MaxLinear(MXL) - 2024 Q2 - Quarterly Results

MaxLinear, Inc. Second Quarter 2024 Financial Results MaxLinear reported its second quarter 2024 financial results, detailing Q2 performance, management's strategic commentary, and providing guidance for the third quarter Second Quarter 2024 Financial Highlights MaxLinear reported Q2 2024 net revenue of $92.0 million, a 50% year-over-year decrease, with GAAP diluted loss per share of $0.47 and non-GAAP loss of $0.25 Q2 2024 Key Financial Metrics (GAAP) | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Net Revenue (Millions USD) | $92.0 | $95.3 | $183.9 | | Gross Margin | 54.6% | 51.7% | 55.9% | | Loss from Operations (Millions USD) | ($40.8) | ($74.6) | ($5.9) | | Diluted Loss per Share (USD) | ($0.47) | ($0.88) | ($0.05) | Q2 2024 Key Financial Metrics (Non-GAAP) | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Gross Margin | 60.2% | 60.6% | 61.0% | | Loss from Operations (% of revenue) | (21%) | (18%) | 16% (Income) | | Diluted Loss per Share (USD) | ($0.25) | ($0.21) | $0.34 (Earnings) | - Net cash flow used in operating activities was $2.7 million, a sharp contrast to the $30.6 million provided by operating activities in the year-ago quarter[11][28] Management Commentary Management expressed confidence in infrastructure market progress and new product traction in Ethernet, Wi-Fi 7, and fiber PON gateways - The company is confident in its progress in the infrastructure market with wireless and optical interconnect products, despite awaiting a broader broadband market recovery[7] - New products addressing additional total addressable market (TAM) in Ethernet, storage, Wi-Fi 7, and fiber PON gateways have strong customer traction and are expected to drive meaningful growth[7] - The strategic focus is on optimizing efforts around these new opportunities to maximize value for customers and shareholders[7] Third Quarter 2024 Business Outlook MaxLinear anticipates Q3 2024 net revenue between $70 million and $90 million, with non-GAAP gross margin of 57.0% to 60.0% Q3 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | Net Revenue (Millions USD) | $70 - $90 | | GAAP Gross Margin | 52.5% - 55.5% | | Non-GAAP Gross Margin | 57.0% - 60.0% | | GAAP Operating Expenses (Millions USD) | $102 - $108 | | Non-GAAP Operating Expenses (Millions USD) | $70 - $76 | | Diluted Share Count (Millions) | ~84.1 | Financial Statements This section presents MaxLinear's unaudited GAAP consolidated financial statements, including statements of operations, balance sheets, and cash flows Consolidated Statements of Operations MaxLinear reported a Q2 2024 net loss of $39.3 million, improving sequentially but declining year-over-year, with a six-month net loss of $111.6 million Quarterly Statement of Operations Highlights (in thousands) | Metric | Q2 2024 (Thousands USD) | Q1 2024 (Thousands USD) | Q2 2023 (Thousands USD) | | :--- | :--- | :--- | :--- | | Net Revenue | $91,990 | $95,269 | $183,938 | | Gross Profit | $50,186 | $49,268 | $102,873 | | Loss from Operations | ($40,820) | ($74,616) | ($5,937) | | Net Loss | ($39,266) | ($72,309) | ($4,351) | | Diluted Loss per Share (USD) | ($0.47) | ($0.88) | ($0.05) | Six-Month Statement of Operations Highlights (in thousands) | Metric | Six Months Ended June 30, 2024 (Thousands USD) | Six Months Ended June 30, 2023 (Thousands USD) | | :--- | :--- | :--- | | Net Revenue | $187,259 | $432,380 | | Gross Profit | $99,454 | $243,180 | | Loss from Operations | ($115,436) | $21,340 (Income) | | Net Loss | ($111,575) | $5,182 (Income) | | Diluted Loss per Share (USD) | ($1.35) | $0.06 (Income) | Condensed Consolidated Balance Sheets MaxLinear's total assets decreased to $973.2 million as of June 30, 2024, primarily due to reductions in cash, receivables, and inventory Balance Sheet Highlights (in thousands) | Metric | June 30, 2024 (Thousands USD) | March 31, 2024 (Thousands USD) | June 30, 2023 (Thousands USD) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $185,108 | $191,882 | $224,579 | | Total current assets | $397,581 | $444,679 | $554,491 | | Total assets | $973,197 | $1,030,625 | $1,161,480 | | Total current liabilities | $190,277 | $223,854 | $241,729 | | Stockholders' equity | $617,255 | $637,983 | $746,047 | Consolidated Statements of Cash Flows MaxLinear used $2.7 million in cash from operating activities in Q2 2024, a significant shift from prior periods, ending with $186.1 million in cash - Net cash used in operating