Good day, everyone and welcome to the MaxLinear Q3 Earnings Conference Call. Today’s conference is being recorded. At this time, I'd like to turn the conference over to Mr. Nick Kormeluk. Please go ahead, sir.

Thank you, operator. Good afternoon, everyone, and thank you for joining us on today's conference call to discuss MaxLinear's third quarter 2014 financial results. Today's call is being hosted by Dr. Kishore Seendripu, CEO; and Adam Spice, CFO. During the course of this conference call, we may make -- we will make projections or other statements regarding future conditions or events relating to our products and business. Among these statements, we will provide information relating to our current expectations for the fourth quarter 2014 revenue, including expectations for revenue trends in our cable, terrestrial, satellite and other target markets; gross profit percentage and operating expenses, the potential impact of our pending acquisition of Physpeed and our current views regarding trends in our markets, including our current views of the potential for growth in our cable, terrestrial, satellite and infrastructure markets. These statements are forward-looking statements within the meaning of Federal Securities Laws, and actual results may differ materially from results reflected in these forward-looking statements. We are subject to substantial risks and uncertainties that could adversely affect our future results. Our business and future operating results could be adversely affected if our current target markets, including the terrestrial, cable and satellite markets, do not grow, or if we are not successful in expanding our target addressable markets through the introduction of new products. In addition, substantial competition in our industry, potential declines in average selling prices, risks relating to intellectual property protection and outstanding intellectual property litigation, integration risks associated with Physpeed and other acquisitions if any, and cyclicality in the semiconductor industry could adversely affect future operating results. A more detailed discussion of these risk factors and other factors you should consider in evaluating MaxLinear and its prospects is included under the caption Risk Factors in our filings with…

Thank you, Nick, and good afternoon, everyone. Thank you all for joining us today. Before jumping into the financial highlights, I’d like to note that revenue in the third quarter of 2014 grew approximately 2% year-on-year. Strong growth in terrestrial offset the unanticipated decrease in demand for our cable gateway products which resulted in an overall revenue decline of 9% sequentially for the quarter. The unanticipated challenges in cable were largely related to decrease in demand for our higher data rate 16 and 24-channel gateway solutions at certain Cable operators after a strong first half 2014. We do not attribute this decrease to any observed loss in our competitive position. We continue to strengthen our competitive position in cable with the recent announcement of our industry leading 32-channel cable front-end receiver addressing DOCSIS3.0 Cable Gateway, which can support data speed in excess of 1 gigabit per second. In Terrestrial, we’re encouraged by our over 18% sequential growth in the quarter, driven by strength in both hybrid TVs and a variety of retail and pay TV operator set-top boxes. We are also excited about the progress we made in the quarter on longer term infrastructure growth initiatives. A few weeks ago we announced our pending acquisition of Physpeed Corporation, a privately held developer of high-speed physical layer interconnect products addressing enterprise data center and telecommunications infrastructure market applications. We expect the deal to close a little later in Q4 and look forward to talking more about our TAM expansion into infrastructure applications in the near future. Moving to the financial specifics, net revenue in the third quarter of 2014 was $32.5 million near the midpoint of our revised guidance of $32 million to $33 million. GAAP and non-GAAP gross margin in the third quarter were approximately 61.2% and 61.3% respectively, slightly…

Thank you, Kishore. I’ll first review our results and then briefly discuss our outlook. In summary, our Q3 revenue was $32.5 million, consistent with our revised guidance and came at slightly better than expected gross margin. As Kishore noted, we witnessed strong sequential growth in hybrid TV and set-top box receiver shipments, which offset significant unexpected weakness in higher channel count DOCSIS3.0 cable data gateways and modems and HD DTA applications. Now moving to the rest of the income statement, GAAP and non-GAAP gross margin for the third quarter were approximately 61.2% and 61.3% of revenue respectively, above our revised guidance of 61% on both a GAAP and non-GAAP basis. This compares to GAAP and non-GAAP gross margin of 62.5% and 62.6% respectively in the second quarter of 2014, and GAAP and non-GAAP gross margin of 62.4% and 62.6% respectively in the year-ago quarter. Our Q3 GAAP operating expenses increased $500,000 sequentially to $23.1 million, which includes $4 million of stock-based compensation, $900,000 net professional fees related to the Cresta Technology’s patent litigation matter which was disclosed in our previously filed 10-K for the year ending December 31, 2013 and $100,000 for accrual related to our performance based bonus equity plan for 2014. Consistent with our 2013, payouts under our 2014 performance bonus plan are expected to be settled in shares of MaxLinear stock. Net of these items, operating expenses was $18.2 million, which was up $1.2 million sequentially, but $300,000 lower than our guidance of $18.5 million, and up from $16.8 million in the year-ago quarter. Third quarter GAAP OpEx attributable to R&D was up approximately $1.1 million quarter-on-quarter, and up $400,000 year-on-year to $15 million, which included stock-based compensation of $2.6 million. The sequential $1.1 million increase in R&D spending was driven almost entirely by recent tape-outs, including…

