Harmonic Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Steve Frankel - Rosenblatt Securities Inc. - Analyst : Good afternoon. Thanks for the opportunity. Last quarter, there was some discussion of this Unified DOCSIS delay having to do with the amplifier piece. Obviously, you don't supply those but it's critical to the network. Any update in terms of where you think the industry is and getting those Unified amplifiers in and tested and tuned?

Question: Steve Frankel - Rosenblatt Securities Inc. - Analyst : And then, in terms of dealing with the tariffs, given the cash flow and the balance sheet in Q1, does it make any sense to go out and try to buy products, ahead of delivery, to work around the tariffs? Or you're comfortable that whatever tariffs we end up with, your customers are likely to really share the burden and so, you don't need to be aggressive about bringing in [WIP]?

Question: Steve Frankel - Rosenblatt Securities Inc. - Analyst : Okay. And then, last quick one. In terms of Fiber, where you seem to make some real progress in terms of bookings, when does that Fiber business begin to become a material part of revenue, in terms of deployments? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2025 / 9:00PM, HLIT.OQ - Q1 2025 Harmonic Inc Earnings Call

Question: Steve Frankel - Rosenblatt Securities Inc. - Analyst : Great. Thank you. I'll jump back in the queue.

Question: Ryan Koontz - Needham & Company, LLC - Analyst : Great. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2025 / 9:00PM, HLIT.OQ - Q1 2025 Harmonic Inc Earnings Call Just trying to double-click here on your second-half uncertainty and trying to understand exactly the source of that. How much of that uncertainty is coming from tariff situation? And how much is coming from technology readiness, whether it's your customers adopting new technology at a different pace or just the DOCSIS for Unified ecosystem not really being ready yet? Can you can help us parse that current visibility? That current view of second half?

Question: Ryan Koontz - Needham & Company, LLC - Analyst : That's really helpful, Walter. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2025 / 9:00PM, HLIT.OQ - Q1 2025 Harmonic Inc Earnings Call Just a clarification on your comment about the nodes and sourcing that technology: obviously, the RPDs are coming from a traditional PCB shop, [OD], contract manufacturer. But how about the balance of the nodes, in terms of the power and mechanicals that are so heavy? Are those also sourced from Malaysia or are they coming from -- ?

Question: Ryan Koontz - Needham & Company, LLC - Analyst : Got it. All right. Thanks so much.

Question: Victor Chu - Raymond James Financial, Inc. - Analyst : Hi, guys. This is Victor Chu, on for Simon Leopold. Just to follow-up on the tariff commentary a bit. Can you tell us what potential options you're looking at, in terms of possibly diversifying your manufacturing footprint like you mentioned, earlier, for the Broadband business?

Question: Victor Chu - Raymond James Financial, Inc. - Analyst : Okay. That's helpful. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2025 / 9:00PM, HLIT.OQ - Q1 2025 Harmonic Inc Earnings Call And then, just excluding the potential impact from tariffs, has there been any change around the visibility of the spending trajectory, from your two largest MSO customers, at this point in the year, versus when you cautioned us against the slower spending, last year?

Question: Victor Chu - Raymond James Financial, Inc. - Analyst : Okay. And then, just one last one -- quick. I'm sorry, what was the mixed dynamic in the Broadband segment between 1Q and 2Q that's causing the big drop in the margins?

Question: Victor Chu - Raymond James Financial, Inc. - Analyst : Okay. Thank you.

Question: Alyssa Shreves - Barclays Capital Inc. - Analyst : Hi. This is Alyssa Shreves, on for Tim Long, from Barclays. I was just looking at the SaaS piece in the Video business. It looks like it was down a little bit quarter to quarter. Can you talk a little bit about the customer dynamics you're seeing within this piece of the business, in terms of overall customer fiscal health?

Question: Alyssa Shreves - Barclays Capital Inc. - Analyst : Okay. That's really helpful. And then, you talked about some of the traditional Appliance refresh winds you're seeing. How should we think about where we are, in terms of [inning], with this traditional appliance refresh cycle? Are we still -- are we in the middle? How should we think about timing there? Thanks.

Question: Alyssa Shreves - Barclays Capital Inc. - Analyst : Great. Thank you so much.

Question: Tim Savageaux - Northland Capital Markets - Analyst : Hey. Good afternoon. Couple of questions here. But I'll start on this one first: Last quarter, you talked about amplifier availability or smart amplifier availability, I think, as, maybe, a gating factor or one factor that could be slowing down deployments; talked about a technology collaboration aimed to address that. I wonder if we can get an update on the status of that situation, from your perspective.

Question: Tim Savageaux - Northland Capital Markets - Analyst : Okay. And just to -- well, I mean, I guess the original plan, from a guidance perspective, was a pretty decent ramp in Broadband or pretty sharp ramp in Broadband throughout the year. It sounds like you would still expect that to be the case, at least on -- barring any other issues. With regard to some of the rest of the business, it looks like, based on spending targets, that your other big US customers are planning a pretty aggressive ramp and spending throughout the year. Is that something you see, from your perspective? And, again, leaving aside product availability, has anything change there, from your standpoint? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 28, 2025 / 9:00PM, HLIT.OQ - Q1 2025 Harmonic Inc Earnings Call

Question: Tim Savageaux - Northland Capital Markets - Analyst : Got it. Well, maybe let's wrap up, then, with just the Q2 guide in Broadband. You've mentioned having seen no changes in customer behavior. And I guess you'd call that a potential tariff impact. But is there anything, in particular, driving that guidance to be flat to down, given those comments about no changes in customer behavior?

Question: Tim Savageaux - Northland Capital Markets - Analyst : Got it. Thanks very much.