Harmonic Posts ROCE Surge Amid Margin Expansion, Capital Efficiency

Harmonic Inc. has demonstrated significant capital efficiency improvements, reversing prior losses with a surge in Return on Capital Employed (ROCE) driven by margin expansion and disciplined cost management, alongside a 21% reduction in capital employed to focus on high-margin segments. Motley Fool analysts highlighted strong earnings and growth from capital compounders like Axon Enterprises and MercadoLibre, emphasizing their ability to reinvest rapidly and sustain market-beating returns despite skepticism about valuation. Similarly, Roper Technologies exemplifies disciplined capital allocation and strategic acquisitions in vertical software sectors, leveraging AI not just for cost-cutting but to expand markets and create new revenue, as evidenced by its recent $800 million acquisition of Subsplash. These companies illustrate distinct strategies for long-term value creation through efficient capital use, innovation, and leveraging recurring revenue models and proprietary data to fuel growth. Together, they provide investors with diverse case studies on how disciplined capital allocation and strategic innovation can generate durable growth in volatile and disruptive market environments.