Calix Inc. - CALX

Light guidance and an inventory charge appear to be unexpected...

Let’s just sum up the quarter first.

Revenues were sequentially flat, again, and guidance (rather than another sequentially flat quarter) was cut to $225M-$231M, which would be down from Q1 2023’s $250M (or down maybe 10%).  The company blamed the weak guidance on their largest customers basically putting a hold on any future orders as they decide whether or not they plan or want to participate in the government BEAD program that is looking to dish out $42.5B or so to participants.  They believe that Q1 will prove to be the low point for the year and that sequential growth will resume during the rest of the year.  They made a point to say “sequential” growth and not “year over year” growth, leading some folks to think that 2024 is going to be a down 10% year overall.  Count me as part of that group. Oh, and they also wrote down $28.7M worth of legacy inventory, smooshing gross margins in the process. But have no fear, dear investor, for “adjusted” numbers all look great!