Harmonic Inc. (HLIT) Earnings Call Transcript & Summary

All right. Good morning, and welcome to Harmonic's 2026 Investor Day. I'm Walter Jankovic, Chief Financial Officer. For you all that are joining us here in New York and over the webcast. Thanks for being with us. Today is a special and exciting day for us. It's been 12 years since we've done an in-person Investor Day. But more exciting, this is the first time as the new Harmonic, a pure-play broadband company with a larger market opportunity, a sharper strategy and a growth framework that we are really excited to talk to you about today. Today, you're going to hear from our leadership team. Nimrod will walk us through vision and strategy. Asaf and Yaniv will talk about the markets we serve today and the markets we'll serve in the future. I'll provide a brief financial overview, and then Jeff will host a customer panel, and then we'll wrap it up with a Q&A. Some housekeeping. We're going to make forward-looking statements today. Actuals may materially differ. Therefore, please review our SEC filings for risk factors. Now with that, I would like to introduce our President and Chief Executive Officer, Nimrod Ben-Natan.

Thanks, Walter, and thanks, everybody, for joining us here today and online. October next month, 30 years ago, I joined Harmonic. Quite a journey. But when I look back, what I really see is a series of transformations that we've gone through. We started as an analog optics company. We transitioned into digital video. We were at the forefront of that. We moved the industry to high definition digital ad insertion and more recently, the transition to -- or the transformation to virtualized broadband access. And today, we're excited to talk to you about the new Harmonic and the road ahead. So let's jump right into it. Many of you really know us about what we do in cable. You may remember, we started with CableOS and the leadership that we've got in the DOCSIS cable market. Today, we are really going to talk about the broader vision of how we see the opportunity ahead. In cable, we're expanding -- the market is expanding, and we're as well with fiber-to-the-home. Lots of cable operators are doing fiber for edge-out, for new development and surgically in competitive markets and MDUs. And I'm excited to share with you that this year in 2026, we're going to end the year with $70 million of revenue just in this category. With the momentum that we have, with the maturity of the product line, we feel ready to go after the broader opportunity of the telco fiber. Same technology, a different customer base, but we are at a point where we are really ready to tackle that market. We announced last week our SensAI, which is our intelligence platform to serve the broadband operators, cable and telco, DOCSIS and fiber to really address the opportunity, which is kind of the toughest challenge that they have right now to maintain customer satisfaction, reduce churn while maintaining their operating cost. Another very interesting development in the market related to the fiber technology is a new market, we call it PON beyond fiber-to-the-home, which is using the PON technology in data center markets and in the enterprise market to really connect devices in data center. You've got tens of thousands of devices to manage what's called out-of-band management. And in the enterprise market, this is an alternative to a point-to-point Ethernet. Very interesting market that the market started to follow, and we will talk more about that. So that's kind of rounding up the connectivity, cable, fiber markets as well as the intelligence. So the wheel is effectively complete, but there is one other thing that is very interesting that we started to focus on, which is really the edge compute opportunity in the AI market. And this is really a very interesting opportunity where both cable and telco are going through the modernization of their architecture where they free up a lot of space across their network, facilities that used to be central offices or cable hubs with legacy equipment now become empty. They have power, they've got space, they've got fiber connectivity, and they have very strategic location in the network, milliseconds away from businesses and customers. We're not the first to talk about that. I think last week at Goldman Sachs, Verizon talked about that. Charter talked about that the other day. What we really want to do in this market, which we have not sized yet is really enable that through the longer tail of customers and the opportunity, and we will talk more about that, is really how to leverage cOS as an orchestration platform and help customers to bring that to the edge of the network. And when we look at the opportunity, we see clearly the connectivity is the biggest market opportunity, about $5.4 billion, including cable -- fiber and cable, telco as well as the PON in the data center and enterprise, and we will break that down as we go through the day today. The intelligence opportunity, as we define it, a market between $1 billion and $2 billion and yet to be sized opportunity across the edge AI compute. So by 2030, we see an opportunity of about $7 billion ahead of us. So when we look into the future, one of the things that we believe is that everything that we see AI today that is generated in data centers will get experienced, consume and experience in the home, obviously, on the go, but when you go home, you offload into your Wi-Fi and lots of connected devices will evolve with the way we see AI, agentic AI, everything that is every day we read about will clearly change the way the network is performing. We will really change the shape of the network. We see growing demand for intelligence, and we see growing demand for fiber, both in cable and clearly, as we go into the telco market. And we talked about the compute opportunity, which, again, is an opportunity in development. And really, what we want to achieve is to be the broadband platform of this transformation across the connectivity, the intelligence and the compute based on the cOS platform. And you know what, this is not the first time that we do identify an opportunity and work towards bringing that to market. Quite often, we do it in collaboration with key customers. So we've called it before the way we did it about 10 years ago with the virtualization of the broadband cable. We really pioneered that. We identified the opportunity, and we executed on that. And we did it even before with the -- those of you who remember the Edge QAM market that enabled video-on-demand over cable networks. I think this will be a good opportunity to hear from one of our customers, how is it to collaborate and partner with Harmonic?

The partnership that we have with Harmonic [ HIRO ] is strategic and critical to everything that we want to do going forward. My name is Elad Nafshi. I am the Executive Vice President and Chief Network Officer for Comcast. 2018, we really started to partner together on creating the blueprint for how do we, as an industry, scale broadband services into the future, and that led to the creation of the DAA distributed access architecture and the vCMTS, the virtualized CMTS project, which we've been working on with Harmonic ever since. We have been operating as one company, and we have been innovating as one company for the past 8, 9 years. And we wouldn't have not been able to deliver this much innovation in such a short period of time without that complete partnership. Well, about 4 years ago, we were able to be recognized with a technical Emmy award that we were very happy to jointly receive both Comcast and Harmonic for the creation of the DAA architecture and the vCMTS. And that just signifies just how critical and how transformational this relationship has been to the industry with DOCSIS 4.0 FDX rolling out across our footprint, delivering multi-gig symmetrical services in great scale, and we're super excited with our accomplishments. We're just getting started. How do we continue to scale seamless fiber delivery and continue to grow the network at the scale that we are. We're adding 1.2 million homes to our network today. All of that is fed with our joint development, our DAA platform. And we're very, very excited to do even more. We connect 65 million homes. We serve 39 different states. Our network is huge. It's over 1 million miles of fiber and cable. And how we bring all of that together and leverage the technology that we're inventing for the industry in order to deliver even faster, even more reliable and even more scalable services is what this partnership is about. It's what we've delivered over the course of the last 8 years and is what I cannot wait to continue to expand across the footprint.

