Harmonic (HLIT) Q1 2026 earnings summary

Executive summary

• Q1 2026 delivered 43% year-over-year broadband revenue growth to $121.7 million, driven by strong appliance, integration, SaaS, and service sales.

• Rest-of-Market revenue surged 78% year-over-year, now representing 42% of total revenue.

• The company is divesting its Video business, with the sale expected to close in Q2 2026, positioning as a pure-play broadband provider.

• Full-year 2026 broadband revenue outlook raised to $475–$495 million, reflecting robust demand and improved visibility.

• Continued investment in technology innovation, customer diversification, and AI-powered solutions.

Financial highlights

• Q1 broadband revenue was $121.7 million, up 43% year-over-year and 24% sequentially.

• Operating profit reached $26.0 million (non-GAAP), up 115% year-over-year; GAAP operating profit was $20.4 million.

• EPS was $0.17 (non-GAAP), above guidance; GAAP diluted EPS was $0.07–$0.10.

• Gross margin was 52.3%–52.5%, down from 54.8%–55.1% year-over-year due to product mix.

• Free cash flow was $30.3 million; $43 million in share repurchases completed in Q1.

• Backlog and deferred revenue reached a record $582.1 million, up 87% year-over-year.

Outlook and guidance

• Full-year 2026 broadband revenue guidance raised to $475–$495 million; EPS guidance increased to $0.57–$0.67.

• Q2 2026 revenue expected between $115–$125 million; gross margin 49.9%–53%; EPS $0.15–$0.19.

• Full-year gross margin expected at 49.9%–51.5%, with operating profit $87–$101 million.

• Guidance reflects prudent approach due to supply chain, macroeconomic, and tariff uncertainties.