What changed in this filing

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Item 1. Financial Statements

2026-01-29 compared with 2025-10-30 · 375 added, 212 removed, 659 unchanged (47% of the section changed)

3 unchanged sentences

(in millions, except per share data)

Three Months Ended

September 27, 2025 September 28, 2024

Three Months Ended Six Months Ended

December 27, 2025 December 28, 2024 December 27, 2025 December 28, 2024

Product revenue $ 317.3 $ 225.7 $ 574.7 $ 423.2

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Amortization of other intangibles 6.3 1.0 7.8 2.1

Restructuring and related benefits ( 0.3 ) —

Restructuring and related (benefits) charges ( 0.1 ) 1.2 ( 0.4 ) 1.2

Total operating expenses 199.2 138.6 360.6 263.2

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Interest expense ( 15.3 ) ( 7.5 ) ( 22.7 ) ( 15.0 )

(Loss) income before income taxes and equity investment losses ( 2.3 ) 7.2

(Loss) income before income taxes and equity investment earnings ( 38.7 ) 18.6 ( 41.0 ) 25.8

Provision for income taxes 9.7 9.5 28.7 18.5

Equity investment losses ( 0.1 ) —

Net loss $ ( 21.4 ) $ ( 1.8 )

Net loss per share:

Equity investment earnings 0.3 — 0.2 —

Net (loss) income $ ( 48.1 ) $ 9.1 $ ( 69.5 ) $ 7.3

Net (loss) income per share:

Basic $ ( 0.21 ) $ 0.04 $ ( 0.31 ) $ 0.03

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VIAVI SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in millions)

Three Months Ended

September 27, 2025 September 28, 2024

Net loss $ ( 21.4 ) $ ( 1.8 )

Other comprehensive (loss) income:

Three Months Ended Six Months Ended

December 27, 2025 December 28, 2024 December 27, 2025 December 28, 2024

Net (loss) income $ ( 48.1 ) $ 9.1 $ ( 69.5 ) $ 7.3

Other comprehensive income (loss):

Net change in cumulative translation adjustment, net of tax 5.7 ( 41.3 ) 1.2 ( 11.0 )

Amortization of net actuarial gains and other pension adjustments — 0.1

Net change in accumulated other comprehensive loss (income) ( 4.5 ) 30.4

Comprehensive (loss) income $ ( 25.9 ) $ 28.6

Amortization of net actuarial losses and other pension adjustments 0.1 0.1 0.1 0.2

Net change in accumulated other comprehensive income (loss) 5.8 ( 41.2 ) 1.3 ( 10.8 )

Comprehensive loss $ ( 42.3 ) $ ( 32.1 ) $ ( 68.2 ) $ ( 3.5 )

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

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(in millions, except share and par value data)

September 27, 2025 June 28, 2025

December 27, 2025 June 28, 2025

Current assets:

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Preferred stock, $ 0.001 par value;

1 million shares authorized, no shares issued or outstanding at September 27, 2025 and June 28, 2025

1 million shares authorized, no shares issued or outstanding at December 27, 2025 and June 28, 2025

Common stock, $ 0.001 par value;

1 billion shares authorized;

223 million shares at September 27, 2025 and June 28, 2025, issued and outstanding

231 million shares at December 27, 2025 and 223 million shares at June 28, 2025, issued and outstanding

Additional paid-in capital 70,670.2 70,517.9

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(in millions)

Three Months Ended

September 27, 2025 September 28, 2024

Six Months Ended

December 27, 2025 December 28, 2024

OPERATING ACTIVITIES:

Net loss $ ( 21.4 ) $ ( 1.8 )

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

Net (loss) income $ ( 69.5 ) $ 7.3

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

Depreciation expense 19.8 19.5

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Proceeds from the sale of assets 1.5 4.3

Acquisition of business ( 399.3 ) —

Purchase price adjustment related to business acquisition ( 0.7 ) —

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Proceeds from employee stock purchase plan 2.7 2.7

Other financing activities — 0.2

Net cash provided by (used in) financing activities $ 680.6 $ ( 21.9 )

Effect of exchange rates on cash, cash equivalents and restricted cash $ 2.5 $ ( 5.9 )

Net increase in cash (decrease), cash equivalents and restricted cash 120.0 ( 3.7 )

Net increase in cash, cash equivalents and restricted cash 344.0 14.6

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 $ 8.5 million and $ 10.5 million as of June 28, 2025 and June 29, 2024, respectively.

(2) These amounts include both current and non-current balances of restricted cash totaling $ 8.3 million and $ 10.2 million as of September 27, 2025 and September 28, 2024, respectively.

(2) These amounts include both current and non-current balances of restricted cash totaling $ 10.6 million and $ 8.4 million as of December 27, 2025 and December 28, 2024, respectively.

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

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(in millions)

Three Months Ended September 27, 2025

Three Months Ended December 27, 2025

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

Shares Amount

Balance at June 28, 2025 223.2 $ 0.2 $ 70,517.9 $ ( 69,628.1 ) $ ( 109.8 ) $ 780.2

Balance at September 27, 2025 223.2 $ 0.2 $ 70,517.5 $ ( 69,679.5 ) $ ( 114.3 ) $ 723.9

Net loss — — — ( 48.1 ) — ( 48.1 )

Other comprehensive loss — — — — ( 4.5 ) ( 4.5 )

Other comprehensive income — — — — 5.8 5.8

Shares issued under employee stock plans, net of tax 0.3 — ( 1.9 ) — — ( 1.9 )

Stock-based compensation — — 13.9 — — 13.9

Repurchase of common stock ( 2.7 ) — — ( 30.0 ) — ( 30.0 )

Convertible note extinguishment (Note 11) 7.9 — 140.7 — — 140.7

Balance at December 27, 2025 231.4 $ 0.2 $ 70,670.2 $ ( 69,727.6 ) $ ( 108.5 ) $ 834.3

Three Months Ended December 28, 2024

Additional Paid-In Capital

Accumulated Deficit

Accumulated Other Comprehensive Loss

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

Three Months Ended September 28, 2024

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

Six Months Ended December 27, 2025

Additional Paid-In Capital

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Repurchase of common stock ( 2.7 ) — — ( 30.0 ) — ( 30.0 )

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

Convertible note extinguishment (Note 11) 7.9 — 140.7 — 140.7

Balance at December 27, 2025 231.4 $ 0.2 $ 70,670.2 $ ( 69,727.6 ) $ ( 108.5 ) $ 834.3

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

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 27, 2025 and September 28, 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.

(VIAVI, also referred to as the Company, we, our and us) for the three and six months ended December 27, 2025 and December 28, 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.

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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 28, 2025.

There have been no material changes to the Company’s accounting policies during the three months ended September 27, 2025 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 27, 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 28, 2025 on Form 10-K, filed with the SEC on August 11, 2025.

