Calix (CALX) 28 Apr 212021 Q1 Earnings call transcript

Company Profile

Participants

Carl Russo	President & CEO
Cory Sindelar	CFO
Michael Weening	President & COO
Tom Dinges	Director, IR
George Notter	Jefferies
Paul Silverstein	Cowen & Company
Michael Genovese	WestPark Capital, Inc.
Ryan Koontz	Needham & Company
Tim Savageaux	Northland Capital Markets

Call transcript

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Operator

Greetings, and welcome to the Calix First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. It is now my pleasure to introduce Tom Dinges, Director of Investor Relations. you. Thank

begin. may You

Tom Dinges

Cory and quarter everyone. on XXXX CEO, Financial we Operator, Operating and joining Michael Officer, the you our have Weening. Officer, Chief Russo; first earnings Carl and good you, President Thank Chief morning, for call, Sindelar; Thank call. Today

will released section This filing, reminder, as as yesterday, we on close available of stockholders website. to be the of the a letter replay call the in Investor Relations the audio well conference Calix section As Relations market, Calix Investor in after our for an X-K website. the of

to that, call is on over in included Carl. measures statements, of our no let GAAP to this the stockholders. growth Before measures. annual results and statements non-GAAP strategy, to we and differ Carl for could remind we first this to future SEC. stockholders, speak those assumes financial filed any contemplated make we quarterly results call, I stated Factors will statements, obligation trends call, conference Carl? these their and performance, Reconciliation we set XXXX his materially Unless will want to letter as in which forward-looking to and in cause are to GAAP with and from Calix over that forward-looking may I only me of non-GAAP call, that respective about this our remarks, dates. and forward-looking otherwise turn materially, the update financial reference forth measures. operating you refer statements. letter outlook, on and call by all the actual reports non-GAAP brief include quarter to to opening in turn our actual With Also, market both discuss our differ which

Carl Russo

the how pandemic, home we due Thanks, our by year begin from much investments shift work to and new the from Tom. the platform questioned to accelerate, we was ago, of driven in much our business One and saw how growth offerings.

comfortable more the all-platform to offerings. uplift As an the in was due that majority became progressed, year our we

no While while most our there visibility a revenue challenge. we inventory across regions In of robust success a across for is we the saw exceed and quarter, path the supply quarter us improve, of of and to outperformed again support to we swelling much the work XX% business, be is grew now remain been in pandemic. our remain guidance continues can this by had to our the driver limitations see And our strong enabling pandemic growth our customers. substantial and clear, build serve, to platforms the done, XX% It last the bookings with quarter. Calix our four where year-over-year, were have we we ending again, largest quarters. strength customers, the the We, to

silicon stretched and out year. weeks, with the this throughout supply times to expect a weeks of well remainder challenge lead in from some However, we XX year, next cases, into be to XX

also remain we on positioned tight. to keeps well the to As This focused on us team, we continue ahead. our in invest capitalize continue opportunity keeping our growing culture to

call their that, let execute and the With mission, open value. for their to help strength We Daryl? their process businesses, grow on customers our maturity questions. and our financial to have subscribers, simplify us the the excite

Operator

you. Thank

you. a Instructions] session. question-and-answer now thank [Operator will be conducting We

of questions Notter comes from Jefferies. question. Our proceed with first the your George with Please line

George Notter

three months time or guidance. changed to I'd chain great the click the guys last much, lead results I double mind. updated love guess, any Hi, like have start situation, guys. what's on and on Thanks in component and congratulations to would on you guess, commentary by your dynamics. seeing just I very supply if over commentary I the new

Carl Russo

So, said risk day, half. we It my in the the a downside this our a business. expect second prepared challenge and struggle comments, biggest is George, as the I on to every it in remains to be

and four XX of - created some to some But is furthermore, he's lead And ago, back color which remember, out second went well. to sort And as what goes add actually his that weeks, Michael? from ask color on the add what Cory like Officer. months from as President on XX times a to the and Michael in then you ask Operating the to I'd do on, As work Chief seeing come half. perch afterwards divot some

Michael Weening

Thanks, Carl.

