Skip to content
    VIAV
    Earnings call· Jun 2026(Q4 FY26)

    VIAVI SOLUTIONS Q4 FY26 earnings call VIAV

    Aug 5, 2026 Source

    Executive summary

    Viavi Solutions Q4 FY26 — Strong Data Center & A&D Demand Drives Beat, Q1 FY27 Guidance Raised

    Viavi Solutions delivered a strong Q4 FY26, exceeding revenue and profitability guidance, primarily fueled by robust demand from the data center ecosystem and aerospace & defense sectors. The company's diversification strategy is driving significant growth, with Q1 FY27 guidance reflecting continued strength despite typical seasonality and some elevated costs. Management anticipates achieving the $500 million revenue quarter target earlier than previously expected.

    Highlights

    5

    • Net revenue of $443.1 million, above the high end of guidance.

    • Operating margin of 24%, above the high end of guidance.

    • EPS of $0.34, above the high end of guidance.

    • NSE revenue grew 69.2% year-over-year, driven by data center ecosystem and aerospace & defense.

    • OSP revenue grew 9.6% year-over-year, driven by 3D sensing and anticounterfeiting.

    Concerns

    2

    • Wireless products continue to see anemic demand.

    • Q1 FY27 includes elevated variable costs due to a 14-week fiscal quarter.

    Guidance & targets

    12
    CategoryTargetConfidence
    Viavi Revenue
    $450 million and $460 million
    high materiality
    High
    NSE Revenue
    $360 million and $368 million
    medium materiality
    High
    OSP Revenue
    $90 million and $92 million
    medium materiality
    High
    Viavi Operating Margin
    27.1% plus or minus 40 basis points
    high materiality
    High
    NSE Operating Margin
    23.1% plus or minus 50 basis points
    medium materiality
    High
    OSP Operating Margin
    43.2%, plus or minus 20 basis points
    medium materiality
    High
    EPS
    $0.40 and $0.42
    high materiality
    High
    Tax Expenses
    around $12 million, plus or minus $500,000
    low materiality
    High
    Other Income and Expenses
    net expense of approximately $2.5 million
    low materiality
    High
    Share Count
    around 268 million shares
    low materiality
    High
    Operating Margin
    mid- to high 20 percent
    high materiality
    Medium
    Revenue
    $500 million
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Network and Service Enablement (NSE)
    Revenue was above the high end of guidance, driven by continued strong demand from the data center ecosystem and aerospace & defense customers, including contributions from Spirent product lines. Operating margin was above guidance due to higher fall-through.
    Gross margin: 64.1%Operating margin guidance: 18.2%-19.2%
    		$353.9 million69.2%—20% operating margin
    Optical Security and Performance Products (OSP)
    Revenue was at the high end of guidance, driven by strength in 3D sensing and anticounterfeiting and other products. Operating margin was above guidance as a result of higher fall-through.
    Gross margin: 55.2%Operating margin guidance: 38%-38.8%
    		$89.2 million9.6%—40% operating margin

    Operational metrics

    25
    Net revenue
    $443.1 millionUp 8.9% sequentially; Up 52.5% YoY
    Q4 FY26

    Above the high end of guidance range of $427 million to $437 million.

    Non-GAAP operating margin
    24%Up 280 bps sequentially; Up 960 bps YoY
    Q4 FY26

    Above the high end of guidance range of 22.2% to 23.2%.

    Non-GAAP EPS
    $0.34Up $0.07 sequentially; Up $0.21 YoY
    Q4 FY26

    Above the high end of guidance range of $0.29 and $0.31.

    Tariffs refund
    $1.5 million
    Q4 FY26

    Slightly benefited operating margin.

    Tariffs refund benefit to EPS
    $0.02
    Q4 FY26

    Contributed to EPS.

    Lower interest expenses benefit to EPS
    $0.02
    Q4 FY26

    Contributed to EPS.

    Spirent product lines revenue
    $47.7 million
    Q4 FY26

    Contribution from acquired Spirent product lines.

    Full year revenue
    $1.518 billionUp 40% YoY
    FY26

    Mainly driven by lab and production and field products, data center ecosystem, aerospace and defense, and acquisitions.

    Spirent product lines full year revenue
    $145 million
    FY26

    Contribution from Spirent product lines acquired in Q2 FY26.

    Full year operating margin
    20.6%Up 630 bps from FY25
    FY26

    Result of higher fall-through driven by higher revenue and favorable product mix.

    Full year EPS
    $1Vs $0.47 in prior year
    FY26

    Full year non-GAAP EPS.

    Cash and short-term investments balance
    $656.7 millionVs $508 million in Q3 FY26
    Q4 FY26 end

    Includes excess proceeds from follow-on offering.

    CapEx
    $11.1 millionVs $5.5 million in prior year
    Q4 FY26

    Capital expenditures for the quarter.

    Full year CapEx
    $31.1 millionVs $27.8 million in prior year
    FY26

    Full fiscal year capital expenditures.

    Shares purchased
    2.7 million shares for $30 million
    FY26

    In conjunction with convertible notes exchange. No shares purchased in Q4 FY26.

    Remaining share repurchase authorization
    $170 million
    Current

    Remaining under current authorized share repurchase program.

    Fully diluted share count
    261 million sharesUp from 227 million shares in prior year; Vs 256.1 million shares guidance
    Q4 FY26

    Higher than guidance due to follow-on offering.

    Follow-on offering
    $575 million gross
    Q4 FY26

    Proceeds used to pay off remaining balance of term loan B, excess included in cash balance.

    Data center ecosystem revenue share
    ~50%
    Q4 FY26

    Within NSE revenue, primarily optical products.

