What changed in this filing

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Item 1. Financial Statements

2025-04-22 compared with 2024-10-29 · 151 added, 166 removed, 321 unchanged (50% of the section changed)

2 unchanged sentences

(In thousands, except par value)

September 28,

2025 December 31,

27 unchanged sentences

5,000 shares authorized;

no shares issued and outstanding as of September 28, 2024 and December 31, 2023

no shares issued and outstanding as of March 29, 2025 and December 31, 2024

Common stock, $ 0.025 par value;

100,000 shares authorized;

66,318 shares issued and outstanding as of September 28, 2024, and 65,052 shares issued and outstanding as of December 31, 2023

65,695 shares issued and outstanding as of March 29, 2025, and 66,434 shares issued and outstanding as of December 31, 2024

Additional paid-in capital 1,160,781 1,170,017

Accumulated other comprehensive income (loss) 490 ( 659 )

Accumulated other comprehensive loss ( 345 ) ( 612 )

Accumulated deficit ( 394,913 ) ( 390,126 )

4 unchanged sentences

(In thousands, except per share data)

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Revenue $ 220,242 $ 226,310

6 unchanged sentences

Total operating expenses 128,789 124,609

Operating income (loss) ( 10,896 ) 15,929 ( 24,284 ) 37,676

Operating loss ( 6,081 ) ( 2,032 )

Interest income and other expense, net:

3 unchanged sentences

Income (loss) before income taxes ( 2,990 ) 468

Income taxes (benefit) ( 3,824 ) 1,190 ( 4,183 ) 7,857

Income taxes 1,797 365

Net income (loss) $ ( 4,787 ) $ 103

7 unchanged sentences

Net income (loss) $ ( 4,787 ) $ 103

Other comprehensive income, net of tax:

Unrealized gain on available-for-sale marketable securities, net 1,190 263 983 1,185

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on available-for-sale marketable securities, net 171 ( 212 )

Foreign currency translation adjustments, net 96 ( 112 )

Total other comprehensive income, net of tax 1,463 230 1,149 1,114

Comprehensive income (loss) $ ( 2,505 ) $ 17,183 $ ( 10,674 ) $ 37,038

Total other comprehensive income (loss), net of tax 267 ( 324 )

Comprehensive loss $ ( 4,520 ) $ ( 221 )

See accompanying notes to condensed consolidated financial statements.

3 unchanged sentences

Shares Amount

Balance as of June 29, 2024 65,800 $ 1,645 $ 1,121,786 $ ( 973 ) $ ( 368,234 ) $ 754,224

Stock-based compensation — — 16,371 — — 16,371

Issuance of common stock under equity incentive plans, net of forfeitures 518 13 10,585 — — 10,598

Net loss — — — — ( 3,968 ) ( 3,968 )

Other comprehensive income — — — 1,463 — 1,463

Balance as of September 28, 2024 66,318 $ 1,658 $ 1,148,742 $ 490 $ ( 372,202 ) $ 778,688

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity

Shares Amount

Balance as of July 1, 2023 66,320 $ 1,658 $ 1,112,434 $ ( 1,589 ) $ ( 370,733 ) $ 741,770

Stock-based compensation — — 16,026 — — 16,026

Issuance of common stock under equity incentive plans, net of forfeitures 359 9 8,366 — — 8,375

Repurchases of common stock ( 729 ) ( 18 ) ( 32,391 ) — — ( 32,409 )

Net income — — — — 16,953 16,953

Other comprehensive income — — — 230 — 230

Balance as of September 30, 2023 65,950 $ 1,649 $ 1,104,435 $ ( 1,359 ) $ ( 353,780 ) $ 750,945

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity

Shares Amount

Balance as of December 31, 2024 66,434 $ 1,661 $ 1,170,017 $ ( 612 ) $ ( 390,126 ) $ 780,940

1 unchanged sentence

Issuance of common stock under equity incentive plans, net of forfeitures 417 10 10,835 — — 10,845

Repurchases of common stock ( 114 ) ( 3 ) ( 3,735 ) — — ( 3,738 )

Repurchases of common stock including excise tax ( 1,156 ) ( 28 ) ( 40,174 ) — — ( 40,202 )

Net loss — — — — ( 4,787 ) ( 4,787 )

Other comprehensive income — — — 267 — 267

Balance as of September 28, 2024 66,318 $ 1,658 $ 1,148,742 $ 490 $ ( 372,202 ) $ 778,688

Balance as of March 29, 2025 65,695 $ 1,643 $ 1,160,781 $ ( 345 ) $ ( 394,913 ) $ 767,166

