CALIX, INC 10-Q

ITEM 1. Financial Statements CALIX, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except par value) June 27, 2026 December 31, 2025 (Unaudited) (See Note 1) ASSETS Current assets: Cash and cash equivalents $ 68,914 $ 143,086 Marketable securities 125,388 245,018 Accounts receivable, net 136,401 99,367 Inventory 180,481 133,737 Prepaid expenses and other current assets 83,856 70,345 Total current assets 595,040 691,553 Property and equipment, net 37,578 37,812 Right-of-use operating leases 12,934 14,665 Deferred tax assets 161,767 165,636 Goodwill 116,175 116,175 Other assets 30,910 32,681 $ 954,404 $ 1,058,522 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 92,737 $ 41,523 Accrued liabilities 81,046 91,339 Deferred revenue 36,473 30,386 Total current liabilities 210,256 163,248 Long-term portion of deferred revenue 19,554 19,890 Operating leases 11,218 12,756 Other long-term liabilities 3,355 3,409 Total liabilities 244,383 199,303 Commitments and contingencies (See Note 6) Stockholders’ equity: Preferred stock, $ 0.025 par value; 5,000 shares authorized; no shares issued and outstanding as of June 27, 2026 and December 31, 2025 — — Common stock, $ 0.025 par value; 100,000 shares authorized; 62,964 shares issued and outstanding as of June 27, 2026, and 67,120 shares issued and outstanding as of December 31, 2025 1,574 1,678 Additional paid-in capital 1,053,389 1,230,191 Accumulated other comprehensive loss ( 1,021 ) ( 408 ) Accumulated deficit ( 343,921 ) ( 372,242 ) Total stockholders’ equity 710,021 859,219 $ 954,404 $ 1,058,522 See accompanying notes to condensed consolidated financial statements. 4 Table of Contents CALIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Revenue: Appliance $ 242,783 $ 198,126 $ 475,626 $ 377,869 Software and service 50,546 43,756 97,687 84,255 Total revenue 293,329 241,882 573,313 462,124 Cost of revenue: Appliance 114,497 90,274 213,633 173,019 Software and service 18,708 15,313 40,260 30,102 Total cost of revenue 133,205 105,587 253,893 203,121 Gross profit 160,124 136,295 319,420 259,003 Operating expenses: Sales and marketing 62,338 63,653 125,824 121,712 Research and development 52,754 45,787 107,400 89,767 General and administrative 23,183 26,464 51,631 53,214 Total operating expenses 138,275 135,904 284,855 264,693 Operating income (loss) 21,849 391 34,565 ( 5,690 ) Interest income and other income (expense), net: Interest income 1,950 2,959 4,808 6,246 Other income (expense), net ( 204 ) 77 ( 546 ) ( 119 ) Total interest income and other income (expense), net 1,746 3,036 4,262 6,127 Income before income taxes 23,595 3,427 38,827 437 Income taxes 6,484 3,626 10,506 5,423 Net income (loss) $ 17,111 $ ( 199 ) $ 28,321 $ ( 4,986 ) Net income (loss) per common share: Basic $ 0.27 $ ( 0.00 ) $ 0.44 $ ( 0.08 ) Diluted $ 0.26 $ ( 0.00 ) $ 0.42 $ ( 0.08 ) Weighted-average number of shares used to compute net income (loss) per common share: Basic 63,516 64,525 64,579 65,321 Diluted 65,507 64,525 66,956 65,321 Net income (loss) $ 17,111 $ ( 199 ) $ 28,321 $ ( 4,986 ) Other comprehensive income (loss), net of tax: Unrealized gain (loss) on available-for-sale marketable securities, net 29 41 ( 572 ) 213 Foreign currency translation adjustments, net 92 189 ( 41 ) 284 Total other comprehensive income (loss), net of tax 121 230 ( 613 ) 497 Comprehensive income (loss) $ 17,232 $ 31 $ 27,708 $ ( 4,489 ) See accompanying notes to condensed consolidated financial statements. 5 Table of Contents CALIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, unaudited) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance as of March 28, 2026 64,401 $ 1,610 $ 1,098,541 $ ( 1,142 ) $ ( 361,032 ) $ 737,977 Stock-based compensation — — 16,632 — — 16,632 Issuance of common stock under equity incentive plans, net of forfeitures 196 5 8,068 — — 8,073 Repurchases of common stock including excise tax ( 1,633 ) ( 41 ) ( 69,852 ) — — ( 69,893 ) Net income — — — — 17,111 17,111 Other comprehensive income — — — 121 — 121 Balance as of June 27, 2026 62,964 $ 1,574 $ 1,053,389 $ ( 1,021 ) $ ( 343,921 ) $ 710,021 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance as of March 29, 2025 65,695 $ 1,643 $ 1,160,781 $ ( 345 ) $ ( 394,913 ) $ 767,166 Stock-based compensation — — 25,766 — — 25,766 Issuance of common stock under equity incentive plans, net of forfeitures 608 15 13,336 — — 13,351 Repurchases of common stock ( 1,009 ) ( 25 ) ( 33,617 ) — — ( 33,642 ) Net loss — — — — ( 199 ) ( 199 ) Other comprehensive income — — — 230 — 230 Balance as of June 