Q4 2023 MaxLinear Inc Earnings Call

Operator: Greetings, and welcome. This time, all part. A question and answer session will follow. Thank you for watching!

Greetings and welcome to the Max linear fourth quarter and fiscal 2023 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.

Steven Litchfield: Now my pleasure. Thank you, Paul. Good afternoon, everyone, and thank you for joining us today in today's conference call to discuss MaxLinear's fourth quarter 2023 financial results. With me today is Dr. Kishore Seendripu, CEO. After our prepared comments, we will take questions. Our comments today include forward-looking statements within the meaning of applicable security laws, including statements relating to our guidance for the first quarter of 2024, including revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, GAAP and non-GAAP interest and other expense, 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 future financial and operating results, opportunities for revenue and market share across our target markets, the effect of seasonality, expected production ramps and timing for the launches of new products, our design and win pipeline, demand for and adoption of certain technologies, our serviceable available market, expected customer inventory rationalization, expected incentive programs, the effects of cost reduction measures and, These forward-looking statements involve substantial risk and uncertainties, including risk outlined in our risk factor section of our recent SEC filings, including our Form 10-K for the year ended December 31, 2023, which we filed today.

As a reminder, this conference is being recorded it is now my pleasure to introduce your host Steve Litchfield, CFO and Chief Corporate strategy Officer. Thank you Steve you may begin.

Thank you Paul.

Good afternoon, everyone and thank you for joining us today and today's conference call to discuss Max One year's fourth quarter 2023 financial results with me today is Dr. Kishore century CEO.

After our prepared comments, we will take questions.

Our comments today include forward looking statements within the meaning of applicable security laws, including statements relating to our guidance for the quarter of 2024, including revenue GAAP and non-GAAP gross margin GAAP and non-GAAP operating expenses, GAAP and non-GAAP interest and other expense 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 in uncertainties in various products and geographic markets, including without limitation.

Statements concerning future financial and operating results.

<unk> for revenue and market share across our target markets. The effect of seasonality expected production ramps and timing for the launches of new products, our design win pipeline demand for and adoption of certain technologies, our serviceable available market expected customer inventory rationalization expected incentive.

Programs.

That's a cost reduction measures and product announcements. These forward looking statements involve substantial risks and uncertainties, including risks outlined in our risk factors section of our recent SEC filings, including our Form 10-K for year ended December 31, 2023, which we filed today.

Steven Litchfield: Any forward-looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward-looking statements. The fourth quarter 2023 and fiscal 2023 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, operating margin, operating expenses, and interest and other expense on both a GAAP and non-GAAP basis.

Any forward looking statements are made as of today and Max linear has no obligation to update or revise any forward looking statements.

The fourth quarter 2023 in fiscal 2023 earnings release.

Billable in the Investor Relations section of our website at Max linear dotcom.

In addition, we report certain historical financial metrics, including but not limited to gross margin operating margin operating expenses and interest and other expense on both GAAP and non-GAAP basis, we encourage investors to review the detailed reconciliation of our GAAP and non-GAAP presentations in the press release.

Steven Litchfield: 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 uncertainty associated with our ability to project certain future changes, including stock-based compensation and its related terms, effects, as well as potential impairment. 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 a replay will be available on our website for two weeks. And now, I turn the call over to Dr. Kishore Seendripu, CEO of MaxLinear. Thank you, Steve, and good afternoon, everyone.

Available on our website we.

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.

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 replay will be available on our website for two weeks and now let me turn the call over to Dr. Kishore <unk> CEO of Max linear.

Thank you, Steve and good afternoon, everyone in Q4, our revenues to be at $125 $4 million and non-GAAP gross margin was 61, 4% our infrastructure end market continues to be the main highlight growing 30% in fiscal 2023.

Kishore Seendripu: In Q4, our revenues were $125.4 million, and our non-GAAP gross margin was 61.4%. Our infrastructure and market continue to be the main highlights, growing 30% in fiscal 2023. Entering 2024, we are very optimistic about our infrastructure business and believe that it is firmly poised to grow to an annualized revenue run rate of several hundred million dollars over the next three years or so. Underpinning our optimism and growth convictions for our entire business is the successful launch of several new innovative products across infrastructure and connectivity and a robust and growing customer design pipeline for them. We expect these new high-value product cycles to drive revenue growth, encompassing high-speed optical data center interconnect, wireless access, call networks, enterprise storage accelerators, enterprise Ethernet, and multi-gigabit PON broadband access and Wi-Fi connectivity.

Entering 'twenty 'twenty four we are very optimistic about our infrastructure business and believe that it is firmly poised to go to an annualized revenue run rate of several hundred million dollars over the next three years or so.

Underpinning, our optimism and growth convictions, but our entire business is a successful launch of several new innovative products.

Cause infrastructure connectivity, and a robust and growing customer design win pipeline for them.

We expect these new high value product cycles to drive revenue growth encompassing high speed optical data center interconnect.

Wireless access isn't called networks enterprise storage accelerators enterprise Ethernet and multi gigabit born broadband access invite by connectivity.

Kishore Seendripu: In the high-speed optical data center infrastructure market, we are increasingly bullish and expect to generate tens of millions of dollars in revenue this year for our 5-nanometer CMOS Keystone 800-gigabit BAM 4 DSP family. Early stage revenues have already begun, and new production ramps later in the second half of the year will drive more meaningful run rate growth in 2025. The ongoing adoption of AI in the cloud is providing a strong catalyst for the transition to 800 gigabits and beyond speed.

In the high speed optical data center infrastructure market, we are increasingly bullish and expect to generate tens of millions of dollars in revenue this year, but our fine nanometers Cmos Keystone agent at gigabit Pam four DSP family.

Early stage. They then use them already begun and new production ramps lead during the second half of the will drive more meaningful run rate go up in 2025.

The ongoing adoption of AI in the cloud is providing a strong catalyst for the transition to agent of gigabit and beyond speeds.

Kishore Seendripu: In this high barrier to entry market, our investment in innovation over several years has enabled us to differentiate with the highly competitive and broad portfolio of PAM-4 DSPs, which invariably have the best-in-class power consumption and performance across optical transceivers, active optical cables, and active electrical cables. In wireless infrastructure, despite the current slowdown in telco 5G wireless access infrastructure spending, there's an expanding global rollout of new millimeter wave and microwave and hybrid backhaul technologies to upgrade wireless transport links from gigabit speeds to tens of gigabits per second data rates. As the only full system solution provider of modems and RF transceivers, we will greatly benefit from the significantly increased silicon content per platform in these new links. We also expect strong customer demand as part of a multi-year upgrade cycle beginning in 2025. Additionally, at Mobile World Congress in February end, we'll have new and unique product announcements addressing 5G access remote radio units for both massive MIMO and macro base station solutions.

In this high barrier to entry market our investment in innovation over several years has enabled us to differentiate the highly competitive and broad portfolio of Pam four DSP.

Which invariably you have the best in class power consumption and performance across optical transceiver.

Active optical cables and active electrical cables.

In wireless infrastructure, despite current slowdown in telco five G wireless access infrastructure spend.

There is an expanding global rollout of new millimeter and microwave and hybrid backhaul technologies to upgrade wireless transport links from gigabit speeds to tens of Gigabits.

Second data rates as the only full system solution provider up modems and RF Transceivers, we will greatly benefit from the significantly increase silicon content per platform in these new links B all.

We expect strong customer demand as part of a multiyear upgrade cycle entering 2025.

Additionally, at mobile World Congress in February and we land, new and unique product announcements addressing five G accents remote radio units for massive mimo and macro base stations illusions.

Kishore Seendripu: We expect our growing portfolio of wireless backhaul and access infrastructure products to drive significant revenue expansion in the near to long term. Within our infrastructure revenues, an exciting new growth driver is our Panther 3 Series Hardware Storage Accelerators for the Enterprise All-Flash Array and Hybrid Storage Enterprise Appliance Systems. With increasing deployments of higher-speed, low-latency NVMe SSD drives, legacy software-based data compression technology using extremely expensive and power-hungry high-core count CPUs is no longer viable.

We expect our growing portfolio of wireless backhaul and access infrastructure products to drive significant revenue expansion in the near to long term.

Within our infrastructure revenues and exciting new growth driver is our patented three C. V's hard to install these accelerators, but the enterprise all flash array and hybrid storage enterprise applying systems.

With the increasing deployment of higher speed low latency nvme SSD drives legacy software B's data compression technology, using extremely expensive and power hungry high cold, calling Cpus is no longer viable.

Kishore Seendripu: The scalability and flexibility of the Pantheon 3 DPU architecture allows us to deliver 12 is to 1 data reduction, a full suite of security, low power, and capex cost reduction while providing ultra-reliable data protection. We are in production ramp with the Tier 1 Leading Enterprise Storage Appliance vehicle and expect additional customer product ramps later this year. We expect revenues to double in 2024 with continued strong growth in 2025 and beyond. In Ethernet connectivity, with the recent launch of our new Octel 2.5 gigabit Ethernet PHY and switch products, we have expanded our addressable market by $300 million to include both the enterprise and small and medium business switch markets, in addition to our traditional gateway and auto market. Customers are expected to upgrade today's more than 2 billion copper 1 gigabit Ethernet ports to 2.5 gigabit Ethernet speeds over time using existing standard Cat5 cabling.

The scalability and flexibility of the banded three GPU architecture allows us to deliver 12 east one data readout.

Our full suite of security low power and Capex cost reduction will providing ultra reliable data protection.

We are in production with the turbine leading enterprise storage appliance legal and expect additional customer product launch later this year.

We expect revenues to double in 2024 with continued strong growth in 2025 and beyond.

The Ethernet connectivity with the recent launch of our new <unk> 2.5, gigabit Ethernet Phy and switch products, we have expanded our addressable market by $300 million does include both the enterprise and small and medium business, which markets.

In addition to our traditional GP and ultra markets customers are expected to upgrade two days more than 2 billion call. It one gigabit Ethernet boats.

Doing a gigabit Ethernet speeds over time using existing standard can't fight cabling.

Kishore Seendripu: We are seeing exciting design win activity for our solution, including a tier one North American Enterprise OEM customer that is expected to ramp to production in the mid-2024. As we look ahead, we believe our Ethernet business could reach $100 million over the next 18 to 24 months. Turning to broadband, we continue to gain traction in the fiber pawn market with new design wins driving our growth. As many of you know, in 2023, we began ramping our single-chip integrated fiber PON and 10-gigabit processor gateway and connectivity solutions with a major TIABA North American service provider. In 2024, we expect to begin ramping a new opportunity with a second major Tier 1 North American service provider. This further validates and establishes MaxLinear's competitive position in the fiber bond market.

We are seeing exciting design win activity for our solutions.

Or do you have on North American enterprise OEM customer.

Expected to ramp to production in the mid 20 to 30 fold.

And as we look ahead, we believe our Ethernet and this could reach $100 million over the next 18 to 24 months.

Turning to broadband we continue to gain traction in the fiber bond market with new design wins driving our growth.

As many of you know in 'twenty to 'twenty, three we began ramping our single chip integrated fiber pawn and then you'll get.

Gigabit process, again, Q3, and connectivity solutions with a major tier one north American service provider.

In 2024, and we expect to begin ramping a new opportunity with a second major tier one north American service provider.

Further validates and establishes Max <unk> competitive positioning in the fiber bond market.

Kishore Seendripu: In 2023, our pond revenue is expected to be approximately $50 million. We expect to be able to more than double our pond revenues over the next two years. In connectivity, in what is a major milestone, our Wi-Fi 7 solution was both certified and selected by the Wi-Fi Alliance as one of only four certified testbed devices for Wi-Fi 7 interoperability and compliance. Wave 700 single-chip tri-band Wi-Fi 7 device is an industry first and represents a major step forward for power efficiency, performance, and reduced latency.

Do any directly our phone revenue was approximately $50 million, we expect to be able to more than double upon them and use over the next two years.

Connectivity in what is a major milestone our Wifi that inclusion was both certified and selected by device.

Alliance is one of only four certified Testbed devices for 557 in there all the Operability and compliance.

We have 700 single chip Tri band Wifi seven device is an industry first and represents a major step forward for power efficiency performance and reduce latency.

Kishore Seendripu: Even as Wi-Fi 6 and 6C are reaching peak adoption, Wi-Fi 7 is beginning to launch this year in client-side mobile phones and PCs. We expect service providers to follow soon with their initial rollouts later this year, with adoption peaking in two to three years. For MaxLinear, Wi-Fi 7 has the exciting potential to drive significant ASP growth and higher attach rates in our broadband access platforms versus previous generations. Therefore, circumspectly speaking, 2024 is likely to be the start of an exciting period of new product growth and opportunity for MaxLinear. We also expect market headwinds of the past year in broadband connectivity to likely become tailwinds when customer inventory rationalization winds down. Most importantly, the investments we made in product innovations across our portfolio are beginning to bear fruit and are opening up new and significant revenue opportunities that we expect will drive our growth for many years to come. With that, let me now turn the call over to Steve Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer.

Even as Wifi, six and succeed are reaching peak adoption might be.

Beginning to launch this year in client side mobile phones and Pcs.

We expect service providers to follow soon.

Their initial Rollouts later this year with adoption, peaking in two to three years.

<unk> seven is the exciting potential to drive significant E S b growth and higher attach rates in our broadband access platforms, whereas its previous generations.

Circumspectly speaking don't need 24 is likely to be the start of an exciting period of new product growth and opportunity for Max linear.

We do expect market headwinds of the past year in broadband connectivity, you'll likely become tailwind when customer inventory rationalization winds down.

Most importantly, the investments we made in product innovation across our portfolio are beginning to bear fruit and they're also opening up new and significant revenue opportunities.

We expect will drive our growth for many years to come with that let me now turn the call over to Steve Litchfield, Our Chief Financial Officer, and Chief Corporate strategy Officer, Steve. Thank.

Steven Litchfield: Thank you, Kishore. Total revenue for the fourth quarter was $125.4 million, down 8% versus Q3 and down 57% year-over-year. Broadband revenue for the fourth quarter was $34 million, flat versus Q3 and down 66% year-over-year. Connectivity revenue for the fourth quarter was $19 million, up 26% sequentially and down 82% year-over-year. As expected, infrastructure revenue for the fourth quarter was down substantially

Thank you Kishore total.

Total revenue for the fourth quarter was $125 4 million down, 8% versus Q3 and down 57% year over year.

Broadband revenue for the fourth quarter was 34 million flat versus Q3 and down 66% year over year connect.

Connectivity revenue for the fourth quarter was $19 million up 26% sequentially and down 82% year over year.

As expected infrastructure revenue for the fourth quarter was down substantially Rev.

Steven Litchfield: Revenue for the fourth quarter for this in-market was $32 million, down 37% versus the prior quarter and flat year-over-year, but it grew 30% for fiscal year 2023 as a result of solid demand and growing market opportunity. Lastly, our industrial and multi-market revenue was $41 million in Q4, up 13% sequentially and down 25% year over year. Gap and non-gap gross margin for the fourth quarter were approximately 54.7% and 61.4% of revenue. The delta between gap and non-gap gross margin in the fourth quarter was primarily driven by $8.3 million of acquisition-related intangible asset amortization. Fourth quarter GAAP operating expenses were $110.3 million, including stock-based compensation and performance-based equity accruals of $19.5 million combined.

Revenue for the fourth quarter for this end market was 32 million down 37% versus the prior quarter and flat year over year.

It grew 30% for fiscal year 2023, as a result of solid demand and growing market opportunity.

Lastly, our industrial and multi market revenue was $41 million in Q4 up 13% sequentially and down 25% year over year.

GAAP and non-GAAP gross margin for the fourth quarter were approximately 54, 7% and 61, 4% of revenue.

The delta between GAAP and non-GAAP gross margin in the fourth quarter was primarily driven by $8 3 million of acquisition related intangible asset amortization.

Fourth quarter GAAP operating expenses were $110 3 million, including stock based compensation and performance based equity accruals of $19 5 million combined.

Steven Litchfield: Restructuring cost of $10.6 million related to our Q4 workforce reduction and acquisition of integration cost of $1.8 million. Non-GAAP operating expenses in Q4 were $75.7 million, up $0.6 million versus Q3. We expect to see the benefit of our cost reductions starting in Q1 and throughout FY24. Non-GAAP operating margin for Q4 2023 was 1%. Gap interest and other expense during the quarter was $0.9 million. Non-gap interest and other expense during the quarter were $0.8 million.

Restructuring costs of $10 6 million related to our Q4 workforce reduction and acquisition of integration cost of $1 8 million.

non-GAAP operating expenses in Q4 were $75 7 million up <unk> 6 million versus Q3.

We expect to see the benefit of our cost reductions starting in Q1 and throughout FY 'twenty four non-GAAP operating margin for Q4 2023 was 1%.

GAAP interest and other expense during the quarter was <unk> 9 million non-GAAP interest and other expense during the quarter was <unk> 8 million.

Steven Litchfield: In Q4, cash flow used in operating activities was $16.6 million. We exited Q4 of 2023 with approximately $188 million in cash, cash equivalents, and restricted cash. Our day sales outstanding for the fourth quarter was approximately 124 days, up from the previous quarter due to shipment linearity. Our gross inventory turns were 1.4, slightly up from Q3 levels. This concludes the discussion of our Q4 financial results. With that, let's turn to our guidance for Q1 of 2024. We currently expect revenue in the first quarter of 2024 to be between $85 million and $105 million. Looking at Q1 by end market, we expect all four end markets to be down quarter over quarter. We expect first quarter GAAP gross margin to be approximately 50.0 to 54.0%, and non-GAAP gross margin to be in the range of 59.5% and 62.5% of revenue.

In Q4 cash flow used in operating activities was $16 6 million.

<unk> exited Q4 of 2023 with approximately a $188 million in cash cash equivalents and restricted cash.

Our days sales outstanding for the fourth quarter was approximately 124 days up from the previous quarter due to shipment linearity.

Our gross inventory turns were one four slightly up from Q3 levels.

This concludes the discussion of our Q4 financial results.

With that let's turn to our guidance for Q1 of 2024. We currently expect revenue in the first quarter of 2024 to be between $85 million and $105 million.

Looking at Q1 by end market, we expect all four end markets to be down quarter over quarter.

We expect first quarter GAAP gross margin to be approximately 50.0 to 54 zero percent and non-GAAP gross margin to be in the range of 59, 5% and 62, 5% of revenue.

Gross margin continues to be stable, despite lower unit volumes with the range being driven by a combination of near term product customer and end market mix.

Steven Litchfield: Gross margin continues to be stable despite lower unit volumes, with the range being driven by a combination of near-term product, customer, and end-market mix. We expect Q1 2024 GAAP operating expenses to be in the range of $115 million to $125 million. We expect our Q1 2024 non-GAAP operating expenses to be in the range of $72 million to $78 million. We expect our Q1 GAAP and non-GAAP interest and other expense to be in the range of $1 million to $2 million.

