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01/11 03:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary reflects a positive sentiment with strong financial performance, including record-high revenue and improved margins. The Q&A section reveals optimistic guidance, particularly in the data center and aerospace sectors. Despite some uncertainties in specific segments, the overall outlook is favorable, with growth in key areas and strategic acquisitions. The market cap of $1.5 billion suggests a moderate reaction, leading to a positive stock price movement prediction of 2% to 8%.
Net Revenue (Q4 FY2025) $290.5 million, up 15.3% year-over-year. The increase was driven by strong demand for fiber lab and production products, growth in aerospace and defense products, and the acquisition of Inertial Labs.
Operating Margin (Q4 FY2025) 14.4%, up 350 basis points year-over-year. The improvement was due to higher revenue and favorable product mix.
Earnings Per Share (EPS, Q4 FY2025) $0.13, up $0.05 year-over-year. The increase was attributed to higher revenue and improved operating margins.
NSE Revenue (Q4 FY2025) $209.1 million, up 14.8% year-over-year. Growth was driven by strong demand for fiber lab and production products, data center ecosystem, aerospace and defense products, and the acquisition of Inertial Labs.
NSE Gross Margin (Q4 FY2025) 62.2%, up 10 basis points year-over-year. The increase was due to favorable product mix.
NSE Operating Margin (Q4 FY2025) 4.7%, up 290 basis points year-over-year. The improvement was due to higher revenue and favorable product mix, though slightly offset by fiscal year-end employee variable costs and higher R&D expenses.
OSP Revenue (Q4 FY2025) $81.4 million, up 16.6% year-over-year. The increase was driven by strength in anticounterfeiting and other products.
OSP Gross Margin (Q4 FY2025) 54.7%, up 170 basis points year-over-year. The improvement was due to higher volume and favorable product mix.
OSP Operating Margin (Q4 FY2025) 39.4%, up 460 basis points year-over-year. The increase was driven by higher revenue and favorable product mix.
Full Year Revenue (FY2025) $1.84 billion, up 8.4% year-over-year. Growth was driven by strong demand for lab and production and field products from the data center ecosystem, as well as growth in aerospace and defense products, partially offset by a decline in wireless and cable products.
Full Year Operating Margin (FY2025) 14.2%, up 270 basis points year-over-year. The improvement was due to higher revenue and favorable product mix.
Full Year EPS (FY2025) $0.47, up $0.14 year-over-year. The increase was attributed to higher revenue and improved operating margins.
Cash Flow from Operating Activities (Q4 FY2025) $23.8 million, down from $26.2 million in the same period last year. The decline was not explicitly explained.
CapEx (Q4 FY2025) $5.5 million, up from $3.8 million in the same period last year. The increase was not explicitly explained.
CapEx (Full Year FY2025) $27.8 million, up from $19.5 million in the prior year. The increase was not explicitly explained.
1.6-terabit test solution: Viavi launched the second-generation 1.6-terabit test solution, extending its leadership in the data center ecosystem.
Data center ecosystem: Strong demand for fiber lab and production products, driven by the data center ecosystem, is expected to continue into calendar 2026.
Aerospace and defense: Growth driven by high demand for positioning, navigation, and timing products, with expectations for continued growth in fiscal 2026.
Revenue growth: Q4 revenue was $290.5 million, up 15.3% year-over-year. Full fiscal year revenue was $1.84 billion, up 8.4% year-over-year.
Operating margin: Q4 operating margin was 14.4%, up 350 basis points year-over-year. Full fiscal year operating margin was 14.2%, up 270 basis points from fiscal 2024.
Cash and investments: Total cash and short-term investments at the end of Q4 were $429 million, compared to $40.2 million in Q3.
Acquisitions: Acquired Inertial Labs and announced the pending acquisition of Spirent's high-speed Ethernet, network security, and channel emulation business lines.
Diversification strategy: Focused on diversification into the data center ecosystem and aerospace and defense, offsetting traditional revenue seasonality.
Wireless Business Weakness: The recovery in the wireless infrastructure test business continues to be delayed due to business weakness at leading wireless NEMs. This sluggish demand is expected to persist in the medium term, impacting revenue growth in this segment.
