Legacy copper networks are no longer the most viable means to deliver the high-speed connectivity that families and communities need to compete, thrive and grow in today's world CHARLOTTE, N.C., April 23, 2025 /PRNewswire/ -- Today, a group of leading telecommunications companies published a strategic paper outlining the advantages of fiber optic, wireless, satellite and coaxial cable technologies for connectivity as copper networks across the country continue to deteriorate and become obsolete. The paper, ...

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $220 million, representing a 7% sequential growth and a 39% year-over-year increase in RPOs to $340 million [17][18] - Non-GAAP gross margin reached a record 56.2% in Q1, driven by customer mix and new subscriber wins [18] - Cash and investments totaled $282 million, with double-digit free cash flow generated for the eighth consecutive quarter [19][20] Business Line Data and Key Metrics Changes - The company added 16 new BSP customers in Q1, primarily through competitive takeaways, indicating strong demand for its platform [18] - The introduction of SmartBiz for small businesses and SmartMDU for multi-dwelling units expanded the customer base and service offerings [9][18] Market Data and Key Metrics Changes - Demand for broadband experiences remains strong and inelastic, with consumers prioritizing broadband over discretionary spending [12][44] - The company anticipates continued growth in demand through 2025, supported by its unique business model [11][12] Company Strategy and Development Direction - The company aims to differentiate itself from traditional speed-based network operators by focusing on experience-based broadband services [7][8] - The strategy includes leveraging marketing analytics to help customers reduce churn and grow revenue per subscriber [35][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of broadband demand despite potential economic downturns, citing historical trends during the pandemic [44][46] - The company raised its revenue guidance for Q2 2025, expecting revenue between $221 million and $227 million [21] Other Important Information - The board approved an additional $100 million for the stock repurchase program, reflecting confidence in the company's financial health [23] - The company plans to keep operating expenses flat to slightly up in 2025, while gross margins are expected to improve [22] Q&A Session Summary Question: Insights on macro spending environment and CapEx plans - Management noted that customers are continuing to invest appropriately in capital expenditures, driven by consumer and business demand [34][36] Question: Clarification on customer pull-forwards - Management clarified that the pull-forwards were not related to tariffs but were due to inherent business lumpiness [39][40] Question: Expectations for sequential revenue growth - Management confirmed expectations for continued sequential growth, even with the pull-forward from a large customer [49] Question: Impact of tariffs on gross margins - Management stated that there was no impact from tariffs in Q1, and they will pass through any future costs without adding a profit margin [54][56] Question: Opportunities from DZS bankruptcy - Management expressed sympathy for affected customers but noted that they are offering support and assistance to those in need [102][103]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $220 million, representing a 7% sequential growth and a 39% year-over-year increase in RPOs to $340 million [17][18] - Non-GAAP gross margin reached a record 56.2% in Q1, driven by customer mix and new subscriber wins [18] - Cash and investments totaled $282 million, with double-digit free cash flow generated for the eighth consecutive quarter [19][20] Business Line Data and Key Metrics Changes - The company added 16 new BSP customers in Q1, primarily through competitive takeaways, indicating strong demand for its platform [18] - The introduction of SmartBiz for small businesses and SmartMDU for multi-dwelling units expanded the customer base and service offerings [9][18] Market Data and Key Metrics Changes - Demand for broadband experiences remains strong and inelastic, with consumers prioritizing broadband over discretionary spending [12][44] - The company anticipates continued growth in demand through 2025, supported by its unique business model [11][12] Company Strategy and Development Direction - The company aims to differentiate itself from traditional speed-based network operators by focusing on experience-based broadband services [7][8] - The strategy includes leveraging marketing analytics to help customers reduce churn and grow revenue per subscriber [35][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of broadband demand despite potential economic downturns, citing historical trends during the pandemic [44][45] - The company raised its revenue guidance for Q2 2025 to between $221 million and $227 million, reflecting ongoing strong demand [21] Other Important Information - The board approved an additional $100 million for the stock repurchase program, indicating confidence in the company's financial health [23] - The company plans to keep operating expenses flat to slightly up in 2025, while gross margins are expected to improve by 100 to 200 basis points annually [22] Q&A