What changed in this filing

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Item 1. Financial Statements

2023-07-27 compared with 2023-04-26 · 263 added, 198 removed, 641 unchanged (42% of the section changed)

38 unchanged sentences

550,000 shares authorized;

79,981 shares issued and outstanding at March 31, 2023 and 78,745 shares issued and outstanding December 31, 2022

80,930 shares issued and outstanding at June 30, 2023 and 78,745 shares issued and outstanding December 31, 2022

Additional paid-in capital 788,528 722,778

5 unchanged sentences

MAXLINEAR, INC.

CONSOLIDATED STATEMENTS OF INCOME

CONSOLIDATED STATEMENTS OF OPERATIONS

in thousands, except per share data)

Three Months Ended March 31,

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

2023 2022 2023 2022

Net revenue $ 183,938 $ 280,009 $ 432,380 $ 543,936

7 unchanged sentences

Total operating expenses 108,810 125,344 221,840 231,807

Income from operations 27,277 48,127

Income (loss) from operations ( 5,937 ) 39,007 21,340 87,134

Interest income 1,903 82 2,536 113

2 unchanged sentences

Total other income (expense), net 1,177 4,845 ( 1,001 ) 1,757

Income before income taxes 25,099 45,039

Income tax provision 15,566 11,453

Net income $ 9,533 $ 33,586

Net income per share:

Income (loss) before income taxes ( 4,760 ) 43,852 20,339 88,891

Income tax provision (benefit) ( 409 ) 11,886 15,157 23,339

Net income (loss) $ ( 4,351 ) $ 31,966 $ 5,182 $ 65,552

Net income (loss) per share:

Basic $ ( 0.05 ) $ 0.41 $ 0.06 $ 0.85

Diluted $ ( 0.05 ) $ 0.40 $ 0.06 $ 0.81

Shares used to compute net income per share:

Shares used to compute net income (loss) per share:

Basic 80,446 77,858 79,961 77,527

2 unchanged sentences

MAXLINEAR, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

in thousands)

Three Months Ended March 31,

Net income $ 9,533 $ 33,586

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

2023 2022 2023 2022

Net income (loss) $ ( 4,351 ) $ 31,966 $ 5,182 $ 65,552

Other comprehensive loss, net of tax:

Foreign currency translation adjustments, net of tax benefit of $ 71 for the three months ended March 31, 2023 and net of tax expense of $ 2 for the three months ended March 31, 2022, respectively

Foreign currency translation adjustments, net of tax benefit of $ 94 and $ 165 for the three and six months ended June 30, 2023, respectively, and net of tax benefit of $ 61 and $ 59 for the three and six months ended June 30, 2022, respectively

( 1,078 ) ( 3,988 ) ( 1,270 ) ( 5,063 )

Other comprehensive loss ( 1,078 ) ( 3,988 ) ( 1,270 ) ( 5,063 )

Total comprehensive income $ 9,341 $ 32,511

Total comprehensive income (loss) $ ( 5,429 ) $ 27,978 $ 3,912 $ 60,489

See accompanying notes.

1 unchanged sentence

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

FISCAL QUARTER ENDED MARCH 31, 2023

FISCAL QUARTERS ENDED JUNE 30, 2023

in thousands)

12 unchanged sentences

Balance at March 31, 2023 79,981 8 771,164 ( 1,213 ) ( 35,847 ) 734,112

Common stock issued pursuant to equity awards, net 808 — ( 2,752 ) — — ( 2,752 )

Employee stock purchase plan 141 — 2,989 — — 2,989

Stock-based compensation — — 17,127 — — 17,127

Other comprehensive loss — — — ( 1,078 ) — ( 1,078 )

Net loss — — — — ( 4,351 ) ( 4,351 )

Balance at June 30, 2023 80,930 $ 8 $ 788,528 $ ( 2,291 ) $ ( 40,198 ) $ 746,047

MAXLINEAR, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

FISCAL QUARTER ENDED MARCH 31, 2022

FISCAL QUARTERS ENDED JUNE 30, 2022

in thousands)

13 unchanged sentences

Balance at March 31, 2022 77,375 8 663,622 1,050 ( 136,834 ) 527,846

Common stock issued pursuant to equity awards, net 999 — 310 — — 310

Minimum tax withholding on common stock issued — — ( 3,698 ) — — ( 3,698 )

Repurchase of common stock ( 124 ) — ( 5,214 ) — — ( 5,214 )

Employee stock purchase plan 83 — 2,911 — — 2,911

Stock-based compensation — — 19,464 — — 19,464

Other comprehensive loss — — — ( 3,988 ) — ( 3,988 )

Net income — — — — 31,966 31,966

Balance at June 30, 2022 78,333 $ 8 $ 677,395 $ ( 2,938 ) $ ( 104,868 ) $ 569,597

See accompanying notes.

2 unchanged sentences

in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating Activities

7 unchanged sentences

Loss on disposal of property and equipment 2,041 164

Unrealized holding (gain) loss on investments ( 152 ) 954

Unrealized holding gain on investments ( 1,959 ) ( 3,859 )

Impairment of leased right-of-use assets — 462

(Gain) loss on foreign currency 153 ( 2,675 )

54 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, 2022 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 1, 2023, or the Annual Report.

Interim results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023.

Interim results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023.

The functional currency of certain foreign subsidiaries is the local currency.

6 unchanged sentences

Actual results could differ from those estimates.

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 26, 2023, 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 26, 2023, the issuance date of this Quarterly Report on Form 10-Q.

Actual results could differ from those estimates.

1 unchanged sentence

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

There have been no significant changes to the Company’s significant accounting policies during the three months ended March 31, 2023.

There have been no significant changes to the Company’s significant accounting policies during the six months ended June 30, 2023.

MAXLINEAR, INC.

8 unchanged sentences

Net Income Per Share

Basic earnings per share, or EPS, is calculated by dividing net income by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents.

Diluted EPS is computed by dividing net income by the weighted-average number of common shares outstanding for the period and the weighted-average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method.

Basic earnings per share, or EPS, is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents.

Diluted EPS is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period and the weighted-average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method.

For purposes of this calculation, common stock options, restricted stock units and restricted stock awards are considered to be common stock equivalents and are only included in the calculation of diluted EPS when their effect is dilutive.

