Greetings, everyone and welcome to the Calix First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the brief prepared remarks. [Operator Instructions] As a reminder, this conference call is being recorded. It is now my pleasure to introduce your host, Jim Fanucchi, Vice President of Investor Relations. Sir, please go ahead.

Thank you, Melissa and good morning, everyone. Thank you for joining our first quarter 2024 earnings call. Today on the call we have President and CEO, Michael Weening; and Chief Financial Officer, Cory Sindelar. As a reminder, yesterday after the market closed, Calix issued a news release which was furnished on our Form 8-K along with our stockholder letter, and was also posted in the Investor Relations Section of the Calix website. Today's conference call will be available for webcast replay in the Investor Relations Section of our website. Before I turn the call over to Michael for his opening remarks, I want to remind everyone on this call, we will refer to forward-looking statements, including all statements the company will make about its future financial and operating performance, growth strategy, and market outlook; and actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause actual results and trends to differ materially are set forth in the first quarter 2024 letter to stockholders, and in the annual and quarterly reports filed with the SEC. Calix assumes no obligation to update any forward-looking statements, which speak only as of their respective dates. Also in this conference call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of the GAAP to non-GAAP measures is included in the first quarter 2024 letter to stockholders. Unless otherwise stated, all financial information referenced in this call will be non-GAAP. With that, it is my pleasure to turn the call over to Michael. Michael, please go ahead. Michael Weening Thank you, Jim. Our results in the first quarter demonstrated the continued execution and strength of our strategy. Our platform, cloud and managed services are enabling our broadband customers to succeed against their competitors every day. Their success delivers…

Thank you, Michael. The first quarter represented another quarter of deliberate and disciplined execution. We delivered revenue of $226.3 million, which was within the guidance range we provided in January. Against the crosswinds prevalent in our industry, the continued growth in our platform, cloud and managed services drove record non-GAAP gross margins of 54.9%. In the first quarter, we saw platform adoption with 18 customers beginning their platform journey with us, and 27 customers deploying a managed service for the first time. In the first quarter of 2024, non-GAAP operating expenses were $108.4 million, down $1.6 million from the prior quarter. The decrease is attributed to our Connections Event, which occurs each year in the fourth quarter. As we talked about in our last call, our plan is to keep 2024 operating expense investments relatively consistent with 2023 as we continue to believe that this level of investment represents a great opportunity for us to grow our footprint ahead of the US Government broadband investment. Our debt free balance sheet remains strong. At the end of the first quarter, cash and investments were nearly $240 million, representing a sequential increase of $19 million. This was our fourth consecutive quarter of double-digit free cash flow. During the first quarter, our supply chain continued to normalize. We exited Q1 with purchase commitments falling another $29 million from year-end to $147 million. Inventory deposits declined by $2 million, and our inventory turns were 3.1%, down from 3.3% [ph] last quarter as our component inventory increased. Excluding component inventory, our inventory turns would have been greater than 4% [ph]. Furthermore, we expect these reductions at working capital requirements combined with continued profitability will result in consistent quarterly double-digit operating and free cash flow. During the first quarter, we repurchased $4 million of our common…

Thank you, Cory. As I have shared, I meet with broadband customers and their investors constantly. It is clear they are understanding the disruption that faces legacy network operators, which is critical to our Crossing the Chasm, from early adopters to winning an early majority. With more than 1000 customers deploying our platform, it is no surprise that we are engaging with ever larger prospects who are interested in how our BSP customers are achieving their incredible revenue, margin, cash flow and customer satisfaction results. The entire Calix team remains energized by the opportunity to expand our platform, cloud and managed services business. At the same time, with more than 16 million new fiber connections forecasted in the next 5 years, we have a once in a generation opportunity to land new network footprint and enable our BSP customers to win new subscribers, thereby filling those networks with an expanding portfolio of managed services. This will be supercharged by the BEAD funds that began in 2025. While only one state has completed all 10-steps in the BEAD process, 42 other states have completed 9 of the 10 steps to begin funding. In closing, I want to reiterate that we are confident in our long-term outlook. We have a talented and motivated team executing our strategy every day. We have unique technology that positions us to surf this wave and take advantage of new network builds. We have the financial strength and balance sheet that allows us to avoid any distractions. Therefore, we intend to keep a steady and discipline hand on our operating expense investments as we maximize this opportunity, and help our customers win. Jim, let's open the call for questions.

