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What changed in HARMONIC INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of HARMONIC INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+295 added−308 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-14)

Top changes in HARMONIC INC.'s 2025 10-K

295 paragraphs added · 308 removed · 215 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

36 edited+13 added−31 removed27 unchanged
Biggest changeIndustry Overview and Market Trends Broadband Business Industry Challenges Broadband operators continue to face challenges from the rapid growth of demand for broadband bandwidth in their networks, driven primarily by: • more users with more connected devices and applications; • bundled digital video, voice and high-speed data services; • bandwidth-intensive Video-on-demand (VOD) and streaming video services, and interactive cloud applications; • work-from-home (WFH) and remote education demands for high-quality video conferencing; and • Internet-of-Things (IoT) devices that contribute to continuous data generation and transmission.
Biggest changeFor information on discontinued operations, refer to Note 3 of our consolidated financial statements under the caption “Discontinued Operations.” Industry Overview and Market Trends Industry Challenges Broadband operators continue to face challenges from the rapid growth of demand for broadband bandwidth and increased reliability in their networks, driven primarily by: • more users with more connected devices and applications; • bundled digital video, voice and high-speed data services; • bandwidth-intensive Video-on-demand (VOD) and streaming video services, interactive cloud applications and AI-driven bandwidth usage; • work-from-home (WFH) and remote education demands for high-quality video conferencing; • Internet-of-Things (IoT) devices that contribute to continuous data generation and transmission; and 5 Table of Contents • quality of experience demands for real-time video conferencing, gaming and artificial intelligence (AI) applications.
Additionally, our open optical network unit (ONU) approach, which supports a growing list of ONUs, fosters an open ecosystem that benefits Telcos. Our Broadband business strategy is focused on providing our customers with software-based solutions, on a centralized, distributed access or hybrid architecture, to enable and support these technology and industry trends.
Additionally, our open optical network unit (ONU) approach, which supports a growing list of ONUs, fosters an open ecosystem that benefits telcos. Our business strategy is focused on providing our customers with software-based access solutions, on a centralized, distributed access or hybrid architecture, to enable and support these technology and industry trends.
Except as expressly set forth in this Annual Report on Form 10-K, the contents of our web site are not incorporated by reference into, or otherwise to be regarded as part of, this report or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 10 Table of Contents
Except as expressly set forth in this Annual Report on Form 10-K, the contents of our web site are not incorporated by reference into, or otherwise to be regarded as part of, this report or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 11 Table of Contents
In 2003, we entered into an agreement with Plexus Services Corp. (“Plexus”) to act as our primary contract manufacturer. Plexus accounts for the majority of the products we purchase from our contract manufacturers. This agreement has automatic annual renewals, unless prior notice for nonrenewal is given, and has been automatically renewed for a term expiring in October 2025.
In 2003, we entered into an agreement with Plexus Services Corp. (“Plexus”) to act as our primary contract manufacturer. Plexus accounts for the majority of the products we purchase from our contract manufacturers. This agreement has automatic annual renewals, unless prior notice for nonrenewal is given, and has been automatically renewed for a term expiring in October 2026.
Backlog We schedule production of our products and solutions based upon our backlog, open contracts, informal commitments from customers and sales projections. Our backlog consists of unfilled firm purchase orders and contracts by our customers which have not been completed. Approximately 57% of our backlog and deferred revenue is projected to be converted to revenue within a rolling one-year period.
Backlog We schedule production of our products and solutions based upon our backlog, open contracts, informal commitments from customers and sales projections. Our backlog consists of unfilled firm purchase orders and contracts by our customers which have not been completed. Approximately 53% of our backlog and deferred revenue is projected to be converted to revenue within a rolling one-year period.
We do not generally maintain long-term agreements with any of our contract manufacturers. Many components, subassemblies and modules necessary for the manufacture or integration of our products are obtained from a sole supplier or a limited group of suppliers.
We do not generally maintain long-term agreements with any of our contract manufacturers beyond Plexus. Many components, subassemblies and modules necessary for the manufacture or integration of our products are obtained from a sole supplier or a limited group of suppliers.
Any such litigation could result in substantial costs and diversion of resources, including management time, and could negatively affect our business, operating results, financial position and cash flows. 8 Table of Contents In order to successfully develop and market our products, we may be required to enter into technology development or licensing agreements with third parties.
Any such litigation could result in substantial costs and diversion of resources, including management time, and could negatively affect our business, operating results, financial position and cash flows. In order to successfully develop and market our products, we may be required to enter into technology development or licensing agreements with third parties.
A decrease in the number of relatively larger individual transactions in which we are involved in any quarter could adversely affect our operating results for that quarter. 7 Table of Contents Sales and Marketing In the United States and internationally, we sell our products through our own direct sales force, as well as through independent resellers and systems integrators.
A decrease in the number of relatively larger individual transactions in which we are involved in any quarter could adversely affect our operating results for that quarter. Sales and Marketing In the United States and internationally, we sell our products through our own direct sales force, as well as through independent resellers and systems integrators.
Our direct sales team is organized by business segment, and geographically and by major customers and markets to support customer requirements. Our principal sales offices outside of the United States are located in Europe and Asia.
Our direct sales team is organized geographically and by major customers and markets to support customer requirements. Our principal sales offices outside of the United States are located in Europe and Asia.
The principal competitive factors in these markets include product performance, functionality and features, reliability, pricing, breadth of product offerings, brand recognition and awareness, sales and distribution capabilities, technical operations, support and services, and customer relationships with our customers. We believe that we compete favorably in each of these categories.
The principal competitive factors in this market include product performance, functionality and features, reliability, pricing, breadth of product offerings, brand recognition and awareness, sales and distribution capabilities, technical operations, support and services, and customer relationships with our customers. We believe that we compete favorably in each of these categories.
Our product management organization for each business segment develops strategies for product lines and markets and, in conjunction with our sales force, identifies the evolving technical and application needs of customers so that our product development resources can be most effectively and efficiently deployed to meet anticipated product requirements.
Our product management organization develops strategies for product lines and markets and, in conjunction with our sales force, identifies the evolving technical and application needs of customers so that our product development resources can be most effectively and efficiently deployed to meet anticipated product requirements.
Our direct sales force and resellers for each business segment are supported by highly trained technical staff, which includes application engineers who work closely with our customers to develop technical proposals and design systems to optimize system performance and economic benefits for our customers.
Our direct sales force and resellers are supported by highly trained technical staff, which includes application engineers who work closely with our customers to develop technical proposals and design systems to optimize system performance and economic benefits for our customers.
Technology Trends • DOCSIS . We believe the cable industry will continue to deploy the DOCSIS 3.1 standard, which enables high bandwidth data transfer over existing broadband infrastructure, and we expect accelerating adoption and deployment of the next-generation DOCSIS 4.0 standard, which has begun in certain markets. 4 Table of Contents • Virtualization .
We believe the cable industry will continue to deploy the DOCSIS 3.1 standard, which enables high bandwidth data transfer over existing broadband infrastructure, and we expect accelerating adoption and deployment of the next-generation DOCSIS 4.0 standard, which has begun in certain markets. • Virtualization.
We cannot assure you that others will not develop technologies that are similar or superior to our technology, duplicate our technology or design around the patents that we own. In addition, effective patent, copyright and trade secret protection may be unavailable or limited in a territory in which we do business or may do business in the future.
We cannot provide assurance that others will not develop technologies that are similar or superior to our technology, duplicate our technology or design around our patents. In addition, effective patent, copyright and trade secret protection may be unavailable or limited in a territory in which we do business or may do business in the future.
Of those employees, 408 were located in the United States and Canada, and 832 employees were located outside of North America in 21 countries in Central and South America, the Middle East and Africa, Europe and the Asia Pacific region. From time to time, we also employ a number of temporary employees and consultants on a contract basis.
Of those employees, 195 were located in the United States and Canada, and 339 employees were located outside of North America in 17 countries in Central and South America, the Middle East and Africa, Europe and the Asia Pacific region. From time to time, we also employ a number of temporary employees and consultants on a contract basis.
With respect to our Broadband business segment, our major research and development efforts are focused on broadband access solutions, particularly the ongoing development of our centralized, distributed and hybrid cOS software-based broadband access solutions and converging fiber and DOCSIS capabilities on our cOS solution platform.
Our major research and development efforts are focused on broadband access solutions, particularly the ongoing development of our centralized, distributed and hybrid cOS software-based broadband access solutions and converging fiber and DOCSIS capabilities on our cOS solution platform.
As of December 31, 2024 and 2023, we had backlog, including deferred revenue, of $496.3 million and $653.2 million, respectively. Delivery schedules on such orders may be deferred or canceled for a number of reasons, including reductions in spending by our customers or changes in specific customer requirements.
As of December 31, 2025 and 2024, we had backlog, including deferred revenue, of $573.8 million and $332.3 million, respectively. Delivery schedules on such orders may be deferred or canceled for a number of reasons, including reductions in spending by our customers or changes in specific customer requirements.
In addition, the operation of network infrastructure is space, power and personnel intensive. Hardware-centric networks can also be expensive to update or replace. To remain competitive, especially in the face of heightened competition between cable service providers and telcos to deliver multi-gigabit and symmetric data rates, broadband operators need to significantly upgrade existing equipment and network technologies.
In addition, the operation of network infrastructure is space, power and personnel intensive. Hardware-centric networks can also be expensive to update or replace. To remain competitive, especially in the face of heightened competition for high-speed data (HSD) subscribers to deliver multi-gigabit and symmetric data rates, broadband operators need to significantly upgrade existing equipment and network technologies. Technology Trends • DOCSIS.
While we expend considerable efforts to qualify additional component sources, consolidation of suppliers in the industry and the small number of viable alternatives have limited the results of these efforts. We do not generally maintain long-term agreements with any of our suppliers.
While we expend considerable efforts to qualify additional component sources, consolidation of suppliers in the industry and the small number of viable alternatives have limited the results of these efforts.
Our employees in each of France and Spain are represented by labor unions and an employee works council. None of our other employees are represented by a labor union with respect to their employment with us. We have not experienced any work stoppages, and we consider our relations with our employees to be good.
Our employees in France are represented by labor unions and an employee works council. None of our other employees are represented by a labor union with respect to their employment with us.
Harmonic hardware products include our Oyster, Pebble, Ripple, and Shell DAA nodes, Reef and Wave PHY shelf products; and OLT modules and devices. We believe our cOS solution delivers unprecedented scalability, agility and cost savings, and enables our customers to migrate to multi-gigabit broadband capacity and the fast deployment of DOCSIS and FTTx data, video and voice services.
We believe our cOS solution delivers unprecedented scalability, agility and cost savings, and enables our customers to migrate to multi-gigabit broadband capacity and the fast deployment of DOCSIS and FTTx data, video and voice services.
We offer rewards and recognition programs, including spot awards to recognize employee contributions, patent incentive awards, and various functional recognition awards. We regularly conduct employee surveys to gauge employee engagement and satisfaction, and we use the views expressed in the surveys to influence our people strategy and policies.
We regularly conduct employee surveys to gauge employee engagement and satisfaction, and we use the views expressed in the surveys to influence our people strategy and policies.
Although we continue to seek to broaden our customer base by penetrating new markets and further expanding internationally, we expect to see continuing industry consolidation and customer concentration. During 2024, 2023 and 2022, Comcast accounted for 44%, 44% and 39% of our net revenue, respectively.
Although we continue to seek to broaden our customer base by penetrating new markets and further expanding internationally, we expect to see continuing industry consolidation and customer concentration. 7 Table of Contents During the fiscal year ended December 31, 2025, one customer accounted for 54% of our net revenue.
Intellectual Property As of December 31, 2024, we held 133 issued U.S. patents and 48 issued foreign patents and had 48 patent applications pending. Our issued patents are scheduled to expire between 2025 and 2043.
We do not generally maintain long-term agreements with any of our suppliers. 8 Table of Contents Intellectual Property As of December 31, 2025, we held 65 issued U.S. patents and seven issued foreign patents and had 39 patent applications pending. Our issued patents are scheduled to expire between 2030 and 2043.
We also provide an on-premise SaaS offering with our VOS Media Software solution for customers seeking to deploy a cloud-like architecture in a private data center. Technical Support and Professional Services We provide maintenance and support services to most of our customers under service level agreements that are generally renewed on an annual basis.
Technical Support and Professional Services We provide maintenance and support services to most of our customers under service level agreements that are generally renewed on an annual basis. We also provide consulting, implementation and integration services to our customers worldwide.
In addition, due to annual budget cycles at many of our customers, the amount of our backlog at any given time is not necessarily indicative of actual revenues for any succeeding period.
In addition, due to annual budget cycles at many of our customers, the amount of our backlog at any given time is not necessarily indicative of actual revenues for any succeeding period. 9 Table of Contents Competition The Broadband market in which we operate is extremely competitive and has been characterized by rapid technological change and declining average selling prices in the past.
Research and development expenses in 2024, 2023 and 2022 were approximately $121.0 million, $126.3 million and $120.3 million, respectively. Research and development expenses as a percentage of revenue in 2024, 2023 and 2022 were approximately 18%, 21% and 19%, respectively. Our internal research and development activities are conducted primarily in the United States, France, Israel, Hong Kong, Canada and India.
Research and development expenses as a percentage of revenue in 2025, 2024 and 2023 were approximately 21%, 15% and 18%, respectively. Our internal research and development activities are conducted primarily in Israel, France, United States, and India. In addition, a portion of our research and development is conducted through third-party partners with engineering resources in Ukraine and Poland.
Competition for qualified personnel in the technology space is intense, and we believe that our future success largely depends upon our continued ability to attract, develop and retain highly skilled individuals across the globe. We believe we offer competitive compensation (including salary, incentive bonus and equity awards) and comprehensive benefits packages in each of our locations around the globe.
We have not experienced any work stoppages, and we consider our relations with our employees to be good. 10 Table of Contents Competition for qualified personnel in the technology space is intense, and we believe that our future success largely depends upon our continued ability to attract, develop and retain highly skilled individuals across the globe.
Other than the information expressly set forth in this Annual Report on Form 10-K, the information contained or referred to on our website is not part of this report.
Our principal executive offices are currently located at 2590 Orchard Parkway, San Jose, California 95131. Our telephone number is (408) 542-2500. Our Internet website is http://www.harmonicinc.com. Other than the information expressly set forth in this Annual Report on Form 10-K, the information contained or referred to on our website is not part of this report.
We offer a broad range of services, including SaaS-related support and deployment, program management, technical design and planning, building and site preparation, integration and equipment installation, end-to-end system testing and comprehensive training. Customers We sell our products to a variety of cable, satellite and telco, and broadcast and media companies.
We draw upon our expertise in communications networking and broadband access technologies to design, integrate and install complete solutions for our customers, including integration with third-party products and services. We offer a broad range of services, including program management, technical design and planning, building and site preparation, integration and equipment installation, end-to-end system testing and comprehensive training.
We aim to create an environment in which our employees can develop and grow, and be recognized for their achievements. We offer training, development and on-demand learning programs to support continuous learning and cultivate talent throughout the company, and promote opportunities for internal mobility and recruitment across functions and geographies.
We offer training, development and on-demand learning programs to support continuous learning and cultivate talent throughout the company, and promote opportunities for internal mobility and recruitment across functions and geographies. We offer rewards and recognition programs, including spot awards to recognize employee contributions, patent incentive awards, and various functional recognition awards.
BUSINESS We are a leading global provider of (i) broadband access solutions that enable broadband operators to more efficiently and effectively deploy high-speed internet for data, voice and video services for their customers and (ii) versatile and high performance video delivery software, products, system solutions and services that enable our customers to efficiently create, prepare, store, playout and deliver a full range of high-quality broadcast and streaming video services to consumer devices, including televisions, personal computers, laptops, tablets and smart phones.
Item 1. BUSIN ESS General We are a leading global provider of broadband access solutions that enable broadband operators to more efficiently and effectively deploy high-speed internet for data, voice and video services for their customers. Our Broadband business provides broadband access solutions and related services, including our cOS software-based broadband access solution, to broadband operators globally.
Set forth below is a representative list of our significant end user and integrator/reseller customers, listed alphabetically, based, in part, on revenue during 2024.
Customers We sell our products to a variety of cable and telco operators. Set forth below is a representative list of our significant end user and integrator/reseller customers, listed alphabetically, based, in part, on revenue during 2025. United States International Astound America Movil Cable One, Inc. Cablemas Telecom Charter Communications DNA OYJ Clarity Telcom Interactive Digital Technologies Inc.
