Calix (CALX) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 revenue of $280 million, up 27% year-over-year and 3% sequentially, driven by strong platform demand, 14 new customers, and robust expansion within the existing customer base.

• Completed migration of all customers to the third-generation platform on Google Cloud, enabling expanded capabilities and AI integration, now supporting over 1,200 customers.

• Net income was $11.2 million, reversing a net loss of $4.8 million in Q1 2025, reflecting improved operating leverage and higher gross profit.

• Announced unaudited Q1 2026 results and scheduled an Investor Day to outline long-term growth strategy and capital allocation.

• Operating expenses increased in absolute dollars but declined as a percentage of revenue, reflecting continued investment in sales, marketing, and R&D.

Financial highlights

• Q1 2026 revenue reached $280 million, a 3% sequential increase and a new record; gross profit rose to $159.3 million.

• Non-GAAP gross margin was 57.2%, down 80 bps sequentially but up 100–120 bps year-over-year; gross margin increased to 57.4%.

• Free cash flow generated was $7 million; operating cash flow was $14.6 million; cash and investment balance ended at $243 million.

• Remaining performance obligations (RPOs) were $376 million, down 2% sequentially but up 11% year-over-year; current RPOs hit a record $157 million.

• Diluted EPS was $0.16, up from a loss of $0.07 per share in the prior year period.

Outlook and guidance

• Q2 2026 revenue guidance is $287–$293 million, a 4% sequential increase at the midpoint; full-year 2026 revenue expected to grow 15%–20%, up from prior 10%–15% guidance.

• Q2 2026 non-GAAP gross margin guidance is 54.25%–57.25%, reflecting higher memory costs and surcharges; non-GAAP gross margin for the year expected to decline 50–150 bps.

• Non-GAAP operating expenses forecasted at $128 million for Q2 2026, up $1 million sequentially due to AI and platform investments.

• Management expects continued investment in sales, marketing, and R&D, with expenses rising in absolute terms but declining as a percentage of revenue.

• Guidance reflects ongoing expansion of AI capabilities and managed services.