HARMONIC INC.
For the period ended Jul 3, 2026. Filed Aug 17, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 3, 2026 · Filed Aug 17, 2026
HLIT$9.51+2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-04-03; filed 2026-05-13.
0001193125-26-221899
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-07-03; filed 2026-08-17.
0001193125-26-353891
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 57 previous paragraphs and 64 current paragraphs.
35 unchanged; 21 reworded; 7 added; 1 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Asset Impairment and Related Charges
Current report
During the second quarter of fiscal year 2026, the Company recorded additional lease-related impairment and other charges of $0.4 million. The charges consisted of $0.1 million in right-of-use asset impairments and $0.3 million related to the fair value of other unrecoverable facility costs. These adjustments were driven by changes in underlying assumptions, including updated estimates of space utilization, sublease recoverability, and expected cost obligations.
Current report
During the second quarter of fiscal year 2025, the Company recorded additional lease-related impairment and other charges of $1.6 million, which consisted of $0.4 million in right-of-use asset impairments, $0.3 million in leasehold improvement asset impairments, and $0.9 million related to the fair value of other unrecoverable facility costs.
Current report
*not meaningful
Current report
The provision for income taxes increased during the three months ended July 3, 2026, compared to the corresponding period in 2025, primarily due to pretax income in the current period, compared to the pretax loss in the prior period.
Current report
In addition, on June 16, 2026, we completed the previously announced sale of our Video business. Proceeds from the sale, received at closing, were $137.9 million, subject to final adjustments under the terms of the purchase agreement. We plan to use the proceeds from the sale to support strategic growth initiatives and to further fund our share repurchase program.
Current report
Net cash provided by investing activities increased by $134.6 million during the first six months of fiscal 2026, compared to the corresponding period in 2025, primarily due to cash proceeds received for the sale of the Video business in the current period.
Removed paragraphs (1)
Previous report
Net cash used in investing activities decreased by $0.5 million during the first three months of fiscal 2026, compared to the corresponding period in 2025, primarily due to lower purchases of property and equipment in the current period.
Reworded paragraphs (21)
Previous wording
We conduct business in three geographic regions—the Americas, Europe, the Middle East, and Africa (“EMEA”), and Asia-Pacific (“APAC”). We sell broadband solutions and related services, including our cOS™ software-based broadband solutions, to broadband operators globally.
Current wording
We conduct business in three geographic regions—the Americas, Europe, the Middle East, and Africa and Asia-Pacific. We sell broadband solutions and related services, including our cOS™ software-based broadband solutions, to broadband operators globally.
Previous wording
As previously reported, on December 8, 2025, we entered into a Put Option Agreement to sell our Video business to Leone Media Inc. (d/b/a MediaKind) (the “Buyer”). Under the Put Option Agreement, the Buyer irrevocably provided the Company with the right to require the Buyer to purchase our Video business for a purchase price of $145 million in cash, subject to working capital and other adjustments. On March 16, 2026, we delivered a notice of intent to exercise the Put Option to the Buyer requesting that Buyer execute the Asset Purchase Agreement (the “APA”). On March 20, 2026, we executed the APA to complete the transaction. The closing of the transaction is subject to satisfaction of customary closing conditions. The transaction is expected to close in the second quarter of fiscal 2026. The results of the Video business are presented as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented. The assets and liabilities of the Video business have been reflected as assets and liabilities of discontinued operations in the accompanying unaudited condensed consolidated balance sheet for all periods presented.
Current wording
As previously reported, on December 8, 2025, we entered into a Put Option Agreement to sell our Video business to Leone Media Inc. (d/b/a MediaKind) (the “Buyer”) for a purchase price of $145 million in cash. On March 20, 2026, we executed the APA to complete the transaction. On June 16, 2026, we completed the sale of our Video business to the Buyer pursuant to the APA. Proceeds from the sale were $137.9 million paid at closing, subject to final adjustment under the terms of the APA. The results of the Video business are presented as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented. The assets and liabilities of the Video business have been reflected as assets and liabilities of discontinued operations in the accompanying unaudited condensed consolidated balance sheet for all prior periods presented.
Previous wording
Our critical accounting estimates are disclosed in our 2025 Annual Report on Form 10-K, as filed with the SEC on February 24, 2026. There have been no significant changes to these estimates during the three months ended April 3, 2026.
