MaxLinear, Inc. Announces Second Quarter 2022 Financial Results

Rhea-AI Summary

MaxLinear, Inc. (Nasdaq: MXL) reported record net revenue of $280.0 million for Q2 2022, reflecting a 6% sequential and 36% year-over-year increase. The GAAP gross margin was 58.7%, slightly up from the previous quarter, while non-GAAP gross margin stood at 62.3%. Operating expenses rose to $125.3 million, or 45% of net revenue. GAAP diluted EPS was $0.40, a decrease from $0.42 in Q1 2022. The company anticipates Q3 revenue between $280 million to $290 million with a gross margin of 57.5% to 60.5%.

Positive

• Record net revenue of $280.0 million, up 36% year-over-year.
• Strong cash flow from operations of $123.4 million.
• Connectivity category revenue up nearly 80% year-over-year.
• Expecting Wi-Fi revenue of at least $200 million in 2023.
• Pending merger with Silicon Motion anticipated to enhance growth.

Negative

• GAAP operating expenses increased to $125.3 million, up from $106.5 million in Q1.
• GAAP diluted EPS dropped to $0.40 from $0.42 in Q1.

• Record net revenue of $280.0 million, up 6% sequentially and up 36% year-over-year
• GAAP gross margin 58.7% and non-GAAP gross margin 62.3%, up 10 bps and -50 bps from previous quarter, respectively

CARLSBAD, Calif.--(BUSINESS WIRE)-- MaxLinear, Inc. (Nasdaq: MXL), a leading provider of RF, analog, digital and mixed-signal integrated circuits, today announced financial results for the second quarter ended June 30, 2022.

Second Quarter Financial Highlights

GAAP basis:

• Net revenue was $280.0 million, up 6% sequentially and up 36% year-over-year.
• GAAP gross margin was 58.7%, compared to 58.6% in the prior quarter, and 54.8% in the year-ago quarter.
• GAAP operating expenses were $125.3 million in the second quarter 2022, or 45% of net revenue, compared to $106.5 million in the prior quarter, or 40% of net revenue, and $110.3 million in the year-ago quarter, or 54% of net revenue.
• GAAP income from operations was 14% of revenue, compared to income from operations of 18% in the prior quarter, and income from operations of 1% in the year-ago quarter.
• Net cash flow provided by operating activities was $123.4 million, compared to net cash flow provided by operating activities of $134.2 million in the prior quarter, and net cash flow provided by operating activities of $7.9 million in the year-ago quarter.
• GAAP diluted earnings per share was $0.40, compared to diluted earnings per share of $0.42 in the prior quarter, and diluted earnings per share of $0.01 in the year-ago quarter.

Non-GAAP basis:

• Non-GAAP gross margin was 62.3%. This compares to 62.8% in the prior quarter, and 60.2% in the year-ago quarter.
• Non-GAAP operating expenses were $84.3 million, or 30% of revenue, compared to $77.3 million or 29% of revenue in the prior quarter, and $75.2 million or 37% of revenue in the year-ago quarter.
• Non-GAAP income from operations was 32% of revenue, compared to 33% in the prior quarter, and 24% in the year-ago quarter.
• Non-GAAP diluted earnings per share was $1.11, compared to diluted earnings per share of $1.00 in the prior quarter, and diluted earnings per share of $0.53 in the year-ago quarter.

Management Commentary

“In the second quarter, revenue was up 6% sequentially and up 36% year-over-year, as a result of strong demand across all our product portfolio. In particular, fiber gateway access, Wi-Fi, and wireless infrastructure continue to drive solid revenue expansion. Our connectivity category was up nearly 80% year-over-year, driven by our differentiated Wi-Fi6 feature set, and we are on a firm trajectory to deliver at least $200 million of Wi-Fi revenue in 2023. We saw strong cash flow from operations of approximately $123.4 million in Q2 and non-GAAP gross margin of 62.3%. We are excited about our pending merger with Silicon Motion, the future growth opportunities of our comprehensive product portfolio, and the accelerating pace of new product launches,” commented Kishore Seendripu, Ph.D., Chairman and CEO.

Third Quarter 2022 Business Outlook

The company expects revenue in the third quarter 2022 to be approximately $280 million to $290 million. The Company also estimates the following:

• GAAP gross margin of approximately 57.5% to 60.5%;
• Non-GAAP gross margin of approximately 60.5% to 63.5%;
• GAAP operating expenses of approximately $115 million to $121 million;
• Non-GAAP operating expenses of approximately $81 million to $87 million; and
• GAAP and non-GAAP interest and other expense of approximately $3.5 million.

