HLIT - Earnings call transcript Q3 2024

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Operator

Welcome to the Third Quarter 2024 Harmonic Earnings Conference Call. My name is Josh, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to David Hanover, Investor Relations. David, you may begin.

David Hanover

Thank you, operator. you Financial us Results thank Third for and XXXX Quarter Conference everyone, for today joining Harmonic's Hello, Call. Officer. With President me Financial and Ben-Natan, CEO; and today Walter Jankovic, are Nimrod Chief

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

X. Slide to turning Now

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

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

Nimrod Ben-Natan

call. Thanks, our quarter welcome David, everyone to earnings third and

record exceeded guidance. total Today, as Video our of as EBITDA, business revenue demonstrated included well X. revenues, team's record and QX Broadband to our our Turning which plans. we execution strong These adjusted Slide reported and results that segment

Our with on of broadband our DOCSIS and differentiation I and shortly expand stronger are announcement reinforcing X.X recent expanding ever, technology, especially leadership will Unified Unified. product competitive market than position. the

returned And successfully and appliance opportunities. are advancing through our focused Video profitability larger-scale of rightsizing X and have actions business revenue We SaaS to we the pipeline new Tier execution. streaming on

Finally, date, we are based are our progress on guidance detail. our guidance revenue raising guidance. EBITDA reaffirming this we will XXXX In for guidance our to Broadband discuss this in year our full and reaffirming Video, Walter business. more considerable XXXX EBITDA also

Turning to XXX, at of Slide revenue global XX The reached over #X XX%, segment. the solution both to and on expectations. sequential cable our deploying number our increase million, original our DOCSIS globally, key Segment representing million operation in We of as This is of customers exceeding had XX% approximately quarter an XX% effectively which executed year-over-year. XX% $XXX.X respectively, year-over-year initiatives. market. global in our cOS represents increases of Broadband strong and we came growth modems

increasing in highlights share market on modernized base with securing customer our This QX, X growth. diversify and expand to new focus continued demand solutions continued network customers. the our reflects We business and cable for

broadband we of customer our Unified of continues availability expect customer of to driver accelerated is pipeline expand, to diversification broader technology and success. forward. The engagements to operators build Our new and acquisition cable positive qualified going key this momentum all

can of important Access Rogers the cOS growth to second CMTS. to fiber. were be Comcast on over multi-year see ramp Additionally, We deploy contributor anticipate Rogers, and an virtual our in begin our Comcast opportunity. Switching based from and XXXX Solution to this deployment will we announcement recent half pleased the will to where up

tribes a record pure fiber Harmonic fiber our closed with momentum earnings partnered gain new deals for QX, hybrid existing Ready, the in by has and with This underserved our a since strategy. fiber number company bridge U.S. Tribal digital We last Also, our solutions. aims collaboration leveraging high-density dedicated customers to with to and for the to empowering platform to of broadband to continued deals. divide bring native nationwide OLT fiber-to-the-home call, we both and tribal communities high-speed In communities cOS connectivity

to make which strategy, continued fiber fiber Open and We more ONU operators. also our affordable ecosystems more traditional gain vendor-locked traction disrupts for with

successful value activities customer fiber stronger resonating optical unit brief update with related a collaborating several a our In helping to is Also, are addition on to with customers. us partners we vendors growing are half network BEAD. dozen demonstrations, These proposition qualify ONU interoperability that third-party of provide to to drive onsite devices. number a

with to the requirements. customers deliveries put BEAD have have pursuing provide our aligned product according funding We place U.S. to OLT BABA in plans in and remote XXXX

DOCSIS to now Turning X.X.

into a continued Our has market fourth a with deployments steady leadership at and full-duplex which execution remains and trend node continuing momentum successful quarter. the pace, shipments strong,

nodes. limited now the by Following Broadcom, cable a significant providers, advantage a Unified leveraging our broadband full-duplex is SCTE small scale successful Charter all X.X open cOS positive flexible for core catalyst the for Making TechExpo, our operators and our the and to DOCSIS no joint for X.X at a technology group recent for to longer industry is DOCSIS operators, uniquely of Comcast, available Unified significant of announcement all important but deployments business. and is Harmonic,

