Harmonic (HLIT) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $138.7 million, down 11% year-over-year but up 14% sequentially, at the high end of guidance for both broadband and video segments.

• Net loss for Q2 2024 was $12.5 million, including $11.5 million in restructuring costs and $9 million in lease-related impairments, compared to net income of $1.6 million in Q2 2023.

• Profitability in the video business improved due to right-sizing actions and a growing pipeline of tier one SaaS and appliance opportunities.

• Full-year 2024 revenue guidance for both broadband ($460–$500 million) and video ($185–$195 million) was reaffirmed, with confidence in multi-year growth strategies.

• Cash and cash equivalents at quarter-end were $45.9 million, with $128.3 million in total debt outstanding.

Financial highlights

• Q2 2024 total revenue was $138.7 million, down from $156 million year-over-year but up 14% sequentially.

• Q2 non-GAAP EPS was $0.08, with adjusted EBITDA of $16.1 million, both exceeding guidance.

• Q2 operating expenses were $61.5 million, down 8.5% year-over-year.

• Bookings for Q2 were $72.4 million, with a book-to-bill ratio of 0.5; backlog and deferred revenue at quarter end was $613.1 million.

• Free cash flow for Q2 was -$24.1 million; cash flow from operations for the first six months was $4.7 million.

Outlook and guidance

• FY24 broadband revenue guidance reaffirmed at $460–$500 million, with expected 24% year-over-year growth at the midpoint.

• FY24 total company revenue expected between $645–$695 million, gross margins 51.6%–53.2%, and EPS $0.56–$0.75.

• Q3 2024 total revenue guidance is $175–$190 million, with EPS of $0.19–$0.24.

• Broadband segment expected to hit record revenue in Q3 and Q4, with momentum from top two customers and broader market.

• Management expects continued near-term headwinds in Video segment due to customer project delays, but believes these may be receding.