ViaSat(US:VSAT)2026-02-05 21:41Financial Performance - Q3 FY2026 revenue was $1.2 billion, a 3% year-over-year increase, driven by a 9% growth in the Defense and Advanced Technologies segment and a 1% increase in the Communication Services segment [16]. - Net income for Q3 FY2026 was $25 million, an improvement from a net loss of $158 million in Q3 FY2025, primarily due to higher interest income from the deferral of Ligado's quarterly fees [16]. - Adjusted EBITDA for Q3 FY2026 was $387 million, a 2% decrease year-over-year, with a 3% decline in the Communication Services segment partially offset by a 7% increase in the Defense and Advanced Technologies segment [16]. - Revenues for Q3 FY26 increased by 3% year-over-year to $1,157.0 million, compared to $1,123.8 million in Q3 FY25 [65]. - Net income for Q3 FY26 was $25.0 million, a significant improvement from a net loss of $158.4 million in Q3 FY25 [65]. - Adjusted EBITDA for Q3 FY26 decreased by 2% to $387.0 million, compared to $393.3 million in Q3 FY25 [65]. - Diluted net income per share for Q3 FY26 was $0.18, compared to a loss of $1.23 per share in Q3 FY25 [72]. Segment Performance - Defense and Advanced Technologies segment revenue increased 9% year-over-year to $332 million, driven by strong growth in tactical networking and information security [34]. - Communication Services segment revenue increased 1% year-over-year to $825 million, with aviation service revenues growing by 15% [25]. - Defense and Advanced Technologies segment revenues increased by 9% to $331.7 million in Q3 FY26, with new contract awards down by 8% to $300.0 million [66]. - Communication Services segment revenues grew by 1% to $825.3 million in Q3 FY26, while new contract awards decreased by 11% to $671.3 million [66]. Awards and Backlog - Awards for Q3 FY2026 were $971 million, a 10% decline year-over-year, with Communication Services awards decreasing by 11% [16]. - The backlog for the Defense and Advanced Technologies segment reached $1.2 billion, a 27% increase year-over-year [34]. - Backlog as of Q3 FY26 increased by 12% to $3,967.3 million, compared to $3,541.2 million in Q3 FY25 [65]. Cash Flow and Liquidity - Operating cash flow for the quarter was $307 million, an increase of $87 million YoY, excluding a $420 million Ligado lump sum payment [44]. - Free cash flow for the quarter improved to $24 million, a $57 million increase compared to the prior year quarter, excluding the Ligado payment [46]. - Viasat ended Q3 FY2026 with $2.5 billion in available liquidity, consisting of $1.35 billion in cash and $1.14 billion in borrowing capacity [47]. - Net cash provided by operating activities for Q3 FY2026 was $282,242,000, a decrease from $726,888,000 in Q2 FY2026 [81]. - Free cash flow for Q3 FY2026 was $68,543,000, compared to $444,167,000 in Q2 FY2026, representing a significant decline of 84.6% [81]. Future Outlook - The company expects low single-digit YoY revenue growth and flat YoY Adjusted EBITDA for FY2026 [54]. - The Defense and Advanced Technologies segment is projected to achieve mid-teens YoY revenue growth, driven by strong demand in information security and cyber defense [54]. - Viasat anticipates capital expenditures between $1.0 billion and $1.1 billion for FY2026, including approximately $350 million for Inmarsat-related expenditures [54]. - The company expects to generate positive free cash flow for FY2026 and FY2027, excluding non-recurring Ligado payments [51]. - Future growth is expected to be fueled by the completion and entry into service of the second and third VS-3 satellites, enhancing global capacity [50]. Strategic Initiatives - The company is focused on three key areas for revenue growth: VS-3, multi-orbit capabilities, and new frontier defense technology [6]. - VS-3 F2 was launched successfully, with expectations for service entry by May 2026, and VS-3 F3 is anticipated to launch shortly thereafter [6]. - The company is evaluating strategic options, including the potential separation of government and commercial businesses to enhance shareholder value [8].