Viavi Solutions Inc (VIAV) Q1 2025 Earnings Call Highlights: Navigating Challenges with ...

GuruFocus News
4 min read

In This Article:

  • Net Revenue: $238.2 million, down 5.5% sequentially and 3.9% year over year.

  • Operating Margin: 10%, decreased 90 basis points sequentially and 240 basis points year over year.

  • EPS: 6 cents, down 2 cents sequentially and 3 cents year over year.

  • NSE Revenue: $159.4 million, down 6.5% year over year.

  • OSP Revenue: $78.8 million, up 1.7% year over year.

  • Cash and Short-term Investments: $497.9 million at the end of Q1.

  • Cash Flow from Operating Activities: $13.5 million, compared to $50.3 million in the same period last year.

  • CapEx: $7.3 million, compared to $6.7 million in the same period last year.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Viavi Solutions Inc (NASDAQ:VIAV) reported stronger-than-expected demand in the OSP segment, driven by anti-counterfeiting and 3D sensing products.

  • The company is seeing signs of stabilization and recovery in the NSE segment, with expectations for stronger performance in the second half of fiscal 2025.

  • Viavi Solutions Inc (NASDAQ:VIAV) launched the Valor Lab in Chandler, Arizona, enhancing its capabilities in testing for the OpenRAN ecosystem.

  • The company introduced the industry's first 1.6 terabits per second high-speed Ethernet testing for AI workloads, positioning itself as a leader in the data center and high-performance computing markets.

  • Viavi Solutions Inc (NASDAQ:VIAV) has maintained a strong cash position with total cash and short-term investments of $497.9 million at the end of Q1.

Negative Points

  • Net revenue for the quarter was $238.2 million, slightly below the midpoint of the guidance range and down 3.9% year-over-year.

  • Operating margin for the first fiscal quarter was at the low end of the guidance range, decreasing 90 basis points from the prior quarter.

  • NSE revenue was at the low end of the guidance range, driven by slower order pace from service providers for field instruments.

  • The SE segment experienced a 12.7% decline in revenue year-over-year, primarily due to conservative spending by enterprise customers.

  • Cash flow from operating activities decreased significantly to $13.5 million from $50.3 million in the same period last year.

Q & A Highlights

Q: Can you discuss the linearity of bookings throughout the quarter and any notable trends? A: Oleg Khaykin, President and CEO, explained that bookings were largely as expected, with some major service providers preferring to start taking products in the second fiscal quarter. There was a noticeable increase in engagement and orders for Q2, Q3, and even Q4, indicating a pivot in operator behavior. This was driven by significant events such as AT&T's aggressive fiber deployment plans and Verizon's re-entry into the fiber market, which spurred cable providers to accelerate their network upgrades.

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