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Viasat (VSAT) Reports Y/Y Wider Q3 Loss Despite Solid Revenues
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Viasat Inc. (VSAT - Free Report) reported lackluster third-quarter fiscal 2024 results with a wider-than-expected loss. While the bottom line missed the Zacks Consensus Estimate, the top line beat the same.
Viasat reported higher revenues year over year, backed by healthy demand trends. 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 $124.4 million or a loss of 99 cents 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 owing to the debt incurred for the Inmarsat acquisition adversely impacted the bottom line during the quarter. The bottom line was wider than the Zacks Consensus Estimate of a loss of 14 cents.
Excluding non-recurring items, Viasat recorded a non-GAAP net income of $29.7 million or 24 cents per share against a net loss of $10.9 million or a loss of 14 cents per share in the prior-year period.
Revenues
Revenues surged 58% to $1.1 billion, driven by solid growth in product and service revenues. The top line surpassed the consensus estimate by 9 million.
Product revenues were $303.1 million, up from $249.3 million in the year-ago quarter. Net sales from Service more than doubled to $825.5 million from $402.1 million in the year-ago quarter.
Revenues from Satellite Services improved to $581.4 million from $302.4 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 $288.5 million from $90.4 million, backed by higher commercial air IFC service activations and a full quarter contribution from Inmarsat.
Revenues from Commercial Networks remained relatively flat at $166.4 million as lower revenues from commercial air IFC terminal deliveries were offset by incremental contribution from Inmarsat. Adjusted EBITDA came in at a loss of $35.1 million compared with a loss of $19.2 million a year ago.
The Government Systems segment registered revenues of $380.8 million from continuing operations, up 109% year over year, driven by solid Inmarsat contribution. The segment’s adjusted EBITDA from continuing operations was $129.7 million, up from $50.9 million, backed by the contribution from Inmarsat and solid product revenues.
Other Details
In the December quarter, the company reported an operating loss of $156.5 million compared with an operating loss of $39.5 million in the prior-year quarter. Adjusted EBITDA was $383.1 million, up from $138.9 million in the year-ago quarter.
Cash Flow & Liquidity
During the third quarter of fiscal 2024, Viasat generated an operating cash flow of $134 million compared with $89 million in the prior-year period. As of Dec 31, 2023, the company has $1.6 billion in cash and cash equivalents, with a net debt of $5.9 billion.
Outlook
For fiscal 2024, management expects revenues to increase by high single-digit year over year in the range of $4.1-$4.25 billion. Adjusted EBITDA from continuing operations is predicted to increase by 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.
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It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Headquartered in Wilmington, DE, InterDigital, Inc. (IDCC - Free Report) is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks.
This Zacks Rank #2 (Buy) stock has a long-term earnings growth expectation of 17.4% and has surged 75.3% in the past year. A well-established global footprint, diversified product portfolio and ability to penetrate different markets are key growth drivers for InterDigital. The addition of technologies related to sensors, user interface and video to its already strong portfolio of wireless technology solutions is likely to drive considerable value, given the massive size of the market it offers licensing technologies to.
Ubiquiti Inc. (UI - Free Report) , carrying a Zacks Rank #2 at present, is a key pick in the broader industry. Headquartered in New York, it offers a comprehensive portfolio of networking products and solutions for service providers and enterprises at disruptive prices.
It boasts a proprietary network communication platform that is well-equipped to meet end-market customer needs. In addition, it is committed to reducing operational costs by using a self-sustaining mechanism for rapid product support and dissemination of information by leveraging the strength of the Ubiquiti Community.
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Viasat (VSAT) Reports Y/Y Wider Q3 Loss Despite Solid Revenues
Viasat Inc. (VSAT - Free Report) reported lackluster third-quarter fiscal 2024 results with a wider-than-expected loss. While the bottom line missed the Zacks Consensus Estimate, the top line beat the same.
Viasat reported higher revenues year over year, backed by healthy demand trends. 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 $124.4 million or a loss of 99 cents 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 owing to the debt incurred for the Inmarsat acquisition adversely impacted the bottom line during the quarter. The bottom line was wider than the Zacks Consensus Estimate of a loss of 14 cents.
Viasat Inc. Price, Consensus and EPS Surprise
Viasat Inc. price-consensus-eps-surprise-chart | Viasat Inc. Quote
Excluding non-recurring items, Viasat recorded a non-GAAP net income of $29.7 million or 24 cents per share against a net loss of $10.9 million or a loss of 14 cents per share in the prior-year period.
Revenues
Revenues surged 58% to $1.1 billion, driven by solid growth in product and service revenues. The top line surpassed the consensus estimate by 9 million.
Product revenues were $303.1 million, up from $249.3 million in the year-ago quarter. Net sales from Service more than doubled to $825.5 million from $402.1 million in the year-ago quarter.
Revenues from Satellite Services improved to $581.4 million from $302.4 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 $288.5 million from $90.4 million, backed by higher commercial air IFC service activations and a full quarter contribution from Inmarsat.
Revenues from Commercial Networks remained relatively flat at $166.4 million as lower revenues from commercial air IFC terminal deliveries were offset by incremental contribution from Inmarsat. Adjusted EBITDA came in at a loss of $35.1 million compared with a loss of $19.2 million a year ago.
The Government Systems segment registered revenues of $380.8 million from continuing operations, up 109% year over year, driven by solid Inmarsat contribution. The segment’s adjusted EBITDA from continuing operations was $129.7 million, up from $50.9 million, backed by the contribution from Inmarsat and solid product revenues.
Other Details
In the December quarter, the company reported an operating loss of $156.5 million compared with an operating loss of $39.5 million in the prior-year quarter. Adjusted EBITDA was $383.1 million, up from $138.9 million in the year-ago quarter.
Cash Flow & Liquidity
During the third quarter of fiscal 2024, Viasat generated an operating cash flow of $134 million compared with $89 million in the prior-year period. As of Dec 31, 2023, the company has $1.6 billion in cash and cash equivalents, with a net debt of $5.9 billion.
Outlook
For fiscal 2024, management expects revenues to increase by high single-digit year over year in the range of $4.1-$4.25 billion. Adjusted EBITDA from continuing operations is predicted to increase by 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.
Zacks Rank & Key Picks
Viasat carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arista Networks, Inc. (ANET - Free Report) , sporting a Zacks Rank #1, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 19.8% and delivered an earnings surprise of 12%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Headquartered in Wilmington, DE, InterDigital, Inc. (IDCC - Free Report) is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks.
This Zacks Rank #2 (Buy) stock has a long-term earnings growth expectation of 17.4% and has surged 75.3% in the past year. A well-established global footprint, diversified product portfolio and ability to penetrate different markets are key growth drivers for InterDigital. The addition of technologies related to sensors, user interface and video to its already strong portfolio of wireless technology solutions is likely to drive considerable value, given the massive size of the market it offers licensing technologies to.
Ubiquiti Inc. (UI - Free Report) , carrying a Zacks Rank #2 at present, is a key pick in the broader industry. Headquartered in New York, it offers a comprehensive portfolio of networking products and solutions for service providers and enterprises at disruptive prices.
It boasts a proprietary network communication platform that is well-equipped to meet end-market customer needs. In addition, it is committed to reducing operational costs by using a self-sustaining mechanism for rapid product support and dissemination of information by leveraging the strength of the Ubiquiti Community.