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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 28, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number 000-22874

Viavi Solutions Inc.

(Exact name of Registrant as specified in its charter)


Delaware						94-2579683
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

1445 South Spectrum Blvd, Suite 102, Chandler, Arizona 85286

(Address of principal executive offices including Zip code)

(408) 404-3600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of the exchange on which registered

Common Stock, par value of $0.001 per share

VIAV

The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer
(Do not check if a smaller reporting company)

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 25, 2026, the Registrant had 233,907,870 shares of common stock outstanding.

Table of Contents



TABLE OF CONTENTS			Page
PART I - FINANCIAL INFORMATION			2
	Item 1.	Financial Statements (Unaudited)	2
		Consolidated Statements of Operations for the Three and Nine Months Ended March 28, 2026 and March 29, 2025	2
		Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended March 28, 2026 and March 29, 2025	3
		Consolidated Balance Sheets as of March 2 8 , 202 6 and June 28, 2025	4
		Consolidated Statements of Cash Flows for the Nine Months Ended March 28, 2026 and March 29, 2025	5
		Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended March 28, 2026 and March 29, 2025	6
		Notes to Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
	Item 3.	Quantitative and Qualitative Disclosure About Market Risks	53
	Item 4.	Controls and Procedures	54

PART II - OTHER INFORMATION			55
	Item 1.	Legal Proceedings	55
	Item 1A.	Risk Factors	56
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	71
	Item 3.	Defaults Upon Senior Securities	71
	Item 4.	Mine Safety Disclosures	71
	Item 5.	Other Information	71
	Item 6.	Exhibits	71

SIGNATURES			72

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

VIAVI SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

(unaudited)


	Three Months Ended				Nine Months Ended
	March 28, 2026		March 29, 2025		March 28, 2026		March 29, 2025
Revenues:
Product revenue	$	357.0	$	241.5	$	931.7	$	664.7
Service revenue	49.8		43.3		143.5		129.1
Total net revenue	406.8		284.8		1,075.2		793.8
Cost of revenues:
Product cost of revenue	141.6		96.7		377.7		265.9
Service cost of revenue	18.1		21.3		51.4		57.6
Amortization of acquired technologies	13.0		6.1		32.4		12.7
Total cost of revenues	172.7		124.1		461.5		336.2
Gross profit	234.1		160.7		613.7		457.6
Operating expenses:
Research and development	71.0		50.0		192.9		151.5
Selling, general and administrative	113.6		101.3		344.9		259.7
Amortization of other intangibles	7.4		1.2		15.2		3.3
Restructuring and related charges (benefits)	17.3		(0.3)		16.9		0.9
Total operating expenses	209.3		152.2		569.9		415.4
Income from operations	24.8		8.5		43.8		42.2
Loss on debt extinguishment (Note 11)	(3.7)		—		(46.2)		—


Interest and other income, net	7.0		2.2		12.2		9.3
Interest expense	(14.3)		(7.5)		(37.0)		(22.5)
Income (loss) before income taxes and equity investment earnings	13.8		3.2		(27.2)		29.0
Provision for (benefit from) income taxes	7.4		(16.3)		36.1		2.2
Equity investment earnings	—		—		0.2		—


Net income (loss)	$	6.4	$	19.5	$	(63.1)	$	26.8










Net income (loss) per share:
Basic	$	0.03	$	0.09	$	(0.28)	$	0.12
Diluted	$	0.03	$	0.09	$	(0.28)	$	0.12

Shares used in per share calculations:
Basic	232.0		222.6		226.2		222.2
Diluted	249.5		226.9		226.2		225.2

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

Table of Contents

VIAVI SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in millions)

(unaudited)


	Three Months Ended				Nine Months Ended
	March 28, 2026		March 29, 2025		March 28, 2026		March 29, 2025
Net income (loss)	$	6.4	$	19.5	$	(63.1)	$	26.8
Other comprehensive (loss) income:
Net change in cumulative translation adjustment, net of tax	(7.5)		13.9		(6.3)		2.9





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


Net change in accumulated other comprehensive (loss) income	(7.5)		13.9		(6.2)		3.1
Comprehensive (loss) income	$	(1.1)	$	33.4	$	(69.3)	$	29.9

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

Table of Contents

VIAVI SOLUTIONS INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except share and par value data)

(unaudited)


	March 28, 2026		June 28, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	499.0	$	423.6
Short-term investments	1.8		1.7
Restricted cash	7.2		3.7
Accounts receivable, net	320.3		261.0
Inventories, net	147.9		117.9
Prepayments and other current assets	77.5		77.3

Total current assets	1,053.7		885.2
Property, plant and equipment, net	222.5		231.9
Goodwill, net	701.8		595.7
Intangibles, net	398.0		131.6
Deferred income taxes	79.7		87.2
Other non-current assets	72.1		62.2

Total assets	$	2,527.8	$	1,993.8
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	81.7	$	68.8
Accrued payroll and related expenses	72.8		63.6
Deferred revenue	85.2		74.1
Accrued expenses	27.8		28.7
Short-term debt	244.5		246.2
Other current liabilities	140.5		108.3
Total current liabilities	652.5		589.7
Long-term debt	836.3		396.3
Other non-current liabilities	192.5		227.6
Total liabilities	1,681.3		1,213.6
Commitments and contingencies (Note 18)
Stockholders’ equity:
Preferred stock, $0.001 par value; 1 million shares authorized, no shares issued or outstanding at March 28, 2026 and June 28, 2025	—		—
Common stock, $0.001 par value; 1 billion shares authorized; 234 million shares at March 28, 2026 and 223 million shares at June 28, 2025, issued and outstanding	0.2		0.2
Additional paid-in capital	70,683.5		70,517.9
Accumulated deficit	(69,721.2)		(69,628.1)
Accumulated other comprehensive loss	(116.0)		(109.8)
Total stockholders’ equity	846.5		780.2
Total liabilities and stockholders’ equity	$	2,527.8	$	1,993.8

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

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VIAVI SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)


	Nine Months Ended
	March 28, 2026		March 29, 2025
OPERATING ACTIVITIES:
Net (loss) income	$	(63.1)	$	26.8
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation expense	30.1		28.8
Amortization of acquired technologies and other intangibles	47.6		16.0
Stock-based compensation	41.2		40.5

Loss on debt extinguishment	46.2		—
Amortization of debt issuance costs	4.9		5.5
Net change in fair value of contingent liabilities	24.3		(4.9)
Deferred taxes, net	9.5		(29.9)
Amortization of inventory step-up	6.1		1.7
Restructuring	16.9		0.9

Other	6.9		(4.6)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(62.5)		(31.9)
Inventories	(37.3)		(0.3)
Other current and non-current assets	(5.7)		(1.5)
Accounts payable	13.4		15.7
Income taxes payable	3.4		5.6
Deferred revenue, current and non-current	(13.2)		(0.9)
Accrued payroll and related expenses	9.1		6.8
Accrued expenses and other current and non-current liabilities	(30.6)		(8.3)
Net cash provided by operating activities	$	47.2	$	66.0
INVESTING ACTIVITIES:
Purchases of short-term investments	$	(64.6)	$	(147.7)
Maturities of short-term investments	64.7		145.5


Capital expenditures	(20.0)		(22.3)
Proceeds from the sale of assets	2.6		4.7
Acquisitions, net of acquired cash and holdbacks	(399.3)		(117.9)
Purchase price adjustment related to business acquisition	(0.7)		—
Other investing activities	—		(3.0)
Net cash used in investing activities	$	(417.3)	$	(140.7)
FINANCING ACTIVITIES:
Proceeds from issuance of debt	$	749.1	$	—
Repayment of debt	(199.0)		—
Payment of debt issuance costs	(23.4)		—
Repurchase and retirement of common stock	(30.0)		(16.4)
Withholding tax payment on vesting of restricted stock and performance- based awards	(23.0)		(13.1)

Cash paid to third parties in convertible note extinguishment	(1.0)		—
Payment of financing obligations	(0.2)		(0.2)
Proceeds from employee stock purchase plan	6.5		6.0





Payment of acquisition related contingent consideration	(29.8)		—
Other financing activities	—		0.2
Net cash provided by (used in) financing activities	$	449.2	$	(23.5)
Effect of exchange rates on cash, cash equivalents and restricted cash	$	0.1	$	(0.9)
Net increase (decrease) in cash, cash equivalents and restricted cash	79.2		(99.1)
Cash, cash equivalents and restricted cash at the beginning of the period(1)	432.1		481.8
Cash, cash equivalents and restricted cash at the end of the period(2)	$	511.3	$	382.7

(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 $12.3 million and $8.5 million as of March 28, 2026 and March 29, 2025, respectively.

