10-Q 1 mxl-20220331.htm 10-Q mxl-20220331
0001288469December 312022Q1false00012884692022-01-012022-03-3100012884692022-04-20xbrli:shares00012884692022-03-31iso4217:USD00012884692021-12-31iso4217:USDxbrli:shares00012884692021-01-012021-03-310001288469us-gaap:CommonStockMember2021-12-310001288469us-gaap:AdditionalPaidInCapitalMember2021-12-310001288469us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001288469us-gaap:RetainedEarningsMember2021-12-310001288469us-gaap:CommonStockMember2022-01-012022-03-310001288469us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001288469us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001288469us-gaap:RetainedEarningsMember2022-01-012022-03-310001288469us-gaap:CommonStockMember2022-03-310001288469us-gaap:AdditionalPaidInCapitalMember2022-03-310001288469us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001288469us-gaap:RetainedEarningsMember2022-03-310001288469us-gaap:CommonStockMember2020-12-310001288469us-gaap:AdditionalPaidInCapitalMember2020-12-310001288469us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001288469us-gaap:RetainedEarningsMember2020-12-3100012884692020-12-310001288469us-gaap:CommonStockMember2021-01-012021-03-310001288469us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001288469us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001288469us-gaap:RetainedEarningsMember2021-01-012021-03-310001288469us-gaap:CommonStockMember2021-03-310001288469us-gaap:AdditionalPaidInCapitalMember2021-03-310001288469us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001288469us-gaap:RetainedEarningsMember2021-03-3100012884692021-03-310001288469mxl:CompanyXMember2021-12-082021-12-080001288469mxl:PotentialContingentConsiderationPrivatelyHeldCompanyMembermxl:CompanyXMember2021-12-080001288469mxl:CompanyXMember2021-12-080001288469mxl:CompanyXMembermxl:LicensedTechnologyMember2021-12-082021-12-080001288469mxl:CompanyXMembermxl:LicensedTechnologyMember2021-12-080001288469mxl:CompanyXMember2022-01-012022-03-310001288469mxl:CompanyXMember2022-03-310001288469us-gaap:OneTimeTerminationBenefitsMember2022-01-012022-03-310001288469us-gaap:OneTimeTerminationBenefitsMember2021-01-012021-03-310001288469us-gaap:FacilityClosingMember2022-01-012022-03-310001288469us-gaap:FacilityClosingMember2021-01-012021-03-310001288469us-gaap:OtherRestructuringMember2022-01-012022-03-310001288469us-gaap:OtherRestructuringMember2021-01-012021-03-310001288469mxl:TerminatedLeaseMember2021-01-012021-03-310001288469us-gaap:OneTimeTerminationBenefitsMember2021-12-310001288469us-gaap:FacilityClosingMember2021-12-310001288469us-gaap:OtherRestructuringMember2021-12-310001288469us-gaap:OneTimeTerminationBenefitsMember2022-03-310001288469us-gaap:FacilityClosingMember2022-03-310001288469us-gaap:OtherRestructuringMember2022-03-310001288469mxl:LicensedTechnologyMember2022-01-012022-03-310001288469mxl:LicensedTechnologyMember2022-03-310001288469mxl:LicensedTechnologyMember2021-12-310001288469us-gaap:DevelopedTechnologyRightsMember2022-01-012022-03-310001288469us-gaap:DevelopedTechnologyRightsMember2022-03-310001288469us-gaap:DevelopedTechnologyRightsMember2021-12-310001288469us-gaap:TrademarksAndTradeNamesMember2022-01-012022-03-310001288469us-gaap:TrademarksAndTradeNamesMember2022-03-310001288469us-gaap:TrademarksAndTradeNamesMember2021-12-310001288469us-gaap:CustomerRelationshipsMember2022-01-012022-03-310001288469us-gaap:CustomerRelationshipsMember2022-03-310001288469us-gaap:CustomerRelationshipsMember2021-12-310001288469us-gaap:OrderOrProductionBacklogMember2022-01-012022-03-310001288469us-gaap:OrderOrProductionBacklogMember2022-03-310001288469us-gaap:OrderOrProductionBacklogMember2021-12-310001288469us-gaap:CostOfSalesMember2022-01-012022-03-310001288469us-gaap:CostOfSalesMember2021-01-012021-03-310001288469us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-03-310001288469us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-03-310001288469us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-03-310001288469us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-03-310001288469us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-12-310001288469us-gaap:FairValueMeasurementsRecurringMember2022-03-310001288469us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-03-310001288469us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-03-310001288469us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-03-310001288469us-gaap:FairValueMeasurementsRecurringMember2021-12-310001288469us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310001288469us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310001288469mxl:ContingentConsiderationLiabilityMember2021-12-310001288469mxl:ContingentConsiderationLiabilityMember2020-12-310001288469mxl:ContingentConsiderationLiabilityMember2022-01-012022-03-310001288469mxl:ContingentConsiderationLiabilityMember2021-01-012021-03-310001288469mxl:ContingentConsiderationLiabilityMember2022-03-310001288469mxl:ContingentConsiderationLiabilityMember2021-03-310001288469mxl:InitialTermLoanTLBJune2021Member2022-03-310001288469mxl:InitialTermLoanTLBJune2021Member2021-12-310001288469us-gaap:MediumTermNotesMember2022-03-310001288469us-gaap:MediumTermNotesMember2021-12-31xbrli:pure0001288469mxl:WellsFargoBankNationalAssociationMembermxl:InitialTermLoanTLBJune2021Member2021-06-230001288469us-gaap:RevolvingCreditFacilityMembermxl:WellsFargoBankNationalAssociationMemberus-gaap:LineOfCreditMember2021-06-230001288469mxl:InitialTermLoanTLBJune2021Member2021-06-230001288469us-gaap:FederalFundsEffectiveSwapRateMembermxl:InitialTermLoanTLBJune2021Member2022-01-012022-03-310001288469mxl:InitialTermLoanTLBJune2021Memberus-gaap:LondonInterbankOfferedRateLIBORMember2022-01-012022-03-310001288469mxl:InitialTermLoanTLBJune2021Member2022-01-012022-03-310001288469mxl:InitialTermLoanTLBJune2021Membermxl:LondonInterbankOfferedRateLIBORSubjecttoFloorMember2022-01-012022-03-310001288469us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:BaseRateMember2022-01-012022-03-310001288469us-gaap:RevolvingCreditFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:LineOfCreditMember2022-01-012022-03-310001288469us-gaap:RevolvingCreditFacilityMembersrt:MinimumMemberus-gaap:LineOfCreditMemberus-gaap:BaseRateMember2022-01-012022-03-310001288469us-gaap:RevolvingCreditFacilityMembersrt:MaximumMemberus-gaap:LineOfCreditMemberus-gaap:BaseRateMember2022-01-012022-03-310001288469us-gaap:RevolvingCreditFacilityMembersrt:MinimumMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:LineOfCreditMember2022-01-012022-03-310001288469us-gaap:RevolvingCreditFacilityMembersrt:MaximumMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:LineOfCreditMember2022-01-012022-03-310001288469us-gaap:RevolvingCreditFacilityMembersrt:MinimumMemberus-gaap:LineOfCreditMember2022-01-012022-03-310001288469us-gaap:RevolvingCreditFacilityMembersrt:MaximumMemberus-gaap:LineOfCreditMember2022-01-012022-03-310001288469us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-03-310001288469mxl:InitialTermLoanTLBJune2021Member2020-07-310001288469us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2020-07-310001288469us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-01-012022-03-310001288469us-gaap:FurnitureAndFixturesMember2022-01-012022-03-310001288469us-gaap:FurnitureAndFixturesMember2022-03-310001288469us-gaap:FurnitureAndFixturesMember2021-12-310001288469us-gaap:MachineryAndEquipmentMembersrt:MinimumMember2022-01-012022-03-310001288469us-gaap:MachineryAndEquipmentMembersrt:MaximumMember2022-01-012022-03-310001288469us-gaap:MachineryAndEquipmentMember2022-03-310001288469us-gaap:MachineryAndEquipmentMember2021-12-310001288469mxl:MasksAndProductionEquipmentMembersrt:MinimumMember2022-01-012022-03-310001288469mxl:MasksAndProductionEquipmentMembersrt:MaximumMember2022-01-012022-03-310001288469mxl:MasksAndProductionEquipmentMember2022-03-310001288469mxl:MasksAndProductionEquipmentMember2021-12-310001288469us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-01-012022-03-310001288469us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-03-310001288469us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-12-310001288469srt:MinimumMemberus-gaap:LeaseholdImprovementsMember2022-01-012022-03-310001288469srt:MaximumMemberus-gaap:LeaseholdImprovementsMember2022-01-012022-03-310001288469us-gaap:LeaseholdImprovementsMember2022-03-310001288469us-gaap:LeaseholdImprovementsMember2021-12-310001288469us-gaap:ConstructionInProgressMember2022-03-310001288469us-gaap:ConstructionInProgressMember2021-12-3100012884692022-03-012022-03-310001288469mxl:ReductioninTransactionPriceMember2022-03-310001288469mxl:ReductioninTransactionPriceMember2021-12-310001288469us-gaap:SalesReturnsAndAllowancesMember2022-03-310001288469us-gaap:SalesReturnsAndAllowancesMember2021-12-310001288469us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310001288469us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2021-12-310001288469us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-03-310001288469us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2022-01-012022-03-310001288469us-gaap:AccumulatedTranslationAdjustmentMember2022-03-310001288469us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2022-03-310001288469mxl:EquityIncentivePlanMember2022-03-310001288469mxl:EmployeeStockPurchasePlanMember2022-03-3100012884692022-02-280001288469us-gaap:RestrictedStockUnitsRSUMember2022-03-310001288469us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001288469us-gaap:PerformanceSharesMember2022-03-310001288469us-gaap:PerformanceSharesMember2022-01-012022-03-310001288469us-gaap:RestrictedStockUnitsRSUMember2021-12-310001288469us-gaap:ShareBasedCompensationAwardTrancheThreeMember2022-01-012022-03-310001288469us-gaap:ShareBasedCompensationAwardTrancheOneMember2022-01-012022-03-310001288469us-gaap:ShareBasedCompensationAwardTrancheTwoMember2022-01-012022-03-310001288469us-gaap:PerformanceSharesMember2021-12-310001288469us-gaap:EmployeeStockMember2022-01-012022-03-310001288469us-gaap:EmployeeStockMember2021-01-012021-03-310001288469us-gaap:EmployeeStockMember2022-03-310001288469us-gaap:EmployeeStockMember2021-03-310001288469mxl:CustomerAMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-01-012022-03-310001288469mxl:CustomerAMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-01-012021-03-310001288469us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMembermxl:CustomerBMember2022-01-012022-03-310001288469us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMembermxl:CustomerBMember2021-01-012021-03-310001288469us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMembermxl:CustomerCMember2022-01-012022-03-310001288469us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMembermxl:CustomerCMember2021-01-012021-03-310001288469us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembermxl:CustomerBMember2022-01-012022-03-310001288469us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembermxl:CustomerBMember2021-10-012021-12-310001288469us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembermxl:CustomerCMember2022-01-012022-03-310001288469mxl:CustomerDMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001288469mxl:CustomerDMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-10-012021-12-310001288469us-gaap:InventoriesMemberus-gaap:SupplierConcentrationRiskMembermxl:VendorAMember2022-01-012022-03-310001288469us-gaap:InventoriesMemberus-gaap:SupplierConcentrationRiskMembermxl:VendorAMember2021-01-012021-03-310001288469us-gaap:InventoriesMemberus-gaap:SupplierConcentrationRiskMembermxl:VendorBMember2022-01-012022-03-310001288469us-gaap:InventoriesMemberus-gaap:SupplierConcentrationRiskMembermxl:VendorBMember2021-01-012021-03-310001288469mxl:VendorCMemberus-gaap:InventoriesMemberus-gaap:SupplierConcentrationRiskMember2022-01-012022-03-310001288469mxl:VendorCMemberus-gaap:InventoriesMemberus-gaap:SupplierConcentrationRiskMember2021-01-012021-03-310001288469srt:AsiaMemberus-gaap:SalesRevenueNetMember2022-01-012022-03-310001288469us-gaap:GeographicConcentrationRiskMembersrt:AsiaMemberus-gaap:SalesRevenueNetMember2022-01-012022-03-310001288469srt:AsiaMemberus-gaap:SalesRevenueNetMember2021-01-012021-03-310001288469us-gaap:GeographicConcentrationRiskMembersrt:AsiaMemberus-gaap:SalesRevenueNetMember2021-01-012021-03-310001288469country:USus-gaap:SalesRevenueNetMember2022-01-012022-03-310001288469us-gaap:GeographicConcentrationRiskMembercountry:USus-gaap:SalesRevenueNetMember2022-01-012022-03-310001288469country:USus-gaap:SalesRevenueNetMember2021-01-012021-03-310001288469us-gaap:GeographicConcentrationRiskMembercountry:USus-gaap:SalesRevenueNetMember2021-01-012021-03-310001288469mxl:RestofWorldMemberus-gaap:SalesRevenueNetMember2022-01-012022-03-310001288469us-gaap:GeographicConcentrationRiskMembermxl:RestofWorldMemberus-gaap:SalesRevenueNetMember2022-01-012022-03-310001288469mxl:RestofWorldMemberus-gaap:SalesRevenueNetMember2021-01-012021-03-310001288469us-gaap:GeographicConcentrationRiskMembermxl:RestofWorldMemberus-gaap:SalesRevenueNetMember2021-01-012021-03-310001288469us-gaap:SalesRevenueNetMember2022-01-012022-03-310001288469us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-01-012022-03-310001288469us-gaap:SalesRevenueNetMember2021-01-012021-03-310001288469us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2021-01-012021-03-310001288469us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:HK2022-01-012022-03-310001288469us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:HK2021-01-012021-03-310001288469us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:CN2022-01-012022-03-310001288469us-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMembercountry:CN2021-01-012021-03-310001288469us-gaap:GeographicConcentrationRiskMembercountry:VNus-gaap:SalesRevenueNetMember2022-01-012022-03-310001288469us-gaap:GeographicConcentrationRiskMembercountry:VNus-gaap:SalesRevenueNetMember2021-01-012021-03-310001288469country:USmxl:LonglivedassetsMember2022-01-012022-03-310001288469us-gaap:GeographicConcentrationRiskMembercountry:USmxl:LonglivedassetsMember2022-01-012022-03-310001288469country:USmxl:LonglivedassetsMember2021-01-012021-06-300001288469us-gaap:GeographicConcentrationRiskMembercountry:USmxl:LonglivedassetsMember2021-01-012021-06-300001288469country:SGmxl:LonglivedassetsMember2022-01-012022-03-310001288469us-gaap:GeographicConcentrationRiskMembercountry:SGmxl:LonglivedassetsMember2022-01-012022-03-310001288469country:SGmxl:LonglivedassetsMember2021-01-012021-06-300001288469us-gaap:GeographicConcentrationRiskMembercountry:SGmxl:LonglivedassetsMember2021-01-012021-06-300001288469mxl:RestofWorldMembermxl:LonglivedassetsMember2022-01-012022-03-310001288469us-gaap:GeographicConcentrationRiskMembermxl:RestofWorldMembermxl:LonglivedassetsMember2022-01-012022-03-310001288469mxl:RestofWorldMembermxl:LonglivedassetsMember2021-01-012021-06-300001288469us-gaap:GeographicConcentrationRiskMembermxl:RestofWorldMembermxl:LonglivedassetsMember2021-01-012021-06-300001288469mxl:LonglivedassetsMember2022-01-012022-03-310001288469us-gaap:GeographicConcentrationRiskMembermxl:LonglivedassetsMember2022-01-012022-03-310001288469mxl:LonglivedassetsMember2021-01-012021-06-300001288469us-gaap:GeographicConcentrationRiskMembermxl:LonglivedassetsMember2021-01-012021-06-300001288469mxl:BroadbandMember2022-01-012022-03-310001288469mxl:BroadbandMember2021-01-012021-03-310001288469us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMembermxl:BroadbandMember2022-01-012022-03-310001288469us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMembermxl:BroadbandMember2021-01-012021-03-310001288469mxl:ConnectivityMember2022-01-012022-03-310001288469mxl:ConnectivityMember2021-01-012021-03-310001288469mxl:ConnectivityMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2022-01-012022-03-310001288469mxl:ConnectivityMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2021-01-012021-03-310001288469mxl:InfrastructureMember2022-01-012022-03-310001288469mxl:InfrastructureMember2021-01-012021-03-310001288469mxl:InfrastructureMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2022-01-012022-03-310001288469mxl:InfrastructureMemberus-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMember2021-01-012021-03-310001288469mxl:IndustrialandmultimarketMember2022-01-012022-03-310001288469mxl:IndustrialandmultimarketMember2021-01-012021-03-310001288469us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMembermxl:IndustrialandmultimarketMember2022-01-012022-03-310001288469us-gaap:SalesRevenueNetMemberus-gaap:ProductConcentrationRiskMembermxl:IndustrialandmultimarketMember2021-01-012021-03-310001288469mxl:RevenuefromDistributorsMemberus-gaap:SalesRevenueNetMembermxl:DistributorsMember2022-01-012022-03-310001288469mxl:RevenuefromDistributorsMemberus-gaap:SalesRevenueNetMembermxl:DistributorsMember2021-01-012021-03-310001288469us-gaap:AccountsReceivableMember2022-01-012022-03-310001288469us-gaap:AccountsReceivableMember2021-01-012021-12-310001288469srt:MinimumMember2022-03-310001288469srt:MaximumMember2022-03-3100012884692020-07-310001288469us-gaap:OtherLongTermInvestmentsMember2022-03-310001288469us-gaap:OtherLongTermInvestmentsMember2021-12-310001288469us-gaap:InventoriesMember2022-03-310001288469mxl:OtherObligationsMember2022-03-3100012884692021-02-2300012884692021-02-232022-03-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From              to
Commission file number: 001-34666
MaxLinear Inc.
(Exact name of Registrant as specified in its charter)
Delaware14-1896129
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
5966 La Place Court, Suite 100,CarlsbadCalifornia92008
(Address of principal executive offices)(Zip Code)
(760) 692-0711
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stockMXLThe Nasdaq Stock Market LLC
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes     No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerEmerging growth company
Non-accelerated filerSmaller reporting company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No   
As of April 20, 2022, the registrant had 77,355,084 shares of common stock, par value $0.0001, outstanding.


MAXLINEAR, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
Page
Part I
Item 1.
Item 2.
Item 3.
Item 4.
Part II
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


2

PART I — FINANCIAL INFORMATION

3

ITEM 1.    FINANCIAL STATEMENTS

MAXLINEAR, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited; in thousands, except par value amounts)
March 31,
2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents$151,111 $130,572 
Short-term restricted cash105 105 
Short-term investments19,051  
Accounts receivable, net125,693 119,724 
Inventory139,041 131,703 
Prepaid expenses and other current assets19,575 22,000 
Total current assets454,576 404,104 
Long-term restricted cash1,037 1,061 
Property and equipment, net60,022 60,924 
Leased right-of-use assets32,919 27,269 
Intangible assets, net140,153 152,540 
Goodwill306,713 306,668 
Deferred tax assets82,326 89,168 
Other long-term assets21,381 8,650 
Total assets$1,099,127 $1,050,384 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$60,214 $52,976 
Accrued price protection liability68,349 40,509 
Accrued expenses and other current liabilities75,553 57,268 
Accrued compensation30,679 56,642 
Total current liabilities234,795 207,395 
Long-term lease liabilities30,208 24,640 
Long-term debt286,298 306,153 
Other long-term liabilities19,980 22,998 
Total liabilities571,281 561,186 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value; 25,000 shares authorized, no shares issued or outstanding
  
Common stock, $0.0001 par value; 550,000 shares authorized; 77,375 shares issued and outstanding at March 31, 2022 and 76,778 shares issued and outstanding December 31, 2021
8 8 
Additional paid-in capital663,622 657,485 
Accumulated other comprehensive income1,050 2,125 
Accumulated deficit(136,834)(170,420)
Total stockholders’ equity527,846 489,198 
Total liabilities and stockholders’ equity$1,099,127 $1,050,384 

See accompanying notes.
4

MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited; in thousands, except per share data)
Three Months Ended March 31,
20222021
Net revenue$263,927 $209,359 
Cost of net revenue109,337 97,640 
Gross profit154,590 111,719 
Operating expenses:
Research and development65,886 63,166 
Selling, general and administrative40,577 36,469 
Restructuring charges 2,166 
Total operating expenses106,463 101,801 
Income from operations48,127 9,918 
Interest income31  
Interest expense(2,349)(4,206)
Other income (expense), net(770)(104)
Total other income (expense), net(3,088)(4,310)
Income before income taxes45,039 5,608 
Income tax provision11,453 1,806 
Net income$33,586 $3,802 
Net income per share:
Basic$0.44 $0.05 
Diluted$0.42 $0.05 
Shares used to compute net income per share:
Basic77,192 74,852 
Diluted80,641 78,283 

See accompanying notes.
5

MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited; in thousands)

Three Months Ended March 31,
20222021
Net income$33,586 $3,802 
Other comprehensive loss, net of tax:
Foreign currency translation adjustments, net of tax expense of $2 and $376 for the three months ended March 31, 2022 and 2021, respectively
(1,075)(989)
Other comprehensive loss(1,075)(989)
Total comprehensive income$32,511 $2,813 


See accompanying notes.
6

MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FISCAL QUARTER ENDED MARCH 31, 2022
(unaudited; in thousands)
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance at December 31, 202176,778 $8 $657,485 $2,125 $(170,420)$489,198 
Common stock issued pursuant to equity awards, net1,037 13,835 — — 13,835 
Repurchase of common stock(440)— (26,297)— — (26,297)
Stock-based compensation— — 18,599 — — 18,599 
Other comprehensive loss— — — (1,075)— (1,075)
Net income— — — — 33,586 33,586 
Balance at March 31, 202277,375 $8 $663,622 $1,050 $(136,834)$527,846 
See accompanying notes.
7

MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FISCAL QUARTER ENDED MARCH 31, 2021
(unaudited; in thousands)
Common StockAdditional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance at December 31, 202074,536 $7 $602,064 $1,435 $(212,389)$391,117 
Common stock issued pursuant to equity awards, net917 1 16,565 — — 16,566 
Repurchase of common stock(75)— (2,673)— — (2,673)
Stock-based compensation— — 12,955 — — 12,955 
Other comprehensive loss— — — (989)— (989)
Net income— — — — 3,802 3,802 
Balance at March 31, 202175,378 $8 $628,911 $446 $(208,587)$420,778 
See accompanying notes.
8

MAXLINEAR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited; in thousands)
Three Months Ended March 31,
20222021
Operating Activities
Net income$33,586 $3,802 
Adjustments to reconcile net income to cash provided by operating activities:
Amortization and depreciation23,880 22,325 
Amortization of debt issuance costs and accretion of discounts486 844 
Stock-based compensation18,554 12,955 
Deferred income taxes6,842 541 
Loss on disposal of property and equipment159 368 
Unrealized holding loss on investments954  
Impairment of leasehold improvements 226 
Impairment of leased right-of-use assets 429 
(Gain) loss on foreign currency(316)21 
Excess tax benefits on stock-based awards(7,120)(1,809)
Changes in operating assets and liabilities:
Accounts receivable(5,969)(20,079)
Inventory(7,338)5,658 
Prepaid expenses and other assets3,503 29,860 
Leased right-of-use assets 36 
Accounts payable, accrued expenses and other current liabilities32,952 (22,032)
Accrued compensation12,237 1,376 
Accrued price protection liability27,975 7,299 
Lease liabilities(3,301)(2,002)
Other long-term liabilities(2,918)454 
Net cash provided by operating activities134,166 40,272 
Investing Activities
Purchases of property and equipment(4,800)(6,152)
Purchases of intangible assets(4,637)(1,112)
Proceeds loaned under notes receivable(10,000) 
Purchases of investments(23,325)(5,000)
Net cash used in investing activities(42,762)(12,264)
Financing Activities
Repayment of debt(20,000)(20,000)
Net proceeds from issuance of common stock87 1,298 
Minimum tax withholding paid on behalf of employees for restricted stock units(24,449)(7,442)
Repurchase of common stock(26,297)(2,673)
Net cash used in financing activities(70,659)(28,817)
Effect of exchange rate changes on cash and cash equivalents (230)(32)
Increase (decrease) in cash, cash equivalents and restricted cash20,515 (841)
Cash, cash equivalents and restricted cash at beginning of period131,738 150,034 
Cash, cash equivalents and restricted cash at end of period$152,253 $149,193 
Supplemental disclosures of cash flow information:
Cash paid for interest$2,053 $3,309 
Cash paid for income taxes$1,698 $593 
Supplemental disclosures of non-cash activities:
Issuance of shares for payment of bonuses$38,197 $22,710 
See accompanying notes.
9

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. Organization and Summary of Significant Accounting Policies
Description of Business
MaxLinear, Inc. was incorporated in Delaware in September 2003. MaxLinear, Inc., together with its wholly owned subsidiaries, collectively referred to as MaxLinear, or the Company, is a provider of communications systems-on-chip (SoC) solutions used in broadband, mobile and wireline infrastructure, data center, and industrial and multi-market applications. MaxLinear is a fabless integrated circuit design company whose products integrate all or substantial portions of a high-speed communication system, including radio frequency (RF), high-performance analog, mixed-signal, digital signal processing, security engines, data compression and networking layers, and power management. MaxLinear’s customers include electronics distributors, module makers, original equipment manufacturers, or OEMs, and original design manufacturers, or ODMs, who incorporate the Company’s products in a wide range of electronic devices, including cable Data Over Cable Service Interface Specifications (DOCSIS), fiber and DSL broadband modems and gateways; Wi-Fi and wireline routers for home networking; radio transceivers and modems for 4G/5G base-station and backhaul infrastructure; fiber-optic modules for data center, metro, and long-haul transport networks; as well as power management and interface products used in these and many other markets.
Basis of Presentation and Principles of Consolidation
The accompanying unaudited consolidated financial statements include the accounts of MaxLinear, Inc. and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. All intercompany transactions and investments have been eliminated in consolidation.
In the opinion of management, the Company’s unaudited consolidated interim financial statements contain adjustments, including normal recurring accruals necessary to present fairly the Company’s consolidated financial position, results of operations, comprehensive income (loss), stockholders’ equity, and cash flows.
The consolidated balance sheet as of December 31, 2021 was derived from the Company’s audited consolidated financial statements at that date. 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, 2021 included in the Company’s Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission, or the SEC, on February 2, 2022, or the Annual Report. Interim results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022.
The functional currency of certain foreign subsidiaries is the local currency. Accordingly, assets and liabilities of these foreign subsidiaries are translated at the current exchange rate at the balance sheet date and historical rates for equity. Revenue and expense components are translated at weighted average exchange rates in effect during the period. Gains and losses resulting from foreign currency translation are included as a component of stockholders’ equity. Foreign currency transaction gains and losses are included in the results of operations, and to date, have not been material.
Use of Estimates and Significant Risks and Uncertainties
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes of the consolidated financial statements. Actual results could differ from those estimates.
During the COVID-19 global pandemic, which is still ongoing, various restrictions were put in place causing a temporary decline in demand for certain items such as automobiles. As restrictions began easing across the world, a sudden increase in demand for electronics containing semiconductor chips and stockpiling of chips by certain firms in China blacklisted by the U.S. has exacerbated bottlenecks in the supply chain, resulting in a global semiconductor supply shortage impacting the Company’s industry. Some chip manufacturers are estimating this supply shortage may continue into 2023. While these chip manufacturers are working to increase capacity in the future, and the Company is continuing to work closely with its suppliers and customers to minimize the potential adverse impacts of the supply shortage, such shortage may have a near-term impact on the Company’s ability to meet increased demand on certain products and have a negative impact on its operating results which may continue into 2023. Global supply shortages, and uncertainty in customer demand and the worldwide economy in general
10

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
has continued as a result of the COVID-19 pandemic, and may be further exacerbated by the impacts of high inflation, and the Company may experience increased volatility in its sales and revenues in the near future. However, the magnitude of such volatility on the Company’s business and its duration is uncertain and cannot be reasonably estimated at this time.

The Company also believes that its $152.3 million of cash and cash equivalents at March 31, 2022 will be sufficient to fund its projected operating requirements for at least the next twelve months. A material adverse impact from the global semiconductor supply shortage could result in a need to raise additional capital or incur additional indebtedness to fund strategic initiatives or operating activities, particularly if the Company pursues additional acquisitions. The Company’s future capital requirements will depend on many factors, including changes in revenue, the expansion of engineering, sales and marketing activities, the timing and extent of expansion into new territories, the timing of introductions of new products and enhancements to existing products, the continuing market acceptance of the Company’s products and potential material investments in, or acquisitions of, complementary businesses, services or technologies. Additional funds may not be available on terms favorable to the Company or at all. If the Company is unable to raise additional funds when needed, it may not be able to sustain its operations or execute its strategic plans.

The Company is not aware of any specific event or circumstance that would require an update to its estimates or adjustments to the carrying value of its assets and liabilities as of April 27, 2022, the issuance date of this Quarterly Report on Form 10-Q. Actual results could differ from those estimates, particularly if the Company experiences material impacts from the global supply shortage.
Summary of Significant Accounting Policies
Refer to the Company’s Annual Report for a summary of significant accounting policies. There have been no other significant changes to the Company’s significant accounting policies during the three months ended March 31, 2022.
Recently Issued Accounting Pronouncements
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, to provide specific guidance to eliminate diversity in practice on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts from customers in a business combination consistent with revenue contracts with customers not acquired in an acquisition. The amendments in this update provide that the acquirer should consider the terms of the acquired contracts, such as timing of payment, identify each performance obligation in the contracts, and allocate the total transaction price to each identified performance obligation on a relative standalone selling price basis as of contract inception (that is, the date the acquiree entered into the contracts) or contract modification to determine what should be recorded at the acquisition date. These amendments are effective for the Company beginning with fiscal year 2023. The impact of the adoption of the amendments in this update will depend on the magnitude of any customer contracts assumed in a business combination in 2023 and beyond.
2. Net Income (Loss) Per Share
Basic earnings per share, or EPS, is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted EPS is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period and the weighted-average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. For purposes of this calculation, common stock options, restricted stock units and restricted stock awards are considered to be common stock equivalents and are only included in the calculation of diluted EPS when their effect is dilutive. In periods in which the Company has a net loss, dilutive common stock equivalents are excluded from the calculation of diluted EPS.
11

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The table below presents the computation of basic and diluted EPS:
Three Months Ended March 31,
20222021
(in thousands, except per share amounts)
Numerator:
Net income$33,586 $3,802 
Denominator:
Weighted average common shares outstanding—basic77,192 74,852 
Dilutive common stock equivalents3,449 3,431 
Weighted average common shares outstanding—diluted80,641 78,283 
Net income per share:
Basic$0.44 $0.05 
Diluted$0.42 $0.05 
For the three months ended March 31, 2022 and 2021, the Company excluded common stock equivalents for outstanding stock-based awards, which represented potentially dilutive securities of 0.9 million and 0.1 million, respectively, from the calculation of diluted net income per share due to their anti-dilutive nature.
3. Business Combinations
Acquisition of Company X
On December 8, 2021, the Company completed its acquisition of a business, or Company X, pursuant to a Purchase and Sale Agreement (the “Purchase Agreement”). The initial closing transaction consideration consisted of $5.0 million in cash. In addition, their stockholders may receive up to an additional $3.0 million in potential contingent consideration, subject to the acquired business satisfying certain financial and personnel objectives by March 31, 2023.
Company X is headquartered in Chennai, India and operates as a Wi-Fi solutions and service provider.
Acquisition Consideration
The following table summarizes the fair value of purchase price consideration to acquire Company X (in thousands):
DescriptionAmount
Fair value of purchase consideration:
Cash$5,000 
Contingent consideration(1)
2,700 
Total purchase price7,700 
_________________
(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 $3.0 million in payments subject to the acquired business’s satisfying certain financial and personnel objectives by March 31, 2023 under the Purchase Agreement. Key inputs in the valuation include forecasted revenue, revenue volatility and discount rate. Underlying forecast mathematics were based on Geometric Brownian Motion in a risk-neutral framework and discounted back to the applicable period in which the accumulative thresholds were achieved at discount rates commensurate with the risk and expected payout term of the contingent consideration.
12

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Purchase Price Allocation
An allocation of purchase price as of the December 8, 2021 acquisition closing date based upon an estimate of the fair value of the assets acquired and the liabilities assumed by the Company in the acquisition primarily includes $4.4 million in identifiable intangible assets and $0.6 million in net operating liabilities, with $3.9 million in goodwill.
The following is a summary of identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets (in thousands):
CategoryEstimated Life in YearsFair Value
Finite-lived intangible assets:
Licensed technology3$4,400 
Total identifiable intangible assets acquired$4,400 
Assumptions in the Allocations of Purchase Price

Management prepared the purchase price allocations for Company X and in doing so considered or relied in part upon reports of a third party valuation expert to calculate the fair value of certain acquired assets, which primarily included identifiable intangible assets and contingent consideration. Certain stockholders that are employees of Company X were not required to remain employed in order to receive the contingent consideration; accordingly, the fair value of the contingent consideration was accounted for as a portion of the purchase consideration.
Estimates of fair value require management to make significant estimates and assumptions. The goodwill recognized is attributable primarily to the acquired workforce, expected synergies, and other benefits that MaxLinear believes will result from integrating the operations of Company X with the operations of MaxLinear. Certain liabilities included in the purchase price allocations are based on management’s best estimates of the amounts to be paid or settled and based on information available at the time the purchase price allocations were prepared. There were minor adjustments to amounts of property and equipment that resulted in a change in the preliminary purchase price allocation reflected as of March 31, 2022 compared to the preliminary purchase price allocation as of December 31, 2021 for Company X. These adjustments resulted in a decrease of $0.05 million in net operating liabilities and corresponding increase in goodwill.
The fair value of the identified intangible assets acquired from Company X was estimated using an income approach. Under the income approach, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. Indications of value are developed by discounting future net cash flows to their present value at market-based rates of return. More specifically, the fair value of the licensed technology was determined using the multi-period excess earnings method, or MPEEM. MPEEM is an income approach to fair value measurement attributable to a specific intangible asset being valued from the asset grouping’s overall cash-flow stream. MPEEM isolates the expected future discounted cash-flow stream to its net present value. Future cash flows were estimated based on forecasted revenue and costs, taking into account expected future contracts and remaining contract terms. The licensed technology began amortization immediately upon the closing of the transaction.

In connection with the acquisition of Company X, the Company assumed certain operating liabilities. The liabilities assumed in these acquisitions are included in the respective purchase price allocations above.

Goodwill recorded in connection with Company X was $3.9 million as of March 31, 2022. The Company does not expect to deduct any of the acquired goodwill for tax purposes.
4. Restructuring Activity

From time to time, the Company approves and implements restructuring plans as a result of internal resource alignment and cost saving measures. Such restructuring plans include terminating employees, vacating certain leased facilities, and cancellation of contracts.

13

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The following table presents the activity related to the restructuring plans, which is included in restructuring charges in the consolidated statements of income:
Three Months Ended March 31,
20222021
(in thousands)
Employee separation expenses$ $1,253 
Lease related charges 608 
Other 305 
$ $2,166 
Lease related charges for the three months ended March 31, 2021 included the impairment of leased right-of-use assets and leasehold improvements of $0.4 million and $0.2 million, respectively, related to exiting a redundant facility.
The following table presents a roll-forward of the Company’s restructuring liability for the three months ended March 31, 2022. The restructuring liability is included in accrued expenses and other current liabilities and other long-term liabilities in the consolidated balance sheets.
Employee Separation ExpensesLease Related ChargesOtherTotal
(in thousands)
Liability as of December 31, 2021$ $444 $ $444 
Cash payments (78) (78)
Liability as of March 31, 2022 366  366 
Less: current portion as of March 31, 2022 (295) (295)
Long-term portion as of March 31, 2022$ $71 $ $71 
5. Goodwill and Intangible Assets

Goodwill

Goodwill arises from the acquisition method of accounting for business combinations and represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. The fair values of net tangible assets and intangible assets acquired are based upon preliminary valuations and the Company’s estimates and assumptions are subject to change within the measurement period (potentially up to one year from the acquisition date).

During the three months ended March 31, 2022, there was an increase in the carrying value of goodwill of $0.05 million related to minor adjustments to amounts of property and equipment in the purchase price allocation for Company X.

The Company performs an annual goodwill impairment assessment on October 31st each year, using a quantitative assessment comparing the fair value of each reporting unit, which the Company has determined to be the entity itself, with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recorded.
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, 2022 and 2021, there were no indications of impairment of the Company’s goodwill balances.
14

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Acquired Intangibles
Finite-lived Intangible Assets
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, 2022December 31, 2021
Weighted
Average
Useful Life
(in Years)
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying ValueAccumulated AmortizationNet Carrying Amount
(in thousands)
Licensed technology6.2$21,487 $(2,623)$18,864 $16,850 $(2,218)$14,632 
Developed technology7.0308,661 (200,055)108,606 308,661 (189,244)119,417 
Trademarks and trade names6.214,800 (11,821)2,979 14,800 (11,221)3,579 
Customer relationships5.0128,800 (122,047)6,753 128,800 (116,847)11,953 
Backlog2.41,300 (949)351 1,300 (941)359 
6.2$475,048 $(337,495)$137,553 $470,411 $(320,471)$149,940 

The following table sets forth amortization expense associated with finite-lived intangible assets, which is included in the consolidated statements of income as follows:
Three Months Ended March 31,
20222021
(in thousands)
Cost of net revenue$10,847 $10,765 
Research and development1 1 
Selling, general and administrative6,176 6,070 
$17,024 $16,836 

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

The following table sets forth the activity related to finite-lived intangible assets:
Three Months Ended March 31,
20222021
(in thousands)
Beginning balance$149,940 $200,066 
Additions4,637 1,112 
Amortization(17,024)(16,836)
Ending balance$137,553 $184,342 
The Company regularly reviews the carrying amount of its long-lived assets subject to depreciation and amortization, as well as the related useful lives, to determine whether indicators of impairment may exist that warrant adjustments to carrying values or estimated useful lives. An impairment loss is recognized when the sum of the expected future undiscounted net cash flows is less than the carrying amount of the asset. 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 each of the three months ended March 31, 2022 and 2021, no impairment losses related to finite-lived intangible assets were recognized.
15

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The following table presents future amortization of the Company’s finite-lived intangible assets at March 31, 2022:
Amount
(in thousands)
2022 (9 months)$34,480 
202339,934 
202424,655 
202513,320 
202612,209 
Thereafter12,955 
Total$137,553 
Indefinite-lived Intangible Assets
Indefinite-lived intangible assets consisted entirely of acquired in-process research and development technology, or IPR&D. As of each of March 31, 2022 and December 31, 2021, IPR&D was $2.6 million. There were no changes in the balance of indefinite-lived intangible assets in the three months ended March 31, 2022 and 2021.
The Company performs its annual assessment of indefinite-lived intangible assets on October 31 each year or more frequently if events or changes in circumstances indicate that the asset might be impaired utilizing a qualitative test as a precursor to the quantitative test comparing the fair value of the assets with their carrying amount. Based on the qualitative test, if it is more likely than not that indicators of impairment exists, the Company proceeds to perform a quantitative analysis. During the three months ended March 31, 2022 and 2021, no indicators of impairment were identified and, as a result, no IPR&D impairment losses were recorded.

6. Financial Instruments
The composition of financial instruments is as follows:
March 31, 2022
Gross Unrealized
CostGainsLossesFair Value
(in thousands)
Assets
Marketable equity investments$20,005 $ $(954)$19,051 
March 31, 2022
Fair Value
(in thousands)
Liabilities
Contingent consideration (Note 3)$2,768 
December 31, 2021
Fair Value
(in thousands)
Liabilities
Contingent consideration (Note 3)2,700 
At March 31, 2022, the Company held marketable equity investments with an aggregate fair value of $19.1 million that were in an unrealized loss position for less than 12 months. The gross unrealized losses of $1.0 million as of March 31, 2022 represents stock price fluctuations in the underlying securities held, and were recorded to other income (expense), net in the consolidated statement of income.
16

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The Company evaluates securities for other-than-temporary impairment on a quarterly basis. Impairment is evaluated considering numerous factors, and their relative significance varies depending on the situation. Factors considered include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the issuer; including changes in the financial condition of any underlying collateral of the security; any downgrades of the security by analysts or rating agencies; nonpayment of any scheduled interest, or the reduction or elimination of dividends; as well as our intent and ability to hold the security in order to allow for an anticipated recovery in fair value.
The fair values of the Company’s financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants and is recorded using a hierarchical disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities. The levels are described below:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities.
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
Level 3: Unobservable inputs are used when little or no market data is available.
The Company classifies its financial instruments 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 marketable equity investment held by the Company has been valued on the basis of quoted market prices and is therefore classified as Level 1. The contingent consideration liability is associated with the Company’s acquisition of Company X (Note 3) and is classified as a Level 3 financial instrument that is subject to the acquired business’s satisfaction of certain financial and personnel objectives by March 31, 2023, under the Purchase Agreement. The fair value of the 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 under various possible contingent consideration events and (2) a probability based methodology using management’s inputs and assumptions to forecast achievement of the acquired business’ personnel objectives which combined may result in up to $3.0 million in total payments to the acquired business. 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, 2022
Balance at March 31, 2022Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(in thousands)
Assets
Marketable equity securities$19,051 $19,051 $ $ 
Liabilities
Contingent consideration$2,768 $ $ $2,768 
Fair Value Measurements at December 31, 2021
Balance at December 31, 2021Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(in thousands)
Liabilities
Contingent consideration2,700   2,700 
$2,700 $ $ $2,700 
17

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

The following summarizes the activity in Level 3 financial instruments:
Three Months Ended March 31,
20222021
Contingent Consideration
Beginning balance
$2,700 $ 
Accretion of discount (1)
68  
Ending balance
$2,768 $ 
_____________________
(1) Changes to the balance associated with the estimated fair value of contingent consideration for the three months ended March 31, 2022 were primarily due to accretion of the related discount.

For the three months ended March 31, 2022, there were no transfers between Level 1, Level 2, or Level 3 financial instruments.

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

Some of the Company’s financial instruments are recorded at amounts that approximate fair value due to their liquid or short-term nature or by election on investments in privately-held entities as described below. Such financial assets and financial liabilities include: cash and cash equivalents, restricted cash, net receivables, investments in privately-held entities, certain other assets, accounts payable, accrued price protection liability, accrued expenses, accrued compensation costs, and other current liabilities.

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 $8.3 million and $5.0 million as of March 31, 2022 and December 31, 2021, respectively. 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. Given that fair values for such investments are not readily determinable, the Company is electing to measure these investments at cost, less any impairment, and adjust the carrying value to fair value if any observable price changes for similar investments in the same entity are identified.
18

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
8. Debt

Debt

The carrying amount of the Company’s long-term debt consists of the following:
March 31,
2022
December 31,
2021
(in thousands)
Principal balance:
Initial term loan under June 23, 2021 credit agreement$290,000 $310,000 
Total principal balance290,000 310,000 
Less:
     Unamortized debt discount(787)(816)
     Unamortized debt issuance costs(2,915)(3,031)
Net carrying amount of long-term debt286,298 306,153 
Less: current portion of long-term debt  
Long-term debt, non-current portion$286,298 $306,153 
As of March 31, 2022 and December 31, 2021, the weighted average effective interest rate on debt was approximately 2.8% and 3.2%, respectively.

During each of the three months ended March 31, 2022 and 2021, the Company recognized total amortization of debt discount and debt issuance costs of $0.1 million and $0.5 million, respectively, to interest expense.

The approximate aggregate fair value of the term loans outstanding as of March 31, 2022 and December 31, 2021 was $291.4 million and $311.0 million, respectively, which was estimated on the basis of inputs that are observable in the market and which is considered a Level 2 measurement method in the fair value hierarchy.

As of March 31, 2022, the outstanding principal balance of $290.0 million is due in full on June 23, 2028, upon maturity of the loan.
Initial Term Loan and Revolving Facility under June 23, 2021 Credit Agreement
On June 23, 2021, the Company entered into a Credit Agreement (the “June 23, 2021 Credit Agreement”), by and among the Company, the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent and collateral agent, that provides for a senior secured term B loan facility, or the “Initial Term Loan under the June 23, 2021 Credit Agreement,” in an aggregate principal amount of $350.0 million and a senior secured revolving credit facility, or the “Revolving Facility,” in an aggregate principal amount of up to $100.0 million. The proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement were used (i) to repay in full all outstanding indebtedness under that certain Credit Agreement dated May 12, 2017, by and among the Company, MUFG Bank Ltd., as administrative agent and MUFG Union Bank, N.A., as collateral agent and the lenders from time to time party thereto (as amended by Amendment No. 1, dated July 31, 2020 and as further amended, amended and restated, waived, supplemented or otherwise modified from time to time, the “May 12, 2017 Credit Agreement”) and (ii) to pay fees and expenses incurred in connection therewith. The remaining proceeds of the Initial Term Loan under the June 23, 2021 Credit Agreement are available for general corporate purposes and the proceeds of the Revolving Facility may be used to finance the working capital needs and other general corporate purposes of the Company and its subsidiaries. As of March 31, 2022, the Revolving Facility was undrawn.

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

Under the June 23, 2021 Credit Agreement, the Initial Term Loan bears interest, at the Company’s option, at a per annum rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50%, (y) the prime rate then in
19

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
effect and (z) an adjusted LIBOR rate determined on the basis of a one-month interest period plus 1.00%, in each case, plus an applicable margin of 1.25% or (ii) an adjusted LIBOR rate, subject to a floor of 0.50%, plus an applicable margin of 2.25%. Loans under the Revolving Facility initially bear interest, at a per annum rate equal to either (i) a base rate (as calculated above) plus an applicable margin of 0.00%, or (ii) an adjusted LIBOR rate (as calculated above) plus an applicable margin of 1.00%. Following delivery of financial statements for the Company’s fiscal quarter ending June 30, 2021, the applicable margin for loans under the Revolving Facility will range from 0.00% to 0.75% in the case of base rate loans and 1.00% to 1.75% in the case of LIBOR rate loans, in each case, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter. The Company is required to pay commitment fees ranging from 0.175% to 0.25% per annum on the daily undrawn commitments under the Revolving Facility, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter. Commencing on September 30, 2021, the Initial Term Loan under the June 23, 2021 Credit Agreement will amortize in equal quarterly installments equal to 0.25% of the original principal amount of the Initial Term Loan under the June 23, 2021 Credit Agreement, with the balance payable on the maturity date. The June 23, 2021 Credit Agreement contains customary provisions specifying alternative interest rate calculations to be employed at such time as LIBOR ceases to be available as a benchmark for establishing the interest rate on floating interest rate borrowings.

The Company is required to make mandatory prepayments of the outstanding principal amount of term loans under the June 23, 2021 Credit Agreement with the net cash proceeds from the disposition of certain assets and the receipt of insurance proceeds upon certain casualty and condemnation events, in each case, to the extent not reinvested within a specified time period, from excess cash flow beyond stated threshold amounts, and from the incurrence of certain indebtedness. The Company has the right to prepay its term loans under the June 23, 2021 Credit Agreement, in whole or in part, at any time without premium or penalty, subject to certain limitations and a 1.0% soft call premium applicable during the first six months following the closing date of the June 23, 2021 Credit Agreement. The Initial Term Loan under the June 23, 2021 Credit Agreement will mature on June 23, 2028, at which time all outstanding principal and accrued and unpaid interest on the Initial Term Loan under the June 23, 2021 Credit Agreement must be repaid. The Revolving Facility will mature on June 23, 2026, at which time all outstanding principal and accrued and unpaid interest under the Revolving Facility must be repaid. The Company is also obligated to pay fees customary for a credit facility of this size and type.

The Company’s obligations under the June 23, 2021 Credit Agreement are required to be guaranteed by certain of its domestic subsidiaries meeting materiality thresholds set forth in the June 23, 2021 Credit Agreement. Such obligations, including the guaranties, are secured by substantially all of the assets of the Company and the subsidiary guarantors pursuant to a Security Agreement, dated as of June 23, 2021, by and among the Company, the subsidiary guarantors from time to time party thereto, and Wells Fargo Bank, National Association, as collateral agent.

The June 23, 2021 Credit Agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its restricted subsidiaries to, among other things, incur debt, grant liens, undergo certain fundamental changes, make investments, make certain restricted payments, and sell assets, in each case, subject to limitations and exceptions set forth in the June 23, 2021 Credit Agreement. The Revolving Facility also prohibits the Company from having a secured net leverage ratio in excess of 3.50:1.00 (subject to a temporary increase to 3.75:1.00 following the consummation of certain material permitted acquisitions) as of the last day of any fiscal quarter of the Company (commencing with the fiscal quarter ending September 30, 2021) if the aggregate borrowings under the Revolving Facility exceed 1% of the aggregate commitments thereunder (subject to certain exceptions set forth in the June 23, 2021 Credit Agreement) as of such date. As of March 31, 2022, the Company was in compliance with such covenants. The June 23, 2021 Credit Agreement also contains customary events of default that include, among other things, certain payment defaults, cross defaults to other indebtedness, covenant defaults, change in control defaults, judgment defaults, and bankruptcy and insolvency defaults. If an event of default exists, the lenders may require immediate payment of all obligations under the June 23, 2021 Credit Agreement and may exercise certain other rights and remedies provided for under the June 23, 2021 Credit Agreement, the other loan documents and applicable law.

The debt is carried at its principal amount, net of unamortized debt discount and issuance costs, and is not adjusted to fair value each period. The issuance date fair value of the liability component of the debt in the amount of $350.2 million was determined using a discounted cash flow analysis, in which the projected interest and principal payments were discounted back to the issuance date of the term loan at a market interest rate for nonconvertible debt of 3.4%, which represents a Level 2 fair value measurement. The debt discount of $0.9 million and debt issuance costs of $2.9 million associated with the Initial Term Loan under the June 23, 2021 Credit Agreement are being amortized to interest expense using the effective interest method over its seven-year term. Debt issuance costs of $0.4 million associated with the Revolving Facility are being amortized to interest expense over its five-year term.
20

MAXLINEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
7. Balance Sheet Details
Cash, cash equivalents and restricted cash consist of the following:
March 31, 2022December 31, 2021
(in thousands)
Cash and cash equivalents$151,111 $130,572 
Short-term restricted cash105 105 
Long-term restricted cash1,037 1,061 
Total cash, cash equivalents and restricted cash$152,253 $131,738 
As of March 31, 2022 and December 31, 2021, cash and cash equivalents included money market funds of approximately $0 and $20.4 million, respectively. As of March 31, 2022 and December 31, 2021, the Company had restricted cash of approximately $1.1 million and $1.2 million, respectively. The cash is restricted in connection with guarantees for certain import duties and office leases.
Inventory consists of the following:
March 31, 2022December 31, 2021
(in thousands)
Work-in-process$74,191 $72,369 
Finished goods64,850 59,334 
$139,041 $131,703 
Property and equipment, net consists of the following:
Useful Life
(in Years)
March 31, 2022December 31, 2021
(in thousands)
Furniture and fixtures5$