hlit-20220502
false000085131000008513102022-05-022022-05-02

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): May 2, 2022
  
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 May 2, 2022, Harmonic Inc. ("Harmonic" or the “Company”) issued a press release regarding its preliminary unaudited financial results for the quarter ended April 1, 2022. In the press release, Harmonic also announced that it would be holding a conference call on May 2, 2022 to discuss its financial results for the quarter ended April 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
  
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: May 2, 2022  HARMONIC INC.
By:/s/ Sanjay Kalra
   Sanjay Kalra
   Chief Financial Officer



Document

Exhibit 99.1
https://cdn.kscope.io/8def0450c6c5dfaea946b3ac4dfc9e7f-logopra07.jpg
https://cdn.kscope.io/8def0450c6c5dfaea946b3ac4dfc9e7f-pressreleasea29.jpg
FOR IMMEDIATE RELEASE
Harmonic Announces First Quarter 2022 Results
Revenue up 32% year over year
Cable Access revenue up 98% year over year
Record backlog and deferred revenue, up 81% year over year

SAN JOSE, California, May 2, 2022 - Harmonic Inc. (NASDAQ: HLIT) today announced its unaudited results for the first quarter of 2022.
“Harmonic delivered another strong quarter, with revenue up 32% year over year and solid operating profit, driven by Cable Access segment revenue growth of 98% and Video segment gross margin expansion,” said Patrick Harshman, president and chief executive officer of Harmonic. “Robust bookings resulted in a record backlog and deferred revenue at quarter end, demonstrating continuing competitive market momentum and growth visibility.”
Q1 Financial and Business Highlights
Financial
Revenue: $147.4 million, up 32% year over year
Cable Access segment revenue: $81.6 million, up 98% year over year
Video segment revenue: $65.8 million, down 6% year over year
Gross margin: GAAP 46.9% and non-GAAP 47.3%, compared to GAAP 49.4% and non-GAAP 50.4% in the year ago period
Cable Access segment gross margin: 38.0% compared to 42.2% in the year ago period
Video segment gross margin: 58.8% compared to 55.1% in the year ago period
Operating income: GAAP income $2.5 million and non-GAAP income $11.3 million, compared to GAAP loss $3.8 million and non-GAAP income $5.1 million in the year ago period
Net income: GAAP net loss $1.5 million and non-GAAP net income of $8.9 million, compared to GAAP net loss $6.1 million and non-GAAP net income $4.5 million in the year ago period
Adjusted EBITDA: $14.5 million income compared to $9.1 million income in the year ago period
EPS: GAAP net loss per share of $0.01 and non-GAAP net income per share of $0.08, compared to GAAP net loss per share of $0.06 and non-GAAP net income per share of $0.04 in the year ago period
Cash: $100.7 million, relatively flat year over year
Business
CableOS® solution commercially deployed with 77 customers, up 45% year over year
CableOS deployments scaled to 6.1 million served cable modems, up 100% year over year
Video SaaS revenue increased 75.3% year over year