Our failure to successfully develop and introduce new products and solutions would materially and adversely affect our business, operating results, financial condition and cash flows. 9 Table of Contents Human Capital Resources As of December 31, 2024, we employed a total of 1,240 full time employees, including 561 in research and development, 178 in sales, 236 in service and support, 67 in operations, 56 in marketing (corporate and product) and 142 in a general and administrative capacity.
Human Capital Resources As of December 31, 2025, we employed a total of 534 full time employees, including 236 in research and development, 62 in sales, 80 in service and support, 45 in operations, 25 in marketing (corporate and product) and 86 in a general and administrative capacity.
Our competitors in our Video SaaS business include companies that offer video delivery and processing SaaS solutions, SaaS video streaming platform providers, and certain public cloud service providers. Research and Development We have historically devoted a significant amount of our resources to research and development.
Our competitors in our Broadband business include a number of suppliers of networking and communications equipment and solutions to broadband service providers. Research and Development We have historically devoted a significant amount of our resources to research and development. Research and development expenses in 2025, 2024 and 2023 were approximately $76.3 million, $72.6 million and $69.7 million, respectively.
United States International Apple Inc America Movil Charter Communications Comcast Comcast Groupe Canal DirecTV Millicom International Dish Network Netorium EPlus Technology NYL Eletronica GCI Communication Rogers Communications Heartland Video Systems Sky Perfect SES Tele2 Sverige AB Sinclair Broadcast Group Vodafone Sales to our 10 largest customers in 2024, 2023 and 2022 accounted for approximately 72%, 66% and 67% of our net revenue, respectively.
Comcast Millicom International ePlus Normann Engineering GCI Communication Tele2 Sverige AB MediaCom Telecentro SA Mega Hertz Telia Norge MidContinent Communications Vodafone Sales to our 10 largest customers in 2025, 2024 and 2023 accounted for approximately 84%, 91% and 90% of our net revenue, respectively.
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We operate in two segments, Broadband and Video. Our Broadband business provides broadband access solutions and related services, including our cOS software-based broadband access solution, to broadband operators globally.
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We derived approximately 89% of our revenue from the Americas in 2025. The Europe, Middle East and Africa (“EMEA”) and Asia Pacific (“APAC”) regions accounted for 9% and 2% of our 2025 revenue, respectively. Harmonic was initially incorporated in California in June 1988 and was reincorporated in Delaware in May 1995.
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Our Video business provides video processing and production and playout solutions and services worldwide to broadband operators and satellite and telco Pay-TV service providers, which we refer to collectively as “service providers,” and to broadcast and media companies, including streaming media companies.
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Discontinued Operations On December 8, 2025, the Company entered into a Put Option Agreement (the "Put Option Agreement") to sell its Video business to Leone Media Inc. (d/b/a MediaKind) (the “Buyer”).
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Our Video business infrastructure solutions are delivered either through shipment of our products, software licenses or as software-as-a-service (“SaaS”) subscriptions. Across our two business segments, we derived approximately 82% of our revenue from the Americas in 2024. The Europe, Middle East and Africa (EMEA) and Asia Pacific (APAC) regions accounted for 14% and 4% of our 2024 revenue, respectively.
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Under the Put Option Agreement, the Buyer has irrevocably provided the Company with the right to require the Buyer to purchase the Company's Video business for a purchase price of $145 million in cash (the "Disposition").
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Harmonic was initially incorporated in California in June 1988 and was reincorporated in Delaware in May 1995. Our principal executive offices are currently located at 2590 Orchard Parkway, San Jose, California 95131. Our telephone number is (408) 542-2500. Our Internet website is http://www.harmonicinc.com.
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The purchase price is subject to a potential adjustment based on the amount, on the date the Disposition is consummated, of net working capital of the Video business, the cash and debt of the entities to be sold in the Disposition, as well as the amount of specified selling expenses.
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Video Business Industry Trends We believe our customers must continue to employ innovative technologies and services to address key trends in the dynamic video industry. • Demand for Streaming Services .
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In accordance with the authoritative guidance for discontinued operations (Accounting Standards Codification (ASC) 205-20), the Company determined that the Disposition of the Video business met the held-for-sale and discontinued operations accounting criteria upon execution of the Put Option Agreement.
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In the highly competitive video industry, there is strong demand for video content to be captured, processed and streamed to millions of subscribers at scale, and with personalized service features and characteristics. We believe video streaming is, and will continue to be, the most significant trend affecting the video industry for the foreseeable future. • Demand for Targeted Advertising.
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Accordingly, the Company classified the results of the Video Business as discontinued operations in its consolidated statements of operations for all periods presented. Additionally, the related assets and liabilities associated with the Video Business were classified as held-for-sale in the consolidated balance sheet as of December 31, 2025.
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Streaming technology makes it possible for streaming platforms to insert personalized targeted advertisements into video streams to consumers. This capability is highly sought after by advertisers and results in significantly higher advertising revenue for video streaming service providers.
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Unless otherwise noted, the discussion throughout Part I of this Form 10-K, including the various metrics cited, excludes the Video business and pertains only to our continuing operations.
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With streaming viewership continuing to grow rapidly, we believe targeted ad insertion will be a foundational pillar of the video industry in the coming years. • Streaming of Live Events .
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Our strategy centers on delivering solutions to improve subscriber satisfaction through superior speed, reliability, and quality of experience.
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In contrast to the constraints of traditional linear broadcast channels, there is effectively no limit to the number of live events that can be streamed or the audience reach of streamed events.
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Our comprehensive fiber and cable portfolio, combined with an intelligent platform as a service, empowers brand providers worldwide to transform their networks faster and more efficiently while proactively optimizing performance and ensuring excellent subscriber experience. 6 Table of Contents Our Products and Solutions Software-Based Broadband Access Solution.
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Consequently, we believe the number of live events globally that will be streamed to consumers, especially live sporting events, will continue to grow for the foreseeable future. • Demand for High Quality Video . High quality video for both traditional broadcast television and streaming continues to be an important factor for consumers.
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Harmonic hardware products include our Oyster, Ripple and SeaStar DAA nodes; Reef and Wave PHY shelf products; Pebble Remote PHY Devices (RPDs); and Fin, Pearl and Pier OLT modules and devices.
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Compression technologies such as High Efficiency Video Compression (HEVC) or advances in H.264/AVC codecs, as well as increasing requirements for HDR encoding, will continue to remain a high priority for both broadcast and streaming providers. 5 Table of Contents • Decline in Broadcast Viewing . Broadcast television viewership will continue to decline as the growth in streaming accelerates.
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During the fiscal year ended December 31, 2024, two of our customers accounted for 57% and 24% of our net revenue, respectively. During the fiscal year ended December 31, 2023, one customer accounted for 64% of our net revenue.
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We believe this transition will cause traditional Pay-TV service providers and broadcasters to focus their investments on (i) providing streaming services and (ii) reducing the operational complexities and cost of broadcast television. • Transformation of Broadcast Infrastructure.
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Our failure to successfully develop and introduce new products and solutions would materially and adversely affect our business, operating results, financial condition and cash flows.
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We believe the industry will continue to seek to transform existing broadcast infrastructure workflows into more flexible and efficient operations, in order to reduce operational and investment costs.
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We believe we offer competitive compensation (including salary, incentive bonus and equity awards) and comprehensive benefits packages in each of our locations around the globe. We aim to create an environment in which our employees can develop and grow, and be recognized for their achievements.
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We believe that, in order to maximize cost savings, our customers will migrate all or a portion of these operations to public clouds, or upgrade and replace their aging on-premise equipment with next-generation software-based appliances that significantly reduce operational complexity, or invest in hybrid infrastructure approaches that combine public cloud and on-premise equipment.
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Our Video business strategy is focused on providing our broadcast and media, streaming, and service provider customers with software-based appliances and SaaS platforms to enable and support these trends and transitions. Our Products and Solutions Broadband Products and Solutions Software-Based Broadband Access Solution.
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Video Processing and Delivery Solutions We offer two categories of solutions - a broad range of software-based video appliances and SaaS platforms - to deliver broadcast and streaming services and capabilities in the media market. Software-based Appliances.
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Our video processing appliances, which include network management and application software and hardware products, provide our customers with the ability to acquire a variety of signals from different sources and in different protocols in order to deliver a variety of real-time and stored content to their subscribers for viewing on a broad range of devices.
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Our appliance product families include: • Encoders. Our high-performance encoders compress video and audio files to low bit rates, and prepare such files for the proper formats and specifications required for playback, while maintaining high audio/video quality.
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Our latest software-based XOS encoders can deliver video in multiple formats, including standard, HD and Ultra HD, and in any video compression standard, including MPEG-2, MPEG-4 AVC and HEVC. This capability allows the encoders to converge workflows targeted for all forms of video delivery, whether broadcast or streaming. • Video Servers .
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Our Spectrum family of video server systems are used by broadcast and media companies to create play-to-air television channels.
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Our customers typically use these video server products to record incoming content from either live feeds or from tapes, encoding that content in real-time into standard media files that are then stored in the server’s file system until the content is needed for playback as part of a scheduled playlist. • High-density stream processing.
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We offer high-density, real-time stream processing systems capable of high-performance, high-throughput video processing for mission-critical IP video delivery applications, including multiplexing, scrambling, splicing and blackout source switching. 6 Table of Contents • Edge processors . Our family of Edge processing platforms allows service providers to acquire content delivered via satellite, IP or terrestrial networks for distribution to their subscribers.
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These products are used by broadcasters to decode signals backhauled from live news and sporting events in contribution applications, as well as by content owners looking to distribute their content in a controlled manner to a large base of affiliates. SaaS platforms .
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Our VOS360 SaaS platforms provide both streaming and channel origination and distribution services in a public cloud environment that is fully managed and operated by our 24/7 DevOps teams.
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Our SaaS solutions enable the packaging and delivery of high-quality streaming services, including live streaming, VOD, catch-up TV, start-over TV, network-DVR and cloud-DVR services through HTTP streaming to any device, along with dynamic and personal ad insertion.
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In addition, our VOS360 SaaS platforms enable the transformation of traditional broadcast video workflows into cloud-based workflows, resulting in more efficient and leaner operations for our customers. We continue to see an increasing number of customers seeking to leverage the inherent commercial, operational and infrastructure flexibility offered by our VOS360 SaaS platforms.
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We also provide consulting, implementation and integration services to our customers worldwide. We draw upon our expertise in broadcast television, communications networking, compression technology and broadband access technologies to design, integrate and install complete solutions for our customers, including integration with third-party products and services.
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Competition The markets in which our Video and Broadband businesses operate are extremely competitive and have been characterized by rapid technological change and declining average selling prices in the past.
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Our competitors in our Broadband business include a number of suppliers of networking and communications equipment and solutions to broadband service providers. Our competitors in our Video appliance business are primarily comprised of providers of video delivery and video processing and compression products and solutions, broadcast equipment and solutions providers, and certain network infrastructure providers.
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In addition, a portion of our research and development is conducted through third-party partners with engineering resources in Ukraine, Poland and India. Our research and development program is primarily focused on developing new products and solutions, and adding new features and other improvements to existing products and solutions.
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For our Video business segment, our current research and development efforts are focused on enhancing our streaming capabilities, expanding our targeted advertising technologies, and improving the efficiency and flexibility of broadcast workflows for our traditional appliances and within our SaaS platform.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

110 edited+28 added−32 removed147 unchanged
Biggest changeThese spending patterns are dependent on a variety of factors, including: • the impact of general economic conditions, actual and projected, including inflation, changing interest rates, lower consumer confidence, volatile capital markets, supply chain disruptions, tariffs, uncertainty and volatility in the financial services sector and the impact of the Middle East and Russia-Ukraine conflicts, and government and business responses thereto, on the global economy and regional economies; • access to financing; • annual budget cycles of customers in each of the industries we serve; • the impact of industry consolidation; • customers suspending, reducing or shifting spending due to: (i) new broadband or video industry standards; (ii) industry trends and technology shifts, such as virtualization and cloud-based solutions; and (iii) new products and solutions, such as products and services based on our cOS software-based broadband access solutions or VOS software platform; • delayed or reduced near-term spending as customers transition away from video appliance solutions and adopt new business and operating models enabled by software and cloud-based solutions, including SaaS video processing solutions; • federal, state, local and foreign government regulation of broadband, telco, television broadcasting and streaming media; • overall demand for communication services and consumer acceptance of new video and data technologies and services; • competitive pressures, including pricing pressures; • the impact of fluctuations in currency exchange rates, such as the strengthening of the U.S. dollar; and • discretionary end-user customer spending patterns.
Biggest changeThese spending patterns are dependent on a variety of factors, including: • the impact of general economic conditions, actual and projected, including inflation, changing interest rates, lower consumer confidence, volatile capital markets, supply chain disruptions, changes in tariffs and trade policies, government shutdowns, uncertainty and volatility in the financial services sector and the impact of the Middle East and Russia-Ukraine conflicts, and government and business responses thereto, on the global economy and regional economies; • access to financing; • annual budget cycles of customers in each of the industries we serve; • the impact of industry consolidation; • customers suspending, reducing or shifting spending in order to transition or adapt to new broadband industry standards and industry trends or technology shifts; • federal, state, local and foreign government regulation of the broadband industry; • overall demand for broadband services; and • competitive pressures, including pricing pressures, and the impact of fluctuations in currency exchange rates, such as the strengthening of the U.S. dollar; In the past, specific factors contributing to reduced spending have included: • weak or uncertain economic and financial conditions in the United States or one or more international markets; • uncertainty related to development of industry technology; • delays in evaluations of new services, new standards and systems architectures by certain customers; • a reduction in the amount of capital available to finance projects of our customers and potential customers; • proposed and completed business combinations and divestitures by our customers and the length of regulatory review of each; • completion of a new system or significant expansion or upgrade to a system; and • bankruptcies and financial restructuring of major customers.
To finance the settlement of the conversions of the 2024 Notes in connection with our delivery of the notice of redemption for such notes, we drew down $75.0 million on the Revolving Facility and $40.0 million on the Term Facility, respectively.
To finance the settlement of the conversions of the 2024 Notes in connection with our delivery of the notice of redemption for such 2024 Notes, we drew down $75.0 million on the Revolving Facility and $40.0 million on the Term Facility, respectively.
Acquisitions involve numerous risks, including the following: • unanticipated costs or delays associated with an acquisition; • difficulties in the assimilation and integration of acquired operations, technologies and/or products; • potential disruption of our business and the diversion of management’s attention from the regular operations of the business during the acquisition process; • the challenges of managing a larger and more geographically widespread operation and product portfolio after the closing of the acquisition; • potential adverse effects on new and existing business relationships with suppliers, contract manufacturers, resellers, partners and customers; • compliance with regulatory requirements, such as local employment regulations and organized labor requirements; • risks associated with entering markets in which we may have no or limited prior experience; • the potential loss of key employees of acquired businesses and our own business as a result of integration; 22 Table of Contents • difficulties in bringing acquired products and businesses into compliance with applicable legal requirements in jurisdictions in which we operate and sell products; • impact of known potential liabilities or unknown liabilities, including litigation and infringement claims, associated with companies we acquire; • substantial charges for acquisition costs or for the amortization of certain purchased intangible assets, deferred stock compensation or similar items; • substantial impairments to goodwill or intangible assets in the event that an acquisition proves to be less valuable than the price we paid for it; • difficulties in establishing and maintaining uniform financial and other standards, controls, procedures and policies; • delays in realizing, or failure to realize, the anticipated benefits of an acquisition; and • the possibility that any acquisition may be viewed negatively by our customers or investors or the financial markets.
Acquisitions involve numerous risks, including the following: • unanticipated costs or delays associated with an acquisition; • difficulties in the assimilation and integration of acquired operations, technologies and/or products; • potential disruption of our business and the diversion of management’s attention from the regular operations of the business during the acquisition process; • the challenges of managing a larger and more geographically widespread operation and product portfolio after the closing of the acquisition; • potential adverse effects on new and existing business relationships with suppliers, contract manufacturers, resellers, partners and customers; • compliance with regulatory requirements, such as local employment regulations and organized labor requirements; • risks associated with entering markets in which we may have no or limited prior experience; • the potential loss of key employees of acquired businesses and our own business as a result of integration; 25 Table of Contents • difficulties in bringing acquired products and businesses into compliance with applicable legal requirements in jurisdictions in which we operate and sell products; • impact of known potential liabilities or unknown liabilities, including litigation and infringement claims, associated with companies we acquire; • substantial charges for acquisition costs or for the amortization of certain purchased intangible assets, deferred stock compensation or similar items; • substantial impairments to goodwill or intangible assets in the event that an acquisition proves to be less valuable than the price we paid for it; • difficulties in establishing and maintaining uniform financial and other standards, controls, procedures and policies; • delays in realizing, or failure to realize, the anticipated benefits of an acquisition; and • the possibility that any acquisition may be viewed negatively by our customers or investors or the financial markets.
