What changed in this filing

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Item 1A. Risk Factors

2026-04-30 compared with 2026-01-29 · 25 added, 23 removed, 363 unchanged (12% of the section changed)

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We operate globally and sell our products in countries throughout the world.

Recent escalation in regional conflicts, including the current conflict between Russia and Ukraine, ongoing and expanding economic sanctions, political instability and economic uncertainty in the Middle East, and the risk of increased tensions between the U.S.

Escalations in regional conflicts, including the ongoing conflicts between Russia and Ukraine and in the Middle East, ongoing and expanding economic sanctions, political instability and economic uncertainty in the Middle East, and the risk of increased tensions between the U.S.

and China, could curtail or prohibit our ability to transfer certain technologies, to sell our products and solutions, or to continue to operate in certain locations.

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Further, it is possible that the U.S.-Chinese geopolitical tensions could result in government measures that could adversely impact our business.

Further, the U.S.

administration has implemented and could implement further broad-based global tariffs that could adversely impact trade relations and result in higher costs.

The final timing and amount of tariff rates continues to evolve and therefore the impact, including those of any potential retaliatory tariffs, is difficult to forecast.

International conflict has contributed to (i) increased pressure on the supply chain and could further result in increased energy costs, which could increase the cost of manufacturing, selling and delivering products and solutions (ii) inflation, which could result in increases in the cost of manufacturing products, reduced customer purchasing power, increased price pressure, and reduced or cancelled orders (iii) increased risk of cybersecurity attacks and (iv) general market instability, all of which could adversely impact our financial results.

Tariff rates continue to evolve and therefore the impact, including those of any potential retaliatory tariffs, is difficult to forecast.

International conflict has contributed to (i) increased pressure on the supply chain and increased energy and fuel costs, which could increase the cost of manufacturing, selling and delivering products and solutions (ii) inflation, which could result in increases in the cost of manufacturing products, reduced customer purchasing power, increased price pressure, and reduced or cancelled orders (iii) increases in cybersecurity attacks and (iv) general market instability, all of which could adversely impact our financial results.

Risks Related to Our Business Strategy and Industry

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• Our OSP segment operating margin may experience some downward pressure as a result of a higher mix of 3D sensing products and increased operating expenses;

• Limited availability of components and resources for our products which leads to higher component prices;

• Longer lead times for components and resources for our products, for example, recent memory chip shortages which leads to higher component prices;

• Resource rationing, including rationing of utilities like electricity by governments and/or service providers;

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• Cyclical demand for our currency products;

• Changing market and economic conditions, including impacts due to tariffs, economic sanctions and export restrictions, the ongoing conflict between Russia and Ukraine, political instability and economic uncertainty in the Middle East, tensions and trade sanctions between the U.S.

• Changing market and economic conditions, including impacts due to tariffs, economic sanctions and export restrictions, the ongoing conflicts between Russia and Ukraine and in the Middle East, ongoing and expanding economic sanctions, political instability and economic uncertainty in the Middle East, tensions and trade sanctions between the U.S.

and China, supply chain constraints, pricing and inflationary pressures;

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• Political, legal and economic instability in foreign markets, particularly in those markets in which we maintain manufacturing and product development facilities;

• Strained or worsening relations between the U.S., Russia and China and related impacts on other countries;

• Strained or worsening relations between the U.S., Russia, China and the Middle East and related impacts on other countries;

• Difficulties in staffing and management;

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• Potential adverse tax consequences.

Global and regional health pandemics have affected and may in the future affect the manufacturing and shipment of goods globally.

International conflicts and global and regional health pandemics have affected and may in the future affect the manufacturing and shipment of goods globally.

Any delay in production or delivery of our products due to an extended closure of our suppliers’ plants could adversely impact our business, along with delays in shipment of our products as well as increased logistics costs.

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In the event future iterations of open-source software are made available under a revised license, such license revisions may adversely affect our ability to use such future iterations.

Similarly, GenAI technology has proliferated including as a feature in existing commercially available products, some of which we use.

Similarly, GenAI technology and, more recently, Agentic AI have proliferated including as a feature in existing commercially available products, some of which we use.

GenAI is a type of machine-learning model capable of generating various types of content, including data, text and images.

Use of GenAI tools could expose us to data and network security risks.

Agentic AI refers to autonomous or semi-autonomous AI systems that can reason, plan, and take actions to achieve complex, multi-step goals with minimal human supervision.

Use of these tools could expose us to data and network security risks.

These risks include the exposure of our intellectual property, confidential and proprietary information (including customer information) to unknown recipients;

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government trade actions and restrictions could have an adverse impact on our business, financial position, and results of operation.

and China have been engaged in protracted negotiations over the Chinese government’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.

Trade tensions between the U.S.

and China have continued to escalate, with the U.S.

and China both imposing a variety of trade barriers against the other, including various export control restrictions and tariffs.

Huawei Technologies Co.

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affiliates (collectively, Huawei) are on the Entity List of the Bureau of Industry and Security of the U.S.

Department of Commerce (BIS), which imposes limitations on the supply of certain U.S.

Department of Commerce (BIS), which imposes limitations on the supply of most U.S.

items and product support to Huawei.

BIS issued final rules that further restrict access by Huawei to items produced domestically and abroad from U.S.

technology and software.

Certain products of VIAVI are subject to the restrictions;

export controls also restrict all persons from sharing many items produced domestically and abroad from U.S.

technology and software with Huawei.

Certain VIAVI products are subject to the restrictions;

however, the ongoing impact is not expected to be material to our overall operations.

Moreover, the additional tariffs announced by the U.S.

administration in 2025, or other trade actions that may be implemented, may increase the cost of certain materials and/or products, thereby adversely affecting our profitability.

Moreover, the additional tariffs imposed by the U.S.

administration in 2025 (and, following the U.S.

Supreme Court striking down such tariffs as unconstitutional, the temporary replacement tariffs imposed in 2026), and any other tariffs or other trade actions that may be implemented targeting China or other jurisdictions relevant to VIAVI, may increase the cost of certain materials and/or products, thereby adversely affecting our profitability.

These actions could require us to pass these costs to our customers, which could decrease demand for our products, and could adversely impact our business.

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Hence, greater restrictions and/or disruptions of our suppliers’ ability to operate facilities and/or do business in these jurisdictions may increase the cost of certain materials and/or limit the supply of products and may result in deterioration of our profit margins, a potential need to increase our pricing and, in so doing, may decrease demand for our products and thereby adversely impact our revenue or profitability.

Due to the ongoing conflict between Russia and Ukraine, the U.S., European Union (E.U.), and United Kingdom (U.K.) have broadened restrictions on supply to Russia, thereby blocking shipments of technology, telecommunications and consumer electronics products to Russia.

Due to the ongoing conflict between Russia and Ukraine, the U.S., European Union (E.U.), and United Kingdom (U.K.) have broadened restrictions on supply to Russia of various items, including shipments of many technology, telecommunications and consumer electronics products.

We suspended transactions in the region effective February 2022 which negatively impacted our business in the region.

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These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness under the agreements governing our existing debt.

For example, in March 2025, we obtained commitments for a $425 million 7-year term loan facility in connection with our acquisition of Spirent’s HSE and CE business.

We subsequently marketed and upsized to a $600 million 7-year term loan facility and successfully allocated the loan to prospective lenders at an initial interest rate of SOFR+2.50% and an original issue price of 99.75%.

The incremental $175 million will be used for general corporate purposes.

On October 16, 2025, concurrent with the closing of the acquisition of the HSE and CE business, the Company executed the Term Loan Credit Agreement with Wells Fargo, as administrative agent, and other lenders.

For example, in 2025, in connection with our acquisition of Spirent’s HSE and CE business, we entered into a $600 million 7-year term loan facility and successfully allocated the loan to prospective lenders at an initial interest rate of SOFR+2.50% and an original issue price of 99.75%.

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.

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For example, on December 22, 2025 we exchanged $103.5 million aggregate principal amount of the 2026 Notes for an aggregate of 7.9 million shares which left approximately $49.0 million in aggregate principal amount of the 2026 Notes outstanding.

In March 2026, the Company settled the remaining 2026 Notes through a combination of $49.0 million in cash and 1.8 million shares of its common stock.

In addition, the Company paid $0.4 million of accrued interest in cash.

Our ability to make payments on our indebtedness when due, to make payments upon conversion with respect to our convertible senior notes or to refinance our indebtedness as we may need or desire, depends on our future performance and our ability to generate cash flow from operations, which is subject to economic, financial, competitive and other factors beyond our control.

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companies or citizens.

The G7-US agreement has not yet been enacted into law, and we continue to evaluate our Pillar Two position based on legislation currently in force.

agreement has not yet been enacted into law, and we continue to evaluate our Pillar Two position based on legislation currently in force.

We will monitor tax developments for any future implications with respect to our tax burden, net income, and cash flow.

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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 1A. Risk Factors