1 unchanged sentence

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,

2023 2022 2023 2022

(in thousands, except per share amounts)

Net income $ 9,533 $ 33,586

Net income (loss) $ ( 4,351 ) $ 31,966 $ 5,182 $ 65,552

Weighted average common shares outstanding—basic 80,446 77,858 79,961 77,527

1 unchanged sentence

Weighted average common shares outstanding—diluted 80,446 80,279 81,520 80,462

Net income per share:

Net income (loss) per share:

Basic $ ( 0.05 ) $ 0.41 $ 0.06 $ 0.85

Diluted $ ( 0.05 ) $ 0.40 $ 0.06 $ 0.81

For the three months ended March 31, 2023 and 2022, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 2.2 million and 0.9 million, respectively, from the calculation of diluted net income per share due to their anti-dilutive nature.

For the three months ended June 30, 2023 and 2022, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 5.4 million and 1.0 million, respectively, from the calculation of diluted net income (loss) per share due to their anti-dilutive nature.

For the six months ended June 30, 2023 and 2022, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 3.2 million and 1.0 million, respectively, from the calculation of diluted net income (loss) per share due to their anti-dilutive nature.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Business Combinations

2 unchanged sentences

Silicon Motion is a provider of NAND flash controllers for solid state drives, or SSDs, and other solid state storage devices.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Under the terms of the Merger Agreement, the transaction consideration will consist of $ 93.54 in cash and 0.388 shares of MaxLinear common stock for each Silicon Motion American Depositary Share, or ADS, (other than ADSs representing certain customary excluded shares) and $ 23.385 in cash and 0.097 shares of MaxLinear common stock for each Silicon Motion ordinary share not represented by an ADS (other than certain customary excluded shares), in each case, with cash in lieu of any fractional shares of MaxLinear common stock as set forth in the Merger Agreement.

Upon closing of the transaction, the current MaxLinear stockholders are expected to own approximately 86 % of the combined company and former Silicon Motion securityholders are expected to own approximately 14 % of the combined company.

Based on the closing price of MaxLinear shares on May 4, 2022, the implied value of the total transaction consideration for Silicon Motion is approximately $ 4.3 billion.

MaxLinear may fund up to $ 3.5 billion of cash consideration with cash on hand and fully committed debt financing from Wells Fargo Bank, N.A., or Wells Fargo Bank, and other lenders as described below.

MaxLinear will also assume Silicon Motion’s vested and unvested employee stock-based compensation awards.

The merger is not subject to any financing conditions but is pending satisfaction of customary closing conditions, including antitrust approval in the People’s Republic of China, or China.

On June 27, 2022, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or HSR, waiting period expired with respect to the pending merger;

however, if the merger is not consummated by June 27, 2023, the parties will need to re-file under the HSR Act.

On July 26, 2023, MaxLinear provided notice to Silicon Motion that it has terminated the Merger Agreement and MaxLinear is relieved of its obligations to close because, among other reasons, (i) certain conditions to closing set forth in the Merger Agreement are not satisfied and are incapable of being satisfied, (ii) Silicon Motion has suffered a Material Adverse Effect that is continuing, (iii) Silicon Motion is in material breach of representations, warranties, covenants, and agreements in the Merger Agreement that give rise to the right of the Company to terminate, and (iv) in any event, the First Extended Outside Date has passed and was not automatically extended because certain conditions in Article 6 of the Merger Agreement were not satisfied or waived as of May 5, 2023.

Under the terms of the Merger Agreement, MaxLinear is not required to pay a break-up fee or other fee as a result of the termination of the Merger Agreement.

Undefined capitalized terms in this paragraph have the same meaning as in the Merger Agreement.

Under the terms of the Merger Agreement, the transaction consideration consisted of $ 93.54 in cash and 0.388 shares of MaxLinear common stock for each Silicon Motion American Depositary Share, or ADS, (other than ADSs representing certain customary excluded shares) and $ 23.385 in cash and 0.097 shares of MaxLinear common stock for each Silicon Motion ordinary share not represented by an ADS (other than certain customary excluded shares), in each case, with cash in lieu of any fractional shares of MaxLinear common stock as set forth in the Merger Agreement.

Upon closing of the terminated transaction, the current MaxLinear stockholders were expected to own approximately 86 % of the combined company and former Silicon Motion securityholders were expected to own approximately 14 % of the combined company.

Based on the closing price of MaxLinear shares on May 4, 2022, the implied value of the total transaction consideration for Silicon Motion was approximately $ 3.8 billion.

MaxLinear could have funded up to $ 3.1 billion of cash consideration with cash on hand and fully committed debt financing from Wells Fargo Bank, N.A., or Wells Fargo Bank, and other lenders as described below, which financing commitments were terminated upon termination of the Merger Agreement.

Under the terms of the Merger Agreement, MaxLinear was required to assume Silicon Motion’s vested and unvested employee stock-based compensation awards.

The merger was not subject to any financing conditions but was pending satisfaction of customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, or HSR Act.

On July 26, 2023, regulatory approval was received from the State Administration for Market Regulations, or SAMR, in China.

Under the Merger Agreement, under certain circumstances, we could have been required to pay Silicon Motion a termination fee of $ 160 million if the Merger Agreement is terminated by MaxLinear or Silicon Motion as a result of a court or other competent authority issuing an order pursuant to regulatory law permanently prohibiting the consummation of the merger, or the merger is not consummated by the Outside Date, which, under the terms of the Merger Agreement, would have been automatically extended to August 7, 2023, if, as of May 5, 2023, all conditions to close were met, other than certain exceptions related to regulatory matters.

On June 27, 2022, the HSR Act waiting period expired with respect to the previously pending merger;

however, since the merger was not consummated by June 27, 2023, MaxLinear and Silicon Motion re-filed under the HSR Act on June 28, 2023.

On July 13, 2022, the registration statement on Form S-4 was declared effective by the SEC.

On August 31, 2022, the Silicon Motion securityholders approved the merger at the extraordinary general meeting.

On June 17, 2022, MaxLinear entered into an amended and restated commitment letter with Wells Fargo Bank and other lenders pursuant to which, subject to the terms and conditions set forth therein, the lenders have committed to provide (i) a senior secured term B loan facility in an aggregate principal amount of up to $ 2.7375 billion, or the Term B Loan Facility, (ii) a senior secured term A loan facility in an aggregate principal amount of up to $ 512.5 million, or the Term A Loan Facility and (iii) a senior secured revolving credit facility in an aggregate principal amount of up to $ 250.0 million, which we collectively refer to as the Senior Secured Credit Facilities.

The funding of the Senior Secured Credit Facilities is contingent on the satisfaction of customary conditions, including (i) the execution and delivery of definitive documentation with respect to credit facilities in accordance with the terms in the amended and restated commitment letter, and (ii) the consummation of the acquisition by MaxLinear of Silicon Motion in accordance with the Merger Agreement.

