Michael Weening, Calix president and CEO, said during the company’s fourth-quarter earnings call that broadband providers must decide between remaining a speed-based network operator, which risks commoditization, or embracing differentiation through broadband experiences.
“The fourth quarter delivered strong results as our business model was embraced by a growing number of broadband experience providers to meet the needs of the entire community: consumer, small business, education, MDU, government, and the municipality,” he said.
He gave as an example the success of the MGW SmartTown network in Virginia, which utilized the Calix platform in its network to provide secure WiFi across multiple towns and ensure seamless outdoor WiFi during the Hurricane Helene recovery efforts.
“Our mission remains aligned to help our customers win for the disruption ahead as they leverage our platform to simplify operations and their go-to-market, innovate with new experiences that differentiate their offerings, and grow for their investors, members, and the communities they serve,” said Weening. “The strength of our mission strategy and execution is evidenced in our results in the fourth quarter.”
Calix CFO Cory Sindelar reported fourth-quarter revenues of $206 million, a 2.6% sequential growth but down 22% year-over-year. He also reported that RPO growth demonstrated demand for Calix’s platform, cloud, and managed services: RPOs grew to $326 million, a 34% year-over-year increase.
“Our current RPOs were $121 million, up 10% sequentially and up 27% year-over-year,” said Sindelar. “This strength in our platform, cloud, and managed services led to record non-GAAP gross margin of 55.5% in the fourth quarter.”
In the fourth quarter, Calix added 18 new Ethernet service platform (ESP) customers, the majority of which were competitive takeaways. In the quarter, 21 customers adopted Calix’s platform, 15 customers started with Calix Cloud, and 32 customers implemented managed services.
“These are all examples of customers partnering with Calix to cross the chasm and become broadband experience providers to win in their markets,” said Sindelar.
Smaller customers made up 71% of fourth-quarter revenue, and large and medium customers revenues combined made up the remaining 29%. 90% of fourth quarter revenues came from U.S. customers.
Starting the year strong
Calix expects revenues between $204 million and $210 million for the first quarter of 2025. Non-GAAP gross margin for the quarter is expected to remain flat to slightly up.
“We expect clients’ margins to be a headwind to overall margins due to a mix shift towards subscriber systems and an increase in revenue from medium and large customers as we land new footprint,” said Sindelar.
Calix’s objective going forward is to help customers deliver value to their subscribers, increase its footprint, and expand its platform, cloud, and managed services with each customer.
“We’re in the early stages of this once-in-a-generation opportunity as the broadband industry disrupts,” said Weening. “The Calix broadband platform, cloud, and managed services enable network operators to cross the chasm and become broadband experience providers that win in the communities they serve.”
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Hayden Beeson
Hayden Beeson is a writer and editor with over seven years of experience in a variety of industries. Prior to joining Lightwave and Broadband Technology Report, he was the associate editor of Architectural SSL and LEDs Magazine.