Harmonic (HLIT) 31 Jul 232023 Q2 Earnings call transcript

Thank you for standing by. Welcome to the Second Quarter 2023 Harmonic Earnings Conference Call. My name is Jonathan, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. that is note recorded. Please Instructions] this being conference [Operator

the like to you And would turn may call David, now I Relations. to over Investor David begin. Hanover,

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

also I'd our the by addition begin, we have slides to webcast, like of Web audio portion going our out webcast, in Before this Relations to that the view we which webcast provided for may site. Investor point you on to

the most Now, We and the release. refer of and call, results SEC, actual statements the XX-Q company. we our XX-K materially recent results are materially. turning only with identify to other documents actual this statements. Harmonic These may preliminary or forward-looking differ and reports which today's contained forward-looking during regarding and risk differ slide to will important future events including provide of future can filed projections in or those Such you current two, statements factors, cause section expectations documents statements results projections events to performance our from forward-looking or press financial

on reconciliation on otherwise And together are with our metrics, GAAP, These we we X-K. provide numbers please with are posted which press SEC financial to the a today's and corresponding unless note basis. a Web non-GAAP you filed and determined that have metrics indicated, contained the on on release, this GAAP site in Form call

historical, our discuss financial other and We regarding operation. statistical business and will information also

information remainder available site. this the included in will version call a or press of recorded Web release. of The some our this of is be on information on And the

turn I'll Patrick the Patrick? our CEO, to call Harshman. now, over And

headwinds. our delivered SaaS Revenue solid while also call. second Broadband second short-term Thanks, everyone In adjusted encountering growth, EPS $$X.XX, EBITDA million, David, quarter was the Video was and and and to XX.X%. was welcome $XXX quarter, Harmonic margin

year-over-year, and $X.X SaaS before deferred XX% persist of business record deliveries anticipated. And grew to revenue $XXX XX%, backlog our were segment Broadband was Video was over Broadband the over of sides both and up QX. expect Hardware revenue the Video million. revenue we Our on this quarter million, through in softer leading and the third than to rebounding book-to-bill softness

the and that Our competitive to position strong, revenue, quarter. to combination have new relationships growth. evidenced continues record and well active of new to several during customer customer yet scale us customers, by existing health be sustained important deferred continues backlog wins The and long-term for position

now addressable highlighting ran expanding in we Taking XX, expect look, segment, cable year-over-year, the at a we million our quarter XX% the market, QX with of Broadband opportunity $XX.X now solution persist modems revenue reached and growth be delivered up during expect solid million, the of into first, our new XX accounts. quarter XX% deploying global deliveries, worldwide, hardware did quarter. growth, Customers existing our closer We and we third reductions to up unexpected another approximately served corresponding with higher, only through significant reductions year-over-year. XX% segment still expansion

we to customers remain see I new our offense nor Indeed, want mid-to-long-term loss we business, in regard emphasize no to gigabit of our opportunity. services. see do change growth on any with

have Tier from two contributing and position yet these strong, or revenue, in new Neither been were Our and bookings enabling these one and bookings has deployment were accounts; backlog initial Contributing to North record of international. our multi-million-dollar revenue. broadband never X America, deferred stronger. new competitive accounts begun one

market market firm, as equipment the share first the for recognized time, Group, still-strengthening our Dell'Oro cable market intelligence and broadband highlighting Further Harmonic position, leader. recently,

our of software Another highlight extension of with license was a key customer. relationship the quarter the

core market in customers, powerful we're flexibility our door new unique for Illustrating and to cloud-native DOCSIS opens for X.X to and to the key continues growth enabling in our Our compelling, business. new which our by opportunities core, our unrivalled and proposition. leading software valued the standard, our be market, multi-gigabit competitive to the new software services advantage of customers

initial Complementing the our and development this optical months. is extended software backward-compatible truly coming remarkable, has to progress a The new RPDs we're in of gearing family X.X up networks. area technology trial been core and deployments support in DOCSIS now and

transitions in headwinds, opportunities wave multi-gigabit coming good as X.X the the technology growth the for the news this look new services being our some to business. new created begin such by symmetrical DOCSIS While unlocks short-term result standard, ahead associated as customers are can to of

