Fourth Quarter 2015 Revenue Increases 205 Percent Year-over-Year to $98.9 Million,
Bringing Full-Year 2015 Revenue to $300.4 Million, Representing an Increase of 126 Percent

CARLSBAD, Calif., Feb. 08, 2016 (GLOBE NEWSWIRE) -- MaxLinear, Inc. (NYSE:MXL), a leading provider of radio frequency (RF) and mixed-signal integrated circuits for cable and satellite broadband communications, the connected home, and for data center, metro, and long-haul fiber networks, today announced financial results for the fourth quarter and year ended December 31, 2015.

Management Commentary

“We are pleased to announce strong fourth quarter 2015 revenue of $98.9 million, consistent with our revised guidance issued on January 6, 2016, representing an increase of approximately 4 percent sequentially, an increase of approximately 205 percent year-over-year, and sequential expansion in both GAAP and non-GAAP gross margins to 56.4% and 58.1%, respectively. These results bring to close another successful year in which we increased our annual revenue by 126 percent. This strong annual revenue increase was not only enabled by the acquisition of Entropic in April 2015, but also by meaningful contributions from our organic initiatives in satellite pay TV and high-speed optical interconnect markets. The strength in fourth quarter revenue was broad-based, with increases derived from the early ramp of high-speed optical interconnect solutions addressing 100Gbps long-haul infrastructure upgrades in China, and additional growth across a range of cable and satellite platforms more than offsetting seasonal weakness in legacy video SoCs,” commented Kishore Seendripu, Ph.D., Chairman and CEO.

“We are also pleased to report a strong quarter of operating cash flow, one in which we generated approximately $25 million. The strong cash flow generation reflects our continued focus on supply-chain optimization, tight operating expense management, and related progress made towards the integration of Entropic.  We remain encouraged by the progress we are making in expanding our strategic footprint in our core broadband operator markets. At the same time, we are also exploiting new and exciting opportunities for our leading analog and mixed-signal technology platform in the wireless infrastructure, data-center, metro and long-haul telecommunications, and cable infrastructure markets.”

Generally Accepted Accounting Principles (GAAP) Results

Net revenue for the fourth quarter 2015 was $98.9 million, an increase of 4 percent compared to the third quarter 2015, and an increase of 205 percent compared to the fourth quarter 2014. Gross profit for the fourth quarter 2015 was 56.4 percent of revenue, compared to 53.6 percent for the third quarter 2015, and 60.8 percent for the fourth quarter 2014.

Operating expenses for the fourth quarter 2015 were $64.5 million, an increase of 31 percent compared to the third quarter 2015, and an increase of 166 percent compared to the fourth quarter 2014. Operating expenses as a percentage of revenue were 65 percent for the fourth quarter 2015, 52 percent for the third quarter 2015 and 75 percent for the fourth quarter 2014.

Net loss for the fourth quarter 2015 was $8.5 million, or $0.14 per share (diluted), which included $21.6 million in intangible asset impairment charges and $2.3 million in restructuring charges. These results compare to a net income of $1.6 million, or $0.03 per share (diluted), for the third quarter 2015, and net loss of $2.4 million, or $0.06 per share (diluted), for the fourth quarter 2014.

Cash flow provided by operations for the fourth quarter 2015 totaled $24.6 million, compared to cash provided by operations of $22.1 million for the third quarter 2015, and cash used in operations of $5.8 million for the fourth quarter 2014.

Cash, cash equivalents and investments totaled $130.5 million at December 31, 2015, compared to $104.8 million at September 30, 2015, and $79.4 million at December 31, 2014.

Net revenue for the year ended December 31, 2015 was $300.4 million, an increase of 126 percent compared to the year ended December 31, 2014. Gross profit for the year ended December 31, 2015 was 51.7 percent of revenue, compared to 61.6 percent for the year ended December 31, 2014. Operating expenses for the year ended December 31, 2015 were $199.1 million, a 119 percent increase compared to the year ended December 31, 2014. Operating expenses as a percentage of revenue were 66 percent for the year ended December 31, 2015, compared to 68 percent for the year ended December 31, 2014. Net loss for the year ended December 31, 2015 was $42.3 million, or $0.79 per share (diluted), compared to a net loss of $7.0 million, or $0.19 per share (diluted), for the year ended December 31, 2014. Cash flow provided by operations for the year ended December 31, 2015 totaled $55.0 million, compared to $12.2 million for the year ended December 31, 2014.

Non-GAAP Results

Non-GAAP gross profit percentage for the fourth quarter 2015 was 58.1 percent of revenue, compared to 56.7 percent for the third quarter 2015, and 60.9 percent for the fourth quarter 2014.

Non-GAAP operating expenses were $27.4 million, $29.1 million and $17.5 million for the fourth quarter 2015, third quarter 2015 and fourth quarter 2014, respectively. Non-GAAP operating expenses decreased 6 percent when compared to the third quarter 2015, and increased 56 percent when compared to fourth quarter 2014. Non-GAAP operating expenses as a percentage of revenue were 28 percent, 31 percent and 54 percent for the fourth quarter 2015, third quarter 2015 and fourth quarter 2014, respectively. Non-GAAP operating margins were 30 percent, 26 percent and 7 percent for the fourth quarter 2015, third quarter 2015 and fourth quarter 2014, respectively.

Non-GAAP net income for the fourth quarter 2015 was $30.1 million, or $0.46 per share (diluted), compared to net income of $25.1 million, or $0.40 per share (diluted), for the third quarter 2015, and $2.1 million, or $0.05 per share (diluted), for the fourth quarter 2014.

Non-GAAP gross profit for the year ended December 31, 2015 was 58.1 percent, compared to 61.7 percent for the year ended December 31, 2014. Non-GAAP operating expenses were $103.7 million and $69.1 million for the years ended December 31, 2015 and 2014, respectively. Non-GAAP operating expenses as a percentage of revenue were 35 percent and 52 percent for the years ended December 31, 2015 and 2014, respectively.  Non-GAAP operating margins were 24 percent and 10 percent for the years ended December 31, 2015 and 2014, respectively.  Non-GAAP net income for the year ended December 31, 2015 was $70.3 million, or $1.27 per share (diluted), compared to $12.5 million, or $0.32 per share (diluted), for the year ended December 31, 2014.

First Quarter 2016 Revenue and Gross Margin Guidance

We expect revenue in the first quarter of 2016 to be between $100 million and $105 million, GAAP gross profit to be approximately 57% of revenue, and non-GAAP gross profit to be 59% to 60% of revenue.

Conference Call Details

MaxLinear will host its fourth quarter and fiscal year 2015 financial results conference call today, February 8, 2016 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). To access this call, dial US toll free: 1-888-471-3843 / International: 1-719-325-2281 with conference ID: 4672837. A live webcast of the conference call will be accessible from the investor relations section of the MaxLinear website at http://investors.maxlinear.com, and will be archived and available after the call at http://investors.maxlinear.com until February 22, 2016. A replay of the conference call will also be available until February 22, 2016 by dialing US toll free: 1-888-203-1112 / International: 1-719-457-0820 and referencing passcode: 4672837.

Cautionary Note Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements concerning our future financial performance (including our current guidance for first quarter 2016 revenue and gross profit percentage); the impact of our recent acquisitions of Entropic and Physpeed; and trends and growth opportunities in our product markets. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by the forward-looking statements. Forward-looking statements are based on management’s current, preliminary expectations and are subject to various risks and uncertainties. Risks and uncertainties affecting our business, operating results, financial condition, and stock price, include, intense competition in our industry; our dependence on a limited number of customers for a substantial portion of our revenues; uncertainties concerning how end user markets for our products will develop; potential uncertainties arising from continued consolidation among cable television and satellite operators in our target markets and continued consolidation among competitors within the semiconductor industry generally; our ability to develop and introduce new and enhanced products on a timely basis and achieve market acceptance of those products, particularly as we seek to expand outside of our historic markets; potential decreases in average selling prices for our products; limited trading volumes; risks relating to intellectual property protection and the prevalence of intellectual property litigation in our industry, including pending litigation against us by a third party in the United States District Court in Delaware; our reliance on a limited number of third party manufacturers; and our lack of long-term supply contracts and dependence on limited sources of supply. In addition to these risks and uncertainties, investors should review the risks and uncertainties contained in our filings with the Securities and Exchange Commission (SEC), including our most recent Annual Report on Form 10-K for the year ended December 31, 2014 as amended by Amendment No. 1 filed with the SEC on March 12, 2015; our subsequent Quarterly Reports on Form 10-Q; and our Current Reports on Form 8-K. In addition, when available, investors should review the information to be set forth under the caption “Risk Factors” in MaxLinear’s Annual Report on Form 10-K for the year ended December 31, 2015, which MaxLinear expects to file with the SEC in February 2016. All forward-looking statements are based on the estimates, projections and assumptions of management as of February 8, 2016, and MaxLinear is under no obligation (and expressly disclaims any such obligation) to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.