“In the first quarter, we continued to execute on our core 5G wireless, optical fiber datacenter interconnect, and power management initiatives that comprise our growing Infrastructure revenues and target addressable market. We established further design-win traction in the hyperscale datacenter end-market with our 400 gigabit PAM4 DSP SoC with integrated laser drivers and companion quad-TIA system solution. We also achieved significant engineering milestones in customer engagements for our industry-leading 5G wireless 14nm CMOS 4x4 Quad RF transceiver system-on-chip solution. This brings us closer to realizing production revenues in the large and transforming high speed optical data center interconnect and 5G wireless access infrastructure markets. At the same time, we are effectively navigating interim weakness in our connected home market owing to technology transition challenges of our end customers, general demand softness, and the impact of U.S. government import tariffs on our customer manufacturing supply chains,” commented Kishore Seendripu, Ph.D., Chairman and CEO.

“In the quarter, solid revenue results in line with our guidance, gross margin improvement, and lower operating expenses due to disciplined execution, have yielded strong operating cash flows of approximately $16.0 million. As a result, we pre-paid an additional $15.0 million towards our outstanding term-loan debt during the first quarter of 2019, which further reduces our leverage ratio. In the second half of the year and longer term, we are excited about the operating leverage in our business that will be enabled by improvements in our cost structure and continued execution on our infrastructure growth initiatives,” continued Dr. Seendripu.

Second Quarter 2019 Business Outlook

The company expects revenue in the second quarter 2019 to be approximately $83 million to $88 million, and also estimates the following:

• GAAP gross margin of approximately 53.0% to 54.0%;
• Non-GAAP gross margin of approximately 63.5% to 64.5%;
• GAAP operating expenses of approximately $49.0 million to $49.5 million; and
• Non-GAAP operating expenses of approximately $33.0 million to $33.5 million.

Webcast and Conference Call

MaxLinear will host its first quarter financial results conference call today, May 1, 2019 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). To access this call, dial US toll free: 1-877-407-3109 / International: 1-201-493-6798. A live webcast of the conference call will be accessible from the investor relations section of the MaxLinear website at http://investors.maxlinear.com, and will be archived and available after the call at http://investors.maxlinear.com until May 14, 2019. A replay of the conference call will also be available until May 14, 2019 by dialing US toll free: 1-877-660-6853 / International: 1-201-612-7415 and Conference ID#: 13689640.

Cautionary Note Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements concerning our future financial performance (including our current guidance for second quarter 2019 revenue, gross margins, and operating expense and statements concerning expectations of potential developments in our target markets, including management’s views with respect to trends in our DOCSIS, Connected Home and Infrastructure markets. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from any future results expressed or implied by the forward-looking statements. Forward-looking statements are based on management’s current, preliminary expectations and are subject to various risks and uncertainties. Risks and uncertainties affecting our business and future operating results include, without limitation, intense competition in our industry; our dependence on a limited number of customers for a substantial portion of our revenues; uncertainties concerning how end user markets for our products will develop, including in particular new markets we are entering but also existing markets such as cable; potential uncertainties arising from continued consolidation among cable television and satellite operators in our target markets and continued consolidation among competitors within the semiconductor industry generally; our ability to develop and introduce new and enhanced products on a timely basis and achieve market acceptance of those products, particularly as we seek to expand outside of our historic markets; potential decreases in average selling prices for our products; risks relating to intellectual property protection and the prevalence of intellectual property litigation in our industry; the impact on our financial condition of the indebtedness arising from the Exar transaction; our reliance on a limited number of third party manufacturers; and our lack of long-term supply contracts and dependence on limited sources of supply.

In addition to these risks and uncertainties, investors should review the risks and uncertainties contained in our filings with the Securities and Exchange Commission (SEC), including our most recent Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 5, 2019 and our Current Reports on Form 8-K, as well as the information to be set forth under the caption “Risk Factors” in MaxLinear’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, which we expect to file shortly. All forward-looking statements are based on the estimates, projections and assumptions of management as of May 1, 2019, and MaxLinear is under no obligation (and expressly disclaims any such obligation) to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.