Core Insights - Inmarsat Maritime, a subsidiary of Viasat, has launched the next phase of its NexusWave bonded connectivity service, coinciding with the upcoming launches of the ViaSat-3 Flight 2 and Flight 3 satellites [1][2] Group 1: Service Enhancements - The introduction of the new generation of maritime terminals will provide NexusWave customers with a significant increase in bandwidth, enhancing performance and flexibility to meet evolving maritime needs [2][3] - NexusWave combines multiple network capacities (GEO Ka-band, LEO, LTE, and L-band) into a single connectivity solution, enabling faster data transfers and improved network efficiency for onboard internet experiences [3][4] Group 2: Technological Advancements - The new VS60 maritime terminal, developed by Intellian and utilizing Viasat's software-defined radio technology, supports high-bandwidth applications and achieved download speeds exceeding 250 megabits per second during sea trials [4][5] - The ViaSat-3 satellites will feature over 1,000 steerable spot beams, allowing dynamic bandwidth allocation to meet demand across global shipping lanes and offshore locations [5] Group 3: Strategic Positioning - Inmarsat Maritime's Vice President emphasized the strong position of NexusWave's multi-orbit architecture and the new terminal in supporting global fleet operations, reinforcing commitments to reliability and customer experience [6] - Viasat's President highlighted the consistent performance of NexusWave in a complex connectivity landscape, aiming to provide more bandwidth and flexibility as ViaSat-3 capacity becomes available [6]

Financial Data and Key Metrics Changes - For Q2 FY2026, the company reported a net loss of $61 million, an improvement from a net loss of $138 million in Q2 FY2025, primarily due to a favorable service revenue mix, lower depreciation and amortization, and reduced SG&A expenses [5][17] - Revenue grew by 2% year-over-year to $1.1 billion, with adjusted EBITDA increasing by 3% to $385 million, resulting in a 34% adjusted EBITDA margin [15][17] - Free cash flow for the quarter was $69 million, contributing to a trailing 12-month total of $147 million, marking three consecutive quarters of positive free cash flow [13][17] Business Line Data and Key Metrics Changes - In the communication services segment, awards increased by 35% to $1.03 billion, while revenue was $837 million, up 1% year-over-year [18][20] - The defense and advanced technologies (DAT) segment saw awards decline by 9% to $467 million, but revenue grew by 3% to $304 million, driven by growth in InfoSec and cyber [21][22] - The aviation revenue grew by 15%, supported by an increase in commercial aircraft in service and higher average revenue per aircraft [18][19] Market Data and Key Metrics Changes - The backlog increased to $3.9 billion, up approximately $140 million year-over-year, despite the sale of the energy system integration business [17][18] - The company noted a significant uptick in interest for commercial mobile space networks, indicating a growing market for direct-to-consumer device non-terrestrial network connectivity [9][10] Company Strategy and Development Direction - The company is focused on launching Viasat 3 Flight 2 and Flight 3, which are expected to significantly enhance bandwidth capacity and drive growth in communication services [7][8] - The strategic review committee is evaluating capital allocation priorities, including the potential separation of government and commercial businesses to enhance competitive positioning [10][29] - The company aims to optimize its capital structure and reduce leverage, targeting a leverage ratio of three times net debt adjusted EBITDA or lower [14][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth trajectory supported by increased reliance on space-based assets for national security and growing demand for resilient communications [8][24] - The company anticipates fiscal 2026 revenue growth in low single digits year-over-year, with flattish adjusted EBITDA and variability quarter to quarter [23][24] - Management is closely monitoring the potential impacts of the U.S. government shutdown, estimating delays in DAT awards and adjusted EBITDA [25][26] Other Important Information - The company expects capital expenditures for the year to be about $1.2 billion, with significant investments related to the completion of Viasat 3 [26][27] - The company has moved $175 million in cash from Inmarsat to Viasat, with plans to transfer a total of $400-$500 million over time [28] Q&A Session Summary Question: Update on evaluating the possibility of a split and vertical integration opportunities - Management is continuously evaluating options for vertical integration and dual-use systems, with no set end date for this process [33][34] Question: Details on international spectrum ownership and monetization - The company holds a substantial amount of global spectrum and is exploring ways to maximize its value through operational investments and potential partnerships [36][39] Question: Insights on the Equitus project and ideal customers - Equitus aims to modernize infrastructure for spectrum allocations, with discussions ongoing with regional operators and the European Space Agency [40][43] Question: Clarification on backlog growth and recognition cadence - Management indicated that backlog growth is strong, with a focus on converting efforts into future growth, particularly with the upcoming capacity from Flight 2 [51][53] Question: Demand signals for defense bookings beyond the U.S. - Management noted healthy performance in the U.S. and increasing demand signals in Europe, particularly related to national security [89]