or boosting of flexibility our Harmonic's position. strategic and increasing combination Our to and confidently of with upgrades enhances plan to and leadership technology approaches DOCSIS early enables This Unified operators capabilities experience all sizes specification reliability ago, networks, speeds their extended technology a to the weeks received already with dozen new requests announcement deployment just discuss full-duplex evaluate we've All the strategies. for more spectrum of Unified. Since Unified than with and supported options, both either

world strategies. the during plan be Harmonic represents the for Day, discussed recent around now customers While to technology we mid as and Unified prospects supporting transition short-term critical Analyst cable there a point long-term that inflection our their opportunity will challenges

see Specifically, expand new well both front-end his integration Walter as XXXX, as and share development. we this ahead new prepared movement in market on ecosystem opportunities, RF to due challenges timing new gain will Unified deployment begin significant to remarks. as requirements we look to and

about are summary, Amplifiers, the Broadband announcement demand customer expected early we this to excited of accelerate market. In to recent and plan which executed We XXXX time are Unified we to to Unified enhance demonstrated that year. our overall to serve also business Sercomm's our rapidly Smart presented ecosystem scale ability as the

further continued growth We technology we extended positioning leadership, competitive sustained ourselves share advantage. market and gain our for to as

our XOS opportunities were factor space, a optimization key cooling secured while a margin. X actions, segment was benefits growing and to our high Slide# million EBITDA with for Data up tools during compared grow and Video included increase growth live we of for production providers. In QX IBC revenue solutions to XX.X% broadcast premium us Tier demand segment achieving Ad opportunities our lower-tier significant Server-Side video for XXXX automating improving presentation SaaS center existing relationships our This XXXX our million, aligns streaming capacity service new revenue of greater We showcased exceeded This segment with monetization. and the Amsterdam was captions, to in with value-add results monetization, we also discussion to X of QX, our customers In year Tier the over contribute to of where will $XX.X and a offer Turning events, our for financial XX% continue guidance. similar and insertion a multiple $XX.X project refresh while X streaming service to these with segment. Video end and see ad XX% as these ago. events, in profitability opportunities sports sports year. their enable our you, customers business, that, These for Walter, enabling live strong we trialed a to Sequentially, our of which AI-based revenue automated returned with and the our successfully efficiencies continues, in our solution. Driven outlook. million, costly beyond. pipeline ideal media advertisement consistently and We've delivering platform in-stream new power Insertion SaaS as highlights, the using deeper Total $XX.X power, without to revenue space solution increased this was and now adjusted provider live year with service quality. to saving execution new over than our XOS labor. With latest pipeline rightsizing for up such languages, decision. and by largest expanding processor, through the services, of

Walter Jankovic

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

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

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

guidance and included Video. Our record that the both guidance. we profitability exceeded our also revenue third our quarter revenue was Broadband Further, quarter. Broadband for for revenue a record results and company total surpassed

highlights In call range. I'll of and end out EBITDA third some overall than terms guidance Slide company-adjusted top of on EPS all our were our X. here of profitability, higher our the quarter

of reported XX% of $XXX.X and For quarter, quarter, backlog for leaving deferred end, quarter of $X.XX, was we million, the a of total million, well a $XXX.X bookings us our growth. book-to-bill increase At revenue X.X. and placed quarter over continued million, EPS revenue $XXX.X

of XXXX and and want financials guidance, quarter year mention QX to highlights third our our guidance. review we Before provide detailed some I full

Regarding to to are of million prior tightening reaffirming Broadband, $XXX FY million. range we the revenue $XXX our and 'XX midpoint the guidance

to on As guidance, as our our the continue year. information, closely customer revenue our commitments latest do of information. At just available prior as is midpoint call, expect earnings 'XX year-to-date increase we year guidance to revenue to over latest the Broadband FY we this forecasts, so evaluate results based XX% each we well quarter, and our

our Broadband Additionally, forecast. outlook third results quarter and 'XX our EBITDA fourth due our have raised for FY quarter, Broadband to we the EBITDA

Broadband going our discuss outlook Before to like I'd for XXXX revenue. further,

