Core Insights - Viav Solutions (VIAV) reported quarterly earnings of $0.15 per share, exceeding the Zacks Consensus Estimate of $0.13 per share, and showing an increase from $0.06 per share a year ago, resulting in an earnings surprise of +15.38% [1] - The company achieved revenues of $299.1 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.60% and up from $238.2 million year-over-year [2] - Viav Solutions has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The immediate price movement of Viav Solutions' stock will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.15 on revenues of $302.5 million, and for the current fiscal year, it is $0.57 on revenues of $1.2 billion [7] Industry Context - The Communication - Components industry, to which Viav Solutions belongs, is currently ranked in the top 12% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - Net revenue for Q1 fiscal 2026 was $299.1 million, exceeding guidance of $290 million to $298 million, representing a 3% sequential increase and a 25.6% year-over-year increase [4] - Operating margin for the quarter was 15.7%, above guidance of 14.6% to 15.4%, and increased by 130 basis points sequentially and 570 basis points year-over-year [4] - EPS was $0.15, above guidance of $0.13 to $0.14, and increased by $0.02 sequentially and $0.09 year-over-year [4] Business Segment Data and Key Metrics Changes - NSC revenue was $216 million, above guidance of $208 million to $214 million, with a year-over-year increase of 35.5% driven by strong demand in the data center ecosystem and the acquisition of Inertia Labs [5][6] - OSP revenue was $83.1 million, in line with guidance of $82 million to $84 million, with a year-over-year increase of 5.5% primarily due to strength in anti-counterfeiting products [7] - NSC gross margin was 63%, up 210 basis points year-over-year, while OSP gross margin was 52.3%, down 300 basis points year-over-year due to unfavorable product mix [6][7] Market Data and Key Metrics Changes - The data center ecosystem is driving strong demand for lab and production products, particularly in support of AI data center build-outs [13] - Aerospace and defense business saw strong growth, with continued high demand for positioning, navigation, and timing products [14] - The service providers' business remained stable, with a gradual recovery in fiber offset by soft demand for wireless products [14] Company Strategy and Development Direction - The company plans to leverage the complementary product portfolio from the Spirent acquisition and report NSC as one business segment going forward [11] - The focus is on increasing exposure to the data center ecosystem, which is expected to surpass traditional service provider revenue in the near future [19][20] - The company aims to enhance operational efficiency and expand margins through integration of the Spirent business [66] 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 sectors throughout fiscal 2026 [15] - The company anticipates a seasonal decline in OSP revenue in Q2 due to lower demand for anti-counterfeiting and 3D sensing products [10] - Management highlighted the potential for significant operating leverage as the business recovers, with EPS potentially reaching close to $1 if wireless demand rebounds [32] Other Important Information - Total cash and short-term investments at the end of Q1 were $549.1 million, up from $429 million in the previous quarter [8] - The company successfully refinanced $250 million in convertible notes and repurchased approximately 2.7 million shares for about $30 million [8] Q&A Session Summary Question: Update on revenue mix between core telecom service provider and new products - Management indicated a shift in revenue mix to approximately 45% service provider, 40% data center ecosystem, and 15% aerospace and defense post-Spirent acquisition [19] Question: Growth breakdown between data center and aerospace and defense - Management noted strong demand for field instruments from the data center ecosystem and gradual growth in aerospace and defense, with wireless remaining a weak segment [24][25] Question: Operating margin guidance for NSC - Management expects NSC operating margins to improve with Spirent's contribution, projecting around $165 million in quarterly run rate [27] Question: Impact of wireless recovery on earnings - Management acknowledged that a recovery in wireless could significantly enhance earnings, as it has been a lagging segment [32] Question: Margin profile of the Spirent business - Management confirmed that Spirent's business has a higher gross margin than the average NSC and is expected to be accretive post-integration [66][67] Question: Trends in large service providers' wireline networks - Management observed a gradual recovery in fiber spending among major service providers, with expectations for increased purchasing in the coming year [60]

