Viasat results disappoint shareholders
May 22, 2024
By Chris Forrester
Viasat’s shares tumbled 11 per cent following its Q4 and end-of-year financial results in after-hours trading on May 21st. Viasat, which now owns London-based Inmarsat, said that its net loss has grown to $90 million (€82.9m) – up from $62 million in the same period last year. But there was one major shining light in that its Government Systems division reported a 77 per cent increase, hitting $385.8 million and topping analysts’ expectations.
For the quarter ended March 2024, Viasat reported revenue of $1.15 billion, up 72.7 per cent over the same period last year and helped by Inmarsat’s financial contribution.
There were other elements of good news, not least in its Aircraft services which now supply ‘direct-to-seat’ broadband to 3,650 aircraft. Overall Viasat is now supplying connectivity to 19,770 vessels and aircraft at the end of Q4 FY2024. New additions to Viasat’s connected fleet included Royal Jordanian, more aircraft for Icelandair and an extra 40 wide-bodied aircraft for Korean Air.
But as chairman Mark Dankberg admitted in his letter to shareholders, Viasat was in a transition period and the absorption of Inmarsat had entailed some difficult decisions.
“We accelerated realisation of the planned $100 million in annualized cash operating savings by addressing redundancies, and through productivity improvements. That yielded approximately $25 million of cost savings in Q4 FY2024,” said Dankberg.
“In May 2024, beginning with the first quarter of fiscal year 2025, we initiated a new segment reporting structure to better reflect our global mobility strategy and diverse end markets. Following this re-segmentation, Viasat will have two reportable segments: ‘Communication Services’ and ‘Defense and Advanced Technologies’. This new segment reporting will also include revenue data for each of the major business units within each segment,” he added.
Ingesting Inmarsat into Viasat meant a commensurate rise in the company’s overall backlog, up $4.2 billion (47 per cent y-o-y). Viasat delivered record revenue of $4.3 billion, a 68 per cent increase from $2.6 billion a year ago.
For this new trading year, Dankberg said Viasat expected roughly flat revenue growth, commenting: “Satellite Services revenue is expected to decline low to mid-single digits in FY2025 compared to FY2024 reflecting an expected decline in US fixed broadband revenue as we continue to prioritise capacity to our higher margin mobility businesses. The fixed broadband decline will be mostly offset by growth in mobility services revenue, taking into account substantially lower expected OEM deliveries of new aircraft to our customers.”
Viasat expects to move into positive cashflow by the end of Q1 2026.