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity

5 unchanged sentences

Net income — — — — 103 103

Other comprehensive income — — — 1,114 — 1,114

Balance as of September 30, 2023 65,950 $ 1,649 $ 1,104,435 $ ( 1,359 ) $ ( 353,780 ) $ 750,945

Other comprehensive loss — — — ( 324 ) — ( 324 )

Balance as of March 30, 2024 65,525 $ 1,638 $ 1,102,314 $ ( 983 ) $ ( 360,276 ) $ 742,693

See accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

(In thousands, unaudited)

Nine Months Ended

September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Operating activities:

17 unchanged sentences

Purchases of marketable securities ( 36,856 ) ( 35,575 )

Sales of marketable securities 49,905 —

Maturities of marketable securities 52,154 42,565

Net cash provided by (used in) investing activities ( 75,927 ) 38,484

Net cash provided by investing activities 10,988 3,281

Financing activities:

1 unchanged sentence

Repurchases of common stock ( 39,974 ) ( 3,738 )

Payments related to financing arrangements — ( 7,560 )

Net cash provided by (used in) financing activities ( 29,129 ) 7,076

7 unchanged sentences

(together with its subsidiaries, “Calix” or the “Company”) was incorporated in August 1999 and is a Delaware corporation.

The Company is the leading global provider of a platform (cloud, software and systems) and managed services that focus on the subscriber-facing network, the portion of the network that governs available bandwidth and determines the range and quality of services that can be offered to subscribers.

This platform and managed services enable broadband service providers (“BSPs”) of all sizes to innovate and transform their businesses.

The Company’s BSP customers are empowered to utilize real-time data and insights from the Calix platform to simplify their businesses and deliver experiences that excite their subscribers.

These insights enable BSPs to grow their businesses through increased subscriber acquisition, loyalty and revenue, thereby increasing the value of their businesses and contributions to their communities.

The Company develops, markets and sells an appliance-based platform, cloud and managed services that focus on the subscriber-facing network, the portion of the network that governs available bandwidth and determines the range and quality of services that can be offered to subscribers.

These platform, cloud and managed services enable broadband experience providers (“BXPs”) of all sizes to innovate and transform their businesses.

The Company’s BXP customers are empowered to utilize real-time data and insights from the Calix platform to simplify their businesses and deliver experiences that excite their subscribers.

These insights enable BXPs to grow their businesses through increased subscriber acquisition, loyalty and revenue, thereby increasing the value of their businesses and contributions to their communities.

Basis of Presentation

12 unchanged sentences

Quarterly periods are based on a 4-4-5 calendar with the first quarter ending on the Saturday closest to March 31 st .

As a result, the Company had one less day in the nine months ended September 28, 2024 than for the nine months ended September 30, 2023.

As a result, the Company had one less day in the three months ended March 29, 2025 than for the three months ended March 30, 2024.

The preparation of financial statements in conformity with GAAP for interim financial reporting requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.

2 unchanged sentences

The Company’s significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024.

The Company’s significant accounting policies did not change during the nine months ended September 28, 2024.

The Company’s significant accounting policies did not change during the three months ended March 29, 2025.

Newly Adopted Accounting Standard

The Company did not adopt any new accounting standards during the nine months ended September 28, 2024 that were significant to the Company.

The Company did not adopt any new accounting standards during the three months ended March 29, 2025 that were significant to the Company.

Recent Accounting Pronouncements Not Yet Adopted

There have been no additional accounting pronouncements or changes in accounting pronouncements during the nine months ended September 28, 2024 as compared with the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, that are significant or expected to be significant to the Company.

There have been no additional accounting pronouncements or changes in accounting pronouncements during the three months ended March 29, 2025 as compared with the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, that are significant or expected to be significant to the Company.

Cash, Cash Equivalents and Marketable Securities

12 unchanged sentences

Realized gains and losses on sales of marketable securities, if any, are determined on the specific identification method and are reclassified from accumulated other comprehensive loss to results of operations as other expense, net.

Realized gains and losses were de minimis for the three and nine months ended September 28, 2024 and September 30, 2023.

Realized gains and losses were not significant for the three months ended March 29, 2025 and March 30, 2024.

