Calix software model achieved ‘critical mass,’ says Needham

Needham says Calix (CALX) reported Q4 above consensus and guided Q1 higher than expected as the company continues to execute well against its software-centric model. The Q4 strength stemmed from its mid-sized customers, including international, which implies a return to purchasing by Brightspeed in the U.S. and CityFibre in the UK, the analyst tells investors in a research note. Needham remains confident that Calix can maintain its “strong” market share in U.S. rural broadband and expects an improving fiber deployment market progressing through 2025, independent of delayed Broadband Equity Access and Deployment subsidies. It says Calix’s software model has achieved “critical mass.” Needham keeps a Buy rating on the shares with a $45 price target