0000851310-21-000006.txt : 20210201 0000851310-21-000006.hdr.sgml : 20210201 20210201160821 ACCESSION NUMBER: 0000851310-21-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 17 CONFORMED PERIOD OF REPORT: 20210201 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20210201 DATE AS OF CHANGE: 20210201 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARMONIC INC CENTRAL INDEX KEY: 0000851310 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 770201147 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25826 FILM NUMBER: 21576790 BUSINESS ADDRESS: STREET 1: 4300 NORTH FIRST STREET CITY: SAN JOSE STATE: CA ZIP: 95134 BUSINESS PHONE: 4084906242 MAIL ADDRESS: STREET 1: 4300 NORTH FIRST STREET CITY: SAN JOSE STATE: CA ZIP: 95134 FORMER COMPANY: FORMER CONFORMED NAME: HARMONIC LIGHTWAVES INC DATE OF NAME CHANGE: 19950404 8-K 1 hlit-20210201.htm 8-K hlit-20210201
false000085131000008513102021-02-012021-02-01

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): February 1, 2021
  
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)

(408542-2500
(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 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). 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 February 1, 2021, Harmonic Inc. (the “Company”) issued a press release regarding its preliminary unaudited financial results for the quarter and year ended December 31, 2020. In the press release, Harmonic also announced that it would be holding a conference call on February 1, 2021 to discuss its financial results for the quarter and year ended December 31, 2020. 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
  
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: February 1, 2021  HARMONIC INC.
By:/s/ Sanjay Kalra
   Sanjay Kalra
   Chief Financial Officer



EX-99.1 2 hlit-20201231pressrelease.htm EX-99.1 Document

Exhibit 99.1
logopra051.jpg
pressreleasea251.jpg
FOR IMMEDIATE RELEASE
Harmonic Announces Fourth Quarter and Fiscal 2020 Results
Revenue up 38.6% quarter over quarter
Bookings up 105% quarter over quarter

SAN JOSE, California, February 1, 2021 - Harmonic Inc. (NASDAQ: HLIT) today announced its unaudited results for the fourth quarter and fiscal year ended December 31, 2020.
“Harmonic's fourth quarter results reflect the competitive advantages and complementary strengths of our Cable Access and Video segments,” said Patrick Harshman, president and chief executive officer of Harmonic. “Both segments delivered sequential and year over year growth in revenues and operating margins. Record quarterly bookings, and record backlog and deferred revenue, demonstrate strong business momentum as we enter 2021.”
Q4 Financial and Business Highlights

Financial

Revenue: $131.5 million, up 7.7% year over year
Cable Access segment revenue: $45.5 million, up 5.8% year over year
Video segment revenue: $86.0 million, up 8.7% year over year
Gross margin: GAAP 54.4% and non-GAAP 55.3%, compared to GAAP 50.5% and non-GAAP 52.3% in the year ago period
Cable Access segment gross margin: 53.7% compared to 38.3% in the year ago period
Video segment gross margin: 56.2%, compared to 60.0% in the year ago period
Operating income: GAAP income $16.8 million and non-GAAP income $23.4 million, compared to GAAP income $6.7 million and non-GAAP income $14.8 million in the year ago period
Adjusted EBITDA: $26.4 million compared to $17.6 million in the year ago period
Net income: GAAP net income $13.5 million and non-GAAP net income $20.0 million, compared to GAAP net income $5.6 million and non-GAAP net income $12.1 million
EPS: GAAP net income per share of $0.13 and non-GAAP net income per share of $0.20, compared to GAAP net income per share of $0.06 and non-GAAP net income per share of $0.12 in the year ago period
Cash: $98.6 million, up $5.5 million year over year

Business

CableOS® solution commercially deployed with 44 customers, up 91% year over year
CableOS deployments scaled to 2.6 million served cable modems, up 149% year over year
17 new VOS® streaming SaaS customers added during the quarter
Over 50,000 live-streaming channels deployed globally, up 15% year over year