Cash, cash equivalents and marketable securities consisted of the following (in thousands):

September 28,

2025 December 31,

3 unchanged sentences

Money market funds 8,937 4,890

government agency securities 3,968 —

government securities — 7,550

3 unchanged sentences

government securities 49,036 66,582

government agency securities 29,872 43,521

Commercial paper 31,979 22,715

government agency securities 19,875 24,411

Certificates of deposit 12,623 16,520

3 unchanged sentences

The amortized cost and fair value of marketable securities were as follows (in thousands):

As of September 28, 2024 Amortized Cost Unrealized Gains Fair Value

As of March 29, 2025 Amortized Cost Unrealized Gains (Losses), net Fair Value

Corporate debt securities $ 126,179 $ 318 $ 126,497

government securities 62,682 287 62,969

Commercial paper 49,624 ( 9 ) 49,615

government securities 48,915 121 49,036

government agency securities 19,838 37 19,875

1 unchanged sentence

$ 257,168 $ 478 $ 257,646

As of December 31, 2023 Amortized Cost Unrealized Gains (Losses) Fair Value

As of December 31, 2024 Amortized Cost Unrealized Gains, net Fair Value

Corporate debt securities $ 123,519 $ 182 $ 123,701

government securities 74,118 14 74,132

1 unchanged sentence

government agency securities 24,380 31 24,411

Corporate debt securities 6,999 1 7,000

Certificates of deposit 16,505 15 16,520

$ 271,288 $ 249 $ 271,537

9 unchanged sentences

The following tables sets forth the Company’s financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands):

As of September 28, 2024 Level 1 Level 2 Total

As of March 29, 2025 Level 1 Level 2 Total

Money market funds $ 8,937 $ — $ 8,937

8 unchanged sentences

government securities 74,132 — 74,132

Corporate debt securities — 123,701 123,701

Commercial paper — 32,773 32,773

government agency securities — 24,411 24,411

Corporate debt securities — 7,000 7,000

Certificates of deposit — 16,520 16,520

$ 79,022 $ 197,405 $ 276,427

1 unchanged sentence

Accounts receivable, net consisted of the following (in thousands):

September 28,

2025 December 31,

3 unchanged sentences

Inventory consisted of the following (in thousands):

September 28,

2025 December 31,

Raw materials $ 25,704 $ 22,119

Components $ 11,327 $ 21,735

Finished goods 89,508 80,992

1 unchanged sentence

Prepaid expenses and other current assets consisted of the following (in thousands):

September 28,

2025 December 31,

3 unchanged sentences

Property and equipment, net consisted of the following (in thousands):

September 28,

2025 December 31,

8 unchanged sentences

Accrued liabilities consisted of the following (in thousands):

September 28,

2025 December 31,

1 unchanged sentence

Component inventory held by suppliers 10,616 8,855

Taxes payable 5,794 5,048

Professional and consulting fees 5,294 5,385

2 unchanged sentences

Customer advances or rebates 3,209 4,882

Taxes payable 3,903 4,317

Travel and event expenses 3,042 3,537

Product returns 2,560 2,897

Insurance 2,393 2,019

Freight 1,189 1,510

Product returns 2,016 2,428

Operations 1,764 1,735

Litigation settlement — 3,250

Freight 1,548 1,640

Other 6,390 6,580

1 unchanged sentence

Changes in the Company’s accrued warranty liability were as follows (in thousands):

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Balance at beginning of period $ 7,287 $ 8,029

Accruals for product warranty

1,057 1,081 1,789 2,899

Cost of warranty claims

5 unchanged sentences

Certain of the Company’s operating leases contain renewal options and rent acceleration clauses.

Future minimum payments under the non-cancelable operating leases consisted of the following as of September 28, 2024 (in thousands):

Future minimum payments under the non-cancelable operating leases consisted of the following as of March 29, 2025 (in thousands):

Period Future Minimum Lease Payments

3 unchanged sentences

Less imputed interest ( 361 )

As of September 28, 2024, the operating lease liability consisted of the following (in thousands):

As of March 29, 2025, the operating lease liability consisted of the following (in thousands):

Accrued liabilities - current portion of operating leases $ 3,661

2 unchanged sentences

The future minimum lease payments under the lease are $ 1.9 million and are included in the table above.

The weighted average discount rate for the Company’s operating leases as of September 28, 2024 was 4.9 %.

The weighted average remaining lease term as of September 28, 2024 was 2.8 years.

For the three and nine months ended September 28, 2024, rent expense was $ 1.2 million and $ 3.5 million, respectively.

For the three and nine months ended September 30, 2023, rent expense was $ 1.2 million and $ 3.6 million, respectively.

Cash paid within operating cash flows for operating leases was $ 3.4 million for the nine months ended September 28, 2024 and September 30, 2023 for each respective period.

In December 2024, the Company entered into a new headquarters office lease agreement for 23,000 square feet in San Jose, California.

The lease is expected to commence in August 2025 for a term of 90 months.

The future minimum lease payments of $ 8.9 million are not included in the table above.

The weighted average discount rate for the Company’s operating leases as of March 29, 2025 was 4.7 %.

