Financial 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].

Core Insights - Calix (CALX) is set to announce its fourth-quarter 2025 results on January 28, 2026, with anticipated non-GAAP revenues between $267 million and $273 million, reflecting a 2% sequential increase and 20% year-over-year growth [1] - The Zacks Consensus Estimate for fourth-quarter earnings remains steady at $0.38 per share, indicating a significant 375% year-over-year increase, while the revenue consensus is pegged at $270.03 million, representing a 31.01% year-over-year growth [2] Group 1: Financial Performance Expectations - Calix's fourth-quarter performance is expected to benefit from strong customer demand, following record revenues in the third quarter of 2025, with a projected non-GAAP gross margin increase to 57.75% [4] - The company added 20 new customers in the third quarter of 2025, which is expected to contribute to revenue growth in the upcoming quarter as these customers begin deploying Calix solutions [5] - Calix's remaining performance obligations (RPOs) grew 2% sequentially to $355 million and increased 20% year-over-year, indicating strong demand for its cloud platform services [6] Group 2: Strategic Initiatives and Investments - Investments in AI are anticipated to significantly impact Calix's fourth-quarter performance, with new AI features aimed at simplifying operations and enhancing customer satisfaction [7] - The company has a strong balance sheet with record cash and investments of $340 million, supporting ongoing investments in AI and international expansion [8] Group 3: Earnings Guidance and Market Position - Calix expects sequential revenue growth driven by strong demand, new customers, and rising gross margins, with non-GAAP EPS guidance between $0.35 and $0.41 [10] - The company currently has an Earnings ESP of 0.00% and a Zacks Rank of 1 (Strong Buy), indicating a favorable outlook for potential earnings performance [11]

Core Insights - Calix, Inc. announced that Zentro, a leading managed service provider, is accelerating deployments of its SmartMDU solution across major urban markets [1] Group 1: Company Developments - Zentro specializes in multi-dwelling units (MDUs) and is utilizing Calix's award-winning SmartMDU solution [1] - SmartMDU provides secure and reliable property-wide managed Wi-Fi for multifamily communities [1] Group 2: Market Impact - The deployment of SmartMDU helps Zentro personalize resident experiences and increase efficiency for property management [1]

Group 1 - Calix (CALX) shares increased by 7.4% to close at $59.04, supported by high trading volume, compared to a 3.5% gain over the past four weeks [1] - The optimism for Calix is driven by strong customer demand, accelerating subscriber additions, competitive displacements, and expanding platform adoption [1] - The upcoming quarterly earnings report for Calix is expected to show earnings of $0.38 per share, reflecting a year-over-year increase of 375%, with revenues projected at $270.03 million, up 31% from the previous year [2] Group 2 - The consensus EPS estimate for Calix has remained unchanged over the last 30 days, indicating that stock price movements may not continue without trends in earnings estimate revisions [4] - Calix holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [4] - In the same industry, Confluent (CFLT) has a consensus EPS estimate of $0.1, representing an 11.1% increase year-over-year, and also holds a Zacks Rank of 3 (Hold) [5]

Core Insights - The article discusses concerns regarding Calix Inc.'s ability to maintain its performance levels, referencing previous analysis conducted in October [1]. Group 1: Company Overview - Calix Inc. is highlighted as a company of interest due to its strong fundamentals and potential for growth in the tech, infrastructure, and internet services sectors [1]. Group 2: Analyst Background - The author has a background in petroleum and gas engineering and has transitioned into finance, focusing on how businesses grow and market reactions [1]. - The author holds FMVA® and BIDA® certifications, indicating a strong foundation in financial analysis [1]. Group 3: Investment Philosophy - The article emphasizes a long-term investment perspective, aiming to connect with investors who prioritize sustainable returns over short-term fluctuations [1]. - The content aims to provide thoughtful analysis and investment ideas, incorporating data storytelling [1].

Core Viewpoint - Calix, Inc. will release its fourth quarter 2025 stockholder letter on January 28, 2026, and will host a conference call the following morning to discuss the results [1][2]. Financial Information - The stockholder letter for the period ended December 31, 2025, will be available on the Calix Investor Relations website [1]. - A conference call to discuss the results will take place on January 29, 2026, at 5:30 a.m. Pacific Time / 8:30 a.m. Eastern Time [2]. - Interested parties can access the live conference call via a dedicated phone line or through a webcast link that will be active 15 minutes prior to the call [3]. Investor Engagement - Calix will host an Investor Day on February 24, 2026, at the New York Stock Exchange, aimed at analysts and institutional investors [4]. - The presentation will begin at 8:15 a.m. Eastern Time and will also be available virtually [4]. - The executive leadership team will present information regarding the company's long-term strategy and financial outlook [4]. Company Overview - Calix, Inc. provides an AI cloud and appliance-based platform designed for service providers to enhance their operations and customer engagement [5]. - The platform integrates agentic AI, intelligent appliances, and managed services to support various subscriber needs and drive value for stakeholders [5].

Core Insights - Calix, Inc. released initial findings from a national study on subscriber buying behavior for broadband service providers (BSPs) [1] - The study, conducted by Wakefield Research, focuses on "switchers," or subscribers who change BSPs, indicating market trends [1] - The findings emphasize the importance of customer experiences in influencing subscriber decisions [1] Industry Implications - The insights from the study are critical for BSPs to understand the dynamics of subscriber behavior and market direction [1] - Understanding the motivations of switchers can help BSPs tailor their services and improve customer retention strategies [1] - The research highlights a shift in consumer expectations, suggesting that enhanced experiences are becoming a key differentiator in the broadband market [1]

Industry Overview - The AI-driven bull run that began in 2023 and 2024 has continued into 2025, with strong momentum in the AI infrastructure segment [2] - The demand for AI infrastructure remains robust, supported by a bullish market scenario [2] Capital Expenditure Trends - Four of the "magnificent 7" stocks are set to invest $380 billion in 2025 for AI infrastructure development, representing a 54% year-over-year increase in capital spending [3] - Projections indicate that AI infrastructure capital expenditure will exceed $1 trillion by 2028, with estimates reaching a cumulative total of $5 trillion by 2030 [4] Investment Recommendations - Five small and mid-cap stocks are highlighted as potential beneficiaries of the AI boom in 2026: Calix Inc. (CALX), Qualys Inc. (QLYS), Innodata Inc. (INOD), Five9 Inc. (FIVN), and UiPath Inc. (PATH) [5][10] Company Profiles Calix Inc. (CALX) - CALX provides cloud and software platforms for communications service providers, integrating AI to enhance operations and subscriber engagement [8][9] - Expected revenue and earnings growth rates for CALX are 12.4% and 35.3%, respectively, for the next year [11] Qualys Inc. (QLYS) - QLYS specializes in cloud-based cybersecurity solutions, benefiting from increased demand amid rising cyber threats [12][15] - The company has a projected revenue growth rate of 7.7% and earnings growth of 6.5% for the next year [16] Innodata Inc. (INOD) - INOD plays a crucial role in the AI ecosystem by providing high-quality data for training language models, with expected revenue and earnings growth rates of 24.1% and 35.6%, respectively [18][21] - The company supports five of the seven major hyperscalers and is expanding its capabilities in AI services [19][20] Five9 Inc. (FIVN) - FIVN offers intelligent cloud software for contact centers, with a focus on AI-driven solutions that enhance customer interactions [22][25] - The expected revenue and earnings growth rates for FIVN are 9.5% and 8.3%, respectively, for the next year [26] UiPath Inc. (PATH) - PATH provides a robotic process automation platform that leverages AI to streamline operations, with new generative AI features enhancing its offerings [27][28] - The company anticipates revenue and earnings growth rates of 9.3% and 14.2%, respectively, for the next year [30]

Group 1 - Calix (CALX) is currently outperforming its peers in the Computer and Technology sector, with a year-to-date performance of approximately 60.7%, compared to the sector average return of 29.7% [4] - The Zacks Rank for Calix is 1 (Strong Buy), indicating a positive outlook based on earnings estimates and revisions [3] - Over the past three months, the Zacks Consensus Estimate for Calix's full-year earnings has increased by 231.4%, reflecting improved analyst sentiment [4] Group 2 - Calix belongs to the Internet - Software industry, which consists of 168 companies and is currently ranked 59 in the Zacks Industry Rank, outperforming the industry's average gain of 9.2% this year [6] - Another notable stock in the Computer and Technology sector is CyberArk (CYBR), which has returned 39.7% year-to-date and has a Zacks Rank of 2 (Buy) [5] - The Security industry, to which CyberArk belongs, is ranked 62 and has seen a year-to-date increase of 15.6% [6]

Core Insights - Home Telecom experienced a 5X increase in subscriber upgrades within six months after launching lifestyle-based residential Wi-Fi packages with Calix SmartHome, resulting in nearly 500 percent growth in monthly recurring revenue and over 17 percent increase in average revenue per user (ARPU) per upgrade [1][6]. Group 1: Subscriber Engagement and Revenue Growth - Home Telecom's partnership with Calix Success led to the reinvention of their SmartHome packages, focusing on subscriber interests and lifestyles, which included the introduction of SmartTown for community Wi-Fi [2][4]. - The launch of five distinct managed Wi-Fi packages, including the new 5-gig Tech Giant package, has attracted subscribers with high-performance connectivity needs [3][6]. - Targeted marketing campaigns utilizing Calix Cloud resulted in a 40 percent increase in multi-gig take rates within 30 days, demonstrating effective subscriber engagement strategies [6]. Group 2: Operational Efficiency and Innovation - Home Telecom simplified whole-home Wi-Fi adoption through "all-in" plans, which included installation of mesh systems and setup of the CommandIQ mobile app, enhancing cybersecurity and content controls for subscribers [6]. - Insights from Calix Cloud enabled personalized offerings and accelerated the adoption of multi-gig packages, showcasing the importance of data-driven strategies in enhancing subscriber experiences [2][6]. Group 3: Recognition and Future Outlook - Home Telecom received the Calix Collins Marketing Innovation Award for their effective marketing campaigns that significantly boosted subscriber engagement and service adoption [5]. - Calix's president emphasized that the future of broadband lies in enhancing subscriber experience and engagement, indicating a shift in industry focus from speed and price competition to value-driven service [7].