MaxLinear

Second quarter revenue hit 168.8 million dollars, up 55% from a year ago. The data center infrastructure business grew 145% to 85 million dollars and is now half of all sales. Management guided next quarter to 210 to 220 million dollars, another jump of about 27%.

Adjusted operating margin reached 22.3%, up from 7.2% a year ago, while adjusted earnings per share jumped from 2 cents to 35 cents. The company also swung to a small positive profit under standard accounting rules, 2 cents a share versus a 31 cent loss last year. Gross margin is guided to about 60% next quarter.

The stock is up roughly four times in a year and still trades near 35 to 40 times next year's expected earnings. Standard accounting operating margin was still negative 2.5%, and much of the gap is stock handed out to employees. Operating cash flow was only 4.8 million dollars in the quarter as cash went to prepaying for chip wafers.

Growth leans on a handful of giant cloud customers, and the next generation 1.6 terabit chip has slipped to a 2027 ramp. There is also an open dispute over the canceled Silicon Motion merger, with a 160 million dollar termination fee in play against about 65 million dollars of unrestricted cash. With a beta near 3.9, this stock swings about four times harder than the market.