Core Insights - Harmonic has introduced innovative features to its live sports streaming solution aimed at enhancing fan engagement, protecting content from piracy, and maximizing monetization for service providers and broadcasters [1][2] Group 1: Innovations in Streaming - The new live sports streaming solution includes geo-synced low latency, interactive multiview, AI-driven highlight creation, robust anti-piracy protections, and in-stream ads [1] - The solution allows for low-latency streaming with a geo-redundant architecture, achieving sub-five-second latency without compromising reliability [3] Group 2: Enhancing Fan Engagement - Harmonic is collaborating with technology providers Skreens and VisualOn to offer multiview experiences, enabling fans to watch and interact with multiple live games simultaneously [4] - The solution features automatic scene detection and AI-driven sports clipping for real-time highlight creation, further elevating fan engagement [5] Group 3: Anti-Piracy Measures - To combat sports piracy, Harmonic has integrated forensic watermarking and geo-blocking, along with CDN-level authentication and access control services [6] Group 4: Monetization Strategies - The live sports streaming solution includes in-stream advertising through server-side insertion of addressable ad formats, strategically placed during high- and low-action moments of the game [7] - Automated triggering of in-stream ads from external data feeds or AI-enhanced systems helps maintain viewer engagement and maximizes monetization opportunities for sports publishers [7] Group 5: Upcoming Demonstration - Harmonic will showcase its innovative live sports streaming solution at IBC2025, scheduled for September 12-15 [8]

Core Insights - Harmonic has announced enhanced capabilities for its VOS®360 Ad SaaS solution, focusing on AI-powered contextual ad triggering and advanced programmatic advertising to increase advertising revenue and improve viewer experience [1][2] Group 1: AI-Powered Contextual Ad Triggering - The VOS360 Ad solution introduces AI-driven real-time video analysis to identify high-value monetization moments during live sports, allowing for dynamic insertion of contextually relevant ads [2][3] - This capability transforms the monetization of live sporting events by providing innovative ad inventory to brands and agencies [3] Group 2: Programmatic Advertising - The advancements in VOS360 Ad facilitate programmatic advertising, enabling broadcasters to leverage the efficiency of the digital ad ecosystem, unlocking new demand and boosting ad revenues [4] - The solution integrates seamlessly with major demand-side and supply-side platforms, including Google Ad Manager and Magnite SpringServe, to streamline programmatic ad delivery [5] Group 3: Market Position and Future Demonstrations - Harmonic is positioned as a leader in virtualized broadband and video delivery solutions, aiming to revolutionize how media companies monetize content [7] - The latest innovations will be showcased at IBC2025, highlighting the company's commitment to advancing advertising technology [6]

Company Overview - Harmonic is a global leader in virtualized broadband and video delivery solutions, enabling media companies and service providers to deliver ultra-high-quality video streaming and broadcast services to consumers worldwide [2] - The company has revolutionized broadband networking with the industry's first virtualized broadband solution, allowing operators to deploy gigabit internet service more flexibly to consumers' homes and mobile devices [2] - Harmonic simplifies OTT video delivery through innovative cloud and software platforms, and powers the delivery of gigabit internet services, changing how media companies and service providers monetize live and on-demand content across various screens [2] Upcoming Events - Harmonic's President and CEO, Nimrod Ben-Natan, along with CFO Walter Jankovic, will host investor meetings at the Jefferies Semiconductor, IT Hardware & Communications Technology Conference in Chicago, IL, on August 26, 2025 [1]

Core Insights - Globo, Brazil's largest video streaming platform, is utilizing Harmonic's technology for low-latency live streaming during the 2025 Campeonato Brasileiro Série A, ensuring high video quality and near-real-time viewing experiences [1][2] - The partnership emphasizes Harmonic's leadership in live sports streaming technology, showcasing their commitment to enhancing viewer experiences across various platforms [3] Group 1: Technology and Implementation - Harmonic's VOS®360 Media SaaS is being used to streamline media processing and streaming delivery for over 300 matches across 38 rounds of the championship [2] - Globo's selection of Harmonic was based on a rigorous evaluation process, highlighting the need for broadcast-grade performance, cloud flexibility, and exceptional DevOps support [2] - The deployment involved collaboration between multiple teams at Globo and Harmonic, focusing on video system adjustments, CDN fine-tuning, and player compatibility [2] Group 2: Market Impact and Future Prospects - The collaboration sets a new benchmark for premium sports streaming delivery in Brazil, a country known for its passionate football culture [3] - Harmonic plans to showcase its innovative streaming solutions at upcoming industry events, including SET Expo 2025 and IBC2025, indicating ongoing engagement in the market [3][4] - Harmonic is recognized as a leader in virtualized broadband and video delivery solutions, enabling media companies to deliver ultra-high-quality streaming services globally [4]

