Viasat revenues up 22%
November 11, 2019
By Chris Forrester
Consumer broadband-by-satellite specialist Viasat has reported a strong set of results for its Q1 period with revenues up 22 per cent, and losses trimmed with EBITDA growth up an impressive 115 per cent.
Viasat provides broadband to its consumers – and government users – direct via satellite and is expanding its coverage outside of the US.
“We’re very pleased to report a robust start to fiscal year 2020,” said Mark Dankberg, Viasat chairman and CEO. “Our fiscal year 2020 financial outlook benefits from, and builds on, the momentum from a record fiscal year 2019. Broadband satellite services set quarterly records powered by sustained demand for higher value residential service plans, and 76 per cent year-over-year growth in active commercial aircraft using our in-flight connectivity systems.”
He added that government systems revenues jumped 37 per cent compared to last year, and maintains a compelling growth outlook for products and services with robust new contracts and delivery order agreements.
In the first quarter of fiscal year 2020, Viasat’s Satellite Services segment achieved its sixth sequential quarter of revenue growth, setting a record high of $196.8 million. This reflected gains of 28 per cent year-over-year and 4 percent sequentially. Key trends for the quarter include: ARPU growth resulting from higher value residential and enterprise plans, driving record US fixed broadband revenues; record revenues in commercial in-flight connectivity (IFC) as in-service aircraft increased 76 per cent year-over-year and in-flight services expanded; and international growth in fixed residential service, expanded Community Wi-Fi hotspots and enterprise services. Year-over-year, new contract awards increased 25 per cent to $192 million, segment operating loss decreased by 93 per cent to $2.1 million and Adjusted EBITDA increased by 96 per cent to $67.1 million, as existing fixed broadband and commercial in-flight services businesses scaled efficiently, alongside investments in global broadband businesses.
Giles Thorne, media analyst at investment bank Jefferies, said: “A lot of welcome commentary shared on how big the [In-Flight] opportunity could be to Viasat. Rather ironically, given how much time Viasat spends in dismissing peers, using an LSE report commissioned by Inmarsat. Anyway, Viasat believes that its IFC business can be a multi-billion dollar annual revenue generator during lifetime of [its Viasat-3 version satellites] if it can carry across its 30 per cent market share in narrow-body [aircraft]. Its North American credentials suggest it is not to be dismissed, but we’d highlight the following counterpoints: Viasat’s ex-US market share capture of retro / line-fits has been flat at 5-6 per cent every year for the past four years suggesting that to inflect to 30 per cent is going to require massive market capture of line-fits from here; Viasat-3 Europe / Asia are still at least 2 years away while peers, notably Inmarsat, are in-market now and building third generation HTS with better bandwidth economics than [Viasat’s] V-3.”