HARMONIC INC. Q2 FY2025 earnings call

• Financial Results: Second quarter revenue was $138 million, EPS was $0.09 per share. Broadband and Video revenue and profitability exceeded guidance. Cash balance was $123.9 million, and backlog and deferred revenue were $504.5 million.
• Capital Allocation: Priorities include targeted investments, returning capital to shareholders via stock repurchases, and evaluating inorganic growth.
• Innovation: Launched SeaStar optical node for MDUs, demonstrated 14 Gbps throughput on Unified DOCSIS 4.0, Vectra selected Harmonic for broadband transformation, and collaboration with CUJO AI on ultra-low latency broadband.
• Customer Expansion: Added 4 new logos in Broadband, and SaaS streaming platform with ViewLift expanding customer base.

Broadband

• Revenue was $86.9 million for the quarter with a gross margin of 46.5%. Had 136 cOS deployments in production managing 35.3 million connected modems. Added 4 new logos, including a large regional Tier 2 North American broadband operator. Rest of world revenue grew significantly. Fiber had record revenue, launched SeaStar optical node for MDUs, partnered with Vodafone. Unified DOCSIS 4.0 is in real-world deployment, shipped unified RPDs in volume, and demonstrated 14 Gbps throughput.

Video

• Revenue was $51.1 million, up 11.6% year-over-year. Appliance business contributed solid profitability, SaaS streaming revenue reached a record $15.4 million, up 10.1% year-over-year. SaaS streaming platform delivered at scale with high reliability, and partnership with Akamai positions for expanded premium streaming opportunities.

• Anticipate moderate pace of broadband upgrade in near term, but expect revenue growth to resume in 2026 supported by Unified DOCSIS 4.0 adoption, recent wins, and accelerated customer ramps.
• Q3 2025 guidance: Broadband revenue $75M-$85M, gross margin 45%-46%, adjusted EBITDA $5M-$9M; Video revenue $45M-$50M, gross margin 65%-67%, adjusted EBITDA $2M-$5M; total company EPS $0.02-$0.07.
• Tariff impact better than expected in Q2, but remains fluid; will explore options to offset tariff sensitivity.

• Global trade environment remains uncertain. - Tariff situation is fluid and unpredictable, which could impact financial results.

Q: Characterize or quantify ex-Comcast, Charter revenue in Q2.

A: Rest of world is much stronger than 50% on total company basis, customer not listed as >10% customer in last 7 quarters.

Q: Thoughts on 2026 trajectory.

A: See tailwinds from Unified 4.0, rest of world strengths, competitive environment pushing network evolution, OBBBA helping accelerate CapEx investment.

Q: DOCSIS 4.0 Unified readiness and product platform progress.

A: Comcast's Full Duplex progressing well, RF front end entering customer labs in Q3, field trials in Q4, 14 Gbps milestone at CableLabs Interop.

Q: Charter CapEx cut and impact.

A: Charter moving $500M CapEx to next year, but network evolution remains important, step 2 of their program underway.

Q: Booking mix and 2026 growth.

A: Bookings across customers, rest of world included, positive indicators for 2026 growth.

Q: Deployment from inventory and Video pipeline.

A: Deployments from inventories possible, Video pipeline includes existing customers expanding via partners like Akamai and ViewLift.

Q: Tariff impact and offsets.

A: Q3 tariff impact less than $1M, products exempt, options like nearshoring considered, impact minimal on overall business.

Q: Q4 seasonality and 2026 revenue goal.

A: Expect sequential growth Q3 to Q4, too early to comment on 2026 revenue watermark, well positioned but no specific guidance.

Q: Charter inventory and deployment.

A: Can't comment on specific customer's ramp schedule, general customers acquire product based on ramp speed.