Calix (CALX) 23 Jul 242024 Q2 Earnings call transcript

Greetings, everyone. Welcome to the Calix Second Quarter 2024 Earnings Conference Call. [Operator Instructions].

As reminder, this conference is being recorded. It's now my pleasure to introduce your host, Jim Fanucchi, Vice President of Investor Relations. ahead. go please Sir,

Chief and quarter everyone. on XXXX President Weening we Rob, Sindelar. joining the you our have and Michael CEO, second earnings and Officer, good you, Cory Thank morning, for call, Financial Thank call. Today

call the yesterday, Relations website. a news also on the closed, Calix X-K, posted be and section was along Calix with will in As release, after issued conference of webcast was Investor which of for a the replay Today's Relations market Investor reminder, letter our the furnished Form a available website. our stockholder in section

Before the by to Michael actual remind to will from future its company I statements, operating will for want this materially those on remarks, contemplated forward-looking call, make statements. we growth and about forward-looking I call outlook turn and strategy, everyone market the financial results refer statements his performance, differ all over may these to opening including

financial quarter respective second GAAP XXXX their will included letter to referenced GAAP on stockholders, measures. this information results reports trends obligation differ in any the to call, A Factors which update of that in be the discuss quarter annual the non-GAAP. and conference as to statements, letter Calix only assumes and to of otherwise we Also dates. SEC. set speak this with both could forward-looking quarterly reconciliation materially and financial forth stockholders the XXXX and call to is second all in noted, non-GAAP non-GAAP filed in will actual unless no cause are measures

please the call go to With that, ahead. to over turn it Michael. is pleasure Michael, my

Thank you, Jim.

strategy. demonstrated the and the in execution of second our strength Our quarter results

investors enable segments value go and again, services market, dominate Calix. our unique delivered to innovate or consumer X% the and Our and continue markets subscribers their broadband Once customers and continue they model municipal as managed services across platform, cloud to business they of record of for our cloud managed new our grow increase to ever-standing of platform, through the business to to the simplify in to Calix their the operations turn, as turn serve sequential managed broadband and capabilities members, the markets and their in margin. led in of services. competition RPOs win growing BSPs Robust and platform cloud expansion Calix to face the gross to a

who from the best As crossing lending QX. chasm, footprint we by with started in their QX, Calix up the customers is transformation evidenced have discussed, market with our is this business new BSP and in XX XX

Our many, appliance into This quarterly setting largest orders platform growth cloud we to deal, new forecast and gives business the new many smaller continues our record. QX. team And managed closed QX into more in and a to momentum a is see the as us revenue confidence where normal a services return of them. recently sequential settling our

to results that, quarter. our Cory first turn it review Cory? to like over I'd for financial to With the

Thank you, Michael.

of revenue quarter was The in and range provided million $XXX disciplined within we delivered quarter execution. represented another guidance deliberate We the second of which April.

XX non-GAAP saw to strong our the up our new with X% platform year-over-year. up $XXX $XXX RPOs, XX% and a grew million Remaining performance service As the in managed sequentially adoption journey million, $XX were platform, to prevalent obligation, customers $XX growth cloud us, the cloud continue current for the industry, XX.X%. In is their XX% This we XX first continued drove or services increase the quarter, we are or in sequentially XX second customers deploying beginning the crosswinds that up of quarter. and year-over-year. Furthermore, end or our at X% navigate record million and of margin deployments still platform additional gross with of time. an and managed RPOs million

and customer subscribers adoption As and of services. cloud use RPO of managed new expand in their our our the new continued reflect platform add increases our before, we've existing the customers platform, add discussed newness, and additions offerings as

will As a outside and operating quarter continue to In to mostly were the result, non-GAAP million, grow. we $X second expenses The XXXX, decrease million is from fees. professional expect attributable of services RPO the $XXX quarter. down lower prior