Webcast and Conference Call

MaxLinear will host its second quarter financial results conference call today, July 27, 2022 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 August 11, 2022. A replay of the conference call will also be available until August 11, 2022 by dialing US toll free: 1-877-660-6853 / International: 1-201-612-7415 and Conference ID#: 13731843.

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 third quarter 2022 revenue, gross margins, operating expenses, and interest and other expenses, as well as statements with respect to confidence in the Company’s outlook for third quarter 2022) and statements concerning expectations of potential developments in our target markets, including (without limitation) management’s views with respect to the prospects for and trends in our broadband, connectivity and infrastructure markets, and in particular, expectations concerning the development of our Wi-Fi market, including the Company’s ability to continue to increase market share and drive future growth opportunities in such market. 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. 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. Additional risks and uncertainties affecting our business, future operating results and financial condition include, without limitation, risks relating to our proposed merger with Silicon Motion; intense competition in our industry; increasing supply chain risks within our industry, including increases in shipping and material costs and substantial shipping delays resulting in extended lead-times; inflation trends in our supply chain and in the global economy generally; uncertainties concerning the outcome of global trade negotiations, export control limitations, and heightened geopolitical risks generally; our dependence on a limited number of customers for a substantial portion of our revenues; potential decreases in average selling prices for our products; 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; 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; uncertainties concerning how end user markets for our products will develop, including in particular markets we have entered more recently such as broadband, Wi-Fi and 5G wireless and fiber-optic data center high-speed interconnect infrastructure markets but also existing markets; the impact of our 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, granting liens, undergoing certain fundamental changes, or making investments or certain restricted payments, and selling assets; 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; the impact of the COVID-19 pandemic; and our lack of long-term supply contracts and dependence on limited sources of supply.

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 Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 2, 2022, and 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 quarter ended June 30, 2022. All forward-looking statements are based on the estimates, projections and assumptions of management as of July 27, 2022, 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, operating expenses, operating expenses as a percentage of revenue, income from operations as percentage of revenue, and diluted earnings per share. These supplemental measures exclude the effects of (i) stock-based compensation expense; (ii) accruals related to our performance based bonus plan for 2022, which we currently intend to settle in shares of our common stock; (iii) accruals related to our performance-based bonus plan for 2021, which we settled in shares of common stock in 2022; (iv) amortization of purchased intangible assets; (v) research and development funded by others; (vi) acquisition and integration costs related to our acquisitions; (vii) professional fees and settlement costs related to IP and commercial litigation matters; (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. These non-GAAP measures are not in accordance with and do not serve as an alternative for GAAP. 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. These non-GAAP measures should only be viewed in conjunction with corresponding GAAP measures. 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 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.

Bonuses under our executive and non-executive bonus programs have been excluded from our non-GAAP net income for all periods reported. Bonus payments for the 2021 performance periods were settled through the issuance of shares of common stock under our equity incentive plans in February 2022. We currently expect that bonus awards under our fiscal 2022 program will be settled in common stock in the first quarter of fiscal 2023.

Expenses incurred in relation to acquisitions include amortization of purchased intangible assets, acquisition and integration costs primarily consisting of professional and consulting fees, and accretion of discount on deferred purchase price payments 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.

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.

Expenses incurred in relation to our intellectual property and commercial litigation include professional fees incurred.

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, 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 we have not provided a reconciliation for non-GAAP guidance provided for the third quarter 2022.

Additional Information and Where to Find It

This press release makes reference to a proposed business combination involving MaxLinear and Silicon Motion. In connection with the proposed transaction, MaxLinear has filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 (File No. 333-265645), including a proxy statement of Silicon Motion and a prospectus of MaxLinear. The Registration Statement on Form S-4 was declared effective by the SEC on July 13, 2022 and the proxy statement/prospectus was first mailed to the shareholders of Silicon Motion on July 20, 2022, seeking their approval of their transaction-related proposals.

