Abstract
Harmonic will report its quarterly results on May 11, 2026 Post Market; this preview synthesizes recent trends in revenue, margins, earnings power, and the balance of institutional views to frame expectations and the likely drivers of the print.
Market Forecast
Consensus and company projections suggest this quarter’s revenue of 102.21 million US dollars, implying a year-over-year decrease of 20.11%, with EBIT expected at 17.86 million US dollars (up 89.12% YoY) and EPS at 0.12 (up 122.57% YoY). Forecast margin detail is limited; the company is projected to recover profitability despite lower sales, indicating operating leverage from cost controls and a higher mix of software.
The company’s main business remains integrated systems and solutions, complemented by software operations and services. The most promising area is software operations and services, which delivered 57.74 million US dollars in revenue last quarter and is positioned for faster growth versus hardware-weighted segments.
Last Quarter Review
In the previous quarter, Harmonic posted revenue of 98.24 million US dollars (down 55.78% YoY), a gross profit margin of 47.01%, GAAP net loss attributable to shareholders of 54.82 million US dollars, a net profit margin of -55.80%, and adjusted EPS of 0.14 (down 68.89% YoY). Quarter-on-quarter change in net income was -2,134.71%, reflecting a swing to a significant loss amid revenue pressure and a delayed demand cycle.
A key highlight was the resilience of gross margin at 47.01%, suggesting mix and cost actions partially offset volume declines. Main business revenue included 302.79 million US dollars from integrated equipment and integration and 57.74 million US dollars from software operations and services; software’s proportion underscores the strategic pivot toward recurring revenue.
Current Quarter Outlook
Main business trajectory and revenue quality
Integrated systems and solutions remain the largest revenue contributor, historically driven by access and video infrastructure deployments. With revenue forecast to decline year over year this quarter, sales timing and project-based lumpiness continue to affect reported growth. The stabilization of gross margin in the last quarter provides a buffer; if management sustains a near-47% gross margin, the earnings algorithm can still improve on lower volume. Investors will watch whether order patterns from large broadband and media customers show signs of normalization, which would set the foundation for a return to revenue growth in the second half.
Software operations and services momentum
Software operations and services constitute the strategic growth vector, supported by ongoing migration from hardware-centric solutions to software-defined and cloud-delivered platforms. Despite the revenue reset last quarter, the segment’s contribution of 57.74 million US dollars highlights a meaningful base of recurring and service revenue that can underpin margin stability. If the forecasted EPS and EBIT expansion materialize alongside a 20.11% revenue decline, mix shift toward software and disciplined operating expense control are likely the catalysts. The durability of subscription renewals and expansion deals will be central to sustaining EPS above the 0.10 threshold into the next quarter.
Factors most likely to move the stock this quarter
Earnings sensitivity is elevated to the revenue mix and conversion of backlog as project deployments ramp or slip. A stronger-than-expected contribution from software and services would support the forecasted margin and EPS rebound, while any renewed delays in customer projects could put the revenue outlook at risk. Management’s qualitative commentary on demand cadence, visibility into second-half bookings, and the trajectory of operating expenses will likely dictate the post-print reaction.
Analyst Opinions
Recent institutional commentary has leaned neutral to cautious, emphasizing the gap between revenue headwinds and anticipated earnings recovery as cost measures take hold. Analysts highlight that a double-digit year-over-year decline in sales remains a near-term challenge, but improving EBIT and EPS forecasts point to better operating discipline. The balance of views suggests investors should focus on execution within software and services and signs of order normalization, with the majority expecting a gradual improvement path rather than an abrupt inflection this quarter.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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