with said XXXX level As ahead of investment investments. great government to for U.S. keep opportunity believe expenses, this the relatively investments, XXXX plan our is we of as represents to our before, expected have a operating expense broadband footprint we us grow consistent

of sheet sequential strong. $XXX a increase X.X, our metrics balance balance investments of inventory was and cash debt-free This Our the remain were component increased. flow. were Inventories down sheet free million. from consecutive $XX million quarter roughly DSO cash double-digit representing end our and quarter, over At as last was of the quarter fifth XX. just X.X

have been working reductions, bringing inventory operating And deposits cash free flow. deposit million, with -- we would decreased total capital to turns $X by inventory million. inventory to down result and double-digit in $XX consistent continued free our our operating inventory, combined profitability X.X component will Furthermore, Excluding expect quarterly

acquisitions, will Now believe quarter on XXXX, here. marks for let's grow bottom the discuss we Based from third and revenue new for the the current guidance trends customer the ordering we and quarter. second

and our XXXX, is between revenue million. $XXX third to For million $XXX of quarter the outlook

of In since terms we've our call. of seen FEED, last a progress lot

$XX there billion XX only of state, and states the has As steps, steps through completed here XX ago, all approved of X quarter territories they we program. Louisiana, a program. Today, the said are $XX XX all represent billion and

early that the in accelerated, orders begin getting will XXXX. believe have XXXX, we we While approvals

in summary, quarterly we a revenue XXXX, to and in return QX sequential low will for represents In point revenue growth QX.

growth which time continue customers add We our BSP new objectives. to every quarter, will support over

our and each and addition, our platform services grows margin In expansion. driving cloud gross RPO quarter, managed

operations chasm. back in expand you. footprint the have industry the invest which the industry, as balance pristine our capacity our We and most financial to the Michael, our us to in sheet gives process

results disappears QX, industry stress expand significant across chasm as continue consumer, the customers the crossing advocate meet winning continue model Throughout serve. as day. In business our platform, communities of services to the quarter, investors as a broadband critical to engage to every with to and early It competition sequential closing, business margin, differentiator. accelerating. With business operators cash the on legacy our with adopters deploying commoditization to their our every power our it is of customers the risk supporting that as network our speed from X,XXX the the quarterly platform is returning growth broadband their them disruption under an Cory. shift cloud they remaining the driven is funnel This grows with discussion is model increased and I Thanks majority, they face to mindset to from and revenue, of customer is in sizes expanding to managed win? while all we of BSPs as the experienced achieving flow same. our model confidence unique now succeed. prospects incredible How speed the and platform, which expanding is satisfaction opportunities by revenue to customers and of single and enables existing The winning an early

BSP on allows sheet the together, win steady that to strength Jim, term. call our financial support execute expense our as succeed while And and their a customers let's investments disciplined distraction without us open questions. long operating maintaining markets. that balance we the they have hand We and the for for

for Thanks, the time, up you at lines Michael. Rob, questions. this can open please

Instructions] [Operator

of the Samik from And line question Chatterjee is our comes first JPMorgan. with

Rob let's call to Samik We'll rotation. go next into the the one. back

from is Needham of the question line Koontz with & Company. next The Ryan

the the largest preparation. between characterize among drivers the there, rates tight On view capital environment would give there customer base? customer interest top you How of and and pressure the kind updated the drivers three of decline large medium cohorts BEAD the your on and behind an

it's customer the Well, It back phenomenon. I same. don't quarter articulated first the entire and fourth in the a actually, actually large it's across this goes base think remains what we've think and quarter. to I

with to is, going So the they're decision-making BEAD. process regards that one first through is

complexity scenario. that seen that You've of the

it's Now then lot they and do that second are sizes, in and come small, talk on of clarity. again how focused planning finally first the extensively. Cory go now through medium to as that large, a can will making those And of that's That's submissions that to do they and all half progress right? their But teams companies one.

