Financial Data and Key Metrics Changes - Revenue for Q3 2024 was $201 million, representing a 1.4% sequential growth and within the guidance range provided in July [11] - Non-GAAP gross margin reached a record of 55.4% in Q3 2024 [11] - Remaining performance obligations (RPOs) grew to $296 million, an increase of $29 million or 11% sequentially and $76 million or 35% year-over-year [12] - Cash and investments were a record $288 million at the end of Q3, up $26 million sequentially [15] Business Line Data and Key Metrics Changes - The company added 13 new customers in Q3, all existing service providers, indicating new footprint expansion [13] - Five customers initiated their first cloud deployment, and 23 customers launched managed services for the first time [13] - Non-GAAP operating expenses were $105 million, up $1 million from the prior quarter, primarily due to marketing expenses [14] Market Data and Key Metrics Changes - The company expects RPOs to continue growing as customers add subscribers and expand the use of Calix's platform, cloud, and managed services [12] - The BEAD program is anticipated to be a multi-year growth lever, with initial bookings expected in Q1 2025 [17][18] Company Strategy and Development Direction - The company aims to help broadband providers transition from speed-based network operators to experience providers, leveraging its platform for differentiation [9][10] - The management emphasizes the importance of transforming business models to avoid commoditization in the broadband market [36][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that Q2 2024 was the trough and indicated a positive outlook for sequential growth moving forward [22] - The ongoing uncertainty in the market is seen as a catalyst for customers to consider transformation and adopt the Calix platform [27][28] - Management believes that the delays in BEAD funding could ultimately benefit the company as customers seek to adapt to changing market conditions [59] Other Important Information - The company highlighted the importance of customer success initiatives, including helping customers with sales strategies and marketing [92][96] - The management noted that the lead times for appliances have stabilized at a new normal, slightly higher than pre-pandemic levels [62] Q&A Session Summary Question: What is the outlook for sequential growth after the trough? - Management confirmed that Q2 was declared the trough and expressed confidence in sequential growth moving forward [22] Question: Can you clarify the timing and expectations for BEAD? - Management expects initial orders in Q1 2025, with shipments ramping up throughout the year [28] Question: How do you view the contribution of new contracts versus expansions? - The strongest growth drivers are new subscribers and applications from existing customers, with new contracts contributing gradually [87] Question: Are there any political risks associated with BEAD? - Management is not concerned about political risks, citing bipartisan support for broadband initiatives [53] Question: What is the strategy for customer success? - The company is focused on helping customers transform their sales and marketing strategies to improve their market position [92][96]

Calix (CALX) came out with quarterly earnings of $0.13 per share, beating the Zacks Consensus Estimate of $0.10 per share. This compares to earnings of $0.45 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 30%. A quarter ago, it was expected that this cloud, software platforms, systems and services provider for communications service providers would post earnings of $0.07 per share when it actually produced earnings of $0.09, ...

