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Node Shipments for DAA Boost Harmonic’s Q3 Cable Access Revenue

October 30, 2018 By Bevin Fletcher

Harmonic on Monday reported a significant jump in cable access segment revenues during the third quarter, boosted by increased shipments of its CableOS nodes for distributed access architectures.

Cable access revenues for the period were $28.1 million, up 153 percent year over year and 39 percent sequentially. On Monday’s third-quarter earnings call, Harmonic CEO Patrick Harshman said there are more than 25 commercial deployments and field trials ongoing with the company’s virtualized cable access offering.

Last week, Buckeye Broadband, a cable provider in Northwest Ohio, announced it’s leveraging Harmonic’s CableOS product to deploy DOCSIS 3.1-powered broadband with speeds of up to 1 Gbps.  

Harshman cited Buckeye during the call, saying that in addition to gigabit speeds, the offering enabled significant operational efficiencies through the consolidation of approximately 15 former Cable Modem Termination System (CMTS) to a single CMTS operational center.

Harmonic’s CableOS is now actively delivering broadband to more than 480,000 live cable modems served globally.

Specifically, shipments of Remote PHY nodes for DAA were up 174 percent sequentially, and contributed “materially” to Harmonic’s record third-quarter CableOS revenue.

Harshman said the nodes are in the process of being deployed in the field by customers, and once they’re installed will be followed by companion CableOS software license sales.

DAA has garnered significant buzz in cable industry and Harshman said that coming out of the Cable-Tec Expo in Atlanta last week, “there’s no question that DAA is going to become a major part of cable’s future.”

Still, he acknowledged that it’s “still early days” and customers are still working out a lot of the operational issues associated with DAA. Because of this there are a couple of different deployment scenarios that can underpin the company’s revenue forecast range going forward, Harshman said, noting it creates a bit of a challenge in modeling for the fourth quarter.

However, Harshman said that considering not too long ago there were questions in the industry around whether DAA was even possible, it’s notable that DAA shipments are actually ramping up and that customers have recently been talking about the approach as a reality as well.

“I will take the uncertainty of the next quarter or two any day in exchange for the fact that the train feels like it’s leaving the station,” Harshman said.

The key takeaway from the cable access segment’s results, according to Harman, is that CableOS’s virtualized software architecture “can and is being deployed and operated at scale.”

As for Harmonic’s video segment, executives said the company has been executing on a transformation from a historically broadcast-centric appliance business to a more profitable and predictable OTT software and SaaS business.

Revenues for the segment were $73.3 million, down from $84.2 million in the year ago period.  Comcast contributed to 16 percent of this revenue.

Executives noted that Harmonic deployed more than 35,000 linear OTT channels up 23 percent year over year.

Earlier this year Harmonic partnered with NASA and Roku to launch a new streaming channel, powered by the company’s video SaaS. Since the channel launched in September, the app on Roku has been installed more than 58,000 times, Harshman said. He also noted that the number of active revenue generating video SaaS customers grew to nearly 20, up 200 percent year over year.

Overall, the company recorded $101.4 million in revenue, up 11 percent year over year.

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