Viavi Solutions stock rose 4.3% to US$40.59 after earnings, which suggests traders saw enough in the headline numbers to support the move. The hook is simple: this is a turnaround story focused on operating performance, not just top line enthusiasm.

Quarterly revenue was US$443.1m with a 24% operating margin and earnings per share of US$0.34. For a test and measurement business that has been loss making over the last twelve months, that margin figure is a key focus for today’s buying. The rest of the report indicates how durable that shift might be.

Is Viavi Solutions now priced for a clean turnaround, or has the market pushed the stock too far above its fundamentals? Compare today’s share price against our detailed valuation analysis for Viavi Solutions

FY 2026 Earnings Summary

• Revenue, Q4 FY 2026 vs. Q4 FY 2025: US$443.1 million vs. US$290.5 million (strong year on year increase)
• Net Income, Q4 FY 2026 vs. Q4 FY 2025: US$32.7 million vs. US$8.0 million (sharply higher profitability in the quarter)
• Basic EPS, Q4 FY 2026 vs. Q4 FY 2025: US$0.14 vs. US$0.04 (clear improvement per share)
• Operating Margin, FY 2026 vs. FY 2025: 20.6% vs. 14.3% (630 basis point expansion across the year)

Tired of scrolling through dense earnings reports and raw figures trying to piece together the story behind Viavi Solutions? See the company’s full visual breakdown, with a clear view of its operating performance and profitability trends, in the interactive company report for Viavi Solutions.

Viavi’s AI Pivot Delivers On Margin And Mix

The bullish story around Viavi Solutions centers on a pivot to AI data center and aerospace and defense testing, with Spirent integration and higher value instruments lifting growth and profitability. The latest numbers give concrete milestones. NSE revenue reached US$353.9m in Q4, with data center estimated at about 50% of that segment and aerospace and defense about 17%. That lines up with the thesis that these areas are becoming Viavi’s main engine.

Margins are where you can most clearly test the thesis. Full year operating margin of 20.6%, up 630 basis points year on year, and Q4 operating margin of 24% show that the higher margin mix and Spirent synergies are feeding through. OSP also held a 40% operating margin with help from 3D sensing and anti counterfeiting. The raised Q1 FY27 margin guide and tariff refund benefit indicate that management expects this mix improvement to persist in the near term.

Compare whether this margin story lines up with institutional expectations and where the price could go next. See the consensus price target analysis for Viavi Solutions

Viavi Bear Case: Concentration Fears Not Fully Put To Rest

The core bearish worry on Viavi Solutions is that heavy reliance on AI data center and aerospace and defense spending, plus a small pool of large customers, would make results lumpy and margins fragile once the first AI rush cools. Q4 and FY26 numbers show strong AI and data center driven NSE and OSP margins, yet they also confirm that wireless and service provider demand is still described as anemic. That supports the concern that growth is leaning on a narrow set of engines rather than a broad recovery.

Bears also flagged execution risk on acquisitions and restructuring. Here the print cuts against that view, since Spirent is integrating ahead of schedule and contributing meaningfully to NSE revenue and profitability. However, management still leans on tariff refunds and an extra week in Q1 to support margins, which means some of the near term uplift is mechanical rather than purely structural.

After tariff refunds, extra reporting weeks and concentrated AI exposure, is this just the start of Viavi Solutions’ risk story or a warning sign you should not ignore? Review the independent risk analysis for Viavi Solutions which shows 2 important warning signs

Take Control Of Your Next Move

If the margin turnaround and AI focused revenue mix at Viavi Solutions has your attention, register for free with Simply Wall St and add it to a Watchlist to track the share price against fair value and watch for your preferred entry point. Once you are invested, keep on top of what really matters by using the Portfolio Command Center to filter out noise and surface only the key developments that could affect your holdings. Round out your view by tapping into thousands of investor perspectives through the Community to see how others are interpreting the same numbers and risks. This way you spot potential catalysts and red flags early and give yourself a better chance of staying ahead of the market.

Seeking Alternatives Beyond Viavi Solutions?

Fresh stock ideas can move from quiet to flying once attention hits. Scan curated picks before the crowd, while the data still matters and entry points look cleaner. Act now.

• Spot resilient potential compounders early and review the curated 77 resilient stocks with low risk scores that have kept risk scores in check while many investors stay distracted elsewhere.
• Ride structural infrastructure momentum by checking the hand picked 37 power grid technology and infrastructure stocks that sit at the heart of grid upgrades and electrification themes, currently remaining under the radar.
• Target quality cash generators and scan the refined 50 high quality undervalued stocks that combine solid balance sheets with healthy cash flows before valuations get caught by latecomers.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.