Release Date: July 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Harmonic Inc (HLIT, Financial) reported second-quarter results at the high end of their guidance in both broadband and video segments.
- The number of global customers deploying COS solutions reached 118, up 20% year-over-year.
- Harmonic shipped a record number of DOCSIS 4.0 outdoor nodes and expects this trend to continue.
- The company reaffirmed its full-year 2024 revenue guidance in both broadband and video segments.
- Harmonic's video business is seeing improving margins and a growing pipeline of new Tier one SaaS and larger scale appliance opportunities.
Negative Points
- Total segment revenue for the video segment decreased from $58.9 million a year ago to $45.8 million.
- The company recorded a GAAP net loss of $12.5 million, including restructuring costs and lease-related asset impairments.
- Q2 bookings were $72.4 million, resulting in a book-to-bill ratio of 0.5, indicating a decrease in order lead times.
- Cash and cash equivalents decreased to $45.9 million, with negative cash from operations of $22.2 million.
- The company is still undergoing restructuring in its video business, with expected total restructuring related severance costs of $15.4 million for the fiscal year.
Q & A Highlights
Q: Can you explain the commercial model of your SaaS video business and its impact from events like the Olympics?
A: The SaaS video business model is based on minutes streamed, number of events, and impressions for targeted ad insertion. The Olympics, while significant, is not material enough to move the overall numbers significantly.
Q: How is the competitive environment for your broadband customers, especially with the rise of fixed wireless and fiber to the home?
A: The competition is intensifying, and our customers are investing in their networks to stay competitive. The urgency to enhance network capabilities is high, aligning with our offerings.
Q: How would you frame your competitive position in DOCSIS 4.0 hardware?
A: We have a significant lead in DOCSIS 4.0, especially with our unified approach supporting both full duplex and extended spectrum flavors. Our long-term work on these technologies positions us strongly.
Q: Can you provide more details on your recent fiber wins and the types of customers involved?
A: Recent wins include Paragould Utilities, a pure telco, and an international customer that is a converged cable, telco, and wireless operator. These wins demonstrate our expanding market reach.
Q: How do you view the ramp in expectations for the second half of the year, especially with your top two broadband customers?
A: The ramp is driven by significant contributions from our top two customers, along with growth from other customers. We have strong backlog and commitments, ensuring confidence in our second-half projections.
Q: What is the status of DOCSIS 3.1 Enhanced and its deployment?
A: DOCSIS 3.1 Enhanced is hardware-ready and enabled via a software release. The deployment is currently dependent on the availability of new modems, expected later this year.
Q: Can you clarify the lead times for your broadband products and any differences between DOCSIS 4.0 and 3.1 products?
A: Lead times for non-custom products are decreasing, while custom products still have longer lead times. We also receive orders with shorter lead times based on binding forecasts from larger customers.
Q: How has the composition of your backlog changed over the last few quarters?
A: The composition of our backlog has remained relatively stable, with around 52% of it shippable within the next 12 months. The rest includes longer-term commitments, primarily for COS licenses and SLAs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
