calx-20220402

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended April 2, 2022


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

For the transition period from to

Commission File Number: 001-34674

Calix, Inc.

(Exact Name of Registrant as Specified in Its Charter)


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

2777 Orchard Parkway, San Jose, CA 95134

(Address of Principal Executive Offices) (Zip Code)

(408) 514-3000

(Registrant’s Telephone Number, Including Area Code)

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

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, par value $0.025 per share

CALX

New York Stock Exchange

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

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

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

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

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

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

As of April 18, 2022, there were 64,611,837 shares of the Registrant’s common stock, par value $0.025 outstanding.

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CALIX, INC.

FORM 10-Q

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION			4

Item 1. Financial Statements (Unaudited)			4

Condensed Consolidated Balance Sheets			4

Condensed Consolidated Statements of Comprehensive Income			5

Condensed Consolidated Statements of Stockholders' Equity			6

Condensed Consolidated Statements of Cash Flows			7

Notes to Condensed Consolidated Financial Statements			8

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

Overview			18

Critical Accounting Policies and Estimates			19

Results of Operations			20

Liquidity and Capital Resources			22

Item 3. Quantitative and Qualitative Disclosures About Market Risk			24

Item 4. Controls and Procedures			25

PART II. OTHER INFORMATION			26

Item 1. Legal Proceedings			26

Item 1A. Risk Factors			26

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			39

Item 3. Defaults Upon Senior Securities			39

Item 4. Mine Safety Disclosures			39

Item 5. Other Information			39

Item 6. Exhibits			40

SIGNATURES			41

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PART I. FINANCIAL INFORMATION

ITEM 1.Financial Statements

CALIX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)


	April 2, 2022		December 31, 2021
	(Unaudited)		(See Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	44,369	$	51,333
Marketable securities	168,756		153,002
Accounts receivable, net	87,952		85,219
Inventory	105,016		88,880
Prepaid expenses and other current assets	34,129		30,811
Total current assets	440,222		409,245
Property and equipment, net	22,307		21,783
Right-of-use operating leases	11,796		12,182
Deferred tax assets	168,685		168,962
Goodwill	116,175		116,175
Other assets	16,061		13,685
	$	775,246	$	742,032
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	37,553	$	29,061
Accrued liabilities	71,764		71,597
Deferred revenue	32,261		27,478
Total current liabilities	141,578		128,136
Long-term portion of deferred revenue	21,189		22,016
Operating leases	11,656		12,376
Other long-term liabilities	9,018		11,076
Total liabilities	183,441		173,604
Commitments and contingencies (See Note 6)
Stockholders’ equity:
Preferred stock, $0.025 par value; 5,000 shares authorized; no shares issued and outstanding as of April 2, 2022 and December 31, 2021	—		—
Common stock, $0.025 par value; 100,000 shares authorized; 64,612 shares issued and outstanding as of April 2, 2022, and 64,274 shares issued and outstanding as of December 31, 2021	1,616		1,607
Additional paid-in capital	1,014,336		997,855
Accumulated other comprehensive loss	(1,552)		(320)
Accumulated deficit	(422,595)		(430,714)
Total stockholders’ equity	591,805		568,428
	$	775,246	$	742,032

See accompanying notes to condensed consolidated financial statements.

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CALIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except per share data)

(Unaudited)


	Three Months Ended
	April 2, 2022		April 3, 2021
Revenue:
Systems	$	174,426	$	153,302
Services	10,522		8,772
Total revenue	184,948		162,074
Cost of revenue:
Systems	85,913		69,663
Services	7,243		6,169
Total cost of revenue	93,156		75,832
Gross profit	91,792		86,242
Operating expenses:
Sales and marketing	36,091		28,051
Research and development	29,817		24,364
General and administrative	16,031		13,025


Total operating expenses	81,939		65,440
Operating income	9,853		20,802
Interest and other expense, net:
Interest income (expense), net	35		(125)
Other income (expense), net	(68)		88
Total interest and other expense, net	(33)		(37)
Income before income taxes	9,820		20,765
Income taxes	1,701		150
Net income	$	8,119	$	20,615
Net income per common share:
Basic	$	0.13	$	0.33
Diluted	$	0.12	$	0.31
Weighted-average number of shares used to compute
net income per common share:
Basic	64,489		62,554
Diluted	68,405		67,019

Net income	$	8,119	$	20,615
Other comprehensive loss, net of tax:
Unrealized loss on available-for-sale marketable securities, net	(1,161)		—
Foreign currency translation adjustments, net	(71)		(35)
Total other comprehensive loss, net of tax	(1,232)		(35)
Comprehensive income	$	6,887	$	20,580

See accompanying notes to condensed consolidated financial statements.

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CALIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, unaudited)


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


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2020	62,122	$	1,553	$	948,055	$	(191)	$	(669,092)	$	280,325
Stock-based compensation	—	—		5,171		—		—		5,171
Issuance of common stock under equity incentive plans, net of forfeitures	729	19		8,620		—		—		8,639
Net income	—	—		—		—		20,615		20,615
Other comprehensive loss	—	—		—		(35)		—		(35)
Balance as of April 3, 2021	62,851	$	1,572	$	961,846	$	(226)	$	(648,477)	$	314,715

See accompanying notes to condensed consolidated financial statements.

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CALIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)


	Three Months Ended
	April 2, 2022		April 3, 2021
Operating activities:
Net income	$	8,119	$	20,615
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation	10,467