Technology
Harmonic Announces Fourth Quarter and Fiscal 2024 Results
Published
1 year agoon
By
Record total quarterly revenue, up 33% year over year, and record quarterly Adjusted EBITDA
Doubles previous stock repurchase program to $200 million
SAN JOSE, Calif., Feb. 10, 2025 /PRNewswire/ — Harmonic Inc. (NASDAQ: HLIT) today announced its unaudited results for the fourth quarter and fiscal year ended December 31, 2024.
“Harmonic achieved record quarterly total company revenue and Adjusted EBITDA, with both Broadband and Video revenue exceeding expectations,” said Nimrod Ben-Natan, president and chief executive officer of Harmonic. “The strong performance in Broadband demonstrates our ability to scale to our customers’ needs and our technology leadership has never been stronger, leaving us well-positioned to take advantage of expected long-term growth in broadband DOCSIS 4.0 and Fiber.”
“Our prudent 2025 Broadband revenue guidance reflects shifts in customer deployment timing as operators transition to Unified DOCSIS 4.0. These trends are industry-wide and we believe they are short-term in nature,” said Walter Jankovic, chief financial officer of Harmonic. “We remain confident in our long-term outlook and expect to resume above market growth in 2026 as adoption of DOCSIS 4.0 accelerates and cable capital spending returns to its long-term growth trajectory. Additionally, our board of directors has authorized a new three-year, $200 million share repurchase program, reflecting our confidence in the Company’s strong continued profitability and free cash flow generation. We intend to opportunistically repurchase our shares when we believe that our stock is undervalued relative to the strength of our business, thereby creating value for our long-term shareholders.”
Q4 Financial and Business Highlights
Financial
Revenue: $222.2 million, compared to $167.1 million in the prior year periodBroadband segment revenue: $171.0 million, compared to $115.2 million in the prior year periodVideo segment revenue: $51.1 million, compared to $51.9 million in the prior year periodGross margin: 56.1% for both GAAP and non-GAAP, compared to GAAP 49.0% and non-GAAP 49.3% in the prior year periodBroadband segment non-GAAP gross margin: 52.7% compared to 42.4% in the prior year periodVideo segment non-GAAP gross margin: 67.4% compared to 64.6% in the prior year periodOperating income: GAAP income $52.9 million and non-GAAP income $63.1 million, compared to GAAP income $9.6 million and non-GAAP income $18.9 million in the prior year periodNet income: GAAP net income $38.1 million and non-GAAP net income of $52.4 million, compared to GAAP net income $83.8 million and non-GAAP net income $14.7 million in the prior year periodNon-GAAP adjusted EBITDA: $71.8 million income compared to $21.7 million income in the prior year periodNet income per share: GAAP net income per share of $0.32 and non-GAAP net income per share of $0.45, compared to GAAP net income per share of $0.72 and non-GAAP net income per share of $0.13 in the prior year periodCash: $101.5 million, compared to $84.3 million in the prior year period
Business
Commercially deployed our cOS™ solution with 127 customers, serving 33.3 million cable modemsLargest installed base of DOCSIS 4.0 and now engaged with 10 Tier 1 operators on Unified DOCSIS 4.0Increased Q4 2024 rest-of-world Broadband sales by over 50% from prior quarter, and won five new customers including Blue Stream Fiber (USA) and IPKO (Europe)Formed exclusive technology collaboration with Sercomm to advance DOCSIS 4.0 unified technologiesVideo SaaS (VOS360) is now qualified on a fourth cloud platform with Akamai Cloud Computing; additionally, Akamai has selected Harmonic as the technology vendor for one of their video streaming services
Share Repurchase Program
Harmonic also announced today that its board of directors has terminated the Company’s existing stock repurchase program and authorized a new program under which the Company may repurchase up to $200 million of its outstanding shares of common stock through February 2028. The Company intends to fund the share repurchases from cash on hand and cash generated from operations. Repurchases under the program may be made from time to time through open market purchases and 10b5-1 trading plans, in accordance with applicable securities laws. The timing and amount of any repurchases will depend on a variety of factors, including the price of Harmonic’s common stock, business and market conditions, corporate regulatory requirements, strategic opportunities and other factors. The stock repurchase program does not commit Harmonic to acquire any particular amounts of its common stock, and the program may be amended, suspended or discontinued at any time at the Company’s discretion.
Select Financial Information
GAAP
Non-GAAP
Key Financial Results
Q4 2024
Q3 2024
Q4 2023
Q4 2024
Q3 2024
Q4 2023
(Unaudited, in millions, except per share data)
Net revenue
$ 222.2
$ 195.8
$ 167.1
*
*
*
Net income
$ 38.1
$ 21.7
$ 83.8
$ 52.4
$ 29.9
$ 14.7
Net income per share
$ 0.32
$ 0.19
$ 0.72
$ 0.45
$ 0.26
$ 0.13
Other Financial Information
Q4 2024
Q3 2024
Q4 2023
(Unaudited, in millions)
Adjusted EBITDA for the quarter (1)
$ 71.8
$ 43.4
$ 21.7
Bookings for the quarter
$ 150.0
$ 171.4
$ 196.5
Backlog and deferred revenue as of quarter end
$ 496.3
$ 584.7
$ 653.2
Cash and cash equivalents as of quarter end
$ 101.5
$ 58.2
$ 84.3
(1) Adjusted EBITDA is a Non-GAAP financial measure. Refer to “Preliminary Net Income to Consolidated Segment Adjusted EBITDA Reconciliation” below for a reconciliation to net income, the most comparable GAAP measure.
* Not applicable
Explanations regarding our use of non-GAAP financial measures and related definitions, and reconciliations of our GAAP and Non-GAAP measures, are provided in the sections below entitled “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliations.”
Financial Guidance
Q1 2025 GAAP Financial Guidance
(Unaudited, in millions, except
percentages and per share data)
Low
High
Broadband
Video
Total
Broadband
Video
Total
Net revenue
$ 80
$ 40
$ 120
$ 90
$ 45
$ 135
Gross margin %
55.8 %
57.0 %
Gross profit
$ 67
$ 77
Tax rate
19 %
19 %
Net income (loss)
$ (6)
$ 1
Net income (loss) per share
$ (0.05)
$ 0.01
Shares (1)
117.4
118.5
(1) Diluted shares assumes stock price at $13.07 (Q4 2024 average price).
2025 GAAP Financial Guidance
(Unaudited, in millions, except
percentages and per share data)
Low
High
Broadband
Video
Total
Broadband
Video
Total
Net revenue
$ 400
$ 185
$ 585
$ 450
$ 195
$ 645
Gross margin %
54.5 %
57.1 %
Gross profit
$ 319
$ 368
Tax rate
19 %
19 %
Net income
$ 22
$ 53
Net income per share
$ 0.19
$ 0.45
Shares (1)
119.1
119.1
(1) Diluted shares assumes stock price at $13.07 (Q4 2024 average price).
