ViaSat(VSAT) - 2026 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Presents Viasat, Inc.'s unaudited condensed consolidated financial statements for Q1 FY2026 and Q1 FY2025, including Balance Sheets, Statements of Operations, Cash Flows, and Equity Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $1,177,492 | $1,612,105 | | Total current assets | $2,455,805 | $2,887,943 | | Property, equipment and satellites, net | $7,339,470 | $7,405,664 | | Goodwill | $1,626,221 | $1,622,132 | | Total assets | $14,895,806 | $15,448,784 | | Liabilities & Equity | | | | Total current liabilities | $1,161,343 | $1,676,654 | | Total long-term debt (Senior notes & Other) | $6,532,615 | $6,532,284 | | Total liabilities | $10,293,834 | $10,804,224 | | Total equity | $4,601,972 | $4,644,560 | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Three Months Ended June 30 (in thousands, except per share data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total revenues | $1,171,054 | $1,126,460 | | Income (loss) from operations | $46,672 | $59,735 | | Net income (loss) | $(47,724) | $(21,687) | | Net income (loss) attributable to Viasat, Inc. | $(56,434) | $(32,912) | | Diluted net income (loss) per share | $(0.43) | $(0.26) | Condensed Consolidated Statements of Cash Flows Cash Flow Summary for Three Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $258,460 | $151,096 | | Net cash used in investing activities | $(175,950) | $(221,519) | | Net cash used in financing activities | $(513,819) | $(22,453) | | Net decrease in cash and cash equivalents | $(434,613) | $(89,434) | | Cash and cash equivalents at end of period | $1,177,492 | $1,811,599 | Notes to the Condensed Consolidated Financial Statements - As of June 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations (backlog) was $3.5 billion. The company expects to recognize approximately half of this over the next 12 months[31] - Revenues from the U.S. Government comprised 15% of total revenues for the three months ended June 30, 2025, down from 16% in the prior year period[33] - On May 2, 2025, the company redeemed in full its remaining $442.6 million in principal amount of 5.625% Senior Notes due 2025[93][114] - In June 2025, Inmarsat agreed to a binding term sheet with Ligado Networks, under which Viasat anticipates receiving $568 million in fiscal year 2026, subject to bankruptcy court approval[140] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Discusses Viasat's financial condition, results of operations, and liquidity, including segment overview, performance trends, and capital resources Company and Segment Overview - Viasat operates through two reportable segments: Communication Services and Defense and Advanced Technologies[158] - As of June 30, 2025, the Communication Services segment had in-flight connectivity (IFC) systems installed on approximately 4,230 commercial aircraft and 2,050 business jets[160] - The U.S. fixed broadband business had approximately 172,000 subscribers with an average monthly revenue per user (ARPU) of $115 as of June 30, 2025[160] Results of Operations Consolidated Results of Operations (in millions) | Metric | Q1 FY2026 (3 mo ended Jun 30, 2025) | Q1 FY2025 (3 mo ended Jun 30, 2024) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $1,171.1 | $1,126.5 | $44.6 | 4% | | Cost of Revenues | $761.6 | $710.8 | $50.8 | 7% | | SG&A | $262.8 | $251.1 | $11.7 | 5% | - Total revenue increased by 4% YoY, driven by a 13% increase in product revenues, primarily from the Defense and Advanced Technologies segment[194] - Cost of product revenues increased 20% YoY, outpacing product revenue growth, partly because the prior period included higher-margin intellectual property licensing revenues[195] - SG&A expenses increased by 5% YoY, mainly due to higher support costs, including legal expenses related to the Ligado settlement[196] Segment Results Communication Services Segment Results (in millions) | Metric | Q1 FY2026 | Q1 FY2025 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $827.4 | $826.8 | $0.6 | 0% | | Operating Profit | $40.9 | $41.9 | $(1.1) | (3)% | - Communication Services revenue was flat YoY, as growth in aviation services was offset by an expected decrease in fixed services due to bandwidth reallocation to the IFC business[203] Defense and Advanced Technologies Segment Results (in millions) | Metric | Q1 FY2026 | Q1 FY2025 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $343.7 | $299.7 | $44.0 | 15% | | Operating Profit | $71.5 | $84.0 | $(12.5) | (15)% | - Defense and Advanced Technologies revenue grew 15% YoY, driven by a 20% increase in product revenues from information security and space systems. Operating profit decreased due to higher SG&A, R&D costs, and a less favorable product mix compared to the prior year[206][207] Backlog Firm and Funded Backlog as of June 30, 2025 (in millions) | Backlog Type | Communication Services | Defense & Advanced Tech | Total | | :--- | :--- | :--- | :--- | | Firm Backlog | $2,489.8 | $1,058.9 | $3,548.7 | | Funded Backlog | $2,469.5 | $823.0 | $3,292.5 | - Total new awards were approximately $1.2 billion for the quarter, consistent with the prior year period[210] Liquidity and Capital Resources - As of June 30, 2025, the company had $1.2 billion in cash and cash equivalents and $1.3 billion in working capital[213] - Total available liquidity under revolving credit facilities was $1.15 billion ($595.6 million from Viasat facility and $550.0 million from Inmarsat facility)[213] - Cash from operating activities increased to $258.5 million from $151.1 million in the prior year period, mainly due to favorable changes in working capital[219] - Cash used in financing activities was $513.8 million, primarily due to the redemption of the remaining $442.6 million of the 2025 Notes[222] Contractual Obligations Summary (in thousands) | Obligation | Next 12 months | Thereafter | | :--- | :--- | :--- | | Operating leases | $89,227 | $590,353 | | Senior notes and other long-term debt | $613,612 | $8,550,277 | | Purchase commitments | $1,147,018 | $1,246,605 | | Total | $1,849,857 | $10,387,235 | Item 3. Quantitative and Qualitative Disclosures About Market Risk Details the company's exposure to market risks, primarily interest rate risk from variable-rate credit facilities and foreign exchange risk from international business - The company's primary interest rate risk relates to its variable-rate Credit Facilities. A hypothetical 10% increase in interest rates would increase annual interest expense by approximately $25.4 million, prior to capitalization effects[237] - Exposure to foreign currency risk is considered insignificant, with a hypothetical 5% variance in foreign currency rates having a minimal impact on pre-tax income[238] Item 4. Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[240] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, such controls[241] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various legal proceedings, but management believes their resolution will not materially adversely affect financial condition or operations - The company states that while litigation outcomes are uncertain, it believes the resolution of its current pending legal matters will not have a material adverse effect on its business, financial condition, or liquidity[242] Item 1A. Risk Factors States no material changes to risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended March 31, 2025 - There have been no material changes to the risk factors described in the Annual Report on Form 10-K for the fiscal year ended March 31, 2025[243] Item 5. Other Information Reports no director or officer adopted or terminated a Rule 10b5-1 trading plan or non-Rule 10b5-1 trading arrangement during the quarter - During the three months ended June 30, 2025, no director or officer adopted or terminated a Rule 10b5-1 trading plan[244] Item 6. Exhibits Lists exhibits filed with the Form 10-Q, including stockholder agreements and CEO/CFO certifications