Harmonic Inc. · NASDAQ:HLIT
Harmonic — Q4 2021 Earnings Presentation
28 slides from Harmonic's earnings presentation, Jan 31, 2022
Slide 1: Fourth Quarter 2021 Earnings Conference Call
FOURTH QUARTER 2021 EARNINGS CONFERENCE CALL Patrick Harshman, President & CEO Sanjay Kalra, CFO January 31, 2022 ©2022 Harmonic Inc. 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 2022 and beyond, and our Q1 and ful
Slide 3: Q4 2021 Highlights
Q4 2021 HIGHLIGHTS Corporate Cable Access Video Revenue up 18.5% yoy; Streaming Revenue up Revenue up 53% yoy; Record Backlog and 56.5% yoy; Deferred Revenue Deployments up 66% Strong Operating Profit Continued Strong Market Momentum ©2022 Harmonic Inc. All rights reserved worldwide. 3
Slide 4: Cable Access Segment Update
CABLE ACCESS SEGMENT UPDATE STRONG Q4 • Commercially deployed with 73 operators, up 66% year over year • Revenue $69.7 million, up 53% year over year • Adjusted EBITDA margin 9.6%, despite supply chain impact EXECUTING MULTI-YEAR STRATEGY • Bookings, backlog and sales pipeline continue to be strong
Slide 5: Video Segment Update
VIDEO SEGMENT UPDATE STRONG Q4 • Revenue $86.1 million, flat year over year • Gross margin 58.8%, up 260 basis points year over year • Streaming full year revenue $48.5 million, up 56.5% year over year EXECUTING MULTI-YEAR STRATEGY • Streaming SaaS powering >2,500 live sports events per month and gr
Slide 6: Financial Results and Outlook
FINANCIAL RESULTS AND OUTLOOK Sanjay Kalra, CFO ©2022 Harmonic Inc. All rights reserved worldwide. 6
Slide 7: Q4 2021 Financial Highlights
Q4 2021 FINANCIAL HIGHLIGHTS SOLID FINANCIAL RESULTS* • Record Revenue $155.8 million, up 18.5% year over year • Gross Margin 50.5%, down 480 basis points year over year • Non-GAAP EPS $0.16, down 20% year over year • Record Backlog and Deferred Revenue $441.0 million, up 51.8% year over year • Cash
Slide 8: Q4 2021 Revenue & Gross Margin Highlights
Q4 2021 REVENUE & GROSS MARGIN HIGHLIGHTS* Financial Metric Q4 Q3 Q4 Q4/Q3 Q4 Y/Y ($ Millions) 2021 2021 2020 Change Change Total Net Revenue $155.8 $126.3 $131.5 23.4% 18.5% Cable Access Revenue $69.7 $57.6 $45.5 21.0% 53.2% Video Revenue $86.1 $68.7 $86.0 25.3% 0.1% Gross Margin % 50.5% 52.8% 55.3
Slide 9: Q4 2021 Earnings and Bookings Highlights
Q4 2021 EARNINGS AND BOOKINGS HIGHLIGHTS* Financial Metric Q4 Q3 Q4 Q4/Q3 Q4 Y/Y $ Millions (except EPS) 2021 2021 2020 Change Change Operating Expenses $58.0 $54.9 $49.3 5.6% 17.6% Adj. EBITDA $23.8 $14.8 $26.4 60.8% (9.8)% Cable Access Adj. EBITDA $6.7 $5.1 $11.0 31.4% (39.1)% Video Adj. EBITDA $1
Slide 10: Q4 2021 Balance Sheet & Cash Flow Highlights
Q4 2021 BALANCE SHEET & CASH FLOW HIGHLIGHTS Financial Metric Q4 Q3 Q4 ($ Millions) 2021 2021 2020 Cash $133.4 $128.4 $98.6 Cash Provided by Operations $7.4 $15.2 $41.6 Accounts Receivable $88.5 $75.4 $66.2 DSO 51 54 45 Inventory $71.2 $51.9 $35.0 Inventory Days 83 78 54 Backlog and Deferred Revenue
Slide 11: Executing Long-Term Model – Cable Access
EXECUTING LONG-TERM MODEL – CABLE ACCESS* Financial Metric 2020 2021 2022 (E) 2024 Target Revenue (in millions) $136.3 $218.6 $295 - $307 $530+ Gross Margins 48.9% 42.6%** 41.0% - 43.6% 60%+ Gross Margin (in millions) $66.7 $93.2 $121 - $134 $318+ Adjusted EBITDA Margins 11.5% 9.6% 11.5% -14.0% 20%+
Slide 12: Executing Long-Term Model – Video
EXECUTING LONG-TERM MODEL – VIDEO* Financial Metric 2020 2021 2022 (E) 2024 Target Revenue (in millions) $243 $289 $275 - $289 $300+ Broadcast Revenue $212 $241 $215 - $225 $200+ Streaming Revenue $31 $48 $60 - $70 $100+ Gross Margins* 54.5% 58.7% 56.5% - 58.3% 60%+ Adjusted EBITDA Margins* 3.4% 12.
