Viavi Surpasses Q4 Earnings Estimates on Solid Revenue Growth

Core Insights - Viavi Solutions Inc. reported strong fourth-quarter fiscal 2025 results, with revenues and net income exceeding expectations, driven by growth in the Network and Service Enablement (NSE) and Optical Security and Performance Products (OSP) segments [1][4][10] - The company faces challenges due to a constrained spending environment influenced by macroeconomic factors [1] Financial Performance - GAAP net income for the quarter was $8 million or 4 cents per share, a significant improvement from a net loss of $21.7 million or 10 cents per share in the same quarter last year [2] - Non-GAAP net income rose to $29.7 million or 13 cents per share, up from $17.1 million or 8 cents per share year-over-year, surpassing the Zacks Consensus Estimate by a penny [2] - For fiscal 2025, GAAP net income was $34.8 million or 15 cents per share compared to a net loss of $25.8 million or 12 cents per share in fiscal 2024 [3] - Non-GAAP net income for fiscal 2025 was $105.4 million or 47 cents per share, an increase from $73.5 million or 33 cents per share in fiscal 2024 [3] Revenue Breakdown - Quarterly revenues reached $290.5 million, reflecting a 15.3% year-over-year increase, driven by strong demand in the NSE and OSP segments [4][10] - NSE segment revenues were $209.1 million, up from $182.2 million, marking a 14.8% growth due to demand for fiber lab and production products [5] - OSP revenues increased to $81.4 million from $69.8 million, primarily due to strength in anti-counterfeiting products [5] - Revenue contributions from different regions included $112.3 million from America, $99.4 million from Asia-Pacific, and $78.8 million from EMEA [6] Margins and Operating Performance - Non-GAAP gross margin for the quarter was 60.1%, up 50 basis points from the prior year [7] - Non-GAAP operating margin improved by 350 basis points year-over-year to 14.4%, with NSE operating margin at 4.7% and OSP operating margin at 39.4% [8][10] Cash Flow and Liquidity - Viavi generated $89.8 million in cash from operating activities, with a free cash flow of $62 million [11] - As of June 30, 2025, the company had $423.6 million in cash and cash equivalents, with long-term debt of $396.1 million [11] Outlook - For the first quarter of fiscal 2026, management expects revenues between $290 million and $298 million, with non-GAAP earnings per share projected between 13 cents and 14 cents [12]