activities was $2.7 million for Q2 2024, compared to net cash provided of $16.0 million in Q1 2024 and $30.6 million in Q2 2023[28] - For the six months ended June 30, 2024, net cash provided by operating activities was $13.3 million, a sharp decline from $72.7 million in the same period of 2023[54] - Cash, cash equivalents, and restricted cash decreased to $186.1 million at the end of Q2 2024 from $225.6 million at the end of Q2 2023[28][54] Reconciliation of GAAP to Non-GAAP Financial Measures This section provides a reconciliation of MaxLinear's GAAP financial results to non-GAAP measures, explaining the adjustments and their impact on performance metrics Explanation of Non-GAAP Measures MaxLinear uses non-GAAP measures to reflect core operating performance by excluding non-cash and one-time expenses for internal planning and benchmarking - Non-GAAP measures are used to supplement GAAP results by excluding certain non-cash and one-time expenses to better reflect core operating performance[18][41] - Key adjustments include stock-based compensation, performance-based equity, amortization of purchased intangible assets, acquisition and integration costs, impairment losses, and restructuring charges[19][20][41][43] Reconciliation of Non-GAAP Adjustments (in thousands) Q2 2024 GAAP net loss of $39.3 million reconciled to a non-GAAP net loss of $20.9 million, reflecting significant adjustments Quarterly GAAP to Non-GAAP Net Income (Loss) Reconciliation (in thousands) | Metric | Q2 2024 (Thousands USD) | Q1 2024 (Thousands USD) | Q2 2023 (Thousands USD) | | :--- | :--- | :--- | :--- | | GAAP Net Loss | ($39,266) | ($72,309) | ($4,351) | | Total Non-GAAP Adjustments (Pre-tax) | $21,523 | $57,668 | $35,758 | | Non-GAAP Net (Loss) Income | ($20,948) | ($17,403) | $27,899 | Six-Month GAAP to Non-GAAP Net Income (Loss) Reconciliation (in thousands) | Metric | Six Months Ended June 30, 2024 (Thousands USD) | Six Months Ended June 30, 2023 (Thousands USD) | | :--- | :--- | :--- | | GAAP Net (Loss) Income | ($111,575) | $5,182 | | Total Non-GAAP Adjustments (Pre-tax) | $79,191 | $77,724 | | Non-GAAP Net (Loss) Income | ($38,351) | $88,257 | Reconciliation as a Percentage of Net Revenue Q2 2024 non-GAAP gross margin was 60.2%, with non-GAAP loss from operations at 21.1% of revenue, indicating a year-over-year profitability decline Quarterly Reconciliation as a Percentage of Net Revenue | Metric (% of Net Revenue) | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | GAAP Gross Margin | 54.6% | 51.7% | 55.9% | | Non-GAAP Gross Margin | 60.2% | 60.6% | 61.0% | | GAAP Loss from Operations | (44.4)% | (78.3)% | (3.2)% | | Non-GAAP (Loss) Income from Operations | (21.1)% | (17.9)% | 16.2% | | GAAP Net Loss | (42.7)% | (75.9)% | (2.4)% | | Non-GAAP Net (Loss) Income | (22.8)% | (18.3)% | 15.2% | Six-Month Reconciliation as a Percentage of Net Revenue | Metric (% of Net Revenue) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | GAAP Gross Margin | 53.1% | 56.2% | | Non-GAAP Gross Margin | 60.4% | 60.6% | | GAAP (Loss) Income from Operations | (61.7)% | 4.9% | | Non-GAAP (Loss) Income from Operations | (19.4)% | 22.9% | | GAAP Net (Loss) Income | (59.6)% | 1.2% | | Non-GAAP Net (Loss) Income | (20.5)% | 20.4% | Other Information This section provides details on the conference call for Q2 2024 results and includes a cautionary note regarding forward-looking statements Conference Call Information MaxLinear held a conference call on July 24, 2024, to discuss Q2 financial results, with a webcast replay available - The Q2 2024 financial results conference call was held on July 24, 2024, at 1:30 p.m. Pacific Time[39] - A live webcast and an archived replay were made available on the investor relations section of the MaxLinear website[39] Cautionary Note Concerning Forward-Looking Statements The report contains forward-looking statements, with actual results potentially differing due to risks like competition, industry cycles, and the terminated Silicon Motion merger - The report contains forward-looking statements regarding future financial performance, including Q3 2024 guidance, and potential growth opportunities[40] - Key risks that could affect future results include the terminated merger with Silicon Motion, intense competition, the cyclical semiconductor industry, global economic conditions, and excess inventory in the channel[40] - The company disclaims any obligation to update forward-looking statements[40]