Calix (CALX) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $198.1 million, within guidance but down 24% year-over-year due to delayed customer purchasing and government stimulus evaluation.

• Record non-GAAP gross margin of 55.1% driven by platform, cloud, and managed services growth; GAAP gross margin improved to 54.3% from 52.3% year-over-year.

• Net loss for Q2 2024 was $8.0 million, compared to net income of $9.4 million in Q2 2023.

• Added 24 new broadband service provider customers in Q2, up from 10 in Q1, reflecting strong market adoption.

• Announced unaudited Q2 2024 results and scheduled a conference call to discuss performance and outlook.

Financial highlights

• Gross profit for Q2 2024 was $107.6 million, down from $136.5 million in Q2 2023.

• Non-GAAP operating expenses were $104 million, down $4 million from the prior quarter; GAAP operating expenses for Q2 2024 totaled $119.0 million.

• Cash, cash equivalents, and investments totaled $261.2 million as of June 29, 2024, up $22 million sequentially.

• Remaining performance obligations (RPOs) grew to $267 million, up 9% sequentially and 25% year-over-year.

• Fifth consecutive quarter of double-digit free cash flow.

Outlook and guidance

• Q2 2024 is expected to be the revenue low point for the year, with sequential growth forecasted for Q3; Q3 2024 revenue guidance is $198–$204 million.

• BEAD-related orders anticipated to begin in early 2025, with meaningful revenue impact as more states complete program steps.

• Quarterly growth rate expected at the lower end of 1–5% for the next several quarters, moving to the middle of that range by end of 2025 as BEAD and customer acquisitions contribute.

• Management expects investments in sales, marketing, and R&D to remain relatively flat in absolute dollars in the near term.

• Existing liquidity is believed sufficient to meet anticipated needs for at least the next twelve months.