that has small we our is the an increase The okay, we're they're again business to -- and which should for we we second as one large, backing that them caused interest many entity they model equity or little the is we or years and has are getting medium private that that rates is, lows pervasively investors, not bit competition, contemplate say, high thing again, that that slow down a second the need. if need the forecasted in considering

a I year ConneXions one ours pivot which a year a investments thing Building and a really who speed comes US go ago commoditize. at is Telecom, year existing that the let's constantly I them, so really going room our into is the a not subscribers, really was if naysayer year new not differentiator. to was we the the bit -a event before, that I was seeing part and the down enough. that event set back is fiber in is at Crossing I And is we ago, Chasm ago same to It's which was a which of and big our needed win CEO

center there. the build community. And community a enough. the to there with You know They're as it, actually summer know keep that you been you frankly are well I'm were need ton our little model last and large years. the as customers aggressively what, of we've thing. were comprehensive own for like, ago, brand that And all they smaller building no, business same customers, going was into investors where I at a a this are and like, year saying all especially pivoting doing again X medium they message. the There experienced there I dismissive. is to

that our I business have this contemplating is now Crossing getting in Crossing and easier we what thought opening And that Chasm frankly, the Chasm expected. to We're our The exact I is higher XX add? been networks years not to that I the us, under Cory, the would. is leads competition makes to company we pressure, my building lot loads of because anything which for to us my than And a be a talked they're really thing have the remarks. subscriber ton opportunity the on built about it that need we model.

That's all, Mike.

that. summarizes That

RPO in event? a the largest that for Cory, XQ XQ of or your stated included deleverage platform And the was is that mention

largest the Ryan. our will bought reflected in in event, be closed to a in second history platform That we Well, cloud new a deal be in this and quarter company's call, number. is second deal. to out larger the then in That the RPO QX quarter clear, actually we run

that's record QX cloud new Managed a a and for set So Services. our deal. But

Awesome, that's has how across that can in give great. And months? any in XX CPE the product Cory, on color mix like, the say network in last versus versus the general quarter trended XQ us you

in talked seeing just Michael their Yes, kind seeing adding margins is gross less networks. that's what spending - you're of to terms towards what building subscribers networks, margin, and operators our about. out new working We're of time, amplify new for

cash flows and for revenue on them. Turning

our shift the product network premises clients from from so a of away towards seen our we've in - clients side. revenue And mix

Got it.

mix gross lower you're So for though got even there's margin, selling, software more up the that? than hardware, higher makes the

spot-on. is That

Our Samik from Chatterjee the JPMorgan. line questions is next of from

Michael, I the in on prepared mentioned early you about BEAD know, remarks.

material the in related follow-up. model it out XX whether really related you just XXXX. already should the address quick on wondering BEAD receiving that start you be other in seen how though revenues for are talk geographies And think be XXXX? approvals supplier to you to terms I sort the your ship Just even all or BEAD the considering primary is of from of how investors sort timing? And the Can where of share think of, plus in orders it have a from fraction just a Anything question about some we've in I can are? States BSO about of terms should how front revenues be can

starting talk and about our happy we around that. thoughts while Sure, been talking BEAD. revenues regarding there's we've about year, there are out -- Can to orders consistent that this others

the and $XX start Orders We have do billion. approved We be to of quarter the XX not what we will of that know first states orders volume proposals XXXX. know that represents it necessarily receiving after revenue. expect their receiving in ramp not to orders. start We XX do

seeing So XX impact, that were long XX as States call in would actually start you a I might recall enough on to our least to suggested impact we get there approved last XXXX. that at meaningful as an

XX. And so with we're sitting here today

now as [ of that's news. each program on an good certainly that That XXXX. there's map that steps So impact other have follow challenge to such there's available to But the NTIA's enough broadband subsequent money state's process. ] approval will the for

as challenges That So overcome last we a to for that with do large there's government program certainly well while. as small more said, will BEAD continues program with the we have every and XX years. for

Yes. Got it.

