Financial Analysis

Note 5. Acquisitions High-speed Ethernet, Network Security and Channel Emulation Testing Business On October 16, 2025, the Company acquired Spirent Communications plcs (Spirent) high-speed ethernet, network security and channel emulation testing business (collectively, the HSE and CE business) from Keysight Technologies, Inc. (Keysight). The transaction provides a complementary addition to VIAVIs ethernet testing platform within its Network and Service Enablement (NSE) segment. The cash consideration paid at closing of $399.3 million is subject to final net working capital adjustments. The acquisition met the definition of a business and 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. Acquisition related costs incurred were approximately $20.6 million, of which $11.4 million was incurred in fiscal 2026, and were recorded within SG&A in the Consolidated Statements of Operations. The total purchase consideration was allocated to tangible and intangible assets acquired and liabilities assumed based on the preliminary fair value on the acquisition date. The Company elected to apply both practical expedients permitted under ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, in measuring contract assets and contract …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Note 11. Debt As of March 28, 2026 and June 28, 2025, the Companys debt on the Consolidated Balance Sheets, net of unamortized debt discount and issuance costs, is as follows ( in millions ): March 28, 2026 June 28, 2025 Principal amount of 0.625% Senior Convertible Notes $ 250.0 $ Unamortized 0.625% Senior Convertible Notes debt issuance cost (5.5) Principal amount of 1.625% Senior Convertible Notes 250.0 Unamortized 1.625% Senior Convertible Notes debt discount (3.3) Unamortized 1.625% Senior Convertible Notes debt issuance cost (0.5) Short-term debt $ 244.5 $ 246.2 Principal amount of 3.75% Senior Notes $ 400.0 $ 400.0 Unamortized 3.75% Senior Notes debt issuance cost (3.1) (3.7) Principal amount of Term Loan B 450.0 Unamortized Term Loan B debt issuance cost (10.6) Long-term debt $ 836.3 $ 396.3 The Company was in compliance with all debt covenants as of March 28, 2026 and June 28, 2025. Term Loan B On October 16, 2025, concurrent with the closing of the acquisition of Spirents HSE and CE business, the Company entered into a $600 million senior secured term loan credit agreement (Term Loan Credit Agreement) with Wells Fargo Bank, National Association (Wells Fargo), as administrative agent, and other lenders. The term loans, which mature on October 16, 2032, are secured by substantially all of the assets of the Company and those of its domestic subsidiaries. The proceeds from the term loans were used to finance a portion of the acquisition, acquisition related expenses and …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Note 16. Stock-Based Compensation The Company's stock-based compensation includes a combination of time-based restricted stock awards and performance-based awards. Restricted stock awards are granted without an exercise price and are converted to shares immediately upon vesting. When converted into shares upon vesting, shares equivalent in value to the minimum withholding taxes liability on the vested shares are withheld by the Company for the payment of such taxes. The Company generally estimates the fair value of stock-based awards based on the closing market price of the Companys common stock on the grant date. In the case of performance-based awards that include a market condition, the Company estimates the fair value of the award using a combination of the closing market price of the Companys common stock on the grant date and the Monte Carlo simulation model. For performance-based awards, shares attained over target upon vesting are reflected as awards granted during the period. Time-based restricted stock awards granted to eligible employees will generally vest in annual installments over a period of three to four years subject to the employees continuing service to the Company and do not have an expiration date. The Company's performance-based awards may include performance conditions, market conditions, time-based service conditions or a combination thereof and are generally expected to vest in annual installments over a period of three to four years. In addition, th …

