Harmonic Announces Third Quarter 2025 Results

Both Broadband and Video exceeded expectations on revenue and profitability , /PRNewswire/ -- Harmonic Inc. (NASDAQ: HLIT) today announced its unaudited results for the third quarter of 2025. "Our third quarter results exceeded our expectations on revenue and profitability for both Broadband and Video," said Nimrod Ben-Natan, president and chief executive officer of Harmonic. "We saw stronger momentum in Broadband with certain customer orders being realized earlier than anticipated, and in Video our growth was led by SaaS. Looking ahead, as expected, we anticipate Broadband revenue growth momentum to increase in 2026 as the year progresses, based on Unified DOCSIS 4.0 ramp readiness, large customer deployment plans and Rest of World accelerated adoption." Q3 Financial and Business Highlights Financial Revenue: $142.4 million, compared to $195.8 million in the prior year period Broadband segment revenue: $90.5 million, compared to $145.3 million in the prior year period Video segment revenue: $51.9 million, compared to $50.4 million in the prior year period Gross margin: GAAP 54.2% and Non-GAAP 54.4%, both higher compared to GAAP 53.5% and Non-GAAP 53.7% in the prior year period Broadband segment Non-GAAP gross margin: 47.3% compared to 48.3% in the prior year period Video segment Non-GAAP gross margin: 66.7% compared to 69.0% in the prior year period Operating income: GAAP income $9.8 million and Non-GAAP income $19.0 million, compared to GAAP income $35.4 million and Non-GAAP income $44.5 million in the prior year period Net income: GAAP net income $2.7 million and Non-GAAP net income of $14.1 million, compared to GAAP net income $21.7 million and Non-GAAP net income $29.9 million in the prior year period Non-GAAP adjusted EBITDA: $21.9 million compared to $43.4 million in the prior year period Net income per share: GAAP net income per share of $0.02 and Non-GAAP net income per share of $0.12, compared to GAAP net income per share of $0.19 and Non-GAAP net income per share of $0.26 in the prior year period Backlog and deferred revenue of $494.5 million Cash: $127.4 million, compared to $58.2 million in the prior year period Repurchased approximately 1.8 million shares of common stock for $15.7 million Business Commercially deployed our cOS™ solution with 142 customers, serving 37.6 million cable modems Won six new broadband customers during the quarter including two fiber customers and one international Tier 1 Announced Comcast is leveraging Harmonic's fiber-to-the-home solutions as it expands its network to new locations annually, including more than 1.2 million new locations planned in 2025 Announced today an expanded partnership with Spectrum (Charter) on cOS, DOCSIS 4.0 Unified RPDs, and advanced operational tools Record Video SaaS revenue of $16.1 million in Q3 reflects continued growth, especially in sports streaming Select Financial Information GAAP Non-GAAP Key Financial Results Q3 2025 Q2 2025 Q3 2024 Q3 2025 Q2 2025 Q3 2024 (Unaudited, in millions, except per share data) Net revenue $ 142.4 $ 138.0 $ 195.8 * * * Net income $ 2.7 $ 2.9 $ 21.7 $ 14.1 $ 10.3 $ 29.9 Net income per share $ 0.02 $ 0.03 $ 0.19 $ 0.12 $ 0.09 $ 0.26 * Not applicable Other Financial Information Q3 2025 Q2 2025 Q3 2024 (Unaudited, in millions) Adjusted EBITDA for the quarter (1) $ 21.9 $ 17.0 $ 43.4 Bookings for the quarter $ 133.3 $ 158.4 $ 171.4 Backlog and deferred revenue as of quarter end $ 494.5 $ 504.5 $ 584.7 Cash and cash equivalents as of quarter end $ 127.4 $ 123.9 $ 58.2 (1) Adjusted EBITDA is a Non-GAAP financial measure. Refer to "Preliminary Net Income to Consolidated Segment Adjusted EBITDA Reconciliation" below for a reconciliation to net income, the most comparable GAAP measure. 