Also for to PON in XXG-EPON. the edge compete opportunity. Perú to progress cable they And new are business growing announced has Worldwide, as We the XXG make fiber we area. fiber-to-the-home good new our looking pipeline news the their announced expanding sales our is solution with a also And this switch availability and XGS their reflects service. footprints out our of recently customers fiber Claro telecos. continue hardened fiber for we powerful, and head-to-head for selected

that growth. our summary positioning With us in growing and deferred number initiatives cable high-impact continuing In we're by continue are to our customers for confident to position, on Broadband being a we long-term our record technology our business, and revenue, position, opportunities. embraced fiber for sustainable, of market and be execute backlog worldwide,

year segment while with our evident now delays, continuing and of quarter Video the million, segment, ago, demonstrating timing its The EBITDA, from the quarter a transition revenue historical the gross margin. And a of delivered profitability, challenges. $XX.X Total $XX.X to highlight revenue SaaS XX% year-over-year. the in positive second software, SaaS business was from to SaaS, reflecting project inherent million down commitment intentional some up revenue our revenue, in the our to million, was transformation, turning appliance transition to $XX.X XX.X% a investing

by sports, primarily live customers driven with again both newer was and growth sales streaming existing While contributing.

periods to shine SaaS prior coming in and newer in our benefiting quality usage. now online the continue reminder, SaaS market. and of from that exceptional characteristics a As ramping low-latency video The are video we're customers signed several

For example, and has quality forecast and several powering Cup, we're the the of of capabilities growth for excellent. feedback announced we're this last SaaS consumer supporting growing the the impact relative we Based on we progress greater to new Women's been streaming on XX% full-year. World than services continue quarter, currently

a headwinds North and thorough typical business. On quite for result of sales undertaken quarter, the fourth second-half experienced strong are business, while solid, a was appliance the is our for sales delay review closely solid We've project of is reconfirmed, some pipeline, with side of which worldwide. our we working internationally. key video The pipeline a net year, customers with the seasonally America

a market. leading in Recapping we live our market, video growing sports, focused on remain segment traditional particularly SaaS Video also maximizing while the position for appliance taking streaming profit strategy, from

through on ability year and growth. excellent second-half create despite progress continuing the to continue international value confident and macro in some results first-half of through overall in our demonstrate continued Our SaaS, sustained profitability SaaS our to outlook the headwinds. We're streaming

deeper over of With financial to that, let outlook. turn our and me results you, discussion Walter, for it a

you all Thanks, for today. us Patrick, joining and thank

be to our results as a outlook, basis. on remind discuss referring non-GAAP I'll well quarterly are financial like results I everyone I'd provided our that the Before as

of available are reconciliations David the of our QX are discussed to presentation earlier, call. release Web that Both this non-GAAP our As GAAP financial on these site. mentioned press earnings includes on measures and

record which resulted in expectations. hardware revenue During experienced our mix and was grow the software segments. in SaaS strong overall sales up margins. that, growth, below generated also margins gross quarter, said to we delays and delivered significantly across our revenue this, year-over-year business Despite we and in second continue total of double-digit Having and broadband levels, to our as total, gross our revenue reflected our SaaS

demonstrated of our solid resulting model operating inherent Our as guidance range. continue strength within to we $X.XX, EPS which its gin profitability, deliver was

with balance growth. We positioning sheet as second continued and deferred long-term a ended well solid record backlog $XXX.X million, revenue as well for quarter of us the

key more review financials seven. reviewing our I'll QX XXXX here, detail, on briefly Before slide in the highlights

impact few with $X.XX, we XXXX full-year the of discuss of EPS $XXX revenue and $XXX.X bookings we consideration a demand 'XX million, our guidance, For customers, reflect our occurred and challenges macroeconomic These recent deferred our of demand of last QX reported record and which and IN minutes, our taken customer quarter, following million, earnings changes push-outs backlog now affecting that customers. have call. the video million. revenue inventory broadband $XXX.X will of to adjustments by

any landscape. or color, of To share reflect competitive the any offer changes market some do in additional they not loss

let's our financials Now, review quarter in detail. second

revenue less million, slide $XXX basis. on again, X% was to Turning a total than eight, year-over-year QX down

year-over-year. sequentially segment, Looking revenue QX first down up at was Broadband and XX% slightly $XX.X our million,

from contribution fiber see including customer to launches newer continue quarter current We the modest during and ramp-up revenue.

revenue hardware expected lower several reflecting than delays mentioned, across As sales was customers.

$XX.X reported we segment, up and XX% million, X% of Video sequentially, our down In revenue QX year-over-year.

