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| And the second half, we should see a beginning of recovery in the anti-counterfeiting demand, which obviously will drive significant operating leverage for our 3 businesses |
| Now in case of the, I think, cable operators, they are seeing it as a very good opportunity for them, since I think many of them are healthier than telecom operators |
| So in that respect, we feel our SE business on both on the enterprise and service providers side has some very exciting story to tell |
| Our balance sheet is strong |
| So we see -- we do feel that SE has every opportunity to become a -- gaining momentum through this year, which is finally -- this is the year it's going to finally start contributing to the overall |
| We are seeing pretty good traction, and we are winning some pretty -- against some very heavy hitters in the market, which would give me confidence that this is not a one-off type opportunity |
| Finalization of this plan is below our original expected non-recurring expense of $15 million and better than originally anticipated savings commitment of $25 million |
| Reduced levels of operating expenses, in combination with an improved capital structure, will allow us to benefit from more meaningful operating and financial leverage as revenue recovers |
| And the area where we have a very strong product offering today is around the AI Ops, which is the -- in kind of your automation -- network operations center automation, the artificial intelligence, helping you with the preventive maintenance and things around that landscape |
| So we actually feeling pretty good about our SE business these days |
| When somebody is building network, it's very good for us |
| I mean certainly AT&T has promised that they're going to see -- deliver much improved cash flows in the back half |
| These initiatives, combined with our strong position in our traditional markets, are expected to result in strong operating and financial leverage as our revenue rebounds |
| And we think that they could achieve pretty good success in the coming years |
| As a result, our fiscal fourth quarter revenue came in slightly above the higher end of our guidance, and we expect the stabilization and recovery momentum to continue throughout the fiscal year |
| That said, the fourth quarter revenue came in slightly better than expected, helped by stronger demand for anti-counterfeiting products |
| So you then overlay the operating and financial leverage on to it, right? And that shows you, okay, even at like roughly flattish up top line, you're going to see a nice growth at the EPS level |
| Op com business continued to perform well, driven by robust demand from the avionics and Mil/Aero customers |
| That's actually very good for us |
| And in that respect, I mean even though those things take longer lead times to go from booking into revenue, it's nevertheless a positive momentum |
| NE was up double-digit percentage sequentially, reflecting a rebound in demand from cable service providers upgrading their networks |
| And then the last but not the least, I think the -- on our service enablement business, the software business, we feel pretty good about the momentum and the opportunity funnel that we are seeing for our new solutions |
| Operating profit margins is expected to be 13.5%, plus or minus 70 basis points, an anticipated improvement of 180 basis points sequentially; and EPS to be between $0.09 and to $0.11 |
| And I'd say the -- and we know Mil/Aero is actually pretty strong as well |
| Fiscal Q4 revenue came in at $263.6 million, slightly ahead of the high end of our guidance range of $242 million to $262 million, up sequentially by 6.4% and down 21.4% on a year-over-year basis |
| Fourth quarter revenue at $65.7 million ended up slightly ahead of the midpoint of our guidance range of $63 million to $67 million and down 26.3% year-over-year |
| Despite headwinds, cash flow from operations for the full year continued to be solid, as we generated $114.1 million in fiscal 2023 and $63 million in free cash flow compared to $105.6 million free cash flow in fiscal 2022 |
| Despite the slowdown in overall service provider spend, some service providers have begun to free up funds for network maintenance and optimization, which benefits Viavi's NSE business segment |
| But also I'm looking at the booking funnel and the opportunity funnel, and it is a hell of a lot healthier than I would say it was in the March quarter of this year, where everything was just shut down |
| EPS at $0.10 ended above the high end of the guidance range of $0.07 to $0.09, up $0.02 sequentially and down $0.14 year-over-year |
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| The operating profit margin of 29.5% came in slightly below the guidance range of 30% to 31% and declined 9.1% year-over-year |
| SE gross profit margins at 66.3% decreased 500 basis points from last year, primarily due to unfavorable product mix |
| Gross profit margin at 46.6% decreased 9.3% year-over-year, slightly lower than expected, mainly a result of leverage on lower revenue |
| The full year revenues decreased from record levels of $1.3 billion in 2022 to $1.1 billion in fiscal 2023, down 14.4%, a result of an overall slowdown in service providers, network equipment manufacturer and semiconductor spend |
| NSE full year fiscal revenue came in at $801.2 million, down 15.6% year-over-year from $949.1 million |
| NSE gross profit margin at 62.1% decreased by 280 basis points year-over-year |
| Mainly because of lower revenues, Viavi's full year 2023 operating profit margin at 15.6% declined 6.6% from 22.2% in 2022 |
| Within our NSE segment, operating profit margins declined 8% from 15.6% in 2022 to 7.6% in 2023 |
| The OSP demand environment continues to be challenging |
| OSP also experienced contraction, as central banks digested inventory builds during COVID, reducing revenues from $343.3 million in 2022 to $304.9 million in fiscal 2023, or down 11.2% |
| Fiscal 2023 was a challenging year for Viavi |
| Within NSE, NE gross profit margins at 61.5% decreased 270 basis points from the prior year, primarily due to leverage on lower volume in combination with product mix |
| But what we are seeing very interesting is the lack of liquidity |
| And I think in that respect, we're taking a more cautious outlook on the volumes that are going to be demanded this fiscal year |
| The demand for anti-counterfeiting products was impacted by the inventory corrections as governments dialed back fiscal stimulus, and 3D sensing was impacted by weaker demand for smartphones |
| And I think what we are seeing is somewhat more sluggish smartphone demand than we saw, let's say, a year ago |
| Early in the fiscal year, NSE demand experienced a rapid slowdown in orders from service providers |
| So I think this year, we believe it's running below the baseline because of the 2 -- it's a 2 for a fact |
| 3D sensing revenue was impacted by seasonally lower demand for smartphones and the supply chain transition to new phone models |
| Fiscal 2023 was a very challenging year for Viavi |
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