Q1 2025 Non-GAAP Financial Guidance (1)
(Unaudited, in millions, except
percentages and per share data)
Low
High
Broadband
Video
Total
Broadband
Video
Total
Gross margin %
52.0 %
64.0 %
56.0 %
54.0 %
65.0 %
57.7 %
Gross profit
$ 42
$ 26
$ 68
$ 49
$ 29
$ 78
Adjusted EBITDA(2)
$ 9
$ —
$ 9
$ 15
$ 2
$ 17
Tax rate
20 %
20 %
Net income per share
$ 0.02
$ 0.08
Shares (3)
118.5
118.5
(1) Refer to “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliations on Financial Guidance” below. Components may not sum to total due to rounding.
(2) Refer to “Net Income (Loss) to Consolidated Segment Adjusted EBITDA Reconciliation on Financial Guidance” below for a reconciliation to net income (loss), the most comparable GAAP measure.
(3) Diluted shares assumes stock price at $13.07 (Q4 2024 average price).
2025 Non-GAAP Financial Guidance (1)
(Unaudited, in millions, except
percentages and per share data)
Low
High
Broadband
Video
Total
Broadband
Video
Total
Gross margin %
51.0 %
63.0 %
54.8 %
54.0 %
65.0 %
57.3 %
Gross profit
$ 204
$ 117
$ 321
$ 243
$ 127
$ 370
Adjusted EBITDA(2)
$ 77
$ 8
$ 85
$ 106
$ 17
$ 123
Tax rate
20 %
20 %
Net income per share
$ 0.43
$ 0.68
Shares (3)
119.1
119.1
(1) Refer to “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliations on Financial Guidance” below. Components may not sum to total due to rounding.
(2) Refer to “Net Income (Loss) to Consolidated Segment Adjusted EBITDA Reconciliation on Financial Guidance” below for a reconciliation to net income (loss), the most comparable GAAP measure.
(3) Diluted shares assumes stock price at $13.07 (Q4 2024 average price).
Conference Call Information
Harmonic will host a conference call to discuss its financial results at 2:00 p.m. PT (5:00 p.m. ET) on Monday, February 10, 2025. The live webcast will be available on the Harmonic Investor Relations website at http://investor.harmonicinc.com. To participate via telephone, please register in advance using this link, https://register-conf.media-server.com/register/BI2f09f965b0ef4108b66aaee0197cd4f5. A replay will be available after 5:00 p.m. PT on the same website.
About Harmonic Inc.
Harmonic (NASDAQ: HLIT), the worldwide leader in virtualized broadband and video delivery solutions, enables media companies and service providers to deliver ultra-high-quality video streaming and broadcast services to consumers globally. The company revolutionized broadband networking via the industry’s first virtualized broadband solution, enabling operators to more flexibly deploy gigabit internet service to consumers’ homes and mobile devices. Whether simplifying OTT video delivery via innovative cloud and software platforms, or powering the delivery of gigabit internet services, Harmonic is changing the way media companies and service providers monetize live and on-demand content on every screen. More information is available at www.harmonicinc.com.
Legal Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements related to our stock repurchase program and our expectations regarding net revenue, gross margins, operating expenses, operating income (loss), Adjusted EBITDA, tax expense and tax rate, and net income (loss) per diluted share. Our expectations regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, in no particular order, the following: stock repurchases may not be conducted in the timeframe or in the manner we expect, or at all; customer concentration and consolidation; loss of one or more key customers; delays or decreases in capital spending in the cable, satellite telco, broadcast and media industries; the possibility that our products will not generate sales that are commensurate with our expectations or that our cost of revenue or operating expenses may exceed our expectations; the market and technology trends underlying our Broadband and Video businesses will not continue to develop in their current direction or pace; the impact of general economic conditions on our sales and operations; the mix of products and services sold in various geographies and the effect it has on gross margins; our ability to develop new and enhanced products in a timely manner and market acceptance of our new or existing products; risks associated with our international operations; exchange rate fluctuations of the currencies in which we conduct business; risks associated with our cOS™ and VOS product solutions; dependence on various broadband and video industry trends; inventory management; the lack of timely availability or the impact of increases in the prices of parts or raw materials necessary to produce our products; the effect of competition, on both revenue and gross margins; difficulties associated with rapid technological changes in our markets; risks associated with unpredictable sales cycles; our dependence on contract manufacturers and sole or limited source suppliers; and the impact on our business of natural disasters. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Harmonic’s filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K for the year ended December 31, 2023, our most recent Quarterly Report on Form 10-Q and our Current Reports on Form 8-K. The forward-looking statements in this press release are based on information available to the Company as of the date hereof, and Harmonic disclaims any obligation to update any forward-looking statements.
Use of Non-GAAP Financial Measures
The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP” or referred to herein as “reported”). However, management believes that certain non-GAAP financial measures provide management and other users with additional meaningful financial information that should be considered when assessing our ongoing performance. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business, establish operating budgets, set internal measurement targets and make operating decisions.
These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Harmonic’s results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Harmonic’s results of operations in conjunction with the corresponding GAAP measures.
The Company believes that the presentation of non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to, the Company’s reported results prepared in accordance with GAAP.
The non-GAAP measures presented here are: Gross profit, operating expenses, income (loss) from operations, non-operating expenses and net income (loss), Adjusted EBITDA (including those amounts as a percentage of revenue) and net income (loss) per diluted share. The presentation of non-GAAP information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP, and is not necessarily comparable to non-GAAP results published by other companies. A reconciliation of the historical non-GAAP financial measures discussed in this press release to the most directly comparable historical GAAP financial measures is included with the financial statements provided with this press release. The non-GAAP adjustments described below have historically been excluded from our GAAP financial measures.
Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:
Stock-based compensation – Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. We believe that management is limited in its ability to project the impact stock-based compensation would have on our operating results. In addition, for comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes stock-based compensation in order to better understand the long-term performance of our core business and to facilitate the comparison of our results to the results of our peer companies.
Restructuring and related charges – Harmonic from time to time incurs restructuring charges which primarily consist of employee severance, one-time termination benefits related to the reduction of its workforce, and other costs. These charges are associated with material business shifts. We exclude these items because we do not believe they are reflective of our ongoing long-term business and operating results.
Non-cash interest expense related to convertible notes – We record the amortization of issuance costs as non-cash interest expense. We believe that excluding these costs provides meaningful supplemental information regarding operational performance and liquidity, along with enhancing investors’ ability to view the Company’s results from management’s perspective. In addition, we believe excluding these costs from the non-GAAP measures facilitates comparisons to our historical operating results and comparisons to peer company operating results.
Discrete tax items and tax effect of non-GAAP adjustments – The income tax effect of non-GAAP adjustments relates to the tax effect of the adjustments that we incorporate into non-GAAP financial measures in order to provide a more meaningful measure of non-GAAP net income.
Depreciation – Depreciation expense, along with interest, tax and stock-based compensation expense, and restructuring charges, is excluded from Adjusted EBITDA because we do not believe depreciation and the other items relate to the ordinary course of our business or are reflective of our underlying business performance.
