Earnings

VIAVI Revenue Jumps 57% To $469.3 Million, Swings To Profit And Adds $500 Million Buyback

The network-testing company posted $76.0 million in net income against a $21.4 million loss a year ago and guided higher for the second quarter.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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VIAVI Revenue Jumps 57% To $469.3 Million, Swings To Profit And Adds $500 Million Buyback

VIAVI Solutions, which makes test and measurement gear for networks and critical infrastructure, said first-quarter revenue rose 56.9% to $469.3 million from $299.1 million a year earlier, and it swung to a profit. The board also authorized a new buyback of up to $500 million, according to an 8-K filed Wednesday.

From a $21.4 million loss to $76.0 million

Net income under standard accounting was $76.0 million for the quarter ended October 3, versus a $21.4 million loss a year earlier. Diluted earnings per share were $0.29, against a loss of $0.10.

On an adjusted basis, operating margin reached 29.0%, up from 16.3%, and earnings per share were $0.47, up from $0.15. Standard operating margin was 17.4%, compared with 2.5% a year ago.

CEO Oleg Khaykin said the quarter came in "above the high end of our guidance." He added that the company expects "growth momentum to continue" on demand in data center and aerospace and defense markets.

All figures are preliminary and unaudited, because the company has not yet filed its 10-Q for the quarter and says results could change before it does.

Test gear drives the surge

The Network and Service Enablement segment, which sells test, monitoring and assurance products to telecom providers, data center operators and government customers, rose 74.1% to $376.1 million. Optical Security and Performance Products, which makes color-shifting pigments and optical filters, grew 12.2% to $93.2 million.

Total revenue rose 5.9% from the fourth quarter's $443.1 million. Americas customers made up 43.9% of revenue, Asia-Pacific 34.7% and EMEA 21.4%.

Cash, a bigger buyback and guidance

The business generated $104.7 million of cash from operations in the quarter. Cash, short-term investments and short-term restricted cash stood at $535.3 million, and the company carries $250.0 million of 0.625% convertible notes and $400.0 million of 3.75% senior notes.

The board approved the $500 million repurchase program on November 1. It comes on top of a 2022 plan of $300 million that has about $18.4 million left, and the company is not obligated to buy any particular amount.

For the second quarter ending January 2, 2027, VIAVI expects revenue of $505 million to $515 million and adjusted earnings per share of $0.50 to $0.52.

The company discussed the results on a webcast at 1:30 p.m. Pacific Time on Wednesday, and its 10-Q will show whether the preliminary figures hold.

Sources

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