Greetings and welcome to the MaxLinear Second Quarter 2017, Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host Mr. Gideon Massey, Investor Relations for MaxLinear. Thank you. You may begin.

Thank you, Operator. Good afternoon, everyone and thank you for joining us on today's conference call to discuss MaxLinear's second quarter 2017 financial results. Today's call is being hosted by, Dr. Kishore Seendripu, CEO; and Adam Spice, CFO. During the course of today's conference call, we will discuss our financial performance and review our business activities for the second quarter, specifically the acquisitions of Marvell's G.hn business, as well as that of Exar Corporation, both of which closed in the second quarter. After our prepared comments, we will take questions. Our comments today will include various forward-looking statements within the meaning of applicable security laws, including, without limitation, statements relating to our current projections, forecasts and expectations with respect to third quarter 2017 revenue and revenue contribution from key product markets, as well as gross profit percentage and operating expenses on a GAAP and non-GAAP basis; the potential impact on our business of recently completed acquisitions and any acquisitions we may pursue in the future and our current views regarding opportunities and trends in our market, including our current views of the potential for growth in each of our target markets. These projections, expectations and other forward-looking statements involve substantial risk and uncertainties and our actual results may differ materially from current forecasted results. Risks potentially affecting these statements and our business generally include risk related to the recent acquisitions and substantial integration challenges we may face that could affect our ability to realize currently anticipated synergies. Substantial competition in our markets, in particular, from increasingly large players as our industry consolidates; potential declines in average selling prices and factors that could adversely affect our operating expenses, such as litigation, asset impairment or restructuring. In addition, our target markets, including target markets we may pursue through recent or future acquisitions…

Thank you, Gideon, and good afternoon, everyone. Thank you all for joining us today. Before delving into the financial details, we are very excited to report Q2 2017 revenue of $104.2 million, which includes the elimination of $5.2 million of Exar deferred revenue owing to acquisition-related purchase price accounting rules. Absent this $5.2 million revenue elimination, revenue elimination, revenue would have been slightly above the high end of our guidance range of $107 million to $109 million. Additionally, we have begun deleveraging having made $30 million in prepayments in July and August towards our $425 million term-loan obligation. With the contribution of the acquisitions of Marvell's G.hn business and Exar Corporation, we have also made noteworthy progress towards our strategic goals of diversifying and expanding our served addressable market. We are rapidly transforming into one of the broadest and most advanced analog and mixed signal platform technology company. We remain committed to our strategy of diversification of revenues across large high value end markets consisting of the connected home, wireless and wireline network infrastructure, and high performance analog and mixed signal solutions addressing automotive industrial and broad multi-markets. Not only for the second quarter of 2017 even full with regards to corporate development, but we also marked significant business and engineering milestones. To highlight a few of these achievements, we commence production shipments of our technology 28-nanometer CMOS Microwave backhaul RF transceiver solution, addressing 5 Gigahertz to 45 Gigahertz frequencies. This is resulting in significantly expand engineering engagements with several Tier 1 customers not only in backhaul but also in the broader 5G wireless infrastructure markets. We also commenced volume production shipments of our 20 twenty gigabit per second millimeter Wave backhaul modem solutions to a Tier 1 Chinese OEM. We continue to be in the forefront of what we…

Thank you, Kishore. I'll first review our Q2 2017 results and then briefly discuss our outlook for Q3 2017. As Kishore noted, our Q2 revenue was $104.2 million, up 17% sequentially, net of a $5.2 million revenue elimination of pre-closing Exar deferred revenues under acquisition accounting. Connected home revenues increased 3% sequentially accounted for 76% of total revenue in the quarter. Within connected home, we witnessed strength in cable on DOCSIS 3.0 32 channel RF receiver SoCs and initial meaningful shipments of DOCSIS 3.1 RF receiver SoC to a North American operator. Connectivity increased as strong sequential growth from MOCA 2.1 deployment shipping to a North American telco operator was aided by a partial quarter contribution for acquisition of G.hn assets from Marvell. Within satellite, growth in digital channel stacking was more than offset by the continued decline of end of life analog channel stacking, which was down roughly $3 million sequentially, while 4K gateway frontends experienced a step back after a strong first quarter. Tuners shipping into the terrestrial OTA and OTT applications and legacy TV receivers were up 13% driven by previously disclosed high-volume lower margin Latin American opportunities. Legacy video SoC revenues derived from the Entropic acquisition remained flat at $2.3 million or 2% of total revenues at the high end of our expectations. We continue to expect the legacy video SoC business to be at the negligible 1% of our total revenues in 2017. Moving to our infrastructure products, revenues increased approximately 34% and accounted for roughly 15% of total revenue in the quarter. Within this mix, we witnessed strong sequential growth in wireless infrastructure and c.LINK wireline broadband access in China, supplemented by initial contributions of G.Now deployments related to our Marvell's G.hn acquisition and Exar products shipping into enterprise and data center applications. These…

