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1. Company Snapshot

1.a. Company Description

Harmonic Inc., together with its subsidiaries, provide video delivery software, products, system solutions, and services worldwide.The company operates in two segments, Video and Cable Access.The Video segment sells video processing, production, and playout solutions and services to cable operators, and satellite and telecommunications Pay-TV service providers, as well as to broadcast and media, including streaming media companies.


This segment's video processing appliance solutions include network management and application software, and hardware products, such as encoders, video servers, high-density stream processing systems, and edge processors.This segment also provides software-as-a-service (SaaS) solutions, which enables the packaging and delivery of streaming services, including live streaming, video-on-demand, catch-up TV, start-over TV, network-DVR, and cloud-DVR services through HTTP streaming to various device along with dynamic and personal ad insertion.The Cable Access segment offers CableOS software-based cable access solutions; and CableOS central cloud services primarily to cable operators.


Its products enable customers to create, prepare, store, playout, and deliver a range of broadcast and streaming video services to consumer devices, including televisions, personal computers, laptops, tablets, and smart phones.The company also provides technical support and professional services, such as maintenance and support, consulting, implementation, program management, technical design and planning, building and site preparation, integration and equipment installation, end-to-end system testing, and training.It sells its products through its direct sales force, as well as through independent resellers and systems integrators.


The company was incorporated in 1988 and is headquartered in San Jose, California.

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1.b. Last Insights on HLIT

Harmonic Inc.'s recent performance was negatively impacted by its Q4 earnings miss, with quarterly earnings of $0.06 per share, falling short of the Zacks Consensus Estimate of $0.1 per share. The company's sale of its Video business is proceeding as anticipated. Despite this, Harmonic has made significant advancements in its hybrid streaming solution, introducing AI and cloud innovations. Additionally, the company will showcase its latest fiber advancements at the FTTH Conference 2026. Harmonic received an average recommendation of "Hold" from brokerages, with two sell ratings, one hold rating, and two buy ratings.

1.c. Company Highlights

2. Harmonic's Q4 2025 Earnings: A Strong Finish to a Transformative Year

Harmonic reported a robust fourth quarter, with total company net revenue reaching $157.3 million and broadband revenue coming in at $98.2 million, above guidance. Adjusted EBITDA was $12.1 million, and EPS was $0.14, beating estimates of $0.1. The strong financial performance was driven by record quarterly broadband bookings of $346.9 million, resulting in a 3.5 book-to-bill ratio and a significant year-over-year increase in backlog and deferred revenue. The company's free cash flow for the year was $97 million, up $44 million from the prior year, demonstrating strong profitability and cash generation.

Publication Date: Mar -09

📋 Highlights
  • Record Q4 Bookings & Backlog Growth: $346.9M bookings (3.5 book-to-bill ratio) and $573.8M backlog (73% YoY), with $307M (110% YoY) in current backlog.
  • Video Business Sale: $145M cash sale to MediaKind to simplify operations and focus on broadband growth, enhancing balance sheet liquidity.
  • Free Cash Flow Growth: $97M free cash flow in 2025 (up $44M YoY), with $9.6M generated in Q4 despite $6M net memory pricing impact in guidance.
  • DOCSIS 4.0 & Fiber Momentum: Field validation with Vodafone Germany and accelerated fiber adoption, including major wins with Mexican MSO izzi.
  • 2026 Revenue Guidance: Broadband growth of 22-33% (Q4 bookings-driven) and $440-480M revenue, with 30%+ RoW growth and 33% YoY RoW revenue (41% of total revenue).

Operational Highlights

The company's broadband business saw 9% sequential growth, driven by increasing adoption of its platform globally and growing confidence in its technology. Harmonic's fiber business continues to scale rapidly, with major wins in North America and Europe. The company's Unified DOCSIS 4.0 strategy is gaining traction, with several major customers already deploying the technology.

Valuation and Outlook

With a current P/E ratio of -24.28, Harmonic's stock is trading at a discount to its peers. However, the company's strong growth prospects and improving operational performance are expected to drive the stock price higher. The expected growth in broadband revenue, driven by the increasing adoption of the company's technology, is expected to drive earnings growth in 2026. Analysts estimate revenue growth of 16.2% next year, with EPS expected to reach $0.46 to $0.63.

Guidance and Risks

Harmonic guided Q1 2026 broadband revenue to be between $100 million to $105 million, with gross margins between 54% to 55%. The company also expects to maintain its strong cash generation, with free cash flow expected to be a key driver of its capital allocation priorities. However, the company faces risks related to memory pricing, with an expected net $6 million impact in 2026. Additionally, there is always risk that deliveries get delayed, which could impact revenue or have knock-on effects on delivery schedules later in the year.

Valuation Metrics

Harmonic's valuation metrics indicate a relatively attractive price. The P/S Ratio is 2.06, and the EV/EBITDA ratio is not directly available but can be inferred to be around 28.08. The company's ROE is -10.08%, but this is expected to improve as the company's earnings grow. The Free Cash Flow Yield is 9.2%, indicating a strong ability to generate cash.

3. NewsRoom

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Harmonic Introduces Breakthrough AI Orchestration Service for Live Video Workflows

Apr -14

Source: prnewswire.com

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Harmonic Extends Hybrid Streaming Leadership with AI and Cloud Innovations

Apr -09

Source: prnewswire.com

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JPMorgan Chase & Co. Has $1.96 Million Holdings in Harmonic Inc. $HLIT

Apr -08

Source: defenseworld.net

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Harmonic to Unveil Breakthrough Fiber Innovations at the FTTH Conference 2026

Apr -07

Source: prnewswire.com

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TDF Expands Broadcast Channel Lineup with Harmonic

Apr -01

Source: prnewswire.com

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KBRO Leverages Harmonic's Fiber-on-Demand Solution for Network Upgrades

Mar -30

Source: prnewswire.com

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Harmonic Inc. (NASDAQ:HLIT) Given Average Recommendation of “Hold” by Brokerages

Mar -29

Source: defenseworld.net

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Harmonic Delivers Winning Live Sports Streaming Innovations

Mar -26

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.40%)

6. Segments

Broadband

Expected Growth: 10.4%

Growing demand for high-speed internet, increasing adoption of IP-based video services, and need for cost-effective infrastructure upgrades drive the growth of Harmonic's Broadband solution, enabling cable operators to deliver triple-play services over existing coaxial cables.

Video

Expected Growth: 10.4%

Growing demand for high-quality video content, increasing adoption of OTT platforms, and advancements in encoding and transcoding technologies drive the growth of Harmonic's video solutions.

7. Detailed Products

VOS360

A cloud-based video SaaS platform that enables media companies to monetize their content across multiple screens

XOS

A software-based media processing platform that enables the creation of high-quality video content

Electra XOS

A high-density, modular video processing platform that enables the creation of high-quality video content

Spectrum X

A media server platform that enables the creation and delivery of high-quality video content

ProStream

A high-density, multi-screen video processing platform that enables the creation of high-quality video content

ProMedia

A software-based video processing platform that enables the creation of high-quality video content

8. Harmonic Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Harmonic Inc. faces moderate threat from substitutes due to the availability of alternative products in the market.

Bargaining Power Of Customers

Harmonic Inc. has a large customer base, giving them significant bargaining power, which can affect the company's pricing and revenue.

Bargaining Power Of Suppliers

Harmonic Inc. has a diverse supplier base, reducing the bargaining power of individual suppliers and minimizing the risk of supply chain disruptions.

Threat Of New Entrants

Harmonic Inc. operates in a moderately competitive industry, with barriers to entry that are not too high, making it possible for new entrants to join the market.

Intensity Of Rivalry

Harmonic Inc. operates in a highly competitive industry, with many established players, leading to intense rivalry and competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 23.88%
Debt Cost 3.95%
Equity Weight 76.12%
Equity Cost 8.44%
WACC 7.37%
Leverage 31.38%

11. Quality Control: Harmonic Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Sonim Technologies

A-Score: 5.0/10

Value: 10.0

Growth: 4.7

Quality: 5.1

Yield: 0.0

Momentum: 10.0

Volatility: 0.0

1-Year Total Return ->

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Stock-Card
Akoustis Technologies

A-Score: 4.6/10

Value: 9.8

Growth: 4.8

Quality: 5.1

Yield: 0.0

Momentum: 1.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Harmonic

A-Score: 4.3/10

Value: 5.7

Growth: 5.9

Quality: 7.2

Yield: 0.0

Momentum: 2.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Ondas

A-Score: 4.1/10

Value: 6.4

Growth: 4.8

Quality: 2.9

Yield: 0.0

Momentum: 10.0

Volatility: 0.3

1-Year Total Return ->

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Stock-Card
Viasat

A-Score: 3.6/10

Value: 6.5

Growth: 2.0

Quality: 2.4

Yield: 0.0

Momentum: 10.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Comtech

A-Score: 3.1/10

Value: 9.5

Growth: 0.8

Quality: 2.5

Yield: 1.0

Momentum: 4.0

Volatility: 1.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.78$

Current Price

9.78$

Potential

-0.00%

Expected Cash-Flows