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DATE

  • Wednesday, July 23, 2025, at 4:30 p.m. EDT

CALL PARTICIPANTS

  • Chief Executive Officer — Kishore Seendripu
  • Chief Financial Officer and Chief Corporate Strategy Officer — Steven Litchfield
  • VP, Investor Relations & Corporate Communications — Leslie Green

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TAKEAWAYS

  • Total Revenue: $108.8 million in total revenue for Q2 2025, a 13% sequential increase from $95.9 million in the previous quarter and an 18% increase from $92 million in the same period of 2024.
  • Non-GAAP Gross Margin: 59.1% non-GAAP gross margin in Q2 2025, with GAAP gross margin lower due to $2.6 million in acquisition-related intangible asset amortization.
  • Segment Revenue Breakdown: Infrastructure revenue was approximately $35 million, Broadband revenue was approximately $48 million, Connectivity revenue was approximately $21 million, and Industrial Multi-market revenue was $6 million for the second quarter.
  • Non-GAAP Operating Income: Non-GAAP operating income was 7% of net revenue; GAAP loss from operations was 22% of net revenue.
  • Non-GAAP Operating Expenses: $56.6 million in non-GAAP operating expenses, below the midpoint of guidance; GAAP operating expenses were $86.1 million, due primarily to $19.3 million in equity accruals, $5.6 million in restructuring, and $4.1 million in acquisition-related costs.
  • Interest and Other Expense: Non-GAAP interest and other expense was $5.9 million, and GAAP was $6.1 million, with $4 million attributed to foreign exchange costs.
  • Net Operating Cash Flow: $10.5 million provided by operating activities.
  • Cash Position: Ending cash, cash equivalents, and restricted cash totaled $110 million.
  • Inventory Turns: Inventory turns improved to 1.5 times, with gross inventory remaining approximately flat sequentially; day sales outstanding reduced to 89 days.
  • Q3 2025 Revenue Guidance: Projected revenue range of $115 million to $135 million across all end markets for Q3 2025.
  • Q3 Gross Margin Guidance: GAAP gross margin expected to be 55%-58% for Q3 2025; non-GAAP gross margin expected to be 57.5%-60.5% for Q3 2025.
  • Q3 Operating Expense Guidance: GAAP $84 million–$90 million; non-GAAP $55 million–$61 million.
  • Q3 Interest/Other Expense Guidance: $3.5 million–$4.5 million for both GAAP and non-GAAP.
  • Product/Market Momentum: Anticipates $60 million–$70 million in data center optical interconnect revenue in 2025, led by the 800G Keystone PAM4 DSP; The Rushmore 200G/lane 1.6T PAM4 DSP has seen "robust" customer design activity since its live demonstration at OFC 2025.
  • Design Wins: Reported wins for Sierra 5G radio SoC with two major North American telecom providers launching Sierra-based macro base station RU products in Q3 2025.
  • Panther Storage Accelerator: Next-gen Panther 5, capable of>2x Panther 3 performance at 500 Gb/s PCIe GenFi throughput, will be showcased at FMS 2025.
  • Ethernet Opportunity: Upgrading from 1G to 2.5G Ethernet using existing Cat5 cabling highlighted as a $100 million annual revenue potential by 2028.
  • Geographic Trends: Strength noted in U.S. and Europe; China lags in adoption but is projected to account for 40% of global transceiver volumes within three years.

SUMMARY

MaxLinear (MXL -5.74%) management emphasized a return to non-GAAP profitability and positive free cash flow, citing substantial backlog and demand in infrastructure, broadband, and high-speed optical interconnect segments. Strategic investments are focused on next-generation storage accelerators and advanced PAM4 DSPs, with expectations for further revenue ramp and customer adoption into 2026 and sustainable growth in profitability.

  • Chief Financial Officer Litchfield stated, "We expect our basic and diluted share count for Q3 2025 to be approximately 87.1 and 87.5, respectively."
  • Chief Executive Officer Seendripu said, "the other thing we are focused on is cost down improvements of our products" to "maintain and improve our gross margin as we move forward."
  • Management indicated the Panther product line could reach $75 million–$100 million in annual revenue within two to three years, with "proof of concept traction" suggesting potential upside. No GAAP or non-GAAP designation was specified for this projection.
  • The company is investing in low-power, high-speed technologies for AI-centric markets, positioning Panther storage accelerators as "very, very valid" for AI infrastructure.
  • Interest and other expense was notably impacted by foreign exchange, primarily due to exposure in the euro and shekel against the dollar.
  • Guidance assumes continued momentum in key product launches, including the ramp of integrated fiber PON and Wi-Fi gateway SoCs for a second major Tier 1 North American carrier later in 2025.
  • End-market demand visibility is steady except for optical interconnect, where order timing and call completion introduce forecast uncertainty.
  • The company intends to address future opportunities in co-packaged optics (CPO) by working with optics companies, but expects broad adoption of CPO to remain niche for the foreseeable future.

