Viavi Solutions (VIAV) Stock Trades Up, Here Is Why

Network testing solutions company Viavi Solutions reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 36.4% year on year to $369.3 million. On top of that, next quarter’s revenue guidance ($393 million at the midpoint) was surprisingly good and 10% above what analysts were expecting. Its non-GAAP profit of $0.22 per share was 17.2% above analysts’ consensus estimates.

Viavi Solutions (VIAV) Q4 CY2025 Highlights:

• Revenue: $369.3 million vs analyst estimates of $365.4 million (36.4% year-on-year growth, 1.1% beat)
• Adjusted EPS: $0.22 vs analyst estimates of $0.19 (17.2% beat)
• Adjusted EBITDA: $81.4 million vs analyst estimates of $75.07 million (22% margin, 8.4% beat)
• Revenue Guidance for Q1 CY2026 is $393 million at the midpoint, above analyst estimates of $357.2 million
• Adjusted EPS guidance for Q1 CY2026 is $0.23 at the midpoint, above analyst estimates of $0.15
• Operating Margin: 3.1%, down from 8.2% in the same quarter last year
• Market Capitalization: $4.69 billion

StockStory’s Take

Viavi Solutions delivered a positive fourth quarter, with results above Wall Street’s revenue and profit expectations. Management attributed growth to robust demand from the data center ecosystem and increased momentum in aerospace and defense, which together now comprise a growing share of the business. CEO Oleg Khaykin highlighted, “The data center ecosystem, which includes high-performance semiconductors, optical modules, and network management systems, drove strong demand for lead and production products in support of AI data center build-out.” The company also benefited from contributions of recently acquired product lines and a recovery in anti-counterfeiting solutions.

Looking ahead, Viavi Solutions’ guidance is underpinned by continued strength in data center and aerospace and defense markets. Management expects these segments to sustain elevated demand, particularly as hyperscale customers require advanced fiber monitoring tools and defense applications turn to positioning and navigation products. Khaykin emphasized, “We are now seeing emerging strong demand for our fiber field instruments by hyperscalers and service providers to build, operate, and optimize the next generation of fiber networks.” The company also plans to reinvest savings from its recent restructuring into higher-growth areas, aiming to further capitalize on these trends.

Key Insights from Management’s Remarks

Viavi’s revenue growth was led by surging demand from customers building AI-focused data centers and further supported by aerospace, defense, and anti-counterfeiting product momentum.

• Data center ecosystem shift: Management noted a significant mix shift, with data center-related sales now comprising an estimated 45% of segment revenue, surpassing service provider sales for the first time. This shift was driven by increased investment in AI-related infrastructure and greater adoption of Viavi’s lab, production, and field instruments by both hyperscalers and traditional network operators seeking to monitor and optimize fiber performance.

• Aerospace and defense momentum: The aerospace and defense segment saw continued high demand, especially for positioning, navigation, and timing products, which are critical for autonomous systems such as drones and robotic vehicles. Management believes this segment’s growth is being fueled by increased adoption of resilient navigation solutions in both military and commercial applications.

• Acquisition integration: The addition of Spirent’s product lines and Inertia Labs contributed to year-on-year revenue growth, though Spirent’s performance was slightly below expectations this quarter due to timing of government orders. Management expects these acquisitions to generate additional synergies, with some savings already being reinvested in higher-growth markets.

• Anti-counterfeiting recovery: The OSP (Optical Security and Performance) segment benefited from a rebound in demand for anti-counterfeiting products, supporting improved segment margins.

• Restructuring for growth: Viavi approved a workforce reduction plan expected to deliver $30 million in annual savings, with a portion intended for reinvestment in data center and aerospace initiatives. Management emphasized this move is focused on aligning resources with strategic growth areas rather than targeting specific product groups.

Drivers of Future Performance

Viavi’s outlook is anchored in ongoing demand from data center and aerospace customers, as well as operational realignment to concentrate resources on these high-growth segments.

• AI-driven data center investment: Management expects the ongoing build-out of AI and high-speed data centers to drive sustained demand for Viavi’s test and monitoring solutions. Increasing requirements for fiber network performance and real-time monitoring by hyperscalers and service providers are anticipated to expand the addressable market for both lab and field instruments.

• Aerospace and defense expansion: Viavi’s positioning, navigation, and timing products are seeing increased adoption in defense and industrial robotics markets, particularly as demand rises for resilient navigation in environments where GPS is unavailable or unreliable. Management sees this trend providing steady growth opportunities through expanded use cases in autonomous systems.

• Operational efficiencies and reinvestment: The company’s restructuring is expected to improve operating margins and free up capital for reinvestment in its fastest-growing segments. Management cautioned that while cost reductions will provide leverage, reinvestment is necessary to capture emerging opportunities, and any slowdown in the targeted end markets could temper anticipated gains.

Catalysts in Upcoming Quarters

In coming quarters, the StockStory team will monitor (1) sustained momentum in data center and aerospace demand, (2) the pace and effectiveness of Viavi’s workforce restructuring and reinvestment in growth segments, and (3) the integration of acquired product lines, particularly Spirent, and whether they deliver the anticipated synergies. Broader industry trends in AI and hyperscale infrastructure will also be critical to track.