Revenue Performance - Revenue for Q3 2024 was $200.9 million, reflecting a 1.4% increase from the prior quarter but a 24% decrease year-over-year[11] - In Q3 2024, revenue was reported at $200.9 million, a decrease from $263.8 million in Q3 2023[41] - Revenue from small customers represented 83% of total revenue in Q3 2024, up from 82% in the prior quarter[20] - Revenue guidance for Q4 2024 is projected between $201 million and $207 million, indicating a sequential increase of 1.5% from the previous quarter[29] Profitability Metrics - Gross margin for Q3 2024 was a record 54.8%, up 50 basis points sequentially and 150 basis points year-over-year; non-GAAP gross margin was 55.4%[22] - GAAP gross margin improved to 54.8% for the three months ended September 28, 2024, up from 53.3% in the same period last year[46] - Non-GAAP net income for Q3 2024 was $8.9 million, an increase of $2.8 million from the prior quarter but a decrease of $22.1 million year-over-year[24] - Non-GAAP net income for the three months ended September 28, 2024, was $8,907 thousand, compared to $30,996 thousand for the same period in 2023[48] - Net loss for Q3 2024 was $(3.97) million, contrasting with a net income of $16.95 million in Q3 2023[41] Operating Expenses - Operating expenses for Q3 2024 were $120.9 million, representing 60.2% of revenue, with a sequential increase of $2.0 million[22] - Non-GAAP operating expenses for Q4 2024 are expected to be around $110 million, an increase of $4.7 million primarily due to the annual ConneXions conference[30] - Operating loss for Q3 2024 was $(10.9) million, compared to an operating income of $15.9 million in Q3 2023[41] - Operating expenses for the same period are estimated to be between $124,000 and $126,000 on a GAAP basis, while non-GAAP operating expenses are projected to be between $109,000 and $111,000[52] Customer Acquisition - The company added 13 new customers in Q3 2024, all of whom were existing service providers not previously engaged with the company[4] - The company is focused on expanding its BEP customer base and enhancing its platform, cloud, and managed services offerings[33] - The ongoing transformation in the broadband industry is expected to drive further growth and customer acquisition for the company[31] Cash and Investments - Cash and investments at the end of Q3 2024 totaled $287.6 million, a sequential increase of $26.4 million[27] - Cash and cash equivalents at the end of the period were $62,361 thousand, down from $135,675 thousand at the end of the previous year[44] - The company reported net cash provided by operating activities of $53,037 thousand for the nine months ended September 28, 2024, an increase from $41,327 thousand in the prior year[44] Future Outlook - The company expects to begin receiving orders from the Broadband Equity Access and Deployment (BEAD) program in Q1 2025, with shipments starting later in 2025[5] - Non-GAAP gross margin guidance for Q4 2024 is set at 55.5%, reflecting a 10-basis point improvement compared to the prior quarter[30] - The company anticipates a non-GAAP effective tax rate between 21% and 23% for Q4 2024[31] - For the three months ending December 31, 2024, GAAP gross margin is projected to be between 54.2% and 56.2%, with non-GAAP gross margin expected between 54.5% and 56.5%[52] - The net income (loss) per diluted common share for the upcoming quarter is expected to range from $(0.14) to $(0.08) on a GAAP basis, and from $0.04 to $0.10 on a non-GAAP basis[52] Balance Sheet Highlights - As of September 28, 2024, Calix, Inc. reported total current assets of $585,018 thousand, a decrease of 2.3% from $597,956 thousand on December 31, 2023[43] - Total liabilities decreased to $158,837 thousand as of September 28, 2024, down from $222,883 thousand on December 31, 2023, reflecting a significant reduction of 28.8%[43] - The company’s total stockholders' equity increased to $778,688 thousand as of September 28, 2024, compared to $718,982 thousand on December 31, 2023, marking an 8.3% increase[43] Shareholder Information - GAAP net loss per diluted common share for the three months ended September 28, 2024, was $(0.06) while non-GAAP net income per diluted common share was $0.13[50] - The weighted-average diluted common shares outstanding for the three months ended September 28, 2024, were 68.8 million[50] - The weighted-average diluted common shares outstanding for the three months ending December 31, 2024, are expected to be 69.2 million[52]

