Greetings, ladies and gentlemen, and welcome to the Calix Second Quarter 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] It is now my pleasure to introduce your host Mr. Tom Dinges, Director of Investor Relations. Thank you, sir. Please go ahead..

Thank you, Donna, and good morning, everyone. Thank you for joining our second quarter 2021 earnings call. Today on the call, we have Chairman and CEO, Carl Russo; Chief Financial Officer, Cory Sindelar; and President and Chief Operating Officer, Michael Weening.

As a reminder, yesterday, after the close of market, we released our letter to stockholders in an 8-K filing, as well as on the Investor Relations section of the Calix website. This conference call will be available for audio replay in the Investor Relations section of the Calix website.

Before I turn the call over to Carl for his brief opening remarks, I want to remind you that in this call, we refer to forward-looking statements, which include all statements we make about our 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 our second quarter 2021 letter to stockholders, and in our 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, on this conference call, we will discuss both GAAP and non-GAAP financial measures. Reconciliation of GAAP to non-GAAP measures is included in our letter to stockholders. Unless otherwise stated on this call, we will reference non-GAAP measures. And with that, let me turn the call over to Carl.

Carl?.

Thanks, Tom. The second quarter saw the Calix team achieve a number of milestones on our March to on all-platform model. On a wave of continued strong demand for the first time, our all-platform offerings software and the associated systems and services were greater than 50% of our bookings. We expect this trend to continue.

For the third quarter in a row, we did not have a 10% customer, and we do not expect to have one in the current quarter. This speaks directly to the breadth of our customer base and the predictability of our all-platform model. At the same time, we brought our B6 and C7 products to end up sale.

These two systems were the founding systems of Calix, and this marks another milestone in our continued pursuit of our all-platform future.

With these milestones behind us, the Board of Directors has added the Chairman shift to my CEO role, I will continue my focus on our long-term strategy, and I’m confident that our executive team, my friend Michael Weening, our President and Chief Operating Officer will continue to execute our strategy with excellence while supply remains a challenge and will remain a challenge well into next year.

Organic demand for our solutions remains grown up. Every day we are excited to help our customers simplify our businesses, excite their subscribers and grow their value. With that, let us open the call for questions.

Donna?.

Thank you. The floor is now open for questions. [Operator Instructions] Our first question is coming from George Notter of Jefferies. Please go ahead..

Hi guys, thanks very much, and congratulations on the strong results. I guess I wanted to ask about gross margins. If I remember going back three months ago, you mentioned that you had a shipment of low margin product that got pushed from Q1 into Q2. I guess, I’m wondering if that had some impact on the gross margin result this quarter.

And then also I would imagine your component costs are higher also given the supply constraints around the industry and any sense you can give us for how that might have impacted gross margins also would be great?.

Yes, George you have that remembered correctly that that should have been pushed from Q1 into Q2 and it had some impact on our margins. And you’re also correct that the component increase in prices and higher freight loss contributed to the sequential decline in margin from Q1 to Q2..

Got it. Any chance you guys could quantify that? Is it a point margin, two points, a margin, half a point, anything you could steer us to would be great..

Yes. I think Cory in past, you’ve said it’s not any significant, but we haven’t tried to bracket it. I think in the past, Cory has said that, it’s more than a point less than some higher number. It’s a significant number, George and that’s I think the best way we do..

Got it. Okay. That’s great.

And then I guess, I also wanted to ask about CenturyLink, I guess now called Lumen, your larger customers were that segment was down quite a bit year-on-year, obviously CenturyLink it sounds like is going through a strategic process or some of their assets, but any perspective on – what’s going on there and in any chance that account could improve going forward, let’s say they do make some strategic decisions.

Maybe get some cash proceeds from the strategic decisions.

Could they reinvest in areas of the business that you guys are exposed to?.

Yes, George, I think that’s the correct observation.

As you know, over the last couple of – our few quarters, they’ve been pretty tight on CapEx, as I think they’ve been going through their strategic valuations, if you’ll notice and the announcement around the Latin-American assets they spoke directly to a likely use the proceeds into CapEx and investments.

But we think it’s kind of continued like this for a while as they continue that focus on where they want to go strategically. So, our business continues to move along. If you look across the industry, you’ll see that, their CapEx was down across a number of spaces.

And I think there is a chance it will improve, but it may improve through Lumen, it may improve through the spun-off assets whatever they may be, so stay tune..

Okay, I’ll pass it on. Thanks very much guys..