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

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VIAVI SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions)

(unaudited)




Three Months Ended March 28, 2026
	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount
Balance at December 27, 2025	231.4	$	0.2	$	70,670.2	$	(69,727.6)	$	(108.5)	$	834.3

Net income	—	—		—		6.4		—		6.4
Other comprehensive loss	—	—		—		—		(7.5)		(7.5)
Shares issued under employee stock plans, net of tax	0.7	—		(0.7)		—		—		(0.7)
Stock-based compensation	—	—		14.0		—		—		14.0

Convertible note extinguishment (Note 11)	1.8	—		—		—		—		—
Balance at March 28, 2026	233.9	$	0.2	$	70,683.5	$	(69,721.2)	$	(116.0)	$	846.5




Three Months Ended March 29, 2025
	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount
Balance at December 28, 2024	222.1	$	0.2	$	70,493.0	$	(69,655.6)	$	(154.8)	$	682.8

Net income	—	—		—		19.5		—		19.5
Other comprehensive income	—	—		—		—		13.9		13.9
Shares issued under employee stock plans, net of tax	1.1	—		(1.5)		—		—		(1.5)
Stock-based compensation	—	—		14.1		—		—		14.1


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






Nine Months Ended March 28, 2026
	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

Net loss	—	—		—		(63.1)		—		(63.1)
Other comprehensive loss	—	—		—		—		(6.2)		(6.2)
Shares issued under employee stock plans, net of tax	3.7	—		(16.5)		—		—		(16.5)
Stock-based compensation	—	—		41.4		—		—		41.4
Repurchase of common stock	(2.7)	—		—		(30.0)		—		(30.0)
Convertible note extinguishment (Note 11)	9.7	—		140.7		—		—		140.7
Balance at March 28, 2026	233.9	$	0.2	$	70,683.5	$	(69,721.2)	$	(116.0)	$	846.5

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Nine Months Ended March 29, 2025
	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount
Balance at June 29, 2024	221.9	$	0.2	$	70,471.9	$	(69,646.5)	$	(144.0)	$	681.6
Net income	—	—		—		26.8		—		26.8
Other comprehensive income	—	—		—		—		3.1		3.1
Shares issued under employee stock plans, net of tax	3.3	—		(7.1)		—		—		(7.1)
Stock-based compensation	—	—		40.5		—		—		40.5
Repurchase of common stock	(2.0)	—		0.3		(16.4)		—		(16.1)

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

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


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

The financial information for Viavi Solutions Inc. (VIAVI, also referred to as the Company, we, our and us) for the three and nine months ended March 28, 2026 and March 29, 2025 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. GAAP) for interim financial information and rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, such information does not include all of the information and footnotes required by U.S. GAAP for annual Consolidated Financial Statements. 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 and nine months ended March 28, 2026 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.

The Consolidated Balance Sheet as of June 28, 2025 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The results for the three and nine months ended March 28, 2026 and March 29, 2025 may not be indicative of results for the fiscal year ending June 27, 2026 or any future periods.

Fiscal Years

The Company utilizes a 52-53 week fiscal year ending on the Saturday closest to June 30th. The Company’s fiscal 2026 is a 52-week year ending on June 27, 2026. The Company’s fiscal 2025 was a 52-week year ending on June 28, 2025.

Principles of Consolidation

The Consolidated Financial Statements include the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated.

Use of Estimates

The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements, the reported amount of net revenue and expense and the disclosure of commitments and contingencies during the reporting periods. Estimates are based on historical factors, current circumstances and the experience and judgment of management. Under changed conditions, the Company’s reported financial position or results of operations may be materially impacted when using different estimates and assumptions, particularly with respect to significant accounting policies. If estimates or assumptions differ from actual results, subsequent periods are adjusted to reflect more readily available information.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 2. Recently Issued Accounting Pronouncements

Accounting Standards Issued But Not Yet Adopted

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: Revenue from Contracts with Customers, including those assets acquired in a business combination. The practical expedient permits an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets. This guidance is effective for fiscal years beginning after December 15, 2025 (fiscal 2027 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 November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses for public business entities. The objective of this guidance is to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization and depletion) in commonly presented expense captions such as Cost of revenues, Research and development (R&D) and Selling, general and administrative (SG&A). This guidance is effective for fiscal years beginning after December 15, 2026 (fiscal 2028 for the Company), and interim periods within fiscal years beginning after December 15, 2027, with early and retrospective adoption permitted. The Company is evaluating the impact of adopting this new accounting guidance on its Consolidated Financial Statements.

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). The Company expects to adopt the guidance on a prospective basis for the fiscal year ending June 27, 2026, and the adoption is anticipated to result in expanded disclosures in the Company’s annual financial statements.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements-Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The amendments clarify or improve disclosure and presentation requirements on various disclosure areas, including the statement of cash flows, earnings per share, debt, equity and derivatives. The amendments will align the requirements in the FASB Accounting Standards Codification (ASC) with the SEC’s regulations. The amendments in this ASU will be effective on the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC, and will not be effective if the SEC has not removed the applicable disclosure requirement by June 30, 2027. This ASU is not expected to have a material impact on our Consolidated Financial Statements or related disclosures.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 3. Earnings Per Share

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


	Three Months Ended				Nine Months Ended
	March 28, 2026		March 29, 2025		March 28, 2026		March 29, 2025
Numerator:


Net income (loss)	$	6.4	$	19.5	$	(63.1)	$	26.8
Denominator:
Weighted-average shares outstanding:

Basic	232.0		222.6		226.2		222.2
Diluted shares - Convertible Notes	9.9		—		—		—
Effect of dilutive securities from stock-based compensation plans	7.6		4.3		—		3.0
Diluted	249.5		226.9		226.2		225.2

Net income (loss) per share:


Basic	$	0.03	$	0.09	$	(0.28)	$	0.12


Diluted	$	0.03	$	0.09	$	(0.28)	$	0.12

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 income (loss) per share because their effect would have been anti-dilutive (in millions):

Three Months Ended

Nine Months Ended

March 28, 2026

March 29, 2025

March 28, 2026

March 29, 2025

Restricted stock units

—

0.6

1.2


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 4. 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 nine months ended March 28, 2026, 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	—		(6.3)		—		(6.3)
Amounts reclassified out of accumulated other comprehensive loss	—		—		0.1		0.1
Net current-period other comprehensive (loss) income	—		(6.3)		0.1		(6.2)
Ending balance as of March 28, 2026	$	(5.3)	$	(103.8)	$	(6.9)	$	(116.0)

Note 5. Acquisitions

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. (Keysight). 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.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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


	Amount


Inventory, net	$	7.7
Prepayments and other current assets	1.0
Property, plant and equipment, net	2.9
Goodwill(1)	111.6
Identified intangible assets acquired	314.2
Other non-current assets	1.7

Deferred revenue(2)	(25.7)
Accrued payroll and related expenses	(0.8)
Other current liabilities	(3.9)
Other non-current liabilities(3)	(9.4)
Total purchase consideration	$	399.3

(1)Goodwill at acquisition date of $111.3 million increased by $0.3 million for measurement period adjustments.

(2)Represents the current portion of deferred revenue.

(3)Includes long-term deferred revenue of $8.2 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.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Inertial Labs, Inc.

On January 28, 2025, the Company acquired all of the equity of Inertial Labs, Inc. (Inertial Labs), a privately held company which specializes in resilient positioning, navigation and timing (PNT) solutions for aerospace, defense and industrial applications. The acquisition enables the Company to further broaden its solutions offering into the rapidly developing PNT landscape.

The total purchase consideration included approximately $134.4 million paid in cash at closing and additional contingent consideration of up to $175.0 million, payable upon the achievement of certain revenue targets over the course of a four-year period beginning in January 2025. As of the acquisition date, the fair value of the contingent consideration was $116.2 million. The net cash paid for the acquisition, with purchase price adjustment, was $121.6 million, which reflects the cash paid less cash acquired of $16.5 million. From the contingent consideration of $175.0 million, $3.4 million was set aside for the payment of retention bonuses over the four-year earn-out period to key personnel and service providers, contingent on continued service to the Company. Any forfeited amount will be removed from the retention bonus pool and re-distributed to the shareholders of Inertial Labs upon the achievement of the earn-out targets. The portion of the estimated fair value of the earn-out liability allocated to the retention bonuses will be accounted for as post combination expense over the requisite service period.

The cash consideration paid at closing included an escrow payment of $1.0 million subject to final net working capital adjustments. The Company paid $3.7 million in our fourth fiscal quarter of 2025 comprised of the net working capital holdback of $3.0 million and $0.7 million of the purchase price adjustment of $1.4 million. The remainder of the purchase price adjustment of $0.7 million was paid in the first quarter of fiscal 2026 and refund of prepaid tax of $0.6 million is expected to be paid in calendar 2026. In addition, the Company held back $15.0 million for indemnity claims. During the three months ended March 28, 2026, the indemnity holdback amount was reduced by $1.1 million from noncash financing activities. 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 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 fair value on the acquisition date. The following table presents the allocation of the purchase price (in millions):


	Amount


Cash and cash equivalents	$	16.5
Accounts receivable, net	8.1
Inventory, net	26.0
Prepayments and other current assets	1.1
Property, plant and equipment, net	1.9
Goodwill(1)	130.3
Identified intangible assets acquired	117.6
Other non-current assets	1.9
Accounts payable	(1.4)
Accrued payroll and related expenses	(0.5)
Deferred revenue	(0.3)
Accrued expenses	(3.5)

Other non-current liabilities(2)	(27.1)
Total purchase consideration	$	270.6

(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.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Developed technology relates to products used for PNT solutions for aerospace, defense and industrial applications. The Company valued the developed technology 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 developed technology. Significant assumptions used in the discounted cash flow analysis include (i) projected revenues, (ii) discount rate, and (iii) 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

Developed technology

4 to 7 years

102.0

Customer relationship

6 years

9.6

Tradename

3 years

0.8

Backlog

2 years

5.2

Total identifiable assets acquired

117.6

Goodwill represents the excess of the 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. None of the goodwill recognized is deductible for U.S. income tax purposes.

