Viasat Inc. (VSAT) Earnings & Analysis

Latest quarter

Viasat reported Q1 FY2027 revenue of $1.2 billion, below the consensus, and down from a year earlier despite rounding to $1.2 billion in both periods. Its diluted loss per share narrowed to −$0.38 from −$0.43.

The company’s filing attributed the revenue decline to lower product sales, partly offset by higher service revenue. Aviation and government satellite communications grew, while fixed services and maritime declined. In Defense and Advanced Technologies, tactical networking growth partly offset declines in other product lines.

Viasat reported a gross margin of 35.7%, compared with 35.0% a year earlier, and an operating margin of 4.09%, compared with 3.99%. The filing attributed lower service costs mainly to improved margins in Communication Services. Free cash flow fell to $41.6 million from $60.4 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Mark Dankberg said demand for satellite connectivity was growing across commercial and defense markets, with customers seeking communications, secure networks and mission capabilities. He said Viasat’s next-generation terminals and network architecture are designed to put capacity where it is needed and improve bandwidth productivity.

CFO Garrett Chase said aviation revenue benefited from more aircraft in service and higher average revenue per aircraft. He expects revenue per aircraft to expand as more airline customers move to Full, Fast, Free offerings. Chase said maritime remained challenging because the number of vessels in service had fallen; Viasat was working to improve its NexusWave installation rate.

Chase said lower intellectual property licensing revenue affected both revenue and adjusted EBITDA in Defense and Advanced Technologies. He also said tactical networking growth came from communications products and TrellisWare sales, particularly to international customers. Dankberg highlighted the next phase of the Protected Tactical SATCOM-Global program, saying it involved both satellite technology and operating capabilities.

On competition, Dankberg said some markets would become more competitive, but that Viasat intended to use ViaSat-3 technology and multiband, multi-orbit integration to compete. He said the company had completed deployments and bus testing for ViaSat-3 Flight 2 and, after quarter-end, completed reflector and boom deployment for Flight 3.

Asked about the strategic review, Dankberg said Viasat was evaluating whether to keep Defense and Advanced Technologies together with its services businesses. He said separating them could be difficult to reverse and that the company did not want to act prematurely while the competitive environment was changing.

Asked about Equatys, Dankberg said the next major announcement was intended to address funding for the initial satellite constellation. He declined to give the timing and said further details would clarify the capacity the constellation could provide.

Guidance

On the earnings call, CFO Garrett Chase said Viasat’s FY2027 financial outlook was unchanged, including its expectations for revenue growth, adjusted EBITDA, capital spending and free cash flow.