INDUSTRY GLOSSARY

  • PAM4 DSP: Digital signal processor using four-level pulse amplitude modulation for high-speed optical and copper communications.
  • Fiber PON: Passive optical network architecture for broadband access.
  • RU (Radio Unit): Component of 5G/4G base station architecture managing radio transmissions.
  • CPO (Co-Packaged Optics): Integration of optical transceivers and electronic switches within a single package for reduced latency and increased interconnect density in data centers.
  • Panther (Storage Accelerator SoC): MaxLinear’s line of hardware accelerators for storage data processing, compression, and security within network appliances and cloud storage systems.

Full Conference Call Transcript

Leslie Green: Thank you, Julian. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear, Inc.'s second quarter 2025 financial results. Today's call is being hosted by Dr. Kishore Seendripu, CEO, and Steven 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 the third quarter 2025, including revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, GAAP and non-GAAP interest and other GAAP and non-GAAP income taxes, and GAAP and non-GAAP diluted share count.

In addition, we will make forward-looking statements relating to trends, opportunities, execution of our business plan, and potential growth and uncertainties in various product and geographic markets, including, without limitations, statements concerning future financial and operating results, opportunities for revenue and market share across our target markets, new products, including the timing and production of launches of products, demand for and adoption of certain technologies, and our total addressable market. These forward-looking statements involve risks and uncertainties including risks outlined in our risk factors section of our recent SEC filings, including our Form 10-Q for the quarter ended June 30, 2025, which we filed today.

Any forward-looking statements are made as of today, and MaxLinear, Inc. has no obligation to update or revise any forward-looking statements. The second quarter 2025 earnings release is available in the Investor Relations section of our website at maxlinear.com. In addition, we report certain historical financial metrics including but not limited to gross margin, income from operations, operating expenses, and interest and other expense 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 changes, including stock-based compensation and its related tax effects, as well as potential impairments. Non-GAAP financial measures discussed today are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures. We are providing this information because management believes it is useful to investors as it reflects how management measures our business. Lastly, this call is also being webcast and the replay will be available on our website for two weeks. And now let me turn the call over to Dr. Kishore Seendripu, CEO of MaxLinear, Inc. Kishore?

Kishore Seendripu: Thank you, Leslie, and good afternoon, everyone. Our Q2 results not only reflect 13% sequential and 18% year-over-year growth in our business, but also point to a strong positive inflection in our business recovery and growth trajectory. Our revenue of approximately $109 million exceeded the midpoint of our guidance. Non-GAAP gross margin was 59.1%, and we delivered a meaningful reduction. With solid execution in Q2, we returned to profitability on a non-GAAP basis and generated positive free cash flow. We continue to drive strong customer and product traction in high data center optical interconnects, broadband access, Wi-Fi, and Ethernet.

Our growing success in these strategic markets, robust customer order rates and backlog, coupled with increasing telco cap spending, reinforce our confidence. In our infrastructure end market, we're excited by the sustained growth trajectory in 2025, and expect revenue acceleration in 2026 as new designs begin to ramp across our portfolio. In high-speed data center optical interconnects, we are on track to deliver $60 million to $70 million in revenue this year, primarily from our 800-gigabit five-nanometer Keystone PAM4 DSP product family. We anticipate additional 800-gigabyte PAM4 DSP customer calls and production rollout throughout 2025, which will drive incremental revenue growth in 2026.

Further, customer interest and design in activity for our Rushmore 200-gigabit per lane 1.6-terabyte PAM4 DSP has been robust since our live demonstration at the Optical Fiber Conference 2025 this year in San Francisco. Like Keystone, our Rushmore family of PAM4 TIAs, and 200-gigabit per lane DSPs per 1.6-terabit interconnects offer superior low power and performance advantages. This continues to be the basis of our competitive differentiation and expectations of design win momentum. In wireless infrastructure, the market continues to recover with expected increases in carrier CapEx spending driving demand for the second half of 2025 as well as 2026.

Our Sierra 5G wireless access single-chip radio SoC and our millimeter wave and microwave backhaul transceivers and modems are essential for supporting increasing mobile usage and data rates as well as new functionality such as edge AI. We have new design wins with our Sierra-based products, with two major North American telecom providers launching Sierra-based macro base station RU products in Q3. We expect to see sustained growth in 5G wireless access and backhaul as the needs for cloud and edge AI functionality continue to increase in 2026 and beyond. Also, within our infrastructure category, we continue to see strong design wins success for our Panther family of hardware storage accelerators SoCs across tier-one network appliance and cloud service providers.

In August, we will showcase our next-generation Panther 5 storage accelerator at the Future of Memory and Storage SMS 2025 conference in Santa Clara. Also at FMS 2025, we will have a joint keynote address with Advanced Micro Devices on the transformation of enterprise data storage. Panther delivered significant advantages over traditional software compression, including more than a 4x improvement in power savings, and much more efficient usage of CPUs and CPU cores and AI accelerators. Panther 5 is PCIe GenFi capable and at 500 gigabits per second throughput speeds, it delivers more than two times the performance of Panther 3 to enable ultra-low latency data processing across file, block, and object storage.

