What changed in this filing

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Item 1. Financial Statements

2025-01-31 compared with 2024-11-01 · 256 added, 150 removed, 675 unchanged (38% of the section changed)

3 unchanged sentences

(in millions, except per share data)

Three Months Ended

September 28, 2024 September 30, 2023

Three Months Ended Six Months Ended

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

Product revenue $ 225.7 $ 210.9 $ 423.2 $ 416.5

11 unchanged sentences

Amortization of other intangibles 1.0 1.4 2.1 3.5

Restructuring and related benefits — ( 0.8 )

Restructuring and related charges (benefits) 1.2 ( 0.1 ) 1.2 ( 0.9 )

Total operating expenses 138.6 125.6 263.2 254.0

4 unchanged sentences

Provision for income taxes 9.5 7.6 18.5 16.2

Net (loss) income $ ( 1.8 ) $ 9.8

Net (loss) income per share:

Net income $ 9.1 $ 10.7 $ 7.3 $ 20.5

Net income per share:

Basic $ 0.04 $ 0.05 $ 0.03 $ 0.09

5 unchanged sentences

VIAVI SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in millions)

Three Months Ended

September 28, 2024 September 30, 2023

Net (loss) income $ ( 1.8 ) $ 9.8

Other comprehensive income (loss):

Three Months Ended Six Months Ended

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

Net income $ 9.1 $ 10.7 $ 7.3 $ 20.5

Other comprehensive (loss) income:

Net change in cumulative translation adjustment, net of tax ( 41.3 ) 29.7 ( 11.0 ) 9.3

Amortization of net actuarial losses (gains) and other pension adjustments

0.1 — 0.2 ( 0.1 )

Net change in accumulated other comprehensive loss ( 41.2 ) 29.7 ( 10.8 ) 9.2

Comprehensive income (loss) $ 28.6 $ ( 10.7 )

Comprehensive (loss) income $ ( 32.1 ) $ 40.4 $ ( 3.5 ) $ 29.7

The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

2 unchanged sentences

(in millions, except share and par value data)

September 28, 2024 June 29, 2024

December 28, 2024 June 29, 2024

Current assets:

27 unchanged sentences

1 million shares authorized,

no shares issued or outstanding at September 28, 2024 and June 29, 2024

no shares issued or outstanding at December 28, 2024 and June 29, 2024

Common stock, $ 0.001 par value;

1 billion shares authorized;

222 million shares at September 28, 2024 and June 29, 2024, issued and outstanding

222 million shares at December 28, 2024 and June 29, 2024, issued and outstanding

Additional paid-in capital 70,493.0 70,471.9

7 unchanged sentences

(in millions)

Three Months Ended

September 28, 2024 September 30, 2023

Six Months Ended

December 28, 2024 December 30, 2023

OPERATING ACTIVITIES:

Net (loss) income $ ( 1.8 ) $ 9.8

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net income $ 7.3 $ 20.5

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation expense 19.5 19.5

26 unchanged sentences

Withholding tax payment on vesting of restricted stock and performance- based awards ( 8.3 ) ( 9.3 )

Payment of financing obligations ( 0.1 ) ( 0.1 )

Proceeds from employee stock purchase plan 2.7 3.0

Payment of acquisition related obligations — ( 1.0 )

Payment of acquisition related contingent consideration — ( 0.9 )

Other financing activities 0.2 —

Net cash used in financing activities $ ( 21.9 ) $ ( 18.3 )

Effect of exchange rates on cash, cash equivalents and restricted cash $ ( 5.9 ) $ 4.9

Net (decrease) increase in cash, cash equivalents and restricted cash ( 3.7 ) 12.3

Net increase in cash, cash equivalents and restricted cash 14.6 37.0

Cash, cash equivalents and restricted cash at the beginning of the period (1)

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(1) These amounts include both current and non-current balances of restricted cash totaling $ 10.5 million and $ 9.1 million as of June 29, 2024 and July 1, 2023, respectively.

(2) These amounts include both current and non-current balances of restricted cash totaling $ 10.2 million and $ 7.3 million as of September 28, 2024 and September 30, 2023, respectively.

(2) These amounts include both current and non-current balances of restricted cash totaling $ 8.4 million and $ 8.9 million as of December 28, 2024 and December 30, 2023, respectively.

The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

2 unchanged sentences

(in millions)

Three Months Ended September 28, 2024

Three Months Ended December 28, 2024

Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total

Shares Amount

Balance at June 29, 2024 221.9 $ 0.2 $ 70,471.9 $ ( 69,646.5 ) $ ( 144.0 ) $ 681.6

Net loss — — — ( 1.8 ) — ( 1.8 )

Balance at September 28, 2024 221.8 $ 0.2 $ 70,480.2 $ ( 69,664.7 ) $ ( 113.6 ) $ 702.1

Net income — — — 9.1 — 9.1

Other comprehensive loss — — — — ( 41.2 ) ( 41.2 )

Shares issued under employee stock plans, net of tax 0.3 — ( 0.9 ) — — ( 0.9 )

Stock-based compensation — — 13.7 — — 13.7

Balance at December 28, 2024 222.1 $ 0.2 $ 70,493.0 $ ( 69,655.6 ) $ ( 154.8 ) $ 682.8

Three Months Ended December 30, 2023

Additional Paid-In Capital

Accumulated Deficit

Accumulated Other Comprehensive Loss

Balance at September 30, 2023 222.4 $ 0.2 $ 70,432.4 $ ( 69,600.9 ) $ ( 156.5 ) $ 675.2

Net income — — — 10.7 — 10.7

Other comprehensive income — — — — 29.7 29.7

1 unchanged sentence

Stock-based compensation — — 12.6 — — 12.6

Balance at December 30, 2023 222.6 $ 0.2 $ 70,444.8 $ ( 69,590.2 ) $ ( 126.8 ) $ 728.0

Six Months Ended December 28, 2024

Additional Paid-In Capital

Accumulated Deficit

Accumulated Other Comprehensive Loss

Balance at June 29, 2024 221.9 $ 0.2 $ 70,471.9 $ ( 69,646.5 ) $ ( 144.0 ) $ 681.6

Net income — — — 7.3 — 7.3

Other comprehensive loss — — — — ( 10.8 ) ( 10.8 )

