Financial Data and Key Metrics Changes - Net revenue for Q2 2024 was $254.5 million, exceeding the guidance range of $240 million to $260 million, but down 10.5% year-over-year [4] - Operating margin was 13.2%, above the guidance range of 9.6% to 12.8%, but down 300 basis points year-over-year [4] - EPS was $0.11, exceeding the guidance range of $0.06 to $0.10, up $0.02 sequentially, but down $0.03 year-over-year [4] Business Segment Data and Key Metrics Changes - NSC revenue was $179.6 million, down 13.3% year-over-year, primarily due to lower CapEx from NEMs and service providers [5] - NE revenue was $155.5 million, reflecting a 15.2% year-over-year decline [5] - SE revenue grew 1.3% year-over-year to $24.1 million [5] - OSP revenue was $74.9 million, down 3.2% year-over-year, but at the high end of guidance [6] Market Data and Key Metrics Changes - The service provider market is expected to remain weak throughout 2024, with some recovery anticipated in cable spending in the latter half of the year [9][10] - Demand for 3D sensing products is expected to decline in the upcoming quarter, with estimates around $10 million [21][22] Company Strategy and Development Direction - The company is diversifying its focus beyond service providers into areas like 11 production and aerospace and defense, which are expected to drive growth [10] - Viavi was awarded a $21.7 million grant to create an advanced test lab for Open RAN technologies, reflecting its leadership in 5G and upcoming 6G [10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the service provider market, noting that while conditions are improving, significant spending is not yet evident [12][13] - The company anticipates stronger demand in fiber production and aerospace and defense, which may offset weaknesses in service provider spending [9][10] Other Important Information - Total cash and short-term investments at the end of Q2 were $571.8 million, up from $489.7 million year-over-year [7] - The company plans to retire $96.4 million of convertible notes, impacting share buyback plans in the near term [7][42] Q&A Session Summary Question: Service provider market outlook - Management indicated that the service provider market is expected to remain weak throughout 2024, with some recovery anticipated in cable spending [11][12] Question: 800G fiber lab production - The 11 production business is recovering, driven by demand for 400 and 800 gig products, with significant contributions expected from AI data center modules [14][15] Question: EPS guidance explanation - EPS guidance is lower due to seasonality and increased costs associated with the beginning of the calendar year [15][16] Question: Lead times in service provider fiber test - Lead times for service provider fiber test orders are generally around two months [18] Question: 3D sensing revenue expectations - 3D sensing revenue is expected to be around $16 million in the upcoming quarter [25] Question: Cable spending triggers - Cable spending is anticipated to increase due to delays in technology readiness, with expectations for orders to ramp up in the second half of the year [32][33] Question: Wireless market recovery signs - Wireless infrastructure spending remains muted, with ongoing R&D CapEx for 5G and emerging 6G technologies [35][36] Question: Inventory levels - The company has no inventory in the channel, indicating a need for replacement in the telecom sector [30][39]

PART I - FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=2&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Viavi Solutions reported Q1 FY24 net revenue of $247.9 million, a 20.1% decrease year-over-year, with net income of $9.8 million, total assets of $1.80 billion, and positive operating cash flow of $50.3 million Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Oct 1, 2022 | | :--- | :--- | :--- | | **Total net revenue** | $247.9 million | $310.2 million | | **Gross profit** | $144.4 million | $184.8 million | | **Income from operations** | $16.0 million | $49.8 million | | **Net income** | $9.8 million | $32.6 million | | **Diluted EPS** | $0.04 | $0.14 | Consolidated Balance Sheet Highlights (Unaudited) | Metric | As of Sep 30, 2023 | As of July 1, 2023 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $520.6 million | $506.5 million | | **Total current assets** | $916.1 million | $945.0 million | | **Goodwill, net** | $449.6 million | $455.2 million | | **Total assets** | $1,802.1 million | $1,850.5 million | | **Total current liabilities** | $310.9 million | $343.5 million | | **Long-term debt** | $631.1 