Certain laws intended to prevent network operators from discriminating against the legal traffic that traverse their networks have been implemented in many countries, including across the European Union. In others, the laws may be nascent or non-existent. Furthermore, favorable laws may change, including for example, in the United States where net neutrality regulations were recently repealed.
Certain laws intended to prevent network operators from discriminating against the legal traffic that traverse their networks have been implemented in many countries, including across the European Union. In others, the laws may be nascent or non-existent. Furthermore, favorable laws may change, including for example, in the United States where net neutrality regulations were repealed.
If we conclude in future periods that our internal control over financial reporting is not effective or if our independent registered public accounting firm is unable to provide an unqualified attestation as of future year-ends, we may incur substantial additional costs in an effort to correct such problems, and investors may lose confidence in our financial statements, and our stock price may decrease in the short term, until we correct such problems, and perhaps in the long term, as well. 27 Table of Contents We are subject to requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 that require us to conduct research, disclose, and report whether or not our products contain certain conflict minerals sourced from the Democratic Republic of Congo or its surrounding countries.
If we conclude in future periods that our internal control over financial reporting is not effective or if our independent registered public accounting firm is unable to provide an unqualified attestation as of future year-ends, we may incur substantial additional costs in an effort to correct such problems, and investors may lose confidence in our financial statements, and our stock price may decrease in the short term, until we correct such problems, and perhaps in the long term, as well. 30 Table of Contents We are subject to requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 that require us to conduct research, disclose, and report whether or not our products contain certain conflict minerals sourced from the Democratic Republic of Congo or its surrounding countries.
For example, the European Union adopted a General Data Protection Regulation (“GDPR”) that became effective in May 2018, and has established new, and in some cases more stringent, requirements for data protection in Europe, and which provides for substantial penalties for noncompliance. Additionally, California has the California Consumer Privacy Act (“CCPA”), which went into effect on January 1, 2020.
For example, the European Union adopted a General Data Protection Regulation that became effective in May 2018, and has established new, and in some cases more stringent, requirements for data protection in Europe, and which provides for substantial penalties for noncompliance. Additionally, California has the California Consumer Privacy Act (“CCPA”), which went into effect on January 1, 2020.
Although we take precautions and have processes in place to prevent our products and services from being provided in violation of such laws, our products may have been in the past, and could in the future be, provided inadvertently in violation of such laws, despite the precautions we take. In March 2020, we received an administrative subpoena from the U.S.
Although we take precautions and have processes in place to prevent our products and services from being provided in violation of such laws, our products have been in the past, and could in the future be, provided inadvertently in violation of such laws, despite the precautions we take. In March 2020, we received an administrative subpoena from the U.S.
Bribery Act and/or similar anti-corruption and anti-bribery laws, particularly in emerging market countries; • the burden of complying with a wide variety of foreign laws, regulations, treaties and technical standards; • fulfilling “country of origin” requirements for our products for certain customers; • difficulty in staffing and managing foreign operations; • business and operational disruptions or delays caused by political, social and/or economic instability and unrest (e.g., Ukraine and Israel), including risks related to terrorist activity, particularly in emerging market countries; • changes in economic policies by foreign governments, including the imposition and potential continued expansion of economic sanctions by the United States and the European Union on the Russian Federation; • changes in diplomatic and trade relationships, including the imposition of new trade restrictions, trade protection measures, import or export requirements, trade embargoes and other trade barriers, including those between the United States and China; • any negative economic impacts resulting from the political environment in the United States or the United Kingdoms’ exit from the European Union; and • business and economic disruptions and delays caused by outbreaks of disease, epidemics and potential pandemics.
Bribery Act and/or similar anti-corruption and anti-bribery laws, particularly in emerging market countries; • the burden of complying with a wide variety of foreign laws, regulations, treaties and technical standards; • fulfilling “country of origin” requirements for our products for certain customers; • difficulty in staffing and managing foreign operations; 32 Table of Contents • business and operational disruptions or delays caused by political, social and/or economic instability and unrest (e.g., Ukraine and Israel), including risks related to terrorist activity, particularly in emerging market countries; • changes in economic policies by foreign governments, including the imposition and potential continued expansion of economic sanctions by the United States and the European Union on the Russian Federation; • changes in diplomatic and trade relationships, including the imposition of new trade restrictions, trade protection measures, import or export requirements, trade embargoes and other trade barriers, including those between the United States and China; • any negative economic impacts resulting from the political environment in the United States or the United Kingdoms’ exit from the European Union; and • business and economic disruptions and delays caused by outbreaks of disease, epidemics and potential pandemics.
In such event, we could be required to seek licenses from third parties in order to continue offering our products, to re-engineer our products or to discontinue the sale of our products in the event re-engineering cannot be accomplished on a timely basis, any of which could materially and adversely affect our operating results, financial condition and cash flows. 26 Table of Contents We are subject to import and export control and trade and economic sanction laws and regulations that could subject us to liability or impair our ability to compete in international markets.
In such event, we could be required to seek licenses from third parties in order to continue offering our products, to re-engineer our products or to discontinue the sale of our products in the event re-engineering cannot be accomplished on a timely basis, any of which could materially and adversely affect our operating results, financial condition and cash flows. 29 Table of Contents We are subject to import and export control and trade and economic sanction laws and regulations that could subject us to liability or impair our ability to compete in international markets.
We depend significantly on our international revenue and are subject to the risks associated with international operations, including those of our resellers, contract manufacturers and outsourcing partners, which may negatively affect our operating results.
We depend significantly on our international revenue and are subject to the risks associated with international operations, including those of our contract manufacturers and outsourcing partners, which may negatively affect our operating results.
From time to time, we assess our relationship with our contract manufacturers, and we do not generally maintain long-term agreements with any of our suppliers or contract manufacturers. Our agreement with Plexus has automatic annual renewals, unless prior notice is given by either party, and has been automatically renewed for a term expiring in October 2025.
From time to time, we assess our relationship with our contract manufacturers, and we do not generally maintain long-term agreements with any of our suppliers or contract manufacturers. Our agreement with Plexus has automatic annual renewals, unless prior notice is given by either party, and has been automatically renewed for a term expiring in October 2026.
While we have invested in and continue to update our network security and cybersecurity infrastructure and systems, if our cybersecurity systems, or the cybersecurity systems of relevant third parties, fail to protect against unauthorized access, sophisticated cyber-attacks, phishing schemes, ransomware and other malicious code, data protection breaches, computer viruses, denial-of-service attacks, or disruptions from unauthorized tampering or human error, our ability to conduct our business effectively could be damaged in a number of ways, including: • our intellectual property and other proprietary data, or financial assets, could be stolen, lost, altered, or otherwise unavailable; • our ability to manage and conduct our business operations could be seriously disrupted; • defects and security vulnerabilities could be introduced into our product, software and SaaS offerings, thereby damaging the reputation and perceived reliability and security of our products; and 19 Table of Contents • confidential or otherwise sensitive information, including personal data of our customers, employees and business partners, could be compromised and lead to unauthorized, unlawful, or accidental access to, or acquisition, use, corruption, loss, destruction, unavailability, alteration or dissemination of, or damage to, such information.
While we have invested in and continue to update our network security and cybersecurity infrastructure and systems, if our cybersecurity systems, or the cybersecurity systems of relevant third parties, fail to protect against unauthorized access, sophisticated cyber-attacks, phishing schemes, ransomware and other malicious code, security breaches and incidents, computer viruses, denial-of-service attacks, or disruptions from unauthorized tampering or human error, our ability to conduct our business effectively could be damaged in a number of ways, including: • our intellectual property and other proprietary data, or financial assets, could be stolen, lost, altered, or otherwise unavailable; • our ability to manage and conduct our business operations could be seriously disrupted; • defects and security vulnerabilities could be introduced into our product, software and SaaS offerings, thereby damaging the reputation and perceived reliability and security of our products; and • confidential or otherwise sensitive information, including personal data of our customers, employees and business partners, could be compromised and lead to unauthorized, unlawful, or accidental access to, or acquisition, use, corruption, loss, destruction, unavailability, alteration or dissemination of, or damage to, such information.
Although no assurance can be given with respect to international sales growth in any one or more regions, we expect that international revenue will likely continue to represent, from year to year, a significant, and potentially increasing, percentage of our annual revenue for the foreseeable future.
Although no assurance can be given with respect to international sales growth in any one or more regions, we expect that international revenue will likely continue to represent, from year to year, a portion of our revenue, and potentially increasing, percentage of our annual revenue for the foreseeable future.
For example, we are subject to environmental regulations such as the European Union’s Waste Electrical and Electronic Equipment (“WEEE”) and Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (“RoHS”) directives and similar legislation enacted in other jurisdictions worldwide.
For example, we are subject to environmental regulations such as the European Union’s Waste Electrical and Electronic Equipment and Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment directives and similar legislation enacted in other jurisdictions worldwide.
The effect of one or more of these international risks could have a material and adverse effect on our business, financial condition, operating results and cash flows. Risks Related to Ownership of Our Common Stock Some anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
The effect of one or more of these international risks could have a material and adverse effect on our business, financial condition, operating results and cash flows. 33 Table of Contents Risks Related to Ownership of Our Common Stock Some anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
However, we may not be successful in those efforts if, among other things, our products and solutions: • are not cost effective; • are not brought to market in a timely manner; 12 Table of Contents • are not in accordance with evolving industry standards; • fail to meet market acceptance or customer requirements; or • are ahead of the needs of their markets.
However, we may not be successful in those efforts if, among other things, our products and solutions: • are not cost effective; • are not brought to market in a timely manner; • are not in accordance with evolving industry standards; • fail to meet market acceptance or customer requirements; or • are ahead of the needs of their markets.
If our competitors are successful in bringing their products to market earlier than us, or if these products are more technologically capable than ours, our revenue could be materially and adversely affected. 13 Table of Contents Our future growth depends on a number of broadband and video industry trends.
If our competitors are successful in bringing their products to market earlier than us, or if these products are more technologically capable than ours, our revenue could be materially and adversely affected. 15 Table of Contents Our future growth depends on a number of broadband industry trends.
We engage in the design, development and manufacture and sale of a variety of video and broadband products and system solutions, which has required, and will continue to require, significant research and development expenditures.
We engage in the design, development and manufacture and sale of a variety broadband access products and system solutions, which has required, and will continue to require, significant research and development expenditures.
Our Credit Agreement contains covenants that limit our ability and the ability of our subsidiaries to, subject to certain limitations and exceptions: • grant liens; • incur debt; • make acquisitions and other investments; • undergo certain fundamental changes; • dispose of assets; • make certain restricted payments; 21 Table of Contents • enter into transactions with affiliates; and • enter into burdensome agreements.
Our Credit Agreement contains covenants that limit our ability and the ability of our subsidiaries to, subject to certain limitations and exceptions: • grant liens; • incur debt; • make acquisitions and other investments; • undergo certain fundamental changes; • dispose of assets; • make certain restricted payments; • enter into transactions with affiliates; and • enter into burdensome agreements.
We are also subject to U.S. trade and economic sanction regulations which include prohibitions on the sale or supply of certain products and services to the United States embargoed or sanctioned countries, governments, persons and entities.
We are also subject to U.S. trade and economic sanction regulations which include prohibitions on the sale or supply of certain products and services to the embargoed or sanctioned countries, governments, persons and entities of the United States or of countries in which we do business.
As of December 31, 2024, we had $82.0 million remaining available for borrowing under the Revolving Facility and no remaining amounts available for borrowing under the Term Facility.
As of December 31, 2025, we had $82.0 million remaining available for borrowing under the Revolving Facility and no remaining amounts available for borrowing under the Term Facility.
In addition, since we are a relatively new entrant into the CMTS market, we need to demonstrate significant performance, functionality and/or cost advantages with our cOS solutions that outweigh customer switching costs.
In addition, since we are a relatively new entrant into the broadband access market, we need to demonstrate significant performance, functionality and/or cost advantages with our cOS solutions that outweigh customer switching costs.
We cannot provide assurances that any current or future changes of management personnel in the future will not cause disruption to operations or customer relationships or a decline in our operating results. 18 Table of Contents We are also dependent on our ability to retain and motivate our existing highly qualified personnel, in addition to attracting new highly qualified personnel.
We cannot provide assurances that any current or future changes of management personnel will not cause disruption to operations or customer relationships or a decline in our operating results. We are also dependent on our ability to retain and motivate our existing highly qualified personnel, in addition to attracting new highly qualified personnel.
Competition for qualified management, technical and other personnel is often intense, particularly in Silicon Valley, Israel and Hong Kong where we have significant research and development activities, and we may not be successful in attracting and retaining such personnel. Competitors and others have in the past attempted, and are likely in the future to attempt, to recruit our employees.
Competition for qualified management, technical and other personnel is often intense, particularly in Israel where we have significant research and development activities, and we may not be successful in attracting and retaining such personnel. Competitors and others have in the past attempted, and are likely in the future to attempt, to recruit our employees.
There can be no assurance that equity or debt financing will be available to us on reasonable terms, if at all, when and if it is needed. We may raise additional financing through public or private equity or convertible debt offerings, debt financings, or corporate partnership or licensing arrangements.
There can be no assurance that equity or debt financing will be available to us on reasonable terms, if at all, when and if it is needed. 23 Table of Contents We may raise additional financing through public or private equity or convertible debt offerings, debt financings, or corporate partnership or licensing arrangements.
Managing our supplier and contractor relationships is particularly difficult during time periods in which we introduce new products and during time periods in which demand for our products is increasing, especially if demand increases more quickly than we expect. Plexus Services Corp.
Managing our supplier and contractor relationships is particularly difficult during time periods in which we introduce new products and during time periods in which demand for our products is increasing, especially if demand increases more quickly than we expect.
A settlement or an unfavorable outcome on any litigation matter could have a material and adverse effect on our business, operating results, financial condition and cash flows. 25 Table of Contents Our failure to adequately protect our proprietary rights and data may adversely affect us.
A settlement or an unfavorable outcome on any litigation matter could have a material and adverse effect on our business, operating results, financial condition and cash flows. Our failure to adequately protect our proprietary rights and data may adversely affect us.
Some of the factors that may cause these fluctuations include: • the level and timing of spending of our customers in the United States, Europe and in other markets; • economic and financial conditions specific to each of the cable, satellite and telco, and broadcast and media industries; general economic and financial market conditions, including impacts from the Middle East and Russia-Ukraine conflicts and related risks of escalation or broader regional conflicts, tensions between China and Taiwan and China and the United States; tariffs; bank insolvencies and related uncertainty and volatility in the financial services sector; inflation; and government and business responses thereto as well as related supply chain and labor shortage issues; • changes in market acceptance of and demand for our products or our customers’ services or products; • the timing and amount of orders, especially from large individual transactions and transactions with our significant customers; • the mix of our products sold and the effect it has on gross margins; • the timing of revenue recognition, including revenue recognition on sales arrangements and from transactions with significant service and support components, which may span several quarters; • our ongoing transition to a SaaS subscription model for our Video business, which may cause near-term declines in revenue in our Video segment since, unlike Video appliance sales, SaaS revenue is recognized over the applicable subscription term based on service usage; • the timing of completion of our customers’ projects; • the length of each customer product upgrade cycle and the volume of purchases during the cycle; • competitive market conditions, including pricing actions by our competitors; • the level and mix of our domestic and international revenue; • new product introductions by our competitors or by us; • uncertainty in the European Union due to unrest or violence in Ukraine that the ongoing military conflict with the Russian Federation has caused, which could adversely affect our results, financial condition and prospects; • uncertainty in the Middle East due to the latest developments in the conflicts in the Middle East and the risk of escalation and broader conflict in the region, which could also adversely affect our results, financial condition and prospects; • changes in domestic and international regulatory environments affecting our business; • the evaluation of new services, new standards and system architectures by our customers; • the cost and timely availability to us of components, subassemblies and modules; • the mix of our customer base, by industry and size, and sales channels; • changes in our operating and extraordinary expenses; 15 Table of Contents • the timing of acquisitions and dispositions by us and the financial impact of such transactions; • impairment of our goodwill; • the impact of litigation, such as related litigation expenses and settlement costs; • write-downs of inventory and investments; • changes in our effective federal tax rate, including as a result of changes in our valuation allowance against our deferred tax assets, and changes in our effective state tax rates, including as a result of apportionment; • changes to tax rules related to the deferral of foreign earnings and compliance with foreign tax rules; • the impact of applicable accounting guidance on accounting for uncertainty in income taxes that requires us to establish reserves for uncertain tax positions and accrue potential tax penalties and interest; and • the impact of applicable accounting guidance on business combinations that requires us to record charges for certain acquisition related costs and expenses and generally to expense restructuring costs associated with a business combination subsequent to the acquisition date.
