Calix fires up revenue as magnesia delivers and lithium restructure looms

Environmental technology minnow Calix Limited has chalked up a sturdy first half for FY26, pairing double digit revenue growth with sharply improved cash discipline and a clutch of heavyweight commercial alliances.

For a company long associated with promise and platform potential, the latest numbers suggest a more grounded story is emerging - one built on magnesia cash flows and capital light ambitions in lithium and green iron.

Magnesia does the heavy lifting

For the six months to 31 December 2025, product and services revenue rose 21 per cent to $16.3 million, up from $13.5 million in the prior corresponding period . The engine room was magnesia, with revenue jumping 48 per cent to $15.8 million.

Gross margins expanded to 40 per cent from 37 per cent, driving gross profit up 37 per cent to $6.7 million . In a market that has been unforgiving toward early stage industrial tech plays, margin expansion is not just a footnote - it is validation.

Management has been at pains to emphasise focused business delivery, and the cost line bears that out. Operating costs were cut 30 per cent to $15.6 million, while net operating cash outflows shrank 65 per cent to $6.2 million . That is not yet cash flow positive territory, but it is a material narrowing of the gap.

Grant funding and tax incentives contributed $1.3 million for the half , a modest decline year on year but still an important non dilutive funding stream.

Lithium pivot - capital light or capital fright?

The more intriguing development sits in lithium.

Calix consolidated $6.5 million of capital expenditure relating to its share of the unincorporated joint venture for the Mid Stream lithium project during the half, although it made no further cash contribution in the period . Total capex for the half was $7.1 million.

Post balance date, the company signed a binding term sheet with Pilbara Minerals to restructure the Mid Stream project. The proposed deal is expected to remove ongoing funding requirements and execution exposure, release $11.4 million of net capital previously invested and realign lithium commercialisation with Calix’s long term licensing model .

In plain English, Calix appears keen to exit the capital intensive phase and return to what it does best - licensing its electric calcination technology rather than building and funding plants.

Construction of the Mid Stream demonstration plant was completed on budget during the half, marking the company’s first commercial scale electric plant . Technologically significant, yes. Financially, the restructure will determine whether it becomes a balance sheet burden or a springboard.

Blue chip validation gathers pace

If lithium is being de risked, iron and alumina are being quietly advanced with big name partners.

Calix signed a non exclusive Joint Development Agreement with Rio Tinto to support the Zesty Green Iron Demonstration Plant, a deal flagged as contributing more than $35 million of value subject to milestones. A first cash payment of $3 million was received in December following due diligence .

The Zesty project also secured up to $44.9 million in grant funding from the Australian Renewable Energy Agency, subject to matched funding and milestones . Government backing at that scale materially lowers project risk, albeit with the usual strings attached.

Meanwhile, a collaboration with Norsk Hydro will jointly develop Calix’s technology for electrified alumina production. A material testing program and pre FEED study are expected to generate more than $1 million in revenue .

For a company whose pitch rests on decarbonising hard to abate industries, lining up Rio and Hydro is more than a marketing coup. It is industrial validation.

Leilac - progress, but patience required

Calix’s Leilac carbon capture arm completed a pre FEED study for Project ZETA and, after period end, secured a contract to develop carbon dioxide removal materials with Frontier buyers including Google, Stripe and Shopify .

However, financing and permitting for the Leilac 2 project remain in progress, with timing to commence construction still unclear . As ever with first of a kind decarbonisation assets, capital structure and policy settings are as critical as engineering.

Cash flow neutral in sight?

Management expects Calix to be cash flow neutral in calendar 2026, supported by contracted grants, anticipated UK R&D tax incentives, milestone payments from Rio Tinto and continued revenue growth . That guidance excludes the anticipated $11.4 million cash inflow from the Pilbara restructure, which would further bolster liquidity.

Chief executive Phil Hodgson said the company had delivered strongly against its priorities of revenue growth, focused execution and commercial milestones in the first half .

For investors, the narrative is shifting. Calix is no longer just a story about platform potential and planetary slogans. It is beginning to look like a hybrid - part industrial technology licensor, part specialty materials supplier, with blue chip partners underwriting the next stage.

The key questions now are execution and capital discipline. If the lithium restructure proceeds as flagged and Zesty financing locks in, Calix may finally have the financial architecture to match its technological ambition.