Pay-TV tech vendor Harmonic reported flat revenue totaling $103.1 million for the second quarter of 2015, down 1 percent from the comparable year-ago period.
"Underneath this headline, it's very much a tale of two businesses," company president and CEO Patrick Harshman noted during a Monday investor call. "Positively, our video business grew 13 percent, driven by an accelerated adoption of our VOS platform, both by service provider and media customers.
"On the other hand," he added, "our cable edge business was down 28 percent, following a record first quarter of revenue and bookings. Some decline was expected following the first quarter, but other market factors accentuated the effect."
Harmonic has signaled a shift in long-term strategy towards software-based compression and workflow at the 2014 NAB show when it unveiled VOS (video operating system). The San Jose, Calif.-based company says the tech enables virtualized video processing from a single software platform.
Harmonic said its second quarter VOS bookings were nearly three times its first quarter bookings and roughly six times that of the fourth quarter. This uptick, the company added, was driven by the acceleration of adoption by Tier 1 operators across the globe.
"All in all, nearly two dozen customers adopted the platform for the first time in the quarter, while several existing VOS customers came back to us to either extend network functionality or add channel capacity," Harshman said.
The decline in Q2 cable edge sales, meanwhile, followed a company-record Q1 in sector revenue. Harshman blamed the downturn on consolidation among cable operators. He said these dynamics will continue to impact Harmonic's cable edge revenue in the near term. But going forward, the proliferation of DOCSIS 3.1 technology leaves the company "incrementally more bullish on our mid- to long-term opportunity and competitive position."
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