MaxLinear, Inc. Common Stock 2026 Q3 Earnings Call

Kishore. Thank you, Leslie, and good afternoon, everyone.

As the ongoing AI infrastructure build-out momentum continues and as AI data center clusters continue to scale to unprecedented size and bandwidth requirements, we believe MaxLinear is emerging as a key enabler of next-generation connectivity technologies. Demand for our optical data center connectivity and infrastructure solutions continues to strengthen, and we believe MaxLinear is in the early innings of a multiyear AI-driven growth cycle. Against this backdrop, our AI data center business continues to outperform our expectations. In Q3, overall revenue grew 72% year-on-year, driven by accelerating adoption of our optical PAM4 products, expanding customer engagements, and strong execution across our infrastructure portfolio. Infrastructure as a category grew 210% year-on-year, and which is now larger than the rest of our revenue categories combined.

Reflecting this momentum, we are raising our 2026 optical data center revenue outlook to $250 million-$270 million. With strong visibility in bookings extending beyond 2027, we expect another significant step-up in revenue next year. Keystone, our 5nm CMOS 100 Gigabit per lane PAM4 SerDes family, continues to ramp rapidly in high-volume production across multiple hyperscalers. Its industry-leading power efficiency and performance position MaxLinear at the center of today's 800G optical infrastructure deployments. Looking ahead, we are seeing accelerating customer activity around Rushmore-based 200 Gigabit per lane PAM4 1.6 Terabit architectures, where qualification programs are advancing toward expected production deployments in 2027. Rushmore is building on Keystone's foundational success and is also expected to become a major multiyear growth driver.

Big Sky, our family of next-generation 400 Gigabit per lane 3.2 Terabit optical and electrical PAM4 interconnect technologies, will further catalyze growth as data center network speeds continue to accelerate beyond 200 Gigabit per lane. Beyond PAM4 SerDes optics, we continue to broaden our AI infrastructure footprint across optical and electrical interconnects, retimers, control plane connectivity, telemetry, and power management. This strong expansion of content inside the AI data center stack positions MaxLinear to participate across multiple layers of future AI data center architectures. Already, Annapurna, our 1.6 Terabit electrical interconnect product family, addresses 1.6 Terabit active electrical cable and onboard retimer applications for AI scale-up. Washington, our 200 Gigabit per lane TIA platform, not only supports PAM4 DSP-based optics, but also non-DSP-based linear pluggable optics consisting of LRO, LPO, NPO, and CPO solutions.

We expect initial Washington and Annapurna revenues in 2027, followed by a stronger volume ramp in 2028. We are also excited about our AI RackCommander portfolio, consisting of USB, PCIE, UART connectivity bridges used for telemetry, power management and protection solutions for rack scale AI infrastructure. RackCommander expands our role beyond data movement and into the control plane of the AI data center. Customers require advanced telemetry monitoring, connectivity, and power control capabilities to maximize performance and efficiency, which is critical for infrastructure management. We believe this represents a significant long-term growth opportunity while expanding our strategic footprint. Additionally, our XGS-PON hyperscale data center design win, which serves as the control plane connectivity network across multiple data centers, has completed qualification. Supported by secured backlog, we expect first deployments of this inter data center control plane solution to start in 2027.

Separately, Panther, our storage accelerator platform, continues to gain momentum as customers seek more efficient AI infrastructure. By significantly increasing effective storage utilization and unlocking KV cache capacity for agentic AI applications, Panther enables customers to support larger AI inference workloads without increasing storage infrastructure spending. We expect Panther revenue to roughly double this year, with potential for another meaningful increase in 2027. While AI data center remains our primary growth driver, we expect edge AI-driven upgrades to also drive growth in 2027 and 2028 for our wireless infrastructure and broadband access and connectivity solutions. These include Sierra single chip 5G RAN remote radio unit solution, our millimeter wave, microwave backhaul RF and modem SoCs, and XGS-PON fiber broadband home gateways.

Both broadband and connectivity categories delivered sequential revenue growth in Q3, driven by large-scale deployments of fiber PON and Wi-Fi 7 gateways at major tier 1 service providers in North America and Europe. In closing, accelerating hyperscale deployments, increasing optical connectivity content, new product ramps, and broader participation across the AI infrastructure stack give us confidence that MaxLinear is still in the early stages of a significant growth cycle. Our strategy is focused on strengthening our leadership in high-speed data center connectivity, expanding into adjacent infrastructure markets, and increasing our content share and strategic relevance with hyperscale customers. With strong customer momentum, great backlog visibility, and a differentiated technology portfolio, we believe MaxLinear is well positioned to deliver sustained growth and long-term shareholder value. With that, let me turn the call over to Steve Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer.

Steve? Thanks, Kishore. Total revenue for the third quarter was $218.1 million, up 29% from $168.8 million in the previous quarter and up 72% from $126.5 million in the third quarter of 2025.

Infrastructure revenue for the third quarter of 2026 grew to approximately $125 million. Broadband revenue grew to approximately $53 million. Connectivity revenue was approximately $25 million. Our industrial multi-market revenue was approximately $15 million. GAAP and non-GAAP gross margin for the third quarter were 58.7% and 60% of revenue. The delta between GAAP and non-GAAP gross margin in the third quarter was primarily driven by $2.5 million of acquisition-related intangible asset amortization. Third quarter GAAP operating expenses were $97.8 million and non-GAAP operating expenses were $66.5 million. The delta between GAAP and non-GAAP operating expenses were primarily due to stock-based compensation and performance-based equity accruals of $28.8 million combined and acquisition-related cost and other costs of $2.3 million.