What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-07-24 compared with 2024-04-24 · 287 added, 195 removed, 882 unchanged (35% of the section changed)

37 unchanged sentences

550,000 shares authorized;

83,067 shares issued and outstanding at March 31, 2024 and 81,818 shares issued and outstanding December 31, 2023

83,898 shares issued and outstanding at June 30, 2024 and 81,818 shares issued and outstanding December 31, 2023

Additional paid-in capital 853,865 808,575

7 unchanged sentences

in thousands, except per share data)

Three Months Ended March 31,

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

2024 2023 2024 2023

Net revenue $ 91,990 $ 183,938 $ 187,259 $ 432,380

25 unchanged sentences

in thousands)

Three Months Ended March 31,

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

2024 2023 2024 2023

Net income (loss) $ ( 39,266 ) $ ( 4,351 ) $ ( 111,575 ) $ 5,182

Other comprehensive loss, net of tax:

Foreign currency translation adjustments, net of tax benefit of $ 49 for the three months ended March 31, 2024, and net of tax benefit of $ 71 for the three months ended March 31, 2023

Foreign currency translation adjustments, net of tax benefit of $ 78 and $ 127 for the three and six months ended June 30, 2024, respectively, and net of tax benefit of $ 94 and $ 165 for the three and six months ended June 30, 2023, respectively

( 943 ) ( 1,078 ) ( 2,725 ) ( 1,270 )

3 unchanged sentences

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

FISCAL QUARTER ENDED MARCH 31, 2024

FISCAL QUARTERS ENDED JUNE 30, 2024

in thousands)

12 unchanged sentences

Balance at March 31, 2024 83,067 8 834,384 ( 5,573 ) ( 190,836 ) 637,983

Common stock issued pursuant to equity awards, net 655 — ( 545 ) — — ( 545 )

Employee stock purchase plan 176 — 2,682 — — 2,682

Stock-based compensation — — 17,344 — — 17,344

Other comprehensive loss — — — ( 943 ) — ( 943 )

Net loss — — — — ( 39,266 ) ( 39,266 )

Balance at June 30, 2024 83,898 $ 8 $ 853,865 $ ( 6,516 ) $ ( 230,102 ) $ 617,255

MAXLINEAR, INC.

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

See accompanying notes.

2 unchanged sentences

in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating Activities

10 unchanged sentences

Gain on extinguishment of lease liabilities ( 553 ) —

Loss on settlement of pension — 362

Gain on foreign currency ( 968 ) —

(Gain) loss on foreign currency ( 1,366 ) 153

Excess tax (benefits) deficiencies on stock-based awards ( 1,519 ) ( 1,298 )

12 unchanged sentences

Purchases of intangible assets ( 3,143 ) ( 5,524 )

Cash used in acquisitions, net of cash acquired — ( 9,665 )

Cash used in acquisition, net of cash acquired — ( 12,384 )

Net cash used in investing activities ( 14,498 ) ( 28,161 )

4 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 918 ) ( 1,228 )

Increase in cash, cash equivalents and restricted cash 4,574 20,479

Increase (decrease) in cash, cash equivalents and restricted cash ( 2,219 ) 37,286

Cash, cash equivalents and restricted cash at beginning of period 188,356 188,357

28 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, 2023 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 January 31, 2024, or the Annual Report.

Interim results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024.

Interim results for the six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024.

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 24, 2024, 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 24, 2024, the issuance date of this Quarterly Report on Form 10-Q.

Actual results could differ from those estimates.

38 unchanged sentences

Property and Equipment

Property and equipment is carried at cost and depreciated over the estimated useful lives of the assets, ranging from two to five years , using the straight-line method.

Property and equipment is carried at cost and depreciated over the estimated useful lives of the assets, ranging from three to five years , using the straight-line method.

Leasehold improvements are stated at cost and amortized over the shorter of the estimated useful lives of the assets or the lease term.

Production Masks

Production masks with alternative future uses or discernible future benefits are capitalized and amortized over their estimated useful lives of two to five years .

Production masks with alternative future uses or discernible future benefits are capitalized and amortized over their estimated useful lives of five years .

To determine if a production mask has alternative future uses or benefits, the Company evaluates risks associated with developing new technologies and capabilities, and the related risks associated with entering new markets.

11 unchanged sentences

The Company tests by reporting unit, goodwill and other indefinite-lived intangible assets for impairment as of October 31 each year or more frequently if it believes indicators of impairment exist.

During development, IPR&D is not subject to amortization and is tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

The Company reviews indefinite-lived intangible assets for impairment using a qualitative assessment, followed by a quantitative assessment, as needed, each year as of October 31, the date of its annual goodwill impairment review, or whenever events or changes in circumstances indicate the carrying value may not be recoverable.

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During development, IPR&D is not subject to amortization and is tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Once an IPR&D project is complete, it becomes a finite-lived intangible asset and is evaluated for impairment both immediately prior to its change in classification and thereafter in accordance with the Company’s policy for long-lived assets.

10 unchanged sentences

variable consideration may be constrained but is continuously monitored and recognized as revenue when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and the uncertainty associated with the variable consideration is resolved.

The Company recognized a material amount of variable consideration during the three months ended March 31, 2024 as uncertainties related to such consideration were resolved.

The Company recognized a material amount of variable consideration during the six months ended June 30, 2024 as uncertainties related to such consideration were resolved.

During the three months ended June 30, 2024, there was no variable consideration recognized related to resolution of uncertainties related to such consideration.

In assessing whether collection of consideration from a customer is probable, the Company considers the customer’s ability and intention to pay that amount of consideration when it is due.

11 unchanged sentences

Most of the Company’s customers resell the Company’s product as part of their product and thus are tax-exempt;

however, to the extent the Company collects and remits taxes on product sales from customers, it has elected to exclude from the measurement of transaction price such taxes.

however, to the extent the Company

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

collects and remits taxes on product sales from customers, it has elected to exclude from the measurement of transaction price such taxes.

Each distinct promise to transfer products is considered to be an identified performance obligation for which revenue is recognized upon transfer of control of the products to the customer.

19 unchanged sentences

Accordingly, the Company reports under a single operating segment.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock-based Compensation

2 unchanged sentences

Stock-based compensation expense is then determined based on the number of restricted stock units that are expected to vest;

for performance-based restricted stock units, this is the number of

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

units that are expected to vest during the performance period if it is probable that the Company will achieve the performance metrics specified in the underlying award agreement.

for performance-based restricted stock units, this is the number of units that are expected to vest during the performance period if it is probable that the Company will achieve the performance metrics specified in the underlying award agreement.

The Company uses the Black-Scholes valuation model to calculate the fair value of stock options and employee stock purchase rights granted to employees.

6 unchanged sentences

Both of these types of income are reflected as a credit to research and development expense when such income has been earned and any contingencies associated with retaining such income have been resolved.

During the three months ended March 31, 2024 and 2023, the Company recognized income from jointly funded research and development projects of $ 0.9 million and $ 8.9 million, respectively.

In the three months ended June 30, 2024 and 2023, the Company recognized aggregate income from government grants of approximately $ 1.5 million and $ 1.0 million, respectively.

During the six months ended June 30, 2024 and 2023, the Company recognized aggregate income from government grants of approximately $ 2.4 million and $ 9.9 million, respectively.

While the Company retains ownership and rights to the underlying technology developed under the joint development projects, the Company may be required to repay all or a portion of the funds provided by the other parties under certain conditions, and defers such funds as liabilities until the repayment conditions have been resolved (Note 15).

13 unchanged sentences

If impairment indicators are present, the Company tests whether the carrying amount of the leased right-of-use asset is recoverable including consideration of sublease income, and if not recoverable, measures impairment loss for the right-of-use asset or asset group.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pension and Other Defined Benefit Retirement Obligations

3 unchanged sentences

Retirement benefit costs primarily represent the increase in the actuarial present value of the retirement benefit obligation.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company provides for income taxes utilizing the asset and liability approach of accounting for income taxes.

24 unchanged sentences

(i) information available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and (ii) the loss or range of loss can be reasonably estimated.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recently Issued, Not Yet Adopted Accounting Pronouncements

5 unchanged sentences

The impact of the adoption of the amendments in this update is not expected to be material to the Company’s consolidated financial position and results of operations.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In March 2024, the FASB issued ASU No.

23 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,

2024 2023 2024 2023

(in thousands, except per share amounts)

6 unchanged sentences

Diluted $ ( 0.47 ) $ ( 0.05 ) $ ( 1.35 ) $ 0.06

For the three months ended March 31, 2024 and 2023, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 5.0 million and 2.2 million, respectively, from the calculation of diluted net income (loss) per share due to their anti-dilutive nature.

For the three months ended June 30, 2024 and 2023, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 6.0 million and 5.4 million, respectively, from the calculation of diluted net loss per share due to their anti-dilutive nature.

For the six months ended June 30, 2024 and 2023, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 6.3 million and 3.2 million, respectively, from the calculation of diluted net income (loss) per share due to their anti-dilutive nature.

Business Combinations

15 unchanged sentences

The transaction consideration included $ 9.8 million in cash.

In addition, Company Y stockholders may receive up to an additional $ 2.6 million in potential contingent consideration, subject to the acquired business satisfying certain personnel objectives by June 17, 2024.

In addition, Company Y stockholders are eligible to receive $ 2.6 million in consideration due to the acquired business satisfying certain personnel objectives by June 17, 2024.

Company Y is headquartered in Bangalore, India and operates as a provider of engineering design services.

6 unchanged sentences

_________________

(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.

(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 due 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.

9 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.

Goodwill recorded in connection with Company Y was $ 11.7 million as of March 31, 2024.

Goodwill recorded in connection with Company Y was $ 11.7 million as of June 30, 2024.

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

4 unchanged sentences

Such restructuring plans may include terminating employees, vacating certain leased facilities, and cancellation of contracts.

During the year ended December 31, 2023, the Company entered into restructuring plans to reduce its workforce.

In the year ended December 31, 2023, we incurred $ 19.8 million in restructuring costs primarily related to severance costs and related expenses.

In the three months ended March 31, 2024, the Company completed notification to remaining affected employees of the reduction in workforce, and incurred $ 22.6 million in restructuring costs, or a cumulative total of $ 42.4 million.

Restructuring costs in the three months ended March 31, 2024 included $ 19.9 million in severance costs and related expenses, substantially all of which pertained to statutory severance benefits in the jurisdictions in which the terminated employees were employed, and $ 2.7 million in non-cash charges related to exiting facilities and writing off of assets.

Estimated restructuring costs remaining to be incurred for the restructuring plans pertain to write off of certain licenses and exiting of leased office space and are anticipated to occur in the remaining periods of 2024.

The remaining restructuring costs are not expected to be material.

The estimate of costs that we expect to incur, and the timing thereof, are subject to a number of assumptions and actual results may differ.

We may also incur other charges or cash expenditures not currently contemplated due to events that may occur as a result of, or associated with, the restructuring plans.

During the year ended December 31, 2023, the Company entered into restructuring plans to reduce its workforce, or the 2023 Workforce Reductions.

In the year ended December 31, 2023, the Company incurred $ 19.8 million in restructuring costs primarily related to severance costs and related expenses.

In the six months ended June 30, 2024, the Company completed notification to remaining affected employees of the 2023 Workforce Reductions, and incurred $ 23.5 million in restructuring costs, or a cumulative total of $ 43.3 million.

Restructuring costs in the six months ended June 30, 2024 included $ 19.8 million in severance costs and related expenses, substantially all of which pertained to statutory severance benefits in the jurisdictions in which the terminated employees were employed, and $ 3.7 million in non-cash charges related to exiting facilities and writing off of assets.

The Company does not expect to incur a material amount of additional restructuring costs associated with these restructuring plans.

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,

2024 2023 2024 2023

(in thousands)

1 unchanged sentence

Lease related charges 817 34 2,954 42

Other 193 115 748 166

$ 865 $ 4,436 $ 23,495 $ 9,084

The following table presents a roll-forward of the Company’s restructuring liability for the three months ended March 31, 2024.

The following table presents a roll-forward of the Company’s restructuring liability for the six months ended June 30, 2024.

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 135 ( 2,762 ) ( 662 ) ( 3,289 )

Liability as of March 31, 2024 20,533 301 769 21,603

current portion as of March 31, 2024 ( 20,533 ) ( 301 ) ( 769 ) ( 21,603 )

Long-term portion as of March 31, 2024 $ — $ — $ — $ —

Liability as of June 30, 2024 10,551 35 237 10,823

current portion as of June 30, 2024 ( 10,551 ) ( 35 ) ( 237 ) ( 10,823 )

Long-term portion as of June 30, 2024 $ — $ — $ — $ —

MAXLINEAR, INC.

4 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)

6 unchanged sentences

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, 2024 and 2023, there were no indications of impairment of the Company’s goodwill balances.

During the six months ended June 30, 2024 and 2023, 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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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

9 unchanged sentences

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,

2024 2023 2024 2023

(in thousands) (in thousands)

Cost of net revenue $ 5,336 $ 9,333 $ 13,804 $ 18,791

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)

8 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, 2024, no impairment losses related to finite-lived intangible assets were recognized.

During the three months ended March 31, 2023, impairment losses related to finite-lived intangible assets of $ 2.4 million, were recognized.

During the three and six months ended June 30, 2024, and the three months ended June 30, 2023, no impairment losses related to finite-lived intangible assets were recognized.

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

The impairment losses were attributable to certain purchased licensed technology.

The following table presents future amortization of the Company’s finite-lived intangible assets at March 31, 2024:

The following table presents future amortization of the Company’s finite-lived intangible assets at June 30, 2024:

(in thousands)

6 unchanged sentences

The composition of financial instruments is as follows:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in thousands)

7 unchanged sentences

The Company classifies its financial instruments that are categorized within Level 1 or Level 2 of the fair value hierarchy on the basis of valuations using quoted market prices or alternate pricing sources and models utilizing market observable inputs, respectively.

The contingent consideration liability as of March 31, 2024 and December 31, 2023 is associated with the Company’s acquisition of Company Y in January 2023 (Note 3).

The contingent consideration liability as of June 30, 2024 and December 31, 2023 is associated with the Company’s acquisition of Company Y in January 2023 (Note 3).

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

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 contingent consideration as it relates to Company Y was subject to the acquired business’s satisfaction of certain personnel objectives by June 17, 2024.

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 included an assumption of 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, 2024

Balance at March 31, 2024 Quoted Prices

Fair Value Measurements at June 30, 2024

June 30, 2024 Quoted Prices

Identical Assets

13 unchanged sentences

The following summarizes the activity in Level 3 financial instruments:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

Contingent consideration

2 unchanged sentences

Acquisitions (1) (Note 3)

Payments — ( 2,700 )

Accretion of discount (1)

2 unchanged sentences

_____________________

(1) These changes to the balance associated with the estimated fair value of contingent consideration for the three months ended March 31, 2024 and 2023 were due to the addition of contingent consideration associated with the acquisition of Company Y in January 2023 and accretion of discounts on contingent consideration.

(1) These changes to the balance associated with the estimated fair value of contingent consideration for the six months ended June 30, 2024 and 2023 were due to the addition of contingent consideration associated with the acquisition of Company Y in January 2023 and accretion of discounts on contingent consideration.

There were no transfers between Level 1, Level 2, or Level 3 fair value hierarchy categories of financial instruments.

for the three months ended March 31, 2024.

for the six months ended June 30, 2024.

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 as of March 31, 2024 and December 31, 2023.

Included in other long-term assets are investments in privately held entities of $ 11.8 million as of June 30, 2024 and December 31, 2023.

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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in thousands)

3 unchanged sentences

Total cash, cash equivalents and restricted cash $ 186,137 $ 188,356

As of March 31, 2024 and December 31, 2023, cash and cash equivalents included money market funds of approximately $ 110.9 million and $ 78.1 million, respectively.

As of March 31, 2024 and December 31, 2023, the Company had restricted cash of approximately $ 1.0 million and $ 1.1 million, respectively.

As of June 30, 2024 and December 31, 2023, cash and cash equivalents included money market funds of approximately $ 112.4 million and $ 78.1 million, respectively.

As of June 30, 2024 and December 31, 2023, the Company had restricted cash of approximately $ 1.0 million and $ 1.1 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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in thousands)

3 unchanged sentences

Property and equipment, net consists of the following:

(in Years) March 31, 2024 December 31, 2023

(in Years) June 30, 2024 December 31, 2023

(in thousands)

3 unchanged sentences

Masks and production equipment 5 59,598 54,240

59,948 54,240

Software 3 11,520 11,427

5 unchanged sentences

$ 65,422 $ 66,431

Depreciation expense for the three months ended March 31, 2024 and 2023 was $ 5.5 million and $ 6.4 million, respectively.

In March 2022, the Company entered into a note receivable with a supplier for $ 10.0 million which is included in other long-term assets as of March 31, 2024 and December 31, 2023, respectively.

Depreciation expense for the three months ended June 30, 2024 and 2023 was $ 5.7 million and $ 6.5 million, respectively.

Depreciation expense for the six months ended June 30, 2024 and 2023 was $ 11.2 million and $ 12.9 million, respectively.

In March 2022, the Company entered into a note receivable with a supplier for $ 10.0 million.

In September 2023, the terms of this note receivable were renegotiated, and the first initial repayment of $ 1.5 million is now due by March 31, 2025, and annual repayments of $ 1.7 million per year are due annually thereafter by March 31, from 2026 through 2030, provided that certain production utilization targets for the prior year are met.

The long-term portion of the note receivable is included in other long-term assets as of June 30, 2024 and December 31, 2023, respectively, and the current portion due of $ 1.5 million is included in other current assets as of June 30, 2024.

Previously, repayments of $ 2.0 million per year were due annually by March 31, in years 2024 through 2027.

Accrued price protection liability consists of the following activity:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

5 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The decrease in price protection liability from approximately $ 71.7 million as of December 31, 2023 to approximately $ 65.2 million as of March 31, 2024 was driven by increased sell-through activity by distributors to their end customers.

The decrease in price protection liability from approximately $ 71.7 million as of December 31, 2023 to approximately $ 61.6 million as of June 30, 2024 was driven by increased sell-through activity by distributors to their end customers.

Accrued expenses and other current liabilities consist of the following:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in thousands)

17 unchanged sentences

Balance at December 31, 2023 $ ( 5,059 ) $ 1,268 $ ( 3,791 )

Other comprehensive income (loss) before reclassifications, net of tax ( 1,782 ) — ( 1,782 )

Balance at March 31, 2024 $ ( 6,841 ) $ 1,268 $ ( 5,573 )

Other comprehensive loss before reclassifications, net of tax ( 2,725 ) — ( 2,725 )

Balance at June 30, 2024 $ ( 7,784 ) $ 1,268 $ ( 6,516 )

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in thousands)

9 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2024 and December 31, 2023, the weighted average effective interest rate on aggregate debt was approximately 7.9 % and 7.6 %, respectively.

During the three months ended March 31, 2024 and 2023, the Company recognized total amortization of debt discount and debt issuance costs of $ 0.2 million and $ 0.2 million, respectively, to interest expense.

The approximate aggregate fair value of the term loans outstanding as of March 31, 2024 and December 31, 2023 was $ 134.8 million and $ 135.7 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 (Note 6).

As of March 31, 2024, the outstanding principal balance of $ 125.0 million is due in full on June 23, 2028, upon maturity of the loan.

As of June 30, 2024 and December 31, 2023, the weighted average effective interest rate on aggregate debt was approximately 7.9 % and 7.6 %, respectively.

During the three months ended June 30, 2024 and 2023, 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, 2024 and 2023, 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, 2024 and December 31, 2023 was $ 115.0 million and $ 114.5 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 (Note 6).

As of June 30, 2024, 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, 2024, the Revolving Facility was undrawn.

As of June 30, 2024, 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 (now terminated) 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.

7 unchanged sentences

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.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

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.

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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, 2024, the Company was in compliance with such covenants.

As of June 30, 2024, 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.

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Employee Stock-Based Compensation Plans

At March 31, 2024, 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, 2023.

There have been no material changes to the terms of the Company’s equity incentive plans during the three months ended March 31, 2024.

As of March 31, 2024, the number of shares of common stock available for future issuance under the 2010 Plan was 16,548,604 shares.

As of March 31, 2024, the number of shares of common stock available for future issuance under the ESPP was 6,627,302 shares.

At June 30, 2024, 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, and a newly adopted plan, the 2024 Inducement Equity Incentive Plan, or the Inducement Plan.

Refer to the Company’s Annual Report for a summary of the 2010 Plan and the ESPP as of December 31, 2023.

On May 22, 2024, the Board of Directors adopted the Inducement Plan pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules, and, subject to the adjustment provisions of the Inducement Plan, reserved 4,000,000 shares of the Company's common stock for issuance under equity awards granted under the Inducement Plan.

The Inducement Plan provides for the grant of equity-based awards, including non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares, and its terms are substantially similar to the 2010 Plan, including with respect to treatment of equity awards in the event of a merger or “change in control” as defined under the Inducement Plan, but with such other terms and conditions intended to comply with the Nasdaq inducement award exception.

Awards under the Inducement Plan may only be made to individuals not previously employees or non-employee directors of the Company as an inducement material to the individuals’ entry into employment with the Company.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2024, the number of shares of common stock available for future issuance under the 2010 Plan was 15,881,163 shares.

As of June 30, 2024, the number of shares of common stock available for future issuance under the ESPP was 6,451,538 shares.

As of June 30, 2024, the number of shares of common stock available for future issuance under the Inducement Plan was 4,000,000 shares.

Employee Incentive Bonus

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In connection with the Company’s bonus programs, in February 2024, the Company issued 0.4 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 2023 performance period.

At March 31, 2024, the Company has an accrual of $ 7.6 million for bonus awards for employees for year-to-date achievement in the 2024 performance period, which the Company intends to settle primarily in shares of its common stock, unless otherwise required to be settled in cash due to local laws or agreements.

At June 30, 2024, the Company has an accrual of $ 4.8 million for bonus awards for employees for year-to-date achievement in the 2024 performance period, which the Company intends to settle primarily in shares of its common stock, unless otherwise required to be settled in cash due to local laws or agreements.

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

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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,

2024 2023 2024 2023

(in thousands) (in thousands)

Cost of net revenue $ 174 $ 246 $ 355 $ 456

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$ 17,359 $ 17,197 $ 34,420 $ 33,645

The total unrecognized compensation cost related to unvested restricted stock units as of March 31, 2024 was $ 146.6 million, and the weighted average period over which these equity awards are expected to vest is 2.37 years.

The total unrecognized compensation cost related to unvested performance-based restricted stock units as of March 31, 2024 was $ 9.1 million as a result of revised estimates of performance achievement levels as of that date, and the weighted average period over which these equity awards are expected to vest is 1.86 years.

The total unrecognized compensation cost related to unvested restricted stock units as of June 30, 2024 was $ 127.9 million, and the weighted average period over which these equity awards are expected to vest is 2.47 years.

The total unrecognized compensation cost related to unvested performance-based restricted stock units as of June 30, 2024 was $ 5.3 million, and the weighted average period over which these equity awards are expected to vest is 1.62 years.

Actual levels of future performance for the unvested periods may differ from current estimates.

The total unrecognized compensation cost related to unvested stock options as of March 31, 2024 was $ 29.5 million, and the weighted average period over which these equity awards are expected to vest is 3.89 years.

The total unrecognized compensation cost related to unvested stock options as of June 30, 2024 was $ 28.8 million, and the weighted average period over which these equity awards are expected to vest is 3.64 years.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Units

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

A summary of the Company’s restricted stock unit activity for all equity plans is as follows:

Number of Shares

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Outstanding at December 31, 2023 5,632 $ 36.72

Granted 2,299 18.78

Vested ( 1,993 ) 28.47

Canceled ( 551 ) 38.39

Outstanding at March 31, 2024 6,231 $ 31.18

Outstanding at June 30, 2024 5,848 $ 30.86

(1) Includes approximately 80 thousand shares granted under the Inducement Plan at a weighted-average grant-date fair value per share of $ 18.16 .

Performance-Based Restricted Stock Units

Performance-based restricted stock units are eligible to vest at the end of each year-long performance period, as defined in the underlying agreement, in a three-year performance period based on the Company’s annual growth rate in net sales and non-GAAP diluted earnings per share (subject to certain adjustments) over baseline results relative to the growth rates for a peer group of companies for the same metrics and periods.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the performance-based restricted stock units granted to date, 60 % of each performance-based award is subject to the net sales metric for the performance period and 40 % is subject to the non-GAAP diluted earnings per share metric for the performance period.

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, 2024, achievement to date under the performance metrics specified in the respective award agreements are 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, 2024, achievement to date under the performance metrics specified in the respective award agreements are 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.

To the extent any prior achievement levels are no longer probable, any compensation expense recorded is adjusted to the revised achievement levels.

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Canceled ( 601 ) 41.88

Outstanding at March 31, 2024 3,509 $ 26.15

Outstanding at June 30, 2024 3,465 $ 26.20

________________

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Employee Stock Purchase Rights

During the three months ended March 31, 2024 and 2023, there were no shares of common stock purchased under the ESPP.

During the six months ended June 30, 2024 and 2023, there were 175,764 and 140,631 shares of common stock purchased under the ESPP at a weighted average price of $ 15.26 and $ 21.25 , respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 $ 5.78 - $ 6.35

$ 7.56 - $ 11.97

Risk-free interest rate 5.40 % - 5.41 %

4.54 % - 5.24 %

Dividend yield — % — %

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Volatility 49.76 % - 70.46 %

51.73 % - 59.78 %

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.

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In addition, the estimated volatility incorporates the historical volatility over the expected term based on the Company’s daily closing stock prices.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Options

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Canceled ( 1 ) 23.75

Outstanding at March 31, 2024 3,023 $ 19.33 8.95 $ 4,493

Vested and expected to vest at March 31, 2024 3,023 $ 19.33 8.95 $ 4,493

Exercisable at March 31, 2024 335 $ 18.40 1.36 $ 811

Outstanding at June 30, 2024 3,023 $ 19.33 8.70 $ 5,884

Vested and expected to vest at June 30, 2024 2,785 $ 19.32 8.62 $ 5,447

Exercisable at June 30, 2024 335 $ 18.40 1.11 $ 965

The fair values of stock options 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 $ 10.84 - $ 11.24

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__________________

(1) No options were granted during the three months ended March 31, 2023.

(1) No options were granted during the three months ended June 30, 2024, and during the six months ended June 30, 2023.

The risk-free interest rate assumption was based on the United States Treasury’s rates for U.S.

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Estimated volatility incorporates historical volatility of the Company over the expected term based on the Company's daily closing stock prices.

The intrinsic value of stock options exercised was $ 0.5 million and $ 0.1 million in the three months ended March 31, 2024 and 2023, respectively.

Cash received from exercise of stock options was negligible during each of the three months ended March 31, 2024 and 2023.

The tax benefit from stock options exercised was $ 0.8 million and $ 0.1 million during the three months ended March 31, 2024 and 2023, respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The intrinsic value of stock options exercised was $ 0 and $ 0.1 million in the three months ended June 30, 2024 and 2023, respectively.

The intrinsic value of stock options exercised was $ 0.5 million and $ 0.2 million in the six months ended June 30, 2024 and 2023, respectively.

Cash received from exercise of stock options was negligible during each of the three and six months ended June 30, 2024 and 2023.

The tax benefit from stock options exercised was $ 0 and $ 0.1 million during the three months ended June 30, 2024 and 2023, respectively.

The tax benefit from stock options exercised was $ 0.8 million and $ 0.3 million during the six months ended June 30, 2024 and 2023, respectively.

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

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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.

The Company records a valuation

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

allowance to reduce its deferred taxes to the amount it believes is more likely than not to be realized.

The Company records a valuation allowance to reduce its deferred taxes to the amount it believes is more likely than not to be realized.

In making such determination, the Company considers all available positive and negative evidence quarterly, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance.

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

The Company recorded an income tax benefit of $ 1.8 million in the three months ended March 31, 2024 and an income tax provision of $ 15.6 million in the three months ended March 31, 2023.

The difference between the Company’s effective tax rate and the 21.0% United States federal statutory rate for the three months ended March 31, 2024 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items including tax credits, stock based compensation, and tax shortfalls related to stock-based compensation.

The Company recorded an income tax benefit of $ 2.1 million in the three months ended June 30, 2024 and an income tax benefit of $ 0.4 million in the three months ended June 30, 2023.

The Company recorded an income tax benefit of $ 3.8 million in the six months ended June 30, 2024 and an income tax provision of $ 15.2 million in the six months ended June 30, 2023.

The difference between the Company’s effective tax rate and the 21.0% United States federal statutory rate for the six months ended June 30, 2024 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items, and stock based compensation, tax shortfalls related to stock-based compensation, and release of uncertain tax positions under ASC 740-10.

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 the release of certain reserves for uncertain tax positions under ASC 740-10.

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

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 the release of uncertain tax positions under ASC 740-10.

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

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, 2024, the Company’s unrecognized tax benefits increased by $ 0.5 million.

During the six months ended June 30, 2024, the Company’s unrecognized tax benefits decreased by $ 0.3 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, 2024 were approximately $ 0.3 million and $ 0.01 million, respectively.

Accrued interest and penalties associated with uncertain tax positions as of June 30, 2024 were approximately $ 0.1 million and $ 4 thousand, respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, 2024, the statutes of limitations for the assessment of federal, state, and foreign income taxes are closed for the years before 2020, 2019, and 2017, respectively.

At June 30, 2024, the statutes of limitations for the assessment of federal, state, and foreign income taxes are closed for the years before 2020, 2019, 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.

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 three months ended March 31, 2024 and 2023 at the incentive rate.

The Company recorded income taxes in the six months ended June 30, 2024 and 2023 at the incentive rate.

Concentration of Credit Risk, Significant Customers and Geographic Information

7 unchanged sentences

The Company markets its products and services to manufacturers of a wide range of electronic devices (Note 1).

The Company sells its products both directly to end-customers and through third-party distributors, both of which are referred to as

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the Company’s customers (Note 12).

The Company sells its products both directly to end-customers and through third-party distributors, both of which are referred to as the Company’s customers (Note 12).

Revenue is also generated from sales of intellectual property, and the recipients of such intellectual property are also referred to as the Company’s customers.

1 unchanged sentence

Customers comprising 10% or greater 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,

2024 2023 2024 2023

Percentage of total net revenue

1 unchanged sentence

Customer B * * * 11 %

Customer C 15 % * 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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Percentage of gross accounts receivable

Customer C 32 % 33 %

Customer D 24 % 33 %

Customer E 15 % 24 %

Customer F 18 % *

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Significant Suppliers

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

Three Months Ended March 31,

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

2024 2023 2024 2023

Vendor A 17 % 11 % 12 % 19 %

4 unchanged sentences

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

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,

2024 2023 2024 2023

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

Asia $ 72,430 79 % $ 128,328 70 % $ 128,262 68 % $ 320,831 74 %

4 unchanged sentences

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,

2024 2023 2024 2023

Percentage of total net revenue

Hong Kong 34 % 32 % 31 % 31 %

China * 12 % * 14 %

Germany * 10 % * *

Malaysia 12 % * * *

____________________________

2 unchanged sentences

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 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.

Although a large percentage of the Company’s products is shipped to Asia, and in particular, Hong Kong and Malaysia, 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, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Amount % of total Amount % of total

3 unchanged sentences

Total $ 470,679 100 % $ 489,913 100 %

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,

2024 2023 2024 2023

Broadband $ 21,827 $ 53,549 $ 54,882 $ 135,230

7 unchanged sentences

Total net revenue $ 91,990 $ 183,938 $ 187,259 $ 432,380

Revenues from sales through the Company’s distributors accounted for 36 % and 43 % of net revenue for the three months ended March 31, 2024 and 2023, respectively.

Revenue related to the sales of intellectual property recognized during the three months ended March 31, 2024 has been allocated by market based upon the usage of such intellectual property.

Revenues from sales through the Company’s distributors accounted for 55 % and 53 % of net revenue for the three months ended June 30, 2024 and 2023, respectively.

Revenues from sales through the Company’s distributors accounted for 45 % and 47 % of net revenue for the six months ended June 30, 2024 and 2023, respectively.

Revenue related to the sales of intellectual property recognized during the six months ended June 30, 2024 has been allocated by market based upon the usage of such intellectual property.

Contract Liabilities

As of March 31, 2024 and December 31, 2023, customer contract liabilities were approximately $ 1.6 million and $ 1.6 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, 2024 and 2023 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, 2024 and 2023.

As of June 30, 2024 and December 31, 2023, customer contract liabilities were approximately $ 2.6 million and $ 1.6 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, 2024 and 2023 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, 2024 and 2023.

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

As of March 31, 2024 and December 31, 2023, obligations to customers consisting of estimates of price protection rights offered to the Company’s end customers totaled $ 65.2 million and $ 71.7 million, respectively, and are included in accrued price protection liability in the consolidated balance sheets.

As of June 30, 2024 and December 31, 2023, obligations to customers consisting of estimates of price protection rights offered to the Company’s end customers totaled $ 61.6 million and $ 71.7 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, 2024 were $ 36.8 million and $ 0.4 million, respectively, and as of December 31, 2023 were $ 54.8 million and $ 0.3 million, respectively, and are included in accrued expenses and other current liabilities in the consolidated balance sheets (Note 7).

The reason for the significant decrease in accrued obligations to customers for price adjustments from approximately $ 54.8 million as of December 31, 2023 to approximately $ 36.8 million as of March 31, 2024, was due to a significant decrease in sales to distributors which decreased the corresponding accrued obligations to such customers.

The increase or decrease in revenue in each of the three months ended March 31, 2024 and 2023 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, 2024 and December 31, 2023, 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 $ 0.1 million, respectively.

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

As of March 31, 2024 and December 31, 2023, there were no impairment losses recorded on customer accounts receivable.

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, 2024 were $ 20.5 million and $ 0.1 million, respectively, and as of December 31, 2023 were $ 54.8 million and $ 0.3 million, respectively, and are included in accrued expenses and other current liabilities in the consolidated balance

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

sheets (Note 7).

The reason for the significant decrease in accrued obligations to customers for price adjustments from approximately $ 54.8 million as of December 31, 2023 to approximately $ 20.5 million as of June 30, 2024, was due to a significant decrease in sales to distributors which decreased the corresponding accrued obligations to such customers.

The increase or decrease in revenue in each of the six months ended June 30, 2024 and 2023 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, 2024 and December 31, 2023, 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 $ 45 thousand and $ 0.1 million, respectively.

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

As of June 30, 2024 and December 31, 2023, there were no impairment losses recorded on customer accounts receivable.

Operating Leases

2 unchanged sentences

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, 2024 and December 31, 2023, the weighted average discount rate for operating leases was 4.7 % and 4.6 %, respectively, and the weighted average remaining lease term for operating leases was 3.7 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, 2024:

As of June 30, 2024 and December 31, 2023, the weighted average discount rate for operating leases was 4.7 % and 4.6 %, respectively, and the weighted average remaining lease term for operating leases was 3.6 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, 2024:

Operating Leases

4 unchanged sentences

imputed interest ( 3,297 )

unrealized translation loss ( 43 )

Total lease liabilities 31,147

1 unchanged sentence

Long-term lease liabilities $ 21,522

Operating lease cost was $ 2.6 million and $ 2.9 million for the three months ended March 31, 2024 and 2023, respectively.

Short-term lease costs for the three months ended March 31, 2024 and 2023 were not material.

There were $ 1.0 million and $ 0.2 million of right-of-use assets obtained in exchange for new lease liabilities for the three months ended March 31, 2024 and 2023, respectively.

Operating lease cost was $ 2.5 million and $ 2.5 million for the three months ended June 30, 2024 and 2023, respectively.

Operating lease cost was $ 5.1 million and $ 5.4 million for the six months ended June 30, 2024 and 2023, respectively.

Short-term lease costs for the six months ended June 30, 2024 and 2023 were not material.

There were $ 0.3 million and $ 12.0 million of right-of-use assets obtained in exchange for new lease liabilities for the three months ended June 30, 2024 and 2023, respectively.

There were $ 1.2 million and $ 12.2 million of right-of-use assets obtained in exchange for new lease liabilities for the six months ended June 30, 2024 and 2023, respectively.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Employee Retirement Plans

3 unchanged sentences

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

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pension and Other Defined Benefit Retirement Obligations

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

As of March 31, 2024, the net defined benefit obligation, primarily related to other defined benefit plans, was $ 0.4 million.

As of June 30, 2024, the net defined benefit obligation, primarily related to other defined benefit plans, was $ 0.4 million.

As of December 31, 2023, the net defined benefit obligation was $ 1.4 million.

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, 2024 and 2023, respectively, and were recorded to research and development expenses in the consolidated statements of operations.

Net periodic benefit costs were $ 48 thousand and $ 0.1 million for the three months ended June 30, 2024 and 2023, respectively, and were recorded to research and development expenses in the consolidated statements of operations.

Net periodic benefit costs were $ 0.2 million and $ 0.1 million for the six months ended June 30, 2024 and 2023, 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, 2024, future minimum payments under inventory purchase and other obligations are as follows:

As of June 30, 2024, future minimum payments under inventory purchase and other obligations are as follows:

Inventory Purchase Obligations Other Obligations Total

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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 $ 15.0 million received from the other parties as of March 31, 2024 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 $ 15.0 million received from the other parties as of June 30, 2024 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, 2024 and 2023, the Company did not recognize any previously deferred amounts from other parties due to resolution of such repayment conditions.

During the three and six months ended June 30, 2024 and 2023, the Company did not recognize any previously deferred amounts from other parties due to resolution of such repayment conditions.

Dispute with Silicon Motion

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Silicon Motion’s position is that MaxLinear’s Willful and Material Breaches (as such term is defined in the Merger Agreement) of the Merger Agreement prevented the Merger from being completed by August 7, 2023, and that MaxLinear is consequently liable for substantial monetary damages in excess of the termination fee as provided in the Merger Agreement.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On October 5, 2023, Silicon Motion filed a Notice of Arbitration with the Singapore International Arbitration Centre alleging that MaxLinear breached the Merger Agreement.

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MaxLinear remains confident in its decision and will vigorously defend its right to terminate the Silicon Motion transaction without penalty.

Class Action Complaint

Silicon Motion Stockholder Litigation

MaxLinear and certain of its officers have been named as defendants in two lawsuits brought by stockholders of Silicon Motion.

On August 31, 2023, a Silicon Motion stockholder filed a putative class action complaint in the United States District Court for the Southern District of California captioned Water Island Event-Driven Fund v.

MaxLinear, Inc., No.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

23-cv-01607 (S.D.

Cal.), against MaxLinear and certain of its current officers.

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On December 20, 2023, the court appointed the lead plaintiffs, who filed the Consolidated Complaint on February 15, 2024.

The Consolidated Complaint alleges that the defendants made false and misleading statements and/or omitted material facts that MaxLinear had a duty to disclose, concerning the Company’s ability and intention to timely close the merger with Silicon Motion, including that:

The Consolidated Complaint alleges that the defendants made false and misleading statements and/or omitted material facts that MaxLinear had a duty to disclose, concerning the Company’s intention to close the merger with Silicon Motion, including that:

(i) MaxLinear had allegedly decided it would not consummate the merger because the economic circumstances surrounding the merger had materially changed, including a material downturn in the semiconductor industry and rising interest rates;

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and (iv) as a result, MaxLinear had allegedly materially misrepresented the viability of the merger, the purported benefits of the merger, and the likelihood that the merger would be consummated.

The complaint seeks compensatory damages, including interest, costs and expenses and such other equitable or injunctive relief that the court deems appropriate.

The Consolidated Complaint seeks compensatory damages, including interest, costs and expenses and such other equitable or injunctive relief that the court deems appropriate.

MaxLinear will vigorously defend its position.

Defendants filed a motion to dismiss the Consolidated Complaint on March 29, 2024.

Plaintiffs’ response is due on May 13, 2024.

Defendants filed a motion to dismiss the Consolidated Complaint on March 29, 2024 and Plaintiffs’ filed an opposition on May 13, 2024.

Defendants filed a reply in support of the motion to dismiss on June 14, 2024.

On June 13, 2024, HBK Master Fund L.P.

and HBK Merger Strategies Master Fund L.P., stockholders of Silicon Motion, filed an additional complaint in the United States District Court for the Southern District of California captioned HBK Master Fund L.P.

MaxLinear, Inc., No.

24-cv-01033 (S.D.

Cal.), against MaxLinear and certain of its current officers.

The complaint includes seven claims:

(1) an alleged violation of Section 10(b) of the Exchange Act and Rule 10b-5(a) and (c) promulgated thereunder;

(2) an alleged violation of Section 10(b) of the Exchange Act and Rule 10b-5(b) promulgated thereunder;

(3) an alleged violation of Section 20(a) of the Exchange Act;

(4) an alleged violation of Section 18 of the Exchange Act;

(5) common law fraud;

(6) common law negligent misrepresentation;

and (7) alleged violations of California Civil Code Section 1709.

The complaint alleges that the defendants concealed their intention to terminate the merger with Silicon Motion from Silicon Motion’s shareholders.

The complaint seeks compensatory damages, including interest, costs and expenses, punitive damages, and such other equitable or injunctive relief that the court deems appropriate.

Defendants intend to vigorously defend these claims.

Comcast Litigation

On December 1, 2023, MaxLinear filed claims against Comcast Management, LLC and Comcast Cable Communications, LLC (together, “Comcast”) in the United States District Court for the Southern District of New York.

On December 1, 2023, MaxLinear filed claims against Comcast Management, LLC and Comcast Cable Communications, LLC, or together, Comcast, in the United States District Court for the Southern District of New York.

MaxLinear alleges that in 2020, MaxLinear shared its proprietary design and know-how for a full-duplex, or FDX, amplifier with Comcast in the hope of securing future business with Comcast.

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MaxLinear intends to amend and refile its trade-secret and related claims.

MaxLinear will vigorously defend its position.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dish Litigation

On February 10, 2023, Entropic Communications, LLC (“Entropic”) filed claims for patent infringement against Dish Network Corporation, Dish Network LLC, Dish Network Service, LLC, and Dish Network California Service Corporation in the United States District Court for the Central District of California.

On February 10, 2023, Entropic Communications, LLC, or Entropic, filed claims for patent infringement against Dish Network Corporation, Dish Network LLC, Dish Network Service, LLC, and Dish Network California Service Corporation in the United States District Court for the Central District of California.

At that time, MaxLinear was not a party to the action.

On September 21, 2023, Dish Network California Service Corporation (“Dish California”) filed four counterclaims against MaxLinear.

On September 21, 2023, Dish Network California Service Corporation, or Dish California, filed four counterclaims against MaxLinear.

The four claims are declaratory judgment, breach of contract, fraud and negligent misrepresentation, and civil conspiracy.

On January 31, 2024, the Dish defendants, together with DISH Technologies L.L.C.

(collectively, “Dish”), filed eight counterclaims (amended counterclaims for Dish California) against MaxLinear.

On January 31, 2024, the Dish defendants, together with DISH Technologies L.L.C., or collectively, Dish, filed eight counterclaims (amended counterclaims for Dish California) against MaxLinear.

The eight counterclaims are (1) breach of contract, (2) fraud and negligent misrepresentation, (3) fraud arising from a civil conspiracy, (4) quasi-contract for restitution/unjust enrichment, (5) combination in restraint of trade, (6) violation of the Cartwright Act (by Dish California only), (7) patent misuse, and (8) violation of Cal.

Code § 17200 et seq.

Dish’s eight counterclaims revolve around a core allegation that MaxLinear is a member of the Multimedia over Coax Alliance (MoCA) and that MaxLinear violated its obligation under MoCA’s Intellectual Property Rights Policy (“IPR Policy”) by acting with Entropic to rid the asserted patents of the RAND encumbrances.

Dish’s eight counterclaims revolve around a core allegation that MaxLinear is a member of the Multimedia over Coax Alliance (MoCA) and that MaxLinear violated its obligation under MoCA’s Intellectual Property Rights Policy, or IPR Policy, by acting with Entropic to rid the asserted patents of the RAND encumbrances.

Dish seeks an unspecified amount of compensatory damages, disgorgement, attorneys’ fees, experts’ fees, and costs.

On February 21, 2024, MaxLinear moved to dismiss the Dish defendants’ counterclaim.

On April 22, 2024, a Special Master issued a report and recommendation, or the R&R, which recommended granting the motion to dismiss with prejudice as to the following counterclaims:

(1) quasi-contract for restitution/unjust enrichment, (2) combination in restraint of trade, (3) violation of the Cartwright Act, (4) patent misuse, and (5) violation of Cal.

Code § 17200.

MaxLinear submitted objections to the R&R as to the remaining claims that were not dismissed.

Dish submitted objections to the R&R’s recommended dismissal of the quasi-contract for restitution/unjust enrichment counterclaim.

The court has not yet issued any ruling regarding the R&R or MaxLinear’s pending motion to dismiss.

MaxLinear will vigorously defend its position.

Cox Litigations

On February 10, 2023, Entropic sued Cox Communications, Inc., CoxCom, LLC, and Cox Communications California, LLC (together, “Cox”) in two separate actions in the United States District Court for the Central District of California.

On February 10, 2023, Entropic sued Cox Communications, Inc., CoxCom, LLC, and Cox Communications California, LLC, or together, Cox, in two separate actions in the United States District Court for the Central District of California.

On October 6, 2023, Cox filed counterclaims against MaxLinear in each of the two actions.

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In the first action, Cox alleges that when MaxLinear assigned certain patents to Entropic, MaxLinear violated its obligations under MoCA’s IPR Policy by assigning these patents and by allegedly failing to ensure that Cox would be offered a FRAND license for these patents.

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Cox seeks an unspecified amount of compensatory damages, equitable relief, attorneys’ fees, expenses, and costs.

MaxLinear moved to dismiss Cox’s amended counterclaims on February 6, 2024.

On April 22, 2024, a Special Master issued the R&R, which recommended granting the motion to dismiss with prejudice as to the unjust enrichment counterclaim but denying the motion as to the breach of contract and declaratory judgment counterclaims.

MaxLinear submitted objections to the R&R’s denial-in-part.

Cox submitted objections to the R&R as to the unjust enrichment counterclaim and as to certain findings related to the breach of contract counterclaim.

The court has not yet issued any ruling regarding the R&R or MaxLinear’s pending motion to dismiss.

In the second action, in response to Entropic suing Cox for patent infringement, Cox filed counterclaims against MaxLinear.

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Cox seeks an unspecified amount of compensatory damages, equitable relief, attorneys’ fees, expenses, and costs.

MaxLinear moved to dismiss Cox’s amended counterclaims on February 6, 2024.

On April 22, 2024, a Special Master issued the R&R, which recommended dismissing all Cox counterclaims with prejudice.

Cox submitted objections to the R&R as to the unjust enrichment counterclaim.

The court has not yet issued any ruling regarding the R&R or MaxLinear’s pending motion to dismiss.

MaxLinear will vigorously defend its position.

The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

As of March 31, 2024, no material loss contingencies have been accrued for litigation and other legal claims in the consolidated financial statements, since the Company’s management currently does not believe that the ultimate outcome of any of the matters described above is probable.

As of June 30, 2024, no material loss contingencies have been accrued for

MAXLINEAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

litigation and other legal claims in the consolidated financial statements, since the Company’s management currently does not believe that the ultimate outcome of any of the matters described above is probable.

An unfavorable outcome of these matters may be reasonably possible in excess of recorded amounts;

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On February 23, 2021, the Company’s board of directors authorized a plan to repurchase up to $ 100 million of the Company’s common stock over a period ending February 16, 2024.

The amount and timing of repurchases are subject to a variety of factors including liquidity, share price, market conditions, and legal requirements.

Any purchases will be funded from available working capital and may be effected through open market purchases, block transactions, and privately negotiated transactions.

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 previously pending (now terminated) merger with Silicon Motion (Note 3).

During the three months ended March 31, 2024, the Company did no t repurchase any shares of its common stock under the repurchase program.

At March 31, 2024, 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.

Table of Co ntents

The amount and timing of repurchases were subject to a variety of factors including liquidity, share price, market conditions, and legal requirements.

Any purchases were funded from available working capital and were effected through open market purchases, block transactions, and privately negotiated transactions.

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

The share repurchase program was suspended from July 2022 until its expiration due to the Company’s previously pending (now terminated) merger with Silicon Motion (Note 3).

As a result, during the six months ended June 30, 2024, the Company did no t repurchase any shares of its common stock under the repurchase program.

At June 30, 2024, the aggregate value of common stock repurchased under the program was approximately $ 55.0 million and no shares remained available for repurchase under the program, as the plan expired on February 16, 2024.

Subsequent Events

Workforce Reduction

In July 2024, the Company is initiating a reduction of its workforce, or the 2024 Workforce Reduction, to align its operational needs with the changes in macroeconomic conditions and the demand environment, while continuing to support its long-term business strategy by reducing its operating expenses.

As a result of the 2024 Workforce Reduction, the Company estimates that it will incur approximately $ 15 million to $ 20 million in cash severance and related costs.

The Company expects to complete notifications to employees regarding the 2024 Workforce Reduction by the end of 2024.

The estimate of costs that the Company expects to incur, and the timing thereof, are subject to a number of assumptions and actual results may differ.

The Company may also incur other charges or cash expenditures not currently contemplated due to events that may occur as a result of, or associated with, the 2024 Workforce Reduction.

All statements other than statements of historical facts contained in the paragraphs above are forward-looking statements including statements relating to the Company’s plans, expectations, forecasts and future events.

Such forward-looking statements include, but are not limited to, the potential of, and expectations regarding the Company’s statements relating to the expected impacts, charges and costs associated with the 2024 Workforce Reduction that the Company expects to incur.

Table o f Contents

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