Viavi : 3Q22 Earnings Announcement

VIAVI ANNOUNCES THIRD QUARTER FISCAL 2022 RESULTS

Third Quarter

• • Net revenue of $315.5 million, up $12.1 million or 4.0% year-over-year

• • GAAP operating margin of 12.9%, up 110 bps year-over-year

• • Non-GAAP operating margin of 21.5%, up 130 bps year-over-year

• • GAAP EPS of $0.08, up $0.01 or 14.3% year-over-year

• • Non-GAAP EPS of $0.22, up $0.04 or 22.2% year-over-year

Scottsdale, Arizona, May 3, 2022 - VIAVI (NASDAQ: VIAV) today reported results for its third fiscal quarter ended April 2, 2022.

Third quarter of fiscal 2022 net revenue was $315.5 million. GAAP net income was $19.2 million, or $0.08 per share. Non-GAAP net income was $52.0 million, or $0.22 per share.

Second quarter of fiscal 2022 net revenue was $314.8 million. GAAP net income was $34.6 million or $0.14 per share. Non-GAAP net income was $59.3 million, or $0.24 per share.

Third quarter of fiscal 2021 net revenue was $303.4 million. GAAP net income was $17.2 million, or $0.07 per share. Non-GAAP net income was $42.3 million, or $0.18 per share.

"In fiscal Q3, VIAVI achieved new highs in revenue and non-GAAP operating profit for a March quarter. Business strength was led by Fiber and Wireless products with Anti-Counterfeiting and 3D Sensing products demand recovering from the December quarter," said Oleg Khaykin, VIAVI's President and Chief Executive Officer. "Revenue came in at $315.5 million, up 4.0% year-over-year, exceeding our guidance range of $301 to $315 million."

Khaykin added, "As we look ahead, we expect fiscal 2022 to be another record year for revenue and profitability. We also continue to execute well on our plan to improve our capital structure to enable us to achieve financial flexibility. During fiscal Q3, we redeemed an additional $50.0 million in convertible notes which brings us to a cumulative principal retirement of 54% in fiscal 2022."

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."

Third Quarter Ended April 2, 2022

GAAP ResultsQ3

Q2

Q3

FY 2022

FY 2022

FY 2021

Change Q/Q

Y/Y

Net revenue $ 315.5	$ 314.8	$ 303.4	0.2 %	4.0 %
Gross margin 59.2 %	60.5 %	60.0 %	(130) bps	(80) bps
Operating margin 12.9 %	15.7 %	11.8 %	(280) bps	110 bps
Income from operations 40.8	49.3	35.9	(17.2)%	13.6 %
Net income per share 0.08	0.14	0.07	(42.9)%	14.3 %

Non-GAAP Results

Q3

Q2

Q3

FY 2022

FY 2022

FY 2021

Change Q/Q

Y/Y

Non-GAAP gross margin 62.0 %	63.2 %	63.1 %	(120) bps	(110) bps
Non-GAAP operating margin 21.5 %	23.3 %	20.2 %	(180) bps	130 bps
Non-GAAP income from operations 67.7	73.3	61.4	(7.6)%	10.3 %
Non-GAAP net earnings per share 0.22	0.24	0.18	(8.3)%	22.2 %

Net Revenue by SegmentQ3

Q2

Q3

FY 2022

FY 2022

FY 2021

Change Q/Q

Y/Y

Network Enablement	$ 204.3	$ 214.4	$ 190.9	(4.7)%	7.0 %
Service Enablement	26.5	29.8	20.3	(11.1) %	30.5 %
Optical Security and Performance Products	84.7	70.6	92.2	20.0 %	(8.1)%
Total	$ 315.5	$ 314.8	$ 303.4	0.2 %	4.0 %

• • Americas, Asia-Pacific and EMEA customers represented 34.5%, 36.3% and 29.2%, respectively, of total net revenue for the quarter ended April 2, 2022.

• • As of April 2, 2022, the Company held $596.0 million in total cash, short-term restricted cash and short-term investments.

• • As of April 2, 2022, the Company had $227.0 million aggregate principal amount of 1.00% Senior Convertible Notes, $87.4 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 $706.4 million classified as long-term debt.

• • During the fiscal quarter ended April 2, 2022, the Company generated $28.9 million of cash from operations.

Business Outlook for the Fourth Quarter of Fiscal 2022

For the fourth quarter of fiscal 2022 ending July 2, 2022, the Company expects net revenue to be between $315 million to $329 million and non-GAAP earnings per share to be between $0.22 to $0.24.

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 May 3, 2022 in a live webcast, which will also be archived for replay on the Company's website athttps://investor.viavisolutions.com. The Company will post supplementary slides outlining the Company's latest financial results onhttps://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 atwww.sec.gov.

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 athttps://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; (c) 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-quarter book-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) supply chain and materials constraints and 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 climate conditions and natural disasters in the regions where we operate, such as wildfires, drought conditions and related water shortages in Arizona, as well as wildfires in Northern California and related blackouts and power outages in that region; (k) the uncertain and ongoing impact to our supply chain of military conflicts, such as the escalating conflict between Russia and Ukraine, tariffs, sanctions and other trade measures imposed by domestic and foreign governments and the possibility of escalation of "trade wars," cyber-attacks, and retaliatory measures; (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 (m) inherent uncertainty related to global markets, including inflationary pressures, 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.

Contact Information

Investors:

Sagar Hebbar

408-404-4507

[e-mail]

Press:

Amit Malhotra

202-341-8624

[e-mail]

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

-SELECTED PRELIMINARY FINANCIAL DATA -

VIAVI SOLUTIONS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

(unaudited) PRELIMINARY

Three Months Ended

Nine Months EndedApril 2, 2022

April 3, 2021

April 2, 2022

April 3, 2021

Net revenue $ 315.5	$ 303.4	$ 957.1	$ 888.0
Cost of revenues 121.2	113.1	362.0	331.6
Amortization of acquired technologies 7.4	8.3	22.7	24.9
Gross profit 186.9	182.0	572.4	531.5
Operating expenses:
Research and development 54.9	52.1	159.0	150.9
Selling, general and administrative 89.0	86.1	269.0	247.0
Amortization of other intangibles 2.2	8.3	7.5	24.9
Restructuring and related benefits -	(0.4)	(0.1)	(0.8)
Total operating expenses 146.1	146.1	435.4	422.0
Income from operations 40.8	35.9	137.0	109.5
Interest income and other income (expense), net (5.8)	(0.9)	(95.6)	0.8
Interest expense (6.4)	(3.6)	(17.1)	(10.8)
Income before income taxes 28.6	31.4	24.3	99.5
Provision for income taxes 9.4	14.2	25.3	35.3
Net income (loss) $ 19.2	$ 17.2	$ (1.0)	$ 64.2
Net income (loss) per share:
Basic $ 0.08	$ 0.08	$ -	$ 0.28
Diluted $ 0.08	$ 0.07	$ -	$ 0.27
Shares used in per share calculations:
Basic 229.2	228.7	232.1	228.8
Diluted 236.8	240.2	232.1	234.4

The preliminary financial statements are estimated based on our current information.