A more diverse customer base, growing product sales and more cloud-based services propelled Calix's quarterly profits to their highest level in two years, as the vendor announced its second-quarter results on Tuesday.
For the quarter ended June 30, Calix reported total unaudited revenue of $111.7 million, compared with $126.1 million in the year-ago period. The cost of revenue dropped too, however, falling to $60.8 million in the second quarter of 2018, versus $82.8 million in the second quarter of 2017. As a result, gross profit for the most recent quarter hit $50.87 million, up more than $7 million from the year-ago sum of $43.3 million.
"In this quarter, we grew our customer base, expanded our gross margin, continued to demonstrate discipline in operating expense investment and grew revenue in a deliberate fashion," wrote Carl Russo, Calix president and CEO in a letter to shareholders. "Furthermore, with all our financial metrics either within or above our guidance ranges, we demonstrated the increased predictability that results from our all-platform model."
As platforms increase as a percentage of Calix's business, the vendor's profitability will improve, Russo said. Research and development costs will continue to drop, in large part courtesy of the company's agreement with Infosys inked this quarter, he added.
Over the past three months, Calix added 29 new customers, including traditional service providers, utilities and municipalities and international operators. For example, Gibson Electric Membership Cooperative (EMC) chose Calix AXOS and GPON cards to power its greenfield software-defined access infrastructure in Tennessee, Carol Wilson reported in Broadband World News earlier this month. And Sky Cable of the Philippines adopted the AXOS E3-3 Intelligent PON Node to transition from its traditional cable plant to SDN. It also deployed AXOS DPx, a virtualized DOCSIS connector, so Sky Cable employees could use anyPHY and anySDN with minimal, if any training, since these new solutions look similar to older connectors, said Geoff Burke, senior director of corporate marketing, in an interview with BBWN.
Likewise, more than 400 service providers took delivery of Calix's mesh-enhanced WiFi solution, designed to reduce costly truck rolls for operators and increase customer satisfaction. All these factors combined
"This led to the first reported non-GAAP profit since the third quarter of 2016 with a reported net income per common diluted share above the high end of our expectations," said Cory Sindelar, chief financial officer, in the letter to shareholders.
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The federal watchdog agency recommends the FCC consider eliminating the old cost-accounting program since it's more prone to fraud than the alternative reimbursement method among small, rural providers that receive about $2.5 billion annually to deploy broadband.
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