Global Growth Conference. My name is Quinn Bolton, and I'm the semiconductor analyst for Needham. It's my pleasure to host this fireside chat with MaxLinear, headquartered in Carlsbad, California. MaxLinear is the leader in market applications. Joining me from the company is Steve Litchfield, Chief Strategy Officer and CFO. We also have Leslie Green in the audience who handles investor relations. Steve, in terms of driving new revenue growth?
Sure, sure. Yeah, no, thanks, Quinn. And yeah, so you're right. We have been, I guess it's been about seven years now.
Perfect. Data center is pretty hot right now, so I'll sort of jump in with some of the data center questions. Reviewers.
Sure. Yeah. So, I mean, it really kind of ties back to some of the kind of analog RF differentiation that we had in the beginning, the SerDes capability that the companies had. And so, yeah, relatively new, but we're getting a lot of traction with our new Keystone product for 800G, and that's where we're seeing most of the revenues this year.
Giving you that visibility or confidence that this is going to be a nice growth opportunity.
Right. Yeah, so I mean, we've been growing the business. It's kind of been really focused around the optical transceivers. Naturally, U.S. hyperscalers are one of the big focus areas, but even just Tier 1, Tier 2 data centers in the U.S., as well as in China, ultimately selling into the data centers, and so that's some relationships that we've developed over the last several years that I think does have some influence, but we got to really.
$25 million to maybe as many as $50 million this year. That's putting some constraints and maybe enabling the semiconductor vendors to sort of pick and choose for guys like the InnoLight, the Coherent, Eoptolink, given this environment where you can become a more important sort of partner to them.
You know, yes, it is helping in general. I think it's, I mean, we get this question a lot. It's like, you know, why do they, you know, we're kind of that third guy. Samsung solution there. So I think that's yet another, you know, I think it kind of validates the strategy there, and customers really like. Are they picking up? Yes. I mean, they were really picking up last year. I mean, we saw that. So I think that's what's driving the revenue this year. I don't think the tightness of supply or anything. Engaged with all the top 10 there. I would say where our efforts are is probably on the top three or four because they're really moving the needle there.
I think it's the same advantage, lower power consumption. You mentioned the Samsung foundry relationship, but just sort of, what's your expectations in terms of?
I think of Q2 a lot like, I mean, those Qualcomm's design wins, if you will, moving to production this year with more of the revenue ramp.
I know we're late in the quiet period. I'll ask if you can't answer. Understood. I think you previously talked about sort of DSPs being in the 60-70 million range in calendar 2025 with environment, do you still feel that those are reasonable expectations, or would you rather punt that until earnings?
Don't mind. I mean, we are excited. Bookings rates have certainly picked up because customers acknowledge, you know, it's tough to get product right now.
I guess if there are perhaps skeptics in the audience.
You know, people are placing orders. But I mean, for the optical products, probably 28 weeks. And so we feel good about that. So we've got good visibility and.
Last question on the DSP, you know, $100 million plus, hopefully in 2026. Where do you see that going? What's the opportunity, say, over the next two to three years?
So I think that. I think, can it continue to double? I think it, you know, has the potential to. The market is certainly going in that direction. A couple of.
Discuss the products you're selling into each market and sort of MaxLinear's differentiation in access as well as backhaul.
Sure. So maybe going back to your original. Start out with the beachhead. That was the modem initially, and we're still really the only merchant modem manufacturer out there. Built that product, sold as well. So the content increase has kind of been two- to threefold in a market that is growing. And you know, even in some of these markets, and I can maybe talk overbuild or you know, big CapEx over the last two years, we've not seen much. I think as we think about 2026, we start to see that recover.
As it grows, does it sort of smooth out and become a little bit more predictable? Or, you know, do you always think it's going to have a little bit of lumpiness to it?
Yeah. I mean, I've been in. I mean, you know, you talk about access, like the 5G, for example. You know, you'll see the same thing with 6G. But as the markets get a little bit bigger, you can, you know, see hopefully.
Access and the backhaul business?
Yeah, I mean, we don't break it out specifically. I mean, it's, I think you're familiar. I mean, it's run close to.
Secured two design wins on the access side with 5G wins with two major North American telecom providers. Can you give us a sense? Sort of what's the timeline of.
Winning, you know, winning more, those are kind of big lighthouse wins that now others are kind of pointing to, and they're confident that we can, you know.
Where do you see O-RAN traction, you know, kind of relatively in the bigger, you know, 5G range?
Yeah, yeah, yeah. I mean, the Pegatron one's a nice one. It's a good thing, and so we're trying to work with our customers in order to get the message out. But I think it's just a good example of some of the wins that we have with Sierra. I think.
Maybe to wrap up, wireless in general, sounds like the CapEx environment hopefully stabilizing and improving. You've got some of the design wins. You talked about ramping.
Got better for 26. So I feel like, you know, it's much better here. And finally, we're starting to see some more CapEx dollars flow as well. So I think it'll be accelerator. I mean, it's really an offload capability that we have. So it reduces the need for more CPUs or more cores. Offload capability is more appealing to a lot of customers. The real competitive landscape is the bigger guy there is instead of the QAT solution. So I think that speaks to the capability that we have. But I see us continuing to grow. We recently. But from an architecture standpoint, their customers are going in this direction. And so we certainly want to partner with them. And they're kind of pushing a lot of customers our way. So it's really.
I mean, I guess, you know, the QAT offering from Intel is running on their CPU cores, right?
Correct.
So yes, they can do the compression, but you load the cores to do more, hopefully, workloads.
That's right.
Right. Okay.
That's right.
You talked about the AMD relationship, I think pretty well, which was one of my questions. I think another.
People that are doing it, but then as you go further, you're starting to see more data center guys that, you know, want to have that same capability, and so a lot of our engagements now are.
Cards based on Panther, would they look for you to do the entire card solution?
Both. I mean, I think there are examples out there where they're doing their own bigger. I would, you know, I don't want to get too far ahead of ourselves. I mean, I think most of that's going to be consumed by custom silicon. But.
Recently introduced, I think it was in the third quarter, your Panther V solution, kind of just equipped Panther V, or I think the last was Panther III.
Panther 3. That roadmap is evolving, growing. As we get more traction, we're seeing more applications out there, more use cases that want to use the. Over $50-$100 million.
Perfect. All right. I think that kind of wraps up my infrastructure questions. Maybe moving on to broadband and 25%-ish growth in broadband and 40%-ish growth in connectivity?
Yeah. So it's a little bit of everything. Again, that transitional year in. This, Quinn, we, you know, a couple of three years ago, we were doing less than $10 million. That's, you know, upwards of $50-$60 million now. So we're making nice progress there. 2027, not because we don't necessarily guide in these areas. But, you know, as we look into 2026 and 2027, we're starting to see more CapEx dollars really pick up. It's not so much wins, market share gains, you know, PON wins, upgrades on Wi-Fi 7. I mean, there's a number of things that drive improvement over the next couple of.
Your content gains, how you're feeling about your competitive position relative to Broadcom and DOCSIS 4.0, and maybe the content uplift that you get as DOCSIS 4.0?
Not sustainable, probably not surprising anyone in the room. That being said, we are winning more market share, as I pointed out on the PON side. And I think you make a really good point on the DOCSIS upgrade. So that's another driver. I mean, we started shipping DOCSIS 4.0 in 2025. It's a small number, but we'll see more of that in 2026 and really probably more in earnest in 2027. We're seeing those upgrades happen now. If you recall, maybe walk through this for everybody, but most of the upgrades to date on DOCSIS 4.0 or even the 3.1 Ultra have been at the head end, the amps, the nodes, you know, the infrastructure piece that has to be built out first. We participate on the CPE side, so the gateway that's in the home.
So the way the MSOs typically operate when they roll out these upgrades is they spend all the CapEx, kind of have a set amount of CapEx dollars. They spend that on the front end of it. And then over time, that piece goes down and then the CPE piece goes up. So we'll start to see that in 2026 and follow through in 2027. So I don't think it's huge in 2026, but I think it definitely picks up even more in 2027. And recall that our ASPs are upwards of 40-plus% increase with the DOCSIS 4.0 over DOCSIS 3.1.
Probably a year plus ago, BEAD funding was sort of thought to be a potential driver. I'll be honest, I haven't heard as much about it recently. Is that still an opportunity? Do you feel that that catalyst may be going away, or do you still think there's some pretty good.
Who knows?
I mean, you know, spending that may help.
Joking aside, I mean, yeah, I mean, it was talked about a lot, like I said, maybe a year and a half ago. It really did go away. Yeah, we've heard some of our customers talk about it's driving some of the upside that they're seeing. So yeah, I mean, it sounds like it will get a, you know, we'll see some uplift from that.
Okay. You had mentioned on the PON side, and you've talked about this before. You've got a win now, gateway win with a second leading tier one vendor. Can you give us sort of an update? How does that, you know, when does that come to market? I think it's coming relatively soon. How big of a driver of the PON business, you know, is that? Is that going to be a majority of the ramp going forward, or do you have a nice portfolio behind this, you know, this particular win? So it's nice, but it's not.
Yeah, yeah. I mean, look, I think it's. I mean, I mentioned that kind of lighthouse win. I mean, it's the big North America guy. And so it's great. I mean, it's a business that we had never had. It was really our competitor had it 100% for years and years and years. So I think in some respects, it just demonstrates, you know, the customer's interest, willingness to move with our solution. So I think that in itself is big. Others reflect on that as well. They, hey, they've ramped their Wi-Fi 7, they ramped their pod product. With this guy, it really proves, you know, that they are more than capable. So I think it's been helpful from that standpoint. You asked when it ramps. I mean, yeah, it's late Q1 is when we'll start to see it Q2.
That's our expectation based on the feedback.
I know in the cable space, many of the big MSOs will have multiple sources of supply and ODM partners and silicon partners. Is this Tier 1 PON ramp, is that 100% MaxLinear on the next generation platform, or are you just coming as a second supplier to the incumbent?
Yeah. So I mentioned our competitor had 100% of this business, and we were able to take that. I think ultimately they'll end up with two. I think it is headed in that direction. I think we just want to run as fast as we can and consume as many of those products as possible right now. You ask about the other guys. I mean, there's certainly, I mean, globally, there's a lot more opportunities that we are pushing and driving. We're seeing design wins. I mean, I think that's something that, you know, over the last couple of years with broadband, you know, just so depressed and so much inventory out in the channel, I think, you know, a lot of folks have kind of lost sight of market share gains and things like that just because there was inventory sitting in the channel.
And I think what's been encouraging for us as of late is you're seeing a lot more RFPs. We're winning more RFPs. We're winning business that we've never had. And that's exciting, you know, as the recovery happens.
Right. Perfect. Maybe just a last question on sort of broadband connectivity. Talk about the 2.5 gigabit Ethernet business. You've got wins with North America OEM on the enterprise side, but just sort of thoughts on the Ethernet ramp.
Yeah. So Ethernet's another nice, I call it, I mean, it's a product line. It's a great product line. It goes up against a couple of peers that aren't super focused around two and a half gig. And so we've got something that is really differentiated. It's on our gateways, but I think to some degree, a little more exciting than that is the broadening out of our two and a half gig offering. We're winning on enterprise. There's a lot of enterprise switches that need two and a half gig. There's a lot of industrial applications, small business applications that we're winning on. That goes well beyond broadband, as you know. And there's what, a billion plus ports out there of one gig SFP's and switches that are going to upgrade to two and a half gig.
And so the more of those we just continue to win, you know, we'll continue to see revenue.
Sounds like it can be a nice long tail kind of business.
Absolutely.
Okay.
Absolutely.
Industrial and multi-market was a tougher market for you in 2025. I think we estimate it down about 50% in the year. Discuss some of the headwinds you saw last year, and do you think, you know, as we go into 2026, are those headwinds beginning to abate?
Yeah. Yeah, so 2025 was a tough year, the first half of the year even. So a fair amount of this goes into China. And we saw a lot of pricing pressure in China. We also had some export control challenges as well, which the year-over-year numbers anyway reflect that in 2025. So that was a headwind. I think no more export control issues. Knock on, I mean, when I say that, yes, there will be more export control issues. But with regard to these product lines, we don't have licenses. And that was the problem last year. Now, could they put more people on the Entity List? I mean, they could. On the pricing side, which I would say probably had the bigger hit to us, I mean, pricing just went way down. There were a few areas where we just kind of chose not to participate.
I think you're seeing this from some of our peers now that have chosen to raise prices pretty aggressively. I think that's, you know, kind of acknowledging there's certain places in the market where there is some low-end China supply, and they can certainly push that. I think a big chunk of the market, I would argue maybe even the majority of the market, they don't have that solution. And so I think our approach has been good in that, you know, hold the line on pricing, don't compete where, you know, kind of in the mud. And that's not the place we want to be. We want to stay on the higher end. We want to stay in these markets. We're not going away. So all in, I think things have kind of stabilized.
I think we'll get back to kind of a somewhat normalized, you know, 4%, 5%, kind of mid-single digit growth this year.
Okay. You had mentioned that the price declines. I think both Texas Instruments and, I know, Analog Devices has been vocal about raising channel pricing effective February 1st. Sounds like that is sort of helping the outlook for the business, at least on a pricing front.
Yeah. I mean, you know, so having gone through this last year, and I mean, we, you know, also chose to kind of hold the line. No, we weren't necessarily raising prices, but we weren't going to just kind of go down in the mud with everyone else. And I think TI and ADI did come out and ultimately raise. And so, yeah, that's certainly been helpful.
Got it. Just moving to the last few general questions. You know, as you think about the mix shift over the next few years to the infrastructure businesses, how does that change the gross margin profile of the business?
Yeah. Generally favorable. Our infrastructure business runs a little higher than the corporate average. Not a ton higher, but certainly higher. And so I think you'll, I mean, I think you're familiar, Quinn, but our gross margins kind of ticked down over the last, what, two years as revenues came down. The mix kind of worked against us. That's starting to turn the other direction. So we're making some progress. I expect this year, you know, hopefully we're going to end the year starting with a six instead of a five. So that'll be good. And as more infrastructure growth that we see, you know, hopefully we can start to move that up even further.
Perfect. What's your approach as the business begins to recover to managing OpEx? I know through the downturn, you took a lot of OpEx offline. Some of that was because you had ended some big projects like Wi-Fi 7 and optical DSP. Well, you're probably going to continue to spend on optical DSP, but there were a number of platforms that you sort of, you know, got through the project and so you didn't need to repeat that spending. But as revenue rebounds in 2026 and beyond, how do you think about managing OpEx? You know, is there any sort of guidance you can give for investors?
So I mean, our general guideline here is to grow the OpEx at about half the rate of the top line. That's kind of a general parameter that we look at. I think as I look at 2026, you're right, Quinn, we caught about 20 plus, a little over 20% of the OpEx going back about a year and a half ago now. That took us about six months to kind of all play out. But you're right, some of that was because there was some heavy lift on the Rushmore product and a few, Wi-Fi 7, a few other projects that have kind of come down. I think we're really more into steady state at this point. So I don't feel like we need some big step up in OpEx.
I think this year, I mean, you're likely. Investors likely see you start to see some more leverage in the model and kind of getting back to some of the operating margin profiles that we'd seen in the past and what we had expected, that we expected MaxLinear.
Perfect. I'll ask, I know you're very limited in what you could say on Silicon Motion, but just sort of updated thoughts or just reiterate your thoughts on timing as to when that reaches a conclusion.
Yeah. No change here. Arbitration started in Q4 in October. Would expect to have some resolution mid-year.
Okay. We've gotten some questions from investors in advance of that resolution. The company announced a $75 million buyback in November. Obviously, it seems like a positive signal. Maybe just talk through the rationale for the timing and what's driving that buyback.
Yeah. Look, I mean, I think the board just kind of felt pretty straightforward. I mean, you know, stock trading where it is, the company, I mean, having gone through the last couple of years, really correcting the OpEx, had a big cut on the OpEx side. Our outlook on the revenue side is much better, much stable, much more certain. I mean, I mentioned the visibility that we have. So I think between the visibility that we have on the revenue side, the profit increases that we expect to see this year, the cash position improvement, you know, dramatically different than, say, 18 months ago. And so I think the board feels better about that. Stock where it is, hey, they want to kind of, you know, show that to investors. And ultimately, I mean, we've had buybacks in place before.
The idea of kind of offsetting some of the dilution that we have just for employees, we'd like to, you know, kind of address that on an ongoing basis.
Perfect. Last question for me. As we approach the resolution or the conclusion of the SIMO arbitration, and you get that in the rearview as Chief Strategy Officer, what's your appetite for new M&A? What are you thinking about tuck-ins, more transformational, just any big picture thoughts as you might look to get back into the business?
It is exciting to kind of come to conclusion here and kind of getting this behind us. Our core business, I think most importantly, is now improved. The shift over to infrastructure. So I think the way we're thinking about how do we accelerate that effort. So yes, eventually, I don't think there's anything, you know, tomorrow. But as the balance sheet continues to improve and profitability, you know, improves, yeah, I think we would expect to be back in the market on that side.
Perfect. I think we got time, maybe a minute or two for questions from the audience if anyone has a question. Anyone? All right. I know the elevators are always fun here at the palace. So we'll wrap it here and let you get to your next meeting. Thanks, everybody, for joining us.