On July 29, 2024, Harmonic Inc (HLIT, Financial) released its 8-K filing detailing the company's financial performance for the second quarter of 2024. Harmonic Inc designs and manufactures video infrastructure products and system solutions to deliver video and broadband services to consumer devices. The firm operates in two segments: Video and Broadband, with the majority of its revenue generated from the United States.
Q2 2024 Financial Highlights
Harmonic Inc reported revenue of $138.7 million for Q2 2024, a 14% increase quarter-over-quarter, but a decline from $156.0 million in the same period last year. The company's performance exceeded the analyst estimate of $133.67 million. The Broadband segment contributed $92.9 million, while the Video segment added $45.8 million.
Despite the revenue decline, Harmonic Inc achieved a GAAP gross margin of 52.9% and a non-GAAP gross margin of 53.1%. The Broadband segment's non-GAAP gross margin was 47.6%, while the Video segment's non-GAAP gross margin improved to 64.4% from 61.7% in the prior year period.
Income Statement and Profitability
Harmonic Inc reported a GAAP net loss of $12.5 million, translating to a GAAP net loss per share of $0.11. On a non-GAAP basis, the company achieved a net income of $9.3 million, or $0.08 per share, surpassing the analyst estimate of $0.07 per share. The non-GAAP adjusted EBITDA for the quarter was $16.1 million, compared to $21.1 million in the prior year period.
“Our second quarter revenue was at the high end of our guidance range while profitability in both businesses exceeded our expectations,” said Nimrod Ben-Natan, president and chief executive officer of Harmonic. “These results demonstrate strong execution in both our Broadband and Video businesses as we continue to implement our 2024 and long-term growth plans.”
Balance Sheet and Cash Flow
As of the end of Q2 2024, Harmonic Inc reported cash and cash equivalents of $45.9 million, down from $71.0 million in the prior year period. The company also reported backlog and deferred revenue of $613.1 million, indicating strong future revenue potential.
Business Developments and Achievements
Harmonic Inc continued to diversify its Broadband customer base, with notable deployments such as Telecentro in Argentina selecting Harmonic’s cOS broadband platform. The company also made its first production shipments of the new high-density Pier optical line terminal (OLT) shelf for PON applications, and reported an increasing Video sales pipeline of larger Appliance and Tier 1 SaaS opportunities.
Key Financial Metrics
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Net Revenue | $138.7 million | $122.1 million | $156.0 million |
| Net Income (Loss) | $(12.5) million | $(8.1) million | $1.6 million |
| Net Income (Loss) per Share | $(0.11) | $(0.07) | $0.01 |
| Adjusted EBITDA | $16.1 million | $4.1 million | $21.1 million |
| Bookings | $72.4 million | $146.1 million | $194.7 million |
| Backlog and Deferred Revenue | $613.1 million | $677.8 million | $663.8 million |
| Cash and Cash Equivalents | $45.9 million | $84.3 million | $71.0 million |
Analysis and Outlook
Harmonic Inc's Q2 2024 performance highlights the company's ability to execute its growth plans effectively, despite a year-over-year revenue decline. The strong gross margins and profitability in both the Broadband and Video segments are positive indicators for future performance. However, the decline in cash reserves and bookings may pose challenges that the company needs to address to sustain its growth trajectory.
Overall, Harmonic Inc's financial achievements in Q2 2024 demonstrate resilience and strategic execution, making it a company to watch for value investors interested in the hardware sector.
Explore the complete 8-K earnings release (here) from Harmonic Inc for further details.