Slide 13: Full Year 2022 Financial Guidance
FULL YEAR 2022 FINANCIAL GUIDANCE* Financial Metric Cable Access Video Total Net Revenue ($M) $295 - $307 $275 - $289 $570 - $596 Gross Margin % 41.0% - 43.6% 56.5% - 58.3% 48.5% - 50.7% Gross Profit ($M) $121 - $134 $155 - $168 $276 - $302 Operating Expenses ($M) $92 - $96 $146 - $150 $238 - $246 A
Slide 14: Q1 2022 Financial Guidance
Q1 2022 FINANCIAL GUIDANCE* Financial Metric Cable Access Video Total Net Revenue ($M) $70 - $80 $64 - $69 $134 - $149 Gross Margin % 36.0% - 38.0% 56.0% - 57.0% 45.6% - 46.8% Gross Profit ($M) $25 - $30 $36 - $39 $61 - $69 Operating Expenses ($M) $22 - $23 $37 - $38 $59 - $61 Adj. EBITDA ($M) $4 –
Slide 15: 2022 Strategic Priorities
2022 STRATEGIC PRIORITIES Cable Access Video Grow Tier 1 CableOS deployments Grow Streaming SaaS customer base Add new CableOS design wins Extend SaaS technology and operations Expand addressed market through FTTH Capitalize on broadcast transformations Create value. Deliver industry-leading solutio
Slide 16: Q&A
Q&A ©2022 Harmonic Inc. All rights reserved worldwide. 16
Slide 17: 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 18: Q4 2021 GAAP to Non-GAAP Reconciliations
Q4 2021 GAAP TO NON-GAAP RECONCILIATIONS (IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2022 Harmonic Inc. All rights reserved worldwide. 18
Slide 19: Q3 2021 GAAP to Non-GAAP Reconciliations
Q3 2021 GAAP TO NON-GAAP RECONCILIATIONS (IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2022 Harmonic Inc. All rights reserved worldwide. 19
Slide 20: Q4 2020 GAAP to Non-GAAP Reconciliations
Q4 2020 GAAP TO NON-GAAP RECONCILIATIONS (IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2022 Harmonic Inc. All rights reserved worldwide. 20
Slide 21: FY 2021 GAAP to Non-GAAP Reconciliations
FY 2021 GAAP TO NON-GAAP RECONCILIATIONS (IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2022 Harmonic Inc. All rights reserved worldwide. 21
Slide 22: FY 2020 GAAP to Non-GAAP Reconciliations
FY 2020 GAAP TO NON-GAAP RECONCILIATIONS (IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2022 Harmonic Inc. All rights reserved worldwide. 22
Slide 23: Adj. EBITDA Reconciliations
ADJ. EBITDA RECONCILIATIONS (IN THOUSANDS) ©2022 Harmonic Inc. All rights reserved worldwide. 23
Slide 24: Adj. EBITDA Reconciliations
ADJ. EBITDA RECONCILIATIONS (IN THOUSANDS) ©2022 Harmonic Inc. All rights reserved worldwide. 24
Slide 25: 2022 Guidance GAAP to Non-GAAP Reconciliations
2022 GUIDANCE GAAP TO NON-GAAP RECONCILIATIONS (IN MILLIONS, EXCEPT EPS AND PERCENTAGES) ©2022 Harmonic Inc. All rights reserved worldwide. 25
Slide 26: Q1 2022 Guidance GAAP to Non-GAAP Reconciliations
Q1 2022 GUIDANCE GAAP TO NON-GAAP RECONCILIATIONS (IN MILLIONS, EXCEPT EPS AND PERCENTAGES) ©2022 Harmonic Inc. All rights reserved worldwide. 26
Slide 27: 2022 Adj. EBITDA Guidance Reconciliations
2022 ADJ. EBITDA GUIDANCE RECONCILIATIONS (IN THOUSANDS) ©2022 Harmonic Inc. All rights reserved worldwide. 27
Slide 28: Thank You.
THANK YOU. ©2022 Harmonic Inc. All rights reserved worldwide. 28