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 Q4 2025 GAAP Financial Guidance Low High (Unaudited, in millions, except percentages and per share data) Broadband Video Total GAAP Broadband Video Total GAAP Net revenue $ 85 $ 48 $ 133 $ 95 $ 52 $ 147 Gross margin % 53.4 % 55.8 % Gross profit (1) $ 71 $ 82 Tax rate 45 % 45 % Net income $ — $ 5 Net income per share $ — $ 0.04 Shares (2) 113.1 113.1 (1) Includes estimated tariff impacts of approximately $1 million (2) Diluted shares assumes stock price at $9.40 (Q3 2025 average price). Q4 2025 Non-GAAP Financial Guidance (1) Low High (Unaudited, in millions, except percentages and per share data) Broadband Video Total Broadband Video Total Gross margin % 48.0 % 66.0 % 54.5 % 50.0 % 67.0 % 56.0 % Gross profit (2) $ 41 $ 31 $ 72 $ 48 $ 35 $ 83 Adjusted EBITDA(3) $ 10 $ 3 $ 13 $ 16 $ 6 $ 22 Tax rate 21 % 21 % Net income per share $ 0.06 $ 0.12 Shares (4) 113.1 113.1 (1) Refer to "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations on Financial Guidance" below. Components may not sum to total due to rounding. (2) Includes estimated tariff impacts of approximately $1 million (3) Refer to "Net Income to Consolidated Adjusted EBITDA Reconciliation on Financial Guidance" below for a reconciliation to net income (loss), the most comparable GAAP measure. (4) Diluted shares assumes stock price at $9.40 (Q3 2025 average price). 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, November 3, 2025. 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-conf.media-server.com/register/BI15f6a52a96984250b357958fe76332c8. A replay will be available after 5:00 p.m. PT on the same website. 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 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 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 anticipated customer purchases and deployments of our Unified DOCSIS 4.0 solutions and our expectations regarding: net revenue, gross margins, operating expenses, operating income (loss), Adjusted EBITDA, tax expense and tax rate, and net income (loss) per diluted share. 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: customer concentration and consolidation; loss of one or more key customers; delays or decreases in capital spending in the cable, satellite telco, broadcast and media industries; 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 market and technology trends underlying our Broadband and Video businesses will not continue to develop in their current direction or pace; the impact of tariffs and 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; our ability to develop new and enhanced products in a timely manner and market acceptance of our new or existing products; risks associated with our international operations; exchange rate fluctuations of the currencies in which we conduct business; risks associated with our cOS™ and VOS® product solutions; dependence on various broadband and video 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; stock repurchases may not be conducted in the timeframe or in the manner we expect, or at all; and the impact 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, 2024, 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), Adjusted EBITDA (including those amounts as a percentage of revenue) 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, 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 related to convertible notes - 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. Depreciation - Depreciation expense is excluded from Adjusted EBITDA as this is a non-cash item unrelated to the ordinary course of our business and not reflective of our underlying business performance. Non-recurring advisory fees - There were non-recurring costs that we excluded from Non-GAAP results relating to professional accounting, tax and legal fees associated with strategic corporate initiatives. Asset impairment and related charges - We exclude asset impairment and related charges due to the nature of such expenses being unusual and arising outside the ordinary course of continuing operations. These costs primarily consist of impairments of fixed assets, right-of-use assets and related leasehold improvements, and other unrecoverable facility costs due to the intended change in use of certain leased space. 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. It also includes a non-cash adjustment related to the method change for capitalization of research and development expenses under Section 174 of the Internal Revenue Code, which reduced our foreign-derived intangible income (FDII) tax benefits. This non-recurring adjustment has been excluded from the Company's non-GAAP tax rate and non-GAAP financial measures, as management believes exclusion of this item provides more meaningful period-to-period comparisons of ongoing operating performance. Harmonic Inc. Preliminary Condensed Consolidated Balance Sheets (Unaudited, in thousands, except par value) September 26, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 127,376 $ 101,457 Accounts receivable, net of allowances for credit losses of $1,951 and $2,528 as of September 26, 2025 and December 31, 2024, respectively 104,542 178,013 Inventories 68,604 64,004 Prepaid expenses and other current assets 26,509 22,602 Total current assets 327,031 366,076 Property and equipment, net 27,768 26,823 Operating lease right-of-use assets 12,148 12,411 Goodwill 241,767 236,876 Deferred income taxes, net 115,454 121,028 Other non-current assets 34,427 33,292 Total assets $ 758,595 $ 796,506 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt 2,944 2,194 Current portion of other borrowings 5,758 4,941 Accounts payable 23,270 35,250 Deferred revenue 49,522 47,069 Operating lease liabilities 5,961 5,675 Other current liabilities 69,647 72,440 Total current liabilities 157,102 167,569 Long-term debt 109,875 112,084 Other borrowings 8,052 8,694 Operating lease liabilities, non-current 13,972 14,727 Other non-current liabilities 26,583 28,174 Total liabilities 315,584 331,248 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; 112,215 and 116,735 shares issued and outstanding at September 26, 2025 and December 31, 2024, respectively 112 117 Additional paid-in capital 2,458,285 2,432,733 Accumulated deficit (2,008,215) (1,953,495) Accumulated other comprehensive loss (7,171) (14,097) Total stockholders' equity 443,011 465,258 Total liabilities and stockholders' equity $ 758,595 $ 796,506 Harmonic Inc. Preliminary Condensed Consolidated Statements of Operations (Unaudited, in thousands, except per share data) Three Months Ended Nine Months Ended September 26, 2025 September 27, 2024 September 26, 2025 September 27, 2024 Revenue: Appliance and integration $ 97,774 $ 153,685 $ 283,382 $ 329,464 SaaS and service 44,608 42,071 130,162 127,092 Total net revenue 142,382 195,756 413,544 456,556 Cost of revenue: Appliance and integration 51,656 77,683 143,898 171,635 SaaS and service 13,597 13,341 40,150 43,651 Total cost of revenue 65,253 91,024 184,048 215,286 Total gross profit 77,129 104,732 229,496 241,270 Operating expenses: Research and development 29,699 30,073 90,490 89,562 Selling, general and administrative 36,524 35,851 111,816 114,537 Asset impairment and related charges — 3,103 1,637 12,103 Restructuring and related charges 1,087 281 1,737 14,800 Total operating expenses 67,310 69,308 205,680 231,002 Income from operations 9,819 35,424 23,816 10,268 Interest expense, net (1,184) (2,686) (3,911) (4,833) Other income (expense), net 113 (3,932) 300 (3,602) Income before income taxes 8,748 28,806 20,205 1,833 Provision for income taxes 6,054 7,088 8,700 736 Net income $ 2,694 $ 21,718 $ 11,505 $ 1,097 Net income per share: Basic $ 0.02 $ 0.19 $ 0.10 $ 0.01 Diluted $ 0.02 $ 0.19 $ 0.10 $ 0.01 Weighted average shares outstanding: Basic 112,982 116,403 114,221 114,594 Diluted 113,323 