1


Select Financial Information
GAAPNon-GAAP
Key Financial ResultsQ1 2022Q4 2021Q1 2021Q1 2022Q4 2021Q1 2021
(Unaudited, in millions, except per share data)
Net revenue$147.4 $155.8 $111.6 $147.4 $155.8 $111.6 
Net income (loss)$(1.5)$19.9 $(6.1)$8.9 $17.6 $4.5 
EPS$(0.01)$0.18 $(0.06)$0.08 $0.16 $0.04 
Other Financial InformationQ1 2022Q4 2021Q1 2021
(Unaudited, in millions)
Adjusted EBITDA for the quarter$14.5 $23.8 $9.1 
Bookings for the quarter$205.5 $267.3 $96.3 
Backlog and deferred revenue as of quarter end$497.3 $441.0 $274.3 
Cash and cash equivalents as of quarter end$100.7 $133.4 $100.8 
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 2022 GAAP Financial Guidance (1)
LowHigh
(Unaudited, in millions, except percentages)VideoCable Access
Adjustments (2)
Total
GAAP
VideoCable Access
Adjustments (2)
Total
GAAP
Net revenue$70.0 $74.0 $— $144.0 $74.0 $80.0 $— $154.0 
Gross margin %57.0 %42.0 %(0.4)%48.9 %59.0 %44.0 %(0.4)%50.8 %
Gross profit$39.9 $31.1 $(0.6)$70.4 $43.7 $35.2 $(0.6)$78.3 
Operating expenses$37.0 $24.0 $5.1 $66.1 $38.0 $26.0 $5.1 $69.1 
Operating income (loss)$2.9 $7.1 $(5.7)$4.3 $5.7 $9.2 $(5.7)$9.2 
Tax expense (3)
$(2.4)$(2.4)
EPS (3)
$— $0.05 
Shares (3)
110.8 110.8 
Cash (3)
$100.0 $110.0 
(1) Components may not sum to total due to rounding.
(2) See “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.
 2022 GAAP Financial Guidance (1)
LowHigh
(Unaudited, in millions, except percentages)VideoCable Access
Adjustments (2)
Total GAAPVideoCable Access
Adjustments (2)
Total GAAP
Net revenue$275.0 $310.0 $— $585.0 $287.0 $338.0 $— $625.0 
Gross margin %57.0 %42.0 %(0.6)%48.5 %58.3 %43.4 %(0.5)%49.7 %
Gross profit$156.8 $130.2 $(3.1)$283.9 $167.3 $146.7 $(3.1)$310.9 
Operating expenses$145.0 $93.0 $24.3 $262.3 $150.0 $101.0 $24.3 $275.3 
Operating income (loss)$11.8 $37.2 $(27.4)$21.6 $17.3 $45.7 $(27.4)$35.6 
Tax expense (3)
$(9.8)$(9.8)
EPS (3)
$(0.20)$(0.07)
Shares (3)
104.8 104.8 
Cash (3)
$100.0 $110.0 
(1) Components may not sum to total due to rounding.
(2) See “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



Q2 2022 Non-GAAP Financial Guidance (1)
LowHigh
(Unaudited, in millions, except percentages)VideoCable AccessTotal VideoCable AccessTotal
Net revenue$70.0 $74.0 $144.0 $74.0 $80.0 $154.0 
Gross margin %57.0 %42.0 %49.3 %59.0 %44.0 %51.2 %
Gross profit$39.9 $31.1 $71.0 $43.7 $35.2 $78.9 
Operating expenses$37.0 $24.0 $61.0 $38.0 $26.0 $64.0 
Adjusted EBITDA$4.3 $8.4 $12.7 $7.1 $10.5 $17.6 
Tax rate (2)
13.0 %13.0 %
EPS (2)
$0.07 $0.11 
Shares (2)
110.8110.8
Cash (2)
$100.0 $110.0 
(1) See “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)
LowHigh
(Unaudited, in millions, except percentages)VideoCable AccessTotal VideoCable AccessTotal
Net revenue$275.0 $310.0 $585.0 $287.0 $338.0 $625.0 
Gross margin %57.0 %42.0 %49.1 %58.3 %43.4 %50.2 %
Gross profit$156.8 $130.2 $287.0 $167.3 $146.7 $314.0 
Operating expenses$145.0 $93.0 $238.0 $150.0 $101.0 $251.0 
Adjusted EBITDA$17.5 $42.9 $60.4 $23.0 $51.4 $74.4 
Tax rate (2)
13.0 %13.0 %
EPS (2)
$0.34 $0.45 
Shares (2)
110.8110.8
Cash (2)
$100.0 $110.0 

(1) See “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. Pacific (5:00 p.m. Eastern) on Monday, May 2, 2022. The live webcast will be available on the Harmonic Investor Relations website at http://investor.harmonicinc.com. An audio version of the webcast will be available by calling +1.574.990.1032 or +1.800.240.9147 (conference ID 2079336). A replay will be available after 5:00 p.m. PT on the same web site or by calling +1.404.537.3406 or +1.855.859.2056 (conference ID 2079336).
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.
3


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.
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.
4


