Developing our products is expensive, and the investment in product development may involve a long payback cycle. We expect to continue to invest heavily in R&D in order to expand the capabilities of 3D sensing and smart phone sensors, handheld spectrometer solution and portable test instruments, introduce new products and features and build upon our technology. We believe one of our greatest strengths lies in our innovation and our product development efforts. By investing in R&D including through our acquisitions, we believe we are well positioned to continue to execute on our strategy and take advantage of market opportunities. We expect that our results of operations may be impacted by the timing and size of these investments. In addition, these investments may take several years to generate positive returns, if ever.

We face risks related to our international operations and revenue.

Our customers are located throughout the world. In addition, we have significant operations outside North America, including product development, manufacturing, sales and customer support operations.

Our international presence exposes us to certain risks, including the following:

•Fluctuations in exchange rates between the U.S. dollar and among the currencies of the countries in which we do business may adversely affect our operating results by negatively impacting our revenues or increasing our expenses;

•Our ability to comply with a wide variety of laws and regulations of the countries in which we do business, including, among other things, customs, import/export, anti-bribery, anti-competition, tax and data privacy laws, which may be subject to sudden and unexpected changes;

•Difficulties in establishing and enforcing our intellectual property rights;

•Tariffs and other trade barriers;

•Political, legal and economic instability in foreign markets, particularly in those markets in which we maintain manufacturing and product development facilities;

•Strained or worsening relations between the United States, Russia and China orand related impacts on other countries;

•Difficulties in staffing and management;

•Language and cultural barriers;

•Seasonal reductions in business activities in the countries where our international customers are located;

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•Integration of foreign operations;

•Longer payment cycles;

•Difficulties in management of foreign distributors; and

•Potential adverse tax consequences.

The spread of COVID-19 has ~~and is likely to continue to affect~~affected the manufacturing and shipment of goods globally. Any delay in production or delivery of our products due to an extended closure of our suppliers’ plants ~~as a result of efforts to limit the spread of COVID-19~~ could adversely impact our ~~business. Worldwide travel restrictions have been imposed by many countries, including air travel and transport, that have caused and are likely to continue to cause~~business, along with delays in shipment of our products as well as increased logistics ~~costs and will restrict our ability to attract, develop, integrate and retain highly skilled employees with appropriate qualifications from other countries.~~costs.

We expect that net revenue from customers outside North America will continue to account for a significant portion of our total net revenue. Lower sales levels that typically occur during the summer months in Europe and some other overseas markets may materially and adversely affect our business. In addition, the revenues we derive from many of our customers depend on international sales and further expose us to the risks associated with such international sales.

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Legal, Regulatory and Compliance Risks

Certain of our products are subject to governmental and industry regulations, certifications and approvals.

The commercialization of certain of the products we design, manufacture and distribute through our OSP segment may be more costly due to required government approval and industry acceptance processes. Development of applications for our anti-counterfeiting and special effects pigments may require significant testing that could delay our sales. For example, ~~certain uses in cosmetics may be regulated by the U.S. Food and Drug Administration, which has extensive and lengthy approval processes. Durability~~durability testing by the automobile industry of our special effects pigments used with automotive paints can take up to three years. If we change a product for any reason, including technological changes or changes in the manufacturing process, prior approvals or certifications may be invalid and we may need to go through the approval process again. If we are unable to obtain these or other government or industry certifications in a timely manner, or at all, our operating results could be adversely affected.

U.S. Government trade actions could have an adverse impact on our business, financial position, and results of operation.

The United States and China have been engaged in protracted negotiations over the Chinese government’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. ~~Former President Trump used his authority under~~For example, the United States has increased tariffs on certain categories of high-tech and consumer goods imported from China pursuant to Section 301 of the Trade Act of 1974, ~~three times to levy~~including a current 25% ~~retaliatory~~ tariff on ~~6,830 subheading categories of imported Chinese high-tech~~List 1, List 2 and ~~consumer goods valued at $250 billion per year. Although~~ List 3 ~~(under Section 301) valued at $200 billion, had originally set an additional duty rate at 10%,~~goods, which lists cover certain materials and/or products that rate was increased to 25% effective May 10, 2019. Moreover, in August 2019, Former President Trump announced a 15% tariff on a fourth list of goods valued at nearly $300 billion. Pursuant to a U.S.-China trade deal signed in January 2020, the List 3 rate remains at 25% and the List 4 rate decreased to 7.5% on February 14, 2020.we import from China.

On May 16, 2019, Huawei Technologies Co. Ltd. and 68 designated non-U.S. affiliates (collectively, Huawei) were added to the Entity List of the Bureau of Industry and Security of the U.S. Department of Commerce (BIS), which imposes limitations on the supply of certain U.S. items and product support to Huawei. On August 17, 2020, BIS issued final rules that further restrict access by Huawei to items produced domestically and abroad from U.S. technology and software. ~~While the majority of our products were unaffected, the final rules prevent us from selling certain products~~Products that VIAVI sells to Huawei ~~entities without a license issued subject~~have been affected by the restrictions on Huawei, however the impact is not expected to ~~the Export Administration Regulations. If we are unable to obtain such a license, our business, financial condition and results of operations could~~ be ~~negatively impacted.~~material.

These measures, along with any additional tariffs or other trade actions that may be implemented, may increase the cost of certain materials and/or products that we import from China, thereby adversely affecting our profitability. These actions could require us to raise our prices, which could decrease demand for our products. As a

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result, these actions, including potential retaliatory measures by China and further escalation into a potential “trade war”, may adversely impact our business. While recent US export controls on China’s semiconductor and artificial intelligence industries may have an indirect impact on VIAVI, the implications of such controls are still being evaluated and are not expected to have a material impact on revenues.

~~In January 2021, President Biden commenced his new administration with a number of executive orders~~Furthermore, the geopolitical and ~~actions, including a temporary halt of pending U.S. defense transfers and sales to Saudi Arabia and~~economic uncertainty and/or instability that may result from changes in the relationship among the United ~~Emirates. This executive order could negatively impact~~States, Taiwan and China, may, directly or indirectly, materially harm our business, financial condition and results of operations. For example, certain of our suppliers are dependent on products sourced from Taiwan which has been distinguished in its prevalence in certain global markets, most specifically semiconductor manufacturing. Hence, greater restrictions and/or disruptions of our suppliers’ ability to operate facilities and/or do business in these jurisdictions may increase the cost of certain materials and/or limit the supply of products and ~~equipment we deliver~~may result in deterioration of our profit margins, a potential need to ~~military~~increase our pricing and, ~~defense clients. In January 2022,~~ in ~~light of~~so doing, may decrease demand for our products and thereby adversely impact our revenue or profitability.

Due to the ~~military~~ongoing conflict between Russia and Ukraine, the U.S., E.U. and ~~potential military incursions by Russia, the Biden administration indicated that it could broaden~~U.K. have broadened restrictions on exports to Russia, ~~and potentially block foreign~~thereby blocking shipments of technology, telecommunications and consumer electronics products to ~~Russia if made using U.S. technology. If these measures are invoked, we may not be able~~Russia. This caused us to ~~ship certain orders~~suspend transactions in the region effective February 2022 and has negatively impacted our business ~~could be negatively impacted. Given~~in the ~~uncertainty regarding~~region. Sales in the ~~scope~~region are not material to our total consolidated revenues or net income and ~~duration~~we are not aware of any specific event or circumstances that would require an update to the estimates or judgments or a revision of the carrying value of assets or liabilities at this time. However, these ~~trade actions by~~estimates may change, as new events occur and additional information becomes available. Actual results may differ materially from these estimates assumptions or conditions due to risks and uncertainties, including the ~~United States or other countries,~~ongoing situation in Ukraine as well as the potential for additional trade actions or retaliatory cyber-attacks aimed at infrastructure or supply chains, and the impact on our future operations and results in the region remains uncertain.

