CALIX (CALX)·Q4 2025 Earnings Summary

Calix Hits $1B Annual Revenue Milestone, Stock Falls 13% on Margin Concerns

January 29, 2026 · by Fintool AI Agent

Calix (CALX) delivered record Q4 2025 results with revenue of $272 million (32% YoY growth) and achieved its first billion-dollar revenue year, but shares tumbled 13% over two sessions as investors focused on near-term margin pressure from the company's third-generation platform migration .

On the earnings call, management struck an optimistic tone, guiding to 10-15% growth in 2026 (not at the low end), quantifying BEAD opportunity at $1-1.5 billion, and announcing CEO Michael Weening will keynote at Mobile World Congress in Barcelona — signaling ambitious international expansion plans .

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Did Calix Beat Earnings?

Yes — Calix beat on both revenue and EPS, marking its sixth consecutive quarter of revenue growth .

*Values retrieved from S&P Global

The quarter marked several records for Calix:

• Record revenue of $272M — sixth consecutive quarter of growth
• Record non-GAAP gross margin of 58% — eighth consecutive quarter of improvement
• Record free cash flow of $40M — eleventh consecutive quarter of 8-figure FCF
• Record cash position of $388M
• Record RPO of $385M — up 18% YoY

Full-year 2025 revenue reached $1.0 billion, up 20% year-over-year, marking a significant milestone for the company .

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How Did the Stock React?

CALX shares fell sharply despite the earnings beat, dropping 13% over two sessions — from $56 pre-earnings to $48.73 on 1/29.

The sell-off appears driven by three concerns:

1. Gross margin guidance: Q1 2026 non-GAAP gross margin guided to 56.25-58.25%, down 75 bps at the midpoint from Q4's record 58% due to dual cloud costs

2. Sequential EPS decline: Non-GAAP EPS dropped from $0.44 in Q3 2025 to $0.39 in Q4 2025

3. Elevated operating expenses: OpEx expected to increase in Q1 "primarily related to accelerating the development of AI functionality and capabilities"

CFO Cory Sindelar addressed margin concerns on the call: "In the first quarter, we are operating dual clouds. Once we lift that yoke off, those margins will continue. Ultimately, they probably go past 70% and beyond" .

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What Did Management Guide?

Q1 2026 guidance calls for continued revenue growth but margin compression during the platform migration:

Full-Year 2026 Outlook (from earnings call):

• Revenue growth of 10-15% — "I don't think we'll be at the low end" of the range
• OpEx returning to target model by end of 2026
• BEAD program: $1-1.5 billion opportunity, with shipments "later this year and meaningfully ramping into next year"

BEAD Program Details:

Management provided significant color on the federal broadband funding program:

• 85% of BEAD funds went to fiber-based deployments, only 5% to LEO satellites
• "Fiber has the highest bit rate carrying capacity, a multi-decade life cycle, and the lowest operating costs. In short, it is financially practical to get fiber to the premises."
• Competition exists "between fixed wireless and satellite, not between fiber and anything else"

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What Changed From Last Quarter?

Platform Evolution: Gen 3 Goes Live

The most significant development this quarter was the December 2025 launch of Calix's third-generation platform, with rapid customer adoption:

• 300+ customers already migrated to Gen 3, with another 100 expected next week
• All customer migrations expected by end of Q1 2026
• Full transition to Google Cloud from AWS, enabling global expansion

CEO Michael Weening on the platform's impact: "Think of it as like building a house. The plumbing's done, the walls are in, and now we can actually do what agents are, which is the cool stuff... You're gonna see a very active ramp of our capabilities, and that means the customer value will start to roll in as we go through Q2 onwards."

Business Metrics Trajectory

Balance Sheet Strength

The company also announced a new $125 million share repurchase authorization .

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Key Management Quotes

On entering sustained growth phase:

"As we exit 2025, it also marks the end of the early adopter phase of the market disruption and with demand visibility at an all-time high, our entrance into a sustained growth phase for 2026 and beyond." — Michael Weening, President and CEO

On AI differentiation:

"I would encourage you to look at who's speaking [at Mobile World Congress]. We're in the Architects of AI section. The CEO of Qualcomm, amongst others — these are the leaders in AI. And we're right in the middle of that... There is no one doing what we're doing in this segment." — Michael Weening, President and CEO

On software margins:

"Once we lift that yoke off [dual cloud costs], those margins will continue. Ultimately, they probably go past 70% and beyond. We ultimately don't know what the upper limit is." — Cory Sindelar, CFO

On the promise of agents:

"We can now transition to our success organization saying to a customer: 'Here is the best practices. Here are the yields it can provide. By the way, press the button. This is what the agentic workflow will actually do for you so that you don't have to do the work yourself.' This marks the promise of agents." — Michael Weening, President and CEO

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Q&A Highlights: Tier One Strategy and International Expansion

On the earnings call, management detailed their strategy for expanding beyond regional broadband providers into larger Tier One telcos — a new market opportunity enabled by the Gen 3 platform .

Four vectors to enter Tier One accounts:

1. Enterprise/MDU segment — SMB and multi-dwelling units represent a "significant issue inside every single large customer"

2. Network automation — AXOS platform delivers "80% reduction in operating costs," as proven at Verizon

3. Subscriber experience — Help telcos achieve NPSs "as high as 94" and launch products in "30 days for $50,000 or less" vs. "2 years and $20 million" at large telcos

4. Agentic framework at enterprise scale — "Our architecture is not constrained to our cloud. We can actually take our knowledge and orchestration layer and apply it to an entire business."

International expansion timeline:

• Sales cycles: 18-24 months for large enterprise accounts
• Revenue contribution: "Latter part of 2026 and definitely growth trajectories for 2027"
• Not yet in numbers: "We actually haven't really built [international revenue] into the numbers" for 2026

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What Should Investors Watch?

Near-Term Catalysts

1. Investor Day — February 24, 2026 at the NYSE. Management promised to "go through [AI architecture and growth strategy] in depth"
2. Mobile World Congress — March 2026, CEO keynoting in "Architects of AI" section alongside Qualcomm CEO
3. Gen 3 migration completion — All customers expected by end of Q1 2026
4. BEAD program shipments — "Later this year and meaningfully ramping into next year"

Key Risks

1. Margin compression duration — Dual cloud costs may persist longer than H1 2026
2. Memory cost inflation — Management noted they're "proactively partnering with customers" on potential supply chain impacts
3. Tier One sales cycle — 18-24 months for large enterprise accounts creates revenue timing uncertainty

Beat/Miss History (Last 8 Quarters)

Values retrieved from S&P Global

Key trend: Calix has beaten EPS estimates for 8 consecutive quarters, with the magnitude of beats accelerating through mid-2025 before moderating in Q4 2025.

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Bottom Line

Calix delivered a strong Q4 with record revenue, margins, cash flow, and achieved its $1 billion annual revenue milestone. The 13% stock decline despite the beat suggests the market is pricing in near-term margin risk and a slower-than-expected EPS trajectory.

However, the earnings call revealed several bullish developments:

• 2026 growth of 10-15%, not at the low end as previously guided
• $1-1.5 billion BEAD opportunity with shipments starting later this year
• Mobile World Congress keynote signals international expansion ambitions
• Software margins targeting 70%+ once dual cloud costs end
• 300+ customers already on Gen 3 with full migration by Q1 end

The February 24 Investor Day at the NYSE and March Mobile World Congress keynote will be critical events for management to articulate the AI monetization trajectory and Tier One penetration strategy. For long-term investors, the record $388M cash position, 18% RPO growth, and management's confident tone on the call suggest the fundamentals remain intact despite the near-term sell-off.

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Analysis based on Calix Q4 2025 earnings release, stockholder letter, and earnings call transcript dated January 28-29, 2026.

Related: CALX Company Profile | Q4 2025 Transcript | Q3 2025 Earnings