Ladies and gentlemen, at this time we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Anil Doradla with William Blair. Please state your question.

Good afternoon. Thanks for taking the question. So kind of when I step back look at the big picture in the September quarter, Adam and Kishore, what is the biggest delta I mean in terms of your outlook, purely the optical stuff or in that some of the other moving parts? Can you just kind of scope out what has changed in your outlook in a kind of big picture?

Hi, Anil. If you really look at the high level they're primarily two events that are having a negative deltas on our forecast here. One is the legacy revenues from satellite analog outdoor units and also a pause in the satellite market on the gateway shipments. If you recall much of our revenues in the satellite are highly concentrated between two or three major operators that have been taking all the revenue thus far while we dive in spite for the rest of the world. So satellite is the biggest contributor along with optical. In fact, we are still not seeing recovery in the optical market. And so pretty much we have dropped a bunch of revenue into our forecast - from our forecast as a result of the optical market. If you recall we started the year projecting that optical will be about $25 million to $30 million of revenue and a big share of the revenue growth was going to come in the second half of this year. And in the last quarter as we entered the call, we had already factored - we had already triggered a developing negative view on the market in China in Q1 itself and we had taken out quite a bit a piece of the revenue that was masked by the diversity of our revenue sources. However, as we entered into Q3, the market has not recovered yet and combined with the lack of bookings we have no choice but to be extremely cautious about how we are moving forward here.

Yeah, Anil, I would add one thing that too which is important is similar to last year we're seeing the same seasonality play out in our cable business. In fact last year, we were down about 10% sequentially in our cable business if you look at Q2 to Q3 and that same dynamic is playing out almost the same percentage playing out in 2017 as played out in 2016. So I think if you what Kishore mentioned the well-known issues in optical combine that with the lumpiness of our satellite business and then you take our normal seasonality in our cable broadband business and that really kind of tells the story and I think if you add again the kind of final piece of that being the legacy roll off from Entropic is about a $5 million impact sequentially Q2 to Q3. So all of those things are basically offsetting a lot of goodness that's happening in other parts of our business particularly in the wireless infrastructure and also the wireline infrastructure access piece, so that's kind of hopefully that gives you all the moving pieces. There are a lot of balls in the air now those are lot of moving pieces in our model.

And that's good overview. So on the optical side for the $20 million to $25 million that you kind of talking about recently, are you resetting that, is there going to be more like $15 million to $20 million or $10 million to $15 million?

I just would like to go to the progression of that story at the beginning of the year to where we are today, we started the year guiding an expectation that we hope to do somewhere between $25 million to $30 million. Subsequently at the end of Q1 we tempered that down to around $20 million. And based on the sentiment right now and lack of any movement on the bookings or a product take from the customers, it is really pretty halted in a sense that's come to almost absolute halt in terms of product sell through. We have no choice but to think that this is going to be - if really Q4 recovers they're going to be in the $10 million to $15 million range otherwise $10 million would be the range we would end the year with but that's where our view is right now.

Okay. And if you don't mind me squeezing one final, DOCSIS 3.1, you talked about some pickup in some of the orders yet traditionally your peers reported and they're talking about a pause in the - with the North American cable operator which leads me to believe that it should impact you guys. Now can you reconcile some of the commentary from your peers relative to your income cost could you potentially see?

