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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): August 1, 2022
  
HARMONIC INC.
(Exact name of Registrant as specified in its charter)
 
 
Delaware 000-25826 77-0201147
(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 class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.001 per share HLIT NASDAQ 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 August 1, 2022, Harmonic Inc. ("Harmonic" or the “Company”) issued a press release regarding its preliminary unaudited financial results for the quarter ended July 1, 2022. In the press release, Harmonic also announced that it would be holding a conference call on August 1, 2022 to discuss its financial results for the quarter ended July 1, 2022. 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
  
104 Cover 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: August 1, 2022     HARMONIC INC.
By: /s/ Sanjay Kalra
      Sanjay Kalra
      Chief Financial Officer



EX-99.1 2 hlit-20220701pressrelease.htm EX-99.1 Document

Exhibit 99.1
logopra07a.jpg
pressreleasea29a.jpg
FOR IMMEDIATE RELEASE
Harmonic Announces Second Quarter 2022 Results
Record total revenue up 39% year over year
Cable Access revenue up 62% and Video SaaS revenue up 69% year over year

SAN JOSE, California, August 01, 2022 - Harmonic Inc. (NASDAQ: HLIT) today announced its unaudited results for the second quarter of 2022.
“Harmonic delivered another record quarter, with 39% year over year revenue growth and over 15% adjusted EBITDA margin," said Patrick Harshman, president and chief executive officer of Harmonic. "Our Cable Access business grew 62% and our Video SaaS revenue grew 69% year over year, highlighting strong demand and powerful competitive differentiation. We ended the second quarter with backlog and deferred revenue near record levels, providing good visibility as we enter the second half of 2022.”
Q2 Financial and Business Highlights
Financial
•Revenue: $157.4 million, up 39% year over year
◦Cable Access segment revenue: $81.2 million, up 62% year over year
◦Video segment revenue: $76.2 million, up 20% year over year
•Gross margin: GAAP 52.3% and non-GAAP 52.8%, compared to GAAP 53.3% and non-GAAP 53.9% in the year ago period
◦Cable Access segment gross margin: 43.0% compared to 47.0% in the year ago period
◦Video segment gross margin: 63.2% compared to 59.3% in the year ago period
•Operating income: GAAP income $15.1 million and non-GAAP income $21.4 million, compared to GAAP income $2.1 million and non-GAAP income $6.6 million in the year ago period
•Net income: GAAP net income $14.8 million and non-GAAP net income of $17.6 million, compared to GAAP net loss $2.0 million and non-GAAP net income $4.8 million in the year ago period
•Adjusted EBITDA: $24.3 million income compared to $9.5 million income in the year ago period
•EPS: GAAP net income per share of $0.14 and non-GAAP net income per share of $0.16, compared to GAAP net loss per share of $0.02 and non-GAAP net income per share of $0.05 in the year ago period
•Cash: $121.8 million, up $6.6 million year over year
Business
•CableOS® solution commercially deployed with 79 customers, up 27% year over year
•CableOS deployments scaled to 8.5 million served cable modems, up 159% year over year
•New Tier 1 live sports streaming SaaS wins and expansions

1


Select Financial Information
GAAP Non-GAAP
Key Financial Results Q2 2022 Q1 2022 Q2 2021 Q2 2022 Q1 2022 Q2 2021
(Unaudited, in millions, except per share data)
Net revenue $ 157.4  $ 147.4  $ 113.4  $ 157.4  $ 147.4  $ 113.4 
Net income (loss) $ 14.8  $ (1.5) $ (2.0) $ 17.6  $ 8.9  $ 4.8 
EPS $ 0.14  $ (0.01) $ (0.02) $ 0.16  $ 0.08  $ 0.05 
Other Financial Information Q2 2022 Q1 2022 Q2 2021
(Unaudited, in millions)
Adjusted EBITDA for the quarter $ 24.3  $ 14.5  $ 9.5 
Bookings for the quarter $ 140.9  $ 205.5  $ 186.9 
Backlog and deferred revenue as of quarter end $ 477.8  $ 497.3  $ 347.2 
Cash and cash equivalents as of quarter end $ 121.8  $ 100.7  $ 115.2 
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
 Q3 2022 GAAP Financial Guidance (1)
Low High
(Unaudited, in millions, except percentages and per share data) Video Cable Access
Adjustments (2)
Total
GAAP
Video Cable Access
Adjustments (2)
Total
GAAP
Net revenue $ 62  $ 85  $ —  $ 147  $ 66  $ 91  $ —  $ 157 
Gross margin % 57.0  % 43.0  % (0.6) % 48.3  % 58.0  % 45.0  % (0.6) % 49.9  %
Gross profit $ 35  $ 37  $ (1) $ 71  $ 38  $ 41  $ (1) $ 78 
Operating expenses $ 36  $ 24  $ $ 66  $ 37  $ 26  $ $ 69 
Operating income (loss) $ (1) $ 13  $ (7) $ $ $ 15  $ (7) $
Tax rate (3)
33.0  % 33.0  %
EPS (3)
$ 0.02  $ 0.05 
Shares (3)
109.5  109.5 
Cash (3)
$ 110  $ 120 
(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” below.
(3) The guidance is provided at the total company level and not by segment.

2


 2022 GAAP Financial Guidance (1)
Low High
(Unaudited, in millions, except percentages and per share data) Video Cable Access
Adjustments (2)
Total GAAP Video Cable Access
Adjustments (2)
Total GAAP
Net revenue $ 272  $ 335  $ —  $ 607  $ 282  $ 345  $ —  $ 627 
Gross margin % 58.3  % 42.1  % (0.5) % 48.9  % 59.5  % 43.5  % (0.4) % 50.3  %
Gross profit $ 159  $ 141  $ (3) $ 297  $ 168  $ 150  $ (3) $ 315 
Operating expenses $ 145  $ 94  $ 25  $ 264  $ 148  $ 100  $ 25  $ 273 
Operating income $ 14  $ 47  $ (28) $ 33  $ 20  $ 50  $ (28) $ 42 
Tax rate (3)
33.0  % 33.0  %
EPS (3)
$ 0.19  $ 0.25 
Shares (3)
109.6  109.6 
Cash (3)
$ 95  $ 105 
(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” below.
(3) The guidance is provided at the total company level and not by segment.

Q3 2022 Non-GAAP Financial Guidance (1)
Low High
(Unaudited, in millions, except percentages and per share data) Video Cable Access Total Video Cable Access Total
Net revenue $ 62  $ 85  $ 147  $ 66  $ 91  $ 157 
Gross margin % 57.0  % 43.0  % 48.9  % 58.0  % 45.0  % 50.5  %
Gross profit $ 35  $ 37  $ 72  $ 38  $ 41  $ 79 
Operating expenses $ 36  $ 24  $ 60  $ 37  $ 26  $ 63 
Adjusted EBITDA $ $ 14  $ 15  $ $ 16  $ 19 
Tax rate (2)
13.0  % 13.0  %
EPS (2)
$ 0.08  $ 0.12 
Shares (2)
109.5 109.5
Cash (2)
$ 110  $ 120 
(1) Refer to “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliations” below. Components may not sum to total due to rounding.
(2) The guidance is provided at the total company level and not by segment.

 2022 Non-GAAP Financial Guidance (1)
Low High
(Unaudited, in millions, except percentages and per share data) Video Cable Access Total Video Cable Access Total
Net revenue $ 272  $ 335  $ 607  $ 282  $ 345  $ 627 
Gross margin % 58.3  % 42.1  % 49.4  % 59.5  % 43.5  % 50.7  %
Gross profit $ 159  $ 141  $ 300  $ 168  $ 150  $ 318 
Operating expenses $ 145  $ 94  $ 239  $ 148  $ 100  $ 248 
Adjusted EBITDA $ 19  $ 53  $ 72  $ 26  $ 56  $ 82 
Tax rate (2)
13.0  % 13.0  %
EPS (2)
$ 0.44  $ 0.52 
Shares (2)
109.6 109.6
Cash (2)
$ 95  $ 105 

