Q1 2021 Maxlinear Inc Earnings Call
Greetings and welcome to the Max linear incorporated first quarter 2021 earnings call.
At this time all participants are in a listen only mode.
A brief question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Brian Nugent.
Thank you Sir you may begin.
Thank you operator, good afternoon, everyone and thank you for joining us on today's conference call to discuss Max from here is first quarter 2021 on interim results.
Today's call is being hosted by Dr. Kishore <unk> CEO.
Steve Litchfield, Chief Financial Officer, and Chief Corporate strategy Officer ex.
For our prepared comments, we will take questions.
Our comments today include forward looking statements within the meaning of applicable securities laws.
Statements relating to our guidance for second quarter 2021 revenue revenue growth expectations on our principal target markets GAAP.
GAAP and non-GAAP gross margin GAAP and non-GAAP operating expense.
Tax expenses and effective tax rate and interest and other expense. In addition, we will make forward looking statements relating to trends opportunities and uncertainties in various product and geographic markets, including without limitation statements concerning opportunities arising from our acquisitions of Intel from gate.
Weighted business end up nano semi.
Growth opportunities for our wireless infrastructure and connectivity markets.
And opportunities for improved revenues across our target markets.
Forward looking statements involve substantial risks and uncertainties, including integration and employee retention risks related to the acquisition as well as risks arising more generally in our business from competition global trade and export restrictions potential supply constraints.
In fact on the COVID-19 pandemic, our dependence on a limited number of customers average selling price trends and risks that our markets and growth opportunities may not develop as we currently expect and that our assumptions concerning these opportunities may prove incorrect.
More information on these and other risks is outlined in the risk factors section of our recent SEC filings, including our form 10-K for the year ended December 31, 2020, and our first quarter 2021 form 10-Q, which was filed today.
Any forward looking statements are made as of today and that goes on here has no obligation to update or revise any forward looking statements. The first quarter 'twenty 'twenty. One earnings release is available on the Investor Relations section of our website and that one of your dot com and <unk>.
We reported certain historical financial metrics, including net revenues gross margins operating expenses income or loss from operations interest and other expense income.
On taxes, net income or loss and net income or loss per share 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 on.
Certainty associated with our ability to project certain future charges, including stock based compensation and its associated tax effects.
Non-GAAP financial measures discussed today do not replace the presentation of accident years GAAP financial results. We are providing this information to enable investors to perform more meaningful comparisons of our operating results.
Manner similar to management's analysis of our business.
Lastly, this call is also being webcast and a replay will be available on our website for two weeks.
And now let me turn the call over to Kishore can recoup all of them accident here. Thank.
Thank you, Brian and good afternoon, everyone. Our Q1 financial results highlight record quarterly revenue of $294 million.
8% sequentially cash flow from operations of $43 million and non-GAAP gross margin of 58, 6%.
Our results and outlook on margin region by the industry line semiconductor manufacturing supply chain constraints, even as we are proactively developing strategies to minimize the impact for our customers.
In Q1 on broadband access revenue stood at 59% interest that you had 14% industrial and multi market, 14% and connectivity at 30% of overall revenues.
Now turning to some of the Q1 business highlights.
On access and market demand remains robust driven by continued strong emphasis on deployment.
Streaming subscribers broadband consumption demand trends and our share gains it goes on target markets.
The best up on broadband access and Wifi as those assets continues to expand customer engagement on next generation broadband access and in home connectivity architectures.
In our connectivity business, which consists of multi gigabit Wifi Ethernet Moca and G HN technologies.
Shipments to contemporary pause, owing primarily to supply constraints.
We expect a strong recovery in Q2 of its all forward products growing quarter over quarter.
We are pleased with our strong design win momentum and product ramp on V 600, along with the adoption of <unk> extended release to Silicon Beach.
We see multiple Tri band Wifi platform ramping in 2022.
Your line is a 2.54 gigahertz five years and six gigahertz spectrum capabilities offer solutions across North America cable service providers.
Our Wifi business is on track to double in 2021, and as the momentum to potentially to double again in 2022.
Additionally, in Q1, our Moca ship from store flagship U S telco customer and to a net.
Our new Canadian telco customer continued to grow.
We also expect our G HN business to post double digit growth in 2020 one.
During Q1, we released the industry's first quad forward, even at five optimized for doorknob gigabit applications.
It builds on our earliest doctors get them on gigabit and whenever you can beat fives and one gigabit switches.
