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Harmonic Announces Fourth Quarter and Fiscal 2024 Results

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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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AudioEye Reports Record Third Quarter 2026 Results

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Third quarter GAAP net income profitability of $1 million with expectation of increased profitability in the fourth quarter

Third quarter adjusted EBITDA up 58% year over year, and the fourth quarter expected to be up 56% year over year

Sequential annualized fourth quarter revenue growth expected of approximately 20%

TUCSON, Ariz., Oct 26, 2026 /PRNewswire/ — AudioEye, Inc. (Nasdaq: AEYE) (“AudioEye” or the “Company”), an industry-leading digital accessibility company, reported financial results for the third quarter ended September 30, 2026.

“Starting in 2025 we set an aspirational goal of producing 30-40% annual growth over three years in adjusted EBITDA and adjusted EPS. In the second year, we are on track to exceed this goal with approximately 50% year-over-year growth while also generating GAAP profitability in the third quarter. In Q3 gross margins also improved by over 550 basis points to 83%, with an adjusted gross margin of 88%. We are increasing adjusted EBITDA guidance, and we now expect to generate over $17 million of annualized adjusted EBITDA in the fourth quarter with continued GAAP profitability. We also expect to generate significant cash going forward and recently announced a stock repurchase program of $15 million, which represents 15% of the outstanding shares at current prices,” said Kelly Georgevich, Chief Executive Officer of AudioEye. “The business is strong, and we expect annualized sequential revenue growth of approximately 20% in the fourth quarter, contributing to increased operating leverage.”

Georgevich continued, “In October, we launched two new AI products, Agentic Audits and the AudioEye SDK MCP, both powered by AudioEye Intelligence, our proprietary dataset built from more than one million human reviews over a decade. We expect that these new tools will improve our industry leading legal protection rate even further.”

Third Quarter 2026 Financial Results

Total revenue increased 7% to a record $11.0M from $10.2M in the same prior year period. During 2026, the Company has reduced its emphasis on non-recurring revenue to focus on growing Annual Recurring Revenue (“ARR”), which grew 12% in the third quarter over the same prior year period.Gross profit increased to $9.1M (83% of total revenue) from $7.9M (77% of total revenue) in the same prior year period. The increase in gross profit was driven by higher sales and efficiencies including AI use.Adjusted gross margin was 88% in the third quarter of 2026 compared to 83% in the same prior year period. Adjusted gross margin is defined as gross margin adjusted for non-cash items such as stock-based compensation and depreciation and amortization expenses in cost of revenue.Operating expenses were $7.8M, a decrease of 5% from the comparable prior year period. The decrease was primarily due to lower sales and marketing expenses as well as reduced research and development expenses driven by AI efficiencies.Net income was $1.0M, or $0.08 per diluted share, compared to a net loss of $(0.6M), or $(0.04) per diluted share, in the same prior year period. The change was primarily due to higher gross profit and lower operating expenses.Adjusted EBITDA was $3.9M, and adjusted EPS was $0.30 per diluted share, compared to adjusted EBITDA of $2.5M and adjusted EPS of $0.19 per diluted share in the same prior year period. For Q3 2026, the adjusted EBITDA and adjusted EPS results reflect adjustments primarily for stock-based compensation expense, depreciation and amortization, litigation expense, and interest expense.ARR as of September 30, 2026 increased sequentially to $43.3M from $42.3M as of June 30, 2026.At September 30, 2026 the Company had $9.3M in cash and cash equivalents.

Other Updates

On October 20, 2026, AudioEye announced that its Board of Directors authorized the repurchase of up to $15 million of the Company’s outstanding common stock through October 18, 2027. The new program replaces the Company’s prior share repurchase authorization and is expected to be funded with working capital and cash from operations.On October 8, 2026, AudioEye launched two new AI products, Agentic Audits and the AudioEye SDK MCP, both powered by AudioEye Intelligence, the Company’s proprietary accessibility dataset built from over one million human reviews across more than 100,000 sites. Agentic Audits deploy an AI agent that navigates a site the way a person would and can find up to 50% more high-severity issues than automation alone, while the SDK MCP brings AudioEye Intelligence directly into the AI coding tools developers already use.On September 30, 2026, AudioEye published research showing that leading AI coding tools failed to build accessible websites, with 91% of the issues found rated medium or high severity.On September 24, 2026, AudioEye published research showing that AI agents completed up to 68% fewer tasks and used 43% more tokens on average on inaccessible websites, demonstrating that digital accessibility is the foundation for AI readiness.On August 27, 2026, AudioEye released UK findings from its 2026 Digital Accessibility Index, which scanned over 14,400 pages across 475 UK websites and found an average of 66 accessibility issues per page, with AI search increasingly routing users to less accessible interior pages.As of September 30, 2026, AudioEye had approximately 130,000 customers, up 7,000 year-over-year from September 30, 2025, driven by increases in both the Partner and Marketplace channel and Enterprise channel.

