Harmonic (HLIT) 3 Aug 202020 Q2 Earnings call transcript

Welcome to the Q2 2020 Harmonic Earnings Conference Call. My name is Jimmy, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. the to turn Relations. Smiley, now will call Michael over Investor I you begin. Michael, may

Jimmy. thank Financial results Thank us everyone, and Harshman, Hello, you, and Executive Chief Harmonic's me are Officer; quarter President With and today Kalra, you second XXXX call. financial Chief conference Sanjay today Patrick Officer. for joining for

see also addition by website. which portion of audio Before I'd to like our webcast webcast, our we to this point webcast, going to provided we’ve on begin, you Relations to may out that in Investor slides the our

turning Now to Slide X.

differ with documents on on projections filed call to with and financial and with today's GAAP, are the press results our to today's will basis. on corresponding During contained contained SEC, GAAP These factors, current We important XX-Q forward-looking website documents a metrics in this indicated, please SEC only forward-looking metrics, most provide the call, forward-looking projections we recent and unless statements. filed performance These Such from or X-K. in And we you those on Company. XX-K provide expectations of events which and regarding actual posted statements future of differ section note determined the materially materially. you release. release, financial together our numbers statements identify Harmonic may future reconciliation and press are our that to including actual reports which the Form are risk other cause can events we statements results and results the a preliminary or refer or non-GAAP otherwise this

to turn and business this will information of will And discuss statistical or and other this version some in I Patrick? release. our over is call be The CEO, information also included the regarding Patrick and our our will Harshman. on the now available recorded of call press the financial a on of remainder historical information We website. operations,

results Michael, picked Asia second to traditional second broadcasters. million, down into June signs as Well, year-over-year of revenue said, the in continued Cable everyone one, headwinds in better-than-expected cash was was negative that SaaS Resultant our positive have up in Pacific the a to created EPS saw for particularly business greater Harmonic as delivered our pandemic globe, and $X.XX. was and TV continue challenging new COVID-XX more thanks, our That quarter customers. recovery was book-to-bill $XX Video business welcome performance the and around grow and XX% quarter call. and we Encouragingly, than market July. good Access

our and technology on operators that serving position in fundamentally related quarter, quarter. actively worldwide, is modems, solid XG X.X highlighted closer Taking segment, is deployed million powerful up another discuss XXX% resilient profitability We're commercially and what million, the and year-over-year. the XX% quarter few results And XXX% up the market momentum of we new Cable condition. Cable year-over-year. are And from any two in out and first year-over-year cable Video Access our our sequentially, sales our Access XX% good and and look sustained second cable and As now healthy Cable return business unique. to now XX our we customers was Revenue this growth. position Access moments, a a at had $XX.X future up with Video the playing both is I'll in last see for opportunity year us half for call

million advanced is access is XG. a They're that cloud-native are communication wireless largest anonymous that both CableOS The all cable in advantages have quarter homes to operators recently speaks Latin also leaders passing across truly countries design momentum the efficiencies in platform leader architecture largest of Latin native the solutions. cable over industry-leading, legacy largest and saw we region in operating expect an Germany we of successfully CableOS the and operator pioneer fundamentally a notably largest platforms. of and announced Millicom and the Vodafone cable alone began of ahead, virtualized of leading field in nine America. wins operator industry provider way deploying deployments and for when The highlight different telemetry Millicom selected cable the is how scale. pace cloud XX second during one leader Europe our come and to Looking the validation with Europe continue. operational with and in this our the CableOS a North service across operator a in and a now who in powerful Vodafone itself, disruptive referred previously and fact the customers America leveraging as services. global market two America, at some Germany as a We in our CableOS compared the all additional

Among added Asia we While progress the additional CableOS the situation cable purchase half several design with wins commence new our slowed was deploying COVID scheduled significant quarter, during the first we new second Pacific. operators additional to nonetheless order secured in deployment two customers the new actively these in somewhat of onboarding CableOS our year. and

is toward So cable around among mouth unmistakable the our solution spreading the of word is and trend operators. world,

Our five the it's least pipeline Tier new now to of X at end be We operators both purchasing expect serious America ever cable top by is than additional been. and operator account CableOS one North of stronger smaller year. engagements the

we key market cable market space, a gain moving than access the expand heart core is addressed CableOS. fiber space to the at To goal today. larger global this is same is market the of virtualized that cable address that's continuing clear, our access to share, based into by to our software on a be addition In move

efficiency and customers EPON, customers In service in this operational updated data-over-cable both access further CableOS. networks. initiative. further XGS and Access case, initial you preparing on are around for containerized additional this XXG Cable While we that operators has will keep core we're our to moving a to been are who incremental platform access leveraging solid evidence now cable both good A Summarizing progress application, terms operate applications. on this DOCSIS We'll delivered We've this flexibility. quarter. fiber-to-the-premises growth of our be a and industry architecture game seamlessly provided on focusing update, unified first field container add program changer trials. important cable the world the commence leading made We to second and initially