Moving to broadband and connectivity, we continue to see steady growth and are excited by the market outlook for meaningful increases in service provider CapEx spending. For example, both major North American carriers have announced plans to increase the scope and pace of their fiberPON access build-outs. These increased infrastructure investments by carriers and operators are driving continued booking strength and incremental demand for our fiber PON, cable boxes, and Wi-Fi solutions. Later this year, we will ramp our single-chip integrated fiber PON and ten-gigabit processor gateway SoC plus tri-band Wi-Fi seven single-chip platform solution with the second major Tier one North American carrier.

This new gateway SoC platform win represents an exciting growth opportunity and is also a significant validation of our technology on competitive positioning in the growing fiber PON market. In the Ethernet market, we continue to expand our tuner and a half gigabit Ethernet switch and five portfolio into commercial enterprise industrial applications. MaxLinear, Inc. has one of the broadest and most competitive offerings to enable the upgrade from one gigabit per second Ethernet legacy data rates to two now gigabit per second using existing Cat five cabling. This upgrade is driven by edge cloud expansion, IoT gateways, and enterprise access point transition to Wi-Fi six and Wi-Fi seven.

It represents a significant opportunity size for MaxLinear, Inc. of approximately $100 million per year in revenues by 2028. In Q2, we were pleased to announce 2.5-gigabit Ethernet-based multiport file and switch adoption by several notable partners including Asus, HiSource, and others. We look forward to closing the additional tier-one names in our design win pipeline. In conclusion, we are proud of our strong growth, return to profitability, and positive cash flow generation in Q2. Our success in the strategic areas of our product portfolio and the incremental tailwind from the ongoing recovery in our core markets has enabled us to turn an important corner in our business.

Our investments in high-value categories such as high-speed interconnect for the data center, multi-gigabit bond access, Wi-Fi connectivity, Ethernet storage accelerators, and virus infrastructure, are all driving strong product traction with tier-one customers and partners. We believe this positions us well for accelerated growth in 2025 and beyond. With that, let me now turn the call over to Steven Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer. Steve?

Steven Litchfield: Total revenue for the second quarter was $108.8 million, up 13% from $95.9 million in the previous quarter and up 18% from the $92 million in the second quarter of 2024. Infrastructure revenue for the second quarter was approximately $35 million, broadband revenue was approximately $48 million, connectivity revenue was approximately $21 million, and industrial multi-market revenue was approximately $6 million. The delta between GAAP and non-GAAP gross margin in the second quarter was primarily driven by $2.6 million of acquisition-related intangible asset amortization. Second quarter GAAP operating expenses were $86.1 million and non-GAAP operating expenses were $56.6 million.

The delta between GAAP and non-GAAP operating equity accruals of $19.3 million combined restructuring cost of $5.6 million and acquisition-related cost of $4.1 million. GAAP loss from operations for Q2 2025 was 22% and non-GAAP income from operations in Q2 was 7% of net revenue. GAAP and non-GAAP interest and other expense during the quarter was $6.1 million and $5.9 million respectively. The increase over the prior quarter was primarily due to $4 million in foreign exchange costs. In Q2, net cash flow provided in operating activities was approximately $10.5 million. We exited Q2 of 2025 with approximately $110 million in cash, cash equivalents, and restricted cash.

Ahead of our 2025 plan, our day sales outstanding was down in Q2 to 89 days. Our gross inventory was approximately flat versus the previous quarter with inventory turns improving to 1.5 times. This concludes the discussion of our Q2 financial results. With that, let's turn to the guidance for Q3 of 2025. We currently expect revenue in the third quarter of 2025 to be between $115 million and $135 million. Looking at Q3 by end market, we expect all end market infrastructure, broadband, connectivity, and industrial multi-market to be up in the quarter.

We expect third quarter GAAP gross margin to be approximately 55% to 58% and non-GAAP gross margin to be in the range of 57.5% and 60.5% of revenue. We expect Q3 2025 GAAP operating expenses to be in the range of $84 million to $90 million. We expect Q3 2025 non-GAAP operating expenses to be in the range of $55 million to $61 million. We expect our Q3 GAAP and non-GAAP interest and other expense each to be in the range of approximately $3.5 million to $4.5 million. We expect a $0.6 million tax benefit on a GAAP basis and a non-GAAP tax of $1.3 million or 11%.

We expect our Q3 basic and diluted share count to be approximately 87.1 and 87.5, respectively. In closing, we're pleased to report another quarter of solid progress marked by continued improvement in customer orders and growing traction across our product portfolio. Our focus investments in strategic high-growth areas such as optical high-speed interconnects, wireless infrastructure, storage, Ethernet, Wi-Fi, and fiber PON gateways are beginning to generate exciting business in 2026. This reinforces our confidence in our sustainable growth and profitability through 2025 and beyond. With that, I'd like to open up the call for questions. Julian?

Operator: You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up their handset before pressing the star keys. One moment while we pull for questions. And our first question comes from the line of Tore Svanberg with Stifel. Please proceed with your question.