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.
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 KalraDavid Hanover
Chief Financial OfficerInvestor 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)
 April 1, 2022December 31, 2021
ASSETS
Current assets:
   Cash and cash equivalents$100,739 $133,431 
   Accounts receivable, net115,594 88,529 
   Inventories81,816 71,195 
   Prepaid expenses and other current assets27,251 29,972 
Total current assets325,400 323,127 
Property and equipment, net42,577 42,721 
Operating lease right-of-use assets29,556 30,968 
Other non-current assets63,281 56,657 
Goodwill239,631 240,213 
Total assets$700,445 $693,686 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Convertible debt, current$37,518 $36,824 
Other debts, current4,906 4,992 
Accounts payable52,524 64,429 
Deferred revenue75,474 57,226 
Operating lease liabilities, current7,362 7,346 
Other current liabilities53,072 53,644 
Total current liabilities230,856 224,461 
Convertible debt, non-current113,324 98,941 
Other debts, non-current12,740 12,989 
Operating lease liabilities, non-current27,689 29,120 
Other non-current liabilities31,183 31,379 
Total liabilities$415,792 $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; 104,603 and 102,959 shares issued and outstanding at April 1, 2022 and December 31, 2021, respectively
105 103 
Additional paid-in capital2,362,873 2,387,039 
Accumulated deficit(2,073,288)(2,087,957)
Accumulated other comprehensive loss(5,037)(3,272)
Total stockholders’ equity284,653 295,913 
Total liabilities and stockholders’ equity$700,445 $693,686 

6


Harmonic Inc.
Preliminary Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
 Three Months Ended
 April 1, 2022April 2, 2021
Revenue:
Appliance and integration$112,984 $79,976 
SaaS and service34,455 31,600 
Total net revenue147,439 111,576 
Cost of revenue:
Appliance and integration66,382 42,619 
SaaS and service11,875 13,812 
Total cost of revenue78,257 56,431 
Total gross profit69,182 55,145 
Operating expenses:
Research and development28,833 23,528 
Selling, general and administrative36,643 34,911 
Amortization of intangibles— 507 
Restructuring and related charges1,170 43 
Total operating expenses66,646 58,989 
Income (loss) from operations2,536 (3,844)
Interest expense, net(1,433)(2,603)
Other income (expense), net62 1,019 
Income (loss) before income taxes1,165 (5,428)
Provision for income taxes2,694 696 
Net loss$(1,529)$(6,124)
Net loss per share:
Basic and diluted$(0.01)$(0.06)
Shares used in per share calculations:
Basic and diluted103,994 99,868 

7


Harmonic Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
 Three Months Ended
 April 1, 2022April 2, 2021
Cash flows from operating activities:
Net loss$(1,529)$(6,124)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation3,111 3,057 
Amortization of intangibles— 507 
Stock-based compensation7,586 8,398 
Amortization of convertible debt discount297 1,532 
Amortization of warrant429 429 
Foreign currency remeasurement(563)(2,609)
Deferred income taxes627 432 
Provision for expected credit losses and returns1,348 1,089 
Provision for excess and obsolete inventories2,738 644 
Other adjustments77 143 
Changes in operating assets and liabilities:
Accounts receivable(28,479)(20,758)
Inventories(11,841)(1,119)
Other assets(3,949)(1,019)
Accounts payable(12,260)13,527 
Deferred revenues18,408 11,285 
Other liabilities(3,482)(7,736)
Net cash provided by (used in) operating activities(27,482)1,678 
Cash flows from investing activities:
Purchases of property and equipment(2,438)(3,645)
Net cash used in investing activities(2,438)(3,645)
Cash flows from financing activities:
Payments for repurchase of common stock(2,141)— 
Repayment of other debts(99)(108)
Proceeds from common stock issued to employees2,966 5,685 
Payment of tax withholding obligations related to net share settlements of restricted stock units(2,693)(913)
Net cash provided by (used in) financing activities(1,967)4,664 
Effect of exchange rate changes on cash and cash equivalents (805)(565)
Net increase (decrease) in cash and cash equivalents (32,692)2,132 
Cash and cash equivalents at beginning of period133,431 98,645 
Cash and cash equivalents at end of period$100,739 $100,777 