of cyclical your I'm large this lower we've revenue on in customers, terms them there is is, investors in getting mix share a with of that customers you've basis? beyond from the question from decline other headwinds your seen morning year-over-year market seen just the revenue given large the of sort anything some the Just with of

Yeah.

is than would we better be. it the thought So it in quarter, actually

better it's feared. So than

and recall that that re-evaluating and that The a thought have large it's positive a we and segment priorities. whole us. might it But did in lot their talked reduction back not QX. our again So And about obviously for and you encouraging was would as large they're of spending -- is sign segment than inside had CapEx medium of we in better thought. we that medium

getting decision-making on them So, of there's ordering with of out signs process kind their of coming those programs. and back

encouraged are by we So that.

think so a And development. I that's positive

the medium I to about their the they talked strategy. actually how if around monetization around conversation, the around listen starting finally stress which have business and is are There and actually large to they're anything, change and

So to in that done our ours with smart we around the used strategy business. closed and on Tier to clouds there be big them customer with go second quarter, has who closed X is not never a we of we a but anything done market actually

attach radically a different So, sizeable experience. how to actually their small business win very with base and

I now new represented would logos evolve XX who Those And as and so we operationally anything transform this companies Those share this grow to if change starting companies quarter. are are their want new and our the up. that and wins not is for with say business you Calix. saw to that that by added model

question is next George Jefferies. from Notter line Our the of with

in letter, guys kind certainly in I now? We've of hardware mentioned the wanted to I ask think government biggest the about But of of could you quarters. about talk about, a the business, you if about BEAD as are with recent impacts associated number funding. wondering we impacts I'm talked in in things, have shareholder certainly what think on side the the and right decision-making business the delays

adding about rank what on to times a We've just there Thanks. because customers towards do talked and if going lead they about a Or here? core you levels higher of talked is about a of think fundamentally shift important order order adjusting these rates. shorter. your are how adjusting of Is I'm You've lead different of guess times are? We talked are subs interest kind infrastructure. I here? terms what's how versus because about in map there factors wondering issues

George, very you clearly. actually them Well, summarized

you them be on If they're inside us to would it want different. I that company and the each stack to say depends company, going rank therefore

we since covered in been So we've let's and accurately XXXX. for saying so late multiple cover started you what is up this see quarters which what succinctly to

will the time. going end decision-making much larger BEAD. government be take on stated funding the than longer we've outpouring So that and the over in one much was that anticipated a as funding where to And always is there

on We're constantly to alone. times that -- the our decision-making, side, times inventory are. what actually ten where first that. lead from that about have adjusting, think also is that which clear we lead to I at will them? That as though been is we've I question get to issue we're why -- the SKUs. because larger. We they probably is had So down. to $XX in X,XXX stating you The is out answered enough customers response they comfortable And at that it's on clearly our growth so continues program a sequential our my like in the we faced this new me how point now a that fact normal of good stated get now are now dropped XX%, serve same appliance that thing to It questions of it quarter that also that they very it's kind the on to that given was entered which investors inventory when revenue significant around the times we're going They're has we return we lead XXX succinctly SKUs. pandemic is that with actually significantly while BEAD, and because it's billion times surge our demand.

We demand have optimized can any supply an are chain incredible we meet spikes.

And so that's great.

great covered the then in equity with you we're shape So the through changes. a they private investing abandoned And off yeah, investor, rates. were If there as I'm interest during interest that rates, pandemic. succinctly

back you fundamentally like achieving will business beginning amount thesis you anticipated. two take more we've fundamental build could that this a again $XX to now had which the and come lot shows pandemic getting what's go of that actually would or million fiber is And and what importantly I'm spell will stating. broadband. into If they're in ramp I the it's is win than markets, seeing had, certain flawed competition I second. I the ramp. And when a do I'm defaults have they starting raise of three joke at now been not fact money been and this and what could for more is that say, is, But willingly step you model be We've if and people wait years a I the and were and a you throwing

