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Harmonic Inc (NASDAQ:HLIT) reported record-breaking fourth quarter results for 2024 during its earnings conference call on February 10, 2025, while cautioning investors about potential headwinds in the coming year related to the deployment timing of next-generation broadband technology.
Quarterly Performance Highlights
Harmonic delivered exceptional performance in Q4 2024, achieving record revenue of $222.2 million, representing a 33% year-over-year increase. The company also reported record earnings per share of $0.45, up 246% compared to the same period last year, while strengthening its cash position to $101.5 million.
As shown in the following financial highlights from the presentation, the Broadband segment was the primary growth driver:
The company’s Broadband segment achieved record revenue of $171.0 million, up 48.4% year-over-year, while the Video segment generated $51.1 million in revenue, a slight decrease of 1.4% compared to Q4 2023. Notably, Harmonic’s gross margin improved significantly to 56.1%, up 6.8 percentage points year-over-year.
A more detailed breakdown of the company’s Q4 2024 revenue and gross margin performance reveals strong sequential improvement as well:
Detailed Financial Analysis
Harmonic’s earnings and bookings data for Q4 2024 demonstrated substantial improvement in profitability, with adjusted EBITDA reaching $71.8 million, more than triple the $21.7 million reported in Q4 2023. The Broadband segment contributed $64.1 million in adjusted EBITDA, while the Video segment added $7.8 million.
The following table provides a comprehensive view of the company’s earnings metrics:
The company’s balance sheet and cash flow position strengthened considerably during the quarter, with cash from operations reaching $48.5 million and free cash flow of $46.2 million. Inventory management also improved, with inventory days decreasing to 59 from 89 in the year-ago period.
For the full year 2024, Harmonic reported total revenue of $679 million, with $488 million coming from the Broadband segment and $191 million from the Video segment, as highlighted in the company overview:
Strategic Initiatives
Harmonic emphasized its position as a market leader in next-generation cable access technology, with a 62% market share in Distributed Access Architecture (DAA) and 98% in Virtual Cable Modem Termination System (VCMTS) solutions. The company is focusing on several strategic imperatives to drive future growth.
In the Broadband segment, Harmonic is pursuing customer diversification, with Rest of World revenue growing over 50% in Q4 2024. The company is also maintaining its technology leadership in DOCSIS 4.0 and expanding its fiber offerings, with more than 30% of existing DOCSIS customers purchasing Harmonic’s fiber solution.
For the Video segment, Harmonic is focusing on improving appliance profitability and accelerating its SaaS transformation. The partnership with Akamai (NASDAQ:AKAM) for video streaming is expected to drive growth in 2025, building on the $15.1 million in SaaS revenue generated in Q4 2024.
The company also announced a new $200 million three-year share repurchase authorization, doubling the size of its previous program. This reflects management’s confidence in Harmonic’s long-term prospects and strong expected free cash flow generation over the next three years.
Forward-Looking Statements
Despite the strong Q4 performance, Harmonic provided a cautious outlook for 2025, citing the timing of Unified DOCSIS 4.0 deployments as a potential headwind. The company expects total revenue for 2025 to be between $585 million and $645 million, with earnings per share ranging from $0.43 to $0.68.
For Q1 2025, Harmonic projects revenue of $120-$135 million and EPS of $0.02-$0.08, as detailed in the following guidance:
The segment breakdown for 2025 shows the Broadband segment is expected to generate $400-$450 million in revenue with adjusted EBITDA of $77-$106 million, while the Video segment is forecast to contribute $185-$195 million in revenue with adjusted EBITDA of $8-$17 million:
Looking beyond 2025, Harmonic is positioning itself for a growth rebound in 2026, supported by industry analyst projections. The company expects cable broadband operator spending to increase, with a 6% CAGR from 2023 to 2028 for total cable access and a 13% CAGR for virtualized CMTS/DAA and Remote OLTs.
Nimrod Ben-Natan, President and CEO of Harmonic, emphasized the company’s long-term growth strategy: "We’re navigating a shift to Unified DOCSIS 4.0 in 2025, which will result in below-trend revenue due to timing, but we’re maintaining our technology and market share leadership. We expect strong cash flow in 2025 and are positioned for above-market trend growth in 2026."
The company’s stock closed at $9.21 on April 28, 2025, up 0.92% for the day, but was trading down 3.65% in the after-hours session at $8.97.
Full presentation:
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