Calix (CALX) 26 Jul 222022 Q2 Earnings call transcript

Company Profile

Participants

Jim Fanucchi	Darrow Associates
Carl Russo	Chief Executive Officer
Cory Sindelar	Chief Financial Officer
Michael Weening	President & Chief Operating Officer
George Notter	Jefferies
Ryan Koontz	Needham & Company
Paul Silverstein	Cowen
Christian Schwab	Craig-Hallum
Tim Savageaux	Northland Capital Markets
Fahad Najam	Loop Capital
Chris Howe	Barrington
Michael Genovese	Rosenblatt Securities

Call transcript

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Operator

Greetings and welcome to the Calix Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the brief prepared remarks. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Jim Fanucchi of Darrow Associates. ahead. go please Sir,

Jim Fanucchi

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

the a conference the the X-K and filing will posted in yesterday As Calix for in its release a after webcast reminder, This letter section the news distributed Relations Calix section be available Investor of Investor closed website. call of market to website. stockholders in replay Calix the and Relations

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

Carl Russo

resulted continue. software providing All demand gain that to up winning are just than obligations have are in in was in are a quarter continued year-over-year BSPs services. our our in A further is and in last using a that share X% systems expect Furthermore, to our XX% growing of share. Jim. increase an this an our one. rather trend which The economic our and Platform subscriber as BSP aggressive dumb delivering their revenue. increase More received associated second by that markets pipe than XX% sequential was most to by never driven customers slowdown quarter. customers from exceptional see just the broadband-as-a-service revenue sequential growth XX% opportunity evidence subscriber you, those their we evidenced and Robust BSP from we This who performance Thank came bookings recent experience

Calix front, roughly the Furthermore, supply outperformed us again raises our of helped for it quarter. better-than-expected growth team to the us quarter. allowing year-over-year On revenue which achieve forecast third the results the XX% in visibility

exceed the our continue the February. held growth shared Investor Day confidence that can revenue future, our growing chain expect we While is XXXX to for model we our supply at challenges foreseeable in

Our operational uncertain in market and has been financial exceptional. performance this

profitable. are We

our consistently trend cash shareholder expect Based confident and sheet continue. value will to we generate significant We is balance over we create on are long-term. Our strong. this performance, we expected the

to up to that, $XXX and market that authorized plan let's with team invest a day our To is own basis. to the executing an customers their subscribers, downturn excite are opportunity our Calix in the an on our we end the every for their Directors and capitalizing presented In businesses, us help near-term, open simplify value. purchase with call their closing, the has allowing the enormous questions. to Darryl? one-year common secular to our has With committed of opportunity grows excellence Board shares. in opportunistic million repurchase stock However, us on grow

Operator

Thank you.

We line with will question. the Instructions] George now conducting Jefferies. be the of come question-and-answer proceed your Please with Notter questions session. Our [Operator first from

George Notter

software the sales, congratulations Hi are and and I guys. EXOS. hardware to subscription guys on side. a to Thanks Obviously EXOS all lots guess been those a wanted much AXOS the working very license on traction with and both business, the have about, I ask I hardware to in growth software the of and the know model. from attached to side but you lots perpetual move here. model progress

the through Could look year like you that ago. AXOS think us on transition you subscription know, new in you to looking in about perpetual what in on of think the I are transition? the side, I'd you're of about Can would you making walk are terms And at revenue kind of where you're license. there? terms rates transition. growth love and software of of where AXOS started also talk versus seeing like, And then tie wins that I a mix some that EXOS. maybe progress in

XXX% year-on-year kind Thanks that through and lot. I transition. said EXOS walk you a on in of think AXOS XX% in

