Calix (CALX) 25 Oct 222022 Q3 Earnings call transcript

Greetings and welcome to the Calix Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the brief prepared remarks. [Operator Instructions] As a reminder, this conference is being recorded. It’s now my pleasure to introduce your host Jim Fanucchi, Investor Relations with Calix. ahead. go please Sir,

CEO, and quarter everyone. on XXXX Calix’s President we operator Officer, Chief joining Sindelar. Cory the you our have and Russo; Carl third earnings Chairman, Weening; good you, and Thank Financial morning for call Michael Thank call. Today

website. a of Relations call after in conference section section stockholder our webcast Calix closed the This Investor available the of under the letter of been the Calix posted the As section Investor in Calix replay will Relations release Relations call news will the that replay a reminder, Calix SEC. website. conference and an filed webcast website. Investor Today's Noting for be the yesterday for the Investor section available website. be and X-K market posted the issued filing with Calix the in in had Relations

actual Unless forward-looking strategy Factors materially from quarter XXXX these may and market it Carl? letter that stockholders all in quarter outlook my in differ XXXX and I are future Carl. otherwise of this Before we filed will both forward-looking growth contemplated statements Also of and to dates. that, pleasure operating reports will quarterly SEC. the their statements, their including to referenced its will by be turn assumes as With statements, could Carl in this over call, and A results financial any those differ measures. GAAP the non-GAAP is on trends performance, the this annual, third and the only actual results cause everyone materially and for the forth update in remind discuss is all conference over reconciliation non-GAAP measures in call and company remarks, Calix I speak GAAP to statements. obligation make call no with to call, set to included non-GAAP to will forward-looking call about stated, Michael opening which financial to letter refer to turn we respective the to measures. numbers want third stockholders. to

Robust in XX% a providers increase rather Jim. dumb be growth service and continued than continues third broadband-as-a-service XX% in increase in year-over-year you, demand driven quarter, in by a a revenue RPOs. resulted providing year-over-year which that Thank This our just pipe. to are broadband

subscriber We to expect an using many continue to this trend have as to received experience one. never are exceptional by who our and economic gain aggressive opportunity customers slowdown of those share an DSP delivering the

the with revenue with speed. Higher we up continues to our fourth the revenue year the that the pull Calix third spoken years third disruption meet the fourth in puts a pathway combined to the resources quarter guide and growth. our subscriber we On which supply front, quarter benefited better team the provided inventory, of position us demand for more and a of deliver quarter growth. meet customers’ us again for a to pick outperformed The XX% of to enter in forward from have consecutive on

cloud, nearly forward. our evolution it's systems Our see will the performance of the Michael expect I our Board quarter going bookings more mix, than platform, as while thus of consistent up transformation associated medium not that customers in our from software, forecast bookings do growing percentage and I step two it our come And are is we services. we These all with and a our sized complete, lead XX% yours. Michael, appropriate is all indicate normally and our to business. have fourth that observations combined

our shared excite corporate customer service XX-years opportunity and help $X phase innovate that we on week more the of that conference. In ConneXions, phase. partnering are opportunity broadband demonstrated next allow me our members journey, business. customers before hand our their our billion is or customers this maturity subscribers entering team committed The to every than evolution. executing our our With platforms Calix thing, Calix with we their Carl. the we for annual of Calix that, We the has is day. and providers seen we their transform in back to excellence, follow to let third ConneXions, it business, lead grow at phase grows a the as building Carl, Carl? to enormous of Last and and their the capitalizing never you simplify speed help you, shareholders, ecosystem that to Thank our and their to into the innovation our are platforms In to At industry. the at and of been define value which investment closing, in success community.

for This Michael. you, open questions. Thank call you hear is me time let's the the will say operator, last

[Operator Thank a Our first the session. Please line with be Paul question. your conducting from Instructions] you. comes we’ll this question-and-answer with of Cowen. At Silverstein question proceed

to you fill. Thanks, got [indiscernible] Michael, guys. congrats,

Paul. Thanks,

to [indiscernible] demand referenced in progression in And sequentially inventory to growth. terms XX% concerned, bookings there for I not number it periods? future night could deferred reported the revenue wasn't but forward in platforms. revenue But and you consistent from you last got out shift XX% be remarks, think heard sequentially that's software, after share I clients. consistent and a Any the you from to some clear I say that portion cloud to with clear, revenue taking was overall number come or software up RPO made thoughts your didn't but the of overly speaks of as came growth? pull of the appear all you just all you and future you The you're the because to expect ask

forward And revenue, that by able was way, the end. So let forward a saw times, The inventory actually pull outperformance in the partially good challenge ordinarily inventory, that word on to is but thing. the me scary was pull of in supply question can of that start to also with a because the answers business word, platform first our the being revenue nature you pull and was hardware your experience. I the you we of speak share the in he side, had still I'll Mike maybe on outlook forward five. you Michael the think general had, But let which and significant growth

