30.01.2023 22:05:00

Harmonic Announces Fourth Quarter and Fiscal 2022 Results

Record quarterly total revenue of $164.3 million

Broadband revenue up 38% and Video SaaS revenue up 51% year over year

SAN JOSE, Calif., Jan. 30, 2023 /PRNewswire/ -- Harmonic Inc. (NASDAQ: HLIT) today announced its unaudited results for the fourth quarter and fiscal year ended December 31, 2022.

Harmonic logo (PRNewsfoto/Harmonic Inc.)

"Harmonic delivered a strong finish to the year, including record quarterly revenue, and solid gross margins and operating profit in both our Broadband and Video segments," said Patrick Harshman, president and chief executive officer of Harmonic. "Top-line growth for the quarter was led by Broadband segment revenue growth of 38% and a 51% increase in Video SaaS revenue. As we enter 2023, demand and competitive differentiation remains strong for both our Broadband and Video SaaS solutions, reflected in our substantial backlog and deferred revenue."  

Q4 Financial and Business Highlights

Financial

  • Revenue: $164.3 million, up 5.5% year over year
    • Broadband segment revenue: $96.0 million, up 37.7% year over year
    • Video segment revenue: $68.3 million, down 20.7% year over year
  • Gross margin: GAAP 52.1% and non-GAAP 52.7%, compared to GAAP 50.0% and non-GAAP 50.5% in the year ago period
    • Broadband segment gross margin: 47.6% compared to 40.3% in the year ago period
    • Video segment gross margin: 59.9% compared to 58.8% in the year ago period
  • Operating income: GAAP income $16.5 million and non-GAAP income $23.7 million, compared to GAAP income $15.1 million and non-GAAP income $20.6 million in the year ago period
  • Net income: GAAP net income $6.1 million and non-GAAP net income of $19.9 million, compared to GAAP net income $19.9 million and non-GAAP net income $17.6 million in the year ago period
  • Adjusted EBITDA: $26.6 million income compared to $23.8 million income in the year ago period
  • EPS: GAAP net income per share of $0.05 and non-GAAP net income per share of $0.17, compared to GAAP net income per share of $0.18 and non-GAAP net income per share of $0.16 in the year ago period
  • Cash: $89.6 million, down $43.8 million year over year

Business

  • CableOS® solution commercially deployed with 91 customers, up 24.7% year over year
  • CableOS deployments scaled to 15.2 million served cable modems, up 218% year over year
  • Tier 1 live sports streaming SaaS expansion and new wins drove 51.3% Video SaaS revenue growth year over year

 

Select Financial Information

 



GAAP


Non-GAAP

Key Financial Results


Q4 2022


Q3 2022


Q4 2021


Q4 2022


Q3 2022


Q4 2021



(in millions, except per share data)

Net revenue


$         164.3


$         155.7


$         155.8


$         164.3


$         155.7


$         155.8

Net income


$             6.1


$             8.7


$           19.9


$           19.9


$           14.9


$           17.6

EPS


$           0.05


$           0.08


$           0.18


$           0.17


$           0.13


$           0.16










Other Financial Information

Q4 2022


Q3 2022


Q4 2021


(in millions)

Adjusted EBITDA for the quarter

$           26.6


$           21.2


$           23.8

Bookings for the quarter

$         130.2


$         171.1


$         267.3

Backlog and deferred revenue as of quarter end

$         457.1


$         490.1


$         441.0

Cash and cash equivalents as of quarter end

$           89.6


$         105.3


$         133.4

 

Explanations regarding our use of non-GAAP financial measures and related definitions, and reconciliations of our GAAP and
non-GAAP measures, are provided in the sections below entitled "Use of Non-GAAP Financial Measures" and "GAAP to Non-
GAAP Reconciliations".

