Calix(US:CALX)2025-10-30 13:30Financial Data and Key Metrics Changes - The company reported record revenue of $265 million for Q3 2025, reflecting a sequential growth of 10% [8] - Non-GAAP gross margin reached a record 57.7%, representing a 90 basis point sequential increase [8] - Record cash investments at the end of the quarter amounted to $340 million, an increase of $41 million sequentially [9] Business Line Data and Key Metrics Changes - RPOs (Remaining Performance Obligations) grew 2% sequentially to a record $355 million and increased 20% year over year [8] - Current RPOs were $141 million, up 5% sequentially and up 28% year over year, indicating strong platform performance [8] Market Data and Key Metrics Changes - The company experienced broad-based demand from BXP customers, contributing to robust deployments and subscriber growth [8][28] - The international market showed fluctuations, with a noted decline due to one customer in Europe, but overall demand remains strong [51][57] Company Strategy and Development Direction - The company is focused on leveraging AI through its third-generation platform in partnership with Google Cloud to enhance customer success and operational efficiency [16][17] - Investments of $2 billion over 15 years have established foundational elements for growth, enabling customers to optimize their operations and scale rapidly [16][31] - The strategy includes expanding into international markets and enhancing service offerings to drive revenue and margin growth [34][57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth due to broad-based demand and the success of customers using the Calix platform [28][46] - The outlook for Q4 2025 anticipates revenue between $267 million and $273 million, reflecting a 2% sequential increase and 20% growth for the fiscal year compared to 2024 [13] - Management highlighted the transformative potential of AI in driving operational performance and customer success [19][24] Other Important Information - The company achieved its tenth consecutive quarter of eight-figure free cash flow, ending the quarter with record cash [6][9] - The management team emphasized the importance of customer success and the ability to add subscribers as key drivers of revenue growth [56][94] Q&A Session Summary Question: What has driven the outperformance in revenue this quarter? - Management attributed the outperformance to broad-based demand and competitive expansion, with customers winning more subscribers [25][28] Question: How does the innovation cycle impact investment strategies? - The company is focused on leveraging past investments to capitalize on growth opportunities, particularly in AI and international markets [30][34] Question: What is the sustainability of growth into 2026? - Management indicated that while growth may be more muted, the demand profile remains strong, and they expect to be at the lower end of their target growth model [46][56] Question: How will AI impact monetization strategies? - The company plans to monetize AI by helping customers increase subscriber acquisition and service rollout speed, which will enhance RPO growth [53][56] Question: What are the risks and upside factors in the industry? - Management noted that while permitting and labor could be natural governors on growth, they see no significant risks and are optimistic about broad-based demand [121][124]