MaxLinear, Inc. Announces Second Quarter 2021 Financial Results

CARLSBAD, Calif.–()–MaxLinear, Inc. (NYSE: MXL), a leading provider of RF, analog, digital and mixed-signal integrated circuits, today announced financial results for the second quarter ended June 30, 2021.

Second Quarter Financial Highlights

GAAP basis:

  • Net revenue was $205.4 million, up 215% year-on-year.
  • GAAP gross margin was 54.8%, compared to 53.4% in the prior quarter, and 50.2% in the year-ago quarter.
  • GAAP operating expenses were $110.3 million in the second quarter 2021, or 54% of net revenue, compared to $101.8 million in the prior quarter, or 49% of net revenue, and $55.5 million in the year-ago quarter, or 85% of net revenue.
  • GAAP income from operations was 1% of revenue, compared to income from operations of 5% in the prior quarter, and loss from operations of 35% in the year-ago quarter.
  • Net cash flow provided by operating activities was $7.9 million, compared to net cash flow provided by operating activities of $60.3 million in the prior quarter, and net cash flow provided by operating activities of $9.3 million in the year-ago quarter.
  • GAAP diluted earnings per share was $0.01, compared to diluted earnings per share of $0.05 in the prior quarter, and diluted loss per share of $0.30 in the year-ago quarter.

Non-GAAP basis:

  • Non-GAAP gross margin was 60.2%. This compares to 58.6% in the prior quarter, and 63.7% in the year-ago quarter.
  • Non-GAAP operating expenses were $75.2 million, or 37% of revenue, compared to $72.6 million or 35% of revenue in the prior quarter, and $32.6 million or 50% of revenue in the year-ago quarter.
  • Non-GAAP income from operations was 24% of revenue, compared to 24% in the prior quarter, and 14% in the year-ago quarter.
  • Non-GAAP diluted earnings per share was $0.53, compared to diluted earnings per share of $0.55 in the prior quarter, and diluted earnings per share of $0.09 in the year-ago quarter.

Recent Business Highlights

  • Announced showcase of industry-first 5nm CMOS 800Gbps PAM4 DSP for data center applications.
  • Announced selection of MxL 93516 PAM4 DSP by uSenlight Corporation to deliver sub-3.5W 100G optical modules for hyperscale data centers and wireless front haul applications
  • Announced MaxLinear’s collaboration with MACOM to assure interoperability of PAM4 DSPs and 100G/lane transimpedance amplifiers for 100G/lambda applications in data center applications.
  • Announced partnership with Cree, Inc. combining MaxLinear’s ultra-wideband linearization solution and Cree’s Wolfspeed Gallium Nitride on SiC mid-band power amplifiers increasing wireless capacity of a 5G base station

Management Commentary

“In the second quarter, revenue was up 215% year-over-year, driven by growth across all of our end markets. Solid demand for our broadband access and connectivity and high-performance analog products was due to a combination of end-market strength and company-specific drivers, including platform-level silicon content increases and market share gains. Non-GAAP gross margin for Q2 of 60.2% was the highest level reported in the past four quarters, mainly due to our strategic focus on driving operational synergies. We are currently focused on improving the ability of our manufacturing supply chain to meet the strong and growing market demand for our connectivity, broadband, and infrastructure products in the latter half of 2021 and heading into 2022. Despite the ongoing challenges within the worldwide semiconductor manufacturing supply chain, we are increasingly confident in the Company’s outlook for the remainder of this year,” commented Kishore Seendripu, Ph.D., Chairman and CEO.

Third Quarter 2021 Business Outlook

The company expects revenue in the third quarter 2021 to be approximately $215 million to $225 million. The Company also estimates the following:

  • GAAP gross margin of approximately 54.5% to 56.5%;
  • Non-GAAP gross margin of approximately 59.5% to 61.5%;
  • GAAP operating expenses of approximately $106.0 million to $110.0 million;
  • Non-GAAP operating expenses of approximately $75.5 million to $79.5 million;
  • GAAP interest and other expense of approximately $2.9 million to $3.0 million; and
  • Non-GAAP interest and other expense of approximately $2.8 million to $2.9 million.

