false000085131000008513102024-10-282024-10-28

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K

 CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): October 28, 2024
  
HARMONIC INC.
(Exact name of Registrant as specified in its charter)
 
 
Delaware000-2582677-0201147
(State or other jurisdiction of
incorporation)		Commission
File Number		(IRS Employer
Identification No.)
2590 Orchard Parkway
San Jose, CA 95131
(Address of principal executive offices, including zip code)

(408) 542-2500
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareHLITNASDAQ Global Select Market


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐


Item 2.02.Results of Operations and Financial Condition.
On October 28, 2024, Harmonic Inc. ("Harmonic" or the “Company”) issued a press release regarding its preliminary unaudited financial results for the quarter ended September 27, 2024. In the press release, Harmonic also announced that it would be holding a conference call on October 28, 2024 to discuss its financial results for the quarter ended September 27, 2024. A copy of the press release is furnished as Exhibit 99.1 hereto, and the information in Exhibit 99.1 is incorporated herein by reference.
The information in this Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and this Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 furnished herewith shall not be incorporated by reference into any filing by Harmonic under the Securities Act of 1933, as amended (the “Securities Act”), or under the Exchange Act.

Item 9.01.Financial Statements and Exhibits.
(d)Exhibits.
Exhibit
Number
  Description
99.1  
104Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: October 28, 2024
  HARMONIC INC.
By:/s/ Walter Jankovic
   Walter Jankovic
   Chief Financial Officer




Exhibit 99.1
logopra07.jpg
pressreleasea29.jpg
FOR IMMEDIATE RELEASE
Harmonic Announces Third Quarter 2024 Results
Record revenue with Broadband revenue up 92% year over year
Video returned to profitability with greater than 10% Adjusted EBITDA margin
SAN JOSE, California, October 28, 2024 - Harmonic Inc. (NASDAQ: HLIT) today announced its unaudited results for the third quarter of 2024.
“Our third quarter results demonstrated strong execution as we achieved record total company revenue and Adjusted EBITDA, with both broadband and video revenue exceeding expectations,” said Nimrod Ben-Natan, president and chief executive officer of Harmonic. “This strong quarterly performance coupled with our market leading technology solutions leaves us well-positioned for further future growth.”
Q3 Financial and Business Highlights
Financial
•Revenue: $195.8 million, up 54% compared to $127.2 million in the prior year period
◦Broadband segment revenue: $145.3 million, compared to $75.8 million in the prior year period
◦Video segment revenue: $50.4 million, compared to $51.4 million in the prior year period
•Gross margin: GAAP 53.5% and non-GAAP 53.7%, both higher compared to GAAP 48.5% and non-GAAP 49.5% in the prior year period
◦Broadband segment non-GAAP gross margin: 48.3% compared to 44.5% in the prior year period
◦Video segment non-GAAP gross margin: 69.0% compared to 56.9% in the prior year period
•Operating income (loss): GAAP income $35.4 million and non-GAAP income $44.5 million, compared to GAAP loss $8.6 million and non-GAAP income $0.1 million in the prior year period
•Net income (loss): GAAP net income $21.7 million and non-GAAP net income of $29.9 million, compared to GAAP net loss $6.5 million and non-GAAP net income $0.0 million in the prior year period
•Non-GAAP adjusted EBITDA: $43.4 million income compared to $3.5 million income in the prior year period
•Net income (loss) per share: GAAP net income per share of $0.19 and non-GAAP net income per share of $0.26, compared to GAAP net loss per share of $0.06 and non-GAAP net income per share of $0.00 in the prior year period
•Backlog and deferred revenue of $584.7 million
•Cash: $58.2 million, compared to $75.6 million in the prior year period
Business
•Commercially deployed our cOSTM solution with 121 customers, serving 32.0 million cable modems
•Comcast and Harmonic demonstrated the industry's first Unified DOCSIS 4.0 and fiber solution at SCTE TechExpo24, with Unified DOCSIS 4.0 technology now available for all MSOs
•Increased Broadband customer diversification with 7 new customer wins, including Bluepeak Fiber and Tribal Ready selecting Harmonic’s cOS broadband platform
•Further progress on Video sales pipeline of larger Appliance and Tier 1 SaaS opportunities
1

Select Financial Information
GAAPNon-GAAP
Key Financial ResultsQ3 2024Q2 2024Q3 2023Q3 2024Q2 2024Q3 2023
(Unaudited, in millions, except per share data)
Net revenue$195.8 $138.7 $127.2 ***
Net income (loss)$21.7 $(12.5)$(6.5)$29.9 $9.3 $— 
Net income (loss) per share$0.19 $(0.11)$(0.06)$0.26 $0.08 $0.00 
Other Financial InformationQ3 2024Q2 2024Q3 2023
(Unaudited, in millions)
Adjusted EBITDA for the quarter (1)
$43.4 $16.1 $3.5 
Bookings for the quarter$171.4 $72.4 $96.3 
Backlog and deferred revenue as of quarter end$584.7 $613.1 $627.2 
Cash and cash equivalents as of quarter end$58.2 $45.9 $75.6 
(1) Adjusted EBITDA is a Non-GAAP financial measure. Refer to "Preliminary Net Income (loss) to Consolidated Segment Adjusted EBITDA Reconciliation" below for a reconciliation to net income (loss), the most comparable GAAP measure.
* Not applicable

