VIAV 10-K & 10-Q changes, risk factors and insider trading
Viavi Solutions Inc. · Nasdaq · Semiconductors & Related Devices · CIK 912093 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our stock price has experienced significant volatility and may continue to fluctuate, which could adversely affect the value of an investment in our common stock.”
Largest changes
We operate globally and sell our products in countries throughout the world.see in full comparisonRecent escalationEscalations in regional conflicts, including theRussianongoinginvasionconflictsofbetweenUkraine,Russiaresultingand Ukraine and in the Middle East, ongoing and expanding economic sanctions,conflictpolitical instability and economic uncertainty in the Middle East, and the risk of increased tensions between the U.S. and China, could curtail or prohibit our ability to transfer certain technologies, to sell our products and solutions, or to continue to operate in certain locations. Foreign companies with a presence in China are facing increasing operational challenges and enhanced scrutiny from governmental entities in the region. Further, it is possible that the U.S.-Chinese geopolitical tensions could result in government measures that could adversely impact our business.In September 2023, a bill was introduced by the House Financial Services Committee that would authorize sanctions on certain Chinese entities in China’s defense and surveillance technology sectors. This could have an adverse impact on our revenues in this region. Further, theThe U.S. administration has implemented and could implement further broad-based global tariffs that could adversely impact trade relations and result in higher costs.The final timing and amount of tariffTariff ratescontinuescontinue to evolve and therefore the impact, including those of any potential retaliatory tariffs, is difficult to forecast. International conflict has contributed to (i) increased pressure on the supply chain andcould further result inincreased energy and fuel costs, which could increase the cost of manufacturing, selling and delivering products and solutions (ii) inflation, which could result in increases in the cost of manufacturing products, reduced customer purchasing power, increased price pressure, and reduced or cancelled orders (iii)increasedincreasesrisk ofin cybersecurity attacks and (iv) general market instability, all of which could adversely impact our financial results.
“•changes in macroeconomic conditions, interest rates, inflation, tariffs, geopolitical events or supply chain disruptions;”see in full comparison
“Trade tensions between the U.S. and China have continued to escalate, with the U.S. and China both imposing a variety of trade barriers against the other, including various export control restrictions and tariffs.”see in full comparison
•Changing market and economic conditions, including impacts due to tariffs, economic sanctions and export restrictions, the ongoingsee in full comparisonconflictconflicts between Russia andUkraine,Ukraineconflictand in the Middle East, ongoing and expanding economic sanctions, political instability and economic uncertainty in the Middle East, tensions and trade sanctions between the U.S. and China, supply chain constraints, pricing and inflationary pressures;
“Our stock price has experienced significant volatility and may continue to fluctuate, which could adversely affect the value of an investment in our common stock.”see in full comparison
Moreover, the additional tariffssee in full comparisonannouncedimposed by the U.S. administration in2025,2025 (and, following the U.S. Supreme Court striking down such tariffs as unconstitutional, the temporary replacement tariffs imposed in 2026), and any other tariffs or other trade actions that may beimplemented,implemented targeting China or other jurisdictions relevant to VIAVI, may increase the cost of certain materials and/or products, thereby adversely affecting our profitability. These actions could require us to pass these costs to our customers, which could decrease demand for our products, and could adversely impact our business.
Full comparison: every changed paragraph (39)
We operate globally and sell our products in countries throughout the world. Recent escalationEscalations in regional conflicts, including the Russianongoing invasionconflicts ofbetween Ukraine,Russia resultingand Ukraine and in the Middle East, ongoing and expanding economic sanctions, conflictpolitical instability and economic uncertainty in the Middle East, and the risk of increased tensions between the U.S. and China, could curtail or prohibit our ability to transfer certain technologies, to sell our products and solutions, or to continue to operate in certain locations. Foreign companies with a presence in China are facing increasing operational challenges and enhanced scrutiny from governmental entities in the region. Further, it is possible that the U.S.-Chinese geopolitical tensions could result in government measures that could adversely impact our business. In September 2023, a bill was introduced by the House Financial Services Committee that would authorize sanctions on certain Chinese entities in China’s defense and surveillance technology sectors. This could have an adverse impact on our revenues in this region. Further, theThe U.S. administration has implemented and could implement further broad-based global tariffs that could adversely impact trade relations and result in higher costs. The final timing and amount of tariffTariff rates continuescontinue to evolve and therefore the impact, including those of any potential retaliatory tariffs, is difficult to forecast. International conflict has contributed to (i) increased pressure on the supply chain and could further result in increased energy and fuel costs, which could increase the cost of manufacturing, selling and delivering products and solutions (ii) inflation, which could result in increases in the cost of manufacturing products, reduced customer purchasing power, increased price pressure, and reduced or cancelled orders (iii) increasedincreases risk ofin cybersecurity attacks and (iv) general market instability, all of which could adversely impact our financial results.
•LimitedLonger availabilitylead oftimes for components and resources for our productsproducts, for example, recent memory chip shortages which leads to higher component prices;
•Changing market and economic conditions, including impacts due to tariffs, economic sanctions and export restrictions, the ongoing conflictconflicts between Russia and Ukraine,Ukraine conflictand in the Middle East, ongoing and expanding economic sanctions, political instability and economic uncertainty in the Middle East, tensions and trade sanctions between the U.S. and China, supply chain constraints, pricing and inflationary pressures;
•A limited number of customers may account for a substantial portion of our revenue in any given period and our operating results may be adversely affected by the timing, size, and concentration of large customer orders, including orders from government entities;
•The impact of any prolonged government shutdown on our business, particularly in the aerospace and defense sectors, along with any governmental actions impacting the defense sector;
VIAVI is subject to risks associated with its recent and proposed acquisitions, including completion of proposed acquisitions in the anticipated timeframes or at all, and any failure to realize anticipated benefits of such acquisitions.
In January 2025, VIAVI completed the acquisition of Inertial Labs, Inc. (the Inertial Labs Acquisition). VIAVI also previously announced its proposed acquisition of Spirent Communications plc’s (Spirent) high-speed ethernet and network security business lines from Keysight Technologies, Inc., (the Proposed Acquisition), which is currently estimated to close by the end of September 2025, subject to customary closing conditions. VIAVI is subject to risks and uncertainties associated with the Proposed Acquisition, including the risk that a condition to closing may not be satisfied or waived, the possibility of failure to obtain any outstanding necessary regulatory approvals, which may be outside the control of VIAVI or Keysight Technologies, Inc., or the possibility that the Proposed Acquisition does not close in the anticipated timeframe or at all.
VIAVI may not be able to realize the anticipated benefits of theany Inertial Labs Acquisitioncompleted or thecontemplated Proposedacquisitions Acquisition,and strategic transactions, including synergies, value creation or other benefits of such acquisitions, fully or at all, or on the timeline VIAVI expects. At times, the resources of VIAVI and the acquired businesses or the attention of certain members of their management may be focused on completion and integration of the acquisition and diverted from day-to-day business operations, which may disrupt ongoing business. In addition, the process of integratingintegrating, and any failure to successfully integrate, the acquired businesses may have an adverse impact on the Company, including from risks related to significant transaction and integration costs, unknown liabilities, employee turnover, divergence of management attention, litigation and/or regulatory actions related to the acquisition or if the acquired business does not perform as expected, which may cause an adverse financial impact on the Company.
•Strained or worsening relations between the U.S., RussiaRussia, China and Chinathe Middle East and related impacts on other countries;
GlobalInternational conflicts and global and regional health pandemics have affected and may in the future affect the manufacturing and shipment of goods globally. Any delay in production or delivery of our products due to an extended closure of our suppliers’ plants could adversely impact our business, along with delays in shipment of our products as well as increased logistics costs.
Similarly, GenAI technology hasand, more recently, Agentic AI have proliferated including as a feature in existing commercially available products, some of which we use. GenAI is a type of machine-learning model capable of generating various types of content, including data, text and images. Agentic AI refers to autonomous or semi-autonomous AI systems that can reason, plan, and take actions to achieve complex, multi-step goals with minimal human supervision. Use of GenAIthese tools could expose us to data and network security risks. These risks include the exposure of our intellectual property, confidential and proprietary information (including customer information) to unknown recipients; the introduction of malware into our network; and the creation of content subject to copyright, trademark, or other intellectual property protection of an unknown third party.
Furthermore, AI, including those used by us or our vendors are subject to evolving laws and regulations and increased scrutiny, including with respect to data privacy, cybersecurity and intellectual property. Any legislation or regulatory requirements concerning AI adopted domestically or globally may require us to expend significant resources to comply, or require changes to our products, services, or business practices, or prevent or limit our use of AI.
Trade tensions between the U.S. and China have continued to escalate, with the U.S. and China both imposing a variety of trade barriers against the other, including various export control restrictions and tariffs.
The U.S. and China have been engaged in protracted negotiations over the Chinese government’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.
Huawei Technologies Co. Ltd. and a score of non-U.S. affiliates (collectively, Huawei) are on the Entity List of the Bureau of Industry and Security of the U.S. Department of Commerce (BIS), which imposes limitations on the supply of certainmost U.S. items and product support to Huawei. BISU.S. issuedexport finalcontrols rules that furtheralso restrict accessall bypersons Huaweifrom tosharing many items produced domestically and abroad from U.S. technology and software.software with Huawei. Certain VIAVI products of VIAVI are subject to the restrictions; however, the ongoing impact is not expected to be material to our overall operations.restrictions.
Additionally, the BIS "Affiliates Rule" (50% Rule) automatically extends export restrictions to any non-U.S. entity owned 50% or more (directly or indirectly) by restricted parties. It is currently suspended until November 9, 2026, after which it will permanently reimpose strict compliance and licensing obligations on global supply chains. The BIS Affiliates Rule represents a significant shift in export compliance expectations. Historically, Entity List and Military End-User (MEU) List screening focused primarily on identifying parties that were expressly named on a BIS restricted party list. Under the Affiliates Rule, companies must also assess whether a counterparty is owned, directly or indirectly, by listed entities. If the rule is reinstated, VIAVI will have to perform enhanced due diligence and beneficial ownership screenings and it could further impact our business with Huawei and potentially other customers.
Moreover, the additional tariffs announcedimposed by the U.S. administration in 2025,2025 (and, following the U.S. Supreme Court striking down such tariffs as unconstitutional, the temporary replacement tariffs imposed in 2026), and any other tariffs or other trade actions that may be implemented,implemented targeting China or other jurisdictions relevant to VIAVI, may increase the cost of certain materials and/or products, thereby adversely affecting our profitability. These actions could require us to pass these costs to our customers, which could decrease demand for our products, and could adversely impact our business.
Due to the ongoing conflict between Russia and Ukraine, the U.S., European Union (E.U.), and United Kingdom (U.K.) have broadened restrictions on supply to Russia,Russia therebyof blockingvarious items, including shipments of many technology, telecommunications and consumer electronics products to Russia.products. We suspended transactions in the region effective February 2022 which negatively impacted our business in the region. The ongoing situation in Ukraine as well as the potential for additional trade actions or retaliatory cyber-attacks aimed at infrastructure or supply chains, could have an impact on our future operations and financial results.
Global economic conditions have caused and may cause volatility and disruptions in the capital and credit markets. When the capital or credit markets deteriorate or are disrupted, our ability to incur additional indebtedness to fund a portion of our working capital needs and other general corporate purposes, or to refinance maturing obligations as they become due, may be constrained. In the event that we were to seek to access the capital markets or other sources of financing, there can be no assurance that we will be able to obtain financing on acceptable terms or within an acceptable time, if at all. We may seek to access the capital or credit markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. For example, in December 2021, we entered into a $300 million asset-based secured credit facility (Senior Secured Asset-Based Revolving Credit Facility), maturing in December 2026, which has certain limitations based on our borrowing base capacity. The Company is currently considering reducingreduced the commitment under the Senior Secured Asset-Based Revolving Credit Facility to $200 million to be in line with borrowing base capacity and extendextended the maturity.maturity to October 2030. Our access to the financial markets and the pricing and terms we receive in the financial markets could be adversely impacted by various factors, including changes in financial markets and interest rates. In addition, if we do access the capital or credit markets, agreements governing any borrowing arrangement could contain covenants restricting our operations.
We and our subsidiaries may be able to incur significant additional indebtedness in the future. The indentures that govern the Notes and the agreements that govern our secured credit facility contain restrictions on the incurrence of additional indebtedness, which are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness under the agreements governing our existing debt.
Our term notes increasedincrease our overall leverage and our convertible notes could dilute our existing stockholders and lower our reported earnings per share.
The issuance of our 1.625% Senior Convertible Notes due 2026 and our 3.75% Senior Notes due 2029 and our 0.625% Senior Convertible Notes due 2031 (together the “Notes”) substantially increased our principal payment obligations. The degree to which we are leveraged could materially and adversely affect our ability to successfully obtain financing for working capital, acquisitions or other purposes and could make us more vulnerable to industry downturns and competitive pressures. In addition, the holders of the 20262031 Notes are entitled to convert the Notes into shares of our common stock or a combination of cash and shares of common stock under certain circumstances which would dilute our existing stockholders and lower our reported per share earnings.
•Resulting in an event of default if we fail to satisfy our obligations under the Notes or our other debt or fail to comply with the financial and other restrictive covenants contained in the indentures governing the Notes,Notes or any other debt instruments, which event of defaultdefault, if not cured or waived, could result in all of our debt becoming immediately due and payable and could permit certain of our lenders to foreclose on our assets securing such debt. This could have a material adverse effect on our business, operating results or financial condition.
We and our subsidiaries may be able to incur significant additional indebtedness in the future. The indentures that govern the Notes and the agreement that governs our secured credit facility contain restrictions on the incurrence of additional indebtedness, which are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness under the agreements governing our existing debt. For example, in March 2025, we obtained commitments for a $425 million 7-year term loan facility the proceeds of which would be available, subject to customary conditions, in connection with our pending acquisition of Spirent’s high-speed ethernet and network security business from Keysight Technologies, Inc. We subsequently marketed and upsized to a $600 million 7-year term loan facility and successfully allocated the loan to prospective lenders at an initial interest rate of SOFR+2.50% and an original issue price of 99.75%. The incremental $175 million is intended for general corporate purposes. The term loan funding, as upsized, remains subject to customary closing conditions and the satisfaction or waiver of all closing conditions to the pending acquisition.
The terms of the indentures that govern the Notes and the agreementagreements that governsgovern our secured credit facility restrict our current and future operations.
The indentures governing the Notes and the agreementagreements governing the secured credit facility contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to:
In June 2025, the United States and the G7 countries announced an agreement in principle to modify the Pillar Two rules. Under this agreement, the foreign and domestic profits of U.S.-parented groups would be excluded from Pillar Two’s undertaxed profit rule and income inclusion rule. In exchange, the U.S. withdrew the Section 899 tax provision from the One Big Beautiful Bill Act (OBBBA), which had imposed a retaliatory tax on individuals and entities from countries that implement certain "unfair foreign taxes" against U.S. companies or citizens. The G7-USG7-U.S. agreement has not yet been enacted into law, and we continue to evaluate our Pillar Two position based on legislation currently in force. We will monitor tax developments for any future implications with respect to our tax burden, net income, and cash flow.
Our stock price has experienced significant volatility and may continue to fluctuate, which could adversely affect the value of an investment in our common stock.
The trading price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
•actual or anticipated fluctuations in our financial results or guidance;
•the timing and magnitude of customer orders, particularly in our data center, telecommunications, aerospace and defense end markets;
•our ability to successfully integrate acquired businesses and realize anticipated synergies;
•changes in investor sentiment regarding AI infrastructure spending, cloud investment cycles, optical networking, or defense spending;
•changes in analyst estimates, recommendations or coverage;
•announcements by us or our competitors regarding new products, technologies, acquisitions, strategic relationships or other developments;
•changes in macroeconomic conditions, interest rates, inflation, tariffs, geopolitical events or supply chain disruptions;
•general market conditions affecting technology companies or equity markets more broadly; and
•sales of our common stock by existing stockholders or perceptions that such sales may occur.
In addition, securities of technology companies have historically experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to their operating performance. As investor expectations surrounding AI infrastructure, high-speed networking and related technologies evolve, our stock price may experience increased volatility as market participants reassess growth prospects for our business and the broader industry. Even if our operating results meet our expectations, our stock price may decline if investors perceive that our future growth opportunities have moderated or if valuations across the technology sector contract.
Management's Discussion & Analysis (MD&A)
New heading “Loss on Debt Extinguishment”
New heading “Off-Balance Sheet Arrangements”
New heading “Employee Equity Incentive Plan”
Removed heading “Proposed Acquisition”
Removed heading “Loss on Convertible Note Modification”
Largest changes
“The global tariff environment continues to evolve, and these tariffs, as well as any other tariffs or other trade actions affecting China or other jurisdictions relevant to VIAVI, may increase the cost of certain materials and/or products, thereby adversely affecting our profitability. We continue to take actions to optimize our supply chain, control costs and implement pricing actions to mitigate the impact of evolving tariff policies.”see in full comparison
“We do not have any off-balance sheet arrangements, as such term is defined in rules promulgated by the SEC, that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors, other than the guarantees discussed in “Note 18. Commitments and Contingencies” under Item 8 of this Annual Report on Form 10-K for more information.”see in full comparison
“The restructuring and workforce reduction plan, initiated in the second quarter of fiscal 2023 (the Fiscal 2023 Plan) across various functions to better align the Company’s workforce with current business needs and strategic growth opportunities, was completed during fiscal 2025. The Fiscal 2023 Plan affected approximately 5% of the Company's workforce and resulted in an estimated annualized gross cost savings of approximately $25.0 million excluding any one-time charges.”see in full comparison
“The U.S. administration has implemented and could implement further broad-based, updated global tariffs and the situation continues to be dynamic and evolving. As we operate in this challenging environment, we are focused on continuing to deliver our products and services to our customers. Given our global business, tariffs will result in additional cost for us and our suppliers. We are analyzing ways to optimize our operations and supply chain strategies, control costs and implement pricing actions to reduce the impact from tariffs.”see in full comparison
“Accounting for business combinations requires significant judgment in determining the estimated fair values assigned to identifiable assets acquired and liabilities assumed. The valuation of acquired identifiable intangible assets is inherently subjective and requires management to make estimates regarding future operating results and market participant assumptions. Significant assumptions used in valuing customer relationships include projected revenues, projected expenses, contributory asset charges, discount rate, income tax rate and customer attrition rate. …”see in full comparison
Full comparison: every changed paragraph (96)
The following discussion and analysis summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and capital resources during the period ended June 28,27, 2025.2026. Unless otherwise noted, all references herein for the years 2025,2026, 20242025 and 20232024 represent the fiscal years ended June 27, 2026, June 28, 2025,2025 and June 29, 2024 and July 1, 2023,2024, respectively. We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from year-to-year and the primary factors that accounted for those changes, as well as how certain accounting estimates affect our financial statements. Factors that could cause or contribute to these differences include those discussed below and in this Annual Report on Form 10-K, particularly in “Risk Factors” and “Forward-Looking Statements.”
VIAVI is a global leader in test and measurement and optical technologies. Our test and measurement, and resilient position, navigation and timing solutions enable and secure critical infrastructure ranging from data center ecosystems and communication networks to military, aerospace, railway and first responder communications. In addition, we develop and advance technologies used in high-volume optical applications across anti-counterfeiting, consumer electronics, aerospace, industrial and automotive end markets.
VIAVI is a global provider of network test, monitoring and assurance solutions for telecommunications, cloud, enterprises, first responders, military, aerospace and critical infrastructure. VIAVI is also a leader in optical processing technologies for anti-counterfeiting, 3D sensing, aerospace, automotive and industrial applications.
During fiscal 2026, NSE revenue growth was mainly a result of strong demand for lab and production and field products, driven by the data center ecosystem and our acquisition of Spirent Communications plc’s (Spirent) high-speed ethernet, network security and channel emulation testing business (collectively, the HSE and CE business) as well as demand for our aerospace and defense products. OSP performance improved year-over-year driven by anti-counterfeiting and other products, which include government, industrial and automotive end markets products and 3D sensing.
Effective March 30, 2025, the Company realigned its segment reporting structure. As a result, the company’s Network Enablement (NE) and Service Enablement (SE) business activities are now reported as a single operating and reportable segment, NSE. Recent acquisitions have reduced the SE segment revenue as a percentage of total VIAVI revenue. In addition, NE and SE are managed under common leadership, share many of the same customers and suppliers and operating expenses associated with the NSE business are not exclusively allocated to either NE or SE.
During fiscal 2025, NSE revenue growth was mainly driven by strong demand primarily from the data center ecosystem for field, lab and production products for fiber and data center buildouts. We also saw growth in our aerospace and defense products. This was partially offset by a decline in spend for wireless and cable products by network equipment manufacturers (NEMs) and service providers. OSP performance slightly improved year-over-year with growth in our Anti-Counterfeiting and Other products as the industry’s inventory levels normalized.
Proposed Acquisition
On March 2, 2025, the Company entered into a purchase agreement to acquire Spirent Communications plc’s (Spirent) high-speed ethernet and network security business lines and subsequently amended the agreement on May 28, 2025 to also purchase Spirent’s channel emulation testing business (collectively, the HSE, network security and CE businesses) from Keysight Technologies, Inc. for our NSE segment. The total purchase consideration of $425 million will be paid at closing, subject to customary closing adjustments and conditions. The Company expects to fund this transaction with proceeds from a Term Loan B. The consummation of the acquisition is conditioned on regulatory approvals and is currently estimated to close by the end of September 2025.
During the fourth quarter, we successfully priced and allocated the $600 million Term Loan B which will be used to fund the transaction at close and for general corporate purposes. The Term Loan B will close concurrently with the transaction.
As we look forward to fiscal 2026,2027, we expect to continue to see stabilization and growth in many of our traditional businesses. Our long-term focus remains on executing against our strategic priorities to drive revenue and earnings growth, capture market share and continue to optimize our capital structure. We remain positive on our long-term growth drivers and will continue to focus on executing our strategic priorities over the long-term to:
In 2025, the U.S. administration imposed additional broad-based tariffs under the International Emergency Economic Powers Act (IEEPA). In February 2026, the U.S. Supreme Court ruled that IEEPA did not authorize those tariffs, after which the administration imposed temporary replacement tariffs.
As of June 27, 2026, the Company had paid approximately $22.4 million of IEEPA tariffs and had received and recognized approximately $1.5 million of refunds related to eligible IEEPA tariffs. Subsequent to June 27, 2026, the Company received approximately $11.0 million of additional refunds, comprised primarily of tariff refunds and related statutory interest associated with previously submitted IEEPA refund claims, which were not recognized as of June 27, 2026 because the recognition criteria for contingent gains had not been met as of the balance sheet date.
The global tariff environment continues to evolve, and these tariffs, as well as any other tariffs or other trade actions affecting China or other jurisdictions relevant to VIAVI, may increase the cost of certain materials and/or products, thereby adversely affecting our profitability. We continue to take actions to optimize our supply chain, control costs and implement pricing actions to mitigate the impact of evolving tariff policies.
The U.S. administration has implemented and could implement further broad-based, updated global tariffs and the situation continues to be dynamic and evolving. As we operate in this challenging environment, we are focused on continuing to deliver our products and services to our customers. Given our global business, tariffs will result in additional cost for us and our suppliers. We are analyzing ways to optimize our operations and supply chain strategies, control costs and implement pricing actions to reduce the impact from tariffs.
•GAAP diluted EPS of $0.15,$(0.13), updown $0.27$0.28 or 225.0%186.7% year-over-year
•Non-GAAP diluted EPS of $0.47,$1.00, up $0.14$0.53 or 42.4%112.8% year-over-year In fiscal 2025,2026, VIAVI begancontinued to experience stabilization and growthgrow across many of our product segments. Net revenue of $1.08$1.5 billion was up $83.9$434.0 million compared to fiscal 2024,2025, primarily from strong demand for lab and production and field products, driven by the data center ecosystemecosystem, forour field,acquisition labof Spirent’s HSE and productionCE products for fiber and data center buildouts,business as well as growthdemand infor our aerospace and defense products, which was partially offset by a decline in spend by NEMs and service providers for wireless and cable products. Our acquisitionacquisitions of Spirent’s HSE and CE business and Inertial Labs contributed $25.2$145.0 million and $86.1 million, respectively, of net revenue in fiscal 2025.2026. OSP performance slightly improved year-over-year withdriven growthby in our Anti-Counterfeitinganti-counterfeiting and Otherother products.products and 3D sensing.
GAAP diluted EPS of $(0.13) decreased $0.28 from fiscal 2025 primarily due to the loss on debt extinguishments in fiscal 2026 and a $25.0 million release of valuation allowance related to our acquisition of Inertial Labs in fiscal 2025. Non-GAAP diluted EPS of $1.00 increased $0.53 from fiscal 2025 due primarily to the increase in revenue.
GAAP diluted EPS of $0.15 increased $0.27 from fiscal 2024 primarily due to the increase in revenue. Non-GAAP diluted EPS of $0.47 increased $0.14 from fiscal 2024 also due to the increase in revenue.
In fiscal 2025,2026, we generated $89.8$113.9 million in operating cash flow and deployed $27.8$31.1 million or 2.6%2.0% of revenue towards capital expenditures. We also expended $121.7$399.3 million towards the acquisition of InertialSpirent’s LabsHSE and repurchasedCE 2.0business and issued 12.8 million shares of our common stock pursuant to an underwritten public offering for $16.4net proceeds of $557.1 million.
Beginning in the fourth quarter of fiscal 2026, the Company modified its non-GAAP presentation to exclude employer payroll taxes related to stock-based compensation. Consistent with this modification, employer payroll taxes related to stock-based compensation are no longer allocated to the Company's segment results. Prior-period non-GAAP financial measures and segment results have been recast to conform to the current presentation. Management believes excluding employer payroll taxes related to stock-based compensation aligns the treatment of these taxes, which are highly variable, with the underlying stock-based compensation expense and provides a more consistent measure of operating performance. Accordingly, this modification is intended to enhance investors’ understanding of the Company’s operating performance. These changes have no impact on any of the Company’s previously reported U.S. GAAP results.
(1) Included in the year ended June 28,27, 2026 are $4.8 million of losses on disposal of long-lived assets, $2.1 million charge for restoration services for a VIAVI facility impacted by a fire, $0.4 million of accelerated depreciation and other charges unrelated to core operating performance. Included in the year ended June 27, 2025 is a gain of $0.9 million on the sale of assets previously classified as held for sale and other charges unrelated to core operating performance of $2.2 million.performance.
(2) The Company incurred a loss of $56.7 million for the year ended June 27, 2026 in connection with the extinguishment of certain 1.625% Senior Convertible Notes and prepayments of the Term Loan B.
The Company provides non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP EPS financial measures as supplemental information regarding the Company’s operational performance and believes providing this additional information allows investors to see Company results through the eyes of management, and better to evaluate more clearly and consistently the Company’s core operational performance and expenses and evaluate the efficacy of the methodology used by management to measure such performance. The Company uses the measures disclosed in this Annual Report on Form 10-K to evaluate the Company’s historical and prospective financial performance, as well as its performance relative to its competitors. Specifically, management uses these items to further its own understanding of the Company’s core operating performance, which the Company believes represents its performance in the ordinary, ongoing and customary course of its operations. Accordingly, management excludes from core operating performance items such as those relating to certain purchase price accounting adjustments, amortization of acquisition related intangibles, amortization expense related to acquisition related inventory step-up, stock-based compensation, legal settlements, restructuring, changes in fair value of contingent consideration liabilities, certain investing and acquisition related expenses and other activities and income tax expenses or benefits that management believes are not reflective of such ordinary, ongoing and core operating activities. The non-GAAP adjustments are outlined below.
Cost of revenues, costs of research and development and costs of selling, general and administrative: The Company’s GAAP presentation of gross margin and operating expenses may include (i) additional depreciation and amortization from changes in estimated useful life and the write-down of certain property, plant and equipment and intangibles, (ii) charges such as severance, benefits and outplacement costs related to restructuring plans with a specific and defined term, (iii) costs for facilities not required for ongoing operations, and costs related to the relocation of certain equipment from these facilities and/or contract manufacturer facilities, (iv) stock-based compensation, including related employer payroll taxes, (v) amortization expense related to acquired intangibles, (vi) amortization expense related to acquisition related inventory step-up, (vii) changes in fair value of contingent consideration liabilities, (viii) acquisition related transaction and integration costs related to acquired entities, (ix) litigation andsignificant legal settlements and other contingencies and (x) other charges unrelated to our core operating performance comprised mainly of other costs and contingencies unrelated to current and future operations, including transformational initiatives such as the implementation of simplified automated processes, site consolidations and reorganizations. The Company excludes these items in calculating non-GAAP operating margin, non-GAAP net income and non-GAAP EPS.
Non-cash interest expense and other expense: The Company excludes certain investingnon-cash interest and other expenses, including loss on debt extinguishment, accretion of debt discount, and other non-cash activities that management believes are not reflective of such ordinary, ongoing and core operating activities, when calculating non-GAAP net income and non-GAAP EPS.
This section of this Annual Report on Form 10-K generally discusses the results of operations for the fiscal years ended June 28,27, 20252026 and June 29,28, 20242025 and year-to-year comparisons between such fiscal years. Discussions of the year-to-year comparisons between the fiscal years ended June 29,28, 20242025 and JulyJune 1,29, 2023,2024, that are not included in this Annual Report on Form 10-K, can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended June 29,28, 2024.2025.
The Results of Operations are presented in accordance with U.S. GAAP and not using constant dollars. If currency exchange rates had been constant in fiscal 20252026 and 2024,2025, our consolidated net revenue in “constant dollars” would have increased from fiscal 2024 to fiscal 2025decreased by an additional $3.3$10.4 million, or 0.3%0.7% of net revenue,revenue for fiscal 2026, which primarily impacted our NSE segment. The impact of foreign currency fluctuations on net revenue was not indicative of the impact on net income due to the offsetting foreign currency impact on operating costs and expenses. If currency exchange rates had been constant in fiscal 20252026 and 2024,2025, our consolidated operating expenses in “constant dollars” would have increaseddecreased fromby $10.8 million for fiscal 2024 to fiscal 2025 by an additional $0.1 million.2026.
Net revenue increased $83.9$434.0 million, or 8.4%,40.0%, during fiscal 20252026 when compared to fiscal 2024.2025. This increase was primarily from thestrong data center ecosystemdemand for field, lab and production productsand forfield fiberproducts, anddriven by the data center buildouts,ecosystem, our acquisition of Spirent’s HSE and CE business as well as growthdemand infor our aerospace and defense products ($25.2 million contributed by our acquisition of Inertial Labs),products, which was partially offset by a decline in spend by NEMs and service providers for wireless products. Our acquisition of Spirent’s HSE and cableCE products.business contributed $145.0 million of net revenue in fiscal 2026 and Inertial Labs contributed $86.1 million of net revenue in fiscal 2026. OSP performance slightly improved year-over-year driven by Anti-Counterfeitinganti-counterfeiting and Otherother products.products and 3D sensing.
Going forward, we expect to continue to encounter a number of industry and market risks and uncertainties. For example, uncertainty around the timing of our customers’ procurement decisions on infrastructure maintenance and upgrades and decisions on new infrastructure investments or uncertainty about speed of adoption of 5G technology at a commercially viable scale. This may limit our visibility, and consequently, our ability to predict future revenue, seasonality, profitability and general financial performance, which could create period-over-period variability in our financial measures and present foreign exchange rate risks. The recent globalGlobal tariffs implemented could increase our costs and impact our business.
Net revenue from customers outside the Americas for fiscal 2025,2026, represented 60.8%55.0% of net revenue, a decrease of 0.15.8 percentage points year-over-year. We expect revenue from customers outside of the United States to continue to be an important part of our overall net revenue and an increasinga focus for net revenue growth opportunities.
Amortization of acquired technologies within Cost of revenues for fiscal 20252026 increased $5.7$25.9 million, or 41.3%,132.8%, to $19.5$45.4 million from $13.8$19.5 million in fiscal 2024.2025. This increase is primarily due to the amortization of intangibles acquired through Spirent’s HSE and CE business of $19.1 million and $8.9 million higher amortization for Inertial Labs, partially offset by certain intangibles becoming fully amortized.
Gross margin in fiscal 20252026 declinedincreased 0.30.4 percentage points to 57.3%57.7% from 57.6%57.3% in fiscal 2024.2025. This decreaseincrease was primarily driven by the increase in amortization of intangibles and amortization of acquisition related inventory step-up, partially offset by higher volume and favorable product mix.mix offset by an increase in amortization of intangibles.
Research and Development (R&D) expense increased $6.8$54.0 million, or 3.4%,25.9%, during fiscal 20252026 compared to fiscal 2024.2025. This increase was primarily due to higher variable expenses and incremental cost from the acquisition of InertialSpirent’s Labs,HSE partiallyand offsetCE bybusiness of $30.4 million, higher variable expenses and a one-timefull R&Dyear taxof creditexpense catch-up.for Inertial Labs. As a percentage of net revenue, R&D expense decreased 0.92.0 percentage points during fiscal 20252026 when compared to fiscal 2024.2025.
Selling, General and Administrative (SG&A) expense increased $16.1$119.8 million, or 4.8%,34.3%, in fiscal 20252026 compared to fiscal 2024.2025. This increase was primarily due to the change in fair value of acquisition related contingent consideration of $41.3 million, the incremental cost from the acquisition of Spirent’s HSE and CE business of $28.6 million, higher variable expenses, higher acquisitionexpenses and integrationa relatedfull chargesyear andof higherexpense stock-basedfor compensation.Inertial Labs. As a percentage of net revenue, SG&A decreased 1.11.3 percentage points in fiscal 20252026 when compared to 2024.2025.
Amortization of intangibles within Operating expenses for fiscal 20252026 decreasedincreased $1.5$17.7 million, or 23.8%,368.8%, to $4.8$22.5 million from $6.3$4.8 million in fiscal 2024.2025. This decreaseincrease is primarily due to certain intangible assets becoming fully amortized, partially offset bythe amortization of intangibles acquired through Spirent’s HSE and CE business of $17.2 million and $2.6 million higher amortization for Inertial Labs.Labs, partially offset by certain intangibles becoming fully amortized.
During the fourththird quarter of fiscal 2024,2026, management approved a restructuring and workforce reduction plan (the Fiscal 20242026 Plan) across variousour NSE and OSP segments and Corporate functions intended to improve operational efficiencies andefficiencies, better align the Company’s workforce with current business needs.needs and strategic growth opportunities and includes integration of recently acquired businesses. The Fiscal 2026 Plan includes a global workforce reduction, facilities rationalization and asset write-offs. The Company expects approximately 7%5% of its global workforce to be affected, impacting both segments and corporate functions.affected. We estimate annualized gross cost savings of approximately $25.0$30.0 million upon completion of the Fiscal 2026 plan, excluding any one-time chargescharges, as a result of the restructuring activities initiated under the Fiscal 2024 Plan.activities. The Company anticipates the Fiscal 20242026 Plan to be substantially complete by the end of thecalendar second quarter of fiscalyear 2026.
TheDuring the fourth quarter of fiscal 2024, management approved a restructuring and workforce reduction plan, initiated in the second quarter of fiscal 2023plan (the Fiscal 20232024 Plan) across various functions intended to improve operational efficiencies and better align the Company’s workforce with current business needs and strategic growth opportunities, was completed in the first quarter of fiscal 2025.needs. The Fiscal 20232024 Plan affected approximately 5%7% of theits Company'sglobal workforce and resulted in an estimated annualized gross cost savings of approximately $25.0 million excluding any one-time charges. The Fiscal 2024 Plan was completed during fiscal 2026.
The restructuring and workforce reduction plan, initiated in the second quarter of fiscal 2023 (the Fiscal 2023 Plan) across various functions to better align the Company’s workforce with current business needs and strategic growth opportunities, was completed during fiscal 2025. The Fiscal 2023 Plan affected approximately 5% of the Company's workforce and resulted in an estimated annualized gross cost savings of approximately $25.0 million excluding any one-time charges.
As of June 28,27, 2025,2026, our total restructuring accrual was $3.5$6.5 million. During fiscal 2026, we recorded restructuring charges of $16.4 million related to the Fiscal 2026 Plan and a benefit of $0.5 million related to the Fiscal 2024 Plan. During fiscal 2025, we recorded restructuring charges of $0.9 million related to the Fiscal 2024 Plan and a benefit of $0.2 million related to the Fiscal 2023 Plan. During fiscal 2024, we recorded restructuring charges of $14.8 million related to the Fiscal 2024 Plan and a benefit of $1.2 million related to the Fiscal 2023 Plan. During fiscal 2023, we recorded restructuring charges of $12.1 million related to the Fiscal 2023 Plan. Restructuring charges consisting of severance, benefit and outplacement costs were recorded to the Restructuring and related charges line within our Consolidated Statements of Operations.
Loss on Debt Extinguishment
During fiscal 2026, the Company prepaid the entire $600.0 million under the Term Loan Credit Agreement resulting in the loan being fully repaid. The prepayments were accounted for as extinguishments, with the carrying amount of the debt prepaid, including the unamortized debt issuance costs, derecognized, and any difference between the reacquisition price and the carrying amount recognized as a loss on debt extinguishment. The total loss from the prepayments was $14.2 million recorded as Loss on debt extinguishment in the Consolidated Statements of Operations. The Company also entered into separate privately-negotiated agreements with certain holders of its 1.625% Senior Convertible Notes due 2026 (2026 Notes). The Company issued 7.9 million shares of its common stock for $103.5 million principal amount of the 2026 Notes in December 2025. The Company also issued $100.9 million aggregate principal amount of its 0.625% Senior Convertible Notes due 2031 (2031 Notes) to certain holders of the 2026 Notes in exchange for $97.5 million principal amount of the 2026 Notes in August 2025. These 2026 Notes exchange transactions were accounted for as extinguishments which resulted in the write-off of unamortized debt discount and issuance costs of $1.6 million on the extinguished notes. Accrued interest of $0.7 million on the 2026 Notes was included in the exchange for the 2031 Notes. The total loss from these extinguishments was $56.7 million recorded as Loss on debt extinguishment in the Consolidated Statements of Operations.
Loss on Convertible Note Modification
During fiscal 2023, the Company exchanged $127.5 million principal value of its 1.00% Senior Convertible Notes due 2024 for $132.0 million principal value of its 1.625% Senior Convertible Notes due 2026 and issued $118.0 million principal value of its 1.625% Senior Convertible Notes due 2026 for cash. The Company incurred $4.2 million of issuance costs related to this exchange, of which $2.2 million of the issuance costs were recorded as Loss on convertible note modification in the Consolidated Statements of Operations. The remaining issuance costs of $2.0 million were capitalized within Long-term debt (as a contra-balance) on the Consolidated Balance Sheets and are being amortized as an adjustment to interest expense on a straight-line basis until maturity.
Interest and other income, net was $15.3 million in fiscal 2026 as compared to $11.1 million in fiscal 2025. This $4.2 million increase was primarily driven by an increase in other income related to an adjustment to a financing obligation and an increase in interest income due to higher cash balance, partially offset by an unfavorable foreign exchange impact as the balance sheet hedging program provided a less favorable offset to the remeasurement of underlying foreign exchange exposures during the current period.
Interest and other income, net was $11.1 million in fiscal 2025 as compared to $21.7 million in fiscal 2024. This $10.6 million decrease was primarily driven by a legal settlement in our favor in the amount of $7.3 million in fiscal 2024 and a decrease in interest income due to lower cash balances and lower yields compared to fiscal 2024.
Interest expense increased $17.4 million, or 58.0%, during fiscal 2026 compared to fiscal 2025. This increase was primarily a result of higher outstanding debt with higher average interest rates as a result of the issuance of Term Loan B and additional amortization of debt issuance costs in the current period, partially offset by a decrease in the accretion of debt discount on the 2026 Notes as a result of the debt extinguishments as well as settlement at maturity during the current period.
Interest expense decreased $0.9 million, or 2.9%, during fiscal 2025 compared to fiscal 2024. This decrease was primarily driven by lower outstanding debt when compared to fiscal 2024.
We recorded an income tax provision of $4.4$47.5 million for fiscal 2025.2026. The expected tax provision derived by applying the federal statutory rate to our income before income taxes for fiscal 20252026 differed from the income tax expense recorded primarily due to valuation allowances in addition toallowance, withholding taxes, foreign tax rates higherthat thandiffer from the federal statutory rate and the U.S. inclusion of foreign earnings.
Based on a jurisdiction-by-jurisdiction review of anticipated future income and due to the continued economic uncertainty in the industry, management has determined that in the U.S., it is more likely than not that our net deferred tax assets will not be realized. During fiscal 2025,2026, the valuation allowance for deferred tax assets decreased by $69.7$27.4 million, which was primarily due to thea increasereduction in theour deferred tax liabilityassets that resultedresulting from the acquisition of Inertial Labsexpiration and its intangible assets, and the expirationusage of federal NOLs in the U.S.
The decreaseincrease in income tax provision of $33.0$43.1 million or 88.2% during fiscal 20252026 was due primarily to a $7.3 million provision related to the remeasurement of German deferred tax assets and liabilities as a result of changes in the applicable German tax rates, and the absence of a $25.0 million non-recurring benefit recognized in fiscal 2025 from the release of valuation allowance related to our acquisition of Inertial Labs and a $7.5 million release of state income tax reserves due to the lapse in the statute of limitations.Labs.
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA), which includes a broad range of tax reform provisions, was signed into law in the United States. The effect of OBBBA will be recorded in the first quarter of fiscal 2026, as a change in tax law is accounted for in the period of enactment. We are currently evaluating the provisions of OBBBA, however we currently do not expect the OBBBA to have a material impact on our annual effective tax rate in fiscal 2026.
NSE net revenue increased $74.6$406.3 million, or 10.6%52.3% during fiscal 20252026 when compared to fiscal 2024.2025. This increase was primarily driven by higher volume in Lab and Production, Aerospace and DefenseProduction ($25.2$145.0 million contributed by our acquisition of Spirent’s HSE and CE business), Aerospace and Defense ($86.1 million contributed by Inertial Labs during fiscal 2026 compared to $25.2 million in fiscal 2025), partially offset by lower volume in Wireless.
NSE operating margin increased by 4.310.6 percentage points during fiscal 20252026 to 5.4%16.1% from 1.1%5.5% in fiscal 2024,2025 primarily drivendue byto higher volume andresulting ain one-timeoperating R&D tax credit catch-up.leverage.
OSP net revenue increased $9.3$27.7 million, or 3.1%,9.0%, during fiscal 20252026 when compared to fiscal 2024.2025. This increase was primarily driven by higher Anti-Counterfeitinganti-counterfeiting and Otherother revenues,products partially offset by a decrease inand 3D sensing revenue.revenues.
OSP gross margin increaseddecreased by 1.21.0 percentage point during fiscal 20252026 to 53.1%52.2% from 51.9%53.2% in fiscal 20242025 primarily due to higherunfavorable volume.product mix.
OSP operating margin increasedremained by 0.6 percentage pointsflat during fiscal 20252026 toat 36.5% from 35.9% in fiscal 2024,36.6% primarily due to the aforementioned increasedecrease in gross margin.margin, offset by lower operating expenses as a percentage of segment revenue.
We believe our existing liquidity and sources of liquidity, namely operating cash flows, credit facility capacitycapacity, and access to capital markets, will continue to be adequate to meet our liquidity needs, including but not limited to, contractual obligations, working capital and capital expenditure requirements, contingent consideration liabilities, financing strategic initiatives, funding debt maturities and executing purchases under our share repurchase program over the next twelve months and beyond. However, there are a number of factors that could positively or negatively impact our liquidity position, including:
•The pending close of our acquisition of Spirent’s HSE, network security and CE businesses and the related Term Loan B, which has been priced and allocated, with funding contingent upon closing;
•Volatility of our stock price and/or equity markets;
•Principal payment obligations of our 1.625% Senior Convertible Notes due 2026, and our 3.75% Senior Notes due 2029 and 0.625% Senior Convertible Notes due 2031 (together the “Notes”) and covenants that restrict our debt level and credit facility capacity;
What changed in the latest 10-Q
Risk Factors
Largest changes
“Trade tensions between the U.S. and China have continued to escalate, with the U.S. and China both imposing a variety of trade barriers against the other, including various export control restrictions and tariffs.”see in full comparison
We operate globally and sell our products in countries throughout the world.see in full comparisonRecent escalationEscalations in regional conflicts, including thecurrentongoingconflictconflicts between Russia andUkraine,Ukraine and in the Middle East, ongoing and expanding economic sanctions, political instability and economic uncertainty in the Middle East, and the risk of increased tensions between the U.S. and China, could curtail or prohibit our ability to transfer certain technologies, to sell our products and solutions, or to continue to operate in certain locations. Foreign companies with a presence in China are facing increasing operational challenges and enhanced scrutiny from governmental entities in the region. Further, it is possible that the U.S.-Chinese geopolitical tensions could result in government measures that could adversely impact our business.Further, theThe U.S. administration has implemented and could implement further broad-based global tariffs that could adversely impact trade relations and result in higher costs.The final timing and amount of tariffTariff ratescontinuescontinue to evolve and therefore the impact, including those of any potential retaliatory tariffs, is difficult to forecast. International conflict has contributed to (i) increased pressure on the supply chain andcould further result inincreased energy and fuel costs, which could increase the cost of manufacturing, selling and delivering products and solutions (ii) inflation, which could result in increases in the cost of manufacturing products, reduced customer purchasing power, increased price pressure, and reduced or cancelled orders (iii)increasedincreasesrisk ofin cybersecurity attacks and (iv) general market instability, all of which could adversely impact our financial results.
•Changing market and economic conditions, including impacts due to tariffs, economic sanctions and export restrictions, the ongoingsee in full comparisonconflictconflicts between Russia andUkraine,Ukraine and in the Middle East, ongoing and expanding economic sanctions, political instability and economic uncertainty in the Middle East, tensions and trade sanctions between the U.S. and China, supply chain constraints, pricing and inflationary pressures;
Moreover, the additional tariffssee in full comparisonannouncedimposed by the U.S. administration in2025,2025 (and, following the U.S. Supreme Court striking down such tariffs as unconstitutional, the temporary replacement tariffs imposed in 2026), and any other tariffs or other trade actions that may beimplemented,implemented targeting China or other jurisdictions relevant to VIAVI, may increase the cost of certain materials and/or products, thereby adversely affecting our profitability. These actions could require us to pass these costs to our customers, which could decrease demand for our products, and could adversely impact our business.
Similarly, GenAI technologysee in full comparisonhasand, more recently, Agentic AI have proliferated including as a feature in existing commercially available products, some of which we use. GenAI is a type of machine-learning model capable of generating various types of content, including data, text and images. Agentic AI refers to autonomous or semi-autonomous AI systems that can reason, plan, and take actions to achieve complex, multi-step goals with minimal human supervision. Use ofGenAIthese tools could expose us to data and network security risks. These risks include the exposure of our intellectual property, confidential and proprietary information (including customer information) to unknown recipients; the introduction of malware into our network; and the creation of content subject to copyright, trademark, or other intellectual property protection of an unknown third party.
“The U.S. and China have been engaged in protracted negotiations over the Chinese government’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.”see in full comparison
Full comparison: every changed paragraph (14)
We operate globally and sell our products in countries throughout the world. Recent escalationEscalations in regional conflicts, including the currentongoing conflictconflicts between Russia and Ukraine,Ukraine and in the Middle East, ongoing and expanding economic sanctions, political instability and economic uncertainty in the Middle East, and the risk of increased tensions between the U.S. and China, could curtail or prohibit our ability to transfer certain technologies, to sell our products and solutions, or to continue to operate in certain locations. Foreign companies with a presence in China are facing increasing operational challenges and enhanced scrutiny from governmental entities in the region. Further, it is possible that the U.S.-Chinese geopolitical tensions could result in government measures that could adversely impact our business. Further, theThe U.S. administration has implemented and could implement further broad-based global tariffs that could adversely impact trade relations and result in higher costs. The final timing and amount of tariffTariff rates continuescontinue to evolve and therefore the impact, including those of any potential retaliatory tariffs, is difficult to forecast. International conflict has contributed to (i) increased pressure on the supply chain and could further result in increased energy and fuel costs, which could increase the cost of manufacturing, selling and delivering products and solutions (ii) inflation, which could result in increases in the cost of manufacturing products, reduced customer purchasing power, increased price pressure, and reduced or cancelled orders (iii) increasedincreases risk ofin cybersecurity attacks and (iv) general market instability, all of which could adversely impact our financial results.
•LimitedLonger availabilitylead oftimes for components and resources for our productsproducts, for example, recent memory chip shortages which leads to higher component prices;
•Changing market and economic conditions, including impacts due to tariffs, economic sanctions and export restrictions, the ongoing conflictconflicts between Russia and Ukraine,Ukraine and in the Middle East, ongoing and expanding economic sanctions, political instability and economic uncertainty in the Middle East, tensions and trade sanctions between the U.S. and China, supply chain constraints, pricing and inflationary pressures;
•Strained or worsening relations between the U.S., RussiaRussia, China and Chinathe Middle East and related impacts on other countries;
GlobalInternational conflicts and global and regional health pandemics have affected and may in the future affect the manufacturing and shipment of goods globally. Any delay in production or delivery of our products due to an extended closure of our suppliers’ plants could adversely impact our business, along with delays in shipment of our products as well as increased logistics costs.
Similarly, GenAI technology hasand, more recently, Agentic AI have proliferated including as a feature in existing commercially available products, some of which we use. GenAI is a type of machine-learning model capable of generating various types of content, including data, text and images. Agentic AI refers to autonomous or semi-autonomous AI systems that can reason, plan, and take actions to achieve complex, multi-step goals with minimal human supervision. Use of GenAIthese tools could expose us to data and network security risks. These risks include the exposure of our intellectual property, confidential and proprietary information (including customer information) to unknown recipients; the introduction of malware into our network; and the creation of content subject to copyright, trademark, or other intellectual property protection of an unknown third party.
Trade tensions between the U.S. and China have continued to escalate, with the U.S. and China both imposing a variety of trade barriers against the other, including various export control restrictions and tariffs.
The U.S. and China have been engaged in protracted negotiations over the Chinese government’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.
Huawei Technologies Co. Ltd. and a score of non-U.S. affiliates (collectively, Huawei) are on the Entity List of the Bureau of Industry and Security of the U.S. Department of Commerce (BIS), which imposes limitations on the supply of certainmost U.S. items and product support to Huawei. BISU.S. issuedexport finalcontrols rules that furtheralso restrict accessall bypersons Huaweifrom tosharing many items produced domestically and abroad from U.S. technology and software.software with Huawei. Certain VIAVI products of VIAVI are subject to the restrictions; however, the ongoing impact is not expected to be material to our overall operations.
Moreover, the additional tariffs announcedimposed by the U.S. administration in 2025,2025 (and, following the U.S. Supreme Court striking down such tariffs as unconstitutional, the temporary replacement tariffs imposed in 2026), and any other tariffs or other trade actions that may be implemented,implemented targeting China or other jurisdictions relevant to VIAVI, may increase the cost of certain materials and/or products, thereby adversely affecting our profitability. These actions could require us to pass these costs to our customers, which could decrease demand for our products, and could adversely impact our business.
Due to the ongoing conflict between Russia and Ukraine, the U.S., European Union (E.U.), and United Kingdom (U.K.) have broadened restrictions on supply to Russia,Russia therebyof blockingvarious items, including shipments of many technology, telecommunications and consumer electronics products to Russia.products. We suspended transactions in the region effective February 2022 which negatively impacted our business in the region. The ongoing situation in Ukraine as well as the potential for additional trade actions or retaliatory cyber-attacks aimed at infrastructure or supply chains, could have an impact on our future operations and financial results.
For example, in March 2025, we obtained commitments for a $425 million 7-year term loan facility in connection with our acquisition of Spirent’s HSE and CE business.business, Wewe subsequentlyentered marketed and upsized tointo a $600 million 7-year term loan facility and successfully allocated the loan to prospective lenders at an initial interest rate of SOFR+2.50% and an original issue price of 99.75%. The incremental $175 million will be used for general corporate purposes. On October 16, 2025, concurrent with the closing of the acquisition of the HSE and CE business, the Company executed the Term Loan Credit Agreement with Wells Fargo, as administrative agent, and other lenders. The term loans, which mature on October 16, 2032, are secured by substantially all of the assets of the Company and those of its domestic subsidiaries.
The issuance of our 1.625% Senior Convertible Notes due 2026 (the “2026 Notes”), our 3.75% Senior Notes due 2029 and our 0.625% Senior Convertible Notes due 2031 (together the “Notes”) as well as our Term Loan Credit Agreement substantially increased our principal payment obligations. The degree to which we are leveraged could materially and adversely affect our ability to successfully obtain financing for working capital, acquisitions or other purposes and could make us more vulnerable to industry downturns and competitive pressures. In addition, the holders of the 2026 Notes and 2031 Notes are entitled to convert the Notes into shares of our common stock or a combination of cash and shares of common stock under certain circumstances which would dilute our existing stockholders and lower our reported per share earnings. For example, on December 22, 2025 we exchanged $103.5 million aggregate principal amount of the 2026 Notes for an aggregate of 7.9 million shares which left approximately $49.0 million in aggregate principal amount of the 2026 Notes outstanding. In March 2026, the Company settled the remaining 2026 Notes through a combination of $49.0 million in cash and 1.8 million shares of its common stock. In addition, the Company paid $0.4 million of accrued interest in cash.
In June 2025, the United States and the G7 countries announced an agreement in principle to modify the Pillar Two rules. Under this agreement, the foreign and domestic profits of U.S.-parented groups would be excluded from Pillar Two’s undertaxed profit rule and income inclusion rule. In exchange, the U.S. withdrew the Section 899 tax provision from the One Big Beautiful Bill Act (OBBBA), which had imposed a retaliatory tax on individuals and entities from countries that implement certain "unfair foreign taxes" against U.S. companies or citizens. The G7-USG7-U.S. agreement has not yet been enacted into law, and we continue to evaluate our Pillar Two position based on legislation currently in force. We will monitor tax developments for any future implications with respect to our tax burden, net income, and cash flow.
Management's Discussion & Analysis (MD&A)
Largest changes
“In 2025, the U.S. administration imposed additional, broad-based tariffs, under the International Emergency Economic Powers Act (IEEPA), which were then struck down by the U.S. Supreme Court as unconstitutional. In 2026, the administration then imposed temporary replacement tariffs. These, and any other tariffs or other trade actions that may be implemented targeting China or other jurisdictions relevant to VIAVI may increase the cost of certain materials and/or products, thereby adversely affecting our profitability. …”see in full comparison
“During the fourth quarter of fiscal 2024, management approved a restructuring and workforce reduction plan (the Fiscal 2024 Plan) across various functions intended to improve operational efficiencies and better align the Company’s workforce with current business needs. The Company expects approximately 7% of its global workforce to be affected, impacting both segments and corporate functions. We estimate annualized gross cost savings of approximately $25.0 million excluding any one-time charges as a result of the restructuring activities initiated under the Fiscal 2024 Plan. …”see in full comparison
“The U.S. administration has implemented and could implement further broad-based, updated global tariffs and the situation continues to be dynamic and evolving. As we operate in this challenging environment, we are focused on continuing to deliver our products and services to our customers. Given our global business, tariffs will result in additional cost for us and our suppliers. We continue to take actions to optimize our supply chain, control costs and implement pricing actions to mitigate the evolving impact from tariffs.”see in full comparison
During thesee in full comparisonfourththird quarter of fiscal2024,2026, management approved a restructuring and workforce reduction plan (the Fiscal20242026 Plan) acrossvariousour NSE and OSP segments and Corporate functions intended to improve operationalefficiencies andefficiencies, better align the Company’s workforce with current businessneeds.needs and strategic growth opportunities and includes integration of recently acquired businesses. The Fiscal 2026 Plan includes a global workforce reduction, facilities rationalization and asset write-offs. The Company expects approximately7%5% of its global workforce to beaffected, impacting both segments and corporate functions.affected. We estimate annualized gross cost savings of approximately$25.0$30.0 million upon completion of the Fiscal 2026 plan, excluding any one-time charges as a result of the restructuringactivities initiated under the Fiscal 2024 Plan.activities. The Company anticipates the Fiscal20242026 Plan to be substantially complete by the end ofthecalendarthird quarter of fiscalyear 2026.
During the three andsee in full comparisonsixnine months endedDecemberMarch27,28,2025,2026, the Company recorded restructuring charges of $17.4 million of employee severance, benefits and outplacement costs related to the Fiscal 2026 Plan. During the three and nine months ended March 28, 2026, the Company recorded restructuring benefits of $0.1 million and$0.4$0.5 million, respectively, related to the Fiscal 2024 Plan. During the three andsixnine months endedDecemberMarch28,29,2024,2025, the Company recorded restructuringchargesbenefits of$1.2$0.3 million and$1.4charges of $1.1 million, respectively, related to the Fiscal 2024 Plan. During thesixnine months endedDecemberMarch27,29,2024,2025, the Company recorded a restructuringbenefitsbenefit of $0.2 million related to the Fiscal 2023 Plan.
Interest expense increased bysee in full comparison$7.7$14.5 million, or51.3%64.4%, during thesixnine months endedDecemberMarch27,28,20252026 compared to the same period a year ago. This increase was primarily a result ofenteringhigherintooutstanding debt with higher average interest rates as a result of the issuance of Term Loan Bwith high interest rateand additional amortization of debt issuance costs in the current period partially offset by a decrease in the accretion of debt discount on the 2026 Notes as a result of the debtextinguishments.extinguishments as well as settlement at maturity during the current period.
Full comparison: every changed paragraph (88)
•Our expectations related to macro-economic conditions, including the impact of inflation, fiscal tightening at central banks, changes in foreign exchange rates, the risk of increased tensions and trade actions, including global tariffs, ongoing geopolitical tensions including the conflictconflicts between Russia and Ukraine,Ukraine and in the Middle East, and political instability and economic uncertainty in the Middle East, on our business, operations and financial results.
VIAVI is a global leader in test and measurement and optical technologies. Our test, monitoring, assurance, and resilient position, navigation and timing solutions enable and secure critical infrastructure ranging from data center ecosystems and communication networks to military, aerospace, railway and first responder communications. In addition, we develop and advance technologies used in high-volume optical applications across anti-counterfeiting, consumer electronics, aerospaceaerospace, industrial and automotive end markets.
During the secondthird quarter of fiscal 2026, the NSE business grew year-over-year as a result of our acquisitionsacquisition of Spirent Communications plc’s (Spirent) high-speed ethernet, network security and channel emulation testing business (collectively, the HSE and CE business) and Inertial Labs, Inc. (Inertial Labs) which contributed net revenues of $43.0 million and $21.1 million, respectively.. Additionally, we continue to see strong demand offor lab and production and field productsproducts, driven by the data center ecosystem.ecosystem, as well as demand for our aerospace and defense products. OSP performance improved year-over-year driven by anti-counterfeiting and other products.products (other products include government, industrial and automotive end markets) and 3D Sensing.
As we look forward to the thirdfourth quarter of fiscal 2026, we expect NSErevenue for VIAVI to be up sequentially driven mainly by growthcontinued strength in many of our end markets andacross the acquisition of Spirent’s HSENSE and CE business.OSP. Our long-term focus remains on executing against our strategic priorities to drive revenue and earnings growth, capture market share and continue to optimize our capital structure. We remain positive on our long-term growth drivers and will continue to focus on executing our strategic priorities over the long-term to:
In 2025, the U.S. administration imposed additional, broad-based tariffs, under the International Emergency Economic Powers Act (IEEPA), which were then struck down by the U.S. Supreme Court as unconstitutional. In 2026, the administration then imposed temporary replacement tariffs. These, and any other tariffs or other trade actions that may be implemented targeting China or other jurisdictions relevant to VIAVI may increase the cost of certain materials and/or products, thereby adversely affecting our profitability. We continue to take actions to optimize our supply chain, control costs and implement pricing actions to mitigate the evolving impact from tariffs.
The U.S. administration has implemented and could implement further broad-based, updated global tariffs and the situation continues to be dynamic and evolving. As we operate in this challenging environment, we are focused on continuing to deliver our products and services to our customers. Given our global business, tariffs will result in additional cost for us and our suppliers. We continue to take actions to optimize our supply chain, control costs and implement pricing actions to mitigate the evolving impact from tariffs.
SecondThird quarter fiscal 2026 results included the following notable items:
•GAAP operating margin of 3.1%,6.1%, downup 510310 bps year-over-year.
•GAAP net loss of $48.1 million, down $57.2 million or 628.6% year-over-year.
•Non-GAAPGAAP net income of $51.5$6.4 million, updown $22.1$13.1 million or 75.2%67.2% year-over-year.
•GAAP diluted EPS of $(0.21), down $0.25 or 625.0% year-over-year.
•Non-GAAP dilutednet EPSincome of $0.22,$67.6 million, up $0.09$33.7 million or 69.2%99.4% year-over-year.
•GAAP diluted EPS of $0.03, down $0.06 or 66.7% year-over-year.
•Non-GAAP diluted EPS of $0.27, up $0.12 or 80.0% year-over-year.
(1)Included in the three months ended March 28, 2026 are charges of $3.9 million related to the write off of property, plant and sixequipment, $0.3 million of accelerated depreciation and other charges unrelated to core operating performance. In addition, included in the nine months ended DecemberMarch 27,28, 20252026 isare $3.5 million of losses on disposal of long-lived assets, $2.1 million charge for restoration services for a VIAVI facility impacted by a fire and other charges unrelated to core operating performance. Included in the sixnine months ended DecemberMarch 28,29, 20242025 is a gain of $0.9 million on the sale of assets previously classified as held for sale and other charges unrelated to core operating performance of $0.5 million.performance.
(2)The Company incurred losses of $38.7$3.7 million and $42.5$46.2 million for the three and sixnine months ended DecemberMarch 27,28, 2025,2026, respectively, in connection with the extinguishment of certain 1.625% Senior Convertible Notes.Notes and prepayments of the Term Loan B.
The Company provides non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP EPS financial measures as supplemental information regarding the Company’s operational performance and believes providing this additional information allows investors to see Company results through the eyes of management, and better to evaluate more clearly and consistently the Company’s core operational performance and expenses and evaluate the efficacy of the methodology used by management to measure such performance. The Company uses the measures disclosed in this Report to evaluate the Company’s historical and prospective financial performance, as well as its performance relative to its competitors. Specifically, management uses these items to further its own understanding of the Company’s core operating performance, which the Company believes represents its performance in the ordinary, ongoing and customary course of its operations. Accordingly, management excludes from core operating performance items such as those relating to certain purchase price accounting adjustments, amortization of acquisition related intangibles, amortization expense related to acquisition related inventory step-up, stock-based compensation, legal settlements, restructuring, changes in fair value of contingent consideration liabilities, certain investing and acquisition related expenses and other activities and income tax expenses or benefits that management believes are not reflective of such ordinary, ongoing and core operating activities. The non-GAAP adjustments are outlined below.
Three and SixNine Months Ended DecemberMarch 27,28, 20252026 and DecemberMarch 28,29, 20242025 Net revenue increased by $98.5$122.0 million, or 36.4%,42.8%, during the three months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago. Our acquisitionsacquisition of Spirent’s HSE and CE business and Inertial Labs contributed $43.0$54.3 million and $21.1 million, respectively, during the three months ended DecemberMarch 27,28, 2025.2026. Inertial Labs contributed $22.6 million during the three months ended March 28, 2026 compared to $7.7 million in the same period a year ago. Additionally, we continue to see demand of lab and production and field products driven by the data center ecosystem. OSP performance improved year-over-year driven by anti-counterfeiting and other products.products and 3D Sensing.
Net revenue increased by $159.4$281.4 million, or 31.3%,35.4%, during the sixnine months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago. Our acquisitionsacquisition of Spirent’s HSE and CE business andcontributed $97.3 million during the nine months ended March 28, 2026. Inertial Labs contributed $43.0$62.4 million and $39.8 million, respectively, during the sixnine months ended DecemberMarch 27,28, 2025.2026 compared to $7.7 million in the same period a year ago. Additionally, we continue to see demand of lab and production and field products driven by the data center ecosystem. OSP performance improved year-over-year driven by anti-counterfeiting and other products.products and 3D Sensing.
Product revenues increased by $91.6 million, or 40.6%, during the three months ended December 27, 2025 compared to the same period a year ago, driven by volume increases in NSE and OSP. Product revenues from Spirent’s HSE and CE business and Inertial Labs contributed $32.9 million and $21.1 million, respectively, during the three months ended December 27, 2025.
Product revenues increased by $151.5 million, or 35.8%, during the six months ended December 27, 2025 compared to the same period a year ago, driven by volume increases in NSE and OSP. Product revenues from Inertial Labs and Spirent’s HSE and CE business contributed $39.8 million and $32.9 million, respectively, during the six months ended December 27, 2025.
ServiceProduct revenues increased by $6.9$115.5 million, or 15.3%,47.8%, during the three months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago, driven by a volume increaseincreases in NSE.NSE Serviceand OSP. Product revenues from Spirent’s HSE and CE business contributed $10.1$41.6 million during the three months ended DecemberMarch 27,28, 2025.2026. Product revenues from Inertial Labs contributed $22.6 million during the three months ended March 28, 2026 compared to $7.7 million in the same period a year ago.
ServiceProduct revenues increased by $7.9$267.0 million, or 9.2%,40.2%, during the sixnine months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago, driven by a volume increaseincreases in NSE.NSE Serviceand OSP. Product revenues from Spirent’s HSE and CE business contributed $10.1$74.5 million during the sixnine months ended DecemberMarch 27,28, 2025.2026. Product revenues from Inertial Labs contributed $62.4 million during the nine months ended March 28, 2026 compared to $7.7 million in the same period a year ago.
Service revenues increased by $6.5 million, or 15.0%, during the three months ended March 28, 2026 compared to the same period a year ago, driven by the acquisition of Spirent’s HSE and CE business which contributed $12.7 million offset by a decline primarily in Wireless during the three months ended March 28, 2026.
Service revenues increased by $14.4 million, or 11.2%, during the nine months ended March 28, 2026 compared to the same period a year ago, driven by the acquisition of Spirent’s HSE and CE business which contributed $22.8 million offset by a decline primarily in Wireless during the nine months ended March 28, 2026.
Going forward, we expect to continue to encounter a number of industry and market risks and uncertainties. For example, uncertainty around the timing of our customers’ procurement decisions on infrastructure maintenance and upgrades and decisions on new infrastructure investments or uncertainty about speed of adoption of 5G technology at a commercially viable scale. This may limit our visibility, and consequently, our ability to predict future revenue, seasonality, profitability and general financial performance, which could create period-over-period variability in our financial measures and present foreign exchange rate risks. The recent globalGlobal tariffs implemented could increase our costs and impact our business.
Net revenue from customers outside the Americas represented 53.7%55.1% of net revenue during the three and 55.2%nine months ended March 28, 2026. Net revenue from customers outside the Americas represented 62.0% and 60.6% of net revenue, respectively, during the three and sixnine months ended DecemberMarch 27,29, 2025. Net revenue from customers outside the Americas represented 57.1% and 59.8% of net revenue, respectively, during the three and six months ended December 28, 2024.
Amortization of acquired technologies within Cost of revenues increased $9.2$6.9 million or 278.8%113.1% and $12.8$19.7 million or 193.9%155.1% during the three and sixnine months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago. This increase is primarily due to the amortization of intangibles acquired through Spirent’s HSE and CE business and Inertial Labs.
Gross margin decreasedincreased by 2.41.1 percentage points during the three months ended DecemberMarch 27,28, 20252026 from 59.4%56.4% in the same period a year ago to 57.0%57.5% in the current period. The decreaseincrease was primarily driven by the higher volume and favorable product mix in NSE partially offset by unfavorable product mix in OSP and an increase in amortization of intangibles and amortization of acquisition related inventory step-up.intangibles.
Gross margin decreased by 1.50.5 percentage points during the sixnine months ended DecemberMarch 27,28, 20252026 from 58.3%57.6% in the same period a year ago to 56.8%57.1% in the current period. The decrease was primarily driven by the increase in amortization of intangibles and amortization of acquisition related inventory step-up, partially offset by higher volume and favorable product mix.
Research and Development (R&D) expense increased by $13.8$21.0 million, or 26.5%42.0%, during the three months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago. This increase was primarily due to incremental cost from the acquisitions of Spirent’s HSE and CE business and Inertial Labs. As a percentage of net revenue, R&D expense decreased by 1.40.1 percentage points during the three months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago.
R&D expense increased by $20.4$41.4 million, or 20.1%27.3%, during the sixnine months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago. This increase was primarily due to incremental cost from the acquisitions of Spirent’s HSE and CE business and Inertial Labs. As a percentage of net revenue, R&D expense decreased by 1.71.2 percentage points during the sixnine months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago.
Selling, General and Administrative (SG&A) expense increased by $42.8$12.3 million, or 50.8%,12.1%, during the three months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago. This increase was primarily due to the change in fair value of acquisition related contingent consideration, incremental cost from the acquisitions of Spirent’s HSE and CE business and Inertial Labs andpartially higheroffset by lower acquisition and integration related charges. As a percentage of net revenue, SG&A expense increaseddecreased 3.37.7 percentage points during the three months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago.
SG&A expense increased by $72.9$85.2 million, or 46.0%,32.8%, during the sixnine months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago. This increase was primarily due to the change in fair value of acquisition related contingent consideration, incremental cost from the acquisitions of Spirent’s HSE and CE business and Inertial Labs and higherthe change in fair value of acquisition and integration related charges.contingent consideration. As a percentage of net revenue, SG&A expense increaseddecreased 3.50.6 percentage points during the sixnine months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago.
Amortization of intangibles within Operating expenses increased $5.3$6.2 million or 530.0%516.7% and $5.7$11.9 million or 271.4%360.6% during the three and sixnine months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago. This increase is primarily due to the amortization of intangibles acquired through Spirent’s HSE and CE business and Inertial Labs, partially offset by certain intangibles becoming fully amortized.
During the fourththird quarter of fiscal 2024,2026, management approved a restructuring and workforce reduction plan (the Fiscal 20242026 Plan) across variousour NSE and OSP segments and Corporate functions intended to improve operational efficiencies andefficiencies, better align the Company’s workforce with current business needs.needs and strategic growth opportunities and includes integration of recently acquired businesses. The Fiscal 2026 Plan includes a global workforce reduction, facilities rationalization and asset write-offs. The Company expects approximately 7%5% of its global workforce to be affected, impacting both segments and corporate functions.affected. We estimate annualized gross cost savings of approximately $25.0$30.0 million upon completion of the Fiscal 2026 plan, excluding any one-time charges as a result of the restructuring activities initiated under the Fiscal 2024 Plan.activities. The Company anticipates the Fiscal 20242026 Plan to be substantially complete by the end of thecalendar third quarter of fiscalyear 2026.
During the fourth quarter of fiscal 2024, management approved a restructuring and workforce reduction plan (the Fiscal 2024 Plan) across various functions intended to improve operational efficiencies and better align the Company’s workforce with current business needs. The Company expects approximately 7% of its global workforce to be affected, impacting both segments and corporate functions. We estimate annualized gross cost savings of approximately $25.0 million excluding any one-time charges as a result of the restructuring activities initiated under the Fiscal 2024 Plan. The Company anticipates the Fiscal 2024 Plan will be complete by the end of fiscal 2026.
As of DecemberMarch 27,28, 2025,2026, our total restructuring accrual was $2.1$16.5 million.
During the three and sixnine months ended DecemberMarch 27,28, 2025,2026, the Company recorded restructuring charges of $17.4 million of employee severance, benefits and outplacement costs related to the Fiscal 2026 Plan. During the three and nine months ended March 28, 2026, the Company recorded restructuring benefits of $0.1 million and $0.4$0.5 million, respectively, related to the Fiscal 2024 Plan. During the three and sixnine months ended DecemberMarch 28,29, 2024,2025, the Company recorded restructuring chargesbenefits of $1.2$0.3 million and $1.4charges of $1.1 million, respectively, related to the Fiscal 2024 Plan. During the sixnine months ended DecemberMarch 27,29, 2024,2025, the Company recorded a restructuring benefitsbenefit of $0.2 million related to the Fiscal 2023 Plan.
We estimate future cash payments of $2.1$16.3 million and $0.2 million under the Fiscal 2026 Plan and Fiscal 2024 Plan, respectively, funded by operating cash flow.
Loss on Convertible NoteDebt Extinguishment
During the three months ended DecemberMarch 27,28, 2025,2026, the Company enteredmade intoprepayments separateof privately-negotiated$150.0 agreementsmillion under the Term Loan Credit Agreement. The prepayments were accounted for as partial extinguishments, with certainthe holders of its 1.625% Senior Convertible Notes due 2026 (2026 Notes). The Company issued 7.9 million shares of its common stock in exchange for $103.5 million principalcarrying amount of the 2026portion Notes. This exchange transaction was accounted for as aof debt extinguishmentprepaid, which resulted inincluding the write-off ofproportionate unamortized debt discountissuance costs, derecognized. The difference between the reacquisition price and issuancethe costscarrying amount of $0.5$3.7 million on the extinguished notes. The total loss from the exchange was $38.7 million recorded as Loss on convertible notedebt extinguishment in the Consolidated Statements of Operations.
During the sixnine months ended DecemberMarch 27,28, 2025,2026, Company made prepayments of $150.0 million under the Term Loan Credit Agreement. The prepayments were accounted for as partial extinguishments, with the carrying amount of the portion of debt prepaid, including the proportionate unamortized debt issuance costs, derecognized. The Company also entered into separate privately-negotiated agreements with certain holders of its 1.625% Senior Convertible Notes due 2026 Notes.(2026 Notes). The Company issued 7.9 million shares of its common stock for $103.5 million principal amount of the 2026 Notes.Notes in December 2025. The Company also issued $100.9 million aggregate principal amount of its 0.625% Senior Convertible Notes due 2031 (2031 Notes) to certain holders of the 2026 Notes in exchange for $97.5 million principal amount of the 2026 Notes.Notes in August 2025. These 2026 Notes exchange transactions were accounted for as extinguishments which resulted in the write-off of unamortized debt discount and issuance costs of $1.6 million on the extinguished notes. Accrued interest of $0.7 million on the 2026 Notes was included in the exchange for the 2031 Notes. The total loss from thethese exchangesextinguishments was $42.5$46.2 million recorded as Loss on convertible notedebt extinguishment in the Consolidated Statements of Operations.
Refer to “Note 11. Debt” for more information
Interest and other income, net, remained flat at $3.9 million during the three months ended December 27, 2025 and December 28, 2024, with increase in interest income during the current period due to higher cash balance largely offset by an unfavorable foreign exchange impact as the balance sheet hedging program provided a less favorable offset to the remeasurement of underlying foreign exchange exposures during the current period.
Interest and other income, net, was $5.2$7.0 million during the sixthree months ended DecemberMarch 27,28, 20252026 compared to $7.1$2.2 million during the same period a year ago. This $1.9$4.8 million decreasechange was primarily driven by an unfavorableincrease in other income related to an adjustment to a financing obligation, an increase in interest income due to higher cash balance and favorable foreign exchange impact as the balance sheet hedging program provided a lessmore favorable offset to the remeasurement of underlying foreign exchange exposures during the current period.
Interest and other income, net, was $12.2 million during the nine months ended March 28, 2026 compared to $9.3 million during the same period a year ago. This $2.9 million change was primarily driven by an increase in other income related to an adjustment to a financing obligation, an increase in interest income due to higher cash balance offset by an unfavorable foreign exchange impact as the balance sheet hedging program provided a less favorable offset to the remeasurement of underlying foreign exchange exposures during the current period.
Interest expense increased by $7.8$6.8 million, or 104.0%90.7%, during the three months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago. This increase was primarily a result of enteringhigher intooutstanding debt with higher average interest rates as a result of the issuance of Term Loan B with high interest rate and additional amortization of debt issuance costs in the current period partially offset by a decrease in the accretion of debt discount on the 2026 Notes as a result of the debt extinguishments.extinguishments as well as settlement at maturity during the current period.
Interest expense increased by $7.7$14.5 million, or 51.3%64.4%, during the sixnine months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago. This increase was primarily a result of enteringhigher intooutstanding debt with higher average interest rates as a result of the issuance of Term Loan B with high interest rate and additional amortization of debt issuance costs in the current period partially offset by a decrease in the accretion of debt discount on the 2026 Notes as a result of the debt extinguishments.extinguishments as well as settlement at maturity during the current period.
We recorded an income tax provision of $9.7$7.4 million and $28.7$36.1 million for the three and sixnine months ended DecemberMarch 27,28, 2025,2026, respectively. We recorded an income tax provisionbenefit of $9.5$16.3 million and $18.5an income tax provision of $2.2 million for the three and sixnine months ended DecemberMarch 28,29, 2024,2025, respectively.
The income tax provision for the three and sixnine months ended December 27, 2025 and DecemberMarch 28, 2024,2026, primarily relates to income tax in certain foreign jurisdictions based on our forecasted pre-tax income orand loss.the revaluation of German deferred tax assets. The income tax benefit for the three months and the income tax provision for the sixnine months ended DecemberMarch 27,29, 2025, alsoprimarily includesrelates ato $9.7the millionrelease provisionof valuation allowance related to aour revaluationacquisition of ourInertial deferredlabs tax assets due to a change in the German corporateand income tax rate.in certain foreign and state jurisdictions based on our forecasted pre-tax income or loss.
The income tax provision recorded differs from the expected tax provision that would be calculated by applying the federal statutory rate to our income from continuing operations before taxes primarily due to changes in the valuation allowance for deferred tax assets attributable to our domestic and foreign income from continuing operations.operations and revaluation of the German deferred tax assets.
As of DecemberMarch 27,28, 20252026 and June 28, 2025, our unrecognized tax benefits (net of Federal benefits) totaled $42.8$42.9 million and $42.4 million, respectively, and are included in deferred taxes and other non-current tax liabilities. We had $3.6$3.5 million accrued for the payment of interest and penalties as of DecemberMarch 27,28, 2025.2026. The timing and resolution of income tax examinations are uncertain, and the amounts ultimately paid, if any, upon resolution of issues raised by the taxing authorities may differ from the amounts accrued for each year. Although we do not expect that our balance of gross unrecognized tax benefits will change materially in the next 12 months, given the uncertainty in the development of ongoing income tax examinations, we are unable to estimate the full range of possible adjustments to this balance.
NSE net revenue increased by $91.6 million, or 45.8%, during the three months ended December 27, 2025 compared to the same period a year ago, primarily driven by higher volume in Lab and Production ($41.3 million contributed by our acquisition of Spirent’s HSE business), Fiber and Access Solutions and Aerospace and Defense ($21.1 million contributed by our acquisition of Inertial Labs), partially offset by lower volume in Wireless.
NSE net revenue increased by $148.2$113.3 million, or 41.2%,54.4%, during the sixthree months ended DecemberMarch 27,28, 20252026 compared to the same period a year ago, primarily driven by higher volume in Lab and Production ($41.3$52.5 million contributed by our acquisition of Spirent’s HSE business), Aerospace and Defense ($39.8$22.6 million contributed by our acquisition of Inertial Labs during the three months ended March 28, 2026 compared to $7.7 million in the same period a year ago) and Fiber and Access Solutions, partially offset by lower volume in Wireless.
NSE net revenue increased by $261.5 million, or 46.1%, during the nine months ended March 28, 2026 compared to the same period a year ago, primarily driven by higher volume in Lab and Production ($93.8 million contributed by our acquisition of Spirent’s HSE business), Aerospace and Defense ($62.4 million contributed by Inertial Labs during the nine months ended March 28, 2026 compared to $7.7 million in the same period a year ago) and Fiber and Access Solutions, partially offset by lower volume in Wireless.
NSE gross margin remained relatively flat with a decrease of 0.1 percentage points during the three months ended December 27, 2025 to 64.7% from 64.8% in the same period a year ago.
NSE gross margin increased by 0.92.2 percentage points during the sixthree months ended DecemberMarch 27,28, 20252026 to 64.0%65.3% from 63.1% in the same period a year ago primarily due to higher volume and favorable product mix.
NSE operating margin increased by 6.9 percentage points during the three months ended December 27, 2025 to 15.6% from 8.7% in the same period a year ago primarily due to higher volume resulting in operating leverage.
NSE operatinggross margin increased by 9.41.4 percentage points during the sixnine months ended DecemberMarch 27,28, 20252026 to 12.2%64.5% from 2.8%63.1% in the same period a year ago primarily due to higher volume resultingand infavorable operatingproduct leverage.mix.
VIAV insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 15 filings (9 insiders, 11 trade dates, 711,173 shares, about $34.9M; 2 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -711,173 (purchases minus sales); net value about -$34.9M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-23 | Scrivanich Luke M |
Open-market sale |
35,866 | $36.24 | $1.3M |
| 2026-09-22 | Staley Gary W |
Shares withheld for tax | 9,702 | $36.40 | $353.2K |
| 2026-09-22 | Staley Gary W |
Option exercise | 24,654 | — | — |
| 2026-09-22 | Staley Gary W |
Shares withheld for tax | 13,013 | $36.40 | $473.7K |
| 2026-09-22 | Staley Gary W |
Shares withheld for tax | 8,944 | $36.40 | $325.6K |
| 2026-09-22 | Staley Gary W |
Option exercise | 22,728 | — | — |
| 2026-09-22 | Staley Gary W |
Option exercise | 33,069 | — | — |
| 2026-09-22 | Siebert Kevin Christopher |
Shares withheld for tax | 7,783 | $36.40 | $283.3K |
| 2026-09-22 | Siebert Kevin Christopher |
Option exercise | 17,256 | — | — |
| 2026-09-22 | Siebert Kevin Christopher |
Shares withheld for tax | 10,440 | $36.40 | $380.0K |
| 2026-09-22 | Siebert Kevin Christopher |
Option exercise | 23,148 | — | — |
| 2026-09-22 | Siebert Kevin Christopher |
Option exercise | 15,909 | — | — |
| 2026-09-22 | Siebert Kevin Christopher |
Shares withheld for tax | 7,175 | $36.40 | $261.2K |
| 2026-09-22 | Petrucci Anthony Michael |
Option exercise | 18,490 | — | — |
| 2026-09-22 | Petrucci Anthony Michael |
Shares withheld for tax | 5,012 | $36.40 | $182.4K |
| 2026-09-22 | Mcnab Paul |
Option exercise | 22,188 | — | — |
| 2026-09-22 | Mcnab Paul |
Shares withheld for tax | 11,290 | $36.40 | $411.0K |
| 2026-09-22 | Mcnab Paul |
Option exercise | 19,318 | — | — |
| 2026-09-22 | Mcnab Paul |
Shares withheld for tax | 9,829 | $36.40 | $357.8K |
| 2026-09-22 | Mcnab Paul |
Shares withheld for tax | 14,302 | $36.40 | $520.6K |
| 2026-09-22 | Mcnab Paul |
Option exercise | 28,108 | — | — |
| 2026-09-22 | Khaykin Oleg |
Shares withheld for tax | 101,420 | $36.40 | $3.7M |
| 2026-09-22 | Khaykin Oleg |
Option exercise | 236,685 | — | — |
| 2026-09-22 | Khaykin Oleg |
Shares withheld for tax | 122,429 | $36.40 | $4.5M |
| 2026-09-22 | Khaykin Oleg |
Shares withheld for tax | 71,092 | $36.40 | $2.6M |
| 2026-09-22 | Khaykin Oleg |
Option exercise | 165,909 | — | — |
| 2026-09-22 | Khaykin Oleg |
Option exercise | 285,714 | — | — |
| 2026-09-22 | Daskal Ilan |
Option exercise | 82,671 | — | — |
| 2026-09-22 | Daskal Ilan |
Shares withheld for tax | 37,285 | $36.40 | $1.4M |
| 2026-09-22 | Daskal Ilan |
Option exercise | 71,127 | — | — |
| 2026-09-22 | Daskal Ilan |
Shares withheld for tax | 32,079 | $36.40 | $1.2M |
| 2026-09-22 | Scrivanich Luke M |
Option exercise | 20,455 | — | — |
| 2026-09-22 | Scrivanich Luke M |
Shares withheld for tax | 10,408 | $36.40 | $378.9K |
| 2026-09-22 | Scrivanich Luke M |
Option exercise | 29,761 | — | — |
| 2026-09-22 | Scrivanich Luke M |
Shares withheld for tax | 11,603 | $36.40 | $422.3K |
| 2026-09-22 | Scrivanich Luke M |
Option exercise | 22,804 | — | — |
| 2026-09-22 | Scrivanich Luke M |
Shares withheld for tax | 15,143 | $36.40 | $551.2K |
| 2026-09-11 | Mcnab Paul |
Open-market sale | 3,523 | $38.98 | $137.3K |
| 2026-09-11 | Mcnab Paul |
Open-market sale | 7,509 | $38.96 | $292.6K |
| 2026-08-31 | Scrivanich Luke M |
Open-market sale |
23,911 | $36.37 | $869.6K |
| 2026-08-31 | Daskal Ilan |
Open-market sale | 30,257 | $36.29 | $1.1M |
| 2026-08-31 | Daskal Ilan |
Open-market sale | 26,033 | $36.29 | $944.7K |
| 2026-08-28 | Scrivanich Luke M |
Shares withheld for tax | 7,736 | $36.54 | $282.7K |
| 2026-08-28 | Scrivanich Luke M |
Option exercise | 15,204 | — | — |
| 2026-08-28 | Scrivanich Luke M |
Shares withheld for tax | 10,096 | $36.54 | $368.9K |
| 2026-08-28 | Scrivanich Luke M |
Option exercise | 19,841 | — | — |
| 2026-08-28 | Scrivanich Luke M |
Option exercise | 13,636 | — | — |
| 2026-08-28 | Scrivanich Luke M |
Shares withheld for tax | 6,938 | $36.54 | $253.5K |
| 2026-08-28 | Daskal Ilan |
Option exercise | 47,420 | — | — |
| 2026-08-28 | Daskal Ilan |
Shares withheld for tax | 24,857 | $36.54 | $908.3K |
| 2026-08-28 | Daskal Ilan |
Option exercise | 55,114 | — | — |
| 2026-08-28 | Daskal Ilan |
Shares withheld for tax | 21,387 | $36.54 | $781.5K |
| 2026-08-28 | Siebert Kevin Christopher |
Shares withheld for tax | 5,190 | $36.54 | $189.6K |
| 2026-08-28 | Siebert Kevin Christopher |
Option exercise | 11,506 | — | — |
| 2026-08-28 | Siebert Kevin Christopher |
Option exercise | 15,432 | — | — |
| 2026-08-28 | Siebert Kevin Christopher |
Shares withheld for tax | 4,784 | $36.54 | $174.8K |
| 2026-08-28 | Siebert Kevin Christopher |
Option exercise | 10,606 | — | — |
| 2026-08-28 | Siebert Kevin Christopher |
Shares withheld for tax | 6,960 | $36.54 | $254.3K |
| 2026-08-28 | Staley Gary W |
Shares withheld for tax | 6,468 | $36.54 | $236.3K |
| 2026-08-28 | Staley Gary W |
Shares withheld for tax | 8,676 | $36.54 | $317.0K |
Well-known investors holding VIAV (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Whale Rock Capital Management | 2026-06-30 | 6,875,942 | $328.3M | 2.64% | Added 98% |
| Two Sigma Investments | 2026-06-30 | 5,586,573 | $266.8M | 0.2% | Added 219% |
| Millennium Management (Israel Englander) | 2026-06-30 | 5,275,585 | $251.9M | 0.17% | Added 137% |
| D. E. Shaw & Co. | 2026-06-30 | 3,714,774 | $177.4M | 0.11% | Added 557% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 1,288,702 | $61.5M | 0.04% | Added 1016% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 682,710 | $32.6M | 0.05% | New position |
| Renaissance Technologies | 2026-06-30 | 328,300 | $15.7M | 0.02% | Added 198% |
| First Eagle Investment Management | 2026-06-30 | 212,900 | $10.2M | 0.02% | Reduced 62% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 204,563 | $9.8M | 0.0% | Added 113% |
| Bridgewater Associates | 2026-06-30 | 59,233 | $2.8M | 0.01% | Added 679% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 27,893 | $1.3M | 0.0% | New position |