Thank you, Michael. Melissa, please open the call for questions at this time.

[Operator Instructions] Our first question comes from the line of Ryan Koontz with Needham & Company. Please proceed with your question.

Thanks for the question. Just unpacking your customer segments there a bit, it looks like your Tier 3’s are the smaller customers relatively stable here but the medium and large are really hurting you. How should we think about the trajectory of those segments going forward here and into 2Q? And then, how do you think about them in the second half at this kind of early stage shipping from a high level? Thanks.

Thanks, Ryan. Thanks for the question. As we outlined in our letter, we're continuing to see green shoots coming out of that smaller customer base. And the decline from Q1 to Q2 is really focused on those medium and large customers. Kind of -- to put a point on it, you know, that segment -- those segments in the fourth quarter were $77 million of revenue; and in the first quarter, they turned out to be about $43 million. We didn't expect continued deterioration a quarter ago but clearly, they are still stuck in their capital planning processes. And we're now forecasting them to be hard to get from that $43 million level. So those segments really have not much more further to go. And so we think at this point, why Q2 is bottom; and we're confident that from here on out, we got to be able to grow.

Got it. Thanks. Thanks, Cory. And quick follow-up if I could. Please on your product mix here in terms of Revenue EDGE, Intelligent Access EDGE, should we think of that Intelligent Access EDGE as the trajectory for your new footprint gain? I actually thought it might be a little worse than that, and might see a kind of more of a mix towards sell-in and Revenue EDGE. But how should we interpret those two product segments?

Well, so the -- on the Intelligent Access EDGE, that's a mix of new network games, but also our existing customers filling out the network bills that they currently have. And so as we said, we saw some real -- you know, you see the continued strength in our rural customers who are in smaller segment, who continue to buildout those networks successfully; and that's why you see that underpinned strength. And I would say that as we go forward, and you start to see those 60 million fiber lines start to get buildout, you're definitely going to see the Intelligent Access EDGE surge. On the Revenue EDGE side, that is the business as usual part of our business where that's what they use to acquire new subscribers. And so you're going to see that continue on. And in fact, as we -- you know, when we took to 10 customers last year -- last quarter from -- and therefore, those ones are generally caps and grows where they're saying, I have an existing fiber network, I'm worried about commoditization, I need to differentiate my business in my market and Calix is best positioned to do that.

Got it, Michael. So it's fair to say that Intelligent Access EDGE number includes a healthy component of sell-in, fill-in, edge out from existing networks, but entirely new footprint is down much more than that?

For sure. And that’s back to the indecision with regards to decision-making, as they work through -- do I invest my dry powder and the capital that I have in a new network build? Or do I use the funding that's now almost saying, you know, six months out, eight months out, and the BEAD funding can go after that, instead of using my existing capital. So in the future, you will definitely see a swing up on the network side as they begin to deploy those BEAD funds and we take footprints.

Got it. Great. I'll pass it on from here. Thank you.

Thank you. Our next question comes from the line of George Notter with Jefferies. Please proceed with your question.

Hi, guys. Thanks so much. I wanted to ask the BEAD question. I think you said 6 to 8 months out. Look, I know the BEAD program is a little bit controversial in terms of the process and the potential for delays. Is there -- can you handicap the BEAD process? Do you really think that the monies are flowing by year-end in the 6 to 8 months out? Or do you think it's a program that has the potential to slip?

It’s a good question. We have -- and everybody is asking that question. And so, you know, over the last three years others had been asserting that it would be coming earlier. We've been very consistent with regards to our views, that it would take significantly longer to arrive. And then when it does arrive, it's going to be a lot larger than people anticipate. So what's our view on it as we see it as 2025. You know, in early 2025, we think that you'll start to see some trickles, and then it'll go from there; 2025 is the year.

Ryan, you can see from the NTIA [ph] website, they made some good progress in terms of getting states approved through the Volume 1 or the challenge process. If you include the territories, they went from 29 last quarter to 47. I would expect that the NTIA [ph] will start working more on the Volume 2 and getting more states approved. But you're right, until you start seeing those states get approved, this can’t -- can turn me and continue to slip. So, like any government funds, that's where I'm continuing to watch that. I'm encouraged by what I saw happen in the last 90 days, and we'll see what the next 91 days brings.

