Calix (CALX) Gains From Growing Subscriber Base, Tech Innovation

With the onset of the COVID-19 pandemic, telco operators and broadband service providers (BSPs) have been witnessing a steep surge in Internet traffic, driven by unprecedented demand for high-bandwidth communications services. In fact, many leading network operators have been reaping benefits from this trend, one such company being Calix, Inc. CALX.

Of late, the company has been making headlines in the telecommunications industry, mainly because of its state-of-the-art technological innovations, rapid product enhancements and developments followed by accretive partnerships. In fact, it has emerged as a strong player in the tech industry on the back of favorable product and customer mix despite the ongoing COVID-19 disruptions.

Notably, Calix’s solutions have supported BSPs over the years with new services and business models. It capitalizes on Big Data and analytics to monetize the complex infrastructure between subscribers and the cloud, thereby creating new revenue generation paths. The San Jose, CA-based company has also been actively participating in Rural Digital Opportunity Fund (RDOF) auctions to establish a streamlined connectivity infrastructure across rural and underserved areas that will eventually help in eliminating the digital disparity.

Talisman Partnerships

Supported by such significant capital infusion from RDOF auctions, Calix announced that its solutions have been selected by TransWorld Network, Corp. to accelerate the fiber-network build-out of the latter across the United States. The company leveraged the Intelligent Access EDGE, Revenue EDGE and Calix’s services to differentiate its customer service offerings. Few months back, it collaborated with geospatial network deployment solution provider — Render Networks — to bolster the growing influence of wireless networks across the United States.

Markedly, the partnership will enable Calix’s service provider customers to not only minimize network deployment costs by as much as 50% with standardized workflows but also facilitate in creating next-gen fiber networks on the back of Render’s Digital Network Construction platform. It also partnered with MLGC to deploy 5-Gigabit broadband service across North Dakota. Agreements with other telcos and broadband innovators like STRATA Networks, Novus, Norvado and TekSavvy also acted as major tailwind.

Innovative Solutions for Steady Connectivity

When it comes to evolving with the dynamic network requirements of customers, it boasts a diverse bouquet of technologically advanced solutions. Few days back, it unveiled GigaSpire BLAST u6x to deliver a positive customer experience, even across extreme environmental conditions. The latest entrant to the GigaSpire BLAST portfolio is an integral part of Calix’s Revenue EDGE solution and is equipped with latest Wi-Fi 6 technology that provides network security for an all-new smart home infrastructure.

Powered by the Calix Experience Innovation Platform, it not only eases the deployment process but also supports broadband businesses with minimized operational overheads to offer value added applications and services. It is future-proofed by Wi-Fi 6E technology, delivering up to 10 Gbps services over new-age broadband access networks. Continuing in its quest to take the broadband delivery experience a notch higher, Calix recently made a significant enhancement to its AXOS E3-2 Intelligent PON Node system.

Dubbed Intelligent System Monitoring, the development is known for simplifying the overall system management while minimizing truck rolls to ensure utmost operational efficacy. Further, the solution is based on “deploy anywhere” architecture, unlike traditional and expensive cabinet installations. The flexible deployment helps in driving service activation, considering the dire necessity of higher bandwidth symmetric service offerings. This, in turn, will enable Calix to emerge as a powerful differentiator in the market.

The company also posted solid first-quarter 2021 earnings, with 59.4% year-over-year surge in revenues on the back of disciplined operating expense management, incremental investments, robust demand environment and effective supply chain amid challenging conditions. With an ever increasing subscriber base, it added 24 new service provider customers during the quarter from all segments of the market, thereby gaining a competitive advantage over its peers.

Wrapping Up

Driven by such focused endeavors, Calix is expected to perform considerably well supported by a flourishing communications cloud and software platform business. Also, its financial performance improvement is likely to manifest across its four measurable metrics in the long run, namely — increased predictability, gross margin expansion, deliberate revenue growth and disciplined operating expense investment. All these factors bode well and are likely to elevate Calix’s business roadmap in the upcoming quarters despite the coronavirus-induced turmoil.

Some prominent players in the industry are Thryv Holdings, Inc. THRY, Arlo Technologies, Inc. ARLO and Atlassian Corporation Plc TEAM.

Thryv delivered a trailing four-quarter earnings surprise of 595.3%, on average.

Arlo Technologies delivered a trailing four-quarter earnings surprise of 56.4%, on average.

Atlassian Corporation delivered a trailing four-quarter earnings surprise of 30.3%, on average.

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