Calix, Inc

Greetings and welcome to the Calix second quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the brief prepared remarks. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jim Finucchi of Darrow Associates. Sir, please go ahead.

thank you operator and good morning everyone thank you for joining our second quarter 2022 earnings call today on the call we have calix chairman and ceo carl russo chief financial officer corey cindylar and president and chief operating officer michael weenie as a reminder yesterday after the market closed calix distributed its letter to stockholders in a news release an ak filing and posted in the investor relations section of the calix web conference call will be available for webcast replay in the investor relations section of the Calix website. Before I turn the call over to Carl for his brief opening remarks, I want to remind you that on this call, we will refer to forward-looking statements, which include all statements the company will make about its future financial and operating performance, growth strategy, and market outlook, and actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause actual results and trends to differ materially are set forth in the second quarter 2022 letter to stockholders and in their annual and quarterly reports filed with the SEC. Dallas assumes no obligation to update any forward-looking statements which speak only as of their respective dates. Also in this conference call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in the second quarter 2022 letter to stockholders. Unless otherwise stated, all numbers referenced in this call will be non-GAAP measures. With that, I will now turn the call over to Carl.

Carl? Thank you, Jim. Robust demand continued in our second quarter, which resulted in a 9% sequential increase in revenue. More than 80% of our bookings came from our all-platform software associated systems and services. This is up from 70% just last quarter. This sequential growth was driven by BSPs that are providing broadband as a service rather than just a dump pipe, and we expect this trend to continue. A 77% year-over-year increase in revenue performance obligations was further evidence that our BSP customers are winning in their market and growing their subscriber share. Furthermore, we see evidence that our most aggressive BSP customers are using the recent economic slowdown as an opportunity to gain share by delivering an exceptional subscriber experience to those who have never received one. On the supply front, the CalEx team again outperformed which helped us achieve better than expected results in the quarter. Furthermore, it raises our visibility, allowing us to forecast year-over-year revenue growth of roughly 25% for the third quarter. While we expect the supply chain challenges to continue for the foreseeable future, our confidence is growing that we can exceed our revenue growth model shared at our 2022 Investor Day held in February. Our operational and financial performance in this uncertain market has been exceptional. We are profitable, our balance sheet is strong, we consistently generate cash, and we expect this trend to continue. Based on our expected performance, we are confident we will create significant shareholder value over the long term. However, in the near term, the market downturn has presented us with an opportunity to purchase our own shares. To that end, our board of directors has authorized a one-year repurchase plan, allowing us to invest up to $100 million in our common stock on an opportunistic basis. In closing, the enormous secular opportunity we are capitalizing on grows every day, and the Calix team is committed to executing with excellence to help our customers simplify their businesses