MaxLinear, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Concentration of Credit Risk, Significant Customers and Geographic Information

Concentration of Credit Risk, Significant Customers and Geographic Information

6 Months Ended

Jun. 30, 2019

Concentration of Credit Risk, Significant Customers and Geographic Information

Concentration of Credit Risk, Significant Customers and Revenue by Geographic Region

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. Collateral is generally not required for customer receivables. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions. At times, such deposits may be in excess of insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents.

Significant Customers

The Company markets its products and services to manufacturers of a wide range of electronic devices (Note 1). The Company makes periodic evaluations of the credit worthiness of its customers.

Customers comprising greater than 10% of net revenues for each of the periods presented are as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Percentage of total net revenue
Customer A	12	%	28	%	12	%	27	%

Balances that are 10% or greater of accounts receivable, based on the Company's billings to the contract manufacturer customers, are as follows:



	June 30,	December 31,
	2019	2018
Percentage of gross accounts receivable
Customer B	*	10	%

____________________________


*	Represents less than 10% of the gross accounts receivable as of the respective period end.

Significant Suppliers

Suppliers comprising greater than 10% of total inventory purchases are as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Vendor A	18	%	12	%	18	%	13	%
Vendor B	18	%	23	%	13	%	22	%
Vendor C	13	%	15	%	13	%	17	%
Vendor D	13	%	15	%	13	%	16	%

Geographic Information

The Company's consolidated net revenues by geographic area based on ship-to location are as follows (in thousands):



	Three Months Ended June 30,								Six Months Ended June 30,
	2019				2018				2019				2018
	Amount		% of total net revenue		Amount		% of total net revenue		Amount		% of total net revenue		Amount		% of total net revenue
Asia	$	68,319	83	%	$	87,289	86	%	$	139,867	84	%	$	172,103	81	%
United States	3,775		4	%	4,636		5	%	8,127		5	%	9,831		5	%
Rest of world	10,413		13	%	9,608		9	%	19,148		11	%	30,426		14	%
Total	$	82,507	100	%	$	101,533	100	%	$	167,142	100	%	$	212,360	100	%

The products shipped to individual countries representing greater than 10% of net revenue for each of the periods presented are as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Percentage of total net revenue
China	60	%	65	%	64	%	63	%

The determination of which country a particular sale is allocated to is based on the destination of the product shipment. No other individual country accounted for more than 10% of net revenue during these periods. Although a large percentage of the Company’s products is shipped to Asia, and in particular, China, the Company believes that a significant number of the systems designed by customers and incorporating the Company’s semiconductor products are subsequently sold outside Asia to Europe, Middle East, and Africa, or EMEA markets and North American markets.

Long-lived assets, which consists of property and equipment, net, leased right-of-use assets, intangible assets, net, and goodwill by geographic area are as follows (in thousands):



	June 30,				December 31,
	2019				2018⁽¹⁾
	Amount		% of total		Amount		% of total
United States	$	416,736	85	%	$	426,321	85	%
Singapore	67,998		14	%	71,945		14	%
Rest of world	6,300		1	%	3,368		1	%
Total	$	491,034	100	%	$	501,634	100	%

_____________

(1) Amounts do not include leased right-of-use assets in the prior period due to the adoption of ASC 842 under the modified retrospective method with a cumulative effect adjustment to accumulated deficit as of January 1, 2019.