Non-recurring advisory fees – There were non-recurring costs that we excluded from non-GAAP results relating to professional accounting, tax and legal fees associated with strategic corporate initiatives.
Asset impairment and related charges- We exclude asset impairment and related charges due to the nature of such expenses being unusual and arising outside the ordinary course of continuing operations. These costs primarily consist of impairments of fixed assets, right-of-use assets and related leasehold improvements, and other unrecoverable facility costs due to the intended change in use of certain leased space.
Harmonic Inc.
Preliminary Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except par value)
December 31, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$ 101,457
$ 84,269
Restricted cash
332
—
Accounts receivable, net
178,013
141,531
Inventories
64,004
83,982
Prepaid expenses and other current assets
22,270
20,950
Total current assets
366,076
330,732
Property and equipment, net
26,823
36,683
Operating lease right-of-use assets
12,411
20,817
Goodwill
236,876
239,150
Deferred income taxes
121,028
104,707
Other non-current assets
33,292
36,117
Total assets
$ 796,506
$ 768,206
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Convertible debt
$ —
$ 114,880
Current portion of long-term debt
2,194
—
Current portion of other borrowings
4,941
4,918
Accounts payable
35,250
38,562
Deferred revenue
47,069
46,217
Operating lease liabilities
5,675
6,793
Other current liabilities
72,440
61,024
Total current liabilities
167,569
272,394
Long-term debt
112,084
—
Other long-term borrowings
8,694
10,495
Operating lease liabilities, non-current
14,727
18,965
Other non-current liabilities
28,174
29,478
Total liabilities
331,248
331,332
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding
—
—
Common stock, $0.001 par value, 150,000 shares authorized; 116,735 and 112,407 shares
issued and outstanding at December 31, 2024 and December 31, 2023, respectively
117
112
Additional paid-in capital
2,432,733
2,405,043
Accumulated deficit
(1,953,495)
(1,962,575)
Accumulated other comprehensive loss
(14,097)
(5,706)
Total stockholders’ equity
465,258
436,874
Total liabilities and stockholders’ equity
$ 796,506
$ 768,206
Harmonic Inc.
Preliminary Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Three Months Ended
Year Ended
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Revenue:
Appliance and integration
$ 177,914
$ 125,197
$ 507,378
$ 435,878
SaaS and service
44,252
41,895
171,344
172,029
Total net revenue
222,166
167,092
678,722
607,907
Cost of revenue:
Appliance and integration
84,072
70,596
255,707
236,773
SaaS and service
13,443
14,629
57,094
58,589
Total cost of revenue
97,515
85,225
312,801
295,362
Total gross profit
124,651
81,867
365,921
312,545
Operating expenses:
Research and development
31,413
30,252
120,975
126,282
Selling, general and administrative
38,587
41,982
153,124
163,282
Asset impairment and related charges
610
—
12,713
—
Restructuring and related charges
1,173
—
15,973
809
Total operating expenses
71,783
72,234
302,785
290,373
Income from operations
52,868
9,633
63,136
22,172
Interest expense, net
(2,493)
(571)
(7,326)
(2,696)
Other income (expense), net
5,725
(249)
2,123
(335)
Income before income taxes
56,100
8,813
57,933
19,141
Provision for (benefit from) income taxes
17,980
(75,028)
18,716
(64,853)
Net income
$ 38,120
$ 83,841
$ 39,217
$ 83,994
Net income per share:
Basic
$ 0.33
$ 0.75
$ 0.34
$ 0.75
Diluted
$ 0.32
$ 0.72
$ 0.33
$ 0.72
Weighted average shares outstanding:
Basic
116,619
112,294
115,120
111,651
Diluted
117,699
115,691
117,482
117,359
Harmonic Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Year Ended
December 31, 2024
December 31, 2023
Cash flows from operating activities:
Net income
$ 39,217
$ 83,994
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
12,139
12,255
Asset impairment and related charges
12,036
—
Stock-based compensation
28,073
27,329
Foreign currency remeasurement
315
1,453
Deferred income taxes, net
(16,436)
(92,856)
Provision for excess and obsolete inventories
10,971
7,396
Other adjustments
569
1,920
Changes in operating assets and liabilities:
Accounts receivable, net
(38,241)
(32,695)
Inventories
8,374
35,403
Other assets
3,199
25,483
Accounts payable
(3,107)
(29,358)
Deferred revenues
(2,210)
(20,823)
Other liabilities
7,018
(12,442)
Net cash provided by operating activities
61,917
7,059
Cash flows from investing activities:
Purchases of investments
—
(6,305)
Proceeds from maturities of investments
—
6,305
Purchases of property and equipment
(9,186)
(8,475)
Net cash used in investing activities
(9,186)
(8,475)
Cash flows from financing activities:
Proceeds from long-term debt
115,000
—
Repayment of convertible debt
(115,500)
—
Payments for debt issuance costs
(332)
(1,025)
Proceeds from other borrowings
3,943
3,835
Repayment of other borrowings
(5,447)
(4,865)
Repurchase of common stock
(30,047)
—
Proceeds from common stock issued to employees
6,628
6,558
Taxes paid related to net share settlement of equity awards
(7,514)
(9,493)
Net cash used in financing activities
(33,269)
(4,990)
Effect of exchange rate changes on cash and cash equivalents
(1,942)
1,089
Net increase (decrease) in cash and cash equivalents
17,520
(5,317)
Cash and cash equivalents at beginning of period
84,269
89,586
Cash and cash equivalents at end of period
$ 101,789
$ 84,269
Cash and cash equivalents and restricted cash at end of period
Cash and cash equivalents
$ 101,457
$ 84,269
Restricted cash
332
—
Total cash, cash equivalents and restricted cash as shown in the condensed consolidated
statement of cash flows
$ 101,789
$ 84,269
Harmonic Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Year Ended
December 31, 2024
December 31, 2023
Supplemental cash flow disclosure:
Income tax payments, net
$ 27,308
$ 18,128
Interest payments, net
$ 6,283
$ 1,626
Supplemental schedule of non-cash investing activities:
Capital expenditures incurred but not yet paid
$ 488
$ 618
Supplemental schedule of non-cash financing activities:
Shares of common stock issued upon redemption of the 2024 Notes
4,578
—
Harmonic Inc.
Preliminary GAAP Revenue Information
(Unaudited, in thousands, except percentages)
Three Months Ended
December 31, 2024
September 27, 2024
December 31, 2023
Geography
Americas
$ 186,907
84 %
$ 167,720
86 %
$ 129,406
77 %
EMEA
26,044
12 %
20,269
10 %
30,041
18 %
APAC
9,215
4 %
7,767
4 %
7,645
5 %
Total
$ 222,166
100 %
$ 195,756
100 %
$ 167,092
100 %
Market
Service Provider
$ 178,266
80 %
$ 159,993
82 %
$ 128,566
77 %
Broadcast and Media
43,900
20 %
35,763
18 %
38,526
23 %
Total
$ 222,166
100 %
$ 195,756
100 %
$ 167,092
100 %
Twelve Months Ended
December 31, 2024
December 31, 2023
Geography
Americas
$ 557,255
82 %
$ 447,700
74 %
EMEA
92,553
14 %
127,689
21 %
APAC
28,914
4 %
32,518
5 %
Total
$ 678,722
100 %
$ 607,907
100 %
Market
Service Provider
$ 529,381
78 %
$ 443,005
73 %
Broadcast and Media
149,341
22 %
164,902
27 %
Total
$ 678,722
100 %
$ 607,907
100 %
Harmonic Inc.
