• Total Company Revenue: $222.2 million, up 33% year over year.
• EPS: $0.45, an increase of 246%.
• Cash Balance: $101.5 million, up $43.3 million sequentially.
• Broadband Revenue: $171 million, reaching record levels.
• Video Revenue: $51.1 million.
• Video SaaS Revenue: $15.1 million, up 15% year over year.
• Gross Margin: 56.1%, at the higher end of guidance.
• Broadband Gross Margin: 52.7%, up 440 basis points sequentially.
• Video Gross Margin: 67.4%, up 280 basis points year over year.
• Operating Expenses: $61.5 million, down 3% year over year.
• Bookings: $150 million with a book-to-bill ratio of 0.7.
• Backlog and Deferred Revenue: $496.3 million.
• Q1 2025 Broadband Revenue Guidance: $80 to $90 million.
• Q1 2025 Video Revenue Guidance: $40 to $45 million.
• Full Year 2025 Broadband Revenue Guidance: $400 to $450 million.
• Full Year 2025 Video Revenue Guidance: $185 to $195 million.
• Total Company EPS Guidance for 2025: $0.43 to $0.68.

• Warning! GuruFocus has detected 4 Warning Signs with HLIT.

Release Date: February 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Harmonic Inc (NASDAQ:HLIT) delivered record 4th quarter and full year 2024 results, with strong growth in the broadband segment.
• The company successfully returned its video segment to profitability, highlighting operational focus.
• Harmonic Inc (NASDAQ:HLIT) announced a new $200 million share repurchase program, indicating confidence in future performance.
• The company achieved a 47% year-over-year revenue growth in its cloud offerings, showcasing the strength of its cloud strategy.
• Harmonic Inc (NASDAQ:HLIT) added five new customers in the fourth quarter, expanding its customer base and market reach.

Negative Points

• The company anticipates a below-trend year for broadband revenue in 2025 due to the timing of the rollout and ecosystem dependencies.
• Harmonic Inc (NASDAQ:HLIT) expects a decline in total company and broadband revenue in 2025 due to recent market dynamics.
• There are industry-wide challenges in 2025 related to the transition to Unified Doxis 4.0, impacting revenue forecasts.
• The company took a $5 million inventory provision related to the transition to Doxis Unified 4.0.
• Harmonic Inc (NASDAQ:HLIT) reported reduced order forecasts from some broadband customers, reflecting market uncertainties.

Q & A Highlights

Q: How much of Harmonic's outlook is influenced by market trends versus market share shifts in the cable edge segment? A: Nimrod Ben-Natan, CEO, stated that the outlook is primarily driven by market trends rather than market share shifts. Harmonic maintains a strong market share in virtual CMTS and remote devices, and they expect to increase market share with the adoption of Unified Doxis 4.0.

Q: Are there differences in behavior between Harmonic's two lead customers, and how does this affect the company's outlook? A: Nimrod Ben-Natan explained that both customers have different dynamics and spending patterns, which impact Harmonic's outlook. While one customer has increased overall CapEx, the other is focused on expanding into Doxis 4.0. Harmonic also considers the rest of the world's dynamics in their growth expectations.

Q: What are the challenges related to ecosystem readiness for full duplex amplifiers in the cable industry? A: Nimrod Ben-Natan highlighted that full duplex amplifiers require significant integration and ecosystem readiness, which takes time. Harmonic is working with partners like Circom to accelerate the operationalization of these amplifiers.

Q: How does Harmonic reconcile the record broadband revenue with the lower number of new cable modems served? A: Walter Jankovic, CFO, clarified that the revenue reflects hardware shipments and licenses picked up by customers, which precede the activation of cable modems.

Q: What factors are contributing to the increase in gross margin forecast for 2025, particularly in broadband? A: Walter Jankovic explained that the increase in gross margin is due to a higher mix of COS platform licenses compared to nodes, with a lower mix of nodes contributing to the revenue decline.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.