Core Insights - Harmonic reported Q2 2025 non-GAAP earnings per share of $0.09, significantly exceeding analyst expectations of $0.018, marking a 396.5% beat [1] - The company's GAAP revenue for the quarter was $138.0 million, surpassing analyst estimates by 8%, although year-on-year revenue remained virtually flat [1][5] - Management described the quarter as one of strong execution amid volatile market conditions and tariff-related uncertainties [1] Financial Performance - Non-GAAP net income increased by 10.8% year-on-year to $10.3 million, while adjusted EBITDA grew by 5.6% to $17.0 million [2][5] - Non-GAAP gross margin improved to 54.1%, up from 53.1% in Q2 2024 [2][5] - Bookings surged over 100% year-on-year to $158.4 million, although backlog and deferred revenue decreased to $504.5 million from $613.1 million in Q2 2024 [8] Segment Analysis - The Broadband segment experienced a revenue decline of 6.5% to $86.9 million, with a non-GAAP gross margin drop to 46.5% due to unfavorable product mix and tariff costs [6] - The Video segment revenue grew by 11.6% to $51.1 million, with non-GAAP gross margin improving to 67.0% and adjusted EBITDA reaching $6.2 million [7] - Video SaaS revenue hit a record $15.4 million, driven by strong demand in live sports streaming [7] Strategic Focus - Harmonic's strategy emphasizes software-led transformation, particularly through its cOS virtualized broadband platform and VOS360 SaaS for video [4] - The company aims to innovate in rapidly evolving technologies and expand its international presence beyond North America [4] Outlook and Guidance - The company anticipates subdued revenue in the Broadband segment, with non-GAAP gross margin expected between 52.5% and 53.8% and earnings per share projected in the $0.02 to $0.07 range for Q3 2025 [12] - Harmonic withdrew its full-year 2025 guidance due to uncertainties surrounding U.S. import tariffs and macroeconomic conditions [13]

Core Insights - Harmonic (HLIT) reported quarterly earnings of $0.09 per share, exceeding the Zacks Consensus Estimate of $0.03 per share, and showing an increase from $0.08 per share a year ago, resulting in an earnings surprise of +200.00% [1] - The company achieved revenues of $138.03 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 6.01%, although this represents a slight decline from year-ago revenues of $138.74 million [2] - Harmonic has consistently surpassed consensus EPS estimates over the last four quarters, indicating strong performance in earnings [2] Earnings Outlook - The future performance of Harmonic's stock will largely depend on management's commentary during the earnings call and the sustainability of the stock's immediate price movement based on the recently released numbers [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.14 on revenues of $153.77 million, and for the current fiscal year, it is $0.53 on revenues of $604.17 million [7] Industry Context - The Communication - Components industry, to which Harmonic belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - The performance of Harmonic's stock may also be influenced by the overall industry outlook, as empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions [5][8]

Financial Data and Key Metrics Changes - Total revenue for the second quarter was $138 million, exceeding guidance, with a year-over-year increase in EPS from $0.08 to $0.09 [19][5] - Free cash flow was negative at $15.5 million, but cash balance increased to $123.9 million, up $78 million year-over-year [19][24] - Total company gross margin was 54.1%, up 100 basis points year-over-year, while broadband gross margin was 46.5%, down 110 basis points [24][25] Business Line Data and Key Metrics Changes - Broadband revenue was $86.9 million with adjusted EBITDA of $10.8 million, reflecting industry headwinds [20] - Video segment revenue was $51.1 million, up 11.6% year-over-year, with SaaS streaming revenue reaching a record $15.4 million [20][16] - The company added four new logos in broadband, including a significant Tier two North American operator [8][9] Market Data and Key Metrics Changes - Rest of world revenue grew significantly year-over-year, contributing to a more diversified revenue stream [20][9] - The company reported a strong backlog and deferred revenue of $504.5 million, indicating consistent customer demand [5][27] Company Strategy and Development Direction - The company is focused on accelerating the adoption of next-generation virtualized broadband networks and enhancing competitive positioning [7][14] - The recently passed OBBBA is expected to incentivize investments in broadband networks over the next several years [8] - The company aims to leverage its unified DOCSIS 4.0 technology and fiber solutions to drive future growth [12][14] Management's Comments on Operating Environment and Future Outlook - Management expects revenue growth to resume in 2026, supported by unified DOCSIS 4.0 adoption and customer ramp readiness [6][28] - The competitive environment is becoming more challenging, prompting customers to prioritize network upgrades [42] - Management remains cautious about the near-term outlook due to macroeconomic factors and potential tariff impacts [31][32] Other Important Information - The company repurchased $14 million of common shares in the quarter, totaling $50.1 million under the current program [5][21] - The company has a strong balance sheet with ample liquidity, including $123.9 million in cash and $82 million available under its credit facility [23][24] Q&A Session Summary Question: Strength from rest of world customers - Management indicated that the rest of world revenue is significantly stronger than 50% of total revenue, with Comcast representing 39% of total revenue [36] Question: Outlook for 2026 growth - Management sees positive indicators for 2026, with expectations of tailwinds from unified DOCSIS 4.0 and customer ramp readiness [39][41] Question: DOCSIS 4.0 readiness and product platform progress - Management reported good progress in DOCSIS 4.0 readiness, with early shipments planned for the fourth quarter [48][50] Question: Impact of Charter's CapEx cuts - Management noted that Charter's network evolution is still a priority, despite the CapEx cuts, indicating ongoing importance for service delivery [51] Question: Strong bookings and cautious guidance - Management confirmed strong bookings across multiple customers, including rest of world customers, but remains cautious about guidance due to uncertainties [58][60] Question: Tariff situation and potential impacts - Management stated that the tariff impact for Q3 is expected to be less than $1 million, with ongoing efforts to optimize the supply chain [68][70] Question: Q4 expectations and seasonality - Management anticipates some sequential growth from Q3 to Q4 but is not providing specific guidance due to uncertainties [76][78]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $138 million, exceeding guidance, with EPS rising from $0.08 