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Viavi Surpasses Q4 Earnings Estimates on Solid Revenue Growth
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Key Takeaways
Viavi posted Q4 revenue of $290.5M and non-GAAP EPS of $0.13, beating consensus on both fronts.
NSE revenue rose 14.8% to $209.1M on fiber, aerospace and defense demand; OSP climbed to $81.4M.
Non-GAAP operating margin improved 350 bps to 14.4% on volume growth and favorable product mix.
Viavi Solutions Inc. (VIAV - Free Report) reported solid fourth-quarter fiscal 2025 results, with both the top and bottom lines surpassing the Zacks Consensus Estimate. The company reported an increase in revenues backed by healthy growth in the Network and Service Enablement (NSE) and Optical Security and Performance Products (OSP) segments. Management’s strong emphasis on various markets such as wireless & fiber, optical transport, Ethernet, broadband access, video test and storage network testing is a key growth driver. However, a constrained spending environment owing to macroeconomic challenges is worrisome.
Net Income
On a GAAP basis, net income in the quarter was $8 million or 4 cents per share against a net loss of $21.7 million or a loss of 10 cents per share in the year-ago quarter. The significant improvement in GAAP earnings was primarily due to top-line growth.
Non-GAAP net income increased to $29.7 million or 13 cents per share from $17.1 million or 8 cents per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by a penny.
For fiscal 2025, GAAP net income was $34.8 million or 15 cents per share against a net loss of $25.8 million or a loss of 12 cents per share in fiscal 2024. Non-GAAP net income for fiscal 2025 was $105.4 million or 47 cents per share compared with $73.5 million or 33 cents per share in fiscal 2024.
Viavi Solutions Inc. Price, Consensus and EPS Surprise
Quarterly revenues were $290.5 million, up 15.3% year over year. The healthy demand in the NSE and OSP segments cushioned the top line. Revenues beat the Zacks Consensus Estimate of $285 million. For fiscal 2025, net revenues were $1.08 billion, up from $1 billion in fiscal 2024.
During the quarter, Viavi combined the erstwhile Network Enablement (NE) and Service Enablement (SE) into a single reportable segment, NSE. Net quarterly sales in the NSE segment were $209.1 million, up from $182.2 million in the year-ago quarter. The 14.8% growth was primarily driven by the strong demand for fiber lab and production products, along with aerospace and defense products. OSP revenues increased to $81.4 million from $69.8 million, primarily due to strength in anti-counterfeiting products.
Net sales from America contributed $112.3 million to revenues, up from $98.8 million reported a year ago. Revenues from Asia-Pacific were $99.4 million, up 8.8% from the year-earlier quarter’s tally of $91.4 million. Revenues from EMEA increased to $78.8 million from $61.8 million a year ago.
Other Details
In the fourth quarter of fiscal 2025, the non-GAAP gross margin was 60.1%, up 50 basis points (bps) from the prior-year quarter. Non-GAAP gross margin in the NSE segment was 62.2%, up 10 bps, led by higher volume and product mix. OSP segment’s gross margin increased to 54.7%, up 170 bps, driven by higher volume and favorable product mix.
Total non-GAAP operating margin increased 350 bps year over year to 14.4%. Operating margin in NSE increased 290 bps to 4.7%, while the OSP segment’s operating margin increased 460 bps to 39.4% on higher fall-through.
Cash Flow & Liquidity
In fiscal 2025, Viavi generated $89.8 million of cash from operating activities, with a free cash flow of $62 million. As of June 30, 2025, the company had $423.6 million in cash and cash equivalents with $396.1 million of long-term debt compared with respective tallies of $471.3 million and $636 million in the year-ago period.
Outlook
For the first quarter of fiscal 2026, management expects revenues in the range of $290-$298 million. Non-GAAP earnings per share are expected to be between 13 cents and 14 cents.
For the NSE segment, revenues are projected to be between $208 and $214 million, with a non-GAAP operating margin of 5.8%. Revenues for the OSP segment are anticipated to be in the band of $82-$84 million, with a non-GAAP operating margin of 38.3%.
Keysight Technologies, Inc. (KEYS - Free Report) is scheduled to release third-quarter 2025 earnings on Aug. 19. The Zacks Consensus Estimate for earnings is pegged at $1.67 per share, suggesting a growth of 6.4% from the year-ago reported figure.
Keysight has a long-term earnings growth expectation of 12%. Keysight delivered an average earnings surprise of 8.2% in the last four reported quarters.
Workday, Inc. (WDAY - Free Report) is slated to release second-quarter 2025 earnings on Aug. 21. The Zacks Consensus Estimate for earnings is pegged at $2.09 per share, suggesting a growth of 19.4% from the year-ago reported figure.
Workday has a long-term earnings growth expectation of 18.8%. Workday delivered an average earnings surprise of 9.7% in the last four reported quarters.
Telephone and Data Systems, Inc. (TDS - Free Report) is slated to release second-quarter 2025 earnings on Aug. 11. The Zacks Consensus Estimate for loss is pegged at 1 cent per share, suggesting a growth of 92.3% from the year-ago reported figure.
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Viavi Surpasses Q4 Earnings Estimates on Solid Revenue Growth
Key Takeaways
Viavi Solutions Inc. (VIAV - Free Report) reported solid fourth-quarter fiscal 2025 results, with both the top and bottom lines surpassing the Zacks Consensus Estimate. The company reported an increase in revenues backed by healthy growth in the Network and Service Enablement (NSE) and Optical Security and Performance Products (OSP) segments. Management’s strong emphasis on various markets such as wireless & fiber, optical transport, Ethernet, broadband access, video test and storage network testing is a key growth driver. However, a constrained spending environment owing to macroeconomic challenges is worrisome.
Net Income
On a GAAP basis, net income in the quarter was $8 million or 4 cents per share against a net loss of $21.7 million or a loss of 10 cents per share in the year-ago quarter. The significant improvement in GAAP earnings was primarily due to top-line growth.
Non-GAAP net income increased to $29.7 million or 13 cents per share from $17.1 million or 8 cents per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by a penny.
For fiscal 2025, GAAP net income was $34.8 million or 15 cents per share against a net loss of $25.8 million or a loss of 12 cents per share in fiscal 2024. Non-GAAP net income for fiscal 2025 was $105.4 million or 47 cents per share compared with $73.5 million or 33 cents per share in fiscal 2024.
Viavi Solutions Inc. Price, Consensus and EPS Surprise
Viavi Solutions Inc. price-consensus-eps-surprise-chart | Viavi Solutions Inc. Quote
Revenues
Quarterly revenues were $290.5 million, up 15.3% year over year. The healthy demand in the NSE and OSP segments cushioned the top line. Revenues beat the Zacks Consensus Estimate of $285 million. For fiscal 2025, net revenues were $1.08 billion, up from $1 billion in fiscal 2024.
During the quarter, Viavi combined the erstwhile Network Enablement (NE) and Service Enablement (SE) into a single reportable segment, NSE. Net quarterly sales in the NSE segment were $209.1 million, up from $182.2 million in the year-ago quarter. The 14.8% growth was primarily driven by the strong demand for fiber lab and production products, along with aerospace and defense products. OSP revenues increased to $81.4 million from $69.8 million, primarily due to strength in anti-counterfeiting products.
Net sales from America contributed $112.3 million to revenues, up from $98.8 million reported a year ago. Revenues from Asia-Pacific were $99.4 million, up 8.8% from the year-earlier quarter’s tally of $91.4 million. Revenues from EMEA increased to $78.8 million from $61.8 million a year ago.
Other Details
In the fourth quarter of fiscal 2025, the non-GAAP gross margin was 60.1%, up 50 basis points (bps) from the prior-year quarter. Non-GAAP gross margin in the NSE segment was 62.2%, up 10 bps, led by higher volume and product mix. OSP segment’s gross margin increased to 54.7%, up 170 bps, driven by higher volume and favorable product mix.
Total non-GAAP operating margin increased 350 bps year over year to 14.4%. Operating margin in NSE increased 290 bps to 4.7%, while the OSP segment’s operating margin increased 460 bps to 39.4% on higher fall-through.
Cash Flow & Liquidity
In fiscal 2025, Viavi generated $89.8 million of cash from operating activities, with a free cash flow of $62 million. As of June 30, 2025, the company had $423.6 million in cash and cash equivalents with $396.1 million of long-term debt compared with respective tallies of $471.3 million and $636 million in the year-ago period.
Outlook
For the first quarter of fiscal 2026, management expects revenues in the range of $290-$298 million. Non-GAAP earnings per share are expected to be between 13 cents and 14 cents.
For the NSE segment, revenues are projected to be between $208 and $214 million, with a non-GAAP operating margin of 5.8%. Revenues for the OSP segment are anticipated to be in the band of $82-$84 million, with a non-GAAP operating margin of 38.3%.
Zacks Rank
Viavi currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Keysight Technologies, Inc. (KEYS - Free Report) is scheduled to release third-quarter 2025 earnings on Aug. 19. The Zacks Consensus Estimate for earnings is pegged at $1.67 per share, suggesting a growth of 6.4% from the year-ago reported figure.
Keysight has a long-term earnings growth expectation of 12%. Keysight delivered an average earnings surprise of 8.2% in the last four reported quarters.
Workday, Inc. (WDAY - Free Report) is slated to release second-quarter 2025 earnings on Aug. 21. The Zacks Consensus Estimate for earnings is pegged at $2.09 per share, suggesting a growth of 19.4% from the year-ago reported figure.
Workday has a long-term earnings growth expectation of 18.8%. Workday delivered an average earnings surprise of 9.7% in the last four reported quarters.
Telephone and Data Systems, Inc. (TDS - Free Report) is slated to release second-quarter 2025 earnings on Aug. 11. The Zacks Consensus Estimate for loss is pegged at 1 cent per share, suggesting a growth of 92.3% from the year-ago reported figure.