Session Summary Question: Insights on macro spending environment and CapEx plans - Management noted that customers are continuing to invest appropriately in capital expenditures, driven by consumer and business demand [34][36] Question: Clarification on customer pull-forwards - Management clarified that the pull-forwards were not related to tariffs but were due to inherent business lumpiness [39][40] Question: Expectations for sequential revenue growth - Management confirmed expectations for continued sequential revenue growth, even with the pull-forward from a large customer [49] Question: Impact of tariffs on gross margins - Management stated that there was no impact from tariffs in Q1, and they will pass through any future costs without adding a profit margin [54][56] Question: Opportunities from DZS bankruptcy - Management expressed sympathy for affected customers but noted that they are offering support and assistance to those in need [102][103]

Core Viewpoint - Calix reported quarterly earnings of $0.19 per share, exceeding the Zacks Consensus Estimate of $0.13 per share, although down from $0.21 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was 46.15%, with the company having surpassed consensus EPS estimates three times over the last four quarters [2] - Calix's revenues for the quarter were $220.24 million, surpassing the Zacks Consensus Estimate by 6.37%, but down from $226.31 million year-over-year [3] Market Performance - Calix shares have declined approximately 3% since the beginning of the year, while the S&P 500 has decreased by 10.2% [4] - The current consensus EPS estimate for the upcoming quarter is $0.16 on revenues of $210.65 million, and for the current fiscal year, it is $0.71 on revenues of $859.52 million [8] Industry Outlook - The Internet - Software industry, to which Calix belongs, is currently ranked in the top 27% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [9]

Revenue Performance - In Q1 2025, revenue was $220.2 million, a sequential increase of 6.9% but a decrease of 2.7% year-over-year[12]. - U.S. revenue accounted for 96% of total revenue in Q1 2025, up from 90% in the previous quarter[22]. - Revenue for Q1 2025 was $220,242 thousand, down from $226,310 thousand in Q1 2024, representing a decrease of approximately 4.7%[58]. Profitability Metrics - Gross margin reached a record 55.7%, up 70 basis points sequentially and 150 basis points year-over-year[24]. - Non-GAAP net income for Q1 2025 was $13.1 million, an increase of $7.9 million from the prior quarter[28]. - GAAP gross margin for the three months ended March 29, 2025, was 55.7%, an increase from 55.0% in the previous quarter[64]. - Non-GAAP gross margin for the same period was 56.2%, up from 55.5% in the prior quarter[64]. - GAAP net loss for the three months ended March 29, 2025, was $4.787 million, compared to a loss of $17.924 million in the previous quarter[68]. - Non-GAAP net income for the same period was $13.131 million, significantly higher than $5.230 million in the prior quarter[68]. Cash Flow and Investments - Free cash flow was positive for the 19th consecutive quarter, with cash and investments totaling $282 million at the end of Q1 2025[4]. - Cash and cash equivalents at the end of Q1 2025 were $42,300 thousand, down from $88,418 thousand at the end of Q1 2024[62]. - Non-GAAP free cash flow for the three months ended March 29, 2025, was $12.902 million, compared to $10.214 million in the previous quarter[68]. Shareholder Actions - The company repurchased 1.2 million shares in Q1 2025, with an additional $100 million authorized for share repurchase[33][34]. Guidance and Projections - Guidance for Q2 2025 revenue is projected between $221 million and $227 million, reflecting a 2% increase at the midpoint from the prior quarter[37]. - Non-GAAP operating expense guidance for Q2 2025 is $110 million, indicating a flat quarter sequentially[40]. - The company expects GAAP gross margin for the next quarter to be between 54.35% and 56.35%[70]. - Projected non-GAAP net income per diluted common share for the next quarter is expected to be between $0.18 and $0.24[70]. Operating Expenses - Operating expenses for Q1 2025 were $128.8 million, representing 58% of revenue, with a decrease in sales and marketing expenses compared to the previous quarter[26]. - Total operating expenses for Q1 2025 were $128,789 thousand, compared to $124,609 thousand in Q1 2024, an increase of about 3.5%[58]. - Total GAAP operating expenses for the three months ended March 29, 2025, were $128.789 million, slightly down from $132.117 million in the previous quarter[66]. - Stock-based compensation for the three months ended March 29, 2025, was $19.745 million, compared to $22.075 million in the previous quarter[68]. Market Position and Strategy - The company continues to focus on expanding its BXP customer base and enhancing its platform, cloud, and managed services[43]. - The company is in the early stages of a significant disruption in the broadband industry, with expectations for further footprint gains[42]. - The company emphasizes the importance of its non-GAAP financial measures to provide a clearer view of its operating performance[55]. Remaining Performance Obligations - Remaining performance obligations (RPOs) rose 39% year-over-year and 4% quarter-over-quarter to $340 million[3].

