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

Quarterly report pursuant to Section 13 or 15(d)

Revenue from Contracts with Customers

Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2018

Revenue from Contracts with Customers [Abstract]

Revenue from Contracts with Customers

Revenue by Market

The table below presents disaggregated net revenues by market (in thousands):



	Three months ended						Nine months ended
	September 30,						September 30,
	2018			2017⁽¹⁾			2018			2017⁽¹⁾

Connected home	$	42,026		$	65,621		$	164,201		$	222,074
% of net revenue	49		%	58		%	55		%	72		%
Infrastructure	19,733			23,714			59,708			50,666
% of net revenue	23		%	21		%	20		%	17		%
Industrial and multi-market	23,251			24,246			73,461			33,857
% of net revenue	27		%	21		%	25		%	11		%
Total net revenue	$	85,010		$	113,581		$	297,370		$	306,597

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⁽¹⁾ Due to the adoption of ASC 606 using the modified retrospective method, prior period amounts have not been adjusted to reflect the change to recognize certain distributor sales upon sale to the distributor, or the sell-in method, from recognition upon the Company's sale to the distributors' end customers, or the sell-through method, which required the deferral of revenue and profit on such distributor sales.

Contract Liabilities

As of September 30, 2018, customer contract liabilities consist of estimates of obligations to deliver rebates to customers in the form of units of products and were approximately $0.2 million. Revenue recognized in the three and nine months ended September 30, 2018 that was included in the contract liability balance as of January 1, 2018 was immaterial.

There were no material changes in the contract liabilities balance during the three and nine months ended September 30, 2018.

Obligations to Customers for Price Adjustments and Returns and Assets for Right-of-Returns

As of September 30, 2018, obligations to customers consisting of estimates of price protection rights offered to the Company's end customers totaled $14.4 million and are included in accrued price protection liability in the consolidated balance sheets. For activity in this account, including amounts included in net revenue, refer to Note 7. Other obligations to customers representing estimates of price adjustments to be claimed by distributors upon sell-through of their inventory to their end customer and estimates of stock rotation returns to be claimed by distributors on products sold as of September 30, 2018 were $6.2 million and $1.0 million, respectively, and are included in accrued expenses and other current liabilities in the consolidated balance sheets (Note 7). The increase in revenue from net changes in transaction prices for amounts included in obligations to customers for price adjustments as of January 1, 2018 was not material. As of September 30, 2018, right of return assets under customer contracts representing the estimates of product inventory the Company expects to receive from customers in stock rotation returns were approximately $0.2 million. Right of return assets are included in inventory in the consolidated balance sheets (Note 7).

As of September 30, 2018, there were no impairment losses recorded on customer accounts receivable.