 

Financial Guidance 

 


 Q1 2023 GAAP Financial Guidance (1)


Low


High

(Unaudited, in millions, except percentages and per share data)

Video


Broadband


Adjustments (2)


Total

GAAP


Video


Broadband


Adjustments (2)


Total

GAAP

Net revenue

$        55


$        97


$         —


$      152


$        60


$      102


$         —


$      162

Gross margin %

58.0 %


45.0 %


(0.7) %


49.0 %


59.0 %


46.0 %


(0.7) %


50.1 %

Gross profit

$        32


$        44


$         (1)


$        75


$        35


$        47


$         (1)


$        81

Operating expenses

$        35


$        29


$           8


$        72


$        36


$        30


$           8


$        74

Operating income (loss)

$        (3)


$        15


$         (9)


$          3


$        (1)


$        17


$         (9)


$          7

Tax rate (3)







21.0 %








21.0 %

EPS (3)







$     0.01








$     0.04

Shares (3)







117.9








117.9

Cash (3)







$        75








$        85

 

(1) Components may not sum to total due to rounding.

(2) Refer to "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" below.

(3) The guidance is provided at the total company level and not by segment.

 


 2023 GAAP Financial Guidance (1)


Low


High

(Unaudited, in millions, except percentages and per share data)

Video


Broadband


Adjustments (2)


Total
GAAP


Video


Broadband


Adjustments (2)


Total
GAAP

Net revenue

$      250


$      445


$         —


$      695


$      270


$      465


$         —


$      735

Gross margin %

58.5 %


45.0 %


(0.3) %


49.5 %


60.5 %


46.0 %


(0.3) %


51.0 %

Gross profit

$      146


$      200


$         (3)


$      343


$      163


$      214


$         (3)


$      374

Operating expenses

$      140


$      120


$         27


$      287


$      144


$      123


$         27


$      294

Operating income

$          6


$        80


$       (30)


$        56


$        19


$        91


$       (30)


$        80

Tax rate (3)







21.0 %








21.0 %

EPS (3)







$     0.37








$     0.53

Shares (3)







118.3








118.3

Cash (3)







$        90








$      100

 

(1) Components may not sum to total due to rounding.

(2) Refer to "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" below.

(3) The guidance is provided at the total company level and not by segment.

 


Q1 2023 Non-GAAP Financial Guidance (1)


Low


High

(Unaudited, in millions, except percentages and per share data)

Video


Broadband


Total


Video


Broadband


Total

Net revenue

$               55


$               97


$             152


$               60


$             102


$             162

Gross margin %

58.0 %


45.0 %


49.7 %


59.0 %


46.0 %


50.8 %

Gross profit

$               32


$               44


$               76


$               35


$               47


$               82

Operating expenses

$               35


$               29


$               64


$               36


$               30


$               66

Adjusted EBITDA

$               (2)


$               16


$               14


$                 1


$               18


$               19

Tax rate (2)





20.0 %






20.0 %

EPS (2)





$            0.07






$            0.10

Shares (2)





117.9






117.9

Cash (2)





$               75






$               85

 

(1) Refer to "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" below. Components may not sum to total due to rounding.

(2) The guidance is provided at the total company level and not by segment.

 


 2023 Non-GAAP Financial Guidance (1)


Low


High

(Unaudited, in millions, except percentages and per share data)

Video


Broadband


Total


Video


Broadband


Total

Net revenue

$             250


$             445


$             695


$             270


$             465


$             735

Gross margin %

58.5 %


45.0 %


49.8 %


60.5 %


46.0 %


51.3 %

Gross profit

$             146


$             200


$             346


$             163


$             214


$             377

Operating expenses

$             140


$             120


$             260


$             144


$             123


$             267

Adjusted EBITDA

$               12


$               86


$               98


$               25


$               97


$             122

Tax rate (2)





20.0 %






20.0 %

EPS (2)





$            0.56






$            0.72

Shares (2)





118.3






118.3

Cash (2)





$               90






$             100

 

(1) Refer to "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" below. Components may not sum to total due to rounding.

(2) The guidance is provided at the total company level and not by segment.

 

Conference Call Information

Harmonic will host a conference call to discuss its financial results at 2:00 p.m. PT (5:00 p.m. ET) on Monday, January 30, 2023. The live webcast will be available on the Harmonic Investor Relations website at https://investor.harmonicinc.com. To participate via telephone, please register in advance using this link, https://register.vevent.com/register/BIfc8a08fcfdfe403780548e7dd1215515. A replay will be available after 5:00 p.m. PT on the same web site.

About Harmonic Inc.