Got it. And then just as a follow-up, I think you guys were talking about the overhang associated with BEAD. How many -- we talked about kind of network planners kind of going offline is a result of the wait for effect associated with BEAD. Is that -- you talked about the strength in your smaller customers. Is that something that you're seeing right now in the smaller customer base? Or is that something you're looking at more prospectively as the year goes on? Or how do you think about that effect? And how it layers in your business timing wise? Thanks.

Well, we identified that in January of this year. We stated that it would be -- this is going to be an impact group first half, right. And so we saw that in Q1 and we see that in Q2. You see a profound impact on some of the larger customers, as they're working through this. With our existing customer base, they still are going through that decision-making process. So, of course none of them are -- have made the decision to not apply for BEAD, but there are a portion of them that are continuing on. Therefore -- or are pursuing BEAD; therefore that indecision continues and you see it lesser in the smaller customers, and more profound in the medium and large.

Thank you. Our next question comes from line of Samik Chatterjee with JPMorgan. Please proceed with your question.

Hi, good morning and thanks for taking my questions. I did jump on a bit late, so if I -- if you've answered this, please, excuse me. But you did call out in 1Q as well, certain significant customers that were pausing spend; you are calling that out as a headwind in the -- in this release as well. I'm just wondering when -- when you look at the breadth of the customers that have -- that are pausing, is that just expanding in terms of the breath as you go into sort of the backend of the year? Is that really becoming sort of a more evident trend? Or it is typically sort of remaining constrained to a few, I think you would call out three significant customers last quarter that had pause? Is it remaining constrained to those? And I have a follow-up. Thank you.

Cory, that's a great question for you to answer and identify the shift from Q4 to Q2, and how we did not anticipate it continuing in the second quarter.

Yes. It is largely two customers that have continued to have delays in their capital decisions. And so, it's not a broadening; it's really more focused on those couple. And when you take a look at what they did, you know, we were at $77 million in Q4 of last year, it's $43 million in the current, and anticipated to be about half of that in Q2. So, no, I don't -- it's not broadening out; it's still tied to largely, predominantly those two customers in particular.

And that's why we feel confident in calling the bot [ph]. The small segment remains very robust. We've demonstrated that and while they may have some pause in their decision-making, they continue to expand out with their initial or with their existing network builds, and winning subscribers. We've seen green shoots and everything that we're doing. If you actually look at last year, as inventory turns decline, we saw -- obviously, our funnel declined in the same way; and we've also seen that turnaround. Our funnel is now expanding, and you also see lead [ph] indicators from fiber builders like DICOM [ph] who called out that they're starting to see those green shoots, and they're also expanding. So that's why we feel comfortable calling the bottom, and then in the second half, we'll start seeing the expansion.

Good. And for my follow-up; one of the interesting things you highlighted in the shareholder letter is, even as customers are pausing some of the new network builds, they're focusing more on subscriber trends and monetization of the subscribers, I assume, which leads with -- I think there should be more interest for your cloud platforms overall. But I know you outlined that in Q2 you will continue to grow them. But what are you seeing in terms of trends? Are you seeing any accelerating trends just on account of them, customers relying more on you for those services in the meantime as network builds get paused? I mean, any insights on that because I would think they would have a counterbalancing effect on the service or the cloud platforms there? Thank you.

That's a great question, Samik, and a good insight. And in fact, it's exactly like that. I actually had a prospect who's never done business with us, last week used the following term. He stated, “We did not have the time over the last three years for the pandemic to pour a cup of coffee, let alone consider a different business strategy. But through this pause, and some of the challenges that are going on in the industry, we actually took a step back. We started to look at you as an alternative, and through our conversation we realized that you're not an alternative, but you're the choice that we should be making. Because you're not coming to us talking about building a dumb fiber network, what you're actually talking about is building out a diversified business strategy that is very comprehensive for the consumer, expand into small business, and there's a vision to go into medium. And then at the same time differentiates the local brand with the community through assets like smart cap”. And so in this type of scenario where they did not have that breathing room to even consider it, they now do. And this represents what we've been stating in Q2, Q4, and now in Q2 again, that this represents a massive opportunity to search through that, demonstrate the value that we can have to their business, and set ourselves up for a decade to come. And so that's why we're so enthusiastic about the pause that's happening in the market right now. It creates an opportunity with those customers to actually take the time to think and recognize that there is a big shift happening, and they have an opportunity to partner with Calix.