Viavi Solutions currently trades at $21.80, up from $21.03 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).

Network testing solutions company Viavi Solutions reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 36.4% year on year to $369.3 million. On top of that, next quarter’s revenue guidance ($393 million at the midpoint) was surprisingly good and 10% above what analysts were expecting. Its non-GAAP profit of $0.22 per share was 17.2% above analysts’ consensus estimates.

Viavi Solutions (VIAV) Q4 CY2025 Highlights:

• Revenue: $369.3 million vs analyst estimates of $365.4 million (36.4% year-on-year growth, 1.1% beat)
• Adjusted EPS: $0.22 vs analyst estimates of $0.19 (17.2% beat)
• Adjusted EBITDA: $31.6 million vs analyst estimates of $75.07 million (8.6% margin, 57.9% miss)
• Revenue Guidance for Q1 CY2026 is $393 million at the midpoint, above analyst estimates of $357.2 million
• Adjusted EPS guidance for Q1 CY2026 is $0.23 at the midpoint, above analyst estimates of $0.15
• Operating Margin: 3.1%, down from 8.2% in the same quarter last year
• Market Capitalization: $4.62 billion

"VIAVI's performance for the second quarter came in at the high end of our guidance, driven by strength across most of our end markets. We expect the strong momentum and demand in the data center ecosystem and aerospace and defense applications to continue driving our anticipated growth this calendar year," said Oleg Khaykin, VIAVI's President and Chief Executive Officer.

Company Overview

Once known as JDS Uniphase before its 2015 rebranding, Viavi Solutions provides testing, monitoring and assurance solutions for telecommunications, cloud, enterprise, military, and other critical networks and infrastructure.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Viavi Solutions grew its sales at a sluggish 2.3% compounded annual growth rate. This fell short of our benchmarks and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Viavi Solutions’s annualized revenue growth of 10.8% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

This quarter, Viavi Solutions reported wonderful year-on-year revenue growth of 36.4%, and its $369.3 million of revenue exceeded Wall Street’s estimates by 1.1%. Company management is currently guiding for a 38% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 18.6% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and indicates its newer products and services will fuel better top-line performance.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Viavi Solutions was profitable over the last five years but held back by its large cost base. Its average operating margin of 7.5% was weak for an industrials business. This result is surprising given its high gross margin as a starting point.

Looking at the trend in its profitability, Viavi Solutions’s operating margin decreased by 9.7 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Viavi Solutions’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

This quarter, Viavi Solutions generated an operating margin profit margin of 3.1%, down 5.1 percentage points year on year. Since Viavi Solutions’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Viavi Solutions, its EPS declined by 3.1% annually over the last five years while its revenue grew by 2.3%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

We can take a deeper look into Viavi Solutions’s earnings to better understand the drivers of its performance. As we mentioned earlier, Viavi Solutions’s operating margin declined by 9.7 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Viavi Solutions, its two-year annual EPS growth of 30.8% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q4, Viavi Solutions reported adjusted EPS of $0.22, up from $0.13 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Viavi Solutions’s full-year EPS of $0.65 to grow 13.5%.

Key Takeaways from Viavi Solutions’s Q4 Results

We were impressed by Viavi Solutions’s optimistic EPS guidance for next quarter, which blew past analysts’ expectations. We were also glad its revenue guidance for next quarter trumped Wall Street’s estimates. On the other hand, its EBITDA missed. Overall, this print had some key positives. The stock traded up 2.7% to $21.61 immediately following the results.

Sure, Viavi Solutions had a solid quarter, but if we look at the bigger picture, is this stock a buy? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).

Network testing solutions company Viavi Solutions will be announcing earnings results this Wednesday after market hours. Here’s what to look for.

Viavi Solutions beat analysts’ revenue expectations by 1.7% last quarter, reporting revenues of $299.1 million, up 25.6% year on year. It was an exceptional quarter for the company, with EPS guidance for next quarter exceeding analysts’ expectations and revenue guidance for next quarter exceeding analysts’ expectations.

Is Viavi Solutions a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, analysts are expecting Viavi Solutions’s revenue to grow 34.9% year on year to $365.4 million, improving from the 6.4% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.19 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Viavi Solutions has missed Wall Street’s revenue estimates twice over the last two years.

Looking at Viavi Solutions’s peers in the electrical equipment segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Teledyne delivered year-on-year revenue growth of 7.3%, beating analysts’ expectations by 2.5%, and LSI reported flat revenue, topping estimates by 4.9%. Teledyne traded up 9.8% following the results while LSI was also up 8.6%.

Read our full analysis of Teledyne’s results here and LSI’s results here.

There has been positive sentiment among investors in the electrical equipment segment, with share prices up 8.7% on average over the last month. Viavi Solutions is up 11.8% during the same time and is heading into earnings with an average analyst price target of $19.57 (compared to the current share price of $20.23).