(Operator Instructions) And your first question will come from Quinn Bolton with Needham & Company. Quinn Bolton - Needham & Company: Hi, guys. I just wanted to follow-up on your last commentary about seeing signs of stability returning in the cable business. Can you give us a little bit more color what you are seeing through the supply chain, what the ODM partners are saying and your thoughts on inventory levels? And then, I have got a couple of follow-ups. Thanks.

I’ll let Kishore talk a little more detail about some of the deeper items on that, on your line of questioning. I’d say that the one thing that it does give us some comfort in a stabilizing cable environment for us is the fact that, at this point, going into where we’re in the quarter, we basically have, especially 100% of our forecast for the quarter in backlog were shipped at this point. So we feel like the amount of risk in the cable side of business is relatively low. Now we’ve also had in prior quarters where we’ve had backlog that gets -- that’s rescheduled the push out, but we are not getting a sense of that at this point. I think we’re at a kind of a new lower level that we’ve been in the past quarter. So I think that we’re feeling relatively confident based on the backlog and the shipments that we already in the quarter that we’re seeing some stability. As far as visibility further up the food chain, typically we don’t have great visibility that far up into the food chain for us, but I will let Kishore speak that more detail.

Hi, Quinn. To add to what Adam is saying about the supply chain or the food chain, I think we’ve some reasonable visibility at our OEM levels. We get the shortage reports and such. But we don’t have much visibility at the operator level, because their procurement is distributed the world over and its not centralized. So having said that, our general view right now is that, talking to our customers is that the demand in the next several months is going to start moving more to the 16 and 24-channels in the mix. But as we see it right now, we’re seeing a greater portion, let’s say, two-thirds -- around two-thirds being the 8-channel devices and one-thirds being our 16 to 24-channel devices. So, I mean, that’s the stability that Adam is referring to in terms of what we know, but we do not know if the timing for the resumption of the growth in the cable units related to Q4 and Q3 is -- when that is going to come. We hope it comes in the first half of next year. Quinn Bolton - Needham & Company: Okay. And then just as a follow-up, it sounds like this is happened, but I think back at the time of the pre-announcement, you said that you have seen sort of a shutdown in new order rates along with cancellations. Has purchasing activity started to come back to more normal levels -- may be not at the levels you saw in early Q3 or in Q2, but has that purchasing behavior started to come back to kind of weekly orders or however they are placed? And then, the second question just on the satellite business, I think -- may be I misheard you, but did you say that the satellite gateway ramp has been pushed out into 2015? And if so, can you give us a sense -- previously, you have talked about hoping to get close to 10% of revenues for satellite gateways in the fourth quarter, if that’s pushed out, can you give us a sense of maybe now what quarter would you think satellite could approach 10% of revenues? Thanks.

Sure. I will take the first part of the purchasing question. I’d say that, again I think we’re not seeing, I’d say, volatility in the forecast from the OEM customers. In fact, what we’ve seen which also gives us confidence is the fact that things are stabilizing to -- maybe stabilizing to upward to the right, because we’ve had some pull-ins of some cable orders in the recent past. So we’re starting -- and those pull-ins are more for the higher channel count parts, not the 8-channel count. So again, I think as Kishore mentioned earlier, we’re just seeing some signs of life that maybe had been little bit absent for the last a month or so, that’s become a little bit more evidenced. So that’s really all we can say about the procurement side of things. Right now we typically go -- we’ve talked about this in prior similar times of the year and years past where this becomes a relatively uncertain point of year for us with our cable OEM customers, because you’re heading towards the end of the year, sometimes they’re managing their balance sheet a little bit more aggressively and typically what happens is we get more visibility coming out of CES as to what the real appetite is going to be for Q1, Q2 and so forth. So it’s a little bit early to say whether or not we think as Kishore said, there is going to be some kind of -- when we see the bounce back to stronger demand. But I think what we’re saying right now is we’re certainly not seeing situations further deteriorate, we’re seeing stability, we’re seeing little signs of pull-ins here and there, which I think is good news. And that’s pretty much as much we could say at this point. As far as the Satellite contributions, when we did the earlier preannouncement for the quarter, that of course was driven by cable, we also provide some indications that we were getting backlog coverage to get us comfortable that we were going to be at our aspirational point of satellite mix for Q4 or looked very likely that we were not going to be able to reach that because of not having that backlog coverage. Thus indeed kind of been the case as we now look at Q4. So what’s -- as Kishore mentioned, the design wins remained very solid. We’d have lost the design wins, we’re not aware of any programs that would have been canceled, but we have yet to get clear visibility as to when the real volume ramp is going to be. We will see growth in satellite Q3 to Q4 that’s significant on a percentage basis, but still doesn’t get us anywhere near the 10% mix in the fourth quarter. Quinn Bolton - Needham & Company: Okay. Thank you.

And your next question will come from Anil Doradla with William Blair. Anil Doradla - William Blair & Company: Hey, guys, couple of questions. The 8-channel versus 24-channel mix, little bit perplexing given that, we saw the pushback on 24-channel, but why -- when we step back in big picture, why is that there continues to be a preference for 8-channel versus 24-channel, given that the secular things are clearly in favor of solutions that would require 24-channels? And I had a couple of follow-ups.

Anil, I don’t think that just because the transition to the 24-channel has not -- is lesser in Q3 than what we’ve forecasted in Q4, that the transition is not going to happen. In fact, all the discussions we’re having with our OEMs and the end operators is all about -- they say next year is going to be the big move over to the 16 and 24-channels. So they’re pretty gung ho about it. It’s hard for us to say when that mix will actually transition over. In fact, my view is that based on this discussion is that somewhere in the middle of next year we should be crossing over to the 16 and 24-channels. Just that this particular delay has delayed the transition to the 16 and 24-channel. So I do not look at it anyway reneging on the plans of where the transition is going to be. In fact, we announced that 32-channel product and we -- and it is a lot of buzz and discussions being created on the 32-channel as well. So I think this is for real. It’s going to happen. It’s slower and those could be related to CapEx considerations and we shall wait and see. In fact, the pull-in request we’re getting as Adam referred to are more related to 24-channels than they’re related to 8-channels. So I think that tailwind will be in the direction of transition to 16 and 24-channels. Anil Doradla - William Blair & Company: Okay, good. And historically, we have seen Q4, Q1; we've had the offbeat behavior depending upon the inventories and the seasonality. Given what we have had with the pre-announcement flattish Q4, I know you don’t go out quarter away, but how should we be looking, at least qualitatively Q1, I mean, in the sense that do we get over this inventory headwind or macro headwind and then we get back into Q1 with growth or do you think we're still not sure how Q1 set us after the Q4?

If you look at the historical trends whenever we saw depressing Q4 in terms of the volume -- volumes, we’ve seen Q1 to stage a nice recovery towards the later -- later part of the quarter where we get bookings in a hurry and that’s where Adam and myself, when we meet you guys at CES, we will give you a more upbeat report on what’s happening. I mean that’s what Adam is referring to about the CES being a good point where we get visibility. I think that’s correct. But regard to the inventory, I’d be -- I think I’ve told in my reports, there were two factors to the reduction in cable revenues. Obviously, the data part, but we also said some softness in our HT DTA revenues. So I think a recovery in Q1, if it happens, it will happen hopefully across the cable segment and we should be able to help you with that qualitative information around the CES period. So, these are most important thing, right, is that right now we’ve got the competition beat on what we’re offering, the design win momentum, we’ve expanded our cable footprint, by designing new parts and cable on to the platform. I think in all fronts we’re doing the right things. We just have to stomach this particular situation in Q4. Anil Doradla - William Blair & Company: All right. Great. Thanks a lot, guys and best of luck.

