What changed in this filing

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Item 1. Financial Statements

2021-07-28 compared with 2021-04-28 · 250 added, 188 removed, 681 unchanged (39% of the section changed)

25 unchanged sentences

Accrued compensation 39,492 47,302

Current portion of long-term debt 2,862 —

Total current liabilities 211,789 233,661

9 unchanged sentences

550,000 shares authorized;

75,378 shares issued and outstanding at March 31, 2021 and 74,536 shares issued and outstanding December 31, 2020

76,469 shares issued and outstanding at June 30, 2021 and 74,536 shares issued and outstanding December 31, 2020

Additional paid-in capital 640,710 602,064

7 unchanged sentences

in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Net revenue $ 205,376 $ 65,220 $ 414,735 $ 127,247

10 unchanged sentences

Interest expense ( 3,741 ) ( 2,183 ) ( 7,947 ) ( 4,659 )

Loss on extinguishment of debt ( 5,221 ) — ( 5,221 ) —

Other income (expense), net ( 537 ) ( 81 ) ( 641 ) 99

Total interest and other income (expense), net ( 4,310 ) ( 2,071 )

Income (loss) before income taxes 5,608 ( 22,205 )

Income tax provision (benefit) 1,806 ( 6,736 )

Total other income (expense), net ( 9,481 ) ( 2,233 ) ( 13,791 ) ( 4,304 )

Loss before income taxes ( 7,277 ) ( 25,008 ) ( 1,669 ) ( 47,213 )

Income tax benefit ( 8,010 ) ( 3,201 ) ( 6,204 ) ( 9,937 )

Net income (loss) $ 733 $ ( 21,807 ) $ 4,535 $ ( 37,276 )

9 unchanged sentences

in thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Net income (loss) $ 733 $ ( 21,807 ) $ 4,535 $ ( 37,276 )

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments, net of tax expense of $ 376 and tax benefit of $ 9 for the three months ended March 31, 2021 and 2020, respectively

Foreign currency translation adjustments, net of tax expense of $ 607 and $ 231 for the three and six months ended June 30, 2021, respectively, and net of tax expense of $ 33 and $ 24 for the three and six months ended June 30, 2020, respectively

357 294 ( 632 ) ( 286 )

Unrealized gain (loss) on interest rate swap, net of tax expense of $ — and tax benefit of $ 41 for the three months ended March 31, 2021 and 2020, respectively

Unrealized gain (loss) on interest rate swap, net of tax expense of $ 30 and tax benefit of $ 11 for the three and six months ended June 30, 2020, respectively

— 116 — ( 37 )

Other comprehensive income (loss) 357 410 ( 632 ) ( 323 )

3 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

THREE MONTHS ENDED MARCH 31, 2021

FISCAL QUARTERS ENDED JUNE 30, 2021

in thousands)

13 unchanged sentences

Balance at March 31, 2021 75,378 $ 8 $ 628,911 $ 446 $ ( 208,587 ) $ 420,778

Common stock issued pursuant to equity awards, net 1,098 — ( 338 ) — — ( 338 )

Repurchase of common stock ( 120 ) ( 4,464 ) ( 4,464 )

Employee stock purchase plan 113 — 2,635 — — 2,635

Stock-based compensation — — 13,966 — — 13,966

Other comprehensive income — — — 357 — 357

Net income — — — — 733 733

Balance at June 30, 2021 76,469 $ 8 $ 640,710 $ 803 $ ( 207,854 ) $ 433,667

See accompanying notes.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

THREE MONTHS ENDED MARCH 31, 2020

FISCAL QUARTERS ENDED JUNE 30, 2020

in thousands)

12 unchanged sentences

Balance at March 31, 2020 72,345 $ 7 $ 539,035 $ ( 1,620 ) $ ( 129,265 ) $ 408,157

Common stock issued pursuant to equity awards, net 597 — 989 — — 989

Employee stock purchase plan 161 — 2,141 — — 2,141

Stock-based compensation — — 12,085 — — 12,085

Other comprehensive income — — — 410 — 410

Net loss — — — — ( 21,807 ) ( 21,807 )

Balance at June 30, 2020 73,103 7 554,250 ( 1,210 ) ( 151,072 ) 401,975

See accompanying notes.

2 unchanged sentences

in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating Activities

3 unchanged sentences

Impairment losses — 86

Amortization of debt issuance costs and accretion of discount on debt and leases 844 410

Amortization of debt issuance costs and accretion of discounts 2,071 807

Stock-based compensation 26,921 18,912

3 unchanged sentences

Impairment of leased right-of-use assets 429 44

Loss on extinguishment of debt 5,221 —

(Gain) loss on foreign currency 408 ( 226 )

14 unchanged sentences

Purchases of intangible assets ( 1,112 ) ( 13 )

Cash used in acquisitions, net of cash acquired ( 27,500 ) —

Purchases of long-term investments ( 5,000 ) —

1 unchanged sentence

Financing Activities

Proceeds from the issuance of debt 350,000 —

Payment of debt issuance cost ( 4,127 ) —

Repayment of debt ( 369,813 ) —

34 unchanged sentences

The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission, or the SEC, on February 11, 2021, or the Annual Report.

Interim results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021.

Interim results for the six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021.

Use of Estimates and Significant Risks and Uncertainties

2 unchanged sentences

In particular, the Company experienced some negative impact to its revenue and gross profits in the first half of 2020 due to several industry-wide dynamics related to COVID-19 including supply constraints as well as customer requests to temporarily delay shipments.

Although the Company has benefited from increased demand for certain of our products from the work-from-home environment in the second half of 2020 and the first quarter of 2021, a sudden increase in demand for electronics containing semiconductor chips and stockpiling of chips by certain firms in China blacklisted by the U.S.

Although the Company has benefited from increased demand for certain of our products from the work-from-home environment in the second half of 2020 and the first half of 2021, a sudden increase in demand for electronics containing semiconductor chips and stockpiling of chips by certain firms in China blacklisted by the U.S.

has exacerbated bottlenecks in the supply chain, resulting in a global semiconductor chip shortage impacting the Company’s industry.

Some chip manufacturers are estimating this supply shortage may continue into 2022.

While these chip manufacturers are working to increase capacity in the future, and the Company is continuing to work closely with our suppliers and customers to minimize the potential adverse impacts of the supply shortage, such shortage may have a near-term impact on the Company’s ability to meet increased demand on certain products and have a negative impact on its operating results beginning in the second quarter of 2021 which may continue into 2022.

Heightened volatility, global supply shortages, and uncertainty in customer demand and the worldwide economy in general has continued, and the Company may experience increased volatility in its sales and revenues in the near future.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company also believes that its $ 149.2 million of cash and cash equivalents at March 31, 2021 will be sufficient to fund its projected operating requirements for at least the next twelve months.

The Company also believes that its $ 131.4 million of cash and cash equivalents at June 30, 2021 will be sufficient to fund its projected operating requirements for at least the next twelve months.

A material adverse impact from COVID-19 and the global semiconductor chip shortage could result in a need to raise additional capital or incur additional indebtedness to fund strategic initiatives or operating activities, particularly if the Company pursues additional acquisitions.

The Company’s future capital requirements will depend on many factors, including the Company’s efforts to complete the integration of the acquired WiFi and Broadband assets business and NanoSemi, Inc.

The Company’s future capital requirements will depend on many factors, including the Company’s efforts to complete the integration of the acquired Wi-Fi and Broadband assets business and NanoSemi, Inc.

(Note 3), changes in revenue, the expansion of engineering, sales and marketing activities, the timing and extent of expansion into new territories, the timing of introductions of new products and enhancements to existing products, the continuing market acceptance of the Company’s products and potential material investments in, or acquisitions of, complementary businesses, services or technologies.

1 unchanged sentence

If the Company is unable to raise additional funds when needed, it may not be able to sustain its operations or execute its strategic plans.

The Company is not aware of any specific event or circumstance that would require an update to its estimates or adjustments to the carrying value of its assets and liabilities as of April 28, 2021, the issuance date of this Quarterly Report on Form 10-Q.

The Company is not aware of any specific event or circumstance that would require an update to its estimates or adjustments to the carrying value of its assets and liabilities as of July 28, 2021, the issuance date of this Quarterly Report on Form 10-Q.

Actual results could differ from those estimates, particularly if the Company experiences material impacts from COVID-19.

1 unchanged sentence

Refer to the Company’s Annual Report for a summary of significant accounting policies.

There have been no other significant changes to the Company’s significant accounting policies during the three months ended March 31, 2021.

There have been no other significant changes to the Company’s significant accounting policies during the six months ended June 30, 2021.