So actually cable has been strong, it's growing very strongly in Q2. Yes, the shipments of DOCSIS 3.1 have started to a major operator. Could there be a pause for 3.1, usually we have lot of experience in this market the ramps are always spotter a bit before they take off it's possible, but you have to keep in mind that we actually also ship DOCSIS 3.0 which if I think the peers you're referring to are the ones they are, they do not have any current shipments in DOCSIS 3.0. For us, in fact the revenue uptick even if 3.1 is what we call muted in the next quarter let's say does not mean that the natural patterns of our fall due out cycles of our DOCSIS deployments are going away. They are well there. In fact if you look into one of our biggest customer, Arris' earnings call, they do refer to a slowdown in Q3 but they are very optimistically talking about a Q4 that typical Q4 pick up for them which usually means when do MaxLinear's orders show up, right. So there's not a perfect correlation but we don't look at a pause in 3.1 as anything negative to our own DOCSIS revenues. However could there be a pause in 3.1, may be but that is not a bad thing for us at all. I mean it's really just hold the ramp sets up that's all. So our narrative does not change.

All right. Thanks a lot guys.

Thank you. Our next question comes from the line of Ross Seymore with Deutsche Bank. Please state your question.

Hi guys. Thanks for letting me ask a question. I wonder if I could just step up to the highest level, you guys have a lot of moving parts around right now that will be towards the accounting side. So if we think about the two acquisitions and then re-bucketing it into different segments, was the percentage of sales Adam that you gave that the different three segments represented in the second quarter was that on the $104 million or on the $109 million? And then a follow-up to that is the percentage that you gave for the third quarter inclusive of any similar impact on revenue from the acquisitions, or is that all now on the –?

So the percentages were based on the $104 million, everything we've done is basically reconciled to our GAAP revenue. And that's the only revenue that we're reporting. We call attention to the $5.2 million impact from the deferred revenue accounting under the Exar purchase accounting but that said all the calculations were based on $104 million that was reported. And then as far as the Q3, there's a very I would say minimal impact in Q3 it's less than $1 million worth of similar deferred revenue elimination. So it's not a needle moving event in Q3.

Okay. And then so if I take that then it looks like you have about a $9 million in your connected home business sequentially? Without getting into the exact numbers unless you want to of course the biggest moving parts in that if you could just roll through what the biggest $9 million creating negative would be?

Sure. I think it's pretty easy to get to right. I mentioned that we had about a 10% sequential challenge in cable driven by the normal seasonality there. So if you want to think about that as being you know think about a $3 million or $4 million of the impact. Then if you want to think about the analog channel stacking and the video SoC from Entropic that's $5 million, right, and that's pretty much the bulk of it right there between those two pieces.

Got it. And then as we look forward - a couple more housekeeping items, interest expense in the third quarter and then as you look into next year, the tax rate was lower in the second quarter lower again in the third quarter than what I expected. What do you think now the tax rate for the combined company looks like in 2018?

Yeah, so interest expense for the third quarter, it's difficult to put an exact beat on that because the way they were prepaying and of course we can't exactly predict what LIBOR is going to be and we do a one month LIBOR rate, but you want to think of interest expense being roughly about $4 million in the quarter that's probably about right. And then your second question sorry again was on.

Tax rate next year.

So tax rate I think you should be assuming about a 10% cash tax rate for the remainder of 2017. So there's been a lot of activity on that front too and implementing a new tax structure and so forth so there's a lot of moving pieces there of course with the reversal of the evaluation allowance on the deferred tax assets creates again another layer of complexity. The way we think about it which is cash tax rate non-GAAP it's probably again if you plan a 10% rate, I think that's the right place to be for the remainder of 2017.

How about next year?

For 2018, we've been guiding people towards call it a 20%-ish non-GAAP cash tax rate in as we were kind of in 2018. I don't think there's a lot of reason to change that right now. I think that we're benefiting from things that we've done so far in 2017 plus the benefits that we got from the Exar in a while and so forth. So without leaning too far forward, I wouldn't be changing your models right now for 2018 for the for the non-GAAP tax rate, I'd leave it around the 20% range.

Okay, thanks.

