Results in Line with
Guidance
Reaffirming Broadband Full Year Revenue
Guidance
Increasing Full Year Video EBITDA
Guidance
SAN
JOSE, Calif., April 29,
2024 /PRNewswire/ -- Harmonic Inc. (NASDAQ: HLIT)
today announced its unaudited results for the first quarter of
2024.
"Our first quarter results were within our guidance range and
largely driven by our Broadband business," said Patrick Harshman, president and chief executive
officer of Harmonic. "Based on these results, our record backlog
and deferred revenue, and our restructuring actions in Video to
address market conditions and improve long-term growth and
profitability, we are reaffirming our full year Broadband revenue
guidance while increasing Video full year EBITDA guidance."
Q1 Financial and Business Highlights
Financial
- Revenue: $122.1 million,
compared to $157.6 million in the
prior year period
- Broadband segment revenue: $78.9 million, compared to $100.4 million in the prior year period
- Video segment revenue: $43.2 million, compared to $57.3 million in the prior year period
- Gross margin: GAAP 51.7% and non-GAAP 52.5%, compared to GAAP
53.3% and non-GAAP 53.9% in the prior year period
- Broadband segment non-GAAP gross margin: 47.5% compared to
50.1% in the prior year period
- Video segment non-GAAP gross margin: 61.6% compared to 60.4% in
the prior year period
- Operating income (loss): GAAP loss $9.5 million and non-GAAP income
$1.2 million, compared to GAAP
income $11.2 million and
non-GAAP income $18.7 million in
the prior year period
- Net income (loss): GAAP net loss $8.1
million and non-GAAP net income of $0.4 million, compared to GAAP net income
$5.1 million and non-GAAP net income
$14.3 million in the prior year
period
- Non-GAAP adjusted EBITDA: $4.1
million income compared to $21.4
million income in the prior year period
- Net income (loss) per share: GAAP net loss per share of
$0.07 and non-GAAP net income per
share of $0.00, compared to GAAP net
income per share of $0.04 and
non-GAAP net income per share of $0.12 in the prior year period
- Record backlog and deferred revenue of $677.8 million
- Cash: $84.3 million,
compared to the $90.9 million in the
prior year period
Business
- Commercially deployed our cOS™ solution with
113 customers, serving 28.6 million cable modems
- Improved Broadband customer diversification, including mix of
business from the Company's two largest customers
- Millicom (NASDAQ: TIGO), through the TIGO® brand,
successfully launched XGS-PON fiber-to-the-home (FTTH) with
Harmonic's industry-leading cOS broadband platform
- Recently introduced state-of-the-art in-stream advertising for
live sports streaming as part of our Video SaaS offering
Select Financial Information
|
|
GAAP
|
|
Non-GAAP
|
Key Financial
Results
|
|
Q1
2024
|
|
Q4
2023
|
|
Q1
2023
|
|
Q1
2024
|
|
Q4
2023
|
|
Q1
2023
|
|
|
(Unaudited, in
millions, except per share data)
|
Net revenue
|
|
$
122.1
|
|
$
167.1
|
|
$
157.6
|
|
*
|
|
*
|
|
*
|
Net income
(loss)
|
|
$
(8.1)
|
|
$
83.8
|
|
$
5.1
|
|
$
0.4
|
|
$
14.7
|
|
$
14.3
|
Net income (loss) per
share
|
|
$
(0.07)
|
|
$
0.72
|
|
$
0.04
|
|
$
0.00
|
|
$
0.13
|
|
$
0.12
|
|
|
|
|
|
|
|
|
|
Other Financial
Information
|
Q1
2024
|
|
Q4
2023
|
|
Q1
2023
|
|
(Unaudited, in
millions)
|
Adjusted EBITDA for the
quarter (1)
|
$
4.1
|
|
$
21.7
|
|
$
21.4
|
Bookings for the
quarter
|
$
146.1
|
|
$
196.5
|
|
$
325.5
|
Backlog and deferred
revenue as of quarter end
|
$
677.8
|
|
$
653.2
|
|
$
623.5
|
Cash and cash
equivalents as of quarter end
|
$
84.3
|
|
$
84.3
|
|
$
90.9
|
|
(1) Adjusted EBITDA is
a Non-GAAP financial measure. Refer to "Preliminary Adjusted EBITDA
Reconciliation" below for a reconciliation to net income (loss),
the most comparable GAAP measure.
|
* Not
applicable
|
Explanations regarding our use of non-GAAP financial measures
and related definitions, and reconciliations of our GAAP and
Non-GAAP measures, are provided in the sections below entitled "Use
of Non-GAAP Financial Measures" and "GAAP to Non-GAAP
Reconciliations".
Financial Guidance
|
Q2 2024 GAAP
Financial Guidance
|
(Unaudited, in
millions, except percentages and per share data)
|
Low
|
|
High
|
Broadband
|
|
Video
|
|
Total
GAAP
|
|
Broadband
|
|
Video
|
|
Total
GAAP
|
Net revenue
|
$
85
|
|
$
40
|
|
$
125
|
|
$
95
|
|
$
45
|
|
$
140
|
Gross margin
%
|
|
|
|
|
51.0 %
|
|
|
|
|
|
52.1 %
|
Gross profit
|
|
|
|
|
$
64
|
|
|
|
|
|
$
73
|
Tax
rate
|
|
|
|
|
23 %
|
|
|
|
|
|
23 %
|
Net loss
|
|
|
|
|
$
(19)
|
|
|
|
|
|
$
(14)
|
Net loss per
share
|
|
|
|
|
$
(0.17)
|
|
|
|
|
|
$
(0.12)
|
Shares (1)
|
|
|
|
|
115.3
|
|
|
|
|
|
115.3
|
|
(1) The guidance
considers the impact of the 2024 Convertible Notes redemption and
assumptions on repurchases during 2024 under the Company's stock
repurchase program.