Explanations regarding our use of non-GAAP financial measures and related definitions, and reconciliations of our GAAP and Non-GAAP measures, are provided in the sections below entitled “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliations”.
Financial Guidance
 Q4 2024 GAAP Financial Guidance
(Unaudited, in millions, except percentages and per share data)LowHigh
BroadbandVideoTotal GAAPBroadbandVideoTotal GAAP
Net revenue$160 $45 $205 $170 $50 $220 
Gross margin %55.4 %56.7 %
Gross profit$114 $125 
Tax rate26 %26 %
Net income$30 $36 
Net income per share$0.26 $0.31 
Shares (1)
117.8 117.8 
(1) Diluted shares assumes stock price at $13.34 (Q3 2024 average price).
 2024 GAAP Financial Guidance
(Unaudited, in millions, except percentages and per share data)LowHigh
BroadbandVideoTotal GAAPBroadbandVideoTotal GAAP
Net revenue (1)
$477 $184 $662 $487 $189 $677 
Gross margin %53.6 %54.0 %
Gross profit$354 $366 
Tax rate26 %26 %
Net income$31 $37 
Net income per share$0.27 $0.32 
Shares (2)
117.5 117.5 
(1) Components may not sum to total due to rounding.
(2) Diluted shares assumes stock price at $13.34 (Q3 2024 average price).
2

Q4 2024 Non-GAAP Financial Guidance (1)
(Unaudited, in millions, except percentages and per share data)LowHigh
BroadbandVideoTotal BroadbandVideoTotal
Gross margin %53.0 %64.0 %55.4 %54.0 %66.0 %56.7 %
Gross profit$85 $29 $114 $92 $33 $125 
Adjusted EBITDA(2)
$54 $2 $55 $59 $5 $64 
Tax rate21 %21 %
Net income per share$0.33 $0.39 
Shares (3)
117.8117.8
(1) Refer to “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliations on Financial Guidance” below. Components may not sum to total due to rounding.
(2) Refer to “Net Income to Consolidated Adjusted EBITDA Reconciliation on Financial Guidance” below for a reconciliation to net income, the most comparable GAAP measure.
(3) Diluted shares assumes stock price at $13.34 (Q3 2024 average price).
 2024 Non-GAAP Financial Guidance (1)
(Unaudited, in millions, except percentages and per share data)LowHigh
BroadbandVideoTotal BroadbandVideoTotal
Gross margin %49.6 %64.9 %53.9 %50.0 %65.4 %54.3 %
Gross profit$237 $120 $356 $244 $124 $368 
Adjusted EBITDA(2)
$118 $1 $119 $123 $4 $127 
Tax rate21 %21 %
Net income per share (3)
$0.67 $0.73 
Shares (3)
117.5117.5
(1) Refer to “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliations on Financial Guidance” below. Components may not sum to total due to rounding.
(2) Refer to “Net Income to Consolidated Segment Adjusted EBITDA Reconciliation on Financial Guidance” below for a reconciliation to net income, the most comparable GAAP measure.
(3) Diluted shares assumes stock price at $13.34 (Q3 2024 average price).
3

