Harmonic (NASDAQ:HLIT) executives highlighted record broadband bookings, improving customer diversification, and a pivot to a pure-play broadband model during the company’s fourth-quarter and full-year 2025 earnings call. Management said the quarter reflected “accelerating momentum” in the Broadband business and marked the first earnings call since the company announced a pending sale of its Video business to MediaKind.
Shift to “new Harmonic” as video sale progresses
President and CEO Nimrod Ben-Natan said the planned divestiture of the Video business is intended to transform Harmonic into a “pure-play broadband leader.” The company expects the video sale to close in the second quarter of 2026, and management emphasized that the financial and operating results discussed on the call reflected continuing operations, meaning the core Broadband segment. CFO Walter Jankovic noted the closing remains subject to customary conditions, including completion of consultation with the French Employee Works Council.
Fourth-quarter broadband results driven by record bookings
For the fourth quarter, Harmonic reported Broadband revenue of $98.2 million, which management said represented 9% sequential growth and came in above the company’s guidance range of $85 million to $95 million. Jankovic said the revenue upside reflected strong bookings and service deployments during the quarter.
Bookings were a focal point of the call. Harmonic delivered record quarterly broadband bookings of $346.9 million, resulting in a 3.5 book-to-bill ratio. Management attributed the performance to several multi-year contracts and said it was supported by record “Rest of World” bookings, which are intended to support growth in 2026 and beyond.
Those bookings drove higher visibility entering 2026. The company ended the year with $573.8 million in backlog and deferred revenue, up 73% year-over-year. Jankovic said $307 million, or 53.5%, is expected to convert to revenue within the next 12 months, more than doubling from the prior year.
Diversification beyond top customers and “Rest of World” growth
Management repeatedly pointed to diversification beyond Harmonic’s two largest North American accounts as a defining theme of 2025. Ben-Natan said “Rest of World” revenue (defined as revenue excluding the two largest customers by subscriber count) grew 33% year-over-year in the fourth quarter and represented 41% of total Broadband revenue.
Jankovic added that one customer represented more than 10% of total revenue during the quarter and accounted for 53% of total revenue, noting that this concentration metric is now based on continuing operations only. He also said the “Rest of World” label will be renamed to “Rest of Market” beginning next quarter because the grouping can include customers in any region, including the U.S.
On the call, Jankovic said the percentage contribution from the Rest of Market customers could fluctuate quarter to quarter based on large-customer spending, but management expects the diversification metric to “continue moving north” over time given expectations for 30%+ growth in that customer set.
In response to an analyst question, management quantified Rest of World broadband revenue in 2025 at $138 million, compared with just under $95 million in 2024.
Technology execution: fiber scaling, DOCSIS 4.0 ramp, and software layer
Ben-Natan described expanding platform relationships in which customers begin with an initial DOCSIS deployment and then expand into fiber and cloud capabilities. He cited examples including deployments in Europe with Normann Engineering, and an announced network modernization by Telia in Norway using Harmonic’s virtualized cOS platform in a distributed access architecture.
In fiber, management said the business “continues to scale rapidly” and is becoming a larger growth driver. Ben-Natan highlighted an expanding collaboration with izzi in Mexico, where izzi selected Harmonic’s cOS platform and remote OLT solutions for a multi-year fiber broadband expansion using Harmonic’s Open ONT strategy.
On DOCSIS 4.0, Ben-Natan said the company completed a field validation with Vodafone Germany and that unified DOCSIS 4.0 node shipments are ramping with initial deliveries in the quarter. He characterized the market as transitioning from field trials and early deployments toward commercial scale deployments.
Management also emphasized a growing “intelligence-driven” software component layered on the broadband platform. Ben-Natan said Harmonic has introduced capabilities—including subscriber experience detection—that can identify and mitigate network issues before they generate support calls. Jankovic said recurring revenue, reflected in the services and SaaS line, represented 16% of Broadband revenue in the quarter. In Q&A, management said the majority of the services/SaaS revenue base is tied to SLA contracts, with a growing component tied to features and functionality, including tools and intelligence-related offerings.
Full-year results, cash flow, and 2026 outlook
For full-year 2025, Harmonic reported total-company net revenue of $570.8 million, gross margin of 55.8%, adjusted EBITDA of $83.8 million, and EPS of $0.47. For continuing operations, the company reported revenue of $360.5 million, gross margin of 48.7%, adjusted EBITDA of $47.3 million, and EPS of $0.23. Jankovic said continuing operations results included a $2.3 million tariff impact and approximately $9 million of stranded costs related to the pending video sale.
Harmonic ended 2025 with $124.1 million in cash and cash equivalents. Free cash flow was $9.6 million in the fourth quarter and $97 million for the year, which Jankovic said was up $44 million from the prior year. The company repurchased $79 million in stock during 2025 under an expanded $200 million program, and management said it repurchased an additional $21.8 million post year-end.
Looking ahead, Harmonic issued non-GAAP guidance for continuing operations and said it will now provide guidance using adjusted operating profit before tax rather than adjusted EBITDA. For Q1 2026, the company expects broadband revenue of $100 million to $105 million, gross margin of 54% to 55%, operating profit of $18 million to $20 million, and EPS of $0.11 to $0.12.
For full-year 2026, Harmonic expects broadband revenue of $440 million to $480 million, gross margin of 51% to 53%, operating profit of $74 million to $99 million, and EPS of $0.46 to $0.63. Management said the full-year gross margin outlook incorporates product mix and higher memory costs, and includes an estimated $4 million tariff impact. Operating profit guidance includes approximately $10 million of stranded costs. Jankovic said the company built in around a $6 million net impact from memory pricing, net of expected customer recoveries, while noting risks could include delivery timing delays tied to supply dynamics.
Management also pointed to potential tax benefits in 2026, citing expectations for a “meaningful reduction” in cash income taxes due to the passage of the One Big Beautiful Bill Act and Section 174 R&D adjustments.
In closing remarks, Ben-Natan said record bookings and backlog growth provide visibility into 2026, with fiber accelerating and unified DOCSIS 4.0 moving toward commercial scale deployments. He said the company expects the pending video sale to streamline operations and sharpen focus on broadband network modernization.
About Harmonic (NASDAQ:HLIT)
Harmonic Inc (NASDAQ:HLIT) is a leading provider of video delivery infrastructure that enables service providers, broadcasters and content owners to capture, process and distribute high‐quality video across broadcast, cable, satellite and IP networks. The company’s portfolio spans real‐time video compression solutions, including encoders and transcoders, as well as storage and server products designed for live production, playout and streaming on any device.
Harmonic’s product lines include cable edge QAM modules and set‐top video processing platforms for traditional pay‐TV operators, alongside cloud‐native software for over‐the‐top (OTT) delivery, origin servers and content delivery network (CDN) services.
