Yahoo Finance Calix Inc (CALX) Q1 2024 Earnings Call Transcript Highlights: Strong Margins and Strategic ...
Revenue: $226.3 million, within the guidance range provided in January.
Non-GAAP Gross Margin: Record 54.9%, driven by growth in platform, cloud, and managed services.
Non-GAAP Operating Expenses: $108.4 million, down $1.6 million from the prior quarter.
Cash and Investments: Nearly $240 million, a sequential increase of $19 million.
Free Cash Flow: Fourth consecutive quarter of double-digit free cash flow.
Inventory Turns: 3.1, down from 3.3 last quarter.
Common Stock Repurchases: $4 million in the first quarter, total of $89 million over the last year.
Q2 Revenue Guidance: Expected to be between $197 million and $203 million.
Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the trajectory of Calix's customer segments into the second quarter and the second half of the year, particularly focusing on the medium and large customer segments? A: (Cory Sindelar, CFO) - The decline from Q1 to Q2 is primarily due to medium and large customers. These segments contributed $77 million in revenue in Q4 and dropped to about $43 million in Q1. We anticipate further reduction in Q2 but expect this to be the bottom, with growth resuming thereafter.
Q: How should we interpret the trends in your product segments, particularly Intelligent Access EDGE and Revenue EDGE? A: (Michael Weening, CEO) - Intelligent Access EDGE includes both new network gains and existing customers expanding their networks. Revenue EDGE continues to be used by customers to acquire new subscribers. As network builds increase, you'll see a surge in Intelligent Access EDGE.
Q: What is the current status and future expectations regarding the BEAD funding process? A: (Cory Sindelar, CFO) - We expect BEAD funds to start trickling in early 2025, with the process gradually ramping up from there. Despite delays, recent progress has been made in getting states approved through the BEAD process.
Q: Are there any broadening trends in terms of customers pausing their spend, or is it confined to a few significant customers? A: (Cory Sindelar, CFO) - The pause in spending is largely confined to two significant customers. This is not a broadening trend but rather focused on these specific customers.
Q: Can you provide insights into how the pause in network builds is affecting interest in your cloud platforms? A: (Michael Weening, CEO) - The pause has allowed customers to reconsider their strategies, leading to increased interest in our cloud platforms as they focus on subscriber trends and monetization.
Q: What are the expectations for revenue growth and operational expenses in light of the current market conditions and upcoming BEAD funds? A: (Michael Weening, CEO) - Despite the current pause by large customers, we are maintaining our operational expenses to prepare for significant growth opportunities expected with the rollout of BEAD funds. We anticipate a return to strong revenue growth as these funds become available and network builds resume.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