Some of the factors that may cause these fluctuations include: • the level and timing of spending of our customers in the United States, Europe and in other markets; • economic and financial conditions specific to each of the cable and telecommunication industries; general economic and financial market conditions, including impacts from the Middle East and Russia-Ukraine conflicts and related risks of escalation or broader regional conflicts, tensions between China and Taiwan and China and the United States; changes in tariffs and trade policies; bank insolvencies and related uncertainty and volatility in the financial services sector; inflation; and government and business responses thereto as well as related supply chain and labor shortage issues; • changes in market acceptance of and demand for our products or our customers’ services or products; • the timing and amount of orders, especially from large individual transactions and transactions with our significant customers; • the mix of our products sold and the effect it has on gross margins; • the timing of revenue recognition, including revenue recognition on sales arrangements and from transactions with significant service and support components, which may span several quarters; • the timing of completion of our customers’ projects; • the length of each customer product upgrade cycle and the volume of purchases during the cycle; • competitive market conditions, including pricing actions by our competitors; • the level and mix of our domestic and international revenue; • new product introductions by our competitors or by us; • uncertainty in the European Union due to unrest or violence in Ukraine that the ongoing military conflict with the Russian Federation has caused, which could adversely affect our results, financial condition and prospects; • uncertainty in the Middle East due to the latest developments in the conflicts in the region and the risk of escalation and broader conflict in the Middle East, which could also adversely affect our results, financial condition and prospects; • changes in domestic and international regulatory environments affecting our business; • the evaluation of new services, new standards and system architectures by our customers; • the cost and timely availability to us of components, subassemblies and modules; • the mix of our customer base, by industry and size, and sales channels; • changes in our operating and extraordinary expenses; • the timing of acquisitions and dispositions by us and the financial impact of such transactions; • impairment of our goodwill; • the impact of litigation, such as related litigation expenses and settlement costs; • write-downs of inventory and investments; 17 Table of Contents • changes in our effective federal tax rate, including as a result of changes in our valuation allowance against our deferred tax assets, and changes in our effective state tax rates, including as a result of apportionment; • changes to tax rules related to the deferral of foreign earnings and compliance with foreign tax rules; • the impact of applicable accounting guidance on accounting for uncertainty in income taxes that requires us to establish reserves for uncertain tax positions and accrue potential tax penalties and interest; and • the impact of applicable accounting guidance on business combinations that requires us to record charges for certain acquisition related costs and expenses and generally to expense restructuring costs associated with a business combination subsequent to the acquisition date.
Additionally, since most of our international revenue is denominated in U.S. dollars, global economic and market conditions may impact currency exchange rates and cause our products to become relatively more expensive to customers in a particular country or region, which could lead to delayed or reduced spending in those countries or regions, thereby negatively impacting our business and financial condition.
Additionally, since most of our international revenue is denominated in U.S. dollars, global economic and market conditions, including those exacerbated by a prolonged government shutdown, may impact currency exchange rates and cause our products to become relatively more expensive to customers in a particular country or region, which could lead to delayed or reduced spending in those countries or regions, thereby negatively impacting our business and financial condition.
Moreover, if competitors adapt new broadband industry technology standards into competing broadband access solutions faster than we do, or promulgate a new or competitive architecture for next-generation broadband access solutions that renders our cOS solution obsolete, our business may be adversely impacted. 14 Table of Contents The sales cycle for our cOS solutions tends to be long.
Moreover, if competitors adapt new broadband industry technology standards into competing broadband access solutions faster than we do, or if they promulgate a new or competitive architecture for next-generation broadband access solutions that renders our cOS solution obsolete, our business may be adversely impacted. The sales cycle for our cOS solutions tends to be long.
Significant changes in current principles could affect our financial statements going forward and changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and harm our operating results. United States generally accepted accounting principles (“U.S.
Significant changes in current principles could affect our financial statements going forward and changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and harm our operating results. 26 Table of Contents United States generally accepted accounting principles (“U.S.
In addition, our financial results may be impacted by tariffs imposed by the United States on goods from other countries and tariffs imposed by other countries on U.S. goods.
In addition, our financial results may be impacted by tariffs imposed by the United States on goods from other countries and tariffs imposed by other countries on U.S. goods. Plexus Services Corp.
Further, historically high interest rates and tightening credit markets may reduce our access to debt financing, which may adversely affect our future business plans and expected growth and would increase the cost of long-term fixed rate and short-term variable rate borrowings, which could reduce our earnings.
Further, high interest rates and tightening credit markets may reduce our access to debt financing, which may adversely affect our future business plans and expected growth and would increase the cost of fixed rate and/or variable rate borrowings, which could reduce our earnings.
If we are found to have violated U.S. export control laws as a result of future investigations, we and certain of our employees could be subject to civil or criminal penalties, including the possible loss of export privileges, monetary penalties, and, in extreme cases, imprisonment of responsible employees for knowing and willful violations of these laws which could lead to penalties, reputational harm, loss of access to certain markets, or otherwise.
If we are found to have violated U.S. export control or sanctions laws or regulations, we and certain of our employees could be subject to civil or criminal penalties, including the possible loss of export privileges, monetary penalties, and, in extreme cases, imprisonment of responsible employees for knowing and willful violations of these laws which could lead to penalties, reputational harm, loss of access to certain markets, or otherwise.
Approximately 13% of our employees in Israel have been called for military duty in connection with the current conflict in the Middle East, and in the event that more of our employees are called to active duty, certain of our research and development, product development and testing and other activities may be significantly delayed and adversely affected.
In 2025, approximately 10% of our employees in Israel were called for military duty in connection with the current conflict in the Middle East, and in the event that more of our employees are called to active duty, certain of our research and development, product development and testing and other activities may be significantly delayed and adversely affected.
As a result, the future imposition of significant increases in the level of customs duties or the creation of import quotas on our products in Europe or in other jurisdictions, or any of the limitations on international sales described above, could have a material adverse effect on our business, operating results, financial condition and cash flows.
As a result, the future imposition of significant increases in the level of tariffs or the creation of import quotas on our products, or any of the limitations on international sales described above, could have a material adverse effect on our business, operating results, financial condition and cash flows.
If one or more of these analysts cease coverage of us or fails to publish reports on us regularly, we could lose visibility in the market, which in turn could cause the liquidity of our stock and our stock price to decline. 31 Table of Contents Item 1B. UNRESOLVED STAFF COMMENTS None.
If one or more of these analysts cease coverage of us or fails to publish reports on us regularly, we could lose visibility in the market, which in turn could cause the liquidity of our stock and our stock price to decline. Item 1B. UNRESO LVED STAFF COMMENTS None.
Our failure or perceived failure to comply with any of the foregoing legal and regulatory requirements, or other actual or asserted obligations relating to privacy, data protection or information security could result in increased costs for our products, monetary penalties, damage to our reputation, government inquiries, investigations and other legal proceeds, legal claims, demands and litigation and other obligations and liabilities.
Our failure or perceived failure to comply with any of the foregoing legal and regulatory requirements, or other actual or asserted obligations relating to privacy, data protection, cybersecurity, or the collection, use, transfer, or other processing of data could result in increased costs for our products, monetary penalties, damage to our reputation, government inquiries, investigations and other legal proceeds, legal claims, demands and litigation and other obligations and liabilities.
We expect that this volatility will continue in the future due to factors such as: • general market and economic conditions, including inflation, interest rates, volatile capital markets, uncertainty and volatility in the financial services sector, the Middle East and Russia-Ukraine conflicts and potential escalations and broader regional conflicts, and rising tensions between China and Taiwan and the United States; • actual or anticipated variations in operating results; • increases or decreases in the general stock market or to the stock prices of technology companies; • announcements of technological innovations, new products or new services by us or by our competitors or customers; • changes in financial estimates or recommendations by stock market analysts regarding us or our competitors; • announcements by us or our competitors of significant acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments; • announcements by our customers regarding end user market conditions and the status of existing and future infrastructure network deployments; • additions or departures of key personnel; and • future equity or debt offerings or our announcements of these offerings.
We expect that this volatility will continue in the future due to factors such as: • general market and economic conditions, including inflation, interest rates, volatile capital markets, uncertainty and volatility in the financial services sector, the Middle East and Russia-Ukraine conflicts and potential escalations and broader regional conflicts, and rising tensions between China and Taiwan and the United States; • actual or anticipated variations in operating results; • increases or decreases in the general stock market or to the stock prices of technology companies; • announcements of technological innovations, new products or new services by us or by our competitors or customers; • changes in financial estimates or recommendations by stock market analysts regarding us or our competitors; • announcements by us or our competitors of significant acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments; • announcements by our customers regarding end user market conditions and the status of existing and future infrastructure network deployments; • additions or departures of key personnel; and • future equity or debt offerings or our announcements of these offerings. 34 Table of Contents In addition, in recent years, the stock market in general, and The Nasdaq Global Select Market and the securities of technology companies in particular, have experienced extreme price and volume fluctuations.
An adverse determination in either such proceeding could subject us to significant liabilities and have a material and adverse effect on our operating results, cash flows and financial condition. We may be the subject of litigation which, if adversely determined, could harm our business and operating results. We may be subject to claims arising in the normal course of business.
An adverse determination in either such proceeding could subject us to significant liabilities and have a material and adverse effect on our operating results, cash flows and financial condition. 28 Table of Contents We may be the subject of litigation which, if adversely determined, could harm our business and operating results.
The Credit Agreement provides for a $160.0 million secured revolving loan facility (the “Revolving Facility”), with a $10.0 million sublimit for the issuance of letters of credit, and a $40.0 million secured delayed draw term loan facility (the “Term Facility”).
As amended in December 2024, the Credit Agreement provides for a $160.0 million secured revolving loan facility (the “Revolving Facility”), with a $10.0 million sublimit for the issuance of letters of credit, and a $40.0 million secured delayed draw term loan facility (the “Term Facility”).
We believe that our existing cash of approximately $101.5 million as of December 31, 2024 will satisfy our cash requirements for at least the next 12 months. However, we may need to raise additional funds to take advantage of presently unanticipated strategic opportunities, satisfy our other cash requirements from time to time, or strengthen our financial position.
We believe that our existing cash of approximately $124.1 million as of December 31, 2025 will satisfy our cash requirements for at least the next twelve months. However, we may need to raise additional funds to take advantage of presently unanticipated strategic opportunities, satisfy our other cash requirements from time to time, or strengthen our financial position.
Sales to our top 10 customers in the fiscal years ended December 31, 2024, 2023 and 2022 accounted for approximately 72%, 66% and 67% of our net revenue, respectively. Although we continue to seek to broaden our customer base by penetrating new markets and further expanding internationally, we expect to see continuing industry consolidation activity and customer concentration.
Sales to our top 10 customers in the fiscal years ended December 31, 2025, 2024 and 2023 accounted for approximately 84%, 91% and 90% of our net revenue, respectively. Although we continue to seek to broaden our customer base by penetrating new markets and further expanding domestically and internationally, we expect to see continuing industry consolidation activity and customer concentration.
In addition, we outsource a portion of our research and development activities to certain third-party partners with development centers located in different countries, particularly Ukraine and India. 28 Table of Contents Our international operations, international operations of our resellers, contract manufacturers and outsourcing partners, and our efforts to maintain and increase revenue in international markets are subject to a number of risks, which are generally greater with respect to emerging market countries, including the following: • growth and stability of the economy in one or more international regions, including regional economic impacts of the Middle East and Russia-Ukraine conflicts and potential escalations and broader regional conflicts, and tensions between China and Taiwan and the United States; • fluctuations in currency exchange rates; • ability of certain non-U.S. customers to timely make payments in U.S. dollar due to local government currency controls; • changes in foreign government regulations and telco standards; • import and export license requirements, tariffs, taxes, economic sanctions, contractual limitations and other trade barriers; • our significant reliance on resellers and others to purchase and resell our products and solutions, particularly in our Video business and in emerging market countries; • availability of credit, particularly in emerging market countries; • longer collection periods and greater difficulty in enforcing contracts and collecting accounts receivable, especially from smaller customers and resellers, particularly in emerging market countries; • compliance with the FCPA, the U.K.
Our international operations, international operations of our contract manufacturers and outsourcing partners, and our efforts to maintain and increase revenue in international markets are subject to a number of risks, which are generally greater with respect to emerging market countries, including the following: • growth and stability of the economy in one or more international regions, including regional economic impacts of the Middle East and Russia-Ukraine conflicts and potential escalations and broader regional conflicts, and tensions between China and Taiwan and the United States; • fluctuations in currency exchange rates; • ability of certain non-U.S. customers to timely make payments in U.S. dollar due to local government currency controls; • changes in foreign government regulations and telco standards; • import and export license requirements, tariffs and trade policies, taxes, economic sanctions, contractual limitations and other trade barriers; • availability of credit, particularly in emerging market countries; • longer collection periods and greater difficulty in enforcing contracts and collecting accounts receivable, especially from smaller customers and resellers, particularly in emerging market countries; • compliance with the FCPA, the U.K.
If Comcast or other significant Broadband customers deploy our solutions slower or at a scale that is lower than we anticipate, our operating results, financial condition and cash flows could be materially and adversely effected. In addition, in most quarters, we are involved in one or more relatively large individual transactions with respect to our Broadband and/or Video business.
If our significant customers deploy our solutions slower or at a scale that is lower than we anticipate, our operating results, financial condition and cash flows could be materially and adversely affected. In addition, in most quarters, we are involved in one or more relatively large individual transactions.
Other legislation relating to these matters, in many cases general legislation similar to the CCPA, has been proposed or adopted in several other states. Aspects of the CCPA, CPRA and these other laws and regulations, as well as their enforcement, remain unclear. The U.S. federal government also is contemplating federal privacy legislation.
Other legislation relating to these matters, in many cases general legislation similar to the CCPA, has been proposed or adopted in several other states. Aspects of the CCPA, CPRA and these other laws and regulations, as well as their enforcement, remain unclear.
Laws and regulations relating to privacy and data protection continue to evolve in various jurisdictions, with existing laws and regulations subject to new and differing interpretations and new laws and regulations being proposed and adopted.
Laws and regulations relating to these matters continue to evolve in various jurisdictions, with existing laws and regulations subject to new and differing interpretations and new laws and regulations being proposed and adopted.
Any resulting delays could negatively impact our product development efforts, operating results and our business. In addition, increased costs associated with managing or relocating our outsourced engineering teams in Ukraine, or engaging with alternative engineering resources outside of Ukraine, could negatively impact our operating results and financial condition.
Any resulting delays could negatively impact our product development efforts, operating results and our business. In addition, increased costs associated with managing or relocating our outsourced engineering teams in Ukraine, or engaging with alternative engineering resources outside of Ukraine, could negatively impact our operating results and financial condition. We may not be able to effectively manage our operations.
Any provision of our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock. 30 Table of Contents Our common stock price may be extremely volatile, and the value of an investment in our stock may decline.
Any provision of our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.
We are monitoring and managing our cash position in light of ongoing market conditions due to potential volatility and uncertainty in the banking and financial services sector, and the Middle East and Russia-Ukraine conflicts, and related macroeconomic conditions.
We are monitoring and managing our cash position in light of ongoing market conditions due to general economic and market conditions, volatility and uncertainty in the banking and financial services sector, overall fluctuations in U.S. equity markets, the Middle East and Russia-Ukraine conflicts, and related macroeconomic conditions.
The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations. We recognize potential liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due.
We recognize potential liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due.