Conference Call Information
Harmonic will host a conference call to discuss its financial results at 2:00 p.m. PT (5:00 p.m. ET) on Monday, October 28, 2024. The live webcast will be available on the Harmonic Investor Relations website at http://investor.harmonicinc.com. To participate via telephone, please register in advance using this link, https://register.vevent.com/register/BI24dc955b30d3439abf656ef581cfa35c. A replay will be available after 5:00 p.m. PT on the same website.
About Harmonic Inc.
Harmonic (NASDAQ: HLIT), the worldwide leader in virtualized broadband and video delivery solutions, enables media companies and service providers to deliver ultra-high-quality video streaming and broadcast services to consumers globally. The company revolutionized broadband networking via the industry’s first virtualized broadband solution, enabling operators to more flexibly deploy gigabit internet service to consumers’ homes and mobile devices. Whether simplifying OTT video delivery via innovative cloud and software platforms, or powering the delivery of gigabit internet services, Harmonic is changing the way media companies and service providers monetize live and on-demand content on every screen. More information is available at www.harmonicinc.com.
Legal Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements related to our expectations regarding: net revenue, gross margins, operating expenses, operating income (loss), Adjusted EBITDA, tax expense and tax rate, and net income (loss) per diluted share. Our expectations regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, in no particular order, the following: customer concentration and consolidation; loss of one or more key customers; delays or decreases in capital spending in the cable, satellite, telco, broadcast and media industries; the possibility that our products will not generate sales that are commensurate with our expectations or that our cost of revenue or operating expenses may exceed our expectations; the market and technology trends underlying our Broadband and Video businesses will not continue to develop in their current direction or pace; the impact of general economic conditions on our sales and operations; the mix of products and services sold in various geographies and the effect it has on gross margins; our ability to develop new and enhanced products in a timely manner and market acceptance of our new or existing products; risks associated with our international operations; exchange rate fluctuations of the currencies in which we conduct business; risks associated with our cOSTM and VOS product solutions; dependence on various broadband and video industry trends; inventory management; the lack of timely availability or the impact of increases in the prices of parts or raw materials necessary to produce our products; the effect of competition, on both revenue and gross margins; difficulties associated with rapid technological changes in our markets; risks associated with unpredictable sales cycles; our dependence on contract manufacturers and sole or limited source suppliers; and the impact on our business of natural disasters. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Harmonic's filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K for the year ended December 31, 2023, our most recent Quarterly Report on Form 10-Q and our Current Reports on Form 8-K. The forward-looking statements in this press release are based on information available to the Company as of the date hereof, and Harmonic disclaims any obligation to update any forward-looking statements.
Use of Non-GAAP Financial Measures
The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP” or referred to herein as “reported”). However, management believes that certain non-GAAP financial measures provide management and other users with additional meaningful financial information that should be considered when assessing our ongoing performance. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business, establish operating budgets, set internal measurement targets and make operating decisions.
These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Harmonic's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Harmonic's results of operations in conjunction with the corresponding GAAP measures.
4

The Company believes that the presentation of non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to, the Company’s reported results prepared in accordance with GAAP.
The non-GAAP measures presented here are: Gross profit, operating expenses, income (loss) from operations, non-operating expenses and net income (loss), Adjusted EBITDA (including those amounts as a percentage of revenue) and net income (loss) per diluted share. The presentation of non-GAAP information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP, and is not necessarily comparable to non-GAAP results published by other companies. A reconciliation of the historical non-GAAP financial measures discussed in this press release to the most directly comparable historical GAAP financial measures is included with the financial statements provided with this press release. The non-GAAP adjustments described below have historically been excluded from our GAAP financial measures.
Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:
Stock-based compensation - Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. We believe that management is limited in its ability to project the impact stock-based compensation would have on our operating results. In addition, for comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes stock-based compensation in order to better understand the long-term performance of our core business and to facilitate the comparison of our results to the results of our peer companies.
Restructuring and related charges - Harmonic from time to time incurs restructuring charges which primarily consist of employee severance, one-time termination benefits related to the reduction of its workforce, and other costs. These charges are associated with material business shifts. We exclude these items because we do not believe they are reflective of our ongoing long-term business and operating results.
Non-cash interest expense expenses related to convertible notes and other debt - We record the amortization of issuance costs as non-cash interest expense. We believe that excluding these costs provides meaningful supplemental information regarding operational performance and liquidity, along with enhancing investors’ ability to view the Company’s results from management’s perspective. In addition, we believe excluding these costs from the non-GAAP measures facilitates comparisons to our historical operating results and comparisons to peer company operating results.
Discrete tax items and tax effect of non-GAAP adjustments - The income tax effect of non-GAAP adjustments relates to the tax effect of the adjustments that we incorporate into non-GAAP financial measures in order to provide a more meaningful measure of non-GAAP net income.
Depreciation - Depreciation expense, along with interest, tax and stock-based compensation expense, and restructuring charges, is excluded from Adjusted EBITDA because we do not believe depreciation and the other items relate to the ordinary course of our business or are reflective of our underlying business performance.
Non-recurring advisory fees - There were non-recurring costs that we excluded from non-GAAP results relating to professional accounting, tax and legal fees associated with strategic corporate initiatives.
Asset impairment and related charges - We exclude asset impairment and related charges due to the nature of such expenses being unusual and arising outside the ordinary course of continuing operations. These costs primarily consist of impairments of fixed assets, right-of-use assets and related leasehold improvements, and other unrecoverable facility costs due to the intended change in use of certain leased space.
CONTACTS:
Walter JankovicDavid Hanover
Chief Financial OfficerInvestor Relations
Harmonic Inc.Harmonic Inc.
+1.408.490.6152+1.212.896.1220
5