Financial Data and Key Metrics Changes - The company reported revenue of $198 million for Q2 2024, which was within the guidance range provided in April [119] - Non-GAAP gross margin reached a record 55.1%, driven by strong platform adoption and growth in cloud and managed services [120] - Remaining performance obligations (RPOs) grew to $267 million, an increase of $22 million or 9% sequentially and up $54 million or 25% year-over-year [120][121] - Current RPOs were $103 million, up 4% sequentially and up 28% year-over-year [121] - Operating expenses were $104 million, down $4 million from the prior quarter, reflecting a disciplined approach to cost management [122] Business Line Data and Key Metrics Changes - The company added 24 new broadband service provider (BSP) customers in Q2, up from 10 in Q1, indicating a strong demand for its platform [117] - There was a shift towards smaller orders but an increase in the number of orders, reflecting a new normal in customer purchasing behavior [118] - The company closed its largest platform cloud and managed services deal in Q2, setting a new record [118] Market Data and Key Metrics Changes - The company noted that 20 states have completed all ten steps of the BEAD program, representing $12 billion of the $42 billion funding program [127] - The company expects to start receiving orders related to BEAD in early 2025, with significant revenue potential anticipated from this program [127][128] Company Strategy and Development Direction - The company is focused on helping customers transform their business models to adapt to increased competition and changing market dynamics [80] - The strategy includes leveraging government programs like BEAD to enhance growth opportunities, particularly for smaller service providers [28][63] - The company aims to maintain a disciplined approach to operating expenses while expanding its footprint in the broadband market [123][129] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to sequential quarterly revenue growth in Q3 2024, marking the bottom for revenue in 2024 [126][128] - The company highlighted the importance of adapting to a changing competitive landscape where speed is no longer the sole differentiator [80][101] - Management noted that the current environment is creating pressure on customers to rethink their business models, which could lead to increased demand for the company's services [100][102] Other Important Information - The company reported a debt-free balance sheet with cash and investments exceeding $261 million, indicating strong financial health [124] - The company has experienced five consecutive quarters of double-digit free cash flow, supporting its growth initiatives [124] Q&A Session Summary Question: What are the biggest impacts on the hardware side of the business? - Management discussed delays in decision-making related to BEAD and government funding, as well as adjustments in lead times due to shorter order cycles [43][44] Question: How is the company positioned regarding market share in the Tier 2 segment? - Management indicated that they are gaining share within Tier 2 markets, with a focus on helping customers improve ARPU and reduce churn [20][19] Question: What is the expected impact of BEAD on revenue? - Management expects BEAD to contribute significantly to revenue starting in 2025, with a potential to capture about 8% of the total funding [63][65] Question: How are current market conditions affecting customer behavior? - Management noted that high interest rates and increased competition are causing customers to reevaluate their business models and focus on subscriber growth [100][102]

Exhibit 99.2 The second quarter of fiscal 2024 reflected the continued strength of our appliance-based platform, cloud and managed services model. We believe revenue of $198.1 million in the second quarter of 2024 represents the low point for revenue in 2024. We delivered record gross margin as our broadband service provider (BSP) customers continued to gain subscribers due to the outstanding services and value they are providing their subscribers. Our operational excellence remained evident in our strong b ...

Investment overview Business description CALX is a disruptor to a mature industry CALX CALX CALX Given that this is a disruptive model, the question is whether there is strong demand for it and if the products do work. The most solid evidence for strong demand can be seen from CALX Financials, where revenue from its small customer base saw exceptional growth post-launch of these next-gen products (revenue grew from $294 million in FY19 to $764 million in FY23). In terms of whether the product works, I belie ...

Tech stock investors have seen tremendous volatility over the past few years. While many stocks have soared, not al have. Thus, it is always a good idea to keep in mind which companies are worth adding to, and which are tech stocks to sell. If you look at broader indexes, that may not seem true. However, if you exclude the big cap names, it becomes very obvious that most companies in the tech sector are still finding it hard to appease Wall Street’s appetite for growth.The Russell 2000 Index, which tracks t ...

Investors didn't like the guidance the company proffered in its latest earnings report.Broadband communications specialist Calix (CALX -5.18%) likely felt that investors were hanging up on its stock Tuesday. The company published its first-quarter results, and while there were numerous developments to like, investors weren't cheered by what management saw in their crystal ball. As a result, the stock's price fell by more than 5% on a day when the S&P 500 index was well in positive territory with a 1.2% incr ...

Once again, we want to thank everyone on this call and webcast for your interest in Calix, and for joining us. And this concludes our conference call. Have a great day. Operator Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation. Michael Weening Well, so as we -- you know, when you go back during the pandemic, our lead times were as high as 18 months. During that situation, we had deep insight into what a BSP was doing through beca ...

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