Press Release

Harmonic Announces First Quarter 2023 Results

May 8, 2023

Broadband revenue up 23% and Video SaaS revenue up 72% year over year

SAN JOSE, Calif., May 8, 2023 /PRNewswire/ -- Harmonic Inc. (NASDAQ: HLIT) today announced its unaudited results for the first quarter of 2023.

"Harmonic delivered strong results for the first quarter of 2023 highlighted by record first quarter revenue and solid operating profit," said Patrick Harshman, president and chief executive officer of Harmonic. "Broadband segment revenue rose 23% during the quarter while Video SaaS revenue growth was 72%, driven by strong demand for our products and services."  

Q1 Financial and Business Highlights

Financial

  • Revenue: $157.6 million, up 7% year over year
    • Broadband segment revenue: $100.4 million, up 23% year over year
    • Video segment revenue: $57.3 million, down 13% year over year
  • Gross margin: GAAP 53.3% and non-GAAP 53.9%, compared to GAAP 46.9% and non-GAAP 47.3% in the year ago period
    • Broadband segment gross margin: 50.1% compared to 38.0% in the year ago period
    • Video segment gross margin: 60.4% compared to 58.8% in the year ago period
  • Operating income: GAAP income $11.2 million and non-GAAP income $18.7 million, compared to GAAP income $2.5 million and non-GAAP income $11.3 million in the year ago period
  • Net income: GAAP net income $5.1 million and non-GAAP net income of $14.3 million, compared to GAAP net loss $1.5 million and non-GAAP net income $8.9 million in the year ago period
  • Adjusted EBITDA: $21.4 million income compared to $14.5 million income in the year ago period
  • EPS: GAAP net income per share of $0.04 and non-GAAP net income per share of $0.12, compared to GAAP net loss per share of $0.01 and non-GAAP net income per share of $0.08 in the year ago period
  • Cash: $90.9 million, down $9.9 million year over year

Business

  • CableOS® solution commercially deployed with 94 customers, serving 18.4 million cable modems
  • Live sports streaming SaaS expansions and new wins drove 72.2% Video SaaS revenue growth year over year
  • Record new SaaS commitments, including first major broadcast cloud migration

Select Financial Information



GAAP


Non-GAAP

Key Financial Results


Q1 2023


Q4 2022


Q1 2022


Q1 2023


Q4 2022


Q1 2022



(Unaudited, in millions, except per share data)

Net revenue


$         157.6


$         164.3


$         147.4


$         157.6


$         164.3


$         147.4

Net income


$             5.1


$             6.1


$           (1.5)


$           14.3


$           19.9


$             8.9

EPS


$           0.04


$           0.05


$         (0.01)


$           0.12


$           0.17


$           0.08










Other Financial Information

Q1 2023


Q4 2022


Q1 2022


(Unaudited, in millions)

Adjusted EBITDA for the quarter

$           21.4


$           26.6


$           14.5

Bookings for the quarter

$         325.5


$         130.2


$         205.5

Backlog and deferred revenue as of quarter end

$         623.5


$         457.1


$         497.3

Cash and cash equivalents as of quarter end

$           90.9


$           89.6


$         100.7

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 


 Q2 2023 GAAP Financial Guidance (1)


Low


High

(Unaudited, in millions, except percentages and per share data)

Video


Broadband


Adjustments (2)


Total

GAAP


Video


Broadband


Adjustments (2)


Total

GAAP

Net revenue

$        60


$      101


$          —


$      161


$        65


$      106


$         —


$      171

Gross margin %

60.0 %


47.0 %


(0.1) %


51.7 %


61.0 %


48.0 %


(0.1) %


52.8 %

Gross profit

$        36


$        47


$          —


$        83


$        40


$        51


$         —


$        91

Operating expenses

$        35


$        31


$           7


$        73


$        36


$        32


$          7


$        75

Operating income

$          1


$        16


$          (7)


$        10


$          4


$        19


$         (7)


$        16

Tax rate (3)







53 %








53 %

EPS (3)







$     0.04








$     0.06

Shares (3)







117.8








117.8

Cash (3)







$        90








$      100



(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.

