Operator: Greetings and welcome to the MaxLinear Q3 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Leslie Green of Investor Relations. Thank you. You may begin.
Leslie Green: Thank you, Shamali. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear's Q3 2026 financial results. Today's call is being hosted by Dr. Kishore Seendripu, CEO, and Steve Litchfield, chief financial officer and chief corporate strategy officer. After our prepared comments, we will take your questions.
Leslie Green: Our comments today include forward-looking statements within the meaning of applicable securities laws, including statements regarding our guidance for Q4 2026, including revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, GAAP and non-GAAP interest and other expense, GAAP and non-GAAP income taxes, and GAAP and non-GAAP diluted share count.
Leslie Green: In addition, we will make forward-looking statements relating to trends, opportunities, execution of our business plan, and potential growth and uncertainties in various product and geographic markets, including, without limitation, statements concerning the future financial and operating results, opportunities for revenue and market share gains across our target markets, new products, including the timing of production and launches of such products, demand for the adoption of certain technologies, and our total addressable market.
Leslie Green: These forward-looking statements involve substantial risks and uncertainties, including risks outlined in the risk factors section of our recent SEC filings, including our most recent annual report on Form 10-K and our Form 10-Q for the quarter ended 30 September 2026, which we filed today. Any forward-looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward-looking statements.
Leslie Green: The Q3 2026 earnings release is available in the investor relations section of our website at maxlinear.com. In addition, we report certain historical financial metrics, including, but not limited to, gross margin, income or loss from operations, operating expenses, interest and other expense, and income tax on both a GAAP and non-GAAP basis. We encourage investors to review the detailed reconciliation of our GAAP and non-GAAP presentations and the press release available on our website.
Leslie Green: 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.
Leslie Green: We are providing this information because management believes it is useful to investors, as it reflects how management measures our business. Lastly, this call is also being webcast, and the replay will be available on our website for two weeks. Now let me turn the call over to Kishore Seendripu, CEO of MaxLinear. Kishore?
Kishore Seendripu: Thank you, Leslie, and good afternoon, everyone. As the ongoing AI infrastructure build-out momentum continues, and as AI data center clusters continue to scale to unprecedented size and bandwidth requirements, we believe MaxLinear is emerging as a key enabler of next-generation connectivity technologies. Demand for our optical data center connectivity and infrastructure solutions continues to strengthen, and we believe MaxLinear is in the early innings of a multi-year AI-driven growth cycle.
Kishore Seendripu: Against this backdrop, our AI data center business continues to outperform our expectations. In Q3, overall revenue grew 72% year-on-year, driven by accelerating adoption of our optical PAM4 products, expanding customer engagements, and strong execution across our infrastructure portfolio. Infrastructure as a category grew 210% year-on-year, and which is now larger than the rest of our revenue categories combined.
Kishore Seendripu: Reflecting this momentum, we are raising our 2026 optical data center revenue outlook to $250 million to $270 million. With strong visibility in bookings extending beyond 2027, we expect another significant step-up in revenue next year. Keystone, our 5nm CMOS 100 Gigabit per lane PAM4 SerDes family, continues to ramp rapidly in high-volume production across multiple hyperscalers. Its industry-leading power efficiency and performance position MaxLinear at the center of today's 800G optical infrastructure deployments.
Kishore Seendripu: Looking ahead, we are seeing accelerating customer activity around Rushmore-based 200 Gigabit per lane PAM4 1.6 Terabit architectures, where qualification programs are advancing toward expected production deployments in 2027. Rushmore is building on Keystone's foundational success and is also expected to become a major multi-year growth driver. Big Sky, our family of next-generation 400 Gigabit per lane 3.2 Terabit optical and electrical PAM4 interconnect technologies, will further catalyze growth as data center network speeds continue to accelerate beyond 200 Gigabit per lane.
Kishore Seendripu: Beyond PAM4 SerDes optics, we continue to broaden our AI infrastructure footprint across optical and electrical interconnects, retimers, control plane connectivity, telemetry, and power management. This strong expansion of content inside the AI data center stack positions MaxLinear to participate across multiple layers of future AI data center architectures. Already, Annapurna, our 1.6 Terabit electrical interconnects product family, addresses 1.6 Terabit active electrical cable and onboard retimer applications for AI scale-up.
