0000851310-23-000092.txt : 20231030 0000851310-23-000092.hdr.sgml : 20231030 20231030160940 ACCESSION NUMBER: 0000851310-23-000092 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 20231030 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20231030 DATE AS OF CHANGE: 20231030 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: 231360293 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-20231030.htm 8-K hlit-20231030
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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 30, 2023
  
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 October 30, 2023, Harmonic Inc. ("Harmonic" or the “Company”) issued a press release regarding its preliminary unaudited financial results for the quarter ended September 29, 2023. In the press release, Harmonic also announced that it would be holding a conference call on October 30, 2023 to discuss its financial results for the quarter ended September 29, 2023. 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 30, 2023  HARMONIC INC.
By:/s/ Walter Jankovic
   Walter Jankovic
   Chief Financial Officer



EX-99.1 2 hlit-20230929pressreleasew.htm EX-99.1 Document

Exhibit 99.1
logopra07.jpg
pressreleasea29.jpg
FOR IMMEDIATE RELEASE
Harmonic Announces Third Quarter 2023 Results
Video SaaS revenue up 42% year over year
SAN JOSE, California, October 30, 2023 - Harmonic Inc. (NASDAQ: HLIT) today announced its unaudited results for the third quarter of 2023.
“Today we reported third quarter results that were within our guidance range, despite the challenging macro-economic and carrier spending environment,” said Patrick Harshman, president and chief executive officer of Harmonic. “Based on our strong backlog, our customers’ multi-year growth plans, and the increasingly differentiated competitive position of our technologies and services, we remain confident in our mid- and long-term growth prospects.”
Q3 Financial and Business Highlights
Financial
Revenue: $127.2 million, compared to $155.7 million in the prior year period
Broadband segment revenue: $75.8 million, compared to $91.9 million in the prior year period
Video segment revenue: $51.4 million, compared to $63.8 million in the prior year period
Gross margin: GAAP 48.5% and non-GAAP 49.5%, compared to GAAP 50.5% and non-GAAP 50.9% in the prior year period
Broadband segment non-GAAP gross margin: 44.5% compared to 45.0% in the prior year period
Video segment non-GAAP gross margin: 56.9% compared to 59.3% in the prior year period
Operating income (loss): GAAP loss $8.6 million and non-GAAP income $0.1 million, compared to GAAP income $11.4 million and non-GAAP income $18.2 million in the prior year period
Net income (loss): GAAP net loss $6.5 million and non-GAAP net income of $0.0 million, compared to GAAP net income $8.7 million and non-GAAP net income $14.9 million in the prior year period
Non-GAAP adjusted EBITDA: $3.5 million income compared to $21.2 million income in the prior year period
Net income (loss) per share: GAAP net loss per share of $0.06 and non-GAAP net income per share of $0.00, compared to GAAP net income per share of $0.08 and non-GAAP net income per share of $0.13 in the prior year period
Cash: $75.6 million, down $29.7 million year over year
Business
cOS™ solution (formerly CableOS®) commercially deployed with 104 customers, serving 23.5 million cable modems
cOS™ leadership extended to DOCSIS 4.0 through ground-breaking unification of full duplex, extended spectrum and 10G fiber and world-first DOCSIS 4.0 customer rollout
Recently launched Pier optical line terminal (OLT) shelf expands addressable fiber to the home market
Live sports streaming SaaS expansions and new wins drove 42% Video SaaS revenue growth year over year
1


Video Business Review
After careful consideration of the growth opportunities in both our Broadband business and Video SaaS business, and our capital allocation priorities over the next several years, we have initiated a formal strategic review process for our Video business. Together with financial and legal advisors, we are assessing a range of alternatives for the Video business to better position Harmonic for long-term shareholder value creation. As part of this process, we have received indications of interest in our Video business from a number of parties over the past several months. Since the strategic review may cause some disruption to the business, we are conservatively guiding our Video business for Q4 2023.
Please note that no timetable has been established for the completion of the review, and the review may not result in any transaction. We do not intend to disclose further developments with respect to the review process unless and until our board of directors approves a specific transaction or otherwise concludes its review.
Select Financial Information
GAAPNon-GAAP
Key Financial ResultsQ3 2023Q2 2023Q3 2022Q3 2023Q2 2023Q3 2022
(Unaudited, in millions, except per share data)
Net revenue$127.2 $156.0 $155.7 ***
Net income (loss)$(6.5)$1.6 $8.7 $— $14.0 $14.9 
Net income (loss) per share$(0.06)$0.01 $0.08 $0.00 $0.12 $0.13 
Other Financial InformationQ3 2023Q2 2023Q3 2022
(Unaudited, in millions)
Adjusted EBITDA for the quarter (1)
$3.5 $21.1 $21.2 
Bookings for the quarter$96.3 $194.7 $171.1 
Backlog and deferred revenue as of quarter end$627.2 $663.8 $490.1 
Cash and cash equivalents as of quarter end$75.6 $71.0 $105.3 
(1) Adjusted EBITDA is a Non-GAAP financial measure. Refer to "Preliminary 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 2023 GAAP Financial Guidance (1)
(Unaudited, in millions, except percentages and per share data)LowHigh
VideoBroadbandTotal GAAPVideoBroadbandTotal GAAP
Net revenue$45 $105 $150 $55 $120 $175 
Gross margin %48.0 %49.3 %
Gross profit$72 $86 
Operating expenses$70 $73 
Operating income$$13 
Tax rate113 %113 %
Net income (loss) per share$— $(0.02)
Shares112.3 112.3 
Cash$80 $95 
2


 2023 GAAP Financial Guidance (1)
(Unaudited, in millions, except percentages and per share data)LowHigh
VideoBroadbandTotal GAAPVideoBroadbandTotal GAAP
Net revenue$213 $378 $591 $223 $393 $616 
Gross margin %51.2 %51.5 %
Gross profit$303 $317 
Operating expenses$289 $292 
Operating income$14 $25 
Tax rate113 %113 %
Net loss per share$(0.02)$(0.03)
Shares111.6 111.6 
Cash$80 $95 
Q4 2023 Non-GAAP Financial Guidance (1)
(Unaudited, in millions, except percentages and per share data)LowHigh
VideoBroadbandTotal VideoBroadbandTotal
Gross margin %59.0 %44.0 %48.5 %60.0 %45.0 %49.7 %
Gross profit$27 $46 $73 $33 $54 $87 
Operating expenses$33 $29 $62 $35 $30 $65 
Adjusted EBITDA(2)
$(5)$19 $14 $(1)$26 $25 
Tax rate (3)
20 %20 %
Net income per share (3)
$0.07 $0.14 
Shares (3)
117.1117.1
Cash (3)
$80 $95 
(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 "Preliminary Adjusted EBITDA Reconciliation on Financial Guidance" below for a reconciliation to net income (loss), the most comparable GAAP measure.
(3) The guidance is provided at the total company level and not by segment.
 2023 Non-GAAP Financial Guidance (1)
(Unaudited, in millions, except percentages and per share data)LowHigh
VideoBroadbandTotal VideoBroadbandTotal
Gross margin %59.6 %47.4 %51.8 %59.8 %47.6 %52.0 %
Gross profit$127 $179 $306 $133 $187 $320 
Operating expenses$141 $118 $259 $143 $119 $262 
Adjusted EBITDA(2)
$(9)$68 $59 $(4)$75 $71 
Tax rate (3)
20 %20 %
Net income per share (3)
$0.30 $0.38 
Shares (3)
117.7117.7
Cash (3)
$80 $95 
(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 "Preliminary Adjusted EBITDA Reconciliation on Financial Guidance" below for a reconciliation to net income (loss), the most comparable GAAP measure.
(3) The guidance is provided at the total company level and not by segment.
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 30, 2023. 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/BI3094cc53b0c547deb5d7702f14fd72f8. A replay will be available after 5:00 p.m. PT on the same web site.
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 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, as well as our plans for our strategic review of the Video business. 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 Broadband 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 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 cOS™ (formerly CableOS®) and VOS product solutions; dependence on various video and broadband 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 effect 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, 2022, 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, 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.
Non-cash interest expense and other 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.
Gain and losses on equity investments - We exclude the gain and losses from the sale of our equity investments in calculating our non-GAAP financial measures. We exclude these items because we do not believe they are reflective of our ongoing long-term business and 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, including assessing corporate structure and organization, as we seek to optimize value for our business.
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 per share data)
 September 29, 2023December 31, 2022
ASSETS
Current assets:
   Cash and cash equivalents$75,622 $89,586 
Short-term investments6,305 — 
   Accounts receivable, net110,345 108,427 
   Inventories103,748 120,949 
   Prepaid expenses and other current assets33,117 26,337 
Total current assets329,137 345,299 
Property and equipment, net36,960 39,814 
Operating lease right-of-use assets21,604 25,469 
Goodwill237,161 237,739 
Other non-current assets48,949 61,697 
Total assets$673,811 $710,018 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Convertible debt, current$114,654 $113,981 
Other debts, current4,820 4,756 
Accounts payable47,123 67,455 
Deferred revenue56,325 62,383 
Operating lease liabilities, current6,511 6,773 
Other current liabilities45,786 66,724 
Total current liabilities275,219 322,072 
Other debts, non-current9,992 11,161 
Operating lease liabilities, non-current20,019 24,110 
Other non-current liabilities27,781 28,169 
Total liabilities333,011 385,512 
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; 112,171 and 109,871 shares issued and outstanding at September 29, 2023 and December 31, 2022, respectively
112 110 
Additional paid-in capital2,399,282 2,380,651 
Accumulated deficit(2,046,416)(2,046,569)
Accumulated other comprehensive loss(12,178)(9,686)
Total stockholders’ equity340,800 324,506 
Total liabilities and stockholders’ equity$673,811 $710,018 

6


Harmonic Inc.
Preliminary Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
 Three Months EndedNine Months Ended
 September 29, 2023September 30, 2022September 29, 2023September 30, 2022
Revenue:
Appliance and integration$84,760 $116,441 $310,681 $351,293 
SaaS and service42,443 39,297 130,134 109,330 
Total net revenue127,203 155,738 440,815 460,623 
Cost of revenue:
Appliance and integration48,992 64,932 166,177 193,655 
SaaS and service16,527 12,202 43,960 36,781 
Total cost of revenue65,519 77,134 210,137 230,436 
Total gross profit61,684 78,604 230,678 230,187 
Operating expenses:
Research and development30,316 30,466 96,030 89,219 
Selling, general and administrative39,245 36,379 121,300 109,790 
Restructuring and related charges726 335 809 2,136 
Total operating expenses70,287 67,180 218,139 201,145 
Income (loss) from operations(8,603)11,424 12,539 29,042 
Interest expense, net(619)(1,284)(2,125)(4,111)
Other income (expense), net343 (118)(86)4,218 
Income (loss) before income taxes(8,879)10,022 10,328 29,149 
Provision for (benefit from) income taxes(2,384)1,282 10,175 7,098 
Net income (loss)$(6,495)$8,740 $153 $22,051 
Net income (loss) per share:
Basic$(0.06)$0.08 $— $0.21 
Diluted$(0.06)$0.08 $— $0.20 
Weighted average shares outstanding:
Basic112,031 105,228 111,431 104,617 
Diluted112,031 113,185 117,910 110,911 

7


Harmonic Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
 Nine Months Ended
 September 29, 2023September 30, 2022
Cash flows from operating activities:
Net income$153 $22,051 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation9,178 9,225 
Stock-based compensation20,724 19,621 
Amortization of convertible debt discount673 897 
Amortization of warrant870 1,298 
Foreign currency remeasurement(814)(3,312)
Deferred income taxes, net2,026 1,798 
Provision for expected credit losses and returns1,790 1,835 
Provision for excess and obsolete inventories6,514 4,521 
Gain on sale of investment in equity securities— (4,370)
Other adjustments146 419 
Changes in operating assets and liabilities:
Accounts receivable(4,348)(22,115)
Inventories14,532 (34,952)
Other assets6,164 (10,371)
Accounts payable(20,606)1,305 
Deferred revenues(8,312)(955)
Other liabilities(27,898)(770)
Net cash provided by (used in) operating activities792 (13,875)
Cash flows from investing activities:
Purchases of short-term investments(6,305)— 
Proceeds from sale of investment— 7,962 
Purchases of property and equipment(5,749)(7,389)
Net cash provided by (used in) investing activities(12,054)573 
Cash flows from financing activities:
Repurchase of common stock— (5,133)
Proceeds from other debts3,829 3,499 
Repayment of other debts(4,721)(4,480)
Proceeds from common stock issued to employees6,552 6,129 
Taxes paid related to net share settlement of equity awards(8,643)(5,014)
Net cash used in financing activities(2,983)(4,999)
Effect of exchange rate changes on cash and cash equivalents 281 (9,850)
Net decrease in cash and cash equivalents (13,964)(28,151)
Cash and cash equivalents at beginning of period89,586 133,431 
Cash and cash equivalents at end of period$75,622 $105,280 

8


Harmonic Inc.
Preliminary GAAP Revenue Information
(Unaudited, in thousands, except percentages)
Three Months Ended
September 29, 2023June 30, 2023September 30, 2022
Geography
Americas$91,221 72 %$111,407 72 %$106,467 68 %
EMEA28,465 22 %36,242 23 %38,444 25 %
APAC7,517 %8,314 %10,827 %
Total$127,203 100 %$155,963 100 %$155,738 100 %
Market
Service Provider$87,747 69 %$108,703 70 %$106,974 69 %
Broadcast and Media39,456 31 %47,260 30 %48,764 31 %
Total$127,203 100 %$155,963 100 %$155,738 100 %
Nine Months Ended
September 29, 2023September 30, 2022
Geography
Americas$318,294 72 %$327,231 71 %
EMEA97,648 22 %103,845 23 %
APAC24,873 %29,547 %
Total$440,815 100 %$460,623 100 %
Market
Service Provider$314,439 71 %$298,046 65 %
Broadcast and Media126,376 29 %162,577 35 %
Total$440,815 100 %$460,623 100 %

9


Harmonic Inc.
Preliminary Segment Information
(Unaudited, in thousands, except percentages)
Three Months Ended September 29, 2023
VideoBroadbandTotal Segment Measures
Adjustments (1)
Consolidated GAAP Measures
Net revenue$51,397 $75,806 $127,203 $— $127,203 
Gross profit29,241 
(1)
33,763 
(1)
63,004 
(1)
(1,320)61,684 
Gross margin %56.9 %
(1)
44.5 %
(1)
49.5 %
(1)
48.5 %
Three Months Ended June 30, 2023
VideoBroadbandTotal Segment Measures
Adjustments (1)
Consolidated GAAP Measures
Net revenue$58,867 $97,096 $155,963 $— $155,963 
Gross profit36,303 
(1)
49,076 
(1)
85,379 
(1)
(439)84,940 
Gross margin %61.7 %
(1)
50.5 %
(1)
54.7 %
(1)
54.5 %
Three Months Ended September 30, 2022
VideoBroadbandTotal Segment Measures
Adjustments (1)
Consolidated GAAP Measures
Net revenue$63,824 $91,914 $155,738 $— $155,738 
Gross profit37,859 
(1)
41,343 
(1)
79,202 
(1)
(598)78,604 
Gross margin %59.3 %
(1)
45.0 %
(1)
50.9 %
(1)
50.5 %
Nine Months Ended September 29, 2023
VideoBroadbandTotal Segment Measures
Adjustments (1)
Consolidated GAAP Measures
Net revenue$167,562 $273,253 $440,815 $— $440,815 
Gross profit100,158 
(1)
133,129 
(1)
233,287 
(1)
(2,609)230,678 
Gross margin %59.8 %
(1)
48.7 %
(1)
52.9 %
(1)
52.3 %
Nine Months Ended September 30, 2022
VideoBroadbandTotal Segment Measures
Adjustments (1)
Consolidated GAAP Measures
Net revenue$205,881 $254,742 $460,623 $— $460,623 
Gross profit124,679 
(1)
107,290 
(1)
231,969 
(1)
(1,782)230,187 
Gross margin %60.6 %
(1)
42.1 %
(1)
50.4 %
(1)
50.0 %
(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".
10


Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(in thousands, except percentages and per share data)
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 and other expenses 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 
Three Months Ended June 30, 2023
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsTotal Non-operating Expense, netNet Income
GAAP$155,963 $84,940 $74,978 $9,962 $(936)$1,555 
Stock-based compensation— 439 (5,620)6,059 — 6,059 
Restructuring and related charges— — — — — — 
Non-recurring advisory fees— — (2,135)2,135 — 2,135 
Non-cash interest and other expenses related to convertible notes— — — — 223 223 
Discrete tax items and tax effect of non-GAAP adjustments— — — — — 3,982 
Total adjustments— 439 (7,755)8,194 223 12,399 
Non-GAAP $155,963 $85,379 $67,223 $18,156 $(713)$13,954 
As a % of revenue (GAAP)54.5 %48.1 %6.4 %(0.6)%1.0 %
As a % of revenue (Non-GAAP)54.7 %43.1 %11.6 %(0.5)%8.9 %
Diluted net income per share:
GAAP$0.01 
Non-GAAP$0.12 
Shares used in per share calculation:
GAAP and Non-GAAP119,255 
11


Three Months Ended September 30, 2022
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsTotal Non-operating Expense, netNet Income
GAAP$155,738 $78,604 $67,180 $11,424 $(1,402)$8,740 
Stock-based compensation— 607 (5,853)6,460 — 6,460 
Restructuring and related charges— (9)(335)326 — 326 
Non-cash interest and other expenses related to convertible notes— — — — 303 303 
Discrete tax items and tax effect of non-GAAP adjustments— — — — — (942)
Total adjustments— 598 (6,188)6,786 303 6,147 
Non-GAAP $155,738 $79,202 $60,992 $18,210 $(1,099)$14,887 
As a % of revenue (GAAP)50.5 %43.1 %7.3 %(0.9)%5.6 %
As a % of revenue (Non-GAAP)50.9 %39.2 %11.7 %(0.7)%9.6 %
Diluted net income per share:
GAAP$0.08 
Non-GAAP$0.13 
Shares used in per share calculation:
GAAP and Non-GAAP113,185 

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 and other expenses 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 

12


Nine Months Ended September 30, 2022
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsTotal Non-operating Income (Expense), netNet Income
GAAP$460,623 $230,187 $201,145 $29,042 $107 $22,051 
Stock-based compensation— 1,691 (17,930)19,621 — 19,621 
Restructuring and related charges— 91 (2,136)2,227 — 2,227 
Gain on sale of equity investment— — — — (4,349)(4,349)
Non-cash interest and other expenses related to convertible notes— — — — 899 899 
Discrete tax items and tax effect of non-GAAP adjustments— — — — — 917 
Total adjustments— 1,782 (20,066)21,848 (3,450)19,315 
Non-GAAP $460,623 $231,969 $181,079 $50,890 $(3,343)$41,366 
As a % of revenue (GAAP)50.0 %43.7 %6.3 %— %4.8 %
As a % of revenue (Non-GAAP)50.4 %39.3 %11.0 %(0.7)%9.0 %
Diluted net income per share:
GAAP$0.20 
Non-GAAP$0.37 
Shares used in per share calculation:
GAAP and Non-GAAP110,911 
13


Harmonic Inc.
Calculation of Adjusted EBITDA by Segment (Unaudited)
(In thousands)
Three Months Ended September 29, 2023
VideoBroadband
Income (loss) from operations (1)
$(6,050)$6,128 
Depreciation1,343 1,746 
Other non-operating expenses, net132 211 
Adjusted EBITDA(2)
(4,575)8,085 
Revenue51,397 75,806 
Adjusted EBITDA margin % (2)
(8.9)%10.7 %
Three Months Ended June 30, 2023
VideoBroadband
Income from operations (1)
$90 $18,066 
Depreciation1,388 1,671 
Other non-operating expenses, net(52)(84)
Adjusted EBITDA(2)
1,426 19,653 
Revenue58,867 97,096 
Adjusted EBITDA margin % (2)
2.4 %20.2 %
Three Months Ended September 30, 2022
VideoBroadband
Income from operations (1)
$2,907 $15,303 
Depreciation1,467 1,630 
Other non-operating expenses, net(56)(62)
Adjusted EBITDA(2)
4,318 16,871 
Revenue63,824 91,914 
Adjusted EBITDA margin % (2)
6.8 %18.4 %
Nine Months Ended September 29, 2023
VideoBroadband
Income (loss) from operations (1)
$(7,386)$44,307 
Depreciation4,117 5,061 
Other non-operating expenses, net(42)(44)
Adjusted EBITDA(2)
(3,311)49,324 
Revenue167,562 273,253 
Adjusted EBITDA margin % (2)
(2.0)%18.1 %
Nine Months Ended September 30, 2022
VideoBroadband
Income from operations (1)
$17,317 $33,573 
Depreciation4,613 4,612 
Other non-operating expenses, net(62)(69)
Adjusted EBITDA(2)
21,868 38,116 
Revenue205,881 254,742 
Adjusted EBITDA margin % (2)
10.6 %15.0 %
(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 reconciliation of consolidated adjusted EBITDA to net income (loss), the most directly comparable GAAP measure.
14



Harmonic Inc.
Preliminary Net Income (Loss) to Consolidated Segment Adjusted EBITDA Reconciliation (Unaudited)
(In thousands)
Three Months Ended
September 29, 2023June 30, 2023September 30, 2022
Net income (loss) (GAAP)$(6,495)$1,555 $8,740 
Provision for (benefit from) income taxes(2,384)7,471 1,282 
Interest expense, net619 800 1,284 
Depreciation3,089 3,059 3,097 
EBITDA(5,171)12,885 14,403 
Adjustments
Stock-based compensation7,241 6,059 6,460 
Restructuring and related charges1,076 — 326 
Non-recurring advisory fees364 2,135 — 
Total consolidated segment adjusted EBITDA (Non-GAAP)$3,510 $21,079 $21,189 
Revenue$127,203 $155,963 $155,738 
Net income (loss) margin (GAAP)(5.1)%1.0 %5.6 %
Consolidated segment adjusted EBITDA margin (Non-GAAP)2.8 %13.5 %13.6 %
Nine Months Ended
September 29, 2023September 30, 2022
Net income (GAAP)$153 $22,051 
Provision for income taxes10,175 7,098 
Interest expense, net2,125 4,111 
Depreciation9,178 9,225 
EBITDA21,631 42,485 
Adjustments
Stock-based compensation20,724 19,621 
Restructuring and related charges1,159 2,227 
Non-recurring advisory fees2,499 — 
Gain on sale of equity investment— (4,349)
Total consolidated segment adjusted EBITDA (Non-GAAP)$46,013 $59,984 
Revenue$440,815 $460,623 
Net income margin (GAAP)— %4.8 %
Consolidated segment adjusted EBITDA margin (Non-GAAP)10.4 %13.0 %


15


Harmonic Inc.
GAAP to Non-GAAP Reconciliations on Financial Guidance (Unaudited)
(In millions, except percentages and per share data)
Q4 2023 Financial Guidance (1)
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsNet Income (Loss)
GAAP$150 to$175 $72 to$86 $70 to$73 $to$13 $— to$(2)
Stock-based compensation expense1(6)77
Restructuring and related charges(2)22
Gain on equity investment(3)
Tax effect of non-GAAP adjustmentsto13 
Total adjustments1(8)9to19 
Non-GAAP$150 to$175 $73 to$87 $62 to$65 $11 to$22 $to$17 
As a % of revenue (GAAP)48.0%to49.3%46.7%to41.7%1.4%to7.7%—%to(1.1)%
As a % of revenue (Non-GAAP)48.5%to49.7%41.3%to37.1%7.2%to12.6%5.1%to9.5%
Diluted net income (loss) per share:
GAAP$— to$(0.02)
Non-GAAP$0.07 to$0.14 
Shares used in per share calculation:
GAAP112.3
Non-GAAP117.1
(1) Components may not sum to total due to rounding.


2023 Financial Guidance (1)
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsNet Income (Loss)
GAAP$591 to$616 $303 to$317 $289 to$292 $14 to$26 $(2)to$(3)
Stock-based compensation expense2(25)2727
Restructuring and related charges1(2)33
Non-recurring advisory fees(3)33
Non-cash interest and other expenses related to convertible notes1
Gain on sale of equity investment(3)
Tax effect of non-GAAP adjustmentsto17 
Total adjustments3(30)3338 to48 
Non-GAAP$591 to$616 $306 to$320 $259 to$262 $47 to$59 $36 to$45 
As a % of revenue (GAAP)51.2%to51.5%48.9%to47.4%2.4%to4.2%(0.3)%to(0.5)%
As a % of revenue (Non-GAAP)51.8%to52.0%43.8%to42.5%8.0%to9.5%6.1%to7.3%
Diluted net income (loss) per share:
GAAP$(0.02)to$(0.03)
Non-GAAP$0.30 to$0.38 
Shares used in per share calculation:
GAAP111.6
Non-GAAP117.7
(1) Components may not sum to total due to rounding.
16


Harmonic Inc.
Calculation of Adjusted EBITDA by Segment on Financial Guidance (Unaudited) (1)
(In millions)
Q4 2023 Financial Guidance
VideoBroadband
Income (loss) from operations (2)
$(6)to$(2)$17 to$24 
Depreciation
Other non-operating expenses— — — — 
Segment adjusted EBITDA(3)
(5)to(1)19 to26 
2023 Financial Guidance
VideoBroadband
Income (loss) from operations (2)
$(14)to$(10)$61 to$68 
Depreciation
Other non-operating expenses(1)— — — 
Segment adjusted EBITDA(3)
(9)to(4)68 to75 
(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 (loss) to consolidated segment adjusted EBITDA reconciliation on Financial Guidance".


17


Harmonic Inc.
Net Income (Loss) to Consolidated Segment Adjusted EBITDA Reconciliation on Financial Guidance (Unaudited) (1)
(In millions)
Q4 2023 Financial Guidance2023 Financial Guidance
Net income (loss) (GAAP)$— to$(2)(2)to$(3)
Provision for income taxes17 1528 
Interest expense, net
Depreciation13 13 
EBITDA$to$19 $29 to$41 
Adjustments
Stock-based compensation27 27 
Restructuring and related charges
Non-recurring advisory fees— — 
Gain on sale of equity investment(3)(3)(3)(3)
Total consolidated segment adjusted EBITDA (Non-GAAP) (2)
$14 to$25 $59 to$71 
(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
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Cover
Oct. 30, 2023
Cover [Abstract]  
Amendment Flag false
Entity Central Index Key 0000851310
Document Type 8-K
Document Period End Date Oct. 30, 2023
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
XML 9 hlit-20231030_htm.xml IDEA: XBRL DOCUMENT 0000851310 2023-10-30 2023-10-30 false 0000851310 8-K 2023-10-30 HARMONIC INC. 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