1


Select Financial Information
GAAPNon-GAAP
Key Financial ResultsQ4 2020Q3 2020Q4 2019Q4 2020Q3 2020Q4 2019
(in millions, except per share data)
Net revenue$131.5 $94.9 $122.2 $131.5 $94.9 $122.2 
Net income (loss)$13.5 $(5.4)$5.6 $20.0 $2.6 $12.1 
Diluted EPS$0.13 $(0.06)$0.06 $0.20 $0.03 $0.12 
Other Financial InformationQ4 2020Q3 2020Q4 2019
(in millions)
Adjusted EBITDA for the quarter$26.4 $7.2 $17.6 
Bookings for the quarter$206.4 $100.7 $140.1 
Backlog and deferred revenue as of quarter end$290.5 $216.2 $210.2 
Cash and cash equivalents as of quarter end$98.6 $70.8 $93.1 
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
GAAP Financial Guidance
Q1 20212021
LowHighLowHigh
(in millions, except percentages and per share data)
Net revenue$97.0 $107.0 $430.0 $465.0 
Video$61.0 $66.0 $260.0 $275.0 
Cable Access$36.0 $41.0 $170.0 $190.0 
Gross margin %51.0 %53.0 %51.0 %54.0 %
Operating expenses$58.0 $60.0 $231.5 $238.5 
Operating income (loss)$(9.0)$(4.0)$(12.5)$12.5 
Tax expense$(0.7)$0.7 $(2.7)$(2.7)
EPS$(0.12)$(0.07)$(0.26)$(0.02)
Shares99.7 99.7 101.0 101.0 
Cash$85.0 $95.0 $110.0 $130.0 
2


Non-GAAP Financial Guidance
Q1 20212021
LowHighLowHigh
(in millions, except percentages and per share data)
Net revenue$97.0 $107.0 $430.0 $465.0 
Video$61.0 $66.0 $260.0 $275.0 
Cable Access$36.0 $41.0 $170.0 $190.0 
Gross margin %51.5 %53.5 %51.5 %54.5 %
Operating expenses$49.0 $51.0 $206.0 $213.0 
Operating income$1.0 $6.0 $15.5 $40.5 
Adjusted EBITDA$4.0 $9.0 $27.5 $53.0 
Tax rate10 %10 %10 %10 %
EPS$0.00 $0.04 $0.09 $0.31 
Shares102.5 102.5 103.7 103.7 
Cash$85.0 $95.0 $110.0 $130.0 

See “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliations” below.
Conference Call Information
Harmonic will host a conference call to discuss its financial results at 2:00 p.m. Pacific (5:00 p.m. Eastern) on Monday, February 1, 2021. The live webcast will be available on the Harmonic Investor Relations website at http://investor.harmonicinc.com. An audio version of the webcast will be available by calling +1.574.990.1032 or +1.800.240.9147 (conference ID 1694224). A replay will be available after 5:00 p.m. PT on the same web site or by calling +1.404.537.3406 or +1.855.859.2056 (conference ID 1694224).
About Harmonic Inc.
Harmonic (NASDAQ: HLIT), the worldwide leader in visualized cable access 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 cable access networking via the industry’s first virtualized cable access solution, enabling cable 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 cable 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, EPS, and cash. 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: the market and technology trends underlying our Video and Cable Access businesses will not continue to develop in their current direction or pace; 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 potential impact of the Covid-19 pandemic on our operations or the operations of our supply chain or our customers; 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; delays or decreases in capital spending in the cable, satellite, telco, broadcast and media industries; customer concentration and consolidation; our ability to develop new and enhanced products in a timely manner and market acceptance of our new or existing products; losses of one or more key customers; risks associated with our international operations; exchange rate fluctuations of the currencies in which we conduct business; risks associated with our CableOS and VOS product solutions; dependence on market acceptance of various types of broadband services, on the adoption of new broadband technologies and on broadband industry trends; inventory management; the lack of timely availability of parts or raw materials necessary to produce our products; the impact of increases in the prices of raw materials and oil; 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 effect on our business of natural disasters. The forward-looking statements contained in this press release are also subject to other risks
3


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, 2019, 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.