million | $629.5 million | | **Total stockholders' equity** | $675.2 million | $690.8 million | Consolidated Statements of Cash Flows Highlights (Unaudited) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Oct 1, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $50.3 million | $26.6 million | | **Net cash used in investing activities** | ($12.6) million | ($29.7) million | | **Net cash used in financing activities** | ($16.1) million | ($26.8) million | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Key notes detail acquisitions like Jackson Labs, significant debt management, ongoing Fiscal 2023 restructuring affecting 5% of the workforce, and segment reporting adjustments - On October 5, 2022, the Company acquired Jackson Labs Technologies, a specialist in Position, Navigation and Timing (PNT) solutions, for approximately **$49.9 million** in cash at closing and up to **$117.0 million** in contingent consideration[37](index=37&type=chunk)[38](index=38&type=chunk) - As of September 30, 2023, the company's remaining performance obligations were valued at **$226.6 million**, with approximately **88%** expected to be recognized as revenue within the next 12 months[51](index=51&type=chunk) - The Fiscal 2023 restructuring plan is expected to affect approximately **5%** of the global workforce and is anticipated to be substantially complete by the end of Q2 fiscal 2024[111](index=111&type=chunk)[112](index=112&type=chunk) - In September 2022, the Board authorized a new stock repurchase plan for up to **$300 million**. During the three months ended September 30, 2023, the company repurchased **1.0 million shares** for **$10.0 million**[118](index=118&type=chunk) - Effective in Q1 fiscal 2024, management moved certain products from the Service Enablement (SE) segment to the Network Enablement (NE) segment to align with operational strategies, with prior period balances recast[150](index=150&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a challenging quarter with a 20.1% revenue decline to $247.9 million due to weak service provider spending and lower anti-counterfeiting demand, anticipating recovery in calendar 2024 - The end-market spending environment was challenging, particularly with North American service providers, creating headwinds for Fiber, Cable, and Wireless Lab product revenues in the NSE segment[163](index=163&type=chunk) - OSP revenues were impacted by weaker demand for anti-counterfeiting products as tight fiscal policies slowed customer inventory consumption[163](index=163&type=chunk) - For Q2 fiscal 2024, revenue is expected to be relatively flat sequentially due to slow recovery in service provider spending and lower anti-counterfeiting demand as customers adjust year-end inventories[166](index=166&type=chunk) - Anticipated recovery drivers for calendar year 2024 include: recovery in Wireless Lab products (5G/6G), increased demand for avionics/military/PNT products, recovery in Fiber and Lab/Production demand, and increased SE product demand[168](index=168&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Total net revenue decreased **20.1%** year-over-year to **$247.9 million**, driven by product revenue decline and gross margin contraction to **58.2%**, despite reduced operating expenses Segment Net Revenue (YoY Change) | Segment | Q1 FY24 Revenue | YoY Change | YoY % Change | | :--- | :--- | :--- | :--- | | **NE** | $150.0 M | ($46.5 M) | (23.7)% | | **SE** | $20.4 M | ($2.0 M) | (8.9)% | | **OSP** | $77.5 M | ($13.8 M) | (15.1)% | | **Total** | **$247.9 M** | **($62.3 M)** | **(20.1)%** | - Gross margin decreased to **58.2%** from **59.6%** in the prior year, primarily due to margin reduction in the NE and OSP segments[190](index=190&type=chunk) - R&D expense decreased by **$2.7 million (5.1%)** due to restructuring benefits and variable expense reductions[192](index=192&type=chunk) - SG&A expense decreased by **$3.0 million (3.7%)** due to restructuring, lower commissions, and favorable fair value adjustments of contingent consideration[194](index=194&type=chunk) - Interest and other income, net, increased by **$9.1 million**, primarily driven by a **$7.3 million** legal settlement and higher interest income[199](index=199&type=chunk) [Operating Segment Information](index=41&type=section&id=Operating%20Segment%20Information) NE segment revenue declined **23.7%** to **$150.0 million** with gross margin at **63.1%**, while SE revenue decreased **8.9%** to **$20.4 million** with improved gross margin, and OSP revenue dropped **15.1%** to **$77.5 million** with gross margin