Video $XX.X prior SaaS XX% of up from included hardware XX% segment the the While quarter, in revenue lower, our sales revenue year. of million were revenue or

execute while business. on appliance SaaS, the in also to focusing profitability continue of of transformation the video We growth our business continued strategic the and maximizing

than margins business total quarter. which of to with total Comcast sequentially XX% one of was basis QX sequentially. had gross We during revenue 'XX, similar segments XX.X% XX reflecting representing XXX for points XX% customer up our both Total representing points was gross last increased of margins year-over-year and company greater basis revenue quarter, the in

up 'XX, basis points lower The Broadband and a reflects gross mix sequential of for result was sales QX basis as sequentially year-over-year. XX predominantly points software favorable in margin QX. XX.X% XXX increase hardware

margin points basis sequential primarily The 'XX, continuing to basis gross was down increase due segment year-over-year. sequentially XX.X% XXX up scale. QX SaaS and to Video XXX in points was

operating increase million, sales into of revenue $XX.X slide income contract $XX.X $X.XX 'XX, for broadband year-over-year. higher million, Moving nine, representing This QX of or translated QX to and video. and per per share million for on share $XX.X down 'XX versus with statement to was 'XX QX up recent XX.X% XX.X% The $X.X $X.XX down from due XX.X% EPS wins. revenue, and all expenses QX comprised were consistent Adjusted X.X% X% compared segment EBITDA sequential sequentially 'XX million commissions QX of of reflects QX 'XX 'XX. from the

the to ended increased in average due increase dilution 'XX X.X XXX.X million and million to quarter XXXX QX a sequential of 'XX. weighted with the of QX primarily second We XXX.X is million calculated shares. debt count convertible share compared million diluted in The XXX of

ratio X.X we order Turning for the quarter. $XXX.X the second The of bookings now million. to reported book, book-to-bill was

were 'XX For it ratios QX did improve, ratio X.X 'XX, previously conditions in of stated chain normalize as and time, historical that we and follows this supply and greater as QX. book-to-bill QX expect respectively. the benchmark This to X.X our approach one we've over than what

for QX. item a attention There QX, to legal to our that associated is that our one excluded million we professional to accounting, to reconciliations recorded In $X.X like strategic your of tax is corporate draw relating I initiatives. non-GAAP expense with and from results GAAP nonrecurring from fees non-GAAP would

have we transparency nature, nonrecurring businesses. to excluded these their regarding our our costs greater Given of the performance investors non-GAAP from core provide results

in to ended used to we with address factors. in compared increase in the I a operations. XX, of will QX moment. to million a was an inventory due $XX primarily items sheet $XX.X at in on sequential of two $XX.X the 'XX. million of these net receivable, due the slide offset We accounts partially in million This by 'XX to The $XX.X cash was Turning a decrease QX few quarter. balance cash million decrease end

$X.X assets. million purchase cash used also in We fixed of of the

end DSO prior and year period. Turning to was QX XX days and XX XX in to the outstanding, of accounts compared 'XX in at sales QX receivables the 'XX,

shipments collected. the quarter Our reflected in of of since the have been second weeks two quarter a larger DSO final that portion significantly

Going our will in forward, be forecasts. pay customers one now and go-forward that take of us has an discount, informed so cash our DSOs no longer that larger will early they reflected

was It's as at Days the days tighten supply at hand QX infeed the XXX compared 'XX note lower and result inventory at end a 'XX end to 'XX. to we inventory important decline expected material on quarter end was QX the than of of XXX of that chain. in the the XXX of QX our

capital Regarding future driving our our allocation, remains growth. top priority

done we've such, As to inventory the strong meet we demand. appropriate, will invest past as when strategically in building in

condition, price shareholders including strategy levels as lower to capital stock, inventory the requirements. our corporate we previously, return that, on our for maintain balances to account inventory stock needs, in said allocation amount our of the Again, ending takes repurchases reflected flexibility stated and of quarter. At same is factors, second Having repurchases. somewhat through will any as the we've have a the the and variety to common stated our into time, Harmonic's capital that previously market timing ability depend of regulatory

our planning our activities. notes We forward in convertible XXXX also consider cash

compared the backlog of at in growing At record the QX QX, our our revenue end and demand The customer deferred and next while XX to summary, was continued QX. our revenue and $XXX.X revenue million commitments. shipments was backlog SaaS revenue business of customers backlog In This and services reflects million video broadband total within below from providing dates of record $XXX.X grow to majority our of deferred for continued end the has large expectations, request deferred products to SaaS levels. months.

