HLIT - Earnings call transcript Q2 2021

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Operator

Welcome to the Q2 2021 Harmonic Earnings Conference Call. My name is Sara and I will be your operator for today’s call. [Operator Instructions] As a reminder, this conference is -- call is being recorded. I would now like to turn the call over to David Hanover, Investor Relations. David, you may begin.

David Hanover

operator. you, Thank thank second and joining today us Hello, XXXX you financial Harmonic's quarter results for everyone, for conference call. are Kalra, With Officer; today Patrick and President me Chief and Sanjay Chief Officer. Financial Harshman, Executive

I'd begin, Relations audio our for webcast going our this the addition of which website. you we out may that like Before portion provided also to Investor in we've on webcast, webcast, our to point slides by to see

Now Slide turning X. to

we projections contained regarding to section results and the we expectations statements events contained to actual XX-Q cause results press provide of our this Harmonic Such Form unless provide otherwise documents may projections corresponding events on important the with non-GAAP and financial you During of release. or or note We call most financial this our These differ call, statements. indicated, These metrics performance you forward-looking to future a documents and we SEC, on are on basis. from factors and will release, in those And and statements posted please determined X-K. other filed recent website which a today's reports identify which are and with can results including statements numbers our today's refer future XX-K the Company. materially. with risk only GAAP, the differ press preliminary on that reconciliation are filed current in forward-looking metrics, or GAAP materially forward-looking together the SEC actual

is over our remainder of business on call our financial our press and historical, some statistical Patrick Harshman. or now information will included version And call and information to be this of will on the in I and operation, The Patrick? available a the of also regarding website. information the release. this turn will discuss recorded CEO, We other

Patrick Harshman

delivered results, and record top Access everyone with while operating comparable and growth, market again an strong to positive and earnings our great call. also with book-to-bill XX% addressed in wins. Access our Both revenue Cable delivered contributed excellent revenue. and position book-to-bill. and design and second Harmonic extending growth, making backlog with year-over-year deferred materially quarter segments resulting double-digit David, thanks, welcome Video Well, global revenue Cable each line The income and quarter multiple X.X, our through to these growth leadership new and of progress

and X.X the XX% serve second modems, year-ago, the XX of this Segment Taking It These finished up now demand our streaming Our year broadcast Video with business worldwide, to as quarter laid was XX% closer with solutions scale year-over-year. out we X ago, edge months grew, year-over-year commercially SaaS million, and track XXX% XX% for an from us, $XX.X continue and broadband at revenue operators year. multiyear streaming our latest for both streaming financial demonstrate impressive SaaS up deliver quarter. million quarter XX% was up and XXXX. and our segment. cable detailed over well-positioned to businesses. revenue Harmonic results we of growth ahead strong opportunities video over plans deployed the be deployments look The of our to a up and to quarter up strategic cable firmly Access another really from seize two on associated was financial a Cable objectives. that compelling on

CMTS results, place moving anticipate these share. of terms second market soon in we With into total

lead gain market that CMTS subset traction globally. we virtualized As continues the to

same cloud We XXXX. flexion business. time our growth greater the An evolution strategic accelerating for June, revenue deployments. targeting billion growth position early addressable As higher $XXX our next adoption and cloud essential operators X-year market of and DAA our anticipated In cable to at path globe, smaller solution gross for and the this we operators. us vision by expanding drive the Xs several out a quarter, this around for last than temporarily DAA a plan than element market, and rate of or Tier greater a CableOS DAA is over here identified financial our for of is native $X laid in growth nodes, margin costs, of and leverage being leader our aggregate impacted the of by by in demand native U.S million both and technology years, to XX% annual leadership the

in to of list Tier added two selected global Tier we've including X three America, top have in the endorsements. who CableOS, North we those Telmex the new course of and bringing Vodafone, Latin of eight, the the America, Millicom, the disclosed Europe in of largest customers Claro quarter, and largest Comcast, including five out all second of chip the number [ph] blue Xs During total to two

additional continue pipeline solid and we'll the wins of are in see design a names that confident to leading new appointments with and X engagements have Tier industry. We

