Core Insights - Viavi Solutions reported strong fiscal second-quarter 2026 results, with net revenue of $369.3 million, which is at the high end of the company's guidance range, reflecting a 23.5% sequential increase and a 36.4% year-over-year growth [3][6] - The company experienced significant growth in its Network Service Enablement (NSE) segment, with revenue reaching $291.5 million, up 45.8% year-over-year, driven by acquisitions and strong demand in the data center ecosystem [5][6] - Viavi's non-GAAP operating margin improved to 19.3%, exceeding guidance and reflecting a 360 basis point increase from the prior quarter [2][6] Financial Performance - Revenue from Spirent was $43 million, slightly below expectations of $45 million to $55 million due to timing issues [1] - Non-GAAP earnings per share were $0.22, surpassing guidance of $0.18 to $0.20, and increased by $0.07 sequentially [2][6] - NSE gross margin was 64.7%, while operating margin improved to 15.6%, up from 8.7% in the same quarter last year [6] Balance Sheet and Cost Management - The company ended the quarter with $772.1 million in cash and short-term investments, an increase from $549.1 million in the previous quarter [9] - Viavi executed a restructuring plan impacting approximately 5% of its workforce, with expected annual savings of about $30 million [12] - The company exchanged about $100 million of convertible notes for shares and prepaid $100 million of its Term Loan B [10][11] Market Demand and Outlook - Demand from the data center ecosystem continues to drive growth, with management noting longer visibility in data center-related demand [13][14] - The company expects fiscal third-quarter 2026 revenue to be between $386 million and $400 million, with NSE revenue projected at $304 million to $316 million [15] - Viavi anticipates paying a $75 million earnout related to Inertial Labs in the third quarter due to strong performance [16]

分组1 - Viav Solutions reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.19 per share, and showing an increase from $0.13 per share a year ago, resulting in an earnings surprise of +15.79% [1] - The company achieved revenues of $369.3 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 0.81%, and up from $270.8 million in the same quarter last year [2] - Viav Solutions has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] 分组2 - The stock has gained approximately 16.2% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.17 on revenues of $356.95 million, and for the current fiscal year, it is $0.68 on revenues of $1.39 billion [7] - The Communication - Components industry, to which Viav Solutions belongs, is currently ranked in the top 16% of over 250 Zacks industries, indicating a favorable outlook for the sector [8]

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Financial Data and Key Metrics Changes - Net revenue for Q2 was $369.3 million, at the high end of guidance ($360-$370 million), up 23.5% sequentially and 36.4% year-over-year [4] - Operating margin for Q2 was 19.3%, above guidance (17.3%-18.5%), increasing 360 basis points quarter-over-quarter and 440 basis points year-over-year [4] - EPS was $0.22, above guidance ($0.18-$0.20), up $0.07 sequentially and $0.09 year-over-year [5] Business Segment Data and Key Metrics Changes - NSE revenue for Q2 was $291.5 million, at the high end of guidance ($283 million-$293 million), up 45.8% year-over-year due to acquisitions [6] - OSP revenue for Q2 was $77.8 million, slightly above guidance ($77 million), up 9.7% year-over-year, driven by anti-counterfeiting products [7][8] - NSE gross margin was 64.7%, down 10 basis points year-over-year, while operating margin was 15.6%, up from 8.7% year-over-year [7] Market Data and Key Metrics Changes - Strong demand in the data center ecosystem and aerospace and defense sectors contributed to NSE revenue growth [14] - The service provider business remained stable, with some opportunistic demand from cable operators transitioning to new architectures [15] Company Strategy and Development Direction - The company is focusing on operational efficiencies through a restructuring plan, impacting approximately 5% of the workforce, with expected annual savings of about $30 million [10][11] - The strategy includes reinvesting savings into higher growth areas, particularly in data center and aerospace and defense applications [11][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong demand from the data center ecosystem and aerospace and defense customers, expecting revenue momentum to persist through 2026 [14][15] - The company anticipates Q3 revenue to be in the range of $386-$400 million, with NSE revenue expected between $304 and $316 million [12] Other Important Information - Total cash and short-term investments at the end of Q2 were $772.1 million, up from $549.1 million in Q1 [8] - The company plans to pay an earnout liability of about $75 million for Inertial Labs due to strong performance [13] Q&A Session Summary Question: Update on NSE business mix - Management indicated a shift towards 45% data center, 40% service provider, and 15% aerospace and defense, with data center growth driving the change [21][22] Question: Visibility on demand and order book - Management confirmed improved visibility on demand, with multi-quarter commitments from major customers [26][27] Question: Impact of restructuring on specific product areas - Restructuring is across multiple functions to enhance efficiency, not targeting specific areas [29][30] Question: Exciting defense and aerospace programs - Key drivers include resilient PNT systems for drones and autonomous systems, with emerging opportunities in data centers for precise timing [35][36] Question: Breakdown of data center business across lab, production, and field - Management does not provide specific breakdowns but noted that lab instruments are driven by R&D CapEx, while production is linked to volume demand [53][55]