This press release does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities or a solicitation of any vote or approval nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

MAXLINEAR AND SILICON MOTION URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4, WHICH WILL BE PROVIDED TO SILICON MOTION SECURITY HOLDERS AND OTHER DOCUMENTS PROVIDED TO SILICON MOTION SECURITY HOLDERS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders are able to obtain the Registration Statement on Form S-4 free of charge at the SEC’s website, www.sec.gov. Copies of documents filed with the SEC by MaxLinear (when they become available) may be obtained free of charge on MaxLinear’s website at www.maxlinear.com or by contacting MaxLinear’s Investor Relations Department at IR@MaxLinear.com. Copies of documents filed or furnished by Silicon Motion (when they become available) may be obtained free of charge on Silicon Motion’s website at https://www.siliconmotion.com or by contacting Silicon Motion’s Stock Affair Specialist.

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 INCOME (in thousands, except per share data)
	Three Months Ended
	June 30, 2022				March 31, 2022				June 30, 2021
Net revenue	$	280,009			$	263,927			$	205,376
Cost of net revenue		115,658				109,337				92,833
Gross profit		164,351				154,590				112,543
Operating expenses:
Research and development		80,395				65,886				74,416
Selling, general and administrative		44,487				40,577				35,885
Restructuring charges		462				—				38
Total operating expenses		125,344				106,463				110,339
Income from operations		39,007				48,127				2,204
Interest income		82				31				18
Interest expense		(2,416	)			(2,349	)			(3,741	)
Loss on extinguishment of debt		—				—				(5,221	)
Other income (expense), net		7,179				(770	)			(537	)
Total other income (expense), net		4,845				(3,088	)			(9,481	)
Income (loss) before income taxes		43,852				45,039				(7,277	)
Income tax provision (benefit)		11,886				11,453				(8,010	)
Net income	$	31,966			$	33,586			$	733
Net income per share:
Basic	$	0.41			$	0.44			$	0.01
Diluted	$	0.40			$	0.42			$	0.01
Shares used to compute net income per share:
Basic		77,858				77,192				75,930
Diluted		80,279				80,641				79,026

MAXLINEAR, INC. UNAUDITED GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)
		Six Months Ended
		June 30, 2022				June 30, 2021
Net revenue		$	543,936			$	414,735
Cost of net revenue			224,995				190,473
Gross profit			318,941				224,262
Operating expenses:
Research and development			146,281				137,582
Selling, general and administrative			85,064				72,354
Restructuring charges			462				2,204
Total operating expenses			231,807				212,140
Income from operations			87,134				12,122
Interest income			113				18
Interest expense			(4,765	)			(7,947	)
Loss on extinguishment of debt			—				(5,221	)
Other income (expense), net			6,409				(641	)
Total other income (expense), net			1,757				(13,791	)
Income (loss) before income taxes			88,891				(1,669	)
Income tax provision (benefit)			23,339				(6,204	)
Net income		$	65,552			$	4,535
Net income per share:
Basic		$	0.85			$	0.06
Diluted		$	0.81			$	0.06
Shares used to compute net income per share:
Basic			77,527				75,394
Diluted			80,462				78,657

MAXLINEAR, INC. UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
	Three Months Ended
	June 30, 2022				March 31, 2022				June 30, 2021
Operating Activities
Net income	$	31,966			$	33,586			$	733
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation		19,569				23,880				21,997
Amortization of debt issuance costs and accretion of discount on debt and leases		471				486				918
Stock-based compensation		19,469				18,554				13,966
Deferred income taxes		517				6,842				(6,002	)
Loss on disposal of property and equipment		5				159				20
Unrealized holding (gain) loss on investments		(4,813	)			954				—
Impairment of leased right-of-use assets		462				—				—
Loss on extinguishment of debt		—				—				5,221
(Gain) loss on foreign currency and other		(2,359	)			(316	)			387
Excess tax benefits on stock based awards		(2,309	)			(7,120	)			(2,822	)
Changes in operating assets and liabilities:
Accounts receivable		(11,000	)			(5,969	)			(47,800	)
Inventory		(7,390	)			(7,338	)			(6,254	)
Prepaid expenses and other assets		(1,675	)			3,503				3,588
Leased right-of-use assets		—				—				36
Accounts payable, accrued expenses and other current liabilities		29,669				32,952				8,652
Accrued compensation		9,118				12,237				13,857
Accrued price protection liability		42,822				27,975				(344	)
Lease liabilities		(2,210	)			(3,301	)			(2,345	)
Other long-term liabilities		1,125				(2,918	)			4,043
Net cash provided by operating activities		123,437				134,166				7,851
Investing Activities
Purchases of property and equipment		(10,706	)			(4,800	)			(11,158	)
Purchases of intangible assets		(567	)			(4,637	)			—
Cash used in acquisitions, net of cash acquired		—				—				(7,500	)
Proceeds loaned under notes receivable		—				(10,000	)			—
Purchases of investments		(5,000	)			(23,325	)			—
Net cash used in investing activities		(16,273	)			(42,762	)			(18,658	)
Financing Activities
Proceeds from the issuance of debt		—				—				350,000
Payment of debt issuance cost		—				—				(4,127	)
Repayment of debt		(40,000	)			(20,000	)			(349,813	)
Net proceeds from issuance of common stock		3,046				87				4,796
Minimum tax withholding paid on behalf of employees for restricted stock units		(3,698	)			(24,449	)			(2,663	)
Repurchase of common stock		(5,214	)			(26,297	)			(4,464	)
Net cash used in financing activities		(45,866	)			(70,659	)			(6,271	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(1,132	)			(230	)			(681	)
Increase (decrease) in cash, cash equivalents and restricted cash		60,166				20,515				(17,759	)
Cash, cash equivalents and restricted cash at beginning of period		152,253				131,738				149,193
Cash, cash equivalents and restricted cash at end of period	$	212,419			$	152,253			$	131,434

