VIAVI Solutions Inc. Files 10-Q for Period Ending March 30, 2024

TL;DR

<b>VIAVI Solutions Inc. has filed its Q3 2024 10-Q report, detailing financial performance and operational status.</b>

AI Summary

VIAVI SOLUTIONS INC. (VIAV) filed a Quarterly Report (10-Q) with the SEC on May 3, 2024. VIAVI Solutions Inc. filed its quarterly report (10-Q) for the period ending March 30, 2024. The filing covers the third quarter of fiscal year 2024. The company's fiscal year ends on June 29. VIAVI Solutions Inc. was formerly known as JDS Uniphase Corp /CA/. The company is incorporated in Delaware and its SIC code is 3674 (Semiconductors & Related Devices).

Why It Matters

For investors and stakeholders tracking VIAVI SOLUTIONS INC., this filing contains several important signals. This filing provides investors with the latest financial data and operational insights into VIAVI Solutions Inc.'s performance during the third quarter of fiscal year 2024. Understanding the details within this 10-Q is crucial for assessing the company's current financial health, strategic direction, and potential future performance in the semiconductor industry.

Risk Assessment

Risk Level: medium — VIAVI SOLUTIONS INC. shows moderate risk based on this filing. The company operates in the semiconductor industry, which is subject to rapid technological changes and cyclical demand, posing a medium risk to its financial stability and growth prospects.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-Q to assess VIAVI Solutions Inc.'s performance and outlook.

Key Numbers

• 2024-03-30 — Period End Date (Quarterly report period)
• 2024-05-03 — Filing Date (Date the report was filed)
• 0629 — Fiscal Year End (Company's fiscal year end date)
• 942579683 — IRS Number (Company's IRS identification number)

Key Players & Entities

• VIAVI SOLUTIONS INC. (company) — Filer name
• JDS Uniphase Corp /CA/ (company) — Former company name
• 2024-03-30 (date) — Period of report
• 2024-05-03 (date) — Filing date
• CHANDLER (location) — Business address city
• DE (location) — State of incorporation
• 3674 (industry_code) — Standard Industrial Classification

FAQ

Industry Context

VIAVI Solutions operates within the semiconductor industry, focusing on network testing, monitoring, and assurance solutions.

Regulatory Implications

As a publicly traded company, VIAVI Solutions is subject to SEC regulations and reporting requirements, including the filing of quarterly 10-Q reports.

What Investors Should Do

1. Analyze the revenue and profitability trends for the third quarter of fiscal year 2024.
2. Review any disclosed risks or uncertainties that could impact future performance.
3. Compare key financial metrics to previous periods and industry benchmarks.

Key Dates

• 2024-03-30: Quarter End — End of the reporting period for the 10-Q filing.
• 2024-05-03: Filing Date — Date the 10-Q was officially submitted to the SEC.

Year-Over-Year Comparison

This filing represents the quarterly report for the period ending March 30, 2024, providing updated financial information since the previous filing.

Key Financial Figures

• $0.001 — registered Common Stock, par value of $0.001 per share VIAV The Nasdaq Stock Marke

Filing Documents

• viav-20240330.htm (10-Q) — 2150KB
• viavq3fy2410-q1ex311x302ceo.htm (EX-31.1) — 10KB
• viavq3fy242xex312x302cfo.htm (EX-31.2) — 11KB
• viavq3fy243xex321x906ceo.htm (EX-32.1) — 6KB
• viavq3fy244xex322x906cfo.htm (EX-32.2) — 6KB
• 0000912093-24-000033.txt (&nbsp;) — 10939KB
• viav-20240330.xsd (EX-101.SCH) — 56KB
• viav-20240330_cal.xml (EX-101.CAL) — 109KB
• viav-20240330_def.xml (EX-101.DEF) — 297KB
• viav-20240330_lab.xml (EX-101.LAB) — 756KB
• viav-20240330_pre.xml (EX-101.PRE) — 547KB
• viav-20240330_htm.xml (XML) — 2062KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION 2 Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 2 Consolidated Statements of Operations for the Three and Nine Months Ended March 30, 202 4 and April 1, 202 3 2 Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended March 30, 202 4 and Apri l 1, 202 3 3 Consolidated Balance Sheets as of March 30, 202 4 and July 1, 2023 4 Consolidated Statements of Cash Flows for the Nine Mo nths Ended March 30, 202 4 and April 1, 202 3 5 Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended March 30, 202 4 and April 1, 202 3 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 34 Item 3 . Quantitative and Qualitative Disclosure About Market Risks 50 Item 4.

Controls and Procedures

Controls and Procedures 50

- OTHER INFORMATION

PART II - OTHER INFORMATION 51 Item 1.

Legal Proceedings

Legal Proceedings 51 Item 1A.

Risk Factors

Risk Factors 52 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 67 Item 3. Defaults Upon Senior Securities 67 Item 4. Mine Safety Disclosures 67 Item 5. Other Information 67 Item 6. Exhibits 68

SIGNATURES

SIGNATURES 69 1 Table of Contents

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements VIAVI SOLUTIONS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) (unaudited) Three Months Ended Nine Months Ended March 30, 2024 April 1, 2023 March 30, 2024 April 1, 2023 Revenues: Product revenue $ 207.3 $ 205.2 $ 623.8 $ 714.4 Service revenue 38.7 42.6 124.6 128.1 Total net revenue 246.0 247.8 748.4 842.5 Cost of revenues: Product cost of revenue 87.7 81.5 249.1 272.9 Service cost of revenue 16.9 19.4 58.6 58.1 Amortization of acquired technologies 3.5 5.9 10.4 18.7 Total cost of revenues 108.1 106.8 318.1 349.7 Gross profit 137.9 141.0 430.3 492.8 Operating expenses: Research and development 50.0 50.8 149.4 155.3 Selling, general and administrative 98.2 80.0 250.2 250.2 Amortization of other intangibles 1.5 2.1 5.0 6.5 Restructuring and related charges (benefits) 0.1 10.2 ( 0.8 ) 10.2 Total operating expenses 149.8 143.1 403.8 422.2 (Loss) income from operations ( 11.9 ) ( 2.1 ) 26.5 70.6 Loss on convertible note modification (Note 11) — ( 2.2 ) — ( 2.2 ) Interest and other income, net 4.0 1.6 18.0 4.9 Interest expense ( 7.7 ) ( 6.7 ) ( 23.4 ) ( 19.0 ) (Loss) income before income taxes ( 15.6 ) ( 9.4 ) 21.1 54.3 Provision for income taxes 9.0 6.0 25.2 28.7 Net (loss) income $ ( 24.6 ) $ ( 15.4 ) $ ( 4.1 ) $ 25.6 Net (loss) income per share: Basic $ ( 0.11 ) $ ( 0.07 ) $ ( 0.02 ) $ 0.11 Diluted $ ( 0.11 ) $ ( 0.07 ) $ ( 0.02 ) $ 0.11 Shares used in per share calculations: Basic 223.0 224.1 222.5 225.5 Diluted 223.0 224.1 222.5 227.6 The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements. 2 Table of Contents VIAVI SOLUTIONS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (in millions) (unaudited) Three Months Ended Nine Months Ended March 30, 2024 April 1, 2023 March 30, 2024 April 1, 2023 Net (loss) income $ ( 24.6 ) $ ( 15.4 ) $ ( 4.1 ) $ 25.6 Other comprehensive (loss) income: Net chang

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Basis of Presentation The financial information for Viavi Solutions Inc. (VIAVI, also referred to as the Company, we, our and us) for the three and nine months ended March 30, 2024 and April 1, 2023 is unaudited and includes all normal and recurring adjustments the Company's management considers necessary for a fair statement of the financial information set forth herein. The accompanying Consolidated Financial Statements are presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, such information does not include all of the information and footnotes required by U.S. GAAP for annual Consolidated Financial Statements. For further information please refer to the Consolidated Financial Statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended July 1, 2023. There have been no material changes to the Company's accounting policies during the three and nine months ended March 30, 2024 as compared to the significant accounting policies presented in "Note 1. Basis of Presentation" of the Notes to the Consolidated Financial Statements included in the Company's Annual Report for the year ended July 1, 2023 on Form 10-K, filed with the SEC on August 17, 2023. The Consolidated Balance Sheet as of July 1, 2023 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The results for the three and nine months ended March 30, 2024 and April 1, 2023 may not be indicative of results for the fiscal year ending June 29, 2024 or any future periods. Fiscal Years The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30th. The Company's fiscal 2024 is a 52-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 2. Recently Issued Accounting Pronouncements SEC Climate Rules In March 2024, the SEC adopted final rules on the enhancement and standardization of climate-related disclosures for investors. The final rules require disclosure of, among other things, material climate-related risks and their impact; activities to mitigate or adapt to material climate-related risks; governance and oversight of climate-related risks; material climate-related targets or goals and their financial impact; and material Scope 1 and/or Scope 2 greenhouse gas emissions with an accompanying assurance report required following an initial transition period, at a limited assurance level, and then following an additional transition period, at a reasonable assurance level. In addition, the effects of severe weather events and other natural conditions, subject to certain thresholds, and amounts related to carbon offsets and renewable energy credits or certificates are required to be disclosed in the notes to the audited financial statements in certain circumstances. On April 4, 2024, the SEC voluntarily stayed the implementation of the final rules pending the completion of judicial review of the consolidated challenges to the final rules by the Court of Appeals for the Eighth Circuit. The final rules, as originally issued, would be effective for the Company in various fiscal years, starting with its Annual Report on Form 10-K for fiscal year 2026. Disclosures pursuant to the final rules, as originally issued, would be required prospectively, with information for prior periods required only to the extent it was previously disclosed in an SEC filing. The Company is currently evaluating the impact of the final rules on its Consolidated Financial Statements and disclosures. Accounting Standards Issued But Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740), to enhance the tra

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 3. Earnings Per Share The following table sets forth the computation of basic and diluted net (loss) income per share ( in millions, except per share data ): Three Months Ended Nine Months Ended March 30, 2024 April 1, 2023 March 30, 2024 April 1, 2023 Numerator: Net (loss) income $ ( 24.6 ) $ ( 15.4 ) $ ( 4.1 ) $ 25.6 Denominator: Weighted-average shares outstanding: Basic 223.0 224.1 222.5 225.5 Shares issuable assuming conversion of convertible notes (1) — — — 0.4 Effect of dilutive securities from stock-based compensation plans — — — 1.7 Diluted 223.0 224.1 222.5 227.6 Net (loss) income per share: Basic $ ( 0.11 ) $ ( 0.07 ) $ ( 0.02 ) $ 0.11 Diluted $ ( 0.11 ) $ ( 0.07 ) $ ( 0.02 ) $ 0.11 (1) Represents the dilutive impact for the Company's 1.75 % Senior Convertible Notes due 2023 (2023 Notes), the 1.00 % Senior Convertible Notes due 2024 (2024 Notes) and the 1.625 % Senior Convertible Notes due 2026 (2026 Notes). As of March 30, 2024, the if-converted value is less than the outstanding principal of the 2026 Notes and are therefore anti-dilutive. Refer to "Note 11. Debt" for more details. The following table sets forth the weighted-average potentially dilutive securities excluded from the computation of the diluted net (loss) income per share because their effect would have been anti-dilutive ( in millions ): Three Months Ended Nine Months Ended March 30, 2024 April 1, 2023 March 30, 2024 April 1, 2023 Restricted stock units 8.4 4.3 4.9 3.6 10 Table of Contents VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 4. Accumulated Other Comprehensive Loss The Company's accumulated other comprehensive loss consists of the accumulated net unrealized gains or losses on available-for-sale investments, foreign currency translation adjustments and change in unrealized components of defined benefit obligations. For the nine months ended March 30, 2024, the changes in accumulated other comprehensive loss, net of tax, by component were as follows ( in millions ): Unrealized losses on available-for sale investments Foreign currency translation adjustments, net of tax Change in unrealized components of defined benefit obligations (1) Total Beginning balance as of July 1, 2023 $ ( 5.3 ) $ ( 125.4 ) $ ( 5.3 ) $ ( 136.0 ) Other comprehensive loss before reclassification — ( 2.5 ) ( 1.0 ) ( 3.5 ) Amounts reclassified out of accumulated other comprehensive loss — — 0.1 0.1 Net current-period other comprehensive loss — ( 2.5 ) ( 0.9 ) ( 3.4 ) Ending balance as of March 30, 2024 $ ( 5.3 ) $ ( 127.9 ) $ ( 6.2 ) $ ( 139.4 ) (1) The amount reclassified out of accumulated other comprehensive loss represents the amortization of actuarial gains included as a component of Cost of revenues, Research and development (R&D) and Selling, general and administrative (SG&A) in the Consolidated Statements of Operations, net of reclassification adjustments, for the nine months ended March 30, 2024. There was no tax impact for the nine months ended March 30, 2024. Refer to "Note 17. Employee Pension and Other Benefit Plans" for more details on the computation of net periodic cost for pension plans. 11 Table of Contents VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 5. Acquisitions Jackson Labs Technologies, LLC On October 5, 2022, the Company acquired all of the equity of Jackson Labs Technologies, LLC (Jackson Labs), a privately held company which specializes in Position, Navigation and Timing (PNT) solutions for critical infrastructure serving both military and civilian applications. The acquisition enables the Company to broaden its solutions offering into the rapidly developing PNT landscape. The total purchase consideration included approximately $ 49.9 million paid in cash at closing and additional contingent consideration of up to $ 117.0 million for which future cash payments are dependent on the achievement of certain operational and revenue targets over the course of a three-year period beginning in January 2023. The cash consideration paid at closing included escrow payments of $ 5.0 million for indemnity holdback and $ 2.0 million subject to final cash and net working capital adjustments. The acquisition has been accounted for in accordance with the authoritative guidance on business combinations; therefore, the tangible and intangible assets acquired and liabilities assumed were recorded at fair value on the acquisition date. In connection with this acquisition, the Company recorded approximately $ 48.3 million of goodwill and $ 30.6 million of developed technology and other intangibles. The acquired developed technology and other intangible assets are being amortized over their estimated useful lives ranging from one to six years . Goodwill represents the excess of the preliminary estimated purchase consideration over the preliminary estimates of the fair value of the net tangible and intangible assets acquired and has been allocated to the Network Enablement segment. Goodwill is primarily attributable to expected synergies in the acquired technologies that may be leveraged by the Company in future PNT offerings. The goodwill was deductible for U.S

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 6. Balance Sheet and Other Details Contract Balances Gross receivables include both billed and unbilled receivables (including Contract assets). As of March 30, 2024, and July 1, 2023, the Company had total unbilled receivables of $ 12.0 million and $ 13.7 million, respectively. The Company also has short-term and long-term deferred revenues related to undelivered product and professional services, consisting of installations and consulting engagements, which are recognized as the Company's performance obligations under the contract are completed and accepted by the customer. The following table presents the activity related to deferred revenue ( in millions ): March 30, 2024 Three Months Ended Nine Months Ended Deferred revenue: Balance at beginning of period $ 84.7 $ 102.0 Revenue deferrals for new con

View Full Filing

View this 10-Q filing on SEC EDGAR