Viavi Solutions(VIAV)

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Here's Why Viav Solutions (VIAV) is a Strong Momentum Stock
ZACKS· 2025-02-05 15:51
Core Insights - Zacks Premium provides various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores serve as complementary indicators to the Zacks Rank, helping investors identify stocks with high potential for market outperformance [2] Zacks Style Scores Overview - Stocks are rated from A to F based on value, growth, and momentum characteristics, with A indicating the highest potential for outperformance [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] Value Score - Focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales to find attractive investment opportunities [3] Growth Score - Evaluates stocks based on projected and historical earnings, sales, and cash flow to identify companies with sustainable growth potential [4] Momentum Score - Targets stocks experiencing upward or downward trends in price or earnings, utilizing factors like one-week price change and monthly earnings estimate changes [5] VGM Score - Combines the three Style Scores to provide a comprehensive rating, helping investors find stocks with the best value, growth, and momentum [6] Zacks Rank Integration - The Zacks Rank uses earnings estimate revisions to simplify stock selection, with 1 (Strong Buy) stocks historically yielding an average annual return of +25.41% since 1988 [7][8] - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [9] Company Spotlight: Viavi Solutions Inc. - Viavi Solutions is a provider of network test and monitoring solutions, with a diverse product portfolio aimed at optimizing complex networks [11] - Currently rated 3 (Hold) on the Zacks Rank, Viavi has a VGM Score of A and a Momentum Style Score of A, with shares increasing by 21.8% in the past four weeks [12] - Analysts have revised earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate rising by $0.02 to $0.40 per share, and an average earnings surprise of 7.5% [12]
VIAVI XEdge Provides All-In-One, Cloud-Based Monitoring Solution for Edge Network Environments
Prnewswire· 2025-02-04 11:30
Core Insights - VIAVI Solutions Inc. has launched XEdge, the first all-in-one solution for continuous edge network testing and monitoring at scale, designed to meet the growing reliance on wireless technologies across various industries [1][4]. Group 1: Product Features - XEdge integrates a multi-carrier RF probe and an innovative controller, enabling network managers to optimize complex wireless technologies [1]. - The solution supports multi-SIM, built-in sensors, and autonomous testing, allowing for flexible use as handheld units or unattended monitors [2][5]. - XEdge combines a centralized controller with versatile devices, providing a unified web-based interface for efficient management, data visualization, and analysis [5]. Group 2: Market Context - The adoption of 4G and 5G technologies is increasing beyond commercial mobile networks, with enterprises deploying private networks tailored to their specific industry needs [3]. - Public safety networks and transportation communications are also integrating 5G technology into their proprietary networks [3]. Group 3: Technological Advancements - XEdge utilizes modern cloud-based architecture and advanced edge computing and AI technologies to streamline SLA monitoring, transforming it into an automated process [4]. - The system supports multiple standalone and non-standalone 5G NR as well as LTE-FDD/TDD, LAA bands, and interfaces for Wi-Fi, cellular, Ethernet, and USB/USB-C [6]. Group 4: Compliance and Integration - XEdge complies with FCC Part 15 and holds IC and CE certifications, ensuring regulatory adherence [7]. - The solution allows integration with third-party systems via a REST API, facilitating extended control and data exchange [7].
Viavi Solutions(VIAV) - 2025 Q2 - Quarterly Report
2025-01-31 21:15
Financial Performance - Net revenue for the second quarter of fiscal 2025 was $270.8 million, an increase of $16.3 million or 6.4% year-over-year [183]. - GAAP operating margin was 8.2%, a decrease of 60 basis points year-over-year, while non-GAAP operating margin improved to 14.9%, an increase of 170 basis points year-over-year [183]. - GAAP net income was $9.1 million, down $1.6 million or 15.0% year-over-year, whereas non-GAAP net income rose to $29.4 million, up $5.7 million or 24.1% year-over-year [183]. - GAAP diluted EPS was $0.04, a decrease of $0.01 or 20.0% year-over-year, while non-GAAP diluted EPS increased to $0.13, up $0.02 or 18.2% year-over-year [183]. - Total net revenue for the three months ended December 28, 2024, increased by $16.3 million, or 6.4%, compared to the same period a year ago, driven by higher spending by service providers and Network Equipment Manufacturers (NEMs) [194]. - Product revenues increased by $14.8 million, or 7.0%, during the three months ended December 28, 2024, primarily due to revenue increases in the NE segment [196]. - Service revenues increased by $1.5 million, or 3.4%, during the three months ended December 28, 2024, driven by the NE segment [197]. Operational Insights - The Network and Service Enablement (NSE) business environment is showing signs of stabilization, indicating a gradual recovery driven by service providers and enterprise customer markets [179]. - The performance of Optical Security and Performance Products (OSP) was marginally impacted by slower demand for 3D sensing products [179]. - The company continues to monitor near-term demand for anti-counterfeiting products as end customers work down their inventories [179]. - NE net revenue increased by $23.5 million, or 15.1%, during the three months ended December 28, 2024, driven by higher volume in various segments [228]. - SE net revenue decreased by $3.2 million, or 13.3%, during the three months ended December 28, 2024, primarily due to lower Assurance revenue [230]. - OSP net revenue decreased by $4.0 million, or 5.3%, during the three months ended December 28, 2024, primarily driven by lower consumer and industrial revenue [233]. Cost and Expense Management - Research and development expenses rose by $2.6 million, or 5.3%, during the three months ended December 28, 2024, representing 19.2% of net revenue [192]. - Selling, general and administrative expenses increased by $9.5 million, or 12.7%, during the three months ended December 28, 2024, accounting for 31.1% of net revenue [192]. - Provision for income taxes increased by $1.9 million, or 25.0%, during the three months ended December 28, 2024, representing 3.5% of net revenue [192]. - Interest expense decreased by $0.4 million, or 5.1%, during the three months ended December 28, 2024, due to lower outstanding debt [222]. Margins and Profitability - Gross margin improved by 1.2 percentage points from 58.2% to 59.4% during the three months ended December 28, 2024, mainly attributed to the NE segment [203]. - Gross margin increased by 0.1 percentage points to 58.3% for the six months ended December 28, 2024, compared to 58.2% in the same period a year ago [204]. - OSP gross margin increased by 0.8 percentage points to 53.1% for the six months ended December 28, 2024, compared to 52.3% in the same period a year ago [235]. - NSE operating margin increased by 5.1 percentage points to 8.7% during the three months ended December 28, 2024, compared to 3.6% in the same period a year ago [232]. - OSP operating margin decreased by 4.0 percentage points to 32.4% for the three months ended December 28, 2024, down from 36.4% in the same period a year ago [235]. Strategic Outlook - The company plans to defend and consolidate leadership in core business segments and invest in secular trends to drive growth and expand Total Addressable Market (TAM) [181]. - Future expectations include continued productivity improvements in Operations, Research and Development (R&D), and Selling, General and Administrative (SG&A) [181]. - The company is focused on executing strategic priorities to drive revenue and earnings growth, capture market share, and optimize capital structure [181]. - The company anticipates ongoing industry and market risks, including uncertainties around customer procurement decisions and the adoption of 5G technology [198]. Cash Flow and Capital Management - Cash provided by operating activities was $58.2 million for the six months ended December 28, 2024, consisting of net income of $7.3 million adjusted for non-cash charges totaling $44.1 million [244]. - Cash used in investing activities was $15.8 million, primarily for capital expenditures of $15.5 million during the six months ended December 28, 2024 [245]. - Cash used in financing activities was $21.9 million, mainly due to $16.4 million for share repurchases and $8.3 million in withholding tax payments [246]. - The company repurchased 2.0 million shares of common stock for $16.4 million under the 2022 Repurchase Plan, with remaining authorization of $198.4 million [247]. - As of December 28, 2024, the company had no borrowings under its $300.0 million credit facility, with available borrowing capacity of approximately $153.5 million [242]. - The company maintains a focus on capital preservation and liquidity requirements, with investments primarily in high credit quality securities [239]. Pension and Workforce - The fair value of pension plan assets decreased approximately 5.2% since June 29, 2024, resulting in an under-funding of $48.8 million [252]. - The company expects approximately 7% of its global workforce to be affected by the restructuring plan, estimating annualized gross cost savings of approximately $25.0 million [214].
Viavi Solutions Recovery Well Underway, Analyst Upgrades Stock, Forecasts Stronger 2025
Benzinga· 2025-01-31 19:46
Core Viewpoint - Viavi Solutions has been upgraded from Hold to Buy with a price target of $15 following strong quarterly results, indicating a positive outlook for the company [1]. Financial Performance - Fiscal Q2 2025 revenue reached $271 million, reflecting a year-over-year increase of 6.4% and a quarter-over-quarter increase of 13.7%, surpassing the consensus estimate of $260 million [1]. - Adjusted EPS for the quarter was $0.13, exceeding the consensus of $0.10 [1]. - The adjusted gross margin was 61.1%, up 110 basis points year-over-year and 200 basis points quarter-over-quarter, above the consensus of 59.2% [2]. - Adjusted operating margin stood at 14.9%, also above the consensus of 12.7% [2]. Segment Performance - Network and Service Enablement (NSE) sales, which account for 74% of total revenue, exceeded guidance, with Network Enablement sales increasing by 15.1% year-over-year, while Service Enablement sales decreased by 13.3% year-over-year [2][3]. - Optical Security and Performance Products (OSP) sales, making up 26% of revenue, were slightly below guidance, declining by 5.3% year-over-year [3]. Future Guidance - For fiscal Q3 2025, revenue is projected to be between $276 million and $288 million, above the consensus of $256 million, with adjusted EPS expected between $0.10 and $0.13 [4]. - The company anticipates an adjusted operating margin of 13% to 15%, compared to the consensus of 12.1% [4]. - NSE revenue for Q3 is expected to be between $202 million and $212 million, with an adjusted operating margin of 6% to 8% [4]. Market Drivers - Key growth drivers include the resumption of 5G upgrades in North America, new fiber broadband deployments, and optical transport upgrades to support data center interconnectivity [6]. - Management noted strong demand for fiber sensing technology across various global segments, including cloud data centers [3]. Analyst Updates - Analyst Ryan Koontz revised fiscal 2025 revenue and EPS estimates to $1.08 billion and $0.43, respectively, up from $1.04 billion and $0.38 [7]. - Fiscal 2026 estimates were also increased to $1.14 billion and $0.49 from $1.08 billion and $0.47 [7]. - The analyst highlighted improving predictability and profitability in Viavi Solutions' results, indicating a recovery in North American service providers [8][9].
Viavi Solutions' Earnings Beat Was Impressive, But I'm Staying Cautious
Seeking Alpha· 2025-01-31 18:17
Core Insights - Viavi Solutions Inc. (NASDAQ: VIAV) experienced a significant increase of +20% in pre-market trading following the release of its Q2 FY2025 earnings, indicating a positive market reaction to the financial results [1] Financial Performance - The earnings release for Q2 FY2025 has generated excitement for Viavi Solutions, which had previously seen limited movement in its stock price over the past year [1]
Viavi Q2 Earnings Beat Estimates on Solid Revenue Growth
ZACKS· 2025-01-31 15:01
Core Viewpoint - Viavi Solutions Inc. reported strong second-quarter fiscal 2025 results, with adjusted earnings and revenues exceeding Zacks Consensus Estimates [1] Financial Performance - Net income on a GAAP basis was $9.1 million or 4 cents per share, down from $10.7 million or 5 cents per share in the prior year, primarily due to high operating expenses and income tax provisions [3] - Non-GAAP net income was $29.4 million or 13 cents per share, an increase from $23.7 million or 11 cents per share in the previous year, surpassing the Zacks Consensus Estimate by 3 cents [4] - Quarterly revenues reached $270.8 million, a 6.4% increase from $254.5 million in the year-ago quarter, beating the Zacks Consensus Estimate of $260 million [5] Segment Performance - The Network Enablement (NE) segment reported net sales of $179 million, up from $155.5 million in the prior year, reflecting a 15.1% growth driven by strong demand from service providers and network equipment manufacturers [5] - Revenues from the Service Enablement (SE) segment were $20.9 million, down 13.3% year over year due to conservative spending by enterprise customers [6] - Optical Security and Performance Products (OSP) revenues declined to $70.9 million from $74.9 million in the previous year, primarily due to weaker demand for 3D sensing products [6] Geographic Performance - Revenues from the Americas contributed $116.1 million, up from $103.1 million in the prior year [7] - Revenues from Asia-Pacific were $93.6 million, a 17.7% increase from $79.5 million in the previous year [7] - Revenues from EMEA decreased to $61.1 million from $71.9 million in the prior year [7] Margins and Operating Performance - Non-GAAP gross margin was 61.1%, up 110 basis points year over year [8] - GAAP gross margin in the NE segment was 64.5%, an increase of 200 basis points year over year [8] - Non-GAAP operating margin increased 170 basis points year over year to 14.9% [9] Cash Flow and Liquidity - The company generated $44.7 million in cash from operating activities, significantly up from $20.4 million in the year-ago period [10] - As of December 28, 2024, the company had $488 million in cash and cash equivalents and $639.3 million in long-term debt [11] Outlook - For the third quarter of fiscal 2025, management expects revenues between $276 million and $288 million, with non-GAAP operating margin projected at 13%-15% and non-GAAP earnings per share between 10 and 13 cents [12] - Revenues for the NSE business are projected to be between $202 million and $212 million, with a non-GAAP operating margin of 6-8% [12] - Revenues for the OSP segment are anticipated to be in the range of $74 million to $76 million, with a non-GAAP operating margin of 32-34% [12]
Viavi Solutions(VIAV) - 2025 Q2 - Earnings Call Presentation
2025-01-31 04:11
Fiscal Q2 2025 Earnings Call Supplementary Slides January 30, 2025 Note: Amounts presented in all slides are on a continuing operations basis unless otherwise noted. VIAVI//Public © 2025 Viavi Solutions Inc. 1 Fiscal Q2 2025 Summary and Key Highlights (Amounts in Millions and Other Than Revenue Reflect Non-GAAP) 18.2% Y/Y 19.9% Y/Y 6.4% Y/Y KEY METRICS HIGHLIGHTS ■ Revenue, Non-GAAP Operating Margin and Non- GAAP EPS came in above high end of our guidance range. ■ Generated operating cash flow of $44.7 mill ...
Viavi Solutions(VIAV) - 2025 Q2 - Earnings Call Transcript
2025-01-31 04:10
Financial Data and Key Metrics Changes - Net revenue for Q2 2025 was $270.8 million, exceeding the guidance range of $255 million to $265 million, representing a 13.7% sequential increase and a 6.4% year-over-year increase [7] - Operating margin for Q2 was 14.9%, significantly above the guidance range of 11.4% to 13.4%, and increased by 490 basis points sequentially and 170 basis points year-over-year [7][8] - EPS was $0.13, above the guidance range of $0.09 to $0.11, up $0.07 sequentially and $0.02 year-over-year [8] Business Segment Data and Key Metrics Changes - NSE revenue for Q2 was $199.9 million, at the high end of the guidance range of $184 million to $192 million, driven by strong order pace from service providers and NEMs, with an 11.3% year-over-year increase [9] - NE revenue was $179 million, up 15.1% year-over-year due to strong demand for lab and field instruments [10] - SE revenue was $20.9 million, down 13.3% year-over-year, primarily due to conservative spending from enterprise customers [10] - NSE gross margin was 64.8%, up 140 basis points year-over-year, while NE gross margin was 64.5%, up 200 basis points [11] - OSP revenue was $70.9 million, slightly below the guidance range, down 5.3% year-over-year due to weaker demand for 3D sensing products [11][12] Market Data and Key Metrics Changes - Strong demand for fiber monitoring systems from service providers and hyperscalers was noted, particularly in North America [21][30] - The aerospace and defense segment showed robust year-on-year growth, driven by mission-critical products [22] - The company expects a stronger seasonality trend across most segments in Q3, with demand for anti-counterfeiting products stabilizing [15][25] Company Strategy and Development Direction - The acquisition of Inertial Labs is aimed at strengthening the company's position in the PNT space, complementing existing technology and expanding into high-growth markets [23][65] - The company is focused on capital allocation towards M&A opportunities that align with EPS growth [39][40] - The company anticipates continued recovery momentum through fiscal 2025, particularly in the NSE segment [20][24] Management's Comments on Operating Environment and Future Outlook - Management noted signs of gradual recovery in traditional end markets and strong demand in fiber and wireless segments [19][20] - The company is optimistic about the North American market, particularly regarding the conversion of 4G to 5G spectrum [56][74] - Management highlighted the importance of addressing customer needs in the AI and private networks space, indicating potential growth drivers for the SE business unit [76][78] Other Important Information - Total cash and short-term investments at the end of Q2 was $512.8 million, up from $497.9 million in Q1 [13] - The company did not repurchase any shares during the quarter, prioritizing capital allocation towards M&A [14] Q&A Session Summary Question: Can you discuss the demand for fiber monitoring? - Management indicated that demand is driven by telcos and emerging hyperscalers who are investing in sophisticated fiber monitoring systems to ensure performance and accountability [30][31] Question: What is the visibility on 800 gig shipments? - Management expects 800 gig to be the volume driver for the year, with 1.6 terabit products entering production towards the end of the calendar year [35][36] Question: What is the appetite for further M&A? - Management confirmed that M&A remains part of the capital allocation model, with a focus on finding the right opportunities that enhance EPS growth [39][40] Question: How much of the revenue growth came from cyclical vs. secular drivers? - Management estimated that a third to half of the growth came from cyclical recovery in service provider spending, with the rest from diversification efforts [44] Question: What is the outlook for the SE business? - Management noted strong interest in AI ops but acknowledged challenges in deployment speed, indicating a potential for significant growth in the future [76][78] Question: What is the status of the 3D sensing market? - Management indicated that 3D sensing demand is typically stronger in the first half of the fiscal year, with expectations for a seasonal recovery in the second half [100][102]
Viav Solutions (VIAV) Q2 Earnings and Revenues Surpass Estimates
ZACKS· 2025-01-30 23:30
Core Viewpoint - Viav Solutions reported quarterly earnings of $0.13 per share, exceeding the Zacks Consensus Estimate of $0.10 per share, and showing an increase from $0.11 per share a year ago, indicating a 30% earnings surprise [1][2] Financial Performance - The company achieved revenues of $270.8 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.33%, compared to $254.5 million in the same quarter last year [2] - Over the last four quarters, Viav Solutions has exceeded consensus EPS estimates two times and topped revenue estimates twice [2] Stock Performance and Outlook - Viav Solutions shares have declined approximately 2% since the beginning of the year, while the S&P 500 has gained 2.7% [3] - The company's earnings outlook is uncertain, with current consensus EPS estimates at $0.09 for the upcoming quarter and $0.38 for the current fiscal year, with revenues expected to be $254.61 million and $1.02 billion respectively [7] Industry Context - The Communication - Components industry, to which Viav Solutions belongs, is currently ranked in the top 30% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5][6]
VIAVI Announces Second Quarter Fiscal 2025 Results
Prnewswire· 2025-01-30 21:15
Core Insights - VIAVI's financial performance for the second quarter ended December 28, 2024, exceeded expectations, driven by recovering demand in the Network Service Enablement (NSE) sector and diversification into new markets such as data centers and aerospace [3][4][5] Financial Overview - Net revenue reached $270.8 million, an increase of $16.3 million or 6.4% year-over-year [5][6] - GAAP operating margin was 8.2%, down 60 basis points year-over-year, while non-GAAP operating margin improved to 14.9%, up 170 basis points year-over-year [5][6] - GAAP net income was $9.1 million, a decrease of 15.0% year-over-year, whereas non-GAAP net income increased by 24.1% to $29.4 million [5][6] - GAAP diluted earnings per share (EPS) was $0.04, down 20.0% year-over-year, while non-GAAP diluted EPS rose to $0.13, an increase of 18.2% year-over-year [5][6] Segment Performance - Revenue from the Network Enablement segment was $179.0 million, up 26.4% quarter-over-quarter and 15.1% year-over-year [4][5] - Service Enablement revenue was $20.9 million, reflecting a 17.4% increase quarter-over-quarter but a 13.3% decline year-over-year [4][5] - Optical Security and Performance Products revenue was $70.9 million, down 10.0% quarter-over-quarter and 5.3% year-over-year [4][5] Business Outlook - For the third quarter of fiscal 2025, the company expects net revenue to be between $276 million and $288 million, with non-GAAP EPS projected between $0.10 and $0.13 [8][9] Acquisition Update - VIAVI completed the acquisition of Inertial Labs, Inc. on January 28, 2025, which is expected to enhance its capabilities in the aerospace and defense sectors [7]