We believe that non-GAAP financial measures can provide useful information to both management and investors by excluding certain non-cash and other one-time expenses that are not indicative of our core operating results. Among other uses, our management uses non-GAAP measures to compare our performance relative to forecasts and strategic plans and to benchmark our performance externally against competitors. In addition, management’s incentive compensation will be determined in part using these non-GAAP measures because we believe non-GAAP measures better reflect our core operating performance.
The following are explanations of each type of adjustment that we incorporate into non-GAAP financial measures:
Stock-based compensation expense relates to equity incentive awards granted to our employees, directors, and consultants. Our equity incentive plans are important components of our employee incentive compensation arrangements and are reflected as expenses in our GAAP results. Stock-based compensation expense has been and will continue to be a significant recurring expense for MaxLinear.
Bonuses under our executive and non-executive bonus programs have been excluded from our non-GAAP net income for all periods reported. Bonus payments for the 2017 performance periods were settled through the issuance of shares of common stock under our equity incentive plans in February 2018. We currently expect that bonus awards under our fiscal 2018 program will be settled in common stock in the first quarter of fiscal 2019. While we include the dilutive impact of equity awards in weighted average shares outstanding, the expense associated with stock-based awards reflects a non-cash charge that we exclude from non-GAAP net income.
Expenses incurred in relation to acquisitions include amortization of purchased intangible assets and step-up of inventory to fair value, depreciation of step-up of property and equipment to fair value, and acquisition and integration costs primarily consisting of professional and consulting fees.
Restructuring charges incurred are related to our restructuring plans which address issues primarily relating to the integration of the Company and acquired businesses or internal operations and primarily include severance and restructuring costs related to exiting certain facilities.
Expenses incurred in relation to our intellectual property and commercial litigation include professional fees incurred.
Income tax benefits and expense adjustments are those that do not affect cash income taxes payable. Effects of the Tax Act were excluded from Non-GAAP income taxes.
Reconciliations of non-GAAP measures for the historic periods disclosed in this press release appear below. Because of the inherent uncertainty associated with our ability to project future charges, particularly related to stock-based compensation and its related tax effects as well as potential impairments, we have not provided a reconciliation for non-GAAP guidance provided for the fourth quarter 2018.
About MaxLinear, Inc.
MaxLinear, Inc. (NYSE: MXL) is a leading provider of radio frequency (RF), analog and mixed-signal integrated circuits for the connected home, wired and wireless infrastructure, and industrial and multimarket applications. MaxLinear is headquartered in Carlsbad, California. For more information, please visit www.maxlinear.com.
