The pending $145 million sale of the Video business to MediaKind marks a decisive pivot to a pure-play broadband model, simplifying operations and aligning resources toward high-growth infrastructure opportunities. Record quarterly bookings of $346.9 million were driven by multiyear contracts and significant international diversification, resulting in a 3.5 book-to-bill ratio. Customer diversification accelerated as Rest-of-World revenue grew 33% year-over-year, now representing 41% of total broadband ...

Core Insights - Harmonic Inc. reported strong quarterly bookings in its Broadband business, achieving a book-to-bill ratio of 3.5 in Q4 2025, indicating robust demand and a significant year-over-year increase in backlog, which enhances visibility for 2026 [1][2] - The company anticipates strong revenue growth in Broadband driven by Unified DOCSIS 4.0 deployments and large customer plans, while the Video business, now classified as discontinued operations, exceeded revenue and profitability expectations [1][2] - Harmonic is on track to complete the sale of its Video business for $145 million in cash, expected to close in Q2 2026, which will support its capital allocation priorities [1][2] Financial Highlights - Total net revenue for Q4 2025 was $157.3 million, with a net loss per share of $0.49 [1][2] - For the Broadband segment, Q4 2025 net revenue was $98.2 million, with a net income of $0.2 million, and adjusted EBITDA of $12.1 million [1][2] - The company repurchased approximately 1.3 million shares for $13.3 million in Q4 2025, and cash reserves increased to $124.1 million from $101.5 million year-over-year [1][2] Business Operations - The backlog and deferred revenue reached $573.8 million, a 73% increase from $332.3 million the previous year, with a current portion of $307 million, reflecting a 110% year-over-year growth [1][2] - Harmonic achieved record bookings in the Rest-of-World segment in Q4, indicating potential for continued revenue growth in 2026 and beyond [1][2] - The company has signed several multi-year contracts, showcasing long-term commitment and revenue stability [1][2] Financial Guidance - For Q1 2026, Harmonic projects GAAP net revenue between $100 million and $105 million, with a gross margin of 53.0% to 54.3% [2][7] - For the full year 2026, the company anticipates GAAP net revenue between $440 million and $480 million, with a gross margin of 50.5% to 52.5% [2][7] - Non-GAAP guidance for Q1 2026 includes a net income per share estimate of $0.11 to $0.12, while for FY 2026, it is projected at $0.46 to $0.63 [2][7]

Q3 2025 Financial Performance - Revenue reached $142.4 million, a decrease of 27.3% compared to the previous year[31] - Broadband revenue was $90.5 million, down 37.7% year-over-year[31] - Video revenue increased by 2.9% year-over-year, reaching $51.9 million[31] - SaaS revenue within the Video segment grew by 13.6% to $16.1 million[31] - Adjusted EBITDA was $21.9 million, a decrease from $43.4 million in the prior year[36] - Earnings per share (EPS) was $0.12, down $0.14 from the previous year[31] Balance Sheet and Cash Flow - Cash balance increased to $127.4 million, up from $58 million in Q3 2024[10, 31] - $16 million was used for share repurchases in Q3 2025, bringing the year-to-date total to $66 million[10] Q4 2025 Financial Guidance - Consolidated net revenue is projected to be between $133 million and $147 million[38] - Broadband revenue is expected to be in the range of $85 million to $95 million[38] - Video revenue is projected to be between $48 million and $52 million[38] - EPS is expected to be between $0.06 and $0.12[38]

Financial Data and Key Metrics Changes - Total company revenue increased by 9% year over year to $133.1 million, with EPS rising from $0.00 to $0.11 driven by higher profitability [20][24] - Adjusted EBITDA reached $21 million, exceeding previous expectations [6][20] - Cash balance at quarter end was $148.7 million, a substantial increase of $47.3 million sequentially, despite $36.1 million returned to shareholders through share repurchases [7][20] Business Line Data and Key Metrics Changes - Broadband revenue for Q1 was $84.9 million, with adjusted EBITDA of $15.9 million, both showing year-over-year growth [20][21] - Video revenue was $48.3 million, up 11.8% year over year, with adjusted EBITDA of $5.3 million reflecting strong revenue momentum [20][21] - Video SaaS revenue was $14.8 million, up 15% year over year, indicating robust growth in this segment [18][21] Market Data and Key Metrics Changes - The company closed the quarter with backlog and deferred revenue at $485.1 million, indicating a durable business model [7][26] - The book-to-bill ratio for the quarter was 0.9, compared to 0.7 in Q4 2024 and 1.2 in Q1 2024, reflecting a shift in customer deployment timing [25][26] Company Strategy and Development Direction - The company is navigating the shift to Unified DOCSIS 4.0, expecting a below-trend revenue year for broadband in 2025 but anticipating a rebound in 2026 [7][8] - Harmonic's strategy includes targeted investments to drive organic growth and returning capital to shareholders through stock repurchases [21][23] - The company is exploring inorganic expansion opportunities that complement its current capabilities [21][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth despite short-term headwinds from tariff uncertainties and the transition to Unified DOCSIS 4.0 [34][50] - The company has not seen changes in customer behavior due to tariffs, indicating strong fundamentals [30][50] - Management expects to mitigate tariff impacts through supply chain optimization and cost management [31][32] Other Important Information - The company anticipates a tariff impact of approximately $3 million on Q2 margins, primarily related to broadband [32] - The liquidity position at quarter end included $148.7 million in cash and $82 million in undrawn credit facilities, providing ample resources to manage economic uncertainties [23] Q&A Session Summary Question: Update on unified DOCSIS delay related to amplifier piece - Management indicated that there is no change in expectations regarding the availability of unified amplifiers [37] Question: Should the company consider buying products ahead of delivery to work around tariffs? - Management is exploring options to bring in inventory sooner, given the current pause in tariffs [40] Question: When will the fiber business become a material part of revenue? - Management noted that fiber business is becoming sizable, with significant bookings and expansions [41][42] Question: Source of uncertainty in the second half guidance - The uncertainty is primarily due to macroeconomic factors and tariff fluctuations, impacting visibility for the rest of the year [46][48] Question: Options for diversifying manufacturing footprint - Management is considering options beyond Asia, including potential near-shore manufacturing in Mexico [55] Question: Changes in visibility of spending trajectory from largest MSO customers - Management has not seen any changes in customer behavior to date [57] Question: Explanation for the expected drop in broadband margins - The drop is attributed to a mix of COS licenses and anticipated tariff impacts [59] Question: Update on smart amplifier availability - Management confirmed that progress is in line with expectations regarding the availability of smart amplifiers [73]