|
|
2024 GAAP
Financial Guidance
|
(Unaudited, in
millions, except percentages and per share data)
|
Low
|
|
High
|
Broadband
|
|
Video
|
|
Total
GAAP
|
|
Broadband
|
|
Video
|
|
Total
GAAP
|
Net revenue
|
$
460
|
|
$
185
|
|
$
645
|
|
$
500
|
|
$
195
|
|
$
695
|
Gross margin
%
|
|
|
|
|
50.5 %
|
|
|
|
|
|
52.5 %
|
Gross profit
|
|
|
|
|
$
326
|
|
|
|
|
|
$
365
|
Tax
rate
|
|
|
|
|
23 %
|
|
|
|
|
|
23 %
|
Net income
|
|
|
|
|
$
18
|
|
|
|
|
|
$
40
|
Net income per
share
|
|
|
|
|
$
0.15
|
|
|
|
|
|
$
0.34
|
Shares (1)
|
|
|
|
|
118.5
|
|
|
|
|
|
118.5
|
|
(1) The guidance
considers the impact of the 2024 Convertible Notes redemption and
assumptions on repurchases during 2024 under the Company's stock
repurchase program. Diluted shares assumes stock price at $12.76
(Q1 2024 average price).
|
|
Q2 2024 Non-GAAP
Financial Guidance (1)
|
(Unaudited, in
millions, except percentages and per share data)
|
Low
|
|
High
|
Broadband
|
|
Video
|
|
Total
|
|
Broadband
|
|
Video
|
|
Total
|
Gross margin
%
|
47.0 %
|
|
62.0 %
|
|
51.8 %
|
|
48.0 %
|
|
63.0 %
|
|
52.9 %
|
Gross profit
|
$
40
|
|
$
25
|
|
$
65
|
|
$
46
|
|
$
28
|
|
$
74
|
Adjusted
EBITDA(2)
|
$
11
|
|
$
(5)
|
|
$
6
|
|
$
15
|
|
$
(2)
|
|
$
13
|
Tax
rate
|
|
|
|
|
19 %
|
|
|
|
|
|
19 %
|
Net income per
share
|
|
|
|
|
$
—
|
|
|
|
|
|
$
0.05
|
Shares (3)
|
|
|
|
|
116.8
|
|
|
|
|
|
116.8
|
|
(1) Refer to "Use of
Non-GAAP Financial Measures" and "GAAP to
Non-GAAP Reconciliations on Financial Guidance"
below.
|
(2) Refer to "Adjusted
EBITDA Reconciliation on Financial Guidance" below for a
reconciliation to net income (loss), the most comparable GAAP
measure.
|
(3) The guidance
considers the impact of the 2024 Convertible Notes redemption and
assumptions on repurchases during 2024 under the Company's stock
repurchase program. Diluted shares assumes stock price at $12.76
(Q1 2024 average price).
|
|
2024 Non-GAAP
Financial Guidance (1)
|
(Unaudited, in
millions, except percentages and per share data)
|
Low
|
|
High
|
Broadband
|
|
Video
|
|
Total
|
|
Broadband
|
|
Video
|
|
Total
|
Gross margin
%
|
46.5 %
|
|
62.0 %
|
|
51.0 %
|
|
48.5 %
|
|
64.0 %
|
|
52.9 %
|
Gross profit
|
$
214
|
|
$
115
|
|
$
329
|
|
$
243
|
|
$
125
|
|
$
368
|
Adjusted
EBITDA(2)
|
$
95
|
|
$
—
|
|
$
95
|
|
$
119
|
|
$
5
|
|
$
124
|
Tax
rate
|
|
|
|
|
19 %
|
|
|
|
|
|
19 %
|
Net income per share
(3)
|
|
|
|
|
$
0.51
|
|
|
|
|
|
$
0.71
|
Shares (3)
|
|
|
|
|
118.5
|
|
|
|
|
|
118.5
|
|
(1) Refer to "Use of
Non-GAAP Financial Measures" and "GAAP to
Non-GAAP Reconciliations on Financial Guidance"
below.
|
(2) Refer to "Adjusted
EBITDA Reconciliation on Financial Guidance" below for a
reconciliation to net income, the most comparable GAAP
measure.
|
(3) The guidance
considers the impact of the 2024 Convertible Notes redemption and
assumptions on repurchases during 2024 under the Company's stock
repurchase program. Diluted shares assumes stock price at $12.76
(Q1 2024 average price).
|
Conference Call Information
Harmonic will host a conference call to discuss its financial
results at 2:00 p.m. PT (5:00 p.m. ET)
on Monday, April 29, 2024. The live webcast will be
available on the Harmonic Investor Relations website at
http://investor.harmonicinc.com. To participate via telephone,
please register in advance using this link,
https://register.vevent.com/register/BI25a8c58a23b84db08431619b5ef84f3d.
A replay will be available after 5:00 p.m.
PT on the same web site.
About Harmonic Inc.
Harmonic (NASDAQ: HLIT), the worldwide leader in virtualized
broadband and video delivery solutions, enables media companies and
service providers to deliver ultra-high-quality video streaming and
broadcast services to consumers globally. The company
revolutionized broadband networking via the industry's first
virtualized broadband solution, enabling cable operators to more
flexibly deploy gigabit internet service to consumers' homes and
mobile devices. Whether simplifying OTT video delivery via
innovative cloud and software platforms, or powering the delivery
of gigabit internet cable services, Harmonic is changing the way
media companies and service providers monetize live and on-demand
content on every screen. More information is available at
www.harmonicinc.com.
Legal Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including
statements related to our expectations regarding: net revenue,
gross margins, operating expenses, operating income (loss),
Adjusted EBITDA, tax expense and tax rate, and net income (loss)
per diluted share. Our expectations regarding these matters may not
materialize, and actual results in future periods are subject to
risks and uncertainties that could cause actual results to differ
materially from those projected. These risks include, in no
particular order, the following: the market and technology trends
underlying our Video and Broadband businesses will not continue to
develop in their current direction or pace; the possibility that
our products will not generate sales that are commensurate with our
expectations or that our cost of revenue or operating expenses may
exceed our expectations; the impact of general economic conditions
on our sales and operations; the mix of products and services sold
in various geographies and the effect it has on gross margins;
delays or decreases in capital spending in the cable, satellite,
telco, broadcast and media industries; customer concentration and
consolidation; our ability to develop new and enhanced products in
a timely manner and market acceptance of our new or existing
products; losses of one or more key customers; risks associated
with our international operations; exchange rate fluctuations of
the currencies in which we conduct business; risks associated with
our cOS™ and VOS product solutions;
dependence on various video and broadband industry trends;
inventory management; the lack of timely availability or the impact
of increases in the prices of parts or raw materials necessary to
produce our products; the effect of competition, on both revenue
and gross margins; difficulties associated with rapid technological
changes in our markets; risks associated with unpredictable sales
cycles; our dependence on contract manufacturers and sole or
limited source suppliers; and the impact on our business of natural
disasters. The forward-looking statements contained in this press
release are also subject to other risks and uncertainties,
including those more fully described in Harmonic's filings with the
Securities and Exchange Commission, including our most recent
Annual Report on Form 10-K for the year ended December 31, 2023, our most recent Quarterly
Report on Form 10-Q and our Current Reports on Form 8-K. The
forward-looking statements in this press release are based on
information available to the Company as of the date hereof, and
Harmonic disclaims any obligation to update any forward-looking
statements.
Use of Non-GAAP Financial Measures
The Company reports its financial results in accordance with
accounting principles generally accepted in the United States ("GAAP" or referred to
herein as "reported"). However, management believes that certain
non-GAAP financial measures provide management and other users with
additional meaningful financial information that should be
considered when assessing our ongoing performance. Our management
regularly uses our supplemental non-GAAP financial measures
internally to understand, manage and evaluate our business,
establish operating budgets, set internal measurement targets and
make operating decisions.
These non-GAAP measures are not in accordance with, or an
alternative for, measures prepared in accordance with generally
accepted accounting principles and may be different from non-GAAP
measures used by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting rules
or principles. The Company believes that non-GAAP measures have
limitations in that they do not reflect all of the amounts
associated with Harmonic's results of operations as determined in
accordance with GAAP and that these measures should only be used to
evaluate Harmonic's results of operations in conjunction with the
corresponding GAAP measures.
The Company believes that the presentation of non-GAAP measures,
when shown in conjunction with the corresponding GAAP measures,
provides useful information to investors and management regarding
financial and business trends relating to its financial condition
and its historical and projected results of operations. Non-GAAP
financial measures should be viewed in addition to, and not as an
alternative to, the Company's reported results prepared in
accordance with GAAP.
The non-GAAP measures presented here are: Gross profit,
operating expenses, income (loss) from operations, non-operating
expenses and net income (loss), Adjusted EBITDA (including those
amounts as a percentage of revenue) and net income (loss)
per diluted share. The presentation of non-GAAP information is
not intended to be considered in isolation or as a substitute for
results prepared in accordance with GAAP, and is not necessarily
comparable to non-GAAP results published by other companies. A
reconciliation of the historical non-GAAP financial measures
discussed in this press release to the most directly comparable
historical GAAP financial measures is included with the financial
statements provided with this press release. The non-GAAP
adjustments described below have historically been excluded from
our GAAP financial measures.
Our non-GAAP financial measures reflect adjustments based on the
following items, as well as the related income tax effects:
Stock-based compensation - Although stock-based
compensation is a key incentive offered to our employees, we
continue to evaluate our business performance excluding stock-based
compensation expenses. We believe that management is limited in its
ability to project the impact stock-based compensation would have
on our operating results. In addition, for comparability purposes,
we believe it is useful to provide a non-GAAP financial measure
that excludes stock-based compensation in order to better
understand the long-term performance of our core business and to
facilitate the comparison of our results to the results of our peer
companies.
Restructuring and related charges - Harmonic
from time to time incurs restructuring
charges which primarily consist of employee severance, one-time
termination benefits related to the reduction of its workforce,
lease exit costs, and other costs. These charges are
associated with material business shifts.
We exclude these items because we do not believe they are
reflective of our ongoing long-term
business and operating results.
Non-cash interest expense and other expenses related to
convertible notes and other debt - We record the
amortization of issuance costs as non-cash interest expense. We
believe that excluding these costs provides meaningful supplemental
information regarding operational performance and liquidity, along
with enhancing investors' ability to view the Company's results
from management's perspective. In addition, we believe excluding
these costs from the non-GAAP measures facilitates comparisons to
our historical operating results and comparisons to peer company
operating results.
Discrete tax items and tax effect of non-GAAP adjustments
- The income tax effect of non-GAAP adjustments relates to the
tax effect of the adjustments that we incorporate into non-GAAP
financial measures in order to provide a more meaningful measure of
non-GAAP net income.
Depreciation - Depreciation expense, along with interest,
tax and stock-based compensation expense, and restructuring
charges, is excluded from Adjusted EBITDA because we do not believe
depreciation and the other items relate to the ordinary course of
our business or are reflective of our underlying business
performance.
Non-recurring advisory fees - There were
non-recurring costs that we excluded from non-GAAP results relating
to professional accounting, tax and legal fees associated with
strategic corporate initiatives, including our recently concluded
Video business strategic review.
Impairment losses - There were impairment losses
that we excluded from non-GAAP results relating to reduction of our
leased office space, as we continue to adapt to the changing
dynamics of work and seek to optimize value for our business.
Harmonic
Inc.
|
Preliminary
Condensed Consolidated Balance Sheets
|
(Unaudited, in
thousands, except par value)
|
|
|
March 29,
2024
|
|
December 31,
2023
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$
84,305
|
|
$
84,269
|
Accounts
receivable, net
|
105,854
|
|
141,531
|
Inventories
|
86,631
|
|
83,982
|
Prepaid
expenses and other current assets
|
24,019
|
|
20,950
|
Total current
assets
|
300,809
|
|
330,732
|
Property and equipment,
net
|
35,239
|
|
36,683
|
Operating lease
right-of-use assets
|
19,420
|
|
20,817
|
Goodwill
|
238,287
|
|
239,150
|
Deferred income
taxes
|
108,418
|
|
104,707
|
Other non-current
assets
|
38,497
|
|
36,117
|
Total assets
|
$
740,670
|
|
$
768,206
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Convertible debt,
current
|
$
115,109
|
|
$
114,880
|
Other debts,
current
|
4,813
|
|
4,918
|
Accounts
payable
|
43,844
|
|
38,562
|
Deferred
revenue
|
51,500
|
|
46,217
|
Operating lease
liabilities, current
|
6,507
|
|
6,793
|
Other current
liabilities
|
53,045
|
|
61,024
|
Total current
liabilities
|
274,818
|
|
272,394
|
Other debts,
non-current
|
10,271
|
|
10,495
|
Operating lease
liabilities, non-current
|
17,711
|
|
18,965
|
Other non-current
liabilities
|
28,716
|
|
29,478
|
Total
liabilities
|
331,516
|
|
331,332
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock,
$0.001 par value, 5,000 shares authorized; no shares issued or
outstanding
|
—
|
|
—
|
Common stock, $0.001
par value, 150,000 shares authorized; 111,946 and 112,407 shares
issued and outstanding at March 29, 2024 and December 31,
2023, respectively
|
112
|
|
112
|
Additional paid-in
capital
|
2,410,094
|
|
2,405,043
|
Accumulated
deficit
|
(1,992,339)
|
|
(1,962,575)
|
Accumulated other
comprehensive loss
|
(8,713)
|
|
(5,706)
|
Total stockholders'
equity
|
409,154
|
|
436,874
|
Total liabilities and
stockholders' equity
|
$
740,670
|
|
$
768,206
|
Harmonic
Inc.
|
Preliminary
Condensed Consolidated Statements of Operations
|
(Unaudited, in
thousands, except per share data)
|
|
|
Three Months
Ended
|
|
March 29,
2024
|
|
March 31,
2023
|
Revenue:
|
|
|
|
Appliance and
integration
|
$
81,595
|
|
$
114,794
|
SaaS and
service
|
40,465
|
|
42,855
|
Total net
revenue
|
122,060
|
|
157,649
|
Cost of
revenue:
|
|
|
|
Appliance and
integration
|
43,074
|
|
59,748
|
SaaS and
service
|
15,905
|
|
13,847
|
Total cost of
revenue
|
58,979
|
|
73,595
|
Total gross
profit
|
63,081
|
|
84,054
|
Operating
expenses:
|
|
|
|
Research and
development
|
30,705
|
|
33,509
|
Selling, general and
administrative
|
38,865
|
|
39,282
|
Restructuring and
related charges
|
3,037
|
|
83
|
Total operating
expenses
|
72,607
|
|
72,874
|
Income (loss) from
operations
|
(9,526)
|
|
11,180
|
Interest expense,
net
|
(723)
|
|
(706)
|
Other expense,
net
|
(289)
|
|
(293)
|
Income (loss) before
income taxes
|
(10,538)
|
|
10,181
|
Provision for (benefit
from) income taxes
|
(2,449)
|
|
5,088
|
Net income
(loss)
|
$
(8,089)
|
|
$
5,093
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
Basic
|
$
(0.07)
|
|
$
0.05
|
Diluted
|
$
(0.07)
|
|
$
0.04
|
Weighted average shares
outstanding:
|
|
|
|
Basic
|
112,350
|
|
110,794
|
Diluted
|
112,350
|
|
117,758
|
Harmonic
Inc.
|
Preliminary
Condensed Consolidated Statements of Cash Flows
|
(Unaudited, in
thousands)
|
|
|
Three Months
Ended
|
|
March 29,
2024
|
|
March 31,
2023
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
(8,089)
|
|
$
5,093
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
Depreciation
|
3,085
|
|
3,030
|
Stock-based
compensation
|
6,923
|
|
7,424
|
Foreign currency
remeasurement
|
(1,108)
|
|
1,290
|
Deferred income taxes,
net
|
(3,806)
|
|
547
|
Provision for excess
and obsolete inventories
|
757
|
|
2,027
|
Other
adjustments
|
240
|
|
703
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
35,187
|
|
20,530
|
Inventories
|
(4,571)
|
|
(10,547)
|
Other
assets
|
(5,041)
|
|
(2,566)
|
Accounts
payable
|
5,988
|
|
(12,507)
|
Deferred
revenues
|
5,071
|
|
1,721
|
Other
liabilities
|
(7,816)
|
|
(10,475)
|
Net cash provided by
operating activities
|
26,820
|
|
6,270
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property
and equipment
|
(1,911)
|
|
(2,331)
|
Net cash used in
investing activities
|
(1,911)
|
|
(2,331)
|
Cash flows from
financing activities:
|
|
|
|
Payments for debt
issuance costs
|
(327)
|
|
—
|
Repurchase of common
stock
|
(21,675)
|
|
—
|
Repayment of other
debts
|
—
|
|
(152)
|
Proceeds from common
stock issued to employees
|
3,542
|
|
3,085
|
Taxes paid related to
net share settlement of equity awards
|
(5,413)
|
|
(6,353)
|
Net cash used in
financing activities
|
(23,873)
|
|
(3,420)
|
Effect of exchange rate
changes on cash and cash equivalents
|
(1,000)
|
|
772
|
Net increase in cash
and cash equivalents
|
36
|
|
1,291
|
Cash and cash
equivalents at beginning of period
|
84,269
|
|
89,586
|
Cash and cash
equivalents at end of period
|
$
84,305
|
|
$
90,877
|
Harmonic
Inc.
|
Preliminary GAAP
Revenue Information
|
(Unaudited, in
thousands, except percentages)
|
|
|
Three Months
Ended
|
|
March 29,
2024
|
|
December 31,
2023
|
|
March 31,
2023
|
Geography
|
|
|
|
|
|
|
|
|
Americas
|
$
93,031
|
76 %
|
|
$
129,406
|
77 %
|
|
$
115,666
|
73 %
|
EMEA
|
23,560
|
19 %
|
|
30,041
|
18 %
|
|
32,941
|
21 %
|
APAC
|
5,469
|
5 %
|
|
7,645
|
5 %
|
|
9,042
|
6 %
|
Total
|
$
122,060
|
100 %
|
|
$
167,092
|
100 %
|
|
$
157,649
|
100 %
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
|
|
|
Service
Provider
|
$
86,693
|
71 %
|
|
$
128,566
|
77 %
|
|
$
117,989
|
75 %
|
Broadcast and
Media
|
35,367
|
29 %
|
|
38,526
|
23 %
|
|
39,660
|
25 %
|
Total
|
$
122,060
|
100 %
|
|
$
167,092
|
100 %
|
|
$
157,649
|
100 %
|
|
|
|
|
|
|
|
|
|
Harmonic
Inc.
|
Preliminary Segment
Information
|
(Unaudited, in
thousands, except percentages)
|
|
|
Three Months Ended
March 29, 2024
|
|
Broadband
|
|
|
Video
|
|
|
Total Segment
Measures
|
|
|
Adjustments
(1)
|
|
Consolidated
GAAP
Measures
|
Net
revenue
|
$
78,897
|
|
|
$
43,163
|
|
|
$ 122,060
|
|
|
$
—
|
|
$ 122,060
|
Gross
profit
|
37,494
|
(1)
|
|
26,569
|
(1)
|
|
64,063
|
(1)
|
|
(982)
|
|
63,081
|
Gross margin
%
|
47.5 %
|
(1)
|
|
61.6 %
|
(1)
|
|
52.5 %
|
(1)
|
|
|
|
51.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2023
|
|
Broadband
|
|
|
Video
|
|
|
Total Segment
Measures
|
|
|
Adjustments
(1)
|
|
Consolidated
GAAP
Measures
|
Net
revenue
|
$ 115,229
|
|
|
$
51,863
|
|
|
$ 167,092
|
|
|
$
—
|
|
$ 167,092
|
Gross
profit
|
48,803
|
(1)
|
|
33,491
|
(1)
|
|
82,294
|
(1)
|
|
(427)
|
|
81,867
|
Gross margin
%
|
42.4 %
|
(1)
|
|
64.6 %
|
(1)
|
|
49.3 %
|
(1)
|
|
|
|
49.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2023
|
|
Broadband
|
|
|
Video
|
|
|
Total Segment
Measures
|
|
|
Adjustments
(1)
|
|
Consolidated
GAAP
Measures
|
Net
revenue
|
$ 100,351
|
|
|
$
57,298
|
|
|
$ 157,649
|
|
|
$
—
|
|
$ 157,649
|
Gross
profit
|
50,290
|
(1)
|
|
34,614
|
(1)
|
|
84,904
|
(1)
|
|
(850)
|
|
84,054
|
Gross margin
%
|
50.1 %
|
(1)
|
|
60.4 %
|
(1)
|
|
53.9 %
|
(1)
|
|
|
|
53.3 %
|
|
(1) Segment gross
margin and segment gross profit are Non-GAAP financial measures.
Refer to "Use of Non-GAAP Financial Measures" above and "GAAP to
Non-GAAP Reconciliations" below.
|
Harmonic
Inc.
|
GAAP to
Non-GAAP Reconciliations (Unaudited)
|
(in thousands,
except percentages and per share data)
|
|
|
Three Months Ended
March 29, 2024
|
|
Revenue
|
|
Gross
Profit
|
|
Total
Operating
Expense
|
|
Income
(Loss) from
Operations
|
|
Total Non-
operating
Expense, net
|
|
Net Income
(Loss)
|
GAAP
|
$ 122,060
|
|
$ 63,081
|
|
$ 72,607
|
|
$ (9,526)
|
|
$
(1,012)
|
|
$ (8,089)
|
Stock-based
compensation
|
—
|
|
522
|
|
(6,401)
|
|
6,923
|
|
—
|
|
6,923
|
Restructuring and
related charges
|
—
|
|
460
|
|
(3,037)
|
|
3,497
|
|
—
|
|
3,497
|
Non-recurring advisory
fees
|
—
|
|
—
|
|
(349)
|
|
349
|
|
—
|
|
349
|
Loss on fixed asset
disposal
|
—
|
|
—
|
|
—
|
|
—
|
|
11
|
|
11
|
Non-cash interest and
other expenses related to convertible notes
|
—
|
|
—
|
|
—
|
|
—
|
|
229
|
|
229
|
Discrete tax items and
tax effect of non-GAAP adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,538)
|
Total
adjustments
|
—
|
|
982
|
|
(9,787)
|
|
10,769
|
|
240
|
|
8,471
|
Non-GAAP
|
$ 122,060
|
|
$ 64,063
|
|
$ 62,820
|
|
$
1,243
|
|
$
(772)
|
|
$
382
|
As a % of revenue
(GAAP)
|
|
|
51.7 %
|
|
59.5 %
|
|
(7.8) %
|
|
(0.8) %
|
|
(6.6) %
|
As a % of revenue
(Non-GAAP)
|
|
|
52.5 %
|
|
51.5 %
|
|
1.0 %
|
|
(0.6) %
|
|
0.3 %
|
Diluted net income
(loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
$
(0.07)
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
$
0.00
|
Shares used in per
share calculation:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
112,350
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
118,107
|
|
Three Months Ended
December 31, 2023
|
|
Revenue
|
|
Gross
Profit
|
|
Total
Operating
Expense
|
|
Income from
Operations
|
|
Total Non-
operating
Expense, net
|
|
Net
Income
|
GAAP
|
$ 167,092
|
|
$ 81,867
|
|
$ 72,234
|
|
$
9,633
|
|
$
(820)
|
|
$ 83,841
|
Stock-based
compensation
|
—
|
|
454
|
|
(6,151)
|
|
6,605
|
|
—
|
|
6,605
|
Restructuring and
related charges
|
—
|
|
(27)
|
|
—
|
|
(27)
|
|
—
|
|
(27)
|
Non-recurring advisory
fees
|
—
|
|
—
|
|
(2,702)
|
|
2,702
|
|
—
|
|
2,702
|
Non-cash interest and
other expenses related to convertible notes
|
—
|
|
—
|
|
—
|
|
—
|
|
233
|
|
233
|
Discrete tax items and
tax effect of non-GAAP adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(78,693)
|
Total
adjustments
|
—
|
|
427
|
|
(8,853)
|
|
9,280
|
|
233
|
|
(69,180)
|
Non-GAAP
|
$ 167,092
|
|
$ 82,294
|
|
$ 63,381
|
|
$ 18,913
|
|
$
(587)
|
|
$ 14,661
|
As a % of revenue
(GAAP)
|
|
|
49.0 %
|
|
43.2 %
|
|
5.8 %
|
|
(0.5) %
|
|
50.2 %
|
As a % of revenue
(Non-GAAP)
|
|
|
49.3 %
|
|
37.9 %
|
|
11.3 %
|
|
(0.4) %
|
|
8.8 %
|
Diluted net income
per share:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
$
0.72
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
$
0.13
|
Shares used in per
share calculation:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP and
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
115,691
|
|
Three Months Ended
March 31, 2023
|
|
Revenue
|
|
Gross
Profit
|
|
Total
Operating
Expense
|
|
Income from
Operations
|
|
Total Non-
operating
Expense, net
|
|
Net
Income
|
GAAP
|
$ 157,649
|
|
$ 84,054
|
|
$ 72,874
|
|
$ 11,180
|
|
$
(999)
|
|
$
5,093
|
Stock-based
compensation
|
—
|
|
850
|
|
(6,574)
|
|
7,424
|
|
—
|
|
7,424
|
Restructuring and
related charges
|
—
|
|
—
|
|
(83)
|
|
83
|
|
—
|
|
83
|
Non-cash interest and
other expenses related to convertible notes
|
—
|
|
—
|
|
—
|
|
—
|
|
223
|
|
223
|
Discrete tax items and
tax effect of non-GAAP adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,506
|
Total
adjustments
|
—
|
|
850
|
|
(6,657)
|
|
7,507
|
|
223
|
|
9,236
|
Non-GAAP
|
$ 157,649
|
|
$ 84,904
|
|
$ 66,217
|
|
$ 18,687
|
|
$
(776)
|
|
$ 14,329
|
As a % of revenue
(GAAP)
|
|
|
53.3 %
|
|
46.2 %
|
|
7.1 %
|
|
(0.6) %
|
|
3.2 %
|
As a % of revenue
(Non-GAAP)
|
|
|
53.9 %
|
|
42.0 %
|
|
11.9 %
|
|
(0.5) %
|
|
9.1 %
|
Diluted net income
per share:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
$
0.04
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
$
0.12
|
Shares used in per
share calculation:
|
|
|
|
|
|
|
|
|
|
|
|
GAAP and
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
117,758
|
Harmonic
Inc.
|
Calculation of
Adjusted EBITDA by Segment (Unaudited)
|
(In thousands,
except percentages)
|
|
|
Three Months Ended
March 29, 2024
|
|
Broadband
|
|
Video
|
Income (loss) from
operations (1)
|
$
8,594
|
|
$
(7,351)
|
Depreciation
|
1,986
|
|
1,099
|
Other non-operating
expenses, net
|
(179)
|
|
(99)
|
Adjusted
EBITDA(2)
|
$
10,401
|
|
$
(6,351)
|
Revenue
|
$
78,897
|
|
$
43,163
|
Adjusted EBITDA
margin % (2)
|
13.2 %
|
|
(14.7) %
|
|
|
|
|
|
Three Months Ended
December 31, 2023
|
|
Broadband
|
|
Video
|
Income (loss) from
operations (1)
|
$
20,268
|
|
$
(1,355)
|
Depreciation
|
1,794
|
|
1,283
|
Other non-operating
expenses, net
|
(160)
|
|
(89)
|
Adjusted
EBITDA(2)
|
$
21,902
|
|
$
(161)
|
Revenue
|
$
115,229
|
|
$
51,863
|
Adjusted EBITDA
margin % (2)
|
19.0 %
|
|
(0.3) %
|
|
|
|
|
|
Three Months Ended
March 31, 2023
|
|
Broadband
|
|
Video
|
Income (loss) from
operations (1)
|
$
20,113
|
|
$
(1,426)
|
Depreciation
|
1,644
|
|
1,386
|
Other non-operating
expenses, net
|
(171)
|
|
(122)
|
Adjusted
EBITDA(2)
|
$
21,586
|
|
$
(162)
|
Revenue
|
$
100,351
|
|
$
57,298
|
Adjusted EBITDA
margin % (2)
|
21.5 %
|
|
(0.3) %
|
|
(1) Refer to "Use of
Non-GAAP Financial Measures" and "GAAP to
Non-GAAP Reconciliations" above.
|
(2) Adjusted EBITDA and
Adjusted EBITDA margin are Non-GAAP financial measures. Refer below
for the reconciliation of consolidated adjusted EBITDA to net
income (loss), the most directly comparable GAAP
measure.
|
Harmonic
Inc.
|
Preliminary Loss to
Consolidated Segment Adjusted EBITDA Reconciliation
(Unaudited)
|
(In thousands,
except percentages)
|
|
|
Three Months
Ended
|
|
March 29,
2024
|
|
December 31,
2023
|
|
March 31,
2023
|
Net income (loss)
(GAAP)
|
$
(8,089)
|
|
$
83,841
|
|
$
5,093
|
Provision for (benefit
from) income taxes
|
(2,449)
|
|
(75,028)
|
|
5,088
|
Interest expense,
net
|
723
|
|
571
|
|
706
|
Depreciation
|
3,085
|
|
3,077
|
|
3,030
|
EBITDA
|
(6,730)
|
|
12,461
|
|
13,917
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
Stock-based
compensation
|
6,923
|
|
6,605
|
|
7,424
|
Restructuring and
related charges
|
3,497
|
|
(27)
|
|
83
|
Non-recurring advisory
fees
|
349
|
|
2,702
|
|
—
|
Loss on fixed asset
disposal
|
11
|
|
—
|
|
—
|
Total consolidated
segment adjusted EBITDA (Non-GAAP)
|
$
4,050
|
|
$
21,741
|
|
$
21,424
|
Revenue
|
$
122,060
|
|
$
167,092
|
|
$
157,649
|
Net income (loss)
margin (GAAP)
|
(6.6) %
|
|
50.2 %
|
|
3.2 %
|
Consolidated segment
Adjusted EBITDA margin (Non-GAAP)
|
3.3 %
|
|
13.0 %
|
|
13.6 %
|
Harmonic
Inc.
|
GAAP to
Non-GAAP Reconciliations on Financial Guidance
(Unaudited)
|
(In millions, except
percentages and per share data)
|
|
|
Q2 2024 Financial
Guidance (1)
|
|
Revenue
|
|
Gross
Profit
|
|
Total Operating
Expense
|
|
Income from
Operations
|
|
Net Income
(Loss)
|
GAAP
|
$
125
|
to
|
$
140
|
|
$ 64
|
to
|
$ 73
|
|
$ 80
|
to
|
$ 82
|
|
$
(16)
|
to
|
$ (9)
|
|
$
(19)
|
to
|
$
(14)
|
Stock-based
compensation expense
|
—
|
|
—
|
|
(6)
|
|
6
|
|
6
|
Restructuring and
related charges
|
—
|
|
1
|
|
(12)
|
|
13
|
|
13
|
Impairment
losses
|
—
|
|
—
|
|
—
|
|
—
|
|
6
|
Tax effect of non-GAAP
adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
(6)
|
to
|
(5)
|
Total
adjustments
|
—
|
|
1
|
|
(18)
|
|
19
|
|
19
|
to
|
20
|
Non-GAAP
|
$
125
|
to
|
$
140
|
|
$ 65
|
to
|
$ 74
|
|
$ 62
|
to
|
$ 64
|
|
$ 3
|
to
|
$ 10
|
|
$ —
|
to
|
$ 6
|
As a % of revenue
(GAAP)
|
|
|
|
|
51.0 %
|
to
|
52.1 %
|
|
64.0 %
|
to
|
58.6 %
|
|
(12.8) %
|
to
|
(6.4) %
|
|
(15.4) %
|
to
|
(9.9) %
|
As a % of revenue
(Non-GAAP)
|
|
|
|
|
51.8 %
|
to
|
52.9 %
|
|
49.6 %
|
to
|
45.7 %
|
|
2.2 %
|
to
|
7.1 %
|
|
0.2 %
|
to
|
4.4 %
|
Diluted net income
(loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ (0.17)
|
to
|
$ (0.12)
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ —
|
to
|
$ 0.05
|
Shares used in per
share calculation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
115.3
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
116.8
|
|
(1) Components may not
sum to total due to rounding.
