Key Highlights

  • CALX third-quarter 2026 sales hit a new high of $301.7 million, a 13.7% (calculated) gain from $265.4 million in the prior-year period.
  • Software and service income reached a record $51.9 million, rising 19% over the prior year.
  • The non-GAAP gross Margin registered 53.5%, which is 420 basis points below last year's level owing to costlier memory components.
  • Per diluted share, GAAP Earnings came to $0.16 on $10.2 million of net income, compared with $0.22 on $15.7 million one year earlier.
  • The company enlarged its repurchase cap by $100 million, and Q4 Revenue projections sit at $311 million to $317 million.

Record Revenue Accompanied by 19% Growth in Software and Services

In the quarter that ended Sep 26, 2026, Calix (NYSE:CALX) booked revenue of $301.7 million, according to its stockholder letter dated Nov 2, 2026. That is 3% above the previous quarter and compares with $265.4 million a year ago. The company sells broadband access appliances and cloud software.

Appliance sales hit a new high of $249.8 million, up 13% annually. Software and service revenue grew 19%, reaching a record $51.9 million; management credited added subscribers and greater upselling of managed services.

Revenue from U.S. customers came to 95% of the company's total, and international revenue declined 14%. One customer accounted for 11% of revenue.

Appliance Margin Falls 550 Basis Points as Memory Components Get Pricier

The non-GAAP gross margin ended at 53.5%, near the top of the earlier 50.5% to 53.5% outlook, and it was 130 basis points lower than in the second quarter. On the non-GAAP measure, appliance margin slid to 50.7%, versus 56.2% a year earlier. Management traced the decline to pricier memory parts, a result of AI Data Center demand, and customer surcharges covered only part of the difference.

Non-GAAP software and service margin hit a record 67.2%. GAAP Net Income dropped to $10.2 million from $15.7 million, while non-GAAP net income reached $28.5 million, which is $0.44 a diluted share, compared with $30.6 million a year before.

Non-GAAP operating costs were $124.0 million, or 41% of revenue, versus 42% previously.

Share Repurchases and an Inventory Build Shift the Cash Position

During the period Calix bought back 1.4 million shares costing $50.0 million; over nine months the total reached 6.3 million shares, worth $290.2 million. The board's October 2026 action added $100 million to the authorization, and $144 million remained as of the letter date.

Cash and investments ended at $154.8 million, down $39.5 million sequentially as Buybacks and Capital spending outran operating inflows. Inventory went up $14.6 million to $187.9 million, while free Cash Flow came to $3.4 million.

Remaining performance obligations climbed 12% annually to a new high of $395.7 million. Calix One bookings during the period more than doubled sequentially, and 14 more service provider customers came aboard.

Fourth-Quarter Revenue Forecast Implies Full-Year Growth of About 19%

The fourth-quarter outlook calls for $311 million to $317 million in revenue, about 4% higher at the midpoint, along with non-GAAP per-share earnings of $0.41 to $0.49. Non-GAAP gross margin is projected at 52.25% to 54.75%, a range whose midpoint matches the third quarter.

At the midpoint, revenue for the full year would expand roughly 19%, near the upper edge of the 15% to 20% span that was given at the start of 2026. Record revenue and software margins sit alongside memory-driven appliance margin pressure. The quarter ending Dec 31, 2026 will show whether heavier surcharges protect gross margin and whether Calix One lifts software sales.