San Jose, Calif. -- Calix today announced unaudited financial results for its fourth quarter 2018 have been posted as a letter to stockholders to the investor relations section of its website.
Some of the letter follows: Find a complete copy, including full financial data, here.
"Our mission is to connect everyone and everything. Calix' platforms empower our customers to build new business models, rapidly deploy new services and make the promise of the smart
home and business a reality. We are pleased to have exceeded consensus earnings by two
cents per share in the fourth quarter of 2018 as revenue from our platform offerings exceeded
our plan while our legacy revenue fell short of our expectations owing to late quarter softness by
a few long-standing customers.
The revenue mix was an indicator of our future as we continued
to make steady progress on our mission. We expanded our addressable market adding 20 new
customers in the quarter, bringing our total to 119 new customers for the full year 2018. Well
over half of these new customers came from emerging customer verticals.
With this continued
expansion of our customer base, the value of our all-platform product offerings continues to
In addition, coming out of ConneXions 2018, we enhanced and extended our product
portfolio and launched higher differentiable value service offerings, all while demonstrating
operating leverage despite lower than expected revenue.
All Platform Transformation Accelerates in the Quarter
Our relentless focus on the transformation of Calix into a communications cloud and software
platform, systems and services business yielded further progress in the fourth quarter. As we
stated in our prior letters to stockholders, we believe these achievements will manifest in
improved financial performance across four measurable metrics over the long term:
- Gross margin expansion
- Disciplined operating expense investment
- Deliberate revenue growth
- Increased predictability
We are happy to report in the fourth quarter we continued to deliver on these objectives and
expect these metrics will continue to improve as our platforms increase as a percentage of our
total business. We will continue to take every opportunity to simplify our business and increase
our focus on our all-platform offerings.
Examples of our progress made in the quarter were:
- Rapid growth of Calix Cloud as revenue and bookings from our cloud platforms more
than doubled on a full year basis.
- Strong initial traction with our EXOS-powered next generation GigaFamily of products
with more than 100 customers in our early adopter program.
- Continued growth in AXOS as platform license signings were up four-fold year-over-year.
- Launch of new value-added service offerings for our customers including Remote
Monitoring Services allowing our customers to dramatically reduce operating costs by
driving down service outages as well as costly truck rolls without having to add additional
headcount or systems.
Riding the Wave of Disruption
Our vision is focused on providing the platforms and services that enable innovative service
providers to create services at a DevOps pace and provide their subscribers with an exceptional
experience. Service providers achieve this objective by building their infrastructure and service
offerings on platforms.
The ongoing wave of disruption sweeping across the communications
space remains unprecedented in our experience. We continue to see traditional business
models being disrupted as service providers of all types learn to adapt to the needs of the
device-enabled subscriber. As the market continues to disrupt, the gap between subscriber
needs and service provider supply continues to grow. New service providers are being created
to address this unmet need and capital is being formed to support them. We see this pace
accelerating in the market and it is well aligned with our mission. And we see the pace of
existing providers transforming to address this need hastening as well. However, as they realign
their investments it can cause near-term variances in spending.
Regardless of type, when a
service provider chooses to own the subscriber experience, we are well positioned to help them
Our focus remains on finding like-minded customers regardless of their legacy type, size or
location. The pressure on our legacy business in this quarter was ample encouragement to
refine our efforts in ramping our all-platform offerings, aligning our investments and maintaining
strong discipline over our operating expenses. Over the long-term, we believe this focus will
drive continuous improvement in our financial performance. With that we are pleased to discuss
our fourth quarter 2018 results:
Please visit the Calix investor relations website at https://investor-relations.calix.com to view the fourth quarter 2018 financial results in our letter to stockholders, along with accompanying supplemental financial information.
A question and answer conference call to discuss these results with President and CEO, Carl Russo, CFO, Cory Sindelar, and Director of Investor Relations, Tom Dinges, will be held at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on Feb. 5.
Interested parties can listen to a live webcast of the conference call by visiting the Calix Investor Relations website at . The conference call is also available via teleconference by dialing (877) 407-4019 or international (201) 689-8337 with conference ID# 13685537. The conference call and webcast will include forward-looking information.
A replay of the conference call will also be available. at following the completion of the call. The call will be archived at http://investor-relations.calix.com/.