Harmonic cable edge revenue drops 12% as customers pivot to virtualized CCAP

financial news

Harmonic said that a pivot among customers including Comcast to its software-based CCAP product is the main driver for a 12 percent year-over-year drop in cable edge revenue in the third quarter. 

Harmonic said that demand for its virtualized Converged Cable Access Platform solution, CableOS, has been “overwhelming” since it was introduced at the SCTE’s Cable-Tec Expo conference in late September. Comcast, for example, recently signed a warrant agreement with Harmonic, based in large part on CableOS sales. 

The virtualized CCAP product is set to become available in the fourth quarter. 

Sponsored by Google Cloud

Webinar: Remote Post Production In The Cloud

Video production companies across the world have traditionally been tethered to physical facilities, but with the advent of covid-19, remote post production capabilities are more important than ever. Join this webinar to learn more about how video producers can utilize Google Cloud infrastructure, along with partner applications, to develop a remote post production suite that brings your artists and editors together, no matter where they are.

RELATED: Comcast and Harmonic strike warrant agreement focused on virtual CCAP sales

“It is increasingly clear the market is hungry for more flexible, scalable, and economical solutions to the challenge of exploding IP data and video services, and is therefore ready for a software based CCAP solution,” Harmonic CEO Patrick Harshman told investors Wednesday during Harmonic’s third-quarter earnings call. 

However, the switch to the virtualized product disrupted sales of Harmonic’s physical cable edge equipment. 

“Customer focus pivoted faster than we anticipated to our soon-to-be-released CableOS software-based CCAP and consequently demand for our legacy cable edge products softened significantly during the quarter,” Harshman said. 

“Global demand for legacy edge QAM has softened as our customers evaluate and make plans for their respective transitions to CableOS and the IP video services CableOS enables,” he added. “The decline in legacy product demand was steeper than we anticipated in the third quarter. And implies that our cable edge business will continue to weigh on our combined company financial results for the next couple of quarters or so, as CableOS gets to scale.”

Harmonic’s main competitors, which include Arris, Cisco Systems, Casa Systems and Huawei, have also introduced virtualized CCAP products, or are in the process of doing so. 

Overall, Harmonic posted third-quarter revenue of $102 million, up; 22 percent year over year but missing Wall Street’s consensus forecast. 

Suggested Articles

Locast, a free streaming app for local broadcast television, has added Minneapolis and St. Paul to the list of cities that can access its service.

Disney’s stake in fuboTV hits the books not long after the company reached a distribution deal with fuboTV.

TiVo said that its recent Stream 4K connected TV device is selling faster than any of the company’s previous hardware releases.