Viasat (NASDAQ:VSAT) executives said fiscal third-quarter results were tracking to plan and highlighted improving cash generation and leverage reduction, while emphasizing that bringing the ViaSat-3 constellation’s next satellites into service remains a key operational focus for accelerating growth in fiscal 2027 and beyond.
Management: FY2026 tracking expectations; cash generation ahead of plan
Chairman and CEO Mark Dankberg said fiscal 2026 revenue and EBITDA performance were consistent with the company’s expectations entering the year. He added that cash generation has been better than planned, attributing the improvement to “efficient cash conversion,” targeted strategic transactions, and capital and operating spending efficiencies while continuing to invest for future growth.
ViaSat-3 Flight 2 and Flight 3 timelines and expected impact
Dankberg and CFO Gary Chase reiterated the importance of the ViaSat-3 program to capacity expansion and growth across mobility and fixed services. According to Dankberg, ViaSat-3 Flight 2 launched in early November, has completed initial deployments, and is “about 34 days away” from being on station. He said final deployments will commence shortly after that and that the company anticipates services commencing by May.
Flight 3 is undergoing final integration and is expected to launch on a Falcon Heavy shortly after Flight 2 final deployments are complete, pending a specific launch date from SpaceX. Dankberg said service entry is estimated for late summer.
In response to an analyst question, the company said the orbit-raising period is a major driver of time from launch to service. Dankberg said Flight 3 will likely have “more like a two-month orbit raise,” compared to “more like 100 days” for Flight 2.
Management reiterated that each of Flight 2 and Flight 3 is expected to add more bandwidth capacity than the company’s entire existing fleet. Dankberg said the new satellites also introduce new functional capabilities, including resilience benefits for U.S. and international government customers and commercial mobility users, particularly in or near geopolitical hotspots. The company also expects Flight 2 and Flight 3 to support improvements in fixed services.
Multi-orbit strategy: NexusWave growth and new terminals
Dankberg said Viasat continues to focus on multi-orbit connectivity as a competitive differentiator, citing “rapid growth” of its Maritime NexusWave service as evidence of customer interest in multi-orbit broadband networks compared with single-orbit systems. He said the company is investing in next-generation mobile user terminals and additional sources of LEO bandwidth for aeronautical and government customers.
On the aviation side, Dankberg discussed work with Telesat intended to bring a single-antenna solution that can operate with both GEO and LEO at the same time. He described the concept as similar to what the company has implemented in maritime, where GEO provides most bandwidth and LEO is used for latency-sensitive traffic. He noted that video traffic typically is not latency-sensitive and is well suited for GEO. He also said most existing Ka-band in-flight connectivity terminals are capable of operating with Ka-band LEO systems, though not simultaneously with GEO.
Q3 financial results: revenue up, record backlog, and free cash flow benefit from Ligado payment
Chase reported fiscal third-quarter revenue of $1.2 billion and adjusted EBITDA of $387 million, representing a 33% adjusted EBITDA margin. Cash flow from operations was $727 million, or $307 million excluding a Ligado lump-sum payment. Capital expenditures were $283 million, resulting in free cash flow of $444 million, or $24 million excluding the Ligado payment.
Net income was $25 million, an improvement of $183 million from the year-ago period. Chase said the improvement was primarily due to higher interest income recognized during the quarter related to the deferral of Ligado’s quarterly fees, which were received as part of the lump-sum payment.
Chase also said awards were $1.0 billion, down 10% year over year, but described awards as “lumpy.” He said trailing 12-month awards growth was 4%, including double-digit growth in Defense and Advanced Technologies (DAT). Backlog was about $4.0 billion, a company record, up about 12% or $430 million, which he said was driven largely by strong second-quarter awards and secular drivers in government SATCOM and DAT.