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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 in active markets, 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 l …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Note 14. Income Taxes The Company recorded an income tax provision of $7.4 million and $36.1 million for the three and nine months ended March 28, 2026, respectively. The Company recorded an income tax benefit of $16.3 million and an income tax provision of $2.2 million for the three and nine months ended March 29, 2025, respectively. The income tax provision for the three and nine months ended March 28, 2026 primarily relates to income tax in certain foreign jurisdictions based on the Companys forecasted pre-tax income or loss and revaluation of the Companys German deferred tax assets. The income tax benefit for the three months and the income tax provision for the nine months ended March 29, 2025 primarily relates to the release of valuation allowance related to the acquisition of Inertial labs and income tax in certain foreign and state jurisdictions based on the Companys forecasted pre-tax income or loss. The income tax provision recorded differs from the expected tax provision that would be calculated by applying the federal statutory rate to the Companys income from continuing operations before taxes primarily due to the changes in valuation allowance for deferred tax assets attributable to the Companys domestic and foreign income from continuing operations and the revaluation of the German deferred tax assets. As of March 28, 2026 and June 28, 2025, the Companys unrecognized tax benefits (net of Federal benefits) totaled $42.9 million and $42.4 million, respectively, a …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Note 12. Leases The Company is a lessee in several operating leases, primarily real estate facilities for office space. The Company's lease arrangements are comprised of operating leases with various expiration dates through March 31, 2042. The Company's leases do not contain any material residual value guarantees. Lease expense and cash flow information related to our operating leases is as follows ( in millions ): Three Months Ended Nine Months Ended March 28, 2026 March 29, 2025 March 28, 2026 March 29, 2025 Operating lease costs (1) $ 3.7 $ 3.4 $ 10.6 $ 9.8 Cash paid for amounts included in the measurement of operating lease liabilities $ 3.8 $ 3.5 $ 11.1 $ 9.7 Operating ROU assets obtained in exchange for operating lease obligations $ 6.0 $ 4.4 $ 16.6 $ 7.1 (1) Total variable lease costs were immaterial during the three and nine months ended March 28, 2026 and March 29, 2025. The total operating lease costs were included in Cost of revenues, R&D, and SG&A in the Consolidated Statements of Operations. As of March 28, 2026 and March 29, 2025, the weighted-average remaining lease term was 5.6 years and 6.0 years, respectively, and the weighted-average discount rate was 6.3% and 5.8%, respectively. Future minimum operating lease payments as of March 28, 2026 are as follows ( in millions ): Operating Leases Remainder of fiscal 2026 $ 2.1 Fiscal 2027 13.4 Fiscal 2028 10.7 Fiscal 2029 7.6 Fiscal 2030 5.2 Thereafter 11.5 Total lease payments 50.5 Less: Interest (8.4) Pre …

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Accounting Standards Issued But Not Yet Adopted In December 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities , which provides guidance for a government grant received by a business entity. This guidance is effective for fiscal years beginning after December 15, 2028 (fiscal 2030 for the Company), and interim periods within those annual reporting periods, with early adoption permitted. The Company is evaluating the impact of adopting this new accounting guidance on its Consolidated Financial Statements. In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606: Revenue from Contracts with Customers , including those assets acquired in a business combination. The practical expedient permits an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets. This guidance is effective for fiscal years beginning after December 15, 2025 (fiscal 2027 for the Company), and interim periods within those annual reporting periods …

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Note 17. Employee Pension and Other Benefit Plans The Company sponsors significant qualified and non-qualified pension plans for certain past and present employees in the United Kingdom (U.K.) and Germany. The Company also is responsible for a defined benefit plan comprising of gratuity payments for present employees in India and non-pension post-retirement benefit obligation assumed from a past acquisition. These pension plans, with the exception of India, have been closed to new participants and no additional service costs are being accrued, except for certain plans in Germany assumed in connection with an acquisition in fiscal 2010. Benefits are generally based upon years of service and compensation or stated amounts for each year of service. As of March 28, 2026, the U.K. and India plans were fully funded while the other plans were unfunded. The Companys policy for funded plans is to make contributions equal to or greater than the requirements prescribed by law or regulation. For unfunded plans, the Company pays the post-retirement benefits when due. During the nine months ended March 28, 2026, the Company contributed $1.0 million to the U.K. plan and $4.8 million to the other plans. The funded plan assets consist primarily of managed investments. The following table presents the components of net periodic cost for the pension and benefits plans ( in millions ): Three Months Ended Nine Months Ended March 28, 2026 March 29, 2025 March 28, 2026 March 29, 2025 Interest cost …

