While Wall Street fixates on Harmonic's DOCSIS 4.0 rollout and the potential for a second-half surge in broadband revenue, a quiet revolution is brewing within the company. Hidden beneath the headline numbers lies a fiber-to-the-home (FTTH) strategy that's poised to not only diversify Harmonic's business but potentially reshape the broadband landscape itself.

Harmonic's dominance in the DOCSIS market is undeniable. They've secured a fourth consecutive year of market share leadership in the DAA category and are the global leader in total cable broadband equipment. Yet, as impressive as this achievement is, it represents a known quantity to investors. The company is already serving approximately 16% of cable modems deployed globally, leaving a finite ceiling for future growth within the DOCSIS ecosystem.

But what if Harmonic could tap into a market with even greater potential? Enter FTTH, a technology that's been steadily gaining traction as the gold standard for high-speed internet connectivity. While cable companies have historically favored DOCSIS due to its cost-effectiveness within existing hybrid fiber-coaxial (HFC) networks, the demand for symmetrical gigabit speeds and beyond is pushing them towards FTTH solutions.

Harmonic recognized this shift early on and has been quietly building an FTTH portfolio that leverages their existing expertise in broadband access technologies. The company is pursuing a "fiber islands" strategy, enabling cable operators to strategically deploy FTTH within their HFC footprint to serve high-value customers, multi-dwelling units, and areas facing intense fiber competition. This allows operators to enhance their service offerings in a cost-effective manner, mitigating churn and expanding into new markets.

And the strategy is already bearing fruit. Harmonic announced a significant seven-figure purchase order for their new fiber products from an international Tier 1 customer. This signals a major shift, as it represents the adoption of Harmonic's second-generation FTTH technology by a major player in the industry.

Harmonic's Growing FTTH Revenue

While Harmonic hasn't disclosed specific revenue figures for its FTTH business, clues from their Q1 2024 earnings call suggest rapid growth. CFO Walter Jankovic stated, "Additionally, we exceeded the midpoint of revenue guidance in broadband." This overperformance, coupled with the new international Tier 1 customer win, strongly suggests that FTTH is contributing a larger portion of Harmonic's broadband revenue than previously anticipated.

Harmonic's confidence in accelerating broadband revenue growth in 2025 hints at the potential they see in FTTH. Furthermore, Harmonic is actively expanding its sales force with dedicated fiber specialists, signaling their commitment to aggressively pursue FTTH opportunities both within and beyond their existing cable customer base.

Hypothetical Revenue Projection

The following chart illustrates a potential revenue trajectory for Harmonic's FTTH business based on available information and market trends. It's important to note that this is a hypothetical projection, and actual results may vary.

Implications of Harmonic's FTTH Revolution

This quiet FTTH revolution has profound implications for Harmonic's future:

As the company releases more details during their upcoming Analyst Day in June, investors would be wise to pay close attention to the growth trajectory of this under-the-radar segment. The future of Harmonic may not be solely defined by DOCSIS 4.0, but by their ability to lead the charge into the fiber-powered future of broadband.

"Below is a section of Harmonic's Q1 2024 Earnings Call Transcript related to FTTH revenue: "Additionally, we exceeded the midpoint of revenue guidance in broadband." - Walter Jankovic, CFO"

Walter Jankovic is the Chief Financial Officer at Harmonic Inc. He is responsible for the company's financial operations, including accounting, financial planning and analysis, investor relations, and treasury.

"Fun Fact: Harmonic's technology played a crucial role in the first-ever transmission of high-definition television (HDTV) signals over cable in 1998. This pioneering spirit continues to drive the company's innovation in the broadband and video streaming markets."