Viavi Solutions(VIAV) - 2026 Q2 - Quarterly Results

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]