MXL 10-K & 10-Q changes, risk factors and insider trading

•Global economic conditions, including factors such as high inflation or a potential recession,conditions could continue to adversely affect our business,revenues, financial condition,margins, and results of operations.

•A significant variance in our operating results or rates of growth, if any, could continue to lead to substantial volatility in our stock price. Our revenue has declined, and weWe may not sustain our current level of revenue, which has previously declined, and/or manage future growth effectively. The impact of excess inventory in the channel has continued to influence our customers’ expected demand for certain of our products and negatively impact our revenue.

•We also are subject to risks associated with international geopolitical and military conflicts.

•We will lose sales if we are unable to obtain or retain government authorization to export certain of our products or technology related to the development or production of our products or if such authorizations are revoked.revoked, In addition,and we will be subject to legal and regulatory consequences if we do not comply with applicable export control laws and regulations.

•We depend on a limited number of customers for a substantial portion of our revenue, and the loss of, or a significant reduction in orders fromfrom, one or more of our major customers has had and could continue to have a material adverse effect on our revenue and operating results.

•A significant portion of our revenue is attributable to demand for our products in markets for broadband solutions, and development delays and consolidation trends among cable and satellite Pay-TV and broadband operators has adversely affected, and could continue to adversely affect our future revenues and operating results.

•We may be unable to make the substantial and productive research and development investments that are required to remain competitive in our business.

•The complexity of our products could result in unforeseen delays or expenses caused by undetected defects or bugs, which could reduce the market acceptance of our new products, damage our reputation with current or prospective customers and adversely affect our operating costs.bugs.

•We are subject to a variable amount of interest on the principal balance of our credit agreements and could continue to be adversely impacted by high interest rates in the future. Such indebtedness adversely affects our operating results and cash-flows, as we satisfy our underlying interest and principal payment obligations and contains financial and operational covenants that could adversely affect our operational freedom or ability to pursue strategic transactions that we would otherwise consider to be in the best interests of stockholders, including obtaining additional indebtedness to finance such transactions.cash-flows. In addition, high interest rates may make it more difficult for us, our customers, and our distributors to obtain financing and service our respective interest and debt obligations, which in turn has an impact on customer demand for our products and our distributors’ business.obligations.

•We are subject to governmental laws, regulations and other legal obligations related to privacy, data protection, and cybersecurity.cybersecurity, Ourand any inability of us to comply with such obligations may negatively impact our business.

•We have settled in the past intellectual property litigation and may in the future face additional claims of intellectual property infringementinfringement, including indemnification claims based on intellectual property allegations. Any current or future litigation could be time-consuming, costly to prosecute, defend or settle and result in damages and/or the loss of significant rights.

We terminated the Merger Agreement on July 26, 2023 and notified Silicon Motion that we are relieved of our obligation to close the merger. Silicon Motion has challenged the validity of that termination. On August 16, 2023, Silicon Motion delivered to us a notice, which Silicon Motion publicly disclosed, that it was purporting to terminate the Merger Agreement and that Silicon Motion would be commencing an arbitration before the Singapore International Arbitration Centre to seek damages from us arising from our alleged breaches of the Merger Agreement. On October 5, 2023, Silicon Motion filed a Notice of Arbitration with the Singapore International Arbitration Centre alleging that we breached the Merger Agreement. Additionally, on August 31, 2023, a Silicon Motion stockholder filed a class action complaint against us and certain of our current officers alleging that we materially misrepresented the likelihood the merger would close, and a similar individual action was filed by a different Silicon Motion stockholder on June 13, 2024. Other potential plaintiffs may file additional lawsuits related to the previously contemplated merger. See Part I, Item 3 (Legal Proceedings) of this report for more information on the Silicon Motion arbitration and the class action lawsuit. We intend to vigorously defend against these legal proceedings and any alleged breaches of the Merger Agreement, but due to the uncertainties inherent in any legal proceedings, we cannot predict the outcome of any legal proceedings. Legal proceedings are time-consuming, and may divert management’s attention from our business. Legal proceedings are also expensive and could result in substantial costs to us, including any damages we are required to pay and costs associated with the indemnification of directors and officers. Please refer to the Risk Factor entitled “If we are required to pay any damages in connection with legal proceedings related to the termination of the Merger Agreement with Silicon Motion, including for any alleged breaches of the Merger Agreement, or if we agree to make any payments in any settlement of legal proceedings related to the termination of the Merger Agreement, the amount of such damages or payments could be significant and require us to draw down on all our existing lines of credit and use our cash resources, which may not be sufficient to satisfy any damages or payments and could have a material adverse effect on our business, operating results, and financial condition. We expect that we may not be able to obtain financing on favorable terms if at all or raise additional capital for any such payments.”

We have already incurred, and expect to continue to incur, substantial costs in connection with the previously pendingterminated merger, the termination of the Merger Agreement, and the related legal proceedings. Aside from any damages or settlement amounts we may be required to pay, these costs are primarily associated with the fees of our financial advisors, accountants, lenders, and legal counsel. Since the merger has been terminated, we will have received little or no benefit in respect of such costs incurred. We may also experience negative reactions from the financial markets and our suppliers, customers, customer prospects, and employees with regard to legal proceedings related to the termination of the Merger Agreement. Any of these factors could have a material adverse effect on our business, operating results, and financial condition or on the trading price of our common stock.

If we are required to pay any damages in connection with legal proceedings related to the termination of the Merger Agreement with Silicon Motion, including for any alleged breaches of the Merger Agreement, or if we agree to make any payments in any settlement of legal proceedings related to the termination of the Merger Agreement, the amount of such damages or payments could be significant and require us to draw down on all our existing lines of credit and use our cash resources, which may not be sufficient to satisfy any damages or payments and could have a material adverse effect on our business, operating results, and financial condition. We expect that we may not be able to obtain financing on favorable terms if at all or raise additional capital for any such payments. Even if we are able to finance such payments through the incurrence of additional indebtedness, any material increase in our indebtedness would adversely affect our operating results and cash-flows as we satisfy our underlying interest and principal payment obligations. Issuing additional shares of our common stock, if material, will result in dilution of existing shares outstanding. Any loan agreement is also expected to contain financial and operational covenants that would adversely affect our operational freedom or ability to pursue strategic transactions that we would otherwise consider to be in the best interests of stockholders, including obtaining additional indebtedness to finance such transactions.

•we could be subject to substantial variable interest rate risk because our interest rate under term loans typically varies based on a fixed margin over an indexed rate (such as for the Initial Term Loan under the June 23, 2021 Credit Agreement) or an adjusted base rate. If interest rates were to continue to increase substantially, and we incur additional indebtedness, it would adversely affect our operating results and could affect our ability to service the indebtedness;

As our products are integrated into a variety of communications and industrial platforms, our competitors range from large, international merchant semiconductor companies offering a wide range of semiconductor products to smaller companies specializing in narrow markets, to internal or vertically integrated engineering groups within certain of our customers. Our primary merchant semiconductor competitors include Broadcom Inc., Qualcomm Incorporated, Realtek Semiconductor Corp., Skyworks Solutions, Inc., Credo Semiconductor Inc., MediaTek, Inc., Marvell Technology Group Ltd., MACOM Technology Solutions Holdings, Inc., Texas Instruments Incorporated, Analog Devices, Inc., Renesas Electronics Corporation, Microchip Technology Inc. and Semtech Corporation. It is quite likely that competition in the markets in which we participate will increase in the future as existing competitors improve or expand their product offerings. In addition, other companies are in the process of developing competing products for our current and target markets. Because our products often are building block semiconductors which provide functions that in some cases can be integrated into more complex integrated circuits, we also face competition from manufacturers of integrated circuits, some of which may be existing customers or platform partners that develop their own integrated circuit products. If we cannot offer an attractive solution for applications where our competitors offer more fully integrated products, we may lose significant market share to our competitors. Some of our targeted customers for our high speedoptical interconnect solutions are module makers who are vertically integrated, where we compete with internally supplied components, and we compete with much larger analog and mixed-signal catalog competitors in the multi-market high-performance analog markets.