~~Information Security, Technology and Intellectual Property Risks~~

~~Our business and operations could be adversely impacted in the event of a failure of our information technology infrastructure.~~

We rely upon the capacity, reliability and security of our information technology infrastructure and our ability to expand and continually update this infrastructure in response to our changing needs. In some cases, we rely upon third-party hosting and support services to meet these needs. The growing and evolving cyber-risk environment means that individuals, companies, and organizations of all sizes, including ourselves and our hosting and support partners, are increasingly vulnerable to attacks and disruptions on their networks and systems by a wide range of actors on an ongoing and regular basis. We also design and manage IT systems and products that contain IT systems for various customers, and generally face the same threats for these systems as for our own internal systems.

We maintain information security tools and technologies, staff, policies and procedures for managing risk to our networks and information systems, and conduct employee training on cyber-security to mitigate persistent and continuously evolving cyber-security threats. Our network security controls are comprised of administrative, physical and technical controls, which include, but are not limited to, the implementation of firewalls, anti-virus protection, patches, log monitors, routine backups, off-site storage, network audits and other routine updates and modifications. We also routinely monitor and develop our internal information technology systems to address risks to our information systems. Despite our implementation of these and other security measures and those of our third-party vendors, our systems are vulnerable to damages from computer viruses, natural disasters, unauthorized access and other similar disruptions and attacks that continue to emerge and evolve. Any system failure, accident or security breach could result in disruptions to our business processes, network degradation, and system down time, along with the potential that a third-party will gain unauthorized access to, or acquire intellectual property, proprietary business information, and data related to our employees, customers, suppliers, and business partners, including personal data. To the extent that any disruption, degradation, downtime or other security event results in a loss or damage to our data or systems, or in inappropriate disclosure of confidential or personal information, it could adversely impact us and our clients, potentially resulting in, among other things, financial losses, our inability to transact business on behalf of our clients, adverse impact on our brand and reputation, violations of applicable privacy and other laws, regulatory fines, penalties, litigation, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs. We may also incur additional costs related to cyber-security risk management and remediation. There can be no assurance that we or our service providers, if applicable, will not suffer losses relating to cyber-attacks or other information security breaches in the future or that our insurance coverage will be adequate to cover all the costs resulting from such events. No assurances can be given that our efforts to reduce the risk of such attacks will be successful.

The COVID-19 pandemic may adversely affect our systems, and the health of members of our internal IT team who monitor and address the cyber threats and attacks against VIAVI. In particular, the internet is currently experiencing an increase in cyber threats during the COVID-19 pandemic in the form of phishing emails, malware attachments and malicious websites which seemingly offer information regarding COVID-19. We have employed efforts to mitigate any potential impact that could result from increased cyber threats and the loss of members of our internal IT team and by providing our employees with enhanced awareness materials and training, updating our business continuity plans, and cross training staff.

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Failure to maintain satisfactory compliance with certain privacy and data protections laws and regulations may ~~subject us to substantial negative financial consequences and civil or criminal penalties.~~harm our business.

Complex local, state, national, foreign, and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data. These privacy laws and regulations are quickly evolving, with new or modified laws and regulations proposed and implemented frequently and existing laws and regulations subject to new or different interpretations. In addition, our legal and regulatory obligations in jurisdictions outside of the U.S. are subject to unexpected changes, including the potential for regulatory or other governmental entities to enact new or additional laws or regulations, to issue rulings that invalidate prior laws or regulations, or to increase penalties significantly. Complying with these laws and regulations can be costly and can impede the development and offering of new products and services. For example, the E.U. General Data Protection Regulation (GDPR), which became effective in May 2018, imposes stringent data protection requirements and provides for significant penalties for noncompliance. Additionally, California enacted legislation, the California Consumer Privacy Act (CCPA), which became effective January 1, 2020. The CCPA requires, among other things, covered companies to provide new disclosures to California consumers, and allow such consumers new abilities to opt-out of certain sales of personal data. The CCPA also provides for civil penalties for violations, as well as a private right of action for data breaches that may increase data breach litigation. Further, there are five new state privacy laws that will go into effect in 2023, the California Privacy Rights Act, ~~(CPRA)~~the Virginia Consumer Data Protection Act, the Utah Consumer Privacy Act, the Colorado Privacy Act and the Connecticut Data Privacy Act, and a number of other states are considering similar laws. In addition, a federal privacy bill, called the American Data Privacy and Protection Act was recently ~~passed in California.~~published. The ~~CPRA~~new state privacy laws and proposed federal law will impose additional data protection obligations on covered businesses, including additional consumer rights, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data. ~~It will also create a~~The new ~~California data protection agency authorized to issue regulations~~ and ~~could result in increased~~proposed privacy ~~and information security enforcement. The majority of the provisions will go into effect on January 1, 2023, and additional compliance investment and business process changes may be required. The CPRA~~laws may result in further uncertainty and would require us to incur additional expenditures to comply. ~~Several other states have signed into law or are intending to enact laws relating to personal information. The U.S. federal government may also pass data privacy laws.~~ These regulations and legislative developments have potentially far-reaching consequences and may require us to modify our data management practices and incur substantial compliance expense.

Our failure to comply with applicable laws and regulations or other obligations to which we may be subject relating to personal data, or to protect personal data from unauthorized access, use, or other processing, could result in enforcement actions and regulatory investigations against us, claims for damages by customers and other affected individuals, fines, damage to our reputation, and loss of goodwill, any of which could have a material adverse effect on our operations, financial performance, and business.

Certain provisions in our charter and under Delaware laws could hinder a takeover attempt.

We are subject to the provisions of Section 203 of the Delaware General Corporation Law prohibiting, under some circumstances, publicly-held Delaware corporations from engaging in business combinations with some stockholders for a specified period of time without the approval of the holders of substantially all of our outstanding voting stock. Such provisions could delay or impede the removal of incumbent directors and could make more difficult a merger, tender offer or proxy contest involving us, even if such events could be beneficial, in the short-term, to the interests of the stockholders. In addition, such provisions could limit the price that some investors might be willing to pay in the future for shares of our common stock. Our certificate of incorporation and bylaws contain provisions providing for the limitations of liability and indemnification of our directors and officers, allowing vacancies on our Board of Directors to be filled by the vote of a majority of the remaining directors, granting our Board of Directors the authority to establish additional series of preferred stock and to designate the rights, preferences and privileges of such shares (commonly known as “blank check preferred”) and providing that our stockholders can take action only at a duly called annual or special meeting of stockholders, which may only be called by the Chairman of the Board, the Chief Executive Officer or the Board of Directors. These provisions may also have the effect of deterring hostile takeovers or delaying changes in control or change in our management.

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Information Security, Technology and Intellectual Property Risks

Our business and operations could be adversely impacted in the event of a failure of our information technology infrastructure.

We rely upon the capacity, reliability and security of our information technology infrastructure and our ability to expand and continually update this infrastructure in response to our changing needs. In some cases, we rely upon third-party hosting and support services to meet these needs. The internet has experienced an increase in cyber threats in the form of phishing emails, malware attachments and malicious websites. The growing and evolving cyber-risk environment means that individuals, companies, and organizations of all sizes, including ourselves and our hosting and support partners, are increasingly vulnerable to attacks and disruptions on their networks and systems by a wide range of actors on an ongoing and regular basis. We also design and manage IT systems and products that contain IT systems for various customers, and generally face the same threats for these systems as for our own internal systems.