A portion of the proceeds from the Senior Secured Credit Facilities will be used to repay existing debt (Note 8) in full.

On October 24, 2022, MaxLinear entered into a second amended and restated commitment letter with Wells Fargo Bank and other lenders, which allows for additional commitments in respect of the Term A Loan Facility to be effected by way of the joinder of additional commitment parties to the second amended and restated commitment letter, and allows for an increase in the Term Loan A Loan Facility on a dollar-for-dollar basis by a corresponding decrease in the amount of the Term Loan B facility.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On June 17, 2022, MaxLinear entered into an amended and restated commitment letter with Wells Fargo Bank and other lenders pursuant to which, subject to the terms and conditions set forth therein, the lenders committed to provide (i) a senior secured term B loan facility in an aggregate principal amount of up to $ 2.7375 billion, or the Term B Loan Facility, (ii) a senior secured term A loan facility in an aggregate principal amount of up to $ 512.5 million, or the Term A Loan Facility and (iii) a senior secured revolving credit facility in an aggregate principal amount of up to $ 250.0 million, which we collectively refer to as the Senior Secured Credit Facilities.

The funding of the Senior Secured Credit Facilities was contingent on the satisfaction of customary conditions, including (i) the execution and delivery of definitive documentation with respect to credit facilities in accordance with the terms in the amended and restated commitment letter, and (ii) the consummation of the acquisition by MaxLinear of Silicon Motion in accordance with the Merger Agreement.

A portion of the proceeds from the Senior Secured Credit Facilities could have been used to repay existing debt (Note 8) in full.

On October 24, 2022, MaxLinear entered into a second amended and restated commitment letter with Wells Fargo Bank and other lenders, which allowed for additional commitments in respect of the Term A Loan Facility to be effected by way of the joinder of additional commitment parties to the second amended and restated commitment letter, and allowed for an increase in the Term Loan A Loan Facility on a dollar-for-dollar basis by a corresponding decrease in the amount of the Term Loan B facility.

In connection with the termination of the merger agreement, the second amended and restated commitment letter with Wells Fargo Bank and other lenders was terminated.

Acquisition of Company Y

10 unchanged sentences

_________________

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

business’s satisfying certain financial and personnel objectives by June 17, 2024 under the Purchase Agreement.

(1) The fair value of contingent consideration is based on applying the Monte Carlo simulation method to forecast achievement under various contingent consideration events which may result in up to $ 2.6 million in payments subject to the acquired business’s satisfying certain financial and personnel objectives by June 17, 2024 under the Purchase Agreement.

Key inputs in the valuation include forecasted revenue, revenue volatility and discount rate.

Underlying forecast mathematics were based on Geometric Brownian Motion in a risk-neutral framework and discounted back to the applicable period in which the accumulative thresholds were achieved at discount rates commensurate with the risk and expected payout term of the contingent consideration.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Purchase Price Allocation

An allocation of purchase price as of the January 17, 2023 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 primarily includes $ 2.5 million in net operating liabilities, with $ 12.2 million in goodwill.

An allocation of purchase price as of the January 17, 2023 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 primarily includes $ 0.2 million in net operating assets, with $ 11.7 million in goodwill.

Assumptions in the Allocations of Purchase Price

5 unchanged sentences

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.

In connection with the acquisition of Company Y, the Company assumed certain operating liabilities.

The liabilities assumed in this acquisition are included in the respective purchase price allocations above.

Goodwill recorded in connection with Company Y was $ 12.2 million as of March 31, 2023.

Goodwill recorded in connection with Company Y was $ 11.7 million as of June 30, 2023.

The Company does not expect to deduct any of the acquired goodwill for tax purposes.

1 unchanged sentence

During the three months ended March 31, 2023, the Company entered into a plan of restructuring to reduce its workforce as a result of internal resource alignment and cost saving measures.

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

Three Months Ended March 31,

The Company incurred additional costs in the three months ended June 30, 2023 related to this plan of restructuring due to statutory requirements in the jurisdictions in which the terminated employees were employed.

The Company’s management does not expect to incur additional costs associated with this plan of restructuring.

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

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

2023 2022 2023 2022

(in thousands)

1 unchanged sentence

Lease related charges 34 462 42 462

We expect to incur additional costs throughout the remainder of 2023 related to the plan of restructuring, due to statutory requirements in the jurisdictions in which the terminated employees were employed.

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, 2023.

Other 115 — 166 —

$ 4,436 $ 462 $ 9,084 $ 462

The following table presents a roll-forward of the Company’s restructuring liability for the six months ended June 30, 2023.

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

5 unchanged sentences

Non-cash charges and adjustments — 29 ( 26 ) 3

Liability as of March 31, 2023 3,097 71 8 3,176

current portion as of March 31, 2023 ( 3,097 ) ( 71 ) ( 8 ) ( 3,176 )

Long-term portion as of March 31, 2023 $ — $ — $ — $ —

Liability as of June 30, 2023 5,456 51 ( 18 ) 5,489

current portion as of June 30, 2023 ( 5,456 ) ( 51 ) 18 ( 5,489 )

Long-term portion as of June 30, 2023 $ — $ — $ — $ —

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill and Intangible Assets

2 unchanged sentences

The following table presents the changes in the carrying amount of goodwill for the periods indicated:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

3 unchanged sentences

Ending balance $ 318,456 $ 306,739

During the three months ended March 31, 2023, there was an increase in the carrying value of goodwill of $ 12.2 million related to the acquisition of Company Y.

During the six months ended June 30, 2023, there was an increase in the carrying value of goodwill of $ 11.7 million related to the acquisition of Company Y.

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, 2023 and 2022, there were no indications of impairment of the Company’s goodwill balances.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the six months ended June 30, 2023 and 2022, there were no indications of impairment of the Company’s goodwill balances.

Acquired Intangibles

1 unchanged sentence

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, 2023 December 31, 2022

June 30, 2023 December 31, 2022

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

5 unchanged sentences

Backlog 5.3 500 ( 439 ) 61 500 ( 429 ) 71

Patents 7.0 4,781 ( 114 ) 4,667 — — —

6.1 $ 479,442 $ ( 388,239 ) $ 91,203 $ 477,125 $ ( 367,809 ) $ 109,316

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

Three Months Ended March 31,

(in thousands)

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 June 30, Six Months Ended June 30,

2023 2022 2023 2022

(in thousands) (in thousands)

Cost of net revenue $ 9,333 $ 9,865 $ 18,791 $ 20,712

2 unchanged sentences

$ 10,043 $ 12,792 $ 20,430 $ 29,816

Amortization of finite-lived intangible assets in cost of net revenue in the consolidated statements of income results primarily from acquired developed technology.

