MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
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Three Months Ended | Six Months Ended | ||||||||||||||||||||
March 29,
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December 28,
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March 30,
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March 29,
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March 30,
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Revenue | $ | 128,465 | $ | 150,689 | $ | 150,414 | $ | 279,154 | $ | 281,338 | |||||||||||
Cost of revenue | 71,135 | 74,064 | 84,813 | 145,199 | 154,784 | ||||||||||||||||
Gross profit | 57,330 | 76,625 | 65,601 | 133,955 | 126,554 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Research and development | 42,361 | 43,525 | 41,596 | 85,885 | 83,246 | ||||||||||||||||
Selling, general and administrative | 41,998 | 42,519 | 39,287 | 84,518 | 76,922 | ||||||||||||||||
Impairment charges | — | — | 6,575 | — | 6,575 | ||||||||||||||||
Restructuring charges | 3,182 | 4,978 | 1,539 | 8,160 | 6,200 | ||||||||||||||||
Total operating expenses | 87,541 | 91,022 | 88,997 | 178,563 | 172,943 | ||||||||||||||||
Loss from operations | (30,211 | ) | (14,397 | ) | (23,396 | ) | (44,608 | ) | (46,389 | ) | |||||||||||
Other (expense) income: | |||||||||||||||||||||
Warrant liability (expense) gain | (1,607 | ) | 5,468 | 17,015 | 3,862 | 31,624 | |||||||||||||||
Interest expense, net | (9,402 | ) | (8,773 | ) | (7,970 | ) | (18,175 | ) | (15,209 | ) | |||||||||||
Other expense, net | (4,440 | ) | (4,569 | ) | (4,139 | ) | (9,010 | ) | (4,133 | ) | |||||||||||
Total other (expense) income | (15,449 | ) | (7,874 | ) | 4,906 | (23,323 | ) | 12,282 | |||||||||||||
Loss before income taxes | (45,660 | ) | (22,271 | ) | (18,490 | ) | (67,931 | ) | (34,107 | ) | |||||||||||
Income tax expense (benefit) | 544 | 1,125 | (3,024 | ) | 1,669 | (1,671 | ) | ||||||||||||||
Loss from continuing operations | (46,204 | ) | (23,396 | ) | (15,466 | ) | (69,600 | ) | (32,436 | ) | |||||||||||
Loss from discontinued operations | — | — | (18 | ) | — | (5,617 | ) | ||||||||||||||
Net loss | $ | (46,204 | ) | $ | (23,396 | ) | $ | (15,484 | ) | $ | (69,600 | ) | $ | (38,053 | ) | ||||||
Net loss per share: | |||||||||||||||||||||
Basic: | |||||||||||||||||||||
Loss from continuing operations | $ | (0.71 | ) | $ | (0.36 | ) | $ | (0.24 | ) | $ | (1.06 | ) | $ | (0.50 | ) | ||||||
Loss from discontinued operations | — | — | — | — | (0.09 | ) | |||||||||||||||
Loss per share - basic | $ | (0.71 | ) | $ | (0.36 | ) | $ | (0.24 | ) | $ | (1.06 | ) | $ | (0.59 | ) | ||||||
Diluted: | |||||||||||||||||||||
Loss from continuing operations | $ | (0.71 | ) | $ | (0.44 | ) | $ | (0.50 | ) | $ | (1.12 | ) | $ | (0.98 | ) | ||||||
Loss from discontinued operations | — | — | — | — | (0.09 | ) | |||||||||||||||
Loss per share - diluted | $ | (0.71 | ) | $ | (0.44 | ) | $ | (0.50 | ) | $ | (1.12 | ) | $ | (1.07 | ) | ||||||
Shares - Basic | 65,531 | 65,277 | 64,549 | 65,404 | 64,437 | ||||||||||||||||
Shares - Diluted | 65,531 | 65,444 | 65,132 | 65,610 | 65,120 | ||||||||||||||||
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
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March 29,
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September 28,
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ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 92,677 | $ | 94,676 | ||||
Short term investments | 99,708 | 98,221 | ||||||
Accounts receivable, net | 87,386 | 97,375 | ||||||