MXL and the MaxLinear Logo are trademarks of MaxLinear, Inc. Other trademarks appearing herein are the property of their respective owners.
| MAXLINEAR, INC. | ||||||||||||
| UNAUDITED GAAP CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| Three Months Ended | ||||||||||||
| September 30, 2018 | June 30, 2018 | September 30, 2017 | ||||||||||
| Net revenue | $ | 85,010 | $ | 101,533 | $ | 113,581 | ||||||
| Cost of net revenue | 41,134 | 45,203 | 61,739 | |||||||||
| Gross profit | 43,876 | 56,330 | 51,842 | |||||||||
| Operating expenses: | ||||||||||||
| Research and development | 29,047 | 30,211 | 29,270 | |||||||||
| Selling, general and administrative | 24,963 | 24,501 | 29,037 | |||||||||
| Impairment losses | 2,198 | — | 2,000 | |||||||||
| Restructuring charges | 236 | 1,865 | 2,178 | |||||||||
| Total operating expenses | 56,444 | 56,577 | 62,485 | |||||||||
| Loss from operations | (12,568 | ) | (247 | ) | (10,643 | ) | ||||||
| Interest income | 17 | 19 | 1 | |||||||||
| Interest expense | (3,473 | ) | (3,694 | ) | (4,133 | ) | ||||||
| Other income (expense), net | 39 | 725 | (668 | ) | ||||||||
| Total interest and other income (expense), net | (3,417 | ) | (2,950 | ) | (4,800 | ) | ||||||
| Loss before income taxes | (15,985 | ) | (3,197 | ) | (15,443 | ) | ||||||
| Income tax provision (benefit) | (2,050 | ) | 11,225 | (6,276 | ) | |||||||
| Net loss | $ | (13,935 | ) | $ | (14,422 | ) | $ | (9,167 | ) | |||
| Net loss per share: | ||||||||||||
| Basic | $ | (0.20 | ) | $ | (0.21 | ) | $ | (0.14 | ) | |||
| Diluted | $ | (0.20 | ) | $ | (0.21 | ) | $ | (0.14 | ) | |||
| Shares used to compute net loss per share: | ||||||||||||
| Basic | 68,742 | 68,335 | 66,712 | |||||||||
| Diluted | 68,742 | 68,335 | 66,712 | |||||||||
| MAXLINEAR, INC. | ||||||||
| UNAUDITED GAAP CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (in thousands, except per share data) | ||||||||
| Nine Months Ended | ||||||||
| September 30, 2018 | September 30, 2017 | |||||||
| Net revenue | $ | 297,370 | $ | 306,597 | ||||
| Cost of net revenue | 134,496 | 150,727 | ||||||
| Gross profit | 162,874 | 155,870 | ||||||
| Operating expenses: | ||||||||
| Research and development | 90,379 | 82,163 | ||||||
| Selling, general and administrative | 76,581 | 78,988 | ||||||
| Impairment losses | 2,198 | 2,000 | ||||||
| Restructuring charges | 2,101 | 8,724 | ||||||
| Total operating expenses | 171,259 | 171,875 | ||||||
| Loss from operations | (8,385 | ) | (16,005 | ) | ||||
| Interest income | 54 | 260 | ||||||
| Interest expense | (11,061 | ) | (6,334 | ) | ||||
| Other income (expense), net | 193 | (1,430 | ) | |||||
| Total interest and other income (expense), net | (10,814 | ) | (7,504 | ) | ||||
| Loss before income taxes | (19,199 | ) | (23,509 | ) | ||||
| Income tax provision (benefit) | 7,311 | (33,770 | ) | |||||
| Net income (loss) | $ | (26,510 | ) | $ | 10,261 | |||
| Net income (loss) per share: | ||||||||
| Basic | $ | (0.39 | ) | $ | 0.16 | |||
| Diluted | $ | (0.39 | ) | $ | 0.15 | |||
| Shares used to compute net income (loss) per share: | ||||||||
| Basic | 68,256 | 65,950 | ||||||
| Diluted | 68,256 | 69,491 | ||||||
| MAXLINEAR, INC. | ||||||||||||
| UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| (in thousands) | ||||||||||||
| Three Months Ended | ||||||||||||
| September 30, 2018 | June 30, 2018 | September 30, 2017 | ||||||||||
| Operating Activities | ||||||||||||
| Net loss | $ | (13,935 | ) | $ | (14,422 | ) | $ | (9,167 | ) | |||
| Adjustments to reconcile net loss to cash provided by operating activities: | ||||||||||||
| Amortization and depreciation | 19,767 | 20,051 | 21,342 | |||||||||
| Impairment losses | 2,198 | — | 2,000 | |||||||||
| Provision for losses on accounts receivable | — | — | 46 | |||||||||
| Amortization of inventory step-up | — | — | 10,207 | |||||||||
| Amortization of debt issuance costs and discount | 287 | 287 | 301 | |||||||||
| Stock-based compensation | 7,940 | 7,309 | 7,796 | |||||||||
| Deferred income taxes | 304 | (1,289 | ) | (1,163 | ) | |||||||
| Loss on disposal of property and equipment | — | — | 286 | |||||||||
| (Gain) loss on foreign currency | (184 | ) | (828 | ) | 733 | |||||||
| Excess tax benefits on stock-based awards | (93 | ) | (318 | ) | (841 | ) | ||||||
| Impairment of leasehold improvements | — | 700 | — | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | 25,016 | 6,979 | 7,063 | |||||||||
| Inventory | 2,581 | 1,420 | 5,060 | |||||||||
| Prepaid expenses and other assets | 712 | 2,213 | 2,374 | |||||||||
| Accounts payable, accrued expenses and other current liabilities | (10,606 | ) | 11,540 | (17,453 | ) | |||||||
| Accrued compensation | 2,671 | 1,401 | 1,498 | |||||||||
| Deferred revenue and deferred profit | — | — | 3,907 | |||||||||
| Accrued price protection liability | (5,662 | ) | (132 | ) | 3,606 | |||||||
| Other long-term liabilities | (275 | ) | 913 | 144 | ||||||||
| Net cash provided by operating activities | 30,721 | 35,824 | 37,739 | |||||||||
| Investing Activities | ||||||||||||
| Purchases of property and equipment | (1,609 | ) | (2,423 | ) | (2,500 | ) | ||||||
| Purchases of intangible assets | — | — | (53 | ) | ||||||||
| Net cash used in investing activities | (1,609 | ) | (2,423 | ) | (2,553 | ) | ||||||
| Financing Activities | ||||||||||||
| Repayment of debt | (35,000 | ) | (18,000 | ) | (50,000 | ) | ||||||
| Net proceeds from issuance of common stock | 91 | 3,036 | 1,074 | |||||||||
| Minimum tax withholding paid on behalf of employees for restricted stock units | (1,178 | ) | (1,448 | ) | (1,426 | ) | ||||||
| Net cash used in financing activities | (36,087 | ) | (16,412 | ) | (50,352 | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 103 | 793 | (829 | ) | ||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | (6,872 | ) | 17,782 | (15,995 | ) | |||||||
| Cash, cash equivalents and restricted cash at beginning of period | 75,115 | 57,333 | 90,091 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 68,243 | $ | 75,115 | $ | 74,096 | ||||||
| MAXLINEAR, INC. | ||||||||
| UNAUDITED GAAP CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (in thousands) | ||||||||
| Nine Months Ended | ||||||||
| September 30, 2018 | September 30, 2017 | |||||||
| Operating Activities | ||||||||
| Net income (loss) | $ | (26,510 | ) | $ | 10,261 | |||
| Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||||||||
| Amortization and depreciation | 59,902 | 46,502 | ||||||
| Impairment losses | 2,198 | 2,000 | ||||||