Carl Russo

AXOS still Thanks our form. George today operating simple is question. a for Revenue it the in EDGE licensed offerings. With system. AXOS all pretty subscription is is Almost The of offerings our with transition the a

to XXX% on the on to a answer one directly. and literally other zero question percent your it's So

our maybe what's got you going want of Michael or example AXOS you're a to Revenue What As two for obviously progress obviously going examples. and we're is And success. there's, example. an that you've let's network investments that fiber more-and-more and the to Revenue share on the EDGE side customers say investments. XGS-PON. as the But network EDGE tied side, seeing just you on with on know into their and number focused on

Michael Weening

are a we because tie the actually the two looking to tie BSP a we're end-to-end, looking I'm technologies now service fact we tied going Calix are two together. point together that different FAN. network Yeah, broadband for the where finding we that to who of a tipping reached the is the to the providers at complete

an their by network Operations everything the looking on Cloud, doing to what business, Calix So everything and on with for which Cloud. to they're the and do looking elevate then example for we're end-to-end to prem and Cloud Brightspeed together tying Support for to solution speed covers it us doing Marketing

before. growth the for So you're and that us pivot that's really big the seeing value they're point like that's seeing why because never

George Notter

the then, Got cloud about also I progress it. And module. on I'd guess, ask

from improvement? Cloud. Operations can contracts. sense just RPOs Maybe But longer-term modules. up a You and to in selling you mentioned us Cloud terms sequentially. number really progress selling give coming why of $XX that inflecting good cloud million saw the jumped I for like about It the looks sequential be the seems Marketing it's in

Carl Russo

you that? Michael take why don't

Michael Weening

Again we the always platforms. been point allow at platforms this us those has makes reached their promise as to comes the what of integrate tipping cloud attractive. which the incremental more where And we're even solutions, to in down doing it

solutions. by the start broadband range one the then to support, at example marketing. to my ensure cloud for how have most wide ecosystem or for I through And or do function partners, expand I go-to-market when You do it, business operations, buying a operational look the and of robust Calix that you

on service for regards a if in you an cyberbullying a with Bark. customer a elements parents, of incredible This second Contact smaller-medium then has impact of bunch is fifth day-to-day we and quarter that to basis. North on to the integrate Bark millions our had at us haven't listening Constant added added which social a And Cloud is on America protect gives a social other looked their ability and really we them. children provider And platform to with which one was Bark, Marketing media engage platform the

what is pivoted that we of stage cloud the love that in we this say I'd next ecosystem. So,

George Notter

Thank you guys Okay. much. very

Michael Weening

George. Thanks

Operator

you. Thank

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

Ryan Koontz

can lot. the relief Good gross raise quarter kind driving comment the to front and past QX now? anyway. sounds you Are of like you us margin here? morning. with walk and Nice dealing a on that's which on through see takes and the year for any on the great Can the trend increases puts Thanks you we in mostly seeing logistics expedites? de-commits price visibility on improving? And Are

Carl Russo

day. obviously just of bookings is XX% going shift it other business the model The transformation hand to indicator. of to the of Cory. let side chain XX% every continues over continues from the it a supply that said me just leading in war The I'm to shape unrelentingly. going a which on and the then to be as it, Ryan we spoke Having

to maybe Ryan. and So, Thanks supply on the side? takes puts Cory the you want answer

Cory Sindelar

things like start just I would are lot from characterize the pain when a pain Ryan, you through you're makes feel Yes. going to rule better. it of

getting generally, still So phase. have things a a on the better, sense we're board across that but general troughing you are

to everybody supply remember, You got in needs only takes perform hiccups to avoid in order your chain. to one. It supply

So so news days, haven't last But seeing significant de-commits. a the the good surprises, we that's in any are had we XX still plus.

extended have upcoming first increases contracted lead being haven't those at the times still price obviously We're are year. of of We any. the notified

So that's a trend that's continuing.

ocean. logistics improvements we on the air and piece, both are On seeing

So days. XX last that's the over improved

it products. little earlier redesign those of where complete. to a still relate a a way to in in of problems identified while long year, a But bit takes that the That So some solving for spot. we're were all, bright that's our from large they all of

still working do. way feels our better. lot still There's we're of So, it albeit work it, through to a

Carl Russo

to little more ask let Ryan give just you So a me color.

second it First did quarter de-commits of quarter change numbers to or?

Michael Weening

fewer. They're

but improved the they So de-committing. de-commits it's are from still

Ryan Koontz

quick RF of playing of a How of It see versus could Tier you just the Xs Thanks from we're I smaller that do the some states. do are sounds like follow-up so Thanks the out a lot. there? nice flow some seeing If some headlines Helpful. into on the much. ARPA the operators allocations rural subsidies.

Carl Russo

Yes.

impact it's have seeing before any flow through definitely about the an from a we're it. that I thing Michael spoken say we're it's additional we've state-by-state know As and in I material, seeing ARPA would but states, started don't funds that that. comments? to

Michael Weening

upside. ARPA in see right quarter-on-quarter funding I That's would just the slow is same us. all flow we remains -- say, it to really now. that's government the versus And and for 'XX

to seeing they drives yet actually we're So, come. and bits

Ryan Koontz

Thanks lot. Helpful. a

Operator

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

Paul Silverstein

me? can you hear Guys

Carl Russo

can. We

Paul Silverstein

also visibility that degree funds, regarding some a A now, and petard XXXX of and response it's just off couple ARPA of One, but increase? seeing you're increase that that should a questions. to trickle your any

Carl Russo

want Michael, take do that? to you

Michael Weening

degree significant of We don't customers. the that's with our of organization very involved we all have have a into increase, visibility but sales actively direct

when as So, them through those the we're from funds phase they for show both planning it with submitting arrives, involved up.

our growing the point. before XX growth and organic you're So as that quarter us business stated had seeing new the growth currently this But I that's with market not we XXXX. at into BSPs taking all is now that right this and from share upside

Paul Silverstein

quantification the returning your And chain, the on what on regarding Cory, and response degree was of gross margin? revenue impact the to supply of

Cory Sindelar

So, Paul, subscriber nil. would on revenue it's supplying Remember, we our are I demand. to their customers say

se. believe per So revenue an has on it we don't impact

with gross realize margin as On and increases to we prior price reversed. XXX between revamped, points But levels. side, somewhere of not actually are at important to the lot It's be pre-pandemic be said XXX going can it's level, consistent that the a from those quarters. basis it's before,

We're point. That's to not kind the be going back going new So to moot level. revert normal. a full it's to that of not

to gives just the you kind relative is that of a where of so, And aggregate headwinds. sense it

Paul Silverstein

clear, be ICs, but somewhere your logistics, you been XX%? et freight, Cory, to gross XX% just would semis, to have between cetera, think for margin

Cory Sindelar

Correct.

Paul Silverstein

of recover? expect assume And do is freight, you I that much that how to logistics

Carl Russo

Paul? Say that. that again, hear can't We

Paul Silverstein

logistics opposed How much impact as on and semis increased costs and of the been to ICs? freight has

Carl Russo

quarter-to-quarter. varies That from

don't I stay And don't to mean, so, we in. going point, to we baked know Cory's what's -- again

we And get what's to don't know going recovered. so,

things do think for can, because to we they I to they're almost the you're it as balance a retrospectively, do the it's and so. As going price as to attempt supply chain think see I it do going normalizes, long increases vendors best yield other to in lot of and on that hold

Paul Silverstein

increases starts that's ahead? price your yet, to still Have impact or

Cory Sindelar

But said raised they've we started. remember, we new Paul, orders. it Yes, prices, was when on

Paul Silverstein

Yes.

Cory Sindelar

we progress And consequently, as well, it time. it's small, so but see just you'll through more of

impact greater XXXX. you as certainly move So, into [indiscernible]

are So, that we coming Now, have margin I'll of measured. XX% the ensure part also to that of remind some increase price right? gross was year, visibility current the maintain you, that obviously into it's for we that and PPVs

platforms, to So, be and and points piece that's margin should sell thought mix margin a is as the due of software more next more not margin improvement we XXX get to price the continue piece. in year. to recovery increase as recovery XXX continued where XXXX the product really The basis to we'll

Carl Russo

getting chain the no an materially longer And that is supply assumption worse.