Yes, year-on-year it can XX% we close to be were up we contracts. lumpy, because and continue

last variable our had And will growth one like we greatest to that quarter, that growth, at call we XX% just saw So of in levels. quarters. be growth I'd

suites. move we that and their those it's is how And doing out is new Yes. customers. everything ConneXions, doubt our ahead. help the and understand There address change growth with into opportunity markets services and through of them clear with a that incremental no opportunity significant very subscriber opportunity they customers we're And coming there as ahead that the clouds

last thank that may. in that at and definition not the I disbursement a that current from have definition that's funds abroad? strength visibility by being by broadband if not -- I trickle, various next is continue the you terms of benefited trust still good buddy. into stream. All of U.S. visibility legislation if and the right. I you're all the trust trust I One you, by you're even a seeing to coming strength the seeing question year in much

question. a that's So

to out. roll a correct, Paul. that That's decade take will a absolutely trickle You're

your into year, And Michael? visibility next

to Continue strong. be

with we about talk will as Cory As provided guidance.

-- at level continue We incremental an have no year. they'll every to grow single

about demand. talking You're

my wrath me, I want of talking and ask to am to -- the don't to but I margins incur waiting love are about peers about I'd on. as well, who

I echo Now excitement is it's few and capability demand believe invested having stage. minutes would quite charts. attended just the on ConneXions And our just as just strong. off a we The

until question. sounds of margins, like meaningful back cetera? this with freight with right. everybody else apologize fine you've got along by recovery increase gobsmacked training to I'll you’d respect logistics that All margin teams, is start It And some the [indiscernible] establish very et in and Carl, to the up

the discourse is us headwind mix achieving I I seeing start to Without if think margins about Keep will in the the going long that. And characterize there, will As a indicate better makes issues lots there's I'm me business little though just that it a for we're see slow, in a mind is much the points the we've the start up out expand. The in about on recovery. basis of think is more excited XXX which QX get I turn in basis of to to back is, might up. our chain of that always that we feel XXXX again supply XXX over way some said beginning still this where think and to the turn we that's that, to said, improvements. even of points too take would guidance to so it starting answer would it.

basis basis No. not points points? to Carl, basis points XXX you did points, XXX just basis to say XXX XXX

XXX to points basis XXX basis No, points.

pass the Thanks I'll Alright. line. guys.

XXX points XXX to was basis points, mistaken. I basis

you mistaken. basis to XXX basis points, heard were If you points XXX

Thank you, Carl.

it I figured Paul. I conference in. call get thing going this you to off have Thanks, and last

you. Thank

next Notter line Please Our question from with with question. your Jefferies. George the comes of proceed

Brightspeed category I that -- about your medium Brightspeed, thanks off guess working wondering rate look has Hey So of customers Hi, to forward what that from is mix a that guys. I'm you. I we ask consistent sense the coming with any into a lot to I the the hear I sized on of been And roughly congrats promotion Michael, doubles pretty if sequentially guess, medium revenue customer run and wanted noticed sized historically? that?

the that. clear, they sized deliveries medium themselves at now is of more mix, of Well, so the accepting Brightspeed It's as it's to beginning take into the which the answer October. position to over, customers, not coming Brightspeed driver is but did is but they be

started we've many in customers driver. the We years, sized the third not is to to second what medium as not that's So it know, it at continues, for that's And primary It step we the disruption are quarter, which customers any we're doing. seeing when discussed, but you that start it it's as the XX%, segment make into quite you'll coming growing, start what about. George to. one said It's larger as off, more take into simply customer. the small seemingly all didn't see was mix

it. Got

I talked And engage that it the program thoughts might million That's statement. on buyback. I back I if didn't quarter, some during program earnings Okay, the you then guess, have last the great. buyback on go of I point? guys looking assume flow $XXX helpful. this buyback cash call, QX. you about Any that see to at

we Yes, George. to was about work that Like the quarter, at Board company last the different buyback in and go level. talked put stock decided place, when much we with a

requirements. our the it as every look We at level. cash looking level at on at Board are strategic We quarter

needs for immediate becomes a We a cash. no better You're had some point, sitting $XX there price But And share all you're for just this looking of ends. having cash a getting where alternative stock for point use know our at our to a business. needs than existing of ready the where we sudden, at going. it don't

had or allocation to point where leave we're the every And so. capital that went got a ahead and the process, place, we'll the you revisit cash By in through shares decided have in going balance so recovered to continue sheet time we the obviously place. on and we months put a six program this put to to

at. And we're kind where of so that's

recovered, shares step opportunity it So an have shares. and yes, the [indiscernible] to we didn't

Got it.

you're is points. the I basis a to it's one guys told what just guys. quick line this think through is sort I'm you one the what now? higher lot at curious that Thanks getting then a basis gross input points XXX with is, last costs? and one. Okay, impact margin point just XXX point, of associated us At

Yes.

quarter some and then solved of were of problems those And I the with wouldn't helped of still mix overall in rates able us our We more quarter that obviously that improvement finally margins. a of line a George. number. letter, stated the we on was product net to the golden It's access margin product that in this mix. stockholder as reflection change we So screw largely product more inside and of the kind shift

doing prospectively, to -- ask still -- let you center George, Cory done them? and expedites? a question. going Are So I'm to me you ask with Are

on inside some actually added another this issue we always -- product and is quarter, which had expedite we component again Well, put expensive. to airplanes, so

them. we're with dealing So still

less of good. turns that quarter, hopefully amount less and still obviously, inventory, expediting three to that inventory step range very our air X.X, We of set of are freighting. outside and the upward We're nice balance has a ratio from beginning a taken we'll the the have can somewhere four. at expedite of had we so that during between avoid And with that's you see within all what

Thank you, Cory.

