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01/10 17:30
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
While Viasat shows some positive aspects like aviation revenue growth and a solid backlog, the financial health is concerning with a significant net loss and debt management challenges. The Q&A section reveals uncertainties, especially with the Ligado litigation and lack of clarity on growth drivers. Moreover, competitive pressures and economic headwinds add to the negative sentiment. The market cap suggests a moderate reaction, but overall, the negative factors outweigh the positives, leading to a likely stock price decline of -2% to -8% over the next two weeks.
Revenue Q4 2025 $1.15 billion, a year-over-year change of 4%.
GAAP Net Income Q4 2025 $-246 million, compared to a profit in the previous year.
Adjusted EBITDA Q4 2025 $375 million, with a margin of 32.7%, a year-over-year change of 4%.
Free Cash Flow Q4 2025 $50 million, with solid double-digit growth in operating cash flow.
Revenue FY 2025 $4.5 billion, a year-over-year change of 4%.
GAAP Net Loss FY 2025 $-575 million, compared to a profit in the previous year.
Adjusted EBITDA FY 2025 $1.55 billion, a year-over-year change of 4%.
Operating Cash Flow FY 2025 More than $900 million, a year-over-year growth of over 30%.
CapEx FY 2025 Reduced by close to $300 million for fiscal 2025 and 2026 combined.
Debt Write-down Q4 2025 $160 million related to the exit of certain EMEA ground network assets.
Maritime Revenue Q4 2025 Down 8% year-over-year, as expected to trough in the fourth quarter.
Government Satcom Revenue Q4 2025 Up 16% year-over-year.
Fixed Services Revenue Q4 2025 Down 19% year-over-year.
Aviation Revenue Q4 2025 Up 11% for the quarter and 17% for the year.
Info Sec and Cyber Revenue Q4 2025 Product revenue of $97 million, up 8%.
Backlog Q4 2025 1,600, up 18% year-over-year.
NexusWave maritime broadband service: Introduced several network optimization innovations, delivering substantial efficiency and user experience gains.
ViaSat-3 Flight 1: Integrated into global network, demonstrating expected benefits to user experience and network efficiency.
ViaSat-3 Flight 2 and 3: Critical path has been corrective actions and testing the reflectors, with plans to shift to launch site this summer.
Amara multi-network solution: Next-generation IFC solution that will deliver the best customer experiences for the future.
ViaSat Aera: Proprietary electronically steered antenna terminal that will integrate capacity from multiple bands and orbits.
NexusWave: Off to a good start with more than 100 ships in active service and orders for nearly 500 more.
Aviation business: Continued growth in commercial aviation with service aircraft up 10% year-over-year.
Government satcom: Revenue growth of 16% driven by higher-margin business mix.
Maritime revenue: Expected to see slight sequential growth in the first quarter of fiscal 2026.
Operational efficiencies: Achieved record new contract awards growth and made significant progress on capital structure.
Cost reduction: Reduced combined fiscal 2025 and 2026 CapEx by close to $300 million.
Free cash flow: Generated more than $900 million of operating cash flow, with over 30% growth from fiscal 2024.
Debt management: Plan to redeem near-term maturities and leverage momentum to address longer-term debt structure.
Market positioning: Focused on reducing capital intensity and generating sustainable cash flow.
Earnings Expectations: Viasat, Inc. reported an EPS of $-0.02, missing expectations of $0.03, indicating potential financial instability.
Regulatory Issues: Ongoing court proceedings related to Ligado's bankruptcy may pose legal and financial risks, with Viasat asserting that Ligado's case lacks merit.
Supply Chain Challenges: The company faces challenges in its aviation business due to OEM delivery delays and increased aircraft out-of-service rates, impacting revenue.
Economic Factors: Fiscal 2026 is expected to face headwinds from increased operating costs and third-party bandwidth expenses, totaling $80 million, which could affect profitability.
Competitive Pressures: Viasat is under pressure to deliver competitive services in the aviation sector, particularly against LEO competition, which may impact market share.
Debt Management: The company is managing significant debt, with a focus on reducing leverage, which may limit financial flexibility.
Capital Intensity: Viasat is working to reduce capital intensity, but high capital expenditures, particularly for the ViaSat-3 constellation, remain a concern.
Market Demand: The company anticipates challenges in its fixed broadband segment, with subscriber pressure expected to continue in fiscal 2026.
Strategic Goals Achieved: Viasat met or beat guidance metrics, achieved record new contract awards growth, and made significant progress on capital structure.
Satellite Roadmap Progress: Integrated the first ViaSat-3 Flight 1 into the global network, demonstrating benefits to user experience and network efficiency.
NexusWave Service Launch: Introduced the multi-orbit NexusWave maritime broadband service, enhancing user experience and efficiency.
Organizational Changes: Made changes to improve speed, agility, and structural optionality.
MSSA Collaboration: Working with MSSA to create an open architecture standards-based ecosystem for non-terrestrial networks.
L-band Business Objectives: Focused on reducing costs, supporting government and maritime services, and transitioning to 5G services.
Fiscal 2026 Revenue Outlook: Expect modest revenue growth with flattish adjusted EBITDA, plus or minus 1% from $1.547 billion in fiscal 2025.
CapEx Guidance: Expect CapEx of about $1.3 billion, including $250 million for the completion of the ViaSat-3 constellation.
Free Cash Flow Expectations: Expect double-digit growth in operating cash flow and free cash flow inflection in fiscal 2026.
Debt Management Strategy: Plan to use available cash to redeem near-term maturities and address longer-term debt structure.
Long-term Growth Positioning: Expect to emerge from fiscal 2026 with more capacity to deliver for customers and rising free cash flow in subsequent years.
Shareholder Return Plan: Viasat is focused on reducing capital intensity and generating sustainable, compelling operating and free cash flow, which will reinforce their competitive position and drive returns and shareholder value. They have a two-step plan to address debt, which includes using available cash to redeem near-term maturities and leveraging momentum built during fiscal 2026 to address longer-term debt structure. They expect to pay down approximately $300 million of the Inmarsat term-loan B from available cash during fiscal 2026.
The earnings call summary indicates a positive outlook with expected revenue growth, improved capital expenditures, and sustainable positive free cash flow. The Q&A section reveals optimism in new projects and partnerships, with an emphasis on increased bandwidth and market expansion. Despite some uncertainties in specific project timelines and CapEx details, the overall sentiment is bolstered by the anticipated growth in various business segments and the strategic focus on debt reduction and shareholder value. Given the market cap, this is likely to result in a positive stock price movement.
The earnings call summary and Q&A indicate a positive outlook. Viasat achieved strategic goals, integrated new services, and has a strong fiscal 2026 revenue outlook. The Q&A highlights growth in encryption and maritime services, and a focus on shared infrastructure for cost efficiency. Despite some uncertainties, the overall sentiment is optimistic with expected growth in cash flow and strategic initiatives.
While Viasat shows some positive aspects like aviation revenue growth and a solid backlog, the financial health is concerning with a significant net loss and debt management challenges. The Q&A section reveals uncertainties, especially with the Ligado litigation and lack of clarity on growth drivers. Moreover, competitive pressures and economic headwinds add to the negative sentiment. The market cap suggests a moderate reaction, but overall, the negative factors outweigh the positives, leading to a likely stock price decline of -2% to -8% over the next two weeks.
The earnings call reveals a mixed performance: solid quarterly results with strong EBITDA growth, but a revenue decline for FY 2025 and a GAAP net loss. The Q&A highlighted uncertainties in litigation and spectrum monetization, offset by confidence in future satellite launches and maritime growth. Despite a positive shareholder return plan and debt repayment, weak revenue guidance and flattish EBITDA growth for FY 2026 temper enthusiasm. With a market cap of approximately $1.6 billion, the stock is likely to experience a neutral reaction, within a -2% to 2% range.
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