Recently Adopted Accounting Pronouncements

3 unchanged sentences

Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis.

The adoption of the amendments in this update did not have a material impact on the Company’s consolidated financial position and results of operations as of and for the three months ended March 31, 2021, and is also not expected to have a material impact on the Company’s financial position and results of operations as of and for the year ending December 31, 2021.

The adoption of the amendments in this update did not have a material impact on the Company’s consolidated financial position and results of operations as of and for the six months ended June 30, 2021, and is also not expected to have a material impact on the Company’s financial position and results of operations as of and for the year ending December 31, 2021.

In October 2020, the FASB issued ASU No.

2 unchanged sentences

The amendments in this update should be applied retrospectively and at the beginning of the period that includes the adoption date.

The adoption of the amendments in this update did not have a material impact on the Company’s financial disclosures as of and for the three months ended March 31, 2021, and is also not expected to have a material impact on the Company's financial disclosures for the year ending December 31, 2021.

The adoption of the amendments in this update did not have a material impact on the Company’s financial disclosures as of and for the six months ended June 30, 2021, and is also not expected to have a material impact on the Company's financial disclosures for the year ending December 31, 2021.

Net Income (Loss) Per Share

6 unchanged sentences

The table below presents the computation of basic and diluted EPS:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(in thousands, except per share amounts)

6 unchanged sentences

Diluted $ 0.01 $ ( 0.30 ) $ 0.06 $ ( 0.51 )

For the three months ended March 31, 2021 and 2020, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 0.1 million and 3.3 million, respectively, from the calculation of diluted net income (loss) per share due to their anti-dilutive nature.

For the three and six months ended June 30, 2021 and 2020, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 0.04 million and 0.1 million for the 2021 periods, respectively, and 2.5 million and 2.9 million for the 2020 periods, respectively, from the calculation of diluted net income (loss) per share due to their anti-dilutive nature.

Business Combinations

Acquisition of the WiFi and Broadband assets business

Acquisition of the Wi-Fi and Broadband assets business

On July 31, 2020, the Company and certain of its designated subsidiaries completed their acquisition of the Home Gateway Platform Division, which the Company refers to as the Wi-Fi and Broadband assets business, pursuant to an Asset Purchase Agreement with Intel Corporation, or Intel, dated April 5, 2020 (the “Asset Purchase Agreement”), and related agreements.

1 unchanged sentence

The transaction was funded with a portion of the net proceeds from a secured incremental term loan with an aggregate principal amount of $ 175.0 million (Note 8).

The Wi-Fi and Broadband assets business develops a broad portfolio of connected home products, including WiFi, Ethernet and Broadband Gateway Processor SoCs, which enables the Company to strengthen its existing connected home portfolio by bringing together a complete, scalable, and complementary platform of connectivity and access solutions to address its customers’ needs across target end-markets.

The Wi-Fi and Broadband assets business develops a broad portfolio of connected home products, including Wi-Fi, Ethernet and Broadband Gateway Processor SoCs, which enables the Company to strengthen its existing connected home portfolio by bringing together a complete, scalable, and complementary platform of connectivity and access solutions to address its customers’ needs across target end-markets.

The acquired assets and assumed liabilities, together with the employees who joined the Company and its subsidiaries as a result of the transaction, represent a business as defined in ASC 805, Business Combinations .

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In connection with the transaction, the Company and Intel have entered into as of the closing certain other ancillary agreements, including (i) an intellectual property matters agreement, pursuant to which Intel will grant to the Company a license to certain intellectual property rights for use by the Company in connection with the acquired assets and the Company will grant back to Intel a license to the intellectual property rights in the acquired assets, (ii) a supply agreement, pursuant to which Intel will manufacture and fabricate certain products for the Company that are part of the acquired assets, (iii) an ethernet network controller services agreement, pursuant to which the Company will provide Intel with certain development services with respect to certain Intel ethernet network controller products, (iv) a transition services agreement, pursuant to which Intel will provide certain services on a transitional basis for up to a 12-month period after the closing, the scope of which includes services relating to real estate and facilities, information technology, and supply chain, procurement, sales operations, and engineering support, and (v) a side letter regarding the delayed transfer of certain inventory.

Pursuant to the delayed inventory side letter, the Company has control and economic benefits of the inventory, but the title and possession of the inventory has been delayed until the last day that Intel provides services under the transition services agreement.

In connection with the transaction, the Company and Intel have entered into as of the closing certain other ancillary agreements, including (i) an intellectual property matters agreement, pursuant to which Intel granted to the Company a license to certain intellectual property rights for use by the Company in connection with the acquired assets and the Company granted back to Intel a license to the intellectual property rights in the acquired assets, (ii) a supply agreement, pursuant to which Intel manufactures and fabricates certain products for the Company that are part of the acquired assets, (iii) an ethernet network controller services agreement, pursuant to which the Company provides Intel with certain development services with respect to certain Intel ethernet network controller products, (iv) a transition services agreement, pursuant to which Intel provided certain services on a transitional basis for up to a 12-month period after the closing, the scope of which included services relating to real estate and facilities, information technology, and supply chain, procurement, sales operations, and engineering support, and (v) a side letter regarding the delayed transfer of certain inventory.

Pursuant to the delayed inventory side letter, the Company had control and economic benefits of the inventory, but transfer of the title and possession of the inventory was delayed until the last day that Intel provided services under the transition services agreement.

Acquisition Consideration

The following table summarizes the fair value of purchase price consideration to acquire the WiFi and Broadband assets business (in thousands):

The following table summarizes the fair value of purchase price consideration to acquire the Wi-Fi and Broadband assets business (in thousands):

Description Amount

34 unchanged sentences

In addition, the NanoSemi stockholders will receive $ 35.0 million in deferred cash payments payable in 2021, and certain NanoSemi stockholders may also receive up to an additional $ 35.0 million in potential contingent consideration, subject to the acquired business’s satisfying certain financial objectives from July 1, 2020 through December 31, 2022.

As of March 31, 2021, the Company has made $ 20 million of $ 35.0 million in deferred cash payments.

As of June 30, 2021, the Company has made $ 27.5 million of $ 35.0 million in deferred cash payments.

The stock consideration was issued in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended.

17 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Preliminary Purchase Price Allocation

The following is an allocation of purchase price as of the September 9, 2020 acquisition closing date based upon a preliminary estimate of the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition (in thousands):

Purchase Price Allocation

The following is an allocation of purchase price as of the September 9, 2020 acquisition closing date based upon an estimate of the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition (in thousands):

Description Amount

25 unchanged sentences

accordingly, the fair value of the deferred payments and contingent consideration have been accounted for as a portion of the purchase consideration.

Estimates of fair value require management to make significant estimates and assumptions which are preliminary and subject to change upon finalization of the valuation analysis.

Estimates of fair value require management to make significant estimates and assumptions.

The goodwill recognized is attributable primarily to the acquired workforce, expected synergies, and other benefits that MaxLinear believes will result from integrating the operations of the Wi-Fi and Broadband assets business and NanoSemi with the operations of MaxLinear.

Certain liabilities included in the purchase price allocations are based on management’s best estimates of the amounts to be paid or settled and based on information available at the time the purchase price allocations were prepared.

There have been no adjustments between the preliminary purchase price allocations reflected as of December 31, 2020 and March 31, 2021.

Updates to the valuations of certain assets acquired and liabilities assumed and our evaluation of certain income tax positions may result in changes to the recorded

There have been no adjustments between the preliminary purchase price allocations reflected as of December 31, 2020 and the purchase price allocation reflected as of June 30, 2021.

Updates to the valuations of certain assets acquired and liabilities assumed and our evaluation of certain income tax positions may result in changes to the recorded amounts of assets and liabilities, with corresponding adjustments to goodwill amounts in subsequent periods.

We expect to complete the purchase price allocations within 12 months of the respective acquisition dates.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

amounts of assets and liabilities, with corresponding adjustments to goodwill amounts in subsequent periods.

We expect to complete the purchase price allocations within 12 months of the respective acquisition dates.

The fair value of the identified intangible assets acquired from the Wi-Fi and Broadband assets business and NanoSemi was estimated using an income approach.

18 unchanged sentences

The following table presents the activity related to the restructuring plans, which is included in restructuring charges in the consolidated statements of operations:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(in thousands)

3 unchanged sentences

$ 38 $ 64 $ 2,204 $ 553

Lease related charges for the three months ended March 31, 2021 included the impairment of leased right-of-use assets and leasehold improvements of $ 0.4 million and $ 0.2 million, respectively, related to exiting a redundant facility.

Lease related charges for the six months ended June 30, 2021 included the impairment of leased right-of-use assets and leasehold improvements of $ 0.4 million and $ 0.2 million, respectively, related to exiting a redundant facility.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents a roll-forward of the Company’s restructuring liability for the three months ended March 31, 2021.

The following table presents a roll-forward of the Company’s restructuring liability for the six months ended June 30, 2021.

The restructuring liability is included in accrued expenses and other current liabilities and other long-term liabilities in the consolidated balance sheets.

6 unchanged sentences

Non-cash charges and adjustments — ( 561 ) ( 301 ) ( 862 )

Liability as of March 31, 2021 531 698 — 1,229

current portion as of March 31, 2021 ( 531 ) ( 379 ) — ( 910 )

Long-term portion as of March 31, 2021 $ — $ 319 $ — $ 319

As of March 31, 2021, the remaining lease related charges primarily consist of common area maintenance obligations.

Liability as of June 30, 2021 252 599 — 851

current portion as of June 30, 2021 ( 252 ) ( 372 ) — ( 624 )

Long-term portion as of June 30, 2021 $ — $ 227 $ — $ 227

As of June 30, 2021, the remaining lease related charges primarily consist of common area maintenance obligations.

The Company does not expect to incur additional material costs related to current restructuring plans.

2 unchanged sentences

The fair values of net tangible assets and intangible assets acquired are based upon preliminary valuations and the Company’s estimates and assumptions are subject to change within the measurement period (potentially up to one year from the acquisition date).

During the three months ended March 31, 2021, there were no changes in the carrying value of goodwill.

During the three and six months ended June 30, 2021, there were no changes in the carrying value of goodwill.

The Company performs an annual goodwill impairment assessment on October 31st each year, using a quantitative assessment comparing the fair value of each reporting unit, which the Company has determined to be the entity itself, with its carrying amount, including goodwill.

1 unchanged sentence

In addition to its annual review, the Company performs a test of impairment when indicators of impairment are present.

During the three months ended March 31, 2021 and 2020, there were no indications of impairment of the Company’s goodwill balances.

During the three and six months ended June 30, 2021 and 2020, there were no indications of impairment of the Company’s goodwill balances.

MAXLINEAR, INC.

3 unchanged sentences

The following table sets forth the Company’s finite-lived intangible assets resulting from business acquisitions and other purchases, which are amortized over their estimated useful lives:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(in Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Value Accumulated Amortization Net Carrying Amount

4 unchanged sentences

Customer relationships 4.6 128,800 ( 106,447 ) 22,353 128,800 ( 96,047 ) 32,753

Non-compete covenants 3.0 1,100 ( 1,100 ) — 1,100 ( 1,100 ) —

Backlog 2.4 1,300 ( 925 ) 375 1,300 ( 641 ) 659

1 unchanged sentence

The following table sets forth amortization expense associated with finite-lived intangible assets, which is included in the consolidated statements of operations as follows:

Three Months Ended March 31,

(in thousands)

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(in thousands) (in thousands)

Cost of net revenue $ 10,762 $ 8,592 $ 21,527 $ 17,183

4 unchanged sentences

The following table sets forth the activity related to finite-lived intangible assets:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

7 unchanged sentences

Should impairment exist, the impairment loss is measured based on the excess of the carrying amount of the asset over the asset’s fair value.

During the three months ended March 31, 2021 and 2020, the Company recognized impairment losses related to finite-lived intangible assets of $ 0 and $ 0.1 million, respectively.

During the three and six months ended June 30, 2021 and the three months ended June 30, 2020, no impairment losses related to finite-lived intangible assets were recognized.

During the six months ended June 30, 2020, the Company recognized impairment losses related to finite-lived intangible assets of $ 0.1 million.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents future amortization of the Company’s finite-lived intangible assets at March 31, 2021:

The following table presents future amortization of the Company’s finite-lived intangible assets at June 30, 2021:

(in thousands)

4 unchanged sentences

Indefinite-lived intangible assets consisted entirely of acquired in-process research and development technology, or IPR&D.

There was no activity related to the Company’s indefinite-lived intangible assets during the three months ended March 31, 2021 and 2020.

There was no activity related to the Company’s indefinite-lived intangible assets during the six months ended June 30, 2021 and 2020.

The Company performs its annual assessment of indefinite-lived intangible assets on October 31 each year or more frequently if events or changes in circumstances indicate that the asset might be impaired utilizing a qualitative test as a precursor to the quantitative test comparing the fair value of the assets with their carrying amount.

Based on the qualitative test, if it is more likely than not that indicators of impairment exists, the Company proceeds to perform a quantitative analysis.

During three months ended March 31, 2021 and 2020, no indicators of impairment were identified and, as a result, no IPR&D impairment losses were recorded.

During the three and six months ended June 30, 2021 and 2020, no indicators of impairment were identified and, as a result, no IPR&D impairment losses were recorded.

Financial Instruments

7 unchanged sentences

Cash, cash equivalents and restricted cash consist of the following:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(in thousands)

3 unchanged sentences

Total cash, cash equivalents and restricted cash $ 131,434 $ 150,034

As of March 31, 2021 and December 31, 2020, cash and cash equivalents included money market funds of approximately $ 20.4 million.

As of March 31, 2021 and December 31, 2020, the Company has restricted cash of approximately $ 1.1 million.

As of June 30, 2021 and December 31, 2020, cash and cash equivalents included money market funds of approximately $ 20.4 million.

As of June 30, 2021 and December 31, 2020, the Company has restricted cash of approximately $ 1.1 million.

The cash is restricted in connection with guarantees for certain import duties and office leases.

2 unchanged sentences

Inventory consists of the following:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(in thousands)

3 unchanged sentences

Prepaid and other current assets consist of the following:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(in thousands)

3 unchanged sentences

$ 13,866 $ 47,421

As of March 31, 2021, other receivables of $ 4.5 million consists primarily of amounts due from Intel for reimbursement of certain employee-related costs pursuant to the Asset Purchase Agreement (Note 3).

As of December 31, 2020, other receivables of $ 32.8 million consist of amounts due from Intel of $ 28.4 million for amounts collected on the Company’s behalf from customers on sales of the Company’s products under the transition services agreement and of $ 4.4 million for reimbursement of certain severance-related costs pursuant to the Asset Purchase Agreement.

Property and equipment, net consists of the following:

(in Years) March 31, 2021 December 31, 2020

(in Years) June 30, 2021 December 31, 2020

(in thousands)

11 unchanged sentences

$ 48,104 $ 39,470

Depreciation expense for the three months ended March 31, 2021 and 2020 was $ 3.7 million and $ 1.6 million, respectively.

Depreciation expense for the three and six months ended June 30, 2021 was $ 3.6 million and $ 7.3 million, respectively.

Depreciation expense for the three and six months ended June 30, 2020 was $ 1.6 million and $ 3.3 million, respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Included in other long-term assets, long-term investments were $ 5.0 million as of March 31, 2021 and consist of an investment in a privately held entity.

Included in other long-term assets, long-term investments were $ 5.0 million as of June 30, 2021 and consist of an investment in a privately held entity.

The Company does not have the ability to exercise significant influence or control over such entity and has accounted for the investment as a financial instrument.

1 unchanged sentence

Accrued price protection liability consists of the following activity:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

1 unchanged sentence

Charged as a reduction of revenue 49,907 2,191

Reversal of unclaimed rebates — ( 159 )

Payments ( 42,956 ) ( 8,687 )

1 unchanged sentence

Accrued expenses and other current liabilities consist of the following:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(in thousands)

14 unchanged sentences

$ 61,235 $ 105,842

As of March 31, 2021, payables under transition services agreement of $ 1.7 million primarily consists of amounts due to Intel for expenses incurred under the transition services agreement (Note 3).

As of December 31, 2020, payables under transition services agreement of $ 17.4 million consist of amounts due to Intel of approximately $ 9.1 million for purchases of inventory and $ 8.3 million for other operating expenses incurred under the transition services agreement.

4 unchanged sentences

Other comprehensive income (loss) before reclassifications, net of tax ( 632 ) — ( 632 )

Balance at March 31, 2021 $ ( 726 ) $ 1,172 $ 446

Balance at June 30, 2021 $ ( 369 ) $ 1,172 $ 803

MAXLINEAR, INC.