George, thank you..

Thank you. Our next question is coming from Paul Silverstein of Cowen. Please go ahead..

Thanks guys. The 43 new customers in the quarter that’s a big step up from your historical past, I think the 24 of the preceding quarter of the 20s and the teams before that. Is this the new norm? Was there something specific about this quarter? Then I’ve got a couple of follow ups..

I don’t know if it’s the new norm. I would really characterize it as, that we’ve been investing to get up to our model, and a significant portion of that has been in sales and marketing. And so I would say stay tune. But I think you’re going to see an increasing aggression on the part of the sales and marketing organization.

Michael, do you have any words you want to add to that?.

I mean, just see that the different sized customers from small to medium-size and exactly what you said, Carl, is that the investments that we’re making in the sales and marketing organization are paying off.

Along with the platforms being very mature at a customer say to me the other day that we’re the only Wi-Fi 6 platform that’s carrier-class and mature in the marketplace. And that’s why they went with us and it’s paying off dividends, because we were the first in the market.

And now that we’d have all of our new platforms coming into place and our new solutions, we were very excited about the future, which is leading a new customer acquisition..

All right.

Then your mid-sized customers remember the number, they were up again very strong if it’s worth 680% [ph] growth this quarter and top of the 130% growth from the previous quarter, is that indicative of something that’s utterly estimates loss assembled that level, but are they back to growth node for an appreciable period of time and what’s going on there? Any notes that you could offer?.

Yes. So, I think – we’re taking care about mid-sized customers, because it’s easy to remember the past, and think of mid-sized customers as the Tier-2s. And if you remember, we said, mid-sized customers that those greater than 250,000 subscribers, less than 2.5 million.

So it is indicative of something in the future, but it’s not necessarily that the Tier-2s are week that’s our value proposition as you heard Michael alluded to in small and medium customers, it’s starting to work its way up the stack of customer size..

Got it. One last question if I may. On the non-U.S, I know you’ve had your hands full with U.S. demand and so you haven’t correct me if I’m wrong and been deploying a significant non incremental investment in terms of OpEx that set time resources into non-U.S., I know you’ve had your hands full with U.S. demand.

And so you haven’t, correct me if I’m wrong and been deploying a significant amount of incremental investment in terms of OpEx that set time resources into non-U.S. the non-U.S. is up strong once again, this quarter in incremental insight get off to read to the future..

Yes. So same story from my perspective, and I’ll let Michael add some color. We are being very much focused on North America, but globally, this whole drive towards from anywhere broadband, et cetera, is a way that’s moving through the marketplace, but Michael, if you want to add some color..

Yes, on the international side, we’re being pragmatic on how we expand. And a lot of the growth that we’re seeing is actually from existing customers who are making incremental investments in their networks and the markets that they cover and we’re getting the benefit of it, as we have a long history with them, they chose us as a strategic partner.

And I think that’s the key differentiator is that the companies who are with us in international markets are the ones actually understand the value of our platforms, how they simplify their operations and excite their subscribers, and they’re betting on us long-term and that’s and – they get more capital, they partner with us..

All right, I’ll pass it on. Thanks guys..

Thanks, Paul..

Thank you. Our next question is coming from Chris Howe of Barrington Research. Please go ahead..

All right. Good morning, everyone and congrats on the quarter..

Good morning, Chris. And welcome to the party as it were..

Yes, a party indeed. A few questions here. But leading off just tying together some thoughts with some of the previous questions, the 43 new customers in the quarter and in the shareholder letter, you had a brief highlight related to favorable regional mix.

The success you had in adding new customers, should we think of that as being tied to how you targeted your potential customer base on a geographic basis?.

It’s tied to the same model that we’ve been pursuing, which is – we have a direct model that we’re continuing to invest in. And so, look there’s more smaller customers than there are medium customers, there’s more medium customers than there are larger customers. And so on a numbers basis, you’re going to see the most of them in the smaller customers.

Michael, do you want anything to add?.

Yes, the other part is that, if you look at the maturity of our cloud platforms, what we are unique in the market with is the fact that we can actually enter a customer on many different vectors. So, where if you go back to the history of Calix 15 years ago, we would have primarily partnered with a customer as an axis [ph] vendor.

We’re now able to go and transform their call center. We’re able to transform their marketing, like nobody else in this marketplace, through behavioral analytics insights. We’re able to help them, build out a virtual storefront in the home with Wi-Fi 6.

