MXL Q2 Earnings Call Highlights Optical AI Data Center Growth

MXL Drives Optical Expansion

CEO Kishore Seendripu said MaxLinear’s infrastructure business has become the company’s largest revenue category, driven by production ramps of optical data center products. Infrastructure revenues increased 145% year over year in the second quarter.

Seendripu highlighted the Keystone PAM4 DSP platform as a key growth driver, with the product supporting 400G and 800G optical deployments at major hyperscale customers. He noted that Keystone’s power performance has helped support customer adoption.

The company raised its 2026 optical data center revenue outlook to $210 million to $230 million, citing stronger customer orders and improved visibility into production ramps.

MaxLinear Expands AI Connectivity Roadmap

MaxLinear discussed several products positioned for future AI infrastructure needs, including Rushmore, Washington and Annapurna. Management said these platforms are designed for higher-speed optical and electrical connectivity applications.

Seendripu said Rushmore, a 1.6-terabit optical PAM4 DSP platform, is expected to begin contributing revenues in 2027. The company also expects Washington and Annapurna products to begin initial revenue contributions in 2027 before broader ramps.

The broader portfolio expansion includes solutions targeting pluggable optics, LPO, LRO, NPO, CPO and active electrical cable applications, giving MaxLinear additional exposure to evolving AI data center architectures.

MXL Raises Growth Expectations

MaxLinear reported second-quarter revenues of $168.8 million, up 55% year over year and 23% sequentially. Revenues beat the Zacks Consensus Estimate of $165 million. Non-GAAP EPS was 35 cents, ahead of the Zacks Consensus Estimate of 33 cents.

Chief financial officer Steven Litchfield said the company’s infrastructure mix helped drive higher profitability. Non-GAAP gross margin was 59.5%, while non-GAAP operating margin reached 22.3%.

For the third quarter of 2026, MaxLinear guided revenues of $210 million to $220 million. It expects non-GAAP gross margin of 58.5% to 61.5%.

MaxLinear Builds Broader Market Reach

Management said broadband and connectivity markets also delivered growth during the quarter. The company cited deployments of fiber PON and Wi-Fi 7 gateway platforms with major service providers.

Litchfield said MaxLinear continues to gain share in PON programs and expects broadband activity to remain supported by customer rollouts. He added that DOCSIS upgrades are also progressing.

Outside data centers, the company highlighted opportunities in edge AI-driven upgrades, 5G wireless infrastructure and storage acceleration products.

MXL Addresses Analyst Questions

A Stifel analyst asked about the increase in optical revenue expectations and the drivers behind the stronger outlook. Management said growth is increasingly coming from 800G PAM4 adoption, with customer activity spanning U.S. and Asia markets.

A Benchmark analyst questioned order visibility and supply commitments. Litchfield said visibility extends about six months and that wafer prepayments are supporting customer demand backed by production needs.

A Needham analyst asked about Rushmore qualification activity. Seendripu said Keystone has established a customer foundation that can support future 1.6-terabit product adoption.

MaxLinear Focuses on Profitability

MaxLinear management emphasized improving operating leverage as infrastructure revenues grow. Litchfield said the company remains focused on progressing toward its long-term goal of 30% to 35% operating margins.

The company ended the quarter with $93.7 million in cash, cash equivalents and restricted cash, while operating cash flow was approximately $4.8 million.

Management’s outlook centered on continued product ramps, higher-speed connectivity opportunities and expanding participation in AI infrastructure markets over the next several years.

Zacks Rank & Style Scores

MaxLinear currently carries a Zacks Rank #3 (Hold). The Zacks Rank focuses on earnings estimate revisions and is designed to help indicate stocks with stronger potential performance over a one-to-three-month period. The rank can change as analysts update earnings estimates following new company information. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company has a Value Score of F, Growth Score of A, Momentum Score of F and VGM Score of C. Zacks Style Scores range from A to F, with stronger scores reflecting more favorable characteristics for the related investment style.

The Style Scores are intended to complement the Zacks Rank. Zacks notes that stocks with stronger Rank combinations and favorable Style Scores have historically shown better performance characteristics, while individual scores should be viewed alongside the broader Zacks Rank framework.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research