Harmonic Inc Q4 2020 Earnings Call Transcript

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

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Patrick, Sanjay, I just want to start off with a broader question about the strength in 2021. You, obviously, have strong backlog as well as contracted revenue. You're guiding to strong revenue growth. But I think Sanjay, in your prepared remarks, you just mentioned you feel like visibility into the full year is less than usual. I just wanted to see what's driving that comment? What's driving kind of the impression that either is it like customers are not willing to spend? Or are you more hesitant about their piece of spending? Just wanted to check on that.

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Okay. Okay. Got it. And just a quick follow-up, Sanjay. I think this is also for you. When I look at gross margins, you're guiding to 54.5% at the high end for 2021. I know 2019 is probably not the best compared just given the software revenue you had. But 2018, you had done 54% gross margin at a lower revenue base. And I'm just wondering why isn't there more upside on the gross margin at the high end of the guide? Why isn't there more kind of leverage on that, just given the higher revenue guide versus 2018?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Okay. Good. Sanjay, just quickly, are there any supply chain constraints that are limiting factors on gross margin at all in 2021? Anything on that aspect?