to $0.09 year over year [19][32] - Free cash flow was negative at $15.5 million, but cash balance increased to $123.9 million, up $78 million from the same quarter last year [19][22] - Total company gross margin was 54.1%, up 100 basis points year over year, while broadband gross margin was 46.5%, down 110 basis points [23][24] Business Line Data and Key Metrics Changes - Broadband revenue was $86.9 million with adjusted EBITDA of $10.8 million, reflecting industry headwinds [20][32] - Video segment revenue was $51.1 million, up 11.6% year over year, with SaaS streaming revenue reaching a record $15.4 million [16][20] - The company repurchased $14 million of common shares in Q2, totaling $50.1 million under the current program [5][22] Market Data and Key Metrics Changes - Rest of world revenue grew significantly year over year, contributing to improved diversification [20][32] - The company ended Q2 with a backlog and deferred revenue of $504.5 million, indicating strong customer demand [5][26] - The company noted a strong order book with Q2 bookings at $158.4 million and a book-to-bill ratio of 1.1 [24][25] Company Strategy and Development Direction - The company is focused on accelerating the adoption of next-generation virtualized broadband networks and enhancing competitive positioning [6][10] - The recently passed OBBBA is expected to incentivize investments in broadband networks over the next several years [7][23] - The company aims to continue investing in inventory to support expected growth in broadband, particularly in the rest of world markets [21][22] Management Comments on Operating Environment and Future Outlook - Management expects revenue growth to resume in 2026, supported by Unified DOCSIS 4.0 adoption and customer ramp readiness [6][19] - The tariff situation remains fluid, but the actual impact in Q2 was less than anticipated, with less than $1 million affecting broadband [27][28] - Management remains cautious about Q3 guidance due to macroeconomic factors but anticipates some sequential growth from Q3 to Q4 [30][75] Other Important Information - The company is seeing strong momentum in both broadband and video segments, with ongoing innovation and customer expansion [12][14] - The company highlighted the importance of network evolution for customers to deliver enhanced services [40][49] Q&A Session Summary Question: Strength from rest of world customers - Management indicated that rest of world revenue is significantly stronger than 50% of total revenue, reflecting improved diversification [34][35] Question: Optimism for 2026 growth - Management noted that headwinds are turning into tailwinds, with positive indicators for 2026 growth, but refrained from providing specific forecasts [36][39] Question: DOCSIS 4.0 readiness - Management confirmed good progress in DOCSIS 4.0 readiness, with early shipments planned for the fourth quarter [44][46] Question: Impact of Charter's CapEx cuts - Management acknowledged Charter's CapEx cuts but emphasized the importance of network evolution for service delivery [48][49] Question: Strong bookings and cautious guidance - Management explained that strong bookings are a mix across various customers, including rest of world, but guidance remains cautious due to uncertainties [52][75] Question: Tariff impacts and manufacturing flexibility - Management stated that current tariff impacts are minimal, with ongoing evaluations of manufacturing options to mitigate future risks [66][68]

Q2 2025 Financial Performance - Total revenue reached $138 million, a slight decrease of 0.5% year-over-year[5,29] - Broadband revenue was $86.9 million, down 6.5% from the previous year[5,29] - Video revenue increased to $51.1 million, up 11.6% year-over-year[5,29] - SaaS revenue within the Video segment hit a record $15.4 million, a 10.1% increase from the prior year[26,29] - The company's cash balance stands at $124 million, a significant increase from $46 million in Q2 2024[10,29] - Share repurchases totaled $14 million in Q2 2025, bringing the year-to-date total to $50 million[10] Q3 2025 Financial Guidance - The company anticipates consolidated net revenue to be in the range of $120 million to $135 million[36] - Broadband revenue is projected to be between $75 million and $85 million, while Video revenue is expected to be $45 million to $50 million[36] - The company expects earnings per share (EPS) to be between $0.02 and $0.07[36] Strategic Outlook - The company anticipates a revenue growth rebound in 2026, driven by Unified 4.0, customer ramps, and recent wins[10,38] - The company has a strong liquidity position, with $124 million in cash and an $82 million undrawn credit facility[31]

[Executive Summary & Q2 2025 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q2%202025%20Highlights) Harmonic Inc. announced unaudited Q2 2025 results, exceeding guidance for both broadband and video revenue and profitability, with video maintaining growth and Unified DOCSIS 4.0 progress signaling 2026 tailwinds [Press Release Overview](index=1&type=section&id=Press%20Release%20Overview) Harmonic Inc. announced unaudited Q2 2025 results, exceeding guidance for both broadband and video revenue and profitability, with video maintaining growth and Unified DOCSIS 4.0 progress signaling 2026 tailwinds - Harmonic Inc. achieved strong Q2 2025 results, with **revenue and profitability exceeding guidance** for both broadband and video segments[1](index=1&type=chunk)[2](index=2&type=chunk) - Video business maintained growth momentum, while broadband upgrade activities are expected to be modest in 2025, with positive Unified DOCSIS 4.0 progress anticipated to drive growth in 2026[2](index=2&type=chunk) [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) The company achieved significant financial improvement in Q2 2025, with GAAP net income and EPS swinging to profit, Non-GAAP metrics showing growth, substantial cash increase, and share repurchases Q2 2025 Key Financial Data (GAAP vs. Non-GAAP) | Metric | Q2 2025 (GAAP) | Q2 2024 (GAAP) | Change (GAAP) | Q2 2025 (Non-GAAP) | Q2 2024 (Non-GAAP) | Change (Non-GAAP) | | :-------------------------------- | :------------- | :------------- | :------------ | :----------------- | :----------------- | :---------------- | | **Net Revenue (million $)** | $138.0 | $138.7 | -0.5% | * | * | * | | **Broadband Revenue (million $)** | $86.9 | $92.9 | -6.5% | * | * | * | | **Video Revenue (million $)** | $51.1 | $45.8 | +11.6% | * | * | * | | **Gross Margin (%)** | 53.5% | 52.9% | +0.6 pp | 54.1% | 53.1% | +1.0 pp | | **Operating Income (Loss) (million $)** | $3.9 | $(15.6) | Swing to Profit | $13.9 | $12.2 | +13.9% | | **Net Income (Loss) (million $)** | $2.9 | $(12.5) | Swing to Profit | $10.3 | $9.3 | +10.8% | | **Non-GAAP Adjusted EBITDA (million $)** | * | * | * | $17.0 | $16.1 | +5.6% | | **Net Income (Loss) Per Share ($)** | $0.03 | $(0.11) | Swing to Profit | $0.09 | $0.08 | +12.5% | | **Backlog and Deferred Revenue at Period End (million $)** | $504.5 | $613.1 | -17.7% | * | * | * | | **Cash and Cash Equivalents at Period End (million $)** | $123.9 | $45.9 | +170.0% | * | * | * | - The company repurchased approximately **1.6 million shares** of common stock for a total of **$14 million**[5](index=5&type=chunk) [Q2 2025 Business Highlights](index=1&type=section&id=Q2%202025%20Business%20Highlights) Harmonic advanced in both broadband and video, with widespread cOS solution deployment, new customer acquisition, product launches, a breakthrough DOCSIS 4.0 demo, and record video SaaS revenue - cOS solutions are commercially deployed with **136 customers**, serving **35.3 million cable modems**[5](index=5&type=chunk) - Four new broadband customers were added, including **two fiber customers**[5](index=5&type=chunk) - Launched the SeaStar™ optical node, designed to redefine broadband connectivity for low-density multi-dwelling units[5](index=5&type=chunk) - Successfully demonstrated DOCSIS 4.0 technology at CableLabs® interoperability events, achieving a record **14 Gbps downstream speed**[5](index=5&type=chunk) - Video SaaS revenue reached a record **$15.4 million** in Q2, primarily driven by continued growth in sports streaming[5](index=5&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) [About Harmonic Inc.](index=3&type=section&id=About%20Harmonic%20Inc.) Harmonic (NASDAQ: HLIT) is a global leader in virtualized broadband and video delivery solutions, enabling media companies and service providers to deliver ultra-high-quality video streaming and broadcast services to consumers worldwide - Harmonic is a **global leader** in virtualized broadband and video delivery solutions[11](index=11&type=chunk) - The company enables customers to deliver gigabit internet services and OTT video streaming, monetizing content through virtualized broadband solutions and innovative cloud and software platforms[11](index=11&type=chunk) [Legal Notice Regarding Forward-Looking Statements](index=3&type=section&id=Legal%20Notice%20Regarding%20Forward-Looking%20Statements) This press release contains forward-looking statements regarding future performance, where actual results may differ materially due to various risks including customer concentration, capital expenditure delays, and market changes - Forward-looking statements involve expectations for future **net revenue, gross margin, operating expenses, Adjusted EBITDA, tax rates, and net income per share**[12](index=12&type=chunk) - Actual results may differ materially due to various risks and uncertainties, including customer concentration, capital expenditure delays, lower-than-expected product sales, market and technology trend changes, tariffs, product development, international operations, exchange rate fluctuations, supply chain issues, and competition[12](index=12&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) Harmonic will host a conference call on July 28, 2025, at 2:00 PM PT (5:00 PM ET) to discuss financial results, with live webcast and replay available on the investor relations website - The conference call will be held on **July 28, 2025, at 2:00 PM PT (5:00 PM ET)**[10](index=10&type=chunk) - Live webcast and replay will be available on Harmonic's investor relations website, with phone participation requiring prior registration[10](index=10&type=chunk) [Financial Performance Overview](index=2&type=section&id=Financial%20Performance%20Overview) [Select Financial Results (Q2 2025, Q1 2025, Q2 2024)](index=2&type=section&id=Select%20Financial%20Results%20(Q2%202025%2C%20Q1%202025%2C%20Q2%202024)) This section presents Harmonic's key GAAP and Non-GAAP financial data for Q2 2025, Q1 2025, and Q2 2024, including net revenue, net income (loss), EPS, Adjusted EBITDA, bookings, backlog, and cash Select Financial Results | Metric | Q2 2025 (GAAP) (million $) | Q1 2025 (GAAP) (million $) | Q2 2024 (GAAP) (million $) | Q2 2025 (Non-GAAP) (million $) | Q1 2025 (Non-GAAP) (million $) | Q2 2024 (Non-GAAP) (million $) | | :-------------------------------- | :------------- | :------------- | :------------- | :----------------- | :----------------- | :----------------- | | **Net Revenue** | $138.0 | $133.1 | $138.7 | * | * | * | | **Net Income (Loss)** | $2.9 | $5.9 | $(12.5) | $10.3 | $13.4 | $9.3 | | **Net Income (Loss) Per Share ($)** | $0.03 | $0.05 | $(0.11) | $0.09 | $0.11 | $0.08 | | **Adjusted EBITDA** | * | * | * | $17.0 | $21.1 | $16.1 | | **Bookings** | $158.4 | $113.7 | $72.4 | * | * | * | | **Backlog and Deferred Revenue at Period End** | $504.5 | $485.1 | $613.1 | * | * | * | | **Cash and Cash Equivalents at Period End** | $123.9 | $148.7 | $45.9 | * | * | * | [Preliminary GAAP Revenue Information](index=9&type=section&id=Preliminary%20GAAP%20Revenue%20Information) Harmonic's GAAP revenue is segmented by geography and market, with Americas as the primary source and service providers as the largest market, showing growth in broadcast and media Revenue by Geographic Region (Three Months) | Geographic Region | Q2 2025 (thousands of dollars) | Percentage (%) | Q1 2025 (thousands of dollars) | Percentage (%) | Q2 2024 (thousands of dollars) | Percentage (%) | | :---------------- | :------------------- | :------------- | :------------------- | :------------- | :------------------- | :------------- | | Americas | $108,205 | 79 % | $101,681 | 76 % | $109,597 | 79 % | | EMEA | $19,888 | 14 % | $23,172 | 18 % | $22,680 | 16 % | | Asia Pacific | $9,934 | 7 % | $8,282 | 6 % | $6,463 | 5 % | | **Total** | **$138,027** | **100 %** | **$133,135** | **100 %** | **$138,740** | **100 %** | Revenue by Market (Three Months) | Market | Q2 