Tore Svanberg: Yes. Thank you, and congratulations on the continuous recovery here. I guess my first question is on the Q3 outlook. I do appreciate that all segments are going to be up sequentially, but I mean, they have been quite volatile. Right? So can you maybe give us a little bit more granularity on how the segments are gonna perform in the quarter, at least maybe you know, which segment could potentially be stronger than the others?

Steven Litchfield: Hey, Tore. This is Steve. Yeah. I mean, look. I think you can see one of the biggest commitments that we've had here is infrastructure. I think that's the one that, you know, we continue to see nice performance, particularly in the back half of the year. So I think that should continue. I mean, clearly, you're seeing continued recovery in the broadband and connectivity end markets. And so those are two other ones that are getting good traction with some of the newer products as well as the recovery. And then probably industrial multi-market would be the third one there, which has clearly been a struggle, but, you know, we do expect to see a recovery there.

Tore Svanberg: Very good. And specifically on broadband, it was, you know, very, very strong this quarter. I know this can be a little bit difficult for you to assess, but any sense for how much of that growth is driven by inventory replenishment versus some of the newer products that you have there, you know, especially when I start thinking about some of the newer gateways that your end customers are launching.

Steven Litchfield: Well, Tore, I mean, as you know, this I mean, there has been a recovery underway, but I think what you're seeing in the market, and I think this is reflected in our numbers and our guidance and outlook, I guess, is kind of beyond that recovery. I mean, we're seeing CapEx dollars being deployed. You're hearing a lot about that in the market right now. About people reinvested. The service providers in particular carriers are being a lot more aggressive. You're also seeing the cable folks, you know, start to upgrade as well. So for all those reasons, we're seeing, you know, excitement around our business.

I would also add that, you know, we're continuing to gain market share and really win in the market. And I think that speaks to the value of our products themselves, the support that we're giving these customers, and our commitment to these customers.

Tore Svanberg: Very good. I'll go back in line. Thank you.

Steven Litchfield: Thanks, Tore.

Operator: Thank you. Our next question comes from the line of Christopher Rolland with Susquehanna International Group. Please proceed with your question.

Christopher Rolland: Thanks for the question guys and congrats on the results. I'd love to kind of dig a little bit deeper into Rushmore and seeing in terms of, like, Keystone, kinda Design Wins you're the makeup of those design wins or qualifications? Are they module makers? So because any has anything shifted? Do you have any anchor hyperscale customers just be great.

Kishore Seendripu: Hello, Chris. This is Kishore. Yes. Thank you. I'm also feeling pretty encouraged that we've finally turned the corner on the business here. And we see very strong robust growth continuing moving forward. Not just second half 2025 into 2026 and beyond. With all the new products that we're gonna add to the mix here. Coming back to the optical, you know, like we said, we're gonna double our revenue compared to last year, $60 to $70 million range, we feel. There's obviously some expected ramps towards the end of the year that will follow through into 2026 growth. And almost all of it is at the strength of on the back of Keystone.

And I just wanna point to where there are Keystone design wins are not inside. We have never participated in the NVIDIA ramps. So it's really more on the front side of the network, if you will. So, yes, we have a number of we have this designs with all the major module makers. In fact, I would to 100%, but I don't wanna say that because I don't know what I'm missing, so to speak. So we are really, in some sense, are sort of drag along in terms of the weight times where something takes to call at the various data centers. So we really don't dictate the acceleration of it sometimes.

It's the interop is related to the DSP issues, sometimes with the optic issues, but we work them together. And having said that, we're in multiple call interrupt stages with your data centers some, we're already shipping. And some we're in the pilot ramp phase, various phases. So I hope that answers your question. That's why we have all and we have never disclosed all the NCAS and we have been very careful because we don't wanna mislead you either. So but the revenues are very good. And the lead time is expanding, threatening to move increasing as well. We should start seeing more order pickup as we move into 2026. So that's one side of the story on Keystone.

Moving to Rushmore, we really feel that Rushmore maybe the tipping point for us from a technology incumbency point of view now really building on what key stood as offered as the number three guy. And maybe you hopefully move into the top two players. Right? All our companies in very nascent phases. They originally came out with the fine nanometer solution. Now they're scrambling to offer three nanometer solution, but we feel we need the right they're the first guys to move into a more advanced node. Our power low power offering and our superior performance we as we are focused on. I'm beginning lot of product details from all the vendors who have tried the competitive solutions.

So I think it's gonna be long game. Because 1.6 terabyte is just still starting innings. Why we not we do not see much discussions about AECs and such yet on 1.6 terabyte. You know, technically, I feel that if there's a play for call AECs will be real as we move towards 1.6 terabyte and beyond. So in that to that extent, we're very heavily engaged with both optical module makers and with what you call the copper guys. And you're also seeing the module makers also trying to now get into copper cables as well.

And our track record on Keystone is what gives them confidence that we are gonna be a pretty viable and a differentiating supplier and with a long-term roadmap. And with all the hoopla surrounding the PAM4 step, I can still claim. Like, immediately, there are only three vendors with credible solution for opt and the quality of the offering that is required in an AI network with robustness is even more important than an end-to-end more in the drop scenario. Hope that answers your question.

