Viavi Solutions Inc.

What they do

VIAVI operates two segments: Network and Service Enablement (NSE) and Optical Security and Performance Products (OSP). NSE provides test, monitoring, assurance, and resilient PNT solutions for data centers, communication networks, and military/aerospace. OSP develops and sells anti-counterfeiting pigments and 3D sensing optical technologies, among other high-volume optical applications.

Revenue drivers

• Network and Service Enablement (NSE) — Largest segment, FY2026 revenue $1.18B (up 52.3% YoY), driven by high-speed Ethernet and optical test products for AI/HPC data centers, fiber test, and wireless solutions.
• Optical Security and Performance Products (OSP) — FY2026 revenue $335.4M (up 9.0% YoY), driven by anti-counterfeiting pigments and 3D sensing, with applications in consumer electronics, aerospace, industrial, and automotive.
• Spirent acquisition — Acquired certain businesses of Spirent Communications in October 2025, expanding NSE's high-speed Ethernet portfolio to cover layers 0-7 of the OSI stack, contributing to Q4 growth.
• Fiber products — Part of NSE, includes instruments for construction, inspection, testing, and monitoring of broadband networks for service providers and hyperscalers, a key revenue stream.

Recent performance

For fiscal Q4 2026, net revenue was $443.1M, up 52.5% YoY, with GAAP operating margin of 13.8% (up 850 bps) and non-GAAP operating margin of 24.0% (up 960 bps). GAAP net income was $32.7M (EPS $0.13), while non-GAAP net income was $89.1M (EPS $0.34). For fiscal year 2026, net revenue was $1.52B, up 40.0% YoY, but GAAP net loss was $30.4M (EPS -$0.13), reflecting acquisition-related costs; non-GAAP net income was $243.8M (EPS $1.00).

Strategy

VIAVI aims to defend and consolidate leadership in core NSE and OSP segments. It is investing in secular trends including data center ecosystems (AI/HPC test), next-gen wireless (5G+/6G, Open RAN), and expanding into aerospace/defense and resilient PNT. Capital allocation priorities include debt management, share buybacks, and leveraging NOLs, plus inorganic investments synergistic to segments.

Risks

• Geopolitical tensions — Conflicts and U.S.-China tensions could restrict technology transfers, sales, or operations in certain regions, and tariffs could raise costs.
• Customer spending uncertainty — Uncertain telecom carrier and cable operator capital/R&D spending could affect demand for NSE infrastructure test products.
• Profitability volatility — Revenue mix and operational costs vary significantly across segments, and future profitability is not assured.
• Acquisition integration — Integration of Spirent businesses may incur costs and risks that could impact financial results.

Outlook

Management expects continued growth driven by datacenter ecosystem and aerospace/defense end markets for several quarters. The company highlights its diversification strategy as a key growth driver. No specific forward guidance was provided in the excerpts, but the tone is positive.