Financial Performance - Revenue for 2024 was $831.5 million, a decrease of 20% from $1,039.6 million in 2023[219]. - Gross profit for 2024 was $453.6 million, down from $518.3 million in 2023, reflecting a gross margin of 54.5%[219]. - Net loss for 2024 was $29.7 million, compared to a net income of $29.3 million in 2023, resulting in a diluted loss per share of $0.45[219]. - The company reported a comprehensive loss of $29.7 million in 2024, compared to a comprehensive income of $31.1 million in 2023[219]. - Revenue from the United States was $764.6 million in 2024, a decline from $944.2 million in 2023, representing a decrease of approximately 19%[326]. - The company reported interest income of $11.4 million in 2024, an increase from $9.2 million in 2023[327]. - The adjusted cost of revenue for 2024 was $372.2 million, down from $515.6 million in 2023, reflecting improved cost management[327]. Cash and Liquidity - The company has $297.1 million in cash, cash equivalents, and marketable securities as of December 31, 2024, primarily held in cash and highly liquid securities[191]. - Cash and cash equivalents at the end of 2024 were $43.2 million, down from $63.4 million at the end of 2023[226]. - The total current assets decreased from $597.956 million in 2023 to $584.735 million in 2024, with cash and cash equivalents dropping from $63.409 million to $43.162 million[215]. - The company has approximately $9.1 million of cash held by foreign subsidiaries in India, China, and the United Kingdom, with minimal credit risk associated with these cash and cash equivalents[244]. Inventory and Assets - As of December 31, 2024, the company reported components and finished goods inventories with a carrying value of $102.7 million and excess and obsolete component liabilities of $27.5 million[209]. - Inventory decreased to $102.7 million in 2024 from $132.9 million in 2023, a decline of approximately 23%[277]. - The total fair value of marketable securities as of December 31, 2024, was $271.5 million, compared to $199.7 million in 2023, indicating an increase of approximately 36%[271]. Liabilities and Equity - Total liabilities decreased significantly from $222.9 million in 2023 to $158.3 million in 2024[215]. - Stockholders' equity increased from $719.0 million in 2023 to $780.9 million in 2024, reflecting a positive trend in the company's financial position[215]. - The allowance for doubtful accounts increased to $311,000 in 2024 from $304,000 in 2023, showing a slight increase of about 2%[276]. Operating Expenses - Operating expenses increased to $496.6 million in 2024, compared to $492.7 million in 2023, with R&D expenses at $179.9 million[219]. - Stock-based compensation expense rose to $70.8 million in 2024, compared to $62.8 million in 2023[226]. - Depreciation and amortization expenses increased to $19.6 million in 2024 from $16.6 million in 2023, a rise of approximately 18%[277]. Risks and Challenges - The company has a history of fluctuations in gross margin and operating results, making future performance predictions difficult[68]. - Customer credit risks could adversely affect operating results and financial condition, particularly if accounts receivable are not collected as anticipated[69]. - The company faces risks related to product defects, which could harm reputation and adversely affect business and financial condition[73]. - Intense competition in the broadband access equipment market could lead to pricing pressures and reduced profit margins, impacting overall financial results[86]. - A concentrated customer base poses risks, as the loss or reduced spending from key customers could significantly affect revenue[88]. - The company faces challenges in developing new products due to rapid technological advancements and potential delays in meeting development targets[90]. Compliance and Regulatory Issues - Compliance with evolving data privacy laws, such as the CCPA and GDPR, may result in increased costs and operational changes[95]. - Regulatory scrutiny regarding data transfers and privacy practices could lead to additional costs and operational adjustments[98]. - The company may incur substantial costs to implement new security measures to comply with regulations, impacting financial condition[100]. - Violations of privacy and security laws could result in regulatory investigations and fines, adversely affecting the company's reputation and financial results[101]. Future Outlook - Significant expenses and cash outlays are expected as the company seeks to expand its business and target new customer opportunities[68]. - The company may need additional capital in the future if current plans change, which could lead to dilution for existing stockholders[112]. - The company expects to recognize stock-based compensation expense of $49.0 million in 2025, $21.4 million in 2026, $6.6 million in 2027, and $0.9 million in 2028[306].