a of just the saying, with am to on Calix I'm always this. I'm penny on have it to that change of or to your working do but what things. How under Michael, So great is also I I to those pivot construction in back what their that's us. is because Calix XX sell money, and that, go yeah, they them realize only when hey you that was becomes you and having of market teams all say, companies. the fact business many off going the there. there network market are around do Telecom this win. a it's a rates were coming that going in why and the done is XX% there interest not broadband - yeah to and great great but was because rates ago impetus go community that I and you're are attention an good company. And of working my higher leading for so NBS go are if at stress I like and And back significant becomes how second, reason when actually people lot construction with what huge and I to right? them saying operators, when flow whatever conversation shedding are it I'm a this right frigging get and some get kind need that's massive stated a companies wait there , of US to, need Great has whatever And shares are year these Michael going that's them the where's were that? And that, we've ARPU, management margin cash investors to interest I all model conversation, incredible that go and are that you Tombigbee to what have but

this with model the say are an So You just to Cross business. having would us. the I Chasm interest to impetus needs was rates, right? need to change, your conversation that

because essence which the your those subs then I or if if you're led then ALLO is, our about load Because are very so of then, to Tombigbee infrastructure you're thing. are your think the your rates strong. and margins subs same are a thing winning And or customers versus point a in succinct so third interest of who other like shed cares many

are Your so rates take high.

on Your massive. is return invested capital so

If your a care. don't you'd You rate, investing it huge share because still yielding market a be was investment. return on is interest XX%

depends it so, others are spot it on difficult to And customer. you rank and the for on. it's say, all us stack George And just

these well, partner deciding to become network the ones are and XX quarters a to companies. quarter. I'm with new are are broadband is change Calix - service model. that these and actually providers so, what that back to, the operators XX go a that's And business I this and adds, to This going my not decided -

industry. that's And the the - so, is market, that that's

last times, Got a it. quick Or quarter On then And year? at lead in more on we we all been lead -- one. times one are stasis lead And quarter? just have lead times times.. what was reduction there versus are this

consistent We've our XX lead with been weeks. times and this to it's year, XX

line question Scott Searle is the Capital ROTH next with Partners. of Our from

sequential It's growth of quarter year. looking X. Nice like the half for for hit to the and a couple put it Mike, go the Tier into on share sounds to be May quickly share within you're see the back just questions the of gaining we in as bottom second

there Tier terms Xs as wondering many have gains might the categories? that they you your between the in Tier within would in going could look some these wondering and is the thoughts what share more and starts we -- better a And with Clearly, Xs. But look specifically early that. of I if kind I of guys consulting you So those to know share you Tier guys be BEAD, BEAD to thought was process with you requests. I'm XXXX. you X, terms think like constant then been Xs roll funding have BEAD to Xs of working of address in wondering if have what is as I'm positioned market in

So, lots in.

there. in to of couple questions complex So,

would about customers of So share that examples we're that actually growing this taking, because quarter that way they're the that adding markets share. with serve. They're they the business in one best winning the with the of why had actually and investor not taking meet think And the is customer we aligned one is that a or we whether be share they're to they first market their subs. small regards group they're are

think think that always share, this that customer. the then the we business in that allows X to small on then way. subs articulated to actually talked of them back And have like. is underlying strategy we've a success about solution. that market which us demonstrate of about when is, So The we're business we it a this platform our looks adding the uniquely way one into Tier diverse things And goes we find that when to beachhead positioned very what we to

with business with who And that the business coming our to improve ARPU. slow solution. -- that's regards small are chose pressure to they grow were small now I under customer churn. in. why I once and entire So I that is - they the goes solution one, to need to need need into revenue platform