Harmonic Inc.
Preliminary Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except par value)
 September 27, 2024December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents$58,174 $84,269 
Restricted cash327 — 
Accounts receivable, net173,730 141,531 
Inventories73,864 83,982 
Prepaid expenses and other current assets30,273 20,950 
Total current assets336,368 330,732 
Property and equipment, net28,396 36,683 
Operating lease right-of-use assets13,471 20,817 
Goodwill239,597 239,150 
Deferred income taxes107,380 104,707 
Other non-current assets34,649 36,117 
Total assets$759,861 $768,206 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Convertible debt$— $114,880 
Current portion of long-term debt1,944 — 
Current portion of other borrowings5,285 4,918 
Accounts payable42,480 38,562 
Deferred revenue50,891 46,217 
Operating lease liabilities5,971 6,793 
Other current liabilities55,091 61,024 
Total current liabilities161,662 272,394 
Long-term debt112,819 — 
Other long-term borrowings9,458 10,495 
Operating lease liabilities, non-current15,647 18,965 
Other non-current liabilities31,338 29,478 
Total liabilities330,924 331,332 
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding— — 
Common stock, $0.001 par value, 150,000 shares authorized; 116,511 and 112,407 shares issued and outstanding at September 27, 2024 and December 31, 2023, respectively
117 112 
Additional paid-in capital2,424,322 2,405,043 
Accumulated deficit(1,991,615)(1,962,575)
Accumulated other comprehensive loss(3,887)(5,706)
Total stockholders’ equity428,937 436,874 
Total liabilities and stockholders’ equity$759,861 $768,206 

6

Harmonic Inc.
Preliminary Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
 Three Months EndedNine Months Ended
 September 27, 2024September 29, 2023September 27, 2024September 29, 2023
Revenue:
Appliance and integration$153,685 $84,760 $329,464 $310,681 
SaaS and service42,071 42,443 127,092 130,134 
Total net revenue195,756 127,203 456,556 440,815 
Cost of revenue:
Appliance and integration77,683 48,992 171,635 166,177 
SaaS and service13,341 16,527 43,651 43,960 
Total cost of revenue91,024 65,519 215,286 210,137 
Total gross profit104,732 61,684 241,270 230,678 
Operating expenses:
Research and development30,073 30,316 89,562 96,030 
Selling, general and administrative35,851 39,245 114,537 121,300 
Asset impairment and related charges3,103 — 12,103 — 
Restructuring and related charges281 726 14,800 809 
Total operating expenses69,308 70,287 231,002 218,139 
Income (loss) from operations35,424 (8,603)10,268 12,539 
Interest expense, net(2,686)(619)(4,833)(2,125)
Other income (expense), net(3,932)343 (3,602)(86)
Income (loss) before income taxes28,806 (8,879)1,833 10,328 
Provision for (benefit from) income taxes7,088 (2,384)736 10,175 
Net income (loss)$21,718 $(6,495)$1,097 $153 
Net income (loss) per share:
Basic$0.19 $(0.06)$0.01 $— 
Diluted$0.19 $(0.06)$0.01 $— 
Weighted average shares outstanding:
Basic116,403 112,031 114,594 111,431 
Diluted117,358 112,031 117,385 117,910 

7

Harmonic Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
 Nine Months Ended
 September 27, 2024September 29, 2023
Cash flows from operating activities:
Net income$1,097 $153 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation9,171 9,178 
Asset impairment and related charges12,103 — 
Stock-based compensation19,587 20,724 
Foreign currency remeasurement6,513 (814)
Deferred income taxes, net(2,673)2,026 
Provision for excess and obsolete inventories3,135 6,514 
Other adjustments435 1,689 
Changes in operating assets and liabilities:
Accounts receivable, net(31,611)(2,558)
Inventories6,592 14,532 
Other assets(3,489)6,164 
Accounts payable1,787 (20,606)
Deferred revenues2,062 (9,208)
Other liabilities(11,323)(27,002)
Net cash provided by operating activities13,386 792 
Cash flows from investing activities:
Purchases of short-term investments— (6,305)
Purchases of property and equipment(6,840)(5,749)
Net cash used in investing activities(6,840)(12,054)
Cash flows from financing activities:
Proceeds from long-term debt115,000 — 
Repayment of convertible debt(115,500)— 
Payments for debt issuance costs(332)— 
Repurchase of common stock(30,047)— 
Proceeds from other borrowings3,943 3,829 
Repayment of other borrowings(4,797)(4,721)
Proceeds from common stock issued to employees6,628 6,552 
Taxes paid related to net share settlement of equity awards(6,877)(8,643)
Net cash used in financing activities(31,982)(2,983)
Effect of exchange rate changes on cash and cash equivalents and restricted cash(332)281 
Net decrease in cash and cash equivalents and restricted cash(25,768)(13,964)
Cash and cash equivalents and restricted cash at beginning of period84,269 89,586 
Cash and cash equivalents and restricted cash at end of period$58,501 $75,622 
Cash and cash equivalents and restricted cash at end of period
Cash and cash equivalents$58,174 $75,622 
Restricted cash327 — 
Total cash, cash equivalents and restricted cash as shown in the condensed consolidated statement of cash flows$58,501 $75,622 
8

