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Achieved record revenue driven by robust customer demand and the successful migration of all existing customers to the third-generation Calix One platform on Google Cloud.
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Transitioned to an AI-native architecture designed to help service providers transform operations and add capacity through agentic workforce capabilities.
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Performance attribution for the quarter’s growth is primarily linked to organic demand for platform products rather than pricing actions or one-time benefits.
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Strategic positioning is shifting toward a ‘blue ocean’ of incremental total addressable market (TAM) as the company moves past legacy hardware cycles into experience-based software solutions.
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Management attributes the sequential gross margin decline to the temporary operational burden of maintaining dual cloud environments during the final phase of customer migration.
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The company continues to win market share by focusing on subscriber experience and operational automation rather than competing solely on hardware specifications.
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Raised full-year 2026 revenue growth guidance to 15%-20%, up from the previous 10%-15% range, reflecting stronger demand and partial recovery of memory costs.
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Anticipate RPO reacceleration in the second half of 2026 as momentum builds for the Calix One platform and customers adopt incremental service offerings.
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Expect to return to the target financial model for operating expenses by the end of 2026, improving overall operating leverage and profitability.
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Guidance for the second half of 2026 includes tens of millions of dollars in projected revenue from the BEAD program as state-level funding begins to flow.
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Gross margin for the full year is expected to decline 50 to 150 basis points, primarily due to the mathematical headwind of passing through memory surcharges at zero profit.
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Initiated a memory surcharge starting in May to partially recover higher component costs; management noted this adds revenue without gross profit, creating a margin percentage headwind.
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Authorized an additional $100 million for share repurchases following the $171 million invested in the first quarter, signaling confidence in long-term value.
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The dual cloud environment costs, which impacted Q1 margins by approximately $3 million to $4 million, have been eliminated as of the end of the quarter.
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Management addressed new FCC regulations on foreign-made routers, stating existing shipments are not at risk and conditional approvals for new products are progressing quickly.
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