What happened

Shares of network communications software company Calix (CALX -3.96%) skyrocketed Tuesday, rising as much as 25% and finishing the trading day up 24.6%.

The stock's rise is likely due to the company's better-than-expected earnings per share for its third quarter.

A chart showing a stock price moving higher

Image source: Getty Images.

So what

Calix reported revenue of $114.7 million -- down from $128.8 million in the year-ago quarter, but higher than the company's $111.7 million of revenue in Q2 2018 and at the high end of management's guidance range for the period.

Calix's EPS was $0.02, or $0.06 on a non-GAAP basis. On average, analysts were expecting non-GAAP EPS of $0.02. 

Notably, Calix's gross margin and operating expenses were in line with management's guidance ranges for the period. But operating cash flow was positive, even though management had guided for negative operating cash flow. In addition, net income was above the company's guidance range for the metric.

Now what

For Calix's fourth quarter, the company expects non-GAAP revenue to be between $122 million and $127 million, representing another sequential increase in its top line. Furthermore, the midpoint of management's guidance range for its non-GAAP gross margin is 47% -- ahead of Calix's non-GAAP gross margin of 46.2% in its third quarter.