Shares issued under employee stock plans, net of tax 2.2 — ( 5.6 ) — — ( 5.6 )

Stock-based compensation — — 26.4 — — 26.4

Repurchase of common stock ( 2.0 ) — 0.3 ( 16.4 ) — ( 16.1 )

Balance at September 28, 2024 221.8 $ 0.2 $ 70,480.2 $ ( 69,664.7 ) $ ( 113.6 ) $ 702.1

Three Months Ended September 30, 2023

Balance at December 28, 2024 222.1 $ 0.2 $ 70,493.0 $ ( 69,655.6 ) $ ( 154.8 ) $ 682.8

Six Months Ended December 30, 2023

Additional Paid-In Capital

3 unchanged sentences

Net income — — — 20.5 — 20.5

Other comprehensive loss — — — — ( 20.5 ) ( 20.5 )

Other comprehensive income — — — — 9.2 9.2

Shares issued under employee stock plans, net of tax 2.1 — ( 6.3 ) — — ( 6.3 )

1 unchanged sentence

Repurchase of common stock ( 1.0 ) — — ( 10.0 ) — ( 10.0 )

Balance at September 30, 2023 222.4 $ 0.2 $ 70,432.4 $ ( 69,600.9 ) $ ( 156.5 ) $ 675.2

Balance at December 30, 2023 222.6 $ 0.2 $ 70,444.8 $ ( 69,590.2 ) $ ( 126.8 ) $ 728.0

The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.

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The financial information for Viavi Solutions Inc.

(VIAVI, also referred to as the Company, we, our and us) for the three months ended September 28, 2024 and September 30, 2023 is unaudited and includes all normal and recurring adjustments the Company’s management considers necessary for a fair statement of the financial information set forth herein.

(VIAVI, also referred to as the Company, we, our and us) for the three and six months ended December 28, 2024 and December 30, 2023 is unaudited and includes all normal and recurring adjustments the Company’s management considers necessary for a fair statement of the financial information set forth herein.

The accompanying Consolidated Financial Statements are presented in accordance with accounting principles generally accepted in the United States of America (U.S.

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For further information please refer to the Consolidated Financial Statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 29, 2024.

There have been no material changes to the Company’s accounting policies during the three months ended September 28, 2024 as compared to the significant accounting policies presented in “Note 1.

There have been no material changes to the Company’s accounting policies during the three and six months ended December 28, 2024 as compared to the significant accounting policies presented in “Note 1.

Basis of Presentation” of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report for the year ended June 29, 2024 on Form 10-K, filed with the SEC on August 16, 2024.

1 unchanged sentence

GAAP for complete financial statements.

The results for the three months ended September 28, 2024 and September 30, 2023 may not be indicative of results for the fiscal year ending June 28, 2025 or any future periods.

The results for the three and six months ended December 28, 2024 and December 30, 2023 may not be indicative of results for the fiscal year ending June 28, 2025 or any future periods.

The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30th.

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Recently Issued Accounting Pronouncements

SEC Climate Rules

In March 2024, the SEC issued its final climate disclosure rules, which require the disclosure of climate-related information in annual reports and registration statements.

The rules require disclosure in the audited financial statements of certain effects of severe weather events and other natural conditions above certain financial thresholds, as well as amounts related to carbon offsets and renewable energy credits or certificates, if material.

On April 4, 2024, the SEC voluntarily stayed the implementation of the final rules pending the completion of judicial review of the consolidated challenges to the final rules by the Court of Appeals for the Eighth Circuit.

The final rules, as originally issued, would be effective for the Company in various fiscal years, starting with its Annual Report on Form 10-K for fiscal year 2026.

Disclosures pursuant to the final rules, as originally issued, would be required prospectively, with information for prior periods required only to the extent it was previously disclosed in an SEC filing.

The Company is currently evaluating the impact of the final rules on its Consolidated Financial Statements and disclosures and continue to monitor the status of the related legal challenges.

Accounting Standards Issued But Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2023-09, Improvements to Income Tax Disclosures (Topic 740) , to enhance the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information.

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments , which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment of convertible debt.

This guidance is effective for fiscal years beginning after December 15, 2025 (fiscal 2027 for the Company), and interim periods within those annual reporting periods, with early and retrospective adoption permitted.

This ASU is not expected to have a material impact on our Consolidated Financial Statements or related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses , which requires disaggregated disclosure of income statement expenses for public business entities.

The objective of this guidance is to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions such as Cost of revenues, Research and development (R&D) and Selling, general and administrative (SG&A).

This guidance is effective for fiscal years beginning after December 15, 2026 (fiscal 2028 for the Company), and interim periods within fiscal years beginning after December 15, 2027, with early and retrospective adoption permitted.

The Company is evaluating the impact of adopting this new accounting guidance on its Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740) , to enhance the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information.

This guidance is effective for fiscal years beginning after December 15, 2024 (fiscal 2026 for the Company), with early and retrospective adoption permitted.

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The amendments in this update will require public entities to disclose significant segment expenses included within segment profit and loss that are regularly provided to the Company’s Chief Executive Officer as the Company’s Chief Operating Decision Maker (CODM).

This guidance is effective for fiscal years beginning after December 15, 2023 (fiscal 2025 for the Company), and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted and will be applied retrospectively to all prior periods presented in the financial statements.

This guidance is effective for fiscal years beginning after December 15, 2023 (fiscal 2025 for the Company), and interim periods within fiscal years beginning after December 15, 2024 (fiscal 2026 for the Company), with early adoption permitted and will be applied retrospectively to all prior periods presented in the financial statements.

The Company is evaluating the impact of adopting this new accounting guidance on its Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEC Climate Rules

In March 2024, the SEC issued its final climate disclosure rules, which require the disclosure of climate-related information in annual reports and registration statements.

The Company is currently evaluating the impact of the final rules on its Consolidated Financial Statements and disclosures and continue to monitor the status of the related legal challenges.