Thank you. Our next question comes from the line of Tore Svanberg with Stifel. Please state your question.

Yes, thank you. First question is on the Exar revenues so. Hopefully Adam may be you could just explain a little bit the deferred here where does that eventually show up in the P& L or in the balance sheet? And I know now it's kind of like looking at different buckets but is it safe to say that Exar would still contribute around $30 million for Q3?

Yeah. So in the first question what happens to the revenue elimination, essentially if you think about Exar's model was similar in some respects to with dealing the distributor sales. So a portion of their sales were - revenue was recognized on sell through and other pieces on sell in depending what type of product, what kind of market it was going into, but essentially this relates to the similar type way that we recognize that MaxLinear is going to recognize revenue through distribution which is on sell through. So when there's a deferred revenue balance at close under purchase accounting that gets basically taken to zero and eliminated. So basically we will never get credit for that revenue but what shows up in the financial statements, we collect cash. So it's one of those things where you don't get to recognize the revenue but it doesn't impact reality which is the cash generation and that cash for those products that ship through that we didn't get the revenue recognition for that cash if you look at normal collection cycles some of that is in-house already, the rest will be collected in Q3. So it doesn't impact cash or cash generation, it's just an accounting mechanical issue if you will.

Got it. And Exar for Q3, should we still assume around $30 million?

Yeah, Exar is doing well. I mean they're performing pretty much on line with what we were expecting with the street models that have been forecasting before we did the acquisition. So there's no change in those - in that outlook.

Okay. And sorry to bring this up by now Adam but just given the deferred revenue there is sort of an accounting standard change coming up for Q1 of '18. So are you going to be kind of reverting back to sell in with Exar in next one year?

Yes. So everyone has to - well not everybody but as of January 1, we're planning to adopt the new standard of revenue, the 606 pronouncement. So that rule involves us doing a very similar thing. You look at the deferred revenue that would be on the books as of December 31 and you won't get credit for that revenue when that ships. Now this will impact everybody that's not just the mix. Anyone who's currently on the sell through versus sell in and remember, some of - the Exar business for example was on sale and somewhat true, we're all in the sultra basis, but we've done the analysis, we're well under our way of looking at the implementation of that and right now we don't think it's going to be a very meaningful impact to our 2018, certainly our Q1 outlook. It's going to be fairly small, so I don't think it's worth a lot - I certainly wouldn't be adjusting any models based on that impact at this point. It's going to be pretty small.

Sounds good and just a question on Q4, I know you typically don't guide more than a quarter out, but if we just sort of directionally look at that quarter, all of the legacy revenue now is basically very small, obviously the optical business now has corrected meaningfully. How should we think about some of the moving parts of each business unit now going into the December quarter?

Tore, let me qualitatively take up the question and Adam maybe provide a little bit more specific. Our cable business has large volatility usually going into Q4, sometimes we see late towards Q4 a pickup in order activity as our customers work down their inventories. So sometimes it happens earlier in Q4 and sometimes it starts happening in Q1. So we expect our cable to be resurging in a positive way and the other piece is that we already mentioned to skip that, we expect for this year to cable to have grown - cable data grown double digit. The other aspects are, we expect to see our wireless infrastructure to get stronger, it has wonderfully so far for us with the designs that are in play and their interaction, their shipping, we expect our wireless activities to pick up a little and then at the same time our access infrastructure we expect to grow pretty nicely as well. So the infrastructure elements we expect them to grow nicely and the data stuff to recover and then the Exar element of the revenues to also grow somewhat. So I think the real dog here is satellite, I hate to use that word because the revenue is concentrated two or three major operators and those operators are right now little bit - have subscriber challenges, so we're seeing some lumpiness. We're seeing some strength in Europe, weakness in US, so I think that satellite is the one we want to handicap. And the other thing I still want to say is that there is still no clarity how Q4 plays out in optical, so overall as a company we expect to see growth in Q4. However, if you just want all the elements that go into it, people have talked about the planning commission in China meeting in September, October timeframe and that may relieve some orders sort of thing. But those things take time, so at this point we are being very, very cautious about Q4 as well on optical. So, we've always been cautious as a company, but it is the reality that there is no bookings moving. So I would still hold out a caution for Q4 on optical. So in all these on a secular point of view, the satellite declines would be majority or almost substantially behind us on the legacy revenues and satellite GP would be lumpy, it's hard to predict now, but the rest of the business is going to behave very nicely.

That's very helpful. Thank you.

Yeah, I'd put a little bit more of a - a kind of a guard band around that. I would basically say, if you want to look at the big moving pieces, I think our infrastructure, we feel very comfortable about growth going forward in our infrastructure business both as represented in Q3, but also towards Q4. I think if you look at our connected home business, that one is more likely to be kind of the muted business in as we look at Q3 transitioning to Q4. By muted I mean, if you want to think of that business as being roughly flattish sequentially from Q3, I think that's probably not a bad place to kind of think about it. And then on our industrial multimarket, we're still seeing growth in that. So if you look at two of our three areas, I would say, strong growth in the infrastructure side, reasonable growth on the multimarket side of things and then a flatness on the connected home side of things is probably the best we would kind of probably think about it in today's view for Q4.

That's very helpful. Thank you.

Thank you. Our next question comes from the line of Quinn Bolton with Needham & Company. Please state your question.

Hey, guys. First, a couple of clarification, just as you look at the optical business in the fourth quarter, clearly visibility into China where I think most of your sales historically have been - visibility is pretty low and so I assume, you probably don't expect much of a recovery in that core China business. But what about the new product ramps, and you guys are coming into the year, but most of the growth would actually come from outside of China, so have those new product design wins just sort of pushed out into the rate or are you feeling less confident about those wins. Can you just talk about your expansion of the optical business outside of the two Chinese customers that accounted for most of the revenue last year?

Yeah, let me try to reconcile at a high level and then Kishore can provide more color. But essentially if you recall we're talking about that. Yes, you're correct. We said that for 2017, the growth would be outside of the China metro laser drivers, which was driving pretty much all the revenue in 2016 for MaxLinear. Where the growth was going to come from wasn't necessarily outside of China, but there were some outside of China including datacenter TIA revenues that were starting to delivering the mix, but there was also quite a bit of growth types of TIAs into those metro and long-haul deployments that are also in China, they are particularly China specific. So while we weren't China laser driver kind of focused in our growth for 2017, there were other elements in that Chinese mix which included TIAs into those metro and long-haul deployments in Q4 and Q3.

So, Quinn, just to round out what Adam said and if you'll recall, my mentioning about the TIAs tractions would be for long-haul and metro, but though they're not technically in China, these would be the Japanese companies and the US companies that were substantially selling these ICR modules to the Chinese companies. So in an essence a huge part of our market today, end market is driven by China. So getting back to the question about our traction, yes, we have good traction on these TIA products. We're shipping actually into LR4 markets with one or two key Tier 1 players for the US markets and then we got some TIA design wins for datacenters. However, the big expectation on these high performance linear TIAs that would have been headed to China, those design wins and design choices for ramping are delayed consequently because there's customer interest to ship those products and their customers willing to accept changes at this point of low demand has been quite muted. So yes, we've been impacted on those TIAs that would have been driving a decent amount revenue to the end markets in China, ICR module makers in Japan and the US. However, the design traction interest in the product and the viability of the product remains quite strong. So it's one of those design wins where we're not making progress on the revenue side as far as the end markets in China are concerned. And as I talked about, in the second half of this year, we would be sampling our 400Gig product that would be the first major product into the datacenter and that we believe is a more landscape shaping event for MaxLinear in the fiber optics because the telco markets are purely TIAs and drivers.

And then just adding on the tax rate, obviously we'll model it at roughly 10% through the end of '17. I think historically when you're talking about that 20% tax rate or increasing up to that tax rate is going to be more of a linear function rather than a step function. It sounds like you're encouraging as to think 20% next year, so you're not kind of thinking that the tax rate is 10% in '17 and then it has step function up to 20% or do you see a gradual increase across the quarter for 2018 exiting the 20% rate in the fourth quarter.

Right now, I think it's probably safer to assume more of a step up. So I think again I wouldn't kind of go exit the year at 10 and then go to 12.5 and 15 and 17.5. I would just assume a relatively constant 20% 2018. And if and when we - we kind of we can improve on that we've got confidence in that, but I think at this point we don't have any better view right now at about a 20% rate for 2018.

On that topic is there any reason why you don't think today you'd be able to use the Exar NOLs to reduce that tax rate? I mean, I understand the analysis is probably incomplete, you need more time, but is that a possibility to use those NOLs?

Absolutely, its possibility and I think with the likelihood, right. So we're counting on our ability to be able to use those NOLs and that's part of what achieves that 20% rate. So yeah and spend as much time as you want to kind of to the mechanics of our structure and so forth, but right now I think they're one of the ways that we - I would say that we didn't need the Exar NOLs to achieve a 20% tax rate on the organic mix in your business. But post transaction right now, kind of when you take the combined profitability of the organizations, we think that the 20% non-GAAP or tax rate is still the right place to be for global rate.

Okay and then just a last question, you guys - it seems like you've seen some variance in the satellite side of the business, if I've got the comments from script where you said, digital ODUs were up in Q2 but satellite 4K gateways were down. You expect that the satellite 4K to rebound in Q3, but I thought sort of previously you seem to be tempering some of your expectations around the digital satellite business in aggregate and then in 2017 that might only be flat from the 2016 level. So just from a higher level, are there any overwriting themes you've seen in satellite business or is it just sort of becoming a more lumpy business quarter-to-quarter?

I think there are two questions. I think lumpiness is definitely there for sure because if you really think of the end operators, there is the major satellite operator Sky in Europe and the Sky babies and then you have some properties in Latin America that are just barely getting started and then you have in North America AT&T Direct TV. So it is very lumpy and then you also have Dish for digital-ODU, so what you're seeing is some of this - whatever we call the strong uptick in digital-ODU, is still being sort of weighted down by the drop in the analog-ODU because you have to recall that the ASPs are quite different and you also have to recall that our share in the digital-ODU will be saturated at a lower percentage than it was at analog-ODU. So you have both the phenomena happening, so I would not expect because of a strong digital-ODU that somehow it's been overcome the analog-ODU revenue decline. It is going to be hampered because of the lower ASPs and the lesser share with the same major operator we sell analog-ODU. Having said that, we'll see stabilization in our satellite revenues starting towards the end of this year and we will not - we expect not to have these declining legacy and then improving digital systems being hampered by the declining legacy revenues.

Yeah. I think another way to put that Quinn, is that I think going forward the analog declines obviously well-known and well discussed. I think on the satellite - for working gateway and the digital channel-stacking, as Kishore's mentioned, we kind of - we see growth into Q3 on the gateways. I think as we look longer term, let's say like through the end of 2018, we actually see a very nice growth, nice solid double digit growth off of our gateway and our digital channel-stacking products year-on-year. So I think we feel very good about that and the only weak spot in our satellite business is really the analog, which again we talked about many times. The rest looks quite good and I think it's a total - again prone to some lumpiness, but I think we're baring in front of the lumpiness. I think we saw some of that in Q2, but yes, I think 2017 a little bit more of a lumpy year on our satellite business, but we feel very good about where it's going based on the design wins in the places that we're in right now for products that are in production.

I think totally as a company actually - strategically we couldn't have been more pleased because all the strategic initiatives of broadening a portfolio, addressing high value end markets and including, deepening our presence in the platforms with added power management and also the connectivity with solutions. I think they're going totally as we expected. It's very hard for us to predict quarter-over-quarter, we've seen that. And we're quite excited about the future of this broadening of the portfolio and the strategy we have put in place. And satellite is not going to be a detractor, once the stabilization happens at the end of the year. That is the expectation. The optical was a surprise and that has exacerbated the declining elements of our satellite revenues to look more bad than we had actually predicted. They're actually what we anticipated them to be in this particular year. So the optical has been the one that we counted on as the engine that would overcome the decline and now optical has become the decline as well. So those are the dynamics. Otherwise, the rest of the portfolio is actually very exciting and we're very, very thrilled with the kind of mixed-signal company we're building.

Great, thank you.

Thank you. Our next question comes from the line of Chris Rolland with Susquehanna Financial Group. Please state your question.

Hey, guys. Related to that last question, so you guys mentioned that legacy Entropic satellite business, which I believe the analog, channel-stacking and I was wondering if you guys can talk about how much was specifically analog channel-stacking? I think you said, 5 million for that part of your business, but I don't know if that's specifically analog channel-stacking. And how much is actually left there in your 3Q guide, how much is left to actually draw down, is it zero or is there a small shoot or drop at some point in the future?

If you look at the combined analog channel-stacking and video SoC, those were the two Entropic lines that are decline. There was about $6 million of total revenue in Q2 related to those two products. Those are going to drop about $5 of that $6 million vanishes as we go from Q2 to Q3, so that will not be in the mix in Q3. So if you think about - if you want to break it down even more granularly, we lose about $3 million of analog channel-stacking, so $3.5 goes to $0.5 on analog channel-stacking and on the video SoC probably $2 to $2.5 goes to $0.5 million. So you've got a total of $1 million between those two product lines Q3, which was $6 million in Q2.

Got it. That is helpful. And then you guys talked about six million digital channel-stacking units you guys shipped in the quarter. I was wondering how that kind of compares to expectations there and perhaps if you want to talk about Broadcom, what they're doing in the market there. Have they been more aggressive with their marketing tactics and your expectations or how share is playing out versus your expectations for digital channel-stacking products?

Yes, let me clarify first. I think what Kishore mentioned in the prepared commentary was, we had reached a milestone of having shipped seven million digital channel-stacking units cumulatively, so wasn't in the quarter, right. So that's a cumulative number. The quarter was actually strong growth, Q1 to Q2, but it wasn't six million units, let's put it that way. We don't break out the dollars of the satellite, digital-ODU right now, but that's the right way to think about it. I just really wanted to clarify that there wasn't six million units shipped in the quarter, it was seven million units shipped cumulatively since we launched the product back in 2015.

Okay, great. And perhaps talk about Broadcom and share and how that's playing out versus your expectation?

Yeah, so I guess with regards to the Broadcom dynamics, I don't think anything's really changed there. I think that we continue to believe that we've got a superior solution, but in the day there are large worthy adversary that has a lot of customer relationship as leverage if you will and so we struggle to counter that with technology the best we can. I think that if you look across the global deployments of digital channel-stacking units and we believe that we're going to get our fair share of that market. I think we've talked in earlier calls that we've got - there was a very concentrated customer for Entropic on the analog channel-stacking side, which was direct TV and in that particular account, that's where we've not been able to basically hold our market share obviously because it was 100% analog, a decline in digital, but we don't have what we consider to be a fair share or even an even share of that business. So if you look at other accounts outside of direct TV, we've actually done very well and have very good market positions even relative to Broadcom, but it's that one account that's been problematic for us as far as getting again what we think is a fair share of that account.

I see and last quick one, you guys mentioned nanometer wave backhaul to a Tier 1 OEM, is this just a trial or do you guys have any clues as to how big this deployment could be?

So the numbers for millimeter wave are - depends on which report you read and how they ramp, it could be in lot or it could be in less. There's always flatter to deceive, right. So I want to be careful about that. However, in the millimeter remark, this Tier 1 OEM has a strongest track record of shipping millimeter wave backhaul more in chipsets in China and they need our millimeter wave products and we have a business agreement with them to be one of the providers for their high-end solution that support 20 gigabit per second data rates. Having said that, there's traction for a millimeter wave with other internet providers that are not the traditional broadband providers. We are trying to different ways of deploying millimeter wave to solve a lot of a last mile problems and so on support and for access into the homes and hopefully in the next few weeks or several weeks there will be some announcement from us that shows the or alludes the promise of the millimeter wave technologies. So I would like to defer to that announcement to get your sense of what kind of creative uses millimeter wave there are out there.

Waiting for that, thanks.

Thank you. Our last question is a follow up from Tore Svanberg with Stifel. Please state your question.

Yes, thank you. I had two follow ups. First of all, as we look at the infrastructure business for 2018, basically a lot of irons in the fire, wireless infrastructure technically off the account should come back and then you also have per lease cycle [ph]. Could you just talk a little bit about those three as you enter 2018 and are you expecting either one of those to drive revenues more than the other?

