MaxLinear, Inc. (NASDAQ:MXL) Q3 2020 Earnings Conference Call November 5, 2020 4:30 PM ET Company Participants Brian Nugent - Investor Relations Kishore Seendripu - Chief Executive Officer Steve Litchfield - Chief Financial Officer and Chief Corporate Strategy Officer Conference Call Participants Gary Mobley - Wells Fargo Alessandra Vecchi - William Blair Quinn Bolton - Needham & Company Tore Svanberg - Stifel Ross Seymore - Deutsche Bank Ananda Baruah - Loop Capital Markets Bill Peterson - JPMorgan Suji De ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to Commission file number: 001-34666 MaxLinear Inc. (Exact name of Registrant as specified in its charter) Delaware 14-1896129 (State or other jurisdiction of incorporation or organization) Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ende ...

Financial Data and Key Metrics Changes - Q2 2020 revenue increased by 5% sequentially to $65.2 million, with gross margins at 63.7% and operating cash flows of $9.3 million [13][25][30] - GAAP gross margin was approximately 50.2%, while non-GAAP gross margin was 63.7%, reflecting a delta due to amortization of purchase intangible assets [27] - GAAP operating expenses were approximately $55.5 million, slightly above guidance, primarily due to higher stock-based compensation [28] Business Line Data and Key Metrics Changes - Connected Home business accounted for 45% of overall revenues, down 10% sequentially, while infrastructure business grew 15% driven by high-performance analog products [14][25] - Industrial and multimarket business saw a 38% sequential increase as demand returned after a weak Q1 [26] Market Data and Key Metrics Changes - The company noted strong bookings for Q3, particularly in cable data, benefiting from increased demand for bandwidth due to work-from-home trends [14][33] - The infrastructure segment is expected to grow by 10% to 15% in Q3, driven by recovery in backhaul demand [34] Company Strategy and Development Direction - The upcoming acquisition of Intel's Home Gateway business is expected to close in Q3, doubling the total addressable market to approximately $5 billion [16][32] - The company is focused on expanding its presence in 5G wireless, optical data centers, and high-performance analog markets, aiming for strong top-line growth [23][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in high-performance analog offerings and the broadband business, driven by work-from-home dynamics [39][40] - The company anticipates continued growth in the Connected Home segment, with expectations of low to mid-single-digit growth rates in 2021 [68] Other Important Information - The company reported cash flow from operating activities of $9.3 million, with a net leverage ratio of 1.7 times [30][31] - Guidance for Q3 2020 revenue is expected to be between $72 million and $76 million, reflecting a 13.5% sequential increase at the midpoint [32] Q&A Session Summary Question: What is driving the growth in the Connected Home business? - Management indicated that demand is broad-based across multiple operators, not reliant on a single MSO, with healthy bookings for Q3 and beyond [44] Question: Can you provide an update on the high-speed interconnect business? - Management noted that they are still in the interoperability testing phase with a major customer, and revenues are expected to pick up as customers finalize their manufacturing capabilities [48] Question: How is the legacy business impacting the Connected Home segment? - Management stated that the legacy business is becoming a smaller percentage of overall revenues, with cable data driving growth [54] Question: What is the outlook for the industrial and multimarket business? - Management expressed optimism about continued strong demand and recovery in this segment, expecting stabilization in the market [63] Question: What are the expectations for the Intel acquisition? - Management confirmed confidence in closing the acquisition in Q3, with no further regulatory hurdles anticipated [59] Question: How is the company positioned for future growth in the optical and 5G markets? - Management highlighted ongoing engagements with Tier-1 customers and the introduction of new products, expecting initial revenues from these initiatives in the second half of the year [93]

Part I [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This chapter presents the company's unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive income (loss), stockholders' equity, cash flows, and detailed notes on key accounting areas [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202020%20and%20December%2031%2C%202019) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates | Metric | June 30, 2020 (USD thousands) | December 31, 2019 (USD thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | 107,362 | 92,708 | | Total Current Assets | 190,578 | 181,770 | | Total Assets | 693,060 | 705,791 | | **Liabilities and Stockholders' Equity** | | | | Total Current Liabilities | 69,964 | 66,562 | | Long-Term Debt | 207,486 | 206,909 | | Total Liabilities | 291,085 | 290,871 | | Total Stockholders' Equity | 401,975 | 414,920 | | Total Liabilities and Stockholders' Equity | 693,060 | 705,791 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202020%20and%202019) This section presents the company's financial performance over specific periods, detailing net revenue, costs, gross profit, operating expenses, and net loss | Metric | Q2 2020 (USD thousands) | Q2 2019 (USD thousands) | H1 2020 (USD thousands) | H1 2019 (USD thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | 65,220 | 82,507 | 127,247 | 167,142 | | Cost of Net Revenue | 32,477 | 38,427 | 63,742 | 77,985 | | Gross Profit | 32,743 | 44,080 | 63,505 | 89,157 | | Total Operating Expenses | 55,518 | 47,047 | 106,414 | 99,954 | | Operating Loss | (22,775) | (2,967) | (42,909) | (10,797) | | Net Loss | (21,807) | (2,229) | (37,276) | (7,080) | | Basic Net Loss Per Share | (0.30) | (0.03) | (0.51) | (0.10) | | Diluted Net Loss Per Share | (0.30) | (0.03) | (0.51) | (0.10) | [Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202020%20and%202019) This section details the company's net loss and other comprehensive income (loss) components, leading to total comprehensive loss for the periods presented | Metric | Q2 2020 (USD thousands) | Q2 2019 (USD thousands) | H1 2020 (USD thousands) | H1 2019 (USD thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Loss | (21,807) | (2,229) | (37,276) | (7,080) | | Other Comprehensive Income (Loss) | 410 | (703) | (323) | (678) | | Total Comprehensive Loss | (21,397) | (2,932) | (37,599) | (7,758) | [Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202020%20and%202019) This section outlines changes in the company's stockholders' equity, including common stock, additional paid-in capital, accumulated other comprehensive loss, and accumulated deficit **H1 2020 Stockholders' Equity Changes (USD thousands):** | Item | Balance December 31, 2019 | Equity Award Issuance | Stock-Based Compensation | Other Comprehensive Income (Loss) | Net Loss | Balance June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Common Stock | 7 | — | — | — | — | 7 | | Additional Paid-in Capital | 529,596 | 3,600 | 18,912 | — | — | 554,250 | | Accumulated Other Comprehensive Loss | (887) | — | — | (323) | — | (1,210) | | Accumulated Deficit | (113,796) | — | — | — | (37,276) | (151,072) | | **Total Stockholders' Equity** | **414,920** | **3,600** | **18,912** | **(323)** | **(37,276)** | **401,975** | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202020%20and%202019) This section presents the company's cash inflows and outflows from operating, investing, and financing activities, and the impact of exchange rate changes | Cash Flow Activity | H1 2020 (USD thousands) | H1 2019 (USD thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 15,908 | 28,489 | | Net Cash from Investing Activities | (4,949) | (2,679) | | Net Cash from Financing Activities | 3,143 | (33,894) | | Effect of Exchange Rate Changes | 210 | 931 | | Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | 14,312 | (7,153) | | Cash, Cash Equivalents, and Restricted Cash at End of Period | 107,429 | 67,038 | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the consolidated financial statements, covering various accounting policies and financial instrument details [1. Organization and Summary of Significant Accounting Policies](index=12&type=section&id=1.%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) The company is a fabless integrated circuit design firm for communication solutions, impacted by COVID-19 in H1 2020, and adopted new accounting standards with no significant financial impact - The company is a provider of RF, high-performance analog, and mixed-signal communication system-on-chip solutions for connected home, wired and wireless infrastructure, and industrial and multi-market applications[27](index=27&type=chunk) - The COVID-19 pandemic led to lower-than-expected Q1 2020 revenue, customer-requested shipment delays, and supply chain constraints, with anticipated short-term sales and revenue declines, particularly impacting high-performance analog products in industrial and multi-market businesses[32](index=32&type=chunk) - The company adopted ASC Topic 326 (Financial Instruments—Credit Losses) on January 1, 2020, revising its accounting policy for accounts receivable allowance for doubtful accounts, with no material impact[36](index=36&type=chunk)[39](index=39&type=chunk) - The company adopted ASU No. 2017-04 (Goodwill and Other Intangible Assets—Simplifying the Test for Goodwill Impairment) starting in fiscal year 2020, with no significant impact on financial position or operating results[40](index=40&type=chunk)[41](index=41&type=chunk) [2. Net Income (Loss) Per Share](index=16&type=section&id=2.%20Net%20Income%20(Loss)%20Per%20Share) The company reported basic and diluted net loss per share for Q2 and H1 2020 and 2019, noting that all potentially dilutive securities were excluded from diluted EPS calculations due to net losses | Metric | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Loss (USD thousands) | (21,807) | (2,229) | (37,276) | (7,080) | | Basic Weighted-Average Common Shares (thousand shares) | 72,740 | 70,917 | 72,389 | 70,445 | | Diluted Weighted-Average Common Shares (thousand shares) | 72,740 | 70,917 | 72,389 | 70,445 | | Basic Net Loss Per Share | (0.30) | (0.03) | (0.51) | (0.10) | | Diluted Net Loss Per Share | (0.30) | (0.03) | (0.51) | (0.10) | - Due to the company incurring net losses during the reporting periods, all potentially dilutive securities, including stock options, restricted stock units, and restricted stock awards, were excluded from the diluted net loss per share calculation due to their anti-dilutive nature[49](index=49&type=chunk) [3. Restructuring Activity](index=16&type=section&id=3.%20Restructuring%20Activity) The company implemented restructuring plans for resource alignment and cost savings, including facility relocation, workforce reductions, and contract terminations, with H1 2020 restructuring charges of **USD 553 thousand**, primarily for employee severance and lease-related costs, significantly down from 2019 | Restructuring Expense Category | Q2 2020 (USD thousands) | Q2 2019 (USD thousands) | H1 2020 (USD thousands) | H1 2019 (USD thousands) | | :--- | :--- | :--- | :--- | :--- | | Employee Severance Costs | 52 | 402 | 97 | 874 | | Lease-Related Costs | — | (44) | 275 | 1,301 | | Other | 12 | 58 | 181 | 158 | | **Total** | **64** | **416** | **553** | **2,333** | - Total restructuring liabilities for H1 2020 amounted to **USD 802 thousand**, with **USD 358 thousand** classified as current and **USD 444 thousand** as long-term, primarily comprising lease-related costs[54](index=54&type=chunk) [4. Goodwill and Intangible Assets](index=18&type=section&id=4.