Harmonic Inc. · NASDAQ:HLIT
Harmonic — Q2 2022 Earnings Presentation
28 slides from Harmonic's earnings presentation, Aug 1, 2022
Slide 1: Second Quarter 2022 Earnings Conference Call
SECOND QUARTER 2022 EARNINGS CONFERENCE CALL Patrick Harshman, President & CEO Sanjay Kalra, CFO August 1, 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 Q3 and ful
Slide 3: Q2 2022 Highlights
Q2 2022 HIGHLIGHTS Corporate Cable Access Video Revenue up 39% Revenue up 62% SaaS Revenue up 69% Adj. EBITDA 15.5% Strong Demand and Execution Continues ©2022 Harmonic Inc. All rights reserved worldwide. 3
Slide 4: Cable Access Segment Update
CABLE ACCESS SEGMENT UPDATE STRONG Q2 RESULTS • Revenue $81.2 million, up 62.2% year over year • Adj. EBITDA 14.3% • 8.5 million cable modems served, up 159% year over year EXECUTING MULTI-YEAR STRATEGY • New 10G DOCSIS innovations and customer engagements • >$10 million of Fiber orders received in
Slide 5: Video Segment Update
VIDEO SEGMENT UPDATE STRONG Q2 RESULTS • Revenue $76.2 million, up 20.3% year over year • Adj. EBITDA 16.7% • SaaS revenue up 68.7% year over year EXECUTING MULTI-YEAR STRATEGY • New Tier 1 live sports streaming SaaS wins and expansions • SaaS revenue growth forecast >50% for 2022 • 2022 – 2024 plan
Slide 6: Financial Results and Outlook
FINANCIAL RESULTS AND OUTLOOK Sanjay Kalra, CFO ©2022 Harmonic Inc. All rights reserved worldwide. 6
Slide 7: Q2 2022 Financial Highlights
Q2 2022 FINANCIAL HIGHLIGHTS STRONG FINANCIAL RESULTS* • Record Revenue $157.4 million, up 38.8% year over year • Adj. EBITDA Margins 15.5%, up 710 basis points year over year • EPS $0.16, up 220.0% year over year • Cash at $121.8 million, up 6% year over year • Backlog and Deferred Revenue $477.8 m
Slide 8: Q2 2022 Revenue & Gross Margin Highlights
Q2 2022 REVENUE & GROSS MARGIN HIGHLIGHTS* Financial Metric Q2 Q1 Q2 Q2/Q1 Q2 Y/Y ($ Millions) 2022 2022 2021 Change Change Total Net Revenue $157.4 $147.4 $113.4 6.8% 38.8% Cable Access Revenue $81.2 $81.6 $50.1 (0.4)% 62.2% Video Revenue $76.2 $65.8 $63.3 15.8% 20.3% Gross Margin (%) 52.8% 47.3% 5
Slide 9: Q2 2022 Earnings and Bookings Highlights
Q2 2022 EARNINGS AND BOOKINGS HIGHLIGHTS* Financial Metric Q2 Q1 Q2 Q2/Q1 Q2 Y/Y ($ Millions | except EPS) 2022 2022 2021 Change Change Operating Expenses $61.7 $58.4 $54.6 5.6% 13.0% Adj. EBITDA $24.3 $14.5 $9.5 68.5% 156.0% Cable Access Adj. EBITDA $11.6 $9.7 $6.1 20.2% 90.1% Video Adj. EBITDA $12
Slide 10: Q2 2022 Balance Sheet & Cash Flow Highlights
Q2 2022 BALANCE SHEET & CASH FLOW HIGHLIGHTS Financial Metric Q2 Q1 Q2 ($ Millions) 2022 2022 2021 Cash $121.8 $100.7 $115.2 Cash Provided by (used in) Operations $21.8 $(27.5) $16.8 Accounts Receivable $106.4 $115.6 $100.6 DSO 61 71 80 Inventory $82.6 $81.8 $43.0 Inventory Days 100 95 74 Backlog an
Slide 11: Full Year 2022 Financial Guidance
FULL YEAR 2022 FINANCIAL GUIDANCE Improved Revenue, Gross Profit, Adj. EBITDA and EPS ranges FY2022 Financial Metric Guidance* Prior Guidance* Midpoint Difference Total Revenue ($M) $607 - $627 $585 - $625 Gross Margin (%) 49.4% - 50.7% 49.1% - 50.2% Gross Profit ($M) $300 - $318 $287 - $314 Operati
Slide 12: Q3 2022 Financial Guidance
Q3 2022 FINANCIAL GUIDANCE Q3 2022 Financial Metric Guidance* Total Revenue ($M) $147 - $157 Gross Margin (%) 48.9% - 50.5% Gross Profit ($M) $72 - $79 Operating Expenses ($M) $60 - $63 Adjusted EBITDA ($M) $15 - $19 Shares 109.5 EPS $0.08 - $0.12 Cash ($M) $110 - $120 * Non-GAAP. Components may not
Slide 13: 2022 Financial Guidance | Cable Access Segment
2022 FINANCIAL GUIDANCE | CABLE ACCESS SEGMENT FY2022 Financial Metric Guidance* Prior Guidance* Midpoint Difference Net Revenue ($M) $335 - $345 $310 - $338 Gross Margin (%) 42.1% - 43.5% 42.0% - 43.4% Gross Profit ($M) $141 - $150 $130 - $147 Operating Expenses ($M) $94 - $100 $93 - $101 Adjusted
Slide 14: 2022 Financial Guidance | Video Segment
2022 FINANCIAL GUIDANCE | VIDEO SEGMENT FY2022 Financial Metric Guidance* Prior Guidance* Midpoint Difference Net Revenue ($M) $272 - $282 $275 - $287 Gross Margin (%) 58.3% - 59.5% 57.0% - 58.3% Gross Profit ($M) $159 - $168 $157 - $167 Operating Expenses ($M) $145 - $148 $145 - $150 Adjusted EBITD
Slide 15: 2022 Strategic Priorities
2022 STRATEGIC PRIORITIES Cable Access Video Drive Tier 1 deployment success Grow streaming SaaS customer base Win and launch new Tier 1 accounts Extend SaaS capabilities for live sports Expand addressed market through Fiber Capitalize on broadcast transformations Create value. Deliver industry-lead
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: Q2 2022 GAAP to Non-GAAP Reconciliations
Q2 2022 GAAP TO NON-GAAP RECONCILIATIONS (UNAUDITED, IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2022 Harmonic Inc. All rights reserved worldwide. 18
Slide 19: Q1 2022 GAAP to Non-GAAP Reconciliations
Q1 2022 GAAP TO NON-GAAP RECONCILIATIONS (UNAUDITED, IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2022 Harmonic Inc. All rights reserved worldwide. 19
Slide 20: Q2 2021 GAAP to Non-GAAP Reconciliations
Q2 2021 GAAP TO NON-GAAP RECONCILIATIONS (IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2022 Harmonic Inc. All rights reserved worldwide. 20
Slide 21: YTD Q2 2022 GAAP to Non-GAAP Reconciliations
YTD Q2 2022 GAAP TO NON-GAAP RECONCILIATIONS (UNAUDITED, IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2022 Harmonic Inc. All rights reserved worldwide. 21
Slide 22: YTD Q2 2021 GAAP to Non-GAAP Reconciliations
YTD Q2 2021 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 (UNAUDITED, IN THOUSANDS) 3 months ended July 1, 2022 ©2022 Harmonic Inc. All rights reserved worldwide. 23
Slide 24: Adj. EBITDA Reconciliations
ADJ. EBITDA RECONCILIATIONS (UNAUDITED, IN THOUSANDS) 6 months ended July 1, 2022 ©2022 Harmonic Inc. All rights reserved worldwide. 24
Slide 25: 2022 Guidance GAAP to Non-GAAP Reconciliations
2022 GUIDANCE GAAP TO NON-GAAP RECONCILIATIONS (UNAUDITED, IN MILLIONS, EXCEPT EPS AND PERCENTAGES) ©2022 Harmonic Inc. All rights reserved worldwide. 25
Slide 26: Q3 2022 Guidance GAAP to Non-GAAP Reconciliations
Q3 2022 GUIDANCE GAAP TO NON-GAAP RECONCILIATIONS (UNAUDITED, 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 (UNAUDITED, IN MILLIONS) ©2022 Harmonic Inc. All rights reserved worldwide. 27
Slide 28: Thank You
THANK YOU. ©2022 Harmonic Inc. All rights reserved worldwide. 28