VIAVI Solutions (NASDAQ: VIAV) reported fiscal Q4 2026 revenue of $443.1 million, up 52.5% year over year, while GAAP diluted EPS increased to $0.13 from $0.04. Network and Service Enablement accounted for nearly all of the revenue increase, contributing to wider margins, higher operating profit, and $66.7 million in quarterly operating cash flow.
Core earnings data
Revenue growth translated into faster profit growth. GAAP gross margin expanded by 280 basis points, while GAAP operating margin rose by 850 basis points as operating income increased to $61.3 million.
Non-GAAP results also improved, although the difference between GAAP and non-GAAP earnings remained material. The following figures cover the quarter ended June 27, 2026.
| Metric | Fiscal Q4 2026 | Fiscal Q4 2025 | Year-over-year change |
|---|---|---|---|
| Net revenue | $443.1 million | $290.5 million | +52.5% |
| GAAP gross profit and margin | $261.7 million; 59.1% | $163.5 million; 56.3% | Approximately +60.1%; margin +280 bps |
| GAAP operating income and margin | $61.3 million; 13.8% | $15.3 million; 5.3% | +300.7%; margin +850 bps |
| GAAP net income | $32.7 million | $8.0 million | +308.8% |
| GAAP diluted EPS | $0.13 | $0.04 | +225.0% |
| Non-GAAP operating income and margin | $106.4 million; 24.0% | $41.9 million; 14.4% | +153.9%; margin +960 bps |
| Non-GAAP net income | $89.1 million | $29.7 million | +200.0% |
| Non-GAAP diluted EPS | $0.34 | $0.13 | +161.5% |
| Adjusted EBITDA | $116.3 million | $51.4 million | Approximately +126.3% |
| Operating cash flow | $66.7 million | Not provided | Not available |
The results were released on August 5, 2026, and remain preliminary and unaudited pending the filing of VIAVI’s fiscal 2026 Form 10-K.
Network and Service Enablement drove the quarter
Network and Service Enablement generated $353.9 million in revenue, up 69.2%, and supplied $144.8 million—or approximately 95%—of VIAVI’s total year-over-year revenue increase. Its operating margin rose to 20.0% from 4.6%, making the segment the principal driver of consolidated operating leverage.
Optical Security and Performance Products recorded more moderate revenue growth of 9.6%. Its 40.0% operating margin remained well above the Network and Service Enablement margin but changed only slightly from the prior year.
| Segment | Fiscal Q4 2026 revenue | Fiscal Q4 2025 revenue | Revenue growth | Operating margin |
|---|---|---|---|---|
| Network and Service Enablement | $353.9 million | $209.1 million | +69.2% | 20.0% vs. 4.6% |
| Optical Security and Performance Products | $89.2 million | $81.4 million | +9.6% | 40.0% vs. 39.6% |
Management attributed fiscal 2026 growth to expansion across multiple end markets, particularly the data center ecosystem and aerospace and defense markets.
Network-led scale improved margins, but adjustments widened the GAAP gap
The sharp improvement in Network and Service Enablement profitability helped lift consolidated GAAP operating margin to 13.8%. However, reported “Other Items” reduced consolidated operating income by $45.1 million, compared with a $26.6 million reduction in the prior-year quarter.
That $45.1 million also represents the quarter’s difference between GAAP operating income of $61.3 million and non-GAAP operating income of $106.4 million. The largest adjustments were $20.3 million of intangible amortization, $14.2 million of stock-based compensation, and an $8.7 million change in the fair value of contingent consideration.
At the net-income level, the GAAP-to-non-GAAP adjustment totaled $56.4 million, up from $21.7 million a year earlier. In addition to operating adjustments, VIAVI excluded $10.4 million of non-cash interest and other expense. The company incurred a $10.5 million quarterly loss related to extinguishing certain convertible notes and its Term Loan B.
The full-year figures show why this distinction remains important. Fiscal 2026 revenue increased 40.0% to $1.5183 billion, but VIAVI recorded a GAAP net loss of $30.4 million, compared with net income of $34.8 million in fiscal 2025. Full-year interest and other expense of $41.4 million, interest expense of $47.4 million, and a $47.5 million tax provision weighed on GAAP net results, while non-GAAP net income reached $243.8 million.
Cash flow and balance sheet
VIAVI generated $66.7 million of operating cash flow during the fourth quarter and $113.9 million for the full fiscal year. As of June 27, it held $656.7 million in cash, short-term investments, and short-term restricted cash.
