Start of the Day with Chris Forte – HLIT

Posted on August 2, 2022 by Scott Shuda

The Small Cap Technology Grand Slam: Four winners on the way up, SILC, HLIT, BELFB, and RELL – Part 2

Well that didn’t take long. Before we could get to our second tech slammer it stepped up to the plate and hit one into the bleachers.

Harmonic (HLIT, $10.85, market cap $1.1B) reported Q2 after the close and shareholders met it at home plate for a round of high fives and fanny pats. (Suggestion: Don’t do that at work. No not the high fives, the other part.)

HLIT makes cutting edge gadgetry that makes content appear on your TV. Their products and software is proving to be head and shoulders above the competition.  Listen to Rob Spivey of Valens Research discussing HLIT on a Breakout Investor Podcast.

HLIT is covered by Breakout Investor Steve Kraus and was featured here in Thoughts on July 6th. Here’s some reasons to be excited about HLIT other than they help you watch Better Call Saul in your living room. These are the company’s words . . .

“The distributed architectures we invented have become A DE FACTO INDUSTRY STANDARD.

“Harmonic delivered ANOTHER RECORD QUARTER, with 39% year over year revenue growth and over 15% adjusted EBITDA margin. Our Cable Access business grew 62% and our Video SaaS revenue grew 69% year over year, highlighting STRONG DEMAND AND POWERFUL COMPETITIVE DIFFERENTIATION. We ended the second quarter with backlog and deferred revenue near RECORD LEVELS, providing good visibility as we enter the second half of 2022. 

“These results reflect both a HEALTHY MARKET AND OUR STRONG MOMENTUM. Current cable customers are global market leaders and they are LEANED INTO advancing their broadband networks to new multi-gigabit offerings, better analytics and more flexible operations; all areas where Harmonic solution continues to be WAY OUT IN FRONT.

“We now forecast that 2024 top line revenue, EBITDA dollars and EBITDA percentage will be ahead of plan

“Considering our strong first half SaaS results and a ROBUST SALES PIPELINE, we continue to expect our streaming SaaS revenue WILL GROW OVER 50% in 2022. Looking further ahead, we remain confident that our transformation in video to streaming SaaS is working, and then we remain on track to achieve the 2024 streaming SaaS targets

“During the second quarter Harmonic REPURCHASED 324,000 shares at an average price of $8.86 per share or $2.9 million. Year-to-date, we have bought back 557,000 shares of stock for an aggregate purchase price of approximately $5 million.

Given the current macroeconomic environment we expect to continue repurchasing shares

* EPS: GAAP net income per share of $0.14 and non-GAAP net income per share of $0.16, compared to GAAP net loss per share of $0.02 and non-GAAP net income per share of $0.05 in the year ago period
* Cash: $121.8 million, up $6.6 million year over year

Get on the Feed and read commentary from our excellent contributors Steve Kraus and Paul Rieutort. But go easy on the fanny pats.
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QUICKIES
*”Recession Lite seems like an apt descriptor for today’s economy, because a lot of the ingredients of a true, painful recession are missing.” –
Calafia Beach Pundit
*
Cathie Wood says we have already bottomed. “We are turning the corner.”
*Heads up:
Perma-Fix Environmental (PESI), a favorite of Breakout Investor Aaron Warwick, reports Friday morning.
*
QIPT Home Medical (QIPT) had an interesting day, spiking to a high of $5.94 and then ended the day up 2% at $5.49.
*
Assertio (ASRT) the small pharm player hit a new 52 week high on Friday of $4.14 but settled back yesterday at $3.78
*
BWLKF closed up 10% and AEHR gained 8.5% yesterday.

“If a woman has to choose between catching a fly ball and saving an infant’s life, she will choose to save the infant’s life without even considering if there is a man on base.” — DAVE BARRY

Good luck to all – Chris

 Join us on the Breakout Investor Platform (BIP) to discuss HLIT, QIPT and other great little companies where our community shares research and analysis.  We seek to be Ahead of the Curve in identifying and owning great companies with catalysts that could make them the next Breakout Investment. Membership and most of the content on BIP is free.

Download the Breakout Investors app to join the conversation.

 
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