The weighted average remaining lease term as of March 29, 2025 was 2.6 years.

For the three months ended March 30, 2024 and March 29, 2025, rent expense was $ 1.1 million for each respective period.

Cash paid within operating cash flows for operating leases was $ 1.2 million and $ 1.1 million for the three months ended March 29, 2025 and March 30, 2024, respectively.

Purchase Commitments

3 unchanged sentences

The Company places purchase orders with its CMs and ODMs in order to fulfill its monthly finished product inventory requirements.

The Company incurs a liability when it takes ownership of the finished goods inventory after the CMs and ODMs convert the component inventory into a finished product.

The Company has from time to time, and subject to certain conditions, reimbursed certain suppliers for component inventory purchases when this inventory has been rendered excess or obsolete, for example due to manufacturing and engineering change orders resulting from design changes, manufacturing discontinuation of products by its suppliers, or in cases where the Company has committed inventory levels that greatly exceed actual demand.

The Company incurs a liability when the CMs and ODMs convert the component inventory to a finished product and takes ownership of the finished goods inventory.

In the event of termination of services with a manufacturing partner, the Company has purchased, and may be required to purchase in the future, certain of the remaining components inventory held by the CM or ODM as well as any outstanding orders pursuant to the contractual provisions with such CM or ODM.

The estimated excess and obsolete component liabilities related to manufacturing and engineering change orders, termination of manufacturing partners and other factors are included in “Accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets, because the corresponding component parts have not been received or paid for by the Company.

The estimated excess and obsolete component liabilities related to manufacturing and engineering change orders, termination of manufacturing partners and other factors are recorded against Supplier Deposits in “Prepaid expenses and other current assets” or included in “Accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets, because the corresponding component parts have not been received or paid for by the Company.

The Company records the related charges in “Cost of revenue” in its Condensed Consolidated Statements of Comprehensive Income (Loss).

As of September 28, 2024 and December 31, 2023, the Company had approximately $ 142.1 million and $ 176.3 million, respectively, of outstanding purchase commitments for inventories to be delivered by its suppliers, including CMs and ODMs.

As of March 29, 2025 and December 31, 2024, the Company had approximately $ 153.3 million and $ 138.8 million, respectively, of outstanding purchase commitments for inventories to be delivered by its suppliers, including CMs and ODMs.

From time to time, the Company is involved in various legal proceedings arising from the normal course of business activities.

The Company is not currently a party to any legal proceeding or any legal proceeding known to be contemplated by government authorities that, if determined adversely to the Company, in management’s opinion, is currently expected to individually or in the aggregate have a material adverse effect on the Company’s business, operating results or financial condition taken as a whole.

The Company is not currently a party to any legal proceeding that, if determined adversely to the Company, in management’s opinion, is currently expected to individually or in the aggregate have a material adverse effect on the Company’s business, operating results or financial condition taken as a whole.

Stockholders’ Equity

2 unchanged sentences

The 2019 Plan provides for the grant of stock options, including incentive stock options and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, other stock or cash-based awards and dividend equivalents to eligible individuals.

As of September 28, 2024, there were 2.9 million shares available for issuance under the 2019 Plan.

During the three months ended September 28, 2024, time-based stock option awards exercisable for up to an aggregate of 7,000 shares of common stock were granted with a grant date weighted-average exercise price of $ 37.68 per share.

During the nine months ended September 28, 2024, time-based stock option awards exercisable for up to an aggregate of 0.4 million shares of common stock were granted with a grant date weighted-average exercise price of $ 34.43 per share.

These stock option awards vest 25 % on the first anniversary of the vesting commencement date and on a quarterly basis thereafter over an additional three years .

In February 2024, performance-based stock option awards exercisable for up to an aggregate of 2.4 million shares of common stock were granted to certain Company executives with a grant date exercise price of $ 34.26 per share and divided into two

plans, with the first plan accounting for 75 % of the total shares granted and the second plan accounting for 25 % of the total shares granted.

As of March 29, 2025, there were 0.6 million shares available for issuance under the 2019 Plan.

In February 2025, stock option awards exercisable for up to an aggregate of 3.1 million shares of common stock were granted to certain members of the Company’s leadership team with a grant date exercise price of $ 39.68 per share.

The actual number of shares earned is contingent upon achievement of annual corporate financial targets for bookings and non-GAAP net operating income for 2025 (collectively, the “2025 Performance Targets”) during the one-year performance period.

These performance-based stock option awards will vest, subject to certification by the Compensation Committee of the Company’s Board of Directors upon the achievement of the 2024 Performance Targets, as to 25 % of the shares of common stock earned on the one year anniversary of the date of grant, and as to the remaining 75 % of the shares of common stock earned, in substantially equal quarterly installments over the subsequent 36 months, subject to the executive’s continuous service with the Company through the respective vesting dates.

