Calix Inc. (CALX) shares plummeted 5% in after-hours trading on Tuesday, as investors reacted to concerns about the company's gross margin outlook despite better-than-expected first-quarter financial results.

The company reported Q1 2026 adjusted earnings of $0.40 per diluted share, exceeding analyst estimates of $0.38. Revenue for the quarter rose to $280 million, also beating expectations. However, the stock's decline appears to be driven by worries about gross margin pressure looking forward.

Separately, Calix announced that its board raised the share repurchase authorization by an additional $100 million under the existing program. The company also provided Q2 revenue guidance that was above consensus estimates.