calx-20230701

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 July 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

Table of Contents

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 July 17, 2023, there were 66,320,013 shares of the Registrant’s common stock, par value $0.025, outstanding.

Table of Contents

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			22

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			40

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)


	July 1, 2023		December 31, 2022
	(Unaudited)		(See Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	90,187	$	79,073
Marketable securities	173,941		162,642
Accounts receivable, net	96,980		93,804
Inventory	153,394		149,160
Prepaid expenses and other current assets	84,782		62,691
Total current assets	599,284		547,370
Property and equipment, net	28,836		25,834
Right-of-use operating leases	10,754		9,283
Deferred tax assets	166,331		167,031
Goodwill	116,175		116,175
Other assets	20,388		19,142
	$	941,768	$	884,835
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	35,358	$	41,407
Accrued liabilities	85,275		90,474
Deferred revenue	41,814		33,541
Total current liabilities	162,447		165,422
Long-term portion of deferred revenue	25,425		25,072
Operating leases	9,504		8,442
Other long-term liabilities	2,622		6,332
Total liabilities	199,998		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 July 1, 2023 and December 31, 2022	—		—
Common stock, $0.025 par value; 100,000 shares authorized; 66,320 shares issued and outstanding as of July 1, 2023, and 65,735 shares issued and outstanding as of December 31, 2022	1,658		1,644
Additional paid-in capital	1,112,434		1,070,100
Accumulated other comprehensive loss	(1,589)		(2,473)
Accumulated deficit	(370,733)		(389,704)
Total stockholders’ equity	741,770		679,567
	$	941,768	$	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				Six Months Ended
	July 1, 2023		July 2, 2022		July 1, 2023		July 2, 2022

Revenue	$	261,016	$	202,042	$	511,024	$	386,990
Cost of revenue	124,546		101,862		$	246,503	$	195,018
Gross profit	136,470		100,180		264,521		191,972
Operating expenses:
Sales and marketing	54,596		41,138		106,461		77,229
Research and development	45,341		30,430		88,514		60,247
General and administrative	24,722		18,911		47,799		34,942


Total operating expenses	124,659		90,479		242,774		172,418
Operating income	11,811		9,701		21,747		19,554
Interest income and other income (expense), net:
Interest income, net	2,255		240		3,895		275
Other income (expense), net	163		(272)		(4)		(340)
Total interest income and other income (expense), net	2,418		(32)		3,891		(65)
Income before income taxes	14,229		9,669		25,638		19,489
Income taxes	4,856		2,148		6,667		3,849
Net income	$	9,373	$	7,521	$	18,971	$	15,640
Net income per common share:
Basic	$	0.14	$	0.12	$	0.29	$	0.24
Diluted	$	0.13	$	0.11	$	0.27	$	0.23
Weighted-average number of shares used to compute
net income per common share:
Basic	66,271		64,836		66,157		64,662
Diluted	69,657		68,169		69,684		68,285

Net income	$	9,373	$	7,521	$	18,971	$	15,640
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available-for-sale marketable securities, net	(141)		(306)		921		(1,467)
Foreign currency translation adjustments, net	(141)		(403)		(37)		(474)
Total other comprehensive income (loss), net of tax	(282)		(709)		884		(1,941)
Comprehensive income	$	9,091	$	6,812	$	19,855	$	13,699

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 April 1, 2023	66,244	$	1,656	$	1,097,596	$	(1,307)	$	(380,106)	$	717,839
Stock-based compensation	—	—		17,844		—		—		17,844
Issuance of common stock under equity incentive plans, net of forfeitures	276	7		5,806		—		—		5,813
Repurchases of common stock	(200)	(5)		(8,812)		—		—		(8,817)
Net income	—	—		—		—		9,373		9,373
Other comprehensive loss	—	—		—		(282)		—		(282)
Balance as of July 1, 2023	66,320	$	1,658	$	1,112,434	$	(1,589)	$	(370,733)	$	741,770


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of April 2, 2022	64,612	$	1,616	$	1,014,336	$	(1,552)	$	(422,595)	$	591,805
Stock-based compensation	—	—		10,007		—		—		10,007
Issuance of common stock under equity incentive plans, net of forfeitures	629	15		8,490		—		—		8,505
Net income	—	—		—		—		7,521		7,521
Other comprehensive loss	—	—		—		(709)		—		(709)
Balance as of July 2, 2022	65,241	$	1,631	$	1,032,833	$	(2,261)	$	(415,074)	$	617,129


	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	—	—		34,064		—		—		34,064
Issuance of common stock under equity incentive plans, net of forfeitures	810	20		18,264		—		—		18,284
Repurchases of common stock	(225)	(6)		(9,994)		—		—		(10,000)
Net income	—	—		—		—		18,971		18,971
Other comprehensive income	—	—		—		884		—		884
Balance as of July 1, 2023	66,320	$	1,658	$	1,112,434	$	(1,589)	$	(370,733)	$	741,770


	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	—	—		20,475		—		—		20,475
Issuance of common stock under equity incentive plans, net of forfeitures	967	24		14,503		—		—		14,527
Net income	—	—		—

SEC Form 10-Q filed by Calix Inc