Current wording
Our critical accounting estimates are disclosed in our 2025 Annual Report on Form 10-K, as filed with the SEC on February 24, 2026. There have been no significant changes to these estimates during the six months ended July 3, 2026.
Previous wording
Appliance and integration net revenue increased by $32.2 million for the three months ended April 3, 2026, compared to the corresponding period in 2025, primarily driven by a $22.6 million increase from customers ramping up due to new deployments in North America, a $7.5 million increase in outside plant services, and a $3.1 million increase from projects in APAC and LATAM regions.
Current wording
Appliance and integration net revenue increased by $76.6 million for the six months ended July 3, 2026, compared to the corresponding period in 2025, primarily driven by a $71.7 million increase from customers ramping up due to new deployments in the Americas, including a $10.3 million increase in outside plant services.
Previous wording
SaaS and service net revenue increased by $4.6 million for the three months ended April 3, 2026, compared to the same period in 2025, primarily due to increased support services in the current period.
Current wording
SaaS and service net revenue increased by $2.1 million and $6.7 million for the three- and six-month periods ended July 3, 2026, respectively, compared to the same periods in 2025, primarily due to increased support services in the current periods.
Previous wording
Our gross margin decreased by 250 basis points in the three months ended April 3, 2026, compared to the corresponding period in 2025, primarily due to an unfavorable product mix which included a higher percentage of outside plant services.
Current wording
Our gross margin improved by 660 basis points and 210 basis points in the three- and six-months periods ended July 3, 2026, respectively, compared to the corresponding periods in 2025, primarily due to a favorable product mix associated with a higher percentage of new deployments in North America.
Previous wording
Research and development expenses increased by $1.2 million, or 6%, for the three months ended April 3, 2026, compared to the corresponding period in 2025, mainly due to increased investment to support business growth.
Current wording
Research and development expenses increased by $3.2 million, and $4.4 million, for the three- and six-month periods ended July 3, 2026, respectively, compared to the corresponding period in 2025, mainly due to higher incentive compensation and increased investment to support business growth.
Previous wording
As discussed previously, the results of the Video business have been classified as discontinued operations for all periods presented. Certain indirect corporate costs, such as IT and facility costs, previously allocated to the Video reporting segment, do not qualify for discontinued operations accounting classification and are now reported within continuing operations. These stranded costs, which are included in research and development expenses, were $0.4 million and $0.8 million for the current and prior periods, respectively.
Current wording
As discussed previously, the results of the Video business have been classified as discontinued operations for all periods presented. Certain indirect corporate costs, such as IT and facility costs, previously allocated to the Video reporting segment, do not qualify for discontinued operations accounting classification and are now reported within continuing operations. These stranded costs, which are included in research and development expenses, were $0.2 million and $0.3 million for the three months ended July 3, 2026, and the corresponding period in 2025, respectively. The stranded costs were $0.6 million and $1.1 million for the six months ended July 3, 2026 and the corresponding period in 2025, respectively.
Previous wording
Selling, general and administrative expenses increased by $2.5 million, or 13%, for the three months ended April 3, 2026, compared to the corresponding period in 2025, primarily due to increased investment to support business growth.
Current wording
Selling, general and administrative expenses increased by $4.1 million, and $6.7 million, for the three- and six-month periods ended July 3, 2026, respectively, compared to the corresponding periods in 2025, primarily due to higher incentive compensation and increased investment to support business growth.
Previous wording
As discussed above, the stranded costs resulting from the disposition of the Video business included in selling, general and administrative expense were $1.6 million and $0.8 million for the current and prior periods, respectively.
Current wording
As discussed above, the stranded costs resulting from the disposition of the Video business included in selling, general and administrative expense were $1.9 million and $3.5 million for the three- and six-month periods ended July 3, 2026, respectively. The stranded costs were $1.1 million and $1.9 million for the corresponding periods in 2025.
Previous wording
Interest expense, net decreased in the three months ended April 3, 2026, compared to the corresponding period in 2025, primarily due to lower costs of borrowing and lower outstanding principal balance resulting from the repayment and reborrowing activities under the Revolving Facility during the current period.
Current wording
Interest expense decreased slightly in the three and six month periods ended July 3, 2026, compared to the corresponding periods in 2025, primarily due to a lower outstanding principal balance resulting from the repayment and reborrowing activities under the Revolving Facility during the current periods.
Previous wording
The change in other income (expense), net, in the three months ended April 3, 2026, compared to the corresponding period in 2025, was primarily due to fluctuations in the foreign currency exchange rate against the U.S. dollar.
Current wording
The changes in other income (expense), net, in the three and six months ended July 3, 2026 compared to the corresponding periods in 2025, was primarily due to fluctuations in the foreign currency exchange rate against the U.S. dollar.
Previous wording
The provision for income taxes increased in the three months ended April 3, 2026, compared to the corresponding period in 2025, primarily due to $4.6 million of withholding taxes on the distribution from a foreign subsidiary and higher pretax income in the current period.
Current wording
The provision for income taxes increased during the six months ended July 3, 2026, compared to the corresponding period in 2025, primarily due to higher pretax income and $4.6 million of withholding taxes on the distribution from a foreign subsidiary in the current period.
Previous wording
We expect to continue to manage our cash from operations effectively, together with deploying cash in working capital for growth. The cash we generate from our operations enables us to fund ongoing operations, our research and development projects for new products and technologies, and other business activities. We continually evaluate our cash needs and may decide it is best to raise additional capital or seek alternative financing sources to fund our operations and the growth of our business, to take advantage of unanticipated strategic opportunities, or to strengthen our financial position, including through drawdowns on existing or new debt facilities or new debt and equity financing. In the future, we may enter into other arrangements for potential investments in, or acquisitions of, complementary businesses, services or technologies, which could require us to seek additional equity or debt financing. Additional funds may not be available on terms favorable to us or at all. Conversely, we may also from time to time determine that it is in our best interests to voluntarily repay certain indebtedness early. We believe that our current sources of funds will provide us with adequate liquidity during the 12-month period following April 3, 2026, as well as in the long-term.
Current wording
We expect to continue to manage our cash from operations effectively, together with deploying cash in working capital for growth. The cash we generate from our operations enables us to fund ongoing operations, our research and development projects for new products and technologies, and other business activities. We continually evaluate our cash needs and may decide it is best to raise additional capital or seek alternative financing sources to fund our operations and the growth of our business, to take advantage of unanticipated strategic opportunities, or to strengthen our financial position, including through drawdowns on existing or new debt facilities or new debt and equity financing. In the future, we may enter into other arrangements for potential investments in, or acquisitions of, complementary businesses, services or technologies, which could require us to seek additional equity or debt financing. Additional funds may not be available on terms favorable to us or at all. Conversely, we may also from time to time determine that it is in our best interests to voluntarily repay certain indebtedness early. We believe that our current sources of funds will provide us with adequate liquidity during the 12-month period following July 3, 2026, and over the longer-term.
Previous wording
As of April 3, 2026, we had an outstanding principal amount equal to $111.5 million under our Credit Agreement, consisting of $75.0 million under our Revolving Facility and $36.5 million under our Term Facility, of which $3.0 million is scheduled to become due in the 12-month period following April 3, 2026. As of April 3, 2026, our total minimum lease payments are $22.3 million, of which $6.6 million is due within 12 months of April 3, 2026.
Current wording
As of July 3, 2026, we had an outstanding principal amount equal to $110.8 million under our Credit Agreement, consisting of $75.0 million under our Revolving Facility and $35.8 million under our Term Facility, of which $3.0 million is scheduled to become due in the 12-month period following July 3, 2026. On July 7, we used cash on hand to repay in full the $75.0 million balance outstanding under our Revolving Facility. Refer to Note 13 on the Notes to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional details. As of July 3, 2026, our total minimum lease payments are $22.0 million, of which $6.5 million is due within 12 months of July 3, 2026.
Previous wording
As of April 3, 2026, our principal sources of liquidity consisted of cash and cash equivalents of $109.0 million, net accounts receivable of $83.5 million, and $82.0 million remaining available under the Revolving Facility of our Credit Agreement.
Current wording
As of July 3, 2026, our principal sources of liquidity consisted of cash and cash equivalents of $231.9 million, net accounts receivable of $89.9 million, and $84.7 million remaining available under the Revolving Facility of our Credit Agreement.