Financial Outlook
AudioEye expects revenue of between $11.4M and $11.6M for the fourth quarter of 2026, which is expected to result in revenue of between $43.6M and $43.8M for the full year 2026. The Company expects adjusted EBITDA of between $4.2M and $4.4M for the fourth quarter of 2026, which raises expected full year 2026 adjusted EBITDA to between $13.4M and $13.6M, representing approximately 50% year-over-year growth. The Company expects adjusted EPS of between $0.32 and $0.33 per share for the fourth quarter of 2026 and at least $1.04 per share for the full year 2026.

Conference Call Information
AudioEye management will hold a conference call today, October 26, 2026, at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results, followed by a question-and-answer period.

Date: Monday, October 26, 2026
Time: 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time)
U.S. dial-in number: 877-407-8289
International number: 201-689-8341
Webcast: Q326 Webcast Link

Please call the conference telephone number 5-10 minutes prior to the start time. If you have any difficulty connecting with the conference call, please contact Gateway Group at 949-574-3860.

The conference call will also be webcast live and available for replay via the investor relations section of the Company’s website. The audio recording will remain available via the investor relations section of the Company’s website for 90 days.

A telephonic replay of the conference call will also be available after 7:30 p.m. Eastern Time on the same day through November 9, 2026 via the following numbers:

Toll-free replay number: 877-660-6853
International replay number: 201-612-7415
Replay passcode: 13763375

Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

About AudioEye
AudioEye exists to ensure the digital future we build is accessible for people with disabilities and AI agents. AudioEye’s comprehensive solution for over 130,000 customers combines industry-leading AI automation technology with expert fixes informed by the disability community. This powerful combination delivers industry-leading protection against lawsuits and readiness for AI agents. With 25 US patents, AudioEye’s solution includes 24/7 accessibility monitoring, automated WCAG issue testing and fixes, expert testing, developer tools, and legal protection, empowering organizations to confidently create accessible digital experiences for all.

Forward-Looking Statements
All statements in this press release about AudioEye’s expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance are not historical facts and are “forward-looking statements” as that term is defined under the federal securities laws. Forward-looking statements are often, but not always, made through the use of words or phrases such as “believe”, “anticipate”, “should”, “confident”, “intend”, “plan”, “will”, “expects”, “estimates”, “projects”, “positioned”, “strategy”, “outlook” and similar words. You should read the statements that contain these types of words carefully. Such forward-looking statements contained herein include, but are not limited to, statements regarding future cash flows of the Company, anticipated contributions from new sales channels, long-term growth prospects, opportunities in the digital accessibility industry, our revenue, adjusted EBITDA, adjusted EPS and ARR guidance, and our expectation of investments in marketing and sales. These statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what is expressed or implied in such forward-looking statements, including the variability of AudioEye’s revenue and financial performance; sales channels and offerings; product development and technological changes; the acceptance of AudioEye’s products in the marketplace; the effectiveness of our integration efforts; competition; inherent uncertainties and costs associated with litigation; and general economic conditions. These and other risks are described more fully in AudioEye’s filings with the Securities and Exchange Commission. There may be events in the future that AudioEye is not able to predict accurately or over which AudioEye has no control. Forward-looking statements reflect management’s view as of the date of this press release, and AudioEye urges you not to place undue reliance on these forward-looking statements. AudioEye does not undertake any obligation to update such forward-looking statements to reflect events or uncertainties after the date hereof.

About Key Operating Metrics
We consider annual recurring revenue (“ARR”) as a key operating metric and a key indicator of our overall business. We also use ARR as one of the primary methods for planning and forecasting overall expectations and for evaluating, on at least a quarterly and annual basis, actual results against such expectations.

