Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MaxLinear Inc (MXL, Financial) reported Q3 revenue of $81.1 million, slightly above the midpoint of their guidance.
- The company has seen meaningful improvements in customer order rates and lead times, indicating early signs of recovery.
- MaxLinear Inc (MXL) received the Best Emerging Supplier of the Year award from Cisco, highlighting strong industry recognition.
- The company is experiencing strong demand for its optical transceiver products, with a run rate exceeding 1 million units per year.
- MaxLinear Inc (MXL) is well-positioned for growth in high-value markets such as optical data center interconnect, enterprise Ethernet, and storage accelerators.
Negative Points
- Total revenue for the third quarter was down 12% from the previous quarter, indicating a decline in overall sales.
- Broadband revenue is expected to be slightly down in Q4, reflecting ongoing challenges in this segment.
- The company reported a GAAP operating loss, highlighting financial challenges despite revenue improvements.
- MaxLinear Inc (MXL) faced a significant impact from acquisition-related intangible asset amortization, affecting gross margins.
- The company is still experiencing delays in the adoption of certain technologies, such as DOCSIS 4.0, impacting revenue growth in broadband.
Q & A Highlights
Q: Can you elaborate on the 1 million optical transceiver comment and the mix between 400 and 800 gigabit units?
A: Steven Litchfield, CFO, explained that the 1 million unit run rate is primarily driven by optical transceiver revenues related to both 800 gigabit and 400 gigabit, with 800 gigabit being the larger fraction. They expect to exceed this run rate in 2025, having already surpassed their initial revenue expectations for the year.
Q: What is the outlook for the broadband business, considering inventory levels and DOCSIS 4.0 delays?
A: Steven Litchfield noted that while broadband is expected to grow in 2025, the current order rates are picking up. The DOCSIS 4.0 is still in pilot quantities, and the recovery will be dominated by DOCSIS 3.0 and 3.1. They anticipate a steady recovery as the market picks up towards the end of next year.
Q: Can you provide more details on the expected growth in infrastructure, connectivity, and industrial multi-market segments for Q4?
A: Steven Litchfield mentioned improved demand across the board, particularly in optical as 800 gig adoption starts. They also see moderate recovery in connectivity and industrial multi-market, with China and industrial markets showing signs of improvement.
Q: Are bookings now above a 1:1 book-to-bill ratio, and how does this affect future quarters?
A: Steven Litchfield confirmed a significant uptick in bookings, with backlog building nicely for Q4 and Q1. Sell-through has been strong, indicating a positive trend that should align sell-in and sell-through dynamics in the coming quarters.
Q: How is the optical business progressing, and what is the outlook for infrastructure excluding optical?
A: Steven Litchfield acknowledged that while optical is performing well, wireless infrastructure remains a drag due to reduced telecom spending. However, they expect a 30% increase in infrastructure business next year as telecom spending recovers and inventory levels normalize.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
