Calix (NYSE:CALX) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.
Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more.
View the webcast at https://event.choruscall.com/mediaframe/webcast.html?webcastid=ZhIixHxK
Summary
Calix reported record revenue of $280 million in Q1 2026, with strong demand and a 3% sequential increase.
The company completed migrating all customers to its third-generation platform on Google Cloud, enhancing capabilities and market reach.
Future revenue guidance for Q2 2026 is set between $287 million and $293 million, with an annual growth expectation of 15% to 20%.
Non-GAAP gross margin was 57.2%, with a slight sequential decline due to dual cloud costs, but a year-over-year increase of 100 basis points.
Calix repurchased 3.3 million shares for $171 million and announced an additional $100 million for share buybacks.
The company anticipates reaccelerating RPOs in the second half of 2026 due to the Calixone platform’s momentum.
Calix is hosting its first Investor Day in four years to outline strategy, innovation, and long-term growth prospects.
Management expressed confidence in handling memory component cost challenges through surcharges and strategic purchasing.
Full Transcript
OPERATOR
Oh my God. Greetings everyone and welcome to the Calix First Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen only mode. A Q&A session will follow the brief prepared remarks. If anyone should require operator assistance during the conference, please press Star-0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Nancy Fazioli, Vice President of Investor Relations. Nancy, please go ahead.
Nancy Fazioli (Vice President of Investor Relations)
Thank you Alicia and good afternoon everyone. Thank you for joining our first quarter 2026 earnings call today. On the call we have President and CEO Michael Weaning and Chief Financial Officer Corey Sindelar. As a reminder, today after the market closed, Calix issued news releases which were furnished on a Form 8K along with our stockholder letter and were also posted on the Investor Relations SECtion of the Calix website. Today’s conference call will be available for webcast replay in the Investor Relations SECtion of our website. Before I turn the call over to Michael for his opening remarks, I want to remind everyone that on this call we will refer to forward-looking statements including all statements the company will make about its future financial and operating performance, growth strategy and market outlook and that actual results may differ materially from those contemplated by these forward looking statements. Factors that could cause actual results and trends to differ materially are set forth in the first quarter 2026 letter to stockholders and in the annual and quarterly reports filed with the SEC. Calix assumes no obligation to update any forward looking statements which speak only as of their respective dates. Also in this conference call we will discuss both GAAP and non GAAP financial measures. A reconciliation of GAAP to non GAAP measures is included in the first quarter 2026 letter to stockholders. Unless otherwise stated, all financial information referenced in this call will be non-GAAP. With that Michael, please go ahead.
Michael Weaning (President and CEO)
Thank you Nancy. It was another incredible execution quarter for the Calix team. Record revenue with strong demand continuing into 2026 with customers. At the end of March we completed the migration of all existing customers to the third generation of the Calix platform, launching on Google Cloud, thereby enabling the expansion of our capabilities and the markets that we target. As important, those customers who expand their partnerships with Calix on CalixOne begin to see the benefits rapidly as agent workforce and our AI native platform comes to life. The impact of AI will now start contributing to our customers success by helping them transform their operations, allowing their teams to add capacity and capability with AI and accelerate experiences that they need to differentiate in the markets. They serve, thereby enabling their teams to compete and win. Today’s call is focused on the quarter and our 2026 outlook. Tomorrow at Investor Day, we’ll go deeper on how Calixone expands the opportunity of our model with proof directly from customers who will attend the event and are ready to share. With that, I’ll turn it over to Corey to walk through the results and guidance and then we’ll take your questions.
Corey Sindelar (Chief Financial Officer)
Corey, over to you. Thank you, Michael in the first quarter of 2026, Calix delivered yet another quarter of record revenue of $280 million, marking a sequential increase of 3% driven by continued strong demand for our platform. This quarter we welcomed 14 new customers, reinforcing our ongoing efforts to grow our customer base while supporting their expansion within the local communities they serve. Remaining performance obligations were $376 million, down 2% sequentially and up 11% year over year. The sequential decline related to a robust fourth quarter comparison and our focus on completing the migration of customers to the new third generation platform. Current RPOs in the first quarter were a record $157 million, representing a 3% sequential increase and a 22% rise from the same period last year. We anticipate that RPOs will reaccelerate in the second half of 2026 as we gain momentum with CalixOne, underscoring the strength of our business model as customers focused on delivering exceptional experiences, adopt our platform, add incremental offerings and win new subscribers. Non GAAP gross margin was 57.2%, down 80 basis points sequentially due to investment in our dual cloud environments as we migrated customers to our third generation platform. Compared to last year, non GAAP gross margin increased 100 basis points. Our balance sheet remains strong. DSO at the end of the first quarter was 36 days. Inventory turns remain steady at 3, reflecting continued inventory investments to address robust demand and building supply continuity and we generated free cash flow in the quarter of $7 million. We also invested $171 million to buy back 3.3 million shares of our common stock at an average price of $51.34. Furthermore, the board today authorized another $100 million to be added to this program. This investment speaks to our belief in the tremendous opportunity ahead and our commitment to creating lasting value for our stockholders. We finished the quarter with a strong cash and investment balance of $243 million. Turning to guidance, our revenue guidance for the second quarter of 2026 is between 287 and $293 million, representing a 4% increase at the midpoint over the prior quarter. This reflects continued robust demand trends and a modest benefit from recapturing a portion of the higher memory cost via a memory surcharge. For the year, we expect revenue to grow between 15 and 20%. With demand supply disconnect so large related to memory components, there will inevitably be some companies that will come up short. Our first priority is to ensure that we have adequate supply such that our customers can continue to add subscribers and and take market share. Our advanced purchasing had allowed us to avoid higher memory component costs during the first quarter. However, that advanced supply has run its course and we now face market prices. We are partnering with our customers to share in the higher memory costs by initiating a surcharge, albeit it is a partial cost recovery and without adding gross profit is one way we can help our customers in this unfortunate memory supply environment. Our gross margin guidance for the second quarter of 2026 is between 24 and a quarter and 20 sorry, 54 and a quarter and 57 and a quarter percent reflecting the effects of higher memory component costs, the impact from surcharges and the customer and product mix. The decline in appliance gross margin is expected to be offset by improvement in software …
This post was originally published here