For the first plan, if the non-GAAP net operating income target and the bookings target are each achieved below 80 % of target, no shares would be awarded, and the performance-based stock option awards would be forfeited in full.

If either target is achieved at the minimum threshold of 80 % of target, then the shares are awarded at 75 % of the granted shares, with an increasing percentage of shares awarded above the minimum thresholds up to 120 % of the granted shares for each target.

The stock option awards will vest, subject to certification by the Compensation Committee of the Company’s Board of Directors upon the achievement of the 2025 Performance Targets, as to 25 % of the shares of common stock earned on the one year anniversary of the date of grant, and as to the remaining 75 % of the shares of common stock earned, in substantially equal quarterly installments over the subsequent 36 months, subject to the executive’s continuous service with the Company through the respective vesting dates.

If the combined non-GAAP net operating income target and the bookings target are achieved below 50 % of target, 50 % of the shares would be awarded, and the balance would be forfeited.

If the combined target is achieved at the minimum threshold of 50 % of target, then 75 % of the shares would be awarded, with an increasing percentage of shares awarded above the minimum thresholds up to 100 % of the granted shares for each target.

Each target result is then weighted by 50 % and the combined total determines the percent of target shares.

The maximum combined award is 100 %.

For the second plan, if the bookings target is achieved below 90 % of target, the performance-based stock option awards would be forfeited in full.

If the target is achieved at the minimum threshold of 90 % of target, then the shares are awarded at 75 % with an increasing percentage of shares awarded above the minimum thresholds up to 100 % of the granted shares.

The maximum award is 100 %.

The probability of meeting a portion of the performance conditions related to these performance-based stock option awards was assessed to be probable as of September 28, 2024, and stock-based compensation expense of $ 1.9 million was recognized for the three months ended September 28, 2024.

For the nine months ended September 28, 2024, stock-based compensation expense of $ 4.7 million was recognized.

During the three months ended September 28, 2024, 55,000 shares of common stock were issued pursuant to the exercise of stock options at a weighted-average exercise price of $ 13.31 per share.

During the nine months ended September 28, 2024, 0.3 million shares of common stock were issued pursuant to the exercise of stock options at a weighted-average exercise price of $ 9.66 per share.

As of September 28, 2024, unrecognized stock-based compensation expense of $ 60.7 million related to stock options, net of estimated forfeitures, is expected to be recognized over a weighted-average period of 1.9 years.

The probability of meeting the performance conditions was assessed to be probable as of March 29, 2025, and stock-based compensation expense of $ 4.1 million was recognized for the three months ended March 29, 2025.

In March 2025, stock option awards exercisable for up to an aggregate of 0.2 million shares of common stock were granted with a grant date weighted-average exercise price of $ 39.30 per share.

These stock option awards vest 25 % on the first anniversary of the vesting commencement date and on a quarterly basis thereafter over an additional three years .

During the three months ended March 29, 2025, 46,000 shares of common stock were issued pursuant to the exercise of stock options at a weighted-average exercise price of $ 31.47 per share.

As of March 29, 2025, unrecognized stock-based compensation expense of $ 106.7 million related to stock options, net of estimated forfeitures, is expected to be recognized over a weighted-average period of 2.4 years.

Employee Stock Purchase Plans

3 unchanged sentences

The price of common stock purchased under the ESPP is 85 % of the lower of the fair market value of the common stock on the commencement date and the end date of each six-month offering period.

As of September 28, 2024, there were 4.2 million shares available for issuance under the ESPP.

During the nine months ended September 28, 2024, 0.3 million shares were purchased under the ESPP.

As of September 28, 2024, unrecognized stock-based compensation expense of $ 1.2 million related to the ESPP is expected to be recognized over a remaining service period of 0.4 years.

As of March 29, 2025, there were 4.1 million shares available for issuance under the ESPP.

During the three months ended March 29, 2025, 0.2 million shares were purchased under the ESPP.

As of March 29, 2025, unrecognized stock-based compensation expense of $ 0.9 million related to the ESPP is expected to be recognized over a remaining service period of 0.4 years.

The NQ ESPP allows eligible employees to purchase shares of the Company’s common stock through payroll deductions of up to 25 % of their eligible recurring compensation.

Eligible employees have the right to (a) purchase the maximum number of whole shares of common stock that can be purchased with the elected payroll deductions during each offering period for which the employee is enrolled at a purchase price equal to the closing price of the Company’s common stock on the last day of such offering period and (b) receive an equal number of shares of the Company’s common stock that are subject to a risk of forfeiture in the event the employee terminates employment within the one year period immediately following the purchase date.