reflected strength software up significantly, In addition, our in was of our as overall revenue gross mix the margins. of

impacting long-term we macroeconomic continued our market see factors not our headwinds in customers short-term these share to expect conditions, with and revenue for expectations as do growth. our see we continued deal or levels inventory do While

like to first comment going months priorities Harmonic the two a my take on reviewing here Before and moment forward. guidance, at I'd my to

First and to met our I'm and ability all of about opportunities the extremely over of the all, excited grow organizations us market ahead the a and into as technology long-term. deeper conducted opportunity, capabilities with our I've review

we with this opportunities laid To conduct long-term next the team to to will thorough updated the these my growth market how cost key appropriate our and an our priorities. and allocation collaboration following for our of late growth; share we strategic first, key review drive priorities on capital the and Day third, out at plans, facilitate I facilitate organization you scale broader our strategic effectively look I've a which organization; roadmap you up with plan forward Analyst year; to to processes with plan as in updated a expected long-term the develop progress tools revise our our based to second, on on plan. we updating

products, revised $XX on to XXXX, XX.X%, effective million our non-GAAP NOLs the year. exhausted full-year total Based for guidance range expenses in to range range of and in last range million, revenue company we're the XX. a on expect margin the $XXX up XX.X% $XX XX% from from $XXX million EBITDA review $XXX rate million, to current from the tax slide to for beginning demand macroeconomic $XXX seeing XXXX, adjusted and operating past our of year now to XX% our million continued Let's from conditions of for gross on we the we million, as basis, the in to

uses Our related stock weighted note count approximately share million. average XXX.X in diluted was was Please share price, included dilution approximately that QX average the count debt which our the $XX.XX. convertible

million. to calculation XXXX a on $X.XX price reminder, calculations from dilution per EPS cash at utilized in end of in the to from $X.XX mentioned the to the share, change range $XX $XX share subject count will to and our stock the between just guidance come As XX% is movements. depending million dilution down figure previous expected to at midpoint

guidance into higher mentioned few longer will past an XXXX one quarters. I second-half see give earlier, principal no over what We how this of seen the full to of cash DSOs of the cash have still reflects we taking handle result convertible of discount our XXXX optionality XXXX paid over option the notes. accretion early customers on in repayment us we and as Our the our than larger

to effective to from $XX the range the XX.X% third the to XXX range a for XX.X%. of and $XX to of from adjusted company quarter to to range revenue on range of million $X.XX margin million million to share diluted million to a of from from rate XX, total to million, For count loss tax $X cash slide range weighted to EPS approximately average million, million, Operating of million we of expect XXX.X million. gross $X of range to an in then XXXX profit $X.XX a XX%, expenses million and $XXX $XXX $XX EBITDA in $XX

Turning a adjusted based is first-half. $XXX $XXX XXXX $XX margin progress Gross our million mix to is million to XX.X% reflecting second-half expense we broadband expect million million. to achieve the date, slide revenue Operating $XXX in XX.X%, midpoint. on million, between EBITDA XX $XX full-year between between of the for at of the and XXXX guidance to million the prior between to $XXX to versus the hardware much to greater below

of to to million For we margin million of our EBITDA range from to Broadband XX.X%, in range segment the $XX QX, $X in in range expect million of range $XX the expenses to $X XX.X% and million million. revenue gross $XX the to in $XX million, operating adjusted

guidance. full-year will Now, on segment XX, review 'XX Video I slide

to revenue to EBITDA in range million of expenses million expect the million. the million to in in the $X operating of to $XXX margins We range of XX%, $XXX and gross XX% range million, range adjusted in million of $XXX $XX the $XXX

For of million loss profit seeing current our of somewhat we revenue million operating $XX headwinds environment. conservative, Video given million, to This $XX EBITDA gross margin to and to the $XX $XX in customers. $X we reflects guidance short-term wider of We XX.X%, range segment in expect of a expenses range of from appropriate range the million, on in adjusted a XX.X% and the with is QX, range in we the to believe earnings think $X which a it's to related are to million million. range revenue

record quarter we and growth. segment deferred attention which for on you, quarter us today. Video future planned further second segment the for and shift continue to with our SaaS. well revenue We Thank to strategic second our ended during believe backlog positions of progress the your with long-term everyone Broadband transformation growth our with continued summary, and the execute plans we In in

questions. open for before I'll it Patrick turn for the we call final to remarks up And now back

very Walter. Thanks much,

got you summary right. think the I

and advantage the opportunities team continue our relationships expanding we of our serve. leveraging market call in all front on to remain the We you leadership services, and appreciate today. in customer listening to all markets products full of Our this and we determined the of lead take And us. confident

appreciate continued we your support. shareholders, Our

for let's that, With call open questions. now the up

our for Leopold first James. question. Simon first moment One comes line our Certainly. of question from Raymond And the from

please? Your question,

Great. Thanks question. the for taking

here, trying because to really this in to one. quarter the combination quarter, of we just comes last seems this sure and couple a understand changed that to what's offered make I'm but terms is of factors you digest a of not to trying down commentary it things So, to it me

steady perhaps, So, I the seems sort customer would we with be calendar outlook customers been the other your second-half on your if, your the customers largest. more had too the think like expecting, not was besides sitting of strength it at running And other pace. from year, thought. pretty a your during for given is customer largest you as growth inventory, of also this quarter, And felt we much showing are third and up maybe you the largest seeing

tie the plugging that and very, make sequential And quarter, it together, sure fourth just as growth, correctly, one clarification anticipating to to what very in want you're I'm if you. does there? this gets us is seem I Thank strong and

lot thank a well, There's question. there you, Simon. Okay, the in

what past to back or we in change changes what some not of headline, demand, know, terms to us. expected FDX And some from long-term of think factors; them. think in happening parse mid-range It communicated saw secondarily, to one inventory, with we does in quarter being And out different the what's customer. cannot absorption way I even of plans. customers. market indeed change some Maybe We in of contraction. you significant reflects a transition was other one that As any going terms reflect was though exclusively transpired don't during the

earnings business, for it's they -- the encouraged outlook for given continuing the confident the we're And give their is their in recent guidance, the here these confident to that, certainly deployment the as yes, for business drive quarter, with several outlook XXXX our aggressiveness and we're to think in premature speaks in our their advancing that customers customers, really of by to and the issued I as think their unchanged. I while continue statements by guide fourth they've positioning We're businesses. plans. we've releases,

in that wanted your bit for I if quite just is Thanks your the more you get I clarification. little to And might, follow-up, agreements structure how color on cable whether a maybe CableOS, a whether software getting can the the you there licenses, a cable just aspects if Thank are around stream, customers perpetual paying renewal the by business is you. arrangement (ph), side. unpack on [seat] the

And, Walter, a and of common there it. model, model different far But of away, Simon, of bandwidth in. the you couple fixed most I'll around most Okay, we've with chime license and by can the standard. used. are provisions is specific truth is amount common a perpetual a associated take the a

traffic; underlying X-gigabits, for a So, let's megabits, DOCSIS [Indiscernible] the license perpetual with is just say XXX of XX-gigabits that, compute. associated X.X that

So, you'd a customer have to migrates when new software agreement? X.X, a essentially

That That is the correct. model. most is common

were going you to Walter, And, say something?

through Yes, point, I was selling there and just highlighted, as add, CableOS how we're going models just different of are transact emphasize forward. that will and to customers, Patrick the in that going to how the to terms

So, there many who be subscriber as buying on customers, see we a customers basis. will are

terms have So, will increase network an their that subscribers, terms as software of our of in they impact adding revenues. in

taking questions. for you Thank the

Okay, thank you.

line Ryan & Company. of our And question from from the Instructions] comes Needham [Operator Koontz next you. Thank

please? question, Your

thanks the question. And for

pace Given hearing customer declines reports recent broadband of in if project I've was been of traffic And your software over-purchase any that there impact and bandwidth license relative I model consumption, to history some demands. seeing the you're maybe there wonder have about inventory. around

your thoughts like headwinds it these sounds as demand? might those look parse of terms any near-term mentioned me you in you Can out of was be So, you near-term how think affecting international. mostly you for at it and it

question. Walter. the Hi, Ryan, Thanks for it's

international more that broadband certain delaying We're and So, forward both seeing of terms being I projects. reflect are and think to with comments, regards with in all, comments regions decisions move certain first video. those their demand impacted of to across

So, I that first specifically. clarify wanted point to

customers are adjusting opening we had as then And inventory in remarks, emphasized levels. our secondly,

something the out in and that's there, with take plans reflect customers their across moving from forward. comments that's that's here. And point happening as really important away necessarily board in deployments terms a think the I many think of to I

as happen. Patrick wins happening, the is earlier, And the the roll-outs of position and the where continued that our from share, we the and stand that have we've expect, continue never stronger. we and will customers We from expectation in highlighted fundamentals, growth market to of been

