Core Insights - VIAVI Solutions Inc. announced that the Battelle RavenStar™ Active Antenna System is the first product validated under O-RAN and 3GPP test specifications at VALOR, an Automated Lab-as-a-Service for Open RAN [1] - VALOR aims to accelerate Open RAN adoption by providing accessible testing capabilities to new entrants and start-ups, facilitating U.S. certification without significant investment [2] - The RavenStar technology is an ultra-wideband, steerable radio unit designed to reduce total cost of ownership and enhance network capacity through massive MIMO [3] Testing and Validation - At VALOR, RavenStar underwent comprehensive Open Radio Unit testing, achieving 99% of theoretical uplink and downlink throughput, demonstrating high performance [4] - Successful testing at VALOR is seen as a significant milestone for Battelle, guiding future design and development decisions for the RavenStar technology [5] Strategic Partnerships - The partnership between Battelle and VIAVI is critical for validating the readiness of Open RAN technologies for deployment, showcasing the efficiency of VALOR's testing architecture [5] - VIAVI is recognized for its role in providing essential test results that will influence the development of Battelle's RavenStar product [5] Company Backgrounds - VIAVI is a global provider of network test, monitoring, and assurance solutions across various sectors including telecommunications and aerospace [6] - Battelle focuses on applying science and technology to solve critical issues, serving industries such as national security and health [7]

Core Viewpoint - VIAVI Solutions Inc. will showcase its latest innovations in network optimization technologies at MWC Barcelona from March 3-6, 2025, focusing on advancements in 6G, AI, and network resilience [1][3]. Group 1: Technology Innovations - VIAVI will highlight its 6G Forward initiatives, AI-driven digital twins for network optimization, and Non-Terrestrial Network (NTN) validation [2][4]. - The company will demonstrate energy-efficient neuromorphic receivers and a goal-oriented communication framework for metaverse applications [5]. - VIAVI's solutions will include a digital twin of a real campus environment and advanced MIMO testing for massive and multi-user scenarios [5]. Group 2: Network Security and Resilience - VIAVI will address the growing security threats posed by quantum computing with its TeraVM Security Test for Post-Quantum Cryptography (PQC) [6]. - The company will showcase its NTN digital twin testbed and resilient Positioning, Navigation and Timing (PNT) solutions to ensure critical infrastructure operations [4][6]. Group 3: Transition from Telco to Techco - The telecommunications industry is evolving towards Techco models, requiring faster networks and lower latencies to support IoT, AI, and cloud computing [9]. - VIAVI will present solutions that facilitate this transition, including data-driven automation and AI-assisted RAN optimization [9]. Group 4: Network Management and Automation - VIAVI will demonstrate its NITRO® AIOps solution, which provides end-to-end visibility and autonomous issue resolution for complex multi-vendor networks [10]. - The company will stream real-time Open RAN remote testing demonstrations from its Automated Lab-as-a-Service (VALOR™) Lab [11].

Core Insights - VIAVI Solutions Inc. has validated the over-the-air performance of Nokia's Massive MIMO radio in the upper 6 GHz frequency range, which is essential for enhancing capacity in 5G-Advanced and 6G networks [1][3] - The allocation of the upper 6 GHz spectrum for mobile services, providing up to 200 MHz of mid-band TDD spectrum per operator, was agreed upon at the World Radio Conference 2023, highlighting the industry's need for increased spectrum holdings [2] Company Insights - VIAVI Solutions is recognized for its role in advancing wireless technology, particularly as the industry transitions from 4G to 5G and beyond [4] - The company provides a range of network test, monitoring, and assurance solutions across various sectors, including telecommunications, cloud, and aerospace [4] Industry Insights - The testing of the AirScale platform in the upper 6 GHz band was conducted in real-world scenarios to validate its performance, indicating a significant step towards the deployment of next-generation networks [3] - The industry is focusing on utilizing new frequency bands to meet the demands of future wireless technology, emphasizing the importance of capacity, coverage, and efficiency [2]

Core Insights - VIAVI Solutions Inc. has launched the EdgeGM 7000, a resilient Edge Grandmaster Clock, enhancing its SecurePNT portfolio to provide superior resilience for Positioning, Navigation, and Timing (PNT) services [1][5] - The new solution supports up to 25G Precision Time Protocol (PTP) and multi-orbit SecureTime altGNSS, addressing vulnerabilities in critical infrastructure that rely on GNSS signals [1][2] Product Launch and Features - The EdgeGM 7000 combines advanced PTP capabilities with a compact, rack-mountable design, allowing for scalability from 1/10G to 25G PTP through a simple license upgrade [3] - It offers flexibility for GNSS backup activation via an on-demand alternate GNSS GEO-L source license over the air, showcasing its adaptability for various operational needs [3] Market Context and Demand - The increasing reliance on GNSS signals in critical networks such as 5G/6G telecommunications, AI data centers, and defense highlights the need for enhanced network resilience against cyber threats [2] - Governments are mandating infrastructure providers to strengthen their networks, creating a growing market for VIAVI's solutions [2] Financial Performance and Growth Potential - VIAVI's comprehensive product portfolio supports end-to-end network visibility and analytics, positioning the company for long-term revenue growth as the industry transitions to superfast 5G networks [4] - The launch of the EdgeGM 7000 is expected to generate incremental demand, potentially leading to improved financial performance and stock price appreciation [5] Stock Performance - VIAVI's shares have increased by 33.6% over the past year, although this is below the industry's growth of 69.9% [6]

Core Insights - VIAVI Solutions Inc. has launched the EdgeGM™ 7000, a resilient Edge Grandmaster Clock that enhances its SecurePNT™ portfolio, providing up to 25G Precision Time Protocol (PTP) and multi-orbit SecureTimeSM altGNSSSM for critical infrastructure operations worldwide [1][2][3] Group 1: Product Features - The EdgeGM 7000 offers advanced features for Positioning, Navigation, and Timing (PNT) services, crucial for sectors like telecommunications, AI data centers, defense, and finance [2][3] - It integrates multisource assurance by combining signals from GNSS-dependent and GNSS-independent constellations across Medium Earth Orbit (MEO), Geosynchronous Earth Orbit (GEO), and Low Earth Orbit (LEO) [3] - The device is compact, rack-mountable, and can be upgraded from 1/10G to 25G PTP with a simple license, exceeding Level 4 PNT resiliency as per IEEE P1252 standards [3] Group 2: Market Context - There is a rising threat to critical infrastructure, particularly concerning disruptions to PNT services, which are essential for secure operations [2][4] - Governments are mandating improvements in the resilience of networks, prompting companies to adopt more responsible PNT service usage [2]

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]

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].

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].

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].

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]