Thanks, Comcast. Thanks, Elad. When I took over about 2 years ago, the CEO position, we set 4 strategic imperatives for the business that we kept updating you on the progress diversification, leading the DOCSIS market on cable, growing the fiber and getting into the intelligence. And I'm happy to update, while this is not a victory, this is a great milestone to indicate. We've grown the diversification percentage of what we call rest-of-market customers from 20% to 37%. We continued the leadership on the DOCSIS market. We have the 90-plus percent market share, and we were the first to introduce the unified architecture. We've got JR from Mediacom on the customer panel here, and he will talk more about that. On the fiber, I'm very excited with the update we're sharing with you today on the revenue. We will achieve $70 million in 2026 on that product line. Number of customers have grown. And on the intelligence, we gave you updates along the way, elements of the solution like the Beacon and the Amply. We got more than 30 customers now using the technology. And last week, we announced the SensAI, which is our intelligence platform, a very comprehensive intelligence platform, and we're going to expand on that in more details. And that execution got reflected on the financial performance. We achieved record revenue, record backlog. We executed on the share buyback and with the sale of the video, we are in a good position to keep funding our growth initiatives as we execute on that. So when we look at the market itself, hyper competitive. It used to be cable fiber, there is a fixed wireless, there is satellite. And every day, there is kind of reports on how challenging this is for the customers. I think the key point here to remember is that broadband operators are doing a really good job in converging services. Just the other day, one operator introduced a new security capability into their Wi-Fi at home. They do the wireless -- mobile wireless, and they will expand the portfolio of capabilities. All of that is running on the same broadband infrastructure. And that broadband infrastructure is changing. There is way more upstream. Latency is very important. And as we look into the future, the number of what we used to call connected devices that we just kind of connected -- got connected over the Wi-Fi now will become AI speakers. They will communicate back and forth. Every camera will talk back and forth over the network to get, like, AI guidance on what to do. So when you look at all of that, we believe that the broadband industry will continue preparing for the AI era. We see that across cable. You got to go high split and beyond. You got to take care of your low latency kind of capabilities across the network end-to-end and fiber will do 10G and even 50 gig, which is becoming available. And at the same time, heavily invest in automating the network, making sure you address the customer experience, quality of experience, while managing your operating costs, which is really where SensAI is targeting. So when we go back to the core platform, what we introduced 10 years ago as a virtual CMTS was effectively a platform with an application that is doing virtual CMTS. And there was a forward-looking about what the platform will be able to do over time. And in fact, other than being a mission-critical platform that can work in a high availability mode, what we really designed back then is an edge compute platform that can evolve over time. And indeed, when we introduced fiber, it was yet another application on the same platform. As we go after the telco market, we bring a couple of differentiating capabilities such as the Open ONT architecture, which is not easy to achieve, and I think it's becoming very critical today, especially with supply chain and memory costs. You really want to have a choice of supply. And unlike the DOCSIS market, which is well defined, you've got CableLabs, the market of fiber is more open. So maintaining that interoperability is not easy. We bring our advanced, hardened remote OLTs into that market. We do have a differentiated 50-gig road map, and we have new provisioning capabilities that we bring and complete our fiber-to-the-home capability. Asaf will talk more about the opportunity beyond fiber-to-the-home and the data center management and the enterprise market. Intelligence is a big topic. And really the strategy that we have is to bring something that can work across any network, not exclusive to cable; it's applicable equally to fiber-to-the-home, and it can work even if we don't provide the access network. It can work with others in a multi-vendor environment, and we will explain that in more details what exactly we do that and how do we achieve that. And really, the goal is to achieve reduction of churn while lowering the cost. And we'll talk more, although this is in development stages, but we clearly see an opportunity for this edge AI inference, leveraging the space and power that got freed up in conjunction with our orchestration capabilities. I did have 2 asterisks on this previous slide, which is really a tuck-in, very focused acquisition that we did of a company called Int6 based in Brazil, very focused on the Brazilian and Latin America market. They serve about 7 million subscribers, 40 customers. What's unique about what they do, they work in a multi-vendor environment, and they really help both our fiber complete our provisioning and management capabilities. And on the intelligence SensAI, they really give us actionable workflows and working across multi-vendor environment to really allow us to bring intelligence not only to where cOS is deployed. So in summary, 3 engines. Connectivity is clearly the core market. DOCSIS will continue to be a major engine for us, expanding on the remote OLT, getting in a serious way into the telco market. And then the intelligence, the $1 billion to $2 billion market, we'll talk more about that and the upside with the Edge AI. A total opportunity that is way bigger than what we're addressing today. And as we go through the day today, Asaf and Yaniv will expand on these engines. So with that, I will introduce Asaf Matatyaou, our SVP of Product, to talk about the connectivity. Asaf?