Harmonic Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Nine Months Ended
September 27, 2024September 29, 2023
Supplemental cash flow disclosure:
Income tax payments, net$12,894 $6,376 
Interest payments, net$4,363 $1,921 
Supplemental schedule of non-cash investing activities:
Capital expenditures incurred but not yet paid$709 $1,802 
Supplemental schedule of non-cash financing activities:
Shares of common stock issued upon redemption of the 2024 Notes4,578 — 


9




Harmonic Inc.
Preliminary GAAP Revenue Information
(Unaudited, in thousands, except percentages)
Three Months Ended
September 27, 2024June 28, 2024September 29, 2023
Geography
Americas$167,720 86 %$109,597 79 %$91,221 72 %
EMEA20,269 10 %22,680 16 %28,465 22 %
APAC7,767 4 %6,463 5 %7,517 6 %
Total$195,756 100 %$138,740 100 %$127,203 100 %
Market
Service Provider$159,993 82 %$104,429 75 %$87,747 69 %
Broadcast and Media35,763 18 %34,311 25 %39,456 31 %
Total$195,756 100 %$138,740 100 %$127,203 100 %
Nine Months Ended
September 27, 2024September 29, 2023
Geography
Americas$370,348 81 %$318,294 72 %
EMEA66,509 15 %97,648 22 %
APAC19,699 4 %24,873 6 %
Total$456,556 100 %$440,815 100 %
Market
Service Provider$351,115 77 %$314,439 71 %
Broadcast and Media105,441 23 %126,376 29 %
Total$456,556 100 %$440,815 100 %

10

Harmonic Inc.
Preliminary Segment Information
(Unaudited, in thousands, except percentages)
Three Months Ended September 27, 2024
BroadbandVideoTotal Segment Measures
Adjustments (1)
Consolidated GAAP Measures
Net revenue$145,338 $50,418 $195,756 $— $195,756 
Gross profit70,256 
(1)
34,770 
(1)
105,026 
(1)
(294)104,732 
Gross margin %48.3 %
(1)
69.0 %
(1)
53.7 %
(1)
53.5 %
Three Months Ended June 28, 2024
BroadbandVideoTotal Segment Measures
Adjustments (1)
Consolidated GAAP Measures
Net revenue$92,937 $45,803 $138,740 $— $138,740 
Gross profit44,236 
(1)
29,494 
(1)
73,730 
(1)
(273)73,457 
Gross margin %47.6 %
(1)
64.4 %
(1)
53.1 %
(1)
52.9 %
Three Months Ended September 29, 2023
BroadbandVideoTotal Segment Measures
Adjustments (1)
Consolidated GAAP Measures
Net revenue$75,806 $51,397 $127,203 $— $127,203 
Gross profit33,763 
(1)
29,241 
(1)
63,004 
(1)
(1,320)61,684 
Gross margin %44.5 %
(1)
56.9 %
(1)
49.5 %
(1)
48.5 %
Nine Months Ended September 27, 2024
BroadbandVideoTotal Segment Measures
Adjustments (1)
Consolidated GAAP Measures
Net revenue$317,172 $139,384 $456,556 $— $456,556 
Gross profit151,986 
(1)
90,833 
(1)
242,819 
(1)
(1,549)241,270 
Gross margin %47.9 %
(1)
65.2 %
(1)
53.2 %
(1)
52.8 %
Nine Months Ended September 29, 2023
BroadbandVideoTotal Segment Measures
Adjustments (1)
Consolidated GAAP Measures
Net revenue$273,253 $167,562 $440,815 $— $440,815 
Gross profit133,129 
(1)
100,158 
(1)
233,287 
(1)
(2,609)230,678 
Gross margin %48.7 %
(1)
59.8 %
(1)
52.9 %
(1)
52.3 %
(1) Segment gross margin and segment gross profit are Non-GAAP financial measures. Refer to “Use of Non-GAAP Financial Measures” above and “GAAP to Non-GAAP Reconciliations" below.
11

Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(in thousands, except percentages and per share data)
Three Months Ended September 27, 2024
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsTotal Non-operating Expense, netNet Income
GAAP$195,756 $104,732 $69,308 $35,424 $(6,618)$21,718 
Stock-based compensation— 294 (5,416)5,710 — 5,710 
Restructuring and related charges— — (281)281 — 281 
Asset impairment and related charges (1)
— — (3,103)3,103 — 3,103 
Discrete tax items and tax effect of non-GAAP adjustments— — — — — (871)
Total adjustments— 294 (8,800)9,094 — 8,223 
Non-GAAP $195,756 $105,026 $60,508 $44,518 $(6,618)$29,941 
As a % of revenue (GAAP)53.5 %35.4 %18.1 %(3.4)%11.1 %
As a % of revenue (Non-GAAP)53.7 %30.9 %22.7 %(3.4)%15.3 %
Diluted net income per share:
GAAP$0.19 
Non-GAAP$0.26 
Shares used in per share calculation:
GAAP and Non-GAAP117,358 
(1) Includes write-off of $1.8 million for internally developed capitalized software, and impairment charges of $0.8 million for right-of-use assets, $0.1 million for leasehold improvements and $0.4 million related to the fair value of other unrecoverable facility costs.
Three Months Ended June 28, 2024
RevenueGross ProfitTotal Operating ExpenseIncome (Loss) from OperationsTotal Non-operating Expense, netNet Income (Loss)
GAAP$138,740 $73,457 $89,087 $(15,630)$(805)$(12,532)
Stock-based compensation— 273 (6,681)6,954 — 6,954 
Restructuring and related charges— — (11,482)11,482 — 11,482 
Non-recurring advisory fees— — (406)406 — 406 
Asset impairment and related charges (1)
— — (9,000)9,000 — 9,000 
Non-cash interest expense related to convertible notes— — — — 338 338 
Discrete tax items and tax effect of non-GAAP adjustments— — — — — (6,369)
Total adjustments— 273 (27,569)27,842 338 21,811 
Non-GAAP $138,740 $73,730 $61,518 $12,212 $(467)$9,279 
As a % of revenue (GAAP)52.9 %64.2 %(11.3)%(0.6)%(9.0)%
As a % of revenue (Non-GAAP)53.1 %44.3 %8.8 %(0.3)%6.7 %
Diluted net income (loss) per share:
GAAP$(0.11)
Non-GAAP$0.08 
Shares used in per share calculation:
GAAP115,030 
Non-GAAP116,690 
(1) Includes impairment charges of $2.9 million for right-of-use assets, $4.2 million for leasehold improvements, and $1.9 million related to the fair value of other unrecoverable facility costs.
12

Three Months Ended September 29, 2023
RevenueGross ProfitTotal Operating ExpenseIncome (Loss) from OperationsTotal Non-operating Expense, netNet Income (Loss)
GAAP$127,203 $61,684 $70,287 $(8,603)$(276)$(6,495)
Stock-based compensation— 606 (6,635)7,241 — 7,241 
Restructuring and related charges— 714 (362)1,076 — 1,076 
Non-recurring advisory fees— — (364)364 — 364 
Non-cash interest expense related to convertible notes— — — — 226 226 
Discrete tax items and tax effect of non-GAAP adjustments— — — — — (2,390)
Total adjustments— 1,320 (7,361)8,681 226 6,517 
Non-GAAP $127,203 $63,004 $62,926 $78 $(50)$22 
As a % of revenue (GAAP)48.5 %55.3 %(6.8)%(0.2)%(5.1)%
As a % of revenue (Non-GAAP)49.5 %49.5 %0.1 %— %— %
Diluted net income (loss) per share:
GAAP$(0.06)
Non-GAAP$0.00 
Shares used in per share calculation:
GAAP112,031 
Non-GAAP116,710 

Nine Months Ended September 27, 2024
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsTotal Non-operating Expense, netNet Income
GAAP$456,556 $241,270 $231,002 $10,268 $(8,435)$1,097 
Stock-based compensation— 1,089 (18,498)19,587 — 19,587 
Restructuring and related charges— 460 (14,800)15,260 11 15,271 
Non-recurring advisory fees— — (755)755 — 755 
Asset impairment and related charges (1)
— — (12,103)12,103 — 12,103 
Non-cash interest expense related to convertible notes— — — — 567 567 
Discrete tax items and tax effect of non-GAAP adjustments— — — — — (9,778)
Total adjustments— 1,549 (46,156)47,705 578 38,505 
Non-GAAP $456,556 $242,819 $184,846 $57,973 $(7,857)$39,602 
As a % of revenue (GAAP)52.8 %50.6 %2.2 %(1.8)%0.2 %
As a % of revenue (Non-GAAP)53.2 %40.5 %12.7 %(1.7)%8.7 %
Diluted net income per share:
GAAP$0.01 
Non-GAAP$0.34 
Shares used in per share calculation:
GAAP and Non-GAAP117,385 
(1) Includes write-off of $1.8 million for internally developed capitalized software, and impairment charges of $3.7 million for right-of-use assets, $4.3 million for leasehold improvements, and $2.3 million related to the fair value of other unrecoverable facility costs.
13