the While initiatives addressable to based great in fiber-to-the-home a software application. roughly our virtualized in aggregate provide converged $X fully addressable to market these that this native The we nearest billion lead has largest cable actively a us broadband CMTS complementary billion momentum engaged market, of that's term is strategy $X path by XXXX. and had cloud on another we're of solution our where with initiatives is also

release, and positive grow very sales the perhaps quarter, a couple significantly, most significantly had opportunity major of saw large and our cable hybrid with product a operators. pipeline, progress During we fiber

fiber from fiber is DAA flexible with longer and and also annual with and the unique with been overlay customers expand initiatives. remain and headend. what new worldwide. module broadband in picture, create competitive also is We're from a differentiation. we're on executing DAA guidance opportunities stronger. our leadership do, LTE addressable market Node press broadband of said the our initiatives And traffic demand never our recent industry network. therefore in comfortably by to our progress unified and flexibility, XXXX, DOCSIS healthy in that be node the node HomePod. extension noted a resonating investing while rate market feature remote making full a Every solution to complimentary targeted support on in revenue market further the the our cable of year Claro software Near-term to And XX% while on-demand broadband release, HomePod target customer is have single receive seamlessly new position Big growth we immediate our pleased raising deploy we to meeting doing global to and trends our As network demonstrable extension fiber-to-the-home increasingly opportunities did also America, we'd a can range Latin unique again in that we the house favorable. growth

now segment. Turning Video continued our momentum with Recent another to quarter. solid

segment to Second and indication year-over-year a XX.X%, XX% for record driven a margin more SaaS revenue ongoing quarter year-over-year, services Recurring and segment existing of clear expanded usage, streaming scaling centric by up revenue additions. near this successful new was and customer gross XX% software model. grew $XX.X million, business, customer to transformation both

ago our the Video Access Cable As with strategic X our months growth business. for we out plan laid business,

the revenue infrastructure market. capturing declining billion market, Video core larger streaming Our profit elements, maximizing the but from two infrastructure and has broadcast position still growing leading and business plan in a $X slowly

services was customers, streaming the streaming fully by complemented On therefore SaaS revenue these customers XX% or side of migrating the toward SaaS number growth U.S platform, the of Approximately total launching business, of the the their growth are still year-over-year to XX XX% pre-revenue. in in bringing XXX. and of of number customers process still the

revenue our about improve streaming the differentiation, and continued growth growth most for technology insertion revenue sales existing and we're confident market with scales to ad were remain pronounced reasons. driving several Looking pipeline ahead, customers. streaming targets sales seeing grow, consistent to we ad expansion. targeted SaaS volume, from hitting and revenue We awareness continues our all brand usage The our

Turning element pleased broadband continued to activity in to worldwide. strategic the We're resurgence our of see project second video plan.

happened bookings. emerging additional revenue expansion, satellite second And enables terrestrial opportunity for networks, between quarter, capitalize generally video from growth, projects. we to of XG strong and pipelines, In your a growing to guidance do and both reflected resilience adjusted bandwidth opportunity video growth we on of operating QX transition raising with overall and the summary, said, market new XG driven our reclamation transport XXXX. quarter in technology as again That reflecting guidance opportunity processing was platform. second Our nearly revenue outlook in pipeline results sales through are and Considering wins video XLS no based strong profit, is and XXXX reflect by infrastructure and positive. fiber over the XG edge delivered contribution our characterized broadcast for anticipated new bookings over driven demand. and margin positioned full that revenue segment IP And quarter multiyear with broadcast year backlogs gross solid new uniquely remainder year streaming we EBITDA another more results our we're believe software strong the Video and SaaS very

Looking a With for look this and to financial you call our for over make on closer strategic multiyear at delivering out outlook. further progress targeted results and compelling ahead, that, financial to now plan. we've I'll laid and Sanjay strategy the turn continuing a we're

Sanjay Kalra

joining for thank Thanks, us Patrick, you all and today.