Eligible employees have the right to (a) purchase the maximum number of whole shares of common stock that can be purchased with the elected payroll deductions during each offering period for which

the employee is enrolled at a purchase price equal to the closing price of the Company’s common stock on the last day of such offering period and (b) receive an equal number of shares of the Company’s common stock that are subject to a risk of forfeiture in the event the employee terminates employment within the one year period immediately following the purchase date.

The NQ ESPP provides quarterly offering periods from February 8 th through May 7 th , May 8 th through August 7 th , August 8 th through November 7 th and November 8 th through February 7 th of each year, with a maximum of 0.35 million shares allocated per purchase period.

The maximum number of shares of common stock currently authorized for issuance under the NQ ESPP is 7.5 million shares.

As of September 28, 2024, there were 2.5 million shares available for issuance under the NQ ESPP.

During the nine months ended September 28, 2024, 0.8 million shares were purchased and issued.

As of September 28, 2024, unrecognized stock-based compensation expense of $ 13.5 million related to the NQ ESPP is expected to be recognized over a remaining weighted-average service period of 0.9 years.

As of March 29, 2025, there were 2.0 million shares available for issuance under the NQ ESPP.

During the three months ended March 29, 2025, 0.2 million shares were purchased and issued.

As of March 29, 2025, unrecognized stock-based compensation expense of $ 12.0 million related to the NQ ESPP is expected to be recognized over a remaining weighted-average service period of 0.8 years.

Stock-Based Compensation

The following table summarizes stock-based compensation expense (in thousands):

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Cost of revenue $ 780 $ 636

9 unchanged sentences

The repurchase program does not obligate the Company to acquire a particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion.

No shares were purchased during the three months ended September 28, 2024.

For the nine months ended September 28, 2024, the Company purchased 0.1 million shares of common stock for $ 3.7 million at an average price per share of $ 32.87 .

As of September 28, 2024, the remaining balance under the current authorizations was $ 109.9 million.

During the three months ended March 29, 2025, the Company purchased 1.2 million shares of common stock for $ 40.0 million at an average price per share of $ 34.56 .

As of March 29, 2025, the remaining authorized balance under this program was $ 62.9 million.

In April 2025, the Company’s Board of Directors authorized a $ 100.0 million increase to this program.

Revenue from Contracts with Customers

The Company develops, markets and sells a broadband platform and managed services, and there are no segment managers who are held accountable for operations, operating results and plans for levels or components below the Company unit level.

Accordingly, the Company is a single reporting segment and operating unit structure.

The Company’s chief operating decision maker is the Company’s Chief Executive Officer, who reviews financial information presented on a Company-wide basis, for purposes of allocating resources and evaluating financial performance.

The following is a summary of revenue disaggregated by geographic region based upon the location of the customers (in thousands):

Three Months Ended Nine Months Ended

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

United States $ 187,080 $ 235,128 $ 579,873 $ 695,491

Americas ex U.S.

6,573 7,414 20,760 26,280

Europe 5,588 19,377 19,161 46,483

Middle East & Africa 1,476 1,740 4,806 5,888

Asia Pacific 228 176 794 717

$ 200,945 $ 263,835 $ 625,394 $ 774,859

Contract Asset

1 unchanged sentence

Amounts are billed in accordance with the agreed-upon contractual terms.

Contract assets were $ 3.4 million as of September 28, 2024 as compared to $ 4.7 million as of December 31, 2023, and are included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets.

The Company expects to bill 28 % of the September 28, 2024 balance during 2024.

Contract assets were $ 3.2 million as of March 29, 2025 as compared to $ 2.8 million as of December 31, 2024, and are included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets.

The Company expects to bill 36 % of the March 29, 2025 balance during 2025.

Contract Liability

Deferred revenue was $ 50.9 million, $ 54.2 million and $ 61.5 million as of September 28, 2024, June 29, 2024 and December 31, 2023, respectively.

The decrease in the deferred revenue balance for the three and nine months ended September 28, 2024 was driven by $ 13.2 million and $ 25.8 million of revenue recognized that was included in the deferred revenue balance at the beginning of each respective period and a trend to move to monthly from annual billing arrangements.

This was partially offset by cash payments received or due in advance of satisfying the Company’s performance obligations.

Deferred revenue was $ 50.8 million and $ 47.6 million as of March 29, 2025 and December 31, 2024, respectively.

The increase in the deferred revenue balance for the three months ended March 29, 2025 was driven by cash payments received or due in advance of satisfying the Company’s performance obligations offset by $ 11.0 million of revenue recognized that was included in the deferred revenue balance at the beginning of the period.

