Viavi Solutions Inc. announced that it will convert $103.463 million of its 1.625 % convertible senior notes due 2026 into 7,871,043 shares of common stock at a conversion price of $17.88 per share.
The conversion is expected to close around December 22, 2025, reducing the company’s outstanding debt by $103.463 million and leaving approximately $49.037 million of notes still outstanding. The move is part of Viavi’s plan to prepay at least $100 million of a $600 million term loan that was used to fund the October 2025 acquisition of Spirent Communications’ high‑speed Ethernet, network security, and channel emulation testing business.
By converting debt into equity, Viavi strengthens its balance sheet, improves leverage ratios, and frees up capital for acquisitions and capital expenditures. The transaction does dilute existing shareholders, but the expected benefits in financial flexibility and reduced interest expense are viewed as outweighing the dilution effect.
The conversion follows a strong fiscal first‑quarter 2026 performance: revenue rose 25.6 % year‑over‑year to $299.1 million and EPS of $0.15 beat consensus of $0.13. The beat was driven by robust demand in the Network and Service Enablement segment—particularly in data‑center ecosystems—combined with disciplined cost management that kept margins stable.
Management highlighted that the company is maintaining a strong gross margin while working to improve operating and net margins. Guidance for the second quarter of fiscal 2026 projects revenue of $360–$370 million and EPS of $0.18–$0.20, reflecting confidence in continued demand and cost discipline.
The conversion also addresses concerns raised by S&P Global, which downgraded Viavi to B+ in October 2025 after the Spirent acquisition increased debt. By reducing debt, Viavi aims to mitigate credit risk and improve its rating prospects.
Overall, the conversion is a significant financing event that positions Viavi to pursue growth opportunities while managing leverage, aligning with its strategy to expand its product portfolio and support data‑center and network testing markets.
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