Cory Sindelar

Right.

Paul Silverstein

everybody -- chain been experiencing now have you plus. last have on that of supply the and Cory, impact the else you top year over

You've cite is a like starting is now labor sounds that -- over XX% to companies increases see? hearing it and to average other on in supply what costs very on chain. with But, inflation a above got starting region. hit I'm you're depending type

Cory Sindelar

not seeing we're level wage that No, of inflation. No.

Paul Silverstein

some Are of or you already degree in seeing baked is inflation that, in? that

Carl Russo

you talking the OpEx the Are or margin about line on on line?

Paul Silverstein

largely on I should some OpEx suspect it would also the Well, extent in but I guess be also it would -- line, it be COGS. appear would to

Cory Sindelar

Michael environment maybe and on I you think to answer we're is the give as spend some as it's for moment OpEx a in want competing far minimal the so talent, the and how color that? Well side, on COGS

Michael Weening

Yes. the comes another people had them really, we're hiring, speaking for The company. people of hear first the want the really to that it story. record the about, all, that company, hiring They what's of purpose we to and to quarter down majority across of

them. exciting it's for so, And

that second and which are everything recognized several additional awards, for culture a sure with women diversity for upon the fortunate awards, making because is from for to first is proud looking as our part incredibly that do the won we're time our in for us The team. employees, and the works is we based And of, of interviews those then change, Fortune -- for represented someone And won won career we it and that feedback the Place comparable fact we and Area for we leadership is Bay properly. other this Best the growth, that four from which super for who workplace Work a Millennials. quarter of we're important

I much towards. of the it's actually that's with but something into all purpose new and come about are compensation, going to compensation gravitating those so employees And than am play sure, parts really more the our that somewhere

Paul Silverstein

you did inflation just for labor? Michael, the meaningful terms that in So of company yet say is not

Michael Weening

It’s Yeah. It's not. not.

Paul Silverstein

US, appreciate what got question, One you I the it on that's outside addressing full last what's into your US put But you Europe quick apologize but on question. I'll demand. to that. in respect one in that in et investments you US, that I investment sounds hands and in need queue, non-US Okay. with last UK, haven't to your It focus the others demand like assume with dipped. going cetera. yet I -- meaningful revenue? of the your that see to

you attribute us you insight? give can to think two customers. more it But specific I any

Carl Russo

is your correct. Paul, premise

where is on The pouring focused And area so America. on forward. North in focus an not our is team business platform our has been But it international it. into we going resources are

opportunistic quarter-on-quarter. very still it's accordingly move So and around will it

Paul Silverstein

to view have don't US, you yet Carl given a to the And as have have the resources don't invest of overseas? level you -- when more demand you the in will

Carl Russo

that in last stated this UK. cloud did first as time we take the Not we offering keep quarter, our into mind at

days that report news So only the same is XX to ago. as

Paul Silverstein

specifically big the offer CityFibre other day a insight for Obviously they upgrade in regarding April on and announcement that XXXX. XGS-PON selected And you plan could that's Nokia Any starting XXG you incremental deployment. that? the

Carl Russo

right? to wanted vendor. to be finally around just that, they're mean I it. I I Michael they've years And to They never for got getting if think a I from start around But always yeah, think their Well, new got it.

Michael Weening

Yes.

Carl Russo

answer shortest since There worked Michael we've you go. the gotten I've for That's together.

