Key Highlights

  • Sales from ongoing operations reached $148.8 million, 64% higher than the $90.5 million of a year ago.
  • Adjusted per-share profit hit $0.23 versus $0.07, and the GAAP figure was $0.16.
  • The Rest-of-Market category more than doubled its sales, representing 46% of the total.
  • Backlog and deferred Revenue totaled $534.0 million, which is 58% above $338.0 million.
  • The 2026 revenue forecast moved up to between $545 million and $555 million, from $505 million and $525 million.

Sales Clear the Top of Guidance by a Wide Margin, Reaching $148.8 Million

Harmonic (NASDAQ:HLIT) reported on Nov 2, 2026 for the quarter ended Oct 2, 2026. Revenue from continuing operations hit $148.8 million, versus $90.5 million twelve months back, and 11% above the $133.5 million of Q2 (calculated). Its prior projection had been $125 million to $135 million.

Operating income under GAAP came to $26.2 million, against $4.0 million, and the non-GAAP operating figure rose to $33.0 million from $10.1 million. GAAP Earnings Per Share landed at $0.16 after a breakeven result, while non-GAAP EPS came in at $0.23, exceeding the band of $0.15 to $0.19 that had been guided and up from $0.07.

Harmonic supplies virtualized broadband technology to cable and telecom operators through its cOS platform, which works for DOCSIS and fiber networks. The video Business was sold in June 2026, and the company now reports one broadband segment.

Smaller Customers Drive a 101% Surge and Reach 46% of Sales

Rest-of-Market revenue, which captures everything outside the two biggest customers, rose 101% on the year and climbed 39% sequentially. Management described the strength as broad, with several accounts ramping deployments alongside a seasonal increase in outside plant services. The segment also accounted for more than 60% of bookings.

Concentration remains elevated: four customers each represented over 10% of revenue, and the leading pair made up 54% together. Nine new customers were added across seven countries during the quarter, three of them regional tier 1 operators. Across 167 customers, cOS is now running on 52.6 million devices.

Non-GAAP gross Margin landed at 52.1%, just above the high end of guidance, despite under $3 million of memory costs that could not be recovered. Operating expenses of $44.5 million overshot guidance because of incentive accruals and Acquisition earnouts.

Cash Flow Dips Below Zero as Inventory Buildup and Receivables Absorb Funds

Free Cash Flow came in at negative $5.1 million, as a $28.3 million rise in inventory, which covered memory bought for Supply security, and higher receivables absorbed cash. Receivables days rose to 71 from 61, and inventory days climbed to 120 versus 95 before.

Cash ended at $142.8 million on Oct 2, 2026. Q2's closing balance had been $231.9 million, and a $75 million revolver paydown left $160 million accessible. Book-to-bill stood at 0.7 with bookings of $105.9 million, versus $97.4 million a year earlier.

Backlog plus deferred revenue dropped to $534.0 million, compared with $587.6 million at the end of Q2, which reflects seasonal bookings softness. Roughly 72% is slated to be recognized as revenue within twelve months.

A Higher Full-Year Revenue Range and a Q4 Forecast Close Out the Picture

The 2026 revenue target now sits between $545 million and $555 million, moving up from $505 million to $525 million. Projected per-share figures are $0.80 to $0.84 on a non-GAAP basis and $0.54 to $0.57 under GAAP. For the final quarter of 2026, revenue is anticipated in a range from $141 million up to $151 million, and the non-GAAP per-share band is $0.19 through $0.23. The last true-ups from the video divestiture should land in Q1 2027.