**CORRECTED** Harmonic Announces Fourth Quarter 2010 Results

Thursday, February 3, 2011

Strong Year-over-Year Growth in Revenue and Non-GAAP Earnings

Harmonic Inc. (NASDAQ: HLIT), a global leader in video infrastructure solutions, today announced its preliminary and unaudited results for the quarter and year ended December 31, 2010. Results for the fourth quarter of 2010 included a full quarter of contribution from Omneon Inc., acquired on September 15, 2010.

Net revenue for the fourth quarter of 2010 was $138.2 million, which excluded $0.8 million of certain deferred revenue that would otherwise have been recognized by Omneon had the acquisition not occurred, up from $86.7 million in the fourth quarter of 2009. Total bookings in the fourth quarter of 2010 were approximately $134.8 million, up from approximately $107.6 million for the fourth quarter of 2009. For the full year 2010, net revenue was $423.3 million, which excluded $2.1 million of certain deferred revenue referenced above, up from $319.6 million in 2009.

Omneon contributed $30.9 million in net revenue during the fourth quarter of 2010, which excluded certain deferred revenue referenced above. Excluding Omneon’s contribution, Harmonic’s stand-alone net revenue was $107.3 million in the fourth quarter of 2010, up 8% from the previous quarter and up 24% from the fourth quarter of 2009. For the full year 2010, Harmonic’s stand-alone net revenue was $386.8 million, up 21% from 2009. The growth in revenues reflected continued demand across different geographies and markets, as well as year end spending by some of our customers. International sales represented 54% of Harmonic’s net revenues for the fourth quarter of 2010.

The Company reported a GAAP net loss for the fourth quarter of 2010 of $13.7 million, or $0.12 per share, compared to net income of $47 thousand, or $0.00 per diluted share, for the fourth quarter of 2009. For the full year 2010, the Company’s GAAP net loss was $4.3 million, or $0.04 per share, compared to a GAAP net loss of $24.1 million, or $0.25 per share, in 2009.

Non-GAAP net income for the fourth quarter of 2010 was $12.5 million, or $0.11 per diluted share, up from $6.3 million, or $0.07 per diluted share, for the same period of 2009. For the full year 2010, non-GAAP net income was $36.4 million, or $0.35 per diluted share, compared to $18.0 million, or $0.19 per diluted share, for 2009. See “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Income (Loss) Reconciliation” below. For the fourth quarter of 2010, Harmonic had GAAP gross margins of 44% and GAAP operating margins of (2%), compared to 45% and 4%, respectively, for the same period of 2009. Non-GAAP gross margins were 51% and non-GAAP operating margins were 13% for the fourth quarter of 2010, up from 48% and 11%, respectively, for the same period of 2009. As of December 31, 2010, the Company had cash, cash equivalents and short-term investments of $120.4 million, up from $110.1 million as of October 1, 2010.

“Throughout 2010, Harmonic significantly expanded its leadership position in enabling the new video economy,” said Patrick Harshman, President and Chief Executive Officer. “Our traditional business grew by 21%, driven by the growing worldwide investment in video services, and by our strong competitive position and expanding international sales organization. The September acquisition of Omneon further expanded the breadth of our solutions, our global broadcast and media customer base and our international presence.

“Moving into 2011, we expect broadcasters, media companies and video service providers around the globe to continue to invest in producing and delivering high-value video programming and services. You can expect us to continue to introduce innovative video technologies that enable this dynamic video marketplace. We’re excited about our expanding opportunities for growth in 2011 and beyond.”

Business Outlook
Harmonic anticipates net revenue in a range of $129 million to $132 million for the first quarter of 2011. GAAP gross margins and operating expenses for the first quarter of 2011 are expected to be in the range of 45% to 47% and $61 to $62 million, respectively. Non-GAAP gross margins and operating expenses for the first quarter of 2011, which will exclude charges for stock-based compensation and the amortization of intangibles, are anticipated to be in the range of 50% to 52% and $53 to $54 million, respectively.

Conference Call Information
Harmonic will host a conference call today to discuss its financial results at 2:00 P.M. Pacific (5:00 P.M. Eastern). A listen-only broadcast of the conference call can be accessed on the Company’s website at www.harmonicinc.com or by calling +1.706.634.9047 (conference identification code50192422). The replay will be available after 6:00 P.M. Pacific at the same website address or by calling +1.706.645.9291 (conference identification code 50192422).

About Harmonic Inc.
Harmonic Inc. offers a comprehensive, innovative and market-leading portfolio of video infrastructure solutions, spanning content production to multi-screen video delivery. Harmonic customers can efficiently create, prepare and deliver differentiated video services over broadcast, cable, Internet, mobile, satellite and telecom networks, while simplifying end-to-end asset management, reducing costs and streamlining workflows. Harmonic (NASDAQ: HLIT) is headquartered in San Jose, California, with R&D, sales and system integration centers worldwide. The company’s customers—including each of the top 20 Fortune 2000 media companies—choose Harmonic to enable their high quality video services delivered to consumers in virtually every country. Visit www.harmonicinc.com for more information.

Legal Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements related to: our expectations regarding our final results for the fourth quarter ended December 31, 2010; our expectation that, with the addition of Omneon in September 2010, we will further expand the breadth of our solutions, our customer base of global broadcast and media companies and our international presence; our expectation that broadcasters, media companies and video service providers will invest in high-value video programming and services; our expectation that we will introduce innovative video tech- nologies that enable the dynamic video marketplace; our expectations about expanded opportunities for growth; and our expectations regarding net revenue, GAAP gross margins, GAAP operating expenses, non-GAAP gross margins and non-GAAP operating expenses for the first quarter of 2011. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the possibility, in no particular order, that: we will not be able to integrate Omneon into our business as effectively or efficiently as expected; Omneon does not provide Harmonic with the benefits that we expect from the acquisition; the trends toward more high-definition, on-demand and anytime, anywhere video will not continue to develop at its current pace, or at all; the possibility that our products will not generate sales that are commensurate with our expectations; the mix of products and services sold in various geographies and the effect it has on gross margins; delays or decreases in capital spending in the cable, satellite and telco and broadcast and media industries; customer concentration and consolidation; the impact of general economic conditions, including recent turmoil in the global financial markets, particularly on international sales and operations; market acceptance of new or existing Harmonic products; losses of one or more key customers; risks associated with Harmonic’s international operations; inventory management; the effect of competition; difficulties associated with rapid technological changes in Harmonic’s markets; the need to introduce new and enhanced products and the risk that our product development is not timely or does not result in expected benefits or market acceptance; risks associated with unpredictable sales cycles; our dependence on contract manufacturers; and the risks that our international sales and support center will not provide the operational or tax benefits that we anticipate or that its expenses exceed our plans. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Harmonic’s filings with the Securities and Exchange Commission, including our annual report filed on Form 10-K for the year ended December 31, 2009, our Form 10-Q for the quarter ended October 1, 2010 and our current reports on Form 8-K. The forward-looking statements in this press release are based on information available to the Company as of the date hereof, and Harmonic disclaims any obligation to update any forward-looking statements.

Editor’s Note: Product and company names used herein are trademarks or registered trademarks of their respective owners.