We manage customers through two primary channels, Enterprise and Partner and Marketplace. Enterprise channel consists of our larger customers and organizations, including those with non-platform custom websites, who generally engage directly with AudioEye sales personnel for custom pricing and solutions. This channel also includes federal, state and local government agencies. The Partner and Marketplace channel consists of our CMS partners, platform & agency partners, authorized resellers and our marketplace. This channel serves small and medium sized businesses who are on a partner or reseller’s web-hosting platform or who purchase an AudioEye solution from our marketplace.

We define ARR as the sum of (i) for our Enterprise channel, the total of the annualized recurring fee at the date of determination under each active contract, plus (ii) for our Partner and Marketplace channel, the annual or monthly recurring fee for all active customers at the date of determination, in each case, assuming no changes to the subscription, multiplied by 12 if applicable. Recurring fees are defined as revenues expected to be generated from services typically offered as a subscription service or annual service offering such as our automation and platform, periodic auditing, human-assisted technological fixes, legal support and professional service offerings and other services that reoccur on a multi-year contract. This determination includes both annual and monthly contracts for recurring products. Some of our contracts are terminable prior to the expected term, which may impact future ARR. ARR excludes non-recurring fees, which are defined as revenue expected to be generated from services typically not offered as a subscription service or annual service offering such as our PDF remediation services business, one-time website and mobile application reports, and other miscellaneous services that are offered as non-subscription services or are expected to be one-time in nature.

Use of Non-GAAP Financial Measures
From time to time, we review adjusted financial measures that assist us in comparing our operating performance consistently over time, as such measures remove the impact of certain items, as applicable, such as our capital structure (primarily interest charges), certain non-cash items, including stock compensation and depreciation and amortization expense, and other expenses that do not relate to our core operations, including significant transaction and litigation-related expenses and other costs that are expected to be non-recurring. In order to provide investors with greater insight and allow for a more comprehensive understanding of the information used in our financial and operational decision-making, the Company has supplemented the consolidated financial statements presented on a GAAP basis in this press release with the following non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings (loss) per diluted share (adjusted EPS) and Adjusted gross margin.

These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of Company results as reported under GAAP. The Company compensates for such limitations by relying primarily on our GAAP results and using non-GAAP financial measures only as supplemental data. We also provide a reconciliation of non-GAAP to GAAP measures used. Investors are encouraged to carefully review this reconciliation. In addition, because these non-GAAP measures are not measures of financial performance under GAAP and are susceptible to varying calculations, these measures, as defined by us, may differ from and may not be comparable to similarly titled measures used by other companies.

Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Earnings (Loss) per Diluted Share
We define: (i) Adjusted EBITDA as net income (loss), plus interest expense, plus depreciation and amortization expense, plus stock-based compensation expense, less change in fair value of contingent consideration, plus certain litigation expense, plus certain acquisition expense, plus certain severance expense, plus loss on disposal or impairment of long-lived assets, plus loss on extinguishment of debt, and plus lost deposit on alternative financing; (ii) Adjusted EBITDA margin as Adjusted EBITDA as a percentage of GAAP revenue; and (iii) Adjusted earnings (loss) per diluted share (EPS) as net income (loss) per diluted common share, plus interest expense, plus depreciation and amortization expense, plus stock-based compensation expense, less change in fair value of contingent consideration, plus certain litigation expense, plus certain acquisition expense, plus certain severance expense, plus loss on disposal or impairment of long-lived assets, plus loss on extinguishment of debt, and plus lost deposit on alternative financing, each on a per share basis. Adjusted earnings per diluted share includes incremental shares in the share count that are considered anti-dilutive in a GAAP net loss position.

Adjusted Gross Margin
We define Adjusted gross margin as gross profit, plus stock-based compensation expense and depreciation and amortization expense allocated to cost of revenue, expressed as a percentage of total revenue.

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings (loss) per diluted share, and Adjusted gross margin are used to facilitate a comparison of our operating performance on a consistent basis from period to period and provide for a more complete understanding of factors and trends affecting our business than GAAP measures alone. All of the items adjusted in these calculations are either recurring non-cash items or items that management does not consider in assessing our ongoing operating performance. In the case of the non-cash items, such as stock-based compensation expense and valuation adjustments to assets and liabilities, management believes that investors may find it useful to assess our comparative operating performance because the measures without such items are expected to be less susceptible to variances in actual performance resulting from expenses that do not relate to our core operations and are more reflective of other factors that affect operating performance. In the case of items that do not relate to our core operations, management believes that investors may find it useful to assess our operating performance if the measures are presented without these items because their financial impact does not reflect ongoing operating performance.