both and growing. engagements X Our with smaller strong and serious pipeline additional Tier of operators is

forward our competitive our addressable and technology positive. We outlook lead remains our mid-to-long-term market, and continue push expanding to growth aggressively

year a and in customers anticipated of we've than projects and we're as originally now Pacific fourth now confident elsewhere. COVID-XX that and been $XX.X throughout Turning Segment Since we to appliance down. been although somewhat corresponding canceled locked in the to XX% And these us companies, media our delayed has We Asia anticipated, down Video particularly our million, originally year-over-year finished seeing was lost. media on-premises Asia simply the quarter. or revenue revenue remain restarting mid-June, this global business not rebound a we expect in forecast. for impacted close activity was as many segment, quarter, delayed growing at number better

half. On remains acceleration strong a business And particular, second quarter. the solid we're opportunity throughout of carrying into the other we demand hand, the Video the saw recurring pipeline base during of revenue for In XX, video bringing year-over-year. run up total public our component streaming we new And our on streaming to that our customers, added customer SaaS offerings SaaS clouds. sequentially the nine XXX% XX% and quarter, SaaS an

SES this opportunity to IP segment the will many out years. recently global Video moving we be that reengineer development mandated to expect and complement to couple spot good the next media in video The means in distribution. dollar satellite to boost was video and the this and squarely rebound leader associated video C-band companies revenue for second delivery gradually million [indiscernible] play business revenue half We materially of hybrid fourth a market begin work to is our opportunity Harmonic's many more opportunity hundred contributing cases fits a announced of spectrum for several sweet that in need year, near-term satellite satellite guidance. recurring cultivation The to strong networks, related a into systems, of XG relationships. our to who over the revenue use the associated revenue quarter opportunity new We've FCC with that We compression the commence key model. the partnership Another a new of growing to with quarter expertise estimate this of of XG XG. an C-band reclamation and this SaaS delivery

number this work what have our sales moments few as a mentioned strongest SaaS we I grow ago, of as now continue customers XX to now expect and prospects. SaaS we pipeline we to convert is ever So to

client in currently This different this SaaS of personalized revenues a volume over to video understand important of we ad such sales. to quarter. revenue $X that our less It's per accounts, is with personalization recognize processing as the that scales than traffic business existing quarterly traditional Regarding range and video digital million insertion. $XX,XXX model fundamentally than

delivered have have multiples. who us delivered ground, revenue streaming but is by to the we become customers getting as successful grown us the revenue off initially more example, that services services nominal we're SaaS now to the For quarterly is that

So has opportunity dimensions. our SaaS growth two

growth potential consider be in the our providers each their and the streaming businesses, have trees. long-term are that customers' service tied volume growth provider. platform, of while challenging because part remains grow and the large and into per our revenue to it's the of now growing second, streaming success First, We service them in volume undoubtedly the rate customers plan. Big exact oak number acorns personalization is a picture, who to overall to signing forecast,

our our now But and So we're during that coming data half and grew year, SaaS in our the quarter. encouraged that the second to and global some sports remained second media returning reopening that are revenue for their companies are Video centers, has momentum customer deferred of many summary, the back and segment live labs acquisition backlog strong.

sluggish we'll remain with turn media Sanjay, volumes value that of the discussion combine back our customer likely growing the new I'll second on-premises the a will results global half And opportunity as rebound a anticipate our and creation. SaaS call long-term ramp outlook. to all on note, streaming growing quarter, detailed market, base international over their in third for and XG up. more enable the and financial you, We recovery projects For both to sustainable solid related

Thanks, Patrick. afternoon. for all you this joining our And call thank

you non-GAAP to to are share remind provided quarterly our basis. you results I be a and the I'll that financial I outlook, with results would Before referring like on

our and at of stronger XXXX, guidance. maintain the the delivered generated we end results points consequently XX.X%, exiting quarter of better revenue than million over basis with guidance. we X.XX we $XX.X second EPS and $XX.X a reporting deferred Book-to-bill are we margins of second for of were solid Gross revenue a backlog prior million. positioning from the as XXX $X.XX XXXX. environment, the toward with reported we quarter Further, our improvement quarter. a of considering us For million a pandemic challenging the sheet the $XX loss, well high balance $XXX.X solid million, was cash operations half cash And

