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MI

MAXLINEAR, INC (MXL)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $92.2M, up 14% sequentially and down 26% year-over-year; GAAP gross margin improved to 55.6% and non-GAAP gross margin to 59.1% while non-GAAP diluted loss per share narrowed to $0.09 .
  • Management highlighted strong optical interconnect traction with more than 1 million Keystone units shipped across multiple customers, positioning for data center 800G/1.6T ramps; bookings and backlog improved for the third straight quarter .
  • Q1 2025 guidance: revenue $85–$105M; GAAP gross margin 54.5–57.5%; non-GAAP gross margin 57.5–60.5%; GAAP OpEx $93–$99M; non-GAAP OpEx $56–$62M; interest/other $1–$2M; GAAP tax $2.7M; ~85.5M diluted shares .
  • Consensus estimates from S&P Global were unavailable at the time of analysis; however, management noted Q4 results exceeded the midpoint of guidance, a constructive signal for near-term sentiment and potential estimate recalibration .

What Went Well and What Went Wrong

What Went Well

  • Optical interconnect momentum: “We have now shipped more than one million units across multiple customers…into high-volume opportunities,” with additional 800G and 1.6T qualifications expected through 2025/2026 .
  • Sequential improvement and margin resilience: revenue +14% q/q to $92.2M; GAAP GM 55.6% and non-GAAP GM 59.1%, aided by lower OpEx and intangible amortization delta; CEO: “Another quarter of improvement in customer orders and continued new product traction…” .
  • Product portfolio milestones: Ethernet “Swan Creek” 2.5G multi-port PHY/switch gaining traction at a Tier 1 enterprise OEM; Panther storage accelerators and PON/Wi‑Fi7 gateways advancing design-win pipelines .

What Went Wrong

  • Year-over-year contraction and losses: revenue down 26% y/y; GAAP diluted loss per share ($0.68); continued cash outflow from operations ($27.8M) .
  • Working capital pressure: DSO rose to ~85 days vs ~54 days in Q3; cash declined to ~$120M, reflecting restructuring and balance sheet movements; inventory turns ~<1 .
  • Industrial/multimarket softness persists; connectivity only modestly improved; management continues to cite weak demand and prior export-control headwinds earlier in 2H’24 impacting shipments .

Financial Results

Core P&L and Cash Flow (quarterly)

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$125.4 $81.1 $92.2
GAAP Diluted EPS ($)($0.47) ($0.90) ($0.68)
Non-GAAP Diluted EPS ($)$0.01 ($0.36) ($0.09)
GAAP Gross Margin (%)54.7% 54.4% 55.6%
Non-GAAP Gross Margin (%)61.4% 58.7% 59.1%
GAAP Operating Expenses ($USD Millions)$110.3 $110.8 $92.4
Net Cash from Operations ($USD Millions)($16.6) ($30.7) ($27.8)

Segment Revenue (trend view)

Segment ($USD Millions)Q2 2024Q3 2024Q4 2024
Infrastructure$32 $23 $27
Broadband$22 $32 $29
Connectivity$13 $13 $20
Industrial & Multimarket$25 $13 $16

KPIs and Balance Sheet Highlights

KPIQ3 2024Q4 2024
DSO (days)~54 ~85
Inventory TurnsSlightly <1 Slightly <1
Inventory ($USD Millions)$96.1 $90.3
Cash, Cash Equivalents & Restricted Cash ($USD Millions)$149.5 $119.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q4 2024 vs Q1 2025Q4: $80–$100 Q1: $85–$105 Raised midpoint q/q (periods differ)
GAAP Gross Margin (%)Q4 2024 vs Q1 2025Q4: 54.0–57.0 Q1: 54.5–57.5 Slightly raised range
Non-GAAP Gross Margin (%)Q4 2024 vs Q1 2025Q4: 57.5–60.5 Q1: 57.5–60.5 Maintained
GAAP OpEx ($USD Millions)Q4 2024 vs Q1 2025Q4: $88–$94 Q1: $93–$99 Raised
Non-GAAP OpEx ($USD Millions)Q4 2024 vs Q1 2025Q4: $58–$64 Q1: $56–$62 Lowered
Interest & Other ($USD Millions)Q4 2024 vs Q1 2025Q4: $1.0–$2.5 Q1: $1.0–$2.0 Narrowed lower
GAAP Tax ($USD Millions)Q4 2024 vs Q1 2025N/A in Q4 guide Q1: $2.7 Introduced
Diluted Shares (Millions)Q4 2024 vs Q1 2025Q4: ~84.5 Q1: ~85.5 Raised

Earnings Call Themes & Trends

TopicQ2 2024 (prior)Q3 2024 (prior)Q4 2024 (current)Trend
AI/Optical InterconnectExpect >$30M in ’24; Rushmore 200G lane in progress >1M unit annual run-rate; 800G adoption rising >1M units shipped; aiming $60–$70M in ’25 optical revenue Improving
Supply Chain/InventoryChannel inventory bottoming 2H’24; sell-through > sell-in Book-to-bill improving; backlog higher Bookings/backlog improved again; DSO rose to ~85 days Mixed (visibility ↑, WC pressure)
Tariffs/Export Controls/MacroExport-license revocations impacted 2H’24 ($10–$15M) China restrictions pressured industrial Macro demand soft in industrial; no new export issues cited Stabilizing
Product Performance: EthernetTier-1 OEM ramps in 2025; $100M run-rate potential $100M run-rate in 24 months reiterated Swan Creek ramp delayed but intact; $100M/year possible Intact, timing pushed
Broadband/PON/Wi‑Fi7PON platform wins; Tier-1 NA carrier opportunity PON traction at second Tier-1; Wi‑Fi7 transition Additional Tier-1 gateway engagement; 2025–26 ramp Building
Wireless Infrastructure5G backhaul/access content expansion; $200M 3–5yr view Telecom CapEx down; wireless a drag Recovery expected 2H’25; steady bookings improvement Early recovery

Management Commentary

  • “We’re excited by the progress in our optical interconnect business, where we have now shipped more than one million units…We also believe that our investments into fiber broadband access gateways, Wi‑Fi, Ethernet, and wireless infrastructure position us for meaningful growth and TAM expansion this year.” — Kishore Seendripu, CEO .
  • “Another quarter of improvement in customer orders and continued new product traction give us confidence that we are entering our next stage of growth in 2025.” — CEO prepared remarks .
  • “We exited Q4 of 2024 with approximately $120 million in cash…days sales outstanding was ~85 days…gross inventory down versus the previous quarter.” — Steve Litchfield, CFO .

Q&A Highlights

  • Optical interconnect outlook: Company targets ~$60–$70M optical revenue in 2025; mix of 400G/800G with additional qualifications underway; multiple hyperscaler-linked pathways, while AEC/ACC remain smaller contributors near term .
  • Working capital and cash: DSO normalized to ~80–85 days; cash expected to reach breakeven around Q3 2025 as inventory reduces and revenues recover .
  • Segment dynamics Q1: Broadband and infrastructure up; connectivity flat; industrial multimarket down; infrastructure is the biggest grower in 2025 .
  • Ethernet Swan Creek: Design-win traction strong; Tier-1 enterprise timing pushed but intact; multi-year $100M/year category potential .
  • OpEx framework: 2025 non-GAAP OpEx expected ~$220–$225M annualized, progressively declining through the year, reflecting restructuring and program completions .

Estimates Context

  • S&P Global consensus EPS and revenue estimates for Q4 2024 and Q1 2025 were unavailable at the time of analysis due to data access limits; therefore, vs-estimates comparisons are not shown (values unavailable from S&P Global).
  • Relative to company guidance, Q4 revenue of $92.2M exceeded the midpoint of the prior $80–$100M range, with margins near the high end, suggesting potential positive estimate revisions contingent on sustained bookings and optical ramp execution .

Key Takeaways for Investors

  • Optical interconnect momentum is a clear 2025 growth catalyst; >1M units shipped and a targeted $60–$70M optical revenue trajectory underscore positioning for the Ethernet 800G cycle and early 1.6T adopters .
  • Near-term guide midpoints imply sequential stability-to-growth into Q1 (midpoint $95M vs $92M in Q4) with margin resilience; watch for bookings conversion and inventory normalization to drive cash breakeven by Q3 .
  • Ethernet Swan Creek and PON/Wi‑Fi7 gateways provide diversified growth vectors beyond optical, though timing is uneven; updates on Tier-1 enterprise and carrier ramps are key milestones .
  • Working capital remains a watch item (DSO, cash use), but operational efficiency and lower non-GAAP OpEx guide support leverage as volumes return; monitor GAAP OpEx and share count increases in Q1 .
  • Industrial & multimarket weakness persists; broader telecom CapEx recovery is expected in 2H’25, lending support to wireless infrastructure content gains .
  • Without published consensus comparisons, traders should anchor on guidance execution and optical shipment disclosures; any 800G hyperscaler rollout confirmations could be stock-moving events .

Appendix: Additional Relevant Press Releases in Q4 2024

  • New product initiatives supporting connectivity portfolio and industrial markets (e.g., RS‑485 receivers; Wi‑Fi experience enhancements), reinforcing multi-market engagement alongside core optical developments .

Notes:

  • All figures cited are from the company’s press releases, 8‑K filings, and earnings call transcripts as referenced.
  • S&P Global estimates were unavailable at the time of analysis; vs-estimates comparisons are omitted accordingly.