Christopher Rolland: That does. Thank you, Kishore. Maybe a second question for Steve. I think OpEx was a little bit higher than we were expecting. Just wondering what that was about and where the investment was. Also, interest and other expense was higher. And then lastly, the SIEMO arbitration still expected, I think, for the end of the year. I remember correctly.

Steven Litchfield: Those are real savvy way to get three questions. So real quick, a really important one, OpEx is actually below our midpoint of our guide. And honestly, some of I think what you're referring to is the guidance was probably a little bit higher than your expectation. So we did have some expenses that were pushed into Q3, and that kind of moves that number up a little bit more than we expected. I do expect it to come back down in Q4, but we're making great progress. I mean, if you look at the improvement that we made year over year on OpEx, it's been exceptional, and I think we'll continue to make improvements there.

I mean, we are making big investments as well. We're seeing nice growth and so we've got some good commitment to some of the newer product that you sort of spoke about earlier. So we're definitely spending on that front. Interest and other was a little higher. Yes. I called out in my prepared remarks about the $4 million of FX impact that we had in the quarter. That rolls up in that interest and other line. I mean, I think the whole world is seeing what's going on with the weakness of the dollar, and so that did impact us. I think it really speaks to the strength to the rest of the business.

Because we've been able to overcome that. You know, we'll see where the dollar goes. It still feels like there might be a little more headwind in the back half of the year, but regardless, I think we're really focused on our core business and executing there.

Kishore Seendripu: I think bringing back to where the investments are, our absolute strategic focus is on investing on the you know, what's the future of the AI world. Data center related, and the other important thing we are focused on is cost down improvements of our products. You know, I think I don't think they're the only ones, but the way the foundry business has evolved and got tremendous cost pressures coming from the foundry suppliers. And we have to take steps now to invest for cost production so that we maintain and improve our gross margin as we move forward.

So I think the second answer may be a little bit of a surprise for you, but I think that's absolutely a prudent thing to do to show up our profitability and bring back more leverage in our business model.

Christopher Rolland: Understood.

Steven Litchfield: I think Chris is probably dropped off, but I'll answer that last part. You did ask about Silken Motion. So no change on that front. We do expect arbitration in Q4 of this year. And then hopefully, we kinda get some resolution in the first half of next year. And then I think the ultimate finalization probably come somewhere in 2027 or 2028 if there was any, you know, cash to transact, I mean, it probably wouldn't push it would probably push until 2027 or 2028.

Christopher Rolland: Thanks guys. If you can still hear me. Thank you.

Operator: And our next question comes from the line of Ananda Baruah with Loop Capital Markets. Proceed with your question.

Ananda Baruah: Hey. Thanks guys for taking the question. Yeah. Kishore, just a little bit more on PAM4 DSP. Do you mentioned, you know, great accelerating growth in 2026 rev ramp. Do you think that comes from the current from the wins you have going into 2026? Primarily or can you see a big impact from the new qualifications as well. From Rushmore. And I have a quick follow-up as well. Thanks.

Kishore Seendripu: So, Ananda, good question. I just want to be very clear that the revenues in 2026 will still be 800-gigabit dominated. I don't see it's that 1.6 terabyte or more shipping. It's at the end of next year leading into 2027, honestly. And what has come as a huge surprise or shouldn't be anymore after these years is that qualification is indeed pretty rigorous. Everybody has their own timeline, and they go in phases from small volumes to bigger volumes than larger volumes. After that. And from a deployment point of view, I don't think anybody outside of the AI back end network guys are really, really in a position to deploy 1.6 terabit yet on the front end network.

So and the AI even from an Nvidia point of view, they don't expect this is my hearsay story. Yeah. They don't expect the revenue of 1.6 terabyte to pick up until the second half of next year. That is speaking today. And I would dare say that 800 gigabit will be the dominant shipping node for the next few years to come.

Ananda Baruah: That's helpful. Yeah. They're thinking it's a Ruben thing. So it sounds like you guys are thinking along the same lines as well. And then just given your remarks that as of right now, it's really the module makers where the calls are. Does that position you well for the growing neo cloud opportunity and the sovereign opportunity if Sovereign can get the licenses signed. You go through 2026.

Kishore Seendripu: We hope so. One of the things you know, you really want to keep this account is that's market has been starting for a third supplier. Yep. Whichever way you look at it, you And we have been a steady eighty in terms of not being there and doing the stuff. And really putting in a putting differentiation, enabling our module customers rather than dragging along the module guys with us. Right? And I think that really helps us in favor. And maybe they have opportunities where they're not beholden to using the incumbents. They give us chance every time. And I think that would really help us in all these other opportunities you're referring to.

Ananda Baruah: Yeah. That's great. I'll leave it there, guys. I appreciate it. Thanks.

Kishore Seendripu: Great. Ananda.

Operator: Thank you. Our next question comes from the line of Quinn Bolton with Needham and Company. Please proceed with your question.