5 unchanged sentences

Principal balance:

Initial term loan $ 212,000 $ 212,000

Incremental term loan 137,812 157,812

Initial term loan under June 23, 2021 credit agreement $ 350,000 $ —

Initial term loan under May 12, 2017 credit agreement — 212,000

Incremental term loan under May 12, 2017 credit agreement, as amended — 157,812

Total principal balance 350,000 369,812

4 unchanged sentences

Long-term debt, non-current portion $ 343,022 $ 363,592

As of March 31, 2021 and December 31, 2020, the weighted average effective interest rate on aggregate debt was approximately 3.7 % and 4.4 %, respectively.

During each of the three months ended March 31, 2021 and 2020, the Company recognized total amortization of debt discount and debt issuance costs of $ 0.5 million and $ 0.3 million, respectively, to interest expense.

The approximate aggregate fair value of the term loans as of March 31, 2021 and December 31, 2020 was $ 351.8 million and $ 376.1 million, respectively, which was estimated on the basis of inputs that are observable in the market and which is considered a Level 2 measurement method in the fair value hierarchy.

As of March 31, 2021, aggregate future payments of principal are as follows:

As of June 30, 2021 and December 31, 2020, the weighted average effective interest rate on aggregate debt was approximately 3.2 % and 4.4 %, respectively.

During each of the three months ended June 30, 2021 and 2020, the Company recognized total amortization of debt discount and debt issuance costs of $ 0.5 million and $ 0.3 million, respectively, to interest expense.

During each of the six months ended June 30, 2021 and 2020, the Company recognized total amortization of debt discount and debt issuance costs of $ 1.0 million and $ 0.6 million, respectively, to interest expense.

The approximate aggregate fair value of the term loans outstanding as of June 30, 2021 and December 31, 2020 was $ 350.2 million and $ 376.1 million, respectively, which was estimated on the basis of inputs that are observable in the market and which is considered a Level 2 measurement method in the fair value hierarchy.

As of June 30, 2021, aggregate future payments of principal are as follows:

(in thousands)

2021 (6 months) $ 1,750

Thereafter 334,250

Total principal payments due 350,000

1 unchanged sentence

Long-term debt principal, non-current portion $ 346,500

Initial Term Loan

On May 12, 2017, the Company entered into a credit agreement with certain lenders and a collateral agent in connection with the acquisition of Exar Corporation.

The credit agreement provided for an initial secured term B loan facility, or the “Initial Term Loan,” in an aggregate principal amount of $ 425.0 million.

The credit agreement permits the Company to request incremental loans in an aggregate principal amount not to exceed the sum of $ 160.0 million (subject to adjustments for any voluntary prepayments), plus an unlimited amount that is subject to pro forma compliance with certain secured leverage ratio and total leverage ratio tests.

Incremental loans are subject to certain additional conditions, including obtaining additional commitments from the lenders then party to the credit agreement or new lenders.

Initial Term Loan and Revolving Facility under June 23, 2021 Credit Agreement

On June 23, 2021, the Company entered into a Credit Agreement (the “June 23, 2021 Credit Agreement”), by and among the Company, the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent and collateral agent, that provides for a senior secured term B loan facility, or the “Initial Term Loan under the June 23, 2021 Credit Agreement,” in an aggregate principal amount of $ 350.0 million and a senior secured revolving credit facility, or the

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loans under the Initial Term Loan bear interest, at the Company’s option, at a rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50% , (y) the prime rate then in effect and (z) an adjusted LIBOR rate determined on the basis of a one- three- or six-month interest period, plus 1.0% or (ii) an adjusted LIBOR rate, subject to a floor of 0.75% , in each case, plus an applicable margin of 2.50 % in the case of LIBOR rate loans and 1.50 % in the case of base rate loans.

Commencing on September 30, 2017, the Initial Term Loan amortizes in equal quarterly installments equal to 0.25 % of the original principal amount of the Initial Term Loan, with the balance payable on the maturity date.

The Initial Term Loan has a term of seven years and will mature on May 12, 2024, at which time all outstanding principal and accrued and unpaid interest on the Initial Term Loan is due.

The Company is also required to pay fees customary for a credit facility of this size and type.

The Company is required to make mandatory prepayments of the outstanding principal amount of term loans under the credit agreement with the net cash proceeds from the disposition of certain assets and the receipt of insurance proceeds upon certain casualty and condemnation events, in each case, to the extent not reinvested within a specified time period, from excess cash flow beyond stated threshold amounts, and from the incurrence of certain indebtedness.

The Company has the right to prepay its term loans under the credit agreement, in whole or in part, at any time without premium or penalty, subject to certain limitations and a 1.0% soft call premium applicable during the first six months of the loan term.

The Company exercised its right to prepay and made aggregate prepayments of principal of $ 213.0 million from origination of the Initial Term Loan through March 31, 2021.

The Company’s obligations under the credit agreement are required to be guaranteed by certain of its domestic subsidiaries meeting materiality thresholds set forth in the credit agreement.

Such obligations, including the guaranties, are secured by substantially all of the assets of the Company and the subsidiary guarantors pursuant to a security agreement with the collateral agent.

The credit agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its restricted subsidiaries to, among other things, incur debt, grant liens, undergo certain fundamental changes, make investments, make certain restricted payments, and sell assets, in each case, subject to limitations and exceptions.

As of March 31, 2021, the Company was in compliance with such covenants.

The credit agreement also contains customary events of default that include, among other things, certain payment defaults, cross defaults to other indebtedness, covenant defaults, change in control defaults, judgment defaults, and bankruptcy and insolvency defaults.

If an event of default exists, the lenders may require immediate payment of all obligations under the credit agreement, and may exercise certain other rights and remedies provided for under the credit agreement, the other loan documents and applicable law.

The debt is carried at its principal amount, net of unamortized debt discount and issuance costs, and is not adjusted to fair value each period.

The issuance date fair value of the liability component of the debt in the amount of $ 398.5 million was determined using a discounted cash flow analysis, in which the projected interest and principal payments were discounted back to the issuance date of the term loan at a market interest rate for nonconvertible debt of 4.6 %, which represents a Level 3 fair value measurement.

The debt discount of $ 2.1 million and debt issuance costs of $ 6.0 million are being amortized to interest expense using the effective interest method from the issuance date through the contractual maturity date of the term loan of May 12, 2024.

Incremental Term Loan

In connection with the acquisition of the Wi-Fi and Broadband assets business, on July 31, 2020, the Company entered into an incremental term loan agreement with certain lenders that amends the credit agreement, dated as of May 12, 2017 and provides for a secured incremental term loan facility in an aggregate principal amount of $ 175.0 million (the “Incremental Term Loan”).

The Incremental Term Loan bears interest, at the Company’s option, at an Adjusted LIBOR plus a fixed applicable margin of 4.25 % per annum or an Adjusted Base Rate plus a fixed applicable margin of 3.25 % per annum.

The Incremental Term Loan is subject to a financial covenant of an initial maximum total net leverage ratio of 3.5 to 1 which decreases to 3.0 to 1 beginning with the sixth full fiscal quarter ending after July 31, 2020.

During any period during which the Company (i) fails to maintain a public corporate rating from S&P that is equal to or higher than BB- and a public corporate rating from Moody's that is equal to or higher than Ba3 or (ii) fails to maintain a total leverage ratio of 3.0 to 1 or less, the applicable margin will increase to 4.75% in the case of LIBOR Rate loans and 3.75% in the case of Base Rate loans.

As of March 31, 2021, the Company was in compliance with such covenants.

Commencing on July 31, 2020, the Incremental Term Loan amortizes in quarterly installments of principal equal to (i) 1.25 % of the original aggregate principal amount of the Incremental Term Loan on the last day of each of the first through

“Revolving Facility,” in an aggregate principal amount of up to $ 100.0 million.

The proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement were used (i) to repay in full all outstanding indebtedness under that certain Credit Agreement dated May 12, 2017, by and among the Company, MUFG Bank Ltd., as administrative agent and MUFG Union Bank, N.A., as collateral agent and the lenders from time to time party thereto (as amended by Amendment No.

1, dated July 31, 2020 and as further amended, amended and restated, waived, supplemented or otherwise modified from time to time, the “May 12, 2017 Credit Agreement”) and (ii) to pay fees and expenses incurred in connection therewith.

The remaining proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement are available for general corporate purposes and the proceeds of the Revolving Facility may be used to finance the working capital needs and other general corporate purposes of the Company and its subsidiaries.

As of June 30, 2021, the Revolving Facility was undrawn.

The June 23, 2021 Credit Agreement permits the Company to request incremental loans in an aggregate principal amount not to exceed the sum of an amount equal to the greater of (x) $ 175.0 million and (y) 100 % of consolidated EBITDA, plus the amount of certain voluntary prepayments, plus an unlimited amount that is subject to pro forma compliance with certain first lien net leverage ratio, secured net leverage ratio and total net leverage ratio tests.