Adjusted EBITDA declined 2% year over year, which Chase attributed primarily to $10 million of incremental R&D investments related to growth initiatives and impacts from the government shutdown. He estimated the shutdown reduced EBITDA by about $10 million in the third quarter and said the company expects a similar impact in the fourth quarter.
Viasat ended the quarter with net debt to trailing 12-month adjusted EBITDA of 3.25x, down sequentially and from about 3.7x a year earlier.
Segment commentary: aviation growth, residential declines, and DAT momentum
In Communication Services, Chase said segment revenue was $825 million, up 1%. He said growth in aviation and government SATCOM was moderated by declines primarily in residential fixed broadband and maritime.
- Aviation: Revenue grew 15%, driven by a 9% increase in commercial aircraft in service and higher average revenue per aircraft as customers migrate to higher-value offerings. Chase said aviation awards were below expectations and that the commercial aircraft installation backlog declined sequentially based on updated customer indications. Under existing customer agreements, Viasat now anticipates approximately 1,100 additional commercial aircraft will be put into service with its IFC systems. He added the company has “hundreds” of incremental aircraft working through contracting that it expects to materialize in backlog over coming quarters. Management said Flight 2 service entry could catalyze new orders and expand ARPA through higher-value offerings.
- Government SATCOM: Revenue grew 4%, reflecting growth with U.S. and international governments. Chase said the company expects continued momentum due to “strong secular drivers in defense.”
- Maritime: Revenue declined 3% as vessels in service decreased. Chase said NexusWave orders are strong and installations rose 33% sequentially, though paced by vessel availability. He said cumulative NexusWave orders exceeded 2,600 vessels, with about 65% not yet installed. He said the company expects slight year-over-year maritime growth to resume by fiscal year-end, driven by a larger NexusWave installed base and higher ARPUs.
- Fixed Services: Revenue declined 20% as U.S. fixed broadband subscribers continued to fall. Viasat ended the quarter with 143,000 subscribers and $112 ARPU. Chase said the business faces “significant headwinds” due to U.S. bandwidth constraints for several years, and that ViaSat-3 Flight 2 entry into service beginning in the first quarter of fiscal 2027 should allow improved offerings and increased gross additions.
Communication Services adjusted EBITDA was $319 million, down 3%, primarily due to higher R&D investments.
In Defense and Advanced Technologies, Chase reported revenue of $332 million, up 9%, driven by backlog and growth in InfoSec/cyber defense and tactical networking. Tactical networking revenue rose 20% year over year, and InfoSec and cyber product revenues increased 8% on demand for high-assurance encryption products. He also noted a government shutdown-related certification delay for a new “space reprogrammable crypto product.” DAT adjusted EBITDA was $68 million, up 7% year over year, with higher R&D investment partially offsetting the revenue increase.
Looking ahead, Chase said the company continues to expect fiscal 2026 revenue to rise in the low single digits with flat adjusted EBITDA. He also said Viasat now expects fiscal 2026 capital expenditures to be $100 million to $200 million lower than prior guidance, within a $1.0 billion to $1.1 billion range, and described the change as primarily efficiency-driven rather than a broad timing shift, aside from about $40 million of ViaSat-3 spending expected to continue into the first quarter of fiscal 2027.
Management also reiterated that it expects positive free cash flow for fiscal 2026, fiscal 2027, and beyond, while noting that free cash flow guidance excludes non-recurring benefits from Ligado lump-sum payments but includes expected ongoing quarterly payments.
About Viasat (NASDAQ:VSAT)
Viasat, Inc (NASDAQ: VSAT) provides high‐capacity satellite broadband and wireless communications services to consumer, commercial and government customers worldwide. The company designs and operates satellite systems and network infrastructure to deliver secure, high-speed connectivity across remote and underserved regions, as well as managed networking solutions for enterprises and public sector agencies.
Viasat’s product offerings include residential and enterprise satellite internet services, in-flight connectivity for commercial airlines and business jets, and secure networking platforms tailored to defense and intelligence users.