And therefore that gives us an access to competitive accounts that we never had before and we’re entering in a different vector and allowing us to win those customers..

That’s great. Thank you for the color. And just digging into total operating expenses, you came in better than expected. Can you put this leverage into context for the current quarter and kind of at what point you saw the potential leverage start to realize itself and how perhaps, we should think about that on an ongoing basis.

I know we’re moving towards the target financial model on a percentage basis that you highlighted in the letter, perhaps you can go into some of the leverage opportunities or what we could potentially see as revenue, perhaps overgrows your total expense line?.

So, let me shape my answer to your question in a return on investment manner. Because obviously we expect to make discipline investments in OpEx that yield returns, and we are very focused on growth.

That being said, the leverage is in our view in a return on investment by driving the growth of the business and opening up new margin expansion opportunities. It is not in leverage at the bottom line from having OpEx be below our model so Cory, do you want to add some color for Chris to that and where we’re having share..

Sure. The underperformance in OpEx was largely due to not meeting our hiring goals in the quarter? So we did add a, roughly more than 5% to the workforce in the quarter. But fell short of what we expected, but over the near-term, we intended to get to model and so those OpEx investments will continue to increase..

Yes. And so the way we refer to it Chris just in your perspective is, we are planning for success, but we’re not going to lower the bar. For folks coming in to meet a head count goal, we’re going to go get the very best talent we can and we think our culture supports that..

Okay, great. I guess that speaks to one of the recent press releases surrounding the high quality of talent that you’re attracting to Calix, not lowering the bar for that.

My last question is just quickly it was asked about the lower margin items that got pushed forward from Q1 as we look at kind of the end of Q2 anything there that we should make note of as it relates to Q3?.

Sure. We have seen a little bit more of purchase price variances and spot market buys are going to start affecting margins. We factor that obviously in the guidance that we provided, but we are moving into the tougher part of our fourth quarter.

And remember back when in our first quarter call, we’ve talked about the push out in lead times, lead times leading a gap in the fourth quarter. And so as we approach the fourth quarter, it’s obviously becoming increasingly more difficult to meet the demand and so that it has been assuming costs have increased – increased component prices.

So, we’re going to go through the most challenging supply part that we’ve faced in the last 18 months in the next couple of quarters..

Okay, great. Thanks for taking my questions..

Thanks, Chris and welcome aboard..

Thank you. Our next question is coming from Michael Genovese of WestPark Capital. Please go ahead..

Great. Thanks very much.

So with the upside versus where the street numbers were in 2Q and 3Q, do you have any update to the full year outlook?.

Mike, we do – and I’ll let Cory cover that with you, Cory, go ahead..

Yes, last quarter we setting up in about 15% per year with the improvement over performance of the second quarter and outlook for Q3. This [indiscernible] can grow at 20% or more for the year..

So for the year, what does that make it? I mean, we’re talking about….

660 for the year..

Okay. Does that help Mike, I hope..

Yes, absolutely. Thanks. Okay, so just, could you just quickly talk about, I just think it’s important, when you talk about that the legacy products I think, I guess quite realize you have so many legacy products, because I mean, they’re all fiber, but what’s really the difference between the legacy stuff that’s phasing out and the all access.

If you can give us some color there that’d be helpful?.

Well, we do have – we’re a 21-year old company. The company was founded on the C7. We acquired a company called Occam, which has its founding product called the B6. And you may notice from my introductory remarks that we actually achieved end of sale in June on both of those systems.

After those systems came to market in 2007, we built the E-Series product family, which may bring about because E-Series continues to peg, but the initial E-Series was built on an operating system called ESA, and those were copper and fiber systems. We also then built the GigaCenter family, which was our first generation of premises systems.

And all of those are in what we refer to now as our traditional or legacy systems. They result – they have a broad deployment, E-Series was a phenomenally successful system.

And so we have many, many customers that have built networks for E-Series and have premises systems on GigaCenter that are still robustly ordered, when we brought our platforms to market AXOS and EXOS which has become the Intelligent Access EDGE and the Revenue EDGE, along with our clouds, that is our all platform business going forward.

The AXOS and EXOS operating systems, even though they are abstracted from the hardware, still have hardware resources underneath them. We continued with the E-Series for the access side and we have now brought the GigaSpire family to market for EXOS. So, we are slowly but surely growing our All Platform systems.

But customers that have networks built on E-Series or the GigaCenter premises, if they choose to continue to order those systems. I for one, I’m perfectly happy to take the order. And as they see the opportunity to deploy our platforms, they’ll move to them.