Quinn Bolton: Hey, guys. I guess, a couple of questions, and congratulations on the nice outlook. First, I hate to ask, but since some other analog signal guys have talked about starting to see some pull in activity or inventory builds given tariff uncertainty, especially ahead of August first. Wondering if you think any of the orders you've seen I know you've seen orders strengthening now for several quarters. If any of that, you might be able to distinguish a sort of tariff or bull in related or do you think it's been pretty steady? And then I've got a follow-up.

Kishore Seendripu: It's so the orders have been very steady as strengthening. I think I reported that at the last quarter itself when you asked the same question and I said, you know, I cannot speak for the future orders, but I can definitely speak for the order that we already have that they've been seeded. These will try to fresh. Now look, from my point of view, we have been you know, we you know, post pandemic peak ordering and all the things that you dealt with, we were not in hurry to order or acknowledge order, so to speak.

But I think we will start seeing accelerating orders now related to sort of, you know, late reaction from some of our customers. And, however, we are not in a position to respond to them because the lead time's already stretched. Very, very rapidly. So don't think that's gonna benefit us all in terms of the revenues that we expect to generate in the next at least, the next couple of quarters to come. Because right now, the lead times of the o the assembly houses, now is as long as the foundries now. So you can assume that you're looking at six months of lead time now. Right? Okay. Maybe thereabouts.

So I don't think we can respond to this. I think the orders don't make a difference as to what means to our revenues moving forward.

Quinn Bolton: Got it. No. That was I think consistent with how you addressed that last quarter. And then you guys, I think in the prepared script, talked about seeing, you know, strength in the second half of 2025 and accelerating growth in 2026. And I just wanna make sure I'm not you know, misinterpreting your comments. Are you sort of suggesting you think annual growth in 2026 is even higher than what you're growing here appear to be growing in 2025?

Or just should we be thinking about the acceleration comment specifically talking about you know, year over year growth 2026 versus 2025 or you're just sort of talking about orders or other parts of the business and it's not sort of a comment per se about the revenue.

Kishore Seendripu: So When we talk of accelerating revenues, I was talking of sort of design wins within categories. So I think you want to parse through the script and section by section. We have this great design being with the major new North America operator, tier one operator. And we expect that to ramp in pretty serious heavy volume at the end of this year. So that clearly is an acceleration in my view. We talked about all these calls that are going on the optical in the infrastructure, so then that will result in such an outcome. Also talked to the access customers of our 5G product that are just beginning to ship in the second half.

For 5G applications to major North America operators. So I think it is the context of sort of new design wins with major players that will start ramping. And obviously, that's a great outcome for those product categories.

Quinn Bolton: Great. I squeeze in one quick one for Steve? I don't think you guys have ever sort of called out significant FX effects in past quarters. So the $4 million, you know, kind of FX charge this or charge expense, you know, kinda caught me by surprise you just sort of say where is that FX coming from? I assume you're pricing most stuff in dollars, but you maybe have employees or fixed costs located overseas. Is that is that the origin of the FX?

Steven Litchfield: Yeah. So, I mean, as you know, I mean, these are kinda historical moves in the dollar. I mean, it's been over thirty years since you've seen this much. But we took I mean, we transact in dollars, and so this is really just employees that we have is where it gets impacted. And you know, a few of the regions that were impacted, the euro is probably the biggest. Is where we saw the worst. Shekel as well. I mean, we're exposed in Israel. And some of these places, you know, we do hold some cash. I mean, yeah, it ended up being bigger than expected in the quarter.

We've had a from time to time in the past, and, you know, we've been able to overcome it with the strength of the business.

Quinn Bolton: Got it. Okay. Thank you.

Operator: Thank you. And our next question comes from the line of David Williams with The Benchmark Company. Please proceed with your question.

David Williams: Hey, gentlemen. Thanks for taking the question, and let me also give you my congrats on the solid progress here. So maybe first, Kishore, maybe from a geographic standpoint and in China specifically, you talk about any of the dynamics you're seeing there in terms of the strength it's building or where there's still areas that are not quite up to where you would hope they would be in terms of demand?

Kishore Seendripu: So hi, David. Thank you. Look, from a geographic point of view, the strength areas for us are US and Europe. But China, we're seeing different parts of the market behave very differently. I mean, Steve talked about an industrial multi-market segment being down, and there's really two parts to that.

One is there's a strong push for made in China product, and the same time, that alone creates surprising pressure, and we are taking very disciplined approach where we are walking away from businesses or revenue where the margins are not accretive to what we feel is the right benchmark for MaxLinear, Inc. and some cases, we are taking the business because strategically positioned us for holding out right now with the pressures, but later it'll strengthen our offering and therefore we can build back. So those are puts and takes in how we go about it. But in China, there's a big push now developing for them deploying their data center networks.

So there's gonna be a lot of spend in data center China. If I look at today's data center volumes for transceivers, they are maybe less than 20% of the market. But if we just forecast the three years out, China will be 40% of the transceiver volumes in the world. So that's a significant acceleration more than on a unit base is then than what the USCs. So the grade of yes. They're lagging by a generation or so. The USCs technology. And there, the incumbency is not very well established yet. Right? Because we are not behind in our offering timings.

