MaxLinear Conference Call Summary Company Overview - **Company**: MaxLinear (NasdaqGS:MXL) - **Date**: March 11, 2026 - **Key Speaker**: Steve Litchfield, CFO and Chief Strategy Officer Industry Insights Infrastructure Business - MaxLinear has been transitioning to an infrastructure-driven business model, focusing on optical storage and wireless infrastructure over the past seven years [5][6] - The infrastructure segment grew approximately 30% in 2025 and is projected to grow over 60% in 2026, driven by new product launches and design wins [6][12] Broadband Market - The broadband segment experienced a 70% growth last year, with expectations of a softer start in 2026 due to seasonality and the transition to DOCSIS 4.0 [10][48] - Significant capital expenditures (CapEx) are occurring in the telco sector, with upgrades in cable markets expected to contribute to growth in the latter half of 2026 [10][49] - The ASP (Average Selling Price) for DOCSIS upgrades is anticipated to increase by approximately 40% [50] Data Center and Storage Solutions - The PAM4 DSP market is a key growth driver, with revenues expected to reach between $110 million and $130 million in 2026, primarily from new market share [13][14] - The Rushmore 1.6T product is expected to generate initial revenues in late 2026, with a larger ramp in 2027 [15][18] - The Panther storage accelerator is gaining traction, with expected revenues of around $40 million in 2026, potentially doubling in 2027 [40][43] Connectivity Trends - Connectivity, comprising roughly 17% of the business, is expected to grow over 20% in 2026, driven by Wi-Fi 7 upgrades and Ethernet market expansion [51][52] Financial Performance - MaxLinear targets gross margins of 65% and operating margins of over 35%, with current margins at 60% and 16% respectively [54][56] - The company has initiated a $75 million share repurchase program, purchasing $20 million in the last quarter, signaling confidence in the business outlook [58][59] Key Takeaways - MaxLinear is positioned for significant growth in the infrastructure and broadband markets, with a strong focus on new product development and market share expansion [62] - The company emphasizes the importance of a diverse product portfolio to penetrate the data center market effectively [37][38] - The management is optimistic about achieving higher gross and operating margins as the business scales and product mix shifts towards higher-margin infrastructure solutions [56][57]

Semtech Conference Call Summary Company Overview - **Company**: Semtech Corporation (NasdaqGS: SMTC) - **Industry**: Semiconductor, specifically focusing on optical transceivers and data center solutions Key Points and Arguments Acquisition Announcement - Semtech announced the acquisition of a semiconductor laser company specializing in Indium Phosphide-based lasers, enhancing their capabilities in optical transceivers and modules for data centers and DCI applications [2][4] Expansion into Optical Technologies - The acquisition allows Semtech to strengthen its position in the optical transceiver market, where demand for high bandwidth solutions is increasing, particularly for 800G and 1.6T optical transceivers [7][22] - The new technology provides wall-plug efficiency exceeding 40%, positioning Semtech as a leader in high-efficiency laser technology [5] Data Center Business Insights - Semtech holds a 50% market share in single-mode optical transceivers, with a strong demand forecast for 800G solutions [7] - The introduction of low power optical (LPO) solutions is expected to drive growth, with a focus on high power efficiency and low power consumption [8][9] Supply Chain and Capacity Management - The supply chain for optical components is currently tight, but Semtech has proactively engaged with customers to ensure capacity availability for the next 12-18 months [14][18] - The company has expanded its co-planning process with customers from 1 to 7, allowing for better forecasting and capacity management [18] New Product Developments - The ACC (Active Copper Cable) technology is gaining traction, offering significant power savings (90% less power consumption compared to DAC) and is expected to be integrated into multiple applications [31][36] - The CopperEdge technology is also being developed to enhance signal reach on PCBs, with expectations for substantial revenue contributions in the coming year [40] LoRa Business Performance - The LoRa business continues to perform strongly, with applications in smart metering, asset tracking, and emerging uses in drone technology, projecting a growth rate of 15%-20% year-over-year [91] - The introduction of Gen4 multi-protocol capabilities is expected to expand application use cases significantly [92][96] High-End Consumer Market - Semtech is experiencing growth in the high-end consumer market, particularly in transient voltage suppression devices and sensing technologies, with a focus on expanding their product portfolio through strategic acquisitions [101][102] Divestiture Plans - The company is in the process of divesting its cellular module business, which has a lower gross margin (20%) and does not align with Semtech's core focus [117][118] - Post-divestiture, Semtech aims to achieve gross margins approaching 60%, with a focus on high-margin growth areas [121] Future Outlook - Semtech is optimistic about its growth trajectory, focusing on expanding its core business areas and enhancing its R&D investments to drive innovation [130][131] - The company aims to position itself as a leading solution provider in the semiconductor industry, particularly in data center technologies [130] Additional Important Insights - The transition from copper to optical solutions is ongoing, but copper remains a critical medium for short distances, with Semtech prepared to support both technologies [55][66] - The company emphasizes the importance of strong relationships with hyperscalers, which are crucial for driving future projects and innovations [132][134]

