Calix(US:CALX)2026-01-28 21:18Financial Performance - In Q4 2025, Calix reported record revenue of $272 million, marking a 3% sequential growth and a 32% year-over-year increase, contributing to an annual revenue of $1 billion, which represents a 20% year-over-year growth [3][16]. - Total revenue for Q4 2025 was $272.4 million, up from $206.1 million in Q4 2024, with a total revenue for the year of $1 billion compared to $831.5 million in 2024 [59]. - Net income for Q4 2025 was $7.2 million, compared to a net loss of $17.9 million in Q4 2024 [59]. - Net income for 2025 was $17.9 million, a significant recovery from a net loss of $29.7 million in 2024 [63]. - Non-GAAP net income for Q4 2025 was $27.3 million, compared to $5.2 million in Q4 2024, reflecting a substantial year-over-year growth [69]. - Calix generated a record $40 million in free cash flow during Q4 2025, marking the eleventh consecutive quarter of eight-figure free cash flow, and ended the year with cash and investments totaling $388 million [5][38]. - Non-GAAP free cash flow for Q4 2025 was $40.3 million, up from $10.2 million in Q4 2024, showing a strong improvement in cash generation [69]. Revenue Breakdown - Appliance revenue for Q4 2025 was $225.8 million, up 2% sequentially and 36% year-over-year, with a gross margin of 57.2% [28][29]. - Software and services revenue reached $46.6 million in Q4 2025, up 7% sequentially and 17% year-over-year, driven by strong demand for platform licenses and managed services [22][23]. Margins and Expenses - The gross margin for Q4 2025 was a record 57.7%, with a non-GAAP gross margin of 58.0%, reflecting a 250 basis point year-over-year improvement [18][33]. - GAAP gross margin for Q4 2025 was reported at 54.4%, while the non-GAAP gross margin was 54.6% [65]. - Operating expenses for Q4 2025 totaled $148.0 million, compared to $132.1 million in Q4 2024, reflecting a 12.0% increase [67]. - Non-GAAP operating expense guidance for Q1 2026 is $128 million (midpoint), reflecting an increase primarily for AI development, partially offset by reduced sales and marketing expenses [44]. Customer and Market Growth - The company added 25 new platform customers, leading to a year-over-year increase of 18% in remaining performance obligations (RPOs), which reached $385 million [4][26]. - Calix anticipates continued growth in RPOs and strong demand visibility, positioning itself for sustained growth in the broadband market [9][26]. - Demand visibility is at an all-time high, with a focus on expanding into new markets and enhancing customer service through AI [47]. - The company aims to grow its BXP customer base and expand its platform and services across subscriber geographies [53]. Future Guidance - Revenue guidance for Q1 2026 is projected between $275 million and $281 million, representing a 2% increase at the midpoint from the prior quarter [42]. - Non-GAAP gross margin guidance for Q1 2026 is set at 57.25% (midpoint), down 75 basis points from the previous quarter due to cloud costs and customer mix [43]. - The effective tax rate for 2026 is expected to be in the range of 23% to 25% [45]. - Gross margin is projected to be between 55.95% and 57.95% under GAAP, and between 56.25% and 58.25% under Non-GAAP [72]. - Operating expenses are estimated to be between $147 million and $149 million under GAAP, and between $127 million and $129 million under Non-GAAP [72]. - Net income per diluted common share is expected to range from $0.08 to $0.14 under GAAP, and from $0.34 to $0.40 under Non-GAAP [72]. Asset and Equity Changes - Total current assets increased to $691.6 million in 2025, up from $584.7 million in 2024, representing an 18.3% growth [61]. - Cash and cash equivalents at the end of 2025 reached $143.1 million, compared to $43.2 million at the end of 2024, marking a 231.5% increase [63]. - Total liabilities increased to $199.3 million in 2025 from $158.3 million in 2024, indicating a 25.9% rise [61]. - The total stockholders' equity increased to $859.2 million in 2025 from $780.9 million in 2024, representing a 10.0% growth [61]. Strategic Initiatives - The company is transitioning to its third-generation platform, which is expected to enhance customer capabilities and expand market offerings, particularly through partnerships with Google Cloud [7][8]. - The company is excited about the launch of its third-generation platform, which includes new features aimed at transforming broadband operations [46]. - The company emphasizes the importance of non-GAAP financial measures to provide a clearer view of its operating performance [56].