• Revenue: $1.12 billion, essentially flat compared to the prior year quarter.
• Adjusted EBITDA: $393 million, an increase of 3% with a 35% adjusted EBITDA margin.
• Net Loss: $158 million, increased from a net loss of $124 million a year ago.
• Operating Cash Flow: $219 million, up more than 60% year-over-year.
• CapEx: $253 million, down 40% year-over-year from $421 million.
• Backlog: $3.5 billion, down $181 million.
• Defense & Advanced Technologies Revenue: $303 million, up 20% year-over-year.
• Aviation Service Revenue: Increased approximately 12% year-over-year.
• Maritime Revenue: Declined 8% due to legacy L-band offerings and ARPU pressure.
• Net Leverage: Approximately 3.7 times trailing 12 months adjusted EBITDA.

• Warning! GuruFocus has detected 5 Warning Signs with VSAT.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Viasat Inc (NASDAQ:VSAT) reported solid third-quarter fiscal-year 2025 results with revenue of $1.12 billion and adjusted EBITDA of $393 million, indicating strong financial performance.
• The company experienced significant growth in its Defense & Advanced Technologies segment, with revenues increasing by almost 20% year-over-year.
• Viasat Inc (NASDAQ:VSAT) is making progress in achieving capital synergies and operating cost efficiencies, which are supporting earnings and driving cash conversion.
• The Aviation segment showed robust growth, with commercial in-flight connectivity aircraft in service growing by about 13% year-over-year and business jets by 18%.
• The company is expanding its customer base in the Aviation sector, both in the US and internationally, and has secured a full fleet order from STARLUX in Asia Pacific.

Negative Points

• Viasat Inc (NASDAQ:VSAT) faced challenges in its U.S. fixed broadband business, with continued revenue pressure as capacity is focused on higher-value commercial aviation business.
• Maritime revenue declined by 8% due to incremental ARPU pressure and continued L-band migration, impacting overall financial performance.
• The company is experiencing a slow recovery of OEM deliveries in the Aviation segment, which may result in being below the prior target of 4,200 aircraft in service by the end of the fiscal year.
• Viasat Inc (NASDAQ:VSAT) has a high debt level, which is pressuring its debt and equity, and reducing leverage is a top priority for capital allocation.
• The company anticipates a slight delay in the in-service date for ViaSat-3 Flight 3, which may shift into calendar year 2026, potentially impacting future revenue generation.

Q & A Highlights

Q: Can you provide details on the locations and coverage plans for ViaSat-3 Flights 2 and 3, and any impact on in-flight connectivity contracts? A: Mark Dankberg, CEO, explained that the satellites are designed to be flexible in their locations, with plans for Flight 2 to cover the Americas and Flight 3 to cover Asia Pacific. The company has optimized existing satellite capacity and incorporated third-party capacity, reducing the risk of launch delays. This has not impacted customer contracts, as evidenced by a new contract with STARLUX in Asia Pacific.

Q: What is the outlook for fiscal '26 in terms of revenue and EBITDA growth? A: Gary Chase, CFO, indicated that while revenue is expected to grow, EBITDA growth will be modest. The company is still finalizing details for fiscal '26 and will provide more information in the coming months.

Q: Can you explain the recent transaction involving Ligado and ASTS, and how it affects Viasat's spectrum assets? A: Mark Dankberg, CEO, stated that ASTS intends to assume Ligado's obligations under a co-op agreement with Inmarsat. This transaction underscores the value of Viasat's licensed MSS spectrum, which is crucial for non-terrestrial networks and direct-to-device services.

Q: Are there any updates on potential asset sales within the Defense and Advanced Technologies (DAT) segment? A: Mark Dankberg, CEO, mentioned that while specific transactions cannot be disclosed, the company is evaluating options to reduce debt and unlock equity value. The focus is on maintaining competitive positions while exploring strategic maneuvers.

Q: What are the expectations for the Maritime business and NexusWave service in fiscal '26? A: Mark Dankberg, CEO, noted positive reception for NexusWave, with a growing pipeline of over 4,000 vessels. The company aims to convert this pipeline into orders and installations, expecting to see growth in net vessels and revenue during fiscal '26.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.