| Provision for losses on accounts receivable | — | 133 | ||||||
| Accretion of investment discount | — | (60 | ) | |||||
| Amortization of inventory step-up | — | 15,842 | ||||||
| Amortization of debt issuance costs and discount | 861 | 476 | ||||||
| Stock-based compensation | 23,722 | 24,898 | ||||||
| Deferred income taxes | (3,317 | ) | (48,417 | ) | ||||
| Loss on disposal of property and equipment | — | 201 | ||||||
| Loss on sale of available-for-sale securities | — | 38 | ||||||
| (Gain) loss on foreign currency | (541 | ) | 1,415 | |||||
| Excess tax benefits on stock-based awards | (1,208 | ) | (6,598 | ) | ||||
| Impairment of leasehold improvements | 700 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 7,462 | (13,869 | ) | |||||
| Inventory | 11,677 | (2,331 | ) | |||||
| Prepaid expenses and other assets | 3,928 | 1,696 | ||||||
| Accounts payable, accrued expenses and other current liabilities | 513 | 576 | ||||||
| Accrued compensation | 6,574 | 216 | ||||||
| Deferred revenue and deferred profit | (138 | ) | 11,233 | |||||
| Accrued price protection liability | (7,153 | ) | 13,053 | |||||
| Other long-term liabilities | (154 | ) | (3,944 | ) | ||||
| Net cash provided by operating activities | 78,516 | 53,321 | ||||||
| Investing Activities | ||||||||
| Purchases of property and equipment | (6,413 | ) | (4,398 | ) | ||||
| Purchases of intangible assets | — | (5,378 | ) | |||||
| Cash used in acquisition, net of cash acquired | — | (473,304 | ) | |||||
| Purchases of available-for-sale securities | — | (30,577 | ) | |||||
| Maturities of available-for-sale securities | — | 84,546 | ||||||
| Net cash used in investing activities | (6,413 | ) | (429,111 | ) | ||||
| Financing Activities | ||||||||
| Net proceeds from issuance of debt | — | 416,846 | ||||||
| Repayment of debt | (78,000 | ) | (50,000 | ) | ||||
| Repurchases of common stock | — | (334 | ) | |||||
| Net proceeds from issuance of common stock | 4,107 | 9,092 | ||||||
| Minimum tax withholding paid on behalf of employees for restricted stock units | (5,017 | ) | (9,825 | ) | ||||
| Net cash provided by (used in) financing activities | (78,910 | ) | 365,779 | |||||
| Effect of exchange rate changes on cash and cash equivalents | 638 | 1,211 | ||||||
| Decrease in cash, cash equivalents and restricted cash | (6,169 | ) | (8,800 | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period | 74,412 | 82,896 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 68,243 | $ | 74,096 | ||||
| MAXLINEAR, INC. | |||||||||
| UNAUDITED GAAP CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (in thousands) | |||||||||
| September 30, 2018 | June 30, 2018 | September 30, 2017 | |||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 67,185 | $ | 74,059 | $ | 71,576 | |||
| Short-term restricted cash | 349 | 345 | 615 | ||||||
| Accounts receivable, net | 58,633 | 83,648 | 75,618 | ||||||
| Inventory | 41,757 | 44,338 | 63,692 | ||||||
| Prepaid expenses and other current assets | 6,329 | 7,305 | 7,917 | ||||||
| Total current assets | 174,253 | 209,695 | 219,418 | ||||||
| Long-term restricted cash | 709 | 711 | 1,905 | ||||||
| Property and equipment, net | 19,413 | 20,886 | 23,336 | ||||||
| Intangible assets, net | 261,813 | 281,017 | 332,409 | ||||||
| Goodwill | 238,330 | 238,330 | 239,673 | ||||||