Amortization of finite-lived intangible assets in cost of net revenue in the consolidated statements of operations results primarily from acquired developed technology.

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)

2 unchanged sentences

Other disposals ( 769 ) —

Transfers to developed technology from IPR&D — 2,600

Amortization ( 20,430 ) ( 29,816 )

4 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, 2023 and 2022, impairment losses related to finite-lived intangible assets of $ 2.4 million and $ 0 , respectively, were recognized.

During the three months ended June 30, 2023 and 2022, no impairment losses related to finite-lived intangible assets were recognized.

During the six months ended June 30, 2023 and 2022, impairment losses related to finite-lived intangible assets of $ 2.4 million and $ 0 , respectively, were recognized.

The impairment loss was attributable to certain purchased licensed technology.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents future amortization of the Company’s finite-lived intangible assets at March 31, 2023:

The following table presents future amortization of the Company’s finite-lived intangible assets at June 30, 2023:

(in thousands)

2 unchanged sentences

Total $ 91,203

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Financial Instruments

The composition of financial instruments is as follows:

March 31, 2023

June 30, 2023

Net Unrealized

7 unchanged sentences

Marketable equity investments $ 20,005 $ — $ ( 1,476 ) $ 18,529

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Fair Value Fair Value

2 unchanged sentences

$ 2,620 2,941

At March 31, 2023, the Company held marketable equity investments with an aggregate fair value of $ 18.7 million that were in an unrealized loss position.

The net unrealized loss of $ 1.3 million as of March 31, 2023 represents stock price fluctuations in the underlying securities held, and was recorded to other income (expense), net in the consolidated statement of income.

At June 30, 2023, the Company held marketable equity investments with an aggregate fair value of $ 20.5 million that were in an unrealized gain position.

The net unrealized gain of $ 0.5 million as of June 30, 2023 represents stock price fluctuations in the underlying securities held, and was recorded to other income (expense), net in the consolidated statement of operations.

The Company evaluates securities for other-than-temporary impairment on a quarterly basis.

7 unchanged sentences

The levels are described below:

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.

3 unchanged sentences

The marketable equity investments held by the Company have been valued on the basis of quoted market prices and is therefore classified as Level 1.

The contingent consideration liability as of March 31, 2023 is associated with the Company’s acquisitions of Company X in December 2021 and Company Y in January 2023 (Note 3) and the contingent consideration liability as of December 31, 2022 is associated with the Company’s acquisition of Company X.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The contingent consideration liability as of June 30, 2023 is associated with the Company’s acquisitions of Company X in December 2021 and Company Y in January 2023 (Note 3) and the contingent consideration liability as of December 31, 2022 is associated with the Company’s acquisition of Company X.

The contingent consideration liability is classified as a Level 3 financial instrument.

The contingent consideration as it relates to Company X was subject to the acquired business’s satisfaction of certain financial and personnel objectives by March 31, 2023, while the contingent consideration as it relates to Company Y is subject to the acquired business’s satisfaction of certain personnel objectives by June 17, 2024.

The financial and personnel objectives of Company X were achieved by March 31, 2023 and contingent consideration for Company X of $ 2.7 million is expected to be paid by the end of April 2023 with the remaining $ 0.3 million to be paid in December 2023.

The fair value of contingent consideration is based on (1) applying the Monte Carlo simulation method, with underlying forecast mathematics based on Geometric Brownian motion in a risk-neutral framework, to forecast achievement of the acquired business’ financial objectives, if applicable, under various possible contingent consideration events and (2) a probability based methodology using management’s inputs and assumptions to forecast achievement of the acquired business’ personnel objectives which combined may result in total payments up to $ 3.0 million to Company X and $ 2.6 million to Company Y.

The financial and personnel objectives of Company X were achieved by March 31, 2023 and contingent consideration for Company X of $ 2.7 million was paid in April 2023 with the remaining $ 0.3 million to be paid in December 2023.

The fair value of contingent consideration is based on (1) applying the Monte Carlo simulation method, with underlying forecast mathematics based on Geometric Brownian motion in a risk-neutral framework, to forecast achievement of the acquired business’ financial objectives, if applicable, under various possible contingent consideration events and (2) a probability based methodology using management’s inputs and assumptions to forecast achievement of the acquired business’ personnel objectives which resulted in total payments up to $ 3.0 million to Company X and may result in total payments up to $ 2.6 million to Company Y.

Key inputs in the valuation include forecasted revenue, revenue volatility, discount rate and discount term as it relates to the financial objectives and probability of achievement, discount term and discount rate as it relates to the personnel objectives.

Fair Value Measurements at March 31, 2023

Balance at March 31, 2023 Quoted Prices

Fair Value Measurements at June 30, 2023

Balance at June 30, 2023 Quoted Prices

Identical Assets

15 unchanged sentences

The following summarizes the activity in Level 3 financial instruments:

Three Months Ended March 31,

Six Months Ended June 30,

Contingent Consideration

2 unchanged sentences

Acquisitions (1)

Payments ( 2,700 ) —

Accretion of discount (1)

2 unchanged sentences

_____________________

(1) Changes to the balance associated with the estimated fair value of contingent consideration for the three months ended March 31, 2023 were due to the addition of contingent consideration associated with the acquisition of Company Y and accretion of discounts on contingent consideration.

For the three months ended March 31, 2023, there were no transfers between Level 1, Level 2, or Level 3 financial instruments.

(1) These changes to the balance associated with the estimated fair value of contingent consideration for the six months ended June 30, 2023 were due to the addition of contingent consideration associated with the acquisition of Company Y and accretion of discounts on contingent consideration.

For the six months ended June 30, 2023, there were no transfers between Level 1, Level 2, or Level 3 financial instruments.

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

3 unchanged sentences

The Company’s long-term debt is not recorded at fair value on a recurring basis, but is measured at fair value for disclosure purposes (Note 8).

Included in other long-term assets are investments in privately held entities of $ 11.8 million and $ 11.8 million as of March 31, 2023 and December 31, 2022, respectively.

Included in other long-term assets are investments in privately held entities of $ 11.8 million as of June 30, 2023 and December 31, 2022.

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

2 unchanged sentences

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(in thousands)

3 unchanged sentences

Total cash, cash equivalents and restricted cash $ 225,643 $ 188,357

As of March 31, 2023 and December 31, 2022, cash and cash equivalents included money market funds of approximately $ 20.5 million and $ 0.4 million, respectively.

