Key Highlights

  • Revenue from continuing operations rose 64% to USD 148.8 million from USD 90.5 million a year earlier.
  • Non-GAAP operating profit reached USD 33.0 million, up from USD 10.1 million, and non-GAAP Earnings were USD 0.23 per share.
  • Backlog and deferred Revenue stood at USD 534.0 million, up 58% from USD 338.0 million last year.
  • The company raised its full-year 2026 revenue outlook to a range of USD 545 million to USD 555 million.

Third-Quarter Results

Harmonic Inc. (NASDAQ:HLIT) reported third-quarter 2026 net revenue of USD 148.8 million for its continuing operations, compared with USD 133.5 million in the second quarter and USD 90.5 million a year earlier, a 64% year-over-year increase that the company said was well above the high end of guidance. GAAP operating profit was USD 26.2 million versus USD 4.0 million, and non-GAAP operating profit was USD 33.0 million versus USD 10.1 million. GAAP earnings were USD 0.16 per share against roughly zero a year earlier, and non-GAAP earnings were USD 0.23 per share against USD 0.07. Results include stranded costs of about USD 1.5 million, down from USD 2.2 million a year ago.

Rest-of-Market Diversification

President and chief executive Nimrod Ben-Natan said the quarter was driven mainly by Rest-of-Market growth, with revenue from outside the company's largest customers more than doubling year over year to a record 46% of total revenue. Rest-of-Market bookings represented more than 60% of third-quarter bookings. He pointed to new fiber and intelligence products introduced in the period, including the Recon platform, Oyster+, cOS Loop and cOS SensAI, and said the company remains confident in sustainable, profitable growth while investing to expand its addressable markets, as outlined at its recent investor day.

The cOS software solution is now commercially deployed with 167 customers serving 52.6 million customer premises equipment devices. The company launched cOS SensAI, a Recurring Revenue service, in September after extended trials, secured first customer wins and began migrating existing cloud customers to the platform. Recon was developed in collaboration with Comcast, and the company also acquired a vendor-agnostic fiber management and provisioning platform company.

Bookings, Backlog and Cash

Bookings for the quarter were USD 105.9 million, below USD 144.3 million in the second quarter but above USD 97.4 million a year earlier. Backlog and deferred revenue was USD 534.0 million, up 58% year over year but lower than USD 587.6 million at the end of the second quarter. Cash and cash equivalents were USD 142.8 million, compared with USD 231.9 million at the end of the prior quarter and USD 124.1 million at December 31, 2025. The decline in cash is consistent with a USD 75 million repayment in the quarter, after which USD 160 million was available under the revolving Credit facility, versus USD 85 million at July 3, 2026.

Portfolio Reshaping and Next Steps

On June 16, 2026 the company completed the sale of its Video Business to MediaKind for a purchase price of USD 145 million in cash, with proceeds of USD 137.9 million paid at closing and post-closing adjustments still being finalized, which management projects to complete in the first quarter of 2027. Harmonic now operates as a pure-play broadband company with a single reportable segment.

Management raised the full-year 2026 revenue outlook to USD 545 million to USD 555 million. Items to track include the sequential decline in bookings and backlog, the pace of cOS SensAI adoption, stranded cost reduction and completion of the MediaKind adjustments.