Slide 1: First Quarter 2020 Earnings Conference Call
First Quarter 2020 Earnings Conference Call Patrick Harshman, President & CEO Sanjay Kalra, CFO Michael Smiley, Investor Relations April 27, 2020 ©2020 Harmonic Inc.©2020 All rights Harmonic reserved Inc. worldwide. All rights reserved worldwide. 1
Slide 2: Forward Looking Statements
Forward Looking Statements During the course of this presentation, we will provide projections and other forward looking statements regarding future events or the future financial performance of Harmonic, including expectations concerning our business strategy for 2020 and beyond, and our Q2 guidanc
Slide 3: Q1 2020 Highlights
Q1 2020 Highlights Financial results Solid Cable Access Mixed Video results impacted results and outlook: by Covid-19 and outlook Appliance headwinds SaaS acceleration Strong Cable Access and Streaming Video SaaS Position ©2020 Harmonic Inc. All rights reserved worldwide. 3
Slide 4: Cable Access Segment Update
Cable Access Segment Update Solid Q1 • Revenue* $24 million, up 85.6% year over year • Commercially deployed with 27 operators, up 17% sequentially • Over 1.3 million cable modems served, up 30% sequentially Positive Outlook • Deployed customers collectively serve >45 million cable modems • Customer
Slide 5: Video Segment Update
Video Segment Update Mixed Quarter Due To Covid-19 • Revenue* $54.4 million, down 19% year over year • Appliance sales most impacted – Reduced March demand, supply chain constraints and increased costs – Headwinds likely persist in Q2 • SaaS and Service sales remained healthy Streaming SaaS Growth A
Slide 6: Streaming SaaS Momentum
Streaming SaaS Momentum Scale Partnerships Brand Awareness >38 petabyte monthly Microsoft Azure New marketing streaming egress, Google Cloud Platform campaigns and website up >200% yoy AWS ©2020 Harmonic Inc. All rights reserved worldwide. 6
Slide 7: Financial Results and Outlook
Financial Results and Outlook Sanjay Kalra, CFO ©2020 Harmonic Inc. All rights reserved worldwide. 7 ©2020 Harmonic Inc. All rights reserved worldwide.
Slide 8: Q1 2020 Financial Highlights
Q1 2020 Financial Highlights* Cable Access Segment Revenue up 85.6% year over year SaaS and Service Revenue up 10.5% year over year Financial Metric Q1 Q4 Q1 Q1/Q4 Q1 Y/Y $ Millions 2020 2019 2019 Change Change Total Net Revenue $78.4 $122.2 $80.1 (35.8)% (2.1)% Cable Revenue $24.0 $43.0 $12.9 (44.1
Slide 9: Q1 2020 Financial Highlights
Q1 2020 Financial Highlights* Financial Metric Q1 Q4 Q1 Q1/Q4 Q1 Y/Y $ Millions (except EPS) 2020 2019 2019 Change Change Operating Expenses $47.9 $49.2 $47.5 (2.7)% 0.7% Operating Income (loss) $(9.5) $14.8 $(3.8) $(24.3) $(5.7) Adjusted EBITDA $(7.0) $17.6 $(1.3) $(24.6) $(5.7) EPS $(0.10) $0.12 $
Slide 10: Q1 2020 Balance Sheet & Cash Flow Highlights
Q1 2020 Balance Sheet & Cash Flow Highlights Financial Metric Q1 Q4 Q1 $ Millions 2020 2019 2019 Cash $71.7 $93.1 $69.9 Cash Provided by (Used in) Operations $(11.0) $30.2 $4.2 Accounts Receivable $93.1 $88.5 $58.9 DSO 107 65 66 Inventories $34.9 $29.0 $29.3 Inventory Days 78 45 72 Backlog and Defer
Slide 11: Financial Guidance Highlights
Financial Guidance Highlights* Financial Metric Q2’20 Guidance Total Revenue ($M) $62 - $77 Video Segment ($M) $42 - $50 Cable Access Segment ($M) $20 - $27 Gross Margin 47.0% - 48.0% Operating Expenses ($M) $45.0 - $47.0 Operating Loss ($M) $(18.0) - $(8.0) Adjusted EBITDA $(15.5) - $(5.5) EPS $(0.
Slide 12: 2020 Strategic Priorities
2020 Strategic Priorities Cable Access Video 1. Scale Tier-1 CableOS deployments 1. Grow live streaming ———————————————————— ——————————————————— 2. Secure additional CableOS design wins 2. Expand addressed market via SaaS ———————————————————— ——————————————————— 3. Launch new service & FTTH solution
Slide 13: Q&A
Q&A ©2020 Harmonic Inc. All rights reserved worldwide. 13 ©2020 Harmonic Inc. All rights reserved worldwide.
Slide 14: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures In establishing operating budgets, managing its business performance, and setting internal measurement targets, the Company excludes a number of items required by GAAP. Management believes that these accounting charges and credits, most of which are non-cash or non
Slide 15: Q1 2020 GAAP to Non-GAAP Reconciliations
Q1 2020 GAAP to Non-GAAP Reconciliations (in thousands, except EPS and percentages) ©2020 Harmonic Inc. All rights reserved worldwide. 15
Slide 16: Q4 2019 GAAP to Non-GAAP Reconciliations
Q4 2019 GAAP to Non-GAAP Reconciliations (in thousands, except EPS and percentages) ©2020 Harmonic Inc. All rights reserved worldwide. 16
Slide 17: Q1 2019 GAAP to Non-GAAP Reconciliations
Q1 2019 GAAP to Non-GAAP Reconciliations (in thousands, except EPS and percentages) ©2020 Harmonic Inc. All rights reserved worldwide. 17
Slide 18: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (in thousands) ©2020 Harmonic Inc. All rights reserved worldwide. 18
Slide 19: Q2 2020 Guidance GAAP to Non-GAAP Reconciliations
Q2 2020 Guidance GAAP to Non-GAAP Reconciliations (in millions, except EPS and percentages) ©2020 Harmonic Inc. All rights reserved worldwide. 19
Slide 20: Adjusted EBITDA Reconciliation on Financial Guidance
Adjusted EBITDA Reconciliation on Financial Guidance (in millions) ©2020 Harmonic Inc. All rights reserved worldwide. 20