Viasat, Inc. Q1 FY26 Earnings Analysis

- Fiscal ’26 revenue is expected to grow low single digits year-over-year. - Positive free cash flow is anticipated for fiscal ’26, fiscal ’27, and beyond. - ViaSat-3 Flight 2 and Flight 3 satellites are key catalysts, expected to boost service capabilities and growth starting fiscal ’27. - Flight 2 service entry estimated around May fiscal ’27 will enable improved fixed broadband offerings, increasing gross additions. - Continued growth expected in government SATCOM and Defense & Advanced Technologies segments driven by strong secular tailwinds. - Maritime segment poised for growth resumed by fiscal year-end with higher NexusWave installations. - Aviation revenue projected to grow, supported by increased commercial aircraft in service and migration to higher-value offerings. - Ongoing deployment of multi-orbit broadband networks and next-gen user terminals to support customer growth. - Strategic focus on capital efficiency and differentiated value aims to sustain profitable growth and higher returns.

- Fiscal ’27 and beyond: Company expects positive free cash flow, continuing investment in growth while focusing on cash generation and deleveraging (Page 6). - Adjusted EBITDA for fiscal ’26 expected to be flat despite revenue growth (Page 5). - Revenue projected to grow in low single digits for fiscal ’26; growth driven by defense, aviation, and government SATCOM segments (Page 5). - New ViaSat-3 satellites (Flight 2 and 3) anticipated to catalyze future unit growth, higher ARPU, and improved service offerings starting fiscal ’27 (Pages 2, 4, 5). - Focus on reducing capital intensity while increasing returns on invested capital to enhance profitability (Pages 3, 6). - Cost efficiencies in capital expenditure highlighted; fiscal ’26 CapEx expected $100-$200 million lower than prior guidance, supporting improved cash flow (Page 6). - Strategic initiatives and multi-orbit broadband networks expected to support sustainable growth (Pages 2, 3).

- Fiscal ’26 CapEx outlook revised to $1 billion to $1.1 billion, $100M-$200M lower than prior guidance, with about $350M in the Inmarsat silo. - CapEx breakdown: $200M capitalized interest, $450M maintenance, $200M ViaSat-3 completion, $75M success-based, $150M growth investments. - Continued investment in next-generation defense demand, satellite programs besides ViaSat-3, and customer equipment leveraging ViaSat-3 and multi-orbit capabilities. - Approximately $40 million of ViaSat-3 spend expected to continue into fiscal ’27. - Focus on capital efficiency, not cutting investments; capital spend reduction driven by efficiency gains. - Strategic investments include developing smaller, cost-efficient satellites with better unit productivity to reduce capital intensity and improve return on capital. - Partnership in Equatys venture targeting L-band spectrum development with a capital-efficient approach, consistent with financial goals of growing franchises, cash flow, and deleveraging.

- The company is actively focused on deleveraging and generating positive free cash flow, aiming to reduce net leverage to below 3.0x. - No explicit mention of planned new fundraising through debt or equity in the near term. - Strategic review includes evaluating various capital structure options to maximize shareholder value, which could imply exploring different financing routes, but no concrete plans disclosed yet. - The emphasis is on efficiency-driven capital expenditure rather than cuts, with $40 million of ViaSat-3 spend expected to continue into fiscal 2027. - Additional Ligado-related proceeds and smaller divestitures are expected to further reduce leverage. - The company aims to minimize the cost of capital by balancing growth investments with deleveraging efforts. - Overall, the preference appears to be on using generated free cash flow and strategic transactions to manage capital needs rather than new fundraising currently.

- NexusWave orders have exceeded 2,600 vessels cumulatively. - Approximately 65% of these NexusWave orders are yet to be installed. - Installations of NexusWave are up 33% sequentially but limited by vessel availability. - Strong backlog in government SATCOM and Defense & Advanced Technologies segments is noted. - The company expects momentum from ViaSat-3 satellites Flight 2 and 3 deployment to catalyze new orders. - Positive customer perception and rapid growth in maritime NexusWave service indicate expanding demand.