Earnings Call: Q4 2020

Feb 3, 2021

Greetings, and welcome to MaxLinear's Q4 2020 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. I would now like to turn the conference over to your host, Brian Nugent. Thank you. You may begin. Thank you, operator. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear's Q4 2020 financial results. Today's call is being hosted by Doctor. Kishore Seendripu, CEO and Steve Litchfield, Chief Financial Officer and Chief Corporate Strategy Officer. After our prepared 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 Q1 2021 revenue, revenue growth expectations in our principal target markets, GAAP and non GAAP gross margin, GAAP and non GAAP operating expenses, tax expenses and effective tax rate and interest and other expense. In addition, we will make forward looking statements relating to trends, opportunities and uncertainties in various product and geographic markets, including without limitation statements concerning opportunities arising from our recently completed acquisitions of Intel's Home Gateway Business And of Nano Semi, growth opportunities for our wireless, infrastructure and connectivity markets and opportunities for improved revenues across our target markets. These forward looking statements involve substantial risks and uncertainties, including integration and employee retention risks associated with the acquisitions As well as risks arising more generally in our business from competition, global trade and export restrictions, Potential supply constraints, the impact of the COVID-nineteen pandemic, our dependence on a limited number of customers, average selling price Trends and risks that our markets and growth opportunities may not develop as we currently expect and that our assumptions concerning these opportunities may prove incorrect. More information on these and other risks is outlined in the Risk Factors section of our recent SEC filings, including our Form 10 ks for the year ended December 31, 2019, and our Form 10 ks for the year ended December 31, 2020, which will be filed in the coming days. Any forward looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward looking statements. The Q4 2020 earnings release is available in the Investor Relations section of our website at maxlinear.com. In addition, we report certain historical financial metrics, including net revenues, gross margins, operating expenses, Income or loss from operations, interest and other expense, income taxes, net income or loss and net income or loss per share On both a GAAP and non GAAP basis, we encourage investors to review the detailed reconciliation of our GAAP and non GAAP presentations In 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 charges, including stock based compensation and its associated tax effects. Non GAAP financial measures discussed today do not replace the presentation of MaxLinear's GAAP financial results. We are providing this information to enable investors Lastly, this call is being webcast and a replay will be available on our website for 2 weeks. And now, let me turn the call over to Kishore Sengrupu, CEO of MaxLinear. Thank you, Brian, and good afternoon, everyone. Our Q4 financial results were strong and highlight record revenues, Up 24% sequentially, record cash flow from operations of $74,300,000 and non GAAP gross margin of 57.8%. While our Q4 results and Q1 guidance were impacted by the challenging and intensifying semiconductor manufacturing supply chain constraints, We are taking every possible measure we can to ensure that our customers are minimally impacted. It is our topmost priority. Later in the call, Steve will outline our revised reporting categories, but in Q4, our broadband access revenue stood at 58%, Infrastructure at 10%, industrial and multi market 15%, and connectivity at 18%. Now turning to some of the Q4 business highlights. In broadband access, end market demand remains very strong, driven both Our company specific drivers and continued strong MSO deployment and subscriber broadband consumption trends, in Q4, We continue to ramp and gain box level market share at a flagship DOCSIS 3.1 U. S. Cable MSO platform. Additionally, we are benefiting from increasing SoC and front end platform content driven by the continuing DOCSIS 3.1 upgrade cycle throughout 2020. Our new broadband access and Wi Fi SoC assets have added significant breadth to our offering and expanded our served market across not only DOCSIS, but also 10 gs PON fiber and other broadband access gateways. Our connectivity business comprising WiFi, Ethernet, Moocca and G. Hn grew strongly in Q4, aided by resumption of Moocca 2.5 shipments to our flagship U. S. Telco customer and to a new Canadian telco. We also realized the full quarter impact of our Wi Fi and Ethernet businesses. We are still in the early stages of penetrating the connectivity opportunities in our own large Cable MSO and Telco SoC platforms. Additionally, the pace of our investments continues to open up exciting new growth opportunities in connectivity. The WiFi Alliance recently selected our Wave 664 platform as an official access point test bed For the emerging Wi Fi 6E market, our Wave 664 solution enables routers and gateways To deliver 4.8 gigabits per second in the 6 gigahertz band, higher quality user experiences, Supports up to 256 clients simultaneously and optimizes total network efficiency for high bandwidth and low latency. The expansion to a tri band WiFi 6E configuration of 6 gigahertz spectrum combined with legacy 2.4 gigahertz and 5 gigahertz band Delivers a 3 fold increase in data capacity. We are making stimulus strides in our Ethernet roadmap development initiatives and look forward to sharing more details in the coming weeks. In Optical Data Center, we are seeing meaningful progress towards mass production of our 400 gs PAM4 DSP in mid-twenty 21 at our Tier 1 hyperscale data center customer. We also have strong early traction and ongoing adoption of our 100 gs PAM4 offering by Tier 1 customers. Both 100 gs and 400 gs Ample markets continue to have a tremendous growth outlook and will dominate cloud and edge data center deployments over the next several years. We are on track to sample our Keystone family of 5 nanometer CMOS 800 gs PAM4 SoC products in mid-twenty 21. Keystone solidifies our ability to capitalize the secure optical Internet growth opportunity in the data center market with an industry leading product. We have multiple customers already starting module designs in preparation for the chips' return. Turning to wireless infrastructure market. As Q4 revenue declined due to the Huawei trade dynamic impacting our wireless backhaul business. However, Our bookings support a strong Q1 demand. Our customer and new product traction point to strong growth throughout 2021. In 5 gs Fireless Access, we have received strong positive feedback on our new 14 nanometer CMOS 5 gs RF transceiver, Which is the industry's 1st 8x8 Massive MIMO solution. In addition, we are moving aggressively to integrate our highly differentiated and critical design Critical Digital Pre distortion Nano Semi IP Technology into all our next generation 5 gs platforms. During Q4, we also joined the 5 gs ORAN Alliance, which is reshaping the radio access network industry Into more intelligent, open, virtualized and fully interoperable mobile networks. We further announced that MTI is using our transceiver in its remote radio units Our high performance analog business enters 2021 with lean channel inventory levels An improving attach rate funnel and exciting new product development that position us for growth in 2021 and beyond, Specifically, increasing power management attach rates across our broadband infrastructure applications will drive incremental content on our existing platform. We recently announced 3 new high DCDC power modules focused on powering FPGA, DSP P and SoC, high current core and memory supply rails as well as our 5 gs transceivers, longwall optical transceivers and cable infrastructure SoC. We are very excited about our organic infrastructure initiatives. Combined with our recent two acquisitions, we have briefly expanded our TAM, It now spans both high growth and high value broadband connectivity and network infrastructure applications. As a result, we are confident Driving strong profitable growth in 2021 and beyond. With that, let me turn the call over to Mr. Steve Richfield, our Chief Financial Officer And Chief Corporate Strategy Officer. Thank you, Tishore. I will first review our Q4 2020 results And then further discuss our outlook for Q1 2021. First, as Kishore alluded to and consistent with our prior updates, We are revising our reporting to align with changing end market conditions and our go forward business priorities and growth opportunities. We will report 4 categories. In infrastructure, this will be an unchanged category with the products that you have seen from us in the past with our high performance analog, Data Center and Wireless Infrastructure Products. Revenue from this category was $17,900,000 in Q4 And $76,200,000 in fiscal 2020 versus $85,400,000 in fiscal 2019. Our broadband category includes our prior connected home category plus the SoC business from Intel, But this category excludes wired connectivity. Revenue from this category was 113 $300,000 in Q444,400,000 in fiscal 2020 versus $119,300,000 in fiscal 2019. Our connectivity category includes primarily Our MoCA and G. Hn products and Wi Fi and Ethernet revenues from the Intel transaction. Revenue from this category was 34 $400,000 in Q4 $70,700,000 in fiscal 2020 versus $33,400,000 in fiscal 2019. Industrial and Multimarket includes the previously reported revenue plus Component revenues from the Intel acquisition. Revenue from this category was $29,200,000 in Q4 And $87,300,000 in fiscal 2020 versus $79,100,000 in fiscal 2019. In terms of the Q4 trends, on revenue of $194,700,000 our broadband business was up 38% sequentially, driven by a full quarter impact of the broadband and Wi Fi business from Ncell. As well as continued Strong demand from cable products owing to the work from home dynamic, content increases and share gains. Our connectivity business was also up 43 Given the acquisition, but was also above our expectations driven primarily by the strength of the Wi Fi demand. Our infrastructure business declined 17% sequentially, driven by wireless backhaul and high performance analog weakness, consistent with our expectation. We do expect a recovery in Q1 as I'll detail in a moment. Our industrial and multi market business was up 1% sequentially with expected softness in HBA, offset by the full quarter impact of the broadband and Wi Fi assets component related revenue. GAAP and non GAAP gross margin for the 4th quarter were approximately 42.7% 57.8% of revenue, respectively. This compares to GAAP gross margin guidance of 40% to 44% and non GAAP gross margin guidance of 56% to 59 The delta between GAAP and non GAAP gross margins in the 4th quarter reflects the amortization of $18,500,000 of inventory, Fair value adjustments and $10,700,000 of acquisition related intangible assets as well as $300,000 of stock based compensation And accruals related to our 2020 bonus plan. 4th quarter GAAP operating expenses were approximately 106 point $7,000,000 which was up quarter over quarter due to the full quarter impact of the 2 acquisitions that closed in Q3, partially offset by decreases in acquisition, integration costs and related restructuring costs. GAAP operating expenses included stock based compensation and stock based bonus accruals of $23,500,000 combined, Amortization of purchased intangible assets of $6,200,000 and acquisition costs of 1,200,000 Non GAAP operating expenses were $75,800,000 up $14,800,000 sequentially due primarily to the impact of the 2 acquisitions that closed during Q3. Moving to the balance sheet and cash flow statement. Our cash flow generated from operating activities in the Q4 of 2020 was 74,300,000 Versus $16,600,000 used in the Q3 of 2020. Our loan balance stood at 370,000,000 Factoring in the retirement of $17,200,000 during Q4. We have subsequently paid down another $20,000,000 during Q1. We remain consistent in our intentions around uses of cash with priorities on debt pay down and strategic acquisitions. Our days sales outstanding for the Q4 was approximately 32 days compared to 61 days in the prior quarter. Our inventory turns were 4.4 compared to 5.2 in Q3. These metrics are impacted by the timing, Purchase price accounting and relative size of the Q3 acquisitions. This leads me to our guidance. We currently expect revenue in the Q1 of 2021 to be approximately $200,000,000 to 210,000,000 up 5% sequentially at the midpoint of the guidance range. We expect broadband revenues to be up modestly with growth driven primarily by cable front ends and SoCs. We expect infrastructure revenue to be up significantly, primarily driven by wireless backhaul. We expect our industrial multi market revenues to be flat to slightly up, while connectivity will be flat to slightly down. Like much of the industry, we are working closely with our suppliers to address current supply constraints in the market as these constraints have become a challenge in delivering to our Current customer demand. We saw limitations in Q4 and continue to see impacts in the first half of twenty twenty one, which could impact the mix. We expect 1st quarter GAAP gross profit margin to be approximately 51.5% to 53.5 percent of revenue and non GAAP gross profit margins to be approximately 57.5 percent to 59.5 percent of revenue, up 70 basis points from the previous quarter at the midpoint of the range. As a reminder, Our gross profit margin percentage forecast could vary plus or minus 2% depending on product mix and other factors. We continue to fund strategic development programs targeted at delivering strong top line growth in 2021 and beyond, with particular focus on infrastructure and connectivity initiatives and our stated goal of increasing the operating leverage in the business. We expect Q1 2021 GAAP operating expenses to decrease approximately $2,000,000 quarter on quarter to a range of $103,000,000 to $107,000,000 driven mainly by the reduction in integration related activities, partially offset by seasonal payroll step up and headcount additions. We expect Q1 2021 non GAAP operating expenses We expect GAAP tax expense to be approximately 0 and non GAAP tax rate of 6%. We expect GAAP interest and other expense to be $4,300,000 to 4,500,000 and non GAAP interest and other expense to be $4,000,000 to $4,200,000 In closing, we are pleased to report improving dynamics in all of our businesses based on strengthening product cycles, We're also pleased with both the near term customer traction and development milestones in our Wi Fi business. We are intent in supporting customers through a dynamic market environment with accelerating demand and intensifying supply constraints. We remain focused on maintaining strong profitability and cash flow generation, while continuing to execute on our integration efforts as well as our organic infrastructure development. With these profitable growth initiatives, we believe we are uniquely positioned to deliver strong leverage in our business in 2021. With that, I'd like to turn the call back over to the operator for questions. A confirmation tone will indicate your line is in the question Our first question comes from the line of Tore Svanberg With Stifel, please proceed with your question. Yes, thank you and congratulations on the results. First question is on visibility. I mean, I assume you guys are pretty booked. Perhaps, can you talk a bit about visibility beyond the March quarter? And also as it relates to capacity, Are you taking some actions to perhaps expand your capacity at this point? Hey, Troy. Yes, thanks for joining us. So absolutely, visibility is extremely good right now, bookings At record levels and we really did have a tremendous quarter. Yes, these supply constraints are a bit challenging for us and we're trying to We'll do our best to resolve them as quickly as possible. Are there actions? There's lots of actions. I mean, there's Numerous things that our operations teams have been working on. I do think, I mean, there's lots of speculation as to how long this will continue. I think we have certain issues that are going to have a bigger impact in the first half of the year, Q1 and Q2. And then I but I also think that there'll probably be some Restrictions that even limit some abilities even in the second half of the year. So I can't give you Specific actions, it's a long list that we're working diligently to reconcile. So, Tory, also having said that, Our guidance contemplates those dynamics. And while the bookings are incredibly strong, we really Measure our business performance based on throughput of our revenues. And so we are In that matter as well. Meanwhile, like I said in my section of the call, making sure our customers have the supply they need is our topmost priority, And we are taking every measure to ensure that they are not in a position that they cannot be successful. Very good. And as my follow-up, you indicated that infrastructure is going to be up strongly, Especially with wireless backhaul ramping, could you elaborate a little bit on that? Is that a specific program or is it multiple customers And any regions of note? So on the wireless backhaul side, right, I mean, We now have fully absorbed the Huawei impact is what I've concluded. And so really resuming Strong growth back in Q1 is really indicative of certain design wins we have done at certain key customers, Tier 1 customers that are Beginning to ramp primarily on our RF transceivers. And at the same time, we are also seeing increased demand for our backhaul modem products. So I think that it's not one customer, it's multiple customers. With the exclusion of Huawei in the mix, which is unfortunately a huge Revenue loss for us, but that's now in the rearview mirror. Just one squeeze, one last one. And If you look at Tri Mode WiFi, I assume we're still in the very early innings of that update cycle, right? Yes, Tri mode WiFi, you know how all these markets play out first. You start in some Consumer retail shelf divides and then it goes into the handsets and then finally it makes its way into the operator platforms, right? And so we're in the early phase. But having said that, the Wi Fi 6E already contemplates the new bands at 6 gigahertz. It's really effectively Tri Band, however, there are changes in the way it works that involve the baseband. So we're really in the early phase of the access This point of evolution of Tri Band, both across the board, whether it's client side or access side. So and we'll be in a great position Execute on that because we as I said, we already got the certification of the Wi Fi 6E and And we feel we're in a very good position and we'll have the best silicon we can for the platform in a timely manner. Excellent. Congrats again. Thanks. Our next question comes from the line of Alessandra Vecchi with William Blair. Please proceed with your question. Hi. Just a couple of questions. Steve, any chance you can give us some color on how you view the growth rates for the different Hey, Alex. Well, so in our prepared remarks, we did Include kind of directionally what we saw coming. I mean, I do think infrastructure is going to be exceptionally strong In Q1, as that business recovers, I mean, post the weakness that we saw in Q4, Kishore just spoke about the backhaul, but I mean we also see some of the HPA businesses recovering. And so there's other components Of that, we'll definitely see pickup in Q1. Broadband, I I mentioned that as well. I see some modest improvements there in Q1, which is really counter to what we typically see. We usually would see a weaker And so I see that slightly up. And then connectivity, probably Flat to slightly down. We had an exceptionally strong quarter in Q4, and so we've just got a little bit of digestion that happens there. But I'm really excited about that business and the growth that we would expect to see throughout the year. And then Industrial Multimarket, a weak Q4, which we had talked about previously, right? But frankly, going into 2021, I The channel inventory levels have come down quite a bit and demand has definitely picked up. So I see that probably Flat to slightly up in Q1. So some of that reiterating from our prepared remarks, but hopefully that's helpful. Yes, that is. But I was actually sorry, I should have been clear. I was actually thinking more on a long term basis, Particularly maybe for the connectivity market. Okay. Yes, my apologies if I misunderstood that. I mean, look, connectivity and infrastructure are both Really big investments that we've made. We expect to see substantial growth. They're big markets, right, whether it be Wi Fi Driving some of the connectivity markets, Ethernet, I mean, those are big growth drivers that should grow solid double digit growth for a while to come, Especially with these newer products that are coming out. I mean, the same thing applies on the infrastructure side, where We've described and talked about similar market dynamics with some of the newer products. And I don't think I mean, with regard to the broadband Segment as well, I mean that's probably reflect back on some of our commentary that we've made throughout the year. I mean that's still kind of a low Potentially a mid single digit grower. And then industrial multi market would be consistent with what we've said historically, growing Around the rate of GDP. Okay. That's very helpful. Thank you. And then just on a more housekeeping question. Can you just update us on how to think about operating expenses as we progress through the year? Should we sort of continue to expect OpEx down in Q2 and then continue to migrate down a little bit or is there any change to your previous commentary there? Yes. So look, I mean, I'll give you a little bit of color because there's some moving parts. I mean, we don't like to guide more than 1 quarter out, just kind of given the changing world that we live in. That being said, the look, we've got a lot of integration efforts that are ongoing. We've mentioned the some of the transitional Expenses that we have between us and Intel, that continues throughout Q1. And so those will start to come out in Q1, and so we'll start to see some improvements in the back half of the year Due to Intel, we do have some mass expenses that will contribute in Q2 and And to some degree in Q3, so we'll see that pick up. And then hopefully by the end of the year, we'll see more of these Intel And some of the some of our integration efforts really pay off and you'll see kind of the exit of the year Pretty good. I think you'll see some nice improvements throughout the year on the OpEx side. Great. Thank you. With that, I'll pass it along to the next person. Great. Thanks. Our next question comes from the line of Quinn Bolton with Needham and Company. Please proceed with your question. Hey, Tisha and Steve. Congratulations on the nice results and the outlook. I guess my first question is Steve. You talked about these supply constraints and it certainly sounds like Limiting your ability perhaps in the near term. Wondering if you think you're leaving some revenue on the table as a result of the supply Constraints in Q1 and I assume that most of that demand probably is non perishable. And so To the extent you're leaving some demand on the table in Q1, does that push into Q2 and Q3 and set you up potentially for higher sequential growth through the year? Or Would you still expect sort of a pause in the broadband and connectivity businesses after a strong Q4 and Q1, a pause kind of in Q2? Yes, Quinn. I mean, so clearly, we're working very hard on these Supply constraints, it absolutely limited kind of our guidance in Q1. I mean, your specific question just that pushed out, I mean, I think the reality is it probably does. And so I think we're going to we'll do all that we can. Will that mitigate so my We've talked a little bit about typical seasonality and kind of what's going on in the world today. I think we I think a lot of folks have kind of anticipated seeing that slowdown happen in Q2 per your comment, right? And that We would typically see the seasonal softness in Q1, but it seems to be shifting to Q2, Which I think we don't disagree with. We've seen incredible demand over the last 6 to 9 months. And so it would be logical to see somewhat of a pause. The supply constraints pushing out will mitigate some of that. I do agree with that. Great. And your commentary around your lead customer on the 400 gs ramps, it seems to be kind of increasingly Optimistic, just maybe I'm reading too much into your tone, but it seems like you guys are more excited about that opportunity. What's leading you to kind of The more bullish statements around kind of the timing and perhaps size of that ramp at the lead customer. So I think that from our point of view, this has taken far longer than it should ever have. So it seems that the bottlenecks at the lead operator customer, their Customer will allow them to qualify. There's a whole interop qualification process that they put each Module vendor through, it seems it's our turn to get our module vendors through the process now. So the fact that you're That phase implies and then the bottleneck has opened up. So we feel optimistic that when the real ramp gathers momentum, we'll be a participant in that. Also, I think in general, if you look at the dynamics of the optical high speed figures in the market, the increasing consolidation that's going on in the marketplace This really proves the thesis that a high performance, aggressive, high Technology capability, mix even capability that we bring to bear is really the call for the day, right? And so we feel very good about where we Position not just with our 400 gig offering, but also with both 100 gig and then we'll be the world's first one to do a 5 nanometer CMOS Keystone Product as they call the 800 gig product and nobody will have that product. And there's going to be a lot of derivatives to that product, whether it is Pluggable market or co packaged optics that may be a trend 5 years from now, I think we're very, very well positioned. I think our portfolio has finally come to mature We've become very interesting to everybody. Thank you, Kishore. Our next question comes from the line of Ananda Baruah with Loop Capital Markets. Please proceed with your question. Hey, good afternoon. Yes, congrats on the solid results and the good start to the year. Thanks for taking the question. Kishore, Steve, can we just go back to the comments you made a moment ago about sort of anticipate I'm paraphrasing of an anticipation of 2Q, June Q, maybe slowdown in the broadband trend, maybe that gets offset to some degree By the relieving of the supply constraints, would love context just around why the view of Q2 slowdown actually developed in the first place. One of the questions I was going to ask you was thoughts on legs through the year from the at home But I do just love the context that leads to the thought process that 2Q, there is a sort of meaningful slowdown. And then I have a follow-up After that So, Ananda, I guess I'm not sure Kind of where you're coming from. So the Q2 so we've seen significant strength on the broadband side. And I think that business is performing extremely well. Demand has been extremely good. And so we've been very pleased with that. I think the market was, is kind of anticipating that Slow down a bit, which I think we would not disagree with that at all. That being said, the demand continues to be extremely strong and we talked a lot about The content increase, remember that our content increase is going up on the order. I mean, Yes, typical, some of these boxes are running at $15 to $20 and now you're seeing these things. Our content has the to capture up to $30 and even in some cases above that. So that's extremely positive. The share gains is the other one That has continued to go well for us. I think if you look over the last 18 to 24 months, I mean, we've struggled on the We dropped kind of below that typical 50% level, and so we've been regaining that. And so a lot of these numbers It may appear like they're stronger than what was expected, but this is really making up share gains that We have executed on as well as bringing in these content increases. So these are substantial gains that we're excited about, we think continue. I think this also adds to our enthusiasm on broadband as well as connectivity over the long term growth rate of the business, right? And that we've kind of broken out this way, so you can see that connectivity piece in particular that will demonstrate kind of the growth And Wi Fi as well as Ethernet going forward. So what we want to point out is that we're in the early phase of our connectivity Attached to our SoC platforms, I mean, our Wi Fi product has just started attaching onto these platforms. So That's a very, very important point. So we expect growth to come from Bong content increase quite meaningfully. And the share gain is a very, very important factor. So I think Some of the things that could be missed in this scenario of supply constraints and some presumed Expectation of over bookings really misses the fact that we are growing through share gains and content increase and no unusual events that are one time events for us. This is going to be a Very drumbeat of growth in both broadband access and connectivity for MaxLinear. And yes, and I appreciate that. And because really what I'm trying to Just to make sure that I have a clear view of because I'm totally there on the content increase and on the share gain aspects of the story. And then so for the sort of the market component, are you guys is it I I know you're not giving June quarter guidance, but I want to make sure this distinction I'm clear on, distinction between it is the maxillinear perspective That there will be a slowdown in June quarter from at home? Or is that is it sort of just has it become just sort of the accepted perspective? Or are there some of your main OEMs that are telling you that, hey, listen, this is actually what's going to take place. I don't mean to be long winded, but I think the longer we get into this We're in February now and at home is not slowing down yet, right? And so I just want want to see if there's something that you're actually seeing that's causing you to say, hey, listen guys, we think this starts in like April, which is only like 8 weeks away, Right, versus we're just sort of saying, hey, listen, like sooner or later, it's going to start to slow down and we think the June quarter could happen. I know I'm being long winded, but I want to make sure I'm clear on the distinction behind that June quarter comment. So, Ananda, I mean, so you're probably the best way to answer this is that we're not going to answer and we're not going to give guidance for Q2. I mean demand is exceptionally strong. We expect that to continue throughout the year. And we're really pleased actually with the content That we've been able to capture, the share gains that we've been able to capture. And so I look at this, there's kind of a new normal At MaxLinear, if you will, right? I mean, what we've kind of viewed historically, I mean, the whole world has changed. We're able to capture a tremendous amount Of this bomb now that we've never had access to historically, right? And so that's Really been a game changer and we're working closely. I mean, Kishore talked a little bit about the customers earlier, but the Content increase and the opportunity that we have going forward is incredible for MaxLinear. That being said, I mean, look, we're going to keep working through these supply constraints and we're going to do our best for Customer to be able to address that demand level that we can hit? I think once again, our growth Stories, very company specific drivers of growth. And we are going to Guide based on those specific and those specific, as Steve mentioned, look very positive. And regarding the bond part, it leads to a whole different dialogue with customers now, strategic partnerships on their future investment needs on their side, And they're partnering with us. And in the consolidated world, we feel we have a huge role to play in terms of in this marketplace. That's really helpful. Thank you, guys. Our final question comes from the line of Tim Savageaux with Northland Capital Markets. Please proceed with your question. Okay. At long last, Well, just to summarize, there was this pandemic, everyone started working from home, cable subscribers went through the roof And that might normalize. Just to address the previous 20 minutes on the question there. Let me move on to a couple of my own and maybe I'll make it a little clearer. Do you expect Q1 to be your peak revenue quarter in 2021? Hey, Tim. Good to talk to you. Thanks for joining us. Same here. Look, we're very excited about the positioning as we've been talking about. I appreciate your comments, Well made. Look, execution is going extremely well right now in a pretty difficult environment, Demand levels that the company has never seen. And, but we're doing a great job. I mean, Kishore's previous comments about the Customer right now, we really the game has changed tremendously. And so our relationship with the customers have really improved and we're very excited about the market And the opportunity that we have before us on the broadband, the Intel side. But frankly, we're also continuing to move nicely along on the infrastructure Outlook, right? I mean, this has been a long investment cycle and so we're very optimistic going into 2021 about our optical Opportunities as well as the 5 gs opportunities. Got it. And let's dig into some of those Quickly, I went well, first kind of housekeeping, but important, I wonder if you could address 10% customers for Either the quarter or the year in terms of in the aggregate or individual concentration or whatever you're willing to share? Yes. We did have 3 10% customers in the quarter. Okay. That's it. That's fair enough. And final one for me. You mentioned somewhere along the line Opportunities related to 10 gig PON. And I assume That refers to kind of the CPE or client side of the wire, but maybe not. I think there might be some infrastructure opportunities. We're hearing a lot About growth in 10 gig PON here in 2021, and I'm wondering how material a driver that could be for you guys in addition to what you're doing in cable? So the great news is that in Tenji PON, we're just starting to ramp and shift. We've got some major design wins. And those design wins and ramps will happen throughout 2021, 2022. And so 10 gs PON is going to be a very meaningful broadband growth story for MaxLinear. Having said that, the revenues are all in the CPE client side. We don't have any infrastructure 10 gs PON offering. So I think that should answer your question on that. So we totally agree The 10 gs PON is going to be a phenomenal growth story for years to come. The telcos have upgraded their networks And corporate has lost its conductivity, if you will, right? So I think we are very excited that we have we're on the world's screen year gateway platform for PON applications. And even as we speak, we're shipping actually, and that's where the demand is quite substantial. And we're trying to manage our supply situation Great. Thanks very much and congrats on the results and outlook. We do have another question from the line of Richard Shannon with Craig Hallum. Please proceed with your question. Well, hi guys. Thanks for taking my question. I apologize for any background noise here, Matt, of the public here. I guess a 2 part question on PAM4. First of all, can you give us a sense of when you're expecting to see the contributions and revenues from your 100 gig PAM4? And then just want to clarify on the 800 gig 5 nanometer products Talking about are you saying you're the first one in the market with those sampling? Or if not, can you kind of discuss the competitive environment as you're seeing it right now? Thanks. So as we see the competitive environment right now on the 800 gigabit PAM4 DSP In 5 nanometer, we expect to be the 1st ones to be sampling in the marketplace. So that gives us a nice flagship leadership advantage And Edge with respect to the data center folks. And so we are not aware based on our knowledge, right, Who else is going to be there in that timeframe? So on the timing for the 100 gig PAM4, we expect it all to be in the same timeframe around 400 gig because They are in the same design cycle qualification validation, though there may be different OEMs or module makers who would be I just want to note that 100 gig is not just data center market. It is going to have a larger application Then just then directly to the data center folks. There are other OEMs who would be buying these kinds of product. Okay, great. That's all for me guys. Thank you. Thanks, Richard. Go ahead, please. Yes, I was just going to say, with that, we've reached the end of our I'll turn the floor back over to management for any closing remarks. All right. Thank you, operator. We will be participating in the following upcoming conferences, The Morgan Stanley TMT Conference on March 3, the SIG's 9th Annual Technology Conference on March 10th, Loop Capital's inaugural Investor Conference on March 11th to 12th, the ROTH 2021 Conference on March 16th. Just want to remind everyone that all of these conferences are virtual, but we hope to connect with many of you there. With that being said, we thank you all for joining us And we look forward to reporting on our progress to you next quarter. Thank you very much. This concludes today's conference call. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day.