Financial Data and Key Metrics Changes - Marvell reported record revenue of $2.075 billion for Q3 FY2026, reflecting a 3% sequential increase and a 37% year-over-year growth [6][39] - Non-GAAP earnings per share were $0.76, exceeding guidance by $0.02, with a year-over-year growth of 77% [6][40] - GAAP gross margin was 51.6%, while non-GAAP gross margin was 59.7%, showing a sequential increase of 30 basis points [39] - Cash flow from operations reached a record $582 million, growing approximately $121 million from the prior quarter [41] Business Line Data and Key Metrics Changes - Data center revenue was $1.52 billion, representing 2% sequential growth and 38% year-over-year growth, contributing 73% of total revenue [19][39] - Communications and other end market revenue was $557 million, growing 8% sequentially and 34% year-over-year [33][39] - Excluding the automotive Ethernet business, communications revenue growth would be approximately 20% sequentially and 50% year-over-year [33] Market Data and Key Metrics Changes - The data center market is expected to grow year-over-year by more than 25% in FY2027, driven by increased demand for switching products and custom solutions [19][36] - The communications end market is projected to grow approximately 25% year-over-year in Q4 FY2026, with an annualized revenue run rate of about $1 billion [34][39] Company Strategy and Development Direction - Marvell announced the acquisition of Celestial AI, aimed at enhancing its data center portfolio with disruptive photonic technology [8][9] - The company is focusing on data center growth, having divested its automotive Ethernet business and made several strategic acquisitions since 2019 [9][10] - Marvell anticipates significant revenue contributions from Celestial AI starting in the second half of FY2028, with a forecast of reaching a $500 million annualized run rate by Q4 FY2028 [16][44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in the data center business, with expectations of strong demand for AI-related infrastructure [17][36] - The company expects to see a strong finish to FY2026 and anticipates revenue growth to accelerate in FY2027 and FY2028 [36][37] - Management highlighted the importance of partnerships with hyperscalers and the expected increase in Cloud CapEx, which is projected to grow over 30% next year [17][36] Other Important Information - Marvell executed a $1 billion accelerated stock repurchase program and repurchased $300 million of stock through its ongoing buyback program [35][41] - The company plans to fund the acquisition of Celestial AI through a combination of stock and cash on hand, without taking on additional debt [44] Q&A Session Summary Question: Revenue expectations for next year - Management confirmed that the implied revenue target for next year is around $10 billion, based on organic growth without M&A contributions [48][49] Question: Update on sub-3-nanometer design win pipeline - Management indicated strong visibility on the transition to next-generation products, with several programs in the pipeline for 2-nanometer designs [58][60] Question: Revenue targets for Celestial AI - Management clarified that the $500 million and $1 billion targets for Celestial AI include all potential revenue streams, primarily driven by the PF chiplet products [65][66] Question: Breadth of revenue stream from Celestial AI - Management noted that while there is strong engagement across the industry, initial revenue will likely come from a few large customers, including a tier-one hyperscaler [70][71]

Financial Data and Key Metrics Changes - For the third quarter of fiscal 2026, Marvell reported record revenue of $2.075 billion, reflecting a 3% sequential increase and a 37% year-over-year growth [6][39] - Non-GAAP earnings per share were $0.76, exceeding guidance by $0.02, with a year-over-year growth of 77% [6][40] - GAAP gross margin was 51.6%, while non-GAAP gross margin was 59.7%, an increase of 30 basis points sequentially [39][40] - Cash flow from operations reached a record $582 million, growing approximately $121 million from the prior quarter [41] Business Line Data and Key Metrics Changes - Data center revenue was $1.52 billion, representing 2% sequential growth and 38% year-over-year growth, contributing 73% of total revenue [19][39] - Communications and other end market revenue was $557 million, growing 8% sequentially and 34% year-over-year [33][39] - Excluding the divested automotive Ethernet business, communications revenue growth would be approximately 20% sequentially and 50% year-over-year [33] Market Data and Key Metrics Changes - The company expects total revenue for the fourth quarter to be around $2.2 billion, representing a 6% sequential and 21% year-over-year growth [35][42] - Data center revenue is projected to grow year-over-year by more than 25% in fiscal 2027, while communications and other end market is expected to grow by 10% [19][34] Company Strategy and Development Direction - Marvell announced the acquisition of Celestial AI, aimed at enhancing its data center portfolio with disruptive photonic fabric technology [8][9] - The acquisition is expected to close in the first quarter of next year and is anticipated to generate meaningful revenue contributions starting in the second half of fiscal 2028 [16][44] - The company is focusing on data center growth, divesting non-core businesses, and investing in high-growth areas such as AI and optical interconnects [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in the data center market, driven by strong demand for AI and cloud