Thanks guys.

Michael Rosenblatt from Securities. question your line next with Please Genovese of comes Our proceed the Instructions] [Operator question. with

good Great. Thanks guys. a quarter very Congratulations much. on

is new your sales a and a phenomenon stay strong an obviously pull about it's to Or cycle. Now tend for your in seeing in that to is, and about order think hardware little could or first cadence and you question extremely My a cycle that a to there's just like cycles, software good strong where customers please? is it? hardware Is through talk there later? sales going a bit, way

a about it. think great to way That's

opportunity, a we're for the is service In which the sell services, fact, example, years, they never that's home as about once manage where beyond the which whether gets unique services. over into it's going or to small is we've has going in way connectivity, it way fire a provider the where talked then before, has last put, happened they start few marketplace business, that home, the

start and Experience all nine, we ConneXions Tech with you for We service that announced continue those that watch are So aged IQ, broadband the for providers. XX, to service turn then provider monetizable opportunity out expand of us. if broadband and portfolio for in and see our that IQ XX opportunities and will you

think the that's way right about to absolutely, So it.

the And just we're percentage. as we reason growth I to on dig that look a just towards Is Brightspeed, isn't But customer understand a we medium category -- at fair? new of down more in mix that like them I mean, as expect the so is if if a the for beginning -- which main even deeper, -- you Or X% that the and that towards more the an as would the example, would mix software? hard taking is hardware later

Absolutely, yes.

okay. Yes,

No, right. That's that's absolutely great.

about want the to in more margin a chain supply gross ask points. and Okay, are I small little these bit the really

did basis or this know, supply something. a like is still there the chain cute points, I for time, slightly XX gave guide but guide Cory the very the seven, XX too better question And quarter, consensus. above the XX maybe is it's quarter was points, basis So is But, issue you sequentially. think the but than points in said last next midpoint then you you down

it thinking And quarter supply the Is if same? maybe that the So fourth quarter range, be the versus surprises? talk improvement? guiding just what could it you really there can the about there chain? at third it'd aren't, Is are the Are you there? of you more be higher end

the don't I I marginally is not -- too cute, but Mike. think cute, question too

going question. we're answer to your So

headwinds any me start push Cory and if On macro the start comments careful, ask that. statistically now let the again, back abate, mix to to but be frame which of it to you sense, go business it. the So the even one in me add better quarter, let is, will to

Yes.

is those right? the So component I things quarter have problem certain chasing are enough you're be through. still to this. too a problematic that for I or of supply XX those are various entered $X variances the able problematic areas still going worth I'd areas. those to parts So days, to price kind were still agreed million -- that, last variability the think mean, that to characterize in And we were There things chain or just PPVs But that is finely. example PPVs solve that coming improved remain In them. whole have, see of Mike, I into you're inside

very So that or get want. we that they're to so difficult call us a dozen for it everything parts still, it, make

it. the albeit, buying So to it remained certain getting time, time And it's we're their evidence in lead some them, reduced vendor we're paying times there's for when lead buying heard so XX them, of up right? extended, areas, I've better, so getting weeks, XX for we're And one for first better.

still to down. come but mess. side logistics in up of the to come cleared kind not be rates still have the seems Long down, trucking have to levels, and of continuing port a rail pre-pandemic congestion There's Beach, On the seems house,

be. not where better, getting needs it it's So to

And that so is in six work more the you're did reflection a of that quarters. really But looking then we're increase fact you're say to all the the seeing of having that products. inventory the I would at still build we last in

getting those finally six we’re of some actually show think I up. we commitments purchase they're made that ago and starting quarters to

So that golden of problems leaders it's order solving shipping of bought, some a a the little that, long on logistics. fund combination lot of of screw you and, bit improvement know, the a the of we

Right. That's color. you. great Thank

each. and I Mike question Carl quick a Lastly, want ask to just

the So, on And sounds you focused are time? or on are time like. Carl, spending I not you're to going your gonna XXX% it What a spend going other call, you you're be conference things? what be to next your mean, Calix doing?

have prepared comments, question the I'll if in I'm don't. refined call it conference quarter's be case I just on next I that call I conference there's will Mike. kidding, will not just I if miss asked attend because will you particularly

Okay.

and -- remain I've lots just what This executing. on we've That said, a the endeavor, evolution. anywhere steams and not The the natural chair the I focused as doing. and board board now been future company going the XX-plus certainly next I on been look, been those the a talent. has of step will first I'm my leadership This to year interest, but its been But the be of will of have board. point, interest team is has your on pieces.