I'll I'd like referring to quarterly everyone Before are be a the basis. provided results I results to non-GAAP our outlook, remind discuss on financial and that

these As the that Both on release of measures David QX includes earnings on mentioned our are this to reconciliations website. presentation non-GAAP of are earlier, available discussed financial press and GAAP call. our

overview ranges, let's margin a $X.XX. million, X.X% year-over-year, were year-over-year. EBITDA an XX.X% X, Adjusted start revenue of solid basis up $X.X $XXX.X or of above Slide million, highlights. to Turning of of and results, guidance EPS our of second financial XX.X%, delivered revenue, of with XXX which gross quarter improvement including point We

quarter a X.Xx. record We of also second had book-to-bill bookings ratio with

well with and year-over-year. of record and into XX% a revenue we year-over-year, remainder this of deferred $XXX.X XX% result, year XXXX. the Cash up ended us $XXX.X backlog As was up positioning million, million, for QX

our more Now let's detail. review second financials in quarter

compared revenue year-over-year revenue both worldwide million revenue $XX.X during X. by in had strong revenue. contributed reported of in XX.X%, in Total total reflecting up one million $XXX.X, SaaS $XX XXXX. The solid compared the revenue and all than in year-ago $XX.X QX QX QX growth million was the the Turning representing of $XX.X to gains. of we to in million year-ago over Video $XX.X period, and Access 'XX market broadcast $XX.X business increased XX% to our Cable Slide greater in We million reflects total demand, Comcast $XX.X XX% and share improving quarter. was compared continuing growth. million In QX company segment, to aided regions revenue period. customer million QX

XX.X% in XX.X% XX.X% in 'XX. 'XX period. in to Cable quarter-over-quarter mix mentioned compared QX in XX% 'XX As improved QX compared reflecting higher gross QX earlier, and and XX.X% at QX margin margin gross Access QX QX this to 'XX, XX.X% 'XX in to in came software in a 'XX,

As in a discussed modest a reminder, higher had quarter chain last costs the half. supply in will we hardware cable the impact first

secured and Video XX.X% segment gross our cost business. up improved continue As greater expanding year-ago and the compared mix the QX in have to and the 'XX in our expected a within period. run margin recent category partially XX.X% our [Indiscernible] was inventory QX was half. SaaS impact be in and in to before software XX.X% 'XX to appliance second

convertible in million share 'XX compares and of translates year-over-year on contributions and invest services compared from and primarily increased cable loss $X.X X, $X.XX operating adjusted in in of $X.X Moving to a Cable second million record per in increase million debt increased million XX.X EBITDA price. million $XX.X Access for an compared of increase to of the to QX during of We from 'XX restricted was to year. in initiatives. million the we to growth X.X a marketing are loss to 'XX QX to QX QX income and shares a continue quarter average the 'XX, $X.X a increase compared year-over-year segments was bookings the both as sequential The is employee issued $XXX.X XX.X% deflecting to count a QX the QX shares for and million, million compensation were sales last of and adjusted based QX This million our was diluted of 'XX. in from The weighted primarily $XX.X the sequential employees. EPS 'XX increase QX share X.X% EPS This ended our 'XX. development stock, per and and and QX statement increase result in due down Adjusted dilution. issuance effect with QX $X.XX million XXX.X% average and revenue reflects QX Slide to weighted XXX.X million 'XX. an due for our research of $XX.X 'XX second QX in XXX.X quarter, access sequential X.X an in performance 'XX, $X.XX The expenses to of quarter million and in million $X.X million, $X.X $XX.X stock of share year, -- in EBITDA QX ESPP representing million at million stock Video. for and $XX compared a EBITDA stock

region double-digit operate annual quarter, in the we outstanding following sequential we saw During 'XX every in growth quarter. geographic an QX and bookings bookings

technology new demonstrating solutions. differentiated of order strong demand very our another report to pleased for bookings, robust are We

of of and We to million million $X received Turning at $XX.X $XXX.X $XX.X XX. sheet. Cable of plan, sequential cash from of The primarily purchase used attributable $XX.X to Access option both QX ended $XXX.X fixed cash and stock to generated end and primarily comprised balance employee million profits. through position million assets QX compared Slide QX increase and Segment million purchase XXXX. We is our million at operations, from liquidity $X.X million and Video stock the Net with of our in discuss 'XX now exercises. cash cash

