Key Highlights

  • HLIT reported third quarter 2026 Revenue of $148.8 million, up 64% from $90.5 million a year earlier.
  • Non-GAAP Earnings Per Share were $0.23 versus $0.07, and GAAP earnings per share were $0.16.
  • Rest-of-Market revenue rose 101% year over year to a record 46% of total revenue.
  • Backlog and deferred revenue stood at $534.0 million, up 58% from $338.0 million.
  • The full-year 2026 revenue outlook was raised to $545 million to $555 million from $505 million to $525 million.

Revenue Climbs 64% to $148.8 Million, Well Above the $125 Million to $135 Million Guide

Harmonic (NASDAQ:HLIT) reported results for the third quarter ended Oct 2, 2026, on Nov 2, 2026. Revenue from continuing operations was $148.8 million, up 64% from $90.5 million a year earlier and 11% above the $133.5 million posted in the second quarter (calculated). The company had guided to a range of $125 million to $135 million.

GAAP operating profit reached $26.2 million versus $4.0 million, and non-GAAP operating profit was $33.0 million versus $10.1 million. GAAP earnings per share were $0.16 against a breakeven result, while non-GAAP earnings per share were $0.23 versus $0.07 and above the $0.15 to $0.19 guidance range.

Harmonic sells virtualized broadband technology to cable and telecom operators, built around its cOS platform for DOCSIS and fiber networks. It sold its video Business in June 2026 and now reports a single broadband segment.

Rest-of-Market Customers More Than Double Sales and Reach 46% of Revenue

Rest-of-Market revenue, meaning all sales outside the two largest customers, grew 101% year over year and 39% sequentially. Management said the upside was broad-based, with several of these customers ramping deployments and a seasonal lift in outside plant services. Rest-of-Market also made up over 60% of bookings.

Concentration remains high: four customers each exceeded 10% of revenue, and the top two accounted for 54% in total. The company added nine customers across seven countries in the quarter, three of them regional tier 1 operators, and its cOS platform now serves 167 customers and 52.6 million devices.

Non-GAAP gross Margin was 52.1%, just above the top of guidance, even with under $3 million of unrecovered memory costs. Operating expenses of $44.5 million exceeded guidance on incentive accruals and Acquisition earnouts.

Negative Free Cash Flow of $5.1 Million as Inventory Builds Ahead of Growth

Free cash flow was negative $5.1 million, reflecting a $28.3 million inventory increase, including memory purchased to secure supply, and higher receivables. Days Sales Outstanding rose to 71 from 61, and days inventory on hand reached 120 from 95.

Cash totaled $142.8 million at Oct 2, 2026, versus $231.9 million at the end of the second quarter, after a $75 million revolver repayment that left $160 million available. Book-to-bill was 0.7 on bookings of $105.9 million, compared with $97.4 million a year ago.

Backlog and deferred revenue was $534.0 million, down from $587.6 million in the second quarter on seasonally lower bookings. About 72% is expected to convert to revenue within 12 months.

Guidance Raised to $545 Million to $555 Million as Post-Closing Video Adjustments Wait Until 2027

Full-year 2026 revenue is now expected at $545 million to $555 million, up from $505 million to $525 million, with non-GAAP earnings per share of $0.80 to $0.84 and GAAP earnings per share of $0.54 to $0.57. Fourth quarter revenue is guided to $141 million to $151 million, with non-GAAP earnings per share of $0.19 to $0.23. Final post-closing adjustments on the video sale are expected in the first quarter of 2027.