CALX - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings and welcome to the Calix Second Quarter 2018 Earnings Call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tom Dings, Director of Investor Relations. sir. you, Thank

begin. You may

Tom Dings

as operator joining and on Thank you, Carl afternoon call, Cory Financial Sindelar. good QX XXXX for Russo; CEO, our and Today have you as earnings Chief we Officer, Thank President everyone. well conference the call.

this released to the of a X-K consist This to Investors letter an of is prepared our call website. remarks Calix and of Stockholders in section will reminder, As The as Investor well for Relations Letter this and lieu the question-and-answer stockholders filing of conference the as call afternoon, will audio any we on only. replay the Relations Calix available be in the website. section

Stockholders filed our forward-looking assumes measures in both for discuss strategy on question-and-answer included this and Before please Letter you all will of to non-GAAP we and may quarterly statements. speak turn annual non-GAAP only we up the those operator, call call, outlook, operating differ reports which statements financial to to and and With call our the statements, market and we questions. GAAP the call, and we that we materially statements, today's in obligation session, financial conference could are that remind to Factors by this over results which forth Letter is actual open and in the contemplated to actual respective set to cause start their performance, that, Reconciliation refer forward-looking trends future results to GAAP our Stockholders. want measures. with from Also dates. materially about these growth differ include to make Calix SEC. any to the in no operator update as forward-looking of

Operator

sir. you Thank

Craig-Hallum a conducting Instructions] go Group. Christian comes question from be Our Schwab now [Operator session. first Capital question-and-answer with Please will We ahead.

Christian Schwab

the target. At of the been kind going we of same to what bit revenue you more for would to through revenue us on at $XXX when the expect would that look point And quarterly Can if at And while. start walk have a the if million trajectory? level puts any you we a Great. be that? to takes? a are and -- little -- clarity, reiteration When towards you march

Carl Russo

Christian, thanks for the question.

by I'd what me last back over like and you over let quarter. question So, frame your for moment start in achieved up just a just to the pause go asking going and by to back we

have breakeven. work making at So, we last pleased made might team, we shot that to execution, said, the hard, actually if we with quarter a it at excellent $X.XX. this look, really time, to I And I'm say

by delivered to what of expanding do we with by us came are of back a while allowed new This OpEx numbers growth, and to industry-wide now delivered investment, worked component also to an revenue this, gross so. and and revenue was disciplined TAM shortages. record expansion, go And continue customers, close we all that making came margin growth. we're profit. That way, the through So, driven

to customers, I march and along your this in happened that coming way last starting challenges that begin some reason is up industry, frame with that our that changes think see the right the start, So, year question with the of of to you're largest say with off I now.

the in profit larger a see seen historical we've up over expect my you're QX a view, that we over pattern significant step-up, gross our QX QX way over to saw pattern then, sequentially, to QX, expansion. And a going I QX. step step-up company in as And modestly. QX, so that in think, By revenue you space. the is

you takes step a So, another in down and and QX smaller QX, a there. up seasonality then QX takes from takes big step continue we then QX, over takes large QX step,

the So, as forward. seeing you're we your right now believe to question go I it is, direct answer

Christian Schwab

today. Thank I all That's you. Great. have

Carl Russo

Christian, thanks.

Operator

next [Operator question ahead. Our Stanley. Meta is Instructions] from Please Marshall with Morgan go

Meta Marshall

bit of a CAFX milestones partnership. there I towards back and And into, what talk that market up of, kind the you're guys. to on of new the little if think of, Infosys XXXX? as you're building service could revenue that going drive the any Or in Thanks buildouts? seeing Great. you are that seeing far end And just half? think about on second year you any the in then help traction you could kind wanted might this dive kind second, pop as just, the

Carl Russo

you me offerings start and services with over significant From last first. we our been quarter, last one, obviously So, remember with continuously the continue and the let performance There's last in model. align the all-platform services of margin our revenue, the from hung a quarters. organization gross services improvement quarter-over-quarter to three

part of there our expect backup, don't And together any and be revenues to so that going all speak. to of services controlled is added pop so a to I that's be

Secondly, as in people versus in around the first up some and half the half. industry second slowness questions asked have picking general

I was improve we we it to addition first second makes think base, that, said also But across we've half customer that expect a customers. expect including we've to our what quarter. so been to for clear don't to depressed improve much our that in about the continue largest up second half, the

second to so expected to fashion, trust improve your answers we I but quite linearly continue question. that that So, in

traction the excited yet market. in back that partnership very to in was Co-Creation the As take there far to we're traction, The Infosys' to obviously, the building not it's extent offerings. are that you announcement, and by offerings the as traction, actually

were revenue was from unless certainly asking differently there's standpoint, there a that. something from traction that no So, you

question? that Meta So, answer does your

Meta Marshall

out more customer going into of Infosys question. answers and that personality a the for, they had No, in Yes. buildout, buildout and market so guess, were of -- the and kind being Infosys I maybe that maybe sometimes thought, that I to versus have might use looking started features kind promotional.

Carl Russo

job sure good refreshing everyone, make a -- Infosys and for me let of partnership. let Well, the Co-Creation repeating just I'm doing me

have So, business help Infosys' that deployments product with things take do That would they separate providers to customers to further offerings build or from they it that with chose already to AXOS. where structured service could market. we the

the into Co-Creation would focused AXOS that was So, software that creating components to we partnership go market. take on

Meta Marshall

that's Okay, just helpful. for it me and And then maybe pass last I'll then question on.

services pop-up a of of and were cost On corrections helpful. the services, of why getting that the did the kind business carried that's were that kind of or -- evolutions kind higher and it just margins. and understanding Just business would be is quarter in some this that in made? that consulting sense services that, explains something were Is that better margins revenue made the last

Carl Russo

I Well, contracts range by the our think been so services. this. on and the One two is of factors the we've really driven improvement better and consistent on the team in existing execution continued margins are services by

,that's services So our first the into thing that and and crowd, maintenance now in is, EXOS platforms, then AXOS go that's go attend the we've have thing it, also also that's them the discussed, with second margins. it Calix that having as driving along stream

watch to move going you future continue to irrespective factors. services margins So, other up, of you're as see unfolding the

use not believe, we've those in made use, flattish, inexorably, the towards word margin gross you caution quarter, a merely and clear will we any given word permits the might to in model. to it that That's because but the margins bad just services would I popped XX% head Now, near-term, up. probably be XX%

Meta Marshall

Got it it. pass helpful. that's Perfect, I'll Thanks. on.

Carl Russo

Thanks Meta.

Operator

[Operator Tim next Savageaux Markets. ahead. Please Instructions] question go comes Our from Capital with Northland

Carl Russo

Tim. Hey

Tim Savageaux

dollars, comparisons. pronunciation than one, your here -- afternoon through a been and here. of most wonderful pretty the point the kind for revenue what year? is year? sustainable I think for of, mentioned to a of despite on three earlier gross where profit in assume Something congrats you two of for year revenue XX% service recent think revenue, congrats that's the questions depending revenue good guess, high expected operator the trends by increasing year, really in the the for Hey that first the sorry, understanding consistent right for last and you're, guide. or on first approaching you question -- terms the comparison history. is, QX dollars in you and I is growth of My my trend gross of do impacted name declining call profitability quarters just the What's teens the year-over-year the the kind within QX profit Couple and the

Carl Russo

gross dollars. I it I'd haven't profit have done that. in needle to

on So, for think me a non-GAAP was gross moment. that year? dollar profit last basis What let our a about

Cory Sindelar

I've got million. $XXX

Carl Russo

$XXX million is that right?

Cory Sindelar

my really be so model tragically that That's wrong. could

Unidentified Company Representative

Yes, $XXX.X million.

Carl Russo

you're you're million. essence And for, sort gross asking? profit? looking to $XXX on So, million of of, $XX in Is that what million $XXX

Tim Savageaux

XX% around to guess upward? QX -- some first expect whatever stated, of looking three the dollars. Well, do revenue revenue my I'm you've profit observing margins quarters otherwise trend in that that math my with of here, had continue on magnitude for. along to based you're increase, gross I gross step-up question maybe you In through increase

Carl Russo

Yes, let numbers. I put referring me these odd if see can

I see for can numbers the put if let here. me So, you

to stated, gross in million directly So, get can $XXX Yes. we profit?

Tim Savageaux

onto can the We Right. question move next then.