Preliminary Segment Information
(Unaudited, in thousands, except percentages)
Three Months Ended December 31, 2024
Broadband
Video
Total Segment
Measures
Adjustments (1)
Consolidated
GAAP
Measures
Net revenue
$ 171,028
$ 51,138
$ 222,166
$ —
$ 222,166
Gross profit
90,200
(1)
34,451
(1)
124,651
(1)
—
124,651
Gross margin %
52.7 %
(1)
67.4 %
(1)
56.1 %
(1)
56.1 %
Three Months Ended September 27, 2024
Broadband
Video
Total Segment
Measures
Adjustments (1)
Consolidated
GAAP
Measures
Net revenue
$ 145,338
$ 50,418
$ 195,756
$ —
$ 195,756
Gross profit
70,256
(1)
34,770
(1)
105,026
(1)
(294)
104,732
Gross margin %
48.3 %
(1)
69.0 %
(1)
53.7 %
(1)
53.5 %
Three Months Ended December 31, 2023
Broadband
Video
Total Segment
Measures
Adjustments (1)
Consolidated
GAAP
Measures
Net revenue
$ 115,229
$ 51,863
$ 167,092
$ —
$ 167,092
Gross profit
48,803
(1)
33,491
(1)
82,294
(1)
(427)
81,867
Gross margin %
42.4 %
(1)
64.6 %
(1)
49.3 %
(1)
49.0 %
Twelve Months Ended December 31, 2024
Broadband
Video
Total Segment
Measures
Adjustments (1)
Consolidated
GAAP
Measures
Net revenue
$ 488,200
$ 190,522
$ 678,722
$ —
$ 678,722
Gross profit
242,186
(1)
125,284
(1)
367,470
(1)
(1,549)
365,921
Gross margin %
49.6 %
(1)
65.8 %
(1)
54.1 %
(1)
53.9 %
Twelve Months Ended December 31, 2023
Broadband
Video
Total Segment
Measures
Adjustments (1)
Consolidated
GAAP
Measures
Net revenue
$ 388,482
$ 219,425
$ 607,907
$ —
$ 607,907
Gross profit
181,932
(1)
133,649
(1)
315,581
(1)
(3,036)
312,545
Gross margin %
46.8 %
(1)
60.9 %
(1)
51.9 %
(1)
51.4 %
(1) Segment gross margin and segment gross profit are Non-GAAP financial measures. Refer to “Use of Non-GAAP Financial
Measures” above and “GAAP to Non-GAAP Reconciliations.”
Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(in thousands, except percentages and per share data)
Three Months Ended December 31, 2024
Revenue
Gross Profit
Total
Operating
Expense
Income from
Operations
Total Non-
operating
Income, net
Net Income
GAAP
$ 222,166
$ 124,651
$ 71,783
$ 52,868
$ 3,232
$ 38,120
Stock-based compensation
—
—
(8,486)
8,486
—
8,486
Restructuring and related charges
—
—
(1,173)
1,173
—
1,173
Asset impairment and related charges (1)
—
—
(610)
610
—
610
Discrete tax items and tax effect of non-GAAP adjustments
—
—
—
—
—
4,043
Total adjustments
—
—
(10,269)
10,269
—
14,312
Non-GAAP
$ 222,166
$ 124,651
$ 61,514
$ 63,137
$ 3,232
$ 52,432
As a % of revenue (GAAP)
56.1 %
32.3 %
23.8 %
1.5 %
17.2 %
As a % of revenue (Non-GAAP)
56.1 %
27.7 %
28.4 %
1.5 %
23.6 %
Diluted net income per share:
GAAP
$ 0.32
Non-GAAP
$ 0.45
Shares used in per share calculation:
GAAP and Non-GAAP
117,699
(1) Includes impairment charges of $0.2 million for right-of-use assets and $0.4 million related to the fair value of other unrecoverable facility costs.
Three Months Ended September 27, 2024
Revenue
Gross Profit
Total
Operating
Expense
Income from
Operations
Total Non-
operating
Expense, net
Net Income
GAAP
$ 195,756
$ 104,732
$ 69,308
$ 35,424
$ (6,618)
$ 21,718
Stock-based compensation
—
294
(5,416)
5,710
—
5,710
Restructuring and related charges
—
—
(281)
281
—
281
Asset impairment and related charges (1)
—
—
(3,103)
3,103
—
3,103
Discrete tax items and tax effect of non-GAAP adjustments
—
—
—
—
—
(871)
Total adjustments
—
294
(8,800)
9,094
—
8,223
Non-GAAP
$ 195,756
$ 105,026
$ 60,508
$ 44,518
$ (6,618)
$ 29,941
As a % of revenue (GAAP)
53.5 %
35.4 %
18.1 %
(3.4) %
11.1 %
As a % of revenue (Non-GAAP)
53.7 %
30.9 %
22.7 %
(3.4) %
15.3 %
Diluted net income per share:
GAAP
$ 0.19
Non-GAAP
$ 0.26
Shares used in per share calculation:
GAAP and Non-GAAP
117,358
(1) Includes write-off of $1.8 million for internally capitalized software, and impairment charges of $0.8 million for right-of-use assets, $0.1 million for leasehold improvements and $0.4 million related to the fair value of other unrecoverable facility costs.
