CALIX, INC. ConneXions 2026 Day 2

Good morning, and welcome back to Connections 26. Please take your seats. Our show is about to begin.

Get ready. You know what time it is. So let the war begin. We're taking off the gloves. We'll hit you 'til you had enough. Yeah. You know it's game time. Here we go. Locked in the zone. Welcome to the show. It's time to rise. Get ready for the fight. It's gonna get wild. It's game time. Here we go. Locked in the zone. Welcome to the show. It's time to rise. Get ready for the fight. It's gonna get wild. It's game time. Let's go. Let's go. It's game time.

Please welcome President and CEO Calix, Michael Weening.

Good morning. How awesome is it to walk up to that all of your successes, the things that you're doing every single day? Congratulations. It's absolutely incredible. And so we kick off the third day or last day. Have a great time. Last night, I heard everyone loved it. Yes? Yeah? Lots of great feedback. Awesome. You know, and as I said yesterday, the theme, if we're going to put one slide up, this is it. There is no version of the future where AI is optional. None. And so as you contemplate this, you really need to think about what are you going to do as you leave today to take big steps forward. What are you going to change? Because now's the time. We've said it in place so that you can launch quickly. But you have to embrace change. You have to be embraced that the past is the past. I need to go to a different place. And I need to go to a different place fast. And I need to go hard. Because what got you here won't get you there. Because this thing is going to change. And it's funny, this morning reading the news, you know, again, there's all this great stuff that's happening.

But this is what I woke up to this morning. AI attack. Tools left the lab. Weaponized a breach. Huge costs. These are the types of things that you face if you don't get ahead of it. And I'm going to tell you a little story. So you know, you sit at this point, this decision point, where your teams are going to come to you and say, we can do all this cool stuff. We have this tiny little vendor who's got a couple people. And you know what? They built some really cool agents. And those really cool agents can do some things we couldn't do before. I really want to go use them. And I want to let them peripherate through my business. That's actually where Calix was two years ago. We had our teams going out because it was this early stage of let's go try all kinds of cool stuff. And yeah, it's five guys in a ChatGPT agent. And they're building some things. But you know what? We can go really quickly. They're doing things that we never thought was possible before. Let's just go. And it was shocking how fast that proliferated. And then we slammed it shut.

Hard. Because here's the simple truth. If you don't get on board, with the people who are putting hundreds of millions of dollars behind putting security, trust, and making it predictable, it's like driving a moped on a 12-lane highway. And it's just a matter of time before you and your little moped get run over. Because this is what's coming. It is that stark. So while I love entrepreneurs, there's no place for this next stage for playing games and playing with tinker toys, trying to build it yourself. The future is you got to align with people who are monsters and driving big trucks on that 12-lane highway and can protect you but, more importantly, are going fast. And in our enterprise, our partners so I, you know, we run a business just like you do. We have the products that Shane Liniak and his team build. And I showed you all the investments that they made there. But on the enterprise side, we have very clear partners and the number one choice with regards to who we pick is do they have deep pockets and can they go fast? So I will tell you that we started to build a whole bunch of crazy stuff before I shut it down hard.

Because of the fact that I would rather wait for example, for Salesforce to show up six months later but know that my company is not going to go bankrupt because all my data went loose. Because I don't look good in an orange jumpsuit. I just don't. And so we're focused on who are the partners with deep pockets who are going to play for the long term not the ones who have cool little tinker toys that can actually build me something that aggregates it and doesn't lead to long-term success. And you really have to be pragmatic and really think hard about this because the proliferation of technology in your business leads to complexity. If you didn't hear Shane West yesterday, he was in a business that had 400 IT people that had a ton of complexity. And led to 40% higher truck rolls and an MPS that was 60 to 70 points lower than what's happening at ALLO. That complexity is cost. That complexity is people. And that complexity is your competitors crushing you. So you're really, really have to think hard on who you partner with in this next stage because the ones with the deep pockets are the ones that are going to win.

That's also why I believe ChatGPT, everything that Anthropic and Claude, it's just a matter of time before they go they get beaten up and destroyed. You got to go with the deep pockets. And you got to go with the people you can trust who are secure and who are in it for the long term. And that's what we've done. You made that happen. You made that happen because of the fact that you trusted us to partner. You gave us great ideas. When we had good ideas, you told us they were good. When we had bad ideas, you told us that why it won't work. And together we've gotten to this point. And it was hard. You know, it's funny. Like people people who learn about our company as we become more and more known with regards to what we're doing that's unique with regards to AI and disruption, they'll go, wow, it's just like you guys have shown up. And you're just a new emerging talent. Bullshit. We've spent 15 years grinding away in the trenches with you guys. To get to this point. None of you are flashes in the pan that showed up.