Debt consisted of $250.0 million in 0.625% senior convertible notes and $400.0 million in 3.75% senior notes. Their combined net carrying value was $641.9 million, compared with total principal of $650.0 million. Because VIAVI’s reported liquidity total includes restricted cash, it is not entirely interchangeable with debt.
Accounts receivable increased to $351.3 million from $261.0 million at the prior fiscal year-end, while inventory rose to $155.3 million from $117.9 million. Their conversion into cash will be relevant as the company pursues further sequential growth.
Fiscal Q1 2027 guidance
VIAVI expects revenue and non-GAAP EPS to rise sequentially in the quarter ending October 3, 2026. At the revenue midpoint of $455 million, the outlook implies growth of approximately 2.7% from fiscal Q4.
| Metric | Fiscal Q1 2027 guidance | Fiscal Q4 2026 actual | Implied sequential change |
|---|---|---|---|
| Net revenue | $450 million–$460 million | $443.1 million | Approximately +1.6% to +3.8% |
| Non-GAAP EPS | $0.40–$0.42 | $0.34 | Approximately +17.6% to +23.5% |
The company did not provide a GAAP EPS reconciliation because it could not reasonably forecast the timing and amounts of restructuring, acquisition, integration, and other reconciling items.
Management perspective
President and CEO Oleg Khaykin identified diversification into data center ecosystem and aerospace and defense markets as a key fiscal 2026 growth driver. Management expects this strategy to continue supporting growth over the next several quarters, making the durability of demand in those markets central to the outlook.
Recent insider transactions
The supplied Yahoo Finance data shows 21,920 shares purchased in two insider transactions and 977,469 shares sold in 21 transactions during the past six months, resulting in net sales of 955,549 shares. Total insider holdings were reported at approximately 2.41 million shares.
The detailed records below include the most recent entries with a specified transaction type and value. A May 28 entry for Chief Operating Officer Anthony Michael Petrucci was excluded because neither field was provided.
| Date | Insider and role | Transaction | Ownership | Reported value |
|---|---|---|---|---|
| May 8, 2026 | Oleg Khaykin, CEO | Sale at $51.43–$51.82 per share | Direct | $13,418,882 |
| May 6, 2026 | Oleg Khaykin, CEO | Sale at $54.07 per share | Direct | $1,839,678 |
| May 6, 2026 | Luke Matthew Scrivanich, Officer | Sale at $53.00 per share | Direct | $566,729 |
| May 5, 2026 | Oleg Khaykin, CEO | Sale at $54.61–$54.77 per share | Indirect | $6,818,020 |
| May 5, 2026 | Paul A. McNab, Officer | Sale at $54.96 per share | Direct | $149,876 |
| May 5, 2026 | Douglas Gilstrap, Director | Sale at $55.00 per share | Direct | $550,000 |
| May 4, 2026 | Richard E. Belluzzo, Director | Sale at $53.30 per share | Direct | $2,724,163 |
| May 4, 2026 | Kevin Christopher Siebert, General Counsel | Sale at $54.02 per share | Direct | $445,935 |
| April 29, 2026 | Oleg Khaykin, CEO | Stock gift at $0.00 per share | Direct | $0 |
These records establish the direction and size of the reported transactions but do not, on their own, indicate insiders’ views about VIAVI’s prospects.
Risks investors need to watch
- Dependence on Network and Service Enablement: This segment produced approximately 95% of the quarter’s revenue increase. Slower demand in its data center, communications, aerospace, or defense markets could have an outsized effect on consolidated growth.
- Demand visibility and product mix: VIAVI cited limited visibility, seasonality, substantial in-quarter book-and-ship activity, and wide gross-margin ranges across its portfolio. Mix changes could therefore affect revenue and profitability between quarters.
- Acquisition integration and non-GAAP adjustments: The company continues to integrate acquired operations, including Spirent’s high-speed Ethernet, network security, and channel emulation testing business. Amortization, contingent-consideration changes, and integration costs contributed to a sizable gap between GAAP and non-GAAP results.
- Financing costs: VIAVI incurred $10.4 million of quarterly interest expense and a $10.5 million debt-extinguishment loss. Future refinancing or debt-management actions could continue to affect GAAP earnings and cash deployment.
- Preliminary financial statements: The fiscal 2026 figures may change if VIAVI identifies accounting adjustments before filing its Form 10-K.
Summary
VIAVI’s fiscal Q4 2026 improvement was led by rapid Network and Service Enablement growth and a substantial expansion in that segment’s operating margin. The company converted part of the earnings improvement into operating cash flow and expects additional sequential growth in fiscal Q1 2027, while the durability of end-market demand, acquisition integration, financing costs, and the continuing gap between GAAP and adjusted results remain the main areas to monitor.
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