infrastructure [17][36] - The outlook for fiscal 2027 is stronger than previously expected, with anticipated growth in interconnect and custom businesses [17][19] - Management highlighted the importance of strategic acquisitions and product innovation in driving future growth [37][44] Other Important Information - Marvell executed a $1 billion accelerated stock repurchase program and repurchased $300 million of stock through its ongoing buyback program [35][41] - The company has a strong balance sheet with cash and cash equivalents of $2.7 billion, reflecting robust operating cash flow [41] Q&A Session Summary Question: Revenue expectations for next year - Analyst inquired if the implied revenue for next year is around $10 billion and how it aligns with long-term targets [48] - Management confirmed the $10 billion target is motivational and based on organic growth without M&A contributions [49] Question: Update on sub-3-nanometer design win pipeline - Analyst asked for an update on the design win pipeline for sub-3-nanometer products [58] - Management indicated strong visibility and execution on design programs, with significant product ramps expected [60] Question: Revenue targets for Celestial AI - Analyst questioned if the $500 million and $1 billion targets for Celestial AI include PFLink products and potential memory businesses [65] - Management clarified that the targets encompass all of Celestial AI's activities, with initial revenue driven by PF chiplets [66] Question: Breadth of revenue stream from Celestial AI - Analyst asked about the customer base for Celestial AI's revenue ramp [67] - Management noted strong engagement across the industry, with a tier-one hyperscaler as a key partner [68] Question: Growth rate for custom business - Analyst sought clarification on the growth rate for the custom business in fiscal 2027 [75] - Management indicated expectations for at least 20% growth next year, with potential for higher rates in subsequent years [75]

Financial Data and Key Metrics Changes - Marvell reported record revenue of $2.075 billion for Q3 2026, reflecting a 3% sequential increase and a 37% year-over-year growth [5][35] - Non-GAAP earnings per share were $0.76, exceeding guidance by $0.02, with year-over-year growth of 77% [5][36] - GAAP gross margin was 51.6%, while non-GAAP gross margin was 59.7%, an increase of 30 basis points sequentially [35][36] - Cash flow from operations reached a record $582 million, growing approximately $121 million from the prior quarter [36] Business Line Data and Key Metrics Changes - Data center revenue was $1.52 billion, representing 2% sequential growth and 38% year-over-year growth, contributing 73% of total revenue [17][35] - Communications and other end market revenue was $557 million, growing 8% sequentially and 34% year-over-year [29][35] - Excluding the automotive Ethernet business, communications revenue growth would be approximately 20% sequentially and 50% year-over-year [29] Market Data and Key Metrics Changes - The data center market is expected to grow year-over-year by more than 25% next fiscal year, driven by increased demand for switching products [17] - The communications end market is expected to grow in line with enterprise IT spending, with an annualized revenue run rate of approximately $1 billion in Q4 [30] Company Strategy and Development Direction - Marvell announced the acquisition of Celestial AI, aimed at enhancing its data center portfolio and capitalizing on the scale-up interconnect market [6][14] - The company is focusing on data center growth, having divested its automotive Ethernet business and made several strategic acquisitions since 2019 [6][7] - The acquisition of Celestial AI is expected to close in Q1 of the next fiscal year and is projected to contribute significantly to revenue starting in the second half of fiscal 2028 [14][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth in the data center business, with strong demand signals and bookings across the portfolio [32][33] - The company anticipates a strong fiscal 2027, with total revenue forecasted at $2.2 billion for Q4 2026, representing 6% sequential and 21% year-over-year growth [31][38] - Management highlighted the importance of AI in reshaping data center architecture and the significant opportunities in the optical interconnect market [9][10] Other Important Information - Marvell executed a $1 billion accelerated stock repurchase program and repurchased $300 million of stock through its ongoing buyback program [31][36] - The company expects to continue returning capital to shareholders while funding the acquisition of Celestial AI through a combination of stock and cash [41][42] Q&A Session All Questions and Answers Question: Revenue expectations for next year - Management indicated that the revenue target for next year is around $10 billion, based on organic growth without M&A contributions [43][44] Question: Update on sub-3-nanometer design win pipeline - Management confirmed strong visibility on the transition to next-generation products, with several programs in the pipeline for 2-nanometer designs [50][52] Question: Revenue targets for Celestial AI - The revenue targets for Celestial AI include contributions from the PF chiplet and other potential businesses, with a focus on broad engagement across the industry [53][54] Question: Diversification of revenue stream from Celestial AI - Management noted that while there is strong engagement with a tier-one hyperscaler, the revenue stream is expected to diversify over time as the product enters volume production [55][56] Question: Growth rate for custom business - Management confirmed a base case growth rate of at least 20% for the custom business next year, with potential for higher growth depending on program success [58][59]