28, 2025 65,294 $ 1,633 $ 1,166,266 $ ( 115 ) $ ( 395,112 ) $ 772,672 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance as of December 31, 2025 67,120 $ 1,678 $ 1,230,191 $ ( 408 ) $ ( 372,242 ) $ 859,219 Stock-based compensation — — 37,180 — — 37,180 Issuance of common stock under equity incentive plans, net of forfeitures 805 21 28,037 — — 28,058 Repurchases of common stock including excise tax ( 4,961 ) ( 125 ) ( 242,019 ) — — ( 242,144 ) Net income — — — — 28,321 28,321 Other comprehensive loss — — — ( 613 ) — ( 613 ) Balance as of June 27, 2026 62,964 $ 1,574 $ 1,053,389 $ ( 1,021 ) $ ( 343,921 ) $ 710,021 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive 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 Stock-based compensation — — 45,869 — — 45,869 Issuance of common stock under equity incentive plans, net of forfeitures 1,025 26 24,171 — — 24,197 Repurchases of common stock ( 2,165 ) ( 54 ) ( 73,791 ) — — ( 73,845 ) Net loss — — — — ( 4,986 ) ( 4,986 ) Other comprehensive income — — — 497 — 497 Balance as of June 28, 2025 65,294 $ 1,633 $ 1,166,266 $ ( 115 ) $ ( 395,112 ) $ 772,672 See accompanying notes to condensed consolidated financial statements. 6 Table of Contents CALIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited) Six Months Ended June 27, 2026 June 28, 2025 Operating activities: Net income (loss) $ 28,321 $ ( 4,986 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Stock-based compensation 37,295 45,357 Depreciation and amortization 8,788 8,613 Deferred income taxes 4,306 ( 1,285 ) Net accretion of available-for-sale securities ( 715 ) ( 2,137 ) Changes in operating assets and liabilities: Accounts receivable, net ( 37,034 ) 16,245 Inventory ( 46,744 ) ( 7,795 ) Prepaid expenses and other assets ( 10,124 ) 13,752 Accounts payable 50,936 2,284 Accrued liabilities ( 7,789 ) ( 10,387 ) Deferred revenue 5,751 ( 1,748 ) Other long-term liabilities ( 1,845 ) ( 1,320 ) Net cash provided by operating activities 31,146 56,593 Investing activities Purchases of property and equipment ( 12,698 ) ( 8,045 ) Purchases of marketable securities ( 10,141 ) ( 95,116 ) Sales of marketable securities 64,244 11,362 Maturities of marketable securities 65,485 117,679 Net cash provided by investing activities 106,890 25,880 Financing activities: Proceeds from common stock issuances related to employee benefit plans 28,072 24,197 Repurchases of common stock ( 240,227 ) ( 73,531 ) Net cash used in financing activities ( 212,155 ) ( 49,334 ) Effect of exchange rate changes on cash and cash equivalents ( 53 ) 237 Net decrease in cash and cash equivalents ( 74,172 ) 33,376 Cash and cash equivalents at beginning of period 143,086 43,162 Cash and cash equivalents at end of period $ 68,914 $ 76,538 See accompanying notes to condensed consolidated financial statements. 7 Table of Contents CALIX, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Company and Basis of Presentation 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 The accompanying unaudited condensed consolidated financial statements, including the accounts of Calix, Inc. and its wholly-owned subsidiaries, have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. generally accepted accounting principles (“GAAP”) can be condensed or omitted. In the opinion of management, the financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of our financial position and operating results. All intercompany balances and transactions have been eliminated in consolidation. The Condensed Consolidated Balance Sheet as of December 31, 2025 has been derived from the audited financial statements at that date. The results of our operations can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year or any future periods. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. Our fiscal year begins on January 1 st and ends on December 31 st . 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, we had one less day in the six months ended June 27, 2026 than for the six months ended June 28, 2025. 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. Actual results could differ from those estimates. 