%20Goodwill%20and%20Intangible%20Assets) As of June 30, 2020, goodwill remained at **USD 238.3 million** with no impairment recognized, while finite-lived intangible assets had a net book value of **USD 159.4 million**, primarily comprising developed technology, customer relationships, and trademarks, with amortization expensed to cost of sales and SG&A - As of June 30, 2020, the carrying value of goodwill was **USD 238.3 million**, unchanged from December 31, 2019[11](index=11&type=chunk)[56](index=56&type=chunk) - The company performs its annual goodwill impairment assessment on October 31 or more frequently if impairment indicators exist, with no goodwill impairment recognized in H1 2020 or the corresponding 2019 period[56](index=56&type=chunk)[57](index=57&type=chunk) **Net Book Value of Finite-Lived Intangible Assets (USD thousands):** | Category | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Licensed Technology | 296 | 573 | | Developed Technology | 117,676 | 134,839 | | Trademarks and Trade Names | 6,159 | 7,289 | | Customer Relationships | 35,310 | 45,253 | | Non-Compete Covenants | — | 17 | | **Total** | **159,441** | **187,971** | **Amortization Expense for Finite-Lived Intangible Assets (USD thousands):** | Category | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | Cost of Net Revenue | 8,592 | 8,488 | 17,183 | 16,922 | | Research and Development | 1 | 12 | 2 | 46 | | Selling, General and Administrative | 5,549 | 5,792 | 11,272 | 11,590 | | **Total** | **14,142** | **14,292** | **28,457** | **28,558** | [5. Financial Instruments](index=21&type=section&id=5.%20Financial%20Instruments) The company primarily holds interest rate swaps as financial instruments, recorded as an **USD 85 thousand** liability at June 30, 2020, measured at Level 2 fair value, which cash flow hedge floating interest payments on long-term debt, effectively fixing most debt at approximately **4.25%** **Financial Instrument Composition (USD thousands):** | Category | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Interest Rate Swap | 85 | 37 | - Interest rate swaps are classified as Level 2 fair value measurements, with valuations based on models provided by third-party pricing services utilizing market-observable inputs such as the one-month LIBOR yield curve[64](index=64&type=chunk) - The interest rate swap is designated as a cash flow hedge for floating interest payments on long-term debt, effectively fixing most of the long-term debt interest rate at approximately **4.25%**[82](index=82&type=chunk) [6. Balance Sheet Details](index=22&type=section&id=6.%20Balance%20Sheet%20Details) This section provides detailed components of key balance sheet items, including cash and cash equivalents, restricted cash, inventory, net property and equipment, accrued price protection liabilities, and accrued expenses; as of June 30, 2020, cash and cash equivalents were **USD 107.4 million**, inventory was **USD 34.3 million**, and net property and equipment was **USD 18.1 million** **Cash, Cash Equivalents, and Restricted Cash (USD thousands):** | Category | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 107,362 | 92,708 | | Short-Term Restricted Cash | 9 | 349 | | Long-Term Restricted Cash | 58 | 60 | | **Total** | **107,429** | **93,117** | **Inventory Composition (USD thousands):** | Category | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Work-in-Process | 14,638 | 14,525 | | Finished Goods | 19,646 | 16,985 | | **Total** | **34,284** | **31,510** | **Net Property and Equipment (USD thousands):** | Category | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Furniture and Fixtures | 2,229 | 2,199 | | Machinery and Equipment | 37,357 | 35,660 | | Molds and Production Equipment | 17,293 | 15,209 | | Software | 6,132 | 5,956 | | Leasehold Improvements | 15,302 | 16,186 | | Construction in Progress | 1,636 | 746 | | Accumulated Depreciation and Amortization | (61,890) | (59,343) | | **Net** | **18,059** | **16,613** | **Accrued Price Protection Liabilities (USD thousands):** | Item | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Beginning Balance | 12,557 | 16,454 | | Recognized as Reduction of Revenue | 2,191 | 14,880 | | Unclaimed Rebates Written Off | (159) | (719) | | Payments | (8,687) | (19,321) | | **Ending Balance** | **5,902** | **11,294** | [7. Debt and Interest Rate Swap](index=25&type=section&id=7.%20Debt%20and%20Interest%20Rate%20Swap) As of June 30, 2020, the company's net long-term debt was **USD 207.5 million**, primarily from a **USD 425 million** Term Loan B for the Exar acquisition, with a weighted-average effective interest rate of approximately **4.4%**, largely hedged by an interest rate swap fixing the rate at **4.25%** **Long-Term Debt Composition (USD thousands):** | Category | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Principal | 212,000 | 212,000 | | Less: Unamortized Debt Discount | (1,177) | (1,328) | | Less: Unamortized Debt Issuance Costs | (3,337) | (3,763) | | **Net Carrying Value of Long-Term Debt** | **207,486** | **206,909** | - The weighted-average effective interest rates for long-term debt were approximately **4.4%** as of June 30, 2020, and **4.9%** as of December 31, 2019[78](index=78&type=chunk) - The company entered into an interest rate swap agreement in November 2017, converting most floating LIBOR interest payments to a fixed rate of **1.74685%**, effectively fixing most long-term debt at approximately **4.25%**, with the swap maturing in October 2020[82](index=82&type=chunk) [8. Stock-Based Compensation and Employee Benefit Plans](index=28&type=section&id=8.%20Stock-Based%20Compensation%20and%20Employee%20Benefit%20Plans) The company provides equity incentives through its 2010 Equity Incentive Plan and Employee Stock Purchase Plan; H1 2020 stock-based compensation totaled **USD 18.9 million**, primarily allocated to R&D and SG&A, with **USD 76 million** in unrecognized costs as of June 30, 2020, and average vesting periods ranging from **1.90 to 2.93 years** **Stock-Based Compensation Expense (USD thousands):** | Category | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | Cost of Net Revenue | 126 | 147 | 274 | 277 | | Research and Development | 5,040 | 4,222 | 8,786 | 8,435 | | Selling, General and Administrative | 6,919 | 3,838 | 9,852 | 7,242 | | **Total** | **12,085** | **8,207** | **18,912** | **15,954** | - As of June 30, 2020, unrecognized compensation cost for unvested restricted stock units and restricted stock awards was **USD 55.5 million**, with a weighted-average vesting period of **2.93 years**[85](index=85&type=chunk) - As of June 30, 2020, unrecognized compensation cost for unvested performance-based restricted stock units was **USD 19.0 million**, with a weighted-average vesting period of **1.90 years**[85](index=85&type=chunk) - As of June 30, 2020, unrecognized compensation cost for unvested stock options was **USD 1.5 million**, with a weighted-average vesting period of **1.96 years**[85](index=85&type=chunk) [9. Income Taxes](index=32&type=section&id=9.%20Income%20Taxes) The company recorded income tax benefits in Q2 and H1 2020, driven by the mix of pre-tax income across jurisdictions, excess tax benefits from stock-based compensation, and release of uncertain tax position reserves, with H1 2020 also including benefits from the CARES Act and a change in judgment for the Altera tax case **Income Tax Benefit (USD thousands):** | Period | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | Income Tax Benefit | (3,201) | (3,413) | (9,937) | (9,875) | - H1 2020 income tax benefit includes a tax benefit from the CARES Act, allowing the company to carry back 2019 net operating losses to offset prior income taxes paid at a **35%** federal rate[100](index=100&type=chunk) - The company maintains a full valuation allowance against state, certain federal, and certain foreign deferred tax assets due to the unlikelihood of realization in jurisdictions with cumulative losses or where certain tax attributes are not expected to be utilized[98](index=98&type=chunk)[191](index=191&type=chunk) - The Singapore subsidiary operates under tax incentives, taxing certain qualifying income at preferential rates and applying lower withholding tax rates on intercompany royalties, but these benefits had no significant impact on H1 2020 income tax benefit due to net operating losses and a full valuation allowance in Singapore[104](index=104&type=chunk)[192](index=192&type=chunk) [10. Concentration of Credit Risk, Significant Customers and Revenue by Geographic Region](index=34&type=section&id=10.%20Concentration%20of%20Credit%20Risk%2C%20Significant%20Customers%20and%20Revenue%20by%20Geographic%20Region) The company's revenue is highly dependent on a few customers and specific geographic regions; in Q2 2020, one distributor contributed **16%** of net revenue and one direct customer **10%**, with Asia accounting for **83%** of net revenue, primarily Hong Kong and mainland China, and the company also relies on a few suppliers for inventory purchases **Customers Accounting for More Than 10% of Net Revenue:** | Customer | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | Customer A (Distributor) | 16 % | * | 17 % | * | | Customer B (Direct) | 10 % | 12 % | 10 % | 12 % | * Represents less than 10% of net revenue for the period **Net Revenue by Geographic Region (USD thousands):** | Region | Q2 2020 | Percentage | Q2 2019 | Percentage | H1 2020 | Percentage | H1 2019 | Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Asia | 54,095 | 83 % | 68,319 | 83 % | 105,480 | 83 % | 139,867 | 84 % | | United States | 3,289 | 5 % | 3,775 | 4 % | 5,227 | 4 % | 8,127 | 5 % | | Rest of World | 7,836 | 12 % | 10,413 | 13 % | 16,540 | 13 % | 19,148 | 11 % | | **Total** | **65,220** | **100 %** | **82,507** | **100 %** | **127,247** | **100 %** | **167,142** | **100 %** | **Countries/Regions Accounting for More Than 10% of Net Revenue:** | Country/Region | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 42 % | 46 % | 46 % | 45 % | | China | 11 % | 14 % | 10 % | 19 % | * Represents less than 10% of net revenue for the period - The company relies on a few suppliers for inventory purchases, with Vendor A, Vendor B, Vendor C, and Vendor D each contributing over **10%** of inventory purchases in Q2 and H1 2020[112](index=112&type=chunk) [11. Revenue from Contracts with Customers](index=36&type=section&id=11.%20Revenue%20from%20Contracts%20with%20Customers) Net revenue by market shows connected home, infrastructure, and industrial and multi-market as primary sources; distributor sales accounted for **64%** and **63%** of net revenue in Q2 and H1 2020, respectively, and the company estimates customer price adjustments and return obligations as liabilities **Net Revenue by Market (USD thousands):** | Market | Q2 2020 | Percentage | Q2 2019 | Percentage | H1 2020 | Percentage | H1 2019 | Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Connected Home | 29,068 | 45 % | 38,593 | 47 % | 61,322 | 48 % | 82,025 | 49 % | | Infrastructure | 19,238 | 29 % | 22,571 | 27 % | 36,779 | 29 % | 44,673 | 27 % | | Industrial and Multi-Market | 16,914 | 26 % | 21,343 | 26 % | 29,146 | 23 % | 40,444 | 24 % | | **Total Net Revenue** | **65,220** | **100 %** | **82,507** | **100 %** | **127,247** | **100 %** | **167,142** | **100 %** | - Distributor sales accounted for **64%** and **63%** of net revenue in Q2 and H1 2020, respectively, up from **49%** and **45%** in the corresponding 2019 periods[117](index=117&type=chunk)[118](index=118&type=chunk) - As of June 30, 2020, customer price adjustment obligations were **USD 8.0 million** and inventory rotation rights obligations were **USD 1.1 million**, both included in accrued expenses and other current liabilities[121](index=121&type=chunk) [12. Leases](index=37&type=section&id=12.%20Leases) The company primarily leases office facilities through operating leases, typically 3-5 years with renewal or termination options; as of June 30, 2020, operating leases had a weighted-average discount rate of **5.0%** and a remaining lease term of **2.4 years**, with future minimum sublease income of **USD 1.642 million** from unused facilities - As of June 30, 2020, operating leases had a weighted-average discount rate of **5.0%** and a weighted-average remaining lease term of **2.4 years**[123](index=123&type=chunk) **Operating Lease Future Minimum Payments (USD thousands):** | Year | Amount | | :--- | :--- | | 2020 (6 months) | 2,646 | | 2021 | 5,160 | | 2022 | 3,547 | | 2023 | 1,014 | | **Total Minimum Payments** | **12,367** | | Less: Imputed Interest | (758) | | Less: Unrealized Foreign Exchange Loss | (4) | | **Total Lease Liability** | **11,605** | | Less: Current Lease Liability | (4,772) | | **Long-Term Lease Liability** | **6,833** | - As of June 30, 2020, total future minimum sublease income from non-cancelable subleases amounted to **USD 1.642 million**, with **USD 317 thousand** due in H2 2020[127](index=127&type=chunk) [13. Commitments and Contingencies](index=38&type=section&id=13.