Q122 Earnings Announcement

VIAVI ANNOUNCES FIRST QUARTER FISCAL 2022 RESULTS

First Quarter

• Net revenue of $326.8 million, up $42.1 million or 14.8% year-over-year
• GAAP operating margin of 14.4%, up 340 bps year-over-year
• Non-GAAPoperating margin of 22.7%, up 140 bps year-over-year
• GAAP EPS of $(0.24), down $0.32 or (400.0)% year-over-year
• Non-GAAPEPS of $0.24, up $0.03 or 14.3% year-over-year

Scottsdale, Arizona, November 4, 2021 - VIAVI (NASDAQ: VIAV) today reported results for its first fiscal quarter ended October 2, 2021.

Firstquarter of fiscal 2022 net revenue was $326.8 million. GAAP net loss was $(54.8) million, or $(0.24) per share. Non - GAAP net income was $58.2 million, or $0.24 per share.

Fourthquarter of fiscal 2021 net revenue was $310.9 million. GAAP net income was $3.3 million or $0.01 per share. Non- GAAP net income was $52.5 million, or $0.22 per share.

Firstquarter of fiscal 2021 net revenue was $284.7 million. GAAP net income was $19.7 million, or $0.08 per share. Non- GAAP net income was $48.3 million, or $0.21 per share.

"In Q1, VIAVI delivered strong results despite supply chain challenges, achieving record revenue and non-GAAP profitability. End market strength came from Fiber, Wireless and Cable products in NSE and robust demand for Anti- Counterfeiting and 3D Sensing products in OSP," said Oleg Khaykin, VIAVI's President and Chief Executive Officer. "As we look ahead, we expect the strong momentum in NSE to carry over into 2022."

Khaykin added, "In Q1, we also completed a $400 million high yield 2029 note offering at an attractive rate of 3.75% interest and retired about 40% of the convertible notes. This allows us to optimize our capital structure to provide financial flexibility to execute on our growth objectives namely, Wireless, Fiber, 3D Sensing and potential inorganic synergistic assets."

Financial Overview:

The tables below (in millions, except percentage, and per share data) provide comparisons of quarterly results to prior periods, including sequential quarterly and year-over-year changes. A full reconciliation between the GAAP and non-GAAP measures included in the tables is contained in this release under the section titled "Use of Non-GAAP (Adjusted) Financial Measures."

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First Quarter Ended October 2, 2021

											GAAP Results
		Q1		Q4			Q1	Change
		FY 2022		FY 2021			FY 2021	Q/Q	Y/Y
Net revenue	$	326.8				$	310.9			$	284.7			5.1	%			14.8	%
Gross margin		59.7 %				58.8 %			59.5 %		90 bps	20 bps
Operating margin		14.4	%				10.5	%			11.0	%		390 bps			340 bps
Income from operations		46.9					32.7				31.3			43.4 %			49.8 %
Net income (loss) per share		(0.24)					0.01				0.08			(2,500.0)	%			(400.0)	%
										Non-GAAP Results
		Q1		Q4			Q1	Change
		FY 2022		FY 2021			FY 2021	Q/Q	Y/Y
Non-GAAP gross margin		62.6	%				62.0	%			62.8	%		60 bps			(20) bps
Non-GAAP operating margin		22.7 %				20.8 %			21.3 %		190 bps	140 bps
Non-GAAP income from operations		74.3					64.7				60.6			14.8	%			22.6	%
Non-GAAP net earnings per share		0.24					0.22				0.21			9.1 %			14.3 %

									Net Revenue by Segment
		Q1			% of Net			Q4		Q1	Change
		FY 2022			revenue			FY 2021		FY 2021	Q/Q	Y/Y
Network Enablement	$	204.9			62.7	%		$	212.7			$	162.1		(3.7)	%			26.4	%
Service Enablement		23.0	7.0 %			23.8				21.4		(3.4)%			7.5 %
Optical Security and Performance Products		98.9			30.3	%			74.4				101.2		32.9	%			(2.3)	%
Total	$	326.8			100.0 %		$	310.9			$	284.7		5.1 %			14.8 %

• Americas, Asia-Pacific and EMEA customers represented 37.2%, 38.6% and 24.2%, respectively, of total net revenue for the quarter ended October 2, 2021.
• As of October 2, 2021, the Company held $921.7 million in total cash, short-term restricted cash and short-term investments.
• As of October 2, 2021, the Company had $278.8 million aggregate principal amount of 1.00% Senior Convertible Notes, $131.2 million aggregate principal amount of 1.75% Senior Convertible Notes and $400 million aggregate principal amount of 3.75% Senior Notes with a total net carrying value of $800.7 million classified as long-term debt.
• During the fiscal quarter ended October 2, 2021, the Company generated $53.4 million of cash from operations.

ASU 2020-06

On July 4, 2021, VIAVI adopted Accounting Standards Update 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for convertible instruments with characteristics of liability and equity. The Company adopted the standard under the full retrospective method, which requires the Company to restate each prior period presented in conformity with the new guidance. As a result of adopting the new standard, the permanent equity components of the Company's 1.00% and 1.75% Senior Convertible Notes were reclassified to long-term liability on the Condensed Balance Sheet as of July 3, 2021. The temporary equity related to the Company's 1.00% Senior Convertible Notes was reclassified to short-term debt on the Condensed Balance Sheet as of July 3, 2021. Additionally, the non-cash debt discount amortization is removed from Interest Expense on the Condensed Consolidated Statement of Operations for the three months ended July 3, 2021. The Condensed Balance Sheets and Condensed Consolidated Statements of Operations herein are presented as adjusted for the new standard.

Business Outlook for the Second Quarter of Fiscal 2022

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For the second quarter of fiscal 2022 ending January 1, 2022, the Company expects net revenue to be between $296 million to $310 million and non-GAAP earnings per share to be between $0.18 to $0.20.

With respect to our expectations above, the Company has not reconciled non-GAAP net income per share to GAAP net income (loss) per share in this press release because it is unable to provide a meaningful or accurate estimate of certain reconciling items described in the "Use of Non-GAAP (Adjusted) Financial Measures" section below and the information is not available without unreasonable effort as a result of the inherent difficulty of forecasting the timing and/or amounts of certain items, including certain charges related to restructuring, acquisition, integration and related charges. In addition, the Company believes such reconciliations would imply a degree of precision that may be confusing or misleading to investors.

Conference Call

The Company will discuss these results and other related matters at 1:30 p.m. Pacific Time on November 4, 2021 in a live webcast, which will also be archived for replay on the Company's website at https://investor.viavisolutions.com. The Company will post supplementary slides outlining the Company's latest financial results on https://investor.viavisolutions.com under the "Quarterly Results" section concurrently with this earnings press release. This press release is being furnished as a Current Report on Form 8-K with the Securities and Exchange Commission, and will be available at www.sec.gov.

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About VIAVI Solutions

VIAVI (NASDAQ: VIAV) is a global provider of network test, monitoring and assurance solutions for communications service providers, enterprises, network equipment manufacturers, government and avionics. We help these customers harness the power of instruments, automation, intelligence and virtualization to Command the network. VIAVI is also a leader in light management solutions for 3D sensing, anti-counterfeiting, consumer electronics, industrial, automotive and defense applications. Learn more about VIAVI at https://www.viavisolutions.com. Follow us on VIAVI Perspectives, LinkedIn, Twitter, YouTube and Facebook.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include any expectation, anticipation or guidance as to future financial performance, including future revenue, gross margin, operating expense, operating margin, profitability targets, cash flow and other financial metrics, as well as the impact and duration of certain trends and market position and conditions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. In particular, the Company's ability to predict future financial performance continues to be difficult due to, among other things: (a) continuing general limited visibility across many of our product lines; (b) quarter-over-quarter product mix fluctuations, which can materially impact profitability measures due to the broad gross margin ranges across our portfolio;

1. consolidations in our customer base; (d) unforeseen changes in the demand for current and new products, technologies, services, delays or unforeseen events in the roll-out of new industry platforms such as 5G or evolving technology such as 3D sensing and customer purchasing delays as they assess or transition to such new technologies and/or architectures, all of which limit near-term demand visibility, and could negatively impact potential revenue; (e) continued decline of average selling prices across our businesses; (f) notable seasonality and a significant level of in-quarterbook-and-ship business; (g) various product and manufacturing transfers, site consolidations, product discontinuances and restructuring and workforce reduction plans; (h) challenges integrating the businesses the Company has acquired and realizing all of the expected benefits and savings; (i) the ability of our suppliers and contract manufacturers to meet production and delivery requirements to our forecasted demand; (j) potential disruptions or delays to our manufacturing and operations due to natural disasters such as the recent wildfires in Northern California and related blackouts and power outages in the region; (k) the uncertain and ongoing impact to our supply chain of tariffs, sanctions and other trade measures imposed by domestic and foreign governments and the possibility of escalation of "trade wars" and retaliatory measures between nations; (l) the impact of infectious disease outbreaks, epidemics, and pandemics including the ongoing effects of the COVID-19 global pandemic on our financial results, revenues, customer demand, business operations and manufacturing and on the business operations of our customers, contract manufacturers and suppliers; and

1. inherent uncertainty related to global markets, including recessions and tightening liquidity and the effect of such markets on demand for our products. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. For more information on these risks, please refer to the "Risk Factors" section included in the Company's Annual Report on Form 10-K for the fiscal year ended July 3, 2021 filed with the Securities and Exchange Commission. The forward-looking statements contained in this press release are made as of the date thereof and the Company assumes no obligation to update such statements.

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Contact Information

Investors:

Bill Ong

408-404-4512

[e-mail]

Press:

Amit Malhotra [e-mail]

The following financial tables are presented in accordance with GAAP, unless otherwise specified.

-SELECTED PRELIMINARY FINANCIAL DATA -

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