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GAAP for complete financial statements.

The results for the three months ended September 27, 2025 and September 28, 2024 may not be indicative of results for the fiscal year ending June 27, 2026 or any future periods.

The results for the three and six months ended December 27, 2025 and December 28, 2024 may not be indicative of results for the fiscal year ending June 27, 2026 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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Accounting Standards Issued But Not Yet Adopted

In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2025-05, Financial Instruments-Credit Losses (Topic 326):

In December 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2025-10, Government Grants (Topic 832):

Accounting for Government Grants Received by Business Entities , which provides guidance for a government grant received by a business entity.

This guidance is effective for fiscal years beginning after December 15, 2028 (fiscal 2030 for the Company), and interim periods within those annual reporting periods, with early adoption permitted.

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

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606:

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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 annual periods beginning after December 15, 2024 (fiscal 2026 for the Company), with early and retrospective adoption permitted.

This guidance is effective for annual periods beginning after December 15, 2024 (fiscal 2026 for the Company).

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

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Earnings Per Share

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

Three Months Ended

September 27, 2025 September 28, 2024

Net loss $ ( 21.4 ) $ ( 1.8 )

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 Six Months Ended

December 27, 2025 December 28, 2024 December 27, 2025 December 28, 2024

Net (loss) income $ ( 48.1 ) $ 9.1 $ ( 69.5 ) $ 7.3

Weighted-average shares outstanding:

Basic 223.9 222.0 223.4 222.0

Effect of dilutive securities from stock-based compensation plans — 2.8 — 2.4

Diluted 223.9 224.8 223.4 224.4

Net loss per share:

Net (loss) income per share:

Basic $ ( 0.21 ) $ 0.04 $ ( 0.31 ) $ 0.03

Diluted $ ( 0.21 ) $ 0.04 $ ( 0.31 ) $ 0.03

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

Three Months Ended

September 27, 2025 (1)(2)

September 28, 2024 (2)

In periods where the Company recognized a net loss, the impact of potentially dilutive outstanding stock-based awards and the “in-the money” conversion benefit feature above the conversion price of the 1.625 % Senior Convertible Notes due 2026 (2026 Notes) and 0.625 % Senior Convertible Notes due 2031 (2031 Notes) of $ 13.19 and $ 13.79 per share, respectively, have been excluded from the calculation of diluted loss per share as their inclusion would have an antidilutive effect.

The following table represents potential common shares that were not included in the computation of the diluted net (loss) income per share because their effect would have been anti-dilutive ( in millions ):

Three Months Ended Six Months Ended

December 27, 2025

December 28, 2024 December 27, 2025

December 28, 2024

Restricted stock units 0.1 1.2 0.8 1.8

(1) The Company’s 0.625 % Senior Convertible Notes due 2031 (2031 Notes) are not included in the table above.

The par amount of convertible notes is payable in cash equal to the principal amount of the notes plus any accrued and unpaid interest and then the “in-the-money” conversion benefit feature at the conversion price above $ 13.79 per share is payable in cash, shares of the Company’s common stock or a combination of both at the Company’s election.

Refer to “Note 11.

Debt” for more details.

(2) The Company’s 1.625 % Senior Convertible Notes due 2026 (2026 Notes) are not included in the table above.

The par amount of convertible notes is payable in cash equal to the principal amount of the notes plus any accrued and unpaid interest and then the “in-the-money” conversion benefit feature at the conversion price above $ 13.19 per share is payable in cash, shares of the Company’s common stock or a combination of both at the Company’s election.

Refer to “Note 11.

Debt” for more details.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accumulated Other Comprehensive Loss

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 27, 2025, the changes in accumulated other comprehensive loss, net of tax, by component were as follows ( in millions ):

For the six months ended December 27, 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 currency translation adjustments Change in unrealized components of defined benefit obligations Total

Beginning balance as of June 28, 2025 $ ( 5.3 ) $ ( 97.5 ) $ ( 7.0 ) $ ( 109.8 )

Other comprehensive loss — ( 4.5 ) — ( 4.5 )

Net current-period other comprehensive loss — ( 4.5 ) — ( 4.5 )

Ending balance as of September 27, 2025 $ ( 5.3 ) $ ( 102.0 ) $ ( 7.0 ) $ ( 114.3 )

Other comprehensive income — 1.2 — 1.2

Amounts reclassified out of accumulated other comprehensive loss — — 0.1 0.1

Net current-period other comprehensive income — 1.2 0.1 1.3

Ending balance as of December 27, 2025 $ ( 5.3 ) $ ( 96.3 ) $ ( 6.9 ) $ ( 108.5 )

High-speed Ethernet, Network Security and Channel Emulation Testing Business

On October 16, 2025, the Company acquired Spirent Communications plc’s (Spirent) high-speed ethernet, network security and channel emulation testing business (collectively, the HSE and CE business) from Keysight Technologies, Inc.

The transaction provides a complementary addition to VIAVI’s ethernet testing platform within its Network and Service Enablement (NSE) segment.

The cash consideration paid at closing of $ 399.3 million is subject to final net working capital adjustments.

The acquisition met 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 $ 20.6 million, of which $ 11.4 million was incurred in fiscal 2026, and were recorded within SG&A in the Consolidated Statements of Operations.

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 Company elected to apply both practical expedients permitted under ASU No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, in measuring contract assets and contract liabilities acquired in the acquisition.

Specifically, we have elected the practical expedient that permits an entity to reflect the aggregate effect of all modifications (on a contract-by-contract basis) as if they occurred on the acquisition date.

In addition, the Company elected to determine the standalone selling prices of performance obligations as of the acquisition date, rather than at contract inception, for purpose of allocating transaction consideration.

The Company is in the process of obtaining additional information to refine its preliminary fair value estimates related to certain acquired assets and assumed liabilities.

We may revise the preliminary purchase price allocation during the remainder of the measurement period as additional information becomes available.

Any such revisions or changes may be material.

We expect to finalize the purchase price allocation by the end of fiscal 2026.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Inventory, net $ 7.7

Prepayments and other current assets 1.0

Property, plant and equipment, net 2.9

Goodwill 111.3

Identified intangible assets acquired 314.2

Other non-current assets 1.8

Deferred revenue (1)

Accrued payroll and related expenses ( 0.8 )

Other current liabilities ( 4.0 )

Other non-current liabilities (2)

Total purchase consideration $ 399.3

(1) Represents the current portion of deferred revenue.

(2) Includes long-term deferred revenue of $ 8.1 million.

The Company valued the customer relationships using the multi-period excess earnings method under the income approach.

This method reflects the present value of the projected cash flows that are expected to be generated by the customer relationships.

Significant assumptions related to customer relationships included (i) projected revenues, (ii) discount rate, (iii) income tax rate and (iv) customer attrition rate.

Developed technology relates to products used for our lab and production and wireless solutions.

The Company valued the developed technology using the relief-from-royalty method under the income approach.

This method is based on the application of a royalty rate to forecasted revenue from the developed technology.

Significant assumptions related to developed technology included (i) royalty rate, (ii) projected revenues, (iii) discount rate, (iv) income tax rate and (v) technology obsolescence rate.

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

Customer relationship 9 years $ 162.3

Developed technology 5 years 134.8

Backlog 2 years 10.1

Trade name 6 years 7.0

Total identifiable assets acquired $ 314.2

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 NSE segment.

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

The goodwill recognized is deductible for U.S.

income tax purposes.

The Company has included the financial results of Spirent’s HSE and CE business 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.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Inertial Labs, Inc.

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

Acquisition related costs incurred in fiscal 2025 were approximately $ 11.7 million and were recorded within SG&A expense in the Consolidated Statements of Operations.

Acquisition related costs incurred in fiscal 2025 were approximately $ 11.7 million and were 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 ):

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

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

Cash and cash equivalents $ 16.5

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(1) Goodwill at acquisition date of $ 129.7 million increased by $ 0.6 million for purchase price and measurement period adjustments.

(2) Includes $ 25.0 million of deferred tax liability and $ 0.9 million of liability related to uncertain tax positions.

VIAVI SOLUTIONS INC.

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Total identifiable assets acquired $ 117.6

Goodwill represents the excess of the purchase consideration over the fair value of the net tangible and intangible assets acquired and has been allocated to the NSE segment.

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

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The total purchase consideration included approximately $ 49.9 million paid in cash at closing and additional contingent consideration of up to $ 117.0 million.

Acquisition related Contingent Consideration

The following table provides a reconciliation of changes in fair value of the Company’s earn-out liabilities for the three months ended September 27, 2025 and September 28, 2024 ( in millions ):

Balance June 29, 2024 (1)

Additions to Contingent Consideration 116.2

Change in Fair Value measurement (2)

Balance June 28, 2025 (3)(4)

Change in Fair Value measurement (2)

Balance September 27, 2025 (5)

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

(2) Includes change in fair value for Inertial Labs and and Jackson Labs.

(3) Includes $ 41.5 million in Other current liabilities and $ 75.9 million in Other non-current liabilities on the Consolidated Balance Sheets.

(4) Balance is comprised of $ 117.1 million for Inertial Labs and $ 0.3 million for Jackson Labs.

(5) Includes $ 64.2 million in Other current liabilities and $ 64.1 million in Other non-current liabilities for Inertial Labs on the Consolidated Balance Sheets.

For details on an acquisition completed after September 27, 2025, refer to “Note 20.

Subsequent Events” for more information.

VIAVI SOLUTIONS INC.

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

As of September 27, 2025, and June 28, 2025, the Company had total unbilled receivables of $ 14.6 million and $ 14.1 million, respectively.

As of December 27, 2025 and June 28, 2025, the Company had total unbilled receivables of $ 14.1 million.

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 ):

Three Months Ended

September 27, 2025

December 27, 2025

Three Months Ended Six Months Ended

Deferred revenue:

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Revenue deferrals for new contracts (1)

Acquisition (2)

Revenue recognized during the period (3)

( 39.5 ) ( 69.1 )

Balance at end of period $ 118.3 $ 118.3

(1) This amount includes the effect of foreign currency exchange rate fluctuations.

(2) Revenue recognized during the period represents releases from the balance at the beginning of the period as well as releases from the current period deferrals.

(2) Refer to “Note 5.

Acquisitions” for more information.

(3) Revenue recognized during the period represents releases from the balance at the beginning of the period as well as releases from the current period deferrals including the acquired deferred revenue.

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 27, 2025, was $ 352.6 million.

The value of the transaction price allocated to remaining performance obligations as of December 27, 2025, was $ 492.5 million.

The Company expects to recognize approximately 93 % of remaining performance obligations as revenue within the next 12 months, and the remainder thereafter.

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June 28, 2025 Charged to Costs and Expenses Deductions (1)

September 27, 2025

December 27, 2025

Allowance for credit losses $ 1.9 $ 0.6 $ ( 0.3 ) $ 2.2

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

September 27, 2025 June 28, 2025

December 27, 2025 June 28, 2025

Finished goods $ 62.4 $ 52.5

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

September 27, 2025 June 28, 2025

December 27, 2025 June 28, 2025

Refundable income taxes $ 35.9 $ 32.0

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

September 27, 2025 June 28, 2025

December 27, 2025 June 28, 2025

Operating right-of-use (ROU) assets $ 39.1 $ 34.1

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Deferred contract cost 2.9 3.0

Deposits 2.3 2.4

Debt issuance cost - Revolving Credit Facility 2.9 1.4

Deposits 2.4 2.4

Other 14.1 13.4

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

September 27, 2025 June 28, 2025

December 27, 2025 June 28, 2025

Fair value of contingent consideration (Note 8) $ 72.5 $ 41.5

Acquisition related holdback and related accruals 16.7 16.5

Operating lease liabilities 10.1 10.2

Interest payable 12.5 5.1

Operating lease liabilities 11.6 10.2

Income tax payable 9.8 8.2

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

September 27, 2025 June 28, 2025

December 27, 2025 June 28, 2025

Fair value of contingent consideration (Note 8) $ 66.6 $ 75.9

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Short-Term Investments

As of September 27, 2025, the Company’s short-term investments of $ 1.8 million were primarily related to the deferred compensation plan, of which $ 1.7 million was invested in equity securities.

As of December 27, 2025, the Company’s short-term investments of $ 1.9 million were primarily related to the deferred compensation plan, of which $ 1.7 million was invested in equity securities.

As of June 28, 2025, the Company’s short-term investments of $ 1.7 million were primarily related to the deferred compensation plan, of which $ 1.6 million was invested in equity 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 27, 2025.

There were no impairments or adjustments to the carrying value for the three and six months ended December 27, 2025.

Equity Investment

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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 loss for the three months ended September 27, 2025 was $ 0.1 million.

As of September 27, 2025 and June 28, 2025, the carrying value of the Company’s investment in Sensorsan was $ 1.1 million and $ 1.3 million respectively, included in Other non-current assets on the Consolidated Balance Sheets.

The Company’s share of Sensorsan’s net income for the three and six months ended December 27, 2025 was $ 0.3 million and $ 0.2 million, respectively.

As of December 27, 2025 and June 28, 2025, the carrying value of the Company’s investment in Sensorsan was $ 1.4 million and $ 1.3 million, respectively, included in Other non-current assets on the Consolidated Balance Sheets.

The Company sells certain products to Sensorsan.

During the three months ended September 27, 2025, revenue from sales to Sensorsan was $ 0.4 million.

During the three and six months ended December 27, 2025, revenue from sales to Sensorsan was $ 0.8 million and $ 1.2 million, respectively.

VIAVI SOLUTIONS INC.

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

As of September 27, 2025, the Company had forward contracts that were effectively closed but not settled with the counterparties as of the balance sheet date.

As of December 27, 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 $ 1.4 million and $ 0.8 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 27, 2025 and June 28, 2025, the notional amounts of the forward contracts that the Company held to purchase foreign currencies were $ 61.5 million and $ 60.4 million, respectively, and the notional amounts of forward contracts that the Company held to sell foreign currencies were $ 41.7 million and $ 24.1 million, respectively.

As of December 27, 2025 and June 28, 2025, the notional amounts of the forward contracts that the Company held to purchase foreign currencies were $ 62.6 million and $ 60.4 million, respectively, and the notional amounts of forward contracts that the Company held to sell foreign currencies were $ 46.3 million and $ 24.1 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 loss of $ 0.2 million for the three months ended September 27, 2025, and a gain of $ 1.4 million the three months ended September 28, 2024, respectively.

The foreign exchange forward contracts incurred gains of $ 0.6 million and $ 0.4 million for the three and six months ended December 27, 2025, respectively, and losses of $ 4.7 million and $ 3.3 million for the three and six months ended December 28, 2024, respectively.

Fair Value Measurements

7 unchanged sentences

Treasury securities and marketable equity securities as they are traded with sufficient volume and frequency of transactions.

includes financial instruments for which the valuations are based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

includes financial instruments for which the valuations are based on quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 2 instruments of the Company include asset-backed securities, foreign currency forward contracts and debt.

5 unchanged sentences

The Company’s Level 3 assets consist of an investment in a non-marketable equity security in a privately held company.

We measure the non-marketable equity security under the Measurement Alternative at cost minus impairment, if any, adjusted for observable price changes in orderly transactions for an identical or similar investment in the same issuer.

We measure the non-marketable equity security under the Measurement Alternative at cost minus impairment, if any, adjusted to fair value only if an observable price change in orderly transactions for an identical or similar investment occurs for the same issuer.

The Company’s Level 3 liabilities consist of contingent purchase consideration liabilities related to business acquisitions.

1 unchanged sentence

The fair value of certain earn-out liabilities is derived using the estimated probability of success of achieving the earn-out milestones discounted to present value.

The fair value of contingent consideration liabilities is remeasured at each reporting period at the estimated fair value based on the inputs on the date of remeasurement, with the change in fair value recognized as a component of SG&A expense in the Consolidated Statements of Operations.

Fair Value Measurements

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

September 27, 2025 June 28, 2025

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis, along with their classification by level of input for the periods presented ( in millions ):

December 27, 2025 June 28, 2025

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

Debt available-for-sale securities (1)

Asset-backed securities (1)

$ 0.3 $ — $ 0.3 $ — $ 0.3 $ — $ 0.3 $ —

Total debt available-for-sale securities 0.3 — 0.3 — 0.3 — 0.3 —

Money market funds (2)

4 unchanged sentences

1.4 — 1.4 — 4.9 — 4.9 —

Non-marketable equity security (5)

3.0 — — 3.0 3.0 — — 3.0

Total assets $ 561.5 $ 559.8 $ 1.7 $ — $ 235.8 $ 230.6 $ 5.2 $ —

5 unchanged sentences

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

(2) Includes, as of September 27, 2025, $ 327.7 million in Cash and cash equivalents, $ 3.4 million in Restricted cash and $ 3.0 million in Other non-current assets on the Consolidated Balance Sheets.

(2) Includes, as of December 27, 2025, $ 550.2 million in Cash and cash equivalents, $ 4.4 million in Restricted cash and $ 3.5 million in Other non-current assets on the Consolidated Balance Sheets.

Includes, as of June 28, 2025, $ 222.4 million in Cash and cash equivalents, $ 3.5 million in Restricted cash and $ 3.1 million in Other non-current assets on the Consolidated Balance Sheets.

1 unchanged sentence

(4) Included in Prepayments and other current assets on the Consolidated Balance Sheets.

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

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

(7) As of September 27, 2025 and June 28, 2025, includes certain amounts in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheets.

(6) As of December 27, 2025 and June 28, 2025, includes certain amounts in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheets.

Contingent Consideration

As of December 27, 2025, the fair value of the contingent consideration liability for Inertial Labs was $ 139.1 million, compared to $ 128.3 million at September 27, 2025 and $ 117.1 million at June 28, 2025.

The increases of $ 10.8 million and $ 22.0 million, respectively, are included in SG&A in the Consolidated Statements of Operations for the three and six months ended December 27, 2025.

As of December 27, 2025, $ 72.5 million and $ 66.6 million of the liability are included in Other current liabilities and Other non-current liabilities, respectively, on the Consolidated Balance Sheets.

The Company expects to pay the current portion of the contingent consideration liability in the third quarter of fiscal 2026.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 27, 2025 and September 27, 2025, there was no contingent consideration liability for Jackson Labs.

The Company recorded a benefit of $ 0.3 million in SG&A in the Consolidated Statements of Operations for the six months ended December 27, 2025, from the change in fair value measurement of the earn-out liability.

The earn-out period for Jackson Labs ended on December 31, 2025.

The Company is not required to make a contingent consideration payment as the revenue targets were not met.

Instrument Measured at Fair Value on Non-recurring Basis

Our non-marketable equity security accounted for using the Measurement Alternative is measured at fair value on a non-recurring basis and is classified within Level 3 of the fair value hierarchy because we use significant unobservable inputs to estimate its fair value.

Refer to “Note 7.

Investments and Forward Contracts” for additional information.

Other Fair Value Measures

Fair Value of Debt:

If measured at fair value on the Consolidated Balance Sheets, the Company’s 0.625 % Senior Convertible Notes (2031 Notes), 3.75 % Senior Notes (2029 Notes) and 1.625 % Senior Convertible Notes (2026 Notes) would be classified in Level 2 of the fair value hierarchy as they are not actively traded in the markets.

If measured at fair value on the Consolidated Balance Sheets, the Company’s 0.625 % Senior Convertible Notes (2031 Notes), 3.75 % Senior Notes (2029 Notes), 1.625 % Senior Convertible Notes (2026 Notes) and Term Loan B would be classified in Level 2 of the fair value hierarchy as they are not actively traded in the markets.

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

September 27, 2025 June 28, 2025

December 27, 2025 June 28, 2025

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

5 unchanged sentences

67.6 — 67.6 — 252.0 — 252.0 —

Term Loan B 603.8 — 603.8 — — — — —

Total $ 1,417.9 $ — $ 1,417.9 $ — $ 625.6 $ — $ 625.6 $ —

2 unchanged sentences

Balance as of June 28, 2025 $ 553.5 $ 42.2 $ 595.7

Acquisition (1)

111.3 — $ 111.3

Currency translation ( 2.6 ) — ( 2.6 )

Balance as of September 27, 2025 $ 550.1 $ 42.2 $ 592.3

Balance as of December 27, 2025 $ 662.2 $ 42.2 $ 704.4

(1) Refer to “Note 5.

Acquisitions” for more information.

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 2025, 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 months ended September 27, 2025.

There were no events or changes in circumstances that triggered an impairment review during the three and six months ended December 27, 2025.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables present details of the Company’s acquired developed technology, customer relationships and other intangibles as of September 27, 2025 and June 28, 2025 ( in millions ):

As of September 27, 2025 Gross Carrying Amount Accumulated Amortization Net

Acquired developed technology $ 533.6 $ ( 423.7 ) $ 109.9

Customer relationships 207.6 ( 198.4 ) 9.2

43.6 ( 39.5 ) 4.1

The following tables present details of the Company’s acquired developed technology, customer relationships and other intangibles as of December 27, 2025 and June 28, 2025 ( in millions ):

As of December 27, 2025 Weighted-Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net

Acquired developed technology 5.0 years $ 668.8 $ ( 436.5 ) $ 232.3

Customer relationships 8.6 years 370.3 ( 203.1 ) 167.2

3.1 years 60.8 ( 41.7 ) 19.1

Total intangibles $ 1,099.9 $ ( 681.3 ) $ 418.6

As of June 28, 2025 Gross Carrying Amount Accumulated Amortization Net

Acquired developed technology $ 534.5 $ ( 417.7 ) $ 116.8

Customer relationships 209.0 ( 199.1 ) 9.9

44.1 ( 39.2 ) 4.9

As of June 28, 2025 Weighted-Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net

Acquired developed technology 5.5 years $ 534.5 $ ( 417.7 ) $ 116.8

Customer relationships 5.2 years 209.0 ( 199.1 ) 9.9

1.7 years 44.1 ( 39.2 ) 4.9

Total intangibles $ 787.6 $ ( 656.0 ) $ 131.6

1 unchanged sentence

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

Three Months Ended

September 27, 2025 September 28, 2024

Three Months Ended Six Months Ended

December 27, 2025 December 28, 2024 December 27, 2025 December 28, 2024

Cost of revenues $ 12.5 $ 3.3 $ 19.4 $ 6.6

1 unchanged sentence

Total amortization of intangible assets $ 18.8 $ 4.3 $ 27.2 $ 8.7

Based on the carrying amount of acquired developed technology, customer relationships and other intangibles as of September 27, 2025, 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 27, 2025, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows ( in millions ):

Remainder of 2026 $ 40.6

1 unchanged sentence

Total amortization $ 418.6

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

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of September 27, 2025 and June 28, 2025, 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 27, 2025 June 28, 2025

As of December 27, 2025 and June 28, 2025, the Company’s debt on the Consolidated Balance Sheets, net of unamortized debt discount and issuance costs, is as follows ( in millions ):

December 27, 2025 June 28, 2025

Principal amount of 1.625 % Senior Convertible Notes

3 unchanged sentences

Unamortized 1.625 % Senior Convertible Notes debt issuance cost

( 0.2 ) ( 0.5 )

Term Loan B 4.5 —

Short-term debt $ 53.4 $ 246.2

4 unchanged sentences

( 3.3 ) ( 3.7 )

Principal amount of Term Loan B 595.5 —

Unamortized Term Loan B debt issuance cost ( 14.8 ) —

Long-term debt $ 1,221.7 $ 396.3

The Company was in compliance with all debt covenants as of September 27, 2025 and June 28, 2025.

For additional debt transactions entered, or credit facility amended after September 27, 2025, refer to “Note 20.

The Company was in compliance with all debt covenants as of December 27, 2025 and June 28, 2025.

For additional debt transaction entered after December 27, 2025, refer to “Note 20.

Subsequent Events” for more information.

On October 16, 2025, concurrent with the closing of the acquisition of Spirent’s HSE and CE business, the Company entered into a $ 600 million senior secured term loan credit agreement (Term Loan Credit Agreement) with Wells Fargo Bank, National Association (Wells Fargo), as administrative agent, and other lenders.

The term loans, which mature on October 16, 2032, are secured by substantially all of the assets of the Company and those of its domestic subsidiaries.

The proceeds from the term loans were used to finance a portion of the acquisition, acquisition related expenses and will be used for general corporate purposes.

In connection with the issuance of the term loans, the Company incurred $ 15.2 million of issuance costs.

The debt issuance costs were capitalized in Long-term debt on the Consolidated Balance Sheets and will be amortized to interest expense using the straight-line method until maturity.

The term loans bear interest at rates based on SOFR or a specified base rate plus applicable margins with interest payment frequency at the Company’s election.

The term loans require quarterly principal payments of 1.0 % per annum, commencing on March 31, 2026.

The Company may prepay all or part of the term loans early at its option.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The covenants of the Term Loan Credit Agreement include customary restrictive covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens, make certain acquisitions, investments, asset dispositions and restricted payments, undertake fundamental changes and enter into restrictive agreements, in each case subject to certain exceptions.

The Term Loan Credit Agreement includes customary events of default, and customary rights and remedies upon the occurrence of any event of default thereunder, including rights to accelerate the loans and realize upon the collateral securing the obligations under the Term Loan Credit Agreement and any related guarantees thereof.

As of December 27, 2025, the interest rate for the borrowings under the term loans was 6.39 %, which approximated the effective interest rate and the expected remaining term is 6.8 years.

0.625 % Senior Convertible Notes (2031 Notes)

1 unchanged sentence

The Company issued $ 100.9 million aggregate principal amount of the 2031 Notes to certain holders of the 1.625 % Senior Convertible Notes (2026 Notes) in exchange for $ 97.5 million principal amount of the 2026 Notes (the 2025 Exchange Transaction) and issued and sold $ 149.1 million aggregate principal amount of the 2031 Notes in a private placement to accredited institutional buyers (the 2025 Subscription Transactions).

The Company intends to use the proceeds to retire the remaining principal amount of the 2026 Notes upon maturity.

The 2025 Exchange Transaction was accounted for as an extinguishment which resulted in the write-off of unamortized debt discount and issuance costs of $ 1.1 million on the extinguished notes.

6 unchanged sentences

The 2031 Notes will mature on March 1, 2031 unless earlier converted, redeemed or repurchased.

As of September 27, 2025, the expected remaining term of the 2031 Notes is 5.4 years.

The 2031 Notes may be converted under certain circumstances, based on an initial conversion rate of 72.5295 shares (equivalent to an initial conversion price of approximately $ 13.79 per share) at the option of the holders into cash up to the principal amount, with the remaining amount converted into cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock at the Company’s election.

The initial conversion price represents a 25.0 % premium to the closing price of the Company’s common stock on the pricing date, August 13, 2025, which will be subject to customary anti-dilution adjustments.

As of December 27, 2025, the expected remaining term of the 2031 Notes is 5.2 years.

VIAVI SOLUTIONS INC.

12 unchanged sentences

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

As of September 27, 2025, the expected remaining term of the 2026 Notes is less than 0.5 years.

As of December 27, 2025, the expected remaining term of the 2026 Notes is less than 0.2 years.

On August 20, 2025, as part of the 2025 Exchange Transaction, the Company exchanged $ 97.5 million aggregate principal amount of the 2026 Notes for $ 100.9 million aggregate principal amount of the 2031 Notes.

On December 15, 2025 the Company entered into separate privately-negotiated agreements with certain holders of its 2026 Notes.

On December 22, 2025, the Company settled $ 103.5 million principal amount of 2026 Notes in exchange for an aggregate of 7.9 million shares of its common stock, par value $ 0.001 per share.

Accrued interest was paid in cash.

The transaction was accounted for as a debt extinguishment.

The exchange did not qualify as an induced conversion.

The Company recorded a loss on debt extinguishment of $ 38.7 M, representing the excess of the fair value of the shares issued over the carrying amount of the notes extinguished and transaction costs associated with the settlement.

The loss is presented as Loss on convertible note extinguishment in the Company’s Consolidated Statements of Operations.

After the transaction, the outstanding aggregate principal amount of the 2026 Notes was $ 49.0 M with terms unchanged.

During the periods from, and including, December 15, 2025 until the close of business on the business day immediately preceding March 15, 2026, holders may convert the 2026 Notes at any time.

The Company has not received any conversion requests by holders as of December 27, 2025.

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 September 27, 2025, the expected remaining term of the 2029 Notes is 4.0 years.

As of December 27, 2025, the expected remaining term of the 2029 Notes is 3.8 years.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1.00 % Senior Convertible Notes (2024 Notes)

6 unchanged sentences

On March 1, 2024, the Company converted two notes at the request of the respective note-holders and retired the remaining 2024 Notes principal of $ 96.4 million upon maturity.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Senior Secured Asset-Based Revolving Credit Facility

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 and matures on December 30, 2026.

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

On October 16, 2025, the Company entered into an agreement with Wells Fargo to amend and extend the Credit Agreement.

The Credit Agreement, as amended, provides for a senior secured asset-based revolving credit facility in a maximum aggregate amount of $ 200 million and matures on October 16, 2030.

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 $ 13.3 million.

As of September 27, 2025, we had no borrowings under this facility and our available borrowing capacity was approximately $ 181.0 million, net of outstanding standby letters of credit of $ 3.8 million.

As of December 27, 2025, we had no borrowings under this facility and our available borrowing capacity was approximately $ 183.7 million, net of outstanding standby letters of credit of $ 3.8 million.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Interest Expense

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 27, 2025 September 28, 2024

Three Months Ended Six Months Ended

December 27, 2025 December 28, 2024 December 27, 2025 December 28, 2024

Interest expense-contractual interest $ 12.5 $ 4.7 $ 17.3 $ 9.5

3 unchanged sentences

Total interest expense $ 15.3 $ 7.5 $ 22.7 $ 15.0

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company is a lessee in several operating leases, primarily real estate facilities for office space.

2 unchanged sentences

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

Three Months Ended

September 27, 2025 September 28, 2024

Three Months Ended Six Months Ended

December 27, 2025 December 28, 2024 December 27, 2025 December 28, 2024

Operating lease costs (1)

$ 3.6 $ 3.1 $ 6.9 $ 6.4

Cash paid for amounts included in the measurement of operating lease liabilities $ 3.8 $ 1.5 $ 7.3 $ 6.2

Operating ROU assets obtained in exchange for operating lease obligations $ 2.6 $ 1.0 $ 10.6 $ 2.7

Weighted-average remaining lease term 5.9 years 6.1 years

Weighted-average discount rate 6.2 % 5.7 %

(1) Total variable lease costs were immaterial during the three months ended September 27, 2025 and September 28, 2024.

(1) Total variable lease costs were immaterial during the three and six months ended December 27, 2025 and December 28, 2024.

The total operating lease 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 27, 2025 are as follows ( in millions ):

As of December 27, 2025 and December 28, 2024, the weighted-average remaining lease term was 5.7 years and 6.0 years, respectively, and the weighted-average discount rate was 6.2 % and 5.7 %, respectively.

Future minimum operating lease payments as of December 27, 2025 are as follows ( in millions ):

Operating Leases

Remainder of 2026 $ 7.9

Remainder of fiscal 2026 $ 5.7

Fiscal 2027 12.3

16 unchanged sentences

Restructuring activity related to the OSP segment was complete during fiscal 2025.

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

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

A summary of the activity in the restructuring accrual is outlined below (in millions) :

Balance as of June 28, 2025

Restructuring and related benefits Cash settlements Balance as of September 27, 2025

Restructuring and related benefits Cash settlements Foreign currency translation adjustments Balance as of December 27, 2025

$ 3.5 $ ( 0.4 ) $ ( 0.9 ) $ ( 0.1 ) $ 2.1

(1) Included in Other current liabilities on the Consolidated Balance Sheet as of September 27, 2025 and June 28, 2025.

The Company recorded an income tax provision of $ 19.0 million and $ 9.0 million for the three months ended September 27, 2025 and September 28, 2024, respectively.

The income tax provision for the three months ended September 27, 2025 primarily relates to income tax in certain foreign jurisdictions based on the Company’s forecasted pre-tax income or loss and a $ 9.7 million provision related to a revaluation of the Company’s deferred tax assets due to a change in the German corporate income tax rate.

The income tax provision for the three months September 28, 2024, primarily relates to income tax in certain foreign 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 27, 2025 and June 28, 2025.

The Company recorded an income tax provision of $ 9.7 million and $ 28.7 million for the three and six months ended December 27, 2025, respectively.

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, respectively.

The income tax provision for the three and six months ended December 27, 2025 and December 28, 2024 primarily relates to income tax in certain foreign jurisdictions based on the Company’s forecasted pre-tax income or loss.

The income tax provision for the six months ended December 27, 2025 also includes a $ 9.7 million charge related to the revaluation of the Company’s deferred tax assets resulting from a change in the German corporate income tax rate.

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 and the revaluation of the German deferred tax assets.

As of September 27, 2025 and June 28, 2025, the Company’s unrecognized tax benefits (net of Federal benefits) totaled $ 42.5 million and $ 42.4 million, respectively, and are included in deferred taxes and other non-current tax liabilities.

The Company had $ 3.4 million accrued for the payment of interest and penalties as of September 27, 2025.

As of December 27, 2025 and June 28, 2025, the Company’s unrecognized tax benefits (net of Federal benefits) totaled $ 42.8 million and $ 42.4 million, respectively, and are included in deferred taxes and other non-current tax liabilities.

The Company had $ 3.6 million accrued for the payment of interest and penalties as of December 27, 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.

3 unchanged sentences

Stockholders' Equity

Issuance of Common Stock

During the three and six months ended December 27, 2025, the Company issued 7.9 million shares of its common stock to certain holders of the 2026 Notes in a debt extinguishment transaction.

Refer to “Note 11.

Debt” for more details.

Repurchase of Common Stock

2 unchanged sentences

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

During the three months ended September 27, 2025, the Company repurchased and subsequently retired 2.7 million shares of its common stock for $ 30.0 million under the 2022 Repurchase Plan.

As of September 27, 2025, the Company had remaining authorization of $ 168.4 million for future share repurchases under the 2022 Repurchase Plan.

During the six months ended December 27, 2025, the Company repurchased and subsequently retired 2.7 million shares of its common stock for $ 30.0 million under the 2022 Repurchase Plan.

As of December 27, 2025, the Company had remaining authorization of $ 168.4 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 27, 2025 and September 28, 2024, the Company granted 3.3 million and 4.2 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 27, 2025 and September 28, 2024 were estimated to be $ 37.1 million and $ 35.3 million, respectively.

During the three months ended September 27, 2025 and September 28, 2024, the Company granted 1.2 million and 1.5 million performance-based awards, respectively.

There were less than 0.1 million and no performance-based shares attained over target during the three months ended September 27, 2025 and September 28, 2024, respectively.

The aggregate grant-date fair value of performance-based awards granted during the three months ended September 27, 2025 and September 28, 2024 were estimated to be $ 16.3 million and $ 15.1 million, respectively.

As of September 27, 2025, $ 95.1 million of unrecognized stock-based compensation costs remain to be amortized.

During the six months ended December 27, 2025 and December 28, 2024, the Company granted 3.8 million and 4.3 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 27, 2025 and December 28, 2024 were estimated to be $ 46.8 million and $ 37.3 million, respectively.

During the six months ended December 27, 2025 and December 28, 2024, the Company granted 1.2 million and 1.5 million performance-based awards, respectively.

There were less than 0.1 million and no performance-based shares attained over target during the six months ended December 27, 2025 and December 28, 2024, respectively.

The aggregate grant-date fair value of performance-based awards granted during the six months ended December 27, 2025 and December 28, 2024 were estimated to be $ 16.3 million and $ 15.1 million, respectively.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The impact on the Company’s results of operations of recording stock-based compensation by function for the three months ended September 27, 2025 and September 28, 2024, is as follows (in millions) :

Three Months Ended

September 27, 2025 September 28, 2024

As of December 27, 2025, $ 90.8 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 27, 2025 and December 28, 2024, is as follows (in millions) :

Three Months Ended Six Months Ended

December 27, 2025 December 28, 2024 December 27, 2025 December 28, 2024

Cost of revenues $ 1.1 $ 1.3 $ 2.1 $ 2.5

2 unchanged sentences

Total stock-based compensation expense $ 13.9 $ 13.7 $ 27.3 $ 26.4

Approximately $ 1.1 million and $ 1.2 million of stock-based compensation was capitalized to inventory as of September 27, 2025 and September 28, 2024, respectively.

Approximately $ 1.1 million and $ 1.3 million of stock-based compensation was capitalized to inventory as of December 27, 2025 and December 28, 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 September 27, 2025, the U.K.

As of December 27, 2025, the U.K.

and India plans were 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 27, 2025, the Company contributed $ 0.3 million to the U.K.

During the six months ended December 27, 2025, the Company contributed $ 0.7 million to the U.K.

plan and $ 2.3 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 27, 2025 September 28, 2024

Three Months Ended Six Months Ended

December 27, 2025 December 28, 2024 December 27, 2025 December 28, 2024

Interest cost $ 0.8 $ 0.8 $ 1.6 $ 1.6

6 unchanged sentences

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 $ 7.6 million related to its defined benefit pension plans during fiscal 2026 to make current benefit payments and fund future obligations.

As of September 27, 2025, approximately $ 1.6 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 28, 2025.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 27, 2025, approximately $ 3.0 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 28, 2025.

Commitments and Contingencies

11 unchanged sentences

Outstanding Letters of Credit, Performance Bonds and Other Claims

As of September 27, 2025, the Company had standby letters of credit of $ 6.3 million and performance bonds and other claims of $ 2.0 million collateralized by restricted cash.

As of December 27, 2025, the Company had standby letters of credit of $ 8.6 million and performance bonds and other claims of $ 2.0 million collateralized by restricted cash.

Product Warranties

The following table presents the changes in the Company’s warranty reserve during the three months ended September 27, 2025 and September 28, 2024 ( in millions ):

September 27, 2025 September 28, 2024

The following table presents the changes in the Company’s warranty reserve during the three and six months ended December 27, 2025 ( in millions ):

December 27, 2025

Three Months Ended Six Months Ended

Balance as of beginning of period $ 6.5 $ 6.7

1 unchanged sentence

Utilization of reserve ( 0.4 ) ( 1.0 )

Acquisition 0.6 0.6

Balance as of end of period $ 7.0 $ 7.0

22 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables present information on the Company’s reportable segments for the three months ended September 27, 2025 and September 28, 2024 ( in millions ):

Three Months Ended September 27, 2025

The following tables present information on the Company’s reportable segments for the three and six months ended December 27, 2025 and December 28, 2024 ( in millions ):

Three Months Ended December 27, 2025

Network and Service Enablement Optical Security and Performance Products Total

13 unchanged sentences

Interest expense ( 15.3 )

Loss before income taxes and equity investment losses $ ( 2.3 )

Inventories, net $ 82.0 $ 42.5 $ 124.5

Assets not allocated to segments 1,957.6

Total assets $ 2,082.1

Loss before income taxes and equity investment earnings $ ( 38.7 )

(1) Other segment items represents allocation of corporate level operating expenses.

Three Months Ended December 28, 2024

Network and Service Enablement Optical Security and Performance Products Total

Product revenue

$ 154.8 $ 70.9 $ 225.7

Service revenue

Net revenue $ 199.9 $ 70.9 $ 270.8

Cost of revenues 70.4 35.0

Research and development 45.0 4.2

Selling, general and administrative 41.7 6.0

Other segment items (1)

Total operating expense 112.1 12.9

Segment operating income $ 17.4 $ 23.0 $ 40.4

Segment operating margin 8.7 % 32.4 %

Unallocated other expenses ( 18.2 )

Interest and other income, net 3.9

Interest expense ( 7.5 )

Income before income taxes and equity investment earnings $ 18.6

(1) Other segment items represents allocation of corporate level operating expenses.

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Three Months Ended September 28, 2024

Six Months Ended December 27, 2025

Network and Service Enablement Optical Security and Performance Products Total

Product revenue $ 413.8 $ 160.9 $ 574.7

Service revenue 93.7 — 93.7

Net revenue $ 507.5 $ 160.9 $ 668.4

Cost of revenues 182.8 77.9

Research and development 105.8 7.2

Selling, general and administrative 99.1 13.2

Other segment items (1)

Total operating expense 263.0 26.2

Segment operating income $ 61.7 $ 56.8 $ 118.5

Segment operating margin 12.2 % 35.3 %

Unallocated other expenses ( 99.5 )

Loss on convertible note extinguishment ( 42.5 )

Interest and other income, net 5.2

Interest expense ( 22.7 )

Loss before income taxes and equity investment earnings $ ( 41.0 )

(1) Other segment items represents allocation of corporate level operating expenses.

Six Months Ended December 28, 2024

Network and Service Enablement Optical Security and Performance Products Total

Product revenue

$ 273.5 $ 149.7 $ 423.2

6 unchanged sentences

Total operating expense 216.5 25.3

Segment operating (loss) income $ ( 7.3 ) $ 31.2 $ 23.9

Segment operating income $ 10.1 $ 54.2 $ 64.3

Segment operating margin 2.8 % 36.2 %

2 unchanged sentences

Interest expense ( 15.0 )

Income before income taxes and equity investment losses $ 7.2

Inventories, net $ 49.2 $ 44.0 $ 93.2

Assets not allocated to segments 1,644.4

Total assets $ 1,737.6

Income before income taxes and equity investment earnings $ 25.8

(1) Other segment items represents allocation of corporate level operating expenses.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents information on the assets of the Company’s reportable segments at December 27, 2025 and June 28, 2025 ( in millions ):

December 27, 2025 June 28, 2025

Network and Service Enablement $ 98.2 $ 74.4

Optical Security and Performance Products 42.8 43.5

Total inventories, net 141.0 117.9

Assets not attributed to segments 2,636.8 1,875.9

Total assets $ 2,777.8 $ 1,993.8

VIAVI SOLUTIONS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company operates primarily in three geographic regions:

2 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 27, 2025 and September 28, 2024 (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 27, 2025 and December 28, 2024 (in millions):

Three Months Ended

September 27, 2025 September 28, 2024

December 27, 2025 December 28, 2024

Product Revenue Service Revenue Total Product Revenue Service Revenue Total

8 unchanged sentences

Total net revenue $ 317.3 $ 52.0 $ 369.3 $ 225.7 $ 45.1 $ 270.8

Six Months Ended

December 27, 2025 December 28, 2024

Product Revenue Service Revenue Total Product Revenue Service Revenue Total

United States $ 217.2 $ 34.1 $ 251.3 $ 142.0 $ 29.5 $ 171.5

Other Americas 39.6 8.8 48.4 25.4 7.9 33.3

Total Americas $ 256.8 $ 42.9 $ 299.7 $ 167.4 $ 37.4 $ 204.8

Asia-Pacific:

Greater China $ 116.4 $ 3.3 $ 119.7 $ 100.3 $ 3.9 $ 104.2

Other Asia 67.5 13.0 80.5 61.0 14.3 75.3

Total Asia-Pacific $ 183.9 $ 16.3 $ 200.2 $ 161.3 $ 18.2 $ 179.5

$ 134.0 $ 34.5 $ 168.5 $ 94.5 $ 30.2 $ 124.7

Total net revenue $ 574.7 $ 93.7 $ 668.4 $ 423.2 $ 85.8 $ 509.0

VIAVI SOLUTIONS INC.

1 unchanged sentence

Subsequent Events

On October 16, 2025, the Company completed the acquisition of Spirent Communications plc’s (Spirent) high-speed ethernet, network security and channel emulation testing business from Keysight Technologies, Inc.

(Keysight) for $ 425 million, subject to working capital adjustments.

We will account for the acquisition as a business combination.

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.

Concurrent with the closing of the acquisition, the Company entered into a $ 600 million senior secured term loan credit agreement (Term Loan Credit Agreement) with Wells Fargo Bank, National Association (Wells Fargo), as administrative agent, and other lenders.

The term loans, which mature on October 16, 2032, are secured by substantially all of the assets of the Company and those of its domestic subsidiaries.

The proceeds from the term loans were used to finance a portion of the acquisition, acquisition related expenses and will be used for general corporate purposes.

The term loans bear interest at rates based on SOFR or a specified base rate plus applicable margins, with quarterly principal payments of 1.0 % per annum, commencing on March 31, 2026.

The Company may repay all or part of the term loans early at its option.

Fees contingent on the closing of the term loans were approximately $ 12.4 million.

On October 16, 2025, the Company entered into an agreement with Wells Fargo to amend and extend its Senior Secured Asset-Based Revolving Credit Facility.

The amendment reduced the commitment under the credit facility to $ 200 million and extended the maturity to October 16, 2030.

Amounts outstanding under the credit facility accrue interest as follows:

(i) if the amounts outstanding are denominated in U.S.

Dollars, at a per annum rate equal to either, at the Company’s election, SOFR plus a margin of 1.50 % to 2.00 % per annum, or (ii) a specified base rate plus a margin of 0.50 % to 1.00 %, in each case, depending on the average excess availability under the facility.

On January 5, 2026, the Company prepaid $ 100.0 million of term loans under the Term Loan Credit Agreement.

The prepayment was accounted for as a partial extinguishment, with the carrying amount of the portion of debt prepaid, including the proportionate unamortized debt issuance costs, derecognized, and any difference between the reacquisition price and the carrying amount recognized as a loss on extinguishment of debt.

2026 Notes Retirement Notification

The 2026 Notes became convertible effective December 15, 2025.

On January 12, 2026, the Company delivered notification that upon conversion from note holders, the principal amount will be paid in cash with the remaining amount settled with its shares of common stock.

Restructuring Plan

On January 23, 2026, the Company approved a restructuring plan (the Plan) to improve operational efficiencies, better align the Company’s workforce with current business needs and strategic growth opportunities and includes integration of recently acquired businesses.

The Plan includes a global workforce reduction, facilities rationalization and asset write-offs.

The Company expects approximately 5 % of its global workforce to be affected.

The Company estimates it will incur total charges of approximately $ 32 million in connection with the Plan, including approximately $ 24 million in cash expenditures, primarily related to employee severance and related costs.

The Company expects to recognize the majority of these charges by the end of June 2026 with the Plan substantially completed by the end of calendar 2026.

The Company anticipates the Plan to result in approximately $ 30 million in annualized cost savings upon completion.

The amount and timing of the financial impact may differ from the initial estimates provided.

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