Calix says Connect America Fund II will produce benefits over next two years

Calix says that since service providers are still in the process of choosing how much money they will accept from the second phase of the FCC's Connect America Fund, it won't begin to see real revenue benefits until sometime next year.

Speaking to investors during the second-quarter 2015 earnings call, Carl Russo, CEO of Calix, said that the effects of the CAF-II program which a number of its service provider customers like Frontier are committed to will ripple through 2016 and into 2017.

"We view it as a 2016 and beyond effect. You may see some early things, very early things happening lately--late December sort of thing this year," said Russo during the second-quarter earnings call, according to a Seeking Alpha transcript. "The acceptance date is August 27, so roughly a month hence from now, so you have that right as well."

Russo added that like the Broadband Stimulus program, the CAF II program won't be an incremental funding source for service providers that apply for funding.

"We view it as a funding source that is not necessarily going to be incremental," Russo said. "And we are resolute in that belief today, having lived through broadband stimulus where, as you well remember, there was much hype, a lots of discussion, and it openly turned out to be, frankly, substitutive of funding source, maybe a little bit of a pull-forward, but not sustainable."

A big contributor to Calix's revenue growth was its GigaCenter, which at the end of the quarter surpassed 300 service provider customers. Calix said that this performance contributed to revenues in the first half of 2015 increasing 3.5 percent compared to the first half of 2014.

Second-quarter revenue was $99.1 million, up 1.1 percent year-over-year from $98 million for the second quarter of 2014.

The company's non-GAAP net income for the second quarter of 2015 was $3.3 million, or 6 cents per fully diluted share, compared to a non-GAAP net income of $5.1 million, or 10 cents per fully diluted share, for the second quarter of 2014.

Shares of Calix were trading at $8.49, up $1.49, or 21.29 percent in Wednesday morning trading on the Nasdaq stock exchange.

For more:
- see the earnings release
- see the earnings transcript (sub req.)

Special report: Wireline telecom earnings in the second quarter of 2015

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