| Deferred tax assets | 42,691 | 42,995 | 53,985 | ||||||
| Other long-term assets | 4,935 | 4,732 | 6,288 | ||||||
| Total assets | $ | 742,144 | $ | 798,366 | $ | 877,014 | |||
| Liabilities and stockholders’ equity | |||||||||
| Current liabilities | $ | 66,464 | $ | 80,160 | $ | 98,381 | |||
| Long-term debt | 270,470 | 305,183 | 367,322 | ||||||
| Other long-term liabilities | 12,816 | 13,102 | 14,663 | ||||||
| Total stockholders’ equity | 392,394 | 399,921 | 396,648 | ||||||
| Total liabilities and stockholders’ equity | $ | 742,144 | $ | 798,366 | $ | 877,014 | |||
| MAXLINEAR, INC. | ||||||||||||
| UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| Three Months Ended | ||||||||||||
| September 30, 2018 | June 30, 2018 | September 30, 2017 | ||||||||||
| GAAP gross profit | $ | 43,876 | $ | 56,330 | $ | 51,842 | ||||||
| Stock-based compensation | 131 | 120 | 93 | |||||||||
| Performance based equity | 53 | 47 | 34 | |||||||||
| Amortization of inventory step-up | — | — | 10,207 | |||||||||
| Amortization of purchased intangible assets | 8,969 | 8,968 | 7,907 | |||||||||
| Depreciation of fixed asset step-up | 95 | 96 | 113 | |||||||||
| Deferred profit eliminated in purchase price accounting | — | — | 810 | |||||||||
| Non-GAAP gross profit | 53,124 | 65,561 | 71,006 | |||||||||
| GAAP R&D expenses | 29,047 | 30,211 | 29,270 | |||||||||
| Stock-based compensation | (4,726 | ) | (4,454 | ) | (4,337 | ) | ||||||
| Performance based equity | (1,517 | ) | (1,297 | ) | (961 | ) | ||||||
| Amortization of purchased intangible assets | — | — | (96 | ) | ||||||||
| Depreciation of fixed asset step-up | (321 | ) | (324 | ) | (561 | ) | ||||||
|
Non-GAAP R&D expenses |
22,483 | 24,136 | 23,315 | |||||||||
| GAAP SG&A expenses | 24,963 | 24,501 | 29,037 | |||||||||
| Stock-based compensation | (3,070 | ) | (2,735 | ) | (2,965 | ) | ||||||
| Performance based equity | (785 | ) | (730 | ) | (517 | ) | ||||||
| Amortization of purchased intangible assets | (7,994 | ) | (7,994 | ) | (9,924 | ) | ||||||
| Depreciation of fixed asset step-up | (12 | ) | (12 | ) | (30 | ) | ||||||
| Acquisition and integration costs | — | — | (1,005 | ) | ||||||||
| IP litigation costs, net | (19 | ) | (19 | ) | (4 | ) | ||||||
| Non-GAAP SG&A expenses | 13,083 | 13,011 | 14,592 | |||||||||
| GAAP impairment losses | 2,198 | — | 2,000 | |||||||||
| Impairment losses | (2,198 | ) | — | (2,000 | ) | |||||||
| Non-GAAP impairment losses | — | — | — | |||||||||
| GAAP restructuring expenses | 236 | 1,865 | 2,178 | |||||||||
| Restructuring charges | (236 | ) | (1,865 | ) | (2,178 | ) | ||||||
| Non-GAAP restructuring expenses | — | — | — | |||||||||
| GAAP loss from operations | (12,568 | ) | (247 | ) | (10,643 | ) | ||||||
| Total non-GAAP adjustments | 30,126 | 28,661 | 43,742 | |||||||||
| Non-GAAP income from operations | 17,558 | 28,414 | 33,099 | |||||||||
| GAAP and non-GAAP interest and other income (expense), net | (3,417 | ) | (2,950 | ) | (4,800 | ) | ||||||
| GAAP loss before income taxes | (15,985 | ) | (3,197 | ) | (15,443 | ) | ||||||
| Total non-GAAP adjustments | 30,126 | 28,661 | 43,742 | |||||||||
| Non-GAAP income before income taxes | 14,141 | 25,464 | 28,299 | |||||||||
| GAAP income tax provision (benefit) | (2,050 | ) | 11,225 | (6,276 | ) | |||||||