MAXLINEAR, INC. UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
		Six Months Ended
		June 30, 2022				June 30, 2021
Operating Activities
Net income		$	65,552			$	4,535
Adjustments to reconcile net income to cash provided by operating activities:
Amortization and depreciation			43,449				44,322
Amortization of debt issuance costs and accretion of discount on debt and leases			957				2,071
Stock-based compensation			38,023				26,921
Deferred income taxes			7,359				(5,461	)
Loss on disposal of property and equipment			164				388
Unrealized holding gain on investments			(3,859	)			—
Impairment of leasehold improvements			—				226
Impairment of leased right-of-use assets			462				429
Loss on extinguishment of debt			—				5,221
(Gain) loss on foreign currency			(2,675	)			408
Excess tax benefits on stock-based awards			(9,429	)			(4,631	)
Changes in operating assets and liabilities:
Accounts receivable			(16,969	)			(67,879	)
Inventory			(14,728	)			(596	)
Prepaid expenses and other assets			1,828				33,448
Leased right-of-use assets			—				72
Accounts payable, accrued expenses and other current liabilities			62,621				6,311
Accrued compensation			21,355				15,233
Accrued price protection liability			70,797				6,955
Lease liabilities			(5,511	)			(4,347	)
Other long-term liabilities			(1,793	)			4,497
Net cash provided by operating activities			257,603				68,123
Investing Activities
Purchases of property and equipment			(15,506	)			(17,310	)
Purchases of intangible assets			(5,204	)			(1,112	)
Cash used in acquisitions, net of cash acquired			—				(27,500	)
Proceeds loaned under notes receivable			(10,000	)			—
Purchases of investments			(28,325	)			(5,000	)
Net cash used in investing activities			(59,035	)			(50,922	)
Financing Activities
Proceeds from the issuance of debt			—				350,000
Payment of debt issuance cost			—				(4,127	)
Repayment of debt			(60,000	)			(369,813	)
Net proceeds from issuance of common stock			3,133				6,094
Minimum tax withholding paid on behalf of employees for restricted stock units			(28,147	)			(10,105	)
Repurchase of common stock			(31,511	)			(7,137	)
Net cash used in financing activities			(116,525	)			(35,088	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(1,362	)			(713	)
Increase (decrease) in cash, cash equivalents and restricted cash			80,681				(18,600	)
Cash, cash equivalents and restricted cash at beginning of period			131,738				150,034
Cash, cash equivalents and restricted cash at end of period		$	212,419			$	131,434