Kishore Seendripu: Washington, our 200 Gigabit per lane TIA platform, not only supports PAM4 DSP-based optics but also non-DSP-based linear pluggable optics consisting of LRO, LPO, NPO, and CPO solutions. We expect initial Washington and Annapurna revenues in 2027, followed by a stronger volume ramp in 2028. We are also excited about our AI RackCommander portfolio, consisting of USB, PCIe, UART connectivity bridges used for telemetry, power management, and protection solutions for rack-scale AI infrastructure.
Kishore Seendripu: RackCommander expands our role beyond data movement and into the control plane of the AI data center. Customers require advanced telemetry, monitoring, connectivity, and power control capabilities to maximize performance and efficiency, which is critical for infrastructure management. We believe this represents a significant long-term growth opportunity while expanding our strategic footprint. Additionally, our XGS-PON Hyperscale Data Center design win, which serves as the control plane connectivity network across multiple data centers, has completed qualification.
Kishore Seendripu: Supported by secured backlog, we expect first deployments of this inter-data center control plane solution to start in 2027. Separately, Panther, our storage accelerator platform, continues to gain momentum as customers seek more efficient AI infrastructure. By significantly increasing effective storage utilization and unlocking KV cache capacity for agentic AI applications, Panther enables customers to support larger AI inference workloads without increasing storage infrastructure spending.
Kishore Seendripu: We expect Panther revenue to roughly double this year with potential for another meaningful increase in 2027. While AI data center remains our primary growth driver, we expect edge AI-driven upgrades to also drive growth in 2027 and 2028 for our wireless infrastructure and broadband access and connectivity solutions. These include Sierra single chip 5G RAN remote radio unit solution, our millimeter wave and microwave backhaul RF and modem SoCs, and XGS-PON fiber broadband home gateways.
Kishore Seendripu: Both broadband and connectivity categories delivered sequential revenue growth in Q3, driven by large-scale deployments of fiber PON and Wi-Fi 7 gateways at major Tier 1 service providers in North America and Europe. In closing, accelerating hyperscale deployments, increasing optical connectivity content, new product ramps, and broader participation across the AI infrastructure stack give us confidence that MaxLinear is still in the early stages of a significant growth cycle.
Kishore Seendripu: Our strategy is focused on strengthening our leadership in high-speed data center connectivity, expanding into adjacent infrastructure markets, and increasing our content share and strategic relevance with hyperscale customers. With strong customer momentum, great backlog visibility, and a differentiated technology portfolio, we believe MaxLinear is well positioned to deliver sustained growth and long-term shareholder value. With that, let me turn the call over to Steve Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer. Steve?
Steve Litchfield: Thanks, Kishore. Total revenue for Q3 was $218.1 million, up 29% from $168.8 million in the previous quarter and up 72% from $126.5 million in Q3 2025. Infrastructure revenue for Q3 2026 grew to approximately $125 million. Broadband revenue grew to approximately $53 million. Connectivity revenue was approximately $25 million. Our industrial multi-market revenue was approximately $15 million. GAAP and non-GAAP gross margin for Q3 were 58.7% and 60% of revenue.
Steve Litchfield: The delta between GAAP and non-GAAP gross margin in Q3 was primarily driven by $2.5 million of acquisition-related intangible asset amortization. Q3 GAAP operating expenses were $97.8 million, and non-GAAP operating expenses were $66.5 million. The delta between GAAP and non-GAAP operating expenses were primarily due to stock-based compensation and performance-based equity accruals of $28.8 million combined, and acquisition-related costs and other costs of $2.3 million.
Steve Litchfield: With the strong growth in our business, coupled with continued spending discipline, we have delivered significant improvement in our GAAP and non-GAAP operating margin over the past 12 months. GAAP operating margin for Q3 2026 was 13.9%, and non-GAAP operating margin in Q3 was 29.5% of net revenue. GAAP and non-GAAP interest and other expense during the quarter was $2.1 million and $2 million. GAAP diluted EPS for Q3 2026 was $0.30 per share. Non-GAAP diluted EPS was $0.62 per share. In Q3, net cash flow used in operating activities was approximately $13.6 million.