%20Commitments%20and%20Contingencies) As of June 30, 2020, total future minimum inventory purchase and other contractual obligations were **USD 63.989 million**, an increase of **USD 41.4 million** from year-end 2019, primarily due to increased software licenses and vendor orders; the company does not believe any material litigation will adversely affect its financial condition **Future Minimum Payments (USD thousands):** | Category | 2020 (6 months) | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Inventory Purchase Obligations | 23,141 | 358 | — | — | — | — | 23,499 | | Other Obligations | 5,733 | 14,211 | 13,716 | 6,830 | — | — | 40,490 | | **Total** | **28,874** | **14,569** | **13,716** | **6,830** | **—** | **—** | **63,989** | - As of June 30, 2020, total inventory purchase and other obligations increased by **USD 41.4 million** to **USD 63.989 million**, primarily due to increased software licenses and vendor orders[129](index=129&type=chunk) - The company does not believe any currently pending litigation matters that, if determined adversely, would have a material effect on its financial position, results of operations, or cash flows, or exceed the coverage of its existing liability insurance[130](index=130&type=chunk) [14. Subsequent Event](index=39&type=section&id=14.%20Subsequent%20Event) On April 5, 2020, the company entered an asset purchase agreement with Intel to acquire its Home Gateway Platform Division (WiFi and broadband assets) for **USD 150 million** cash, expected to close in Q3 2020, financed primarily by **USD 140 million** in new debt and **USD 10 million** in cash, with FTC approval obtained and employee consultations underway - On April 5, 2020, the company entered into an agreement with Intel Corporation to acquire its Home Gateway Platform Division (WiFi and broadband assets) for **USD 150 million** in cash[131](index=131&type=chunk) - The transaction is expected to close in Q3 2020, primarily financed by **USD 140 million** in new transaction debt and **USD 10 million** in cash on hand[131](index=131&type=chunk) - The company has received early termination of the waiting period approval from the U.S. Federal Trade Commission (FTC) for the acquisition[133](index=133&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This chapter discusses the company's financial condition and operating results as of June 30, 2020, covering business overview, COVID-19 impact, recent developments including the Intel WiFi and broadband asset acquisition, key accounting policies, operating performance analysis, liquidity, capital resources, and contractual obligations, noting decreased net revenue and expanded operating loss but increased cash and cash equivalents in H1 2020 [Overview](index=40&type=section&id=Overview) This section provides a general business overview, highlighting the company's product offerings, revenue sources, geographic concentration, and customer dependency - The company is a provider of RF, high-performance analog, and mixed-signal communication system-on-chip solutions for connected home, wired and wireless infrastructure, and industrial and multi-market applications[136](index=136&type=chunk) - Net revenue for H1 2020 was **USD 127.2 million**, primarily from sales of RF receivers, system-on-chip, and connectivity solutions[138](index=138&type=chunk) - The Asia region contributed **83%** of H1 2020 net revenue, with Hong Kong accounting for **46%** and mainland China **10%**[139](index=139&type=chunk) - The top ten customers accounted for **68%** of the company's net revenue in H1 2020, with distributor customers representing **48%**[140](index=140&type=chunk) [Impact of COVID-19](index=41&type=section&id=Impact%20of%20COVID-19) This section discusses the COVID-19 pandemic's impact on the company's operations, revenue, and acquisition integration, highlighting shipment delays, supply chain constraints, and market uncertainties - The COVID-19 pandemic caused temporary delays in product shipments in Q1 2020 and impacted H1 2020 net revenue and gross profit, including supply chain constraints and deferred customer orders[142](index=142&type=chunk) - The company anticipates the pandemic will continue to cause high volatility and uncertainty in customer demand and the global economy, potentially leading to near-term declines in sales and revenue, particularly affecting high-performance analog products in industrial and multi-market businesses[142](index=142&type=chunk) - The pandemic complicated the acquisition and integration of Intel's WiFi and broadband assets business, particularly posing challenges in recruiting and retaining key employees globally[143](index=143&type=chunk) [Recent Developments](index=42&type=section&id=Recent%20Developments) This section highlights the company's recent acquisition of Intel's Home Gateway Platform Division, including the transaction details and financing plans - On April 5, 2020, the company entered into an agreement with Intel Corporation to acquire its Home Gateway Platform Division (WiFi and broadband assets) for **USD 150 million** in cash, with the transaction expected to close in Q3 2020[145](index=145&type=chunk) - The company plans to finance the acquisition with **USD 140 million** in new transaction debt and **USD 10 million** in cash on hand, with the new debt having a three-year term and an interest rate of adjusted LIBOR plus **4.25%** or adjusted base rate plus **3.25%**[145](index=145&type=chunk)[146](index=146&type=chunk) [Critical Accounting Policies and Estimates](index=42&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines the company's critical accounting policies and estimates, including revenue recognition, bad debt, inventory, goodwill, intangible assets, income taxes, and stock-based compensation, noting no significant changes in H1 2020 - The company's critical accounting policies and estimates include revenue recognition, allowance for doubtful accounts, inventory valuation, goodwill and other intangible asset valuation, income taxes, and stock-based compensation[148](index=148&type=chunk) - No significant changes occurred in critical accounting policies and estimates during the six months ended June 30, 2020[150](index=150&type=chunk) [Recently Adopted Accounting Pronouncements](index=42&type=section&id=Recently%20Adopted%20Accounting%20Pronouncements) This section details the company's recent adoption of ASC Topic 326 (Credit Losses), ASU No. 2017-04 (Goodwill Impairment), and ASU No. 2020-04 (Reference Rate Reform), with no significant impact on financial condition or operating results - The company adopted ASC Topic 326 (Financial Instruments—Credit Losses) on January 1, 2020, with no significant impact on financial position or operating results[151](index=151&type=chunk)[152](index=152&type=chunk) - The company adopted ASU No. 2017-04 (Goodwill and Other Intangible Assets—Simplifying the Test for Goodwill Impairment) starting in fiscal year 2020, with no significant impact on financial position or operating results[153](index=153&type=chunk) - The company adopted ASU No. 2020-04 (Reference Rate Reform) in March 2020, but due to the LIBOR interest rate swap maturing in October 2020, no significant impact on financial position or operating results is expected[156](index=156&type=chunk) [Recently Issued Accounting Pronouncements](index=44&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section covers recently issued accounting standards, including ASU No. 2019-12 (Income Taxes) and SEC final rules on business acquisitions, with no expected significant impact on the company's 2020 financial condition or operating results - FASB issued ASU No. 2019-12 (Income Taxes—Simplifying the Accounting for Income Taxes) in December 2019, effective for fiscal year 2021, with no significant impact expected on the company's financial position or operating results[157](index=157&type=chunk) - The SEC issued final rules in May 2020, revising financial statement requirements for business acquisitions and related pro forma financial information, which the company plans to early adopt for future filings related to the Intel WiFi and broadband asset acquisition, with no impact expected on 2020 financial position or operating results[158](index=158&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) This section analyzes the company's operating performance, detailing changes in net revenue, cost of revenue, gross profit, and various operating expenses for the reported periods [Net Revenue](index=44&type=section&id=Net%20Revenue) The company's Q2 2020 net revenue was **USD 65.2 million**, a **21%** year-over-year decrease, and H1 2020 net revenue was **USD 127.2 million**, a **24%** decrease, primarily due to declines in connected home, infrastructure, and industrial and multi-market businesses, partly attributable to the COVID-19 pandemic **Net Revenue (USD thousands):** | Period | Q2 2020 | Q2 2019 | Change Amount | Change Percentage | H1 2020 | H1 2019 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Connected Home | 29,068 | 38,593 | (9,525) | (25) % | 61,322 | 82,025 | (20,703) | (25) % | | Infrastructure | 19,238 | 22,571 | (3,333) | (15) % | 36,779 | 44,673 | (7,894) | (18) % | | Industrial and Multi-Market | 16,914 | 21,343 | (4,429) | (21) % | 29,146 | 40,444 | (11,298) | (28) % | | **Total Net Revenue** | **65,220** | **82,507** | **(17,287)** | **(21) %** | **127,247** | **167,142** | **(39,895)** | **(24) %** | - Connected Home net revenue decreased primarily due to continued deterioration in satellite demand and lower MoCA shipments, the latter resulting from a pause in new program launches by a large telecom customer[167](index=167&type=chunk) - Infrastructure revenue declined primarily due to slower wireless backhaul deployments, partly attributable to COVID-19, and reduced demand for high-speed interconnect products[167](index=167&type=chunk)[168](index=168&type=chunk) - Industrial and Multi-Market revenue decreased primarily due to lower shipments of high-performance analog products, largely attributable to the COVID-19 pandemic[167](index=167&type=chunk)[168](index=168&type=chunk) [Cost of Net Revenue and Gross Profit](index=47&type=section&id=Cost%20of%20Net%20Revenue%20and%20Gross%20Profit) The company's Q2 2020 cost of net revenue was **USD 32.5 million**, down **15%** year-over-year, with gross profit of **USD 32.7 million**, down **26%**; H1 2020 cost of net revenue was **USD 63.7 million**, down **18%**, with gross profit of **USD 63.5 million**, down **29%**, primarily due to lower absorption of intangible asset amortization from decreased sales **Cost of Net Revenue and Gross Profit (USD thousands):** | Period | Q2 2020 | Q2 2019 | Change Amount | Change Percentage | H1 2020 | H1 2019 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cost of Net Revenue | 32,477 | 38,427 | (5,950) | (15) % | 63,742 | 77,985 | (14,243) | (18) % | | Cost of Net Revenue as a Percentage of Net Revenue | 50 % | 47 % | | | 50 % | 47 % | | | | Gross Profit | 32,743 | 44,080 | (11,337) | (26) % | 63,505 | 89,157 | (25,652) | (29) % | | Gross Profit as a Percentage of Net Revenue | 50 % | 53 % | | | 50 % | 53 % | | | - The decrease in gross profit percentage was primarily due to lower absorption of intangible asset amortization resulting from decreased sales[172](index=172&type=chunk)[173](index=173&type=chunk) [Research and Development](index=47&type=section&id=Research%20and%20Development) The company's Q2 2020 R&D expenses were **USD 28.0 million**, up **15%** year-over-year, and H1 2020 expenses were **USD 53.7 million**, up **4%**, driven by increased performance bonuses, stock-based compensation, design tools, and consulting fees, partially offset by reduced travel expenses **Research and Development Expenses (USD thousands):** | Period | Q2 2020 | Q2 2019 | Change Amount | Change Percentage | H1 2020 | H1 2019 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Research and Development Expenses | 27,984 | 24,304 | 3,680 | 15 % | 53,673 | 51,703 | 1,970 | 4 % | | As a Percentage of Net Revenue | 43 % | 29 % | | | 42 % | 31 % | | | - The increase in R&D expenses was primarily due to a **USD 2.8 million** increase in performance bonuses and stock-based compensation, a **USD 0.6 