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Harmonic Announces Updated Guidance for Second Quarter 2017 ResultsSAN JOSE, Calif., July 14, 2017 /PRNewswire/ -- Harmonic Inc. (NASDAQ: HLIT), the worldwide leader in video delivery infrastructure, today announced updated guidance for the second quarter of 2017. For the second quarter of 2017, the Company anticipates:
See "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" below. Bookings for the second quarter of 2017 are anticipated to be in the range of $90.0 million to $91.0 million. Cash and cash equivalents for the second quarter of 2017 ended at $52.8 million. The updated guidance is based on preliminary results and remains subject to change in connection with the preparation of the unaudited financial statements for the quarter ended June 30, 2017. "Market demand for video infrastructure delivered through software subscription and cloud services is accelerating," said Patrick Harshman, president and chief executive officer of Harmonic. "During Q2 2017, with respect to our OTT SaaS business,
While this improvement in OTT SaaS activity reduced revenue and profitability for the quarter, we believe it will establish a trajectory for more predictable future financial performance in our Video segment. In our Cable Edge segment, we are now confident that the long investment period is nearly over, in part due to the achievement in Q2 of a significant field trial milestone with a major customer. Q2 operating expenses were primarily impacted by a shift in the timing of reimbursement for engineering spending by one of our large customers from Q2 to the current quarter. With accelerating momentum in our software businesses and resultant heightened confidence in our mid-to-long term growth trajectory, we have initiated re-organization efforts to align our operating expenses with transitioning demand to our Video OTT SaaS and CableOS solutions." The Company will release its unaudited second quarter 2017 financial results after the market close on Monday, July 31, 2017. Harmonic will also host a conference call that day at 2:00 p.m. Pacific (5:00 p.m. Eastern) to discuss these financial results and its outlook for 2017. A listen-only broadcast of the conference call will be accessible either from the Company's website at www.harmonicinc.com or by calling +1.800.240.9147 or +1.574.990.1032 (passcode 53385607). A replay of the conference call will be available after 4:30 p.m. Pacific at the same website address or by calling +1.855.859.2056 or +1.404.537.3406 (passcode 53385607). About Harmonic Inc. Legal Notice Regarding Forward-Looking Statements Use of Non-GAAP Financial Measures These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Harmonic's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Harmonic's results of operations in conjunction with the corresponding GAAP measures. The Company believes that the presentation of non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to, the Company's reported results prepared in accordance with GAAP. The non-GAAP measures presented here are: revenue, gross profit, operating expenses, income (loss) from operations and net income (loss) (including those amounts as a percentage of revenue), and net income (loss) per diluted share. The presentation of non-GAAP information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP, and is not necessarily comparable to non-GAAP results published by other companies. A reconciliation of the historical non-GAAP financial measures discussed in this press release to the most directly comparable historical GAAP financial measures is included with the financial statements provided with this press release. The non-GAAP adjustments described below have historically been excluded from our GAAP financial measures. These adjustments are Cable Edge inventory charges in connection with certain product lines, restructuring and related charges, non-cash items such as stock-based compensation expense, amortization of intangibles, non-cash interest expenses related to convertible debt, and adjustments that normalize the tax rate. The effects of stock-based compensation expense specific to common stock options are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant impact on our GAAP financial results. The Company has also provided in this release the following non-GAAP financial measures: Total Contract Value ("TCV") bookings for OTT SaaS are comprised of the total value of new customer contracts closed during a specified period, including license, maintenance and services contracts, that we believe to be firm commitments to provide our software solutions and related services. Bookings by their nature are significantly based on estimates and judgments that we make regarding total contract values, and bookings are not meant as a substitute measure for revenue in accordance with GAAP. Annual Recurring Revenue ("ARR") is used to assess the trajectory of our OTT SaaS business. ARR means, as of a specified date, the contracted recurring revenue which includes both subscription and maintenance contracts (and excludes perpetual license, term license and service agreements) that are current and booked with a future start date. ARR should be viewed independently of revenue and any other GAAP measure.
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