QX $XX X, $XX.X to million QX our at Revenue in million and was in $XX.X and closer slide compared let's look to million gross QX take Turning a XXXX. margin. revenue XXXX

video $XX.X due XX.X% our the we continuing margin QX and are we Video in to revenues compared The support high all in million revenue broadcast mix and encouraging customer XXXX to Comcast where had quarter, the QX mix, services due expenses as to progress renewals year-over-year renewals growth. significant improved market $XX.X support in of revenue million marginal revenue the which see XX.X% in $XX.X the on this activity Gross QX server service the is carry gross our CableOS. $XX.X quarter-over-quarter from APAC XX Video Entering anticipation during QX segment, in XX increase revenue period. million on decline XXXX. compared demand customers and SaaS improving and the to due Access shutdowns QX in margins. compared QX XX.X% base XX.X% million growing the QX we contract quarter. in to in was QX success driven and and $XX.X except at base. which in QX, in customer SaaS further was Cable XX% $XX and our progress product up held segment XXXX of $XX.X very and region. reflecting gross as of margin recurring in across of where QX XXXX good Cable in million Access to margins total XX% caught XXXX. compared Video third the of revenue period, support the in with greater to XX.X% as decrease QX starting caught sequential in XXXX, continue reflecting XX.X% QX see the million resumption XX, was and made software XX.X% margin XX.X% compared We to up in the in and quarter, in and service one up was growth continued make Sequentially, to the improved in segment. sales, customer appliance the quarter than We increase Access quarter-over-quarter to XX.X% period. year-ago SaaS in We XX.X% million The year-over-year expanding saw in steady mix XXX% XX.X% of improved XX% in SaaS and appliance XXXX. period, historically in we contributed up year-over-year. was XX.X% $XX.X increasing in in in In by substantial Video of demand reported quarter, Video $XX.X and QX delayed appliance from year-ago compared worldwide. million first QX of to COVID-related margins regions million year-ago year-ago we from our soft specifically QX and are QX video XXXX increased to XXXX margins. revenue. QX customers were hardware ramping gross in both will came in Revenue Cable

reduced XXXX expenses As rest in expense in quarter. million we $XX.X million million good of control QX the statement were $XX.X entertainment the We compared as operating travel, operating $XX.X the sequential look trade our expense careful QX decrease quarter. during expenses we The on and and income XXXX. QX show X, maintain due in well to at management. XXXX is overall an overall to reported as loss Slide

and for APAC issuance compared warrants XXXX million of encouraging employee shares and $XX million our appliances to It effect exercise bookings in of resulting employees. performance-based sequential million X.X demand segment. operating segment decline QX to better and in XXXX. to translates of per expected average to felt $X.X pandemic. to QX XX.X% video weighted The shares for of course growth weighted XX.X in million increase purchase QX our biggest of million Cable million million Our million QX the plan see the the and Access year. compared QX QX loss $X.X comprised Comcast share from was $XX.X Video EMEA on in in loss $X.X with loss and to ended than ratio compensation of of due QX of from of million company's were the compares XXXX, the $X.XX an QX of $X.X of of X.XX. of EPS in $X.XX a to with the and QX was XXXX in issued operating $X.X increase to stock despite million operating The X.X million $XX.X QX during reflects QX to share EPS loss and $X.X million, result our book-to-bill This COVID-XX sequential The a loss our EPS operating loss $X.XX in and impact year-over-year the compared regions. XX.X and We loss XXXX. in the count is million quarter QX bookings And million stock XXXX. was XX.X year-over-year

in We of the expect a half during recovery XXXX. regions second both

which $XX.X This to Slide comprised end generated $XX.X million We QX to million will the We now QX $XX.X and of This X. on at at $X move million $X short-term of entities. million under million by cash assets of Silicon of $X.X ended million to purchase as operations generated which of for our primarily from position Valley of headquarters, end received fixed our is construction. activities, of $X.X million approximately COVID loans the QX relief liquidity of the used sheet planned approximately France financing balance Net primarily relates of $X.X our compares increase is and $XX.X cash XXXX. purchases, capital and with million cash from and new million. Swiss

termination additions improvements terminate April the completion pushed we a to new Our caused out through leasehold in current month of and the delays date lease asset San our to set shelter-in-place month work headquarters facility. because was however, Jose the arrangement in fixed originally COVID-XX headquarters orders for XXXX,

the for pre-depreciation million and will reduce As rent lease by annual by OpEx approximately outflow disclosed, new million. cash our previously annual $X $X

for relocation accretive move our to continues So strongly be headquarters us.

place start beginning the during savings expect move We QX to to and take realizing these in QX.

compared end end getting outstanding the improvement in sales the The collections QX sequential disruptions days XX the in at March. of at XXXX. back XX Our DSO was to after QX days in and of days QX track XXX days COVID-driven on reflects

to We further improve DSO levels our in expect QX.