million** increase in design tool expenses, a **USD 0.3 million** increase in consulting fees, and a **USD 0.2 million** increase in prototype expenses[176](index=176&type=chunk) - Travel expenses decreased by **USD 0.3 million** due to the suspension of travel during the COVID-19 pandemic to protect employee health and safety[176](index=176&type=chunk) [Selling, General and Administrative](index=48&type=section&id=Selling%2C%20General%20and%20Administrative) The company's Q2 2020 SG&A expenses were **USD 27.5 million**, up **23%** year-over-year, and H1 2020 expenses were **USD 52.1 million**, up **13%**, primarily driven by increased compensation-related expenses, including performance bonuses and stock-based compensation, and professional fees related to the Intel WiFi and broadband asset acquisition **Selling, General and Administrative Expenses (USD thousands):** | Period | Q2 2020 | Q2 2019 | Change Amount | Change Percentage | H1 2020 | H1 2019 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Selling, General and Administrative Expenses | 27,470 | 22,327 | 5,143 | 23 % | 52,102 | 45,918 | 6,184 | 13 % | | As a Percentage of Net Revenue | 42 % | 27 % | | | 41 % | 27 % | | | - The increase in expenses was primarily due to a **USD 4.7 million** increase in compensation-related expenses, such as performance bonuses and stock-based compensation, and a **USD 1.3 million** increase in professional fees related to the Intel WiFi and broadband asset acquisition[180](index=180&type=chunk) - Part of the increase was offset by a **USD 0.5 million** decrease in travel expenses and a **USD 0.3 million** decrease in depreciation expense[180](index=180&type=chunk) [Impairment Losses](index=48&type=section&id=Impairment%20Losses) The company recognized approximately **USD 0.1 million** in impairment losses in H1 2020 related to abandoned intellectual property licenses, with no impairment losses in Q2 2020 or the corresponding 2019 periods **Impairment Losses (USD thousands):** | Period | Q2 2020 | Q2 2019 | Change Amount | Change Percentage | H1 2020 | H1 2019 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Impairment Losses | — | — | — | N/A | 86 | — | 86 | N/A | - Approximately **USD 0.1 million** in impairment losses in H1 2020 were related to abandoned intellectual property licenses[183](index=183&type=chunk) [Restructuring Charges](index=48&type=section&id=Restructuring%20Charges) The company's Q2 2020 restructuring charges were **USD 0.1 million**, down **85%** year-over-year, and H1 2020 charges were **USD 0.6 million**, down **76%**, primarily due to higher lease restructuring and employee severance costs in the prior year **Restructuring Charges (USD thousands):** | Period | Q2 2020 | Q2 2019 | Change Amount | Change Percentage | H1 2020 | H1 2019 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Restructuring Charges | 64 | 416 | (352) | (85) % | 553 | 2,333 | (1,780) | (76) % | | As a Percentage of Net Revenue | — % | 1 % | | | — % | 1 % | | | - Q2 2020 restructuring charges primarily included approximately **USD 0.1 million** in employee severance costs[184](index=184&type=chunk) - H1 2020 restructuring charges primarily included **USD 0.3 million** in lease restructuring costs and **USD 0.2 million** in other costs[185](index=185&type=chunk) [Interest and Other Income (Expense)](index=49&type=section&id=Interest%20and%20Other%20Income%20(Expense)) The company reported a net interest and other expense of **USD 2.2 million** in Q2 2020, an improvement from **USD 2.7 million** in Q2 2019, primarily due to lower interest expense from a reduced average debt balance; H1 2020 saw a net expense of **USD 4.3 million**, an improvement from **USD 6.2 million** in H1 2019, benefiting from lower interest expense and favorable foreign exchange impacts **Interest and Other Income (Expense), Net (USD thousands):** | Period | Q2 2020 | Q2 2019 | Change Amount | Change Percentage | H1 2020 | H1 2019 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Interest and Other Income (Expense), Net | (2,233) | (2,675) | 442 | (17) % | (4,304) | (6,158) | 1,854 | (30) % | | As a Percentage of Net Revenue | (3) % | (3) % | | | (3) % | (4) % | | | - The change in Q2 2020 net interest and other income (expense) was primarily due to a **USD 0.7 million** decrease in interest expense from a lower average debt balance, partially offset by a **USD 0.2 million** decrease in interest income[186](index=186&type=chunk) - The change in H1 2020 net interest and other income (expense) was primarily due to a **USD 1.2 million** decrease in interest expense from a lower average debt balance and a **USD 0.8 million** positive impact from favorable foreign exchange effects[187](index=187&type=chunk) [Income Tax Benefit](index=49&type=section&id=Income%20Tax%20Benefit) The company recorded income tax benefits of **USD 3.2 million** in Q2 2020 and **USD 9.9 million** in H1 2020, consistent with 2019, primarily from the mix of pre-tax income across jurisdictions, excess tax benefits from stock-based compensation, and release of uncertain tax position reserves, with H1 2020 also including CARES Act benefits allowing 2019 net operating loss carrybacks **Income Tax Benefit (USD thousands):** | Period | Q2 2020 | Q2 2019 | Change Amount | Change Percentage | H1 2020 | H1 2019 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Income Tax Benefit | (3,201) | (3,413) | 212 | (6) % | (9,937) | (9,875) | (62) | 1 % | | As a Percentage of Net Revenue | (5) % | (4) % | | | (8) % | (6) % | | | - H1 2020 income tax benefit includes a tax benefit from the CARES Act, allowing the company to carry back 2019 net operating losses to offset prior income taxes paid at a **35%** federal rate[190](index=190&type=chunk) - The company maintains a full valuation allowance against state, certain federal, and certain foreign deferred tax assets due to the unlikelihood of realization in jurisdictions with cumulative losses or where certain tax attributes are not expected to be utilized[191](index=191&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity position, including working capital, cash and cash equivalents, and cash flow activities, and outlines plans for financing the Intel WiFi and broadband asset acquisition **Liquidity Metrics (USD thousands):** | Metric | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Working Capital | 120,614 | 115,208 | | Cash and Cash Equivalents | 107,362 | 92,708 | | Short-Term Restricted Cash | 9 | 349 | | Long-Term Restricted Cash | 58 | 60 | | **Total Cash, Cash Equivalents, and Restricted Cash** | **107,429** | **93,117** | **Cash Flow Summary (USD thousands):** | Cash Flow Activity | H1 2020 | H1 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 15,908 | 28,489 | | Net Cash from Investing Activities | (4,949) | (2,679) | | Net Cash from Financing Activities | 3,143 | (33,894) | | Effect of Exchange Rate Changes | 210 | 931 | | **Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash** | **14,312** | **(7,153)** | - The company expects its **USD 107.4 million** in cash and cash equivalents as of June 30, 2020, to be sufficient to meet operating requirements for at least the next twelve months[207](index=207&type=chunk) - The company plans to finance the upcoming acquisition of Intel's WiFi and broadband assets business with approximately **USD 140 million** in new transaction debt and approximately **USD 10 million** in cash on hand[197](index=197&type=chunk)[207](index=207&type=chunk) [Off-Balance Sheet Arrangements](index=53&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms that as of June 30, 2020, the company had no off-balance sheet arrangements involving unconsolidated entities or special purpose entities - As of June 30, 2020, the company was not involved in any transactions that would establish relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities, nor was it involved in any unconsolidated special purpose entity transactions[210](index=210&type=chunk) [Contractual Obligations](index=53&type=section&id=Contractual%20Obligations) This section details the company's future minimum payments for long-term debt, operating leases, inventory purchases, and other obligations, noting an increase in total contractual obligations due to software license orders **Contractual Obligations Future Minimum Payments (USD thousands):** | Category | Total | Less than 1 Year | 1-3 Years | 3-5 Years | | :--- | :--- | :--- | :--- | :--- | | Long-Term Debt Obligations | 212,000 | — | — | 212,000 | | Operating Lease Obligations | 12,367 | 2,646 | 8,707 | 1,014 | | Inventory Purchase Obligations | 23,499 | 23,141 | 358 | — | | Other Obligations | 40,490 | 5,733 | 27,927 | 6,830 | | **Total** | **288,356** | **31,520** | **36,992** | **219,844** | - As of June 30, 2020, total contractual obligations increased by **USD 38.5 million** to **USD 288.4 million**, primarily due to increased software license orders[213](index=213&type=chunk) - As of June 30, 2020, the balance sheet included **USD 5.5 million** in other long-term liabilities for uncertain tax positions, which are not presented in the contractual obligations table due to uncertainty regarding the amount and timing of settlement[212](index=212&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company primarily faces market risks from foreign currency exchange rates and interest rate fluctuations; foreign exchange risk is limited as most international agreements are USD-denominated, while interest rate risk stems from floating-rate long-term debt, largely hedged by a swap maturing in October 2020, with new **USD 140 million** acquisition debt introducing additional floating-rate exposure - The company primarily faces market risks from foreign currency exchange rates and interest rate fluctuations but does not hold or issue financial instruments for trading purposes[214](index=214&type=chunk) - The company has limited foreign exchange risk and does not engage in foreign currency hedging transactions; a hypothetical 100-basis-point change in foreign exchange rates would impact accumulated other comprehensive income by approximately **USD 0.3 million**[215](index=215&type=chunk) - As of June 30, 2020, the company's long-term debt was **USD 212 million**, with most floating interest rate risk hedged by an interest rate swap, effectively fixing the rate at approximately **4.25%**, but the swap matures in October 2020[216](index=216&type=chunk)[217](index=217&type=chunk) - The upcoming **USD 140 million** transaction debt for the Intel WiFi and broadband asset acquisition will also introduce floating interest rate risk, further increasing the company's exposure to interest rate fluctuations[218](index=218&type=chunk) [Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) The company maintains disclosure controls and procedures to ensure timely recording, processing, summarization, and reporting of information required for periodic reports; as of June 30, 2020, management assessed these controls as effective, with no significant changes in internal control reporting during the quarter - The company maintains disclosure controls and procedures designed to ensure that information required for SEC periodic reports is timely recorded, processed, summarized, and reported[220](index=220&type=chunk) - As of June 30, 2020, the company's Chief Executive Officer and Chief Financial Officer evaluated and concluded that the disclosure controls and procedures were effective[221](index=221&type=chunk) - No significant changes in internal control reporting occurred during the fiscal quarter ended June 30, 2020[222](index=222&type=chunk) Part II [Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) The company occasionally faces litigation threats or actual lawsuits in its ordinary course of business; management believes no currently pending litigation, if determined adversely, would materially affect its financial position, operating results, cash flows, or exceed existing liability insurance coverage - The company occasionally faces litigation threats or actual lawsuits in the ordinary course of its business[225](index=225&type=chunk) - Management believes there are no currently pending litigation matters that, if determined adversely, would have a material effect on the company's financial position, results of operations, or cash flows, or exceed the coverage of its existing liability