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Calix (CALX) Well Poised on Innovation and Collaborations

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With an unprecedented surge in high-bandwidth communications services coupled with the upward trajectory of vaccinations, majority of the global tech companies are resuming their operations in full swing. Many leading network operators have been reaping benefits from this trend, including Calix, Inc. CALX.

The company’s business operations are driven by the secular changes in the communications industry. Thanks to its future-proof technological advancements, Calix has been able to capitalize on the benefits of the new-age hybrid work environment, and has accordingly aligned its business systems, real estate, and human resources.

Calix is well poised to make a mark in the telco space in the long run backed by disciplined operating expense investment, gross margin expansion, increased predictability, and deliberate revenue growth. Increasing customer adoption of product and service offerings coupled with favorable product and customer mix, and back-to-back collaborations act as major tailwinds. Let’s discuss further.

Focus on Innovation

The San Jose, CA-based cloud and software platforms provider believes that innovations are the driving force behind its successful broadband businesses. The company boasts a diverse bouquet of technologically advanced solutions, some of them being GigaSpire BLAST portfolio, Calix Experience Innovation Platform, Revenue EDGE platform, Calix Customer Success Services, and Calix Marketing Cloud.

Recently, it unveiled Calix Operations Cloud that enables broadband service providers (BSPs) to streamline their operations with end-to-end visibility into the access network as well as across the entire subscriber base inside the premises. The company capitalizes on Big Data and analytics to monetize the complex infrastructure between subscribers and the cloud, thereby creating new revenue generation paths.

Also, Calix has been actively participating in Rural Digital Opportunity Fund (RDOF) auctions to establish a streamlined connectivity infrastructure across rural and underserved areas, thereby eliminating digital disparity. In second-quarter 2021, Calix reported record revenues for the EXOS platform, up more than 275% as a result of accelerated deployments of the Revenue EDGE solution. With an ever-increasing subscriber base, it added 43 new BSP customers during the second quarter.

Further, the enhanced Calix Premier Success Services for Marketing witnessed impressive growth while aiding BSP customers to improve marketing campaign ROI through more effective use of social media and digital marketing channels. A solid financial position, coupled with technologically advanced platforms and services, aids Calix to not only augment its wide set of prospective customers but also to capitalize on the lucrative opportunities in the long run.

Accretive Partnerships Bode Well

Calix is blessed with a thriving ecosystem of partners. A few months back, it had collaborated with the third-largest RDOF recipient based in Arkansas — Petit Jean Electric Cooperative. Per the alliance, Petit Jean capitalized on Calix’s portfolio of avant-garde connectivity solutions such as Revenue EDGE, Intelligent Access EDGE, Network Innovation Platform (AXOS), Calix Support Cloud, and Calix Marketing Cloud for the deployment of the best-in-class fiber-to-the-home network.

The company also leveraged the expertise of Calix Services, particularly Premier Support Services, Professional Services and Premier Customer Success Services to optimize network and service planning. Post the deployment of these services, Petit Jean facilitated its customers with seamless online learning and remote working opportunities on the back of a future-proof fiber broadband network infrastructure.

Further, it had partnered with CityWest to revamp the latter’s omnichannel marketing campaign performance with the creation of highly targeted, relevant, and engaging email campaigns. The British Columbia-based BSP capitalized on Calix Marketing Cloud, Calix Premier Customer Success Services and email marketing platform — Mailchimp. This combination not only enabled CityWest to streamline its campaign development but also boosted high-impact offers to maximize return on investment with actionable insights.

It had also joined forces with CTC Telecom to upgrade the latter’s network and customer experience with avant-garde solutions. The telco had deployed GigaSpire BLAST u6 systems, Calix Support Cloud, and full Revenue EDGE portfolio to capture valuable subscriber data and performance insights, thereby providing a personalized and secure Wi-Fi experience to its customers. CTC Telecom also capitalized on Calix Customer Success Services to revamp installation and support processes for a streamlined network infrastructure. Post its deployment, the telco witnessed a 37% reduction in support call volumes with more than 34% fall in truck rolls.

Wrapping Up

Driven by such focused endeavors, Calix is well-positioned to benefit from customer base expansion amid the coronavirus-induced disruptions. Its near-term focus is on serving the needs of BSP customers while the long-term focus remains on finding like-minded BSP customers regardless of their type, size, or location. It is committed to aligning investments to its strategy and maintaining strong discipline over operating expenses. The transition of Calix into a communications cloud and software platform business will manifest in improved financial performance over the long term.

Some prominent players in the industry are Jiayin Group Inc. JFIN, Square, Inc. SQ, and Bentley Systems, Incorporated BSY.

Jiayin Group delivered a trailing four-quarter earnings surprise of 89%, on average.

Square delivered a trailing four-quarter earnings surprise of 111.1%, on average.

Bentley Systems delivered a trailing four-quarter earnings surprise of 32.5%, on average.

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