MaxLinear outlines $60M–$70M 2025 data center revenue target as new product ramps accelerate
Jul. 23, 2025 7:56 PM ET
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Earnings Call Insights: MaxLinear (MXL) Q2 2025
Management View- CEO Kishore Seendripu reported, "Our Q2 results not only reflect 13% sequential and 18% year-over-year growth in our business, but also point to a strong positive inflection in our business recovery and growth trajectory." He highlighted revenue of $109 million, exceeding the midpoint of guidance, a non-GAAP gross margin of 59.1%, and a meaningful reduction in operating expenses. He stated the company returned to non-GAAP profitability and generated positive free cash flow.
- Seendripu emphasized strong customer and product traction in high-speed data center optical interconnects, PON broadband access, WiFi, and Ethernet. He added, "We are on track to deliver $60 million to $70 million in revenue this year, primarily from our 800-gigabit 5-nanometer Keystone PAM4 DSP product family."
- He noted, "We have new design wins with our Sierra-based product with 2 major North American telecom providers launching Sierra-based macro base station RU products in Q3."
- In broadband and connectivity, Seendripu stated that both major North American carriers plan to ramp up fiber PON access build-outs, driving demand for MaxLinear’s solutions and supporting the upcoming launch of a new gateway SoC platform with a second major Tier 1 carrier.
- CFO Steven Litchfield reported, "Total revenue for the second quarter was $108.8 million, up 13% from $95.9 million in the previous quarter and up 18% from the $92 million in second quarter of 2024." He detailed revenue breakdowns by segment and noted non-GAAP gross margin at 59.1%.
Outlook- Litchfield stated, "We currently expect revenue in the third quarter of 2025 to be between $115 million and $135 million." He added, "We expect third quarter GAAP gross margin to be approximately 55% to 58% and non-GAAP gross margin to be in the range of 57.5% and 60.5% of revenue."
- Non-GAAP operating expenses for Q3 are expected to be in the range of $55 million to $61 million. The company expects all end markets to be up in the quarter, with strong performance anticipated in infrastructure and continued recovery in broadband and connectivity.
Financial Results- MaxLinear reported infrastructure revenue of approximately $35 million, broadband revenue of approximately $48 million, connectivity revenue of approximately $21 million, and industrial multi-market revenue of approximately $6 million.
- The company delivered positive net cash flow from operating activities of $10.5 million and exited Q2 with $110 million in cash, cash equivalents, and restricted cash.
- Day sales outstanding decreased to approximately 89 days, and inventory turns improved to 1.5x.
- GAAP loss from operations for Q2 was 22% and non-GAAP income from operations was 7% of net revenue. GAAP and non-GAAP interest and other expense were $6.1 million and $5.9 million, respectively, with $4 million attributed to foreign exchange costs.
Q&A- Tore Egil Svanberg, Stifel: Asked for segment performance granularity in Q3. Litchfield responded, "One of the biggest commitments that we've had here is infrastructure. I think that's the one that we continue to see nice performance, particularly in the back half of the year."
- Svanberg followed up on broadband growth, questioning inventory replenishment versus new products. Litchfield answered, "We're seeing CapEx dollars being deployed... carriers are being a lot more aggressive. You're also seeing the cable folks start to upgrade as well."
- Christopher Adam Jackson Rolland, Susquehanna: Inquired about Rushmore and Keystone design wins and customer mix. Seendripu explained, "We have designed with all the major module makers... we are in multiple call interop stages with the data centers with some we're already shipping and some in the pilot ramp phase."
- Rolland also asked about higher OpEx and interest expenses. Litchfield stated, "OpEx is actually below our midpoint of our guide. We did have some expenses that were pushed into Q3... Interest and other was a little higher... $4 million of OpEx impact that we had in the quarter that rolls up in that interest and other line."
- Ananda Prosad Baruah, Loop Capital: Asked about the timing and impact of new qualifications for Rushmore. Seendripu clarified, "The revenues in 2026 will still be 800-gigabit dominated. I don't expect 1.6 terabit Rushmore shipping until at the end of next year, leading into 2027."
- David Neil Williams, The Benchmark Company: Asked about geographic strength, particularly China. Seendripu said, "The strength areas for us are U.S. and Europe. But China, we're seeing different parts of the market behave very differently... there's a big push now developing for them deploying their data center networks."
Sentiment Analysis- Analysts displayed a neutral to slightly positive tone, focusing on segment granularity, sustainability of growth, and product ramp specifics. Questions consistently probed for detail on timing, customer mix, and potential headwinds.
- Management maintained a confident and constructive tone, emphasizing recovery, design win traction, and growth acceleration. Seendripu repeatedly expressed optimism: "We believe this positions us well for accelerated growth in '26 and beyond."
- Compared to the previous quarter, analyst skepticism about tariffs shifted this quarter to more detailed product and geographic execution, while management’s tone remained confident but more focused on execution and cost control.
Quarter-over-Quarter Comparison- Guidance for Q3 2025 increased to a revenue range of $115 million to $135 million, up from the prior quarter’s range of $95 million to $115 million.
- Infrastructure and broadband segments showed notable sequential growth, and the company returned to positive operating cash flow from negative cash flow in Q1.
- The tone of management remained confident, with greater emphasis on design win momentum and customer order strength. Analysts shifted from macro tariff concerns in Q1 to product mix and ramp specifics in Q2.
- Management’s confidence in long-term growth and profitability deepened, supported by explicit targets for data center and storage accelerator product lines.
Risks and Concerns- Foreign exchange volatility contributed to increased interest and other expenses, with Litchfield noting a $4 million impact.
- Management acknowledged pricing pressures in China and took a disciplined approach by "walking away from businesses, revenues where the margin is not accretive to what we feel is the right benchmark for MaxLinear."
- There is uncertainty in the timing of optical design wins due to long qualification cycles and varying customer deployment schedules, particularly for next-generation products.
Final Takeaway
MaxLinear’s Q2 2025 call highlighted a strong sequential and year-over-year recovery, driven by robust demand in data center interconnects and broadband infrastructure. With a targeted $60 million to $70 million revenue contribution from Keystone in 2025 and accelerating design win momentum across core product categories, management underscored confidence in continued revenue growth and profitability through 2026. Strategic investments in new product cycles, disciplined cost controls, and expanding Tier 1 customer engagements position the company for ongoing market share gains, despite ongoing industry headwinds and market timing uncertainties.
Read the full Earnings Call Transcript |
