Harmonic (HLIT, Financial) reported first-quarter revenue of $133.1 million, surpassing the consensus estimate of $127.51 million. The company's leadership attributed its success to robust execution across its operations, particularly with higher-than-anticipated Video revenue, improved gross margin, and increased Adjusted EBITDA. In a statement, CEO Nimrod Ben-Natan highlighted the ongoing success in the Broadband segment and the expansion of market share in Video, noting that effective cost management remains a priority amidst economic uncertainties.
Despite potential challenges from tariff policies, Harmonic has yet to observe any shifts in customer behavior. The company's strong performance, extensive backlog, and accumulation of customer wins bolster confidence in its strategic approach and prospects for sustained growth. The firm remains focused on enhancing its market position while navigating a dynamic economic landscape.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Harmonic Inc (HLIT, Financial) is $11.75 with a high estimate of $14.00 and a low estimate of $10.00. The average target implies an upside of 26.21% from the current price of $9.31. More detailed estimate data can be found on the Harmonic Inc (HLIT) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, Harmonic Inc's (HLIT, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Harmonic Inc (HLIT, Financial) in one year is $13.37, suggesting a upside of 43.61% from the current price of $9.31. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Harmonic Inc (HLIT) Summary page.
HLIT Key Business Developments
Release Date: February 10, 2025
- Total Company Revenue: $222.2 million, up 33% year over year.
- EPS: $0.45, an increase of 246%.
- Cash Balance: $101.5 million, up $43.3 million sequentially.
- Broadband Revenue: $171 million, reaching record levels.
- Video Revenue: $51.1 million.
- Video SaaS Revenue: $15.1 million, up 15% year over year.
- Gross Margin: 56.1%, at the higher end of guidance.
- Broadband Gross Margin: 52.7%, up 440 basis points sequentially.
- Video Gross Margin: 67.4%, up 280 basis points year over year.
- Operating Expenses: $61.5 million, down 3% year over year.
- Bookings: $150 million with a book-to-bill ratio of 0.7.
- Backlog and Deferred Revenue: $496.3 million.
- Q1 2025 Broadband Revenue Guidance: $80 to $90 million.
- Q1 2025 Video Revenue Guidance: $40 to $45 million.
- Full Year 2025 Broadband Revenue Guidance: $400 to $450 million.
- Full Year 2025 Video Revenue Guidance: $185 to $195 million.
- Total Company EPS Guidance for 2025: $0.43 to $0.68.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Harmonic Inc (HLIT, Financial) delivered record 4th quarter and full year 2024 results, with strong growth in the broadband segment.
- The company successfully returned its video segment to profitability, highlighting operational focus.
- Harmonic Inc (HLIT) announced a new $200 million share repurchase program, indicating confidence in future performance.
- The company achieved a 47% year-over-year revenue growth in its cloud offerings, showcasing the strength of its cloud strategy.
- Harmonic Inc (HLIT) added five new customers in the fourth quarter, expanding its customer base and market reach.
Negative Points
- The company anticipates a below-trend year for broadband revenue in 2025 due to the timing of the rollout and ecosystem dependencies.
- Harmonic Inc (HLIT) expects a decline in total company and broadband revenue in 2025 due to recent market dynamics.
- There are industry-wide challenges in 2025 related to the transition to Unified Doxis 4.0, impacting revenue forecasts.
- The company took a $5 million inventory provision related to the transition to Doxis Unified 4.0.
- Harmonic Inc (HLIT) reported reduced order forecasts from some broadband customers, reflecting market uncertainties.