Tariff Impacts: Some revenue was subject to newly imposed tariffs during the fourth quarter. While initial concerns were mitigated, ongoing management of tariff impacts remains a challenge.
Seasonal Revenue Variability: The company faces traditional revenue seasonality driven by service provider demand dynamics, which could lead to fluctuations in quarterly performance.
Employee Variable Costs and R&D Expenses: Higher fiscal year-end employee variable costs and increased R&D expenses slightly impacted operating margins in the NSE segment.
Economic Uncertainty: The company navigated a volatile macroeconomic environment, which poses ongoing risks to operational and financial performance.
Acquisition Integration Risks: The pending acquisition of Spirent's business lines and the recent acquisition of Inertial Labs involve integration risks, including achieving expected synergies and managing associated costs.
First Quarter Fiscal 2026 Revenue: Expected to be in the range of $290 million to $298 million, slightly up sequentially.
First Quarter Fiscal 2026 Operating Margin: Expected to be 15%, plus or minus 40 basis points.
First Quarter Fiscal 2026 EPS: Expected to be between $0.13 and $0.14.
NSE Revenue for First Quarter Fiscal 2026: Expected to be approximately $211 million, plus or minus $3 million, with an operating margin of 5.8%, plus or minus 40 basis points.
OSP Revenue for First Quarter Fiscal 2026: Expected to be approximately $83 million, plus or minus $1 million, with an operating margin of 38.3%, plus or minus 20 basis points.
Tax Expenses for First Quarter Fiscal 2026: Expected to be around $8.5 million, plus or minus $500,000.
Other Income and Expenses for First Quarter Fiscal 2026: Expected to reflect a net expense of approximately $5 million.
Share Count for First Quarter Fiscal 2026: Expected to be around 228.6 million shares.
Data Center Ecosystem Demand: Strong demand expected to continue well into calendar 2026.
Aerospace and Defense Business: High demand for positioning, navigation, and timing products expected to continue throughout fiscal 2026.
Fiber CapEx Spend by North American Service Providers: Gradual recovery expected to accelerate during fiscal 2026.
Wireless Infrastructure Test Demand: Expected to remain sluggish in the medium term.
OSP Revenue for Fiscal Q1 2026: Expected to be slightly up quarter-on-quarter, driven by seasonally stronger demand for 3D sensing products.
Impact of Tariffs: Company is comfortable in its ability to manage the ongoing impact of newly imposed tariffs.
Growth Strategy for Fiscal 2026: Diversification into the data center ecosystem and aerospace and defense expected to drive growth.
Share Repurchase Program: During the quarter, we did not purchase any shares of our stock. For the full year, we purchased 2 million shares for about $16.4 million. We have almost $200 million remaining under our current authorized share repurchase program.
The earnings call indicates strong financial performance and growth prospects, especially in the data center and aerospace sectors. The Spirent acquisition is expected to be accretive sooner than expected, and there's optimism around wireless recovery and Tier 1 service provider spending. While there are some concerns about the smartphone segment and unclear responses, overall sentiment is positive. Considering the company's market cap, the predicted stock price movement is likely to be positive, between 2% to 8%.
The earnings call summary reflects a positive sentiment with strong financial performance, including record-high revenue and improved margins. The Q&A section reveals optimistic guidance, particularly in the data center and aerospace sectors. Despite some uncertainties in specific segments, the overall outlook is favorable, with growth in key areas and strategic acquisitions. The market cap of $1.5 billion suggests a moderate reaction, leading to a positive stock price movement prediction of 2% to 8%.
The company reported strong financial performance with revenue and EPS growth, and higher operating margins. Despite tariff concerns, management is optimistic about passing costs to customers and expects strong demand in key segments like aerospace and defense. The acquisition of Inertial Labs and growth in fiber monitoring systems and wireless business further enhance prospects. However, the lack of share repurchases and vague responses on tariffs and fiber lab impact are slight concerns. Given the market cap and overall positive indicators, a stock price increase of 2% to 8% is anticipated.
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