Webcast and Conference Call

MaxLinear will host its second quarter financial results conference call today, July 28, 2021 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, 2021. A replay of the conference call will also be available until August 11, 2021 by dialing US toll free: 1-877-660-6853 / International: 1-201-612-7415 and Conference ID#: 13721386.

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 2021 revenue, gross margins, and operating expenses as well as statements with respect to confidence in the Company’s outlook for the balance of 2021 and into 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 5G wireless and fiber-optic high-speed interconnect infrastructure markets. 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. In addition, we have incurred indebtedness, which enhances specific risks relating to our ability to service interest and principal payments 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. Additional risks and uncertainties affecting our business and future operating results include, without limitation, increasing supply chain risks within our industry, including increases in shipping and material costs and substantial shipping delays resulting in extended lead-times; the on-going impact of the Covid-19 pandemic on our business, including the extent to which our broadband businesses will continue to benefit from work-from-home and similar initiatives as the pandemic abates; risks associated with our ability to realize improved profitability from our Wi-Fi and Broadband assets business; intense competition in our industry; our dependence on a limited number of customers for a substantial portion of our revenues; 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; 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 decreases in average selling prices for our products; 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; our lack of long-term supply contracts and dependence on limited sources of supply, which may be adversely affected by the pandemic; uncertainties concerning how end user markets for our products will develop, including in particular markets we have entered more recently such as broadband and Wi-Fi and 5G wireless and fiber-optic data center high-speed interconnect infrastructure markets but also existing markets which we previously referred to as connected home; and uncertainties concerning the outcome of global trade negotiations, export control limitations, and heightened geopolitical risks generally.

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, 2020 filed with the SEC on February 11, 2021, 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, 2021, which we expect to file soon. All forward-looking statements are based on the estimates, projections and assumptions of management as of July 28, 2021, 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 2021, which we currently intend to settle in shares of our common stock; (iii) accruals related to our performance based bonus plan for 2020, which we settled in shares of common stock in 2021; (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) impairment losses on intangible assets; (x) loss from extinguishment of debt; (xi) other non-recurring interest and other income (expenses), net attributable to acquisitions and (xii) 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 2020 performance periods were settled through the issuance of shares of common stock under our equity incentive plans in March 2021. We currently expect that bonus awards under our fiscal 2021 program will be settled in common stock in the first quarter of fiscal 2022.

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

Research and development funded by others represents proceeds received under a contract for a jointly funded R&D project to develop technology that may be commercialized into a product in the future. Such proceeds have not yet been recognized in GAAP results as 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.

Impairment losses relate to certain intangible assets.

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.

Loss on extinguishment of debt is related to the charge-off of remaining unamortized debt discount and issuance costs on debt we repaid early with proceeds from a new term loan in June 2021.

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, we have not provided a reconciliation for non-GAAP guidance provided for the third quarter 2021.

About MaxLinear, Inc.

MaxLinear, Inc. (NYSE: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 OPERATIONS

(in thousands, except per share data)

 

 

Three Months Ended

 

June 30, 2021

 

March 31, 2021

 

June 30, 2020

Net revenue

$

205,376

 

 

$

209,359

 

 

$

65,220

 

Cost of net revenue

92,833

 

 

97,640

 

 

32,477

 

Gross profit

112,543

 

 

111,719

 

 

32,743

 

Operating expenses:

 

 

 

 

 

Research and development

74,416

 

 

63,166

 

 

27,984

 

Selling, general and administrative

35,885

 

 

36,469

 

 

27,470

 

Restructuring charges

38

 

 

2,166

 

 

64

 

Total operating expenses

110,339

 

 

101,801

 

 

55,518

 

Income (loss) from operations

2,204

 

 

9,918

 

 

(22,775

)

Interest income

18

 

 

 

 

31

 

Interest expense

(3,741

)

 

(4,206

)

 

(2,183

)

Loss on extinguishment of debt

(5,221

)

 

 

 

 

Other income (expense), net

(537

)

 

(104

)

 

(81

)

Total other income (expense), net

(9,481

)

 

(4,310

)

 

(2,233

)

Income (loss) before income taxes

(7,277

)

 

5,608

 

 

(25,008

)

Income tax provision (benefit)

(8,010

)

 

1,806

 

 

(3,201

)

Net income (loss)

$

733

 

 

$

3,802

 

 

$

(21,807

)

Net income (loss) per share:

 

 

 

 

 

Basic

$

0.01

 

 

$

0.05

 

 

$

(0.30

)

Diluted

$

0.01

 

 

$

0.05

 

 

$

(0.30

)

Shares used to compute net income (loss) per share:

 

 

 

 

 

Basic

75,930

 

 

74,852

 

 

72,740

 

Diluted

79,026

 

 

78,283

 

 

72,740

 

MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

 

Six Months Ended

 

June 30, 2021

 

June 30, 2020

Net revenue

$

414,735

 

 

$

127,247

 

Cost of net revenue

190,473

 

 

63,742

 

Gross profit

224,262

 

 

63,505

 

Operating expenses:

 

 

 

Research and development

137,582

 

 

53,673

 

Selling, general and administrative

72,354

 

 

52,102

 

Impairment losses

 

 

86

 

Restructuring charges

2,204

 

 

553

 

Total operating expenses

212,140

 

 

106,414

 

Income (loss) from operations

12,122

 

 

(42,909

)

Interest income

18

 

 

256

 

Interest expense

(7,947

)

 

(4,659

)

Loss on extinguishment of debt

(5,221

)

 

 

Other income (expense), net

(641

)

 

99

 

Total other income (expense), net

(13,791

)

 

(4,304

)

Loss before income taxes

(1,669

)

 

(47,213

)

Income tax benefit

(6,204

)

 

(9,937

)

Net income (loss)

$

4,535

 

 

$

(37,276

)

Net income (loss) per share:

 

 

 

Basic

$

0.06

 

 

$

(0.51

)

Diluted

$

0.06

 

 

$

(0.51

)

Shares used to compute net income (loss) per share:

 

 

 

Basic

75,394

 

 

72,389

 

Diluted

78,657

 

 

72,389

 

MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

Three Months Ended

 

June 30, 2021

 

March 31, 2021

 

June 30, 2020

Operating Activities

 

 

 

 

 

Net income (loss)

$

733

 

 

$

3,802

 

 

$

(21,807

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

Amortization and depreciation

21,997

 

 

22,325

 

 

16,532

 

Amortization of debt issuance costs and accretion of discount on debt and leases

918

 

 

1,153

 

 

397

 

Stock-based compensation

13,966

 

 

12,955

 

 

12,085

 

Deferred income taxes

(6,002

)

 

541

 

 

(2,879

)

Loss on disposal of property and equipment

20

 

 

368

 

 

 

Impairment of leasehold improvements

 

 

226

 

 

 

Impairment of leased right-of-use assets

 

 

429

 

 

 

Loss on extinguishment of debt

5,221

 

 

 

 

 

Loss on foreign currency and other

387

 

 

21

 

 

20

 

Excess tax benefits on stock based awards

(2,822

)

 

(1,809

)

 

(472

)

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

(47,800

)

 

(20,079

)

 

3,362

 

Inventory

(6,254

)

 

5,658

 

 

(3,184

)

Prepaid expenses and other assets

3,588

 

 

29,860

 

 

(669

)

Leased right-of-use assets

36

 

 

36

 

 

(314

)

Accounts payable, accrued expenses and other current liabilities

8,652

 

 

(2,341

)

 

6,020

 

Accrued compensation

13,857

 

 

1,376

 

 

4,396

 

Accrued price protection liability

(344

)

 

7,299

 

 

(2,132

)

Lease liabilities

(2,345

)

 

(2,002

)

 

(1,279

)

Other long-term liabilities

4,043

 

 

454

 

 

(816

)

Net cash provided by operating activities

7,851

 

 

60,272

 

 

9,260

 

Investing Activities

 

 

 

 

 

Purchases of property and equipment

(11,158

)

 

(6,152

)

 

(3,901

)

Purchases of intangible assets

 

 

(1,112

)

 

(13

)

Cash used in acquisitions, net of cash acquired

(7,500

)

 

(20,000

)

 

 

Purchases of long-term investments

 

 

(5,000

)

 

 

Net cash used in investing activities

(18,658

)

 

(32,264

)

 

(3,914

)

Financing Activities

 

 

 

 

 

Proceeds from the issuance of debt

350,000

 

 

 

 

 

Payment of debt issuance cost

(4,127

)

 

 

 

 

Repayment of debt

(349,813

)

 

(20,000

)

 

 

Net proceeds from issuance of common stock

4,796

 

 

1,298

 

 

4,154

 

Minimum tax withholding paid on behalf of employees for restricted stock units

(2,663

)

 

(7,442

)

 

(1,024

)

Repurchase of common stock

(4,464

)

 

(2,673

)

 

 

Net cash provided by (used in) financing activities

(6,271

)

 

(28,817

)

 

3,130

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(681

)

 

(32

)

 

513

 

Increase (decrease) in cash, cash equivalents and restricted cash

(17,759

)

 

(841

)

 

8,989

 

Cash, cash equivalents and restricted cash at beginning of period

149,193

 

 

150,034

 

 

98,440

 

Cash, cash equivalents and restricted cash at end of period

$

131,434

 

 

$

149,193

 

 

$

107,429

 

MAXLINEAR, INC.

UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

Six months ended

 

June 30, 2021

 

June 30, 2020

Operating Activities

 

 

 

Net income (loss)

$

4,535

 

 

$

(37,276

)

Adjustments to reconcile net income (loss) to cash provided by operating activities:

 

 

 

Amortization and depreciation

44,322

 

 

33,265

 

Impairment losses

 

 

86

 

Amortization of debt issuance costs and accretion of discount on debt and leases

2,071

 

 

807

 

Stock-based compensation

26,921

 

 

18,912

 

Deferred income taxes

(5,461

)

 

(9,087

)

Loss on disposal of property and equipment

388

 

 

 

Impairment of leasehold improvements

226

 

 

163

 

Impairment of leased right-of-use assets

429

 

 

44

 

Loss on extinguishment of debt

5,221

 

 

 

(Gain) loss on foreign currency

408

 

 

(226

)

Excess tax benefits on stock-based awards

(4,631

)

 

(378

)

Changes in operating assets and liabilities, net of effects of acquisitions:

 

 

 

Accounts receivable

(67,879

)

 

8,977

 

Inventory

(596

)

 

(2,831

)

Prepaid expenses and other assets

33,448

 

 

774

 

Leased right-of-use assets

72

 

 

326

 

Accounts payable, accrued expenses and other current liabilities

6,311

 

 

5,235

 

Accrued compensation

15,233

 

 

7,757

 

Accrued price protection liability

6,955

 

 

(6,669

)

Lease liabilities

(4,347

)

 

(2,709

)

Other long-term liabilities

4,497

 

 

(1,262

)

Net cash provided by operating activities

68,123

 

 

15,908

 

Investing Activities

 

 

 

Purchases of property and equipment

(17,310

)

 

(4,936

)

Purchases of intangible assets

(1,112

)

 

(13

)

Cash used in acquisitions, net of cash acquired

(27,500

)

 

 

Purchases of available-for-sale securities

(5,000

)

 

 

Net cash used in investing activities

(50,922

)

 

(4,949

)

Financing Activities

 

 

 

Proceeds from the issuance of debt

350,000

 

 

 

Payment of debt issuance cost

(4,127

)

 

 

Repayment of debt

(369,813

)

 

 

Net proceeds from issuance of common stock

6,094

 

 

4,642

 

Minimum tax withholding paid on behalf of employees for restricted stock units

(10,105

)

 

(1,499

)

Repurchase of common stock

(7,137

)

 

 

Net cash provided by (used in) financing activities

(35,088

)

 

3,143

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(713

)

 

210

 

Increase (decrease) in cash, cash equivalents and restricted cash

(18,600

)

 

14,312

 

Cash, cash equivalents and restricted cash at beginning of period

150,034

 

 

93,117

 

Cash, cash equivalents and restricted cash at end of period

$

131,434

 

 

$

107,429

 

MAXLINEAR, INC.

