MaxLinear, Inc.
MXL · NASDAQ-GS
Next quarter
Expected to report Jan 28, 2027 — estimated from last year’s reporting date.
Consensus is $0.57 EPS for Dec 2026 across 3 estimates, ranging $0.57 to $0.57.
MXL Sep 2026
- 34.38%
- -2.79%
- $0.32
- $0.43
- —
- $218.06M
Reported results
- $218.06M
- 58.73%
- $30.23M
- 13.86%
- $28.90M
- $0.30
Highlights
- Revenue inflection: Q3 revenue was $218.1 million, up 29% sequentially and 72% year over year, as infrastructure sales reached $124.9 million.
- AI infrastructure mix: Infrastructure grew 210% year over year to 57% of revenue, making it larger than the company’s other revenue categories combined.
- Profitability recovery: GAAP operating income was $30.2 million versus a $4.2 million loss in Q2 and a $41.3 million loss a year ago; non-GAAP operating margin expanded to 29.5% from 22.3% and 12.1%.
- EPS reporting discrepancy: The supplied expectations data lists reported EPS of $0.43 versus $0.32 consensus, a 34.4% beat, but the release reports GAAP diluted EPS of $0.30 and non-GAAP diluted EPS of $0.62. The stated beat therefore does not match the release’s GAAP EPS.
- Q4 acceleration: Management guided to revenue of $240 million-$260 million, implying roughly 10%-19% sequential growth, led by infrastructure; broadband and connectivity are expected to decline seasonally.
- Optical outlook raised: Management raised its 2026 optical data center revenue outlook to $250 million-$270 million, citing Keystone PAM4 volume ramps and bookings visibility extending through 2027 and into 2028.
- Capacity and liquidity: Operating cash flow was negative $13.6 million in Q3, including substantial wafer prepayments; the revolver was expanded by $70 million to $200 million, with $40 million drawn at quarter-end.
Analysis
MaxLinear’s Q3 was a sharp growth and profitability inflection, driven overwhelmingly by AI data-center connectivity. Revenue of $218.1 million rose 29% sequentially from $168.8 million and 72% year over year from $126.5 million. GAAP operating income recovered to $30.2 million from a $4.2 million loss last quarter and a $41.3 million loss a year ago; net income was $28.9 million, versus $1.8 million and a $45.5 million loss, respectively. GAAP gross margin reached 58.7%, while non-GAAP diluted EPS was $0.62. The supplied expectations data says EPS was $0.43 against $0.32 consensus, but that reported figure conflicts with the release’s GAAP diluted EPS of $0.30, so the stated 34.4% surprise is not comparable to the release’s GAAP result.
Infrastructure revenue of $124.9 million, up 210% year over year, now represents 57% of sales and exceeds the rest of the business combined. Management raised its 2026 optical data center revenue outlook to $250 million-$270 million and expects another significant step-up next year, while emphasizing foundry capacity constraints and customer orders extending into 2028. Q4 revenue guidance of $240 million-$260 million points to continued sequential growth, though broadband and connectivity are expected to soften seasonally. The ramp is consuming working capital: Q3 operating cash flow was negative $13.6 million, and MaxLinear increased its revolving facility to $200 million to support wafer commitments and demand.
AI infrastructure ramp
The quarter’s growth was concentrated in infrastructure, where revenue climbed to $124.9 million from $40.3 million a year earlier. It accounted for 57% of sales, compared with 32% a year ago, and was larger than the other categories combined. Management attributed the surge principally to optical data-center products, alongside high-performance analog and wireless backhaul shipments.
- Keystone: The 100-gigabit-per-lane PAM4 DSP platform is ramping in high-volume production across multiple hyperscalers and supports current 800G optical deployments.
- Customer and capacity visibility: Management cited bookings extending through 2027 and into 2028, with optical lead times of 26-28 weeks. It identified foundry capacity, rather than optical component supply, as the key constraint, and noted that customers do not have long-term purchase commitments.
- 2026 optical outlook: The company raised its optical data center revenue outlook to $250 million-$270 million.
Earnings and margins
Revenue growth converted into a substantial operating recovery, with GAAP operating income of $30.2 million after losses in both comparison periods. The sequential improvement reflected much higher sales and improving mix, while operating expenses declined from Q2 on a GAAP basis. Non-GAAP measures also showed meaningful operating leverage, though they exclude, among other items, stock-based compensation and acquisition-related costs.
- Gross margin: GAAP gross margin was 58.7%, up from 57.8% in Q2 and 56.9% a year ago; non-GAAP gross margin was 60.0%, versus 59.5% and 59.1%. Management cited favorable product mix and said infrastructure mix could support further progress.
- Operating leverage: GAAP operating expenses were $97.8 million, down from $101.8 million in Q2 and $113.2 million a year ago. Non-GAAP operating income was $64.3 million and margin was 29.5%, versus $37.6 million and 22.3% last quarter.
- EPS basis: The release reports GAAP diluted EPS of $0.30 and non-GAAP diluted EPS of $0.62. The supplied expectations data instead identifies $0.43 as reported EPS and claims a 34.4% beat on $0.32 consensus; that comparison conflicts with the release’s GAAP figure.
Next-generation products
Management framed the current 800G ramp as the foundation for a broader 1.6T and adjacent-interconnect opportunity. Rushmore 200-gigabit-per-lane PAM4 products are in qualification, with initial revenue expected in 2027 and a stronger ramp in 2028. The company said higher-speed products can increase content: management expects DSP average selling prices to roughly double from 800G to 1.6T, with additional potential from attaching its TIA.
- Rushmore and Washington: Rushmore targets 1.6T optical architectures; Washington is a 200-gigabit-per-lane TIA intended for DSP optics and linear optical configurations. Management expects initial Washington revenue in 2027, followed by a stronger volume ramp in 2028.
- Annapurna and broader content: Annapurna targets 1.6T electrical interconnects, including cable and onboard retimer applications; management also discussed rack-level telemetry and power-management products. These product families extend the opportunity beyond optical DSPs.
- Other growth programs: The XGS-PON inter-data-center control-plane design win has completed qualification, with initial deployments expected in 2027. Panther storage accelerator revenue is expected to roughly double in 2026, with another potential increase in 2027.
Q4 guidance
- Revenue: Q4 guidance is $240 million-$260 million, versus $218.1 million in Q3, or approximately 10%-19% sequential growth at the range endpoints.
- Mix: Management expects strong infrastructure growth, led by data-center optical interconnects; broadband and connectivity are expected to decline seasonally, while industrial and multi-market is expected to increase.
- Margins and costs: GAAP gross margin guidance is 58%-61% and non-GAAP gross margin 59%-62%. GAAP operating expenses are expected at $96 million-$101 million and non-GAAP expenses at $65 million-$70 million.
- Per-share inputs: The company guided to interest and other expense of $3.5 million-$4.3 million, a $1.5 million GAAP tax benefit, a $1.5 million non-GAAP tax provision, and 99.7 million diluted shares.
Cash and capacity
The ramp required substantial investment in working capital and supply assurance. Q3 operating cash flow was negative $13.6 million, compared with positive $4.8 million in Q2, as the company made wafer prepayments and funded rising inventory needs. Management said prepaid assets should continue to increase alongside revenue expectations. Total cash, cash equivalents and restricted cash ended the quarter at $109.9 million.
- Revolver: An October amendment added $70 million of commitments, increasing the facility to $200 million; $40 million was drawn at September 30. The amendment also lowered the liquidity covenant threshold from $80 million to $60 million.
- Working capital: Inventory was $113.7 million at quarter-end, up from $105.5 million at June 30; days of inventory improved to 111 from 123, while days sales outstanding rose to 31 from 28.
- Cash demands: Nine-month operating cash use was $17.7 million, driven in part by working-capital investment that reduced cash flow by approximately $137.6 million, primarily from wafer prepayments and inventory purchases.
Other end markets
Growth outside infrastructure was mixed. Connectivity revenue increased year over year, while broadband remained below the prior-year level, though management described sequential progress in broadband and connectivity during Q3. It expects broadband growth in 2027, supported by PON market-share gains and customer spending, but anticipates seasonal softness in Q4.
- Broadband: Revenue was $53.3 million, down 8% year over year from $58.2 million; management cited lower cable-data and broadband SoC shipments, partly reflecting customers’ transition to new standards.
- Connectivity: Revenue was $24.7 million, up 30% year over year from $19.0 million, driven by Wi-Fi and Ethernet shipments.
- Industrial and multi-market: Revenue was $15.1 million, up 69% from $8.9 million a year earlier, reflecting higher shipments of analog and component products.