2. Significant Accounting Policies Our significant accounting policies are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025. Our significant accounting policies did not change during the six months ended June 27, 2026. Newly Adopted Accounting Standard We did not adopt any new accounting standards during the six months ended June 27, 2026 that were significant to us. Recent Accounting Pronouncements Not Yet Adopted There have been no additional accounting pronouncements or changes in accounting pronouncements during the six months ended June 27, 2026 as compared with the recent accounting pronouncements described in our Annual Report on Form 10-K for the year ended December 31, 2025, that are significant or expected to be significant to us. 8 Table of Contents 3. Cash, Cash Equivalents and Marketable Securities 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. Cash equivalents are stated at amounts that approximate fair value based on quoted market prices. Marketable securities are recorded at their fair values. 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 accumulated other comprehensive loss in 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 income (expense), net. Realized gains and losses were not significant for the three and six months ended June 27, 2026 and June 28, 2025. Cash, cash equivalents and marketable securities consisted of the following (in thousands): June 27, 2026 December 31, 2025 Cash and cash equivalents: Cash $ 55,954 $ 23,644 Money market funds 11,533 40,879 Commercial paper 1,427 75,100 U.S. government agency securities — 3,463 Total cash and cash equivalents 68,914 143,086 Marketable securities: Corporate debt securities 92,789 177,127 U.S. government securities 16,129 40,510 U.S. government agency securities 7,010 9,027 Certificates of deposit 6,196 8,701 Commercial paper 3,264 9,653 Total marketable securities 125,388 245,018 $ 194,302 $ 388,104 The carrying amounts of our money market funds approximate their fair values due to their nature, duration and short maturities. The amortized cost and fair value of marketable securities were as follows (in thousands): As of June 27, 2026 Amortized Cost Unrealized Gains (Losses), net Fair Value Corporate debt securities $ 92,824 $ ( 35 ) $ 92,789 U.S. government securities 16,122 7 16,129 U.S. government agency securities 7,013 ( 3 ) 7,010 Certificates of deposit 6,196 — 6,196 Commercial paper 4,694 ( 3 ) 4,691 $ 126,849 $ ( 34 ) $ 126,815 As of December 31, 2025 Amortized Cost 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 9 Table of Contents 4. 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 June 27, 2026 Level 1 Level 2 Total Money market funds $ 11,533 $ — $ 11,533 U.S. government securities 16,129 — 16,129 Corporate debt securities — 92,789 92,789 U.S. government agency securities — 7,010 7,010 Certificates of deposit — 6,196 6,196 Commercial paper — 4,691 4,691 $ 27,662 $ 110,686 $ 138,348 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 5. Balance Sheet Details Accounts receivable, net consisted of the following (in thousands): June 27, 2026 December 31, 2025 Accounts receivable $ 137,004 $ 99,732 Allowance for doubtful accounts ( 603 ) ( 365 ) $ 136,401 $ 99,367 Inventory consisted of the following (in thousands): June 27, 2026 December 31, 2025 Components $ 10,704 $ 2,327 Finished goods 169,777 131,410 $ 180,481 $ 133,737 10 Table of Contents Prepaid expenses and other current assets consisted of the following (in thousands): June 27, 2026 December 31, 2025 Supplier deposits $ 28,890 $ 13,887 Prepaid expenses and other current assets 54,966 56,458 $ 83,856 $ 70,345 Property and equipment, net consisted of the following (in thousands): June 27, 2026 December 31, 2025 Test equipment $ 67,677 $ 66,750 Computer equipment 15,701 14,469 Software 12,047 11,499 Leasehold improvements 4,906 4,403 Furniture and fixtures 1,921 1,682 Total 102,252 98,803 Accumulated depreciation and amortization ( 64,674 ) ( 60,991 ) $ 37,578 $ 37,812 Accrued liabilities consisted of the following (in thousands): June 27, 2026 December 31, 2025 Compensation and related benefits $ 38,740 $ 44,097 Taxes payable 7,235 4,744 Professional and consulting fees 6,662 4,981 Component inventory held by suppliers 5,912 9,665 Operations 3,429 1,180 Customer advances or rebates 3,049 5,062 Operating leases 2,762 2,837 Current portion of warranty and retrofit 1,995 1,961 Insurance 1,828 2,285 Freight 1,659 1,571 Travel 1,115 439 Fixed assets 297 4,857 Other 6,363 7,660 $ 81,046 $ 91,339 Changes in the accrued warranty liability were as follows (in thousands): Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Balance at beginning of period $ 3,724 $ 6,073 $ 3,832 $ 7,287 Accruals for product warranty 1,048 ( 908 ) 1,728 ( 1,203 ) Cost of warranty claims ( 1,213 ) ( 272 ) ( 2,001 ) ( 1,191 ) Balance at end of period $ 3,559 $ 4,893 $ 3,559 $ 4,893 11 Table of Contents 6. 