Steve Litchfield: We exited Q3 2026 with approximately $109.9 million in cash equivalents, and restricted cash. This included a substantial prepayment for wafers supporting rising demand for our data center products, for which we have committed order backlog throughout 2027. Our day sales outstanding in Q3 was approximately 31 days versus 28 days in the previous quarter. Our days of inventory was down in the quarter from 123 days to 111 days.
Steve Litchfield: Finally, today, we announced that we have amended our existing credit agreement to increase the amounts available under the revolving credit facility by $70 million to $200 million. With this facility, our total available liquidity is much improved, giving us additional flexibility to address further customer demand and other growth opportunities. This concludes the discussion for our Q3 financial results. With that, let's turn to our guidance for Q4 2026. We currently expect revenue in Q4 2026 to be between $240 and $260 million.
Steve Litchfield: Looking at Q4 by end market, we expect strong growth in infrastructure driven by data center optical interconnects. We expect broadband and connectivity end markets to be down seasonally, while industrial multi-market end market is expected to be up. We expect Q4 GAAP gross margin to be approximately 58% to 61%, and non-GAAP gross margin to be in the range of 59% and 62% of revenue. We expect Q4 2026 GAAP operating expenses to be in the range of $96 million to $101 million. We expect Q4 2026 non-GAAP operating expenses to be in the range of $65 to $70 million.
Steve Litchfield: We expect both our Q4 GAAP and non-GAAP interest and other expense to be in the range of approximately $3.5 to $4.3 million. We expect a $1.5 million tax benefit on a GAAP basis and non-GAAP tax provision of approximately $1.5 million. We expect our Q4 GAAP and non-GAAP diluted share count to be approximately 99.7 million each.
Steve Litchfield: In summary, our quarterly performance highlights the continued strength of our optical product portfolio and the accelerating momentum across several growth drivers within our infrastructure business. The progress and innovation we have achieved in this area have been transformative, and we believe we remain in the early innings of a multi-year growth cycle, marked by expanding revenue and increasing operating leverage. We are excited about the opportunities ahead and remain confident in our ability to deliver sustainable long-term value for shareholders.
Steve Litchfield: With that, I would like to open up the call for questions. Operator?
Operator: Thank you. We will now be conducting a question and answer session. If you would 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 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from the line of Tore Svanberg with Stifel. Please proceed with your question.
Tore Svanberg: Yes. Thank you. Kishore, Steve, congrats on the strong results. My first question is on the PAM4 DSP side. You upped the number there for calendar 2026. Based on my rough math, I think that is now, it will be running at about $100 million a quarter run rate. As we think about 2027, is $400 million-plus a good number, and how should we think about the mix next year between 800G and 1.6T? Thank you.
Steve Litchfield: Yeah. Hey, Tory. This is Steve. I do not think we are planning to give guidance in the out year today, but certainly I do believe you have seen us with some very strong growth coming from our optical DSP business. I think we are actually doing a really great job on the market share standpoint. I think as you look into 2027, you are starting to see the momentum pick up, and I would expect to see us outgrow the market in 2027.
Tore Svanberg: Very good. Thank you for that. As far as customer diversification, I noticed you did not have any 10% customers this quarter. I had a question specifically on your optical DSP business. How should we think about the composition there by amount of customers, module makers, geography, any color you could share with us on how diversified that business is becoming real time. Thank you.
Kishore Seendripu: Thank you, Tory. I think when you go to the first order of diversification for us, it is really exciting that now we are transitioning from 800G, fully established as a growth vehicle and market share gains. We are in strong qual cycles on 1.6 terabit or Rushmore products, along with not just only in optical products, but we are in a strong qual cycle on electrical products as well at the 1.6 terabit speeds. That is the first layer of diversification that we will. We expect in the near term, Rushmore to start picking up revenue in 2027.
Kishore Seendripu: If you look to 2028 and 2029, it is going to be a massive growth driver for us in addition to Keystone at 800G still growing for us as well. That is the first order of diversification. The second part is that our revenues are quite broad-based. It is across all the major module makers. We have a growing set of module makers who are also engaged in 1.6 terabit beyond our 800G product lines. The same applies on the data centers as well. Our penetration of geographically in Asia and the US is increasingly now big. The momentum on the design-in cycles is starting to shift towards 1.6 terabit.
