Viasat (VSAT) Q1 2025 earnings summary

Executive summary

• Q1 FY25 revenue reached $1.13 billion, up 44% year-over-year, driven by Inmarsat integration and growth in Defense, Advanced Technologies, and Aviation.

• Net loss improved to $32.9 million from $77 million in Q1 FY24, reflecting better operating performance despite higher interest and tax expenses.

• Adjusted EBITDA was $404 million, up 120% year-over-year; combined adjusted EBITDA rose 16% year-over-year.

• Segment operating profit turned positive in both communication services and defense and advanced technologies, reflecting improved margins and licensing revenue.

• Liquidity at quarter end was $2.9 billion, including $1.8 billion in cash and equivalents.

Financial highlights

• Communication Services revenue was $827 million, up 48% from Q1 FY24; combined revenue declined 2% year-over-year due to expected U.S. fixed broadband declines.

• Defense and Advanced Technologies revenue was $300 million, up 37% year-over-year, with product revenue up 45% driven by strong IP licensing.

• Adjusted EBITDA for Communication Services was $308 million, up 98% year-over-year; Defense and Advanced Technologies adjusted EBITDA was $96 million, more than triple the prior year.

• Operating income was $27.8 million, compared to a loss of $41.5 million in the prior year period.

• Cash provided by operating activities was $151.1 million, up from $103.7 million a year ago.

Outlook and guidance

• FY25 revenue expected to be flat to slightly up year-over-year, with adjusted EBITDA growth in the mid-single digits.

• FY25 CapEx expected to decline to $1.4–$1.5 billion, with further step-down to $1.1–$1.2 billion in FY26.

• Positive free cash flow inflection anticipated by end of Q1 FY26, driven by double-digit operating cash flow growth and declining CapEx.

• FY26 expected to see revenue and adjusted EBITDA growth as $3.4 billion in assets under construction enter service.

• Backlog at June 30, 2024 was $3.64 billion, with a little less than half expected to be delivered in the next 12 months.