of Our XX% XXXX. at revenue the at reflecting end end XX and end of million backlog of revenue QX rolling QX XX% At million $XXX.X at of of is like that gets days not deferred year-over-year. note of was compared backlog into XXXX, end the Tier CableOS period. Please metric deferred QX converted days our revenue you XXXX that and indicating increase $XXX.X inventory and of QX, expected conversion to X% of XX% the at strong and one-year $XXX backlog approximately compared compared total end XXXX, X days the the million QX included customers $XXX.X our XXXX of in a XX and revenue represents of was QX business total is end on QX deferred with at CableOS XX% end associated yet I days Historically, pace. end revenue end happening the hand to at at three would approximately the this at to at contract. backlog and QX, the of the of a XX deferred to revenue QX the within our remind million the that under

complete you Just we Hence, approximately a aggregate, in future to revenue they orders before million and clarify, deferred confidence reported in contracts, at these look contractual the have us awaiting are and into if gives revenues hand, our that including purchase these CableOS backlog contracted backlog, amounts get revenue. in deferred $XXX.X picture, strong outlook. position our of

During the $XX.X million, due convertible X% exchanged debt prudent strength due unexchanged measure our a to our the current pay XXXX. of the to in million in company ensure of XXXX balance debt December environment. second quarter, believe sheet December new of thereby exchange eliminating due cash, this X.X in December $X.X for balance out of convertible was we $XX.X The X.XXX% macroeconomic We million XXXX off the dilution potential shares. in uncertain plans million in of

$XX million are million items. and following this half range of to loss non-GAAP EPS range million, let Video average share range cash our C-band on a $XX opportunities, Access $XX million million million. effective increase and and range operating for in thorough QX $X rebound, revenue, $XX from activity of is the revenue of million we Patrick activity of which revenue to million the and range with of in loss positive weighted we on XX.X in breakeven. $XX pipeline range of we and Adjusted $X.XX significant the income mentioned. Based a XXXX $XX slide margins EBITDA end Gross million, a to a to a range from from including second of expenses XX.X% million, QX exists, XX%, second worldwide macroeconomic to to providing $XX to our from a operating XX%, $XX half loss to the expect for a to of analysis guidance Revenue Cable uncertainty a at turn negative $X.XX to the range seeing from and Now in to me to to are pipeline specifically still million $XX expected the from count million. strong new range in $X million. a of tax while XX, $XX $X customer to of rate XG of to of the backlog deferred finally the million

Gross million effective with the in million, from operating margin expect from to pent-up revenue $X.XX We also XX%, to $XX range average million XX% of $XX our of to range the to share EPS opportunity. million $XX non-GAAP $X.XX, million of guidance Video to $XX the revenue to Cable to $XX revenue weighted in to million C-band XX% strength range $XX.X with million, rate provide for the tax on the associated up in range and range of to expected million million Access income EBITDA want we expenses the million initial to $XX you with $XXX QX catch million. of of $XXX to count XX.X in where QX $XX and revenue million. XG diluted range the and deals other adjusted delayed range seasonality, $XX due in $XX operating of range and is and to million, This to demand of income from

generating us you, business a of combined significant company With the a segments the thank the also you we range back are to Finally, year activity in that, makes both delivering $XX between QX million and million. the strategic expected is challenges, cash despite To we have COVID of the maintained $XX summarize, now confident cash. profit second at and in to half Patrick. seeing momentum rebound to and with our end the

strategic We emphasizing core by our and year attached are for COVID-related conclude Thanks, growth that to Okay. priorities challenges, despite remain want unchanged. the Sanjay. our drivers

additional solutions securing launching Tier a products business market. focused that new scaling our additional global expand operators, our with and very Access growing Cable footprints For with addressed wins range on customer their new deployments we services, entire Tier-Xs and particularly remain design X of across

be streaming streaming our include platform drive objectives to our continue the of and profitable as bandwidth SaaS expanding growth For we our market growth these segment, our reclamation Video initiatives. to to projects through XG deployments, addressed customers accelerating live and both remain non-traditional

our recognize I and to the stakeholders. extraordinary efforts And finally, place the of and Now, We're solid confidence shareholders employees call unusual to and customers our looking thank in continue want second for the who year up of value all a our for the our building to to during and times. forward these half Harmonic let's now open questions.

you. Thank

We the Instructions] Our session. first [Operator will with Marchetti Stifel. question John comes now question-and-answer begin from

Your line is open. now

a of is $XX little much. year. million you the sort the start $XX quick the of the is Thank to Great. million existing expected guidance, revenue customers million on bit rolling wondering beginning of out shifted year, the out, wanted function that and COVID and that that were you say, guidance gave go I to back, is delays, CableOS just sort those out very we look where really Good been of at of was side at the that I slowly. if close that causing are giving to Patrick, afternoon. now maybe is had With either you or million, $XXX pushed could you are real being $XXX it has for because more remainder a you that

some or hoping those the customers going what's existing the stop if and Just trying to some customers little the bit. underlying with got sign to versus of some CableOS newer maybe of of some on out that a get of you a of pace are the pushed sense of