So that gives us a very great position to work and see how we can build and great grab more market share. And, likewise, we're seeing strengthening in other infrastructure areas in where there's some spend going on, related spend. And but we are just generally seeing a certain weakness in industrial sort of areas besides the pressure from internal made in China. China story. So hope that gives you some color. If you when you think broadband and connectivity, please think North America, Europe, and some Latin America. When you think data centers, please think US, China.

And then when you think about when you think about our other infrastructure, that's Ethernet or storage accelerators, it's across the board geography. He's better with their enterprise provider. So I think that would give you a good sense of where the product mix is playing up. Okay?

David Williams: Yes. Very good color there. Thank you for that. And maybe just from a technology progression, we're clearly in the early stages. With Keystone Rushmore. As you think further out in the as you get to silicon photonics and co-packaged optics, do you have a roadmap to get there? And how do you think MaxLinear, Inc. plays into that trend as we move that direction? Thank you.

Kishore Seendripu: Yeah. Very, very good question. I was really looking forward to that question. Actually, if you just look at offering of any PAM4DSP and TIA companies, they have all the product technology platform to offer CPU related products. Whether it is, you know we can get into the details of that. So for us, it's about fulfilling order portfolio through derivatives. And sub level of customization we've working with customers. So the most important thing is to work with optics companies to develop our CPU offerings and get engaged with Optics companies to really customize their offerings related to CPU solutions. Having talk talking about CPUs, it's gonna be a very mixed world.

CPU is going to be a very, very, what I call, contained offering. Much of the network is going to be very much a pluggable offering with more sophisticated DSP transceivers or MROs, you know, that sort of mode offering. So I think that CPU is one thing we'll be definitely beginning to engage in to fill out our portfolio. But there's time yet to come for but there's no scenario in the world where CPO is sort of a broad base across the network is gonna be much more sort of don't use the word niche, but a containerized solution offering where everything is predetermined. Okay?

So when you talk of CPOs, you generally talk about an Nvidia or a Broadcom switch offering, but it's really not abroad across the network offering. And all hyperscale network providers will readily acknowledge technology. It's not even some of them even completely dismissing it. But we as a silicon company, we are working with the Opti's companies to offer a CPO. CPU silicon solution to, obviously, the offering is much more analog intensive when you go CPUs and less on the mixed signals. So digital less digital intensive. Okay?

David Williams: Fantastic. Great color. Thanks again.

Operator: Thank you. And our next question comes from the line of Karl Ackerman with BNP Paribas. Please proceed with your question.

Karl Ackerman: Yes. Thank you. I was hoping you could discuss which areas you've seen the most improvement in order visibility just given the type of beat raised this quarter. And in particular, with the second major tier one US carrier ramping your integrated PON and Wi-Fi gateway SoC, is this where you have a strong visibility and confidence in order recovery, or other areas as well? And I have a follow-up, please.

Kishore Seendripu: Oh, you know, across the board, really, if the uncertainty is there, it's really about the call timings are optical when we get through each call. Could that get that really sometimes like a whiplash, it goes, you know, and that's where the uncertainty is in the forecasting. But having said that, they put a stake in the ground saying, we feel good that we'll get to that $60 to $70 million revenue for the year in our data center revenue. Otherwise, across the board, we have very good visibility. And I would say that's got nothing to do with the new design team that we have. In progress.

Karl Ackerman: Yep. Understood. Thank you. And for my follow-up, you know, you mentioned again just some of the opportunities you see in front of you with regard to your Panther family. Hardware SSCs storage hardware SSCs. I was hoping you could discuss the breadth of wins individually that you see there, because it does appear to be picking up. So if you could discuss that, that'd be helpful. Thank you.

Kishore Seendripu: So, you know, we have been investing in this Panther storage compression and hardware accelerators for both storage compression, decryption, and security. For a while now. And, you know, it's again one of those heavy-duty, you know, inter you know, like, a lot of validation drugs just like any high-end infrastructure product is gonna be. But we got a number of proof of concept design wins complete. A number of major players in enterprise who are now incorporating it. And the only one we have talked about publicly is the Dell PowerMax platform. But it's proliferating across various competitors in the storage appliance market.

Having said that, we have just started initial forays and proof of concept at cloud compute hyperscale data center companies as well. And I'm very pleased with the reception having with those. So I hope to break into one of those as well. So and then obviously, this product was, you know, the cloud data center is evolving very, very rapidly. The specification requirements also evolved very rapidly. So we're really engaged in making sure the next generation offering has got all the bells and whistles that is perfectly and beautifully tuned for the cloud data centers. Having said that, it's a strong pipeline.

And I say that again, next year, we're gonna maybe triple the revenue of this year range, 2x to 3x. And they said the product line definitely in two or three years would be $75 to $100 million based on the offerings we know now. But with the proof of concept traction we have, could it be double that? I really hope so. And but I just want to save the wording a little bit more time. Okay?

Karl Ackerman: Thank you. Yep.

Operator: And our next question comes from the line of Suji Da Silva with ROTH Capital Partners. Proceed with your question.