Thank you. Thanks for taking my questions.

Thank you. Our next question comes from the line of Scott Wallace Searle [ph] with ROTH MKM. Please proceed with your question.

Hey, good morning. Thanks for taking my questions. Mike, maybe just to quickly clarify a couple of items; looking at the down quarter into June and the weakness in the medium and large customers, are they entirely the cause of the downward sequential move from the first quarter, the second quarter would imply another, you know, 40%, 50%, sequential decline similar to what we saw in the current March quarter? Or are you seeing some softening as well on the small business front? And as we look into the second half of this year wanted to clarify, that recovery; is it all small business driven? And when you say, BEAD, in early 2025, I'm assuming that's the initial spending that you're talking about as opposed to watch [ph], I just wanted to clarify that. And then I had a follow-up.

So, Cory clearly stated that when revenue has declined from $77 million to $43 million in the medium-large [ph], and then we're anticipating it halving [ph] again in second quarter, that we are -- we fully attribute what's happening to that segment. And so -- and then, as we stated in the investor letter, our small segment continues to be strong. And then we look at as they're going through this decision making process, as I just stated, as a significant opportunity for us to actually surge in where they have the mindshare and the time to think, where they can consider us as an alternative. And our business model, which in the end is, is Crossing the Chasm from us; moving from the really innovative folks like ALO [ph] and others, who really get it and have already deployed and recognize that they want to build a different business to differentiate in their markets. So the network operators are now starting to see the challenges and looking to fill that network. So yes, it's attributed to medium and large. No, we do not see a shortfall in the small; in fact, we see them continuing to invest and grow. And that will lead to strengthen the second half.

I think I answered his -- and then the last question, Scott, you asked about was around BEAD. And -- yes, we're talking about not just awards, but revenue beginning in 2025.

Okay, great. And if I could just on the BEAD front; look, you're working with multiple customers right now, and in terms of facilitating their process, and obviously engaging with them. Is there a number in terms of the amount of requests that your customers have put in or some sort of magnitude; help us understand what that dollar amount could actually look like? And I was wondering if you would clarify trickle in 2025 and where you think this could peak out in terms of annual contribution from BEAD funding as we get into 2026, 2027 and beyond? Thanks?

No, we don't have a number affiliated with that. The only number that we will provide is that we've had, you know, well over 500 consults that we've engaged with, with customers and helping them understand where the different funds are. That's not only BEAD but it's also state level, that’s tribal [ph], all those different groups that we've been working with. I was at the Tribal [ph] Summit two weeks ago, you know, and there were hundreds and hundreds of tribes there who are contemplating that government funding which is directed at their markets. So I would just say that we are incredibly active, as I put and ensure -- we put in the shareholder letter. We also have partnered with Ready.net, who is very active with our customers and helping them understand where the BEAD funding is, how to pursue it, what the maps are. And where we see incremental value in that is, as we've done with previous programs over the last 15 years, we see those expanding beyond just the funding part of it, which is a great opportunity for us to partner with our customers into how do they stay compliant over the long-term through the testing. Currently, as I stated earlier in my remarks; 74% of federally funded customers in the US today use us for speed test. That should be a very good indicator with regards to the capabilities that we provide, a broadband service provider, who pursued government funding on how to make it simple and successful.

Thank you. Our next question comes from line of Michael [ph] with Rosenblatt Securities. Please proceed with your question.

Great, thanks. Thanks for the call. Thanks for all the points you're making, which are good. I just want to check first on a couple of more bare [ph] thesis points and just get your view on them. First of all, you know, at OFC, Cisco was talking about, you know, basically going after the medium customer market with Pawn [ph] Technology, you know, with a pawn [ph] card hanging off a router, similar to the Sienna [ph] solution. So just wanted to check if there's anything market share-wise going on in the Tier 3 [ph] market, or if this is all just -- customer evaluation delays as you spoke about?

There is a competitive thing going on; we're taking footprint. So that's what's going on. And so that being said, our acquisition of that footprint, like the 10 customers that we won in Q1, it takes time for them to actually burn through their previous inventory and make the transitions, all those different elements. And so those are the green shoots that we've been referring to. With regards to other people coming into our market, bring it on.

Great. Okay. And then on -- there is a kind of tear, will large, medium, small customer question having to do with BEAD. You know, there's just been some people talking about how -- and I don't know how they can predict this, but they are predicting that, at the end of the day -- you know, and I don't know if this is correct, but people are saying BEAD might go more towards the large and the medium customers and less towards the small customer base at the end of the day. And -- so I don't know where that that call is coming from or how people could say that. You're working with all these customers; what's your confidence that your small customers who make up 80% of your revenues are going to be winners in the BEAD process? Like, where does that -- you know, just sort of detail where that confidence comes from? And any data points you can give us there? Thanks.

Well, to be clear, though, BEAD -- we didn't say BEAD is going to go to small customers; we said actually, BEAD is going to go to the market; small, medium and large. We called out that our medium and large segment is down as they go through their decision-making process. But that should be an indicator that that should then swing back as they acquire that funding. With regards to who's going to win; all three segments are going to compete for that money aggressively. But to be clear, BEAD is focused on the really rural, underserved customers. And in fact, you know, when I've engaged with the NTIA [ph] around this, they are aggressively trying to ensure that the small service providers do participate; and that it just doesn't go to large. Because if the small teams do not actually participate in BEAD, that's going to be bad for America. Why? Because they're the ones who actually have invested in nowhere USA, because they live there, they love their community, and they've done those investments with or without government funding, and the NTIA [ph] is reliant on them continuing that community centric mindset to make very rural situations successful. So anyone who says that it's just going to be one segment or another; that I don't agree. We don't agree. It's going to be all three segments participating at different levels. And in all three segments, we have good relationships, and are we'll be able to support them all.

Okay, great. And then finally for me, just looking past this; as we get to 2025 -- I know it's early to give an outlook for beyond one quarter or one year but do you think that we could get back to 10% to 15% type of growth rate in 2025? Or do you think we'll be ramping towards that in sort of the first half of 2025? And maybe don't get there until 2026 on full year basis? Just -- the long-term kind of annual growth rate starting in 2025; how are you thinking about it?

We did that consistently for four years. And we -- you know, we expect that once we get through this peculiar indecision phase that we will get back to that. And as I stated in my opening remarks, the first thing I stated is that the fundamental underlying -- underpinnings of this business was our platform, cloud and managed services remain strong; that's best evidenced by the fact that we've got cash flow, and margins continue to grow, customers understand. And this indecision period, as I stated, is an opportunity for them to take a deep breath, consider their future and what do they want to do over the next 5 to 10 years, as opposed to just what's in front of them. And this creates the opportunity to have a very different conversation around how do you build a higher value business for your stakeholders which can be members if you're a cooperative or shareholders if you're for profit. And this represents an opportunity for us to take footprint which will then yield in 2025.

Great. Thanks very much.

Thank you. Our next question comes from the line of Tim Savageaux with Northland Capital Markets. Please proceed with your question.

Hi, good morning. Couple of questions. And maybe you hit on this briefly, but I want to go back to your green shoot commentary and see whether you had any more color on that was really [ph]. And I had another question about revisiting kind of the share gain efforts that were discussed on the last call; you seem to conflate those two. And are there any other signs of positive activity throughout the customer base; small, medium or large, that you would refer to as green shoots? Or is it really your efforts to gain share?

Well, so as we -- you know, when you go back during the pandemic, our lead times were as high as 18 months. During that situation, we had deep insight into what a BSP was doing through because they actually had to give us their orders; and therefore, the pipeline was affiliated with that. And overtime, as we've gone through that over the last few years, you've seen basically lead times go down to -- from 6 quarters down to -- in essence, a single quarter. And therefore logically, you would also see the pipeline affiliated with that also shift. And we're now at a place where things have stabilized, and we have our -- we are back to actually seeing from a green shoots point of view, significant pipeline growth, which gives us confidence in what's going to happen in second half. At the same time, we continue to take footprint as evidenced by -- I talked about the larger customers selecting us with Smart business, that's a significant win; that's a brand new business. And that's closing, not in Q1 but in Q2 -- in the first few weeks of the quarter, we closed our biggest cloud deal in the company's history. And so, I go through those points; the pipeline growing, the strong -- closing the largest cloud deal, and then a larger customer selecting us to actually go after their small business market, which is in essence, brand new business for us. This represents a significant opportunity and gives us confidence in the second half.

