Harmonic Inc. · NASDAQ:HLIT

Harmonic — Q4 2019 Earnings Presentation

35 slides from Harmonic's earnings presentation, February 2020

Slide 2: Harmonic-at-a-Glance
Harmonic-at-a-Glance CABLE ACCESS $403M SILICON >5,000 INNOVATION & VIDEO VALLEY VELOCITY Two market-leading 2019 Revenue Headquarters Media & service >40 patents filed in business units provider customers last 24 months Market Leader in Virtualized Cable Access & Live Video Streaming ©2020 Harmonic
Slide 3: Gigabit Access & Streaming Video Growth
Gigabit Access & Streaming Video Growth Two Major Market Transformation Opportunities 26% CAGR | 2017-2022 IP traffic expected to nearly triple from 2017 to 2022 Streaming video expected to account for >80% *Figures (n) refer to 2017, 2022 traffic share | Source: Cisco VNI Global IP Traffic Forecast
Slide 4: Two Focused Business Units
Two Focused Business Units Addressing Gigabit and Streaming Growth CABLE ACCESS VIDEO • Invented and leading virtualized cable access • Market leader in premium live video • Foundational deployments with industry leaders • Leading live OTT streaming transformation • Strong cable customer relationshi
Slide 5: Cable Access Business Overview
VIRTUALIZED CABLE ACCESS MADE SMARTER CABLE ACCESS BUSINESS OVERVIEW ©2020 Harmonic Inc.©2020 All rights Harmonic reserved Inc. worldwide. All rights reserved worldwide. 5
Slide 6: Virtualization Market Poised For Growth
Virtualization Market Poised For Growth Harmonic CableOS® Leading the Way vCMTS & Remote PHY Revenue Market Growth Forecast ($M)* $1,200 $900 Remote PHY / DAA $600 vCMTS Software $300 $- 2019 2020 2021 2022 2023 * Source: Dell’Oro | July 2019 Report. Does not include FTTH or managed services. ©2020
Slide 7: Virtualization Enabling Multi-Gigabit Broadband
Virtualization Enabling Multi-Gigabit Broadband Harmonic Customers Publicly Reporting Compelling Results 192 Service Groups 70% 20 1 30m 15s 20,000 70 Power Savings Rack Reduction Mean Time to Detect HHP Reach from Targeted SW Upgrades ©2020 Harmonic Inc. All rights reserved worldwide. 7
Slide 8: Virtualized Cable Access Leadership
Virtualized Cable Access Leadership STRATEGIC >1 MILLION INNOVATION RELATIONSHIP cable modems served, Foundational and industry-leading up >95% year-over-year virtualization patent + 30 deployment unique patent filings Harmonic CableOS is Only Virtualized Solution Deployed ©2020 Harmonic Inc. All ri
Slide 9: Scaling Global Customer Base
Scaling Global Customer Base Innovative US Tier 2 Operator Global Industry Leader European Tier 1 Operator +19 Additional Global Cable Innovative US Tier 3 Operator Operators Worldwide ©2020 Harmonic Inc. All rights reserved worldwide. 9
Slide 11: OTT Streaming Continues to Gain Ground
OTT Streaming Continues to Gain Ground Driving Media Transformation and Investment Global OTT Video Revenue New streaming services enabling access to high-quality content Greater operational efficiencies with Cloud / SaaS business models Sports and live events expanding on SVOD model ©2020 Harmonic
Slide 12: Transforming from Broadcast to OTT Streaming
Transforming from Broadcast to OTT Streaming Content Media OTT Origination Processing Delivery Broadcast Delivery ©2020 Harmonic Inc. All rights reserved worldwide. 12
Slide 13: Live Streaming Leadership
Live Streaming Leadership SCALE PARTNERSHIPS PERFORMANCE >1 petabyte per day Industry-leading Q4 live video streamed >99.9999% cloud service uptime ©2020 Harmonic Inc. All rights reserved worldwide. 13
Slide 14: Expanding Customer Base
Expanding Customer Base New Harmonic Streaming Customer Relationships New mobile OTT service New live OTT streaming New subscription-based in Indonesia of open-wheel racing in North online TV service in the America United States New premium and 24/7/365 online auction 24/7 OTT channels on hybrid sho
Slide 16: Growth Driver Summary
Growth Driver Summary Market Leader in Virtualized Cable Access & Live Video Streaming SUBSTANTIAL INDUSTRY-LEADING STRONG GROWING MARKET TECHNOLOGY RELATIONSHIPS OPPORTUNITY AND IP WITH BLUE-CHIP CUSTOMERS ©2020 Harmonic Inc. All rights reserved worldwide. 16
Slide 17: Q4 2019 Highlights
Q4 2019 Highlights Strong financial Extending Cable Executing Video results Access leadership transformation A successful year of strategic transformation ©2020 Harmonic Inc. All rights reserved worldwide. 17
Slide 18: Cable Access Segment Update
Cable Access Segment Update STRONG REVENUE AND PROFIT* • $43.0 million revenue • 8.5% operating margin • Full year revenue up 37% EXECUTING MARKET LEADERSHIP STRATEGY • Two new International Tier 1 wins • Commercially deployed with over 20 operators – Over 1 million cable modems served globally – Ov
Slide 19: Video Segment Update
Video Segment Update SOLID REVENUE AND PROFIT* • Revenue $79.2 million, up 32% sequentially • Gross margin 60%, new record • Segment operating income 14% EXECUTING LIVE STREAMING GROWTH STRATEGY • Live streaming business growing – Added 12 new SaaS streaming customers in Q4, total up 153% year over
Slide 20: 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 22: Q4 2019 Financial Highlights
Q4 2019 Financial Highlights* 7.5% Y/Y Revenue Growth Driven by Cable Access Segment Financial Metric Q4 Q3 Q4 Q4/Q3 Q4 Y/Y $ Millions 2019 2019 2018 Change Change Total Net Revenue $122.2 $115.7 $113.6 5.6% 7.5% Cable Revenue $43.0 $55.7 $24.1 (22.7)% 78.3% Video Revenue $79.2 $60.0 $89.5 31.8% (11
Slide 23: Q4 2019 Financial Highlights
Q4 2019 Financial Highlights* Solid Profitability and Y/Y EPS Growth Financial Metric Q4 Q3 Q4 Q4/Q3 Q4 Y/Y $ Millions (except EPS) 2019 2019 2018 Change Change Operating Expenses $49.2 $47.7 $49.3 3.2% (0.2)% Operating Income $14.8 $29.9 $12.7 $(15.2) $2.1 EPS $0.12 $0.25 $0.11 $(0.13) $0.01 Dilute
Slide 24: Q4 2019 Balance Sheet & Cash Flow Highlights
Q4 2019 Balance Sheet & Cash Flow Highlights Strong Cash Generation and Balance Sheet Financial Metric Q4 Q3 Q4 $ Millions 2019 2019 2018 Cash $93.1 $66.7 $66.0 Cash Provided by Operations $30.2 $5.8 $6.6 Accounts Receivable $88.5 $100.9 $81.8 DSO 65 78 65 Inventories $29.0 $29.0 $25.6 Inventory Day
Slide 27: 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 33: Q1 2020 Guidance GAAP to Non-GAAP Reconciliations
Q1 2020 Guidance GAAP to Non-GAAP Reconciliations (in millions, except EPS and percentages) ©2020 Harmonic Inc. All rights reserved worldwide. 33

