A Closer Look At The Earnings of Harmonic Inc. (HLIT)

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Harmonic Inc. (NASDAQ: HLIT) is an American company that develops hardware and software to access modern Internet services. The company’s strong report led to its stock price rising 23% to $10.63 in trading on August 3.


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During the second quarter of 2021, Harmonic Inc. (HLIT)’s revenue increased by 53% over the year-ago period. Growth was primarily driven by an increase in demand in the cable TV service operator segment. The company’s revenues grew 89% to $50.1 million in this segment.  While Wall Street analysts expected HLIT to break even this quarter, a GAAP loss of $2 million was recorded.

Loss is the main issue for HLIT stock. Since 2013, the company has not made a profit, yet its debt is close to $200 million.

Harmonic continues to benefit from the growth of streaming TV and other video services. By selling equipment and software, the company allows customers to transmit video content and access services via a cloud or cable. Harmonic Inc. (HLIT) solutions are in demand by large companies, but the industry is experiencing more competition and content providers are developing their own ecosystems.

A major strength of Harmonic Inc. (HLIT) is its own distributed access architecture and virtualized cable access to video services, which are deployed across the globe. Harmonic, specifically, develops and manufactures specialized hardware, including CableOS modems, which enable video service provider infrastructure to be deployed in data centers. Harmonic’s suite of technologies may attract major players, and the company may become a potential acquisition target.

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