Incremental loans are subject to certain additional conditions, including obtaining additional commitments from the lenders then party to the June 23, 2021 Credit Agreement or new lenders.

Under the June 23, 2021 Credit Agreement, the Initial Term Loan bears interest, at the Company’s option, at a per annum rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50 %, (y) the prime rate then in effect and (z) an adjusted LIBOR rate determined on the basis of a one-month interest period plus 1.00 %, in each case, plus an applicable margin of 1.25 % or (ii) an adjusted LIBOR rate, subject to a floor of 0.50 %, plus an applicable margin of 2.25 %.

Loans under the Revolving Facility initially bear interest, at a per annum rate equal to either (i) a base rate (as calculated above) plus an applicable margin of 0.00 %, or (ii) an adjusted LIBOR rate (as calculated above) plus an applicable margin of 1.00 %.

Following delivery of financial statements for the Company’s fiscal quarter ending June 30, 2021, the applicable margin for loans under the Revolving Facility will range from 0.00 % to 0.75 % in the case of base rate loans and 1.00 % to 1.75 % in the case of LIBOR rate loans, in each case, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter.

The Company is required to pay commitment fees ranging from 0.175 % to 0.25 % per annum on the daily undrawn commitments under the Revolving Facility, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter.

Commencing on September 30, 2021, the Initial Term Loan under the June 23, 2021 Credit Agreement will amortize in equal quarterly installments equal to 0.25 % of the original principal amount of the Initial Term Loan under the June 23, 2021 Credit Agreement, with the balance payable on the maturity date.

The June 23, 2021 Credit Agreement contains customary provisions specifying alternative interest rate calculations to be employed at such time as LIBOR ceases to be available as a benchmark for establishing the interest rate on floating interest rate borrowings.

The Company is required to make mandatory prepayments of the outstanding principal amount of term loans under the June 23, 2021 Credit Agreement with the net cash proceeds from the disposition of certain assets and the receipt of insurance proceeds upon certain casualty and condemnation events, in each case, to the extent not reinvested within a specified time period, from excess cash flow beyond stated threshold amounts, and from the incurrence of certain indebtedness.

The Company has the right to prepay its term loans under the June 23, 2021 Credit Agreement, in whole or in part, at any time without premium or penalty, subject to certain limitations and a 1.0 % soft call premium applicable during the first six months following the closing date of the June 23, 2021 Credit Agreement.

The Initial Term Loan under the June 23, 2021 Credit Agreement will mature on June 23, 2028, at which time all outstanding principal and accrued and unpaid interest on the Initial Term Loan under the June 23, 2021 Credit Agreement must be repaid.

The Revolving Facility will mature on June 23, 2026, at which time all outstanding principal and accrued and unpaid interest under the Revolving Facility must be repaid.

The Company is also obligated to pay fees customary for a credit facility of this size and type.

The Company’s obligations under the June 23, 2021 Credit Agreement are required to be guaranteed by certain of its domestic subsidiaries meeting materiality thresholds set forth in the June 23, 2021 Credit Agreement.

Such obligations, including the guaranties, are secured by substantially all of the assets of the Company and the subsidiary guarantors pursuant to a Security Agreement, dated as of June 23, 2021, by and among the Company, the subsidiary guarantors from time to time party thereto, and Wells Fargo Bank, National Association, as collateral agent.

The June 23, 2021 Credit Agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its restricted subsidiaries to, among other things, incur debt, grant liens, undergo certain fundamental changes, make investments, make certain restricted payments, and sell assets, in each case, subject to limitations and exceptions set forth in the June 23, 2021 Credit Agreement.

The Revolving Facility also prohibits the Company from having a secured net leverage ratio in excess of 3.50 :1.00 (subject to a temporary increase to 3.75 :1.00 following the consummation of certain material permitted acquisitions) as of the last day of any fiscal quarter of the Company (commencing with the fiscal quarter ending September 30, 2021) if the aggregate borrowings under the Revolving Facility exceed 1 % of the aggregate commitments thereunder (subject to certain exceptions set forth in the June 23, 2021 Credit Agreement) as of such

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

fourth full fiscal quarters of the Company after July 31, 2020, (ii) 2.50 % of the original aggregate principal amount of the Incremental Term Loan on the last day of each of the fifth through eighth full fiscal quarters of the Company after July 31, 2020, and (iii) 3.75 % of the original aggregate principal amount of the Incremental Term Loan on the last day of each of the ninth through the eleventh full fiscal quarters of the Company after July 31, 2020.

The Incremental Term Loan has a term of three years and will mature on July 31, 2023, at which time all outstanding principal and accrued and unpaid interest on the Incremental Term Loan is due.

The Company is also required to pay fees customary for a credit facility of this size and type.

The Company has made aggregate payments of principal of $ 37.2 million to date through March 31, 2021.

As of June 30, 2021, the Company was in compliance with such covenants.

The June 23, 2021 Credit Agreement also contains customary events of default that include, among other things, certain payment defaults, cross defaults to other indebtedness, covenant defaults, change in control defaults, judgment defaults, and bankruptcy and insolvency defaults.

If an event of default exists, the lenders may require immediate payment of all obligations under the June 23, 2021 Credit Agreement and may exercise certain other rights and remedies provided for under the June 23, 2021 Credit Agreement , the other loan documents and applicable law.

The debt is carried at its principal amount, net of unamortized debt discount and issuance costs, and is not adjusted to fair value each period.

The issuance date fair value of the liability component of the debt in the amount of $ 350.2 million was determined using a discounted cash flow analysis, in which the projected interest and principal payments were discounted back to the issuance date of the term loan at a market interest rate for nonconvertible debt of 3.4 %, which represents a Level 2 fair value measurement.

The debt discount of $ 0.9 million and debt issuance costs of $ 1.8 million are being amortized to interest expense using the effective interest method from the issuance date through the contractual maturity date of the term loan of July 31, 2023.

The debt discount of $ 0.9 million and debt issuance costs of $ 2.9 million associated with the Initial Term Loan under the June 23, 2021 Credit Agreement are being amortized to interest expense using the effective interest method over its seven-year term.

Debt issuance costs of $ 0.4 million associated with the Revolving Facility are being amortized to interest expense over its five-year term.

Initial Term Loan under May 12, 2017 Credit Agreement

On May 12, 2017, the Company entered into the May 12, 2017 Credit Agreement in connection with the acquisition of Exar Corporation.

The May 12, 2017 Credit Agreement provided for an initial secured term B loan facility, or the “Initial Term Loan under the May 12, 2017 Credit Agreement,” in an aggregate principal amount of $ 425.0 million.

The May 12, 2017 Credit Agreement permitted the Company to request incremental loans in an aggregate principal amount not to exceed the sum of an amount equal to $ 160.0 million, plus the amount of certain voluntary prepayments, plus an unlimited amount that is subject to pro forma compliance with certain secured leverage ratio and total leverage ratio tests.

Incremental loans were subject to certain additional conditions, including obtaining additional commitments from the lenders then party to the credit agreement or new lenders.

Loans under the May 12, 2017 Credit Agreement bore interest, at the Company’s option, at a rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50 %, (y) the prime rate then in effect and (z) an adjusted LIBOR rate determined on the basis of a one - three - or six-month interest period, plus 1.0 % or (ii) an adjusted LIBOR rate, subject to a floor of 0.75 %, in each case, plus an applicable margin of 2.50 % in the case of LIBOR rate loans and 1.50 % in the case of base rate loans.

Commencing on September 30, 2017, the Initial Term Loan under the May 12, 2017 Credit Agreement amortized in equal quarterly installments equal to 0.25 % of the original principal amount of the Initial Term Loan under the May 12, 2017 Credit Agreement, with the balance payable on the maturity date.

The Initial Term Loan under the May 12, 2017 Credit Agreement had a term of seven years and was scheduled to mature on May 12, 2024, at which time all outstanding principal and accrued and unpaid interest on the Initial Term Loan under the May 12, 2017 Credit Agreement was due.

The Company was required to make mandatory prepayments of the outstanding principal amount of term loans under the May 12, 2017 Credit Agreement with the net cash proceeds from the disposition of certain assets and the receipt of insurance proceeds upon certain casualty and condemnation events, in each case, to the extent not reinvested within a specified time period, from excess cash flow beyond stated threshold amounts, and from the incurrence of certain indebtedness.

The Company had the right to prepay its term loans under the May 12, 2017 Credit Agreement, in whole or in part, at any time without premium or penalty, subject to certain limitations and a 1.0 % soft call premium applicable during the first six months of the loan term.