Harmonic — Q4 2019 Earnings Presentation on 6ix

Harmonic — Q4 2019 Earnings Presentation

Slide 1: Corporate Overview

Slide 2: Harmonic-at-a-Glance

Slide 3: Gigabit Access & Streaming Video Growth

Slide 4: Two Focused Business Units

Slide 5: Cable Access Business Overview

Slide 6: Virtualization Market Poised For Growth

Slide 7: Virtualization Enabling Multi-Gigabit Broadband

Slide 8: Virtualized Cable Access Leadership

Slide 9: Scaling Global Customer Base

Slide 10: Video Business Overview

Slide 11: OTT Streaming Continues to Gain Ground

Slide 12: Transforming from Broadcast to OTT Streaming

Slide 13: Live Streaming Leadership

Slide 14: Expanding Customer Base

Slide 15: Summary

Slide 16: Growth Driver Summary

Slide 17: Q4 2019 Highlights

Slide 18: Cable Access Segment Update

Slide 19: Video Segment Update

Slide 20: 2020 Strategic Priorities

Slide 21: Financial Results

Slide 22: Q4 2019 Financial Highlights

Slide 23: Q4 2019 Financial Highlights

Slide 24: Q4 2019 Balance Sheet & Cash Flow Highlights

Slide 25: Q&A

Slide 26: Appendix

Slide 27: Use of Non-GAAP Financial Measures

Slide 28: Q4 2019 GAAP to Non-GAAP Reconciliations

Slide 29: Q3 2019 GAAP to Non-GAAP Reconciliations

Slide 30: Q4 2018 GAAP to Non-GAAP Reconciliations

Slide 31: 2019 GAAP to Non-GAAP Reconciliations

Slide 32: 2018 GAAP to Non-GAAP Reconciliations

Slide 33: Q1 2020 Guidance GAAP to Non-GAAP Reconciliations

Slide 34: 2020 Guidance GAAP to Non-GAAP Reconciliations

Slide 35: Thank You