MaxLinear, Inc EBITDA jumped on 33.0% and EBITDA Margin increased on 4.8 pp from 10.7% to 15.6%
02/05/2019 • About MaxLinear, Inc (
$MXL) • By InTwits
MaxLinear, Inc reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 15.6% in 2018, 10.7% in 2017, 23.1% in 2016, -1.0% in 2015, -2.8% in 2014
- MaxLinear, Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's a lot of higher than industry average of 0.6%.
- CAPEX is quite volatile: $2m in FY2018, $4m in FY2017, $8m in FY2016, $5m in FY2015, $8m in FY2014
- The company has unprofitable business model: ROIC is -2.7%
- It operates with high leverage: Net Debt/EBITDA is 3.0x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
MaxLinear, Inc's Revenue decreased on 8.4%. Revenue decline showed acceleration in 18Q4 - it was 22.9% YoY. During 2014-2018 Revenue growth topped in 2015 at 126% and was decelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 4.8 pp from 10.7% to 15.6% in 2018.
Gross Margin increased on 4.7 pp from 49.5% to 54.2% in 2018. SG&A as a % of Revenue increased slightly on 1.3 pp from 25.2% to 26.4% in 2018.
Net Income margin decreased on 4.6 pp from -2.2% to -6.8% in 2018.
Investments (CAPEX, working capital and M&A)
MaxLinear, Inc's CAPEX/Revenue was 2.0% in 2018. The company's CAPEX/Revenue increased slightly on 1.0 pp from 1.00% in 2015 to 2.0% in 2018. For the last three years the average CAPEX/Revenue was 2.0%.
Return on investment
The company operates at negative ROIC (-2.7%) and ROE (-6.7%). ROIC increased slightly on 1.2 pp from -4.0% to -2.7% in 2018. ROE decreased on 4.2 pp from -2.5% to -6.7% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.0x and Debt / EBITDA is 4.3x. Net Debt / EBITDA dropped on 3.1x from 6.1x to 3.0x in 2018. Debt dropped on 26.4% while cash increased slightly on 1.8%.
The company has no short term refinancing risk: short term debt is zero.
Management team
Kishore V Seendripu is a the company's CEO. Kishore V Seendripu is a founder and has spent 15 years with the company. Steven G Litchfield is a MaxLinear, Inc's CFO. Steven G Litchfield has spent 9 years at the company.
Financial and operational results
FY ended 12/31/2018
MaxLinear, Inc ($MXL) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 133.1 | 300.4 | 387.8 | 420.3 | 385.0 | -8.4% |
| Gross Profit | 82.0 | 155.4 | 230.0 | 208.0 | 208.8 | 0.4% |
| SG&A | 34.2 | 78.0 | 64.5 | 105.8 | 101.8 | -3.8% |
| EBITDA | -3.8 | -3.0 | 89.8 | 45.1 | 59.9 | 33.0% |
| Net Income | -7.0 | -42.3 | 61.3 | -9.2 | -26.2 | |
Balance Sheet
|
|---|
| Cash | 20.7 | 68.0 | 81.1 | 71.9 | 73.1 | 1.8% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 347.6 | 255.8 | -26.4% |
Cash flow
|
|---|
| Capex | 8.8 | 3.0 | 8.5 | 7.5 | 7.8 | 4.8% |
Ratios
|
|---|
| Revenue growth | 11.3% | 125.6% | 29.1% | 8.4% | -8.4% | |
| EBITDA growth | -56.6% | -19.8% | -3,084.1% | -49.8% | 33.0% | |
|
|---|
| Gross Margin | 61.6% | 51.7% | 59.3% | 49.5% | 54.2% | 4.7% |
| EBITDA Margin | -2.8% | -1.0% | 23.1% | 10.7% | 15.6% | 4.8% |
| SG&A, % of revenue | 25.7% | 26.0% | 16.6% | 25.2% | 26.4% | 1.3% |
| Net Income Margin | -5.3% | -14.1% | 15.8% | -2.2% | -6.8% | -4.6% |
| CAPEX, % of revenue | 6.6% | 1.0% | 2.2% | 1.8% | 2.0% | 0.3% |
|
|---|
| ROIC | -9.5% | -24.1% | 20.5% | -4.0% | -2.7% | 1.2% |
| ROE | -7.6% | -23.4% | 19.9% | -2.5% | -6.7% | -4.2% |
| Net Debt/EBITDA | | | -0.9x | 6.1x | 3.0x | -3.1x |
MaxLinear, Inc ($MXL) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 111 | 102 | 85 | 88 | | 24.7% | -2.5% | -25.2% | -22.9% |
| EBITDA | 25 | 20 | 7 | 8 | | 41.4% | 703.1% | -32.7% | -42.3% |
| Net Income | 2 | -14 | -14 | 0 | | -78.2% | -231.5% | | |
Balance Sheet
|
|---|
| Cash | 56 | 74 | 67 | 73 | | -37.6% | -15.4% | -6.1% | 1.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | -100.0% | | |
| Long Term Debt | 323 | 305 | 270 | 256 | | | -26.5% | -26.4% | -26.4% |
Ratios
|
|---|
| Gross Margin | 56.5% | 55.5% | 51.6% | 52.4% | | -3.0% | 6.4% | 6.0% | 6.6% |
| EBITDA Margin | 22.1% | 19.5% | 8.5% | 9.6% | | 2.6% | 17.1% | -1.0% | -3.2% |
| Net Income Margin | 1.7% | -14.2% | -16.4% | 0.4% | | -7.9% | -24.7% | -8.3% | 17.5% |
Peers in Semiconductors
Below we provide MaxLinear, Inc benchmarking against other companies in Semiconductors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
| MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
| SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
| Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
| Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
| |
|---|
| Median (67 companies) | 54.6% | 8.5% | 4.4% | 11.0% | 5.0% |
|---|
| MaxLinear, Inc ($MXL) | | 125.6% | 29.1% | 8.4% | -8.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
| NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
| Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
| Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
| Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
| |
|---|
| Median (65 companies) | 45.3% | 47.0% | 47.2% | 48.6% | 50.4% |
|---|
| MaxLinear, Inc ($MXL) | 61.6% | 51.7% | 59.3% | 49.5% | 54.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
| Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
| NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
| Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
| Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
| |
|---|
| Median (66 companies) | 9.9% | 11.5% | 9.2% | 10.7% | 9.8% |
|---|
| MaxLinear, Inc ($MXL) | -2.8% | -1.0% | 23.1% | 10.7% | 15.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
| Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
| First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
| Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
| Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
| |
|---|
| Median (66 companies) | 3.6% | 4.0% | 3.7% | 4.7% | 4.6% |
|---|
| MaxLinear, Inc ($MXL) | 6.6% | 1.0% | 2.2% | 1.8% | 2.0% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
| Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
| Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
| Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
| NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
| |
|---|
| Median (73 companies) | 5.7% | 3.8% | 1.4% | 3.2% | 5.2% |
|---|
| MaxLinear, Inc ($MXL) | -9.5% | -24.1% | 20.5% | -4.0% | -2.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
| Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |
| JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
| Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
| Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
| |
|---|
| Median (45 companies) | -0.5x | -0.2x | 0.4x | 0.4x | 0.3x |
|---|
| MaxLinear, Inc ($MXL) | | | -0.9x | 6.1x | 3.0x |