We expect Q1 2024, GAAP operating expenses to be in the range of $115 million to $125 million.

We expect Q1 2024, non-GAAP operating expenses to be in the range of 72 million to $78 million.

We expect our Q1, GAAP and non-GAAP interest and other expense to be in the range of 1 million to $2 million.

We expect our Q1, GAAP and non-GAAP diluted share count to be Approx, approximately $82 3 million each.

In closing we are excited about our market position and growth drivers for 2024.

Steven Litchfield: We expect our Q1 gap and non-gap diluted share count to be approximately 82.3 million each. In closing, we are excited about our market position and growth drivers for 2024. The product innovations that will drive our success in optical, Wi-Fi, fiber broadband access gateways, Ethernet, and wireless infrastructure are all in the market today and gaining customer traction. As always, we will continue our strong focus on operational efficiency, fiscal discipline, and shareholder value as we position ourselves for an exciting future. With that, I'd like to open the call for questions. Paul.

The product innovations that will drive our success in optics Cole Wi Fi fiber broadband access gateways Ethernet and wireless infrastructure are all end market today, and gaining customer traction as always we will continue our strong focus on operational efficiency physical discipline and shareholder value.

As we position ourselves for an exciting future.

With that I'd like to open the call for questions Paul.

Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Operator: Thank you. We will now be conducting a question. Like, Comment, Share, and Subscribe! Press 1 on your telephone.

Okay.

Thank you. Our first question is from Tories Feinberg with Stifel. Please proceed with your question.

Steven Litchfield: Press start. Yes, thank you. My question, my first question is: It looks like some of your... especially broadband connectivity has started stabilizing this quarter. But it does sound like you're expecting another step down. So could you just talk a little bit about the dynamics there, because it's counterintuitive that they would stabilize but then take another step down. Sure, Tori, I'll start, and Kishore might want to add a little bit.

Yes. Thank you.

My question My first question is.

So it looks like some of your businesses, especially in our broadband connectivity started stabilizing this quarter.

Does sound like you're expecting another step down so could you just talk a little bit about the dynamics there.

Because its sort of its own kind of intuitive that they would stabilize but then take another step down.

Oh sure Tory I'll start and Kishore might want to add a little bit, but so first of all yeah. So look we've been talking about this I think you know we've seen inventory in the channel improve and so we're seeing some modest improvements we spoke last quarter about some seasonality and just the simple fact.

Steven Litchfield: But, so first of all, yes, look, we've been talking about this. I think, you know, we've seen inventory in the channel improve, and so we're seeing some modest improvements. We spoke last quarter about some seasonality and just the simple fact that there is still inventory in the channel, and it is expected to be for the first half of this year. So we are getting through it.

There is still inventory in the channel and expect it to be for the first half of this year.

So.

So we are getting through it I think the bigger problems is in the broadband and connectivity side.

Steven Litchfield: I think the bigger problem is on the broadband and connectivity side. As we've talked about a little bit, our infrastructure business is going extremely well. We don't have, you know, a big inventory overhang in the channel. Industrial is a little bit mixed.

As we've talked about a little bit or our infrastructure business is going extremely well, we don't have big inventory overhang in the channel industrial is a little bit mixed.

Steven Litchfield: In certain areas where things are going well, I wouldn't say there's a massive amount of inventory, but you're also hearing rumblings of some things slowing down in industrial multi-market, very good. And if we now sort of assume that this is 400 million, so at least, you know, if you take Q1, that's the run rate of the. And I know that you guys segment by four business units or, you know, segments. But if we think about that 400 million, how much of that is kind of cyclical versus secular now? Because you clearly have a lot of secular stuff that's growing.

And there's certain areas, where things are going well I wouldn't say, there's a massive amount of inventory, but you're also hearing rumblings of some things slowing down in.

In industrial Multimarket.

Very good.

If we now sort of assumed that this is a 400 million business at least if you take Q1, that's the run rate of the business and I know that you guys segment by four business units or segments, but if we think about that 400 million.

Much of that is kind of cyclical versus secular now because you clearly have a lot of secular stuff. That's growing you would have some great news assignments in optical and so on and so forth. So just trying to understand you know if you look at that baseline of let's say 100 million a quarter for them their run rate how much of that would be quote unquote cyclical versus more secular I don't know if there's any way you can talk about that.

Steven Litchfield: You have some great new design wins and optical and so on and so forth. So just try to understand, you know, if we look at that baseline, let's say 100 million a quarter, 400 run rate, how much of that would be quote unquote cyclical versus more secular. I don't know if there's any way you can talk about that.

I don't know I don't know that I can break that out.

Honestly Tory I think I would go back to reiterate I mean, we see the problem loans, and then where we've seen the market declines the inventory in the channels around broadband connectivity. These other markets are doing reasonably well.

Steven Litchfield: I don't know that I can break that out, and honestly, Tori, I think I would go back to reiterate. I mean, we see the problems, and where we've seen market declines, the inventory in the channels around broadband and connectivity, these other markets are doing reasonably well. We're managing, you know, I mean, there's a little bit of softness on the industrial side, but I would say, you've seen really good performance on the infrastructure side, and that's where we've got, you know, lots of new products. Kishore spoke quite a bit in his portion about some of the newer products in infrastructure, which are all new product revenues that are in the market, in some cases already have some revenues And so, you know, we certainly expect to come out of this thing stronger, a much better company, and we've got some exciting new products to do that with. It's also true on the broadband connectivity side, right? We talked about our offerings in the new PON product lines and Wi-Fi 7 connectivity.

We're managing you know I mean, there's a little bit of a softness on the industrial side, but I would you know you've seen really good performance on the infrastructure side and that's why we've got.

Lots of new products Kishore spoke quite a bit in his portion of about some of the newer products and infrastructure, which you know are all our new product revenues that are in the market and in some cases already have some revenues and in other cases. There you know design wins that are expected to turn into revenues and so you know, we certainly expect to come out of.

This thing stronger a much better company and we've got some exciting new products to do that with.

It's also true in the broadband and connectivity side right, we talked about our offerings in the new upon product lines and Wi Fi seven connectivity, so what you're seeing right now he's really edit plays on the broadband connectivity that's.

At the bottom are you Don.

It's all noise right now in terms of what's happening on the bookings and the inventory and so on so once we recover we expect that the new product cycles in the new products that were announced and we have launched will actually pick up the growth even in the broadband and connectivity side. So I wouldn't discount that there is a it's a tale of two.

Steven Litchfield: So what you're seeing right now is really at a place on broadband connectivity where, you know, at the bottom, it's all noise right now in terms of what's happening with the bookings and the inventory and so on. So once we recover, we expect that the new product cycles and the new products that we have announced and we have launched will actually pick up growth, even on the broadband and connectivity side. So I wouldn't discount that there is a tale of two cities, broadband and connectivity, and then the other ones that are growing nicely. I think there are growth vectors, even in the broadband connectivity side, as well as all the strong product launches that are happening on the infrastructure side. Sounds good!

Cities broadband connectivity and then the other ones that are growing nicely I think there are growth vectors.

Even in the broadband and connectivity side as well as all the strong product launches that are happening on the infrastructure side.

Sounds good I'll go back in queue. Thank you.

Yep.

Yeah.

Thank you. Our next question is from Quinn Bolton with Needham <unk> Company. Please proceed with your question.

Hey, guys. Thanks for taking my question first first wanted to just ask.

What are you guys hearing kind of from from end customers about the effects of the infrastructure Bill and matching funds you know.

Some of the folks in the broadband space like harmonic and Calix I think I've said, they're expecting a very weak first half of calendar 'twenty four.

As you know a lot of these folks are holding off to try to put.

Steven Litchfield: I'll go back in the queue. Thank you. Yep. Hey guys, thanks for taking my question. The first one is just to ask... What are you guys hearing from end customers about the effects of the infrastructure bill and matching funds? Some of the folks in the broadband space, like Harmonic and Calix, I think, have said they're expecting a very weak first half of calendar 24, as a lot of these folks are holding off to try to put as much of their capex into the back half of the year, maybe even next year, where they get one-for Do you guys have any thoughts on that? Are you seeing it?

Put as much of their capex into the back half of the year, maybe even next year, where they get a one for one matching dollars and so it feels like there's a bit of a <unk>.

Shifting capex spending to future quarters do you guys have any thoughts on that are you seeing it and.

I assume that that that activity is probably exacerbating the inventory burn here in the near term if nobody's spending a lot on the Capex side.

I think the way I would answer the question. So obviously, we're aware of some of the commentary out around some of the infrastructure Bill and.

Projected subsidies, they kind of come along with that.

Steven Litchfield: I assume that that activity is probably exacerbating the inventory burn here in the near term if nobody's spending a lot on the CapEx side. I think the way, Quinn, I would answer the question. So, obviously, we're aware of some of the commentary out around some of the infrastructure bill and the, you know, projected subsidies that kind of come along with that. You know, I think we, like, at the end of the day, we're kind of going through this inventory correction. A lot of that's driven, or is impacted by, nearer term or shorter term demand. That's clearly been, I'd say, slower than expected, and so it's kind of dragging as far as getting through this inventory is concerned.

I think we like at the end of the day, we're kind of going through this inventory correction.

A lot of that's driven.

Is impacted by near term or shorter term demand. That's that's clearly been I'd say slower than expected and so it's kind of dragging as far as getting through this inventory.

Think what's exciting for US is that we continue to see more telcos build out I mean, there they have been aggressive on the capex spending some of the second tier third tier some of those guys are kind of waiting on subsidies and so that you know it indeed may push you know two or three quarters and.

And I don't think that's entirely surprising, but it definitely doesn't help the recovery.

Steven Litchfield: I think what's exciting for us is that we continue to see more telcos build out. I mean, they have been aggressive on CapEx spending. Some of the second tier, third tier, some of those guys are kind of waiting on subsidies, and so that, you know, it may push, you know, two, three quarters, and I don't think that's entirely surprising, but it definitely doesn't help the recovery. The way we look at it is like, you know, what is the order pattern and when it resurrects itself, and how is the inventory burning?

You know the way we look at it is like you know what is the order pattern and then it <unk> itself and how is the inventory burn in the inventory levels are going down we.

We are beginning to see make progress and see some bookings start to increase.

It's actually been positive.

So obviously the bookings are not necessarily do for Q1 or Q2 of these the spread over the entire year because the lead times are now well established so.

I really don't think that we can map directly from the statements that are at some of these.

Our players you mentioned and extrapolate to that our activities I think what changes and what happens in our direction is really about when that inventory really leads and you know the orders return to some normalcy.

Steven Litchfield: The inventory levels are going down. We are beginning to see progress and see some bookings start to increase. That has actually been positive.

Yeah, I mean, I guess if that.

Activity is happening at it obviously makes for an extended bottom, which I think you're going through now, but I would think at some point the snapback be pretty pretty steep if guys are just holding off waiting for matching funds, but I guess, yeah right now I assume lead times are fairly short and you don't have evidence or our strong order activity that would suggest.

Steven Litchfield: Obviously, the bookings are not necessarily due for Q1 or Q2. They spread over the entire year because the lead times are now well established. So I really don't think that we can map directly from the statements at some of these players you mentioned and extrapolate from that our activities.

Steven Litchfield: I think what changes in our direction is really about when that inventory really depletes and you know the orders return to some normalcy. I mean, I guess if that activity is happening, it obviously makes for an extended bottom, which I think you're going through now, but I would think at some point, the snapback would be pretty steep if guys are just holding off, waiting for matching funds. But I guess right now, I assume lead times are fairly short, and you don't have evidence or strong order activity that would suggest you start to see a stronger recovery at some point, whether it's Q2 or Q3. Sounds like visibility in broadband and connectivity is still pretty low.

You start to see it.

A stronger recovery at some point, whether it's Q2 or Q3 sounds like visibility in broadband and connectivity is still pretty low is that right.

But yes, I think the short term visibility is one thing, but really it has to come back strong when the rationalization happens as we mentioned and because there will be nothing in the channels basically that if that's the extremity of the behavior of the vendors, so you're absolutely right and.

I mean that sets up the stage for a nice.

I do it I don't like to talk or do they have a tailwind for 2025. If you will right are we able to get back to being maybe legitimate. We think we are from a from a company perspective.

Steven Litchfield: Yes, I think the short-term visibility is one thing, but really, it has to come back strong when the rationalization happens, as we mentioned. And because there will be nothing in the channel to ship, basically, right, if that's the extremity of the behavior of the vendors. So you're absolutely right. And I mean, that sets up a stage for a nice, I don't like to talk about a tailwind for 2025, if you will, where we get back to being where we legitimately think we are from a company perspective. I got it.

Got it and just wanted to ask on the infrastructure side I know you guys for a quarter or two have been talking about your Ethernet design wins in the enterprise and SMB space, but I think if I heard the prepared script right you're talking about a business that could reach $100 million over the next 18 to 24 months I just wanted to clarify that you see that that level of.

And the Ethernet because that was that certainly if that's right that that was a lot bigger than what I was thinking in terms of your Ethernet opportunity, especially in that kind of timeframe.

Kishore Seendripu: I just wanted to ask on the infrastructure side, I know you guys have been talking about your Ethernet design wins in the enterprise and SMB space for a quarter or two, but I think if I heard the prepared script right, you're talking about a business that could reach $100 million over the next 18 to 24 months. I just wanted to clarify that you see that level of activity in the Ethernet because, certainly, if that's right, it was a lot bigger than what I was thinking in terms of your Ethernet opportunity, especially in that kind of timeframe. Absolutely not. With the products that we are pointing out, the very large ASP devices, they have a unique offering. There's no competing offering in that space, in that class of product.

Absolutely.

You know with the with the products that we're pointing to very large ASB AR devices. They are a unique offering there is no competing offering in that space in that class of product.

We have a good design win pipeline that points to the revenues, reaching in that order and obviously that the revenue includes certain gateway router revenues as well, but a substantial portion is also going to be infrastructure or you know.

Infrastructure, basically enterprise Ethernet and beats.

He is the more exciting part because it provides a nice foundation, but a long term revenue cycle.

Excellent. Thank you very much.

Thanks Quinn.

Thank you. Our next question is from Sujit de Silva with Roth. Please proceed with your question.

Kishore Seendripu: And we have a good design in the pipeline that points to the revenues coming in that order. And, obviously, the revenue includes certain gateway router revenues as well, but a substantial portion is also going to be infrastructure, basically enterprise Ethernet, which is the more exciting part because it provides a nice foundation for the long-term revenue cycle. Thank you very much.

David Your line on mute.

Okay.

Hello, It's David can you hear me.

Yes, Yeah go ahead David.

Sorry, it sounds like all the <unk>.

Alright.

Alright.

No.

So.

Just a couple of quick questions here, but you guys are going to be down 62% year on year at the midpoint of the guidance here how quickly can we expect to see some of these new products and wins really begin to ramp and what do you think that contribution will be for this year from the new product side maybe.

Steven Litchfield: Thank you, Quinn. Thank you. Hello, this is David. Can you hear me?

Operator: Yes. Yeah, go ahead, David. Sorry, someone called Sujeeva.

Operator: All right, David. [inaudible] So... Just a couple of quick questions here, but Steve, you guys are... Well, so yeah, you're right. These are big annual declines, I think, as inventory corrects. And I think this is why, you know, a lot of investors, etc., kind of pointing to 2025. We've talked a lot about 2025. So you can kind of see some, some normalcy in the business, if you will.

Well so yeah, you're right. These are big annual declines I think you know as as inventory corrects and I think that's why you.

You know.

A lot of our investors et cetera, you're kind of pointing to 2025, we've talked a lot about 2025. So you can kind of see some some normalcy in the business. If you will but we've talked a lot about what those growth drivers are I mean, whether they'd be optical our Ethernet business that Kishore just spoke of.

Steven Litchfield: But we've talked a lot about what those growth drivers are. I mean, whether they be optical, our Ethernet business that Kishore just spoke of, our storage accelerators, which we spent a little bit of time talking about, our Wi-Fi business, our PON business, we've been seeing nice growth. We will continue to see growth in all those areas. But naturally, it's not as visible with some of the inventory headwinds that we have

Our storage accelerators, which we spent a little bit of time talking about our Wi Fi business, our PON business, we've been seeing nice growth, we will continue to see growth in all of those areas.

But naturally it it's not as visible with some of the inventory headwinds that we have and so you'll see a lot more of that that'll be delivered in 2025, but a lot of them are in the market and you will see growth I mean optical is a great example, where you will see growth this year.

Steven Litchfield: And so you'll see a lot more of that delivered in 2025. But a lot of them are in the market, and you will see growth. I mean, optical is a great example where you will see growth this year from our optical business, but it'll be much more meaningful in 2025. We kind of look across.

From our optical business and but it'll be much more meaningful in 2020, but.

Okay.

Fair.

And I guess, we kind of look across your <unk> and your direct customers is there any way to size the magnitude of the excesses that are still out there and I know that the burn rate is also challenging but just trying to understand how much is out there and then any way to kind of parse out what the in demand softness relative to what.

Steven Litchfield: I'm just trying to understand how much... Look, I mean, I think we, I think I said a little earlier, but I mean, really, that first half of the year is certainly still, we've got inventory headwinds. Does that bleed into Q3? I don't know.

Tori excesses that needs to be digested there.

Look I mean, I think we I think I said, a little earlier, but I mean really that first half of the year is certainly still we've got inventory headwinds does that bleed into Q3, I don't know, possibly.

Steven Litchfield: Possibly. But I also think that you'll, we'll start to get back to revenue growth as well, even though not, you know, the entirety of this inventory is completely cleaned out of the channel. Thanks so much, guys. Raw, Hi Kishore, hi Steve, can you guys hear me?

But I also think that you'll we'll start to get back to revenue growth as well, even though not the entirety of this inventory is completely cleaned out of the channel.

Thanks, So much guys appreciate it.

Thank you. Our next question is from Sujit de Silva with Roth.

Steven Litchfield: Hey, yeah, hey, how's it going, dude? Oh, great, good. So, sorry about last time. So, I know, Steve, you guided the 1Q to decline sequentially across all the segments. I'm wondering if you could give us kind of a ranking of which ones you might expect to decline more or less. Just a ranking would help us.

Please proceed with your question.

Sure Hi, Steve can you guys hear me.

Hey, Yeah, Hey, Greg.

Great good sell side buy lifetime so.

Steve you guided the <unk> declined sequentially across all the segments I'm wondering if you could give us on which ones you might expect a decline more or less just the ranking would help them.

Steven Litchfield: Yeah, sure. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah, I mean, we're not going to rank them, and all of them are down.

Yeah, I mean, we're not going to rank them and all of them are down I mean, where the.

Kishore Seendripu: I mean, we're the, You know, if I think a little bit of color, I mean, infrastructure, as we've talked about, the wireless infrastructure business was super strong in the first three quarters, and we had talked about kind of a two to three-quarter low there as that ramps back up, and so that's kind of going as planned. The optical business is doing exceptionally well. We're seeing, you know, some accelerated orders there, so that's pretty exciting, but again, that's very back-end loaded. So, first half of the year, we kind of grind higher, and we'll definitely see it pick up quite a bit in Q3 and Q4. You know, the broadband business and connectivity business, for that matter, were down in Q1, and I think they'll still struggle in Q2.

Yeah, I think a little bit of color I mean infrastructure as we've talked about the wireless.

Such a business was super strong kind of the first three quarters and we had talked about.

I have a two to three quarter lull there as.

That ramps back up and so that's kind of going as planned optical business is doing exceptionally well. We're seeing you know some accelerated orders there. So that's pretty exciting but again, that's very backend loaded. So so first half of the year you know, we kind of grind higher and we will definitely see it pick up.

A bit in Q3 and Q4.

You know the broadband business and connectivity business for that matter I mean down in Q1, and then and I think it'll still struggle in Q2, I wont give you a direction, but then we will you know as that inventory clears, we will start to see some improvements industrial multi market held up extremely well, but yeah theres some.

Kishore Seendripu: I won't give you a direction, but as that inventory clears, we'll start to see some improvements. Multimarkets held up extremely well, but there are some cross-currents out there that we definitely expect to see down in Q1, and then hopefully kind of bounce along the bottom as you get through some inventory and grow out of that in the back half of the year. And then my other questions on the channel inventory, just some follow-ups from prior questions. It just sounds like, maybe Kishore, according to your comments, that some of the guys are looking to take inventory below typical levels, maybe kind of lean it out. Is that what you're implying in terms of what the posture is of the channel and the customers right now? Absolutely correct. You know, the bias is toward overcorrection.

Some crosscurrents out there that would definitely expect to see that down in Q1, and and then hopefully kind of bounce along the bottom as you get through some inventory and then and grow out of that and are in the back half of the year.

Okay. Thanks, Steve and then my other question is on the channel inventory just some follow ups before prior questions. It sounds like maybe Kishore court. According to your comments on.

Some of the guys are looking to take inventory below typical levels, maybe kind of kind.

Kind of leaned. It out does that was that what you were implying in terms of what the posture is of the channel and the customers right now just to make sure I heard that clearly.

Absolutely correct. You know are the bias is toward or correction. So the question is how.

How much inventory ease naturally next phase and we've been talking about at the last earnings call I expect you know Oh.

I said that maybe you ended up six months off the glass now if they go the lean a little harder on it then you know in some bleeding happens into Q3 as Steve mentioned, but we have enough growth drivers here, especially the infrastructure optical revenues did not exist.

Kishore Seendripu: So the question is, how much inventory is naturally in excess? And we've been talking about it in the last earnings call. I expect, you know, I said that maybe another six months of it left. Now, if they go, they lean a little harder on it, then, you know, some bleeding happens in Q3, as Steve mentioned.

Practically zero in Q4 and now we have said that we are we should see tens of millions of revenues in our in 2024 that means that we're going to be able to help the growth happening in Q1.

Kishore Seendripu: But we have enough growth drivers here, especially the infrastructure. They were, you know, optical revenues did not exist, practically zero in Q4. And now we have said that we are, we should see tens of millions of revenues in 2024. That means that we have got to have healthy growth happening in Q1. And we expect the momentum to continue. And then we have some other production ramps happening, and that could be a very nice growth driver. So, you know, basically, there's a lot of motion going on.

And we expect that momentum to continue and then we have got some other production ramps happening and that could be a very nice growth driver. So.

You know basically there's a lot of emotion going on but if you look at my prepared remarks, right. The real big growth opportunities already in terms of garlic cycle commencement is already know optical right and then you know we have ones. The telco softening sort of you know recoveries, but still on the backhaul we expect in the lateral.

<unk> revenue to pick up and then we have our soldiers accelerators.

Kishore Seendripu: But if you look at my prepared remarks, the real big growth opportunities are in terms of product cycle commencements, you know, optical. Right? And then, you know, we have one, the telco softening sort of, you know, recovers, but still on the backhaul we expect in the latter half of the year for revenue to pick up. And then we have our storage accelerators. There were barely any last year.

Barely any last year now they're going to be a pretty strong driver and then you have Ethernet connectivity and and some new design in DRAM that will start in the polymer side. So I think I've listed out in the prepared remarks in the sequence will be important I think that should provide you color that's a very healthy product cycle ramp.

You don't come in it's been happening now that should stand good stead for a few years to come.

Kishore Seendripu: Now they're going to be a pretty strong driver. And then you have Ethernet connectivity and some new design and ramps that will start on the pond side. So, I think I've listed them out in the prepared remarks in order of importance. I think that should give you color on the very healthy product cycle ramp, you know, commencement happening now that should stand good stead for a few years to come. Thanks Kishore, a very helpful caller. Do it.

Okay. Thanks, Kishore very helpful color. Thanks, Dave.

Yeah.

Thanks Judy.

Thank you. Our next question is from Christopher Rolland with Susquehanna. Please proceed with your question.

Hey, guys. Thanks for the question.

So.

Your commentary I guess around Pam four.

Ramping in mid 'twenty, four and then more next year.

Can you talk about D S piece versus.

Selling into a CS Transceivers Aoc is.

Just kind of special programs that you talked about.

Kishore Seendripu: Hey guys, thanks for the question. Um, your commentary, I guess, around PAM-4... Ramping in mid-24 and then more next year. Can you talk about DSPs versus, you know, selling into AECs, transceivers, AOCs, these kind of special programs that you talked about? Tell us kind of where these are going. And then, if you could, what is your value proposition?

Tell us kind of you know where where these are are going and then if you could what is your value prop or you guys faster or are you lower power.

Are you competing from a cost dynamic how are you differentiating.

In this market to gain traction thanks.

Thanks, Greg.

Yes, you're absolutely right. The optical it is turning a corner here, but you've got a few other a few more calls that are in the last phases, hopefully we get through that expeditiously, but like you said earlier that this year would be doing the teams do 30 odd million dollars of revenue in the optical will be a very good place.

Kishore Seendripu: Are you guys faster? Are you lower in power? Are you competing from a cost dynamic? How are you differentiated?

Kishore Seendripu: in this market to gain traction. Thanks, Chris. You know, yes, you're absolutely right. The optical is turning a corner here. We got a few other, a few more calls that are in the last phases.

Next year and so we are feeling increasingly bullish like I said that the value proposition is very very clear right. It is we are the only five nanometer production ready agency to gigabit Pam four DSP in the market and even for 400 gigabit a penpal so naturally the advantages and agree with it at lower power.

Kishore Seendripu: Hopefully, we'll get through that expeditiously. But like you said earlier, right, if this year we're doing the teens to 30-odd million dollars in revenue in optical, we'll be in a very good place next year. And so we're feeling increasingly bullish, like I said, that the value proposition is very, very clear, right? It is that we are the only 5-nanometer production-ready 800-gigabit PAM-4 DSP in the market, and even per 400-gigabit PAM-4. So naturally, the advantages that accrue with it are lower power, and cost excellence comes from multiple factors. One is higher levels of integration with integrated laser drivers, and lower power reduces the bill of material cost of the customer's module.

Sure and cost excellence comes from multiple factors, one is higher levels of integration, but integrated laser drivers.

The lower power and uses the bill of material costs and the customers modules.

Honestly performance as a given and that can be drilled off our firepower. So so that that is the only way to enter this market because we have been because of a second generation of investment.

Differentiation is what drives our drives our position vis vis incumbents, who have been shipping for a while in this marketplace.

Kishore Seendripu: Obviously, performance is a given, and that can be a trade-off for power. So that is the only way to enter this market, because these are the second generation of investments, and differentiation is what drives our position vis-a-vis incumbents who have been shipping for a while in this marketplace. So having said that, currently, the revenues we're speaking about are optical transceivers, and that is usually the biggest part of the market. The next part of the market would be active optical cables. And as I've said before, the active electrical cables we expect in three years from now to be about 10% of the market. And whether the active electrical cables are purely 100 gigabit phenomena, or they even move into the 200 gigabit per lambda solutions, that remains to be seen. But as we speak today, the active electrical cable is the smallest piece of the market.

Having said that you know.

Currently the revenues were speaking about optical transceivers and that is easily the biggest part of the market. The next part of the market would be all active optical cables.

As I've said before the active electrical cables, we expect in three years from now do you have about 10% of the market.

And whether the active electrical cables are are purely 100 gigabit phenomenon or they even moves into the 200 gig big gigabit.

Per Lambda solutions that remains to be seen but as we speak today activate I gave you the smallest piece of the market and in three years from now we expect it to be about 8% to 10% of the overall.

For DSP market.

Kishore Seendripu: And in three years from now, we expect it to be about 8% to 10% of the overall M40 SP market. And there's not much differentiation between the various markets as far as DSP is concerned, but there are differentiations with respect to the laser drivers and such other analog components for power efficiency between active optical cables and active electrical cables.

Theres not much differentiation between the various markets as part of the DSP is concerned, but the differentiation with respect to the laser drivers and such other analog components for power efficiency.

Between active optical cables inactive electrical cables I.

I hope that gives you sufficient color.

Yeah.

Perhaps as a second one you probably Max linear probably has the largest peak to trough of all of our covered companies.

Kishore Seendripu: I hope that gives you sufficient color. Yeah, perhaps as a second one. MaxLinear probably has the largest peak to trough of all of our covered companies. Uh, you know, from peak to now trough, I think you've lost two-thirds of that peak revenue. So I'd love to know, just longer term, off of this call at 95 for March, what do you think is a more normalized run rate for you guys, total company over time? And what do you think you're under shipping demand right now, you know, sell-in versus sell-through, you know, including customer inventories? How do you view that? Is it $50 million?

You know you.

From peak to now trough I think you've lost two thirds.

Of that peak revenue, so I'd love to know just longer term off of this call. It 95 for March what do you think is a.

A more normalized run rate.

Were you guys total company over time.

And what do you think you're under shipping demand right now a sell in versus sell through including customer inventories high.

Do you view that is it is it 50 million is it significantly higher than that on a quarterly basis. How do you how do you view that thanks.

Kishore Seendripu: Is it significantly higher than that on a quarterly basis? How do you view that? Chris, let me take up the question, then maybe Steve, you can add more color here. Firstly, I think you're referring to the two-thirds effect from the peak, specifically the broadband business and the connectivity business. All businesses, but you were you were at 280 in June of 22, and you're down to 90.

Chris Let me take that question and then maybe Steve you can add more color here, Firstly, I think you're referring to the two thirds.

In fact from the peak so.

Basically into the broadband business and connectivity business all businesses, but I you were you were at 280 and.

Even a 20 tailwind you're down to 95.

Kishore Seendripu: Yeah, so that is a quarterly-based annualized, right? Obviously, we expect growth to happen in the second half of this year, and this is our expectation to be a transient phenomenon. Number one, just as we are undershipping demand quite severely right now in certain parts of the business, then the flip side is also true that we overship demand during the pandemic period, and that's the reason we are here. So, I think the answer would be somewhere in between, right?

Yeah. So that is on a quarterly basis, our annualized rate, obviously, we expect growth to happen towards the second half of this year.

And and and that this is a disease our expectations to be a transient phenomenon number one.

Just as we had under shipping demand quite extremely right. Now is there any parts of the business is then the flip side is also true that viewership demand during the pandemic period and that's the reason we are here. So I think the answer would be somewhere in between right naturally logically.

Kishore Seendripu: Naturally, logically, assuming the product portfolio has not changed, okay? So, the legacy portfolio, as you saw, maybe in 2023, mid, let's call it, is, I'm just going to do the math here, 1.1 to 700, somewhere in between, right? That's approximately an $800 million business. Now, looking forward.

Assuming the product portfolio has not changed okay. So the legacy portfolio as you saw maybe in 2023 mid let's call it.

Please I'm just going to do the math here 1.12, 700 somewhere in between right. That's approximately at 800 $900 million business now.

Looking forward if you go to all these new product cycle drivers infrastructure being one of the most interesting ones.

Kishore Seendripu: We've got all these new product cycle drivers, infrastructure being one of the most interesting ones, and others, you know, and then recovery in the, and growth in the pond business, which is a very, very small fraction of that particular revenue, looking backwards, we talked about. You should see the company get back to the billion-dollar range in the next two to three years or so, three years or so, which will be true, assuming that we are predicting this inventory or, you know, drag down phenomenon being extreme, as Quinn pointed out, and that there should be a swift recovery once people say, hey, we need to get back to doing business much more in a healthy manner. So, I think that we run businesses on a longer cycle basis.

The other and then recovery in the <unk> and growth in PON business, which is very very small fraction of the of that particular revenues looking backwards, we talked about.

You see the company get back to the $1 billion range in the next two to three years or so three years or so which would be two assuming that we are I think the team is inventory or no drag down phenomenon being extreme as green point, it out and that there should be a swift recovery.

You know once people see that hey, you need to get back to doing business much more in a healthy manner. So so I think that.

We didnt businesses on a longer cycle basis.

Kishore Seendripu: We do care about quarterly cadence and improvement. And in that context of things, we're building a fantastic portfolio here to smooth out the quarterly cycle growth looking forward. Explaining the past, there's only one elephant in the room, and we talk about it a thousand times the last three quarters, which is the inventory hangover. There's no fundamental problem in the product portfolio, nor share losses.

We do care about quarterly cadence and improvement.

And in that context, something we're building a fantastic portfolio here.

The quarterly cycle growth looking forward.

Explaining the past Theres only one elephant in the room and we go about it a thousand times the last three quarters, which is the inventory hangover. There's no fundamental problem in the product portfolio no share losses in fact that adding more robust end.

Kishore Seendripu: In fact, we're adding more robust and market-expansive products to our portfolio. So I think you should be sure that the execution is going very well from a development and product launch perspective. Do you guys hazard a guess on the difference between selling and selling through for Mark?

Market expensive.

<unk> explored portfolio. So I think you should be industry show that the.

Execution is going very well from a development of a product launch perspective.

Do you guys hazard, a guess on how the difference between sell in and sell through.

For March.

Kishore Seendripu: And I won't hazard a guess, but the sell-in phenomenon and the sell-through phenomenon is again an inventory pileup, right? That's a natural sequence, but to the extent that we are tracking the sell-through right now, it's pretty healthy, which only means that we are under shipping demand quite significantly, so the inventory is burning down. Thanks, Kishore.

Yeah, and I wouldn't hazard, a guess, but the sell in phenomenon phenomenon as a gain in inventory pileup right. That's a natural sequence, but to the extent that we are tracking the sell through right now it's pretty healthy the beach only means that we're under shipping demand quite significantly so the inventory is burning down.

Thanks Keefer.

Kishore Seendripu: Yep, thank you Chris. Our next. Good afternoon. Hey, no problem. Can you guys hear me?

Yep. Thank you Chris.

Thank you. Our next question is from Tim <unk> with Northland Capital markets. Please proceed with your question.

Okay.

Okay.

Hey, good afternoon, sorry.

No problem.

Uh huh.

Jeremy.

Operator: Yeah. Okay, great, sorry. Next question on PON.

Yes.

Okay great.

First question on PON I think you meant did you mentioned $50 million in revenue for 'twenty three.

Steven Litchfield: Did you mention $50 million in revenue for 2023? And so I imagine that mix looked a lot different at the beginning of the year than at the end. It looks like that accounts for a quarter of the revenue. You know, would you expect in your Q1, guys? or pond, to be greater than cable, if you will, if we could define it that way for the first time ever?

Yes, yes.

Yes, okay.

And so I imagine that mix looked a lot different at the beginning of year than the end and it looks like you know that accounts for a quarter of the revenue.

Would you expect in your Q1 guide.

For PON to be greater than cable if you will if we can define it that way for the first time ever.

Steven Litchfield: And would you expect that to be the case for the whole of 24? And if so, maybe by what order of magnitude will PON be greater than 50% abroad? Yeah, so, Tim, I mean, we talked about in the prepared remarks about that 50. So we've grown nicely, right? Two years ago, we were doing less than $10 million. So, in two years, we've grown this to $50 million, you know, even in a rough market environment. I acknowledge your point about the timing of it, so certainly the last quarter or so has been tougher, but I guess I would highlight that, you know, we had a big North America telco ramping last year, so that's exciting. You know, more to come.

And would you expect that to be the case for the whole of 2004, and if so maybe by what order of magnitude will be greater than 50% of broadband revenue.

And then I'll follow up.

Yes, so Tim I mean, we've talked about in the prepared remarks about that 50 <unk>. So we've grown nicely right two years ago, we were doing less than $10 million. So.

Two years, we've grown this to $50 million you know even in a a rough market environment I acknowledge your point about the timing of it. So certainly the last quarter. So has been tougher, but I guess I would highlight that you know we've got a big North America telco ramping last year. So that's exciting.

<unk>.

Steven Litchfield: I mean, we're confident that we can double this business over the next two years. But that market also has inventory in the channel, and so we've got to get through some inventory headwinds. A lot of this product is new product as well, so that, you know, will naturally roll out this year and in the back half of this year particularly, and kind of gives us confidence in exiting, call it exiting 25, around that $100 million target that we highlighted. Okay. Seems like it should be more than half in 24.

More to come I mean, we're confident that we can double this business over the next two years.

That market also has inventory in the channel and so we've got to get some through some inventory headwinds a lot of this product is new product.

As well so so that you know, we'll naturally rollout this year and in the back half of this year, particularly and kind of gives us confidence in you know exiting call. It exiting 'twenty five you know.

Uh huh.

Around that $100 million target that we highlighted.

Okay.

Okay.

Okay.

It seems like it should be more than half in 'twenty, four but I'll leave that be.

Steven Litchfield: I'll leave that be. Although we didn't say how much it would be in 24 hours. I realize, I wish you would have.

Sure.

Although we didn't want to say how much you would be in 'twenty four.

I realize you didn't I wish you would have.

Steven Litchfield: Okay. I see your point on Infrastructure. You know, good growth year this year, obviously driven by wire. And you're obviously facing some tough comps from the first half of last year, I think, in microwave.

Oh, Okay I see your point.

On infrastructure.

No good growth year this year, obviously driven by wireless.

And you are obviously facing some tough comps from the first half of last year I think in microwave.

Kishore Seendripu: So I assume you think infrastructure will continue to grow. My question was going to be, well, can growth accelerate? And I think that might be a challenge on a percentage basis coming off 30. But you grew 40 million in absolute dollars. Can you do that again in 24?

So I assume you think infrastructure will continue to grow.

My question was going to be what can growth accelerate and I think that might be a challenge on a percentage basis coming off 30, but you grew $40 million.

Absolute dollars in 'twenty three.

And you do that again in 'twenty four.

It depends a lot on in a whole bunch of wireless hold back in the first half of this year because.

Kishore Seendripu: It depends a lot on, you know, how much wireless holds back in the first half of this year because whatever wireless is giving up, so to speak, in the softness that we are seeing in the telco infrastructure spend, optically will be picking up the slack. Data is king. So I really think it's the mix of factors between optical and wireless being the two big ones, ethernet, and storage accelerators will definitely be new growth drivers. So I'm hopeful. It's positive relative to last year, but it's on what I call a steep edge. So it could really do better, but we expect it to be definitely flat or better compared to 23.

Whatever wireless is giving up so to speak and the softness that we're seeing in the telco infrastructure spend.

The optically it will be picking up the slack the data center business. So I really think it's a mix of factors between optical wireless being the two big ones Ethernet and storage accelerators will definitely be new growth drivers. So I'm hopeful.

It's positive related to last year, but it's on a what I call a steep edge so.

It could really do better.

But we expect definitely flat or better.

Compared to 23.

Steven Litchfield: And the last question for me is... to the extent that that makes infrastructure your largest segment, in 24, likely to be the case. What are the implications there for gross margins, and do you expect some mix-related uplift in margins as well? So, you're absolutely right in identifying that infrastructure has higher gross margins, and so as infrastructure becomes a bigger part of the portfolio and continues to grow, yes, we will see gross margins improve.

Excellent and then last question for me is.

To the extent that that makes infrastructure your largest segment in.

24, which.

Likely to be the case.

What are the implications there for gross margins and do you expect some mix related up uplift in margins as a result of that and that's that's it for me.

So you're absolutely right in identifying that infrastructure has higher gross margins.

And so as infrastructure becomes a bigger part of the portfolio and continues to grow yes, we will see gross margins improve.

Steven Litchfield: I think as I think about gross margin, you know, puts and takes in 2024, I mean, look, we're going to see some challenges in the first half of the year for sure as we kind of work through with the lower revenue numbers. Some modest pricing pressures. I mean, typically, that's not a big portion of our business, but, you know, in these downturns, it can be a little tougher. All that being said, I'm very confident that as infrastructure grows as a percentage of the business, we will certainly see movement back towards that kind of mid-60 point that we've highlighted. Okay, thanks. Thank you. Our next one. Hey, guys. Yeah, thanks. Good afternoon.

I think as I think about gross margin puts and takes in 2024.

I mean look we're going to see some challenges in the first half of the year for sure as we kind of worked through with the lower revenue numbers. Some modest pricing pressures I mean, typically that's not a big portion of our business, but you know in these downturns it can be a little tougher.

All that being said.

Now very confident that as infrastructure grows as a percentage of the business that we will certainly see you know movement back towards that kind of mid 60 point that we've highlighted.

Okay. Thanks.

Thanks.

Thank you. Our next question is from Ananda Baruah with loop capital. Please proceed with your question.

Hey, guys. Yeah. Thanks, good afternoon, thanks for taking the question.

Steven Litchfield: Thanks for taking the questions. Yeah, quick ones, I guess. I guess the first one, Kishore..., as well. Any context you can provide. This is really about the foreign through DNA.

Yes, Jay another quick ones I guess.

Thank you Stuart.

I guess the first one kishore.

<unk>.

Steve as well at any cost thank you.

It is really on the <unk> solution.

Kishore Seendripu: Any context you can provide on where you are with qualifications. And I guess, you know, anything you can provide on how it is you think about qualifications, like I guess really the TAM, you know, your TAM opportunity, the qualified TAM opportunity. You're kind of over the long... in that business, and then I have a quick follow-up also. So you're referring to the optical PAM for data center business.

Any context, you can provide on <unk>.

Where are you on its qualifications and I guess anything you can provide on how it is you think about your <unk>.

<unk> vacation.

Yes, really the Tam Tam.

Tam opportunity qualification Tam opportunity.

You kind of over the long term.

In that business and I have a quick follow up also.

So you have a pretty good the optical Pam four data center business really speaking, we talked about all reports indicate.

Kishore Seendripu: Really speaking, we talked about, all reports indicate that with some level of uncertainty in what this AI phenomenon does in terms of exploding the market to be bigger, they expect in three years from now, the business will be about 40 million units or so of DSP transceivers being sold, which is PAM-4 DSPs. And that's about anywhere between, let's assume, about $1.5 billion of addressable silicon. We plan all our activities around a 20 to 25% market share of the business. But that entire business is composed of two components. One is the legacy, you know, 200 gigabyte, 400 gigabyte, and 800 gigabyte PAM-4 DSPs.

With some level of uncertainty and avoid these all EA phenomenon does in terms of exploring the market to be bigger are they expecting three years from now the business is about 40 million units or so of DSP. He know transceivers being sold.

Which is Pam four DSP and that's about it.

Assume about one $5 billion of invisible Silicon, we plan all of our activities around 20%, 25% market share of the business, but that entire business is composed of two components. One is the legacy 200 gig Pam four DSP as agent <unk> our expectation is.

Kishore Seendripu: Our expectation is 60% of the business, let's call it close to a billion dollars of addressable PAM in three years from now. And we plan that a good victory would be for us to have 20% of the business, 20-25% of the business, in the first phase. So I think from that, you can extrapolate that the design and pipeline should, from a bottom-up basis, should be aligned to the top-line expectations, give or take a year. So you're looking at that, ultimately, how big can our optical business be, and in this current generation of product offering, we expect it to be anywhere between 150 to 300 million dollars in revenue. Right? That's a lot of really good context, Kishore. Yeah, no, that's awesome. I'll do follow-ups on the call back in that regard. Let me just ask real quick, how Linear is... [inaudible] You know, uh..., some evidence of softening.

60% of the business lets group, let's call it.

Close to $1 billion of addressable Sam in a in three years from now.

And we plan that a good victory would be for us to have 20% of the business, 20% to 25% of the business in the first phase. So I think from that you can extrapolate that the design win pipeline should from a bottom of basis should be aligned to the top top line expectations.

Give or take a year, so you'll get that Oh.

Ultimately, how big and our optical business be and are in the in this current generation of product offerings, and we expect it to be anywhere between $150 million to $300 million of revenue.

Okay. That's that's a lot of really good context, Kishore, yes, no that's awesome.

Pat.

Ill do follow ups on the call back in that regard let me just ask real quick how was the linearity through the quarter the December quarter.

And I guess.

And here you gave guidance and is there a meaningful shift in linearity I mean, I guess yeah.

All into the guidance a product of what you saw in this quarter or was there some.

Steven Litchfield: Welcome back. Yeah, Ananda, so I don't think we were surprised by the quarter. We knew that it would be somewhat back-end loaded. We had a fair amount of backlog going into the quarter, and there's certainly some uncertainty around that. But I don't think that it deteriorated, you know, throughout the quarter by any means. It felt kind of as expected.

Some evidence of softening.

Through the end of the December quarter, and that's it for me. Thanks.

Yeah.

Yeah.

So I don't think I don't think we were surprised by the quarter, we knew that it would be somewhat backend loaded we had a fair amount of backlog going into the quarter.

And.

There's certainly.

Some uncertainty around that I don't think that had deteriorated.

Throughout the quarter by any means that it felt kind of as expected clearly Q1 was down probably a little more than where we thought it would be but I also think it's kind of prudent given the.

Steven Litchfield: Clearly, Q1 was down probably a little more than where we thought it would be, but I also think it's kind of prudent given the, you know, kind of the outlook in the industry and how we get through this inventory downturn. So, yeah, I mean, linearity in the quarter was tough. You know, I think the things that we look at, I mean, what are those new demand drivers? What are the bookings looking like? You know, we're seeing some decent improvements there. People are getting through the inventory.

Kind of the outlook in the industry and we get through this inventory downturn. So so so yeah, I mean linearity in the quarter was tough.

You know I think the things that we look to I mean, what are those new.

Demand drivers what are the bookings looking like you know we're seeing some some decent improvements there.

People are getting through the inventory and so those are the encouraging signs that we see and even speaking to the first ever month of the year as we start to see those those signs improve.

Steven Litchfield: And so those are the encouraging signs that we see, and even speaking to the first, whatever, month of the year, as we start to see those signs improve. Awesome, that's it. Sure, sure, no problem. Yeah, thanks, I just had a few sort of housekeeping ones.

Awesome, that's super helpful. Thanks.

Sure sure no problem.

Thank you. Our next question is from Torrey Swanberg with Stifel. Please proceed with your question.

Yes, Thanks, I just had a few sort of housekeeping ones.

Steven Litchfield: So maybe on that last topic in the DSO, obviously very back and low, back and low to quarter, but is that also a function of the really short lead times? And, you know, is there a chance that maybe customers, even now, given the short lead times, that this quarter can have a very similar profile, meaning, you know, they will order a lot at the end of the quarter. I definitely think that's the case.

On that last topic in the DSO, obviously very backend loaded backend loaded quarter, but is that also a function just of the really short lead times and.

Is there a chance that maybe customers even now given the short lead times that this quarter can have a very similar profile, meaning they.

They will order a lot at the end of the quarter.

I definitely think that's the case I mean, this even speaks to <unk> comment about you know how the industry overreact.

