Harmonic Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net revenue for Q3 2026 increased 64% year-over-year to $148.8 million, compared to $90.5 million in Q3 2025.
• GAAP operating profit for Q3 2026 was $26.2 million, compared to $4.0 million in Q3 2025.
• Non-GAAP operating profit for Q3 2026 was $33.0 million, compared to $10.1 million in Q3 2025.
• GAAP net income per share for Q3 2026 was $0.16, compared to a loss of $0.00 per share in Q3 2025.
• Non-GAAP net income per share for Q3 2026 was $0.23, compared to $0.07 in Q3 2025.
• Backlog and deferred revenue increased 58% year-over-year to $534.0 million, compared to $338.0 million in Q3 2025.
• Cash and cash equivalents were $142.8 million as of October 2, 2026, compared to $124.1 million as of December 31, 2025.
• $160 million was available under the revolving credit facility as of October 2, 2026, following a $75 million repayment in the quarter.
• Gross margin for Q3 2026 was 51.8% (GAAP) and 52.1% (Non-GAAP).

Guidance and Future Outlook:

• Full-year 2026 revenue outlook raised to $545 million – $555 million.
• Q4 2026 GAAP net revenue guidance is $141 million – $151 million.
• Q4 2026 GAAP operating profit guidance is $22 million – $28 million.
• Q4 2026 GAAP net income per share guidance is $0.13 – $0.16.
• Full-year 2026 GAAP operating profit guidance is $93 million – $99 million.
• Full-year 2026 GAAP net income per share guidance is $0.54 – $0.57.
• Full-year 2026 Non-GAAP operating profit guidance is $118 million – $124 million.
• Full-year 2026 Non-GAAP net income per share guidance is $0.80 – $0.84.

Business Segments and Product Lines:

• Rest-of-Market revenue more than doubled year-over-year to a record 46% of total revenue.
• Rest-of-Market bookings represented over 60% of total Q3 bookings.
• Commercially deployed cOS solution with 167 customers, serving 52.6 million CPE devices.
• Launched cOS SensAI, a recurring revenue service, in September following extended trials.
• Unveiled Recon platform, developed in collaboration with Comcast, for fiber reliability and network intelligence.
• Acquired a vendor-agnostic fiber management and provisioning platform company.
• Appliance and integration revenue was $137.2 million; SaaS and service revenue was $11.7 million in Q3 2026.

Market and Competitive Landscape:

• Top 2 customers accounted for 54% of Q3 2026 revenue, down from 62% in Q3 2025.
• Americas region accounted for 90% of Q3 2026 revenue, with EMEA at 7% and APAC at 3%.
• The company operates as a pure-play broadband company following the divestiture of its Video Business.

Risks and Challenges:

• Q3 2026 GAAP operating profit included approximately $1.5 million in stranded costs related to the Video business divestiture.
• Full-year 2026 GAAP operating profit includes approximately $7.6 million of stranded costs associated with the Video business divestiture.
• The press release notes standard forward-looking statement risks including customer concentration, capital spending delays, technology trends, and supply chain dependencies.

Management Commentary and Tone:

• CEO Nimrod Ben-Natan described the quarter as a "breakout third quarter" with "accelerating momentum."
• Management expressed confidence in delivering "sustainable, profitable growth" while investing to increase addressable markets.
• The company continues to execute its strategy by introducing new fiber and intelligence products.

Other Key Points:

• On June 16, 2026, the company completed the disposition of its Video Business to Leone Media Inc. (d/b/a MediaKind) for a purchase price of $145 million in cash.
• Proceeds from the Video Business disposition were $137.9 million paid at closing, subject to post-closing adjustments expected to be finalized in Q1 2027.
• The company is now a single reportable segment: Broadband.
• Net proceeds from the divestiture were $131.963 million in the nine months ended October 2, 2026, net of transaction costs and cash retained.
• The company repurchased common stock for $46.6 million in the nine months ended October 2, 2026.
• Accounts receivable increased to $117.1 million as of October 2, 2026, from $85.9 million as of December 31, 2025.
• Inventories increased to $94.8 million as of October 2, 2026, from $47.8 million as of December 31, 2025.