4


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.
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: revenue, segment revenue, gross profit, operating expenses, income (loss) from operations, non-operating expenses and net income (loss) (including those amounts as a percentage of revenue), Adjusted EBITDA, 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.
Amortization of intangibles - A portion of the purchase price of our acquisitions is generally allocated to intangible assets, and is subject to amortization. However, Harmonic does not acquire businesses on a predictable cycle. Additionally, the amount of an acquisition’s purchase price allocated to intangible assets and the term of its related amortization can vary significantly and is unique to each acquisition. Therefore, we believe that the presentation of non-GAAP financial measures that adjust for the amortization of intangible assets provides investors and others with a consistent basis for comparison across accounting periods.
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, lease exit costs, 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.
Loss on convertible debt extinguishment/conversion - In the fourth quarter of fiscal 2020, we recorded a loss of $0.5 million resulting from the conversion and settlement of the remaining $8.1 million of our convertible notes due in December 2020. In the second quarter of fiscal 2020, we recorded a debt extinguishment loss of $0.8 million resulting from the exchange of $37.7 million in aggregate principal amount of our convertible notes due in 2020 for $37.7 million in aggregate principal amount of convertible notes due in 2022. In the third quarter of fiscal 2019, we recorded a debt extinguishment loss of $5.7 million resulting from refinancing a portion of our convertible notes due in 2020. We have excluded these losses from our non-GAAP financial measures because we do not believe the losses are reflective of our ongoing long-term business and operating results.
Non-cash interest expense and other expenses related to convertible notes and other debt - We record the accretion of the debt discount related to the equity component and 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
5


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.
Accounting impact related to warrant amortization - We issued a warrant to a customer, Comcast Corporation, in September 2016 pursuant to which Comcast may purchase up to 7.8 million shares of Harmonic common stock. In July 2019, in connection with Comcast's election of enterprise license pricing for the Company's CableOS software, all warrant shares were fully vested as of July 1, 2019. As a result of Comcast's election of enterprise license pricing, we no longer excluded the effect of warrant amortization in our non-GAAP financial measures beginning with the third quarter of fiscal 2019.

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, restructuring charges and amortization of intangible assets, 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.
CONTACTS:
 
Sanjay KalraDavid Hanover
Chief Financial OfficerInvestor Relations
Harmonic Inc.Harmonic Inc.
+1.408.490.6031+1.212.896.1220
investor@harmonicinc.com

 
 
6


Harmonic Inc.
Preliminary Consolidated Balance Sheets
(Unaudited, in thousands, except per share data)

 December 31, 2020December 31, 2019
ASSETS
Current assets:
   Cash and cash equivalents$98,645 $93,058 
   Accounts receivable, net66,227 88,500 
   Inventories35,031 29,042 
   Prepaid expenses and other current assets38,132 40,762 
Total current assets238,035 251,362 
Property and equipment, net43,141 22,928 
Operating lease right-of-use assets27,556 27,491 
Other long-term assets38,609 41,305 
Intangibles, net508 4,461 
Goodwill243,674 239,780 
Total assets$591,523 $587,327 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$23,543 $40,933 
Accrued other current liabilities57,687 63,761 
Deferred revenue54,294 37,117 
Convertible notes, short-term— 43,375 
Other debts and finance lease obligations, current11,771 6,713 
Total current liabilities147,295 191,899 
Convertible notes, long-term129,507 88,629 
Other debts and finance lease obligations, long-term10,086 10,511 
Other non-current liabilities46,333 41,432 
Total liabilities333,221 332,471 
Convertible notes— 2,410 
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; 98,204 and 91,875 shares issued and outstanding at December 31, 2020 and 2019, respectively
98 92 
   Additional paid-in capital2,353,559 2,327,359 
   Accumulated deficit(2,101,211)(2,071,940)
   Accumulated other comprehensive income (loss)5,856 (3,065)
Total stockholders’ equity258,302 252,446 
Total liabilities and stockholders’ equity$591,523 $587,327 