Revenue derived from customers outside of the United States in the fiscal years ended December 31, 2024, 2023 and 2022 represented approximately 24%, 33% and 37% of our revenue, respectively.
Revenue derived from customers outside of the United States in the fiscal years ended December 31, 2025, 2024 and 2023 represented approximately 23%, 14% and 21% of our revenue, respectively.
The costs of defending any litigation, whether in cash expenses or in management time, could harm our business and materially and adversely affect our operating results and cash flows.
We may be subject to claims arising in the normal course of business. The costs of defending any litigation, whether in cash expenses or in management time, could harm our business and materially and adversely affect our operating results and cash flows.
In addition, we may be subject to customs duties that could have a significant adverse impact on our operating results or, if we are able to pass on the related costs in any particular situation, would increase the cost of the related product to our customers.
In addition, as discussed in more detail above, we may be affected by heightened or new tariffs that could have a significant adverse impact on our operating results or, if we are able to pass on the related costs in any particular situation, would increase the cost of the related product to our customers.
Further, these risks could materially and adversely affect our business if one of our sole sources, or a sole source of one of our suppliers or contract manufacturers, is adversely affected by a natural disaster or the outbreak of disease, epidemics and pandemics. These risks could also be heightened by geopolitical factors.
Further, these risks could materially and adversely affect our business if one of our sole sources, or a sole source of one of our suppliers or contract manufacturers, is adversely affected by a natural disaster, public health crises, political crises, or other unforeseen events. These risks could also be heightened by geopolitical factors.
As of December 31, 2024, we had approximately $236.9 million of goodwill rec orded on our balance sheet associated with prior acquisitions.
As of December 31, 2025, we had approximately $60.9 million of goodwill recorded on our balance sheet associated with prior acquisitions.
There can be no assurance that we will be successful in any of these efforts, and our failure to effectively manage our operations could have a material and adverse effect on our business, operating results, cash flows and financial condition.
There can be no assurance that we will be successful in any of these efforts, and our failure to effectively manage our operations could have a material and adverse effect on our business, operating results, cash flows and financial condition. 20 Table of Contents In order to manage our growth, we must be successful in addressing management succession issues and attracting and retaining qualified personnel.
The timing of deployment of our products by our customers can be subject to a number of other risks, including the availability of skilled engineering and technical personnel, and the availability of third-party equipment and services.
The timing of deployment of our products by our customers can be subject to a number of other risks, including the availability of skilled engineering and technical personnel, and the availability of third-party equipment and services. We often recognize a substantial portion of our quarterly revenue in the last month of the quarter.
As a result of these and other factors, we may be unable to increase our revenues from some or all of the markets we address, or to do so profitably, and any failure to increase revenues and profits from these customers could materially and adversely affect our operating results, financial condition and cash flows.
As a result of these and other factors, we may be unable to increase our revenues from some or all of the markets we address, or to do so profitably, and any failure to increase revenues and profits from these customers could materially and adversely affect our operating results, financial condition and cash flows. 14 Table of Contents We need to develop and introduce new and enhanced products and solutions in a timely manner to meet the needs of our customers and to remain competitive.
Based on our evaluation, we recorded a net increase in valuation allowance of $0.4 million in 2024 and a net decrease of $63.9 million in 2023, respectively, against the net deferred tax assets. In 2023, there was a full release of the valuation allowance against U.S.
Based on our evaluation, we recorded a net decrease in valuation allowance of $0.4 million in 2025 and a net increase of $0.5 million in 2024, respectively, against the net deferred tax assets.
It is possible that our practices may be deemed not to comply with those privacy and data protection legal requirements that apply to us now or in the future.
It is possible that our practices may be deemed not to comply with legal requirements relating to these matters that apply, or are asserted to apply, to us now or in the future.
(“Plexus”), which manufactures our products at its facilities in Malaysia, currently serves as our primary contract manufacturer, and currently accounts for a majority, by dollar amount, of the products that we purchase from our contract manufacturers.
(“Plexus”), which manufactures our products at its facilities in Malaysia, currently serves as our primary contract manufacturer, and currently accounts for a majority, by dollar amount, of the products that we purchase from our contract manufacturers. Since February 2025, the U.S. government has and may continue to impose tariffs on countries globally.
Unpredictable payment cycles could cause us to fail to meet or exceed the expectations of security analysts and investors for any given period. 29 Table of Contents Most of our international revenue is denominated in U.S. dollars, and fluctuations in currency exchange rates could cause our products to become relatively more expensive to customers in a particular country or region, leading to a reduction in revenue or profitability from sales in that country or region.
Most of our international revenue is denominated in U.S. dollars, and fluctuations in currency exchange rates could cause our products to become relatively more expensive to customers in a particular country or region, leading to a reduction in revenue or profitability from sales in that country or region.
We could face delays in product releases until alternative technology can be identified, licensed or developed, and integrated into our products, if we are able to do so at all. These delays, or a failure to secure or develop adequate technology, could materially and adversely affect our business, operating results, financial condition and cash flows.
We could face delays in product releases until alternative technology can be identified, licensed or developed, and integrated into our products, if we are able to do so at all.
The degree to which these changes in the global marketplace affect our financial results will be influenced by the specific details of the changes in trade policies, their timing and duration, and our effectiveness in deploying tools to address these issues.
The degree to which these changes in the global marketplace affect our financial results will be influenced by the specific details of the changes in trade policies, their timing and duration, and our effectiveness in deploying strategies to address these issues. During the fiscal year 2025, we experienced a moderate increase in tariff-related costs due to U.S. tariff policies.
To compete successfully, we must continually design, develop, manufacture and sell new or enhanced products and solutions that provide increasingly higher levels of performance and reliability and meet our customers’ changing needs.
All of the markets we address are characterized by continuing technological advancement, changes in customer requirements and evolving industry standards. To compete successfully, we must continually design, develop, manufacture and sell new or enhanced products and solutions that provide increasingly higher levels of performance and reliability and meet our customers’ changing needs.
Most of our employees in Israel are currently obligated to perform annual reserve duty in the Israel Defense Forces, and approximately 13% of those employees were called for active military duty in 2024.
Most of our employees in Israel are currently obligated to perform annual reserve duty in the Israel Defense Forces.
Additionally, we could incur significant costs in order to upgrade our cybersecurity systems and remediate damages and otherwise respond to the incident. Consequently, our business, operating results, financial condition and cash flows could be materially and adversely affected.
Additionally, we could incur significant costs in order to upgrade our cybersecurity systems and remediate damages and otherwise respond to the incident.
These covenants may adversely affect our ability to finance our operations, meet or otherwise address our capital needs, pursue business opportunities or react to market conditions, or otherwise restrict our activities or business plans. In addition, our obligations to repay principal and interest on our indebtedness could make us vulnerable to economic or market downturns.
These covenants may adversely affect our ability to finance our operations, meet or otherwise address our capital needs, pursue business opportunities or react to market conditions, or otherwise restrict our activities or business plans.
If any such tariffs are imposed on products or components that we import, including those obtained from a sole supplier or a limited group of suppliers, we could experience reduced revenues or may have to raise our prices, either of which could have an adverse effect on our business, financial condition and operating results. 16 Table of Contents These risks could be heightened during a substantial economic slowdown because our suppliers and subcontractors are more likely to experience adverse changes in their financial condition and operations during such a period.
Further increases in or expansion of tariffs on products or components that we import, including those obtained from a sole supplier or a limited group of suppliers, or our contract manufacturers, that we are unable to mitigate through our sourcing and supply chain optimization strategies could result in additional increased costs, reduced revenues and/or the need to raise prices, any of which could have an adverse effect on our business, financial condition and operating results. 18 Table of Contents These risks could be heightened during a substantial economic slowdown, which may be caused or exacerbated by the above-noted changes in the tariff and trade policies of the United States or its trading partners, because our suppliers and subcontractors are more likely to experience adverse changes in their financial condition and operations during such a period.
Demand for our products and solutions will depend on the magnitude and timing of spending by customers in each of these markets for the purpose of creating, expanding or upgrading their systems.
Our revenue has been derived from worldwide sales to broadband service providers. We expect that these markets will provide our revenue for the foreseeable future. Demand for our products and solutions will depend on the magnitude and timing of spending by customers in each of these markets for the purpose of creating, expanding or upgrading their systems.
As of December 31, 2024, we ha d 901 employees in our international operations, representing approximately 73% of our worldwide workforce.
As of December 31, 2025, we had 350 employees in our international operations, representing approximately 66% of our worldwide workforce.
We are also subject to laws and regulations to our collection and other processing of personal data of our employees, customers, and others. These laws and regulations are subject to frequent modifications and updates and require ongoing supervision.
We are also subject to laws and regulations relating to privacy, data protection, cyber security, and the collection, use, transfer, and other processing of data. These laws and regulations are subject to frequent modifications and updates and require ongoing supervision.
These trends and requirements include the following: • more consumers with more connected devices and applications; • convergence, whereby network operators bundle video, voice and data services to consumers, including mobile delivery options; • continued strong consumer demand for bandwidth-intensive video-on-demand and streaming video services, and interactive cloud applications; • the pace of adoption and deployment of high-bandwidth technology, such as DOCSIS 3.x, DOCSIS 4.0, next generation LTE and FTTP, along with virtualized broadband access solutions and distributed multiple access architectures; • continued adoption of public cloud SaaS platforms to stream video content to consumers, as well as for broadcast infrastructure workflows; • continued growth in targeted advertising as a key revenue source for video streaming service providers; • the use of digital video by businesses, governments and educational institutions globally; • efforts by regulators and governments in the United States and internationally to encourage the adoption of broadband and digital technologies, including 5G broadband networks, as well as to regulate broadband access and delivery; • the need to develop partnerships with other companies involved in broadband services and video infrastructure workflow; • the extent and nature of regulatory attitudes towards issues such as network neutrality, competition between operators, access by third parties to networks of other operators, local franchising requirements for telcos to offer video, and other new services, such as mobile video; and • the outcome of disputes and negotiations between content owners and service providers regarding rights of service providers to store and distribute recorded broadcast content, which outcomes may drive adoption of one technology over another in some cases.
These trends and requirements include the following: • more consumers with more connected devices and applications; • convergence, whereby network operators bundle video, voice and data services to consumers, including mobile delivery options; • continued strong consumer demand for bandwidth-intensive video-on-demand and streaming video services, interactive cloud applications and AI-driven bandwidth usage; • the pace of adoption and deployment of high-bandwidth technology, such as DOCSIS 3.x, DOCSIS 4.0, next generation LTE and FTTP, along with virtualized broadband access solutions and distributed multiple access architectures; • efforts by regulators and governments in the United States and internationally to encourage the adoption of broadband and digital technologies, including 5G broadband networks, as well as to regulate broadband access and delivery; • the need to develop partnerships with other companies involved in broadband services and infrastructure workflow; and • the extent and nature of regulatory attitudes towards issues such as network neutrality, competition between operators, access by third parties to networks of other operators, local franchising requirements for telcos to offer video, and other new services, such as mobile video If we fail to recognize and respond to these trends, by timely developing products, features and services required by these trends, we are likely to lose revenue opportunities and our operating results, financial condition and cash flows could be materially and adversely affected.
Federal and certain state deferred tax assets due to improved historical earnings and projected earnings. Changes in the amount of the valuation allowance in the U.S. and in foreign jurisdictions could result in a material non-cash expense or benefit in the period in which the valuation allowance is adjusted, and our results of operations could be materially affected.
Changes in the amount of the valuation allowance in the U.S. and in foreign jurisdictions could result in a material non-cash expense or benefit in the period in which the valuation allowance is adjusted, and our results of operations could be materially affected. The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations.
The effects and impact of these or other laws and regulations relating to privacy and data protection are potentially significant and may require us to modify our data processing practices and policies and to incur substantial costs and expenses in efforts to comply.
These changes may impact the duration of customer relationships and result in additional compliance and operational costs, which may affect our business. 31 Table of Contents The effects and impact of these enacted and proposed laws and regulations relating to privacy, data protection, cybersecurity, and the collection, use, transfer, and other processing of data are potentially significant and may require us to modify our data processing and cybersecurity practices and policies and to incur substantial costs and expenses in efforts to comply.
Accordingly, natural disaster in one of the geographies in which we, or our third-party manufacturers, their or our suppliers or our customers, operate could have a material and adverse effect on our business, operating results, cash flows and financial condition. 20 Table of Contents Financial, Transactional and Tax Risks We may need additional capital in the future and may not be able to secure adequate funds at all or on terms acceptable to us.
Accordingly, natural disaster in one of the geographies in which we, or our third-party manufacturers, their or our suppliers or our customers, operate could have a material and adverse effect on our business, operating results, cash flows and financial condition.
We cannot guarantee that our stock repurchase program will be fully implemented or that it will enhance long-term stockholder value. In February 2025, our Board of Directors terminated our existing $100 million stock repurchase program and approved a new stock repurchase program for the repurchase of up to $200 million of the outstanding shares of common stock.
In February 2025, our Board of Directors terminated our existing $100 million stock repurchase program and approved a new stock repurchase program for the repurchase of up to $200 million of the outstanding shares of common stock. The repurchase program expires in February 2028 and we are not obligated to repurchase a specified number or dollar value of shares.
In addition, a portion of our operating expenses relating to the cost of certain international employees, are denominated in foreign currencies, primarily the Euro, Israeli shekel, British pound, Singapore dollar, Chinese yuan and Indian rupee.
We have certain international customers who are billed in their local currency, primarily the Euro, which subjects us to foreign currency risk. In addition, a portion of our operating expenses relating to the cost of certain international employees, are denominated in foreign currencies, primarily the Israeli shekel, Euro, and Indian rupee.
We might not be able to repay our debt or borrow sufficient funds to refinance it on terms that are acceptable to us. Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.
Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe devote significant resources and designate high-level personnel, including our Chief Cybersecurity Officer (“CCO”), who reports to our Chief Financial Officer (“CFO”) , to manage the risk assessment and mitigation process. As part of our overall risk management system, we monitor and test our safeguards and train our employees on these safeguards, in collaboration with human resources, IT, and management.
Biggest changeWe also regularly monitor the effectiveness of our safeguards. We devote significant resources and designate high-level personnel, including our Chief Information Security Officer (“CISO”), who reports to our Chief Financial Officer (“CFO”), to manage the risk assessment and mitigation process.
Our CCO provides briefings to the audit committee throughout the year regarding our company’s cybersecurity risks and activities, including any recent cybersecurity incidents and related responses, cybersecurity systems testing, activities of third parties, and the like. Our audit committee provides regular updates to the board of directors on such reports.
Our CISO provides briefings to the audit committee throughout the year regarding our company’s cybersecurity risks and activities, including any recent cybersecurity incidents and related responses, cybersecurity systems testing, activities of third parties, and the like. Our audit committee provides regular updates to the board of directors on such reports.
Item 1C. CYBER SECURITY Risk Management and Strategy We have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats, and have integrated these processes into our overall risk management systems and processes.
Item 1C. CYBE R SECURITY Risk Management and Strategy We have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats, and have integrated these processes into our overall risk management systems and processes.
The processes by which o ur CCO is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents includes the following: regular reports from the Company’s 24/7 cybersecurity operations center monitoring systems and established incident reporting and escalation from the executive leaders of our corporate information technology function and Video and Broadband business segments.
The processes by which o ur CISO is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents includes the following: regular reports from the Company’s 24/7 cybersecurity operations center monitoring systems and established incident reporting and escalation from the executive leaders of our corporate information technology function and operational business leaders.
Our new CIO previously served in relevant leadership positions at other large public companies and brings to the role a wealth of information security and information technology knowledge and experience.
Our CISO previously served in relevant leadership positions at other large public companies and brings to the role a wealth of information security and information technology knowledge and experience. 36 Table of Contents
Our board of directors administers its cybersecurity risk oversight function directly as a whole, as well as through the audit committee. Our CCO is primarily responsible for assessing and managing our material risks from cybersecurity threats, in close coordination with our Senior Vice President, Operations and IT, and the senior executive leaders of our Video and Broadband business segments.
Our board of directors administers its cybersecurity risk oversight function directly as a whole, as well as through the audit committee. Our CISO is responsible for assessing and managing our material risks from cybersecurity threats, in close coordination with the senior executive leaders of our business.
In addition, o ur CCO provides annual briefings to the board of directors on cybersecurity risks and activities. Our board may also be notified and engaged as part of the Company’s cybersecurity incident response plans, depending on the significance of an incident.
In addition, o ur CISO provides annual briefings to the board of directors on cybersecurity risks and activities. Our board may also be notified and engaged as part of the Company’s cybersecurity incident response plans, depending on the significance of an incident. The CISO’s responsibilities include the Company’s cybersecurity efforts and policies, and he reports directly to our CFO.
These risk assessments include identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.
These risk assessments include identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks. 35 Table of Contents Following these risk assessments, we evaluate whether and how to re-design, implement, and maintain reasonable safeguards to mitigate identified risks and reasonably address any identified gaps in existing safeguards.
Personnel at all levels and departments are made aware of our cybersecurity policies through trainings. We engage auditors and other third parties in connection with our risk assessment processes. These service providers assist us to monitor, enhance and test our safeguards.
As part of our overall risk management system, we monitor and test our safeguards and train our employees on these safeguards, in collaboration with human resources, IT, and management. Personnel at all levels and departments are made aware of our cybersecurity policies through trainings. We engage auditors and other third parties in connection with our risk assessment processes.
Removed
Following these risk assessments, we evaluate whether and how to re-design, implement, and maintain reasonable safeguards to mitigate identified risks and reasonably address any identified gaps in existing safeguards. We also regularly monitor the effectiveness of our safeguards.
Added
These service providers assist us to monitor, enhance and test our safeguards.
Removed
Our CCO’s cybersecurity experience includes overseeing the design and implementation of cybersecurity measures and safeguards for Harmonic’s Video business software and SaaS offerings as the former long-serving Chief Technology Officer of the Video business, and responsibility at a previous company for the cybersecurity architecture and implementation of an online banking platform and an online transaction processing system for gaming. 32 Table of Contents Our CCO oversees our cybersecurity policies and processes, including those described in “Risk Management and Strategy” above, in close coordination with the senior executive leaders of our corporate information technology function and Video and Broadband business segments.
Added
Our CISO oversees our cybersecurity policies and processes, including those described in “Risk Management and Strategy” above, in close coordination with the senior executive leaders of our business.
Removed
Our current CCO will depart the Company at the end of February 2025, and will be succeeded by our new Chief Information Officer (“CIO”), who will join the Company in March 2025. The CIO’s responsibilities will include the Company’s cybersecurity efforts and policies, and he will report directly to our CFO.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that the facilities that we currently occupy are adequate for our current needs and that suitable additional space will be available, as needed, to accommodate the presently foreseeable expansion of our operations.
Biggest changeOur leases, which expire at various dates through September 2032, are for an aggregate of approximately 274,956 square feet of space. We believe that the facilities that we currently occupy are adequate for our current needs and that suitable additional space will be available, as needed, to accommodate the presently foreseeable expansion of our operations.
Item 2. PROPERTIES All of our facilities are leased, including our principal operations and corporate headquarters in San Jose, California. We have research and development centers in the United States, France, Israel and Hong Kong. We have sales and service offices primarily in the United States and various locations in Europe and Asia.
Item 2. PROP ERTIES All of our facilities are leased, including our principal operations and corporate headquarters in San Jose, California. We have research and development centers in the United States, Israel, France and India. We have sales and service offices primarily in the United States and various locations in Europe and Asia.
Removed
Our leases, which expire at various dates throu gh September 2032, are for an aggregate of approximately 291,039 s quare feet of space. We have two business segments: Broadband and Video.
Removed
Because of the interrelation of these segments, a majority of these segments use substantially all of the properties, at least in part, and we retain the flexibility to use each of the properties in whole or in part for each of the segments.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. LEGAL PROCEEDINGS This information set forth under Note 17, “Legal Proceedings”, included in Part II, Item 8 of this Annual Report on Form 10-K, is incorporated herein by reference. For an additional discussion of certain risks associated with legal proceedings, refer to “Risk Factors” above.
Biggest changeItem 3. LEGAL PROCEEDINGS This information set forth under Note 15, “Legal Proceedings”, included in Part II, Item 8 of this Annual Report on Form 10-K, is incorporated herein by reference. For an additional discussion of certain risks associated with legal proceedings, refer to “Risk Factors” above.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeTotal Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plan or Program September 28, 2024 - October 25, 2024 4,632 $ 13.72 — $ — October 26, 2024 - November 22, 2024 43,786 $ 11.97 — $ — November 23, 2024 - December 31, 2024 3,741 $ 13.19 — $ — Total 52,159 — (1) Represents shares withheld on net settlements of restricted stock units that vested under the Company’s equity incentive plan. 34 Table of Contents Stock Performance Graph Set forth below is a line graph comparing the annual percentage change in the cumulative return to the stockholders of our common stock with the cumulative return of The NASDAQ Telecommunications Index and of the Standard & Poor’s (S&P) 500 Index for the period commencing December 31, 2019 and ending on December 31, 2024.
Biggest changeThese shares may be deemed to be “issuer purchases” of shares. 38 Table of Contents Stock Performance Graph Set forth below is a line graph comparing the annual percentage change in the cumulative return to the stockholders of our common stock with the cumulative return of the Nasdaq Telecommunications Index and of the Standard & Poor’s (S&P) 500 Index for the period commencing December 31, 2020 and ending on December 31, 2025.
At this time, we expect to retain future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Unregistered Sales of Equity Securities There were no unregistered sales of equity securities during the year ended December 31, 2024 .
At this time, we expect to retain future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Unregistered Sales of Equity Securities There were no unregistered sales of equity securities during the year ended December 31, 2025.
The graph assumes that $100 was invested in each of the Company’s common stock, the S&P 500 and The NASDAQ Telecommunications Index on December 31, 2019, and assumes the reinvestment of dividends, if any. The comparisons shown in the graph below are based upon historical data.
The graph assumes that $100 was invested in each of the Company’s common stock, the S&P 500 and the Nasdaq Telecommunications Index on December 31, 2020, and assumes the reinvestment of dividends, if any. The comparisons shown in the graph below are based upon historical data.
Issuer Purchases of Equity Securities Common Stock Repurchases. In February 2022, the Board of Directors authorized the Company to repurchase up to $100 million of the Company’s outstanding shares of common stock through February 2025. This authorization was terminated by the Board of Directors on February 10, 2025 with $35.2 million of repurchases effectuated.
In February 2022, the Board of Directors authorized the Company to repurchase up to $100 million of the Company’s outstanding shares of common stock through February 2025. This authorization was terminated by the Board of Directors in February 2025 with $35.2 million of repurchases effectuated.
Holders As of February 10, 2025, there were approximately 253 holders of record of our common stock. Dividend Policy We have never declared or paid any dividends on our capital stock.
Holders As of February 19, 2026, there were approximately 234 holders of record of our common stock. Dividend Policy We have never declared or paid any dividends on our capital stock.
The Company is authorized to repurchase, from time-to-time, shares of its outstanding common stock through open market purchases and 10b5-1 trading plans, in accordance with applicable rules and regulations, at such time and such prices as management may decide. The program does not obligate the Company to repurchase any specific number of shares and may be discontinued at any time.
Issuer Purchases of Equity Securities Common Stock Repurchases. The Company is authorized to repurchase, from time-to-time, shares of its outstanding common stock through open market purchases and 10b5-1 trading plans, in accordance with applicable rules and regulations, at such time and such prices as management may decide.
Harmonic cautions that the stock price performance shown in the graph below is not indicative of, nor intended to forecast, the potential future performance of the Company’s common stock. 12/19 12/20 12/21 12/22 12/23 12/24 Harmonic Inc. $ 100.00 $ 94.74 $ 150.77 $ 167.95 $ 167.18 $ 169.62 S&P 500 $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 NASDAQ Telecom $ 100.00 $ 110.08 $ 112.44 $ 82.21 $ 90.96 $ 103.21 The information contained in this Stock Performance Graph section shall not be deemed to be “soliciting material,” “filed” or incorporated by reference in previous or future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that Harmonic specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.
Harmonic cautions that the stock price performance shown in the graph below is not indicative of, nor intended to forecast, the potential future performance of the Company’s common stock. 12/20 12/21 12/22 12/23 12/24 12/25 Harmonic Inc. $ 100.00 $ 159.13 $ 177.27 $ 176.45 $ 179.03 $ 133.83 S&P 500 $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 The Nasdaq Telecom $ 100.00 $ 102.14 $ 74.69 $ 82.63 $ 93.76 $ 107.59 The information contained in this Stock Performance Graph section shall not be deemed to be “soliciting material,” “filed” or incorporated by reference in previous or future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that Harmonic specifically incorporates it by reference into a document filed under the Securities Act or the Exchange Act.
There were no repurchase activities during the three months ended December 31, 2024. During the quarter ended December 31, 2024, we paid approximately $0.6 million in employee withholding taxes due upon the vesting of net settled equity awards.
During the quarter ended December 31, 2025, we paid approximately $0.6 million in employee withholding taxes due upon the vesting of net settled equity awards. We withheld approximately 59,185 shares of common stock from employees in connection with such net share settlement at an average price of $9.62 per share.
The actual timing and amount of repurchases are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors. During the year ended December 31, 2024, the company repurchased and retired approximately 2.4 million shares of the Company’s common stock for an aggregate amount of $30.0 million.
The program does not obligate the Company to repurchase any specific number of shares and may be discontinued at any time. The actual timing and amount of repurchases are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.
Removed
We withheld approximately 52,159 shares of common stock from employees in connection with such net share settlement at an average price of $12.21 per share. These shares may be deemed to be “issuer purchases” of shares.
Added
As of December 31, 2025, approximately $121.0 million of the share repurchase authorization remained available. During the year ended December 31, 2025, the company repurchased and retired approximately 8.1 million shares of the Company’s common stock for an aggregate amount of $79.0 million. The following table summarizes the repurchase activities for the three months ended December 31, 2025.
Added
Total Number of Shares Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plan or Program (in millions) September 27, 2025 - October 24, 2025 — n/a — $ 134.2 October 25, 2025 - November 21, 2025 — n/a — $ 134.2 November 22, 2025 - December 31, 2025 1,259,400 $ 10.54 1,259,400 $ 121.0 Total 1,259,400 1,259,400 (1) Average price paid per share in the period includes commission.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOther Income (Expense), Net Year Ended December 31, (in thousands, except percentages) 2024 2023 2022 2024 vs. 2023 Other income (expense), net $ 2,123 $ (335) $ 4,006 $ 2,458 (734) % The change in other income (expense), net in 2024, as compared to 2023, was primarily due to higher unrealized foreign exchange gains resulting from the strengthening of the U.S. dollar against the Euro in 2024. 40 Table of Contents Income Taxes Year Ended December 31, (in thousands, except percentages) 2024 2023 2022 2024 vs. 2023 Provision for (benefit from) income taxes $ 18,716 $ (64,853) $ 16,303 $ 83,569 (129) % The change in provision for (benefit from) income taxes for 2024, as compared to 2023, was primarily due to the prior period release of the valuation allowance against U.S.
Biggest changeOther Income (Expense), Net Year Ended December 31, (in thousands, except percentages) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Other income (expense), net $ (1,420) $ 3,267 $ (157) $ (4,687) (143)% $ 3,424 * *Not meaningful Fiscal 2025 compared to Fiscal 2024 The change in other income (expense), net in 2025, as compared to 2024, was primarily due to higher unrealized foreign exchange losses resulting from the strengthening of the Euro against U.S. dollar in 2025.
Investing Activities Net cash used in investing activities increased by $0.7 million in 2024, as compared to 2023, primarily due to higher purchases of property and equipment in fiscal 2024.
Fiscal 2024 compared to Fiscal 2023 Net cash used in investing activities increased by $0.7 million in 2024, as compared to 2023, primarily due to higher purchases of property and equipment in 2024.
Our customers’ spending patterns are dependent on a variety of factors, including but not limited to: economic conditions in the United States and international markets, and impact of factors such as the Middle East and Russia-Ukraine conflicts, inflation, changes in interest rates, potential supply chain disruptions, volatility in capital markets and foreign currency fluctuations; volatility and uncertainty in the banking and financial services sector; access to financing; annual budget cycles of each of the industries we serve; impact of industry consolidations; customer end-market conditions; customers suspending or reducing spending in anticipation of new products or new standards; impact of new or proposed tariffs; and new industry trends and/or technology shifts.
Our customers’ spending patterns are dependent on a variety of factors, including but not limited to: economic conditions in the United States and international markets, and impact of factors such as the Middle East and Russia-Ukraine conflicts, inflation, changes in interest rates, potential supply chain disruptions, volatility in capital markets and foreign currency fluctuations; volatility and uncertainty in the banking and financial services sector; access to financing; annual budget cycles of each of the industries we serve; impact of industry consolidations; customer end-market conditions; customers suspending or reducing spending in anticipation of new products or new standards; impact of heightened, new, or proposed tariffs; and new industry trends and/or technology shifts.
We continually evaluate our cash needs and may decide it is best to raise additional capital or seek alternative financing sources to fund our operations and the growth of our business, to take advantage of unanticipated strategic opportunities, or to strengthen our financial position, including through drawdowns on existing or new debt facilities or new financing (debt and equity) funds.
We continually evaluate our cash needs and may decide it is best to raise additional capital or seek alternative financing sources to fund our operations and the growth of our business, to take advantage of unanticipated strategic opportunities, or to strengthen our financial position, including through drawdowns on existing or new debt facilities or new debt and equity financing.
Material Cash Requirements Our principal uses of cash will include repayments of debt and related interest, purchases of inventory, stock repurchases, payments for payroll, restructuring expenses, and other operating expenses related to the development and marketing of our products, purchases of property and equipment, facility leases, and other contractual obligations for the foreseeable future.
Material Cash Requirements Our principal uses of cash include repayments of debt and related interest, purchases of inventory, stock repurchases, payments for payroll, restructuring expenses, and other operating expenses related to the development and marketing of our products, purchases of property and equipment, facility leases, and other contractual obligations for the foreseeable future.
We believe our cOS solutions resolve space and power constraints in broadband operator facilities, eliminate dependence on hardware upgrade cycles and significantly reduce total cost of ownership, and are helping us to be a major player in the broadband access market.
We believe our cOS solutions resolve space and power constraints in broadband operator facilities, eliminate dependence on hardware upgrade cycles and significantly reduce total cost of ownership, and are helping us to be a major player in the broadband market.
Conversely, we may also from time to time determine that it is in our best interests to voluntarily repay certain indebtedness early. We believe that our current sources of funds will provide us with adequate liquidity during the 12-month period following December 31, 2024, as well as in the long-term.
Conversely, we may also from time to time determine that it is in our best interests to voluntarily repay certain indebtedness early. We believe that our current sources of funds will provide us with adequate liquidity during the 12-month period following December 31, 2025, as well as in the long-term.
We believe it is not more likely than not the California and Swiss net deferred tax assets of $32.8 million and $4.7 million, respectively, will be realizable. Accordingly, full valuation allowances of $32.8 million and $4.7 million are maintained against the California and Swiss net deferred tax assets, respectively.
We believe it is not more likely than not the California and Swiss net deferred tax assets of $32.7 million and $0.4 million, respectively, will be realizable. Accordingly, full valuation allowances of $32.7 million and $0.3 million are maintained against the California and Swiss net deferred tax assets, respectively.
Refer to Note 10, “Debt,” of the Notes to our Consolidated Financial Statements for additional information regarding the interest rates applicable to our outstanding loans.
Refer to Note 9, “Debt,” of the Notes to our consolidated financial statements for additional information regarding the interest rates applicable to our outstanding loans.
For details regarding our indebtedness and lease obligations, refer to Note 10, “Debt”, and Note 3, “Leases”, respectively, of the Notes to our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.
For details regarding our indebtedness and lease obligations, refer to Note 8, “Debt”, and Note 4, “Leases”, respectively, of the Notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
We classify our total revenue in two categories, “Appliance and integration” and “SaaS and service.” The “Appliance and integration” revenue category includes hardware, licenses and professional services and is reflective of non-recurring revenue, while the “SaaS and service” category includes usage fees for our SaaS platform and support service revenue from our appliance-based customers and reflects our recurring revenue stream.
We classify our total revenue in two categories, “Appliance and integration” and “SaaS and service.” The “Appliance and integration” revenue category includes hardware, licenses and professional services and is reflective of non-recurring revenue, while the “SaaS and service” category includes usage fees for our SaaS platform and support service revenue and reflects our recurring revenue stream.
Our cOS solutions, which can be deployed based on a centralized, distributed access architecture (DAA) or hybrid architecture, enable our customers to migrate to multi-gigabit broadband capacity and the fast deployment of DOCSIS and/or fiber-to-the-home (FTTH) data, video and voice services.
Our cOS solutions, which can be deployed based on a centralized, distributed access architecture (“DAA”) or hybrid architecture, enable our customers to migrate to multi-gigabit broadband capacity and the fast deployment of DOCSIS and/or fiber-to-the-home (“FTTH”) data, video and voice services.
We believe that the following accounting estimates involve a greater degree of judgement or complexity than our other accounting estimates.
We believe that the following accounting estimates involve a greater degree of judgment or complexity than our other accounting estimates.
These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. Management’s judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets.
These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheets. 41 Table of Contents Management’s judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets.
The restructuring and related charges are primarily included in “Operating expenses-restructuring and related charges” in the Consolidated Statements of Operations.
The restructuring and related charges are primarily included in “Operating expenses-restructuring and related charges” in the consolidated statement of operations.
If actual market conditions deteriorate from those anticipated by management, additional allowances for excess and obsolete inventory could be required and may be material to our results of operations. The gross amount of inventory reserves charged to the cost of reven ues totaled $11.0 million and $7.4 million, in 2024 and 2023, respectively.
If actual market conditions deteriorate from those anticipated by management, additional allowances for excess and obsolete inventory could be required and may be material to our results of operations. The gross amount of inventory reserves charged to the cost of revenues totaled $2.1 million and $9.4 million, in 2025 and 2024, respectively.
As of December 31, 2024, we had outstanding $128.1 million in aggregate principal amount of indebtedness, consisting of our $75.0 million Revolving Facility and our $39.5 million Term Facility loan under our Credit Agreement, and other debts, of which $7.2 million is scheduled to become due in the 12-month period following December 31, 2024.
As of December 31, 2025, we had outstanding $112.3 million in aggregate principal amount of indebtedness, consisting of our $75.0 million Revolving Facility and our $37.3 million Term Facility loan under our Credit Agreement, and other debts, of which $3.0 million is scheduled to become due in the 12-month period following December 31, 2025.
In February 2025, the Board of Directors authorized us to repurchase, from time to time, up to $200 million of our outstanding shares of common stock through February 2028, at such time and such prices as management may decide. The program does not obligate us to repurchase any specific number of shares and may be discontinued at any time.
In February 2025, the Board of Directors authorized us to repurchase, from time to time, up to $200 million of our outstanding shares of common stock through February 2028 (the "Share Repurchase Authorization"), at such time and such prices as management may decide.
Research and Development Expenses Year Ended December 31, (in thousands, except percentages) 2024 2023 2022 2024 vs. 2023 Research and development $ 120,975 $ 126,282 $ 120,307 $ (5,307) (4) % as % of total net revenue 18 % 21 % 19 % Our research and development expenses consist primarily of employee salaries and related expenses, contractors and outside consultants, supplies and materials, equipment depreciation and facilities costs, all of which are associated with the design and development of new products and enhancements of existing products.
Research and Development Expenses Year Ended December 31, (in thousands, except percentages) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Research and development $ 76,329 $ 72,574 $ 69,708 $ 3,755 5% $ 2,866 4% as % of total net revenue 21% 15% 18% Our research and development expenses consist primarily of employee salaries and related expenses, contractors and outside consultants, supplies and materials, equipment depreciation and facilities costs, all of which are associated with the design and development of new products and enhancements of existing products.
As of December 31, 2024, our total minimum lease payments are $23.5 million, of which $5.8 million is due in the 12-month period following December 31, 2024.
As of December 31, 2025, our total minimum lease payments are $24.0 million, of which $6.7 million is due in the 12-month period following December 31, 2025.
Our Broadband strategy is focused on continuing to develop and deliver software-based broadband access technologies, which we refer to as our cOS solutions, to our broadband operator customers. We believe our cOS software-based broadband access solutions are superior to hardware-based systems and deliver unprecedented scalability, agility and cost savings for our customers.
We believe our cOS software-based broadband solutions are superior to hardware-based systems and deliver unprecedented scalability, agility and cost savings for our customers.
As of December 31, 2024, our principal sources of liquidity consisted of cash and cash equivalents of $101.5 million, net accounts receivable of $178.0 million, $30.0 million from our Master Receivables Purchase Agreement (described below), and $82.0 million remaining available under the Revolving Facility of our Credit Agreement, and financing from French government agencies.
As of December 31, 2025, our principal sources of liquidity consisted of cash and cash equivalents of $124.1 million, net accounts receivable of $85.9 million, and $82.0 million remaining available under the Revolving Facility of our Credit Agreement.
We also recorded total lease-related impairment and other charges of $10.9 million. These charges primarily consisted of $3.9 million in right-of-use asset impairments, $4.3 million in leasehold improvement impairments, and $2.7 million related to the fair value of other unrecoverable facility costs. Refer to Note 3, “Leases,” of the Notes to our consolidated financial statements for additional information.
Fiscal 2024 compared to Fiscal 2023 In 2024, we recorded total lease-related impairment and other charges of $10.9 million, which included $3.9 million of right-of-use asset impairments, $4.3 million in leasehold improvement impairments, and $2.7 million related to the fair value of unrecoverable facility costs. There were no asset impairment and related charges in 2023.
Refer to Note 9, “Restructuring and Related Charges,” of the Notes to our Consolidated Financial Statements for additional information.
In 2024, we recorded total lease-related impairment and other charges of $10.9 million. Refer to Note 3, “Leases” of the Notes to our consolidated financial statements for additional information.
The cash we generate from our operations enables us to fund ongoing operations, our research and development projects for new products and technologies, and other business activities.
Federal and certain state deferred tax assets. Liquidity and Capital Resources We expect to continue to manage our cash from operations effectively, together with deploying cash in working capital for growth. The cash we generate from our operations enables us to fund ongoing operations, our research and development projects for new products and technologies, and other business activities.
Interest Expense, Net Year Ended December 31, (in thousands, except percentages) 2024 2023 2022 2024 vs. 2023 Interest expense, net $ (7,326) $ (2,696) $ (5,040) $ (4,630) 172 % Interest expense, net increased in 2024, as compared to 2023, primarily due to higher interest rates for the borrowings under the Credit Agreement compared to the interest rate for the 2024 Notes.
Fiscal 2024 compared to Fiscal 2023 Interest expense, net increased in 2024, as compared to 2023, primarily due to higher interest rates for the borrowings under the Credit Agreement compared to the interest rate for the 2024 Notes.
The decrease was primarily driven by a $28.3 million reduction in product sales across most regions, mainly due to project delays by our customers, and a $6.6 million decrease in support services, resulting from lower customer support contract renewals. These decreases were partially offset by a $6.0 million increase in SaaS revenue, primarily driven by the acquisition of new customers.
The decrease in net sales in fiscal 2024, as compared to fiscal 2023, was primarily driven by reduction in product sales across most regions, mainly due to project delays by our customers, partially offset by higher revenue from SaaS mainly due to acquisition of new customers.
The Broadband segment revenue growth was mainly due to higher volume from our existing customers, including $83.9 million from new technology deployments with one Tier 1 customer and $26.5 million from expansion deployments with another Tier 1 customer.
Americas net revenue increased by $114.2 million in 2024, as compared to 2023, primarily due to higher appliance and integration revenue driven by higher volume from our existing customers, including $83.9 million from new technology deployment with one Tier 1 customer and $26.5 million expansion deployment with another Tier 1 customer.
Financing Activities Net cash used in financing activities increased by $28.3 million in 2024, as compared to 2023, primarily due to the $115.5 million repayment of the 2024 Notes and the $30.0 million of stock repurchases in fiscal 2024, partially offset by the proceeds of $75 million in loans under the Revolving Facility and $40 million in loans under the Term Facility. 43 Table of Contents New Accounting Pronouncements Refer to Note 2 to the accompanying Consolidated Financial Statements for a full description of recent accounting pronouncements, including the dates of adoption and estimated effects, if any, on results of operations and financial condition. 44 Table of Contents
Fiscal 2024 compared to Fiscal 2023 Net cash used in financing activities increased by $28.3 million in 2024, as compared to 2023, primarily due to the $115.5 million repayment of the 2024 Notes and the $30.0 million of stock repurchases in 2024, partially offset by the proceeds of $75 million in loans under the Revolving Facility and $40 million in loans under the Term Facility. 47 Table of Contents Discontinued Operations As previously noted, the Company determined that the Disposition of the Video business met the held-for-sale discontinued operations criteria upon execution of the Put Option Agreement.
Business Overview We are a leading global provider of (i) broadband solutions that enable broadband operators to more efficiently and effectively deploy high-speed internet, for data, voice and video services for their customers and (ii) versatile and high performance video delivery software, products, system solutions and services that enable our customers to efficiently create, prepare, store, playout and deliver a full range of high-quality broadcast and streaming video services to consumer devices, including televisions, personal computers, laptops, tablets and smart phones.
OVERVIEW We are a leading global provider of broadband solutions that enable broadband operators to more efficiently and effectively deploy high-speed internet, for data, voice and video services for their customers.
Gross Profit Year Ended December 31, (in thousands, except percentages) 2024 2023 2022 2024 vs. 2023 Gross profit $ 365,921 $ 312,545 $ 315,884 $ 53,376 17% as % of total net revenue (“gross margin”) 53.9 % 51.4 % 50.5 % 2.5 % Our gross margins are dependent upon, among other factors, the proportion of software sales, product mix, supply chain impacts, customer mix, product introduction costs, price reductions granted to customers and achievement of cost reductions. 38 Table of Contents Our gross margin improved by 250 basis points in 2024, as compared to 2023, contributed by both the Broadband and Video segments.
Gross Profit Year Ended December 31, (in thousands, except percentages) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Gross profit $ 174,745 $ 240,107 $ 178,121 $ (65,362) (27)% $ 61,986 35% as % of total net revenue (“gross margin”) 48.5% 49.2% 45.9% (0.7)% 3.3% Our gross margins are dependent upon, among other factors, the product mix, supply chain impacts, customer mix, product introduction costs, price reductions granted to customers and achievement of cost reductions.
While market activity leads us to believe these near-term headwinds for our Video business may be receding, the capital spending slow-down may persist longer than expected. CRITICAL ACCOUNTING ESTIMATES Our consolidated financial statements and the related notes included elsewhere in this report are prepared in accordance with U.S. GAAP.
CRITICAL ACCOUNTING ESTIMATES Our consolidated financial statements and the related notes included elsewhere in this report are prepared in accordance with U.S. GAAP.
In the event funds from foreign operations are needed to fund cash needs in the United States and if U.S. taxes have not already been previously accrued, we may be required to accrue and pay additional U.S. and foreign withholding taxes in order to repatriate these funds. 42 Table of Contents Summary of Cash Flows Year Ended December 31, (in thousands) 2024 2023 2022 Net cash provided by (used in) Operating activities $ 61,917 $ 7,059 $ 5,476 Investing activities (9,186) (8,475) (1,288) Financing activities (33,269) (4,990) (43,133) Effect of foreign exchange rate changes on cash and cash equivalents (1,942) 1,089 (4,900) Net increase (decrease) in cash, cash equivalents and restricted cash $ 17,520 $ (5,317) $ (43,845) Operating Activities Net cash provided by operating activities increased by $54.9 million in 2024, as compared to 2023, primarily due to higher income before income taxes, adjusted for non-cash asset impairment and other charges in fiscal 2024.
We do not expect the disposition of the Video business to have a material impact on our ongoing liquidity and capital resources. 46 Table of Contents Summary of Cash Flows from Continuing and Discontinued Operations Year Ended December 31, (in thousands) 2025 2024 2023 Net cash provided by (used in) Operating activities $ 107,966 $ 61,917 $ 7,059 Investing activities (11,080) (9,186) (8,475) Financing activities (81,390) (33,269) (4,990) Effect of foreign exchange rate changes on cash and cash equivalents 7,176 (1,942) 1,089 Net increase (decrease) in cash, cash equivalents and restricted cash $ 22,672 $ 17,520 $ (5,317) Operating Activities Fiscal 2025 compared to Fiscal 2024 Net cash provided by operating activities increased by $46.0 million in 2025, as compared to 2024, primarily driven by improved working capital performance and lower cash tax payments of $14.5 million in fiscal 2025.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the consolidated financial statements and the related notes. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.
Item 7. MANAGE MENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and the related notes included in this Annual Report on Form 10-K.
We conduct business in three geographic regions—the Americas, EMEA and APAC—and operate in two segments, Broadband and Video. Our Broadband business sells broadband access solutions and related services, including our cOS TM software-based broadband access solutions, to broadband operators globally.
We conduct business in three geographic regions—the Americas, Europe, the Middle East, and Africa (“EMEA”), and Asia-Pacific(“APAC”). We sell broadband solutions and related services, including our cOS™ software-based broadband solutions, to broadband operators globally. Historically, our revenue has been dependent upon spending in the cable and telco industries.
Year Ended December 31, (in thousands, except percentages) 2024 2023 2022 2024 vs. 2023 Cost of revenue $ 460 $ 687 $ 533 $ (227) (33) % Operating expenses Restructuring and related charges $ 15,973 $ 809 $ 3,341 $ 15,164 1,874 % Total restructuring and related charges $ 16,433 $ 1,496 $ 3,874 $ 14,937 998 % Restructuring and related charges increased in 2024, as compared to 2023, primarily driven by higher severance and employee benefit costs recorded in fiscal 2024, in connection with the 2024 restructuring activities.
Year Ended December 31, (in thousands, except percentages) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Restructuring and related charges $ 1,315 $ 2,741 $ 110 $ (1,426) (52)% $ 2,631 * *Not meaningful Fiscal 2025 compared to Fiscal 2024 Restructuring and related charges decreased in 2025, as compared to 2024, mainly due to higher severance and employee benefit costs recorded in fiscal 2024, in connection with the 2024 restructuring activities. 44 Table of Contents Fiscal 2024 compared to Fiscal 2023 Restructuring and related charges increased in 2024, as compared to 2023, primarily due to severance and employee benefit costs recorded in fiscal 2024, in connection with the 2024 restructuring activities.
As of December 31, 2024, there were no receivables sold under this agreement. Our cash and cash equivalents of $101.5 million as of December 31, 2024 consisted of bank deposits held throughout the world and money market funds, of which $46.0 million was held outside of the United States.
Our cash and cash equivalents of $124.1 million as of December 31, 2025 consisted of bank deposits held throughout the world and money market funds, of which $58.3 million was held outside of the United States. At present, such foreign funds are considered to be indefinitely reinvested in foreign countries to the extent of indefinitely reinvested foreign earnings.
The decline in the Video segment was primarily due to lower appliance product sales as a result of customer project delays, while in the Broadband segment, one of our large Tier 1 customers reduced spending in 2024 due to high inventory levels from prior years’ purchases.
EMEA net revenue decreased by $14.6 million, as compared to 2023, primarily due to one of our large Tier 1 customer reduced spending in 2024 due to high inventory levels from prior year’s purchases. APAC net revenue was relatively flat compared to 2023.
As we attempt to further diversify our customer base in these markets, we may need to continue to build alliances with other equipment manufacturers and suppliers, cloud service providers, content providers, resellers and system integrators, managed services providers and software developers; adapt our products for new applications; take orders at prices resulting in lower margins; and build internal expertise to handle the particular operational, payment, financing and/or contractual demands of our customers, which could result in higher operating costs for us.
As we attempt to further diversify our customer base in these markets, we may need to continue to build alliances with other equipment manufacturers and suppliers; take orders at prices resulting in lower margins. Our strategy is focused on continuing to develop and deliver software-based broadband technologies, which we refer to as our cOS solutions, to our broadband operator customers.
APAC net revenue decreased by $3.6 million in 2024, as compared to 2023, primarily due to a decline in Video product sales.
SaaS and Service net revenue increased by $3.3 million in 2025, as compared to 2024, primarily driven by expanded service offerings.
The research and development expenses are net of French Research and Development credits. Research and development expenses decreased by $5.3 million in 2024, as compared to 2023.
The research and development expenses are net of French Research and Development credits. Research and development expenses increased in both 2025 compared to 2024 and 2024 compared to 2023, mainly due to increased investment supporting business growth. As discussed previously, the results of the Video business have been classified as discontinued operations for all periods presented.
The operating margin of our Broadband segment also improved in 2024 primarily due to higher revenue and gross margin expansion. Video Our Video segment net revenue decreased by $28.9 million in 2024, as compared to 2023.
Investing Activities Fiscal 2025 compared to Fiscal 2024 Net cash used in investing activities increased by $1.9 million in 2025, as compared to 2024, primarily due to higher purchases of property and equipment in 2025.
Removed
Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and those listed under Item 1A, Risks Factors.
Added
This discussion contains forward-looking statements that based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in the forward-looking statements as a result of various factors, including, but are not limited to, those discussed below and those listed under Item 1A, Risks Factors.
Removed
For discussion of comparison of our results of operations and cash flows for the fiscal years ended December 31, 2023 and 2022, refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 16, 2024.
Added
In the meantime, we believe our business will continue to experience strong long-term growth as our customers adopt and deploy our virtualized DOCSIS, CMTS and FTTH solutions and distributed access architectures. Previously, we managed and operated our business under two reportable segments: Broadband and Video.
Removed
Our Video business sells video processing, production and playout solutions, and services worldwide to cable operators and satellite and telco Pay-TV service providers, which we refer to collectively as “service providers,” as well as to broadcast and media companies, including streaming media companies.
Added
On December 8, 2025, we entered into a Put Option Agreement (the “Put Option Agreement”) to sell our Video business to Leone Media Inc. (d/b/a MediaKind) (the “Buyer”).
Removed
Our Video business infrastructure solutions are delivered either through shipment of our products, software licenses or as SaaS subscriptions. Historically, our revenue has been dependent upon spending in the cable, satellite, telco, broadcast and media industries, including streaming media.
Added
Under the Put Option Agreement, the Buyer has irrevocably provided the Company with the right to require the Buyer to purchase our Video business for a purchase price of $145 million in cash (the “Disposition”).
Removed
In the meantime, we believe our Broadband segment will continue to experience strong long-term growth as our customers adopt and deploy our virtualized DOCSIS, CMTS and FTTH solutions and distributed access architectures. 36 Table of Contents We believe a material and growing portion of the opportunities for our Video business are linked to the industry and our customers (i) continuing to adopt streaming technologies to capture, process and deliver video content to consumers and, increasingly, utilizing public cloud solutions like our VOS SaaS platform to do so; (ii) transforming existing broadcast infrastructure workflows into more flexible, efficient and cost-effective operations running in public clouds; and (iii) for those customers maintaining on-premise video delivery infrastructure, continuing to upgrade and replace aging equipment with next-generation software-based appliances that significantly reduce operational complexity.
Added
The purchase price is subject to a potential adjustment based on the amount, on the date the Disposition is consummated, of net working capital of the Video business, the cash and debt of the entities to be sold in the Disposition, as well as the amount of specified selling expenses.
Removed
Our Video business strategy is focused on continuing to develop and deliver products, solutions and services to enable and support these trends. In recent quarters, we have seen a slow-down in capital spending by some of our Video business customers, which has caused delays for some of our appliance-based projects.
Added
The closing of the Disposition is subject to the satisfaction of customary closing conditions, including the completion of the required consultation process with the relevant employee works council in France regarding our asset sale.
Removed
To the extent that we determine the deferred tax assets are realizable on a more likely than not basis and an adju stment is needed, an adjustment will be recorded in the fiscal period the determination is made. 37 Table of Contents Results of Operations Net Revenue The following table presents the breakdown of net revenue by category and geographical region: Year Ended December 31, (in thousands, except percentages) 2024 2023 2022 2024 vs. 2023 Appliance and integration $ 507,378 $ 435,878 $ 473,806 $ 71,500 16 % as % of total net revenue 75 % 72 % 76 % SaaS and service 171,344 172,029 151,151 (685) (0.4) % as % of total net revenue 25 % 28 % 24 % Total net revenue $ 678,722 $ 607,907 $ 624,957 $ 70,815 12 % Americas $ 557,255 $ 447,700 $ 452,869 $ 109,555 24 % as % of total net revenue 82 % 74 % 73 % EMEA 92,553 127,689 133,095 (35,136) (28) % as % of total net revenue 14 % 21 % 21 % APAC 28,914 32,518 38,993 (3,604) (11) % as % of total net revenue 4 % 5 % 6 % Total net revenue $ 678,722 $ 607,907 $ 624,957 $ 70,815 12 % Appliance and integration net revenue increased by $71.5 million in 2024, as compared to 2023, primarily due to a $99.8 million increase in our Broadband segment revenue, partially offset by a $28.3 million decrease in our Video segment revenue.
Added
The Disposition is expected to close during the first half of fiscal 2026. 40 Table of Contents In accordance with the authoritative guidance for discontinued operations, the Company determined that the Disposition of the Video business met the held-for-sale and discontinued operations accounting criteria upon execution of the Put Option Agreement.
Removed
The increase in our Broadband segment revenue was mainly driven by certain customers ramping up due to technology transitions and new deployments. The decrease in our Video segment revenue was mainly attributable to lower sales across most regions due to project delays by our customers.
Added
Accordingly, the Company reclassified the results of our Video business as discontinued operations in the consolidated statements of operations for all periods presented. Additionally, the related assets and liabilities associated with the Video business were classified as held-for-sale in the consolidated balance sheets as of December 31, 2025.
Removed
SaaS and service net revenue decreased by $0.7 million in 2024, as compared to 2023, primarily due to a $6.6 million decrease in Video segment support services resulting from lower contract renewals, partially offset by a $6.0 million increase in Video SaaS revenue, mainly driven by the acquisition of new customers.
Added
Refer Note 3 — Discontinued Operations to our consolidated financial statements for additional information. Following the classification of the Video business as discontinued operations, the Company’s continuing operations now consist of a single reportable segment, Broadband. Unless otherwise noted, all amounts, percentages and discussions below reflect only the results of operations and financial condition of our continuing operations.
Removed
Americas net revenue increased by $109.6 million in 2024, as compared to 2023, primarily driven by a $115.1 million increase in our Broadband segment revenue, partially offset by a $5.5 million decrease in our Video segment revenue.
Added
To the extent that we determine the deferred tax assets are realizable on a more likely than not basis and an adjustment is needed, an adjustment will be recorded in the fiscal period the determination is made.
Removed
The decrease in our Video segment revenue was mainly attributable to lower sales across most regions due to project delays by our customers. EMEA net revenue decreased by $35.1 million in 2024, as compared to 2023, driven by lower sales of $20.5 million in the Video segment and $14.6 million in the Broadband segment.
Added
Results of Operations Net Revenue The following table sets forth, for the periods presented, summary information regarding our disaggregated revenue: Year Ended December 31, (in thousands, except percentages) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Appliance and integration $ 302,787 $ 433,795 $ 334,029 $ (131,008) (30)% $ 99,766 30% as % of total net revenue 84% 89% 86% SaaS and service 57,736 54,405 54,453 3,331 6% (48) (0)% as % of total net revenue 16% 11% 14% Total net revenue $ 360,523 $ 488,200 $ 388,482 $ (127,677) (26)% $ 99,718 26% Americas $ 320,570 $ 449,346 $ 335,154 $ (128,776) (29)% $ 114,192 34% as % of total net revenue 89% 92% 86% EMEA 33,894 36,420 50,994 (2,526) (7)% (14,574) (29)% as % of total net revenue 9% 7% 13% APAC 6,059 2,434 2,334 3,625 149% 100 4% as % of total net revenue 2% 1% 1% Total net revenue $ 360,523 $ 488,200 $ 388,482 $ (127,677) (26)% $ 99,718 26% Fiscal 2025 compared to Fiscal 2024 Appliance and integration net revenue decreased by $131.0 million in 2025, as compared to 2024, primarily due to customer deployment timing delays associated with DOCSIS 4.0 and network readiness.
Removed
The margin expansion was primarily contributed by Broadband segment, benefiting from a favorable product mix. Video segment margin also improved, supported by an increase in SaaS as a percentage of segment revenue and additional benefits from a favorable appliance product mix.
Added
Americas net revenue decreased by $128.8 million in 2025, as compared to 2024, primarily due to a $148.0 million reduction in the U.S. appliance and integration revenue resulting from customer deployment timing delays associated with DOCSIS 4.0 and network readiness, partially offset by an $19.2 million increase in the LATAM region, mainly driven by Fiber-to-the-Home project deployments.
Removed
The decrease was primarily driven by a $7.6 million decline in the Video segment due to headcount reductions from restructuring activities and a $3.7 million decrease in the Broadband segment due to resources being redeployed to support certain customer projects. These decreases were partially offset by a $6.0 million increase in investments to support the growth of our Broadband business.
Added
EMEA net revenue decreased by $2.5 million compared to 2024, primarily attributed to reduced expansion activity from a large customer in the region.
Removed
Selling, General and Administrative Expenses Year Ended December 31, (in thousands, except percentages) 2024 2023 2022 2024 vs. 2023 Selling, general and administrative $ 153,124 $ 163,282 $ 146,717 $ (10,158) (6) % as % of total net revenue 23 % 27 % 23 % Selling, general and administrative expenses decreased by $10.2 million in 2024, as compared to 2023.
Added
APAC net revenue increased by $3.6 million compared to 2024, primarily driven by a DOCSIS expansion project from a new customer in the region. 42 Table of Contents Fiscal 2024 compared to Fiscal 2023 Appliance and integration net revenue increased by $99.8 million in 2024, as compared to 2023, primarily driven by certain customer ramping up due to technology transitions and new deployments.
Removed
The decrease was primarily driven by a $5.0 million reduction in spending resulting from headcount reductions related to restructuring activities in the Video business and a $5.2 million non-recurring advisory fees incurred for the strategic review of the Video business in 2023. 39 Table of Contents Asset Impairment and Related Charges Year Ended December 31, (in thousands, except percentages) 2024 2023 2022 2024 vs. 2023 Lease-related asset impairment and other charges $ 10,889 $ — $ — $ 10,889 % * Asset impairment charges $ 1,824 $ — $ — $ 1,824 % * *Not meaningful During the year ended December 31, 2024, we recorded an impairment charge of $1.8 million related to the total capitalized value of internally developed software with no future benefit.
Added
SaaS and Service net revenue was relatively flat compared to 2023.
Removed
Segment Financial Results Year Ended December 31, (in thousands, except percentages) 2024 2023 2022 2024 vs. 2023 Broadband Revenue $ 488,200 $ 388,482 $ 350,768 $ 99,718 26 % as % of total revenue 72 % 64 % 56 % 8 % Operating income 118,354 64,575 52,283 53,779 83 % Operating margin % 24 % 17 % 15 % 7 % Video Revenue $ 190,522 $ 219,425 $ 274,189 $ (28,903) (13) % as % of total revenue 28 % 36 % 44 % (8) % Operating income 2,756 (8,741) 22,322 11,497 (132) % Operating margin % 1 % (4) % 8 % 5 % Total Revenue $ 678,722 $ 607,907 $ 624,957 $ 70,815 12 % Broadband Our Broadband segment net revenue increased by $99.7 million in 2024, as compared to 2023, primarily driven by appliance and integration revenues, mainly attributed to certain customers ramping up due to technology transitions and new deployments.
Added
Gross margin declined in fiscal 2025 compared to fiscal 2024 due to an unfavorable product mix, while gross margin improved in fiscal 2024 compared to fiscal 2023, primarily as a result of favorable product mix.
Removed
Video segment operating margin improved in 2024 primarily due to realized benefits from cost saving initiatives combined with an increase in SaaS and services as a percentage of segment revenue. 41 Table of Contents Liquidity and Capital Resources We expect to continue to manage our cash from operations effectively, together with deploying cash in working capital for growth.
Added
Certain indirect corporate costs, such as IT and facility costs, previously allocated to the Video reporting segment, do not qualify for discontinued operations accounting classification and are now reported within continuing operations.
Removed
In September 2023, we entered into a Master Receivables Purchase Agreement with JPMorgan Chase Bank N.A, as purchaser. The agreement allows us, from time to time, to sell certain eligible billed receivables in an aggregate outstanding amount of up to $30 million. In September 2024, we extended the agreement termination date to September 29, 2025.
Added
These stranded costs included in research and development expenses were $3.7 million, $4.5 million and $7.5 million for 2025, 2024 and 2023, respectively. 43 Table of Contents Selling, General and Administrative Expenses Year Ended December 31, (in thousands, except percentages) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Selling, general and administrative $ 81,384 $ 79,169 $ 78,274 $ 2,215 3% $ 895 1% as % of total net revenue 23% 16% 20% Selling, general and administrative expenses increased in both 2025 compared to 2024 and 2024 compared to 2023, mainly due to increased investments supporting business growth.
Removed
At present, such foreign funds are considered to be indefinitely reinvested in foreign countries to the extent of indefinitely reinvested foreign earnings.
Added
As discussed above, the stranded costs resulting from the disposition of the Video business included in selling, general and administrative expense were $3.6 million, $4.5 million and $7.4 million for 2025, 2024 and 2023, respectively.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAccordingly, we are subject to exposure from adverse movements in foreign currency exchange rates, primarily the Euro, British pound, Israeli shekel and Japanese yen. Our U.S. dollar functional subsidiaries account for approximately 98% , 97 % and 97% of our consolidated net revenues in 2024, 2023 and 2022, respectively.
Biggest changeAccordingly, we are subject to exposure from adverse movements in foreign currency exchange rates, primarily the Euro and Israeli shekel. Our U.S. dollar functional subsidiaries account for approximately 100% of our consolidated net revenues in 2025, 2024 and 2023.
A hypothetical 100 basis point change in the interest rate would increase or decrease the interest expense on these loans for the next twelve months by approximately $1.1 million. The carrying value of the variable-rate loans approximate their fair values as the underlying interest rates are tied to the Secured Overnight Financing Rate.
A hypothetical 100 basis point change in the interest rate would increase or decrease the interest expense on these loans for the next twelve months by approximately $1.1 million. The carrying value of the variable-rate loans approximate their fair values as the underlying interest rates are tied to the Secured Overnight Financing Rate. 49 Table of Contents
In addition, a portion of our operating expenses, primarily the cost of personnel to deliver technical support on our products and professional services, sales and sales support and research and development, are denominated in foreign currencies, primarily the Euro, Israeli shekel and British pound.
In addition, a portion of our operating expenses, primarily the cost of personnel to deliver technical support on our products and professional services, sales and sales support and research and development, are denominated in foreign currencies, primarily the Israeli shekel, Euro and Indian Rupee.
Interest Rate Risk As of December 31, 2024, our variable-rate debt included the Term Loan and the Revolving Loan under the Credit Agreement, with carrying values of $39.3 million and $74.1 million, respectively, as well as other borrowings with carrying value of $10.9 million.
Interest Rate Risk As of December 31, 2025, our variable-rate debt included the Term Loan and the Revolving Loan under the Credit Agreement, with carrying values of $37.1 million and $75.0 million, respectively.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Foreign Currency Exchange Risk We market and sell our products and services through our direct sales force and indirect channel partners in North America, EMEA, APAC and Latin America.
Item 7A. QUANTITA TIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Foreign Currency Exchange Risk We market and sell our products and services through our direct sales force and indirect channel partners in the Americas, Europe, the Middle East, Africa and Asia-Pacific.
We recorded net billings denominated in foreign currencies of approximatel y 9% , 15% and 15% of total company billings in 2024, 2023 and 2022, respectively.
We recorded net billings denominated in foreign currencies of approximately 6%, 5% and 11% of total company billings in 2025, 2024 and 2023, respectively.
Removed
We use derivative instruments, primarily forward contracts, to manage exposures to foreign currency exchange rates and we do not enter into foreign currency forward contracts for trading purposes. From time to time, we use foreign currency forward contracts to hedge a portion of our exposures to changes in currency exchange rates, which result from our global operating and financing activities.
Removed
We do not use derivative financial instruments for trading or speculative purposes. A hypothetical 10% change in currency exchange rates would not have a material impact on our consolidated financial statements.
Removed
As of December 31, 2024, our debt also included fixed-rate debt with a carrying value of $2.8 million. Fixed rate debt exposes us to changes in market interest rates reflected in the fair value of the debt and to the risk that we may need to refinance maturing debt with new debt at higher rates.
Removed
Except in very limited circumstances, we do not have an obligation to repay fixed-rate debt prior to maturity and, as a result, interest rate and changes in fair value would not have a significant impact on our cash flows related to our fixed-rate debt. 45 Table of Contents

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