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 consisted of the following as of June 27, 2026 (in thousands): Period Future Minimum Lease Payments Remainder of 2026 $ 1,827 2027 3,337 2028 2,793 2029 2,573 2030 2,282 Thereafter 3,578 Total future minimum lease payments 16,390 Less imputed interest ( 2,410 ) $ 13,980 As of June 27, 2026, the operating lease liability consisted of the following (in thousands): Accrued liabilities - current portion of operating leases $ 2,762 Operating leases 11,218 $ 13,980 We lease our headquarters office space in San Jose, California under a lease agreement that expires in January 2033. The future minimum lease payments under the lease are $ 8.4 million and are included in the table above. The weighted average discount rate for our operating leases as of June 27, 2026 was 5.4 %. The weighted average remaining lease term as of June 27, 2026 was 5.4 years. For both the three and six months ended June 27, 2026 and June 28, 2025, rent expense was $ 1.1 million and $ 2.2 million for each respective period. Cash paid within operating cash flows for operating leases was $ 1.7 million and $ 2.3 million for the six months ended June 27, 2026 and June 28, 2025, respectively. Purchase Commitments Our contract manufacturers (“CMs”) and original design manufacturers (“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 June 27, 2026 and December 31, 2025, we had approximately $ 338.3 million and $ 317.8 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. On May 27, 2026, a putative shareholder class action complaint captioned Noor v. Calix, Inc., et al., Case No. 5:26-cv-04993-PCP (the “Securities Class Action”), was filed in the U.S. District Court for the Northern District of California, naming us and certain of our current officers of the Company as defendants. The lawsuit generally alleges that the defendants made material misrepresentations and/or omissions of material fact relating to our memory component supply and its impact on non-GAAP gross margins, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. The putative class action is brought on behalf of persons and entities who purchased or otherwise acquired our securities between January 28, 2026, and April 21, 2026, inclusive, seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including attorneys’ fees. 12 Table of Contents It is possible that additional lawsuits will be filed or allegations will be made by stockholders with respect to these same or other matters also naming us and/or our officers and directors as defendants. We intend to vigorously defend against the claims brought by the plaintiffs in each of these matters. Such lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcome of the pending lawsuit and any other related lawsuits is necessarily uncertain. We could be forced to expend significant resources and may incur substantial legal fees and costs in defending against the pending lawsuits and any other related lawsuits, and we may not prevail. Monitoring, initiating and defending against legal actions is time-consuming for our management, is likely to be expensive, and may detract from the ability to fully focus internal resources on business activities. Additionally, we may not be successful in having any such lawsuits dismissed or settled within the limits of insurance coverage. Given the early stage of this lawsuit and the inherent uncertainty of litigation, we cannot predict how long it may take to resolve the pending lawsuit, or the potential outcome, or possible amount of any damages. As such, we currently are unable to reasonably estimate the possible losses or a range of possible losses that may result from these matters, if any. Expenses associated with the pending lawsuit and any potential related lawsuits could be material to the financial statements if we do not prevail in the defense of such lawsuits, or even if we do prevail. 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. 7. Stockholders’ Equity 2019 Equity Incentive Award Plan Our employees, consultants and members of our Board of Directors are eligible to receive awards under the Fourth Amended and Restated 2019 Equity Incentive Award Plan (the “2019 Plan”). 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 (“RSUs”), performance stock units (“PSUs”), other stock or cash-based awards and dividend equivalents to eligible individuals. As of June 27, 2026, there were 2.6 million shares available for issuance under the 2019 Plan. In February 2026, 0.7 million PSUs were granted to certain members of our leadership team with a grant date fair value of $ 52.02 per share. The actual number of PSUs earned is contingent upon achievement of an annual corporate financial target for non-GAAP net income per share for 2026 (collectively, the “2026 Performance Target”) during the one-year performance period. The PSUs will vest, subject to certification by the Compensation Committee of our Board of Directors upon the achievement of the 2026 Performance Target, 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 us through the respective vesting dates. If the non-GAAP net income per share target is achieved below 80 % of target, no shares would be awarded. If the target is achieved at the minimum threshold of 80 % of target, then the shares would be awarded, with an increasing percentage of shares awarded above the minimum thresholds up to 100 % of the granted shares. The maximum combined award is 100 %. The probability of meeting the minimum threshold was assessed to be probable as of June 27, 2026, and stock-based compensation expense of $ 1.1 million was recognized for the six months ended June 27, 2026. During the three months ended June 27, 2026, 0.1 million RSUs were granted with a grant date fair value of $ 40.26 per share. During the six months ended June 27, 2026, 0.2 million RSUs were granted with a grant date fair value of $ 49.17 per share. These RSUs generally vest 25 % on the first anniversary of the vesting commencement date and on a quarterly basis thereafter over an additional three years . As of June 27, 2026, unrecognized stock-based compensation expense of $ 12.5 million related to the PSUs and RSUs, net of estimated forfeitures, is expected to be recognized over a weighted-average period of 2.2 years. During the three months ended June 27, 2026, stock option awards exercisable for up to an aggregate of 12,000 shares of common stock were granted with a grant date weighted-average exercise price of $ 49.40 per share. During the six months ended June 27, 2026, stock option awards exercisable for up to an aggregate of 23,000 shares of common stock were granted with a grant date weighted-average exercise price of $ 51.49 per share. These stock option awards generally vest 25 % on the first anniversary of the vesting commencement date and on a yearly basis thereafter over an additional three years . During the three months ended June 27, 2026, 26,000 shares of common stock were issued pursuant to the exercise of stock options at a weighted-average exercise price of $ 18.55 per share. During the six months ended June 27, 2026, 0.3 million shares of common stock were issued pursuant to the exercise of stock options at a weighted-average exercise price of $ 30.52 per share. As of June 27, 2026, unrecognized stock-based compensation expense of $ 52.5 million related to stock options, net of estimated forfeitures, is expected to be recognized over a weighted-average period of 1.8 years. 13 Table of Contents Employee Stock Purchase Plans Historically, we have maintained two plans under which employees could purchase our common stock - the Amended and Restated Employee Stock Purchase Plan (the “ESPP”) and the non-executive Stock Purchase and Matching Plan (“SPMP”). Following the February 14, 2026 ESPP purchase, the ESPP was indefinitely suspended, and the maximum payroll contribution limit to the SPMP was increased from 25 % to 33 %. During the six months ended June 27, 2026, 0.1 million shares were purchased under the ESPP. At the Company’s 2026 annual meeting of stockholders, the stockholders approved an increase of 0.7 million shares of common stock reserved for issuance under the matching component of the SPMP, which, along with the corresponding increase of 0.7 million shares of common stock reserved for issuance under the purchase component of the SPMP, will go into effect for the three-month purchase period commencing August 8, 2026 and ending on November 7, 2026. The SPMP allows eligible employees to purchase shares of our common stock through payroll deductions of up to 33 % of their eligible compensation. Eligible employees have the right to (a) purchase under the purchase component 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 under the matching component 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 for the combination of the purchase and matching components. As of June 27, 2026, there were 2.5 million shares available for issuance under the both the SPMP purchase and matching components of the SPMP. During the six months ended June 27, 2026, 0.6 million shares were purchased and issued. As of June 27, 2026, unrecognized stock-based