2025 (thousands of dollars) | Percentage (%) | Q1 2025 (thousands of dollars) | Percentage (%) | Q2 2024 (thousands of dollars) | Percentage (%) | | :------- | :------------------- | :------------- | :------------------- | :------------- | :------------------- | :------------- | | Service Provider | $94,851 | 69 % | $94,202 | 71 % | $104,429 | 75 % | | Broadcast and Media | $43,176 | 31 % | $38,933 | 29 % | $34,311 | 25 % | | **Total** | **$138,027** | **100 %** | **$133,135** | **100 %** | **$138,740** | **100 %** | Revenue by Geographic Region (Six Months) | Geographic Region | YTD Q2 2025 (thousands of dollars) | Percentage (%) | YTD Q2 2024 (thousands of dollars) | Percentage (%) | | :---------------- | :----------------------- | :------------- | :----------------------- | :------------- | | Americas | $209,886 | 77 % | $202,628 | 78 % | | EMEA | $43,060 | 16 % | $46,240 | 18 % | | Asia Pacific | $18,216 | 7 % | $11,932 | 4 % | | **Total** | **$271,162** | **100 %** | **$260,800** | **100 %** | Revenue by Market (Six Months) | Market | YTD Q2 2025 (thousands of dollars) | Percentage (%) | YTD Q2 2024 (thousands of dollars) | Percentage (%) | | :------- | :----------------------- | :------------- | :----------------------- | :------------- | | Service Provider | $189,053 | 70 % | $191,122 | 73 % | | Broadcast and Media | $82,109 | 30 % | $69,678 | 27 % | | **Total** | **$271,162** | **100 %** | **$260,800** | **100 %** | [Preliminary Segment Information](index=10&type=section&id=Preliminary%20Segment%20Information) Harmonic's business is divided into broadband and video segments, with video showing significantly higher gross margins and year-over-year revenue growth in Q2 2025 Segment Revenue and Gross Margin (Three Months) | Metric | Q2 2025 Broadband (thousands of dollars) | Q2 2025 Video (thousands of dollars) | Q1 2025 Broadband (thousands of dollars) | Q1 2025 Video (thousands of dollars) | Q2 2024 Broadband (thousands of dollars) | Q2 2024 Video (thousands of dollars) | | :----------- | :----------------------------- | :--------------------------- | :----------------------------- | :--------------------------- | :----------------------------- | :--------------------------- | | **Net Revenue** | $86,918 | $51,109 | $84,878 | $48,257 | $92,937 | $45,803 | | **Gross Profit** | $40,412 | $34,249 | $47,080 | $32,055 | $44,236 | $29,494 | | **Gross Margin (%)** | 46.5 % | 67.0 % | 55.5 % | 66.4 % | 47.6 % | 64.4 % | Segment Revenue and Gross Margin (Six Months) | Metric | YTD Q2 2025 Broadband (thousands of dollars) | YTD Q2 2025 Video (thousands of dollars) | YTD Q2 2024 Broadband (thousands of dollars) | YTD Q2 2024 Video (thousands of dollars) | | :----------- | :------------------------------- | :----------------------------- | :------------------------------- | :----------------------------- | | **Net Revenue** | $171,796 | $99,366 | $171,834 | $88,966 | | **Gross Profit** | $87,492 | $66,304 | $81,730 | $56,063 | | **Gross Margin (%)** | 50.9 % | 66.7 % | 47.6 % | 63.0 % | [Financial Guidance](index=2&type=section&id=Financial%20Guidance) [Q3 2025 GAAP Financial Guidance](index=2&type=section&id=Q3%202025%20GAAP%20Financial%20Guidance) Harmonic projects Q3 2025 GAAP net revenue between $120 million and $135 million, with gross margin of 52.5% to 53.8%, and net income (loss) per share between -$0.04 and $0 Q3 2025 GAAP Financial Guidance | Metric | Low End (million $) | High End (million $) | | :--------------------- | :------------------ | :----------------- | | **Net Revenue** | $120 | $135 | | **Broadband Revenue** | $75 | $85 | | **Video Revenue** | $45 | $50 | | **Gross Margin (%)** | 52.5 % | 53.8 % | | **Gross Profit** | $63 | $73 | | **Tax Rate (%)** | 43 % | 43 % | | **Net Income (Loss)** | $(4) | $— | | **Net Income (Loss) Per Share ($)** | $(0.04) | $— | | **Diluted Shares Outstanding (million)** | 113.9 | 114.7 | - GAAP gross profit guidance includes approximately **$1 million** impact from tariffs[7](index=7&type=chunk) [Q3 2025 Non-GAAP Financial Guidance](index=2&type=section&id=Q3%202025%20Non-GAAP%20Financial%20Guidance) The company anticipates Q3 2025 Non-GAAP gross margin between 52.5% and 53.8%, Adjusted EBITDA between $7 million and $14 million, and Non-GAAP net income per share of $0.02 to $0.07 Q3 2025 Non-GAAP Financial Guidance | Metric | Low End (million $) | High End (million $) | | :--------------------- | :------------------ | :----------------- | | **Gross Margin (%)** | 52.5 % | 53.8 % | | **Broadband Gross Margin (%)** | 45.0 % | 46.0 % | | **Video Gross Margin (%)** | 65.0 % | 67.0 % | | **Gross Profit** | $63 | $73 | | **Broadband Gross Profit** | $34 | $39 | | **Video Gross Profit** | $29 | $34 | | **Adjusted EBITDA** | $7 | $14 | | **Broadband Adjusted EBITDA** | $5 | $9 | | **Video Adjusted EBITDA** | $2 | $5 | | **Tax Rate (%)** | 21 % | 21 % | | **Net Income Per Share ($)** | $0.02 | $0.07 | | **Diluted Shares Outstanding (million)** | 114.7 | 114.7 | - Non-GAAP gross profit guidance includes approximately **$1 million** impact from tariffs[9](index=9&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) [Use and Limitations of Non-GAAP Measures](index=3&type=section&id=Use%20and%20Limitations%20of%20Non-GAAP%20Measures) Harmonic uses Non-GAAP financial measures to supplement GAAP, providing deeper insights into financial and business trends for management's operational decisions, while acknowledging they are not GAAP substitutes and may differ from other companies' metrics - Management utilizes Non-GAAP measures to understand, manage, and evaluate the business, and to formulate operating budgets and decisions[13](index=13&type=chunk) - Non-GAAP measures are not substitutes for GAAP, may differ from those used by other companies, and should not be considered in isolation but evaluated with corresponding GAAP measures[14](index=14&type=chunk)[15](index=15&type=chunk) [Non-GAAP Adjustments Explained](index=4&type=section&id=Non-GAAP%20Adjustments%20Explained) Harmonic makes several adjustments to GAAP metrics for Non-GAAP reporting, primarily excluding stock-based compensation, restructuring charges, non-cash interest, depreciation, non-recurring consulting fees, and asset impairments to reflect core business performance - Non-GAAP adjustments include **stock-based compensation, restructuring and related charges, non-cash interest expense related to convertible notes, depreciation, non-recurring consulting fees, asset impairment and related charges, and the income tax effect of Non-GAAP adjustments**[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - These adjustments aim to provide a more comparable view of long-term core business performance and exclude the impact of non-recurring or non-cash items[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) [Preliminary Condensed Consolidated Balance Sheets](index=5&type=section&id=Preliminary%20Condensed%20Consolidated%20Balance%20Sheets) As of June 27, 2025, Harmonic's total assets were $783.3 million, a slight decrease from December 31, 2024, with increased cash and cash equivalents but significantly reduced net accounts receivable Preliminary Condensed Consolidated Balance Sheets (Selected) | Item | June 27, 2025 (thousands of dollars) | December 31, 2024 (thousands of dollars) | | :----------------------- | :----------------------------------- | :----------------------------------- | | **Assets** | | | | Cash and cash equivalents | 123,918 | 101,457 | | Accounts receivable, net | 120,665 | 178,013 | | Inventories | 71,138 | 64,004 | | Total current assets | 342,857 | 366,076 | | Goodwill | 241,718 | 236,876 | | **Total Assets** | **783,347** | **796,506** | | **Liabilities and Stockholders' Equity** | | | | Deferred revenue | 51,188 | 47,069 | | Total current liabilities | 172,209 | 167,569 | | Total liabilities | 336,945 | 331,248 | | Total stockholders' equity | 446,402 | 465,258 | | **Total Liabilities and Stockholders' Equity** | **783,347** | **796,506** | [Preliminary Condensed Consolidated Statements of Operations](index=6&type=section&id=Preliminary%20Condensed%20Consolidated%20Statements%20of%20Operations) In Q2 2025, Harmonic's net revenue was $138.0 million, with operating income of $3.9 million and net income of $2.9 million, marking a significant improvement from prior year's losses, driven by enhanced gross profit and reduced operating expenses Preliminary Condensed Consolidated Statements of Operations (Selected) | Item | Three Months Ended June 27, 2025 (thousands of dollars) | Three Months Ended June 28, 2024 (thousands of dollars) | Six Months Ended June 27, 2025 (thousands of dollars) | Six Months Ended June 28, 2024 (thousands of dollars) | | :----------------------- | :-------------------------------------- | :-------------------------------------- | :------------------------------------ | :------------------------------------ | | **Total Net Revenue** | $138,027 | $138,740 | $271,162 | $260,800 | | Equipment and integration revenue | $94,067 | $94,184 | $185,608 | $175,779 | | SaaS and services revenue | $43,960 | $44,556 | $85,554 | $85,021 | | **Total Gross Profit** | $73,793 | $73,457 | $152,367 | $136,538 | | **Operating Expenses** | $69,923 | $89,087 | $138,370 | $161,694 | | Research and development expenses | $29,442 | $28,784 | $60,791 | $59,489 | | Selling, general and administrative expenses | $38,194 | $39,821 | $75,292 | $78,686 | | **Operating Income (Loss)** | $3,870 | $(15,630) | $13,997 | $(25,156) | | **Net Income (Loss)** | $2,871 | $(12,532) | $8,811 | $(20,621) | | **Diluted Net Income (Loss) Per Share ($)** | $0.03 | $(0.11) | $0.08 | $(0.18) | [Preliminary Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Preliminary%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 27, 2025, Harmonic's net cash from operating activities significantly increased to $71.9 million, with net cash used in investing activities of $5.7 million and financing activities of $48.9 million, leading to increased cash and restricted cash Preliminary Condensed Consolidated Statements of Cash Flows (Selected) | Item | Six Months Ended June 27, 2025 (thousands of dollars) | Six Months Ended June 28, 2024 (thousands of dollars) | | :------------------------------------------------ | :------------------------------------ | :------------------------------------ | | **Net Cash Provided by Operating Activities** | $71,908 | $4,666 | | **Net Cash Used in Investing Activities** | $(5,672) | $(3,856) | | **Net Cash Used in Financing Activities** | $(48,883) | $(34,923) | | **Effect of Exchange Rate Changes** | $5,132 | $(1,391) | | **Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash** | $22,485 | $(35,504) | | **Cash, Cash Equivalents and Restricted Cash at Period End** | $124,274 | $48,765 | | Comprised of: Cash and cash equivalents | $123,918 | $45,850 | | Comprised of: Restricted cash | $356 | $2,827 | - Net cash used in financing activities primarily included repayment of long-term debt and common stock repurchases, with **$50.102 million** spent on common stock repurchases[29](index=29&type=chunk) [Supplemental Cash Flow Disclosure](index=8&type=section&id=Supplemental%20Cash%20Flow%20Disclosure) For the six months ended June 27, 2025, Harmonic's net income taxes paid were $13.764 million, net interest paid was $2.715 million, and capital expenditures incurred but not yet paid totaled $1.141 million Supplemental Cash Flow Disclosure (Six Months) | Item | Six Months Ended June 27, 2025 (thousands of dollars) | Six Months Ended June 28, 2024 (thousands of dollars) | | :----------------------- | :------------------------------------ | :------------------------------------ | | **Income Taxes Paid, Net** | $13,764 | $11,407 | | **Interest Paid, Net** | $2,715 | $1,895 | | **Capital Expenditures Incurred But Not Yet Paid** | $1,141 | $282 | [GAAP to Non-GAAP Reconciliations](index=11&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) [Q2 2025 GAAP to Non-GAAP Reconciliations](index=11&type=section&id=Q2%202025%20GAAP%20to%20Non-GAAP%20Reconciliations) In Q2 2025, Harmonic's GAAP net income of $2.871 million adjusted to Non-GAAP net income of $10.3 million, with Non-GAAP gross margin at 54.1% and operating income at 10.1% of revenue, after accounting for stock-based compensation, restructuring, and other items Q2 2025 GAAP to Non-GAAP Reconciliations (Selected) | Item | GAAP (thousands of dollars) | Adjustments (thousands of dollars) | Non-GAAP (thousands of dollars) | | :----------------------- | :-------------------------- | :------------------------- | :------------------------ | | **Revenue** | $138,027 | $— | $138,027 | | **Gross Profit** | $73,793 | $868 | $74,661 | | **Total Operating Expenses** | $69,923 | $(9,194) | $60,729 | | **Operating Income** | $3,870 | $10,062 | $13,932 | | **Net Income** | $2,871 | $7,429 | $10,300 | | **Gross Margin (%)** | 53.5 % | | 54.1 % | | **Operating Income (%)** | 2.8 % | | 10.1 % | | **Diluted Net Income Per Share ($)** | $0.03 | | $0.09 | [Q1 2025 GAAP to Non-GAAP Reconciliations](index=11&type=section&id=Q1%202025%20GAAP%20to%20Non-GAAP%20Reconciliations) In Q1 2025, Harmonic's GAAP net income of $5.94 million adjusted to Non-GAAP net income of $13.387 million, with Non-GAAP gross margin at 59.4% and operating income at 14.0% of revenue, after accounting for stock-based compensation and tax impacts Q1 2025 GAAP to Non-GAAP Reconciliations (Selected) | Item | GAAP (thousands of dollars) | Adjustments (thousands of dollars) | Non-GAAP (thousands of dollars) | | :----------------------- | :-------------------------- | :------------------------- | :------------------------ | | **Revenue** | $133,135 | $— | $133,135 | | **Gross Profit** | $78,574 | $561 | $79,135 | | **Total Operating Expenses** | $68,447 | $(7,904) | $60,543 | | **Operating Income** | $10,127 | $8,465 | $18,592 | | **Net Income** | $5,940 | $7,447 | $13,387 | | **Gross Margin (%)** | 59.0 % | | 59.4 % | | **Operating Income (%)** | 7.6 % | | 14.0 % | | **Diluted Net Income Per Share ($)** | $0.05 | | $0.11 | [Q2 2024 GAAP to Non-GAAP Reconciliations](index=12&type=section&id=Q2%202024%20GAAP%20to%20Non-GAAP%20Reconciliations) In Q2 2024, Harmonic's GAAP net loss of $12.532 million adjusted to Non-GAAP net income of $9.279 million, with Non-GAAP gross margin at 53.1% and operating income at 8.8% of revenue, after accounting for various non-GAAP adjustments Q2 2024 GAAP to Non-GAAP Reconciliations (Selected) | Item | GAAP (thousands of dollars) | Adjustments (thousands of dollars) | Non-GAAP (thousands of dollars) | | :----------------------- | :-------------------------- | :------------------------- | :------------------------ | | **Revenue** | $138,740 | $— | $138,740 | | **Gross Profit** | $73,457 | $273 | $73,730 | | **Total Operating Expenses** | $89,087 | $(27,569) | $61,518 | | **Operating Income (Loss)** | $(15,630) | $27,842 | $12,212 | | **Net Income (Loss)** | $(12,532) | $21,811 | $9,279 | | **Gross Margin (%)** | 52.9 % | | 53.1 % | | **Operating Income (%)** | (11.3)% | | 8.8 % | | **Diluted Net Income (Loss) Per Share ($)** | $(0.11) | | $0.08 | [Six Months Ended June 27, 2025 GAAP to Non-GAAP Reconciliations](index=12&type=section&id=Six%20Months%20Ended%20June%2027%2C%202025%20GAAP%20to%20Non-GAAP%20Reconciliations) For the six months ended June 27, 2025, Harmonic's GAAP net income of $8.811 million adjusted to Non-GAAP net income of $23.687 million, with Non-GAAP gross margin at 56.7% and operating income at 12.0% of revenue, after various non-GAAP adjustments Six Months Ended June 27, 2025 GAAP to Non-GAAP Reconciliations (Selected) | Item | GAAP (thousands of dollars) | Adjustments (thousands of dollars) | Non-GAAP (thousands of dollars) | | :----------------------- | :-------------------------- | :------------------------- | :------------------------ | | **Revenue** | $271,162 | $— | $271,162 | | **Gross Profit** | $152,367 | $1,429 | $153,796 | | **Total Operating Expenses** | $138,370 | $(17,098) | $121,272 | | **Operating Income** | $13,997 | $18,527 | $32,524 | | **Net Income** | $8,811 | $14,876 | $23,687 | | **Gross Margin (%)** | 56.2 % | | 56.7 % | | **Operating Income (%)** | 5.2 % | | 12.0 % | | **Diluted Net Income Per Share ($)** | $0.08 | | $0.21 | [Six Months Ended June 28, 2024 GAAP to Non-GAAP Reconciliations](index=13&type=section&id=Six%20Months%20Ended%20June%2028%2C%202024%20GAAP%20to%20Non-GAAP%20Reconciliations) For the six months ended June 28, 2024, Harmonic's GAAP net loss of $20.621 million adjusted to Non-GAAP net income of $9.661 million, with Non-GAAP gross margin at 52.8% and operating income at 5.2% of revenue, after various non-GAAP adjustments Six Months Ended June 28, 2024 GAAP to Non-GAAP Reconciliations (Selected) | Item | GAAP (thousands of dollars) | Adjustments (thousands of dollars) | Non-GAAP (thousands of dollars) | | :----------------------- | :-------------------------- | :------------------------- | :------------------------ | | **Revenue** | $260,800 | $— | $260,800 | | **Gross Profit** | $136,538 | $1,255 | $137,793 | | **Total Operating Expenses** | $161,694 | $(37,356) | $124,338 | | **Operating Income (Loss)** | $(25,156) | $38,611 | $13,455 | | **Net Income (Loss)** | $(20,621) | $30,282 | $9,661 | | **Gross Margin (%)** | 52.4 % | | 52.8 % | | **Operating Income (%)** | (9.6)% | | 5.2 % | | **Diluted Net Income (Loss) Per Share ($)** | $(0.18) | | $0.08 | [Calculation of Adjusted EBITDA by Segment (Historical)](index=14&type=section&id=Calculation%20of%20Adjusted%20EBITDA%20by%20Segment%20(Historical)) This section presents historical Adjusted EBITDA and margins for Harmonic's broadband and video segments, showing video's consistent positive and higher margins, while broadband's Adjusted EBITDA margin decreased in Q2 2025 Calculation of Adjusted EBITDA by Segment (Three Months) | Metric | Q2 2025 Broadband (thousands of dollars) | Q2 2025 Video (thousands of dollars) | Q1 2025 Broadband (thousands of dollars) | Q1 2025 Video (thousands of dollars) | Q2 2024 Broadband (thousands of dollars) | Q2 2024 Video (thousands of dollars) | | :--------------------- | :------------------------------------- | :----------------------------------- | :------------------------------------- | :----------------------------------- | :------------------------------------- | :----------------------------------- | | **Operating Income (Loss)** | $8,585 | $5,347 | $14,021 | $4,571 | $13,781 | $(1,569) | | **Depreciation** | $1,929 | $743 | $1,964 | $756 | $2,133 | $1,093 | | **Other Non-Operating Income, Net** | $255 | $104 | $(124) | $(48) | $406 | $213 | | **Adjusted EBITDA** | $10,769 | $6,194 | $15,861 | $5,279 | $16,320 | $(263) | | **Revenue** | $86,918 | $51,109 | $84,878 | $48,257 | $92,937 | $45,803 | | **Adjusted EBITDA Margin (%)** | 12.4 % | 12.1 % | 18.7 % | 10.9 % | 17.6 % | (0.6)% | Calculation of Adjusted EBITDA by Segment (Six Months) | Metric | YTD