Paul Silverstein

Thanks it. guys. Appreciate

Michael Weening

Paul. Thanks

Carl Russo

Paul. Thanks

Operator

Craig-Hallum. of Instructions] Christian with with questions the proceed questions. [Operator Schwab you. your line Our Please from next come Thank

Christian Schwab

I that same, or creating those on question The large that that congrats on historical been execution. the new hasn't your revenue follow-up that's asked. XX%. great one the or on I'll highlighted And also percentage demand, just those but CapEx give of customers from that just there large companies? drove know the up going the a Are that you is I have large that two cycle customers? that's base, of my customer dynamic is anything

Carl Russo

I the quarter don't sense. in quarter-to-quarter and It's depending literally given -- mean that It's any that just upon the noise in timing. Yeah. deleterious

will about not as look part that as that they of As forward earlier fee look but you will closed price we there's Christian, yet be a into XXXX Michael this spoke have become spin-off. something

Christian Schwab

Okay, great. No other questions. guys. Thanks

Carl Russo

Christian. you Thank

Operator

Thank you.

Our next question Tim is with Markets. with Please your come from Savageaux the question. line Northland of Capital proceed

Tim Savageaux

be starting of even you right little consumer a Are display with of bit that the strong? pricing and impact environment technology comments this in both communications to comm? tech or now, in supply topics. standpoint, guess relative If last updated supply And terms don't your current a auto that its remains I'll I having benefits results. speak where to an we this seem some Carl. update to think yet. macro that and quarter weakening that on good a Hi, And get like and world kind the from seeing follow-up. good environment. comments and a on potential couple had I morning morning the and demand anything those to can in a interested to and start of some results optical this discussed like secondly, on Calix's places views more the favorable degree, that on is versus performance the corning It a congrats weakening comments I really in lines But And but we're of that's see overall I'd were and but doesn't topics a quarter? topic have is last you impact availability maybe be I know seeing your along demand maybe

Carl Russo

Okay.

I'm I add But and do, in correctly congratulations Darryl operator our take I to rare want going who to going last offer name of is group Michael pronouncing Tim, I I'm color. ask First this reverse a time. believe before in amongst them do Cory and that was the all I order to your to thought to

Tim Savageaux

was That Independent morning -- to the if Bank impressive. as this impressive. anybody on first did That has was up thing don't I call But else start here end a but know that I

Carl Russo

Well, the silicon. was availability in that All of might -- at. networking aside, I pronounced into we continuing is over look in question slackening we're something to that about just demand bleeding to correctly. point components your it want out consumer for This side, listen jocularity see I that

lead it will signs that My As to are that take extent of this the that that times couple think in seeing us early happen will in is the yet. I a affecting on with the know not my occurs you that folks I quarters. It we the industry comment understand, future. chats in is

me let So you anything there. want add just to to that? Cory, stop

Cory Sindelar

think seeing We're I not a this evidence about at right. some that's point. lot

I So that's right. think

Carl Russo

demand to redirected takes be you to of do XX question I there to if do I slacken. to silicon if you. But freeing encourage wafers for into and while to to consumer would continues we more have might up just opportunity think that occur, the same a that see ask an that use. Hopefully, for sense believe It -- visibility in almost I that makes we days is that.

BSPs advantage. side with to take On prepared heard service the providers, you macro comments from our as their perspective, my opportunity weakening is this our in our

up want take you outstanding that have to hallmark from the or And example has the maybe experience That or sets acquired that share. on you them to our know say subscriber is customers. an no of might I'll relate more platforms going you no with two As an churn. Michael BSPs

Michael Weening

significant service the Valley Revenue broadband We An huge announced had EDGE higher significantly it's to press Chariton all ALLO Revenue growth ExperienceIQ growth. the of And from gone has and and of cultish ProtectIQ seeing on what's of ALLO and driving with We're providers. XX We that by strengthen impact having growth that is OTTC in an end-to-end doing incredible right their this across NPS. deploying XX% have from and EDGE. year-on-year that's NPS XX. even. released offerings it a is our that's -- in than with a love quarter now board the NPS Apple on

So across winning. our customers deploy the seeing platforms we're and board, who our

Carl Russo

they cash other go footprint their rates in flow So take have and to areas. up also go overbuild their

in from separate winners. a we're to see you And downturn So are continuing our winners losers as know, this. and BSPs

them very And help be boat in so, happy the we're and to win.

