Viasat (VSAT) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 results exceeded expectations, driven by strong aviation and government SATCOM performance, robust IP licensing in tactical networking, and record new contract awards, especially in Defense & Advanced Technologies (DAT).

• Net loss improved to $137.6 million from $767 million a year ago, primarily due to the absence of a prior-year impairment charge.

• The Inmarsat Acquisition continues to contribute to service revenue growth, particularly in the communication services segment.

• Ongoing focus on capital structure optimization, cash conversion, and return on capital, with new CFO Gary Chase bringing additional financial leadership.

• Capex declined for the fourth consecutive quarter, improving the FY25 capex outlook.

Financial highlights

• Q2 FY2025 revenue was $1.12 billion, down 1% year-over-year, with aviation and government SATCOM growth offsetting declines in fixed broadband and maritime.

• Adjusted EBITDA was $375 million, down 6% year-over-year; margin was 33%.

• Net loss: $137.6 million, or $(1.07) per share, compared to $(6.16) per share last year.

• Capital expenditures declined 37% year-over-year to $229 million, mainly due to lower satellite-related spending.

• Operating cash flow for the first six months was $390.3 million, up from $322.6 million year-over-year.

Outlook and guidance

• Fiscal 2025 outlook maintained: revenue expected to be flat to up slightly year-over-year, with mid-single-digit adjusted EBITDA growth.

• Fiscal 2025 capital expenditures expected to decline further to $1.3–$1.4 billion, with a focus on reducing total CapEx.

• Fiscal 2026 expected to see continued revenue and adjusted EBITDA growth; two-year CapEx remains net neutral.

• Backlog at September 30, 2024 was $3.75 billion, with a little less than half expected to be delivered in the next 12 months.

• Multi-year strategic planning underway to refine operational priorities and financial outlook.