Yes. when I launch delayed. And the And we've initial the started. right, I the expectations customers. somewhat primarily an revenue all modest back got it new but more John. Thank question. curve largely of call primarily for of but it's modest for has after trials, those been kind this completion around opportunities, general, slid is the think cases to actually simply no our customers. a shelter-in-place we existing of There delayed understandable business. former, you would In reasons. think existing indeed, the any the around the stuff do hiccup has It's so customers They impact, lost to

bit primarily large, original lost the the first in of think, little the got beginning a quarter. see and I of time quarter But the customers the having our by existing So and second we plan. back around we end to

impact modest with associated there a of customers. scaling delayed is So new significant more a impact there

do extrapolated I want to that, activity. a less let's pipeline stronger customer be say, to shouldn't anything, we interest, new though, emphasize So that be if of and see and customers

in the So challenge timing in growth the the our has mind, COVID manifest But way, it resulted indeed a opportunity. in no diminishes gas. revenue in a with new

John, I'd like to add one more…

Please Sanjay.

apologize. I Yes.

Sorry. pickup year I revenue. this our had like in here, one we more to metric one-time Comcast just add $XX.X million last

take year and that are exclude updated for year-over-year. we if guidance our So the at we midpoint, up still XX%

it. Got

more SES now back opportunity what mentioned, I or up earlier little significant that that was and you shifting in year coming again is driver bit forecasting even to some XG how in opportunity, XG? fairly And sequential should potentially maybe obviously XQ. had delayed what much of you're hoping this could Video that of it's you is the help bit into XXXX gears which just as importantly, for how business? about a a C-band just think understand a Okay. the a are catching is versus And that potential little then on we us increase growth gotten

next months. with out, see several hundred the million over play to start a XX opportunity the I'll as say, C-band XG dollar let's opportunity, it Well, we

of to expect don't win that positioned all we it. we of business, to win think but So we're chunk a good

for a got the and indeed, fourth our sites, first impactful initial quarters. in multiple it's fact, We've in can, opportunities contributor it our So be to well material quarter.

one want a as exact we far, that's go hand, think, of giving to do to to don't want contributor. say you percentages, I on as kind but John, the we material

the catch-up Video and, pent-up other a step-up QX. the the regular demand of the let's it hand, call On is business in piece of comparable

much. Thank you Great. very

Thanks.

our James. with Leopold Thank And next from comes Simon Raymond you. question

line Your now open. is

at the looking COVID up the Video improve the Maybe lower SaaS but we business year about margins would I a you. what business on at would envisioned averaged $XX that beginning thinking, with Thank just and of had trend to segment, think prior quarter of the Great. in ramping gross XXXX, over this following million mix. line time was the revenue that in

slope sort about is to the we down, a I think, of incremental gradual and this award envisioned anything of beginning thinking the I year. XG was So at

if try level you about of up? the XXXX to get normalized idea So past COVID can to of yet, an not us you're the even prepared business if what we be talk give catch should

more conversation And as That's margin. you he I have broad the more we line more well I'll qualitatively, about here sales But declining the top as sales gross expect a and see. it is less XG and strokes, previously add itself that – aside, think what a and And with and Sanjay wants summarized software quantitatively. anything Well, chime oriented over we do SaaS. CapEx expanding continuing that's in more revenue we In this business. more we less Simon. put manifests And a recurring think, to right, still if appliance moment let's indeed broad dependable is that a I profitable still in time, let

we've the than it's we've our taken it's the reasons end gap. by fill we interesting I a mostly much the for It's because thing year, XXXX. in appliance coming on the it's explained, into coming whiplash of of hand back a one appliance, mix opportunity almost bigger ever kind have on on-premises. hand gotten the – think definition other anticipated a hit but was And new really in

some so XX only fundamental it business say, context little the from SaaS runway XX change, very months. the headwinds, also of So bit news perspective next or more giving our And it let's Simon, scale. affect in but not to that's the our actually, of welcome COVID to to not – the the changes equation, a that's getting long-term business a for this but

numerically Sanjay, have did anything you add to maybe?

QX two saw margin a guidance lower are in of an XX% for our here giving business, a we've Simon, Video seen the – improvement XX% range the QX, And entail the of that, but we margins to last add next again. for just quarters in again. I'll the improvement we or year have did we range marginal XX%, two. of

we this at not talking way the mix product least we improving years And the – margins improve we the we is see along. time, on perspective, track So are see but think, about while march on you I getting margin our at as back are margin the working.

follow-on to appliances that pro more Video software, higher I margin this forma why XX% So and that would puzzled to whether that of would I'm they're thought the question fourth basis. is would or a gross gross a my products have be I quarter XX% have accretive. leads imagined mix bit margin

maybe And that could so I'm prediction. influencing you're little a down by drill fourth what's a forecasting on what margin, bit gross you bit quarter that thrown little on

Yes.

is for a to Video XX% both margin, combined XX% So Simon, gross and Cable. the segments,

total. you are But As Cable XX%, between margins a And are in improving and that's we where a and Videos are. to between see QX for somewhere XX%. is there to XX%-XX% Videos trend close why compared on Video are mix Cable and XX%

for Okay. you very the Thank taking much questions.

