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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 30, 2024
 OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto

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 classTrading SymbolName 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 filerAccelerated filerNon-accelerated filer
(Do not check if a smaller reporting company)
Smaller reporting companyEmerging 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 27, 2024, the Registrant had 223,238,054 shares of common stock outstanding.


TABLE OF CONTENTSPage

1



PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
VIAVI SOLUTIONS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
 Three Months EndedNine Months Ended
 March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Revenues:
Product revenue$207.3 $205.2 $623.8 $714.4 
Service revenue38.7 42.6 124.6 128.1 
Total net revenue246.0 247.8 748.4 842.5 
Cost of revenues:
Product cost of revenue87.7 81.5 249.1 272.9 
Service cost of revenue16.9 19.4 58.6 58.1 
Amortization of acquired technologies3.5 5.9 10.4 18.7 
Total cost of revenues108.1 106.8 318.1 349.7 
Gross profit137.9 141.0 430.3 492.8 
Operating expenses:
Research and development50.0 50.8 149.4 155.3 
Selling, general and administrative98.2 80.0 250.2 250.2 
Amortization of other intangibles1.5 2.1 5.0 6.5 
Restructuring and related charges (benefits)0.1 10.2 (0.8)10.2 
Total operating expenses149.8 143.1 403.8 422.2 
(Loss) income from operations(11.9)(2.1)26.5 70.6 
Loss on convertible note modification (Note 11) (2.2) (2.2)
Interest and other income, net4.0 1.6 18.0 4.9 
Interest expense(7.7)(6.7)(23.4)(19.0)
(Loss) income before income taxes(15.6)(9.4)21.1 54.3 
Provision for income taxes9.0 6.0 25.2 28.7 
Net (loss) income$(24.6)$(15.4)$(4.1)$25.6 
Net (loss) income per share:
Basic$(0.11)$(0.07)$(0.02)$0.11 
Diluted$(0.11)$(0.07)$(0.02)$0.11 
Shares used in per share calculations:
Basic223.0 224.1 222.5 225.5 
Diluted223.0 224.1 222.5 227.6 
The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.
2

VIAVI SOLUTIONS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in millions)
(unaudited)
Three Months EndedNine Months Ended
March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Net (loss) income$(24.6)$(15.4)$(4.1)$25.6 
Other comprehensive (loss) income:
Net change in cumulative translation adjustment, net of tax(11.8)13.4 (2.5)14.1 
Unrealized holding loss arising during period (0.3) (0.3)
Amortization of net actuarial losses and other pension adjustments
(0.8) (0.9)(0.3)
Net change in accumulated other comprehensive loss(12.6)13.1 (3.4)13.5 
Comprehensive (loss) income$(37.2)$(2.3)$(7.5)$39.1 

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

3

VIAVI SOLUTIONS INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except share and par value data)
(unaudited)
March 30, 2024July 1, 2023
ASSETS 
Current assets:  
Cash and cash equivalents$454.2 $506.5 
Short-term investments28.4 14.6 
Restricted cash3.5 4.5 
Accounts receivable, net212.0 231.2 
Inventories, net103.4 116.1 
Prepayments and other current assets66.1 72.1 
Total current assets867.6 945.0 
Property, plant and equipment, net231.9 243.0 
Goodwill, net453.2 455.2 
Intangibles, net43.0 58.6 
Deferred income taxes87.9 87.0 
Other non-current assets60.4 61.7 
Total assets$1,744.0 $1,850.5 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$42.5 $47.2 
Accrued payroll and related expenses42.1 50.5 
Deferred revenue61.2 78.6 
Accrued expenses35.9 21.2 
Short-term debt  96.2 
Other current liabilities46.1 49.8 
Total current liabilities227.8 343.5 
Long-term debt634.4 629.5 
Other non-current liabilities176.7 186.7 
Stockholders’ equity:
Preferred stock, $0.001 par value; 1 million shares authorized,
no shares issued or outstanding at March 30, 2024 and July 1, 2023
  
Common stock, $0.001 par value; 1 billion shares authorized; 223 million shares at March 30, 2024 and 222 million shares at July 1, 2023, issued and outstanding
0.2 0.2 
Additional paid-in capital70,459.1 70,427.3 
Accumulated deficit(69,614.8)(69,600.7)
Accumulated other comprehensive loss(139.4)(136.0)
Total stockholders’ equity705.1 690.8 
Total liabilities and stockholders’ equity$1,744.0 $1,850.5 
The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.
4