 


 2023 GAAP Financial Guidance (1)


Low


High

(Unaudited, in millions, except percentages and per share data)

Video


Broadband


Adjustments (2)


Total GAAP


Video


Broadband


Adjustments (2)


Total GAAP

Net revenue

$      255


$      450


$          —


$      705


$      270


$      470


$          —


$      740

Gross margin %

59.5 %


46.0 %


(0.3) %


50.6 %


60.5 %


47.0 %


(0.3) %


51.6 %

Gross profit

$      152


$      207


$          (2)


$      357


$      163


$      221


$          (2)


$      382

Operating expenses

$      139


$      123


$         27


$      289


$      143


$      128


$         27


$      298

Operating income

$        13


$        84


$        (29)


$        68


$        20


$        93


$        (29)


$        84

Tax rate (3)







53 %








53 %

EPS (3)







$     0.26








$     0.33

Shares (3)







118.1








118.1

Cash (3)







$      125








$      135



(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.

 


Q2 2023 Non-GAAP Financial Guidance (1)


Low


High

(Unaudited, in millions, except percentages and per share data)

Video


Broadband


Total


Video


Broadband


Total

Net revenue

$               60


$             101


$             161


$               65


$             106


$             171

Gross margin %

60.0 %


47.0 %


51.8 %


61.0 %


48.0 %


52.9 %

Gross profit

$               36


$               47


$               83


$               40


$               51


$               91

Operating expenses

$               35


$               31


$               66


$               36


$               32


$               68

Adjusted EBITDA

$                 2


$               18


$               20


$                 5


$               20


$               25

Tax rate (2)





20 %






20 %

EPS (2)





$            0.11






$            0.15

Shares (2)





117.8






117.8

Cash (2)





$               90






$             100



(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.

 


 2023 Non-GAAP Financial Guidance (1)


Low


High

(Unaudited, in millions, except percentages and per share data)

Video


Broadband


Total


Video


Broadband


Total

Net revenue

$             255


$             450


$             705


$             270


$             470


$             740

Gross margin %

59.5 %


46.0 %


50.9 %


60.5 %


47.0 %


51.9 %

Gross profit

$             152


$             207


$             359


$             163


$             221


$             384

Operating expenses

$             139


$             123


$             262


$             143


$             128


$             271

Adjusted EBITDA

$               18


$               90


$             108


$               26


$               99


$             125

Tax rate (2)





20 %






20 %

EPS (2)





$            0.63






$            0.74

Shares (2)





118.1






118.1

Cash (2)





$             125






$             135



(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.

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, May 8, 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/BI27af922f502842a78acef34a5ae0c048. 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. 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 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.

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. 

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.

 

Harmonic Inc.

Preliminary Condensed Consolidated Balance Sheets

(Unaudited, in thousands, except per share data)



March 31, 2023


December 31, 2022

ASSETS




Current assets:




   Cash and cash equivalents

$                      90,877


$                      89,586

   Accounts receivable, net

88,135


108,427

   Inventories

131,642


120,949

   Prepaid expenses and other current assets

27,451


26,337

Total current assets

338,105


345,299

Property and equipment, net

38,936


39,814

Operating lease right-of-use assets

24,347


25,469

Goodwill

238,433


237,739

Other non-current assets

63,994


61,697

Total assets

$                    703,815


$                    710,018





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Convertible debt, current

$                    114,204


$                    113,981

Other debts, current

4,684


4,756

Accounts payable

55,404


67,455

Deferred revenue

65,606


62,383

Operating lease liabilities, current

6,731


6,773

Other current liabilities

59,269


66,724

Total current liabilities

305,898


322,072

Other debts, non-current

11,350


11,161

Operating lease liabilities, non-current

22,872


24,110

Other non-current liabilities

27,909


28,169

Total liabilities

368,029


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; 111,332 and 109,871 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

111


110

Additional paid-in capital

2,384,806


2,380,651

Accumulated deficit

(2,041,476)


(2,046,569)

Accumulated other comprehensive loss

(7,655)


(9,686)

Total stockholders' equity

335,786


324,506

Total liabilities and stockholders' equity

$                    703,815


$                    710,018

 

Harmonic Inc.

Preliminary Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)



Three Months Ended


March 31, 2023


April 1, 2022

Revenue:




Appliance and integration

$                    114,794


$                    112,984

SaaS and service

42,855


34,455

Total net revenue

157,649


147,439

Cost of revenue:




Appliance and integration

59,748


66,382

SaaS and service

13,847


11,875

Total cost of revenue

73,595


78,257

Total gross profit

84,054


69,182

Operating expenses:




Research and development

33,509


28,833

Selling, general and administrative

39,282


36,643

Restructuring and related charges

83


1,170

Total operating expenses

72,874


66,646

Income from operations

11,180


2,536

Interest expense, net

(706)


(1,433)

Other income (expense), net

(293)


62

Income before income taxes

10,181


1,165

Provision for income taxes

5,088


2,694

Net income (loss)

$                        5,093


$                      (1,529)





Net income (loss) per share:




Basic

$                          0.05


$                        (0.01)

Diluted

$                          0.04


$                        (0.01)

Weighted average shares outstanding:




Basic

110,794


103,994

Diluted

117,758


103,994

 

Harmonic Inc.

Preliminary Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)



Three Months Ended


March 31, 2023


April 1, 2022

Cash flows from operating activities:




Net income (loss)

$                        5,093


$                      (1,529)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:




Depreciation

3,030


3,111

Stock-based compensation

7,424


7,586

Amortization of convertible debt discount

223


297

Amortization of warrant

435


429

Foreign currency remeasurement

1,290


(563)

Deferred income taxes, net

547


627

Provision for expected credit losses and returns

253


1,348

Provision for excess and obsolete inventories

2,027


2,738

Other adjustments

45


77

Changes in operating assets and liabilities:




Accounts receivable

20,277


(28,479)

Inventories

(10,547)


(11,841)

Other assets

(2,566)


(3,949)

Accounts payable

(12,507)


(12,260)

Deferred revenues

1,721


18,408

Other liabilities

(10,475)


(3,482)

Net cash provided by (used in) operating activities

6,270


(27,482)

Cash flows from investing activities:




Purchases of property and equipment

(2,331)


(2,438)

Net cash used in investing activities

(2,331)


(2,438)

Cash flows from financing activities:




Repurchase of common stock


(2,141)

Repayment of other debts

(152)


(99)

Proceeds from common stock issued to employees

3,085


2,966

Taxes paid related to net share settlement of equity awards

(6,353)


(2,693)

Net cash used in financing activities

(3,420)


(1,967)

Effect of exchange rate changes on cash and cash equivalents

772


(805)

Net increase (decrease) in cash and cash equivalents

1,291


(32,692)

Cash and cash equivalents at beginning of period

89,586


133,431

Cash and cash equivalents at end of period

$                      90,877


$                    100,739

 

Harmonic Inc.

Preliminary GAAP Revenue Information

(Unaudited, in thousands, except percentages)



Three Months Ended


March 31, 2023


December 31, 2022


April 1, 2022

Geography









Americas

$         115,666

73 %


$         125,638

76 %


$         103,157

70 %

EMEA

32,941

21 %


29,250

18 %


35,702

24 %

APAC

9,042

6 %


9,446

6 %


8,580

6 %

Total

$         157,649

100 %


$         164,334

100 %


$         147,439

100 %










Market









Service Provider

$         117,989

75 %


$         110,092

67 %


$           92,521

63 %

Broadcast and Media

39,660

25 %


54,242

33 %


54,918

37 %

Total

$         157,649

100 %


$         164,334

100 %


$         147,439

100 %

 

Harmonic Inc.

Preliminary Segment Information

(Unaudited, in thousands, except percentages)



Three Months Ended March 31, 2023


Video


Broadband


Total Segment
Measures

(non-GAAP)


Adjustments (1)


Consolidated
GAAP
Measures

Net revenue

$        57,298


$      100,351


$      157,649


$                  —


$      157,649

Gross profit

34,614


50,290


84,904


(850)


84,054

Gross margin %

60.4 %


50.1 %


53.9 %




53.3 %

Adjusted EBITDA(2)

(162)


21,586


21,424


(16,331)


5,093

Adjusted EBITDA margin %

(0.3) %


21.5 %


13.6 %




3.2 %












Three Months Ended December 31, 2022


Video


Broadband


Total Segment
Measures

(non-GAAP)


Adjustments (1)


Consolidated
GAAP
Measures

Net revenue

$        68,308


$        96,026


$      164,334


$                  —


$      164,334

Gross profit

40,939


45,741


86,680


(983)


85,697

Gross margin %

59.9 %


47.6 %


52.7 %




52.1 %

Adjusted EBITDA(2)

6,350


20,205


26,555


(20,424)


6,131

Adjusted EBITDA margin %

9.3 %


21.0 %


16.2 %




3.7 %












Three Months Ended April 1, 2022


Video


Broadband


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) %



(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.

 

Harmonic Inc.

GAAP to Non-GAAP Reconciliations (Unaudited)

(in thousands, except percentages and per share data)



Three Months Ended March 31, 2023


Revenue


Gross Profit


Total
Operating
Expense


Income from
Operations


Total Non-
operating
Expense, net


Net Income

GAAP

$      157,649


$     84,054


$     72,874


$     11,180


$          (999)


$       5,093

Stock-based compensation


850


(6,574)


7,424



7,424

Restructuring and related charges



(83)


83



83

Non-cash interest and other expenses related to convertible notes





223


223

Discrete tax items and tax effect of non-GAAP adjustments






1,506

Total adjustments


850


(6,657)


7,507


223


9,236

Non-GAAP

$      157,649


$     84,904


$     66,217


$     18,687


$          (776)


$     14,329

As a % of revenue (GAAP)



53.3 %


46.2 %


7.1 %


(0.6) %


3.2 %

As a % of revenue (Non-GAAP)



53.9 %


42.0 %


11.9 %


(0.5) %


9.1 %

Diluted net income per share:












GAAP











$        0.04

Non-GAAP











$        0.12

Shares used in per share calculation:












GAAP and Non-GAAP











117,758

 


Three Months Ended December 31, 2022


Revenue


Gross Profit


Total
Operating
Expense


Income from
Operations


Total Non-
operating
Expense, net


Net Income

GAAP

$      164,334


$     85,697


$     69,220


$     16,477


$        (1,141)


$       6,131

Stock-based compensation


541


(5,050)


5,591



5,591

Restructuring and related charges


442


(1,205)


1,647


17


1,664

Non-cash interest and other expenses related to convertible notes





274


274

Discrete tax items and tax effect of non-GAAP adjustments






6,233

Total adjustments


983


(6,255)


7,238


291


13,762

Non-GAAP

$      164,334


$     86,680


$     62,965


$     23,715


$          (850)


$     19,893

As a % of revenue (GAAP)



52.1 %


42.1 %


10.0 %


(0.7) %


3.7 %

    As a % of revenue (Non-GAAP)



52.7 %


38.3 %


14.4 %


(0.5) %


12.1 %

Diluted net income per share:












GAAP











$        0.05

Non-GAAP











$        0.17

Shares used in per share calculation:












GAAP and Non-GAAP











117,301

 


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

 

Harmonic Inc.

Preliminary Adjusted EBITDA Reconciliation (Unaudited)

(In thousands)



Three Months Ended


March 31, 2023


December 31, 2022


April 1, 2022

Net income (loss) - GAAP

$                     5,093


$                     6,131


$                   (1,529)

Provision for income taxes

5,088


9,205


2,694

Interest expense, net

706


929


1,433

Depreciation

3,030


3,035


3,111

EBITDA

13,917


19,300


5,709







Adjustments






Stock-based compensation

7,424


5,591


7,586

Restructuring and related charges

83


1,664


1,156

Adjusted EBITDA

$                   21,424


$                   26,555


$                   14,451

 

Harmonic Inc.

GAAP to Non-GAAP Reconciliations on Financial Guidance (Unaudited)

(In millions, except percentages and per share data)



Q2 2023 Financial Guidance (1)


Revenue


Gross Profit


Total Operating
Expense


Net Income

GAAP

$   161

to

$   171


$     83

to

$     91


$     73

to

$     75


$       4

to

$       7

Stock-based compensation expense



(7)


7

Tax effect of non-GAAP adjustments




2

to

3

Total adjustments



(7)


9

to

10

Non-GAAP

$   161

to

$   171


$     83

to

$     91


$     66

to

$     68


$     13

to

$     17

As a % of revenue (GAAP)





51.7 %

to

52.8 %


45.3 %

to

43.9 %


2.7 %

to

3.9 %

As a % of revenue (Non-GAAP)





51.8 %

to

52.9 %


41.0 %

to

39.8 %


8.3 %

to

10.2 %

Diluted net income per share:
















GAAP













$  0.04

to

$  0.06

Non-GAAP













$  0.11

to

$  0.15

Shares used in per share calculation:
















GAAP and Non-GAAP













117.8


(1) Components may not sum to total due to rounding.

 


2023 Financial Guidance (1)


Revenue


Gross Profit


Total Operating
Expense


Net Income

GAAP

$   705

to

$   740


$   357

to

$   382


$   289

to

$   298


$     31

to

$     39

Stock-based compensation expense


2


(26)


28

Restructuring and related charges



(1)


1

Non-cash interest and other expenses related to convertible notes




1

Gain on sale of equity investment




(3)

Tax effect of non-GAAP adjustments




17

to

22

Total adjustments


2


(27)


44

to

49

Non-GAAP

$   705

to

$   740


$   359

to

$   384


$   262

to

$   271


$     75

to

$     88

As a % of revenue (GAAP)





50.6 %

to

51.6 %


41.0 %

to

40.3 %


4.4 %

to

5.3 %

As a % of revenue (Non-GAAP)





50.9 %

to

51.9 %


37.2 %

to

36.6 %


10.6 %

to

11.9 %

Diluted net income per share:
















GAAP













$  0.26

to

$  0.33

Non-GAAP













$  0.63

to

$  0.74

Shares used in per share calculation:
















GAAP and Non-GAAP













118.1


(1) Components may not sum to total due to rounding.

 

Harmonic Inc.

Adjusted EBITDA Reconciliation on Financial Guidance (Unaudited)(1)

(In millions)



Q2 2023 Financial
Guidance


2023 Financial
Guidance

Net income - GAAP

$         4

to

$         7


$       31

to

$       39

Provision for income taxes

5


7


36


45

Interest expense, net

1


1


3


3

Depreciation

3


3


12


12

EBITDA

$       13

to

$       18


$       82

to

$       99









Adjustments








Stock-based compensation

7


7


28


28

Restructuring and related charges



1


1

Gain on sale of equity investment



(3)


(3)

Adjusted EBITDA

$       20

to

$       25


$      108

to

$      125


(1) Components may not sum to total due to rounding.

 

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SOURCE Harmonic Inc.

Jeremy Rosenberg, Interim Chief Financial Officer, Harmonic Inc., +1.408.490.6632, David Hanover, Investor Relations, Harmonic Inc., 1.212.896.1220