Inventories | 119,940 | 122,837 | ||||||
Income tax receivable | 15,765 | 17,601 | ||||||
Assets held for sale, current | — | 4,840 | ||||||
Prepaids and other current assets | 29,783 | 23,311 | ||||||
Total current assets | 445,259 | 458,861 | ||||||
Property and equipment, net | 149,952 | 149,923 | ||||||
Goodwill and intangible assets, net | 786,931 | 826,861 | ||||||
Deferred income taxes | 2,298 | 2,272 | ||||||
Other investments | 22,123 | 31,094 | ||||||
Other long-term assets | 13,383 | 13,484 | ||||||
TOTAL ASSETS | $ | 1,419,946 | $ | 1,482,495 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of lease payable | $ | 1,194 | $ | 467 | ||||
Current portion of long-term debt | 6,885 | 6,885 | ||||||
Accounts payable | 35,080 | 41,951 | ||||||
Accrued liabilities | 45,430 | 49,945 | ||||||
Deferred revenue | 215 | 7,757 | ||||||
Total current liabilities | 88,804 | 107,005 | ||||||
Lease payable, less current portion | 29,147 | 29,023 | ||||||
Long-term debt obligations, less current portion | 656,821 | 658,372 | ||||||
Common stock warrant liability | 9,268 | 13,129 | ||||||
Deferred income taxes | 452 | 389 | ||||||
Other long-term liabilities | 18,429 | 5,902 | ||||||
Total liabilities | 802,921 | 813,820 | ||||||
Stockholders' equity | 617,025 | 668,675 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,419,946 | $ | 1,482,495 | ||||
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
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Six Months Ended | |||||||||
March 29,
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March 30,
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CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
Net loss | $ | (69,600 | ) | $ | (38,053 | ) | |||
Depreciation and amortization | 55,478 | 54,439 | |||||||
Share based compensation | 17,349 | 15,342 | |||||||
Warrant liability gain | (3,862 | ) | (31,624 | ) | |||||
Acquired inventory step-up amortization | — | 224 | |||||||
Deferred income taxes | 46 | (573 | ) | ||||||
Loss on minority equity investment | 8,971 | 4,085 | |||||||
Restructuring and impairment related charges | 4,696 | 9,143 | |||||||
Other adjustments to reconcile loss to net operating cash | 2,408 | (2,860 | ) | ||||||
Inventories | 2,904 | (9,240 | ) | ||||||
Accounts receivable | 9,989 | 28,992 | |||||||
Change in other operating assets and liabilities | (1,541 | ) | (18,719 | ) | |||||
Net cash provided by operating activities | 26,838 | 11,156 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
Acquisition of businesses, net | (375 | ) | — | ||||||
Sales, purchases and maturities of investments | (504 | ) | 56,241 | ||||||
Purchases of other investments | — | (5,000 | ) | ||||||
Proceeds associated with discontinued operations | — | (263 | ) | ||||||
Purchases of property and equipment | (22,600 | ) | (26,580 | ) | |||||
Net cash (used in) provided by investing activities | (23,479 | ) | 24,398 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
Proceeds from corporate facility financing obligation | — | 1,081 | |||||||
Payments of notes payable and assumed debt | (3,960 | ) | (3,847 | ) | |||||
Proceeds from stock option exercises and employee stock purchases | 2,416 | 3,252 | |||||||
Repurchase of common stock | (3,426 | ) | (3,846 | ) | |||||
Other adjustments | (577 | ) | — | ||||||
Net cash used in financing activities | (5,547 | ) | (3,360 | ) | |||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 189 | 397 | |||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (1,999 | ) | 32,591 | ||||||