Tim Savageaux

Calix That's All end which growth. to my well good has for market guess setup a -- do as versus I right. well, with follow-up growth

continue So of quarter-to-quarter specific to accelerating mean, know, growth you I you're of what is you've pretty now or I you're of level a stab the a to maybe kind seen growth? your a business, two at those XX%, if what you think you variations and that to or accelerating maybe extent, right you an market terms terms that XX%, how but and you can rate acceleration discern point nice where whether XX%. factors high of expect expect much can throughout taking between in guess, in end at of that kind take go? the overall in I I guiding can to market growth to in year, to share, kind of growth,

Carl Russo

don't the to succeed. question. But We're I subscribers ask We color. helping just take rate. BSPs add our about Michael some market me in going of – think Yeah. and two focused let don't to terms I'm the way, on I think growth your dimensions,

and platform land model, you've a is to Ours model. as the speak expand heard Michael

added of on we customers adding saw customers. new XX that in the quarter XX You quarter last new top

customers growth we're relentless always it's the that what working our of is customers. to to yours. a said, got and them to customer being and all We by going always landing So expansion maybe you've around succeed. Michael examples be That success, some our want part new be the existing with dominated to doing. is land expansion talk focus of

Michael Weening

these on again with work ability were years component. Sure. on Cloud, grow and BSPs back that everything and of level, to new their allow dominating will the their do a we the add to only using not to at prem services they're highly all on my them doing top in the which Marketing where were six incremental ago, insights behavioral in acquire If but with ecosystems, to customers, point revenue we're it I we go per ability we to we company of now then were have also But side, our network that back access effective an to subscriber.

account are lowest So as we're the radically stated, expanding that we stop. service us all to new It operating end-to-end, the providers our this and But give service the only subscribers. is won't not these that to basis monetize by release cost, market our them once new over Carl over we early because constantly can broadband goal addressable selecting expanding highest and opportunity we're successful inside for in a on expand customers. and they again

it So, stop. we doesn’t say,

Tim Savageaux

Got it. Thanks very much.

Carl Russo

Tim. you, Thank

Operator

come Our Capital. Fahad line next from is with question Loop the Najam of

Fahad Najam

Good morning. like already have Thank you been for taking my most questions. answered. It my seems questions of

Carl. Telecom me ask cyclical historically been picture question, very a So, business. a has big you let

their after tend largest investments. Your then of maximize go the phase they're on to media prolonged where through their CapEx investment they customers winter trying to in CapEx period and return invest a

have So at different all customers times. historically, are that's true, said comping that, upgrading the but your peers

which revenue time, the everything. relatively you're to to smoother is it same at time. supporting is essentially trajectory. the same So funds, seamless Everybody update to But have gives chasing now everybody seems COVID-XX them forced disrupted everybody at upgrade

super a and the nuclear then cycle, have deep maybe we by winter. kind followed of So

land-and-expand, your prolonged lot position? you you the investing winter land I investment Assuming massive about know you you sustain in about said it. cycle? do and is competitive there seem are to this how land of phase? a portion following that, nuclear potential So a long But how thinking that be investment

Carl Russo

Yeah.

there service the highlighted provider about is you because the is what it's customers' are the is And being that provider and XX you're provider simplify business things focused subscribers. you business. networks. But all service subscribers excite your are time-to-time, go-forward focusing pipe we're our be But the model be when service stimulus services focused space player, space. that build essence our way we is the investments we're services the on are your are so we on. we in you unrelenting in is which us correct say the excite success, will period. of hear doing businesses, on the success of that So, a there'll infrastructure ongoing statement two Obviously, your things. about think subscribers to the From their CapEx. an space for what Those – customers just focused money, years on reason, with And

our investment we nice but CapEx many not, ante experience, on speak our for the the to is to it's now you've the heard their and We're me so And years this sort the ends. begin where is -- where of success subscriber CapEx, game. customer revenue growing focused In-period revenues.