VIAVI SOLUTIONS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
Nine Months Ended
March 30, 2024April 1, 2023
OPERATING ACTIVITIES:
Net (loss) income$(4.1)$25.6 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation expense29.1 26.4 
Amortization of acquired technologies and other intangibles15.4 25.2 
Stock-based compensation36.6 38.8 
Loss on convertible note modification 2.2 
Amortization of debt issuance costs5.6 2.3 
Net change in fair value of contingent liabilities(7.8)(0.2)
Deferred taxes, net(2.3)4.1 
Restructuring(0.8)10.2 
Gain on legal settlement (6.7)
Other1.7 4.3 
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable17.4 47.6 
Inventories6.7 (20.0)
Other current and non-currents assets3.7 19.0 
Accounts payable(4.1)(13.3)
Income taxes payable2.3 (6.2)
Deferred revenue, current and non-current(15.7)(6.3)
Accrued payroll and related expenses(8.1)(35.1)
Accrued expenses and other current and non-current liabilities14.6 (27.3)
Net cash provided by operating activities$90.2 $90.6 
INVESTING ACTIVITIES:
Purchases of short-term investments$(188.3)$ 
Maturities of short-term investments174.2  
Capital expenditures(15.7)(43.7)
Proceeds from the sale of assets2.6 3.5 
Acquisitions, net of cash hold back (64.4)
Purchase price adjustment related to business acquisition (0.7)
Net cash used in investing activities$(27.2)$(105.3)
FINANCING ACTIVITIES:
Proceeds from issuance of debt $ $118.0 
Payment of debt issuance costs (3.9)
Retirement of convertible notes upon maturity(96.4) 
Repurchase and retirement of common stock(10.0)(73.9)
Withholding tax payment on vesting of restricted stock and performance- based awards(11.0)(11.4)
Payment of financing obligations(0.2)(0.1)
Proceeds from employee stock purchase plan6.3 7.9 
Payment of acquisition related contingent considerations and obligations(4.0)(7.3)
Net cash (used in) provided by financing activities$(115.3)$29.3 
Effect of exchange rates on cash, cash equivalents and restricted cash$(0.2)$5.8 
Net (decrease) increase in cash, cash equivalents and restricted cash(52.5)20.4 
Cash, cash equivalents and restricted cash at the beginning of the period (1)
515.6 572.8 
Cash, cash equivalents and restricted cash at the end of the period (2)
$463.1 $593.2 
(1)These amounts include both current and non-current balances of restricted cash totaling $9.1 million and $12.9 million as of July 1, 2023 and July 2, 2022, respectively.
(2)These amounts include both current and non-current balances of restricted cash totaling $8.9 million and $12.6 million as of March 30, 2024 and April 1, 2023, respectively.
The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.
5

VIAVI SOLUTIONS INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in millions)
(unaudited)
Three Months Ended March 30, 2024
Common Stock
SharesAmountAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive LossTotal
Balance at December 30, 2023222.6 $0.2 $70,444.8 $(69,590.2)$(126.8)$728.0 
Net loss— — — (24.6)— (24.6)
Other comprehensive loss— — — — (12.6)(12.6)
Shares issued under employee stock plans, net of tax0.6 — 1.5 — — 1.5 
Stock-based compensation— — 12.8 — — 12.8 
Balance at March 30, 2024223.2 $0.2 $70,459.1 $(69,614.8)$(139.4)$705.1 
Three Months Ended April 1, 2023
Common Stock
Shares
Amount
Additional Paid-In Capital
Accumulated Deficit
Accumulated Other Comprehensive Loss
Total
Balance at December 31, 2022224.8 $0.2 $70,388.8 $(69,545.2)$(156.0)$687.8 
Net loss— — — (15.4)— (15.4)
Other comprehensive income— — — — 13.1 13.1 
Shares issued under employee stock plans, net of tax0.4 — 4.0 — — 4.0 
Stock-based compensation— — 12.7 — — 12.7 
Repurchase of common stock(2.8)— — (30.0)— (30.0)
Convertible note modification (Note 11)— — 10.1 — — 10.1 
Balance at April 1, 2023222.4 $0.2 $70,415.6 $(69,590.6)$(142.9)$682.3 
Nine Months Ended March 30, 2024
Common Stock
Shares
Amount
Additional Paid-In Capital
Accumulated Deficit
Accumulated Other Comprehensive Loss
Total
Balance at July 1, 2023221.5 $0.2 $70,427.3 $(69,600.7)$(136.0)$690.8 
Net loss— — — (4.1)— (4.1)
Other comprehensive loss— — — — (3.4)(3.4)
Shares issued under employee stock plans, net of tax2.7 — (4.8)— — (4.8)
Stock-based compensation— — 36.6 — — 36.6 
Repurchase of common stock(1.0)— — (10.0)— (10.0)
Balance at March 30, 2024223.2 $0.2 $70,459.1 $(69,614.8)$(139.4)$705.1 
6

Nine Months Ended April 1, 2023
Common Stock
Shares
Amount
Additional Paid-In Capital
Accumulated Deficit
Accumulated Other Comprehensive Loss
Total
Balance at July 2, 2022226.4 $0.2 $70,370.2 $(69,542.3)$(156.4)$671.7 
Net income— — — 25.6 — 25.6 
Other comprehensive income— — — — 13.5 13.5 
Shares issued under employee stock plans, net of tax2.3 — (3.5)— — (3.5)
Stock-based compensation— — 38.8 — — 38.8 
Repurchase of common stock(6.3)— — (73.9)— (73.9)
Convertible note modification (Note 11)— — 10.1 — — 10.1 
Balance at April 1, 2023222.4 $0.2 $70,415.6 $(69,590.6)$(142.9)$682.3 
The accompanying Notes to the Consolidated Financial Statements are an integral part of these statements.
7


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 30, 2024 and April 1, 2023 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 July 1, 2023.
There have been no material changes to the Company’s accounting policies during the three and nine months ended March 30, 2024 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 July 1, 2023 on Form 10-K, filed with the SEC on August 17, 2023.
The Consolidated Balance Sheet as of July 1, 2023 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 30, 2024 and April 1, 2023 may not be indicative of results for the fiscal year ending June 29, 2024 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 2024 is a 52-week year ending on June 29, 2024. The Company’s fiscal 2023 was a 52-week year ending on July 1, 2023.
Principles of Consolidation
The Consolidated Financial Statements include the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated.
Reclassification of Prior Period Balances
Certain reclassifications of prior period balances have been made to conform to current presentation. Effective for the first quarter of fiscal 2024, management of certain products moved from the SE segment to the NE segment to better align with operational and go-to-market strategies. As a result, prior period balances have been recast in our operating segment tables for the three and nine months ended April 1, 2023 in “Note 19. Operating Segments and Geographic Information” and NE and SE goodwill balances as of July 1, 2023 in “Note 9. Goodwill.”
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.
8


VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 2. Recently Issued Accounting Pronouncements
SEC Climate Rules

In March 2024, the SEC adopted final rules on the enhancement and standardization of climate-related disclosures for investors. The final rules require disclosure of, among other things, material climate-related risks and their impact; activities to mitigate or adapt to material climate-related risks; governance and oversight of climate-related risks; material climate-related targets or goals and their financial impact; and material Scope 1 and/or Scope 2 greenhouse gas emissions with an accompanying assurance report required following an initial transition period, at a limited assurance level, and then following an additional transition period, at a reasonable assurance level. In addition, the effects of severe weather events and other natural conditions, subject to certain thresholds, and amounts related to carbon offsets and renewable energy credits or certificates are required to be disclosed in the notes to the audited financial statements in certain circumstances.

On April 4, 2024, the SEC voluntarily stayed the implementation of the final rules pending the completion of judicial review of the consolidated challenges to the final rules by the Court of Appeals for the Eighth Circuit. The final rules, as originally issued, would be effective for the Company in various fiscal years, starting with its Annual Report on Form 10-K for fiscal year 2026. Disclosures pursuant to the final rules, as originally issued, would be required prospectively, with information for prior periods required only to the extent it was previously disclosed in an SEC filing. The Company is currently evaluating the impact of the final rules on its Consolidated Financial Statements and disclosures.
Accounting Standards Issued But Not Yet Adopted
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 fiscal years beginning after December 15, 2024 (fiscal 2026 for the Company), with early and retrospective adoption permitted. The Company is evaluating the impact of adopting this new accounting guidance on its Consolidated Financial Statements.

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280), to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. The amendments in this update will require public entities to disclose significant segment expenses included within segment profit and loss that are regularly provided to the Company’s Chief Executive Officer as the Company’s Chief Operating Decision Maker (CODM). This guidance is effective for fiscal years beginning after December 15, 2023 (fiscal 2025 for the Company), and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted and will be applied retrospectively to all prior periods presented in the financial statements. The Company is evaluating the impact of adopting this new accounting guidance on its Consolidated 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. Early adoption is prohibited. As we are currently subject to these SEC requirements, this ASU is not expected to have a material impact on our Consolidated Financial Statements or related disclosures.