Thanks, Anil.

And from Stifel, we will hear from Tore Svanberg. Erik Rasmussen - Stifel, Nicolaus & Company: Yes, thanks. This is Erik calling in for Tore. Getting back to the cable discussion again, how much of that is really kind of this inventory and kind of selection of -- continuous selection of 8, versus 16, 24 versus what’s the industry consolidation in terms of causing a pause in activity there? Can you kind of comment on any of that?

I think that we’re kind of simplistic people. We think that the decisions on CTs are not that overly impacted by these mergers. They could be CapEx related halting on both part – on the three parties involved in the ecosystem now, right the three operators. There are three big MSOs, so we hope whatever that is, that’s only a small impact, but we cannot prejudice the outcome of that. On the other hand, the demand for 16 and 24-channel the excess inventory, if you will, that we cannot extremely sure about, but one thing we know that the demand has slowed down quite a bit, the contract manufacturers were sitting on a lot of 16 and 24-channel parts and now that sort of the things are stabilizing and then we're getting like a steady stream of bookings, reflecting the reduced demand. So I’d say that -- but all the conversations so far its all about next year being 16 and 24-channels and we do not see any discussions, pricing related, volume related where the pressure is on 8-channel pricing, much more the discussion is about 16 and 24-channels. That alone is an indicator that there is some price elasticity there that will unlock the demand pretty nicely. Though we don't feel discouraged at all that there is some 16 and 24-channel versus 8-channel competition going on it’s just a natural sequence of things and that’s playing out a little slower than we had anticipated. Erik Rasmussen - Stifel, Nicolaus & Company: Okay. Thank you for that. Maybe on the gross margin, guidance is a little lighter than we had expected, what’s driving that? Is that a bottoming, how do you see gross margins trending; we had a new norm at kind of the 60% range?

Long-term we’ve always guided our gross margins to be on 60%. Having said that, we need to address the sort of the step down in the gross margin that we’re guiding for this quarter. Its really mix related. I mean, in the terrestrial product line there is one kind of mix, the set-top box related ISDB-T tuner-demod SoC chips in competition for the mix against the hybrid TV tuners. And inside the cable side, we’ve a mix that is related to 8-channel versus 16 and 24-channels. So if you take both these mixes in each of these categories, we’re seeing some adverse impact and therefore based on what we can see, we feel it’s prudent to guide the margin down for Q4 around 60%. So it's really mix related. As soon as we have some resumption in the new higher ASP 16 and 24-channel product that should bring us back to around the 61% norm hopefully. And then -- and the same thing in terrestrial TV, but at this stage until we have more clarity about cable resuming its transition to 16 and 24-channel, its kind of hard to handicap that question. Erik Rasmussen - Stifel, Nicolaus & Company: Okay, that's fair. Thanks. And maybe, just one last one, on the -- so it looks like you're getting a good -- you are benefiting from strong hybrid TV, is that some share gains that you’re assuming, you are kind of quoting there or how is -- where is the strength coming from?

Absolutely. I think either Adam or I mentioned in the script that due to new design wins translating in mass production, we’ve got some benefits of hybrid TV growth. And our hybrid TV growth like we have always said is always being about a bigger share in the China market, we’ve got greater shares, we have been growing our business there. And on the terrestrial set-top box side, it's -- it come from DTA shipments that are being exceptionally strong due to Thailand converting over to digital broadcast from analog broadcast where we have a bigger share of those shipment. But those shipments were in batch logs. They’re like an option process and our platform is the one that gain more share, and so we’re benefiting from that. Yes, in the summation of it, we’ve gained share both in hybrid television and terrestrial TV products. That’s helping us in getting our terrestrial revenues to be larger in proportion in Q3, Q4 timeframe. Erik Rasmussen - Stifel, Nicolaus & Company: Thank you very much.

From JMP Securities, we will hear from Alex Gauna.

Thank you. Kishore, your results obviously are a bit different than what your key rival Broadcom is reporting. I wonder if there is anything you see in the market or can point to that would cause the divergence between what you and Broadcom are seeing. And then also STMicroelectronics, on their earnings call, seem to express some optimism over their potential to gain some share going forward in the DOCSIS space. I’m wondering if you’d be attached to those initiatives and if you share their optimism. Thanks.