So we office. We easy into back the hooked success. continue for as to they it's into to and processes them the business hooked see expand

it beachheads with small customers to then into team So that we business, once with expand we than time. With our transform to like different the that share go our most garner the about is is us Tier a others. process that help win to radically in that BEAD thing BEAD whole have success bunch hopefully strategy, customer us for gaining key X that we small regards flood of then over and way their business consulting, market new customers

cloud providers to understand service BEAD. in QX when broadband You announced tools Ready.net software has with saw we relationship that actually and the help incredible who

glove. And so, hand where in are

care the only I are, actually beside to who others of them while pitched So in, BEAD in them in, ones programs by with hey, submissions, a are They're the long putting in and get the then some to and who is X, got you And state Tier hear our lot through win put do regards you the they that they win to had going of what clearer will local are P&L and their do and and things was be and communities. a able to out bigger a in I They're orders in also with state advantaged care in term. that's They're know they massive that in centralized reality whether actually the have are and program, there cooperative who that's is got planning we're of just have the grossing they'd you've that significant when I'm But the arm companies plus hear money we how a these how articulate different advantage office. if Tier do then Tier a in are profit DC some orders lobbying local clearer. With beside and they at want actually got state and touting, the that community. speaking that helping ensure second one really not office -- timeline. DC that not outcomes. By have could the a said the to actually are through a companies down team, they're the about into what it. We've half bunch heard about about them implications kind to in Cory X, the money. Because side Ready centrally, as be for and big they're to office of that they would local team win is single to state-run as that or this a a that they as voice - lot the of Washington partnership projects, people the groups, and X, definitely program in side of who because the influence for that was the a sitting who's scarp ones everything like they a are well a having past. other this up a state-by-state the and territory-by-territory

where you've it reasons process that that's the state. frankly seen to powerful. democratic really BEAD has I that's at of process, advantages diffused been the the so, the And definitely both is time states out and think about I very a care while different slowdown that think in companies been same the And one the

think I So bottom-line…

to BEAD a lots program. just there there. big thing programs Yes, it's state lot But Michael. Scott, out government of amplify one I of is are single A just a one. money. think on

do going taking result very last people fine well Calix do of for as well just and with a to advantage as so very had customers years Our and well. of programs. XX We're government does and this these

Got it.

not words their well through your pretty that but sounds programs share correct? going current put participate should customers Is disproportionately mouth, and So BEAD it broadband to your in in forward. like

are true and guys right? is locations are parts most These particularly line then of are the hard the rural you country. thinking That these these

that the are these so And ones done have lasts.

with prospective And somebody get so to those locations. investments to to make community-minded hard be go a willing it's going those after to

So we to think the those players that will go disproportionally locations. to lead after foot smaller

the kind States territories, BEAD I'm about good you Cory we also you XX% talked of shaping your feeling I enough last quarter but green like contribution thoughts or could XX into if could certainly and about that lastly the that seemed it is front range. back 'XX wondering into to shoots And you on get BEAD to 'XX up be conversation. follow-up, you'd you'd if a to right, growth be Great. look year think if into a targeted get on fold XX% update transition was XXXX. pretty said, I there XX the

Now we're States. at XX

nine You've XX have got states another of XX steps. out that completed

have timeframe, that this could So the doubled call by October the you have we time number. in

thought layers of growth Thanks. kind that I'm of for into process in how 'XX. kind wondering BEAD So,

is that What where of normal here new order seeing think in rate the growth I that platform, Scott. seeing managed growth deal appliance the of and our is at return as services establishing that them. footprints put sequential combine from smaller is us in you're we're the in same sizes, is, What a to as There's here evidenced XX growth. we've and Thanks, and with with landing small side the our what to many, by we're you're customers. on new sequential evidenced largest this like the trend demand cloud, quarter, you but that our When signing going ever new more healthy now. the revenue by on orders, look X% many a we're of poking bottom QX, cloud what robust quarterly

going so that cautious think we've forward. fact had we're be few I side the to quarters appliance it the a very there shoe a the last going given about is we and -- take on will pragmatic

had that of it as XXXX, a of continue at not quarterly several talked the we at -- I quarters and we as lower think BEAD several seeing What acquisitions, X%. the large and for but through of end shipments, let's the middle we the shipments start here we rate customer orders, to look of will the we of as from X% contributions seeing see XXXX. move we by be to medium as will progress just gross back, next customers range the about return call we the we that the some that to start next quarters out end range as