On June 23, 2021, the Company exercised its right to prepay the Initial Term Loan under the May 12, 2017 Credit Agreement and repaid the outstanding principal amount of the Initial Term Loan under the May 12, 2017 Credit Agreement, plus accrued and unpaid interest in full with the proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement.

Incremental Term Loan under May 12, 2017 Credit Agreement, As Amended

In connection with the acquisition of the Wi-Fi and Broadband assets business, on July 31, 2020, the Company entered into an incremental term loan agreement with certain lenders that amended the May 12, 2017 Credit Agreement and provided for a secured incremental term loan facility in an aggregate principal amount of $ 350.0 million (the “Incremental Term Loan”).

The Incremental Term Loan bore interest, at the Company’s option, at an Adjusted LIBOR plus a fixed applicable margin of 4.25 % per annum or an Adjusted Base Rate plus a fixed applicable margin of 3.25 % per annum.

Commencing on July 31, 2020, the Incremental Term Loan amortized in quarterly installments of principal equal to (i) 1.25 % of the original aggregate principal amount of the Incremental Term Loan on the last day of each of the first through fourth full fiscal quarters of the Company after July 31, 2020, (ii) 2.50 % of the original aggregate principal amount of the Incremental Term Loan on the last day of each of the fifth through eighth full fiscal quarters of the Company after July 31,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2020, and (iii) 3.75 % of the original aggregate principal amount of the Incremental Term Loan on the last day of each of the ninth through the eleventh full fiscal quarters of the Company after July 31, 2020.

The Incremental Term Loan had a term of three years and was scheduled to mature on July 31, 2023, at which time all outstanding principal and accrued and unpaid interest on the Incremental Term Loan was due.

On June 23, 2021, the Company exercised its right to prepay the Incremental Term Loan and repaid the outstanding principal amount of the Incremental Term Loan, plus accrued and unpaid interest in full with the proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement.

In connection with the settlement of the indebtedness under the May 12, 2017 Credit Agreement, the Company recognized an aggregate loss on debt extinguishment of $ 5.2 million consisting of unamortized debt issuance costs and discounts.

Interest Rate Swap

3 unchanged sentences

Accordingly, the Company applied cash flow hedge accounting to the interest rate swap and it was recorded at fair value as an asset or liability and the effective portion of changes in the fair value of the interest rate swap, as measured quarterly, were reported in other comprehensive income (loss) until expiration of the swap.

The decrease in fair value related to the interest rate swap liability included in other comprehensive income (loss) for the three months ended March 31, 2020 was $ 0.2 million.

The decrease in fair value related to the interest rate swap liability included in other comprehensive income (loss) for the three and six months ended June 30, 2020 was $ 0.1 million and $ 0.05 million.

Stock-Based Compensation

Employee Stock-Based Compensation Plans

At March 31, 2021, the Company had stock-based compensation awards outstanding under the following plans:

At June 30, 2021, the Company had stock-based compensation awards outstanding under the following plans:

the 2010 Equity Incentive Plan, as amended, or 2010 Plan, and the 2010 Employee Stock Purchase Plan, or ESPP.

Refer to the Company’s Annual Report for a summary of its stock-based compensation and equity plans as of December 31, 2020.

There have been no material changes to the terms of the Company’s equity incentive plans during the three months ended March 31, 2021.

As of March 31, 2021, the number of shares of common stock available for future issuance under the 2010 Plan was 16,575,503 shares.

As of March 31, 2021, the number of shares of common stock available for future issuance under the ESPP was 4,297,394 shares.

There have been no material changes to the terms of the Company’s equity incentive plans during the six months ended June 30, 2021.

As of June 30, 2021, the number of shares of common stock available for future issuance under the 2010 Plan was 15,584,343 shares.

As of June 30, 2021, the number of shares of common stock available for future issuance under the ESPP was 4,183,884 shares.

Employee Incentive Bonus

2 unchanged sentences

In connection with the Company’s bonus programs, in February 2021, the Company issued 0.5 million freely-tradable shares of the Company’s common stock in settlement of bonus awards to employees, including executives, for the 2020 performance period.

At March 31, 2021, the Company has an accrual of $ 7.2 million for bonus awards for employees for year-to-date achievement in the 2021 performance period.

At June 30, 2021, the Company has an accrual of $ 19.3 million for bonus awards for employees for year-to-date achievement in the 2021 performance period.

The Company’s compensation committee retains discretion to effect payment in cash, stock, or a combination of cash and stock.

3 unchanged sentences

The Company recognizes stock-based compensation in the consolidated statements of operations, based on the department to which the related employee reports, as follows:

Three Months Ended March 31,

(in thousands)

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(in thousands) (in thousands)

Cost of net revenue $ 148 $ 126 $ 317 $ 274

2 unchanged sentences

$ 13,966 $ 12,085 $ 26,921 $ 18,912

The total unrecognized compensation cost related to unvested restricted stock units and restricted stock awards as of March 31, 2021 was $ 72.0 million, and the weighted average period over which these equity awards are expected to vest is 2.68 years.

The total unrecognized compensation cost related to unvested performance-based restricted stock units as of March 31, 2021 was $ 9.4 million, and the weighted average period over which these equity awards are expected to vest is 1.40 years.

The total unrecognized compensation cost related to unvested stock options as of March 31, 2021 was $ 0.9 million, and the weighted average period over which these equity awards are expected to vest is 1.26 years.

The total unrecognized compensation cost related to unvested restricted stock units as of June 30, 2021 was $ 98.9 million, and the weighted average period over which these equity awards are expected to vest is 2.81 years.

The total unrecognized compensation cost related to unvested performance-based restricted stock units as of June 30, 2021 was $ 24.7 million, and the weighted average period over which these equity awards are expected to vest is 1.41 years.

The total unrecognized compensation cost related to unvested stock options as of June 30, 2021 was $ 0.7 million, and the weighted average period over which these equity awards are expected to vest is 1.02 years.

Restricted Stock Units

6 unchanged sentences

Canceled ( 327 ) 23.26

Outstanding at March 31, 2021 5,693 $ 20.42

Outstanding at June 30, 2021 5,852 $ 23.75

Performance-Based Restricted Stock Units

2 unchanged sentences

The maximum percentage for a particular metric is 250 % of the target number of units subject to the award related to that metric, however, vesting of the performance stock units is capped at 30 % and 100 %, respectively, of the target number of units subject to the award in years one and two, respectively, of the three-year performance period.

As of March 31, 2021, the Company believes that it is probable that it will achieve certain performance metrics specified in the respective award agreements based on its expected revenue and non-GAAP diluted EPS results over the performance periods and calculated growth rates relative to its peers’ expected results based on data available, as defined in the respective award agreements.

As of June 30, 2021, the Company believes that it is probable that it will achieve certain performance metrics specified in the respective award agreements based on its expected revenue and non-GAAP diluted EPS results over the performance periods and calculated growth rates relative to its peers’ expected results based on data available, as defined in the respective award agreements.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of the Company’s performance-based restricted stock unit activity is as follows:

3 unchanged sentences

Vested ( 311 ) 16.74

Outstanding at March 31, 2021 1,441 $ 13.54

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Canceled — 11.67

Outstanding at June 30, 2021 2,010 $ 19.84

________________

(1) Number of shares granted is based on the maximum percentage achievable in the performance-based restricted stock unit award.

Employee Stock Purchase Rights and Stock Options

Employee Stock Purchase Rights

During the three months ended March 31, 2021 and 2020, there were no shares of common stock purchased under the ESPP.

During the six months ended June 30, 2021 and 2020, there were 113,510 and 161,171 shares respectively, of common stock purchased under the ESPP.

The fair values of employee stock purchase rights were estimated using the Black-Scholes option pricing model at their respective grant date using the following assumptions:

Three Months Ended March 31,

Six Months Ended June 30,

Weighted-average grant date fair value per share $ 10.85 $ 6.41

13 unchanged sentences

Exercised ( 360 ) 11.79

Outstanding at March 31, 2021 701 $ 14.82 2.75 $ 13,509

Vested and expected to vest at March 31, 2021 701 $ 14.82 2.75 $ 13,509

Exercisable at March 31, 2021 589 $ 14.13 2.44 $ 11,758

No stock options were granted by the Company during the three months ended March 31, 2021.

The intrinsic value of stock options exercised was $ 2.3 million and $ 0.3 million in the three months ended March 31, 2021 and 2020, respectively.

Cash received from exercise of stock options was $ 1.3 million and $ 0.5 million during the three months ended March 31, 2021 and 2020, respectively.

