Viavi Solutions(VIAV) - 2026 Q1 - Quarterly Results

Financial Performance - Net revenue for the first quarter of fiscal 2026 was $299.1 million, an increase of $60.9 million or 25.6% year-over-year[5] - The company reported a GAAP net loss of $21.4 million, which is an increase of $19.6 million or 1,088.9% year-over-year[5] - Non-GAAP net income was $33.1 million, up $20.7 million or 166.9% year-over-year[5] - Net revenue for the three months ended September 27, 2025, was $299.1 million, a 25.6% increase from $238.2 million in the same period last year[22] - Operating income was $7.6 million, reflecting a decrease from $11.5 million year-over-year, resulting in an operating margin of 2.5%[22] - GAAP net loss for the three months ended September 27, 2025, was $21.4 million, compared to a loss of $1.8 million for the same period in 2024[34] Margins and Income - GAAP operating margin decreased to 2.5%, down 230 basis points year-over-year, while non-GAAP operating margin improved to 15.7%, up 570 basis points year-over-year[5] - Non-GAAP operating income for the same period was $47.1 million, with a non-GAAP operating margin of 15.7%, compared to $23.9 million and 10.0% in the previous year[31] - Gross profit rose to $169.0 million with a gross margin of 56.5%, compared to $136.1 million and a gross margin of 57.1% in the prior year[22] - The gross margin for the Optical Security and Performance Products segment was 52.3%, while the Network and Service Enablement segment achieved a gross margin of 63.0%[22] Cash Flow and Liquidity - The company generated $31.0 million in cash flows from operations during the fiscal quarter[11] - As of September 27, 2025, the company held $549.1 million in total cash, short-term investments, and short-term restricted cash[11] - Cash and cash equivalents increased to $543.8 million, up from $423.6 million in the previous quarter, indicating improved liquidity[19] Debt and Financing - Long-term debt rose significantly to $640.5 million from $396.3 million, reflecting a strategic shift in financing[19] - The company reported a total net carrying value of $791.6 million in senior notes and convertible notes[11] Future Outlook - The company expects net revenue for the second quarter of fiscal 2026 to be between $360 million and $370 million, with non-GAAP EPS projected between $0.18 and $0.20[6] - The acquisition of Spirent product lines is anticipated to enhance the company's position in the data center ecosystem and expand its market footprint[3] Other Financial Metrics - Adjusted EBITDA increased to $56.8 million for the three months ended September 27, 2025, up from $33.5 million in the prior year[34] - Interest expense remained stable at $7.4 million for the three months ended September 27, 2025, compared to $7.5 million in the same period last year[34] - Stock-based compensation increased to $13.4 million, up from $12.7 million year-over-year[34] - The provision for income taxes was $19.0 million for the three months ended September 27, 2025, compared to $9.0 million in the prior year[34] - Depreciation and amortization expenses were $9.8 million and $8.4 million, respectively, for the current quarter[34] - The company reported equity investment losses of $0.1 million for the three months ended September 27, 2025[34] - Restructuring and related benefits resulted in a charge of $0.3 million during the quarter[34] - The company recognized a change in fair value of contingent liability amounting to $10.9 million for the three months ended September 27, 2025[34]