CALIX, INC (CALX)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue of $220.2m rose 6.9% q/q and fell 2.7% y/y, beating S&P Global consensus by ~$13.3m; non-GAAP EPS of $0.19 beat by ~$0.06. Management cited a large customer pull-forward and broader platform/cloud/managed services strength; non-GAAP gross margin set another record at 56.2% . Q1 2025 consensus values from S&P Global marked with asterisks below.
• Q2 2025 guidance implies continued sequential growth: revenue $221–$227m, non-GAAP EPS $0.18–$0.24, and non-GAAP gross margin 55.25%–57.25% .
• KPIs were strong: RPOs $340.4m (+4% q/q, +39% y/y); current RPO $128.4m (+6% q/q, +30% y/y); DSO 30 days; non-GAAP FCF $12.9m .
• Capital return: repurchased 1.2m shares for $40m in Q1; Board added $100m to the authorization (remaining ~$62.9m at quarter-end) .
• Catalyst pathway: sustained sequential growth, record margins, expanding RPOs, tariff pass-through stance, and potential BEAD tailwinds once rules finalize (management not embedding BEAD in outlook) .

What Went Well and What Went Wrong

• What Went Well

  • Record margins and sequential growth: “record non-GAAP gross margin of 56.2%” with revenue up 7% q/q; RPOs +4% q/q to $340m and +39% y/y .
  • Demand breadth and take-share narrative: management emphasized competitive wins and that “we are absolutely taking share,” supported by 16 new BSP adds in Q1 .
  • Balance sheet and FCF: eighth straight quarter of double-digit FCF; cash and investments at $282.3m despite $40m buyback; DSO improved to 30 days .

• What Went Wrong

  • Mix pressure in Intelligent Access: Intelligent Access revenue down 6% q/q and 32% y/y (seasonal low point), while Unlimited Subscriber grew 15% q/q and 27% y/y .
  • International softness: international was 4% of revenue, down 58% q/q and 44% y/y due to fewer Europe shipments; largest international customer ordering remains “lumpy” .
  • Large customer lumpiness: large+medium fell to 21% of revenue (from 29% in Q4), and management noted one large customer pull-forward in Q1; they do not expect it to be run-rate .

Financial Results

Revenue and EPS by period (oldest → newest)

Q1 2025 vs Estimates (S&P Global)

Margins (oldest → newest)

Mix and Geography (oldest → newest)

Key KPIs and Balance Sheet (older → newer)

KPIs commentary:

• Unlimited Subscriber revenue +15% q/q and +27% y/y; Intelligent Access −6% q/q and −32% y/y (seasonality and mix shift) .
• Cash conversion cycle improved to 109 days from 133 days in Q4 .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO framing: “The dynamic environment will be defined by three components: demand; supply; and costs… demand is strong and will continue to grow through 2025” .
• Tariffs: “Q1 happened without the effect of tariffs… we will just pass that through with no margin” .
• Sequential growth outlook: “We believe we can continue to grow sequentially… particularly in the back half of 2025” .
• BEAD approach: “We aren’t counting on BEAD in our numbers… when BEAD happens… we’ll do well” .
• Share gains: “We are absolutely taking share” .

Q&A Highlights

• Demand breadth and visibility: Strength was broad-based even with a large customer pull-forward; no “air gap,” and small customers remained strong. Not embedding large customer run-rate going forward .
• Tariff stance: No Q1 impact; dynamic environment; company will pass through costs without margin, leveraging diversified supply chain and U.S. manufacturing optionality despite higher costs .
• BEAD timing: Front end slowed pending rules and NTIA director; back end progressing; final rules expected end of May; management not including BEAD in outlook .
• Large customers: Verizon continues to expand fiber with Calix; Frontier opportunity too early to size .
• Multi-segment expansion: New segments like SmartMDU and SmartBiz expanding TAM; customer success focus on sales/marketing execution to drive ARPU and lower churn .

Estimates Context

• Q1 2025 vs S&P Global consensus: Revenue $220.2m vs $207.0m*; non-GAAP EPS $0.19 vs $0.127*; both were clear beats. Estimate counts: 6 for revenue and EPS*.
• Forward sentiment: With Q2 revenue guide above Q1 and record gross margin, Street models likely move up for near-term quarters; management still guides annual GM improvement within +100–200 bps, with OpEx held relatively flat in absolute dollars .

Values retrieved from S&P Global (marked with *).

Key Takeaways for Investors

• Calix delivered a clean top- and bottom-line beat with record gross margins and sustained q/q growth; the beat was not solely a one-off pull-forward given broad-based small customer strength and rising RPOs .
• Mix is rotating toward subscriber systems and managed services, supporting a structurally higher gross margin profile even as Intelligent Access sees seasonality; recurring cloud/managed adoption underpins RPO growth .
• Q2 guidance signals continued sequential growth; management reiterated expectations for sequential growth through 2025, with margin expansion within the 100–200 bps model range .
• Balance sheet discipline (DSO 30 days; improving cash conversion cycle) and incremental $100m buyback authorization provide downside support and optionality .
• Policy/Cost risks (tariffs) are being actively managed via diversified supply chain and pass-through pricing; BEAD remains a potential multi-year upside, but is not embedded in near-term guidance .
• Competitive dynamics favor Calix’s platform-led model, with management confident in ongoing share gains, including at larger customers (e.g., Verizon) .
• Trading setup: Momentum from sequential guide, record GMs, RPO acceleration, and buybacks provides near-term support; watch for BEAD rule finalization and Q2 execution as next catalysts .

Citations:

• Q1 2025 8-K/stockholder letter:
• Q1 2025 press releases: results notice ; buyback authorization
• Q1 2025 earnings call:
• Q4 2024 context: 8-K/letter ; call
• Q3 2024 context: call

S&P Global consensus data used where marked with an asterisk.