Viavi Solutions Inc. (NASDAQ:VIAV) Q3 2018 Earnings Conference Call - Preliminary Transcript
May 03, 2018 • 04:30 pm ET
Good afternoon. My name is Jessa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Viavi Solutions Fiscal Third Quarter Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.
Mr. Bill Ong, Head of Investor Relations, you may begin your conference.
Thank you, Jessica. Welcome to Viavi Solutions third quarter fiscal year 2018 earnings call. My name is Bill Ong, Head of Investor Relations. Joining me on today's call are Oleg Khaykin, President and CEO, and Amar Maletira, CFO.
Please note, this call will include forward-looking statements about the company's financial performance. These statements are subject to risks and uncertainties that could cause actual results to differ materially from current expectations. We encourage you to review our most recent SEC filings, particularly the risk factors described in those filings. The forward-looking statements, including guidance we provide during this call, are valid only as of today. Viavi undertakes no obligation to update these statements.
Please also note that unless we state otherwise, all results except revenue are non-GAAP. We reconcile these non-GAAP results to our preliminary GAAP financials and discuss their usefulness and limitations in today's earnings release. The release, plus our supplementary slides which include historical financial tables, are available on our website. Finally, we are recording today's call, and we'll make the recording available by 4:30 p.m. Pacific Time this evening on our website.
I would now like to turn the call over to Amar.
Thank you, Bill. We closed the acquisition of the AvComm and Wireless businesses on March 15. Hence Viavi's fiscal Q3 reported results into approximately two weeks of financials of the acquired businesses. Viavi's revenue including the acquisition was at $219.4 million operating profit was at $33.2 million with operating margin at 15.1% and non-GAAP EPS at $0.13. The acquired businesses which were reported in the NE segment contributed $12.3 million of revenue in our fiscal Q3 and an operating profit of $4.1 million.
Please note that the revenue from the acquired businesses was queued towards the end of fiscal Q3 while the expenses were roughly linear within the quarter. Now excluding the acquisition, Viavi's fiscal Q3 results for the core business exceeded the midpoint of guidance in revenue, non-GAAP operating profit and non-GAAP EPS. Revenue at $207.1 million exceeded our guidance midpoint of $200 million with NSE overachieving while OSP was slightly above the midpoint of our revenue guidance.
Revenue grew 5.7% year-on-year driven by growth in our NSE business. Operating margin at 14.1% beat the 11.5% to 13.5% guidance range with both NSE and OSP contributing to the upside. EPS at $0.11 exceeded our $0.08 to $0.10 guidance range and grew $0.02 from a year ago EPS of $0.09. Now moving to our reported Q3 results by business segment. Starting with NSE. NSE revenue at $157.1 million including $12.3 million from the acquired