Harmonic (NASDAQ: HLIT), the worldwide leader in virtualized broadband and video delivery solutions, enables media companies and service providers to deliver ultra-high-quality video streaming and broadcast services to consumers globally. The company revolutionized broadband networking via the industry's first virtualized broadband solution, enabling cable operators to more flexibly deploy gigabit internet service to consumers' homes and mobile devices. Whether simplifying OTT video delivery via innovative cloud and software platforms, or powering the delivery of gigabit internet cable services, Harmonic is changing the way media companies and service providers monetize live and on-demand content on every screen. More information is available at www.harmonicinc.com.

Legal Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements related to our expectations regarding: net revenue, gross margins, operating expenses, operating income (loss), Adjusted EBITDA, tax expense and tax rate, EPS and cash. Our expectations regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, in no particular order, the following: the market and technology trends underlying our Video and Broadband businesses will not continue to develop in their current direction or pace; the possibility that our products will not generate sales that are commensurate with our expectations or that our cost of revenue or operating expenses may exceed our expectations; the potential impact of the Covid-19 pandemic on our operations or the operations of our supply chain or our customers; the impact of general economic conditions on our sales and operations; the mix of products and services sold in various geographies and the effect it has on gross margins; delays or decreases in capital spending in the cable, satellite, telco, broadcast and media industries; customer concentration and consolidation; our ability to develop new and enhanced products in a timely manner and market acceptance of our new or existing products; losses of one or more key customers; risks associated with our international operations; exchange rate fluctuations of the currencies in which we conduct business; risks associated with our CableOS and VOS product solutions; dependence on various video and broadband industry trends; inventory management; the lack of timely availability or the impact of increases in the prices of parts or raw materials necessary to produce our products; the effect of competition, on both revenue and gross margins; difficulties associated with rapid technological changes in our markets; risks associated with unpredictable sales cycles; our dependence on contract manufacturers and sole or limited source suppliers; and the effect on our business of natural disasters. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Harmonic's filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K for the year ended December 31, 2021, our most recent Quarterly Report on Form 10-Q and our Current Reports on Form 8-K. The forward-looking statements in this press release are based on information available to the Company as of the date hereof, and Harmonic disclaims any obligation to update any forward-looking statements.

Use of Non-GAAP Financial Measures

The Company reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP" or referred to herein as "reported"). However, management believes that certain non-GAAP financial measures provide management and other users with additional meaningful financial information that should be considered when assessing our ongoing performance. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business, establish operating budgets, set internal measurement targets and make operating decisions.

These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Harmonic's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Harmonic's results of operations in conjunction with the corresponding GAAP measures.

The Company believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to, the Company's reported results prepared in accordance with GAAP.

The non-GAAP measures presented here are: Gross profit, operating expenses, income (loss) from operations, non-operating expenses and net income (loss) (including those amounts as a percentage of revenue), Adjusted EBITDA and net income (loss) per diluted share. The presentation of non-GAAP information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP, and is not necessarily comparable to non-GAAP results published by other companies. A reconciliation of the historical non-GAAP financial measures discussed in this press release to the most directly comparable historical GAAP financial measures is included with the financial statements provided with this press release. The non-GAAP adjustments described below have historically been excluded from our GAAP financial measures.

Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:

Stock-based compensation - Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. We believe that management is limited in its ability to project the impact stock-based compensation would have on our operating results. In addition, for comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes stock-based compensation in order to better understand the long-term performance of our core business and to facilitate the comparison of our results to the results of our peer companies. 

Amortization of intangibles - A portion of the purchase price of our acquisitions is generally allocated to intangible assets, and is subject to amortization. However, Harmonic does not acquire businesses on a predictable cycle. Additionally, the amount of an acquisition's purchase price allocated to intangible assets and the term of its related amortization can vary significantly and is unique to each acquisition. Therefore, we believe that the presentation of non-GAAP financial measures that adjust for the amortization of intangible assets provides investors and others with a consistent basis for comparison across accounting periods. 

Restructuring and related charges - Harmonic from time to time incurs restructuring charges which primarily consist of employee severance, one-time termination benefits related to the reduction of its workforce, lease exit costs, and other costs.  These charges are associated with material business shifts. We exclude these items because we do not believe they are reflective of our ongoing long-term business and operating results. 

