Financial Data and Key Metrics Changes - Calix reported record revenue of $272 million for Q4 2025, a sequential increase of 3% and a year-over-year growth of 32% [9] - The company surpassed $1 billion in annual revenue for the first time, reflecting a 20% growth over 2024 [9] - Non-GAAP gross margin reached a record 58%, marking the eighth consecutive quarter of margin improvement [11] - Remaining performance obligation (RPO) reached a record $385 million, up 9% sequentially and 18% year-over-year [9] - Free cash flow for the quarter was $40 million, with a record cash and investments total of $388 million, an increase of $48 million sequentially and $91 million year-over-year [12] Business Line Data and Key Metrics Changes - The addition of 25 new customers in Q4 demonstrates broad-based adoption of Calix's solutions [9] - Current RPOs were also a record at $152 million, representing an 8% sequential increase and a 26% rise from the same period last year [10] - The company has aligned its financial metrics to reflect the growth and value of its model, separating appliance revenue and gross margin from recurring software and services revenue [10] Market Data and Key Metrics Changes - The company is entering a sustained growth phase for 2026 and beyond, with demand visibility at an all-time high [7][8] - The BEAD program presents a significant opportunity for Calix, with an expected size of $1 billion to $1.5 billion, primarily focused on fiber-based deployments [14][15] Company Strategy and Development Direction - Calix launched its third-generation platform in December 2025, with over 300 customers migrated, aiming for full migration by the end of Q1 2026 [5][6] - The company is focusing on expanding into new global markets and large customers with private clouds, enhancing its operational capabilities [7] - The strategic partnership with Google Cloud allows for deployment flexibility, whether hosted by Calix or as a private instance for large customers [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory for 2026, expecting sequential revenue growth despite traditional seasonal trends [13] - The company anticipates non-GAAP gross margin to remain strong, with some near-term impacts due to customer mix and overlapping cloud costs during the transition to the new platform [16] - Management emphasized the importance of AI capabilities in driving business outcomes and enhancing customer engagement [31][86] Other Important Information - Calix's culture and operational discipline have been recognized with multiple awards, reflecting the company's commitment to customer success [6] - The company has a disciplined capital allocation process, with a significant increase in its stock repurchase plan authorized by the board [13] Q&A Session Summary Question: Revenue growth outlook for 2026 - Management indicated that the revenue growth outlook for 2026 remains in the range of 10%-15%, with confidence in achieving higher than the low end [21][22] Question: New market expansion and international opportunities - Management noted that while new market contributions are not yet included in the numbers, confidence in international expansion is high following the platform launch [25][27] Question: Timing of monetization for the third-generation platform - Management expects to see monetization ramp up in the second half of 2026, with significant contributions from the Agent Workforce Cloud [79][82] Question: Contribution from the BEAD program - Management clarified that while the BEAD program presents an opportunity, it may not be fully incremental to the current run rate business due to resource constraints in the industry [74][76] Question: High appliance margins and software margins outlook - Management explained that high appliance margins are due to the company's investment in an abstracted operating system, while software margins are expected to exceed 70% as the dual cloud costs are lifted [50][51]