VIAV - Earnings call transcript Q2 2025

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Operator

Good day, everyone, and welcome to the Viavi Solutions Fiscal Second Quarter 2025 Earnings Call.

Just a reminder, this call is being recorded.

I would now like to hand the call over to Ms. Vibhuti Nayar. Please go ahead, ma'am.

Vibhuti Nayar

Lisa. you, Thank and XXXX everyone, Viavi Fiscal Solutions Good Call. welcome Quarter Earnings Second afternoon, to My Nayar, is name Vibhuti Viavi Relations Solutions. for Head of Investor President Daskal, on CEO; me today's is Khaykin, With call and CFO. our our Ilan Oleg and

estimations. SEC Please review differ the filings, financial those note, current materially undertakes and to and from performance. about cause our could only and the subject company's risk statements, most guidance statements. in report uncertainties recent today. are our provide no valid this that particularly include factors described update We statements these call actual filings. including Viavi statements to annual to as will risks of call encourage are forward-looking The obligation forward-looking during you that These we results this expectations to

their also revenue, which results Please call, our financials www.investor.viavisolutions.com. this otherwise, that include these state Viavi's release earnings today's non-GAAP tables, available website as reconcile historical discuss as we on and note discussed GAAP our to at slides, are well all on results supplemental earnings release. unless usefulness are preliminary limitations The We financial in non-GAAP. except and

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

like With over to the would turn that, Ilan. I call to Ilan?

Ilan Daskal

Thank you, Vibhuti. Good afternoon, everyone.

basis and $XXX.X million year-over-year quarter Now on review sequentially to was results is year which Revenue fiscal of was was second range Net up the I of XXXX. our to up for high the $XXX guidance $XXX like quarter million, would of end X.X%. a above revenue the the XX.X% million. of

XX.X%, our XXX range on a second to Operating points. of guidance end the XXX increased year-over-year the the high basis above for and significantly margin margin up quarter was basis fiscal from XX.X% XX.X%. quarter points prior basis was Operating of

a year-over-year above and the $X.XX. up up basis, of On was high to $X.XX, EPS our $X.XX was of $X.XX range EPS $X.XX was sequentially. end at also guidance

quarter on strong at $XXX NSE by many both NSE instruments. mainly million, by end product service mainly year-over-year was QX pace fiscal revenue which million. million providers XX.X% business was in order came strong and service and of NE to for basis, second guidance SE was last providers field field high for XX.X%. conservative of $XXX NEMs for from by result segments. the as was revenue a same On by in instruments across to and the our $XXX.X million, of was segment. XX.X% This $XX.X revenue up year, range our year-over-year spend. demand which the to lab driven Moving customers our is from results a $XXX of the revenue period addition for above driven million quarter NEMs and up the enterprise recovery declined

volume which and XX.X%, gross margin period our a and from XXX of came NE margin is year-over-year on is higher higher was an SE X.X% X.X% decrease operating which was significantly product to of for points NSE NSE's guidance gross the driven same from lower to for increase of the a period through. which revenue. X.X%, year-over-year points is basis last gross quarter basis last by result a the of margin range year XXX as basis fall which due XX.X%, a points was higher is basis year quarter a same margin basis increase was XXX basis. XX.X%, gross margin mix. the in XXX above point on

demand of X.X%, below million. our million, to of for $XX.X gross year-over-year down On to revenue XX.X%, products. the end and basis for gross XD came OSP quarter fiscal which year sensing last of $XX basis, low a operating lower weaker a $XX second result was revenue slightly mix. and the was range margin at of primarily guidance OSP was in is primarily million year-over-year a margin XXX fall-through. OSP's points lower driven points volume margin on as by decrease period is basis product XXX a basis same the was from down XX.X%, due which

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

our During acquisition not stock the our capital we allocation Inertial with as any did the prioritized we M&A towards of of Labs. purchase quarter, shares

Fully million diluted the share quarter. million in the for up was year in versus XXX.X XXX shares quarter XXX.X guidance shares and count from shares, prior for fiscal the million second our

guidance. quarter Moving on fiscal to our third

are seasonality segments. across stronger trend we expecting NSE, a most For

their demand for sensing We demand as for start products continue down softer customers expect we XD to OSP, For products. inventories. end work anti-counterfeiting stabilizing to anticipate the

to quarter $X.XX. XXXX, of between minus Operating $XXX basis $X.XX and XX% revenue is For about million. be fiscal expect million third margin XXX we of to to expected $XXX the range and points and in be the EPS

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

Our of operating Labs, for expected revenue basis with revenue to or OSP with minus or NSE annual communication high $XX rate. of approximately plus single-digit which previous Inertial be a our $X from $XX points. plus XXX is revenue margin XX%, is million, run million an line guidance includes million, in minus million

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

net of million lower Labs We expect expenses the other income used reflect for result $X.X approximately on Inertial transaction. a on higher and to as a interest cash expense hand of

to around Lastly, count the share be is shares. million expected XXX.X

Oleg? over Oleg. I that, will With to call turn the

Oleg Khaykin

Ilan. you, Thank

revenue quarter, came end range. our December the higher and our the above guidance EPS During of

traditional in prior NSE we as 'XX. stabilized of mentioned end of are recovery As and markets have many call, signs calendar showing gradual enter we

starting our NSE. growth in driven many detail businesses, segments. Now QX each look across in revenue at product year-over-year, with let's recovery of grew by our in of NSE more fiscal

this segments. more AMS, expect on continue to remainder field in fiscal fiber saw solid bit systems particularly Fiber in support product through out. individual the from color providers build A of momentum in network 'XX. We demand monitoring of fiber service

to We continue. expect this momentum

signs mentioned by in of the North are call, in also in As and XG driven of we wireless stabilization America. mostly prior business, deployment seeing our shoots green our we resumption

gradual the the during recovery first calendar expect continue to We 'XX. half of

was December in growth lab optical and the driven quarter, demand production XX in significantly by fiber Fiber up transport.

remainder shipped also demand fiscal significant XXX-gig products, product for fiber which first our We X.X-terabit and drive for continued the should growth 'XX. of saw our

timing. Our P&C for P&T, closed with its avionics and Aerospace navigation Viavi's positioning, year-on-year navigation segment space Labs, which by driven the this of growth, solutions. mission-critical strengthens continued week, Defense business industry-leading and robust growth by we our complementing stands in and position positioning acquisition and in including communications, the products, Earlier our technology resilient which Inertial timing

and sea the well vehicles. positions as expanded high-growth navigation alternative Our such portfolio air, and autonomous markets in land us P&C

enterprise customer was SE by spend. driven primarily Lastly, down lower year-on-year,

'XX. our the continued ahead broad for of Looking portfolio, a with product QX we of for stronger momentum the across NSE, base recovery fiscal expect seasonally remainder

to OSP. turning Now

sensing primarily to due fiscal a year-over-year lower on XD second basis, OSP quarter, the products. for During demand declined

to fiscal year-over-year, be expect weaker We characterized flat sensing. XD QX seasonally roughly by

near-term We monitor we through To continue continue stronger equally momentum expect quarters. expect currently levels of products. X supply fiscal recover anti-counterfeiting to outlook, to rest next reach we our summarize growing inventory the to demand And seasonally QX of be 'XX. the to within and

In environment would conclusion, over the managing team the to to challenging I Inertial thank through Viavi the past X employees Viavi welcome like for Labs of and years.

like customers their thank would shareholders and to I continued for Lastly, our support.

operator Q&A. will it I back the the to turn that, With for now

Operator

Ruben to [Operator Instructions] We'll Roy, Stifel. go first

Ruben Roy

as like here, Or of that highlighted see to you sort I you with involved hyperscalers telco demand about I monitoring? call, down starting little are fiber the see drill turn last moving Can Is to into starting we the for a field with of on that? mostly the some monitoring. service still parts guess, the talk if some providers? could nice you fiber bit get

Oleg Khaykin

out combination. I fiber, they build the just fiber. Because their I are there because out fiber mean, many as of game, they're so there networks, but providers, it's broad so base, also there on it's is a and telcos building telcos clearly, it's Well, out many a building right? are really cable mean, but the volumes them also

have any traditionally, phenomenon monitoring deploying segment performance data them. own data getting would this service So And traditional performance all part the the data dollars is And And the their of with your are operators, are billions taking strength today, going it sophisticated their weaknesses paying clearly, centers new connection going gotten -- got. center. they the that they sure providers they're the so putting for actually very that doing service fiber And the to kind on centers. because network. data their I hold par been monitor of into driving. they that is center hands they've interfaces the hyperscalers performance is who making they're the fiber of and they're connections actually level the into putting their well and a matter really out care, hyperscalers of just signing interconnect latency inside say and can new are whatever operators But data the and in fiber on of protecting emerging those the extremely really is taking educated they the that's not and center and their of they with agreements thing, to accountable of a it took and fiber on connectivity, really

Ruben Roy

you year? through your how the us there? talking But you're a you're then side, And little congrats fiscal you bit of that end could about of the gig the... on throughout 'XX. shipments lab an look of can you kind of Clearly, the X.XT Interesting. can the think about gig, big thinking that momentum if talk as at But shipment. part of on XXX we about rest calendar And how the XXX the get idea of give business, visibility

Oleg Khaykin

end buying is we reason generally today volume is don't beyond Well, fiscal to at mean workhorse quarters. X that and I is say I X because gig the go like most everybody clearly, XXX the the X.X R&D probably And year. rapidly. pretty maybe towards going the what hitting is module and really be labs production terabit calendar to growing NEMs the that entering semis, the developers. of that's is

we the this well. driver there's starting calendar volume gig XXX to the still for end. the the shipping gain momentum maybe X.X year as year, And think towards will gig be So and XXX

strong production very semis AI board, NEMs. across to XXX actually infrastructure. Asia from the of is that's the we seeing the kind and and say, module module that then it, builders largely -- on I'd So I'd of support testing And traditional of, demand factories, growing module top are in data gig XXX the for support in XXX demand say, and developers gig

Ruben Roy

could be the Inertial you I capital give sneak forward? on as M&A update what into just the comment acquisition M&A your might If an Or can additional Maybe 'XX? still appetite Is going and here? for in there allocation with Great. us about are you capital for account just look you around further allocation thinking M&A out on how room for closure. one and Ilan successful

Ilan Daskal

Ruben, Thanks, Yes. the for question.

we of M&A raise of for kind We model. bandwidth allocation believe of our additional we have more continues right if that obviously, be to overall part find the funding opportunity us. to capital kind So

very terms more less for of it's us specifically. in and about that's in our kind and EPS and growth process. of our funding, the mid- about major a the for decision-making And focused term, the opportunity specific short, driver the are We long EPS

Oleg Khaykin

we target of our nobody there. And bunch There in say Yes. potential presentations. if is look funnel, I'd is a M&A at PowerPoint

the we that to to Clearly, profitable the we deal. evaluating are and are very profile to in right cognizant price, highly the have got that because are deals and in how we multiple price be paying we right overall options the margin for right deploy the our thing accretive the our the -- believe price is considering of cash, the thing. there's is All with end, one

Operator

up Next Spinola, is Andrew UBS.

Andrew Spinola

from And the the I when upside and specifically from about was how the drivers much cyclical it versus if in wondering secular came your how growth in came look your it, of of could businesses? at -- sort SP talking your wondering about uptick talk businesses? quarter the maybe much NSE I'm if in you of some of other we contribution

Oleg Khaykin

Andrew. it's so good Well, mean, I question, a

fiber X/X maybe to probably Ts, of the I diving the kind X/X -- So kind rises I you shoot mean, wireless planning the start all to saw boats, next somebody the start X tide which say, buying service interesting I very instruments, right the provider wireless the would eyes, come back, actually green quarters. field would deployment spend. is -- away, the of say, XG came the crossing doing in was major wise. The from and We to restart that basically tells in

a of I in the So call seen was came recovery. margin and the would where gradual and that substantial growth from and both that the segments. aerospace expansion is our And into segments what rest really efforts and a recovery diversification revenue driven we've fiber lab production, defense really good those continued volume

Andrew Spinola

to follow-on Got just it. I And that. guess a

much in serve. of what's How with rates understand, came trying I'm it me you get? your exposed how from fiber to AI in upside lab? the potential I'm your the quarter business to secular of how And that to correlate is XX% markets growth big to that try fiber think trying can And business understand to growth do in rates? that lab business? is I some substantial XX%, XX% end the you from this can help understand that big of that driving growth -- to that that's obviously, anything some came pretty just

Oleg Khaykin

that X there's equipment segments business. to is advanced so we sell to Well, developers. the One test

chipsets tools antibody. are XXX are you X.X you XXX, or the terabit the if aid So developing process development you next-generation need in bandwidth, those to gig,

a -- if developing And you're those that is other And that need If equipment. modules, need equipment. you there systems, you whole you're market. then developing

over XXX -- migration years So driving to years surprised XXX to growing XXX would years we're to mean X different when gig node between about It to next mean it's I triples the wouldn't growing, gig here node. X to X X I'd if telecoms say say, I X the this gig. because one, gig, be -- is let's XXX I doubles what's be it or

by Now the driven nodes not of It's today, datacom. driven really evolution is technology by telecom.

So is seeing as new every a we're X result, there technology years, node. a X,

faster. cycles and happening product are they're big as just your So much

is So there business production a tripling doubling, fairly And is the other seeing realistic. piece. that then whole is part

orders the magnitude you telecom, deployed centers, again, when when putting you data many you're so modules. only modules more modules. So were doing Well, we optic have in fiber of

these function meters shipped. is fiber, see of So the and demand for when spectrum it things, need it to to of all analyzer, that not providers. did because hyperscalers. power demand or lot units XXX how a a service is shifted all And we by thanked the their a gig, many purely inspection, kind interesting be that what about And years was when by of was business installed capacity telecom bought much ago, X was of -- the

of horizon of pace X, who the that's turnover like gig happening deployment much instead production that over horizon Well, over center at a the driving it's the and as just terabits, horizon. And bringing a you of know, operators faster XXX well, data kind the X-year out a X-year then are -- X.X over capacity.

volume So whichever again, I a going there see. you're doubling -- is mean, growth tripling or to the

very X So then X. layer that the in Zero. element layer here, on to of we going are we're And positive now traditionally, the third to And kind layer we X, business. layer played

market these all we're that the of expanding also we're applications. So addressing within

be us So in to that a business major for we come. years will feel unit growth driver

Operator

Koontz, is next Needham The & Company. question from Ryan

Ryan Koontz

-- think drill of services if XG additions spectrum? wireless small down on if as pretty new down is well share here, you from is do Or pretty color rebound operators, can of driven This this to recently heard Great. rebanding in and some or Ericsson, by there, capacity terms the around you via optimistic pretty product a we've drill But signals anything the you Oleg. some areas, core, could. And on Nokia I aligned. on cells wireless, the different you terrific there wanted quick front? it is

Oleg Khaykin

heard so very that So -- and I -- on. with the so correlates mean from what well actually, Ericsson you

you before XG for I instruments. or is that we get So you field be restart What is maybe there going mean, orders saw, indication placement to of -- deployment. so a -- but the

in usually base. what you you understand seeing of the your equip available to XX% bit checks you of all want that's XX% And before per cost, with you're cost, first a it's the when happening, I bandwidth drop because to the really cost XG conversion customer XG our it's believe So to do if equipment about convert really spectrum. spectrum between spectrum to kick the got grow your campaign. you it's and thing off because is And accelerating all to you anywhere

is of of cheapest the One just XG accelerate things into to XG. conversion do

view exactly your believe will spectrum. phenomenon repurposing to ways And and easiest only. North bandwidth. of of pressure jump it is the easiest are that a And around just target more if it's scale. the millimeter kind those at belief that also do that me feeds and kind the same create wave this massive the indicates instruments reclassifying lot on of bandwidth I our of as software problem. lower the one our what spectrum have instruments, to it X -- the look to And is downloads way with I cases thing. codes because and X challenging from seeing, is Europeans that we well it to and they their a are American really gigahertz to the to provision use cost of They And XG. cost XG And by about pretty way, mass on we your That's

Ryan Koontz

Yes. Great point.

rest a there your unit? How Is your you stand-alone Just much acquisition Is business fitting And do Inertial your the feedback of with much just synergy And adjacency commercial on... you've it do portfolio? there? that see product -- could, had been into Labs. a you what's -- a around the at couple of helm the or quick of maybe weeks very activities? follow-up how I

Oleg Khaykin

Well, we've a while. days working been this we for but closed ago, deal obviously X them with just

at been has aerospace this advanced I that algorithms have traditional telecom less the is of postures we market actually the our and could with generations conscious system looked we is our -- competencies, hey, and And truly set volatile technology us skill it And very what Well, know-how? products it's ahead advanced it's a today. leapfrog when say, while engineering this So and business the space. using taking we've And book And it, our diversification with well, we the these margin communications service core measurement, be in highly can and actually, for we and aero service defense. pretty at much -- look provider if everybody mil our to the in to the on really business. shown where the really we richer take reliant our players design. think, timing, ship unlike -- test it's traditional resilient attractive are a and

is X your they it aerospace business. larger or defense, design you go -- just their done. inside win pull a module, product into quarter, about P&T, OEMs, you're win-driven And book-ship business. and production, they a Once system chunk when business. a a Tier subsystem with -- all talking to have big a what every in You of we're here the Whereas it's

go-to-market. cost growing point it's So much profitability of of and of revenue view lower a from

ago, P&D. engineering Labs term, so very with gross margin operating and still we -- competence couple a expansion at know-how And a acquired T nice expansion. and longer leveraging Jackson of the I a the in So the think margin we acquired gives And much us when lower your go-to-market. that but years you're

acquisition P&N, Labs navigation. positioning of the P&C With positioning created and Inertial and

whole in deliver And effectively can to is integrator high-growth and navigation any particular, out system demand the are we we now drones alternative navigation modular playing solutions So system the into. where there. alternative

Operator

Marshall, is up Next Meta Stanley. Morgan

Meta Marshall

as kind more demand of just been first fiscal this question, a Maybe return QX. some had kind QX or of quarter. the in you optimistic on of seeing calendar about Congrats

starting see of you to to that maybe this for of -- expected? than see the stronger and orders path SE just is some second kind that And business just started earlier the you those returning? it business you see was expected So the of than question some or recovery then

Oleg Khaykin

Sure.

kind and now I is of and looking I going so starting and just the doing AT&T, of So of pretty shows kind they after interim accelerated going seeing into looking getting much, being within it was quarter. it course, I are that, mean is after at before they're is those increase So all start in tone the see And we for all the was quarter mindset started DOCSIS course, of towards, likes temperature wireless wait of And September shift our behind. these share be nobody behind. become that around not the by AT&T shifting things you to Well, least -- market has T-Mobile become fiber. are accelerating is And fiber something forced fiber. butter, saw mean into MSOs, operators has of my build-outs what really which is second, dialogues again, operators and operators. play T-Mobile years. left a they we're a doing builds. Verizon, to Verizon has said, up. that, coming cable the now getting wants run really of you broadband." and in turning saw we're bread the And far of at into hills of X.X back of "Hey, the it's a the measuring first was start been finally December to where And inkling in fiber. the summer September other grab to quarter hey, then hey, even then kind X competitive

in with all service the continuing money December quarter in end We we QX, see of But okay, people putting QX QX, Well, a the where everybody And change then because their we these the this didn't quarter. into happening. the until materializing. are saw in seeing as February. we normally the which generally the kind saw that's So beginning it money we in providers. was. of weaker And the said, -- when mindset budgets dynamics we is their the is of that's mouth change into see which continuing fiscal quarter, set that

fact service dip not thing It's mere It onetime to last in the the seeing of a is on we're thing the clearly really space. provider. of it's human seasonal the was that about So were not we continues September And move. us kind blip. kind the one telling gloom up until wireless

mass already software know those your a people starting in to clear don't if going until XG. quarters the are And what have much indication do work that download pretty kind is that a much to starting you to we planning And happen doing that you instruments, what You X for gives of placing you middle wireless are do. of kind people deployment instruments. orders from away X year. you indication only also Well, think of next significant field of

months to of by we and year. North were X Europe American. about spread North America, and that I middle feel behind, feeling we're look the talking about to American if I Europeans traditionally, in much it think not optimistic it's do And and I the North at I it's landscape. Europe, will X So I'm more will yet respect, -- mean on probably the just emphasize,

So we'll wave of of provide kind next recovery. the

NEMs. the on that's So

through customers to AIOps a news, not and good good one the our interest. cases maybe achieving but absolutely of good news is it so is So of to get story and everybody use news the time that right? deliver there's all lot in a news, it's news good pain well, so want. their good be it's deploy able and The broader SE, taking and On not

So disconnect a we as is the it into between turn there engagement and the a how revenue. result, can velocity quickly of

a up the resolve this to is going the these cases. pains this development for catch teething of the And feel driver year, all be SE of and early our business I on use unit we through think will we major and growth. most

on private The is second there part the network.

growing business both is mission-critical kind well, of that it's and of doing small private interest lot seeing kind their off we're industrial So security It's networks. a especially of really well, but base, of in private building very doing a and sovereign networks.

that as is And is I much I the enterprise, is, piece money. I the spending maybe of it third the is mean, with think and rest think a piece security, not exception that

last step that portfolio. do The I from probably they board recover product this development already where think growing the I of on and redeveloping be we be them corner -- business. So But to view 'XX the by points in piece point that mean, think calendar the business year is start of will for turned technology will the next to putting quarter-on-quarter.

Operator

Tim And Markets. Savageaux, next up is Capital Northland

Timothy Savageaux

some And but results you blanks on the on of in Congrats as well. see some me touched from fill this, I'll maybe if here. can I

world U.S. the I there quarter. strong of being space -- quite you and note was carriers on it. touched sequentially whether just in base and North Verizons or and strength, the also fiber America the in broader principal I that's if fiber any AT&Ts in the to fiber your seeing revenue real U.S. the want to confirm monitoring that. concentrated And of And of big field... carrier terms strength kind strength and the and you're In guys, access that really The with

Oleg Khaykin

is X monitoring. consider. countries big that and big are catches But all in viewing the that. It's fiber who their are monitoring business. really They trend monitoring North that seeing fiber Well, starting some, on, growth fiber AI to as always if user media, part would integral it's it's now an out. say, ironically, also who players then going outside out rolling network. social Tier it we America, several to to of In building significant believe the a boost America, the hyperscaler. the of They're fiber North markets. in be of U.S. And in I the are They is monitoring the are in

to you're something -- spend $XXX at spend the they we the to data of weak should make centers. between to fiber. that sure a the million all connect dollars data party is billions that are those It's there are you really those building usually And out the going centers. data of connected interconnect least they in quick that monitor even If putting link is already hundreds centers, fiber state-of-the-art links And finding works. they fiber use between very can service is some bifurcation providers next-generation are third who there really where And the dark to can't. can who who because and

hat course, needed. it then and at not a We'll of players So send is require. a your and those connect well there's and a who of And network, drop can that just on okay. the like, fiber truck the is what father's agreement that's turn you -- provide SLA

a the we also So in engineers We smart networks actually should deliver. and believe self-serving. be are and -- quality the but it are able putting deploying quality of it's view it, it's service doing as they it, smart investment course, performance of that money to of a the major

really So networks, you're North and but the out you than when believe also actually because I -- we deploying automate then build it's you fiber they managing they monitoring they stages to cost along. enables and be we it is using build of also managing leave the handheld fiber it is kind it see it do it when you where should But of when monitoring, early more reduce network. think North America of America use out the then

Timothy Savageaux

bit a an Europe, well. then least uptick the of in quarter sequentially did as And see Great. at you in Okay.

fiber carriers field seen come really I guess you wireless. both indicated and and back You've haven't the that's

we that's any that should manufacturers or So driving other factors? network equipment assume

Oleg Khaykin

'XX. to generally, And pretty spin it I September are quarters field, that although in U.S. and about also is wireless there a they the that hope not NIMs X, to course, of been in strong strong. big X in pick consistent. So they X Europe, the Europe quarters the NEMs, with tail of have fairly for is into Europe will when about that NEMs, behind. But shipping run -- start took quarters fiber networks clearly, wireless, a chunk demand probably -- rate And we is they mean X I the you maybe equipment equipment infrastructure mean is ask the behind recovery of quite X Europe Europe is or us strong. as wanting up. X test the with

by it's up that well. about deploying we market. business of picking middle much that telecom would Europe kind of mean, And and a North to fiber our equally year, XG. very think the happens, should start I instrumentation to that because there, all of So second come think is, continuation as I if the would be Europe American in field big wind the And

Timothy Savageaux

me. it. for you're the last what seasonality, and than about Got of better in is I one And And terms saying discussion seeing think you're seasonal.

basically that in what maybe backing I know a a like would don't see, Inertial, mid-single-digit to and of some little year Is low very looks sort normally recovery bit it you're demand. given you're be flattish So down typically, any the you segment seeing out digit, not maybe that to right? where -- might seasonal mid-single this decline

Oleg Khaykin

Yes, that's right. basically

Although I decline. a wouldn't even say

to I maybe flat it's you And think digit top even single Inertial low had mean, Labs. on then it, of growth. single-digit -- I

is -- The within the we mean is of even December. profile statutory our line is are margin -- little changes mean, top what some I first though year. than why I the margins segments, a revenue. feel we I that And of this mean margin why quarter slightly even is when for maybe lower that's up. we accrue I -- also, there some weaker the So did that's say flat mean, to there because I a would most mix, expenses in in of

the some of I'd clearly, will that's different. mix drag, be biggest also the but So say,

to volumetrically, a -- would here up. So And you I and because well, QX slightly even even seasonally pretty dropped going QX to mean generally, we strong are were sometimes say, feel is XX% flat QX. strong to NSE we see we and X I maybe between maybe

Operator

Hosseini, take next the Susquehanna. question from We'll Mehdi

Unknown Analyst

dynamics? $XX in half. there? of 'XX? the filling like quarter, does maybe in quarter touch and second but And Could ASP seeing you in to for from much third of you're contributes that looks go this being million your guide XD the of it what Mehdi. in seasonally stronger the It OSP weaker on sensing is terms where How is

Oleg Khaykin

are XD at June September and you So and smaller. the are December and sensing, the March look quarters usually, if the bigger

quarter So is I in weaker, but of there September some December and healthy. would revenue some it of say say volumes been quarter. might annual more when the from also demand we seasonally pretty were kind the had we the I But pulled have the mean in that reduction ASP the lowered --

business in kind fiscal it's pretty counterfeiting -- And it, we our on that's units to XX, thing, think that and know a the We business I we're internal taking than fundamentally sensing. being just pretty XD than half Ilan up the did the I we industrial also half. the offset XD have the line with core I sensing. and And built the actually mean sensing. first break I one we seasonality think -- are proactive fewer in in doing So second always much -- of on decline measures lower and the there on but -- mentioned more in second if of is don't year, half healthy inventories.

we counterfeiting intake demand shipping our are from inventories. So

So though factories even of not volumes bore. go up, the are we full running the

So absorption. extra picking the we're up not

inventories, we'll X So -- another percentage but up operating result, we cash, free up of than otherwise. X, maybe do up we'll with would end X, points profit not a as we lower picking are more

plan channel that. by to supply after production inventories forecast seeing that are and to becomes declining also to middle we get It's demand because it balancing the year are we our balancing measure much conscious to the we're a want and easier in now really supply-demand accelerate of

Unknown Analyst

headwind took is we Yes. a balance approach. slight The margin, to inventory that consciously but

Oleg Khaykin

is cash. Cash

Operator

like are no hand remarks. time, Nayar call closing Ms. additional And everyone, to for further the or there this questions. back at Vibhuti any I'd to

Vibhuti Nayar

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

Operator

does conference. for today's participation. you your that Thank everyone, again, conclude Once

You now disconnect. may

Viavi Solutions (VIAV) 30 Jan 252025 Q2 Earnings call transcript