MaxLinear, Inc. (MXL Quick QuoteMXL - Free Report) highlighted accelerating AI data center demand, expanding optical connectivity opportunities and improving profitability during its third-quarter 2026 earnings call. Management raised its annual optical data center revenue outlook and emphasized strong customer bookings extending into 2028.

The discussion centered on the company's transition toward higher-speed interconnect technologies, growing hyperscaler engagement and supply constraints that could influence future revenue growth.

MXL Raises Optical Revenue Outlook on AI Demand

CEO Kishore Seendripu raised the company's 2026 optical data center revenue outlook to $250-$270 million, citing stronger demand for its PAM4 digital signal processor (DSP) products.

Infrastructure revenues increased 210% year over year to approximately $125 million, becoming MaxLinear's largest revenue category. The Keystone 800G platform remained the primary growth driver, supported by production deployments across multiple hyperscalers.

CFO Steven Litchfield said management expects optical DSP growth to exceed overall market growth in 2027, supported by customer demand and expanding market share.

MaxLinear Targets Higher Fourth-Quarter Revenues

For fourth-quarter 2026, management projected revenues of $240-$260 million, with infrastructure growth expected to offset seasonal weakness in broadband and connectivity.

Litchfield guided non-GAAP gross margin in the range of 59%-62% and operating expenses of $65-$70 million. Management expects infrastructure-heavy product mix to support margin improvement despite manufacturing cost pressures.

Third-quarter revenues reached $218.06 million, exceeding the Zacks Consensus Estimate of $215 million. Adjusted earnings of 62 cents per share surpassed the consensus estimate of 56 cents. Non-GAAP operating margin improved to 29.5% from 22.3% sequentially.

MaxLinear, Inc Price, Consensus and EPS Surprise

MaxLinear, Inc price-consensus-eps-surprise-chart | MaxLinear, Inc Quote

MXL Sees 1.6T Products Driving Future Expansion

Seendripu outlined accelerating qualification activity for Rushmore, the company's 200-gigabit-per-lane platform supporting 1.6T optical architectures.

During questioning from Stifel, he clarified that initial 1.6T shipments could begin in early 2027, followed by stronger second-half deployments. Management expects 2028 to represent a more substantial growth period.

Seendripu also indicated that DSP average selling prices are approximately doubling during the transition from 800G to 1.6T. Bundling Washington transimpedance amplifiers could increase content value further, with management targeting broader attachment rates.

MaxLinear Addresses Supply Constraints and Bookings

StoneX analysts questioned management about order visibility and capacity limitations. Litchfield indicated that customers are placing orders throughout 2027 and into 2028, despite optical product lead times of approximately 26-28 weeks.

During Susquehanna's questioning about potential overordering, Seendripu rejected concerns about double ordering, emphasizing disciplined customer procurement. He identified semiconductor foundry capacity as a more significant supply limitation.

Needham analysts also examined rising wafer prepayments. Litchfield expects further increases as demand expands, while the company increased its revolving credit facility by $70 million to $200 million to support additional capacity requirements.

MXL Expands Beyond Optical Connectivity

Management highlighted Annapurna electrical interconnects and Washington optical components as additional growth opportunities. Initial revenues are expected in 2027, followed by stronger adoption in 2028.

Seendripu also discussed RackCommander, which addresses telemetry, power management and control-plane connectivity within AI infrastructure. Panther storage acceleration and XGS-PON data center connectivity broaden the portfolio.

Meanwhile, broadband and connectivity revenues improved sequentially, supported by fiber deployments and Wi-Fi 7 gateways. Litchfield expects broadband growth in 2027 despite near-term seasonal softness.

MaxLinear Maintains Focus on Execution

Management's tone remained confident regarding AI infrastructure demand, customer qualifications and expanding product opportunities. However, foundry capacity constraints and qualification complexity remain important execution considerations.

Seendripu emphasized continued product diversification and deeper hyperscaler engagement, while Litchfield highlighted operating discipline and improved liquidity as priorities supporting anticipated growth.

What MXL's Zacks Rank and Style Scores Indicate

MXL currently carries a Zacks Rank #3 (Hold), indicating a neutral near-term earnings estimate revision outlook. Its Growth Score of A and Momentum Score of B reflect favorable growth characteristics and price momentum. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

However, its Value Score of F indicates comparatively weak valuation attractiveness, while its VGM Score of C signals a mixed overall profile. These scores complement the Zacks Rank rather than independently determining investment prospects. The stock's Zacks Rank could change as analysts revise earnings estimates following the latest quarterly results.