MaxLinear Inc. (NASDAQ:MXL) stock fell in premarket trading Friday despite a second-quarter earnings beat and strong third-quarter guidance.
After soaring 423.47% year to date, the stock appeared priced for perfection, making it susceptible to a pullback even after positive news.
Multiyear Growth Phase
“Our Q2 financial results highlight the exciting inflection in our business trajectory and the beginning of a multiyear growth phase for MaxLinear,” CEO Kishore Seendripu said during Thursday’s earnings call.
Second-quarter revenue rose 55% year over year and 23% sequentially to $168.8 million, beating the $164.702 million analyst estimate.
GAAP earnings were 2 cents per share, while adjusted earnings of 35 cents per share topped the 33-cent estimate.
GAAP gross margin improved to 57.8% from 56.5% a year earlier and 57.5% in the previous quarter. Non-GAAP gross margin was 59.5%, up from 59.1% a year earlier and unchanged sequentially.
800G Drives Growth
Management attributed the growth primarily to 800-gigabit PAM4 deployments.
“All the revenue growth we are seeing now is driven by 800-gigabit PAM4 success for us. And this will continue to 2027,” Seendripu said.
MaxLinear raised its 2026 optical data-center revenue outlook to $210 million to $230 million, with further growth expected in 2027.
MaxLinear said it “once again” raised its 2026 optical data center revenue expectations, citing “robust customer orders and rising visibility of program ramps.”
While management raised its outlook for optical data center revenue on the back of strong customer orders, executives cautioned that wafer, packaging and testing costs continue to climb as the company works to secure supply for growing demand.
The company said it expects margin expansion to continue but is closely managing rising input costs, with some increases being passed on to customers.
Keystone Gains Traction
Its Keystone platform is ramping into high-volume production for 400G and 800G deployments at major hyperscale customers in the U.S. and Asia. The company said Keystone delivers “almost 40% lower power consumption than competition.”
Follow-on platforms Annapurna and Washington are expected to begin generating revenue in 2027 before a more meaningful volume ramp in 2028.
CFO Steve Litchfield said MaxLinear made a substantial wafer prepayment to support rising data-center demand and an expanding order backlog into 2027.
Q3 Margin Outlook
For the third quarter, MaxLinear expects revenue of $210 million to $220 million, above the $173.837 million analyst estimate.
It forecasts GAAP gross margin of 57% to 60% and non-GAAP gross margin of 58.5% to 61.5%.
MXL Stock Price Activity: MaxLinear shares were down 9.85% at $82.25 in the premarket session on Friday, according to Benzinga Pro data.
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