Financial Data and Key Metrics - Q4 2023 revenue was 125.4million,down832 million, down 37% sequentially but flat year-over-year [25] - Broadband revenue for Q4 was 34million,flatsequentiallybutdown6619 million, up 26% sequentially but down 82% year-over-year [45] - Industrial and multi-market revenue was 41millioninQ4,up13110.3 million, including 19.5millioninstock−basedcompensationandperformance−basedequityaccruals,10.6 million in restructuring costs, and 1.8millioninacquisitionintegrationcosts[26]−Q4cashflowusedinoperatingactivitieswas16.6 million, with 188millionincash,cashequivalents,andrestrictedcashattheendofQ4[48]BusinessLinePerformance−Infrastructurebusinessisexpectedtogrowtoanannualizedrevenuerunrateofseveralhundredmilliondollarsoverthenextthreeyears[8]−PantherIIISerieshardwarestorageacceleratorsareanewgrowthdriverwithintheinfrastructuresegment,targetingenterpriseall−flash−arrayandhybridstoragesystems[10]−Ethernetconnectivitybusinessisexpectedtoreach100 million over the next 18-24 months, driven by new Octal 2.5-gigabit Ethernet PHY and switch products [40][41] - Fiber PON revenue was approximately 50millionin2023,withexpectationstomorethandoubleoverthenexttwoyears[42]−Wi−Fi7solutionsareexpectedtodrivesignificantASPgrowthandhigherattachratesinbroadbandaccessplatforms,withinitialrolloutsexpectedlaterin2024[23]MarketPerformance−High−speedopticaldatacenterinfrastructuremarketisexpectedtogeneratetensofmillionsofdollarsinrevenuein2024,withproductionrampsinthesecondhalfoftheyeardrivinggrowthin2025[17]−Wirelessinfrastructureisexpectedtobenefitfromtheglobalrolloutofmillimeterwave,microwave,andhybridbackhaultechnologies,withstrongdemandanticipatedin2025[38]−Broadbandandconnectivitymarketsarefacinginventoryheadwinds,withrecoveryexpectedin2025asinventoryrationalizationconcludes[44]StrategicDirectionandIndustryCompetition−ThecompanyisfocusedonproductinnovationacrossopticalWi−Fi,fiberbroadbandaccessgateways,Ethernet,andwirelessinfrastructure,withnewproductsalreadyinthemarketandgainingcustomertraction[1][24]−Thecompanyisleveragingits5−nanometerCMOSKeystone800−gigabitPAM4DSPfamilytodifferentiateinthehigh−speedopticaldatacentermarket[17]−ThecompanyisexpandingitsaddressablemarketinEthernetconnectivityby300 million, targeting enterprise and small-to-medium business switch markets [40] Management Commentary on Operating Environment and Future Outlook - Management is optimistic about the infrastructure business, expecting strong growth in 2024 and beyond [8] - The company expects market headwinds in broadband and connectivity to turn into tailwinds as customer inventory rationalization concludes [44] - Management highlighted the importance of new product cycles in driving revenue growth, particularly in optical, Ethernet, and storage accelerators [37] Other Important Information - The company expects Q1 2024 revenue to be between 85millionand105 million, with all four end markets expected to decline sequentially [28] - Q1 2024 GAAP gross margin is expected to be between 50.0% and 54.0%, while non-GAAP gross margin is expected to be between 59.5% and 62.5% [28] - Q1 2024 GAAP operating expenses are expected to be between 115millionand125 million, while non-GAAP operating expenses are expected to be between 72millionand78 million [49] Q&A Session Summary Question: Cyclical vs Secular Trends in Business [31] - Management could not break down the cyclical vs secular components but noted that infrastructure is performing well, while broadband and connectivity face inventory challenges [32] Question: Impact of Infrastructure Bill on CapEx Spending [34] - Management acknowledged that some customers are delaying CapEx spending to take advantage of future subsidies, which may push recovery by two to three quarters [35][36] Question: Ethernet Design-Wins and Revenue Potential [61] - Management expects the Ethernet business to reach 100millionoverthenext18−24months,drivenbyuniqueofferingsandastrongdesign−winpipeline[62]Question:InventoryLevelsandRecoveryTimeline[73]−ManagementexpectsinventoryrationalizationtocontinueintoQ32024,withrecoverylikelyin2025[76][78]Question:OpticalPAM4DSPMarketOpportunity[103]−ManagementexpectstheopticalPAM4DSPmarkettoreach1.5 billion in three years, with the company targeting 20-25% market share [141] Question: Long-Term Revenue Normalization [105] - Management expects the company to return to a $1 billion revenue run rate in the next two to three years, driven by new product cycles and recovery from inventory headwinds [109] Question: Gross Margin Impact from Infrastructure Growth [134] - Management expects gross margins to improve as infrastructure becomes a larger part of the business, with a target of mid-60% gross margins [135]
MaxLinear(MXL)2024-02-01 03:24