117,358 114,602 117,385 Harmonic Inc. Preliminary Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands) Nine Months Ended September 26, 2025 September 27, 2024 Cash flows from operating activities: Net income $ 11,505 $ 1,097 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 8,215 9,171 Asset impairment and related charges 1,637 12,103 Stock-based compensation 23,486 19,587 Foreign currency remeasurement 446 6,513 Deferred income taxes, net (3,120) (2,673) Provision for excess and obsolete inventories 2,789 3,135 Other 61 435 Changes in operating assets and liabilities: Accounts receivable, net 74,121 (31,611) Inventories (3,944) 6,592 Prepaid expenses and other assets 10,359 (3,489) Accounts payable (13,785) 1,787 Deferred revenues 1,173 2,062 Other liabilities (17,265) (11,323) Net cash provided by operating activities 95,678 13,386 Cash flows from investing activities: Purchases of property and equipment (8,404) (6,840) Net cash used in investing activities (8,404) (6,840) Cash flows from financing activities: Proceeds from long-term debt 95,000 115,000 Repayment of convertible debt — (115,500) Repayment of long-term debt and other borrowings (101,897) (4,797) Payments for debt issuance costs — (332) Repurchase of common stock (65,757) (30,047) Proceeds from other borrowings 3,835 3,943 Proceeds from common stock issued to employees 5,983 6,628 Taxes paid related to net share settlement of equity awards (3,795) (6,877) Net cash used in financing activities (66,631) (31,982) Effect of exchange rate changes on cash and cash equivalents and restricted cash 5,283 (332) Net increase (decrease) in cash and cash equivalents and restricted cash 25,926 (25,768) Cash and cash equivalents and restricted cash at beginning of period 101,789 84,269 Cash and cash equivalents and restricted cash at end of period $ 127,715 $ 58,501 Cash and cash equivalents and restricted cash at end of period Cash and cash equivalents $ 127,376 $ 58,174 Restricted cash included in other current assets 339 327 Total cash, cash equivalents and restricted cash as shown in the condensed consolidated statement of cash flows $ 127,715 $ 58,501 Harmonic Inc. Preliminary Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands) Nine Months Ended September 26, 2025 September 27, 2024 Supplemental cash flow disclosure: Income tax payments, net $ 14,496 $ 12,894 Interest payments, net $ 2,897 $ 4,363 Supplemental schedule of non-cash investing activities: Capital expenditures incurred but not yet paid $ 968 $ 709 Supplemental schedule of non-cash financing activities: Shares of common stock issued upon redemption of the 2024 Notes — 4,578 Harmonic Inc. Preliminary GAAP Revenue Information (Unaudited, in thousands, except percentages) Three Months Ended September 26, 2025 June 27, 2025 September 27, 2024 Geography Americas $ 112,819 79 % $ 108,205 79 % $ 167,720 86 % EMEA 23,433 16 % 19,888 14 % 20,269 10 % APAC 6,130 5 % 9,934 7 % 7,767 4 % Total $ 142,382 100 % $ 138,027 100 % $ 195,756 100 % Market Service Provider $ 96,863 68 % $ 94,851 69 % $ 159,993 82 % Broadcast and Media 45,519 32 % 43,176 31 % 35,763 18 % Total $ 142,382 100 % $ 138,027 100 % $ 195,756 100 % Nine Months Ended September 26, 2025 September 27, 2024 Geography Americas $ 322,705 78 % $ 370,348 81 % EMEA 66,493 16 % 66,509 15 % APAC 24,346 6 % 19,699 4 % Total $ 413,544 100 % $ 456,556 100 % Market Service Provider $ 285,916 69 % $ 351,115 77 % Broadcast and Media 127,628 31 % 105,441 23 % Total $ 413,544 100 % $ 456,556 100 % Harmonic Inc. Preliminary Segment Information (Unaudited, in thousands, except percentages) Three Months Ended September 26, 2025 Broadband Video TotalSegmentMeasures Adjustments (1) ConsolidatedGAAPMeasures Net revenue $ 90,492 $ 51,890 $ 142,382 $ — $ 142,382 Gross profit 42,765 (1) 34,624 (1) 77,389 (1) (260) 77,129 Gross margin % 47.3 % (1) 66.7 % (1) 54.4 % (1) 