8


Harmonic Inc.
Preliminary GAAP Revenue Information
(Unaudited, in thousands, except percentages)
Three Months Ended
April 1, 2022December 31, 2021April 2, 2021
Geography
Americas$103,157 70 %$102,929 66 %$75,062 67 %
EMEA35,702 24 %40,096 26 %27,607 25 %
APAC8,580 %12,779 %8,907 %
Total$147,439 100 %$155,804 100 %$111,576 100 %
Market
Service Provider$92,521 63 %$87,263 56 %$53,660 48 %
Broadcast and Media54,918 37 %68,541 44 %57,916 52 %
Total$147,439 100 %$155,804 100 %$111,576 100 %
9


Harmonic Inc.
Preliminary Segment Information
(Unaudited, in thousands, except percentages)
Three Months Ended April 1, 2022
VideoCable AccessTotal Segment Measures
(non-GAAP)
Adjustments (1)
Consolidated GAAP Measures
Net revenue$65,842 $81,597 $147,439 $— $147,439 
Gross profit38,684 31,011 69,695 (513)69,182 
Gross margin %58.8 %38.0 %47.3 %46.9 %
Operating income3,139 8,139 11,278 (8,742)2,536 
Operating margin %4.8 %10.0 %7.6 %1.7 %
Three Months Ended December 31, 2021
VideoCable AccessTotal Segment Measures
(non-GAAP)
Adjustments (1)
Consolidated GAAP Measures
Net revenue$86,092 $69,712 $155,804 $— $155,804 
Gross profit50,589 28,080 78,669 (731)77,938 
Gross margin %58.8 %40.3 %50.5 %50.0 %
Operating income15,225 5,408 20,633 (5,487)15,146 
Operating margin %17.7 %7.8 %13.2 %9.7 %
Three Months Ended April 2, 2021
VideoCable AccessTotal Segment Measures
(non-GAAP)
Adjustments (1)
Consolidated GAAP Measures
Net revenue$70,331 $41,245 $111,576 $— $111,576 
Gross profit38,774 17,408 56,182 (1,037)55,145 
Gross margin %55.1 %42.2 %50.4 %49.4 %
Operating income (loss)3,772 1,296 5,068 (8,912)(3,844)
Operating margin %5.4 %3.1 %4.5 %(3.4)%
(1) See “Use of Non-GAAP Financial Measures” above and “GAAP to Non-GAAP Reconciliations” below.


10


Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(in thousands, except percentages and per share data)
Three Months Ended April 1, 2022
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsTotal Non-operating expense, netNet 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:
GAAP103,994 
Non-GAAP110,563 
Three Months Ended December 31, 2021
RevenueGross ProfitTotal Operating ExpenseIncome from OperationsTotal Non-operating expense, netNet Income
GAAP$155,804 $77,938 $62,792 $15,146 $(2,678)$19,857 
Stock-based compensation— 506 (4,689)5,195 — 5,195 
Restructuring and related charges— 225 (67)292 — 292 
Non-cash interest and other expenses related to convertible notes— — — — 1,621 1,621 
Discrete tax items and tax effect of non-GAAP adjustments— — — — — (9,347)
Total adjustments— 731 (4,756)5,487 1,621 (2,239)
Non-GAAP $155,804 $78,669 $58,036 $20,633 $(1,057)$17,618 
As a % of revenue (GAAP)50.0 %40.3 %9.7 %(1.7)%12.7 %
As a % of revenue (Non-GAAP)50.5 %37.2 %13.2 %(0.7)%11.3 %
Diluted net income per share:
GAAP$0.18 
Non-GAAP$0.16 
Shares used in per share calculation:
GAAP and Non-GAAP110,474 
11


Three Months Ended April 2, 2021
RevenueGross ProfitTotal Operating ExpenseIncome (Loss) from OperationsTotal Non-operating expense, netNet Income (Loss)
GAAP$111,576 $55,145 $58,989 $(3,844)$(1,584)$(6,124)
Stock-based compensation— 1,073 (7,325)8,398 — 8,398 
Amortization of intangibles— — (507)507 — 507 
Restructuring and related charges— (36)(43)— 
Non-cash interest and other expenses related to convertible notes— — — — 1,532 1,532 
Discrete tax items and tax effect of non-GAAP adjustments— — — — — 194 
Total adjustments— 1,037 (7,875)8,912 1,532 10,638 
Non-GAAP $111,576 $56,182 $51,114 $5,068 $(52)$4,514 
As a % of revenue (GAAP)49.4 %52.9 %(3.4)%(1.4)%(5.5)%
As a % of revenue (Non-GAAP)50.4 %45.8 %4.5 %— %4.0 %
Diluted net income (loss) per share:
GAAP$(0.06)
Non-GAAP$0.04 
Shares used in per share calculation:
GAAP 99,868 
Non-GAAP103,190 
12


Harmonic Inc.
Preliminary Adjusted EBITDA Reconciliation (Unaudited)
(In thousands)
Three Months Ended
April 1, 2022December 31, 2021April 2, 2021
Net income (loss) - GAAP$(1,529)$19,857 $(6,124)
Provision for income taxes2,694 (7,389)696 
Interest expense, net1,433 2,706 2,603 
Depreciation3,111 3,151 3,057 
Amortization of intangibles— — 507 
EBITDA5,709 18,325 739 
Adjustments
Stock-based compensation7,586 5,195 8,398 
Restructuring and related charges1,156 292 
Adjusted EBITDA$14,451 $23,812 $9,144 
13


Harmonic Inc.
GAAP to Non-GAAP Reconciliations on Financial Guidance (Unaudited)
(In millions, except percentages and per share data)
Q2 2022 Financial Guidance (1)
RevenueGross ProfitIncome from OperationsNet Income
GAAP$144.0to$154.0$70.4to$78.3$4.3to$9.2$0.3to$5.2
Stock-based compensation expense0.45.25.2
Restructuring and related charges0.20.50.5
Non-cash interest and other expenses related to convertible notes0.3
Tax effect of non-GAAP adjustments1.3to0.6
Total adjustments0.65.77.3to6.6
Non-GAAP$144.0to$154.0$71.0to$78.9$10.0to$14.9$7.6to$11.8
As a % of revenue (GAAP)48.9%to50.8%3.0%to5.9%0.2%to3.4%
As a % of revenue (Non-GAAP)49.3%to51.2%6.9%to9.6%5.3%to7.6%
Diluted net income per share:
GAAP$—to$0.05
Non-GAAP$0.07to$0.11
Shares used in per share calculation:
GAAP and Non-GAAP110.8
(1) Components may not sum to total due to rounding.
2022 Financial Guidance (1)
RevenueGross ProfitIncome from OperationsNet Income (Loss)
GAAP$585.0to$625.0$283.9to$310.9$21.6to$35.6$(21.1)to$(7.0)
Stock-based compensation expense1.824.824.8
Restructuring and related charges1.32.62.6
Non-cash interest and other expenses related to convertible notes27.6
Tax effect of non-GAAP adjustments4.1to2.3
Total adjustments3.127.459.1to57.3
Non-GAAP$585.0to$625.0$287.0to$314.0$49.0to$63.0$38.1to$50.3
As a % of revenue (GAAP)48.5%to49.7%3.7%to5.7%(3.6)%to(1.1)%
As a % of revenue (Non-GAAP)49.1%to50.2%8.4%to10.1%6.5%to8.1%
Diluted net income (loss) per share:
GAAP$(0.20)to$(0.07)
Non-GAAP$0.34to$0.45
Shares used in per share calculation:
GAAP104.8
Non-GAAP110.8
(1) Components may not sum to total due to rounding.

14


Harmonic Inc.
Adjusted EBITDA Reconciliation on Financial Guidance (Unaudited)(1)
(In millions)
Q2 2022 Financial Guidance2022 Financial Guidance
Net income (loss) - GAAP$0.3to$5.2$(21.1)to$(7.0)
Provision for income taxes2.49.8
Interest expense, net1.34.9
Depreciation3.012.8
EBITDA$7.0to$11.9$6.4to$20.5
Adjustments
Stock-based compensation5.224.8
Loss on debt conversion26.5
Restructuring and related charges0.52.6
Adjusted EBITDA$12.7to$17.6$60.4to$74.4
(1) Components may not sum to total due to rounding.
15