Financial Data and Key Metrics Changes - For Q2 FY 2026, the company reported a net loss of $61 million, an improvement from a net loss of $138 million in Q2 FY 2025, primarily due to a favorable service revenue mix, lower depreciation and amortization, and reduced SG&A expenses [5][17] - Revenue grew by 2% year-over-year to $1.1 billion, with adjusted EBITDA increasing by 3% to $385 million, resulting in a 34% adjusted EBITDA margin [15][17] - Free cash flow for the quarter was $69 million, contributing to a trailing 12-month free cash flow of $147 million, marking three consecutive quarters of positive free cash flow [13][16] Business Line Data and Key Metrics Changes - In the Communication Services segment, awards increased by 35% to $1.03 billion, while revenue grew by 1% to $837 million, driven by growth in Aviation and Government Satcom [18][21] - The Defense and Advanced Technologies (DAT) segment saw awards decline by 9% to $467 million, but revenue increased by 3% to $304 million, supported by growth in InfoSec and Cyber [21][23] - Fixed Services and Other revenue decreased by 16% due to a decline in U.S. fixed broadband subscribers, ending the quarter with 150,000 subscribers [20][17] Market Data and Key Metrics Changes - The backlog increased to $3.9 billion, up approximately $140 million year-over-year, despite the sale of the energy system integration business [17][12] - The DAT segment backlog reached a record of $1.2 billion, up 31% year-over-year and 14% sequentially [7][17] - The company noted a significant uptick in interest for commercial mobile space networks, indicating a growing market for direct-to-consumer device connectivity [9] Company Strategy and Development Direction - The company is focused on launching the ViaSat-3 satellites, which are expected to significantly enhance bandwidth capacity and drive growth in Communication Services [7][8] - A strategic review is ongoing regarding capital allocation and the potential separation of government and commercial businesses to enhance competitive positioning [10][29] - The company aims to optimize its capital structure and reduce leverage, targeting a leverage ratio of 3x net debt adjusted EBITDA or lower [14][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth trajectory supported by increased reliance on space-based assets for national security and growing demand for resilient communications [8][24] - The company anticipates continued variability in quarterly performance but expects fiscal 2026 revenue to increase by low single digits year-over-year [23][24] - Management highlighted the potential impact of a U.S. government shutdown on DAT awards and adjusted EBITDA, estimating a delay of up to $100 million in awards [25] Other Important Information - The company plans to spend approximately $1.2 billion in capital expenditures for the year, with a significant portion allocated to the completion of ViaSat-3 [26][28] - The company has moved $175 million in cash from Inmarsat to Viasat, with expectations to transfer a total of $400 million to $500 million over time [28] Q&A Session Summary Question: Update on evaluating the possibility of a split and vertical integration opportunities - Management indicated that they are continuously evaluating options for vertical integration and dual-use systems, with no specific timeline for completion [32][33] Question: Spectrum ownership and monetization strategies - Management confirmed that their spectrum position is substantial and globally coordinated, and they are exploring ways to derive value from it while fulfilling public interest obligations [36][39] Question: Details on the Equatys project and ideal customers - The Equatys project aims to modernize infrastructure for spectrum allocations, with discussions ongoing with regional operators and the European Space Agency [40][43] Question: Backlog growth and recognition cadence - Management emphasized that backlog growth is strong, and they are focused on converting this into future revenue, particularly with the upcoming capacity from Flight 2 [52][54] Question: Defense bookings and demand signals in Europe - Management noted increasing demand for sovereign capabilities in national security, particularly in Europe, and expects this trend to continue [90][91]

Financial Data and Key Metrics Changes - For Q2 FY2026, the company reported a net loss of $61 million, an improvement from a net loss of $138 million in Q2 FY2025, primarily due to a favorable service revenue mix, lower depreciation and amortization, and reduced SG&A expenses [5][17] - Revenue grew by 2% year-over-year to $1.1 billion, with adjusted EBITDA increasing by 3% to $385 million, resulting in a 34% adjusted EBITDA margin [15][17] - Free cash flow for the quarter was $69 million, contributing to a trailing 12-month total of $147 million, marking three consecutive quarters of positive free cash flow [12][16] Business Line Data and Key Metrics Changes - In the communication services segment, awards increased by 35% to $1.03 billion, while revenue was up 1% to $837 million, driven by growth in aviation and government SATCOM [18][20] - The defense and advanced technologies segment saw awards decline by 9% to $467 million, but revenue increased by 3% to $304 million, supported by growth in InfoSec and cyber solutions [21][22] - The maritime revenue declined by 3%, but installations of NexusWave were up 40% sequentially, indicating a focus on growth opportunities [19][20] Market Data and Key Metrics Changes - The backlog increased to $3.9 billion, up approximately $140 million year-over-year, despite the sale of the energy system integration business [17] - The company noted a significant uptick in interest for commercial mobile space networks, indicating a growing market for direct-to-consumer device connectivity [9][10] Company Strategy and Development Direction - The company is focused on launching Viasat 3 Flight 2 and Flight 3, which are expected to significantly enhance bandwidth capacity and drive growth in communication services [6][10] - A strategic review is ongoing regarding capital allocation and the potential separation of government and commercial businesses to enhance competitive positioning [10][29] - The company aims to optimize its capital structure and reduce leverage, targeting a leverage ratio of three times net debt adjusted EBITDA or lower [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth trajectory supported by increased reliance on space-based assets for national security and growing demand for resilient communications [7][8] - The company anticipates fiscal 2026 revenue growth in low single digits year-over-year, with flattish adjusted EBITDA, and expects variability in performance quarter to quarter [24][26] - Management is closely monitoring the potential impacts of the U.S. government shutdown, estimating a delay in DAT awards of up to $100 million and an impact on adjusted EBITDA of up to $20 million [25][26] Other Important Information - The company generated $282 million in cash flow from operations, up 18% year-over-year, with capital expenditures of $214 million [16][17] - The company is actively working on a five-year plan focusing on growth, innovation, capital efficiency, and returns [28][29] Q&A Session Summary Question: Update on evaluating the possibility of a split and vertical integration opportunities - Management is continuously evaluating options for vertical integration and dual-use systems, with no specific timeline for completion [33][34] Question: Spectrum ownership and monetization strategies - The company holds a substantial amount of global spectrum and is exploring ways to maximize its value through operational investments and potential partnerships [36][39] Question: Details on the Equitus project and ideal customers - Equitus aims to modernize infrastructure for spectrum allocations, with discussions ongoing with regional operators and the European Space Agency [40][43] Question: Backlog growth and revenue recognition metrics - Management highlighted that backlog growth is strong, and while specific metrics are not tracked, they are confident in converting backlog into future growth [52][55] Question: Demand signals in the defense sector, particularly in Europe - There is a growing demand for sovereign capabilities in national security, with countries seeking to reduce reliance on foreign systems [91][92]

Financial Performance - Viasat reported Q2 FY2026 revenue of $1.141 billion, a 2% increase compared to $1.122 billion in Q2 FY2025[20, 23] - Adjusted EBITDA for Q2 FY2026 was $385 million, a 3% increase compared to $375 million in Q2 FY2025[21, 23] - The company generated $69 million in free cash flow during the quarter, a $58 million improvement year-over-year[22] - For the twelve months ended September 30, 2025, Viasat generated $147 million in free cash flow[22] - Operating cash flow increased by 18% YoY, from $239 million to $282 million[23] Segment Performance - Communication Services (CS) revenue grew 1% YoY, reaching $837 million in Q2 FY26[23, 27] - Defense and Advanced Technologies (DAT) segment revenues grew 3% YoY, reaching $304 million in Q2 FY26[23, 39] - CS segment Adjusted EBITDA increased 6% YoY to $337 million[23, 29] - DAT segment Adjusted EBITDA declined 15% YoY to $48 million[23, 41] Awards and Backlog - Total awards increased 17% YoY to $1.498 billion[19, 23] - CS segment awards increased 35% YoY to $1.031 billion[23, 26] - DAT awards declined 9% YoY to $467 million[23, 37] - DAT segment backlog grew 31% to a record $1.2 billion[23, 36, 45]

Core Insights - Viasat is set to launch its ViaSat-3 F2 satellite on November 5, 2025, which is expected to more than double the company's current network capacity [1][4] - The satellite will provide broadband services from geostationary orbit at 79° west longitude, targeting increased customer demand across the Americas [2][3] - ViaSat-3 F2 will enhance flexibility in satellite operations and support high-demand applications such as commercial aviation Wi-Fi and government connectivity [3][4] Company Overview - Viasat is a global leader in satellite communications, aiming to connect consumers, businesses, governments, and militaries worldwide [5] - The company completed its acquisition of Inmarsat in May 2023, enhancing its capabilities and resources [5] Market Demand - There is an exponential growth in demand for resilient global satellite communications from various sectors, including commercial mobility and defense [4] - The upcoming launch of ViaSat-3 F2 is crucial for Viasat to meet this increasing demand in target markets [4] Technological Advancements - ViaSat-3 F2 features dynamic beam forming capabilities, allowing efficient bandwidth deployment to high-demand areas [4] - The satellite is designed to support next-generation connectivity platforms, enhancing service delivery and performance [1][3]

Core Insights - Pulsar International and Inmarsat Maritime have announced a commitment to roll out NexusWave across more than 300 vessels over the next 12 months, highlighting the increasing demand for reliable maritime connectivity [1][2][4] Group 1: Company Developments - Pulsar is the first NexusWave partner in the Mediterranean market and has a proven track record of successful installations, indicating its strong position in the maritime connectivity sector [2] - The rollout of NexusWave will enhance digitalisation, support decarbonisation strategies, and improve crew welfare by providing high-quality internet experiences onboard [2][4] - To facilitate this rollout, Pulsar plans to expand its global reach, local sales teams, and project management capabilities, ensuring seamless installation and support for customers [3][4] Group 2: Industry Context - The maritime industry is increasingly seeking connectivity solutions that are secure, dependable, and capable of supporting operational performance and crew well-being [4] - The NexusWave service combines multiple network technologies (GEO Ka-band, LEO, LTE, and L-band) to deliver reliable performance, reflecting a trend towards integrated connectivity solutions in the shipping sector [2][4] - The program is set to commence installations in October 2025, which will play a crucial role in enhancing operational resilience and the onboard experience for seafarers [4]

Financial Data and Key Metrics Changes - The company reported a net loss of $56 million for Q1 fiscal 2026, compared to a net loss of $33 million in the same period of 2025, primarily due to increased depreciation and amortization and a higher income tax provision [6][20][21] - Revenue grew by 4% year over year, driven largely by double-digit growth in the defense and advanced technology segment [6][20] - Adjusted EBITDA increased by 1% year over year, reaching $408 million, primarily from double-digit growth in information security and cyber defense [6][20][21] Business Line Data and Key Metrics Changes - Communication services revenue was $827 million, flat compared to the prior year, reflecting growth in aviation and government SATCOM, offset by the sale of the energy system integration business and declines in maritime and U.S. fixed broadband [22][24] - Aviation revenue grew by 14%, driven by a 9% year-over-year increase in commercial aircraft and service [22] - The defense and advanced technologies segment saw awards of $428 million, a 22% increase year over year, with revenue of $344 million, up 15% compared to the previous year [26][27] Market Data and Key Metrics Changes - The maritime revenue declined by 5% year over year, while the fixed services and other revenue decreased by 13% due to a decline in U.S. fixed broadband subscribers [24][25] - The company ended the quarter with 172,000 fixed broadband subscribers and an average revenue per user of $115 [25] - The government SATCOM revenue grew by 4% year over year, primarily reflecting airtime services for U.S. government satellite services [22] Company Strategy and Development Direction - The company aims to optimize the integration of ViaSat and Inmarsat resources and establish growth opportunities to yield attractive cash conversion [10][11] - The focus remains on reducing capital intensity while investing for growth in target markets, with plans to exit fiscal 2026 with a solid foundation for accelerated growth and cash generation [11][30] - The company is working to deliver commitments and position franchises for sustained and profitable growth, particularly through the rollout of NexusWave and the deployment of ViaSat-three satellites [33][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the operating environment, including pressures in fixed broadband and OEM aircraft delivery rates, but expressed confidence in the company's ability to navigate these challenges [13][14] - The outlook for fiscal 2026 includes expectations for low single-digit revenue growth and flattish year-over-year adjusted EBITDA growth, with a focus on cash flow generation [29][30] - Management emphasized the importance of improving operational and capital productivity while capturing share in large and growing markets [33][34] Other Important Information - The company generated $60 million of positive free cash flow in the quarter, bringing the trailing twelve months total to $88 million [21] - The company is focused on reducing leverage, with a goal to achieve a long-term leverage ratio below three times EBITDA [32] Q&A Session Summary Question: How does Trellisware compare with mobile ad hoc networking peers? - Trellisware operates in the mobile ad hoc networking space with a proprietary networking waveform, while competitors may use WiFi-based systems. The U.S. government and allies have adopted Trellisware's waveforms as standards, driving growth [40][41] Question: Can Trellisware's technology be used for aerial platforms and weapon systems? - Yes, Trellisware's technology can extend to unmanned aerial vehicles and other platforms, although initial focus has been on specific military applications [44][45] Question: What is the general penetration of next-generation encryption products? - There is a significant upgrade cycle driven by the need for national security encryption systems to be robust against quantum computing, leading to increased sales for encryption products [46][47] Question: How does the company view the potential for spin-offs? - The company evaluates its portfolio based on synergy and capital needs, considering whether keeping businesses together provides benefits or if separating them could enhance value [59][62] Question: What is the company's approach to shared infrastructure among satellite operators? - The company believes in creating shared infrastructure to reduce capital intensity and improve efficiency, allowing multiple operators to benefit from shared resources [66][67] Question: What is the company's strategy regarding spectrum holders? - The company aims to work with spectrum holders to create a shared infrastructure model that reduces capital investments and provides a utility-like service, ensuring fair treatment among all operators [100][101]

Financial Data and Key Metrics Changes - The company reported a net loss of $56 million for Q1 fiscal 2026, compared to a net loss of $33 million in the same period of 2025, primarily due to increased depreciation and amortization and a higher income tax provision [6][19] - Revenue grew by 4% year over year, driven largely by double-digit growth in the defense and advanced technology segment [6][19] - Adjusted EBITDA increased by 1% year over year, reaching $408 million, with a 35% adjusted EBITDA margin [14][19] Business Line Data and Key Metrics Changes - Communication services revenue was $827 million, flat compared to the prior year, with growth in aviation and government SATCOM offset by declines in maritime and U.S. fixed broadband [21] - Aviation revenue grew by 14%, driven by a 9% year-over-year increase in commercial aircraft and service [21] - Defense and Advanced Technologies segment awards increased by 22% to $428 million, with revenue up 15% to $344 million, primarily from InfoSec and Cyber Defense [24][25] Market Data and Key Metrics Changes - The maritime business saw a 5% year-over-year decline in revenue, while fixed services and other revenue decreased by 13% due to a decline in U.S. fixed broadband subscribers [22][23] - The company ended the quarter with 172,000 fixed broadband subscribers and an average revenue per user of $115 [23] Company Strategy and Development Direction - The company aims to position fiscal 2026 as a launch year, focusing on optimizing the integration of ViaSat and Inmarsat resources to establish growth opportunities and enhance earnings power [10][11] - The strategy includes reducing capital intensity while investing for growth in target markets, with a goal to exit fiscal 2026 with a solid foundation for accelerated growth and cash generation [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as slow recovery in OEM aircraft delivery rates and pressures in U.S. fixed broadband until the ViaSat-three flight two is in service [13][14] - The company expects fiscal 2026 revenue to increase by low single digits year over year, with flattish adjusted EBITDA growth [28] Other Important Information - The company generated $60 million of positive free cash flow in the quarter, bringing the trailing twelve months total to $88 million [20] - Capital expenditures for the year are expected to be about $1.2 billion, including $250 million for the completion of the ViaSat-three constellation [29] Q&A Session Summary Question: How does Trellisware compare with mobile ad hoc networking peers? - Trellisware's system is based on a proprietary networking waveform designed for ad hoc mesh networking, while competitors like Silvis primarily use WiFi [39][40] Question: What is the general penetration of next-generation encryption products? - There is a significant upgrade cycle driven by the need for national security encryption systems to be robust against quantum computing [45][46] Question: Can Trellisware's technology be used for aerial platforms and weapon systems? - Yes, Trellisware's technology can extend to unmanned aerial vehicles and other platforms, although the initial focus has been on specific military applications [43][44] Question: What is the company's philosophy regarding potential business separations? - The company evaluates its portfolio based on synergy and capital needs, considering whether keeping businesses together provides benefits or if separation would be more advantageous [59][62] Question: How does the company view shared infrastructure in satellite operations? - The company believes shared infrastructure can reduce capital intensity and improve efficiency, allowing multiple operators to benefit from a common system [65][66]

Financial Performance - Viasat's Q1 FY2026 revenue increased to $1.171 billion, a 4% increase year-over-year[15] - Adjusted EBITDA for Q1 FY2026 was $408 million, a 1% increase year-over-year[15] - The company generated $60 million in free cash flow during the quarter, a $210 million improvement compared to the prior year period[12] Segment Highlights - Defense and Advanced Technologies (DAT) segment revenue grew by 15% year-over-year[15] - DAT segment awards increased by 22% year-over-year, driven by information security and cyber defense[15] - Communication Services (CS) segment Adjusted EBITDA increased 5% year-over-year[15] Backlog and Awards - Total backlog decreased to $3.549 billion, a 2% decrease year-over-year[15] - DAT backlog increased 49% year-over-year[15] - DAT awards increased 225% year-over-year in information security and cyber defense, reaching $224 million[36] Guidance - Viasat maintained its FY2026 guidance for total revenue to grow at a low single-digit rate[43] - Capital expenditures are expected to be approximately $1.2 billion[43]