Calix, Inc. reported unaudited financial results for its second quarter of 2026, achieving record revenue of $293 million, a 21% year-over-year increase. The company’s adjusted earnings per share of $0.47 surpassed analyst consensus estimates of $0.40, representing a 42.42% increase over the prior year. This performance was driven by strong demand for the company’s AI-native Calix One platform, which led to record software and service revenue and remaining performance obligations (RPOs). President and CEO Michael Weening and CFO Corey Sindelar highlighted the company’s strategic focus on AI, noting that the Calix One platform enables service providers to transform operations through agentic workflows. The company provided guidance for the third quarter of 2026, expecting revenue between $301 million and $307 million, and raised its annual revenue growth outlook to the higher end of the 15% to 20% range.

Financial Performance

The company’s revenue growth was fueled by broad-based demand across its customer segments, including residential, business, municipal, and MDU markets. Software and service revenue reached $50 million, up 16% year-over-year, while RPOs hit a record $386 million. The table below summarizes the key financial metrics for the quarter:

Operational Highlights

Calix completed its platform migration, resulting in an 810 basis point sequential improvement in non-GAAP software and service gross margin. The company emphasized its commitment to human-centric AI deployment, which contributed to operating leverage in the second quarter. Non-GAAP operating expenses were approximately $122 million, or 42% of revenue, down from 45% in the prior quarter. Despite challenges such as higher memory costs, the company maintained a strong balance sheet with cash and investments totaling $194 million. Calix deployed $69 million to repurchase 1.6 million shares during the quarter. The company expects appliance gross margins to bottom in the third quarter of 2026 as its memory surcharge program takes effect.

Rosenblatt analyst Mike Genovese has maintained a Buy rating on Calix (NYSE: CALX) while lowering the price target from $70 to $55. The revised target suggests a recalibration of the stock's potential upside following recent market movements or business developments.

Rating and Price Target Adjustment

The decision to keep the Buy rating indicates continued confidence in Calix's long-term prospects despite the lower price objective. The reduction in the price target to $55 from $70 signals a more conservative near-term valuation.

The analyst's stance implies that while the company's fundamentals remain supportive of a positive investment case, the expected price appreciation has been tempered.