Executive Summary

Record Q4: Revenue $222.2M (+33% YoY) and record adjusted EBITDA $71.8M; both Broadband ($171.0M) and Video ($51.1M) exceeded expectations, with total gross margin 56.1% .
Above-company-guidance prints: Revenue, EPS (GAAP $0.32; Non-GAAP $0.45), and adjusted EBITDA were all above the high end of Q3-issued Q4 guidance; gross margin landed within the guided range .
2025 guide is prudent amid Unified DOCSIS 4.0 timing shifts (Q1 revenue $120–$135M; FY revenue $585–$645M) with higher broadband gross margin mix from cOS licenses partially offsetting lower nodes; management expects growth to resume in 2026 as deployments accelerate .
Capital return: Board authorized a new three-year $200M share repurchase program through Feb-2028, doubling the prior program; cash ended Q4 at $101.5M with strong FCF in the quarter .

What Went Well and What Went Wrong

What Went Well
- Record quarter with broad-based strength: “record quarterly total company revenue and Adjusted EBITDA,” driven by Broadband scale-up and Video profitability improvement .
- Mix and margin quality: Broadband non-GAAP GM 52.7% (+1,030 bps YoY; +440 bps QoQ) from higher cOS license mix; Video non-GAAP GM 67.4% (+280 bps YoY) .
- Strategic wins and platform reach: 127 cOS customers serving 33.3M cable modems; engaged with 10 Tier 1s on Unified DOCSIS 4.0; Akamai qualified VOS360 and selected Harmonic for a streaming service .
What Went Wrong
- Bookings/backlog compression: Bookings $150.0M (book-to-bill 0.7) and backlog+deferred $496.3M declined sequentially; management cited the sharp Q4 revenue ramp and an early-2025 outlook as drivers .
- 2025 headwinds: Customers pushing out Unified DOCSIS 4.0 deployment timing; FY25 revenue guide implies a step-down vs 2H24 run-rate, despite higher GM mix .
- Inventory provision and concentration: ~$5M 3.1 inventory provision tied to the DOCSIS 4.0 transition; Comcast 43% and Charter 24% of Q4 revenue underscore concentration risk .

Financial Results

Overall P&L vs prior quarters

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($M)	$138.7	$195.8	$222.2
GAAP Gross Margin %	52.9%	53.5%	56.1%
Adjusted EBITDA ($M, Non-GAAP)	$16.1	$43.4	$71.8
GAAP EPS ($)	-$0.11	$0.19	$0.32
Non-GAAP EPS ($)	$0.08	$0.26	$0.45

Segment performance

Segment Metric	Q2 2024	Q3 2024	Q4 2024
Broadband Revenue ($M)	$92.937	$145.338	$171.028
Broadband Gross Margin % (Non-GAAP)	47.6%	48.3%	52.7%
Broadband Adjusted EBITDA ($M)	$16.320	$37.460	$64.050
Video Revenue ($M)	$45.803	$50.418	$51.138
Video Gross Margin % (Non-GAAP)	64.4%	69.0%	67.4%
Video Adjusted EBITDA ($M)	-$0.263	$5.986	$7.780

KPIs and operating items

KPI	Q2 2024	Q3 2024	Q4 2024
cOS Deployed Customers (#)	118	121	127
Cable Modems Served (MM)	30.1	32.0	33.3
Bookings ($M)	$72.4	$171.4	$150.0
Backlog + Deferred Revenue ($M)	$613.1	$584.7	$496.3
Cash & Cash Equivalents ($M)	$45.9	$58.2	$101.5
DSO (days)	—	—	72
Days Inventory on Hand	—	—	59

Q4 actuals vs company Q4 guidance (issued on Oct-28)

Metric	Q4 2024 Guidance (Oct)	Q4 2024 Actual	Outcome
Revenue ($M)	$205–$220	$222.2	Above high end
Non-GAAP EPS ($)	$0.33–$0.39	$0.45	Above high end
GAAP EPS ($)	$0.26–$0.31	$0.32	Above high end
Adjusted EBITDA ($M)	$55–$64	$71.8	Above high end
Total Gross Margin % (Non-GAAP)	55.4%–56.7%	56.1%	In line

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue (GAAP)	Q1 2025	—	$120–$135M	New
Total Revenue (GAAP)	FY 2025	—	$585–$645M	New
Broadband Revenue (GAAP)	FY 2025	—	$400–$450M	New
Video Revenue (GAAP)	FY 2025	—	$185–$195M	New
Total Gross Margin % (GAAP)	Q1 2025	—	55.8%–57.0%	New
Total Gross Margin % (GAAP)	FY 2025	—	54.5%–57.1%	New
Adjusted EBITDA (Non-GAAP)	Q1 2025	—	$9–$17M	New
Adjusted EBITDA (Non-GAAP)	FY 2025	—	$85–$123M	New
Non-GAAP EPS	Q1 2025	—	$0.02–$0.08	New
Non-GAAP EPS	FY 2025	—	$0.43–$0.68	New
Tax Rate (GAAP)	Q1 2025	—	19%	New
Tax Rate (GAAP)	FY 2025	—	19%	New
Shares (diluted for modeling)	Q1 2025	—	118.5M (Non-GAAP)	New
Shares (diluted for modeling)	FY 2025	—	119.1M	New
Capital Return	3-year	Prior program	New $200M buyback through Feb-2028	Increased

Notes: Management cites industry-wide timing shifts as operators transition to Unified DOCSIS 4.0 as the primary reason for prudent 2025 guidance, with growth expected to resume in 2026 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q2’24)	Previous Mentions (Q-1: Q3’24)	Current Period (Q4’24)	Trend
Unified DOCSIS 4.0 rollout	Building OLT/FTTH portfolio; reaffirmed FY guidance	Demonstrated first Unified DOCSIS 4.0 with Comcast; 121 cOS customers	Industry-wide timing shifts; engaged with 10 Tier 1s on Unified 4.0	Near-term headwind; long-term positive
Broadband customer diversification (ROW)	Telecentro selected cOS	7 new wins incl. Bluepeak, Tribal Ready	ROW sales +50% QoQ; 5 new wins incl. Blue Stream Fiber & IPKO	Accelerating
Video SaaS & partnerships	Growing pipeline; OLT shipments	Larger Appliance/Tier 1 SaaS pipeline	VOS360 qualified on Akamai; selected for streaming service	Strengthening
Supply chain/ecosystem readiness	—	—	Full duplex/FDD amps integration is gating; silicon available; operationalization takes time	Watch through 2025
Profitability/mix	GM ~53%	GM 53.5%; video >10% adj. EBITDA margin	GM 56.1% on cOS license mix; broadband GM guide up in 2025	Improving mix
Capital allocation	—	—	New $200M buyback authorized	Positive for returns

Management Commentary

“Harmonic achieved record quarterly total company revenue and Adjusted EBITDA, with both Broadband and Video revenue exceeding expectations… technology leadership has never been stronger” — Nimrod Ben‑Natan, CEO .
“Our prudent 2025 Broadband revenue guidance reflects shifts in customer deployment timing as operators transition to Unified DOCSIS 4.0… expect to resume above market growth in 2026” — Walter Jankovic, CFO .
“Broadband Q4 gross margin was 52.7%, up… due predominantly to a higher mix of cOS licenses, partially offset by inventory provisions… Q4 book-to-bill 0.7 due to the sharp increase in broadband revenue and the expected outlook for early 2025” — CFO .
“We believe our market share on virtual CMTS remains very strong, north of 90%, and on remote devices, north of 60%” — CEO (Q&A) .

Q&A Highlights

Market dynamics vs share: Management attributes 2025 softness to market timing for Unified 4.0; asserts vCMTS share >90% and remote devices >60% with no share loss indicators .
Ecosystem readiness: Full-duplex/FDD amplifier integration and operationalization—not silicon availability—are the gating factors to ramp; integration and field mastering take time .
Mix and margins: 2025 broadband GM guided higher on increased cOS license mix; node revenue declines weigh on top-line but license revenue expected slightly up YoY .
Operating expenses: Broadband OpEx to rise supporting ROW growth and integrations (e.g., Rogers) even as Video benefits from 2024 cost optimization .
Working capital/other items: DSO improved to 72; inventory DOH 59; non-cash FX gain ~$5.8M; Comcast 43% and Charter 24% of Q4 revenue .

Estimates Context

We attempted to retrieve S&P Global consensus for Q4’24 EPS/Revenue/EBITDA but were unable to due to data access limits at the time of query. As a proxy, the company beat its own Q4 guidance on revenue, EPS and adjusted EBITDA, and met gross margin guidance ranges .
Given the prudent FY25 guide, we expect Street estimates to move lower on revenue but potentially higher on margin/EBITDA mix as license share increases; investors should monitor estimate revisions post-call commentary .

Key Takeaways for Investors

Quality beat: Q4 results topped company guidance across revenue, EPS and EBITDA, with structurally better margins from software/license mix; this supports the durability of profitability through a 2025 revenue digestion phase .
Near-term caution, medium-term upside: 2025 revenue guide embeds industry timing delays for Unified DOCSIS 4.0, but management expects a 2026 re-acceleration; watch ecosystem progress on FDD/FDX amps and field operationalization .
Mix matters: Shift from nodes to cOS licenses should lift broadband GM in 2025 despite lower topline; license revenue expected slightly up, cushioning earnings and cash flow .
Capital return catalyst: New $200M buyback through 2028 signals confidence in profitability and FCF; opportunistic repurchases could support shares during estimate resets .
Concentration and bookings backdrop: Comcast/Charter concentration and book-to-bill <1.0 after a revenue surge underscore volatility; backlog fell sequentially—monitor bookings normalization as Unified 4.0 deployments firm up .
Strategic positioning intact: 127 cOS customers, 33.3M modems, engagement with 10 Tier 1s, and Akamai partnership reinforce leadership in vCMTS/DAA and hybrid video SaaS .

Appendix: Additional Detail

Revenue mix by market/geography (Q4 vs Q3 vs Q4’23)

Category	Q4 2024	Q3 2024	Q4 2023
Service Provider Revenue ($M / %)	$178.266 / 80%	$159.993 / 82%	$128.566 / 77%
Broadcast & Media Revenue ($M / %)	$43.900 / 20%	$35.763 / 18%	$38.526 / 23%
Americas Revenue ($M / %)	$186.907 / 84%	$167.720 / 86%	$129.406 / 77%
EMEA Revenue ($M / %)	$26.044 / 12%	$20.269 / 10%	$30.041 / 18%
APAC Revenue ($M / %)	$9.215 / 4%	$7.767 / 4%	$7.645 / 5%

Non-GAAP/GAAP reconciliation pointers: Company provides detailed GAAP to Non-GAAP reconciliations and guidance bridges (tax effects, stock-based comp, restructuring, asset impairments, FX), which we referenced above for EPS and adjusted EBITDA comparisons .

HARMONIC INC (HLIT)·Q4 2024 Earnings Summary