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VIAV's Q1 Beat and Q2 Outlook Highlight Data Center Momentum Ahead
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Key Takeaways
Viavi's Q1 2027 revenues surged 56.9%, while earnings jumped 213.3%, beating estimates by 17.5%.
VIAV projects Q2 2027 revenues of $505-$515 million and earnings of 50-52 cents per share.
Data-center demand, 1.6T optics and semiconductor testing support growth, while operating margins expand.
Viavi Solutions Inc. (VIAV - Free Report) started fiscal 2027 with better-than-expected results and a second-quarter outlook that keeps data-center demand at the center of the investment case. Revenues, earnings and margins all improved sharply in the fiscal first quarter.
The next test is whether optical-testing demand, newer semiconductor applications and operating leverage can sustain that momentum as Viavi scales across faster data-center architectures.
VIAV’s Q1 Beat Shows Demand Strength
Fiscal first-quarter revenues rose 56.9% year over year to $469.3 million and beat the Zacks Consensus Estimate by 3.1%. Non-GAAP earnings of 47 cents per share increased 213.3% and exceeded the consensus estimate by 17.5%.
Network and Service Enablement revenues increased 74.1% to $376.1 million. Data-center demand, aerospace and defense customers and acquired Spirent product lines drove the gain, with Spirent contributing $52.7 million during the quarter.
Management expects fiscal second-quarter revenues of $505 million to $515 million and non-GAAP earnings of 50-52 cents per share. Network and Service Enablement revenues are projected at $426-$434 million, supported by continued demand from data-center and aerospace and defense customers.
The broader testing market also reflects elevated investment. Keysight Technologies, Inc. (KEYS - Free Report) reported fiscal third-quarter 2026 revenues of $1.85 billion, up 36% year over year, with commercial communications revenues increasing 56%. That backdrop supports the view that advanced communications testing remains tied to sizable infrastructure investment.
VIAV’s Data Center Opportunity Is Broadening
Viavi’s opportunity extends across 800G and 1.6T transceivers, AI fabrics, silicon photonics and co-packaged optics. Management said 1.6T remains in the early stages of its production ramp and expects 800G and 1.6T deployments to run concurrently for some time.
The company has also started shipping into semiconductor packaging and test, a market created by greater optical integration near advanced processors. Management believes this opportunity could exceed $100 million in annual revenues within a few years, adding a new growth avenue beyond traditional optical-module production.
Viavi’s Margin Expansion Raises the Stakes
Non-GAAP operating margin reached 29% in the fiscal first quarter, up 1,270 basis points year over year. Network and Service Enablement operating margin rose to 25.5% from 8.2%, reflecting higher revenues and operating leverage, although tariff refunds also provided a net benefit to consolidated profitability.
Management expects a fiscal second-quarter non-GAAP operating margin of about 29.3%, plus or minus 30 basis points. Ciena Corporation (CIEN - Free Report) , which sells optical networking systems and interconnects, reported 37% year-over-year revenue growth in its fiscal third quarter of 2026 as AI-related network investment strengthened. The comparison highlights the scale of current optical-network demand while raising the execution bar for suppliers serving that buildout.
VIAV’s Near-Term Signals Back the Earnings Story
VIAV’s earnings beat, higher outlook and expanding data-center exposure support a constructive near-term setup. Sustaining that case will depend on continued demand, successful integration of the Spirent assets and further conversion of revenue growth into earnings.
VIAV currently sports a Zacks Rank #1 (Strong Buy). It also has a Growth Score of A, Momentum Score of A and VGM Score of B, a combination that supports favorable near-term growth and momentum characteristics when paired with a top Zacks Rank. The Value Score of D provides the counterweight. It suggests investors should not treat the current setup as a pure value case, making durable earnings growth and operating leverage important to the stock’s prospects. You can see the complete list of today’s Zacks #1 Rank stocks here.
View the Zacks #1 Rank List
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VIAV's Q1 Beat and Q2 Outlook Highlight Data Center Momentum Ahead
Key Takeaways
Viavi Solutions Inc. (VIAV - Free Report) started fiscal 2027 with better-than-expected results and a second-quarter outlook that keeps data-center demand at the center of the investment case. Revenues, earnings and margins all improved sharply in the fiscal first quarter.
The next test is whether optical-testing demand, newer semiconductor applications and operating leverage can sustain that momentum as Viavi scales across faster data-center architectures.
VIAV’s Q1 Beat Shows Demand Strength
Fiscal first-quarter revenues rose 56.9% year over year to $469.3 million and beat the Zacks Consensus Estimate by 3.1%. Non-GAAP earnings of 47 cents per share increased 213.3% and exceeded the consensus estimate by 17.5%.
Network and Service Enablement revenues increased 74.1% to $376.1 million. Data-center demand, aerospace and defense customers and acquired Spirent product lines drove the gain, with Spirent contributing $52.7 million during the quarter.
Viavi Solutions Inc. Price and Consensus
Viavi Solutions Inc. price-consensus-chart | Viavi Solutions Inc. Quote
Viavi’s Q2 Outlook Extends the Growth Story
Management expects fiscal second-quarter revenues of $505 million to $515 million and non-GAAP earnings of 50-52 cents per share. Network and Service Enablement revenues are projected at $426-$434 million, supported by continued demand from data-center and aerospace and defense customers.
The broader testing market also reflects elevated investment. Keysight Technologies, Inc. (KEYS - Free Report) reported fiscal third-quarter 2026 revenues of $1.85 billion, up 36% year over year, with commercial communications revenues increasing 56%. That backdrop supports the view that advanced communications testing remains tied to sizable infrastructure investment.
VIAV’s Data Center Opportunity Is Broadening
Viavi’s opportunity extends across 800G and 1.6T transceivers, AI fabrics, silicon photonics and co-packaged optics. Management said 1.6T remains in the early stages of its production ramp and expects 800G and 1.6T deployments to run concurrently for some time.
The company has also started shipping into semiconductor packaging and test, a market created by greater optical integration near advanced processors. Management believes this opportunity could exceed $100 million in annual revenues within a few years, adding a new growth avenue beyond traditional optical-module production.
Viavi’s Margin Expansion Raises the Stakes
Non-GAAP operating margin reached 29% in the fiscal first quarter, up 1,270 basis points year over year. Network and Service Enablement operating margin rose to 25.5% from 8.2%, reflecting higher revenues and operating leverage, although tariff refunds also provided a net benefit to consolidated profitability.
Management expects a fiscal second-quarter non-GAAP operating margin of about 29.3%, plus or minus 30 basis points. Ciena Corporation (CIEN - Free Report) , which sells optical networking systems and interconnects, reported 37% year-over-year revenue growth in its fiscal third quarter of 2026 as AI-related network investment strengthened. The comparison highlights the scale of current optical-network demand while raising the execution bar for suppliers serving that buildout.
VIAV’s Near-Term Signals Back the Earnings Story
VIAV’s earnings beat, higher outlook and expanding data-center exposure support a constructive near-term setup. Sustaining that case will depend on continued demand, successful integration of the Spirent assets and further conversion of revenue growth into earnings.
VIAV currently sports a Zacks Rank #1 (Strong Buy). It also has a Growth Score of A, Momentum Score of A and VGM Score of B, a combination that supports favorable near-term growth and momentum characteristics when paired with a top Zacks Rank. The Value Score of D provides the counterweight. It suggests investors should not treat the current setup as a pure value case, making durable earnings growth and operating leverage important to the stock’s prospects. You can see the complete list of today’s Zacks #1 Rank stocks here.