We maintain information security tools and technologies, staff, policies and procedures for managing risk to our networks and information systems, and conduct employee training on cyber-security to mitigate persistent and continuously evolving cyber-security threats. Our network security controls are comprised of administrative, physical and technical controls, which include, but are not limited to, the implementation of firewalls, anti-virus protection, patches, log monitors, routine backups, off-site storage, network audits and other routine updates and modifications.We also routinely monitor and develop our internal information technology systems to address risks to our information systems. Despite our implementation of these and other security measures and those of our third-party vendors, our systems are vulnerable to damages from computer viruses, natural disasters, unauthorized access and other similar disruptions and attacks that continue to emerge and evolve. Any system failure, accident or security breach could result in disruptions to our business processes, network degradation, and system down time, along with the potential that a third-party will gain unauthorized access to, or acquire intellectual property, proprietary business information, and data related to our employees, customers, suppliers, and business partners, including personal data. To the extent that any disruption, degradation, downtime or other security event results in a loss or damage to our data or systems, or in inappropriate disclosure of confidential or personal information, it could adversely impact us and our clients, potentially resulting in, among other things, financial losses, loss of customers or business, our inability to transact business on behalf of our clients, adverse impact on our brand and reputation, violations of applicable privacy and other laws, regulatory fines, penalties, litigation, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs. We may also incur additional costs related to cyber-security risk management and remediation. There can be no assurance that we or our service providers, if applicable, will not suffer losses relating to cyber-attacks or other information security breaches in the future or that our insurance coverage will be adequate to cover all the costs resulting from such events. No assurances can be given that our efforts to reduce the risk of such attacks will be successful.

If we have insufficient proprietary rights or if we fail to protect those we have, our business would be materially harmed.

~~Our intellectual property rights may not be adequate to protect our products or product roadmaps.~~

We seek to protect our products and our product roadmaps in part by developing and/or securing proprietary rights relating to those products, including patents, trade secrets, know-how and continuing technological innovation. The steps taken by us to protect our intellectual property may not adequately prevent misappropriation or ensure that others will not develop competitive technologies or products. Other companies may be investigating or developing other technologies that are similar to our own. It is possible that patents may not be issued from any of our pending applications or those we may file in the future and, if patents are issued, the claims allowed may not be sufficiently broad to deter or prohibit others from making, using or selling products that are similar to ours. We do not own patents in every country in which we sell or distribute our products, and thus others may be able to offer identical products in countries where we do not have intellectual property protection. In addition, the laws of some territories in which our products are or may be developed, manufactured or sold, including Europe, Asia-Pacific or Latin America, may not protect our products and intellectual property rights to the same extent as the laws of the United States.

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Any patents issued to us may be challenged, invalidated or circumvented. Additionally, we are currently a licensee in all of our operating segments for a number of third-party technologies, software and intellectual property rights from academic institutions, our competitors and others, and are required to pay royalties to these licensors for the use thereof. Unless we are able to obtain such licenses on commercially reasonable terms, patents or other intellectual property held by others could inhibit our development of new products, impede the sale of some of our current products, substantially increase the cost to provide these products to our customers, and could have a significant adverse impact on our operating results. In the past, licenses generally have been available to us where

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third-party technology was necessary or useful for the development or production of our products. In the future licenses to third-party technology may not be available on commercially reasonable terms, if at all.

Our products may be subject to claims that they infringe the intellectual property rights of others.

Lawsuits and allegations of patent infringement and violation of other intellectual property rights occur in our industry on a regular basis. We have received in the past, and anticipate that we will receive in the future, notices from third parties claiming that our products infringe their proprietary rights. Over the past several years there has been a marked increase in the number and potential severity of third-party patent infringement claims, primarily from two distinct sources. First, large technology companies, including some of our customers and competitors, are seeking to monetize their patent portfolios and have developed large internal organizations that have approached us with demands to enter into license agreements. Second, patent-holding companies, entities that do not make or sell products (often referred to as “patent trolls”), have claimed that our products infringe upon their proprietary rights. We will continue to respond to these claims in the course of our business operations. In the past, the resolution of these disputes has not had a material adverse impact on our business or financial condition; however, this may not be the case in the future. Further, the litigation or settlement of these matters, regardless of the merit of the claims, could result in significant expense to us and divert the efforts of our technical and management personnel, whether or not we are successful. If we are unsuccessful, we could be required to expend significant resources to develop non-infringing technology or to obtain licenses to the technology that is the subject of the litigation. We may not be successful in such development, or such licenses may not be available on terms acceptable to us, if at all. Without such a license, we could be enjoined from future sales of the infringing product or products, which could adversely affect our revenues and operating results.

The use of open-source software in our products, as well as those of our suppliers, manufacturers and customers, may expose us to additional risks and harm our intellectual property position.

Certain of the software and/or firmware that we use and distribute (as well as that of our suppliers, manufacturers and customers) may be, be derived from, or contain, “open source” software, which is software that is generally made available to the public by its authors and/or other third parties. Such open-source software is often made available under licenses which impose obligations in the event the software or derivative works thereof are distributed or re-distributed. These obligations may require us to make source code for the derivative works available to the public, and/or license such derivative works under a particular type of license, rather than the forms of license customarily used to protect our own software products. While we believe we have complied with our obligations under the various applicable licenses for open-source software, in the event that a court rules that these licenses are unenforceable, or in the event the copyright holder of any open source software were to successfully establish in court that we had not complied with the terms of a license for a particular work, we could be required to release the source code of that work to the public and/or stop distribution of that work. Additionally, open-source licenses are subject to occasional revision. In the event future iterations of open-source software are made available under a revised license, such license revisions may adversely affect our ability to use such future iterations.

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Environmental, Social and Governance Risks

We may be subject to environmental liabilities which could increase our expenses and harm our operating results.

We are subject to various federal, state and foreign laws and regulations governing the environment, including those governing pollution and protection of human health and the environment and, recently, those restricting the presence of certain substances in electronic products and holding producers of those products financially responsible for the collection, treatment, recycling and disposal of certain products. Such laws and regulations have been passed in several jurisdictions in which we operate, are often complex and are subject to frequent changes. We will need to ensure that we comply with such laws and regulations as they are enacted, as well as all environmental laws and regulations, and as appropriate or required, that our component suppliers also comply with such laws and regulations. If we fail to comply with such laws, we could face sanctions for such noncompliance, and our customers may refuse to purchase our products, which would have a materially adverse effect on our business, financial condition and results of operations.

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With respect to compliance with environmental laws and regulations in general, we have incurred, and in the future could incur, substantial costs for the cleanup of contaminated properties, either those we own or operate or to which we have sent wastes in the past, or to comply with such environmental laws and regulations. Additionally, we could be subject to disruptions to our operations and logistics as a result of such clean-up or compliance obligations. If we were found to be in violation of these laws, we could be subject to governmental fines and liability for damages resulting from such violations. If we have to make significant capital expenditures to comply with environmental laws, or if we are subject to significant expenditures in connection with a violation of these laws, our financial condition or operating results could be materially adversely impacted.

~~Climate, Natural Disasters~~

Our disclosures, initiatives and ~~Catastrophic Events~~goals related to ESG matters expose us to numerous risks.

There is an increasing focus from U.S. and foreign government agencies, certain investors, customers, consumers, employees, and other stakeholders concerning environmental, social and governance (“ESG”) matters. We may communicate certain initiatives and goals, regarding environmental matters, diversity, responsible sourcing and social investments and other ESG matters, in our ESG Report, on our website, in our SEC filings, and elsewhere. These initiatives and goals could be difficult and expensive to implement, and we could be criticized for the accuracy, adequacy, or completeness of the disclosure of our ESG initiatives. Further, statements about our ESG initiatives and goals, and progress against those goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. In addition, we could be criticized for the scope or nature of such initiatives or goals, or for any revisions to these goals. If our ESG-related data, processes and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our ESG goals on a timely basis, or at all, our reputation, business, financial performance and growth could be adversely affected.

We may be subject to risks related to climate change, natural disasters and catastrophic events.

We operate in geographic regions which face a number of climate and environmental challenges. Our new corporate headquarters are located in ~~Scottsdale,~~Chandler, Arizona, a desert climate, subject to extreme heat and drought. The geographic location of our Northern California offices and production facilities subject them to drought, earthquake and wildfire risks. It is impossible to predict the timing, magnitude or location of such natural disasters or their impacts on the local economy and on our operations. If a major earthquake, wildfire or other natural disaster were to damage or destroy our facilities or manufacturing equipment, we may experience potential impacts ranging from production and shipping delays to lost profits and revenues. In October 2017 and again in October 2019, we temporarily closed our Santa Rosa, California facility resulting in production stoppage, due to wildfires in the region and the facility’s close proximity to the wildfire evacuation zone. The location of our production facility could subject us to production delays and/or equipment and property damage. Moreover, ~~in October 2019,~~ Pacific Gas and Electric (PG&E), the public electric utility in our Northern California region, ~~commenced planned~~has previously implemented and may continue to implement widespread blackouts during the peak wildfire season to avoid and contain wildfires sparked during strong wind events by downed power lines or equipment failure. While we have not experienced damage to our facilities or a material disruption to operations as a result of these power outages, ongoing blackouts, particularly if prolonged or frequent, could impact our operations going forward.

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Management ~~Transitions~~transitions and ~~Talent Retention Create Uncertainties~~talent retention create uncertainties and ~~Could Harm~~could harm our ~~Business.~~business.

Management changes could adversely impact our results of operations and our customer relationships and may make recruiting for future management positions more difficult. Our executives and other key personnel are at-will employees and we generally do not have employment or non-compete agreements with our other employees, and we cannot assure you that we will be able to retain them. We have recently and could continue to experience changes in our leadership team. Competition for people with the specific technical and other skills we require is significant. Moreover, we may face new and unanticipated difficulties in attracting, retaining and motivating employees in connection with the change of our headquarters to ~~Scottsdale, Arizona, effective January 1, 2021.~~Chandler, Arizona. As remote work has become more available the competition for highly qualified talent has intensified. If we are unable to attract and retain qualified executives and employees, or to successfully integrate any newly hired personnel within our organization, we may be unable to achieve our operating objectives, which could negatively impact our financial performance and results of operations.

Risks Related to our Liquidity and Indebtedness

Any deterioration or disruption of the capital and credit markets may adversely affect our access to sources of funding.

Global economic conditions have caused and may cause volatility and disruptions in the capital and credit markets. When the capital or credit markets deteriorate or are disrupted, our ability to incur additional indebtedness to fund a portion of our working capital needs and other general corporate purposes, or to refinance maturing obligations as they become due, may be constrained. In the event that we were to seek to access the capital markets or other sources of financing, there can be no assurance that we will be able to obtain financing on acceptable terms or within an acceptable time, if at all. We may seek to access the capital or credit markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. For example, in December 2021, we entered into a $300 million asset-based secured credit ~~facility.~~facility which has certain limitations based on our borrowing capacity. Our access to the financial markets and the pricing and terms we receive in the financial markets could be adversely impacted by various factors, including changes in financial markets and interest rates. In addition, if we do access the capital or credit markets, agreements governing any borrowing arrangement could contain covenants restricting our ~~operations~~.operations.

Our notes increased our overall leverage and our convertible notes could dilute our existing stockholders and lower our reported earnings per share.

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The issuance of our 1.00% Senior Convertible Notes due 2024, our 1.75% Senior Convertible Notes due 2023, and our 3.75% Senior Notes due 2029 (together the “Notes”) ~~increases our overall leverage and could dilute our existing stockholders and lower our reported earnings per share.~~

~~The issuance of the Notes~~ substantially increased our principal payment obligations. The degree to which we are leveraged could materially and adversely affect our ability to successfully obtain financing for working capital, acquisitions or other purposes and could make us more vulnerable to industry downturns and competitive pressures. In addition, the holders of the 2023 and 2024 Notes are entitled to convert the Notes into shares of our common stock or a combination of cash and shares of common stock under certain circumstances which would dilute our existing stockholders and lower our reported per share earnings.

Our ability to make payments on our indebtedness when due, to make payments upon conversion with respect to our convertible senior notes or to refinance our indebtedness as we may need or desire, depends on our future performance and our ability to generate cash flow from operations, which is subject to economic, financial, competitive and other factors beyond our control. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, refinancing or obtaining additional equity capital on terms that may be onerous or highly dilutive. We may not be able to engage in these activities on desirable terms or at all, which may result in a default on our existing or future indebtedness and harm our financial condition and operating results.

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Our outstanding indebtedness may limit our operational and financial flexibility.

Our level of indebtedness could have important consequences, including:

•Impairing our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes;

•Requiring us to dedicate a substantial portion of our operating cash flow to paying principal and interest on our indebtedness, thereby reducing the funds available for operations;

•Limiting our ability to grow and make capital expenditures due to the financial covenants contained in our debt arrangements;

•Impairing our ability to adjust rapidly to changing market conditions, invest in new or developing technologies, or take advantage of significant business opportunities that may arise;

•Making us more vulnerable if a general economic downturn occurs or if our business experiences difficulties; and

•Resulting in an event of default if we fail to satisfy our obligations under the Notes or our other debt or fail to comply with the financial and other restrictive covenants contained in the indentures governing the Notes, or any other debt instruments, which event of default could result in all of our debt becoming immediately due and payable and could permit certain of our lenders to foreclose on our assets securing such debt.

We may not generate sufficient cash flow to meet our debt service and working capital requirements, which may expose us to the risk of default under our debt obligations.

We ~~will need to implement our business strategy successfully on a timely basis to meet our debt service and working capital needs. We~~ may not successfully implement our business strategy, and even if we do, we may not realize the anticipated results of our strategy and generate sufficient operating cash flow to meet our debt service obligations and working capital needs. In addition, our ability to make scheduled payments on our indebtedness, including the notes, is affected by general and regional economic, financial, competitive, business and other factors beyond our ~~control, including the COVID-19 pandemic.~~control.

In the event our cash flow is inadequate to meet our debt service and working capital requirements, we may be required, to the extent permitted under the indentures covering the Notes and any other debt agreements, to seek additional financing in the debt or equity markets, refinance or restructure all or a portion of our indebtedness, sell selected assets or reduce or delay planned capital or operating expenditures. Any insufficient cash flow may make it more difficult for us to obtain financing on terms that are acceptable to us, or at all.

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Despite our current level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt. ~~This could exacerbate the risks to our financial condition described above.~~

We and our subsidiaries may be able to incur significant additional indebtedness in the future. Although the indentures that govern the Notes and the agreement that governs our secured credit facility contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness under the agreements governing our existing debt.

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The terms of the indentures that govern the Notes and the agreement that governs our secured credit facility restrict our current and future ~~operations, particularly our ability to respond to changes or to take certain actions.~~operations.

The indentures governing the Notes and the agreement governing the secured credit facility contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to:

•Incur or guarantee additional indebtedness;

•Incur or suffer to ~~existing~~exist liens securing indebtedness;

•Make investments;

•Consolidate, merge or transfer all or substantially all of our assets;

•Sell assets;

•Pay dividends or other distributions on, redeem or repurchase capital stock;

•Enter into transactions with affiliates;

•Amend, modify, prepay or redeem subordinated indebtedness;

•Enter into certain restrictive agreements;

•Engage in a new line of business;

•Amend certain material agreements, including material leases and debt agreements; and

•Enter into sale leaseback transactions.

