VIAV - Earnings call transcript Q4 2024

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Operator

Hello, everyone. My name is Emma, welcome to the Viavi Solutions Fourth Quarter and Full Year 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. I will now turn the conference over to [ Vibuti Naer ], Viavi Solutions Head of Investor Relations. ahead. go Please

Unknown Executive

Relations Good President uncertainties Fourth company's call that Emma. My financial to from non-GAAP. and Please to as review are encourage is of report slides, include usefulness today's forward-looking We welcome Viavi's on and is historical me And release. include Thank annual tables, today's www.investor.viavisolutions.com. CEO; SEC on to these of factors in CFO. the including to valid otherwise, these and as afternoon, guidance in that and Full Solutions call The call Investor on we to unless filings. Head our results non-GAAP ], Viavi revenue, provide will Quarter Vibuti risks earnings cause preliminary discuss GAAP and you today. all limitations also except call, earnings release are recent note, subject Khaykin, available could risk this The undertakes only their Call. Viavi the results our state this those results and update These actual are Year Viavi differ forward-looking Solutions. performance. our supplemental about discussed during statements. obligation this Please [ with statements, and our financials our statements current we note that as well filings, to you, and Oleg reconcile particularly financial are the estimations. Naer everyone, most for and statements materially our expectations XXXX name Daskal, Earnings Ilan We described which website at no

website Pacific we recording on today's the X:XX call, Time p.m. we by meet available will evening. are Finally, and recording this our

to I would the to Ilan. call over like turn Now

Ilan Daskal

our the million, Vibhor the results year review [ $XXX quarter $XXX I was on quarter points at guidance for down of revenue up of XX of of of of and the quarter ]. $X.XX million XXXX. Net basis XX.X%. range for like down on prior to points. up X.X% the Operating range And XXX was to and year-over-year X.X% now the the the of above $X.XX EPS increased everyone. which fiscal $X.XX. our Good down sequentially. end which guidance the basis, and would to X.X%. margin at a at midpoint margin fourth On a high from was was you, $XXX was afternoon, EPS basis, $X.XX $X.XX was a Revenue was XX.X%, fourth Thank to basis year-over-year by was of quarter was midpoint million. range basis, year-over-year guidance our sequentially Operating

was billion, and by conservative the due revenue. full year Operating year-over-year for down year, providers prior $X $X.XX fiscal the due points fiscal the For margin XXXX full service year, year a from primarily full to spend down was down X.X% primarily to $X.XX, from was basis year lower EPS XX.X%, and year-over-year revenue basis on NAMs. XXX

the for fiscal high basis same X.X% of low NSE's to was came in $XX the all our quarter sequentially XX range to on result and And primarily the and as guidance a XX% XX service a at points and was on for operating and by is XX%. which $XXX QX. revenue, quarter. period a to the from result basis year-over-year our was million lower points period the was that to the is of down SE NE product flat to year. same guidance XX.X%, as by decline points at providers by an spend range X.X%, lower XXX XXX on basis continued year-over-year quarter is points revenue which increase facility OSP's as same million, of products. year-over-year due to SE the a basis million OSP by the came $XX.X to lower a quarter result business of manufacturing of up fall and improvement gross NE X.X% XXX ramp of basis for X.X% $XXX.X of was X.X% Chandler. across last for was the NSC XX.X%, X.X% which at up a last increase the our in revenue revenue. $XXX was end of gross XXX sequentially is year-over-year decline margin margin X.X% XX.X%, for guidance of from pushed last an million year. basis same from above OSP's at which revenue basis, at our XXX quarter revenue operating on end operating points margin $XX increase NAMs. fourth million. of of and guidance year was margin of favorable margin was is than points partially mix. margin basis segment. exceeded our fourth NSE a higher which from results the NSC basis an which million, the range last high operating Moving gross which on driven for which driven $XX.X million the and quarter strength period was fourth basis. period of the which $XXX.X of production basis conservative year, gross was year-over-year a in was mix new margin margin higher and revenue as was same XX%, revenue year million, XX.X%, up through. period compared was supported quarter was by OSP out end margin our of gross is is is product last a the the range points NSE's end

the million million fourth million $XXX.X end to quarter in was XXXX. of at operating from was quarter year. cash same and sheet at $XX.X the to Total end QX investments short-term flow. the third balance period cash fiscal $XX.X of activities the compared the million $XXX.X flow for last and on of versus Cash the Moving

During the about shares X.X quarter, for of our stock million. $XX million purchased we

For about shares $XX X.X million. the million full year, for we purchased

$XXX We in needs. our XXXX, we remaining for restructuring in quarter. guidance our million last The the operational shares the the the quarter and and share reduction efficiencies down and was quarter have $X.X current million plan quarter initiated was shares, for In XXX.X from million in prior authorized count approximately shares million the our versus fourth the under year share in to for repurchase diluted we XXX.X the better new CapEx million were Chandler. program. $X.X workforce June a XXX.X facility current compared period million completing same when with business construction to improve align of fully

approximately estimate workforce impacted of and be global in this incur charges plan. restructuring expect of our $XX to approximately We to million X% connection with

of operating initiative, by this fiscal run As of expenses. cost to anticipate end XXXX benefit savings will $XX annualized a the achieve rate mainly our an we million, approximately result which of

guidance. our Moving on to

the demand continue and the in of fiscal said, of of We environment expect first service by nearing expect bottom cycle, NAMs. half second a we this conservative the half we a That are spend that fiscal year. and to XXXX down recovery will experience in we that providers believe the gradual

quarter is between first XX for range be we Given $XXX $XXX the margin plus and million. revenue in lingering guiding softness, to XXXX minus the are $X.XX be points to fiscal EPS million basis of XX.X%, the and of Operating expected $X.XX. and or

with million, basis with expect plus be $X minus operating We revenue plus an plus breakeven points. million, NSE minus minus margin is of approximately $XXX be to XX%, $X margin or a revenue expected plus to or million, or points. XXX operating OSP basis $XX million, minus or approximately XXX

plus Our about tax expected first of minus as the be result for a million, jurisdictional are quarter mix. or $XXX,XXX to fiscal expenses $X

expect We shares. be Oleg. and about is over million net expenses reflect a share call $X.X the I count will expected the Oleg? and XXX.X that, of With income to expense million, to other approximately turn to

Oleg Khaykin

in continues be weaker American spend providers. demand. guidance, Viavi with conservative, market the end came offsetting our stronger Ilan. particularly these NSE revenue, the of Thank Despite environment revenue at OSP you, service headwinds, partially our to North midpoint

should demand from providers out, at year. of fourth revenue was in of the the softer a A with service recovery a our range. guidance range. revenue NSE. NSE see that. The on the half more on in NAMs. by to year-over-year guidance higher EPS NSE quarter believe start is fiscal of We decline Starting in color second our demand NSE we lower X% the end Our declined the the and end fiscal bit and came driven basis, bottoming at wireless

service by investment data levels maintenance the build-outs The field absence providers, first center fiber North largely major upgrades That us with internet the plants the at field their half in second of America. X providers instruments X of particularly and the to fiber pickup said, Tier leads network remained expect demand XXXX. operators, demand in to is regarding due fiscal recent comments a instruments by working in major by together in service Tier

much is small. by Our wireless however, NAMs reduced their is demand of Other One new continues relatively [ORAN] deployment cutbacks wireless in of are emergence development, and faring to reduced are major R&D investments operators. parts seeing response was by demand Fiber positive have production CapEx better. trend production in XG recent slightly lab wireless many and significant sharply by we NSC the to to pursuing spend customers spend be impacted cumulative still up.

ramp and production. driven fiscal be the seeing strong navigation continues X.X timing for during and products. of recovery We expect to to to growth a Express Fiber demand growth avionics and the revenue customer upcoming communications, spot, year-over-year in 'XX X.X terabits Mill/Aero positioning, drive business for by transition and PCI bright XX

segment orders were demand helped QX. We SE to from year-on-year, enjoy by grew fiscal enterprise out expect strong pushed segment this 'XX. throughout business that

a of are products our and in and to Ops AI a be interest We growth beyond. lot seeing for driver fiscal 'XX expected

a 'XX, As QX similar seasonally we as expect demand by in fiscal dynamics weaker QX. driven look at we

to Continued continued NE demand business. strength in and offset fiber wireless weakness revenue, by weaker NAMs from and seasonally and the mill/aero service leading XX weaker providers SC production overall

calendar fiscal the and a remainder ahead gradual environment recovery 'XX the of persist the of half first for 'XX expect at Looking calendar NSE, for conservative to we in 'XX. demand spend

on end grew higher fiscal by OSP. range. a OSP of for sensing products. quarter year-over-year turning exceeded the Now The our driven XD OSP results demand to mainly anti-counterfeiting Overall, basis, and guidance fourth higher

in expect to year sequentially up for 'XX be September we for fiscal Viavi fiscal demand expect to challenging fiscal products. summarize, XD OSP ahead, by to we Looking 'XX Overall, in quarter, OSP demand mostly To the the driven similar be the 'XX. a stronger sensing was seasonally industry.

start and the appreciation first While to we market I our gradual turn persist for calendar soft to recovery to managing express through of environment Viavi remainder anticipate in of over the like environment shareholders to 'XX. and employees, With this for calendar customers that, would support. thank we I'll of their the my it for my expect team 'XX, ViBone. challenging half

Unknown Executive

for the Emma? Q&A, ready We're

Operator

Thank you. [Operator instructions].

the with of comes line Ruben question from first Roy Your Stifel.

Ruben Roy

the then had next little of calendar your quick then can X about year. instruments about Thank you're guess, I at everybody. Oleg, And or you're the you. and and of environment customers, lab near-term in first Hi, inventory then on bit instruments. for X also by a thinking sort levels follow-ups. I how detail guess, field sort thinking drill just around of I sort of you the how thanks half

Oleg Khaykin

bit there's all a to our And is There's a gear, they needs I really we've with just major technology positive also of between as their that -- better start don't projects to what's this chunk thing number call kind because they are first placing they numbers, at but quarters, expansion makes And to periodically shows deliveries and of. what customers inventory from projects field it's are time fairly are mean it the winding imagine or internet projects these And just is talking in perspective, running Tier the our and we is like data our have I networking replacing as there for instruments me for Lumen and I a is of I the extent just batteries major see and back working obviously the damaged, had is of come players what equipment churn. like whenever resuming they're there are X feel looking from actually they when been to revenue seeing lot AT&T, Sure. all coincides it's just that our big start And say revenue expansion past to installed basically orders. a that. There's players developing the they obviously, they damaged. also also or customers big fiber that new -- that mean, large the a today others. that so been at was die, no interest upgrade be recently for and inventories a hyperscale a view but those centers. the of clearly, quarterly you lot there's replaced. as are know -- I of upgrade churn mainly down. gets which technology clearly, start base, level, news And for us. we replace speak about doing for heard, any and we constant things it's whatever And consistent several equipment maintenance

production, type is On the much pretty XX business. also that just-in-time

a PCI R&D start an fiber equipment, open next-generation the are orders developing it comes sees and soon high-speed and need when area, purely the when CapEx available, and are in driving as the in mean, for they placing equipment high-speed new product, flowing, organization Express computer So it. seeing want upcoming area compute are the is usually they and X.X the and as X.X the they terabits. budgets is I we is

of a X.X into So But in 'XX. first flowing gig, good. in we data also the the service time, When year the higher driven it's is the to of service the major the And their really XXX higher driving the half very more to fiber half upgrades they that speed second were than of centers by the feel be fiscal interest to able XXX respect, the the that's vendors we speeds much probably centers there's feeling providers. much transition away lot equipment. manufacturing the The or calendar saw further terabits pretty why we're speeds in to players that seeing data our modules for rather of terabit on gig, the it's first that deploy AI production are module factories we're X.X driving bullish providers. products. drive And transition are manufacturing, equipment to and products. lab to contract This the and time,

So that's of kind areas. more X color those on

Ruben Roy

X.X And again. terabit my hit on you Yes. follow-up Very side. the helpful

a versus how model. restructuring. sort then talked over thinking I guess through R&D follow-up about think projects you you're marketing that kind OpEx should terms you year. savings the fiscal shift and finer how quick put savings the that So modeling as about I'll of in just to for between Maybe hits the the year and of Ilon, a Ilan we the can on and it the through -- of sales point about

Ilan Daskal

Sure.

projects major of impacted most being question. of And earlier see the reduction initiative. will mentioned for as prepared of the the overall thanks due to R&D any expenses. be our this a don't delayed We So obviously, I remarks, in operating it or

but operating impacted. will of the development we that as of full of the the terms of And drive mentioned will So in are I the across by be the none also, earlier, expenses, be these end the board realization year. initiatives

So of kind a net there. more of it's spend XXXX

Operator

Your with Needham. next Ryan question Koontz the from line comes of

Ryan Koontz

a fiber seeing are providers Are bit fiber little wholesale That leasing data are demand double-click Certainly coming I appreciate service and soon. center connectivity you operators from interconnect like players. your the about data actual it's center doesn't who on bandwidth basis? they the back dark a anytime or leasing there from on around wanted around comment XG. to sound comments your for

Oleg Khaykin

we're comes things thing, lot becomes like fibers doing years the What lays biggest who and quality it they provider And don't mean the later. fiber But importantly, that additional more than And the I turn and need center, connect different lot those lay started maybe same little then on fiber, just terms they also then a initially ones, thought. operators. difference them. is And the varies it it, what's basically additional data generally more strands What turn laying with to a them. need it fiber, they're seeing centers from for faster they of is dark finding in I'm a also And when and few bandwidth mean, there's when fiber. the a right, fiber on. the and data lease sensitive, service the fiber data centers, a pick to until fiber, need they they I that lay performance going speeds and build a I of latency, they everybody of vendor and you across they're connect So that. it fibers a lease dark much of they

actually are now sure the you strength fiber exactly gap putting what working they're it And needs much to are characterize you're fiber strict you it and So that need with deliver. because unreliable this for. So actually actually who it, turn bridge on fairly data to you that the operators what build we realizing fiber as to with they performance the is and as right? center provision gets plays pretty make know and level agreements as fiber getting people very deployed, to you traditional is service cannot our to what

everything. throughout it the the very next starting So the fibers work -- rolling finding then connect things that may becomes things software and and training a that. than out or not and on, rather just switch -- to by turn a life. And you wavelength, only like truck you and then means to can which usually you connect you happens And it need quickly, it monitor when on actually

changing it's has are more the I deploying data doing. new model who the the paradigm are the we and demand And guess evolution who level service Tier X the business to that forethought going been are operators center view the fiber the traditional seeing as truly they it players in and business. responding of network And proactively they're So their of think winning provider I ones forward.

Ryan Koontz

on following another within been just broadband And sector, depressed. segment, the -- up know our to that's I big pretty

about access previously some fiber life I pushouts seeing you're sort cable, these and talked that in obviously, Any are [Indiscernible] in driving seeing broadband? comments the we're be signs And in fiber any assume seeing and some pushouts cable? -- will industry. you You've things of of around

Oleg Khaykin

demand The in I quarters. over where they since other think But cable And is for and upgrade buy their so or They quarter fiber of just over things would -- in of multiple down shipment deployment, but part unlike leads the the the are less. on kind up pressure you cable, is it bit in a it bump within to it is because players a think doing the quarters stopped the which the previous the just provides Sure. it slowed the underway. to quarter hand, out. on smoother everything a one smaller roll I have home multiple

does them that to their fiber the to resuming comments more about the area and by home the aggressive probably fixed the However, on concerned cable expect as competitive accelerate, well. push will and spend is about was And saw year. appear I other cable pressure wireless. serious we aggressive to be AT&T see next I calendar

I on I of into of of kind next end new going are year major anything. research, do seeing the terms competitive said because not really And of as movement think the of pointed have in but And continuing any or a the mean, in has far, as be advanced be that's all think to out XG the start year products gone piece kind as accelerating NAMs our mode, not fact, factor to they of kind I And pressure market. of hybernation been I in been fiscal them there. well, meaningful terms where I'm last deployment, middle of to kind -- the do will earliest will recovering. And much it has to not earlier, so you

Ryan Koontz

last quick sense. a just side. the of comment makes That operations And one on lot

was in in-house? sheet And of Let down driving what that? around a quite you your step down what inventory bit. Any the kind on inventory Are able comments to you forecasted? will your sell balance be

Oleg Khaykin

agree as down and like some kind semi-companies Well, I shoved of -- have lot the a the we course, our built you of to a shortage, chain kind supply of know, had to all product it up of we nonrefundable, think lot throats of inventory. [Indiscernible], all so during noncancelable, component

run all is anti-counterfeiting diligently demand working But bit come as inventory much back, bringing material that been are the the we've of pretty a now of with we more materials manufacturing, been quite raw as to been line well as also have and starting semi-finished kind current holding and anti-counterfeiting our down. inventory goods raw consuming the demand. We our in we've rate

buying We much haven't stuff. been

put Let's [Indiscernible]. it

Ilan Daskal

little categorize it it a prior revenue kind of to mean level It's now more the more normalized more I will now. to and bit a cycle. to as fluctuate opposed as

Operator

Mehdi question from line of with the comes next Your Hosseini SIG.

Mehdi Hosseini

Yes.

progressed, especially erosion one units, a first the a us do, I different just and significant forth? have Or quarter providers, The start business And how you Oleg, booking? Was of there you did and carry CSPs can terms follow-up. week to throughout through. in so tell service has

Oleg Khaykin

mean, is [Indiscernible]. assume I'd the from forecast the early and actually, that -- say seeing the quarter what I difference prior quarters, largely are in the kind we of Well, a we

September wireless wireless guidance by fewer major NAMs, -- on get the of those the a and through, which the and a bookings and and order major market we cancellations. way decided high So we've And are don't decommits March on quarter quarters. would been because in reduced The in take a to and bookings We book-to-ship and works, of market. take end the came to a order lot our NSE. demand was that NAM we generally is stronger within works, it have we beaten quarter because only kind actually, get quarter. track cancellation it X/X, are June weaker, on -- product December usually of lot our really rely -- had less the slowness customer not the ratios less a cancellation, we their was seeing big of our or the generally really within

I bookings, enter hold and the So will left many up kind health that bookings there's they then and the well do or me out what is as we of track to a bookings the supposed they're they're go. the I quarter better like up. pushed the show the up the it And how more We of expectations of how feel way is gauge little look -- relative funnel actually showing we forecast to up. a way show makes canceled. that get get Whereas or before, and

more So and environment, the I may revenue so while plan we think or be environment now the acquire. lower, can robust, the is booking better more booking predictable

Mehdi Hosseini

double-click I that is year-over-year of guidance show on for what Should being if the [Indiscernible] then OSP. in I any reflected And Great. quarter, assume the growth? would just sense September that

Oleg Khaykin

sensing which XD segment? Are anti-counterfit? or you The talking

Mehdi Hosseini

sensing. XD

Oleg Khaykin

we actually because to going revenue it's have in year-on-year schedule. -- now new the ASP lower the Well,

pricing so are is the is for just the year. want road erosion growth same, offset a higher, slightly there ASP is maybe enough problem the volumes the The but So volume that not ASP little I a the next map, [Indiscernible] the to is lower.

very So probably driven customer, it's still single of very of by a products. -- penetration have of but course, -- level which and a high much

we And that contract having I I there much think a And is June mainly development, platforms throughout better there's will of demand XD don't kind overstressed trying year. life think the doing be I still less be also years this linearized think handful actually a bit a to positive But go-ahead. big but in the it's just the if be of off are if their Android a of XD and many driven we It's by adoption, in who manufacturers signs in new September, a now very full one having small noticing volume. want after trend I and us volumes, December the is very One The to or quarter Samsung but much still, quarter China outlook. the September, becomes demand that lot call of, it's March with start, positive. And trends, also major December them and players demand heavily sensing. other and is are mainly little this may seeing thing being a are other for on then higher driven as make that So sensing. one so will volumes. hold interesting by rumors now we the

Ilan Daskal

$X.X about It's million the for first year-over-year quarter.

the just supply chain be have and of itself. kind mentioned, it we'll would of X, the but that monitor cetera, X that et it Oleg it So to also over course of discussed Oleg and pricing, maybe the offset lineralized quarters, kind will more

Mehdi Hosseini

Sure.

by implied about the sensing Cano both modeling, growth and of of guide driven that [Indiscernible] for your fit? midpoint Just implies a sequential X% Is XD in OSP.

Oleg Khaykin

the rebound. to lot have starting is I business mean anti-counterfeiting consumed. of the inventories a been think I Well,

ASP I for an sensing a higher it but to discount is has the So a some but numbers, -- there, have uptick you erosion. we there XD in have mean also of

course, So better been in assets. the an terms is very irony anti- the of recovering where in important doing it's closer are demand-wise, the And sitting to because segments prior to range churn you the -- but a of million for $XX of than between for year. big probably both that's come when volume-wise us lot have anti-counterfeiting it's would start manufacturing

business absorption So the OSP the a a anti-counterfeiting bigger margin stronger a clearly on impact operating of on demand has unit. better driving

Operator

Rosenblatt. Genovese line comes of question Michael from the Next with

Michael Genovese

the that, investment half time. have thoughts, or just the test directly And would of more we Oleg, it like the key those it. to announce to questions guess in recovery Is I question, similar? things about I over I test? help providers wanted announcement a about which other something Lumen could but lot could service dot run is I AI AI? is, if field connect a their there's kind to how field or just do you've unit and can appreciate improve that one spoken other kind you there, second on few expect so how in of data help investment center

Oleg Khaykin

Well, sure.

the Actually, And that were Lumen I talk mean, I Xs when proactive more fair, they been those they innovative out fiber roll and a terms when differentiate players good your companies Tier more about terms listened innovative I actually been one they being months, of ideas their things even of implementing and all in innovative positive to of lot actually think how deploy mean, they beaten are what -- proposition. technology Lumen one credit, things. truly more be I in give them space goodness. they're think from they've to and in all really that Lumen has them value the is I -- the I of the that of because the like in aggressive, mean, last XX to operator. run-of-the-mill how down more of we

any to the been were past They not that, innovation. going down pulp. I'm didn't it it. beaten for start continued they So doing on when into more even with Lumen, but They've say the just they X.X the years, year,

Michael Genovese

whether fiber prediction [Indiscernible] guess AI more earlier, or it but guess or of fiber, investments any you because whether why [Indiscernible] on So kind on touch [Indiscernible]. more. it's color I investment, I or just comment this any a seems demand? it's did like there I creating this more, core AI mean optical their bit that's Lumen optical access a

Oleg Khaykin

of are gig, XXX particular, need in NAMs get-go. between as the adoption about service the and they higher between we it, to strands what is the fiber trucks driving and the I consumption, at we gig then And reason strands up whereas, a, X.X the they data so connect they XX was speeds terabits and terabits. centers. service dark, service fiber providers. all strength Because another traditionally, XXX are fiber driven on to maybe the say, the years, much, of but connecting the gig, for -- by to the XXX bandwidth so providers. from a if they being supplying being faster What into generally provider lighting the -- seeing than much driven kind more as be and And what doing I every roll it. by they from mix they is see their XXX the to gig you data turn with traditionally, drive -- gig, of pay lay XXX the look these grow Yes. just gig, much connect then centers, time would They XXX they need up fiber rate And them as quicker. shorter. next lighting was maybe one may service X.X mean, is like seeing couple talking enabled is fiber, turn is they gig of then will was let's centers it traffic up and they time sitting data to are all actually only others providers

view I much for So network. need basically core are in I that us at the centers the than positive look And frequent more data metro service their faster who and interconnecting a means looking responsiveness. for respect, see their as that different completely for much changes them it and would provider fiber because a between

Operator

line Your Meta the Marshall with of next Morgan comes from question Stanley.

Karan Juvekar

This Juvekar is for on Karan Meta.

spend any of in to some recovery? and play are be North between there throughout challenged guess, the know I or out? you're you guess just So And a expecting thinking just America terms you today on I of recovery? just into side, revenues how question, uptick, a most expect European a year, function expect sort the trends is about recovery you're I you parsing environment carriers, recovery know I guess year. as the look mindful a first of gradual more in sort expecting first the next how step you conservative calendar the out U.S. NSE where I to and of half

Oleg Khaykin

What NE, you or? what does -- mean said like it service, function NSC

Karan Juvekar

gradual. the a just or function of no, recovery step sort No, being more

Oleg Khaykin

function. it. Step Got

think basic it like it's -- so at I there's look instruments. the things -- field

like but little projects. lots being are those I steps because big think of would -- say, I a step, a by driven that's not

has has So slowed but amazingly, it's near North I North America. basically not gradual bad been as say, that last the think Yes, been X for they America bad. a recovery. cricket I Europe years. would down, as And nowhere

be way, deployment, a because And may and needs step to whirlwind a wireless of accelerate if instruments. accelerate, AT&T it creates to as in terms big in with resume have their sends to that function a something means if will to for the restarts cable the competitive function, step do to industry, then as bit clearly, have it fiber more nice somebody AT&T fiber plans a which will think continue shock through responding. it start the to everybody a are the I to So a of guys proceed their the home, usually, going

follow everybody So else when to they spending, when usually. start stop generally, spending, others just are they going spending stops

I'd year, starts a step to production, half a first -- is clearly, okay? terabits as America. Where North calendar we a to demand. So of get rather think But is the really news much want did fiber mean, North expectation in base really as follows good And I Europe see the do recovery with -- the the don't greater create pretty go or down recover, America be and as will I in big a really of XX next driver gradual X.X of in function the not never quickly. Europe -- I but terms acceleration

which you been up, So all we're a plans Central has ways, the But but the be as some Latin ones lot out is seeing of the aggressive to playing of especially AI in a catch last pretty recovery been also in more and expect products always our other well. and some seeing and the America, is what's be I Europe are bit actually, more many coming will they mild. really solid interesting think in interesting we're ops long. And South opportunities, America Asia for of more

Karan Juvekar

around very wanted a then the side, sort I would That's there. and bit that just it But forward sort And of inventories color upside? What the you depleted. mentioned helpful? of earlier helpful. Is prints on are be to seeing get more drove sort that on little you're trends Okay. just on inventory OSP that builds of know I moving or expectations new

Oleg Khaykin

right, inventories, of you're our talking talking about? providers? not Which the internal inventories inventories the service You're about

Karan Juvekar

side, [Indiscernible]. OSP the inventory Like

Oleg Khaykin

yes. OSP,

really I as the earlier, order up of the mentioned a driven they -- some built the inventory was a products hand. in because we recovery material demand, keep also in and lot -- So that COVID to on seeing are lot of and the I it's mean, anticounterfeiting channel during

has of a been wound consumed. and down lot Finally, it

the coming line and of demand more consumption the really is back and restocking the or are orders in So that. less with like that anything

Operator

Your Capital. of next question comes Tim from line Northland the Savageaux with

Timothy Savageaux

questions. couple A of

First, on the guide.

ASPs some you for seen kind to million the I business, think comment I you double-digit initially I $XX heard that think guess increase not. of like OSP. or there's And looking at sort not in if you have closer were sounds would of so saying to in about that Did maybe something it million get the see a in you that maybe but negatives right, currency sequential -- I right? because would expect something you're

Oleg Khaykin

business. the no negatives there's currency No, in

revenue pricing were they much year taken demand. the and volumes some I a of people erosion, a than mean about because are think I place ASP XD just new down the not in are with have the clearly, more that the talking sensing ago. we

talking that was So about. what was I

Timothy Savageaux

talking down But see product same on like last end a And some I there we're you sequentially. be particular in there markets similar or talking typically seasonality QX to for I that relative there. NSE guess was I NSE driving any sequential, is coming sequential 'XX? question but decline that that thing. year, just could think looks the It about

Oleg Khaykin

I say And demand. mean, demand is But probably is NAMs it's is demand area we orders I field would the one lower. -- more weaker seasonality. would say mean more I'd gotten some just think general, instrumentation, wireless I weaker. service I really clearly, provider the just normally where have just I think

Timothy Savageaux

and driven. back side, of instrumentation think in AI for or the has segments sort good data production? going center it potential We if to know and order there you've look you now it'd X.X to that. kind lab for break I Okay. NE to XX% the take at a this driven And sense but way, don't it to of is if level bit had of data it then up center, or get of interesting getting probably at more magnitude? But assume data or it, sort any you or time overall the on say would within attach of over what your is mentioned And out data a data be test center -- that's by I of center you field can that swing prospects centers a whether gig revenue towards business XXX of you fiber-driven some

Oleg Khaykin

any I'm anyhow. not into -- I number you number ultimately going to get will give be this I mean thing as

when So NAM good tell I next research we right? really the is carrier. is gig driven I be and mean, terabits because thing XXX I to primarily by -- X.X gig was one think year driven by center, supplying any will data don't Whereas you can there's carriers mean all there's I -- or went the understanding XXX from

usually, or I will this -- segmentation up -- be the try technology. providers you when can't gig, terabits as planning, all multiuse start supply service it's can think driven supplying fundamentally, you say But -- ended providers the the if X.X But it's really things that we would a I just just demand. I revenue for really built So end same stabilize, that, centers for I market to doing start card. I by eventually, mean, data because we by service like on to use. was line ascribe technology. center that to data center data don't driven the line, mean, XXX want maybe mean that originally I

service the players networks, providers but are providers it rather the centers those Tier or it's than data say, still a interconnect is all I fiber X who customer centers will And terms time, drive we lead it data node. service the as build-out the the of more of the for the first driving between like, So who in AT&T to think Verizon. technology And of be big next think will it. fiber, providing the

towers, So so the mean to take that end really whether a future I trying for fiber or data in demand. give I the market out -- of today multiuse some it's mean, we they what's it center to XG figure sweat and it's don't

Timothy Savageaux

Okay. I understand.

one overall place of sense with replace your XXX desperate AI little my network. gig size the to of gig take data you let's were or a gig your center to center last and with test XXX bit in easier Art, relative business me say, give question data Let be might attempt in us a question to if XXX business

Oleg Khaykin

asking because up calendar XXX there I mean is at reporting -- this a terabits. you're XXX a to and we're me mean that this back year, into later sediment have these -- a the one we is are time, gig, given have any goes we going numbers, report there I segment gig, the don't but keeps now I one to chart, substitution. and things go X.X have other down, goes just those now like

of level think detail. don't into going to I I'm So go that

Operator

Hosseini of SIG. Your the next question line from comes with Mehdi

Mehdi Hosseini

A couple items. housekeeping of

year? of in I Given OpEx And the fiscal September I'm savings flight Should from year is half the here? the fact that fiscal 'XX. OpEx And second going flattish the the to just million. wondering annualized should I the for rest how million that materialize kind model $XXX of keep cost of $XX of for

Ilan Daskal

merit employee Generally, There to you're yes, puts several of costs. right. in has takes. Obviously, increase generally, with some it yes. But are do and variable

Mehdi Hosseini

what about fiscal rate? year the tax And Okay.

Ilan Daskal

$X then will depend the of about the kind for guided remainder we jurisdictional So mix. million for on the year, of it

effective as kind will tax region it So obviously, recover, long North of our then the obviously, lowers rate. as American

first is see kind which but the that's higher-than-normal million, $X still can of thinking. You tax effective that the rate, it's quarter, in a

Oleg Khaykin

Yes.

statutory amount by America, should pay we of our we because because rate. ironically, offsets in North percentage that dollar the kind taxes in you absolute think and make, taxes the other driven things the lower really look more NOLs effectively at and we of lot they're -- money have of tax a I lower will

Operator

[Indiscernible] our to turn portion I the of call. for comments. Q&A concludes back it final This

Unknown Executive

you afternoon. This you, Thank Have our earnings for concludes good call everyone. a today. Thank for Emma. joining

Viavi Solutions (VIAV) 8 Aug 242024 Q4 Earnings call transcript