Harmonic Inc. (NASDAQ:HLIT) Q2 2017 Earnings Conference Call - Final Transcript
Jul 31, 2017 • 05:00 pm ET
Welcome to the Q2 2017 Harmonic Earnings Conference Call. My name is Candace, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.
I'll now turn the call over to Blair King, Harmonic's Director of Investor Relations. Blair King, you may begin.
Thank you, Candace. Hello everyone, and thank you for joining us today for Harmonic's second quarter 2017 earnings conference call.
Again, my name is Blair King. With me at our headquarters in San Jose, California are Patrick Harshman, our CEO; and Sanjay Kalra, our new CFO.
Before we begin, I'd like to point out that in addition to the audio portion of this call, we've also provided slides for the webcast, which you can see by going to the Investor Relations Page on harmonicinc.com. Turning to Slide 2, during this call, we will be providing projections and other forward-looking statements regarding future events or the future financial performance of the company.
We caution you that such statements are only current expectations, and actual events or results may differ materially. We refer you to documents that Harmonic files with the SEC, including our most recent 10-Q, and 10-K reports, and the forward-looking statement section in today's preliminary results press release. These documents identify important risk factors, that could cause actual results to differ materially from those contained in our projections or our forward-looking statements.
Please note that unless otherwise indicated, the financial metrics we provide you on this call are determined on a non-GAAP basis. These items, together with corresponding GAAP numbers and a reconciliation to GAAP, are contained in today's press release, which we posted to 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 operations. Some of this information is included in the press release, and the remainder of the information will be available on a recorded version of this call on our website.
So with that, I'll turn the call to our CEO, Patrick Harshman. Patrick?
Well, thanks Blair.
Let's get started by turning to our Slide 3.
Second quarter revenue was $82 million, down 1% sequentially. Comprising this total, video segment revenue was down just over a percent sequentially, as we saw stronger than expected transition to software as a service. Cable Edge segment revenue was roughly flat with the prior quarter, as this part of our business continues to transition to our new CableOS system.
Combined bookings were $91 million, up 11% sequentially, led by double-digit rebound in our video segment driven in turn by a heavier mix of new over-the-top recurring revenue orders, which grew 90% sequentially to 8% of total company bookings. Correspondingly backlog and deferred revenue grew to $195 million, a record for the company.
Associated gross margin dip to 48% due to both video mix, and CableOS transition factors, will be discussed