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 2024 revenue was $1 billion, down 9.6% year-over-year due to 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%, up 160 bps sequentially but down 80 bps year-over-year; full-year non-GAAP operating margin was 11.5%, down 410 bps.

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

Financial highlights

• NSE Q4 revenue was $158.5 million, down 9.7% year-over-year; SE revenue was $23.7 million, up 5.8%; OSP revenue was $69.8 million, up 6.2%.

• Non-GAAP gross margin for Q4 was 59.6%, up 170 bps sequentially and 140 bps year-over-year.

• Q4 cash and short-term investments totaled $496.2 million; long-term debt was $636.0 million.

• Q4 operating cash flow was $26.2 million; fiscal 2024 cash flow from operations was $116.4 million.

• OSP Q4 operating margin reached 34.8%, above guidance, driven by higher gross margin and production ramp.

Outlook and guidance

• Q1 2025 revenue guidance: $235 million–$245 million; non-GAAP EPS: $0.05–$0.07; operating margin: 10.8% ±90 bps.

• NSE Q1 revenue expected at $160 million–$168 million, with break-even operating margin; OSP revenue at $75 million–$77 million, operating margin 33%–35%.

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