ViaSat(VSAT) - 2025 Q4 - Annual Results

Shareholder Letter The Chairman's letter frames FY2025 as a foundational year for growth and outlines key strategic priorities for FY2026 - FY2025 was a foundational year for multi-year accelerated growth and sustained cash flow by increasing earnings and decreasing capital intensity[3] - The company met or exceeded its guidance metrics, achieved record new contract awards, and made significant progress on its capital structure and satellite roadmap[4] - A major focus is innovating L-band spectrum rights for the Mobile Satellite Service (MSS) market to support future 5G and 6G Non-Terrestrial Networks (NTN)[5][9] - A high priority is getting VS-3 F2 and F3 into service, with VS-3 F2 planned to ship to the launch site in summer[5] - The company is judiciously integrating LEO networks to optimize latency-sensitive traffic, with the NexusWave maritime service showing a good start[7] - FY2026 is viewed as a year to reposition for growth, with a plan to deliver sustainable operating and free cash flow and drive shareholder value[11] FY2025 Year in Review The company achieved record revenue and awards in FY2025, with significant free cash flow improvement despite a net loss FY2025 Full-Year Financial Highlights (vs. Prior Years) | Metric | FY23 | FY24 | FY25 | | :--- | :--- | :--- | :--- | | Awards | $2.8B | $4.2B | $4.7B | | Backlog | $1.7B | $3.7B | $3.6B | | Revenue | $2.6B | $4.3B | $4.5B | | Net Loss | ($217.6M) | ($1,058.5M) | ($575.0M) | | Adj. EBITDA | $501M | $1,410M | $1,547M | - Achieved record awards of $4.7 billion, driven by a 57% YoY increase in the Defense and Advanced Technologies segment[21] - Generated $908 million in operating cash flow, and free cash flow improved by $729 million compared to FY2024[21] - Repurchased $359 million of senior notes and redeemed the remaining $442.6 million of notes due in 2025 after year-end[21] - Key operational milestones included launching the NexusWave service and surpassing 6,000 commercial and business aircraft in service[21] Q4 FY2025 Financial Results Quarterly revenue was flat YoY as strong Defense growth was offset by a decline in Communication Services and a higher net loss Q4 FY2025 Key Financial Metrics (YoY) | Metric | Q4 FY2024 | Q4 FY2025 | Change | | :--- | :--- | :--- | :--- | | Revenue | $1,150M | $1,147M | 0% | | Net Loss | ($90M) | ($246M) | 162% increase in loss | | Adj. EBITDA | $358M | $375M | +5% | | Awards | $1,122M | $1,169M | +4% | - The net loss of $246 million was primarily driven by a $169 million write-down charge related to the ViaSat-3 EMEA ground network[24] - Defense and Advanced Technologies revenue grew 11% YoY, while Communication Services revenue decreased 4% YoY[24] - Total awards for the quarter increased by 5% YoY to $1.2 billion, largely due to a 58% YoY growth in Defense awards[24] Segment Performance Communication Services Segment revenue declined due to lower product sales, though Adjusted EBITDA grew slightly from strength in government satcom Communication Services Q4 Performance (YoY) | Metric ($ in millions) | Q4 FY24 | Q4 FY25 | Change | | :--- | :--- | :--- | :--- | | Awards | $864 | $774 | -10% | | Revenue | $860 | $825 | -4% | | Adj. EBITDA | $300 | $306 | +2% | - The revenue decline was driven by a 23% drop in product revenues and service decreases, partially offset by growth in government satcom (+16%) and aviation (+5%)[31] - The number of commercial and business aviation aircraft in service grew to approximately 4,030 and 2,000, respectively[31][28] - Key business developments include the Amara multi-orbit IFC solution and new contracts with STARLUX, Aeromexico, Riyadh Air, and Maersk[33] Defense and Advanced Technologies The Defense segment delivered strong growth in revenue, awards, and Adjusted EBITDA, driven by tactical networking products Defense and Advanced Technologies Q4 Performance (YoY) | Metric ($ in millions) | Q4 FY24 | Q4 FY25 | Change | | :--- | :--- | :--- | :--- | | Awards | $250 | $395 | +58% | | Revenue | $290 | $322 | +11% | | Adj. EBITDA | $58 | $69 | +19% | - The segment's backlog increased 50% YoY to $984 million[41][39] - Revenue growth was primarily driven by increased product revenues in tactical networking and information security[42] - Key achievements include leading the communications portion of the ESA's Moonlight Program and delivering the 100,000th Type 1 encryption device[44] Balance Sheet, Cash Flows and Liquidity The company improved operating cash flow and reduced capital expenditures, ending the quarter with a strong liquidity position - Operating cash flow for Q4 FY25 was $298 million, an increase of $66 million YoY, due to improved operating performance[49][45] - Capital expenditures in Q4 FY25 decreased 34% YoY to $248 million, mainly due to the timing of satellite and ground payments[50][47] - The company ended Q4 FY25 with $2.8 billion in available liquidity, comprising $1.61 billion in cash and $1.14 billion in undrawn credit[51] - Net debt decreased sequentially to $5.6 billion; the company subsequently redeemed the remaining $442.6 million of its 2025 senior notes[51][52][48] Outlook Viasat projects low single-digit revenue growth for FY2026 and targets an inflection to positive free cash flow in the second half - For FY2026, Viasat expects low single-digit YoY revenue growth and flattish YoY Adjusted EBITDA[55] - The company expects an inflection to positive free cash flow in the second half of FY2026[58] - FY2026 capital expenditures are projected to be approximately $1.3 billion[58] - Segment revenue outlook for FY2026 includes mid-teens growth in Defense and low-double-digit growth in aviation[58] - Net debt relative to LTM Adjusted EBITDA is expected to increase modestly by the end of FY2026[58] Viasat Satellite Roadmap The satellite roadmap confirms ViaSat-3 F2 and F3 are anticipated for service in early 2026, with further fleet expansion planned Satellite Service Entry Projections | Satellite | Partner(s) | Anticipated Service Entry | | :--- | :--- | :--- | | ViaSat-3 F1 | Boeing | In service | | ViaSat-3 F2 | Boeing | Early 2026 | | ViaSat-3 F3 | Boeing, L3Harris | Early 2026 | | GX-10A/B | Undisclosed | In service | | GX-7/8/9 | Airbus | 2027 | | Inmarsat-8 | Swissto12 | 2028 | Financial Statements and Reconciliations This section provides detailed unaudited financial statements and reconciliations of GAAP to non-GAAP measures for FY2025 Financial Results For FY2025, Viasat reported 6% revenue growth and a 10% increase in Adjusted EBITDA, with a significantly reduced net loss FY2025 vs FY2024 Financial Results (In millions, except per share data) | Metric | FY25 | FY24 | Year-Over-Year Change | | :--- | :--- | :--- | :--- | | Revenues | $4,519.6 | $4,283.8 | 6% | | Net income (loss) | ($575.0) | ($1,068.9) | (46)% | | Adjusted EBITDA | $1,547.0 | $1,410.4 | 10% | | New contract awards | $4,684.4 | $4,155.0 | 13% | | Backlog | $3,552.8 | $3,696.0 | (4)% | Segment Results Both segments reported revenue and Adjusted EBITDA growth in FY2025, with the Defense segment seeing a 57% surge in new awards FY2025 Segment Performance (In millions) | Segment / Metric | FY25 | FY24 | Year-Over-Year Change | | :--- | :--- | :--- | :--- | | Communication Services | | | | | New contract awards | $3,100.8 | $3,147.5 | (1)% | | Revenues | $3,298.5 | $3,141.5 | 5% | | Adjusted EBITDA | $1,261.7 | $1,138.5 | 11% | | Defense and Advanced Technologies | | | | | New contract awards | $1,583.7 | $1,007.5 | 57% | | Revenues | $1,221.1 | $1,142.2 | 7% | | Adjusted EBITDA | $285.3 | $271.9 | 5% | Condensed Consolidated Statements of Operations The company's FY2025 operating loss improved significantly to $97.5 million, with a net loss of $575.0 million FY2025 Statement of Operations Highlights (In thousands) | Line Item | Twelve months ended March 31, 2025 | Twelve months ended March 31, 2024 | | :--- | :--- | :--- | | Total revenues | $4,519,571 | $4,283,758 | | Income (loss) from operations | ($97,480) | ($889,806) | | Net income (loss) attributable to Viasat, Inc. | ($574,962) | ($1,068,904) | | Diluted net income (loss) per share | ($4.48) | ($9.12) | Condensed Consolidated Balance Sheets As of March 31, 2025, Viasat's balance sheet showed total assets of $15.45 billion and cash of $1.61 billion Balance Sheet Summary (In thousands) | Account | As of March 31, 2025 | As of March 31, 2024 | | :--- | :--- | :--- | | Total current assets | $2,887,943 | $3,478,904 | | Total assets | $15,448,784 | $16,329,364 | | Total current liabilities | $1,676,654 | $1,295,881 | | Total liabilities | $10,804,224 | $11,256,860 | | Total equity | $4,644,560 | $5,072,504 | Non-GAAP Financial Reconciliation This section details the reconciliation of GAAP net loss to non-GAAP metrics like Adjusted EBITDA, Net Debt, and Free Cash Flow GAAP Net Loss to Adjusted EBITDA Reconciliation - Q4 FY25 (In thousands) | Line Item | Amount | | :--- | :--- | | GAAP net income (loss) attributable to Viasat, Inc. | ($246,053) | | Provision for (benefit from) income taxes | $3,758 | | Interest expense (income), net | $86,828 | | Depreciation and amortization | $337,182 | | Ground network impairment and related charges, net | $169,400 | | Other adjustments (Stock comp, acquisition costs, etc.) | $23,678 | | Adjusted EBITDA | $374,793 | Free Cash Flow Reconciliation - Q4 FY25 (In thousands) | Line Item | Amount | | :--- | :--- | | Net cash provided by operating activities | $298,443 | | Purchase of property, equipment and satellites (capex) | ($247,723) | | Free cash flow | $50,720 | Net Debt Reconciliation - As of March 31, 2025 (In thousands) | Line Item | Amount | | :--- | :--- | | Total debt | $7,204,275 | | Less: cash and cash equivalents | ($1,612,105) | | Net debt | $5,592,170 | Disclosures and Endnotes This section provides definitions for non-GAAP financial measures and includes the safe harbor statement for forward-looking information - Defines Adjusted EBITDA as earnings before interest, taxes, depreciation, and amortization, adjusted for non-recurring items[62] - Defines Net Debt as total debt less cash, cash equivalents, and short-term investments[62] - Defines Free Cash Flow as net cash from operating activities minus capital expenditures[62] - Includes a safe harbor statement for forward-looking statements, cautioning that predictions are subject to risks detailed in SEC filings[63]