CALIX, INC 10-K

ITEM 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm 39 Consolidated Balance Sheets, As of December 31, 202 5 and 202 4 41 Consolidated Statements of Comprehensive Income (Loss), Years Ended December 31, 202 5 , 202 4 and 202 3 42 Consolidated Statements of Stockholders’ Equity, Years Ended December 31, 202 5 , 202 4 and 202 3 43 Consolidated Statements of Cash Flows, Years Ended December 31, 202 5 , 202 4 and 202 3 44 Notes to Consolidated Financial Statements 45 38 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Calix, Inc.: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of Calix, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 39 Table of Contents Evaluation of net realizable value of components and finished goods inventory and excess and obsolete component liabilities As discussed in Notes 1 and 4 to the consolidated financial statements, the Company has components and finished goods inventories with a carrying value of $133.7 million and excess and obsolete component liabilities as of December 31, 2025. The Company writes down the on-hand inventory carrying value for excess or obsolete inventory and records a liability for excess and obsolete component inventory that the Company is obligated to purchase from its suppliers. These write-downs and accruals are based on assumptions about future demand for products, market conditions, potential obsolescence of technology, product life cycle, and whether pricing trends or forecasts indicate that the carrying value of inventory exceeds the estimated selling price. These factors are impacted by changes in economic conditions, technology, and customer base as well as new product introductions and require significant estimates that may include elements that are uncertain. We identified the evaluation of net realizable value of inventory and excess and obsolete component liabilities as a critical audit matter. Evaluation of the Company’s forecasted demand, including the Company’s determination of the effect of market and economic conditions, technology changes, changes in the customer base, new product introductions, and discontinuation of products required significant auditor judgment. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s inventory process. This included controls over the reviews of the estimates of the net realizable value of excess or obsolete components and finished goods inventory and liabilities for losses on components the Company is obligated to purchase from its suppliers. For a selection of inventory items owned by the Company, we (1) reperformed the analysis provided by the Company to assess the accuracy of the net realizable value of inventory by comparing historical sales activity, customer order backlog, or demand forecasts to the inventory on hand quantities, and (2) performed inquiries of Company’s personnel or inspected documents regarding product end of life announcements, technology changes, and new product introductions. For a selection of components subject to the Company’s purchase commitments, we (1) evaluated the reasonableness of management’s assumptions used to estimate the excess and obsolete component liabilities by considering historical sales activity, customer order backlog, or demand forecasts of the related finished products and (2) performed inquiries of Company’s personnel or inspected documents regarding product end of life announcements, technology changes, new product introductions, and historical reimbursements to suppliers for excess and obsolete components. /s/ KPMG LLP We have served as the Company’s auditor since 2016. Santa Clara, California February 20, 2026 40 Table of Contents CALIX, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except par value) December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 143,086 $ 43,162 Marketable securities 245,018 253,929 Accounts receivable, net 99,367 79,321 Inventory 133,737 102,727 Prepaid expenses and other current assets 70,345 105,596 Total current assets 691,553 584,735 Property and equipment, net 37,812 31,153 Right-of-use operating leases 14,665 6,216 Deferred tax assets 165,636 177,601 Goodwill 116,175 116,175 Other assets 32,681 23,387 $ 1,058,522 $ 939,267 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 41,523 $ 20,226 Accrued liabilities 91,339 84,167 Deferred revenue 30,386 26,750 Total current liabilities 163,248 131,143 Long-term portion of deferred revenue 19,890 20,883 Operating leases 12,756 3,720 Other long-term liabilities 3,409 2,581 Total liabilities 199,303 158,327 Commitments and contingencies (See Note 5) Stockholders’ equity: Preferred stock, $ 0.025 par value; 5,000 shares authorized; no shares issued and outstanding as of December 31, 2025 and 2024 — — Common stock, $ 0.025 par value; 100,000 shares authorized; 67,120 shares issued and outstanding as of December 31, 2025, and 66,434 shares issued and outstanding as of December 31, 2025 1,678 1,661 Additional paid-in capital 1,230,191 1,170,017 Accumulated other comprehensive loss ( 408 ) ( 612 ) Accumulated deficit ( 372,242 ) ( 390,126 ) Total stockholders’ equity 859,219 780,940 $ 1,058,522 $ 939,267 See accompanying notes to consolidated financial statements. 41 Table of Contents CALIX, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands, except per share data) Years Ended December 31, 2025 2024 2023 Revenue: Appliance $ 825,649 $ 694,147 $ 931,468 Software and service 174,361 137,371 108,125 Total revenue 1,000,010 831,518 1,039,593 Cost of revenue: Appliance 367,088 317,842 471,461 Software and service 64,606 60,082 49,816 Total cost of revenue 431,694 377,924 521,277 Gross profit 568,316 453,594 518,316 Operating expenses: Sales and marketing 248,636 217,879 214,564 Research and development 190,356 179,870 177,772 General and administrative 108,334 98,879 100,395 Total operating expenses 547,326 496,628 492,731 Operating income (loss) 20,990 ( 43,034 ) 25,585 Interest income and other expense, net: Interest income, net 13,434 12,343 9,704 Other expense, net ( 256 ) ( 955 ) ( 532 ) Total interest income and other expense, net 13,178 11,388 9,172 Income (loss) before income taxes 34,168 ( 31,646 ) 34,757 Income tax expense (benefit) 16,284 ( 1,899 ) 5,432 Net income (loss) $ 17,884 $ ( 29,747 ) $ 29,325 Net income (loss) per common share: Basic $ 0.27 $ ( 0.45 ) $ 0.44 Diluted $ 0.26 $ ( 0.45 ) $ 0.42 Weighted-average number of shares used to compute net income (loss) per common share: Basic 66,041 65,879 65,980 Diluted 69,305 65,879 69,320 Net income (loss) $ 17,884 $ ( 29,747 ) $ 29,325 Other comprehensive income, net of tax: Unrealized gain on available-for-sale marketable securities, net 343 187 1,701 Foreign currency translation adjustments, net ( 139 ) ( 140 ) 113 Total other comprehensive income, net of tax 204 47 1,814 Comprehensive income (loss) $ 18,088 $ ( 29,700 ) $ 31,139 See accompanying notes to consolidated financial statements. 42 Table of Contents CALIX, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands) Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Loss Deficit Equity Balance as of December 31, 2022 65,735 $ 1,644 $ 1,070,100 $ ( 2,473 ) $ ( 389,704 ) $ 679,567 Stock-based compensation — — 62,771 — — 62,771 Issuance of common stock under equity incentive plans, net of forfeitures 1,527 38 32,111 — — 32,149 Repurchase of common stock including excise tax ( 2,210 ) ( 55 ) ( 86,589 ) — — ( 86,644 ) Net income — — — — 29,325 29,325 Other comprehensive income — — — 1,814 — 1,814 Balance as of December 31, 2023 65,052 1,627 1,078,393 ( 659 ) ( 360,379 ) 718,982 Stock-based compensation — — 70,761 — — 70,761 Issuance of common stock under equity incentive plans, net of forfeitures 1,724 43 31,549 — — 31,592 Repurchase of common stock ( 342 ) ( 9 ) ( 10,686 ) — — ( 10,695 ) Net loss — — — — ( 29,747 ) ( 29,747 ) Other comprehensive income — — — 47 — 47 Balance as of December 31, 2024 66,434 1,661 1,170,017 ( 612 ) ( 390,126 ) 780,940 Stock-based compensation — — 88,625 — — 88,625 Issuance of common stock under equity incentive plans, net of forfeitures 3,208 80 65,116 — — 65,196 Repurchase of common stock ( 2,522 ) ( 63 ) ( 93,567 ) — — ( 93,630 ) Net income — — — — 17,884 17,884 Other comprehensive income — — — 204 — 204 Balance as of December 31, 2025 67,120 $ 1,678 $ 1,230,191 $ ( 408 ) $ ( 372,242 ) $ 859,219 See accompanying notes to consolidated financial statements. 