ViaSat(US:VSAT)2025-11-07 21:07Financial Performance - Q2 FY2026 revenue was $1.1 billion, a 2% increase year-over-year, driven by a 3% growth in the Defense and Advanced Technologies segment and a 1% increase in the Communication Services segment [4]. - The net loss for Q2 FY2026 was $61 million, an improvement from a net loss of $138 million in Q2 FY2025, attributed to a favorable service mix and reduced expenses [4]. - Adjusted EBITDA for Q2 FY2026 was $385 million, reflecting a 3% year-over-year increase, with a 6% increase in the Communication Services segment offset by a 15% decline in the Defense and Advanced Technologies segment [13]. - Revenues for Q2 FY26 were $1,140.9 million, a 2% increase from $1,122.3 million in Q2 FY25 [59]. - Net loss for Q2 FY26 improved to $61.4 million from a loss of $137.6 million in Q2 FY25, representing a 55% reduction [59]. - Non-GAAP net income for Q2 FY26 was $12.6 million, a significant recovery from a loss of $29.4 million in Q2 FY25 [67]. - Adjusted EBITDA for Q2 FY26 increased by 3% to $384.7 million compared to $375.0 million in Q2 FY25 [59]. - Free cash flow for the quarter was $69 million, an improvement of $58 million compared to the prior year quarter [39]. - Viasat generated $282 million in operating cash flow during Q2 FY2026, an increase of $43 million YoY and $24 million sequentially [37]. Segment Performance - The backlog for the Defense and Advanced Technologies segment reached a record $1.2 billion, up 31% year-over-year and 14% sequentially, with a book-to-bill ratio of 1.5x [32]. - Awards for Q2 FY2026 totaled a record $1.5 billion, a 17% increase year-over-year, with Communication Services awards increasing 35% to over $1 billion [13]. - The Communication Services segment revenue increased 1% year-over-year to $837 million, with aviation and government satcom service revenues growing 15% and 9% respectively [22]. - The Defense and Advanced Technologies segment revenue was $304 million, a 3% increase year-over-year, driven by a 14% increase in information security and cyber defense [33]. - Adjusted EBITDA for the Defense and Advanced Technologies segment declined 15% year-over-year to $48 million, impacted by higher R&D investments and declines in tactical networking [34]. - Communication Services segment revenues grew by 1% to $836.7 million in Q2 FY26, while new contract awards surged by 35% to $1,031.0 million [60]. - Defense and Advanced Technologies segment revenues increased by 3% to $304.2 million, but new contract awards decreased by 9% to $466.8 million [60]. Future Outlook - The company expects low single-digit YoY revenue growth and flattish YoY Adjusted EBITDA for FY2026 [46]. - The Communication Services segment is projected to have flat revenue performance for FY2026, while the Defense and Advanced Technologies segment anticipates mid-teens YoY revenue growth [46]. - Viasat's net debt relative to LTM Adjusted EBITDA is expected to decrease modestly by the end of FY2026 [46]. - Capital expenditures for FY2026 are expected to be approximately $1.2 billion, including about $400 million for Inmarsat-related expenditures [46]. - The company anticipates another year of double-digit operating cash flow growth, with positive free cash flow expected for FY2027 [46]. Cash and Liquidity - Viasat ended Q2 FY2026 with $2.4 billion in available liquidity, consisting of $1.2 billion in cash and cash equivalents and $1.15 billion in undrawn credit facilities [40]. - Capital expenditures for Q2 FY2026 were $214 million, a 7% decrease YoY due to lower satellite expenditures [38]. - The company received $436 million from Ligado and AST, which will be partially used to repay early the $200 million principal amount of the original 2026 Inmarsat term loan facility [24]. Awards and Contracts - Viasat received awards totaling over $155 million in Q2 FY2026 for information security and cyber defense products, reflecting strong demand from cloud service providers [35].