- Net revenue of $95.3 million in Q1, GAAP gross margin of
51.7% and non-GAAP gross margin of 60.6%
MaxLinear, Inc. (Nasdaq: MXL), a leading provider of radio
frequency (RF), analog, digital and mixed-signal integrated
circuits, today announced financial results for the first quarter
ended March 31, 2024.
First Quarter Financial Highlights
GAAP basis:
- Net revenue was $95.3 million, down 24% sequentially and down
62% year-over-year.
- GAAP gross margin was 51.7%, compared to 54.7% in the prior
quarter, and 56.5% in the year-ago quarter.
- GAAP operating expenses were $123.9 million in the first
quarter 2024, or 130% of net revenue, compared to $110.3 million in
the prior quarter, or 88% of net revenue, and $113.0 million in the
year-ago quarter, or 45% of net revenue.
- GAAP loss from operations was 78% of net revenue, compared to
loss from operations of 33% of net revenue in the prior quarter,
and income from operations of 11% of net revenue in the year-ago
quarter.
- Net cash flow provided by operating activities was $16.0
million, compared to net cash flow used in operating activities of
$16.6 million in the prior quarter, and net cash flow provided by
operating activities of $42.2 million in the year-ago quarter.
- GAAP diluted loss per share was $0.88, compared to diluted loss
per share of $0.47 in the prior quarter, and diluted earnings per
share of $0.12 in the year-ago quarter.
Non-GAAP basis:
- Non-GAAP gross margin was 60.6%. This compares to 61.4% in the
prior quarter, and 60.3% in the year-ago quarter.
- Non-GAAP operating expenses were $74.8 million, or 78% of net
revenue, compared to $75.7 million or 60% of net revenue in the
prior quarter, and $80.8 million or 33% of net revenue in the
year-ago quarter.
- Non-GAAP loss from operations was 18% of net revenue, compared
to income of 1% in the prior quarter, and income of 28% in the
year-ago quarter.
- Non-GAAP diluted loss per share was $0.21, compared to earnings
of $0.01 in the prior quarter, and earnings of $0.74 in the
year-ago quarter.
Management Commentary
“It is both gratifying and exciting to see years of product
development and business execution begin to culminate in our next
stage of growth as a data infrastructure company. Across our
portfolio, we have the right solutions in production today to meet
high-value market trends and open up significant revenue growth
potential in optical datacenter and wireless network
infrastructure, enterprise ethernet and storage accelerators, Wi-Fi
connectivity, and fiber broadband access gateways. We believe our
revenue has bottomed and is now poised for sequential growth
throughout 2024. Additionally, we have continued to exercise strong
fiscal discipline which we expect to deliver positive cash flow and
favorable financial leverage as our growth from these investments
accelerates,” commented Kishore Seendripu, Ph.D., Chairman and
CEO.
Second Quarter 2024 Business Outlook
The company expects net revenue in the second quarter of 2024 to
be approximately $90 million to $110 million. The Company also
estimates the following:
- GAAP gross margin of approximately 52.5% to 56.5%;
- Non-GAAP gross margin of approximately 58.5% to 61.5%;
- GAAP operating expenses of approximately $103 million to $113
million;
- Non-GAAP operating expenses of approximately $72 million to $78
million;
- GAAP and non-GAAP interest and other expense of approximately
$0.5 million to $1 million each; and
- GAAP and non-GAAP diluted share count of approximately 83.5
million each.
Webcast and Conference Call
MaxLinear will host its first quarter financial results
conference call today, April 24, 2024 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 May 8,
2024. A replay of the conference call will also be available until
May 8, 2024 by dialing US toll free: 1-877-660-6853 /
International: 1-201-612-7415 and Conference ID#: 13745701.