CASH AND CASH EQUIVALENTS — Beginning of period | 94,676 | 130,104 | |||||||
CASH AND CASH EQUIVALENTS — End of period | $ | 92,677 | $ | 162,695 | |||||
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
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Three Months Ended | Six Months Ended | |||||||||||||||||||||||
March 29, 2019 | December 28, 2018 | March 30, 2018 | March 29, 2019 | March 30, 2018 | ||||||||||||||||||||
Amount | Amount | Amount | Amount | Amount | ||||||||||||||||||||
Revenue - GAAP | $ | 128,465 | $ | 150,689 | $ | 150,414 | $ | 279,154 | $ | 281,338 | ||||||||||||||
Deferred revenue | (7,000 | ) | — | — | (7,000 | ) | — | |||||||||||||||||
Adjusted revenue (Non-GAAP) | $ | 121,465 | $ | 150,689 | $ | 150,414 | $ | 272,154 | $ | 281,338 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
March 29, 2019 | December 28, 2018 | March 30, 2018 | March 29, 2019 | March 30, 2018 | |||||||||||||||||||||||||||||||
Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | ||||||||||||||||||||||||||
Gross profit - GAAP | $ | 57,330 | 44.6 | $ | 76,625 | 50.8 | $ | 65,601 | 43.6 | $ | 133,955 | 48.0 | $ | 126,554 | 45.0 | ||||||||||||||||||||
Amortization expense | 7,872 | 6.5 | 8,053 | 5.3 | 8,173 | 5.4 | 15,925 | 5.9 | 16,320 | 5.8 | |||||||||||||||||||||||||
Share-based and non-cash compensation | 942 | 0.8 | 533 | 0.4 | 952 | 0.6 | 1,475 | 0.5 | 1,879 | 0.7 | |||||||||||||||||||||||||
Impairment related charges | — | — | (991 | ) | (0.7 | ) | 2,568 | 1.7 | (991 | ) | (0.4 | ) | 2,568 | 0.9 | |||||||||||||||||||||
Acquisition, integration and restructuring related costs | — | — | 547 | 0.4 | 358 | 0.2 | 547 | 0.2 | 697 | 0.2 | |||||||||||||||||||||||||
Deferred revenue | (7,000 | ) | (5.8 | ) | — | — | — | — | (7,000 | ) | (2.6 | ) | — | — | |||||||||||||||||||||
Adjusted gross profit (Non-GAAP) | $ | 59,144 | 48.7 | $ | 84,767 | 56.3 | $ | 77,652 | 51.6 | $ | 143,911 | 52.9 | $ | 148,018 | 52.6 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||
March 29, 2019 | December 28, 2018 | March 30, 2018 | March 29, 2019 | March 30, 2018 | ||||||||||||||||||||||||||||||||
Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||||||||||
Operating expenses - GAAP | $ | 87,541 | 68.1 | $ | 91,022 | 60.4 | $ | 88,997 | 59.2 | $ | 178,563 | 64.0 | $ | 172,943 | 61.5 | |||||||||||||||||||||
Amortization expense | (11,883 | ) | (9.8 | ) | (12,519 | ) | (8.3 | ) | (11,753 | ) | (7.8 | ) | (24,402 | ) | (9.0 | ) | (22,746 | ) | (8.1 | ) | ||||||||||||||||
Share-based and non-cash compensation | (8,279 | ) | (6.8 | ) | (8,530 | ) | (5.7 | ) | (3,683 | ) | (2.4 | ) | (16,808 | ) | (6.2 | ) | (11,972 | ) | (4.3 | ) | ||||||||||||||||
Impairment and restructuring charges | (3,182 | ) | (2.6 | ) | (4,978 | ) | (3.3 | ) | (8,114 | ) | (5.4 | ) | (8,160 | ) | (3.0 | ) | (12,775 | ) | (4.5 | ) | ||||||||||||||||
Litigation costs | (16 | ) | — | (151 | ) | (0.1 | ) | (781 | ) | (0.5 | ) | (167 | ) | (0.1 | ) | (1,527 | ) | (0.5 | ) | |||||||||||||||||
Acquisition, integration and restructuring related costs | (848 | ) | (0.7 | ) | (1,972 | ) | (1.3 | ) | (2,753 | ) | (1.8 | ) | (2,821 | ) | (1.0 | ) | (5,069 | ) | (1.8 | ) | ||||||||||||||||
Adjusted operating expenses (Non-GAAP) | $ | 63,333 | 52.1 | $ | 62,872 | 41.7 | $ | 61,913 | 41.2 | $ | 126,205 | 46.4 | $ | 118,854 | 42.2 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||
March 29, 2019 | December 28, 2018 | March 30, 2018 | March 29, 2019 | March 30, 2018 | ||||||||||||||||||||||||||||||||
Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||||||||||
Loss from operations - GAAP | $ | (30,211 | ) | (23.5 | ) | $ | (14,397 | ) | (9.6 | ) | $ | (23,396 | ) | (15.6 | ) | $ | (44,608 | ) | (16.0 | ) | $ | (46,389 | ) | (16.5 | ) | |||||||||||
Amortization expense | 19,756 | 16.3 | 20,572 | 13.7 | 19,926 | 13.2 | 40,327 | 14.8 | 39,065 | 13.9 | ||||||||||||||||||||||||||
Share-based and non-cash compensation | 9,190 | 7.6 | 9,063 | 6.0 | 4,635 | 3.1 | 18,252 | 6.7 | 13,851 | 4.9 | ||||||||||||||||||||||||||
Impairment and restructuring charges | 3,182 | 2.6 | 3,987 | 2.6 | 10,681 | 7.1 | 7,169 | 2.6 | 15,343 | 5.5 | ||||||||||||||||||||||||||
Litigation costs | 16 | — | 151 | 0.1 | 781 | 0.5 | 167 | 0.1 | 1,527 | 0.5 | ||||||||||||||||||||||||||
Acquisition, integration and restructuring related costs | 879 | 0.7 | 2,519 | 1.7 | 3,112 | 2.1 | 3,398 | 1.2 | 5,765 | 2.0 | ||||||||||||||||||||||||||
Deferred revenue | (7,000 | ) | (5.8 | ) | — | — | — | — | (7,000 | ) | (2.6 | ) | — | — | ||||||||||||||||||||||
Adjusted (loss) income from operations (Non-GAAP) | $ | (4,188 | ) | (3.4 | ) | $ | 21,895 | 14.5 | $ | 15,739 | 10.5 | $ | 17,705 | 6.5 | $ | 29,162 | 10.4 | |||||||||||||||||||
Depreciation expense | 7,539 | 6.2 | 7,612 | 5.1 | 7,622 | 5.1 | 15,151 | 5.6 | 15,088 | 5.4 | ||||||||||||||||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 3,351 | 2.8 | $ | 29,507 | 19.6 | $ | 23,361 | 15.5 | $ | 32,856 | 12.1 | $ | 44,250 | 15.7 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||
March 29, 2019 | December 28, 2018 | March 30, 2018 | March 29, 2019 | March 30, 2018 | ||||||||||||||||||||||||||||||||
Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||||||||||
Net loss - GAAP | $ | (46,204 | ) | (36.0 | ) | $ | (23,396 | ) | (15.5 | ) | $ | (15,484 | ) | (10.3 | ) | $ | (69,600 | ) | (24.9 | ) | $ | (38,053 | ) | (13.5 | ) | |||||||||||
Amortization expense | 19,756 | 16.3 | 20,572 | 13.7 | 19,926 | 13.2 | 40,327 | 14.8 | 39,065 | 13.9 | ||||||||||||||||||||||||||
Share-based and non-cash compensation | 9,190 | 7.6 | 9,063 | 6.0 | 4,635 | 3.1 | 18,252 | 6.7 | 13,851 | 4.9 | ||||||||||||||||||||||||||
Impairment and restructuring charges | 3,182 | 2.6 | 3,987 | 2.6 | 10,681 | 7.1 | 7,169 | 2.6 | 15,343 | 5.5 | ||||||||||||||||||||||||||
Warrant liability expense (gain) | 1,607 | 1.3 | (5,468 | ) | (3.6 | ) | (17,015 | ) | (11.3 | ) | (3,862 | ) | (1.4 | ) | (31,624 | ) | (11.2 | ) | ||||||||||||||||||
Non-cash interest, net | 1,015 | 0.8 | 1,015 | 0.7 | 1,508 | 1.0 | 2,031 | 0.7 | 2,536 | 0.9 | ||||||||||||||||||||||||||
Litigation costs | 16 | — | 151 | 0.1 | 781 | 0.5 | 167 | 0.1 | 1,527 | 0.5 | ||||||||||||||||||||||||||
Acquisition, integration and restructuring related costs | 879 | 0.7 | 2,519 | 1.7 | 3,112 | 2.1 | 3,398 | 1.2 | 5,765 | 2.0 | ||||||||||||||||||||||||||
Production and product line exits | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Discontinued operations | — | — | — | — | 18 | — | — | — | 5,617 | 2.0 | ||||||||||||||||||||||||||
Equity investment and sale of business losses | 4,415 | 3.6 | 4,446 | 3.0 | 4,085 | 2.7 | 8,860 | 3.3 | 4,085 | 1.5 | ||||||||||||||||||||||||||
Deferred revenue | (7,000 | ) | (5.8 | ) | — | — | — | — | (7,000 | ) | (2.6 | ) | — | — | ||||||||||||||||||||||
Tax effect of non-GAAP adjustments | 1,552 | 1.3 | 4 | — | (3,762 | ) | (2.5 | ) | 1,556 | 0.6 | (2,986 | ) | (1.1 | ) | ||||||||||||||||||||||
Adjusted net (loss) income (Non-GAAP) | $ | (11,592 | ) | (9.5 | ) | $ | 12,893 | 8.6 | $ | 8,485 | 5.6 | $ | 1,298 | 0.5 | $ | 15,126 | 5.4 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||||||
