• Revenue: $220 million, representing 7% sequential quarterly growth.
• Non-GAAP Gross Margin: 56.2%, a record for the company.
• Remaining Performance Obligations (RPOs): $340 million, up 4% sequentially and 39% year over year.
• Current RPOs: $128 million, up 6% sequentially and 30% year over year.
• New BSP Customers: 16 added in the first quarter.
• Free Cash Flow: Double-digit for the eighth consecutive quarter.
• Cash and Investments: $282 million, after $40 million in share repurchases.
• Days Sales Outstanding (DSO): 30 days, down six days sequentially and 10 days year over year.
• Inventory Turns: 3.6.
• Q2 2025 Revenue Guidance: $221 million to $227 million, a 2% sequential increase at the midpoint.
• Stock Repurchase Program: Increased by $100 million.

• Warning! GuruFocus has detected 5 Warning Sign with CALX.

Release Date: April 22, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Calix Inc (NYSE:CALX) reported strong demand in the first quarter, delivering revenue of $220 million, which represented a 7% sequential quarterly revenue growth.
• The company achieved a record non-GAAP gross margin of 56.2% in the first quarter, driven by customer mix and new subscriber wins.
• Calix Inc (NYSE:CALX) added 16 new BSP customers, with the majority being competitive takeaways, indicating strong market positioning.
• The company maintained a strong balance sheet, generating double-digit free cash flow for the eighth consecutive quarter and ending with cash and investments of $282 million.
• Calix Inc (NYSE:CALX) increased its stock repurchase program by $100 million, reflecting confidence in its financial position and future prospects.

Negative Points

• The dynamic environment presents challenges in forecasting costs with precision, potentially impacting financial performance.
• The company faces ongoing uncertainty related to tariffs, which could affect future costs and supply chain dynamics.
• Calix Inc (NYSE:CALX) acknowledges the inherent lumpiness in its business, particularly with large customer accounts, which can lead to variability in quarterly results.
• The company is not including potential BEAD funding in its growth forecasts due to uncertainty around timing and disbursement.
• Despite strong performance, Calix Inc (NYSE:CALX) operates in a competitive market with ongoing challenges from other broadband providers and technology shifts.

Q & A Highlights

Q: Can you provide insights into the macro spending environment and your customers' CapEx plans for 2025? A: Michael Weening, President and CEO, explained that customers are investing appropriately in capital for network builds and consumer demand. Calix's business model, which focuses on marketing analytics and consumer insights, helps broadband experience providers attract new subscribers and drive capital investment. The company is confident in its business model and has guided higher for Q2 due to strong demand.

Q: What impact do tariffs have on your business, and how are you managing potential cost increases? A: Cory Sindelar, CFO, stated that tariffs have not impacted Q1 results, and the company has inventory to protect against immediate effects. Calix plans to pass any future tariff-related costs to customers without adding profit margins. The company has a strong supply chain team and a diversified manufacturing presence to minimize costs and ensure supply.

Q: Do you expect sequential revenue growth throughout 2025, and what is your outlook for 2026? A: Cory Sindelar confirmed that Calix expects sequential revenue growth throughout 2025, even with demand pull-forwards from large customers. The company anticipates low double-digit growth for 2026, maintaining its growth trajectory.

Q: How is Calix positioned to benefit from the DZS bankruptcy, and what opportunities do you see? A: Michael Weening expressed sympathy for customers affected by the DZS bankruptcy and emphasized Calix's focus on offering support and solutions to those in need. While there may be opportunities for Calix, the company's primary goal is to help affected customers navigate their challenges.

Q: What is the status of BEAD funding, and how does it impact your growth projections? A: Michael Weening noted that BEAD funding is not included in Calix's growth projections due to ongoing uncertainties. The company expects BEAD to take longer to arrive but believes it will eventually provide a significant tailwind. Calix remains focused on its strong broadband business model, which drives demand independently of BEAD funding.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.