Nine Months Ended September 29, 2023
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsTotal Non-operating Expense, netNet Income
GAAP$440,815 $230,678 $218,139 $12,539 $(2,211)$153 
Stock-based compensation— 1,895 (18,829)20,724 — 20,724 
Restructuring and related charges— 714 (445)1,159 — 1,159 
Non-recurring advisory fees— — (2,499)2,499 — 2,499 
Non-cash interest expense related to convertible notes— — — — 672 672 
Discrete tax items and tax effect of non-GAAP adjustments— — — — — 3,099 
Total adjustments— 2,609 (21,773)24,382 672 28,153 
Non-GAAP $440,815 $233,287 $196,366 $36,921 $(1,539)$28,306 
As a % of revenue (GAAP)52.3 %49.5 %2.8 %(0.5)%— %
As a % of revenue (Non-GAAP)52.9 %44.5 %8.4 %(0.3)%6.4 %
Diluted net income per share:
GAAP$— 
Non-GAAP$0.24 
Shares used in per share calculation:
GAAP and Non-GAAP117,910 
14

Harmonic Inc.
Calculation of Adjusted EBITDA by Segment (Unaudited)
(In thousands, except percentages)
Three Months Ended September 27, 2024
BroadbandVideo
Income from operations (1)
$38,192 $6,326 
Depreciation2,001 859 
Other non-operating expense, net(2,733)(1,199)
Adjusted EBITDA(2)
$37,460 $5,986 
Revenue$145,338 $50,418 
Adjusted EBITDA margin % (2)
25.8 %11.9 %
Three Months Ended June 28, 2024
BroadbandVideo
Income (loss) from operations (1)
$13,781 $(1,569)
Depreciation2,133 1,093 
Other non-operating income, net406 213 
Adjusted EBITDA(2)
$16,320 $(263)
Revenue$92,937 $45,803 
Adjusted EBITDA margin % (2)
17.6 %(0.6)%
Three Months Ended September 29, 2023
BroadbandVideo
Income (loss) from operations (1)
$6,128 $(6,050)
Depreciation1,746 1,343 
Other non-operating income, net211 132 
Adjusted EBITDA(2)
$8,085 $(4,575)
Revenue$75,806 $51,397 
Adjusted EBITDA margin % (2)
10.7 %(8.9)%
Nine Months Ended September 27, 2024
BroadbandVideo
Income (loss) from operations (1)
$60,567 $(2,594)
Depreciation6,120 3,051 
Other non-operating expense, net(2,506)(1,085)
Adjusted EBITDA(2)
$64,181 $(628)
Revenue$317,172 $139,384 
Adjusted EBITDA margin % (2)
20.2 %(0.5)%
Nine Months Ended September 29, 2023
BroadbandVideo
Income (loss) from operations (1)
$44,307 $(7,386)
Depreciation5,061 4,117 
Other non-operating expense, net(44)(42)
Adjusted EBITDA(2)
$49,324 $(3,311)
Revenue$273,253 $167,562 
Adjusted EBITDA margin % (2)
18.1 %(2.0)%
(1) Refer to "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" above.
(2) Adjusted EBITDA and Adjusted EBITDA margin are Non-GAAP financial measures. Refer below for the "Net Income (Loss) to Consolidated Segment Adjusted EBITDA Reconciliation".
15

Harmonic Inc.
Preliminary Net Income (Loss) to Consolidated Segment Adjusted EBITDA Reconciliation (Unaudited)
(In thousands, except percentages)
Three Months Ended
September 27, 2024June 28, 2024September 29, 2023
Net income (loss) (GAAP)$21,718 $(12,532)$(6,495)
Provision for (benefit from) income taxes7,088 (3,903)(2,384)
Interest expense, net2,686 1,424 619 
Depreciation2,860 3,226 3,089 
EBITDA34,352 (11,785)(5,171)
Adjustments
Stock-based compensation5,710 6,954 7,241 
Restructuring and related charges281 11,482 1,076 
Non-recurring advisory fees— 406 364 
Asset impairment and related charges3,103 9,000 — 
Total consolidated segment adjusted EBITDA (Non-GAAP)$43,446 $16,057 $3,510 
Revenue$195,756 $138,740 $127,203 
Net income (loss) margin (GAAP)11.1 %(9.0)%(5.1)%
Consolidated segment Adjusted EBITDA margin (Non-GAAP)22.2 %11.6 %2.8 %
Nine Months Ended
September 27, 2024September 29, 2023
Net income (GAAP)$1,097 $153 
Provision for income taxes736 10,175 
Interest expense, net4,833 2,125 
Depreciation9,171 9,178 
EBITDA15,837 21,631 
Adjustments
Stock-based compensation19,587 20,724 
Restructuring and related charges15,271 1,159 
Non-recurring advisory fees755 2,499 
Asset impairment and related charges12,103 — 
Total consolidated segment adjusted EBITDA (Non-GAAP)$63,553 $46,013 
Revenue$456,556 $440,815 
Net income margin (GAAP)0.2 %— %
Consolidated segment Adjusted EBITDA margin (Non-GAAP)13.9 %10.4 %

