CALIX, INC Q1 FY2025 earnings call

• Industry crossroads: Broadband providers must choose between commoditization or differentiation through experience-based broadband.
• Calix's strength: Driven by appliance-based platform, cloud, and managed services model; example: Windstream's Kinetic Business launching SmartBiz.
• New segment: Multi-Dwelling Units with SmartMDU launched in February.
• Supply chain: Talented team adapted during pandemic, diversified supply chain, reduced SKU count to <200.
• Q1 results: Revenue $220M, 7% sequential growth; RPOs grew 4% QoQ to $340M, up 39% YoY; non-GAAP gross margin 56.2%, record; added 16 new BSP customers; strong balance sheet, double-digit free cash flow, 30-day DSO, 3.6 inventory turns.

No detailed breakdown of product segments with absolute revenue and contribution % provided. Overall, first quarter 2025 saw revenue of $220 million, 7% sequential quarterly growth. RPOs grew 4% sequentially to $340 million and increased 39% year-over-year. Non-GAAP gross margin was a record 56.2% in Q1.

• Q2 2025 revenue outlook: $224M - $227M, midpoint 2% sequential growth.
• Q2 non-GAAP gross margin midpoint slight increase from Q1.
• 2025 annual gross margin improvement target: 100-200 basis points.
• 2025 operating expenses: Flat to slightly up in absolute dollars, declining as % of revenue.
• Board increased stock repurchase program by $100M.

• Dynamic environment affecting demand, supply, and costs.
• Uncertainty around tariffs and their impact on supply chain and costs.
• Uncertainty regarding BEAD funding and its timing and impact.

Q: Ryan Koontz asks about macro spending environment, CapEx plans, customer pull forwards.

A: Michael and Cory discuss customer investments, no tariff impact on pull forwards, broadband inelasticity.

Q: Michael Genovese asks about guidance, gross margin, tariffs, share gain.

A: Cory talks about sequential growth, gross margin trends, supply chain handling tariffs; Michael on gaining share through customer partnerships.

Q: Samik Chatterjee asks about guidance, customer visibility, BEAD.

A: Michael and Cory discuss customer partnership and visibility, BEAD uncertainty.

Q: Christian Schwab asks about supply chain, manufacturing in US.

A: Michael and Cory talk about SKU count, US manufacturing, supply chain optimization.

Q: Tim Savageaux asks about large customers, Verizon, Frontier, DZS bankruptcy.

A: Michael on Verizon partnership, Frontier uncertainty, DZS bankruptcy offering opportunity to help.

Q: Scott Searle asks about macro, BEAD, RPOs.

A: Michael on business lumpiness, BEAD uncertainty, RPO drivers (consumer, small business, MDU)