March 29, 2019 | December 28, 2018 | March 30, 2018 | March 29, 2019 | March 30, 2018 | |||||||||||||||||||||||||||||||||||||
Net Income
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Income (loss)
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Net Income
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Income (loss)
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Net Income
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Income (loss)
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Net Income
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Income (loss)
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Net Income
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Income (loss)
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Net loss - GAAP | $ | (46,204 | ) | $ | (23,396 | ) | (15,484 | ) | (69,600 | ) | (38,053 | ) | |||||||||||||||||||||||||||||
Warrant liability gain | — | (5,468 | ) | (17,015 | ) | (3,862 | ) | (31,624 | ) | ||||||||||||||||||||||||||||||||
Net loss - diluted | $ | (46,204 | ) | $ | (0.71 | ) | $ | (28,864 | ) | $ | (0.44 | ) | $ | (32,499 | ) | $ | (0.50 | ) | $ | (73,462 | ) | $ | (1.12 | ) | $ | (69,677 | ) | $ | (1.07 | ) | |||||||||||
Adjusted net (loss) income (Non-GAAP) | $ | (11,592 | ) | $ | (0.18 | ) | $ | 12,893 | $ | 0.20 | $ | 8,485 | $ | 0.13 | $ | 1,298 | $ | 0.02 | $ | 15,126 | $ | 0.23 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
March 29, 2019 | December 28, 2018 | March 30, 2018 | March 29, 2019 | March 30, 2018 | |||||||||||||||||||
Shares | Shares | Shares | Shares | Shares | |||||||||||||||||||
Diluted shares - GAAP | 65,531 | 65,444 | 65,132 | 65,610 | 65,120 | ||||||||||||||||||
Incremental shares | 425 | 129 | 478 | 155 | 489 | ||||||||||||||||||
Adjusted diluted shares (Non-GAAP) | 65,956 | 65,573 | 65,610 | 65,765 | 65,609 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||
March 29, 2019 | December 28, 2018 | March 30, 2018 | March 29, 2019 | March 30, 2018 | ||||||||||||||||||||||||||||||||
Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||||||||||
Interest expense, net - GAAP | $ | 9,402 | 7.3 | $ | 8,773 | 5.8 | $ | 7,970 | 5.3 | $ | 18,175 | 6.5 | $ | 15,209 | 5.4 | |||||||||||||||||||||
Non-cash interest expense | (1,016 | ) | (0.8 | ) | (1,015 | ) | (0.7 | ) | (1,508 | ) | (1.0 | ) | (2,031 | ) | (0.7 | ) | (2,536 | ) | (0.9 | ) | ||||||||||||||||
Adjusted Interest Expense (Non-GAAP) | $ | 8,386 | 6.9 | $ | 7,758 | 5.1 | $ | 6,462 | 4.3 | $ | 16,144 | 5.9 | $ | 12,673 | 4.5 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||
March 29, 2019 | December 28, 2018 | March 30, 2018 | March 29, 2019 | March 30, 2018 | ||||||||||||||||||||||||||||||||
Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | Amount | % Revenue | |||||||||||||||||||||||||||
Cash flow from operations | $ | 23,929 | 18.6 | $ | 2,909 | 1.9 | $ | 10,621 | 7.1 | $ | 26,838 | 9.6 | $ | 11,156 | 4.0 | |||||||||||||||||||||
Capital expenditures | (11,079 | ) | (9.1 | ) | (11,521 | ) | (7.6 | ) | (12,756 | ) | (8.5 | ) | (22,600 | ) | (8.3 | ) | (26,580 | ) | (9.4 | ) | ||||||||||||||||
AppliedMicro transaction-related payments | — | — | — | — | — | — | — | — | 4,015 | 1.4 | ||||||||||||||||||||||||||
Free cash flow (Non-GAAP) | $ | 12,850 | 10.6 | $ | (8,612 | ) | (5.7 | ) | $ | (2,135 | ) | (1.4 | ) | $ | 4,238 | 1.6 | $ | (11,409 | ) | (4.1 | ) | |||||||||||||||
Free cash flow as a percentage of Adjusted net income | 111 | % | (67 | )% | (25 | )% | 327 | % | (75 | )% |