Viavi Solutions (VIAV) Q3 2025 earnings summary

Executive summary

• Q3 FY2025 revenue reached $284.8 million, up 15.8% year-over-year, exceeding guidance midpoint, with strong performance in data center, aerospace & defense, and fiber-related products.

• Non-GAAP operating income was $47.7 million, up 107.4% year-over-year; non-GAAP EPS was $0.15, up 150% year-over-year; GAAP net income was $19.5 million, a turnaround from a prior year loss.

• Operating margin improved to 16.7% non-GAAP and 3.0% GAAP, reflecting higher volume and cost controls.

• Acquisitions of Inertial Labs and agreement to acquire Spirent's high-speed ethernet and network security business lines supported strategic growth.

• Operating cash flow was $7.8 million for the quarter; capex totaled $6.8 million.

Financial highlights

• GAAP revenue was $284.8 million (up 5.2% sequentially, 15.8% year-over-year); non-GAAP gross margin was 60.0%, up 210 bps year-over-year.

• NSE revenue was $208.2 million (up 22.6% YoY); NE revenue $188 million (up 23.9% YoY); SE revenue $20.2 million (up 11.6% YoY); OSP revenue $76.6 million (up 0.5% YoY).

• Non-GAAP net income was $33.9 million; GAAP net income was $19.5 million; non-GAAP EPS was $0.15; GAAP EPS was $0.09.

• Cash and short-term investments ended at $400.2 million; total debt was $650 million in senior and convertible notes.

• Operating cash flow was $7.8 million, down from $19.5 million YoY; capex was $6.8 million.

Outlook and guidance

• Q4 FY2025 revenue expected between $278 million and $290 million; non-GAAP EPS guidance is $0.10 to $0.13.

• Q4 non-GAAP operating margin expected at 13.5% ±1%; NSE Q4 revenue guidance: ~$208 million ±$5 million; OSP Q4: ~$76 million ±$1 million.

• Tariff impact of ~$3 million expected to dilute gross margin and reduce EPS by ~$0.01; mitigation strategies underway.

• Management expects gradual recovery across end markets to continue into Q4 FY2025 despite macroeconomic uncertainty.