So firstly, Broadcom is not a rival. It’s just a different world and that enables the cable market and we benefit from our own platform where we’re present. So I’m glad to share with you guys that there is no share losses at all. This is my thesis, and I think the facts will fade out. So to the extent that people are seeing growth in the set-top box business, they’re all coming in the video side of the set-top box business and maybe the infrastructure side and not from the data side. I think the data side is very clear to us that it’s a status quo and MaxLinear platform is doing very well, if anything with the launch of our 32-channel product in an even better position, in the lead position there. So I think they’ve very different dynamic. They have a bigger portfolio that involves infrastructure, video boxes, they’re incredibly strong in and data whereas MaxLinear’s revenues are primarily from the data side. That’s the number one answer to your question, to your first question. And then, number two question related to calls with regarding ST gaining the market share in DOCSIS or wanting to position themselves better for DOCSIS share. We can’t tell you where we’re relative to how we work with them, but we’ve great partnership with ST in the satellite video segment market and then we do collaborate with them throughout the world in the video market reference platforms be it cable or be it satellite. So to the extent on the DOCSIS side, today we don’t have any revenues associated with an ST platform and we cannot speak for the future. So I think all in all, we believe that if ST gets a -- get some positioning in cable, it will primarily have to be in DOCSIS3.1 and that that’s ways off probably at 2016, 2017 scenario. And we can’t speak for that yet at this stage.

Okay. Thank you.

And next we will go to Gary Mobley with Benchmark.

Hi, guys. Thanks for taking my question. Can you hear me okay?

Yes.

Okay. I know part of your strategy to grow the cable related revenue is to rollout a series of [ph] [companion] chips to complement your (indiscernible) season and that was evident in the release of the various gain amplifiers announced, I think it was last month. Can you talk about what these gain amplifiers might mean for your bill of material and say a typical cable gateway, and when you might start to see the positive impact to the revenue growth as a result of these products? And then what other types of the [ph] [companion] chips we might see rollout from MaxLinear?

So Gary, I’ll take the question. The gain amplifier is a very, very high performance part and it's typically so far been implemented by companies like Maxim and NXP in exotic technologies whether it’s gas or silicon germanium by CMOS processors. These are the world’s first family of upstream gain amplifiers that have been implemented in CMOS and they’re done with lot more power efficiency than any of those products. What that means with customer is that the below material for the power related thermals are reduced to debate, so they gain a lot from that, so that instead of using a cell phone -- a three cell battery backup they could contemplate a scenario with -- for example they could maybe get away with that two cell battery backup. So it’s -- so that's kind of at the edge that’s what it helps at. From our point of view, if you look at these parts, they’re somewhere between sub $1, but much greater than $0.50. So if we take the total market $30 million to $40 million DOCSIS for sure and some video servers, you could see that this could easily add another $40 million of addressable market size for us, as the companionship. And one of the nice things about this chip is, this chip is not relegated to be used only in a MaxLinear Intel platform. It could be easily used in other platforms as they will bear the value power and the performance of the product. So I think in some the power -- these power amplifier products would represent about $40 million of addressable FAM in the sales channel that we’re -- we know very, very well. That’s number one. And what else could we do on this platform and it is a number of things, but for example, another yet natural product that we could chase is MoCA radio for example, because we see lot of our back-end partners, integrating MoCA baseband MAC into their main So. And then the MoCA radio front-end partners and players, partners that would be a natural candidate. Now how much bill of materials would that represent? If you assume the price points, some in the $2 range or so or more or slightly less, then multiplied by the $40 million boxes. You could see another $70 million to $100 million of addressable FAM. So these are pretty reasonable substantial in size. They intend to be good margin products, because of really high performance analog products, so we’re quite excited by that. And if you want to talk that other products on the same platforms like you’ve got a lot of Wi-Fi, you got PLC, all of these needs lot of external high performance analog RF component (indiscernible), and there would be natural candidates for us to chase. So that sort of the landscape of things that we can go after on these platform. So I hope that answers your question, Gary

It's very helpful. Thank you. Adam, you mentioned in your OpEx guide commentary that you expect some expenses associated with the Physpeed acquisition. I'm just wanting to know if that is just pre-closure M&A type of expenses or whether or not your revenue and non-GAAP OpEx guide for Q4 includes any contribution -- partial contribution from Physpeed?

Yes, so in the quarter we’re -- again, some of the deal closes. We will see contribution from Physpeed on both OpEx and revenue. Obviously, when we announced that deal, we said its relatively early stage company. They’ve got very nice design wins and they’re in very early shipment mode with some key customers. I’d say that the revenue contribution in the quarter will be relatively minor. The OpEx contribution in the quarter basically we said without the Physpeed acquisition, we’d be at about 17.5 on a non-GAAP basis and so -- and with its couple of hundred thousand dollars higher than that. So that’s we can expect from a partial quarter contribution on the OpEx side. As far as deal related expenses, again, we’re expecting not -- relatively small deal, so we’re not expecting a lot of incremental legal related deal costs, but that will also be reflected in the GAAP numbers.

Okay, all right. Thank you, guys.

And our next question come from Jay Srivatsa with Chardan Capital Markets.

Thanks for taking my question. Kishore, in terms of the satellite business, do you’ve a good handle on why these orders are getting pushed out? Do you sense that the service providers don’t want to adopt to newer -- shift to newer boxes or is it their reluctance to switch from current solutions, what is that you think is contributing to the delays here?

Okay. Once again you see -- I cannot speak for specific operators, but if you just look at the world of major satellite TV operators, you have the AT&T DIRECTV situation, you have the BSkyB, Sky Italia, Sky Deutschland situation related to the M&A stuff. But to keep things a little bit simpler, these are pretty complex boxes. They will not be impacted to large degrees and they have nice new boxes that are going to be deployed. But these bigger M&A decisions maybe a little bit in the CapEx side, but when you’re going zero to a finite number, these should not be impacted by the M&A situation and that’s what we’re hearing from these end market players. So what we’re seeing is it turns out, it’s like they’re still working out the change in the system that are primarily related to software and then getting ready for like the field trials and the pilot trials and putting them in a mass way. So it seems that we have hit some unanticipated delay in the ramp related to software fixes that they’re doing to these boxes. And while some parts -- some of these guys are on track, the other ones that were supposed to take off right in Q4 are facing the software hurdles. So there is not much we can do other than wait till they’ve overcome these issues. And as it when they overcome, we should start seeing some lead time deals coming that we would be very comfortable with to share with you. And then like I shared with you earlier on, in the IDC there are number of platforms in satellite that were demonstrated, all the new server gateway platforms on the satellite side and I’m really, really pleased to say that they all incorporate MaxLinear satellite gateway of front-end chips on any back-end that’s there in any of these boxes. So for me it has been pretty dejecting that this delay has happened, but we take like I said, enormous confidence of the fact that we’re in these boxes, they’re quite near the finish line and the ramps will happen as they happened once they gotten over the technology hurdles on the software.

Okay. In terms of timeline, I know you said 2015 and the timing still seems very uncertain. So I guess the question is what level of visibility do you’ve in terms of when these boxes are going to get deployed and start to again make some meaningful contribution to your revenues here?

Okay. I think we’re expecting steady growth in the revenues, not the 10% we talked in Q4. But I think we’ll be seeing some growth as we look forward to the next year in Q1 as well and this time we’re being a little once bitten twice shy kind of syndrome, we’ve been not wagering saying that it is going to be a certain percentage of our revenue in a certain quarter right now. We’re just becoming a little shy right now and not because of lacking confidence on where we stand in the ecosystem much more, because we mean to be credible and when that do not -- does not happen we want to be careful the next time.

Okay. Thank you. I appreciate it.

And at this time, I’d like to turn the conference back over to management for any additional or concluding remarks.

Well, thank you everyone. Thank you very much for attending this call. As a reminder, we’ll be attending the Stifel Nicolaus One-on-One Conference in Chicago on November 13 and look forward to seeing many of you there. And also we’ll be able to report to you progress on the -- on our Physpeed Corporation acquisition, and any product level details and future roadmap related information regarding that exciting new acquisition that we’re going through right now. Thank you very much.