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Viasat's Q2 Loss Wider Than Expected, Revenues Decline Y/Y
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Viasat Inc. (VSAT - Free Report) reported mixed second-quarter fiscal 2025 results, with the top line surpassing the Zacks Consensus Estimate but the bottom line missing the same. The company’s top line marginally declined, owing to weakness in space and mission systems, maritime and advanced technologies and other verticals.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Growth in aviation and government satcom verticals supported the top line during the quarter.
VSAT’s Net Income
The company incurred a net loss of $137.6 million or $1.07 per share compared with a net loss of $767.2 million or $6.16 per share in the year-ago quarter. Lower selling, general and administrative costs led to a narrower loss during the quarter. However, the bottom line was wider than the Zacks Consensus Estimate of a loss of 56 cents.
Excluding non-recurring items, Viasat reported a non-GAAP net loss of $29.4 million or 23 cents per share against a net income of $149.7 million or $1.19 per share in the year-ago period.
Revenues fell 8% to $1.12 billion, owing to declining trends in the Defense and Advanced Technologies segment. However, the top line surpassed the consensus estimate by $15 million.
Product revenues were $323.9 million, down from $401.7 million in the year-ago quarter. Net sales from Service decreased to $798.3 million from $823.7 million a year ago.
Revenues from the Communication Services segment decreased to $826 million from $847 million in the year-ago quarter. The improvement in aviation and government satcom was offset by weakness in maritime and fixed services verticals. The segment’s adjusted EBITDA declined to $318 million from $350 million.
Revenues from Defense and Advanced Technologies were $296 million, down 22% year over year. Demand softness in space and mission systems, advanced technologies and other end markets affected the top line. Solid demand for tactical networking products was a tailwind. Adjusted EBITDA came in at $57 million compared with $137 million a year ago.
VSAT’s Other Details
In the September quarter, the company reported an operating loss of $24.7 million compared with an operating loss of $804.7 million in the prior-year quarter. Adjusted EBITDA was $375 million, down from $486 million in the year-ago quarter.
Cash Flow & Liquidity for Viasat
During the second quarter of fiscal 2025, Viasat generated an operating cash flow of $239 million compared with $219 million in the prior-year period. As of Sept. 30, 2024, the company had $3.53 billion in cash and cash equivalents, with a net debt of $5.53 billion. Capital expenditures declined 37% year over year to $229 million, primarily due to lower satellite expenditures and ground infrastructure costs.
VSAT’s Outlook
For fiscal 2025, management expects total revenues to remain roughly flat or increase slightly year over year. Adjusted EBITDA from continuing operations is projected to grow by mid-single digits.
Revenues from Communication Services are expected to be down by low single digits in fiscal 2025 compared to fiscal 2024. Solid growth in aviation and government satcom services is expected to be offset by weak demand in U.S. fixed broadband and maritime verticals. Defense and Advanced Technologies revenues are expected to increase in the mid-teens, driven by tactical networking products, antenna systems solutions, recurring contributions from certain licensing agreements and strong demand for AI applications.
In the last reported quarter, it delivered an earnings surprise of 8.25%. It provides cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 gigabit Ethernet switches and routers optimized for next-generation data center networks.
Ubiquiti Inc. (UI - Free Report) sports a Zacks Rank of 1 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.
Its excellent global business model, which is flexible and adaptable to evolving market changes, helps it overcome challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its UI’s visibility for future demand and inventory management techniques.
Workday Inc. (WDAY - Free Report) carries a Zacks Rank #2 (Buy) at present. In the last reported quarter, it delivered an earnings surprise of 7.36%.
WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, making it easier for organizations to provide analytical insights and decision support.
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Viasat's Q2 Loss Wider Than Expected, Revenues Decline Y/Y
Viasat Inc. (VSAT - Free Report) reported mixed second-quarter fiscal 2025 results, with the top line surpassing the Zacks Consensus Estimate but the bottom line missing the same. The company’s top line marginally declined, owing to weakness in space and mission systems, maritime and advanced technologies and other verticals.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Growth in aviation and government satcom verticals supported the top line during the quarter.
VSAT’s Net Income
The company incurred a net loss of $137.6 million or $1.07 per share compared with a net loss of $767.2 million or $6.16 per share in the year-ago quarter. Lower selling, general and administrative costs led to a narrower loss during the quarter. However, the bottom line was wider than the Zacks Consensus Estimate of a loss of 56 cents.
Excluding non-recurring items, Viasat reported a non-GAAP net loss of $29.4 million or 23 cents per share against a net income of $149.7 million or $1.19 per share in the year-ago period.
Viasat Inc. Price, Consensus and EPS Surprise
Viasat Inc. price-consensus-eps-surprise-chart | Viasat Inc. Quote
Revenues of Viasat
Revenues fell 8% to $1.12 billion, owing to declining trends in the Defense and Advanced Technologies segment. However, the top line surpassed the consensus estimate by $15 million.
Product revenues were $323.9 million, down from $401.7 million in the year-ago quarter. Net sales from Service decreased to $798.3 million from $823.7 million a year ago.
Revenues from the Communication Services segment decreased to $826 million from $847 million in the year-ago quarter. The improvement in aviation and government satcom was offset by weakness in maritime and fixed services verticals. The segment’s adjusted EBITDA declined to $318 million from $350 million.
Revenues from Defense and Advanced Technologies were $296 million, down 22% year over year. Demand softness in space and mission systems, advanced technologies and other end markets affected the top line. Solid demand for tactical networking products was a tailwind. Adjusted EBITDA came in at $57 million compared with $137 million a year ago.
VSAT’s Other Details
In the September quarter, the company reported an operating loss of $24.7 million compared with an operating loss of $804.7 million in the prior-year quarter. Adjusted EBITDA was $375 million, down from $486 million in the year-ago quarter.
Cash Flow & Liquidity for Viasat
During the second quarter of fiscal 2025, Viasat generated an operating cash flow of $239 million compared with $219 million in the prior-year period. As of Sept. 30, 2024, the company had $3.53 billion in cash and cash equivalents, with a net debt of $5.53 billion. Capital expenditures declined 37% year over year to $229 million, primarily due to lower satellite expenditures and ground infrastructure costs.
VSAT’s Outlook
For fiscal 2025, management expects total revenues to remain roughly flat or increase slightly year over year. Adjusted EBITDA from continuing operations is projected to grow by mid-single digits.
Revenues from Communication Services are expected to be down by low single digits in fiscal 2025 compared to fiscal 2024. Solid growth in aviation and government satcom services is expected to be offset by weak demand in U.S. fixed broadband and maritime verticals. Defense and Advanced Technologies revenues are expected to increase in the mid-teens, driven by tactical networking products, antenna systems solutions, recurring contributions from certain licensing agreements and strong demand for AI applications.
VSAT’s Zacks Rank and Key Picks
Viasat currently carries a Zacks Rank #4 (Sell).
Arista Networks, Inc. (ANET - Free Report) sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last reported quarter, it delivered an earnings surprise of 8.25%. It provides cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 gigabit Ethernet switches and routers optimized for next-generation data center networks.
Ubiquiti Inc. (UI - Free Report) sports a Zacks Rank of 1 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.
Its excellent global business model, which is flexible and adaptable to evolving market changes, helps it overcome challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its UI’s visibility for future demand and inventory management techniques.
Workday Inc. (WDAY - Free Report) carries a Zacks Rank #2 (Buy) at present. In the last reported quarter, it delivered an earnings surprise of 7.36%.
WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, making it easier for organizations to provide analytical insights and decision support.