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what it is
Harmonic sells the gear and software that help cable and telecom companies move video and internet traffic.
how it gets paid
Last year Harmonic made $361M in revenue.
why growth slowed
Revenue fell 26.2% last year. EPS was $0.10 in the quarter, and the last reported earnings beat was $0.14 versus a $0.08 estimate, a 75% surprise.
what just happened
Revenue hit $414M, up 190% vs. prior year, while earnings came in ahead of expectations.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
30/100 earnings predictability — expect surprises
21.9x trailing p/e — priced about right
14.5% return on capital — nothing to write home about
xvary composite: 66/100 — average
What they do
Harmonic sells the gear and software that help cable and telecom companies move video and internet traffic.
Harmonic wins because operators do not rip out broadband systems lightly. The company’s flagship CableOS sits inside that stack, and recurring SaaS and services were 16% of broadband revenue in the December quarter. Software-as-a-service → subscription software sold over time → so what, your customer relationship gets stickier and less tied to one hardware sale.
How they make money
$361M
annual revenue · revenue declined -26.2% last year
total revenue
$361M
26.2%
The products that matter
cloud-native cable access platform
CableOS
146 commercial deployments
this is the platform that matters. broadband revenue hit $98.2M in the december quarter, above the $85M–$95M guidance range, and management tied the upside to live subscriber activations on CableOS.
deployment base
recurring software and services layer
SaaS and services
16% of broadband revenue
recurring SaaS and services were 16% of broadband revenue in the quarter. that's still a minority of the mix, but it's the cleaner revenue stream investors actually want to see grow.
higher quality mix
Key numbers
$16
18-month view
That sits 55% above the $10.29 stock price, so your upside case is already visible without heroic math.
$800M
2029 revenue goal
That is more than 2.2 times the current $360M trailing revenue, so the company needs a real second act, not just a good quarter.
3.9%
operating margin
That is thin for a software-linked story, which means execution has to stay clean.
14.5%
return on capital
Return on capital → profit earned on the money used in the business → so what, Harmonic is still getting decent efficiency from a messy transition.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 25 / 100
- long-term debt $124M (10% of capital)
- net profit margin 17.5% — keeps 18 cents of every dollar in revenue
- return on equity 16% — $0.16 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in HLIT 3 years ago → it's now worth $7,670.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Revenue hit $414M, up 190% vs. prior year, while earnings came in ahead of expectations.
EPS was $0.10 in the quarter, and the last reported earnings beat was $0.14 versus a $0.08 estimate, a 75% surprise. Gross margin was 55.5%, which shows the model can still throw off decent economics when the mix cooperates.
$414M
revenue
$0.10
eps
55.5%
gross margin
the number that mattered
Revenue growth of 190% mattered most because it shows how dramatic the business mix shift has become, even if the annual base is still down 26.2%.
-
harmonic’s broadband segment is doing the heavy lifting.
-
december-quarter broadband revenue of $98.2 million exceeded the top of its $85 million-$95 million guidance range, with the upside driven by accelerating service deployments and a 9% sequential increase, as customers began connecting subscribers on the cos platform.the cos platform is harmonic’s cloud-native virtualized cable modem termination system, and software license revenue is recognized when operators actually activate subscribers rather than when hardware ships, meaning the december quarter’s outperformance reflected a genuine ramp in live network deployments rather than pull-forward shipments.
-
recurring SaaS and services revenue accounted for 16% of broadband revenue in the quarter, with management noting the software component is growing, as more of the 146 commercial cos deployments move from integration into active subscriber expansion.
-
the latest bookings data is encouraging.
-
the company logged a record $346.9 million in broadband orders during the december quarter, a 3.5 book-to-bill ratio that expanded total backlog and deferred revenue by 73% vs. prior year to $573.8 million.a book-to-bill ratio measures new orders against fulfilled revenue; a 3.5 reading means the company booked $3.50 in future commitments for every dollar it recognized.
source: company earnings report, 2026
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What could go wrong
the #1 risk is cableos deployment delays at major operators.
med
backlog fails to convert on schedule
Revenue is recognized when subscribers actually go live, not when boxes ship or contracts get signed. That makes timing risk very real even with strong orders.
With $573.8M of backlog and deferred revenue against $361M of annual revenue, slippage hits the whole story fast.
med
orders normalize after one huge quarter
December-quarter broadband orders were a record $346.9M and book-to-bill was 3.5. Great numbers. Also hard numbers to lap.
If bookings cool meaningfully from here, the $440M–$480M 2026 revenue range gets less comfortable.
med
broadband strength does not fully offset the rest of the business
Total revenue still fell 46.9% last year. Broadband is doing the heavy lifting, but it still has to outrun weakness elsewhere.
If that doesn't happen, you are left with a smaller company trading at 21.9x trailing earnings and asking for patience.
with last year's revenue at $361M, this is not a story where execution can slip quietly. even modest delays in converting that $573.8M backlog would show up fast.
source: institutional data · regulatory filings · risk analysis
Pay attention to
risk
backlog conversion
$573.8M of backlog and deferred revenue is the whole setup. you want to see it turn into reported sales, not just sit there looking impressive.
metric
recurring software mix
SaaS and services were 16% of broadband revenue in the quarter. if that percentage keeps rising, the quality of revenue is improving.
trend
orders after the spike
$346.9M of broadband orders and a 3.5 book-to-bill ratio set a high bar. the next few quarters tell you whether that was a step-change or a peak.
calendar
2026 guide versus reality
management pointed to $440M–$480M revenue for 2026. every quarter from here is a referendum on whether that recovery curve is real.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — in human-speak, analysts still expect above-average price performance over the next 12 months.
risk profile
average
stability score 3 — this is a normal risk bucket on paper, even if the business story itself is more lumpy than average.
chart momentum
below average
technical score 4 — the chart has not earned the benefit of the doubt yet.
earnings predictability
30 / 100
earnings can swing around because deployment timing matters. translation: expect clean stories to arrive late.
source: institutional data
Institutional activity
96 buyers vs. 76 sellers in 4q2025. total institutional holdings: 0.1B shares.
source: institutional data
Price targets
3-5 year target range
$8
$23
$10
current price
$16
target midpoint · +55% from current · 3-5yr high: $25 (+145% · 26% ann'l return)
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