54.2 % Three Months Ended June 27, 2025 Broadband Video TotalSegmentMeasures Adjustments (1) ConsolidatedGAAPMeasures Net revenue $ 86,918 $ 51,109 $ 138,027 $ — $ 138,027 Gross profit 40,412 (1) 34,249 (1) 74,661 (1) (868) 73,793 Gross margin % 46.5 % (1) 67.0 % (1) 54.1 % (1) 53.5 % Three Months Ended September 27, 2024 Broadband Video TotalSegmentMeasures Adjustments (1) ConsolidatedGAAPMeasures Net revenue $ 145,338 $ 50,418 $ 195,756 $ — $ 195,756 Gross profit 70,256 (1) 34,770 (1) 105,026 (1) (294) 104,732 Gross margin % 48.3 % (1) 69.0 % (1) 53.7 % (1) 53.5 % Nine Months Ended September 26, 2025 Broadband Video TotalSegmentMeasures Adjustments (1) ConsolidatedGAAPMeasures Net revenue $ 262,288 $ 151,256 $ 413,544 $ — $ 413,544 Gross profit 130,257 (1) 100,928 (1) 231,185 (1) (1,689) 229,496 Gross margin % 49.7 % (1) 66.7 % (1) 55.9 % (1) 55.5 % Nine Months Ended September 27, 2024 Broadband Video TotalSegmentMeasures Adjustments (1) ConsolidatedGAAPMeasures Net revenue $ 317,172 $ 139,384 $ 456,556 $ — $ 456,556 Gross profit 151,986 (1) 90,833 (1) 242,819 (1) (1,549) 241,270 Gross margin % 47.9 % (1) 65.2 % (1) 53.2 % (1) 52.8 % (1) Segment gross margin and segment gross profit are Non-GAAP financial measures. Refer to "Use of Non-GAAP Financial Measures" above and "GAAP to Non-GAAP Reconciliations" below. Harmonic Inc. GAAP to Non-GAAP Reconciliations (Unaudited) (in thousands, except percentages and per share data) Three Months Ended September 26, 2025 Revenue GrossProfit Total OperatingExpense Income fromOperations Total Non-operatingExpense, net Net Income GAAP $ 142,382 $ 77,129 $ 67,310 $ 9,819 $ (1,071) $ 2,694 Stock-based compensation — 260 (7,064) 7,324 — 7,324 Restructuring and related charges — — (1,087) 1,087 — 1,087 Non-recurring advisory fees — — (749) 749 — 749 Discrete tax items and tax effect of Non-GAAP adjustments — — — — — 2,293 Total adjustments — 260 (8,900) 9,160 — 11,453 Non-GAAP $ 142,382 $ 77,389 $ 58,410 $ 18,979 $ (1,071) $ 14,147 As a % of revenue (GAAP) 54.2 % 47.3 % 6.9 % (0.8) % 1.9 % As a % of revenue (Non-GAAP) 54.4 % 41.0 % 13.3 % (0.8) % 9.9 % Diluted net income per share: GAAP $ 0.02 Non-GAAP $ 0.12 Shares used in per share calculation: GAAP and Non-GAAP 113,323 Three Months Ended June 27, 2025 Revenue GrossProfit Total OperatingExpense Income fromOperations TotalNon-operatingExpense, net Net Income GAAP $ 138,027 $ 73,793 $ 69,923 $ 3,870 $ (894) $ 2,871 Stock-based compensation — 868 (6,829) 7,697 — 7,697 Restructuring and related charges — — (650) 650 — 650 Non-recurring advisory fees — — (78) 78 — 78 Lease-related asset impairment and other charges (1) — — (1,637) 1,637 — 1,637 Discrete tax items and tax effect of Non-GAAP adjustments — — — — — (2,633) Total adjustments — 868 (9,194) 10,062 — 7,429 Non-GAAP $ 138,027 $ 74,661 $ 60,729 $ 13,932 $ (894) $ 10,300 As a % of revenue (GAAP) 53.5 % 50.7 % 2.8 % (0.6) % 2.1 % As a % of revenue (Non-GAAP) 54.1 % 44.0 % 10.1 % (0.6) % 7.5 % Diluted net income per share: GAAP $ 0.03 Non-GAAP $ 0.09 Shares used in per share calculation: GAAP and Non-GAAP 113,493 (1) Includes impairment charges of $0.4 million for right-of-use assets, $0.3 million for leasehold improvements, and $0.9 million related to the fair value of other unrecoverable facility costs. Three Months Ended September 27, 2024 Revenue GrossProfit Total OperatingExpense Income fromOperations TotalNon-operatingExpense, net Net Income GAAP $ 195,756 $ 104,732 $ 69,308 $ 35,424 $ (6,618) $ 21,718 Stock-based compensation — 294 (5,416) 5,710 — 5,710 Restructuring and related charges — — (281) 281 — 281 Asset impairment and related charges (1) — — (3,103) 3,103 — 3,103 Discrete tax items and tax effect of Non-GAAP adjustments — — — — — (871) Total adjustments — 294 (8,800) 9,094 — 8,223 Non-GAAP $ 195,756 $ 105,026 $ 60,508 $ 44,518 $ (6,618) $ 29,941 As a % of revenue (GAAP) 53.5 % 35.4 % 18.1 % (3.4) % 11.1 % As a % of revenue (Non-GAAP) 53.7 % 30.9 % 22.7 % (3.4) % 15.3 % Diluted net income per share: GAAP $ 0.19 Non-GAAP $ 0.26 Shares used in per share calculation: GAAP and Non-GAAP 117,358 (1) Includes write-off of $1.8 million for internally developed capitalized software, impairment charges of $0.8 million for right-of-use assets, $0.1 million for leasehold improvements, and $0.4 million related to the fair value of other unrecoverable facility costs. Nine Months Ended September 26, 2025 Revenue GrossProfit Total OperatingExpense Income fromOperations TotalNon-operatingExpense, net Net Income GAAP $ 413,544 $ 229,496 $ 205,680 $ 23,816 $ (3,611) $ 11,505 Stock-based compensation — 1,689 (21,797) 23,486 — 23,486 Restructuring and related charges — — (1,737) 1,737 — 1,737 Non-recurring advisory fees — — (827) 827 — 827 Lease-related asset impairment and other charges (1) — — (1,637) 1,637 — 1,637 Discrete tax items and tax effect of non-GAAP adjustments — — — — — (1,357) Total adjustments — 1,689 (25,998) 27,687 — 26,330 Non-GAAP $ 413,544 $ 231,185 $ 179,682 $ 51,503 $ (3,611) $ 37,835 As a % of revenue (GAAP) 55.5 % 49.7 % 5.8 % (0.9) % 2.8 % As a % of revenue (Non-GAAP) 55.9 % 43.4 % 12.5 % (0.9) % 9.1 % Diluted net income per share: GAAP $ 0.10 Non-GAAP $ 0.33 Shares used in per share calculation: GAAP and Non-GAAP 114,602 (1) Includes impairment charges of $0.4 million for right-of-use assets, $0.3 million for leasehold improvements, and $0.9 million related to the fair value of other unrecoverable facility costs. Nine Months Ended September 27, 2024 Revenue GrossProfit Total OperatingExpense Income fromOperations TotalNon-operatingExpense, net Net Income GAAP $ 456,556 $ 241,270 $ 231,002 $ 10,268 $ (8,435) $ 1,097 Stock-based compensation — 1,089 (18,498) 19,587 — 19,587 Restructuring and related charges — 460 (14,800) 15,260 11 15,271 Non-recurring advisory fees — — (755) 755 — 755 Asset impairment and related charges (1) — — (12,103) 12,103 — 12,103 Non-cash interest expense related to convertible notes — — — — 567 567 Discrete tax items and tax effect of non-GAAP adjustments — — — — — (9,778) Total adjustments — 1,549 (46,156) 47,705 578 38,505 Non-GAAP $ 456,556 $ 242,819 $ 184,846 $ 57,973 $ (7,857) $ 39,602 As a % of revenue (GAAP) 52.8 % 50.6 % 2.2 % (1.8) % 0.2 % As a % of revenue (Non-GAAP) 53.2 % 40.5 % 12.7 % (1.7) % 8.7 % Diluted net income per share: GAAP $ 0.01 Non-GAAP $ 0.34 Shares used in per share calculation: GAAP and Non-GAAP 117,385 (1) Includes write-off of $1.8 million for internally developed capitalized software, and impairment charges of $3.7 million for right-of-use assets, $4.3 million for leasehold improvements, and $2.3 million related to the fair value of other unrecoverable facility costs. Harmonic Inc. Calculation of Adjusted EBITDA by Segment (Unaudited) (In thousands, except percentages) Three Months Ended September 26, 2025 Broadband Video Income from operations $ 12,095 $ 6,884 Depreciation 2,012 811 Other non-operating income, net 77 36 Adjusted EBITDA(1) $ 14,184 $ 7,731 Revenue $ 90,492 $ 51,890 Adjusted EBITDA margin % (1) 15.7 % 14.9 % Three Months Ended June 27, 2025 Broadband Video Income from operations $ 8,585 $ 5,347 Depreciation 1,929 743 Other non-operating income, net 255 104 Adjusted EBITDA(1) $ 10,769 $ 6,194 Revenue $ 86,918 $ 51,109 Adjusted EBITDA margin % (1) 12.4 % 12.1 % Three Months Ended September 27, 2024 Broadband Video Income from operations $ 38,192 $ 6,326 Depreciation 2,001 859 Other non-operating expense, net (2,733) (1,199) Adjusted EBITDA(1) $ 37,460 $ 5,986 Revenue $ 145,338 $ 50,418 Adjusted EBITDA margin % (1) 25.8 % 11.9 % Nine Months Ended September 26, 2025 Broadband Video Income from operations (1) $ 34,701 $ 16,802 Depreciation 5,905 2,310 Other non-operating income, net 208 92 Adjusted EBITDA(1) $ 40,814 $ 19,204 Revenue $ 262,288 $ 151,256 Adjusted EBITDA margin % (1) 15.6 % 12.7 % Nine Months Ended September 27, 2024 Broadband Video Income (loss) from operations (1) $ 60,567 $ (2,594) Depreciation 6,120 3,051 Other non-operating expense, net (2,506) (1,085) Adjusted EBITDA(1) $ 64,181 $ (628) Revenue $ 317,172 $ 139,384 Adjusted EBITDA margin % (1) 20.2 % (0.5) % (1) Adjusted EBITDA and Adjusted EBITDA margin are Non-GAAP financial measures. Refer below for the "Net Income (Loss) to Consolidated Segment Adjusted EBITDA Reconciliation." Harmonic Inc. Preliminary Net Income to Consolidated Segment Adjusted EBITDA Reconciliation (Unaudited) (In thousands, except percentages) Three Months Ended September 26, 2025 June 27, 2025 September 27, 2024 Net income (GAAP) $ 2,694 $ 2,871 $ 21,718 Provision for income taxes 6,054 105 7,088 Interest expense, net 1,184 1,253 2,686 Depreciation 2,823 2,672 2,860 EBITDA 12,755 6,901 34,352 Adjustments Stock-based compensation 7,324 7,697 5,710 Restructuring and related charges 1,087 650 281 Non-recurring advisory fees 749 78 — Lease-related asset impairment and other charges — 1,637 3,103 Total consolidated segment adjusted EBITDA (Non-GAAP) $ 21,915 $ 16,963 $ 43,446 Revenue $ 142,382 $ 138,027 $ 195,756 Net income margin (GAAP) 1.9 % 2.1 % 11.1 % Consolidated segment Adjusted EBITDA margin (Non-GAAP) 15.4 % 12.3 % 22.2 % Nine Months Ended September 26, 2025 September 27, 2024 Net income (GAAP) $ 11,505 $ 1,097 Provision for income taxes 8,700 736 Interest expense, net 3,911 4,833 Depreciation 8,215 9,171 EBITDA 32,331 15,837 Adjustments Stock-based compensation 23,486 19,587 Restructuring and related charges 1,737 15,271 Non-recurring advisory fees 827 755 Lease-related asset impairment and other charges 1,637 12,103 Total consolidated segment adjusted EBITDA (Non-GAAP) $ 60,018 $ 63,553 Revenue $ 413,544 $ 456,556 Net income margin (GAAP) 2.8 % 0.2 % Consolidated segment Adjusted EBITDA margin (Non-GAAP) 14.5 % 13.9 % Harmonic Inc. GAAP to Non-GAAP Reconciliations on Financial Guidance (Unaudited) (In millions, except percentages and per share data) Q4 2025 Financial Guidance (1) Revenue GrossProfit TotalOperating Expense Incomefrom Operations NetIncome GAAP $ 133 to $ 147 $ 71 to $ 82 $ 70 to $ 71 $ 1 to $ 10 $ — to $ 5 Stock-based compensation — 1 (8) 9 9 Tax effect of Non-GAAP adjustments — — — — (2) to — Total adjustments — 1 (8) 9 7 to 9 Non-GAAP $ 133 to $ 147 $ 72 to $ 83 $ 62 to $ 63 $ 10 to $ 19 $ 7 to $ 14 As a % of revenue (GAAP) 53.4 % to 55.8 % 52.6 % to 48.3 % 0.8 % to 6.8 % 0.0 % to 3.4 % As a % of revenue (Non-GAAP) 54.5 % to 56.0 % 46.6 % to 42.9 % 7.5 % to 12.9 % 5.3 % to 9.5 % Diluted net income per share: GAAP $ — to $ 0.04 Non-GAAP $ 0.06 to $ 0.12 Shares used in per share calculation: GAAP and Non-GAAP 113.1 (1) Components may not sum to total due to rounding. Harmonic Inc. Calculation of Adjusted EBITDA by Segment on Financial Guidance (Unaudited) (1) (In millions) Q4 2025 Financial Guidance Broadband Video Income from operations $ 8 to $ 14 $ 2 to $ 5 Depreciation 2 2 1 1 Segment adjusted EBITDA(2) $ 10 to $ 16 $ 3 to $ 6 (1) Components may not sum to total due to rounding. (2) Segment Adjusted EBITDA is a Non-GAAP financial measure. Refer below for the "Net Income to Consolidated Segment Adjusted EBITDA reconciliation on Financial Guidance." Harmonic Inc. Net Income to Consolidated Segment Adjusted EBITDA Reconciliation on Financial Guidance (Unaudited) (1) (In millions) Q4 2025 Financial Guidance Net income (GAAP) $ — to $ 5 Provision for income taxes — 4 Interest expense, net 1 1 Depreciation 3 3 EBITDA 4 to 13 Adjustments Stock-based compensation 9 9 Total consolidated segment adjusted EBITDA (Non-GAAP) $ 13 to $ 22 (1) Components may not sum to total due to rounding. SOURCE Harmonic Inc.

Harmonic Announces Third Quarter 2025 Results

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