As of March 31, 2023 and December 31, 2022, the Company had restricted cash of approximately $ 1.0 million and $ 1.0 million, respectively.

As of June 30, 2023 and December 31, 2022, cash and cash equivalents included money market funds of approximately $ 76.1 million and $ 0.4 million, respectively.

As of June 30, 2023 and December 31, 2022, the Company had restricted cash of approximately $ 1.1 million and $ 1.0 million, respectively.

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, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(in thousands)

3 unchanged sentences

Property and equipment, net consists of the following:

(in Years) March 31, 2023 December 31, 2022

(in Years) June 30, 2023 December 31, 2022

(in thousands)

11 unchanged sentences

$ 73,845 $ 79,018

Depreciation expense for the three months ended March 31, 2023 and 2022 was $ 6.4 million and $ 4.8 million, respectively.

In March 2022, the Company entered into a note receivable with a supplier for $ 10.0 million, of which $ 2.0 million and $ 8.0 million are included in prepaid expenses and other current assets and other long-term assets, respectively, on the consolidated balance sheet as of March 31, 2023, and $ 10.0 million is included in other long-term assets as of December 31, 2022.

Depreciation expense for the three months ended June 30, 2023 and 2022 was $ 6.5 million and $ 4.8 million, respectively.

Depreciation expense for the six months ended June 30, 2023 and 2022 was $ 12.9 million and $ 9.6 million, respectively.

In March 2022, the Company entered into a note receivable with a supplier for $ 10.0 million, of which $ 2.0 million and $ 8.0 million are included in prepaid expenses and other current assets and other long-term assets, respectively, on the consolidated balance sheet as of June 30, 2023, and $ 10.0 million is included in other long-term assets as of December 31, 2022.

Repayments of $ 2.0 million per year are due annually by March 31, from 2024 through 2027, provided that certain production utilization targets for the prior year are met.

Accrued price protection liability consists of the following activity:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

6 unchanged sentences

Accrued expenses and other current liabilities consist of the following:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(in thousands)

18 unchanged sentences

Other comprehensive loss before reclassifications, net of tax ( 1,270 ) — ( 1,270 )

Balance at March 31, 2023 $ ( 5,372 ) $ 4,159 $ ( 1,213 )

Balance at June 30, 2023 $ ( 6,450 ) $ 4,159 $ ( 2,291 )

The carrying amount of the Company’s long-term debt consists of the following:

9 unchanged sentences

Long-term debt, non-current portion $ 122,064 $ 121,757

As of March 31, 2023 and December 31, 2022, the weighted average effective interest rate on debt was approximately 6.9 % and 3.8 %, respectively.

As of June 30, 2023 and December 31, 2022, the weighted average effective interest rate on debt was approximately 7.2 % and 3.8 %, respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended March 31, 2023 and 2022, the Company recognized total amortization of debt discount and debt issuance costs of $ 0.2 million and $ 0.1 million, respectively, to interest expense.

The approximate aggregate fair value of the term loans outstanding as of March 31, 2023 and December 31, 2022 was $ 139.1 million and $ 137.4 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, 2023, the outstanding principal balance of $ 125.0 million is due in full on June 23, 2028, upon maturity of the loan.

During the three months ended June 30, 2023 and 2022, the Company recognized total amortization of debt discount and debt issuance costs of $ 0.2 million and $ 0.2 million, respectively, to interest expense.

During the six months ended June 30, 2023 and 2022, the Company recognized total amortization of debt discount and debt issuance costs of $ 0.3 million and $ 0.3 million

The approximate aggregate fair value of the term loans outstanding as of June 30, 2023 and December 31, 2022 was $ 137.9 million and $ 137.4 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, 2023, the outstanding principal balance of $ 125.0 million is due in full on June 23, 2028, upon maturity of the loan.

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

3 unchanged sentences

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 March 31, 2023, the Revolving Facility was undrawn.

Under the amended and restated commitment letter with Wells Fargo Bank and other lenders entered into in connection with the pending merger with Silicon Motion (Note 3), the Company expects to repay the remaining outstanding term loans under this agreement upon closing of the merger.

As of June 30, 2023, the Revolving Facility was undrawn.

Under the terminated amended and restated commitment letter with Wells Fargo Bank and other lenders entered into in connection with the previously pending merger with Silicon Motion (Note 3), the Company had expected to repay the remaining outstanding term loans under this agreement upon closing of the merger.

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.

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 Term SOFR 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 Term SOFR 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 Term SOFR 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 Term SOFR 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 June 23, 2021 Credit Agreement was amended on June 29, 2023 to implement a benchmark replacement.

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

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

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

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.

4 unchanged sentences

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 date.

As of March 31, 2023, the Company was in compliance with such covenants.

As of June 30, 2023, 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.

6 unchanged sentences

Employee Stock-Based Compensation Plans

At March 31, 2023, the Company had stock-based compensation awards outstanding under the following plans:

At June 30, 2023, 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, 2022.

There have been no material changes to the terms of the Company’s equity incentive plans during the three months ended March 31, 2023.

As of March 31, 2023, the number of shares of common stock available for future issuance under the 2010 Plan was 16,652,604 shares.

As of March 31, 2023, the number of shares of common stock available for future issuance under the ESPP was 5,890,355 shares.

There have been no material changes to the terms of the Company’s equity incentive plans during the six months ended June 30, 2023.

As of June 30, 2023, the number of shares of common stock available for future issuance under the 2010 Plan was 15,831,248 shares.

As of June 30, 2023, the number of shares of common stock available for future issuance under the ESPP was 5,749,724 shares.

Employee Incentive Bonus

1 unchanged sentence

When bonus awards are settled in common stock issued under the 2010 Equity Incentive Plan, the number of shares issuable to plan participants is determined based on the closing price of the Company’s common stock as determined in trading on the applicable stock exchange, on a date approved by the Board of Directors.

In connection with the Company’s bonus programs, in February 2023, the Company issued 0.9 million freely-tradable (subject to certain restrictions for affiliates) shares of the Company’s common stock in settlement of bonus awards to employees, including executives, for the 2022 performance period.

At March 31, 2023, the Company has an accrual of $ 5.9 million for bonus awards for employees for

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

year-to-date achievement in the 2023 performance period.

2022 performance period.

At June 30, 2023, the Company has an accrual of $ 5.1 million for bonus awards for employees for year-to-date achievement in the 2023 performance period.