of this Is that it great. I talk great, next you for Mike, we'll And start the be just again call. this new both. be era continuity? I'm Calix? would a glad suppose Is could new on this. to a able That’s era try how

-- would that me how hear this let what Calix? change you stop signals and for talking characterize So

signal continuation other doesn't than strategy. of It of anything our pursuit a our

ConneXions, I third continue where is entered the success shift level company. as that So innovation service then efforts provide of that for our at how into the to now our the phase providers. announced of managed of phase we really now in we speed And can the have some reached maturity, broadband we've third ecosystem platform services

would teammates, from team's continuation. a change. and no leadership is there the perspective perspective, just say This is my our I So from

congratulations the Again fantastic. right, and performance. All the role on new congratulations on

Thank you very much.

you. Thank

& of Needham line comes question Company. proceed Koontz with next with question. the from Our Ryan your Please

appointment results on Michael, to great here. Congrats, and the team the

hit I was customer vendor want key like and the the that investor the accordingly It I you over points, to on that about another next think you of think community. but most expectations last ask brought I that international. we've quarter mentioned to international to the sounds U.K., know a we had Thanks. How front? should XX-months about just there onboard set prospects down, the

Yes.

think year to let I'd on this Canal comment a going we kind and CityFibre. and had that in So ago, with highlight start where a we to show I'll But so then off me stuck QX fact anomaly is I got two Michael up that if you had Swiss didn't shipments this and market. we ask revenue the one remember quarters of ago, what really up the had end of year like

And of international? want thoughts Michael, normalized, hence that So on that it's prior was more strong. on -- so you're do seeing year our you is the kind function then to comment really anomaly. decrease of a just Europe just year very This

to broadband of opportunity expanded have from the the North the benefit markets. we American U.K., have which the a we in while optimizing U.K. market, in the our and pragmatic we public, expansion, clouds made our we're very doing to that in view Yes, that very approach point folks and innovation a everything international allows

Europe Chinese looking the return And are other Europe? there? see kind in any you mainland And aside? suppliers Are there at how in are the developing That's now moved opportunity a helpful. pricing of markets you do seeing normalcy you to that

want U.K., to as primary We this And optimize to a go on market. really America North it focus basis. into at and remains expanded in the everything point. we've North America do we'll I The said, assess forward then pragmatically

price Well, -- acquisition probably very the that the by replacement to for a and Ryan, compete. Huawei they're price keep be mind, a looking also we opportunity in a if sensitive that is price not are driven driven. And providers or was certain replacement dimension that's upon service going which

you add do want Michael, to color? So

this Carl and something Yes, on to focus is looking times our I speed heard go say dumb a the which for is go many that is a market completely aligned they're do something who that meets this you've People many finding how different to build site customers. that a strategically market. calls, is out is is play on quantization not understand

them actually talked I that the ConneXions a experiences. a to And is fact, that by expanding their on lot at is that company into [indiscernible]. opportunity the are right, in In market infrastructure about we is capitalize the it’s broadband perfect only world for

have we packed ConneXions. a And house customers of at aligned

Right.

Are So follow-up medium term? short to the opportunities that of should you developing. if could to that's their an in I how fiber? minority opportunity ask investors to more think been And a front I've heard MSOs historically. It's and some we’re in see I seeing cable about a interest shifting over CapEx small how of the on great. TV those wanted

that there for them to shift. opportunity. not because fiber, to it's Absolutely. over is it's a Absolutely, There's out growth make provider or transitioning assessing huge cable opportunity a not a

Got it. Thanks much. so

Thank you.

next comes Markets. with Our Savageaux Capital line Tim question. from with Northland question of Please your proceed

the as level to decent back if And Carl, way done a like recession given that's might you fairly appropriate I'd to to-date kind take wonder forecast the last so to a I get say QX to we business wanted name And performance. to on results congratulations well get for call, I proof. going Carl, last the termed pronunciation coated updated is year, you the resistant you about business, look macro seemed interplay next from has it then between a into because sort the you of your the an year-end and and of QX overall here kind to in auto higher we the discussion say and of given think think kind sector your On call And slackness operate the are we circumstance sure. all view that and it finally elsewhere gone chain you we've looked wanted the starting the perfect seems year I that the very of tech on supply here also operator. supply consumers to small the the call. in starting and see your discussed I of dynamic we -- benefit of that? front, to the through guys? the in

Okay.