Non-cash interest expense and other expenses related to convertible notes and other debt - We record the amortization of issuance costs as non-cash interest expense. We believe that excluding these costs provides meaningful supplemental information regarding operational performance and liquidity, along with enhancing investors' ability to view the Company's results from management's perspective. In addition, we believe excluding these costs from the non-GAAP measures facilitates comparisons to our historical operating results and comparisons to peer company operating results. 

Gain and losses on equity investments - We exclude the gain and losses from the sale of our equity investments in calculating our non-GAAP financial measures. We exclude these items because we do not believe they are reflective of our ongoing long-term business and operating results.

Discrete tax items and tax effect of non-GAAP adjustments - The income tax effect of non-GAAP adjustments relates to the tax effect of the adjustments that we incorporate into non-GAAP financial measures in order to provide a more meaningful measure of non-GAAP net income.

Depreciation - Depreciation expense, along with interest, tax and stock-based compensation expense, restructuring charges and amortization of intangible assets, is excluded from Adjusted EBITDA because we do not believe depreciation and the other items relate to the ordinary course of our business or are reflective of our underlying business performance.

 

Harmonic Inc.
Preliminary Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except per share data)

 


December 31, 2022


December 31, 2021

ASSETS




Current assets:




   Cash and cash equivalents

$                          89,586


$                        133,431

   Accounts receivable, net

108,427


88,529

   Inventories

120,949


71,195

   Prepaid expenses and other current assets

28,730


29,972

Total current assets

347,692


323,127

Property and equipment, net

39,814


42,721

Operating lease right-of-use assets

25,469


30,968

Other non-current assets

59,304


56,657

Goodwill

237,739


240,213

Total assets

$                        710,018


$                        693,686





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Convertible debt, current

$                        113,981


$                          36,824

Other debts, current

4,756


4,992

Accounts payable

67,455


64,429

Deferred revenue

62,383


57,226

Operating lease liabilities, current

6,773


7,346

Other current liabilities

66,724


53,644

Total current liabilities

322,072


224,461

Convertible debt, non-current

—


98,941

Other debts, non-current

11,161


12,989

Operating lease liabilities, non-current

24,110


29,120

Other non-current liabilities

28,169


31,379

Total liabilities

$                        385,512


$                        396,890





Convertible debt

—


883

Stockholders' equity:




Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding

—


—

Common stock, $0.001 par value, 150,000 shares authorized; 109,871 and 102,959 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively

110


103

Additional paid-in capital

2,380,651


2,387,039

Accumulated deficit

(2,046,569)


(2,087,957)

Accumulated other comprehensive loss

(9,686)


(3,272)

Total stockholders' equity

324,506


295,913

Total liabilities and stockholders' equity

$                        710,018


$                        693,686

 

Harmonic Inc.
Preliminary Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)

 


Three Months Ended


Year Ended


December 31, 2022


December 31, 2021


December 31, 2022


December 31, 2021

Revenue:








Appliance and integration

$                122,513


$                119,340


$                473,806


$                369,767

SaaS and service

41,821


36,464


151,151


137,382

Total net revenue

164,334


155,804


624,957


507,149

Cost of revenue:








Appliance and integration

65,372


65,135


259,027


195,445

SaaS and service

13,265


12,731


50,046


51,962

Total cost of revenue

78,637


77,866


309,073


247,407

Total gross profit

85,697


77,938


315,884


259,742

Operating expenses:








Research and development

31,088


27,368


120,307


102,231

Selling, general and administrative

36,927


35,357


146,717


138,085

Amortization of intangibles

—


—


—


507

Restructuring and related charges

1,205


67


3,341


110

Total operating expenses

69,220


62,792


270,365


240,933

Income from operations

16,477


15,146


45,519


18,809

Interest expense, net

(929)


(2,706)


(5,040)


(10,625)

Other income (expense), net

(212)


28


4,006


687

Income before income taxes

15,336


12,468


44,485


8,871

Provision for (benefit from) income taxes

9,205


(7,389)


16,303


(4,383)

Net income

$                    6,131


$                  19,857


$                  28,182


$                  13,254









Net income per share:








Basic

$                      0.06


$                      0.19


$                      0.27


$                      0.13

Diluted

$                      0.05


$                      0.18


$                      0.25


$                      0.12

Weighted average shares outstanding:








Basic

106,988


102,768


105,080


101,484

Diluted

117,301


110,474


112,378


106,171

 

Harmonic Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)

 