Thanks, Nimrod. Good morning, everyone. A little bit about me first. I started my career in data about 30 years ago as well, not at Harmonic, but a different company. And back then, there was dial-up. And what we were trying to do is provide an always-on connection and the speeds weren't fast, but it was an exciting time going from dial-up and having always on. And now obviously, we look at that as something that's a utility, something that's always there, something that everybody expects. I'm excited about what's next, even more so today because back then, it was purpose-built, it was focused. It didn't have the upside. It didn't have the opportunity, the growth potential of what our vision for broadband is. The build -- what we built our connectivity platform on and what Nimrod just shared with you as a foundation of connectivity into intelligence and then ultimately into compute. So as you heard from Elad, we're only at the start. We're only at our beginning of where we go, and we've planted those seeds, and we're going to watch them grow. Two connectivity types before we go further. DOCSIS, for the folks who don't know what that is, the first 3 letters say it all, data over cable. It's basically broadband over the coax cable that exists in people's homes. And PON, it's the fiber equivalent. It's fiber that leaves the facility and splits passively to many homes. Let's start with DOCSIS. It's a market we lead, and it's the footprint that pays for everything after that. All right. It's a stronger click. Okay. So if we look at the market, and we'll go from the market and dive deep into a few different segments here within DOCSIS and how we grow that. We look at where we started a decade ago. If I recall a decade ago, the market was filled with legacy CMTSs. And the transition we've seen over the past decade is as legacy CMTS has diminished, what's replaced it is the virtualized CMTS, the DAA approach that we've seen. And if we look at the transition, not only is the market growing between '26 and 2030, but we also see that the larger portion of it is going to be vCMTS and DAA. In fact, $9 out of every $10 being spent in 2030 will be in this architecture that we pioneered and we led. Our credibility is, well, we started this about a decade ago. We own over 90% of the vCMTS market share. 60% of the DAA footprint and over 160 operators globally and expanding. We feel very confident with the ability to understand what's necessary to continue to execute in this marketplace after all we created the category, we hold it, and we continue to raise the bar. We'll talk a little bit more about that in a couple of slides. Let's look at the vCMTS portion and the decade of value it's delivered. So a decade ago, I'll just share with you a story. A decade ago, when folks wanted more speeds, what they had to do was either replace their chassis or replace their LAN cards. Not only was this operationally disruptive, it was also a purchasing event. Every time somebody wanted to replace their LAN card with a different one, there was a chance to upgrade their CMTS to something else. We've replaced that. No longer is the core. Now that it's software, it's all software upgrades. And the proof is that 100% of the operators who've migrated to cOS over the last 10 years have stayed on cOS, all through software upgrade. It's a very exciting opportunity for them to be able to deliver actually more speeds, more capabilities, all on the same software and platform that transitions with them as their subscribers need more services, faster services, lower lag services and the connectivity they expect. We'll talk a little bit more about what that buys them going forward. But the fact is that once that software and the solution is there, the opportunity is to connect fiber to use it for edge compute. This decade of leadership has led us to a compounding effect of opportunity, the 90% of vCMTS deployment in that footprint, the 350,000 connected devices that grow every day and the operators that we continue to expand globally in every sort of footprint you can imagine. What's left to transition is very exciting as well. From the operators that already worked with us to the prospects that we're working with, there's 75% cable modems out there that will be transitioning to DAA and virtualization over the next few years. Each DOCSIS generation that we've talked about renews itself on this core as a software upgrade rather than replacing it. That was transformational for the industry and something that we've seen with over 8 generations of Intel servers in the industry. One of the key reasons the cOS core is a durable investment is the pace of our differentiated software. And in fact, it's one of the reasons I joined Harmonic 15 years ago. When I joined, I was inspired by the culture. I joined, I met with Nimrod and other folks, and that culture continues to define us. We are not standing still, okay? It's always what's next. What can we do to advance? And as you've heard, we were #1 in edge QAMs and we're #1 in the cable broadband industry today. That's not enough. We need to continue growing and pushing and delivering better and faster connectivity as subscribers expect that, differentiated services, better quality of experience, putting the intelligence layer on top that Yaniv will talk about and then augmenting that with the compute opportunity that's in front of us in the world of AI. Most recently, just to give you an example of some of the quality of experience advancements that we provide, all through software, faster speeds, software upgrade, simpler operations with PTP-less software upgrade, lower lag software upgrade. Improved quality of experience is incredibly important to retain subscribers on the network. Going from ideation to production is simply a matter of waiting for the next release a quarter away. No longer are you waiting for a hardware cycle. We move from ideation to production. We have sprints that are 2 weeks long and in some cases, 1 week long. We go incredibly fast, and we work with our customers to make sure we understand what they need to be successful and deliver that. What also is important in software is to continue in the scope of sustainability. As you deliver more, you want to be able to free also free space and free power. No longer was it double the speed, double the facilities. We've actually reduced that dramatically, up to 70% less power consumption relative to the older legacy technology. But when you compare ourselves versus ourselves a decade apart, we're actually 85% less watts per gigabit, less power against ourselves a decade later because of our software advancements. Some of our customers report up to 95% spend -- sorry, 95% space savings. That's important. Unique capabilities we've added in software that I just want to talk about briefly that really -- the effect is the result is happier subscribers, better NPS and higher QoE. Beacon ISM adapts dynamically to plant conditions, less tickets -- less trouble tickets, less truck rolls, less OpEx for service providers. Pathfinder, this delivers software that adapts to an individual's home. PTP-less, being able to deploy DAA simply and quickly, more cost effectively, giving higher network reliability, incredibly important. And L4S, really cutting working latency where it matters the most, video calls, gaming and cloud soon enough with AI. So QoE is one in software, and that's where we continue to differentiate. We continue to raise the bar every single quarter. Let's look at a case study. We'll be focusing on Mediacom's transition to DOCSIS 4.0. We started on this path with Mediacom about a year ago. And in fact, if you remember at DC last year, the TechExpo, there were Congress people coming to the show floor. They were excited to see symmetric multi-gigabit speeds practically and easily deployed on existing infrastructure. Symmetric with no new hub space is what I should say as well. The outdoor platform you see here today is actually right over there as well. I encourage you to go look at it as well. It's actually configured in the same way. It's called the platform because, in fact, you can configure it in so many different ways with different modules to adapt to different footprints out there. Over here, we're talking about DOCSIS 4.0. And it was 1.8 gigahertz. It was delivering, I think, 8 gig down by about 3 gig up to some subscribers, and it was able to do that on that PTP-less network we talked about, which simplified the deployment and accelerated it. The ability to put in a fiber module in there, in this case, a remote switch, a Jetty, provides the ability to tactically deploy fiber when it's needed. This is incredibly important. After folks came to our booth a year ago, that built the momentum. This is simple. This is easy. This is possible. It's available. And we see that momentum building in our ability to deploy DOCSIS 4.0 with other operators around the world. Thank you, JR, for your partnership and collaboration. We truly appreciate it. And this truly matters when you think about the footprint of cOS, we already have deployed with 9 out of the 10 largest U.S. operators in cOS. This opportunity, it's right in front of them. I'm going to transition now to our fiber and PON section. And a few years ago, we recognized we needed a more complete portfolio that's end-to-end. We've made the investments and we've executed. And we're counting the results as Nimrod has shared over the past few quarters. And let me share with you a little bit about our expanded portfolio as well as different market segments that we'll be focusing on. The 3 segments within fiber that we'll be looking at is fiber and cable, where we're already the vCMTS in the facility, the telco FTTH segment and PON beyond FTTH. It's important to look at this as an opportunity that leverages these opportunities in segments off of the same software and the same base of investment that we've made. There's a lot of growth in fiber and cable as well as PON beyond FTTH over the next few years. And as you can see, the telco fiber-to-the-home segment is already quite large. All the same software that we're looking at will connect to a breadth of and variety of OLT devices that these investments that we've made will come to fruition. Let's look at that portfolio. Two years ago, when we started looking at this segment, we really focused about fiber in the cable space. And that really took off. That was successful. And we used our Fin pluggable. So if you start in the far right corner, you'll think about the Fin plugging into maybe a DOCSIS node. One of our customers actually called it a unicorn at the time because they didn't think it was possible to have DOCSIS and fiber being fed by the same platform. Once we did that and that was successful, we built dedicated modules, whether it was a remote switch, a remote OLT different enclosure types, small compact form factors, ones that are specialized for MDUs, one that are a little bit larger like the Ripple that houses multiple modules. We look at remote switches like the Jetty-3 expanding to help consolidate and have more fiber out there, saving fiber and giving longer reach. And our 50G Pier-2, which is over there as well, showing you the expanded portfolio we have, basically any form factor for every [ PON generation ] as well as the opportunity to expand this for other sorts of footprints. Let's talk a little bit about that. We've actually used PON as a backhaul to connect to a DOCSIS customer. That's an opportunity with the pluggable that goes in. Let's think about MDUs with our SeaStar, which allows us to address low-density MDU markets in the most cost-effective way. And let's look at the advancements we've made because even if you are on a fiber network, there are power outages in different regions of the world. How can you support making fiber even more resilient? With our Oyster+ right over there, we're able to do so. Every one of these elements in our portfolio has a lead customer is differentiated and will be successful. Whether it's urban, rural, fiber pockets, high or low density, we have a portfolio and the software is versatile for every architecture. Now let's look at that first segment we talked about, the cable segment for fiber. This is our tailwind. It's not a threat. When people ask fiber or DOCSIS, we say both. When you have a cable segment that has a transition and ability to move over customers and subscribers to fiber, you want to make sure you do it in the least disruptive way, making sure you retain those subscribers, minimizing churn. This is exactly what we do with our software. 10 years ago, a little bit more than that, we had the idea that our platform, it wasn't just the vCMTS. It was a platform with an application on top, and we actually looked at having other applications served by the same software. And that's what we did. And over time, we've been able to connect many ONUs and OLTs and fiber subscribers out there, especially on the cable footprint. So 1 platform, 2 access networks fed by the exact same infrastructure. And DAA allows that to happen. The transition is accelerating and whatever pace service providers take, we're there to assist with that. So you got your cable modems out there and as they transition to fiber, it's just a simple configuration on a piece of software. Our advantage right now is that we're already in those facilities. our software is already running there. It's as simple as plugging in a Fin and configuring that fiber. It's really hard to replicate that. And the reason that is, is you need to have that footprint. Our footprint is in over 90%. That's where we're already there. So the transition to fiber in the most cost-effective time-to-market way is to stay on cOS. So DOCSIS or fiber, the same platform is the one that powers cable's network evolution. Let's look at an example of exactly that, what izzi in Mexico has done to unlock a national HFC to PON migration. If you look at the diagram, they already had an existing trunk, and they really leveraged that and their fiber assets by just expanding that fiber to the home. Allowing DOCSIS subscribers to migrate with the minimum disruption out there using the exact platform that you see over there, our Oyster with our Pearl inside. This allowed them to expand their network and allow whether it's GPON or XGS or Combo PON, be able to serve those fiber opportunities in front of them. They're the largest operator in Mexico, and it's an example of other FTTH migrations that we anticipate others will make as well. We're going to hear exactly that from Carlos Eduardo, just -- here we go.