chip, team a at is probations be now that in QX. of we on, would pop mentioned, used we all was some the would big look shifting that that are bit which because up and our beyond chips it have, quarters, focus As the area $X,XXX be an surprise, And we the market future can just $X.XX seeing components, supply as outperformed the where to be he chip. to focus in that in that could we're a it a on

the we will where we dividends. so, on look forward pay And go all supply and the process, that's as focuses data chain, at and and analytics

we've supply meet to CommScope something that other Dell large have who and of teams, but and supply see has an that we we out have added is invested in successful hires really a industry-wide chain chains. happy be multi-billion over as challenge I will quarter about the it every able QX one-off long-term, we'll in and and happen on over it. long-term. ready ARRIS. team companies, year from multiple expect to run the longer one who other our quarter from folks dollar so scenario. the with last that to bulked we're comes in QX We that had, the focus challenges it we’re we're to that say Jerry face will He Cederlund, the no And that, joined just really along and the It's we've is, QX

Carl Russo

Cory?

Cory Sindelar

XX weeks. that George, silicon out we Michael. last from to XX mentioned Thanks, quarter pushed weeks some significant

highlight still of kind better of the we half we though performed a up a fourth the - quarter near because divot the this that quarter. or term a in kind took over even and right ultimately kind creates just half here in hole guidance, of of back back our second skipped Just year, it

to work problem. continue We that

we also still a as think of the said, next this will So, than broadening chain - half we a harder the supply we second see set Michael half. greater components. challenge And be first think

every challenges new seeing we're So, day.

And on to get say Got the in on And terms have can up there anything you to to supply about and follow can quarter, talk weren't results? how just We impacts revenue or of you the margins quarter? in you to the it. also work that, gross then up chain on problem. much impacts ship continue in able is QX the

Cory Sindelar

on you I know. are Carl, We don't can't mute? Carl. hear

Tom Dinges

get the Carl, while line. dialing is Operator, back are you on stand self-muted? Carl back Okay. we Carl by Everyone, please in.

now back online. He’s Okay.

Carl Russo

hear Okay. now? Can you me

Tom Dinges

Yes, we can.

Carl Russo

what Not Okay. happened sure there. My apologize. I apology.

at staying went George, quarter. good the the with in work on do customers, demand. our that So, is sort our very job of success a of the the we and We our look focus when actually do actuality of on, work all in you customers that with

We been in pushes into can guidance, any seen wasn't work there feel throughout QX a the QX. like you've with demand. result supply And So doing team is pulls the QX or that more quarter. the and what we has really of in the

challenges point, the difficult supply supply is mean, the your have out. to our setting that do, by strong to has to bound So, the I and chain but have. what made actually expectation we forecast demand, it is we

or so, And good pulls. do in quarter, pushes in the we QX. question, a significant to hope And the really no same obviously it's there's

On us side, a it this predict to little difficult of caught margin well. it more And bit. things the in sort also makes quarter, as

that So, cover you Cory, one, maybe want to please?

Cory Sindelar

that. were Inside gross line, drivers over-performed the sure. two quarter, Yes, on clearly we there margin really and for the

in products anticipating ship of to The second is some we one we that or the was didn't be margin We margin systems really originally by quarter logistics component the mix. received than some around QX quarter, these First of inside more their in shortages the products and that had it, delays. ship reach of significantly, QX. in higher port not due shipped quarter. destination None of system will product were the due for end to did result lower

now impact freight. The around on second first probably the has and quarter to carry do larger margins, had really

from established we've freight that supply costly chains lower our shipments partnership the costs. of pandemic, freight, resulting ocean-based well air as able projected our transit, inbound the customers more as than and towards away by outperformance with were to ship With in throughout team, our the we

all point have in We shipping air continue the on elevated, rates expect we that and from an have able of out and impact away margin. continue to would second to to also they move higher transportation that be from gross will freight quarter, remain but that options, I we'll kind

longer we're we're lead what With paying seeing to spot have the premiums. broadening times, chips of is, or going to move market the to with

have still to objectives PPVs customer. meet our to satisfy struggle with and we supply our So,

best our reflects margin. estimate items time this these of So, gross at our guidance George, QX on all

George Notter

Thank Great. you very much.