Year Ended


December 31, 2022


December 31, 2021

Cash flows from operating activities:




Net income

$                  28,182


$                 13,254

Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation

12,260


12,546

Amortization of intangibles

—


507

Stock-based compensation

25,212


24,056

Amortization of convertible debt discount

1,171


6,308

Amortization of warrant

1,734


1,741

Foreign currency remeasurement

(2,685)


(5,126)

Deferred income taxes

5,043


(6,197)

Provision for expected credit losses and returns

1,954


4,142

Provision for excess and obsolete inventories

5,988


3,460

Gains on sale of investment in equity securities

(4,370)


—

Other adjustments

513


181

Changes in operating assets and liabilities:




Accounts receivable

(23,136)


(26,722)

Inventories

(54,431)


(39,338)

Other assets

(8,551)


(3,096)

Accounts payable

5,837


42,303

Deferred revenues

2,610


15,014

Other liabilities

8,145


(2,016)

Net cash provided by operating activities

5,476


41,017

Cash flows from investing activities:




Proceeds from sale of investment

7,962


—

Purchases of property and equipment

(9,250)


(12,975)

Net cash used in investing activities

(1,288)


(12,975)

Cash flows from financing activities:




Payment of convertible debt

(37,707)


—

Proceeds from other debts

3,499


3,861

Repayment of other debts

(4,583)


(6,169)

Repurchase of common stock

(5,133)


—

Proceeds from common stock issued to employees

7,092


12,311

Taxes paid related to net share settlement of equity awards

(6,301)


(2,064)

Net cash provided by (used in) financing activities

(43,133)


7,939

Effect of exchange rate changes on cash and cash equivalents

(4,900)


(1,195)

Net increase (decrease)  in cash and cash equivalents

(43,845)


34,786

Cash and cash equivalents at beginning of period

133,431


98,645

Cash and cash equivalents at end of period

$                  89,586


$               133,431

 

Harmonic Inc.
Preliminary GAAP Revenue Information
(Unaudited, in thousands, except percentages)

 


Three Months Ended


December 31, 2022


September 30, 2022


December 31, 2021

Geography









Americas

$         125,638

76 %


$         106,467

68 %


$         102,929

66 %

EMEA

29,250

18 %


38,444

25 %


40,096

26 %

APAC

9,446

6 %


10,827

7 %


12,779

8 %

Total

$         164,334

100 %


$         155,738

100 %


$         155,804

100 %










Market









Service Provider

$         110,092

67 %


$         106,974

69 %


$           87,263

56 %

Broadcast and Media

54,242

33 %


48,764

31 %


68,541

44 %

Total

$         164,334

100 %


$         155,738

100 %


$         155,804

100 %

 


Twelve Months Ended


December 31, 2022


December 31, 2021

Geography






Americas

$         452,869

73 %


$         335,731

66 %

EMEA

133,095

21 %


126,427

25 %

APAC

38,993

6 %


44,991

9 %

Total

$         624,957

100 %


$         507,149

100 %







Market






Service Provider

$         408,138

65 %


$         280,009

55 %

Broadcast and Media

216,819

35 %


227,140

45 %

Total

$         624,957

100 %


$         507,149

100 %

 

Harmonic Inc.
Preliminary Segment Information
(Unaudited, in thousands, except percentages)

 


Three Months Ended December 31, 2022


Video


Broadband


Total Segment
Measures

(non-GAAP)


Adjustments (1)


Consolidated
GAAP
Measures

Net revenue

$        68,308


$        96,026


$      164,334


$                  —


$      164,334

Gross profit

40,939


45,741


86,680


(983)


85,697

Gross margin %

59.9 %


47.6 %


52.7 %




52.1 %

Adjusted EBITDA(2)

6,350


20,205


26,555


(20,424)


6,131

Adjusted EBITDA margin %

9.3 %


21.0 %


16.2 %




3.7 %












Three Months Ended September 30, 2022


Video


Broadband


Total Segment
Measures

(non-GAAP)


Adjustments (1)


Consolidated
GAAP
Measures

Net revenue

$        63,824


$        91,914


$      155,738


$                  —


$      155,738

Gross profit

37,859


41,343


79,202


(598)


78,604

Gross margin %

59.3 %


45.0 %


50.9 %




50.5 %

Adjusted EBITDA(2)

