Calix Files for an IPO

Why wait for 2012? The end of the world is starting right now: Calix Inc. (NYSE: CALX) has filed to go public.

We'll repeat that while you get your jaw off the floor: Calix has filed to go public.

Light Reading has been running stories about theoretical Calix IPOs since the dawn of time (or maybe 2004). There was the time the hot access equipment startup sought an executive "to prepare the company for Sarbannes/Oxley compliance." (See Calix Picking Public Beancounters.) There was the time when sources swore that IPO paperwork was all but complete. (See Calix IPO Talk Resurfaces.) There was the CFO hiring early last year, surely a sign that something was imminent. (It wasn't.) (See Calix IPO Still on Hold.)

And don't mention all those appearances on our Top Private Companies lists. (See Light Reading's Top Ten Private Companies.)

Over the years, CEO Carl Russo has repeatedly told Light Reading that he relishes the life of a privately held company. (See Full Transcript of LRTV’s Interview With Carl Russo, CEO, Calix .) But he usually added that an IPO, someday, wouldn't be out of the question.

Of course, the fun of an IPO filing is that you get to see how much money Calix has been making -- or not. Here are the numbers from its S-1 filing today.

Table 1: Calix's Financials
2006 2007 2008
Revenues ($M) 203.6 193.8 250.5
Net income (loss) ($M) (19.5) (24.9) (12.9)
Income (loss) per share ($4.17) ($4.64) ($2.85)
Source: Calix.

For the nine months ended Sept. 26, 2009, Calix is reporting revenues of $144.6 million and net losses of $28.3 million, or $4.69 per share.

Today's filing is a preliminary one, providing no specifics on the total number of shares to be offered. For purposes of calculating the registration fee, Calix wrote $100 million as a maximum price for the offering.

The underwriters are Goldman Sachs & Co. , Morgan Stanley , Jefferies & Co. Inc. , and UBS Investment Bank .

— Craig Matsumoto, West Coast Editor, Light Reading

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bollocks187 12/5/2012 | 3:52:07 PM
re: Calix Files for an IPO

Tellabs-AFC has a legacy base that will be replaced with Adtran, Occam, Pannaway, Calix etc. in the future this will primarily due to new fiber builds and potentially upgrades to VDSL technology. However the 20% you speak of is imo spread over a very large number of small line count IOC's and they are less motivated to upgrade with out govt. money. The major and progressive IOC accounts have already switched out AFC-Tellabs in favor of the new players. 

With Calix and others sitting at margins below 30% then these accounts will be even lower margins going forward for anyone to win the remaining 20%. 

The net for Calix and others is they have no where to go with 3GDLC technology in NA they lack an international market presence so they are a function of the IOC growth which is flat, they lack product innovation hence the massive brain drain to Cyan and others.

Not sure what Adtran is going to do.....they are cheap tho while they don't have the product line items shown by Calix, I am sure they can compete effectively.

paolo.franzoi 12/5/2012 | 3:52:07 PM
re: Calix Files for an IPO



2 Things:

1 - Grants.  As I said, the grants are new money for the Tier 3 Telcos NOT the loans.

2 - Non-Telcos.  Many of the companies applying are not wireline (note some of Dan Jones' stories about Wireless submissions).  Those companies won't buy from Calix, Adtran, or Occam.

Again, the Tier 3 Telcos are not upping their budgets by BILLIONS of dollars to buy more access gear.  They are trying to get more equipment bought for the SAME budget dollars.  RUS Loans do not do that.  They already use this vehicle.  Only the grants do that.



OSXman 12/5/2012 | 3:52:08 PM
re: Calix Files for an IPO

Tellabs may be "out of the market" but my data shows them to have a 20% share based on legacy run rate stuff.  That 20% is up for grabs in my opinion. 


As for Adtran, they don't even make a separate line item in the numbers that I have seen, but I am sure that will change shortly.

bollocks187 12/5/2012 | 3:52:09 PM
re: Calix Files for an IPO

While most industries  charge for service & support etc. Calix has made "no significant revenue" with service contracts according to the S1 filings.

This implies that they provide "service and support" for FREE to customers.

A novel approach I wonder if they also provide "free lifetime product warranty as well" and how that is accounted for in the financial fillings - normally you need to have some cash reserves set aside for this type of deal. 


bollocks187 12/5/2012 | 3:52:10 PM
re: Calix Files for an IPO

Tellabs has been out of the market for some time - thanks in part to the idiots in Chicago and Texas.

Adtran(2), Occam(3) and Pannaway(4), Zhone(5) as well as Calix(1) of course have filled that gap nicely.  Max IOC market is $200M so it is pretty much saturated 

What is interesting in the S1 is  they don't mention that several of the Calix products are "rebranded" Chinese products.



OSXman 12/5/2012 | 3:52:10 PM
re: Calix Files for an IPO

The most interesting market share aspect is the big hole being left by Tellabs. 

bollocks187 12/5/2012 | 3:52:10 PM
re: Calix Files for an IPO I like the S1 reference to the competition: Other established suppliers with which we compete include ADTRAN, Inc., LM Ericsson Telephone Company, Motorola, Inc. and Tellabs, Inc. There are also a number of smaller companies with which we compete in various geographic or vertical markets, including Enablence Technologies Inc., Occam Networks, Inc. and Zhone Technologies, Inc. While most of these smaller competitors lack broad national scale and product portfolios, they can offer strong competition on a deal-by-deal basis.
bollocks187 12/5/2012 | 3:52:10 PM
re: Calix Files for an IPO

Here is the web site link to the S1 filing for Calix:




OSXman 12/5/2012 | 3:52:10 PM
re: Calix Files for an IPO

Yes, in my mind for each of OCNW and Calix it is about execution more than competition.  They should both do well. 

Calix's financials, while not pretty, are not as ugly as they seem.  They aren't that far from breakeven and a big chunk of the loss is non-cash stock option expense.

Toad680 12/5/2012 | 3:52:11 PM
re: Calix Files for an IPO

Thanks for explaining that earlier OSX.  It surely has sparked some interesting debate.  But I have to believe that with $28bn in applications, which are combinations of grants and loans and equity, that the RUS is going to be able to leverage the loan loss reserve.

So let’s say that the stimulus is $13 billion.  Not all of that will get spent on access gear.  Let’s assume that 15% does, which is probably low, but there will be wireless, etc.   That means that about $2 billion of funding will go toward access gear.

There has been a pretty clear trend in the applications toward tier 3 SPs and the bulk of that money is heading here.   Depending on whose estimate you look at for tier 3 access gear, the annual figure is ~$400-500 million.

That means a potential stimulus of 4-5x the size of the market being applied over the next 2-3 years.  I have Calix at 38% and Occam at 21% share of that market currently.  Both are going to do very well if these numbers are accurate and I don’t imagine there is going to be any near-term margin pressure.

Calix may finally actually make it public…

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