So, there'll right those a be a not that now. streams there as bottom revenue progression this we're creating general into layer

time that at QX good incredible upper be a Yeah, medium. last definitely huge of in example and behind of innovator we'll a year small, And a and some the them. really they it customer in an of are money But took they crossover we've their to with amount the won would were had them that migrate to orders with doing and work all existing we And to started year elements. time QX year actually some QX first Calix. finally different They started see of the those their lot. later inventory over of rid to see the the actually is to inventory, this way range get

up and on winning in place new disruption beachheads chasm of X. or cross whenever the that on or can time use have a then apart I So, in we of Tier popping but stated to those we're of on single by that time bunch to and thing actually are we is is that this our key mentioned set is short-term view goal pop the win as take as disruptive basically this customers this, all that every with things a when whole whole happening

entire customer. that So in of of the becomes new an an the footprint beginning expansion

quarter. And we're quarter not next this that will in on this so, footprint yielded attack or not has

is laying will bottom a off to evidenced sequentially, on doing field of currently Again, we're the in for thinking green is that went quarter. right are new have what we kind XXXX it's accounts that's filing work shoots as term. And now now XXXX we're focused is they grow in and entire we win pay our hit huge the our Although where over we're but like about this net right in team way. leadership those outlook and the long team, entire

Tim Our line next Capital Markets. from with of Northland question the Savageaux is

for want here. I a second BEAD with to stay

into right? customer view if with we've approvals on seen have revenue comes standpoint, to updated supposed got I are maybe BEAD or company that guess We've opportunity kind the could I grantees any to where bring the the wonder from focus, there's billion and from as you mean table the program greater overall what the just greater a standpoint opportunity $XX thinking to of well. an this some I money understand As mechanics a

even that's little maybe bigger. a So

of think to annual rolling I up think mean from exposure on with when up do talked could have kind what perspective what that basis? percentage of to a Calix -- But we a an -- you infrastructure revenue network about you get you access standpoint. kind something a and BEAD, high-single-digit something significant do to from guys

I be question. think it So a And Tim, that's will significant a number. great

There's You've laid billion a off match. XX% the it's right? math $XX a program. So

be beginning start billion a put X-, time of to going $XX in over work. being the to we're It'll XXXX. frame seeing at X-, X-year capital that of over looking and you So X-,

So expected I amount rolling X% time number. our we'll to take get seeing it'll about and can think some is serve of that Calix that

X% over So next it's X-, very money so X X-, that a years. X-, the of $XX large billion, come will amount you of think

on programs own indication those And more your gets Calix its think it proceeds. to just kind put of fair of -- service will it its And kind government of towards you indication. rural the experience I do very smaller well ramp when we'll on providers so of to share those is get these with than steam. bias and past that any its areas any serving full

new I to follow-up new of color really or you mentioned a if in had that thanks. I could things I'm size of but orders the RPOs. And in starting order comment type one-off, that given kind me or like won't But continue context say to here. of sorry. that. current with Great this X I regard look broader big any big, we customer. on it If service the the drivers in expect it's couple if a asked with of earlier sounds to uptick seems you RPOs combine provider try I to the at of new with cloud maybe like order contributing, A, guess said your but And it that probably that you large big

RPOs expect QX play did you New QX? with mentioned see that in you platforms. those and additional the in in towards factors, customers in shift and three increase how which out customers also would Of the you guess, I what current

Yes.