reduction that, that the organically, CapEx our revenue go So on. actually, say Underneath customers. there is investments Michael whole ongoing cost our business everyday model, of heard earlier success, as you about are

was X.X, question today, it your But correct. irrelevant. if it's in almost then Calix So doing XXX% what we be are would

Fahad Najam

really was about question my Carl cycle. your investment

from in not What you we as landing growth sales is new is be it about new entirely kind how of if you're customers, guess, and investing So growth in profit you're trying I'm customers. thinking on to of is… – then land the your -- intensity should focused OpEx marketing R&D, as

Carl Russo

OpEx see cycle our parameters Our services. is tied all you you upon our giving And is based revenue. to therefore, model, the those investment

on with because when that, to focused not new customers we're to So expanding going only of say we're expanding constantly XX% expanding in to our with customers, customers. continue but and we revenue, invest XX% existing our

are and low on little on R&D. model per intensity They in remain will today. G&A a that and our So tick OpEx we model were low as just

Fahad Najam

very Appreciate the was answer. helpful. Thank you. That

Operator

Thank you.

is question the questions with proceed Chris next Barrington. Our of your from with Howe Please come line

Chris Howe

here perhaps I'll my Most of kind Carl. a of the that different way. Michael questions morning, through asked move taken, been but questions and Cory. it morning, have Good morning, good been ask Good and have

of Just seems phase it trend the bookings, of place a like a increasing that XX%. or ATP percentage a the statement, you're at to percentage at affirm you're of given as continuation this

of at challenged you're XXXX and the We year an business of some revisit trough a you takes the lead sustain, in can and XXXX it puts XXX would towards also with points that environment improvement. beyond we hopefully, the to But, the fair higher that although, the will which But this anything, extent, is of statement? else environment, discussion -- different at this that improve a later. indicate environment into an margin seems duration end will like XXX point a which is range, move improving through and fiscal moving to have at that a could still can to we And remain. it as basis or gross

Carl Russo

statement. see. precisely correctly is, that fair In what is That in a XXXX, we

Chris Howe

should perhaps indication, that think the what as back there chain XX% of of year, we be maybe in or a -- being first the be buckets about different which early margin, this show than still may the sequential we duration improving. within given in half improvement some gross nature? more improving, of that any think we may the of different challenges, of And supply for XXXX weighted the Okay. expect, Is some as bit not be could little better some half which

Carl Russo

Yes.

right? of XXXX, XX%, balance the we'll to reiterate again for be that close will we So

Chris Howe

Yes.

Carl Russo

so And we off I it's year. for point that's where jumping think our next

the start slightly. I year to XXX basis show that think throughout XXX will improvement to point XXXX, that for

quoted. to think completely don't back-end I going So, be it's

a the be improve ramp, will will throughout there think slight it year. slightly I

quarter So improvement. each there should be each quarter,

Chris Howe

answering have that’s All questions. Thank right Perfect. Thanks I for you. right. for all my Okay. now.

Carl Russo

Okay. you. Thank

Operator

Thank you.

proceed Our question Genovese of Please from Michael the line with Rosenblatt with questions. is next come your Securities.

Michael Genovese

series in must I asked. of will chats that, But of been offended that I last, fireside say and first also here have you have somehow, questions Carl. most the the Well, nevertheless,

to want I'm new I topic. one stick or to all? XX% mean just quantify to XX% means but does guide you're that XX% So XX% going to the to it above above XX%, XX%? you Do at just to saying mean,

Carl Russo

Yes.

big that, of let So, the out cleanup first we're a up with Mike, jitter position the point loader, of as all, honor, me bringing base wood. a is

that you Cory sit we today, to think, QX to let's there. question, tell QX. now, So look, like go going from is we something think, Directly I your here as would

at if math, it right you us growth. so, the puts year-over-year basically do XX% And

inventories but that You'll they are about notice We what's down quarter-over-quarter. pipeline, quarter-over-quarter. good down feel the are in