(1) Refer to “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliations” below. Components may not sum to total due to rounding.
(2) 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, August 1, 2022. 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/BIa55199c150564ee4b8118917be1e93c9. 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 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 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, 2021, 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) (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.
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, 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 Kalra David Hanover
Chief Financial Officer Investor Relations
Harmonic Inc. Harmonic Inc.
+1.408.490.6031 +1.212.896.1220

 

5


Harmonic Inc.
Preliminary Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except per share data)
  July 1, 2022 December 31, 2021
ASSETS
Current assets:
   Cash and cash equivalents $ 121,819  $ 133,431 
   Accounts receivable, net 106,351  88,529 
   Inventories 82,636  71,195 
   Prepaid expenses and other current assets 27,620  29,972 
Total current assets 338,426  323,127 
Property and equipment, net 41,604  42,721 
Operating lease right-of-use assets 27,183  30,968 
Other non-current assets 54,315  56,657 
Goodwill 236,931  240,213 
Total assets $ 698,459  $ 693,686 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Convertible debt, current $ 37,588  $ 36,824 
Other debts, current 4,717  4,992 
Accounts payable 38,515  64,429 
Deferred revenue 74,599  57,226 
Operating lease liabilities, current 6,950  7,346 
Other current liabilities 59,615  53,644 
Total current liabilities 221,984  224,461 
Convertible debt, non-current 113,541  98,941 
Other debts, non-current 11,060  12,989 
Operating lease liabilities, non-current 25,885  29,120 
Other non-current liabilities 29,153  31,379 
Total liabilities 401,623  396,890 
Convertible debt —  883 
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; 105,061 and 102,959 shares issued and outstanding at July 1, 2022 and December 31, 2021, respectively
105  103 
Additional paid-in capital 2,371,001  2,387,039 
Accumulated deficit (2,061,320) (2,087,957)
Accumulated other comprehensive loss (12,950) (3,272)
Total stockholders’ equity 296,836  295,913 
Total liabilities and stockholders’ equity $ 698,459  $ 693,686 

6


Harmonic Inc.
Preliminary Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
  Three Months Ended Six Months Ended
  July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021
Revenue:
Appliance and integration $ 121,868  $ 78,598  $ 234,852  $ 158,574 
SaaS and service 35,578  34,850  70,033  66,450 
Total net revenue 157,446  113,448  304,885  225,024 
Cost of revenue:
Appliance and integration 62,341  40,365  128,723  82,984 
SaaS and service 12,704  12,578  24,579  26,390 
Total cost of revenue 75,045  52,943  153,302  109,374 
Total gross profit 82,401  60,505  151,583  115,650 
Operating expenses:
Research and development 29,920  24,783  58,753  48,311 
Selling, general and administrative 36,768  33,586  73,411  68,497 
Amortization of intangibles —  —  —  507 
Restructuring and related charges 631  —  1,801  43 
Total operating expenses 67,319  58,369  133,965  117,358 
Income (loss) from operations 15,082  2,136  17,618  (1,708)
Interest expense, net (1,394) (2,630) (2,827) (5,233)
Other income (expense), net 4,274  (147) 4,336  872 
Income (loss) before income taxes 17,962  (641) 19,127  (6,069)
Provision for income taxes 3,122  1,368  5,816  2,064 
Net income (loss) $ 14,840  $ (2,009) $ 13,311  $ (8,133)
Net income (loss) per share:
Basic $ 0.14  $ (0.02) $ 0.13  $ (0.08)
Diluted $ 0.14  $ (0.02) $ 0.12  $ (0.08)
Weighted average shares outstanding:
Basic 104,630  101,218  104,312  100,539 
Diluted 108,984  101,218  109,774  100,539 

7


Harmonic Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
  Six Months Ended
  July 1, 2022 July 2, 2021
Cash flows from operating activities:
Net income (loss) $ 13,311  $ (8,133)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation 6,128  6,164 
Amortization of intangibles —  507 
Stock-based compensation 13,161  12,429 
Amortization of convertible debt discount 596  3,093 
Amortization of warrant 863  863 
Foreign currency remeasurement (1,680) (1,897)
Deferred income taxes 1,401  981 
Provision for expected credit losses and returns 1,648  2,230 
Provision for excess and obsolete inventories 3,805  1,004 
Gains on sale of investment in equity securities (4,370) — 
Other adjustments 338  111 
Changes in operating assets and liabilities:
Accounts receivable (21,386) (36,709)
Inventories (15,429) (8,825)
Other assets (1,367) 882 
Accounts payable (23,355) 14,544 
Deferred revenues 16,393  15,553 
Other liabilities 4,287  15,642 
Net cash provided by (used in) operating activities (5,656) 18,439 
Cash flows from investing activities:
Proceeds from sale of investment 7,962  — 
Purchases of property and equipment (5,504) (7,685)
Net cash provided by (used) in investing activities 2,458  (7,685)
Cash flows from financing activities:
Repurchase of common stock (5,013) — 
Proceeds from other debts 3,499  3,772 
Repayment of other debts (4,393) (5,401)
Proceeds from common stock issued to employees 6,130  9,068 
Payment of tax withholding obligations related to net share settlements of restricted stock units (3,083) (1,194)
Net cash provided by (used in) financing activities (2,860) 6,245 
Effect of exchange rate changes on cash and cash equivalents (5,554) (467)
Net increase (decrease) in cash and cash equivalents (11,612) 16,532 
Cash and cash equivalents at beginning of period 133,431  98,645 
Cash and cash equivalents at end of period $ 121,819  $ 115,177 

8


Harmonic Inc.
Preliminary GAAP Revenue Information
(Unaudited, in thousands, except percentages)
Three Months Ended
July 1, 2022 April 1, 2022 July 2, 2021
Geography
Americas $ 117,607  75  % $ 103,157  70  % $ 71,525  63  %
EMEA 29,699  19  % 35,702  24  % 28,441  25  %
APAC 10,140  % 8,580  % 13,482  12  %
Total $ 157,446  100  % $ 147,439  100  % $ 113,448  100  %
Market
Service Provider $ 98,551  63  % $ 92,521  63  % $ 68,929  61  %
Broadcast and Media 58,895  37  % 54,918  37  % 44,519  39  %
Total $ 157,446  100  % $ 147,439  100  % $ 113,448  100  %
Six Months Ended
July 1, 2022 July 2, 2021
Geography
Americas $ 220,764  72  % $ 146,587  65  %
EMEA 65,401  22  % 56,048  25  %
APAC 18,720  % 22,389  10  %
Total $ 304,885  100  % $ 225,024  100  %
Market
Service Provider $ 191,072  63  % $ 122,589  54  %
Broadcast and Media 113,813  37  % 102,435  46  %
Total $ 304,885  100  % $ 225,024  100  %


9


Harmonic Inc.
Preliminary Segment Information
(Unaudited, in thousands, except percentages)
Three Months Ended July 1, 2022
Video Cable Access Total Segment Measures
(non-GAAP)
Adjustments (1)
Consolidated GAAP Measures
Net revenue $ 76,215  $ 81,231  $ 157,446  $ —  $ 157,446 
Gross profit 48,136  34,936  83,072  (671) 82,401 
Gross margin % 63.2  % 43.0  % 52.8  % 52.3  %
Adjusted EBITDA(2)
12,749  11,595  24,344  (9,504) 14,840 
Adjusted EBITDA margin % 16.7  % 14.3  % 15.5  % 9.4  %
Three Months Ended April 1, 2022
Video Cable Access Total Segment Measures
(non-GAAP)
Adjustments (1)
Consolidated GAAP Measures
Net revenue $ 65,842  $ 81,597  $ 147,439  $ —  $ 147,439 
Gross profit 38,684  31,011  69,695  (513) 69,182 
Gross margin % 58.8  % 38.0  % 47.3  % 46.9  %
Adjusted EBITDA(2)
4,801  9,650  14,451  (15,980) (1,529)
Adjusted EBITDA margin % 7.3  % 11.8  % 9.8  % (1.0) %
Three Months Ended July 2, 2021
Video Cable Access Total Segment Measures
(non-GAAP)
Adjustments (1)
Consolidated GAAP Measures
Net revenue $ 63,355  $ 50,093  $ 113,448  $ —  $ 113,448 
Gross profit 37,571  23,538  61,109  (604) 60,505 
Gross margin % 59.3  % 47.0  % 53.9  % 53.3  %
Adjusted EBITDA(2)
3,399  6,112  9,511  (11,520) (2,009)
Adjusted EBITDA margin % 5.4  % 12.2  % 8.4  % (1.8) %
Six Months Ended July 1, 2022
Video Cable Access Total Segment Measures
(non-GAAP)
Adjustments (1)
Consolidated GAAP Measures
Net revenue $ 142,057  $ 162,828  $ 304,885  $ —  $ 304,885 
Gross profit 86,820  65,947  152,767  (1,184) 151,583 
Gross margin % 61.1  % 40.5  % 50.1  % 49.7  %
Adjusted EBITDA(2)
17,550  21,245  38,795  (25,484) 13,311 
Adjusted EBITDA margin % 12.4  % 13.0  % 12.7  % 4.4  %
Six Months Ended July 2, 2021
Video Cable Access Total Segment Measures
(non-GAAP)
Adjustments (1)
Consolidated GAAP Measures
Net revenue $ 133,686  $ 91,338  $ 225,024  $ —  $ 225,024 
Gross profit 76,345  40,946  117,291  (1,641) 115,650 
Gross margin % 57.1  % 44.8  % 52.1  % 51.4  %
Adjusted EBITDA(2)
9,512  9,141  18,653  (26,786) (8,133)
Adjusted EBITDA margin % 7.1  % 10.0  % 8.3  % (3.6) %
(1) Refer to “Use of Non-GAAP Financial Measures” above and “GAAP to Non-GAAP Reconciliations” below.
(2) Adjusted EBITDA is a Non-GAAP financial measure. Refer to “Preliminary Adjusted EBITDA Reconciliation” below for a reconciliation to the most comparable GAAP measure.
10


Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(in thousands, except percentages and per share data)
Three Months Ended July 1, 2022
Revenue Gross Profit Total Operating Expense Income from Operations Total Non-operating Income (Expense), net Net Income
GAAP $ 157,446  $ 82,401  $ 67,319  $ 15,082  $ 2,880  $ 14,840 
Stock-based compensation —  557  (5,018) 5,575  —  5,575 
Restructuring and related charges —  114  (631) 745  —  745 
Gain on sale of equity investment —  —  —  —  (4,349) (4,349)
Non-cash interest and other expenses related to convertible notes —  —  —  —  299  299 
Discrete tax items and tax effect of non-GAAP adjustments —  —  —  —  —  492 
Total adjustments —  671  (5,649) 6,320  (4,050) 2,762 
Non-GAAP $ 157,446  $ 83,072  $ 61,670  $ 21,402  $ (1,170) $ 17,602 
As a % of revenue (GAAP) 52.3  % 42.8  % 9.6  % 1.8  % 9.4  %
As a % of revenue (Non-GAAP) 52.8  % 39.2  % 13.6  % (0.7) % 11.2  %
Diluted net income per share:
GAAP $ 0.14 
Non-GAAP $ 0.16 
Shares used in per share calculation:
GAAP and Non-GAAP 108,984 
Three Months Ended April 1, 2022
Revenue Gross Profit Total Operating Expense Income from Operations Total Non-operating Expense, net Net Income (Loss)
GAAP $ 147,439  $ 69,182  $ 66,646  $ 2,536  $ (1,371) $ (1,529)
Stock-based compensation —  527  (7,059) 7,586  —  7,586 
Restructuring and related charges —  (14) (1,170) 1,156  —  1,156 
Non-cash interest and other expenses related to convertible notes —  —  —  —  297  297 
Discrete tax items and tax effect of non-GAAP adjustments —  —  —  —  —  1,367 
Total adjustments —  513  (8,229) 8,742  297  10,406 
Non-GAAP $ 147,439  $ 69,695  $ 58,417  $ 11,278  $ (1,074) $ 8,877 
As a % of revenue (GAAP) 46.9  % 45.2  % 1.7  % (0.9) % (1.0) %
As a % of revenue (Non-GAAP) 47.3  % 39.6  % 7.6  % (0.7) % 6.0  %
Diluted net income (loss) per share:
GAAP $ (0.01)
Non-GAAP $ 0.08 
Shares used in per share calculation:
GAAP 103,994 
Non-GAAP 110,563 
11


Three Months Ended July 2, 2021
Revenue Gross Profit Total Operating Expense Income from Operations Total Non-operating Expense, net Net Income (Loss)
GAAP $ 113,448  $ 60,505  $ 58,369  $ 2,136  $ (2,777) $ (2,009)
Stock-based compensation —  222  (3,811) 4,033  —  4,033 
Restructuring and related charges —  382  —  382  —  382 
Non-cash interest and other expenses related to convertible notes —  —  —  —  1,560  1,560 
Discrete tax items and tax effect of non-GAAP adjustments —  —  —  —  —  836 
Total adjustments —  604  (3,811) 4,415  1,560  6,811 
Non-GAAP $ 113,448  $ 61,109  $ 54,558  $ 6,551  $ (1,217) $ 4,802 
As a % of revenue (GAAP) 53.3  % 51.5  % 1.9  % (2.4) % (1.8) %
As a % of revenue (Non-GAAP) 53.9  % 48.1  % 5.8  % (1.1) % 4.2  %
Diluted net income (loss) per share:
GAAP $ (0.02)
Non-GAAP $ 0.05 
Shares used in per share calculation:
GAAP 101,218 
Non-GAAP 103,825 
Six Months Ended July 1, 2022
Revenue Gross Profit Total Operating Expense Income from Operations Total Non-operating Income (Expense), net Net Income
GAAP $ 304,885  $ 151,583  $ 133,965  $ 17,618  $ 1,509  $ 13,311 
Stock-based compensation —  1,084  (12,077) 13,161  —  13,161 
Restructuring and related charges —  100  (1,801) 1,901  —  1,901 
Gain on sale of equity investment —  —  —  —  (4,349) (4,349)
Non-cash interest and other expenses related to convertible notes —  —  —  —  596  596 
Discrete tax items and tax effect of non-GAAP adjustments —  —  —  —  —  1,859 
Total adjustments —  1,184  (13,878) 15,062  (3,753) 13,168 
Non-GAAP $ 304,885  $ 152,767  $ 120,087  $ 32,680  $ (2,244) $ 26,479 
As a % of revenue (GAAP) 49.7  % 43.9  % 5.8  % 0.5  % 4.4  %
As a % of revenue (Non-GAAP) 50.1  % 39.4  % 10.7  % (0.7) % 8.7  %
Diluted net income per share:
GAAP $ 0.12 
Non-GAAP $ 0.24 
Shares used in per share calculation:
GAAP and Non-GAAP 109,774 
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Six Months Ended July 2, 2021
Revenue Gross Profit Total Operating Expense Income (Loss) from Operations Total Non-operating Expense, net Net Income (Loss)
GAAP $ 225,024  $ 115,650  $ 117,358  $ (1,708) $ (4,361) $ (8,133)
Stock-based compensation —  1,295  (11,136) 12,431  —  12,431 
Amortization of intangibles —  —  (507) 507  —  507 
Restructuring and related charges —  346  (43) 389  —  389 
Non-cash interest and other expenses related to convertible notes —  —  —  —  3,092  3,092 
Discrete tax items and tax effect of non-GAAP adjustments —  —  —  —  —  1,030 
Total adjustments —  1,641  (11,686) 13,327  3,092  17,449 
Non-GAAP $ 225,024  $ 117,291  $ 105,672  $ 11,619  $ (1,269) $ 9,316 
As a % of revenue (GAAP) 51.4  % 52.2  % (0.8) % (1.9) % (3.6) %
As a % of revenue (Non-GAAP) 52.1  % 47.0  % 5.2  % (0.6) % 4.1  %
Diluted net income (loss) per share:
GAAP $ (0.08)
Non-GAAP $ 0.09 
Shares used in per share calculation:
GAAP 100,539 
Non-GAAP 103,494 
13


Harmonic Inc.
Preliminary Adjusted EBITDA Reconciliation (Unaudited)
(In thousands)
Three Months Ended
July 1, 2022 April 1, 2022 July 2, 2021
Net income (loss) - GAAP $ 14,840  $ (1,529) $ (2,009)
Provision for income taxes 3,122  2,694  1,368 
Interest expense, net 1,394  1,433  2,630 
Depreciation 3,017  3,111  3,107 
EBITDA 22,373  5,709  5,096 
Adjustments
Stock-based compensation 5,575  7,586  4,033 
Restructuring and related charges 745  1,156  382 
Gain on sale of equity investment (4,349) —  — 
Adjusted EBITDA $ 24,344  $ 14,451  $ 9,511 
Six Months Ended
July 1, 2022 July 2, 2021
Net income (loss) - GAAP $ 13,311  $ (8,133)
Provision for income taxes 5,816  2,064 
Interest expense, net 2,827  5,233 
Depreciation 6,128  6,164 
Amortization of intangibles —  507 
EBITDA 28,082  5,835 
Adjustments
Stock-based compensation 13,161  12,431 
Restructuring and related charges 1,901  389 
Gain on sale of equity investment (4,349) — 
Adjusted EBITDA $ 38,795  $ 18,655 


14


Harmonic Inc.
GAAP to Non-GAAP Reconciliations on Financial Guidance (Unaudited)
(In millions, except percentages and per share data)
Q3 2022 Financial Guidance (1)
Revenue Gross Profit Total Operating Expense Net Income
GAAP $ 147  to $ 157  $ 71  to $ 78  $ 66  to $ 69  $ to $
Stock-based compensation expense 1 (6) 7
Restructuring and related charges (1) 1
Non-cash interest and other expenses related to convertible notes
Tax effect of non-GAAP adjustments —  to
Total adjustments 1 (6) to
Non-GAAP $ 147  to $ 157  $ 72  to $ 79  $ 60  to $ 63  $ to $ 13 
As a % of revenue (GAAP) 48.3% to 49.9% 44.9% to 43.9% 1.4% to 3.2%
As a % of revenue (Non-GAAP) 48.9% to 50.5% 40.8% to 40.1% 6.1% to 8.3%
Diluted net income per share:
GAAP $ 0.02  to $ 0.05 
Non-GAAP $ 0.08  to $ 0.12 
Shares used in per share calculation:
GAAP and Non-GAAP 109.5
(1) Components may not sum to total due to rounding.


2022 Financial Guidance (1)
Revenue Gross Profit Total Operating Expense Net Income
GAAP $ 607  to $ 627  $ 297  to $ 315  $ 264  to $ 273  $ 21  to $ 27 
Stock-based compensation expense 2 (23) 25
Restructuring and related charges 1 (2) 3
Non-cash interest and other expenses related to convertible notes 1
Gain on sale of equity investment (4)
Tax effect of non-GAAP adjustments to
Total adjustments 3 (25) 28  to 30 
Non-GAAP $ 607  to $ 627  $ 300  to $ 318  $ 239  to $ 248  $ 49  to $ 57 
As a % of revenue (GAAP) 48.9% to 50.3% 43.5% to 43.5% 3.5% to 4.3%
As a % of revenue (Non-GAAP) 49.4% to 50.7% 39.4% to 39.6% 8.1% to 9.1%
Diluted net income per share:
GAAP $ 0.19  to $ 0.25 
Non-GAAP $ 0.44  to $ 0.52 
Shares used in per share calculation:
GAAP and Non-GAAP 109.6
(1) Components may not sum to total due to rounding.

15


Harmonic Inc.
Adjusted EBITDA Reconciliation on Financial Guidance (Unaudited)(1)
(In millions)
Q3 2022 Financial Guidance 2022 Financial Guidance
Net income - GAAP $ to $ $ 21  to $ 27 
Provision for income taxes 10  14 
Interest expense, net
Depreciation 12  12 
EBITDA $ to $ 11  $ 48  to $ 58 
Adjustments
Stock-based compensation 25  25 
Restructuring and related charges
Gain on sale of equity investment —  —  (4) (4)
Adjusted EBITDA $ 15  to $ 19  $ 72  to $ 82 
(1) Components may not sum to total due to rounding.
16