Network testing solutions company Viavi Solutions (NASDAQ: VIAV) reported Q1 CY2026 results beating Wall Street’s revenue expectations, with sales up 42.8% year on year to $406.8 million. On top of that, next quarter’s revenue guidance ($432 million at the midpoint) was surprisingly good and 8.6% above what analysts were expecting. Its non-GAAP profit of $0.27 per share was 17% above analysts’ consensus estimates.

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"VIAVI's financial performance for the third quarter has exceeded our expectations, driven by strong growth in the data center and aerospace and defense end markets. We expect these end markets to continue to be strong drivers for the foreseeable future," said Oleg Khaykin, VIAVI's President and Chief Executive Officer.

Company Overview

Once known as JDS Uniphase before its 2015 rebranding, Viavi Solutions (NASDAQ: VIAV) provides testing, monitoring and assurance solutions for telecommunications, cloud, enterprise, military, and other critical networks and infrastructure.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Viavi Solutions’s 3.4% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark for the industrials sector and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Viavi Solutions’s annualized revenue growth of 16.2% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

This quarter, Viavi Solutions reported magnificent year-on-year revenue growth of 42.8%, and its $406.8 million of revenue beat Wall Street’s estimates by 3.5%. Company management is currently guiding for a 48.7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 16.8% over the next 12 months, similar to its two-year rate. This projection is eye-popping and indicates the market is forecasting success for its products and services.

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Operating Margin

Viavi Solutions was profitable over the last five years but held back by its large cost base. Its average operating margin of 7.2% was weak for an industrials business. This result is surprising given its high gross margin as a starting point.

Analyzing the trend in its profitability, Viavi Solutions’s operating margin decreased by 9.1 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Viavi Solutions’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q1, Viavi Solutions generated an operating margin profit margin of 6.1%, up 3.1 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Viavi Solutions’s flat EPS over the last five years was below its 3.4% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Diving into the nuances of Viavi Solutions’s earnings can give us a better understanding of its performance. As we mentioned earlier, Viavi Solutions’s operating margin expanded this quarter but declined by 9.1 percentage points over the last five years. Its share count also grew by 3.9%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Viavi Solutions, its two-year annual EPS growth of 46.2% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q1, Viavi Solutions reported adjusted EPS of $0.27, up from $0.15 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Viavi Solutions’s full-year EPS of $0.77 to grow 29.9%.

Key Takeaways from Viavi Solutions’s Q1 Results

We were impressed by Viavi Solutions’s optimistic EPS guidance for next quarter, which blew past analysts’ expectations. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock traded up 12.6% to $51.69 immediately following the results.

Viavi Solutions may have had a good quarter, but does that mean you should invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).