UNAUDITED GAAP CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

June 30, 2021

 

March 31, 2021

 

June 30, 2020

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

130,312

 

 

$

148,095

 

 

$

107,362

 

Short-term restricted cash

107

 

 

114

 

 

9

 

Accounts receivable, net

135,321

 

 

87,521

 

 

41,434

 

Inventory

98,502

 

 

92,154

 

 

34,284

 

Prepaid expenses and other current assets

13,866

 

 

17,096

 

 

7,489

 

Total current assets

378,108

 

 

344,980

 

 

190,578

 

Long-term restricted cash

1,015

 

 

984

 

 

58

 

Property and equipment, net

48,104

 

 

40,787

 

 

18,059

 

Leased right-of-use assets

22,847

 

 

24,403

 

 

8,942

 

Intangible assets, net

174,964

 

 

191,542

 

 

159,441

 

Goodwill

302,828

 

 

302,828

 

 

238,330

 

Deferred tax assets

91,526

 

 

85,524

 

 

76,371

 

Other long-term assets

7,235

 

 

7,551

 

 

1,281

 

Total assets

$

1,026,627

 

 

$

998,599

 

 

$

693,060

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current liabilities

$

211,789

 

 

$

197,637

 

 

$

69,964

 

Long-term lease liabilities

20,445

 

 

22,419

 

 

6,833

 

Long-term debt

343,022

 

 

344,116

 

 

207,486

 

Other long-term liabilities

17,704

 

 

13,649

 

 

6,802

 

Stockholders’ equity

433,667

 

 

420,778

 

 

401,975

 

Total liabilities and stockholders’ equity

$

1,026,627

 

 

$

998,599

 

 

$

693,060

 

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS

(in thousands, except per share data)

 

 

Three Months Ended

 

June 30, 2021

 

March 31, 2021

 

June 30, 2020

GAAP gross profit

$

112,543

 

 

$

111,719

 

 

$

32,743

 

Stock-based compensation

148

 

 

169

 

 

126

 

Performance based equity

127

 

 

82

 

 

109

 

Amortization of purchased intangible assets

10,743

 

 

10,747

 

 

8,581

 

Non-GAAP gross profit

123,561

 

 

122,717

 

 

41,559

 

 

 

 

 

 

 

GAAP R&D expenses

74,416

 

 

63,166

 

 

27,984

 

Stock-based compensation

(7,268

)

 

(7,162

)

 

(5,040

)

Performance based equity

(8,249

)

 

(4,598

)

 

(2,054

)

Research and development funded by others

(3,800

)

 

 

 

 

Acquisition and integration costs

(38

)

 

(92

)

 

 

Non-GAAP R&D expenses

55,061

 

 

51,314

 

 

20,890

 

 

 

 

 

 

 

GAAP SG&A expenses

35,885

 

 

36,469

 

 

27,470

 

Stock-based compensation

(6,551

)

 

(5,624

)

 

(6,920

)

Performance based equity

(3,357

)

 

(1,890

)

 

(1,144

)

Amortization of purchased intangible assets

(5,816

)

 

(6,070

)

 

(5,549

)

Acquisition and integration costs

(25

)

 

(1,561

)

 

(2,090

)

IP litigation costs, net

 

 

(11

)

 

(54

)

Non-GAAP SG&A expenses

20,136

 

 

21,313

 

 

11,713

 

 

 

 

 

 

 

GAAP restructuring expenses

38

 

 

2,166

 

 

64

 

Restructuring charges

(38

)

 

(2,166

)

 

(64

)

Non-GAAP restructuring expenses

 

 

 

 

 

 

 

 

 

 

 

GAAP income (loss) from operations

2,204

 

 

9,918

 

 

(22,775

)

Total non-GAAP adjustments

46,160

 

 

40,172

 

 

31,731

 

Non-GAAP income from operations

48,364

 

 

50,090

 

 

8,956

 

 

 

 

 

 

 

GAAP loss on extinguishment of debt

(5,221

)

 

 

 

 

Loss on extinguishment of debt

5,221

 

 

 

 

 

Non-GAAP loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

GAAP and non-GAAP interest and other income (expense), net

(4,260

)

 

(4,310

)

 

(2,233

)

Non-recurring interest and other income (expense), net

133

 

 

310

 

 

 

Non-GAAP interest and other income (expense), net

(4,127

)

 

(4,000

)

 

(2,233

)

 

 

 

 

 

 

GAAP income (loss) before income taxes

(7,277

)

 

5,608

 

 

(25,008

)

Total non-GAAP adjustments

51,514

 

 

40,482

 

 

31,731

 

Non-GAAP income before income taxes

44,237

 

 

46,090

 

 

6,723

 

 

 

 

 

 

 

GAAP income tax provision (benefit)

(8,010

)

 

1,806

 

 

(3,201

)

Adjustment for non-cash tax benefits/expenses

10,665

 

 

959

 

 

3,605

 

Non-GAAP income tax provision

2,655

 

 

2,765

 

 

404

 

 

 

 

 

 

 

GAAP net income (loss)

733

 

 

3,802

 

 

(21,807

)

Total non-GAAP adjustments before income taxes

51,514

 

 

40,482

 

 

31,731

 

Less: total tax adjustments

10,665

 

 

959

 

 

3,605

 

Non-GAAP net income

$

41,582

 

 

$

43,325

 

 

$

6,319

 

 

 

 

 

 

 

Shares used in computing non-GAAP basic net income per share

75,930

 

 

74,852

 

 

72,740

 

Shares used in computing non-GAAP diluted net income per share

79,026

 

 

78,283

 

 

73,772

 

Non-GAAP basic net income per share

$

0.55

 

 

$

0.58

 

 

$

0.09

 

Non-GAAP diluted net income per share

$

0.53

 

 

$

0.55

 

 

$

0.09

 

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS

(in thousands, except per share data)

 

 

Six Months Ended

 

June 30, 2021

 

June 30, 2020

GAAP gross profit

$

224,262

 

 

$

63,505

 

Stock-based compensation

317

 

 

274

 

Performance based equity

209

 

 

178

 

Amortization of purchased intangible assets

21,490

 

 

17,162

 

Non-GAAP gross profit

246,278

 

 

81,119

 

 

 

 

 

GAAP R&D expenses

137,582

 

 

53,673

 

Stock-based compensation

(14,430

)

 

(8,786

)

Performance based equity

(12,847

)

 

(3,804

)

Research and development funded by others

(3,800

)

 

 

Acquisition and integration costs

(130

)

 

 

Non-GAAP R&D expenses

106,375

 

 

41,083

 

 

 

 

 

GAAP SG&A expenses

72,354

 

 

52,102

 

Stock-based compensation

(12,175

)

 

(9,853

)

Performance based equity

(5,247

)

 

(2,280

)

Amortization of purchased intangible assets

(11,886

)

 

(11,272

)

Acquisition and integration costs

(1,586

)

 

(5,360

)

IP litigation costs, net

(11

)

 

(114

)

Non-GAAP SG&A expenses

41,449

 

 

23,223

 

 

 

 

 

GAAP impairment losses

 

 

86

 

Impairment losses

 

 

(86

)

Non-GAAP impairment losses

 

 

 

 

 

 

 

GAAP restructuring expenses

2,204

 

 

553

 

Restructuring charges

(2,204

)

 

(553

)

Non-GAAP restructuring expenses

 

 

 

 

 

 

 

GAAP income (loss) from operations

12,122

 

 

(42,909

)

Total non-GAAP adjustments

86,332

 

 

59,722

 

Non-GAAP income from operations

98,454

 

 

16,813

 

 

 

 

 

GAAP loss on extinguishment of debt

(5,221

)

 

 

Loss on extinguishment of debt

5,221

 

 

 

Non-GAAP loss on extinguishment of debt

 

 

 

 

 

 

 

GAAP and non-GAAP interest and other income (expense), net

(8,570

)

 

(4,304

)

Non-recurring interest and other income (expense), net

443

 

 

 

Non-GAAP interest and other income (expense), net

(8,127

)

 

(4,304

)

 

 

 

 

GAAP income (loss) before income taxes

(1,669

)

 

(47,213

)

Total non-GAAP adjustments

91,996

 

 

59,722

 

Non-GAAP income before income taxes

90,327

 

 

12,509

 

 

 

 

 

GAAP income tax provision (benefit)

(6,204

)

 

(9,937

)

Adjustment for non-cash tax benefits/expenses

11,624

 

 

10,688

 

Non-GAAP income tax provision

5,420

 

 

751

 

 

 

 

 

GAAP net income (loss)

4,535

 

 

(37,276

)

Total non-GAAP adjustments before income taxes

91,996

 

 

59,722

 

Less: total tax adjustments

11,624

 

 

10,688

 

Non-GAAP net income

$

84,907

 

 

$

11,758

 

 

 

 

 

Shares used in computing non-GAAP basic net income per share

75,394

 

 

72,389

 

Shares used in computing non-GAAP diluted net income per share

78,657

 

 

73,223

 

Non-GAAP basic net income per share

$

1.13

 

 

$

0.16

 

Non-GAAP diluted net income per share

$

1.08

 

 

$

0.16

 

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

 

Three Months Ended

 

June 30, 2021

 

March 31, 2021

 

June 30, 2020

GAAP gross profit

54.8

%

 

53.4

%

 

50.2

%

Stock-based compensation

0.1

%

 

0.1

%

 

0.2

%

Performance based equity

0.1

%

 

%

 

0.2

%

Amortization of purchased intangible assets

5.2

%

 

5.1

%

 

13.2

%

Non-GAAP gross profit

60.2

%

 

58.6

%

 

63.7

%

 

 

 

 

 

 

GAAP R&D expenses

36.2

%

 

30.2

%

 

42.9

%

Stock-based compensation

(3.5

)%

 

(3.4

)%

 

(7.7

)%

Performance based equity

(4.0

)%

 

(2.2

)%

 

(3.1

)%

Research and development funded by others

(1.9

)%

 

%

 

%

Acquisition and integration costs

%

 

%

 

%

Non-GAAP R&D expenses

26.8

%

 

24.5

%

 

32.0

%

 

 

 

 

 

 

GAAP SG&A expenses

17.5

%

 

17.4

%

 

42.1

%

Stock-based compensation

(3.2

)%

 

(2.7

)%

 

(10.6

)%

Performance based equity

(1.6

)%

 

(0.9

)%

 

(1.8

)%

Amortization of purchased intangible assets

(2.8

)%

 

(2.9

)%

 

(8.5

)%

Acquisition and integration costs

%

 

(0.8

)%

 

(3.2

)%

IP litigation costs, net

%

 

%

 

(0.1

)%

Non-GAAP SG&A expenses

9.8

%

 

10.2

%

 

18.0

%

 

 

 

 

 

 

GAAP restructuring expenses

%

 

1.0

%

 

0.1

%

Restructuring charges

%

 

(1.0

)%

 

(0.1

)%

Non-GAAP restructuring expenses

%

 

%

 

%

 

 

 

 

 

 

GAAP income (loss) from operations

1.1

%

 

4.7

%

 

(34.9

)%

Total non-GAAP adjustments

22.5

%

 

19.2

%

 

48.7

%

Non-GAAP income from operations

23.6

%

 

23.9

%

 

13.7

%

 

 

 

 

 

 

GAAP loss on extinguishment of debt

(2.5

)%

 

%

 

%

Loss on extinguishment of debt

2.5

%

 

%

 

%

Non-GAAP loss on extinguishment of debt

%

 

%

 

%

 

 

 

 

 

 

GAAP and non-GAAP interest and other income (expense), net

(2.1

)%

 

(2.1

)%

 

(3.4

)%

Non-recurring interest and other income (expense), net

0.1

%

 

0.1

%

 

%

Non-GAAP interest and other income (expense), net

(2.0

)%

 

(1.9

)%

 

(3.4

)%

 

 

 

 

 

 

GAAP income (loss) before income taxes

(3.5

)%

 