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Note 13. Restructuring The Companys restructuring events are primarily intended to reduce costs, consolidate operations, integrate various acquisitions, streamline product manufacturing and address market conditions. Restructuring charges include severance, benefits and outplacement costs to eliminate a specified number of positions. The timing of associated cash payments is dependent upon the jurisdiction of the affected employees and can extend over multiple periods. Fiscal 2026 Plan During the third quarter of fiscal 2026, management approved a restructuring and workforce reduction plan (the Fiscal 2026 Plan) across our NSE and Optical Security and Performance Products (OSP) segments and Corporate (Corp) functions intended to improve operational efficiencies, better align the Companys workforce with current business needs and strategic growth opportunities and includes integration of recently acquired businesses. The Fiscal 2026 Plan includes a global workforce reduction, facilities rationalization and asset write-offs. The Company anticipates the Fiscal 2026 Plan to be substantially complete by the end of calendar year 2026. During the three months ended March 28, 2026 , the Company recognized restructuring charges of $17.4 million of employee severance, benefits and outplacement costs recorded within Restructuring and related charges (benefits) in the Consolidated Statements of Operations. In addition, the Company recognized Fiscal 2026 Plan charges of $3.6 million and $ …

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Note 19. Operating Segments and Geographic Information The Company evaluates its operating segments in accordance with the authoritative guidance on segment reporting. The Companys Chief Executive Officer as the Companys Chief Operating Decision Maker (CODM) uses operating segment financial information to evaluate segment performance and to allocate resources. The Companys operating and reportable segments are: (i) Network and Service Enablement (NSE): NSE provides an integrated portfolio of testing, monitoring, assurance and security solutions to help build, maintain, and optimize telecom and datacom networks . Our solutions address lab and production environments, network management, service assurance and AIOps for any kind of network, including wireless, wireline, cloud, satellite, public safety, military and critical infrastructure. NSE also offers a range of product support and professional services such as repair, calibration, software support and technical assistance for its products. (ii) Optical Security and Performance Products (OSP): OSP leverages its core optical coating technologies and volume manufacturing capability to design, manufacture, and sell technologies for the anti-counterfeiting, 3D sensing, government and aerospace, automotive and industrial markets . Segment Reporting The CODM manages the Company in two broad business categories: NSE and OSP. The CODM evaluates segment performance of the NSE and OSP business based on segment operating margins. The C …

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Note 15. Stockholders' Equity Issuance of Common Stock During the three months ended March 28, 2026, the Company issued approximately 1.8 million shares of its common stock in connection with the settlement of the remaining 2026 Notes. During the nine months ended March 28, 2026, the Company issued approximately 9.7 million shares of its common stock related to the settlement of the 2026 Notes, including 7.9 million shares issued in December 2025 and 1.8 million shares issued in March 2026. Repurchase of Common Stock In September 2022 the Board of Directors authorized a stock repurchase plan (2022 Repurchase Plan) of up to $300 million effective October 1, 2022, which will remain in effect until the amount authorized has been fully repurchased or until suspension or termination of the program. Under the 2022 Repurchase Plan, the Company is authorized to repurchase shares through a variety of methods, including open market purchases, privately-negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans. The timing of repurchases under the plan will depend upon business and financial market conditions. During the nine months ended March 28, 2026, the Company repurchased and subsequently retired 2.7 million shares of its common stock for $30.0 million under the 2022 Repurchase Plan. As of March 28, 2026, the Company had remaining authorization of $168.4 million for future share repurchases under the 2022 …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing