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Item 1. Financial Statements

2025-05-02 compared with 2025-01-31 · 264 added, 188 removed, 743 unchanged (38% of the section changed)

3 unchanged sentences

(in millions, except per share data)

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024

Product revenue $ 241.5 $ 207.3 $ 664.7 $ 623.8

11 unchanged sentences

Amortization of other intangibles 1.2 1.5 3.3 5.0

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

Restructuring and related (benefits) charges ( 0.3 ) 0.1 0.9 ( 0.8 )

Total operating expenses 152.2 149.8 415.4 403.8

Income from operations 22.2 22.4 33.7 38.4

Income (loss) from operations 8.5 ( 11.9 ) 42.2 26.5

Interest and other income, net 2.2 4.0 9.3 18.0

Interest expense ( 7.5 ) ( 7.7 ) ( 22.5 ) ( 23.4 )

Income before income taxes 18.6 18.3 25.8 36.7

Provision for income taxes 9.5 7.6 18.5 16.2

Net income $ 9.1 $ 10.7 $ 7.3 $ 20.5

Net income per share:

Income (loss) before income taxes 3.2 ( 15.6 ) 29.0 21.1

(Benefit from) provision for income taxes ( 16.3 ) 9.0 2.2 25.2

Net income (loss) $ 19.5 $ ( 24.6 ) $ 26.8 $ ( 4.1 )

Net income (loss) per share:

Basic $ 0.09 $ ( 0.11 ) $ 0.12 $ ( 0.02 )

5 unchanged sentences

VIAVI SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions)

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:

Three Months Ended Nine Months Ended

March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024

Net income (loss) $ 19.5 $ ( 24.6 ) $ 26.8 $ ( 4.1 )

Other comprehensive income (loss):

Net change in cumulative translation adjustment, net of tax 13.9 ( 11.8 ) 2.9 ( 2.5 )

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

0.1 — 0.2 ( 0.1 )

Amortization of net actuarial (gains) losses and other pension adjustments — ( 0.8 ) 0.2 ( 0.9 )

Net change in accumulated other comprehensive loss 13.9 ( 12.6 ) 3.1 ( 3.4 )

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

Comprehensive income (loss) $ 33.4 $ ( 37.2 ) $ 29.9 $ ( 7.5 )

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)

December 28, 2024 June 29, 2024

March 29, 2025 June 29, 2024

Current assets:

18 unchanged sentences

Accrued expenses 25.7 25.3

Short-term debt 244.8 —

Other current liabilities 86.9 57.5

7 unchanged sentences

1 million shares authorized,

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

no shares issued or outstanding at March 29, 2025 and June 29, 2024

Common stock, $ 0.001 par value;

1 billion shares authorized;

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

223 million shares at March 29, 2025 and 222 million shares at June 29, 2024, issued and outstanding

Additional paid-in capital 70,505.6 70,471.9

7 unchanged sentences

(in millions)

Six Months Ended

December 28, 2024 December 30, 2023

Nine Months Ended

March 29, 2025 March 30, 2024

OPERATING ACTIVITIES:

Net income $ 7.3 $ 20.5

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

Net income (loss) $ 26.8 $ ( 4.1 )

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

Depreciation expense 28.8 29.1

4 unchanged sentences

Deferred taxes, net ( 29.9 ) ( 2.3 )

Amortization of inventory step-up 1.7 —

Restructuring 0.9 ( 0.8 )

3 unchanged sentences

Inventories ( 0.3 ) 6.7

Other current and non-currents assets 1.9 1.3

Other current and non-current assets ( 1.5 ) 3.7

Accounts payable 15.7 ( 4.1 )

9 unchanged sentences

Proceeds from the sale of assets 4.7 2.6

Acquisition, net of acquired cash and holdbacks ( 117.9 ) —

Other investing activities ( 3.0 ) —

1 unchanged sentence

FINANCING ACTIVITIES:

Retirement of convertible notes upon maturity $ — $ ( 96.4 )

Repurchase and retirement of common stock ( 16.4 ) ( 10.0 )

2 unchanged sentences

Proceeds from employee stock purchase plan 6.0 6.3

Payment of acquisition related obligations — ( 1.0 )

Payment of acquisition related contingent consideration — ( 0.9 )

Payment of acquisition related contingent considerations and obligations — ( 4.0 )

Other financing activities 0.2 —

6 unchanged sentences

(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 $ 8.4 million and $ 8.9 million as of December 28, 2024 and December 30, 2023, respectively.

(2) These amounts include both current and non-current balances of restricted cash totaling $ 8.5 million and $ 8.9 million as of March 29, 2025 and March 30, 2024, respectively.

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

2 unchanged sentences

(in millions)

Three Months Ended December 28, 2024

Three Months Ended March 29, 2025

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

Shares Amount

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

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

Net income — — — 19.5 — 19.5

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

Other comprehensive income — — — — 13.9 13.9

Shares issued under employee stock plans, net of tax 1.1 — ( 1.5 ) — — ( 1.5 )

Stock-based compensation — — 14.1 — — 14.1

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

Balance at March 29, 2025 223.2 $ 0.2 $ 70,505.6 $ ( 69,636.1 ) $ ( 140.9 ) $ 728.8

Three Months Ended March 30, 2024

Additional Paid-In Capital

1 unchanged sentence

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

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

Net loss — — — ( 24.6 ) — ( 24.6 )

Other comprehensive loss — — — — ( 12.6 ) ( 12.6 )

Shares issued under employee stock plans, net of tax 0.6 — 1.5 — — 1.5

Stock-based compensation — — 12.8 — — 12.8

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

Balance at March 30, 2024 223.2 $ 0.2 $ 70,459.1 $ ( 69,614.8 ) $ ( 139.4 ) $ 705.1

Nine Months Ended March 29, 2025

Additional Paid-In Capital

3 unchanged sentences

Net income — — — 26.8 — 26.8

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

Other comprehensive income — — — — 3.1 3.1

Shares issued under employee stock plans, net of tax 3.3 — ( 7.1 ) — — ( 7.1 )

1 unchanged sentence

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

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

Balance at March 29, 2025 223.2 $ 0.2 $ 70,505.6 $ ( 69,636.1 ) $ ( 140.9 ) $ 728.8

Nine Months Ended March 30, 2024

Additional Paid-In Capital

2 unchanged sentences

Balance at July 1, 2023 221.5 $ 0.2 $ 70,427.3 $ ( 69,600.7 ) $ ( 136.0 ) $ 690.8

Net income — — — 20.5 — 20.5

Other comprehensive income — — — — 9.2 9.2

Net loss — — — ( 4.1 ) — ( 4.1 )

Other comprehensive loss — — — — ( 3.4 ) ( 3.4 )

Shares issued under employee stock plans, net of tax 2.7 — ( 4.8 ) — — ( 4.8 )

1 unchanged sentence

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

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

Balance at March 30, 2024 223.2 $ 0.2 $ 70,459.1 $ ( 69,614.8 ) $ ( 139.4 ) $ 705.1

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

3 unchanged sentences

The financial information for Viavi Solutions Inc.

(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.

(VIAVI, also referred to as the Company, we, our and us) for the three and nine months ended March 29, 2025 and March 30, 2024 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.

3 unchanged sentences

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 and six months ended December 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 nine months ended March 29, 2025 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 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 results for the three and nine months ended March 29, 2025 and March 30, 2024 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.

41 unchanged sentences

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 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.

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 U.S.

Court of Appeals for the Eighth Circuit.

On February 11, 2025, the SEC Acting Chair issued a statement explaining that he directed the SEC staff to request the U.S.

Court of Appeals for the Eighth Circuit not to schedule oral arguments on the challenge to the Climate Rule until the Commission decides whether to continue defending it.

On March 27, 2025, the SEC announced that it had voted to end its defense of the final rules on the enhancement and standardization of climate-related disclosures for investors.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Earnings Per Share

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

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

Three Months Ended Nine Months Ended

March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024

Net income (loss) $ 19.5 $ ( 24.6 ) $ 26.8 $ ( 4.1 )

Weighted-average shares outstanding:

2 unchanged sentences

Diluted 226.9 223.0 225.2 222.5

Net income per share:

Net income (loss) per share:

Basic $ 0.09 $ ( 0.11 ) $ 0.12 $ ( 0.02 )

Diluted $ 0.09 $ ( 0.11 ) $ 0.12 $ ( 0.02 )

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)

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

Three Months Ended Nine Months Ended

March 29, 2025 (1)

March 30, 2024 (1)(2)

March 29, 2025 (1)

March 30, 2024 (1)(2)

Restricted stock units — 8.4 1.2 4.9

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

For the nine months ended March 29, 2025, 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 loss before reclassification — ( 11.0 ) — ( 11.0 )

Other comprehensive income before reclassification — 2.9 — 2.9

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

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.

Net current-period other comprehensive income — 2.9 0.2 3.1

Ending balance as of March 29, 2025 $ ( 5.3 ) $ ( 128.5 ) $ ( 7.1 ) $ ( 140.9 )

There was no tax impact for the nine months ended March 29, 2025.

Refer to “Note 17.

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Inertial Labs, LLC

On January 28, 2025, the Company acquired all of the equity of Inertial Labs, LLC (Inertial Labs), a privately held company which specializes in Position, Navigation and Timing (PNT) solutions for aerospace, defense and industrial applications.

The acquisition enables the Company to further broaden its solutions offering into the rapidly developing PNT landscape.

The total purchase consideration includes approximately $ 134.4 million paid in cash at closing and additional contingent consideration of up to $ 175.0 million.

The net cash paid for the acquisition was $ 117.9 million, which reflects the cash paid at closing less cash acquired of $ 16.5 million.

The future cash payments for the additional contingent consideration are dependent on the achievement of certain revenue targets over the course of a four-year period beginning in January 2025.

From the contingent consideration of $ 175.0 million, $ 3.4 million shall be set aside for the payment of retention bonuses over the four-year earn-out period to key personnel and service providers, contingent on continued service to the Company.

Any forfeited amount will be removed from the retention bonus pool and re-distributed to the shareholders of Inertial Labs upon the achievement of the earn-out targets.

The portion of the estimated fair value of the earn-out liability allocated to the retention bonuses will be accounted for as post combination expense over the requisite service period.

The cash consideration paid at closing includes an escrow payment of $ 1.0 million subject to final net working capital adjustments.

There was an additional $ 3.0 million held back by the Company for final net working capital adjustments, included in Other current liabilities on the Consolidated Balance Sheets.

In addition, the Company held back $ 15.0 million for indemnity claims included in Other non-current liabilities on the Consolidated Balance Sheets.

The acquisition meets the definition of a business and has been accounted for in accordance with the authoritative guidance on business combinations;

therefore, the tangible and intangible assets acquired and liabilities assumed were recorded at fair value on the acquisition date.

Acquisition related costs incurred were approximately $ 11.7 million and have been recorded within SG&A in the Consolidated Statements of Operations.

These costs included $ 9.5 million in transaction bonuses that were paid at closing to key personnel and service providers of Inertial Labs.

The total purchase consideration was allocated to tangible and intangible assets acquired and liabilities assumed based on the preliminary fair value on the acquisition date.

The following table presents the preliminary allocation of the purchase price ( in millions ):

Cash and cash equivalents $ 16.5

Accounts receivable, net 8.1

Inventory, net 26.0

Prepayments and other current assets 1.2

Property, plant and equipment, net 2.3

Goodwill 129.7

Identified intangible assets acquired 117.6

Other non-current assets 1.9

Accounts payable ( 1.4 )

Accrued payroll and related expenses ( 0.5 )

Deferred revenue ( 0.3 )

Accrued expenses ( 3.5 )

Other non-current liabilities ( 28.0 )

Total purchase consideration $ 269.6

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition ( in millions, except useful life ):

Estimated Useful Life Amount

Developed technology 4 to 7 years

Customer relationship 6 years 9.6

Tradename 3 years 0.8

Backlog 2 years 5.2

Total identifiable assets acquired $ 117.6

Goodwill represents the excess of the preliminary estimated purchase consideration over the preliminary estimates of the fair value of the net tangible and intangible assets acquired and has been allocated to the Network Enablement segment.

Goodwill is primarily attributable to expected synergies in the acquired technologies that may be leveraged by the Company in future PNT offerings.

None of the goodwill recognized is deductible for U.S.

income tax purposes.

The Company has included the financial results of Inertial Labs in its Consolidated Financial Statements from the date of acquisition.

Pro forma results of operations have not been presented because the effect of the acquisition was not material to the Consolidated Statements of Operations.

Jackson Labs Technologies, LLC

On October 5, 2022, the Company acquired all of the equity of Jackson Labs Technologies, LLC (Jackson Labs), a privately held company, which specializes in Position, Navigation and Timing (PNT) solutions for critical infrastructure serving both military and civilian applications.

On October 5, 2022, the Company acquired all of the equity of Jackson Labs Technologies, LLC (Jackson Labs), a privately held company, which specializes in PNT solutions for critical infrastructure serving both military and civilian applications.

The acquisition enables the Company to broaden its solutions offering into the rapidly developing PNT landscape.

12 unchanged sentences

Pro forma results of operations have not been presented because the effect of the acquisition was not material to the Consolidated Statements of Operations.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other Acquisitions

On March 2, 2025, the Company entered into a purchase agreement to acquire Spirent Communications plc’s high speed ethernet and network security business lines, for $ 410 million in base consideration and an additional $ 15 million contingent consideration to be paid at closing, subject to customary closing adjustments and conditions.

The Company expects to fund this transaction with proceeds from a Term Loan B.

The acquisition is conditional on regulatory approvals and is expected to close by July 31, 2025.

On March 29, 2023, April 21, 2023 and June 8, 2023, the Company completed acquisitions accounted for as asset purchases consisting of an aggregate cash paid at closing of $ 2.9 million and $ 0.2 million of indemnity holdback.

3 unchanged sentences

The acquired developed technology asset is being amortized over its estimated useful life of 4 years.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 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

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 nine months ended March 29, 2025 and March 30, 2024 ( in millions ):

Three Months Ended Nine Months Ended

March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024

Beginning period balance $ 2.1 $ 10.6 $ 9.5 $ 19.7

Additions to contingent consideration 116.2 — 116.2 —

Payment of contingent consideration — — — ( 0.7 )

1 unchanged sentence

Ending period balance $ 120.8 $ 11.2 $ 120.8 $ 11.2

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Balance Sheet and Other Details

1 unchanged sentence

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

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

As of March 29, 2025, and June 29, 2024, the Company had total unbilled receivables of $ 20.3 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 ):

December 28, 2024

Three Months Ended Six Months Ended

March 29, 2025

Three Months Ended Nine Months Ended

Deferred revenue:

7 unchanged sentences

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 December 28, 2024, was $ 272.8 million.

The value of the transaction price allocated to remaining performance obligations as of March 29, 2025, was $ 315.0 million.

The Company expects to recognize approximately 88 % of remaining performance obligations as revenue within the next 12 months, and the remainder thereafter.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accounts receivable allowances - Credit losses

The following table presents the activities and balances for allowance for credit losses ( in millions ):

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

December 28, 2024

June 29, 2024 Acquisitions (1)

Charged to Costs and Expenses Deductions (2)

March 29, 2025

Allowance for credit losses $ 1.6 $ 0.6 $ 0.7 $ ( 0.8 ) $ 2.1

(1) Refer to “Note 5.

Acquisitions” of the Notes to Consolidated Financial Statements for detail of acquisition.

(2) Represents the effect of currency translation adjustments and write-offs of uncollectible accounts, net of recoveries.

1 unchanged sentence

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

December 28, 2024 June 29, 2024

March 29, 2025 June 29, 2024

Finished goods $ 54.7 $ 44.6

2 unchanged sentences

Inventories, net $ 116.2 $ 96.5

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Prepayments and other current assets

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

December 28, 2024 June 29, 2024

March 29, 2025 June 29, 2024

Refundable income taxes $ 25.8 $ 28.5

Prepayments 17.4 18.5

Advances to contract manufacturers 4.8 5.7

Fair value of forward contracts 6.8 1.7

Advances to contract manufacturers 4.9 5.7

Transaction tax receivables 0.4 3.3

4 unchanged sentences

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

December 28, 2024 June 29, 2024

March 29, 2025 June 29, 2024

Operating right-of-use (ROU) assets $ 34.6 $ 35.8

1 unchanged sentence

Long-term investment (Note 7) 3.0 —

Deposits 2.4 2.4

Deferred contract cost 3.0 2.5

Deposits 2.5 2.4

Debt issuance cost - Revolving Credit Facility 1.4 1.9

1 unchanged sentence

Other non-current assets $ 60.8 $ 58.0

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other current liabilities

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

December 28, 2024 June 29, 2024

March 29, 2025 June 29, 2024

Fair value of contingent consideration $ 30.9 $ —

Operating lease liabilities 9.9 9.8

Interest payable 7.9 5.1

Fair value of forward contracts 6.4 1.5

Income tax payable 5.7 5.3

Restructuring accrual 5.7 14.1

Interest payable 5.1 5.1

Warranty accrual 5.2 3.4

Transaction tax payable 5.0 4.0

Restructuring accrual 4.5 14.1

Acquisition related holdback and related accruals 4.0 —

Other current liabilities 7.4 14.3

Other current liabilities $ 86.9 $ 57.5

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other non-current liabilities

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

December 28, 2024 June 29, 2024

March 29, 2025 June 29, 2024

Fair value of contingent consideration $ 89.9 $ 9.5

Pension and post-employment benefits 51.4 51.2

3 unchanged sentences

Financing obligation 15.6 15.7

Acquisition related holdback 15.0 —

Deferred tax liability 8.3 11.7

1 unchanged sentence

Warranty accrual 1.7 4.0

Fair value of contingent consideration (Note 5) 2.1 9.5

Restructuring accrual — 0.8

1 unchanged sentence

Other non-current liabilities $ 263.6 $ 171.6

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Investments and Forward Contracts

Short-Term Investments

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 March 29, 2025, the Company’s short-term investments of $ 22.6 million were comprised of 30-day term deposits of $ 21.2 million and trading securities related to the deferred compensation plan of $ 1.4 million invested in equity securities.

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.

4 unchanged sentences

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 and six months ended December 28, 2024.

There were no impairments or adjustments to the carrying value for the three and nine months ended March 29, 2025.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Equity Investment

The Company acquired an equity interest in Sensorsan Sensor Teknolojileri Anonim Sirketi (Sensorsan), a privately held entity and owns 40 % percent of Sensorsan, through its acquisition of Inertial Labs.

The Company accounts for its investment in Sensorsan under the equity method of accounting.

Under the equity method, the Company recognizes income or loss from its pro-rata share of Sensorsan’s net income or loss, which changes the carrying value of the Sensorsan investment.

The Company’s share of Sensorsan’s net income for the period from acquisition date until March 29, 2025 was less than $ 0.1 million.

As of March 29, 2025, the carrying value of the Company’s investment in Sensorsan was $ 0.7 million, included in Other non-current assets on the Consolidated Balance Sheets.

The Company sells certain products to Sensorsan.

During the three months ended March 29, 2025, revenue from sales to Sensorsan was $ 0.1 million.

Non-Designated Foreign Currency Forward Contracts

3 unchanged sentences

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

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.

As of March 29, 2025, 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 $ 6.8 million and $ 6.4 million is reflected as Prepayments and other current assets and Other current liabilities on the Consolidated Balance Sheets, respectively.

2 unchanged sentences

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

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.

As of March 29, 2025 and June 29, 2024, the notional amounts of the forward contracts that the Company held to purchase foreign currencies were $ 57.8 million and $ 81.9 million, respectively, and the notional amounts of forward contracts that the Company held to sell foreign currencies were $ 41.6 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 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.

The foreign exchange forward contracts incurred a gain of $ 0.5 million and a loss of $ 2.8 million for the three and nine months ended March 29, 2025, respectively, and losses of $ 0.8 million and $ 0.9 million for the three and nine months ended March 30, 2024, respectively.

VIAVI SOLUTIONS INC.

24 unchanged sentences

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

December 28, 2024 June 29, 2024

March 29, 2025 June 29, 2024

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

18 unchanged sentences

(1) Included 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.

(2) Includes, as of March 29, 2025, $ 211.7 million in Cash and cash equivalents, $ 3.3 million in Restricted cash and $ 3.4 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.

3 unchanged sentences

(6) Included in Other current liabilities on the Consolidated Balance Sheets.

(7) Included in Other non-current liabilities on the Consolidated Balance Sheets.

(7) As of March 29, 2025, includes certain amounts in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheets.

As of June 29, 2024, included in Other non-current liabilities on the Consolidated Balance Sheets.

Other Fair Value Measures

2 unchanged sentences

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

December 28, 2024 June 29, 2024

March 29, 2025 June 29, 2024

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

11 unchanged sentences

Balance as of June 29, 2024 $ 398.1 $ 12.6 $ 42.2 $ 452.9

Acquisition 129.7 — — $ 129.7

Currency translation 2.9 ( 0.1 ) — 2.8

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

Balance as of March 29, 2025 $ 530.7 $ 12.5 $ 42.2 $ 585.4

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 that triggered an impairment review during the three and six months ended December 28, 2024.

There were no events or changes in circumstances that triggered an impairment review during the three and nine months ended March 29, 2025.

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 December 28, 2024 and June 29, 2024 ( in millions ):

As of December 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 March 29, 2025 and June 29, 2024 ( in millions ):

As of March 29, 2025 Gross Carrying Amount Accumulated Amortization Net

Acquired developed technology $ 538.4 $ ( 414.9 ) $ 123.5

11 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024

Cost of revenues $ 6.1 $ 3.5 $ 12.7 $ 10.4

1 unchanged sentence

Total amortization of intangible assets $ 7.3 $ 5.0 $ 16.0 $ 15.4

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 ):

Based on the carrying amount of acquired developed technology, customer relationships and other intangibles as of March 29, 2025, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows ( in millions ):

Remainder of 2025 $ 8.3

Thereafter 36.0

Total amortization $ 139.7

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

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

As of March 29, 2025 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 ):

March 29, 2025 June 29, 2024

Principal amount of 1.625 % Senior Convertible Notes

Unamortized 1.625 % Senior Convertible Notes debt discount

Unamortized 1.625 % Senior Convertible Notes debt issuance cost

Short-term debt $ 244.8 $ —

Principal amount of 3.75 % Senior Notes

4 unchanged sentences

Unamortized 1.625 % Senior Convertible Notes debt discount

( 5.6 ) ( 8.1 )

Unamortized 1.625 % Senior Convertible Notes debt issuance cost

( 0.9 ) ( 1.3 )

Long-term debt $ 396.1 $ 636.0

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

The Company was in compliance with all debt covenants as of March 29, 2025 and June 29, 2024.

VIAVI SOLUTIONS INC.

12 unchanged sentences

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.

As of March 29, 2025, the expected remaining term of the 2026 Notes is less than 1.0 year.

3.75 % Senior Notes (2029 Notes)

4 unchanged sentences

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.

As of March 29, 2025, the expected remaining term of the 2029 Notes is 4.5 years.

1.75 % Senior Convertible Notes (2023 Notes)

26 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 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.

As of March 29, 2025, we had no borrowings under this facility and our available borrowing capacity was approximately $ 165.6 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 Six Months Ended

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

Three Months Ended Nine Months Ended

March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024

Interest expense-contractual interest $ 4.8 $ 4.9 $ 14.3 $ 14.9

7 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024

Operating lease costs (1)

2 unchanged sentences

Operating ROU assets obtained in exchange for operating lease obligations $ 4.4 $ 3.5 $ 7.1 $ 6.1

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

(1) Total variable lease costs were immaterial during the nine months ended March 29, 2025 and March 30, 2024.

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

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 ):

As of March 29, 2025 and March 30, 2024, the weighted-average remaining lease term was 6.0 years and 6.5 years, respectively, and the weighted-average discount rate was 5.8 % and 5.0 %, respectively.

Future minimum operating lease payments as of March 29, 2025 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.

The Company anticipates the Fiscal 2024 Plan to be substantially complete by the end of fiscal 2025.

The Company anticipates the Fiscal 2024 Plan to be substantially complete by the end of the second quarter of fiscal 2026.

Fiscal 2023 Plan

4 unchanged sentences

June 29, 2024

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

Restructuring and related charges (benefits) Cash settlements Balance as of March 29, 2025

Fiscal 2024 Plan

6 unchanged sentences

$ 14.9 $ 0.9 $ ( 11.3 ) $ 4.5

(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) Included in Other current liabilities on the Consolidated Balance Sheet as of March 29, 2025 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 benefit of $ 16.3 million and a income tax provision of $ 2.2 million for the three and nine months ended March 29, 2025.

The Company recorded an income tax provision of $ 9.0 million and $ 25.2 million for the three and nine months ended March 30, 2024, respectively.

The income tax benefit for the three months and the income tax provision for the nine months ended March 29, 2025 primarily relates to a $ 25.9 million release of valuation allowance related to the acquisition of Inertial labs and income tax in certain foreign and state jurisdictions based on the Company’s forecasted pre-tax income or loss.

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

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

As of March 29, 2025 and June 29, 2024, the Company’s unrecognized tax benefits (net of Federal benefits) totaled $ 52.2 million and $ 50.7 million, respectively, and are included in deferred taxes and other non-current tax liabilities.

The Company had $ 4.5 million accrued for the payment of interest and penalties as of March 29, 2025.

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 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.

During the nine months ended March 29, 2025, the Company repurchased 2.0 million shares of its common stock for $ 16.4 million under the 2022 Repurchase Plan.

As of March 29, 2025, 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 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.

During the nine months ended March 29, 2025 and March 30, 2024, the Company granted 4.5 million and 3.6 million time-based restricted stock awards, respectively.

The aggregate grant-date fair value of time-based restricted stock awards granted during the nine months ended March 29, 2025 and March 30, 2024 were estimated to be $ 39.5 million and $ 35.1 million, respectively.

During the nine months ended March 29, 2025 and March 30, 2024, 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 nine months ended March 29, 2025 and March 30, 2024.

The aggregate grant-date fair value of performance-based awards granted during the nine months ended March 29, 2025 and March 30, 2024 were estimated to be $ 15.1 million and $ 13.4 million, respectively.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

As of March 29, 2025, $ 66.6 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 nine months ended March 29, 2025 and March 30, 2024, is as follows (in millions) :

Three Months Ended Nine Months Ended

March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024

Cost of revenues $ 2.0 $ 1.2 $ 4.5 $ 3.7

2 unchanged sentences

Total stock-based compensation expense $ 14.1 $ 12.8 $ 40.5 $ 36.6

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

Approximately $ 1.3 million and $ 1.2 million of stock-based compensation was capitalized to inventory as of March 29, 2025 and March 30, 2024, respectively.

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 December 28, 2024, the U.K.

As of March 29, 2025, 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 six months ended December 28, 2024, the Company contributed $ 0.6 million to the U.K.

During the nine months ended March 29, 2025, the Company contributed $ 1.0 million to the U.K.

plan and $ 3.8 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 Six Months Ended

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

Three Months Ended Nine Months Ended

March 29, 2025 March 30, 2024 March 29, 2025 March 30, 2024

Interest cost $ 0.8 $ 0.8 $ 2.4 $ 2.5

Expected return on plan assets ( 0.4 ) ( 0.4 ) ( 1.3 ) ( 1.4 )

Amortization of net actuarial losses (gains) 0.1 — 0.2 ( 0.1 )

Amortization of net actuarial losses — 0.2 0.2 0.1

Net periodic benefit cost $ 0.4 $ 0.6 $ 1.3 $ 1.2

3 unchanged sentences

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

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Based on actuarial assumptions, the Company expects to incur cash outlays of approximately $ 9.1 million related to its defined benefit pension plans during fiscal 2025 to make current benefit payments and fund future obligations.

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

As of March 29, 2025, approximately $ 4.8 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)

Commitments and Contingencies

23 unchanged sentences

Outstanding Letters of Credit, Performance Bonds and Other Claims

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.

As of March 29, 2025, the Company had standby letters of credit of $ 6.6 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 and six months ended December 28, 2024 ( in millions ):

December 28, 2024

Three Months Ended Six Months Ended

The following table presents the changes in the Company’s warranty reserve during the three and nine months ended March 29, 2025 ( in millions ):

March 29, 2025

Three Months Ended Nine Months Ended

Balance as of beginning of period $ 6.8 $ 7.4

26 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company does not allocate stock-based compensation, acquisition-related charges, amortization of intangibles, restructuring, impairment of goodwill, non-operating income and expenses, changes in fair value of contingent consideration liabilities, or other charges unrelated to core operating performance to its segments because management does not include this information in its measurement of the performance of the operating segments.

The Company does not allocate stock-based compensation, acquisition related charges, amortization of intangibles, amortization of inventory step-up, restructuring, impairment of goodwill, non-operating income and expenses, changes in fair value of contingent consideration liabilities, or other charges unrelated to core operating performance to its segments because management does not include this information in its measurement of the performance of the operating segments.

These items are presented as “Other Items” in the table below.

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 December 28, 2024 and December 30, 2023 ( in millions ):

Three Months Ended December 28, 2024

The following tables present information on the Company’s reportable segments for the three months ended March 29, 2025 and March 30, 2024 ( in millions ):

Three Months Ended March 29, 2025

Network and Service Enablement

8 unchanged sentences

Operating margin 10.4 % 33.9 % 3.0 %

Three Months Ended December 30, 2023

Three Months Ended March 30, 2024

Network and Service Enablement

8 unchanged sentences

Gross margin 61.5 % 60.8 % 61.4 % 50.1 % 56.1 %

Operating income $ 6.4 $ 27.3 $ ( 11.3 ) $ 22.4

Operating (loss) income $ ( 3.1 ) $ 26.1 $ ( 34.9 ) $ ( 11.9 )

Operating margin ( 1.8 ) % 34.3 % ( 4.8 ) %

3 unchanged sentences

Three Months Ended

December 28, 2024 December 30, 2023

March 29, 2025 March 30, 2024

Corporate reconciling items impacting gross profit:

2 unchanged sentences

Amortization of intangibles ( 6.1 ) ( 3.5 )

Other charges unrelated to core operating performance (1)

Amortization of inventory step up ( 1.7 ) —

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

Total reconciling items ( 10.1 ) ( 4.6 )

GAAP gross profit $ 160.7 $ 137.9

Corporate reconciling items impacting operating income:

Corporate reconciling items impacting operating income (loss):

Total segment operating income $ 47.7 $ 23.0

3 unchanged sentences

Acquisition and integration related charges ( 13.3 ) ( 16.0 )

Amortization of inventory step up ( 1.7 ) —

Other charges unrelated to core operating performance (1)

( 0.6 ) ( 0.4 )

Restructuring and related (charges) benefits ( 1.2 ) 0.1

Restructuring and related benefits (charges) 0.3 ( 0.1 )

Total reconciling items ( 39.2 ) ( 34.9 )

GAAP operating income from continuing operations $ 22.2 $ 22.4

GAAP operating income (loss) from continuing operations $ 8.5 $ ( 11.9 )

(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

The following tables present information on the Company’s reportable segments for the nine months ended March 29, 2025 and March 30, 2024 ( in millions ):

Nine Months Ended March 29, 2025

Network and Service Enablement

10 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Six Months Ended December 30, 2023

Nine Months Ended March 30, 2024

Network and Service Enablement

9 unchanged sentences

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

Six Months Ended

December 28, 2024 December 30, 2023

Nine Months Ended

March 29, 2025 March 30, 2024

Corporate reconciling items impacting gross profit:

2 unchanged sentences

Amortization of intangibles ( 12.7 ) ( 10.4 )

Other charges unrelated to core operating performance (1)

( 0.1 ) ( 0.1 )

Amortization of inventory step up ( 1.7 ) —

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

Total reconciling items ( 19.3 ) ( 14.0 )

6 unchanged sentences

Acquisition and integration related charges ( 16.7 ) ( 16.6 )

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

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

( 0.2 ) ( 1.0 )

Amortization of inventory step up ( 1.7 ) —

Litigation settlement 1.3 —

3 unchanged sentences

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

(2) Included in the nine months ended March 29, 2025 is a gain of $ 0.9 million on the sale of assets previously classified as held for sale and other charges unrelated to core operating performance of $ 1.1 million.

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 and six months ended December 28, 2024 and December 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 nine months ended March 29, 2025 and March 30, 2024 (in millions):

Three Months Ended

December 28, 2024 December 30, 2023

March 29, 2025 March 30, 2024

Product Revenue Service Revenue Total Product Revenue Service Revenue Total

8 unchanged sentences

Total net revenue $ 241.5 $ 43.3 $ 284.8 $ 207.3 $ 38.7 $ 246.0

Six Months Ended

December 28, 2024 December 30, 2023

Nine Months Ended

March 29, 2025 March 30, 2024

Product Revenue Service Revenue Total Product Revenue Service Revenue Total

8 unchanged sentences

Total net revenue $ 664.7 $ 129.1 $ 793.8 $ 623.8 $ 124.6 $ 748.4

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