at **52.5%** Segment Performance (YoY Change) | Segment | Q1 FY24 Revenue | Q1 FY24 Gross Margin | Q1 FY24 Operating Margin | | :--- | :--- | :--- | :--- | | **NE** | $150.0 M (-23.7%) | 63.1% (-1.4 pts) | N/A | | **SE** | $20.4 M (-8.9%) | 67.2% (+1.1 pts) | N/A | | **NSE (Combined)** | $170.4 M (-22.2%) | N/A | 0.9% (-12.3 pts) | | **OSP** | $77.5 M (-15.1%) | 52.5% (-4.2 pts) | 37.8% (-4.5 pts) | - NE revenue decrease was driven by lower volumes in Wireless, Field Instruments and Lab and Production, partially offset by PNT revenue[206](index=206&type=chunk) - OSP revenue decrease was primarily driven by lower anti-counterfeiting and consumer and industrial revenue[210](index=210&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2023, the company held **$527.9 million** in cash, generated **$50.3 million** from operations, used **$12.6 million** in investing, and **$16.1 million** in financing, with **$152.1 million** available on its revolving credit facility - Cash provided by operating activities was **$50.3 million**, a significant increase from **$26.6 million** in the same period last year[17](index=17&type=chunk)[220](index=220&type=chunk) - Cash used in financing activities included **$10.0 million** for common stock repurchases and **$9.1 million** for withholding tax payments on vested stock awards[222](index=222&type=chunk) - As of September 30, 2023, the company had no borrowings under its **$300 million** revolving credit facility and had an available borrowing capacity of approximately **$152.1 million**[103](index=103&type=chunk)[218](index=218&type=chunk) [Quantitative and Qualitative Disclosure About Market Risks](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risks) The company states that its market risk, including foreign exchange and interest rate risks, has not materially changed from the disclosures made in its Annual Report on Form 10-K for the fiscal year ended July 1, 2023 - There have been no material changes to the Company's market risk related to foreign exchange and interest rates since the last Annual Report on Form 10-K[241](index=241&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2023 - Based on an evaluation as of the end of the reporting period, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[242](index=242&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[243](index=243&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various claims and lawsuits that arise in the ordinary course of business, with management not currently believing they will have a material adverse impact - The company is subject to a variety of claims and suits from time to time in the ordinary course of business[246](index=246&type=chunk) - Management believes that resolving current claims will not have a material adverse impact, but acknowledges that these matters have inherent uncertainties[246](index=246&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) The company faces key risks including geopolitical instability, rapid technological change, reliance on limited customers, operational challenges, evolving regulatory compliance, and significant debt management - Geopolitical conditions, including the Russian invasion of Ukraine, conflict between Israel and Hamas, and U.S.-China tensions, could negatively impact business results through supply chain pressure, inflation, and market instability[248](index=248&type=chunk) - The company's profitability is subject to risks from uncertain telecom spending, adverse product mix changes, pricing pressure, and component shortages[252](index=252&type=chunk)[255](index=255&type=chunk) - Reliance on a limited number of customers, including a strategic alliance with SICPA for anti-counterfeiting products, exposes the company to risks of order reductions and increased pricing pressure[262](index=262&type=chunk)[263](index=263&type=chunk) - The business faces significant cybersecurity risks, including phishing, malware, and ransomware, which could lead to business disruption, data loss, and financial penalties[281](index=281&type=chunk)[282](index=282&type=chunk) - The company's significant debt load could affect its ability to obtain financing, require dedication of cash flow to debt service, and limit operational flexibility[293](index=293&type=chunk)[295](index=295&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter ended September 30, 2023, the company repurchased 1.0 million shares of its common stock for approximately $10.0 million under the 2022 Repurchase Plan Stock Repurchase Activity (Q1 FY24) | Period | Total Shares Purchased | Average Price Paid per Share | Total Value (approx.) | Remaining Authorization | | :--- | :--- | :--- | :--- | :--- | | Aug 27 - Sep 30, 2023 | 1.0 million | $9.86 | $10.0 million | $224.8 million | [Other Information](index=62&type=section&id=Item%205.%20Other%20Information) On September 12, 2023, EVP Paul A. McNab entered into a prearranged Rule 10b5-1 trading plan for the potential sale of up to 8,374 shares of common stock - On September 12, 2023, EVP Paul A. McNab entered into a Rule 10b5-1 trading plan to sell up to **8,374 shares** of common stock[309](index=309&type=chunk) [Exhibits](index=63&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act and Inline XBRL data files

Financial Data and Key Metrics Changes - Fiscal Q1 revenue was $247.9 million, slightly below the midpoint of guidance range of $240 million to $260 million, down 6% sequentially and down 20.1% year-over-year [6] - Operating profit margin was 12.4%, slightly below guidance range of 12.7% to 14.2%, up 70 basis points from the prior quarter, and down 930 basis points from the prior year [6] - EPS was $0.09, meeting the low end of guidance range of $0.09 to $0.11, down $0.01 sequentially and down $0.14 year-over-year [6] - Cash flow from operations was $50.3 million, an increase from $26.6 million a year ago [6][10] Business Segment Data and Key Metrics Changes - NSE revenue was $170.4 million, above the low end of guidance range of $167 million to $183 million, down 22.2% year-over-year [7] - NE revenue was $150 million, declining 23.7% year-over-year [7] - SE revenue was $20.4 million, down 8.9% from last year [7] - NSE gross profit margin was 63.6%, increasing 150 basis points sequentially, but decreasing 110 basis points year-over-year [7] - OSP revenue was $77.5 million, slightly above the high end of guidance range of $73 million to $77 million, down 15.1% year-over-year [9] Market Data and Key Metrics Changes - The service provider market experienced weaker spending, impacting NSE revenue [14] - Demand for anti-counterfeiting and 3D sensing products drove OSP revenue, which exceeded expectations [16] - North America faced challenges, while Europe and Asia showed better performance in telecom spending [56] Company Strategy and Development Direction - The long-term growth strategy focuses on 5G and 6G wireless, new service enablement products, and emerging resilient P&T technology [20] - The company aims to manage inventory levels and optimize operations in response to current market conditions [24] Management's Comments on Operating Environment and Future Outlook - The end-market spend environment remains challenging, particularly for service providers in North America [14] - A mixed performance was noted in NSC, with some product areas showing robust demand while others lagged [15] - Expectations for the December quarter include seasonal declines in anti-counterfeiting demand and softer 3D sensing demand [17] - Anticipated recovery in wireless lab products and fiber lab demand is expected in early calendar 2024 [19] Other Important Information - The company repurchased 1 million shares for $10 million during fiscal Q1, with $224.8 million remaining in the stock repurchase program [11] - Guidance for fiscal Q2 2024 includes revenue expectations of $240 million to $260 million and EPS of $0.06 to $0.10 [12] Q&A Session Summary Question: Plans for additional cost reductions in OpEx - Management has already implemented significant cost reductions, totaling about $30 million, and does not plan further reductions at this time [23][25] Question: Service provider order linearity and outlook - Order conversion is taking longer due to lower demand, but no cancellations have been reported, indicating a stabilization in the market [27][28] Question: Recovery in lab business - The lab business is seeing demand from wireless NEMs and high-speed optical transport, with expectations for recovery in storage and wireless sectors [31][33] Question: Outlook for the second half of the year - Management is cautiously optimistic about the second half, expecting some recovery in telecom spending and network upgrades [36][38] Question: Regional trends in telecom spending - North America is struggling, while Europe and Asia are performing better, with Latin America showing resilience [56]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended July 1, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-22874 Viavi Solutions Inc. (Exact name of Registrant as specified in its charter) Delaware 94-2579683 Indicate by check mark if the regis ...

Financial Data and Key Metrics Changes - Fiscal Q4 revenue was $263.6 million, slightly above the guidance range of $242 million to $262 million, up 6.4% sequentially but down 21.4% year-over-year [6] - Operating profit margin was 11.7%, near the high end of the guidance range, increasing by 30 basis points from the prior quarter but decreasing 9.6% from the previous year [6] - EPS was $0.10, above the guidance range of $0.07 to $0.09, up $0.02 sequentially but down $0.14 year-over-year [6] - Full year revenues decreased from $1.3 billion in 2022 to $1.1 billion in 2023, down 14.4% [7] - Full year 2023 EPS was $0.55, a decrease of 42.1% from $0.95 in 2022 [9] Business Segment Data and Key Metrics Changes - NSE segment revenue for Q4 was $197.9 million, exceeding expectations, but down 19.6% year-over-year [12] - OSP segment revenue for Q4 was $65.7 million, slightly above guidance but down 26.3% year-over-year [14] - NSE gross profit margin was 62.1%, down 280 basis points year-over-year [13] - OSP gross profit margin was 46.6%, down 9.3% year-over-year [14] Market Data and Key Metrics Changes - NSE full year revenue was $801.2 million, down 15.6% year-over-year [7] - OSP revenue decreased from $343.3 million in 2022 to $304.9 million in 2023, down 11.2% [7] - Demand for lab and production test equipment from wireless and fiber NEMs and semiconductor companies saw gradual recovery [22] Company Strategy and Development Direction - The company is focusing on capital allocation strategies, including share repurchase programs and acquisitions [10] - Continued investment in new technologies and applications, expanding into higher growth markets [27] - The restructuring program is expected to result in net operating expense savings of $28 million annually [11] Management's Comments on Operating Environment and Future Outlook - Management noted initial signs of stabilization and gradual recovery in the service provider spend [21] - The demand environment for OSP remains challenging, but there is stronger demand for anti-counterfeiting products [24] - Management expects the first fiscal quarter 2024 revenue to be in the range of $240 million to $260 million [19] Other Important Information - The company repurchased 1 million shares for $10 million in Q4 and a total of 7.3 million shares for $83.9 million in fiscal 2023 [18] - The ending balance of cash and short-term investments was $525.6 million, down $39.3 million compared to the prior year [16] Q&A Session Summary Question: Visibility on service providers' spending - Management indicated there are signs of life and multiple discussions with service providers, with expectations of increased spending on network maintenance and optimization [29][30] Question: Catalysts for service provider upgrades - Management acknowledged that while there is plenty of existing equipment, ongoing operational needs will drive demand for upgrades [34][35] Question: Reconciliation of stabilization and Q1 guidance - Management explained that traditional seasonality is returning, with expectations of lower demand in the September and March quarters [38][40] Question: Trends in high-speed connectivity - Management noted interest in 800-gig connectivity, particularly among fiber operators, but current demand is primarily for 400-gig [44] Question: Improvement in customer conversations - Management reported broad-based improvement in conversations across various customer segments, particularly with cable and Tier 2 telecom providers [78]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 1, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-22874 Viavi Solutions Inc. (Exact name of Registrant as specified in its charter) (State or other jurisdiction of incorporation o ...

Viavi Solutions Inc. (NASDAQ:VIAV) Q3 2023 Results Conference Call May 2, 2023 4:30 PM ET Company Participants Sagar Hebbar - Head of Investor Relations Henk Derksen - Chief Financial Officer Oleg Khaykin - President & Chief Executive Officer Conference Call Participants Michael Genovese - Rosenblatt Securities Tim Savageaux - Northland Securities Meta Marshall - Morgan Stanley & Co. LLC Operator Hello. My name is John Louis. Welcome to the Viavi Solutions 3Q 2023 Earnings Conference Call. All lines have be ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-22874 Viavi Solutions Inc. (Exact name of Registrant as specified in its charter) (State or other jurisdiction of incorporati ...

Viavi Solutions Inc. (NASDAQ:VIAV) Q2 2023 Earnings Conference Call February 2, 2023 4:30 PM ET Company Participants Sagar Hebbar - Head of Investor Relations Henk Derksen - Chief Financial Officer Oleg Khaykin - President & Chief Executive Officer Conference Call Participants Mehdi Hosseini - Susquehanna Alex Henderson - Needham Michael Genovese - Rosenblatt Securities. Karan Juvekar - Morgan Stanley Ruben Roy - Stifel Operator Hello, and thank you for standing by. My name is Regina, and I will be your co ...

| --- | --- | --- | --- | |------------------------------------------------------|-------|-------|-------| | | | | | | | | | | | | | | | | Fiscal 2Q 2023 Earnings Call Supplementary Slides | | | | | February 2, 2023 | | | | Cautionary Language Concerning Forward-Looking Statements This presentation contains forward-looking statements under Section 27A of the Securities Act of 1934. Forward-looking statements are all statements we make other than those dealing specifically with historical matters. These forw ...