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]

EARNINGS CONFERENCE CALL FOURTH QUARTER 2024 During the course of this presentation, we will provide projections and other forward-looking statements regarding future events or the future financial performance of Harmonic, including expectations concerning our business strategy for 2025 and beyond, our new stock repurchase program, and our Q1 and full-year 2025 guidance. Such statements are only current expectations and actual events or results may differ materially. We refer you to Harmonic's filings with ...