Viavi Solutions (VIAV) Q3 2026 earnings summary

Executive summary

• Net revenue for Q3 FY26 was $406.8M, up 42.8% year-over-year and 10.2% sequentially, exceeding guidance, driven by strong demand in data center, aerospace, and defense markets, and supported by Spirent and Inertial Labs acquisitions.

• Non-GAAP net income nearly doubled year-over-year to $67.6M, while GAAP net income fell 67.2% to $6.4M due to higher restructuring and other charges.

• Non-GAAP operating margin improved to 21.0%, up 430 bps year-over-year; GAAP operating margin rose to 6.1%.

• Major acquisitions included Spirent's HSE and CE business and Inertial Labs, expanding the technology portfolio and customer base.

• A restructuring plan was initiated to improve operational efficiency, targeting $30M in annualized cost savings.

Financial highlights

• Net revenue was $406.8M, up 10.2% sequentially and 42.8% year-over-year, above guidance.

• Non-GAAP operating margin was 21.0% (up 430 bps YoY); GAAP operating margin was 6.1% (up 310 bps YoY).

• Non-GAAP net income was $67.6M (up 99.4% YoY); non-GAAP diluted EPS was $0.27, up 80% YoY; GAAP diluted EPS was $0.03, down 66.7%.

• Cash and short-term investments ended at $508M, down from $772.1M in Q2 due to debt repayments and earn-out payments.

• Cash flow from operations was a use of $26.3M, impacted by earn-out payments and working capital timing.

Outlook and guidance

• Q4 FY26 net revenue expected between $427M and $437M, with sequential growth in both NSE and OSP segments.

• Non-GAAP operating margin projected at 22.7% ±50 bps; non-GAAP EPS expected between $0.29 and $0.31.

• Continued strong demand anticipated in data center and aerospace/defense markets through calendar 2026.