Kishore Seendripu: I think the US is in a more advanced phase of 1.6 terabit deployments. We naturally expect the US to become an increasingly strong driver or value proposition in the optical module space as well.
Tore Svanberg: Right. I will go back in line. Thank you.
Operator: Thank you. Our next question comes from the line of Ananda Baruah with Loop Capital Markets. Please proceed with your question.
Ananda Baruah: Hey, thanks. Thanks, guys, for taking the question, and congrats on the continued good progress. It is cool to see. I guess two if I could, Kishore, just sort of sticking there on the hyperscaler diversification and maybe just partly clarification as well. You said in the past 1.6T production ships is really a mid-2027 dynamic. How much of the business between now and then in 800G, if any, is from US-based hyperscalers? If just even anecdotal, then I have a quick follow-up. Thanks.
Kishore Seendripu: Alan, we have never broken down that revenue. We never do that. However, it is pretty broad-based. Suffice it to say, as 1.6 terabit revenue start ramping, with initial revenues actually in early 2027 and a stronger ramp in the second half, the US data centers will start becoming very important both on a static snapshot basis and also from a trajectory basis. The US is the one that is going to adopt 1.6 terabit a much earlier cycle than their Chinese counterparts, right?
Kishore Seendripu: I think that what we take extreme satisfaction in and enjoying is that 1.6 terabit traction is quite across the board substantially, and the US data centers are just beginning to start ramping 1.6 terabit outside of an NVIDIA and a Google, in that order, right? Our supply diversity across the various speed nodes, across 800 gig and 1.6 terabit on the supply lines, including the fabrication process, really puts us in a unique position where within our company, we are not competing across product lines for the same technology node. In a sense, we should be able to win this race in terms of becoming a major provider in 1.6T.
Ananda Baruah: That's good context. I appreciate it. That's helpful. The quick follow-up is, you mentioned NPO, CPO. Is there a useful way for us to think about your SerDes participation in NPO, CPO? If even just from a paradigm approach, how involved do you expect to be? In what ways do you expect to be involved? The question's been coming up, and it'll be relevant 12 months from now. Thanks.
Kishore Seendripu: Okay. If you look forward, you see a future where all the alphabet POs will be in coexistence with the PAM4 SerDes-based optical pluggables, right? We have seen that the shoreline density and power consumption scenarios will drive a certain volume of the speed connections to the optical-based, what I call incarnations, right? Be it an NPO or an LRO. If you look at the LRO, our DSP naturally lends itself into a full-blown participation. We believe that in the US, LRO is a real option at the 200 gig per lane. I believe it'll be a major option in the 400 gig per lane as well.
Kishore Seendripu: That's my particular view. If you look at CPO, it has gotten delayed because the challenge of the optics in a hybridized co-package configuration is a very huge problem. Therefore, I think NPO supplants what we were thinking about as CPO. NPO, the advantages of maintenance, modularity, diversity of suppliers for the product, as against being locked to the ASIC players on the switch side or the GPU side. I think it's a natural place where the ecosystem goes. So I think NPO will be big.
Kishore Seendripu: How big, I cannot speak, but I would say on a snapshot basis in 2030, you should expect 60% to 70% pluggable, 20% NPO, and 10% all various forms of it. That's my personal view, not a market view. But I think we'll be a major player in NPO and LROs, which will be the natural ideally suited for low power applications versus an LPO in the future as the speeds increase. Okay.
Ananda Baruah: That's great context. Thank you.
Kishore Seendripu: Yep.
Operator: Thank you. Our next question comes from the line of Cody Acree with StoneX Financial. You may proceed with your question.
Cody Acree: Hey, guys. Congrats on the progress. It has been a great performance. Kishore, maybe can you talk about your visibility into 2027? If you are not going to talk yet about the scale of your optical ramp, can you maybe just talk about your bookings or your lead time visibility for the next few quarters?
Kishore Seendripu: Steve, you want to take a shot at it?
Steve Litchfield: Sure. Yeah, Cody. Look, we have great visibility, as I am sure you have heard from others in the industry. We are booking products throughout 2027 into 2028. Lead times for optical product are 26 to 28 weeks, but customers are certainly coming in and placing orders out much further than that, just given they want a secure supply. You have seen a lot of our upsides that we have delivered. I think you will continue to see more of that growth in 2027.
Cody Acree: Steve, maybe just continue with you. Can you just bridge your next gross margin thoughts between mix, pricing, manufacturing costs, and product transition over the next couple quarters?
Steve Litchfield: Yeah, sure. Gross margin, as you know, we have been making some nice progress, moved up from 58%. We delivered on 60% this quarter. Our guidance is at 60.5%. I think we are really seeing some nice progress despite some of the cost increases that we are seeing across our entire ecosystem here, I guess. Some of that we have been able to pass along to the customer, and I think our cost structure is actually just very good. As the mix continues toward more infrastructure products, I think you will see our gross margin continue to trend up.
Cody Acree: Excellent. Thank you, guys. Congrats.
Steve Litchfield: Thanks, Cody.
Operator: Thank you. Our next question comes from the line of Christopher Rolland with Susquehanna. Please proceed with your question.
Christopher Rolland: Hey, guys. Thank you for the question. Regarding DSP, last cycle, maybe the 400, 800 cycle, DSP was much more widely available. Transceivers had shorter lead times, and people could wait for land, power, shell to be built before making what was kind of a last-minute order on optical. Do you guys view that as different now with longer lead times, and does this perhaps create an effect where people are ordering ahead more significantly, perhaps even over-ordering? They can't get their AI data center up without these transceivers.
Christopher Rolland: Does this become perhaps the golden screw that people are willing to purchase more of than they might need just for the initial deployment?
Kishore Seendripu: Chris, I don't think so at all. Not at all, actually. You have to keep this in mind that even in the supply chain, nobody's signing real long-term agreements. You have strict discipline on lead time. There's a lot of manufacturing shortage. It is really naturally organizing the entire supply chain into very disciplined on a, "You'll only get what you need now," sort of behavior. I don't think there's any double ordering. Then you get back to our DSP world. We are the only pure play DSP provider on the optical pluggable. Wafer capacities are allocated by companies, by the major foundry.
Kishore Seendripu: If you are in five nanometer, for example, you're welcome to choose how you distribute your silicon between switch pluggables, GPUs, TPUs, and so on, so forth, right? Every company gets to prioritize what is in their best value interest. I would say that that is not the case at all, number one. Number two is that even to place over-ordering, the data center guys are very disciplined about creating pure supply chains. What I mean by that is the optics, the DSP for a particular qualification in a data center is very unique so that they don't cross-corrupt the supply chain. I think it's golden. It's not a screw, but it's a bolt.
Kishore Seendripu: There is a bolt there that is really fastening the cantilever bridge quite well here. That's for those in the San Francisco Bay Area. Yeah, it's looking pretty good.
Christopher Rolland: Excellent. Maybe a follow-up there, and a second question. I guess, first of all, obviously you guys have some unique 4 nanometer DSP capacity that others don't. Can you talk about how you see constraints in the optical market playing out? Is it DSP? Is it other parts, lasers, et cetera? If you could talk about your place there. Secondly, DSP in the world of CPO. Some believe it's less meaningful. Would like your take, Kishore, as a technologist.
Kishore Seendripu: Okay. Chris, there's a lot of questions out there that you posed here to me. I will take the first one, which is basically related to supply. I think the optic supply is easing. We are really constrained by foundries on the DSP supply, and the data center build-out is really accelerating. You can sit here and talk, if the demand. People talked about TAM units for optical pluggables, no matter what flavors, is in the order of 120 million units. Now they talk about 27, 28, maybe 200 million units. So I'm not keeping count anymore, right?
Kishore Seendripu: However, the fab capacity is not coming online. These are huge multi-year efforts. So there's really a fab capacity shortage, I would say. The DSP supply is a pretty strong supply constraint, and we are really being. The opportunity on the CPO stuff really is a scale-up side, which is a greenfield opportunity for us. But I do believe the NPO is going to be the more bigger success driver than a CPO. In an NPO scenario too as well, as you go to higher speeds longer term, there'd be a DSP required, just like an LRO configuration on the, what you call a half DSP.
