calx-20230930

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 September 30, 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 October 16, 2023, there were 65,867,044 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			24

Item 4. Controls and Procedures			25

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)


	September 30, 2023		December 31, 2022
	(Unaudited)		(See Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	135,675	$	79,073
Marketable securities	114,417		162,642
Accounts receivable, net	80,661		93,804
Inventory	150,033		149,160
Prepaid expenses and other current assets	106,839		62,691
Total current assets	587,625		547,370
Property and equipment, net	29,123		25,834
Right-of-use operating leases	9,964		9,283
Deferred tax assets	162,901		167,031
Goodwill	116,175		116,175
Other assets	20,872		19,142
	$	926,660	$	884,835
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	22,134	$	41,407
Accrued liabilities	82,078		90,474
Deferred revenue	34,944		33,541
Total current liabilities	139,156		165,422
Long-term portion of deferred revenue	25,413		25,072
Operating leases	8,446		8,442
Other long-term liabilities	2,700		6,332
Total liabilities	175,715		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 September 30, 2023 and December 31, 2022	—		—
Common stock, $0.025 par value; 100,000 shares authorized; 65,950 shares issued and outstanding as of September 30, 2023, and 65,735 shares issued and outstanding as of December 31, 2022	1,649		1,644
Additional paid-in capital	1,104,435		1,070,100
Accumulated other comprehensive loss	(1,359)		(2,473)
Accumulated deficit	(353,780)		(389,704)
Total stockholders’ equity	750,945		679,567
	$	926,660	$	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				Nine Months Ended
	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022

Revenue	$	263,835	$	236,334	$	774,859	$	623,324
Cost of revenue	123,286		117,762		369,789		312,780
Gross profit	140,549		118,572		405,070		310,544
Operating expenses:
Sales and marketing	52,356		46,134		158,817		123,363
Research and development	46,963		33,196		135,477		93,443
General and administrative	25,301		19,237		73,100		54,179


Total operating expenses	124,620		98,567		367,394		270,985
Operating income	15,929		20,005		37,676		39,559
Interest income and other expense, net:
Interest income, net	2,658		595		6,553		870
Other expense, net	(444)		(134)		(448)		(474)
Total interest income and other expense, net	2,214		461		6,105		396
Income before income taxes	18,143		20,466		43,781		39,955
Income taxes	1,190		7,023		7,857		10,872
Net income	$	16,953	$	13,443	$	35,924	$	29,083
Net income per common share:
Basic	$	0.26	$	0.21	$	0.54	$	0.45
Diluted	$	0.24	$	0.19	$	0.52	$	0.42
Weighted-average number of shares used to compute
net income per common share:
Basic	66,288		65,355		66,201		64,892
Diluted	69,579		69,174		69,644		68,587

Net income	$	16,953	$	13,443	$	35,924	$	29,083
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available-for-sale marketable securities, net	263		(488)		1,185		(1,956)
Foreign currency translation adjustments, net	(33)		(335)		(71)		(808)
Total other comprehensive income (loss), net of tax	230		(823)		1,114		(2,764)
Comprehensive income	$	17,183	$	12,620	$	37,038	$	26,319

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 July 1, 2023	66,320	$	1,658	$	1,112,434	$	(1,589)	$	(370,733)	$	741,770
Stock-based compensation	—	—		16,026		—		—		16,026
Issuance of common stock under equity incentive plans, net of forfeitures	359	9		8,366		—		—		8,375
Repurchases of common stock	(729)	(18)		(32,391)		—		—		(32,409)
Net income	—	—		—		—		16,953		16,953
Other comprehensive income	—	—		—		230		—		230
Balance as of September 30, 2023	65,950	$	1,649	$	1,104,435	$	(1,359)	$	(353,780)	$	750,945


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of July 2, 2022	65,241	$	1,631	$	1,032,833	$	(2,261)	$	(415,074)	$	617,129
Stock-based compensation	—	—		11,027		—		—		11,027
Issuance of common stock under equity incentive plans, net of forfeitures	201	5		6,966		—		—		6,971
Net income	—	—		—		—		13,443		13,443
Other comprehensive loss	—	—		—		(823)		—		(823)
Balance as of October 1, 2022	65,442	$	1,636	$	1,050,826	$	(3,084)	$	(401,631)	$	647,747


	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	—	—		50,090		—		—		50,090
Issuance of common stock under equity incentive plans, net of forfeitures	1,169	29		26,630		—		—		26,659
Repurchases of common stock	(954)	(24)		(42,385)		—		—		(42,409)
Net income	—	—		—		—		35,924		35,924
Other comprehensive income	—	—		—		1,114				1,114
Balance as of September 30, 2023	65,950	$	1,649	$	1,104,435	$	(1,359)	$	(353,780)	$	750,945


	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	—	—		31,502		—		—		31,502
Issuance of common stock under equity incentive plans, net of forfeitures	1,168	<

SEC Form 10-Q filed by Calix Inc