is it something else like test or packaging? And what is the path toward kind of equilibrium look like there? And is there any way that us, analysts, can get a sense of the size of these constraints or how kind of the various pieces are moving? Are we having revenue push from Q1 to Q2 or Q2 to Q3? How should we be thinking about this? Thanks.

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

Yeah, Chris, I wish I could tell you. So we are working very hard. I mean, it's all of the above. I mean, everything substrates, lead frames, wire bonders that you've heard from numerous people. We're seeing a lot of those challenges, we do expect to see them through the rest of this year, hopefully they ease in each subsequent quarter, but there's no guarantee of that and the lead times have stretched tremendously, especially on the substrate side.

So, yeah, we've got some challenges that we got to work through. Fortunately, we've got a lot of demand, we've got a creative team and we've been working closely with our suppliers and we're also coordinating with our customers as well, trying to do what we can and cooperate with them to kind of maximize this output.

Christopher Rolland -- Susquehanna International Group, LLP -- Analyst

Okay, thanks. And then maybe we can -- you just mentioned lead times. So maybe dig in there a little bit more, maybe talk about where they were even six months or a year ago, where they are now, and talk about this maybe in the context of bookings and backlog here? How we can -- have you guys seen considerably more bookings than you're able to bill right now? Is that backlog building right now? And can you give us any sort of visibility into that backlog, what it might look like now and what this means for billings for you guys in future quarters?

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

Yeah, I mean, look, I think us, I mean, pretty consistent with what we've seen from others, I mean you're seeing lead times -- quoting lead times up to a year in advance and so 52 weeks is a long time to get product. And so we definitely have seen bookings increase quite dramatically. And so our backlogs increased. we've heard other peers talk about booking out an entire year. I mean, we're definitely seeing that, right? And so we're very confident. We've got great visibility, it's important that customers are kind of getting in line, and I think they've been reacting to make sure that they're scheduling out their own needs, and so we do have incredible visibility at this point. And so that really help from a planning perspective and gives us a lot more confidence. As we're forecasting the year albeit somewhat tough in the short-term, with some of the tighter supply constraints.

Christopher Rolland -- Susquehanna International Group, LLP -- Analyst

Thank you.

Operator

Thank you. Our next question comes from Bill Peterson with JP Morgan. Please proceed with your question.

Bill Peterson -- JP Morgan -- Analyst

Hi, good afternoon, and congrats on the results. Trying to ask sort of supply demand questions a little bit differently. I know you only guide one quarter at a time and that's fair, but I guess we see here how the impact on broadband is with the sequential decline, even amid strong demand, while connectivity obviously is up, but is the demand is such that -- can you drive I guess sequential growth in the third and fourth quarter across your businesses is the demand supportive of that and do you expect at this stage of supply could be supportive of growth in the back half across your various segments?

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

Yeah, Bill. These all are very great questions. They're also hard to answer when you don't have visibility, but I mean, look, I guess the best thing that I can say is, that I think we absolutely continue to see very tight constraints in Q2 and Q3. I think, we're optimistic things start to improve in Q4, and into next year, but there is no guarantees on these things. And so, that's my take on the overall supply chain.

I guess, I'd add and I don't know if this is part of your question or not, but on the broadband and connectivity side, just to may be echo what you've heard in our prepared remarks and what Kishore shared already. I do feel confident that you're going to continue to see growth there. I mean, as I look into next year, we're continuing to see really nice growth in that business from a year-over-year perspective. And so supply chain constraints are going to push some of that to the back half of the year and into '22. But I mean, we're seeing very solid demand in '22 already.

Bill Peterson -- JP Morgan -- Analyst

That's really good color. Maybe more specifically coming to the infrastructure and in particular access. We're hearing more about O-RAN coming. You kind of mentioned the Facebook opportunity, on one hand it feels like it's still few years away, but I guess, when do you really expect some of these O-RAN developments to start and how is MaxLinear positioned, you talked about the 8x8, but obviously, we've seen some announcements from some of your peers that they're working closely with some of the compute companies or other companies that have already sort of started some initial O-RAN deployments?

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Bill, obviously, we are working with all of those. If you're on the Facebook Evenstar program they're all natural allies and partners, and cool developers on the full solution. And so as being selected at the front end transceiver DFE, O-RAN single chip or macro base station applications, we are a big part of that game plan. Regarding things pushing out to years on shipment, my gosh, I mean we have been investing for three years now in wireless infrastructure and it seems like this is the nature of the beast.

O I think that if you are going to invest infrastructure and this is good in the optical side as well, is that you are in for the long haul. We are committed. The TAM is wonderful. It's very high quality product that really very complementary to our great engineering skills. And so we are in this for real and for the long-term. So while we live in this quarterly world of earnings this thing, my focus is the long-term and I think we should feel really, really good because we combine the analog RF mixed signal capabilities with really high end at the tip of the spear, 5-nanometer technology capabilities. I dare say among the players that are present today in this ecosystem, maybe there have been future ones. You can't pick anybody who can match it right now, right? It's a matter of getting into the customer and getting the sales to ramp and that's going to take at their pace, and that's OK. I've been patient now for 15 years in my life, I got 15 more to go.

Bill Peterson -- JP Morgan -- Analyst

It's good to hear that you're comparative in the space, and we look forward to seeing the progress. Thank you.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Thanks, Bill.

Operator

Thank you. Our next question comes from Sam Peterman with Craig-Hallum Capital Group. Please proceed with your question.

Sam Peterman -- Craig-Hallum Capital Group -- Analyst

Hi, guys. Sam on for Richard here. Thanks for taking my questions. I want to ask about MIMO. I'm curious what kind of share you guys think you can get with your SoCs from MIMO, particularly the 8x8 that you're coming to market toward the leading edge with you've named Texas Instruments, maybe [Indecipherable] your biggest competitors. Curious how you expect share to shake out and does Nokia ramping the recharge SoCs in 2021 effect at all? Thanks.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

You ask a very, very hard question, because nobody is shipping 8x8 right now, have some design wins been awarded, yes. And you really need to keep in mind that the Chinese OEMs are not part of the configuration right now for the most part for anybody, they are now reverting to the older platforms and shipments given the the regulatory restrictions, trade restrictions that both Huawei has been put under.

So now the whole dynamic has changed, and 8x8 is going to be driven by the western OEMs, and the Japanese and the Korean OEMs, and there we are really very competitive and actively engaged. And among the ones that in selected, we have won a couple. And so I think, ultimately this is going to be a two-player market on the transceiver space, and we hope to be one of the two. And that's where we are focused on closing out on.

Sam Peterman -- Craig-Hallum Capital Group -- Analyst

Okay. Great, that's helpful. And then just a quick follow-up on broadband, especially in WiFi, you've noted that both content and share has been increasing in recent quarters. So I'm curious how you characterize the split between content share and driving broadband growth this quarter? And if you expect one of the other to be a bigger driver of performance next quarter, and I'd be curious to if that answer would be different absent the supply constraints you've talked about?

Kishore Seendripu -- Chairman, President and Chief Executive Officer

I think, let's keep supply constraints completely out of the discussion here so that it give you a sense of a flavor, right? If I think about -- you rewind back the clock about two years ago, and if you look at where the Intel connected home business was in terms of the digital side of the SoC, and MaxLinear was the front end, those platforms had WiFi from third players. And then you fast forward to now, together we have all the WiFi, we have Ethernet, we have the baseband at the front end, and more importantly the ASPs of WiFI from three years ago to now have more than doubled or even closer triple this thing. So in a way the WiFi is the single biggest BOM element on the platform now.

So it's really an outsized component on the platform, and it will continue to be even more so as operators are trying to take control of your home, and provide services in the home and connectivity inside the home. So I would say that clearly, at least a doubling of the BOM has happened from a TAM perspective from three years ago. So, yes, we are benefiting I think substantially more on BOM increase as we move forward. At the same time in a couple of operators we are gaining more share. So if you combine the two you have a multiplicative effect. So, as Steve said, we are feeling pretty strong that the operator business is entering a big spending cycle, investment cycle, and will be very strong beneficiaries of that over the next few years to come.

Sam Peterman -- Craig-Hallum Capital Group -- Analyst

Okay, great. Thanks, guys.

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

Thanks, Sam.

Operator

Thank you. Our next question comes from Tim Savageaux with Northland Capital Markets. Please proceed with your question.

Tim Savageaux -- Northland Capital Markets -- Analyst

Hi, good afternoon, and congrats on the results. And I hopped on a little earlier, because I think you addressed a little bit of this, but maybe we can go into it. [Technical Issues] not really concerns growth in sort of the broadband connected home area and you've already said you can see the prospects for mid to high-single digit growth instead of low-single digit growth. I guess I would try and juxtapose that against your biggest competitor having an event recently and talking about double-digit growth potential for that $3 billion piece of their broadband IC business, and I think there are areas in which you do and don't overlap, particularly on the broadband infrastructure side. But a lot of overlap in CPE and connectivity. So I'd be interested in your thoughts on the potential for double-digit growth in that group, although I know I'm getting ahead of myself because you just raised it from low to high singles. But a comment, appreciate it.

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

Yes, well, I'll jump in first. There is no hedging going on here. We are both equally in this market. Yes, they have some -- I think you're aware, they have some infrastructure business that we don't have, but there was no hedging. I think it very well could be double-digit growth and the feedback that we're getting, the market traction that we're getting, insights that we're seeing from our customers, it absolutely can be double-digit growth.

Tim Savageaux -- Northland Capital Markets -- Analyst

Great, thanks very much and congratulations, again.

Operator

Thank you. There are no further questions at this time. I'd like to turn the call back to management for any closing remarks.

Kishore Seendripu -- Chairman, President and Chief Executive Officer

Thank you, operator. We will be participating at the following upcoming conferences during Q2. We'll be at the Needham Technology and Media Conference on May 18th, at the J.P. Morgan Global Technology, Media and Communications Conference on May 24th, the Craig-Hallum Institutional Investor Conference on June 2nd, at the Cowen Annual TMT Conference on June 3rd, and at the Stifel Cross Sector Insight on June 8th to June 10th. We hope to meet many of you there, and we look forward to relating to you further progress on our outlook. Thank you.

Operator

[Operator Closing Remarks]

Duration: 51 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 Financial Corp -- Analyst

Ananda Baruah -- Loop Capital Market -- Analyst

Michelle -- Analyst

Suji Desilva -- Roth Capital -- Analyst

Alessandra Vecchi -- William Blair -- Analyst

Christopher Rolland -- Susquehanna International Group, LLP -- Analyst

Bill Peterson -- JP Morgan -- Analyst

Sam Peterman -- Craig-Hallum Capital Group -- Analyst

Tim Savageaux -- Northland Capital Markets -- Analyst

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