Group 1 - Calix Inc. (NYSE: CALX) is highlighted for its strong value proposition that enables customers to compete against incumbents, leading to a reiteration of a buy rating [1] - The author emphasizes a diverse investing background, incorporating fundamental, technical, and momentum investing strategies to enhance the investment process [1] Group 2 - The article serves as a platform for tracking investment ideas and connecting with like-minded investors [1]

Financial Data and Key Metrics Changes - The company reported Q4 revenue of $206 million, representing a 2.6% sequential growth and at the high end of the guidance range provided in October [8] - Record non-GAAP gross margin of 55.5% was achieved in Q4, driven by strong demand for platform cloud and managed services [8] - Remaining performance obligations (RPOs) grew 10% sequentially to $326 million and increased 34% year over year [8] Business Line Data and Key Metrics Changes - The company added 18 new customers in Q4, with the majority being competitive takeaways [9] - 21 customers expanded their use of the platform, 15 started with Calix Cloud, and 32 deployed a managed service for the first time [9] - Current RPOs were $121 million, up 10% sequentially and 27% year over year [8] Market Data and Key Metrics Changes - The company’s balance sheet metrics remained strong, ending the year with record cash and investments of $297 million [10] - Days sales outstanding (DSO) remained at an industry-best 36 days, and inventory turns were 3.1 [10] Company Strategy and Development Direction - The company aims to help customers transition from speed-based network operators to broadband experience providers, focusing on differentiation through broadband experiences [5][6] - The strategy includes expanding the footprint by landing new broadband service providers and continuously enhancing platform, cloud, and managed services [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing transformation within the broadband industry, viewing it as a once-in-a-generation opportunity [13] - The company anticipates revenue for Q1 2025 to be between $204 million and $210 million, with non-GAAP gross margin expected to remain flat to slightly up [11] Other Important Information - The company plans to keep operating expenses flat to slightly up in 2025 compared to 2024 [12] - Management highlighted the importance of helping customers monetize their subscriber base and differentiate in a commoditized market [28] Q&A Session Summary Question: What drove the increase in RPO this quarter? - Management noted that the increase was due to momentum from recent events and a shift in customer mindset towards embracing transformation [20][21] Question: Concerns about government programs and their scrutiny? - Management stated that there is a lot of noise but no significant news affecting their strategy at this time [24] Question: How is the company focusing on monetizing the installed base of fiber served homes and businesses? - The company emphasized its long-term investment in building a broadband platform that helps customers monetize subscribers regardless of network [28] Question: What is the outlook for international customers? - Management indicated that international growth will be consistent with U.S. growth and not disproportionately higher [44] Question: What is the expected tax rate for the year? - The tax rate is expected to normalize higher due to the expiration of some tax credits [47] Question: Was there a large new customer contributing to RPO strength this quarter? - Management clarified that there were no large contracts in Q4, but rather a broad base of medium-sized contracts contributing to strength [50][51] Question: What is the multi-year outlook for revenue and earnings potential? - Management referred to a target financial model indicating potential growth in the range of 10% to 15% [56] Question: How does the company view growth from medium and large carriers? - Management expressed confidence in growth opportunities from existing and new customers, particularly in light of competitive pressures [71]

