Company: CALX
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0001406666-25-000008
Chunk: 65

Company: CALIX, INC
Filing Date: 2025-02-21
Form: 10-K
Item: Item 1B
Chunk 65
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 a liability for components at suppliers primarily associated with our legacy product family that existed before our shift to an all-platform model. Furthermore, there was a mix shift of hardware sales towards small customers, which generally have higher gross margins, from large- and medium-sized customers. Additionally, we continued to experience growth in our licenses, cloud and managed services, which became a greater percentage of our total revenue since the overall decline in revenue was related to our appliance revenue.

29

Operating Expenses

Sales and Marketing Expenses

Sales and marketing expenses consist of personnel costs, employee sales commissions, marketing programs and events, software tools and travel-related expenses. The following table sets forth our sales and marketing expenses (dollars in thousands):

Years Ended December 31,2024 vs 2023 Change20242023$%Sales and marketing$217,879 $214,564 $3,315 2 %Percent of revenue26 %21 %

Sales and marketing expenses increased by $3.3 million during 2024 compared to 2023 primarily due to increases in stock-based compensation of $3.9 million, marketing expenses of $0.8 million and travel expenses of $0.6 million. These increases were partially offset by decreases of outside services of  $1.2 million and personnel expenses of $0.7 million.

During 2024, sales and marketing expenses as a percentage of revenue increased to 26% from 21% due to lower revenue compared to 2023. We expect our investments in sales and marketing will be relatively flat in absolute dollars in the near term.

Research and Development Expenses

Research and development expenses include personnel costs, outside contractor and consulting services, depreciation on lab equipment, costs of prototypes and overhead allocations. The following table sets forth our research and development expenses (dollars in thousands):

Years Ended December 31,2024 vs 2023 Change20242023$%Research and development$179,870 $177,772 $2,098 1 %Percent of revenue22 %17 %Percent of gross profit40 %34 %

The increase in research and development expenses of $2.1 million during 2024 compared with 2023 was mainly due to increases in depreciation and amortization of $3.0 million, stock-based compensation of $2.1 million, software subscriptions of $1.9 million and personnel expenses of $1.2 million. These increases were partially offset by decreases in prototypes and test equipment expenses of $