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

Stock-Based Compensation

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

Three Months Ended March 31,

(in thousands)

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 June 30, Six Months Ended June 30,

2023 2022 2023 2022

(in thousands) (in thousands)

Cost of net revenue $ 246 $ 162 $ 456 $ 325

2 unchanged sentences

$ 17,197 $ 19,469 $ 33,645 $ 38,023

The total unrecognized compensation cost related to unvested restricted stock units as of March 31, 2023 was $ 175.9 million, and the weighted average period over which these equity awards are expected to vest is 2.70 years.

The total unrecognized compensation cost related to unvested performance-based restricted stock units as of March 31, 2023 was $ 28.2 million, and the weighted average period over which these equity awards are expected to vest is 1.87 years.

There was no unrecognized compensation cost related to unvested stock options as of March 31, 2023.

The total unrecognized compensation cost related to unvested restricted stock units as of June 30, 2023 was $ 168.5 million, and the weighted average period over which these equity awards are expected to vest is 2.73 years.

The total unrecognized compensation cost related to unvested performance-based restricted stock units as of June 30, 2023 was $ 9.5 million, and the weighted average period over which these equity awards are expected to vest is 1.62 years.

There was no unrecognized compensation cost related to unvested stock options as of June 30, 2023.

Restricted Stock Units

6 unchanged sentences

Canceled ( 292 ) 38.62

Outstanding at March 31, 2023 7,531 $ 35.26

Outstanding at June 30, 2023 6,671 $ 36.55

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, 2023, 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, 2023, 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.

6 unchanged sentences

Canceled ( 3 ) 48.24

Outstanding at March 31, 2023 2,753 $ 34.64

Outstanding at June 30, 2023 2,753 $ 34.64

________________

2 unchanged sentences

Employee Stock Purchase Rights

During the three months ended March 31, 2023 and 2022, there were no shares of common stock purchased under the ESPP.

During the six months ended June 30, 2023 and 2022, there were 140,631 and 83,404 shares of common stock purchased under the ESPP at a weighted average price of $ 21.25 and $ 34.92 , respectively.

The fair values of employee stock purchase rights for the latest ESPP offering period 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 $ 7.56 - $ 11.97

$ 14.25 - $ 18.82

Risk-free interest rate 4.54 % - 5.24 %

0.06 % - 1.54 %

Dividend yield — % — %

1 unchanged sentence

Volatility 51.73 % - 59.78 %

43.83 % - 69.74 %

The risk-free interest rate assumption was based on rates for United States (U.S.) Treasury zero-coupon bonds with maturities similar to those of the expected term of the award being valued.

8 unchanged sentences

Exercised ( 10 ) 13.05

Outstanding at March 31, 2023 389 $ 17.27 2.20 $ 6,972

Vested and expected to vest at March 31, 2023 389 $ 17.27 2.20 $ 6,972

Exercisable at March 31, 2023 389 $ 17.27 2.20 $ 6,972

No stock options were granted by the Company during the three months ended March 31, 2023.

The intrinsic value of stock options exercised was $ 0.1 million and $ 0.3 million in the three months ended March 31, 2023 and 2022, respectively.

Outstanding at June 30, 2023 383 $ 17.33 1.99 $ 5,442

Vested and expected to vest at June 30, 2023 383 $ 17.33 1.99 $ 5,442

Exercisable at June 30, 2023 383 $ 17.33 1.99 $ 5,442

No stock options were granted by the Company during the six months ended June 30, 2023.

The intrinsic value of stock options exercised was $ 0.1 million and $ 0.4 million in the three months ended June 30, 2023 and 2022, respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cash received from exercise of stock options was $ 4.0 thousand and $ 0.1 million during the three months ended March 31, 2023 and 2022, respectively.

The tax benefit from stock options exercised was $ 0.1 million and $ 0.4 million during the three months ended March 31, 2023 and 2022, respectively.

The intrinsic value of stock options exercised was $ 0.2 million and $ 0.7 million in the six months ended June 30, 2023 and 2022, respectively.

Cash received from exercise of stock options was $ 0.1 million and $ 0.1 million during the three months ended June 30, 2023 and 2022, respectively.

Cash received from exercise of stock options was $ 0.1 million and $ 0.2 million during the six months ended June 30, 2023 and 2022, respectively.

The tax benefit from stock options exercised was $ 0.1 million and $ 0.6 million during the three months ended June 30, 2023 and 2022, respectively.

The tax benefit from stock options exercised was $ 0.3 million and $ 1.0 million during the six months ended June 30, 2023 and 2022, 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.

For the six months ended June 30, 2023, the Company’s annual effective tax rate results in significant variation in the customary relationship between income tax expense and pre-tax income in interim periods.

The Company is using the actual effective tax rate for the six months ended June 30, 2023 as the best estimate of the annual effective tax rate.

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 $ 15.6 million in the three months ended March 31, 2023 and an income tax provision of $ 11.5 million in the three months ended March 31, 2022.

The Company recorded an income tax benefit of $ 0.4 million in the three months ended June 30, 2023 and an income tax provision of $ 11.9 million in the three months ended June 30, 2022.

The Company recorded an income tax provision of $ 15.2 million in the six months ended June 30, 2023 and an income tax provision of $ 23.3 million in the six months ended June 30, 2022.

The difference between the Company’s effective tax rate and the 21.0% U.S.

federal statutory rate for the three months ended March 31, 2023 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items including a tax on global intangible low-taxed income, research and development credits, stock based compensation, excess tax benefits related to stock-based compensation, and release of uncertain tax positions under ASC 740-10.

federal statutory rate for the six months ended June 30, 2023 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items including a tax on global intangible low-taxed income, stock based compensation, excess tax benefits related to stock-based compensation, and release of uncertain tax positions under ASC 740-10.

The permanent tax item related to global intangible low-taxed income also reflects recent legislative changes requiring the capitalization of research and experimentation costs, as well as limitations on the creditability of certain foreign income taxes.

The difference between the Company’s effective tax rate and the 21.0% U.S.

federal statutory rate for the three months ended March 31, 2022 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items including the tax on global intangible low-taxed income, stock based compensation, excess tax benefits related to stock-based compensation, and release of certain reserves for uncertain tax positions under ASC 740-10, and release of the valuation allowance on certain federal R&D credits.

federal statutory rate for the six months ended June 30, 2022 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items including a tax on global intangible low-taxed income, stock based compensation, excess tax benefits related to stock-based compensation, release of uncertain tax positions under ASC 740-10, and release of the valuation allowance on certain federal research and development credits.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

1 unchanged sentence

Previously recognized tax positions that no longer meet the more-likely-than-not threshold are derecognized in the first financial reporting period in which that threshold is no longer met.

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

During the three months ended March 31, 2023, the Company’s unrecognized tax benefits increased by $ 1.5 million.

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 six months ended June 30, 2023, the Company’s unrecognized tax benefits increased by $ 0.8 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, 2023 were approximately $ 0.4 million and $ 0.01 million, respectively.

Accrued interest and penalties associated with uncertain tax positions as of June 30, 2023 were approximately $ 0.3 million and $ 0.01 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, 2023, the statutes of limitations for the assessment of federal, state, and foreign income taxes are closed for the years before 2019, 2018, and 2017, respectively.

At June 30, 2023, the statutes of limitations for the assessment of federal, state, and foreign income taxes are closed for the years before 2019, 2018, and 2017, respectively.

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

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

The Company recorded a tax provision in the three months ended March 31, 2023 and 2022 at the incentive rate.

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.

The Company recorded a tax provision in the six months ended June 30, 2023 and 2022 at the incentive rate.

Concentration of Credit Risk, Significant Customers and Geographic Information

8 unchanged sentences

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

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

Three Months Ended March 31,

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

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

2023 2022 2023 2022

Percentage of total net revenue

1 unchanged sentence

Customer B * 11 % 11 % 11 %

Customer C * 10 %

____________________________

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

3 unchanged sentences

Customer F 15 % *

Customer G 11 % *

____________________________

3 unchanged sentences

Significant Suppliers

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

Three Months Ended March 31,

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

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

2023 2022 2023 2022

Vendor A 11 % 30 % 19 % 29 %

2 unchanged sentences

Vendor D 12 % * 11 % *

____________________________

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

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,

2023 2022 2023 2022

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

Asia $ 128,328 70 % $ 227,655 81 % $ 320,831 74 % $ 439,320 81 %

Europe 44,956 24 % 38,193 14 % 85,172 20 % 76,974 14 %

United States 8,906 5 % 9,684 3 % 21,090 5 % 18,552 3 %

1 unchanged sentence

Total $ 183,938 100 % $ 280,009 100 % $ 432,380 100 % $ 543,936 100 %

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,

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

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

2023 2022 2023 2022

Percentage of total net revenue

1 unchanged sentence

China 12 % 22 % 14 % 17 %

Vietnam * 13 %

Germany 10 % * * *

____________________________

* Represents less than 10% of the net revenue for the respective period.

* Represents less than 10% of net revenues for the period presented.

The determination of which country a particular sale is allocated to is based on the destination of the product shipment.

No other individual country accounted for more than 10% of net revenue during these periods.

Although a large percentage of the Company’s products is shipped to Asia, and in particular, Hong Kong, mainland China and Vietnam, the Company believes that a significant number of the systems designed by customers and incorporating the Company’s semiconductor products are subsequently sold outside Asia to Europe, Middle East, and Africa markets and North American markets.

No other individual country accounted for 10% or greater of net revenue during these periods.

Although a large percentage of the Company’s products is shipped to Asia, and in particular, Hong Kong, and mainland China, the Company believes that a significant number of the systems designed by customers and incorporating the Company’s semiconductor products are subsequently sold outside Asia to Europe, Middle East, and Africa markets and North American markets.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

3 unchanged sentences

Total $ 518,616 100 % $ 523,588 100 %

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue from Contracts with Customers

1 unchanged sentence

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,

2023 2022 2023 2022

Broadband $ 53,549 $ 139,098 $ 135,230 $ 273,654

7 unchanged sentences

Total net revenue $ 183,938 $ 280,009 $ 432,380 $ 543,936

Revenues from sales through the Company’s distributors accounted for 43 % and 47 % of net revenue for the three months ended March 31, 2023 and 2022, respectively.

Revenues from sales through the Company’s distributors accounted for 53 % and 45 % of net revenue for the three months ended June 30, 2023 and 2022, respectively.

Revenues from sales through the Company’s distributors accounted for 47 % and 46 % of net revenue for the six months ended June 30, 2023 and 2022, respectively.

Contract Liabilities

As of March 31, 2023 and December 31, 2022, customer contract liabilities were approximately $ 1.1 million and $ 1.1 million, respectively, and consisted primarily of advanced payments received for which performance obligations have not been completed.

Revenue recognized in each of the three months ended March 31, 2023 and 2022 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, 2023 and 2022.

As of June 30, 2023 and December 31, 2022, customer contract liabilities were approximately $ 1.8 million and $ 1.1 million, respectively, and consisted primarily of advanced payments received for which performance obligations have not been completed.

Revenue recognized in each of the six months ended June 30, 2023 and 2022 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 six months ended June 30, 2023 and 2022.

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

As of March 31, 2023 and December 31, 2022, obligations to customers consisting of estimates of price protection rights offered to the Company’s end customers totaled $ 103.8 million and $ 113.3 million, respectively, and are included in accrued price protection liability in the consolidated balance sheets.

As of June 30, 2023 and December 31, 2022, obligations to customers consisting of estimates of price protection rights offered to the Company’s end customers totaled $ 80.1 million and $ 113.3 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, 2023 were $ 62.3 million and $ 0.7 million, respectively, and as of December 31, 2022 were $ 52.4 million and $ 0.6 million, respectively, and are included in accrued expenses and other current liabilities in the consolidated balance sheets (Note 7).

The increase in revenue in each of the three months ended March 31, 2023 and 2022 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, 2023 and December 31, 2022, 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 $ 0.3 million and $ 0.2 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, 2023 were $ 50.2 million and $ 0.6 million, respectively, and as of December 31, 2022 were $ 52.4 million and $ 0.6 million, respectively, and are included in accrued expenses and other current liabilities in the consolidated balance sheets (Note 7).

The increase in revenue in each of the six months ended June 30, 2023 and 2022 from net

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, 2023 and December 31, 2022, 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 $ 0.1 million and $ 0.2 million, respectively.

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

As of March 31, 2023 and December 31, 2022, there were no impairment losses recorded on customer accounts receivable.

As of June 30, 2023 and December 31, 2022, there were no impairment losses recorded on customer accounts receivable.

Operating Leases

Operating lease arrangements primarily consist of office leases expiring in various years through 2029.

These leases have original terms of approximately 2 to 8 years and some contain options to extend the lease up to 5 years or terminate the lease,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

which are included in right-of-use assets and lease liabilities when the Company is reasonably certain it will renew the underlying leases.

These leases have original terms of approximately 2 to 8 years and some contain options to extend the lease up to 5 years or terminate the lease, which are included in right-of-use assets and lease liabilities when the Company is reasonably certain it will renew the underlying leases.