Financial Data and Key Metrics Changes - Net revenue for Q2 was $369.3 million, at the high end of guidance, up 23.5% sequentially and 36.4% year-over-year [4] - Operating margin for Q2 was 19.3%, above guidance, increasing 360 basis points quarter-over-quarter and 440 basis points year-over-year [4] - EPS was $0.22, above guidance, up $0.07 sequentially and $0.09 year-over-year [5] Business Segment Data and Key Metrics Changes - NSE revenue for Q2 was $291.5 million, at the high end of guidance, up 45.8% year-over-year due to acquisitions [6] - OSP revenue for Q2 was $77.8 million, slightly above guidance, up 9.7% year-over-year, driven by anti-counterfeiting products [7][8] - NSE gross margin was 64.7%, down 10 basis points year-over-year, while operating margin was 15.6%, up from 8.7% last year [7] Market Data and Key Metrics Changes - Strong demand in the data center ecosystem and aerospace and defense sectors contributed to revenue growth [14] - The service provider business remained stable, with some opportunistic demand from cable operators transitioning to new standards [15] Company Strategy and Development Direction - The company is focusing on operational efficiencies through a restructuring plan, impacting approximately 5% of the workforce, with expected annual savings of about $30 million [10][11] - The strategy includes reinvesting savings into higher growth areas, particularly in data center and aerospace and defense applications [11][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth driven by strong demand in the data center ecosystem and aerospace and defense sectors [14][15] - The company anticipates revenue for Q3 to be in the range of $386-$400 million, with NSE revenue expected to be between $304 and $316 million [12][13] Other Important Information - Total cash and short-term investments at the end of Q2 were $772.1 million, up from $549.1 million in Q1 [8] - The company plans to pay an earnout liability of about $75 million for Inertial Labs due to strong performance [13] Q&A Session Summary Question: Update on NSE business mix across data center, aerospace and defense, and telco - Management indicated a shift towards 45% data center, 40% service provider, and 15% aerospace and defense, with service provider showing slight recovery [21][22] Question: Visibility on demand and order book - Management confirmed improved visibility on demand, with multi-quarter commitments from hyperscalers [26][27] Question: Impact of restructuring on specific product areas - Restructuring is across multiple functions to enhance efficiency, not targeting specific areas [29][30] Question: Exciting defense and aerospace programs - Key drivers include resilient PNT systems for drones and autonomous systems, with strong growth expected [35][36] Question: Cadence of optical innovation in data centers - Demand is strong across all segments, with significant engagement from semiconductor vendors and module manufacturers [41][42] Question: Seasonal trends in service provider business - Management expects a tailwind in Q4 due to continued strength in data center and aerospace and defense sectors [88]