Three Months Ended December 31, 2023
Revenue
Gross Profit
Total
Operating
Expense
Income from
Operations
Total Non-
operating
Expense, net
Net Income
GAAP
$167,092
$81,867
$72,234
$9,633
$(820)
$83,841
Stock-based compensation
—
454
(6,151)
6,605
—
6,605
Restructuring and related charges
—
(27)
—
(27)
—
(27)
Non-recurring advisory fee
—
—
(2,702)
2,702
—
2,702
Non-cash interest expense related to convertible notes
—
—
—
—
233
233
Discrete tax items and tax effect of non-GAAP adjustments
—
—
—
—
—
(78,693)
Total adjustments
—
427
(8,853)
9,280
233
(69,180)
Non-GAAP
$167,092
$82,294
$63,381
$18,913
$(587)
$14,661
As a % of revenue (GAAP)
49.0 %
43.2 %
5.8 %
(0.5) %
50.2 %
As a % of revenue (Non-GAAP)
49.3 %
37.9 %
11.3 %
(0.4) %
8.8 %
Diluted net income per share:
GAAP
$0.72
Non-GAAP
$0.13
Shares used in per share calculation:
GAAP and Non-GAAP
115,691
Twelve Months Ended December 31, 2024
Revenue
Gross Profit
Total
Operating
Expense
Income from
Operations
Total Non-
operating
Expense, net
Net Income
GAAP
$ 678,722
$ 365,921
$ 302,785
$ 63,136
$ (5,203)
$ 39,217
Stock-based compensation
—
1,089
(26,984)
28,073
—
28,073
Restructuring and related charges
—
460
(15,973)
16,433
11
16,444
Non-recurring advisory fees
—
—
(755)
755
—
755
Asset impairment and related charges (1)
—
—
(12,713)
12,713
—
12,713
Non-cash interest expense related to convertible notes
—
—
—
—
567
567
Discrete tax items and tax effect of non-GAAP adjustments
—
—
—
—
—
(5,736)
Total adjustments
—
1,549
(56,425)
57,974
578
52,816
Non-GAAP
$ 678,722
$ 367,470
$ 246,360
$ 121,110
$ (4,625)
$ 92,033
As a % of revenue (GAAP)
53.9 %
44.6 %
9.3 %
(0.8) %
5.8 %
As a % of revenue (Non-GAAP)
54.1 %
36.3 %
17.8 %
(0.7) %
13.6 %
Diluted net income per share:
GAAP
$ 0.33
Non-GAAP
$ 0.78
Shares used in per share calculation:
GAAP and Non-GAAP
117,482
(1) Includes write-off of $1.8 million for internally capitalized software, and impairment charges of $3.9 million for right-of-use assets, $4.3 million for leasehold improvements, and $2.7 million related to the fair value of other unrecoverable facility costs.
Twelve Months Ended December 31, 2023
Revenue
Gross Profit
Total
Operating
Expense
Income from
Operations
Total Non-
operating
Expense, net
Net Income
GAAP
$ 607,907
$ 312,545
$ 290,373
$ 22,172
$ (3,031)
$ 83,994
Stock-based compensation
—
2,349
(24,980)
27,329
—
27,329
Restructuring and related charges
—
687
(445)
1,132
—
1,132
Non-recurring advisory fees
—
—
(5,201)
5,201
—
5,201
Non-cash interest expense related to convertible notes
—
—
—
—
905
905
Discrete tax items and tax effect of non-GAAP adjustments
—
—
—
—
—
(75,595)
Total adjustments
—
3,036
(30,626)
33,662
905
(41,028)
Non-GAAP
$ 607,907
$ 315,581
$ 259,747
$ 55,834
$ (2,126)
$ 42,966
As a % of revenue (GAAP)
51.4 %
47.8 %
3.6 %
(0.5) %
13.8 %
As a % of revenue (Non-GAAP)
51.9 %
42.7 %
9.2 %
(0.3) %
7.1 %
Diluted net income per share:
GAAP
$ 0.72
Non-GAAP
$ 0.37
Shares used in per share calculation:
GAAP and Non-GAAP
117,359
Harmonic Inc.
Calculation of Adjusted EBITDA by Segment (Unaudited)
(In thousands)
Three Months Ended December 31, 2024
Broadband
Video
Income from operations
$ 57,787
$ 5,350
Depreciation
2,133
835
Other non-operating expenses, net
4,130
1,595
Adjusted EBITDA(1)
$ 64,050
$ 7,780
Revenue
$ 171,028
$ 51,138
Adjusted EBITDA margin % (1)
37.5 %
15.2 %
Three Months Ended September 27, 2024
Broadband
Video
Income from operations
$ 38,192
$ 6,326
Depreciation
2,001
859
Other non-operating expenses, net
(2,733)
(1,199)
Adjusted EBITDA(1)
$ 37,460
$ 5,986
Revenue
$ 145,338
$ 50,418
Adjusted EBITDA margin % (1)
25.8 %
11.9 %
Three Months Ended December 31, 2023
Broadband
Video
Income (loss) from operations
$ 20,268
$ (1,355)
Depreciation
1,794
1,283
Other non-operating expenses, net
(160)
(89)
Adjusted EBITDA(1)
$ 21,902
$ (161)
Revenue
$ 115,229
$ 51,863
Adjusted EBITDA margin % (1)
19.0 %
(0.3) %
Twelve Months Ended December 31, 2024
Broadband
Video
Income from operations
$ 118,354
$ 2,756
Depreciation
8,253
3,886
Other non-operating expenses, net
1,624
510
Adjusted EBITDA(1)
$ 128,231
$ 7,152
Revenue
$ 488,200
$ 190,522
Adjusted EBITDA margin % (1)
26.3 %
3.8 %
Twelve Months Ended December 31, 2023
Broadband
Video
Income (loss) from operations
$ 64,575
$ (8,741)
Depreciation
6,855
5,400
Other non-operating expenses, net
(204)
(131)
Adjusted EBITDA(1)
$ 71,226
$ (3,472)
Revenue
$ 388,482
$ 219,425
Adjusted EBITDA margin % (1)
18.3 %
(1.6) %
(1) Adjusted EBITDA and Adjusted EBITDA margin are Non-GAAP financial measures.
Refer below for the reconciliation of consolidated adjusted EBITDA to net income (loss), the most directly comparable GAAP measure.
Harmonic Inc.
Preliminary Net Income to Consolidated Segment Adjusted EBITDA Reconciliation (Unaudited)
(In thousands)
Three Months Ended
December 31, 2024
September 27, 2024
December 31, 2023
Net income (GAAP)
$ 38,120
$ 21,718
$ 83,841
Provision for (benefit from) income taxes
17,980
7,088
(75,028)
Interest expense, net
2,493
2,686
571
Depreciation
2,968
2,860
3,077
EBITDA
61,561
34,352
12,461
Adjustments
Stock-based compensation
8,486
5,710
6,605
Restructuring and related charges
1,173
281
(27)
Non-recurring advisory fees
—
—
2,702
Asset impairment and related charges
610
3,103
—
Total consolidated segment adjusted EBITDA (Non-GAAP)
$ 71,830
$ 43,446
$ 21,741
Revenue
$ 222,166
$ 195,756
$ 167,092
Net income margin (GAAP)
17.2 %
11.1 %
50.2 %
Consolidated segment adjusted EBITDA margin (Non-GAAP)
32.3 %
22.2 %
13.0 %
Twelve Months Ended
December 31, 2024
December 31, 2023
Net income (GAAP)
$ 39,217
$ 83,994
Provision for (benefit from) income taxes
18,716
(64,853)
Interest expense, net
7,326
2,696
Depreciation
12,139
12,255
EBITDA
77,398
34,092
Adjustments
Stock-based compensation
28,073
27,329
Restructuring and related charges
16,444
1,132
Non-recurring advisory fees
755
5,201
Asset impairment and related charges
12,713
—
Total consolidated segment adjusted EBITDA (Non-GAAP)
$ 135,383
$ 67,754
Revenue
$ 678,722
$ 607,907
Net income margin (GAAP)
5.8 %
13.8 %
Consolidated segment adjusted EBITDA margin (Non-GAAP)
19.9 %
11.1 %
Harmonic Inc.
GAAP to Non-GAAP Reconciliations on Financial Guidance (Unaudited)
(In millions, except percentages and per share data)
Q1 2025 Financial Guidance (1)
Revenue
Gross Profit
Total Operating
Expense
Income (Loss)
from Operations
Net Income (Loss)
GAAP
$ 120
to
$ 135
$ 67
to
$ 77
$ 71
to
$ 73
$ (4)
to
$ 4
$ (6)
to
$ 1
Stock-based compensation expense
—
1
(9)
10
10
Tax effect of non-GAAP adjustments
—
—
—
—
(1)
to
(2)
Total adjustments
—
1
(9)
10
9
to
8
Non-GAAP
$ 120
to
$ 135
$ 68
to
$ 78
$ 62
to
$ 64
$ 6
to
$ 14
$ 3
to
$ 9
As a % of revenue (GAAP)
55.8 %
to
57.0 %
59.2 %
to
54.1 %
(3.3) %
to
3.0 %
(5.0) %
to
0.7 %
As a % of revenue (Non-GAAP)
56.0 %
to
57.7 %
51.7 %
to
47.4 %
5.0 %
to
10.4 %
2.5 %
to
6.7 %
Diluted net income (loss) per share:
GAAP
$(0.05)
to
$0.01
Non-GAAP
$0.02
to
$0.08
Shares used in per share calculation:
GAAP
117.4
to
118.5
Non-GAAP
118.5
(1) Components may not sum to total due to rounding.
2025 Financial Guidance (1)
Revenue
Gross Profit
Total Operating
Expense
Income from
Operations
Net Income
GAAP
$ 585
to
$ 645
$ 319
to
$ 368
$ 281
to
$ 292
$ 38
to
$ 76
$22
to
$53
Stock-based compensation expense
—
2
(34)
36
36
Tax effect of non-GAAP adjustments
—
—
—
—
(7)
to
(8)
Total adjustments
—
2
(34)
36
29
to
28
Non-GAAP
$ 585
to
$ 645
$ 321
to
$ 370
$ 247
to
$ 258
$ 74
to
$ 112
$51
to
$81
As a % of revenue (GAAP)
54.5 %
to
57.1 %
48.0 %
to
45.3 %
6.5 %
to
11.8 %
3.8 %
to
8.2 %
As a % of revenue (Non-GAAP)
54.8 %
to
57.3 %
42.2 %
to
40.0 %
12.6 %
to
17.4 %
8.7 %
to
12.6 %
Diluted net income per share:
GAAP
$0.19
to
$0.45
Non-GAAP
$0.43
to
$0.68
Shares used in per share calculation:
GAAP and Non-GAAP
119.1
(1) Components may not sum to total due to rounding.
Harmonic Inc.
Calculation of Adjusted EBITDA by Segment on Financial Guidance (Unaudited) (1)
(In millions)
Q1 2025 Financial Guidance
Broadband
Video
Income (loss) from operations
$ 7
to
$ 13
$ (1)
to
$ 1
Depreciation
2
2
1
1
Segment adjusted EBITDA(2)
$ 9
to
$ 15
$ —
to
$ 2
2025 Financial Guidance
Broadband
Video
Income from operations
$ 69
to
$ 98
$ 5
to
$ 14
Depreciation
10
10
3
3
Other non-operating expenses
(2)
(2)
—
—
Segment adjusted EBITDA(2)
$ 77
to
$ 106
$ 8
to
$ 17
(1) Components may not sum to total due to rounding.
(2) Segment Adjusted EBITDA is a Non-GAAP financial measure. Refer below for the
“Net income (loss) to Consolidated Segment Adjusted EBITDA reconciliation on Financial Guidance.”
Harmonic Inc.
Net Income (Loss) to Consolidated Segment Adjusted EBITDA Reconciliation on Financial Guidance (Unaudited) (1)
(In millions)
Q1 2025 Financial
Guidance
2025 Financial Guidance
Net income (loss) (GAAP)
$ (6)
to
$ 1
$ 22
to
$ 53
Provision for (benefit from) income taxes
—
1
6
13
Interest expense, net
2
2
8
8
Depreciation
3
3
13
13
EBITDA
$ (1)
to
$ 7
$ 49
to
$ 87
Adjustments
Stock-based compensation
10
10
36
36
Total consolidated segment adjusted EBITDA (Non-GAAP) (2)
$ 9
to
$ 17
$ 85
to
$ 123
(1) Components may not sum to total due to rounding.
(2) Consolidated Segment Adjusted EBITDA is a Non-GAAP financial measure. Refer to “Use of Non-GAAP Financial Measures” above.
View original content to download multimedia:https://www.prnewswire.com/news-releases/harmonic-announces-fourth-quarter-and-fiscal-2024-results-302372571.html
SOURCE Harmonic Inc.
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Toronto firm fined $5,000 for unauthorized use of professional engineer’s seal
Published
23 minutes agoon
May 6, 2026By
TORONTO, May 6, 2026 /CNW/ – The Ontario Court of Justice has fined a Toronto firm $5,000 for applying a facsimile of a professional engineer’s seal to an engineering report without the engineer’s knowledge or consent.
In June 2023, 11951076 Canada Inc., operating as Studio Four, affixed an engineer’s seal to an engineering report and submitted it to the City of Hamilton in connection with a residential building project. The engineer whose seal was used did not authorize the use of the seal.
A complaint was made to Professional Engineers Ontario (PEO), which investigated and laid charges under the Professional Engineers Act (PEA).
On April 24, 2026, Studio Four pleaded guilty to one count of breaching section 40(3)(b) of the PEA. The firm’s two directors, Salim Afroz and Ashweek Chhabra, also pleaded guilty to breaching section 40(5) of the Act in connection with this conduct.
Studio Four was ordered to pay a $5,000 fine. The two directors each received suspended sentences.
As the regulator of professional engineering in Ontario, PEO reminds the public that the unauthorized use or forgery of a professional engineer’s seal on construction or design drawings is a quasi-criminal offence under the PEA. Such conduct may also result in criminal charges under the Criminal Code of Canada.
PEO administers the Professional Engineers Act to serve and protect the public interest by licensing Ontario’s more than 98,000 professional engineers and engineering firms. Professional engineers can be identified by the “P.Eng.” designation following their names.
Members of the public can verify a professional engineer or engineering firm by searching PEO’s public directories at peo.on.ca/directory. Concerns about unlicensed individuals or unauthorized firms may be reported through PEO’s enforcement hotline at 416-840-1444, 1-800-339-3716 ext. 1444, or enforcement@peo.on.ca.
SOURCE Professional Engineers Ontario
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Tell a Friend, Save on Travel! EF World Journeys Launches Cross-Brand Referral Program That Rewards Travelers to Inspire the People in Their Lives to Tour the Globe
Published
23 minutes agoon
May 6, 2026By
New benefit allows travelers to unlock savings on future trips by introducing friends and family to EF Go Ahead Tours, EF Ultimate Break, and EF Adventures
CAMBRIDGE, Mass., May 6, 2026 /PRNewswire/ — EF World Journeys, a leader in guided, experiential travel for adults from Gen Z to Baby Boomers, today announced the launch of a new referral program, a travel rewards benefit that can be redeemed across EF Go Ahead Tours, EF Ultimate Break, and EF Adventures.
Under the new program, travelers will receive $100 in travel credit for every friend who books a trip using their referral, with every fifth referral earning you $500 and no cap on total rewards earned. In short, the more friends or family who book from your referral, the more you save on your next trip.
Each year, guided trips across EF World Journeys’ portfolio bring travelers together through shared experiences that extend far beyond the journey itself. Many of those travelers continue to engage with the people they meet on tour, often exchanging photos, stories, and future travel inspiration well after returning home. The new referral program builds on the natural desire to share those experiences, offering travelers easy ways to connect and invite friends, family members, and fellow adventurers to experience a guided group tour for themselves.
“At EF, we’ve always believed that one of the most powerful parts of travel is the connections and communities we create along the way,” said Heidi Durflinger, CEO of EF World Journeys USA. “This referral program makes that even easier, giving our travelers a way to bring friends and family into the experience while continuing to grow a global community of people who choose to explore the world together.”
How it works: Give $100. Get $100.
Refer a friend: Any traveler who has taken a trip with or is currently booked on tour with EF Go Ahead Tours, EF Ultimate Break, or EF Adventures can now share a personal referral link via email, text, social media, or their respective EF World Journeys mobile app. Friends must be new to EF World Journeys, 18 or older, and have a valid email address to qualify.Both travelers earn $100: When the referred traveler books, both receive $100 in travel credit. Rewards are issued 60 days after booking confirmation, and referrals must book within six months.Earn $500 on every fifth referral: Referring travelers receive $500 for every fifth successful referral. There is no limit to how many referrals can be made, and rewards NEVER expire.
To celebrate the launch of the new referral program, EF Go Ahead Tours is offering an additional limited-time incentive. For the month of May 2026, travelers who refer a friend that books an EF Go Ahead Tours trip will receive an extra $100 referral reward on top of the standard program credit. The promotional bonus applies exclusively to EF Go Ahead Tours bookings and is available for a limited time.
One program. Three brands. Built for every kind of traveler.
EF World Journeys’ referral benefits are available when booking across its entire portfolio of guided, experiential travel companies, allowing travelers to earn and share rewards regardless of which tour operator they or their friends or family choose.
EF Go Ahead Tours offers curated guided travel for adults of all ages, including multi-generational travel groups and private or customized group tours.EF Ultimate Break serves travelers ages 18–35 with social, immersive itineraries.EF Adventures provides hiking, biking, and multi-adventure trips for active adults with a focus on lifelong learning, wellness and community.
Because the referral program spans all three tour operators at EF World Journeys, credits can move naturally within families and friend networks whose travel styles differ.
For example, a traveler who just had a life-changing trip on EF Go Ahead Tours’ A Week in Greece can refer her college-aged daughter to EF Ultimate Break’s Europe’s Icons: London, Paris & Rome and both receive $100 towards their next tour. She can then refer her basketball coach who is a hiking enthusiast to EF Adventure’s Italy Hiking: The Dolomites — and earn again.
This cross brand traveler benefit ensures that no matter how or where someone chooses to book travel across EF Go Ahead Tours, EF Ultimate Break, or EF Adventures – the rewards follow.
For EF Go Ahead Tours, please visit: https://www.goaheadtours.com/about/referrals
For EF Ultimate Break, please visit: https://www.efultimatebreak.com/traveling-with-us/refer-a-friend
For EF Adventures, please visit: https://www.efadventures.com/about/referrals-program
About EF World Journeys
EF World Journeys is a leader in guided, experiential travel. We connect cultures, communities, and people through guided, group travel with leading tour operator brands like EF Ultimate Break (adults 18-35), EF Go Ahead Tours (adults 35+), and our newest brand, EF Adventures, focused on adventure tours for the active traveler in you. EF World Journeys is part of EF Education First. For over 60 years, EF has planned guided tours with a focus on education and cultural immersion. EF offers travelers 24/7 global support, affordable payment plans, and supports tours in more than 400 destinations worldwide. Since 1965, EF has been committed to opening the world through education. At EF World Journeys, we do just that, helping people of all ages experience the magic of travel, connecting travelers with new places, cultures, and, best of all, a diverse community of people excited to explore the world.
About EF Go Ahead Tours
EF Go Ahead Tours offers more than 200 guided trips across six continents. Each carefully planned, expertly led tour makes it easy for curious travelers of all ages to get to the heart of a destination. With a maximum group size well below the industry average, each trip has the perfect balance of planned sightseeing and free time to explore.
EF Go Ahead Tours is a tour operator brand within EF World Journeys, one of North America’s leading guided, experiential travel companies.
Join EF Go Ahead Tours’ affiliate program, supported by AWIN and earn commissions on booked tours.
About EF Ultimate Break
EF Ultimate Break is the best way to experience the world for anyone 18-35. With over 175 trips, we handle logistics for everything that makes travel a great experience from accommodations to flights to amazing tour directors to memory-making excursions. Our affordable interest-free payment plans make international travel possible for every traveler. EF Ultimate Break is part of EF World Journeys, a leader in guided, experiential travel with tour operator brands that also include EF Go Ahead Tours (adults 35+) and EF Adventures (all ages, 14+ with adult supervision).
Are you an influencer or creator who wants to lead tours with your growing audience? Earn commissions on each booking by joining our influencer-hosted tour program.
Media partners can now participate in EF Ultimate Break’s affiliate marketing program and earn commissions for tour bookings. Click here to learn more.
About EF Adventures
EF Adventures is an education-based adventure travel company offering 40+ guided tours across 25 countries and 5 continents. Launched in September 2024 as part of the EF World Journeys family of experiential travel brands, EF Adventures builds on more than 30 years of EF’s global expertise in educational and cultural immersion.
Each small-group tour blends active exploration with authentic learning, inviting travelers to engage with local traditions, communities, and ecosystems through guided experiences like hiking, biking, and multi-adventure activities such as kayaking, yoga, ziplining, and more. Designed for varied fitness levels and age groups, the EF Adventures experience combines adventure-based activity with hands-on cultural discovery that transforms how people see the world.
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Technology
NEO Battery Partners with Highest-Ranking ROK Army’s Capital Defense Command for Defense Drone & Robotics Batteries
Published
23 minutes agoon
May 6, 2026By
Defense technology partnership with Republic of Korea (“ROK) Army’s Capital Defense Command (“CDC”), one of the highest-ranking command units responsible for securing the Presidential Office, the capital and key national infrastructureFocuses on battery supply and integration within CDC defense drone and robotics units, featuring specialized drone training and technical battery advisoryLeverages the CDC’s decision-making authority to accelerate the adoption of Korea-made battery technology across broader national defense and military units
TORONTO, May 6, 2026 /CNW/ – NEO Battery Materials Ltd. (“NEO” or the “Company”) (TSXV: NBM) (OTC: NBMFF), a low-cost, silicon-enhanced battery developer that enables longer-running, rapid-charging batteries for drones, robotics, and physical AI, is pleased to announce it has entered into a significant defense partnership agreement (the “Agreement”) with the Republic of Korea (“ROK”) Army’s Capital Defense Command (CDC) – a direct reporting unit to the President of South Korea and the Joint Chiefs of Staff. Stationed in Seoul and known as the “Shield Unit”, the CDC is one of the highest-ranking national command units, responsible for protecting the Presidential Office (Blue House), the capital and key national infrastructure.
This partnership represents a strategic expansion into a higher command level within the ROK Army, operating directly under the Army Headquarters with significant decision-making and procurement authority. The Agreement builds on NEO’s momentum in its Korean Defense Integration Strategy (see previously announced partnerships with the 12th Infantry Division dated April 1, 2026, and the Capital Mechanized Infantry Division dated April 22, 2026), and serves as a critical milestone due to the CDC’s ability to advocate for the prompt implementation of non-Chinese battery solutions that meet stringent security clearance and performance requirements.
The Agreement will focus on the supply and deployment of high-performance, defense batteries within the CDC’s drone and robotics units to enhance operational runtime and energy efficiency. Furthermore along with Korean drone partners, NEO will provide specialized drone training and technical battery advisory to support CDC’s personnel, all of whom are required to be certified in drone operations. This Agreement followed a successful live demonstration of NEO’s high-energy drone batteries held at the CDC’s parade ground on April 30, 2026.
Lieutenant General Changjoon Eo, Commander of the Capital Defense Command, expressed, “The CDC was highly impressed with the drone flight time performance exhibited by NEO’s high-performance batteries compared to commercial Chinese products. As the ROK Army and its units initiate the transition towards a Korea-made supply chain, NEO Battery will act as an integral partner for the CDC and its sub-units to ensure traceability and performance for defense batteries in our drone and robotics platforms.”
“Securing this partnership with a high-ranking command unit such as the CDC further validates the effectiveness of NEO’s battery technology,” stated Spencer Huh, President & CEO of NEO. “As the CDC is a heavy consumer of drone technology and requires high-performance, non-Chinese components to ensure national security, NEO’s in-country presence, along with our robust performance data and wide technology offering, aptly positions us to meet stringent scopes of work for the highest levels of the ROK military.”
About the ROK Army’s Capital Defense Command
Operating under the name “Shield Unit” or Chungjeongdae, the ROK Army’s Capital Defense Command is one of the highest-ranking, corps-level military organizations within the Republic of Korea’s Armed Forces and Operations Command. The CDC is primarily responsible for defending the Presidential Office, the capital, the Ministry of National Defense facilities, major government buildings, and key national infrastructure. The Command exercises several subordinate units, including the 1st Security Group, the 1st Air Defense Brigade, the CDC Military Police Group, and the 52nd and 56th Infantry Divisions.
About NEO Battery Materials Ltd.
NEO Battery Materials is a Canadian-South Korean battery technology company focused on developing and producing silicon-enhanced lithium-ion batteries in drones, robotics, physical AI, electric vehicles, and energy storage systems. With a patent-protected, low-cost silicon manufacturing process, NEO Battery enables longer-running and ultra-fast charging properties and provides end-to-end battery solutions from materials selection, cell architecture, and process optimization. The Company aims to be a globally-leading producer of high-performance lithium-ion batteries and materials, building a secure, robust battery supply chain for Western manufacturers. For more information, please visit the Company’s website at: https://www.neobatterymaterials.com/.
On Behalf of the Board of Directors
Spencer Huh
Director, President, and CEO
This news release includes certain forward-looking statements as well as management’s objectives, strategies, beliefs and intentions. All information contained herein that is not clearly historical in nature may constitute forward-looking information. Generally, such forward-looking information can be identified notably by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: volatile stock prices; the general global markets and economic conditions; the possibility of write-downs and impairments; the risk associated with the research and development of battery-related technologies; the risk associated with the effectiveness and feasibility of battery material, electrode, and cell technologies that have not yet been tested or proven on commercial scale or under real-world operating conditions; the risks associated with battery-related manufacturing process scale-up, including maintaining consistent material, component, and cell quality, production yields, and process reproducibility at a pilot, semi-commercial, or commercial scale; the risks associated with compatibility of existing battery chemistries, formulations, components, or designs; unforeseen risks associated with entering into and maintaining collaborations, joint ventures, partnerships, or commercial contracts with battery cell manufacturers, original equipment manufacturers, and various companies in the global battery and downstream end-user supply chain; the risks associated with the failure to develop and produce commercially viable battery-related products or that technical goals may not be achieved within expected timelines or budgets under a joint development or collaboration; the risks associated with the Company’s technologies and products not meeting performance requirements or customer specifications; the risks that prototype and pilot-scale products do not advance into commercially produced products or translate into commercial orders; the risk associated with battery components and cell purchase orders and offtake supply that may not be fulfilled in full, on time, or at all as actual revenue realization depends on delivery schedules, achievement of technical milestones, and customer acceptance and validation; the risk associated with losing official vendor registration or status with existing customers; counterparty risk upon delivery of prototype and commercial products; the risks associated with constructing, completing, securing, and financing pilot, semi-commercial, and commercial battery materials, components, and cell manufacturing facilities including the Canadian and South Korean facilities; the risks associated with potential delays or increased costs with site preparation, equipment procurement and installation, and facility commissioning; the risks associated with integrating silicon anode material production, electrode manufacturing, and cell assembly within a single operational cluster or the Company’s business portfolio; the risks associated with supply chain disruptions or cost fluctuations in raw materials, processing chemicals, and additive prices, impacting production costs and commercial viability; the risks associated with uninsurable risks arising during the course of research, development and production; competition faced by the Company in securing experienced personnel, contracts and sales, and financing; access to adequate infrastructure and resources to support battery materials, components, and cell research and development activities; the risks associated with changes in the technology regulatory regime governing the Company; the risks associated with the timely execution of the Company’s strategies and business plans; the risks associated with the lithium-ion battery industry and end-users’ demand and adoption of the Company’s silicon anode technology and battery products; market adoption and integration challenges, including the difficulty of incorporating silicon anodes and silicon battery products within battery manufacturers and OEMs’ systems; the risks associated with the various environmental and political regulations the Company is subject to; risks related to regulatory and permitting delays; the reliance on key personnel; liquidity risks; the risk of litigation; risk management; and other risk factors as identified in the Company’s recent Financial Statements and MD&A and in recent securities filings for the Company which are available on www.sedarplus.ca. Forward-looking information is based on assumptions management believes to be reasonable at the time such statements are made, including but not limited to, continued R&D and commercialization activities, no material adverse change in precursor, raw material, equipment, and relevant cost prices, development and commercialization plans to proceed in accordance with plans and such plans to achieve their stated expected outcomes, receipt of required regulatory approvals, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information. Such forward-looking information has been provided for the purpose of assisting investors in understanding the Company’s business, operations, research and development, and commercialization plans and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking information is made as of the date of this presentation, and the Company does not undertake to update such forward-looking information except in accordance with applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE NEO Battery Materials Ltd.
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