The tax benefit from stock options exercised was $ 2.7 million and $ 0.3 million during the three months ended March 31, 2021 and 2020, respectively.

Outstanding at June 30, 2021 437 $ 17.04 3.69 $ 11,119

Vested and expected to vest at June 30, 2021 437 $ 17.04 3.69 $ 11,119

Exercisable at June 30, 2021 346 $ 16.68 3.59 $ 8,933

No stock options were granted by the Company during the six months ended June 30, 2021.

The intrinsic value of stock options exercised was $ 6.7 million and $ 2.8 million in the three months ended June 30, 2021 and 2020, respectively.

The intrinsic value of stock options exercised was $ 9 million and $ 3.2 million in the six months ended June 30, 2021 and 2020, respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cash received from exercise of stock options was $ 2.6 million and $ 2.2 million during the three months ended June 30, 2021 and 2020, respectively.

Cash received from exercise of stock options was $ 3.9 million and $ 2.6 million during the six months ended June 30, 2021 and 2020, respectively.

The tax benefit from stock options exercised was $ 10.6 million and $ 2.9 million during the three months ended June 30, 2021 and 2020, respectively.

The tax benefit from stock options exercised was $ 13.3 million and $ 3.2 million during the six months ended June 30, 2021 and 2020, respectively.

The provision for income taxes primarily relates to projected federal, state, and foreign income taxes.

1 unchanged sentence

In addition, the tax effects of certain significant or unusual items are recognized discretely in the quarter during which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company utilizes the asset and liability method of accounting for income taxes, under which deferred taxes are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the temporary differences reverse.

4 unchanged sentences

The Company does not incur expense or benefit in certain tax free jurisdictions in which it operates.

The Company recorded an income tax provision of $ 1.8 million in the three months ended March 31, 2021 and an income tax benefit of $ 6.7 million in the three months ended March 31, 2020.

The income tax provision in the three months ended March 31, 2021 and 2020, each primarily related to the mix of pre-tax income among jurisdictions, permanent tax items including the global minimum tax and stock based compensation, excess tax benefits related to stock-based compensation, and release of certain reserves for uncertain tax positions under ASC 740-10.

The Company recorded an income tax benefit of $ 8.0 million in the three months ended June 30, 2021 and an income tax benefit of $ 3.2 million in the three months ended June 30, 2020.

The Company recorded an income tax benefit of $ 6.2 million in the six months ended June 30, 2021 and an income tax benefit of $ 9.9 million in the six months ended June 30, 2020.

The income tax benefit in the three and six months ended June 30, 2021 and 2020, each primarily relate to the mix of pre-tax income among jurisdictions, excess tax benefits related to stock-based compensation, and release of uncertain tax positions under ASC 740-10.

Income tax positions must meet a more-likely-than-not threshold to be recognized.

2 unchanged sentences

The Company records potential penalties and interest accrued related to unrecognized tax benefits within the consolidated statements of operations as income tax expense.

During the three months ended March 31, 2021, the Company’s unrecognized tax benefits increased by $ 0.3 million.

During the six months ended June 30, 2021, the Company’s unrecognized tax benefits increased by $ 0.4 million.

The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months.

Accrued interest and penalties associated with uncertain tax positions as of March 31, 2021 were approximately $ 0.5 million and $ 0.04 million, respectively.

Accrued interest and penalties associated with uncertain tax positions as of June 30, 2021 were approximately $ 0.4 million and $ 0.04 million, respectively.

The Company is subject to federal and state income tax in the United States and is also subject to income tax in certain other foreign tax jurisdictions.

At March 31, 2021, the statutes of limitations for the assessment of federal, state, and foreign income taxes are closed for the years before 2017, 2016, and 2015, respectively.

At June 30, 2021, the statutes of limitations for the assessment of federal, state, and foreign income taxes are closed for the years before 2017, 2016, and 2015, respectively.

The Company’s subsidiary in Singapore operates under certain tax incentives in Singapore, which are generally effective through March 2022 and may be extended through March 2027, and are conditional upon meeting certain employment and investment thresholds in Singapore.

Under the incentives, qualifying income derived from certain sales of the Company’s integrated circuits is taxed at a concessionary rate over the incentive period, and there are reduced Singapore withholding taxes on certain intercompany royalties during the incentive period.

Primarily because of the Company’s Singapore net operating losses and a full valuation allowance in Singapore, the incentives did not have a material impact on the Company’s income tax provision in the three months ended March 31, 2021 and 2020.

Primarily because of the Company’s Singapore net operating

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

losses and a full valuation allowance in Singapore, the incentives did not have a material impact on the Company’s income tax benefit in the six months ended June 30, 2021 and 2020.

Concentration of Credit Risk, Significant Customers and Geographic Information

8 unchanged sentences

The Company makes periodic evaluations of the credit worthiness of its customers.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Customers comprising greater than 10% of net revenues for each of the periods presented are as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Percentage of total net revenue

2 unchanged sentences

Customer C (distributor) * 16 % * 17 %

Customer D (distributor) * 18 %

____________________________

1 unchanged sentence

The following table presents balances that are 10% or greater of accounts receivable, based on the Company’s billings to its customers.

March 31, December 31,

June 30, December 31,

Percentage of gross accounts receivable

Customer C (distributor) 11 % 13 %

Customer E (direct) 10 % *

Customer D (distributor) * 13 %

Customer B (direct) 14 % 17 %

Customer E (direct) 10 % *

____________________________

2 unchanged sentences

Suppliers comprising greater than 10% of total inventory purchases are as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Vendor A 38 % * 41 % *

4 unchanged sentences

* Represents less than 10% of the inventory purchases for the respective period.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Geographic Information

The Company’s consolidated net revenues by geographic area based on ship-to location are as follows (in thousands):

Three Months Ended March 31,

Amount % of total net revenue Amount % of total net revenue

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Amount % of total net revenue Amount % of total net revenue Amount % of total net revenue Amount % of total net revenue

Asia $ 169,088 82 % $ 54,095 83 % $ 340,248 82 % $ 105,480 83 %

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Total $ 205,376 100 % $ 65,220 100 % $ 414,735 100 % $ 127,247 100 %

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The products shipped to individual countries or territories representing greater than 10% of net revenue for each of the periods presented are as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Percentage of total net revenue

Hong Kong 44 % 42 % 40 % 46 %

China * 11 % 11 % 10 %

Vietnam 14 % * 13 % *

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Long-lived assets, which consists of property and equipment, net, leased right-of-use assets, intangible assets, net, and goodwill by geographic area are as follows (in thousands):

March 31, December 31,

June 30, December 31,

Amount % of total Amount % of total

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Total $ 548,743 100 % $ 571,450 100 %

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue from Contracts with Customers

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The table below presents disaggregated net revenues by market (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020 (1)

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_______________

(1) The Company’s net revenue by market categories were revised during the fourth quarter of 2020 to align with changing end-market conditions, the Company’s current business priorities, as well as spending requirements and growth opportunities in the

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

four categories.

The broadband category includes the Company’s prior connected home category plus the SoC business from the Wi-Fi and Broadband assets business, but excludes wired connectivity.

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The 2020 amounts were adjusted to reflect the change in market categories.

Revenues from sales through the Company’s distributors accounted for 44 % and 61 % of net revenue for the three months ended March 31, 2021 and 2020, respectively.

Revenues from sales through the Company’s distributors accounted for 45 % and 64 % of net revenue for the three months ended June 30, 2021 and 2020, respectively.

Revenues from sales through the Company’s distributors accounted for 45 % and 63 % of net revenue for the six months ended June 30, 2021 and 2020, respectively.

Contract Liabilities

As of March 31, 2021, customer contract liabilities consisted of advanced payments received for which performance obligations have not been completed and estimates of obligations to deliver rebates to customers in the form of units of products and were approximately $ 1.8 million.

As of June 30, 2021, customer contract liabilities consisted primarily of advanced payments received for which performance obligations have not been completed of approximately $ 1.3 million.

As of December 31, 2020, customer contract liabilities consisted of estimates of obligations to deliver rebates to customers in the form of units of products and were approximately $ 0.03 million.

Revenue recognized in each of the three months ended March 31, 2021 and 2020 that was included in the contract liability balance as of the beginning of each of those respective periods was immaterial.

There were no material changes in the contract liabilities balance during the three months ended March 31, 2021 and 2020.

Revenue recognized in each of the three and six months ended June 30, 2021 and 2020 that was included in the contract liability balance as of the beginning of each of those respective periods was immaterial.

