Harmonic Inc Q2 2025 Earnings Call Transcript

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

Question: Simon Leopold - Raymond James - Analyst : Thank you very much for taking the question. I did -- I'm interested in your description of the strength from what we refer to as Others and Rest of World customers. So I guess in your first quarter of the year, if we exclude the business with Comcast and Charter, that was about 54% of your revenue. And I'm just wondering if you could characterize or quantify actually what the ex-Comcast, Charter percent and dollar value was this quarter to help us quantify that strength in Rest of World.

Question: Simon Leopold - Raymond James - Analyst : Okay. And then the other fact I wanted to follow up is you certainly sound, I think, a little bit more optimistic about 2026 than you did on the prior conference call. And when I'm looking at the forecast from the third-party researchers that you typically site, it looks like for your served market, they're expecting good growth in 2026 as well, roughly 40% growth in the year. Could you give us your thoughts, even if you're not prepared yet for a formal forecast, of how you're thinking about that trajectory for 2026? 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. JULY 28, 2025 / 9:00PM, HLIT.OQ - Q2 2025 Harmonic Inc Earnings Call

Question: Simon Leopold - Raymond James - Analyst : Thank you.

Question: Ryan Koontz - Needham & Company LLC - Analyst : Great, thanks. Wondering if you can talk a little bit more detail about DOCSIS 4.0 Unified in light of your soft Broadband guide commentary that you're making early RPD shipments there. We've seen some recovery here in your 2Q sales to Comcast. Where is the industry now today end of July on DOCSIS 4.0 Unified readiness? And then what kind of progress have you specifically made on your product platform? 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. JULY 28, 2025 / 9:00PM, HLIT.OQ - Q2 2025 Harmonic Inc Earnings Call

Question: Ryan Koontz - Needham & Company LLC - Analyst : That's really helpful, Nimrod. And with respect to Charter, who you mentioned fell off the 10%, we saw them cut CapEx a few days ago on the year. How should investors think about that opportunity for you? Do you see this really as just a pushout generally in their program? Or is there other competitive changes?

Question: Ryan Koontz - Needham & Company LLC - Analyst : Yeah. I think we've heard about them deploying amplifiers, I think, as part of their Phase 2, but perhaps doing that in phases with other products.

Question: Ryan Koontz - Needham & Company LLC - Analyst : Great, Right. And just a quick question for Walter on the strong bookings in the quarter. Walter, any change in the mix there of bookings? Is this more longer term for '26? How should we think about that step up?

Question: Ryan Koontz - Needham & Company LLC - Analyst : All right. Thanks very much.

Question: George Notter - Wolfe Research LLC - Analyst : Hi, guys. Thanks very much. I was just curious about anything more you can tell us on the plan around tariffs. I think you guys make quite a bit of your nodes in Malaysia. It feels like the tariff is going to be reasonably substantial in Malaysia as that gets negotiated. And I guess I'm just curious about what kind of offsets would you have? Could you move manufacturing? Is there some kind of flexibility you can kind of walk us through that would help your situation on nodes and margins there? And if you do have, say, a 20% or 25% tariff in Malaysia, what kind of impact might you expect through the P&L? Thanks.

Question: George Notter - Wolfe Research LLC - Analyst : Got it. I assume that's -- a high percentage of your nodes are exempt. That's what's going on here, I presume. Is that correct? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 28, 2025 / 9:00PM, HLIT.OQ - Q2 2025 Harmonic Inc Earnings Call

Question: George Notter - Wolfe Research LLC - Analyst : Okay. Thank you.

Question: Tim Savageaux - Northland Securities Inc - Analyst : Hey, good afternoon. A couple of questions. First, I think you mentioned some positive indications for '26 and, I think, above-trend growth. Clearly, that would beg a question about off what baseline. I know you're not guiding for the year. Your commentary sounds flattish throughout the second half. But you usually do see some degree of upward seasonality in Q4 and I know they've been all over the place of late. But I wonder if you have any commentary there. Should we take -- should we assume Q4 looks like a lot like Q3 or could we have some seasonality in thinking about the baseline for that above-trend growth in '26?

Question: Tim Savageaux - Northland Securities Inc - Analyst : Okay. And to take it right from there in terms of '26, and obviously, we've been -- I think we're looking at the beginning of this year and going to get declines of a similar magnitude. But for '26, I assume you'd like to hit, as an initial goal, a new high watermark for revenue in the business, kind of the nearly $500 million you achieved in '24. Is that safe to say?

Question: Tim Savageaux - Northland Securities Inc - Analyst : Yes. Fair enough. Last question for me, I guess, and you mentioned Charter not on the 10% customer list. And I mean is there any way to assess inventory over there? Yes, they pushed some CapEx, but it's still more this year than last year and more in the second half than the first. And so I know that's not a quarter-to-quarter relationship. So second half of last year, you shipped them maybe $80 million worth of gear. First half of this year, I don't know, $25 million, maybe $10 million in the quarter. So is there a way for you to assess what's going on there in terms of what they have deployed, what inventory they might have and how that might relate to their kind of run rate deployment schedule?

Question: Tim Savageaux - Northland Securities Inc - Analyst : Okay, thanks.