Calix (NYSE:CALX) reported first-quarter 2026 results that management described as a “record revenue” quarter, citing continued demand for its platform and the completion of a major customer migration to its third-generation cloud platform.
Record revenue and customer additions
Chief Financial Officer Cory Sindelar said Calix delivered first-quarter 2026 revenue of $280 million, up 3% sequentially, which he attributed to “continued strong demand for our platform.” The company added 14 new customers during the quarter, which Sindelar said reinforced Calix’s efforts to expand its customer base while supporting growth in the local communities those customers serve.
RPO trends and outlook for acceleration later in 2026
Sindelar reported remaining performance obligations (RPO) of $376 million, down 2% sequentially but up 11% year-over-year. He said the sequential decline reflected a “robust fourth quarter comparison” and Calix’s focus on completing the third-generation platform migration.
Current RPOs were a record $157 million, up 3% sequentially and 22% year-over-year. Sindelar said Calix expects RPOs to “re-accelerate in the second half of 2026” as the company gains momentum with Calix One and as customers adopt the platform and add incremental offerings.
Margins, dual-cloud costs, and memory component pricing
Non-GAAP gross margin in the first quarter was 57.2%, down 80 basis points sequentially, which Sindelar said was due to investment in “dual cloud environments” during the customer migration. Year-over-year, gross margin increased 100 basis points.
On the call’s Q&A, Sindelar told Roth Capital Partners analyst Scott Searle that the dual-cloud period has ended. “The dual cloud environment is done. It’s done,” he said, adding that the gross margin “penalty” occurred in the first quarter and that the related line item should return to prior levels within “the next quarter or two.”
Management also discussed the impact of rising memory component costs and the decision to implement a customer surcharge. Sindelar said Calix’s advanced purchasing helped the company avoid higher memory costs in the first quarter, but that supply has “run its course” and the company now faces market pricing. Calix plans to initiate a memory surcharge as “a partial cost recovery,” which Sindelar said will not add gross profit but is intended to share the cost burden with customers.
Responding to JPMorgan analyst Samik Chatterjee, Sindelar said Calix would adjust surcharges if memory costs rise further. He also quantified the margin impact of the surcharge mechanism, estimating that in 2026 the surcharges from the current point through year-end would represent a 200-basis-point headwind to gross margin because it adds revenue at “zero points of margin.”
Guidance: Q2 revenue, gross margin range, and higher full-year growth outlook
For the second quarter of 2026, Calix guided revenue to $287 million to $293 million, representing a 4% sequential increase at the midpoint. Sindelar said the outlook reflects continued demand and a “modest benefit” from recapturing a portion of higher memory costs via the surcharge, which he said would take effect in May and would not provide a full-quarter impact in Q2. In response to analyst questions about drivers, Sindelar said “the majority” of the sequential revenue increase is due to customer demand, with a smaller portion from surcharges.
For the full year, Calix now expects revenue growth of 15% to 20%. Asked about the step-up versus prior expectations, Weening said the answer was “yes and yes” when considering both surcharge effects and demand, adding the company is seeing “some of the best demand that we’ve seen.” He also said completing the platform migration without incremental delays increased management’s confidence in its 2026 outlook.
Calix guided second-quarter non-GAAP gross margin to a range of 54.25% to 57.25%, reflecting higher memory component costs, the impact of surcharges, and customer and product mix. Sindelar said a decline in appliance gross margin is expected to be offset by improvements in software and services gross margin as dual-cloud costs abate and Calix optimizes its cloud environment. For full-year 2026, Calix expects non-GAAP gross margin to decline 50 to 150 basis points.
Second-quarter non-GAAP operating expenses are expected to be $128 million at the midpoint, up $1 million sequentially, driven mainly by efforts to “expedite AI functionality and enhancements” to Calix One. Sindelar said the company still expects to return to its target operating expense model “by the end of 2026,” improving operating leverage and profitability.
Cash flow, buybacks, BEAD commentary, and regulatory updates
Sindelar said Calix generated $7 million of free cash flow in the quarter and ended the period with $243 million in cash and investments. DSO was 36 days, and inventory turns were steady at three, which he said reflected inventory investments to address demand and supply continuity.
During the quarter, Calix spent $171 million to repurchase 3.3 million shares at an average price of $51.34. Sindelar said the board also authorized an additional $100 million to be added to the buyback program.
On BEAD-related demand, Sindelar said Calix has “$10s of millions” forecast in the second half of 2026 and that states are starting to receive funds, adding that Calix is “not hearing that fiber shortages is causing a significant impact” to BEAD-related demand. Weening said he expects BEAD to ramp more significantly in 2027 and “probably peaks in 2028,” but declined to provide a specific revenue number, characterizing the opportunity as “potentially high tens of millions.” He also described BEAD as “an accelerant on top of the core growth model.”
Weening also addressed recent FCC-related news discussed by analysts, stating the company expects conditional approval soon and that the timing is “fairly quick.” He said the process is a “non-event” for Calix’s business, and Sindelar added that existing products currently shipping are “not at risk,” with approvals tied to “the next release” of new products in the pipeline.
Calix said it would provide more detail on its strategy and roadmap at an investor day event at the New York Stock Exchange.
About Calix (NYSE:CALX)
Calix, Inc is a provider of cloud and software platforms, systems, and services that enable broadband service providers to transform their networks and subscriber experiences. The company’s flagship Calix Cloud platform delivers real-time analytics, automation and intelligence designed to simplify network operations, improve service agility and drive revenue growth. Calix also offers a comprehensive suite of premises and access systems, including broadband access nodes, fiber-to-the-home optics and residential gateways under the GigaSpire brand.
Through its software-defined network architecture, Calix helps service providers virtualize key network functions and introduce new services with minimal capital expenditure.