Financial Data and Key Metrics Changes - Net revenue for Q1 FY2026 was $299.1 million, exceeding guidance of $290 million to $298 million, representing a 3% sequential increase and a 25.6% year-over-year increase [4] - Operating margin for Q1 was 15.7%, above guidance of 14.6% to 15.4%, and increased by 130 basis points sequentially and 570 basis points year-over-year [4] - EPS for the quarter was $0.15, above guidance of $0.13 to $0.14, and increased by $0.02 sequentially and $0.09 year-over-year [4] Business Segment Data and Key Metrics Changes - NSC revenue was $216 million, above guidance of $208 million to $214 million, with a year-over-year increase of 35.5% driven by strong demand from the data center ecosystem and the acquisition of Inertia Labs [5][6] - OSB revenue was $83.1 million, in line with guidance of $82 million to $84 million, and up 5.5% year-over-year, primarily due to strength in anti-counterfeiting products [7] Market Data and Key Metrics Changes - Total cash and short-term investments at the end of Q1 were $549.1 million, up from $429 million in the previous quarter [8] - Cash flow from operating activities for the quarter was $31 million, compared to $13.5 million in the same period last year [8] Company Strategy and Development Direction - The acquisition of Spirent Communications is expected to add approximately $200 million in annual revenue run rate, higher than the previous estimate of $188 million [9][10] - The company plans to leverage the complementary product portfolio and capabilities, reporting NSC as one business segment going forward [11] Management's Comments on Operating Environment and Future Outlook - Management expects strong quarter-on-quarter growth in NSC driven by demand from the data center ecosystem and aerospace and defense customers [15] - The service providers' business was stable, with a gradual recovery in fiber offset by soft demand for wireless products [14] Other Important Information - The company refinanced $250 million in convertible notes and repurchased approximately 2.7 million shares for about $30 million [8] - The fully diluted share count for the quarter was 227.9 million shares, up from 224 million shares in the prior quarter [9] Q&A Session Summary Question: Update on revenue mix between core telecom service provider revenue and new products - Management indicated a shift in revenue mix to approximately 45% service provider, 40% data center ecosystem, and 15% aerospace and defense post-acquisition of Spirent [19][20] Question: Growth breakdown between data center and aerospace and defense - Management noted strong demand for field instruments from the data center ecosystem and gradual growth in aerospace and defense [24] Question: Operating margin guidance for NSC - Management expects operating margins to improve with Spirent's contribution, potentially reaching around $165 million in the early part of 2026 [27] Question: Impact of wireless business recovery on earnings - Management acknowledged that recovery in the wireless segment could significantly enhance earnings, with potential EPS nearing $1 if trends continue positively [33] Question: Margin profile of Spirent Communications business - Management confirmed that Spirent has a higher gross margin than the average NSC and is expected to be accretive post-integration [67][68]

Financial Data and Key Metrics Changes - Net revenue for Q1 2026 was $299.1 million, exceeding guidance of $290 million to $298 million, representing a 3% sequential increase and a 25.6% year-over-year increase [4] - Operating margin for Q1 was 15.7%, above guidance of 14.6% to 15.4%, and increased by 130 basis points sequentially and 570 basis points year-over-year [4] - EPS for the quarter was $0.15, above guidance of $0.13 to $0.14, and increased by $0.02 sequentially and $0.09 year-over-year [4] Business Segment Data and Key Metrics Changes - NSC revenue was $216 million, above guidance of $208 million to $214 million, with a year-over-year increase of 35.5% driven by strong demand from the data center ecosystem and the acquisition of Inertia Labs [5] - OSB revenue was $83.1 million, in line with guidance of $82 million to $84 million, and up 5.5% year-over-year, primarily due to strength in anti-counterfeiting products [6] Market Data and Key Metrics Changes - Total cash and short-term investments at the end of Q1 were $549.1 million, compared to $429 million in the previous quarter [7] - Cash flow from operating activities for the quarter was $31 million, up from $13.5 million in the same period last year [7] Company Strategy and Development Direction - The company expects continued strong demand in NSC driven by the data center ecosystem and aerospace and defense customers, with a focus on integrating the recently acquired Spirent Communications product lines [9][10] - The company plans to report NSC as one business segment going forward, leveraging complementary product portfolios [10] Management's Comments on Operating Environment and Future Outlook - Management noted strong momentum from Q4 2025, with expectations for continued growth in NSC driven by data center demand and aerospace and defense [11][12] - The service providers' business was stable, with gradual recovery in fiber offset by soft demand for wireless products [13] Other Important Information - The company successfully refinanced $250 million in convertible notes and repurchased approximately 2.7 million shares for about $30 million [7] - The acquisition of Spirent Communications is expected to add about $200 million in annual revenue run rate, higher than the previous estimate of $188 million [8][44] Q&A Session Summary Question: Update on revenue mix between core telecom service provider and new products - Management indicated a shift in revenue mix to approximately 45% service provider, 40% data center ecosystem, and 15% aerospace and defense, with data center revenue approaching service provider levels [18][19] Question: Growth breakdown in core NSC business - Management noted strong demand from data center and aerospace and defense sectors, with traditional field instruments seeing increased demand from hyperscalers [20][22] Question: Operating margin guidance for NSC - Management expects operating margins to improve with Spirent's contribution, projecting around $165 million in quarterly revenue from Spirent [24][25] Question: Impact of wireless business recovery on earnings - Management acknowledged that recovery in the wireless segment could significantly enhance earnings, with potential for EPS to approach $1 if trends continue positively [27][28] Question: Margin profile of Spirent Communications business - Management stated that Spirent has a higher gross margin than the average NSC and is expected to be accretive post-integration [51][52]

Financial Performance Highlights - Revenue reached $299.1 million, exceeding the high end of guidance, a 25.6% year-over-year increase[7, 17] - Non-GAAP Operating Income was $47.1 million, also above the high end of guidance, with a Non-GAAP Operating Margin of 15.7%[7] - Non-GAAP EPS was $0.15, a 150% year-over-year increase[7] - The company generated $31.0 million in operating cash flow and $22.5 million in free cash flow[8] Segment Performance - Network and Service Enablement (NSE) revenue was $216.0 million, up 35.5% year-over-year, driven by strong demand from the data center ecosystem and growth in aerospace and defense products[11] - Optical Security and Performance Products (OSP) revenue was $83.1 million, a 5.5% year-over-year increase, primarily due to strength in Anti Counterfeiting and Other products[13] - NSE Gross Margin increased to 63.0%, up 210 basis points year-over-year, while OSP Gross Margin decreased to 52.3%, down 300 basis points year-over-year[11, 13] Capital Allocation and Outlook - The company successfully closed the acquisition of Spirent's high-speed ethernet, network security, and channel emulation business lines from Keysight, expected to add about $200 million of annual revenue run rate[9] - Refinanced $250 million of 1.625% convertible notes due in March 2026 with $250 million of 0.625% convertible notes due in March 2031[9] - The business outlook for Fiscal Q2 2026 includes revenue between $360 million and $370 million and Non-GAAP EPS between $0.18 and $0.20[14]

Exhibit 99.1 VIAVI Announces First Quarter Fiscal 2026 Results Chandler, Arizona, October 29, 2025 — VIAVI (NASDAQ: VIAV) today reported results for its fiscal first quarter ended September 27, 2025 with the following highlights. "VIAVI's first quarter financial performance has exceeded our expectations. Strong demand from the data center ecosystem and aerospace & defense customers was the primary driver behind our strong performance. We expect the strong momentum in these end markets to continue through th ...

Core Insights - VIAVI Solutions Inc. has completed the acquisition of Spirent Communications plc's high-speed ethernet, network security, and channel emulation testing business for $425 million in cash [1][2] - The acquisition is expected to contribute approximately $180 million to VIAVI's Network Service Enablement revenue in the first year and be accretive to non-GAAP EPS within 12 months [2] Financial Details - The acquisition was financed through a senior secured term loan of $600 million from Wells Fargo Bank, maturing in seven years [3] - VIAVI plans to utilize its U.S. net operating losses to reduce the blended non-GAAP tax rate of the combined group [2] Strategic Implications - The acquisition enables VIAVI to enhance its product offerings in high-speed ethernet, network security, and channel emulation testing, providing a complementary and synergistic product portfolio across various verticals [7] - This strategic move positions VIAVI to better serve telecommunications, cloud, and enterprise markets [4]

Core Viewpoint - Viavi Solutions Inc. will announce its fiscal first quarter 2026 financial results on October 29, 2025, after market close [1]. Financial Results Announcement - The earnings call is scheduled for 1:30 p.m. PT / 4:30 p.m. ET, with a live webcast available on the VIAVI website [2]. - The quarterly earnings press release, supplementary slides, and historical financial tables will be posted under the "Quarterly Results" section [2]. - Participation via telephone is available with a toll-free dial-in number of 1 (800) 715-9871 and a toll dial-in number of 1 (646) 307-1963, using conference ID 3072689 [2]. - A replay of the call will be available from October 29, 2025, 4:30 p.m. PT to November 5, 2025, 8:59 p.m. PT [2]. Company Overview - Viavi Solutions is a global provider of network test, monitoring, and assurance solutions for various sectors including telecommunications, cloud, enterprises, military, and aerospace [1][2]. - The company is also a leader in light management technologies for applications in 3D sensing, anti-counterfeiting, consumer electronics, and automotive industries [2].

Core Insights - VIAVI Solutions Inc. has launched the ONE-1600ER module, enhancing its ONE LabPro testing platform to support next-generation 1.6Tb optical components [1][3] - The new module is designed to meet the increasing demands driven by AI and machine learning in network infrastructure [2][4] Product Enhancements - The ONE-1600ER module extends the capabilities of the ONE LabPro platform with full Ethernet support based on the latest 802.3dj specification, including 1.6Tb and 8x200G testing [3][4] - It offers native support for Riding Heat Sink (RHS) OSFP 1600G modules and comprehensive RFC2544 for full performance testing [3][4] Industry Context - The deployment of 1.6Tb optical transceivers is becoming prevalent as infrastructure operators adapt to AI-driven demands [2][4] - VIAVI has been actively engaged in supporting the rollout of 1.6Tb and 200G SERDES technologies, being the first to market with a 1.6Tb solution [3] Upcoming Events - The ONE-1600 and MAP-300 platforms will be showcased at ECOC 2025 in Copenhagen from September 29 to October 1 [5] - VIAVI will also demonstrate seamless PCIe 6.0 interoperability over an optical link in collaboration with Alphawave Semi [6] Additional Features - The ONE-1600ER includes robust power and cooling management properties for next-generation 1.6Tb coherent modules [4] - Enhancements to the MAP-300 platform and inspection portfolios are aimed at addressing scaling challenges for manufacturers of transceivers and connectors [4][6]

Core Insights - VIAVI Solutions Inc. is recognized as a promising low-priced technology stock, focusing on enhancing its position in network performance and cybersecurity [1] - The company has partnered with CrowdStrike to integrate its Observer platform with Falcon Next-Gen SIEM, aiming to provide unified visibility for enterprises [2] Strategic Developments - VIAVI's growth outlook is supported by strategic mergers and acquisitions, including the acquisition of Spirent Communications' assets, which has led to an upgrade from Morgan Stanley [3] - The price target for VIAVI has been raised from $9.30 to $11, reflecting confidence in the company's growth potential [3] Market Positioning - The acquisition of Ethernet and network security business lines from Keysight Technologies is expected to enhance VIAVI's capabilities in channel emulation and technology testing [4] - Despite some risks, demand from sectors such as aerospace, defense, and data centers provides a counterbalance to potential challenges [4] Company Overview - VIAVI Solutions provides network test, monitoring, and assurance solutions across various sectors, including telecommunications, cloud, and military [5]