A technology company that makes software and hardware letting cable and internet providers deliver multi-gigabit connections to homes. Its cOS platform runs DOCSIS and fiber-to-the-home networks, used by broadband operators. Long known for video-delivery equipment, Harmonic agreed to sell that Video business to concentrate on broadband networking.
Harmonic's revenue rose 54% to $133.5M in Q2 FY2026, driven by new Americas deployments, as the Video sale closed.
Harmonic is now a Broadband-only company. rose 54% to $133.5 million and widened 6.6 points to 52.4%, driven by new Americas deployments, while the Video business sale closed on June 16, 2026 for $137.9 million in proceeds. The company's future now rests entirely on Broadband, with two customers accounting for roughly 63% of revenue.
Key takeaways
The Video business sale to Leone Media Inc. closed on June 16, 2026, with $137.9 million in proceeds, leaving Harmonic entirely dependent on its Broadband .
rose 54% to $133.5 million, driven by a $40.3 million increase from new Americas deployments and $10.3 million from outside plant services.
widened 6.6 points to 52.4%, which the company attributed to a favorable product mix from a higher percentage of new North America deployments.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue rose 54% to $133.5M, driven by new Americas deployments, with gross margin up 660 bps to 52.4%.
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Total net rose 54% to $133.5M in Q2 FY2026 and 49% to $255.2M for the first half, led by Appliance and integration revenue up 61% and 53%, respectively.
Appliance and integration growth was driven primarily by new deployments in the Americas, including a $40.3M Q2 increase and a $71.7M six-month increase, with $10.3M from outside plant services.
swung to $23.6 million from a $0.8 million loss a year ago, as the increase more than covered an 18% rise in R&D and a 20% rise in SG&A.
Customer concentration intensified: the top 10 customers represented 89% of Q2 net , with two customers at roughly 45% and 18%.
fell to a $58.0 million outflow in the quarter, which the company said was largely because of elevated collections in the prior-year period.
What changed
The Video business sale, flagged in the FY2025 10-K as expected to close in H1 2026, closed on June 16, 2026 with $137.9 million in proceeds, below the $145 million agreed price.
Broadband returned to growth after the Q4 2025 trough of $46.3 million, rising to $133.5 million in Q2 2026, up from $121.7 million in Q1 2026.
Customer concentration, flagged as a watch item since FY2022, rose to 89% for the top 10 customers in Q2 2026, up from 84% in FY2025 and 58% for two customers in Q1 2026.
recovered to 52.4% from 52.3% in Q1 2026, after the prior quarter's decline was attributed to an unfavorable mix of outside plant services.
Cash and equivalents rose 87% to $231.9 million, reflecting the Video sale proceeds, while declined 2.7% to $107.7 million.
What to watch
Whether Broadband sustains the Q2 2026 recovery or reverts toward the Q4 2025 trough, given the $573.8 million and balance.
Whether the two-customer concentration level of roughly 63% moderates or continues to rise as DOCSIS 4.0 deployments scale.
Whether holds at 52.4% as the mix of outside plant services normalizes, or whether the lower-margin mix persists.
The impact of U.S. tariffs on Malaysian imports, where primary contract manufacturer Plexus operates, on Broadband hardware costs and .
SaaS and service increased 15% to $16.4M in Q2 and 24% to $34.4M for the six months, mainly on higher support services.
improved 660 to 52.4% in Q2 and 210 bps to 52.3% for the six months, driven by favorable product mix from a higher percentage of new North America deployments.
R&D and SG&A expenses rose 18% and 20% in Q2, respectively, on higher incentive compensation and investment to support business growth, with from the Video divestiture included in continuing operations.
Liquidity remained strong with $231.9M in cash and equivalents and $84.7M available under the ; the Video business sale closed June 16, 2026 with $137.9M in proceeds.
fell $45.6M to $26.3M for the six months, mainly due to elevated collections in the prior-year period tied to strong fiscal 2024 Q4 .
Quantitative and Qualitative Disclosures About Market Risk
Market risk represents the risk of loss that may impact our operating results, financial position or liquidity due to adverse changes in market prices and rates. We are exposed to market risk because of changes in interest rates, foreign currency exchange rates, when other curre…
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Market risk represents the risk of loss that may impact our operating results, financial position or liquidity due to adverse changes in market prices and rates. We are exposed to market risk because of changes in interest rates, foreign currency exchange rates, when other currencies held by our subsidiaries are measured against the U.S. dollar, and to changes in the value of financial instruments held by us.
For quantitative and qualitative disclosures about foreign currency exchange risk and interest rate risk affecting the Company, see Item 7A “Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the SEC on February 24, 2026. Our exposure related to foreign currency exchange risk and interest rate risk has not changed materially since December 31, 2025.
Company reports no material pending legal proceedings, only ordinary-course litigation with unestimable potential losses.
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The Company is involved in ordinary-course lawsuits, claims, threatened litigation, and investigations, including alleged patent and IP infringement, commercial, and employment matters.
Some matters specify damages claimed, but the Company states those claims may not represent reasonably possible losses.
The Company cannot predict the ultimate outcome of these matters or reasonably estimate the amount or range of possible loss.
An unfavorable outcome could require substantial damages, ongoing royalty payments, or prevent the sale of certain products.
The Company notes its industry has frequent patent and IP claims, with third parties asserting rights against the Company or its customers in the normal course of operations.
The Company refers to Note 12 of the condensed consolidated financial statements for details on legal proceedings.
Post-Video sale, the company is now solely dependent on its Broadband business amid heavy customer concentration and supply-chain, geopolitical, and tariff risks.
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The June 16, 2026 sale of the Video business to Leone Media Inc. leaves the company entirely dependent on Broadband, which generated about 63% of fiscal 2025 , and creates transition and integration risks.
Customer concentration is severe: top 10 customers were 89% of Q2 2026 net , with two customers at roughly 45% and 18%, and a drop in large transactions could materially hurt quarterly results.
The company relies on sole or limited suppliers and contract manufacturers, primarily Plexus in Malaysia, exposing it to U.S. tariff actions, Taiwan-related geopolitical risk, and AI-driven component shortages.
Geopolitical exposure is material: 36% of the workforce is in Israel, including the CEO, and outsourced engineering in Ukraine through GlobalLogic could be disrupted by the Russia-Ukraine conflict.
The cOS software-based broadband access initiative carries technology transition risk, including long sales cycles and the threat that competitors' architectures could render cOS obsolete.
Debt and liquidity constraints include a $160 million revolving facility and $40 million term facility, with $84.7 million remaining available as of July 3, 2026, plus $61.1 million of at risk.