VIASAT INC Q1 FY27 Results

The first quarter of fiscal year 2027 was marked by disciplined execution, operational progress – including on the ViaSat-3 (VS-3) satellites – and strong awards in growing business areas that reinforce our confidence in targeting new markets, our competitive positions, and our ongoing growth prospects. We believe our Q1 FY2027 results are consistent with our fiscal year 2027 outlook including a stronger second-half supported by substantial backlog, very attractive new awards in key portions of our DAT and government satcom portfolios, our largest ever government new business pipeline, and our ongoing deployment of new broadband satellite resources and technologies. We aim to accelerate momentum in our DAT portfolio, take actions that further improve our competitive position in the existing and emerging L-band Mobile Satellite Services (MSS) markets, and refine and reinforce our competitive position in broadband satellite services – especially regarding resilience, reliability, and performance in the most challenging commercial and government mobility environments. We entered the fiscal year focused on three priorities: drive growth by identifying and capturing new contract awards in attractive applications and market segments within our dual-use technology and services portfolios and new business pipeline; leveraging technology that simultaneously improves reliability, resilience, and airtime costs in broadband and MSS bands; and driving operational and business model improvements that continue to reduce capital intensity – including via ongoing AI/ML (Artificial Intelligence/Machine Learning) network optimizations. An over-arching theme is the growing convergence of our DAT technology base in communications, cybersecurity, networking, and data analytics, with proliferated, resilient dual-use space infrastructure to improve mission specific outcomes. There is a lot of attention on the MSS bands because of their potential for consumer D2D (Direct-to-Device) enabled by the integration of 3GPP standards for satellite NTN (Non-Terrestrial Network) capability into terrestrial mobile infrastructure and end user devices. As governments, enterprises, and consumers increasingly seek integrated and resilient solutions, we believe our differentiated capabilities position us well to address some of the world’s most complex connectivity and mission challenges. Our teams also delivered solid operational performance during the first quarter, maintaining financial discipline while achieving our Adjusted EBITDA objectives despite ongoing headwinds in portions of our portfolio. We maintained a strong focus on cost discipline, operational productivity, and cash flow generation while continuing to invest selectively in strategic growth initiatives. Rapid evolutions in payload, system, and mission technology are creating very substantial additional new technology and services market opportunities, especially for companies that can integrate across commercial and national security applications, and can invent and scale new technologies. We are beginning to see evidence of the opportunities for Viasat in those areas, and see growth in DAT awards, in particular, as leading indicators building further confidence in that approach. We successfully completed all deployments and the satellite bus In-Orbit Test (IOT) phase on VS-3 F2 and anticipate its service entry by September 2026. Subsequent to quarter end, we successfully completed reflector assembly deployments on VS-3 F3 and entered the IOT phase ahead of expected service entry over the Asia-Pacific (APAC) region in late August or early September 2026. Successful deployments for VS-3 F2 and F3 are important for ongoing communications services businesses, but also for the unique technology and functional capabilities they bring especially in geographic coverage flexibility and resilience. We believe validation of the underlying technologies will contribute to near-term growth in DAT, including in new multi-orbit space systems that leverage those technologies. In maritime, NexusWave continues to demonstrate customer interest and acceptance of effective multi-orbit solutions. In aviation, we remain focused on using our latest satellites to enhance customer experience and improve service reliability, and advancing our next-generation connectivity roadmap. We continue to work closely with airline partners as the market more closely integrates and personalizes the entire onboard experience across connectivity and passenger entertainment and engagement. From a longer term perspective, we see increasing convergence in dual-use commercial and national security uses of space. We believe Viasat is exceptionally well positioned to capture certain of these opportunities through our unique combination of space and ground network technologies, resilient terrestrial radio and multi-media networking, link and network security and cyber defense, and mission and operational expertise. The value of our new business pipeline, especially in DAT and government satcom, is larger than ever. While DAT will often be the first place where growth in those areas will be manifested, we see good potential for ongoing conversions to both government and commercial satellite services. More of our solutions combine multi-orbit orchestration, close integration with specific mission systems, data analytics, and dual-use infrastructure to augment and enhance MILSATCOM systems. We continue to invest prudently in emerging opportunities including direct-to-device communications, next-generation mobility services, network orchestration, cyber solutions, and advanced space architectures. Throughout our 40+ year history, we have successfully navigated industry transitions by investing early in the right technologies that address evolving customer needs. Today is no different. The convergence of communications, networking, cybersecurity, data, and space infrastructure is reshaping global markets, creating opportunities for companies with the scale, expertise, and vision to deliver integrated solutions. We believe Viasat is uniquely positioned to help customers navigate this transformation. We are anticipating and seeing evolution in our portfolio of government and commercial technologies and recurring services businesses. While we see the effects of greater competition in our “legacy” commercial services – we are also seeing growth in emerging segments of dual use, multi-orbit, and multi-band driven by underlying new technologies. We believe the net effect indicates overall good growth opportunities. DAT awards and government communications services serve as leading indicators, and we expect these trends to become increasingly clear throughout the remainder of this fiscal year. We believe we can evolve while continuing to manage our business to generate cash and strengthening the balance sheet, as well as reducing capital intensity and investing prudently in underlying new technologies. The combination of growth in the space market, and our business and technical progress is creating more opportunity for us than ever – as reflected in our new business pipeline. The VS-3 deployments along with a number of other important space and ground technology accomplishments and competitive wins is building momentum in new markets and critical applications. Demand for resilient communications, secure networks, mission-critical connectivity, and space-enabled capabilities is clearly growing in both commercial and defense markets worldwide. Viasat has never been defined by a single technology cycle, satellite launch, or market trend. Our history has been built on continued innovation, reinvention, resilience, and the ability to adapt to changing customer needs. While the path forward will not be without challenges, we believe the foundation we have built and the opportunities ahead will deliver sustained success. We enter the remainder of fiscal year 2027 with confidence in our strategy, momentum across key growth initiatives, and a clear focus on creating long-term shareholder value. Sincerely, Mark Dankberg