Adjusted EBITDA is not a measure of liquidity under GAAP, or otherwise, and is not an alternative to cash flow from continuing operating activities, despite the advantages regarding the use and analysis of these measures as mentioned above. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted earnings (loss) per diluted share, and Adjusted gross margin, as disclosed in this press release, have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP; nor are these measures intended to be measures of liquidity or free cash flow.

To properly and prudently evaluate our business, we encourage readers to review the consolidated GAAP financial statements included in this press release and not rely on any single financial measure to evaluate our business. Reconciliations of Adjusted EBITDA to net income (loss), the most directly comparable GAAP-based measure, Adjusted earnings (loss) per diluted share to net income (loss) per diluted share, the most directly comparable GAAP-based measure, and Adjusted gross margin to gross margin, the most directly comparable GAAP-based measure are provided in tables later in this press release. We strongly urge readers to review these reconciliations, along with the financial statements included in this press release.

Forward-Looking Non-GAAP Financial Measures
This press release and statements made in our conference call today also include the forward-looking non-GAAP financial measures of adjusted EBITDA, adjusted EBITDA margin, adjusted EPS and free cash flow guidance for the fourth quarter and full year 2026. We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. We have not provided quantitative reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because the excluded items are not available on a prospective basis without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. It is probable that these forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures.

Investor Contact:
Tom Colton
Gateway Group, Inc.
AEYE@gateway-grp.com
949-574-3860

AUDIOEYE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

Three months ended September 30, 

Nine months ended September 30, 

(in thousands, except per share data)

2026

2025

2026

2025

Revenue

$

10,963

$

10,227

$

32,232

$

29,817

Cost of revenue

1,871

2,312

6,439

6,545

Gross profit

9,092

7,915

25,793

23,272

Operating expenses:

Selling and marketing

3,304

3,649

10,806

11,169

Research and development

889

1,118

2,848

3,471

General and administrative

3,644

3,506

13,365

10,998

Change in fair value of contingent consideration

—

(40)

—

(1,350)

Total operating expenses

7,837

8,233

27,019

24,288

Operating income (loss)

1,255

(318)

(1,226)

(1,016)

Other expense:

Interest expense, net

(265)

(236)

(763)

(709)

Loss on extinguishment of debt

—

—

—

(300)

Total other expense

(265)

(236)

(763)

(1,009)

Net income (loss)

$

990

$

(554)

$

(1,989)

$

(2,025)

Net income (loss) per common share – basic

$

0.08

$

(0.04)

$

(0.16)

$

(0.16)

Net income (loss) per common share – diluted

$

0.08

$

(0.04)

$

(0.16)

$

(0.16)

Weighted average common shares outstanding – basic

12,583

12,414

12,512

12,417

Weighted average common shares outstanding – diluted     

12,971

12,414

12,512

12,417

 

AUDIOEYE, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

September 30, 

December 31, 

(in thousands, except per share data)

2026

2025

ASSETS

Current assets:

Cash and cash equivalents

$

9,327

$

5,288

Accounts receivable, net

5,772

6,557

Prepaid expenses and other current assets

878

777

Total current assets

15,977

12,622

Property and equipment, net

105

146

Right of use assets

297

168

Intangible assets, net

10,826

12,515

Goodwill

6,682

6,682

Other

41

97

Total assets

$

33,928

$

32,230

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued expenses

$

3,442

$

4,851

Operating lease liabilities

57

218

Deferred revenue

8,350

8,619

Contingent consideration

300

225

Term loan, current

850

503

Total current liabilities

12,999

14,416

Long term liabilities:

Term loan, net

15,380

12,479

Operating lease liabilities

254

—

Deferred revenue

81

5

Contingent consideration, long term

—

300

Other

138

226

Total liabilities

28,852

27,426

Stockholders’ equity:

Preferred stock, $0.00001 par value, 10,000 shares authorized

Common stock, $0.00001 par value, 50,000 shares authorized, 12,676 and 12,383 shares     
issued and outstanding as of September 30, 2026 and December 31, 2025, respectively

1

1

Additional paid-in capital

110,937

108,201

Accumulated deficit

(105,862)

(103,398)

Total stockholders’ equity

5,076

4,804

Total liabilities and stockholders’ equity

$

33,928

$

32,230

 

AUDIOEYE, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

(unaudited)

Three months ended September 30, 

Nine months ended September 30, 

(in thousands, except per share data)

2026

2025

2026

2025

Adjusted EBITDA Reconciliation

Net income (loss) (GAAP)

