MaxLinear (MXL Quick QuoteMXL - Free Report) reported third-quarter 2026 non-GAAP earnings of 62 cents per share, beating the Zacks Consensus Estimate by 10.71%. The company reported earnings of 14 cents per share in the year-ago quarter and 35 cents in the previous quarter.

Revenues of $218.1 million surged 72% year over year and surpassed the consensus mark by 1.44%. Sequentially, revenues increased 29%. 

Results benefited from accelerating adoption of optical AI data center products. Infrastructure revenues surged 210% year over year, reflecting strong demand for high-speed optical interconnects and expanding hyperscaler deployments.

MXL’s Infrastructure Business Fuels Revenue Growth

Infrastructure revenues reached $125 million in the third quarter, increasing 47% sequentially and 210% year over year. The business remained MaxLinear’s largest revenue category, exceeding the combined contribution of its other businesses. Growth was driven by accelerating deployment of optical connectivity products supporting AI infrastructure.

The Keystone 100-gigabit-per-lane PAM4 digital signal processor platform continued ramping into high-volume production across multiple hyperscalers. Strong adoption of 800G optical solutions supported infrastructure growth, while expanding customer engagements strengthened the company's position in next-generation data center connectivity.

MaxLinear’s Broadband and Connectivity Sales Rise

Broadband revenues increased to $53 million from $45 million in the previous quarter. Connectivity revenues reached $25 million compared with $24 million in the previous quarter. Industrial and multimarket revenues were $15 million.

Broadband and connectivity growth reflected large-scale deployments of fiber PON and Wi-Fi 7 gateways at major Tier 1 service providers in North America and Europe. MaxLinear also launched its Puma 9 platform, designed to support AI-ready DOCSIS 4.0 and 3.1+ multi-gigabit broadband services.

MXL’s New Products Expand AI Infrastructure Reach

Rushmore, the company’s 200-gigabit-per-lane PAM4 platform supporting 1.6-terabit optical connectivity, continued progressing through customer qualification. Initial revenues are expected in early 2027, with a stronger ramp anticipated in the second half of the year. MXL expects the platform to become a significant growth driver in 2028 and 2029.

MaxLinear is also expanding beyond optical interconnects through its Annapurna electrical retimer, Washington transimpedance amplifier and RackCommander control-plane portfolio. These products address high-speed electrical connectivity, telemetry and power management requirements in AI data centers.

The Panther storage accelerator platform continued gaining traction, with management expecting revenues to roughly double in 2026. Meanwhile, the company’s qualified XGS-PON hyperscale data center design win is expected to begin deployments in 2027, supported by secured backlog.

MaxLinear’s Margins Reflect Strong Operating Leverage

Non-GAAP gross margin expanded to 60% from 59.1% in the year-ago quarter. The improvement reflected a favorable infrastructure product mix and increasing scale, partly offset by manufacturing cost pressures. Management noted that some cost increases have been passed along to customers.

Non-GAAP operating expenses increased 12% year over year to $66.5 million in the reported quarter. Despite higher expenses, non-GAAP operating margin expanded to 29.5% from 12.1%, benefiting from higher revenues and operating leverage.

MXL’s Cash Position Reflects Capacity Investments

MaxLinear ended the third quarter of 2026 with approximately $109.9 million in cash, cash equivalents and restricted cash. 

Operating activities used approximately $13.6 million during the reported quarter, reflecting substantial wafer prepayments to support growing demand for data center products.

Inventory increased to $113.7 million from $105.5 million sequentially. However, days of inventory declined to 111 from 123, indicating improved inventory efficiency. Days sales outstanding increased to 31 from 28.

The company also amended its credit agreement, increasing its revolving credit facility by $70 million to $200 million. The expanded facility provides additional financial flexibility to support customer demand and growth opportunities.

MaxLinear Guides to Strong Q4 Revenue Growth

For the fourth quarter of 2026, MaxLinear expects revenues between $240 million and $260 million. Infrastructure is expected to drive sequential growth through optical data center interconnect demand, while broadband and connectivity revenues are projected to decline seasonally.

The company anticipates non-GAAP gross margin of 59-62% and non-GAAP operating expenses between $65 million and $70 million. 

MXL raised its 2026 optical data center revenue outlook to $250-$270 million. Customer bookings extend through 2027 into 2028, supported by demand for next-generation optical solutions. However, semiconductor foundry capacity constraints remain a challenge as the company prepares for additional product ramps.

Zacks Rank & Upcoming Earnings to Consider

MaxLinear currently has a Zacks Rank #3 (Hold).

Shopify (SHOP Quick QuoteSHOP - Free Report) , Seagate (STX Quick QuoteSTX - Free Report) and Teradyne (TER Quick QuoteTER - Free Report) are some better-ranked stocks in the broader Zacks Computer and Technology sector that are set to report their earnings over the next couple of weeks. Each of the three stocks sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Seagate is set to report its first-quarter fiscal 2027 results on Oct. 27, while Teradyne is scheduled to report its third-quarter 2026 results on the same date. Shopify is set to report its third-quarter 2026 results on Nov. 3. 

Shares of Seagate, Teradyne and Shopify have jumped 123.4%, 58.3% and 5%, year to date, respectively.