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 30th, 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 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 two weeks.

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 multi-year 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 2 cents.

In addition, with the 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 20% lower consumption in power than competition, Keystone's success serves as the foundation for multi-generational 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 SerDes technology, we have comprehensively expanded our portfolio for optical and electrical scale-up and scale-out connectivity opportunities, including TIAs, drivers, and on-board 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 standalone 200-gigabit per lane TIA platform, not only pairs seamlessly with Rushmore, but it can also be deployed standalone in LPO and NPO implementations that do not require 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 on-board retimer requirements for scale-up in AI systems requiring low-latency, short-reach electrical interconnects within server racks and switches.

Annapurna's on-board 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 plane architectures has completed qualification for a 2027 ramp and beyond. Additionally, we have secured design wins for USB bridge controllers at two major hyperscalers for AI rack management alongside our broader analog and power management portfolio.

These wins broaden our engagement across the 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 RAN 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 two 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 Steve 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 multi-market 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 2 cents per share, marking a return to GAAP profitability.

Non-GAAP EPS was 35 cents 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 day 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 four 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 net interest and other expense to be in the range of approximately $3.8 million to $4.2 million. We expect our Q3 non-GAAP net 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 multi-year 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?

Yes, thank you and 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?

Thank you.

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

Yes. Tore, thank you.

We're obviously very excited about the growing infrastructure business, and especially about our success with our ramps for 400-gig and 800-gig optical PAM4 business. As we entered the year, we were more concentrated 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 to 2027.

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. 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 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. 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. As my follow-up, just thinking about some of the extension of products that you're now sampling, whether it's Washington, Annapurna.

You talked about '27 contribution. I'm just curious, should the ramp be mainly in '28, or could you potentially start to see some ramps with TIAs and retimers already in 2027?

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 in the customer qual phases and designing process.

We expect revenue to start generating in 2027. We expect the ramps at one or two opportunities to start somewhere in the second half of the year, and then layer on top of that through '28 and '29.

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.

Sounds good. I'll go back in line.

Thank you.

Hey, guys, thanks for taking my questions and congrats on strong results and guidance. Maybe if I could 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.

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?

Cody, I can answer that one. Look, I think this probably goes without saying, but kind of across most of our businesses right now, the visibility is very good.

Kind of given some of the tight supply and just the continued increasing demand, visibility's good. It's going out on or about six months anyway.

Naturally, that gives us the confidence to go and raise these numbers.

Thanks for that, Steve. Then just lastly, can you talk about wafer prepayments, maybe the amount that you did in Q2 and any expectation for Q3?

I guess if you can 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. Not a problem at all, Cody.

Maybe just hit the prepayment real quick. Certainly with this increased demand and 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.

That was up a little bit in the quarter. We expect that to continue next quarter as well.

That's all against product that has backlog out a couple of quarters, right? Comfortable with that.

Your question with regard to gross margins, 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 continue to expand over the next year or two 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 costs, 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.

Some cases, you can pass this along to customers. 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. Our forecast 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.

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

Excellent. Thank you, guys.

Thanks, Cody.

Thanks for taking the questions. Maybe on the optical side and 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, as new quals kind of come through, production ramps start, we've 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.

You would expect that there's not a stair step. 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.

Thanks. 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?

Not a whole lot of changes. As 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 spending continued 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.

I would say everything's on track on that front.

Thank you.

Thanks, Joe.

Hi, Kishore. Hi, Steve.

Congratulations on the strong progress here. I know you're growing very strong in optical in '26, but just 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 to perhaps even grow your share, or should we expect that it holds from the success you had in Keystone?

Suji, obviously, the kind of growth we're seeing comes from two factors, right? The market itself is going very, very strongly, and the fact that we have raised our expectations for '26 revenue, which means a higher run rate expectations get towards second half of '26, and 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. It's happening with both ways, right?

One is through the TAM growth, and the other one is through market share growth. 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 acceleration in the ramps that we are seeing.

With regards to Rushmore, obviously, Keystone is a foundational product for MaxLinear. This is the first major one that went through mass rollout from MaxLinear's point of view, even though it represents our third generation of technology.