Our ability to compete successfully depends on factors both within and outside of our control, including industry and general economic trends. During past periods of downturns in our industry, competition in the markets in which we operate intensified as manufacturers of semiconductors reduced prices in order to combat production overcapacity and high inventory levels. Many of our competitors have substantially greater financial and other resources with which to withstand similar adverse economic or market conditions in the future. Moreover, the competitive landscape is changing as a result of intense consolidation within our industry as some of our competitors have merged with or been acquired by other competitors, and other competitors have begun to collaborate with each other, which could result in significant changes to the competitive landscape. In addition, changes in government trade policies, including the imposition of tariffs and export restrictions, as well as actions by government agencies, could limit our ability to sell our products to certain customers and adversely affect our ability to compete successfully. These developments may materially and adversely affect our current and future target markets and our ability to compete successfully in those markets. See the risk factors “We also are subject to risks associated with international geopolitical and military conflicts” and “We will lose sales if we are unable to obtain or retain government authorization to export certain of our products or technology related to the development or production of our products or if such authorizations are revoked, and we will be subject to legal and regulatory consequences if we do not comply with applicable export control laws and regulations” below.

Global economic conditions, including factors that adversely affect consumer spending for the products that incorporate our integrated circuits, such as high inflation or a potential recession,inflation, could continue to adversely affect our business,revenues, financial condition,margins, and results of operations.

Inflation and uncertainty in customer demand and the worldwide economy has continued, and we have experienced and could continue to experience volatility in our sales and revenues in the future. Inventory oversupply could potentially lead to more inventory write-downs, including charges for any excess or obsolete inventory which could negatively impact our gross margins. Our products are incorporated in numerous consumer devices, and demand for such products is ultimately driven by consumer demand for products such as televisions, personal computers, automobiles, and cable modems. Many of these purchases are discretionary. Global economic volatility and economic volatility in the specific markets in which the devices that incorporate our products are ultimately sold, including the impacts of inflation and a potential recession,inflation, can cause extreme difficulties for our customers and third-party vendors in accurately forecasting and planning future business activities. If banks and financial institutions with whom we have banking relationships enter receivership or become insolvent in the future, we may be unable to access, and we may lose, some or all of our existing cash, cash equivalents and investments to the extent those funds are not insured or otherwise protected by the FDIC. This unpredictability has and could continue to cause our customers to delay or reduce their capital expenditures and spending on our products, which delayswould delay and lengthenslengthen sales cycles and negatively affects the overall demand for our products. Worsening economic instability could continue to result in a cancellation of such orders or otherwise adversely affect spending for information technology and limit our ability to forecast future demand for our products, which could reduce expected revenues or result in a write-down of any excess or obsolete inventory.cycles. Furthermore, during inflationary economic times, our customers may face challenges in gaining timely access to sufficient credit, which could impact their ability to make timely payments to us. These events, together with economic volatility that may face the broader economy and, in particular, the semiconductor and communications industries, may adversely affect, our business, particularly to the extent that consumers decrease their discretionary spending for devices deploying our products. However, the magnitude of such volatility on our business and its duration is uncertain and cannot be reasonably estimated at this time.

The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change, rapid product obsolescence and price erosion, evolving technical standards, short product life cycles and wide fluctuations in product supply and demand. TheFrom currenttime macroeconomicto factorstime, affecting customer demand has been aggravated by certain factors such as high interest ratesthese and excessother channelfactors, inventory,together with changes in general economic conditions, cause significant upturns and hasdownturns resultedin in,the industry, and anyin futureour business in particular. From time to time, these and other factors, together with changes in general economic conditions, cause significant upturns and downturns in the industry, and in our business in particular. Future downturns may result in, diminished product demand, production overcapacity, high inventory levels and accelerated erosion of our average selling prices. Furthermore, any future upturn in the semiconductor industry could result in increased competition for access to third-party foundry and assembly capacity. We are dependent on the availability of this capacity to manufacture and assemble all of our products. None of our third-party foundry or assembly contractors has provided assurances that adequate capacity will be available to us in the future. A significant downturn or upturn could have a material adverse effect on our business and operating results.

A significant variance in our operating results or rates of growth, if any, could continue to lead to substantial volatility in our stock price. Our revenue has declined, and weWe may not sustain our current level of revenue, which has previously declined, and/or manage future growth effectively. The impact of excess inventory in the channel has continued to influence our customers’ expected demand for certain of our products and negatively impact our revenue.

Our net revenue decreasedincreased from $693.3 million in the year ended December 31, 2023 to $360.5 million in the year ended December 31, 2024 and the decline in net revenue could continue in future periods. Among other factors, the decrease is as a result of macroeconomic conditions impacting customer demand; for example, the broadband market which has experienced slower than expected recovery. Prior2024, to 2023,$467.6 ourmillion net revenues grew to $1.1 billion forin the year ended December 31, 2022.2025, due to increases in broadband, connectivity and infrastructure markets, which had declined in previous periods due to decreased demand. We currently expect that revenue will fluctuate in the future, from period-to-period, consistent with the cyclical nature of our industry, and we could experience furtherslower declineoverall growth in revenue in the future due to current macroeconomic conditions impacting customer demand for various products. Further, the impact of excess inventoryproducts in theother channel has continued to influence our customers’ expected demand for some of our products and negatively affected our revenue.markets.

To manage any futurecontinued growth successfully, we believe we must effectively, among other things:

•recruit, hire, traintrain, retain and manage additional qualified engineers for our research and development activities, especially in the positions of design engineering, product and test engineering and applications engineering;

If we are unable to resume and managecontinue our growth effectively, we may not be able to take advantage of market opportunities or develop new products and we may fail to satisfy customer requirements, maintain product quality, execute our business plan, or respond to competitive pressures.

Our business, financial condition and results of operations could continue to be adversely affected by escalating trade wars, military conflicts, and other geopolitical and economic tensions among or with countries in which we conduct business, including between the United States and China, Israel (and its conflicts with Iran and Lebanon), and among other countries.. For example, as more entities are added to restricted export control lists, or as semiconductor technology exports to other countries are further controlled, our need to seek authorization from the U.S. government may impact our ability to do business.

•changes in import and/or export control restrictions and regulations by governments, such as changes to licensing requirements or other anti-diversion enforcement measures, as a result of ongoing armed conflict and geopolitical tensions among the United States, China, Russia, Ukraine, Iran, Israel, Lebanon, Russia, Ukraine, Greenland, Denmark, and other countries;

In addition to a significant portion of our wafer supply coming from Taiwan, Singapore, China and South Korea, substantially all of our products undergo packaging and final testing in Taiwan, Singapore, China, South Korea, Malaysia, and Thailand.Malaysia. Any conflict or uncertainty in these countries, including due to geopolitical conditions, natural disasters, public health or safety concerns, could have a material adverse effect on our business, financial condition and results of operations. In addition, if the government of any country in which our products are manufactured or sold sets technical standards for products manufactured in or imported into their country that are not widely shared, it may lead some of our customers to suspend imports of their products into that country, require manufacturers in that country to manufacture products with different technical standards and disrupt cross-border manufacturing relationships which, in each case, could have a material adverse effect on our business, financial condition and results of operations.

We also are subject to risks associated with international geopolitical and military conflicts.

Our business has been impacted and may continue to be impacted by geopoliticaldecreased conditionsdemand in regions such as China in part due to geopolitical conditions, including an escalating international trade warswar between the United States and other countries (includingparticularly between the United States and China), the military conflict in Israel, including the escalation in its conflicts with Iran and Lebanon, the Russia-Ukraine conflict, and increased political tensions in Europe, the Middle East and Asia. Currently, significant uncertainty surrounds the future trade relationships among the United States, China, and Russia.other countries. The U.S. government continues to make significant changes in U.S. trade policies that could negatively affect our business, and there may be further changes in U.S. trade policy because of the new U.S. presidential administration.policy. Additionally, retaliatory policies madeadopted by other countries, suchincluding as China and Russia or their allies,China, could also negatively impact our business. The trade and tariff policies of the United States, and of other countries with respect to the United States, remains fluid. In a number of cases, compliance with these policies has required us to take actions adverse to our business.

Beginning in May 2019, we ceased normal business operations with entities affiliated with Huawei Technologies Co., Ltd., and certain other entities following an amendment to the EAR which added these entities to the Entity List for acting contrary to the national security or foreign policy of the United States. We obtained export licenses for certain transactions with these entities. As noted above, such export licenses can be revoked or BIS could choose not to renew such licenses andwhich we have been required by BIS to pause, delay orwould halt the currently approved licensed activities under such licenses at certain times and could continue to do so in the future, which negatively impacts our revenue. Also, as described in more detail in the risk factor, “We will lose sales if we are unable to obtain or retain government authorization to export certain of our products or technology related to the development or production of our products or if such authorizations are revoked, and we will be subject to legal and regulatory consequences if we do not comply with applicable export control laws and regulations”, Semiconductor Manufacturing International Corporation, or SMIC, was added to the BIS Entity list in December 2020.activities.

We are a provider of communications SoCs used in broadband, mobile and wireline infrastructure, data center, and industrial and multi-market applications. We are a fabless integrated circuit design company whose products integrate all or substantial portions of a high-speed communication system, including RF, high-performance analog, mixed-signal, digital signal processing, security engines, data compression and networking layers, and power management. In most cases, these products are designed on a single silicon-die, using standard digital CMOS manufacturing processes and conventional packaging technologies. Importantly, our ability to design analog and mixed-signal circuits in CMOS allows us to efficiently combine analog functionality and complex digital signal processing logic in the same integrated circuit. As a result, we believe our solutions have exceptional levels of functional integration and performance, low manufacturing cost, and reduced power consumption versus competition. These solutions also enable shorter design cycles, significant design flexibility and low system-level cost across a range of markets.

In the year ended December 31, 2024,2025, net revenue was $360.5$467.6 million, which was derived in part from sales of RF receivers and RF receiver SoC and connectivity solutions into broadband operator voice and data modems and gateways and connectivity adapters, global analog and digital RF receiver products, radio and modem solutions into wireless carrier access and backhaul infrastructure platforms, high-speed optical interconnect solutions sold into optical modules for data-center, metro and long-haul networks, and high-performance interface and power management solutions into a broad range of communications, industrial, automotive and multi-market applications, and from revenue from intellectual property sale agreements.applications. We haveare experiencedcurrently slowerexperiencing than expected recoverygrowth in sales demand across all of our broadband, connectivity and infrastructure end markets. This is primarilymarkets driven by new product wins and market growth along with a recovery from excess inventory in the channels as well as slower demand in regions such as China.channels. Geopolitical tensions and changing trade policiespolicies, including escalating tariffs between the United States and China, and other countries, continue to influence the semiconductor industry.industry as well as the global economy. We continue to develop and innovate with new products for new solutions in advanced semiconductor process nodes such as 16nm and 5nm and beyond, while addressing opportunities capturing and processing high quality broadband communications and high-speed optical interconnect signals.

Products shipped to Asia accounted for 75%,82%, 75% and 82%75% of net revenue during the years ended 2024,2025, 20232024 and 2022,2023, respectively, including 41%,49%, 37%41% and 43%,37%, respectively, from products shipped to Hong KongKong, 12% from products shipped to Vietnam in 2025, and less than 10%, 11% and 16%, respectively, from products shipped to mainland China.China in 2023. Although a large percentage of our products is shipped to Asia, we believe that a significant number of the systems designed by these customers and incorporating our semiconductor products are then sold outside Asia. For example, revenue generated from sales of our products during the years ended December 31, 2024,2025, 20232024 and 20222023 related principally to sales to Asian ODMs and contract manufacturers delivering products into European and North American markets. To date, all of our sales have been denominated in United States dollars.

A significant portion of our net revenue has historically been generated by a limited number of customers through sales of our products, as well as consideration under intellectual property sale agreements.products. Sales of products to customers comprise both direct sales to customers and indirect sales through distributors. In the year ended December 31, 2025, two customers accounted for 28% of our net revenue, and our ten largest customers collectively accounted for 65% of our net revenue, of which distributor customers accounted for less than 10% of our net revenue. In the year ended December 31, 2024, one customer accounted for 12% of our net revenue, and our ten largest customers collectively accounted for 60% of our net revenue, of which distributor customers accounted forcomprised 30% of our net revenue. In the year ended December 31, 2023, one of our customerscustomer accounted for 10% of our net revenue, and our ten largest customers collectively accounted for 54% of our net revenue, of which distributor customers comprised 18% of our net revenue. In the year ended December 31, 2022, two of our direct customers accounted for 31% of our net revenue, and our ten largest customers collectively accounted for 65% of our net revenue, of which distributor customers comprised 27% of our net revenue. For certain customers, we sell multiple products into disparate end user applications such as PON ODUs, Wi-Fi routers, broadband gateways and cable modems.

Estimates in our business combination accounting that involve a significant level of estimation uncertainty include the valuation of identifiable intangible and tangible assets such as inventory, property and equipment, and intangible assets including in-process research and development, or IPR&D, and contingent consideration, which involve the use of forecasted financial information available at the acquisition date, including application of revenue growth rates and margin percentages, and use of a discount rate and various other assumptions as described in more detail in Notes 1 and 3 to our consolidated financial statements. When reported amounts are material, they may be sensitive to changes to certain assumptions used in the valuation. If the discount rate used in our valuations increased by 1%, it would result in a decrease to the valuation of intangible assets of an immaterial amount for our 2023 and 2021 acquisitions. The amortization and depreciation of such assets, and change in fair value of contingent consideration, impact our consolidated financial results in periods subsequent to the acquisition, and such amounts are disclosed in our consolidated financial statements. During the year ended December 31, 20242024, and 2023, we recorded impairment of intangible assets of $1.2 millionmillion, and $2.4 million, respectively, associated with certain acquired licensed technology. During the year ended December 31, 2022,2025, we did not record any material adjustments to the valuation of such assets, goodwill, or subsequent period adjustments to the consolidated statements of operations associated with our other business combinations.

Estimates in our revenue recognition that involve a significant level of estimation uncertainty include the estimates of price adjustments and returns under contractual stock rotation rights based on our analysis of expected value of actual price adjustment claims by distributors and product historical return rates. Any changes to such estimates, for example differences in actual sell-through activity versus our estimate of sell-through activity in our price adjustments, or actual vs. historical return rates, may impact our consolidated financial results in periods subsequent to recording those estimates, and such amounts are disclosed in our consolidated financial statements. Other than our estimates of sell-through activity and customer return rates, there are no assumptions inherent in our estimates in the valuation of price adjustments and returns that would result in sensitivity of reported amounts to such assumptions. DuringRefer theto yearsNote ended7 Decemberto 31,our 2024,consolidated 2023financial andstatements 2022 we have not recorded any materialfor adjustments to such estimates.

Estimates in the valuation of inventory that involve a significant level of estimation uncertainty include our estimates of excess and obsolete inventory based on forecasts of future demand for our products in inventory. Any changes to such estimates, for example differences in actual sales versus our estimates of demand, or conversely, the ultimate sell-through of fully reserved inventory for which we did not anticipate any future demand, impact our consolidated financial results in periods subsequent to recording those estimates. Other than our forecasts of future demand, there are no assumptions inherent in our estimates in the valuation of inventory that would result in sensitivity of reported amounts to such assumptions. During the years ended December 31, 2024, 2023 and 2022, we have not recorded any material net adjustments for such changes in estimates.

Estimates in our assessment of impairment of goodwill and long-lived assets that involve a significant level of estimation uncertainty and management judgment include the comparison of our market capitalization as of the annual impairment assessment date to the carrying value of goodwill, use of forecasted financial information for our projects remaining in IPR&D, if any, including growth rates and margin percentages, and a discount rate as of the annual IPR&D impairment assessment date, and our quarterly assessment of whether indicators of impairment exist with respect to all of our goodwill and long-lived assets. For example, a decision to abandon a project involving the technology underlying developed technology and IPR&D, if any, may result in immediate impairment of such assets in the quarter such decision is made. As of the October 31 assessment date, we did not have any remaining IPR&D. Impairment of goodwill and long-lived assets impact our consolidated financial results in periods subsequent to their acquisition, and such amounts are disclosed in our consolidated financial statements. During the year ended December 31, 20242024, and 2023, we recorded impairment of intangible assets of $1.2 millionmillion, and $2.4 million, respectively, associated with certain acquired licensed technology. During the year ended December 31, 2022,2025, we did not record any material adjustments to the valuation of such assets.

Research and Development. Research and development expense includes personnel-related expenses, including salaries and benefits and stock-based compensation, new product engineering mask costs, prototype integrated circuit packaging and test costs, computer-aided design software license costs, intellectual property license costs, reference design development costs, development testing and evaluation costs, depreciation expense, and allocated occupancy costs, partially offset by income from joint R&D projects and/or governmental R&D grants, if any. Research and development activities include the design of new products, refinement of existing products and design of test methodologies to ensure compliance with required specifications. All research and development costs are expensed as incurred. Income from joint R&D projects and governmental R&D grants are reflected as a credit to research and development expense when such income has been earned and any contingencies associated with retaining such income have been resolved.

Interest and Other Income (Expense), Net. Interest and other income (expense), net includes interest income, interest expense and other income (expense). Interest income consists of interest earned on our cash, cash equivalents and restricted cash balances. Interest expense consists of interest accrued on debt and amortization of discounts on debt and other liabilities. Other income (expense) generally consists of income (expense) generated from non-operating transactions, including a ticking fee paid to lenders following the termination of the Silicon Motion merger,and net gains (losses) from sales or impairment of investments and/or income or losses from investments, if any, including unrealized holding gains (losses) from certain investments required to be marked to market value, if any, and a gain from partial curtailment of employee defined benefit obligations.any.

Income tax provision.provision (benefit). We make certain estimates and judgments in determining income taxes for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expenses for tax and financial statement purposes and the realizability of assets in future years.

Net revenue decreasedincreased $332.7$107.1 million to $467.6 million for the year ended December 31, 2025, as compared to $360.5 million for the year ended December 31, 2024, as compareddue to $0.7increased billiondemand forin theour yearbroadband, endedconnectivity Decemberand 31,infrastructure 2023,markets, aswhile a result of macroeconomic conditions impacting customer demand, including excess inventorydemand in the channelindustrial builtand upmulti-market followingcategory the supply shortages in 2022.decreased. Broadband net revenue decreasedincreased by $86.7$87.6 million, driven by decreasesincreases in the volume of broadband SOCSoC and cable data shipments in this category, partially offset by revenue from certain intellectual property sale agreements and increases from reversals of unclaimed rebates due to expiration of rebate pricing.category. Connectivity revenue decreasedincreased $82.5$22.2 million due to decreasedimprovements in the volume of Wi-Fi, ethernet, and MoCA product shipments. The increase in infrastructure revenues of $34.3 million was driven by increases in the volume of shipments of certainhigh-performance productsanalog associatedproducts, withwireless residentialbackhaul, broadbandaccess, marketand decline,optical products, partially offset by revenuedecreases from certainin intellectual property salelicensing agreements. The decreaserevenue in infrastructurethis revenues of $63.2 million was driven by decreases in the volume of wireless backhaul shipments, and high performance analog shipments, partially offset by improvement in shipments of from high-speed interconnect products, and revenues from certain intellectual property sale agreements.category. Industrial and multi-market revenue decreased $100.4$37.0 million driven by a decreased volume of shipments of component and high-performance analog products.and component products in this category. Price changes did not have a material impact to revenues period over period.

Cost of net revenue decreasedincreased $141.9$36.1 million to $201.8 million for the year ended December 31, 2025, as compared to $165.7 million for the year ended December 31, 2024, as compared to $307.6 million for the year ended December 31, 2023.2024. The decreaseincrease was driven by aan decreasedincreased volume of shipments of our products as a result of macroeconomic conditions impacting customer demand for such products as described above under “Net Revenue”. Gross profit percentage declinedimproved for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023,2024, due to reducedproduct absorptionmix ofand decreased intangible amortizationasset and fixed costs.amortization.

Research and development, or R&D, expense decreased $44.3$16.6 million to $225.2$208.6 million for the year ended December 31, 20242025 from $269.5$225.2 million in the year ended December 31, 2023.2024. The decrease was driven by decreases in payroll and benefits expense of $24.2$18.8 million, CAD design tools and other software license expensecosts of $8.6 million, stock based compensation of $5.4 million, prototype expense of $5.0 million, bonuses of $4.5$9.1 million, consulting expense of $4.1 million, depreciation expense of $1.5 million and occupancyoutside services expenses of $1.0$4.8 million.million, Thesethe decreases were partially offset by a decrease in income from joint R&D and governmental grantsimpact of $10.9an million offset against R&D expense. The decrease in payroll and benefits expense, stock-based compensation, and bonuses are attributableincrease to the Workforce Reductions and cost reduction measures. The decreases in CAD design tool, consulting and prototype expenses are due to timing of project completion. The decrease in depreciation expense is from acquired assets becoming fully amortized as they reached the end of their useful lives. The decrease in income from joint R&D projects and governmentalgovernment grants is due to timing of governmental$2.9 million offset against R&D grantsexpense, occupancy expense of $1.3 million, various prototype expenses of $1.0 million, and terminationsupplies expenses of certain$0.8 programsmillion. duringThe thedecrease firstin expenses are attributable to workforce reductions and thirdcost quartersreduction of 2024 as a result of the Workforce Reductions.measures. The amount of income from research and development funded by others also varies from period to period depending on availability of such funding, including governmental grants. These decreases were partially offset by increases in bonuses of $17.7 million, stock-based compensation of $2.7 million, and engineering mask expense of $1.9 million. The increase in bonuses is due to improved financial performance over the prior period. The increase in stock-based compensation is due to incremental grants made to employees for retention purposes. Engineering mask expense varies from period to period depending on timing of new products entering the production phase.

We arehave reducingreduced our research and development spending, including via our Workforce Reductions,spending to meetalign evolvingwith demand;current however,project wedemands and expect our research and development expenses to increase in future years as we develop products to drive future growth.

We are reducing ourOur selling, general and administrative expenses,expenses includinghave increased over the prior year due to the factors described above, while certain costs within such expenses have been reduced via our Workforcecost Reductions;reduction however,measures. weWe expect selling, general and administrative expenses to increase in future years when we return to growing our sales and marketing organization to expand into existing and new markets.

Impairment losses in the year ended December 31, 2024 related to abandonment of certain intellectual property licenses. Impairment losses in the year ended December 31, 2023 also related to abandonment of certain intellectual property licenses.

Restructuring charges for the year ended December 31, 20242025 included $28.9 million in employee severance-related charges, $17.2$17.1 million in charges under contracts associated with cancelledCAD projectstool licenses which we ceased using, $6.9 million in employee severance and related impairment of assets,charges, and $7.2$0.4 million in charges related to reduction of space leased for office facilities. A large portion of the employee severance-related charges are estimated statutory severance benefits payablefacilities in the jurisdictions in which the terminated employees were employed,connection with thea remainderworkforce representing standard severance benefits.reduction.

Restructuring charges in the year ended December 31, 20232024 included $17.9$28.9 million in employee severance-related charges and $1.8$17.2 million in othercharges under contracts associated with cancelled projects and related impairment of assets, and $7.2 million in charges drivenrelated byto the abandonmentreduction of certainspace computer-assistedleased designfor softwareoffice licensesfacilities. usedA bylarge the terminated workforce. Approximately two-thirdsportion of the employee severance-related charges in 2023 wereare estimated statutory severance benefits payable in the jurisdictions in which the terminated employees were employed, with the remainder representing standard severance benefits.

The income tax provisionbenefit for the year ended December 31, 20242025 was $6.5$4.2 million compared to an income tax provision of $9.3$6.5 million for the year ended December 31, 2023.2024.

Our subsidiary in Singapore operates under certain tax incentives in Singapore, which are effective through March 2027. Under these incentives, qualifying income derived from certain sales of our integrated circuits is taxed at a concessionary rate over the incentive period. We also receive a reduced withholding tax rate on certain intercompany royalty payments made by our Singapore subsidiary during the incentive period. We recorded income taxes inDuring the yearsquarter ended December 31, 20242024, we recorded a full valuation allowance against our Singapore deferred tax assets. Due to this Singapore valuation allowance position, no income tax provision was recorded in Singapore for the year ended December 31, 2024. We recorded an income tax benefit in Singapore in the year ended December 31, 2025 and 20232024 at the incentive rate. The incentives are conditional upon our meeting certain minimum employment and investment thresholds within Singapore over time, and we may be required to return certain tax benefits in the event we do not achieve compliance related to that incentive period. We currently believe that we will be able to satisfy these conditions without material risk.

Our primary uses of cash are to fund operating expenses and purchases of inventory, property and equipment, and from time to time, the acquisition of businesses.businesses and repurchase of our common stock. In May 2022, we entered into the Merger Agreement to acquire Silicon Motion. However, on July 26, 2023, we terminated the Merger Agreement and were relieved of our obligations to close.

Our planned capital expenditures as of December 31, 20242025 were not material. Our consolidated balance sheet at December 31, 20242025 included $4.1 million in other long-term liabilities $4.4 million for uncertain tax positions, some of which may result in cash payment and $15.0 million received from other parties for jointly funded research and development projects which will be recognized into income when the contingencies associated with the repayment conditions have been resolved. The future payments related to uncertain tax positions recorded as other long-term liabilities have not been presented in the table above due to the uncertainty of the amounts and timing of cash settlement with the taxing authorities.

We believe that our $118.6$101.4 million of cash, cash equivalents, and restricted cash equivalents at December 31, 20242025 will be sufficient to fund our projected operating requirements for at least the next twelve months. As of December 31, 2024,2025, our indebtedness totaled $125.0 million, which consists of outstanding principal under the Initial Term Loan under the June 23, 2021 Credit Agreement. The June 23, 2021 Credit Agreement also provides the Company with the Revolving Facility in an aggregate principal amount of up to $100.0 million, which remained undrawn as of December 31, 2024.2025. The June 23, 2021 Credit Agreement was amended on June 29, 2023 to implement a benchmark replacement for LIBOR. The Initial Term Loan under the June 23, 2021 Credit Agreement has a seven-year term expiring in June 2028 and subsequent to the benchmark replacement amendment bears interest, at the Company’s option, at a per annum rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50%, (y) the prime rate then in effect and (z) an adjusted LIBORSOFR rate determined on the basis of a one-month interest period plus 1.00%, in each case, plus an applicable margin of 1.25% or (ii) an adjusted LIBORSOFR rate, subject to a floor of 0.50%, plus an applicable margin of 2.25%. Loans under the Revolving Facility initially bear interest, at a per annum rate equal to either (i) a base rate (as calculated above) plus an applicable margin of 0.00%, or (ii) an adjusted LIBORSOFR rate (as calculated above) plus an applicable margin of 1.00%. Following delivery of financial statements for the Company’s fiscal quarter ending June 30, 2021, the applicable margin for loans under the Revolving Facility will rangeranges from 0.00% to 0.75% in the case of base rate loans and 1.00% to 1.75% in the case of LIBORSOFR rate loans, in each case, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter. The Company is required to pay commitment fees ranging from 0.175% to 0.25% per annum on the daily undrawn commitments under the Revolving Facility, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter. Commencing on September 30, 2021, the Initial Term Loan under the June 23, 2021 Credit Agreement amortizes in equal quarterly installments equal to 0.25% of the original principal amount, with the balance payable at maturity on June 23, 2028. The June 23, 2021 Credit Agreement was amended on June 29, 2023 to implement a benchmark replacement for LIBOR.

In the year ended December 31, 2024,2025, net cash provided by operating activities was $19.6 million, compared to net cash used in operating activities wasof $45.3 million, compared to net cash provided by operating activities of $43.4 million for the year ended December 31, 2023.2024. The declineincrease in operating cash flows was driven by aan declineincrease in revenue from decreasedan volumeincreased of shipmentsshipment of our products as a result of macroeconomic conditions impacting customer demand for our products (as discussed under the heading, “Results of Operations,” above). Operating cash flows were also impacted by changes in our working capital, which increaseddecreased $68.4$23.0 million,million. inIn particular, in 2024,2025, we collected accounts receivable previously outstanding as of $177.6December 31, 2024 of $71.1 million, which was partially offset by payments against our price protection liability of $44.6$18.1 million and severance and other payments from theworkforce Workforce Reductionsreductions of $34.5$13.9 million.

Our use of cash in investing activities increased,declined, as we increasedmoved to optimize investments in property and equipment, including production masks. Net cash used in investing activities was $23.4$19.8 million for the year ended December 31, 20242025 and consisted of purchases of property and equipment of $17.7$12.6 million and purchases of intangible assets of $5.8$7.2 million.

WeOur continueduse of cash conservation in 2024financing followingactivities theincreased generaldue slowdownto our repurchase of common stock in the marketfourth environment.quarter of 2025. Net cash providedused byin financing activities was $1.3$18.7 million for the year ended December 31, 2024.2025. Net cash providedused byin financing activities consisted of net proceeds from the issuance of common stock upon exerciserepurchases of stock options of $4.1$20.0 million partially offset byplus cash outflows of repayments of minimum tax withholding paid on behalf of employees for restricted stock units of $2.8$2.2 million, partially offset by net proceeds from the issuance of common stock of $3.6 million.

Net cash usedprovided inby financing activities was $26.4$1.3 million for the year ended December 31, 2023.2024.

The followingdiscussion discussionunder the heading “Risk Factors” in Part I, Item 1A of our 2025 Annual Report on Form 10-K provides information concerning the material risks and uncertainties that we have identified and believe may adversely affect our business, our financial condition and our results of operations. Before you decide whether to invest in our securities, you should carefully consider these risk factors together with all of the other information included in this Quarterly Report on Form 10-Q, and in our other public filings, which could materially affect our business, financial condition or future results. Our risk factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part.

The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report. This discussion contains forward-looking statements that involve a number of risks, uncertainties, and assumptions that could cause our actual results to differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (our “2025 Annual Report”) and Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 in the section titled “Risk FactorsFactors.” included in Part II, Item 1A in this report.

In the threesix months ended MarchJune 31,30, 2026, net revenue was $137.2$306.0 million, which was derived in part from sales of high-speed optical interconnect solutions sold into optical modules for data-center, metro and long-haul networks, RF receivers and RF receiver SoC and connectivity solutions into broadband operator voice and data modems and gateways and connectivity adapters, global analog and digital RF receiver products, radio and modem solutions into wireless carrier access and backhaul infrastructure platforms, high-speed optical interconnect solutions sold into optical modules for data-center, metro and long-haul networks, and high-performance interface and power management solutions into a broad range of communications, industrial, automotive and multi-market applications. We have experienced growth in sales demand across our infrastructure, broadband,connectivity, and industrial and multi-market end markets driven by new product wins and market growth along with a recovery from excess inventory in the channels. Geopolitical tensions and changing trade policies, including escalating tariffs between the United States and China, and other countries, continue to influence the semiconductor industry as well as the global economy.growth. We continue to develop and innovate with new products for new solutions in advanced semiconductor process nodes such as 16nm and 5nm and beyond, while addressing opportunities capturing and processing high-speed optical interconnect signals and high quality broadband communications and high-speed optical interconnect signals.communications.

Products shipped to Asia accounted for 77%81% and 78%79% of net revenue during the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, including 48% from products shipped to Hong Kong, 12% from products shipped to mainland China, and 10% from products shipped to Vietnam during the six months ended June 30, 2026 and 49% from products shipped to Hong Kong and 10% from products shipped to mainland ChinaVietnam during the threesix months ended MarchJune 31, 2026 and 49% from products shipped to Hong Kong and 11% from products shipped to Vietnam during three months ended March 31,30, 2025. Although a large percentage of our products is shipped to Asia, we believe that a significant number of the systems designed by these customers and incorporating our semiconductor products are then sold outside Asia. For example, revenue generated from sales of our products during the threesix months ended MarchJune 31,30, 2026 and 2025 related principally to sales to Asian ODMs and contract manufacturers delivering products into European and North American markets. To date, all of our sales have been denominated in United States dollars.

A significant portion of our net revenue has historically been generated by a limited number of customers through sales of our products. Sales of products to customers comprise both direct sales to customers and indirect sales through distributors. In the threesix months ended MarchJune 31,30, 2026, one customer accounted for 13%11% of our net revenue, and our ten largest customers collectively accounted for 56%55% of our net revenue. For certain customers, we sell multiple products into disparate end user applications such as PON outdoor units, or PON ODUs, Wi-Fi routers, broadband gateways, and cable modems.

On October 5, 2023, Silicon Motion filed a Notice of Arbitration with the Singapore International Arbitration Centre alleging that we breached the Merger Agreement. See Note 14, Commitments and Contingencies of the Notes to Consolidated Financial Statements included in Part II,I, Item 1 (Legal Proceedings) of this reportQuarterly Report on Form 10-Q for more information on legal proceedings related to the termination of the Merger Agreement.

For a summary of our critical accounting policies and estimates, refer to Management’s Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2025, which we filed with the Securities and Exchange Commission, or SEC, on January 29, 2026, or our Annual Report. There have been no material changes to our critical accounting policies and estimates during the threesix months ended MarchJune 31,30, 2026.

Net Revenue. Net revenue is generated from sales of radio-frequency, analog, digital, and mixed-signal integrated circuits and intellectual property for access and connectivity, wired and wireless infrastructure, and industrial and multi-market applications, as well as patent and intellectual property licenses. A significant portion of our sales areis to distributors, who then resell our products.

Income Tax Provision.Provision (Benefit). We make certain estimates and judgments in determining income taxes for financial statement purposes. These estimates and judgments occur in the calculation of certain tax assets and liabilities, which arise from differences in the timing of recognition of revenue and expenses for tax and financial statement purposes and the realizability of assets in future years.

Net revenue increased $41.3$60.0 million to $137.2$168.8 million for the three months ended MarchJune 31,30, 2026, as compared to $95.9$108.8 million for the three months ended MarchJune 31,30, 2025, driven by increased demand in our infrastructure, industrial and multi-market and broadbandconnectivity categories, partially offset by seasonal declines in connectivitythe volume of sales in broadband markets. The increase in infrastructure net revenue of $36.3$50.3 million was driven by increases in the volume of shipments of optical, high-performance analog products, opticalanalog, and wireless backhaul and access products. The increasedecrease in broadband net revenue of $2.7 million was driven by ana increasedecrease in the volume of broadbandcable SoCdata shipments in this category.category, partially offset by an increase in broadband SoC shipments. The increase in industrial and multi-market net revenue of $3.9$9.2 million was driven by increased volume of shipments of component and high-performance analog products in this category. The decreaseincrease in connectivity net revenue of $1.6$3.2 million was driven by seasonal declinesincreases in the volume of MoCA and ethernetWi-Fi product shipments. Price changes did not have a material impact to revenues period over period.

Cost of net revenue increased $16.2$23.9 million to $58.3$71.2 million for the three months ended MarchJune 31,30, 2026, as compared to $42.1$47.3 million for the three months ended MarchJune 31,30, 2025. The increase was driven by an increase in the volume of sales as described above under “Net Revenue”. Gross profit percentage improved for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025, also due to aproduct decrease in intangible asset amortization.mix.

Research and development expense decreasedincreased $2.3$8.8 million to $53.2$56.0 million for the three months ended MarchJune 31,30, 2026, as compared to $55.5$47.2 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease was driven by decreasesincreases in stock-based compensation of $5.0$2.9 million, bonus expense of $2.5 million, prototype expenses of $1.0$1.2 million, and payroll and benefits expense of $0.7$1.1 million, partially offset byand the impact of a decrease in income from joint R&D projects and governmental grants of $2.5 million and an increase in bonus expense of $2.0$1.0 million. The decreaseincreases in stock-based compensation and payroll and benefitsbonus expense isare due to lowerincreased engineering headcount fromand workforceimproved reductions.financial Stock-basedperformance compensationover expensethe prior period. The increase in payroll and benefit expenses is also decreased due to timingthe ofincreased expenseengineering pertaining to retention equity grants made to employees in late 2024.headcount. The decreaseincrease in prototype expenses is due to timing of projects. The amount of income from research and development funded by others varies from period to period depending on availability of such funding, including governmental grants. The increase in bonus expense is due to improved financial performance over the prior period.

We have reducedaligned our research and development spending to align with current project demands and expect our research and development expenses to increase in future years as we develop products to drive future growth.

Selling, general and administrative expense increased $5.9$12.4 million to $42.5$45.8 million for the three months ended MarchJune 31,30, 2026, as compared to $36.6$33.4 million for the three months ended MarchJune 31,30, 2025. The increase was driven by increases in stock-based compensation of $2.2$11.5 million, professionalpayroll feesand benefits expense of $2.0$1.5 million, and payroll and bonus expense of $1.8$1.3 million. These increases were partially offset by a decrease in professional fees of $1.9 million. The increase in stock-based compensation is due to incremental equity grants and improved financial performance over the prior period. The increase in professional fees is due to legal fees related to ongoing litigation. The increase in payroll and bonus expense is due to increased headcount and improved financial performance over the prior period. The increase in payroll and benefits expenses is also due to increased headcount over the prior period. The decrease in professional fees of $1.9 million is attributable to lower legal fees related to ongoing litigation compared to the prior period.

Our selling, general and administrative expenses have increased over the prior year due to the factors described above. We expect selling, general and administrative expenses to increase in future years whenwith weincremental returngrowth to growingin our sales and marketing organization to expand into existing and new markets.

Restructuring charges decreased $7.4$5.5 million to $0.5$0.1 million for the three months ended MarchJune 31,30, 2026, compared to $7.9$5.6 million for the three months ended MarchJune 31,30, 2025. Restructuring charge for the three months ended June 30, 2026 were negligible. Restructuring charges for the three months ended MarchJune 31, 2026 included $0.4 million in lease related charges. Restructuring charges for the three months ended March 31,30, 2025 included $6.3 million charges under contracts associated with CAD tool licenses which we ceased using during the quarter and $1.6$4.6 million in severance and related expenses and $0.9 million in charges related to the reduction of space leased for office facilities in connection with a workforce reduction.

Interest and other income (expense), net changed by $1.5$3.7 million from an expense of $2.9$6.1 million in the three months ended MarchJune 31,30, 2025 to an expense of $1.4$2.4 million for the three months ended MarchJune 31,30, 2026. The change was driven by currency exchange gains of $1.4$3.8 million.

Income Tax Provision (Benefit)

The income tax provisionbenefit for the three months ended MarchJune 31,30, 2026 was $26.5$8.3 million compared to an income tax provisionbenefit of $0.7$4.1 million for the three months ended MarchJune 31,30, 2025.

The difference between our effective tax rate and the 21.0% U.S. federal statutory rate for the threesix months ended MarchJune 31,30, 2026 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items including a tax on net controlled foreign corporation tested income, or NCTI, stock-based compensation, and the impact of the valuation allowance against the Company’s Singapore deferred tax assets.

The difference between our effective tax rate and the 21.0% U.S. federal statutory rate for the threesix months ended MarchJune 31,30, 2025 primarily related to the mix of pre-tax income among jurisdictions, permanent tax items, stock-based compensation, and stockthe basedimpact compensation.of the valuation allowance against the Company’s Singapore deferred tax assets.

Our subsidiary in Singapore operates under certain tax incentives in Singapore, which are effective through March 2027. Under these incentives, qualifying income derived from certain sales of our integrated circuits is taxed at a concessionary rate over the incentive period. We also receive a reduced withholding tax rate on certain intercompany royalty payments made by our Singapore subsidiary during the incentive period. During the quarter ended December 31, 2024, we recorded a full valuation allowance against our Singapore deferred tax assets. Due to this Singapore valuation allowance position, no income tax provision was recorded in Singapore for the threesix months ended MarchJune 31,30, 2026 and 2025. The incentives are conditional upon our meeting certain minimum employment and investment thresholds within Singapore over time, and we may be required to return certain tax benefits in the event we do not achieve compliance related to that incentive period. We currently believe that we will be able to satisfy these conditions without material risk.

As of MarchJune 31,30, 2026, we had cash and cash equivalents of $61.1$64.8 million, restricted cash of $28.9 million and net accounts receivable of $40.9$51.0 million. Additionally, as of MarchJune 31,30, 2026, our working capital, which we define as current assets less current liabilities, was $102.8$130.5 million. Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. Collateral is generally not required for customer receivables. We limit our exposure to credit loss by placing our cash with high credit quality financial institutions. At times, such deposits may be in excess of insured limits. We have not experienced any losses on our deposits of cash and cash equivalents.

Our primary uses of cash are to fund operating expenses and purchases of inventory, property and equipment, and from time to time, the acquisition ofof, or investments in, businesses. In May 2022, we entered into the Merger Agreement to acquire Silicon Motion. However, on July 26, 2023, we terminated the Merger Agreement and were relieved of our obligations to close.

From time to time, we may also use cash to pay down outstanding debt and/or make investments. As of MarchJune 31,30, 2026, $125.0 million of principal was outstanding under a senior secured term B loan facility or the “Initial Term Loan under the June 23, 2021 Credit Agreement.” The Company also has available, subject to the terms and conditions of the agreement, a senior secured revolving credit facility, in an aggregate principal amount of up to $100.0$130.0 million which remained undrawn as of MarchJune 31,30, 2026. The proceeds of the revolving facility may be used to finance the working capital needs and other general corporate purposes of the Company and its subsidiaries.

Commencing on September 30, 2021, the Initial Term Loan under the June 23, 2021 Credit Agreement was initially set to amortize in equal quarterly installments equal to 0.25% of the original principal amount of the Initial Term Loan under the June 23, 2021 Credit Agreement, with the balance payable on the June 23, 2028 maturity date. We could be subject to substantial variable interest rate risk because our interest rate under term loans typically vary based on a fixed margin over an indexed rate or an adjusted base rate. If interest rates were to further increase substantially, it could have a material adverse effect on our operating results and could affect our ability to service the indebtedness. Please refer to the Risk Factor entitled “As of March 31, 2026, our aggregate indebtedness was $125.0 million, and we are subject to a variable amount of interest on the principal balance of our credit agreements and could be adversely impacted by high interest rates in the future. Such indebtedness adversely affects our operating results and cash-flows as we satisfy our underlying interest and principal payment obligations and contains financial and operational covenants that could adversely affect our operational freedom or ability to pursue strategic transactions that we would otherwise consider to be in the best interests of stockholders, including obtaining additional indebtedness to finance such transactions. In addition, high interest rates may make it more difficult for us, our customers, and our distributors to obtain financing and service our respective interest and debt obligations, which in turn has an impact on customer demand for our products and our distributors’ business” for a discussion of how our indebtedness could have a material adverse effect on our liquidity and capital resources.

Our cash and cash equivalents are impacted by the timing of when we pay expenses as reflected in the change in our outstanding accounts payable and accrued expenses. Cash used to fund operating expenses in our consolidated statements of cash flows excludes the impact of non-cash items such as, but not limited to, amortization and depreciation of acquired intangible assets and leased right-of-use assets and property and equipment, stock-based compensation, and any impairment of assets. Cash used to fund capital purchases and acquisitions of businesses and investments areis included in investing activities in our consolidated statements of cash flows. Cash paid to satisfy minimum tax withholdings on behalf of employees for restricted stock units, cash proceeds from issuance of common stock and debt, and cash used to pay down outstanding debt or repurchase stock, if any, are included in financing activities in our consolidated statements of cash flows.

As of MarchJune 31,30, 2026, our material cash requirements include long-term debt, non-cancelable operating leases, inventory purchase obligations and other obligations, which primarily consist of contractual payments due for CAD software licenses, as follows:

Total inventory purchase and other contractual obligations increased from $209.6 million as of December 31, 2025 to $219.2$305.9 million as of MarchJune 31,30, 2026 driven by increased sales demanddemand, which resulted in incremental purchase orders.orders, and incremental software licenses.

Our planned capital expenditures as of MarchJune 31,30, 2026 wereare notexpected material.to increase to support our production needs. Our consolidated balance sheet at MarchJune 31,30, 2026 included $4.3$4.0 million in other long-term liabilities for uncertain tax positions, some of which may result in cash payment and $15.0 million received from other parties for jointly funded research and development projects which will be recognized into income when the contingencies associated with the repayment conditions have been resolved. The future payments related to uncertain tax positions recorded as other long-term liabilities have not been presented in the table above due to the uncertainty of the amounts and timing of cash settlement with the taxing authorities.

We believe that our $61.1$64.8 million of cash and cash equivalents at MarchJune 31,30, 2026 will be sufficient to fund our projected operating requirements for at least the next twelve months. As of MarchJune 31,30, 2026, our indebtedness totaled $125.0 million, which consists of outstanding principal under the Initial Term Loan under the June 23, 2021 Credit Agreement. The June 23, 2021 Credit Agreement also provides the Company with the Revolving Facility which was amended in April 2026 an aggregate principal amount of up to $100.0$130.0 million, under which remainedno undrawnborrowings were outstanding as of MarchJune 31,30, 2026. The June 23, 2021 Credit Agreement was amended on June 29, 2023 to implement a benchmark replacement of SOFR for LIBOR. The Initial Term Loan under the June 23, 2021 Credit Agreement has a seven-year term expiring in June 2028 and subsequent to the benchmark replacement amendment, bears interest, at the Company’s option, at a per annum rate equal to either (i) a base rate equal to the highest of (x) the federal funds rate, plus 0.50%, (y) the prime rate then in effect and (z) an adjusted SOFR rate determined on the basis of a one-month interest period plus 1.00%, in each case, plus an applicable margin of 1.25% or (ii) an adjusted SOFR rate, subject to a floor of 0.50%, plus an applicable margin of 2.25%. Loans under the Revolving Facility initially bear interest, at a per annum rate equal to either (i) a base rate (as calculated above) plus an applicable margin of 0.00%, or (ii) an adjusted SOFR rate (as calculated above) plus an applicable margin of 1.00%. Following delivery of financial statements for the Company’s fiscal quarter ending June 30, 2021, the applicable margin for loans under the Revolving Facility rangesranged from 0.00% to 0.75% in the case of base rate loans and 1.00% to 1.75% in the case of SOFR rate loans, in each case, depending on the Company’s secured net leverage ratio as of the most recently ended fiscal quarter. The CompanyJune is23, required2021 Credit Agreement was again amended on April 22, 2026 to payamong commitmentother feesthings, ranging(i) fromprovide 0.175%for $30 million in incremental revolving commitments under MaxLinear’s senior secured revolving credit facility (the “Revolving Facility”), (ii) increase the applicable margin for loans under the Revolving Facility to 0.25%(x) 2.25% per annum onfor Term SOFR loans, and (y) 1.25% per annum for base rate loans, and (iii) extend the dailymaturity date applicable to the Revolving Facility from June 23, 2026 to March 23, 2028. The amendment also amends the applicable financial covenants to require that MaxLinear maintain (a) a total net leverage ratio of not greater than 3.50 to 1.00 and (b) unrestricted cash plus available and undrawn commitments under the Revolving Facility,Facility dependingin onan theamount Company’sof securedno netless leveragethan ratio$80 million, in each case, tested as of the mostlast recentlyday endedof any fiscal quarter.quarter of MaxLinear.

Net cash used in operating activities was $8.9$4.1 million for the threesix months ended MarchJune 31,30, 2026, compared to net cash used in operating activities of $11.4$0.9 million for the threesix months ended MarchJune 31,30, 2025. The decrease in operating cash flows was impacted by changes in our working capital, which decreased $22.9$53.3 million. The change in working capital was driven by a prepayment for wafers supporting rising demand for certain data center products.

Our use of cash in investing activities increaseddecreased by $2.3$2.0 million. Net cash used in investing activities was $4.2$7.4 million for the threesix months ended MarchJune 31,30, 2026 and consisted of purchases of property and equipment of $1.4$3.7 million, proceeds from convertible notes receivable of $2.0 million and purchases of intangible assets of $0.9$1.7 million.

Net cash used in investing activities was $2.0$9.4 million for the threesix months ended MarchJune 31,30, 2025 and consisted of purchases of intangible assets of $6.2 million and purchases of property and equipment of $2.0$3.2 million.

Cash flows from financing activities increased by $4.4$3.9 million. Net cash provided by financing activities was $2.3$3.9 million for the threesix months ended MarchJune 31,30, 2026 and included proceeds from borrowings under revolving credit facility of $20.0 million, a funding arrangement of $6.0$8.0 million and net proceeds from issuance of common stock, net of costs of $3.8 million, partially offset by repayment of borrowings under revolving credit facility of $20.0 million, and minimum tax withholding paid on behalf of employees for restricted stock units of $3.7$7.4 million.