As Viasat<\/b> is dealing with the fallout of the anomaly on ViaSat-3, the operator is focusing its energy toward its mobility business versus residential broadband. With this shift, Viasat is also scrapping plans for ViaSat-4 and writing down the cost of investment. <\/p>\n
With the impairment on ViaSat-3, a total loss on Inmarsat-6 F2, and the write down on ViaSat-4, the operator logged a $900 million charge in the second quarter of its 2024 fiscal year, after taking into account expected insurance proceeds. Viasat plans to file insurance claims for both ViaSat-3 and I-6 F2 by the end of the year. <\/p>\n
ViaSat-4 was supposed to be a future, super high throughput fixed broadband satellite, but that technology will likely apply to a future broadband satellite geared toward mobility, CEO Mark Dankberg told investors on Wednesday during the operator\u2019s second quarter fiscal year 2024 results. <\/p>\n
\u201cIt was designed prior to the Inmarsat acquisition when fixed services were a higher priority,\u201d Dankberg said of ViaSat-4. \u201cGiven the timing on the ViaSat-3s and our focus on mobility, its need date is farther out than originally planned. Deferring capital investment now saves several hundred to millions of dollars in the near-term and accelerates our free cash flow generation, and it improves profitability.\u201d<\/p>\n
Dankberg said Viasat is expecting a report next week on the root cause of the anomaly on the ViaSat-3 feeder link antenna. Viasat is using a different manufacturer for the second ViaSat-3 satellite (ViaSat-3 F2), but Dankberg said this report from the manufacturer will inform corrective actions for F2. He did not name the manufacturer. <\/p>\n
The operator expects to have less than 10% of the throughput on the ViaSat-3 satellite. While Viasat is not pursuing a replacement satellite, it will relocate the second or third satellite (F2 or F3) to cover the Americas, Dankberg said. The operator has not yet decided which satellite will be relocated \u2014 the one to cover Europe, Middle East, and Africa (EMEA) or the Asia-Pacific region. <\/p>\n
\u201cWe have options on both,\u201d Dankberg said. \u201cWe\u2019re really focused on meeting the needs of our mobility customers, and that\u2019s how we\u2019re going to prioritize them.\u201d <\/p>\n
The details of the corrective actions will drive the launch schedule for F2. The F3 satellite now has a launch contract for the fourth quarter of calendar year 2024. <\/p>\n
Viasat is shelving plans to grow in the fixed broadband market in the U.S. \u2014 Dankberg previously said this was a top market for ViaSat-3 capacity, along with in-flight connectivity (IFC). Now, capacity will be prioritized for mobility services. Dankberg told investors he expects the U.S. fixed broadband business to decline until another ViaSat-3 satellite is launched and repositioned. <\/p>\n
With the Inmarsat acquisition, less than 15% of Viasat\u2019s business is fixed residential broadband, CFO Shawn Duffy told investors. \u201cAs we continue to prioritize our bandwidth and work with supporting the growth in our IFC business, you\u2019d expect that [percentage] to continue to go downward,\u201d she said. <\/p>\n
This is part of an \u201cevolution\u201d of strategy accommodating for the ViaSat-3 F1 issue and Inmarsat acquisition, President Guru Gowrappan told Via Satellite<\/i> on Wednesday. <\/p>\n
\u201cOur focus right now is on the mobility business, which includes aviation, maritime, and the government business, a lot of which is centered around mobility. As you think about that mobility strategy, the capacity needs and the flexibility needs are different,\u201d Gowrappan said. <\/p>\n
Although mobility is a major target market for almost all satellite operators, and Intelsat, Starlink, and Hughes Network Systems have logged recent IFC wins, Gowrappan is confident in Viasat\u2019s value proposition. <\/p>\n
He pointed to the seven new Ka-band satellites to be launched in the next two to three years from ViaSat-3 F2 and F3, and Inmarsat GX 7, 8, 9, 10A, and 10B, which he said map with forecasted demand for mobility. <\/p>\n
\u201cOur strategy is different than most of the competition, a lot of them are doing a retail or wholesale model. Our model on IFC is a vertically integrated, direct relationship with the customer,\u201d Gowrappan said. \u201cThe combination of the Inmarsat provides us global, Ka-band coverage, redundancy, and additional capacity. \u2026 Our product and solutioning is deeper between software and hardware competence, and really close to the customer.\u201d <\/p>\n
For the second quarter of fiscal year 2024, Viasat reported revenue of $1.2 billion, up 85% compared to revenue from continuing operations of $664 million in Q2 FY2023. Inmarsat contributed $427 million, reflecting 16% year-over-year-growth. <\/p>\n
Adjusted EBITDA for the quarter was $486 million, an increase of 210% YoY from Adjusted EBITDA from continuing operations in the same time last year. <\/p>\n
Viasat reported a net loss of $767 million during the quarter due to the $900 million charge. <\/p>\n
\u201cThis was our strongest quarter in last two years in terms of growth,\u201d Gowrappan told Via Satellite<\/em>. \u201cWe are confident that our business will continue to grow in revenue and Adjusted EBITDA in FY24 and FY25, and become free cash flow positive in the first half of calendar year 2025, with a meaningful, sustainable free cash flow in FY2026.\u201d <\/p>\n Viasat\u2019s stock value increased nearly 7% on Thursday after results were released after market close on Wednesday.<\/p>\n Satellite Services is by far the highest-earning segment, reporting $585 million in revenue during the quarter \u2014 a 95% increase YoY. The revenue growth was driven by the full quarter impact of Inmarsat and higher demand for commercial air IFC services. Viasat ended the quarter with 3,350 aircraft in service, up 19% year-over-year on a combined basis, with 1,600 aircraft in backlog. <\/p>\n Government Systems revenue during the quarter was $365 million, an increase of 99% from the same time last year from continuing operations, with the impact of the Inmarsat acquisition. Viasat also reported strength in product revenue for its network encryption products. <\/p>\n Commercial Networks reported revenue of $275 million, an increase of 53% year-over-year. This includes $95 million from a litigation settlement. Viasat reported higher revenue from antenna systems products, higher deliveries of commercial air IFC terminals, and the full quarter impact of Inmarsat. <\/p>\n Last week, Viasat announced it laid off 800 employees as part of the Inmarsat integration, about 10% of the workforce of the combined company. The layoffs had already taken place when the announcement was made.<\/p>\n","protected":false},"excerpt":{"rendered":" As Viasat is dealing with the fallout of the anomaly on ViaSat-3, the operator is focusing its energy toward its mobility business versus residential broadband. With this shift, Viasat is also scrapping plans for ViaSat-4 and writing down the cost of investment. With the impairment on ViaSat-3, a total loss on Inmarsat-6 F2, and the […]<\/p>\n","protected":false},"author":1,"featured_media":51731,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-52393","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/52393"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=52393"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/52393\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media\/51731"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=52393"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=52393"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=52393"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}