Harmonic Inc. · NASDAQ:HLIT
Harmonic — Q3 2021 Earnings Presentation
26 slides from Harmonic's earnings presentation, Nov 1, 2021
Slide 1: Third Quarter 2021 Earnings Conference Call
THIRD QUARTER 2021 EARNINGS CONFERENCE CALL Patrick Harshman, President & CEO Sanjay Kalra, CFO November 1, 2021 ©2021 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 2021 and beyond, and our Q4 and ful
Slide 3: Q3 2021 Highlights
Q3 2021 HIGHLIGHTS Corporate Cable Access Video Revenue up 33% yoy; Revenue up 43% yoy; Revenue up 26% yoy; EPS $0.09 Deployments up 79% SaaS Revenue up 69% Continued Strong Market Momentum ©2021 Harmonic Inc. All rights reserved worldwide. 3
Slide 4: Cable Access Segment Update
CABLE ACCESS SEGMENT UPDATE STRONG Q3 • Revenue $57.6 million, up 43% year over year • Commercially deployed with 68 operators, up 79% year over year • 3.9 million cable modems served, up 77% year over year EXECUTING MULTI-YEAR STRATEGY • Expanded fiber-to-the-home solution for rural opportunity • I
Slide 5: Video Segment Update
VIDEO SEGMENT UPDATE STRONG Q3 • Revenue $68.7 million, up 26% year over year • Gross margin 61.9%, new record • SaaS revenue up 69% year over year EXECUTING MULTI-YEAR STRATEGY • Several new Tier 1 international streaming SaaS customers • New streaming SaaS for rural operators, partnering with Jack
Slide 6: Financial Results and Outlook
FINANCIAL RESULTS AND OUTLOOK Sanjay Kalra, CFO ©2021 Harmonic Inc. All rights reserved worldwide. 6
Slide 7: Q3 2021 Financial Highlights
Q3 2021 FINANCIAL HIGHLIGHTS SOLID FINANCIAL RESULTS* • Revenue $126.3 million, up 33.1% year over year • Gross Margin 52.8%, up 60 basis points year over year • Adj. EBITDA $14.8 million, 11.7% of revenue, up 106% year over year • Non-GAAP EPS $0.09, up 200% year over year • Backlog and Deferred Re
Slide 8: Q3 2021 Revenue & Gross Margin Highlights
Q3 2021 REVENUE & GROSS MARGIN HIGHLIGHTS* Financial Metric Q3 Q2 Q3 Q3/Q2 Q3 Y/Y ($ Millions) 2021 2021 2020 Change Change Total Net Revenue $126.3 $113.4 $94.9 11.4% 33.1% Cable Access Revenue $57.6 $50.1 $40.3 15.0% 42.9% Video Revenue $68.7 $63.3 $54.6 8.5% 25.8% Gross Margin % 52.8% 53.9% 52.2%
Slide 9: Q3 2021 Earnings and Bookings Highlights
Q3 2021 EARNINGS AND BOOKINGS HIGHLIGHTS* Financial Metric Q3 Q2 Q3 Q3/Q2 Q3 Y/Y $ Millions (except EPS) 2021 2021 2020 Change Change Operating Expenses $54.9 $54.6 $45.3 0.5% 21.2% Adj. EBITDA $14.8 $9.5 $7.2 55.8% 105.6% Cable Access Adj. EBITDA $5.1 $6.1 $6.9 (16.4)% (26.1)% Video Adj. EBITDA $9.