    Aerospace & Defense revenue share
    ~17%
    Q4 FY26

    Within NSE revenue.

    Spirent revenue growth
    ~10%QoQ
    Q1 FY27

    Expected sequential growth for Spirent in Q1 FY27.

    Tariffs refund
    $11 million
    July 2026

    Received in July 2026, primarily benefiting Q1 FY27 cost of goods sold.

    Tariffs refund net benefit to operating margin
    ~100 bps
    Q1 FY27

    Net benefit to operating margin, offset by additional 1 week of variable costs.

    Tariffs refund net benefit to EPS
    ~$0.02
    Q1 FY27

    Net benefit to EPS, including impact from additional 1 week of variable expenses.

    R&D operating leverage
    —
    Ongoing

    Improved due to higher volumes in lab and production, leading to more margin dollars within a shorter period.

    Industry KPIs

    5
    MetricValueDetails
    Capital return$170 millionUSD
    Segment growth margin targetsMid-to-high 20 percent%
    Ai cloud infrastructure ordersStrong demand
    Revenue mix by product customer typeData center ecosystem: ~50% of NSE revenue; Aerospace & Defense: ~17% of NSE revenue; Service provider: rest of NSE revenue%
    Design wins product cycle transitions1.6T ramping very quickly; 800G biggest driver; 400G still around

    Product announcements

    1
    ProductTypeDetails
    Industry's first validation solution for ultra Ethernet transportlaunch

    Deals & partnerships

    1
    SpirentAcquired high-speed Ethernet product lines

    The acquired Spirent high-speed Ethernet product lines are performing well. Integration was completed as of the June quarter, ahead of schedule.

    Risks & headwinds

    2
    Anemic demand for wireless productsongoing

    anemic although stable customer demand

    Mitigation: Management remains optimistic regarding longer-term demand for wireless products.

    Elevated variable costs due to 14-week fiscal quarterQ1 FY27

    some elevated variable costs

    Mitigation: Expected to be offset by an $11 million tariffs refund, primarily benefiting Q1 cost of goods sold.

    What to watch in Q1 FY27

    5

    Data Center Ecosystem Demand

    next several quarters
    Currentvery strong
    Targetcontinued robust growth

    Why it matters

    This is a key growth driver for NSE and overall company performance, indicating sustained market opportunity.

    The data center ecosystem customer demand for our products remains very strong, and we expect continued robust growth in this segment for the next several quarters.

    Q&A highlights

    6

    What percentage of NSE revenue comes from data center/optical, and what are the growth rates for those products?

    The data center business, which is primarily optical, now accounts for about 50% of NSE revenue. Aerospace & Defense contributes approximately 17%, with the remainder from the service provider business. The data center business, excluding Spirent, more than doubled year-over-year.

    “I mean our data center is now running at about 50% and the NSE revenue. A&D is, I would say, probably about 17%, and the rest is a service provider business.”

    asked by Ryan Koontz · answered by Oleg Khaykin

    2 min read7 chapters

    Detailed Narrative

    01

    Q4 FY26 Performance Overview

    Viavi exceeded Q4 FY26 expectations with net revenue of $443.1 million, above the high end of guidance, and an operating margin of 24%, also above guidance. Full fiscal year revenue reached $1.518 billion, marking a 40% year-over-year increase, with the full year operating margin at 20.6%, up 630 basis points from FY25. This strong performance was driven by robust demand in key end markets.

    02

    Data Center Ecosystem & AI Driving Growth

    The data center ecosystem, encompassing high-performance semis, optical modules, NAMs, and hyperscalers, was a primary growth driver for the NSE segment. This demand fueled sales of lab and production and field instruments supporting data center build-out, maintenance, and monitoring. Viavi recently launched an industry-first validation solution for ultra Ethernet transport, purpose-built for large-scale AI and high-performance computing workloads, further extending its leadership in this rapidly growing segment.

    03

    Aerospace & Defense Business Strength

    The Aerospace & Defense (A&D) business experienced another quarter of strong year-on-year growth, primarily driven by robust demand for its positioning, navigation, and timing (P&T) products. Management anticipates that the P&T product line will continue to be a multi-year growth driver for the A&D business, contributing significantly to future performance.

    04

    Spirent Integration & Contribution

    The acquired Spirent high-speed Ethernet product lines performed well, contributing $47.7 million to NSE revenue in Q4 FY26 and $145 million to the full FY26 revenue. The integration of Spirent is complete as of the June quarter, with synergies already realized. Spirent is expected to follow its typical seasonality, with stronger performance in the second half of the calendar year.

    05

    Optical Product Cycles (800G/1.6T/CPO) Progression

    While 800G remains the largest driver in terms of volume, 1.6T is ramping very quickly, particularly in production, and is projected to reach parity with 800G in 2027. The company is also seeing progress in Co-Packaged Optics (CPO), with initial revenues expected in the current quarter and acceleration anticipated in December. CPO is driven by the need for performance and power optimization, offering significant advantages despite its complexity.

    06

    Wireless & Service Provider Business Update

    The service provider business, including field instruments, wireless, and service enablement products, saw increased seasonal demand, particularly for fiber monitoring solutions and cable instruments. Conversely, wireless products continue to experience anemic but stable customer demand. Despite this, management remains optimistic about the longer-term demand prospects for its wireless offerings.

    07

    OSP Segment Performance

    The OSP segment demonstrated strong year-on-year growth, primarily attributed to robust demand in 3D sensing and anticounterfeiting and other products. This positive momentum is expected to continue into Q1 FY27, driven by seasonally stronger demand for 3D sensing products, reinforcing the segment's consistent contribution to Viavi's overall performance.

    AI-generated summary of the company’s earnings call. Not investment advice.