is outlined, factors it are as saying. consistent to our subscriber relates The customers of what the additions been increase going factor be that you the with So adding. to RPO for one number those we've it's in RPO the

taking they're their So footprint. there share growing out

they're amount we to the cloud The last up And cases the advantage offer one they while them to expanding build is second new of it use parts is that the it. a takes customer expand contributor acquisition and so actual services. platform that are

footprint renewal X And QX and to large they've with over it customer, so in, last the this contract larger in get what a to the was further years size. customers much and back down QX and come they existing existing an you a in stream grown their

they the three next larger renew tends to that for contract when just grow. on base. that so years It And

So you're up. is contracts come this seeing as what these

is only contract size they take the base over biggest So but it's of applying did they're that's genesis platforms, our more not of that the so. it that of

So out maybe let that. expand on me

said deal to deals had So a record time. in sense, I Why Cory net as deal do with that the and been we've a ever customer they explicit They've two biggest with the these So expand as was committed for right? They've we want in long examples while. working and land a over use done adding QX been that us that? subscribers. of new do - a deal

The business term. platform enjoyed and we're last are together, right? of they previous us significant pay value a it there the commitment one where idea model, into as opportunity closed the cloud we we as the was long working a then a go, see it to significant the the that But made contract. They pretty was week over trying the out customer re-upped success, like then same you what essentially and massive identifying that laying is contracts

what you that's so, way on about that we the to And have think do these.

what platform we to the because the into was after they once to -- go, now a win ton subs, significant. that hey business then is, of they landed we in hey that the going some But and small want they price. they how small say, transform will new added significant commitment them lead -- Sometimes customer, better demonstrate our at commitment a we we're that wasn't we will And mentally, businesses. help happen point they'll our like a customer add their went business and

and actually a have Therefore and another we boom contract proper let's contract. do you understand volumes our record

us our CEOs And the patience. it This teams our consistency. so, Everyone to leadership going requires win here's popping I've are customers only bot, by business the We're ones going doing saying, frankly. them office business requires this No requires and PO a one besides win. helping to and into win. Their This else their And my customers. business sitting is we're little because seeing a else is. while.

smaller some carriers didn't you if the give expect may for that it XX%. implies weak on the Well, among color can of impact. less and down I the classification and likely And you me smaller that's more carriers I close color that you and some be shifting were think amongst anticipated that I dynamic you versus mentioned some the what had XX% they Conversely you one me. saw than and the appreciate last that to I medium us carrier little a there? segments that know large there's weakness all Thanks. for wonder probably But

smaller appliance And times. from that orders from lower level. revenue the really creating our for seeing normalized base you bet. we're customer our shortened new segment, what Yes, it's and as The lead the into

Our question Capital. Schwab next line Hallum is of Craig Christian from with the

Great.

platform X over in Just I competitive your our you Tier X, to a we providers process and think have Tier when right, in have Tier the -- by sales reality But gone the category. bit service advantage math X, different company little X,XXX there. we this you point understand all back of the go BEAD

BEADs released, so that your obviously you'll that buy deployed an FEEDs platform customer should have as out over time when platform. pulled dialogue they for is BEAD far And a is right, as money expanded and money opportunity equipment, and regardless software. But on is just of you whether

equipment in You you? shouldn't orders, should material increase see a

that ability our understand us managed follow Yes. But That that up to is then for services. importantly, true the Christian. and more its and platform cloud premises with hardware

pull of and look an forward model. to kind at BEAD our managed to services acceleration cloud platform, be as we So able

So in while hardware that revenue, the positive there it fact real, appliance is real an the our forward will business or pulls increase be model.

it about just thinking correct. you. it. was Yes, understood. wanted I to I make sure Thank That's

I'll Thank reached for remarks. to of turn the closing the call the We've Fanucchi question-and-answer And Jim over session. end you.

us. during Calix and day. webcast Once conference good website. on the this Presentations the and about concludes will in available and the participate and you, call. Have dates to a call Events page several for in Thank again, for events your our posted on these be including third webcast information investor times Rob. quarter, This and Relations publicly of will Calix our and you thank joining Investor events, everyone interest

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