• Record net revenue of $156.6 million, up 140% sequentially and up 96% year-on-year
• Delivers strong results driven by infrastructure business improvements as well as continued strength from Broadband and WiFi product contributions

CARLSBAD, Calif. — (BUSINESS WIRE) — November 5, 2020 — MaxLinear, Inc. (NYSE: MXL), a leading provider of RF, analog, digital and mixed-signal integrated circuits, today announced financial results for the third quarter ended September 30, 2020.

Third Quarter Financial Highlights

GAAP basis:

• Net revenue was $156.6 million, up 140% sequentially, and up 96% year-on-year.
• GAAP gross margin was 42.3%, compared to 50.2% in the prior quarter, and 52.4% in the year-ago quarter.
• GAAP operating expenses were $100.8 million in the third quarter 2020, or 64% of net revenue, compared to $55.5 million in the prior quarter, or 85% of net revenue, and $45.2 million in the year-ago quarter, or 57% of net revenue.
• GAAP loss from operations was 22% of revenue, compared to loss from operations of 35% in the prior quarter, and loss from operations of 4% in the year-ago quarter.
• Net cash flow used in operating activities was $16.6 million, compared to net cash flow provided by operating activities of $9.3 million in the prior quarter, and net cash flow provided by operating activities of $21.8 million in the year-ago quarter.
• GAAP diluted loss per share was $0.50, compared to diluted loss per share of $0.30 in the prior quarter, and diluted loss per share of $0.07 in the year-ago quarter.

Non-GAAP basis:

• Non-GAAP gross margin was 58.0%. This compares to 63.7% in the prior quarter, and 63.1% in the year-ago quarter.
• Non-GAAP operating expenses were $61.1 million, or 39% of revenue, compared to $32.6 million or 50% of revenue in the prior quarter, and $30.8 million or 38% of revenue in the year-ago quarter.
• Non-GAAP income from operations was 19% of revenue, compared to 14% in the prior quarter, and 25% in the year-ago quarter.
• Non-GAAP diluted earnings per share was $0.32, compared to diluted earnings per share of $0.09 in the prior quarter, and diluted earnings per share of $0.23 in the year-ago quarter.

Recent Business Highlights

• Completed acquisition of Intel’s Home Gateway Platform Division broadening its existing connected home portfolio by bringing together a complete, scalable, complementary platform of connectivity and access solutions
• Completed acquisition of NanoSemi, Inc., strengthening its IP portfolio for its 5G and WiFi base station solutions

Management Commentary

“In the third quarter, we posted record revenue due to stronger-than-expected demand for broadband access and connectivity products, along with meaningful quarterly improvements in our infrastructure business. These results not only support our positive outlook for new revenues with our PAM4 DSP product for the 400G optical datacenter market and 5G wireless backhaul and access product offerings, but they also point to a new all-time high revenue guidance in the fourth quarter,” commented Kishore Seendripu, Ph.D., Chairman and CEO.

“We realized partial quarter contribution from the acquisition of Intel’s Home Gateway Platform Division, which has exceeded our initial expectations of revenue and the potential for improving its cost structure. We are benefiting from the strong demand for increased data access bandwidth and its robust distribution inside the home using WiFi-connectivity. Additionally, on September 9, we closed the acquisition of NanoSemi, which will greatly strengthen MaxLinear’s 5G wireless infrastructure product offerings and our competitive positioning in the market. Overall, we are confident in exceeding our prior outlook driven by new product cycles, market share gains in our broadband business, and disciplined expense management,” continued Dr. Seendripu.

Fourth Quarter 2020 Business Outlook

The company expects revenue in the fourth quarter 2020 to be approximately $185 million to $195 million. The Company also estimates the following:

• GAAP gross margin of approximately 40% to 44%;
• Non-GAAP gross margin of approximately 56% to 59%;
• GAAP operating expenses of approximately $107 million to $111 million; and
• Non-GAAP operating expenses of approximately $74 million to $78 million.

Webcast and Conference Call

MaxLinear will host its third quarter financial results conference call today, November 5, 2020 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). To access this call, dial US toll free: 1-877-407-3109 / International: 1-201-493-6798. A live webcast of the conference call will be accessible from the investor relations section of the MaxLinear website at https://investors.maxlinear.com, and will be archived and available after the call at https://investors.maxlinear.com until November 20, 2020. A replay of the conference call will also be available until November 19, 2020 by dialing US toll free: 1-877-660-6853 / International: 1-201-612-7415 and Conference ID#: 13711771.

Cautionary Note Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements concerning our future financial performance (including specifically our current guidance for fourth quarter 2020 revenue, gross margins, and operating expenses) and statements concerning expectations of potential developments in our target markets, including management’s views with respect to the prospects for and trends in our broadband, connected home and 5G wireless and fiber-optic high-speed interconnect infrastructure markets. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by the forward-looking statements. Forward-looking statements are based on management’s current, preliminary expectations and are subject to various risks and uncertainties. In particular, our future operating results are substantially dependent on our assumptions about market trends and conditions and our expectations with respect to the impact of our acquisitions of the Home Gateway Platform Division of Intel Corporation, which we refer to as the WiFi and Broadband assets business and NanoSemi, Inc. With respect to our acquisitions of the WiFi and Broadband assets business and NanoSemi, we face particular risks associated with our ability to successfully complete the integration of the acquired businesses and maintain relationships with employees, customers, and vendors. The WiFi and Broadband assets business and NanoSemi operate in jurisdictions materially affected by the novel coronavirus (COVID-19) pandemic, which enhances integration risks, particularly relating to employee hiring and retention. The WiFi and Broadband assets business and NanoSemi have operations that differ from those of MaxLinear, and we may be unable to realize anticipated strategic, financial, and operating synergies. In addition, we have incurred incremental acquisition-related indebtedness, which will enhance specific risks relating to our ability to service interest and principal payments on our combined indebtedness and limitations on our operating flexibility based on financial and operating covenants in the applicable term loan agreements, including (without limitation) debt covenant restrictions that may limit our ability to obtain additional financing, issue guarantees, create liens, make certain restricted payments or repay certain obligations or to pursue future acquisitions. Additional risks and uncertainties affecting our business and future operating results include, without limitation, the on-going impact of the COVID-19 pandemic, including whether and the extent to which we will continue to benefit from work-from-home and similar initiatives as the situation progresses; risks associated with our ability to realize improved profitability from our WiFi and Broadband assets business and Nanosemi; intense competition in our industry; our dependence on a limited number of customers for a substantial portion of our revenues; potential uncertainties arising from continued consolidation among cable television and satellite operators in our target markets and continued consolidation among competitors within the semiconductor industry generally; our ability to develop and introduce new and enhanced products on a timely basis and achieve market acceptance of those products, particularly as we seek to expand outside of our historic markets; impact of the COVID-19 pandemic on customer demand and on our business and global financial markets in general; potential decreases in average selling prices for our products; risks relating to intellectual property protection and the prevalence of intellectual property litigation in our industry; our reliance on a limited number of third party manufacturers; our lack of long-term supply contracts and dependence on limited sources of supply; uncertainties concerning how end user markets for our products will develop, including in particular markets we have entered more recently such as the 5G wireless and fiber-optic data center high-speed interconnect infrastructure markets but also existing markets such as connected home; and uncertainties concerning the outcome of global trade negotiations, export control limitations, and heightened geopolitical risks generally.