Calix, Inc

Greetings. Welcome to the CALEC second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Nancy Fazioli, VP of Investor Relations. Thank you. You may begin.

Thank you, Daryl, and good morning, everyone. Thank you for joining our second quarter 2025 earnings call. Today on the call, we have President and CEO, Michael Weaning, and Chief Financial Officer, Corey Sindelar. As a reminder, yesterday after the market closed, Calix issued a news release which was furnished on a Form 8K along with our stockholder letter and also posted in the investor relations section of the Calix website. Today's conference call will be available for webcast replay in the investor relations section of our website. Before I turn the call over to Michael for his opening remarks, I want to remind everyone that on this call we will refer to forward-looking statements, including all statements the company will make about its future financial and operating performance, growth strategy, and market outlook, and that 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 2025 letter to stockholders. and in the annual and quarterly reports filed with the SEC. TALIS 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. Reconciliation of GAAP to non-GAAP measures is included in the second quarter 2025 letter to stockholders. And once otherwise stated, all financial information referenced in this call will be non-GAAP. With that, Michael, please go ahead.

Thank you, Nancy. As I stated in our last earnings call, the investments we made in 2024 to manage through the post-pandemic period are yielding results and the market is evolving as we predicted. Corey will cover our exceptional second quarter, which is a testament to our long-term strategy, our Calix team, the incredible customers we serve, and the partners who support us. As I continue to state, the industry is at a crossroads. A broadband provider must decide if they will retain the legacy mindset of a speed-based network operator who tries to cost-cut their way to growth while being commoditized, as a home pass is not a measure of success as it does not guarantee a revenue-generating subscriber, while the successful broadband provider is the one that delivers incredible experiences across all segments, thereby establishing a brand that is loved by the communities they serve. The result is higher revenue-proof customer across all segments, residential, business, and municipality, higher net promoter scores which yield customer loyalty, and lower churn. That experience-based success is what Calix enables as we always think subscriber in, not network out. Our mindset is grounded in the experiences beyond the undifferentiated speed of a pipe via our unique appliance-based platform, cloud, and managed services model that helps our customers transform with the support of our industry-leading customer success team. Our press releases frequently highlight our customers' ability to use differentiated experiences to deliver value for members and investors, as evidenced by a discussion I had with a medium-sized customer last month. That customer launched SmartBiz in late 2024. and saw a 250% increase in revenue per small business subscriber by delivering a better experience. Experiences are the future of broadband, and our platform is unique in that it can address residential, small business, MDU, and municipal needs with the same appliances, cloud, and managed services. Which brings me to the second, even larger disruption that the world is paying attention to, artificial intelligence. Since late 2023, our team has believed that the long-term impact of AI is significant and represented the next critical component of the Calix platform. More importantly, we have ensured that our teams do not underestimate the pace of change. This is not a normal technology curve. The pace of change in AI is staggering. The difference between short-term and long-term is going to be radically shorter than any technology before it, as evidenced by the fact that Netflix took a decade to get to 100 million subscribers, while ChatGPT took two months and is now approaching a billion users. It is useful to note that both Netflix and ChatGPT stand on the shoulders of the platform known as the Internet. Since 2007, we have been investing in our platform, cloud, and managed services to transform the entire broadband market. In 2016, we launched our second generation platform, which introduced several key components. Two operating systems for network and premises appliances that are abstracted from the chips and enable local applications with rich telemetry and policy management capabilities. We also introduced our persona-based cloud and the managed services model, which now serve residential, small business, MDU, and municipal use cases on the same appliances. We have invested more than 15 years and almost $2 billion into our platform. As of the second quarter, we have enabled 1,116 broadband providers to deliver a differentiated experience to ensure their brand is front and center as they delight the communities they serve, including a new large cloud customer who selected us in the quarter. In late 2023, we recognized the emergence of AI would be an incredible opportunity to address the largest constraint that our customers face, the capacity to transform across operations, marketing, and service. To meet that need, we began investing in our third generation of the platform, and in second quarter, it went into pre-production for a second half launch in 2025. beginning with the upcoming release of our third-generation mobile application in August, Command IQ, which is a valuable brand portal to end subscribers. The third-generation Calix platform has three goals. First, we expand our platform, cloud, and managed services to allow us to meet the needs of local geographies through sovereign data centers. Second, we gain the ability to serve large customers with private cloud. Last and most important, we evolve our platform architecture to speed our capabilities with agentic AI across our solutions to allow the Calix team to move from success advice that a customer may or may not implement to success advice enabled through execution capacity with a legion of Calix AI agents. While we remain the only organization in this industry with a substantial investment and customer success teams to support transformation, it does not overcome the very real capacity challenge that our customers face. For example, many leaders prioritize new installs over adding a new experience campaign, such as outdoor Wi-Fi. Despite the very real truth that this campaign could add $10 to $50 of incremental revenue per month per subscriber and is wildly sticky, which reduces churn. They do not have the marketing capacity to build and execute the campaigns, nor installer capacity, as they have not embraced the high-satisfaction-driving self-install model. Agentech AI changes that, as it will enable our customers to move faster, a force multiplier for action. Calix AI agents learning across our unique end-to-end platform and aligned with our customer success teams will allow a capacity-constrained customer to leap over the castle. Our fast-growing legion of agents will speed opportunities to simplify, which improves margin, innovate, which increases revenue and reduces churn, and grow to meet the financial goals of our customers, members, and investors. In short, more than 15 years of investment building a unique end-to-end platform does more than enable an incredible second quarter. We are poised to enable an industry-wide transformation that we have always envisioned for all broadband providers, regardless of size or geography. Platform-based agentic AI will enable network operators to become experienced providers that dominate the markets they serve as the concept of customer success moves from advice that a BXP needs to prioritize and build capacity to implement to the push of a button by a BXP team member to approve the actions of a quickly expanding and evolving legion of Calix agents. With that, I'll hand it over to Corey, who will cover our second quarter financial performance and third quarter outlook and ongoing investments to transform and lead the broadband industry. Corey, over to you.