HLIT

Image source: The Motley Fool. Wednesday, Aug. 12, 2026 at 5:00 p.m. ET President and Chief Executive Officer - Nimrod Ben-Natan Chief Financial Officer - Walter Jankovic Investor Relations - David Hanover Operator: Welcome to the Second Quarter 2026 Harmonic Earnings Conference Call. My name is Lisa, and I will be your operator for today's call. [Operator Instructions] I would now like to turn the call over to David Hanover, Investor Relations. David, you may begin. David Hanover: Thank you, operator. Hello, everyone, and thank you for joining us today for Harmonic's Second Quarter 2026 Financial Results Conference Call. With me today are Nimrod Ben-Natan, President and CEO; and Walter Jankovic, Chief Financial Officer. Before we begin, I'd like to point out that in addition to the audio portion of the webcast, we have also provided slides for this webcast, which you may view by going to our webcast on our Investor Relations website. Now turning to slide 2. During this call, we will provide projections and other forward-looking statements regarding future events or future financial performance of the company. Such statements are only current expectations, and actual events or results may differ materially. We refer you to documents Harmonic filed with the SEC, including our most recent 10-Q and 10-K reports and the forward-looking statements section of today's preliminary results press release. These documents identify important risk factors which can cause actual results to differ materially from those contained in our projections or forward-looking statements. And please note that unless otherwise indicated, the financial metrics we provide you on this call are determined on a non-GAAP basis. These metrics, together with corresponding GAAP numbers and a reconciliation to GAAP, are contained in today's press release, which we have posted on our website and filed with the SEC on Form 8-K. We will also discuss historical, financial and other statistical information regarding our business and operation, and some of this information is included in the press release. The remainder of the information will be available on a recorded version of this call or on our website. And now I'll turn the call over to our CEO, Nimrod Ben-Natan. Nimrod? Nimrod Ben-Natan: Thanks, David, and welcome everyone to our second quarter 2026 earnings call. Q2 was another strong quarter, both financially and in terms of the progress we've made on our strategic imperatives. We saw continued strength in rest of market demand, an accelerating pace of fiber deployments and encouraging results from our new intelligence layer. In June, we completed the sale of our Video business, marking the completion of our transformation to a pure-play broadband company. With the momentum and improved visibility we achieved in the first half of the year, we are once again raising our full year 2026 Broadband revenue outlook. Driving this momentum is an important theme we have been building toward for several years. Operators no longer have to settle the network architecture's question before they can move forward because our converged cOS platform supports all access architectures, DOCSIS 3.1 Plus, DOCSIS 4.0, distributed, centralized and fiber. Operators are deploying cOS knowing it will evolve as their priorities do, from more upstream capacity now to an accelerated fiber overlay over time. This is more important than ever for operators as network traffic is not just growing. It is changing shape. OpenVault's latest data show upstream traffic now growing more than 3x faster than downstream, the third consecutive year that gap has widened. AI pushes the same way. Agents and connected devices fill traffic upstream and run around the clock, not just at the evening peak, which is what legacy broadband networks were engineered around. The critical constraint is upstream capacity, and there is more than one way to relieve it: DOCSIS 4.0, a high-split upgrade or fiber. The unique strength of our platform is that it enables all of these options with the same software at the same time. Cable One's CEO captured this well at the independent show in July, describing network topology as the biggest question broadband operators face and saying his plan is to trial DOCSIS 3.1 splits, DOCSIS 3.1 Plus, DOCSIS 4.0 and fiber side by side. All of these options are commercially available and deployed with cOS today, making this entire evaluation possible with a single platform. This flexibility matters more than ever as legacy platforms are both constrained on upstream capacity and approaching the end of their useful life. For a growing number of global operators, those legacy systems are an increasing security and maintenance liability. And as they weigh their options, cOS and Harmonic are uniquely positioned as the platform and company enabling them to modernize across current and future architectures. This is the dynamic that is now driving our market momentum worldwide. Turning to our financial results highlights on slide 5. Q2 revenue grew 54% year-over-year to $133.5 million, above the high end of our guidance and our strongest second quarter ever. Rest of market revenue grew 44% year-over-year to nearly $50 million. Looking at the 6 months ended July 3, this revenue surpassed $100 million, approximately 60% higher than in the first half of last year. Bookings were again strong in the quarter reaching $144 million, led by rest of market, which represented approximately 60% of total bookings in the quarter. Also, we exited the quarter with backlog and deferred revenue of $588 million. This continues to improve our visibility, and it is a key reason we are raising our full year outlook. Rest of market continued in the quarter -- momentum continued in the quarter and behind the revenue is an expanding base of customers. Our deployed cOS footprint now includes 161 customers serving 48.2 million CPE devices. Bluepeak is a good illustration of why operators are choosing us, and it goes directly to the theme I opened with. Two years ago, they selected our distributed access platform to expand their DOCSIS network. Partway through, their strategy evolved, and they began overbuilding parts of their footprint with fiber. In the words of their Vice President of Technology and Engineering, Eric Fligel, because of the platform they had already deployed, they were able to quickly make a technology shift, utilize the same housing, the same infrastructure, the same backhaul and start deploying XGS-PON very quickly. Today, they decide service area by service area where to run DOCSIS and where to run fiber. That is the pattern we are seeing repeatedly. Operators start with one use case and expand over time across DOCSIS and/or fiber and increasingly add network intelligence, which I will come back to shortly. And they do it by leveraging the cOS platform underneath. Fiber momentum continued to build, with Q2 setting a record rest of market fiber bookings. Deployments are ramping alongside the bookings. SeaStar, our MDU optical node, went live at DNA Finland, the European operator behind the sizable booking we highlighted last quarter. They are now bringing multi-gigabit service into apartment buildings that were previously uneconomic to upgrade by reusing the existing in-building network. We are also seeing fiber used in ways that extend our market beyond residential broadband. Inter Venezuela, the largest private ISP in the country, is building a nationwide XGS-PON service on our platform for mobile backhaul, using fiber as carrier infrastructure for mobile operators preparing for 5G. The new product portfolio we previewed at FiberConnect last quarter is already converting to orders. We secured our first multimillion-dollar order for the Pearl-1XL and Oyster+, which together deliver high port density and keep service running through extended power outages, the leading cause of downtime in outdoor deployments. Their outdoor design lets operators skip the street cabinet altogether, consolidating that capacity into one compact, power-protected device that deploys faster, costs less to install and takes up far less space in the communities they serve. Together, our record fiber bookings, expanding portfolio and converged architecture position us to keep gaining share as operators look for more flexible, reliable, and cost-effective ways to expand fiber. The DOCSIS 4.0 ecosystem took an important step forward. In June, cable modems from 6 suppliers across 2 chipset vendors cleared the first CableLabs interoperability milestone on the path to DOCSIS 4.0 certification. With multi-vendor modem supply now coming into place, operators can move ahead on DOCSIS 4.0 with greater confidence. We are shipping unified DOCSIS 4.0 nodes in volume across a broad range of customers as they ramp their upgrades. We also won a new DOCSIS 4.0 customer in Europe during the quarter. With DOCSIS 4.0, operators can deliver fiber-like upstream speeds over the plan they already have, which is what an AI era applications increasingly demand. Turning to our new intelligence area, we continue to see adoption building. Beacon is now live with approximately 20 customers, and our broader intelligence platform is expanding, with newer offerings now running with about 10 operators. Early deployments continue to show significant value, including a reduction in subscribers' calls to service providers by more than 30%, as we discussed last quarter. Amply, which extends real-time visibility into the amplifier plant and is now in beta with several operators, running with amplifiers from 2 different vendors. That matters as many operators run multi-vendor amplifier strategy for supply chain flexibility and assurance. A recent Dell'Oro report projects that nearly 10 million of the amplifiers deployed in the industry's current upgrade cycle will be smart amplifiers. In other words, the outside plant is being instrumented by the upgrade cycle itself, generating the kind of granular real-time data our intelligence layer is built to use. That is a significant expansion of the opportunity ahead of us. These outcomes and our customer-first approach show up in how our customers rate us. Our customer NPS reached 87 in the second quarter. Turning to slide 6. Stepping back, there are 4 things driving the growth of Harmonic. And during the second quarter, we made significant progress on each of them: first, the access and fiber on a single converged architecture, which is increasingly why operators select us in the first place; second, a global base that -- a global customer base that keeps widening beyond our largest accounts; third, new intelligence products and services where adoption is building across our customer base. And fourth, operating leverage which is increasingly visible in our financial performance. We are looking forward to sharing more with you at our upcoming Investor Day on September 15, including our updated view of the market opportunity, our longer-term strategy, and growth plans, and much more on the intelligence opportunity. I hope many of you will be able to join us. That concludes my opening remarks. With that, I will turn the call over to Walter to walk you through our financials in more detail. Walter Jankovic: Thanks, Nimrod, and thank you all for joining us today. Before I discuss our quarterly results and outlook, I'd like to remind everyone the financial results I'll be referring to on this call are provided on a non-GAAP basis. As David mentioned earlier, our Q2 press release and earnings presentation include reconciliations of our non-GAAP to GAAP financial measures. Both of these are available on our website. As previously announced, we completed the sale of our Video business to MediaKind on June 16 of this year. Proceeds from the sale were $137.9 million paid at closing, subject to final post-closing adjustments under the terms of the APA. As a result, Harmonic now operates as a pure-play broadband company with a single reportable segment, Broadband. With this context, I'm pleased to report that our strong business momentum continued into the second quarter, with Broadband revenue increasing 54% year-over-year, including 44% growth in rest of market. In addition, we had strong quarterly bookings and once again closed the quarter with record backlog and deferred revenue. Notably, approximately 60% of bookings in the quarter came from the rest of market where book to bill was well over 1.5. Given these results and leading indicators, we are once again raising our full-year guidance, with Broadband revenue now expected at $505 million to $525 million, up from our prior range of $475 million to $495 million. I'll provide a more detailed breakout of our guidance shortly. Let's move to slide 8, where we have the financial highlights for the quarter. Broadband revenue was $133.5 million, well above our guidance range of $115 million to $125 million. Gross margin for the quarter was 53%, consistent with our guidance, and the net unrecovered memory cost impact remained well below $1 million. Operating expenses were higher this quarter, mainly due to company incentive-based accruals tied to our improved full year 2026 financial performance forecast. Moving to the bottom line, EPS was $0.21, again, above our guidance range of $0.15 to $0.19. And operating profit was $31.3 million, exceeding our guidance of $23 million to $28 million. These results include $2.3 million in stranded costs related to the Video business sale. The revenue upside was broad-based and included a number of rest of market customers ramping their deployments during the quarter. In Q2, 2 customers each accounted for more than 10% of revenue, together representing 63% of total revenue. Our Q2 rest of market revenue showed very strong year-over-year growth of 44%, representing 37% of total revenue, underscoring our progress in expanding our customer diversification. As a reminder, rest of market revenue describes all revenue that is not from our 2 largest customers as measured by subscriber count. Turning to slide 9. You can see our balance sheet and cash flow highlights. The closing of the Video transaction gave our already healthy balance sheet a strong capital infusion, bringing cash and cash equivalents to $231.9 million at quarter end. That inflow drove the sequential change in cash, partially offset by negative free cash flow of $7 million for the quarter, which was primarily due to an increase in memory inventory as we took early delivery to secure supply for growth. DSO at the end of Q2 was 61 compared to 62 in Q1 '26 and 72 in Q2 '25. We expect DSO to trend back to the low 70s going forward based on our customer mix. Inventory increased $15.3 million in the quarter, and our days inventory on hand increased to 95 days from 80 days last quarter. Overall book to bill was 1.1 in Q2, with rest of market significantly above 1 as previously mentioned. At the end of Q2, Broadband backlog and deferred revenue reached a record $587.6 million, up 71% year-over-year, of which 73% is expected to convert to revenue within the next 12 months. This gives us increased visibility for the remainder of 2026 and into 2027. As shown on slide 10, we believe we have ample liquidity to support our capital allocation priorities with $232 million in cash and an $85 million undrawn credit facility. This significant increase in cash gives us the financial flexibility to execute our capital allocation plan. Our capital allocation priorities remain unchanged: invest in organic growth and diversification, return capital to our shareholders, and pursue strategic M&A to further enhance growth and diversification in our business. In line with our first key priority, we plan to keep investing in organic growth. This will increase our inventory over the next several quarters, including advancing memory purchases to secure supply. As discussed on prior calls, these organic broadband opportunities are in both our intelligence platform and fiber portfolio. Under our current $200 million share repurchase program, to date, we have already repurchased $122 million of our outstanding shares. We did not repurchase shares during the second quarter. As we stated previously, we expect to fund ongoing repurchases through both current cash and strong free cash flow generation over the next several years, with a minimum goal of purchasing enough shares each year to offset any dilution from equity compensation awards. In addition, with the substantial cash infusion from the sale of Video, we are well positioned to explore additional inorganic growth opportunities that would further diversify our business and accelerate our growth strategy. Turning to guidance on slide 11. Here, we provide our continuing operations non-GAAP financial guidance for Q3 '26 and full year '26, which reflects our raised full year outlook. We continue to take a measured approach to guidance for both revenue and margins. We believe this is prudent given external factors such as the situation in the Middle East and secondarily, component supply dynamics and pricing. Our full year margin guidance incorporates the current market pricing for memory. Now let me walk you through our guidance. For Q3 '26, we expect to deliver Broadband revenue between $125 million and $135 million, gross margins between 51% and 52%, reflecting the elevated memory costs, operating profit between $23 million and $28 million, and EPS of between $0.15 and $0.19. As our guidance shows, we expect strong year-over-year revenue growth in Q3. Q3 operating profit includes approximately $2.3 million in stranded costs. For the full year 2026, we expect broadband revenue between $505 million and $525 million, up $30 million or 6.2% from the midpoint of our prior guidance; gross margins between 51% and 52%, an improvement over prior guidance based on customer mix and the mitigation of supply chain impacts; operating profit between $99 million and $111 million; and EPS between $0.67 and $0.75, up approximately $0.09 or 14.5% from the midpoint of our prior guidance. As we noted last quarter, we have built approximately $3 million per quarter into our second half guidance for the net increased memory costs that are not expected to be passed on. Our team has done a terrific job securing memory supply for the rest of 2026 and into 2027. Additionally, full year Broadband operating profit includes approximately $10 million in stranded costs. And to reiterate what we said last quarter, we continue to believe approximately 30% of these stranded costs are temporary and will be eliminated within 1 year of the Video sale closing. Please note that our expected non-GAAP tax rate for full year '26 has been reduced to 23% from 24.5% previously, reflecting our updated view of profitability. In summary, in the second quarter, we delivered results that once again significantly exceeded our expectations with Broadband revenue growing 54% year-over-year. Our record Broadband backlog and deferred revenue and supply availability give us increased visibility, enabling us to raise our full year guidance. With the sale of our Video business now behind us, we are well positioned, focused and have considerable capital to further accelerate our growth in the rapidly growing broadband sector. Thank you for your attention, and now I'll turn it back to Nimrod for our closing remarks before we open up the call for questions. Nimrod Ben-Natan: Thanks, Walter. To close, Q2 was a strong quarter across virtually every measure, our strongest second quarter ever on revenue, continued strength in rest of market growth, a faster pace of fiber deployment and wider adoption of our intelligence portfolio. We are raising our outlook for the second time this year as the visibility we have built supports it. Operators keep choosing Harmonic for the same reason. Harmonic lets them evolve their network without regrettable spend. We will have a great deal more to say about where that leads at the upcoming Investor Day next month. That concludes our prepared remarks. Walter and I are now happy to take your questions. Operator: [Operator Instructions] Our first question will be coming from the line of Victor Chiu from Raymond James. W. Chiu: This is Victor in for Simon. Can you just provide some color around the demand dynamics from the rest of the market? Are we seeing an inflection here now where smaller regional MSOs are starting to follow through with the Comcast-Charter upgrade playbook? And in addition, are these still kind of lab trials? Or are we seeing the first phases of their actual upgrades now? Nimrod Ben-Natan: Yes, Victor, let me take that. So as we previously discussed, this is a growing list of customers, many of which we announced last year and early this year. This is way past the lab trials. This is ramping deployments across the board. And as much as we talked about DOCSIS 4.0, we also see customers that are doing what's called the DOCSIS 3.1 Plus, kind of the extended version of DOCSIS and fiber. So it's really across the board, all the use cases that we have. And it's really coming, as you indicated, outside of the top 2 customers. W. Chiu: Great. And just a quick follow-up. What percentage of the rest of the market would you say in your estimation has kind of started ramping now and started full-on deploying for these upgrades? Nimrod Ben-Natan: It's a growing percentage of the rest of the market. We never broke it down exactly, and not all of them are at the same stage. Clearly, some of them are further along than others. But it's certainly a growing percentage that we see out there, and there is more to come, as there is a longer list of customers that are either making a decision or made a decision and are going through the different stages in the lab testing, field trial before they ramp up. So what you see every quarter is a growing blend of those that are ramping up, those that are just starting. And behind the scene, as we keep announcing new wins, these are kind of opportunities and customers that are coming up to speed with their rollouts. Walter Jankovic: And just to add to Nimrod's comments around the rest of market, that revenue is well diversified across a broad set of customers. So to Nimrod's point, more customers are coming onboard; and therefore, when you look at the makeup of that revenue, it is well diversified across many customers. Operator: Our next question is coming from the line of Steven Frankel of Rosenblatt Securities. Steven Frankel: Can we just talk in general about what's the potential for these intelligence platforms in terms of kind of raising the recurring revenue portion of your business? Is this something that could be material in 2 or 3 years? Or is it going to take longer than that for the stream of revenue to build up? Nimrod Ben-Natan: It will certainly be material for what we report today on recurring revenue. It will also be very sticky to the service that we provide. We think it's going to take time, and we plan on sharing more details on what exactly we do there and kind of what's the road ahead. But we certainly see that as a growing and an area that will be material to our recurring revenue kind of category that we report and for the overall business. Steven Frankel: Okay. And you've done a great job battling rising memory costs, which seem to be really impacting everyone. Do you think you can keep this up throughout this year and into next year? Or do you think that you just got ahead of your growth curve this year, which bought you some cushion? Walter Jankovic: Steve, it's Walter. So first of all, with regards to memory, we've already procured all the memory that we need for FY '26. And our team's done a good job kind of early days when this was becoming an issue to front-run and get supply. And so now you're seeing in the second half some of that supply from a cost standpoint, obviously, is reflecting closer to the market price of that product as we had already procured it. And you mentioned -- I mentioned during the opening remarks that we built in about $3 million per quarter in terms of the impact of the memory costs. And so that's where it's increasing, and that's reflected now into the memory -- sorry, into the gross margin guidance that we've provided for Q3 as well as the full year. And so yes, the team's done a great job. We've mitigated certain risks. And today you saw in our guidance for the full year, we actually raised our gross margin guidance for that period. Operator: [Operator Instructions] And question is coming from the line of Ryan Koontz of Needham & Company. Ryan Koontz: I'm going to ask a little bit about rest of market maybe in a different angle here. One, any color on different geographies relative to rest of market traction and adoption? And secondly, are there any particular unlocks that you've achieved to allow them to operationalize virtual CMTS and DAA, which has been going on for many years of struggles? Any color you can share with us about that? Nimrod Ben-Natan: Yes. So on the first time -- on the first question, clearly, the majority of the business is in North America, although you have to look at Canada and Mexico separately. We've got customers in both. There are a growing number of opportunities that we've either announced or in the pipeline in both Latin America, Asia and a sizable number of opportunities in Europe. So when you think about rest of market, if you exclude the top 2 and you kind of look at the mix, there is definitely a bigger contribution coming outside of North America. To your second question, look, it took a while. Obviously, it's kind of a distributed architecture, but I think we did a good job over the years to simplify that and train our customers. We got great experts helping our customers with services. And the one thing I can say, even though our platform under the hood has all the bells and whistles of Kubernetes and kind of a scale-out microservices architectures, our customers do not have to know all of that when they operate our platform. They really look at that as an appliance. So I think this is clearly not kind of a headwind to our business growth at the moment from a kind of complexity of deployment point of view. Ryan Koontz: Super helpful. And then maybe on the cost side as it relates to solutions and your requirements to deliver servers and networking and other parts of the complete solution, I'm sure you're seeing some cost pressures there. And are you seeing any of those being impediments to your customers' deployments relative to just raw hardware costs for off-the-shelf private cloud? Nimrod Ben-Natan: Yes, the short answer is no, but I'm going to let Walter expand on that. Walter Jankovic: Yes, I think from anything that we provide, as you know, from a third party in terms of switches and servers, we mentioned it during the last quarter's call that, that is one of the things that we do for some of our rest of market customers. We procure those items as well. Obviously, the prices of those have gone up and impact customers out there, but from the perspective of that's -- its materiality to our business, it's very small. And so far, we really haven't seen any impact from a supply standpoint. It's more around the price of these items. Ryan Koontz: Terrific. Thanks, guys. And maybe if I can squeeze one more in, a question about the fiber market, how you think about that, how you're thinking about BEAD. And any catalysts out there that you think would shift cable operators to more aggressively rehab coax versus upgrade to fiber from your perspective? Nimrod Ben-Natan: Yes, so let me start, and then Walter will chime in on the BEAD BABA. So we do see cable operators do fiber, but very few are doing wholesale overbuild of themselves. They will do everything to grow fiber to address MDUs or certain applications. But some of them, and I did mention Bluepeak as an example, will do an overbuild, and that's the beauty of our platform, that it lets them kind of make the transition in a very seamless way. We expect, over the next couple of years, some will be more aggressive, some less about this migration. And this is clearly something that we see as a great opportunity for our business being a converged platform. We also think that our fiber portfolio is very attractive for the broader fiber market outside of cable. I did mention the win that we had with the new Pearl XL that has these unique power protection capabilities. This is going for the broader fiber market, not specific to cable. And it really provides a significant value for those that are doing these deployments relative to the traditional street cabinet architecture, etc. So we're excited about what we have and expecting to keep growing this business. Walter, please address the BEAD question. Walter Jankovic: Certainly. So Ryan, BEAD, in terms of our guidance, it's a modest part of our overall revenue guidance. I think we've mentioned previously that we've received orders and are ready to ship out in terms of BEAD product, in terms of having the supply chain all set up. As Nimrod pointed out, we've got some very unique products for that market in terms of ruggedized OLT type of infrastructure, which is playing really well into that market. So right now, it's moving as planned. It's not a significant part of our guidance this year. Operator: And this concludes today's Q&A session. I would now like to turn the call back to Nimrod for closing remarks. Please go ahead. Nimrod Ben-Natan: We appreciate your continued interest in Harmonic and look forward to updating you on our progress in the near future. Thank you all for joining the call. Have a good day. Operator: This concludes today's conference call. Thank you so much for joining. You may now disconnect. Before you buy stock in Harmonic, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Harmonic wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $419,408!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,348,694!* That performance is why people listen. 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Harmonic (HLIT) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Harmonic Inc.? Here are five stocks we like better. Broadband growth exceeded expectations: Second-quarter broadband revenue rose 54% year over year to $133.5 million, prompting Harmonic to raise its full-year outlook to $505 million–$525 million. The company completed the sale of its video business to MediaKind and is now focused solely on broadband. Bookings and backlog strengthened: Quarterly bookings reached $144 million, with approximately 60% from rest-of-market customers, while backlog and deferred revenue increased 71% to a record $587.6 million. Growth is being supported by DOCSIS 4.0, fiber deployments and expanding adoption among smaller and regional operators. Profitability and cash investments remain key considerations: Second-quarter non-GAAP operating profit was $31.3 million and EPS was $0.21, but free cash flow was negative $7 million due mainly to higher memory inventory purchases. Harmonic also expects about $10 million in full-year stranded costs related to the video-business sale while continuing share repurchases and broadband investments. Harmonic (NASDAQ:HLIT) reported second-quarter 2026 broadband revenue of $133.5 million, up 54% from a year earlier and above its prior guidance range of $115 million to $125 million, as deployment activity expanded among customers outside of its two largest accounts. The company also raised its full-year broadband revenue outlook to $505 million to $525 million, from a prior range of $475 million to $495 million. Harmonic completed the sale of its video business to MediaKind on June 16, leaving the company as a pure-play broadband provider with a single reportable segment. → SoundHound AI Sends a Loud Signal After Its Q2 Earnings Beat Chief Executive Officer Nimrod Ben-Natan said the quarter reflected continued demand across the company’s “rest of market” customer base, accelerating fiber deployments and early adoption of its network intelligence products. Rest-of-market revenue, which Harmonic defines as revenue not derived from its two largest customers by subscriber count, increased 44% year over year to nearly $50 million and represented 37% of total quarterly revenue. For the first six months ended July 3, rest-of-market revenue exceeded $100 million, approximately 60% above the prior-year period. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be Quarterly bookings reached $144 million, with rest-of-market customers contributing about 60% of bookings. Harmonic reported a total book-to-bill ratio of 1.1, while rest-of-market book-to-bill was above 1.5. Backlog and deferred revenue rose 71% year over year to a record $587.6 million, with 73% expected to convert into revenue within the next 12 months. Chief Financial Officer Walter Jankovic said two customers each represented more than 10% of second-quarter revenue, and together accounted for 63% of total revenue. Still, he said the company’s rest-of-market revenue base is becoming increasingly diversified across a wider set of customers. → First Solar’s Profit Engine Faces a New Policy Test in Washington Ben-Natan said operators are using Harmonic’s cOS platform to support multiple network architectures, including DOCSIS 3.1+, DOCSIS 4.0, centralized and distributed deployments, and fiber. He said this flexibility allows operators to pursue higher upstream capacity through a range of approaches without having to settle on a single network topology in advance. During the question-and-answer session, Ben-Natan said demand from smaller and regional operators has advanced beyond laboratory trials and is now moving into ramping deployments. He said customers are adopting a mix of DOCSIS 4.0, extended DOCSIS 3.1 and fiber strategies, though they are at different stages of rollout. Harmonic said its deployed cOS footprint reached 161 customers serving 48.2 million customer-premises equipment devices. The company cited Bluepeak as an example of an operator using the same underlying platform for DOCSIS expansion and fiber overbuilds in different service areas. Fiber activity included record rest-of-market fiber bookings in the second quarter, according to the company. Harmonic said its SeaStar MDU optical node went live at DNA Finland, while Inter Venezuela is building a nationwide XGS-PON network on Harmonic’s platform for mobile backhaul. The company also received its first multimillion-dollar order for its PAL One XL and Oyster products. On DOCSIS 4.0, Harmonic said cable modems from six suppliers across two chipset vendors reached an initial CableLabs interoperability milestone in June. The company said it is shipping unified DOCSIS 4.0 nodes in volume and added a new European DOCSIS 4.0 customer during the quarter. Harmonic said its Beacon network intelligence product is live with about 20 customers, while newer offerings in its broader intelligence platform are operating with approximately 10 operators. The company said early deployments have reduced subscriber calls to service providers by more than 30%. Amply, a product intended to provide real-time visibility into amplifier networks, is in beta with several operators and is operating with amplifiers from two vendors. Ben-Natan said the intelligence business is expected to become material to Harmonic’s recurring-revenue category over time, though he said it will take time to build. The company reported a customer net promoter score of 87 during the second quarter. Second-quarter non-GAAP gross margin was 53%, while non-GAAP operating profit totaled $31.3 million and non-GAAP earnings per share were $0.21. The operating-profit result included $2.3 million in stranded costs related to the video business sale. Harmonic received $137.9 million in proceeds at closing from the MediaKind transaction, subject to final post-closing adjustments. Cash and cash equivalents totaled $231.9 million at quarter-end. Free cash flow was negative $7 million, primarily due to higher memory inventory as the company took early delivery to secure supply for anticipated growth. Jankovic said Harmonic has procured the memory it needs for full-year 2026 and has included approximately $3 million per quarter in second-half guidance for higher memory costs not expected to be passed through to customers. Full-year guidance includes about $10 million of stranded costs, with roughly 30% of those costs expected to be eliminated within one year of the video sale closing. Third-quarter broadband revenue: $125 million to $135 million Third-quarter gross margin: 51% to 52% Third-quarter operating profit: $23 million to $28 million Third-quarter EPS: $0.15 to $0.19 Full-year broadband revenue: $505 million to $525 million Full-year operating profit: $99 million to $111 million Full-year EPS: $0.67 to $0.75 Harmonic said it expects to continue investing in broadband growth, including inventory and memory purchases, while also pursuing share repurchases and potential strategic acquisitions. The company has repurchased $122 million of shares under its $200 million authorization, though it made no repurchases during the second quarter. Harmonic Inc (NASDAQ:HLIT) is a leading provider of video delivery infrastructure that enables service providers, broadcasters and content owners to capture, process and distribute high‐quality video across broadcast, cable, satellite and IP networks. The company's portfolio spans real‐time video compression solutions, including encoders and transcoders, as well as storage and server products designed for live production, playout and streaming on any device. Harmonic's product lines include cable edge QAM modules and set‐top video processing platforms for traditional pay‐TV operators, alongside cloud‐native software for over‐the‐top (OTT) delivery, origin servers and content delivery network (CDN) services. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Harmonic Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Completed the strategic sale of the Video business to MediaKind for $137.9 million, finalizing the company's transition to a pure-play broadband entity. Achieved record second-quarter revenue driven by a 54% year-over-year increase in Broadband, fueled by accelerating fiber deployments and 'rest of market' demand. Management attributes market momentum to their converged cOS platform, which allows operators to deploy DOCSIS and fiber architectures simultaneously without 'regrettable spend' on legacy hardware. Upstream traffic is now growing three times faster than downstream, creating a critical capacity constraint that favors Harmonic's flexible software-defined architecture. The 'rest of market' segment (customers outside the top two) grew 44% year-over-year, now representing 37% of total revenue and diversifying the customer base. Operational leverage is becoming increasingly visible as the company scales its intelligence layer, which has demonstrated a 30% reduction in subscriber service calls for early adopters. Raised full-year 2026 Broadband revenue guidance to a range of $505 million to $525 million based on improved visibility from a record $588 million backlog. Guidance assumes approximately $3 million per quarter in net unrecovered memory costs for the second half of the year, though supply is secured through 2027. Management expects to eliminate approximately 30% of the $10 million in annual stranded costs related to the Video sale within one year of closing. Strategic focus is shifting toward the 'intelligence layer' and smart amplifier market, with Dell'Oro projecting 10 million smart amplifiers will be deployed in the current upgrade cycle. Capital allocation will prioritize organic growth in fiber and intelligence, while the $232 million cash balance supports potential inorganic diversification and ongoing share repurchases. Memory inventory was increased by $15.3 million in the quarter as a proactive measure to secure supply against market pricing volatility. The company faces approximately $10 million in annual stranded costs following the Video business divestiture, impacting near-term operating profit. Macroeconomic uncertainty in the Middle East and component pricing dynamics remain primary external variables in the company's 'measured' guidance approach. Non-GAAP tax rate was reduced to 23% from 24.5%, reflecting updated profitability expectations following the business transformation. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that regional operators are well past lab trials and are actively ramping deployments across DOCSIS 3.1 Plus and fiber. The 'rest of market' revenue is highly diversified, with a growing blend of customers at various stages of rollout rather than being concentrated in a few accounts. Management expects the intelligence layer to become a material contributor to recurring revenue over the next 2-3 years. The platform is designed to be 'sticky' by providing real-time visibility into the amplifier plant, which is critical for multi-vendor hardware strategies. Harmonic has already procured all necessary memory for fiscal year 2026, mitigating supply risks despite higher market prices reflected in guidance. While third-party server and switch prices have increased, management stated these costs are not currently acting as an impediment to customer deployment schedules. BEAD-related revenue is currently a 'modest' part of the 2026 guidance, the company has secured orders and established a supply chain for BEAD-related products. The new Pearl-1XL and Oyster+ products are specifically targeting the broader fiber market by eliminating the need for traditional street cabinets.

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. Harmonic (HLIT) is back in focus after reporting second quarter results that topped earnings and revenue estimates, while also raising full year guidance as it completes its move to a pure play broadband business. The company reported broadband revenue of US$133.5 million for the quarter, alongside record backlog and deferred revenue of US$587.6 million, and bookings of US$144 million. Management also updated outlook figures that now present the stock with a more focused broadband earnings profile. See our latest analysis for Harmonic. Harmonic’s latest earnings beat and raised broadband guidance arrived alongside a 1 day share price return of 4.8% and a year to date share price return of 19.76%, while the 1 year total shareholder return of 30.15% points to momentum that has built over a longer period despite recent 30 day and 90 day share price weakness. If you are looking beyond Harmonic for other growth stories linked to digital infrastructure, this is a good moment to check out 36 power grid technology and infrastructure stocks After Harmonic’s post earnings jump and strong broadband guidance, the question now is whether most of the easy gains are already reflected in the US$12 share price, or if the valuation still points to further upside. The most followed valuation narrative puts Harmonic’s fair value at $15.29 against a last close of $12. This gap is built on detailed assumptions about broadband demand, margins and future cash flows rather than short term trading moves. Read the complete narrative. Curious what sits behind that upgrade cycle story. The narrative leans heavily on faster earnings growth, higher margins and a different future P/E profile. Want to see which revenue mix shift and profitability path are being used to support that fair value, and how the required return ties it all together. Result: Fair Value of $15.29 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, the Harmonic story still depends on a concentrated customer base and the risk that broadband or video technology could shift faster than the company can keep up. Find out about the key risks to this Harmonic narrative. While the narrative fair value of $15.29 suggests Harmonic is undervalued, the current P/S ratio of 3.3x paints a different picture. It sits above the US Communications industry at 2.5x and the peer average at 1.7x, and even above the 2.7x fair ratio the market could move toward. Is investors’ optimism already embedded in today’s price? See what the numbers say about this price — find out in our valuation breakdown. Given the mix of optimism and concern around Harmonic right now, it makes sense to look at the underlying data yourself and move quickly to form your own view. A balanced starting point is to review the 2 key rewards and 2 important warning signs. If Harmonic has sharpened your focus on targeted opportunities, do not stop here. Use tailored stock lists to quickly spot other ideas that match your goals. Target potential upside by scanning a focused set of undervalued opportunities using the 49 high quality undervalued stocks. Prioritise resilience and sleep-better-at-night holdings by reviewing companies highlighted in the 85 resilient stocks with low risk scores. Seek earlier stage opportunities with solid numbers by checking out the screener containing 20 high quality undiscovered gems. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include HLIT. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Broadband Revenue: $133.5 million, up 54% year over year, above the high end of guidance. Rest of Market Revenue: Nearly $50 million, up 44% year over year, representing 37% of total revenue. Gross Margin: 53% for the quarter, consistent with guidance. Operating Profit: $31.3 million, exceeding guidance of $23 million to $28 million. EPS: $0.21, above guidance range of $0.15 to $0.19. Bookings: $144 million in the quarter, with rest of market representing approximately 60% of total bookings. Backlog and Deferred Revenue: Record $587.6 million, up 71% year over year, with 73% expected to convert to revenue within the next 12 months. Cash and Cash Equivalents: $231.9 million at quarter end, boosted by $137.9 million in proceeds from the video business sale. Free Cash Flow: Negative $7 million for the quarter, primarily due to increased memory inventory. DSO: 61 days, compared to 62 in Q1 '26 and 72 in Q2 '25. Inventory Days: Increased to 95 days from 80 days last quarter. Q3 '26 Guidance: Broadband revenue between $125 million and $135 million; gross margins between 51% and 52%; operating profit between $23 million and $28 million; EPS between $0.15 and $0.19. Full Year 2026 Guidance: Broadband revenue raised to $505 million to $525 million; gross margins between 51% and 52%; operating profit between $99 million and $111 million; EPS between $0.67 and $0.75. Warning! GuruFocus has detected 4 Warning Signs with HLIT. Is HLIT fairly valued? Test your thesis with our free DCF calculator. Release Date: August 12, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Harmonic Inc (NASDAQ:HLIT) reported Q2 2026 broadband revenue of $133.5 million, a 54% year-over-year increase, exceeding the high end of guidance. Rest of market revenue grew 44% year-over-year to nearly $50 million, with record fiber bookings and a book-to-bill ratio well over 1.5, indicating strong demand diversification. The company completed the sale of its video business, becoming a pure-play broadband company with a strengthened balance sheet, including $231.9 million in cash. Backlog and deferred revenue reached a record $587.6 million, up 71% year-over-year, providing strong visibility and supporting a raised full-year 2026 revenue guidance to $505-$525 million. The intelligence platform (Beacon, Ampli) is gaining traction with about 20 live customers and 10 operators using newer offerings, showing early value like a 30% reduction in subscriber calls. The converged cOS platform supports multiple architectures (DOCSIS 3.1 Plus, DOCSIS 4.0, fiber), enabling operators to evolve networks flexibly, as demonstrated by Bluepeak's seamless transition to fiber. Customer satisfaction is high, with a Net Promoter Score (NPS) of 87 in Q2, reflecting strong customer relationships and product quality. Gross margin guidance for Q3 2026 is expected to be 51%-52%, down from Q2's 53%, due to elevated memory costs that are not fully passed on to customers. The company faces ongoing supply chain risks, including memory price increases and secondary component supply dynamics, which could impact future margins. Operating expenses increased in Q2 due to higher incentive-based accruals tied to improved financial performance, potentially affecting near-term profitability. Free cash flow was negative $7 million in Q2, primarily due to increased memory inventory purchases to secure supply, which may continue to pressure cash flow in the near term. The company expects DSO to trend back to the low 70s from 61, indicating potential slower cash collection due to customer mix. Revenue concentration remains a concern, with two customers accounting for 63% of total revenue in Q2, though rest of market is growing. The company anticipates approximately $10 million in stranded costs from the video business sale in 2026, with only 30% expected to be eliminated within a year. Q: Can you provide some color around the demand dynamics from the rest of the market? Are we seeing an inflection here now where smaller regional MSOs are starting to follow through with the Comcast Charter upgrade playbook? And are these still lab trials or the first phases of actual upgrades?A: Nimrod Ben-Natan (President and CEO): This is way past the lab trials; it is ramping deployments across the board. We see customers doing DOCSIS 4.0, DOCSIS 3.1 Plus, and fiber, covering all our use cases. The growth is coming from outside the top two customers, with a growing percentage of the rest of the market ramping up, though they are at different stages. Walter Jankovic (CFO) added that the rest of market revenue is well diversified across a broad set of customers. Q: What is the potential for these intelligence platforms in terms of raising the recurring revenue portion of your business? Could this be material in two or three years, or will it take longer?A: Nimrod Ben-Natan (President and CEO): The intelligence platform will certainly be material for our reported recurring revenue and will be very sticky to the service we provide. It will take time to build, but we see it as a growing area that will be material to our recurring revenue category and the overall business. More details will be shared at the upcoming Investor Day. Q: You've done a great job battling rising memory costs. Can you keep this up throughout this year and into next year, or did you just get ahead of your growth curve this year?A: Walter Jankovic (CFO): We have already procured all the memory we need for FY26. Our team front-ran the supply issue early on. We have built approximately $3 million per quarter of net increased memory costs into our second-half guidance that are not expected to be passed on. Despite this, we actually raised our full-year gross margin guidance, reflecting our mitigation efforts and customer mix. Q: Any color on different geographies relative to rest of market traction? And are there any particular unlocks you've achieved to allow operators to operationalize virtual CMTS and DAA?A: Nimrod Ben-Natan (President and CEO): The majority of the business is in North America, but there is a growing contribution from Latin America, Asia, and Europe. On the technology side, we have simplified the distributed architecture over the years. Even though our platform uses Kubernetes and scale-out microservices, customers view it as an appliance and do not need to know the underlying complexity. This is no longer a headwind to our business growth. Q: Are you seeing cost pressures on servers and networking as part of your complete solution, and are these an impediment to customer deployments?A: Walter Jankovic (CFO): We procure third-party switches and servers for some rest of market customers. While prices have gone up, the materiality to our business is very small. We have not seen any impact from a supply standpoint, only on the price of these items, which has not been an impediment to deployments. Q: How are you thinking about the fiber market and BEAD funding? What catalysts would shift cable operators to more aggressively rehab coax versus upgrade to fiber?A: Nimrod Ben-Natan (President and CEO): Cable operators are doing fiber, but few are doing wholesale overbuilds. They use fiber for MDUs or specific applications, though some, like Bluepeak, are overbuilding. Our converged platform lets them transition seamlessly. We expect some operators to be more aggressive in this migration over the next couple of years. Our fiber portfolio is also attractive for the broader fiber market, as evidenced by the new Pearl-1XL win with unique power protection capabilities. Walter Jankovic (CFO) added that BEAD is a modest part of overall revenue guidance, with orders received and supply chain ready, but it is not a significant part of this year's guidance. Q: Can you elaborate on the strength of the rest of market bookings and the book-to-bill ratio?A: Walter Jankovic (CFO): Rest of market represented approximately 60% of total bookings in the quarter, with a book-to-bill well over 1.5. This strong booking activity, combined with record backlog and deferred revenue of $587.6 million (up 71% year over year), provides increased visibility for the remainder of 2026 and into 2027. Approximately 73% of the backlog is expected to convert to revenue within the next 12 months. Q: What drove the significant revenue upside in Q2, and how should we think about the customer concentration?A: Walter Jankovic (CFO): The revenue upside was broad-based, including a number of rest of market customers ramping their deployments during the quarter. Two customers each accounted for more than 10% of revenue, together representing 63% of total revenue. Rest of market revenue grew 44% year over year, representing 37% of total revenue, underscoring our progress in expanding customer diversification. Q: Can you provide more detail on the fiber momentum and the new product portfolio?A: Nimrod Ben-Natan (President and CEO): Q2 set a record for rest of market fiber bookings. Deployments are ramping alongside bookings. SeaStar, our MDU optical node, went live at DNA Finland, enabling multi-gigabit service in apartment buildings. We also secured our first multimillion-dollar order for the Pearl-1XL and Oyster+, which deliver high port density and extended power outage protection, allowing operators to skip street cabinets altogether. This positions us to gain share as operators look for flexible, reliable, and cost-effective ways to expand fiber. Q: What is the status of the DOCSIS 4.0 ecosystem and its impact on your business?A: Nimrod Ben-Natan (President and CEO): In June, cable modems from six suppliers across two chipset vendors cleared the first CableLabs interoperability milestone on the path to DOCSIS 4.0 certification. With multi-vendor modem supply coming into place, operators can move ahead with greater confidence. We are shipping unified DOCSIS 4.0 nodes in volume across a broad range of customers and won a new DOCSIS 4.0 customer in Europe during the quarter. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Broadband revenue increased 54% year over year, including 44% growth in Rest-of-MarketCompany raises full-year outlook to reflect Broadband revenue of $505 million - $525 millionCash increased to $232 million with the completed sale of the Video business SAN JOSE, Calif., Aug. 12, 2026 /PRNewswire/ -- Harmonic Inc. (Nasdaq: HLIT) today announced its unaudited results for the second quarter ended July 3, 2026. "Our strong business momentum continued in the second quarter, with Broadband revenue growth accelerating to 54% year over year, including 44% growth in Rest-of-Market," said Nimrod Ben-Natan, president and chief executive officer of Harmonic. "Equally important, it was another quarter of strong bookings, led by Rest-of-Market, enabling us to once again raise our full-year 2026 outlook. With the sale of the Video business now complete, we have the capital and focus to further accelerate our broadband growth." Financial and Business Highlights Total Company Financial Results Continuing Operations Financial Results - Broadband Backlog and deferred revenue of $587.6 million, an increase of 71%, compared to $344.2 million last year Cash: $231.9 million at July 3, 2026, compared to $124.1 million at December 31, 2025 Continuing Operations Business Highlights - Broadband Commercially deployed our cOS™ solution with 161 customers, serving 48.2 million CPE devices, with ongoing expansion across all tier-1 accounts and new customer wins Rest-of-Market bookings represented approximately 60% of total Q2 bookings, reflecting meaningful progress in customer diversification Achieved first SeaStar MDU deployment and secured multi-million dollar orders for the recently announced Pearl-1XL and Oyster+ fiber products Discontinued Operations - Video Business The results of the Company's Video Business are presented as held-for-sale and discontinued operations in the condensed consolidated statements of operations and condensed consolidated balance sheets for all periods presented in this press release. As previously announced, on December 8, 2025, the Company entered into a Put Option Agreement to sell its Video business to Leone Media Inc. (d/b/a MediaKind) for a purchase price of $145 million in cash (the "Disposition"). On March 20, 2026, MediaKind and the Company executed the Asset Purchase Agreement (the "APA") for the Disposition. On June 16, 2026, the Company and MediaKind completed the Disposition. Proceeds from the sale were $137.9 million paid at closing, subject to final post-closing adjustments under the terms of the APA. Following the Disposition, Harmonic operates as a pure-play broadband company with a single reportable segment: Broadband. As such, and unless stated otherwise, all results presented in the following table reflect those of continuing operations. Select Financial Information from Continuing Operations - Broadband 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." GAAP Financial Guidance for Continuing Operations - Broadband Non-GAAP Financial Guidance for Continuing Operations - Broadband 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 Wednesday, August 12, 2026. 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-conf.media-server.com/register/BI6b44bd6531a743fb82a359cc25e46844. A replay will be available after 5:00 p.m. PT on the same website. About Harmonic Inc. Harmonic (NASDAQ: HLIT), the worldwide leader in virtualized broadband solutions, is transforming multi-gigabit connectivity. The company's industry-leading cOS™ virtualized broadband platform, suite of solutions for fiber and DOCSIS, and a growing portfolio of AI-powered network intelligence solutions, enable broadband service providers to simplify operations, deliver exceptional subscriber experiences and expand revenue streams. With thousands of vCMTS servers and hundreds of thousands of RPDs deployed globally, Harmonic powers next-generation broadband services with five-nines reliability. Anchored with a customer-first approach and driven by a legacy of innovation, Harmonic supports broadband service providers at every stage of their network evolution. 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, but not limited to, statements related to our expectations regarding: net revenue; gross margins; operating expenses; operating income (loss), including stranded costs associated with the disposition of the Video business; 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, but are not limited to, in no particular order, the following: customer concentration and consolidation; loss of one or more key customers; delays or decreases in capital spending in the cable or telco industries; 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 market and technology trends underlying our Broadband business will not continue to develop in their current direction or pace; the impact of tariffs and 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; our ability to develop new and enhanced products in a timely manner and market acceptance of our new or existing products; risks associated with our international operations; exchange rate fluctuations of the currencies in which we conduct business; risks associated with our cOS™ product solutions; dependence on various 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; stock repurchases may not be conducted in the timeframe or in the manner we expect, or at all; and the impact on our business of natural disasters. In some cases, you can identify forward-looking statements by terminology such as, "may," "will," "should," "expects," "plans," "anticipates," "could," "believes," "intends," "estimates," "predicts," "potential," or "continue" or the negative of these terms or other comparable terminology. 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, 2025, 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, provide 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), 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. 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. Divestiture related employee compensation costs - There were non-recurring costs that we excluded from Non-GAAP results relating to employee compensation costs resulting from the divestiture. 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. This non-recurring adjustment has been excluded from the Company's non-GAAP tax rate and non-GAAP financial measures, as management believes exclusion of this item provides more meaningful period-to-period comparisons of ongoing operating performance View original content to download multimedia:https://www.prnewswire.com/news-releases/harmonic-announces-second-quarter-2026-results-302849112.html

Harmonic (HLIT) came out with quarterly earnings of $0.24 per share, beating the Zacks Consensus Estimate of $0.17 per share. This compares to earnings of $0.09 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +41.18%. A quarter ago, it was expected that this video services provider would post earnings of $0.12 per share when it actually produced earnings of $0.17, delivering a surprise of +41.67%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Harmonic, which belongs to the Zacks Communication - Components industry, posted revenues of $133.46 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 10.52%. This compares to year-ago revenues of $138.03 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Harmonic shares have added about 15.8% since the beginning of the year versus the S&P 500's gain of 12.9%. While Harmonic has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Harmonic was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.15 on $121.84 million in revenues for the coming quarter and $0.65 on $486.53 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Communication - Components is currently in the top 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Actelis Networks, Inc. (ASNS), is yet to report results for the quarter ended June 2026. This company is expected to post quarterly loss of $1.00 per share in its upcoming report, which represents a year-over-year change of +52.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Actelis Networks, Inc.'s revenues are expected to be $1.2 million, up 27.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Harmonic Inc. (HLIT) : Free Stock Analysis Report Actelis Networks, Inc. (ASNS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

SAN JOSE, Calif., July 27, 2026 /PRNewswire/ -- Harmonic (NASDAQ: HLIT) today announced it will release its second quarter 2026 financial results after the market close on Wednesday, August 12, 2026. Harmonic will host a live webcast to discuss the Company's results at 2:00 p.m. PT on the same day. The timing of the Company's earnings conference call is to accommodate financial reporting related to the previously announced June 16, 2026 closing of the sale of its Video Business. To participate via telephone, please register in advance using this link, https://register-conf.media-server.com/register/BI6b44bd6531a743fb82a359cc25e46844. Upon registration, telephone participants will receive a confirmation email detailing how to join the audio version of the webcast, including the dial-in number and a unique registrant ID. The live webcast will be available via Harmonic's Investor Relations website at https://investor.harmonicinc.com/. The company suggests participants for both the conference call and those listening via the web dial in or sign on at least 15 minutes in advance of the call. For those unable to participate in the live event, a replay will be available on the same website after 5:00 p.m. PT. Further information about Harmonic and the company's solutions is available at https://www.harmonicinc.com/. About HarmonicHarmonic (NASDAQ: HLIT), the worldwide leader in virtualized broadband solutions, is transforming multi-gigabit connectivity. The company's industry-leading cOS™ virtualized broadband platform, suite of solutions for fiber and DOCSIS, and a growing portfolio of AI-powered network intelligence solutions, enable broadband service providers to simplify operations, deliver exceptional subscriber experiences and expand revenue streams. With thousands of vCMTS servers and hundreds of thousands of RPDs deployed globally, Harmonic powers next-generation broadband services with five-nines reliability. Anchored with a customer-first approach and driven by a legacy of innovation, Harmonic supports broadband service providers at every stage of their network evolution. More information is available at https://www.harmonicinc.com/. Harmonic, the Harmonic logo and other Harmonic marks are owned by Harmonic Inc. or its affiliates. All other trademarks referenced herein are the property of their respective owners. View original content to download multimedia:https://www.prnewswire.com/news-releases/harmonic-announces-reporting-date-for-second-quarter-2026-results-302834366.html

Harmonic (HLIT) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company. The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this video services provider, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. For Harmonic, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: The earnings estimate of $0.16 per share for the current quarter represents a change of +77.8% from the number reported a year ago. Over the last 30 days, the Zacks Consensus Estimate for Harmonic has increased 86.98% because five estimates have moved higher compared to no negative revisions. For the full year, the company is expected to earn $0.63 per share, representing a year-over-year change of +34.0%. In terms of estimate revisions, the trend for the current year also appears quite encouraging for Harmonic. Over the past month, five estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 37.14%. The promising estimate revisions have helped Harmonic earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. Harmonic shares have added 48.7% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Harmonic Inc. (HLIT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research