Rushmore at 1.6-terabit is now sampling, has got performance and power advantages that are very, very substantial. At the same time, it is also got supply chain diversification that is very unique with MaxLinear versus our competition.

If you're rolling 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. I think that the same customers that are using Keystone are eagerly working towards deploying our 1.6-terabit, and obviously the qual 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. Even as Rushmore comes online, Keystone will still be having a lot of growth engine and capacity moving forward.

A layer on. Great, thanks.

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?

No, I think you have to look at that for the first time we are actually positioning and marketing Washington as both a standalone TIA and paired with Rushmore. Obviously, the first success we'll have is as a paired offering with our own SerDes and PAM4 DSP, namely Rushmore.

Having said that, as we go to higher speeds, our deep RF expertise is very, very valuable and differentiated and has got a lot of potential to be used as a standalone product working with other DSPs, and at the same time being designed into LPOs and LRO type of applications. At this stage, I would say preliminarily we expect our first traction to come from our own pairing with our own device.

Okay. Very helpful color, Kishore.

Thanks.

Hey, Steve and Kishore, I'll offer my congratulations as well. Wanted to follow up on Suji's question just on Rushmore.

As you look at the qualification programs you're engaged in now, is that a sort of expanding set or expanded 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? Oh,

wow, very good question. 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. In a sense, 1.6-terabit now has a systematically get designed to each of those customers where we have laid the foundation with Keystone and then developing their modules, qualing them, and then interoping them.

If anything, Keystone has created the footprint for us to roll out 1.6-terabit. 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 ramp would start. We expect this to happen towards the second half of next year, and with some initial revenue ramp starting in 2027.

Got it. 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?

At this point in time, 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, competition uses a lot more external memory than we do.

We actually save our customers a lot more money due to the integrated solution with on-chip memory and incorporated. 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. 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, you get fairly strong visibility based on backlog and bookings.

Understood. Thank you, Kishore.

Yep. Thank you, Quinn.

Hey, good afternoon and congrats as well, especially on the guide. Wow.

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 would be another factor, but I'd love to have you weigh those two in terms of what you're seeing in the step function here these couple of quarters, and follow up from there.

Look,

Tim, yeah, no, I was just going to say, it's hard to break out. I guess from our perspective, what we're confident and I think what we are seeing is more market share gains.

Certainly, the market's growing nicely, but we're seeing our share go up. I think part of the rationale from seeing our guidance go up is that we've been able to take additional market share.

We're seeing that in the short term, and that we think you will also see that throughout next year as newer programs start to ramp.

Got it. 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?

I guess I would just say that the majority of it is coming out of infrastructure. Certainly, 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. 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. Just reflecting the guidance.

That's correct, Tim.

Great. Last question for me, looks like no 10% customers here, and I'd imagine the old broadband guys are kind of falling off the list.

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? Thanks.

That's it for me.

I think we've mentioned this before, Tim. Look, I think we've talked about being in a lot of customers.

Kishore just mentioned that again as well. We've got a number of module guys, a number of data centers that we're supplying product into today.

Over time, yeah, 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'd be surprising at all.

Okay. Thanks very much.

Hi, guys. Congrats on the results.

Apologize if this has been asked, as I joined late. 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 Eastern guys, or is it still incredibly broad-based?

You might have just missed this question, because it was just before you. We continue to see growth.

Kishore mentioned in the prepared remarks that we're seeing growth out of both regions. 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. There's not tons of these customers, I think it will be understandable that you'll see more concentration as we move forward.

Okay. Just to be clear, you don't have one marquee customer pushing.

Is that correct?

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

Perfect. 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?

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.

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? Whether it be on the wafer side or just test, assembly, packaging.

Doing our best to pass some of those costs along, but where you're paying premiums in some cases, meeting customer demands, we're paying a little bit more right now. I certainly think that there's a strong path to see continued growth out of our gross margins.

Thanks, Steve.

Thanks, Chris.

Hey, guys, thanks for taking the question. Really appreciate it.

Same for me, I apologize if this has been asked. I jumped on late as well.

I guess the DSP questions, sort of as you look out the next couple of years, guys, and you think about what the drivers of growth are, in 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.

Thanks.

Kishore, you want to take that?