Financial Data and Key Metrics Changes - Net revenue for Q2 2026 was $369.3 million, up 23.5% sequentially and 36.4% year-over-year, exceeding guidance of $360-$370 million [4] - Operating margin for Q2 was 19.3%, above the guidance range of 17.3%-18.5%, and increased by 360 basis points quarter-over-quarter and 440 basis points year-over-year [4] - EPS was $0.22, above the guidance range of $0.18-$0.20, and increased by $0.07 sequentially and $0.09 year-over-year [5] Business Segment Data and Key Metrics Changes - NSE revenue for Q2 was $291.5 million, up 45.8% year-over-year, driven by acquisitions and strong demand in the data center ecosystem [5][6] - OSP revenue for Q2 was $77.8 million, up 9.7% year-over-year, primarily due to strength in anti-counterfeiting products [6][7] - NSE gross margin was 64.7%, slightly down year-over-year, while OSP gross margin was 50.8%, up 20 basis points year-over-year [6][7] Market Data and Key Metrics Changes - Strong demand was noted in the data center ecosystem, particularly for lab and production products, driven by AI data center build-outs [15] - Aerospace and defense business saw significant growth, with continued high demand for positioning, navigation, and timing products [15][16] - Service provider business remained stable, with some opportunistic demand from cable operators transitioning to new architectures [16] Company Strategy and Development Direction - The company approved a restructuring plan affecting approximately 5% of the global workforce, expecting to incur about $32 million in charges but aiming for annual savings of $30 million [10][11] - The focus will be on reinvesting savings into higher growth areas, particularly in data center and aerospace and defense sectors [11][30] - The company anticipates continued revenue momentum in the data center ecosystem through 2026, supported by robust bookings [15][17] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing strength of the data center ecosystem and aerospace and defense markets, expecting these trends to continue [15][17] - The company noted improved visibility on demand, with multi-quarter commitments from major customers [26] - Management highlighted the importance of operational efficiency and resource allocation to support growth in strategic areas [30] Other Important Information - Total cash and short-term investments at the end of Q2 were $772.1 million, up from $549.1 million in Q1 [8] - The company did not repurchase any shares during the quarter, prioritizing debt management [10] - The fully diluted share count increased to 233.4 million shares from 224.8 million shares year-over-year [10] Q&A Session Summary Question: Update on NSE business mix across data center, aerospace and defense, and telco - Management indicated a shift towards 45% data center, 40% service provider, and 15% aerospace and defense, reflecting strong growth in data center demand [21][22] Question: Visibility on demand and order backlog - Management confirmed improved visibility on demand, with commitments extending up to three quarters ahead [26] Question: Impact of restructuring on specific product areas - The restructuring is aimed at improving efficiency across multiple functions, not targeting specific areas [29] Question: Exciting defense and aerospace programs - Management highlighted resilient PNT (position, navigation, timing) as a key driver, particularly for drones and autonomous systems [36] Question: Growth in optical domain and data center demand - Management noted strong growth across all segments, particularly driven by advancements in optical technology and increased demand for fiber monitoring [41][45] Question: Breakdown of data center business across lab, production, and field - Management stated that while they do not break down these categories, production is expected to be a significant growth driver linked to volume demands [56][58]

Fiscal Q2 2026 Earnings Call Supplementary Slides January 28, 2026 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 forward-looking statements include, among other things, financial guidance and our expectations regarding the acquired business. Please refer to the Company's fi ...

Financial Performance - Net revenue for Q2 FY 2026 was $369.3 million, an increase of $98.5 million or 36.4% year-over-year[5] - GAAP operating margin was 3.1%, down 510 basis points year-over-year, while non-GAAP operating margin improved to 19.3%, up 440 basis points year-over-year[5] - GAAP net loss was $48.1 million, a decrease of $57.2 million or 628.6% year-over-year, whereas non-GAAP net income was $51.5 million, an increase of $22.1 million or 75.2% year-over-year[5] - The company expects Q3 FY 2026 net revenue to be between $386 million and $400 million, with non-GAAP EPS projected between $0.22 and $0.24[9] - Operating income for the three months ended December 27, 2025, was $11.4 million, down from $22.2 million in the same period in 2024[19] - Net loss for the three months ended December 27, 2025, was $(48.1) million, compared to net income of $9.1 million for the same period in 2024[19] - Adjusted EBITDA for the three months ended December 27, 2025, was $81.4 million, compared to $50.1 million for the same period in 2024[38] - Non-GAAP measures for net income for the three months ended December 27, 2025, were $51.5 million, resulting in a diluted EPS of $0.22[39] Cash Flow and Assets - Cash flows from operations for the quarter ended December 27, 2025, were $42.5 million[14] - As of December 27, 2025, total cash, short-term investments, and short-term restricted cash amounted to $772.1 million[14] - Total current assets increased to $1,278.6 million as of December 27, 2025, from $885.2 million as of June 28, 2025[22] - Cash and cash equivalents increased to $765.5 million as of December 27, 2025, from $423.6 million as of June 28, 2025[22] Liabilities and Expenses - Total liabilities rose to $1,943.5 million as of December 27, 2025, compared to $1,213.6 million as of June 28, 2025[22] - Research and development expenses for the three months ended December 27, 2025, were $65.9 million, up from $52.1 million in the same period in 2024[19] - Stock-based compensation for the three months ended December 27, 2025, was $13.9 million, contributing 3.7% to the operating income margin[34] - Total related to cost of revenues and operating expenses for the three months ended December 27, 2025, was $60.0 million, representing 16.2% of total revenue[34] Gross Margin and Profitability - The company reported a gross margin of 57.0% for Q2 FY 2026, a slight increase of 50 basis points from Q1 FY 2026 but a decrease of 240 basis points year-over-year[4] - Gross profit for the three months ended December 27, 2025, was $210.6 million, compared to $160.8 million for the same period in 2024, reflecting a gross margin of 57.0%[19] - GAAP gross profit for the three months ended December 27, 2025, was $210.6 million, with a gross margin of 57.0%, compared to $160.8 million and 59.4% for the same period in 2024[34] - Non-GAAP gross profit for the six months ended December 27, 2025, was $407.7 million, with a gross margin of 61.0%, up from $306.1 million and 60.1% in the prior year[34] Restructuring and Cost Savings - The restructuring plan approved on January 23, 2026, is expected to affect approximately 5% of the global workforce and incur total charges of about $32 million[6][7] - The company anticipates annualized cost savings of approximately $30 million upon completion of the restructuring plan[7] Segment Performance - Revenue from the Network and Service Enablement segment was $291.5 million, representing a 35.0% increase quarter-over-quarter and a 45.8% increase year-over-year[4] - The company reported a gross margin of 64.7% for the Network and Service Enablement segment for the three months ended December 27, 2025[25] Other Charges - The company experienced a charge of $2.1 million for restoration services for a facility impacted by a fire during the three and six months ended December 27, 2025[41] - The company incurred losses of $38.7 million and $42.5 million for the three and six months ended December 27, 2025, respectively, related to the extinguishment of certain 1.625% Senior Convertible Notes[40] - The company reported a total of $99.6 million in adjustments related to net income and EPS for the three months ended December 27, 2025[39]

Core Viewpoint - Viavi Solutions Inc. will announce its fiscal second quarter 2026 financial results on January 28, 2026, after market close [1]. Group 1: Financial Results Announcement - The financial results will cover the period ended December 27, 2025 [1]. - An earnings call will be hosted at 1:30 p.m. PT / 4:30 p.m. ET on the same day [2]. - A live webcast of the earnings call and its replay will be available on the VIAVI website [2]. Group 2: Participation Details - Telephone participation can be done via a toll-free dial-in number: 1 (800) 715-9871 or a toll dial-in number: 1 (646) 307-1963 [3]. - The conference ID for the call is 3072689 [3]. - A replay of the call will be available from January 28, 2026, 4:30 p.m. PT to February 11, 2026, 8:59 p.m. PT [3]. Group 3: Company Overview - VIAVI Solutions is a global provider of network test, monitoring, and assurance solutions for various sectors including telecommunications, cloud, and military [4]. - The company is also a leader in light management technologies for applications in 3D sensing, anti-counterfeiting, and consumer electronics [4]. - More information about VIAVI can be found on their official website [4].

Core Insights - VIAVI Solutions Inc. has announced enhancements to its XEdge cloud-based edge monitoring and assurance platform, focusing on improved data collection capabilities for private 4G, 5G, and Wi-Fi networks at the edge [1][2]. Group 1: Product Enhancements - The enhanced XEdge portfolio now supports multiple sensor types, allowing customers to scale deployments based on monitoring needs, site density, and operational constraints [2]. - XEdge v2 is a portable, multi-carrier unit designed for comprehensive monitoring, supporting up to four cellular modems for high-capacity data collection [5]. - XEdge Lite is a compact sensor for fixed installation, supporting a single cellular modem for targeted, always-on monitoring across private networks, available in standard and ruggedized forms [5]. Group 2: Operational Features - XEdge provides continuous visibility into device connectivity and network performance through unattended edge sensors, centralized cloud dashboards, and automated analytics [2]. - The platform is designed for minimal daily management and does not require specialized network expertise, supporting remote control and automated 24/7 monitoring [3]. - Customizable reporting and multi-site scalability make XEdge suitable for enterprises, system integrators, and private network operators [3]. Group 3: Market Positioning - The enhancements aim to ensure reliability and user experience across diverse environments, including campuses, factories, transport hubs, remote sites, and secure zones [3]. - VIAVI Solutions is positioned as a global provider of network test, monitoring, and assurance solutions across various sectors, including telecommunications and aerospace [4].