4,318


16,871


21,189


(12,449)


8,740

Adjusted EBITDA margin %

6.8 %


18.4 %


13.6 %




5.6 %












Three Months Ended December 31, 2021


Video


Broadband


Total Segment
Measures

(non-GAAP)


Adjustments (1)


Consolidated
GAAP
Measures

Net revenue

$        86,092


$        69,712


$      155,804


$                  —


$      155,804

Gross profit

50,589


28,080


78,669


(731)


77,938

Gross margin %

58.8 %


40.3 %


50.5 %




50.0 %

Adjusted EBITDA(2)

17,105


6,707


23,812


(3,955)


19,857

Adjusted EBITDA margin %

19.9 %


9.6 %


15.3 %




12.7 %

 


Twelve Months Ended December 31, 2022


Video


Broadband


Total Segment
Measures

(non-GAAP)


Adjustments (1)


Consolidated
GAAP
Measures

Net revenue

$      274,189


$      350,768


$      624,957


$                  —


$      624,957

Gross profit

165,618


153,031


318,649


(2,765)


315,884

Gross margin %

60.4 %


43.6 %


51.0 %




50.5 %

Adjusted EBITDA(2)

28,218


58,321


86,539


(58,357)


28,182

Adjusted EBITDA margin %

10.3 %


16.6 %


13.8 %




4.5 %












Twelve Months Ended December 31, 2021


Video


Broadband


Total Segment
Measures

(non-GAAP)


Adjustments (1)


Consolidated
GAAP
Measures

Net revenue

$      288,507


$      218,642


$      507,149


$                  —


$      507,149

Gross profit

169,468


93,191


262,659


(2,917)


259,742

Gross margin %

58.7 %


42.6 %


51.8 %




51.2 %

Adjusted EBITDA(2)

36,348


20,944


57,292


(44,038)


13,254

Adjusted EBITDA margin %

12.6 %


9.6 %


11.3 %




2.6 %

 

(1) Refer to "Use of Non-GAAP Financial Measures" above and "GAAP to Non-GAAP Reconciliations" below.

(2) Adjusted EBITDA is a Non-GAAP financial measure. Refer to "Preliminary Adjusted EBITDA Reconciliation" below for a reconciliation to the most comparable GAAP measure.

 

Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(in thousands, except percentages and per share data)

 


Three Months Ended December 31, 2022


Revenue


Gross Profit


Total
Operating
Expense


Income 
from
Operations


Total Non-
operating
Expense, net


Net Income

GAAP

$      164,334


$     85,697


$     69,220


$     16,477


$     (1,141)


$       6,131

Stock-based compensation

—


541


(5,050)


5,591


—


5,591

Restructuring and related charges

—


442


(1,205)


1,647


17


1,664

Non-cash interest and other expenses related to convertible notes

—


—


—


—


274


274

Discrete tax items and tax effect of non-GAAP adjustments

—


—


—


—


—


6,233

Total adjustments

—


983


(6,255)


7,238


291


13,762

Non-GAAP

$      164,334


$     86,680


$     62,965


$     23,715


$       (850)


$     19,893

As a % of revenue (GAAP)



52.1 %


42.1 %


10.0 %


(0.7) %


3.7 %

As a % of revenue (Non-GAAP)



52.7 %


38.3 %


14.4 %


(0.5) %


12.1 %

Diluted net income per share:












GAAP











$        0.05

Non-GAAP











$        0.17

Shares used in per share calculation:












GAAP and Non-GAAP











117,301

 


Three Months Ended September 30, 2022


Revenue


Gross Profit


Total
Operating
Expense


Income
 from
Operations


Total Non-
operating
Expense, net


Net Income

GAAP

$      155,738


$     78,604


$     67,180


$     11,424


$     (1,402)


$       8,740

Stock-based compensation

—


607


(5,853)


6,460


—


6,460

Restructuring and related charges

—


(9)


(335)


326


—


326

Non-cash interest and other expenses related to convertible notes

—


—


—


—


303


303

Discrete tax items and tax effect of non-GAAP adjustments

—


—


—


—


—


(942)

Total adjustments

—


598


(6,188)


6,786


303


6,147

Non-GAAP

$      155,738


$     79,202


$     60,992


$     18,210


$     (1,099)