Carl Russo

George. Thanks,

Operator

you. Thank

from questions the with your next Our Cowen. of come line Paul proceed with Please questions. Silverstein

Paul Silverstein

hard shortcoming, but a let with good previous big a question. ask. one, to I not the of such doubt, but that's in all quarter, time yours, confused a you my responses number give No to am Not the that by me

not would revenue been and Cory could growth you're let I have not better, were I more for I be heard little just higher alone products margin full not to products. So, that you at lower swear They lower but ship better, constraints. your margin some products. for didn't assume you customers could the ship assume impacted. with higher happen They products. saying margin, didn't much all But I which more but supply gross And your those helped pay bit margin you margins, gross margin, a function say

your inability have lower for that impacted margin, I didn't fact the but components? think Would revenues? that say if wouldn't to understand those you been your have of ship benefits in I products margin commonly, much case, that but the revenue So would your for better, have you adversely was gross which

Carl Russo

Yes.

it, if simplify understand way conflation can And was Paul. the the Let juxtaposed. I sentence I because me of the actually see

way customer. words as key was, one a your with actually there's of happy where The said to revenue. things to but reach actually the I their direct items customer attention freight to be the we in got big is two The for not So, back the in time would that them, challenges, that essence they destination morning. that was the in did shipped recorded Cory

of it And referring will freight issue That so, happy, was issues margin And tell placard. across of mix but stuck sort is the mixed I could we everything was one to. got is do. particular lower you, The that product. we customer a the in did the Cory that

get you helps the that if see and confusion. two those through intersect just me let So,

Paul Silverstein

had So, got had been if it if your margin or on it have revenue been would have lower? would time, higher, arrived there - your

Carl Russo

Correct.

Paul Silverstein

Okay.

Let me move on.

Carl Russo

the And welcome to Canal. Suez

Paul Silverstein

two, are growing number the that number improved question to Was three. a ask interpreted in assume, translates of ship inventory a managing inventory buildup inventory, in than your bit providing the from your least accounts the in not that's comments Has observed try you, the reconcile broadening times what also incentives, an had giving their or portion by case, demand you to you if you, ask doing confidence? against increasing way, of - the I continued in at I and quarter supply me relative long-term the is a of buildup I which better some lead giving you but to the high your last presented for of also And if that job extended insight you demand, not times. I the about against little challenges visibility your over stocks? and want ability ability which more So constraints. that to the to a typically just lining more Carl, already ship silver who terms into turn, much visibility customers as And and XX-week about let quarter in you're the your lead and customers plans, to significant - just

Carl Russo

actually you question, believe breadcrumbs your part in or not, in if So of of, your the it answered track you question your sort question.

can I tie you. And me if so, for see out that let

into relationships platforms success-based, we've as our outcomes are their we we're customers, delivers years software discussed, XX better the those building and and stickiness of for getting our view As increasingly of a these customers, increases with businesses. better as

supply. we're sort of with may is figure what now orders. planning, So, may envision to after of or challenge, supply. trying out it's not. that us comes which fulfill understanding better most not In how be run working It have a with trying Then to It's cases, but them. second more we the to now

In world it's box of wouldn't of you you ship an counterintuitive. So, sort business, inventories. sort - could build old

you we're are brought as our in but You’d because just is, OEM building essence things everything we be visibility from players, inventories, do, in what to in. while help cetera, out raising components the combined, going et chain chasing be shipping component able still standpoint. also of our the the to number a predictability future, is All those one predictability. demand actually we're to for laying issue the we're and supply supplier

to if So, And chime for let that I and Cory in if and me for just Michael but question. that answers a to see may see moment it your stop there explains I in, want ask you. here

Paul Silverstein

I'll now. for revisit Yes, offline. it's good enough

Carl Russo

Okay.