Great. And kind of following along from that even, you know, what's been maybe notable here in the last couple of quarters is that even with the times you've seen gross margins continue to tick up; I imagine there's a mix aspect of that with the appliance business. And I guess, a couple of -- as that perhaps recovers into the second half, what sort of impact do you expect it to have on the gross margin side? Which is it -- you know, could it blunt that sequential growth with hardware coming back? Or do you expect to see continued steady increases in gross margin throughout the year from greater software and service revenue?

Great question, Tim. As we said, throughout our platform, cloud and managed services business is continuing to grow as our customers continue to take, share and add new subscribers. So you've seen that persist, and it will continue to do so. As the network -- new network builds come back, what you'll ultimately see is a shift in product back to more access which has higher gross margins. So you won’t see necessarily a decline in gross margins, I think you'll see the progression continue. The rate at which it changes from quarter to quarter will vary depending on those mixes. So, for example, in the second quarter the margin expansion is less than what it was in the first quarter. And it has to do with a lot of the products swinging back to the premises side in the second quarter. So inevitably, we think the margin will continue to progress and I don't think you should think that they'll pause because of new network builds being decided.

Thank you. Our next question comes from a line of Christian Schwab with Craig-Hallum Capital Group. Please proceed with your question.

Great. Hey Cory, how long before the two large customers get back to $77 million from $20 million?

That's a great question. I'm not going to call that one. Obviously, last quarter, I was surprised by -- you know, I thought they would get to where they would make some decisions. I wasn't anticipating the decline that we saw; so I'm not going to dare to go out on a limb and say when that will recover back. We know it will recover at some point, I just don't know when.

Okay. So I mean, we haven't done $200 million in revenue in over two years, right. And we're going to keep spending, almost $100 million [ph]…

Say it again.

You haven't done quarterly revenue approaching $200 million in two years.

No. We didn't shoot [ph] $55 million in the fourth quarter.

We did shoot $25 million -- $26 million in Q1.

Yes. Q1 of 2022, you had $202 million, and this quarter, you're guiding the $200 million at the midpoint? It doesn’t matter…

No. We [indiscernible].

No, we haven't done $200 million, it goes back two years.

Okay. So, roughly [indiscernible]. You can look at it. The point is, is your OpEx is, you know, significantly higher, right. And I know we're going to invest for growth but we talked about a trickle of BEADs starting in the beginning of 2025 but we have no idea when the large customers are coming back. How long do you hold the [indiscernible] on a quarterly basis?

We understand that there's 60 million new fiber in that line is coming. We also recognize as we've identified for you that -- and you see that the fundamental business model is actually growing margin, and therefore it is strong. Customers are delaying for the very first time their decision-making, and they've got the time, as I stated, as it was so eloquently put to me last week or I can actually -- I couldn't actually have the time to pour coffee, and now I'm willing to entertain these conversations. At this point in time, we will continue our OpEx investment, because this is our opportunity to expand footprint, as never before, ahead of one of the largest investments from the government in history. And to do anything, but what we're doing would be wrong. And with our Board, our Chairman, and our leadership team; we are confident in the opportunity to grow and that's going to yield significant returns. We are investing to win.

Understood. Thank you. My last question is, with recent expectations were 2024 and a once in a generational lifetime in BEAD, and large customers who are significantly under spending; shouldn't the target growth rate for fiscal year 2025 be 20% or substantially higher than that, on the top line?

Possibly. That's why we're quite comfortable putting 20%. That's why we stated that that we see this 2024 as this odd -- this audity [ph]. And to your point, over the last four years we've delivered, four years at 20% growth. And we see a return to growth in 2025. And we're working that right now. We see the green shoots and all those different elements; so we're not calling 2025 at this point. But we were just asked in the previous question, do we see the return of 10% to 15%? Yes.

Okay, great. No other questions. Thank you.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr.Fanucchi for any final comments.

Thank you, Melissa. We will participate in several investor events during the second quarter and information about these events, including the dates and times and publicly available webcast will be posted on the Events and Presentations page on our Investor Relations section of calix.com. Once again, we want to thank everyone on this call and webcast for your interest in Calix, and for joining us. And this concludes our conference call. Have a great day.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.