$     14,887

As a % of revenue (GAAP)



50.5 %


43.1 %


7.3 %


(0.9) %


5.6 %

As a % of revenue (Non-GAAP)



50.9 %


39.2 %


11.7 %


(0.7) %


9.6 %

Diluted net income per share:












GAAP











$        0.08

Non-GAAP











$        0.13

Shares used in per share calculation:












GAAP and Non-GAAP











113,185

 


Three Months Ended December 31, 2021


Revenue


Gross Profit


Total
Operating
Expense


Income
from
Operations


Total Non-
operating
expense, net


Net Income

GAAP

$      155,804


$     77,938


$     62,792


$     15,146


$     (2,678)


$     19,857

Stock-based compensation

—


506


(4,689)


5,195


—


5,195

Restructuring and related charges

—


225


(67)


292


—


292

Non-cash interest and other expenses related to convertible notes

—


—


—


—


1,621


1,621

Discrete tax items and tax effect of non-GAAP adjustments

—


—


—


—


—


(9,347)

Total adjustments

—


731


(4,756)


5,487


1,621


(2,239)

Non-GAAP

$      155,804


$     78,669


$     58,036


$     20,633


$     (1,057)


$     17,618

As a % of revenue (GAAP)



50.0 %


40.3 %


9.7 %


(1.7) %


12.7 %

As a % of revenue (Non-GAAP)



50.5 %


37.2 %


13.2 %


(0.7) %


11.3 %

Diluted net income per share:












GAAP











$        0.18

Non-GAAP











$        0.16

Shares used in per share calculation:












GAAP and Non-GAAP











110,474

 


Twelve Months Ended December 31, 2022


Revenue


Gross Profit


Total
Operating
Expense


Income
from
Operations


Total Non-
operating
expense, net


Net Income

GAAP

$      624,957


$   315,884


$   270,365


$     45,519


$     (1,034)


$     28,182

Stock-based compensation

—


2,232


(22,980)


25,212


—


25,212

Restructuring and related charges

—


533


(3,341)


3,874


17


3,891

Gain on sale of equity investments

—


—


—


—


(4,349)


(4,349)

Non-cash interest and other expenses related to convertible notes

—


—


—


—


1,173


1,173

Discrete tax items and tax effect of non-GAAP adjustments

—


—


—


—


—


7,149

Total adjustments

—


2,765


(26,321)


29,086


(3,159)


33,076

Non-GAAP

$      624,957


$   318,649


$   244,044


$     74,605


$     (4,193)


$     61,258

As a % of revenue (GAAP)



50.5 %


43.3 %


7.3 %


(0.2) %


4.5 %

As a % of revenue (Non-GAAP)



51.0 %


39.0 %


11.9 %


(0.7) %


9.8 %

Diluted net income per share:












GAAP











$        0.25

Non-GAAP











$        0.55

Shares used in per share calculation:












GAAP and Non-GAAP











112,378

 


Twelve Months Ended December 31, 2021


Revenue


Gross Profit


Total
Operating
Expense


Income
from
Operations


Total Non-
operating
expense, net


Net Income

GAAP

$      507,149


$   259,742


$   240,933


$     18,809


$     (9,938)


$     13,254

Stock-based compensation

—


2,346


(21,716)


24,062


—


24,062

Amortization of intangibles

—


—


(507)


507


—


507

Restructuring and related charges

—


571


(110)


681


—


681

Non-cash interest and other expenses related to convertible notes

—


—


—


—


6,305


6,305

Discrete tax items and tax effect of non-GAAP adjustments

—


—


—


—


—


(8,425)

Total adjustments

—


2,917


(22,333)


25,250


6,305


23,130

Non-GAAP

$      507,149


$   262,659


$   218,600


$     44,059


$     (3,633)


$     36,384

As a % of revenue (GAAP)



51.2 %


47.5 %


3.7 %


(2.0) %


2.6 %

As a % of revenue (Non-GAAP)



51.8 %


43.1 %


8.7 %


(0.7) %


7.2 %

Diluted net income per share:












GAAP











$        0.12

Non-GAAP











$        0.34

Shares used in per share calculation:












GAAP and Non-GAAP











106,171

 

Harmonic Inc.
Preliminary Adjusted EBITDA Reconciliation (Unaudited)
(In thousands)