XX% arrived continues could of of mind is that XX% work quite that years two and So to nature of supply it's on happy growth. where the we've chain. of start But at end every place supply Keep it -- we hour year-over-year finally we're the just see the But in here. it's am the growth back day. way every of the the a I July

Cory would what words his year-over-year, I XX% to not think, say, in So put mouth. is

Cory Sindelar

That's would Carl. say, what I

Carl Russo

That's would say. what Cory

Michael Genovese

your that we which Yes. XXXX, to on leads Makes my year sense. XX% as XX%. And years so right more we the coming. to RDOF said, two have and at Well, next guidance more about you going XX% have is is, at question, forward ARPA tape BEAD

So is mean, this for or I about correct you beyond XX% -- to year, that? do think XX% how

Carl Russo

visibility a change the a won't to changed model. is the like funny. not of now. we our have And your from discomfort our to out is, quarters spite that can against know. relief it's is right stand banged it not to get here sit happened to six And mode. mode I'm It improves, we right over today what's reason that. a we change today. let -- look visibility So, stops supply lot happy and enough to need And the to is which we it. said, we reason it, head the we long in high-performance year, The And on wall today. not XX% tend and model we feels a during as change chain now, more a until XX% in that as is and change watch in somebody But if Cory model the chain you lot more will supply on we change what to stability you everything have

Michael Genovese

maybe Okay. just topic And then. then, one other

like bookings, I SaaS think, supposed I'm things directly. but ARR thinking I'm obligations to growth thinking I that have give something about And your be think away would performance or to to give us maybe more approximate wouldn't you be helpful. but able of now, rates. the thought of SaaS competition, trying numbers that, So are you -- to much too mean, revenue may I'm that

give So have ARR about you thought us? to metrics like as things

Carl Russo

about has proxy your us you've going an thought is doing No. Sure. also we what's heard for gives it? you as for and do as Have incomplete we're remain we to what point Cory But the said, it? Will RPOs best it on. will it directionally, metric. best say, the sense

with would so you this. leave And I

In double on rate Our the our RPOs rate sequential was growth was quarter, that. growth X%. sequential revenue on

at you go beyond time. a as this so you definitely business, will evolution, the of sense rate but we that the at get for And look not

Michael Genovese

of I numbers or that you than to cloud share? a just but Do numbers any customers cloud more little at about -- think, on can who bit, this take there of who number can take customers us anything you any about Okay. customers you color that product you kind there? one of versus Michael total want give of Is point? cloud touched have one metrics this

Carl Russo

I that and said customers can, is of that more the or been that on we are over have in conferences number cloud question, asked XXX. have they deploying we've

Michael Genovese

breakout Okay. clouds? and between cloud But multiple no one

Carl Russo

that available the we for data any and welcome to of But No. apply in opened. jobs you is number that have obviously are company

Michael Genovese

let's All it. leave Well, right.

note for Thank in ninth of keep agree. that such off you. then. it clean leave guess, it's Thanks Let's on up new good me, I the But luck. like the order. here putting Congratulations rally the strong Best with work. a I

Carl Russo

Mike. Thanks,

Cory Sindelar

Thanks, Mike.

Operator

Thank you.

to end to We over have And the for now reached call our like the Fanucchi Mr. session. turn back I'd comments. closing question-and-answer of

Jim Fanucchi

in quarter. and thank this a section Calix call This interest Relations for day. on call, the to conference Investor Once including meetings posted everyone great presentations Thank the you, of for management website. events, Information during public your dates us Darryl. these and the third our the Calix in will concludes will leadership and times Events joining of you webcast again, of page for number the Presentations be webcast have of today. about a investor in participate Calix on and

Operator

That does Thank you. conclude today's conference call.

You may disconnect your lines at time. this

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