Harmonic(US:HLIT)2025-07-28 20:11Executive Summary & Q2 2025 Highlights 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 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 segments12 - 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 20262 Q2 2025 Financial Highlights 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 million5 Q2 2025 Business Highlights 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 modems5 - Four new broadband customers were added, including two fiber customers5 - Launched the SeaStar™ optical node, designed to redefine broadband connectivity for low-density multi-dwelling units5 - Successfully demonstrated DOCSIS 4.0 technology at CableLabs® interoperability events, achieving a record 14 Gbps downstream speed5 - Video SaaS revenue reached a record $15.4 million in Q2, primarily driven by continued growth in sports streaming5 Company Information About Harmonic Inc. 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 solutions11 - The company enables customers to deliver gigabit internet services and OTT video streaming, monetizing content through virtualized broadband solutions and innovative cloud and software platforms11 Legal Notice Regarding Forward-Looking Statements 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 share12 - 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 competition12 Conference Call Information 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 - Live webcast and replay will be available on Harmonic's investor relations website, with phone participation requiring prior registration10 Financial Performance Overview Select Financial Results (Q2 2025, Q1 2025, Q2 2024) 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 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 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 Q3 2025 GAAP Financial Guidance 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 tariffs7 Q3 2025 Non-GAAP Financial Guidance 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 tariffs9 Non-GAAP Financial Measures Use and Limitations of Non-GAAP Measures 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 decisions13 - 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 measures1415 Non-GAAP Adjustments Explained 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 adjustments171819202122 - 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 items1718192021 Consolidated Financial Statements Preliminary Condensed Consolidated Balance Sheets 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 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 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 repurchases29 Supplemental Cash Flow Disclosure 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 Q2 2025 GAAP to Non-GAAP Reconciliations 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 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 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 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 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) 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) 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 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 impacts47 Q3 2025 Financial Guidance Calculation of Adjusted EBITDA by Segment 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 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 |