Tax Risks

Our ability to use our net operating loss carryforwards to offset future taxable income may be subject to certain ~~limitations.~~limitations and/or changes in regulations.

Changes in U.S. federal income or other tax laws or the interpretation of tax laws, including the Inflation Reduction Act of 2022, as recently passed by Congress, may impact our tax liabilities. Utilization of our NOLs and tax credit carryforwards may be subject to a substantial annual limitation if the ownership change limitations under Sections 382 and 383 of the Internal Revenue Code and similar state provisions are triggered by changes in the ownership of our capital stock. In general, an ownership change occurs if there is a cumulative change in our ownership by “5-percent shareholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. Accordingly, purchases of our capital stock by others could limit our ability to utilize our NOLs and tax credit carryforwards in the future.

Furthermore, we may not be able to generate sufficient taxable income to utilize our NOLs and tax credit carryforwards before they expire. Due to uncertainty regarding the timing and extent of our future profitability, we continue to record a valuation allowance to offset our U.S. and certain of our foreign deferred tax assets because of uncertainty related to our ability to utilize our NOLs and tax credit carryforwards before they expire.

If any of these events occur, we may not derive some or all of the expected benefits from our NOLs and tax credit carryforwards.

6158

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~~General Risks~~

~~Failure to maintain effective internal controls may adversely affect our stock price.~~

Effective internal controls are necessary for us to provide reliable financial reports and to effectively prevent fraud. We are required to annually evaluate the effectiveness of the design and operation of our internal controls over financial reporting. Based on these evaluations, we may conclude that enhancements, modifications, or changes to internal controls are necessary or desirable. In addition, our independent registered public accounting firm must report on the effectiveness of our internal control over financial reporting. While management evaluates the effectiveness of our internal controls on a regular basis, these controls may not always be effective. A material weakness in our internal controls has been identified in the past, and we cannot assure you that we or our independent registered public accounting firm will not identify a material weakness in our internal controls in the future. A material weakness in our internal controls over financial reporting would require management and our independent registered public accounting firm to evaluate our internal controls as ineffective. If our internal controls over financial reporting are not considered effective, we may experience a loss of public confidence, which could have an adverse effect on our business, financial condition and the market price of our common stock and other securities.

~~Impairment in the carrying value of goodwill or other assets could negatively affect our results of operations or net worth.~~

We have significant long-lived assets recorded on our balance sheet. We evaluate intangible assets and goodwill for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We monitor factors or indicators, such as unfavorable variances from forecasted cash flows, established business plans or volatility inherent to external markets and industries that would require an impairment test. We have in the past and may in the future experience impairment charges to goodwill. The amount of any impairment charge could be significant and could have a material adverse impact on our financial condition and results of operations for the period in which the charge is taken. In addition, the economic disruptions caused by the COVID-19 pandemic could also adversely impact the impairment risks for certain long-lived assets, equity method investments and goodwill. Refer to Note 9 and Note 10 of the Notes to the Consolidated Financial Statements and “Critical Accounting Policies and Estimates” in Management's Discussion and Analysis of Financial Condition and Results of Operations for further discussion of the impairment testing of goodwill and long-lived assets.

~~Our actual operating results may differ significantly from our guidance.~~

We release guidance in our quarterly earnings conference calls, quarterly earnings releases, or otherwise, regarding our future performance that represents our management’s estimates as of the date of release. This guidance, which includes forward-looking statements, will be based on projections prepared by our management.

Such projections are based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change.

Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the guidance furnished by us will not materialize or will vary significantly from actual results. Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release. Actual results may vary from our guidance and the variations may be material. In light of the foregoing, investors are urged not to rely upon our guidance in making an investment decision regarding our common stock.

Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this “Risk Factors” section could result in the actual operating results being different from our guidance, and the differences may be adverse and material.

~~Table of Contents~~

~~Certain provisions in our charter and under Delaware laws could hinder a takeover attempt.~~

~~We face certain litigation risks that could harm our business.~~

We are and may become subject to various legal proceedings and claims that arise in or outside the ordinary course of business. The results of complex legal proceedings are difficult to predict. Moreover, many of the complaints filed against us do not specify the amount of damages that plaintiffs seek, and we therefore are unable to estimate the possible range of damages that might be incurred should these lawsuits be resolved against us. While we are unable to estimate the potential damages arising from such lawsuits, certain of them assert types of claims that, if resolved against us, could give rise to substantial damages. Thus, an unfavorable outcome or settlement of one or more of these lawsuits could have a material adverse effect on our financial condition, liquidity and results of operations. Even if these lawsuits are not resolved against us, the uncertainty and expense associated with unresolved lawsuits could seriously harm our business, financial condition and reputation. Litigation is costly, time-consuming and disruptive to normal business operations. The costs of defending these lawsuits have been significant, will continue to be costly and may not be covered by our insurance policies. The defense of these lawsuits could also result in continued diversion of our management’s time and attention away from business operations, which could harm our business. For additional discussion regarding litigation, see “Legal Proceedings” in Note 18. “Commitments and Contingencies.”

~~Table of Contents~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~None.~~Our common stock is traded on the Nasdaq Global Select Market under the symbol (VIAV). As of October 29, 2022, we had 1,885 holders of record of our common stock. We have not paid cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future.

The following table provides stock repurchase activity during the three months ended October 1, 2022 (in millions, except per share amounts):



	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)	Maximum Dollar Value of Shares that May Still Be Purchased Under the Plans or Programs(1)
Period
July 3 - July 30, 2022	0.5	$13.78	0.5	$	60.2
July 31 - August 27, 2022	0.4	$15.21	0.4	$	54.5
August 28 - October 1, 2022	0.4	$14.08	0.4	$	300.0
Total	1.3		1.3

(1) Share repurchases for the three months ended October 1, 2022 were made under our 2019 Repurchase Plan which expired September 30, 2022. In September 2022 the Board of Directors authorized a new 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. Refer to “Note 14. Stockholders' Equity” for more details.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

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Item 6. Exhibits

The exhibits required to be filed herewith by Item 601 of Regulation S-K, as described in the following ~~documents~~index of exhibits, are ~~filed~~attached hereto unless otherwise indicated as ~~Exhibits to this report:~~being incorporated by reference, as follows:

Incorporated by Reference Filed Furnished
Exhibit No. Exhibit Description Form Exhibit Filing Date Herewith Not Filed
10.1
Credit Agreement dated December 30, 2021, among Viavi Solutions Inc. and certain of its subsidiaries, the lenders party thereto and Wells Fargo Bank, National Association, as agent
8-K 10.1 1/6/2022
31.1
Certification of the Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of the Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
32.1
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
32.2
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
101.SCH Inline XBRL Taxonomy Extension Schema X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X
104
Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101)

X

Incorporated by Reference

Filed

Furnished

Exhibit No.

Exhibit Description

Form

Exhibit

Filing Date

Herewith

Not Filed

31.1

Certification of the Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of the Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.SCH

Inline XBRL Taxonomy Extension Schema

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: ~~February 7,~~November 4, 2022	VIAVI SOLUTIONS INC.
	(Registrant)
	By:	/s/ HENK DERKSEN
	Name:	HENK DERKSEN
	Title:	Executive Vice President and Chief ~~Accounting~~Financial Officer
		(Duly Authorized Officer and Principal Financial and Accounting Officer)

6561


Delaware						94-2579683
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)



TABLE OF CONTENTS			Page
PART I - FINANCIAL INFORMATION			2
	Item 1.	Financial Statements (Unaudited)	2
		Consolidated Statements of Operations for the Three ~~and Six~~ Months Ended ~~January~~October 1,~~, 202~~2 2022 and ~~January~~October 2,~~, 202~~1 2021	2
		Consolidated Statements of Comprehensive Income (Loss) for the Three ~~and Six~~ Months Ended ~~January~~O ctober 1 , ~~202~~22022 and ~~January~~O ctober 2 , 20 2 12021	3
		Consolidated Balance Sheets as of ~~January~~October 1 , ~~202~~2022 and July 2 ~~and July 3, 2021~~, 20 2 2	4
		Consolidated Statements of Cash Flows for the ~~Six~~Three Months Ended ~~January~~O ctober 1 , ~~202~~2 2022 and ~~January~~October 2 , ~~202~~12021	5
		Consolidated Statements of Stockholders’ Equity for the Three ~~and Six~~Months Ended ~~January~~October 1 , ~~202~~2 2022 and ~~January~~October 2 , ~~202~~12021	6
		Notes to Consolidated Financial Statements	87
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3329
	Item 3.	Quantitative and Qualitative Disclosure About Market Risks	4742
	Item 4.	Controls and Procedures	4742

PART II - OTHER INFORMATION			4843
	Item 1.	Legal Proceedings	4843
	Item 1A.	Risk Factors	4944
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6459
	Item 3.	Defaults Upon Senior Securities	6459
	Item 4.	Mine Safety Disclosures	6459
	Item 5.	Other Information	6459
	Item 6.	Exhibits	6460

SIGNATURES			6561


		Three Months Ended				Six Months Ended					Three Months Ended
		January 1, 2022		January 2, 2021		January 1, 2022		January 2, 2021			October 1, 2022		October 2, 2021
Revenues:	Revenues:									Revenues:
Product revenue	Product revenue	$	277.4	$	262.1	$	566.5	$	510.0	Product revenue	$	267.7	$	289.1
Service revenue	Service revenue	37.4		37.8		75.1		74.6		Service revenue	42.5		37.7
Total net revenue	Total net revenue	314.8		299.9		641.6		584.6		Total net revenue	310.2		326.8
Cost of revenues:	Cost of revenues:									Cost of revenues:
Product cost of revenue	Product cost of revenue	100.3		96.1		207.0		189.7		Product cost of revenue	98.9		106.7
Service cost of revenue	Service cost of revenue	16.6		15.3		33.8		28.8		Service cost of revenue	19.4		17.2
Amortization of acquired technologies	Amortization of acquired technologies	7.4		8.4		15.3		16.6		Amortization of acquired technologies	7.1		7.9
Total cost of revenues	Total cost of revenues	124.3		119.8		256.1		235.1		Total cost of revenues	125.4		131.8
Gross profit	Gross profit	190.5		180.1		385.5		349.5		Gross profit	184.8		195.0
Operating expenses:	Operating expenses:									Operating expenses:
Research and development	Research and development	50.5		50.0		104.1		98.8		Research and development	52.6		53.6
Selling, general and administrative	Selling, general and administrative	88.2		79.5		180.0		160.9		Selling, general and administrative	80.2		91.8
Amortization of other intangibles	Amortization of other intangibles	2.6		8.1		5.3		16.6		Amortization of other intangibles	2.2		2.7
Restructuring and related (benefits) charges		(0.1)		0.2		(0.1)		(0.4)

Total operating expenses	Total operating expenses	141.2		137.8		289.3		275.9		Total operating expenses	135.0		148.1
Income from operations	Income from operations	49.3		42.3		96.2		73.6		Income from operations	49.8		46.9
Loss on convertible note settlement (Note 11)	Loss on convertible note settlement (Note 11)	(6.4)		—		(92.3)		—		Loss on convertible note settlement (Note 11)	—		(85.9)
Interest income and other income, net	Interest income and other income, net	1.1		1.1		2.5		1.7		Interest income and other income, net	1.1		1.4
Interest expense	Interest expense	(7.1)		(3.6)		(10.7)		(7.2)		Interest expense	(6.1)		(3.6)
Income (loss) before income taxes	Income (loss) before income taxes	36.9		39.8		(4.3)		68.1		Income (loss) before income taxes	44.8		(41.2)
Provision for income taxes	Provision for income taxes	2.3		12.5		15.9		21.1		Provision for income taxes	12.2		13.6

Net income (loss)	Net income (loss)	$	34.6	$	27.3	$	(20.2)	$	47.0	Net income (loss)	$	32.6	$	(54.8)

Net income (loss) per share:	Net income (loss) per share:									Net income (loss) per share:
Basic	Basic	$	0.15	$	0.12	$	(0.09)	$	0.21	Basic	$	0.14	$	(0.24)
Diluted	Diluted	$	0.14	$	0.12	$	(0.09)	$	0.20	Diluted	$	0.14	$	(0.24)

Shares used in per-share calculations:
Shares used in per share calculations:										Shares used in per share calculations:
Basic	Basic	236.0		228.8		233.6		228.8		Basic	226.3		231.1
Diluted	Diluted	242.3		231.1		233.6		231.5		Diluted	230.4		231.1


		Three Months Ended				Six Months Ended					Three Months Ended
		January 1, 2022		January 2, 2021		January 1, 2022		January 2, 2021				October 1, 2022		October 2, 2021
Net income (loss)	Net income (loss)	$	34.6	$	27.3	$	(20.2)	$	47.0	Net income (loss)		$	32.6	$	(54.8)
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Net change in cumulative translation adjustment, net of tax	Net change in cumulative translation adjustment, net of tax	(4.1)		34.4		(13.7)		62.0		Net change in cumulative translation adjustment, net of tax		(42.6)		(9.6)

Unrealized holding gain arising during period	Unrealized holding gain arising during period	—		—		0.1		—		Unrealized holding gain arising during period		—		0.1

Amortization of actuarial income		0.7		0.7		1.5		1.5
Net change in accumulated other comprehensive income (loss)		(3.4)		35.1		(12.1)		63.5
Comprehensive income (loss)		$	31.2	$	62.4	$	(32.3)	$	110.5
Amortization of net actuarial losses and other pension adjustments										Amortization of net actuarial losses and other pension adjustments		(0.3)		0.8

Net change in accumulated other comprehensive loss										Net change in accumulated other comprehensive loss		(42.9)		(8.7)
Comprehensive loss										Comprehensive loss		$	(10.3)	$	(63.5)


		January 1, 2022		July 3, 2021			October 1, 2022		July 2, 2022
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	732.1	$	697.8	Cash and cash equivalents	$	512.6	$	559.9
Short-term investments	Short-term investments	1.7		1.6		Short-term investments	1.3		1.4
Restricted cash	Restricted cash	4.7		4.3		Restricted cash	3.2		3.6
Accounts receivable, net	Accounts receivable, net	258.3		256.5		Accounts receivable, net	246.3		260.9
Inventories, net	Inventories, net	114.4		94.9		Inventories, net	110.6		110.1
Prepayments and other current assets	Prepayments and other current assets	69.4		57.0		Prepayments and other current assets	76.8		69.2

Total current assets	Total current assets	1,180.6		1,112.1		Total current assets	950.8		1,005.1
Property, plant and equipment, net	Property, plant and equipment, net	213.3		196.0		Property, plant and equipment, net	231.7		228.9
Goodwill, net	Goodwill, net	393.0		396.5		Goodwill, net	387.8		387.6
Intangibles, net	Intangibles, net	68.1		88.0		Intangibles, net	48.7		54.2
Deferred income taxes	Deferred income taxes	102.2		109.3		Deferred income taxes	83.0		86.3
Other non-current assets	Other non-current assets	62.4		59.5		Other non-current assets	63.1		65.8

