Harmonic reported strong second-quarter results as its cable access and video segments both helped drive nearly 40% year over year revenue growth in the period.
Harmonic video segment revenue grew 20% over Q2 2021 to $76.2 million, while cable access revenues climbed 62% to $81.2 million. Overall revenues were up 39% year over year to $157.4 million.
Speaking on Harmonic’s quarterly earnings call Monday, CEO Patrick Harshman said the underlying highlight for the video segment again was software-as-a-service revenue, which jumped 69% versus the same period a year ago to $8.6 million. The second quarter video revenue was better than Harmonic expected, partly due to around $3 million of appliance shipments that had originally been expected for the second half but occurred earlier.
Harmonic’s video strategy is based on two main elements, he noted; snagging a leading position in the streaming SaaS market, especially for live sports, and maximizing profit from the flat to declining traditional video broadcast market.
“Our results through the first half of 2022 demonstrated continued execution of this plan with important strategic SaaS wins, top line growth, gross margin expansion and continued segment profitability,” Harshman said, according to a transcript. This came despite Harmonic halting sales in Russia, which resulted in estimated revenue loss of about $6 million.
The growth in streaming SaaS was mainly driven by demand and Harmonic’s larger media customers, who Harshman said are expanding consumer footprints, content rights and usage of the company’s service – again especially for high-profile live sports events. He also called out important wins in securing several Tier 1 SaaS customers across North America, Latin America and EMEA
“Live sports streaming is an increasingly active and opportunity rich end market and our experience and reputation for enabling best-in-class live streaming continues to grow,” Harshman said.
Two of Harmonic’s video customers accounted for more than 10% of revenue during the quarter, including Comcast, which contributed 37%, and Intelsat, which contributed 11%.
Following a strong first half of the year for SaaS, Harmonic still expects streaming SaaS revenue will grow over 50% in 2022.
Earlier this NBC Sports tapped Harmonic to provide its software-based Edge media processing product for its production of the Beijing Olympic Winter Games, enabling delivering of live 4K HDR broadcasts with immersive audio to local stations and affiliates.
During the second quarter the company announced it added support for HDR10+ technology to its VOS 360 cloud streaming platform and XOS software-based advanced media processing solution, with the first trial under way with OTA pay TV service Evoca.
Harmonic seeing demand for live streaming tech comes as plenty of live sports are set to be streamed in the coming seasons. Amazon and Apple are among some of the streaming players that have secured media rights to major sporting events – including NFL Thursday Night Football, which kicks off exclusively on Amazon Prime Video in September, and Apple’s new 10-year deal for Major League Soccer matches starting in 2023.