VIASAT INC Q4 FY2025 earnings call

• Fiscal 2025 was pivotal, creating foundation for multi-year growth with increased earnings and decreased capital intensity. Met or beat guidance metrics, achieved record new contract awards growth, integrated ViaSat-3 Flight 1, completed satellite roadmap milestones, launched NexusWave maritime service, made network optimization innovations, reached third-party network agreements, and made organizational changes. Enhanced financial transparency with new reporting segments. Working with MSSA to lay foundation for open architecture standards-based ecosystem for NTN extensions. - ViaSat-3 Flight 2 critical path is corrective actions and testing reflectors, planned to shift to launch site this summer with adjusted in-service date. Flight 3 has different manufacturing design with no corrective actions. ViaSat-3 Flight 1 usage scaling steadily with favorable user experience results on Hawaii routes. NexusWave maritime service off to good start. - In fiscal 2026, focus on reducing capital intensity, generating free cash flow, reinforcing competitive position, unlocking portfolio value. Expect modest revenue growth, flattish adjusted EBITDA, with growth in aviation, government satcom, and DAT franchises offsetting some costs. Developing Amara for next-generation IFC multi-network solution. Government satcom expected to have higher activity and margin expansion. Maritime expected to increase installations and see growth. Fixed broadband testing new offerings to stabilize. Info Sec and Cyber business expected to grow meaningfully.

In the Communication Services segment, revenue declined 4% in fiscal 2025, with fixed services and other end-product revenue down, but government satcom and aviation service revenue showing strength. Commercial aviation Asian business had service aircraft up 10% with a backlog up 18%, business aviation and service aircraft up 12% year-over-year. Maritime revenue was down 8% but NexusWave installs were scaling with over 100 ships in active service and orders for nearly 500 more. Government satcom revenue grew 16%. In the DAT segment, Info Sec and Cyber business was the largest franchise, with fourth quarter product revenue up 8% and awards more than doubling. For fiscal 2025, total revenue was $4.5 billion, adjusted EBITDA was $1.55 billion with a 34.2% margin.

• Fiscal 2026 expected modest revenue growth with flattish adjusted EBITDA, plus or minus 1% from fiscal 2025's $1.547 billion. Incur about $60 million additional third-party bandwidth expense, $30 million additional operating costs, $80 million to ready ViaSat-3 ground network for Flights 2 and 3. Growth in aviation, government satcom, and DAT franchises, along with $40 million reduced operating costs from voluntary retirement program. Aviation business facing headwinds from OEM delivery delays and aircraft out-of-service. Annualized exposure to current tariffs relatively minor but already affected. - Expect continued growth in aviation sub-segments, develop Amara for best customer experiences, sustained higher activity and margin expansion in government satcom, increase maritime installations and see growth, test new offerings in fixed broadband to stabilize, and growth in Info Sec and Cyber business.

• Ongoing court proceedings related to Ligado bankruptcy, with Ligado's case having no legal merit and unfounded allegations. Future cash payments from Ligado excluded from financial outlook. - Macro headwinds in aviation business from OEM delivery delays and aircraft out-of-service, affecting EBITDA guidance.

Q: Update on the strategic review process for the Defense and Advanced Technologies segment and timing, and update on satellite launch for F2 and EBITDA guide?

A: Defense and strategic review is still underway. Flight 2 satellite planned to shift to launch site this summer with adjusted in-service date to early 2026. Softer EBITDA guide not a function of wearing more ground network costs before revenue benefit.

Q: Timeline on Ligado and magnitude of potential proceeds?

A: Participating in litigation, look at public record for progress. Amount owed is in excess of $500 million, proceeds from Ligado would likely go to delevering.

Q: Update on L-band and D2D, conditions to monetize spectrum?

A: Serve public interest through aeronautical, maritime, and national security requirements, facilitate open architecture standards-based environment, and reduce capital intensity through shared infrastructure.

Q: Growth drivers for Info Sec and Cyber defense and space Emission Systems businesses?

A: Encryption business driven by quantum-resistant encryption and cybersecurity for space. Space Emission systems driven by mission requirements, standardization, and national security applications.

Q: Revenue addition of ViaSat-3 F2 and F3 in 2027, volume vs pricing growth, and free cash flow building blocks?

A: Each Flight 2 and 3 have more bandwidth than existing fleet. Growth through more platforms, more bandwidth per platform, and improved productivity. Free cash flow building blocks include EBITDA growth, focus on net working capital, and disciplined capital spending.

Q: Confidence in maritime inflection in late fiscal 2026 and role in Golden Dome?

A: Confidence from beta trials, production, backlog growth, and revenue per ship growth. Involved in Golden Dome with substantial components across technologies.

Q: Government satcom growth in 2026 and leverage in 2026?

A: Government satcom expected to have slight growth with sustained higher activity. Leverage expected to tick-up slightly in 2026 due to achieving outcomes and then be on different path.