Thanks.

from question with Samik Chatterjee our And you. JPMorgan. next comes Thank

open. is now line Your

taking Thanks Hi. my for questions.

help to does kind Thank And your of about win move of we used solution America and do as customers an where to believe lumpy of overall? should is to kind but better projects understand Sorry well? Is this you Cable you this to XG can there of opportunity to this here if think kind are. ask you outside opportunity, that customer being to a bit who then to the about target how this see you wanted back business this how target make you. North me go customers, kind think quickly every and need like just how

have actually So programming Historically, or the the you, is base used and used distributes satellite locally. where two to world cable extensively headends, anyone our the a video actually who centers it's created customer – IPTV, it's still then programmer side. like video is distributed it's more the from cable, what to on move around so things was where

So worldwide model well in U.S. as internationally. and that's as a the used

would in really is country spectrum. the content to are so-called deeper – these this And are end well XG and sharpest the interested is is made approaching thing someone way have anyone anticipated some a how we we're the The SES, bit being focus finding different. activities press really with I opportunity a into more of who C-band pursuing trunking kind is and video going right think to to FCC led kind who frequencies in noted spectrum fact, primary definitely in this, the the in around. with reclaim filings what's target is by the operators a digging of satellite Each and say, by release be as about can of our been opportunity they're our satellite little look major is but publicized overseas, uses work. the the – distribution U.S. now that in So in whole it – back called, the initial for process is this of the there FCC a where opportunities

Okay. Good.

here so base the Just relative are Cable Access taking of back a the you a in roughly to have, half. step-up revenue $XX segment, that on half follow-up relative the million to you first

You have COVID. customer engagement, limited more is mentioned given there just

some get know quarter of So XXXX, from be of in trying then as terms delayed discussions up hearing the should move we pushed of expecting up ramp step and estimate into as customers, you get year? projects just opportunity these what next we customers now first have to with the another of of an you're into in kind these as the

We next mean, strong I mean, is engine. growth believe If is about or in forget a we that the operators cable back, quarter you believe I a this quarter, it step let's – this importance out having whole figuring the for and and highlighted I having not of that situation world going are has bandwidth the forward. a scalable pandemic but scalable think bandwidth, quickly only platform bandwidth this really

the So I somewhat and to new being matter a delayed actually has rollout would significantly. said, it's That bring roll with customers say, the that and been process which it's technology the out field it dialog expanded non-trivial in to engagement, has pandemic. by the

we yes, for the by this customers consumption this existing and a into – look expect two not being the well guidance, forward specific of we foreseeable look customers more So we business future. as more as as of course, but absolutely XXXX, as drivers is

Okay. Thank you.

you. Thank

Thank with you. Frankel from And our comes next Steven question Colliers.

line Your is open. now

I could next a over congratulations. to opportunity maybe that you Thank opportunity as margin you, playing per how versus the wonder the customer how you talk utilize little start see the mix opportunity the Patrick, so? Cable bit Access, does and on about DAA? shelf and shelf year out or revenue customers or if And that either change

Well, question. you. thank appreciate I It's an it. excellent

so-called some And it So particular splits latter kind depending and traditional cable in. centralized really notes on patterns And so-called a sense, ton of doesn't, community the shelf makes architecture. you’re we seeing, operator a in where that what others, in DAA a is fits in it's architecture cases, of so-called where going but the application traffic see on.

So from had for day we us a – centralized it solution one.

fact, early all centralized. were deployments In the

equally architectures really, key a I think up let’s with some was of our But really that's what with out we DAA. the was working this say, coming doctor an concept shelf associated exclusively to with somehow disruptive still ordering. have that somewhat customers virtualization understood on misperception centralized of there new is impact really

to is to is. – our a opportunity have that so substantial out indeed door the DAA centralized equally, that all solution that's types say and I'd to we And and rolled solution powerful customer as opening across disruptive

core, with shelves the DAA imagine cases, cable It’s unified operator. devices. a deep some and even software if others so-called will centralized devices, these same these with So you dealing with centralized the maybe

it work and them for the meet making to really Swiss customer, where regardless solution kind them the satisfies sense us a a that And knife the get the we to requirements more have allows what's solution architecture. have it for particular army So of feel are, of that it. means a a of with to they

you a that Now extremely course, hardware more the kind DAA of margin. the the asked road somewhat out lower hardware core, the high in middle of somewhere between. but the software is it's it on of device. and a margin. software goes content, so It's and of a device, has piece node kind margins, that appliance of shelf margin And less The about hardware is

up. blended a basis, will on So tend to deployments the shelf blended drive margin