Kishore Seendripu: Because we can all agree now that the LPOs are really, really a very small fraction point technology, and they don't have legs for the future. Right. So we have product portfolio that spans TIAs. We have drivers and also we've announced products along those various categories. So I feel we're very well positioned whichever way the industry goes, and we'll have a full portfolio.
Christopher Rolland: Awesome. Thank you, Kishore.
Kishore Seendripu: Yes.
Operator: Thank you. Our next question comes from the line of Karl Ackerman with BNP Paribas. Please proceed with your question.
Sam Feldman: Hi, this is Sam Feldman for Karl Ackerman. First, based on your extended visibility into calendar 2028, can you provide any color on how we should think about the growth rate, the relative growth rate between 800G and 1.6T? Should we expect 400G to grow through calendar 2027?
Steve Litchfield: I will take that. This year, our optical growth is almost all 800 in the H1, as we have stated, and Kishore mentioned earlier, 1.6T starts in 2027, but it will have a much bigger growth year in 2028. What is the mix in 2028? I think it is substantially 1.6. Maybe you will see 800 kind of trailing off, but potentially it can sustain as well up until probably 2029. We see significant growth in 2027 as well as 2028 on both of those.
Sam Feldman: Got it. Thank you.
Operator: Thank you. Our next question comes from the line of Quinn Bolton with Needham & Company. Please proceed with your question.
Quinn Bolton: Hey, guys. Congratulations on the results and strong DSP outlook. I guess, Steve, for you, looks like the prepaid assets on the balance sheet increased by about $50 million in the September quarter. I assume that the large majority of that are your prepayments that you talked about. Given that it sounds like you are fairly well booked for calendar 2027 now, in the DSP business, do you feel that the prepayments and the wafers you secured support that 2027 backlog? Do you still have more work to do, in the Q4 in terms of prepayments and securing wafers to meet the demand you are seeing for calendar 2027?
Steve Litchfield: Hey, Quinn. Yeah. So, we talked about this a little bit before, similar to others, the prepayments mostly on the wafer side. There are lots of other things going on out there. On the balance sheet is not just TSMC, there are other things on prepayments as well that we do not break out. I talked earlier about visibility in 2027. Yeah. Backlog, as you would imagine, is very, very good in 2027 and into 2028. Prepaid, look, I expect prepaids to continue to go up from here as our revenue projections continue to go up as well.
Steve Litchfield: So, I think that is part of the reason why we increased the revolver itself, just to make sure that we can capture all of that upside capacity that is coming from increased market share that we have gained.
Quinn Bolton: Yeah. I think then a follow-up. Steve, I think at some of the investor conferences over the past few months, you have estimated your DSP share currently maybe in the 5% to 7% range. Do you think you are at the high end of that or potentially above that by the end of 2026, just based on the strong backlog you are seeing and the increase in the DSP forecast this year?
Kishore Seendripu: Hey, Quinn, this is Kishore.
Quinn Bolton: Kishore.
Kishore Seendripu: Yeah, thank you. I think it is very hard to estimate share given the accelerating demand on units as well. So, if I am looking backward, then I think we are well above that number. If I am looking forward, maybe we have made more progress beyond that share percent, but I do not know at what level we are. So can I say what we will look like two years from now? Sure. It should be in the teens for sure, right? So I think that is a very backward-looking number. On a share percentage basis, on a backward-looking TAM basis, it should be larger.
Kishore Seendripu: But on a forward-looking basis, very hard to estimate because the numbers are moving all around. But suffice to say, we are gaining share every day. I think, in a 12 to 24 window, we could be neck and neck with one of our two competitors, right? That is the hope, that is the goal, and that is the momentum.
Quinn Bolton: Excellent. Thank you, Kishore.
Operator: Thank you. Our next question comes from the line of Tim Savageaux with Northland Capital Markets. Please, you may proceed with your question.
Tim Savageaux: Hey, good afternoon. I will add my congrats on the results and the outlook.
Kishore Seendripu: Thanks, Tim.
Tim Savageaux: You are welcome. To kind of market growth, market share type discussion, and Steve, you made a comment earlier in the call about outgrowing the market. I think we may have a baseline there. Marvell talked about kind of the AI interconnect unit for them growing, call it, 65% on a CAGR through 2030. It is coincidentally what MaxLinear is growing overall in 2026. As we look at the optical DSP business, is it fair to use something like that as a baseline? When you say you want to outgrow the market, just based on your run rate, it seems like we should be thinking closer to a double here than anything else for 2027.