7


Harmonic Inc.
Preliminary Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
 Three months endedYear ended
 December 31, 2020December 31, 2019December 31, 2020December 31, 2019
Revenue:
     Appliance and integration$98,787 $85,933 $252,014 $275,797 
     SaaS and service32,741 36,245 126,817 127,077 
Total net revenue131,528 122,178 378,831 402,874 
Cost of revenue:
     Appliance and integration45,795 47,107 126,948 130,284 
     SaaS and service14,171 13,376 56,886 49,578 
Total cost of revenue59,966 60,483 183,834 179,862 
Total gross profit71,562 61,695 194,997 223,012 
Operating expenses:
   Research and development20,667 21,703 82,494 84,614 
   Selling, general and administrative32,615 30,557 119,611 119,035 
   Amortization of intangibles755 782 3,019 3,139 
   Restructuring and related charges750 1,947 2,322 3,141 
Total operating expenses54,787 54,989 207,446 209,929 
Income (loss) from operations16,775 6,706 (12,449)13,083 
Interest expense, net(2,737)(2,789)(11,509)(11,651)
Loss on convertible debt extinguishment/conversion(528)— (1,362)(5,695)
Other expense, net(84)— (897)(2,333)
Income (loss) before income taxes13,426 3,917 (26,217)(6,596)
Provision for (benefit from) income taxes(39)(1,653)3,054 (672)
Net income (loss)$13,465 $5,570 $(29,271)$(5,924)
Net income (loss) per share:
   Basic$0.14 $0.06 $(0.30)$(0.07)
   Diluted$0.13 $0.06 $(0.30)$(0.07)
Shares used in per share calculations:
   Basic97,938 91,124 96,971 89,575 
   Diluted100,316 97,499 96,971 89,575 

8


Harmonic Inc.
Preliminary Consolidated Statements of Cash Flows
(Unaudited, in thousands)
 Year ended
 December 31, 2020December 31, 2019
Cash flows from operating activities:
Net loss$(29,271)$(5,924)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation11,737 11,287 
Amortization of intangibles3,970 8,319 
   Stock-based compensation18,040 12,074 
   Amortization of discount on convertible and other debt7,058 6,756 
   Amortization of non-cash warrant1,746 13,576 
   Foreign currency adjustments6,391 (290)
   Loss on convertible debt extinguishment/conversion1,362 5,695 
   Deferred income taxes, net(105)(2,076)
   Provision for doubtful accounts and returns1,666 1,500 
   Provision for excess and obsolete inventories1,847 1,479 
   Other non-cash adjustments, net409 1,349 
   Changes in operating assets and liabilities:
      Accounts receivable21,186 (8,388)
      Inventories(8,195)(4,819)
      Prepaid expenses and other assets11,556 (3,347)
      Accounts payable(18,173)5,086 
      Deferred revenues19,751 (3,436)
      Accrued and other liabilities(11,812)(7,546)
Net cash provided by operating activities39,163 31,295 
Cash flows from investing activities:
   Purchases of property and equipment(32,205)(10,328)
Net cash used in investing activities(32,205)(10,328)
Cash flows from financing activities:
   Proceeds from convertible debt— 115,500 
   Payments of convertible debt(7,999)(109,603)
   Payment of convertible debt issuance costs(672)(4,277)
   Proceeds from other debts9,398 4,684 
   Repayment of other debts and finance leases(6,646)(6,913)
   Proceeds from common stock issued to employees5,472 8,406 
   Payment of tax withholding obligations related to net share settlements of restricted stock units(1,662)(1,492)
Net cash (used in) provided by financing activities(2,109)6,305 
Effect of exchange rate changes on cash and cash equivalents738 (203)
Net increase in cash and cash equivalents 5,587 27,069 
Cash and cash equivalents, beginning of the year93,058 65,989 
Cash and cash equivalents, end of the year$98,645 $93,058 

9


Harmonic Inc.
Preliminary Revenue Information
(Unaudited, in thousands, except percentages)

