Core Insights - VIAVI Solutions Inc. has been selected by Netomnia to provide its ONMSi Remote Fiber Test System to enhance network installation and maintenance as Netomnia expands in the UK [1][4][5] Company Overview - VIAVI Solutions is a global provider of network test, monitoring, and assurance solutions across various sectors including telecommunications and aerospace [6] - Netomnia is the UK's second-largest alternative network operator, with a serviceable reach of 2.5 million premises and a goal to expand to five million by the end of 2027, supported by over £1.5 billion in funding [3][7] Business Growth and Strategy - Netomnia aims to connect 3 million premises by the end of 2025 and five million by 2027, with an annual build rate of one million premises [3] - The ONMSi system will facilitate end-to-end certification testing and ongoing network health monitoring, which are critical for achieving Netomnia's ambitious rollout plans [4][5] Partnership Significance - The collaboration between VIAVI and Netomnia is positioned as a strategic partnership that will leverage VIAVI's technology to support Netomnia's growth and network quality objectives [5]

Core Insights - Viavi Solutions Inc. is being monitored for its potential to leverage its optical testing capabilities and military positioning for sustainable growth [1] Company Analysis - The company has shown signs of progress in translating its strengths into durable growth during the past quarter [1] - Viavi Solutions operates in sectors that include technology, infrastructure, and internet services, focusing on strong fundamentals and growth potential [1] Analyst Background - The analysis is conducted by a financial analyst with a background in petroleum and gas engineering, emphasizing a long-term investment perspective [1]

Core Insights - VIAVI Solutions Inc. has entered into a Memorandum of Understanding with Hanyang University to collaborate on AI-RAN, 5G, and 6G research at the university's Beyond-G Global Innovation Center [1][2] - The partnership aims to advance next-generation communication technologies and foster talent in this field [5][6] Collaboration Details - VIAVI will provide wireless lab test solutions and expertise, while Hanyang University will become a VIAVI 6G Forward academic partner [1][4] - The Beyond-G Global Innovation Center was selected for the Global Innovation Research Center Support Project, receiving over KRW 5 billion annually for 10 years to support top research initiatives [3] Technological Contributions - VIAVI will contribute its NITRO® Wireless test and optimization suite, which includes a 6G testbed used by leading network equipment manufacturers and research institutions [4] - The technology will enable validation of AI-RAN, 5G, 6G, and quantum technologies, facilitating the planning and implementation of network changes [4][6] Educational Impact - The partnership will provide students with hands-on experience in cutting-edge test environments, laying the foundation for impactful research in 6G and AI-RAN [5]

Core Insights - The 2025/2026 State of the Network study indicates that 79% of enterprise organizations are expected to increase their reliance on packet capture to enhance mean times to detection (MTTD) and resolution (MTTR) this year [1][8]. Group 1: Study Findings - The study, conducted with insights from 750 global professionals, reveals a shift towards deeper network observability and increased reliance on packet capture due to hybrid infrastructure and cloud complexity [2][9]. - Organizations with strong packet capture capabilities reported double the improvement in MTTD compared to those without, and were four times more likely to resolve issues in under an hour [3][9]. - The research highlights a 125% increase in collaborative monitoring models driven by the shift towards multi-cloud environments [9]. Group 2: Industry Trends - 42% of organizations implementing NetSecOps models reported enhanced security benefits, indicating a growing trend towards operational alignment between network and security operations [9]. - Despite challenges, 92% of organizations reported having sufficient budgets for their needs, although 78% acknowledged the necessity for more support to address rising network security threats [9]. - Investment in IT solutions is set to increase across all examined categories, reflecting a positive outlook for organizations aiming to improve uptime and operational efficiency [6].

Core Insights - Viavi Solutions Inc. has launched a Visual-Aided Inertial Navigation System (VINS) to enhance the navigation capabilities of aircraft and UAVs in the absence of GPS/GNSS signals, addressing the increasing incidents of GPS jamming and spoofing [1][10] Group 1: VINS Technology and Features - VINS utilizes Maxar Raptor 3D vision-based positioning software, allowing UAVs to perform long-range missions under challenging GNSS conditions, achieving horizontal positioning accuracy within 35 meters and vertical accuracy within 5 meters in GNSS-denied environments [3] - When GNSS is active, VINS significantly improves accuracy, offering horizontal positioning within 1 meter and heading accuracy of 0.1 degrees [3] - The system is designed for low-altitude operations and integrates various components, including processing and sensor modules, GNSS or CRPA antennas, and optional features like data transmission radios and M-code GNSS receivers [4][10] Group 2: Market Context and Demand - The U.S. Department of Transportation reports up to 700 GPS jamming incidents globally each day, with conflict zones like Lithuanian airspace experiencing over 800 cases in the last quarter of 2024, impacting communication networks and emergency services [2] - Viavi's recent third-quarter fiscal 2025 results exceeded expectations, driven by strong demand from service providers and network equipment manufacturers, particularly in the wireless and fiber markets [7] Group 3: Future Outlook - For the fourth quarter of fiscal 2025, Viavi anticipates revenues between $278 million and $290 million, with non-GAAP earnings per share projected between 10 cents and 13 cents, although macroeconomic challenges may pose risks [8] - The VINS will be showcased at the 2025 Joint Navigation Conference, highlighting its relevance in military operations and degraded environments [5]

Core Insights - Viavi Solutions, Inc. is collaborating with 3-GIS to enhance fiber fault detection capabilities for enterprises, addressing the operational challenges of maintaining fiber infrastructure as it becomes critical for data communications [1][4] - The integration of Viavi's ONMSi Remote Fiber Test System with 3-GIS' geospatial capabilities aims to automate network issue detection and resolution, improving service quality and minimizing downtime [2][3] Industry Context - The demand for high-quality fiber connections is increasing as service providers face pressure to deliver consistent services for AI workloads and high-performance computing, making intelligent automated systems essential in the telecommunications industry [4] - Viavi's strategy includes expanding its product portfolio across various markets, which is expected to yield long-term benefits, particularly with the acquisition of Spirent Communications' high-speed ethernet and network security business [5] Company Performance - Viavi's stock has increased by 21.8% over the past year, although this is below the industry's growth of 35.4% [6]

Core Insights - VIAVI Solutions Inc. has launched its second-generation RSR Transcoder, designed to enhance operational capabilities in GPS/GNSS-denied environments [1][2] - The RSR Transcoder provides assured Position, Navigation, and Timing (PNT) outputs, facilitating upgrades to legacy systems [2][4] - The product addresses the increasing threat of GPS and GNSS jamming and spoofing, which are becoming common in electronic warfare [3][6] Product Features - The RSR Transcoder includes a GPS full constellation simulator and utilizes a patented algorithm for rapid conversion of assured inputs to Universal GPS signals [4] - It is ruggedized with IP68 enclosures suitable for various platforms and operates in a covert mode [5] - The device outputs at 100 Hz and offers multiple holdover oscillator options [5] Industry Context - The reliance on PNT technologies in modern military systems is growing, with adversaries increasingly capable of disrupting these systems [6] - The RSR Transcoder is positioned as a cost-effective solution for upgrading legacy systems to withstand such disruptions [6] Event Participation - The RSR Transcoder will be showcased at the 2025 Joint Navigation Conference, highlighting its capabilities in D3SOE navigation [6] - VIAVI will also present on various topics related to navigation and anti-jamming technologies during the conference [8]

Core Insights - Metanoia Communications Inc.'s JURA Open Radio Unit (O-RU) has successfully completed end-to-end over-the-air (OTA) validation at VIAVI's VALOR lab, marking the first product validated in the lab's new RF-shielded anechoic chamber [1][2][3] Group 1: Validation and Testing - The VALOR lab, funded by the National Telecommunications and Information Administration (NTIA) Public Wireless Supply Chain Innovation Fund, officially opened on October 7, 2024, and has since added an RF chamber and two additional customer labs [2] - The JURA O-RU underwent performance validation to ensure seamless integration into Open RAN networks, with tests conducted over the air in the RF chamber, evaluating key performance metrics under realistic radio conditions [3][4] - The validation process included O-RAN end-to-end functional and performance tests based on defined test cases, ensuring compliance with O-RAN architectural and performance requirements [3][4] Group 2: Technological Advancements - Metanoia's JURA O-RU is a 4T4R 24dbm 5G FR1 radio unit that operates in the sub-6 GHz bands using TDD duplexing, leveraging an advanced Software Defined Radio (SDR) platform for high-performance Open RAN solutions [4] - The VALOR RF chamber is the industry's first Test-as-a-Service offering for Massive MIMO and beamforming OTA validation, creating a controlled environment free from outside interference [5] - VALOR provides independent interoperability, performance, and security testing, utilizing VIAVI's NITRO Wireless Open RAN Test Suite and offering over 500 test cases compliant with O-RAN and 3GPP specifications [6] Group 3: Industry Impact - The successful validation of Metanoia's O-RU is seen as a significant milestone for both VIAVI and the VALOR lab, contributing to increased telecom innovation through Open RAN-based systems [4] - Metanoia Communications is recognized as a leading System-on-Chip (SoC) innovator, transforming the 5G NR ecosystem with its advanced 5G SoC featuring a future-proof SDR architecture [9]

Core Insights - VIAVI Solutions Inc. is participating in the MORANE-2 project to test Future Railway Mobile Communication System (FRMCS) specifications, which is crucial for modernizing railway communication in Europe [1][3] - The current GSM-R system is set to phase out by 2030, with FRMCS emerging as its successor, supported by VIAVI's EVOIA Drive Test and EVOIA Assure solutions [2][3] - The MORANE-2 project will run for 34 months from 2024 to 2027 and aims to validate product development standards, enhancing interoperability in railway systems across Europe [3] Company Contributions - VIAVI is recognized for its expertise in mission-critical network testing and measurement, contributing to the MORANE-2 project by designing technical metrics and defining KPIs [3] - The company has showcased its test and monitoring solutions at significant industry events, including the UIC FRMCS Global Conference and InnoTrans [4] - VIAVI is actively involved in industry initiatives, hosting events like the Railway User Group and participating in the Public Safety Innovation Summit [5] Industry Context - The MORANE-2 project is a collaborative European initiative funded by Europe's Rail (EU-RAIL) and aims to enhance efficiency, sustainability, and digital connectivity in railway telecommunications [3] - The project will facilitate the inclusion of FRMCS specifications in the Technical Specifications for Interoperability (TSI), which are essential for ensuring the interoperability of railway systems [3]

PART I - FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited consolidated financial statements for the three and nine months ended March 29, 2025 Consolidated Statements of Operations Highlights (in millions, except per share data) | Metric | Three Months Ended March 29, 2025 | Three Months Ended March 30, 2024 | Nine Months Ended March 29, 2025 | Nine Months Ended March 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total net revenue** | $284.8 | $246.0 | $793.8 | $748.4 | | **Gross profit** | $160.7 | $137.9 | $457.6 | $430.3 | | **Income (loss) from operations** | $8.5 | $(11.9) | $42.2 | $26.5 | | **Net income (loss)** | $19.5 | $(24.6) | $26.8 | $(4.1) | | **Diluted EPS** | $0.09 | $(0.11) | $0.12 | $(0.02) | Consolidated Balance Sheets Highlights (in millions) | Metric | March 29, 2025 | June 29, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $374.2 | $471.3 | | **Total current assets** | $835.4 | $876.5 | | **Goodwill, net** | $585.4 | $452.9 | | **Total assets** | $1,933.2 | $1,736.3 | | **Total current liabilities** | $544.7 | $247.1 | | **Long-term debt** | $396.1 | $636.0 | | **Total liabilities** | $1,204.4 | $1,054.7 | | **Total stockholders' equity** | $728.8 | $681.6 | Consolidated Statements of Cash Flows Highlights (in millions) | Metric | Nine Months Ended March 29, 2025 | Nine Months Ended March 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $66.0 | $90.2 | | **Net cash used in investing activities** | $(140.7) | $(27.2) | | **Net cash used in financing activities** | $(23.5) | $(115.3) | | **Net increase in cash, cash equivalents and restricted cash** | $(99.1) | $(52.5) | [Note 5. Acquisitions](index=14&type=section&id=Note%205.%20Acquisitions) Details the recent acquisition of Inertial Labs and a planned acquisition of Spirent's business lines - On January 28, 2025, the Company acquired Inertial Labs, LLC for approximately **$134.4 million in cash** at closing, with up to an additional **$175.0 million in contingent consideration** based on revenue targets over four years[52](index=52&type=chunk)[53](index=53&type=chunk) - The Inertial Labs acquisition resulted in the recognition of **$129.7 million in goodwill** and **$117.6 million in identifiable intangible assets**[55](index=55&type=chunk)[57](index=57&type=chunk) - On March 2, 2025, the Company entered into an agreement to acquire Spirent Communications plc's high-speed ethernet and network security businesses for **$410 million in base consideration**, expected to close by July 31, 2025[64](index=64&type=chunk) [Note 11. Debt](index=24&type=section&id=Note%2011.%20Debt) Outlines the company's debt structure, including senior notes and a revolving credit facility Debt Summary (in millions) | Debt Instrument | Principal Amount (March 29, 2025) | Classification | | :--- | :--- | :--- | | 1.625% Senior Convertible Notes (due 2026) | $250.0 | Short-term debt | | 3.75% Senior Notes (due 2029) | $400.0 | Long-term debt | - The company has a senior secured asset-based revolving credit facility of up to **$300 million**; as of March 29, 2025, there were no borrowings under this facility, and the available borrowing capacity was approximately **$165.6 million**[123](index=123&type=chunk)[126](index=126&type=chunk) [Note 13. Restructuring](index=28&type=section&id=Note%2013.%20Restructuring) Details ongoing restructuring plans to reduce costs, including workforce reductions and expected savings - The Fiscal 2024 Plan is expected to affect **7% of the global workforce** and result in annualized gross cost savings of approximately **$25.0 million**[134](index=134&type=chunk)[223](index=223&type=chunk) - The Fiscal 2023 Plan was completed in the first quarter of fiscal 2025, having impacted approximately **5% of the workforce**[135](index=135&type=chunk)[224](index=224&type=chunk) - As of March 29, 2025, the total restructuring accrual was **$4.5 million**[225](index=225&type=chunk) [Note 19. Operating Segments and Geographic Information](index=32&type=section&id=Note%2019.%20Operating%20Segments%20and%20Geographic%20Information) Provides a breakdown of company performance by operating segment and geographic region Net Revenue by Segment (in millions) | Segment | Three Months Ended March 29, 2025 | Nine Months Ended March 29, 2025 | | :--- | :--- | :--- | | Network Enablement (NE) | $188.0 | $508.6 | | Service Enablement (SE) | $20.2 | $58.9 | | Optical Security and Performance Products (OSP) | $76.6 | $226.3 | | **Total** | **$284.8** | **$793.8** | Net Revenue by Geographic Region (in millions) | Region | Three Months Ended March 29, 2025 | Nine Months Ended March 29, 2025 | | :--- | :--- | :--- | | Americas | $108.1 | $312.9 | | Asia-Pacific | $100.7 | $280.2 | | EMEA | $76.0 | $200.7 | | **Total** | **$284.8** | **$793.8** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes Q3 FY2025 financial results, highlighting revenue growth driven by the NSE business recovery Q3 FY2025 Financial Highlights (YoY) | Metric | Q3 FY2025 | Change (YoY) | | :--- | :--- | :--- | | Net revenue | $284.8 million | +15.8% | | GAAP operating margin | 3.0% | +780 bps | | Non-GAAP operating margin | 16.7% | +740 bps | | GAAP diluted EPS | $0.09 | +$0.20 | | Non-GAAP diluted EPS | $0.15 | +$0.09 | - Revenue increase for Q3 was driven by higher spending from **Network Equipment Manufacturers (NEMs)**, and aerospace and defense customers[203](index=203&type=chunk) - The Network Enablement (NE) segment revenue **grew 23.9% YoY** in Q3, driven by higher volume in Lab and Production, Aerospace and Defense, and Fiber and Access Solutions[238](index=238&type=chunk) - The Optical Security and Performance Products (OSP) segment revenue **increased 0.5% YoY** in Q3, driven by Anti-Counterfeiting, offset by a decrease in 3D sensing revenue[244](index=244&type=chunk) - Cash provided by operating activities was **$66.0 million** for the nine months ended March 29, 2025, a decrease from $90.2 million in the prior year period[255](index=255&type=chunk) [Quantitative and Qualitative Disclosure About Market Risks](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risks) States no material changes to market risks since the last Annual Report on Form 10-K - The Company's market risk has **not changed materially** from the foreign exchange and interest rate risks disclosed in its most recent Annual Report on Form 10-K[270](index=270&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures with no material changes in internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective as of March 29, 2025**[271](index=271&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, the company's internal controls[272](index=272&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) Discloses that current legal proceedings are not expected to have a material adverse impact - The company is subject to a variety of claims and suits that arise from time to time in the ordinary course of its business, but management does not currently believe they will have a **material adverse impact**[274](index=274&type=chunk) [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) Outlines significant risks including geopolitical tensions, technology changes, and cybersecurity threats - **Geopolitical conditions**, including the Russian invasion of Ukraine, conflict in the Middle East, and US-China tensions, could negatively impact business results through sanctions, tariffs, and market instability[276](index=276&type=chunk) - The company faces risks from **rapid technological change**, pricing pressure from competitors (especially from Asia), and a **highly concentrated customer base**, which can impact profitability[278](index=278&type=chunk)[280](index=280&type=chunk) - The company relies on a **strategic alliance with SICPA** for its banknote anti-counterfeiting products; a material reduction in sales or loss of this relationship could harm the business[290](index=290&type=chunk) - The business is exposed to **cybersecurity risks**, including sophisticated attacks that could lead to operational impairment, intellectual property theft, and reputational harm[310](index=310&type=chunk) - **Evolving ESG regulations** and expectations could lead to increased costs, and failure to meet goals could result in reputational damage and adverse financial performance[320](index=320&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no share repurchases in the quarter and the remaining authorization under the repurchase plan - **No shares were repurchased** during the three months ended March 29, 2025[339](index=339&type=chunk) - As of March 29, 2025, the company had a remaining authorization of **$198.4 million** for future share repurchases under its 2022 Repurchase Plan[142](index=142&type=chunk)[339](index=339&type=chunk) [Defaults Upon Senior Securities](index=70&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Reports no defaults upon senior securities during the period - None[340](index=340&type=chunk) [Mine Safety Disclosures](index=70&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that mine safety disclosures are not applicable to the company's operations - None[340](index=340&type=chunk) [Other Information](index=70&type=section&id=Item%205.%20Other%20Information) Discloses the establishment of a Rule 10b5-1 trading plan by the Chairman of the Board - On February 4, 2025, Richard E Belluzzo, Chairman of the Board, entered into a **Rule 10b5-1 trading plan** for the sale of **50,312 shares** of common stock, effective until October 31, 2025[341](index=341&type=chunk) [Exhibits](index=71&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including certifications and agreements - Exhibits filed include CEO/CFO certifications (31.1, 31.2, 32.1, 32.2), an Asset Purchase Agreement dated March 2, 2025 (10.1), and various Inline XBRL files[343](index=343&type=chunk)