Viasat orders Asia Pacific ViaSat-3 from Boeing amid record revenue
WASHINGTON — Viasat CEO Mark Dankberg said the company has executed an agreement with Boeing for a third ViaSat-3 satellite, securing the last spacecraft needed for global Ka-band coverage.
In a Feb. 7 earnings call, Dankberg said the launch of the first ViaSat-3 satellite, expected to cover the Americas, will likely slip a few months to early 2021. He said the company is working on shortening other timetables, such as post-launch orbit raising and pre-service testing to offset the likely launch delay.
“[Based on] the progress on the first two ViaSat-3 satellites, and now having executed a third Asia Pacific satellite with Boeing, we believe we are well positioned to capture a good portion of the global market,” Dankberg said.
Each ViaSat-3 satellite is projected to have a terabit or more of total capacity, making them the highest-throughput geostationary satellites under construction.
Dankberg did not say when exactly Viasat finalized the Boeing agreement for the ViaSat-3 Asia-Pacific satellite, which was originally expected last year. A Viasat spokesperson did not provide a date by press time.
Carlsbad, California-based Viasat has three launch contracts for ViaSat-3 — one with Arianespace for an Ariane 5, one with United Launch Alliance for an Atlas 5, and one with SpaceX for a Falcon Heavy — but has not said which will launch first. Viasat is expected to launch the first ViaSat-3 to cover the Americas, followed be the second ViaSat-3 for Europe, the Middle East and Africa six months later. Dankberg said the third ViaSat-3, designated for the Asia Pacific, is expected to launch in the second half of 2022.
Viasat reported record revenue of $555 million for the three months ended Dec. 31, up 45 percent year over year. The results bested Wall Street’s expectation of $488 million and Raymond James’ projection of $516 million, according to Raymond James analyst Ric Prentiss.
In an earnings release, Viasat said it is close to wrapping up an insurance claim for a faulty antenna on ViaSat-2, having obtained $127.8 million in claims during the quarter and $172.2 million overall. Viasat told the U.S. Securities and Exchange Commission in November it was seeking $177.4 million for the satellite’s reduced performance. Built by Boeing, ViaSat-2 launched in June 2017 and suffered an antenna deployment issue before entering service.
Dankberg said cash flow from satellite services, one of Viasat’s three business lines, would be used to fund a “large segment” of the ViaSat-3 constellation. Satellite services, which includes consumer broadband, is Viasat’s second largest revenue generator, following government systems.
Satellite services revenue rose 9 percent to a record $178 million.
Shawn Duffy, Viasat’s chief financial officer, said the company is continuing its strategy of focusing less on subscriber numbers for satellite internet and more on securing higher paying customers. As customers drop subscriptions for broadband from the older ViaSat-1 satellite (launched in 2011), Viasat can use the freed capacity to offer more expensive, higher capacity plans, she said.
Viasat’s subscriber count, Duffy said, was “essentially flat” with its previous quarter total of 585,000.
Viasat reported a 38 percent year-over-year increase in government systems revenue to $250 million, and a 129 percent increase in commercial networks revenue to $127 million — both new records.
Duffy said sales of inflight connectivity terminals, satellite network products and antenna systems drove commercial networks revenues. In government, a higher mix of “nondevelopmental item product revenues” for data links, information assurance, satellite communications and government mobile products drove revenues, she said.
Duffy said Viasat expects to generate free cash flow a couple of years after the first ViaSat-3 launch, but declined to get into specifics. Viasat reported a net loss for the quarter of $10.4 million.