Viavi Solutions (VIAV) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue was $252 million, up 2.4% sequentially but down 4.4% year-over-year, at the midpoint of guidance.

• Full-year revenue was $1 billion, down 9.6% year-over-year due to weak end-market demand and conservative spend by service providers and NEMs.

• Q4 non-GAAP EPS was $0.08, up from $0.06 sequentially but down from $0.10 a year ago; full-year non-GAAP EPS was $0.33, down 40%.

• Q4 operating margin was 10.9% (non-GAAP), up 160 bps sequentially but down 80 bps year-over-year; full-year non-GAAP margin was 11.5%, down 410 bps.

• Q4 operating cash flow was $26.2 million, up 34.4% sequentially and 11.5% year-over-year.

Financial highlights

• Q4 non-GAAP gross margin was 59.6%, up 170 bps sequentially and 140 bps year-over-year; GAAP gross margin was 57.8%.

• Q4 segment revenues: NSE $182.2 million (down 7.9% YoY), NE $158.5 million (down 9.7% YoY), SE $23.7 million (up 5.8% YoY), OSP $69.8 million (up 6.2% YoY).

• OSP operating margin was 34.8%, up 530 bps year-over-year and above guidance.

• Q4 cash and short-term investments totaled $496.2 million; long-term debt was $636 million.

• Fiscal 2024 adjusted EBITDA was $153 million, down from $207.7 million in the prior year.

Outlook and guidance

• Q1 FY25 revenue guidance: $235–$245 million; non-GAAP EPS: $0.05–$0.07; non-GAAP operating margin: 10.8% ±90 bps.

• NSE Q1 revenue expected at $164 million ±$4 million, with break-even operating margin; OSP Q1 revenue at $76 million ±$1 million, operating margin 34% ±100 bps.

• Management anticipates gradual recovery in NSE demand in the second half of fiscal 2025.