Viasat Inc. VSAT reported healthy second-quarter fiscal 2024 results. The company reported higher revenues year over year, backed by healthy demand trends in all verticals. Growth in commercial air IFC services, rising shipments and installments of mobility terminals, and growing demand for information assurance products supported the top line during the quarter. However, the decline in fixed broadband subscribers partially reversed this trend.
Net Income
The company incurred a net loss of $767.2 million or a loss of $6.16 per share compared with a net loss of $48.2 million or a loss of 64 cents per share in the prior-year quarter. High interest expenses and satellite impairment charges adversely impacted the bottom line during the quarter.
Excluding non-recurring items, Viasat recorded a non-GAAP net income of $149.7 million or $1.19 per share against a net loss of $13.6 million or a loss of 18 cents per share in the prior-year period. The bottom line beat the Zacks Consensus Estimate of 48 cents.
Revenues
Revenues surged 64.5% to $1,225.4 million driven by solid growth in product and service revenues. The top line surpassed the consensus estimate of $1,057 million.
Product revenues were $401.7 million, up from $261 million in the year-ago quarter. Net sales from Service more than doubled to $823.7 million from $402.6 million in the year-ago quarter.
Revenues from Satellite Services improved to $585.3 million from $300.5 million in the year-ago quarter. The nearly two-fold rise was driven by healthy demand for commercial air IFC services and incremental contribution from the Inmarsat buyout. The segment’s adjusted EBITDA more than tripled to $302 million from $92 million, backed by higher commercial air IFC service activations and a full quarter contribution from Inmarsat.
Commercial network contributed $275 million in revenues, up 52.8% year over year. Solid demand for Antenna system products and positive momentum of IFC orders supported the gain from this vertical. Adjusted EBITDA came in at $66 million, up from $21 million a year ago.
The Government Systems segment registered revenues of $365 million from continuing operations, up 99% year over year. Higher information assurance product deliveries supported the top line. The segment’s adjusted EBITDA from continuing operations was $118 million, up from $44 million, backed by the contribution from Inmarsat and solid product revenues.
Cash Flow & Liquidity
During the second quarter of fiscal 2024, Viasat generated an operating cash flow of $219 million compared with $188 million in the prior-year period. As of Sep 30, 2023, the company has $1,961.6 million in cash and cash equivalents, with a net debt of $5.6 billion.
Outlook
For fiscal 2024, management expects revenues to increase high single digit year over year in the range of $4.1-$4.25 billion. Adjusted EBITDA from continuing operations is expected to increase mid-single digit. Viasat anticipates strong growth in Government Systems and Commercial Network segments with a relatively modest year-over-year growth in Satellite Services.
Technical Analysist
Price Momentum
VSAT is trading near the bottom of its 52-week range and below its 200-day simple moving average.
What does this mean?
Investors have been pushing the share price lower, and the stock still appears to have downward momentum.
Net Income
The company incurred a net loss of $767.2 million or a loss of $6.16 per share compared with a net loss of $48.2 million or a loss of 64 cents per share in the prior-year quarter. High interest expenses and satellite impairment charges adversely impacted the bottom line during the quarter.
Excluding non-recurring items, Viasat recorded a non-GAAP net income of $149.7 million or $1.19 per share against a net loss of $13.6 million or a loss of 18 cents per share in the prior-year period. The bottom line beat the Zacks Consensus Estimate of 48 cents.
Revenues
Revenues surged 64.5% to $1,225.4 million driven by solid growth in product and service revenues. The top line surpassed the consensus estimate of $1,057 million.
Product revenues were $401.7 million, up from $261 million in the year-ago quarter. Net sales from Service more than doubled to $823.7 million from $402.6 million in the year-ago quarter.
Revenues from Satellite Services improved to $585.3 million from $300.5 million in the year-ago quarter. The nearly two-fold rise was driven by healthy demand for commercial air IFC services and incremental contribution from the Inmarsat buyout. The segment’s adjusted EBITDA more than tripled to $302 million from $92 million, backed by higher commercial air IFC service activations and a full quarter contribution from Inmarsat.
Commercial network contributed $275 million in revenues, up 52.8% year over year. Solid demand for Antenna system products and positive momentum of IFC orders supported the gain from this vertical. Adjusted EBITDA came in at $66 million, up from $21 million a year ago.
The Government Systems segment registered revenues of $365 million from continuing operations, up 99% year over year. Higher information assurance product deliveries supported the top line. The segment’s adjusted EBITDA from continuing operations was $118 million, up from $44 million, backed by the contribution from Inmarsat and solid product revenues.
Cash Flow & Liquidity
During the second quarter of fiscal 2024, Viasat generated an operating cash flow of $219 million compared with $188 million in the prior-year period. As of Sep 30, 2023, the company has $1,961.6 million in cash and cash equivalents, with a net debt of $5.6 billion.
Outlook
For fiscal 2024, management expects revenues to increase high single digit year over year in the range of $4.1-$4.25 billion. Adjusted EBITDA from continuing operations is expected to increase mid-single digit. Viasat anticipates strong growth in Government Systems and Commercial Network segments with a relatively modest year-over-year growth in Satellite Services.
Technical Analysist
Price Momentum
VSAT is trading near the bottom of its 52-week range and below its 200-day simple moving average.
What does this mean?
Investors have been pushing the share price lower, and the stock still appears to have downward momentum.
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