MAXLINEAR, INC. UNAUDITED GAAP CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
	June 30, 2022			March 31, 2022			June 30, 2021
Assets
Current assets:
Cash and cash equivalents	$	211,363		$	151,111		$	130,312
Short-term restricted cash		162			105			107
Short-term investments		23,864			19,051			—
Accounts receivable, net		137,065			125,693			135,321
Inventory		146,431			139,041			98,502
Prepaid expenses and other current assets		19,739			19,575			13,866
Total current assets		538,624			454,576			378,108
Long-term restricted cash		894			1,037			1,015
Property and equipment, net		64,136			60,022			48,104
Leased right-of-use assets		33,154			32,919			22,847
Intangible assets, net		127,928			140,153			174,964
Goodwill		306,739			306,713			302,828
Deferred tax assets		81,762			82,326			91,526
Other long-term assets		27,456			21,381			7,235
Total assets	$	1,180,693		$	1,099,127		$	1,026,627
Liabilities and stockholders’ equity
Current liabilities	$	316,081		$	234,795		$	211,789
Long-term lease liabilities		27,838			30,208			20,445
Long-term debt		246,450			286,298			343,022
Other long-term liabilities		20,727			19,980			17,704
Stockholders’ equity		569,597			527,846			433,667
Total liabilities and stockholders’ equity	$	1,180,693		$	1,099,127		$	1,026,627

MAXLINEAR, INC. UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS (in thousands, except per share data)
	Three Months Ended
	June 30, 2022				March 31, 2022				June 30, 2021
GAAP gross profit	$	164,351			$	154,590			$	112,543
Stock-based compensation		162				163				148
Performance based equity		146				112				127
Amortization of purchased intangible assets		9,820				10,811				10,743
Non-GAAP gross profit		174,479				165,676				123,561
GAAP R&D expenses		80,395				65,886				74,416
Stock-based compensation		(9,983	)			(9,676	)			(7,268	)
Performance based equity		(7,231	)			(5,337	)			(8,249	)
Research and development funded by others		(2,000	)			2,800				(3,800	)
Acquisition and integration costs		—				—				(38	)
Non-GAAP R&D expenses		61,181				53,673				55,061
GAAP SG&A expenses		44,487				40,577				35,885
Stock-based compensation		(9,324	)			(8,715	)			(6,551	)
Performance based equity		(2,708	)			(2,068	)			(3,357	)
Amortization of purchased intangible assets		(2,926	)			(6,176	)			(5,816	)
Acquisition and integration costs		(6,369	)			5				(25	)
Non-GAAP SG&A expenses		23,160				23,623				20,136
GAAP restructuring expenses		462				—				38
Restructuring charges		(462	)			—				(38	)
Non-GAAP restructuring expenses		—				—				—
GAAP income from operations		39,007				48,127				2,204
Total non-GAAP adjustments		51,131				40,253				46,160
Non-GAAP income from operations		90,138				88,380				48,364
GAAP loss on extinguishment of debt		—				—				(5,221	)
Loss on extinguishment of debt		—				—				5,221
Non-GAAP loss on extinguishment of debt		—				—				—
GAAP interest and other income (expense), net		4,845				(3,088	)			(4,260	)
Non-recurring interest and other income (expense), net		56				68				133
Non-GAAP interest and other income (expense), net		4,901				(3,020	)			(4,127	)
GAAP income (loss) before income taxes		43,852				45,039				(7,277	)
Total non-GAAP adjustments		51,187				40,321				51,514
Non-GAAP income before income taxes		95,039				85,360				44,237
GAAP income tax provision (benefit)		11,886				11,453				(8,010	)
Adjustment for non-cash tax benefits/expenses		(6,184	)			(6,331	)			10,665
Non-GAAP income tax provision		5,702				5,122				2,655
GAAP net income		31,966				33,586				733
Total non-GAAP adjustments before income taxes		51,187				40,321				51,514
Less: total tax adjustments		(6,184	)			(6,331	)			10,665
Non-GAAP net income	$	89,337			$	80,238			$	41,582
Shares used in computing non-GAAP basic net income per share		77,858				77,192				75,930
Shares used in computing non-GAAP diluted net income per share		80,279				80,641				79,026
Non-GAAP basic net income per share	$	1.15			$	1.04			$	0.55
Non-GAAP diluted net income per share	$	1.11			$	1.00			$	0.53

