Viavi Solutions Inc. (VIAV) Business Profile

What it does

Viavi Solutions makes equipment, software and optical products used to test, monitor and protect communications and other infrastructure. Its customers include data center operators, telecommunications providers, equipment manufacturers, governments and military organizations. Oleg Khaykin is its president and chief executive officer.

The Network and Service Enablement segment, or NSE, supplies tools for designing, building and maintaining networks. Its optical and Ethernet equipment tests components and network equipment used in data centers. Fiber instruments help customers inspect, activate, maintain and monitor broadband networks. Viavi also sells wireless testing hardware and software, alongside services that allow customers to test wireless infrastructure.

NSE serves aerospace and defense customers with communications and avionics test equipment. It also provides resilient positioning, navigation and timing products intended to operate when satellite signals are disrupted. Other products monitor network performance, automate network operations and test security controls.

The Optical Security and Performance Products segment, or OSP, makes optical coatings and engineered materials. Its color-shifting pigments go into inks used to protect banknotes and other documents against counterfeiting. Optical filters serve applications including depth-sensing cameras, industrial instruments and automotive sensors. OSP also makes spectrometers, which analyze materials using light, and coatings for aerospace and government applications.

How it makes money

Viavi generates revenue through NSE and OSP. NSE sells instruments and systems used in laboratories, production facilities and the field, as well as software and services for testing and managing networks. OSP designs, manufactures and sells security pigments, optical filters, coatings and instruments for customers that incorporate them into applications or use them in their operations.

Fiscal 2026 net revenue was $1.5 billion; first-quarter fiscal 2027 net revenue was $469.3 million.

Within NSE, high-speed optical and Ethernet products help customers test network equipment, integrated circuits and modules. Fiber products support activities ranging from initial construction and inspection to troubleshooting and ongoing monitoring. Wireless offerings combine hardware and application software with Lab-as-a-Service and Test-as-a-Service. NSE also sells equipment for aerospace communications and avionics, resilient positioning and timing, network security testing, and network performance monitoring.

OSP’s banknote products include engineered pigments formulated into security inks. Its optical filters are used in depth sensing, thermal imaging, spectroscopy and automotive sensing. Other offerings include near-infrared spectrometers and custom optical coatings. OSP works with customers during product design, qualification and production ramp, while NSE sells directly and through distributors and partners.

Demand varies by product and season. NSE revenue is typically higher in the second and fourth fiscal quarters, while Viavi expects OSP revenue to be seasonally higher in the first and second fiscal quarters because of its exposure to consumer products, including smartphone 3D sensing. Orders may be shipped in the same quarter they are received, and delivery schedules or orders can change.

Customers and how it sells

NSE sells to telecommunications and data communications providers, semiconductor and network equipment vendors, cloud and data center operators, enterprises, utilities, government agencies and the armed forces. Named customers include Advanced Micro Devices, AT&T, Cisco, Ericsson, Nokia and Verizon. OSP customers include SICPA, Lockheed Martin and Seiko Epson.

Viavi has a strategic alliance with SICPA to market banknote anti-counterfeiting products worldwide. Its optical security technologies are deployed on the banknotes of more than 100 countries. A limited number of customers may account for a substantial portion of revenue in a given period, and results can be affected by the timing and size of large orders, including government orders.

NSE has a dedicated sales force organized by market and also uses a worldwide channel community. OSP sells directly, with applications engineers and customer service staff supporting design, qualification and production. It also uses distributors and manufacturers’ representatives for selected products and regions.

Viavi serves customers worldwide and had approximately 4,100 employees across 34 countries as of June 27, 2026. Its own manufacturing facilities were located in the United States, France, Germany, the United Kingdom and China.

Suppliers and costs

Viavi manufactures products at its own facilities and uses suppliers and contract manufacturers for parts, components and finished products. Its contract manufacturing partners have facilities in China and Thailand, where Viavi sources a significant portion of its products and components. The company seeks at least two sources for materials where possible, but some components come from sole or limited sources.

Engineering, manufacturing and dedicated sales and marketing groups operate within each segment, while corporate services provide shared infrastructure and support. Viavi also spends on research and development for new products and on maintaining and improving existing ones. Its engineering work includes making products more economical to manufacture in greater volume.

Component lead times and prices can affect costs; Viavi identifies memory chip shortages as an example. Tariffs and other trade actions may also increase material or product costs. Its fiscal 2026 restructuring plan includes workforce reductions, facilities changes and asset write-offs. Viavi estimates approximately $30.0 million in annualized gross cost savings when the plan is completed, excluding one-time charges.

Competitive position

NSE competes with Anritsu, EXFO, Keysight Technologies, NetScout Systems, Riverbed Technology, Rohde & Schwarz and VeEX across its network and service enablement products. Viavi faces multiple competitors for each product family. Its portfolio includes instruments, monitoring systems and software serving laboratory, production and field environments.

OSP competes with Giesecke & Devrient and Crane NXT in anti-counterfeiting technologies; GNMI Group and FYOTEC in special-effect pigments; Materion, Zhejiang Crystal-Optech and Platinum Optics Technology in optical coatings; and Coherent in passive and other optical components.

Viavi owns patents, trade secrets and trademarks across its products. Its patented Low Angle Shift filter technology is used in optical sensing, while its anti-counterfeiting materials produce visible effects intended to be difficult to reproduce. Viavi also engages customers early in product design and supports them through development and volume production.

Our reading: The breadth of the NSE portfolio and its presence across customers’ design, production and field work provide a competitive advantage, but multiple rivals compete in each product family.

Our reading: OSP’s patents, optical manufacturing capabilities and banknote relationships provide a competitive advantage, although the market has named competitors and the SICPA alliance creates dependence on a partner.

Growth opportunities

Viavi’s growth strategy includes investing in data center testing, next-generation wireless networks, network automation and security, and extending its technologies into aerospace, defense and other optical applications. Fiscal 2026 NSE revenue growth was driven in part by data center demand, the acquired Spirent high-speed Ethernet and channel-emulation business, and aerospace and defense products. OSP performance improved with demand for anti-counterfeiting, 3D sensing and other products.

Viavi has begun shipping optical test products into semiconductor packaging and test, beyond its traditional optical module testing business. The company believes that segment could become an opportunity north of $100 million for Viavi in a couple years. It is also seeing demand from fiber-optic and connector manufacturers as data centers use more fiber and more complex connections.

In aerospace and defense, demand for positioning, navigation and timing products drove growth in the first quarter of fiscal 2027. The U.S. Army’s Threat Systems Management Office selected Viavi’s TRx system to create electromagnetic test environments supporting drone, counter-drone and interceptor development. Viavi sees potential for that selection to generate growth over several years.

Viavi also sees early signs of service providers replacing equipment purchased in 2020 through 2022. It expects data center and aerospace and defense demand to support NSE, while describing current service-provider spending on wireless products as weak.

Structural risks

• Customer concentration and timing: A limited number of customers may account for a substantial portion of revenue in a period. The timing and size of large orders, including government orders, can affect results. A material reduction in sales to SICPA or loss of that relationship could harm the business.

• Customer spending and seasonality: Telecom carrier and cable operator capital and research spending are uncertain, particularly for NSE. Demand for currency products is cyclical, and OSP is exposed to seasonal consumer electronics demand.

• Supply and trade: Some components have sole or limited sources. Longer component lead times, shortages, tariffs, export restrictions and other trade actions can increase costs or disrupt the ability to supply products.

• Competition and product mix: Competitive pricing pressure, concentrated customer bases and product commoditization can affect selling prices and margins. OSP operating margin may face pressure from a higher mix of 3D sensing products and increased operating expenses.

• Acquisitions and restructuring: Acquisitions can create integration challenges, additional expenses and difficulties realizing expected growth or savings. Restructuring activities could also adversely affect operations and results.

Bottom line

Our reading

Our reading: Viavi combines a network testing business tied to infrastructure investment with an optical products business serving banknotes, electronics and other markets. [item1]

Our reading: Data center testing and positioning products provide routes for growth, while customer spending cycles, product mix and supply constraints can affect results. [item7] [call_prepared] [item1a]

Our reading: Technical capabilities and customer relationships support its competitive position, but competition and reliance on SICPA limit the protection they provide. [item1]