ViaSat Inc ((VSAT)) has held its Q3 earnings call. Read on for the main highlights of the call.
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ViaSat Inc’s latest earnings call presented a cautiously optimistic view, highlighting notable growth in aviation and defense segments while acknowledging challenges in fixed broadband and maritime revenue. The company remains strategically focused on debt reduction and cash flow generation.
Aviation Growth and Backlog Increase
The aviation segment showed impressive growth, with commercial in-flight connectivity aircraft in service growing by 13% year-over-year. Business jets increased by 18%, and the backlog expanded by 22%, reflecting strong demand and positioning ViaSat well in this sector.
Defense and Advanced Technologies Surge
Revenues in the Defense and Advanced Technologies segment surged almost 20% year-over-year. The backlog increased by 26%, and awards saw a significant rise of 49%. This robust performance underscores ViaSat’s strength and strategic focus in the defense market.
Cost Efficiency and Capital Reduction
ViaSat achieved a $200 million reduction from prior CapEx guidance, with fiscal 2025 CapEx expected at approximately $1.1 billion. This shows the company’s commitment to capital efficiency and managing expenses effectively.
Strong Cash Flow and EBITDA Performance
The company reported strong operating cash flow of $219 million, up more than 60%. Adjusted EBITDA came in at $393 million with a 35% margin, demonstrating solid financial performance and cash generation capabilities.
Positive Customer Feedback and New Contracts
ViaSat continues to expand its global partnerships and customer base, highlighted by a full fleet contract from STARLUX in the Asia Pacific region. This expansion is a testament to the company’s positive market reputation and customer satisfaction.
U.S. Fixed Broadband Revenue Decline
The U.S. fixed broadband segment experienced revenue and subscriber declines, impacting overall performance. This remains a challenging area for ViaSat, requiring strategic attention to reverse the trend.
Maritime Revenue Challenges
Maritime revenue declined by 8% due to ARPU pressure and a decrease in legacy L-band offerings. This poses a challenge for ViaSat as it seeks to stabilize and grow its maritime operations.
Net Loss Increase
The net loss increased to $158 million from $124 million a year ago, primarily due to a $97 million non-cash loss on debt refinancing. This financial setback highlights the impact of strategic financial decisions on overall profitability.
Forward-Looking Guidance
ViaSat’s guidance for the rest of the year is optimistic, with expectations of continued revenue growth and modest adjusted EBITDA growth. The company is focused on capital efficiency, cash generation, and debt reduction. With the anticipated launch of the ViaSat-3 satellites and the rollout of the NexusWave service, fiscal 2026 is projected to be a pivotal year for the company.
In summary, ViaSat Inc’s earnings call reflects a balanced approach, with strong performances in aviation and defense, alongside challenges in broadband and maritime. The company’s strategic focus on debt reduction and cash generation, paired with optimistic forward-looking guidance, positions ViaSat for continued growth and resilience in the coming years.
