VIAVI Announces First Quarter Fiscal 2025 Results
CHANDLER, Ariz., Oct. 31, 2024 /PRNewswire/ -- VIAVI (NASDAQ:VIAV) today reported results for its first quarter ended September 28, 2024 with the following highlights.
First Quarter
Net revenue of $238.2 million, down $9.7 million or 3.9% year-over-year
GAAP operating margin of 4.8%, down 170 bps year-over-year
Non-GAAP operating margin of 10.0%, down 240 bps year-over-year
GAAP net loss of $1.8 million, down $11.6 million or 118.4% year-over-year
Non-GAAP net income of $12.4 million, down $7.1 million or 36.4% year-over-year
GAAP diluted loss per share of $(0.01), down $0.05 or 125.0% year-over-year
Non-GAAP diluted earnings per share (EPS) of $0.06, down $0.03 or 33.3% year-over-year
"VIAVI's Q1FY25 revenue came in slightly below the midpoint of our guidance, with weaker demand in NSE partially offset by stronger OSP performance. On a positive side, we are starting to see a pickup in the NSE order momentum with our advanced fiber products such as 800G and recently announced 1.6Tb, being particularly strong. This aligns with our expectations for the beginning of NSE demand recovery in second half of FY25," said Oleg Khaykin, VIAVI's President and Chief Executive Officer.
Financial Overview:
The tables below (in millions, except percentage, and per share data) provide comparisons of quarterly results to prior periods, including sequential quarterly and year-over-year changes. A full reconciliation between the GAAP and non-GAAP measures included in the tables is contained in this release under the section titled "Use of Non-GAAP (Adjusted) Financial Measures."
First Quarter Ended September 28, 2024
GAAP Results
Q1
Q4
Q1
Change
FY 2025
FY 2024
FY 2024
Q/Q
Y/Y
Net revenue
$ 238.2
$ 252.0
$ 247.9
(5.5) %
(3.9) %
Gross margin
57.1 %
57.8 %
58.2 %
(70) bps
(110) bps
Operating margin
4.8 %
(2.3) %
6.5 %
710 bps
(170) bps
Income (loss) from operations
$ 11.5
$ (5.7)
$ 16.0
301.8 %
(28.1) %
Net (loss) income per share
(0.01)
(0.10)
0.04
90.0 %
(125.0) %
Non-GAAP Results
Q1
Q4
Q1
Change
FY 2025
FY 2024
FY 2024
Q/Q
Y/Y
Gross margin
59.1 %
59.6 %
60.1 %
(50) bps
(100) bps
Operating margin
10.0 %
10.9 %
12.4 %
(90) bps
(240) bps
Income from operations
$ 23.9
$ 27.5
$ 30.8
(13.1) %
(22.4) %
Earnings per share
0.06
0.08
0.09
(25.0) %
(33.3) %
Net Revenue by Segment
Q1
Q4
Q1
Change
FY 2025
FY 2024
FY 2024
Q/Q
Y/Y
Network Enablement
$ 141.6
$ 158.5
$ 150.0
(10.7) %
(5.6) %
Service Enablement
17.8
23.7
20.4
(24.9) %
(12.7) %
Optical Security and Performance Products
78.8
69.8
77.5
12.9 %
1.7 %
Total
$ 238.2
$ 252.0
$ 247.9
(5.5) %
(3.9) %
Americas, Asia-Pacific and EMEA customers represented 37.2%, 36.1% and 26.7%, respectively, of total net revenue for the quarter ended September 28, 2024.
As of September 28, 2024, the Company held $497.9 million in total cash, short-term investments and short-term restricted cash.
As of September 28, 2024, the Company had $250 million aggregate principal amount of 1.625% Senior Convertible Notes and $400 million aggregate principal amount of 3.75% Senior Notes with a total net carrying value of $637.6 million.
During the fiscal quarter ended September 28, 2024, the Company generated $13.5 million of cash flows from operations.
Business Outlook for the Second Quarter of Fiscal 2025
For the second quarter of fiscal 2025 ending December 28, 2024, the Company expects net revenue to be between $255 million to $265 million and non-GAAP EPS to be between $0.09 to $0.11.
With respect to our expectations above, the Company has not reconciled GAAP net loss per share to non-GAAP EPS in this press release because it is unable to provide a meaningful or accurate estimate of certain reconciling items described in the "Use of Non-GAAP (Adjusted) Financial Measures" section below and the information is not available without unreasonable effort as a result of the inherent difficulty of forecasting the timing and/or amounts of certain items, including certain charges related to restructuring, acquisition, integration and related charges. In addition, the Company believes such reconciliations would imply a degree of precision that may be confusing or misleading to investors.
Conference Call
The Company will discuss these results and other related matters at 1:30 p.m. Pacific Time on October 31, 2024 in a live webcast, which will also be archived for replay on the Company's website at https://investor.viavisolutions.com. The Company will post supplementary slides outlining the Company's latest financial results on https://investor.viavisolutions.com under the "Quarterly Results" section concurrently with this earnings press release. This press release is being furnished as a Current Report on Form 8-K with the Securities and Exchange Commission, and will be available at www.sec.gov.
About VIAVI Solutions
VIAVI (NASDAQ:VIAV) is a global provider of network test, monitoring and assurance solutions for telecommunications, cloud, enterprises, first responders, military, aerospace and railway. VIAVI is also a leader in light management technologies for 3D sensing, anti-counterfeiting, consumer electronics, industrial, automotive, government and aerospace applications.
Learn more about VIAVI at www.viavisolutions.com. Follow us on VIAVI Perspectives, LinkedIn and YouTube.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include any expectation, anticipation or guidance as to future financial performance, including future revenue, gross margin, operating expense, operating margin, profitability targets, cash flow and other financial metrics, as well as the impact and duration of certain trends and market position and conditions, including market stabilization and recovery. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. In particular, the Company's ability to predict future financial performance continues to be difficult due to, among other things: (a) continuing general limited visibility across many of our product lines; (b) quarter-over-quarter product mix fluctuations, which can materially impact profitability measures due to the broad gross margin ranges across our portfolio; (c) consolidations in our industry and customer base; (d) competitive pressures; (e) unforeseen changes or deceleration in the demand for current and new products, technologies, services, delays or unforeseen events in the roll-out of new industry platforms or evolving technology such as 3D sensing and customer purchasing delays due to macroeconomic conditions, tightening of expenditures or as they assess or transition to such new technologies and/or architectures, all of which limit near-term demand visibility, and could negatively impact potential revenue; (f) continued decline of average selling prices across our businesses; (g) notable seasonality and a significant level of in-quarter book-and-ship business; (h) various product and manufacturing transfers, site consolidations, product discontinuances and restructuring and workforce reduction plans, including anticipated cost savings associated with such plans; (i) challenges in execution of business strategy; (j) challenges integrating the businesses the Company has acquired and realizing all of the expected benefits and savings; (k) supply chain and materials constraints and the ability of our suppliers and contract manufacturers to meet production and delivery requirements to our forecasted demand; (l) potential disruptions or delays to our manufacturing and operations due to climate conditions and natural disasters in the regions where we operate, such as wildfires, drought conditions and related water shortages in Arizona, as well as wildfires in Northern California and related blackouts and power outages in that region; (m) the uncertain and ongoing impact to our supply chain of military conflicts, such as the ongoing conflict between Russia and Ukraine and the ongoing conflict between Israel and Hamas and the expansion of conflict in the Middle East, including in Lebanon and with Iran, tariffs, sanctions and other trade measures imposed by domestic and foreign governments, adverse actions and escalating tensions with foreign governments, including China, and the possibility of escalation of "trade wars," cyber-attacks, and retaliatory measures; (n) the impact of infectious disease outbreaks, epidemics, and pandemics on our financial results, revenues, customer demand, business operations and manufacturing and on the business operations of our customers, contract manufacturers and suppliers; and (o) inherent uncertainty related to global markets, including inflationary pressures, recessions, tightening monetary policy and liquidity, and the effect of such markets on demand for our products. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. For more information on the risks and uncertainties associated with the Company's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's filings with the Securities and Exchange Commission, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q. The forward-looking statements contained in this press release are made as of the date thereof and the Company assumes no obligation to update such statements. We have not filed our Form 10-Q for the quarter ended September 28, 2024. As a result, all financial results described in this earnings release should be considered preliminary, and are subject to change to reflect any necessary adjustments or changes in accounting estimates, that are identified prior to the time we file the Form 10-Q.
Contact Information
Investors:Vibhuti
Press: Amit
The following financial tables are presented in accordance with GAAP, unless otherwise specified.
-SELECTED PRELIMINARY FINANCIAL DATA -
VIAVI SOLUTIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
PRELIMINARY
Three Months Ended
September 28,2024
September 30,2023
Net revenue
$ 238.2
$ 247.9