Total assets	Total assets	$	2,019.6	$	1,961.4	Total assets	$	1,765.1	$	1,827.9
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	68.0	$	63.2	Accounts payable	$	62.0	$	58.3
Accrued payroll and related expenses	Accrued payroll and related expenses	77.4		76.0		Accrued payroll and related expenses	48.6		76.0
Deferred revenue	Deferred revenue	62.8		69.7		Deferred revenue	71.4		81.0
Accrued expenses	Accrued expenses	30.1		24.8		Accrued expenses	26.7		29.3
Short-term debt (Note11)	Short-term debt (Note11)	—		456.6		Short-term debt (Note11)	68.0		68.4
Other current liabilities	Other current liabilities	46.8		57.1		Other current liabilities	56.5		56.3
Total current liabilities	Total current liabilities	285.1		747.4		Total current liabilities	333.2		369.3
Long-term debt	Long-term debt	755.8		224.1		Long-term debt	616.9		616.5
Other non-current liabilities	Other non-current liabilities	203.9		226.0		Other non-current liabilities	166.6		170.4

Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:

Common stock, $0.001 par value; 1 billion shares authorized; 233 million shares at January 1, 2022 and 228 million shares at July 3, 2021, issued and outstanding		0.2		0.2
Preferred stock, $0.001 par value; 1 million shares authorized, no shares issued or outstanding at October 1, 2022 and July 2, 2022						Preferred stock, $0.001 par value; 1 million shares authorized, no shares issued or outstanding at October 1, 2022 and July 2, 2022	—		—
Common stock, $0.001 par value; 1 billion shares authorized; 227 million shares at October 1, 2022 and 226 million shares at July 2, 2022, issued and outstanding						Common stock, $0.001 par value; 1 billion shares authorized; 227 million shares at October 1, 2022 and 226 million shares at July 2, 2022, issued and outstanding	0.2		0.2
Additional paid-in capital	Additional paid-in capital	70,354.3		70,183.2		Additional paid-in capital	70,375.9		70,370.2
Accumulated deficit	Accumulated deficit	(69,470.4)		(69,322.3)		Accumulated deficit	(69,528.4)		(69,542.3)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(109.3)		(97.2)		Accumulated other comprehensive loss	(199.3)		(156.4)
Total stockholders’ equity	Total stockholders’ equity	774.8		763.9		Total stockholders’ equity	648.4		671.7
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	2,019.6	$	1,961.4	Total liabilities and stockholders’ equity	$	1,765.1	$	1,827.9




Three Months Ended January 1, 2022
	Common Stock
	Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance at October 2, 2021	239.7	$	0.2	$	70,349.9	$	(69,385.6)	$	(105.9)	$	858.6

Net loss	—	—		—		34.6		—		34.6
Other comprehensive loss	—	—		—		—		(3.4)		(3.4)
Shares issued under employee stock plans, net of tax	0.3	—		(1.4)		—		—		(1.4)
Stock-based compensation	—	—		13.2		—		—		13.2
Repurchase of common stock	(7.5)	—		—		(119.4)		—		(119.4)
Convertible note settlement (Note 11)	—	—		(7.4)				—		(7.4)
Balance at January 1, 2022	232.5	$	0.2	$	70,354.3	$	(69,470.4)	$	(109.3)	$	774.8




Three Months Ended October 1, 2022
	Common Stock
	Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance at July 2, 2022	226.4	$	0.2	$	70,370.2	$	(69,542.3)	$	(156.4)	$	671.7

Net income	—	—		—		32.6		—		32.6
Other comprehensive loss	—	—		—		—		(42.9)		(42.9)
Shares issued under employee stock plans, net of tax	1.7	—		(7.3)		—		—		(7.3)
Stock-based compensation	—	—		13.0		—		—		13.0
Repurchase of common stock	(1.3)	—		—		(18.7)		—		(18.7)

Balance at October 1, 2022	226.8	$	0.2	$	70,375.9	$	(69,528.4)	$	(199.3)	$	648.4




Three Months Ended January 2, 2021
	Common Stock
	Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance at October 3, 2020	229.3	$	0.2	$	70,152.5	$	(69,334.2)	$	(137.5)	$	681.0

Net income	—	—		—		27.3		—		27.3
Other comprehensive income	—	—		—		—		35.1		35.1
Shares issued under employee stock plans, net of tax	0.5	—		(2.5)		—		—		(2.5)
Stock-based compensation	—	—		9.8		—		—		9.8
Repurchase of common stock	(1.3)	—		—		(17.1)		—		(17.1)
Balance at January 2, 2021	228.5	$	0.2	$	70,159.8	$	(69,324.0)	$	(102.4)	$	733.6




Six Months Ended January 1, 2022
	Common Stock
	Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance at July 3, 2021	228.3	$	0.2	$	70,183.2	$	(69,322.3)	$	(97.2)	$	763.9

Net loss	—	—		—		(20.2)		—		(20.2)
Other comprehensive loss	—	—		—		—		(12.1)		(12.1)
Shares issued under employee stock plans, net of tax	1.6	—		(7.2)		—		—		(7.2)
Stock-based compensation	—	—		26.6		—		—		26.6
Repurchase of common stock	(8.0)	—		—		(127.9)		—		(127.9)
Convertible note settlement (Note 11)	10.6	—		151.7				—		151.7
Balance at January 1, 2022	232.5	$	0.2	$	70,354.3	$	(69,470.4)	$	(109.3)	$	774.8




Six Months Ended January 2, 2021
	Common Stock
	Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance at June 27, 2020	228.3	$	0.2	$	70,146.1	$	(69,347.2)	$	(165.9)	$	633.2

Net income	—	—		—		47.0		—		47.0
Other comprehensive income	—	—		—		—		63.5		63.5
Shares issued under employee stock plans, net of tax	2.1	—		(8.6)		—		—		(8.6)
Stock-based compensation	—	—		22.3		—		—		22.3
Repurchase of common stock	(1.9)	—		—		(23.8)		—		(23.8)
Balance at January 2, 2021	228.5	$	0.2	$	70,159.8	$	(69,324.0)	$	(102.4)	$	733.6




Three Months Ended October 2, 2021
	Common Stock
	Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balance at July 3, 2021	228.3	$	0.2	$	70,183.2	$	(69,322.3)	$	(97.2)	$	763.9

Net loss	—	—		—		(54.8)		—		(54.8)
Other comprehensive loss	—	—		—		—		(8.7)		(8.7)
Shares issued under employee stock plans, net of tax	1.3	—		(5.8)		—		—		(5.8)
Stock-based compensation	—	—		13.4		—		—		13.4
Repurchase of common stock	(0.5)	—		—		(8.5)		—		(8.5)
Convertible note settlement (Note 11)	10.6	—		159.1		—		—		159.1
Balance at October 2, 2021	239.7	$	0.2	$	70,349.9	$	(69,385.6)	$	(105.9)	$	858.6


~~Table of Contents~~
~~VIAVI SOLUTIONS INC.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~
















	July 3, 2021
	As Reported		Adjustment		As Adjusted
LIABILITIES AND STOCKHOLDERS’ EQUITY
Short-term debt	$	414.2	$	42.4	$	456.6
Long-term debt	209.8		14.3		224.1
Mezzanine equity - convertible notes	45.8		(45.8)		—
Additional paid-in capital	70,265.5		(82.3)		70,183.2
Accumulated deficit	$	(69,393.7)	$	71.4	$	(69,322.3)