insurance[225](index=225&type=chunk) [Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks, including those related to the Intel Home Gateway Platform Division acquisition, business operations (e.g., COVID-19, competition, supply chain, IT failures, global conditions), and common stock (e.g., management's cash use, anti-takeover provisions, stock price volatility) [Risks Relating to the Proposed Acquisition of the Home Gateway Platform Division of Intel Corporation](index=56&type=section&id=Risks%20Relating%20to%20the%20Proposed%20Acquisition%20of%20the%20Home%20Gateway%20Platform%20Division%20of%20Intel%20Corporation) This section outlines risks associated with the proposed Intel acquisition, including potential discrepancies in financial performance, integration challenges, business relationship disruptions, talent loss, increased debt, and future impairment of goodwill and intangible assets - If the acquisition is completed, actual financial and operating results may differ materially from expectations, including the financial impact of cost savings and synergies[228](index=228&type=chunk) - Failure to successfully integrate the WiFi and broadband assets business could adversely affect MaxLinear's operating results and financial condition[232](index=232&type=chunk) - Uncertainties related to the acquisition could lead to disruptions in business relationships, including customer relationships[234](index=234&type=chunk) - The acquisition may result in the loss of key personnel, making it difficult to motivate and retain employees[236](index=236&type=chunk) - The company will incur approximately **USD 140 million** in incremental secured term loan debt, which, combined with existing **USD 212 million** debt, will increase interest payment obligations and restrict operational flexibility[238](index=238&type=chunk)[239](index=239&type=chunk) - The acquisition will result in additional goodwill and other intangible assets, which may be subject to future impairment, adversely affecting operating results[244](index=244&type=chunk)[245](index=245&type=chunk) [Risks Related to Our Business](index=61&type=section&id=Risks%20Related%20to%20Our%20Business) This section details various business risks, including the impact of COVID-19, intense competition, high customer concentration, R&D challenges, supply chain dependencies, IT failures, global economic conditions, and regulatory compliance - The COVID-19 pandemic could adversely affect the company's business, financial condition, and operating results, including decreased demand, supply chain constraints, shipment disruptions, and delayed acquisition integration[251](index=251&type=chunk)[252](index=252&type=chunk) - The company faces intense market competition, and increased competition could lead to pricing pressure, reduced profitability, and loss of market share[254](index=254&type=chunk)[255](index=255&type=chunk) - The company relies on a few key customers, and a reduction or loss of orders from these customers could materially adversely affect revenue and operating results[258](index=258&type=chunk)[259](index=259&type=chunk) - Failure to timely develop and introduce new or enhanced products could harm the company's ability to attract and retain customers and weaken its competitive position[282](index=282&type=chunk)[283](index=283&type=chunk) - The company relies on a limited number of third parties for product manufacturing, assembly, and testing; failure to successfully manage relationships with these contractors, or impacts from natural disasters or public health crises, could adversely affect product sales[287](index=287&type=chunk)[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk) - The company faces risks of information technology failures, including data protection breaches and cyberattacks, which could disrupt operations, harm reputation, and adversely affect financial performance[305](index=305&type=chunk)[306](index=306&type=chunk) - Global economic conditions, including factors affecting consumer spending on the company's integrated circuit products, could adversely affect revenue, margins, and operating results[331](index=331&type=chunk) - The company's business is subject to various government regulations, with high compliance costs; failure to comply could lead to product recalls, cessation of manufacturing and distribution, and civil or criminal penalties[338](index=338&type=chunk)[339](index=339&type=chunk) [Risks Relating to Our Common Stock](index=69&type=section&id=Risks%20Relating%20to%20Our%20Common%20Stock) This section addresses risks related to the company's common stock, including management's discretion over cash use, anti-takeover provisions, stock price volatility, and the absence of dividend payments - Management may use available cash and cash equivalents in ways that stockholders may not agree with or that may not yield returns[349](index=349&type=chunk)[350](index=350&type=chunk) - Anti-takeover provisions in the company's charter documents and Delaware law could make acquiring the company more difficult, limit attempts by stockholders to replace or remove current management, and restrict the market price of common stock[351](index=351&type=chunk)[352](index=352&type=chunk) - The company's stock price may fluctuate due to various factors, including actual or anticipated variations in financial condition and operating results, customer changes, market acceptance, new product introductions, competition, key personnel changes, intellectual property disputes, acquisitions, financing activities, stock sales, and macroeconomic and market conditions[353](index=353&type=chunk)[354](index=354&type=chunk) - The company does not intend to pay dividends in the foreseeable future, and investors must rely on stock price appreciation for investment returns[360](index=360&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=71&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company had no unregistered sales of equity securities or repurchases of any equity securities during the quarter - There were no unregistered sales of equity securities during the quarter[361](index=361&type=chunk) - No equity securities were repurchased during the quarter[361](index=361&type=chunk) [Defaults Upon Senior Securities](index=71&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the quarter - No defaults upon senior securities occurred during the quarter[362](index=362&type=chunk) [Mine Safety Disclosures](index=71&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable - This item is not applicable[363](index=363&type=chunk) [Other Information](index=71&type=section&id=Item%205.%20Other%20Information) No other information required disclosure during the quarter - No other information required disclosure during the quarter[364](index=364&type=chunk) [Exhibits](index=72&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the quarterly report, including CEO and CFO certifications under Sarbanes-Oxley Act Section 302, 18 U.S.C. Section 1350 certifications, and XBRL instance and taxonomy extension files **Exhibit List:** | Exhibit Number | Exhibit Title | | :--- | :--- | | 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 32.1(*) | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 101.INS | XBRL Instance Document | | 101.SCH | XBRL Taxonomy Extension Schema Document | | 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | | 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | | 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | | 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | | 104 | Cover Page Interactive Data File (formatted as Inline XBRL) | [Signatures](index=73&type=section&id=Signatures) This quarterly report was duly signed by Steven G. Litchfield, Chief Financial Officer and Chief Corporate Strategy Officer of MaxLinear, Inc. on July 23, 2020 - This report was signed by Steven G. Litchfield, Chief Financial Officer and Chief Corporate Strategy Officer of MaxLinear, Inc. on July 23, 2020[370](index=370&type=chunk)

MaxLinear Investor Presentation May 2020 Disclaimer 2 Forward-Looking Statements This presentation 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 and operating results forecasts as well as trends and growth opportunities in our product markets, our product development init ...

Financial Data and Key Metrics Changes - MaxLinear reported revenues of $62 million in Q1 2020, with gross margins of 63.8% and cash flows from operations of approximately $6.7 million [12][24]. - GAAP gross margin was approximately 49.6%, which was below the guidance of 53.5% to 54% [26]. - GAAP operating expenses were approximately $50.9 million, exceeding the guidance of $46.5 million to $47.5 million due to acquisition costs [27]. Business Line Data and Key Metrics Changes - The connected home business accounted for 52% of total sales, increasing 7% sequentially, while infrastructure and industrial multi-market revenues represented 28% and 20% respectively [13][24]. - The infrastructure business decreased by 14% due to softness in wireless backhaul and normalization of high-speed interconnect business [25]. - The industrial and multi-market business saw a significant decline of 37% sequentially, attributed to seasonal weakness and supply challenges related to COVID-19 [25]. Market Data and Key Metrics Changes - The acquisition of Intel's connected home assets is expected to double the target addressable market to approximately $5 billion [14]. - Demand in the connected home market is improving, with a resumption in multi-Gigabit MoCA wired connectivity deployments [21]. - The optical datacenter market is seeing strong engagement, with the first 400 Gigabit PAM4 deployment ramping up [16]. Company Strategy and Development Direction - The company is focused on expanding its presence in 5G wireless, optical datacenter, and high-performance analog markets, aiming to address bandwidth expansion opportunities [15][22]. - The strategic acquisition of Intel's assets is expected to enhance MaxLinear's capabilities in broadband connectivity and network infrastructure [22][40]. - The company is committed to maintaining strong profitability and cash flow generation while investing in strategic development programs [35][40]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in demand for connected home products, driven by increased bandwidth needs due to work-from-home trends [15][120]. - The company is navigating supply challenges and potential demand disruptions due to the ongoing pandemic [39]. - Management anticipates a recovery in infrastructure revenue by approximately 15% in Q2, with improvements across product categories [33]. Other Important Information - Cash flow from operating activities in Q1 2020 was $6.6 million, down from $28.1 million in Q4 2019 [29]. - The company expects Q2 2020 revenue to be approximately $60 million to $64 million, with connected home revenues projected to decline by roughly 15% [31]. - Non-GAAP operating expenses for Q1 were $31.7 million, slightly below guidance due to disciplined expense management [28]. Q&A Session Summary Question: Guidance for the infrastructure segment - Management expects infrastructure to recover in Q2, with the backhaul segment being the biggest contributor to growth [42][43]. Question: Update on Single Lambda 100 Gig business - The company is seeing accelerating momentum in design wins for Single Lambda 100 Gigabit solutions, with initial revenues expected by the end of the year [44][47]. Question: Status of Intel Gateway business acquisition - The acquisition is on track to close in early Q3, with regulatory hurdles primarily related to work council negotiations in Europe [48][50]. Question: Impediments to broadband gateway installations - COVID-19-related issues have impacted truck rolls, but self-install capabilities are being prioritized by customers [55][56]. Question: Inventory levels and demand trends - The company is not seeing inventory accumulation; strong sell-through indicates real demand for products [60][61]. Question: Connected home backlog and demand drivers - The backlog is strong for existing platforms, with upgrades to DOCSIS 3.1 driving demand [76][78]. Question: Long-term growth outlook for industrial and multi-market segment - Management expects long-term growth of 2% to 4% annually, with new products expected to contribute positively in 2021 [94][96].