Tim Savageaux: I just kind of wanted to bounce that reasoning off you.
Steve Litchfield: No, Tim, I feel very confident we are outgrowing the market, which I think is supportive of what you are asking. Yes.
Kishore Seendripu: We cannot speak for Marvell's numbers.
Tim Savageaux: Well, I will go on and ask this one anyways then, which is, I think your market share is like 6% here. If you take those forecasts out to their conclusion, they are talking about, I don't know, a $15 billion optical DSP market in 2030. If you get into double digits here before that, you should have a billion-dollar business on your hand pretty quickly. Want to bounce that one off you, and then that will be it for me.
Kishore Seendripu: Tim, we can't comment on that.
Steve Litchfield: Yeah. But the numbers you're talking about, look, there's a lot of growth here. Kishore commented earlier about the transceiver growth. People are talking 200 million units next year. So these numbers make a lot of sense, as Kishore stated, it being up in the teens over the next couple of years, very achievable. I think we are doing a great job. I think you've seen that from us in 2026, but I would say it's just getting going. You're going to continue to see through that in 2027 and 2028.
Tim Savageaux: Thanks very much.
Operator: Thank you. Our next question comes from the line of Joe Quatrochi with Wells Fargo. You may proceed with your question.
Travis Poulin: Hi, guys. This is Travis Poulin on for Joe. Thanks for taking my question. Steve, I just wanted to switch gears to broadband. You spoke of seeing some seasonal softness in Q4 2026. Just curious how we should think about this moving forward into H1 2027, into H2 2027, and just the overall broadband recovery in general. Thanks.
Steve Litchfield: Yeah. Thanks, Travis. We actually feel pretty good. We do see some seasonality in Q4, certainly. As far as 2027 goes, just as we had talked about previously with the telco spending, but then also our market share gains on the PON side, we do expect to see growth in 2027, so feel very good about that.
Travis Poulin: Got it. Thank you. That is it for me.
Operator: Thank you. Our next question in queues is from the line of Tore Svanberg with Stifel. Please proceed with your question.
Tore Svanberg: Yeah, thank you. Now that the basic questions are out of the way, I just had a few more specific follow-ups. Kishore, I think you said you expect 1.6T revenue already H1 of next year. I think in the last quarter, I think you talked about maybe middle of the year. So what changed there? Is it the market that is accelerating earlier? Is it based on some new design wins? Any clarification there? By the way, does that include DSP and TIA, or is it just DSP?
Kishore Seendripu: Tory, obviously, it has been 3 months, and we did not know where we would be, but I think there is an initial design win that will start shipping in the H1. The exact amount of quantity is not clear, but it is meaningful in the sense that it sets up the H2 very nicely. Also, second part also is correct what you asked. There are accelerating design qual momentum going on. Somewhat, we are bottlenecked by our own ability to support multiple quals simultaneously, and we are all going through resource bottlenecks from that angle.
Kishore Seendripu: So that narrative is also about accelerating on the qual windows across the module space into the data center cycles. Right? I think that is what gives me a little more. Then we also have commitments both for DSP and TIA in these design wins. So it is not just our DSP alone. Obviously, we live in a world where we want to attach our own TIA to our own DSP for selfish reasons beyond just a great performance advantage and cost saving for our own customers in terms of power efficiency and the total BOM efficiency, right? I think all the three questions you asked there are a strong affirmative response.
Tore Svanberg: Very good. Last one is on pricing or content. We are hearing as you go from 800G to 1.6T, that maybe prices could be 2x. You are obviously going to be shipping more than the DSP with the TIA. So in your case, I guess you could potentially have more than 2x as the market goes from 800G to 1.6?
Kishore Seendripu: You are absolutely right. So if you just take the proverbial 2x, historically, it never stuck when you change speeds, right? This time it is sticking, right? So the ASP on the DSP is more or less doubling, and then we have TIA that we did not add before. So all in all, we will be growing more than a 2x on the ASP number. The TIA is not just a TIA, right? It has got smarts that really has what I call a trajectory guide to our NPO strategy and our CPO strategy and our LPO strategy and LRO strategy. So it is an all-in-one deal in the MaxLinear TIA world.
