Viavi Solutions (VIAV) Q3 2025 earnings summary

Executive summary

• Q3 FY2025 revenue reached $284.8M, up 15.8% year-over-year, exceeding guidance midpoint, with strong performance in fiber/data center, aerospace & defense, and anti-counterfeiting segments.

• GAAP net income was $19.5M, a turnaround from a prior year loss, and non-GAAP net income was $33.9M; non-GAAP EPS was $0.15, up 150% year-over-year.

• Operating margin was 16.7% non-GAAP, up 7.4 pts year-over-year, and GAAP operating margin was 3.0%.

• Growth was driven by strong demand in fiber lab/production, aerospace & defense, and anti-counterfeiting, with recovery in telecom and 5G field instruments.

• Strategic acquisitions, including Inertial Labs and Spirent Communications' business lines, supported results and future growth.

Financial highlights

• Q3 FY2025 GAAP revenue was $284.8M, up 5.2% sequentially and 15.8% year-over-year; non-GAAP gross margin was 60.0%, up 210 bps year-over-year.

• Non-GAAP operating income was $47.7M, up 107.4% year-over-year; GAAP net income was $19.5M; non-GAAP net income was $33.9M.

• Cash, short-term investments, and restricted cash ended at $400.2M; operating cash flow was $7.8M, down from $19.5M year-over-year.

• CapEx for Q3 was $6.8M; adjusted EBITDA was $57.0M, up from $32.6M a year ago.

• Total debt was $650M in senior and convertible notes, with no borrowings under the $300M credit facility.

Outlook and guidance

• Q4 FY2025 revenue expected between $278M and $290M; non-GAAP operating margin 13.5% ±1%; non-GAAP EPS $0.10–$0.13.

• NSC/NSE Q4 revenue guided at ~$208M ±$5M; OSP at ~$76M ±$1M.

• Tariffs expected to impact Q4 by ~$3M, diluting gross margin and EPS by ~$0.01; tax expense for Q4 expected at ~$8M.

• Management remains focused on executing strategic priorities, defending core segments, and investing in growth opportunities.

• Gradual recovery across end markets is expected to continue despite macroeconomic uncertainty.