We reviewed all other accounting pronouncements issued during the nine months ended March 30, 2024 and concluded that they were not applicable to the Company.
9


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 (loss) income per share (in millions, except per share data):
 Three Months EndedNine Months Ended
 March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Numerator:  
Net (loss) income$(24.6)$(15.4)$(4.1)$25.6 
Denominator:
Weighted-average shares outstanding:
Basic 223.0 224.1 222.5 225.5 
Shares issuable assuming conversion of convertible notes (1)
   0.4 
Effect of dilutive securities from stock-based compensation plans   1.7 
Diluted223.0 224.1 222.5 227.6 
Net (loss) income per share:
Basic$(0.11)$(0.07)$(0.02)$0.11 
Diluted$(0.11)$(0.07)$(0.02)$0.11 
(1)Represents the dilutive impact for the Company’s 1.75% Senior Convertible Notes due 2023 (2023 Notes), the 1.00% Senior Convertible Notes due 2024 (2024 Notes) and the 1.625% Senior Convertible Notes due 2026 (2026 Notes). As of March 30, 2024, the if-converted value is less than the outstanding principal of the 2026 Notes and are therefore anti-dilutive. Refer to “Note 11. Debt” for more details.
The following table sets forth the weighted-average potentially dilutive securities excluded from the computation of the diluted net (loss) income per share because their effect would have been anti-dilutive (in millions):
 Three Months EndedNine Months Ended
 March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Restricted stock units8.4 4.3 4.9 3.6 

10


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 30, 2024, the changes in accumulated other comprehensive loss, net of tax, by component were as follows (in millions):
Unrealized losses on available-for sale investmentsForeign 
currency translation adjustments, net of tax
Change in unrealized components of defined benefit obligations (1)
Total
Beginning balance as of July 1, 2023$(5.3)$(125.4)$(5.3)$(136.0)
Other comprehensive loss before reclassification (2.5)(1.0)(3.5)
Amounts reclassified out of accumulated other comprehensive loss  0.1 0.1 
Net current-period other comprehensive loss (2.5)(0.9)(3.4)
Ending balance as of March 30, 2024$(5.3)$(127.9)$(6.2)$(139.4)
(1)The amount reclassified out of accumulated other comprehensive loss represents the amortization of actuarial gains included as a component of Cost of revenues, Research and development (R&D) and Selling, general and administrative (SG&A) in the Consolidated Statements of Operations, net of reclassification adjustments, for the nine months ended March 30, 2024. There was no tax impact for the nine months ended March 30, 2024. Refer to “Note 17. Employee Pension and Other Benefit Plans” for more details on the computation of net periodic cost for pension plans.
11


VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 5. Acquisitions
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 Position, Navigation and Timing (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 for which future cash payments are dependent on the achievement of certain operational and revenue targets over the course of a three-year period beginning in January 2023. The cash consideration paid at closing included escrow payments of $5.0 million for indemnity holdback and $2.0 million subject to final cash and net working capital adjustments. The acquisition 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. In connection with this acquisition, the Company recorded approximately $48.3 million of goodwill and $30.6 million of developed technology and other intangibles. The acquired developed technology and other intangible assets are being amortized over their estimated useful lives ranging from one to six years.
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 Network Enablement segment. Goodwill is primarily attributable to expected synergies in the acquired technologies that may be leveraged by the Company in future PNT offerings. The goodwill was deductible for U.S. income tax purposes.
The Company has included the financial results of Jackson 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.
Other Acquisitions

On March 29, 2023, April 21, 2023 and June 8, 2023, the Company completed acquisitions accounted for as asset purchases consisting of an aggregate cash paid at closing of $2.9 million and $0.2 million of indemnity holdback. In connection with these acquisitions, the Company recorded developed technology intangibles of $2.5 million which are being amortized over their estimated useful life of five years.

Acquisition-related Contingent Consideration

The following table provides a reconciliation of changes in the fair value of the Company’s earn-out liabilities associated with the Company’s acquisitions for the three and nine months ended March 30, 2024 and April 1, 2023 (in millions):
Three Months EndedNine Months Ended
March 30, 2024April 1, 2023March 30, 2024April 1, 2023
Beginning period balance$10.6 $33.2 $19.7 $2.5 
  Additions to Contingent Consideration   29.4 
  Payments of Contingent Consideration  (6.6)(0.7)(7.1)
Fair value adjustment of earn-out liabilities0.6 (1.9)(7.8)(0.2)
Currency translation adjustment (0.1)  
Ending period balance $11.2 $24.6 $11.2 $24.6 

12


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 30, 2024, and July 1, 2023, the Company had total unbilled receivables of $12.0 million and $13.7 million, respectively.
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 30, 2024
Three Months EndedNine Months Ended
Deferred revenue:
Balance at beginning of period$84.7 $102.0 
Revenue deferrals for new contracts (1)
25.9 70.8 
Revenue recognized during the period (2)
(25.2)(87.4)
Balance at end of period $85.4 $85.4 
(1)Included in these amounts is the impact from foreign currency exchange rate fluctuations.
(2)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.
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 30, 2024, was $252.7 million. The Company expects to recognize approximately 89% 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):
July 1, 2023Charged to Costs and Expenses
Deductions (1)
March 30, 2024
Allowance for credit losses$1.0 $0.9 $(0.4)$1.5 
(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 30, 2024July 1, 2023
Finished goods$46.0 $49.0 
Work in process17.9 17.7 
Raw materials39.5 49.4 
Inventories, net$103.4 $116.1 
13


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 30, 2024July 1, 2023
Refundable income taxes$29.2 $27.6 
Prepayments14.0 16.5 
Advances to contract manufacturers6.1 9.8 
Transaction tax receivables3.4 5.1 
Asset held for sale2.5 2.5 
Fair value of forward contracts1.5 3.5 
Other9.4 7.1 
Prepayments and other current assets$66.1 $72.1 
Other non-current assets
The following table presents the components of other non-current assets (in millions):
March 30, 2024July 1, 2023
Operating right-of-use (ROU) assets (Note 12)$37.7 $40.4 
Long-term restricted cash5.3 4.6 
Deposits2.5 2.3 
Deferred contract cost2.5 2.9 
Debt issuance cost - Revolving Credit Facility2.2 2.8 
Other 10.2 8.7 
Other non-current assets$60.4 $61.7 
Other current liabilities
The following table presents the components of other current liabilities (in millions):
March 30, 2024July 1, 2023
Operating lease liabilities (Note 12)$9.9 $10.1 
Interest payable7.9 5.5 
Income tax payable6.5 4.4 
Transaction tax payable4.3 4.3 
Warranty accrual3.6 4.2 
Fair value of forward contracts3.0 2.4 
Acquisition related holdback and related accruals0.9 4.1 
Restructuring accrual (Note 13)0.8 5.8 
Fair value of contingent consideration (Note 5) 1.1 
Other9.2 7.9 
Other current liabilities$46.1 $49.8 
14


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 30, 2024July 1, 2023
Pension and post-employment benefits$52.9 $53.2 
Operating lease liabilities (Note 12)27.3 29.4 
Long-term deferred revenue24.2 23.4 
Uncertain tax position16.2 15.8 
Financing obligation15.7 15.8 
Deferred tax liability13.5 13.9 
Fair value of contingent consideration (Note 5)11.2 18.6 
Warranty accrual4.2 4.8 
Asset retirement obligations3.6 3.8 
Other7.9 8.0 
Other non-current liabilities$176.7 $186.7 
Note 7. Investments and Forward Contracts
Short-Term Investments
As of March 30, 2024, the Company’s short-term investments of $28.4 million were comprised of 30-day term deposits of $27.0 million and trading securities related to the deferred compensation plan of $1.4 million, of which $1.3 million was invested in equity securities and $0.1 million was invested in debt securities.
As of July 1, 2023, the Company’s short-term investments of $14.6 million were comprised of a 30-day term deposit of $13.1 million and trading securities related to the deferred compensation plan of $1.5 million, of which $1.2 million was invested in equity securities, $0.2 million was invested in money market instruments and $0.1 million was invested in debt 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.
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 30, 2024, 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 $1.5 million and $3.0 million is reflected as Prepayments and other current assets and Other current liabilities on the Consolidated Balance Sheets, respectively. As of July 1, 2023, the fair value of these contracts of $3.5 million and $2.4 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 30, 2024 and July 1, 2023, the notional amounts of the forward contracts that the Company held to purchase foreign currencies were $76.1 million and $87.5 million, respectively, and the notional amounts of forward contracts that the Company held to sell foreign currencies were $20.1 million and $19.3 million, respectively.
15


VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 $0.8 million and $0.9 million for the three and nine months ended March 30, 2024, respectively, and gains of $0.8 million and less than $0.1 million for the three and nine months ended April 1, 2023, respectively.
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, 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.
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. As of March 30, 2024 and July 1, 2023, the Company did not hold any Level 3 investment securities. 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 risk-adjusted discount rate, gross profit volatility, and projected financial forecast of 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 Selling, general and administrative (SG&A) expense in the Consolidated Statements of Operations.
16


VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Fair Value Measurements
The Company’s assets and liabilities measured at fair value for the periods presented are as follows (in millions):
March 30, 2024July 1, 2023
TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3
Assets:      
Debt available-for-sale securities:
Asset-backed securities (1)
$0.3 $ $0.3 $ $0.3 $ $0.3 $ 
Total debt available-for-sale securities0.3  0.3  0.3  0.3  
Money market funds (2)
246.0 246.0   344.8 344.8   
Trading securities (3)
1.4 1.4   1.5 1.5   
Foreign currency forward contracts (4)
1.5  1.5  3.5  3.5  
Total assets $249.2 $247.4 $1.8 $ $350.1 $346.3 $3.8 $ 
Liabilities:
Foreign currency forward contracts (5)
$3.0 $ $3.0 $ $2.4 $ $2.4 $ 
Contingent consideration (6)
11.2   11.2 19.7   19.7 
Total liabilities$14.2 $ $3.0 $11.2 $22.1 $ $2.4 $19.7 
(1)Included in Other non-current assets on the Consolidated Balance Sheets.
(2)Includes, as of March 30, 2024, $239.0 million in Cash and cash equivalents, $3.4 million in Restricted cash and $3.6 million in Other non-current assets on the Consolidated Balance Sheets. Includes, as of July 1, 2023, $336.5 million in Cash and cash equivalents, $4.3 million in Restricted cash and $4.0 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 Other current assets on the Consolidated Balance Sheets.
(5)Included in Other current liabilities on the Consolidated Balance Sheets.
(6)As of March 30, 2024, included in Other non-current liabilities on the Consolidated Balance Sheets. As of July 1, 2023, includes certain amounts in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheets.

Other Fair Value Measures
Fair Value of Debt: If measured at fair value on the Consolidated Balance Sheets, the Company’s 3.75% Senior Notes (2029 Notes), 1.625% Senior Convertible Notes (2026 Notes) and 1.00% Senior Convertible Notes (2024 Notes) 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 30, 2024July 1, 2023
TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3
Debt:
3.75% Senior Notes
$344.1 $ $344.1 $ $341.8 $ $341.8 $ 
1.625% Senior Convertible Notes
244.3  244.3  262.7  262.7  
1.00% Senior Convertible Notes (1)
    95.6  95.6  
   Total $588.4 $ $588.4 $ $700.1 $ $700.1 $ 
(1)The 2024 Notes were retired upon maturity on March 1, 2024. See “Note 11. Debt”, for further discussion of the Company’s debt.

17


VIAVI SOLUTIONS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9. Goodwill
The following table presents changes in goodwill allocated to the Company’s reportable segments (in millions):
Network Enablement
Service Enablement
Optical Security
and Performance
Products
Total
Balance as of July 1, 2023$399.2 $13.8 $42.2 $455.2 
Currency translation(0.9)(0.1) (1.0)
Other adjustment (1)
 (1.0) (1.0)
Balance as of March 30, 2024$398.3 $12.7 $42.2 $453.2 
(1)Adjustment related to Goodwill acquired as part of a prior acquisition.

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 2023, the Company performed a quantitative assessment of goodwill impairment and concluded the fair value of each of the Company’s reporting units was at least two times the carrying value, and therefore no impairment was identified.
There were no events or changes in circumstances which triggered an impairment review during the three and nine months ended March 30, 2024.
Note 10. Acquired Developed Technology and Other Intangibles
The following tables present details of the Company’s acquired developed technology, customer relationships and other intangibles (in millions):
As of March 30, 2024Gross Carrying AmountAccumulated AmortizationNet
Acquired developed technology $438.0 $(400.3)$37.7 
Customer relationships194.9 (189.8)5.1 
Other (1)
39.7 (39.5)0.2 
Total intangibles$672.6 $(629.6)$43.0 
As of July 1, 2023Gross Carrying AmountAccumulated AmortizationNet
Acquired developed technology$438.5 $(390.2)$48.3 
Customer relationships195.2 (185.9)9.3 
Other (1)
39.8 (38.8)1.0 
Total intangibles$673.5 $(614.9)$