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Greetings, and welcome to the MaxLinear Q3 2026 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Leslie Green of Investor Relations. Thank you. You may begin.

Thank you, Shamali. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear's third quarter 2026 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 your questions. Our comments today include forward-looking statements within the meaning of applicable securities laws including statements regarding our guidance for the fourth quarter of 2026, including revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, GAAP and non-GAAP interest and other expense GAAP and non-GAAP income taxes and GAAP and non-GAAP diluted share count.

In addition, we will make forward-looking statements relating to trends, or execution of our business plan and potential growth and uncertainties in various product and geographic markets, including, without limitation, statements concerning the future financial and operating results, opportunities for revenue and market share across that market share gains across our target markets, new products, including the timing of production and launches of such products, demand for the adoption of certain technologies and our total addressable market.

These forward-looking statements involve substantial risks and uncertainties, including risks outlined in the Risk Factors section of our recent SEC filings, including our most recent annual report on Form 10-K and our Form 10-Q for the quarter ended September 30, 2026, which we filed today. Any forward-looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward-looking statements. The third quarter 2026 earnings release is available in the Investor Relations website at maxlinear.com. In addition, we report certain historical financial metrics, including, but not limited to, gross margin, income or loss from operations, operating expenses interest and other expense and income tax on both the GAAP and non-GAAP basis.

We encourage investors to review the detailed reconciliation of our GAAP and non-GAAP presentations and 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 changes, including stock-based compensation and its related tax effects as well as potential impairments. Non-GAAP financial measures discussed today are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures. We are providing this information because management believes it is useful to investors as it reflects how management measures our business.

Lastly, this call is also being webcast, and the replay will be available on our website for 2 weeks. And now let me turn the call over to Kishore Seendripu, CEO of MaxLinear. Kishore?

Thank you, Leslie, and good afternoon, everyone. As the ongoing AI infrastructure build-out momentum continues, and as AI data centric clusters continue to scale to unprecedented size and bandwidth requirements, we believe MaxLinear is emerging as a key enabler of next-generation connectivity technologies. Demand for our optical data center connectivity and solutions continues to strengthen, and we believe MaxLinear is in the early innings of a multiyear AI-driven growth cycle. Against this backdrop, our data center business continues to outperform our expectations.

In Q3, overall revenue grew 72% year-on-year driven by accelerating adoption of our optical PAM4 products, expanding customer engagements and strong execution across our infrastructure portfolio. Infrastructure as a category grew 210% year-on-year and which is now larger than the rest of our revenue categories combined. Reflecting this momentum, we are raising our 2026 optical data server center revenue outlook to $250 million to $270 million. With strong visibility and bookings extending beyond 2027, we expect another significant step-up in revenue next year. Keystone, our 5-nanometer CMOS 100 gigabit per lane PAM4 CDs family continues to ramp rapidly in high-volume production across multiple hyperscalers. Its industry-leading power efficiency and performance position MaxLinear at the center of today's 800-gig optical infrastructure deployments.

Looking ahead, we are seeing accelerating customer activity around Rush mall-based 200 gigabit per lay in PAM4, 1.6 terabit architectures where qualification programs are advancing towards expected production deployments in 2027. Rushmore is building on Keystone's foundational success and is also expected to become a major multiyear growth driver. Big Sky, our family of next-generation 400-gigabit per lane, 3.2 terabit optical and electrical PAM for interconnect technologies will further capitalize growth as network as data center network speeds continue to accelerate beyond 200 gigabit per lane.

Beyond PAM4 3D's optics, we continue to broaden our AI infrastructure footprint across optical and electrical interconnects, [indiscernible], control plane connectivity, telemetry and power management. This strong expansion of content inside the AI data center stack positions MaxLinear to participate across multiple layers of future AI data center architecture. Already unapproved our 1.6 terabit electrical interconnect product family addresses 1.6-terabit active electrical cable and onward retimer applications for AI scale-up. Washington, our 200 gigabit per day in TIA platform not only supports PAM4 DSP-based optics, but [indiscernible] linear pluggable optics consisting of NPO and CPO solutions. We expect initial Washington and unapproved revenues in 2027, followed by a stronger volume ramp in 2028.

We are also excited about our AI RAC Commander portfolio consisting of USB, PCIe UR connectivity bridges used for telemetry power management and protection solutions for rack scale AI infrastructure. Rack Commander expands our role beyond data movement and into the control plane of the AI data center. Customers require advanced telemetry monitoring, connectivity and power control capabilities to maximize performance and efficiency, which is critical for infrastructure management. We believe this represents a significant long-term growth opportunity while expanding our strategic footprint.

Additionally, our XGS PON hyperscale data center design win, which serves as the control activity network across multiple data centers has completed qualification. Supported by secured backlog, we expect first deployments of this interdata center control plane solution to start in 2027. Separately, Panther, our storage accelerator platform continues to gain momentum as customers seek more efficient AI infrastructure by significantly increasing effective storage utilization and unlocking KV cash capacity for agent AI applications, Panther and able to support larger AI inference workloads without increasing storage infrastructure spending. We expect Panther revenue to roughly double this year with potential for another meaningful increase in 2027.

While AI data center remains our primary growth driver, we expect edge AI-driven upgrades to also drive growth in '27 and '28 for our wireless infrastructure and broadband access and connectivity solutions. These include Sierra single-chip 5G RAN remote radio unit solution, our millimeter and microwave backhaul RF and modem SoCs and XGS PON fiber broadband home gateways. Both broadband and connectivity categories delivered sequential revenue growth in Q3, driven by large-scale deployments of fiber pawn and WiFi 7 gateways at major Tier 1 service providers in North America and Europe.

In closing, accelerating hyperscale deployments, increasing optical connectivity content, new product ramps and broader participation across the AI infrastructure stack give us confidence that MaxLinear is still in the early stages of a significant growth cycle. Our strategy is focused on strengthening our leadership in high-speed data center connectivity, expanding into adjacent infrastructure markets and increasing your content, share and strategic relevance with hyperscale customers with strong customer momentum, great backlog visibility and a differentiated technology portfolio, we believe MaxLinear is well positioned to deliver sustained growth and long-term shareholder value.

With that, let me turn the call over to Steve Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer. Steve?

Thanks, Kishore. Total revenue for the third quarter was $218.1 million, up 29% and from $168.8 million in the previous quarter and up 72% from $126.5 million in the third quarter of 2025. The Infrastructure revenue for the third quarter of 2016 grew to approximately $125 million. Broadband revenue grew to approximately $53 million. Connectivity revenue was approximately $25 million. Our industrial multi-market revenue was approximately $15 million. GAAP and non-GAAP gross margin for the third quarter were 58.7% and 60% of revenue. The delta between GAAP and non-GAAP gross margin in the third quarter was primarily driven by $2.5 million of acquisition-related intangible asset amortization.

Third quarter GAAP operating expenses were $97.8 million, and non-GAAP operating expenses were $66.5 million. The delta between GAAP and non-GAAP operating expenses were primarily due to stock-based compensation and performance-based equity accruals of $28.8 million combined and acquisition-related costs and other costs of $2.3 million. With the strong growth in our business, coupled with continued spending discipline, we have delivered significant improvement in our GAAP and non-GAAP operating margin over the past 12 months. GAAP operating margin for Q3 2026 was 13.9% and non-GAAP operating margin in Q3 was 29.5% of net revenue.

GAAP and non-GAAP interest and other expense during the quarter was $2.1 million and $2 million. GAAP diluted EPS for Q3 2026 was $0.30 per share. Non-GAAP diluted EPS was $0.62 per share. In Q3, net cash flow was used in operating activities was approximately $13.6 million. We exited Q3 of 2026 with approximately $109.9 million in cash, cash equivalents and restricted cash. This prepayment for wafer supporting rising demand for our data center products for which we have committed order backlog throughout 2027. Our days sales in Q3 was approximately 31 days versus 28 days in the previous quarter. Our days of inventory was down in the quarter from 123 days to 111 days.

Finally, today, we announced that we have amended our existing credit agreement to increase the amounts available under the revolving credit facility by $70 million to $200 million. With this facility, our total available liquidity has much improved, giving us additional flexibility to address further customer demand and other growth opportunities. This concludes the discussion for our Q3 financial results. With that, let's turn to our guidance for Q4 of 2026. We currently expect revenue in the fourth quarter of 2026 to be between $240 million and $260 million. Looking at Q4 by end market, we expect strong growth in infrastructure driven by data center optical interconnects, we expect broadband and connectivity end markets to be down seasonally while industrial multi-market end market is expected to be up.

We expect fourth quarter GAAP gross margin to be approximately 58% to 61% and non-GAAP gross margin to be in the range of 59% and 62% of revenue. We expect Q4 2026 GAAP operating expenses to be in the range of $96 million to $101 million. We expect Q4 2026 non-GAAP operating expenses to be in the range of $65 million to $70 million. We expect both our Q4 GAAP and non-GAAP interest and other expense to be in the range of 5 million to $4.3 million. 1.3 -- I'm sorry, $1.5 million tax benefit on a GAAP basis and non-GAAP tax provision of approximately $1.5 million. We expect our Q4 GAAP and non-GAAP diluted share count to be approximately $99.7 million each.

In summary, our quarterly performance highlights the continued strength of our optical product portfolio and the accelerating momentum across several growth drivers within our infrastructure business. The progress and innovation we have achieved in this area have been transformative, and we believe we remain in the early innings of a multi market by expanding revenue and increasing operating leverage. We're excited about the opportunities ahead and remain confident in our ability to deliver sustainable long-term value for shareholders. With that, I'd like to open up the call for questions. Operator?

[Operator Instructions]. And our first question comes from the line of Tore Svanberg with Stifel.

Kishore, Steve, congrats on the strong results. I guess my first question is on the PAM4 DSP side. You upped the number there for [indiscernible]. I mean based on my rough math, I think that's now -- it'll be running at about $100 million a quarter run rate. So as we think about '27, is EUR 400 million plus a good number? And how should we think about the mix next year between 800 gig and 1.6?

Yes. Tore, this is Steve. So I don't think we're planning to give guidance in the out year today. But certainly, I do believe you've seen us with some very strong growth coming from our optical DSP business. I think we're actually doing a really great job on the market share standpoint. And so I think as you look into 2027, you're starting to see the momentum pick up, and I would expect to see us outgrow the market in 2027.

Very good. And then as far as customer diversification, I noticed you didn't have any 10% customers this quarter. And I had a question specifically on your optical DSP business. How should we think about the composition there by amount of customers, module makers, geography, any color you could share with us on how diversified that business is becoming real time.

Thank you, Tore. I think when you go to the first order of diversificate for us is really exciting that now we are transiting from 800 gig fully established as a growth vehicle and market share gains. And we are in strong qual cycles on 1.6 terabit or Rushmore products, along with -- not just only in optical products, but we have a strong qual cycle on electrical products as well as the 1.6 terabit speeds. So that's the first layer of diversification. We will -- so we expect in the near-term Rushmore to start picking up revenue in 2027. And if you look to '28 and '29 is going to be a massive growth driver for us. In addition to Keystone at 800 gig still growing for us as well. So that's the first order of diverter.

The second part is that our revenues are quite broad-based. It's across all the major module makers, and we have a growing set of module makers are also engaged in 1.6 terabit beyond our 800-gig product lines. And the same applies on the data centers as well. Our penetration of geographically in Asia and the U.S. is increasingly now the momentum on the designing cycle is starting to shift towards 1.6 terabit I think the U.S. is in a more advanced phase of 1.6 terabit deployments. We naturally expect the U.S. to become an increasingly strong driver of value proposition in the optical module space as well.

Our next question comes from the line of Ananda Baruah with Loop Capital Markets.

Congrats on the continued good progress. It's cool to see. I guess, two, if I could, Kishore, just sort of sticking there on the hyperscaler diversification and maybe just part of a partly clarification as well. How much -- you said in the past, 1.60 production ships is really a mid-27% dynamic, how much of the business between now and then and 800G, if any, is from U.S.-based hyperscalers? And it just even added then I have a quick follow-up.

So Ananda, we have never broken down that revenue in that sort of we never do that. However, it's pretty broad-based. Suffice 2C as 1.6 terabit revenue start ramping with initial revenues actually in early 27 and a stronger ramp in the second half. The U.S. data centers will start picking very important in both -- on a static snapshot basis and also on a trajectory basis, so because the U.S. is the one that's going to add up 1.6 terabit, a much earlier cycle than the Chinese con parts, right? So I think that what we take extreme satisfaction and join is that 1.6 traction is quite across the board substantially.

And the U.S. data since they're just beginning to start ramping 1.6 terabit outside of an NDA and a Google either order, right? So -- and our supply diversity across the various speed nodes across 800 gig and 1.6 terabit on the supply lines, including the fabrication process, really puts us in a unique position where within our company, we are or competing a gross product line to the same technology node. So in a sense, we should be able to win this race in terms of making a major provider of 1.6.

That's good context. I appreciate it. That's helpful. And then -- the quick follow-up is you mentioned MPO, CPO. So is there a useful way for us to think about your SerDes participation, if even just kind of from like a paradigm approach, how involved do you expect to be in what ways you expect to be involved? The question has been coming up and it will be kind of relevant 12 months from now.

Okay. If you look forward, you see a future where all the Alphabet POs will be in coexistence with the PAM4 SerDes base, optical pluggables, right? And we have seen that the short line density and power consumption scenarios will drive a certain volume of the speed connections into to the optical-based what I call incarnations, right, be it or an LRO, right?

So if you look at the LRO, our DSP naturally lends itself into a full-blown participation. And we believe that in the U.S., LRO is a real option at the 200 gig per lane, and I have a major option in the 400 gig per lane as well. That's my particular view. And then if you look at CPO has gotten delayed because the challenge of the optics in a hybridized co-pack is configuration is a very huge problem, and therefore, I think NPO supplies what we were thinking about the advantages of maintenance, modularity, diversity of suppliers for the product as against being locked to the AC players on the switch side or the GPU side.

So I think it's a natural place where the ecosystem goes. So I think the NPA will be big. How big I cannot speak. But I would say on a snapshot basis in 2030, you should expect 60% to 70% pluggable, 20% NPL and 10% all various forms of it. That's my personal view, not a market view, but I think we'll be a major player in NPLs which will be the natural ideally suited for low-power applications versus an LPO in the future as the speeds increase.

Our next question comes from the line of Cody Acree with StoneX Financial.

Congrats on the progress. It's been a great performance. Kishore, maybe can you talk about your visibility into '27 if you're not going to talk yet about the scale of your optical ramp. Can you maybe just talk about your bookings or your lead time visibility for the next few quarters?

Steve, do you want to take a shot at that?

Sure. Yes, Cody. Look, we have great visibility. As I'm sure you've heard from [indiscernible], we're booking products throughout '27 into 2028 [indiscernible] for optical product or 26, 28 weeks. Customers are certainly coming in and placing orders out much further than that, just kind of given they want to secure supply. You've seen a lot of our upsides that we've delivered, I think you'll continue to see more of that growth in '27.

And Steve, maybe just continuing with you. Can you just bridge your next gross margin thoughts between mix, pricing, manufacturing costs and product transition over the next couple of quarters?

Yes, sure. So gross margin, as you know, we've been making some nice progress kind of moved up from 58%. We delivered on 60% this quarter, our guidance at 6.5%. So I think we're we'rereally seeing some nice progress kind of despite some of the cost increases that we're seeing across our entire ecosystem here, I guess. Some of that we've been able to pass along to the customer. And I think our cost structure is actually just very good. So as the mix continues toward more infrastructure products, I think you will see our gross margin continue to trend up. Thanks, Cody.

Our next question comes from the line of Christopher Rolland with Susquehanna.

Regarding DSP, last cycle, maybe the 400, 800 cycle was much more widely available transceivers had shorter lead times and people could wait for land power shell to be built before making what was kind of a last-minute order on optical. Do you guys view that as different now with longer lead times? And does this kind of perhaps create an effect where people are ordering ahead more significantly, perhaps even over ordering to -- they can't get their AI data center up without these transceivers. So does this become perhaps the golden screw that people are willing to purchase more than they might need just for the initial deployment?

So Chris I don't think so at all. Not at all, actually. And you have to keep this in mind that even in the supply chain, nobody is signing real long-term agreements. So you have strict discipline on lead time. There's a lot of manufacturing shortage. So it is in -- it is really naturally organizing the entire supply chain into very disciplined on -- you'll only get what you need now sort of behavior. So I don't think there's any double ordering. And then you get back to our DSP world. We are the only pure-play DSP provider in the optical pluggable. [indiscernible] capacities are allocated by companies by the major foundry, and if you are in 5 nanometer, for example, you're welcome to choose how you distribute your silicon between switch, pluggables, GPUs, TPUs and so on and so forth, right? So we every company gets to prioritize what is in their best

value interest. So I would say that, that is not the case at all, number one. Number 2 is that even to place over ordering the data since guys are very, very disciplined about creating pure supply chains. That means what I mean by that is the optics, the DSP for a particular qualification in a data center is very unique so that they don't cross corrupt the supply chain. So I think it's golden, it's not a screw. But it's a bulk. So there is a bold there that is really, really fastening the cantilever bridge quite well here. So that's for those in the [indiscernible] area. But yes, it's looking pretty good.

Excellent. Maybe a follow-up there and a second question. I guess, first of all, obviously, you guys have some unique 4-nanometer DSP capacity that others don't. Can you talk about how you see constraints in the optical market playing out? Is it DSP? Is it other parts, lasers, et cetera, if you could talk about your place there? And then secondly, DSP in the world of -- some believe it's less meaningful, would like your take, Kishore, as a technologist.

Okay. Chris, a lot of questions out there that you posed here to me. I will take the first one, which is basically really to supply. I think the optic supply is easing we are really constrained by foundries on the DSP supply. And the data center build-out is really accelerating. So if you sit here and talk, if the demand -- people talked about TAM units for optical pluggable, no matter what flavors in the order of 120 million units. Now they talk about '27, '28, maybe 200 million units. So I'm not keeping count anymore, right? So however, the fab capacity is not coming online. These are huge multiyear efforts. And so there's really, really a fab capacity shortage, I would say. And so the DSP supply is a pretty strong supply constraint. And we are really being -- and the opportunity on the CPO stuff really is a scale-up side, which is a greenfield opportunity for us. But I do believe the NPU is going to be the more bigger success driver than a CPO.

And in an NPU scenario to as well, as you go to higher longer term, they'd be DSP required just like an LRO configuration on the what you call a half DSP because we can all agree now that the LPOs are really, really a very small fraction, point technology and they don't have legs for the future. right? So we have a product portfolio that spans we have drivers and also, we have announced products along those various categories. So I feel we are very well positioned in whichever way the industry goes, then we'll have a full portfolio.

Our next question comes from the line of Karl Ackerman with BNP Paribas.

This is Sam Feldman on for Karl Ackerman. So first, based on your extended visibility into C8, can you provide any color on how we should think about the growth rate the relative growth rate between 800 and 1.60. And should we expect 400 bps to grow through calendar '27?

So I'll take that. I mean, with regard -- so this year, our optical growth is almost all in the first half, as we've stated and Kishore mentioned earlier, 1.6 starts in '27, but it will have a much bigger growth year in 2028. -- what is the mix in' '28? I mean I think it's substantially 1.6. Maybe you'll see 800 kind of trailing off. But potentially, it can sustain as well up until probably 2029. So I mean, we see significant growth in 2017 as well as 28% on both of those.

Our next question comes from the line of Quinn Bolton with Needham & Company.

Congratulations on the results and strong GSP outlook. I guess, Steve, for you, it looks like the prepaid assets on the balance sheet increased by about $50 million in the September quarter, I assume that, that's probably the large majority of that or your prepayments that you talked about. Given that it sounds like you're fairly well booked for calendar 2027 now, in the DSP business. Do you feel that the prepayments and the wafers you secured support that 2027 backlog? Do you still have more work to do in the fourth quarter in terms of prepayments and securing wafers to meet the demand you're seeing for calendar '27?

Yes. So I mean we talked about this a little bit before. Similar to others, I mean, the prepayments, mostly on the wafer side. I mean there's lots of other things going on out there. I mean, on the balance sheet isn't just TSMC. There's other things on prepayments as well that we don't break out. As far as -- I mean, I talked earlier about visibility in '27, yes. I mean backlog, as you would imagine, is very, very good in '27 and into 2028 prepaid. I mean, look, I expect prepays to continue to go up from here as our revenue projections continue to go up as well. So I think that's part of the reason why we increased the revolver itself, just to make sure that we can capture all of that upside capacity that's coming from increased market share that we've gained.

Got it. And then a follow-up. Steve, I think in some of the investor conferences over the past few months, you estimated your DSP share currently maybe in the 5% to 7% range. Do you think you're at the high end of that or potentially above that by the end of 2026, just based on the strong backlog you're seeing and the increase in the DSP forecast this year?

This is Kishore. I think it's very hard as to be [indiscernible] yes, thank you. I think it's very hard to us to make share given the accelerating demand on units as well. So if I'm looking backward, then I think we are well above the number. If I'm looking forward, maybe we made more progress beyond that 1%, but I don't know at what level we are. So can I say what we will look like 2 years from now? Sure. It should be in the teens for sure, right? And so I think that's a very backward-looking number. on a share percentage basis on a backward-looking TAM basis, it should be larger. But on a forward-looking basis, very hard to estimate because the numbers are moving all around. But suffice to say, we are gaining share every day. I think in a 12 to 24 window, we could be neck and neck with 1 of our 2 competitors, right? That's the hope, that's the goal, and that's the momentum.

Our next question comes from the line of Tim Savageaux with Northland Capital Markets.

