Harmonic Inc.

Welcome to the third quarter 2024 Harmonic Earnings Conference call. My name is Josh, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please note that this conference is being recorded. I will now turn the call over to David Hanover. Investor Relations. David, you may begin.

Thank you, Operator. Hello, everyone, and thank you for joining us today for Harmonix's third quarter 2024 financial results conference call. With me today are Nimrod Ben-Natan, President and CEO, and Walter Jankovic, Chief Financial Officer. Before we begin, I'd like to point out that in addition to the audio portion of the webcast, we've also provided slides for this webcast, which you may view by going to our webcast on our Investor Relations website. Now turning to slide two. During this call, we will provide projections and other forward-looking statements regarding future events or future financial performance of the company. Such statements are only current expectations, and actual events or results may differ materially. We refer you to documents harmonically filed with the SEC, including our most recent 10-Q and 10-K reports and the forward-looking statements section of today's preliminary results press release. These documents identify important risk factors which can cause actual results to differ materially from those contained in our projections or forward-looking statements. And please note that unless otherwise indicated, the financial metrics we provide you on this call are determined on a non-GAAP basis. These metrics, together with corresponding GAAP numbers and a reconciliation to GAAP, are contained in today's press release, which we have posted on our website and filed with the SEC on Form 8-K. We will also discuss historical, financial, and other statistical information regarding our business and operation, and some of this information is included in the press release. The remainder of the information will be available on a recorded version of this call or on our website. And now I'll turn the call over to our CEO, Nimrod Ben-Matan. Nimrod?

Thanks, David, and welcome everyone to our third quarter earnings call. Turning to slide three. Today we reported record Q3 results that demonstrated our team's strong execution of our business plans. These included record total revenue and adjusted EBITDA, as well as broadband and video segment revenues, which exceeded our guidance. Our broadband market leadership and product differentiation are stronger than ever, especially with the recent announcement of Unified DOCSIS 4.0 technology, reinforcing and expanding our competitive position. I will expand shortly on Unified. We have successfully returned the video business to profitability through right sizing and actions and revenue execution. And we are focused on advancing our pipeline of new tier one SAS streaming and larger scale appliance opportunities. Finally, based on our considerable progress today, we are reaffirming our full year broadband 2024 revenue guidance and raising our EBITDA guidance for this business. In video, we are also reaffirming our 2024 EBITDA guidance. Walter will discuss this guidance in more detail. Turning to slide number four, to our broadband segment. We had strong quarter as we executed effectively on our key initiatives. Segment revenue came in at $145.3 million, representing year-over-year and sequential increases of 92% and 56% respectively. both exceeding our original expectations. The number of global customers deploying our COS solution reached 121, an increase of 16% year over year. This growth represents over 32 million DOCSIS cable modems in operation globally, which is approximately 18% of the global market. We continue to expand and diversify our customer base in Q3, securing business with seven new customers. This highlights the increasing demand for modernized cable network solutions and reflects our focus on continued market share growth. Our pipeline of qualified new customer engagements continues to expand, and we expect this positive momentum to build going forward. The broader availability of unified technology to all cable broadband operators is key driver of our accelerated customer acquisition and diversification success. Additionally, we were pleased to see the recent announcement from Comcast and Rogers, where Rogers will deploy Comcast access solution based on our COS virtual CMTS. We anticipate this deployment will begin to ramp up in the second half of 2025 and can be an important contributor to our multi-year growth opportunity. Switching over to fiber, we continue to gain momentum with our fiber to the home strategy. In Q3, we closed a record number of fiber deals with existing and new customers for both hybrid and pure fiber deals. Also, since our last earnings call, Harmonic has partnered with Tribal Ready, a company dedicated to empowering native communities to bring high-speed fiber broadband connectivity to tribes nationwide in the U.S. This collaboration aims to bridge the digital divide for underserved tribal communities by leveraging our COS platform and high density OLT solutions. We also continue to gain traction with our OpenONU strategy, which disrupts traditional vendor-locked fiber ecosystems and make fiber more affordable for more operators. In addition to several successful customer interoperability on-site demonstrations, we are collaborating with half a dozen third-party optical network unit vendors to qualify devices. These ONU partners are helping us drive stronger value proposition that is resonating with a growing number of fiber customers. Also, to provide a brief update on our activities related to bead, we have aligned with our U.S. customers pursuing bead funding and have put plans in place to provide BABA remote OLT product deliveries in 2025 according to the requirements. Turning now to DOCSIS 4.0, our market leadership and execution momentum remains strong, with successful full-duplex node shipments and deployments continuing at a steady pace, a trend which has continued into the fourth quarter. Following the important joint announcement by Broadcom, Comcast, and Charter at the recent SET Tech Expo, Unified DOCSIS 4.0 technology is no longer limited to a small group of operators, but is now open to all cable broadband providers, a significant positive catalyst for the industry and for our business. Making Unified DOCSIS 4.0 available for all operators is a significant advantage for Harmonic, leveraging our uniquely flexible COS core and our successful scale deployments of full duplex nodes. Our early experience with unified technology enhances our leadership position. This combination of specification flexibility and harmonics capabilities enables operators of all sizes and strategic approaches to confidently plan upgrades to their DOCSIS networks, boosting speeds and increasing reliability with either full duplex or extended spectrum options, both supported with unified. Since the announcement of Unified for all just weeks ago, we've already received more than a dozen new requests to evaluate the technology and discuss deployment strategies. While Unified represents a critical inflection point supporting the mid to long term cable opportunity for Harmonic that we discussed during our recent analyst day, there will be short term challenges as customers and prospects around the world now plan their technology transition strategies. Specifically, as we begin to look ahead to 2025, we see both significant new market movement and share gain opportunities, as well as new deployment timing challenges due to ecosystem integration requirements and new unified RF front-end development. Walter will expand on this in his prepared remarks. We are also excited about SERCOM's recent announcement of unified smart amplifiers, which are expected to enhance the overall unified ecosystem and accelerate time to market. In summary, our broadband business demonstrated our ability to scale rapidly to serve customer demand as we executed to the 2024 plan that we presented early this year. We continue to gain market share as we further expanded our technology leadership, positioning ourselves for sustained growth and competitive advantage. Turning to slide number five to our video segment, total segment revenue for Q3 was $50.4 million compared to $51.4 million a year ago. Sequentially, Segment revenue was up 10% and exceeded the high end of our guidance. This included SAS streaming revenue of $14.2 million, which was up 13.1% year over year. Driven by strong execution of our right-sizing actions, the video segment returned to profitability with greater than 10% adjusted EBITDA margins. In Q3, we secured a refreshed project with a Tier 1 service provider using our latest XOS media processor, achieving significant space and power saving while improving video quality. Data center efficiencies were a key factor in the decision. We see growing pipeline of similar opportunities as demand for power space and cooling optimization continues. with the new XOS platform consistently delivering these benefits for service providers. In our SaaS streaming business, we continue to grow the pipeline of Tier 1 opportunities while expanding relationships with our largest existing customers through increased capacity and new services, such as our SilverSide ad insertion solution. These opportunities will contribute to our revenue growth in 2025 and beyond. We've also successfully tried our new in-stream advertisement solution during live sports event, enabling us to offer this value-add service to our customers and increase their monetization. This aligns with our 2024 IBC presentation in Amsterdam, where we showcased AI-based solutions for automating live sports production and monetization. ideal for lower-tier events, and these tools enable premium broadcast with automated highlights, live captions, multiple languages, and ad insertion without costly labor. With that, now over to you, Walter, for a deeper discussion of our financial results and outlook.