DOCSIS earlier, in revenue customers seeing plans, out Hence, be headwind we mentioned and including timing X.X recent the recent Unified revenue are related due we updates, coming will short-term around outlook market their Broadband demand dependency, the growth ecosystem Nimrod the XXXX. a creating to our deployment months. revisiting some customer pushing thus XXXX As developments Broadband in

we deployment to delays for create mainly However, potential and timing XXXX these future. positive a shift, the us in this expect a tailwind is

previously most midpoint. FDX communicated. fiber in the slightly to completed X.X including revenue guidance Unified range we this refining Video XXXX regards now confidence position of a business, acceleration nodes lower as with prior Video, well factors, guidance, the market-leading and Our are our stems from technology, this we with experience our DOCSIS, actions of the early have rest-of-market expected and our still here that within Based restructuring on analysis growth. With growth we recent several as

midpoint. the at Video to our continue related Specifically EBITDA, guidance to we maintain prior

of we a guidance, Broadband midpoint company EBITDA and year full As the and at raising result XXXX guidance. Video EPS overall the are of

was million back financial XX% of QX up million, this $XXX.X call. we to our the to year. top This results quarter's Slide on was earnings last on Total above end range provided a Turning record the guidance compared revenue last $XXX.X X.

Total be revenue of customers million, closely the quarter. for Looking and XX% customer included than the margin $XX.X for gross XX.X% basis year XOS segment 'XX, of and basis revenue. range Broadband XX% mix with deal SaaS and In quarter. was revenue year, again over margin X,XXX XX% to XX.X% up QX mainly points high our Comcast the points for product gross product revenue, we our revenue margin. end at a points XX.X% QX above year guidance. coupled X was with revenue reflecting million, growth company total and over gross revenue XX.X% XX better-than-expected SaaS an was representing $XX.X and by wins. In representing 'XX, more streaming, representing total XX% as Video which our of XXX to continues points of gross Video sequentially, and cost live million, revenue over up year up 'XX, guidance third had new over Video, sequentially, total of for year, of sports year the Broadband. XXX guidance reductions. XX% QX Charter also was increase up above in to quarter, QX Video previous as favorable year, segment and the large-scale representing greater year basis well quarter, SaaS expansions, Video mix. due basis of in $XXX.X due driven appliance above margin revenue was was QX

our loss the QX on of down 'XX. million year. $X year into approximately guidance, operating income 'XX all exchange in Moving In quarter, had that an unrealized QX of was balances million $X $XX.X $XX.X This QX expenses 'XX above translated of XXX.X we of were both for Video. 'XX diluted statement in down Slide don't and expense/income $X.XX $XX.X over QX of for intercompany foreign the with million, line to QX also P&L, X. XXX.X noncash expect $X.XX QX comprised $X.XX with per our of from EBITDA the count short adjusted a our and quarter We third 'XX and we ended result in compared a This in is the EPS share to million, term. calculated share EBITDA. Adjusted and also as of million settle other in reflected X.X% from 'XX. weighted million QX per average compared XXXX 'XX Broadband million, share, the

to order strong QX were million. $XXX.X book. Turning the bookings at

and was QX compared X.X 'XX quarter the for X.X ratio QX book-to-bill the earlier, mentioned in X.X in to 'XX. I As

was The order book-to-bill third ratio to business. in lead X.X times decreasing Broadband due quarter's our

earnings in forecasts, base lead prior in orders larger secure with customer a working shorter As committed call, with we've on customers our continued mentioned to times. our resulting supply

As approach we've benchmark the our time, historical expect stated and normalize greater X. previously, book-to-bill than of ratio over to we

million. cash million, Slide sheet costs quarter cash from QX, to we to In the The cash The in on related We cash cash was QX the with excludes operations amount restricted was no $XX.X cash higher and of million. made $X.X to in cash of attributable This $X.X mainly net ended of free XX. million quarter. million. $X.X net during our repurchases. in equivalents income the QX, Turning share $X.X balance change positive flow of quarter-over-quarter in restructuring 'XX

again and We to increase balance expect projected timing our on based cash in QX material collections of receipts.

sales sequential and both outstanding. 'XX, XX the days XX, end The 'XX accounts due to of to timing increase QX in the 'XX. and QX was QX. QX sales in was of compared receivable At Turning DSO to

of to days We sales was million to inventory XXX $XX.X of increase to our decreased XXX days at Our at Inventory shorten and continued shipment, inventory strong between due hand end on of 'XX, at and compared in end in in the end the the the quarter, 'XX. days XX of inventory QX 'XX QX. we QX as QX. do to customer and expect receipt the QX

terms in strong when we capital as the past strategically in to meet we've In done will of invest allocation, appropriate, demand. building inventory