We expect strong growth in infrastructure. We have always talked about that. It's on track for the growth we had anticipated, the only subtleness on the infrastructure is related to the optical later side, side rate not given where things in the telco side obviously we are tamper our experience. Having said that, even with tempered expectation, we expect strong growth in the total infrastructure revenues. The big driver of these revenues, we expect it to be naturally - from a growth point of view, we expect wireless backhaul to be a very strong growth driver. And we have such a unique position both in the millimeter microwave backhaul is that strong design traction. So we expect strong growth there, but that will be the number one growth driver. Obviously, even if the telco market would modestly return, we expect the HSI market which is what we call the Optical Inter Connect market to grow for us and to an equal - equal to what we expect to grow in wireline access, so infrastructure access which is the last mile problem on the wireline solution. So I would see that number category is wireless backhaul, number two category is wireline infrastructure access and almost equal to that we expect the optical infrastructure. Those would be the three main growth drivers from our perspective on the infrastructure side, so very growth across the board.

And when you talk about MoCA and G.hn as a broad band back bone, will that revenue go on their infrastructure or connected home.

That goes into connected home. We have categorized our revenues very pure, so since those MoCA and G.hn connectivity in distribution go inside the home they are into the connected home category. However, the last mile access is in the infrastructure category and we do refer to them as a ceiling MoCA access and G.Now access.

Very good and just lastly on the MoCA and G.hn as a broadband backbone, I think from a technology perspective this makes a lot of sense, but what are some of the mile stones or what are some of the data points that we should be tacking to see the sort of realization of that market because it's still very early days. I mean, is it going to be one of the big service providers coming out in an announcement or if you just help us understand what are going to be some of the data points to track that will be great?

I think just growth in MoCA in the connectivity itself is proved that - if you really want to think about it. Originally MoCA started its video distribution inside the home and those revenues actually declined. The fact that we are registering growth in MoCA are all derived from some level of over the top content distribution inside home as a backbone. So that is a factually correct statement. So what we are doing right now is we are trying to add and we have succeeded there getting design wins and some shipments ramping, we are ramping shipment at one major telco broadband operator. They took a lot of product and there is a little bit slow down, but that's okay. There's still strong growth which we referred to and then this one more was just another big telco broadband provider in the United States and they are not using it in their video services, but they are going use for their over the top services as a backbone. They just selected MoCA Wi-Fi bridges. So I think that growth in MoCA is predicated and is proof of growth in revenues in the telco markets. So regarding announcements, it's possible there are some announcements may be at the end of the year, but I need to verify whether that is possible or not yet to confirm whether that's going to happen.

Oaky and just one last one and I promise I will go away. So I know you target 10% growth in your connected home business. Do you need MoCA and Ghn as a broadband backbone to materialize next year to get to that 10% rate or will you still get there with the gateways and DOCSIS 3.1 and so on and so forth.

I think we should be able to get there. There are so many more importance at our connected home. And MoCA is a part of it G.hn is a part of it and I think that all in aggregate together we should get into that range. So it won't be one contributor, but clearly the connected pieces will be and DOCSIS 3.1 will be growth drivers for MaxLinear. So and satellite also Adam said is going to grow, right nicely. So you can see that from a stabilization that happen satellite by the end of the year. We are expecting actually growth in satellite and so all the pieces will contribute to the growth. It's hard for me to say at this stage which one would be a bigger one because there are upsides and downsides in every scenario due to ramp delays and otherwise.

Very helpful, thank you.

And also please don't go away. Please keep tracking us.

There are no further questions. That does conclude our question-and-answer session. I will now turn back to your CEO, Mr. Kishore Seendripu for closing comments.

Thank you, operator. As a reminder we will be participating in the Roth Capital third Annual Datacenter Infrastructure Conference in San Francisco on September 16 and the Deutsche Bank 2017 Technology Conference in Las Vegas on September 13. We hope to see many of you there. With that being said, we thank you all for joining us today. And we look forward to reporting on our progress during the next quarter.

That concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.