Group 1: Earnings Performance - Calix reported quarterly earnings of $0.08 per share, matching the Zacks Consensus Estimate, but down from $0.43 per share a year ago [1] - The company posted revenues of $206.12 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 1.12%, but down from $264.73 million year-over-year [2] - Over the last four quarters, Calix has surpassed consensus EPS estimates three times [2] Group 2: Stock Performance and Outlook - Calix shares have increased approximately 6.9% since the beginning of the year, outperforming the S&P 500's gain of 3.2% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the sustainability of earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.11 on revenues of $205.21 million, and for the current fiscal year, it is $0.71 on revenues of $855.68 million [7] Group 3: Industry Context - The Internet - Software industry, to which Calix belongs, is currently ranked in the top 16% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Calix's stock performance [5][6]

Revenue Performance - Fourth quarter 2024 revenue was $206.1 million, a 2.6% increase from the prior quarter but a 22% decrease year-over-year[11]. - Revenue for Q4 2024 was $206.1 million, down from $264.7 million in Q4 2023, representing a decrease of approximately 22%[46]. - U.S. revenue accounted for 90% of total revenue in the fourth quarter, down from 93% in the previous quarter[19]. - International revenue increased by 54% sequentially and 34% year-over-year, representing 10% of total revenue[19]. - First quarter 2025 revenue guidance is between $204 million and $210 million, reflecting slight growth from the previous quarter[28]. Profitability Metrics - Gross margin for the fourth quarter reached a record 55.0%, up 1,220 basis points year-over-year[20]. - GAAP gross margin for Q4 2024 was reported at 55.0%, up from 42.8% in Q4 2023, indicating a significant improvement[52]. - Non-GAAP net income for the fourth quarter was $5.2 million, a decrease of $3.7 million from the prior quarter[22]. - Non-GAAP net income for Q4 2024 was $5.230 million, compared to $6.715 million in Q4 2023, showing a decrease of approximately 22.1%[56]. - The company reported a non-GAAP net income per diluted common share of $0.08 for Q4 2024, compared to a GAAP net loss per diluted common share of $(0.27)[57]. Operating Expenses - Total operating expenses for Q4 2024 were $132.1 million, compared to $125.3 million in Q4 2023, an increase of approximately 5.6%[46]. - Non-GAAP operating expense guidance for Q1 2025 is $106.5 million, a sequential decrease of $4.3 million[31]. - Operating expenses for Q1 2025 are projected to be between $126.500 million and $128.500 million, with non-GAAP operating expenses expected to be $105.500 million - $107.500 million[59]. Cash and Investments - Cash and investments at the end of 2024 totaled $297.1 million, an increase of $76.8 million compared to the end of 2023[26]. - Cash and cash equivalents at the end of 2024 were $43.162 million, down from $63.409 million at the beginning of the year[50]. - The net cash provided by operating activities increased to $68.400 million in 2024 from $56.251 million in 2023, reflecting a growth of approximately 21.5%[50]. - The net cash used in investing activities was $(109.530) million in 2024, significantly higher than $(6.245) million in 2023, indicating increased investment activity[50]. Performance Obligations and Subscriber Growth - Remaining performance obligations (RPOs) increased by 34% year-over-year and 10% quarter-over-quarter to $325.8 million[4]. - The company added 21 new Unlimited Subscriber and/or Intelligent Access deployments in the fourth quarter[16]. - The company continues to convert legacy operators into new service providers, enhancing their business models and subscriber engagement[36]. - The foundation for growth is based on strong demand for appliances, platform, cloud, and managed services[34]. Equity and Assets - Total current assets as of December 31, 2024, were $584.7 million, a slight decrease from $598.0 million in 2023[48]. - Total stockholders' equity increased to $780.9 million as of December 31, 2024, compared to $719.0 million in 2023[48]. - For the year ended December 31, 2024, the net income was a loss of $29.747 million compared to a net income of $29.325 million in 2023[50]. Tax and Guidance - Non-GAAP effective tax rate for 2025 is expected to be in the range of 22% to 24%[32]. - The company expects a gross margin guidance of 54.0% - 56.0% for Q1 2025, with non-GAAP gross margin projected to be 54.5% - 56.5%[59].