0001406666-25-000045
SEC filingRevenue surged 32% YoY to $265M, gross margin expanded 250 bps to 57.3%, driven by broad-based growth and platform mix.
For the three months ended September 27, 2025, Calix reported revenue of $265.4 million, a 32% increase from $200.9 million in the same period of 2024. Gross profit rose 38% to $152.0 million, yielding a gross margin of 57.3%, up 250 basis points from 54.8% a year ago. The margin expansion was primarily attributed to the continued growth in the company’s platform, cloud, and managed services offerings, which carry higher margins. Net income was not explicitly disclosed for the quarter, but operating cash flow for the nine months improved to $88.9 million from $53.0 million, reflecting a return to profitability.
Revenue growth was broad-based across all customer segments. The large-customer segment saw the most dramatic increase, more than tripling to $34.7 million, driven by a North American customer increasing capital expenditures and a reclassification of a small customer after acquisition. Medium-customer revenue grew 26% to $30.2 million due to higher shipments, while small-customer revenue increased 20% to $200.5 million, as broadband service providers (BXPs) focused on adding subscribers. The small segment remains the largest contributor, accounting for 75% of total revenue.
Calix expects investment in sales and marketing to increase in absolute dollars but decline as a percentage of revenue as the company continues to land new customers and expand its platform. Research and development expenses are expected to rise in absolute terms and as a percentage of gross profit in the near term due to accelerated development of AI functionality. General and administrative investments are expected to remain fairly constant and decline as a percentage of revenue. The company faces headwinds from tariffs and the DDR4 to DDR5 memory transition, which could increase costs, but it believes existing cash and cash flows will be sufficient for at least the next twelve months.
CFO of $88.9M significantly exceeded net income of $10.7M, indicating high earnings quality driven by non-cash charges (stock-based compensation $66.0M, depreciation $13.3M) and favorable working capital changes (notably accounts receivable improved by $8.1M vs a prior-year use of $40.8M). Capex of $13.7M was moderate at 15.4% of CFO, leaving ample cash generation. The company deployed $77.0M on share repurchases, well covered by CFO. Investing activities were nearly neutral ($0.9M net use) due to active marketable securities management. No dividends were paid. The large swing in financing cash flow reflects increased repurchases and higher stock issuance proceeds ($40.8M) from employee plans. Overall, cash flow generation is robust.
Working capital swings normalizes year-over-year: prior period had large outflows from AR and inventory, now reversed. No one-time tax payments noted.