TAMPA, Fla. — Viasat’s shares rocketed 38% Aug. 8 after the geostationary fleet operator raised annual revenue expectations amid strong government and aviation broadband business growth.
The Carlsbad, California-based company now expects slightly more than the flat revenue growth it previously forecasted for its fiscal year to the end of March.
The improved outlook comes after revenues jumped 6% year-on-year to $1.1 billion for the three months to June 30, the first quarter of Viasat’s fiscal year 2025, when taking into account the Inmarsat satellite operator business it acquired last year.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) grew 16% to $404 million.
The good and bad
Revenues were mainly boosted by a 37% year-on-year increase in sales from Viasat’s Defense and Advanced Technologies business unit, comprising cybersecurity and ground equipment products, to $300 million for the period.
Despite ongoing aircraft manufacturing delays, Viasat said revenue from communication services in the aviation market also soared 19% to $257 million.
The operator has 1,460 of contracted aircraft in backlog and 350 additional aircraft it expects to book later.
Aircraft delivery delays are “not getting worse but they’re persisting,” Viasat CEO Mark Dankberg said Aug. 7 during an earnings call with analysts.
Still, the company continues to expect to have 4,200 aircraft in service by the end of March.
Government satellite communications sales also increased 11% to $184 million for fiscal Q1 2025.
However, overall communication services revenues slipped 2% to $827 million. The drop was mainly caused by an 18% decline in a fixed residential broadband business facing heavy competition in the United States from Starlink, SpaceX’s low Earth orbit constellation.
Viasat recorded 257,000 U.S. fixed broadband subscribers as of June 30, less than half the 603,000 subscribers recorded four years ago, telecoms analyst Tim Farrar noted.
Viasat also reported a near-10% year-on-year fall in revenues for maritime communication services to $124 million.
Down but not beaten
Viasat’s fixed broadband business has suffered amid issues with the company’s next-generation ViaSat-3 F1 satellite, which lost at least 90% of its 1 terabit per second capacity following an antenna deployment failure last year.
Dankberg said ViaSat-3 F1 entered service over the Americas in July, more than a year after launching on a Space Falcon Heavy rocket April 30.
To help mitigate the impact of the satellite’s defective antenna, the company has been allocating available bandwidth away from fixed broadband to higher growth markets, such as aviation, as it waits to deploy the other two spacecraft in the ViaSat-3 constellation.
While Viasat still expects to get up to 10% of ViaSat-3 F1’s design capacity, Dankberg said “we may need to make additional investments in ground equipment needed to get to those levels.”
He also said ViaSat-3 F1 will likely be moved over Europe, the Middle East and Africa once the company deploys follow-on ViaSat-3 satellites over the Americas and Asia Pacific.
The company expects the next ViaSat-3 to enter service in mid-to-late 2025, followed by the final satellite in the constellation toward the end of that year. Boeing is the prime manufacturer for all three satellites, using payloads provided by Viasat.
ViaSat-3 F1 was insured for about $421 million.
Viasat also slightly increased its EBITDA forecast for fiscal 2025 to around 5%, versus low-to-mid-single-digit growth.
The company’s shares closed at $24.49, up 37.82% compared with Aug. 7 but still down 12.66% since the start of the year.