The secret history of success is really simple. No one cares work harder. Get at it. And you got to grind to success because nothing's easy. And so for us, $2 billion plus, this year we'll have 200 million dollars of deep pockets. To ensure that you get trust, security, and predictability. And in 2027, we will run everybody over from a competitive point of view because we're together going to put up more capabilities that allow you to crush your competition. And we're going to crush ours. Because none of them are doing anything like this. None. And that's going to become clearer and clearer as we open up a big gulf. Between you and your competitors. Because the best the best way we're going to prove that is when no one beats you in your market. When you own the home. When you own the small business that expands out to the medium-sized business. Go look at those switches. Who else has given you a switch, a network product, and a Wi-Fi system that can control everything in the network? We've brought all that together because you asked for it. And by the way, the little switch that is in there, I told them I want two.

They are not prosumer. That's for every consumer. And I don't know what the price point is. It's less than $200. It's a pittance. If you can actually not roll a truck with the price of gas these days. So there's this huge upsell opportunity. Churn opportunity. Because once you get in there, everything can be reduced from a churn point of view. And a great opportunity to grow your NPS. And expand your business and dominate your markets. Because we've done MDU. And we're going to do it the best in the market. Are we sitting with MDU customers? All they do is MDU. And they look at what they're doing. They've been guiding us to this point just like we've worked with all of you. And that product is going to be the best in the market. Absolutely flat out. Why? Because when you put it in an apartment building, it can go from the edge of the fiber in or whatever the transport is all the way to the top of the building. And everything in between. Small business, network, whether it's Coax, fiber, or any other technology, it can do the Wi-Fi, in every resi. It can do the small business if there's a convenience store in the bottom.

And the smart town allows you to wander around through the MDU product so I can go to the gym and have great Wi-Fi. I can have my car connected and have great Wi-Fi. And I can go to the pool at the MDU. And I can have great Wi-Fi. Building owners are going to become your best friends. They're going to love you. And if they don't, as Shane and I said, if you give us a ring, if we're not stepping up and there's something that you need, all it has to do is hit the stack rank. Because we have a stack rank of requests. And what's going to drive revenue and lower costs. Those are our two metrics. Help you make more money. And help you lower costs. And the lowering of costs is when revenue goes up, your OPEX stays flat. And you just get to gain the benefit whether it's for your investors or your community. And embedded is all the things that you need from a capacity point of view. This is 15 years of investment waiting to turn AI on. As I said, around the B&G, the challenge is out there. Kill the B&G by itself.

That's the motto in 2027. There's not a single person in here who can eliminate their B&G box and put access aggregation in B&G into a single system and whose MPLS we can't run allowing them to buy a hell of a lot less from Cisco. Tomorrow. And if you want that challenge, I take it. Call me. Call Shane. The two of us will get on there and we'll actually ensure are we an entire team that'll do a gap analysis. You want to simplify your network. You want to say if a Fortune just do the math. A big PE router, a big B&G, an aggregation box, and an access box, that's four boxes. One E92 that does all those functions with a smaller PE router. 60% less power. 80% less power. Right? One team, not three. Well, one and a half teams because your PE team is going to be half the size. So one and a half team versus four teams. Do the math. And bet for the long term. Companies who win are not the ones who did what they did before. They're not encumbered by their team members who are in an existing job and don't want to change.

Human nature is not to want to change. The leaders, the ones who win, are the ones who change. And we are the easy button. We will help you architect it. We will help you build that next generation network. We will help you save a fortune so that you can be successful and take those investments and put them into other areas. And those other areas are win the subscriber. Sales, marketing, reduce churn. We care about your sales teams. We care about your marketing teams. We care about how you actually do personas. This morning we had a customer in one of the leadership sessions talking about how they had a churn problem. And they engaged with our success organization. They put persona-based marketing in place. We helped them build all their content. They launched it. And they went from a negative to a significant positive. Frankly, you are the best in your industries. The only thing that you should have is zero points of churn. We taking out the people with credit risk. Everybody else should be zero churn. If you lose anybody to Starlink, and you have a fiber to that house, my goodness, look in the mirror and say, what have I done wrong?

What have I done wrong? Because you should never lose to Starlink. And you should never lose to Amazon. And ERO. You should win every time. And if you're not, ask us. We'll help you. And the reason why we can help you is not because we're really smart. It's because we are an aggregator of knowledge. This is a community that comes together. All of these wins are your wins. They're you executing, you doing incredible things. We got your back. We'll make it simple. And as you heard with where we're going with agents, you're going to see a proliferation of them. But more importantly, you're going to see everything that we're doing with regards to workflow studio, so that as you go re-engineer your business, you can say, here's how I'm currently doing it. With all the agentic capabilities and the simplification that Calyx offers me, I can go rethink how I run my business. And then I'm going to workflow it out. The future of leadership and management, some of the same things still exist. I have to set a vision. I have to have a strategy. I have to be able to execute with grit.