Tore Svanberg: Great color. Thank you.
Kishore Seendripu: Yep.
Operator: Thank you. Our last question comes from the line of Cody Acree with StoneX Financial. Please proceed with your question.
Cody Acree: Hey, guys, just a couple follow-ups as well. Maybe, Kishore, can we go back to that comment you made about constrained ability to support more than one qual? Is this just wafers out of Samsung that you are talking about, and what is the ability to address that so that you can get quals lined up a little faster?
Kishore Seendripu: Oh, so, the quals has got nothing to do with wafer supply, right? You have to line up, let's say you have 10 module makers, and that's not unrealistic. Then all of the 10 want to go simultaneously get their modules ready to go to the data center qual. We'll have to pick and choose, right? Because at the end point, multiple module makers are targeting the same data centers as well. So, that constrains us in terms of how we prioritize our own internal resources to get qual ready. So, that was the context I talked about, right?
Kishore Seendripu: These are pretty complicated, even though people simplify it and call it a pluggable. It sounds so trivial, but these are one of the most complex technologies that chip people have ever developed over the last 20 to 30 years. You ought to think about this not just in terms of pluggable alone, you also to think about interoperability with the switch, the other two vendors of silicon and pre-existing 800G silicon as well. Not just 1.6T. So it's pretty complicated. So we're constrained in how many we can activate at the same time. So you, of course, sequence and prioritize them. That's the constraint I was referring to.
Cody Acree: Got you. Thank you for that clarification. Then just lastly,
Kishore Seendripu: Yep.
Cody Acree: With Washington, can you talk about your expected attach rates to Rushmore and the opportunity for standalone as you get into 2027 and maybe looking into 2028? Then maybe the same thing with your AECs. Can you talk about a mix of onboard versus cables for Annapurna?
Kishore Seendripu: Okay. Good question. I would say, if you take the short-term window versus, let's say, a year-out window, the TIA attach rate answers will be quite different. In the short term, let's say it is an 80% attach rate. In a year and a half from now, I know it is around the corner, it will be 100%, and we hope it to be more than 100%. It is a TIA that works with other DSPs as well. There is only one other real TIA vendor that meets the performance benchmarks that you need for a 1.6 terabit type of product with the power envelope that you need to meet. That is the truth, despite what anybody can tell.
Kishore Seendripu: We hope to be the other guy outside of the one guy, and we have validation to show that. We expect the attach rate to be 100% at least and more in a year and a half from now. That is the number 1 answer. The next question you had was related to. Could you repeat that for me, please? I just forgot.
Cody Acree: Annapurna.
Kishore Seendripu: Annapurna.
Cody Acree: Just Annapurna, yeah.
Kishore Seendripu: Annapurna, yeah. It is an active electrical cable. There is one large leader, which everybody knows is Credo. They are 93% or maybe 99% of the entire AEC cable market. I think the market is diversifying now because the problem is getting a lot more complicated. There are going to be multiple AEC vendors, and our solution will be a pure silicon play, to selling it to a cable maker or somebody who makes what they call the paddle card for the AEC.
Kishore Seendripu: Our revenues for the AEC will not be as large as selling a whole cable, but it will correspond to what an AEC market would dictate in terms of silicon price inside it. I would think that it would be a similar pricing as our TAM for DSP per optical. We expect not to get a big share, let us assume. We are planning around one or two big data centers and then a share of those guys through intermediaries. I think we should be able to get to 20% to 30% in the 1.6 terabit cycle, somewhere in the next couple of years. We will not expand it to multiple data centers, right? It will be only one or two data centers in the US.
Cody Acree: Excellent. Thanks for the help, guys.
Kishore Seendripu: Thank you.
Operator: Thank you. We have reached the end of the question and answer session. Therefore, I would like to turn the call back over to Leslie Green for closing remarks.
Leslie Green: Thank you, Shamali, and thank you all for joining. This quarter, we will be presenting at a number of financial conferences and virtual events. Details will be posted on our investor relations page. Thank you all for joining today, and we look forward to speaking with you again soon.
Operator: Thank you. This concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.