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
our current guidance for second quarter 2024 net revenue, and GAAP
and non-GAAP amounts for each of the following: gross margins,
operating expenses, interest and other expenses, and diluted share
counts); our potential growth and revenue opportunities; market
trends; settlement of bonus awards for our 2024 performance period;
and statements by our Chairman and CEO. 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 and our future financial performance and
operating results forecasts generally. 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. Additional risks
and uncertainties affecting our business, future operating results
and financial condition include, without limitation; risks relating
to our terminated merger with Silicon Motion and related
arbitration and class action complaint and the risks related to
potential payment of damages; the effect of intense and increasing
competition; impacts of global economic conditions; the cyclical
nature of the semiconductor industry; a significant variance in our
operating results and impact on volatility in our stock price, and
our ability to sustain our current level of revenue, which has
declined, and/or manage future growth effectively, and the impact
of excess inventory in the channel on our customers’ expected
demand for certain of our products; the geopolitical and economic
tensions among the countries in which we conduct business;
increased tariffs, export controls or imposition of other trade
barriers; our ability to obtain or retain government authorization
to export certain of our products or technology; risks related to
the loss of, or a significant reduction in orders from major
customers; costs of legal proceedings; information technology
failures; a decrease in the average selling prices of our products;
substantial quarterly and annual fluctuations in our operating
results; failure to penetrate new applications and markets;
development delays and consolidation trends in our industry;
inability to make substantial research and development investments;
delays or expenses caused by undetected defects or bugs in our
products; failure to timely develop and introduce new or enhanced
products; order and shipment uncertainties; failure to accurately
predict our future revenue and appropriately budget expenses;
lengthy and expensive customer qualification processes; customer
product plan cancellations; failure to maintain compliance with
government regulations; failure to attract and retain qualified
personnel; any adverse impact of rising interest rates on us, our
customers, and our distributors and related demand; risks related
to compliance with privacy, data protection and cybersecurity laws
and regulations; risks related to conforming our products to
industry standards; risks related to business acquisitions and
investments; claims of intellectual property infringement; our
ability to protect our intellectual property; risks related to
security vulnerabilities of our products; use of open source
software in our products; and failure to manage our relationships
with, or negative impacts from, third parties.
In addition to these risks and uncertainties, investors should
review the risks and uncertainties contained in our filings with
the Securities and Exchange Commission (SEC), including our Current
Reports on Form 8-K, as well as the information to be set forth
under the caption "Risk Factors" in MaxLinear's Quarterly Report on
Form 10-Q for the three months ended March 31, 2024. All
forward-looking statements are based on the estimates, projections
and assumptions of management as of April 24, 2024, and MaxLinear
is under no obligation (and expressly disclaims any such
obligation) to update or revise any forward-looking statements
whether as a result of new information, future events, or
otherwise.
Use of Non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements
presented on a basis consistent with GAAP, we disclose certain
non-GAAP financial measures, including non-GAAP gross margin,
non-GAAP operating expenses, non-GAAP operating expenses as a
percentage of net revenue, non-GAAP income (loss) from operations
as percentage of revenue, non-GAAP interest and other expenses,
non-GAAP diluted earnings (loss) per share, and non-GAAP diluted
share count. These supplemental measures exclude the effects of (i)
stock-based compensation expense; (ii) accruals related to our
performance-based bonus plan for 2024, which we currently intend to
settle in shares of our common stock; (iii) accruals related to our
performance-based bonus plan for 2023, which we settled in shares
of common stock in February 2024; (iv) amortization of purchased
intangible assets; (v) research and development funded by others;
(vi) acquisition and integration costs related to our acquisitions,
including costs incurred related to the termination of the
previously pending (now terminated) merger with Silicon Motion;
(vii) impairment of intangible assets; (viii) severance and other
restructuring charges; (ix) other non-recurring interest and other
income (expenses), net attributable to acquisitions; and (x)
non-cash income tax benefits and expenses. Non-GAAP financial
measures are not meant to be considered in isolation or as a
substitute for the comparable GAAP financial measures. Non-GAAP
financial measures are subject to limitations, and should be read
only in conjunction with the company’s consolidated financial
statements prepared in accordance with GAAP. Non-GAAP financial
measures do not have any standardized meaning and are therefore
unlikely to be comparable to similarly titled measures presented by
other companies. We believe that these non-GAAP measures have
limitations in that they do not reflect all of the amounts
associated with our GAAP results of operations. We compensate for
the limitations of non-GAAP financial measures by relying upon GAAP
results to gain a complete picture of our performance.
We believe that non-GAAP financial measures can provide useful
information to both management and investors by excluding certain
non-cash and other one-time expenses that we believe are not
indicative of our core operating results. Among other uses, our
management uses non-GAAP measures to compare our performance
relative to forecasts and strategic plans and to benchmark our
performance externally against competitors. In addition,
management’s incentive compensation will be determined in part
using these non-GAAP measures because we believe non-GAAP measures
better reflect our core operating performance.
The following are explanations of each type of adjustment that
we incorporate into non-GAAP financial measures:
Stock-based compensation expense relates to equity incentive
awards granted to our employees, directors, and consultants. Our
equity incentive plans are important components of our employee
incentive compensation arrangements and are reflected as expenses
in our GAAP results. Stock-based compensation expense has been and
will continue to be a significant recurring expense for MaxLinear.
While we include the dilutive impact of equity awards in weighted
average shares outstanding, the expense associated with stock-based
awards reflects a non-cash charge that we exclude from non-GAAP net
income.
Performance-based equity consists of accruals related to our
executive and non-executive bonus programs, and have been excluded
from our non-GAAP net income for all periods reported. Bonus
payments for the 2023 performance periods were settled through the
issuance of shares of common stock under our equity incentive plans
in February 2024. We currently expect that bonus awards under our
fiscal 2024 program will be settled in common stock in the first
quarter of fiscal 2025.
Expenses incurred in relation to acquisitions include
amortization of purchased intangible assets, acquisition and
integration costs primarily consisting of professional and
consulting fees, including costs incurred related to the
termination of the previously pending (now terminated) merger with
Silicon Motion; ticking fees paid to lenders following the
termination of such merger which were recorded in other expense;
and accretion of discount on contingent consideration to interest
expense.
Research and development funded by others represents proceeds
received under contracts for jointly funded R&D projects to
develop technology that may be commercialized into a product in the
future. Initially such proceeds may not yet be recognized in GAAP
results if, pursuant to contract terms, the Company may be required
to repay all or a portion of the funds provided by the other party
under certain conditions. Management believes it is not probable
that it will trigger such conditions. Once such conditions have
been resolved, the proceeds are recognized in GAAP results, and
accordingly, reversed from non-GAAP results.
Impairment losses are related to abandonment of acquired or
purchased intangible assets.
Restructuring charges incurred are related to our restructuring
plans which eliminate redundancies and primarily include severance
and restructuring costs related to impairment of leased
right-of-use assets or from exiting certain facilities.
Income tax benefits and expense adjustments are those that do
not affect cash income taxes payable.
Reconciliations of non-GAAP measures for the historic periods
disclosed in this press release appear below. Because of the
inherent uncertainty associated with our ability to project future
charges, we are also unable to predict their probable significance,
particularly related to stock-based compensation and its related
tax effects as well as potential impairments, a quantitative
reconciliation is not available without unreasonable efforts and
accordingly, in reliance on the exception provided by Item
10(e)(1)(i)(B) of Regulation S-K, we have not provided a
reconciliation for non-GAAP guidance provided for the second
quarter 2024.
About MaxLinear, Inc.
MaxLinear, Inc. (Nasdaq:MXL) is a leading provider of radio
frequency (RF), analog, digital and mixed-signal integrated
circuits for access and connectivity, wired and wireless
infrastructure, and industrial and multi-market applications.
MaxLinear is headquartered in Carlsbad, California. For more
information, please visit www.maxlinear.com.
MXL is MaxLinear’s registered trademark. Other trademarks
appearing herein are the property of their respective owners.
MAXLINEAR, INC.
UNAUDITED GAAP CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
Three Months Ended
March 31, 2024
December 31, 2023
March 31, 2023
Net revenue
$
95,269
$
125,353
$
248,442
Cost of net revenue
46,001
56,814
108,135
Gross profit
49,268
68,539
140,307
Operating expenses:
Research and development
64,766
65,250
67,291
Selling, general and administrative
36,488
34,384
38,653
Impairment losses
—
—
2,438
Restructuring charges
22,630
10,648
4,648
Total operating expenses
123,884
110,282
113,030
Income (loss) from operations
(74,616
)
(41,743
)
27,277
Interest income
1,822
1,781
633
Interest expense
(2,711
)
(2,909
)
(2,487
)
Other income (expense), net
1,434
240
(324
)
Total other income (expense), net
545
(888
)
(2,178
)
Income (loss) before income taxes
(74,071
)
(42,631
)
25,099
Income tax provision (benefit)
(1,762
)
(4,131
)
15,566
Net income (loss)
$
(72,309
)
$
(38,500
)
$
9,533
Net income (loss) per share:
Basic
$
(0.88
)
$
(0.47
)
$
0.12
Diluted
$
(0.88
)
$
(0.47
)
$
0.12
Shares used to compute net income (loss)
per share:
Basic
82,349
81,681
79,471
Diluted
82,349
81,681
81,338
MAXLINEAR, INC.
UNAUDITED GAAP CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
March 31, 2024
December 31, 2023
March 31, 2023
Operating Activities
Net income (loss)
$
(72,309
)
$
(38,500
)
$
9,533
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Amortization and depreciation
16,684
16,593
19,202
Impairment losses
—
—
2,438
Amortization of debt issuance costs and
accretion of discount on debt and leases
688
703
548
Stock-based compensation
17,061
16,413
16,448
Deferred income taxes
(2,685
)
(10,954
)
8,128
Loss on disposal of property and
equipment
390
—
40
Gain on sale of investments
—
(434
)
—
Unrealized holding gain on investments
—
(2,152
)
(152
)
Impairment of leased right-of-use
assets
2,038
—
—
(Gain) loss on extinguishment of lease
liabilities
(569
)
—
—
(Gain) loss on foreign currency and
other
(968
)
2,335
362
Excess tax (benefits) deficiencies on
stock based awards
1,367
276
(507
)
Changes in operating assets and
liabilities:
Accounts receivable, net
44,389
(12,363
)
(16,931
)
Inventory
3,783
15,034
10,959
Prepaid expenses and other assets
(2,044
)
887
(4,338
)
Accounts payable, accrued expenses and
other current liabilities
9,275
(11,514
)
(886
)
Accrued compensation
8,707
932
7,210
Accrued price protection liability
(6,451
)
3,474
(9,877
)
Lease liabilities
(2,505
)
(2,780
)
(3,095
)
Other long-term liabilities
(881
)
5,477
3,077
Net cash provided by (used in) operating
activities
15,970
(16,573
)
42,159
Investing Activities
Purchases of property and equipment
(8,342
)
(1,274
)
(5,216
)
Purchases of intangible assets
(368
)
(157
)
(630
)
Cash used in acquisitions, net of cash
acquired
—
(940
)
(9,665
)
Sales of trading securities
—
17,198
—
Net cash provided by (used in) investing
activities
(8,710
)
14,827
(15,511
)
Financing Activities
Net proceeds from issuance of common
stock
—
1,391
3
Minimum tax withholding paid on behalf of
employees for restricted stock units
(2,103
)
(220
)
(6,173
)
Net cash provided by (used in) financing
activities
(2,103
)
1,171
(6,170
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(583
)
779
1
Increase in cash, cash equivalents and
restricted cash
4,574
204
20,479
Cash, cash equivalents and restricted cash
at beginning of period
188,356
188,152
188,357
Cash, cash equivalents and restricted cash
at end of period
$
192,930
$
188,356
$
208,836
MAXLINEAR, INC.