Previous wording
Our cash and cash equivalents of $109.0 million as of April 3, 2026 consisted of bank deposits held throughout the world and money market funds, of which $46.2 million was held outside of the United States. At present, such foreign funds are considered to be indefinitely reinvested in foreign countries to the extent of indefinitely reinvested foreign earnings. In the event funds from foreign operations are needed to fund cash needs in the United States and if U.S. taxes have not already been previously accrued, we may be required to accrue and pay additional U.S. and foreign withholding taxes in order to repatriate these funds. The expected proceeds from the disposition of our Video business pursuant to the APA will be used to fund ongoing operations and support our capital allocation priorities. We do not expect the disposition of the Video business to have a material impact on our ongoing liquidity and capital resources.
Current wording
Our cash and cash equivalents of $231.9 million as of July 3, 2026 consisted of bank deposits held throughout the world and money market funds, of which $49.7 million was held outside of the United States. At present, such foreign funds are considered to be indefinitely reinvested in foreign countries to the extent of indefinitely reinvested foreign earnings. In the event funds from foreign operations are needed to fund cash needs in the United States and if U.S. taxes have not already been previously accrued, we may be required to accrue and pay additional U.S. and foreign withholding taxes in order to repatriate these funds. As discussed above, we plan to use the proceeds from the sale of the Video business to support strategic growth initiatives and to further fund our share repurchase program. We do not expect the disposition of the Video business to have a material impact on our ongoing liquidity and capital resources.
Previous wording
Net cash provided by operating activities decreased by $51.9 million during the first three months of fiscal 2026, compared to the corresponding period in fiscal 2025, primarily due to an elevated amount of collections in the prior period associated with strong revenue performance in the last quarter of 2024.
Current wording
Net cash provided by operating activities decreased by $45.6 million during the first six months of fiscal 2026, compared to the corresponding period in fiscal 2025, primarily due to an elevated amount of collections in the prior period associated with strong revenue performance in the last quarter of fiscal 2024.
Previous wording
Net cash used in financing activities increased by $8.5 million during the first three months of fiscal 2026, compared to the corresponding period in 2025, primarily due to $6.9 million of higher stock repurchases in the current period, partially offset by a $1.4 million decrease in withholding tax payments related to the net share settlement of restricted stock units.
Current wording
Net cash used in financing activities decreased by $2.9 million during the first six months of fiscal 2026, compared to the corresponding period in fiscal 2025, primarily due to $7.2 million of lower stock repurchases in the current period, partially offset by a $3.8 million in proceeds from other loans in the prior period.
Previous wording
As previously noted, we classified the results of our Video business as discontinued operations in the consolidated statements of operations for all periods presented. The related assets and liabilities associated with the Video business were classified as held for sale in the consolidated balance sheets.
Current wording
As previously noted, we classified the results of our Video business as discontinued operations in the consolidated statements of operations for all periods presented. The related assets and liabilities associated with the Video business were classified as held for sale in the consolidated balance sheets for the prior period presented.
Previous wording
Net sales from discontinued operations were $50.1 million for the three months ended April 3, 2026, compared to $48.3 million for the three months ended March 28, 2025. The increase in net sales in the current period was primarily driven by a $4.2 million increase in SaaS and service revenue due to higher usage by existing customers, partially offset by a $2.4 million decrease in product sales. The loss from discontinued operations, net of tax, for the three months ended April 3, 2026 was primarily attributable to $4.0 million non-recurring advisory fees related to the disposition of our Video business.
Current wording
Net sales from discontinued operations were $39.5 million and $89.6 million for the three and six months ended July 3, 2026, respectively, compared to $51.1 million and $99.3 million for the prior year periods. The decreases in net sales during the current periods were primarily due to a shorter reporting period, as the sale of the Video business was completed on June 16, 2026, compared to a full quarter in 2025. The losses from discontinued operations, net of tax, for the three and six months ended July 3, 2026, respectively, was primarily attributable to the loss on disposal of the business, advisory fees and employee compensation costs related to the disposition of our Video business incurred in the current periods.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Appliance and integration net revenue increased by $44.4 million for the three months ended July 3, 2026, compared to the corresponding period in 2025, primarily driven by a $40.3 million increase from customers ramping up due to new deployments in the Americas.