Calix(US:CALX)2024-10-29 18:51Financial 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]