|
|
2024 Financial
Guidance (1)
|
|
Revenue
|
|
Gross
Profit
|
|
Total Operating
Expense
|
Income from
Operations
|
|
Net
Income
|
GAAP
|
$
645
|
to
|
$
695
|
|
$
326
|
to
|
$
365
|
|
$
288
|
to
|
$
298
|
$ 38
|
to
|
$ 67
|
|
$ 18
|
to
|
$ 40
|
Stock-based
compensation expense
|
—
|
|
1
|
|
(27)
|
28
|
|
28
|
Restructuring and
related charges
|
—
|
|
2
|
|
(15)
|
17
|
|
17
|
Impairment
loss
|
—
|
|
—
|
|
—
|
—
|
|
6
|
Non-cash interest and
other expenses related to convertible notes
|
—
|
|
—
|
|
—
|
—
|
|
1
|
Tax effect of non-GAAP
adjustments
|
—
|
|
—
|
|
—
|
—
|
|
(9)
|
to
|
(8)
|
Total
adjustments
|
—
|
|
3
|
|
(42)
|
45
|
|
43
|
to
|
44
|
Non-GAAP
|
$
645
|
to
|
$
695
|
|
$
329
|
to
|
$
368
|
|
$
246
|
to
|
$
256
|
$ 83
|
to
|
$
112
|
|
$ 61
|
to
|
$ 84
|
As a % of revenue
(GAAP)
|
|
|
|
|
50.5 %
|
to
|
52.5 %
|
|
44.7 %
|
to
|
42.9 %
|
5.9 %
|
to
|
9.6 %
|
|
2.8 %
|
to
|
5.8 %
|
As a % of revenue
(Non-GAAP)
|
|
|
|
|
51.0 %
|
to
|
52.9 %
|
|
38.1 %
|
to
|
36.8 %
|
12.9 %
|
to
|
16.1 %
|
|
9.5 %
|
to
|
12.1 %
|
Diluted net income
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 0.15
|
to
|
$ 0.34
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ 0.51
|
to
|
$ 0.71
|
Shares used in per
share calculation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP and
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
118.5
|
|
(1) Components may not
sum to total due to rounding.
|
Harmonic
Inc.
|
Calculation of
Adjusted EBITDA by Segment on Financial Guidance
(Unaudited) (1)
|
(In
millions)
|
|
|
Q2 2024 Financial
Guidance
|
|
Broadband
|
|
Video
|
Income (loss) from
operations (2)
|
$
9
|
to
|
$
14
|
|
$
(6)
|
to
|
$
(4)
|
Depreciation
|
2
|
|
2
|
|
1
|
|
1
|
Other non-operating
expenses
|
—
|
|
(1)
|
|
—
|
|
1
|
Segment adjusted
EBITDA(3)
|
$
11
|
to
|
$
15
|
|
$
(5)
|
to
|
$
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 Financial
Guidance
|
|
Broadband
|
|
Video
|
Income (loss) from
operations (2)
|
$
88
|
to
|
$
112
|
|
$
(5)
|
to
|
$
—
|
Depreciation
|
8
|
|
8
|
|
5
|
|
5
|
Other non-operating
expenses
|
(1)
|
|
(1)
|
|
—
|
|
—
|
Segment adjusted
EBITDA(3)
|
$
95
|
to
|
$
119
|
|
$
—
|
to
|
$
5
|
|
(1) Components may not
sum to total due to rounding.
|
(2) Refer to "Use of
Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations
on Financial Guidance" above.
|
(3) Segment Adjusted
EBITDA is a Non-GAAP financial measure. Refer below for the "Net
income (loss) to consolidated segment Adjusted EBITDA
reconciliation on Financial Guidance".
|
Harmonic
Inc.
|
Net Income (Loss) to
Consolidated Segment Adjusted EBITDA Reconciliation on Financial
Guidance (Unaudited) (1)
|
(In
millions)
|
|
|
Q2 2024
Financial
Guidance
|
|
2024 Financial
Guidance
|
Net income (loss)
(GAAP)
|
$ (19)
|
to
|
$ (14)
|
|
18
|
to
|
$ 40
|
Provision for income
taxes
|
(6)
|
|
(4)
|
|
5
|
|
12
|
Interest expense,
net
|
3
|
|
3
|
|
8
|
|
8
|
Depreciation
|
3
|
|
3
|
|
13
|
|
13
|
EBITDA
|
(19)
|
to
|
(12)
|
|
44
|
to
|
73
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
Stock-based
compensation
|
6
|
|
6
|
|
28
|
|
28
|
Restructuring and
related charges
|
13
|
|
13
|
|
17
|
|
17
|
Impairment
loss
|
6
|
|
6
|
|
6
|
|
6
|
Total consolidated
segment adjusted EBITDA (Non-GAAP) (2)
|
$
6
|
to
|
$ 13
|
|
$ 95
|
to
|
$ 124
|
|
(1) Components may not
sum to total due to rounding.
|
(2) Consolidated
Segment adjusted EBITDA is a Non-GAAP financial measure. Refer to
"Use of Non-GAAP Financial Measures" above.
|
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SOURCE Harmonic Inc.