MaxLinear NASDAQ: MXL reported third-quarter 2026 revenue of $218.1 million, up 29% sequentially and 72% from a year earlier, as demand for its optical data-center connectivity products accelerated. The company said infrastructure revenue rose 210% year over year to about $125 million, making the segment larger than its other revenue categories combined.
Chief Executive Officer Kishore Seendripu said the company sees its AI data-center business in the early stages of a multiyear growth cycle, supported by hyperscale spending on higher-speed optical interconnects. MaxLinear raised its 2026 outlook for optical data-center revenue to between $250 million and $270 million.
“Demand for our optical data center connectivity and infrastructure solutions continues to strengthen,” Seendripu said, pointing to adoption of the company’s PAM4 products, broader customer engagements and execution across its infrastructure portfolio.
Quarterly financial results
MaxLinear’s third-quarter GAAP gross margin was 58.7%, while non-GAAP gross margin was 60%. The difference primarily reflected $2.5 million of acquisition-related intangible asset amortization, Chief Financial Officer and Chief Corporate Strategy Officer Steve Litchfield said.
GAAP operating expenses totaled $97.8 million, compared with non-GAAP operating expenses of $66.5 million. The difference was largely attributable to $28.8 million in stock-based compensation and performance-based equity accruals, as well as $2.3 million in acquisition-related and other costs.
- GAAP operating margin was 13.9%, while non-GAAP operating margin was 29.5%.
- GAAP diluted earnings per share were $0.30, and non-GAAP diluted earnings per share were $0.62.
- GAAP interest and other expense was $2.1 million, while non-GAAP interest and other expense was $2 million.
- Cash flow used in operating activities was approximately $13.6 million.
- The company ended the quarter with approximately $109.9 million in cash equivalents and restricted cash.
Litchfield said the company made a substantial wafer prepayment during the quarter to support data-center product demand covered by committed backlog through 2027. Days of inventory declined to 111 from 123 in the prior quarter, while days sales outstanding increased to about 31 days from 28 days.
MaxLinear also amended its credit agreement to increase its revolving credit facility by $70 million, bringing the total available facility to $200 million. Litchfield said the added liquidity provides flexibility to support customer demand and growth opportunities.
Optical roadmap and 2027 outlook
Seendripu said MaxLinear’s Keystone 5-nanometer CMOS 100-gigabit-per-lane PAM4 SerDes products are in high-volume production across multiple hyperscalers and are supporting current 800G optical infrastructure deployments.
The company expects its Rushmore-based 200-gigabit-per-lane PAM4 products for 1.6-terabit architectures to begin generating initial revenue in 2027, with a stronger ramp expected in the second half of the year and into 2028. Seendripu said the company has both DSP and transimpedance amplifier, or TIA, commitments in 1.6T design wins.
During the question-and-answer session, Seendripu said the average selling price for the DSP portion of 1.6T products is “more or less doubling” compared with 800G products. Adding TIAs, which MaxLinear did not previously supply with its 800G offerings, could result in content growth of more than two times as customers migrate to 1.6T, he said.
Litchfield declined to provide 2027 revenue guidance but said MaxLinear expects to outgrow the optical market next year. He said the company is booking optical products through 2027 and into 2028, with lead times for optical products running roughly 26 to 28 weeks. Customers are placing orders further in advance to secure supply, he added.
Management said 800G remains the principal contributor to optical growth in 2026. Litchfield said 1.6T should represent a substantially larger part of the mix in 2028, although 800G could continue contributing through 2029.
Broader AI infrastructure efforts
Beyond optical DSPs, MaxLinear highlighted products targeting electrical interconnects, data-center control-plane connectivity, telemetry and power management. The company expects initial revenue from its Annapurna 1.6T electrical interconnect family and Washington 200-gigabit-per-lane TIA platform in 2027, followed by a stronger volume ramp in 2028.
Seendripu said Washington supports both PAM4 DSP-based optics and linear optical approaches, including linear receive optics, linear pluggable optics, near-packaged optics and co-packaged optics. He said MaxLinear expects an attachment rate of at least 100% for Washington in connection with its relevant products over the next year and a half.
The company also said its XGS-PON design win for hyperscale data-center control-plane connectivity completed qualification and has secured backlog. First deployments are expected to begin in 2027.
MaxLinear’s Panther storage accelerator platform is expected to roughly double revenue in 2026, Seendripu said, with the potential for another meaningful increase in 2027. The company said the platform is intended to increase effective storage utilization and support larger AI inference workloads without additional storage infrastructure spending.
Fourth-quarter guidance
For the fourth quarter, MaxLinear forecast revenue of $240 million to $260 million. The company expects infrastructure revenue to grow strongly on demand for data-center optical interconnects, while broadband and connectivity revenue are expected to decline seasonally and industrial multi-market revenue is expected to increase.
- GAAP gross margin is projected at 58% to 61%.
- Non-GAAP gross margin is projected at 59% to 62%.
- GAAP operating expenses are expected to range from $96 million to $101 million.
- Non-GAAP operating expenses are expected to range from $65 million to $70 million.
- GAAP and non-GAAP interest and other expense are expected to be $3.5 million to $4.3 million.
On broadband, Litchfield acknowledged expected fourth-quarter seasonality but said MaxLinear anticipates growth in 2027, citing telecommunications spending and the company’s market-share gains in passive optical network products. The broadband and connectivity segments both posted sequential revenue growth in the third quarter, driven by fiber PON and Wi-Fi 7 gateway deployments at major North American and European service providers, according to Seendripu.
About MaxLinear (NASDAQ:MXL)
MaxLinear, Inc is a fabless semiconductor company that designs, develops and sells integrated circuits and related solutions for broadband communications, wired and wireless infrastructure, data centers, industrial applications and consumer electronics. Its products are used by equipment manufacturers and service providers to support the transmission, processing and management of voice, video and data.
The company's portfolio includes broadband access system-on-chip products, Ethernet transceivers and controllers, high-speed interconnect and communications devices, radio-frequency and analog products, optical and copper connectivity solutions, and power-management components.
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