Financial Data and Key Metrics Changes - Revenue for Q3 FY 2026 was $1.2 billion, up approximately 3% year-over-year, driven by growth in DAT and communication services [21][22] - Adjusted EBITDA was $387 million, down 2%, primarily due to increased R&D investments and the impact of the government shutdown [23] - Net income improved to $25 million, an increase of $183 million, mainly due to higher interest income from Ligado's quarterly fees [22] - Free cash flow was $444 million, or $24 million excluding the lump sum payment from Ligado [23][24] - The net debt to trailing 12-month Adjusted EBITDA ratio improved to 3.25 times, down from approximately 3.7 times a year ago [24] Business Line Data and Key Metrics Changes - Communication services awards were $671 million, down 11%, reflecting lower aviation awards and the effects of the government shutdown [24] - Maritime awards grew 25%, while revenue was $825 million, up 1%, with solid growth in aviation and government SATCOM [25] - Aviation revenue increased by 15%, driven by a 9% rise in commercial aircraft in service [25] - Government SATCOM revenue grew 4%, indicating strong growth with U.S. and international governments [26] - Fixed services revenue declined by 20% due to a decrease in U.S. fixed broadband subscribers [28] Market Data and Key Metrics Changes - Backlog reached approximately $4 billion, a record high, up about 12% or $430 million, driven by strong awards in government SATCOM and DAT [22] - The global space economy is projected to grow from $626 billion in 2025 to $1 trillion by 2034, indicating significant market opportunities [16] Company Strategy and Development Direction - The company focuses on three key areas for revenue growth: ViaSat-3, multi-orbit networks, and new defense technology [6][10] - Ongoing capital allocation and strategic initiatives aim to unlock shareholder value while enhancing competitive positioning in fast-growing markets [11][15] - The company is evaluating strategic options, including the potential separation of government and commercial businesses to enhance shareholder value [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategic direction and operational targets, particularly regarding the deployment of ViaSat-3 satellites [20][32] - The company anticipates that the entry into service of ViaSat-3 Flights 2 and 3 will catalyze future growth in both government and commercial franchises [31][32] - Management acknowledged the impact of the government shutdown on operations and expects similar effects in the fourth quarter [31] Other Important Information - The company is committed to reducing capital intensity while enhancing innovation and customer value [12] - A divestiture of the minority interest in Navarino is expected to close in March, subject to regulatory approval [24] - The company plans to invest in next-generation mobile user terminals and additional sources of LEO bandwidth for government and aero customers [9] Q&A Session Summary Question: Update on Flight 2 and Flight 3 launches - Management confirmed that Flight 3 will have a shorter orbit raise period of about two months compared to Flight 2's 100 days [43] Question: Strategic review process and timing - Management indicated that the successful deployment of Flights 2 and 3, along with macro market conditions, will influence the timing of strategic decisions [46] Question: Thoughts on data centers in space and AI - Management noted that the feasibility of data centers in space hinges on power generation efficiency and expressed no plans to enter the data center business [50][51] Question: Addressable markets for competitive advantages - Management identified broadband and L-band markets as key growth areas, emphasizing government applications and sovereign ownership trends [56][57] Question: Evaluation of government assets and potential separation - Management acknowledged the complexity of managing key dependencies and emphasized a thorough evaluation process for maximizing shareholder value [88]