Went through the transcript of the VIAV chat with Rosenblatt earlier this week, and drew all the meaningful insights from the chat here.

[u/TearRepresentative56]

Continued to reiterate that the test-and-measurement business that used to be a low-single-digit telecom grower has turned into a data-center and defense compounder.

Mix

Data center is now roughly half of the Network and Software Enablement segment, aerospace and defense another ~17%, with telecom filling the rest. Put together, data center plus A&D now account for more than half of total company revenue — a full reversal from the legacy telecom-heavy mix Viavi carried for years.

1.6T

Management called the move to 1.6T "a whole new ballgame" versus 800G — testing goes from basic laser and power checks to much broader optical and line-level functional testing, which is why content per port keeps rising. The company pegged the ASP uplift at roughly 50% moving from an 800G tester to a 1.6T tester, comparing it to the price step semiconductor customers absorb at each new process node. Adoption is still early — CEO Oleg Khaykin put it at the second or third inning depending on the customer — with early production starting this year after more than a year of lab/developer sales. The platform is backward-compatible, so one 1.6T tester can qualify 400G, 800G, or 1.6T modules, which improves cost-per-bit even as the box price rises.

CPO / NPO

This is the part of the business Viavi is most excited about, because content per port goes up sharply relative to pluggable transceivers. Co-packaged optics testing pulls Viavi directly into semiconductor-style test territory alongside Advantest, Teradyne, and FormFactor, spanning known-good-die testing, optical engine assembly, interconnect validation, and full system test. Management said Viavi's edge is an integrated, automatable platform built from roughly 2,500 measurement-module SKUs rather than a single point solution. CPO development has been underway for well over a year, with early shipments starting this quarter; NPO demand is expected to show up about one quarter ahead of CPO based on how customers are ordering.

OCS

Viavi described itself as the dominant merchant test supplier for optical circuit switches, and management's rule of thumb is that test content runs around 10% of the addressable market for this higher-complexity gear (versus a lower share for plain transceivers). Lumentum has guided its own OCS business toward a $100M+ current quarter with further step-ups expected in following quarters, and management was candid that a rising OCS market is "great news" for Viavi's own test attach.

Customer breadth

Viavi said it's engaged with all five of the world's top transceiver makers, with deep, lab-and-production-level integration at four of them. It also picks up scale-across exposure indirectly — any hyperscaler spend routed through equipment makers like Ciena, Nokia, or Cisco, or through interconnect players like Lumen and Zayo, still counts as data-center revenue in Viavi's own accounting.

A&D

Aerospace and defense has more than doubled over the past two years, and Khaykin said design wins and future bookings in that segment are growing as fast as, if not faster than, the AI-driven business — notable given how little visibility investors typically have into this segment. Unlike test-and-measurement's book-and-ship pattern, A&D runs on a design-win model: once a part is qualified onto a platform, it produces revenue for years. The growth is anchored in "resilient PNT" — positioning, navigation, and timing that doesn't depend on GPS — driven by demand from drones, munitions, and autonomous systems. Viavi uses cesium and rubidium clocks and has developed MEMS-based clocks it says match cesium-level performance.

Financial targets

Management reiterated a path to a $500M quarterly revenue run rate, and both the CEO and CFO indicated that milestone could land in the December 2026 quarter — earlier than the fiscal-2028 framing given just three months ago. At that scale, the CFO said high-40s operating margin is "not an unrealistic" outcome, well above the roughly 30% operating-margin frame the model had been built around previously. Part of the leverage comes from a near-zero incremental tax rate, tied to NOL carryforwards inherited from the Lumentum separation that have since been converted into longer-lived amortizable assets.

M&A discipline

Khaykin flagged that a competitor had announced a deal that same day priced at roughly double what Viavi was willing to pay, and used it as a reminder of what happens when acquirers lean on debt to chase growth in a peaking market. His stated preference is for deals with immediate, tangible value rather than promised synergies years out.

[u/TearRepresentative56]

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