MaxLinear, Inc reports 142% EBITDA decline in 2020 and 18.6 pp EBITDA Margin decline from 14.6% to -4.1%
02/03/2021 • About MaxLinear, Inc (
$MXL) • By InTwits
MaxLinear, Inc reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: -4.1% in 2020, 14.6% in 2019, 15.6% in 2018, 10.7% in 2017, 23.1% in 2016
- MaxLinear, Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's in pair with industry average of 3.7%
- CAPEX is quite volatile: $32m in 2020, $10m in 2019, $7m in 2018, $11m in 2017, $15m in 2016
- The company has unprofitable business model: ROIC is -14.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 50.9%. Revenue growth showed acceleration in 20Q4 - it increased 178.1% YoY. During the last 5 years Revenue growth bottomed in 2019 at -17.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.8 pp from -8.4% to -2.6% in 2020.
Gross Margin decreased on 8.4 pp from 52.9% to 44.5% in 2020. SG&A as a % of Revenue decreased slightly on 0.82 pp from 28.0% to 27.2% in 2020. During the last 5 years SG&A as a % of Revenue topped in 2019 at 28.0%.
Net Income margin dropped on 14.3 pp from -6.3% to -20.6% in 2020. Net Income margin declined at -7.7 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In 2020 MaxLinear, Inc had CAPEX/Revenue of 2.6%. The company's CAPEX/Revenue increased slightly on 0.83 pp from 1.8% in 2017 to 2.6% in 2020. It's average level of CAPEX/Revenue for the last three years was 2.3%. During the last 5 years CAPEX as a % of Revenue bottomed in 2017 at 1.8% and was growing since that time.
Return on investment
The company operates at negative ROIC (-14.1%) and ROE (-24.5%). ROIC dropped on 10.8 pp from -3.3% to -14.1% in 2020. ROE dropped on 19.6 pp from -4.9% to -24.5% in 2020. ROE declined at -9.1 pp per annum in 2016-2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.3x and Debt / EBITDA is . Net Debt / EBITDA dropped on 2.8x from 2.8x to in 2020. Debt jumped on 77.6% while cash jumped on 60.6%.
MaxLinear, Inc has no short term refinancing risk: cash is higher than short term debt (1,828.4%).
Management team
MaxLinear, Inc's CEO is Kishore V Seendripu. Kishore V Seendripu has 17 years tenure with the company. Steven G Litchfield is a MaxLinear, Inc's CFO. Steven G Litchfield has spent 2 years at the company.
Financial and operational results
FY ended 12/31/2020
MaxLinear, Inc ($MXL) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 387.8 | 420.3 | 385.0 | 317.2 | 478.6 | 50.9% |
| Gross Profit | 230.0 | 208.0 | 208.8 | 167.7 | 212.8 | 26.9% |
| SG&A | 64.5 | 105.8 | 101.8 | 88.8 | 130.0 | 46.5% |
| EBITDA | 89.8 | 45.1 | 59.9 | 46.2 | -19.4 | -142.0% |
| Net Income | 61.3 | -9.2 | -26.2 | -19.9 | -98.6 | |
Balance Sheet
|
|---|
| Cash | 81.1 | 71.9 | 73.1 | 92.7 | 148.9 | 60.6% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 4.8 | 8.1 | 69.3% |
| Long Term Debt | 0.0 | 347.6 | 255.8 | 216.2 | 384.5 | 77.8% |
Cash flow
|
|---|
| Capex | 8.5 | 7.5 | 7.8 | 6.9 | 12.5 | 81.3% |
Ratios
|
|---|
| Revenue growth | 29.1% | 8.4% | -8.4% | -17.6% | 50.9% | |
| EBITDA growth | -3,084.1% | -49.8% | 33.0% | -22.8% | -142.0% | |
|
|---|
| Gross Margin | 59.3% | 49.5% | 54.2% | 52.9% | 44.5% | -8.4% |
| EBITDA Margin | 23.1% | 10.7% | 15.6% | 14.6% | -4.1% | -18.6% |
| SG&A, % of revenue | 16.6% | 25.2% | 26.4% | 28.0% | 27.2% | -0.8% |
| Net Income Margin | 15.8% | -2.2% | -6.8% | -6.3% | -20.6% | -14.3% |
| CAPEX, % of revenue | 2.2% | 1.8% | 2.0% | 2.2% | 2.6% | 0.4% |
|
|---|
| ROIC | 20.5% | -4.0% | -2.7% | -3.3% | -14.1% | -10.8% |
| ROE | 19.9% | -2.5% | -6.7% | -4.9% | -24.5% | -19.6% |
| Net Debt/EBITDA | -0.9x | 6.1x | 3.0x | 2.8x | |
MaxLinear, Inc ($MXL) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 62 | 65 | 157 | 195 | | -26.7% | -21.0% | 95.7% | 178.1% |
| EBITDA | -3 | -5 | -13 | 1 | | -125.2% | -136.9% | -190.9% | -88.5% |
| Net Income | -15 | -22 | -37 | -25 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 98 | 107 | 97 | 149 | | 38.4% | 61.1% | 46.1% | 60.6% |
| Short Term Debt | 5 | 5 | 6 | 8 | | -40.9% | -42.7% | -20.7% | 69.3% |
| Long Term Debt | 215 | 214 | 382 | 384 | | -17.0% | -11.7% | 72.3% | 77.8% |
Ratios
|
|---|
| Gross Margin | 49.6% | 50.2% | 42.3% | 42.7% | | -3.7% | -3.2% | -10.1% | -9.6% |
| EBITDA Margin | -4.0% | -8.2% | -8.1% | 0.5% | | -15.8% | -25.7% | -25.4% | -12.4% |
| Net Income Margin | -24.9% | -33.4% | -23.4% | -12.7% | | -19.2% | -30.7% | -17.5% | -1.1% |
Peers in Semiconductors
Below you can find MaxLinear, Inc benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| Monolithic Power Systems, Inc. ($MPWR) | - | 21.2% | 23.7% | 7.8% | 34.5% |
| |
|---|
| Median (43 companies) | 1.2% | 11.0% | 4.9% | -3.0% | 1.0% |
|---|
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| |
|---|
| Median (43 companies) | 47.2% | 48.6% | 50.2% | 50.4% | 49.4% |
|---|
| MaxLinear, Inc ($MXL) | 59.3% | 49.5% | 54.2% | 52.9% | 44.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.3% | 12.9% | 17.4% |
|---|
| MaxLinear, Inc ($MXL) | 23.1% | 10.7% | 15.6% | 14.6% | -4.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| |
|---|
| Median (40 companies) | 3.7% | 4.7% | 4.4% | 3.8% | 4.0% |
|---|
| MaxLinear, Inc ($MXL) | 2.2% | 1.8% | 2.0% | 2.2% | 2.6% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (45 companies) | 1.4% | 3.2% | 3.0% | 3.8% | 5.5% |
|---|
| MaxLinear, Inc ($MXL) | 20.5% | -4.0% | -2.7% | -3.3% | -14.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| |
|---|
| Median (32 companies) | 0.4x | 0.4x | 0.3x | 0.5x | 0.3x |
|---|
