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MI

MAXLINEAR, INC (MXL)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered strong topline and profitability: revenue $126.5M (+16% q/q, +56% y/y) and non‑GAAP EPS $0.14; GAAP gross margin 56.9% and non‑GAAP gross margin 59.1% . Against S&P Global consensus, revenue beat by ~$1.8M and EPS by ~$0.02*.
  • Mix shift to Infrastructure (optical DSPs, wireless) supported growth; segment revenue approximations: Infrastructure ~$40M, Broadband ~$58M, Connectivity ~$19M, Industrial ~$9M . Management cited y/y strength: Infrastructure +75%, Broadband +80%, Connectivity +50% .
  • Q4 2025 outlook implies continued acceleration in Infrastructure with seasonal moderation in Broadband/Connectivity; revenue guided to $130–$140M, non‑GAAP GM 58–61%, non‑GAAP opex $57–$63M .
  • Stock narrative catalysts: Keystone PAM4 DSP qualifications at major U.S./Asia data centers and Sierra 5G radios ramping at two North American telcos; risks include fab capacity/pricing pressure, component availability (EML lasers), and FX volatility .

What Went Well and What Went Wrong

What Went Well

  • Broad-based growth with Infrastructure-led mix improvement: Q3 revenue up 16% q/q to $126.5M and non‑GAAP EPS rose to $0.14; non‑GAAP operating margin improved to 12% from 7% in Q2 .
  • Data center optical traction: Keystone PAM4 DSP qualified at several major data centers (400G/800G) with $60–$70M 2025 revenue on track and accelerating into 2026 (“we are on track to deliver $60 to $70 million in revenue in 2025 and accelerating growth in 2026.”) .
  • Wireless infrastructure momentum: Two major North American telcos launched Sierra-based 5G macro RUs in Q3; management expects “sustained growth in 5G wireless access and backhaul” into 2026+ .

What Went Wrong

  • GAAP operating loss widened due to higher GAAP opex (restructuring, stock-based comp, acquisition costs): GAAP opex $113.2M (90% of revenue) and GAAP operating loss 33% of revenue despite non‑GAAP profitability .
  • Gross margin progression constrained by foundry pricing and capacity: “fabs have been increasing prices… we are not where we wanted to be on gross margins,” limiting upside despite favorable mix .
  • Near-term broadband moderation and DOCSIS 4.0 delays: Q4 guide embeds seasonal downshift in Broadband/Connectivity; DOCSIS 4.0 ramps pushed out with operators focusing on incremental upgrades (Ultra DOCSIS 3.1) .

Financial Results

Results vs Consensus (Q3 2025)

MetricQ3 2025 ActualQ3 2025 ConsensusBeat/(Miss)
Revenue ($M)$126.5 $124.7*+$1.8
Primary EPS (Non‑GAAP)$0.14 $0.12*+$0.02

*Values retrieved from S&P Global.

Multi-Period Performance

MetricQ3 2024Q2 2025Q3 2025
Revenue ($M)$81.1 $108.8 $126.5
GAAP Gross Margin (%)54.4% 56.5% 56.9%
Non‑GAAP Gross Margin (%)58.7% 59.1% 59.1%
GAAP Diluted EPS ($)(0.90) (0.31) (0.52)
Non‑GAAP Diluted EPS ($)(0.36) 0.02 0.14
Non‑GAAP Op Margin (%)(31%) 7% 12%

Segment Breakdown (Approx.)

Segment Revenue ($M)Q2 2025Q3 2025
Infrastructure~35 ~40
Broadband~48 ~58
Connectivity~21 ~19
Industrial Multi‑Market~6 ~9

KPIs and Balance Sheet

KPIQ2 2025Q3 2025
Cash, Cash Equivalents & Restricted Cash ($M)~$110 ~$113
Cash from Operations ($M)$10.5 $10.1
DSO (days)~89 ~39
Inventory Turns (x)1.5x 1.8x

Context and drivers:

  • y/y strength concentrated in Infrastructure (+75%), Broadband (+80%), Connectivity (+50%) as carrier CapEx and optical deployments improved .
  • Gross margin steady y/y on a non‑GAAP basis; mix tailwind offset by higher foundry costs .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ4 2025n/a$130M–$140M n/a
GAAP Gross MarginQ4 2025n/a56.0%–59.0% n/a
Non‑GAAP Gross MarginQ4 2025n/a58.0%–61.0% n/a
GAAP OpexQ4 2025n/a$92M–$98M n/a
Non‑GAAP OpexQ4 2025n/a$57M–$63M n/a
GAAP Interest & Other Exp.Q4 2025n/a$2.2M–$2.8M n/a
Non‑GAAP Interest & Other Exp.Q4 2025n/a$1.9M–$2.5M n/a
TaxesQ4 2025n/aGAAP: $(2.5)M benefit; non‑GAAP: $2.0M provision n/a
Shares (Basic/Diluted)Q4 2025n/a87.5M / 91.1M n/a

Note: No prior Q4 2025 guidance was provided; therefore change is not applicable. Management also outlined end‑market dynamics: seasonal moderation in Broadband/Connectivity and growth in Infrastructure/Industrial for Q4 .

Earnings Call Themes & Trends

TopicQ1 2025 (prev)Q2 2025 (prev)Q3 2025 (current)Trend
Data center optical (Keystone 400G/800G)Investment focus; building traction On track for $60–$70M 2025; additional 800G ramp in 2026 Keystone qualified at several major DCs; 2026 acceleration expected Strengthening
Next‑gen optical (Rushmore 1.6T / 200G/lane)Roadmap positioning Strong interest post‑OFC demo; 2026 production envisioned Production ramp targeted 2026; revenue primarily 2027; incumbents ahead now Building pipeline; revenue later
Wireless infrastructure (Sierra 5G)Design‑in progress Two NA telco launches expected in Q3 Two NA telcos launched in Q3; sustained growth expected into 2026 Ramping
Broadband: PON gatewaysMulti‑gig PON + Wi‑Fi platform traction Second Tier‑1 NA carrier ramp later in year Ramp began in Q3; strong growth expected; modest seasonality ahead Positive, moderating near‑term
DOCSIS 4.0Anticipated, timing uncertainInitial rollouts led by smaller MSOs; bigger ramps in 2026 Delays at main operators; Ultra DOCSIS 3.1 prevalent; 2026–27 content uplift Pushed out
Margins/costsGM stable on non‑GAAP Non‑GAAP GM 59.1% with mix tailwind Foundry price increases constrain GM improvement despite mix Mixed tailwinds offset by COGS pressure
Supply chain/availabilityNormalizing FX headwind discussed ($4M in Q2) Potential silicon (5nm) and EML laser constraints can cap hypergrowth Watch capacity/FX
Legal/regulatory (SIMO arbitration)OngoingQ4’25 arbitration; potential resolution 1H’26 On track; similar timeline reiterated No change

Management Commentary

  • “Our Q3 2025 revenue of $126.5 million represents 16% sequential and 56% revenue growth year over year… Our Keystone PAM4 DSP family is now qualified at several major data centers in the U.S. and Asia for 400‑gig and 800‑gig deployments starting 2026.”
  • “Two major North American telecom providers launched new Sierra-based 5G macro remote radio unit products… We project sustained growth in 5G wireless access and backhaul as the needs for cloud and edge AI functionality continue to grow in 2026 and beyond.”
  • “We are not where we wanted to be on gross margins… the fabs have been increasing prices as well.”

Q&A Highlights

  • Infrastructure growth drivers: Optical and wireless both expected to grow at similar orders of magnitude in 2026; infrastructure revenue targeted to reach $300–$500M in 2–3 years .
  • Optical outlook: Solid growth expected; “hypergrowth” requires higher share; constraints include optics/silicon availability and qualification timing .
  • Broadband trajectory: Short‑term moderation due to seasonality; DOCSIS 4.0 delays at major operators; PON ramps at large NA operator underpin growth; DOCSIS content uplift expected late 2026–2027 .

Estimates Context

How results compared to S&P Global Wall Street consensus:

MetricQ1 2025Q2 2025Q3 2025
Revenue – Actual ($M)95.9 108.8 126.5
Revenue – Consensus ($M)95.0*104.9*124.7*
Primary EPS – Actual ($)(0.05) 0.02 0.14
Primary EPS – Consensus ($)(0.05)*0.02*0.12*

*Values retrieved from S&P Global.

Implications:

  • Q3 beat on both revenue and EPS; estimate breadth: 11 estimates for revenue and EPS in Q3 [GetEstimates].
  • Continued estimate revisions likely to move higher for Infrastructure‑exposed lines (optical, wireless) given qualification/ramp commentary and Q4 guide .

Key Takeaways for Investors

  • Infrastructure mix is the key earnings driver; Keystone qualifications plus Sierra 5G ramps support a multi‑quarter growth runway into 2026 despite near‑term broadband seasonality .
  • Non‑GAAP margins are improving with scale, but foundry cost inflation and capacity constraints can dampen incremental GM; monitor cost actions and node allocations (5nm) .
  • Broadband growth will hinge on PON gateway wins and timing of DOCSIS 4.0; management expects material DOCSIS content tailwind in late 2026–2027 .
  • Free cash flow positive for two straight quarters (~$10M each), cash balances improved to ~$113M; better DSO and inventory turns indicate healthier working capital dynamics .
  • 2026 setup: management sees “accelerating” Infrastructure growth, but pace will be influenced by share gains vs incumbents, optics/laser availability, and customer qualification timelines .
  • Watch legal overhang (Silicon Motion arbitration) for potential headline risk/timing; process on track with possible resolution 1H 2026 .

Appendix — Additional Context

  • Other Q3 period press releases: conference call notice (Oct 1) and inducement grants (Aug 21) — no impact on financial outlook .