I So, comments. those clarify to wanted just with

That's great. to thought participate see And in to you continue trials. comment want in feel the do We sounds customers, that to really FDX think? X. a you and to with begin It 'XX, well-prepared you When you'll forward like DOCSIS DOCSIS around total, some move of these still early do over think talking X?

progress fluid the picture, technology I with anticipated. think a many more trial than has moved Ryan. the It's progress that progress, been involved the quickly Actually, we've and actually early

We now we -- happening revenue just initial expect XXXX. beginning but true expect deployments trials, deployment not be in to

Now, along than more customers further aggressive are others. and some

pace progress more be in leading to of there's DOCSIS X.X think, customers we is to XXXX. to that, doubt that, believe of door and much have in of still made, here, the but story, I start that to some pivot the very we've no I will that a because XXXX, So, now even open particular

telco And still going competitors. for -- And also competitive enable, it think I they're additional in motivating think continuing of It's competing that as pure are customers the to a versus aggressiveness cable exciting. I to many earlier very it's or at looking fiber platform your creating them space. interesting it's question, our -- I this and think, speaks, back maybe the have of to still part

you both. Helpful, Patrick. Thank

you. Thank

Thank you.

of Thank you. And from question comes Frankel Securities. the Rosenblatt Instructions] [Operator next our Steven line from

please? question, Your

Thank you, Patrick.

telling was, second of part that point; still customer this they of there going the were Xs I deployment Are ramp this largest us also are back-half they customers, back circle the your ramping the to year. Simon's just may of in other some that us was some not phases. a had was of up at through of really ready yet, those breaks this you of set all that assumption up? would one me putting started be including in hadn't Tier question, Let And to the gotten assumption early on think, which the they're something, customers be

it's answer Patrick Steve, Hey, more can and some then, add I'll Walter. first color.

it multiple you earlier QX. and our full-year look here the that guide that think, that provided. customers in mentioned you at our the in we number up see expect to based And in guidance, be was I Q&A, on when we've do ramping

So, the we're starting answer up, ramp quick seeing it to seeing QX yes, we're that built and our is, we've in to and it guidance, in. customers

if Patrick, -- you And

I that captures it No, all. think

to stepping is one no But gap, the the up Okay. from QX in fill clearly, guidance.

some maybe Patrick, color X wins? two on Tier new the

community." can We've to and definitely them. They're "Household quotes, premier or I players, they're let's about excited the say, in in if names So, use onboard. account, we're excited have them

well have we in But but yet. to before think really diversity mentioned as over business. speaking go. here. contributing it's going of the well, And so multi-million as likely, year-end, only And will to initial I orders, our we on neither your breadth customers, as remarks, of a customers, a that's of building, part dollar revenue I the layering is ways time, to think question, that, revenue prepared that's modest larger be what of greater

having not Yes, for their always own in our has easy more the Steve, it's But exactly ramp it's the funnel, to on. going every the customer news good prognosticate only thing pace be; business. will what of got

progress to America, well And North continuing so, in overseas. we're continuing as thrilled progress as see

the view, I that said, point think the of a have a I ability a times, locked clarification share didn't to extent? you a feel you am in from couple or were But I losing if just backlog backlog, And I Okay. was like some do or customer, market you on technical any to there. cancel shifts

is with push purchase customers obviously we What and will out experience, sometimes dates. customers order locked their are Generally, see, the commitment. in is

have we an work so, compared to regards with us does from as of their order to that with being to and plans timing, perspective cancelable. our requirement, And customers the and is impact something so

you. thank right, the I'll All jump in queue. back

you. Thank

from comes question the next our from George And Instructions] Jefferies. line Notter [Operator you. Thank of

question, Your please?

on provide Tier at that question. the you you? the Hi, I'm on is any X, how all Thanks software if the curious if large everyone. Blake is George. maybe existing, This and have our taking additional can for with contract detail deal for different, any for economics it's improved if follow-on structured,

something and you understand appreciate ask for unpack to the it's not can question, coming I we appreciate I you. really where But from. I it's that

the of the differentiation, is enduring. headline power the is that software think I message that the

some the an we've our customers an faced "Will we stay you?" no are the or industry is that other software that, it other leadership, the -- what relationships in as or continuing building capability. software of talk about we're the built of to the previously reflection with it and, we software aspects But leadership and have in has our or a -- been important that, with with really done say a way than of duration our continuing the scope it's the think example can't customer. offering as around is of, one-for-one relationship What the of of the block. of major I question around think the have that with the durability built and I And

quantity how out XX Thanks. for larger stand during still the Is time maybe they're believe all did and change lead if the months, where that curious cable for node then they quarter, about orders. access And I case, equipment, they Understood. so? at did -- recently,

here. Walter it's Blake,

many flexibility adjustments. up more And from what at up order across think inventory inventory want in have to I we think, made hold. customers terms ability looking that's that comes customer to we -- making around our us today. square have a they we back with we've the buffers supply and of made you to customers determining And remarks, we and certain XX-week levels inventory. that, comments given are and and improved, what from I in that lead our can that's based the customers But And chain require lead perspective, So, long to there's the or chain lead-time time a parts supply the work on that their customers times. many standpoint, where to parts from continue say is And see in continued actually I see that requirements. now opening perspective, comments our I

Great, thank you.

Thank you, Blake.

question from Instructions] next [Operator Capital. line the of And Savageaux from Tim Northland you. Thank comes our

Your question, please?

Got earlier about the the extent, new a guess though on I well. there you here, Does Tier outlook, and stated, for your Hey, imply wins, 'XX, following questions I'll of explicitly growth X Patrick, not the Charter as about good unchanged. throw first, talk afternoon. couple To discussion in that in being real the meaningful even growth And help booked coming this terms any though -- meaningful revenue close of achieving the those to from get year? the in much of those year you've some ramp aggregate, plan. -- wins won't you to you that to three that with orders, seen pretty next contribution

I appreciate Tim. the question,

quantitative about a be think any specifically about appreciate, And XXXX. for think as Charter. to is comment can't I talking will in I way also premature us you I

to what we've seen the technology, et get Xs, while It's and going a cetera. relationship, a but to paradigm, But, look, back takes going. to operational addition with other new in powerful Tier it Comcast

there modest lies better fact worked of there a contribution XXXX, and that of no the XXXX through. share lack Tier that. is say in for in these the non-ramp, cannot sure. a I working we're from that's XXXX, and contribution XXXX. And in each is ahead term, newer is that there be needs so some opportunity the for accounts, to through in lion's in indeed, that But Xs of And of

concentration certainty business, cetera, customer to in look that can our we we out as one XXXX, a that's and as in confidence, we the et be of closer And more will we've why different of I we or at XXXX, we say timing with think reasons we're XXXX more a back and think to reviewed more we're with these hold plans. customers exact detail in have to quantitative little being online. Xs Exact size, until going have our as and to Tier more come XXXX look place

a please and on to a And here, me. it. might Got little sticky, bear with get this topic so separate

what reflects of comments of in kind there. order that; book about environment. like some And that's You prepared areas demand weakness seem means the say And -- to outside in it focused Tier of good commented on your the the you that well, Xs hardware, pretty book for new a earlier mentioned me. at it's least to weakening order of a call your remarks and the A, When you didn't plan. you feel most be

side So, the CCAP, seeing house router the of in versus how are side. the their we virtualized behaving some between differentiation the business node is

C, side And like over your share market good just you extent time, I long-term 'XX market is that what's in guys clarify be nodes. I loss have targets. thing the that you sorry. the that me rethinking growth for margins? less we FDX very advance of like hardware might wouldn't losing imply numbers business coming. And maybe ramping targets? that were your you you the B, Day so one a higher implicitly model, in of said did to hand, mention A, Walter there. Patrick, not told that, some Can thought one the arguably is didn't behind feel new support you but share, On quickly and pretty a established big, Analyst that? And is well-positioned in revenue, competitors apologize

several we'll things our it's the can through okay. along us and are But there, there track maybe you to remind No, so best them, way. do

we don't the start you and at Walter, -- Why end,

me that handle first, Tim. one Let

and terms strap remarks, we to with year planning process now So, strat team long-term my in in thoroughly through a the working and every go through I'm focus, the into in our our up new build go process, that coming and plan. organization of

as later internally a Day that that revising team year. our together at working Analyst be presenting be will We'll this we plan. then so, and And

something happen this So, I will each just is wanted that and to every clarify, year.

presented provided Day. you with opportunity our and regards of and a for we're itself earlier the position position. have long-term our been as in some to at strong you out remarks, the overall and pointed long-term our market the those terms of very still terms in together in look if the models of of in target market, and were put year plan, us Analyst that Patrick And as at And ago expect previously, recasting terms would our in us

Patrick let I'll So, handle the next couple here. of questions

Walter. Okay, thanks,

briefly I direct Tim, topics of to there's touch interrelated couple you try and think follow-up. So, can then I'll a

particular from the made we've is no base done is think think customer we're X.X. order, we've And work positioned the We we're exceptional. well feedback products may and exceptional. getting on So, DOCSIS the we be there the incredibly

hardware quick X.X DOCSIS is of even we've a a core share. software more and market So, And way basis the been part in the as fact, see of course, the opportunity because to speed an adapt agility of of big we there. capture able to

from perspective, X.X competitive the and as strengthening hardware it's of see positive a price in point. frankly, position terms we higher a a So,

So, from multiple perspectives it's a good thing.

may some product. a there be Although look folks to begin the delay bit of in little as DOCSIS market to X.X ahead

maybe market and to touched market that any we we Look, share are broadly. also share. to not You that do think losing more related

what share we software we by the fact, have virtualized think on the think there. far out core, we word In that away is correct solution the only politically and leadership real

time think the market DAA market continue we though, the side to vCMTS. leader our for On of Harmonic the recent the most calls terms edition hardware all particular, out first think expectations and in share in here Report, the things things we I of actually exceed clear of in and DeLorean as

I hardware were -- we've me about and of you think you hardware are. was and And saw the excuse discussed saw software the the they mix quarter what maybe balance but software, kind the is as tilted not software asked strong indeed pretty lighter as the second which margins reasons strong in you least, last for but why

it. doubt about no So,

Our software strength I would commanding. in call

North in our as front inside your to more particularly side though, couple are that customers where at and of I'll our looking America different models customers some everybody us have a overseas opportunity third-party and comment fact that out model well hardware there who that's just actually the buying There're we we are Node to of node fine the and provide the platform while and customers, remind RPD by RPD. a we take On than frankly. some have some

lower in we strong in the The revenue on it's is third-party And RPD highest the and the very goodness, gross even that's enclosures perspective, many reflect hardware part saw out of from it is the if does regards a second value, margin solution. a in business piggyback headline number play though what highest you the maybe profit quarter. and can whatnot,

summary, terms in think don't lost market we losing share in opportunity. of So, any we're

we X.X in that doing a mix business are our a of nothing different that and advent pursuing is We DOCSIS think tilt may the couple market. higher but software towards models of solidifying position the

much. very you Thank Great.

cover you that after? were did but what me, Forgive

appreciate I did. it. absolutely It Thanks. really

thank right, All you.

question And from the next of next question. Alyssa Thank line you. our for comes Barclays. moment our One from Shreves

Your please? question,

Barclays. from on Shreves Alyssa is this Hi,

their when delaying? Just see did could of kind in Specifically, the And you you slowdown? little it about changing customers kind talk plans bit all a quarter of was broadband and the at you're you start Thanks. the little about also, same time bit a to you or in accelerate? see GEOs did can it video? weakness then, in talk seeing And the which

and and fourth third quarter exact quarter, information were is modest and the receiving as and Alyssa. somewhat of to quarter, yes, think end, guidance. by Okay, requests a second there's really, the impact timing, back-half question, for in see, you onwards. quarter, impact our the on on broadband started customers as we the don't really thanks evidenced much The for direction on can of I to or back this more but mid-quarter more changing be And further parsed movement

we On really the the side of macro it's think definitely the weakness video business, is related. and overseas

is business worldwide. SaaS Our strong

instances That of dialog the planned. Our internationally. delays, manifest as appliance business The ready do later of not a to we this it was We're really year. in real America. North project, well, video the little quite pull kind like weakness trigger in we that you in saying, kind robust saw saw but lost to quarter know several customers not what? as We'd

Thanks.

right. you. All Thank

remarks. question-and-answer further does for This you. today's I'd program. session Thank program to of any back to the management the conclude like hand

today. well, session. and remarks, our All right, thank Q&A very good all this Through again think for us joining prepared I you is

and mistake, day. the we're and what Thank long the you understanding here, focused fundamental look the believe conservative we of we're that you we're no But our full we drivers Walter long-term. make mid out it's playing XXX% will extremely we about the believe said, like. remainder as and future which progress. year evident hope focused on ball keeping on I about and business. it. apprised excited remain force looks again. We're our to this market We've to of forward Good of doubt for all, There's laid execution, no best in this understanding

This and Thank in ladies conference. you, program. for does participation today's your gentlemen conclude the

may disconnect. Good day. You now