• Net revenue of $248.4 million in Q1, GAAP gross margin of 56.5% and non-GAAP gross margin of 60.3%
• Infrastructure revenue was $46.3 million in Q1, up 46% sequentially and up 40% YoY

CARLSBAD, Calif. — (BUSINESS WIRE) — April 26, 2023 — MaxLinear, Inc. (Nasdaq: MXL), a leading provider of RF, analog, digital and mixed-signal integrated circuits, today announced financial results for the first quarter ended March 31, 2023.

First Quarter Financial Highlights

GAAP basis:

• Net revenue was $248.4 million, down 15% sequentially and down 6% year-over-year.
• GAAP gross margin was 56.5%, compared to 56.2% in the prior quarter, and 58.6% in the year-ago quarter.
• GAAP operating expenses were $113.0 million in the first quarter 2023, or 45% of net revenue, compared to $122.2 million in the prior quarter, or 42% of net revenue, and $106.5 million in the year-ago quarter, or 40% of net revenue.
• GAAP income from operations was 11% of net revenue, compared to income from operations of 14% of net revenue in the prior quarter, and income from operations of 18% of net revenue in the year-ago quarter.
• Net cash flow provided by operating activities was $42.2 million, compared to net cash flow provided by operating activities of $69.4 million in the prior quarter, and net cash flow provided by operating activities of $134.2 million in the year-ago quarter.
• GAAP diluted earnings per share was $0.12, compared to $0.38 in the prior quarter, and $0.42 in the year-ago quarter.

Non-GAAP basis:

• Non-GAAP gross margin was 60.3%. This compares to 59.6% in the prior quarter, and 62.8% in the year-ago quarter.
• Non-GAAP operating expenses were $80.8 million, or 33% of net revenue, compared to $78.5 million or 27% of net revenue in the prior quarter, and $77.3 million or 29% of net revenue in the year-ago quarter.
• Non-GAAP income from operations was 28% of net revenue, compared to 33% in the prior quarter, and 33% in the year-ago quarter.
• Non-GAAP diluted earnings per share was $0.74, compared to $1.07 in the prior quarter, and $1.00 in the year-ago quarter.

Management Commentary

“In the first quarter, we delivered $248.4 million in revenues, improved our gross margins, and generated strong cash flow from operations of approximately $42 million. Our infrastructure category was strongly up 46% sequentially and 40% year over year, primarily driven by the expanding roll-out of multi-band millimeter wave and microwave 5G wireless backhaul platform solutions. We also continue to work towards the antitrust approval of our pending acquisition of Silicon Motion, and are excited by the future growth prospects of our comprehensive combined product portfolio.

“Even as we navigate a challenging demand environment with fiscal discipline and operational efficiency, our solid execution and innovative product offerings are enabling us to maximize strategic business opportunities across all our end markets. In 2023, we continue to lay important groundwork in Wi-Fi, fiber broadband access gateways, and wireless and optical datacenter network infrastructure, which will be the foundation for our growth later this year and throughout 2024,” commented Kishore Seendripu, Ph.D., Chairman and CEO.

Second Quarter 2023 Business Outlook

The company expects net revenue in the second quarter of 2023 to be approximately $175 million to $205 million. The Company also estimates the following:

• GAAP gross margin of approximately 54.5% to 57.5%;
• Non-GAAP gross margin of approximately 59.5% to 62.5%;
• GAAP operating expenses of approximately $110 million to $116 million;
• Non-GAAP operating expenses of approximately $79 million to $85 million;
• GAAP and non-GAAP interest and other expenses each approximately $4 million; and
• GAAP and non-GAAP diluted share count of 81.5 million to 82.5 million each.

Webcast and Conference Call

MaxLinear will host its first quarter financial results conference call today, April 26, 2023 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 10, 2023. A replay of the conference call will also be available until May 10, 2023 by dialing US toll free: 1-877-660-6853 / International: 1-201-612-7415 and Conference ID#: 13737928.

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 second quarter 2024 revenue, and GAAP and non-GAAP gross margins, operating expenses, interest and other expenses, and diluted share counts; statements concerning the Company’s pending merger with Silicon Motion; and statements regarding the Company's potential growth, including potential growth opportunities of our product portfolio and target markets including Wi-Fi, fiber access, wireless and optical infrastructure. 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 proposed merger with Silicon Motion and the risks related to increased indebtedness; the effect of intense and increasing competition; impacts of a global economic downturn and high inflation; the cyclical nature of the semiconductor industry; the political and economic conditions of the countries in which we conduct business and other factors related to our international operations; increased tariffs 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 international geopolitical conflicts; risks related to the loss of, or a significant reduction in orders from major customers; a decrease in the average selling prices of our products; failure to penetrate new applications and markets; development delays and consolidation trends in our industry; inability to make substantial research and development investments; 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, including the impact of excess inventory in the channel on our customers’ expected demand for certain of our products, and/or manage future growth effectively; claims of intellectual property infringement; our ability to protect our intellectual property; and a 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 Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 1, 2023, 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 March 31, 2023. All forward-looking statements are based on the estimates, projections and assumptions of management as of April 26, 2023, 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