		Unrealized losses on available-for sale investments		Foreign currency translation adjustments, net of tax		Change in unrealized components of defined benefit obligations (1)		Total			Unrealized losses on available-for sale investments		Foreign currency translation adjustments, net of tax		Change in unrealized components of defined benefit obligations (1)		Total
Beginning balance as of July 3, 2021		$	(5.1)	$	(68.1)	$	(24.0)	$	(97.2)
Beginning balance as of July 2, 2022										Beginning balance as of July 2, 2022	$	(5.0)	$	(144.2)	$	(7.2)	$	(156.4)
Other comprehensive loss before reclassification	Other comprehensive loss before reclassification	0.1		(13.7)		—		(13.6)		Other comprehensive loss before reclassification	—		(42.6)		—		(42.6)
Amounts reclassified out of accumulated other comprehensive loss	Amounts reclassified out of accumulated other comprehensive loss	—		—		1.5		1.5		Amounts reclassified out of accumulated other comprehensive loss	—		—		(0.3)		(0.3)
Net current-period other comprehensive loss	Net current-period other comprehensive loss	0.1		(13.7)		1.5		(12.1)		Net current-period other comprehensive loss	—		(42.6)		(0.3)		(42.9)
Ending balance as of January 1, 2022		$	(5.0)	$	(81.8)	$	(22.5)	$	(109.3)
Ending balance as of October 1, 2022										Ending balance as of October 1, 2022	$	(5.0)	$	(186.8)	$	(7.5)	$	(199.3)


	October 1, 2022
		Three Months Ended
Deferred revenue:
Balance at beginning of period		$	100.4
Revenue deferrals for new contracts (1)		26.6
Revenue recognized during the period (2)		(35.5)
Balance at end of period (3)		$	91.5


	July 3, 2021		Charged to Costs and Expenses		Deductions (1)		January 1, 2022
Allowance for credit losses	$	2.0	$	0.4	$	(0.9)	$	1.5


	October 1, 2022		July 2, 2022
Refundable income taxes	$	25.1	$	14.5
Prepayments	13.8		16.0
Advances to contract manufacturers	12.7		11.8
Transaction tax receivables	8.3		10.4
Asset held for sale	2.5		2.5
Other current assets	14.4		14.0
Prepayments and other current assets	$	76.8	$	69.2


	October 1, 2022		July 2, 2022



Fair value of forward contracts	$	11.2	$	8.4
Income tax payable	10.2		9.6
Operating lease liabilities (Note 12)	9.8		10.1
Interest payable	8.3		4.6
Transaction tax payable	4.6		11.5
Warranty accrual	4.0		4.4

Fair value of contingent consideration	2.5		1.8
Other	5.9		5.9
Other current liabilities	$	56.5	$	56.3


	January 1, 2022		July 3, 2021

Customer prepayments	$	1.5	$	0.4
Restructuring accrual	—		0.5
Income tax payable	9.3		22.6
Warranty accrual, current	4.6		4.3
Transaction tax payable	5.3		4.9

Operating lease liabilities (Note 12)	9.7		11.6

Other	16.4		12.8
Other current liabilities	$	46.8	$	57.1





	Network Enablement		Service Enablement		Optical Security and Performance Products		Total
Balance as of July 3, 2021	$	349.7	$	4.6	$	42.2	$	396.5


Currency translation adjustments	(3.3)		(0.2)		—		(3.5)
Balance as of January 1, 2022	$	346.4	$	4.4	$	42.2	$	393.0


As of January 1, 2022		Gross Carrying Amount		Accumulated Amortization		Net
As of October 1, 2022								As of October 1, 2022	Gross Carrying Amount		Accumulated Amortization		Net
Acquired developed technology	Acquired developed technology	$	422.9	$	(370.4)	$	52.5	Acquired developed technology	$	418.0	$	(380.2)	$	37.8
Customer relationships	Customer relationships	194.2		(181.8)		12.4		Customer relationships	185.6		(175.1)		10.5
Other (1)	Other (1)	37.4		(34.2)		3.2		Other (1)	34.6		(34.2)		0.4
Total intangibles	Total intangibles	$	654.5	$	(586.4)	$	68.1	Total intangibles	$	638.2	$	(589.5)	$	48.7


As of July 3, 2021		Gross Carrying Amount		Accumulated Amortization		Net
As of July 2, 2022								As of July 2, 2022	Gross Carrying Amount		Accumulated Amortization		Net
Acquired developed technology	Acquired developed technology	$	423.8	$	(356.9)	$	66.9	Acquired developed technology	$	416.6	$	(375.8)	$	40.8
Customer relationships	Customer relationships	195.4		(180.8)		14.6		Customer relationships	189.7		(177.8)		11.9

Other (1)	Other (1)	37.9		(31.4)		6.5		Other (1)	36.0		(34.5)		1.5
Total intangibles	Total intangibles	$	657.1	$	(569.1)	$	88.0	Total intangibles	$	642.3	$	(588.1)	$	54.2


Fiscal Years	Fiscal Years			Fiscal Years
Remainder of 2022		$	18.9
2023		25.5
Remainder of 2023				Remainder of 2023	$	17.5
2024	2024	10.5		2024	12.8
2025	2025	7.0		2025	9.3
2026	2026	3.4		2026	5.3
2027				2027	2.0
Thereafter	Thereafter	2.8		Thereafter	1.8
Total amortization	Total amortization	$	68.1	Total amortization	$	48.7


	January 1, 2022		July 3, 2021
Principal amount of 1.00% Senior Convertible Notes due 2024, short-term	$	—	$	460.0
Unamortized Senior Convertible Notes debt issuance cost, short-term	—		(3.4)
Short-term debt	$	—	$	456.6

Principal amount of 3.75% Senior Notes, long-term	$	400.0	$	—
Unamortized 3.75% Senior Notes debt issuance cost, long-term	(6.8)		—
Principal amount of 1.75% Senior Convertible Notes, long-term	110.7		225.0
Principal amount of 1.00% Senior Convertible Notes, long-term	253.7		—
Unamortized Senior Convertible Notes debt issuance cost, long-term	(1.8)		(0.9)
Long-term debt	$	755.8	$	224.1



	~~January~~October 1, 2022
Other non-current assets	$	~~44.9~~41.6
Total operating ROU assets	$	~~44.9~~41.6

Other current liabilities	$	~~9.7~~9.8
Other non-current liabilities	~~32.1~~30.5
Total operating lease liabilities	$	~~41.8~~40.3


Fiscal Years	Fiscal Years	Operating Leases		Fiscal Years	Operating Leases
Remainder of 2022		$	4.4
2023		10.4
Remainder of 2023				Remainder of 2023	$	7.3
2024	2024	7.9		2024	9.7
2025	2025	6.0		2025	7.6
2026	2026	4.7		2026	5.8
2027				2027	4.5
Thereafter	Thereafter	16.4		Thereafter	12.3
Total lease payments	Total lease payments	49.8		Total lease payments	47.2
Less: Interest	Less: Interest	(8.0)		Less: Interest	(6.9)
Present value of lease liabilities	Present value of lease liabilities	$	41.8	Present value of lease liabilities	$	40.3


Fiscal Years	Operating Leases
2022	$	11.7
2023	9.4
2024	6.8
2025	4.9
2026	3.8
Thereafter	13.7
Total lease payments	50.3
Less: Interest	(7.9)
Present value of lease liabilities	$	42.4


	Three Months Ended January 1, 2022
	Network and Service Enablement
	Network Enablement			Service Enablement			Network and Service Enablement			Optical Security and Performance Products			Other Items (1)		Consolidated GAAP Measures
Product revenue	$	189.6		$	17.2		$	206.8		$	70.6		$	—	$	277.4
Service revenue	24.8			12.6			37.4			—			—		37.4
Net revenue	$	214.4		$	29.8		$	244.2		$	70.6		$	—	$	314.8

Gross profit	$	138.0		$	21.4		$	159.4		$	39.7		$	(8.6)	$	190.5
Gross margin	64.4		%	71.8		%	65.3		%	56.2		%			60.5		%

Operating income							$	45.6		$	27.7		$	(24.0)	$	49.3
Operating margin							18.7		%	39.2		%			15.7		%