VIAVI Solutions Reports 6.4% Revenue Growth to $270.8 Million, Net Income Declines 15%

VIAVI Solutions Inc. reported a net revenue of $270.8 million for the three months ended December 28, 2024, marking a 6.4% increase from $254.5 million in the same period last year. The company's product revenue rose to $225.7 million, up from $210.9 million, while service revenue also saw a slight increase to $45.1 million from $43.6 million. However, net income for the quarter decreased to $9.1 million, down 15% from $10.7 million a year earlier, resulting in a diluted earnings per share of $0.04, compared to $0.05 in the prior year.

In the first half of fiscal 2025, VIAVI's total net revenue reached $509.0 million, a modest increase from $502.4 million in the same period of fiscal 2024. The growth was primarily driven by the Network Enablement (NE) segment, which reported a 15.1% increase in revenue for the quarter, attributed to higher demand from service providers and network equipment manufacturers. Conversely, the Service Enablement (SE) segment experienced a decline of 13.3% in revenue, reflecting lower assurance revenue.

The company has been actively managing its operational costs, with total operating expenses rising to $138.6 million for the quarter, up from $125.6 million a year ago. This increase was driven by higher research and development costs, which rose to $52.1 million, and selling, general, and administrative expenses, which increased to $84.3 million. Despite these rising costs, the gross profit improved to $160.8 million, resulting in a gross margin of 59.4%, up from 58.2% in the previous year.

VIAVI has also been focusing on strategic initiatives, including a restructuring plan aimed at improving operational efficiencies. The company anticipates that approximately 7% of its global workforce will be affected by this plan, which is expected to yield annualized gross cost savings of about $25 million. Additionally, the company completed the acquisition of Inertial Labs, Inc. for $150 million, which is expected to enhance its capabilities in high-performance navigation solutions.

Looking ahead, VIAVI expects continued stabilization in its end markets, particularly in the NE segment, and anticipates a gradual recovery in fiscal 2025. The company remains committed to its long-term growth strategies, including investments in research and development and expansion into adjacent markets. However, it acknowledges potential risks related to market conditions, pricing pressures, and the ongoing global economic environment, which may impact its financial performance in the near term.