There were no material changes in the contract liabilities balance during the three and six months ended June 30, 2021 and 2020.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Obligations to Customers for Price Adjustments and Returns and Assets for Right-of-Returns

As of March 31, 2021 and December 31, 2020, obligations to customers consisting of estimates of price protection rights offered to the Company’s end customers totaled $ 55.0 million and $ 47.8 million, respectively, and are included in accrued price protection liability in the consolidated balance sheets.

As of June 30, 2021 and December 31, 2020, obligations to customers consisting of estimates of price protection rights offered to the Company’s end customers totaled $ 54.7 million and $ 47.8 million, respectively, and are included in accrued price protection liability in the consolidated balance sheets.

For activity in this account, including amounts included in net revenue, refer to Note 7.

Other obligations to customers representing estimates of price adjustments to be claimed by distributors upon sell-through of their inventory to their end customer and estimates of stock rotation returns to be claimed by distributors on products sold as of March 31, 2021 were $ 19.3 million and $ 2.6 million, respectively, and as of December 31, 2020 were $ 10.3 million and $ 2.0 million, respectively, and are included in accrued expenses and other current liabilities in the consolidated balance sheets (Note 7).

The increase in revenue in the three months ended March 31, 2021 and 2020 from net changes in transaction prices for amounts included in obligations to customers for price adjustments as of the beginning of those respective periods was not material.

As of March 31, 2021 and December 31, 2020, right of return assets under customer contracts representing the estimates of product inventory the Company expects to receive from customers in stock rotation returns were approximately $ 1.0 million and $ 0.6 million, respectively.

Other obligations to customers representing estimates of price adjustments to be claimed by distributors upon sell-through of their inventory to their end customer and estimates of stock rotation returns to be claimed by distributors on products sold as of June 30, 2021 were $ 16.2 million and $ 2.8 million, respectively, and as of December 31, 2020 were $ 10.3 million and $ 2.0 million, respectively, and are included in accrued expenses and other current liabilities in the consolidated balance sheets (Note 7).

The increase in revenue in the three and six months ended June 30, 2021 and 2020 from net changes in transaction prices for amounts included in obligations to customers for price adjustments as of the beginning of those respective periods was not material.

As of June 30, 2021 and December 31, 2020, right of return assets under customer contracts representing the estimates of product inventory the Company expects to receive from customers in stock rotation returns were approximately $ 1.0 million and $ 0.6 million, respectively.

Right of return assets are included in inventory in the consolidated balance sheets.

As of March 31, 2021 and December 31, 2020, there were no impairment losses recorded on customer accounts receivable.

As of June 30, 2021 and December 31, 2020, there were no impairment losses recorded on customer accounts receivable.

Operating Leases

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Since the implicit rate of such leases is unknown and the Company is not reasonably certain to renew its leases, the Company has elected to apply a collateralized incremental borrowing rate to facility leases on the original lease term in calculating the present value of future lease payments.

As of March 31, 2021 and December 31, 2020, the weighted average discount rate for operating leases was 3.9 % and 4.0 %, respectively, and the weighted average remaining lease term for operating leases was 4.6 years as of the end of each of these periods.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below presents aggregate future minimum payments due under leases, reconciled to total lease liabilities included in the consolidated balance sheet as of March 31, 2021:

As of June 30, 2021 and December 31, 2020, the weighted average discount rate for operating leases was 3.3 % and 4.0 %, respectively, and the weighted average remaining lease term for operating leases was 4.6 years as of the end of each of these periods.

The table below presents aggregate future minimum payments due under leases, reconciled to total lease liabilities included in the consolidated balance sheet as of June 30, 2021:

Operating Leases

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Long-term lease liabilities $ 20,445

Operating lease cost was $ 2.5 million and $ 0.9 million for the three months ended March 31, 2021 and 2020, respectively.

Short-term lease costs for the three months ended March 31, 2021 and 2020 were not material.

There were $ 5.2 million right-of-use assets obtained in exchange for new lease liabilities for the three months ended March 31, 2021.

There were no right-of-use assets obtained in exchange for new lease liabilities for the three months ended March 31, 2020.

The Company has subleased a facility that it ceased using in connection with a restructuring plan (Note 4).

Such sublease expires in 2021, and future minimum rental income under the sublease is $ 0.04 million.

Total sublease income related to leased facilities the Company ceased using in connection with a restructuring plan for the three months ended March 31, 2021 and 2020 was approximately $ 0.04 million and $ 0.2 million, respectively (Note 4).

Operating lease cost was $ 2.3 million and $ 0.9 million for the three months ended June 30, 2021 and 2020, respectively.

Operating lease cost was $ 4.8 million and $ 1.8 million for the six months ended June 30, 2021 and 2020, respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Short-term lease costs for the three and six months ended June 30, 2021 and 2020 were not material.

There were $ 5.2 million right-of-use assets obtained in exchange for new lease liabilities for the three and six months ended June 30, 2021.

There were no right-of-use assets obtained in exchange for new lease liabilities for the three and six months ended June 30, 2020.

Employee Defined Benefit Retirement Plans

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In connection with the July 31, 2020 acquisition of the Wi-Fi and Broadband assets business (Note 3), the Company assumed an obligation of $ 7.9 million of the Wi-Fi and Broadband assets business associated with certain defined benefit retirement plans, including a pension plan.

As of March 31, 2021 and December 31, 2020, the defined benefit obligation was $ 6.2 million and $ 6.4 million, respectively.

As of June 30, 2021 and December 31, 2020, the defined benefit obligation was $ 6.3 million and $ 6.4 million, respectively.

The benefit is based on a formula applied to eligible employee earnings.

Net periodic benefit costs were $ 0.1 million for the three months ended March 31, 2021 and were recorded to research and development expenses in the consolidated statements of operations.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net periodic benefit costs were $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2021, respectively, and were recorded to research and development expenses in the consolidated statements of operations.

Commitments and Contingencies

Inventory Purchase and Other Contractual Obligations

As of March 31, 2021, future minimum payments under inventory purchase and other obligations are as follows:

As of June 30, 2021, future minimum payments under inventory purchase and other obligations are as follows:

Inventory Purchase Obligations Other Obligations Total

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Total minimum payments $ 154,668 $ 40,802 $ 195,470

Other obligations consist of deferred payments related to the NanoSemi merger (Note 3) and contractual payments due for software licenses.

Our inventory purchase obligations and other obligations increased by $ 66.1 million to $ 187.8 million as of March 31, 2021, from $ 121.7 million as of December 31, 2020 primarily as a result of increased orders of software licenses and inventory placed with our vendors during the period (Note 3).

Other obligations consist of contractual payments due for software licenses.

Our inventory purchase obligations and other obligations increased by $ 73.8 million to $ 195.5 million as of June 30, 2021, from $ 121.7 million as of December 31, 2020 primarily as a result of increased orders of inventory placed with our vendors during the period, partially offset by a decrease in software license obligations (Note 3).

Jointly Funded Research and Development

In the second quarter of 2021, the Company entered into a contract for a jointly funded research and development project to develop technology that may be commercialized into a product in the future.

As the Company may be required to repay all or a portion of the funds provided by the other party under certain conditions, total funds received to date from the other party of $ 3.8 million has been recorded in other long-term liabilities.

Additional amounts under the contract are tied to certain milestones and will also be recorded as a long-term liability as payment due under such milestones are received.

The Company currently expects to de-recognize the liability when the contingencies associated with the repayment conditions have been resolved.

Other Matters

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The Company believes that there are no currently pending litigation matters that, if determined adversely to the Company’s interests, would have a material effect on the Company’s financial position, results of operations, or cash flows or that would not be covered by the Company’s existing liability insurance.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Repurchases

3 unchanged sentences

The share repurchase program does not obligate the Company to make any repurchases and may be modified, suspended, or terminated by the Company at any time without prior notice.

During the three months ended March 31, 2021, the Company repurchased 75,000 shares of its common stock at a weighted average price of $ 35.6157 per share, an aggregate value of approximately $ 2.7 million, under the repurchase program.

At March 31, 2021, the aggregate value of common stock repurchased under the program was approximately $ 2.7 million and approximately $ 97.3 million remained available for repurchase under the program.

During the three and six months ended June 30, 2021, the Company repurchased 119,900 and 194,900 shares, respectively, of its common stock at a weighted average price of $ 37.2083 and $ 36.5954 per share, respectively, at an aggregate value of approximately $ 4.5 million and $ 7.1 million, respectively, under the repurchase program.

At June 30, 2021, the aggregate value of common stock repurchased under the program was approximately $ 7.1 million and approximately $ 92.9 million remained available for repurchase under the program.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements