MaxLinear (MXL) Q4 2025 Earnings Call Transcript

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DATE

Thursday, January 29, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Dr. Kishore Seendripu
• Chief Financial Officer and Chief Corporate Strategy Officer — Steven Litchfield
• Investor Relations — Leslie Green

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TAKEAWAYS

• Revenue -- $136.4 million in Q4, up 8% sequentially and 48% year over year.
• Full-Year Revenue Growth -- 30% increase, attributed to new product adoption across several high-growth end markets.
• Infrastructure Revenue -- approximately $47 million for the quarter; segment grew 76% year over year in Q4 and 30% for the full fiscal year.
• Broadband Revenue -- $58 million in Q4.
• Connectivity Revenue -- $18 million in Q4.
• Industrial Multimarket Revenue -- $14 million in Q4.
• GAAP Gross Margin -- 57.6%; Non-GAAP Gross Margin -- 59.6%; approximately $2.6 million delta due to acquisition-related intangible amortization.
• GAAP Operating Expenses -- $93.5 million; Non-GAAP Operating Expenses -- $59.2 million, with $28.1 million in stock-based and equity accruals, and $6 million in acquisition-related costs explaining the difference.
• GAAP Loss from Operations -- 11% of net revenue; Non-GAAP Income from Operations -- 16% of net revenue.
• Net Cash Flow from Operating Activities -- approximately $10.4 million in Q4.
• Cash, Cash Equivalents, and Restricted Cash -- approximately $101.4 million at quarter-end, cited as ahead of internal 2025 plan.
• Share Repurchases -- approximately $20 million of common stock repurchased in Q4; $75 million buyback program authorized.
• Days Sales Outstanding -- Decreased to approximately 31 days in Q4.
• Inventory -- Down $8 million from the previous quarter; days of inventory improved to approximately 130 days.
• Optical DSP Keystone Revenue Guidance -- $100 million to $130 million expected in 2026, with management noting “potential upside.”
• PAM4 DSP Shipment Units -- Forecast of 4 million to 6 million units in 2026.
• Panther Storage Accelerator Outlook -- Management expects accelerator revenue to “at least double” in 2026 versus 2025, and potentially again in 2027.
• First PON Data Center Design Win -- Secured with a major Tier 1 U.S. OEM in Q4 for control-plane applications in data centers.
• Guidance for Q1 2026 Revenue -- $130 million to $140 million expected; segment commentary indicates growth in infrastructure, seasonal declines in broadband, connectivity, and multi-market.
• Q1 2026 GAAP Gross Margin Guidance -- approximately 56%-59%; Non-GAAP Gross Margin Guidance -- in the range of 58%-61%.
• Q1 2026 GAAP Operating Expenses Guidance -- in the range of $85 million to $90 million; Non-GAAP OpEx Guidance -- in the range of $58 million to $64 million.
• Q1 2026 GAAP Interest and Other Expense Guidance -- in the range of approximately $2.1 million to $2.7 million; Non-GAAP Guidance -- in the range of approximately $2 million to $2.6 million, with currency volatility noted as a risk.
• Tax Provision Guidance for Q1 2026 -- $4 million on a GAAP basis, approximately $0.8 million on a non-GAAP basis.
• Expected Share Count for Q1 2026 -- Basic: approximately 88 million; Diluted: approximately 91 million.
• Infrastructure Forward Outlook -- Management anticipates infrastructure to become the largest revenue category in 2026.
• Design Wins -- Multiple product design wins entering production, cited as drivers of growth for 2026 and 2027.

SUMMARY

Management outlined a trajectory in which infrastructure is expected to become MaxLinear (NASDAQ:MXL)'s largest revenue segment, with optical and storage accelerator momentum reinforced by recent design wins at major data center and carrier customers across North America. The Keystone optical DSP product line is anticipated to generate $100 million to $130 million in 2026 revenue, and the Rushmore next-generation PAM4 products are on track for production revenue by the end of 2026, addressing evolving data center needs. The company reported continued improvements in operating efficiency, reflected in both gross margin and working capital metrics, and signaled additional operating leverage from investments in high-growth, multiyear opportunities such as Wi-Fi 7, Ethernet, and AI-driven data center technologies.

• Bookings remain robust, visibility continues to improve, and management stated that the company is entering 2026 with strong momentum across its portfolio.
• The Panther 5 hardware storage accelerator SoC and portfolio expansion into rack management and server interconnects position the company for broader AI data center exposure.
• Second major Tier 1 North American PON revenue ramp is expected to build from Q2 and Q3 2026.
• The company articulated that data center opportunities extend across optical, control-plane PON, rack telemetry, and power management, with several of these verticals still in early adoption stages.
• Share buyback activity reflects board and management confidence in business performance and outlook.
• While Q1 2026 guidance suggests sequential broadband softness, increasing visibility in infrastructure offsets this, and management expects both Wi-Fi and Ethernet within connectivity to grow during the year.

INDUSTRY GLOSSARY

• PAM4 DSP: Digital signal processors utilizing four-level pulse amplitude modulation, central to high-speed optical data center interconnects.
• PON: Passive optical network, a cost-effective fiber-optic telecommunications technology for broadband access and control plane connectivity.
• LRO / LPO / CPO: Varied optical architectures—Linear Receive Optics, Linear Pluggable Optics, and Co-Packaged Optics—targeting next-generation data center network deployments.
• Panther Storage Accelerator: MaxLinear’s hardware-based compression and memory access silicon solution for storage and AI-intensive network applications.

Full Conference Call Transcript

Leslie Green: Thank you, Diego. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear's fourth quarter 2025 financial results. Today's call is being hosted by Dr. Kishore Seendripu, CEO; and Steve Litchfield, Chief Financial Officer and Chief Corporate Strategy Officer. After our prepared comments, we will take your questions. Our comments today include forward-looking statements within the meaning of applicable securities laws, including statements relating to our guidance for the first quarter of 2026, including revenue, GAAP and non-GAAP gross margin, GAAP and non-GAAP operating expenses, GAAP and non-GAAP interest and other expense, GAAP and non-GAAP income taxes and basic and diluted share count.

In addition, we will make forward-looking statements relating to trends, opportunities, execution of our business plan and potential growth and uncertainties in various product and geographic markets, including, without limitation, statements concerning future financial and operating results, opportunities for revenue and market share across our target markets, new products, including the timing of production and launches of such products, demand for and adoption of certain technologies and our total addressable market. These forward-looking statements involve substantial risks and uncertainties, including risks outlined in our Risk Factors section of our recent SEC filings, including our Form 10-K for the year ended December 31, 2025, which we filed today.

Any forward-looking statements are made as of today, and MaxLinear has no obligation to update or revise any forward-looking statements. The fourth quarter 2025 earnings release is available in the Investor Relations section of our website at maxlinear.com. In addition, we report certain historical financial metrics, including, but not limited to, gross margin, income or loss from operations, operating expenses, interest and other expense and income tax on both a GAAP and non-GAAP basis. We encourage investors to review the detailed reconciliation of our GAAP and non-GAAP presentations in the press release available on our website.

We do not provide a reconciliation of non-GAAP guidance for future periods because of the inherent uncertainty associated with our ability to project certain future changes, including stock-based compensation and its related tax effects as well as potential impairments. Non-GAAP financial measures discussed today are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures. We are providing this information because management believes it is useful to investors as it reflects how management measures our business. Lastly, this call is also being webcast, and the replay will be available on our website for 2 weeks. And now let me turn the call over to Dr. Kishore Seendripu, CEO of MaxLinear. Kishore?

Kishore Seendripu: Thank you, Leslie, and wishing you all a very happy New Year and good afternoon. For MaxLinear, 2025 marked a clear inflection year with resurgent growth. We delivered 30% revenue growth year-over-year, driven by strong execution and accelerating adoption of our newest products across multiple high-growth end markets. We delivered profitability and positive cash flow ahead of plan. During the fourth quarter, we repurchased $20 million worth of our common stock, reflecting our confidence in our sustained growth expectations and market momentum. Bookings remain robust, visibility continues to improve, and we are entering '26 with strong momentum across our portfolio.

We are executing against a focused strategy that is working and will drive sustained strong growth in '26 and '27, investing in high-value multiyear growth markets where performance, power efficiency and integration matter most. These include data center connectivity, wireless infrastructure, storage acceleration, PON broadband access, Wi-Fi 7 and Ethernet end markets. Our infrastructure business is scaling rapidly. Revenue grew 30% for the full year and 76% in Q4 year-on-year, driven by strong growth in data center optical interconnects, wireless infrastructure and early but meaningful contributions from storage accelerators. Importantly, multiple new design wins are now entering production, positioning us to grow faster in '26 than we did in '25.

In 2026, we expect to achieve a significant and exciting milestone. Our infrastructure category should emerge as the single largest contributor to our overall revenues. In high-speed data center optical interconnects, our Keystone PAM4 DSP family is now ramping at major hyperscale data centers in both the U.S. and Asia, supporting 400-gig and 800-gig deployments, both for scale-up and scale-out applications. Additional customer ramps are expected throughout the year. Based on this improved visibility, we expect Keystone to generate about $100 million to $130 million in revenue in '26 with potential upside along with a further step function increase in run rate as we move into 2027.

Power efficiency has been a defining competitive advantage for MaxLinear, and we are extending that leadership with Rushmore, our next-generation family of PAM4 TIAs and 200-gig per lane DSPs targeting 1.6 terabit interconnects. Rushmore is foundational for next wave of data center optical architectures, including LRO, electrical retimers, AECs, LPOs and co-packaged optics. With Keystone validating our execution performance leadership, customer engagement for Rushmore is accelerating faster than expected. We expect Rushmore production revenue ramp starting at the end of 2026. We expect a strong showing at OFC in March this year. Also, cloud data centers are now deploying 10-gigabit XGS-PON as a robust dedicated fail-proof control plane conduit for managing high-speed data traffic between data centers.

In Q4, we secured our first PON data center design win addressing this application with a major Tier 1 U.S. OEM provider to Tier 1 data centers in this next-generation design. Recently, we also won analog serial transceiver and bridge interface designs for rack management in AI servers at two major U.S. data centers. This is further evidence of how MaxLinear's broad and deep technology portfolio comprising optical interconnect storage accelerators, PON and analog offerings is growing inside the AI data center. Within infrastructure, our Panther hardware storage accelerator SoC family continues to gain design win traction with Tier 1 network appliance and cloud service providers.

Ongoing storage and hybrid memory constraints for AI scale-up and compute are reinforcing the value of Panther's hardware-based compression, high throughput and ultra-low latency memory data access. In Q3, Q4, we started sampling Panther 5 to leading customers and our partners, including Advanced Micro Devices or AMD. Panther 5 delivers unprecedented ultra-low latency at 450 gigabits per second throughput and PCIe Gen 5 connectivity. Based on our engagements, we expect strong accelerator revenue to at least double in 2026 versus 2025 and potentially again in 2027. In wireless infrastructure, increasing carrier CapEx spending is expected to drive sustained demand through 2026 and beyond as the need for cloud and edge AI functionality continues to grow.

Additionally, our Sierra 5G wireless access single-chip radio SoC and our millimeter wave and microwave backhaul transceivers and modems are seeing robust OEM customer design-in activity and deployments in multiple Tier 1 carriers are going as per plan. Moving to broadband and connectivity. We delivered another strong revenue quarter across fiber PON, cable DOCSIS and Wi-Fi, driven by the early increases in service provider CapEx spend and continued booking strength and incremental demand. In Q4, we began the large-scale deployment of our single-chip fiber PON and 10-gigabit processor gateway SoC plus tri-band Wi-Fi 7 solution with a second major Tier 1 North American carrier.

This was a significant competitive win that expands content per box, fiber PON revenue and market share in 2026. In cable broadband, after a strong 2025, we expect a seasonally soft first half and cable revenue to be down in '26 as the industry transitions and pending a multiyear DOCSIS 4 upgrade cycle starting at the end of 2026. Additionally, in the stand-alone Ethernet market, we expect 2026 to be strong as our 2.5 gigabit Ethernet switch and PHY portfolio expands into commercial, enterprise and industrial applications. In summary, we entered 2026 with multiple growth engines ramping simultaneously, driven by expanding customer adoption and secular market trends moving in our favor.

Our investments over the past several years have uniquely positioned MaxLinear to deliver sustained growth, operating leverage and long-term shareholder value. We are excited about the opportunities ahead and confident in our ability to execute. With that, let me now turn the call over to Steve Litchfield, our Chief Financial Officer and Chief Corporate Strategy Officer. Steve?

Steven Litchfield: Thanks, Kishore. Total revenue for the fourth quarter was $136.4 million, up 8% from $126.5 million in the previous quarter and up 48% from $92.2 million in the fourth quarter of 2024. Infrastructure revenue for the fourth quarter was approximately $47 million. Broadband revenue was approximately $58 million, connectivity revenue was approximately $18 million and industrial multimarket revenue was approximately $14 million. GAAP and non-GAAP gross margins for the fourth quarter increased to approximately 57.6% and 59.6% of revenue. The delta between GAAP and non-GAAP gross margin in the fourth quarter was primarily driven by $2.6 million of acquisition-related intangible asset amortization. Fourth quarter GAAP operating expenses were $93.5 million and non-GAAP operating expenses were $59.2 million.

The delta between GAAP and non-GAAP operating expenses was primarily due to stock-based compensation and performance-based equity accruals of $28.1 million combined and acquisition-related costs of $6 million. GAAP loss from operations for Q4 2025 was 11% and non-GAAP income from operations in Q4 was 16% of net revenue. GAAP and non-GAAP interest and other expense during the quarter was $2.9 million and $2.8 million. In Q4, net cash flow from operating activities was approximately $10.4 million. As Kishore mentioned, we were active in our buyback program in Q4, repurchasing approximately $20 million of our common stock. As such, we exited Q4 of 2025 with approximately $101.4 million in cash, cash equivalents and restricted cash ahead of our 2025 plan.

Our days sales outstanding was down in Q4 to approximately 31 days. Our inventory was down by approximately $8 million versus the previous quarter with days of inventory improving to approximately 130. This concludes the discussion of our Q4 financial results. With that, let's turn to our guidance for Q1 of 2026. We currently expect revenue in the first quarter of 2026 to be between $130 million and $140 million. Looking at Q1 by end market, we expect to see growth from infrastructure, but some seasonal declines in broadband connectivity and industrial multi-market.

We expect first quarter GAAP gross margin to be approximately 56% to 59% and non-GAAP gross margin to be in the range of 58% and 61% of revenue. We expect Q1 2026 GAAP operating expenses to be in the range of $85 million to $90 million. We expect Q1 2026 non-GAAP operating expenses to be in the range of $58 million to $64 million. We expect our Q1 GAAP interest and other expense to be in the range of approximately $2.1 million to $2.7 million. We expect our Q1 non-GAAP interest and other expense to be in the range of approximately $2 million to $2.6 million, with FX volatility being the primary risk.

We expect a $4 million tax provision on a GAAP basis and a non-GAAP tax provision of approximately $0.8 million. We expect our Q1 basic and diluted share count to be approximately 88 million and 91 million, respectively. In closing, with strong bookings and improving visibility, we expect to see solid growth in 2026, driven by new design wins and expanding content opportunities across our product portfolio. We believe we are well positioned, well in large and growing markets that will be transformative to our business as well as continue to innovate on high-value solutions for our customers that solve next-generation challenges.

We will continue to focus on our investment in areas of strategic importance and confident that we will build a solid foundation to deliver sustainable growth and profitability in 2026 and beyond. With that, I'd like to open up the call for questions. Operator?

Operator: [Operator Instructions] And your first question comes from Tore Svanberg with Stifel.

Tore Svanberg: Congrats on the results here. Kishore, I was hoping you could talk a little bit more about the PAM4 DSP business. So there's obviously a lot of headlines and things out there on LPO and CPO, but you seem to be seeing more and more traction, more and more design wins. It sounds like Rushmore is getting pulled in somewhat. So can you just walk through some of those dynamics because obviously, that will give us better confidence about the continuous growth of PAM4 in '26 and '27.

Kishore Seendripu: So thank you, Ross -- sorry, thank you, Tore, for the question. Obviously, this is a pretty significantly confidence boosting growth that we are seeing. We were guiding to $110 million to $130 million. That's a very positive statement about our traction. And we are in the initial phases of the ramp of our 800-gig product solution and need to really pick up more steam and energy in the second half. The market as a whole is still a pluggable market, which is growing very, very fast. And the LPO deployments as such are very nichey right now. And I really look at the LPOs per se as a very small fraction of the market and not long term.

The LROs, for example, I think they have got some traction, but there'll be a market that is substantially pluggables, and there'll be a fraction of the market in LROs, and LPOs will be sort of in a very, very controlled environment, limited deployments potentially in 800 gig, but less so on 1.6 terabits. So that's our view of the marketplace. Obviously, there's a market that's also beyond that, which is the -- as the scale-up continues, there will be electrical retimers, and that's going to be a huge volume on -- in the scale-up world as well.

Talking of CPOs, people are doing CPOs today as sort of your feet in the market, but it still is early innings for CPO. And in the long term, there will be a market that is going to be more varietal than just pure CPOs, the O in the CPO being many number of ways of doing it. Obviously, there's a silicon play within the CPO market as well. That is what I call a wide IF fast throughput through the optical, and we expect ourselves to be a player as the market evolves. As MaxLinear, we're going to be very focused and disciplined and PAM4 is a huge growing market.

We are developing a strong foothold, though we are not the incumbents. But I think today in the world, we are the -- we can safely claim with the top 3 deployers of PAM4 DSP. And as the market strengthens, we hope to branch out and diversify our offerings of what you all know is a very, very robust technology portfolio. I hope that gives you some sense of our technology positioning. From a growth point of view, this year, we expect that there could even be upside depending on how the ramps proceed beyond the one that we feel fairly confident on the visibility and the outlook we have based on the bookings so far in 2026.

I hope that answers your question.

Tore Svanberg: Yes. No, that's great color. And as my follow-up, I had a question on the broadband business. And how should we think about the trajectory there as we move throughout the year? You did mention you expect it to be down year-over-year because of the sort of transition to DOCSIS 4.0 or the industry waiting for 4.0. What type of decline are we talking about? I know you guided to be down seasonally in Q1, but will it sort of decline every quarter this year? Is it going to be more of a modest decline? Any more color there would be very helpful.

Steven Litchfield: Maybe, Tore, I'll take that one. So we did mention that the seasonality certainly plays a role. We're also seeing the upgrade cycle, right, in DOCSIS 4.0. That probably starts the latter half of the year. And so it will come down in the first half of the year and then probably start to build in the second half. So overall, for the year, I do expect it to be down. We did talk a lot about the PON business, right, and the win that we have there. So we are excited about that. But even with that, it's still early days in it. And so that's why we do expect to see the broadband business down for the year.

Kishore Seendripu: Yes. I think the PON is a substantial opportunity, the new Tier 1 that's ramping. And based on the ramp itself, there is potential for not to see a downturn, so to speak. And PON is going very nicely, and we're grabbing market share. And we have many number of designs that we did not have before that will really kick steam in '27 as well.

Operator: And your next question comes from David Williams with Benchmark Company.

David Williams: Congrats on the solid execution. I guess maybe first, just around the data center opportunity. Obviously, the DSP is doing really well, but you've got other components that are going into that segment as well. Can you help us kind of understand maybe what the magnitude of opportunity within the data center is and where you're playing and kind of how you think that plays out through the year in addition to the DSP?

Kishore Seendripu: So David, this is early innings for us, right? I mean we have to say that. And the big entree is right now with the PAM4 transceivers. And this year, we could do anywhere between 4 million to 6 million units of PAM4 transceivers, right? So -- but the other hand, the data center is not just a PAM4 world. There are compute tracks. There are communications between data centers. And that market itself will grow as the data center clusters increase and the number of data centers increase as well.

So we talked about this exciting design win with the Tier 1 OEM who is supplying to Tier 1 data centers and of using PON as a control play layer, not where the data itself is going through between data centers. And there, we are clearly the leaders in the PON silicon offering. And so we should be very well positioned. So that could be a few -- that market size, some of these OEMs have talked about hundreds of millions of dollars of value for the silicon play. So that's one opportunity. So it won't happen in 1 year. It will roll out over the next 2 years.

Hopefully, we'll start seeing in '27 and then it grows beyond that. And then there's the other thing where these racks have become really -- these compute racks and server racks have become very, very, very sophisticated. They have their own telemetrics. Even the racks are being controlled with microcontrollers and so on and so forth. So you need industrial quality sort of transceivers, serial bridges and so on and so forth and even smart power management and stuff and then overall control in the rack. So the rack itself is a huge beast by itself. So we are beginning to start getting design wins in that, and that could be a pretty huge play per rack, if you will.

So at this point, I am not very what I call -- I don't want to provide market sizing at a level that we need to ascertain. But that market is very, very huge. There are a number of players, but we have the portfolio depth to participate in all the big spend that is happening as data centers are being built out.

David Williams: And then maybe just secondly, for you, Steve. Just looking at the share repurchase authorization, that clearly signals some confidence, I think, in the growth trajectory, but also on the potential arbitration there. So maybe if you could just kind of speak around the share repurchase authorization and how we should be thinking about that and what you're telegraphing to the Street.

Steven Litchfield: Yes, David, absolutely. No, I think the Board took some actions last quarter, authorizing $75 million of buyback, took action on it in the quarter, felt the stock was a good place that we wanted to act on it. But frankly, I think the Board really wanted to just convey the confidence in the balance sheet. The cash flow improvement, we've talked about it running ahead of plan. It has run ahead of plan now for 3 quarters in a row. Revenue stability and the outlook that we have from the business continues to improve. And so I think our actions kind of follow that and including the mention of the arbitration as well.

Operator: Your next question comes from Ross Seymore with Deutsche Bank.

Ross Seymore: Congrats on the strong end to the year and beginning of this one. Kishore, on the optical side, a couple of different questions have already been asked. But the competitive landscape, how are you envisioning that going from Keystone to Rushmore? Do you think your positioning gets even stronger? Are there -- the different technologies coming in create more competitive pressure? Just how do you think MaxLinear is positioned as we look forward?

Kishore Seendripu: Thank you, Ross. I won't call it Tore, but just joking here. Very, very good question. Both of you are complimented. So the strengthening is absolutely a word I love on the next-generation 1.6 terabit, our position is strengthening. We're gaining some ground and strengthening versus the competition. And I really feel that we are actually now speeding up a bit relative to where we were. And we are now -- we feel that we will really start pulling our weight as 1.6 terabit rolls out.

And beyond that, what we call our big [ Sky ] product, 4 gig, 400 gigabit per lane, I think we show our capabilities, our strong low-power implementation capabilities, integration and very, very well-developed RF mixed signal skills. I think we will strengthen our position, and we are strengthening in certain geographies and 800 gig, we are -- we have strengthened our relative position. Within the U.S., just the timing of our product offerings, we got late as the #3. And from there, fighting to get to the #1 or #2 takes a little bit of a taller order and incumbency has incredible value. So I hope that puts things in perspective.

Ross Seymore: It does. And I guess pivoting over to Steve, just on the margin front, it sounds like you guys have a strong growth year, especially on the infrastructure side coming in 2026. How should we think about both gross margin trajectory just directionally and OpEx?

Steven Litchfield: Yes. I mean, look, on the gross margin side, I mean, we've been talking about the improvement. We've been demonstrating that over the last 4 quarters. So we're seeing some upticks there. As you're aware, the product mix is kind of moving in our favor as infrastructure products typically drive a higher gross margins. I remain confident that we can exit the year at kind of starting with a 6% versus a 5%. We did guide to the 59.5% at the midpoint of our guidance. I mean you've got some headwinds with cost increases that are out there.

But that being said, I think the mix longer term throughout the year will move in our favor, and we'll see some nice improvements. With regard to the OpEx question, look, I don't want to necessarily guide for the whole year. But I mean, I think you've heard from us in the past, typically, we want to grow OpEx about half the rate of the top line. That being said, I don't think we necessarily -- we've been really dialing things back a little bit. We're seeing some nice improvements in efficiency for lots of reasons. And so I actually think we'll see a little bit lower than that. So maybe it's in the 4% to 5% increase this year.

Operator: And your next question comes from Tim Savageaux with Northland Capital Markets.

Timothy Savageaux: Congrats on the numbers. And first question was where did we end up '25 in terms of optical DSP revenue? I think you were guiding $60 million to $70 million. And can you give us any color there?

Steven Litchfield: Yes. So Tim, I think -- so as you know, we don't break out these numbers. I think what we're consistent with what we've delivered over the last 2 to 3 years, I think the guidance that Kishore shared earlier is kind of evidence of what you've seen over the last 3 years of this doubling that we saw. I mean, keep in mind, 3 years ago, we were doing less than $20 million of revenue. And so I think we're really pleased with the progress we've made and very excited about where we're at.

I would probably maybe take the opportunity to -- I mean, some of the background of where we exited the year, where we're entering this year. I mean we mentioned in the prepared remarks about the visibility that we have, the backlog that we have. It's in a much better position. I mean, just across all of our businesses, but particularly in the optical side. As you know, we've got 28-week lead times. And really confident in this kind of first half of the year where you've already got backlog, we're pushing to get some upsides in here, and we've already seen a lot of success on that front.

Timothy Savageaux: Okay. Great. I think we might have talked a little about this last quarter, but just based on the comments early in the call, I just want to make sure I'm hearing this right. So do you guys think you can grow faster than 30% overall in '26? Was that the comment? Because I think the comment was grow faster in '26 than '25? Or is there some more nuance or detail around that?

Steven Litchfield: So Tim, I mean, look, as you know, we don't guide the whole year, and we're not going to do it here. We're not going to start today, I guess, I would say. But clearly, you see from the -- mainly the infrastructure growth, but we're seeing a lot of good traction on the PON side. We're seeing industrial multi-market really see a nice recovery this year. So I'm confident that we can outgrow the industry in 2026.

Operator: And your next question comes from Karl Ackerman with BNP Paribas Asset Management.

Samuel Feldman: This is Sam Feldman on for Karl Ackerman. On optical DSP, do you expect the ramp to be linear throughout the year? And the reason for the $30 million range?

Steven Litchfield: Sam, so I mean, actually, just to kind of follow on what I was just speaking about. I do think it will grow throughout the year as we have new programs that will come on, and we have share gains that will continue to gain traction throughout the year. But I would also say that it will be very strong right out of the gate in Q1 and Q2 because we do have really good visibility, and we have a few customers that are ramping right now.

Samuel Feldman: Got it. And a follow-up. Can you discuss the timing and growth within broadband for the second major Tier 1 North American carrier in calendar '26?

Steven Litchfield: Yes. So it will -- look, we've already started shipping some products. We mentioned that we had even started in Q4. It will be still pretty minor in Q1 and start more in earnest in Q2 and Q3.

Kishore Seendripu: Obviously, we have good visibility based on the lead times of the supply chain and the bookings that we have in place.

Operator: And your next question comes from Christopher Rolland with Susquehanna International Group.

Christopher Rolland: So in your press release and also in your prepared remarks, you talked about gaining market share. I think it was a general comment across your product set. But I was wondering if there are some specific kind of needle-moving opportunities like in broadband? Are you gaining share versus Broadcom? Like what were you specifically trying to highlight there as actual revenue moving opportunities?

Kishore Seendripu: Chris, that's a very good question. It's a very broad statement. I think it's broadly true as well across the various categories, honestly. I mean if you look at optical transceivers, our revenue forecast reflects that we are gaining share, right, in some form. If you just go by the units, I mentioned 4 million to 6 million units of transceiver opportunities. Then you see that on the PON side, it's a very, very large Tier 1 player is beginning to ramp. And we -- in that particular category, we are gaining share versus our competition. On cable as well, we're beginning to gain share that many years ago was ours. We're gaining share against the competition.

And then when you go to storage accelerators is a completely new market that we are paving the path forward with hardware acceleration compression. So that we have established incumbency has and that market itself is poised to grow both on the cloud side and the appliance side. And then what else? I mean it's broadly a correct statement, but actually, now that you asked the question, I think about it and say, you know what, damn right. So that would be my response to you.

Christopher Rolland: Excellent. And then back to DSP, we track the transceiver market pretty closely, and we underestimated growth in the market there. It's, I think, growing faster than anyone expected, at least in terms of expectations for '26. You did suggest that there could be upside to your optical number, but why don't you even have more confidence there just given the upside in demand? And then maybe paired with that, are there any supply chain constraints that you're seeing out there that would lower your outlook?

Steven Litchfield: Chris, so look, I mean, I think we're very excited about the ramps that are underway, right, that have already started and we're picking up traction. I mean Kishore spoke about the share gains, I mean, where we've won against the competition. So we're seeing that in the beginning of the year. So really excited about those. Great visibility into future ramps that are coming with some of the new customers, new wins. You mentioned supply chain. Yes, certainly, there's supply chain tightness out there. We're not concerned about that. I mean we're working with our suppliers. We've seen improvements thus far. So we haven't had any trouble.

As you also know, even outside of the optical world, 80-plus percent of our business is really not exposed to that tightness. So that's good. Optical side certainly is. But we've had a lot of success there, and we're very confident in the outlook for this year.

Operator: Your next question comes from Quinn Bolton with Needham & Company.

Quinn Bolton: I'll offer my congratulations as well. I guess, Kishore, I just wanted to ask, I think in the past, you guys have sort of said your DSP wins were more for front-end networks. As you start to ramp the 800-gig products here, are you starting to see some of those designs moving into the scale-out networks? Or do you think we need to wait for the Rushmore 1.6T product before you start moving into scale out?

Kishore Seendripu: It's very, very hard to parse usually what is scale up and scale out. They are broad categories, right? There are short reaches and long reaches and mid-reaches. And usually, the short reaches are in what you would call the scale-up network and the longer ones are usually on the scale-out side. So that's happening on the 800 gig side. So yes, we are shipping in the scale-up side now. But I still feel that most of it is still in the scale-out network -- the traditional scale-out network.

Quinn Bolton: Sorry, just so we're clear, you're shipping in, I guess, what I would call front-end networks that the sort of the storage networks driven off the GPU? Or are you starting to ship in the GPU to GPU scale-out?

Kishore Seendripu: That's a more detailed question, but I would just say -- I'll leave it here. It's -- just leave it as scale-up networks and it is a smaller portion of the revenue that's starting and most of it is scale-out networks.

Quinn Bolton: Okay. And then I guess, Kishore, you gave us some numbers, both revenue forecast for '26 for optical DSP and you said that could equate to 4 million to 6 million units. If I just do the math, it seems like it could imply an ASP sub-$25, which seems pretty aggressive. Can you just talk about the pricing environment? Do you guys feel like you're pricing below some of the other peers in the market? Is that helping you to gain share? Do you think you're pricing in line with others in the market?

Kishore Seendripu: I mean that's -- I think your conclusions are what you're going is absolutely not true. We try to be very competitive in the marketplace, and we try to ride the product competitiveness of our product, right? So I don't think in this market, you win by pricing, you win -- your performance is a must. And if there's such an exciting worldwide great phenomenon that's going on, pricing is the last thing that they would make decisions on, especially in a very, very sophisticated technology. So I think anybody says they're winning on pricing, they really are not looking in the right market.

Operator: Your next question comes from Alek Valero with Loop Capital Markets.

Alek Valero: I wanted to ask, what do you see as being the biggest opportunities for gaining market share in 2026?

Kishore Seendripu: I think it's very, very clear, right? We started with optical transceivers as a category that is very meaningful. We have talked about our gains in the storage accelerators for the infrastructure market. We've talked about -- I'm listing the sequence of the value, right? Then what -- where the growth is coming in the PON market share -- market revenues increases. And the fourth part is the wireless infrastructure growth. I mean I'm exactly laying down the sequence of where the big growth in absolute dollars are coming. And I think they'll roughly track the percentages as well.

Alek Valero: Got it. Super helpful on that. And just a quick follow-up. You sparked my curiosity on scale-up. I know you mentioned it's small for now, but I wanted to ask you if you can maybe provide some more color on the opportunity there for scale-up.

Kishore Seendripu: Look, it's a very, very concentrated market from a scale-up point of view, right, if you really look at it. However, it's a huge opportunity inside the rack, if you will, right, the compute systems. And the scale-up opportunity will span not just PAM4 interconnects, but there are PAM4 Ethernet retimers and so on, on those things, so -- which we have not hit upon. At the OFC, we will be announcing our electrical retimers for the Ethernet product category. And then there is the CPU opportunities as well, right? So it's a whole play for us. It's very, very early innings.

And right now, let's stay focused and it's a heavy growth engine for us, and we are very excited about it.

Operator: Your next question comes from Tore Svanberg with Stifel.

Tore Svanberg: Just two quick follow-ups. And yes, this is Tore, not Ross, and I'm a big Ross fan. So first of all, the connectivity segment, how should we think about the puts and takes there this year? Because obviously, part of connectivity is tied to cable or broadband, yet you also have the Ethernet business, obviously, that's doing quite well. So should we think of connectivity as also being down this year? Or does it have other subsegments growing fast enough to actually make it a growth segment in '26?

Steven Litchfield: Tore, yes, connectivity certainly grows this year. Wi-Fi will grow this year as we -- as WiFi-7 starts to ramp. And then a lot of our Ethernet products that are transitioning 2.5 gig certainly grow this year as well. So both of those.

Tore Svanberg: Very good. And my last question is...

Kishore Seendripu: I just want to remind that the -- sorry, Tore, I want to let you know that cable is a huge part of the market that we have revenues that is not paired with Wi-Fi. So they are like the sort of the dissociation and the association. So it depends on how that trends as well.

Tore Svanberg: Understood. And my last question is sort of going back to the opportunities beyond DSPs. So you've talked about having products for AECs. Obviously, you have the high-speed analog products to go after LPO, LRO and so on and so forth. But you continue to call those out as very niche markets. So I guess my question is, if you do see those segments getting more traction, how long would it take for you to become a more material player in some of those areas?

Kishore Seendripu: Very good question, Tore. So I just want to lay the landscape of the sort of what I call the derivative product road map, right? You start with the PAM4 DSP products. And I know LRO is not an analog product. It is a DSP product. So the LRO is a natural derivative. It doesn't take us long to get there, and we will be pursuing that opportunity. And in a short while, we'll have something to show as well. And I think there is some traction because in the marketplace for LROs because it has legs beyond just one particular speed node, if you will, like.

So with the LPOs have limited niche nature to it because the amount of reach that the LPOs can reach is quite constrained and has to be very structured and controlled. So I do believe that, that is a sequence in which it works out for us, at least. And I think that the market revenues in LROs grows much stronger as the speeds increase and the power benefits that LROs will deliver. And I think there are some data center people who are beginning to try them out and then there'll be a follow-through on that.

So for us, the next 12 months is a place where we will start taking advantage of the product offerings and do these derivative product offerings.

Operator: And we have reached the end of the question-and-answer session. I'll now turn the floor back to Leslie Green for closing remarks.

Leslie Green: Thank you, Diego, and thank you all for joining us. This quarter, we will be presenting at a number of financial and industry conferences. Details will be posted to our Investor Relations site, and we look forward to speaking with you again soon.

Operator: This concludes today's call. All parties may disconnect.

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