16

Harmonic Inc.
GAAP to Non-GAAP Reconciliations on Financial Guidance (Unaudited)
(In millions, except percentages and per share data)
Q4 2024 Financial Guidance (1)
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsNet Income
GAAP$205 to$220 $114 to$125 $70 to$73 $44 to$52 $30 to$36 
Stock-based compensation expense——(9)99
Tax effect of non-GAAP adjustments————— to1 
Total adjustments——(9)99 to10 
Non-GAAP$205 to$220 $114 to$125 $61 to$64 $53 to$61 $39 to$46 
As a % of revenue (GAAP)55.4%to56.7%34.1%to33.2%21.5%to23.6%14.6%to16.4%
As a % of revenue (Non-GAAP)55.4%to56.7%29.8%to29.1%25.7%to27.6%19.0%to20.9%
Diluted net income per share:
GAAP$0.26 to$0.31 
Non-GAAP$0.33 to$0.39 
Shares used in per share calculation:
GAAP and Non-GAAP117.8
(1) Components may not sum to total due to rounding.


2024 Financial Guidance (1)
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsNet Income
GAAP$662 to$677 $354 to$366 $301 to$304 $54 to$62 $31 to$37 
Stock-based compensation expense—2(27)2929
Restructuring and related charges——(15)1515
Non-recurring advisory fees——(1)11
Asset impairment and related charges——(12)1212
Non-cash interest expense related to convertible notes————1
Tax effect of non-GAAP adjustments————(10)to(9)
Total adjustments—2(55)5748 to49 
Non-GAAP$662 to$677 $356 to$368 $246 to$249 $111 to$119 $79 to$86 
As a % of revenue (GAAP)53.6%to54.0%45.5%to44.9%8.2%to9.2%4.7%to5.5%
As a % of revenue (Non-GAAP)53.9%to54.3%37.2%to36.8%16.7%to17.6%11.9%to12.7%
Diluted net income per share:
GAAP$0.27 to$0.32 
Non-GAAP$0.67 to$0.73 
Shares used in per share calculation:
GAAP and Non-GAAP117.5
(1) Components may not sum to total due to rounding.
17

Harmonic Inc.
Calculation of Adjusted EBITDA by Segment on Financial Guidance (Unaudited) (1)
(In millions)
Q4 2024 Financial Guidance
BroadbandVideo
Income from operations (2)
$52 to$57 $1 to$4 
Depreciation2 2 1 1 
Segment adjusted EBITDA(3)
$54 to$59 $2 to$5 
2024 Financial Guidance
BroadbandVideo
Income (loss) from operations (2)
$112 to$117 $(2)to$1 
Depreciation9 9 4 4 
Other non-operating expense, net(3)(3)(1)(1)
Segment adjusted EBITDA(3)
$118 to$123 $1 to$4 
(1) Components may not sum to total due to rounding.
(2) Refer to "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations on Financial Guidance" above.
(3) Segment Adjusted EBITDA is a Non-GAAP financial measure. Refer below for the "Net income to Consolidated Segment Adjusted EBITDA reconciliation on Financial Guidance".
Harmonic Inc.
Net Income to Consolidated Segment Adjusted EBITDA Reconciliation on Financial Guidance (Unaudited) (1)
(In millions)
Q4 2024 Financial Guidance2024 Financial Guidance
Net income (GAAP)$30 to$36 $31 to$37 
Provision for income taxes11 14 11 13 
Interest expense, net2 2 7 7 
Depreciation3 3 13 13 
EBITDA46 to55 62 to70 
Adjustments
Stock-based compensation9 9 29 29 
Restructuring and related charges— — 15 15 
Asset impairment and related charges— — 12 12 
Non-recurring advisory fees— — 1 1 
Total consolidated segment adjusted EBITDA (Non-GAAP) (2)
$55 to$64 $119 to$127 
(1) Components may not sum to total due to rounding.
(2) Consolidated Segment adjusted EBITDA is a Non-GAAP financial measure. Refer to "Use of Non-GAAP Financial Measures" above.
18
v3.24.3
Cover
Oct. 28, 2024
Cover [Abstract]  
Amendment Flag false
Entity Central Index Key 0000851310
Document Type 8-K
Document Period End Date Oct. 28, 2024
Entity Registrant Name HARMONIC INC.
Entity Incorporation, State or Country Code DE
Entity File Number 000-25826
Entity Tax Identification Number 77-0201147
Entity Address, Address Line One 2590 Orchard Parkway
Entity Address, City or Town San Jose
Entity Address, State or Province CA
Entity Address, Postal Zip Code 95131
City Area Code 408
Local Phone Number 542-2500
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $0.001 per share
Trading Symbol HLIT
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
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