43 Table of Contents CALIX, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Years Ended December 31, 2025 2024 2023 Operating activities: Net income (loss) $ 17,884 $ ( 29,747 ) $ 29,325 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Stock-based compensation 87,929 70,761 62,771 Depreciation and amortization 17,710 19,550 16,631 Deferred income taxes 12,911 ( 9,969 ) ( 660 ) Net accretion of available-for-sale securities ( 3,697 ) ( 5,286 ) ( 4,199 ) Changes in operating assets and liabilities: Accounts receivable, net ( 20,046 ) 46,706 ( 32,222 ) Inventory ( 31,010 ) 30,258 16,175 Prepaid expenses and other assets 17,297 11,167 ( 60,795 ) Accounts payable 21,509 ( 15,138 ) ( 6,369 ) Accrued liabilities 3,017 ( 31,926 ) 37,070 Deferred revenue 2,643 ( 13,900 ) 2,921 Other long-term liabilities 8,806 ( 4,076 ) ( 4,397 ) Net cash provided by operating activities 134,953 68,400 56,251 Investing activities: Purchases of property and equipment ( 19,435 ) ( 18,054 ) ( 17,855 ) Purchases of marketable securities ( 220,839 ) ( 301,677 ) ( 216,193 ) Sales of marketable securities 28,142 49,902 — Maturities of marketable securities 205,759 160,299 227,803 Net cash used in investing activities ( 6,373 ) ( 109,530 ) ( 6,245 ) Financing activities: Proceeds from common stock issuances related to employee benefit plans 65,196 31,592 32,149 Repurchases of common stock ( 93,630 ) ( 10,695 ) ( 86,397 ) Payments related to financing arrangements — — ( 11,678 ) Net cash provided by (used in) financing activities ( 28,434 ) 20,897 ( 65,926 ) Effect of exchange rate changes on cash and cash equivalents ( 222 ) ( 14 ) 256 Net increase (decrease) in cash and cash equivalents 99,924 ( 20,247 ) ( 15,664 ) Cash and cash equivalents at beginning of year 43,162 63,409 79,073 Cash and cash equivalents at end of year $ 143,086 $ 43,162 $ 63,409 Supplemental disclosures of cash flow information: Interest paid $ — $ — $ 253 Income taxes paid $ 6,884 $ 5,878 $ 11,873 Non-cash investing activities: Changes in accounts payable and accrued liabilities related to purchases of property and equipment $ 3,943 $ 484 $ ( 180 ) See accompanying notes to consolidated financial statements. 44 Table of Contents CALIX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Description of Business and Significant Accounting Policies Company Calix, Inc. (together with its subsidiaries, “Calix,” “we,” “us,” or “our”) was incorporated in August 1999 and is a Delaware corporation. We develop, market and sell platform, cloud and managed services, which are powered by agentic AI, that enable communications service providers (“CSPs”) of all types and sizes to innovate and transform their businesses to focus on delivering an outstanding subscriber experience and become Communication Experience Providers (“CXPs”). The platform combines the Calix Agent Workforce™ with intelligent appliances, software, cloud and fully integrated SmartLife™ managed services to enable simplified business models that acquire, retain and grow subscribers and revenue. Calix Customer Success guides service providers through every stage of their transformation journey with expertise across technology, business and market insights. Our partner community extends innovation so customers can grow their businesses across markets at scale. With deep broadband expertise and an end-to-end approach from the datacenters’ access edge to every residential, business and municipal subscriber location, Calix enables any service provider to simplify operations, engagement, and service; innovate for their subscribers; and grow value for members, investors, and the communities they serve. This focus on subscriber experience allows CXPs to expand their brand through increased subscriber acquisition, loyalty and revenue while reducing their operating costs. Basis of Presentation and Accounting Guidance The accompanying consolidated financial statements have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (“SEC”) and U.S. generally accepted accounting principles (“GAAP”). All significant intercompany balances and transactions have been eliminated in consolidation. Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative U.S. GAAP as found in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). Use of Estimates The preparation of financial statements is in conformity with GAAP, which requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. For Calix, these estimates include, but are not limited to, allowances for doubtful accounts and sales returns, excess and obsolete inventory, allowances for obligations to our contract manufacturers, valuation of stock-based compensation, useful lives assigned to long-lived assets, standard and extended warranty costs, realizability of deferred tax assets and uncertain tax positions and contingencies. Actual results could differ from those estimates, and such differences could be material to our financial position and results of operations. Revenue Recognition Revenue is recognized when a performance obligation is satisfied, which occurs when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenue from sales of access and premises appliances is recognized when control is transferred to the customer, which is generally when the products are shipped. Revenue from software platform licenses, which provides the customer with a right to use the software as it exists, is generally recognized upfront when the license is made available to the customer. Revenue from cloud-based software subscriptions, customer support, maintenance, extended warranty subscriptions and managed services is generally recognized ratably over the contract term. Revenue from professional services and training is recognized as the services are delivered. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Our hardware products contain both software and non-software components that function together to deliver the products’ essential functionality and therefore constitutes a single performance obligation as the promise to transfer the individual software and non-software components is not separately identifiable and, therefore, not distinct. Cloud-based software subscriptions can include multi-year agreements with a fixed annual fee for a minimum committed usage level. To the extent that minimum committed usage level each year varies, we have concluded that each year represents a distinct stand-ready performance obligation and the transaction price allocated to each performance obligation is recognized as revenue ratably over each annual period. Our contracts generally include multiple performance obligations. For such arrangements, we allocate the contract’s transaction price to each performance obligation using the relative stand-alone selling price of each distinct good or service in the contract. 45 Table of Contents Observable prices of a product or service when we sell them separately based on stratification by classes of customers and products are the best estimate of stand-alone selling prices. However, when stand-alone selling prices are not directly observable, they are estimated, and judgment is required in their determination. In these instances, we determine stand-alone selling prices using all other available information, which may include pricing practices relative to geographies, market conditions, competitive landscape, characteristics of targeted customers for hardware products, internal costs and gross margin objectives for services and internal costs and value assessments for subscriptions. Cost of Revenue Cost of revenue consists primarily of finished goods inventory purchased from our contract manufacturers, payroll and related expenses associated with managing the relationships with contract manufacturers, depreciation of manufacturing test equipment, warranty and retrofit costs, excess and obsolete inventory costs, allowances for obligations to our contract manufacturers, shipping charges and amortization of certain intangible assets. It also includes contractor and other costs of services incurred directly related to the delivery of services to customers. Warranty and Retrofit We offer limited warranties for our hardware products for a period of one or five years , depending on the product type. We recognize estimated costs related to warranty activities as a component of cost of revenue upon product shipment or upon identification of a specific product failure. Under certain circumstances, we also provide fixes on specifically identified performance failures for products that are outside of the standard warranty period and recognize estimated costs related to retrofit activities as a component of cost of revenue upon identification of such product failures. We recognize estimated warranty and retrofit costs when it is probable that a liability has been incurred and the amount of loss is reasonably estimable. The estimates are based upon historical and projected product failure and claim rates, historical costs incurred in correcting product failures and information available related to any specifically identified product failures. Judgment is required in estimating costs associated with warranty and retrofit activities, and our estimates are limited to information available to us at the time of such estimates. In some cases, such as when a specific product failure is first identified or a new product is introduced, we may initially have limited information and limited historical failure and claim rates upon which to base our estimates, and such estimates may require revision in future periods. The recorded amount is adjusted from time to time for specifically identified warranty and retrofit exposure. Actual warranty and retrofit expenses are charged against our estimated