Release Details

Calix Reports Second Quarter 2017 Financial Results

August 8, 2017

PETALUMA, Calif., Aug. 08, 2017 (GLOBE NEWSWIRE) -- Calix, Inc. (NYSE:CALX) today announced unaudited financial results for the second quarter ended July 1, 2017. Revenue for the second quarter of 2017 was a record $126.1 million, an increase of 17.4% compared to $107.4 million for the second quarter of 2016.

“Continued customer investments in broadband access led to record second quarter revenue, increasing by more than 17% compared to the year ago period and exceeding our expectations,” said Carl Russo, Calix, Inc. President and CEO. “Our transformation continues as we continue to experience strong demand for our AXOS platform which for the 9th consecutive quarter achieved double-digit growth in new customer adoption. We continue to transform our services business, which experienced higher than expected costs associated with previously-awarded turnkey network improvement projects. This led to the lower than expected earnings and we will sharpen our focus on driving increased efficiencies in our services business,” added Russo.

The GAAP net loss for the second quarter of 2017 was $19.0 million, or $(0.38) per basic and fully diluted share, compared to a GAAP net loss of $5.8 million, or $(0.12) per basic and fully diluted share, for the second quarter of 2016.

“The higher costs associated with previously-awarded projects in our services business are expected to persist over the near-term as activity levels remain elevated to close out these previously-awarded projects and meet customer requirements,” said Cory Sindelar, Calix, Inc. Interim CFO. “With our increased traction in the market, we remain committed to investing in our next generation technologies led by AXOS and Calix Cloud,” added Sindelar.

The Company’s non-GAAP net loss for the second quarter of 2017 was $15.3 million, or $(0.30) per fully diluted share, compared to a non-GAAP net loss of $2.0 million, or $(0.04) per fully diluted share, for the second quarter of 2016. Reconciliations of our operating results and loss per share from GAAP to non-GAAP are provided in this release.


Calix is providing forward-looking estimates for third quarter and full year 2017 results as follows:

Third quarter 2017

Revenue $126.0 - $130.0 million, representing growth of 4.0% - 7.3% year-over-year
Non-GAAP Gross Margin 36.0% - 39.0%
Non-GAAP Operating Expense $59.0 - $61.0 million
Non-GAAP Net Loss Per Share           ($0.27) - ($0.21)

Full year 2017

The Company is reiterating its prior guidance for full year 2017 revenue guidance projecting revenue growth of 10% or more relative to 2016. Full-year 2017 Non-GAAP earnings guidance is revised, and the Company now expects to report lower 2017 Non-GAAP earnings relative to 2016.

The Company estimates that GAAP EPS will be approximately $0.08 lower for third quarter of 2017 and approximately $0.40 lower for full year 2017 due to the inclusion of stock-based compensation, amortization of intangibles and restructuring charges. A reconciliation of the GAAP to non-GAAP outlook is provided in this release.

Restructuring Plan

In March 2017, the Company adopted a restructuring plan that seeks to realign the Company’s business to increase its focus towards its investments in innovative Software Defined Access systems and software, while reducing its cost structure in the traditional systems business. The Company has recognized restructuring charges of approximately $1.7 million for the six months ended July 1, 2017, consisting primarily of severance and other one-time termination benefits. Throughout the remainder of 2017, the Company intends to take further actions under this plan and expects to incur total pretax charges of up to $6.8 million for the full year related to this plan. These actions are anticipated to result in annualized cost savings approximately equal to the total charges incurred. The Company expects to see cost reduction benefits as a result of these charges starting in fiscal 2018.

Conference Call

In conjunction with this announcement, Calix will host a conference call at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) today to discuss its second quarter 2017 financial results. A live audio webcast and replay of the call will be available in the Investor Relations section of the Calix website at

Live call access information: Dial-in number: (877) 407-4019 (U.S.) or (201) 689-8337 (outside the U.S.)

The conference call and webcast will include forward-looking information.

About Calix

Calix, Inc. (NYSE:CALX) pioneered Software Defined Access and cloud products focused on access networks and the subscriber. Its portfolio of Intelligent Access systems combines AXOS, a revolutionary software platform for access, with Calix Cloud, innovative cloud products for network data analytics and subscriber experience assurance. Together, they enable communications service providers to transform their businesses and be the winning service providers of tomorrow. For more information, visit the Calix website at

Forward-Looking Statements

Statements made in this press release and the earnings call referencing the press release that are not statements of historical fact are forward-looking statements. Forward-looking statements are subject to the “safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to, but are not limited to, statements about potential customer or market opportunities, opportunities with existing and prospective customers, estimates and planned cost savings related to its restructuring plan and future financial performance (including the outlook for third quarter of fiscal 2017 and full year of 2017). Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including but not limited to fluctuations in the Company’s financial and operating results, the capital spending decisions of its customers, changes in regulations and/or government sponsored programs, competition, its ability to achieve market acceptance of new products and solutions, its ability to grow its customer base, fluctuations in costs associated with its products and services including higher costs due to project delays and changes, cost overruns and other unanticipated factors, as well as the risks and uncertainties described in its annual reports on Form 10-K and its quarterly reports on Form 10-Q, each as filed with the SEC and available at, particularly in the sections titled “Risk Factors.” Forward-looking statements speak only as of the date the statements are made and are based on information available to the Company at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. Calix assumes no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not place undue reliance on any forward-looking statements.

Use of Non-GAAP Financial Information

The Company uses certain non-GAAP financial measures in this press release to supplement its consolidated financial statements, which are presented in accordance with GAAP. These non-GAAP measures include non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net income (loss) and non-GAAP basic and diluted income (loss) per share. These non-GAAP measures are provided to enhance the reader’s understanding of the Company’s operating performance as they primarily exclude certain non-cash charges for stock-based compensation, amortization of acquisition-related intangible assets, restructuring charges and acquisition-related costs, which the Company believes are not indicative of its core operating results. Management believes that the non-GAAP measures used in this press release provide investors with important perspectives into the Company’s ongoing business performance and management uses these non-GAAP measures to evaluate financial results and to establish operational goals. The presentation of these non-GAAP measures is not meant to be a substitute for results presented in accordance with GAAP, but rather should be evaluated in conjunction with those GAAP results. A reconciliation of the non-GAAP results to the most directly comparable GAAP results is provided in this press release. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.


Calix, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
        Three Months Ended   Six Months Ended
        July 1,   June 25,   July 1,   June 25,
        2017   2016   2017   2016
  Products   107,348     100,144     198,953     191,824  
  Services   18,775     7,281     44,688     13,976  
    Total revenue   126,123     107,425     243,641     205,800  
Cost of revenue:                
  Products (1)   58,299     51,501     115,672     99,194  
  Services (1)   24,501     5,918     50,269     11,118  
    Total cost of revenue   82,800     57,419     165,941     110,312  
Gross profit   43,323     50,006     77,700     95,488  
Operating expenses:                
  Research and development (1)   32,950     25,033     66,758     47,806  
  Sales and marketing (1)   18,429     19,213     40,858     38,275  
  General and administrative (1)   9,701     11,641     19,958     24,325  
  Amortization of intangible assets               1,701  
  Restructuring charges   957         1,656      
    Total operating expenses   62,037     55,887     129,230     112,107  
Loss from operations   (18,714)     (5,881)     (51,530)     (16,619)  
Interest and other income (expense), net:                
  Interest income, net   54     97     148     194  
  Other income (expense), net   (151)     82     (81)     115  
    Total interest and other income (expense), net   (97)     179     67     309  
Loss before provision for income taxes   (18,811)     (5,702)     (51,463)     (16,310)  
Provision for income taxes   177     124     850     245  
Net loss   $ (18,988)     $ (5,826)     $ (52,313)     $ (16,555)  
Basic and diluted net loss per common share   $ (0.38)     $ (0.12)     $ (1.05)     $ (0.34)  
Weighted average number of shares used to compute                    
  basic and diluted net loss per common share   50,019     48,371     49,772     48,478  
(1 ) Includes stock-based compensation as follows:                
  Cost of revenue:                
    Products   $ 96     $ 128     $ 212     $ 218  
    Services   75     55     131     92  
  Research and development   1,122     1,099     2,448     2,146  
  Sales and marketing   654     840     1,765     1,662  
  General and administrative   831     846     1,762     1,571  
    $ 2,778     $ 2,968     $ 6,318     $ 5,689  


Calix, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
           July 1,          December 31, 
    2017   2016
Current assets:        
Cash and cash equivalents   $ 37,294     $ 50,359  
Marketable securities   12,915     27,748  
Accounts receivable, net   53,392     51,336  
Inventory   39,572     44,545  
Deferred cost of revenue   40,094     34,763  
Prepaid expenses and other current assets           11,112     10,571  
 Total current assets   194,379     219,322  
Property and equipment, net   17,959     17,984  
Goodwill   116,175     116,175  
Intangible assets, net       813  
Other assets   811     1,181  
    $ 329,324     $ 355,475  

Current liabilities:        
Accounts payable   $ 27,840     $ 23,827  
Accrued liabilities   72,662     69,715  
Deferred revenue   41,847     27,854  
Total current liabilities   142,349     121,396  
Long-term portion of deferred revenue   21,104     20,237  
Other long-term liabilities   638     878  
Total liabilities   164,091     142,511  
Stockholders’ equity:        
Common stock   1,390     1,368  
Additional paid-in capital   840,931     836,563  
Accumulated other comprehensive loss   (464)     (656)  
Accumulated deficit   (636,638)     (584,325)  
Treasury stock   (39,986)     (39,986)  
Total stockholders’ equity   165,233     212,964  
    $ 329,324     $ 355,475  


Calix, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
    Six Months Ended
         July 1,            June 25,      
    2017   2016
Operating activities:        
Net loss   $ (52,313)     $ (16,555)  
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:              
Depreciation and amortization   4,929     4,131  
Loss on retirement of property and equipment   80      
Amortization of intangible assets   813     4,178  
Amortization of premium (discount) relating to available-for-sale securities   (3)     233  
Stock-based compensation   6,318     5,689  
Changes in operating assets and liabilities:        
     Accounts receivable, net   (2,056)     (1,963)  
     Inventory   4,973     6,906  
     Deferred cost of revenue   (5,331)     (1,894)  
     Prepaid expenses and other assets   (156)     1,394  
     Accounts payable   3,731     (5,859)  
     Accrued liabilities   2,962     9,012  
     Deferred revenue   14,860     323  
     Other long-term liabilities   (241)     (207)  
         Net cash provided by (used in) operating activities   (21,434)     5,388  
Investing activities:        
Purchases of property and equipment   (4,715)     (3,078)  
Purchases of marketable securities   (8,732)      
Sales of marketable securities   5,051      
Maturities of marketable securities   18,516     11,670  
         Net cash provided by investing activities   10,120     8,592  
Financing activities:        
Proceeds from exercise of stock options   29     14  
Proceeds from employee stock purchase plan   673     2,905  
Payments for repurchases of common stock       (12,809)  
Taxes paid for awards vested under equity incentive plan   (2,630)     (1,547)  
         Net cash used in financing activities   (1,928)     (11,437)  
Effect of exchange rate changes on cash and cash equivalents   177     (124)  
Net increase (decrease) in cash and cash equivalents   (13,065)     2,419  
Cash and cash equivalents at beginning of period   50,359     23,626  
Cash and cash equivalents at end of period   $ 37,294     $ 26,045  


Calix, Inc.
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands, except per share data)
    Three Months Ended   Six Months Ended
         July 1,             June 25,             July 1,             June 25,     
    2017   2016   2017   2016
GAAP net loss   $ (18,988)     $ (5,826)     $ (52,313)     $ (16,555)  
Adjustments to reconcile GAAP net loss to non-GAAP net loss:                      
Stock-based compensation   2,778     2,968     6,318     5,689  
Amortization of intangible assets       814     813     4,178  
Restructuring charges   957         1,656      
Acquisition-related costs       76         351  
Non-GAAP net loss   $ (15,253)     $ (1,968)     $ (43,526)     $ (6,337)  


Calix, Inc.
Reconciliation of GAAP to Non-GAAP Loss per Common Share
    Three Months Ended   Six Months Ended
         July 1,             June 25,             July 1,             June 25,       
    2017   2016   2017   2016  
GAAP net loss per common share, basic and diluted   $ (0.38)     $ (0.12)     $ (1.05)     $ (0.34)    
Per common share adjustments for:                  
Stock-based compensation   0.06     0.06     0.13     0.11    
Amortization of intangible assets       0.02     0.02     0.09    
Restructuring charges   0.02         0.03        
Acquisition-related costs               0.01    
Non-GAAP net loss per common share, basic and diluted   $ (0.30)     $ (0.04)     $ (0.87)     $ (0.13)    
Weighted average number of shares used to compute                  
non-GAAP net loss per common share, basic and diluted        50,019     48,371     49,772     48,478    


Calix, Inc.
Reconciliation of GAAP to Non-GAAP Outlook
(Unaudited, in thousands, except per share data)
Three Months Ending September 30, 2017
Outlook                GAAP                Stock-Based
Gross margin   35.9% - 38.9%     0.14 %     0.00 %   36.0% - 39.0%
Operating expenses   $ 63,200 - $ 65,200   $   (2,700)     $   (1,500)     $ 59,000 - $ 61,000
Net loss per diluted share         $ (0.35) - $ (0.29)   $ 0.05     $ 0.03     $ (0.27) - $ (0.21)


Calix, Inc.
Reconciliation of GAAP to Non-GAAP Outlook
Outlook   Year Ending
December 31, 2017
Estimated per common share adjustments for:    
Stock-based compensation   $ 0.24  
Amortization of intangible assets   0.02  
Restructuring charges (1)   0.14  
Total GAAP to non-GAAP net loss per common share adjustments         $ 0.40  

(1) In relation to the restructuring plan for fiscal 2017, Calix currently estimates that over the course of 2017, it will recognize to its GAAP financial results an amount up to $6.8 million consisting primarily of severance and other one-time termination benefits. These charges are primarily cash-based. Calix recognized $1.7 million of these charges during the first six months of fiscal 2017 with the remaining amount to be recognized during the rest of the fiscal year.


Investor Inquiries:

Thomas J. Dinges, CFA



Source: Calix, Inc.