I'll add my congrats on the results and the outlook. Now I wanted to go back to -- to welcome kind of market growth, market share type discussion. And Steve, you made a comment earlier in the call about outgrowing the market. And I think we may have a baseline there. Marvell talked about kind of the AI interconnect unit for them growing, call it, 65% on a CAGR through 2030. It's coincidentally what MaxLinear is growing overall and in '26. But as we look at the optical DSP business, is it fair to use something like that as a baseline. And when you say you want to outgrow the market, I mean just based on your run rate, it seems like we should be thinking closer to a double here than anything else for '27. But I just kind of wanted to bounce that reasoning of view.

Tim, I feel very confident we're outgrowing the market, which I think is supportive of what you're asking.

And we can't speak for Marvell's numbers.

Okay. Well, I'll go on and ask this one anyway, then, which is, yes, I think your market share is like 6% here. If you take those forecasts out to their conclusion, I mean, they're talking about, I don't know, a $15 billion optical DSP market I mean if you get into double-digit before that, you should have a $1 billion business on your hand pretty quickly. I want to bounce that one too, and that will be it for me.

Tim, we can't comment on that, right?

Yes. But the numbers you're talking about, I mean, look, there's a lot of growth there. I mean Kishore commented earlier about the transceiver growth. I mean people are talking 200 million units next year. I mean -- so these numbers make a lot of sense, as Kishore stated, being up in the teens over the next couple of years, very achievable. I think we are doing a great job. I think you've seen that from us in 2026, but I would say it's just getting going -- you're going to continue to see through that in '27, '28.

Our next question comes from the line of Joe Quatrochi with Wells Fargo.

This is [indiscernible] on for Joe. So Steve, I just wanted to switch gears to broadband. You spoke of seeing some seasonal softness in 4Q 2026. Just curious how we should think about this moving forward into the first half of 2027 in the second half of '27. And just the overall broadband recovery in general?

Yes. Thanks, Tavis. Yes, I mean, we actually feel pretty good. I mean, we do see some seasonality in Q4, certainly. But as far as '27 goes, I mean you just as we had talked about previously with the telco spending, but then also our market share gains on the PON side, we do expect to see growth in 2027. So we feel very good about that.

Our Next question is from the line of Tore Svanberg with Stifel.

Now the basic questions are out of the way. I just had a few more specific follow-ups. So Kishore, I think you said you expect 1.6% revenue already first half of next year. I think I think in the last quarter, I think you talked about maybe middle of the year. So what changed there? Is it the market that's accelerating earlier? Is it based on some new design wins? Any clarification there? And by the way, does that include DSP and TIA or is it just?

So, Tore, obviously, it's we do not know where it would be, but I think there's an initial design means that will start shipping in the first half. The exact amount of quantity is not clear, but it's seal in the sense that it's the second half very nicely. And also second part also is correct what you asked. They are accelerating design call momentum going on. in somewhat we had bottle by our own ability to support multiple calls have commitments, both for DSP and TIA in these design wins. So it's not just our DSP alone. Obviously be in a world where we want to attach our own TAA to our own DSP for selfish reasons beyond just a great performance advantage and cost savings for our own customers. in terms of power efficiency and the total BOM efficiency, right? So I think all the three are a strong affirmative response.

Very good. And last one is on pricing or content. So we're hearing as you go from 800 gig to 1.60 that maybe prices could be 2x you're obviously going to be shipping more than the DSP with the TIA. So in your case, I guess, you could potentially have more than 2x as the market goes from 800 gig to '26?

He has what I call trajectory guide to our NPL strategy and our CPO strategy and our LPO strategy and LRO strategy. It's pretty complicated. So we're constraining how many we can activate at the same time. So you, of course, sequence and prioritize them. That's the constraint I was referring to.

Got you. And then just lastly, with Washington, can you talk about your expected attach rates to rush more with the power envelope that you need to meet. That is the true despite what anybody can tell. So we hope to be the other guy outside of the 1 guy and we have shown that. So we expect the tax rate to be 100% at least and more in 1.5 years from now, right? That's the #1 answer. The next question you had was related to -- could you repeat that for me, please? I just forgot -- and [indiscernible] yes, it's active electrical cable, right? There's one large leader, which everybody knows is Credo. They're 93% or maybe 99% of the entire AC cable market, but I think the market is diversifying now because the problem is getting a lot more complicated and there are going to be multiple AEC vendors.

And our solution will be a pure silicon play to selling it to a cable maker or somebody who makes the, what I call the paddle card for the -- so our revenues for the AEC will not be as large as selling oval cable, but it will correspond to what an AEC market would dictate in terms of silicon price inside it. So I would think that it'd be a similar pricing as our PAM4 DSP for optical. And we expect not to get a big share, let's assume, but we are planning around 1 or 2 big data centers and then a share of those guys through intermediaries. And so I think we should be able to get to 20% to 30% in the 1.6 terabit cycle. And there in the next couple of years. So -- but we won't expand into multiple data centers, right, we only 1 or 2 data centers in the U.S.

And we have reached the end of the question-and-answer session. And therefore, I would like to turn the call back over to Leslie Green for closing remarks.

Thank you, Shamali, and thank you all for joining. This quarter, we will be presenting at a number of financial conferences and virtual events. Details will be posted on our Investor Relations page. Thank you all for joining today, and we look forward to speaking with you again soon.

Thank you. And this concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.

[ Welcome to ] the Day 2 of Citi TMT Conference. My name is Kelsey, one of the analysts here covering U.S. semis. So very pleased to have Steve Litchfield with us from MaxLinear, CFO. Perhaps, Steve, how about we start with giving the audience an overview of the company's heritage, product portfolio and also how MaxLinear is benefiting from the AI compute build out?

Great. Sounds good. Well, thanks for having us, Kelsey, and thanks for seeing -- everybody joining us today. A little bit of background on MaxLinear, company is really founded as a mixed signal semiconductor company. Focused -- I mean we started an effort in infrastructure about 5 to 6 years ago, and that's been kind of a labor of love in the beginning, and we really started to get some solid traction here in the market over the last few years. This most recent quarter, it was over 50% of our revenues. That's been the focus of our data center business as well as our storage accelerators and some of our wireless infrastructure. We also have several other end markets, broadband connectivity and industrial markets, but over the last several years as far as R&D dollars and product focus, it's been around the data center and the infrastructure business.

How should we think about that tailwind within the [indiscernible] build out? Is it the 800 gig, 1.6 transition or scale up, scale out? How are you guys positioned within the networking transition?

Sure. So, I mean, we're participating in all those scale up and scale out, or 400 -- maybe step back a little bit and talk about where kind of revenue comes from today and then where it's going. So this year, mix between 400 and 800 gig primarily DSPs, that business is growing nicely this year. The midpoint of our guidance for the optical piece of it is $220 million. The mix of that business today is probably 70% 800 gig and probably 30% 400 gig, kind of getting to the end of the life on the 400 gig, I think most of the market data says that will slow down next year. But 800 gig, I feel like will grow nicely this year as well as next year. And then some debate on what happens in 2028.

Our new product, Rushmore is -- customers are qualifying that product, working with those solutions today, expected to go to market, kind of, mid-next year. And so we're working with tons of customers right now with that particular ramp. If it starts mid next year, it probably goes into kind of full-scale production in the following year.

So -- and I guess one thing I would add there is we also have our Washington TIA that sells alongside of that. So just from a pure ASP standpoint, if you look at 800 gig most of the market data, I'll say ASPs are running, I don't know, $35 to $50 probably versus a 1.6T, which is probably $80 to $100 plus the cost of the TIA, which pushes at above $100.

I mean, right now, the market environment is such that pricing is holding very good. I don't expect that to change right now, kind of given the constraints that we're seeing throughout next year. So I don't anticipate pricing coming down much between now and the end of next year anyway.

So on the optical data center piece, I mean, you guys have raised guidance. I think I believe the last 3 quarters. How should we think about that trajectory? Or what changed during this period that resulted in that consistently higher guidance over time?

Right. No, it's a good question. Yes, because going into the year, I think we had said that we would be north of $100 and then each quarter we've raised. So what's changed? I mean I think it's a few things. I mean, the market continues to grow. You guys have all probably seen the growth in transceivers this year versus the beginning of the year. So that's clearly one. But I think our share that we were anticipating has gone up more than probably what we had expected. We've seen new customers come on that were not planned for. And so I just think it's kind of a handful of things. I don't think it's one in particular, but several things.

We've also tried to be a little bit conservative entering the year just from the standpoint that with supply constraints being what they are, we don't want to overcommit to investors nor do we want to overcommit to customers. So I think we've tried to be just conservative on those expectations.

How has backlog visibly improved since earnings or even in the last 2 quarters?

Sure. I mean, look, visibility is very good. I mean, again, kind of back to -- I think there's a big gap between supply and demand here. Visibility is strong from the standpoint. Customers are coming in. We quote 26- to 28-week lead times for our optical products. That's fairly consistent, but I will say that customers have come in, placing orders throughout all of next year or at least at a minimum, given us forecast so that we can go out and plan, right? I mean, as all of you know, TSMC and all of the other folks in the supply chain, need forecast, need planning. So in order to secure that capacity for next year, we need to see those orders upfront. And you're in an environment where you're getting those orders right now.

Got it. Could you talk a little bit about MaxLinear differentiation? I mean, in the DSP market, it is dominated by a couple of players. How do you guys been? How do you see that competitive positioning change or evolve as the market transitions to 1.6T?

Sure. Yes, look, I mean, we've -- there's 2 big players in this market that we've competed against for a long time. I started out talking about our mixed-signal expertise, but that expertise is really what allows us to bring technically unique solutions that are very differentiated. I mean our current 800-gig solution runs about 20% less power than a comparable module from one or the other of those 2 competitors. And so you have to start there, right? I mean we've always had that technical differentiation and we continue to have it.

I think a couple of things that have changed or that have allowed us to maybe further gain share, further penetrate the market is, look, over the last couple of years, we've done a lot in broadening the portfolio itself. So now we have our retimers. We have our Washington TIAs. We have drivers. So we're broadening out the portfolio, and that makes a big difference to the customer base because they want to work with less suppliers at the end of the day. So they want to see more capability out of us.

I mean, I think the third thing was just simply that we've been in production for now 18 months, mass production. And I think that's -- it's always a bit of a challenge that's chicken and the egg thing. They don't want to design you in, especially big customers, without seeing you in production. We've passed that hurdle, and they're very comfortable with it. I think as we -- and it makes a big difference, especially as I look out into these 1.6T ramps and where we are with the ramp, the knowledge that we have, the visibility that we have, the customer comfort, I guess, if you'll call it that, that we have -- that we didn't have at 400 gig or even 800 to a certain degree. So I think that technical differentiation, I think it always starts with that.

We've also bolstered up our systems expertise. I think that's something that's changed a little bit in the environment. When you're dealing with large data center customers or hyperscalers, they're not so much worried about component performance. They're worried about system performance. And so over the last call it, 12 to 18 months, we've hired a number of system engineers located them very close to the big hyperscalers and make sure that we're able to bring systems expertise. And I think that's something else that's important going forward.

Got it. How would you describe your customer [indiscernible] within that?

Sure. So it's fairly broad. I mean I'm sure most of you guys know in the audience, this -- we have to think through all the data center customers as well as the module customers, right? And MaxLinear, we had always focused on the data center customers, and we probably paid a little less attention to the module guys. Now that's flipped over the years. We've put a lot of effort into the module customers recently, just because those are the guys that are working on qualifications, interop trials, firmware changes, things like that, solving customer problems. So those folks are really important.

As far as concentration, I mean, we've had pretty broad adoption, and we've got engagements across all the major data center guys as well as all of the module players. We don't have any one customer that's dominating that. And as I look out into the -- naturally, we'll see -- if market share is 5% to 7%, I think we have aspirations to get up to 20%, 25% over the next couple or 3 years. And I think we have a great chance to do that. So -- but I don't think it's necessarily dominated by one guy. I think there's 3, 4, 5 guys and many -- I mean, you'll be familiar with all of them, of course. So I don't think it's dominated by one person, but I do expect to see more concentration next year and certainly into 2028.

Got it. What needs to happen to reach that market share aspiration from where we are today?

Well, so first of all, it's happening. And when I say that -- I mean that transition is, kind of, already happen. We're seeing those share gains. We've got these qualifications done. We've got to continue to support those customers. We've got to continue to ramp. We've got to continue to build out our own portfolio. We got to continue to get supply, right? I think we've got a -- I think we're confident on that. We've got to continue to bring some differentiation, whether it be on the technical side or even innovativeness on the supply chain. I mean, with our 1.6T, as many of you know, we moved to Samsung. So the industry is somewhat constrained by TSMC. And so this move to Samsung has caught a lot of people's attention and they're very interested in the fact that it gives them some diversity.

And so most of your module guys selling into the space, they're trying to kind of get some independent supply chains, which is not very easy to do given some of the constraints on all of the components. So I think we've got to continue to do innovative things like that, not just at the chip level, but even in the ecosystem we have to think through.

Could you walk us through like how do you think about the manufacturing strategy? Like I said, and things are getting tighter at advanced nodes, how do you go by securing that capacity? What negotiation you have to work with?

Yes. So I mean, how do we go about it? Maybe I'll follow through on the Samsung. If I -- I mean our strategy is always to have multiple foundries. We've always had multiple foundries over the years. We call it, 4 or 5 years ago, we were alternate between UMC and TSMC. And then UMC kind of stopped investing on advanced nodes. And then we were kind of stuck with TSMC for a period of time. But we had been kind of talking to Samsung and they clearly have advanced node capability, and so we ultimately chose to move forward with that. It really wasn't done just for optical. I mean, it was done for the company and to keep some diversity. So you'll see other products and other product lines or business units that will be done on Samsung as well. So I think overall, it's a long-term strategy that we have as a company. It's not just for optical.

As far as securing capacity and what we're doing other than kind of keeping a diverse supplier base, yes, we're negotiating you're putting in orders. We -- a lot of folks are talking about LTAs. I mean we would try to avoid that for the most part. But I mean, from time to time, we've done those. Just to make sure we secure supply. In some cases, we're prepaying or you put letters of credit. There's other ways that you can secure capacity as well. And so we have to use everything in the toolbox right now in order to make sure we get that.

Because you guys are fabless, and it seems like as demand continues to upside much better than our expectation, do you foresee any challenges? Or based on the relationship that you have had with the foundries that is not so much a problem?

So look, I think we've got a great relationship. I mean it's been forged over many, many years. I think we've seen great response from them in tough times like this. So I'm confident that we will continue to get more supply. I mean, I think your question alludes to more, how much more can you get? I think we can get a lot more. And -- but we do have to continue to keep a really close relationship. We have to give them visibility and help them. And we do that in a number of ways. I mean, not just given the POs or -- but we also think through from a technical standpoint on how we can improve that throughput as well. I mean, whether it's IP or chip size, I mean there's all kinds of ways that we can do this in order to increase output. They're not easy and sometimes they take months and some R&D dollars, but often that will make sense for the long term. So we have a close partnership and we'll keep that up for sure.

Got it. I'll open it up to the floor for any questions. Go ahead. One second.

Thanks for sharing. I have a quick question regarding your products market share. So as the technology evolves, do you think, for example, like DSP, like your per share or like a dollar value as the technology events, would it be higher or lower? And how do you think about the product mix going forward?

Yes, good question. So certainly, as we go, just like we've seen from 400 to 800 ASPs have gone up, same thing at 1.6, I mentioned there's a big jump at 1.6. I think as you go to 3.2, you're going to see another big jump and 6.4 naturally. I mean these performance levels keep increasing. Talk about the component, like what exactly increases? I mean, I think of some of the simple pieces like a TIA, the driver, the DSP, which includes the SerDes, I mean those are kind of the 3 big pieces, right? As you advance and especially as you go to 3.2, architectures are changing quite a bit, and you're seeing the -- some of those parts become a little disaggregated. So now you've got a -- more than likely you're going to see a stand-alone TIA, you're going to see a stand-alone driver and then you're going to see the SerDes itself, which really is going to be incorporated differently. Maybe it's not in a DSP, but it certainly exists and will very much be needed. There's only a handful of guys out there that have their own SerDes at these performance levels. And so that's something that is very unique to us, and I think we can continue to increase our value proposition to the customer.

So I absolutely think ASPs go up at each transition for MaxLinear. I can't give you an exact number of what that ASP is because we don't know what 3.2T or 6.4 is going to look like. But each of the pieces may look a little different, right? I mean your TIAs and drivers at 1.6T are -- the ASPs are quite a bit higher than they were on 800 gig, quite a bit higher than they were on 400 gig because those pieces end up becoming more valuable as does the SerDes.

What is the metric that drives that content increase? Like what do customers sort of look at before they're willing to pay a higher dollar for that?

Well, that's a tough question because I think -- if you think it from a customer's eyes, I mean, they're building entire systems, right, and they're trying to be more efficient and effective. I mean there's -- I started out talking about our differentiation being on power. I mean, their power costs are tremendous, right? And so to the extent they can lower that, they lower the overall system cost. You can simply put -- I mean even we're talking -- like the DSP portion, if you end up doing a half-retimed solution, if the signal integrity is such that you can reduce one side, then you have to increase the other so I could reduce some content here, but I've got to increase -- so like, for example, I could decrease the DSP over here, but increase the TIA and the driver on the other side, right?

So I don't know that there's one perfect metric. I mean, because every one of these guys is -- their architecture is a little bit different. And I think what's important to us, and actually, I think it's a very unique value proposition that we have, as you mentioned, the 2 other competitors in the space, there's not many people that have these IP blocks that are able to address the problem statement here, if you will, right? I mean, you can't just come in and develop SerDes at these performance levels. It's just -- I mean, right now, the entire market is short on these resources today. And so I think that's something that really stands out, and it's why customers come to us.

Okay. Got it. Anyone else?

Just as you move to 1.6T and utilize Samsung more, just curious what kind of market share opportunities I think that opens up whether or not there's significant slack capacity there?

Yes. So well, I guess I don't think of it -- I think if your question is about market share as a whole at 1.6T, I mean, I think it's -- whether we are on TSMC or Samsung, I mean I think we have equal opportunity. That being said, with Samsung, given the constrained environment, I think, we're seeing a lot of people kind of show up going, yes, we would love this. It's something else that differentiates us. So I mean, we've long held getting to that 20%, 25%. I mean, I think we stand by that today. It's not going to happen overnight. Naturally, you do see bigger jumps at the different transitions. So I do think that we can take a sizable jump at 1.6T. I think that's what we're counting on and looking towards.

With regard to getting wafers, we don't anticipate that being a problem. And I don't mean that they have infinite supply, but naturally, we've worked with them on the forecast and potential ramps, and we feel very comfortable that we can meet the demand of the customers.

So I asked about your product mix going forward as a technology advance so eventually we're going to have NPO and then CPO, right? So you would have your products to offset those potentially, like, DSP-less risk, right? Can you talk about that area?

I'm sorry, offset what risk?

If DSP will be less reliant given it's eventually...

When you say reliant, you mean...

Currently pluggable and optics, eventually, we go to NPO or like a CPO, if they use less DSP as a lot of your product revenue, and you can use other products revenue to offset that. So for that technology advancement and what is the strategy?

Sure. So this is a little bit of what I shared a little bit earlier about the increased content, right? So an NPO or a CPO application, that content would increase. So what increases the TIA increases. So ASPs increased performance levels increase drivers increase. In fact, today, the driver is integrated into the DSP. Now you need a stand-alone driver. And then the SerDes ends up in a chiplet. So you say you take all of those versus the DSP and the TIA today, I'm saying that the content is higher in a CPO or an NPO application.

Anyone else? So perhaps shifting gears a little bit. I believe the team has talked about a long-term growth of 2x the semiconductor industry rate. It's a fairly ambitious target given that this year, if you look at the semiconductor market is on track to double 100% year-on-year. So just want to get your views like, is that the right growth rate this year, next year? Or like what is the normalized growth rate?

So for better or worse, we're a smaller semiconductor than a lot of these other guys. So our infrastructure business. I think a lot of the analysts this year have it growing somewhere between 150% and 170%. So I think we're doing a pretty good job on that front as far as gaining more share. I think you'll likely see some of that continued growth in '27 and '28 based on some of the products and the share gains that we have. So if we can continue to outpace this market, and yes, the market is very strong right now, I think we've got a lot of new products with our retimer, which we didn't talk so much about, but, like, the retimer AEC applications, our next-generation Big Sky, which addresses 3.2. I mean we've got a number of products. We're a new kind of player. I mean, albeit we started this 5 or 6 years ago. Now we're on the third generation product.

So I think we're getting a lot of traction customers acknowledge that, our Panther Accelerator is another big one. There's -- I mean, we have a lot of new products that just came to market this year that start to ramp in '27. So that's all going to be what gives us the fuel to grow and outpace the market.

So double the industry growth rate is your expectation?

Yes. And if you look at -- I mean, it's pretty -- I mean, we've all kind of talked about data center growth. It's been very substantial. But I think our content, our share gains -- I think -- I get this question, I've been in meetings all day. So what's underappreciated? I think this is one of the things that's frankly underappreciated. And granted, it's a little bit, what's different? I mean this is that third generation, that second generation, we got the traction we proved ourselves. And so now they're comfortable moving forward with us where they had not been before, they have not seen that.

And I think also just a simple fact that the market has gotten a whole lot bigger, they want to see an alternative supplier. You've also seen the 2 big guys kind of focus less on this. And I think that's an opportunity as well because -- and not to say that they don't have other big things to focus on, but that opens up the door for MaxLinear.

Right. Especially improvement [indiscernible].

Yes, yes.

Got it. Could you talk a little bit about your Panther? You mentioned that is on track is doubling this year?

Doubling this year.

And potentially double again next year? This is still pretty small, as I said, with entire portfolio. Talk about a growth rate, talk about customer traction and also what's your longer-term expertise?

Sure. So yes, I mean, you're right. It's somewhat of a smaller product line. It is only did $15 million to $20 million last year, but do expect it to double this year. And I think we're on track to double again in 2027. It's a storage accelerator, which is an offload capability. So where CPU utilization is very high, the ability to offload with our solution. It's using a compression technology enables them to use less CPUs. That was the original purpose. We focused on the enterprise storage market. We had done a lot of work with Dell and a number of other guys and had a lot of success continue to work with that entire community today.

But as CPU utilization continues to go up and get more expensive as NAND and just memory prices and availability continue to go up, customers have kind of come and said, hey, if we tweak the architecture, change this firmware, could we do some things differently? The answer was yes. We've been working on that. That's part of what's going to drive growth next year. And I think you're going to see more out of us.

One other thing that change -- they changed, but another engagement, we had a relationship with AMD -- maybe a brief bit on the competitive landscape here. The other alternative to this accelerator technology, it's a product called QAT, and it's from Intel. And Intel has a software capability that compresses data on top of their CPU. Now a lot of our customers that compression capability is not sufficient, and they will use our Panther technology. So -- but the other big CPU player, AMD, came to us and said, we don't have that capability, and we would like to customers would like to have your capability. So they did a reference design with us.

We've done a couple of keynotes at FMS. And so we've seen a lot of progress as they have sent customers our way. And so that's -- some of those customers are going to be driving that growth next year. And then you'll also start to see the product portfolio evolve a bit. You've seen a few press releases on some of the newer products, but there'll be more coming on that front.

How should we think about that driver of that business? Is it tied to GPU unit shipments?

No, I would say today, CPU utilization, okay? And then I think soon to be kind of memory and storage, if we can reduce or offload that usage. It's not a controller. I've had this question a few times, it's not a controller. But it is a capability that we bring that is pretty unique.

Okay. Got it. Let's shift gear a little to gross margins. So the company is on track to achieve 60% gross margin and has a long-term target of 65%. Could you just walk us through the key drivers to get there? And also just track the gross margin profile of our different businesses?

Yes, I'll give some color there. So gross margins, so this most recent quarter, so historically, MaxLinear kind of run in the low to mid-60s, last down cycle kind of dropped down to 58%. We've been kind of in the process of recovering, making good progress on that front. Most recent quarter, up the guide to 60%. So good traction. That's amidst some of the backdrop of the increasing wafer prices and the like. So making good progress.

The big thing here is the mix, right? So our infrastructure business runs above the corporate average. And so we do expect gross margins to expand from here as our percentage of business on the infrastructure side continues to increase. Been a little cautious, frankly, just to up that guidance too aggressively because we're seeing big increases in whether it's wafer premiums or if it's just wafer prices in general. And so we don't want to get ahead of this but I do see a general tailwind on the gross margin side because of the mix.

Got it. Are you able to pass through [indiscernible]?

Yes. So that's a good question. So look, pricing is very firm. No doubt. I mean you've seen prices increase this year. And so for the most part, a lot of that pricing has been able to be passed on to the customer. I think that will continue next year. I don't think -- I'm not worried about prices coming down next year, at least in some of these areas where there continue to be constraints. So I mean, the pricing environment is very good.

Okay. In terms of pricing, do you price just offset the input costs? Or is it slightly higher than input costs?

I don't know who's in the room. Just joking. Certainly, so look, I mean, at the end of the day, I mean, our job is to get the value for the products that we provide. I mean, in all seriousness, that's what we want to focus on. And so where we can bring down system costs, for example, we want to make sure that we're getting compensated for that. Where we see input costs go up and needs to be passed along, unfortunately, from time to time, we do have to do that.

Got it. I know we're out of time, but one last question. So what is the key takeaway that investors need to know from the fireside chat?

No. Look, I think we have a tremendous opportunity with our data center business. I think you've seen us kind of ratchet up the guidance. But I think we're really kind of hitting our stride. I think this is just beginning. I think the share gains that we've seen are really early days. And so I think we've just got to continue to stay focused. And I think you're going to see that over the next couple of years as these newer products hit the market.

Got it. Thank you. Thank you very much, Steve.

Thank you. Thank you, everyone.

Thank you for joining us.

Greetings, and welcome to the MaxLinear Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Leslie Green, Investor Relations. Please go ahead.

Thank you, Paul. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear's Second Quarter 2026 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 the third quarter of 2026, including revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, GAAP and non-GAAP interest and other expense, GAAP and non-GAAP income taxes and GAAP and non-GAAP diluted share count.

In addition, we will make forward-looking statements relating to trends, opportunities, execution of our business plan and potential growth and uncertainties in various product and geographic markets, including, without limitation, statements concerning the future financial and operating results, opportunities for revenue and market share across target segments, new products, including the timing of production and launches of such products, demand for and adoption of certain technologies and our total addressable market.

These forward-looking statements involve risks and uncertainties, including risks outlined in the Risk Factors section of our recent SEC filings, including our most recent annual report on Form 10-K and our Form 10-Q for the quarter ended June 30, 2026, which we filed today. Any forward-looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward-looking statements. The second quarter of 2026 earnings release is available in the Investor Relations section of our website at maxlinear.com.

In addition, we report certain historical financial metrics, including, but not limited to, gross margin, income or loss from operations, operating expenses, interest and other expense and income tax on both 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 changes, including stock-based compensation and its related tax effects as well as potential impairments. Non-GAAP financial measures discussed today are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures. We are providing this information because management believes it is useful to investors as it reflects how management measures our business. Lastly, this call is also being webcast, and the replay will be available on our website for 2 weeks.

And now let me turn the call over to Dr. Kishore Seendripu, CEO of MaxLinear.

Kishore?

Thank you, Leslie, and good afternoon, everyone. Our Q2 financial results highlight the exciting inflection in our business trajectory and the beginning of a multiyear growth phase for MaxLinear. Overall, revenue grew 55% year-on-year, reflecting strong execution, accelerating adoption of our newest data center products, improving visibility and gathering momentum in our infrastructure portfolio. With the improvement in profitability in the quarter, we also returned to positive GAAP EPS of $0.02.

In addition, with a favorable product mix shift towards our infrastructure business, we are now forecasting Q3 2026 non-GAAP gross margin to be 60% at the midpoint of our guidance range, as well as a substantial increase in our non-GAAP profitability. Infrastructure is now our largest revenue category and grew 145% year-on-year, driven by robust production ramps in optical data center-oriented platforms. Based on robust customer orders and rising visibility of program ramps, we are once again raising our expectations for 2026 optical data center revenue to be between $210 million to $230 million with continued growth as run rates expand into 2027.

Keystone, our 100-gigabit per lane 5-nanometer CMOS PAM4 DSP and SerDes technology continues to ramp into high-volume production at major hyperscale customers across U.S. and Asia for 400-gig and 800-gig deployments, delivering almost 40% lower consumption in power than competition, Keystone's success serves as a foundation for multigenerational customer engagements that extend to the adoption of next-generation 1.6 terabit and 3.2 terabit optical scale-up and scale-out architectures at 200 gigabit and 400 gigabit per lane speeds, respectively.

We expect Rushmore, our 1.6 terabit optical PAM4 DSP at 200 gigabit per lane speeds to become an important optical connectivity growth driver beginning in 2027, which will layer on top of Keystone's successful ongoing ramp. Beyond our PAM4 service technology, we have comprehensively expanded our portfolio for optical and electrical scale-up and scale-out connectivity opportunities, including TIAs, drivers and onboard retimers. Together, these products support a broad range of data center architectures consisting of pluggable optics, LRO, LPO, NPO and CPO, providing customers with greater flexibility in their deployment of next-generation AI and cloud infrastructure using MaxLinear solutions.

Washington, our stand-alone 200 gigabit per lane TIA platform not only pairs seamlessly with Rushmore, but it can also be deployed stand-alone in LPO and NPO implementations that do not require a DSP. As the performance requirements for TIAs and drivers increase significantly at 200 and 400 gigabit per lane speeds, our deep SerDes expertise enables us to drive compelling performance advantages for such customer solutions. Annapurna, our 200 gigabit per lane Ethernet retimer platform targets 1.6 terabit active electrical cable and onboard retimer requirements for scale-up in AI systems requiring low latency short-reach electrical interconnects within server racks and switches.

Annapurna's onboard retimer applications expand our presence into another critical layer of AI infrastructure. For both Annapurna and Washington, we expect initial revenue in 2027, followed by a more meaningful volume ramp in 2028. Outside of optical, our first XGS-PON hyperscaler design win for dedicated data center control train architectures has completed qualification for a 2027 ramp and beyond. Additionally, we have secured design wins for USB bridge controllers at 2 major hyperscalers for AI rack management alongside our broader analog and power management portfolio.

These wins broaden our engagement across our data center platform and strengthen our strategic positioning with key customers. Our Panther family of storage accelerators addresses CPU, memory and storage bottlenecks. We expect revenues from Panther to roughly double this year with the potential to nearly double again in '27. Outside the cloud data center, we expect edge AI-driven upgrades to 5G wireless WAN access and transport infrastructure to increase demand for our single-chip Sierra 5G radio SoC and our millimeter and microwave wireless backhaul RF and modem solutions in the mid- to long-term.

Moving to broadband and connectivity. Both categories delivered revenue growth in Q2, driven by large-scale deployments of our single-chip fiber PON and Wi-Fi 7 gateway platforms at major Tier 1 service providers in North America and Europe. We're also in the early stages of Ultra DOCSIS 3.1 and 4.0 deployments, which will provide additional stability to growth as ramps progress throughout '27 and '28.

In summary, we are pleased with our first half performance and the momentum we have in our data center business. Keystone has established MaxLinear as a proven high-volume, high-quality supplier of 400 gigabit and 800-gigabit PAM4 DSPs and SerDes technology. At the same time, our Rushmore, Washington and Annapurna active electrical cable and retimer platforms extend our reach into 1.6 terabit optical and next-generation AI infrastructure. With multiple revenue drivers layering on over the next 2 years, we believe MaxLinear is exceptionally well positioned for sustained transformative growth and increasing long-term shareholder value.

With that, let me now turn the call over to Steven Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer.

Steve?

Thanks, Kishore. Total revenue for the second quarter was $168.8 million, up 23% from $137.2 million in the previous quarter and up 55% from the $108.8 million in the second quarter of 2025. Infrastructure revenue for the second quarter of '26 was approximately $85 million. Broadband revenue grew to approximately $45 million. Connectivity revenue was approximately $24 million, and industrial and multimarket revenue was approximately $15 million. GAAP and non-GAAP gross margin for the second quarter were 57.8% and 59.5% of revenue.

The delta between GAAP and non-GAAP gross margin in the second quarter was primarily driven by $2.5 million of acquisition-related intangible asset amortization. Second quarter GAAP operating expenses were $101.8 million and non-GAAP operating expenses were $62.8 million. The delta between GAAP and non-GAAP operating expenses was primarily due to stock-based compensation and performance-based equity accruals of $36.5 million combined and acquisition-related costs and other costs of $2.2 million. GAAP loss from operations for Q2 was 2%, and non-GAAP income from operations in Q2 was 22% of net revenue. GAAP and non-GAAP interest and other expense during the quarter was $2.4 million and $2.3 million, respectively.

GAAP EPS for Q2 2026 was $0.02 per share, marking a return to GAAP profitability. Non-GAAP EPS was $0.35 per share. In Q2, net cash flow provided in operating activities was approximately $4.8 million. We exited Q2 of 2026 with approximately $93.7 million in cash, cash equivalents and restricted cash. This included a substantial prepayment of wafers supporting rising demand for our data center products for which we have increasing order backlog in the second half of the year and into 2027. Our days sales outstanding in Q2 was approximately 28 days versus 27 days in the previous quarter, and our days of inventory was down in the quarter from 128 days to 123 days. This concludes the discussion of our Q2 financial results.

With that, let's turn to the guidance for Q3 of 2026. We currently expect revenue in the third quarter of '26 to be between $210 million and $220 million. Looking at Q3 by end market, we expect to see growth from all 4 of our business segments with particular strength in infrastructure driven by data center optical interconnects. We expect third quarter GAAP gross margin to be approximately 57% to 60% and non-GAAP gross margin to be in the range of 58.5% and 61.5% of revenue. We expect Q3 2026 GAAP operating expenses to be in the range of $98 million to $104 million. We expect Q3 non-GAAP operating expenses to be in the range of $66 million to $71 million.

We expect our Q3 GAAP and interest and other expense to be in the range of approximately $3.8 million to $4.2 million. We expect our Q3 non-GAAP and interest and other expense to be in the range of approximately $3.7 million to $4.1 million. We expect a $1.5 million tax provision on a GAAP basis and a non-GAAP tax provision of approximately $1 million. We expect our Q3 GAAP and non-GAAP diluted share count to be approximately 99 million each.

In summary, our results this quarter reflect the continued strength of our optical products and the momentum we are seeing across multiple growth vectors within our infrastructure business. Our growth and innovation in this area has been transformational, and we believe we are in the early stages of a multiyear cycle characterized by revenue growth and expanding operating leverage. We're excited about the opportunities ahead and confident in our ability to create long-term shareholder value.

With that, we'd like to open up the call for questions.

Paul?

[Operator Instructions] Our first question is from Tore Svanberg with Stifel.

Congratulations on the strong results. Kishore or Steve, you raised the optical transceiver revenue by more than $50 million for this year. Could you talk a little bit about what's driving that? Maybe talk a little bit about the regional nature of that? And also, if you could give us a sense for the mix between 400-gig and 800-gig.

Okay. Kishore, would you like to maybe take that one?

Yes. Tore, thank you. We are obviously very excited about the growing infrastructure business and especially about our success with our ramps for 400-gig and 800-gigabit optical PAM4 business. So as we entered the year, we were more concentrated in 400 gigabit revenues, but all the revenue growth we are seeing now is driven by 800 gigabit PAM4 success for us, and this will continue in 2027. And as we move later into 2027, our 1.6 terabit Rushmore will start to generate revenue and will drive growth beyond '27 to '28 and '29.

So yes, 800 gigabit is now substantially going to be a bigger portion of our run rate revenues moving forward. With regard to our end customers, we do not share our customer -- particular customer names. We have not done that. However, our customers span both U.S. and Asia, hyperscalers and Tier 1 data center customers and OEMs. And at this point in time, we are beginning to see more and more traction and revenue growth that will span both the regions, including the United States.

Very good. And as my follow-up, just thinking about some of the expansion of products that you're now sampling, whether it's Washington and Annapurna, you talked about '27 contribution. But I'm just curious, should the ramp be mainly in '28? Or could you potentially start to see some ramps with TIAs and retailers already in 2027?

So we -- our Rushmore product line, our Annapurna and even our TIAs for the 1.6 terabit or 200 gigabit per lane speed has been sampling now. It's customer -- it's in the customer qual phases and design-in process. So we expect revenue to start generating in 2027. So we expect the ramps at 1 or 2 opportunities to start somewhere in the second half of the year and then layer on top of that through '28 and '29. So yes, we do have some expectations of 1.6 terabit revenues. And for the TIAs as a companion and for Annapurna active electrical cables in 2027.

Our next question is from Cody Acree with The Benchmark Company.

Congrats on the strong results and guidance. Maybe if I just get one point of clarification. The increase in the optical outlook, the $50 million increase, that is all just Keystone. Is that correct? That's not counting any Washington or Annapurna revenue in '26?

That's correct, Cody. That's very correct. It's all driven by Keystone product family.

And can you just talk about the visibility you have to that -- the order visibility, the backlog builds that's looking into the second half? Can you just give us some color on the extension of your order trends?

Yes, Cody, I can answer that one. Look, I mean, I think this probably goes without saying, but kind of across most of our businesses right now, I mean, the visibility is very good. I mean, kind of given some of the tight supply and just the continued increase in demand, visibility is good. It's going out on or about 6 months anyway. So naturally, that gives us the confidence to go and raise these numbers.

And then just lastly, can you talk about wafer prepayments, maybe the amount that you did in Q2 and any expectation for Q3? And I guess, if you could just walk through some of the puts and takes for your gross margin improvement? Things like your mix and your incremental supply constraints and any kind of expedite fees that you may be paying?

Sure. Yes. No problem at all, Cody. Maybe just hit the prepayment real quick. Certainly, with this increased demand and some of the -- making sure that we're securing wafers and products for our customers going out, we've certainly started to prepay in a lot of cases. So that was up a little bit in the quarter. We expect that to continue next quarter as well. But that's all against a product that has backlog out a couple of quarters, right? So comfortable with that.

Your question with regard to gross margins. So a little ahead of schedule here. We're excited about hitting the 60% level in our guidance for Q3. As you're probably aware, the mix of our infrastructure products historically has been well above the corporate average. That continues to be the case today. I do see that continuing to expand over the next year or 2 as our infrastructure business grows, as our 800 -- 1.6T products start to contribute further.

We've been a little bit cautious. We've shared this with investors that just the input cost, the wafer cost increases, the packaging test increases that we're seeing out there. We're certainly kind of careful as we're seeing this across the board. In some cases, you can pass this along to customers. And -- so we've just been a little bit cautious on this front, but certainly, we see improvements from here.

Steve, I just want to add, if you look at the revenue ramp we've had throughout 2026 and raised expectations, especially with the advanced nodes in 5-nanometer, Keystone is the only 5-nanometer SoC shipping in volume for the 100 gig per lane speeds. At least we were the first ones. We have gotten our forecast then kept going up. And I must say that our foundry and OSAT partners have been incredibly supportive in making sure that we can meet the surging demand as our quals went through, and we have started layering more and more customer product ramps on our optical products.

So yes, supply is tight, but I think having strong relationships and constant communications with our foundry partners and OSATs has been incredibly helpful, and that's goes a long way in meeting our demand.

Our next question is from Joe Quatrochi with Wells Fargo.

Maybe on the optical side the revenue guide up, how should we think about the revenue run rate of that in the second half as we're just thinking about the trajectory into 2027?

Sure, Joe. Look, I mean, we -- as new quals kind of come through, production ramps start, I mean, we started out with a great run rate going into the year. I think that's just continued to improve. Obviously, raising this number here kind of sets expectations for '27 as well. So you would expect that there's not a stair step. I mean we continue to see as more customers' qualifications get completed, move into production volumes, you're seeing those numbers go up, and I would expect that to continue into next year.

And then maybe on the broadband side, maybe just any update there in terms of what you're seeing from a demand perspective and just kind of some of the timing for some of these transitions. Has anything changed there?

Yes. Not a whole lot of changes. I mean, as you know, we've been gaining share on some of our PON programs. That's gone exceptionally well this year. I think as we look out the back half of this year and next year, telco CapEx spend continue to be good. Our customers continue to be rolling out in a lot of cases, new programs. If you recall, we've got kind of content increases and a couple of other things. So yes, I would say everything is on track on that front.

Our next question is from Suji Desilva with ROTH Capital Partners.

Kishore, Steve, congratulations on the strong progress here. I know you're growing very strong in optical in '26, but I'm trying to understand '27 a little bit. Just what's the share opportunity -- Kishore as Rushmore upgrades happen from Keystone? Do you guys have an advantage there or perhaps even grow your share? Or should we expect that it holds from the success you have in Keystone?

So Suji, obviously, the kind of growth we are seeing comes from 2 factors, right? The market itself is growing very, very strongly. And the fact that we have raised our expectation for '26 revenue, which means a higher run rate expectations towards second half of '26, which has implications for '27 as well. It's a matter of as -- and when we learn about the ramps and how strong the ramps are, we're upgrading our revenue expectations. So it's happening in both ways, right? One is through the TAM growth and the other one is through market share growth. So yes, on both fronts, our performance differentiation and increasing traction with successful rollout of our products at various other customers is having a knock-on effect of more -- what I call more acceleration in the ramps that we are seeing.

With regards to Rushmore, obviously, Keystone is a foundational product for MaxLinear. This was the first major one that went to mass rollout from MaxLinear's point of view, even though it represents our third generation of technology. But Rushmore at 1.6 terabit is now sampling. It's got performance and power advantages that are very, very substantial. And at the same time, it has also got a supply chain diversification that is very unique with MaxLinear versus our competition. So if you roll in all these factors, we feel very optimistic and actually, frankly, very excited about Rushmore and the upside potential of ASP increases with the enhanced speeds.

So I think that the same customers that are using Keystone are eagerly working towards deploying our 1.6 terabit. And obviously, the qual and interop cycle is a bit longer and natural at higher speeds, but we feel we're very well positioned to be successful with 1.6 terabit Rushmore as well as a successor to Keystone offering. The important thing is my own forecast for the industry is both 800 gigabit and 1.6 terabit will be one of the workhorse speed nodes for a long time to come. So even as Rushmore ramps -- Rushmore comes online, Keystone will still be having a lot of growth engine and capacity moving forward.

Okay. layer on. And then my other question is on the TIA driver market, the Washington product and so forth. In the 1.6T platforms, are you seeing more kind of creative set of CPO, LPO architectures that drive higher attach rate and make better use of your products as they break out some of the components there?

I think you have to look at that for the first time, we are actually positioning and marketing Washington as both a stand-alone TIA and paired with Rushmore. Obviously, the first success we'll have is a paired offering with our own SerDes and PAM4 DSP, maybe Rushmore. Having said that, as you go to higher speeds, our deep RF expertise is very, very valuable and differentiated. And it's got a lot of potential to be used as a stand-alone product working with other DSPs and at the same time, being designed into LPOs and LRO type of applications. So at this stage, I would say preliminary, we expect our first traction to come from our own pairing with our own device.

Our next question is from Quinn Bolton with Needham & Company.

Steve and Kishore, I'll offer my congratulations as well. I wanted to follow up on Suji's question just on Rushmore. As you look at your -- the qualification programs you're engaged in now, is that a sort of expanding set or expanding opportunity? Do you think you are sort of going after more 1.6T modules at your customers than, say, you were originally looking at on 800 gig. I'm just kind of wondering, can you tell from the qualification activity whether you think your share continues to increase with Rushmore?

So -- wow, very, very good question. And I'm actually very pleased with where we are. From where we started in Keystone today, I can safely say that we are now comprehensively designed across the board of all of the optical module players on the 800 gigabit solution across the board. So in a sense, 1.6 terabit now has to systematically get designed to each of those customers where we have laid the foundation with Keystone and them developing their modules, qualing them and then interroping them.

So if anything, Keystone has created the footprint for us to roll out 1.6 terabit. The -- obviously, it's a very multifaceted play in terms of qualing 1.6 terabit Rushmore and it's just being designed in with the module makers, then it leads to the next phase of quals with the data center operators, and that's when the revenue ramps will start. So we expect this to happen towards the second half of next year and with some initial revenue ramp starting in '27.

Got it. And then Kishore, as you look at the broadband sort of the CPE gateway business and you talk to your customers, do those CPE boxes tend to use a fair amount of memory? Is the rising cost of memory causing any sort of delays in rollouts or perhaps lower units? Or do you think that the CPE business is able to absorb the memory cost increases?

So at this point in time, we do not -- we have not seen on our solution platforms effects of memory as being a major driver in their decisions on using a product. If anything, we have been able to share gains because our solution actually integrates a lot -- there are different implementations, different solutions use -- competition uses a lot more external memory than we do. So we actually save our customers a lot more money due to the integrated solution with on-chip memory and incorporate it.

So we have not seen much impact with our customers. Obviously, they're absorbing the cost of the memory, and they're able to pass it on to their operator customers. So there is some juggling going on. But at our own level, we have not seen any, what I call, real tangible impact on the volumes that we were expecting and forecasting for this year and looking into next year. You have to keep in mind that the lead times are pretty long these days. So we get fairly strong visibility based on backlog and bookings.

Our next question is from Tim Savageaux with Northland Capital Markets.

Congrats as well, especially on the guide. My first question is kind of about that, which is in terms of what you're seeing here, can you maybe try to be more granular between overall market growth uptick in unit volumes, broadly speaking, being a driver here versus share gain on MaxLinear's part, maybe at the expense of capacity-constrained competitors. But -- and I don't know if there'd be another factor, but I'd love to have you weight those 2 in terms of what you're seeing in the step function here in these couple of quarters. I'll follow up from there.

So look -- go ahead, Steve. Sorry, go ahead, Steve.

Yes. No, I was just going to say I don't know that we can -- it's hard to break out. I guess from our perspective, I mean, what we're confident, and I think what we are seeing is that we are seeing more market share gains. Certainly, the market is growing nicely. But we're seeing our share go up. I think part of the rationale for seeing our guidance go up is that we've been able to take additional market share. And so we're seeing that in the short term, and we think you'll also see that throughout next year as newer programs start to ramp.

Got it. And kind of following up on the guidance. I guess, would it be -- I think it's about $45 million -- would it be fair or perhaps conservative to say the majority of that sequential growth is coming from optical in Q3?

Yes. I guess I would just say that the majority of it is coming out of infrastructure. Certainly, I mean, we're seeing growth across that end market, call it, much more so than some of the others. The others are going up, as we guided, but a lot of that growth is coming from infrastructure. And certainly, we upped our optical guide. So that number goes up as well.

Got it. And when you talk about growth across the rest of the segments, I assume you're referring to sequential growth there, not year-over-year?

I was -- yes, just reflecting the guidance. Yes, that's correct, Tim.

Great. And last question for me. It looks like no 10% customers here, and I imagine the old broadband guys are kind of falling off the list. But as we move forward and you continue to ramp in optical, do you have the prospect of having one or more of these module guys as a 10% customer in the near future or in the future in general?

Yes. So I think we mentioned this before, Tim. Look, I think we've talked about being in a lot of customers. Kishore just mentioned it again as well. We've got a number of module guys, a number of data centers that we're supplying product into today. But over time, yes, I do think you'll expect to see more concentration. I think that's well understood as we go into next year. I don't think that would be surprising at all.

Our next question is from Christopher Rolland with Susquehanna.

Congrats on the results, and I apologize if this has been asked as I joined late. But in terms of the composition, customer composition, particularly moving forward for DSP, is there any movement in terms of the balance between hyperscalers versus module makers and then also North America versus like Eastern guys? Or is it still incredibly broad-based?

Yes, you might have just missed this question because it was just before you. But we continue to see growth. I mean, Kishore mentioned in the prepared remarks that we're seeing growth out of both regions. So from a geography standpoint, we're certainly seeing growth on both sides. As far as concentration itself, as mentioned previously, there's not a 10% customer. But I do expect, as we've talked in the past, I think you'll see a little more concentration as we move forward. I mean there's not tons of these customers. So I think it's -- it will be understandable that you'll see some more concentration as we move forward.

Okay. But just to be clear, you don't have one marquee customer pushing. Is that correct?

So we don't have a 10% customer. It's a little broader based, but I mean, you should expect there's a handful of customers that are going to drive the most volumes over the next, call it, 6 quarters.

Okay. Perfect. And then as a follow-up, I think it's been some time since you've given some long-term metrics for the model more broadly. I think at one point in time, we talked about 65% gross margins. Do you have any sort of an update for your longer-term model, including what a path might look like to 65%? Does that still hold for you guys?

Yes. So I don't think the target has changed. We certainly feel like with the product mix, the end markets that we participate in -- that, that's still the right goal, and I think there's a path to certainly get there. Raise the number for our Q3 guide goes up a little bit ahead of schedule. So that's good. I think that reflects just our infrastructure business in general, growing at a faster rate than some of the other end markets, and they do have gross margins that run ahead of the corporate average.

Right now, we're seeing lots of increases of cost, right? I mean, whether it be on the wafer side or just test assembly, packaging. So doing our best to pass some of those costs along, but where you're paying premiums in some cases, meeting customer demand. So we're paying a little bit more right now. But I certainly think that there's a strong path to see continued growth out of our gross margins.

Our next question is from Ananda Baruah with Loop Capital Markets.

Same for me, I apologize if this has been asked. I jumped on late as well. But I guess the DSP question, sort of as you look out the next couple of years, guys, and you think about what the drivers of growth are? Any way to help us think about order of magnitude, bigger -- sort of the growth comes from bigger customer participation, i.e., hyperscalers versus price lift from going to 1.6T and 3.2 versus just broader growth in the marketplace? Any help there would be useful.

Kishore, do you want to take that?

Yes. Ananda, that's -- I think we answered that question too, as best we could. It's going to take all of those factors to play in our growth expectation plans. It's going to be share growth. There is going to be TAM growth. There is going to be TAM unit growth, and there's going to be ASP growth as we go to higher and higher speeds. At the same time, we are also -- our footprint inside the data center is increasing. We now -- we are also offering a broad comprehensive product portfolio of TIAs, drivers. And at the same time, for active electrical cables, we have our Annapurna offering and also for onboard retimers, right?

So as that product portfolio expands and broadens, it can address a number of architectures that include CPOs, NPOs, LPOs, LROs and other implementations, both for optical and electrical scale-up and scale-out implementations. So it's going to take all of those. And the good news is that the offering has become more comprehensive, and we continue to work towards that to expand that family, if you will, of the larger footprint. And we feel we are really making excellent progress getting these into the pipeline. And then eventually, they will result in multiyear revenue growth and expansion for MaxLinear.

Yes. That's really helpful, Kishore. I guess a quick follow-up is -- and maybe this also was talked to earlier on the call, so I apologize if it was. But anything notable either on the technical side of things or on the relationship side of things of note that sort of is helping you move the ball forward over the last 90 days that we should be aware of. That would be useful context for us to be aware of. And that's it for me. On the DSP business.

Look, every day matters, right? We are really building on the successful penetration ramp that is happening on Keystone. And that itself is a self-reinforcing driver and force actually. So if you really look at the larger picture in the larger landscape today with the track record of the millions of units of shipments and optical transceiver, PAM4 DSPs, there are only 3 players right now, and we are one of them. So I think that track record is really, really important. And I think -- and then having the next-generation offering with Rushmore and expanding the product portfolio, all of this play a role into how things move around, how we build relationships.

You also have to keep in mind that we are now not just talking about electrical and PAM4 optical offerings with TIAs and drivers, active electrical cables and onboard retimers. We also have storage accelerators now in our portfolio that will get more and more important as this agentic AI becomes very important and the storage bottlenecks that prevents increasing the number of agents, right? That's very important how we expand that. Hardware acceleration and compression is going to be very, very important to expand the agents and at the same time, reduce the time to first token, which all involves lower latency and improving power consumption.

So I think we are also showing other parts to the portfolio, increasing our XGS-PON for control plane for the data centers. It's going to take a lot of stuff to put together to continue to expand our relationship with the end customers. If you look at our 2 big competitors, right, they're very large companies, and they have a lot to offer to our end customers as well. So it's going to take working away, chipping away with more offerings that we could be a full-blown comprehensive player in the data center infrastructure.

Our next question is from Karl Ackerman with BNP Paribas.

Two, if I may. I'm going to pivot a bit from the questions with respect to optical, which is well covered and you've certainly done very well this quarter on that. Could you discuss some of the key drivers for your industrial and multimarket business into the second half of next year? I know you mentioned it was going to grow sequentially into September. But I ask because while this area has improved, you're still halfway from the run rate business you achieved in 2023, and that appears to be margin accretive for you. And so if we could just talk about the drivers of that, that could also drive revenue into -- the second half into '27 would be very helpful.

Yes. Sure, Karl. I can take that. The industrial business has definitely been recovering. Last year was very weak. We've started to see -- you're seeing nice year-over-year improvements this year. I think I would expect that to continue next year. I mean you're starting to hear more of the industry itself starting to recover. So that's good. And I think we've talked about this a little bit before. Some of this has driven some of the China business. We're actually seeing good pricing improvements in that region. So I would expect pricing as well as new products to contribute to that growth.

Got it. If I may have a follow-up. Within broadband, could you discuss the mix of revenue on fiber today? And whether you see that crossing over from cable broadband? Is that something that can occur in 2027? Can you just talk about the growth between fiber and cable within that would be helpful.

Yes. Good question, Karl. Yes, you're right. We've been talking about this. I mean this is an area that is still relatively new. We're a relatively new player, but we've now won the top 2 guys in North America. So the second guy is ramping this year on track as we had talked about. So it's definitely growing nicely, the PON business specifically. And as we -- I would expect that to continue next year. It's hard to say when the crossover will be. I mean I would guess '27, but it may push out into '28, frankly, because some of the upgrades that are happening in the DOCSIS world are also growing. So we're seeing decent growth on both sides, and it's good to see the telcos kind of with some spending there.

Our next question is from Tore Svanberg with Stifel.

I just had a follow-up, and I'll ask a question that has not been asked. So looking at the filing, it looks like your purchase obligations went up about $40 million. But then you also have another obligations item that I think went up even more than that, $45 million. Can you just explain a little bit the difference between those 2? I mean you talked about, obviously, the wafer prepays and so on and so forth. I'm sure there's stuff you can do on the back end as well. But yes, any more color on the difference in those 2 because obviously, it's a pretty important increase in both items.

Yes, yes. I mean, so obviously, the purchase obligations are probably the bigger takeaway. We did have some prepayments. I mean, with the stock price increase that we saw in the quarter, there were some -- a handful of payroll accruals that had to be done as well. And so that's a portion of it was around stock comp. But again, the majority is the prepayments. And as we've kind of talked about a little bit earlier, that portion obviously supporting growth in Q4 and into Q1, as those lead times like we're starting to place orders now for Q1. And that's the majority of those numbers and those commitments.

Got it. And then last question. So there was a little bit of discussion about the long-term model. I mean you're going to be at 30% operating margin this quarter or at least close to it. I know you've been here before. But how should we think about that sort of number now sort of being more of the baseline going forward, especially in relation to your OpEx guidance?

Yes. I mean, look, I don't want to guide beyond the quarter that we're in, but I think you -- well, you know our long-term goal is to be between 30% and 35% operating margins. You're absolutely right, kind of headed in that direction. You can kind of see the model starting to move there pretty quickly. I mean profitability is good. We're seeing good growth next year on the top line. Gross margins are favorable from an OpEx standpoint. Yes, we'll see some increases in OpEx, definitely supporting the growth in these areas. But as we've talked about the operating leverage, I think, is compelling. It's exciting to kind of see. You're right, we've been here before, but we want to continue to show this kind of long-term sustainability of these profit margins.

There are no further questions at this time. I'd like to hand the floor back over to Leslie Green for any closing remarks.

Thank you, Paul, and thank you for joining us on today's conference call. This quarter, we will be presenting at a number of financial conferences and virtual events. The details will be posted on the Investor Relations page of our website, and we look forward to speaking with you again soon. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation.

Greetings, and welcome to the MaxLinear First Quarter 2026 Earnings Conference Call. [Operator Instructions] It is now my pleasure to introduce your host, Leslie Green, Investor Relations. Thank you. You may begin.

Thank you, Maria. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear's First Quarter 2026 Financial Results. Today's call is being hosted by Dr. Kishore Sondrio, CEO; and 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 the second quarter of 2026, including revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, GAAP and non-GAAP interest and other expense GAAP and non-GAAP income taxes and GAAP and non-GAAP diluted share count.

In addition, we will make forward-looking statements relating to trends, opportunities execution of our business plan and potential growth and uncertainties in various product and geographic markets, including, without limitation, statements concerning future financial and operating results, opportunities for revenue and market share across our target markets, new products, including the timing of production and launches of such products, demand for and adoption of certain technologies and our total addressable market.

These forward-looking statements involve risks and uncertainties, including risks outlined in our Risk Factors section of our recent SEC filings, including our 10-Q for the quarter ended March 31, 2026, which we filed today. Any forward-looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward-looking statements. The first quarter 2026 earnings release is available in the Investor Relations section of our website at maxlinear.com.

In addition, we report certain historical financial metrics, including, but not limited to, gross margin, income or loss from operations, operating expenses, interest and other expense and income tax on both 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 changes, including stock-based compensation and its related tax effects as well as potential impairment.

Non-GAAP financial measures discussed today are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures. We are providing this information because management believes it is useful to investors as it reflects how management measures our business.

Lastly, this call is also being webcast, and the replay will be available on our website for 2 weeks. And now let me turn the call over to Dr. Kishore Seendripu, CEO of MaxLinear. Kishore?

Thank you, Leslie, and good afternoon, everyone. Q1 was a strong and important start to the year, and we believe it marks the beginning of a multiyear growth phase for MaxLinear, led by our optical data center business.

Revenue grew 43% year-over-year, reflecting strong execution, accelerating adoption of our newest products, improving visibility in bookings and sustained momentum across our infrastructure programs.

Infrastructure is now our largest revenue category, growing 136% year-over-year in Q1, driven by robust production ramps in optical data center-oriented platforms. We see this momentum continuing to build as hyperscale customers rapidly scale AI-centric architectures.

Based on customer orders and rising visibility of the program ramps, we are increasing our expectations for 2026 optical data center revenue to $150 million to $170 million range. We also expect a step function data center revenue increase beginning in Q2 with expected strong upside as run rates expand into 2027.

At the center of this data center momentum is our Keystone PAM4 DSP optical transceiver platform. Keystone is now ramping at multiple major high-scale customers across both the U.S. and Asia, supporting 400G and 800G PAM4 deployments for scale-up and scale-out applications.

These ramps validate our differentiation performance, power efficiency and integration. At OFC this year, we showcased our 1.6 terabit data center platform featuring Rushmore our 200 gigabit per line PAM4 DSP.

Washington are matching 200 gigabit per laying and Annapurna, which is our 1.6 terabit AEC and 3.2 terabit onboard electrical retimer platform for scale-up applications. Rushmore and Annapurna are foundational to the next wave of data center optical architectures, including LPO, LRO, AECs, XPO and copackage optics.

With Keystone validating our ability to execute at scale, customer engagement in our Rushmore has accelerated faster than expected. We anticipate production ramps beginning in late 2026 with revenue growth expected to continue strong growth through 2027 as the next-generation speed and bandwidth cycle unfolds.

We are also expanding our footprint within hyperscale data centers beyond PAM4-based optical and electrical interconnects. We have secured our first XGS-PON design win at a U.S. hyperscale data center through a Tier 1 OEM partner as cloud operators deploy resilient, dedicated pan-based control plane architectures, spanning multiple data centers.

Adjacent to compute, we have also won USB bridge controller designs with two major hyperscalers to support rack-level AI system management which opens the door to increasing content per rack over time.

Our Panther hardware storage accelerator SoC family continues to build momentum with growing design win activity among Tier 1 network appliance and cloud service providers. Persistent memory constraints are highlighting Panther's advantages in hardware accelerated compression high throughput and ultra low latency memory access.

We're actively sampling next-generation PANTA5 with key customers and based on current engagement, we expect storage accelerated revenue to at least double in 2026 compared to 2025. Beyond data centers, wireless infrastructure momentum is improving as carriers increase investments in 5G RAN access and backhaul to support cloud connected and edge AI functionality.

Our single-chip radio aces are now deployed with multiple North American operators with expanding opportunities as 5G networks continue to evolve. In broadband and connectivity, we are executing large-scale deployments of our single-cup fiber pawn and WiFi 7 gateway platforms with the second major Tier 1 service provider in North America with additional ramps expected later in the year in Europe.

These long-cycle deployments provide a stable foundation, leverage the same strengths in integration and power efficiency that clearly differentiate MaxLinear's data center portfolio. In summary, we are very pleased with the strong start to '26 and are especially excited by the momentum accelerating in our optical data center business.

With multiple customers entering meaningful ramps of our 800 gigabit Keystone family and broader engagement across our 1.6 terabit Rushmore and Anapure product families across scale out and scale up AI architectures, we believe Maxi is exceptionally well positioned for sustained transformative growth.

Our disciplined focus on execution and innovation gives us confidence that 2026 will be a pivotal yield as we continue to evolve our strategy and deliver long-term value for our customers and shareholders.

With that, let me now turn the call over to Steve Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer.

Thanks, Kishore. Total revenue for the first quarter was $137.2 million, up from $136.4 million in the previous quarter and up 43% from the $95.5 million in the first quarter of 2025. The Infrastructure revenue for the first quarter of '26 was approximately $63 million.

Broadband revenue was approximately $44 million. Connectivity revenue was approximately $19 million, and industrial multi-market revenue was approximately $12 million. GAAP and non-GAAP gross margins for the first quarter was 57.5% and 59.5% of revenue.

The delta between GAAP and non-GAAP gross margin in the first quarter was primarily driven by $2.6 million of acquisition-related intangible asset amortization. First quarter GAAP operating expenses were $96.1 million, and non-GAAP operating expenses were $59.9 million.

The delta between GAAP and non-GAAP operating expenses was primarily due to stock-based compensation and performance-based equity accruals of $28.5 million combined and acquisition-related costs and other costs of $6.5 million.

GAAP loss from operations for Q1 2026 was 13% and non-GAAP income from operations in Q1 was 16% of net revenue. GAAP and non-GAAP interest and other expense during the quarter was $1.4 million and $1.3 million, respectively.

In Q1, Net cash flow used in operating activities was approximately $8.9 million. We exited Q1 of 2026 with approximately $89.9 million in cash, cash equivalents and restricted cash. The primary use of cash was due to substantial prepayment for wafers supporting rising demand for our data center low challenger products for which we have increasing order backlog in the second half of the year.

Our day sales outstanding was down in Q1 to approximately 27 days. Our inventory was up by approximately $8 million versus the previous quarter with days inventory improving to approximately 128 days. This concludes the discussion of our Q1 financial results.

With that, let's turn to our guidance for Q2. We currently expect revenue in the second quarter of 2026 to be between $160 million and $170 million. Looking at Q2 by end market, we expect to see growth from all four of our business segments, with particular strength in infrastructure driven by data center optical interconnects.

We expect second quarter GAAP gross margin to be approximately 56% to 59% and non-GAAP gross margin to be in the range of 58% and 61% of revenue. We expect Q2 2026 GAAP operating expenses to be in the range of $91 million to $97 million.

We expect Q2 2026 non-GAAP operating expenses to be in the range of $61 million to $66 million. We expect our Q2 GAAP interest and other expense to be in the range of approximately $1.8 million to $2.2 million.

We expect our Q2 non-GAAP interest and other expense to be in the range of $1.8 million to $2.2 million with FX volatility being the primary risk. We expect a $2 million tax benefit on a GAAP basis and a non-GAAP tax provision of approximately $1 million.

We expect our GAAP and non-GAAP diluted share count in Q2 to be approximately $95 million each. In summary with strong growth in our data center optical business and several additional high-value products still early in their market ramp, we have transformed MaxLinear into an infrastructure-focused company.

Our investments over the past several years have brought us to this point where we are well positioned to deliver sustained growth, operating leverage and increasing shareholder value.

We're excited about the opportunities ahead and confident in our ability to execute. With that, I'd like to open up the call for questions. Operator?

[Operator Instructions] Our first question comes from Tore Svanberg with Stifel.

Yes. congrats on the momentum here. Kishore, you mentioned optical DSP revenue not tracking to $150 million to $170 million. I think that's about $30 million, $40 million higher than what you had expected before. Just wondering what transpiring intra-quarter to see such a steep increase. Is there new customers?

Are you basically just seeing steeper ramp at existing customers? Any more color you can add on that additional revenue would be great.

Thank you, Tore. Yes, at the time when we set the guidance, we obviously are looking at a number of ramps and a number of customers, and we were being conservative. And at the same time, we were also fairly optimistic internally that we should be seeing strong growth coming in the latter half of this year. .

Now with all the visibility and the lead times that are necessary for providing the product, we have very good visibility. And the ramps are sitting in very nicely, both across 400 gig and 800 gig solutions. So I just think it's all about timing of the ramps and the success of the calls and our ability to scale up to meet the demand that the surging demand we are seeing now.

Very good. And then as a follow-up for you, Steve. So you mentioned that prepayment for wafer capacity. I'm just wondering, are you sort of done with that now? Or should we expect more cash outflows in the coming quarters.

And I also noticed you increased the revolver by $30 million. So anything you can say here on the balance sheet and cash position going forward?

Yes. Sure, Tore. Not a problem. So consistent with what we raised back in Q4 of last year, we knew we would have some working capital needs kind of going in Q4 as well as Q1. So that certainly played out the way that we expected. Are we through it entirely? I mean, I guess, to some degree, it depends on how much demand continues to improve, right?

As that demand improves, certainly, we may continue to see some prepayments, but we do -- you'll start to see this inflect as the revenues increase. The second part of your question on the revolver. Yes, we did have a revolver that was expiring in June, so we renewed the revolver.

We did tick it up slightly, a pretty minor move for the size of the company and the direction of the company.

Our next question comes from Joe Ketter with Wells Fargo & Co.

Maybe just a follow-up on that. I guess, can you talk about just your supply chain and capacity to support the growth that you're seeing. Clearly, the mix of your growth be a bit different than maybe previously when you're at kind of similar renewables?

Yes, Joe, I'll take this. I mean look, I mean I don't think it's any surprise to anyone. There's some supply constraints out there. But I mean, I think we planned well for this and worked really closely with the partners -- on this front, I think we've seen really good success, and we expect to continue to see that going forward. .

Okay. And then as a follow-up, can you talk maybe a little bit about the puts and takes on on the gross margin guidance. Why wouldn't we see maybe a little bit more leverage on the sequential revenue step-up is pretty significant here?

Yes. No. I mean obvious question. I think this is consistent with what we've been seeing -- you've heard my caution on this, Joe, and it's a little bit of the input cost. So certainly, there's some concerns out there, wafer cost, packaging, et cetera, are moving up.

A lot of cases, the industry, ourselves included, have been able to pass along these costs. And so we expect that to be the case. But just kind of given the uncertainty out there, I think we just want to remain cautious. But you're absolutely right, from the understanding that the infrastructure business typically does drive a higher gross margin.

So we're very optimistic as we look out the rest of this year and even into next year in that being a positive influence on our gross margins.

Our next question comes from Tim Savage with Northland Capital Markets.

Congrats on the results and especially guidance. A question on the infrastructure side, and I know that's mostly data center driven, but it looks like you grew something mid-30s sequentially in Q1. And I imagine data center was a big driver there. given what you're guiding to, do you expect some sequential growth of a similar magnitude in Q2 in infrastructure?

Yes. I think, from my standpoint, I mean, we -- we obviously didn't -- we don't typically guide in markets in that level of detail. We did say that it was going up.

We did emphasize in our prepared remarks that I mean, as we look at this year, now clearly, the infrastructure business has much bigger growth drivers. We have a lot of new products that are ramping with some new customers. So we would certainly expect infrastructure to be a much bigger driver of growth in the coming year.

Okay. And to follow up once again, given the step-up we're seeing in Q2, do you have any comments about overall revenue growth expectations for '26 looks like we could be tracking, I don't know, 35%, 40%, but any comment from the company.

Yes. I mean, look, we only got 1 quarter and we're not going to change that here today. We are very excited about the growth potential that we have and these new customers and the new product ramps and yes, so I think -- and frankly, with the visibility that we have, we start to roll into '27 as well.

I mean I think we're excited to see the growth in '26 and even backlog starting to build into 2027.

Our next question comes from with Loop Capital Markets. .

I really appreciate the question. And yes, congrats on doing all the work to get to this place with with DSP, it's cool to see it play out. .

Kishore, you mentioned -- just this is the first question as a DSP question. you mentioned to 1 of the prior questions that -- around magnitude of step-up and guide that you guys have baked in some conservatism sort of a program start ramp here and that, that contributed to sort of the magnitude to step up and guide.

Can you -- can you guys tell though -- I guess what I'm also -- what I'm wanting to ask is can you tell if the market ramp feels bigger than what you guys had originally anticipated as the think of conservatism? And I guess what I'm just -- let me just ask that question.

Can you -- do you have any sense if the market ramp deals bigger if the market can feels bigger. And then I have a quick follow-up as well.

So let me answer the first question. Obviously, the TAM expansion is real or the SAM expansion, even more so the PAM4 DSP expansion is very real as both U.S. and China hyperscalers are deploying very, very rapidly.

And depending on the architecture implementation, the amount of PAM4 DSP use can vary completely based on the GPU configurations. And so scale up and scale are both equally growing very strongly.

So the extent that we are conservative, it's in the balance of things, that's our general positioning as a company, right? So I don't think that's behaviorally different from us. Do we expect more upside? Absolutely.

We do expect more upside that is compensated all the programs reaching full run rates. So I hope that answers the first question. So your second question, please.

Yes, on Panther. Can you -- you had mentioned Tantan's benefiting from some of the memory dynamics in the marketplace. Can you just walk us through -- is that -- walk us through the ways in which Panther is holistically benefiting?

Is it as simple as memory short Panther provides performance and you've been waiting here at Panther as well so you're benefiting? Or is there -- are there more sophisticated nuance reasons as well that Panther is benefiting?

Yes. There's obviously been sophisticated nuance to Panther, right? Now, of course, memory is fashionable, right? Not 3 years ago when we got punished for some of our actions. But 60% of the data center spend is in memory.

But all memory is not equal as the AI engine moves forward accelerates low-latency, high-capacity memory act is super important. So the big benefit of Panther is it's an accelerator.

So it uses latency dramatically and the power efficiency that brings to it, so it enables much more capability than just a memory compression, right? So I really feel that the performance part related to low latency, high bandwidth access enablement that Panther provides is the key differentiator.

Thus far, our use of Panther has been really at the at the enterprise appliance level, if you will. But now these enterprise storage appliances are getting increasingly deployed into mainstream cloud centers.

So I really feel there's much more to come with Panter5 and Panther 6 in the future. And this is just the beginning of our Panther product -- Panther road map product family. So we expect this year, the revenues would double.

We have said that before. And hopefully, next year as well, we got very strong growth based on the visibility we have.

With all that said, do you feel bigger about the ultimate TAM potential for Panther? -- big picture .

In the big picture, absolutely Panthers a lot of potential. But Panther as it is today, would not be sufficient, right? The world and the deployment models evolve. So there'll be more investment required, but the TAM is pretty huge.

And we just have to keep on converting more of the TAM into our SAM and that will drive our road map.

Our next question comes from Christopher Rolland with Susquehanna International Group. .

Congrats on the strong results. And I apologize if this was asked. But in your prepared remarks, or actually in the press release you talked about for optical multiple hyperscalers. And previously, I think your messaging around optical was -- it was very broad-based.

I think at OFC, we see all the design wins across so many different optical vendors. But this seems like it's a big change and might be changing customer concentration. Perhaps if you could talk a little bit about that? Are you now diversifying around these key hyperscaler opportunities?

Is it like 1 or 2 or all of them? And -- and yes, if you could -- if you could elaborate a little bit as to what seems like is a pretty meaningful change here, that would be great.

Yes. Thank you, Chris. It is pretty broad-based. Our design wins across all the module vendors in the world. So we have designs. We've always maintained that. We have designed across all the module vendors -- it's taken a while to map the module vendors, victories with the variants and the data centers, while we ourselves had to sort of do the business development work that creates the pull for various module vendors. .

So even at the end customers, it's pretty broad-based. Obviously, we'll be consolidated on a few during the ramps and as the ramp expands into 2027, we'll have other data centers that come online.

But even as we speak now, it's a pretty broad-based success. Is there more work to do to expand further to? Yes. I think we are only halfway there to our end data center diversification across all the hyperscalers.

So there's more work to be done. But what Keystone provides is an affirmative statement of MaxLee's ability to successfully get through the interops supply product at scale.

Remember, we were worried about our ability to supply and provided a scale where it's very confidence boosting in terms of our credibility as a world-class chip supplier.

Thank you for that, Kishore. Maybe a quick follow-up. I guess, if you could perhaps talk about 1.60 like how you think design wins and the ramp will go there is 800 just kind of the beginning they're qualifying on 800 and then they have plans to use you guys at 1.6 and they've communicated these plans.

And then you also mentioned scale up optical for scale up in your press release as well. I don't think there's a huge transceiver usage for scale up right now, mostly scale-out. So if you could talk about that and what that means for you guys, that would be great as well.

Okay. So you hit many number of topics here, right? So there are going to be different deployment models for scale up. to start with, right? There are many, many different product categories on scale up that are -- having said that.

The optical transceivers, 30% of the market is for scale-up. Right? And that's a pretty substantial part of the TAM and 70% is for scale out today. Our participation in scale-up derives from the optical transceivers as well as now the new offering in 1.6 terabit for electrical retimers -- which is onboard retimers and for the active electrical cables as well.

Those are all out scale-up based applications. So I hope that answers your question of our scale-up opportunities are coming from. They're really in that 30% of the TAM I talked about -- so moving forward to 1.6, the critical thing to keep in mind is that there is enormous confidence out there. where shipping Keystone to major data centers today and they're ramping very strongly in 2026.

And we have now rolled out our 1.6 terabyte product Annapurna family for electrical applications. And I think that this level of execution apart and the success with the cloud relationships, module partnerships in the call and interrupt completion is creating a far more pull for our 1.6 participation than I would have guessed at this point in time.

So in a sense, -- we hope that by the end of the year, we'll have called them 1.60 and start transitioning -- not transitioning. I just want to keep this point that 800.6 terabits we're probably one of the most long-lasting interconnect applications in the data center world.

So have even a point, Steve actually expand our ability to garner more revenues and more market share.

Our next question comes from Richard Shannon with Craig-Hallum Capital Markets.. .

Maybe I'll follow up on the topic of DSP here and ask a question in a slightly different way here, which is obviously your 400, 800 gig with Keystone are going very well. .

And enter some positively positive comments about Rushmore so far here. I'd love to get a sense here since it seems like you're gaining some very nice share in Russia were here -- excuse me, in Keystone, -- to what degree is this conveying directly or could it convey directly to success in Rushmore?

And how do you view the potential revenue trajectory over a period of time relative to what you've seen so far with Keystone?

Thank god for Keystone, right? So it's everything valuable takes a long time. It has taken us a long journey through 2, 3 generations of investment. Now we are into a Rushmore. .

And the success of Keystone makes as an incumbent, right? And the power of incumbency is the ability to have the relationships with the cloud customers, the module makers, the confidence in your ability in the supply and the quality of your product.

On the 1.6 terabit solution, I dare say, we are in the top tier in the performance category. And our customers acknowledge that. So they are readily going to develop solutions that would be quickly moved to the next phase with calls, et cetera, with the data center folks.

As you know, we are not the first ones with 1.6 terabit relative to our incumbent competitors, two of them -- so I really feel it bodes very, very well. And with 1.6 billion, you would expect the ASPs to increase, right? So clearly, for the same units or even expanding units that are happening, the TAM dollars substantially increased.

So as the mix becomes more and more 1.6 terabit, I really believe that it will have an uplifting effect on our revenues and gross margins even as our market share expands.

Okay. My follow-up question is on the cable and broadband space here. Just generally, I'd love to get a sense of your expectations for the trajectory of this year. Last call, you talked about a soft first half certainly, your starting point shows that here and then talking about calendar '26 being down, which I think completely believe here, but I want to get a sense of your -- any update on that and whether you have any visibility into when DOCSIS 4.0 starts to have an impact?

Thank you for the question, right. We had a spectacular growth here in '25 for broadband. We grew about 75%. And so we had a pullback in Q1, which is also some seasonality built into it. .

But happy to say that looking forward, all our businesses are growing, actually, which is sort of a tailwind that we -- as our data center-centric and infrastructure revenues grow. We also have other segments of our diversified portfolio really generating some positive momentum as well.

So I'm happy to share that we expect our broadband business to continue to grow -- start growing from Q2 and into 2027. And I think cable Docsis 4.2 certifications that happened, but some of the operators are still on their network readiness.

However, a big growth is coming with Ultradox3.1 and 4.0 into 2027. The one thing that's happened post COVID is that during the down period, right, we have been winning market share in broadband, which bodes very well for our fiber play.

In fact, fiber pawn business continues to grow through Q1, Q2. And we started a major deployment with a major Tier 1 operator in North America. And that's happening in the second half of the year for which we've already done pre shipments.

And then later, we have European deployments. I think it's all good. It's all growing. And we've been waiting for a time to recover through the covid slowdown and think we feel very good about that.

Our next question comes from Karl Ackerman with BNP Paribas Asset Management.

I have two questions. Just going back to the -- you spoke briefly about cable and broadband just now, but could you be more specific with respect to the June quarter guide? It seems like most of the growth is going from infrastructure. .

But can you talk about what your outlook is for broadband connectivity and multimarket, whether they can all grow in a sequential basis in the June quarter too. I have a follow-up, please.

Yes, thanks for the question. Yes, I think we mentioned earlier, all 4 end markets will be up. I mean I do expect a lot of that growth to be from infrastructure, just seeing the inflection that we're seeing from particularly some of the data center products. So yes, that is our expectation. .

Got it. Got it. Okay. And then just to follow up on Chris' earlier question. is much of your optical DSP growth coming from hyperscaler owned designs and therefore, you are qualifying with them directly. Or is your hyperscaler exposure predominantly through module vendors providing a merchant solution ?

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Our next question comes from Quinn Bolton with Needham & Co.

Offer my congratulations on the nice results and outlook. Kish, I just wanted to follow up on Tim's question earlier about just the breadth of the growth in the infrastructure business and Q1.

Was it predominantly from the optical DSP? Or did you see good contribution from Panther, the wireless access products as well?

Quinn, I'll jump in here on this one. Look, so really across the board, I mean, we saw some really good growth from all of the products within the Infrastructure segment. .

I would say from here, you start to see kind of data center really break out. I mean the -- the other product lines absolutely contribute.

Kishore mentioned earlier about Panther. Panther is going extremely well. wireless infrastructure, which was pretty soft last year. talked about the improvements. We expect to see more of that this year. I mean those are probably the top 3 or 4 products there.

Got it. Got it. And then I know sometimes gross margin takes a couple of quarters to reflect our product mix because you've got a flow product sitting in inventory, but you had, I think, 30-ish percent increase in infrastructure in the quarter, maybe a 25% decrease in broadband quarter-on-quarter, I would have thought that would have been a nice tailwind for you.

Gross margins were relatively flat. So just wondering, was there anything that sort of held back gross margin given the mix shift? Or do you think it's just sort of a timing issue, obviously, the go-forward look and the mix of infrastructure.

It sounds like it's a nice tailwind to gross margin. Just trying to think when we might start to see it show up in the income statement .

Yes, certainly, yes, no problem, Quinn. Yes, look, I mean, we came in more like right at our guidance, what we had talked about.

The mix has definitely continued to improve. I mentioned a little early in a separate question about just input cost. I think we're just trying to be cautious as we look forward.

But I do -- just as you stated, yes, I do believe it's a tailwind especially as you move into 800 gig, 1.6 t, all of those have higher gross margins. So we will certainly continue to see nice benefits on the gross margin side as infrastructure gets to be a larger percentage of our business.

Our next question comes from Suji Desilva with ROTH Capital Partners. .

Congratulations there. You talked about 2Q, some of the optical stepping up here. Are the programs all commencing ramp? Or are the other programs phasing in and starting in 3Q, can you just give us a set of layers across the year?

Or really, are we in ramp for all of the key programs already?

Suji, there are different product cycles with different drives. And -- they're all kicking in now, and there'll be some more that will catch up later in the end of the year.

So it really took a why for them all to start deploying within drop calls, everything complete. So now we are strengthening -- we're seeing strength in each of these layering based on the bookings we have.

Okay. That's helpful color. And then, Kishore, you mentioned in the prepared remarks, I believe I heard wireless infrastructure having -- playing a part in data center connectivity, maybe data center interconnect or some along those lines.

Can you help us understand that opportunity and how big that is that niche? Or can that become a mainstream opportunity?

Could you repeat that question, Suji? .

The wireless infrastructure, the connectivity helping backhaul for data center and so forth. Is that a niche application? Or is that a growing application?

Data, if you look at the prepared remarks, I talked about 5G access and transport. And you have seen a number of announcement investments where there's a lot of AI at the edge and AI-enabled network infrastructure.

So we see telecom infrastructure people on the wireless now gathering some momentum about deployment increases and especially that means that it changes the transport overhaul backhaul stuff as well as certain elements of the aces will change as well.

So this should all provide us a tailwind on the wireless infrastructure. Now the growth mechanisms in wireless infrastructure will -- the rates of ramps will never match those of the data centers.

However, you now started seeing -- you saw the announcement between NVIDIA and Marvell, and you're seeing now get interest to move towards AI in the DU side of the network on the edge in the wireless side as well.

So we should definitely benefit as being 1 of the top 2 players in the wireless infrastructure space.

Operator, do we have one more question?

Yes. Our next question comes from Tore Svanberg with Stifel.

Just two quick follow-ups, especially on your new products. So Kishore, first on a per Obviously, this starts with 1.6. But I'm just wondering if you could talk a bit about Maxine's positioning there.

Are you going to go after all the standards. Obviously, there's Ethernet standards, there's Alent -- are you going to participate perhaps also with some in-building fusion protocols. Just trying to understand exactly where you're trying to intersect the market within the Perna, especially...

Especially. I know there's a lot of hoopla about AUCs because of success of one very successful company -- but if you look at the market size opportunity for a silicon player, the AC -- the retimer more electrical for AI scale up inside the compute server is humungous. .

As the speeds increase. So you're going to see a lot of retimers. Currently, a retimer offering is Ethernet-based naturally. However, the fundamental the fundamental physics and the challenges of doing a very, very demanding the electrical retirement application is done now.

So with regard to adding the various standards, that's just an interface game. Now you can imagine, this also lends itself to other chiplet sort of stories and things like that.

There's a large -- so we'll be laying the framework and the groundwork of building a platform from which we'll have the optionality to chase where go with the SAM and the TAM goes. So at this point, we are in the electrical retimer market for Ethernet-based application.

That's very helpful. And on Washington, I mean, I assume that obviously gets sold with either Keystone or Rushmore, -- but are you seeing designs as well where your TIAs are perhaps participating on other people's DSP platforms?

Right now, our Rushmore and Washington are sampling, right? Customers are using them, but they're very, very excited about the performance. But obviously, I mean, the TIA is beyond the TIA for Remo, right? -- if you think of an LPO strategy that, that is a fundamental block.

If you think about LRO strategy, the TI is a fundamental block and Maxine is very well known for his great RF analog skills. So the CPO market, if there are going to be bare bones, then the TI drives a natural fit.

If they go more sophisticated on the DSP-based one, we already have the platform offering. But the real question comes as you go towards XPO, CPOs and the various manifestations of it.

So the full offering is super important. So Washington is the first step in the direction of a fundamental platform that will have multiple derivatives and incarnations.

Our next question comes from Tim Savage with Northland Capital Markets. .

Quick follow-up for me as well. And that's on the hyperscale win for PON, which sounds like the data center out of management stuff is I guess, can you talk a little bit more about the timing there and how significant this opportunity?

When would you expect this design win to ramp? And -- could it be a needle mover of some sort?

So absolutely, we just secured the win. So we expect the ramp. It is a lot of qualification that goes through it. So sometime in '27, it ramps -- starts ramping. But how big that can be today I think this is one of the first of its kind, sort of what I call a very, very interesting development where the data centers are seeing the value of a dedicated, reliable link to control the entire data center network, right? .

So we expect this TAM to expand to over hundreds of millions of dollars. But currently, our expectation that at our revenues, it's going to be quite a bit of needle mover even in the next year itself in the second half on a run rate basis.

Our next question comes from Richard Shannon with Craig-Hallum Capital Markets.

Just have 1 follow-up for me here. And just to dig in a little bit on the DSP side here. I want to get a sense of how big the other applications outside of what most people assume, and I certainly do the the Duplex optical DSP being a big part of it.

But how could the rest of that business that LOLO, CPO, AC retirement, et cetera. How big can that be in a year or 2? Can that be 10% or even 20% of that total portfolio? Any sense of that would be great.

So we are still in the early innings of how this old market is going to play out, whether it's CPOs or whether it is, I know people get excited, but still I think we are 3 years or out away from determining that.

At this point, it's a very small share of the market from a units point of view, okay -- from a silicon units point of view. So I don't expect it to be a huge part of our revenues. But from a TAM wise, I would raise the optical transceiver DSPs to be the #1 TAM substantially or valuing the rest. Second would be electrical retimers when that happens and the third would be ACs.

And AC as we go story because the certain level of point-in-time application nature to the AEC, and that itself will evolve. So I would rank them in that order. But at this point, it's going to be massively overwhelmed by this by revenues in the optical transceiver PAM4 DP.

That's kind of what I thought. Just want to hear that. Thanks all for me. .

We have reached the end of our question-and-answer session, which there are no further questions at this time. I would now like to turn the floor back over to Leslie Green for closing comments.

Thank you all. This quarter, we will be presenting at several financial conferences and the details will be posted on our Investor Relations page. Thank you all for joining us today, and we look forward to speaking with you again soon. .

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Greetings, and welcome to the MaxLinear Fourth Quarter 2025 Earnings Call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference over to our host, Leslie Green, Investor Relations. Thank you. You may begin.

Thank you, Diego. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear's fourth quarter 2025 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 your questions.

Our comments today include forward-looking statements within the meaning of applicable securities laws, including statements relating to our guidance for the first quarter of 2026, including revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, GAAP and non-GAAP interest and other expense, GAAP and non-GAAP income taxes and basic and diluted share count.

In addition, we will make forward-looking statements relating to trends, opportunities, execution of our business plan and potential growth and uncertainties in various product and geographic markets, including, without limitation, statements concerning future financial and operating results, opportunities for revenue and market share across our target markets, new products, including the timing of production and launches of such products, demand for and adoption of certain technologies and our total addressable market. These forward-looking statements involve substantial risks and uncertainties, including risks outlined in our Risk Factors section of our recent SEC filings, including our Form 10-K for the year ended December 31, 2025, which we filed today. Any forward-looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward-looking statements.

The fourth quarter 2025 earnings release is available in the Investor Relations section of our website at maxlinear.com. In addition, we report certain historical financial metrics, including, but not limited to, gross margin, income or loss from operations, operating expenses, interest and other expense and income tax 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 changes, including stock-based compensation and its related tax effects as well as potential impairments. Non-GAAP financial measures discussed today are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures. We are providing this information because management believes it is useful to investors as it reflects how management measures our business. Lastly, this call is also being webcast, and the replay will be available on our website for 2 weeks. And now let me turn the call over to Dr. Kishore Seendripu, CEO of MaxLinear. Kishore?

Thank you, Leslie, and wishing you all a very happy New Year and good afternoon. For MaxLinear, 2025 marked a clear inflection year with resurgent growth. We delivered 30% revenue growth year-over-year, driven by strong execution and accelerating adoption of our newest products across multiple high-growth end markets. We delivered profitability and positive cash flow ahead of plan. During the fourth quarter, we repurchased $20 million worth of our common stock, reflecting our confidence in our sustained growth expectations and market momentum. Bookings remain robust, visibility continues to improve, and we are entering '26 with strong momentum across our portfolio.

We are executing against a focused strategy that is working and will drive sustained strong growth in '26 and '27, investing in high-value multiyear growth markets where performance, power efficiency and integration matter most. These include data center connectivity, wireless infrastructure, storage acceleration, PON broadband access, Wi-Fi 7 and Ethernet end markets. Our infrastructure business is scaling rapidly. Revenue grew 30% for the full year and 76% in Q4 year-on-year, driven by strong growth in data center optical interconnects, wireless infrastructure and early but meaningful contributions from storage accelerators. Importantly, multiple new design wins are now entering production, positioning us to grow faster in '26 than we did in '25.

In 2026, we expect to achieve a significant and exciting milestone. Our infrastructure category should emerge as the single largest contributor to our overall revenues. In high-speed data center optical interconnects, our Keystone PAM4 DSP family is now ramping at major hyperscale data centers in both the U.S. and Asia, supporting 400-gig and 800-gig deployments, both for scale-up and scale-out applications. Additional customer ramps are expected throughout the year. Based on this improved visibility, we expect Keystone to generate about $100 million to $130 million in revenue in '26 with potential upside along with a further step function increase in run rate as we move into 2027. Power efficiency has been a defining competitive advantage for MaxLinear, and we are extending that leadership with Rushmore, our next-generation family of PAM4 TIAs and 200-gig per lane DSPs targeting 1.6 terabit interconnects.

Rushmore is foundational for next wave of data center optical architectures, including LRO, electrical retimers, AECs, LPOs and co-packaged optics. With Keystone validating our execution performance leadership, customer engagement for Rushmore is accelerating faster than expected. We expect Rushmore production revenue ramp starting at the end of 2026. We expect a strong showing at OFC in March this year. Also, cloud data centers are now deploying 10-gigabit XGS-PON as a robust dedicated fail-proof control plane conduit for managing high-speed data traffic between data centers. In Q4, we secured our first PON data center design win addressing this application with a major Tier 1 U.S. OEM provider to Tier 1 data centers in this next-generation design. Recently, we also won analog serial transceiver and bridge interface designs for rack management in AI servers at two major U.S. data centers. This is further evidence of how MaxLinear's broad and deep technology portfolio comprising optical interconnect storage accelerators, PON and analog offerings is growing inside the AI data center.

Within infrastructure, our Panther hardware storage accelerator SoC family continues to gain design win traction with Tier 1 network appliance and cloud service providers. Ongoing storage and hybrid memory constraints for AI scale-up and compute are reinforcing the value of Panther's hardware-based compression, high throughput and ultra-low latency memory data access. In Q3, Q4, we started sampling Panther 5 to leading customers and our partners, including Advanced Micro Devices or AMD. Panther 5 delivers unprecedented ultra-low latency at 450 gigabits per second throughput and PCIe Gen 5 connectivity. Based on our engagements, we expect strong accelerator revenue to at least double in 2026 versus 2025 and potentially again in 2027. In wireless infrastructure, increasing carrier CapEx spending is expected to drive sustained demand through 2026 and beyond as the need for cloud and edge AI functionality continues to grow. Additionally, our Sierra 5G wireless access single-chip radio SoC and our millimeter wave and microwave backhaul transceivers and modems are seeing robust OEM customer design-in activity and deployments in multiple Tier 1 carriers are going as per plan.

Moving to broadband and connectivity. We delivered another strong revenue quarter across fiber PON, cable DOCSIS and Wi-Fi, driven by the early increases in service provider CapEx spend and continued booking strength and incremental demand. In Q4, we began the large-scale deployment of our single-chip fiber PON and 10-gigabit processor gateway SoC plus tri-band Wi-Fi 7 solution with a second major Tier 1 North American carrier. This was a significant competitive win that expands content per box, fiber PON revenue and market share in 2026. In cable broadband, after a strong 2025, we expect a seasonally soft first half and cable revenue to be down in '26 as the industry transitions and pending a multiyear DOCSIS 4 upgrade cycle starting at the end of 2026. Additionally, in the stand-alone Ethernet market, we expect 2026 to be strong as our 2.5 gigabit Ethernet switch and PHY portfolio expands into commercial, enterprise and industrial applications.

In summary, we entered 2026 with multiple growth engines ramping simultaneously, driven by expanding customer adoption and secular market trends moving in our favor. Our investments over the past several years have uniquely positioned MaxLinear to deliver sustained growth, operating leverage and long-term shareholder value. We are excited about the opportunities ahead and confident in our ability to execute. With that, let me now turn the call over to Steve Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer. Steve?

Thanks, Kishore. Total revenue for the fourth quarter was $136.4 million, up 8% from $126.5 million in the previous quarter and up 48% from $92.2 million in the fourth quarter of 2024. Infrastructure revenue for the fourth quarter was approximately $47 million. Broadband revenue was approximately $58 million, connectivity revenue was approximately $18 million and industrial multimarket revenue was approximately $14 million. GAAP and non-GAAP gross margins for the fourth quarter increased to approximately 57.6% and 59.6% of revenue. The delta between GAAP and non-GAAP gross margin in the fourth quarter was primarily driven by $2.6 million of acquisition-related intangible asset amortization.

Fourth quarter GAAP operating expenses were $93.5 million and non-GAAP operating expenses were $59.2 million. The delta between GAAP and non-GAAP operating expenses was primarily due to stock-based compensation and performance-based equity accruals of $28.1 million combined and acquisition-related costs of $6 million. GAAP loss from operations for Q4 2025 was 11% and non-GAAP income from operations in Q4 was 16% of net revenue. GAAP and non-GAAP interest and other expense during the quarter was $2.9 million and $2.8 million. In Q4, net cash flow from operating activities was approximately $10.4 million. As Kishore mentioned, we were active in our buyback program in Q4, repurchasing approximately $20 million of our common stock. As such, we exited Q4 of 2025 with approximately $101.4 million in cash, cash equivalents and restricted cash ahead of our 2025 plan. Our days sales outstanding was down in Q4 to approximately 31 days. Our inventory was down by approximately $8 million versus the previous quarter with days of inventory improving to approximately 130.

This concludes the discussion of our Q4 financial results. With that, let's turn to our guidance for Q1 of 2026. We currently expect revenue in the first quarter of 2026 to be between $130 million and $140 million. Looking at Q1 by end market, we expect to see growth from infrastructure, but some seasonal declines in broadband connectivity and industrial multi-market. We expect first quarter GAAP gross margin to be approximately 56% to 59% and non-GAAP gross margin to be in the range of 58% and 61% of revenue. We expect Q1 2026 GAAP operating expenses to be in the range of $85 million to $90 million. We expect Q1 2026 non-GAAP operating expenses to be in the range of $58 million to $64 million.

We expect our Q1 GAAP interest and other expense to be in the range of approximately $2.1 million to $2.7 million. We expect our Q1 non-GAAP interest and other expense to be in the range of approximately $2 million to $2.6 million, with FX volatility being the primary risk. We expect a $4 million tax provision on a GAAP basis and a non-GAAP tax provision of approximately $0.8 million. We expect our Q1 basic and diluted share count to be approximately 88 million and 91 million, respectively.

In closing, with strong bookings and improving visibility, we expect to see solid growth in 2026, driven by new design wins and expanding content opportunities across our product portfolio. We believe we are well positioned, well in large and growing markets that will be transformative to our business as well as continue to innovate on high-value solutions for our customers that solve next-generation challenges. We will continue to focus on our investment in areas of strategic importance and confident that we will build a solid foundation to deliver sustainable growth and profitability in 2026 and beyond. With that, I'd like to open up the call for questions. Operator?

[Operator Instructions] And your first question comes from Tore Svanberg with Stifel.

Congrats on the results here. Kishore, I was hoping you could talk a little bit more about the PAM4 DSP business. So there's obviously a lot of headlines and things out there on LPO and CPO, but you seem to be seeing more and more traction, more and more design wins. It sounds like Rushmore is getting pulled in somewhat. So can you just walk through some of those dynamics because obviously, that will give us better confidence about the continuous growth of PAM4 in '26 and '27.

So thank you, Ross -- sorry, thank you, Tore, for the question. Obviously, this is a pretty significantly confidence boosting growth that we are seeing. We were guiding to $110 million to $130 million. That's a very positive statement about our traction. And we are in the initial phases of the ramp of our 800-gig product solution and need to really pick up more steam and energy in the second half. The market as a whole is still a pluggable market, which is growing very, very fast. And the LPO deployments as such are very nichey right now. And I really look at the LPOs per se as a very small fraction of the market and not long term. The LROs, for example, I think they have got some traction, but there'll be a market that is substantially pluggables, and there'll be a fraction of the market in LROs, and LPOs will be sort of in a very, very controlled environment, limited deployments potentially in 800 gig, but less so on 1.6 terabits.

So that's our view of the marketplace. Obviously, there's a market that's also beyond that, which is the -- as the scale-up continues, there will be electrical retimers, and that's going to be a huge volume on -- in the scale-up world as well. Talking of CPOs, people are doing CPOs today as sort of your feet in the market, but it still is early innings for CPO. And in the long term, there will be a market that is going to be more varietal than just pure CPOs, the O in the CPO being many number of ways of doing it. Obviously, there's a silicon play within the CPO market as well. That is what I call a wide IF fast throughput through the optical, and we expect ourselves to be a player as the market evolves. As MaxLinear, we're going to be very focused and disciplined and PAM4 is a huge growing market. We are developing a strong foothold, though we are not the incumbents. But I think today in the world, we are the -- we can safely claim with the top 3 deployers of PAM4 DSP. And as the market strengthens, we hope to branch out and diversify our offerings of what you all know is a very, very robust technology portfolio. I hope that gives you some sense of our technology positioning. From a growth point of view, this year, we expect that there could even be upside depending on how the ramps proceed beyond the one that we feel fairly confident on the visibility and the outlook we have based on the bookings so far in 2026. I hope that answers your question.

Yes. No, that's great color. And as my follow-up, I had a question on the broadband business. And how should we think about the trajectory there as we move throughout the year? You did mention you expect it to be down year-over-year because of the sort of transition to DOCSIS 4.0 or the industry waiting for 4.0. What type of decline are we talking about? I know you guided to be down seasonally in Q1, but will it sort of decline every quarter this year? Is it going to be more of a modest decline? Any more color there would be very helpful.

Maybe, Tore, I'll take that one. So we did mention that the seasonality certainly plays a role. We're also seeing the upgrade cycle, right, in DOCSIS 4.0. That probably starts the latter half of the year. And so it will come down in the first half of the year and then probably start to build in the second half. So overall, for the year, I do expect it to be down. We did talk a lot about the PON business, right, and the win that we have there. So we are excited about that. But even with that, it's still early days in it. And so that's why we do expect to see the broadband business down for the year.

Yes. I think the PON is a substantial opportunity, the new Tier 1 that's ramping. And based on the ramp itself, there is potential for not to see a downturn, so to speak. And PON is going very nicely, and we're grabbing market share. And we have many number of designs that we did not have before that will really kick steam in '27 as well.

And your next question comes from David Williams with Benchmark Company.

Congrats on the solid execution. I guess maybe first, just around the data center opportunity. Obviously, the DSP is doing really well, but you've got other components that are going into that segment as well. Can you help us kind of understand maybe what the magnitude of opportunity within the data center is and where you're playing and kind of how you think that plays out through the year in addition to the DSP?

So David, this is early innings for us, right? I mean we have to say that. And the big entree is right now with the PAM4 transceivers. And this year, we could do anywhere between 4 million to 6 million units of PAM4 transceivers, right? So -- but the other hand, the data center is not just a PAM4 world. There are compute tracks. There are communications between data centers. And that market itself will grow as the data center clusters increase and the number of data centers increase as well. So we talked about this exciting design win with the Tier 1 OEM who is supplying to Tier 1 data centers and of using PON as a control play layer, not where the data itself is going through between data centers. And there, we are clearly the leaders in the PON silicon offering. And so we should be very well positioned. So that could be a few -- that market size, some of these OEMs have talked about hundreds of millions of dollars of value for the silicon play. So that's one opportunity. So it won't happen in 1 year. It will roll out over the next 2 years. Hopefully, we'll start seeing in '27 and then it grows beyond that.

And then there's the other thing where these racks have become really -- these compute racks and server racks have become very, very, very sophisticated. They have their own telemetrics. Even the racks are being controlled with microcontrollers and so on and so forth. So you need industrial quality sort of transceivers, serial bridges and so on and so forth and even smart power management and stuff and then overall control in the rack. So the rack itself is a huge beast by itself. So we are beginning to start getting design wins in that, and that could be a pretty huge play per rack, if you will. So at this point, I am not very what I call -- I don't want to provide market sizing at a level that we need to ascertain. But that market is very, very huge. There are a number of players, but we have the portfolio depth to participate in all the big spend that is happening as data centers are being built out.

And then maybe just secondly, for you, Steve. Just looking at the share repurchase authorization, that clearly signals some confidence, I think, in the growth trajectory, but also on the potential arbitration there. So maybe if you could just kind of speak around the share repurchase authorization and how we should be thinking about that and what you're telegraphing to the Street.

Yes, David, absolutely. No, I think the Board took some actions last quarter, authorizing $75 million of buyback, took action on it in the quarter, felt the stock was a good place that we wanted to act on it. But frankly, I think the Board really wanted to just convey the confidence in the balance sheet. The cash flow improvement, we've talked about it running ahead of plan. It has run ahead of plan now for 3 quarters in a row. Revenue stability and the outlook that we have from the business continues to improve. And so I think our actions kind of follow that and including the mention of the arbitration as well.

Your next question comes from Ross Seymore with Deutsche Bank.

Congrats on the strong end to the year and beginning of this one. Kishore, on the optical side, a couple of different questions have already been asked. But the competitive landscape, how are you envisioning that going from Keystone to Rushmore? Do you think your positioning gets even stronger? Are there -- the different technologies coming in create more competitive pressure? Just how do you think MaxLinear is positioned as we look forward?

Thank you, Ross. I won't call it Tore, but just joking here. Very, very good question. Both of you are complimented. So the strengthening is absolutely a word I love on the next-generation 1.6 terabit, our position is strengthening. We're gaining some ground and strengthening versus the competition. And I really feel that we are actually now speeding up a bit relative to where we were. And we are now -- we feel that we will really start pulling our weight as 1.6 terabit rolls out. And beyond that, what we call our big [ Sky ] product, 4 gig, 400 gigabit per lane, I think we show our capabilities, our strong low-power implementation capabilities, integration and very, very well-developed RF mixed signal skills. I think we will strengthen our position, and we are strengthening in certain geographies and 800 gig, we are -- we have strengthened our relative position. Within the U.S., just the timing of our product offerings, we got late as the #3. And from there, fighting to get to the #1 or #2 takes a little bit of a taller order and incumbency has incredible value. So I hope that puts things in perspective.

It does. And I guess pivoting over to Steve, just on the margin front, it sounds like you guys have a strong growth year, especially on the infrastructure side coming in 2026. How should we think about both gross margin trajectory just directionally and OpEx?

Yes. I mean, look, on the gross margin side, I mean, we've been talking about the improvement. We've been demonstrating that over the last 4 quarters. So we're seeing some upticks there. As you're aware, the product mix is kind of moving in our favor as infrastructure products typically drive a higher gross margins. I remain confident that we can exit the year at kind of starting with a 6% versus a 5%. We did guide to the 59.5% at the midpoint of our guidance. I mean you've got some headwinds with cost increases that are out there. But that being said, I think the mix longer term throughout the year will move in our favor, and we'll see some nice improvements.

With regard to the OpEx question, look, I don't want to necessarily guide for the whole year. But I mean, I think you've heard from us in the past, typically, we want to grow OpEx about half the rate of the top line. That being said, I don't think we necessarily -- we've been really dialing things back a little bit. We're seeing some nice improvements in efficiency for lots of reasons. And so I actually think we'll see a little bit lower than that. So maybe it's in the 4% to 5% increase this year.

And your next question comes from Tim Savageaux with Northland Capital Markets.

Congrats on the numbers. And first question was where did we end up '25 in terms of optical DSP revenue? I think you were guiding $60 million to $70 million. And can you give us any color there?

Yes. So Tim, I think -- so as you know, we don't break out these numbers. I think what we're consistent with what we've delivered over the last 2 to 3 years, I think the guidance that Kishore shared earlier is kind of evidence of what you've seen over the last 3 years of this doubling that we saw. I mean, keep in mind, 3 years ago, we were doing less than $20 million of revenue. And so I think we're really pleased with the progress we've made and very excited about where we're at. I would probably maybe take the opportunity to -- I mean, some of the background of where we exited the year, where we're entering this year. I mean we mentioned in the prepared remarks about the visibility that we have, the backlog that we have. It's in a much better position. I mean, just across all of our businesses, but particularly in the optical side. As you know, we've got 28-week lead times. And really confident in this kind of first half of the year where you've already got backlog, we're pushing to get some upsides in here, and we've already seen a lot of success on that front.

Okay. Great. I think we might have talked a little about this last quarter, but just based on the comments early in the call, I just want to make sure I'm hearing this right. So do you guys think you can grow faster than 30% overall in '26? Was that the comment? Because I think the comment was grow faster in '26 than '25? Or is there some more nuance or detail around that?

So Tim, I mean, look, as you know, we don't guide the whole year, and we're not going to do it here. We're not going to start today, I guess, I would say. But clearly, you see from the -- mainly the infrastructure growth, but we're seeing a lot of good traction on the PON side. We're seeing industrial multi-market really see a nice recovery this year. So I'm confident that we can outgrow the industry in 2026.

And your next question comes from Karl Ackerman with BNP Paribas Asset Management.

This is Sam Feldman on for Karl Ackerman. On optical DSP, do you expect the ramp to be linear throughout the year? And the reason for the $30 million range?

Sam, so I mean, actually, just to kind of follow on what I was just speaking about. I do think it will grow throughout the year as we have new programs that will come on, and we have share gains that will continue to gain traction throughout the year. But I would also say that it will be very strong right out of the gate in Q1 and Q2 because we do have really good visibility, and we have a few customers that are ramping right now.

Got it. And a follow-up. Can you discuss the timing and growth within broadband for the second major Tier 1 North American carrier in calendar '26?

Yes. So it will -- look, we've already started shipping some products. We mentioned that we had even started in Q4. It will be still pretty minor in Q1 and start more in earnest in Q2 and Q3.

Obviously, we have good visibility based on the lead times of the supply chain and the bookings that we have in place.

And your next question comes from Christopher Rolland with Susquehanna International Group.

So in your press release and also in your prepared remarks, you talked about gaining market share. I think it was a general comment across your product set. But I was wondering if there are some specific kind of needle-moving opportunities like in broadband? Are you gaining share versus Broadcom? Like what were you specifically trying to highlight there as actual revenue moving opportunities?

Chris, that's a very good question. It's a very broad statement. I think it's broadly true as well across the various categories, honestly. I mean if you look at optical transceivers, our revenue forecast reflects that we are gaining share, right, in some form. If you just go by the units, I mentioned 4 million to 6 million units of transceiver opportunities. Then you see that on the PON side, it's a very, very large Tier 1 player is beginning to ramp. And we -- in that particular category, we are gaining share versus our competition. On cable as well, we're beginning to gain share that many years ago was ours. We're gaining share against the competition. And then when you go to storage accelerators is a completely new market that we are paving the path forward with hardware acceleration compression. So that we have established incumbency has and that market itself is poised to grow both on the cloud side and the appliance side. And then what else? I mean it's broadly a correct statement, but actually, now that you asked the question, I think about it and say, you know what, damn right. So that would be my response to you.

Excellent. And then back to DSP, we track the transceiver market pretty closely, and we underestimated growth in the market there. It's, I think, growing faster than anyone expected, at least in terms of expectations for '26. You did suggest that there could be upside to your optical number, but why don't you even have more confidence there just given the upside in demand? And then maybe paired with that, are there any supply chain constraints that you're seeing out there that would lower your outlook?

Chris, so look, I mean, I think we're very excited about the ramps that are underway, right, that have already started and we're picking up traction. I mean Kishore spoke about the share gains, I mean, where we've won against the competition. So we're seeing that in the beginning of the year. So really excited about those. Great visibility into future ramps that are coming with some of the new customers, new wins. You mentioned supply chain. Yes, certainly, there's supply chain tightness out there. We're not concerned about that. I mean we're working with our suppliers. We've seen improvements thus far. So we haven't had any trouble. As you also know, even outside of the optical world, 80-plus percent of our business is really not exposed to that tightness. So that's good. Optical side certainly is. But we've had a lot of success there, and we're very confident in the outlook for this year.

Your next question comes from Quinn Bolton with Needham & Company.

I'll offer my congratulations as well. I guess, Kishore, I just wanted to ask, I think in the past, you guys have sort of said your DSP wins were more for front-end networks. As you start to ramp the 800-gig products here, are you starting to see some of those designs moving into the scale-out networks? Or do you think we need to wait for the Rushmore 1.6T product before you start moving into scale out?

It's very, very hard to parse usually what is scale up and scale out. They are broad categories, right? There are short reaches and long reaches and mid-reaches. And usually, the short reaches are in what you would call the scale-up network and the longer ones are usually on the scale-out side. So that's happening on the 800 gig side. So yes, we are shipping in the scale-up side now. But I still feel that most of it is still in the scale-out network -- the traditional scale-out network.

Sorry, just so we're clear, you're shipping in, I guess, what I would call front-end networks that the sort of the storage networks driven off the GPU? Or are you starting to ship in the GPU to GPU scale-out?

That's a more detailed question, but I would just say -- I'll leave it here. It's -- just leave it as scale-up networks and it is a smaller portion of the revenue that's starting and most of it is scale-out networks.

Okay. And then I guess, Kishore, you gave us some numbers, both revenue forecast for '26 for optical DSP and you said that could equate to 4 million to 6 million units. If I just do the math, it seems like it could imply an ASP sub-$25, which seems pretty aggressive. Can you just talk about the pricing environment? Do you guys feel like you're pricing below some of the other peers in the market? Is that helping you to gain share? Do you think you're pricing in line with others in the market?

I mean that's -- I think your conclusions are what you're going is absolutely not true. We try to be very competitive in the marketplace, and we try to ride the product competitiveness of our product, right? So I don't think in this market, you win by pricing, you win -- your performance is a must. And if there's such an exciting worldwide great phenomenon that's going on, pricing is the last thing that they would make decisions on, especially in a very, very sophisticated technology. So I think anybody says they're winning on pricing, they really are not looking in the right market.

Your next question comes from Alek Valero with Loop Capital Markets.

I wanted to ask, what do you see as being the biggest opportunities for gaining market share in 2026?

I think it's very, very clear, right? We started with optical transceivers as a category that is very meaningful. We have talked about our gains in the storage accelerators for the infrastructure market. We've talked about -- I'm listing the sequence of the value, right? Then what -- where the growth is coming in the PON market share -- market revenues increases. And the fourth part is the wireless infrastructure growth. I mean I'm exactly laying down the sequence of where the big growth in absolute dollars are coming. And I think they'll roughly track the percentages as well.

Got it. Super helpful on that. And just a quick follow-up. You sparked my curiosity on scale-up. I know you mentioned it's small for now, but I wanted to ask you if you can maybe provide some more color on the opportunity there for scale-up.

Look, it's a very, very concentrated market from a scale-up point of view, right, if you really look at it. However, it's a huge opportunity inside the rack, if you will, right, the compute systems. And the scale-up opportunity will span not just PAM4 interconnects, but there are PAM4 Ethernet retimers and so on, on those things, so -- which we have not hit upon. At the OFC, we will be announcing our electrical retimers for the Ethernet product category. And then there is the CPU opportunities as well, right? So it's a whole play for us. It's very, very early innings. And right now, let's stay focused and it's a heavy growth engine for us, and we are very excited about it.

Your next question comes from Tore Svanberg with Stifel.

Just two quick follow-ups. And yes, this is Tore, not Ross, and I'm a big Ross fan. So first of all, the connectivity segment, how should we think about the puts and takes there this year? Because obviously, part of connectivity is tied to cable or broadband, yet you also have the Ethernet business, obviously, that's doing quite well. So should we think of connectivity as also being down this year? Or does it have other subsegments growing fast enough to actually make it a growth segment in '26?

Tore, yes, connectivity certainly grows this year. Wi-Fi will grow this year as we -- as WiFi-7 starts to ramp. And then a lot of our Ethernet products that are transitioning 2.5 gig certainly grow this year as well. So both of those.

Very good. And my last question is...

I just want to remind that the -- sorry, Tore, I want to let you know that cable is a huge part of the market that we have revenues that is not paired with Wi-Fi. So they are like the sort of the dissociation and the association. So it depends on how that trends as well.

Understood. And my last question is sort of going back to the opportunities beyond DSPs. So you've talked about having products for AECs. Obviously, you have the high-speed analog products to go after LPO, LRO and so on and so forth. But you continue to call those out as very niche markets. So I guess my question is, if you do see those segments getting more traction, how long would it take for you to become a more material player in some of those areas?

Very good question, Tore. So I just want to lay the landscape of the sort of what I call the derivative product road map, right? You start with the PAM4 DSP products. And I know LRO is not an analog product. It is a DSP product. So the LRO is a natural derivative. It doesn't take us long to get there, and we will be pursuing that opportunity. And in a short while, we'll have something to show as well. And I think there is some traction because in the marketplace for LROs because it has legs beyond just one particular speed node, if you will, like. So with the LPOs have limited niche nature to it because the amount of reach that the LPOs can reach is quite constrained and has to be very structured and controlled. So I do believe that, that is a sequence in which it works out for us, at least. And I think that the market revenues in LROs grows much stronger as the speeds increase and the power benefits that LROs will deliver. And I think there are some data center people who are beginning to try them out and then there'll be a follow-through on that. So for us, the next 12 months is a place where we will start taking advantage of the product offerings and do these derivative product offerings.

And we have reached the end of the question-and-answer session. I'll now turn the floor back to Leslie Green for closing remarks.

Thank you, Diego, and thank you all for joining us. This quarter, we will be presenting at a number of financial and industry conferences. Details will be posted to our Investor Relations site, and we look forward to speaking with you again soon.

This concludes today's call. All parties may disconnect.

Greetings, and welcome to the MaxLinear Q3 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Leslie Green, Investor Relations.

Thank you, Alicia. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear's third quarter 2025 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 the fourth quarter of 2025, including revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, GAAP and non-GAAP interest and other expense, GAAP and non-GAAP income taxes and basic and diluted share count.

In addition, we will make forward-looking statements relating to trends, opportunities, execution of our business plan and potential growth and uncertainties in various product and geographic markets, including without limitation, statements concerning future financial and operating results, opportunities for revenue and market share across our target markets, new products, including the timing of production and launches of such products, demand for and adoption of certain technologies and our total addressable market.

These forward-looking statements involve substantial risks and uncertainties, including risks outlined in our Risk Factors section of our recent SEC filings, including our Form 10-Q for the quarter ended September 30, 2025, which we filed today. Any forward-looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward-looking statements. The third quarter 2025 earnings release is available in the Investor Relations section of our website at maxlinear.com.

In addition, we report certain historical financial metrics, including, but not limited to, gross margin, income or loss from operations, operating expenses, interest and other expense and income tax on both a GAAP and non-GAAP basis. We encourage investors to review the detailed reconciliation of our GAAP and non-GAAP presentations and 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 changes, including stock-based compensation and its related tax effects as well as potential impairments. Non-GAAP financial measures discussed today are not meant to be considered in isolation or as a substitute for comparable GAAP and GAAP financial figures. We are providing this information because management believes it is useful to investors as it reflects how management measures our business. Lastly, this call is also being webcast, and the replay will be available on our website for 2 weeks.

And now let me turn the call over to Dr. Kishore Seendripu, CEO of MaxLinear. Kishore?

Thank you, Leslie, and good afternoon, everyone. We are excited about our strong Q3 2025 results and the strengthening momentum of our overall business over the last 12 months. Our Q3 2025 revenue of $126.5 million represents 16% sequential and 56% revenue growth year-over-year and drive a substantial increase in non-GAAP net income, both sequentially and year-over-year.

Our focused investments in data center, optical interconnects, wireless infrastructure, PON broadband access, Wi-Fi 7, Ethernet and storage accelerator products are enabling us to lay the significant groundwork required for broadening customer traction, new and increased content opportunities and sustained growth in 2026.

In our infrastructure end market, in Q3, revenues were up 16% sequentially and up 75% on a year-over-year basis. We also expect strong revenue acceleration in 2026 as new design wins begin to ramp across our portfolio. In high-speed data center optical interconnects, we are on track to deliver $60 million to $70 million in revenue in 2025 and accelerating growth in 2026.

As evidenced, our Keystone PAM4 DSP family is now qualified at several major data centers in the U.S. and Asia for 400-gig and 800-gig deployment starting 2026 as part of their AI infrastructure build-out. We also made significant progress with our Rushmore family of PAM4 TIAs and 200 gigabit per lane DSPs for 1.6 terabit interconnections and are on track for production ramp in 2026. Rushmore advances our DSP road map and provides foundational technology for emerging optical connectivity trends such as active electrical cable, LROs, LPOs and co-packaged optics for 200 gigabit per lane and 400 gigabit per lane implementations.

In wireless infrastructure, we expect increases in carrier CapEx spending to drive demand later this year and throughout 2026. Our Sierra 5G wireless access single-chip radio SoC and our millimeter wave and microwave backhaul transceivers and modems are seeing a significant increase in design activity and customer traction.

In Q3, 2 major North American telecom providers launched new Sierra-based 5G macro remote radio unit products, which will continue to ramp through the end of 2025 and in 2026. At the IMC conference earlier this month, we also jointly announced and showcased Pegatron's next-generation 5G Open RAN macro radio unit powered by our Sierra product. As we look ahead, we project sustained growth in 5G wireless access and backhaul as the needs for cloud and edge AI functionality continue to grow in 2026 and beyond.

Beyond wireless infrastructure, within our infrastructure category, we continue to see strong design win success for our Panther family of hardware storage accelerator systems-on-chip solutions across Tier 1 network appliance and cloud service providers. In Q3, we announced our Panther 5 storage accelerator that delivers ultra-low latency, 450 gigabits per second throughput and PCIe Gen 5 connectivity.

The announcement coincided with a joint keynote address with Advanced Micro Devices at the FMS 2025 Storage Conference on the transformation of enterprise data storage. Panther delivers significant advantages over traditional software-based compression, including a 4x improvement in power savings and more efficient usage of CPUs and CPU cores and AI accelerators.

Moving to broadband and connectivity. We saw another exceptional quarter of growth for the combined portfolio of fiber PON, cable DOCSIS and Wi-Fi solutions, driven by the early increases in service provider CapEx spending that has contributed to continued booking strength and incremental demand.

Broadband was up 80% year-on-year and connectivity was up 50% year-on-year. This quarter, we are beginning ramp of our single-chip integrated fiber PON and 10 gigabit processor gateway SoC plus tri-band Wi-Fi 7 single-chip platform solution with a second major Tier 1 North American carrier.

In cable broadband, we are seeing the initial commercial rollouts of DOCSIS 4.0 led by smaller MSOs. We expect DOCSIS 4.0 ramp to accelerate in 2026, which in turn drives content opportunities for our Wi-Fi 7 and Ethernet solutions.

In the Ethernet market, we continue to see the adoption of our innovative high-functionality, low-power consumption 2.5 gigabit Ethernet switch and PHY portfolio into commercial, enterprise and industrial applications. This market continues to grow as demand for higher data rates and increased bandwidth intensifies and 2.5 gigabit Ethernet is well positioned to bridge the gap between gigabit Ethernet and costly higher-speed options of 10-gigabit Ethernet.

In conclusion, in the last 12 months, we delivered significant and sustained improvement in our business, driven by strong revenue growth, growing profitability and positive cash flow generation. Through our strategic investments in high-value end markets such as high-speed data center optical interconnects, wireless infrastructure, multi-gigabit PON access, storage accelerators, WiFi connectivity and Ethernet, we're driving strong product traction with Tier 1 customers and partners.

Our success in these areas, combined with the incremental tailwind from the ongoing recovery in our core markets, strongly positions MaxLinear for exceptional growth in 2026 and beyond.

With that, let me now turn the call over to Mr. Steve Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer.

Thank you, Kishore. Total revenue for the third quarter was $126.5 million, up 16% from $108.8 million in the previous quarter and up 56% from $81.1 million in the third quarter of 2024. Infrastructure revenue for the third quarter was approximately $40 million, broadband revenue was approximately $58 million, connectivity revenue was approximately $19 million and our industrial multimarket revenue was approximately $9 million.

GAAP and non-GAAP gross margin for the third quarter were approximately 56.9% and 59.1% of revenue. The delta between GAAP and non-GAAP gross margin in the third quarter was primarily driven by $2.6 million of acquisition-related intangible asset amortization.

Third quarter GAAP operating expenses were $113.2 million and non-GAAP operating expenses were $59.5 million. The delta between GAAP and non-GAAP operating expenses was primarily due to stock-based compensation and performance-based equity accruals of $32.5 million combined, restructuring costs of $11.3 million and acquisition-related costs of $9.6 million.

GAAP losses from operations for Q3 2025 was 33% and non-GAAP income from operations in Q3 was 12% of net revenue. GAAP and non-GAAP interest and other expense during the quarter was $2.1 million and $1.8 million, respectively.

In Q3, net cash flow provided in operating activities was approximately $10.1 million. We exited Q3 of 2025 with approximately $113 million in cash, cash equivalents and restricted cash ahead of our 2025 plan. Our day sales outstanding was down in Q3 to approximately 39 days. Our gross inventory was approximately flat versus the previous quarter with inventory turns improving to 1.8x.

This concludes the discussion of our Q3 financial results. With that, let's turn to our guidance for Q4 of 2025. We currently expect revenue in the fourth quarter of 2025 to be between $130 million and $140 million. Looking at Q4 by end market, we expect to see some seasonal moderation in broadband and connectivity coming down from Q3, but expect growth from infrastructure and the industrial multi-market.

We expect fourth quarter GAAP gross margin to be approximately 56.0% to 59% and non-GAAP gross margin to be in the range of 58% and 61% of revenue. We expect Q4 2025 GAAP operating expenses to be in the range of $92 million to $98 million. We expect Q4 2025 non-GAAP operating expenses to be in the range of $57 million to $63 million. We expect our Q4 GAAP interest and other expense to be in the range of approximately $2.2 million to $2.8 million.

We expect our Q4 non-GAAP interest and other expense to be in the range of $1.9 million to $2.5 million, with FX volatility being the primary risk. We expect a $2.5 million tax benefit on a GAAP basis and a non-GAAP tax provision of approximately $2 million. We expect our Q3 basic and diluted share count to be approximately 87.5 million and 91.1 million.

In closing, it's gratifying to see some strong improvement in our business over the past 4 quarters, marked by continued growth in customer orders, expanding traction across product portfolio and our solid return to profitability. Our focused investments in strategic high-growth areas such as optical, high-speed interconnects, wireless infrastructure, storage, Ethernet, WiFi and fiber PON gateways are beginning to generate exciting business opportunities that we expect to further grow in revenues in 2026. This reinforces our confidence in our sustainable growth and profitability into '26 and beyond.

With that, I'd like to open up the call for questions.

[Operator Instructions] Our first question comes from the line of Tore Svanberg with Stifel.

Congratulations for the results. So I had a question for you, Kishore. So with the Q4 guidance, the company is pretty much tracking to 30% year-over-year growth in '25. You did say you expect exceptional growth in '26 and beyond. I know you typically don't give guidance, obviously, more than a quarter out, but can you maybe put some context on that comment in relation to the about 30% that the company is going to grow here in '25?

Thank you, Tore. Obviously, 2025, if you compare it to 2024, was exceptional growth overall and the return to profitability now is pretty solid. So -- and that's quite a significant growth in the overall in the semiconductor company. You look forward, if you look at the Street numbers, they are about 20%-odd into 2026. And that, I think, is about 2x what the industry is expecting.

Having said that, we have a lot of optimism based on the design win activities across our product portfolio, be it infrastructure, inside infrastructure, the optical customer wins and the timing of the volume ramps. And then we have our wins in wireless infrastructure. Those are accelerating and also our storage accelerator business. We do expect broadband to moderate somewhat. If you look at how strongly broadband has grown as the recovery has set in, but we still see growth with taking market share in these areas.

So overall, we try to be very cautious because a big part of the growth is coming through the infrastructure markets, and these are pretty large complex systems and there's a lot of customer concentration in some of these big markets. So we are just -- we are being conservative, but we also are, at the same time, displaying optimism in terms of the sheer breadth of the acceleration that we are seeing based on design win and customer activity and what I call booking strength that we are seeing. So I would like to tell you more, but at this point, let's continue to deliver the numbers is the way I look at it.

Yes. No, that's fair. And as far as the infrastructure segment, so obviously, we know what's going on, on the data center side and the optical business you have there. But I think the one with the more surprising thing is all the strength that you're starting to see on the wireless side. Obviously, you have some company-specific product cycles there, but it also sounds like the service providers are starting to spend some more CapEx again. So just hoping you could add a little bit more color there. And how should we think about the wireless part of the infrastructure segment for calendar '26?

Absolutely. I do see the wireless infrastructure, there's -- the telecom operators are beginning to spend on their infrastructure now. So I know 3 years ago, that was the topic du jour, but really now they're spending coming from a period of lean investment and we are seeing a lot of traction for our Sierra product line.

And we are the only single-chip solution provider for the remote radio units for the RAN network. So we're getting pretty strong traction. And I talked about -- and the quality of the product speaks for itself with the 2 big North American telecom operators who are actually Q3 qualified it are in the ramp phase.

Now how much do we expect it to grow? If you combine our millimeter wave, microwave backhaul infrastructure and wireless access is still in its initial ramp with Sierra. I think we see a pretty strong growth, maybe in the same order of as optical, let me put it that way, in the same order of magnitude.

But I do want to emphasize this point, right, is that infrastructure is a category where MaxLinear now you're seeing is getting substantially as a big percentage of overall revenue. That was the growth that we had invested strategically for the last 5 years. And now I still remain by my position that in the next 2 to 3 years, this infrastructure revenue should be in the $300 million to $500 million range. And I feel really very proud of our team that we stick with the plan and they're executing to it.

Our next question comes from the line of David Williams with Benchmark Company.

Congrats on the really strong progress here. It's great to see. So if you kind of think about the optical side of the business and the strength that you've had there, you've got some qualification. You talked about some ramps. Just kind of wondering if you maybe could give us some insight into how you think that will trend for next year? Could it be another doubling of that revenue or maybe how do you think about just that infrastructure piece or the optical piece in infrastructure?

I would like to say everything is a possibility given where the traction is right now. But we have also seen movements in the shifting of where we think a certain particular data center is going to ramp or a large enterprise customer.

Currently, a big part of the revenue in this year on the optical -- the data center connectivity is coming from 400 gigabit solutions, but now towards the end of the year in '25 and into 2026, 800 gigabit is beginning to grow. So that kind of gives you a sense of our momentum in terms of which data centers what we are tracking. And I feel that the 800 gigabit side, we are not any different than any -- and the normal course of where the data center guys are in terms of the various rollout.

So I think I would have liked to see even more traction than I'm speaking about, but I am also now -- while we are very proud of where we are, but we battered against pretty entrenched 2 other competitors, and that's taken a while to start cracking open, and it is definitely cracked open. And as far as OEM is concerned, all the major OEMs, we are part of their solution portfolio. And I hope we are their favorite one, and if not today, in the future, right? That's our goal here, okay?

Perfect. And then maybe, Steve, just kind of thinking about the gross margin guidance. I think just the 30 basis points there that you're guiding to, it would imply maybe a 64%, 65% type of incremental margin. Does that seem fair? And what are maybe the moving pieces there for that margin improvement for next quarter?

Yes, David, I think we're kind of finally starting to see things improve a little bit. I mean, as revenue really starts to ramp back up to some more material levels and naturally the mix, as we've talked about a while, I mean, you're seeing our infrastructure business continue to grow at a faster rate than the rest of the business, has a little higher gross margin mix. And so pleased with the progress. Looking into next year, hopefully, we can continue to see that.

And the growth is picking some momentum and the lead times on the fabs that we have dramatically increased as well. We're not the only one looks like who needs capacity. And the fabs have been increasing prices as well. And so we are not where we wanted to be on gross margins, but all the good work our team does seems like the fabs are consuming it. So yes, we are making good progress, but not as much as I'd hope on the gross margin front.

Our next question comes from the line of Joe Quatrochi with Wells Fargo.

Maybe another one on the data center optical side. Just trying to take another stab at your expectations for '26. I mean, we've seen a lot of -- a number of AI data center announcements over the last few weeks. Just curious how your visibility or pipeline of opportunities has changed since a quarter ago.

Look, a quarter is a long time, but also it's a very short time in the data center world, right? These interops, one of the biggest learnings for me is the interops always take longer than they tell you and they're always juggling their current build-outs versus qualifying new players.

So having passed the threshold with the major data centers on the interops, it has a way of generating its own momentum of MaxLinear's product. So naturally, you can tell by our tone, we are very, very excited and we're getting a lot of what I call pull now in terms of design win activity and such. So obviously, we're feeling very, very better.

And like I told in response to Tore's question, we feel very, very good. And the growth that we expect for optical or wireless infrastructure is of the same order and infrastructure will grow very, very nicely next year.

Got it. And then on the broadband connectivity side, I appreciate that it's typically seasonally down in the December quarter. Any sort of help in just terms of kind of framing this year relative to normal seasonality, just given I think there's been some inventory kind of things at play there?

Okay. So maybe Steve will give you a little bit more color. Normally, we see seasonality that sometimes December sometimes is the Q1. So we have always had an uncertainty for the ones who have followed us historically. So I would say this year is a little bit different in the sense the core recovery was happening. But the big growth came through what I'd call cable recovery.

And -- but we are winning designs on the PON side. We're very excited about the major telecom provider. Hopefully, you'll get one of our boxes at your home, so to speak. So PON is poised for very strong growth, but we do expect moderation. Look, we grew 80% year-over-year. So I think by any means, the broadband market is not naturally that kind of a growth vehicle, but it will moderate.

Yes. I think the only thing I would add, Joe, is maybe speak a little bit broader in '26 and '27. I mean, we are seeing nice CapEx spends over the next 2 years. You're seeing the telco guys rolling that out right now. We're certainly participating, as Kishore stated. And that's exciting because it's new business for us.

At the same time, you still got kind of this DOCSIS upgrade that's happening and has a meaningful content improvement, and that's going to start kind of late '26 and even into 2027. I think some of the cable operators have been delayed a little bit with some of the amps and the node upgrades that are happening. So maybe to the earlier point, yes, a little bit of moderation in the short term with regard to seasonality, but I think our outlook continues to be strong over the next couple of years.

Our next question comes from the line of Tim Savageaux with Northland Capital Markets.

My congrats as well on the strong results. I kind of want to come back and touch on a couple of questions that have already been asked. But -- and I guess it has to do with the accelerating growth commentary, which I don't know if that first comment was relative to the entire business, '26 over '25, but I think I definitely heard that comment made with regard to the optical data center piece. I just wanted to kind of clarify that and get, I guess, a little more color on where you guys are headed with those comments.

So clearly, it's not related to where the business was '24 versus '25. It's really related to the new opportunities that we had in front of us. Obviously, the new opportunities will grow much faster than what the overall business that it's pointing to based on Street's numbers around 20% growth or so for the company.

So the acceleration we're talking about is really in terms of the various opportunities here, okay? The first one is the data center connectivity, then I told wireless is in the same order, infrastructure. And then we have storage accelerators. Those are all brand-new or exciting data center type-driven markets. Those are where the exciting growth is, very, very strong growth, well above the company's overall growth rate.

Then we said broadband will moderate to its potentially normal level. But within broadband, with the puts and takes, PON is going to grow strongly because there's a large North American operator coming online. And so those are the buckets I would look at as strong growth opportunities that are accelerating. And at the overall company level, that translates to a pretty robust growth that I referred to earlier. Okay?

Yes, okay. Let me try one more time. So if we take AI optical in particular, somewhere in the middle of your range. And I'd be interested as an aside as to whether you have any thoughts about the higher or low end of that $60 million, $70 million range as we stand here in October. But assuming we're mid-range, that's 80%, 90% growth, something like that. So accelerating growth there would be up toward triple-digits. And from an absolute dollar standpoint, I think what you're telling us is that growth you should see on the wireless side as well. I want to make sure I got that right. And I have one more very quick one.

Yes. So Tim, since nobody likes Kishore's answers, I'll try. Joking aside, look, I think we're very excited about the outlook on the infrastructure side. I mean, optical is clearly where we've been spending a lot of time and efforts. And we're seeing that potential that you're referring to, I think we're having a great year this year. It's very back-end loaded. And looking out into next year as these new data center wins ramp into production, yes, I mean, these numbers go up meaningfully and we're very excited about that.

Are there other pieces in infrastructure that continue to do well? Yes, absolutely. And we're excited about those also. But data center is going to lead the way from a growth number, nonetheless.

Great. And that's actually very relevant to my very brief final question, which is on the Q4 guide. Looks like infrastructure is doing most of the work there, maybe up 20% plus sequentially. Could you break that down between optical or wireless or any other big drivers for that sequential growth in Q4?

Yes. Look, it's a good question. I guess, I would just say with regard to some of that end market guidance. So you're right, infrastructure is the biggest contributor in Q4. I think that was, for the most part, expected that you would see that particular end market growing the most. I mean, some of the moderation that we spoke of earlier on broadband and connectivity is modest. I mean, indeed modest. It's not that big.

Industrial multi-market is on the mend, I would say, and we're starting to see some improvements there. But I'll keep from going into specifics on all the line items that drive infrastructure growth. But suffice it to say, we're very excited about some strong back-end and infrastructure growth that will lead to nice revenues in 2026.

The next question comes from the line of Christopher Rolland with Susquehanna International Group.

Congrats, guys. So this one is probably for Kishore. So Kishore, I felt like I sensed a bit of hesitation to really extend yourself in the optical guide or comments for next year. You did mention stuff like competition, and there's a lot to this beyond just kind of pure DSP performance, like laser availability and/or bundling and other dynamics. So I was wondering if you could kind of expand a little bit more there on your outlook and what gets you to like a hyper growth outcome for next year for MaxLinear versus like just a solid growth outlook?

That's a very complicated question with lots of dynamics there. I would -- yes, availability will be a big issue, whether it is optics or silicon even, for example, that's a big factor. And the other factor is also the timing of our wins and when they translate to actual revenue growth. So at this point, our growth assumptions are based on what's already started ramping, right? So based on that, I can qualify that it will be very solid growth, very solid growth.

Hyper growth is a very hyperbolic question. So it will take things that are already ramping to be much more -- we get even more share than we planned for is one way to look at it, okay? So whatever growth we are referring to, we are not referring to based on many more new design wins, right? We can only project growth based on what we have won and what has started ramping, okay? So I think that kind of sets the stage.

So hyperbolic growth would be based off getting much more share than we thought and solid growth would be based on the shares we assume at this stage in our play in the data center, okay?

Perfect. And then also probably following up on your broadband comments. Just as we -- you had some comments around DOCSIS 4 as well. Like is this going to be a big driver of new upgrades here and for this business finally or do you think like the fiber opportunity and growth there is more meaningful for you guys as we look forward?

As the Professor always said, it depends. It depends on a number of things. One of the things that it depends upon is DOCSIS 4.0 ramp. And clearly, the main players have delayed their DOCSIS 4.0 ramp because the network upgrades that they planned for, they have sort of slowed down for whatever reasons, right, due to the complexity of it or not. So that could make a huge meaningful difference on the cable growth.

So that brings the question, as you rightly pointed out, on the fiber side. So we have a lot of North America operator ramping. We are winning a bunch of shares right now and the timing of those. So at this point, when I think of broadband, there are 2 factors that would make for a meaningful broadband growth and not overly moderated as we were alluding to. One is the DOCSIS 4.0 ramp and rollout. And we are very confident of the North American telecom operator ramping, the second one, the big one. And there are a couple of others that if the timing is right, that could also set up a nice growth for broadband.

Our next question comes from the line of Ananda Baruah with Loop Capital Markets.

Congrats on the steady progress here. It's good to see. Look, this is a bigger picture growth question. We're all thinking the same way. Let me just ask you this, Kishore. Coming out of COVID, you've put up a good growth year coming out of COVID, not dissimilar to 2025, the growth rate. And then you had an amplified growth rate coming off of that year as well with the first year coming out of COVID off of a negative comp, too. So the similarities, I think, is why people are probably focused on it.

What would be the things -- are there any meaningful differences with the business? Any meaningful differences with the supply chain? Any meaningful differences with inventory right now that would have the pattern coming out of this time around be different than COVID? Obviously, I understand COVID was unique, but the growth rates are actually similar. And you guys have more incremental punchy opportunities, market opportunities that you've been preparing for coming out of this pause than you actually did back then. So let me ask that. And then I have a quick follow-up as well.

Ananda, let me try to take a stab at your question. There's a fundamental difference between what we are talking today versus what you saw in the COVID phenomenon, as I call it. That was a very broadband-driven growth. And now it's really infrastructure being a huge part of the growth.

And secondly, as always, these events happen, businesses change, legacy businesses. And so right now, the infrastructure growth, there are components of it that are really primarily brand new revenues. And they have a huge TAM and massive TAMs, much more than anything we were looking at before, where our share of that market is very tiny. So there's a large growth in front of us as we become successful and continue in our strategic focus and investments. That's, I would say.

Secondly, the inventory situation is totally different. Nobody is doing excess stocking whatsoever, right? So now we are in a place where sell-through and sell-in, if you will, are kind of in balance equilibrium, let's call it, right? So there's no unusual sort of events of that nature.

So on the supply chain side, it's dramatically different. There are geopolitical issues that are in play now. And then there's a large dependency on the foundry choices one can have in the SoC markets versus non-SoC markets. So very, very different. And the advanced nodes are much more entrenched now than they used to be before. So if you look at 16 nanometer and beyond, it's all FinFET-based versus previously it was older nodes than 16 nanometer. So I just want to leave it there.

And the fabs have now completely muscled on their pricing power. So you have to be incredibly more innovative to maintain your margins than it's not a one-trick scenario that you can charge margins because you were there at the right time for the right market. But if you're going to be a company like MaxLinear across portfolios, you really have to have a sustainable, consistent execution and value proposition to maintain or grow your gross margins. I would say that with the comprehensive color.

Okay. So let me allow you to ask your second question. So let's see, maybe Steve is better positioned for that.

Awesome. That's awesome. Yes, just real quick on neoclouds. With more hyperscale workloads, AI workloads moving to neoclouds, large AOIs moving to neoclouds, does that necessitate you guys -- this is really an infrastructure question, a DSP question. Does that necessitate you guys having to broaden out your relationship set to participate in those? Just what's -- fill out that sort of whole paradigm for us, that would be great. And that's it for me.

Okay. That's a very, very broad generic question, right? We have to broaden our relationships, but we also have to deepen our relationships which is a very challenging proposition. Unless you are in the revenues, conversations get -- are difficult. Now that we are in the revenues, those conversations get -- it's like a natural spontaneous defrictionization of the system.

So what I would call acceleration. I'm just worried about acceleration word, but yes, I'll use it here. So as we start generating revenue and win their confidence, they naturally lead to more dialogues. That's just part for the course. So where you're successful, you have more and more conversations and you can broaden those conversations. Where you're trying to get in, you really have to narrow and deepen those conversations first because the general question to you is, prove yourself first before you want to talk about everything in the world.

So that's the -- but that's pretty standard in the new market and the data centers are much more challenging because they are a well done to themselves. So that's how I would describe it. And the amount of money you have to spend on marketing and support and all is incredibly higher even before you have any revenue. So that's been the other mitigating experience trying to get into these markets.

Our next question comes from the line of Quinn Bolton with Needham & Company.

I guess, maybe I'm a little just thick headed, but I just wanted to come back on the broadband comments. You're talking about moderating or a moderation in that business. Are you talking about the growth rate is going to moderate from something like 80% year-on-year to a lower percentage, but still growing or are you talking about the business actually potentially declining next year? And if it declines, is it simply just maybe normalization in cable, the DOCSIS 4 ramp really not ramping until late calendar '26. And so the moderation in cable kind of offsets the growth in PON. Is that the right way to be thinking about it or do you think the overall business just still grows. It's just not going to grow at 80%?

Quinn, nobody accused you ever of being thick headed. I just want to clarify that first, okay? The second part of it is you're absolutely right. We're talking in absolute terms and not in percentage terms. We don't see overall decline. But on the broadband side, we just see sort of growth through the next year, so to speak, range we are thinking about.

Can it grow? I think it was asked by Chris Rolland that you've got the fiber PON design wins that are in place and the DOCSIS 4 ramp has to set in to see some good growth beyond this year. That's fairly correct.

So Steve, do you want to add anything more?

No, no. I mean, look, the moderation comment is around Q4. That was the guidance. We just talked about Q4. We haven't given any guidance beyond that. But my comments about the market and the CapEx spend, I mean, kind of to Kishore's point, PON is picking up. There's lots of great opportunities. These are all market share gains for MaxLinear, a market we haven't been in. So really exciting times from that standpoint.

And then I think the excitement around DOCSIS is a 50% content increase, right? So you got the DOCSIS rolling out. We're shipping products this year, but it will kind of pick up next year and even into 2027. So that content increase is exciting.

Got it. Makes sense. And then maybe a longer term question for you, Kishore. I think it's pretty well known that optical modules are somewhat supply limited in the near term by supply of EML lasers. You mentioned silicon as a potential constraint as well. And I think your Keystone product being manufactured at Samsung instead of TSMC, where all your competitors manufacture their DSPs. How much of an advantage do you think that could become if the market for 3 to 5 nanometer stays tight?

Our Keystone, I think it is public information is the first -- probably the only 5 nanometer CMOS solution for 100-gig lane product that's in production. And our Rushmore, which is the 1.6 terabit solution, 200-gig per lane is in Samsung. So that gives you some level of natural diversification because the biggest demand between 800-gig and 400-gig and 1.6 terabit will center around those 5 nanometer node process.

And the tightness comes in, in the supply there because there's a lot of GPU vendors, et cetera, that are really in mass production in 5 nanometer and moved into 3 nanometer moving there. So these are the 2 nodes that are the most highest occupancy where scale is super, super important for getting more capacity.

So while that was a generic comment, it also shows that we have to be cautious about growth. We are constrained the what I call the hyperbolic growth. There are all kinds of factors. So it should help in the long run, but in the short run, we are in production in 5 nanometer with our Keystone product line, and that's the node we are in. And we're very happy with the support we are getting, of course.

Will we need more? There is more growth that just comes our way? Absolutely. It's very hard to plan at this point because everybody has allocated the capacity and then you have to fight for the extra, if you will.

Our next question comes from the line of Richard Shannon with Craig-Hallum.

A couple of questions here. First one is probably for Kishore on DSP here. On the last earnings call, you talked about the potential with your Rushmore family to potentially have some level of incumbency being the first one to be a supplier in any one particular situation. Wondering if that's playing out here. You're expressing certainly a lot of enthusiasm for how things are going there. I would love to get a sense of the degree to which that is happening or you think there's a good chance of it happening?

So obviously, we talked about Keystone, which is what is driving the revenues, the Keystone family of products. But Rushmore is our 200 gigabit per lane that we demoed at OFC. As you are all aware, the incumbent announced that product maybe a few months before us, and so they're a little bit further along. But our product is highly more differentiated is our view and our belief.

So we hope to be -- we not hope. We know we'll be in production in 2026. But at this point, we are not baking any revenues associated with, in my mind, based on what we have been through on the 200-gig per lane. And there's also a rollout issue on 1.6 terabit at the data centers as well. That's really -- 800-gig is not fully rolled out yet, too. I know we like to get ahead of it and focus on road map. I think there's time for 1.6 terabit and -- but we're in a very good place. So Rushmore, yes, best case will be the end of '26, but I'm not -- I'm being realistic. And -- but Keystone, Keystone, Keystone. Rushmore would be -- is a good plan for '27? Absolutely. Okay?

Okay. My second question in an effort to express some love for all of our children. Let's ask one quick question here on the industrial multi-market business here. Obviously, it's come down a lot the last few years. It looks to be kind of bumbling along the bottom here so far this year. How do we think about the potential scale of this business in the next 1 to 2 years? Is this something where you're applying much effort here from a product and sales and marketing point of view to grow it nicely or is this just more of an afterthought relative to some of the other dynamics in your business?

Look, there are some business, how much of a money you put in, they take their own time. So I would call that we are doing what I'd call sustainable growth rate investments as you should in this marketplace. I think the big hit happened because of geopolitics issues and then -- and generally, in the industrial market space itself, it's distant memory now, but we lost significant revenue when we were hit with the expiry of our licenses for the government to ship to certain customers in Asia. So the drop was associated with that.

And then at the same time, when the market went down, we exercised pricing discipline to maintain a healthy gross margin business. So you could argue that some of those are very deliberate decisions and some of them were really, really -- we were recipients of things out of our control.

Having talked to you about investments, even on our industrial multi-market investments are really, really focused around edge, cloud, data center level of investment. There's a lot of new ways of doing old things inside a data center. I don't want to get into the details into that stuff. And those are giving us opportunities to reposition our portfolio and investments really focused on edge and cloud data center. And we are investing in those elements of it.

As a company, our focus right now is a huge focus is on the hugest dollars that are going are really on the edge and enterprise and cloud infrastructure and they consume so many components even in the industrial analog space, and that's where our focus of our investment is. So in short, we are investing, right? That's the statement.

Our next question comes from the line of Karl Ackerman with BNP Paribas.

I have 2 as well. First question, as we think about your ability to see the broadband segment revenue returning to $100 million a quarter, could you help us frame the opportunity from your -- I guess, your gateway opportunity within that now that it is broadening beyond the single carrier today?

Well, okay, a couple of things. So the PON business is new for us, right? This business has been growing over the last, call it, 1.5 years. We've gotten a lot of traction. Kishore spoke earlier about the 2 big North America guys that are now using our products. So that's very exciting. But we have several other customers that we're either in production with or designed into on the PON front.

If you -- maybe I'm not sure if this is exactly your question, Karl. But if I think of content opportunities inside of the gateway from a dollar constant standpoint, a PON gateway or even a cable gateway, I mean, you're talking could be $40 to $50 of content. A lot of that comes from WiFi, Ethernet, the SoC itself. So those are the bigger drivers.

We continue to see content increases. So that's a big part of the opportunity. It's not necessarily just about unit growth or share gains, which we're seeing both of right now and expect to see over the next 2 years. But then that content gain is, I think, the other big driver of revenue.

Got it. Understood. Shifting gears a bit, could you speak to the breadth of design engagements you have in optical DSPs for 800-gig? And second, when should we expect the revenue from 800-gig to cross over your revenue from 400-gig?

Okay. Let me try to answer the question on the breadth of design engagements. There is -- the breadth of the design engagements from our point of view, from our -- where we are is really all the OEMs or module makers, if you will, we're engaged with all the major module makers in Asia and in America, whether they're headquartered or not. And so that's a massive engagement across all variations and configurations of not just transceivers, but beyond optical transceivers. And so you have to take that into perspective.

Now if you go to the data centers, every data center has got their own road map and time line when they're transitioning. For example, Google is well gone beyond 800 -- that's well past loss, let's call it that. We never even engaged with them. I don't think anybody else is engaged except one player. And then there's NVIDIA, which is a whole different new magnitude and size of themselves. We are not participating with that. We talked to you about -- then the remaining guys are going at their own different cadence on and they're lagging, if you will, in the terms of the deployments.

So each engagement, how broad it is, it depends on when you ask the question. At this point, we are engaged with them. Where are we shipping? That's a subset of the hyperscalers between the U.S. and Asia.

Our next question comes from the line of Suji Desilva with ROTH.

Congrats on the progress here. Kishore, you talked about DOCSIS 4 having adoption delays or push-outs. Are there technical issues that you could talk about in a little detail to help us understand what is maybe gating larger flagship adoption of DOCSIS 4?

Okay. Great question. No news. It's as expected versus what you guys think it should be. We know the cable world incredibly well. As I suspected, as we told that there will be a lot of DOCSIS 4.0, but most of the deployments will be Ultra DOCSIS. So because the network upgrade, whether it is the node, whether it is the amplifiers in the amps in the system, it's a lot of work. And they just have stability issues in the network to get there. So it's a very slow process.

And so they're doing the incremental approach where they hurry us all to invest and be ready, but the deployment is taking the way it does. So that's the only reason. And so I still will conjecture that Ultra DOCSIS 3.0 will be the massive deployment. And yes, that would be one statement. And that will go across continents. It's not just -- because you just want to keep in mind, 4.0 is a very North American phenomenon.

So Steve, do you wanted to say something?

No, I was just -- it was 3.1. You said 3.0. It might have been 3.1.

Okay, great.

Okay, great. And then perhaps for Steve, any update on the arbitration? I know that we're approaching the time for that to commence.

Sure, sure. Yes, no big update. I think we're on track, arbitration this quarter. So -- but that's going to extend next year. So hopefully, we see some resolution sometime in the first half of next year. So on track. I think we're feeling very positive about it.

Our last question comes from the line of Tore Svanberg with Stifel.

Yes. Two quick follow-ups. I promise real quick. First of all, so when I look at your various segments, it looks like broadband right now is running about 10 percentage points above infrastructure. But given the moving parts in calendar '26, it sounds like infrastructure will potentially be slightly bigger as a percentage of revenue. Do I sort of have that direction right?

Well, so certainly, I think we've been consistent in saying infrastructure is going to be quite a bit bigger, and I think it's on its way. I think you're heading in the right direction.

Very good. And then the last one for you, Steve. So OpEx is coming in a little bit higher than where it was. I mean, obviously, your revenues are $6 million higher for Q4. So that's probably expected. But I was just wondering how we should think about OpEx, especially in relation to the restructuring you had early in the year. Does OpEx come down a little bit in the first half or is this sort of the new baseline?

Yes. So I think we feel -- so you're right, it was a little bit higher in the quarter and the guidance a little bit higher as well. I mean, look, you can see the revenue ramps that we guided to or we delivered and guided to. I think as you look into next year, that's going to continue. And so I think we've got a lot of big customers that are asking, hey, we need software, we need platform support. Those are the type of efforts that we have to make.

And so there's probably a little bit of an adjustment there versus what we had started the year at. I wouldn't say there's much. I think you -- I think as you look into next year, you start to see some nice operating margins developing throughout the year, and we're really starting to see the leverage in the model that we're excited about.

I'd like to turn the floor back over to Dr. Kishore Seendripu for closing comments.

Thank you, operator. And also, thank you all to those who joined this Q3 quarterly call -- earnings call. There are a number of investor financial conferences that are both in person and virtual that we'll be attending this year and the details of which will be posted on our Investor Relations page. So we look forward to seeing you there, and thank you for joining today as well. And yes, with that, happy Halloween guys. Okay. Talk to you later. Thank you. Bye.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.