$XXX a December revolving closed liquidity, in $XX credit million and loan. draw million delayed we million a included Regarding credit XXXX, X-year a facility term $XXX that line

As million down of today, we have drawn $XXX on this credit facility.

repurchase not did half our with approved of any million that stock the of repurchase of million $XXX we earlier, mentioned purchase our quarter. As in our common To of during $XX the have XXXX. million under program we program, date, $XX under first the repurchased

corporate of on we've stock said conditions, and needs, factors, As timing the market any requirements. amount previously, depend of of will the regulatory repurchases a including price and common variety stock, Harmonic's

by manage $XXX less sheet opportunistically as our plan less ability of our repurchase earnings Xx around prior total execute that growth long-term and Given can million plans. Also, of the end we revenue maintaining our forward. of our mentioned continue strong without and we or calls, and $XXX.X At available on leverage shares to resources, net we balance to no QX, going liquidity sheet backlog than prudently believe deferred liquidity to balance was million. impacting overall

the SaaS XX within broadband demonstrate request our deferred providing our commitments. demand for to for months. we're large Our and customer continues and of revenue and strong shipments backlog growing the customers products has Video backlog next of from services dates XX% seeing Around

of These a to year-to-date. fiscal Video costs nearly on strategy, market profitable scalable centered growth achieve We align be restructuring-related cost To business implemented call business. operations, severance savings as recorded during its with been restructuring structure. opportunities, the go-forward of all has which currently we its QX on be and optimizing year, program are will previously million completed. expect XXXX focusing cost earnings our stated, discussed As by as go-forward this in of strategy, streamlining Harmonic's to this total $XX.X driving part now initiatives our last as for

expect annualized million let's FY savings now strategy. With with savings basis actions review align business actions These 'XX. to that, approximately quarter, achieve from we approximately these stated, other previously Slide million the As better our necessary in $XX were fourth FY in $XX and in and to guidance an in on 'XX beginning our non-GAAP Video XX. the go-forward on for

to million. we due EBITDA between product revenue XX% QX, margins million, between $XXX For million, XX% $XX deliver and to between $XX Broadband expect $XXX to million $XX gross mix, profit million to adjusted to to million between $XX gross

Broadband $XXX million, expect XX.X% between XX.X%, to the and to million year gross margins to million. to gross we $XXX XXXX, $XXX For $XXX between between million between EBITDA adjusted revenue full million $XXX million, profit $XXX

record expect reach in levels For of the QX due of the year. in momentum to to Broadband, we've revenue we again the seeing sales expected second half been

For our QX, million, Video $X million. range million the margin million gross in million, to range we to in gross expect XX%, from million of to to adjusted revenue $XX in $XX and the $XX $X of range in of segment XX% $XX to EBITDA the range profit

$X we gross For and $XXX year, the adjusted Video million between million million, $XXX to $XXX million, margins between EBITDA between to XX.X%, to full to million. $XXX revenue profit gross million XX.X% to range expect $X from

Turning to Slide XX.

$X.XX. million $XX million, the to expect million, weighted profit range of fourth the gross we $X.XX to range the EPS company to EBITDA to XXX.X of $XXX to range from revenue a $XXX million count average For of share and diluted XX.X%, $XX in to $XXX million, from million, from adjusted margin XXXX, $XXX to range in range million to total quarter of gross XX.X%

for that with depicted see displayed will our XXXX, quarter reflect quarter here. In our in earnings surpassed our us and to 'XX enabled read line I the are of This believe by EPS achieve results release, on your continues here line so to results than For year well-positioned fourth guidance third also consistent at we've let future time, guidance expect EBITDA, this included that year-to-date segment rather press as respecting results and discussed guidance. year The full here, all the it this We FY we the made I've already our growth. results plan. year XXXX revenue, everyone convenience executing in detail. that full strong Broadband original progress read be summary, our year our to full in is listeners' substantial

we've with addition, before actions been QX. Thank the believe your remarks we that's this the you, remain everyone, for attention profitable up the to restructuring In I'll in questions. turn open taken for made call and And now today. in back Nimrod final progress it for segment Video, will we

Nimrod Ben-Natan

closing, our strong delivered both Thanks, Harmonic results Walter. execution Broadband solutions quarter, With which exceeding In of our business well expectations. our Video and total record positioned growth. another future and continued revenue we for plans, and strong market-leading included company remain

now call for up questions. the open Let's

Operator

Our first Instructions] question with Ryan Needham Koontz & comes [Operator Company. from

Ryan Koontz

nice great Congrats product shifting in as year? have in driving can might you that The you can And any the provide have been quarter, you and you in that color that the September higher upside primarily on Broadband later quarter. the expected timing on margins? was explain, can mix,

Walter Jankovic

Ryan, Walter. Thanks for the it's question.

delivery achieved to full guidance, our today, than ship that for just the with timing, set higher out noted our as based to Broadband. guidance reaffirmed capability obviously, midpoint terms to So QX, And in we of product we we've customers. year expectation you've at and first the of regards on all, was

it looking question, had So To were stronger just second on maintaining Broadband quarter QX half regards for as ago, specifically second guidance. product your the a little year shift, we at full the in to we with the QX, on this mix. is seen when a a

the our in product you're mix gross of seeing So margin the hence slightly, and certainly shifted QX. in improvement terms margins

Ryan Koontz

a If I could please. do follow-up,

of of the you Tier which provide Comcast, some you your coming Americas color X a like deployment excluding customer Tier terms all obviously was Looks mode? have what Americas' moving the can strong commentary growth changed, In substantially growth the segment. in deployments, your can on characterization is those into Any around of mode? out make of how of Xs

Nimrod Ben-Natan

specific business the Comcast customers. indicated Well, in with we Charter cannot of opening and percentage We the mention remarks. both

market logos and customers, is other As in segment. expectation pipeline and we momentum our of indicated will quarter and that far beyond. as won new We a more this this continue certainly the of growing new number there into that quarter, customers that fourth

Ryan Koontz

your evaluate like some And Unified. you color customers Broadband further 'XX? in growth around of be on provide any as stalling Great. there sounds It could can comments

Walter Jankovic

that's correct, Yes, Ryan.

Unified on commented provide for terms In Nimrod mentioned for this stage anything ranges it's the as us of for growth in next 'XX, transition, remarks of prepared at premature I the in FY specific and year. terms to

transition, However, terms on we're indicator based demand from next on seeing the that's recently, customer of Unified the in based what year.

point, And provide to looking We're working bring firm now we're and going at so customers not a this that as plans with work or to to set and various a prepared is what terms their budgets business like, at number obviously, them year. next year they of for look in for their together XXXX. range next scenarios with for right

Ryan Koontz

Okay.

be terms of a versus multiple So quarters there go in I Walter, of could for that previous? reevaluation mode, customers of it larger some deployment into plans impact assume, these their

Walter Jankovic

timing is see all terms We Yes. in could timing. a of This expectations. delay

to As is market the gain node opportunity positive in to terms the Nimrod that's long Unified move And think point prepared standpoint, very the more the mentioned strong share mid this even actually leadership remarks, a term. the from to at in I the us of level. for

down their detail timing, that therefore, plans, through And about expectation next sit us 'XX. we more of cautious see think for on the go their reconsider we working at their terms year, short deployment and be that's potential are we being look we plans. I in as FY challenge a in we'll term, customers customers as for as the with deployment and

Nimrod Ben-Natan

have, That's one, the move as upgrade do stronger. urgency to factors: as think been to the competitive can. network one that important we thing. will it's think possible has environment that they I the forward everything for X they number add they to In customers never important And quickly

thing Unified is plus I duplex ever, competitively even than mentioned feel the that, full we're Unified opening we, stronger stronger the market. has as would the the spectrum, full other and duplex the extended we say, than The very in and that I remarks, leading with because in

with So we comfortable feel At very certainly same as said, see being the that time, delayed. we that. somewhat we

Operator

Frankel Our with next from question comes Rosenblatt Securities. Steven

Steven Frankel

I'll the questions largest at when take will been, the really year, another same of other big your last get crack question. If has somebody over than one customers we step back the X going.

down when talk Unified customers availability you that other implying been notion potentially you get lack of this or parts? in the are caution is of XXXX, the So that solutions run to have availability about of going this everybody, because growth that able as may anxious not be Unified of around the caution around fast affects slowing the to

Nimrod Ben-Natan

talked ecosystem combination of we I a think be RF a about if two. it's requirements, new the as And front-end. Unified as integration So to specific, well

can So to asking would Unified. many think to customers them what if deal when consider it the of go details in previously the could they now and had about we the not, them get for making, you even Unified, a take are that of new

the requests dozen for a delay. causing we itself by got the that. that want This that is is at at want look to They to the of They technology. economics evaluation. look So

second part that think that's of I mentioned. that I So the

Steven Frankel

DOCSIS group time are related seemed implying with at had shift you we're you that which also on factor, then first? what on to a for And to Okay. X.X be of before, the that seeing X.X people force a rather doing go full a than content maybe it customers was seemed same

Nimrod Ben-Natan

exactly to Until community limited right. of Unified operators. the was That's X ago, weeks literally a small

them. extended with I for to desperate of to Now cable did were them because Unified, that DOCSIS sidelines historically, not economy of And for everybody, it's industry modems to certainly, cable is liked were they they everybody's X.X well, they even duplex, the some But something. enjoying known of and have scale true, all, is the everybody. There to X Unified the -- solved do way, and is that of was for them available undecided. were becoming there the the that available problem using. by some considering That's -- also on always full for they are spectrum, specification say using. technology access that When they

group didn't there do definitely well, what that of So are we is really it the a saying, to or doing that either have. real-time this were now Unified? operators is down of anything that mean discussions X.X And do path does

Operator

Northland Tim Savageaux next Our question comes from with Capital Markets.

Timothy Savageaux

stay to Want on that topic.

longer I in last guess accelerate think to case. no gather from quarter expectation revenues I revenues the is, 'XX? for rates talked 'XX, Broadband And decline you that's the about growth had 'XX question into I Broadband my could

Walter Jankovic

prior we 'XX FY right we exceeding had It's earnings terms comments midpoint the XX%. of longer which had and is now 'XX, the Tim. that accelerating that, in yes, take With based on Walter. rate Broadband during these on earnings the the at growth in commented no to that call growth regards I'll slides of that applies in So calls, further

out this the described afternoon customer situation in seen that terms we've in because Unified slides So that taken the of we've as of technology demands. of of what as the terms well we've

type FY we're 'XX. guidance is FY right I us today now be is expect too of to give in So any to reviewing that thing of point EPS could at at But FY and around and say the customers in next like conservative revenue months type premature this guidance modeling just your assess conservative, conservative terms we of conservative scenarios, to most I'll 'XX above that earlier very to 'XX whole question, most provide we're premature guidance in based company for that for EPS it with customers. for a still it FY very of to the scenarios, couple on for But we the terms our mentioned where on what plans It's look the specific prior the looking in response number any at. doing with as some terms only the as that scenario of total of 'XX our the looking it's on midpoint. is based some range of

Timothy Savageaux

in a summarize. on pretty this growth I I And case And routers, margin view anomalous relevant to would if for especially are maybe Well, with that year, those last significant QX? for exiting uptick about to margins outlook the guidance, very the EPS that gross XXs envisions the Okay. there may assume Broadband guess? the a driving margin scenario, that this gross headend is and Would is high that as QX how quarter on worst XXs. in comment expect in side, strong other into that any drivers, a describe you or you I return after Broadband.

Walter Jankovic

Yes.

QX, premature product drives what comment the regards It's on can provide margin. cOS margins. For Broadband up due to that's the the to With too mix, specifically FY QX, I to 'XX, in any equate more the terms what customer of around to of 'XX. for that's the specific we've in the mix and at guidance going FY gross to to all got look considering mix product margins,

Nimrod Ben-Natan

that at unique we something stay is level. itself don't uptick expect QX, the to to But

Walter Jankovic

exactly. Yes,

Timothy Savageaux

Last one for me.

like that higher the X at the diversification down it's than short ramp would going this as that something Broadband you looking In in guys that you second excess And perhaps perspective. expected? of in customers" the been sequentially but earlier dollar I the you put it your right just making "other XX%, at terms seems expected seems an you're which like are in is the way. these term, from with guys year. of I'm But know your top business, the something Is absolute of half, opposite the sure business, contributing look I'm it this way.

Walter Jankovic

the start last so First said for going guidance quarter, top our we down yes, expectation quarter of and was we significant when would Tim, we then that coming of all, this specifically it time. provided see over be and had X our call, to the

going I'm was to not specific. not it So confirm unexpected.

at looking You've done some math here, just Broadband.

metrics we customers. total terms top X the company the got of that here in You've for quoted

that So already. you metric have

customers, of highlighted picking over Nimrod our of number wins in that QX, or earlier And so, didn't quarter in momentum terms isn't it of had non-top-X the quarter market up wins. really customer we anything in that's expect. And we the of terms rest

customers expect terms we for expectations or quarter. non-top-X forward, rest moving of increase in world the In of the revenue to the fourth

Operator

James. Simon Raymond Our comes from with next question Leopold

Simon Leopold

Yes.

Just terms and What you implied in quarter. on expectations customer then besides do Tim's you've Charter? are maybe out concentration. term, as How think Charter concentration for And of the customers? quarter? to see you in your I for this customers for the for assuming the other longer to fourth the you up Comcast scenarios question are Comcast and what other follow disclosed specifically mix in specifically look what's So

Walter Jankovic

Yes, certainly, Simon.

other So is the customers definitely our That X in QX, growing. expectation less, that top of are the QX. for the in non-top-X that will be concentration expectation is

metric will we said forward, the therefore calls, on in all still top world X as of look I've we're continue revenue as rest of on the the growing compared and prior and we rest number the As customers concentration market. reduce customers terms of to obviously, and of XXXX, to reassessing the the now of see

no than have forward. that It's previously. is had expectation we expectation an the different So going we

However, we're to customer through still mix. rolling at our look overall XXXX

Simon Leopold

And like now things amplifiers a one I I'm guess the cable I are shipping. of full by the of at delays is, to Unified, think show, the it little due the in puzzled bit terms duplex sounded

waiting and a is duplex Comcast assumption, is this basically wondering if assume, I Full because available. I'm that full safe So unencumbered for ahead it had moving duplex. is now been

of that clarification to of be me they get I'm to delay, shouldn't just part trying idea. the around sounds bit little that So it a and

Nimrod Ben-Natan

comment can in say, had the of amplifiers. indicated markets Comcast. last we And dependency far enough that first quarter on we the as not is 'XX, amplifiers. guys question we on you called this part What have a fiber-deep we is of require that do that 'XX into what's as and specifically there certainly So cannot and the

maturity point we but go amplifiers. on what said that we we we and cannot As in at say of are, some we beyond and comment we FDX level of dependent before, that that, again, of are availability amplifiers, and availability can amplifiers,

Simon Leopold

just customers. segment then hesitancy that to come some of to factors back That briefly. group by down the by some that segment weighed And have macro been caused to Okay. to seems try Video

had. the behavior and you in pipeline can us customer how all if I Just of line update some seeing you're give that on That's business.

Nimrod Ben-Natan

change. There is say, I material would no,

existing aging strategy as that quality, growing totally refresh more refresh, right is large we're is being like whether segment on our streaming side, power, we we think for definitely I video think now. where it's Tier I said, focusing our where challenged. And opportunities. after agree we sometimes the things at and are This going, get I largest is the opportunities with you opportunities space up a on on fair equipment X is that. And share our and that.

Operator

with [Operator George Instructions] comes Our Notter question from Jefferies. next

George Notter

as here was When said, was exactly You the challenges of ecosystem what about? say transition. ecosystem part Unified well think, issue you the as challenges, that I

Nimrod Ben-Natan

-- in at I can is to example ship amplifiers. our deploy amplifiers. said we nodes on just on some and will point, point X dependency was we So and time last again, sometime that dependent FDX 'XX, gave We and the and on feedback that will be be, we a

is as something understand this you can ecosystem dependency. So

George Notter

Okay. of that the not? integration an or Is the assume issue? back-office product And cable cOS ecosystem that is networks, comment of with still I part operator

Nimrod Ben-Natan

really. Not

Operator

to to remarks. turn would Thank for the over Ben-Natan call you. like Nimrod I closing now any back

Nimrod Ben-Natan

We you to Have continued our forward joining good call. in a for look interest in all day. Thank progress appreciate and you your updating on the future. Harmonic the

Operator

for Thank conference. you the concludes This you. participation. Thank your

now You may disconnect.

Harmonic (HLIT) 28 Oct 242024 Q3 Earnings call transcript