compensation expense of $ 17.8 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): Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Cost of revenue $ 634 $ 764 $ 1,529 $ 1,544 Sales and marketing 5,631 11,047 12,280 17,516 Research and development 5,253 5,890 11,142 10,971 General and administrative 5,172 7,912 12,344 15,326 $ 16,690 $ 25,613 $ 37,295 $ 45,357 Income tax benefit recognized $ 3,564 $ 3,664 $ 5,977 $ 5,157 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 2026, our Board of Directors authorized a $ 225.0 million increase to this program. During the three months ended June 27, 2026, we purchased 1.6 million shares of common stock for an aggregate purchase price of $ 69.4 million at an average price per share of $ 42.48 . During the six months ended June 27, 2026, we purchased 5.0 million shares of common stock for an aggregate purchase price of $ 240.2 million at an average price per share of $ 48.42 . As of June 27, 2026, the remaining authorized balance under this program was $ 94.1 million. 8. Revenue from Contracts with Customers Contract Asset Contract assets include amounts recognized as revenue prior to our contractual right to bill the customer. Amounts are billed in accordance with the agreed-upon contractual terms. Contract assets were $ 4.9 million as of June 27, 2026 as compared to 14 Table of Contents $ 4.8 million as of December 31, 2025, and are included in prepaid expenses and other current assets and long-term other assets on the Condensed Consolidated Balance Sheets. We expect to recognize 38 % of the June 27, 2026 balance during 2026. Contract Liability Deferred revenue was $ 56.0 million, $ 50.5 million and $ 50.3 million as of June 27, 2026, March 28, 2026 and December 31, 2025, respectively. The increase in the deferred revenue balance for the three and six months ended June 27, 2026 was driven by cash payments received or due in advance of satisfying our performance obligations offset by $ 13.3 million and $ 18.2 million of revenue recognized that was included in the deferred revenue balance at the beginning of each respective period. Remaining performance obligations (“RPOs”) represent contractual commitments that have not yet been fulfilled, which include deferred revenue and amounts that will be invoiced and recognized as revenue in future periods but exclude variable consideration where the monthly invoicing is based on usage or where actual usage exceeds the minimum commitment. RPOs were $ 386.4 million as of June 27, 2026, and we expect to recognize as revenue 42 % of this amount over the next 12 months and nearly all 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 June 27, 2026 and December 31, 2025, the unamortized balance of deferred commissions was $ 19.1 million and $ 20.7 million, respectively, and were included in prepaid expenses and other current assets, and other long-term assets on the Condensed Consolidated Balance Sheets. For the three and six months ended June 27, 2026 the amount of amortization was $ 3.2 million and $ 6.3 million, respectively, compared to $ 2.7 million and $ 5.3 million for the three and six months ended June 28, 2025, respectively. There was no impairment loss in relation to the costs capitalized for these periods. Concentration of Customer Risk One customer accounted for 12 % of our revenue for the three months ended June 27, 2026. No customer accounted for more than 10% of our revenue for the six months ended June 27, 2026 and three and six months ended June 28, 2025. One customer represented 12 % of our total receivables as of June 27, 2026 and another customer represented 12 % of our total receivables as of December 31, 2025. 9. Segment Information We develop, market and sell an appliance-based broadband platform, cloud and managed services. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below our unit level. Accordingly, we are 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 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 entity’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 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 Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 United States $ 277,716 $ 219,039 $ 543,062 $ 430,218 Americas ex U.S. 8,218 5,881 14,501 11,349 Europe 4,930 15,565 11,587 18,094 Rest of world 2,465 1,397 4,163 2,463 $ 293,329 $ 241,882 $ 573,313 $ 462,124 15 Table of Contents Our property and equipment, net of accumulated depreciation, was located in the following geographical areas (in thousands): June 27, 2026 December 31, 2025 United States $ 31,593 $ 33,544 India 3,006 1,652 China 2,979 2,616 $ 37,578 $ 37,812 Selected Financial Information: The following table presents selected financial information with respect to our single operating segment (in thousands): Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Revenue $ 293,329 $ 241,882 $ 573,313 $ 462,124 Adjusted cost of revenue (1) ( 132,571 ) ( 104,595 ) ( 252,364 ) ( 201,051 ) Adjusted sales and marketing operating expenses (2) ( 56,707 ) ( 52,606 ) ( 113,544 ) ( 104,196 ) Adjusted research and development operating expenses (3) ( 47,501 ) ( 39,897 ) ( 96,258 ) ( 78,796 ) Adjusted general and administrative operating expenses (4) ( 18,011 ) ( 18,552 ) ( 39,287 ) ( 37,888 ) Other segment items (5) ( 16,690 ) ( 25,841 ) ( 37,295 ) ( 45,883 ) Interest income and other expenses, net 1,746 3,036 4,262 6,127 Income taxes ( 6,484 ) ( 3,626 ) ( 10,506 ) ( 5,423 ) Net income (loss) $ 17,111 $ ( 199 ) $ 28,321 $ ( 4,986 ) (1) GAAP cost of revenue adjusted for stock-based compensation and intangible asset amortization (2025 only). (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 (2025 only). 10. Income Taxes The following table presents income taxes and the effective tax rates for the periods indicated (in thousands, except percentages): Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Income (loss) before income taxes $ 23,595 $ 3,427 $ 38,827 $ 437 Income taxes $ 6,484 $ 3,626 $ 10,506 $ 5,423 Effective tax rate 27.5 % 105.8 % 27.1 % 1,241.0 % Our income taxes for the three and six months ended June 27, 2026 were determined using an estimated annual effective tax rate adjusted for discrete items that occurred during that period as required under Accounting Standards Codification (“ASC”) 740-270, Accounting for Income Taxes in Interim Periods . We have historically recorded interim provision for income taxes by applying ASC 740-270. For the three and six months ended June 28, 2025, 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 was highly sensitive to fluctuations in pre-tax income and did not provide a reasonable estimate for income taxes in the interim period. As such, we computed the provision for income taxes for the three and six months ended June 28, 2025 using an actual year-to-date tax calculation. Our effective tax rate for the three and six months ended June 27, 2026 is different 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 offset by the favorable impact of U.S. federal research tax credits and excess tax benefits from stock-based compensation. Our effective tax rate for the three and six months ended June 28, 2025 was different from the statutory federal corporate tax rate of 21% 16 Table of Contents primarily due to state taxes, 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. We maintained a valuation allowance of $ 32.3 million for the three and six months ended June 27, 2026, compared to $ 30.6 million for the three and six months ended June 28, 2025, on certain federal tax credits along with state deferred tax assets that we believe are not more likely than not to be realized in future periods. We 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 we decide to adjust these estimates in the future periods, further adjustments to its valuation allowance may be recorded, which could materially impact our 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 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. We have accounted for the effects of the OBBBA in the financial statements for the period ended June 27, 2026. We will continue to evaluate the impacts of OBBBA including the potential impacts on future periods and tax planning strategies. 11. Net Income (Loss) Per Common Share 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 Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Numerator: Net income (loss) $ 17,111 $ ( 199 ) $ 28,321 $ ( 4,986 ) Denominator: Weighted-average common shares outstanding used to compute basic net income (loss) per share 63,516 64,525 64,579 65,321 Effect of dilutive common stock equivalents 1,991 — 2,377 — Weighted-average common shares outstanding used to compute diluted net income (loss) per share 65,507 64,525 66,956 65,321 Net income (loss) per common share: Basic net income (loss) per common share $ 0.27 $ ( 0.00 ) $ 0.44 $ ( 0.08 ) Diluted net income (loss) per common share $ 0.26 $ ( 0.00 ) $ 0.42 $ ( 0.08 ) Potentially dilutive shares excluded, weighted average 7,553 15,086 7,100 14,369 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 primarily from stock options. 17 Table of Contents