Yahoo Finance MaxLinear Inc (MXL) Q1 2024 Earnings Call Transcript Highlights: Navigating Through Market ...
Total Revenue: $95.3 million for Q1 2024.
Non-GAAP Gross Margin: 60.6%.
GAAP Gross Margin: 51.7%.
GAAP Operating Expenses: $123.9 million.
Non-GAAP Operating Expenses: $74.8 million.
GAAP and Non-GAAP Interest and Other Expense: $0.5 million and $0.6 million, respectively.
Operating Cash Flow: $16 million generated in Q1 2024.
Cash and Equivalents: Approximately $193 million at the end of Q1 2024.
Day Sales Outstanding: Approximately 121 days.
Inventory Turns: 0.9x.
Q2 Revenue Guidance: Expected to be between $90 million and $110 million.
Q2 GAAP Gross Margin Guidance: Expected to be between 52.5% and 56.5%.
Q2 Non-GAAP Gross Margin Guidance: Expected to be between 58.5% and 61.5%.
Q2 GAAP Operating Expenses Guidance: Expected to be between $103 million and $113 million.
Q2 Non-GAAP Operating Expenses Guidance: Expected to be between $72 million and $78 million.
Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you give us some sense, the revenue ramp this year exceeding now $30 million how concentrated or diversified is that $30 million is that over several module partners? Is it pretty concentrated with 1 or 2. And I guess more importantly, as you start to get into volume production in the second half of the year, what kind of growth could you be looking at in calendar '25, would that business double or more as you hit volume production for the full year on some of these design wins? A: (Kishore Seendripu, CEO) The revenue described as shifting our high end of the range for our forecast for this year is driven by more than 1 customers. Heading into 2025, many more customers will be launching into production while some will be maturing into a peak run rate based on how we exit Q4. We should see a multiplier effect of the revenues of 2024, adding it to '25 and '26.
Q: What gives you confidence that revenue will rebound sequentially or grow sequentially through the year? Is that based on design win ramps? Can you give us some sense what you're seeing in terms of bookings activity? Is backlog starting to build? Is visibility into the second half starting to extend? A: (Kishore Seendripu, CEO) We have been under-shipping the market throughput demand for a while now. As we look at the sell-through process of the product right now, it's very clear that the rate at which we're shipping is now fallen behind what the sell-through rate is in the channel. We feel optimistic that a process has started where we are going to develop the ability to now start shipping more and you're going to start seeing some equally brand developing between sell-through and sell-in revenues.
Q: The long-term infrastructure guide, the $300 million to $500 million was pretty interesting. When we get there, what does this look like in terms of components? Is the majority DSP in your estimate? Or how does it break down? A: (Kishore Seendripu, CEO) There are 3 major legs of growth vectors for our infrastructure revenue. Firstly, today, the revenue is about, give and take, let's say, it's at a $200 million run rate for the infrastructure revenues and it comprises primarily of our wireless infrastructure revenue and a little bit of infrastructure and Ethernet. And then if you now layer on top of that the optical products, which we talked about could be in the next 3 to 5 years, somewhere between $100 million to $300 million, depending on our market share.
Q: Do you now believe you have a good view in the inventory at various levels in the supply chain. Where do you think inventory in terms of subsegments are normalized or close to normal? And where do you think there's still work to be done? A: (Steven G. Litchfield, CFO) We continue to see improvements on the inventory side. Our biggest headwind have been broadband and connectivity. As we've stated, I think this is playing out more or less where we expected that we would still see some headwinds kind of through the first half of this year. I think that's still the case, but I think we're making good progress. We're really seeing channel inventory come down.
Q: Congratulations on the progress on the infrastructure side. So I do have questions there. But I want to start with the DSOs. So they're still quite elevated. Is this just purely linearity where customers are basically ordering really last minute or anything else going on there? A: (Steven G. Litchfield, CFO) The simple answer is yes. I mean, I think we continue to see linearity to be a challenge. And as much as that's a bad thing, you're also starting to see some encouraging signs there that I mentioned last quarter about some last-minute shipments and your -- this is where customers don't have great visibility. And at the very end, they recognize that they don't have the right products to be shipping. So we definitely continue to see that.
Q: I guess Kishore if you could just kind of talk about your focus on the data infrastructure side? And should we think that maybe there's other segments or portions of the business that maybe aren't as positive or maybe do not fit that as well going forward? Or is this really -- should we just consider this everything kind of growing and fitting into that bucket of data infrastructure as you go forward? A: (Kishore Seendripu, CEO) No, I think the buckets we're talking are pretty pure and clean. There is no part of the data center infrastructure that is not directly a PAM4 DSP related product in our portfolio. Typically, it is a PAM4 DSP, along with the TIA, we have the laser drivers fully integrated in our solutions. So it is a very clean fit to the PAM4 DSP addressable market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
