Viavi's Q1 Earnings Match Estimates, Revenues Decline Y/Y

Core Viewpoint - Viavi Solutions Inc. reported modest first-quarter fiscal 2025 results, with adjusted earnings meeting expectations but revenues falling short due to sluggish demand and macroeconomic challenges [1] Financial Performance - The company incurred a net loss of $1.8 million or a loss of $0.01 per share, compared to a net income of $9.8 million or $0.04 per share in the same quarter last year, primarily due to revenue contraction [2] - Non-GAAP net income was $12.4 million or $0.06 per share, down from $19.5 million or $0.09 per share year-over-year, aligning with consensus estimates [2] Revenue Breakdown - Total revenues were $238.2 million, down from $247.9 million in the prior year, missing the consensus estimate of $240 million [3] - Network Enablement segment revenues were $141.6 million, a decline of 5.6% from $150 million year-over-year, impacted by weak demand trends [4] - Service Enablement segment revenues decreased by 12.7% to $17.8 million from $20.4 million, reflecting conservative spending by enterprise customers [5] - Optical Security and Performance Products segment revenues increased by 1.7% to $78.8 million from $77.5 million, driven by strong demand for 3D sensing and anti-counterfeiting products [5] Geographic Revenue Contribution - Revenues from the Americas were $88.7 million, down from $100.5 million year-over-year [6] - Revenues from Asia-Pacific remained flat at $85.9 million [6] - Revenues from EMEA increased to $63.6 million from $61.5 million in the prior year [6] Margins and Operating Performance - Non-GAAP gross margin was 59.1%, down from 60.1% year-over-year [7] - Non-GAAP operating margin decreased by 240 basis points to 10%, with the Network and Service Enablement business experiencing a 550 basis point decline [8] Cash Flow and Liquidity - The company generated $13.5 million in cash from operating activities during the quarter and had $467.9 million in cash and cash equivalents as of September 28, 2024, against $637.6 million in long-term debt [10] Outlook - For the second quarter of fiscal 2025, management expects revenues between $255 million and $265 million, with non-GAAP operating margin projected at 11.4% to 13.4% and earnings per share between $0.09 and $0.11 [11]