Slide 10: Q3 2021 Balance Sheet & Cash Flow Highlights
Q3 2021 BALANCE SHEET & CASH FLOW HIGHLIGHTS Financial Metric Q3 Q2 Q3 ($ Millions) 2021 2021 2020 Cash $128.4 $115.2 $70.8 Cash Provided by (Used in) Operations $15.2 $16.8 $(3.3) Accounts Receivable $75.4 $100.6 $81.4 DSO 54 80 77 Inventory $51.9 $43.0 $36.8 Inventory Days 78 74 73 Backlog and Def
Slide 11: 2021 Financial Guidance Cable and Video Segments
2021 FINANCIAL GUIDANCE* CABLE SEGMENT Updated Prior Q4 Midpoint Updated Prior FY Midpoint Financial Metric Q4 Guidance Q4 Guidance Difference FY Guidance FY Guidance Difference Net Revenue ($M) $65.0 - $70.0 $50.0 - $60.0 $12.5 $214.0 - $219.0 $192.0 - $207.0 $17.0 Gross Margin % 40.0% - 41.0% 45.0
Slide 12: 2021 Financial Guidance Total Company
2021 FINANCIAL GUIDANCE* TOTAL COMPANY FY Updated Prior Q4 Midpoint FY Updated FY Prior Financial Metric Midpoint Q4 Guidance Q4 Guidance Difference Guidance Guidance Difference Net Revenue ($M) $147.0 – $157.0 $133.0 - $148.0 $11.5 $499.0 - $509.0 $470.0 - $495.0 $21.5 Gross Margin % 47.8% - 49.0%
Slide 13: 2021 Strategic Priorities
2021 STRATEGIC PRIORITIES Cable Access Video Grow Tier 1 CableOS deployments Expand streaming SaaS customer base Add new CableOS design wins Capitalize on broadcast transformations Expand addressed market through FTTH Grow revenue and operating profit Create value. Deliver industry-leading solutions
Slide 14: Q&A
Q&A ©2021 Harmonic Inc. All rights reserved worldwide. 14
Slide 15: 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 16: Q3 2021 GAAP to Non-GAAP Reconciliations
Q3 2021 GAAP TO NON-GAAP RECONCILIATIONS (IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2021 Harmonic Inc. All rights reserved worldwide. 16
Slide 17: Q2 2021 GAAP to Non-GAAP Reconciliations
Q2 2021 GAAP TO NON-GAAP RECONCILIATIONS (IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2021 Harmonic Inc. All rights reserved worldwide. 17
Slide 18: Q3 2020 GAAP to Non-GAAP Reconciliations
Q3 2020 GAAP TO NON-GAAP RECONCILIATIONS (IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2021 Harmonic Inc. All rights reserved worldwide. 18
Slide 19: YTD Q3 2021 GAAP to Non-GAAP Reconciliations
YTD Q3 2021 GAAP TO NON-GAAP RECONCILIATIONS (IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2021 Harmonic Inc. All rights reserved worldwide. 19
Slide 20: YTD Q3 2020 GAAP to Non-GAAP Reconciliations
YTD Q3 2020 GAAP TO NON-GAAP RECONCILIATIONS (IN THOUSANDS, EXCEPT EPS AND PERCENTAGES) ©2021 Harmonic Inc. All rights reserved worldwide. 20
Slide 21: Adj. EBITDA Reconciliations
ADJ. EBITDA RECONCILIATIONS (IN THOUSANDS) ©2021 Harmonic Inc. All rights reserved worldwide. 21
Slide 22: Adj. EBITDA Reconciliations
ADJ. EBITDA RECONCILIATIONS (IN THOUSANDS) ©2021 Harmonic Inc. All rights reserved worldwide. 22
Slide 23: Q4 2021 Guidance GAAP to Non-GAAP Reconciliations
Q4 2021 GUIDANCE GAAP TO NON-GAAP RECONCILIATIONS (IN MILLIONS, EXCEPT EPS AND PERCENTAGES) ©2021 Harmonic Inc. All rights reserved worldwide. 23
Slide 24: 2021 Guidance GAAP to Non-GAAP Reconciliations
2021 GUIDANCE GAAP TO NON-GAAP RECONCILIATIONS (IN MILLIONS, EXCEPT EPS AND PERCENTAGES) ©2021 Harmonic Inc. All rights reserved worldwide. 24
Slide 25: 2021 Adj. EBITDA Guidance Reconciliations
2021 ADJ. EBITDA GUIDANCE RECONCILIATIONS (IN THOUSANDS) ©2021 Harmonic Inc. All rights reserved worldwide. 25
Slide 26: Thank You
THANK YOU. ©2021 Harmonic Inc. All rights reserved worldwide. 26