warranty and retrofit liability when incurred. Factors that affect our warranty and retrofit liability include the number of active installed units and historical and anticipated rates of warranty and retrofit claims and cost per claim. Stock-Based Compensation Stock-based compensation expense associated with stock options, restricted stock awards (“RSAs”) and purchase rights under the Amended and Restated Employee Stock Purchase Plan (the “ESPP”) and the non-executive Stock Purchase and Matching Plan (“SPMP”) is measured at the grant date based on the fair value of the award and is recognized, net of forfeitures, as expense over the remaining requisite service period (generally the vesting period) on a straight-line basis. The fair value of stock option and employee stock purchase right under the ESPP is estimated at the grant date using the Black-Scholes option valuation model. The fair value of the employee stock purchase right under the SPMP and RSAs is based on closing market price of our common stock on the date of grant. Stock-based compensation expense associated with performance stock options (“PSOs”) with graded vesting features and which contain both a performance and a service condition is measured based on fair value of stock options estimated at the grant date using the Black-Scholes option valuation model, and is recognized, net of forfeitures, as expense over the requisite service period using the graded vesting attribution method. Compensation expense is only recognized if we have determined that it is probable that the performance condition will be met. We reassess the probability of vesting at each reporting period and adjusts compensation expense based on our probability assessment. Loss Contingencies We occasionally face legal proceedings from business activities. We evaluate the likelihood of an unfavorable outcome and record a loss contingency when the loss is probable and reasonably estimable. This assessment involves significant judgment and uncertainty, influenced by factors beyond our control. We estimate potential losses based on available information and reassesses these estimates quarterly. Changes in estimates could impact our business, operating results or financial condition. Actual outcomes may differ from these estimates, potentially affecting us materially. 46 Table of Contents Credit Risk and Inventory Supplier Concentrations Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities and accounts receivable. Cash equivalents consist of money market funds and marketable securities with a maturity at the date of purchase of ninety days or less, which are invested through financial institutions in the United States. Deposits in and investments held by these financial institutions may, at times, exceed federally insured limits. We have not experienced any losses in such accounts. We also have approximately $ 12.4 million of cash held by our foreign subsidiaries in India, China and the United Kingdom. We believe that the financial institutions that hold our cash and cash equivalents are financially sound and, accordingly, minimal credit risk exists with respect to these cash and cash equivalents. We depend primarily on a small number of outside contract manufacturers (“CMs”) and original design manufacturers (“ODMs”) for the bulk of our finished goods inventory. We generally purchase our products through purchase orders with our suppliers. While we seek to maintain a sufficient supply of our products, our business and results of operations could be adversely affected by a stoppage or delay in receiving such products, the receipt of defective parts, an increase in price of such products or our inability to obtain lower prices from our CMs, ODMs and other suppliers in response to competitive pressures. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, trade receivables, accounts payable and other accrued liabilities approximate their fair value due to their relatively short-term nature. Marketable securities are valued using quoted market prices in active markets to determine fair value. Cash, Cash Equivalents and Marketable Securities Cash equivalents and marketable securities are stated at amounts that approximate fair value based on quoted market prices. We have invested our excess cash primarily in money market funds and highly liquid marketable securities such as U.S. treasury securities, corporate debt instruments, commercial paper and U.S. government securities. We consider all investments with maturities of three months or less when purchased to be cash equivalents. Marketable securities represent highly liquid U.S. treasury securities, corporate debt instruments, commercial paper and U.S. government securities with maturities greater than 90 days at date of purchase. Marketable securities with maturities greater than one year are classified as current because management considers all marketable securities to be available for current operations. Our investments have been classified and accounted for as available-for-sale. Such investments are recorded at fair value and unrealized holding gains and losses are reported as a separate component of comprehensive loss in the stockholders’ equity until realized. 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 not significant for the years ended December 31, 2025 and 2024, respectively. For our available-for-sale debt securities in an unrealized loss position, we determine whether a credit loss exists. In this assessment, among other factors, we consider the extent to which the fair value is less than the amortized cost, any changes to the rating of the security by a rating agency and adverse conditions specifically related to the security. If factors indicate a credit loss exists, an allowance for credit loss will be recorded to “Other expense, net,” limited by the amount that the fair value is less than the amortized cost basis. The amount of fair value change relating to all other factors will be recognized in other comprehensive loss. See Note 2 “ Cash, Cash Equivalents and Marketable Securities.” Allowance for Doubtful Accounts We maintain an allowance for doubtful accounts for expected credit losses at contract inception resulting from the inability of our customers to make required payments. We record a specific allowance and revise the expected loss based on an analysis of individual past-due balances. Additionally, based on historical write-offs and our collection experience, we record an additional allowance based on a percentage of outstanding receivables. We perform credit evaluations of our customers’ financial condition. These evaluations require judgment and are based on a variety of factors including, but not limited to, current economic trends, payment history and a financial review of the customer. Actual collection losses may differ from our estimates, and such differences could be material to our financial position and results of operations. Inventory Valuation and Supplier Purchase Commitments Inventory, which primarily consists of finished goods purchased from CMs or ODMs, is stated at the lower of cost (determined by the first-in, first-out method) and net realizable value. Inbound shipping costs and tariffs are included in the cost of inventory. In addition, from time to time, we procure component inventory primarily due to the discontinuation of critical components by suppliers, a change in suppliers or in connection with our supply assurance plans. This component inventory is then consigned back to our suppliers to be consumed on future finished good builds. 47 Table of Contents We regularly monitor inventory on-hand and record write-downs for excess and obsolete inventory. We also evaluate our supplier purchase commitments and record a liability for excess and obsolete components consistent with the valuation of our excess and obsolete inventory and future production requirements. These write-downs and accruals are based on our assumptions of demand for our products and require significant judgment of relevant factors including a comparison of the quantity and cost of inventory on hand to our estimated forecast of customer demand, current levels of orders and backlog, market conditions, potential obsolescence of technology, product life cycles and whether pricing trends or forecasts indicate that the carrying value of inventory exceeds our estimated selling price. Factors that could influence our assumptions and judgments include changes in economic conditions, competitive dynamics, winning or losing a key customer, changes in our customers’ capital expenditures, government investment programs, technology changes, new product introductions and supply-chain lead times. Actual demand may differ from forecasted demand and may have a material effect on gross profit. If inventory is written down, a new cost basis is established that cannot be increased in future periods. Contract Costs We capitalize certain sales commissions related primarily to multi-year cloud-based software subscriptions and extended warranty support contracts. Capitalized commissions are amortized as sales and marketing expenses over the period that the related revenue is recognized, which can be up to five years for extended warranty. We classify the unamortized portion of deferred commissions as current or noncurrent based on the timing of when we expects to recognize the expense. The current and noncurrent portions of deferred commissions are included in “Prepaid expenses and other current assets” and “Other assets,” respectively, in our Consolidated Balance Sheets. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation, and are depreciated using the straight-line method over the estimated useful life of each asset. Generally, computer equipment is depreciated over two years ; purchased software is depreciated over three to five years ; test equipment is depreciated over three years ; furniture and fixtures are depreciated over seven years ; and leasehold improvements are depreciated over the shorter of the respective lease term or the estimated useful life of the asset. Maintenance and repairs are charged to expense as incurred. Goodwill Goodwill was recorded as a result of our acquisitions of Optical Solutions, Inc. in 2006 and Occam Networks, Inc. in 2011. We record goodwill when consideration paid in a business acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized but instead is subject to an annual impairment test or more frequently if events or changes in circumstances indicate that it may be impaired. We evaluate goodwill on an annual basis as of the end of the second quarter of each fiscal year. We have determined that it operates as a single reporting unit and, therefore, evaluates goodwill impairment at the enterprise level. At the end of the second quarter of 2025, we completed our annual goodwill impairment test. Based on our assessment of certain qualitative factors such as market capitalization, we concluded that the fair value of Calix was more likely than not greater than the carrying amount as of July 2, 2025. As such, it was not necessary to perform the two-step quantitative goodwill impairment test at the time. There have been no significant events or changes in circumstances subsequent to the 2025 annual impairment test that would more likely than not indicate that the carrying value of goodwill may have been impaired as of December 31, 2025. There were no impairment losses for goodwill for the years ended December 31, 2025, 2024 or 2023. Deferred Revenue Deferred revenue results from transactions where we billed the customer for products or services and when cash payments are received or due prior to transferring control of the promised goods or services to the customer. Payment terms to customers typically range from net 30 to net 90 days and vary by the size and location of customer and the products or services offered. The period between the transfer of control of the promised good or service to a customer and when payment is due is not a significant financing component. Income Taxes We evaluate our tax positions and estimate our current tax exposure along with assessing temporary differences that result from different book to tax treatment of items not currently deductible for tax purposes. These differences result in deferred tax assets and liabilities on our Consolidated Balance Sheets, which are estimated based upon the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates that will be in effect when these differences reverse. 48 Table of Contents In general, deferred tax assets represent future tax benefits to be received when certain expenses previously recognized in our Consolidated Statements of Comprehensive Income (Loss) become deductible expenses under applicable income tax laws or loss or credit carryforwards are utilized. Accordingly, realization of our deferred tax assets is dependent on future taxable income against which these deductions, losses and credits can be utilized. We must assess the likelihood that deferred tax assets will be recovered from future taxable income, and if we determine that recovery is not more likely than not, we must establish a valuation allowance. Management judgment is required in determining our provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. Newly Adopted Accounting Standards Income taxes In December 2023, the FASB issued Accounting Standard Update (“ASU”) No. 2023-09, Income Taxes , which prescribes standardized categories and disaggregation of information in the reconciliation of provision for income taxes, requires disclosure of disaggregated income taxes paid and modifies other income tax-related disclosure requirements. We adopted the new standard effective for our 2025 annual reporting period. See footnote “9. Income Taxes.” Recent Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures , which requires additional disclosure of certain costs and expenses within the notes to the financial statements. The updated standard is effective for our annual periods beginning in 2027 and interim periods beginning in the first quarter of 2028. Early adoption is permitted. We are currently evaluating the impact that the updated standard will have on our financial statement disclosures. In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , which clarifies and modernizes the accounting for internal-use software. ASU No. 2025-06 is effective for us in the first quarter of fiscal 2028, with early adoption permitted. The standard permits application of the guidance using a prospective, retrospective, or modified transition approach. We are currently evaluating the impact that the updated standard will have on our financial statement disclosures. There have been no other accounting pronouncements or changes in accounting pronouncements that are significant or potentially significant to our Consolidated Financial Statements. 2. Cash, Cash Equivalents and Marketable Securities Cash, cash equivalents and marketable securities consisted of the following (in thousands): December 31, 2025 2024 Cash and cash equivalents: Cash $ 23,644 $ 20,664 Commercial paper 75,100 10,058 Money market funds 40,879 4,890 U.S. government agency securities 3,463 — U.S. government securities — 7,550 Total cash and cash equivalents 143,086 43,162 Marketable securities: Corporate debt securities 177,127 123,701 U.S. government securities 40,510 66,582 Commercial paper 9,653 22,715 U.S. government agency securities 9,027 24,411 Certificates of deposit 8,701 16,520 Total marketable securities 245,018 253,929 $ 388,104 $ 297,091 The carrying amounts of our money market funds approximate their fair values due to their nature, duration and short maturities. As of December 31, 2025, all marketable securities were due in three years or less. 49 Table of Contents The amortized cost and fair value of marketable securities as of December 31, 2025 were as follows (in thousands): Amortized Cost Gross Unrealized Gains, net Fair Value Corporate debt securities $ 176,572 $ 555 $ 177,127 Commercial paper 84,752 1 84,753 U.S. government securities 40,382 128 40,510 U.S. government agency securities 12,465 25 12,490 Certificates of deposit 8,692 9 8,701 $ 322,863 $ 718 $ 323,581 The amortized cost and fair value of marketable securities as of December 31, 2024 were as follows (in thousands): Amortized Cost Gross Unrealized Gains, net Fair Value Corporate debt securities $ 123,519 $ 182 $ 123,701 U.S. government securities 74,118 14 74,132 U.S. government agency securities 24,380 31 24,411 Certificates of deposit 16,505 15 16,520 Commercial paper 32,766 7 32,773 $ 271,288 $ 249 $ 271,537 3. Fair Value Measurements We measure our cash equivalents and marketable securities at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. We utilize the following three-tier value hierarchy which prioritizes the inputs used in measuring fair value: Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – Observable inputs other than quoted prices included in Level 1 for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-driven valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 – Unobservable inputs to the valuation derived from fair valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The fair value hierarchy also requires us to maximize the use of observable inputs, when available, and to minimize the use of unobservable inputs when determining inputs and determining fair value. The following tables sets forth our financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): As of December 31, 2025 Level 1 Level 2 Total Money market funds $ 40,879 $ — $ 40,879 U.S. government securities 40,510 — 40,510 Corporate debt securities — 177,127 177,127 Commercial paper — 84,753 84,753 U.S. government agency securities — 12,490 12,490 Certificates of deposit — 8,701 8,701 $ 81,389 $ 283,071 $ 364,460 50 Table of Contents As of December 31, 2024 Level 1 Level 2 Total Money market funds $ 4,890 $ — $ 4,890 U.S. government securities 74,132 — 74,132 Corporate debt securities — 123,701 123,701 Commercial paper — 32,773 32,773 U.S. government agency securities — 24,411 24,411 