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, 2023 and December 31, 2022, the weighted average discount rate for operating leases was 3.4 % and 3.4 %, respectively, and the weighted average remaining lease term for operating leases was 3.8 years and 3.9 years, respectively, 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 March 31, 2023:

As of June 30, 2023 and December 31, 2022, the weighted average discount rate for operating leases was 4.6 % and 3.4 %, respectively, and the weighted average remaining lease term for operating leases was 4.3 years and 3.9 years, respectively, 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, 2023:

Operating Leases

7 unchanged sentences

Long-term lease liabilities $ 30,712

Operating lease cost was $ 2.9 million and $ 2.5 million for the three months ended March 31, 2023 and 2022, respectively.

Short-term lease costs for the three months ended March 31, 2023 and 2022 were not material.

There were $ 0.2 million and $ 8.0 million of right-of-use assets obtained in exchange for new lease liabilities for the three months ended March 31, 2023 and 2022, respectively.

Operating lease cost was $ 2.5 million and $ 2.3 million for the three months ended June 30, 2023 and 2022, respectively.

Operating lease cost was $ 5.4 million and $ 4.8 million for the six months ended June 30, 2023 and 2022, respectively.

Short-term lease costs for the three and six months ended June 30, 2023 and 2022 were not material.

There were $ 12.0 million and $ 4.1 million of right-of-use assets obtained in exchange for new lease liabilities for the three months ended June 30, 2023 and 2022, respectively.

There were $ 12.2 million and $ 11.9 million of right-of-use assets obtained in exchange for new lease liabilities for the six months ended June 30, 2023 and 2022, respectively.

Employee Retirement Plans

1 unchanged sentence

The Company has a 401(k) defined contribution retirement plan (the 401(k) Plan) covering all eligible employees.

Participants may voluntarily contribute on a pre-tax basis an amount not to exceed a maximum contribution amount pursuant to Section 401(k) of the Internal Revenue Code.

Participants may voluntarily contribute on a pre-tax basis an amount not to exceed a maximum contribution amount pursuant to

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Section 401(k) of the Internal Revenue Code.

The Company is not required to contribute, nor has it contributed, to the 401(k) Plan for any of the periods presented.

1 unchanged sentence

The Company maintains defined benefit retirement plans, including a pension plan, in certain foreign jurisdictions.

As of March 31, 2023 and December 31, 2022, the defined benefit obligation was $ 1.8 million and $ 1.7 million, respectively.

As of June 30, 2023 and December 31, 2022, the defined benefit obligation was $ 1.1 million and $ 1.7 million, respectively.

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

Net periodic benefit costs were $ 0.1 million and $ 0.1 million for the three months ended March 31, 2023 and 2022, respectively, and were recorded to research and development expenses in the consolidated statements of income.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net periodic benefit costs were $ 0.1 million and $ 0.1 million for the three months ended June 30, 2023 and 2022, respectively, and were recorded to research and development expenses in the consolidated statements of operations.

Net periodic benefit costs were $ 0.1 million and $ 0.2 million for the six months ended June 30, 2023 and 2022, 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, 2023, future minimum payments under inventory purchase and other obligations are as follows:

As of June 30, 2023, future minimum payments under inventory purchase and other obligations are as follows:

Inventory Purchase Obligations Other Obligations Total

2 unchanged sentences

2025 10,231 22,567 32,798

2026 — 11,700 11,700

Total minimum payments $ 46,637 $ 74,958 $ 121,595

2 unchanged sentences

From time to time, the Company enters into contracts for jointly funded research and development projects 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 parties under certain conditions, funds of $ 9.0 million received from the other parties as of March 31, 2023 have been deferred in other long-term liabilities.

As the Company may be required to repay all or a portion of the funds provided by the other parties under certain conditions, funds of $ 10.0 million received from the other parties as of June 30, 2023 have been deferred in other long-term liabilities.

Additional amounts under the contracts 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 de-recognizes the liabilities when the contingencies associated with the repayment conditions have been resolved.

During the three months ended March 31, 2023 and 2022, the Company recognized $ 0 and $ 3.8 million, respectively, in previously deferred amounts from other parties due to resolution of such repayment conditions.

During the six months ended June 30, 2023 and 2022, the Company recognized $ 0 and $ 3.8 million, respectively, in previously deferred amounts from other parties due to resolution of such repayment conditions.

Bell Semiconductor Litigation

10 unchanged sentences

Bell Semiconductor requested as relief a limited exclusion order and cease and desist order.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On March 10, 2023, Bell Semiconductor and MaxLinear entered into a Settlement and Patent License Agreement, or the Settlement Agreement, in settlement and release of all claims above.

6 unchanged sentences

The results of any litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have a material adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

However, as of March 31, 2023, other than the matter described above, no material loss contingencies have been accrued for such matters in the Company’s financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

However, as of June 30, 2023, no material loss contingencies have been accrued for such matters in the Company’s 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.

The share repurchase program has been temporarily suspended since July 2022 due to the Company’s pending merger with Silicon Motion (Note 3).

During the three months ended March 31, 2023, the Company did no t repurchase any shares of its common stock under the repurchase program.

At March 31, 2023, the aggregate value of common stock repurchased under the program was approximately $ 55.0 million and approximately $ 45.0 million remained available for repurchase under the program.

The share repurchase program has been temporarily suspended since July 2022 due to the Company’s previously pending merger with Silicon Motion (Note 3).

During the six months ended June 30, 2023, the Company did no t repurchase any shares of its common stock under the repurchase program.

At June 30, 2023, the aggregate value of common stock repurchased under the program was approximately $ 55.0 million and approximately $ 45.0 million remained available for repurchase under the program.

Subsequent Events

On July 26, 2023, the Company provided notice to Silicon Motion that it has terminated the Merger Agreement (Note 3) and the Company is relieved of its obligations to close because, among other reasons, (i) certain conditions to closing set forth in the Merger Agreement are not satisfied and are incapable of being satisfied, (ii) Silicon Motion has suffered a Material Adverse Effect that is continuing, (iii) Silicon Motion is in material breach of representations, warranties, covenants, and agreements in the Merger Agreement that give rise to the right of the Company to terminate, and (iv) in any event, the First Extended Outside Date has passed and was not automatically extended because certain conditions in Article 6 of the Merger Agreement were not satisfied or waived as of May 5, 2023.

Under the terms of the Merger Agreement, MaxLinear is not required to pay a break-up fee or other fee as a result of the termination of the Merger Agreement.

Undefined capitalized terms in this paragraph have the same meaning as in the Merger Agreement.

In connection with the termination of the merger agreement, the second amended and restated commitment letter with Wells Fargo Bank and other lenders (Note 8) was terminated.

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