We moved from a traditional supplier or partner to a more strategic kind of partnership. My name is Carlos Eduardo. So I'm a General Video Director for izzi. We are the largest cable company in Mexico, transitioning from cable to fiber these days. In order to update our network, we decided to find a technology that could support that transition and evolution for our network. So and relying on this partnership with Harmonic, we decided to pick one of the greatest technology you guys have to offer. So what we are doing, not building or rebuilding our network from the scratch, but we are reusing part of all the work done and the infrastructure done for the cable network, but complementing with some equipments and transitioning from the cable footprint to a more FTTH or fiber-to-the-home deployment. I think the main differentiator from Harmonic and the other guys from the pack is this capacity to understand our needs and come with a solution that fits exactly to what we're looking for. So we're not only talking about high tech, we're not talking about a single solution, but we're talking about the architecture itself. So the izzi view for the future is to become more than just a cable network operator to become a telco operator. This network reconstruction and rebuild the network to be 100% fiber-based. Harmonic is key for our success in such a thing because we believe you guys have the right technology, you have the right people and you have the right solution. And yes, so I'm 100% confident that -- so you'll be the right company to help us achieve our goals.

Thank you to izzi and Carlos for the wonderful video. Let's look at our big telco market segment now. And we believe that the investments we made in our portfolio will allow us to disrupt and compete and differentiate. The demand is real. We know subscribers are moving to fiber over time. And we believe we can differentiate with Open ONT, our hardened DNA, things what we built our enclosures since the '80s and our differentiated 50G. Out of a $2.8 billion market, we see that growth in the 50G spend, and we'll be there ready as that market takes off. We also have the Pier-2 over there to show you exactly what that 50G platform looks like. One of the things we talked about that enables us to succeed in this telco marketplace is our ability to do Open ONT. So I wanted to focus a little bit about some of the differentiators. So our software connects to a wide breadth of devices that we talked about, shelves, switches and modules, all delivering fiber. And this Open ONT culture that we have is the ability to connect any ONT, any vendor, and we have over 20 vendors and over 75 qualified interops. This is incredibly important as we try to unlock the vendor bundled and bookended solutions that are out there. Keep in mind that the rising memory prices out there put the most pressure on CPE devices like ONTs. Operators need to have the ability to choose the right CPE for their business and the ability for us to have Open ONT gives them that opportunity of diversity and supply chain. When you look at this, this software and our connectivity allows telcos to have every PON generation, every form factor every service connected to our software and our broad set of devices. The last segment I'm going to focus on is the PON beyond FTTH segment. And there's no better place to be than to differentiate in a new segment that is growing. Where it is today is just as a start. We didn't create the category, but we know we have the ingredients, the devices, the software, the solutions in place to be successful here. Let me describe a little bit. In the data center today, as Nimrod mentioned, is the connectivity and the management to those devices that's out there. If you're doing point-to-point Ethernet, there's a lot of wiring, there's a lot of active switches. There's a lot of OpEx associated with that if you think about data centers that are thousands and thousands of rack. The opportunity and the value of having PON in the data center is fewer devices, less power and longer reach for out-of-band management. The same value holds true for enterprise. If you think about WeWork, in fact, Nimrod shared with me a video when he was walking through a WeWork and all the cables above them, and we both looked at that and said, "Wow, this is a great opportunity for new enterprises. If they had PON in the enterprise, how much less wiring would they have? How much less gear would they have?" This is the exact same software, the exact same differentiated solutions that we have that we ship today that would serve those 2 opportunities. This is a new fiber segment with dramatic growth, and we're confident we can differentiate as we move forward. Let me leave you with this, okay? The connectivity that we've built is a foundation for the future. We'll talk a little bit more about that after Yaniv shares with you about our intelligence. And it's -- I'm excited for what the future holds. So I'll now hand it over to Yaniv, who will share with you our intelligence layer.

Thanks, Asaf. Good morning. You've been hearing this morning from both Nimrod and Asaf about our accomplishments so far. What I'm here to talk about is what's coming next. And I'm not only excited about what's coming, I'm actually really excited about what we're already doing. We see a $1 billion opportunity that is already coming into focus. And in the next few minutes, I'm going to talk to you about the market, how we're addressing it. And in fact, share with you 2 incredible stories about one operator in Alaska that implemented our platform and is seeing the benefits in the field already and another one in the Southern East part of the United States, that show us how are we going to scale. So I'm really excited about what I'm about to share with you. So let's talk about it by talking about the market, the opportunities. But first, let's start about talking about the challenges. An operator, it's not a secret. Broadband operators needs to do more with the same revenue. They are facing a competitive landscape like nowhere before. They first need to secure their base. And what's winning is reliability and not speed. At the same time, due to this competitive landscape, they are locking their subscriber to multi-year contracts, which put even more pressure on their ARPU. And they need to grow. They're investing in DOCSIS, in fiber, they're making acquisitions, and every one of them is adding more and more tools that they need to buy, pay and manage in order to operate those networks. And of course, customer expectation is only increasing. with more and more devices to manage. And as Nimrod pointed, those devices need broadband connectivity, not just to show you the time, but in order to operate and reason. So with more network to operate, higher expectation to meet, all of that with the same revenue. So what is the solution? It's a vendor-agnostic intelligent operation platform that will help operators increase reliability, all of that without adding cost and in fact, even reducing cost. So let's talk how big it is. We see a $1 billion to $2 billion market that is priced per subscriber against cost we are saving. We looked at it from 3 different directions. First one is an independent market research that was done by Mason -- Analysys Mason that put the AIOps software at about $2.2 billion annually, excluding Tier 1s. We also looked at the savings that broadband operators can get from an AIOps platform, and we see a minimum of a $1 billion market for us. That's down from $72 billion annual OpEx and the saving from an intelligent platform. And of course, there is the lifetime value of a subscriber that is staying with you and not churning. All of that puts the intelligent market into a $1 billion to $2 billion opportunity that we are unlocking that we price per subscriber annually against cost that we're saving. So let's talk about what we built. SensAI is a broadband intelligent fabric. It's a vendor-agnostic, network-agnostic that starts with data collection. We collect data from your -- from the entire footprint, starting from the back office, the different network elements of the broadband, all the way to the equipment inside the customer home. And then we build the first intelligent layer, what we call the network graph. That's the layer that provide the context, provide the connectivity between different elements and different department, that's define what is the customer? What is the service? What's the SLA and the constraint we need to meet. Of course, there are the different tools, tools that people are using today to operate and manage their broadband network, either DOCSIS or fiber. And then the Agentic systems. Those are the 7 agents that are working 24/7 without sleeping, without eating. And as you can see, they are mimicking the different departments at the operator. We have a subscriber care agent that has a 360 view of the subscriber that helps the customer support representative, the network operator agent, the field ops agent that helps the field engineer that goes to the right place and fix the right issue. Daily intelligent that look at trends, long-term trends and moving operators from being reactive to proactive. Planning agent, provisioning and maintenance, all of that fitting with an Open API, the existing customer application that every operator is using. We don't pretend that operators will want to see another UI, although we have a beautiful UI that you can see. But we assume that operators want to keep using their own application. We're just making them smarter. And we have a video to show you how it works. [Presentation]

So that's SensAI. So you may think, okay, Yaniv, everybody is talking about AI these days, right? Everybody is presenting his own platform. So why customers choose you? And you're right. Customers are taking meetings today with every company that talks about AI. They are taking meetings with what we call the generalist AI who build beautiful platform, but they don't speak broadband. They take meetings with the equipment manufacturer vendors that build AI platform, but in their own silo. And of course, in the AI era, what we call the honeymoon era of AI, everybody is building his own application. Some of them tried, most of them has not succeeded to do that. And when we come and present SensAI, what they really love about that, that it's coming from us, a company that understands broadband, that has the experience in broadband, that understand fiber, that understand DOCSIS. They love the fact that it's multi-vendor that we are agnostic to what system we operate and manage. We build a platform that is hardened. We have experience in building cloud for more than a decade. What they really like is the fact that every deployment we have in SensAI, the rest of the footprint is learning from it and it's becoming more and more intelligent. As we identified signature and issues in one operator, it trickles down to everybody else. And we can do that, thanks to a very special team that we established what we call forward deploy engineering. Those are the engineers that rolls in the truck with the field operation. They are sitting and listening to customer call to understand the challenges and coding and improving the product on the fly, just to show you the type of velocity we're talking about here. So let's tell you the first story about GCI in Alaska. GCI is the largest broadband operator in Alaska. And they started to implement our platform a few months ago. We help them with their NOC operation that sees identify issue and escalate internally or to another agent that helps the field team to identify what are the tickets that they have. And as you can see, hundreds of tickets. SensAI identified and opened hundreds of field issue tickets. However, it's intelligent enough to also prioritize them based on severity. And you can see the number of trucks that you actually need to dispatch are a few dozen. To tell you more about that, let's hear from Troy Goldie, the CTO of GCI.

Having those tool sets that allow us to be more proactive to allow us to have an infrastructure that can self-heal with auto tech dispatch gets us to the point where our customer experience is actually realized. Time to task has to be first and foremost, the ability for a system to direct a technician where to go and what to do. It helps us with the time to task reduction, but then also the real-time validation that, that task has been completed successfully, enables us to have a repeat ticket percentage that is drastically less than what it exists of today because we get the systematic validation that the network is where we want it to be versus it's been fixed at that moment, but then it's brought back out at some point in the future. So our repeat rate will absolutely decrease utilizing the system that you've delivered for us. Harmonic is a true partner at the working level at the strategic level at the business level. We're able to have open and honest conversations about performance levels, performance levels, both on the GCI side and in the Harmonic side so that we can then fail fast, resolve and implement those fixes that are required. We're already starting to talk about where that broadband component can even extend into the home, where we can ensure that the customer experiences everywhere from their PC, their TV through the Wi-Fi into the modem and back into the network such that Harmonic is part of the entire customer experience that we can then deliver a differentiated experience in this [ manner ].

Great. Next, a different story. Hotwire Communications that I'm proud to say that today, Hotwire can find and identify its service degradation issue before customers are actually calling them. And what I really like about Hotwire that, first of all, it's a pure PON customer, 100% fiber. And second, none of the equipment they deploy is with the Harmonic platform. So 100% non-Harmonic, and I know Jeff is working very hard to change that as well, by the way. So what they're doing, detecting the problem, and it's been a journey, learning and we're now in the process to automate things, making it the path to autonomous network. One example that I love to share with you today is the fact that SensAI identified a service degradation realized that it had nothing to do with the infrastructure, not the PON network, not the ONT itself, not the Wi-Fi and identified as a video degradation issue that required some CDN configuration, which fixed the video problem, okay? So without understanding the network graph, without understanding the topology, this will take weeks, if not months, to find that. And let me hand it over to Pragash, the CTO of Hotwire, to tell you more about that.

The work that Harmonic and Hotwire is doing together, I believe this is going to break some barriers and introduce something that we never thought of. Pragash Pillai, CTO of Hotwire Communications. I've been in telecom for about 27 years now. We've been working with Harmonic for a few good months now. We are ready to kind of deploy the solution in production part of the SensAI product. What we're looking at doing with the solution is gathering all the data and telemetry about our customer and providing insight either to customer or to us. In a quick example use case, we found customer with 1 access point with 70 over devices connected to that access point. So there's 2 problems we can solve there. First, we can solve the technical problem. Second, this is an upsell opportunity for us to improve those customer experience by having the whole home connected. In a traditional way, typically, we try to run databases to crunch the data. It takes days, it takes weeks to get to the information that we want. With AI and the ability to structure the data with advanced data lake house platform, we can get to the answer much, much faster. That is what I think going to drive our industry further. If you look at Hotwire history, 20 years ago, when our CEO started fiber, nobody was doing fiber infrastructure. We're the first one. Hotwire was one of the first fiber company out there in the U.S. And now we're looking at network intelligence, AIOps, I hope when we get a few years forward, we look back, we say Harmonic and Hotwire kind of pioneered this AIOps approach that everybody else is leveraging. We value the partnership with Harmonic and look forward for the future.

So how we're going to go after this market? How we are going after this market is, first, land the base of customers, win new operators and also sell more services. So what do I mean by land the base? Today, we have more than 160 customers that are already using our first-generation cloud. And the idea is we are upgoing and upgrading them to the SensAI experience. As we win more and more operators on cOS as well as non-Harmonic customers, we are going and offering them our intelligent platform. And that opens also an opportunity for new business services for us. Now that we have SensAI, we can offer a NOC as a service or operating the service for the customers. So what's that doing for us? It's actually enhancing our recurring software revenue stream. But furthermore, it's diversifying our customer base. So we've talked about the second engine. That's the intelligent platform. Asaf talked to you about connectivity, our first engine with our beautiful software and hardware products and solution we developed for cable and telco in order to accelerate their deployment. With SensAI, we're bringing the intelligence to operate those network in a much more cost-efficient way and in a smart way. And with that, I'll hand it back to Asaf to tell you one more thing. Thanks. Asaf?

I'm back. hope you didn't miss me too much. Thanks, Yaniv. Let's talk about the third layer, the third engine, the compute side of this. We spent time on the connectivity layer sharing with you the footprint that we freed up at the different facilities. Let me walk you through a story of what that means. So if you think about the simple diagram of the head and the hub and the homes that are connected today, and if you think back to the integrated equipment that was there, the purpose-built chassis; with cOS, we talked about the free space and the power that becomes available now. In some cases, some operators do hub consolidations. In other cases, those hubs exist. And the cOS and the RF gear that pushed out into the network DAA, there's an opportunity there. And we're all familiar with physical AI. Some analysts point out to over 100 million robots by 2030, all kinds of different humanoids, cameras and sensors, physical AI. Imagine the challenge they're going to have when they need the latency, the predictability to run mission-critical operations and services for all those different opportunities that they have to service their purpose and their mission for their companies. We can connect our existing infrastructure with that free space on the GPUs. So the opportunity that we've built with our orchestration, the free space that we've enabled now can be used. And we've already done it. We're actually in development now where the GPUs and the different types of compute can leverage the platform. The platform is there, the ability to connect it to GPUs and to run local tokens through that or to do it in a very intelligent way. It's a very exciting opportunity. When you look at other opportunities as well to connect cell towers, backhaul, all in the same fiber; this will give the performance, the expected -- that the operators already have for their existing subscribers to connect all these things. And we look at all the different opportunities for those different facilities, thousands in the network, and we'll show you a little picture of what that actually means. And the modernization we sell free -- sorry, the modernization we sell free the space and the power that Edge AI inference for all these physical AI needs. We call this cOS Edge AI. This is a real map of North America, obviously, with the different sites that we have today and in the future, thousands of sites. Globally, it's even larger. And if you think about that, that's where cOS runs. And if you think about the diagram of the transition for other facilities that we showed a few slides ago, the opportunity is there. This is an example, just to put pictures -- words to pictures of a site with over 20 racks of equipment, which have been reduced to 1 rack. It just gives a real perspective on how much space and power is available. So the free space is already there. Our customers own that, and our software is already in it. So we look forward to expanding on this over the -- in the near future and providing you more information. And it's now time for me to hand it over to Walter, who will provide you our financial overview.

All right. Thank you, Asaf. A lot of excitement in terms of the addressable market. So today, what I'm going to focus on is talking a little bit about how we're thinking about growth, considering all of these new opportunities and expanding markets available to us. But before I do that, let me just start in terms of what we have delivered over the last several years. When you think about our midpoint of guidance for FY '26, we've delivered a 19% CAGR growth rate on revenue over that period of time. I'll address 2025. It was a down year for the industry. We had identified that prior to the start of 2025 in that with DOCSIS 4.0, operators were pausing decisions in terms of investment. And we had said at that time, we expected a rebound in 2026, and that's what we're seeing. We expect growth for this year year-over-year on revenue to be 43%. If you look at the purple line, that's our rest of market non-top 2 customers. And you can see the increase in revenue year-over-year for '26, we're expecting rest of market to grow by over 50%. And if you look back 2 years ago, it's more than doubled. That's been a priority. You heard that from Nimrod earlier, and the team has continued to improve, and there's still more work to be done, and I'll talk about that. From an operating margin standpoint, based on our guidance for this year, we'll achieve 20% plus operating margin based on the business model that we have. So the key message is we've held our share. You heard that from Asaf earlier. And the only deltas are market timing in terms of the investment, in terms of the modernization of these networks. Since I talked about 2026, I want to take the opportunity to reaffirm our guidance that we provided back on August 12 for Q3 of this year as well as full year 2026. Now this is the slide that Nimrod showed earlier. And it's so important, I wanted to bring it up again because it really signals how we look at the market and the expanding addressable markets in terms of additional adjacent markets that we're focused on. So as Nimrod mentioned earlier, we're traditionally known for the cable access market, which is $1.3 billion. And obviously, today from the discussions, that's a much larger available market that we are now targeting. The key point that I want to make before I jump to the next slide is really how we're thinking about the growth, what we're including in our growth rates and what we're excluding at this point in our growth rate. I'll share with you our 3-year view of our growth rate in terms of CAGR and then walk you through what is included and what's upside based on all the presentations today. So when we look at the midpoint of our guidance for 2026, we see 10% to 13% CAGR over the next 3 years. Let me be clear. That's a floor in terms of our business, and I'm going to walk you through and give you additional color in terms of what is upside to that number based on the discussions that we've had so far today. So I'll go category by category. In DOCSIS, we're assuming the market is going to be flat from where we are today after peaking in '27, '28. Now you saw in a Asaf's chart earlier that the market view is that it will still continue to grow. However, we're going to be conservative in our assumption around DOCSIS. In cable access fiber, we're assuming a 40% CAGR over that 3-year horizon. You heard of the progress we're making already. We've disclosed that in prior calls in terms of the wins and the momentum building in that area. In telco, fiber-to-the-home, you heard Asaf talk about our diversified portfolio in terms of our differentiated portfolio. What we're building into the growth rate is a 40% CAGR from where we are today. But let me be clear, we are not including 50-gig PON or any Tier 1 wins in our base CAGR that I'm showing here. And the reason being is you saw in Asaf's chart that 50 gig, we're expecting that market to start forming in '28 and '29, but we're going to be conservative because we have seen market transitions that take longer in time. So that is not included in our base growth model. PON beyond fiber-to-the-home data center enterprise, that's all upside to the model. In terms of intelligence platform that Yaniv walked through, our expectations is to grow that at 100% plus CAGR a year over this 3-year period. Now the more important metric that we're leaving you with today is that we expect that portfolio to be 10% of our revenue over this 3-year horizon. And then finally, on Edge AI compute, that's still to be determined, as we talked about earlier. And therefore, that would be upside to the actual model. So in summary, we're setting a floor of 10% to 13% growth with significant upside, as I've walked you through and giving you the color so you can understand how we're looking at the market opportunity for the company. I'll make it very explicit just to make sure we -- that I covered it off clearly is that there's four key upsides. We're working on those today. You heard from Yaniv in terms of our 50-gig PON. We're making those investments in a differentiated solution that will be available in '27, but we're not including the revenue in terms of the CAGR rate that we're showing you over the 3-year period. But the key message is we're funding these investments organically. Now it's more than just building a bigger business. It's building a more durable business. And speaking with many of you, both our analysts as well as our investors over the last couple of years, top of mind is always customer concentration, lumpy revenue. And from our plans today and what we've shared with you, we see the opportunity to build a more durable business. First of all, from a rest-of-market standpoint, we want to increase to 55% to 60%, and we see that in the 3-year horizon window from the 40% we were at today. Recurring revenue, bumping that up to 22% to 25% of total revenue, and that will include the intelligence platform that we highlighted at 10% of total revenue. And then finally, with regards to operating margin, 20% plus is our view. And let me say two things. One is we're already doing that in 2026. But the key point I want to leave you with here today is that those organic investments that we're talking about from a product, from a go-to-market standpoint is factored into our thinking in terms of ability to execute on this plan and continue to deliver 20% plus operating margins. So the key point here is we're building a more diversified, a more recurring business with more growth vectors for upside. Let me just finish here, talk a little bit about our capacity and our ability to execute on our capital allocation priorities. With the sale of the Video business, it's put us in a great position in terms of financial flexibility. We have over $300 million in liquidity as of the end of last quarter. We expect to continue driving strong free cash flow over the next 3 years. And with the record backlog that we have, we have confidence to commit our capital. You've heard us talk about these priorities previously. In the organic area, the one that is new is the funding of these investments for the expanded market opportunities in addition to investing in the ramp-up of our business, including the purchase of inventory to secure supply and to be ready for customer demand. Return of capital, we've executed $122 million of our $200 million program. We've set a floor that we'll buy at least enough to offset equity compensation, and we'll look to do more. And then finally, on M&A, we've been very consistent with our comments on M&A. If we can see an opportunity that will accelerate our strategy or derisk it, we will prudently look at those options. And right now, we're holding cash as we assess options. But I want to be clear, we're already moving in terms of our organic plan to drive the growth into these markets that we've talked about today. So the net, just to summarize, we've set a floor in terms of growth rate. We've talked about where the significant upside is to those growth rates even within this 3-year period. And we've talked about the capital that we have and the team to go and execute on all of this. And so from my perspective, we see profitable growth, we see a lot of upside potential in the business. And that's all great. But what really gives me confidence about the future is about what customers are saying to us. Recently, we were at a fiber trade show where we were presenting some of our new products, including our hardened fiber products, and we were discussing use cases in suburbs, rural settings. And the customer stopped us and said, "I can use this in high-density areas in cities. I'm paying a ton of money for putting my fiber equipment in leased facilities and those leased facility costs are increasing dramatically. I can take that out of there and leverage your solution to remove those costs." I think that's a great example of the versatility we have in our portfolio in terms of our differentiated portfolio and the ability for customers to unlock value with that portfolio that we have out there today. So with that said, I would like to transition it over to Jeff to introduce the customer panel and go from there. Thank you.

Thank you so much, Walter. Good morning, everyone. My name is Jeff Glahn, and I'm the Senior Vice President of Sales here at Harmonic. Today, we've got a great treat for everyone. This morning, you've heard from Nimrod, you've heard from Asaf, you heard from Yaniv on our vision, our mission, our technology and innovation. And now for the most exciting part, we're going to talk to some operators, our customers of ours that are using all these innovations not only to help their networks today and build -- optimize their networks and drive smarter and more intelligent networks, but also how they plan to work with Harmonic well into the future. With that, I'd like to invite the panel to the stage. A round applause, please. Please have a seat. Let's start with some introductions. Next to me, we have the Chief Operating Officer of Bluepeak, Cash Hagen. Next to Cash, we've got Eric Svenson, VP of Engineering Operations and Technology at Armstrong. And on the end, we've got J.R. Walden, Chief Technology Officer of Mediacom. Welcome to the panel.

First question we have on is fiber migration. We talked a lot about fiber today, and I wanted to talk with the panel here about the journey of the panel, the journey to fiber, excuse me. Many of you are on different journeys on the different paths, and I wanted to start with Cash to talk about fiber migration. Our teams are doing a lot of great work together, Cash. I'd love to get your insights on fiber migration today and what your plans are for the future.

Sure. And we're on a shot clock here, and we are all appropriately verbose, as we decided. So we'll keep it short. But just by way of backdrop, Bluepeak as a service provider, operate in 8 states, High Plains, Midwest and into the South, about a 70-30 split of pure-play fiber-to-the-home, fiber-to-the-premise, fiber to the business and traditional HFC. We have been on the journey of greenfield fiber launches now for the last, call it, 5 years. We operate in 80 distinct cities. Of those, call it, 30 of those are greenfield fiber-to-the-home cities that have been built within the last 4.5 or so years. So lots of activity just in a pure-play fiber way. On the HFC side of our business, we, like many -- DOCSIS is evolutionary, not revolutionary, and we have followed the same path as many of our peer groups have with DOCSIS. And we started off on the path to DOCSIS 4.0 a handful of years ago, I would say, and did quite well in partnering with Harmonic on that. And then we took a bit of a pivot within the last, I don't know, a year or so, and those were some fun conversations. Obviously, these are capital-intensive networks, as you all in the room certainly know. And the pivot was not to -- not in a negative way about HFC or DOCSIS and really had nothing to do with that as a technology medium. It was bang for the buck value creation for us as a service provider and made a decision in, call it, 80% to 90% of our traditional HFC footprint. We will not go down the DOCSIS 4.0 upgrade path, and we will instead overbuild ourselves effectively. These are all competitive markets. There are other providers there. There are some that have been more aggressive on their own fiber plans. And it was a pretty big shift for us. Where we were at, at the time with Harmonic, [ why ] and Jeff and team said, well, how about this? And it was effectively kind of repurposing a lot of the technology that we had learned a lot about with the products that are all sitting over here and to be able to do it. And one of the real benefits in that strategy was optionality. It's really a key point of we have a DOCSIS network. We have large HFC networks that have been out there for 100 years. And the ability to offer fiber-to-the-prem services within the same footprint is incredibly valuable. And that was a unique kind of delivery option that Harmonic provided versus your traditional kind of telco, more telco-oriented fiber-to-the-home vendor partners. And that was a pivot. It was a big one, 100% privately funded. We are a provider that we have not taken any BEAD funding, any other state or Fed funding. So it was a big decision to do that on a -- from a cost per passing standpoint to do that. We have a roughly 4-year plan. We started really first kind of shovel in the ground was in, call it, March of this year. And we'll have overbuilt roughly, call it, 30,000 passings by the end of this year. And over the course of the next 3 years, about 90% of that traditional HFC footprint will be fiber overbuilt. So exciting, lots of work. Not rocket science hard, but incredibly hard to do what we are doing.

Excellent, Cash. Our teams are doing exceptional work together and looking forward to a bright future. Next up, Eric Svenson, we are at Armstrong and Harmonic, a little bit of a different point in the journey, more emerging. Could you please tell us a little bit about the work that our teams are working on together?

Yes, absolutely. So we first started looking at Harmonic when we were looking to upgrade our HFC network, our traditional broadband network. And a lot of the presentations earlier talked about the space, power of all the traditional CMTSs that were in our facilities and looking to modernize that as well as bring new and faster speeds to our customers to be able to compete. So the start of the journey was looking at how can we upgrade our network and work together and work on that long-term vision because at Armstrong, we are focused on fiber and delivering fiber, but we also need to upgrade and leverage what we have in our existing HFC footprint. So working together, yes, we were able to deploy the Harmonic solution and be able to upgrade and get similar to the fiber speeds with gig symmetrical services that we could provide our customer and looking to do actually multi-gig solutions with that. And someone mentioned, Asaf mentioned before, the unicorn. Well, it really is because on our path, we do see doing HFC and to what Cash said, but eventually get to fiber and having the same housing, the same equipment, the same management plane to be able to transition to that fiber space long term really simplifies that journey for Armstrong. And that's really been important to us and really appreciate the partnership and kind of understanding what our needs were and helping us on that long-term plan and evolution. So we appreciate that.

Yes. We love the partnership and looking forward to the future, Eric. Switching gears. We're going to talk about DOCSIS 4.0. J.R., you were a bit of a celebrity at last year's SCTE in Washington, D.C. I know you made some -- a friend -- Senator made friends with you quickly, the state of Illinois. Would love to hear J.R. about your journey on DOCSIS 4.0, the work we're doing together and what do you see for the future?

Yes. So we're -- Mediacom is also, like some of the others up here, a rural market cable company, lower density spread across 22 states. We have 3.1 million homes that are fed with HSC today. And we wanted to find a path to bring higher capacity to those customers, but maybe more importantly, higher reliability and more network intelligence into those homes. And we felt like we needed to do it really quickly, right? And that was one of the things that really attracted us to the -- or kept us attracted to the DOCSIS road map. So of our 3.1 million homes, we've already upgraded north of 650,000 to multi-gig symmetrical services. If we had adopted a fiber-to-the-home first strategy, overbuild strategy, we don't think we would have gotten to nearly that many homes. And we're north of 700 nodes now deployed with, I'll call, full unified DOCSIS 4.0. So those homes all have a capacity north of 9 gigs down, which is frankly, faster than our 10-gig XGS-PON goes in other markets. And yes, so -- and being a rural market cable company, Senator Duckworth came by and was very excited that we were deploying, of course, in her state of Illinois. But also, I think there is a lot of concern among politicians and others and maybe appropriately so, that they don't want a new digital divide or a continued digital divide. And so we see a lot of representatives from states that have a significant rural market concerned about whether the next generations of technologies and the capabilities that AI and other things will bring to the country leave out a certain portion of their constituents. And so being a rural market company, these technologies deploy exceptionally well in the densities that we are at. And like I said, they're very quick to market. And the other two highlights I just give, we absolutely run fiber-to-the-home markets as well and running XGS-PON. And I can tell you, an upgraded DOCSIS network is every bit as reliable as a PON network, at least the way we see it and monitor. So we're very excited about that. And the upgrade process is very customer-friendly and that we're the incumbent Internet provider, broadband provider. We have the majority of the penetration. And all of our existing customers, they can keep their CPE, they can keep their current connections. We don't have to swap anything. It's only if they want to take one of the new capabilities and new speeds that are going to be -- that are being enabled with these upgrades, then we can swap it. But for a lot of the customers on day 1, they like to hear about investment in the community. But as long as that investment doesn't disadvantage them today with what they're doing, and that's a great part of that technology.

That's great, J.R. And we're proud of the partnership, and we're proud to partner with someone who's visionary in this business as you and the Mediacom team. Cash, you talked a lot about fiber, but I understand your strategy is a hybrid approach with a bit of fiber and DOCSIS 4. Would you mind telling us a little bit about that?

Yes, 100%. It's interesting. It's a bit of a religious debate, right, or philosophical debate, fiber over here or HSC over here, one's good, one's bad. And at the end of the day, we've all been around a very long time, and that is certainly not the case. There are situational reasons why it may be a pure-play fiber or it may be upgraded HFC. I have lots of conversations with our Board and our investment group on DOCSIS. And there are times where it comes with -- there's a negative association, not with DOCSIS, but maybe with the coax cable. And -- but a lot of education on really where DOCSIS is at today, and it's the point that J.R. just made, customer experience, reliability of service, products offered. I mean, in today's DOCSIS is far and away different than anything where we have been. And again, it's an evolutionary path. So we -- I don't see a scenario where we'll ever have one or the other, it's going to be a combination of. I think we talked about it briefly in one of the presentations. There are certain use cases -- MDUs are a good example of a use case, where HFC and the utilization of the internal wiring inside of an MDU, where HFC is very critical because you may not physically be able to get fiber to the unit, costs, operational complexity or other where in most buildings, certainly in the United States, there is coax that had been prewired when that facility was constructed. So to be able to utilize that and again, the technology is sitting on that table over there, your fiber in, but still DOCSIS kind of within is a very critical part of our go-forward plan.

A balanced approach. I think many operators are looking at that, and it's an interesting word. Next topic is AI, a bit of a hot topic these days. Enormous attention across the board. Network operators are looking at, as Yaniv described, everything from homegrown to what do we do? Love your insights on the panel here. Where do you see AI creating the most measurable value in broadband operations? And we're going to start with Eric.

Yes, absolutely. So I think the most important for us is the customer experience, what is that customer's experience using our services? And it's interesting. There's -- some customers, they may have some issues that are totally fixable, but they're not even calling us up. So being able to leverage a platform like Sense AI to really know what's happening in the network. And it's not as simple as just one location. We have to look at what's happening in our hub sites, what's happening in our networks. You heard the example of pointing out the CDN problem. Collecting all that data, we have access to all that data at different points in the network to understand what's happening. But to be able to put it together, we weren't able to do that before these AI capabilities were there. So that's really important. And another thing is as we're -- whether it's someone calling into the call center or someone in the field looking into something, to be able to present to that agent or that rep in the field to better understand what's happening, we're able to identify issues faster as well as be able to get out there and fix things faster. We're not all grace with lovely days outside. Folks are out in the rain up in the bucket truck in inclement weather. So to be able to identify faster and rather than kind of drive to different locations and find out what's happening, to be able to really put the pinpoint on where the issue is and target that to resolve the issue and best serve the customer, that's really the thing that drives and excites me towards these opportunities that are out there now.

Great insights. AI is a mission, a game changer in AI operations. That's interesting. Excellent. J.R., how about you?

Yes. I think Eric has still probably the #1 or #2 answer. But there are more. I mean there's a lot of things to be delivered. So let me hit on one, I think, is also add some value. Designing networks is a lot about balancing the capability and performance of the network against the reliability of the network. And often, it's a sliding scale, right? You become more reliable by sort of backing off from the edge capabilities of the technology. And I think when you have large, diverse multistate, multi-technology networks, you pick a sweet spot someplace and you visit it every once in a while, but you're not visiting it in real time. It's just not practical. And AI really changes that for us, right? We can -- we see so much from the monitoring telemetry of the network, we know the impact that, that has. But when you have to equate that over tens of thousands of nodes and service groups. The AI can come in and say, okay, great. Yes, while we're getting things fixed, and that's a great thing and improving the network; we can adjust the capability of the network and we can -- and sort of the fundamental engineering of the network to slide it more towards reliability, for example. We don't need maximum performance probably 20 out of 24 hours of the day. And even if we are at that point where we want maximum performance, offline doesn't -- is far worse than a little bit slower, but fully functional, right? So you want to be able to adjust that slider in real-time. And always -- the way we look at it, reliability has to be #1, performance is #2. And we want both at all times. But being able to adjust in real-time really gives us a lot of capabilities that -- and to manage that network and engineer that network in a way we -- it's hard to do today.

Excellent share. Subscriber experience is everything. That's excellent. Cash, how about you?

Now that they've stole all over, there's probably not a topic that I've spent personally more time on in educating and learning and talking about than AI, right? There's all the buzz associated with it. And really, my view is it's not just AI, there's a whole umbrella of this kind of technology enablement, systems, platforms, processes, how we operate the business under that umbrella. AI is a component of that. And what I talk a lot about, we just got to run the railroad better. We got to be smarter, we got to be better, faster, cheaper, more efficient. We can't just throw more bodies at -- as our businesses scale, it's like hard things to do, but there is volume of work, and we got to be more efficient in how we do that work. And we've all been around a long time, and customer care reps are great, [indiscernible] techs are great and field techs are great, but they're not always great. And to have technology platforms that help them, that educate them, to help our customers and do as much as we possibly can hands off. And I know there's a lot of debate on digital assistance or AI call center reps and how people react and respond to that. It's a lot of fun. If anybody wants to listen to some recorded phone calls on a Saturday night and how people engage with that and then fine-tuning that to make it -- but it's all about just delivering a better and cheaper experience through technology means and smart kind of implementation of AI. It's not to take over the world because we very much believe human in the loop, AI is where we are and where we need to be to help us and to enable us to do better, faster, cheaper and more efficient.

This is great. A lot of optimism on the stage. And I think this panel is a great barometer for our industry and their insights as well. Excellent. Question, over the next 5 years, where do you -- what are you prioritizing as your network investments? And what's driving those decisions? We're going to start down at the end with J.R.

Yes. So we're really prioritizing our investments on experiential type things, right? And I know we're doing a lot of upgrades. And so you might argue, well, that's really about adding capacity. But we really look at it as the experience, right? We need -- and it's a lot about the reliability. It's a lot about having the network capabilities allow us to roll out new products, new capabilities very quickly. And look, we're happy to have more capacity as well, but that wasn't the principal driver for it. We would have picked different technologies if that was the most important thing. We're constantly reminded, and it's maybe the hardest thing for a CTO, customers don't buy technology. Politicians get excited about technology and engineers get excited about technologies. Customers buy experience. If you're investing in experience, you will win. And if you're investing in technology, you will not. This broadband business is a great business. There's a lot of people who want a piece of the pie. And we think that investing in the experience is the way to go.

Excellent, J.R. Thank you. I got some great notes for our final question at the end. Cash, insights?

Yes. I mean I think similar, we talked about just from an upgrade standpoint, but there is an aspect of ours return on invested capital. We're spending a lot of money. This is a capital-intensive business as everybody certainly knows, what do we get from that? And our prioritization isn't about upgrading networks for the sake of being cool or because that's where the industry is going. We need to keep pace and all these are competitive markets. I think every market of any size and maybe some smaller than that will have competitive providers. In fact, I just think that is the world that we are going to live in and delivering solutions and investing in solutions that do improve the customer experience because as J.R. said, they are not buying technology in a very hypercompetitive space. And again, back to -- we got to run the railroad as efficiently as we possibly can and protect every dollar of investment and measure the return.

Excellent. We've got time for one last question. And J.R., you made a comment, customers buy experience. So why Harmonic? Why do you all buy from Harmonic? Why do you choose to partner with Harmonic? Eric, why don't you start out?