| Adjustment for non-cash tax benefits/expenses | 3,040 | (9,443 | ) | 7,476 | ||||||||
| Non-GAAP income tax provision | 990 | 1,782 | 1,200 | |||||||||
| GAAP net loss | (13,935 | ) | (14,422 | ) | (9,167 | ) | ||||||
| Total non-GAAP adjustments before income taxes | 30,126 | 28,661 | 43,742 | |||||||||
| Less: total tax adjustments | 3,040 | (9,443 | ) | 7,476 | ||||||||
| Non-GAAP net income | $ | 13,151 | $ | 23,682 | $ | 27,099 | ||||||
| Shares used in computing non-GAAP basic net income per share | 68,742 | 68,335 | 66,712 | |||||||||
| Shares used in computing non-GAAP diluted net income per share | 70,634 | 70,473 | 69,668 | |||||||||
| Non-GAAP basic net income per share | $ | 0.19 | $ | 0.35 | $ | 0.41 | ||||||
| Non-GAAP diluted net income per share | $ | 0.19 | $ | 0.34 | $ | 0.39 | ||||||
| MAXLINEAR, INC. | ||||||||
| UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS | ||||||||
| (in thousands, except per share data) | ||||||||
| Nine Months Ended | ||||||||
| September 30, 2018 | September 30, 2017 | |||||||
| GAAP gross profit | $ | 162,874 | $ | 155,870 | ||||
| Stock-based compensation | 357 | 231 | ||||||
| Performance based equity | 178 | 104 | ||||||
| Amortization of inventory step-up | — | 15,842 | ||||||
| Amortization of purchased intangible assets | 26,906 | 16,851 | ||||||
| Depreciation of fixed asset step-up | 303 | 225 | ||||||
| Deferred profit eliminated in purchase price accounting | — | 4,682 | ||||||
| Non-GAAP gross profit | 190,618 | 193,805 | ||||||
| GAAP R&D expenses | 90,379 | 82,163 | ||||||
| Stock-based compensation | (13,554 | ) | (11,841 | ) | ||||
| Performance based equity | (3,954 | ) | (2,970 | ) | ||||
| Amortization of purchased intangible assets | — | (289 | ) | |||||
| Depreciation of fixed asset step-up | (974 | ) | (1,321 | ) | ||||
| Non-GAAP R&D expenses | 71,897 | 65,742 | ||||||
| GAAP SG&A expenses | 76,581 | 78,988 | ||||||
| Stock-based compensation | (9,798 | ) | (7,911 | ) | ||||
| Performance based equity | (2,564 | ) | (1,577 | ) | ||||
| Amortization of purchased intangible assets | (23,982 | ) | (20,067 | ) | ||||
| Depreciation of fixed asset step-up | (34 | ) | (86 | ) | ||||
| Acquisition and integration costs | — | (10,008 | ) | |||||
| IP litigation costs, net | (80 | ) | (234 | ) | ||||
| Non-GAAP SG&A expenses | 40,123 | 39,105 | ||||||
| GAAP impairment losses | 2,198 | 2,000 | ||||||
| Impairment losses | (2,198 | ) | (2,000 | ) | ||||
| Non-GAAP impairment losses | — | — | ||||||
| GAAP restructuring expenses | 2,101 | 8,724 | ||||||
| Restructuring charges | (2,101 | ) | (8,724 | ) | ||||
| Non-GAAP restructuring expenses | — | — | ||||||
| GAAP loss from operations | (8,385 | ) | (16,005 | ) | ||||
| Total non-GAAP adjustments | 86,983 | 104,963 | ||||||
| Non-GAAP income from operations | 78,598 | 88,958 | ||||||
| GAAP and non-GAAP interest and other expense, net | (10,814 | ) | (7,504 | ) | ||||
| GAAP loss before income taxes | (19,199 | ) | (23,509 | ) | ||||
| Total non-GAAP adjustments | 86,983 | 104,963 | ||||||
| Non-GAAP income before income taxes | 67,784 | 81,454 | ||||||
| GAAP income tax provision (benefit) | 7,311 | (33,770 | ) | |||||
| Adjustment for non-cash tax benefits/expenses | (2,566 | ) | 40,286 | |||||
| Non-GAAP income tax provision | 4,745 | 6,516 | ||||||