So credit let and you credit no me first There our was Melissa, all, knew of who give of pronunciation her where coaching well is the absolutely knew nailed due. operator, on you own. and

Speakers] is it want coincidence merely a So through coaching. [Multiple

that and they are recession. that that the a shifts believe is be to focused downtimes, provider because going customers the share. is market after those that And that this will go broadband give will turned from recession Michael some this as that to many, on believe recession, base and now with subject true. we're up to service. going that, it's from service proof be actually There are piece up pipe, benefit to Secondly chat to recession share it share obviously that power and I Michael as on and I'm the just because I'm I ConneXions, continue the then you a those I'm the many are proof And to at And and Cory there ask going The out Michael kidding. to customers. is has set in there

recession-driven. give think and our Speakers] at share customers. of some on you sense want for anecdotes you So of you not going our is Mike, Michael could I share [Multiple some with It's business to that? why because do our to go business, stories. what's some because

customers that then small I is they're top years. but and transform is just investment on to their The beyond the home, And all that's a thinking very and are the and subscriber the only the communities. with community focused existing bullish not how incremental subscribers’ regards are coming who of monetize opportunity well how actually also do The start. have business, in do on ahead as that, the go-to-market that they the a through huge with infrastructure is thing next the services. Calix my speed engage investments making step the I and They're

watch doesn't about of then understand you the about is the revenue. I've are and a the if they understand understand one churn the understand consumer behavior. cares do the service they an home. reliability, really and speed, that provider, of they things of And but ConneXions, plethora transform So actually talked eliminate who understand to lot consumer their those become who community And they provider, excellent also build loyalty, and one service opportunity a monetizable services has each grow what

to last what inventory, eight, after XX helps that XX, said hopefully I Tim. echo this quarters. to six, more Cory for -- about it. some So being and On your due we've question us the look, want amplify We're seeing benefits frankly now

to I on see next there counterbailing effects -- you we gradual to there commence four think have this to feel those macro green shoots over believe the said, over quarters, quarters. giving is going us our to That demand purchase thing that last ability is be in we've green our think four quarter, I before, all Our to a continue as you free perform to data is. still Cory, do the we better shoots. that it's mitigate, have what than customer but letter, said the were some the going but

we're say, not Yes. that would Tim, on agree now. that. seeing I I

through wafer the all segment start to will consumer in about starts like not is the It with inherently measured it's water. strong. them of think starts That just line, have decreases space in into put those know, demand the networking the having it's the other weeks. having cards, take so time sudden, quarters, a the segments. putting products, takes, And them just wafer putting you down on on you good weakens it, time, you getting on run not boards, bills, by them We'll if them them

more I business as see kind to that. discussion both just market Should and strategic role third forward and phase appreciate we business from asusual? evolve the guys there here follow-up board infer see level of cap I $X high and focused billion course, partners, of what could If with a level, to view another, to as it of and ecosystems ponder on congrats going you But Carl’s here. of of, we you or around is do your it Got that. of from and the Calix question externally the

Michael of but me So to ask that, platforms partners. going to I'm let front start the end amplify and

before, open I up things the and platforms look that incredible a you to had bring as world integrate Michael would systems in it. very interesting you you don't because But up you to discussed opportunity. the it opens also opportunity Tim, another at the say, look old have acquiring, to. We As have as have pace. heard time to you complex at Every a business, market, something

laterally a opportunities front from there deep, I so any that mind. going but focused and in strategic are standpoint, thinking am to what's are inorganic from certainly you both And on would stay of dissuade on, going I

that As on our focus it rapid matter of to ecosystem. over back the fact, a turn evolution Michael, is of to I'm going think I

So anecdotes Michael, if could to some you add that?

Sure.

traffic a at demonstrate smart selling our opportunity. market, XX we which North is there's as that they ConneXions, really and foot like a fact else And can because that's that have and and security fact, market see demographics, solved we broadband cyber stops, aid really that's have Smartcom our a in the struggle different. range that customers We that's a connectivity the partners with the the of day biggest is by marketing you great Wi-Fi, has that every speed. we it in Smart radically everybody to before demonstrating with looks we They this see been service, fascinating of have market in business kind see by business, That information. then industry built top I And experience at analysis, I things great who actually give rate problem, into it at As while we smart services we as services, platform bring a whole that of the really a business. because see been put few pipe businesses not this that technology going things integrating beyond are America. really single million seen in all a build partners services, And evidenced issue. incremental never can on that reliable Telco. we

spending us, for the for a right for partner find partner is opportunity then have So partners land, our the to it one-off lot every into and time to would single of customers it’s where that as provider. my another past the service an just identified them. with platform our opportunity in every time, I'm group, this integrating And we broadband integrate

they X,XXXs by opportunity have with and homes tens We have explained providers the us of of millions to and broadband businesses. reach once to them integrating of service

reliability full service and XX, home every eight, quarter, are home And to around And for the about service office provider that, to office. Home will We you additional talking announced nine, start. [indiscernible], so they XX also do what and releasing last which did our on be two XX, allowing we a us, is huge we services that just that's think ahead. our security security more. small would and it's opportunity IQ, local a is then [indiscernible] a because piece, then

your Carl say the would actually as a expand speed-based provider the provide do To said comment, broadband the pipe recession. go that that one marketing actually that on company, I open want not who recession provider is to suffer would I the focused is to clarification. recession. from out back and only service just to

More going just They shift paradigm we're seeing, significantly market understand to perception. fall partner broadband to that to customer. a the provider share not they're to losing to is open prey experience. [indiscernible] are service Calix This importantly,

Okay. Thanks congrats very once much and again.

Thanks, Tim.

Thank Loop you. Instructions] proceed next [Operator of with your Please line Najam comes question. with Our Fahad from question Capital. the

my Good question. thank congratulations you the as promotion morning, and on Mike well. for taking

suppliers improving off the Can beginning to like us down increased hand, hard the pricing coming Let suspect is other of you pricing. your have you sequentially? supply or pretty pricing can with, dynamics chain, But supply availability memory apart me prices from start the normalize? click or if through walk chain Broadcom double the in on some on I

quite we're to no, at still contrary looking January no. so in I that. think, price X, increases Generally, facing from fact,

come So no, I seen way. material have not prices down any in

starting pricing side, on that see we down said, logistics. pricing On you're to come the your yes, trade freight

next But the for to components begin will over pricing four your expectations that is Is it quarters? normalize?

So next every normalized to, down not meaning quarters. No, quarter? going those in old went stop mine. going -- are back looking good days or the four I up, the But you normalized if like, so mean

ability benefiting ship look lastly, guess, driving revenue thereby gross Okay. down the improving volume. And just outlook, by if I and costs and driven coming your freight and to then higher more margin we from at

think and profit -- to is is are going point Your much to profit in outlook? your that historical R&D. to grow how gross do it? ability gross is tied your about I R&D than that profit, spend that you thinking framework? of opportunity How gross invest suspect Or line there faster is your at your an to XX% you still pretty revisit some your

Okay.

you start of the of So logistics because pieces. of which margin, started, going let where was because up me notion other or gross

not clear, be software is logistics the slow towards drive platforms, the margin me more mix expansion, business, our down, lower as what the so component Let costs will cetera pricing mix in or costs. et headwinds

remains we as saying, expansion all said, each just We our some at R&D, same. in what piece. are So point down. should On investment some to model happen, that's the that to that's the margin first and see isn't start has the OpEx headwinds we've time, so quarter slowed

We're a growth can of our at do our do target. XX growth That As about best your reminder, it. invest, points we rates it's these that's gross to said, going product of level profit. question to

to so of Slowing at level be now our innovation a because not The that has invest let platforms up We quarters right of and are that because that, commitment we level expand executive seen continue quarter an at as this before. the been available. at we to do their most never has me what's go would that leadership subsequent the be goal point expand would down on to growth Yes, team is that. fools and wrong. and important through ahead fact to and this that significant opportunity is maturity that us allows

forward comment late the because react unattended by Now revenue last thought, the can't of OpEx, you on in of one to inventory. quarter because that pull came quarter that. That this additional in

So demand, our model. in staying this going quarter, we fell to more behind, on we as model, but stay to BSP chose that on given what satisfy But that's do. the opportunity we're focused the of to

bookings trend and can clarification, XX% percentage you the where going? One cloud What and in give think quarter are last was share the software. as us quarter quarter, this in more that that. going from some Appreciate your is in you and of the mentioned come fourth platforms if that I all to -- services a line bookings

in that In said this we'll what this saying if ecosystem corners XX% as I'm there. Yes. close the used was right, at but in you is that's That would did when, point only you the can that in over a we Calix the of Calix, far assume called was X.X, to to QX, been doing of XX% the my probably and my company, pretty we back XX%, be so company, mirror what platform going way, point, now it we've evolving the was, sure are may comment. rearview but CEO systems transformation remember. that I we're see across so of way was that cross I Calix sort QX, over we be that from it Either it as Janelle, am a my happens. departing that it's company, -- into guess. an point above fact

clarification. the Thank Appreciate you.

Thanks, Fahad. Yes.

you. Thank

proceed of Please Our with with next question comes Roth from the Capital. line Searle Scott your question.

the questions. new and Carl, for taking Congrats Thanks congrats Hey, on going forward. roles on good Mike quarter. my morning.

you. Thank

you. Thank

just dive some the clarification a think the I looking Earlier in had going in the step maybe medium get you big mix quarter. mix growth in addressed call, and of at and Hey, customers forward. sized up

there of customers want that pretty like sounds are contributing clarify to Just a that it. it's to it mix diverse

on couple all good, new expand a in Are Is -- not I going adopt new guess follow-ups. the ConneXions, expect what's driven lines, into most year-over-year. should And driving then of there? this performance trying we to to event, as so that a terms big bit XXX% dynamic customers which the a not one-time seeing talk I continue pre-existing think quarter? growth if get line a you're but platform? little the go what in then at bit had recent that this Could color were AXOS of that to starting going up had we you And quarter, looking new I about a And little more of of on was both forward some XXXX?

starting Yes, customers it to over where medium Scott. sized be It let to be And you, Be on general, AXOS and me just is careful going where in smaller to you're Michael. some customer medium answer because for set larger small noisier a But I'll by way, it's if set, sized much the fees, it some size, themselves your fees you're see disruptions, can statistically, and sure. up, that trend the XXXs shipments, quarters you larger the on to it's is hand a noisy, of about going down. in quarters so again medium think see to also the hopefully, this sense but so in the customers take of on, it's makes customers. is

Yes.

and going growth, AXOS, to over for cetera. to And et that I'm turn Cory Michael.

Yes.

on a I big Scott Part XGS catching margin to some bit up on was that it quarter, of and a performance. some inside we backlog the of gold over that pretty AXOS about that saw So for piece, on built that mix. to mostly little that the cards earlier which was expansion had screw talked the led we up contributed that product

you're sounds you confined and And terms terms starters, ecosystem that Arlo, that be Couple more offering I growing ecosystem, experience Servify with to I of us wondering I and Bark? on number opportunity front. for there. level product attach partnership beyond kind what Carl, back of you think like about the in about how like then expanding if thinking in it maybe the of to then out partners talking out the to was curated ecosystem seeing offer of and could excitement and Mike, the services. a providers. existing this the update in rates, expansion jump things again you're about general, earlier if thinking partnership that interest in you're it of ConneXions what about But basically and that, of terms the on there broadband and that on of as it the talking of Thanks, growing service might you're helpful. virtual could Mike coming I And very was Okay. sounds in beyond the are going

the the go So of become because in of of level your it you something menu interest terms of bigger, installed does can base? Thanks. services that to pre-existing

Yes.

let were for as in. over show level, you real all We to starting say it a ConneXions, taking him was quickly, very it I'm at would the that early we to preamble, reception, said very as with remember be up. successful And from And going conversations to it's customers Michael very step it. days. partner it small just a they ecosystem then turn now of Scott I up, So ConneXions. but had four our number But just another different and a

right? market that the that platforms big back medium there that massive do. I the a becoming and It's sized going huge ConneXions at access or longer So companies democratization and opportunity actually They this our the What have because a lot past, In no transformation talked a thing of first seen of have have that's medium. technology, to what the advantage. They a they're medium, the we've is the advantage. I'm seeing companies, this small we're with creating. to to that go is the bit about you're is little small

of big of that the smaller a we're would agile In medium because will and technology significantly argue be all versus fact, a bringing. in marketplace more company, I innovation the customer

circles and them. you a as pipe in company, offer the it's grouping, there's recession they run just market, goes around this a a that's So right? all of kind will forward, If company to back the that Calix around customer look question previous

a What this And some represents again, The second a we service. is at part the about word curation interesting the and your we value in use today to And service an that is their right and is of bill. no your of they and chain, actually really what for experience the great to they can infrastructure None, That's value. time. we it point, experience. understand on put do no what they my because a with ConneXions is everything, it they managed put that have right? the offer extent provider service importantly, subscriber it to our right added add part my as Kate, subscriber also DYI to or of in more home that's the and ones brand, -- lot be say not has what address of had do. But marketing consumer myself the the opportunity of past, I and position is it an and platforms would value. whether that with in or one it, experiences. we basically that value, it over of to list talked it top to but pride it what insights, a And insights value capabilities laundry a take end is the now huge phase, they service in business service opportunity done they that control just is we to onto curation, this can services at Calix those into this small we put from, hardened is the third foundry service fully we call any place. like a managed put do for And where right really these and completely the where goes transform it it support different into a experience have subscriber convert all to provider And fully now

it's would if not dictate no. you're I the curation So that I actually word say to number, call would it, small a using

managed of just volume. the us Calix with as of service? broadband doesn't by come they're to a do and their research If doing is dominate that their it into curated, Yes, beginning really else. be what created offerings evidenced eight, lot paid fact partnered fact should and market you're but a because completely And XX, because of get are going on the A clear. we be nine, saying to our XX is be everybody that to the market this provider to unlike going customers service

It's heard was And way, for just I there right, front, the what target Mike, I behind Cory this the been still been to profit. spending there. Even to just you're by Perfect. I has the towards, job difficult Great your lastly, of to want correctly, number Very R&D on going door gross though below I it’s you're of guys. high Thanks trying clarify that XX% growth again, in environment. work that, think, a but the description. that's helpful. the And target get on quarter. just two in was kind

Thank you, Scott.

Thank you.

you. Thank

with of Our Capital question. Hallum with next Please Craig question comes from the your proceed line Christian Group. Schwab

on Hey, path transformation guys. of a the multi-year you get which lot Carl, of journey of congratulations a that company, doubts would us to. our many a successfully on along had

questions Michael, any other than the congrats on to that. they've opportunity other about asked. Thanks, to the congrats I all So ship have steer don't And statements, been guys. forward, those you

guys. Thanks, Thank Christian. you,

taken analysts all opportunity much by us. and that of has to the as bit for you but you use hanging a It's Christian, been the thank appreciated with throughout let us you very me on an know, to, it call. patience, to

So thanks that. saying for

Thank you.

