Harmonic Inc.

Welcome to the fourth quarter and full year 2025 Harmonic Earnings Conference call. My name is Michelle, and I'll be your operator for today's call. All participants will be in 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 touchtone phone. Please note that this conference is being recorded. I'll 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 Harmonic's fourth quarter and full year 2025 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, harmonic files of the SEC, including our most recent 10Q and 10K reports in 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-Natan. Nimrod.

Thanks, David. And welcome, everyone, to our fourth quarter and full year 2025 earnings call. We delivered a strong fourth quarter reflecting accelerating momentum across our broadband business. This is our first earnings call following the announcement of the pending sale of our video business to Mediakind. This is a decisive step that will push our growth strategy forward and transform us into what I call the new harmonic, a pure play broadband leader. This transaction will simplify our operating model and align all of our resources to unlock growth opportunities in the expanding broadband infrastructure market. With the video sale expected to close in the second quarter of 2026, All financial and operating results I discussed today reflect our continuing operations, meaning our core broadband business. Turning to slide four, broadband revenue for the quarter was $98.2 million, representing 9% sequential growth and coming in above the high end of guidance. In addition, we delivered record quarterly bookings of $346.9 million, driving a 3.5 book-to-bill ratio. These bookings were fueled by several multi-year contracts, reinforcing both revenue resiliency and long-term customer commitment to our platform, alongside record diversified rest-of-world bookings that will support growth in 2026 and beyond. All of this drove backlog and deferred revenue to $573.8 million at year end, up 73% year over year. The current portion of this alone was $307 million, more than double last year's level, giving us strong visibility and confidence as we enter 2026. In addition to our core broadband business, our video business, now classified as discontinued operations, exceeded our expectations in the fourth quarter both in terms of revenue and profitability. The planned sale of this business to Mediakind for approximately $145 million in cash remains on track. In addition to the strategic benefits, this transaction further enhances our balance sheet and supports a disciplined capital allocation framework focused on investing in growth, maintaining financial flexibility, and building long-term shareholder value. A defining theme of 2025 and one that accelerated meaningfully in the fourth quarter is the diversification and expansion of our customer base beyond our two largest North American accounts. Rest of world revenue, which excludes revenue from these two large customers, grew 33% year over year in the fourth quarter. This now represents 41% of total broadband revenue, a meaningful shift in our revenue mix, underscoring the continuing momentum of our diversification initiatives. We delivered record rest of world bookings in the fourth quarter, reflecting growing adoption of our platform globally and increasing confidence from operators investing in multi-year network modernization. For example, together with Norman Engineering, our longest standing partner in Europe, we recently marked 20 successful DOCSIS and fiber deployments across the region, including with operators in Austria and Germany. We also announced that Telia, the second largest telecom operator in Norway, is modernizing its broadband network using our virtualized COS platform in a distributed access architecture. What is very important here is that we are not just seeing one-off wins. Rather, these recent deployments are the result of expanding platform relationships. Customers typically start with an initial deployment, such as DOCSIS, And as they standardize on our platform and services, they grow their footprint and expand across our portfolio, adding fiber and our intelligence-driven cloud capabilities. Our fiber business continues to scale rapidly and is an increasingly important growth driver, with strong revenue growth in the fourth quarter and for the full year. We are seeing growing fiber winds with both telco and cable operators in North America and internationally. A major highlight is our expanding collaboration with EZ, the largest MSO in Mexico. EZ has selected our COS platform and remote OLT solutions to power a strategic fiber broadband expansion across its network. This multi-year deployment leverages our open ONT strategy lowering EZ's total cost of ownership while accelerating their fiber rollouts. It is a strong example of how our platform simplifies large-scale fiber transitions. Enabling our fiber market momentum are several new fiber product innovations. We recently introduced a new pluggable combo OLT option, which is particularly attractive for operators executing surgical footprint expansions and serving rural markets in a highly cost-effective way. What is particularly compelling and a key differentiator for Harmonic is how fiber and DOCSIS converge within our cloud-native architecture, allowing operators to efficiently manage both technologies through a unified platform, simplifying operations and lowering total cost of ownership across their entire access networks. Our unified DOCSIS 4.0 strategy continues to gain traction as the ecosystem matures and operators' confidence builds. Major operators are advancing DOCSIS 4.0 roadmaps and reporting tangible operating benefits from network upgrades, including fewer service calls and faster repair times. We successfully completed a DOCSIS 4.0 field validation with Vodafone Germany, further reinforcing the maturity of the technology and our leadership in this space. Unified DOCSIS 4.0 node shipments are now ramping with initial deliveries this quarter. we are transitioning from field trials and early deployments to scale commercial deployments, marking an important inflection point for this cycle. Looking ahead, operators are increasingly seeking platforms that help them anticipate issues, optimize performance, and reduce operational friction, ultimately lowering operating expenses and improving competitiveness. This creates an extraordinary opportunity for Harmonic to leverage the unique data available through our virtualized cloud platform and provide innovative new intelligence-driven operational solutions. Following the successful introduction of Beacon and Pathfinder, which help customers maximize the speed performance of their networks while minimizing truck rolls, we have introduced new subscriber experience detection capabilities that can identify and mitigate network issues before they generate support calls, directly helping operators reduce churn and lower operating costs. Over time, we expect continued development of this intelligence layer to increase recurring revenue, deepen customer integration, improve margins, and expand our addressable market into AI-enabled operations beyond access infrastructure. Turning to slide five, network investment is no longer just about speed. It is about measurable business outcomes. A large North American operator recently highlighted significant reductions in service calls and faster mean time to repair in areas where next generation DOCSIS 4.0 technology has been deployed. These improvements translate directly into lower operating costs and higher subscriber satisfaction. When operators invest in network quality, their returns show up in reduced churn, stronger loyalty, and improved competitive position. Our own commitment to customer success is reflected in our world-class net promoter score of 82, as measured at the end of 2025, underscoring the trust operators place in our platform and our team. Customer success is the foundation of our growth model. Moving to slide six, Harmonic wins because we enable operators to scale bandwidth faster, more cost effectively, and with improved subscriber satisfaction. Our differentiation is built on technology leadership, speed of execution, improving customer network reliability, and solutions that drive lower total cost of ownership. We now have 146 COS deployments in production, serving more than 41 million cable modems and ONUs worldwide. At this scale, the gap between Harmonic and the rest of the market is no longer incremental. It is structural. Our platform brings a decade of production maturity, proven operational consistency, and unmatched scale in virtualized broadband. and a wealth of real-time network data that is now beginning to be exploited. This is why leading cable and now telco operators are standardizing on Harmonic as they modernize their networks, and why we believe there are so many compelling growth opportunities still in front of us. Moving to slide seven, the broader market opportunity ahead of us is substantial. According to Deloro, the cable serviceable addressable market is expected to grow from approximately $510 million in 2025 to over 1.1 billion by 2030. What's driving this is that across the industry, broadband operators are accelerating network modernization as data consumption continues to rise at a rapid pace. AI-powered applications, immersive content experiences, and multi-gigabit services are driving sustained bandwidth growth and placing increasing performance demands on broadband networks. This investment cycle is not driven by speed alone. operators are increasingly focused on quality of experience, churn reduction, and operating efficiency. Network capability has become a direct driver of customer satisfaction, application adoption, and long-term competitiveness. Our share positions remain strong in virtual CMTS, RPDs, and remote OLTs with meaningful room to expand. In fiber, the addressable market exceeds $2.6 billion and represents a significant opportunity where our share is growing. Importantly, these market figures exclude the AI operation and tools market, which represents an additional growth vector we have begun to actively target. Turning to slide eight, Our long-term strategy centers on four priorities. First, expanding our market leadership in DOCSIS through continued innovation in COS, remote devices, outdoor nodes, and recurring services, while accelerating our fiber position with both cable and telco operators globally. Our objective is not simply participation, but category leadership across access architectures. driven by continued investment in innovation and differentiated capabilities. Second, increasing customer diversification. We are targeting sustained rest of world growth of 30% or more annually, expanding beyond our largest North American customers and building a broader, more balanced global revenue base. Third, driving software and cloud differentiation. our cloud-native architecture and intelligent automation capabilities create opportunities to expand recurring revenue, deepen platform integration, and build long-term customer relationships. And fourth, maintaining operational and cost discipline. As a pure-play broadband company, we are simplifying our cost structure and positioning the business to generate meaningful operating leverage as revenue scales. Together, These priorities are designed to expand our addressable market, increase revenue durability, and improve our long-term margin profile. Moving to slide nine, as we enter 2026, Harmonic is well-positioned as a focused, pure-play broadband innovator, providing market-leading DOCSIS and fiber-to-the-home solutions, augmented by an intelligence-driven software layer for automation and subscriber experience to operators worldwide. With the sale of our video business, we are transitioning to a company fully dedicated to the growing broadband market. This sharpens our strategic focus, simplifies our operating model to a single go-to-market motion and product roadmap, and improves our ability to generate long-term operating leverage as we scale. The transaction also provides us with a significant capital infusion with a stronger balance sheet and incremental cash. We are positioned to invest in organic innovation, expand into adjacent broadband opportunities, and pursue disciplined inorganic expansion where it accelerates diversification and market leadership. We believe this combination, leadership in DOCSIS, expanding presence in fiber, and a growing intelligence-driven software capability positions Harmonic for accelerated growth and improved long-term operating margins. With that, I will turn the call over to Walter to walk through our financials in more detail.