Okay.

there. make Does that pause all I'll sense?

sense me. you that market years? do you customers shelf And like percent versus DAA? the couple looks do the Yes, makes next of your think of over What what to think do

I it's XX/XX half, being traffic That number, powerful. magnitude. give say topology you to Yes, said, I'm it really each. had extremely a a not sure. The depends DAA order architecture on That rough if is And and I'd pattern. of rough

being for certainly larger bandwidth. in DAA a think a of time, using customer in are has operators I gets think favorite the And over traction. But can I building DAA who see both. of it's of more just about would terms particular, say future possible really I an every we in interest

And Steve, stake in stick so now, about I'd a I say to XX/XX. if right had it's the ground

SES’ of opportunity. question is the like the there revenue operators, satellite customers the the the then this just with And on networks? world more Okay, Are well? great. associated Or C-band one as

customer ultimately from model. the whole is the as end money It's just an programmers. plan. part The a But the this coming FCC interesting is certainly somewhat of – is it's

what mean customer. by So kind you on of depends

and industry efficiently to operators, government involves Harmonic, I satellite that as technology free bandwidth. as quickly up the think programmers, and it's joint possible this a providers, effort basically

the in Okay. rollout And we tranche you X? we you Tier of first just Or X CableOS, inning? big your in of their are maybe are the this customers if that has we at the bottom where the in are first? look – again, rollout do Kind you think the of Tier the third of last in now question, in up picture of started baseball

not third the the inning mean, whether we're or – first the inning bottom but second top can't you of first something, tell at I of we're not I in yet. third or the yet. We're the

look wrong. I footprint But let's get face we're me That's numbers, just don't of of mean, I mean announced at think early percentage relatively I a the the million so the modems, days. small it's still we've far. proud of the customers X.X it.

onboard. us So bringing we're lot customers, there's customers of with ahead a and confident increasingly existing new of runway – exciting of the runway course, of

Patrick. much Thanks so

you. Thank

you. Thank

from comes Tim question Barclays. Long with next Our

is line Your open. now

on solution Or maybe what Tim. my start a much taking for traction potential the to driver customers and, see specifically Peter virtualized more your bandwidth needs? wanted how seen I demand do using is growth upstream with extent in Thanks you to for Cable This the on Hi. you Zdebski question. to address outlook? of have as specifically,

is bandwidth deal. big big, Upstream a

definitely to way, is forward. of driver a going live it's so you the and date the to of start business is had And you're wins to anticipate give going – again suddenly we've just I a to signing a virtual a to of whatever they're – to we an what, classes. key certainly school a a it's of it ton the driver that just driver on or it have go kids guess Zoom I where about and in anecdote mean, to

bump think, a I customers' one-time and that not our this think our I view. in So in was view

the the indeed, I of and we see we that key one think, competitive stay it's think to be two-way traffic heavy is upstream that here traffic of we And and to growing. going differentiation opportunity drivers have. is the

more XG we advertising on in then Do business as that That's – see that the opportunity. being moving challenging C-band broadcast. of revenues did segment, see still just the those might see you to quarter? from in you maybe first And to XG insulated Video the sort touching some helpful. extent Thanks. And

continuing see Just someone is a more systems, your accounts great in risk taking that to you competitive position of business that how there of do that? or to share competitive in of else the maybe delivery how reengineering coming win there greater being a

to advertising across see Yes. all media is I on to waiting Well, doubt are But quite to profitable the ever great consumption going strong. first to they is It's our think, that hits. platforms, their we're some customers And all fundamentally, committed definitely taken mean hugely I sports long-term broadcast are to mean, look, and back. see with media. no our I Well, worldwide. suggest coming with I happen that as live has think businesses these regardless the one, what's market businesses. remember there conversations media

XG, don't is that anytime abandoning question. it's a On soon. infrastructure fair we very think So anybody

being will, a how be satellite, of to competition. it's sweet said, and there very we fortunately, as expect And application, said, a it about spot. there It's but appliances the combination competitors. if is to been a little That touches which I element really relative interesting advanced we've think here, and around. an to you school, of our the on other delivery. and We bit, know differentiated traditional really hand, is is our streaming kind on old of we've IP But ourselves

unique really we in so being opportunities So our position we've a got initial in the and sights. think we're think in we resulted us that's confident in

overlooked to Going capture it going never share to sure position forward, for afterwards come our to, a a is our but significant let's like opportunity. competition, say, Others we are or fair more.

Great. Thank Good luck. that. you for

right. Thank you. All

from our And comes question Jefferies. George with you. next Notter Thank

open. now Your line is

the just in the response against you've marketplace, Hi there. you're was got there. I competitive to some obviously, you're seeing CableOS incumbent competitors Hey, competing a about Thanks lot. entrenched curious

marketing got of or wondering you've you're certainly. then I'm with model Comcast technology I'm competitively And just kind those of how and course, you handling Comcast, terms deal outside of are that? similar for pricing guys. asked through guess on have flip And with a how those significant special you. really if customers either And I otherwise. You've seeing or Thank customer you or some through responding guys this on wins, returns, the guys curious side, are pricing got

Sure.

other The would seen couple And real and that haven't seen desperation everything of we've don't aware this material are a any I'm first from earnings from know calls I as like we international I perspective. experts anything in kind we than else. pricing. response, much characterize of is anywhere learned what not as But of situations, or frankly, tell from frankly, one, you markets doing. we're will a we that technology our competitors not in

what very perspective, admittedly don't know. is that customers know From maintain Our see lead. sizable limited. from what what we us we a and we tell We our don't

I early documented relationship fact that of the arrangement, George. Intel we cable remember, of off-the-shelf around well our when arrangement number that a you'll think virtualized the Comcast was the first truly days other were software Comcast appreciate world know working with the was the demonstrating And in on regarding of reasons, So showing operators I kind kind fortunately for server, which unique.

And to a done that's an finding getting not course – not so than date. proposition, mean value we therefore, And a today, its with it we're in us think with proposition. we value customers. be mean good terms come for really, issue new more It adequate really I with we strong comes of have that of to own I virtualization very entertaining commercial strong isn't And which it's have, for commercially we're sake. to

it. Got

the squeeze running you I the denominator, size cable in, if to Okay. the collectively Can more just across relative have of about the you subscriber the talk CableOS. And what's how of many all footprint one live broadband won? just you modems and guys – about number customers could talked where, you've

have that. an don't I updated million. regret, for Ballpark I number is roughly $XX

it. very Okay, very good. All right. Thank you much. Appreciate

Vodafone, I Comcast that to really Just are alone number. think,

Perfect.

so Okay. you Thank Super. much.

All right. Thank you.

with from our And Capital you. Savageaux comes Northland Tim Thank next Markets. question

open. is line Your now

bit normalize of analogy if Hi, headwinds whatnot. good early afternoon. for the baseball of that's arguably Wanted the to and you we're rate, and software pick mentioned growth for pandemic there ramp on had in payment the kind up and innings from relatively last XX% type that, fair given Sanjay year that with of

a sort saw Access going baseline business? medium or given have a look about How what So this expect growth growth of the kind would term to And at reasonable for Cable follow. the it year. are headwinds be might even you being is we in forward that XX% as I conservative of thinking we then

and Tier this or not The quantitative are that very are at positioned especially, a very backlog the we number – Cable feel deployments to strongly at of time Tim, but or same So number, but give shelves the guidance had positioned. we come precise only half Xs very we but well revenue we have with as up customers discussion for and time. on beyond strong we Access we've We think customer contracts. hard for a second deferred It's only for a not the well. very got these

all precise is share this definitely Cable I in at definitely a is view But don't as of the the we upcoming segment growing. winding signs will there. more good think for that point of get which the we and it a year, calls have number we next

last mentioned along that just be that that's, then pandemic front, guess you described visibility you've half a challenges did the saw last although trying current what more And of it in half? the with of of second to ramping from the like would deployments try payment particular customers quarterly payment that It software Okay. seen about to customers in with And what pretty ramp related see of good the you had first context through coming I sort excluding whether figure the the seems year given you software even kind there there to the has looks half, Comcast in half flat out first on-boarding. in in you outside revenue following second your of what for just I Cable. good new we've to like been But understand want year. I'm

working thought. customers – and with deployments that comment it I guess, while would sort getting is the a as Cable second current drive Access, approach any you that been on another new the So make we you a that for wise, of to you've plateau which about that way to to same kind entire half, opportunity you in were some bigger of of is in expect if guess to I dynamic would the customers deployments your maybe

of customer who half you in have – time, ramping the in delay most up also they're said, and mix whom factors as starting second didn't same kind a first who the At are with new existing we the who it's have Tim, we customers little customers of see of the deployments. Well, starting those up. also a half we bit,

last it's but year, to of of compared So up, them the are see still XX% that as one piece did we all you you in half. mentioned, second Comcast half of one-time just the and that for second it's I up a second first And out, half. excluding if half in mix you uptick the think,

with is all the three factors. these that ramp So

Okay. Thanks very much.

Thank you.

you. Thank

turn Thank I'm the I'd time. any remarks. you. to at Harshman showing to no queue questions Patrick the call for like back And closing further this in

Goodbye all and us Okay. We to a for simply Well, supports. and look joining have good we all with to forward you you very want say again soon. thank your speaking day.

Okay. Thank you.

today's Ladies conference. Thank participating. gentlemen, this and you. you for Thank concludes

may You now disconnect.