Our line with Silverstein Cowen. of next question. proceed Please comes your question the Paul with from

do of cetera? What but sky in inflating terms Could work. that, et asking, guilty macro other I be notwithstanding chain, supply better? could Or the I'm specific, Well could after you still than for you of is wrong? future. be about? your to the have seem and obvious most What how blue Well, doing how you the go to and ask. fine doing you Company what worry you

Paul, are you me, are asking asking you asking? Are you whom Michael,

would whoever actually respond asking to I'm the like Carl. to question,

them? Michael of or or both You

you're functioning on focused as my words, it. our for I'll Well, I'm had -- success. are, customer From when answer never we perspective, loss a so

not opportunity thinking growing. execution making eloquently you've opportunity that how and just think the heard we're every we one is grow through rate As macro curating speak I'm standpoint, and doing on this. I the that strike, could you could the is execution. a From a The there's outbreak colored to here for. war sure day very at our major me, see Michael, this number focus is if these I much trying mean, to that about an very common I of things things If not plan Trevor's But do plan there's not glasses. for. or are you

the very is doing tying about customers innovation much and what with, things, evolution make rate much these that but of our for have on this executing that of inside very that example, together and R&D they're sure uptake. meet executing been domain There's path, investment for to. we can So the all us we

That an in So that I exogenous way. do not event. us see threatens

turn Mike, you would out anything?

we've and demonstrated execution actually quarters team I last The is I focus think the execute. No, can agree. the that over executive for we

And we’re a of so on doing bringing people. new good job

this are We from Our would cultural new -- that's opportunity actually reflective time actually evolve. our you it. culture means how I better, worry own every is self is company. to to huge about and think I never culture about better, we best say not focus, say could be us as culture, continues my which all these but people think brought single for we hey, say, a about one

we a as better. and about team, as think keep this teammates, should changing You getting constantly leadership just that changing so

So, no, I think it's an exciting opportunity ahead.

translates that better, hurdles as the many saw come on from into coming of success environment customers from how Michael on our stage you customers. ideas best also elucidate And of from that customer never ideas the we're better, with working ideas

the really were every a that's one big ConneXions single important announcements And that add there of a literally and did lot. point, we

lead sizes, we with seen It's in our I I from customers are. different We're that team last already CEOs, pretty leadership all single one board two said significantly. they lot You said that also the a the in on that customer in customer. thing from all which expanding I week. did three, segment through right? advisory keep one success, came would larger. investing us stated to us, said, stage have the a And announcements where of GMs, industry. we largest The announced It's just they Every

they said, engine. we're that thing other is doing B.R. The innovation

to see are in innovating are market, the we based analysis experiences bring oriented we they market, what lot what the the data see in. we with in a them So that what upon right pick of

ahead for us. So there's which them, for a more opportunity a lot opportunity great there's ahead

I I think ago But to for [indiscernible] are goal Carl, notwithstanding sentiment. Christian calls. will dead my the watch. It's echo having long congratulations watching saying It's not been conference gone break where me so in Okay. on you fun all to walking today. from

Thank Well, we appreciate part you being also. you. for a

Thank you very much.

Thank you.

proceed question of your with Najam Fahad with Loop line comes question. next Capital. Our from the Please

on follow-up it as Thank you. risks. I actually he on question the wanted reframed to Paul's

partners It that Calix biggest big the marketplace? I Let ahead do of this a like you how on me sense do Telecom version And opportunity think of you, Are can to trying version opportunity? what and ask marketplace you seems this focused be is get going the an become or call? to Amazon the Telco Amazon, you're ecosystem, be?

So question going where close this call and our our is we're with on given to evolution. and your question the future

Michael. here's So

Actually, are the solutions very the So them take that a services hardened carrier this. UII what is the of This about is and we model would do see thought actually I a adds We marketplace very, the where that over distinction. very, service wrong provider convert a become value. analogy. important into we lot is top managed opportunity,

work. hope up You of things they can't just and throw a bunch

these to have on can managed partners service. for the product provider and I about And convert how elements privacy. a the a them educate you workflow give the best provider. and security, subscriber, their literally to security the all different with do the their them You make right of is into service service support take We handle thinks and example, how

versus So in that it are it's very something we means participant which significant throw hope differentiation, it active works. a just and a up

it ahead, investments all to about What's works these infrastructure. about so edge, huge That And because great what regards are ahead? opportunity the there is the that opportunity any with conversations the revenue thing heard infrastructure the we're a we've also coming. on doing is

matter So It network it edge will it with The is. network what is. everybody. doesn't work doesn't type what of it matter revenue

monetizing So we intend on the market. entire

Thanks a lot.

Fanucchi back comments. final Thank you. the any I'll for Ladies to questions. and floor come gentlemen, the our end time of Mr. turn we've

of Calix Presentations will you page today. us your the on events, Have everyone these Investor the This leadership our posted and again, and of participated events presentations, and a of in Melissa. management Once Information dates public investor all a calix.com. for this Thank the fourth meetings to time interest be Events during to you, for quarter. the concludes and including webcast number conference and webcast good about section everyone. and thank in Relations call. on Calix call joining day, from

Goodbye. This concludes today's conference call.

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