Q2 2025 Broadband (thousands of dollars) | YTD Q2 2025 Video (thousands of dollars) | YTD Q2 2024 Broadband (thousands of dollars) | YTD Q2 2024 Video (thousands of dollars) | | :--------------------- | :----------------------------------- | :--------------------------------- | :----------------------------------- | :--------------------------------- | | **Operating Income (Loss)** | $22,606 | $9,918 | $22,375 | $(8,920) | | **Depreciation** | $3,893 | $1,499 | $4,119 | $2,192 | | **Other Non-Operating Income, Net** | $131 | $56 | $227 | $114 | | **Adjusted EBITDA** | $26,630 | $11,473 | $26,721 | $(6,614) | | **Revenue** | $171,796 | $99,366 | $171,834 | $88,966 | | **Adjusted EBITDA Margin (%)** | 15.5 % | 11.5 % | 15.6 % | (7.4)% | [Net Income (Loss) to Consolidated Segment Adjusted EBITDA Reconciliation (Historical)](index=15&type=section&id=Net%20Income%20(Loss)%20to%20Consolidated%20Segment%20Adjusted%20EBITDA%20Reconciliation%20(Historical)) This section reconciles historical GAAP net income (loss) to Non-GAAP consolidated segment Adjusted EBITDA, adjusting for income taxes, interest, depreciation, stock-based compensation, restructuring, non-recurring consulting fees, and asset impairments Net Income (Loss) to Consolidated Segment Adjusted EBITDA Reconciliation (Three Months) | Item | Q2 2025 (thousands of dollars) | Q1 2025 (thousands of dollars) | Q2 2024 (thousands of dollars) | | :----------------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | **Net Income (Loss) (GAAP)** | $2,871 | $5,940 | $(12,532) | | Provision (Benefit) for income taxes | $105 | $2,541 | $(3,903) | | Interest expense, net | $1,253 | $1,474 | $1,424 | | Depreciation | $2,672 | $2,720 | $3,226 | | **EBITDA** | $6,901 | $12,675 | $(11,785) | | **Adjustments** | | | | | Stock-based compensation | $7,697 | $8,465 | $6,954 | | Restructuring and related charges | $650 | $— | $11,482 | | Non-recurring consulting fees | $78 | $— | $406 | | Lease-related asset impairment and other charges | $1,637 | $— | $9,000 | | **Consolidated Segment Adjusted EBITDA (Non-GAAP)** | $16,963 | $21,140 | $16,057 | | **Revenue** | $138,027 | $133,135 | $138,740 | | **Net Income (Loss) Margin (GAAP) (%)** | 2.1 % | 4.5 % | (9.0)% | | **Consolidated Segment Adjusted EBITDA Margin (Non-GAAP) (%)** | 12.3 % | 15.9 % | 11.6 % | Net Income (Loss) to Consolidated Segment Adjusted EBITDA Reconciliation (Six Months) | Item | YTD Q2 2025 (thousands of dollars) | YTD Q2 2024 (thousands of dollars) | | :----------------------------------- | :--------------------------------- | :--------------------------------- | | **Net Income (Loss) (GAAP)** | $8,811 | $(20,621) | | Provision (Benefit) for income taxes | $2,646 | $(6,352) | | Interest expense, net | $2,727 | $2,147 | | Depreciation | $5,392 | $6,311 | | **EBITDA** | $19,576 | $(18,515) | | **Adjustments** | | | | Stock-based compensation | $16,162 | $13,877 | | Restructuring and related charges | $650 | $14,990 | | Non-recurring consulting fees | $78 | $755 | | Lease-related asset impairment and other charges | $1,637 | $9,000 | | **Consolidated Segment Adjusted EBITDA (Non-GAAP)** | $38,103 | $20,107 | | **Revenue** | $271,162 | $260,800 | | **Consolidated Segment Adjusted EBITDA Margin (Non-GAAP) (%)** | 14.0 % | 7.7 % | [Q3 2025 Financial Guidance GAAP to Non-GAAP Reconciliations](index=16&type=section&id=Q3%202025%20Financial%20Guidance%20GAAP%20to%20Non-GAAP%20Reconciliations) This section provides Q3 2025 financial guidance GAAP to Non-GAAP reconciliations, with key adjustments for stock-based compensation and restructuring charges, projecting Non-GAAP net income (loss) to improve from GAAP's -$4 million to $0 to $2 million to $8 million Q3 2025 Financial Guidance GAAP to Non-GAAP Reconciliations (Selected) | Item | GAAP (Low-High) (million $) | Adjustments (million $) | Non-GAAP (Low-High) (million $) | | :----------------------- | :-------------------------- | :---------------------- | :------------------------------ | | **Gross Profit** | $63 - $73 | $— | $63 - $73 | | **Total Operating Expenses** | $68 - $70 | $(9) | $59 - $61 | | **Operating Income** | $(5) - $3 | $9 | $4 - $11 | | **Net Income (Loss)** | $(4) - $— | $6 - $8 | $2 - $8 | | **Diluted Net Income (Loss) Per Share ($)** | $(0.04) - $— | | $0.02 - $0.07 | - Key adjustments include **stock-based compensation ($8 million)** and **restructuring and related charges ($1 million)**, along with tax impacts[47](index=47&type=chunk) [Q3 2025 Financial Guidance Calculation of Adjusted EBITDA by Segment](index=16&type=section&id=Q3%202025%20Financial%20Guidance%20Calculation%20of%20Adjusted%20EBITDA%20by%20Segment) This section provides Q3 2025 financial guidance for Adjusted EBITDA by segment, projecting broadband Adjusted EBITDA between $5 million and $9 million, and video Adjusted EBITDA between $2 million and $5 million Q3 2025 Financial Guidance Calculation of Adjusted EBITDA by Segment | Metric | Broadband (Low-High) (million $) | Video (Low-High) (million $) | | :--------------------- | :------------------------------- | :--------------------------- | | **Operating Income** | $3 - $7 | $1 - $4 | | **Depreciation** | $2 - $2 | $1 - $1 | | **Segment Adjusted EBITDA** | $5 - $9 | $2 - $5 | [Q3 2025 Financial Guidance Net Income (Loss) to Consolidated Segment Adjusted EBITDA Reconciliation](index=17&type=section&id=Q3%202025%20Financial%20Guidance%20Net%20Income%20(Loss)%20to%20Consolidated%20Segment%20Adjusted%20EBITDA%20Reconciliation) This section reconciles Q3 2025 financial guidance for GAAP net income (loss) to consolidated segment Adjusted EBITDA, adjusting for income taxes, interest, depreciation, stock-based compensation, and restructuring charges Q3 2025 Financial Guidance Net Income (Loss) to Consolidated Segment Adjusted EBITDA Reconciliation | Item | Q3 2025 Financial Guidance (Low-High) (million $) | | :----------------------------------- | :---------------------------------- | | **Net Income (Loss) (GAAP)** | $(4) - $— | | Provision (Benefit) for income taxes | $(2) - $1 | | Interest expense, net | $1 - $1 | | Depreciation | $3 - $3 | | **EBITDA** | $(2) - $5 | | **Adjustments** | | | Stock-based compensation | $8 - $8 | | Restructuring and related charges | $1 - $1 | | **Consolidated Segment Adjusted EBITDA (Non-GAAP)** | $7 - $14 |