UNAUDITED GAAP CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, 2024
December 31, 2023
March 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
191,882
$
187,288
$
207,850
Short-term restricted cash
1,028
1,051
964
Short-term investments
—
—
18,681
Accounts receivable, net
126,230
170,619
188,733
Inventory
96,125
99,908
149,585
Prepaid expenses and other current
assets
29,414
29,159
27,773
Total current assets
444,679
488,025
593,586
Long-term restricted cash
20
17
22
Property and equipment, net
68,338
66,431
77,691
Leased right-of-use assets
27,468
31,264
26,357
Intangible assets, net
64,939
73,630
96,352
Goodwill
318,588
318,588
318,910
Deferred tax assets
72,176
69,493
57,515
Other long-term assets
34,417
32,809
28,045
Total assets
$
1,030,625
$
1,080,257
$
1,198,478
Liabilities and stockholders’
equity
Current liabilities
$
223,854
$
222,129
$
300,162
Long-term lease liabilities
23,897
26,243
21,239
Long-term debt
122,529
122,375
121,910
Other long-term liabilities
22,362
23,245
21,055
Stockholders’ equity
637,983
686,265
734,112
Total liabilities and stockholders’
equity
$
1,030,625
$
1,080,257
$
1,198,478
MAXLINEAR, INC.
UNAUDITED RECONCILIATION OF
NON-GAAP ADJUSTMENTS
(in thousands, except per
share data)
Three Months Ended
March 31, 2024
December 31, 2023
March 31, 2023
GAAP gross profit
$
49,268
$
68,539
$
140,307
Stock-based compensation
181
137
210
Performance based equity
72
17
91
Amortization of purchased intangible
assets
8,221
8,332
9,321
Non-GAAP gross profit
57,742
77,025
149,929
GAAP R&D expenses
64,766
65,250
67,291
Stock-based compensation
(10,441
)
(11,061
)
(11,455
)
Performance based equity
(4,929
)
(1,918
)
(3,635
)
Research and development funded by
others
(1,000
)
(2,000
)
(1,000
)
Non-GAAP R&D expenses
48,396
50,271
51,201
GAAP SG&A expenses
36,488
34,384
38,653
Stock-based compensation
(6,439
)
(5,215
)
(4,784
)
Performance based equity
(2,427
)
(1,324
)
(1,744
)
Amortization of purchased intangible
assets
(591
)
(591
)
(928
)
Acquisition and integration costs
(664
)
(1,799
)
(1,601
)
Non-GAAP SG&A expenses
26,367
25,455
29,596
GAAP impairment losses
—
—
2,438
Impairment losses
—
—
(2,438
)
Non-GAAP impairment losses
—
—
—
GAAP restructuring expenses
22,630
10,648
4,648
Restructuring charges
(22,630
)
(10,648
)
(4,648
)
Non-GAAP restructuring expenses
—
—
—
GAAP income (loss) from operations
(74,616
)
(41,743
)
27,277
Total non-GAAP adjustments
57,595
43,042
41,855
Non-GAAP income (loss) from operations
(17,021
)
1,299
69,132
GAAP interest and other income (expense),
net
545
(888
)
(2,178
)
Non-recurring interest and other income
(expense), net
73
54
111
Non-GAAP interest and other income
(expense), net
618
(834
)
(2,067
)
GAAP income (loss) before income taxes
(74,071
)
(42,631
)
25,099
Total non-GAAP adjustments
57,668
43,096
41,966
Non-GAAP income (loss) before income
taxes
(16,403
)
465
67,065
GAAP income tax provision (benefit)
(1,762
)
(4,131
)
15,566
Adjustment for non-cash tax
benefits/expenses
2,762
4,177
(8,859
)
Non-GAAP income tax provision
1,000
46
6,707
GAAP net income (loss)
(72,309
)
(38,500
)
9,533
Total non-GAAP adjustments before income
taxes
57,668
43,096
41,966
Less: total tax adjustments
2,762
4,177
(8,859
)
Non-GAAP net income (loss)
$
(17,403
)
$
419
$
60,358
Shares used in computing non-GAAP basic
net income per share
82,349
81,681
79,471
Shares used in computing non-GAAP diluted
net income per share
82,349
82,681
81,338
Non-GAAP basic net income (loss) per
share
$
(0.21
)
$
0.01
$
0.76
Non-GAAP diluted net income (loss) per
share
$
(0.21
)
$
0.01
$
0.74
MAXLINEAR, INC.
UNAUDITED RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES AS A PERCENTAGE OF NET
REVENUE
Three Months Ended
March 31, 2024
December 31, 2023
March 31, 2023
GAAP gross margin
51.7
%
54.7
%
56.5
%
Stock-based compensation
0.2
%
0.1
%
0.1
%
Performance based equity
0.1
%
—
%
—
%
Amortization of purchased intangible
assets
8.6
%
6.7
%
3.8
%
Non-GAAP gross margin
60.6
%
61.4
%
60.3
%
GAAP R&D expenses
68.0
%
52.1
%
27.1
%
Stock-based compensation
(11.0
)%
(8.8
)%
(4.6
)%
Performance based equity
(5.2
)%
(1.5
)%
(1.5
)%
Research and development funded by
others
(1.1
)%
(1.6
)%
(0.4
)%
Non-GAAP R&D expenses
50.8
%
40.1
%
20.6
%
GAAP SG&A expenses
38.3
%
27.4
%
15.6
%
Stock-based compensation
(6.8
)%
(4.2
)%
(1.9
)%
Performance based equity
(2.6
)%
(1.1
)%
(0.7
)%
Amortization of purchased intangible
assets
(0.6
)%
(0.5
)%
(0.4
)%
Acquisition and integration costs
(0.7
)%
(1.4
)%
(0.6
)%
Non-GAAP SG&A expenses
27.7
%
20.3
%
11.9
%
GAAP impairment losses
—
%
—
%
1.0
%
Impairment losses
—
%
—
%
(1.0
)%
Non-GAAP impairment losses
—
%
—
%
—
%
GAAP restructuring expenses
23.8
%
8.5
%
1.9
%
Restructuring charges
(23.8
)%
(8.5
)%
(1.9
)%
Non-GAAP restructuring expenses
—
%
—
%
—
%
GAAP income (loss) from operations
(78.3
)%
(33.3
)%
11.0
%
Total non-GAAP adjustments
60.5
%
34.3
%
16.9
%
Non-GAAP income (loss) from operations
(17.9
)%
1.0
%
27.7
%
GAAP interest and other income (expense),
net
0.6
%
(0.7
)%
(0.9
)%
Non-recurring interest and other income
(expense), net
0.1
%
—
%
—
%
Non-GAAP interest and other income
(expense), net
0.7
%
(0.7
)%
(0.8
)%
GAAP income (loss) before income taxes
(77.8
)%
(34.0
)%
10.1
%
Total non-GAAP adjustments before income
taxes
60.5
%
34.4
%
16.9
%
Non-GAAP income (loss) before income
taxes
(17.2
)%
0.4
%
27.0
%
GAAP income tax provision (benefit)
(1.9
)%
(3.3
)%
6.3
%
Adjustment for non-cash tax
benefits/expenses
2.9
%
3.3
%
(3.6
)%
Non-GAAP income tax provision
1.1
%
—
%
2.7
%
GAAP net income (loss)
(75.9
)%
(30.7
)%
3.8
%
Total non-GAAP adjustments before income
taxes
60.5
%
34.4
%
16.9
%
Less: total tax adjustments
2.9
%
3.3
%
(3.6
)%
Non-GAAP net income (loss)
(18.3
)%
0.3
%
24.3
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240424774372/en/
MaxLinear, Inc. Investor Relations Contact: Leslie Green
Tel: +1 650-312-9060 lgreen@maxlinear.com
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