Suji Da Silva: Hi, Kishore. Hi. Steve team. Glad to have the progress here. In the high-speed interconnect, if I heard you correct, I think you talked about your optimal copy of module customers. Exploring AEC opportunities. I'm wondering you if you have a roadmap to support any effort they're doing in terms of moving to either copper or from the front end to the back end or any thoughts there as your map? How that could play?

Kishore Seendripu: Suji, yes. Absolutely. I mean, all the products are designed to handle now the AC requirements, and they always been. However, so far, ACs have been super nichey. So it's like a watch and go sort of environment. However, by the time you but now you know, it is really it is really remains to be seen you know, who are the ones with it out. He's been beyond. And so I even believe that even though optical transceiver company are looking at it and try to create keep their options open, so they're now working towards creating their own AECs and ACs AECs and so on. So we are readily able to support them.

And remember that power is incredibly important. You can imagine an end-to-end copper cable, and, you know, you don't have all the fancy coolings and everything that others can do in optical transceiver module. This is a really, really, power consumption sensitive product. And, we've always seen MaxLinear, Inc.'s reason for existence is low power, low power, low power, and high speed. And I think there's a perfect application. Hopefully, it becomes a big application. But right now, we are just doing the cockpit things, Lingettes. Then become cockroaches later, so to speak. You know, the survivor of the longest time. Sorry. I got carried away. But, yes, we are engaged in this product line. Okay?

Suji Da Silva: Yeah. And then a quick question on Panther. I figured you mentioned enterprise quite a bit there. I'm just curious if there an application for Panther as well into AI infrastructure.

Kishore Seendripu: Absolutely. Very, very, very, very much so. Look, if you think of Panther, one of the biggest drivers for AI scenarios right now, power is one part. Memory. We talk of high bandwidth throughput memories. How do you re how do you get more out of the HBM? How do you relieve the bottlenecks that happens in the connection to these memories? Right? And all of these are incredibly important. And latency is super important. So and how do you offload some level of in-line compute. Right? These are all very, very important factors. And I don't think there is a more sweeter place for storage accelerators and smart storage accelerators than AI, actually.

So, however, it will require some level of future futuristic sort of engagement and these re and repositioning of the product features. So I think that this is gonna be very, very important, and for AI, it's very, very valid. Having said that small cloud service providers right now are actually one of them is already using it. There's one more who's about to use it. And there's some big guys that are looking at it acts as well. So I think it's a very, very, very conceivable that it's gonna become pretty AI-centric product as well. And I will not be surprised if the biggest AI system solution providers are not doing one of these things themselves as well.

Internally. I don't see why they won't be doing it, really frankly. That's my own conjecture, but so we feel very good we will be in a leadership position in this product. Thanks, Kishore.

Operator: And our final question comes from the line of Tore Svanberg with Stifel. Please proceed with your question.

Tore Svanberg: Yeah. Okay. Sure. I just had two follow-ups. The first one, and it's kinda related to the last question there, you know, your infrastructure, especially in the data center side, your two main competitors, are building more and more custom silicon. And as we think about rack level infrastructure, I'm just curious you know, are you sort of getting pulled into you know, potentially developing any sort of custom technology at this point? Or are you, you know, still very much focused on shipping merchant products?

Kishore Seendripu: Okay. I guess the second question will come later. Let me answer the first question here. Look, one of the most important what is the our incumbents have as an advantage? They're already suppliers to these guys, and they have these conversations that are beyond interconnects. Right? So for us too, it's the same credit path. We are right now establishing credibility with our interconnects, and we are showing various colors of all the technologies we bring in. But nobody can do dispute the breadth of our technology platform and depth I do think that's that's that's the dazzle. Right?

And so we are engaged with them and but right now from a scale positioning point of view, you know, we are not doing any custom silicon like one of our company is doing. However, we're customizing or offering to the differentiation requirements that these guys are looking forward to. I think it's very, very different. We do not have an internal custom ASIC business yet. We have seen a standard product offering. However, there's kind of product offering comes with some custom features for certain customers. And so I would differentiate that customization from the custom basic business that you are asking.

Having said that, we have we have recently loaded up on some you know, leadership here to do business development work to get business beyond the interconnect. Because if you just think about it, interconnect is a bookended solution. And interest having the third player in the system cannot be just be for the bookended solution. It has to be for something even more at a strategic vendor, and I think that's what we are working towards right now is to be really a broad-based strategic partner for this hyperscale data centers so that buying interconnect is just a phase of complete. It's not really the be all end all the company.

Tore Svanberg: That makes sense. Thank you.

Steven Litchfield: Thanks, Tore.

Kishore Seendripu: Thank you. I want to Yep. To with that, I want to thank everyone for this call today. As you have seen, we are really excited about where things are headed now, the recovery in our business. Generating strong cash positive cash flow now moving forward. So and further in this quarter, we presented a number of financial conferences virtually events, I'm sure, where we'll meet again, and the details of these events will be on our investor relations page. With that, thank you very much, and look forward to the next meeting. Thank you. Bye.

Operator: Thank you. And with that, this does conclude today's teleconference. We thank you for your participation. You may now disconnect your lines.