Whether it's a program like the Rural Digital Opportunity Fund (RDOF) or even larger infrastructure bills that are now under debate, suppliers can count on a roller coaster ride of sorts, according to Calix CEO Carl Russo.

"These programs always turn out to be larger than you think [and] they take longer than you think," he said Tuesday (July 27) on the company's Q2 2021 earnings call. And no matter the party affiliation, the message is the same – there's high interest in "hard core infrastructure – roads, bridges and Internet," he added.

For Calix, Russo believes the program will help fuel an "All Platform" business that factors in software, associated systems (including hardware for the access infrastructure and the customer premises) and services, rather than a business that is more focused on the sale of access network gear.

"It is not a pull forward of boxes. It is an uplift of our entire model as we help our customers build a new business model on top of the new infrastructure they're building," said Russo, who has also been elected chairman of the board, succeeding Don Listwin, who will now serve as the board's lead independent director.

As for RDOF, Calix is starting to see customers plan and begin to put in some orders. "But it's early days," Russo said. Just this week, the FCC authorized about $311 million in broadband funding via the RDOF program.

Market share shifts driving revenue growth

RDOF is not yet playing a big revenue role in growth at Calix, which pulled down Q1 2021 revenues of $168.7 million, up 42% from $119.02 million in the year-ago quarter. The result beat WestPark Capital Technology Research's estimate of $161 million.

"The growth we're seeing right now is about us taking market share," Cory Sindelar, Calix's CFO, said.

The bulk of Calix's revenues, 84%, came from small customers (with 250,000 subs or less) in Q1, compared to 8% among medium-sized customers (250,000 to 2.5 million subs), and 8% from large customers (2.5 million-plus customers). Calix said a it saw a decrease of 42% in absolute dollars from the large customer segment primarily due to lower shipments to Lumen Technologies.

Though revenues are up year-over-year, Calix, like others, are feeling the impact on margins due to higher component and freight costs.

But Calix's business remains diverse, as the company had no customer that accounted for more than 10% of revenues in the quarter. That overall base is also growing, as Calix added 43 new service providers during the period. Calix also saw a 28% increase in international revenue due to program ramps in multiple regions, particularly in Europe.

Looking ahead, Calix expects Q3 2021 revenues of $164 million to $170 million, and net income in the range of 26 cents to 30 cents per share. For the full year, Sindelar said Calix could see revenue grow at 20% or more, with total revenues reaching into the neighborhood of $660 million.

Early days for 'All Platform' model

Tied in, Calix believes the breadth of its All Platform model provides opportunities for growth among existing customers as well as with new ones that may have gone with another supplier for access gear years ago. But the execution of that model is still in its early days.

"We have an enormous opportunity in front of us. It is a secular disruption," Russo said. "But we are so early in this transformation process."

As for the performance of the model, a "large minority are buying some portion of it, but it is still a minority," Russo added. "We are just getting up to bat in the first inning."

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— Jeff Baumgartner, Senior Editor, Light Reading

A version of this story first appeared on Broadband World News.