Viavi Solutions (VIAV 9.84%), a leading provider of network test equipment and optical security products, reported its financial results for the quarter that ended June 28, 2025, on August 7, 2025. The most significant news in this earnings release is that both GAAP revenue and non-GAAP earnings per share surpassed analyst expectations, with continued growth in key business segments and a return to profitability on a year-over-year basis for Q4 FY2025 and FY2025 (GAAP). Revenue (GAAP) reached $290.5 million, ahead of the $285.19 million GAAP consensus, and non-GAAP earnings per share climbed to $0.13, topping the $0.12 analyst estimate (non-GAAP). Overall, the quarter showed tangible progress in both top- and bottom-line metrics, supported by improved operating margins in FY2025, continued strength in data center and aerospace markets, and the effective handling of one-time tariff headwinds.
| Metric | Q4 FY25(Three Months Ended June 28, 2025) | Q4 FY25 Estimate | Q4 FY24(Three Months Ended June 29, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.13 | $0.12 | $0.08 | 62.5 % |
| Revenue (GAAP) | $290.5 million | N/A | $252.0 million | 15.3 % |
| Operating Margin (Non-GAAP) | 14.4 % | 10.9 % | 3.5 pp | |
| Net Income (Non-GAAP) | $29.7 million | $17.1 million | 73.7 % | |
| Operating Margin (GAAP) | 5.3 % | (2.3 %) | 7.6 pp |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q3 2025 earnings report.
About the Business and Recent Focus Areas
Viavi Solutions operates in two main business areas: network testing and monitoring instruments, and optical security and performance products. Its network equipment is used by telecommunications companies, data centers, and government agencies for deploying and maintaining advanced fiber and wireless networks. In optical security, Viavi supplies materials and filters that help prevent counterfeiting and enable 3D sensing in devices such as smartphones.
The company’s recent priorities include extending its leadership in testing solutions for new technologies like 5G wireless and high-speed data centers, while expanding its presence in anti-counterfeiting and aerospace markets. Staying ahead relies on innovation, strategic acquisitions, and targeted investments in research and development (R&D) to keep up with shifting technology trends and security demands.
Quarter Highlights: Revenue Growth and Margin Gains
Revenue (GAAP) climbed 15.3% year-over-year in Q4 FY2025, surpassing analyst estimates and hitting the upper end of company guidance. Non-GAAP earnings per share also topped expectations with a 62.5% year-over-year increase (non-GAAP). These results were fueled by strength in both of Viavi’s reporting segments: Network and Service Enablement (NSE), and Optical Security and Performance Products (OSP).
The NSE segment, which supplies network testing tools and monitoring equipment, saw revenue rise to $209.1 million (GAAP), up 14.8% from a year earlier. Aerospace and defense, especially after the company’s acquisition of Inertial Labs, contributed further, notably with positioning, navigation, and timing (PNT) solutions. Gross margin in this segment was steady, at 62.2%.
Viavi’s OSP segment, which produces anti-counterfeiting pigments and 3D sensing filters, posted a 16.6% increase in GAAP revenue, reaching $81.4 million. NSE segment operating margin improved, supported by stronger sales in anti-counterfeiting. 3D sensing results were weaker in the quarter, consistent with typical seasonal patterns, but were balanced by the resilience in anti-counterfeiting orders.
Company-wide, operating margins improved on both a GAAP and non-GAAP basis. On a non-GAAP basis, the non-GAAP operating margin of 14.4% was a 3.5 percentage point gain from last year. GAAP net income moved into positive territory, shifting from a GAAP net loss in Q4 FY2024 to a GAAP net income as both revenue and operational efficiency improved. The company also managed a $3 million one-time tariff impact, which affected margin in recent quarters but is expected to have less impact in coming quarters as future contracts now pass tariff costs along to customers.
Viavi invested $57.2 million in research and development, up from $52.5 million a year earlier. This spending supports new solutions for fiber and wireless networks and innovative technologies for anti-counterfeiting and 3D sensing. Integration of the Inertial Labs acquisition boosted inventory balances but is expected to strengthen future growth and segment diversification.
Looking Forward: Guidance and What to Watch
For the next quarter, Viavi’s management expects revenue between $290 million and $298 million for Q1 FY2026. Non-GAAP earnings per share are forecast at $0.13 to $0.14 for Q1 FY2026, also flat with the recent period. This guidance suggests that growth could slow after the seasonally strong finish, a trend attributed in part to timing of customer orders and recent product mix dynamics. Management referenced “limited visibility” in its product lines and noted that order phasing, especially from telecom service provider customers, could cause revenue to shift between quarters.
Management stated it expects “positive momentum in our end markets to continue through calendar year 2025,” but advised caution about projecting continued quarterly growth. Key areas to watch include Viavi’s ability to offset possible tariff and cost headwinds, capture further gains in data center and aerospace/defense demand, and manage debt from recent acquisitions. As future quarters unfold, investors should monitor progress integrating new businesses, the impact of evolving supply chains, and whether secular tech trends in data centers and 5G continue to drive underlying demand.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