MAXLINEAR, INC. UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS (in thousands, except per share data)
		Six Months Ended
		June 30, 2022				June 30, 2021
GAAP gross profit		$	318,941			$	224,262
Stock-based compensation			325				317
Performance based equity			258				209
Amortization of purchased intangible assets			20,631				21,490
Non-GAAP gross profit			340,155				246,278
GAAP R&D expenses			146,281				137,582
Stock-based compensation			(19,659	)			(14,430	)
Performance based equity			(12,568	)			(12,847	)
Research and development funded by others			800				(3,800	)
Acquisition and integration costs			—				(130	)
Non-GAAP R&D expenses			114,854				106,375
GAAP SG&A expenses			85,064				72,354
Stock-based compensation			(18,039	)			(12,175	)
Performance based equity			(4,776	)			(5,247	)
Amortization of purchased intangible assets			(9,102	)			(11,886	)
Acquisition and integration costs			(6,364	)			(1,586	)
IP litigation costs, net			—				(11	)
Non-GAAP SG&A expenses			46,783				41,449
GAAP restructuring expenses			462				2,204
Restructuring charges			(462	)			(2,204	)
Non-GAAP restructuring expenses			—				—
GAAP income from operations			87,134				12,122
Total non-GAAP adjustments			91,384				86,332
Non-GAAP income from operations			178,518				98,454
GAAP income (loss) on extinguishment of debt			—				(5,221	)
Loss on extinguishment of debt			—				5,221
Non-GAAP loss on extinguishment of debt			—				—
GAAP interest and other income (expense), net			1,757				(8,570	)
Non-recurring interest and other income (expense), net			124				443
Non-GAAP interest and other income (expense), net			1,881				(8,127	)
GAAP income (loss) before income taxes			88,891				(1,669	)
Total non-GAAP adjustments			91,508				91,996
Non-GAAP income before income taxes			180,399				90,327
GAAP income tax provision (benefit)			23,339				(6,204	)
Adjustment for non-cash tax benefits/expenses			(12,515	)			11,624
Non-GAAP income tax provision			10,824				5,420
GAAP net income			65,552				4,535
Total non-GAAP adjustments before income taxes			91,508				91,996
Less: total tax adjustments			(12,515	)			11,624
Non-GAAP net income		$	169,575			$	84,907
Shares used in computing non-GAAP basic net income per share			77,527				75,394
Shares used in computing non-GAAP diluted net income per share			80,462				78,657
Non-GAAP basic net income per share		$	2.19			$	1.13
Non-GAAP diluted net income per share		$	2.11			$	1.08

MAXLINEAR, INC. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
	Three Months Ended
	June 30, 2022			March 31, 2022			June 30, 2021
GAAP gross profit	58.7	%		58.6	%		54.8	%
Stock-based compensation	0.1	%		0.1	%		0.1	%
Performance based equity	0.1	%		—	%		0.1	%
Amortization of purchased intangible assets	3.5	%		4.1	%		5.2	%
Non-GAAP gross profit	62.3	%		62.8	%		60.2	%
GAAP R&D expenses	28.7	%		25.0	%		36.2	%
Stock-based compensation	(3.6	) %		(3.7	) %		(3.5	) %
Performance based equity	(2.6	) %		(2.0	) %		(4.0	) %
Research and development funded by others	(0.7	) %		1.1	%		(1.9	) %
Acquisition and integration costs	—	%		—	%		—	%
Non-GAAP R&D expenses	21.9	%		20.3	%		26.8	%
GAAP SG&A expenses	15.9	%		15.4	%		17.5	%
Stock-based compensation	(3.3	) %		(3.3	) %		(3.2	) %
Performance based equity	(1.0	) %		(0.8	) %		(1.6	) %
Amortization of purchased intangible assets	(1.0	) %		(2.3	) %		(2.8	) %
Acquisition and integration costs	(2.3	) %		—	%		—	%
Non-GAAP SG&A expenses	8.3	%		9.0	%		9.8	%
GAAP restructuring expenses	0.2	%		—	%		—	%
Restructuring charges	(0.2	) %		—	%		—	%
Non-GAAP restructuring expenses	—	%		—	%		—	%
GAAP income from operations	13.9	%		18.2	%		1.1	%
Total non-GAAP adjustments	18.3	%		15.3	%		22.5	%
Non-GAAP income from operations	32.2	%		33.5	%		23.6	%
GAAP loss on extinguishment of debt	—	%		—	%		(2.5	) %
Loss on extinguishment of debt	—	%		—	%		2.5	%
Non-GAAP loss on extinguishment of debt	—	%		—	%		—	%
GAAP interest and other income (expense), net	1.7	%		(1.2	) %		(2.1	) %
Non-recurring interest and other income (expense), net	—	%		—	%		0.1	%
Non-GAAP interest and other income (expense), net	1.8	%		(1.1	) %		(2.0	) %
GAAP income (loss) before income taxes	15.7	%		17.1	%		(3.5	) %
Total non-GAAP adjustments before income taxes	18.3	%		15.3	%		25.1	%
Non-GAAP income before income taxes	33.9	%		32.3	%		21.5	%
GAAP income tax provision (benefit)	4.2	%		4.3	%		(3.9	) %
Adjustment for non-cash tax benefits/expenses	(2.2	) %		(2.4	) %		5.2	%
Non-GAAP income tax provision	2.0	%		1.9	%		1.3	%
GAAP net income	11.4	%		12.7	%		0.4	%
Total non-GAAP adjustments before income taxes	18.3	%		15.3	%		25.1	%
Less: total tax adjustments	(2.2	) %		(2.4	) %		5.2	%
Non-GAAP net income	31.9	%		30.4	%		20.3	%