Tom Dinges

Paul. Thanks,

Operator

instructions]. [Operator

with WestPark Please proceed questions. next from Genovese your the Capital. Our come with Michael of line questions

Michael Genovese

to on call. Good the conference much. very Thanks be Great.

did, So, about out-performance expected. the supply as was XQ was you're there you chain and saying guys

you So, me, in have clearly sold that customers services hardware already licenses sold means that to more to place. and more

And the sounds so, and me, least like about what that's part do land And story. I'm mean, have we are hardware. wondering the a about to (indiscernible) it metric? is, interesting I

following what track and should we to land expand? be So,

Carl Russo

Yes.

side So, for this And land already is hear welcome times. you're Mike. call, story is everyone on first expand you look heard call many the probably what would Thanks the else has to on to in of all, for and about coming It what now a story. traditional board.

have we point to don't that that. this in to you the mix see a you but break for purposes, we at future is you expand. the comments best thing it gross can mix the to So, And do do the literally the out. to. any Cory, we else if know, shifts, where point the there's to you're There as - don't tell going like you'd be I nothing I - we way margins competitive that, may can add point,

Cory Sindelar

Yes.

I I add of in around growth you only some points terms where quarter customers added. that comment think of every the we've on provide bullet also the some seeing we is, would of the rates breadcrumbs you're

gives land of part an and around So some that the indication equation, that it kind of metrics of of expand our landing the you platforms. and

Michael Genovese

Okay. Great.

this, you get points into well this first to I on about upper ever - XXX an to future put margin, I XXX thought you mean, the So, we have an want guys XX%? to year, bound? bound into about is we mean, Or basis not on there talk until the do want to upper

Carl Russo

year, still Any those that XXX the and as time to come dig are high, home, then really it's it for is the mix you'll in we the Right. we in different this quite if and cows talked sensitive the the bottom a things the problem XXX future different, So can And - the but deliver comments you me until the as streams learn the be the to bound? from We've asked very on talked points, fight don't and know. but been the you or is, last yes. hoping we to we've trenches. obviously in XX% quarter? was basis asked, is to business, upper growth to question there an been answered XX% simply call, run business revenue business, revenue we've line. more, above And last enough and can so after also on the going the modeled about we've to We’ve have don't get of about just, updates be that margins

Carl Russo

Yes.

on to on a comment margin. gross going I'm I'll So, to give and piece Cory growth, the revenue the ask then you quick just

Then over least nearly half you revenue QX sort on this we're that run XX%. by On given level grow And that that would simply quarters, got I'll had the in could the comment growth which year if grow we year Last I we to QX obviously, other of the bottom and last at range seeing no X%. standpoint, - of components, said, the will with we Street demand. grow a few comfortable put XX%. and this end could guidance, the our get of look now we this it could signal where thought if we And we the do make we piece, got you quarter said, at from performance could the at the work keep second at lot would what we numbers we to XX%. into, saying way, component today, the we've on, numbers than of of we're

increasingly this comfortable global seeing it's we demand, by So tempered progression chains. get the with supply you're as but

we until this now, it model at to year. We're ago the right Day a the for to from look model. go year XX% change as ready Analyst going we're the change So a from not

So, we'll XX% stand growth. pat to on the X%

On Cory, the margin, you the gross on, one XXX that to XXX points why in don't please? take

Cory Sindelar

on you Last - target with comfortable bargain to the gross recall were line to will our we model. more over-performance year. basis margin improvement first increase get gross in financial that be for we and provided this getting XXX think quarter we Yes. target challenging of the model guidance said second, to would financial quarter, the our we it’d our we that might But XXX achieve we for for

Michael Genovese

questions the on is. answering and exciting the story for much so Thanks Okay. congrats how

Carl Russo

it. Mike, welcome aboard. We appreciate

Operator

Thank you.

comes Securities. Koontz question your the with from Rosenblatt Please next Ryan line proceed of with Our questions.