Yeah. Hey, Ananda.

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 a 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 you go to higher and higher speeds. At the same time, our footprint inside the data center is increasing.

We're 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 on-board retimers, right? 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.

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 TAM, if you will, of the larger footprint. We feel we're really making excellent progress getting these into the pipeline, and then eventually they will result in multi-year revenue growth and expansion for MaxLinear.

That's really helpful, Kishore. Thanks for that.

That's really helpful. I guess a quick follow-up is, and maybe this also was sought to earlier on the call, 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, though the useful context for us to be aware of?

That's it for me. Thanks.

On the DSP business. Thanks.

Look, everything matters, right? We're really building on the successful penetration ramp that is happening on Keystone, and that itself is a self-reinforcing driver and force, actually.

If you really look at the larger picture in the larger landscape today, with a track record of the millions of units of shipments in optical transceiver PAM4 DSPs, there are only three players right now and we are one of them. I think that track record is really, really important.

Then having the next-generation offering with Rushmore and expanding the product portfolio, all of this play a role into how things move on, how we build relationships. You also have to keep in mind that we're now not just talking about electrical and PAM4 optical offerings with TIAs and drivers, active electrical cables, and on-board retimers.

We also have storage accelerators now in our portfolio that will get more and more important as these agentic AI becomes very important and the storage bottlenecks that prevent increasing the number of agents, right? That's very important.

How do you 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.

I think we're also showing other parts of the portfolio, including 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 two big competitors, right, they're very large companies and they have a lot to offer to our end customers as well. 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.

Great. Very helpful context.

Really appreciate it. Thanks, guys.

Thanks, Kishore.

Thanks, Ananda.

Yes, thank you. 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 multi-market business in the second half and next year?

I know you've mentioned it was going to grow sequentially into September. I ask because while this area is improved, you're still halfway from the run rate business you achieved in 2023, and that appears to be margin-accretive for you.

If you could just talk about the drivers of that, that could also drive revenue into 20 the second half into 2027 would be very helpful.

Sure, Karl, I can take that. The industrial business is 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. You're starting to hear more of the industry itself starting to recover, so that's good.

I think we've talked about this a little bit before. Some of the China business, we're actually seeing good pricing improvements in that region, 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 as that's something that can occur in 2027?

You just talk about the growth prospects between fiber and cable within that would be helpful. Thank you.

Good question, Karl. You're right.

We've been talking about this. This is an area that still relatively new.

We're relatively new player, but we've now won the top two guys in North America. The second guy is ramping this year on track as we had talked about.

It's definitely growing nicely, the PON business specifically. I would expect that to continue next year.

As hard to say when the crossover will be. 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.

We're seeing decent growth on both sides, and it's good to see that telcos kind of with some spending there.

Yep. Great, thank you.

Thanks, Karl.

Thank you. Just had a follow-up and I'll ask a question that has not been asked.

Looking at the filing, looks like your purchase obligations went up about $40 million. Then you also have an other obligations line item that I think went up even more than that, $45 million.

Can you just explain a little bit the difference between those two? You talked about obviously the wafer prepays and so on and so forth.

I'm sure there's stuff you've got to do on the back end as well. Any more color on the difference in those two, because obviously that's a pretty important increase in both items.

Yeah. Obviously, the purchase obligations are probably the bigger take away.

We did have some prepayments. With the stock price increase that we saw in the quarter, there was a handful of payroll accruals that had to be done as well, and so that's a portion of it with around stock comp.

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, we're starting to place orders now for Q1. That's the majority of those numbers in those commitments.

Got it. Then last question.

There was a little bit of discussion about the long-term model. You're going to be at 30% operating margin this quarter, or at least close to it.

I know you've been here before. How should we think about that sort of number now sort of being more the baseline going forward, especially in relation to your OpEx guidance?

Look, I don't want to guide beyond the quarter that we're in, but I think you know our long-term goals 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.

Profitability is good. We're seeing good growth next year on the top line, gross margins are favorable.

From an OpEx standpoint, yeah, we'll see some increases in OpEx, definitely supporting the growth in these areas. 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.

Great. Thank you very much.

Thank you. Appreciate it, Tore.

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.