Earnings Per Share

The following table sets forth the computation of basic and diluted net (loss) income per share ( in millions, except per share data ):

Three Months Ended

September 28, 2024 September 30, 2023

Net (loss) income $ ( 1.8 ) $ 9.8

The following table sets forth the computation of basic and diluted net income per share ( in millions, except per share data ):

Three Months Ended Six Months Ended

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

Net income $ 9.1 $ 10.7 $ 7.3 $ 20.5

Weighted-average shares outstanding:

2 unchanged sentences

Diluted 224.8 223.5 224.4 223.9

Net (loss) income per share:

Net income per share:

Basic $ 0.04 $ 0.05 $ 0.03 $ 0.09

Diluted $ 0.04 $ 0.05 $ 0.03 $ 0.09

The following table sets forth the weighted-average potentially dilutive securities excluded from the computation of the diluted net (loss) income per share because their effect would have been anti-dilutive ( in millions ):

Three Months Ended

September 28, 2024 (1)

September 30, 2023 (1)(2)

The following table sets forth the weighted-average potentially dilutive securities excluded from the computation of the diluted net income per share because their effect would have been anti-dilutive ( in millions ):

Three Months Ended Six Months Ended

December 28, 2024 (1)

December 30, 2023 (1)(2)

December 28, 2024 (1)

December 30, 2023 (1)(2)

Restricted stock units 1.2 5.6 1.8 3.1

11 unchanged sentences

The Company’s accumulated other comprehensive loss consists of the accumulated net unrealized gains or losses on available-for-sale investments, foreign currency translation adjustments and change in unrealized components of defined benefit obligations.

For the three months ended September 28, 2024, the changes in accumulated other comprehensive loss, net of tax, by component were as follows ( in millions ):

For the six months ended December 28, 2024, the changes in accumulated other comprehensive loss, net of tax, by component were as follows ( in millions ):

Unrealized losses on available-for sale investments Foreign

1 unchanged sentence

Beginning balance as of June 29, 2024 $ ( 5.3 ) $ ( 131.4 ) $ ( 7.3 ) $ ( 144.0 )

Other comprehensive income before reclassification — 30.3 — 30.3

Other comprehensive loss before reclassification — ( 11.0 ) — ( 11.0 )

Amounts reclassified out of accumulated other comprehensive loss — — 0.2 0.2

Net current-period other comprehensive income — 30.3 0.1 30.4

Ending balance as of September 28, 2024 $ ( 5.3 ) $ ( 101.1 ) $ ( 7.2 ) $ ( 113.6 )

(1) The amount reclassified out of accumulated other comprehensive loss represents the amortization of actuarial loss included as a component of Cost of revenues, Research and development (R&D) and Selling, general and administrative (SG&A) in the Consolidated Statements of Operations, net of reclassification adjustments, for the three months ended September 28, 2024.

There was no tax impact for the three months ended September 28, 2024.

Net current-period other comprehensive loss — ( 11.0 ) 0.2 ( 10.8 )

Ending balance as of December 28, 2024 $ ( 5.3 ) $ ( 142.4 ) $ ( 7.1 ) $ ( 154.8 )

(1) The amount reclassified out of accumulated other comprehensive loss represents the amortization of actuarial loss included as a component of Cost of revenues, R&D and SG&A in the Consolidated Statements of Operations, net of reclassification adjustments, for the six months ended December 28, 2024.

There was no tax impact for the six months ended December 28, 2024.

Refer to “Note 17.

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Acquisition-related Contingent Consideration

The following table provides a reconciliation of changes in the fair value of the Company’s earn-out liabilities associated with the Company’s acquisitions for the three months ended September 28, 2024 and September 30, 2023 ( in millions ):

Three Months Ended

September 28, 2024 September 30, 2023

The following table provides a reconciliation of changes in the fair value of the Company’s earn-out liabilities associated with the Company’s acquisitions for the three and six months ended December 28, 2024 and December 30, 2023 ( in millions ):

Three Months Ended Six Months Ended

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

Beginning period balance $ 6.0 $ 18.3 $ 9.5 $ 19.7

Fair value adjustment of earn-out liabilities ( 3.5 ) ( 1.4 )

Payment of contingent consideration — ( 0.7 ) — ( 0.7 )

Fair value adjustment ( 3.9 ) ( 7.0 ) ( 7.4 ) ( 8.4 )

Ending period balance $ 2.1 $ 10.6 $ 2.1 $ 10.6

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Gross receivables include both billed and unbilled receivables (including Contract assets).

As of September 28, 2024, and June 29, 2024, the Company had total unbilled receivables of $ 14.4 million and $ 16.3 million, respectively.

As of December 28, 2024, and June 29, 2024, the Company had total unbilled receivables of $ 11.2 million and $ 16.3 million, respectively.

The Company also has short-term and long-term deferred revenues related to undelivered product and professional services, consisting of installations and consulting engagements, which are recognized as the Company's performance obligations under the contract are completed and accepted by the customer.

The following table presents the activity related to deferred revenue ( in millions ):

September 28, 2024

Three Months Ended

December 28, 2024

Three Months Ended Six Months Ended

Deferred revenue:

2 unchanged sentences

Revenue recognized during the period (2)

( 30.3 ) ( 57.8 )

Balance at end of period $ 83.7 $ 83.7

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Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, adjustments for revenue that have not materialized, and currency fluctuations.

The value of the transaction price allocated to remaining performance obligations as of September 28, 2024, was $ 258.9 million.

The value of the transaction price allocated to remaining performance obligations as of December 28, 2024, was $ 272.8 million.

The Company expects to recognize approximately 90 % of remaining performance obligations as revenue within the next 12 months, and the remainder thereafter.

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June 29, 2024 Charged to Costs and Expenses Deductions (1)

September 28, 2024

December 28, 2024

Allowance for credit losses $ 1.6 $ 0.7 $ ( 0.5 ) $ 1.8

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The following table presents the components of inventories, net ( in millions ):

September 28, 2024 June 29, 2024

December 28, 2024 June 29, 2024

Finished goods $ 45.8 $ 44.6

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The following table presents the components of prepayments and other current assets ( in millions ):

September 28, 2024 June 29, 2024

December 28, 2024 June 29, 2024

Refundable income taxes $ 22.0 $ 28.5

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Advances to contract manufacturers 4.8 5.7

Transaction tax receivables 2.1 3.3

Fair value of forward contracts 3.1 1.7

Transaction tax receivables 2.2 3.3

Asset held for sale — 2.5

3 unchanged sentences

The following table presents the components of other non-current assets ( in millions ):

September 28, 2024 June 29, 2024

December 28, 2024 June 29, 2024

Operating right-of-use (ROU) assets $ 32.7 $ 35.8

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The following table presents the components of other current liabilities ( in millions ):

September 28, 2024 June 29, 2024

December 28, 2024 June 29, 2024

Operating lease liabilities $ 9.4 $ 9.8

Interest payable 7.9 5.1

Fair value of forward contracts 7.8 1.5

Income tax payable 6.1 5.3

Restructuring accrual 5.7 14.1

Transaction tax payable 4.5 4.0

Interest payable 5.1 5.1

Warranty accrual 4.2 3.4

Fair value of forward contracts 3.3 1.5

Transaction tax payable 3.3 4.0

Other current liabilities 7.8 14.3

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The following table presents components of other non-current liabilities ( in millions ):

September 28, 2024 June 29, 2024

December 28, 2024 June 29, 2024

Pension and post-employment benefits $ 50.3 $ 51.2

Operating lease liabilities 25.6 25.7

Long-term deferred revenue 26.0 25.7

Operating lease liabilities 23.3 25.7

Uncertain tax position 17.5 17.0

1 unchanged sentence

Deferred tax liability 7.4 11.7

Fair value of contingent consideration (Note 5) 6.0 9.5

Asset retirement obligations 3.1 3.0

Warranty accrual 2.6 4.0

Fair value of contingent consideration (Note 5) 2.1 9.5

Restructuring accrual — 0.8

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Short-Term Investments

As of September 28, 2024, the Company’s short-term investments of $ 25.2 million were comprised of 30-day term deposits of $ 23.6 million and trading securities related to the deferred compensation plan of $ 1.6 million, of which $ 1.4 million was invested in equity securities, $ 0.1 million was invested in money market instruments and $ 0.1 million was invested in debt securities.

As of December 28, 2024, the Company’s short-term investments of $ 21.4 million were comprised of 30-day term deposits of $ 19.8 million and trading securities related to the deferred compensation plan of $ 1.6 million, of which $ 1.5 million was invested in equity securities and $ 0.1 million was invested in money market instruments.

As of June 29, 2024, the Company’s short-term investments of $ 19.9 million were comprised of 30-day term deposits of $ 18.4 million and trading securities related to the deferred compensation plan of $ 1.5 million, of which $ 1.4 million was invested in equity securities and $ 0.1 million was invested in debt securities.

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This investment is carried at cost and because the investment does not have a readily determinable fair value it will be adjusted for changes resulting from observable price changes under the Measurement Alternative methodology.

There were no impairments or adjustments to the carrying value for the three months ended September 28, 2024.

There were no impairments or adjustments to the carrying value for the three and six months ended December 28, 2024.

Non-Designated Foreign Currency Forward Contracts

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The Company does not use these foreign currency forward contracts for trading purposes.

As of September 28, 2024, the Company had forward contracts that were effectively closed but not settled with the counterparties as of the balance sheet date.

As of December 28, 2024, the Company had forward contracts that were effectively closed but not settled with the counterparties as of the balance sheet date.

Therefore, the fair value of these contracts of $ 3.1 million and $ 7.8 million is reflected as Prepayments and other current assets and Other current liabilities on the Consolidated Balance Sheets, respectively.

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therefore, the fair value of the contracts is not significant.

As of September 28, 2024 and June 29, 2024, the notional amounts of the forward contracts that the Company held to purchase foreign currencies were $ 91.2 million and $ 81.9 million, respectively, and the notional amounts of forward contracts that the Company held to sell foreign currencies were $ 23.9 million and $ 26.8 million, respectively.

As of December 28, 2024 and June 29, 2024, the notional amounts of the forward contracts that the Company held to purchase foreign currencies were $ 189.5 million and $ 81.9 million, respectively, and the notional amounts of forward contracts that the Company held to sell foreign currencies were $ 174.0 million and $ 26.8 million, respectively.

The change in the fair value of these foreign currency forward contracts is recorded as gain or loss in the Consolidated Statements of Operations as a component of Interest and other income, net.

The cash flows related to the settlement of foreign currency forward contracts are classified as operating activities.

The foreign exchange forward contracts incurred a gain of $ 1.4 million for the three months ended September 28, 2024 and a loss of $ 3.6 million for the three months ended September 30, 2023, respectively.

The foreign exchange forward contracts incurred losses of $ 4.7 million and $ 3.3 million for the three and six months ended December 28, 2024, respectively, and a gain of $ 3.4 million and a loss of $ 0.1 million for the three and six months ended December 30, 2023, respectively.

VIAVI SOLUTIONS INC.

3 unchanged sentences

There is an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available.

Observable inputs are inputs which market participants would use in valuing an asset or liability and are developed based on market data obtained from sources independent of the Company.

Unobservable inputs are inputs which reflect the assumptions market participants would use in valuing an asset or liability.

Observable inputs are inputs that market participants would use in valuing an asset or liability and are developed based on market data obtained from sources independent of the Company.

Unobservable inputs are inputs that reflect the assumptions market participants would use in valuing an asset or liability.

The three levels of inputs that may be used to measure fair value are as follows:

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The Company’s assets and liabilities measured at fair value for the periods presented are as follows ( in millions ):

September 28, 2024 June 29, 2024

December 28, 2024 June 29, 2024

Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3

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(1) Included in Other non-current assets on the Consolidated Balance Sheets.

(2) Includes, as of September 28, 2024, $ 281.0 million in Cash and cash equivalents, $ 4.7 million in Restricted cash and $ 3.7 million in Other non-current assets on the Consolidated Balance Sheets.

(2) Includes, as of December 28, 2024, $ 209.3 million in Cash and cash equivalents, $ 3.3 million in Restricted cash and $ 3.3 million in Other non-current assets on the Consolidated Balance Sheets.

Includes, as of June 29, 2024, $ 286.7 million in Cash and cash equivalents, $ 4.9 million in Restricted cash and $ 3.7 million in Other non-current assets on the Consolidated Balance Sheets.

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The Company’s debt measured at fair value for the periods presented is as follows ( in millions ):

September 28, 2024 June 29, 2024

December 28, 2024 June 29, 2024

Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3

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Currency translation ( 1.4 ) ( 0.4 ) — ( 1.8 )

Balance as of September 28, 2024 $ 406.1 $ 12.9 $ 42.2 $ 461.2

Balance as of December 28, 2024 $ 396.7 $ 12.2 $ 42.2 $ 451.1

The Company tests goodwill for impairment at the reporting unit level annually during the fourth quarter of each fiscal year, or more frequently if events or circumstances indicate that the asset may be impaired.

In the fourth quarter of fiscal 2024, the Company performed a qualitative assessment of goodwill impairment and concluded that it was more likely than not that the fair value of each reporting unit exceeded its carrying amount and that no indication of impairment existed.

There were no events or changes in circumstances which triggered an impairment review during the three months ended September 28, 2024.

There were no events or changes in circumstances that triggered an impairment review during the three and six months ended December 28, 2024.

Acquired Developed Technology and Other Intangibles

The following tables present details of the Company’s acquired developed technology, customer relationships and other intangibles as of September 28, 2024 and June 29, 2024 ( in millions ):

As of September 28, 2024 Gross Carrying Amount Accumulated Amortization Net

The following tables present details of the Company’s acquired developed technology, customer relationships and other intangibles as of December 28, 2024 and June 29, 2024 ( in millions ):

As of December 28, 2024 Gross Carrying Amount Accumulated Amortization Net

Acquired developed technology $ 435.3 $ ( 407.9 ) $ 27.4

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The following table presents the amortization recorded relating to acquired developed technology, customer relationships and other intangibles ( in millions ):

Three Months Ended

September 28, 2024 September 30, 2023

Three Months Ended Six Months Ended

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

Cost of revenues $ 3.3 $ 3.4 $ 6.6 $ 6.9

1 unchanged sentence

Total amortization of intangible assets $ 4.3 $ 4.8 $ 8.7 $ 10.4

Based on the carrying amount of acquired developed technology, customer relationships and other intangibles as of September 28, 2024, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows ( in millions ):

Based on the carrying amount of acquired developed technology, customer relationships and other intangibles as of December 28, 2024, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows ( in millions ):

Remainder of 2025 $ 7.1

1 unchanged sentence

The acquired developed technology, customer relationships and other intangibles balances are adjusted quarterly to record the effect of currency translation adjustments.

As of September 28, 2024 and June 29, 2024, the Company’s debt on the Consolidated Balance Sheets represented the carrying amount of the Senior Convertible and Senior Notes, net of unamortized debt discount and issuance costs, as follows ( in millions ):

September 28, 2024 June 29, 2024

As of December 28, 2024 and June 29, 2024, the Company’s debt on the Consolidated Balance Sheets represented the carrying amount of the Senior Convertible and Senior Notes, net of unamortized debt discount and issuance costs, as follows ( in millions ):

December 28, 2024 June 29, 2024

Principal amount of 3.75 % Senior Notes

8 unchanged sentences

Long-term debt $ 639.3 $ 636.0

The Company was in compliance with all debt covenants as of September 28, 2024 and June 29, 2024.

The Company was in compliance with all debt covenants as of December 28, 2024 and June 29, 2024.

VIAVI SOLUTIONS INC.

11 unchanged sentences

The 2026 Notes are an unsecured obligation of the Company and bear interest at an annual rate of 1.625 %, payable semi-annually in arrears on March 15 and September 15 of each year, beginning September 15, 2023.

The 2026 Notes mature on March 15, 2026 unless earlier converted, redeemed or repurchased.

As of September 28, 2024, the expected remaining term of the 2026 Notes is 1.5 years.

The 2026 Notes will mature on March 15, 2026 unless earlier converted, redeemed or repurchased.

As of December 28, 2024, the expected remaining term of the 2026 Notes is 1.2 years.

3.75 % Senior Notes (2029 Notes)

3 unchanged sentences

The 2029 Notes are an unsecured obligation of the Company and bear annual interest of 3.75 %, payable semi-annually in arrears on April 1 and October 1 of each year, beginning April 1, 2022.

The 2029 Notes mature on October 1, 2029 unless earlier redeemed or repurchased.

As of September 28, 2024, the expected remaining term of the 2029 Notes is 5.0 years.

The 2029 Notes will mature on October 1, 2029 unless earlier redeemed or repurchased.

As of December 28, 2024, the expected remaining term of the 2029 Notes is 4.8 years.

1.75 % Senior Convertible Notes (2023 Notes)

17 unchanged sentences

On December 30, 2021, we entered into a credit agreement (the Credit Agreement) with Wells Fargo Bank, National Association (Wells Fargo) as administrative agent, and other lender related parties.

The Credit Agreement provides for a senior secured asset-based revolving credit facility in a maximum aggregate amount of $ 300 million, which matures on December 30, 2026.

The Credit Agreement provides for a senior secured asset-based revolving credit facility in a maximum aggregate amount of $ 300 million and matures on December 30, 2026.

The Credit Agreement also provides that, under certain circumstances, the Company may increase the aggregate amount of revolving commitments thereunder by an aggregate amount of up to $ 100 million so long as certain conditions are met.

6 unchanged sentences

In addition, the Credit Agreement contains certain financial covenants that require the Company to maintain a fixed charge coverage ratio of at least 1.00 to 1.00 if excess availability under the facility is less than the greater of 10 % of the lesser of maximum revolver amount and borrowing base and $ 20 million.

As of September 28, 2024, we had no borrowings under this facility and our available borrowing capacity was approximately $ 143.7 million, net of outstanding standby letters of credit of $ 4.2 million.

As of December 28, 2024, we had no borrowings under this facility and our available borrowing capacity was approximately $ 153.5 million, net of outstanding standby letters of credit of $ 4.4 million.

VIAVI SOLUTIONS INC.

2 unchanged sentences

The following table presents the interest expense for contractual interest, amortization of debt issuance cost, accretion of debt discount and other ( in millions ):

Three Months Ended

September 28, 2024 September 30, 2023

Three Months Ended Six Months Ended

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

Interest expense-contractual interest $ 4.7 $ 5.0 $ 9.5 $ 10.0

7 unchanged sentences

Lease expense and cash flow information related to our operating leases is as follows ( in millions ):

Three Months Ended

September 28, 2024 September 30, 2023

Three Months Ended Six Months Ended

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

Operating lease costs (1)

$ 3.1 $ 3.3 $ 6.4 $ 6.6

Cash paid for amounts included in the measurement of operating lease liabilities $ 1.5 $ 3.2 $ 6.2 $ 7.8

Operating ROU assets obtained in exchange for operating lease obligations $ 1.0 $ 1.5 $ 2.7 $ 2.6

Weighted-average remaining lease term 6.1 years 6.7 years

Weighted-average discount rate 5.7 % 4.8 %

(1) Total variable lease costs were immaterial during the three months ended September 28, 2024 and September 30, 2023.

(1) Total variable lease costs were immaterial during the six months ended December 28, 2024 and December 30, 2023.

The total operating costs were included in Cost of revenues, R&D, and SG&A in the Consolidated Statements of Operations.

Future minimum operating lease payments as of September 28, 2024 are as follows ( in millions ):

As of December 28, 2024 and December 30, 2023, the weighted-average remaining lease term was 6.0 years and 6.5 years, respectively, and the weighted-average discount rate was 5.7 % and 4.8 %, respectively.

Future minimum operating lease payments as of December 28, 2024 are as follows ( in millions ):

Operating Leases

16 unchanged sentences

During the fourth quarter of fiscal 2024, management approved a restructuring and workforce reduction plan (the Fiscal 2024 Plan) across our Network and Service Enablement (NSE) and Optical Security and Performance Products (OSP) segments and Corporate (Corp) functions intended to improve operational efficiencies and better align the Company’s workforce with current business needs.

During the second quarter of fiscal 2025, the headcount impacted by this plan increased by approximately 30 employees.

The Company expects approximately 7 % of its global workforce to be affected.

5 unchanged sentences

Balance as of

June 29, 2024 Restructuring and related charges (benefits) Non-cash settlements and other adjustments (1)

Cash settlements Balance as of September 28, 2024

June 29, 2024

Restructuring and related charges (benefits) Cash settlements Balance as of December 28, 2024

Fiscal 2024 Plan

6 unchanged sentences

$ 14.9 $ 1.2 $ ( 10.4 ) $ 5.7

(1) Includes currency translation adjustments.

(2) Includes certain amounts in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheets as of September 28, 2024 and June 29, 2024.

The Company recorded an income tax provision of $ 9.0 million and $ 8.6 million for the three months ended September 28, 2024 and September 30, 2023, respectively.

The income tax provision for the three months ended September 28, 2024 and September 30, 2023 primarily relates to income tax in certain foreign and state jurisdictions based on the Company’s forecasted pre-tax income or loss.

(1) Included in Other current liabilities on the Consolidated Balance Sheet as of December 28, 2024 and certain amounts in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheet as of June 29, 2024.

The Company recorded an income tax provision of $ 9.5 million and $ 18.5 million for the three and six months ended December 28, 2024.

The Company recorded an income tax provision of $ 7.6 million and $ 16.2 million for the three and six months ended December 30, 2023, respectively.

The income tax provision for the three months ended December 28, 2024 and December 30, 2023 primarily relates to income tax in certain foreign and state jurisdictions based on the Company’s forecasted pre-tax income or loss.

The income tax provision recorded differs from the expected tax provision that would be calculated by applying the federal statutory rate to the Company’s income from continuing operations before taxes primarily due to the changes in valuation allowance for deferred tax assets attributable to the Company’s domestic and foreign income from continuing operations.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of September 28, 2024 and June 29, 2024, the Company’s unrecognized tax benefits (net of Federal benefits) totaled $ 50.8 million and $ 50.7 million, respectively, and are included in deferred taxes and other non-current tax liabilities.

The Company had $ 4.0 million accrued for the payment of interest and penalties as of September 28, 2024.

As of December 28, 2024 and June 29, 2024, the Company’s unrecognized tax benefits (net of Federal benefits) totaled $ 51.1 million and $ 50.7 million, respectively, and are included in deferred taxes and other non-current tax liabilities.

The Company had $ 4.0 million accrued for the payment of interest and penalties as of December 28, 2024.

The timing and resolution of income tax examinations is uncertain, and the amounts ultimately paid, if any, upon resolution of issues raised by the taxing authorities may differ from the amounts accrued for each year.

5 unchanged sentences

The timing of repurchases under the plan will depend upon business and financial market conditions.

During the three months ended September 28, 2024, the Company repurchased 2.0 million shares of its common stock for $ 16.4 million under the 2022 Repurchase Plan.

As of September 28, 2024, the Company had remaining authorization of $ 198.4 million for future share repurchases under the 2022 Repurchase Plan.

During the six months ended December 28, 2024, the Company repurchased 2.0 million shares of its common stock for $ 16.4 million under the 2022 Repurchase Plan.

As of December 28, 2024, the Company had remaining authorization of $ 198.4 million for future share repurchases under the 2022 Repurchase Plan.

Stock-Based Compensation

8 unchanged sentences

In addition, the actual number of shares awarded upon vesting of performance-based grants may vary from the target shares depending upon the achievement of the relevant performance or market-based conditions.

During the three months ended September 28, 2024 and September 30, 2023, the Company granted 4.2 million and 2.9 million time-based restricted stock awards, respectively.

The aggregate grant-date fair value of time-based restricted stock awards granted during the three months ended September 28, 2024 and September 30, 2023 were estimated to be $ 35.3 million and $ 30.0 million, respectively.

During the three months ended September 28, 2024 and September 30, 2023, the Company granted 1.5 million and 0.8 million performance-based awards, respectively.

There were no performance-based shares attained over target during the three months ended September 28, 2024 and September 30, 2023.

The aggregate grant-date fair value of performance-based awards granted during the three months ended September 28, 2024 and September 30, 2023 were estimated to be $ 15.1 million and $ 9.7 million, respectively.

During the six months ended December 28, 2024 and December 30, 2023, the Company granted 4.3 million and 3.5 million time-based restricted stock awards, respectively.

The aggregate grant-date fair value of time-based restricted stock awards granted during the six months ended December 28, 2024 and December 30, 2023 were estimated to be $ 37.3 million and $ 34.8 million, respectively.

During the six months ended December 28, 2024 and December 30, 2023, the Company granted 1.5 million and 1.2 million performance-based awards, respectively.

There were no performance-based shares attained over target during the six months ended December 28, 2024 and December 30, 2023.

The aggregate grant-date fair value of performance-based awards granted during the six months ended December 28, 2024 and December 30, 2023 were estimated to be $ 15.1 million and $ 13.4 million, respectively.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of September 28, 2024, $ 90.9 million of unrecognized stock-based compensation costs remain to be amortized.

The impact on the Company’s results of operations of recording stock-based compensation by function for the three months ended September 28, 2024 and September 30, 2023, is as follows (in millions) :

Three Months Ended

September 28, 2024 September 30, 2023

As of December 28, 2024, $ 82.1 million of unrecognized stock-based compensation costs remain to be amortized.

The impact on the Company’s results of operations of recording stock-based compensation by function for the three and six months ended December 28, 2024 and December 30, 2023, is as follows (in millions) :

Three Months Ended Six Months Ended

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

Cost of revenues $ 1.3 $ 1.2 $ 2.5 $ 2.4

2 unchanged sentences

Total stock-based compensation expense $ 13.7 $ 12.5 $ 26.4 $ 23.7

Approximately $ 1.2 million of stock-based compensation was capitalized to inventory as of September 28, 2024 and September 30, 2023.

Approximately $ 1.3 million of stock-based compensation was capitalized to inventory as of December 28, 2024 and December 30, 2023.

Employee Pension and Other Benefit Plans

3 unchanged sentences

Benefits are generally based upon years of service and compensation or stated amounts for each year of service.

As of September 28, 2024, the U.K.

As of December 28, 2024, the U.K.

plan was fully funded while the other plans were unfunded.

1 unchanged sentence

For unfunded plans, the Company pays the post-retirement benefits when due.

During the three months ended September 28, 2024, the Company contributed $ 0.3 million to the U.K.

During the six months ended December 28, 2024, the Company contributed $ 0.6 million to the U.K.

plan and $ 1.8 million to the other plans.

1 unchanged sentence

The following table presents the components of net periodic cost for the pension and benefits plans ( in millions ):

Three Months Ended

September 28, 2024 September 30, 2023

Three Months Ended Six Months Ended

December 28, 2024 December 30, 2023 December 28, 2024 December 30, 2023

Interest cost $ 0.8 $ 0.8 $ 1.6 $ 1.7

2 unchanged sentences

Net periodic benefit cost $ 0.4 $ 0.3 $ 0.9 $ 0.6

The components of net periodic pension cost, other than the service cost component, are included in Cost of revenues, R&D and SG&A in the Consolidated Statements of Operations.

Both the calculation of the projected benefit obligation and net periodic cost are based upon actuarial valuations.

1 unchanged sentence

At a minimum, the Company evaluates these assumptions annually and makes changes as necessary.

Based on actuarial assumptions, the Company expects to incur cash outlays of approximately $ 9.3 million related to its defined benefit pension plans during fiscal 2025 to make current benefit payments and fund future obligations.

As of September 28, 2024, approximately $ 1.2 million had been incurred.

These payments have been estimated based on the same assumptions used to measure the Company’s projected benefit obligation at June 29, 2024.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 28, 2024, approximately $ 2.4 million had been incurred.

These payments have been estimated based on the same assumptions used to measure the Company’s projected benefit obligation at June 29, 2024.

Commitments and Contingencies

11 unchanged sentences

Pension Settlement

In June 2016, the Company received a court decision regarding the validity of an amendment to a pension deed of trust related to one of its foreign subsidiaries which the Company contends contained an error requiring the Company to increase the pension plan’s benefit.

In June 2016, the Company received a court decision regarding the validity of an amendment to a pension deed of trust related to one of its foreign subsidiaries that the Company contends contained an error requiring the Company to increase the pension plan’s benefit.

The Company had subsequently further amended the deed to rectify the error.

9 unchanged sentences

Outstanding Letters of Credit, Performance Bonds and Other Claims

As of September 28, 2024, the Company had standby letters of credit of $ 8.3 million and performance bonds and other claims of $ 1.9 million collateralized by restricted cash.

As of December 28, 2024, the Company had standby letters of credit of $ 6.5 million and performance bonds and other claims of $ 1.9 million collateralized by restricted cash.

VIAVI SOLUTIONS INC.

1 unchanged sentence

Product Warranties

The following table presents the changes in the Company’s warranty reserve during the three months ended September 28, 2024 and September 30, 2023 ( in millions ):

Three Months Ended

September 28, 2024 September 30, 2023

The following table presents the changes in the Company’s warranty reserve during the three and six months ended December 28, 2024 ( in millions ):

December 28, 2024

Three Months Ended Six Months Ended

Balance as of beginning of period $ 7.0 $ 7.5

19 unchanged sentences

The CODM manages the Company in two broad business categories:

Network and Service Enablement (NSE) and OSP.

The CODM evaluates segment performance of the NSE business based on the combined segments (NE and SE) gross and operating margins.

7 unchanged sentences

Additionally, the Company does not specifically identify and allocate all assets by operating segment.

The following tables present information on the Company’s reportable segments for the three months ended September 28, 2024 and September 30, 2023 ( in millions ):

Three Months Ended September 28, 2024

The following tables present information on the Company’s reportable segments for the three months ended December 28, 2024 and December 30, 2023 ( in millions ):

Three Months Ended December 28, 2024

Network and Service Enablement

6 unchanged sentences

Gross margin 64.5 % 67.5 % 64.8 % 50.6 % 59.4 %

Operating (loss) income $ ( 7.3 ) $ 31.2 $ ( 12.4 ) $ 11.5

Operating income $ 17.4 $ 23.0 $ ( 18.2 ) $ 22.2

Operating margin 8.7 % 32.4 % 8.2 %

Three Months Ended September 30, 2023

Three Months Ended December 30, 2023

Network and Service Enablement

14 unchanged sentences

Three Months Ended

September 28, 2024 September 30, 2023

December 28, 2024 December 30, 2023

Corporate reconciling items impacting gross profit:

2 unchanged sentences

Amortization of intangibles ( 3.3 ) ( 3.4 )

Other (charges) benefits unrelated to core operating performance (1)

Other charges unrelated to core operating performance (1)

Total reconciling items ( 4.6 ) ( 4.8 )

6 unchanged sentences

Acquisition and integration related charges ( 2.8 ) ( 0.6 )

Other charges unrelated to core operating performance (1)

( 0.1 ) ( 0.5 )

Restructuring and related (charges) benefits ( 1.2 ) 0.1

Total reconciling items ( 18.2 ) ( 11.3 )

GAAP operating income from continuing operations $ 22.2 $ 22.4

(1) Other items include charges unrelated to core operating performance primarily consisting of transformational initiatives such as site consolidations, intangible impairment and gain or loss on disposal of long-lived assets.

The following tables present information on the Company’s reportable segments for the six months ended December 28, 2024 and December 30, 2023 ( in millions ):

Six Months Ended December 28, 2024

Network and Service Enablement

Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Other Items (1)

Consolidated GAAP Measures

Product revenue $ 259.5 $ 14.0 $ 273.5 $ 149.7 $ — $ 423.2

Service revenue 61.1 24.7 85.8 — — 85.8

Net revenue $ 320.6 $ 38.7 $ 359.3 $ 149.7 $ — $ 509.0

Gross profit $ 201.7 $ 24.9 $ 226.6 $ 79.5 $ ( 9.2 ) $ 296.9

Gross margin 62.9 % 64.3 % 63.1 % 53.1 % 58.3 %

Operating income $ 10.1 $ 54.2 $ ( 30.6 ) $ 33.7

Operating margin 2.8 % 36.2 % 6.6 %

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Six Months Ended December 30, 2023

Network and Service Enablement

Network Enablement Service Enablement Network and Service Enablement Optical Security and Performance Products Other Items (1)

Consolidated GAAP Measures

Product revenue $ 245.6 $ 18.5 $ 264.1 $ 152.4 $ — $ 416.5

Service revenue 59.9 26.0 85.9 — — 85.9

Net revenue $ 305.5 $ 44.5 $ 350.0 $ 152.4 $ — $ 502.4

Gross profit $ 191.8 $ 30.3 $ 222.1 $ 79.7 $ ( 9.4 ) $ 292.4

Gross margin 62.8 % 68.1 % 63.5 % 52.3 % 58.2 %

Operating income $ 7.9 $ 56.6 $ ( 26.1 ) $ 38.4

Operating margin 2.3 % 37.1 % 7.6 %

(1) See below table for details of reconciling items impacting gross profit and operating income.

Six Months Ended

December 28, 2024 December 30, 2023

Corporate reconciling items impacting gross profit:

Total segment gross profit $ 306.1 $ 301.8

Stock-based compensation ( 2.5 ) ( 2.4 )

Amortization of intangibles ( 6.6 ) ( 6.9 )

Other charges unrelated to core operating performance (1)

( 0.1 ) ( 0.1 )

Total reconciling items ( 9.2 ) ( 9.4 )

GAAP gross profit $ 296.9 $ 292.4

Corporate reconciling items impacting operating income:

Total segment operating income $ 64.3 $ 64.5

Stock-based compensation ( 26.4 ) ( 23.7 )

Amortization of intangibles ( 8.7 ) ( 10.4 )

Change in fair value of contingent liability 7.4 8.4

Acquisition and integration related charges ( 3.4 ) ( 0.6 )

Other benefits (charges) unrelated to core operating performance (1)(2)

Litigation settlement 1.3 —

Restructuring and related benefits — 0.8

Restructuring and related (charges) benefits ( 1.2 ) 0.9

Total reconciling items ( 30.6 ) ( 26.1 )

1 unchanged sentence

(1) Other items include (charges) benefits unrelated to core operating performance primarily consisting of transformational initiatives such as site consolidations, intangible impairment and gain or loss on disposal of long-lived assets.

(2) Included in the three months ended September 28, 2024 is a gain of $ 0.9 million on the sale of assets previously classified as held for sale.

(2) Included in the six months ended December 28, 2024 is a gain of $ 0.9 million on the sale of assets previously classified as held for sale.

VIAVI SOLUTIONS INC.

4 unchanged sentences

For example, certain customers may request shipment of the Company’s product to a contract manufacturer in one country, which may differ from the location of their end customers.

The following table presents net revenue by the three geographic regions in which the Company operates and net revenue from countries that exceeded 10% of the Company’s total net revenue for the three months ended September 28, 2024 and September 30, 2023 (in millions):

The following table presents net revenue by the three geographic regions in which the Company operates and net revenue from countries that exceeded 10% of the Company’s total net revenue for the three and six months ended December 28, 2024 and December 30, 2023 (in millions):

Three Months Ended

September 28, 2024 September 30, 2023

December 28, 2024 December 30, 2023

Product Revenue Service Revenue Total Product Revenue Service Revenue Total

8 unchanged sentences

Total net revenue $ 225.7 $ 45.1 $ 270.8 $ 210.9 $ 43.6 $ 254.5

Six Months Ended

December 28, 2024 December 30, 2023

Product Revenue Service Revenue Total Product Revenue Service Revenue Total

United States $ 142.0 $ 29.5 $ 171.5 $ 136.2 $ 31.3 $ 167.5

Other Americas 25.4 7.9 33.3 28.3 7.8 36.1

Total Americas $ 167.4 $ 37.4 $ 204.8 $ 164.5 $ 39.1 $ 203.6

Asia-Pacific:

Greater China $ 100.3 $ 3.9 $ 104.2 $ 95.3 $ 3.2 $ 98.5

Other Asia-Pacific 61.0 14.3 75.3 53.2 13.7 66.9

Total Asia-Pacific $ 161.3 $ 18.2 $ 179.5 $ 148.5 $ 16.9 $ 165.4

$ 94.5 $ 30.2 $ 124.7 $ 103.5 $ 29.9 $ 133.4

Total net revenue $ 423.2 $ 85.8 $ 509.0 $ 416.5 $ 85.9 $ 502.4

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Subsequent Events

On January 28, 2025, the Company completed the acquisition of Inertial Labs, Inc, a leading developer, producer and supplier of high-performance orientation, positioning and navigation solutions for aerospace, defense and industrial applications, for $ 150 million, net of cash acquired, subject to working capital adjustments.

Additional consideration included up to $ 175 million in earn-out payments to be paid in cash predominately based on the achievement of certain revenue targets over a four-year period.

Due to the closing of this acquisition subsequent to the period end, the Company is currently determining the fair value of assets acquired and liabilities assumed necessary to develop the purchase price allocation.

Therefore, disclosure of the purchase price allocation to the tangible and intangible assets acquired and liabilities assumed is not practicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements