Calix, Inc. Q4 FY2025 earnings call

• Closed 2025 with the best performance in company history, including record revenue (sixth quarter of consecutive growth) and record gross margin (eighth quarter of consecutive margin improvement).
• Launched the third-generation Calix platform in December, with over 300 customers already migrated and aiming to complete all customer migrations by end of Q1 2026.
• Continued to improve culture, earning 44 culture and 20 innovation awards, including 16 in Q4.
• Strong demand for the platform among broadband experience provider customers, with 25 new customers added in Q4.
• Transitioned to a sustained growth phase as demand visibility is at an all-time high, exiting the early adopter phase of market disruption.

In the fourth quarter of 2025, Calix delivered record revenue of $272 million, marking a sequential increase of 3% and a robust 32% year-over-year growth. This capped off a milestone year where the company surpassed $1 billion in annual revenue, reflecting 20% growth over 2024. Remaining performance obligation reached a record $385 million, up 9% sequentially and 18% year-over-year. Current RPOs were also a record at $152 million, representing an 8% sequential increase and a 26% rise from the same period last year. Non-GAAP gross margin was 58%, representing the eighth consecutive quarter of margin improvement.

• First quarter 2026 revenue guidance is between $275 million and $281 million, representing a 2% increase at the midpoint over the prior quarter.
• Expect sequential revenue growth, including in Q1, due to robust demand and customer adoption.
• BEAD opportunity for Calix is between $1 billion and $1.5 billion, with deliveries of appliances later this year and ramping into next year and beyond.
• Non-GAAP gross margin to remain strong with near-term impact from customer mix and cloud transition during the third-generation platform shift.
• Board of Directors authorized an increase of $125 million in stock repurchase plan.

• Market disruption and competition could impact growth.
• Execution of BEAD program and its impact on revenue and margins.
• Near-term impact on non-GAAP gross margin due to customer mix and cloud transition.
• Uncertainties in international market expansion and large customer adoption timelines.

Q: Joe Cardoso asked about revenue growth outlook for 2026 and BEAD contribution.

A: Cory Sindelar stated they expect to be in the 10%-15% range, not at the low end, and Michael Weening mentioned details would be walked through at Investor Day.

Q: Ryan Koontz inquired about Tier 1 entry points.

A: Michael Weening outlined four vectors including talking to enterprise organizations about MDU, networking insights, demonstrating subscriber experience models, and speaking to customers about Agentic at a higher level.

Q: Michael Genovese asked about software vs appliance disclosures.

A: Cory Sindelar explained software is tied to subscriber growth with consistent upward trajectory, while appliances can fluctuate, and software margins will improve once cloud transition is complete.

Q: George Notter asked about Agent Workforce Cloud revenue ramp.

A: Michael Weening said details would be covered at Analyst Day, with rapid ramp expected once platform is fully rolled out.

Q: Tim Savageaux asked about BEAD opportunity layering into financials.

A: Cory Sindelar said details would be provided at Analyst Day, noting some BEAD revenue may be additive but dependent on industry resource allocation.

Q: Scott Searle asked about monetization of third-gen platform.

A: Michael Weening stated monetization could start in the second half of 2026, with significant opportunities in micro-segmentation and custom campaigns driving revenue.

Q: Christian Schwab asked about BEAD market share.

A: Cory Sindelar and Michael Weening noted Calix's strong technology for network automation and subscriber win capabilities, regardless of BEAD market share, as the value proposition for winning subscribers strengthens.