Steven Litchfield: I mean, this even speaks to Kishore's comment about, you know, how the industry overreacts. You know, we've seen customers come in with expedites. And so what happens during these times is, you know, in some cases, they've got a lot of inventory out there, but yet they don't have the right inventory. And that's what I think we've seen in a lot of cases across a lot of industries, a lot of customers, and rather than order it ahead of time and properly timed, they're waiting to the end, hoping that they get the product at the last minute

We've seen customers come in with Expedites and so what happens during these times as you know in some cases, they've got a lot of inventory out there, but yet they don't have the right inventory and that's what I think what we've seen in a lot of cases over a lot of industries, a lot of customers and rather than ordered.

Ahead of time and proper lead times, they're waiting to the end, hoping that they get product to the last minute. So I wouldn't be surprised that we.

Steven Litchfield: So I wouldn't be surprised that we continue to see that in the current quarter. And Steven, the OPEX initiatives that you've done don't sound like they will have a big impact in Q1, so should we assume that this will have more of an impact than in Q2 and beyond? So, yeah, as I talked about in the previous call, we did take some actions on the OPEX front. They were fairly meaningful, offsetting the kind of existing spend. We also had a number of NRE dollars that we had that were against R&D expenses, and they will be declining next year, so the actual cut was fairly sizable. But I think that's what you would typically see from MaxLinear during these downturns.

Continue to see that.

In the current quarter.

Very good and Steve on the Opex initiatives that you've done it doesn't sound like there would be a big impact in Q1. So should we assume that this will have more of an impact than in Q2 and beyond.

So yeah, so we did it.

I talked about.

In the previous call. We did take some actions on the Opex front, they were fairly meaningful offsetting kind of existing spend we also had a number of and our $8 that we had that were contra.

R&D expenses and they they will be declining next year. So the actual cut was it was fairly sizable but I think that's what you would typically see for Max linear you know during these downturns, we're definitely dialing back the spend I do expect opex to.

Steven Litchfield: We're definitely dialing back the spend. I do expect OPEX to come down throughout the year. But keep in mind, Q1 also has payroll taxes, bonuses, things like that that get rolled into the first quarter of the year, so it's always a little bit higher.

To come down throughout the year keep in mind Q1 also has payroll taxes bonuses things like that they get rolled into the first quarter of the year. So it's always a little bit higher.

Steven Litchfield: We also have more restructuring costs that are not expected to come out until the end of Q1 or the mid part of Q1, and so, yeah, I certainly see further benefits from actions already taken. Great, and just so I know the sort of the newer product ramps, so. If I sort of caught this correctly, I think you said the PAMF or DSP business could potentially be between mid-teens and $30 million this year. Did I hear that right?

We also have more restructuring cost that will are not expected to come out until the end of Q1 or the mid part of Q1, and so yeah I certainly see further benefits from actions already taken.

Great and just so I know the sort of the newer product ramps. So.

If I caught this correctly I think you said the Pam four DSP business being could potentially be between mid teens and $30 million. This year did I hear that right.

Steven Litchfield: I think that's, we don't have an official guide, that is exactly what Kishore said. I think that's in the ballpark of our expectations. Got it. And Panther 3, I think you expect that business to double. Would Panther 3 be sort of similar numbers like Optical DSP or smaller?

I think that's we don't have an official guide that is exactly what Kishore said I think that's in the ballpark of of our expectations.

Got it and Panthers three I think you expect that business to double.

What.

<unk> sort of similar numbers like optical DSP or smaller.

Steven Litchfield: Uh, in the range. Got it. Perfect. Thank you, guys. Thanks, Troy.

Oh in the range.

Got it perfect. Thank you guys.

Yeah. Thanks Jordan.

Thank you. Our next question is from Richard Shannon with Craig Hallum. Please proceed with your question.

Steven Litchfield: Thank you. Our next speaker, Craig Well, hi guys. Thanks for getting me in here.

Oh, Hey, guys. Thanks for getting me in here. So I'll ask a question on the fiber business you talked about it being in the $50 million last year doubling within a couple of years here and talked about a second can a tier one operator in the U S ramping up here to what degree are the two major North American operators, you talked about kind of driving that business to doubling in a couple of years.

Steven Litchfield: I guess I'll ask a question on the fiber business. You talked about it being, I think, 50 million last year, doubling within a couple of years here. You talked about a second kind of tier one operator in the U.S. ramping up here. To what degree are the two major North American operators you talked about kind of driving that business to double in a couple of years? Is it concentrated or not?

Is it concentrated or not.

So for most of the North American kind of customer base do you expect to spend expand geographically and within that as well.

Steven Litchfield: [inaudible] So we've talked a lot about the North America folks. I mean, they're definitely newer adopters. They're also working on Wi-Fi 7, so even future platforms we're already working on. We do have, certainly, plenty of opportunities in Europe as well, as those guys kind of transition out of DSL into fiber. So we have a number of opportunities there. The other thing is that those one or two customers

So.

So we've talked a lot about the North America folks I mean, they're definitely newer adopters. They're also working on Wi Fi seven so even future platforms. We're already working on would you have certainly plenty of opportunities in Europe as well as those guys kind of transition out of D. S. L into fiber so we have.

A number of opportunities there.

The other.

Those one or two customers aren't the only ones. We also have some tier two guys in North America that are driving revenues and have been driving revenues and I would expect that to continue this year and into 2025.

Steven Litchfield: We also have some tier two guys in North America that are driving revenues and have been driving revenues, and I would expect that to continue this year and into 2025. Okay, fair enough. Now, let's take a look at the topic of DSP here in context.

Okay fair enough I'll follow up on the topic of DSP here in context, and I think it's been asked by a couple of other people here earlier today about the goal of getting to a 20% share in this business over time.

Kishore Seendripu: And I think it's been asked by a couple other people here earlier today about the goal of getting to a 20% share in this business over time. As you've gone through the qualifications, and I think you mentioned some still ongoing here for ramping later this year or next year. Are we on that track? Kishore, what is your kind of expectation of getting to that 20% share goal within a few years? Feeling pretty good about that? Still think there are some things to go?

As you've gone through the qualifications and I think you'd mentioned some still ongoing here.

We're ramping later this year or next year are.

Are we on that track Kishore your kind of your expectation of getting to that 20% share goal with interferes feeling pretty good about that I still think some things to go maybe just kind of comment on how well that's coming into play.

Kishore Seendripu: Maybe just kind of comment on how well that's coming into play. Well, you know, yes, I mean, I mean, we said for the first time, initial early stage remedies have begun now. And, you know, and then, you know, we said there are new ramps in the second half, those are the ones bending the qualls happening. If both were to play out, then the numbers would work out.

Well, yes, I mean.

And we said for the first time initial early stage remedies are bigger now.

And you know and then you know we said that our new ramps in the second half those are the ones spending the calls happening.

If both were to play out then the numbers would work out and those ramps alone should get you into the ballpark ballpark.

Kishore Seendripu: And those ramps alone should get you into the ballpark in the three-year window we talked about. So, and, you know, getting to the 20% has got some noise around it in terms of sometimes it really is the end customer ramp slope rather than whether we get that share or not, our expectation. So if we hit this year's numbers.

The three year window, we talked about.

And.

So getting to that 20% has got some noise around it in terms of sometimes it. It really is the end customer ramp slope, rather than whether we get whether we get that or not is our expectations repeat at this year's numbers.

Kishore Seendripu: In the vicinity of the numbers I spoke about, I think that's a reality that's going to play out. Okay, fair enough. That's all from me, guys. Thank you. Great. Thanks, Richard. There are no further questions.

In the vicinity of the numbers I spoke about I think that's a reality that is going to play out.

Okay Fair enough. That's all from me guys. Thank you.

Great. Thanks, Richard.

Thank you there are no further questions at this time I'd like to hand, the floor back over to Kishore <unk> for any closing comments.

Kishore Seendripu: So, thank you. In closing, I would like to say we're excited about the market position and new product cycle growth drivers that are beginning to happen in 2024, and we expect those launches to continue into 2025. The product innovations that will drive our success in optical, Wi-Fi, fiber, broadband access, gateway, Ethernet, and wireless infrastructure are all in the market today and, you know, and are being fueled by our customer traction and design with momentum. As always, we will continue to focus strongly on our operational efficiency, fiscal discipline, and creating shareholder value as we position ourselves for an exciting future as these products really reach their full potential in the marketplace. With that, I would like to open the call to questions.

So thank you in closing I would like to say, we are excited about our market position and new product cycle growth drivers. They are beginning to happen in 2024.

We expect those those launches to continue into 2025.

The product innovations that will drive our success in optical Wifi fiber broadband access gateway Ethernet Novartis infrastructure.

It all in the market today, and you don't get and are being fueled by our customer traction and design win momentum.

As always we will continue to focus strongly on our operational efficiency fiscal discipline and creating shareholder value.

As we position ourselves for an exciting future as these products products really reach their full potential in the marketplace.

With that I would like to open the call to questions sorry.

Kishore Seendripu: Sorry. This quarter, we'll be participating in the Susquehanna Technology Conference in New York on 29th February, the JMP Technology Conference in San Francisco on March 4th, the Loop Capital Conference in New York on March 12th, and the Roth Capital Growth Conference in Dana Point on March 18th. Thank you all for joining us today, and look forward to speaking with you again soon.

Sorry.

With that.

This quarter it will be participating in the Susquehanna Technology Conference in New York in 2009 February the JMP Technology Conference in San Francisco on March four the loop Capital Conference in New York on March 12, the Roth capital growth Conference in Dana point on March 18.

Thank you all for joining us today and look forward to speaking with you again soon.

This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.