Harmonic Inc. · NASDAQ:HLIT
Harmonic — Q1 2023 Earnings Presentation
24 slides from Harmonic's earnings presentation, May 8, 2023
Slide 1: First Quarter 2023 Earnings Conference Call
FIRST QUARTER 2023 EARNINGS CONFERENCE CALL Patrick Harshman, President & CEO Jeremy Rosenberg, Interim CFO May 8, 2023 ©2023 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 2023 and beyond, and our Q2 and ful
Slide 3: Q1 2023 Highlights
Q1 2023 HIGHLIGHTS Corporate Broadband Video Record Q1 Revenue Revenue up 23% SaaS Revenue up 72% $157.6 million Closed strategic multi-year Broadband and Video SaaS contracts ©2023 Harmonic Inc. All rights reserved worldwide. 3
Slide 4: Broadband Segment Update
BROADBAND SEGMENT UPDATE STRONG Q1 • Revenue $100.4 million, up 23% year over year • Commercially deployed with 94 operators, up 22% year over year • 18.4 million cable modems served, ~10% of global market EXECUTING MULTI-YEAR STRATEGY • Existing customers continuing to scale • Technology leadership
Slide 5: Video Segment Update
VIDEO SEGMENT UPDATE SOLID Q1 • Revenue $57.3 million, down 13.0% year over year • Gross margin 60.4%, up 160 basis points year over year • SaaS > 20% of segment revenue, up 72.2% year over year EXECUTING MULTI-YEAR STRATEGY • Sports streaming SaaS growth and 1st major broadcast migration to cloud •
Slide 6: Financial Results and Outlook
FINANCIAL RESULTS AND OUTLOOK Jeremy Rosenberg, Interim CFO ©2023 Harmonic Inc. All rights reserved worldwide. 6
Slide 7: Q1 2023 Financial Highlights
Q1 2023 FINANCIAL HIGHLIGHTS STRONG FINANCIAL RESULTS* • Revenue $157.6 million, up 6.9% year over year • EPS $0.12, up 50.0% year over year • Bookings $325.5 million, book to bill ratio of 2.1 • Record Backlog and Deferred Revenue $623.5 million, up 25.4% year over year INCREASED ANNUAL GUIDANCE FO
Slide 8: Q1 2023 Revenue & Gross Margin Highlights
Q1 2023 REVENUE & GROSS MARGIN HIGHLIGHTS* Financial Metric Q1 Q4 Q1 Q1/Q4 Q1 Y/Y ($ Millions) 2023 2022 2022 Change Change Total Net Revenue $157.6 $164.3 $147.4 (4.1)% 6.9% Broadband Revenue $100.4 $96.0 $81.6 4.5% 23.0% Video Revenue $57.3 $68.3 $65.8 (16.1)% (13.0)% Gross Margin (%) 53.9% 52.7%
Slide 9: Q1 2023 Earnings and Bookings Highlights
Q1 2023 EARNINGS AND BOOKINGS HIGHLIGHTS* Financial Metric Q1 Q4 Q1 Q1/Q4 Q1 Y/Y $ Millions (except EPS) 2023 2022 2022 Change Change Operating Expenses $66.2 $63.0 $58.4 5.2% 13.4% Adj. EBITDA $21.4 $26.6 $14.5 (19.3)% 48.3% Broadband Adj. EBITDA $21.6 $20.2 $9.7 6.8% 123.7% Video Adj. EBITDA $(0.2
Slide 10: Q1 2023 Balance Sheet & Cash Flow Highlights
Q1 2023 BALANCE SHEET & CASH FLOW HIGHLIGHTS Financial Metric Q1 Q4 Q1 ($ Millions) 2023 2022 2022 Cash $90.9 $89.6 $100.7 Cash Provided by (used in) Operations $6.3 $19.4 $(27.5) Accounts Receivable $88.1 $108.4 $115.6 DSO 50 59 71 Inventory $131.6 $120.9 $81.8 Inventory Days 163 140 95 Backlog and