MAXLINEAR, INC. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
		Six Months Ended
		June 30, 2022			June 30, 2021
GAAP gross profit		58.6	%		54.1	%
Stock-based compensation		0.1	%		0.1	%
Performance based equity		0.1	%		0.1	%
Amortization of purchased intangible assets		3.8	%		5.2	%
Non-GAAP gross profit		62.5	%		59.4	%
GAAP R&D expenses		26.9	%		33.2	%
Stock-based compensation		(3.6	) %		(3.5	) %
Performance based equity		(2.3	) %		(3.1	) %
Research and development funded by others		0.2	%		(0.9	) %
Acquisition and integration costs		—	%		—	%
Non-GAAP R&D expenses		21.1	%		25.7	%
GAAP SG&A expenses		15.6	%		17.4	%
Stock-based compensation		(3.3	) %		(2.9	) %
Performance based equity		(0.9	) %		(1.3	) %
Amortization of purchased intangible assets		(1.7	) %		(2.9	) %
Acquisition and integration costs		(1.2	) %		(0.4	) %
Non-GAAP SG&A expenses		8.6	%		10.0	%
GAAP restructuring expenses		0.1	%		0.5	%
Restructuring charges		(0.1	) %		(0.5	) %
Non-GAAP restructuring expenses		—	%		—	%
GAAP income from operations		16.0	%		2.9	%
Total non-GAAP adjustments		16.8	%		20.8	%
Non-GAAP income from operations		32.8	%		23.7	%
GAAP income (loss) on extinguishment of debt		—	%		(1.3	) %
Loss on extinguishment of debt		—	%		1.3	%
Non-GAAP loss on extinguishment of debt		—	%		—	%
GAAP interest and other income (expense), net		0.3	%		(2.1	) %
Non-recurring interest and other income (expense), net		—	%		0.1	%
Non-GAAP interest and other income (expense), net		0.4	%		(2.0	) %
GAAP income (loss) before income taxes		16.3	%		(0.4	) %
Total non-GAAP adjustments		16.8	%		22.2	%
Non-GAAP income before income taxes		33.2	%		21.8	%
GAAP income tax provision (benefit)		4.3	%		(1.5	) %
Adjustment for non-cash tax benefits/expenses		(2.3	) %		2.8	%
Non-GAAP income tax provision		2.0	%		1.3	%
GAAP net income		12.1	%		1.1	%
Total non-GAAP adjustments before income taxes		16.8	%		22.2	%
Less: total tax adjustments		(2.3	) %		2.8	%
Non-GAAP net income		31.2	%		20.5	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220727006016/en/

MaxLinear, Inc. Investor Relations Contact:

Leslie Green

Tel: +1 650-312-9060

lgreen@maxlinear.com

Source: MaxLinear, Inc.

FAQ

What were MaxLinear's Q2 2022 financial results?

MaxLinear reported a net revenue of $280.0 million, up 6% sequentially and 36% year-over-year, with a GAAP gross margin of 58.7%.

What is the outlook for MaxLinear in Q3 2022?

MaxLinear expects Q3 revenue to be approximately $280 million to $290 million with GAAP gross margin projected between 57.5% and 60.5%.

How did MaxLinear's diluted earnings per share change in Q2 2022?

MaxLinear's GAAP diluted earnings per share decreased to $0.40 in Q2 2022 from $0.42 in Q1 2022.

What drove the revenue increase for MaxLinear in Q2 2022?

The revenue increase was driven by strong demand across all product categories, particularly in fiber gateway access and Wi-Fi.

How much cash flow did MaxLinear generate in Q2 2022?

MaxLinear generated a cash flow from operations of approximately $123.4 million in Q2 2022.