Michael, do you want to add some color?.

Yes, when I joined five years ago, Carl shared the view it was five years into it and we’re down this path, I’m on the journey to build these platforms. And I would say the only thing I would say that’s important to understand between the legacy and the new is that we’ve chosen a very different path than our competition.

What our competition has done is actually kept their existing systems that have been there for 20 plus years, they haven’t under upgraded the fundamental underlying technology.

And instead, they’re taking the very traditional technology path, but actually putting middleware over top of it, and actually building out all over top of it and covering it up.

Well, Carl and the leadership team did 10 years ago, was actually rebuild these platforms from the bottom up, using industry standard technologies like NetCom Gang, and all those elements, which is why our products are unique in the market.

They are built from the bottom up to actually embrace the future, which is all around helping service providers, understand their customer leverage data and win. And so that’s the difference between the old and the new from my perspective..

I just want to point out that I’ll take that compliment..

Why don’t?.

Mike you don’t..

Okay, well, thank you. I mean, that was great color for that question. I’m going to ask two more.

And I’ll just ask them at once, even though they’re on different topics, I just want to take your temperature on gross margin expansion for the overall year, the typical 100 basis points to 200 basis points, where you stand on that right now? And then secondly, just how are you feeling about Congress and, infrastructure related further stimulus for this industry? Thank you.

.

Okay. So let me just – I want to put some color on the gross margin and ask Cory to then add to it. I want to go back to what Cory was saying earlier about Q4 filling and et cetera. And I want to frame that with what Michael just said. We have an enormous opportunity in front of us, it is a secular disruption.

And we are very energized by helping our customers succeed. What that drives us to do, is to work very hard to meet their expanding needs, which means delivering systems and not raising prices, for example, because our vendors have raised their prices.

So, we are all oars in the water to meet our customer’s demand, which means we will pay expedite fees, do things on freight, find things on the open market for silicon. And that’s the color that Cory was talking about, so Cory you want to shape that to the direct question. And now I’ll come back and talk about Congress..

Sure, I think the strength in gross margin and the first quarter and continued performance in the second is the confidence that we think will achieve margin expansion of 100 to 200 basis points year-over-year. So, I think we’re on track to do exactly that..

Right. And [indiscernible] it’s a fight. No one should take away that’s an easy game right now. It is a fight, on Congress, look there’s lots of puts and takes, and we’re all following these things. Here’s the thing I would leave you with.

It seems that in the vernacular, regardless of affiliation, everyone now knows to say we’re interested in hardcore infrastructure, roads, bridges, and internet. No matter party affiliation, you hear the same phrase. So, why do I say that? Because it’s clear that they didn’t ask on it, internet infrastructure has resolved itself in $55 million.

Either way, there’s going to be a large amount of dollars invested in. When how it shows up, we could have long discussions about I am on record as having said the following, and I’ll repeat it. These programs always turn out to be larger than you think. They take longer than you think. And what I’ve said about Calix remains true.

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..

Thanks again. Appreciate it..

Thanks Mike..

Thank you. Our next question is coming from Ryan Koontz of Needham and Company. Please go ahead..

Good morning. Thanks for the question. Impressive metric there with the software bookings north of 50%, can you give us any color there on some of the trends are fairly familiar with the products, but what’s driving that? And is that should we think about that as the new normal or kind of a one-time event? Thanks..

So, let me make sure I’m being very clear. It is our all platform business, which is software, the associated systems. So remember, there’s a hardware resource underneath both the access infrastructure and the premises, and the services that go along with it. So that business not just software business, the whole business has now made it over 50%.

And obviously, once having made it over 50%, it’s not going backwards. So, I won’t speak of it again. Ryan, prior to you joining us, I had said at some point in time, we’re going to go over the 50% in revenue, I thought it was meaningful to share when we get eclipsed that 50% in bookings. So that’s the one ticket and we expect it to continue.

Does that help?.

It does. Thanks so much..

Go ahead..

Can you hear me? Okay..

We can. Go ahead..

Great. Specifically on the art of programs are you seeing any action there we’ve heard from some of your peers that maybe some of the engineering work is starting to be funded maybe by internal mechanisms. But folks are looking to get going, late this year, early next year is that, in line with what you guys are thinking. Thank you..