We expect good option on 225 gene based interest somebody do over the next several years driven by new and growing multi gigabit broadband applications, such as 10 gigabit PON.
I'll just viewpoint on motive and Wifi six routers as well as its mark mass market adoption in the enterprise industry laptop markets.
We are positioned extremely well at the front end or the wanted to give me two gigabit Ethernet upgrade cycle.
Moving to wireless infrastructure market, our Q1 revenue rebounded strongly nearly doubling quarter over quarter, owing to a strong recovery in wireless backhaul deployment combined with the anticipated initial production revenue shipments from our <unk> massive mimo RF transceiver Soc.
Our current wireless infrastructure bookings momentum supports continued growth throughout the year.
And five axis and on is our partnership with Facebook on to even start program to develop an integrated <unk>, which incorporates our state of the art <unk> RF transceiver.
It'll be discharged on algorithm and open ran functionality.
In optical data center, we are making progress towards mass production ramp up on 400 G. Pam four DSP.
On a half 2021 along with strong adoption of our 100 Jeep ample offering but do you have on customers.
Additionally, we are on track to sample our industry, leading new Keystone family, you'll find nanometers Cmos.
<unk> 800 gigabit backbone associated products in Q2.
Keystone solidifies, our ability to capitalize on the band for optical interconnect market, which will dominate the cloud and edge data center deployments.
For the next several years.
Our high performance analog business posted strong growth in Q1 across both infrastructure and industrial multi market applications.
Despite a challenging supply chain environment and high performance analog and we believe that our lean channel inventory levels rapidly growing design win funnel and exciting new product developments position us very favorably, but growth in 2020, one and beyond.
We have made significant progress in expanding our portfolio and on our end markets and broadening our penetration and customer traction into exciting growth markets. We believe these expanded value proposition and enhance targeted visible market.
Those high growth broadband connectivity and it was infrastructure.
Both together position us well for strong profitable growth in 2021 and beyond.
Now, let me turn the call over to Mr. Steve Litchfield, Our Chief Financial Officer, and Chief Corporate strategy Officer.
Thanks Kishore.
I will first review our Q1 2021 results and then further discuss our outlook for Q2 2021.
Total revenue for the quarter was $209 4 million up 8% versus Q4.
Infrastructure revenue was increased by 61% compared with Q4 above our expectations and driven by a strong recovery in both our wireless backhaul and high performance analog and markets along with growing <unk> access market contribution abroad.
Our broadband business demonstrated strong growth during the quarter up 10% sequentially and slightly better than our expectations driven by upside in gateway Soc shipments.
Solid demand for our broadband products is being driven by a combination of end market strength and company specific drivers, including silicon content increases and share gains our connectivity business was down 20% sequentially as supply constraints and Wi Fi and Ethernet was only partially offset by growth in <unk>.
H and mocha.
Lastly, our industrial on Multimarket business was down 1% sequentially and in line with expectations as softness in components was largely offset by strength on the HPA demand.
GAAP and non-GAAP gross margin for the first quarter was approximately 53, 4% and 58, 6% of revenue.
Up 10, seven percentage points, and 80 basis points over last quarter respectfully.
The delta between GAAP and non-GAAP gross margin in the first quarter is primarily driven by $10 7 million of acquisition related intangible assets amortization. In addition to <unk> 3 million of stock based compensation and performance based equity.
First quarter, GAAP and operating expenses were a $101 8 million down sequentially and slightly below the low end of our $103 million to 107 million guidance range.
The GAAP operating expenses included stock based compensation and stock based bonus accruals of $19 3 million combined amortization of purchased intangible assets of $6 1 million restructuring charges of $2 2 million in acquisition and integration costs of $1 7 million non.
Non-GAAP operating expenses were $72 6 million down $3 2 million versus Q4 and at the low end of our guidance range of 72 million to $76 million.
Non-GAAP operating margin for Q1, 2021 of 24% was the highest level in the past six quarters.
Moving to the balance sheet and cash flow statement, our cash flow generated from operating activities in the first quarter 2021 was $40 3 million and we ended the period with $149 2 million in cash cash equivalents and restricted cash or loan balance stood at $350 million exiting Q1.
As we made principal payments of $20 million during the quarter and we have subsequently paid down another $15 million.
We remain consistent in our intentions around uses of cash with priorities on debt pay down and strategic acquisition.
We also purchased $2 7 million of stock late in the quarter. After the board approved $100 million buyback program.