2.7

%

 

(38.3

)%

Total non-GAAP adjustments before income taxes

25.1

%

 

19.3

%

 

48.7

%

Non-GAAP income before income taxes

21.5

%

 

22.0

%

 

10.3

%

 

 

 

 

 

 

GAAP income tax provision (benefit)

(3.9

)%

 

0.9

%

 

(4.9

)%

Adjustment for non-cash tax benefits/expenses

5.2

%

 

0.5

%

 

5.5

%

Non-GAAP income tax provision

1.3

%

 

1.3

%

 

0.6

%

 

 

 

 

 

 

GAAP net income (loss)

0.4

%

 

1.8

%

 

(33.4

)%

Total non-GAAP adjustments before income taxes

25.1

%

 

19.3

%

 

48.7

%

Less: total tax adjustments

5.2

%

 

0.5

%

 

5.5

%

Non-GAAP net income

20.3

%

 

20.7

%

 

9.7

%

MAXLINEAR, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

 

Six Months Ended

 

June 30, 2021

 

June 30, 2020

GAAP gross profit

54.1

%

 

49.9

%

Stock-based compensation

0.1

%

 

0.2

%

Performance based equity

0.1

%

 

0.1

%

Amortization of purchased intangible assets

5.2

%

 

13.5

%

Non-GAAP gross profit

59.4

%

 

63.7

%

 

 

 

 

GAAP R&D expenses

33.2

%

 

42.2

%

Stock-based compensation

(3.5

)%

 

(6.9

)%

Performance based equity

(3.1

)%

 

(3.0

)%

Research and development funded by others

(0.9

)%

 

%

Acquisition and integration costs

%

 

%

Non-GAAP R&D expenses

25.7

%

 

32.3

%

 

 

 

 

GAAP SG&A expenses

17.4

%

 

40.9

%

Stock-based compensation

(2.9

)%

 

(7.7

)%

Performance based equity

(1.3

)%

 

(1.8

)%

Amortization of purchased intangible assets

(2.9

)%

 

(8.9

)%

Acquisition and integration costs

(0.4

)%

 

(4.2

)%

IP litigation costs, net

%

 

(0.1

)%

Non-GAAP SG&A expenses

10.0

%

 

18.3

%

 

 

 

 

GAAP impairment losses

%

 

0.1

%

Impairment losses

%

 

(0.1

)%

Non-GAAP impairment losses

%

 

%

 

 

 

 

GAAP restructuring expenses

0.5

%

 

0.4

%

Restructuring charges

(0.5

)%

 

(0.4

)%

Non-GAAP restructuring expenses

%

 

%

 

 

 

 

GAAP income (loss) from operations

2.9

%

 

(33.7

)%

Total non-GAAP adjustments

20.8

%

 

46.9

%

Non-GAAP income from operations

23.7

%

 

13.2

%

 

 

 

 

GAAP loss on extinguishment of debt

(1.3

)%

 

%

Loss on extinguishment of debt

1.3

%

 

%

Non-GAAP loss on extinguishment of debt

%

 

%

 

 

 

 

GAAP and non-GAAP interest and other income (expense), net

(2.1

)%

 

(3.4

)%

Non-recurring interest and other income (expense), net

0.1

%

 

%

Non-GAAP interest and other income (expense), net

(2.0

)%

 

(3.4

)%

 

 

 

 

GAAP income (loss) before income taxes

(0.4

)%

 

(37.1

)%

Total non-GAAP adjustments

22.2

%

 

46.9

%

Non-GAAP income before income taxes

21.8

%

 

9.8

%

 

 

 

 

GAAP income tax provision (benefit)

(1.5

)%

 

(7.8

)%

Adjustment for non-cash tax benefits/expenses

2.8

%

 

8.4

%

Non-GAAP income tax provision

1.3

%

 

0.6

%

 

 

 

 

GAAP net income (loss)

1.1

%

 

(29.3

)%

Total non-GAAP adjustments before income taxes

22.2

%

 

46.9

%

Less: total tax adjustments

2.8

%

 

8.4

%

Non-GAAP net income

20.5

%

 

9.2

%

 

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