Revenue allocated to remaining performance obligations (“RPOs”) represents contract revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods but excludes variable consideration where the monthly invoicing is based on usage or where actual usage exceeds the minimum commitment.

RPOs were $ 295.7 million as of September 28, 2024, and the Company expects to recognize as revenue 37 % of this amount over the next 12 months and nearly all of the remainder over the two years thereafter.

RPOs were $ 340.4 million as of March 29, 2025, and the Company expects to recognize as revenue 38 % of this amount over the next 12 months and nearly all of the remainder over the two years thereafter.

Contract Costs

The Company capitalizes certain sales commissions related primarily to multi-year subscriptions and extended warranty support for which the expected amortization period is greater than one year.

As of September 28, 2024 and December 31, 2023, the unamortized balance of deferred commissions was $ 13.8 million and $ 12.0 million, respectively.

For the three and nine months ended September 28, 2024, the amount of amortization was $ 2.3 million and $ 6.4 million, respectively, compared to $ 1.7 million and $ 4.6 million for the three and nine months ended September 30, 2023, respectively.

As of March 29, 2025 and December 31, 2024, the unamortized balance of deferred commissions was $ 17.6 million and $ 17.9 million, respectively.

For the three months ended March 29, 2025 and March 30, 2024, the amount of amortization was $ 2.7 million and $ 2.0 million, respectively.

There was no impairment loss in relation to the costs capitalized for these periods.

Concentration of Customer Risk

No customer accounted for more than 10% of the Company’s revenue for the three and nine months ended September 28, 2024 and September 30, 2023.

One customer represented 14 % of the Company’s total receivables and one customer represented 12 % of accounts receivable as of September 28, 2024.

Two customers represented 19 % and 14 % of the Company’s accounts receivable as of December 31, 2023.

No customer accounted for more than 10% of the Company’s revenue for the three months ended March 29, 2025 and March 30, 2024.

Two customers represented 13 % and 12 % of the Company’s total receivables as of March 29, 2025 and one customer represented 11 % and 21 % of the Company’s total receivables as of March 29, 2025 and December 31, 2024, respectively.

Segment Information

The Company develops, markets and sells an appliance-based broadband platform, cloud and managed services, and there are no segment managers who are held accountable for operations, operating results and plans for levels or components below the Company unit level.

Accordingly, the Company is considered to be in a single reporting segment and operating unit structure.

The Company’s chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer, who reviews financial information presented on a Company-wide basis, for purposes of allocating resources and evaluating financial performance.

The CODM assesses the performance of the single segment and allocates resources based on revenue and measures derived from gross margin and operating income (loss) that is reported in the Condensed Consolidated Statements of Comprehensive Income (Loss).

In addition, the CODM uses a measure derived from operating expenses in the Condensed Consolidated Statements of Comprehensive Income (Loss) to monitor budget versus actual results to determine the Company’s and management’s performance.

The Company does not have intra-entity sales or transfers.

The measure of the single segment assets is the consolidated assets in the Condensed Consolidated Balance Sheet.

The accounting policies of the single segment are the same as described in the significant accounting policies.

Geographic Information:

A summary of revenue disaggregated by geographic region based upon the location of the customers was as follows (in thousands):

Three Months Ended

March 29, 2025 March 30, 2024

United States $ 211,179 $ 210,089

Americas ex U.S.

Europe 2,528 6,860

Rest of world 1,067 2,225

$ 220,242 $ 226,310

The Company’s property and equipment, net of accumulated depreciation, were located in the following geographical areas (in thousands):

2025 December 31, 2024

United States $ 27,180 $ 27,601

China 2,918 2,818

India 734 734

$ 30,832 $ 31,153

Selected Financial Information:

The following table presents selected financial information with respect to the Company’s single operating segment (in thousands):

Three Months Ended

2025 March 30,

Revenue $ 220,242 $ 226,310

Adjusted cost of revenue (1)

( 96,456 ) ( 102,141 )

Adjusted sales and marketing operating expenses (2)

( 51,590 ) ( 49,047 )

Adjusted research and development operating expenses (3)

( 38,899 ) ( 39,907 )

Adjusted general and administrative operating expenses (4)

( 19,335 ) ( 19,435 )

Other segment items (5)

( 20,043 ) ( 17,812 )

Interest income and other expenses, net 3,091 2,500

Income taxes ( 1,797 ) ( 365 )

Net income (loss) $ ( 4,787 ) $ 103

(1) GAAP cost of revenue adjusted for stock-based compensation and intangible asset amortization.

