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- **Revenue Growth**: Q1 revenue $299.1M (+25.6% YoY), driven by NSE (35.5% YoY) and Spirent acquisition.
- **Margin Expansion**: Operating margin 15.7% (vs. 9.8% prior year), EPS $0.15 (+$0.09 YoY).
- **Strategic Shift**: NSE now 40% of revenue, data center 40%, reducing reliance on service providers.
- **Spirent Impact**: Adds $200M annual revenue, 0.08-0.10 EPS accretion by FY26.
- **Growth Drivers**: AI data centers, aerospace/defense, and professional-grade fiber operators.
- **Risk**: Wireless segment softness may persist.

**【Management Opening Remarks】**
- Vibhuti Nayar provided an overview of the call, emphasizing forward-looking statements and non-GAAP results (excluding revenue). She highlighted the availability of earnings slides and the recording.

**【CFO Financial Commentary】**
- **Revenue Performance**: Q1 net revenue of $299.1M exceeded the high end of guidance ($290M-$298M), up 3% sequentially and 25.6% YoY.
- **Margins**: Operating margin of 15.7% (vs. 14.6%-15.4% guidance), up 130 bps QoQ and 570 bps YoY. EPS of $0.15 (vs. $0.13-$0.14 guidance), up $0.02 QoQ.
- **Segment Breakdown**: 
  - **NSE**: $216M revenue (up 35.5% YoY), driven by data center and aerospace/defense. Gross margin 63% (up 210 bps YoY). Operating margin 7.5% (vs. -4.6% prior year).
  - **OSP**: $83.1M revenue (up 5.5% YoY), gross margin 52.3% (down 300 bps YoY). Operating margin 37.1% (vs. 38.1%-38.5% guidance).
- **Cash Flow & Balance Sheet**: Cash of $549.1M (up from $429M). Refinanced $250M convertible notes, repurchased $30M in shares.
- **Q2 Guidance**: Revenue $360M-$370M, EPS $0.18-$0.20. NSE revenue $283M-$293M (incl. Spirent $45M-$55M). Operating margin 17.9% ±60 bps.

**【CEO Strategic Update】**
- **NSE Growth**: 35% YoY driven by data center (AI build-out, 800G/1.6T test equipment) and aerospace/defense. Acquired Spirent adds $200M annual revenue, strengthening data center ecosystem.
- **Market Momentum**: Continued demand for lab/production/test equipment. Aerospace/defense growth expected. Service provider segment stable but offset by wireless softness.
- **Future Outlook**: Q2 NSE growth driven by data center and Spirent. OSP expected to decline QoQ due to seasonal anti-counterfeiting/3D sensing.

**【Q&A Highlights】**
- **Revenue Mix**: NSE now 40% (vs. 30% prior), data center 40%, aerospace/defense 15%. Diversification reduces reliance on service providers.
- **Data Center Demand**: Strong field instrument sales to hyperscalers, production/test equipment for AI data centers. Spirent's AI-RAN testing adds $0.08 EPS accretion.
- **Margins & Integration**: NSE operating margin expected to expand with Spirent. OSP margin challenges due to product mix.
- **Wireless Recovery**: Potential catalyst for growth, but still lagging.
- **Aerospace/Defense**: Inertial navigation systems seeing broad adoption (drones, autonomous vehicles).


Viavi Solutions Inc. (VIAV) Q1 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

VIAV

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