Ryan Koontz

right. All

update obviously bit, systems now. to but a their up them they So, need need

and fiber here software installation obviously the less still typical and but on that thing. sort customers deal dependence hardware question with on seasonality. the guide weather So, and your restrictions, more and weather of and of there's Obviously, content

in purely you number CPE? of you. outside two, there And higher Thank with - view you - qualitative number are it and more behavior there share kind we in to thoughts It of not or a software year, it this a faster mix seeing some the is question, one? would should customer Can your a business how seasonality release great. is is not relates if budget be new So, a applications, as quantitative, change plant, on software seasonality? thoughts, content,

Carl Russo

going success address in really talk going - future, I'm the seasonality drives our our to Michael but to on about to in the piece, customer Yes, what that's chime ask I'll because I'm focus us. and

to the going about you Needham, So, on talk with and us come to Ryan, our working expand as customers succeed. you're at board hear and land

in past so of we think business any the is market but our very those sense to this to than a help slowly “budget we said if because customers’ more of connected seasonality. decreasingly have to this wouldn't on, of expect things, you for that but year Michael, that. the business, subsequent much whether share is? and going market we the is And not little year and Ryan a Obviously, But focused of last the years, seasonality or since moment, to telecom mind year an pandemic We of get our a to because are the have the business their we it's future which lose flush” the opposite went relating fiber, exactly traditional surely bit our share, powerful representative outcomes. unusual be that how was

Michael Weening

actually that their subscribers, things. where fiber and in with ago, and a you way three where, and And customer acquisition what out working started them as we've invested the and of into how customers? our we that ARPU, to seen is model, moved in years that the that insights significantly organization great reduction identify, once a as customers and our evolution platforms, last do where fiber the convert do The closely cloud then Calix understand you out XX churn, from company, network data the past we've out their partner, really new business is software the and a the mentioned, And they build what do we use networks. is over success around to growth was, in in our that's become one build helped in the Sure. heritage business we and that really we the

is, the exist give operating we the them first that models The simplest in marketplace.

all at get And to the on run jungle. means help trying an that premises, So, the things OpEx. just then that and of a the truck We through fiber you top simple OpEx, it and OpEx converts XX% because to like same very savings side, incredible go-to-market them. we model running a through make it. platforms complex, We the way and our do with reduction unlike your on thing, which itself while and out the in very run at in driving the same XX% can they is rolls. up of work integration We an reductions not CO time, collapse they regards sit

subscriber? The help companies success who that win we And do and pieces with actually service market customer come excite growth that to subscribers. members then into with if organization to that a an markets if they And last, direct they're two on, the think like that And their focused them their thing those and model, beat be do And closely do best they're a excite second And the to we do business. in can investors, Amazon, that's together, you their value and are grow growth the how or positioned community, very understand they And their the how then, them our we is, to consumer to company. in how place? simplify their trying works a that provider our broadband they on, cooperative, revenue do to of is go-to that. home? public subscriber? great put do Google How

success. these so, together drive great to things And all customer come

platform in home performance seen that services at the did Netflix this GVTC our support XX% XX% their unheard second $XXX FCC premium that in in And incremental just Networks quarter We're for ran growth their over to network of actually increase their of of allows million And upsell. one miles relevant on over the a And a ago, example invested the services that incremental got built suite. saw business. EDGE, what was of customer. X, best marketing GigaSpires, fastest the in the is Wi-Fi XX% the they gives they've we're of which now call business. which broadband a Revenue uptake where has they And mobile and benefits you those on are top great is sections world-class relevant to XX% now tests of run in them have Well, in the can And they're an XX out, world. and revenue. we NPS our Wi-Fi puts last network then them? were it. all ahead the increase all-cash generate Texas, an We from years to campaign And seeing TAM in expansion app. XX adoption with part, this customers their their over I adoption we is the of fiber our and They've in loyalty, released who And is of a out you're plus with competition. saw in business. in what million STRATA ran give So, press center. Bascom cloud EDGE which Norvado, a rolled the the quarter marketing of. our our a customers, compliant one that's cloud, a section XX.

a no Carl? why than build company provides very actually they us more just them the very, company of, ever before. we're selecting they're successful longer that the business, examples We're great helps that So and hardware. have the that's these are them

Carl Russo

one voice, the the of Calix company. Ryan thanks, very, helping And So, employee, our through that now It's enthusiasm energy the me every goes is because The through point you very It's that different the let Michael. succeed. Michael's exciting. quite enthusiasm courses in so - Ryan, is item. mission veins out hear just a customers

Ryan Koontz

much. That's inspiring. helpful. Really Thanks so

Operator

Thank you.

come Markets. Savageaux questions Our with the from with proceed Tim your Northland questions. next Please Capital

Tim Savageaux

Good Thanks. Sorry. morning.

in you part margin but want on, the answered think just and I earlier is up follow question I First bit. it a on guidance, little to gross

QX other on chips margin? is these coming try neighborhood any margin Can To you're you type of of to of basis both cost items extent on or similar input I say what the impact versus lower impact regard So, down know, assess on margins, looking other a of at increases? the on don't and any points the those XXX pricing mix relative with or into revenue gross level. creeping systems to that

Carl Russo

don't Yes. that Cory, why one? you take

Cory Sindelar

Sure.

So, those Tim, relative out the little and QX, you’ve the to push of the being down those you're and portion PPVs. significant all components a build systems. of of QX inventory out bit margin of when terms obviously is guidance gross revenue. higher is lower components, There got to go those buying in

the to lower we product QX. QX than But up terms decline, it QX PPV is margins of in first relative So bit to more mix, where component the is little was a guidance quarter. differ the largest of from in margins our

Tim Savageaux

forecasting And of things conservative well, of obviously doing regard you've Got kind been taking much it. the the toward fairly to second and with - the year, half OpEx Thanks. of moderation I you're a a in wonder what in terms in for first. in expectations second outlook taking regard. stance obviously you're of But kind of the from you revenue the half, have better. that terms might

You’re guiding moderating. to you an that revenues whether interested I'd through on significant operating in to that spend, at plan despite second QX. particular and of to there's a expect be Parenthetically, uptick up a creep least the pretty half focus if continue

Carl Russo

chain. nature, like grapple we're the tell simply trying conservative. you address So, Tim. in conservative that's I'd the let to with we're Actually, being to first variability me supply the significant

QX, through. in having have going laid you're our that we're range thinking narrow, in variability indicative try As us we looking see for essence, to perspective, that narrows, confidence QX. more out, that from the you us supply and if range of will, the is in The in

retrospect, - is conservative, supply they think prudent we've chasing really in that is, appear in the I but it what what chain. So, think I been the variability given

the this in as laid way OpEx, we investing do QX. the of But around like know, what in about because fine. are Day. the model. if hack plans a broadband it's to opportunity looks talked look in model the simply see it math, about larger. different front intend we North discussion there's you to the go that summation RDOF, at and $XXX you mean, our America, that is end, that let's we're of haven't how that's funding in I that the mean, if not customer opportunity is to Analyst of all - for billion end being I at an on not stop, getting earlier. us the model every up of of fulsomely of business that new is help plan we going front And It's Michael that spoken new us deploy And it spoke a To opportunity large. to you plans. in is model, have This we So, we us network and and as

fully. we So fight to invest to are going hard

just know we're so, model and laid and to that at to have where simply And then revenue that's our you look look out, at drive. the going that we expectations

answer So, your question. best that's can the way I

Tim Savageaux

perspective it, through margins that's on I obviously, wonder strong factor Great. what's we in sneak international of a if quarter. I a was as expectations And can point mix driving any well. was growth if mention your one the driving going from you have kind maybe that forward. more didn't If color I more wondering in. any but

Carl Russo

from, is, when margin, he that on is as profitable think, is seen heard throughout, international joined, it being frankly, of we've benefiting international, Michael I but will and speak customers demand. frankly, major get world, the the typically to you've a that what it issue around increased business. lower aligning International somewhat business the refocusing us as margins, in And affect focused just did,

add I'll international, Michael and think Michael a the America to you, large. opportunity would you. give to maybe Michael, you want speak be to North bit hear tell first I Michael, can't just going little America North the sequencing, the international as a please? then because few I'm can do in color ask to follow ask is and and to about you And and up, then, on some Cory words well. Cory,

Michael Weening

was was Carl focused trying talk aligned to very for while and on mentioned, international louder mute. are I on what customers. Sorry. us markets it's I The

there's if fiber, dumb box, business with customer then and partner. we'll for and just call Wi-Fi, what that them helped that the build who And company we're the they're So, grow. builds if looking understands a subscribers, not who dumb We're OpEx, to I and we that networks grow that's focus dumb a excites them, the a us. lowest buy simple have

with North international So, customers. be whether America, they're and we'll aligned

Carl Russo

Cory?

Cory Sindelar

Yes.

bounces we XX-Q, a growth breakdown all Middle saw the We the the In each in told You it’s in might across was good And by revenue geography. It did of that East particular, quarter also around. we lumpy. year-over-year, geographies. see our of you up. QX,

so, saw would Obviously, been stronger its time. in Europe ship quarter, Middle first in destination strength have the even the had East. the And particular some in to made

So, that we're I'll stress quarter quarter. but seeing some just around from bounces it good progress, to

Carl Russo

Thanks, Cory.

Carl Russo

Thanks very much. Tim. Thanks,

Operator

[Operator instructions].

your question. with Cowen. Silverstein with from next line proceed Our come of Please questions Paul the

Paul Silverstein

at XX%. to - Carl, I next X% response looking in saw very Did question year you're I apologize you said? but heard I moving the say you're in - misunderstood, response heard at if XX%, you what outlook, a to growth calendar I about previous you I've say in mishear the but press

Carl Russo

did. You

me think year, very making there. with our and are or they as I - the QX given QX but don't but clear. obviously reiterate guidance, big challenges we You we're for which have, it is, challenge may our QX, got performance and the again, have we for said, I a what out just misspoke, supply expectations guide QX what We misheard I let leaving just I and

you year last year. just XX% it to this at basically over us takes look If that,

Paul Silverstein

… really That's Okay.

Carl Russo

sense? Does that makes

Paul Silverstein

guys absolutely. or basis to would Yes. gross quarter margin that with And point prove but margin, we’re (indiscernible), you positive are a respect No, you that you now will last XXX to challenge, deliver … your the to that's XXX then be saying saying think improvement not

Carl Russo

Cory No, That’s what that's exactly correct. said.

that, heard You right.

Paul Silverstein

much. so Thanks the Okay. offline. I'll take rest

Carl Russo

Thanks, Paul.

Operator

you. Thank

comes Company. line of with from the with your Ryan next Our question. Koontz proceed Needham Please & questions

Carl Russo

you’re Ryan, check if could you self-muted?

Ryan Koontz

on, we you. With OpEx and other model quarters? what we all regard this a think from to thinking travel back, going would on impact at less few where of also OpEx points the the you is lifting expenses, Thank many I about of looking and XXX - depressed kind looking basis we the about how pandemic how are was. out snap as because convoluting should of today and OpEx and pandemic

Carl Russo

back to to guides investments down to closed laid I the reason. Day, for call because your the going model speak this Michael March, want what in I to forward. in ask but would that just the we that I'm Yes. going attention to Analyst out travel our is the the we all before piece, you back overthinking dissuade following company from

Michael I So, travel I'll but the you. let piece, want parsing to, speak to caution Ryan,

pursue our fulsome in manner. a We going OpEx to are model Michael?

Ryan Koontz

it. Got

Michael Weening

Yes.

before. we're going the regards has The travel. in way As Look, it back pandemic to do that was Carl to the with way brought we mode actually not permanent about is changes. growth mentioned, business

office, was managers years. was multiple people While ago. culture, offices. There in they'd to a than At quit it anywhere be that rather that allowing There's used gains to isn't out may employees years forced would go had we've two going put productivity XX% years exactly time, full-time of everybody way some two to be for happening. - there seeing the wish work the them say the that that back place the back are it almost and by says been who be it from same back five studies which come was are to way into have the ago,

better the thanks the a impact We they no out it. of on were support, these if beautiful actually house, fiber broadband San with behind a live and providers towns, that house, we live you get can mountains Jose. and small view your to of they're doing at work life. And seeing you, go it, have downtown time, people want benefit in same big had pandemic you migrated the us. And the of the as the to already to in cities So, have because have cherry trees a all have but

a for going experience great this So, back. and they're these people not is

the of the that be do doing So customers same to comfortable always at growth the all the the And saying, meet longer the A they're lot the past, we necessarily they we our have changed time. then same continue. thing. wasn't no in In would are the time, customers time. but face-to-face, being past. business. Therefore, the I'm way I conference will see going all you office do our on I hey, can't in a video momentum

maybe an to because office actually I And commute hour come want Now am. every the - I'm no, day. I don't I to

at virtual ago, the customer, the And it's five with how not and engage bring just big with in with you even customers want It's XX SE. the existed allows meeting to us. years also so, how if Calix we to sales engage a want team organization into be it It where an customers. to would ago, years a sales at look past, that rep or a us

you Now organization. a success have customer

You have analysts data scientists. specialists are and who data

You have call center experts.

all to our you help these five that's is bring people if from really something side the do, their from people business, their want So, different bringing side, five people to and build together customer together. to hard

more just So efficient. it's

So the in go long-term? where does know. I travel don't

success, we be tons practices really view, to travel customers other at see and of be bring a to is together, invented learn those together, at from team with customers we and and helping we're which customers, Martha going what best - is five a when XX% probably on that customers embracing the where which has were XX virtual circle it used together, of do. then I Galley popular is around incredibly going or each done five brought Salesforce, what of and Calix, customer six to it'll to experiences, grow. you're which their that we point actually events, organization well, the and run - with sharing of virtual Calix, to our XX getting customers travel think And success their

So, not all and same that's the at my answer back. go never on travel. It's will

Ryan Koontz

clear. it. Got Real Thanks.

Carl Russo

Michael. Thanks,

Operator

[Operator instructions].

comes proceed with Our your WestPark Michael of questions. the from with next Genovese question line Please Capital.

Michael Genovese

so come is right. All too. I'd thought it, Everybody back else I doing

than certainly When change, at quarter, numbers it So, better look been medium like small change the for customers I a nice for the a customers. have looks while. strong sequentially seasonal was there for

And So, two going questions. strong customers with medium then you get are One, again, what's do think? when large two, going customers? on to

Carl Russo

that forces. So, and see almost are less first have And we let anytime it. of going frame it small which inertia. riding are ability in true essence, also that They a market, this those wave you're creating have always in me ones move it's new less on, They is, resist disruption. to what's a customers to the

recapitalized Medium way are customers And part being the large. so, works in from its it and are large of right to small that restructured sort now. ones

simply the medium decade. be think longer, the our and could into an in customers opportunity a customers success to exciting we to mode. So, move represent years start space, or will Large take it

largest. right I'm it it give on So can't now. continue will, more up, is if the to you we to expect any to sorry, from smallest bottom that I works it, way specificity robustly And but grow you

Michael Genovese

we Okay. any going That's fair. taxes in Last forward? just should model question for taxes, the meaningful me on

Carl Russo

take that Mike. you please? So, Thanks, to do want Cory,

Michael Genovese

Thank you.

Cory Sindelar

in that point year, but Obviously, this profitability. a good that's this we year, we've XX%. good to next for every and quarter would are couple effective evaluating start put you an XX% looking now. between Yes, At question. I rate, if time, a probably have of think one in not quarters, It's I you increased you'll somewhere and to guide to had

Michael Genovese

Thank you.

Carl Russo

Mike. Thanks,

Operator

are There would to back for Tom this you. like Dinges Thank over at remarks. any further turn the time. closing questions call no to I

Tom Dinges

and stockholders including May management Thank about during for number public investor meetings you, conferences quarter again, the calix.com. today. in our including XXth. you and of the times to meeting Goodbye on on Information for second interest Thank now. webcasts and XXXX, concludes Relations these the conference the a call dates in your Events interviews, us thank for This of joining of Once webcast is events, for and page of Investor section you Operator. Presentations Calix on participate leadership annual of our on this everyone call. will of posted Calix.

Operator

This does Thank conclude you teleconference. today's for your participation.

lines Have day. this great disconnect may a You your time. at

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