(2) GAAP sales and marketing operating expenses adjusted for stock-based compensation.

(3) GAAP research and development operating expenses adjusted for stock-based compensation.

(4) GAAP general and administrative operating expenses adjusted for stock-based compensation.

(5) Other segment items consisted of stock-based compensation expense and intangible asset amortization.

The following table presents income taxes and the effective tax rates for the periods indicated (in thousands, except percentages):

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Income (loss) before income taxes $ ( 2,990 ) $ 468

Income taxes (benefit) $ ( 3,824 ) $ 1,190 $ ( 4,183 ) $ 7,857

Income taxes $ 1,797 $ 365

Effective tax rate ( 60.1 ) % 78.0 %

The Company’s income taxes for the three and nine months ended September 28, 2024 and September 30, 2023 were determined using an estimated effective tax rate adjusted for discrete items that occurred during the respective periods.

The Company’s effective tax rate for the three and nine months ended September 28, 2024 and September 30, 2023 differed from the statutory federal corporate tax rate of 21% primarily due the effect of non-deductible stock-based compensation for executive officers offset by the favorable impact of U.S.

The Company has historically recorded its interim period provision for income taxes by applying a forecasted annual effective tax rate to year-to-date earnings and adjusting for discrete items.

However, due to the level of forecasted provision for income taxes relative to the forecasted pre-tax income used in computing the effective tax rate, the effective tax rate is highly sensitive to fluctuations in pre-tax income and does not provide a reasonable estimate for income taxes in the interim period.

As such, the Company has computed its provision for income taxes for the three months ended March 29, 2025 and March 30, 2024 using an actual year-to-date tax calculation.

The Company plans to revert to applying a forecasted annual effective tax rate to year-to-date earnings and adjusting for discrete items once that method produces more reasonable results.

The Company’s effective tax rate for the three months ended March 29, 2025 differed from the statutory federal corporate tax rate of 21% primarily due to state taxes, the effect of non-deductible stock-based compensation for executive officers, excess tax expense from stock-based compensation offset by the favorable impact of U.S.

federal research tax credits and the U.S.

tax impact of foreign operations.

The Company’s effective tax rate for the three months ended March 30, 2024 differed from the statutory federal corporate tax rate of 21% primarily due to state taxes and the effect of non-deductible stock-based compensation for executive officers offset by the favorable impact of U.S.

federal research tax credits, excess tax benefits from stock-based compensation and the U.S.

tax impact of foreign operations.

The Company has net deferred tax assets that have arisen primarily as a result of temporary differences, capitalized research and development costs and tax credits.

The Company’s ability to realize a deferred tax asset is based on its ability to generate sufficient future taxable income within the applicable carryforward period and subject to any applicable limitations.

Management believes that it is more likely than not that the Company will utilize a significant portion of its deferred tax assets.

The Company maintained a valuation allowance of $ 29.3 million for the three and nine months ended September 28, 2024, compared to $ 29.9 million for the three and nine months ended September 30, 2023, on certain U.S.

The Company maintained a valuation allowance of $ 30.6 million for the three months ended March 29, 2025, compared to $ 29.9 million for the three months ended March 30, 2024, on certain U.S.

federal and state deferred tax assets that the Company believes are not more likely than not to be realized in future periods.

During the three months ended September 28, 2024, the Company released a valuation allowance of $ 0.6 million related to foreign tax credits that the Company expects to utilize prior to expiration.

The Company considered scheduled reversals of deferred tax liabilities, historic profitability, projected future taxable income, ongoing tax planning strategies and other matters, including the period over which its deferred tax assets will be recoverable, in assessing the need for and the amount of the valuation allowance.

In the event that actual results differ from these estimates, or if the Company decides to adjust these estimates in the future periods, further adjustments to its valuation allowance may be recorded, which could materially impact the Company’s financial position and net income in the period of the adjustment.

In December 2021, the Organization for Economic Cooperation and Development enacted model rules for a new global minimum tax framework (“Pillar Two”), and certain governments in countries which the Company operates have enacted local

Pillar Two legislation, with an effective date from January 1, 2024.

The Company currently does not expect Pillar Two to have a material impact on its financial statements.

1 unchanged sentence

The following table sets forth the computation of basic and diluted net income (loss) per common share for the periods indicated (in thousands, except per share data):

Three Months Ended Nine Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended

2025 March 30,

Net income (loss) $ ( 4,787 ) $ 103

7 unchanged sentences

Potentially dilutive shares have been excluded from the computation of diluted net income (loss) per common share when their effect is antidilutive.

These antidilutive shares were from stock options.

These antidilutive shares were primarily from stock options.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements