calx-20230401

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 1, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-34674

Calix, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware						68-0438710
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

2777 Orchard Parkway, San Jose, CA 95134

(Address of Principal Executive Offices) (Zip Code)

(408) 514-3000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, par value $0.025 per share

CALX

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes: x No: o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes: x No: o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes: ☐ No: x

As of April 17, 2023, there were 66,244,076 shares of the Registrant’s common stock, par value $0.025, outstanding.

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CALIX, INC.

FORM 10-Q

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION			4

Item 1. Financial Statements (Unaudited)			4

Condensed Consolidated Balance Sheets			4

Condensed Consolidated Statements of Comprehensive Income			5

Condensed Consolidated Statements of Stockholders ’ Equity			6

Condensed Consolidated Statements of Cash Flows			7

Notes to Condensed Consolidated Financial Statements			8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			18

Overview			18

Critical Accounting Policies and Estimates			19

Results of Operations			19

Liquidity and Capital Resources			21

Item 3. Quantitative and Qualitative Disclosures About Market Risk			23

Item 4. Controls and Procedures			24

PART II. OTHER INFORMATION			26

Item 1. Legal Proceedings			26

Item 1A. Risk Factors			26

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			40

Item 3. Defaults Upon Senior Securities			40

Item 4. Mine Safety Disclosures			41

Item 5. Other Information			41

Item 6. Exhibits			42

SIGNATURES			43

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PART I. FINANCIAL INFORMATION

ITEM 1.Financial Statements

CALIX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)


	April 1, 2023		December 31, 2022
	(Unaudited)		(See Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	94,186	$	79,073
Marketable securities	162,864		162,642
Accounts receivable, net	92,209		93,804
Inventory	156,513		149,160
Prepaid expenses and other current assets	70,302		62,691
Total current assets	576,074		547,370
Property and equipment, net	27,419		25,834
Right-of-use operating leases	10,060		9,283
Deferred tax assets	167,918		167,031
Goodwill	116,175		116,175
Other assets	17,181		19,142
	$	914,827	$	884,835
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	35,376	$	41,407
Accrued liabilities	80,838		90,474
Deferred revenue	44,497		33,541
Total current liabilities	160,711		165,422
Long-term portion of deferred revenue	25,121		25,072
Operating leases	8,825		8,442
Other long-term liabilities	2,331		6,332
Total liabilities	196,988		205,268
Commitments and contingencies (See Note 6)
Stockholders’ equity:
Preferred stock, $0.025 par value; 5,000 shares authorized; no shares issued and outstanding as of April 1, 2023 and December 31, 2022	—		—
Common stock, $0.025 par value; 100,000 shares authorized; 66,244 shares issued and outstanding as of April 1, 2023, and 65,735 shares issued and outstanding as of December 31, 2022	1,656		1,644
Additional paid-in capital	1,097,596		1,070,100
Accumulated other comprehensive loss	(1,307)		(2,473)
Accumulated deficit	(380,106)		(389,704)
Total stockholders’ equity	717,839		679,567
	$	914,827	$	884,835

See accompanying notes to condensed consolidated financial statements.

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CALIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except per share data)

(Unaudited)


	Three Months Ended
	April 1, 2023		April 2, 2022

Revenue	$	250,008	$	184,948
Cost of revenue	121,957		93,156
Gross profit	128,051		91,792
Operating expenses:
Sales and marketing	51,865		36,091
Research and development	43,173		29,817
General and administrative	23,077		16,031


Total operating expenses	118,115		81,939
Operating income	9,936		9,853
Interest income and other expense, net:
Interest income, net	1,640		35
Other expense, net	(167)		(68)
Total interest income and other expense, net	1,473		(33)
Income before income taxes	11,409		9,820
Income taxes	1,811		1,701
Net income	$	9,598	$	8,119
Net income per common share:
Basic	$	0.15	$	0.13
Diluted	$	0.14	$	0.12
Weighted-average number of shares used to compute
net income per common share:
Basic	66,044		64,489
Diluted	69,708		68,405

Net income	$	9,598	$	8,119
Other comprehensive income, net of tax:
Unrealized gain (loss) on available-for-sale marketable securities, net	1,064		(1,161)
Foreign currency translation adjustments, net	102		(71)
Total other comprehensive income, net of tax	1,166		(1,232)
Comprehensive income	$	10,764	$	6,887

See accompanying notes to condensed consolidated financial statements.

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CALIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2022	65,735	$	1,644	$	1,070,100	$	(2,473)	$	(389,704)	$	679,567
Stock-based compensation	—	—		16,220		—		—		16,220
Issuance of common stock under equity incentive plans, net of forfeitures	534	13		12,458		—		—		12,471
Repurchases of common stock	(25)	(1)		(1,182)		—		—		(1,183)
Net income	—	—		—		—		9,598		9,598
Other comprehensive income	—	—		—		1,166		—		1,166
Balance as of April 1, 2023	66,244	$	1,656	$	1,097,596	$	(1,307)	$	(380,106)	$	717,839


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2021	64,274	$	1,607	$	997,855	$	(320)	$	(430,714)	$	568,428
Stock-based compensation	—	—		10,467		—		—		10,467
Issuance of common stock under equity incentive plans, net of forfeitures	338	9		6,014		—		—		6,023
Net income	—	—		—		—		8,119		8,119
Other comprehensive loss	—	—		—		(1,232)		—		(1,232)
Balance as of April 2, 2022	64,612	$	1,616	$	1,014,336	$	(1,552)	$	(422,595)	$	591,805

See accompanying notes to condensed consolidated financial statements.

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CALIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)


	Three Months Ended
	April 1, 2023		April 2, 2022
Operating activities:
Net income	$	9,598	$	8,119
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation	16,220		10,467
Depreciation and amortization	3,723		3,943
Deferred income taxes	(681)		277
Net accretion of available-for-sale securities	(