MaxLinear, Inc

Greetings and welcome to the MaxLinear third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. Question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Leslie Green. Thank you. You may begin.

Thank you, Julian, and good afternoon, everyone, and thank you for joining us on today's conference call to discuss Max Lanier's third quarter 2024 financial results. Today's call is being hosted by Dr. Kishore Sundripu, CEO, and Steve Litchfield, Chief Financial Officer and Chief Corporate Strategy Officer. After our premier comments, we will take questions. Our comments today include forward-looking statements within the meaning of applicable securities laws, including statements relating to our guidance for the fourth quarter of 2024, including revenue, gap and non-gap gross margin, gap and non-gap operating expenses, gap and non-gap interest in other expense, and gap and non-gap diluted share count. In addition, we will make forward-looking statements relating to trends, opportunities, execution of our business plan and potential growth and uncertainties in various product and geographic markets, including without limitation statements concerning future financial and operating results, opportunities for revenue and market share across our target markets, new products, including the timing of production and launches of such products, demand for and adoption of certain technologies, and our total addressable market. These forward-looking statements involve substantial risk and uncertainties, including risks outlined in our risk factors section of our recent SEC filings, including our Form 10-Q for the quarter ended September 30, 2024, which we filed today. Any forward-looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward-looking statements. The third quarter 2024 earnings release is available in the investor relations section of our website at maxlinear.com. In addition, we report certain historical financial metrics, including but not limited to gross margin, operating margin, operating expenses, and interest and other expense on a both GAAP and non-GAAP basis. We encourage investors to review detailed reconciliation of our GAAP and non-GAAP presentations and the press release available on our website. We do not provide a reconciliation of non-GAAP guidance for future periods, because of the inherent uncertainty associated with our ability to project certain future changes, including stock-based compensation and its related tax effects, as well as potential impairments. Non-GAAP financial measures are discussed today are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures. We are providing this information because management believes it is useful to investors as it reflects how management measures our business. Lastly, this call is also being webcast, and replay will be available on our website for two weeks. And now let me turn the call over to Dr. Kishore Sindhipu, CEO of Max Lineo. Kishore.

Thank you, Leslie, and good afternoon, everyone. Our Q3 results were slightly above the midpoint of our guidance at $81.1 million in revenue, and non-GAAP gross margin was 58.7%. We have seen meaningful improvements in our customer order rates for several quarters, along with expedites and orders placed within lead times. These are early signs of recovery, and combined with new product traction, we are feeling confident that we can achieve sequential improvement in our revenues in the coming quarters. Q3 was also a very active quarter for us, as we demonstrated new technology and products at several industry events. In July, at The Flash Memory Summit, we showcased our partnership with AMD for Panther 3, our hardware accelerated storage compression and encryption product, targeting enterprise storage and compute server applications. At ECOC, along with O-Net, we demonstrated the industry's by far lowest power 800 gigabit DR8 optical transceiver solution, consuming less than 12 watts for data center applications. And recently, at Network X Summit, we announced Max AI, a use case-aware native machine language technology framework integrated into our AnyVAN broadband access and connectivity platform solution for service providers. Additionally, in the quarter, we were delighted to receive Best Emerging Supplier of the Year Award from Cisco. Looking at our key markets... In infrastructure, the exponential growth in AI workloads continues to drive massive design activity and on high-speed optical data center connectivity. We are excited that our product shipment volume run rate is now greater than 1 million units per year across several direct customers, including our Q3 ramp at a U.S. data center player. We are seeing continued progress on initial qualification testing for 800-gigabit transceivers and active electrical cables at several large data center customers. More broadly, across the industry, 800 gigabit PAM4 Ethernet adoption is starting to ramp, even as 400 gigabit demand continues to accelerate. The superior power and performance of our Keystone high-speed optical PAM4 products strongly position us for current opportunities. And we are highly competitive with our differentiated Rushmore family of 200 gigabit per lane, BAM-4 DSPs for early market adopters moving to 1.6 terabit interconnections. Moving to 5D wireless infrastructure, we are making significant customer inroads with our millimeter and microwave backhaul modem and RF transceiver products as the only full-system merchant multiband radio solution in the world. With increasing mobile usage and new functionality such as AI, our hybrid microwave and millimeter wave backhaul technologies are required to support increasing transport data rates. We believe we are positioned strongly for content growth and revenue expansion as service provider cap expense is expected to improve in 2025 and 5G access network upgrades pick up pace globally. Also, within our infrastructure revenues, our Panther 3 series hardware storage accelerators are providing exciting incremental growth opportunities. The need for AI at the edge as well as growing security considerations are resulting in a shift towards enterprise storage with all flash array and hybrid storage enterprise application systems. Panther is also gaining traction in compute subsystems for usage across servers as well as data center storage customers. Our Panther product is strongly positioned for this macro 10, and we have multiple design means and enterprise OEM customers and wires across major geographies. In Ethernet connectivity, MaxLinia is one of the broadest and most competitive portfolios of 2.5 gigabit Ethernet switch and 5 products for the enterprise and small and medium business switch markets, where we offer a strong value proposition for the upgrade from 1 gigabit per second legacy data rates to to 2.5 gigabits per second using existing CatFi cabling. Our tier one North American enterprise OEM customer is expected to ramp to production in 2025 and contribute to significant Ethernet revenue growth over the coming years. In addition, we are seeing widespread interest from next generation broadband gateways and routers. In total, we believe we could reach $100 million run rate over the next 24 months. Moving to broadband and Wi-Fi connectivity, we are focused on PON for new broadband time growth in addition to our existing cable MSO data offering, including the latest DOCSIS 4.0 solution. We are excited by the design win traction for our PON platform based on our single-chip integrated fiber PON and 10-gigabit processor gateway SOC and tri-band Wi-Fi 7 single-chip solution. We have seen continued momentum with design wins and promising ongoing engagements, including traction in the second tier of our North American carrier, which we believe can become a major opportunity for 2025 and 2026. As mentioned before, at NetworkX, we were pleased to announce Max AI, a user-aware native machine learning technology framework integrated into our AnyVAN solutions. Max AI is designed to enhance network performance, security, issue triage and diagnostics, as well as improving the user connectivity experience. in multi-user applications like AR, VR, video conferencing, and multiplayer gaming. We believe Max AI further strengthens our competitive position in this market. In conclusion, multiple factors give us confidence that we are well positioned to resume growth in Q4 and 2025. Following three years of innovative product development, we are gaining traction with new products in high-value markets. including optical data center interconnect, enterprise Ethernet and storage accelerators, 5G wireless infrastructure, multi-gigabit PON broadband access, and Wi-Fi connectivity. These products not only open significant new target addressable market, but are poised to drive a sustained cycle of revenue growth over the next several years, creating enhanced value for our customers and shareholders. With that, let me turn the call over to Steve Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer. Steve?