Carl Russo

those be roughly continually save the No, that for going we I emphasize, out four seasonality. to on want and a metrics moment. continuous in stay believe other will Because to I pieces, are quarter quarter

be our drives to they stops that careful Calix quarter, think they the Verizon about value margins in platforms, but example. had so example, value down shipping careful as customers. didn't. a quarters, know and business, industry or as Cloud, this the what to AXOS I more But in expand in do your now we to And to of you we long-term. margins in quarters, revenue gross you're amount the let just I just some software want got other we Tier to simply old in that be of an We high and might me and that the a about given saw Tim, up, give extraordinarily Now EXOS. shipped margin take to I gross amount expect value expansion going a slightly X, that the what software Well, down. be if be significant direct is And revenue of must is let's and quarter, any our differentiable significant in in don't is, I continuously more have that.

stay we as margin the and just as delivering what to focused we So, our there's I up. on value significant and doing think go platforms, TAM are continues our expanding long in

point, the incremental we what know, gross to like Now, math, gross margin. incremental -- let's XX% be revenue what million in from those $XX.X services increased million careful, performance if you the are software of from is margin and you correct. gross that caution $X reductions, things your do working quarter, That's but that don't this to your XX% also I systems profit. improvements but want coming the only other delivered directionally, I million, improved some some, incremental sure we're because I of incremental $XX coming the mix, and by on cost make team they're statement not from

the all I So, for but sorry think the contextually, direction was exactly right. I you've words got

Tim Savageaux

And concentration. terms inflowing maybe question. of, In Verizon be QX of QX very in kind part overall the having and in the letter as puts customers comment, if don't, quarter flat want and was interesting. that, ask that but to and sort of it's did my a might up I of and to I the XX% No, guide customer takes here, next what leads there? the to about shareholder to

Carl Russo

let's-- so Okay,

Tim Savageaux

or international or what have category customer you? our Either

Carl Russo

directly me the going challenge revenue of caution The inventory product that deal oriented. don't we're see going address are that more bit extension to make a there we of revenue through But is caution shortage sets. Yes, components within let on edge in we little so Especially is product but and straight on sets struggled away an what premises side QX. the a side. it, subscriber investments our to those with worldwide some additional that run the

that's And that grappling piece we're so with. the

greater, is, question, that. of, your less to -- significant significant, mentioned than XX% like material words old or directly sort I is these As so there's

that we've shipments So, a about. letter large significant X talked we our to Tier made

customer, understand folks internally we're just so one our XX% is have traditional seeing customer improving. that surely I work, that's work the We've consistency to addition, visibility past, with allocation about company more finalize frankly they of and that their XX% to thing but processes capital talked from changing new we're think, In and in start had we only strategy. now, really, is customer the the the to they seeing how as AXOS inside slowly

Does the happening it's there. have so as indicated that And by we see we're what directionally a before same we help? and excited

Tim Savageaux

a can I last was at sure I XX What I'm new growth And It XX looking comparable of point, I the believe among it and for of, I there. was want question is was think does. starting compares X metric right, able address I make think wonder last quarter? to that it to as And overall AXOS smaller kind operators? the, me. I I'll customer and in find is base, that quarter Tier with trends kind if you customer leave this

Carl Russo

let glad you're want the -- So, to breeze I leave that to picking hanging I'm out. want -- the make you I don't me sure with in that I wrong conclusion. But

separate of couple a So, things. let me

AXOS which in specifically specifically XX, than speaking the it's On on the on customers, functionality it. actually, the GPON EX-X, more XX AXOS delivery to took is on

system the EX-X functions. AXOS probably in America have That's what more customers we referring most GPON to. performing than deployed AXOS are that's North EX-X, So, now and the widely being the running on XX

referring was opened new last actually XX we XX, quarter, customers. As you're for which to

This at pace. at a and quarter, fact record us new just address we platforms I start all segments, that accounts expansion, opened was the XX allowing us we that to open mentioned to the that different have TAM allow

they're that Does So, numbers. different really help? two

Tim Savageaux

Thanks. it it. on. I'll got Yes, pass

CarlRusso

you. thank Tim, Great.

Operator

Gentlemen, like you. Dings Tom over [Operator this back further there Mr. closing Thank at are turn comments. floor would no the I questions registered Instructions] time. to for to

Tom Dings

our for you, everyone the This you Goodbye to again, Thank this webcast and now. call. joining in your for operator. for interest thank Calix, Once call on on us concludes thank today. and conference you

Operator

This teleconference. concludes today's

Thank your and for participation time. this day. pleasant at you lines your a have disconnect may You

Calix (CALX) 7 Aug 182018 Q2 Earnings call transcript