Certificates of deposit — 16,520 16,520 $ 79,022 $ 197,405 $ 276,427 4. Balance Sheet Details Accounts receivable, net consisted of the following (in thousands): December 31, 2025 2024 Accounts receivable $ 99,732 $ 79,632 Allowance for doubtful accounts ( 365 ) ( 311 ) $ 99,367 $ 79,321 The table below summarizes the changes in allowance for doubtful accounts and product return liability for the periods indicated (in thousands): Balance at Beginning of Year Additions Charged to Expenses or Revenue Net of Recoveries Write Offs and Returns Balance at End of Year Year Ended December 31, 2025: Allowance for doubtful accounts $ 311 $ 179 $ ( 125 ) $ 365 Product return liability 2,428 220 ( 1,702 ) 946 Year Ended December 31, 2024: Allowance for doubtful accounts $ 304 $ 264 $ ( 257 ) $ 311 Product return liability 2,897 3,212 ( 3,681 ) 2,428 Year Ended December 31, 2023: Allowance for doubtful accounts $ 397 $ 43 $ ( 136 ) $ 304 Product return liability 2,961 4,761 ( 4,825 ) 2,897 Inventory consisted of the following (in thousands): December 31, 2025 2024 Components $ 2,327 $ 21,735 Finished goods 131,410 80,992 $ 133,737 $ 102,727 Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2025 2024 Supplier deposits $ 13,887 $ 62,620 Prepaid expenses and other current assets 56,458 42,976 $ 70,345 $ 105,596 51 Table of Contents Property and equipment, net consisted of the following (in thousands): December 31, 2025 2024 Test equipment $ 66,750 $ 57,595 Computer equipment 14,469 14,561 Software 11,499 11,146 Leasehold improvements 4,403 2,173 Furniture and fixtures 1,682 1,268 98,803 86,743 Accumulated depreciation and amortization ( 60,991 ) ( 55,590 ) $ 37,812 $ 31,153 Depreciation and amortization expenses were $ 17.7 million, $ 19.6 million and $ 16.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. Accrued liabilities consisted of the following (in thousands): December 31, 2025 2024 Compensation and related benefits $ 44,097 $ 36,004 Component inventory held by suppliers 9,665 8,855 Customer advances or rebates 5,062 4,882 Professional and consulting fees 4,981 5,385 Fixed assets 4,857 716 Taxes payable 4,744 5,048 Operating leases 2,837 4,303 Insurance 2,285 2,019 Current portion of warranty and retrofit 1,961 5,288 Freight 1,571 1,640 Operations 1,180 1,735 Product returns 946 2,428 Other 7,153 5,864 $ 91,339 $ 84,167 Changes in our accrued warranty and retrofit liability were as follows (in thousands): Years Ended December 31, 2025 2024 2023 Balance at beginning of year $ 7,287 $ 8,029 $ 8,386 Provision for warranty and retrofit charged to cost of revenue ( 38 ) 2,268 3,282 Utilization of reserve ( 3,417 ) ( 3,010 ) ( 3,639 ) Balance at end of year $ 3,832 $ 7,287 $ 8,029 52 Table of Contents 5. Commitments and Contingencies Lease Commitments We lease office space under non-cancelable operating leases. Certain of our operating leases contain renewal options and rent acceleration clauses. Future minimum payments under the non-cancelable operating leases for leases that have commenced consisted of the following as of December 31, 2025 (in thousands): Year Ending December 31, Future Minimum Lease Payments 2026 $ 3,610 2027 3,365 2028 2,835 2029 2,623 2030 2,333 Thereafter 3,616 Total future minimum lease payments 18,382 Less imputed interest ( 2,789 ) $ 15,593 As of December 31, 2025, the operating lease liability consisted of the following (in thousands): Accrued liabilities - current portion of operating leases $ 2,837 Operating leases 12,756 $ 15,593 In December 2024, we entered into a new headquarters office lease agreement for 23,000 square feet in San Jose, California. The lease commenced in August 2025 for a term of 90 months. The future minimum lease payments of $ 8.9 million are included in the table above. We recorded a right-of-use operating lease asset and operating lease liability of $ 7.0 million in the third quarter of 2025. Our previous lease in San Jose, California expired in October 2025. The above tables also include future minimum lease payments for our office facilities in Petaluma, California; Plymouth, Minnesota; Richardson, Texas; Bangalore, India; and Nanjing, China, which expire at various dates through 2031. The weighted average discount rate for our operating leases as of December 31, 2025 was 5.4 %. The weighted average remaining lease term as of December 31, 2025 was 5.7 years. For the years ended December 31, 2025, 2024 and 2023, total rent expense was $ 4.5 million, $ 5.1 million and $ 4.8 million, respectively. Cash paid within operating cash flows for operating leases was $ 3.9 million for the year ended December 31, 2025 and $ 4.5 million for each of the years ended December 31, 2024 and 2023. Purchase Commitments Our CMs and ODMs place orders for component inventory based upon our build forecasts and pursuant to stated component lead times to ensure adequate component supply. The components are used by the CMs and ODMs to build the products included in the build forecasts. We generally do not take ownership of the components held by CMs and ODMs. We place purchase orders with our CMs and ODMs in order to fulfill our monthly finished product inventory requirements. We incur a liability when the CMs and ODMs convert the component inventory to a finished product and takes ownership of the finished goods inventory. As of December 31, 2025 and 2024, we had approximately $ 317.8 million and $ 248.7 million, respectively, of outstanding purchase commitments to be delivered by our third-party manufacturers and other vendors such as enterprise software vendors. Litigation From time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not currently a party to any legal proceeding that, if determined adversely to us, in management's opinion, is currently expected to individually or in the aggregate have a material adverse effect on our business, operating results or financial condition taken as a whole. Indemnifications From time to time, we enter into contracts that require it to indemnify various parties against claims from third parties. These contracts primarily relate to (i) certain real estate leases, under which we may be required to indemnify property owners for 53 Table of Contents environmental and other liabilities, and other claims arising from our use of the applicable premises, (ii) agreements with our officers, directors and certain employees, under which we may be required to indemnify such persons for liabilities arising out of their relationship with us, (iii) contracts under which we may be required to indemnify customers against third-party claims that our product infringes a patent, copyright or other intellectual property right and (iv) agreements under which the we may be required to indemnify the counterparty for certain claims that may be brought against them arising from our acts or omissions with respect to the transactions contemplated by such agreements. Because any potential obligation associated with these types of contractual provisions are not quantified or stated, the overall maximum amount of the obligation cannot be reasonably estimated. Historically, we have not been required to make payments under these obligations, and no liabilities have been recorded for these obligations in the accompanying Consolidated Balance Sheets. 6. Stockholders’ Equity Preferred Stock The Board of Directors has the authority, without a further vote of the stockholders, to designate and issue up to 5.0 million shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. The issuance of our preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of Calix or other corporate action. Since our initial public offering, the Board of Directors has not designated any rights, preference or powers of any preferred stock, and no shares of preferred stock have been issued. Common Stock Holders of our common stock are entitled to receive dividends, if any, as may be declared from time to time by the Board of Directors out of legally available funds. No dividends have been declared or paid as of December 31, 2025. Stock Repurchase Program We maintain a common stock repurchase program. Under the repurchase program, repurchases can be made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or otherwise, all in accordance with the rules of the SEC and other applicable legal requirements. The specific timing, price and size of the purchases depends on prevailing stock prices, general economic and market conditions, and other considerations consistent with our capital allocation strategy. The repurchase program does not obligate us to acquire a particular amount of common stock, and the repurchase program may be suspended or discontinued at any time at our discretion. During the year ended December 31, 2025, we purchased 2.5 million shares of common stock for $ 93.6 million at an average price per share of $ 37.11 . As of December 31, 2025, the remaining authorized balance under this program was $ 109.3 million. In January 2026, our Board of Directors authorized a $ 125.0 million increase to this program. In 2026 to date, we repurchased $ 148.7 million of our common stock. Equity Incentive Plans 2019 Equity Incentive Award Plan Employees and consultants of Calix, our subsidiaries and affiliates and our Board of Directors members are eligible to receive awards under the 2019 Equity Incentive Award Plan (the “2019 Plan”). The 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units or other stock or cash-based awards and dividend equivalents to eligible individuals. Stock options granted under the 2019 Plan are granted at a price not less than 100 % of the fair market value of the common stock on the date of grant. Stock options issued under the 2019 Plan generally vest 25 % on the first anniversary of the vesting commencement date and on a quarterly basis thereafter for a period of an additional three years . The options have a maximum term of ten years . At our 2025 annual meeting of stockholders, the stockholders approved an increase in the number of shares of common stock issuable under the 2019 Plan by 4.0 million shares. As of December 31, 2025, there were 3.7 million shares available for issuance under the 2019 Plan. In February 2024, PSO awards exercisable for up to an aggregate of 2.4 million shares of common stock were granted to certain of our 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. The actual number of shares earned was contingent upon achievement of annual financial targets for bookings and non-GAAP net operating income for 2024 (collectively, the “2024 Performance Targets”) during the one-year performance period. In January 2025, the Talent and Compensation Committee (“Compensation Committee”) certified the achievement related to the 2024 Performance Targets 54 Table of Contents and determined that 58.9 % of shares underlying the PSOs were earned, subject to the on-going service condition, and 41.1 % of the shares underlying the PSOs were immediately forfeited. Pursuant to the grant, 25 % of the earned PSOs were vested and became exercisable on the first anniversary of the grant date, and the remaining 75 % of the shares of common stock will vest and become exercisable in substantially equal quarterly installments over the subsequent three years , subject to the executive’s continued service with Calix through the respective vesting dates. Stock-based compensation expense of $ 6.8 million and $ 13.1 million was recognized for the years ended December 31, 2025 and 2024, respectively, related to these awards. 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 our 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. The stock option awards will vest, subject to certification by the Compensation Committee 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 Calix 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 %. In May 2025, the Compensation Committee modified a departed executive’s stock options to accelerate vesting and extend the exercise period for outstanding grants. As a result, a charge of $ 4.9 million was recognized for the year ended December 31, 2025. In February 2026, the Compensation Committee certified the achievement related to the 2025 Performance Targets and determined that 100 % of shares underlying the stock option awards were earned, subject to the on-going service condition. Stock-based compensation expense of $ 21.5 million was recognized for the year ended December 31, 2025 related to these awards. The following table summarizes the stock option activity under our equity incentive plans (in thousands, except per share data): Weighted- Average Weighted- Remaining Average Contractual Aggregate Number of Exercise Price Life Intrinsic Shares Per Share (in years) Value (1) Outstanding as of December 31, 2024 12,183 $ 33.70 Granted 4,210 42.10 Exercised ( 2,071 ) 17.10 Canceled ( 1,112 ) 35.00 Outstanding as of December 31, 2025 13,210 $ 38.87 6.7 $ 206,534 Vested and expected to vest as of December 31, 2025 12,826 $ 38.78 6.6 $ 202,061 Options vested and exercisable as of December 31, 2025 7,152 $ 36.34 5.2 $ 134,242 (1) Amounts represent the difference between the exercise price and the fair market value of common stock at December 31, 2025 of $ 52.93 per share for all “in-the-money” options outstanding. During the years ended December 31, 2025, 2024 and 2023, total intrinsic value of stock options exercised was $ 86.5 million, $ 9.0 million and $ 16.7 million, respectively. Cash received from employee stock option exercises in 2025, 2024 and 2023 was $ 35.4 million, $ 2.8 million and $ 5.2 million, respectively. During the year ended December 31, 2025, 38,000 RSAs, with a one-year vesting period, were granted to our Board of Directors with a grant date fair value of $ 42.65 per share. Employee Stock Purchase Plans We maintain two plans under which employees can purchase our common stock - the ESPP and the non-executive SPMP. In March 2025, our Board of Directors approved amending and restating the Third Amended and Restated 2017 Nonqualified 55 Table of Contents Employee Stock Purchase Plan as the SPMP, which better describes the nature of the plan whereby when a non-executive employee buys a share, we match it. Our Board of Directors approval included reserving 2.9 million shares of our common stock under each of the purchase component and the matching component of the SPMP, including 1.25 million shares for the matching component subject to stockholder approval, with a corresponding decrease in shares authorized in the ESPP of 2.5 million shares. At our 2025 annual meeting of stockholders, the stockholders approved an increase to the authorized shares to the SPMP of 1.25 million shares of common stock under the matching component, resulting in a corresponding decrease in the shares authorized for issuance under the ESPP of 2.5 million shares. Shares were issued from the SPMP starting with the August 8, 2025 purchase period. The ESPP allows eligible employees to purchase shares of our common stock through payroll deductions of up to 15 % of their eligible compensation subject to certain Internal Revenue Code limitations. In addition, participants may purchase up to 2,000 shares of common stock in each offering period. The offering periods under the ESPP are two six-month offering periods from August 15 th through February 14 th and February 15 th through August 14 th of each year. 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. The total shares authorized for issuance under the ESPP is 9.9 million shares. As of December 31, 2025, there were 1.5 million shares available for issuance under the ESPP. During the year ended December 31, 2025, 0.3 million shares were purchased under the ESPP. As of December 31, 2025, unrecognized stock-based compensation expense of $ 0.4 million related to the ESPP is expected to be recognized over a remaining service period of 0.1 years. The SPMP allows eligible employees to purchase shares of our 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 our common stock on the last day of such offering period and (b) receive an equal number of shares of our 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 SPMP 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 SPMP is 5.8 million shares. As of December 31, 2025, there were 2.8 million shares available for issuance for each of the SPMP purchase and matching components. During the year ended December 31, 2025, 0.9 million shares were purchased and issued. As of December 31, 2025, unrecognized stock-based compensation expense of $ 12.2 million related to the SPMP 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): Years Ended December 31, 2025 2024 2023 Cost of revenue $ 3,068 $ 2,933 $ 2,913 Sales and marketing 30,732 20,810 16,893 Research and development 23,336 19,083 17,000 General and administrative 30,851 27,935 25,965 $ 87,987 $ 70,761 $ 62,771 Income tax benefits recognized $ 9,868 $ 6,964 $ 10,993 The following table summarizes the weighted-average grant date fair values of our stock-based awards granted in the periods indicated: Years Ended December 31, 2025 2024 2023 Stock options $ 22.86 $ 17.21 $ 23.02 ESPP $ 13.09 $ 10.53 $ 17.96 SPMP $ 48.09 $ 33.66 $ 42.51 We value employee stock purchase rights under the SPMP at the closing market price of our common stock on the date of grant. 56 Table of Contents We estimate the fair value of stock options and employee stock purchase right under the ESPP at the grant date using the Black-Scholes option-pricing model. This model requires the use of the following assumptions: (i) Expected volatility of our common stock – We compute our expected volatility assumption based on a blended volatility ( 50 % historical volatility and 50 % implied volatility from traded options on our common stock). The selection of a blended volatility assumption was based upon our assessment that a blended volatility is more representative of our future stock price trend as it weighs the historical volatility with the future implied volatility. (ii) Expected life of the option award – Represents the weighted-average period that the stock options are expected to remain outstanding. Our computation of expected life utilizes the simplified method in accordance with Staff Accounting Bulletin No. 110 due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. The mid-point between the vesting date and the expiration date is used as the expected term under this method. (iii) Expected dividend yield – The assumption is zero based on our history of not paying dividends and no future expectations of dividend payouts. (iv) Risk-free interest rate – Based on the U.S. Treasury yield curve in effect at the time of grant with maturities approximating the grant’s expected life. The following table summarizes the weighted-average assumptions used in estimating the grant-date fair value of stock options and of each employee’s purchase right under the ESPP in the periods indicated: Years Ended December 31, Stock Options 2025 2024 2023 Expected volatility 49 % 51 % 52 % Expected life (years) 6.1 6.0 6.1 Risk-free interest rate 4.27 % 4.27 % 4.02 % Years Ended December 31, ESPP 2025 2024 2023 Expected volatility 41 % 48 % 47 % Expected life (years) 0.5 0.5 0.5 Risk-free interest rate 4.22 % 5.15 % 5.31 % In addition, we apply an estimated forfeiture rate to awards granted and record stock-based compensation expense only for those awards that are expected to vest. Forfeiture rates are estimated at the time of grant based on our historical experience. Further, to the extent our actual forfeiture rate is different from our estimate, stock-based compensation is adjusted accordingly. As of December 31, 2025, unrecognized stock-based compensation expense by award type, net of estimated forfeitures, and their expected weighted-average recognition periods are summarized in the following table (in thousands). Stock Option RSAs ESPPs Unrecognized stock-based compensation expense $ 86,413 $ 561 $ 12,582 Weighted-average amortization period (in years) 2.1 0.4 0.8 We expect to recognize stock-based compensation expense of $ 55.5 million in 2026, $ 24.2 million in 2027, $ 15.8 million in 2028 and $ 4.1 million in 2029. Shares Reserved for Future Issuance As of December 31, 2025, we had common shares reserved for future issuance as follows (in thousands): Stock options outstanding 13,210 Shares available for future grant under 2019 Plan 3,685 Shares available for future issuance under SPMP 5,574 Shares available for future issuance under ESPP 1,459 23,928 7. Employee Benefit Plan We sponsor a 401(k) tax-deferred savings plan for all employees who meet certain eligibility requirements. Participants may contribute, on a pre-tax basis, a percentage of their annual compensation, but not to exceed a maximum contribution amount 57 Table of Contents pursuant to Section 401(k) of the Internal Revenue Code. At the discretion of the Board of Directors, we may make additional matching contributions on behalf of the participants. We made matching contributions totaling $ 5.7 million, $ 5.5 million and $ 5.2 million in 2025, 2024 and 2023, respectively. 8. Accumulated Other Comprehensive Loss The table below summarizes the changes in accumulated other comprehensive loss by component: Unrealized Gains and Losses on Available-for-Sale Marketable Securities Foreign Currency Translation Adjustments Total Balance as of December 31, 2023 $ 1 $ ( 660 ) $ ( 659 ) Other comprehensive income (loss) 187 ( 140 ) 47 Balance as of December 31, 2024 188 ( 800 ) ( 612 ) Other comprehensive income (loss) 343 ( 139 ) 204 Balance as of December 31, 2025 $ 531 $ ( 939 ) $ ( 408 ) Assets and liabilities of our wholly owned foreign subsidiaries are translated from their respective functional currencies at exchange rates in effect at the balance sheet date, and revenue and expenses are translated at the monthly average exchanges rates. These translations result in differences called foreign currency translation adjustments. Realized foreign currency transaction gains or losses were not significant during the years ended December 31, 2025, 2024 or 2023 and were recorded in “Other expense, net” in our Consolidated Statements of Comprehensive Income (Loss). Realized gains and losses on sales of available-for-sale marketable securities, if any, are reclassified from accumulated other comprehensive loss to “Other expense, net” in our Consolidated Statements of Comprehensive Income (Loss). 9. Income Taxes The domestic and foreign components of income before incomes taxes were as follows (in thousands): Years Ended December 31, 2025 2024 2023 Domestic $ 25,846 $ ( 36,990 ) $ 30,983 Foreign 8,322 5,344 3,774 $ 34,168 $ ( 31,646 ) $ 34,757 Income taxes consisted of the following (in thousands): Years Ended December 31, 2025 2024 2023 Current: Federal $ ( 464 ) $ 3,181 $ ( 2,407 ) State 1,773 2,110 6,493 Foreign 2,064 2,779 2,006 Current income tax 3,373 8,070 6,092 Deferred: Federal 13,573 ( 8,120 ) 2,050 State ( 166 ) ( 926 ) ( 2,525 ) Foreign ( 496 ) ( 923 ) ( 185 ) Deferred income tax 12,911 ( 9,969 ) ( 660 ) $ 16,284 $ ( 1,899 ) $ 5,432 58 Table of Contents The effective income tax rate for the year ended December 31, 2025 differs from the statutory federal income tax rate as follows (dollars in thousands): December 31, 2025 Provision for income taxes at U.S. federal statutory rate $ 7,175 21.0 % U.S. federal tax: Non-taxable or non-deductible items: Share-based compensation 8,242 24.1 Executive compensation 666 1.9 Entertainment 517 1.5 Other 70 0.2 Effects of cross-border tax laws 130 0.4 Tax credits: Research and development tax credit ( 3,182 ) ( 9.3 ) Foreign tax credit 384 1.1 Changes in unrecognized tax benefits 238 0.7 Other Adjustments 111 0.3 State and local income tax, net of federal benefit (1) 1,091 3.2 Foreign tax effects: China: Non-deductible share-based compensation 480 1.4 Other ( 190 ) ( 0.5 ) India: Withholding tax on repatriation 457 1.3 Other 44 0.1 Other foreign jurisdictions 51 0.2 $ 16,284 47.6 % (1) During the year ended December 31, 2025, state taxes in Florida, Pennsylvania, South Carolina and Texas comprised greater than 50% of the tax effect in this category. As previously disclosed, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows: Years Ended December 31, 2024 2023 Federal statutory rate 21.0 % 21.0 % Impact of state taxes 0.9 2.6 Foreign operations ( 4.2 ) 0.8 R&D tax credits 14.0 ( 13.5 ) U.S. tax impact of foreign operations ( 0.4 ) ( 2.4 ) Stock-based compensation ( 24.3 ) 8.8 Other permanent items ( 1.7 ) 2.5 Provision to return adjustments 6.4 ( 9.7 ) Valuation allowance ( 2.1 ) — Attribute expiration ( 0.1 ) 0.8 Uncertain tax positions ( 3.5 ) 4.7 6.0 % 15.6 % 59 Table of Contents The significant components of our deferred tax assets were as follows (in thousands): December 31, 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 22,836 $ 1,405 Tax credit carryforwards 59,049 53,788 Inventory 13,090 14,737 Accruals and reserves 4,618 5,017 Deferred revenue 7,093 9,476 Stock-based compensation 14,122 13,787 Lease liability 3,383 1,445 Capitalized R&D 78,801 110,581 Other 1,254 701 Gross deferred tax assets 204,246 210,937 Valuation allowance ( 32,325 ) ( 30,571 ) Total deferred tax assets 171,921 180,366 Deferred tax liabilities: Fixed assets ( 3,127 ) ( 1,760 ) Right of use assets ( 3,159 ) ( 1,006 ) Undistributed earnings of foreign subsidiaries ( 1,056 ) — Total deferred tax liabilities ( 7,342 ) ( 2,766 ) $ 164,579 $ 177,600 All deferred taxes, along with any related valuation allowance, are classified in the Consolidated Balance Sheet as long-term. A valuation allowance is required when, based upon an assessment of various factors, including recent operating loss history, anticipated future earnings, and prudent and reasonable tax planning strategies, it is more likely than not that some portion of the deferred tax assets will not be realized. At each reporting period, we assess the estimated future realizability of the gross carrying value of our deferred tax assets. Our periodic assessments take into consideration both positive evidence (future profitability projections for example and recent financial performance) and negative evidence (historical financial performance for example) as it relates to evaluating the future recoverability of our deferred tax assets. The valuation allowance increased by $ 1.8 million from 2024 to 2025. We continue to maintain a valuation allowance of $ 32.3 million on certain California state deferred tax assets that we believe are not more likely than not to be realized in future periods. As of December 31, 2025, we had a U.S. federal net operating loss of approximately $ 96.8 million that does not expire and $ 41.1 million of state net operating losses which will expire at various dates through 2040 if not utilized. Additionally, we have U.S. federal, California and other state research and development credits of approximately $ 45.5 million, $ 55.3 million and $ 2.6 million as of December 31, 2025, respectively. The U.S. federal research and development credits will expire at various dates through 2045 if not utilized. The California research and development credits have no expiration date. The credits related to other various U.S. states have begun to expire and will continue to expire at various dates through 2040. 