$

990

$

(554)

$

(1,989)

$

(2,025)

Change in fair value of contingent consideration

—

(40)

—

(1,350)

Interest expense, net

265

236

763

709

Stock-based compensation expense

1,191

1,281

3,678

3,693

Acquisition expense (1)

21

—

123

33

Litigation expense (2)

492

607

3,398

1,936

Severance expense (3)

—

—

344

304

Lost deposit on alternative financing

—

—

—

50

Depreciation and amortization

927

918

2,901

2,581

Loss on disposal or impairment of long-lived assets

—

5

5

61

Loss on extinguishment of debt

—

—

—

300

Adjusted EBITDA

$

3,886

$

2,453

$

9,223

$

6,292

GAAP Net income (loss) as a percent of revenue

9

%

(5)

%

(6)

%

(7)

%

Adjusted EBITDA margin (4)

35

%

24

%

29

%

21

%

Adjusted Earnings per Diluted Share Reconciliation

Net income (loss) per common share (GAAP) — diluted     

$

0.08

$

(0.04)

$

(0.16)

$

(0.16)

Change in fair value of contingent consideration

—

—

—

(0.10)

Interest expense, net

0.02

0.02

0.06

0.06

Stock-based compensation expense

0.09

0.10

0.29

0.29

Acquisition expense (1)

—

—

0.01

—

Litigation expense (2)

0.04

0.05

0.26

0.16

Severance expense (3)

—

—

0.03

0.02

Lost deposit on alternative financing

—

—

—

—

Depreciation and amortization

0.07

0.07

0.23

0.20

Loss on disposal or impairment of long-lived assets

—

—

—

—

Loss on extinguishment of debt

—

—

—

0.02

Adjusted earnings per diluted share (5)

$

0.30

$

0.19

$

0.72

$

0.50

Diluted weighted average shares (GAAP)

12,971

12,414

12,512

12,417

Includable incremental shares (Non-GAAP) (5)

—

229

348

174

Adjusted diluted shares (Non-GAAP)

12,971

12,643

12,860

12,591

(1)

Represents professional fees incurred in connection with acquisitions and dissolutions.

(2)

Represents legal expenses related primarily to non-recurring litigation.

(3)

Represents severance expense for an employee from a previously acquired business and for employees impacted by a reduction in force in 2026.

(4)

Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of GAAP revenue.

(5)

Adjusted earnings per adjusted diluted share for our common stock is computed using the treasury stock method.

 

AUDIOEYE, INC.

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

(unaudited)

Three months ended September 30, 

Nine months ended September 30, 

(in thousands)

2026

2025

2026

2025

Adjusted Gross Margin Reconciliation

Revenue

$

10,963

$

10,227

$

32,232

$

29,817

Less: Cost of revenue

1,871

2,312

6,439

6,545

Gross profit (GAAP)

$

9,092

$

7,915

$

25,793

$

23,272

Gross margin (GAAP)

83

%

77

%

80

%

78

%

Add expenses included in cost of revenue:     

Depreciation and amortization

$

466

$

494

$

1,458

$

1,432

Stock-based compensation

56

61

202

198

Adjusted gross profit (non-GAAP)

$

9,614

$

8,470

$

27,453

$

24,902

Adjusted gross margin (non-GAAP)

88

%

83

%

85

%

84

%

 

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Lingbo to Showcase Intelligent Electric Drive Systems and Powertrain Solutions at EICMA 2026

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MILAN, Oct. 26, 2026 /PRNewswire/ — Wuxi Lingbo Electronic Technology Co., Ltd. (Lingbo), a China-based developer and manufacturer of intelligent electric drive systems, will participate in EICMA 2026, held November 3–8, 2026, at Fiera Milano Rho, Italy. At Hall 18, Booth E53, Lingbo will showcase its motor control technologies and integrated powertrain solutions to European manufacturers, distributors and industry partners.

Lingbo develops motor controllers, electric motors, battery management systems (BMS) and integrated powertrain solutions for electric two-wheelers and light electric vehicles. Combining in-house hardware and software development, the company provides electric drive solutions for manufacturers with different vehicle configurations and performance requirements. Built around proprietary field-oriented control (FOC) algorithms, Lingbo’s motor controllers are designed for smooth torque delivery, responsive acceleration and low operating noise. The solutions support regenerative braking, closed-loop torque control and CAN bus communication, enabling integration across electric motorcycles, off-road electric motorcycles, light electric vehicles and electric three-wheelers.

Beyond individual components, Lingbo offers integrated hardware and software solutions, supporting customized powertrain development and vehicle integration. Its in-house R&D capabilities and experience serving international two-wheeler brands support collaboration with manufacturers seeking electric drive technologies.

Through EICMA 2026, Lingbo aims to strengthen its presence in Europe and connect with OEMs, distributors and technology partners to explore product development, technical collaboration and regional distribution opportunities. “Europe is an important market for Lingbo. EICMA provides an opportunity to introduce our technologies and connect with manufacturers seeking reliable electric drive solutions,” said Julian Xu, Senior Overseas Marketing Manager at Lingbo.

About Lingbo

Wuxi Lingbo Electronic Technology Co., Ltd. focuses on the research, development and manufacturing of core components for new energy transportation vehicles. Its main products include intelligent controllers (PDU/VCU), brushless DC motors (BLDCM), permanent magnet synchronous motors (PMSM), BMS, and instruments, which are widely used across applications including electric two-wheelers, shared mobility, water transportation, and special vehicles. The company integrated intelligent safety functions such as TCS and steep slope descent control.

Industry professionals are invited to visit Hall 18, Booth E53, from November 3–8, 2026, to explore Lingbo’s technologies and discuss potential partnerships.

Website :  https://www.lbelectronic.com/

Business Inquiries: julianxu@lingbomc.com

Media Contact: maozenan@lingbomc.com 

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Robo.ai Inc. Announces Results of Extraordinary General Meeting

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DUBAI, UAE, Oct. 26, 2026 /PRNewswire/ — Robo.ai Inc. (Nasdaq: AIIO) (the “Company”), a UAE-based, U.S.-listed company, today announced that each of the proposed resolutions submitted for shareholder approval as set forth in the notice of extraordinary general meeting of shareholders dated October 16, 2026 has been adopted at its extraordinary general meeting of shareholders held in Dubai, United Arab Emirates today.

After the adoption of the proposed resolutions, the seventh amended and restated memorandum and articles of association are adopted. Following the effectiveness of the share consolidation and increase in authorized share capital on November 6, 2026, (i) the Company’s authorized share capital will be US$19,250,000 divided into 385,000,000 shares, comprising 35,000,000 Class A ordinary shares with a par value of US$0.05 per share, and 350,000,000 Class B ordinary shares with a par value of US$0.05 per share, and (ii) the Company’s issued and outstanding shares will comprise 552,700 Class A ordinary shares with a par value of US$0.05 and 8,894,680 Class B ordinary shares with a par value of US$0.05. All fractional shares resulting from the reverse stock split will be disregarded and not be issued to the shareholders of the Company but all such fractional shares will be aggregated and, if possible, sold and distributed to the underlying shareholders as per latest decision of the board of directors of the Company.

About Robo.ai Inc.

Robo.ai Inc. (Nasdaq: AIIO), headquartered in Dubai, United Arab Emirates, is a Nasdaq-listed technology group building intelligent infrastructure across four platforms: artificial intelligence; robotics and smart mobility; advanced manufacturing; and digital assets and capital. Its industrial group, Alif Holding, is dedicated to building intelligent industries through the development, integration and manufacturing of AI systems, serving government, public sector and mission-critical domains. Through its subsidiary Neurovia AI, the Company develops AI software and visual data infrastructure. Quantum Core Capital (“QC Capital”), its AI-powered deep-tech holding and venture-building platform, incubates, invests in and operates businesses across artificial intelligence, robotics, digital infrastructure and the next-generation digital economy.

Forward-Looking Statements

This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “targets,” “likely to,” “challenges,” and similar statements. Robo.ai may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including statements about Robo.ai’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Robo.ai’s strategies, future business development, and financial condition and results of operations; Robo.ai’s limited operating history in its current business; Robo.ai’s ability to generate positive cash flow and profits; Robo.ai’s ability to compete successfully; Robo.ai’s ability to build its brand and withstand negative publicity; and changes in customer demand and government incentives, subsidies, or other favorable government policies. Further information regarding these and other risks is included in Robo.ai’s filings with the SEC. All information provided in this press release is as of the date of this press release, and Robo.ai does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

For investors:
Robo.ai Inc. Investor Relations
E-mail: ir@roboai.group 

For media:
Robo.ai Inc. Corporate Communications
E-mail: pr@roboai.group 

Website: www.roboai.group 

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