MaxLinear (NYSE: MXL) reported Q3 EPS of $0.39, $0.06 better than the analyst estimate of $0.33. Revenue for the quarter came in at $113.6 million versus the consensus estimate of $115.78 million.

Third Quarter Financial Highlights

The third quarter 2017 results continue to be influenced by the acquisitions and related purchase price accounting impacts of Marvell’s G.hn business in April 2017 and Exar in May 2017, and interest on the term loan related to the Exar transaction.

Non-GAAP basis:

• Non-GAAP gross margin was 62.5%, when calculated on GAAP revenue of $113.6 million, or 62.1% when calculated to adjust for the $0.8 million of deferred revenue eliminated under Exar acquisition accounting, which was the basis for prior guidance. This compares to 64.4% in the prior quarter (61.3% when calculated to adjust for the prior quarter's $5.2 million of deferred revenue eliminated under Exar acquisition purchase accounting), and 63.1% in the year-ago quarter.
• Non-GAAP operating expenses were $37.9 million, or 33% of revenue, compared to $36.9 million or 35% of revenue in the prior quarter, and $31.5 million and 33% of revenue in the year-ago quarter.
• Non-GAAP income from operations was 29% of revenue, compared to 29% in the prior quarter, and 30% in the year-ago quarter.
• Non-GAAP pre-tax margin was 25% of revenue, compared to 26% in the prior quarter, and 30% in the year-ago quarter.
• Non-GAAP effective tax rate was 4% of non-GAAP pre-tax income, compared to 10% in the prior quarter, and 2% in the year-ago quarter. Current quarter non-GAAP effective tax rate is based on year-to-date effective tax rate of 8% of non-GAAP pre-tax income.
• Non-GAAP net income was $27.1 million, compared to $24.7 million in the prior quarter, and $28.8 million in the year-ago quarter.
• Non-GAAP diluted earnings per share was $0.39, compared to diluted earnings per share of $0.35 in the prior quarter, and diluted earnings per share of $0.43 in the year-ago quarter.

Fourth Quarter 2017 Business Outlook

The company expects revenue in the fourth quarter to be in the range of $112 million to $116 million, and also estimates the following:

• GAAP and non-GAAP gross margin of approximately 47% and 61% to 62%, respectively.
• GAAP and non-GAAP operating expenses of approximately $57 million and $38 million, respectively.
• GAAP and non-GAAP interest expenses of approximately $3.7 million.
• GAAP and non-GAAP cash tax rates of approximately 40% and 8%, respectively.

GUIDANCE:

MaxLinear sees Q4 2017 revenue of $112-116 million, versus the consensus of $118.04 million.

For earnings history and earnings-related data on MaxLinear (MXL) click here.