Calix(US:CALX)2025-10-29 20:16Financial Performance - In Q3 2025, Calix achieved record revenue of $265 million, marking a 10% sequential growth and a 32% year-over-year increase[3]. - Total revenue for the three months ended September 27, 2025, was $265.4 million, up from $200.9 million in the same period last year, representing a 32% year-over-year increase[58]. - Gross profit for the nine months ended September 27, 2025, was $411 million, compared to $340.2 million for the same period in 2024, marking a 21% increase[58]. - Net income for the nine months ended September 27, 2025, was $10,672,000, a significant improvement from a net loss of $11,823,000 for the same period in 2024[62]. - Non-GAAP net income for the three months ended September 27, 2025, was $30,586,000, compared to $8,907,000 for the same quarter in 2024[68]. - Free cash flow generated was $27 million, marking the 10th consecutive quarter of eight-figure free cash flow[4]. Margins and Expenses - Non-GAAP gross margin reached a record 57.7%, improving by 90 basis points sequentially and 230 basis points year-over-year[29]. - Non-GAAP gross margin for the three months ended September 27, 2025, was 57.7%, up from 54.8% in the same quarter of 2024[64]. - Non-GAAP gross margin guidance for Q4 2025 is set at 57.75% at the midpoint, indicating an annual improvement of 100 to 200 basis points in 2025[43]. - GAAP operating expenses for the three months ended September 27, 2025, totaled $134,605,000, compared to $120,943,000 for the same period in 2024[66]. - Non-GAAP operating expense guidance for Q4 2025 is estimated at $123 million at the midpoint, primarily due to investments in customer success and AI development[44]. Cash and Investments - Cash and investments reached a record $340 million, with a quarterly increase of $40.7 million driven by operating cash flow of $32.4 million[39]. - Cash and cash equivalents increased to $95 million as of September 27, 2025, from $43.2 million at the end of 2024[60]. - Cash and cash equivalents at the end of the period on September 27, 2025, were $95,012,000, up from $62,361,000 at the end of the same period in 2024[62]. - The company reported net cash provided by operating activities of $88,907,000 for the nine months ended September 27, 2025, compared to $53,037,000 for the same period in 2024[62]. - Stock-based compensation for the nine months ended September 27, 2025, was $65,976,000, an increase from $48,686,000 in the same period of 2024[62]. Customer and Market Growth - U.S. revenue accounted for 94% of total revenue, up from 91% in the previous quarter, with a 14% sequential increase and a 33% year-over-year increase[17]. - Revenue from large customers increased by $6.9 million sequentially, representing 13% of total revenue, while revenue from small customers accounted for 76% of total revenue[27]. - Calix added 20 new platform customers in Q3 2025, contributing to the ongoing growth and success of its broadband experience provider (BXP) customers[3]. - The company is focused on expanding its customer base and enhancing its platform, cloud, and managed services offerings[47]. Future Guidance - Revenue guidance for Q4 2025 is projected between $267 million and $273 million, reflecting a 2% increase at the midpoint from the prior quarter[42]. - Net income per diluted common share for Q4 2025 is expected to be between $0.35 and $0.41, compared to $0.15 to $0.21 under GAAP[41]. - The company expects a non-GAAP effective tax rate between 23% and 25% for 2025 and 2026[45]. - The guidance for net income per diluted common share for the three months ending December 31, 2025, is projected to be between $0.15 and $0.21[71]. Operational Efficiency - Days sales outstanding (DSO) remained low at 30 days, while inventory turns improved to 3.8, indicating strong operational efficiency[36]. - The third-generation platform and Calix Agent Workforce are set to launch in Q4 2025, aimed at enhancing customer success and operational efficiency[7]. - The company has launched the Calix Agent Workforce, leveraging investments in AI to drive innovation and customer success[46].