Three months ended
December 31, 2020September 25, 2020December 31, 2019
GAAP
Adjustment(1)
Non-GAAPGAAP
Adjustment(1)
Non-GAAPGAAP
Adjustment(1)
Non-GAAP
Geography
Americas$84,916 $— $84,916 65%$54,521 $— $54,521 58%$68,869 $— $68,869 56%
EMEA34,825 — 34,825 26%29,771 — 29,771 31%39,874 — 39,874 33%
APAC11,787 — 11,787 9%10,600 — 10,600 11%13,435 — 13,435 11%
Total$131,528 $— $131,528 100%$94,892 $— $94,892 100%$122,178 $— $122,178 100%
Market
Service Provider$66,673 $— $66,673 51%$59,083 $— $59,083 62%$83,976 $— $83,976 69%
Broadcast and Media64,855 — 64,855 49%35,809 — 35,809 38%38,202 — 38,202 31%
Total$131,528 $— $131,528 100%$94,892 $— $94,892 100%$122,178 $— $122,178 100%

Twelve months ended
December 31, 2020December 31, 2019
GAAP
Adjustment(1)
Non-GAAPGAAP
Adjustment(1)
Non-GAAP
Geography
Americas$219,394 $— $219,394 58%$224,193 $48 $224,241 56%
EMEA117,126 — 117,126 31%117,477 — 117,477 29%
APAC42,311 — 42,311 11%61,204 — 61,204 15%
Total$378,831 $— $378,831 100%$402,874 $48 $402,922 100%
Market
Service Provider$211,684 $— $211,684 56%$249,512 $48 $249,560 62%
Broadcast and Media167,147 — 167,147 44%153,362 — 153,362 38%
Total$378,831 $— $378,831 100%$402,874 $48 $402,922 100%

(1) See “Use of Non-GAAP Financial Measures” above and “GAAP to Non-GAAP Reconciliations” below.

10


Harmonic Inc.
Preliminary Segment Information
(Unaudited, in thousands, except percentages)

Three months ended December 31, 2020
VideoCable AccessTotal Segment Measures
(non-GAAP)
Adjustments (1)
Consolidated GAAP Measures
Net revenue$86,044 $45,484 $131,528 $— $131,528 
Gross profit48,336 24,437 72,773 (1,211)71,562 
Gross margin%56.2 %53.7 %55.3 %54.4 %
Operating income13,529 9,918 23,447 (6,672)16,775 
Operating margin%15.7 %21.8 %17.8 %12.8 %
Three months ended September 25, 2020
VideoCable AccessTotal Segment Measures
(non-GAAP)
Adjustments (1)
Consolidated GAAP Measures
Net revenue$54,641 $40,251 $94,892 $— $94,892 
Gross profit29,825 19,682 49,507 (583)48,924 
Gross margin%54.6 %48.9 %52.2 %51.6 %
Operating income (loss)(1,699)5,876 4,177 (5,798)(1,621)
Operating margin%(3.1)%14.6 %4.4 %(1.7)%
Three months ended December 31, 2019
VideoCable AccessTotal Segment Measures
(non-GAAP)
Adjustments (1)
Consolidated GAAP Measures
Net revenue$79,172 $43,006 $122,178 $— $122,178 
Gross profit47,463 16,492 63,955 (2,260)61,695 
Gross margin%60.0 %38.3 %52.3 %50.5 %
Operating income11,105 3,649 14,754 (8,048)6,706 
Operating margin%14.0 %8.5 %12.1 %5.5 %
Twelve months ended December 31, 2020
VideoCable AccessTotal Segment Measures
(non-GAAP)
Adjustments (1)
Consolidated GAAP Measures
Net revenue$242,510 $136,321 $378,831 $— $378,831 
Gross profit132,092 66,661 198,753 (3,756)194,997 
Gross margin%54.5 %48.9 %52.5 %51.5 %
Operating income1,326 11,651 12,977 (25,426)(12,449)
Operating margin%0.5 %8.5 %3.4 %(3.3)%
Twelve months ended December 31, 2019
VideoCable AccessTotal Segment Measures
(non-GAAP)
Adjustments (1)
Consolidated GAAP Measures
Net revenue$278,028 $124,894 $402,922 $(48)*$402,874 
Gross profit162,156 68,596 230,752 (7,740)223,012 
Gross margin%58.3 %54.9 %57.3 %55.4 %
Operating income15,837 22,219 38,056 (24,973)13,083 
Operating margin%5.7 %17.8 %9.4 %3.2 %

(1) See “Use of Non-GAAP Financial Measures” above and “GAAP to Non-GAAP Reconciliations” below.
* This non-GAAP adjustment is for warrant amortization and relates to our Cable Access segment. After applying this adjustment to the non-GAAP revenue for the Cable Access segment, our GAAP revenue for the Cable Access segment for the twelve months ended December 31, 2019 was $124,846.
11


Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(in thousands, except percentages and per share data)

Three months ended December 31, 2020
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsTotal Non-operating Expense, netNet Income
GAAP$131,528 $71,562 $54,787 $16,775 $(3,349)$13,465 
  Stock-based compensation— 348 (3,955)4,303 — 4,303 
  Amortization of intangibles— — (756)756 — 756 
  Restructuring and related charges— 863 (750)1,613 — 1,613 
  Loss on convertible debt extinguishment/conversion— — — — 528 528 
  Non-cash interest and other expenses related to convertible notes and other debt— — — — 1,607 1,607 
  Discrete tax items and tax effect of non-GAAP adjustments— — — — — (2,262)
Total adjustments— 1,211 (5,461)6,672 2,135 6,545 
Non-GAAP $131,528 $72,773 $49,326 $23,447 $(1,214)$20,010 
As a % of revenue (GAAP)54.4 %41.7 %12.8 %(2.5)%10.2 %
As a % of revenue (Non-GAAP)55.3 %37.5 %17.8 %(0.9)%15.2 %
Diluted net income per share:
  Diluted net income per share-GAAP$0.13 
  Diluted net income per share-Non-GAAP$0.20 
Shares used to compute diluted net income per share:
  GAAP and Non-GAAP100,316 

Three months ended September 25, 2020
RevenueGross ProfitTotal Operating ExpenseIncome (Loss) from OperationsTotal Non-operating Expense, netNet Income (Loss)
GAAP$94,892 $48,924 $50,545 $(1,621)$(2,974)$(5,381)
  Stock-based compensation— 281 (3,649)3,930 — 3,930 
  Amortization of intangible— — (752)752 — 752 
  Restructuring and related charges— 302 (814)1,116 — 1,116 
  Non-cash interest expenses and other expenses related to convertible notes and other debt— — — — 1,666 1,666 
  Discrete tax items and tax effect of non-GAAP adjustments— — — — — 499 
Total adjustments— 583 (5,215)5,798 1,666 7,963 
Non-GAAP$94,892 $49,507 $45,330 $4,177 $(1,308)$2,582 
As a % of revenue (GAAP)51.6 %53.3 %(1.7)%(3.1)%(5.7)%
As a % of revenue (Non-GAAP)52.2 %47.8 %4.4 %(1.4)%2.7 %
Diluted net income (loss) per share:
  Diluted net loss per share-GAAP$(0.06)
  Diluted net income per share-Non-GAAP$0.03 
Shares used to compute diluted net income (loss) per share:
  GAAP97,563 
  Non-GAAP98,361 
12


Three months ended December 31, 2019
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsTotal Non-operating Expense, netNet Income
GAAP$122,178 $61,695 $54,989 $6,706 $(2,789)$5,570 
  Stock-based compensation— 297 (3,059)3,356 — 3,356 
  Amortization of intangibles— 1,295 (782)2,077 — 2,077 
  Restructuring and related charges— 668 (1,947)2,615 — 2,615 
  Non-cash interest expenses and other expenses related to convertible notes and other debt— — — — 1,796 1,796 
  Discrete tax items and tax effect of non-GAAP adjustments— — — — — (3,303)
Total adjustments— 2,260 (5,788)8,048 1,796 6,541 
Non-GAAP$122,178 $63,955 $49,201 $14,754 $(993)$12,111 
As a % of revenue (GAAP)50.5 %45.0 %5.5 %(2.3)%4.6 %
As a % of revenue (Non-GAAP)52.3 %40.3 %12.1 %(0.8)%9.9 %
Diluted net income per share:
  Diluted net income per share-GAAP$0.06 
  Diluted net income per share-Non-GAAP$0.12 
Shares used to compute diluted net income per share:
  GAAP and Non-GAAP97,499 

Twelve months ended December 31, 2020
RevenueGross ProfitTotal Operating ExpenseIncome (Loss) from OperationsTotal Non-operating Expense, netNet Income (Loss)
GAAP$378,831 $194,997 $207,446 $(12,449)$(13,768)$(29,271)
  Stock-based compensation— 1,712 (16,328)18,040 — 18,040 
  Amortization of intangibles— 950 (3,020)3,970 — 3,970 
  Restructuring and related charges— 1,094 (2,322)3,416 — 3,416 
  Loss on convertible debt extinguishment/conversion— — — — 1,362 1,362 
  Non-cash interest expenses and other expenses related to convertible notes and other debt— — — — 7,058 7,058 
  Discrete tax items and tax effect of non-GAAP adjustments— — — — — 2,291 
Total adjustments— 3,756 (21,670)25,426 8,420 36,137 
Non-GAAP$378,831 $198,753 $185,776 $12,977 $(5,348)$6,866 
As a % of revenue (GAAP)51.5 %54.8 %(3.3)%(3.6)%(7.7)%
As a % of revenue (Non-GAAP)52.5 %49.0 %3.4 %(1.4)%1.8 %
Diluted net income (loss) per share:
  Diluted net loss per share-GAAP$(0.30)
  Diluted net income per share-Non-GAAP$0.07 
Shares used to compute diluted net income (loss) per share:
  GAAP96,971 
  Non-GAAP98,633 
13


Twelve months ended December 31, 2019
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsTotal Non-operating Expense, netNet Income (Loss)
GAAP$402,874 $223,012 $209,929 $13,083 $(19,679)$(5,924)
  Accounting impact related to warrant amortization48 48 — 48 — 48 
  Stock-based compensation— 1,121 (10,953)12,074 — 12,074 
  Amortization of intangibles— 5,180 (3,139)8,319 — 8,319 
  Restructuring and related charges— 1,391 (3,141)4,532 — 4,532 
  Loss on convertible debt extinguishment/conversion— — — — 5,695 5,695 
  Non-cash interest expenses and other expenses related to convertible notes— — — — 7,683 7,683 
  Discrete tax items and tax effect of non-GAAP adjustments— — — — — (4,482)
Total adjustments48 7,740 (17,233)24,973 13,378 33,869 
Non-GAAP$402,922 $230,752 $192,696 $38,056 $(6,301)$27,945 
As a % of revenue (GAAP)55.4 %52.1 %3.2 %(4.9)%(1.5)%
As a % of revenue (Non-GAAP)57.3 %47.8 %9.4 %(1.6)%6.9 %
Diluted net income (loss) per share:
  Diluted net loss per share-GAAP$(0.07)
  Diluted net income per share-Non-GAAP$0.30 
Shares used to compute diluted net income (loss) per share:
  GAAP89,575 
  Non-GAAP93,830 

14



Harmonic Inc.
Preliminary Adjusted EBITDA Reconciliation (Unaudited)
(In thousands)

Three months ended
December 31, 2020September 25, 2020December 31, 2019
Net Income (Loss) - GAAP$13,465 $(5,381)$5,570 
Provision for (benefit from) income taxes(39)786 (1,653)
Interest expense, net2,737 2,807 2,789 
Depreciation3,054 3,148 2,807 
Amortization of intangibles756 752 2,077 
EBITDA19,973 2,112 11,590 
Adjustments
Stock-based compensation4,303 3,930 3,356 
Loss on convertible debt extinguishment/conversion528 — — 
Restructuring and related charges1,613 1,116 2,615 
Adjusted EBITDA$26,417 $7,158 $17,561 


Twelve months ended
December 31, 2020December 31, 2019
Net Loss - GAAP$(29,271)$(5,924)
Provision for (benefit from) income taxes3,054 (672)
Interest expense, net11,509 11,651 
Depreciation11,737 11,287 
Amortization of intangibles3,970 8,319 
EBITDA999 24,661 
Adjustments
Accounting impact related to warrant amortization— 48 
Stock-based compensation18,040 12,074 
Loss on convertible debt extinguishment/conversion1,362 5,695 
Non-cash expenses related to convertible notes— 927 
Restructuring and related charges3,416 4,532 
Adjusted EBITDA$23,817 $47,937 
15


Harmonic Inc.
GAAP to Non-GAAP Reconciliations on Financial Guidance (Unaudited)
(In millions, except percentages and per share data)
Q1 2021 Financial Guidance
RevenueGross ProfitTotal Operating ExpenseIncome (Loss) from OperationsTotal Non-operating Expense, netNet Income (Loss)
GAAP$97.0 to $107.0$49.2 to $56.4$58.0 to $60.0$(9.0) to $(4.0)$(2.8)$(12.4) to $(7.2)
  Stock-based compensation 0.6(8.4)9.09.0
  Amortization of intangibles(0.5)0.50.5
  Restructuring and related charges0.2(0.2)0.40.4
  Non-cash interest and other expenses related to convertible notes and other debt1.81.8
 Tax effect of non-GAAP adjustments$0.2 to $0.7
Total adjustments0.8(9.1)9.91.8$11.6 to $12.4
Non-GAAP $97.0 to $107.0$50.0 to $57.2$49.0 to $51.0$1.0 to $6.0$(1.0)$0.0 to $4.4
As a % of revenue (GAAP)51.0% to 53.0%59.9% to 56.2%(9.2)% to (3.5)%(2.6)% to (2.9)%(12.8)% to (6.7)%
As a % of revenue (Non-GAAP)51.5% to 53.5%50.5% to 47.7%1.0% to 5.8%(1.0)% to (1.0)%0.0% to 4.1%
Diluted net income (loss) per share:
  Diluted net loss per share-GAAP$(0.12) to $(0.07)
  Diluted net income per share-Non-GAAP$0.00 to $0.04
Shares used to compute diluted net loss per share:
  GAAP99.7
Shares used to compute diluted net income per share:
  Non-GAAP102.5
2021 Financial Guidance
RevenueGross ProfitTotal Operating ExpenseIncome (Loss) from OperationsTotal Non-operating Expense, netNet Income (Loss)
GAAP$430.0 to $465.0$219.0 to $250.9$231.5 to $238.5$(12.5) to $12.5$(11.4)$(26.6) to $(1.7)
  Stock-based compensation expense1.7(24.2)25.925.9
  Amortization of intangibles(0.5)0.50.5
  Restructuring and related charges0.8(0.8)1.61.6
  Non-cash interest expense related to convertible notes and other debt6.26.2
  Tax effect of non-GAAP adjustments$(0.8) to $1.7
Total adjustments2.5(25.5)28.06.2$33.4 to $35.9
Non-GAAP $430.0 to $465.0$221.5 to $253.4$206.0 to $213.0$15.5 to $40.5$(5.2)$9.3 to $31.7
As a % of revenue (GAAP)51.0% to 54.0%53.8% to 51.3%(2.9)% to 2.7%(2.5)% to (2.7)%(6.2)% to (0.4)%
As a % of revenue (Non-GAAP)51.5% to 54.5%47.9% to 45.8%3.6% to 8.7%(1.1)% to (1.2)%2.2% to 6.8%
Diluted net income (loss) per share:
  Diluted net loss per share-GAAP$(0.26) to $(0.02)
  Diluted net income per share-Non-GAAP$0.09 to $0.31
Shares used to compute diluted net loss per share:
  GAAP 101.0
Shares used to compute diluted net income per share:
  Non-GAAP103.7
16


Harmonic Inc.
Adjusted EBITDA Reconciliation on Financial Guidance (Unaudited)
(In millions)

Q1 2021 Financial Guidance2021 Financial Guidance
Net Loss - GAAP$(12.4) to $(7.2)$(26.6) to $(1.7)
Provision for income taxes0.7 2.7 
Interest expense, net2.5 10.2 
Depreciation3.4 14.0 
Amortization of intangibles0.5 0.5 
EBITDA$(5.3) to $(0.1)$0.8 to $25.7
Adjustments
Stock-based compensation9.0 25.9 
Restructuring and related charges0.4 1.6 
Adjusted EBITDA$4.0 to $9.0$27.5 to $53.0
17
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Document and Entity Information Document
Feb. 01, 2021
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 01, 2021
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
Amendment Flag false
Entity Central Index Key 0000851310
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