Slide 11: Full Year 2023 Financial Guidance
FULL YEAR 2023 FINANCIAL GUIDANCE Improved Gross Profit, Adj. EBITDA and EPS ranges FY2023 Financial Metric Guidance* Prior Guidance* Midpoint Difference Total Revenue ($M) $705 - $740 $695 - $735 Gross Margin (%) 50.9% - 51.9% 49.8% - 51.3% Gross Profit ($M) $359 - $384 $346 - $377 Operating Expens
Slide 12: Q2 2023 Financial Guidance
Q2 2023 FINANCIAL GUIDANCE Q2 2023 Financial Metric Guidance* Total Revenue ($M) $161 - $171 Gross Margin (%) 51.8% - 52.9% Gross Profit ($M) $83 - $91 Operating Expenses ($M) $66 - $68 Adjusted EBITDA ($M) $20 - $25 Shares** 117.8 EPS $0.11 - $0.15 Cash ($M) $90 - $100 * Non-GAAP. Components may no
Slide 13: 2023 Financial Guidance | Broadband Segment
2023 FINANCIAL GUIDANCE | BROADBAND SEGMENT FY2023 Financial Metric Guidance* Prior Guidance* Midpoint Difference Net Revenue ($M) $450 - $470 $445 - $465 Gross Margin (%) 46.0% - 47.0% 45.0% - 46.0% Gross Profit ($M) $207 - $221 $200 - $214 Operating Expenses ($M) $123 - $128 $120 - $123 Adjusted E
Slide 14: 2023 Financial Guidance | Video Segment
2023 FINANCIAL GUIDANCE | VIDEO SEGMENT FY2023 Financial Metric Guidance* Prior Guidance* Midpoint Difference Net Revenue ($M) $255 - $270 $250 - $270 Gross Margin (%) 59.5% - 60.5% 58.5% - 60.5% Gross Profit ($M) $152 - $163 $146 - $163 Operating Expenses ($M) $139 - $143 $140 - $144 Adjusted EBITD
Slide 15: Wrap-Up & Q&A
WRAP-UP & Q&A ©2023 Harmonic Inc. All rights reserved worldwide. 15
Slide 16: 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 17: Q1 2023 GAAP to Non-GAAP Reconciliations
Q1 2023 GAAP TO NON-GAAP RECONCILIATIONS (UNAUDITED, IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2023 Harmonic Inc. All rights reserved worldwide. 17
Slide 18: Q4 2022 GAAP to Non-GAAP Reconciliations
Q4 2022 GAAP TO NON-GAAP RECONCILIATIONS (UNAUDITED, IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2023 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) ©2023 Harmonic Inc. All rights reserved worldwide. 19
Slide 20: Adj. EBITDA Reconciliations
ADJ. EBITDA RECONCILIATIONS (UNAUDITED, IN THOUSANDS) ©2023 Harmonic Inc. All rights reserved worldwide. 20
Slide 21: 2023 Guidance GAAP to Non-GAAP Reconciliations
2023 GUIDANCE GAAP TO NON-GAAP RECONCILIATIONS (UNAUDITED, IN MILLIONS, EXCEPT EPS AND PERCENTAGES) ©2023 Harmonic Inc. All rights reserved worldwide. 21
Slide 22: Q2 2023 Guidance GAAP to Non-GAAP Reconciliations
Q2 2023 GUIDANCE GAAP TO NON-GAAP RECONCILIATIONS (UNAUDITED, IN MILLIONS, EXCEPT EPS AND PERCENTAGES) ©2023 Harmonic Inc. All rights reserved worldwide. 22
Slide 23: 2023 Adj. EBITDA Guidance Reconciliations
2023 ADJ. EBITDA GUIDANCE RECONCILIATIONS (UNAUDITED, IN MILLIONS) ©2023 Harmonic Inc. All rights reserved worldwide. 23
Slide 24: Thank You
THANK YOU. ©2023 Harmonic Inc. All rights reserved worldwide. 24