60 Table of Contents Income Taxes Paid Income taxes paid (net of refunds) were as follows (in thousands): Year Ended December 31, 2025 Federal $ 2,294 States: Pennsylvania 450 South Carolina 359 Other 1,447 Total state 2,256 Foreign: China 780 India 1,371 Other 183 Total foreign 2,334 $ 6,884 Cash taxes paid prior to the adoption of ASU 2023-09 were $ 5.9 million in 2024 and $ 11.9 million in 2023. Uncertain Tax Positions ASC 740, “Income Taxes,” prescribes a recognition threshold and measurement attribute to the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also provides guidance on derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions. The standard requires us to recognize the financial statement effects of an uncertain tax position when it is more likely than not that such position will be sustained upon audit. We recognize accrued interest and penalties related to unrecognized tax benefits as interest expense and income tax expense, respectively, in our Consolidated Statements of Comprehensive Income (Loss). Our unrecognized tax benefits were as follows (in thousands): Years Ended December 31, 2025 2024 2023 Balance at beginning of year $ 34,638 $ 32,449 $ 29,215 Reduction for tax positions related to prior year ( 4 ) ( 121 ) ( 19 ) Additions for tax positions related to prior year 275 — 580 Additions for tax positions related to current year 2,389 2,310 2,673 Balance at end of year $ 37,298 $ 34,638 $ 32,449 As of December 31, 2025 and 2024, we had unrecognized tax benefits of $ 37.3 million and $ 34.6 million, respectively, $ 20.6 million of which would affect our effective tax rate if recognized. Accrued interest or penalties for uncertain tax positions as of December 31, 2025 was not significant. We file tax returns in the United States and various state jurisdictions, China, India, Ireland and the United Kingdom. The tax years 2000 through 2025 remain open and subject to examination by the appropriate governmental agencies due to tax attribute carryforwards. We are currently under examination in India, and no adjustments have been proposed to date. 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 we operate have enacted local Pillar Two legislation, with an effective date from January 1, 2024. We currently do not expect Pillar Two to have a material impact on our financial statements. In July 2025, President Trump signed the One Big Beautiful Bill Act ("OBBBA"), which includes a broad range of tax reform provisions affecting businesses. The OBBBA includes numerous changes to existing tax law including extending or making permanent certain business and international tax measures initially established under the 2017 Tax Cuts and Jobs Act, which were set to expire. Additionally, the OBBBA permanently eliminates the requirement to capitalize and amortize U.S.-based research and experimental expenditures over five years, making these expenditures fully deductible in the period incurred. The Company has accounted for the effects of the OBBBA in the financial statements for the period ended December 31, 2025, of which the primary impact is a reduction of current tax liabilities and a corresponding reduction in deferred tax assets. The 61 Table of Contents Company will continue to evaluate the impacts of OBBBA including the potential impacts on future periods and tax planning strategies. 10. Net Income (Loss) Per Common Share The computation of basic and diluted net income (loss) per common share for the periods indicated was as follows (in thousands, except per share data): Years Ended December 31, 2025 2024 2023 Numerator: Net income (loss) $ 17,884 $ ( 29,747 ) $ 29,325 Denominator: Weighted-average common shares — basic 66,041 65,879 65,980 Effect of dilutive potential common shares 3,264 — 3,340 Weighted-average common shares — diluted 69,305 65,879 69,320 Basic net income (loss) per common share $ 0.27 $ ( 0.45 ) $ 0.44 Diluted net income (loss) per common share $ 0.26 $ ( 0.45 ) $ 0.42 Potentially dilutive shares excluded, weighted-average 7,059 12,057 4,688 Unvested restricted stock awards are included in the calculation of basic weighted-average shares for all periods presented with net income because such shares are participating securities; however, the impact was immaterial. Potentially dilutive shares have been excluded from the computation of diluted net income per common share when their effect is antidilutive. These antidilutive shares were primarily from stock options. 11. Revenue from Contracts with Customers Contract Asset Contract assets include amounts recognized as revenue prior to our contractual right to bill the customer and are included in “Prepaid expenses and other current assets” in our Consolidated Balance Sheets. Amounts are billed in accordance with the agreed-upon contractual terms. The balance as of December 31, 2025 was $ 4.8 million of which we expect to bill 20 % of the balance during 2026. The balance as of December 31, 2024 was $ 2.8 million. Contract Liability Deferred revenue was $ 50.3 million and $ 47.6 million as of December 31, 2025 and 2024, respectively. The increase in deferred revenue of $ 2.7 million is primarily driven by cash payments received or due in advance of satisfying our performance obligations partially offset by revenue recognized of $ 20.1 million that was included in the deferred revenue balance at the beginning of the year. 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 $ 385.0 million as of December 31, 2025, and we expect to recognize as revenue 39 % of this amount over the next 12 months and a large majority of the remainder over the two years thereafter. Contract Costs We capitalize 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 December 31, 2025 and 2024, the unamortized balance of deferred commissions was $ 20.7 million and $ 17.9 million, respectively. For the years ended December 31, 2025, 2024 and 2023, the amount of amortization was $ 11.2 million, $ 8.9 million and $ 6.5 million, respectively. There was no impairment loss in relation to the costs capitalized for these respective periods. Concentration of Customer Risk No customer accounted for more than 10% of our revenue for the years ended December 31, 2025, 2024 and 2023. One customer represented 12 % of our accounts receivable as of December 31, 2025. Another customer represented 23 % of our accounts receivable as of December 31, 2024. 62 Table of Contents 12. Segment Information We develop, market and sell 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 unit level. Accordingly, Calix is considered to be in a single reporting segment and operating unit structure. Our chief operating decision maker (“CODM”) is our 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 Consolidated Statements of Comprehensive Income (Loss). In addition, the CODM uses a measure derived from operating expenses in the Consolidated Statements of Comprehensive Income (Loss) to monitor budget versus actual results to determine Calix’s and management’s performance. We do not have intra-entity sales or transfers. The measure of the single segment assets is the consolidated assets in the 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): Years Ended December 31, 2025 2024 2023 United States $ 934,829 $ 764,593 $ 944,201 Europe 33,419 34,322 54,265 Americas excluding U.S. 25,304 25,583 32,696 Rest of world 6,458 7,020 8,431 $ 1,000,010 $ 831,518 $ 1,039,593 Our property and equipment, net of accumulated depreciation, were located in the following geographical areas (in thousands): December 31, 2025 2024 United States $ 33,544 $ 27,601 China 2,616 2,818 India 1,652 734 $ 37,812 $ 31,153 Selected Financial Information: The following table presents selected financial information with respect to our single operating segment (in thousands): Years Ended December 31, 2025 2024 2023 Revenue $ 1,000,010 $ 831,518 $ 1,039,593 Adjusted cost of revenue (1) ( 427,718 ) ( 372,177 ) ( 515,633 ) Adjusted sales and marketing operating expenses (2) ( 217,904 ) ( 197,069 ) ( 197,671 ) Adjusted research and development operating expenses (3) ( 167,020 ) ( 160,787 ) ( 160,772 ) Adjusted general and administrative operating expenses (4) ( 77,483 ) ( 70,944 ) ( 71,180 ) Other segment items (5) ( 88,895 ) ( 73,575 ) ( 68,752 ) Interest income and other expenses, net 13,178 11,388 9,172 Income taxes ( 16,284 ) 1,899 ( 5,432 ) Net income (loss) $ 17,884 $ ( 29,747 ) $ 29,325 (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 and litigation settlement (2023 only). 63 Table of Contents (5) Other segment items consisted of stock-based compensation expense, intangible asset amortization and litigation settlement (2023 only). 64 Table of Contents ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There were no changes in nor any disagreements with accountants on accounting principles or practices, financial statement disclosure, auditing scope or procedures, or other reportable events requiring disclosure pursuant to Item 304(b) of Regulation S-K.