Hello, welcome to the MaxLinear second quarter 2020 earnings conference call. At this time, all participants are in a listen only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. A question- and- answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Brian Nugent. Please go ahead.
Thank you, operator. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear's second quarter 2020 financial results. Today's call is being hosted by Dr. 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 third quarter 2020 revenue, third quarter revenue growth expectations in our principal target markets, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, tax expense 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 announced definitive acquisition agreement for Intel's home gateway business, growth opportunities for our wireless infrastructure and connectivity markets, and opportunities for improved revenues in our broadband markets.
These forward-looking statements involve substantial risks and uncertainties, including risks related to our proposed acquisition of Intel's home gateway business, such as integration and key employee retention risks, as well as those arising more generally from competition, global trade and export restrictions, potential supply constraints, the impact of the COVID-19 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-K for the year ended December 31, 2019, and our second quarter 2020 Form 10-Q, which was filed today. Any forward-looking statements are made as of today. MaxLinear has no obligation to update or revise any forward-looking statements. The second quarter 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, 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 to perform more meaningful comparisons of our operating results in a manner similar to management's analysis of our business. Lastly, this call is also being webcast, and a replay will be available on the website for two weeks. Now, let me turn the call over to Kishore Seendripu, CEO of MaxLinear.
Thank you, Brian. Good afternoon, everyone. We are pleased to report Q2 financial results ahead of our initial guidance. Q2 2020 revenue was up 5% sequentially to $65.2 million, with strong gross margins of 63.7% and operating cash flows of $9.3 million. In Q2, our Connected Home business stood at 45%, Infrastructure at 29%, and Industrial and Multi-Market at 26% of overall revenues. Our business outlook heading into the second half has greatly improved, with tailwinds in our cable data backed up by strong bookings for Q3. We are benefiting from the demand for greater bandwidth at home in a transformative work-from-home environment that we believe is an emerging long-term trend. We also saw a snapback in demand for our high-performance analog products following a Q1 low. Still, in Q2, there were some pockets of weakness due to COVID-19 in our wireless backhaul markets.
Despite the challenges related to COVID, our geographically diverse team is successfully executing on critical strategic engineering initiatives and customer milestones in 5G wireless, optical data center, and high-performance analog markets. We are excited about our upcoming acquisition of Intel's home gateway business, which is expected to close in Q3. This acquisition more than doubles our TAM to about $5 billion. It consists of industry-leading DOCSIS, 10G-PON fiber, and Ethernet broadband access gateway SoC technologies, along with a state-of-the-art Wi-Fi 6E platform solution. Combined with our ongoing 5G wireless and optical data center infrastructure initiatives, we are ideally positioned to address all the network bandwidth expansion opportunities and bottlenecks in the cloud, as well as into and throughout the home.
The rapidly expanding work-from-home mandates due to COVID-19 are driving bandwidth upgrades, which will strongly benefit our core Connected Home business, as well as our companion Intel Connected Home division acquisition. Turning to some of the other highlights. In optical data center, we continue to support the industry's first 400G PAM4 deployments at our Tier 1 hyperscale data center customer. While this ramp has seen a slight delay, we remain encouraged by our customer's progress, and as mentioned earlier, expect to see revenues in the second half of this year. We are also seeing strong adoption and continued progress with Tier 1 customers for our 100 G PAM4 offering, leading to early revenues in this year.
We believe that single lambda 100 Gb, 400 Gb PAM4 solutions will dominate cloud and edge data center deployments over the next several years, and we are well-positioned with our early traction. Turning to 5G wireless infrastructure, I am excited to announce that we have started sampling our second-generation 5G wireless RF transceiver product, which is the industry's first 8x8 MIMO RF transceiver in 40 nm CMOS. Our 5G RF transceivers have the highest performance, double the bandwidth at 400 MHz, and superior system-level integration and power consumption versus competition.
We are working aggressively to get our lead customers to market, bolstering the confidence in realizing initial 5G revenues in 2020 and strong multi-year growth beyond. In wireless front-haul and backhaul transport, we witnessed a slowdown in the first half of the year, potentially due to COVID-19-related installation delays. However, we do expect a pickup starting in Q3. We continue to see a push towards E-band spectrum deployments and channel aggregation features. We are in a very good position to capitalize on these favorable trends with our 20 Gbps mm wave dual modem and RF SoCs.
We expect multiple OEMs to launch new products with these features in the second half. In closing, our organic initiatives in 5G wireless, optical data center, and high-performance analog markets, along with the upcoming Intel Home Gateway business acquisition, will uniquely benefit MaxLinear shareholders by addressing an expanding target addressable market of challenging broadband connectivity and network infrastructure platform applications. With that, let me turn the call over to Mr. Steve Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer, for a review of the Q2 results and our forward guidance.
Thank you, Kishore. I will first review our Q2 2020 results and then further discuss our outlook for Q3 2020. On revenue of $65.2 million, we saw our Connected Home business down 10% sequentially, materially less than expected, with declines in our legacy business partly offset by the improvement in MoCA demand. Cable data was down slightly. Our Infrastructure business grew 15%, driven by a strong recovery across our HPA products and an uptick in high-speed interconnect demand, offset by continued macro weakness in wireless backhaul deployments. Our Industrial and Multi-Market business was up 38% sequentially, as demand returned after an unusually weak Q1 owing to the COVID dynamic and related distributor inventory reductions.
GAAP and non-GAAP gross margins for the first quarter were approximately 50.2% and 63.7% of revenue, respectively. This compares to GAAP gross margin guidance of 49.0%-49.5% and non-GAAP gross margin guidance of 63.5%-64%. The delta between GAAP and non-GAAP gross margins in the second quarter reflect primarily the amortization of $8.6 million of purchased intangible assets from previous acquisitions. Second quarter GAAP operating expenses were approximately $55.5 million, which was slightly above our GAAP guidance of $54.0 million-$55.0 million, due primarily to higher stock-based compensation expense.
GAAP operating expenses included stock-based compensation and stock-based bonus accruals of $15.2 million combined, amortization of purchased intangible assets of $5.5 million and acquisition costs of $2.1 million. Non-GAAP operating expenses were $32.6 million, which was up $0.9 million sequentially, due primarily to annual merit increases impacting payroll and higher prototyping expenses, partly offset by lower travel expenses. This was at the low end of the non-GAAP guidance of $32.5 million-$33.5 million as a result of continued disciplined expense management.
We have been successfully managing the spend during the transitional period, with trailing 12 months non-GAAP OpEx down 11% year-over-year. Moving to the balance sheet and cash flow statement. Our cash flow generated from operating activities in the second quarter of 2020 was $9.3 million, versus $6.6 million generated in the first quarter of 2020. Our loan balance remains at $212 million, and our net leverage ratio was 1.7x . We remain consistent in our intentions around our uses of cash, with priorities on debt paydown and strategic acquisitions. Our day sales outstanding for the second quarter was approximately 58 days, compared to 66 days in the prior quarter.
Our inventory turns were flat at 4.0x. That leads me to our guidance. Our guidance excludes the acquisition of Intel's Home Gateway business. We currently expect revenue in the third quarter of 2020 to be approximately $72 million-$76 million, up 13.5% sequentially at the midpoint of the guidance range. We expect Connected Home revenues to be up roughly 20% quarter-over-quarter, with growth driven primarily by cable data. We are expecting tailwinds from the work-from-home dynamic as well as new customer program ramps in the second half of the year. We are working closely with our suppliers to fulfill the increased demand.
We expect Infrastructure revenue to be up roughly 10%-15%, primarily driven by the recovery in backhaul demand after two weak quarters. We expect our Industrial and Multi-Market to be flat to up 5%. We expect third quarter GAAP gross profit margin to be approximately 51.5%-52.5% of revenue, and non-GAAP gross profit margins to be approximately 63.5%-64.5% of revenue, up slightly. As a reminder, our gross profit margin percentage forecast could vary ±2%, depending on the product mix and other factors.
Even as we are focused on reducing our run rate spend levels, we continue to fund strategic development programs targeting at delivering strong top-line growth in 2020 and beyond, with particular focus on Infrastructure initiatives and our stated goal of increasing the operating leverage in the business. We expect Q3 2020 GAAP operating expenses to increase approximately $5 million quarter-on-quarter to a range of $60 million-$61 million, driven mainly by acquisition and integration cost.
We expect Q3 2020 non-GAAP operating expenses to be up approximately $0.4 million sequentially to a range of $32.5 million-$33.5 million. We expect GAAP tax expense to be approximately 0%, and our non-GAAP tax rate of 6%. We expect interest in other expenses in the quarter to be $2.1 million-$2.2 million. In closing, we are pleased to report continued progress on our Infrastructure initiatives, with expanding design engagements in the data center market and expanding adoption of our E-band modems and RF transceivers in the wireless backhaul market, and further engineering and customer milestones in our 5G massive MIMO transceiver platforms.
We're encouraged to see a considerable recovery in our high-performance analog offerings, as end market dynamics improve from COVID-19 impacts. The broadband business, as expected, is seeing a nice recovery in 2020, but the work-from-home environment is driving an acceleration of this recovery. We remain focused on maintaining strong profitability and cash flow generation, while continuing to execute on our organic infrastructure investments. With these existing initiatives, along with the financially and strategically compelling acquisition in the Intel acquisition, we believe that we're uniquely positioned to deliver strong leverage in our business in 2020 and beyond. With that, I'd like to open up the call for questions. Operator?
Thank you. We'll now be conducting a question- and- answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment please while we poll for questions. Our first question today is coming from Quinn Bolton from Needham & Company. Your line is now live.
Hey, Kishore and Steve. Congratulations on the nice results and the strong third quarter outlook. I guess I wanted to start with the Connected Home business up 20% sequentially. Can you give us a sense, is that primarily driven by one cable MSO or is it pretty broad-based? If it is sort of driven by one MSO, do you feel that your share is normalizing at that cable operator with the ramp of the latest generation products? I've got a follow-up.
Thank you, Quinn. Our demand is broad-based on the operative side. It's not one particular MSO. We are seeing some TAM expansion happening right now with all the MSOs, especially North America. We are also well-positioned based on the backlog that we are going to start gaining share in the other MSO. We're also seeing, in general, a very healthy booking for Q3 and beyond, so we feel very good that the recovery is in progress right now.
Great. The second question. Sounded like the high-speed interconnect business was up in the second quarter, but you didn't mention it as a driver of growth in the third quarter. Was wondering, you'd mentioned that there might have been a slight delay at your lead 400 G customer. Can you give us an update there, specifically, are you guys through the interoperability testing at that customer, or are you still in the interop testing phase? Thank you.
I think that as we look for the optical data center, whatever revenues we are speaking about, it's more to give you color how things are progressing, but they're not meaningfully different. It's just a bit volatile based on sample quantities or beyond. We have some revenues in TIAs and drivers. Those are the sort of buckets in which we have the high-speed interconnect revenues. Really speaking, we have always talked about these major hyperscale data center transition to 400 Gb.
We are still in the interoperating phase. When we speak of us, we talk about our module customers. Really, it's not much in our hands. It's about the qualification process of the hyperscale center, how these module vendors are progressing with their need to reach a certain yield and so on and so forth, and reliability of supply before that can meaningfully take off. At this point, at a chip level, we are just supporting our customers as much as we can, but ultimately they have to be ready with their manufacturing capability.
Understood. Thank you, and congrats again, guys.
Thank you.
Thank you. Our next question today is coming from Tore Svanberg from Stifel. Your line is now live.
Yes. Thank you. Yeah, good job on turning around here. First question on Connected Home. That business will be slightly more than $30 million in Q3. Is there still some legacy mix in that $30 million or is it becoming de minimis at this point?
Hey, Tore, it's Steve. I think the legacy piece is becoming smaller. No doubt about that. The pickup that we've seen, we highlighted that it was really cable data. Some of the weakness that we saw in Q2 was driven by some of the legacy demand, but it is becoming less and less. One of the legacy areas, we talked about satellite, and that's becoming a much smaller percentage of the business. Consistent with our earlier remarks, that'd be less than $10 million this year.
Very good. You mentioned a second generation to Telluride. I was just hoping maybe you could talk a little bit about what that means from a market perspective, because obviously this is gonna be an 8x8 part. Maybe also talk about when you expect that product to generate meaningful revenue.
Tore, I think, you misspoke. You're referring to 5G wireless. Yes, we launched the first 8x8 MIMO radio transceiver. The industry, from a cost perspective, has decided that more integration is warranted to reduce the cost of 5G deployments. As 5G deployments have delayed a bit, the industry's focus has shifted to the 8x8 platform. Suffice it to say that for the most AAS application, which is a large MIMO configurations, 8x8 will become the mainstay.
We are in a competition to be among three players who will be sampling this particular chip, and we are ahead because of our technology lead in the CMOS node. At the same time, for us, it was very expeditious to execute on this 8x8 solution, given that our first generation products were the 4x4. Regarding revenues, we expect the 4x4 to generate initial revenues towards the end of the year, and really, mass revenues, really, we are counting on the 8x8 to generate when the platform is fully adapted and ramped by the end of the first half of next year, sometime in the middle of next year. Okay.
Great. Just one last one. Could you just give us an update on the timing of the Intel acquisition? You mentioned, obviously, closing in Q3, but any update on the timing and any other hurdles that you have to pass at this point?
Yeah, Tore. Not a whole lot to update here. We are, as we mentioned in the press release, confident that we'll close this in Q3. No more regulatory approvals, so comfortable on that front, and so just working through the final work council issues. We hope that we'll be announcing that soon.
Great. Thank you very much.
Thank you. Our next question is coming from Ross Seymore from Deutsche Bank. Your line is now live.
Hi, this is Ji for Ross Seymore. Thank you for letting me ask a question. The Industrial and Multi-Market did quite well, growing 38% sequentially. I guess, beyond the third quarter, how do you see the IMM segment progressing? Was it some pulling of demand or, I guess, how would you characterize IMM for the second half of the year?
Yeah. Hey, Ji. Yeah, we did see a nice recovery. We had seen quite a bit of weakness in Q1 of this year. We had already seen bookings picking up in early part of the second quarter. Demand remained very strong throughout the quarter and continues today. I'm encouraged by the recovery that we've seen as we look out into Q4 and into 2021. I'm optimistic that we start to see this kind of back to some normalcy. We definitely saw what amounted to as a real snap back at the beginning of the quarter. Demand has continued. Sell-through has been good. Like I said, hopefully we'll see some stabilization in this market soon.
Okay, thank you. Just a housekeeping, I guess, looks like CapEx as well as stock-based comp was up sequentially quite a bit. Can you talk about how those should trend in the third quarter?
Yeah. CapEx is consistent with what we've talked about. We've talked about it being about $10 million a year and really no major developments on that front. Stock-based comp definitely was up in the quarter. A lot of that was driven by some of the performance shares. I wouldn't expect that level of an increase in the future. It was down slightly in Q1, definitely saw an increase in Q2, but shouldn't expect to see that going forward.
Okay. Thank you.
Thank you. Next question today is coming from Christopher Rolland from Susquehanna. Your line is now live.
Hi, it's David Haberle on behalf of Christopher Rolland. Thank you for taking our question. I guess on Connected Home, as we think about some of the legacy business and the headwinds dissipating there, I understand from Tore's question earlier that this is not de minimis at this point, but you do have a nice strong kind of tailwind from work from home. How are you thinking about growth in this market going forward? Is Connected Home, do you believe it's bottomed here in 2Q, and can growth from work from home trends and cable offset kind of the legacy headwinds that are still ahead of you?
Hey, David. Yeah, it is encouraging. I think coming into this year, we were really expecting this business to stabilize and kind of get back to low single-digit growth rates in 2021. Work from home, I think, has definitely accelerated that. I think the question to me is, how long does that continue, right? How much increased growth that we can see? Because it seems like the economy in general and a lot of the language and many companies out there are looking for long-term solutions with work from home.
I think this could continue for some time. I think ultimately, getting back to this kind of low to mid-single digit growth rates is where our expectations would be. Maybe just to, I guess, alleviate some concern, the legacy business, I don't see that as a headwind at all. Really have no problems with that. This is dominated by the cable data business as well as connectivity. I don't see that as problematic whatsoever.
Understood. Thank you for that. For my follow-up, I wanted to ask about MoCA. There's a comment in the queue about Connected Home down year-over-year and partially attributed to MoCA shipments owing to a pause in the ramp. I think you called out that it was up quarter-over-quarter. I just want to see if there was any incremental color on MoCA, kind of where you stand with your large customer and the ramp there. Are there other customers, like the breadth of that product?
Yeah, sure. MoCA, we're actually very excited about MoCA and that ramp with the large customer going forward. We definitely saw strong growth in 2019. Saw that pause that we had talked about kind of coming into the first half of the year. Those guys are still struggling a little bit with deployments within the work from home environment. That has created some, I think, short-term issues, but I think those are getting resolved, and that's why we're excited about seeing that pick back up in the second half of the year.
Thank you.
Thank you. Our next question today is coming from Tim Savageaux from Northland Capital Markets. Your line is now live.
Hey, good afternoon. Congrats on the results and outlook. One question. You mentioned, pardon me, within Infrastructure, a pickup in high-performance analog. I think that's the TIA driver stuff that you referenced. With backhaul gone, I wonder if you could talk a little more granularly about what sort of applications are driving that pickup in the HPA business. That's one question. The other one is, did you have any 10% customers in the quarter, and if so, how big?
Yeah. With regard to the drivers, yes, Infrastructure was up quite a bit. A lot of that was driven by the HPA recovery, right? We had seen some weakness in the first half or the first quarter. Saw a nice improvement there, and I think we expect to see that kind of pick up in the second half of the year. As far as giving more granularity, we've talked about some of the drivers there. It's the server business, for example. There's other business there, like remote radio heads is another one. There's a number of different areas that we sell into Infrastructure, but those are probably the two largest. The one customer that we have is CommScope, they've been the largest and continue to be.
Okay, thanks very much.
Thank you. Next question today is coming from Bill Peterson from JPMorgan. Your line is now live.
Hi, this is Alex Kim dialing on behalf of Bill Peterson. I just had a question on the Infrastructure side. For full year growth outlook, are you still on track for mid-single digit growth around, like, 5%-9% year over year for 2020?
I'm sorry, Alex, you're going to have to ask that. You broke up a little bit.
Hi. I just had a question on the Infrastructure side. Are you still on track for mid-single digit growth around 5%-9% year-over-year growth for 2020?
We've kind of talked about this a little bit, just giving one quarter's worth of guidance. Coming into Q2, we were expecting to see improvements kind of throughout the rest of the year, and I think we continue to be confident in that. The one piece that was a little bit different than our expectation was wireless backhaul was weaker than expected in the quarter. That being said, I think the backlog and the visibility that we have there, we do expect to see nice upticks in Q3 and Q4.
Got it. Thank you. On the wired side with the Amazon ramp in the second half, what do you think is the revenue opportunity there?
We haven't broken out exactly what that revenue number would be. I still think it's relatively small numbers in Q3 and Q4, and then start to see a more material contribution in the first half of 2021, I'm sorry.
Okay, got it. What are your thoughts on cloud spending being sustainable for the second half? I know you mentioned that you've seen a slight delay with your Tier 1 customer. Can you just talk about the overall market in terms of cloud spending being strong for the second half?
Yeah. Alex, we're probably not the best positioned to comment on that. We talked about our slight delay, I think there's a number of reasons, just kind of market environment as a whole. This is all incremental revenue to MaxLinear, I don't know that we're best positioned to comment, because we really don't have any downsides because it's all upside and incremental revenue to our business.
Okay, got it. Thank you so much.
Thank you. Our next question today is coming from Ananda Baruah from Loop Capital Markets. Your line is now live.
Hi, good afternoon, you guys. Really appreciate you guys taking my question. Congratulations on the solid quarter and the strong execution. I have two, if I could. Just starting back out with Connected Home. Sounds like you guys don't think the longer-term growth rate, normalized growth rate, is going to alter. You did make mention of share gain opportunities along the way. If those occur, do you think you can go into those sort of normalized growth rates from a stronger share position, meaning you can level up your revenue run rate when that low to mid-single-digit growth rate occurs? I have a follow-up.
Yeah. No problem. Well, first of all, thanks for joining, and glad to have you on board here. Yeah, I think the answer is absolutely, right? We're working hard. Kishore commented a little bit on the share gain potential that we have. We're working diligently to do that. The call today is really focused around the MaxLinear side and not the acquisition, but it is something that just They're being able to add content going forward is a big opportunity as well as share gains. Both of those are a focus for the company and we think we've got some good potential to do so.
Excellent. Thanks for that. Just the delay that you guys mentioned, is that on the hyperscale cloud side or is that on the telecom side? Can you give me the context there?
On the hyperscale side.
Got it. Okay, cool. Just, earlier in some of the remarks you made mention of, my paraphrasing, but not to read too much into it. Is that with regards to the delay or is that a separate distinction? Should we not collapse those two?
I'm not sure which part you're referring to, but with regard to the optical business or the HSI business, we continue to work with the large hyperscale customer and excited about seeing these early revenues come in in the second half and then expect to see more material contribution next year.
That's awesome. Okay, thanks so much. Appreciate it.
All right. Thank you.
Thank you. Our next question is a follow-up from Tore Svanberg from Stifel. Your line is now live.
Yes, thank you. I apologize for getting my ski resorts mixed up here in the middle of the summer. Thank you for addressing the Broadcom question. On Telluride, will there be a follow-up to this product? I know, Kishore, in the past, I've asked you about the move to 7 nm. Any updates there?
Hey, Tore. Of course, there's a follow-up to this thing. The industry trend right now is that on the 400 G, everybody's going to converge on the electrical interface. I don't want to get into the technical details here, but on the electrical interface today, if you know it's a 50 Gb electrical interface. Basically, you get 4x 100 optical lanes, four lanes of 100 Gb, and then the electrical side, you have eight lanes of 50 Gb. The industry is converging towards four lanes of 100 Gb on the optical side and four lanes of 100 Gb on the electrical side. That's the convergence point next.
That's the next generation chip. That's also called a 400 Gb PAM4 chip. There's going to be two flavors of that for the industry. One is a 400 Gb, another one is going to be 800 Gb, basically eight lanes of 100 optical lanes and eight lanes of 100 electrical lanes. Yes, we are following through on the next generation chip.
We are working on a 5 nm solution, not a 7 nm solution, and I think we'll be the first ones out with the 5 nm solution based on what our industry knowledge tells us. We feel that the yields on the 7 nm do not use EUV lithography, and our analysis tells that the power and the yield performance of 5 nm is going to be superior to 7 nm, and the timing will be just right for 5 nm, and we have a lot of interest from the industry to do that. Okay?
Very good.
I never mentioned 7 nm, Tore, for that reason.
Got it. Okay. No, that's fair. My last question is back to Connected Home. With this work from home trend that you're seeing, are you also starting to see new products launch faster from some of your customers? I'm thinking about perhaps XB7 from Comcast. Could that potentially be a catalyst and an upgrade cycle for you? If so, are you starting to see some of those deployments already?
A very good question, Tore. You're absolutely right. They are trying to accelerate their XB7, there are several versions, but XB7 deployments. Hopefully, we are the beneficiaries of the share shift. Share shift is the wrong word, gaining our legitimate share and that should give us a growth, and we are seeing backlogs associated with that. Having said that, at the endpoint, basically at the customer throughput, that is still not in full steam, but we should expect the entire market to shift over to XB7 very rapidly. Similarly, you're seeing moves being made on the Wi-Fi side, with the other operators to enhance the Wi-Fi as well.
XB7 platform benefits from an increased, what I call Wi-Fi 6/6E deployment. The reason I talk about this is that it portends very well for us because with the acquisition of Intel's Connected Home assets together with our product portfolio and their gateway SoC. That's their Wi-Fi and our MoCA and Ethernet and their Ethernet, we would own the full platform, and we should really see a benefit of that shared growth, which we have suffered from not having in the last year or so. Yes, that is happening more rapidly, but not rapid enough for us, but still okay. We're happy with that. Okay.
Very good. Thank you.
Thank you. We've reached the end of our question- and- answer session. I'd like to turn the floor back over to management for any further or closing comments.
Thank you, operator. Just want to note here that we'll be participating at the BMO Virtual Technology Summit on August 24th and 28th, at the Jefferies 2020 Virtual Semiconductor, IT, Hardware, and Communication Infrastructure Summit on September 1st- 2nd, and the Deutsche Bank Technology Conference, September 14th- 15th. Just want to reemphasize that all these conferences are virtual, and we hope to connect with many of you there. With that said, I want to thank you all for joining us today, and we look forward to reporting on our progress to you next quarter. Hopefully, sooner than that. Thank you very much.
Thank you. That does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.