VIAVI Solutions Inc. Files Q2 FY25 10-Q

TL;DR

VIAVI Q2 FY25 10-Q filed. Financials out.

AI Summary

VIAVI Solutions Inc. filed its 10-Q for the period ending December 28, 2024. The company reported financial results for the second quarter of fiscal year 2025. Key financial data and operational details are presented in this filing, which follows the company's fiscal year end of June 28.

Why It Matters

This filing provides investors and analysts with the latest financial performance and operational insights for VIAVI Solutions Inc., crucial for understanding the company's current standing and future prospects.

Risk Assessment

Risk Level: low — This is a routine quarterly financial filing with no immediate red flags.

Key Numbers

• 20241228 — Reporting Period End Date (Financial results for this period are detailed.)
• 20250131 — Filing Date (Date the report was officially submitted to the SEC.)
• 0628 — Fiscal Year End (Indicates the end of the company's fiscal year.)

Key Players & Entities

• VIAVI SOLUTIONS INC. (company) — Filer
• JDS UNIPHASE CORP /CA/ (company) — Former company name
• 0000912093 (company) — Central Index Key

FAQ

Key Financial Figures

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

Filing Documents

• viav-20241228.htm (10-Q) — 2088KB
• viavq2fy2510-q1ex311x302ceo.htm (EX-31.1) — 10KB
• viavq2fy252xex312x302cfo.htm (EX-31.2) — 11KB
• viavq2fy253xex321x906ceo.htm (EX-32.1) — 6KB
• viavq2fy254xex322x906cfo.htm (EX-32.2) — 6KB
• 0000912093-25-000012.txt ( ) — 10916KB
• viav-20241228.xsd (EX-101.SCH) — 56KB
• viav-20241228_cal.xml (EX-101.CAL) — 103KB
• viav-20241228_def.xml (EX-101.DEF) — 296KB
• viav-20241228_lab.xml (EX-101.LAB) — 777KB
• viav-20241228_pre.xml (EX-101.PRE) — 550KB
• viav-20241228_htm.xml (XML) — 2026KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION 2 Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 2 Consolidated Statements of Operations for the Three and Six Months Ended Dec ember 28, 2024 and Dec ember 30, 2023 2 Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended Dec ember 28, 2024 and Dec ember 30, 2023 3 Consolidated Balance Sheets as of Dec ember 28, 2024 and June 29, 2024 4 Consolidated Statements of Cash Flows for the Six Months Ended Dec ember 28, 2024 and Dec ember 30, 2023 5 Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended Dec ember 28, 2024 and Dec ember 30, 2023 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 Six Months Ended December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023 Revenues: Product revenue $ 225.7 $ 210.9 $ 423.2 $ 416.5 Service revenue 45.1 43.6 85.8 85.9 Total net revenue 270.8 254.5 509.0 502.4 Cost of revenues: Product cost of revenue 87.3 83.2 169.2 161.4 Service cost of revenue 19.4 19.9 36.3 41.7 Amortization of acquired technologies 3.3 3.4 6.6 6.9 Total cost of revenues 110.0 106.5 212.1 210.0 Gross profit 160.8 148.0 296.9 292.4 Operating expenses: Research and development 52.1 49.5 101.5 99.4 Selling, general and administrative 84.3 74.8 158.4 152.0 Amortization of other intangibles 1.0 1.4 2.1 3.5 Restructuring and related charges (benefits) 1.2 ( 0.1 ) 1.2 ( 0.9 ) Total operating expenses 138.6 125.6 263.2 254.0 Income from operations 22.2 22.4 33.7 38.4 Interest and other income, net 3.9 3.8 7.1 14.0 Interest expense ( 7.5 ) ( 7.9 ) ( 15.0 ) ( 15.7 ) Income before income taxes 18.6 18.3 25.8 36.7 Provision for income taxes 9.5 7.6 18.5 16.2 Net income $ 9.1 $ 10.7 $ 7.3 $ 20.5 Net income per share: Basic $ 0.04 $ 0.05 $ 0.03 $ 0.09 Diluted $ 0.04 $ 0.05 $ 0.03 $ 0.09 Shares used in per share calculations: Basic 222.0 222.5 222.0 222.2 Diluted 224.8 223.5 224.4 223.9 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 Six Months Ended December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023 Net income $ 9.1 $ 10.7 $ 7.3 $ 20.5 Other comprehensive (loss) income: Net change in cumulative translation adjustment, net of tax ( 41.3 ) 29.7 ( 11.0 ) 9.3 Amortization of net actuarial losses (gains) and other pension ad

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 six months ended December 28, 2024 and December 30, 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 June 29, 2024. There have been no material changes to the Company's accounting policies during the three and six months ended December 28, 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 June 29, 2024 on Form 10-K, filed with the SEC on August 16, 2024. The Consolidated Balance Sheet as of June 29, 2024 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 six months ended December 28, 2024 and December 30, 2023 may not be indicative of results for the fiscal year ending June 28, 2025 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 fis

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 2. Recently Issued Accounting Pronouncements Accounting Standards Issued But Not Yet Adopted In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments , which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment of convertible debt. This guidance is effective for fiscal years beginning after December 15, 2025 (fiscal 2027 for the Company), and interim periods within those annual reporting periods, with early and retrospective adoption permitted. This ASU is not expected to have a material impact on our Consolidated Financial Statements or related disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires disaggregated disclosure of income statement expenses for public business entities. The objective of this guidance is to improve the disclosures about a public business entity's expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions such as Cost of revenues, Research and development (R&D) and Selling, general and administrative (SG&A). This guidance is effective for fiscal years beginning after December 15, 2026 (fiscal 2028 for the Company), and interim periods within fiscal years beginning after December 15, 2027, with early and retrospective adoption permitted. The Company is evaluating the impact of adopting this new accounting guidance on its Consolidated Financial S

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) SEC Climate Rules In March 2024, the SEC issued its final climate disclosure rules, which require the disclosure of climate-related information in annual reports and registration statements. The rules require disclosure in the audited financial statements of certain effects of severe weather events and other natural conditions above certain financial thresholds, as well as amounts related to carbon offsets and renewable energy credits or certificates, if material. 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 Company is currently evaluating the impact of the final rules on its Consolidated Financial Statements and disclosures and continue to monitor the status of the related legal challenges. Note 3. Earnings Per Share The following table sets forth the computation of basic and diluted net income per share ( in millions, except per share data ): Three Months Ended Six Months Ended December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023 Numerator: Net income $ 9.1 $ 10.7 $ 7.3 $ 20.5 Denominator: Weighted-average shares outstanding: Basic 222.0 222.5 222.0 222.2 Effect of dilutive securities from stock-based compensation plans 2.8 1.0 2.4 1.7 Diluted 224.8 223.5 224.4 223.9 Net income per share: Basic $ 0.04 $ 0.05 $ 0.03 $ 0.09 Diluted $ 0.04 $ 0.05 $ 0.03 $ 0.09 The following table sets forth the weighted-average potentially dilutive securities excluded from the computation of the diluted net income per share because their effect would have been anti-dilutive ( in millions ): Three Months Ended Six Months Ended December 28, 2024 (1) December 30, 2023 (1)(2) December 28, 2024 (1) December 30, 2023 (1)(2) Restricted stock units 1.2 5.6 1.8 3.1 (1) The Company's 1.625 % Senior Conve

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 six months ended December 28, 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 Change in unrealized components of defined benefit obligations (1) Total Beginning balance as of June 29, 2024 $ ( 5.3 ) $ ( 131.4 ) $ ( 7.3 ) $ ( 144.0 ) Other comprehensive loss before reclassification — ( 11.0 ) — ( 11.0 ) Amounts reclassified out of accumulated other comprehensive loss — — 0.2 0.2 Net current-period other comprehensive loss — ( 11.0 ) 0.2 ( 10.8 ) Ending balance as of December 28, 2024 $ ( 5.3 ) $ ( 142.4 ) $ ( 7.1 ) $ ( 154.8 ) (1) The amount reclassified out of accumulated other comprehensive loss represents the amortization of actuarial loss included as a component of Cost of revenues, R&D and SG&A in the Consolidated Statements of Operations, net of reclassification adjustments, for the six months ended December 28, 2024. There was no tax impact for the six months ended December 28, 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 . Acquisition-related costs incurred were approximately $ 0.8 million and have been recorded within SG&A expense in the Consolidated Statements of Operations in fiscal year 2023. 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. Goodw

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Acquisition-related Contingent Consideration The following table provides a reconciliation of changes in the fair value of the Company's earn-out liabilities associated with the Company's acquisitions for the three and six months ended December 28, 2024 and December 30, 2023 ( in millions ): Three Months Ended Six Months Ended December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023 Beginning period balance $ 6.0 $ 18.3 $ 9.5 $ 19.7 Payment of contingent consideration — ( 0.7 ) — ( 0.7 ) Fair value adjustment ( 3.9 ) ( 7.0 ) ( 7.4 ) ( 8.4 ) Ending period balance $ 2.1 $ 10.6 $ 2.1 $ 10.6 Note 6. Balance Sheet and Other Details Contract Balances Gross receivables include both billed and unbilled receivables (inc

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