You mean, you’ve heard from some folks that previously two years ago said it was going to happen next quarter. So all sarcasm aside, let me be clear, as I said, it always takes longer. That being said, we are clearly seeing now, people planning, starting to put in some orders. But it’s still early days.

Michael, do you want to add some color to that?.

I would say that’s exactly the case, the growth that you’re seeing right now is based upon us taking market share. And so while that’s a great future looking opportunity for us, as Carl just stated and it takes longer, and it’s bigger, and so that we expect that to start flowing through and in subsequent years.

But the results that you’re seeing today are about our organization actually taking market share based on our customers to understand the value of our platforms, and their desire to build a new business model to fundamentally transform and win customers against their biggest threat, which is the consumer direct companies who want to get inside the home, own that subscriber and monetize them through incremental services, which the service provider needs to do..

Helpful. Thank you very much. Lastly, any color on the international side, obviously a great quarter there on revenues, any regional color you can offer up? Thanks so much..

Just continued execution, Cory you want to add some?.

Yes, we assume it tomorrow it was pretty broad based. It came from a number of regions, straight, particularly in Europe..

Great. Thanks so much. I’ll pass it on..

Ryan. Thanks and welcome..

Thank you. Our next question is coming from Christian Schwab of Craig-Hallum Capital Group. Please go ahead..

Hi, congratulations on another good quarter and guide guys. Most of my questions have been answered. Carl, I have one quick question.

When you look at small customers, here domestically the less than 250,000 subscribers, but what do you hear penetration rates, into that customer base currently is and could you identify a number of how many target customers that are left out there, that are not customers at all of your all platform offering..

So, we are well penetrated from 20 years of working in North America as counts. Having said that, with our All Platform offerings, you’ve heard me say we are very early days. And so I would say to Michael, as a VP of Sales once said in my very early selling career when it comes to orders, too much is never enough.

So Michael, I don’t know if you have some color but these are, we are so early in this transformation process. That Michael, maybe you want to get some color on the business transformation and how early it is..

I want to go back to what we talked about earlier, which was that in the past, if you were to go back 15 years ago, we would have competed with a number of vendor competitors and are only offering in the access network, while we’re actually seeing over and over again is again with multiple vectors into a customer with the ability to win their marketing organization to win the transformation of their call center, it completely changed how they bring services to market in the home to compete with the consumer giants.

And then the access side that means we can go back to customers who we really have nothing to talk about with the form, because they made a big access network investment. And they’re like, I’m not going to switch midway through and talk about all these other business transformation elements.

So for us, it’s an amazing opportunity, which again goes back to my previous comment, which is the growth that you’re seeing is us taking market share as we enter into not only new customers, but actually places where we get into something to go to talk to them about before and absolutely now we do..

Okay. Well, let me – I appreciate that. Let me ask it a different way.

Given your long history in access, what percentage of your historical access customer base over the last 15, 20 years that you’ve been selling to is currently buying your all-platform solution today?.

A large minority of buying some portion of it, but it is still a minority..

Okay. All right. And you know where I’m going, Carl, I’ve just trying to frame a couple of different ways, how big the opportunity for you can be at a small penetration rate follow-up on the earlier question about the new customer attrition in the all-platform.

So, is there 500 existing customers that don’t buy in all-platform solutions, it’s something like that, I guess, you know – understanding..

Yes. So, let me be clear. You’ve heard me say this many times, every day I get up and go to work, I get more excited by the opportunity we have in front of us. And the reason I’m getting more excited, because I’m looking at what customers are doing with us. And I then come to the realization that we’re even earlier and this opportunity than I thought.

So that’s one way of thinking about it. The second thing you’ve heard me say is that our model expands in multiple dimensions in multiple ways.

And so it’s not all, as you heard Michael speak earlier, we can enter a customer with Marketing Cloud, and that might be the only thing they deployed, but as they started to do Marketing Cloud, then they might spend a Support Cloud and they might go to the Revenue EDGE, there’s so many dimensions of expansion that even with our customer base, which is 1,500 plus strong, we are still barely scratching the surface for that expansion opportunity even though there are quite a few hundred that have deployed some aspect of what we’re doing on the platforms.

So, the expansion, which is what you’re getting at, we are just getting off the fast in the first minute..

Yes, that’s great color. Thank you guys. Congrats again..

Thanks, Christian..

Thank you. Our next question is coming from Tim Savageaux of Northland Capital Markets. Please go ahead..

Hey, good morning and congratulations..

Good morning, Tim..

Good morning, Carl. I just wanted to follow-up on some of the market share commentary. And obviously you guys are – have been a pretty established player in the market, especially on the rural side for quite some time.

So, I was a little bit struck by that comment and where to follow-up with weather and you can define your addressable market, how you like, I’d be focused on that kind of maybe the small carryover segment or perhaps the U.S.

in general, if you could estimate, what you think your current share of that market opportunity is and from whom are you taking market share do you think? And I’ll follow-up..

Carl Russo:.

The second piece is, when you look at the overall opportunity, TAM/SAM all those different metrics, you’ve heard me say that hardware side, We think that our customers will share between $1 and $10 per month per subscriber, as we help them grow more and more successful business models.

And so who are you taking “share from” we careful about that term share because part of it is the new spaces that don’t exist. And so ultimately the best way I can answer your question is, I think you go list the folks that you would think of.

And then let’s see in the rear view mirror, which businesses grow at what rate, which businesses expand margins at what rate? So that’s the way I would address the question..

The second piece is, when you look at the overall opportunity, TAM/SAM all those different metrics, you’ve heard me say that hardware side, We think that our customers will share between $1 and $10 per month per subscriber, as we help them grow more and more successful business models.

And so who are you taking “share from” we careful about that term share because part of it is the new spaces that don’t exist. And so ultimately the best way I can answer your question is, I think you go list the folks that you would think of.

And then let’s see in the rear view mirror, which businesses grow at what rate, which businesses expand margins at what rate? So that’s the way I would address the question..

Okay. I think I understand that. So, you’re kind of saying you’re taking share from your – maybe your customers kind of internal marketing departments for IT departments and serve it sort of a non-traditional definition of the TAM, although in defining it that way – go ahead..

Hang on Tim. So let’s be clear. When you hear us say simplify their businesses, excite their subscribers and grow their value. What we’re actually trying to do is actually increase the value of our customers by helping them grow their revenues, lower their costs, and we’ve all participate in the share of that.

It’s a very different way of thinking than the traditional market share statistics..

Okay. It’s still have a number there, but I hear what you’re saying. And I wanted to follow-up on a couple of finer points on a few market segments that you touched on.

One would be Tier-2s where we do perhaps see some uptick in activity there as a few of those when again, it’s hard to tell, from just how they’re defined, but there does seem to be some broadly, some more activity there. So, I wonder if you could maybe segment again.

And I think the overall theme here I’m trying to get to is market growth versus share gain and there does seem to be a lot of market growth. So in terms of whether there’s something new and interesting happening in Tier-2 hand on the one hand and then international, I guess the comment was about existing customers.

So, we should think more about Canada, Mexico, Caribbean in terms of growth versus some of your new kind of old carrier engagements, UK and elsewhere and in terms of what’s driving that and that’s it for me..

So, Tier-2s again, to get back to what I said earlier that mid-sized customers turn 50,000 to 2.5 million is the segment that’s growing. But Tier-2s are part of that, but they are not all of that.

And so what we’re saying back to Michael’s point earlier is, we are having more and more success working with customers that are in larger and larger to deploy platforms and build these new business models. And for the traditional Tier-2s that are going through various forms of restructuring and reimbursements.

We’ve made there will be an opportunity there over time, but we’ll see how they align their business strategies.

And through international, I think we covered that earlier on where we’re seeing it, which is to Michael’s point earlier from our existing customers for the most part expanding, we add new, we did add new names in the international market to be sure, but it’s frankly, the result of our continued focus as we have been on where we’re aligned with customers internationally.

It’s not because we are expanding internationally here..

Yes..

Okay. Thanks..

[Operator Instructions] Our next question is coming from Paul Silverstein of Cowen. Please go ahead..

Sorry, Carl, you’re competing with the conference on that on broadband, I’ll let you guys all fine. Thanks. Okay..

Thanks Paul..

Okay, Paul..

At this time we’ve reached the end of our question-and-answer session. I’d like to turn it back over to Mr. Dinges for closing comments..

Thank you, Donna. Calix leadership participated in a number of investor conferences in the way during the third quarter of 2021. Information about these events, including dates and times for public webcasts, management interviews will be posted on the events and presentations page of the investor relations section of calix.com.

Once again, thank you to everyone on this call and on the webcast for your interest in Calix and for joining us today. This concludes our conference call. Goodbye for now..

Ladies and gentlemen thank you for your participation. You may disconnect your lines and lock off the webcast at this time. And have a wonderful day..