Calix Delivers Upbeat Q2 Results; Shares Rise

Shares of Calix, Inc. (CALX) gained 2.3% in pre-market trading on Tuesday after the cloud, software platforms, systems, and services provider reported stronger-than-expected Q2 results, topping both earnings and revenue estimates.

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The beat was driven by robust performance in All Platform offerings and legacy systems products.

The company reported adjusted earnings of $0.30 per share, beating analysts’ expectations of $0.27 per share. Revenues of $168.7 million exceeded the consensus estimate of $161.52 million. The company reported a loss of $0.07 per share in the prior-year period.

Meanwhile, revenues jumped 42% on a year-over-year basis, attributable to all-time high new customer additions during the quarter. EXOS platform revenue jumped over 275%, driven by strong deployments of the Revenue EDGE solution, whereas AXOS platform revenues grew over 75%.

Overall, Calix added 43 new broadband service provider (BSP) customers during the quarter. Notably, total customers for Calix Marketing Cloud increased 70% year-over-year. (See CALX stock charts on TipRanks)

Calix CEO Carl Russo commented, “Our near-term focus is on serving the needs of our BSP customers, while our long-term focus remains on finding like-minded BSP customers regardless of their type, size or location.”

He further added, “We remain committed to aligning our investments to our mission, vision and strategy and maintaining strong discipline over our operating expenses. Over the long term, we believe this focus will drive continued improvement in our financial performance.”

Based on strong Q2 results, the company provided guidance for the third quarter. The company forecasts adjusted earnings in the range of $0.26 to $0.30 per share, while the consensus estimate is pegged at $0.24 per share. Revenues are forecast to be in the range of $164 – $170 million versus the consensus estimate of $156.4 million.

Barrington analyst Christopher Howe recently initiated coverage on Calix with a Buy rating and the price target of $58 (21.3% upside potential).

Howe believes Calix has an “economic moat insulated by its level of customer intimacy”. He forecast Calix’s gross margin to increase based on expected growth in the share of platforms as a percentage of the total business.

Consensus among analysts is a Moderate Buy based on 4 Buys and 2 Holds. The average Calix price target of $49.17 implies 2.8% upside potential to current levels. Shares of CALX have jumped 136% over the past year.

CALX scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.