 


Three Months Ended


December 31, 2022


September 30, 2022


December 31, 2021

Net income  - GAAP

$                     6,131


$                     8,740


$                   19,857

Provision for income taxes

9,205


1,282


(7,389)

Interest expense, net

929


1,284


2,706

Depreciation

3,035


3,097


3,151

EBITDA

19,300


14,403


18,325







Adjustments






Stock-based compensation

5,591


6,460


5,195

Restructuring and related charges

1,664


326


292

Adjusted EBITDA

$                   26,555


$                   21,189


$                   23,812

 


Twelve Months Ended


December 31, 2022


December 31, 2021

Net income - GAAP

$                   28,182


$                   13,254

Provision for income taxes

16,303


(4,383)

Interest expense, net

5,040


10,625

Depreciation

12,260


12,546

Amortization of intangibles

—


507

EBITDA

61,785


32,549





Adjustments




Stock-based compensation

25,212


24,062

Restructuring and related charges

3,891


681

Gain on sale of equity investment

(4,349)


—

Adjusted EBITDA

$                   86,539


$                   57,292

 

Harmonic Inc.
GAAP to Non-GAAP Reconciliations on Financial Guidance (Unaudited)
(In millions, except percentages and per share data)



Q1 2023 Financial Guidance (1)


Revenue


Gross Profit


Total Operating
Expense


Net Income

GAAP

$152

to

$162


$75

to

$81


$72

to

$74


$1

to

$5

Stock-based compensation expense

—


1


(8)


9

Tax effect of non-GAAP adjustments

—


—


—


(1)

to

(2)

Total adjustments

—


1


(8)


8

to

7

Non-GAAP

$152

to

$162


$76

to

$82


$64

to

$66


$9

to

$12

As a % of revenue (GAAP)





49.0 %

to

50.1 %


47.3 %

to

45.6 %


0.8 %

to

3.0 %

As a % of revenue (Non-GAAP)





49.7 %

to

50.8 %


42.1 %

to

40.7 %


5.6 %

to

7.6 %

Diluted net income per share:
















GAAP













$0.01

to

$0.04

Non-GAAP













$0.07

to

$0.10

Shares used in per share calculation:
















GAAP and Non-GAAP













117.9

 

(1) Components may not sum to total due to rounding.

 


2023 Financial Guidance (1)


Revenue


Gross Profit


Total Operating
Expense


Net Income

GAAP

$695

to

$735


$343

to

$374


$287

to

$294


$44

to

$63

Stock-based compensation expense

—


3


(27)


29

Non-cash interest and other expenses related to convertible notes

—


—


—


1

Gain on sale of equity investment

—


—


—


(3)

Tax effect of non-GAAP adjustments

—


—


—


(5)

to

(5)

Total adjustments

—


3


(27)


22

to

22

Non-GAAP

$695

to

$735


$346

to

$377


$260

to

$267


$66

to

$85

As a % of revenue (GAAP)





49.5 %

to

51.0 %


41.3 %

to

40.0 %


6.3 %

to

8.5 %

As a % of revenue (Non-GAAP)





49.8 %

to

51.3 %


37.5 %

to

36.3 %


9.5 %

to

11.6 %

Diluted net income per share:
















GAAP













$0.37

to

$0.53

Non-GAAP













$0.56

to

$0.72

Shares used in per share calculation:
















GAAP and Non-GAAP













118.3

 

(1) Components may not sum to total due to rounding.

 

Harmonic Inc.
Adjusted EBITDA Reconciliation on Financial Guidance (Unaudited)(1)
(In millions)

 



Q1 2023 Financial
Guidance


2023 Financial
Guidance

Net income - GAAP


$1

to

$5


$44

to

$63

Provision for income taxes


—


1


12


17

Interest expense, net


1


1


3


3

Depreciation


3


3


13


13

EBITDA


$5

to

$10


$72

to

$96










Adjustments









Stock-based compensation


9

to

9


29

to

29

Gain on sale of equity investment


—


—


(3)


(3)

Adjusted EBITDA


$14

to

$19


$98

to

$122

 

(1) Components may not sum to total due to rounding.

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/harmonic-announces-fourth-quarter-and-fiscal-2022-results-301733563.html

SOURCE Harmonic Inc.

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