PART I — FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the company's unaudited consolidated financial statements and accompanying notes for the period [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20March%2031%2C%202020%20and%20December%2031%2C%202019) Consolidated Balance Sheets | Metric | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :----- | :---------------------------- | :------------------------------- | | Total Assets | $693,425 | $705,791 | | Total Liabilities | $285,268 | $290,871 | | Total Stockholders' Equity | $408,157 | $414,920 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202020%20and%202019) Consolidated Statements of Operations | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | Change (YoY) | | :----- | :----------------------------------------------- | :----------------------------------------------- | :----------- | | Net Revenue | $62,027 | $84,635 | -$22,608 (-26.7%) | | Gross Profit | $30,762 | $45,077 | -$14,315 (-31.8%) | | Loss from Operations | $(20,134) | $(7,830) | -$12,304 (-157.1%) | | Net Loss | $(15,469) | $(4,851) | -$10,618 (-218.9%) | | Basic Net Loss Per Share | $(0.21) | $(0.07) | -$0.14 | | Diluted Net Loss Per Share | $(0.21) | $(0.07) | -$0.14 | [Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202020%20and%202019) Consolidated Statements of Comprehensive Income (Loss) | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :----- | :----------------------------------------------- | :----------------------------------------------- | | Net Loss | $(15,469) | $(4,851) | | Foreign currency translation adjustments, net of tax benefit | $(580) | $513 | | Unrealized loss on interest rate swap, net of tax benefit | $(153) | $(488) | | Other comprehensive income (loss) | $(733) | $25 | | Total Comprehensive Loss | $(16,202) | $(4,826) | [Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202020%20and%202019) Consolidated Statements of Stockholders' Equity | Metric | December 31, 2019 (in thousands) | March 31, 2020 (in thousands) | | :----- | :------------------------------- | :---------------------------- | | Balance at Period Start | $414,920 | $414,920 | | Common stock issued pursuant to equity awards, net | $2,612 | $2,612 | | Stock-based compensation | $6,827 | $6,827 | | Other comprehensive loss | $(733) | $(733) | | Net loss | $(15,469) | $(15,469) | | Balance at Period End | $408,157 | $408,157 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202020%20and%202019) Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :----------------- | :----------------------------------------------- | :----------------------------------------------- | | Net cash provided by operating activities | $6,648 | $16,045 | | Net cash used in investing activities | $(1,035) | $(2,155) | | Net cash provided by (used in) financing activities | $13 | $(16,791) | | Increase (decrease) in cash, cash equivalents and restricted cash | $5,323 | $(2,324) | | Cash, cash equivalents and restricted cash at end of period | $98,440 | $71,867 | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. Organization and Summary of Significant Accounting Policies](index=12&type=section&id=1.%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) - MaxLinear, Inc is a fabless integrated circuit design company providing radio-frequency, high-performance analog, and mixed-signal communications system-on-chip solutions[28](index=28&type=chunk)[131](index=131&type=chunk) - **Revenues in Q1 2020 declined due to the COVID-19 pandemic**, experiencing customer shipment delays and supply constraints, with continued uncertainty in future impact[33](index=33&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - The company adopted ASC Topic 326 (Measurement of Credit Losses on Financial Instruments) on January 1, 2020, which **did not have a material impact** on its financial position[37](index=37&type=chunk)[40](index=40&type=chunk)[146](index=146&type=chunk) [2. Net Income (Loss) Per Share](index=15&type=section&id=2.%20Net%20Income%20(Loss)%20Per%20Share) Net Income (Loss) Per Share | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :----- | :-------------------------------- | :-------------------------------- | | Net Loss | $(15,469) | $(4,851) | | Weighted average common shares outstanding—basic | 72,039 | 69,968 | | Dilutive common stock equivalents | — | — | | Net Loss Per Share (Basic) | $(0.21) | $(0.07) | | Net Loss Per Share (Diluted) | $(0.21) | $(0.07) | - For Q1 2020 and Q1 2019, **3.3 million and 2.9 million common stock equivalents**, respectively, were excluded from diluted net loss per share calculations due to their anti-dilutive nature[48](index=48&type=chunk) [3. Restructuring Activity](index=16&type=section&id=3.%20Restructuring%20Activity) Restructuring Charges | Restructuring Charges | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | Change (YoY) | | :-------------------- | :----------------------------------------------- | :----------------------------------------------- | :----------- | | Employee separation expenses | $44 | $472 | -$428 | | Lease related charges | $275 | $1,345 | -$1,070 | | Other | $170 | $100 | +$70 | | Total | $489 | $1,917 | -$1,428 (-74.5%) | Restructuring Liability | Restructuring Liability | December 31, 2019 (in thousands) | March 31, 2020 (in thousands) | | :-------------------- | :------------------------------- | :---------------------------- | | Total Liability | $837 | $827 | | Current Portion | $294 | $319 | | Long-term Portion | $543 | $508 | [4. Goodwill and Intangible Assets](index=17&type=section&id=4.%20Goodwill%20and%20Intangible%20Assets) - The carrying amount of **goodwill remained at $238.3 million** as of March 31, 2020, with no impairment recognized[11](index=11&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) Finite-Lived Intangible Assets | Finite-Lived Intangible Assets | March 31, 2020 (Net Carrying Amount, in thousands) | December 31, 2019 (Net Carrying Amount, in thousands) | | :----------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Licensed technology | $385 | $573 | | Developed technology | $126,258 | $134,839 | | Trademarks and trade names | $6,724 | $7,289 | | Customer relationships | $40,203 | $45,253 | | Non-compete covenants | — | $17 | | Total | $173,570 | $187,971 | Amortization Expense | Amortization Expense | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :------------------- | :----------------------------------------------- | :----------------------------------------------- | | Cost of net revenue | $8,591 | $8,434 | | Research and development | $1 | $34 | | Selling, general and administrative | $5,723 | $5,798 | | Total | $14,315 | $14,266 | - Indefinite-lived intangible assets, consisting of acquired in-process research and development (IPR&D), had a **balance of $0** for the three months ended March 31, 2020, with no impairment losses recorded[58](index=58&type=chunk) [5. Financial Instruments](index=19&type=section&id=5.%20Financial%20Instruments) Financial Instrument | Financial Instrument | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :------------------- | :---------------------------- | :------------------------------- | | Interest rate swap (liability) | $231 | $37 | - The interest rate swap is classified within **Level 2 of the fair value hierarchy**, valued using market observable inputs like one-month LIBOR-based yield curves[61](index=61&type=chunk) Interest Rate Swap Activity | Interest Rate Swap Activity | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :-------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Beginning balance | $(37) | $1,623 | | Unrealized loss recognized in other comprehensive income (loss) | $(194) | $(618) | | Ending balance | $(231) | $1,005 | [6. Balance Sheet Details](index=20&type=section&id=6.%20Balance%20Sheet%20Details) Asset/Liability Details | Asset/Liability | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :-------------- | :---------------------------- | :------------------------------- | | Cash and cash equivalents | $98,373 | $92,708 | | Total cash, cash equivalents and restricted cash | $98,440 | $93,117 | | Inventory | $31,088 | $31,510 | | Property and equipment, net | $15,751 | $16,613 | | Accrued price protection liability | $8,024 | $12,557 | | Accrued expenses and other current liabilities | $30,661 | $31,171 | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) | December 31, 2019 (in thousands) | March 31, 2020 (in thousands) | | :------------------------------------------ | :------------------------------- | :---------------------------- | | Cumulative Translation Adjustments | $(747) | $(1,327) | | Interest Rate Hedge | $(140) | $(293) | | Total | $(887) | $(1,620) | [7. Debt and Interest Rate Swap](index=23&type=section&id=7.%20Debt%20and%20Interest%20Rate%20Swap) Debt Metrics | Debt Metric | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :---------- | :---------------------------- | :------------------------------- | | Principal | $212,000 | $212,000 | | Net carrying amount of long-term debt | $207,197 | $206,909 | - The **weighted average effective interest rate** on long-term debt was approximately **4.6%** at March 31, 2020, down from 4.9% at December 31, 2019[75](index=75&type=chunk) - An interest rate swap effectively **fixes the interest rate at approximately 4.25%** on a substantial portion of the long-term debt and expires in October 2020[79](index=79&type=chunk)[195](index=195&type=chunk) - The fair value of the interest rate swap was a **$0.2 million liability** at March 31, 2020, and a $0.04 million liability at December 31, 2019[79](index=79&type=chunk) [8. Stock-Based Compensation and Employee Benefit Plans](index=26&type=section&id=8.%20Stock-Based%20Compensation%20and%20Employee%20Benefit%20Plans) Stock-Based Compensation Expense | Stock-Based Compensation Expense | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :------------------------------- | :----------------------------------------------- | :----------------------------------------------- | | Cost of net revenue | $148 | $130 | | Research and development | $3,746 | $4,213 | | Selling, general and administrative | $2,933 | $3,404 | | Total | $6,827 | $7,747 | Restricted Stock Units (RSUs) | Restricted Stock Units (RSUs) | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :---------------------------- | :------------------------------ | :------------------------------- | | Outstanding | 4,530 | 2,924 | | Weighted-Average Grant Date Fair Value per Share | $17.64 | $21.72 | Performance-Based RSUs | Performance-Based RSUs | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :--------------------- | :------------------------------ | :------------------------------- | | Outstanding | 1,808 | 445 | | Weighted-Average Grant Date Fair Value per Share | $13.95 | $22.21 | - Total unrecognized compensation cost for unvested equity awards was **$58.0 million for RSUs**, **$17.6 million for performance-based RSUs**, and **$1.7 million for stock options** as of March 31, 2020[82](index=82&type=chunk) [9. Income Taxes](index=29&type=section&id=9.%20Income%20Taxes) Income Tax Benefit | Income Tax Benefit | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :----------------- | :----------------------------------------------- | :----------------------------------------------- | | Income tax benefit | $(6,736) | $(6,462) | - The Q1 2020 income tax benefit included a benefit related to the **CARES Act**, allowing a carryback of the 2019 net operating loss to a higher federal tax rate period[95](index=95&type=chunk)[171](index=171&type=chunk) - The company maintains a **valuation allowance** on its state, certain federal, and certain foreign deferred tax assets due to unlikelihood of utilization[93](index=93&type=chunk)[172](index=172&type=chunk) [10. Concentration of Credit Risk, Significant Customers and Revenue by Geographic Region](index=30&type=section&id=10.%20Concentration%20of%20Credit%20Risk%2C%20Significant%20Customers%20and%20Revenue%20by%20Geographic%20Region) Customer Concentration | Customer (Type) | Percentage of Total Net Revenue (Q1 2020) | Percentage of Total Net Revenue (Q1 2019) | | :-------------- | :---------------------------------------- | :---------------------------------------- | | Customer A (distributor) | 18% | <10% | | Customer B (direct) | 10% | 12% | | Top 10 Customers (collectively) | 68% (Q1 2020) | N/A | Revenue by Geographic Area | Geographic Area (Ship-to) | Net Revenue Q1 2020 (in thousands) | % of Total Net Revenue Q1 2020 | Net Revenue Q1 2019 (in thousands) | % of Total Net Revenue Q1 2019 | | :------------------------ | :--------------------------------- | :----------------------------- | :--------------------------------- | :----------------------------- | | Asia | $52,035 | 84% | $71,548 | 85% | | United States | $1,616 | 3% | $4,352 | 5% | | Rest of world | $8,376 | 13% | $8,735 | 10% | | Total | $62,027 | 100% | $84,635 | 100% | Revenue by Country/Territory | Country/Territory (Ship-to) | Percentage of Total Net Revenue (Q1 2020) | Percentage of Total Net Revenue (Q1 2019) | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | | Hong Kong | 50% | 45% | | China | <10% | 22% | Significant Suppliers | Significant Suppliers (Q1 2020) | % of Total Inventory Purchases | | :------------------------------ | :----------------------------- | | Vendor A | 19% | | Vendor B | 18% | | Vendor C | 17% | | Vendor D | 16% | [11. Revenue from Contracts with Customers](index=33&type=section&id=11.%20Revenue%20from%20Contracts%20with%20Customers) Revenue by Market Segment | Market Segment | Net Revenue Q1 2020 (in thousands) | % of Net Revenue Q1 2020 | Net Revenue Q1 2019 (in thousands) | % of Net Revenue Q1 2019 | Change (YoY) | | :------------- | :--------------------------------- | :----------------------- | :--------------------------------- | :----------------------- | :----------- | | Connected home | $32,254 | 52% | $43,432 | 51% | -$11,178 (-25.7%) | | Infrastructure | $17,542 | 28% | $22,102 | 26% | -$4,560 (-20.6%) | | Industrial and multi-market | $12,231 | 20% | $19,101 | 23% | -$6,870 (-36.0%) | | Total Net Revenue | $62,027 | 100% | $84,635 | 100% | -$22,608 (-26.7%) | - Revenues from sales through distributors accounted for **61% of net revenue in Q1 2020**, up from 41% in Q1 2019[112](index=112&type=chunk)[278](index=278&type=chunk) - Obligations to customers for price protection rights totaled **$8.0 million** at March 31, 2020, a decrease from $12.6 million at December 31, 2019[115](index=115&type=chunk) [12. Leases](index=33&type=section&id=12.%20Leases) Operating Lease Liabilities | Operating Lease Liabilities | Amount (in thousands) | | :------------------------ | :-------------------- | | Total lease liabilities (March 31, 2020) | $12,780 | | Short-term lease liabilities (March 31, 2020) | $4,751 | | Long-term lease liabilities (March 31, 2020) | $8,029 | - As of March 31, 2020, the weighted average discount rate for operating leases was **5.0%**, and the weighted average remaining lease term was **2.7 years**[118](index=118&type=chunk) Sublease Income | Sublease Income | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :-------------- | :----------------------------------------------- | :----------------------------------------------- | | Total sublease income | $0.2 million | $0.6 million | [13. Commitments and Contingencies](index=35&type=section&id=13.%20Commitments%20and%20Contingencies) Contractual Obligations | Contractual Obligations (March 31, 2020) | Total (in thousands) | Less than 1 year (in thousands) | 1-3 years (in thousands) | 3-5 years (in thousands) | | :--------------------------------------- | :------------------- | :------------------------------ | :----------------------- | :----------------------- | | Inventory Purchase Obligations | $22,252 | $22,252 | — | — | | Other Obligations (software licenses) | $5,827 | $2,985 | $2,395 | $447 | | Total Minimum Payments | $28,079 | $25,237 | $2,395 | $447 | - The company is subject to litigation in the ordinary course of business but believes **no currently pending matters would have a material adverse effect** on its financials[124](index=124&type=chunk)[202](index=202&type=chunk) [14. Subsequent Event (Acquisition of Home Gateway Platform Division of Intel Corporation)](index=35&type=section&id=14.%20Subsequent%20Event) - On April 5, 2020, MaxLinear entered an agreement to acquire **Intel's Home Gateway Platform Division for $150.0 million in cash**[125](index=125&type=chunk)[140](index=140&type=chunk) - The acquisition is expected to be funded by **$140.0 million of new secured term loan debt** and $10.0 million in cash, with an expected close in Q3 2020[125](index=125&type=chunk)[126](index=126&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) - The transaction is subject to customary closing conditions, including regulatory approval, which **received early termination of the HSR Act waiting period** on April 21, 2020[127](index=127&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2020 financial performance, COVID-19 impacts, and the planned Intel acquisition [Overview](index=37&type=section&id=Overview) - MaxLinear is a fabless integrated circuit design company providing RF, high-performance analog, and mixed-signal communications system-on-chip solutions[131](index=131&type=chunk) - **Q1 2020 revenues were $62.0 million**, primarily from sales of RF receivers, RF receiver systems-on-chip, and connectivity solutions[133](index=133&type=chunk) - Products shipped to **Asia accounted for 84% of net revenue** in Q1 2020, with 50% from Hong Kong[134](index=134&type=chunk) [Impact of COVID-19](index=38&type=section&id=Impact%20of%20COVID-19) - **COVID-19 led to temporary delays in product shipments**, supply constraints, and customer push-out requests in Q1 2020, impacting net revenue and gross profits[33](index=33&type=chunk)[137](index=137&type=chunk) - Heightened volatility and uncertainty due to COVID-19 are expected to continue, **potentially decreasing sales and revenues**, especially for high-performance analog products[33](index=33&type=chunk)[138](index=138&type=chunk) - The integration of the Intel Home Gateway Platform Division acquisition will be **complicated by COVID-19 related travel restrictions**, posing risks to employee retention and success[139](index=139&type=chunk) [Recent Developments](index=40&type=section&id=Recent%20Developments) - On April 5, 2020, MaxLinear agreed to acquire **Intel's Home Gateway Platform Division for $150.0 million in cash**[140](index=140&type=chunk) - The acquisition will be funded primarily by **$140.0 million of new secured term loan debt** and $10.0 million in cash, with an expected closing in Q3 2020[140](index=140&type=chunk)[141](index=141&type=chunk) [Critical Accounting Policies and Estimates](index=40&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - Critical accounting policies include revenue recognition, inventory valuation, goodwill and intangible assets valuation, income taxes, and stock-based compensation[143](index=143&type=chunk) - There have been **no material changes** to the critical accounting policies and estimates during the three months ended March 31, 2020[145](index=145&type=chunk) [Recently Adopted Accounting Pronouncements](index=41&type=section&id=Recently%20Adopted%20Accounting%20Pronouncements) - Adopted ASC Topic 326 (Credit Losses) on January 1, 2020, which **did not have a material impact** on accounts receivable or results of operations[40](index=40&type=chunk)[146](index=146&type=chunk) - Adopted ASU No 2017-04 (Goodwill Impairment) on January 1, 2020, simplifying the impairment test, with **no expected material impact**[41](index=41&type=chunk)[147](index=147&type=chunk) - Adopted ASU No 2018-13 (Fair Value Measurement) and ASU No 2018-15 (Cloud Computing Arrangement Costs) in Q1 2020, neither of which had a material impact[43](index=43&type=chunk)[44](index=44&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) [Recently Issued Accounting Pronouncements](index=42&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) - FASB issued ASU No 2019-12 (Income Taxes) in December 2019, effective for fiscal year 2021, which is **not expected to have a material impact**[45](index=45&type=chunk)[151](index=151&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) [Net Revenue](index=43&type=section&id=Net%20Revenue) Net Revenue by Market Segment | Market Segment | Net Revenue Q1 2020 (in thousands) | Net Revenue Q1 2019 (in thousands) | $ Change | % Change | | :------------- | :--------------------------------- | :--------------------------------- | :------- | :------- | | Connected home | $32,254 | $43,432 | $(11,178) | (26)% | | Infrastructure | $17,542 | $22,102 | $(4,560) | (21)% | | Industrial and multi-market | $12,231 | $19,101 | $(6,870) | (36)% | | Total Net Revenue | $62,027 | $84,635 | $(22,608) | (27)% | - The decrease in connected home net revenue was driven by **slowdowns in satellite and cable markets**, market transition from DOCSIS 3.0 to 3.1, and COVID-19 impacts[159](index=159&type=chunk) - The decrease in industrial and multi-market revenue was primarily attributed to **decreased shipments of high-performance analog products** due to the impact of COVID-19[159](index=159&type=chunk) [Cost of Net Revenue and Gross Profit](index=44&type=section&id=Cost%20of%20Net%20Revenue%20and%20Gross%20Profit) Cost of Net Revenue and Gross Profit | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | $ Change | % Change | | :----- | :----------------------------------------------- | :----------------------------------------------- | :------- | :------- | | Cost of net revenue | $31,265 | $39,558 | $(8,293) | (21)% | | Gross profit | $30,762 | $45,077 | $(14,315) | (32)% | | % of net revenue (Gross profit) | 50% | 53% | | | - The decrease in cost of net revenue was primarily driven by **lower sales**, while the decline in gross profit percentage was due to **product mix**[161](index=161&type=chunk) [Research and Development](index=44&type=section&id=Research%20and%20Development) Research and Development Expenses | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | $ Change | % Change | | :----- | :----------------------------------------------- | :----------------------------------------------- | :------- | :------- | | Research and development | $25,689 | $27,399 | $(1,710) | (6)% | | % of net revenue | 41% | 32% | | | - The decrease was primarily due to **lower prototype expenses ($2.0 million)**, partially offset by an increase in outside services ($1.1 million)[163](index=163&type=chunk) [Selling, General and Administrative](index=44&type=section&id=Selling%2C%20General%20and%20Administrative) Selling, General and Administrative Expenses | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | $ Change | % Change | | :----- | :----------------------------------------------- | :----------------------------------------------- | :------- | :------- | | Selling, general and administrative | $24,632 | $23,591 | $1,041 | 4% | | % of net revenue | 40% | 28% | | | - The increase was primarily due to a **$2.5 million increase in professional fees related to acquisition activities**[165](index=165&type=chunk) [Impairment Losses](index=45&type=section&id=Impairment%20Losses) Impairment Losses | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | $ Change | % Change | | :----- | :----------------------------------------------- | :----------------------------------------------- | :------- | :------- | | Impairment losses | $86 | $0 | $86 | 100% | - Impairment losses in Q1 2020 were related to the **abandonment of a license of intellectual property**[167](index=167&type=chunk) [Restructuring Charges](index=45&type=section&id=Restructuring%20Charges) Restructuring Charges | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | $ Change | % Change | | :----- | :----------------------------------------------- | :----------------------------------------------- | :------- | :------- | | Restructuring charges | $489 | $1,917 | $(1,428) | (74)% | - Q1 2020 restructuring charges primarily consisted of **lease-related charges ($0.3 million)**, while Q1 2019 charges included lease-related charges ($1.3 million) and severance charges ($0.6 million)[168](index=168&type=chunk) [Interest and Other Income (Expense)](index=45&type=section&id=Interest%20and%20Other%20Income%20(Expense)) Interest and Other Income (Expense), Net | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | $ Change | % Change | | :----- | :----------------------------------------------- | :----------------------------------------------- | :------- | :------- | | Interest and other income (expense), net | $(2,071) | $(3,483) | $1,412 | (41)% | - The improvement was primarily due to **favorable foreign currency exchange ($0.9 million)** and a decrease in interest expense ($0.5 million)[169](index=169&type=chunk) [Income Tax Benefit](index=45&type=section&id=Income%20Tax%20Benefit) Income Tax Benefit | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :----- | :----------------------------------------------- | :----------------------------------------------- | | Income tax benefit | $(6,736) | $(6,462) | - The Q1 2020 income tax benefit included a tax benefit from the **CARES Act**, allowing the carryback of the 2019 net operating loss[171](index=171&type=chunk) - The company maintains a **valuation allowance** on state and certain federal and foreign deferred tax assets[172](index=172&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity Metrics | Metric | March 31, 2020 (in thousands) | December 31, 2019 (in thousands) | | :----- | :---------------------------- | :------------------------------- | | Working capital | $118,181 | $115,208 | | Cash and cash equivalents | $98,373 | $92,708 | | Total cash, cash equivalents and restricted cash | $98,440 | $93,117 | - Management believes **current cash is sufficient to fund projected operating requirements** for at least the next twelve months[34](index=34&type=chunk)[185](index=185&type=chunk) - The pending acquisition will be funded with approximately **$140.0 million of new transaction debt** and $10.0 million in cash[175](index=175&type=chunk)[185](index=185&type=chunk) - **COVID-19 impacts could necessitate raising additional capital** or incurring more debt, especially for future acquisitions[34](index=34&type=chunk)[176](index=176&type=chunk) [Cash Flows from Operating Activities](index=47&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Net Cash Provided by Operating Activities | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :----- | :----------------------------------------------- | :----------------------------------------------- | | Net cash provided by operating activities | $6,648 | $16,045 | - Q1 2020 operating cash flow was driven by **$17.8 million in non-cash items** and $4.2 million in changes in operating assets/liabilities, offset by a $15.5 million net loss[180](index=180&type=chunk) [Cash Flows from Investing Activities](index=47&type=section&id=Cash%20Flows%20from%20Investing%20Activities) Net Cash Used in Investing Activities | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :----- | :----------------------------------------------- | :----------------------------------------------- | | Net cash used in investing activities | $(1,035) | $(2,155) | - Both periods' investing activities consisted entirely of **purchases of property and equipment**[182](index=182&type=chunk) [Cash Flows from Financing Activities](index=47&type=section&id=Cash%20Flows%20from%20Financing%20Activities) Net Cash Provided by (Used in) Financing Activities | Metric | Three Months Ended March 31, 2020 (in thousands) | Three Months Ended March 31, 2019 (in thousands) | | :----- | :----------------------------------------------- | :----------------------------------------------- | | Net cash provided by (used in) financing activities | $13 | $(16,791) | - Q1 2020 financing cash flow was driven by **net proceeds from common stock issuance**[183](index=183&type=chunk) - Q1 2019 financing cash flow included **$15.0 million in debt prepayments** and $4.4 million in tax withholding for restricted stock units[184](index=184&type=chunk) [Warranties and Indemnifications](index=48&type=section&id=Warranties%20and%20Indemnifications) - The company provides representations affirming that its products do not infringe on third-party intellectual property rights and **indemnifies customers against such claims**[187](index=187&type=chunk) - The company's certificate of incorporation and bylaws require **indemnification of officers and directors**[187](index=187&type=chunk) [Off-Balance Sheet Arrangements](index=48&type=section&id=Off-Balance%20Sheet%20Arrangements) - As of March 31, 2020, the company was **not involved in any off-balance sheet arrangements**[188](index=188&type=chunk) [Contractual Obligations](index=48&type=section&id=Contractual%20Obligations) Contractual Obligations | Contractual Obligations (March 31, 2020) | Total (in thousands) | Less than 1 year (in thousands) | 1-3 years (in thousands) | 3-5 years (in thousands) | | :--------------------------------------- | :------------------- | :------------------------------ | :----------------------- | :----------------------- | | Long-term debt obligations | $212,000 | — | — | $212,000 | | Operating lease obligations | $13,696 | $3,989 | $8,692 | $1,015 | | Inventory purchase obligations | $22,252 | $22,252 | — | — | | Other obligations | $5,827 | $2,985 | $2,395 | $447 | | Total | $253,775 | $29,226 | $11,087 | $213,462 | - **Total contractual obligations increased by $3.9 million to $253.8 million** as of March 31, 2020, primarily due to increased inventory orders[192](index=192&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are foreign currency and interest rates, managed via USD-denominated agreements and an interest rate swap [Foreign Currency Risk](index=49&type=section&id=Foreign%20Currency%20Risk) - The company has **limited exposure to foreign currency exchange rates** as international agreements are mostly denominated in United States dollars[194](index=194&type=chunk) - A hypothetical **100 basis point change** in foreign currency exchange rates would result in an approximate **$0.3 million change** to translation gain/loss[194](index=194&type=chunk) [Interest Rate Risk](index=49&type=section&id=Interest%20Rate%20Risk) - The company has **$212.0 million in aggregate borrowings** under its Initial Term Loan, which bears variable interest[195](index=195&type=chunk) - An interest rate swap **effectively fixes the interest rate at approximately 4.25%** on a substantial portion of the long-term debt through October 2020[195](index=195&type=chunk) - Due to recent significant decreases in interest rates, the company may **pay higher interest expense than market** for the duration of the swap[195](index=195&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2020, with no material changes in internal controls [Evaluation of Disclosure and Procedures](index=50&type=section&id=Evaluation%20of%20Disclosure%20and%20Procedures) - Management concluded that **disclosure controls and procedures were effective** as of March 31, 2020[198](index=198&type=chunk) - Disclosure controls and procedures are designed to provide **reasonable assurance**, not absolute assurance, of achieving control objectives[197](index=197&type=chunk) [Changes in Internal Control over Financial Reporting](index=50&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - **No changes in internal control over financial reporting** were identified during the fiscal quarter that materially affected, or are likely to materially affect, internal controls[199](index=199&type=chunk) PART II — OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company faces ordinary course litigation but believes no pending matters would have a material adverse effect on its financials - The company is subject to threats of litigation or actual litigation in the **ordinary course of business**[124](index=124&type=chunk)[202](index=202&type=chunk) - Management believes **no currently pending litigation matters would have a material effect** on the company's financial position, results of operations, or cash flows[124](index=124&type=chunk)[202](index=202&type=chunk) [ITEM 1A. RISK FACTORS](index=51&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks related to the Intel acquisition, COVID-19, competition, customer concentration, and supply chain reliance [Risks Relating to the Proposed Acquisition of the Home Gateway Platform Division of Intel Corporation](index=51&type=section&id=Risks%20Relating%20to%20the%20Proposed%20Acquisition%20of%20the%20Home%20Gateway%20Platform%20Division%20of%20Intel%20Corporation) - **Failure to successfully integrate** the acquired business and realize anticipated benefits could materially and adversely affect operating results[206](index=206&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) - The integration process is complex and time-consuming, with **additional challenges posed by COVID-19 restrictions** impacting employee retention[139](index=139&type=chunk)[209](index=209&type=chunk)[213](index=213&type=chunk) - Incurring approximately **$140.0 million of incremental debt** will increase interest obligations and impose covenants that could restrict strategic flexibility[215](index=215&type=chunk)[217](index=217&type=chunk) - **Business relationships may be disrupted** due to uncertainty surrounding the acquisition, potentially leading to customer switching or renegotiated terms[211](index=211&type=chunk)[212](index=212&type=chunk) [Risks Related to Our Business](index=56&type=section&id=Risks%20Related%20to%20Our%20Business) - The **COVID-19 pandemic could adversely affect the business** through decreased demand, supply constraints, and integration delays[137](index=137&type=chunk)[138](index=138&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk) - The company faces **intense competition** in the global semiconductor market, which could lead to price pressure and loss of market share[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk) - **Dependence on a limited number of customers** (top 10 accounted for 68% of Q1 2020 net revenue) poses risks of reduced orders or loss of business[135](index=135&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk) - **Failure to develop and introduce new products** on a timely basis could impair customer attraction and harm competitive position[245](index=245&type=chunk)[246](index=246&type=chunk)[249](index=249&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk) - **Reliance on a limited number of third-party foundries** and assembly/test contractors creates supply chain risks, including capacity shortages and disruptions[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk)[267](index=267&type=chunk)[268](index=268&type=chunk) - **Inability to protect intellectual property** or defend against infringement claims could lead to costly litigation or loss of significant rights[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk)[269](index=269&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk) - The business is subject to **various governmental regulations** and industry standards, with non-compliance potentially leading to significant expenses or penalties[318](index=318&type=chunk)[319](index=319&type=chunk)[320](index=320&type=chunk)[321](index=321&type=chunk)[322](index=322&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk) [Risks Relating to Our Common Stock](index=65&type=section&id=Risks%20Relating%20to%20Our%20Common%20Stock) - The **trading price of common stock could be highly volatile** due to fluctuations in financial condition, market conditions, and other factors[336](index=336&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk) - **Future sales of a substantial number of common shares** in the public market could depress the market price[340](index=340&type=chunk)[342](index=342&type=chunk) - The company **does not intend to pay cash dividends** for the foreseeable future, requiring investors to rely on stock price appreciation[343](index=343&type=chunk) - **Anti-takeover provisions** in charter documents and Delaware law could make an acquisition more difficult[332](index=332&type=chunk)[335](index=335&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=76&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales or repurchases of equity securities during the period [Recent Sales of Unregistered Securities](index=76&type=section&id=Recent%20Sales%20of%20Unregistered%20Securities) - No unregistered sales of equity securities were reported[344](index=344&type=chunk) [Recent Repurchases of Equity Securities](index=76&type=section&id=Recent%20Repurchases%20of%20Equity%20Securities) - No recent repurchases of equity securities were reported[345](index=345&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=76&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[346](index=346&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=77&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[347](index=347&type=chunk) [ITEM 5. OTHER INFORMATION](index=77&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - No other information was reported[348](index=348&type=chunk) [ITEM 6. EXHIBITS](index=78&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including acquisition and debt agreements, certifications, and XBRL documents Exhibit List | Exhibit Number | Exhibit Title | | :------------- | :------------ | | 2.1 | Asset Purchase Agreement, dated as of April 5, 2020, by and among MaxLinear, Inc., Intel Corporation, and MaxLinear Asia Singapore Private Limited. | | 10.1 | Debt Commitment Letter by and among MaxLinear, Inc., MUFG Union Bank, and Wells Fargo Bank, N.A. dated as of April 5, 2020. | | 31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | 31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | 32.1(*) | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | 101.INS | XBRL Instance Document. | | 101.SCH | XBRL Taxonomy Extension Schema Document. | | 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | | 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | | 101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | | 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | | 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | [Signatures](index=79&type=section&id=Signatures) The report was signed on April 29, 2020, by the Chief Financial Officer and Chief Corporate Strategy Officer - The report was signed on April 29, 2020, by **Steven G. Litchfield, Chief Financial Officer and Chief Corporate Strategy Officer**[355](index=355&type=chunk)

MaxLinear Investor Presentation March 2020 Disclaimer 2 Forward-Looking Statements This presentation 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 and operating results forecasts as well as trends and growth opportunities in our product markets, our product development in ...

MaxLinear, Inc. (NASDAQ:MXL) Q4 2019 Earnings Conference Call February 5, 2020 4:30 PM ET Company Participants Brian Nugent - IR Dr. Kishore Seendripu - CEO Steve Litchfield - CFO and Chief Corporate Strategy Officer Conference Call Participants Quinn Bolton - Needham & Company Gary Mobley - Wells Fargo Tore Svanberg - Stifel Bill Peterson - JP Morgan Christopher Rolland - Susquehanna Financial Group Kamil Mielczarek - William Blair Tim Savageaux - Northland Capital Markets Operator Greetings, and welcome t ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From to Commission file number: 001-34666 MaxLinear, Inc. (Exact name of Registrant as specified in its charter) (State or other jurisdiction of incorporation or ...