The Company has included the financial results of Inertial Labs in its Consolidated Financial Statements from the date of acquisition. Pro forma results of operations have not been presented because the effect of the acquisition was not material to the Consolidated Statements of Operations.

Jackson Labs Technologies, LLC

On October 5, 2022, the Company acquired all of the equity of Jackson Labs Technologies, LLC (Jackson Labs), a privately held company which specializes in PNT solutions for critical infrastructure serving both military and civilian applications. The acquisition enables the Company to broaden its solutions offering into the rapidly developing PNT landscape. 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

Refer to “Note 8. Fair Value Measurements” for information on the contingent consideration activity for the three and nine months ended March 28, 2026.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 6. Balance Sheet and Other Details

Contract Balances

Gross receivables include both billed and unbilled receivables (including Contract assets). As of March 28, 2026 and June 28, 2025, the Company had total unbilled receivables of $17.2 million and $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):



	March 28, 2026
	Three Months Ended		Nine Months Ended
Deferred revenue:
Balance at beginning of period	$	118.3	$	102.3
Revenue deferrals for new contracts(1)	43.2		94.8
Acquisition(2)	0.4		33.9
Revenue recognized during the period(3)	(40.2)		(109.3)
Balance at end of period	$	121.7	$	121.7

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

(2)This amount includes deferred revenue at acquisition date and measurement period adjustments. 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 March 28, 2026, was $533.8 million. The Company expects to recognize approximately 92% of remaining performance obligations as revenue within the next 12 months, and the remainder thereafter.

Accounts receivable allowances - Credit losses

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


	June 28, 2025		Charged to Costs and Expenses		Deductions(1)		March 28, 2026
Allowance for credit losses	$	1.9	$	1.2	$	(0.6)	$	2.5

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

Inventories, net

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


	March 28, 2026		June 28, 2025
Finished goods	$	61.2	$	52.5
Work in process	21.2		18.3
Raw materials	65.5		47.1
Inventories, net	$	147.9	$	117.9


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Prepayments and other current assets

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


	March 28, 2026		June 28, 2025
Refundable income taxes	$	24.7	$	32.0
Prepayments	18.3		21.9
Advances to contract manufacturers	15.5		5.8

Fair value of forward contracts	1.4		4.9

Other current assets	17.6		12.7
Prepayments and other current assets	$	77.5	$	77.3

Other non-current assets

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


	March 28, 2026		June 28, 2025
Operating right-of-use (ROU) assets	$	41.9	$	34.1
Long-term restricted cash	5.1		4.9
Long-term investment (Note 7)	3.0		3.0
Deferred contract cost	2.9		3.0
Debt issuance cost - Revolving Credit Facility	2.7		1.4
Deposits	2.5		2.4
Other	14.0		13.4
Other non-current assets	$	72.1	$	62.2

Other current liabilities

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


	March 28, 2026		June 28, 2025



Fair value of contingent consideration (Note 8)	$	43.0	$	41.5
Acquisition related holdback and related accruals	16.5		16.5
Restructuring accrual (Note 13)	16.5		3.5
Interest payable	13.4		5.1
Operating lease liabilities	11.5		10.2
Income tax payable	8.0		8.2
Warranty accrual	6.7		5.9
Fair value of forward contracts	2.1		3.1


Other	22.8		14.3
Other current liabilities	$	140.5	$	108.3


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other non-current liabilities

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


	March 28, 2026		June 28, 2025
Pension and post-employment benefits	$	51.2	$	54.1
Long-term deferred revenue	36.6		28.2
Operating lease liabilities	30.6		24.1
Fair value of contingent consideration (Note 8)	25.2		75.9
Financing obligation	13.6		15.5
Uncertain tax position	11.9		11.4

Deferred tax liability	10.1		6.0
Asset retirement obligations	3.9		3.5
Warranty accrual	—		0.8

Other	9.4		8.1
Other non-current liabilities	$	192.5	$	227.6

Note 7. Investments and Forward Contracts

Short-Term Investments

As of March 28, 2026, 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 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.

Trading securities are reported at fair value, with unrealized gains or losses resulting from changes in fair value recognized in the Consolidated Statements of Operations as a component of Interest and other income, net.

Strategic Investment

During fiscal 2025, the Company invested $3.0 million in a non-marketable equity security in a privately held company. The investment is included in Other non-current assets on our Consolidated Balance Sheets and is classified as Level 3 within the fair value hierarchy.

This investment is carried at cost and because the investment does not have a readily determinable fair value it will be adjusted for changes resulting from observable price changes under the Measurement Alternative methodology. There were no impairments or adjustments to the carrying value for the three and nine months ended March 28, 2026.

Equity Investment

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

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

The Company’s share of Sensorsan’s net income for the nine months ended March 28, 2026 was $0.2 million. As of March 28, 2026 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 and nine months ended March 28, 2026, revenue from sales to Sensorsan was $0.9 million and $2.1 million, respectively.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Non-Designated Foreign Currency Forward Contracts

The Company has foreign subsidiaries that operate and sell the Company’s products in various markets around the world. As a result, the Company is exposed to foreign exchange risks. The Company utilizes foreign exchange forward contracts to manage foreign currency risk associated with foreign currency denominated monetary assets and liabilities, primarily certain short-term intercompany receivables and payables, and to reduce the volatility of earnings and cash flows related to foreign currency transactions. The Company does not use these foreign currency forward contracts for trading purposes.

As of March 28, 2026, 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 $2.1 million is reflected as Prepayments and other current assets and Other current liabilities on the Consolidated Balance Sheets, respectively. As of June 28, 2025, the fair value of these contracts of $4.9 million and $3.1 million is reflected as Prepayments and other current assets and Other current liabilities on the Consolidated Balance Sheets, respectively.

The forward contracts outstanding and not effectively closed, with a term of less than 120 days, were transacted near quarter end; therefore, the fair value of the contracts is not significant. As of March 28, 2026 and June 28, 2025, the notional amounts of the forward contracts that the Company held to purchase foreign currencies were $59.3 million and $60.4 million, respectively, and the notional amounts of forward contracts that the Company held to sell foreign currencies were $48.4 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 losses of $0.7 million and $0.3 million for the three and nine months ended March 28, 2026, respectively, and incurred a gain of $0.5 million and a loss of $2.8 million for the three and nine months ended March 29, 2025.

Note 8. Fair Value Measurements

Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. There is an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. Observable inputs are inputs which market participants would use in valuing an asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs which reflect the assumptions market participants would use in valuing an asset or liability.

The three levels of inputs that may be used to measure fair value are as follows:

•Level 1: includes financial instruments for which quoted market prices for identical instruments are available in active markets. Level 1 assets of the Company include money market funds, U.S. Treasury securities and marketable equity securities as they are traded with sufficient volume and frequency of transactions.

•Level 2: 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. To estimate their fair value, the Company utilizes pricing models based on market data. The significant inputs for the valuation model usually include benchmark yields, reported trades, broker and dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data, and industry and economic events.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

•Level 3: includes financial instruments for which fair value is derived from valuation-based inputs, that are unobservable and significant to the overall fair value measurement. 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 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. The fair value of such earn-out liabilities are generally determined using a Monte Carlo Simulation that includes significant unobservable inputs such as the projected revenues of the acquired business over the earn-out period. 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 in the Consolidated Statements of Operations.

Fair Value Measurements

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):



	March 28, 2026								June 28, 2025
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets:

Debt available-for-sale securities(1)	$	0.3	$	—	$	0.3	$	—	$	0.3	$	—	$	0.3	$	—

Money market funds(2)	272.7		272.7		—		—		229.0		229.0		—		—
Trading securities(3)	1.7		1.7		—		—		1.6		1.6		—		—
Foreign currency forward contracts(4)	1.4		—		1.4		—		4.9		—		4.9		—

Total assets	$	276.1	$	274.4	$	1.7	$	—	$	235.8	$	230.6	$	5.2	$	—

Liabilities:
Foreign currency forward contracts(5)	$	2.1	$	—	$	2.1	$	—	$	3.1	$	—	$	3.1	$	—
Contingent consideration(6)	68.2		—		—		68.2		117.4		—		—		117.4
Total liabilities	$	70.3	$	—	$	2.1	$	68.2	$	120.5	$	—	$	3.1	$	117.4

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

(2)Includes, as of March 28, 2026, $263.1 million in Cash and cash equivalents, $6.7 million in Restricted cash and $2.9 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.

(3)Included in Short-term investments on the Consolidated Balance Sheets.

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

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

(6)As of March 28, 2026 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 March 28, 2026, the fair value of the contingent consideration liability for Inertial Labs was $68.2 million, compared to $139.1 million at December 27, 2025 and $117.1 million at June 28, 2025. As of March 28, 2026, $43.0 million and $25.2 million of the liability are included in Other current liabilities and Other non-current liabilities, respectively, on the Consolidated Balance Sheets. During the three months ended March 28, 2026, the Company made a contingent consideration payment of $73.5 million for Inertial Labs, of which acquisition date fair value of $29.8 million was classified as a financing outflow and the remaining classified as an operating activity within Accrued expenses and other current and non-current liabilities in the Consolidated Statements of Cash Flows.

The earn-out period for Jackson Labs ended on December 31, 2025. The Company was not required to make a contingent consideration payment as the revenue targets were not met.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company recorded charges of $2.6 million and $24.3 million, respectively, from the change in fair value measurement of the contingent consideration liabilities within SG&A in the Consolidated Statements of Operations for the three and nine months ended March 28, 2026.

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), 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):


	March 28, 2026								June 28, 2025
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Debt:
0.625% Senior Convertible Notes	$	648.2	$	—	$	648.2	$	—	$	—	$	—	$	—	$	—
3.75% Senior Notes	370.7		—		370.7		—		373.6		—		373.6		—
1.625% Senior Convertible Notes(1)	—		—		—		—		252.0		—		252.0		—
Term Loan B	452.3		—		452.3		—		—		—		—		—
Total	$	1,471.2	$	—	$	1,471.2	$	—	$	625.6	$	—	$	625.6	$	—

(1) The 2026 Notes were settled upon maturity on March 15, 2026. See “Note 11. Debt”, for further discussion of the Company’s debt.

Note 9. Goodwill

The following table presents changes in goodwill allocated to the Company’s reportable segments (in millions):





	Network and Service Enablement		Optical Security and Performance Products		Total
Balance as of June 28, 2025	$	553.5	$	42.2	$	595.7
Acquisition(1)	111.3		—		111.3
Measurement period adjustments(1)	0.3		—		0.3
Currency translation	(5.5)		—		(5.5)



Balance as of March 28, 2026	$	659.6	$	42.2	$	701.8

(1)Goodwill at acquisition date and adjustments. 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 and nine months ended March 28, 2026.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 10. Intangibles

The following tables present details of the Company’s acquired developed technology, customer relationships and other intangibles as of March 28, 2026 and June 28, 2025 (in millions):



As of March 28, 2026	Weighted-Average Remaining Useful Life	Gross Carrying Amount		Accumulated Amortization		Net
Acquired developed technology	4.7 years	$	667.9	$	(448.8)	$	219.1
Customer relationships	8.3 years	369.3		(207.3)		162.0
Other(1)	3.0 years	60.6		(43.7)		16.9
Total intangibles		$	1,097.8	$	(699.8)	$	398.0



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

Other(1)	1.7 years	44.1		(39.2)		4.9
Total intangibles		$	787.6	$	(656.0)	$	131.6

(1)Other intangibles consist of proprietary know-how and trade secrets, trademarks and trade names.

Amortization expense related to intangibles was $20.4 million and $7.3 million for the three months ended March 28, 2026 and March 29, 2025, respectively, and $47.6 million and $16.0 million for the nine months ended March 28, 2026 and March 29, 2025, respectively.

Based on the carrying amount of acquired developed technology, customer relationships and other intangibles as of March 28, 2026, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows (in millions):


Fiscal Years
Remainder of 2026	$	20.2
2027	77.7
2028	67.9
2029	63.5
2030	62.4
Thereafter	106.3
Total amortization	$	398.0


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 11. Debt

As of March 28, 2026 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):


	March 28, 2026		June 28, 2025
Principal amount of 0.625% Senior Convertible Notes	$	250.0	$	—
Unamortized 0.625% Senior Convertible Notes debt issuance cost	(5.5)		—
Principal amount of 1.625% Senior Convertible Notes	—		250.0
Unamortized 1.625% Senior Convertible Notes debt discount	—		(3.3)
Unamortized 1.625% Senior Convertible Notes debt issuance cost	—		(0.5)



Short-term debt	$	244.5	$	246.2

Principal amount of 3.75% Senior Notes	$	400.0	$	400.0
Unamortized 3.75% Senior Notes debt issuance cost	(3.1)		(3.7)
Principal amount of Term Loan B	450.0		—
Unamortized Term Loan B debt issuance cost	(10.6)		—
Long-term debt	$	836.3	$	396.3

The Company was in compliance with all debt covenants as of March 28, 2026 and June 28, 2025.

Term Loan B

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 Term Secured Overnight Financing Rate (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.


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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.

On January 5, 2026, and March 4, 2026, the Company made prepayments of $100.0 million and $50.0 million, respectively, of the term loans under the Term Loan Credit Agreement. The prepayments were accounted for as partial extinguishments, 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 debt extinguishment. The Company recorded a loss of $3.7 million within Loss on debt extinguishment in the Consolidated Statements of Operations.

With these prepayments, VIAVI is no longer required to make quarterly principal payments of 1.0% per annum since the prepayments exceeded the total required amortization over the life of the loan.

As of March 28, 2026, the interest rate for the borrowings under the term loans was 6.17%, which approximated the effective interest rate and the expected remaining term is 6.6 years.

0.625% Senior Convertible Notes (2031 Notes)

On August 20, 2025, the Company issued $250.0 million aggregate principal amount of 0.625% Senior Convertible Notes due 2031 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. 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 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. Accrued interest of $0.7 million on the 2026 Notes was included in the exchange for the 2031 Notes. The total loss from the exchange was $3.8 million recorded as Loss on debt extinguishment in the Consolidated Statements of Operations.

Concurrent with the transactions discussed above, the Company repurchased and subsequently retired 2.7 million shares of its common stock for $30.0 million under the 2022 Repurchase Plan.

In connection with the issuance of the 2031 Notes, the Company incurred $6.1 million of issuance costs. The debt issuance costs were capitalized and will be amortized to interest expense using the straight-line method until maturity.

The 2031 Notes are an unsecured obligation of the Company and bear interest at an annual rate of 0.625%, payable semi-annually in arrears on March 1 and September 1 of each year, beginning March 1, 2026. The 2031 Notes will mature on March 1, 2031 unless earlier converted, redeemed or repurchased.

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.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

During the third quarter of fiscal 2026, the closing price of the Company’s common stock exceeded 130% of the applicable conversion price of the 2031 Notes, on at least 20 of the last 30 consecutive trading days of the calendar quarter, causing the 2031 Notes to be convertible by their holders for the period April 1, 2026 to June 30, 2026. While the last two trading days of the calendar quarter ending March 31, 2026 were after the Balance Sheet date, the pricing trigger was met for the calendar quarter. As a result, the $244.5 million carrying value of the 2031 Notes has been reclassified to short-term debt.

As of March 28, 2026, the expected remaining term of the 2031 Notes is 4.9 years.

1.625% Senior Convertible Notes (2026 Notes)

On March 6, 2023, the Company issued $250.0 million aggregate principal amount of 1.625% Senior Convertible Notes due 2026 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The Company issued $132.0 million aggregate principal amount of the 2026 Notes to certain holders of the 1.00% Senior Convertible Notes due 2024 (2024 Notes) in exchange for $127.5 million principal amount of the 2024 Notes (the 2023 Exchange Transaction) and issued and sold $118.0 million aggregate principal amount of the 2026 Notes in a private placement to accredited institutional buyers (the 2023 Subscription Transactions).

The 2023 Exchange Transaction was accounted for as a modification. The $127.5 million principal of the 2024 Notes was reduced by $10.1 million, with offsetting increase to additional paid-in capital, to account for the increase in the fair value of the embedded conversion option in the modification. The increase in principal and coupon interest, along with the increased option value, totaled $14.6 million and is a direct reduction from the carrying amount of the debt on the Consolidated Balance Sheets. This amount has been accreted as an adjustment to interest expense on a straight-line basis up to the full face value of the 2026 Notes through maturity on March 15, 2026.

The proceeds of the 2023 Subscription Transactions amounted to $113.8 million after issuance costs of $4.2 million. The exchange resulted in $2.2 million of the issuance costs recorded as Loss on convertible note modification in the Consolidated Statements of Operations. The remaining issuance costs of $2.0 million, as well as $0.3 million of unamortized costs carried over from the 2024 Notes at the exchange date were capitalized within Long-term debt (as a contra-balance) on the Consolidated Balance Sheets and were amortized to interest expense using the straight-line method until maturity on March 15, 2026.

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 the 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 million, 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 debt extinguishment in the Company’s Consolidated Statements of Operations.

On March 15, 2026, the outstanding $49.0 million principal amount of the 2026 Notes matured. Nearly all holders of the 2026 Notes chose to convert and the settlement of the conversion resulted in a cash payment of $49.4 million, including $49.0 million in principal and $0.4 million in accrued interest, and the issuance of 1.8 million shares of its common stock for conversion value above par.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.75% Senior Notes (2029 Notes)

On September 29, 2021, the Company issued $400.0 million aggregate principal amount of 3.75% Senior Notes due 2029 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. In connection with the issuance of the 2029 Notes, the Company incurred $7.0 million of issuance costs. The debt issuance costs were capitalized and will be amortized to interest expense using the straight-line method until maturity. The 2029 Notes are an unsecured obligation of the Company and bear annual interest of 3.75%, payable semi-annually in arrears on April 1 and October 1 of each year, beginning April 1, 2022. The 2029 Notes will mature on October 1, 2029 unless earlier redeemed or repurchased. As of March 28, 2026, the expected remaining term of the 2029 Notes is 3.5 years.

1.00% Senior Convertible Notes (2024 Notes)

On March 3, 2017, the Company issued $400.0 million aggregate principal amount of 1.00% Senior Convertible Notes due 2024 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. On March 22, 2017, the Company issued an additional $60.0 million upon exercise of the over-allotment option of the initial purchasers. The total proceeds from the 2024 Notes amounted to $451.1 million after issuance costs of $8.9 million. The debt issuance costs were capitalized and amortized to interest expense using the straight-line method from the issuance date through maturity on March 1, 2024.

During fiscal 2022, the Company entered into separate privately-negotiated agreements with certain holders of the 2024 Notes, settling $236.1 million principal in exchange for an aggregate of 8.6 million shares of its common stock, par value $0.001 per share, and $178.8 million in cash. The 2023 Exchange Transaction resulted in the reduction of $127.5 million principal of the 2024 Notes. 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.

Senior Secured Asset-Based Revolving Credit Facility

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. The proceeds from the credit facility established under the Credit Agreement will be used for working capital and other general corporate purposes. The obligations under the Credit Agreement are secured by substantially all of the assets of the Company and those of its subsidiaries that are borrowers and guarantors under the Credit Agreement.

Amounts outstanding under the Credit Agreement 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 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, (ii) if the amounts outstanding are denominated in Sterling, at a per annum rate equal to the Sterling Overnight Interbank Average Rate (SONIA) plus a margin of 1.50% to 2.00%, depending on the average excess availability under the facility, (iii) if the amounts outstanding are denominated in Euros, at a per annum rate equal to the Euro Interbank Offered Rate plus a margin of 1.50% to 2.00%, depending on the average excess availability under the facility, or (iv) if the amounts outstanding are denominated in Canadian Dollars, at a per annum rate equal to either, at the Company’s election, the adjusted Term Canadian Overnight Repo Rate Average (CORRA) plus a margin of 1.50% to 2.00%, or 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.

The covenants of the Credit Agreement include customary restrictive covenants that, among other things, restrict the Company’s ability to incur additional indebtedness, grant liens and make certain acquisitions, investments, asset dispositions and restricted payments. 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.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of March 28, 2026, we had no borrowings under this facility and our available borrowing capacity was approximately $182.7 million, net of outstanding standby letters of credit of $3.8 million.

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				Nine Months Ended
	March 28, 2026		March 29, 2025		March 28, 2026		March 29, 2025

Interest expense-contractual interest	$	12.1	$	4.8	$	29.4	$	14.3
Amortization of debt issuance cost	1.1		0.6		3.0		1.8
Accretion of debt discount	0.2		1.2		1.9		3.6
Other	0.9		0.9		2.7		2.8
Total interest expense	$	14.3	$	7.5	$	37.0	$	22.5

Note 12. Leases

The Company is a lessee in several operating leases, primarily real estate facilities for office space. The Company's lease arrangements are comprised of operating leases with various expiration dates through March 31, 2042. The Company's leases do not contain any material residual value guarantees.

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


	Three Months Ended				Nine Months Ended
	March 28, 2026		March 29, 2025		March 28, 2026		March 29, 2025

Operating lease costs(1)	$	3.7	$	3.4	$	10.6	$	9.8

Cash paid for amounts included in the measurement of operating lease liabilities	$	3.8	$	3.5	$	11.1	$	9.7
Operating ROU assets obtained in exchange for operating lease obligations	$	6.0	$	4.4	$	16.6	$	7.1

(1)Total variable lease costs were immaterial during the three and nine months ended March 28, 2026 and March 29, 2025. The total operating lease costs were included in Cost of revenues, R&D, and SG&A in the Consolidated Statements of Operations.

As of March 28, 2026 and March 29, 2025, the weighted-average remaining lease term was 5.6 years and 6.0 years, respectively, and the weighted-average discount rate was 6.3% and 5.8%, respectively.

Future minimum operating lease payments as of March 28, 2026 are as follows (in millions):


	Operating Leases
Remainder of fiscal 2026	$	2.1
Fiscal 2027	13.4
Fiscal 2028	10.7
Fiscal 2029	7.6
Fiscal 2030	5.2
Thereafter	11.5
Total lease payments	50.5
Less: Interest	(8.4)
Present value of lease liabilities	$	42.1


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 13. Restructuring

The Company’s restructuring events are primarily intended to reduce costs, consolidate operations, integrate various acquisitions, streamline product manufacturing and address market conditions. Restructuring charges include severance, benefits and outplacement costs to eliminate a specified number of positions. The timing of associated cash payments is dependent upon the jurisdiction of the affected employees and can extend over multiple periods.

Fiscal 2026 Plan

During the third quarter of fiscal 2026, management approved a restructuring and workforce reduction plan (the Fiscal 2026 Plan) across our NSE and Optical Security and Performance Products (OSP) segments and Corporate (Corp) functions intended 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 Fiscal 2026 Plan includes a global workforce reduction, facilities rationalization and asset write-offs. The Company anticipates the Fiscal 2026 Plan to be substantially complete by the end of calendar year 2026.

During the three months ended March 28, 2026, the Company recognized restructuring charges of $17.4 million of employee severance, benefits and outplacement costs recorded within Restructuring and related charges (benefits) in the Consolidated Statements of Operations. In addition, the Company recognized Fiscal 2026 Plan charges of $3.6 million and $0.3 million related to property, plant and equipment recorded within Cost of revenues and SG&A, respectively, and $0.3 million of accelerated depreciation recorded within SG&A, each in the Consolidated Statements of Operations.

Fiscal 2024 Plan

During the fourth quarter of fiscal 2024, management approved a restructuring and workforce reduction plan (the Fiscal 2024 Plan) across our NSE and OSP segments and Corp functions intended to improve operational efficiencies and better align the Company’s workforce with current business needs. Restructuring activity related to the OSP segment was complete during fiscal 2025. The Company anticipates the Fiscal 2024 Plan will be complete by the end of fiscal 2026.

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





	Balance as of June 28, 2025(1)		Restructuring and related charges (benefits)		Cash settlements		Foreign currency translation adjustments		Balance as of March 28, 2026(1)
Fiscal 2026 Plan
NSE/Corp	$	—	$	15.6	$	(0.7)	$	(0.2)	$	14.7
OSP	—		1.8		(0.2)		—		1.6
Fiscal 2026 Plan	—		17.4		(0.9)		(0.2)		16.3
Fiscal 2024 Plan
NSE/Corp	3.5		(0.5)		(2.7)		(0.1)		0.2


Fiscal 2024 Plan	3.5		(0.5)		(2.7)		(0.1)		0.2




Total	$	3.5	$	16.9	$	(3.6)	$	(0.3)	$	16.5

(1)Included in Other current liabilities on the Consolidated Balance Sheets as of March 28, 2026 and June 28, 2025.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Income Taxes

The Company recorded an income tax provision of $7.4 million and $36.1 million for the three and nine months ended March 28, 2026, respectively. The Company recorded an income tax benefit of $16.3 million and an income tax provision of $2.2 million for the three and nine months ended March 29, 2025, respectively.

The income tax provision for the three and nine months ended March 28, 2026 primarily relates to income tax in certain foreign jurisdictions based on the Company’s forecasted pre-tax income or loss and revaluation of the Company’s German deferred tax assets. The income tax benefit for the three months and the income tax provision for the nine months ended March 29, 2025 primarily relates to the release of valuation allowance related to the acquisition of Inertial labs and income tax in certain foreign and state jurisdictions based on the Company’s forecasted pre-tax income or loss.

The income tax provision 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 March 28, 2026 and June 28, 2025, the Company’s unrecognized tax benefits (net of Federal benefits) totaled $42.9 million and $42.4 million, respectively, and are included in deferred taxes and other non-current tax liabilities. The Company had $3.5 million accrued for the payment of interest and penalties as of March 28, 2026. 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. Although the Company does not expect that our balance of gross unrecognized tax benefits will change materially in the next 12 months, given the uncertainty in the development of ongoing income tax examinations, the Company is unable to estimate the full range of possible adjustments to this balance.

Note 15. Stockholders' Equity

Issuance of Common Stock

During the three months ended March 28, 2026, the Company issued approximately 1.8 million shares of its common stock in connection with the settlement of the remaining 2026 Notes.

During the nine months ended March 28, 2026, the Company issued approximately 9.7 million shares of its common stock related to the settlement of the 2026 Notes, including 7.9 million shares issued in December 2025 and 1.8 million shares issued in March 2026.

Repurchase of Common Stock

In September 2022 the Board of Directors authorized a stock repurchase plan (2022 Repurchase Plan) of up to $300 million effective October 1, 2022, which will remain in effect until the amount authorized has been fully repurchased or until suspension or termination of the program. Under the 2022 Repurchase Plan, the Company is authorized to repurchase shares through a variety of methods, including open market purchases, privately-negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans. The timing of repurchases under the plan will depend upon business and financial market conditions.

During the nine months ended March 28, 2026, 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 March 28, 2026, the Company had remaining authorization of $168.4 million for future share repurchases under the 2022 Repurchase Plan.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 16. Stock-Based Compensation

The Company's stock-based compensation includes a combination of time-based restricted stock awards and performance-based awards. Restricted stock awards are granted without an exercise price and are converted to shares immediately upon vesting. When converted into shares upon vesting, shares equivalent in value to the minimum withholding taxes liability on the vested shares are withheld by the Company for the payment of such taxes.

The Company generally estimates the fair value of stock-based awards based on the closing market price of the Company’s common stock on the grant date. In the case of performance-based awards that include a market condition, the Company estimates the fair value of the award using a combination of the closing market price of the Company’s common stock on the grant date and the Monte Carlo simulation model. For performance-based awards, shares attained over target upon vesting are reflected as awards granted during the period.

Time-based restricted stock awards granted to eligible employees will generally vest in annual installments over a period of three to four years subject to the employees’ continuing service to the Company and do not have an expiration date. The Company's performance-based awards may include performance conditions, market conditions, time-based service conditions or a combination thereof and are generally expected to vest in annual installments over a period of three to four years. 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 nine months ended March 28, 2026 and March 29, 2025, the Company granted 3.9 million and 4.5 million time-based restricted stock awards, respectively. The aggregate grant-date fair value of time-based restricted stock awards granted during the nine months ended March 28, 2026 and March 29, 2025 were estimated to be $47.8 million and $39.5 million, respectively.

During the nine months ended March 28, 2026 and March 29, 2025, 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 nine months ended March 28, 2026 and March 29, 2025, respectively. The aggregate grant-date fair value of performance-based awards granted during the nine months ended March 28, 2026 and March 29, 2025 were estimated to be $16.3 million and $15.1 million, respectively.

As of March 28, 2026, $77.6 million of unrecognized stock-based compensation costs remain to be amortized.

The impact on the Company’s results of operations of recording stock-based compensation by function for the three and nine months ended March 28, 2026 and March 29, 2025, is as follows (in millions):


	Three Months Ended				Nine Months Ended
	March 28, 2026		March 29, 2025		March 28, 2026		March 29, 2025
Cost of revenues	$	1.1	$	2.0	$	3.2	$	4.5
Research and development	2.5		2.3		7.3		6.7
Selling, general and administrative	10.3		9.8		30.7		29.3
Total stock-based compensation expense	$	13.9	$	14.1	$	41.2	$	40.5

Approximately $1.2 million and $1.3 million of stock-based compensation was capitalized to inventory as of March 28, 2026 and March 29, 2025, respectively.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 17. Employee Pension and Other Benefit Plans

The Company sponsors significant qualified and non-qualified pension plans for certain past and present employees in the United Kingdom (U.K.) and Germany. The Company also is responsible for a defined benefit plan comprising of gratuity payments for present employees in India and non-pension post-retirement benefit obligation assumed from a past acquisition.

These pension plans, with the exception of India, have been closed to new participants and no additional service costs are being accrued, except for certain plans in Germany assumed in connection with an acquisition in fiscal 2010. Benefits are generally based upon years of service and compensation or stated amounts for each year of service.

As of March 28, 2026, the U.K. and India plans were fully funded while the other plans were unfunded. The Company’s policy for funded plans is to make contributions equal to or greater than the requirements prescribed by law or regulation. For unfunded plans, the Company pays the post-retirement benefits when due. During the nine months ended March 28, 2026, the Company contributed $1.0 million to the U.K. plan and $4.8 million to the other plans. The funded plan assets consist primarily of managed investments.

The following table presents the components of net periodic cost for the pension and benefits plans (in millions):


	Three Months Ended				Nine Months Ended
	March 28, 2026		March 29, 2025		March 28, 2026		March 29, 2025

Interest cost	$	0.8	$	0.8	$	2.4	$	2.4
Expected return on plan assets	(0.3)		(0.4)		(1.1)		(1.3)
Amortization of net actuarial losses	—		—		0.1		0.2
Net periodic benefit cost	$	0.5	$	0.4	$	1.4	$	1.3

The components of net periodic pension cost, other than the service cost component, are included in Cost of revenues, R&D and SG&A in the Consolidated Statements of Operations.

Both the calculation of the projected benefit obligation and net periodic cost are based upon actuarial valuations. These valuations use participant-specific information such as salary, age, years of service, and assumptions about interest rates, compensation increases and other factors. 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 March 28, 2026, approximately $5.8 million had been incurred. These payments have been estimated based on the same assumptions used to measure the Company’s projected benefit obligation at June 28, 2025.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 18. Commitments and Contingencies

Legal Proceedings

The Company is subject to a variety of claims and suits that arise from time to time in the ordinary course of its business. While management currently believes that resolving claims against the Company, individually or in aggregate, will not have a material adverse impact on its financial position, results of operations or statement of cash flows, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. Were an unfavorable final outcome to occur, there exists the possibility of a material adverse impact on the Company’s financial position, results of operations or cash flows for the period in which the effect becomes reasonably estimable.

Tel-Instruments Electronics Corp. Settlement

In July 2023, the Court of Appeals in the State of Kansas affirmed a lower court decision in a case filed by Aeroflex Wichita (Aeroflex), a VIAVI subsidiary, against Tel-Instrument Electronics Corp. (TIC) and two of its employees with total damages of $7.3 million owed to VIAVI. The lower court case, filed by Aeroflex prior to the acquisition by VIAVI and affirmed by the Kansas Court of Appeals, awarded damages caused by tortious interference and improper use and disclosure of Aeroflex’s confidential and proprietary business information used by the defendants to win a competitive U.S. Army contract.

TIC did not file a petition to appeal the decision and acknowledged its obligation to pay damages in full. VIAVI subsequently received total payments of $7.3 million from TIC and the two former employees and recorded a gain to Interest and other income, net in the Consolidated Statements of Operations for the three months ended September 30, 2023.

Guarantees

Outstanding Letters of Credit, Performance Bonds and Other Claims

As of March 28, 2026, the Company had standby letters of credit of $10.3 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 and nine months ended March 28, 2026 (in millions):


	March 28, 2026
	Three Months Ended		Nine Months Ended
Balance as of beginning of period	$	7.0	$	6.7
Provision for warranty	0.4		1.1
Utilization of reserve	(0.6)		(1.6)
Adjustments to pre-existing warranties (includes changes in estimates)	(0.1)		(0.1)
Acquisition	—		0.6
Balance as of end of period	$	6.7	$	6.7


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 19. Operating Segments and Geographic Information

The Company evaluates its operating segments in accordance with the authoritative guidance on segment reporting. The Company’s Chief Executive Officer as the Company’s Chief Operating Decision Maker (CODM) uses operating segment financial information to evaluate segment performance and to allocate resources.

The Company’s operating and reportable segments are:

(i) Network and Service Enablement (NSE):

NSE provides an integrated portfolio of testing, monitoring, assurance and security solutions to help build, maintain, and optimize telecom and datacom networks. Our solutions address lab and production environments, network management, service assurance and AIOps for any kind of network, including wireless, wireline, cloud, satellite, public safety, military and critical infrastructure. NSE also offers a range of product support and professional services such as repair, calibration, software support and technical assistance for its products.

(ii) Optical Security and Performance Products (OSP):

OSP leverages its core optical coating technologies and volume manufacturing capability to design, manufacture, and sell technologies for the anti-counterfeiting, 3D sensing, government and aerospace, automotive and industrial markets.

Segment Reporting

The CODM manages the Company in two broad business categories: NSE and OSP. The CODM evaluates segment performance of the NSE and OSP business based on segment operating margins. The CODM uses segment operating margin to make budgeting and forecasting decisions and to assess the performance of our segments, primarily by monitoring actual results versus the prior year, the annual budget and forecasted results. In addition, the CODM reviews inventory levels and certain other current assets by segment. The Company allocates corporate-level operating expenses to its segment results, except for certain non-core operating and non-operating activities as discussed below.

The Company does not allocate stock-based compensation, acquisition and integrated related charges, amortization of acquisition related intangibles, amortization of acquisition related inventory step-up, legal settlements, restructuring, changes in fair value of contingent consideration liabilities, non-operating income and expenses, or other charges unrelated to core operating performance to its segments because management does not include this information in its measurement of the performance of the operating segments. These items are presented as “Unallocated other expenses” in the table below. Additionally, the Company does not specifically identify and allocate all assets by operating segment.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables present information on the Company’s reportable segments for the three and nine months ended March 28, 2026 and March 29, 2025 (in millions):


	Three Months Ended March 28, 2026
	Network and Service Enablement			Optical Security and Performance Products			Total
Product revenue	$	271.7		$	85.3		$	357.0
Service revenue	49.8			—			49.8
Net revenue	$	321.5		$	85.3		$	406.8

Cost of revenues	111.5			42.4

Research and development	64.2			3.3


Selling, general and administrative	58.8			6.1
Other segment items(1)	31.6			3.4
Total operating expense	154.6			12.8

Segment operating income	$	55.4		$	30.1		$	85.5
Segment operating margin	17.2		%	35.3		%


Unallocated other expenses							(60.7)
Loss on debt extinguishment							(3.7)
Interest and other income, net							7.0
Interest expense							(14.3)
Income before income taxes and equity investment earnings							$	13.8

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


	Three Months Ended March 29, 2025
	Network and Service Enablement			Optical Security and Performance Products			Total
Product revenue	$	164.9		$	76.6		$	241.5
Service revenue	43.3			—			43.3
Net revenue	$	208.2		$	76.6		$	284.8

Cost of revenues	76.9			37.1

Research and development	42.6			4.1


Selling, general and administrative	42.1			6.4
Other segment items(1)	24.9			3.0
Total operating expense	109.6			13.5

Segment operating income	$	21.7		$	26.0		$	47.7
Segment operating margin	10.4		%	33.9		%



Unallocated other expenses							(39.2)
Interest and other income, net							2.2
Interest expense							(7.5)
Income before income taxes and equity investment earnings							$	3.2

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


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	Nine Months Ended March 28, 2026
	Network and Service Enablement			Optical Security and Performance Products			Total
Product revenue	$	685.5		$	246.2		$	931.7
Service revenue	143.5			—			143.5
Net revenue	$	829.0		$	246.2		$	1,075.2

Cost of revenues	294.3			120.3

Research and development	170.0			10.5


Selling, general and administrative	157.9			19.3
Other segment items(1)	89.7			9.2
Total operating expense	417.6			39.0

Segment operating income	$	117.1		$	86.9		$	204.0
Segment operating margin	14.1		%	35.3		%


Unallocated other expenses							(160.2)
Loss on debt extinguishment							(46.2)
Interest and other income, net							12.2
Interest expense							(37.0)
Loss before income taxes and equity investment earnings							$	(27.2)

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


	Nine Months Ended March 29, 2025
	Network and Service Enablement			Optical Security and Performance Products			Total
Product revenue	$	438.4		$	226.3		$	664.7
Service revenue	129.1			—			129.1
Net revenue	$	567.5		$	226.3		$	793.8

Cost of revenues	209.6			107.3

Research and development	129.7			13.0


Selling, general and administrative	121.2			18.0
Other segment items(1)	75.2			7.8
Total operating expense	326.1			38.8

Segment operating income	$	31.8		$	80.2		$	112.0
Segment operating margin	5.6		%	35.4		%



Unallocated other expenses							(69.8)
Interest and other income, net							9.3
Interest expense							(22.5)
Income before income taxes and equity investment earnings							$	29.0

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


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents information on the assets of the Company’s reportable segments at March 28, 2026 and June 28, 2025 (in millions):



	March 28, 2026		June 28, 2025
Assets:
Inventories:
NSE	$	107.9	$	74.4
OSP	40.0		43.5
Total inventories, net	147.9		117.9
Prepayments and other current assets - NSE(1)	15.4		5.8




Assets not attributed to segments	2,364.5		1,870.1
Total assets	$	2,527.8	$	1,993.8

(1)The amount presented represents the prepayments and other current assets attributed to NSE that are reviewed by the CODM. Other NSE related prepayments and current assets are not included as they are not part of the CODM’s measure of segment assets.


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VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company operates primarily in three geographic regions: Americas, Asia-Pacific, and Europe, Middle East and Africa (EMEA). Net revenue is assigned to the geographic region and country where the Company’s product is initially shipped. For example, certain customers may request shipment of the Company’s product to a contract manufacturer in one country, which may differ from the location of their end customers.

The following table presents net revenue by the three geographic regions in which the Company operates and net revenue from countries that exceeded 10% of the Company’s total net revenue for the three and nine months ended March 28, 2026 and March 29, 2025 (in millions):


	Three Months Ended
	March 28, 2026						March 29, 2025

	Product Revenue		Service Revenue		Total		Product Revenue		Service Revenue		Total
Americas:
United States	$	134.2	$	19.8	$	154.0	$	75.2	$	14.7	$	89.9
Other Americas	24.6		4.2		28.8		12.3		5.9		18.2
Total Americas	$	158.8	$	24.0	$	182.8	$	87.5	$	20.6	$	108.1

Asia-Pacific:
Greater China	$	61.6	$	2.6	$	64.2	$	50.8	$	1.1	$	51.9
Other Asia-Pacific	55.9		8.1		64.0		41.8		7.0		48.8
Total Asia-Pacific	$	117.5	$	10.7	$	128.2	$	92.6	$	8.1	$	100.7




EMEA:	$	80.7	$	15.1	$	95.8	$	61.4	$	14.6	$	76.0

Total net revenue	$	357.0	$	49.8	$	406.8	$	241.5	$	43.3	$	284.8


	Nine Months Ended
	March 28, 2026						March 29, 2025

	Product Revenue		Service Revenue		Total		Product Revenue		Service Revenue		Total
Americas:
United States	$	351.4	$	53.9	$	405.3	$	217.2	$	44.2	$	261.4
Other Americas	64.2		13.0		77.2		37.7		13.8		51.5
Total Americas	$	415.6	$	66.9	$	482.5	$	254.9	$	58.0	$	312.9

Asia-Pacific:
Greater China	$	178.0	$	5.9	$	183.9	$	151.1	$	5.0	$	156.1
Other Asia	123.4		21.1		144.5		102.8		21.3		124.1
Total Asia-Pacific	$	301.4	$	27.0	$	328.4	$	253.9	$	26.3	$	280.2





EMEA:	$	214.7	$	49.6	$	264.3	$	155.9	$	44.8	$	200.7

Total net revenue	$	931.7	$	143.5	$	1,075.2	$	664.7	$	129.1	$	793.8

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Statements contained in this Quarterly Report on Form 10-Q, which we also refer to as the Report, which are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. A forward-looking statement may contain words such as “anticipate,” “believe,” “can,” “can impact,” “could,” “continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “projects,” “should,” “will,” “will continue to be,” “would,” or the negative thereof or other comparable terminology regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements include statements, but are not limited to statements such as:

•Financial projections and expectations, including profitability of certain business units, synergies, benefits and other matters related to completed and contemplated acquisitions and strategic transactions, plans to reduce costs and improve efficiencies including through restructuring programs, the effects of seasonality on certain business units, the consolidation of the communication industry and continued reliance on key customers for a significant portion of our revenue, future sources of revenue, competition and pricing pressures, the future impact of certain accounting pronouncements, and our estimation of the potential impact and materiality of litigation;

•Sufficiency of our sources of funding for working capital, capital expenditures, contractual obligations, acquisitions, stock repurchases, debt repayments and other matters;

•Our expectations regarding demand for our products and services, including industry trends and technological advancements that may drive such demand, the role we will play in those advancements and our ability to benefit from such advancements;

•Our plans for growth and innovation opportunities;

•Our plans for continued development, use and protection of our intellectual property;

•Our strategies for achieving our current business objectives, including related risks and uncertainties;

•Our plans or expectations relating to investments, execution of capital allocation and debt management strategies, acquisitions, partnerships and other strategic opportunities;

•Our research and development plans and investments and the expected impact of such plans on our financial performance;

•Our expectations related to our products, including costs associated with the development of new products, product yields, quality and other issues;

•Our expectations regarding the impact of tariffs and our strategies for mitigating such impact;

•Our expectations related to future tax liabilities resulting from future tax legislation; and

•Our expectations related to macro-economic conditions, including the impact of inflation, fiscal tightening at central banks, changes in foreign exchange rates, the risk of increased tensions and trade actions, including global tariffs, ongoing geopolitical tensions including the conflicts between Russia and Ukraine and in the Middle East, and political instability and economic uncertainty in the Middle East, on our business, operations and financial results.

Management cautions that forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from those projected in such forward-looking statements. These forward-looking statements are only predictions and are subject to risks and uncertainties including those set forth in Part II, Item 1A “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and in other documents we file with the U.S. Securities and Exchange Commission. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. Forward-looking statements are made only as of the date of this Report and subsequent facts or circumstances may contradict, obviate, undermine or otherwise fail to support or substantiate such statements. We are under no duty to update any of the forward-looking statements after the date of this Form 10-Q to conform such statements to actual results or to changes in our expectations.

In addition, Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended June 28, 2025.

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You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Risk Factors” and “Forward-Looking Statements.”

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Overview

VIAVI is a global leader in test and measurement and optical technologies. Our test, monitoring, assurance, and resilient position, navigation and timing solutions enable and secure critical infrastructure ranging from data center ecosystems and communication networks to military, aerospace, railway and first responder communications. In addition, we develop and advance technologies used in high-volume optical applications across anti-counterfeiting, consumer electronics, aerospace, industrial and automotive end markets.

To serve our markets we operate the following business segments:

•Network and Service Enablement (NSE); and,

•Optical Security and Performance Products (OSP).

During the third quarter of fiscal 2026, the NSE business grew year-over-year as a result of our acquisition of Spirent Communications plc’s (Spirent) high-speed ethernet, network security and channel emulation testing business (collectively, the HSE and CE business). Additionally, we continue to see strong demand for lab and production and field products, driven by the data center ecosystem, as well as demand for our aerospace and defense products. OSP performance improved year-over-year driven by anti-counterfeiting and other products (other products include government, industrial and automotive end markets) and 3D Sensing.

Our financial results and long-term growth model will continue to be driven by revenue growth, non-GAAP operating income, non-GAAP operating margin, non-GAAP diluted earnings per share (EPS) and cash flow from operations. We believe these key operating metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies.

Looking Ahead

As we look forward to the fourth quarter of fiscal 2026, we expect revenue for VIAVI to be up sequentially driven by continued strength in many of our end markets across NSE and OSP. Our long-term focus remains on executing against our strategic priorities to drive revenue and earnings growth, capture market share and continue to optimize our capital structure. We remain positive on our long-term growth drivers and will continue to focus on executing our strategic priorities over the long-term to:

•Defend and consolidate leadership in core business segments;

•Invest in secular trends to drive growth and expand total addressable market (TAM);

•Extend VIAVI technologies and platforms into lucrative adjacent markets and applications.

In 2025, the U.S. administration imposed additional, broad-based tariffs, under the International Emergency Economic Powers Act (IEEPA), which were then struck down by the U.S. Supreme Court as unconstitutional. In 2026, the administration then imposed temporary replacement tariffs. These, 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. We continue to take actions to optimize our supply chain, control costs and implement pricing actions to mitigate the evolving impact from tariffs.

Financial Highlights

Third quarter fiscal 2026 results included the following notable items:

•Net revenue of $406.8 million, up $122.0 million or 42.8% year-over-year.

•GAAP operating margin of 6.1%, up 310 bps year-over-year.

•Non-GAAP operating margin of 21.0%, up 430 bps year-over-year.

•GAAP net income of $6.4 million, down $13.1 million or 67.2% year-over-year.

•Non-GAAP net income of $67.6 million, up $33.7 million or 99.4% year-over-year.

•GAAP diluted EPS of $0.03, down $0.06 or 66.7% year-over-year.

•Non-GAAP diluted EPS of $0.27, up $0.12 or 80.0% year-over-year.

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A reconciliation of GAAP financial measures to Non-GAAP financial measures is provided below (in millions, except EPS amounts):


	Three Months Ended								Nine Months Ended
	March 28, 2026				March 29, 2025				March 28, 2026				March 29, 2025
	Operating Income		Operating Margin		Operating Income		Operating Margin		Operating Income		Operating Margin		Operating Income		Operating Margin


GAAP measures	$	24.8	6.1	%	$	8.5	3.0	%	$	43.8	4.1	%	$	42.2	5.3	%
Stock-based compensation	13.9		3.4	%	14.1		4.9	%	41.2		3.8	%	40.5		5.1	%
Change in fair value of contingent liability	2.6		0.6	%	2.5		0.9	%	24.3		2.3	%	(4.9)		(0.6)	%
Acquisition and integration related charges	0.7		0.2	%	13.3		4.7	%	12.4		1.1	%	16.7		2.1	%
Other charges unrelated to core operating performance(1)	4.9		1.2	%	0.6		0.2	%	11.7		1.1	%	0.2		—	%
Amortization of acquisition related inventory step-up	0.9		0.2	%	1.7		0.6	%	6.1		0.6	%	1.7		0.2	%
Amortization of intangibles	20.4		5.0	%	7.3		2.5	%	47.6		4.4	%	16.0		2.0	%
Restructuring and related charges (benefits)	17.3		4.3	%	(0.3)		(0.1)	%	16.9		1.6	%	0.9		0.1	%
Litigation settlement	—		—	%	—		—	%	—		—	%	(1.3)		(0.1)	%
Total related to Cost of Revenues and Operating Expenses	60.7		14.9	%	39.2		13.7	%	160.2		14.9	%	69.8		8.8	%
Non-GAAP measures	$	85.5	21.0	%	$	47.7	16.7	%	$	204.0	19.0	%	$	112.0	14.1	%


	Three Months Ended								Nine Months Ended
	March 28, 2026				March 29, 2025				March 28, 2026				March 29, 2025
	Net Income		Diluted EPS		Net Income		Diluted EPS		Net (Loss) Income		Diluted EPS		Net Income		Diluted EPS
GAAP measures	$	6.4	$	0.03	$	19.5	$	0.09	$	(63.1)	$	(0.28)	$	26.8	$	0.12
Items reconciling GAAP Net Income (Loss) and EPS to Non-GAAP Net Income and EPS:
Stock-based compensation	13.9		0.06		14.1		0.06		41.2		0.17		40.5		0.18
Change in fair value of contingent liability	2.6		0.01		2.5		0.01		24.3		0.11		(4.9)		(0.02)
Acquisition and integration related charges	0.7		—		13.3		0.06		12.4		0.05		16.7		0.08
Other charges unrelated to core operating performance(1)	4.9		0.02		0.6		—		11.7		0.05		0.2		—
Amortization of acquisition related inventory step-up	0.9		—		1.7		0.01		6.1		0.03		1.7		0.01
Amortization of intangibles	20.4		0.08		7.3		0.03		47.6		0.20		16.0		0.07
Restructuring and related charges (benefits)	17.3		0.07		(0.3)		—		16.9		0.07		0.9		—
Litigation settlement	—		—		—		—		—		—		(1.3)		(0.01)
Non-cash interest expense and other expense(2)	2.4		0.01		1.3		0.01		46.6		0.20		3.5		0.02

(Benefit from) provision for income taxes	(1.9)		(0.01)		(26.1)		(0.12)		8.5		0.04		(24.4)		(0.11)
Total related to Net Income and EPS	61.2		0.24		14.4		0.06		215.3		0.92		48.9		0.22
Non-GAAP measures	$	67.6	$	0.27	$	33.9	$	0.15	$	152.2	$	0.64	$	75.7	$	0.34
Shares used in per share calculation for Non-GAAP EPS			249.5				226.9				236.9				225.2

(1)Included in the three months ended March 28, 2026 are charges of $3.9 million related to the write off of property, plant and equipment, $0.3 million of accelerated depreciation and other charges unrelated to core operating performance. In addition, included in the nine months ended March 28, 2026 are $3.5 million of losses on disposal of long-lived assets, $2.1 million charge for restoration services for a VIAVI facility impacted by a fire and other charges unrelated to core operating performance. Included in the nine months ended March 29, 2025 is a gain of $0.9 million on the sale of assets previously classified as held for sale and other charges unrelated to core operating performance.

(2)The Company incurred losses of $3.7 million and $46.2 million for the three and nine months ended March 28, 2026, respectively, in connection with the extinguishment of certain 1.625% Senior Convertible Notes and prepayments of the Term Loan B.

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Use of Non-GAAP (Adjusted) Financial Measures

The Company provides non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP EPS financial measures as supplemental information regarding the Company’s operational performance and believes providing this additional information allows investors to see Company results through the eyes of management, to evaluate more clearly and consistently the Company’s core operational performance and expenses and evaluate the efficacy of the methodology used by management to measure such performance. The Company uses the measures disclosed in this Report to evaluate the Company’s historical and prospective financial performance, as well as its performance relative to its competitors. Specifically, management uses these items to further its own understanding of the Company’s core operating performance, which the Company believes represents its performance in the ordinary, ongoing and customary course of its operations. Accordingly, management excludes from core operating performance items such as those relating to certain purchase price accounting adjustments, amortization of acquisition related intangibles, amortization expense related to acquisition related inventory step-up, stock-based compensation, legal settlements, restructuring, changes in fair value of contingent consideration liabilities, certain investing and acquisition related expenses and other activities and income tax expenses or benefits that management believes are not reflective of such ordinary, ongoing and core operating activities. The non-GAAP adjustments are outlined below.

Cost of revenues, costs of research and development and costs of selling, general and administrative: The Company’s GAAP presentation of gross margin and operating expenses may include (i) additional depreciation and amortization from changes in estimated useful life and the write-down of certain property, plant and equipment and intangibles, (ii) charges such as severance, benefits and outplacement costs related to restructuring plans with a specific and defined term, (iii) costs for facilities not required for ongoing operations, and costs related to the relocation of certain equipment from these facilities and/or contract manufacturer facilities, (iv) stock-based compensation, (v) amortization expense related to acquired intangibles, (vi) amortization expense related to acquisition related inventory step-up, (vii) changes in fair value of contingent consideration liabilities, (viii) acquisition related transaction and integration costs related to acquired entities, (ix) significant legal settlements and other contingencies and (x) other charges unrelated to our core operating performance comprised mainly of other costs and contingencies unrelated to current and future operations, including transformational initiatives such as the implementation of simplified automated processes, site consolidations and reorganizations. The Company excludes these items in calculating non-GAAP operating margin, non-GAAP net income and non-GAAP EPS.

Non-cash interest expense and other expense: The Company excludes certain expenses, including loss on debt extinguishment, accretion of debt discount, and other non-cash activities that management believes are not reflective of such ordinary, ongoing and core operating activities, when calculating non-GAAP net income and non-GAAP EPS.

Income tax expense or benefit: The Company excludes certain non-cash tax expense or benefit items, such as (i) the utilization of net operating losses (NOLs) where valuation allowances were released, (ii) intra-period tax allocation benefit and (iii) the tax effect for amortization of non-tax deductible intangible assets, in calculating non-GAAP net income and non-GAAP EPS.

Non-GAAP financial measures are not in accordance with, preferable to, or an alternative for, generally accepted accounting principles in the United States. The GAAP measure most directly comparable to non-GAAP operating income is operating income. The GAAP measure most directly comparable to non-GAAP operating margin is operating margin. The GAAP measure most directly comparable to non-GAAP net income is net income. The GAAP measure most directly comparable to non-GAAP EPS is earnings per share.

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RESULTS OF OPERATIONS

The results of operations for the current period are not necessarily indicative of results to be expected for future periods. The following table summarizes selected Consolidated Statements of Operations items (in millions):


	Three Months Ended										Nine Months Ended
	March 28, 2026			March 29, 2025			Change		Percent Change		March 28, 2026			March 29, 2025			Change		Percent Change
Segment net revenue:
NSE	$	321.5		$	208.2		$	113.3	54.4	%	$	829.0		$	567.5		$	261.5	46.1	%
OSP	85.3			76.6			8.7		11.4	%	246.2			226.3			19.9		8.8	%
Total net revenue	$	406.8		$	284.8		$	122.0	42.8	%	$	1,075.2		$	793.8		$	281.4	35.4	%

Amortization of acquired technologies	$	13.0		$	6.1		$	6.9	113.1	%	$	32.4		$	12.7		$	19.7	155.1	%
Percentage of net revenue	3.2		%	2.1		%					3.0		%	1.6		%

Gross profit	$	234.1		$	160.7		$	73.4	45.7	%	$	613.7		$	457.6		$	156.1	34.1	%
Gross margin	57.5		%	56.4		%					57.1		%	57.6		%

Research and development	$	71.0		$	50.0		$	21.0	42.0	%	$	192.9		$	151.5		$	41.4	27.3	%
Percentage of net revenue	17.5		%	17.6		%					17.9		%	19.1

VIAVI SOLUTIONS INC. 10-Q