| GAAP net income (loss) | (26,510 | ) | 10,261 | |||||
| Total non-GAAP adjustments before income taxes | 86,983 | 104,963 | ||||||
| Less: total tax adjustments | (2,566 | ) | 40,286 | |||||
| Non-GAAP net income | $ | 63,039 | $ | 74,938 | ||||
| Shares used in computing non-GAAP basic net income per share | 68,256 | 65,950 | ||||||
| Shares used in computing non-GAAP diluted net income per share | 70,521 | 69,491 | ||||||
| Non-GAAP basic net income per share | $ | 0.92 | $ | 1.14 | ||||
| Non-GAAP diluted net income per share | $ | 0.89 | $ | 1.08 | ||||
| MAXLINEAR, INC. | |||||||||
| UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |||||||||
| Three Months Ended | |||||||||
| September 30, 2018 | June 30, 2018 | September 30, 2017 | |||||||
| GAAP gross profit | 51.6 | % | 55.5 | % | 45.6 | % | |||
| Stock-based compensation | 0.2 | % | 0.1 | % | 0.1 | % | |||
| Performance based equity | 0.1 | % | — | % | — | % | |||
| Amortization of inventory step-up | — | % | — | % | 9.0 | % | |||
| Amortization of purchased intangible assets | 10.6 | % | 8.8 | % | 7.0 | % | |||
| Depreciation of fixed asset step-up | 0.1 | % | 0.1 | % | 0.1 | % | |||
| Deferred profit eliminated in purchase price accounting | — | % | — | % | 0.7 | % | |||
| Non-GAAP gross profit | 62.5 | % | 64.6 | % | 62.5 | % | |||
| GAAP R&D expenses | 34.2 | % | 29.8 | % | 25.8 | % | |||
| Stock-based compensation | (5.6 | )% | (4.4 | )% | (3.8 | )% | |||
| Performance based equity | (1.8 | )% | (1.3 | )% | (0.9 | )% | |||
| Amortization of purchased intangible assets | — | % | — | % | (0.1 | )% | |||
| Depreciation of fixed asset step-up | (0.5 | )% | (0.4 | )% | (0.5 | )% | |||
| Non-GAAP R&D expenses | 26.4 | % | 23.8 | % | 20.5 | % | |||
| GAAP SG&A expenses | 29.4 | % | 24.1 | % | 25.6 | % | |||
| Stock-based compensation | (3.6 | )% | (2.7 | )% | (2.6 | )% | |||
| Performance based equity | (0.9 | )% | (0.7 | )% | (0.5 | )% | |||
| Amortization of purchased intangible assets | (9.4 | )% | (7.9 | )% | (8.7 | )% | |||
| Depreciation of fixed asset step-up | — | % | — | % | (0.1 | )% | |||
| Acquisition and integration costs | — | % | — | % | (0.9 | )% | |||
| Restricted merger proceeds and contingent consideration | — | % | — | % | — | % | |||
| Change in fair value of contingent consideration | — | % | — | % | — | % | |||
| Severance charges | — | % | — | % | — | % | |||
| IP litigation costs, net | — | % | — | % | — | % | |||
| Non-GAAP SG&A expenses | 15.4 | % | 12.8 | % | 12.8 | % | |||
| GAAP impairment losses | 2.6 | % | — | % | 1.8 | % | |||
| Impairment losses | (2.6 | )% | — | % | (1.8 | )% | |||
| Non-GAAP impairment losses | — | % | — | % | — | % | |||
| GAAP restructuring expenses | 0.3 | % | 1.8 | % | 1.9 | % | |||
| Restructuring charges | (0.3 | )% | (1.8 | )% | (1.9 | )% | |||
| Non-GAAP restructuring expenses | — | % | — | % | — | % | |||
| GAAP loss from operations | (14.8 | )% | (0.2 | )% | (9.4 | )% | |||
| Total non-GAAP adjustments | 35.4 | % | 28.2 | % | 38.5 | % | |||
| Non-GAAP income from operations | 20.7 | % | 28.0 | % | 29.1 | % | |||
| GAAP and non-GAAP interest and other income (expense), net | (4.0 | )% | (2.9 | )% | (4.2 | )% | |||
| GAAP loss before income taxes | (18.8 | )% | (3.1 | )% | (13.6 | )% | |||
| Total non-GAAP adjustments before income taxes | 35.4 | % | 28.2 | % | 38.5 | % | |||
| Non-GAAP income before income taxes | 16.6 | % | 25.1 | % | 24.9 | % | |||
| GAAP income tax provision (benefit) | (2.4 | )% | 11.1 | % | (5.5 | )% | |||
| Adjustment for non-cash tax benefits/expenses | 3.6 | % | (9.3 | )% | 6.5 | % | |||
| Non-GAAP income tax provision | 1.2 | % | 1.8 | % | 1.1 | % | |||
| GAAP net loss | (16.4 | )% | (14.2 | )% | (8.1 | )% | |||
| Total non-GAAP adjustments before income taxes | 35.4 | % | 28.2 | % | 38.5 | % | |||
| Less: total tax adjustments | 3.6 | % | (9.3 | )% | 6.5 | % | |||
| Non-GAAP net income | 15.5 | % | 23.3 | % | 23.9 | % | |||
| MAXLINEAR, INC. | ||||||
| UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||||
| Nine Months Ended | ||||||
| September 30, 2018 | September 30, 2017 | |||||
| GAAP gross profit | 54.8 | % | 50.8 | % | ||
| Stock-based compensation | 0.1 | % | 0.1 | % | ||
| Performance based equity | 0.1 | % | — | % | ||
| Amortization of inventory step-up | — | % | 5.1 | % | ||
| Amortization of purchased intangible assets | 9.0 | % | 5.5 | % | ||
| Depreciation of fixed asset step-up | 0.1 | % | 0.1 | % | ||
| Deferred profit eliminated in purchase price accounting | — | % | 1.5 | % | ||
| Non-GAAP gross profit | 64.1 | % | 63.2 | % | ||
| GAAP R&D expenses | 30.4 | % | 26.8 | % | ||
| Stock-based compensation | (4.6 | )% | (3.9 | )% | ||
| Performance based equity | (1.3 | )% | (1.0 | )% | ||
| Amortization of purchased intangible assets | — | % | (0.1 | )% | ||
| Depreciation of fixed asset step-up | (0.3 | )% | (0.4 | )% | ||
| Non-GAAP R&D expenses | 24.2 | % | 21.4 | % | ||
| GAAP SG&A expenses | 25.8 | % | 25.8 | % | ||
| Stock-based compensation | (3.3 | )% | (2.6 | )% | ||
| Performance based equity | (0.9 | )% | (0.5 | )% | ||
| Amortization of purchased intangible assets | (8.1 | )% | (6.5 | )% | ||
| Depreciation of fixed asset step-up | — | % | — | % | ||
| Acquisition and integration costs | — | % | (3.3 | )% | ||
| IP litigation costs, net | — | % | (0.1 | )% | ||
| Non-GAAP SG&A expenses | 13.5 | % | 12.8 | % | ||
| GAAP impairment losses | 0.7 | % | 0.7 | % | ||
| Impairment losses | (0.7 | )% | (0.7 | )% | ||
| Non-GAAP impairment losses | — | % | — | % | ||
| GAAP restructuring expenses | 0.7 | % | 2.8 | % | ||
| Restructuring charges | (0.7 | )% | (2.8 | )% | ||
| Non-GAAP restructuring expenses | — | % | — | % | ||
| GAAP loss from operations | (2.8 | )% | (5.2 | )% | ||
| Total non-GAAP adjustments | 29.3 | % | 34.2 | % | ||
| Non-GAAP income from operations | 26.4 | % | 29.0 | % | ||
| GAAP and non-GAAP interest and other income (expense), net | (3.6 | )% | (2.4 | )% | ||
| GAAP loss before income taxes | (6.5 | )% | (7.7 | )% | ||
| Total non-GAAP adjustments before income taxes | 29.3 | % | 34.2 | % | ||
| Non-GAAP income before income taxes | 22.8 | % | 26.6 | % | ||
| GAAP income tax provision (benefit) | 2.5 | % | (11.0 | )% | ||
| Adjustment for non-cash tax benefits/expenses | (0.9 | )% | 13.1 | % | ||
| Non-GAAP income tax provision | 1.6 | % | 2.1 | % | ||
| GAAP net income (loss) | (8.9 | )% | 3.3 | % | ||
| Total non-GAAP adjustments before income taxes | 29.3 | % | 34.2 | % | ||
| Less: total tax adjustments | (0.9 | )% | 13.1 | % | ||
| Non-GAAP net income | 21.2 | % | 24.4 | % | ||