Our day sales outstanding for the first quarter was approximately 38 days slightly up from 32 days in the prior quarter due to shipment linearity.
Our inventory turns were $4, one compared to $4 four in Q4.
That leads me to our guidance. We currently expect revenue in the second quarter of 2021 to be approximately 200 million to $210 million down 2% sequentially at the midpoint of the guidance range.
We expect broadband revenue to be down quarter over quarter in semiconductor manufacturing supply chain tightness is expected to constrained shipments.
Flow actual end market demand we expect.
Infrastructure revenue to be up slightly versus Q1 due to modest growth in wireless backhaul and wireless access.
We expect our industrial multi market revenue to be flat to down on a sequential basis.
Lastly, we expect our connectivity to grow double digits quarter over quarter with the rebound being driven by a combination of solid demand and supply improvement.
While the theme of broader supply constraint continues to be prevalent across the entire industry. We continue to aggressively manage these issues in order to support our customers with that said, we have seen limitations dating back to the fourth quarter and believe supply will continue to be an issue through the balance of the calendar year and into the first half of two.
2022.
This uncertainty does impact our visibility with respect to product mix.
We expect second quarter GAAP gross profit margin to be approximately $52 five to 54, 5% and non-GAAP gross profit margin to be between 58% to 60% of revenue with the midpoint up from 40 basis points from Q1.
As a reminder, our gross profit margin percentage forecast could vary plus or minus 2%, depending on the product mix and other factors.
We continue to fund strategic development programs targeted at delivering strong top line growth in 2021 and beyond with particular focus on infrastructure and then connectivity initiatives and our stated goal of increasing the operating leverage in the business.
We expect Q2 2021, GAAP operating expenses to increase approximately $2 7 million quarter on quarter.
To a range of $102 5 million to $106 5 million, primarily driven by increased prototyping expenses and payroll related expenses.
We expect Q2 2021, non-GAAP operating expenses to be up approximately $2 4 million versus Q1 to a range of 73 million to $77 million.
We expect GAAP tax expense to be approximately zero and a non-GAAP tax rate of 6%.
We expect GAAP interest and other expense to be $3 9 million to $4 1 million and non-GAAP interest and other expense to be $3 8 million to $4 million.
In closing, we continue to see sustainable fundamental expansion across all of our addressable markets. This is largely being driven by a combination of company specific catalysts, including new product introductions market share gains and content per platform increases. We believe our end markets are also demonstrating phase.
Verbal growth profiles due to the proliferation of global networking. In addition to the recent trend towards the incremental dependency on reliable and robust connectivity, our infrastructure efforts and Pam four and five continue to foreshadow meaningful growth coming into 2021 and beyond as production platform ramps come on.
Yes.
We're also pleased with both the near term customer traction and development milestones and our Wi Fi business. We remained steadfast in supporting customers through a dynamic market environment, which pairs accelerating demand with tight supply constraints, we remain focused on expanding upon our recent profitability advancements and strong.
Cash flow generation, while continuing to execute on the integration efforts as well as our organic infrastructure developments.
With these profitable growth initiatives. We continue to believe we are uniquely positioned to deliver strong leverage on our business in 2021.
With that I'd like to open up the call for questions operator.
Thank you.
We will now be conducting a question answer session.
If you would like to ask a question. Please press star one on your telephone keypad.
A confirmation tone will indicate that your line is on the question queue.
You May also press star two if you would like to remove your question from the queue.
One moment, please where we now poll for questions.
Our first question comes from tore Svanberg with Stifel. Please proceed with your question.
Yes, Thank you and congratulations on the record results.
First question is on on capacity can you just add a little bit of color on what's going on there and what some of the puts and takes on especially when I think about you.
Your connectivity business being hampered a debt this quarter, but you know relief is coming next quarter, while dwell debt is the other way around so if you could just add a little bit on all the color there that'd be great.
Yeah, George Thanks for joining so yeah look I think supply constraints are definitely across the board in all of our end markets across all of our products.
<unk> are worse than others, I think as I've mentioned before.
I think in the Max linear case in particular, there's probably a little more back end constrained on front end constrained.
As far as the mix bad.
We highlighted yes, we did see connectivity impacted a little bit more.
In Q1, no doubt about that but we're confident that we'll see that pick back up in Q2, So I'm not concerned about the mix quarter to quarter between those particular end markets, but we are working very hard to make improvements.
On the supply chain situations as we've kind of highlighted on Nicole.
Very good on and on your infrastructure business, obviously, you had a tremendous quarter and I was hoping you could just talk a little bit about the geographical contribution to that growth.
I mean, it's just kind of like the new the new run rate.
It can grow from from here on because obviously it.
At a group significantly better than what you had expected.
Yeah, So you're right it did grow quite a bit and we highlighted that we definitely felt backhaul finally recover HPA did extremely well, we're starting to see really nice contribution from wireless access, which we're excited about and anticipating and then looking forward to see you ought to.
<unk> really ramp up in the second half of the year as well.
So yes I do think this is a I don't know if its the new normal but.
On a higher level debt should sustain for for a while we had been kind of pushing that infrastructure business anticipating them getting over 100, and I think you'll see it.
You know really exceed easily exceed that $100 million level.
2021.
Okay, just one last question.
Could you just give us a sense for where you expect inventory days to be longer term for the new business model now you, obviously slightly below 100 days right now, but where are you trying to sort of get the inventories day level too.
Yeah Yeah.
That's a tough question to answer right now Tory I mean, especially given the environment that we're in with the increase.
Business that we have along with the supply constraints and just kind of uncertainty in the in the.
You know kind of global World right now we're trying.
Trying to anticipate that we're more than likely going to have to we want to build up some more inventory, but we're not quite to that stage. So I can't I can't really answer your question quite yet.
Sounds good and congrats again.
Thanks Torry.
Thank you.
Our next question comes from Ananda Baruah with loop capital markets. Please proceed with your question.
Hi, Good afternoon, guys. Thanks for taking the question and congrats on the strong execution.
I guess a couple if I could Kishore you mentioned when you were talking about and see this as actually you I think he gave the broadband guidance, but one of the remarks was.
Supply constraints on broadband demand remains strong and supply, but kishore just a moment ago. I think you also said that that generally across the business and so.
<unk>.
Really can you just clarify is it across the business that that demand is stronger than supply I guess, you said you're supply constrained across the business is it also the case that demand is meaningfully stronger than supply across the business and.
And then with regards to broadband specifically is there any sense of how much revenue youre sort of how much demand you're not able to meet right now they have a quick follow up thanks.
So let me address that question in general at this point right.
We have a very very strong bookings in place and there are several factors that contribute to it obviously.
The supply constraints drives exceptional booking.
Beyond that we have new product cycle product cycles ramping across connectivity and our new product initiatives in infrastructure. So we have a little bit more what I call real demand that is coming aboard with all due to the investments we have made in the past and securing capacity for those is their biggest our biggest goals.
Right now.
And so to that extent, we have a we have constrained across the board all in about that on the broadband side.
Very strong demand.
Seems very self sustaining with sustaining due to I think a secure situation in terms of broadband demand consumption of the subscriber side. So we don't see any let up in the demand and the demand for product or that deployment and carriers and operators. So I would say again, we had a great place great.
Product cycles or building up some momentum here.
Infrastructure is beginning to show good sort of spontaneity.
The growth here and so we are really constrained by supply on on which we can ship.
And we do not believe our issues are related to oil or booking a product.
From customers. It is real demand that we read that debt is mostly non perishable and be able to be able to fulfill.
The supply chain eases up a bit as you bring more capacity on line.
That's fantastic. Thanks, Keisha I appreciate that and then the quick follow up to that as you mentioned in the press release I just wanted to ask you.
I think this is your comment we feel increasingly confident in the company's outlook for the remainder of this year.
Would you mind, I mean would you be able to sort of give us some sense of what that outlook is.
Since you mentioned it in the press release that you feel comfortable with it and that's it from me. Thanks.
Yeah, Thanks on that.
So I'm not sure we only guide one quarter out so we're not going to give any guidance beyond that.
We do see supply constraints, continuing as I mentioned in the prepared remarks in the second half and into the first half of 2022.
I'll reiterate what Kishore said the demand is extremely strong across all of our end markets.
I would say that we've seen a real fundamental shift in the broadband markets in general right. I mean connectivity has been a big player. Because these are new products for us their content increases, which is very meaningful but I think you're also seeing that the operators telecom and.
On cable really.
Starting to invest I think as we look out over the next three to five years youre going to see a substantial increase in the markets there and the amount of spend that these guys intend to make.
That's great John takes need any Scott Gray.
Great. Thanks, Thank you.
Thank you.
Our next question comes from Quinn Bolton with Needham. Please proceed with your question.
Hi, guys. This is michelle on for Glenn Thanks.
Thanks for taking the question and congrats on the solid results.
So just two quick ones from me on.
Can you guys give me.
An update on the next generation <unk> cellular transceiver day by massive mimo.
Cellular transceiver and then on.
The second question just between.
Between the supply constraints on the elevated shipping costs for COVID-19 due to COVID-19 and so on.
We're just wondering how you guys know about that.
From the 60% gross margin at the exit.
Sitting on.
This calendar year do you guys feel comfortable with that I know you don't guide one quarter out with that.
Really that was that a target you guys had mentioned after the day after closing the Intel acquisition.
So Michelle I'll answer.
The first question regarding the <unk> product.
You know we were the industry leaders in terms of launching our <unk> RF transceiver on even in a four by four massive mimo first generation product. We are the only ones to support 400 megahertz of bandwidth.
The throughput.
That spans all the way to six gigahertz.
Not just the lower frequency bands. Obviously, we are now a production ready and we got good garnering design wins for the product.
And obviously our competition either mimicking what we are doing.
So we expect to be.
On gathering some momentum in design wins as we speak obviously the slowdown in and what happened in China has been a setback for us and a whole lot.
Any meaningful design wins.
Various Oems and as as we move forward and look into the next 18 months will.
We'll be tallying up those veins that should convert into shipments on the eight by eight product today most of the shipments that are big and for our products are primarily in the floor by floor product, which we've been non incumbents would that would be but the ones who came from behind to enter this market. So we're very pleased that we were the leaders when we launched <unk>.
Eight.
And our competition is.
<unk> is now playing catch up on.
Honestly there they're as strong as they are income.
<unk> Oliver eventually we will win that's our conviction.
Okay Steve.
Yes, Michelle on the on your supply constraint question I think a tie in back to gross margin I don't think anything's changed as far as our expectation that we hit that 60% point exiting the year.
We definitely you know, we're seeing price increases on a number of.
Places right in and as many of our peers are seeing across the industry. So we're working very hard I mean, a real priority right. Now is just to get supply demand has been extremely strong and we're doing our best to get suppliers as quick as we can.
I wanted to add that makes will have an important contribution in gross margin and so it's going to be a balance between our infrastructure products and non infrastructure products. So we wait to see how that mix plays out but for now we only guiding the next quarter out.
Yes.
Okay. Thanks, guys appreciate it.
Thanks Michelle.
Thank you.
Our next question comes from Sujit de Silva with Roth Capital. Please proceed with your question.
Kishore I, Steve congratulations on the strong quarter.
Perhaps first on the on the infrastructure optical ramp you I wanted to clarify you said 400 gig do you expect the second half of this year, you'll start to see contribution there and I just wanted to get a realistic sense of what kind of linearity initial shipment levels. We can expect out of the gate or whether it takes several quarters to ramp up.
This has been such a tough on clients or so.
On 400 gig on the first ones to enter the market as well and.
Personally I've been surprised on how how the market plays out in terms of our own customers enter the end data center player.
At this point, we feel we're making good progress towards the ramp in the second half.
I still do not have a good sense of Lin.
Linearity or otherwise right and and in this world of trying to secure supply for the new product initiatives.
How would that FX the ordering patterns at the end customer results were not very clear right. Now. So the good news is we are making progress and are feeling increasingly confident of a ramp and is it going to have oh, what I cannot give you more color on the linearity yoga shipments.
Yeah, I can also imagine optical being a cricket supply chain as well so I understand that and then moving over to the broadband business. The Wi Fi can you help us understand if the upgrades Wi Fi 660, dry band sweeps in Max linear where you weren't before or does it is an upgrade of your prior plans.
And if so what's the content increase COVID-19.
Sense of how that those upgrades will help you guys.
All right.
Mix of both going on we have products that are shipping what we called the leave 500. This is a three day just before the six gigahertz band was added to the life I E.
Line, we have the 600 to Tri band solution, but it's called release one it has got it.
And then there's the device Devry <unk> are tumors.
Because the increased data throughput and better utilization of air capacity multi user mimo debt relates to silicon. So all of those are getting designed in our ramping and production viola volume quantity is increasing even if at the older generation products. The good news is also been any market share because we have started initial foray into the fiber plan.
Pumps I hope.
To share a lot of good deals in the near future because fiber is a huge growth opportunity for us in front of us.
And that the full platform ownership.
So I think.
Uh huh.
Here the goal is to get as much supply as possible right. So that we can ship as much wanted has paused on the new platforms.
And and expand our market share because we really are on a great place to do that.
Okay helpful color. Thanks, guys.
Thanks, Susan.
Thank you.
Our next question comes from Alessandra Vecchi with William Blair. Please proceed with your question.
Hey, guys. Congrats on the quarter just a quick question on the operating expenses I feel like I asked you guys. This every quarter, but you've done such a tremendous job whole day knows those costs down I think I remember discussion last quarter about some mass cost coming in Q2 or Q3 is it.
It's sort of the the streamlined opex on the Q2 guidance a function of the math costs hitting in Q3 or is there something else going on there.
Hey, Alex.
Good to chat with you today.
So from an Opex standpoint, so we kind of expected.
Did anticipate this going up there were some payroll increases as well as some mass conditions in Q2, So we do see it going up not quite as much as I think what we had originally expected, but some of those costs I suspect will push into the second half of the year. So I mean net net I think it's a little bit better than.
And you know kind of what we went into the year with but but there were some of those costs that will push out into Q3.
But to answer your question.
No mass costs related to the finance on major product, which we just talked about in mining.
In the call the Keystone product.
As is.
He's part of those increased expenses and some operating they push out into Q3.
Yeah.
All right.
Alex just to further clarify the big the bigger five nanometer stuff will hit next year, though.
And so that's not anticipated in the first half of this year.
Okay.
Okay that helps.
That helps and then just on the broadband side.
Yeah.
Heading into the quarter there was some theres been investor concern right.
And at some point because of the work from home trends.
On the broadband revenue line.
Sort of on trend down or or moderate in the back half of the year.
Obviously, we're seeing a little moderation in Q2 because of the constraints, but I guess, what I'm trying to go with that is it.
The supply below the demand and you have all these drivers.
In terms of increased contacts and the operator is finally, starting to spend a little bit more on opening up the purse strings does that sort of alleviate.
The original worries in Q1 of maybe at a back half tail off or 'twenty 'twenty two channel.
So I think the best way to answer that so first of all I think really I mean, what's happened.
Post COVID-19 I think you've actually you've seen this acceleration of the cycle that we've been through where operators don't spend and we were starting to see the beginning of the cycle, where they would start to spend.
We saw a lot of that increased demand start because of work from home, but I think what you've seen more recently and what you've heard from a lot of our peers are customers operators is that debt.
Debt that you are probably going to see a multi year cycle I think going into this even in the acquisition of Intel we've highlighted numerous times that the broadband business would probably grow in the kind.
On a low single digits I think at this point based on visibility that we have feedback from operators and customers is that that could be up mid to high single digits going forward and then hopefully we will see some additional content increases in share gains on top of that so yeah. I think the world has changed I think.
You know you've heard.
A lot of this commentary about the importance of the operators are placing on the home and wanting to really control and derive services and things like that that they're going to continue to invest further and I think that started to really shift in our own business and so that's really driving that outlook. So yes, we would agree that.
Things if things have changed a little bit demand has definitely picked up.
Quite a bit and really on top of that I think.
As you look out over multiple years youre going to see more of that spending going forward.
Perfect that was incredibly helpful. Thank you.
Thank you.
Thank you.
Our next question comes from Christopher Roland with Susquehanna. Please proceed with your question.
Hey, guys. Thanks for the question I wanted to dig into the supply situation a little bit more here.
You mentioned it was more back end is this the substrate issue that most people are having or is it something else like test or packaging and and and what is the path towards kind of equilibrium look like there and.
Is there any way that us analysts can get a sense of the size of these constraints or how kind of the various pieces are moving are we having revenue pushed from Q1 to Q2 or Q2 to Q3, how should we be thinking about that thanks.
Yes, Chris.
I wish I could tell you.
So we're working very hard I mean, it's it's all of the above I mean, everything is substrate lead frames wire bonder that you've heard from numerous people.
We're seeing a lot of those challenges, we do expect to see them through the rest of this year hopefully they use in each subsequent quarter, but there's no guarantee of that and you.
You know the lead times have stretched tremendously, especially on the substrate side. So so yeah. I mean, we've got some challenges that we got to work through Fortunately, we've got a lot of demand we've got a creative team and we've been working closely with our suppliers and where.
<unk> coordinating with our customers as well trying to do what we can and cooperate with them to kind of maximize the output.
Okay. Thanks, and then maybe we can you just mentioned lead times. So so maybe dig in there a little bit more.
Maybe talk about where they were you know even you know six months or a year ago, where they are now and you know talk about this and maybe in the context of bookings and backlog here.
Have we can have you guys seen considerably more bookings and you're able to bill right now is that backlog building right now.
You know can you give us any sort of visibility into that backlog and what it might look like now and what this means for you know billings for you guys in future quarters.
Yeah, I mean look I think.
So I mean pretty consistent with what we've seen from others I mean, you're seeing lead times, you know quoting lead times, you know up to a year in advance and so 52 weeks, a long time to get product and so we definitely have seen bookings increase quite dramatically.
So our backlogs increased we've heard other peers talk about.
Booking out an entire year I mean, we're definitely seeing that right and so we're very confident we've got great visibility. It's important that customers are kind of getting in line and I think they've been.
Reacting to make sure that they're scheduling out their own needs and so we do have incredible visibility at this point and so that really helps from a planning perspective and gives us a lot more confidence.
Now as we're forecasting the year, albeit somewhat tough in the short term with some of the tighter supply constraints.
Thank you.
Thank you.
Our next question comes from Bill Peterson with Jpmorgan. Please proceed with your question.
Hi, good afternoon, and congrats on the results.
Try to ask sort of supply demand questions, a little bit a little bit differently. I know you only guide one quarter at a time and that's fair, but I guess, we see here how the impact on broadband net adds with the sequential decline even amid strong demand while he didn't connectivity obviously is up.
<unk>.
Is the demand is such that.
Can you drive guest sequential growth into the third and fourth quarter across your businesses as demand is supportive of that and do you expect at this stage its supply could be supportive of growth from the back half across your various segments.
Yeah Bill.
These are all great questions there awful hard to answer when you don't have that visibility, but I mean look.
Right I guess, the best thing that I can say is that I think we we.
So we continue to see very tight constraints in Q2 and Q3.
You know I think we're optimistic things start to improve in Q4.
And into next year, but there's no guarantees on these things and.
So that's my take on the overall supply chain.
I guess I'd add I don't know if this is part of your question or not but on the on the broadband and connectivity side.
Maybe echo what you've heard in our prepared remarks, and what Kishore shared already I do feel confident that we're going to continue to see growth. There I mean as I look into next year, we're continuing to see really nice growth in that business.
Now from a year over year perspective, and so supply chain supply chain constraints are going to push some of that to the back half of the year and into 'twenty, two but I mean, we're seeing very solid demand in 22 already.
Okay. That's really good color, maybe more specifically you know come into their infrastructure and in particular access.
We're hearing more about <unk> coming to you kind of mentioned the Facebook opportunity.
On one hand, it feels like it's still two years away, but I guess, what when do you really expect some of these around developments to start and and how is next on your position you talked about day by eight but obviously, we've seen some announcements from some of your peers that they are working closely with.
Some of the compute companies or.
Other companies that have already sort of started some initial round appointments.
Oh, Oh Bill obviously, we are working with all of those give you on the Facebook even star program, they're all natural allies and partners and co developers on the full solution.
So as being selected at the front end, a transceiver D P or on single chip or macro base station applications.
We are we are a big part of that game plan regarding things pushing out two years on shipment and my gosh I mean, we've been investing for three years now in wireless infrastructure and it seems like a this is a this is the nature of the Beast. So I think that if you're all going to be investing infrastructure and this is moving the optical side as well.
Is that you are in for the long haul we are coming at the time is wonderful it's very high quality products that really are very complementary to our grading drilling skills and so we are in this very old and for the long term. So you know.
While they live in this quarterly World of earnings. This thing on my focus is a long term and I think we should feel really really good because if you combine the analog RF mixed signal capabilities with really high end and the chip on the spear finance technology capabilities.
Hey, I'm on to players that are present today in this ecosystem, maybe there'll be future ones.
I think anybody who can match it is right now.
It's a matter of getting them to the customer and getting the sales to ramp and that's going to take at their pace and that's okay. I've been patient now for 15 years in my life.
Moving to go.
So.
It's good to hear that failure was competitive in this space and we look forward to seeing the progress. Thank you.
Thanks Bill.
Thank you.
Our next question comes from Sam Peterman with Craig Hallum Capital Group. Please proceed with your question.
Hi, guys.
I'm on for from Richard here, Thanks for taking my question.
I wanted to ask about Mimo I'm curious what kind of share you guys think you can get with you also sees from I'm on particularly the eight by eight so youre coming to market.
Towards the leading edge with <unk> name, you know, Texas instruments and 80 is your biggest competitors I'm curious, how you expect share to shake out and.
Nokia ramping there Richard I guess the season 2021 affect that at all thanks.
Oh, you're asking very very hard question, because nobody is shipping eight by eight right now.
We have some design wins being awarded yes.
And Oh.
And you really need to keep in mind that the the Chinese Oems.
Our north part of the configuration right now for the most part for anybody there. They are now reverting to the older platforms and shipments given the the regulatory restrictions trade restriction that debt.
Huawei.
While we had.
That'd be put under.
So now.
You know the dynamic has changed and our behaviour is going be driven by the west on our Oems.
And the Japanese and Korean Oems and there we are really very competitive and actively engage and you know.
No.
I'm on the ones that had been selected on a couple and so I think ultimately this is going to be a two player market.
Non CEVA space and we hope to be one of the two.
And that's what we're focused on closing out on.
Okay, Great. That's helpful. And then just a quick follow up on broadband, especially on Wifi, you you've noted that both content and share of an increasing.
In recent quarters, so I'm curious how you'd characterize the split between content share on driving broadband growth this quarter on.
If you expect one or the other it would be a bigger driver of performance next quarter and I'd be curious to if that answer would be different absent you know the supply constraints, you've you've talked about.
Let's keep it going to be completely out of the out of the discussion here and so that would give you a sense of a flavor right. If you think about you rewind back to claw about two years ago, and if you look at bear the Intel connected home you know business was in terms of the digital inside of their sales.
On the Max view on the front end those platforms at Viper from third players and then you fast forward to now.
Together, we have all the Wi Fi Ethernet do you have the base band at the front end, but more importantly, the asp's are Wifi on three years ago to now have more than doubled or even closer to triple This thing.
In a way of Wi Fi <unk> single biggest ball mill and then on the platform now so it's really an outsized ER component on the platform and you'll continue to be even more so as the opening of the trying to take control of beautiful and provide services in the home and connectivity inside the home so.
I would say that.
He's a doubling of the bomb has happened from a time perspective from three.
A year ago. So yes, we have been repeating I think substantially more on bomb increase as we move forward at the same time in a couple of operators. We are gaining more share. So if you combine the don't you have a multiplicative effect so as Steve said.
We are feeling pretty pretty strong debt. The opening of business is going to be entering a big expense spending cycle investment cycle I'm going to be very strong beneficiaries of that over the next few years to come.
Okay great.
Thanks, guys.
Thanks, Ed.
Thank you.
Our next question comes from Tim Standard show with Northland Capital Markets. Please proceed with your question.
Hi, good afternoon.
On the results.
Did I hopped in a little earlier, because I think you addressed a little bit of this but maybe we can go into it.
And that really concerns.
Growth in sort of the broadband connected home area and you've already said.
You see the prospects for mid to high single digit growth instead of low single digit growth.
I guess I would try and juxtapose that against your biggest competitor, having an event recently and talking about double digit growth potential.
That $3 billion piece of their broadband IC business and I think they are.
Areas in which you do and don't overlap, particularly on the broadband infrastructure.
Structure side, but a lot of overlap in CPE and connectivity.
So.
I'd be interested in your thoughts on the potential for double digit growth growth from that group, although I know I'm getting ahead on myself because you just raised it from low to high singles.
I appreciate it.
Yeah.
I'll jump in first.
Theres no hedging going on here.
Equally in this market, yes, they have some I think youre aware they have some infrastructure business. So we don't have but there was no hedging I think they're very well it could be double digit growth in <unk>.
And the feedback that we're getting the market.
<unk> net we're getting.
On insights that we're seeing from our customers.
It absolutely can be double digit growth.
Great. Thanks, very much and congratulations again.
Thank you.
There are no further questions at this time I would like to turn the call back to management for any closing remarks.
Thank you operator will be participating at the following upcoming conferences during Q2 will.
We'll be at the Needham Technology and media conference on May 18, and the Jpmorgan Global Technology Media and Communications conference on May 24th the Craig Hallum Institutional Investor Conference on June 2nd COVID-19 Annual TMT Conference on June 3rd and then the Stifel Cross sector insight on June eight to June 10th we hope to meet.
Many of you there and we look forward to.
Relating to your flow the progress.
On a on our you know on.
On our outlook. Thank you.
Ladies and gentlemen. This concludes today's web conference you May now disconnect. Your lines at this time. Thank you for your participation and have a great day.