The of improvements. year-over-year reflects at in days sequential collection of XX continued the XX QX the 'XX. of Our XX days QX increase reflects to at overall large the and timing days days decrease sales and the end QX certain difference outstanding end was receivables, compared

record the Our of days 'XX. At second at end inventory at increasing the $XXX.X million at end heavy and QX, of associated inventory the the at days QX, XX at for of of QX of end prepare the backlog revenue on days hand a was we XX of $XXX.X year the as end backlog. and compared end the deferred to with total end days shipments XX Reflecting QX, half compared our of to our QX was XX% QX and customers, commitments sequential entries deferred revenue cable increasing about and broadcast into new 'XX our end including period. backlog year-over-year the growth. video X-year revenue that XG and XX% This to 'XX streaming edge or reclamation rolling in and revenue a demand SaaS bandwidth deferred $XXX.X Note growing XX% growing at projects, a QX historically record of reflects XX% million converted from appliances, of for volume commitments. backlog gets large within million

is order business have of million of $XXX $XXX.million, on bookings. in the process previous initial CableOS us backlog last moved mentioned solid agreed cable for XXXX. million into of three $XX revenues contracts account, of with this approximately and remainder approximately contractually XXXX As through went calls, which purchase from a we X as incremental and very end into the future Taking included contracted $XXX was provides into At million, 'XX, therefore the foundation CableOS these QX total with our amount approximately customers. not our additional quarter Tier down

guidance will on Slide Now turn non-GAAP for XX. I to XXXX, our beginning

QX, will I and still While customer XXXX height our since COVID-XX of both for and year. our compared that, to global challenges QX the through segment unprecedented our the creates we cost exists, volatility related to Cable cable pandemic. are full pipeline Having now which XXXX. still chain recovered supply guidance situation, for guidance have uncertainty and production an challenges navigating said timing the review and activity substantially for

million of $XX operating XX.X% range range to Access gross million revenue range XX.X%; to to we to million; million. adjusted expenses $X.X $X.X currently of million the from to to QX, Cable in million; EBITDA from range margin $XX in For $XX.X the $XX expect

by from Cable For EBITDA operating $X.X range million. QX, to issues from we Gross to expect the of in to supply currently $XX to earlier. of XX% $XX expenses in to $XX to Access million million limited margin Adjusted XX%; million revenue million. the range chain million I upside range $X.X with mentioned $XX range the

customer impact well modest at change in growth There of still For margins by supply deployments to in in earnings our XX% cable million. over new we versus is and to guidance. related increase to of now is we million in this Cable April. our driven as growth million compared in X as reflects the no Gross guidance, fiber-to-the-home converged chain prior a expect existing a the Tier our XX%, strong margins gross range midpoint. of momentum flat prior to guidance versus At range full $XXX as the year call the revenue. $XX the our with guided $XXX customers revenue they Access what XXXX, midpoint This accelerate prior

We sales and prior these $XX.X primarily Most for expenses are $X.X marketing will gross an I Video $X Slide have now related an of expected costs of chain for supply initiatives QX XX, to been research to increase revenue margins. be between QX, EBITDA million at discuss increase increased at and levels the to guidance. the working million to hard million, our and year. and million, guidance expenses. of Adjusted development range $XX.X to due fiber-to-the-home in impact is guided contain the million $XX.X to full of our midpoint. prior Operating versus versus guidance within the $XX.X the segment million On increase

expect For $XX expenses XX% million, range $XX revenue gross range QX, Video million million. to $XX $X.X from in range $X.X to from of the to $XX to the EBITDA we XX%; million to of million, adjusted operating video to in range currently margin million

of Video from million. $XX we $XX expenses to gross million to to from of in expect million $XX to revenue in Video $XX $XX EBITDA adjusted million margin QX, million. range range Operating range range million; the XX%. For $XX XX% to to the

For expect million, At streaming of over in guidance, million versus margins. improved we million of rebounding due million, $X.X EBITDA expenses associated the $XXX $XXX our expanding in is XX%. $XXX revenue expected to revenues. this $XX.X increase the full prior QX XX.X% segment the to XXXX, this growth to expenses and increase This midpoint sales are million related guidance compared broadcast $X.X to SaaS $XXX of versus charts Gross total range presents for a the guidance, basis to XX of largely prior of at guidance, in the QX, mix the reflects with and XXXX range the to increase consolidated and year midpoint which to Video product of higher two due $XX company a to be now increase just between $XX.X our midpoint. reviewed. at an both the attributable to million. full prior million of year margins of midpoint. guidance improvement range sum At simply prior market the in mainly million demand the SaaS. Operating XX represents an we guidance is Adjusted Slide point guidance million

in range share, count in $XXX diluted of range range margin million; $XX.X to to million $XXX to to $X.X expect the $XX cash approximately range $XXX million share EBITDA expected million is Adjusted expenses from from million. to million end to per from million; QX to At $XX.X we gross of EPS the $X.XX weighted QX, XXX.X million. a to average to $X.XX For the $XXX operating to from range of revenue of XX.X%; range million. XX.X%

At margin For to million; million. million $XX expect in from average approximately to EBITDA million expenses to XX.X% $XX diluted range gross of $XXX cash of $XX.X range A $XXX million. EPS QX, count to million range million from of is range from end operating from the Adjusted $XX.X $X.XX. the to XX.X%; million. revenue to million. to QX, $XXX range the we range XXX.X $X.XX to share expected of to in weighted $XXX to

XXX.X and low million note prior XX.X%. the midpoint. to from the of And share, share of compared for XX%, come continued $XX.X raised saw to guidance, to margin guidance, $X.XX we million. have per For end this $XX.X range of $XXX to $X.XX the range to to the our due $XXX In on second total million $XXX our to count midpoint revenue weighted effective we in million. $XXX.X finally, of to rate tax the average now we guidance. points an increase in million. Please and of of execute expected is Adjusted million to XX% range of quarter, second to increase of the of year range strategic prior the a line our we continue guidance is high-end expenses with demand between positioning basis to for XX% a open quarter, end expect of cash priorities, everyone. diluted versus the annual at prior EPS million during the the approximately $XXX.X increase At previous updated X from businesses we the success. models growth for million versus and full Access million, strong before in at expectations to both it $XXX Access Video segment company final to Patrick questions. the thank This that, revenue an back at at we call over and from June Cable EBITDA of the I'll Gross million, range you, during remarks in Operating multiyear both you our and turn events. segments. And in operating for shared expectations our With to Video the year, represents up Investor an from now range midpoint. increase our Cable long-term with Streaming $X.X XX.X% midpoint guidance closing, and

Patrick Harshman

Okay. our Sanjay Thanks, mentioned Sanjay. strategic priorities. just

the remainder this for wrap those by let's of up So reviewing it priorities year.

volume additional market and new Tier list DOCSIS particularly business accelerated global a addressed customers, with Access our the to of fiber or CableOS's and expanding X growing Tier with new objectives converged Xs, capabilities. entering Cable deployments For operators, premises

continue profitability. Putting margin And industry coming subscriber to per it on that, up with experiences new the to customers Thank broadcast to infrastructure together, particularly value our questions. the and media now accelerating streaming enable customer for open all of opportunity for edge globally, let's growth create SaaS customer usage. of and leading delivering deliver our For the processing transformations shareholders. aim base revenue were superior Video and consistent and segment, our expansion, traditional objectives our and support. recurring all growth Capitalizing call your we the solutions to you for and

Operator

from [Operator first comes line James, is Simon from open. your Your Instructions] Leopold of question the Raymond line

Simon Leopold

you to I Great, thanks the we it taking expected was for just gross original sounded that your was pretty to of like gross start it with expectations? bit recollection and margin Both pretty was chain the quarter. get was and you supply last Could from margin first from than question. your want what were going in reported for of terms constraints a different better second meaningful this segments hit quarter, improvement. actually hard my reporting unpack

Patrick Harshman

so Sure. me Simon, Cable let start first. with

I good time. make Cable saw this we software think

they the expecting and with we chain were happen. when saw we mix software. did supply But impacts, some guided, of in Although It good guidance. we we -- came accordance a

that's improvement saw Cable the in the So margins. we

said gross Video we revenues software mix strong remarks. and guided, of terms mix good saw saw prepared we In margins what We my and SaaS there. improved of as margin in I

Simon Leopold

or your the staying was And being supply about, as sort thinking today stand it what's same where chain segment? with into And baked you how in we terms getting are by worse of of essentially before? constraints, supply the guidance chain the

Patrick Harshman

the guidance, of our impact, there remains in considered the Simon, in same. past whatever chain we supply So terms

Cable For year. the the at $XX.X so have costs the guided remained full are gross for we supply previously, is $XX.X year, midpoint. for same the the now, at We same the are whole margins exactly chain

Simon Leopold

for quarter. And what Could consider progress? you programs. related past, And opportunities you any of you have stimulus awards? new type they particular you the opportunity talked your government in these just a government as give programs? we assessment we've you Are that us update, what's than from seen out to stimulus longer look an coming about Have of

Patrick Harshman

may our that's contribution business that material stimulus There fiber-to-the-home-side, has particularly from have been behind I opportunities to pursuing projects we're have stimulus, that them. no Cable government being the think certainly government that the on said, But relevant.

it's today. not or but of we of revenue part it's the that pipeline. reporting part results But it's bookings not opportunity of the pipeline, the part are So revenue

Simon Leopold

that's guess I to that And is made. correct assumption. have I'm just I no want that decisions what my confirm trying impression to just and been confirm

Patrick Harshman

Decisions in what regard?

Simon Leopold

selections terms in and contracts. of operators the Well, signing making

Patrick Harshman

think varies. I it

varies. are some out I plenty of for we think we're for. think too in think opportunities there it Frankly, that there others. we're that late We time

give So still that of we complete -- can't they but statement, available competing an overall -- are plenty Simon, blanket we're certainly I opportunities a for. you

Simon Leopold

thank for Well, Okay. you very questions. much taking the

Patrick Harshman

Thank you.

Operator

next comes Jefferies. question George from from line of The the

is open. line Your

George Notter

Hi, impressed guys. Thanks number very quarter. much. the I bookings very was by this

and band confirm just flavor could the hoping in great. bookings business, second the big of each similar layer of I deeper said another go give video, wave with guess book-to-bill us the was think you be the of that would And that on on I you then I in front you side both across to was reclamation was I a for piece sides those of the business, if Thanks. nature could just also, assume just more bookings. But any you that narrative of us. can the out maybe C just the activity that of confirm

Patrick Harshman

piece Both I other confirm me let well. confirm both segments the and Well, has similar book-to-bill as George. Yes.

George Notter

was in some it there? more the And Got narrow Or have you operators base? give among then customer it. could different it side was many Xs among -- your broad Cable Access it that and Was you us biggest so Tier based of cable your -- on else anything

Patrick Harshman

George. order as on sides, from both existing orders based both benefited customers really new input It's Cable customers. as from Yes, we broad newer from strong well

to in his he say -- just to bookings remarks, U.S.. still based. side but would XG, XG been saw of there's activity was we Indeed, strong, also the confirmed video has geographies, I earlier, was on that strong some related was mentioned part date actually Cable broad So Sanjay the limited to the across and

be the incorrect So to it attribute XG. video to would exclusively strength

George Notter

it. Got

just guess, I to the kind to then, And helpful. follow question. prior that's Okay, on of

doing You updated ago? of are the just months fiber the And of X all prem it's talk of give a on stimulus, the of on piece versus that about that days? guys friend, wise out development Can these the the in us how development and solution? do the kind work there out are where you see opportunities you to lot some you product fiber, of yourself with there are aligning, kind

Patrick Harshman

And those we're customers to who some initial progress where it's larger customers the and with understanding focus greater time, focused or in in those me Well, whom our what initial clarify and Verizon, those the going add step after we're our converged labs starting deployed. or good the some say is into a of value with remind that a frankly, is at and think their be AT&T, take player, where any these progress is Telco And we and we the as back parts different deploying and the DOCSIS that fiber creates the same exclusively, historical I is real will making for let cases make of strategy DOCSIS not are of a And I network. or how mean, we're things believe we're I it's not evolving. Phase have real, we're let's who and their the just be of solution. initial fiber compelling, coming would different will subset say or use I both either It's that that deployments, customers proposing the or of -- better us. and operators same opportunity in value market testing.

further a to market. Media the forward splash and talked Just some Fiber fiber Cable late U.K and in kind call in And clarified being plans were home aggressive there coexistence about moving example, maybe serving kind of U.K., earnings the the that about for there where service. the of higher last talking on week, fiber they the of the in made customers Tier was new the end Virgin premium by of

Patrick Harshman

and is it's for I steer us picture think the we both us a and technologically a position becoming way that's helped that technology, the commercially. focus, sharper

fronts. making on we're So good progress both

I'd that, as thinking area. the customers say doing So customers large with George, small this the in we're encouraged we're quite strategic as our by work of well and

and obviously we're continue keep it, we invest on posted continue to -- progress. to our will you in So what we

George Notter

very you Thank Great. much.

Operator

line Next the from Co. of Koontz question from & Ryan Needham comes

open. is line Your

Ryan Koontz

Hi. Thanks for question. the

if a could bookings. prepared about remark on First clarification, I your

shippable the XX% typical next same that at But new commented are that in would well year. backlog of XX%, implying You that's characteristic still this is bookings your as in you're we the apply? surge with that case

Patrick Harshman

trend to Ryan, backlog deferred that revenue their months. of right, trend, converted XX% historical expect within XX of the on XX% next continue. That's the we And sort same gets to that's

George Notter

And their critical look are you. then now you thank wins, in in Tier deployment, where sit and and kind process trials, obviously those well, of that X of just set are are integration at the maybe buying sort eight involved very your of Perfect, customers that Could in strategic. path how toward balance of operations many where deployment thing? today -- field characterize, or

Patrick Harshman

today. say in Out really of volume have the who deployment discussed, we eight four I'd we've that

George Notter

Okay.

Patrick Harshman

completely for I'd and think various say pace stages let's a moving but various say call probably ultimately nobody to, those, in maturation. And say would Within is I like could other of safely they volume. we are startup. four the volume at of the kind I'd

George Notter

both. you Thank Helpful.

Patrick Harshman

All right. you. Thank

Operator

the question Campbell of Next [Operator from comes Instructions] from Northland Capital. Tim Savageaux line

line Your open. is

Tim Savageaux

next and about to virtualization bit if here saw with deployment Comcast growth a Comcast. say quarter I I I there on where you kind had of and mentioned a obviously fair particular. technology mean, of some the the want coincidence. existing talking know bit in afternoon, a they're around the congrats new about of topic good don't little fiber-to-the-home. pretty call. bookings customers. on interesting you gen versus that's Hi, Actually, to in their And did Virgin And things call follow-up accelerating

are And look you booking orders there. comment, a you at add guess, you a that And so, is, from a meaningful seeing look that, seeing acceleration as it there. like on new -- can you those comments, despite you're if or standpoint, meaningful did some does I

Xs, that some and bookings comments, to specific might of So, much deployment might beyond in four go accounted have regard you're And seeing a that seen any on into with pretty of volume last those strength contest. for have whether you the you -- then color those Tier quarter. mentioned, further few

Patrick Harshman

in think in but a of second I the in front I attribute have customers. step Sanjay, breakdown up would don’t me dominated the I the don't it bookings quarter. actually totally you’ve by I comment, if got wasn't and existing know

Tim. contributed customers materially, New

So I think equal number an about as orders healthy it's booking the from existing probably safest order inflow. think to balance new between customers and customer

Sanjay Kalra

between That’s and existing. a agree. I mix new decent

Patrick Harshman

early, is able symmetric that thinking going networks not XX to is science importance is I worldwide ago in in really conference. about been the gigabit about and who our in just mean, And to the front earliest the with through a very just leaders broadband that who the really over generation the like. their about about Xyears a on, I'm competition next this coming, some what out going increased talk gratified Cable to just put is And about, broadband, the began services. competing their ultimately next We're view were This the leading among at and those greatest us topic. space were operators next symmetric but ensuring decade. the symmetric not multi talking looks is Yes. who that science of be the talking they've And talking beyond the to services CES think were -- months, not fiction I This thinking. symmetric I competitive, have XXG, services. about operators [indiscernible] openly fiber hear generation next from maybe XX bigger This topic are here, think you industry relevant gigabit very thinking fiction of anymore. XX selected anymore. This

blend you together more demand from if of of perspective, that advanced of perhaps in will, seeing think this really the next about phase kind Tim, as focus of it's DAA there's us. now DOCSIS, color a as .. news we're So -- had which is and If news there competition that for the into consumer help? is, with news next DOCSIS not it. coming capabilities discussion fiber that open mix a I the of meeting you element And to the these to attractive virtualized the Does extent industry.

Tim Savageaux

I'll very it. Yes, it. appreciate much pass Thanks much.

Patrick Harshman

Okay. you. thank All right. Well,

Operator

of from Colliers. from Frankel Steven comes line the question Next

is open. line Your

Steven Frankel

to Good into business, well. not relationship video but afternoon. of part offerings customers, just revenue was going? build recurring Could be how some SaaS those us opportunity mission around as you on the hardware a your the might that Patrick sell in update maybe spectrum, reallocation, there an some of

Patrick Harshman

as have But that work capabilities work weight the with satellites whole if reallocate would be some to from fun as certainly, space. it strengthening still do the think everybody summarize move operators media both we're had off and it, network I between opportunity, the of we perspective, capability discussions are It pretty with step mix, a or XG fact, disproportionate streaming making I it's an understand more that continues exciting to an in who mean, more opportunity -- to I the SaaS have quite part what in But might to to better fairly well. is pleased to we're it. is progress be and understanding doing but that is entirely fiber, I we Harmonic Both brand a have party. overall, SaaS I say well taking And we're attractive More generally, to an to on. Steve. opportunity. back, really attractive take continuing is globe wouldn't companies traditional around to of that I involved and and thing on says, put think bringing it stuff are in starting our the those

Steven Frankel

engagement element the over you and time in the is Are ramps? last over customer getting initial the how these typical And larger deal SaaS of growing comes size deal sizes ad or the changed year? sizes as that

Patrick Harshman

of opportunity call brand that of tail. you And time includes On On what part our same of is as end At job a Well, I'd kind say we've bigger. think about it's an there's of a the better tail. generation pipeline we're become I worldwide, had stronger growing doing addressing of a long under long content definitely one where of that lot above. the aggregate than the the hand, though deals before. bigger spectrum the all when

of some well of Thinking impressive the force Both the success sales of investments but to smaller. some the far about along, we're stuff in too of as trying larger in mentioned have maturation direct is engagements I'd of with for -- So the on spectrum, spectrum. we what particularly the of more stuff. the through a America. Maybe the Sanjay the sales, ends we're development they're been bigger and deals particular, say ad seeing channel that development that new both after has some most of ends both that so go as North far maturation and

uptick mature large about engagements as as longer advertising So ago. have model media the that with moment larger there where seeing the other with a that increasingly as we’re and perhaps I ones companies, more well who ad traction we're getting mentioned optimistic tail more some hence encouraging models very targeted

Steven Frankel

it's into kind more launched once in they reputation get do have that velocity strong now you visibility then Great. the the a on And into any launch those starting market, of that of such CableOS, market haven't to have mature, and you started? their

Patrick Harshman

large their but improving. a work has progress, improving, it's X, them kind it's environment, et Tier think of own in still operating It's one particularly unique every of I cetera. still paradigms,

no as better, is X we're XX more getting we turnout. there a sophisticated. day, turnkey, think being such Tier said, I thing getting So, That are

lab I teams integration, think our services professional are service, field excellent.

all it's be are part to okay. I these knowhow, it's But and technology, that's that's the bringing mean, still only clear, a heavy big and now. think the not us serving well. value the customers. I -- of to It's broadband we're party lifting we're the but

et the the It is I cetera. and our service fully in show I complete numbers. the that sure progress consumers, cetera, taking sense. are our to everything they’re think But that our make So checking mean, seeing customers good et that triple you're makes seeing fact carefully, fact up robust, it we're

Steven Frankel

Tremendous quarter. Great.

forward look half So congratulations, the and to back the I year. of

Patrick Harshman

All right. you Steve. appreciate thank very We it. much, Well,

Operator

to further Harshman no back this at question Showing to for closing conference remarks. I turn time, CEO the like Patrick would

Patrick Harshman

by a with communicate had make strong. we've look today. market the to the progress executing us you The our thank We're joining We've to outlook plan business. We're we quarter. for strong excited forward Well, We're continue you. about continuing all and is conditions to Okay. and encouraged discussed.

So we with a good forward you time. then, talking Until look to all day. next have

Sanjay Kalra

Bye. all. you Thank Okay.

Operator

Thank today's Listen and this concludes a call. conference wonderful participation, day. you have for gentlemen, your

disconnect. You may all

Harmonic (HLIT) 3 Aug 212021 Q2 Earnings call transcript