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Viasat Reports Wider-Than-Expected Q3 Loss on Flat Revenues
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Viasat, Inc. (VSAT - Free Report) reported lackluster third-quarter fiscal 2025 results, with both the adjusted earnings and revenues missing the Zacks Consensus Estimate.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The company’s top line remained relatively flat year over year, reflecting declines in fixed broadband and product revenue within Communication Services. This was offset by strong growth in Aviation and Information Security, Space and Mission systems and tactical networking in the Defense and Advanced Technologies segment.
Net Income
Viasat incurred a net loss of $158.4 million or a loss of $1.23 per share compared with a net loss of $124.4 million or a loss of 99 cents per share in the prior-year quarter. Higher debt impairment charges negatively impacted the bottom line during the quarter. The bottom line was wider than the Zacks Consensus Estimate of a loss of 91 cents.
Excluding non-recurring items, Viasat recorded a non-GAAP net income of $14.7 million or 11 cents per share compared with $29.7 million or 24 cents per share in the prior-year period.
Revenues remained almost flat at $1.12 billion, missing the consensus estimate by 2 million.
Product revenues were $314.4 million, up from $303.1 million in the year-ago quarter. Net sales from Service decreased to $809.4 million from $825.5 million a year ago.
Revenues from the Communication Services segment were $820.3 million, down 6% from $874.9 million in the year-ago quarter, owing to a decline in the company’s U.S. fixed broadband services and products, partially offset by strong growth in aviation and government SATCOM. The segment’s adjusted EBITDA declined to $329.6 million from $333.1 million.
Revenues from the Defense and Advanced Technologies (DAT) segment were $303.4 million, up 20% year over year. The uptick was primarily driven by solid traction across information security and cyber defense, space and mission systems and tactical networking products. Adjusted EBITDA improved to $63.6 million from $50 million in the year-ago quarter, backed by the strong revenue growth across the segment.
Other Details
In the December quarter, the company reported an operating income of $21.2 million against an operating loss of $43.9 million in the prior-year quarter. Adjusted EBITDA was $393.3 million, up from $383.1 million in the year-ago quarter. The 3% growth was primarily driven by growth in the DAT segment.
Cash Flow & Liquidity
During the third quarter of fiscal 2025, Viasat generated an operating cash flow of $219 million compared with $134 million in the prior-year period. The improvement was primarily driven by decreased working capital and lower cash taxes. As of Dec. 31, 2024, the company has $1.56 billion in cash and cash equivalents, with a net debt of $5.66 billion. Capital expenditures declined 40% year over year to $253 million, primarily due to lower satellite expenditures and ground infrastructure costs.
Outlook
For fiscal 2025, the company expects revenues to be flat to slightly up year over year. Adjusted EBITDA from continuing operations is predicted to increase by mid-single digit. Capital expenditures are predicted to decline approximately $1.1 billion.
For fiscal 2026, management expects a year-over-year revenue growth and modest adjusted EBITDA growth.
Zillow Group, Inc. (ZG - Free Report) is scheduled to release fourth-quarter earnings on Feb. 11. The Zacks Consensus Estimate for earnings is pegged at 34 cents per share, indicating growth of 50% from the year-ago figure.
Keysight Technologies, Inc. (KEYS - Free Report) is scheduled to release first-quarter fiscal 2025 earnings on Feb. 25. The Zacks Consensus Estimate for earnings is pegged at $1.69 per share, indicating growth of 3.68% from the year-ago figure.
Light and Wonder (LNW - Free Report) is scheduled to release fourth-quarter earnings on Feb. 25. The Zacks Consensus Estimate for earnings is pegged at $1.08 per share, indicating growth of 47.95% from the year-ago figure.
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Viasat Reports Wider-Than-Expected Q3 Loss on Flat Revenues
Viasat, Inc. (VSAT - Free Report) reported lackluster third-quarter fiscal 2025 results, with both the adjusted earnings and revenues missing the Zacks Consensus Estimate.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The company’s top line remained relatively flat year over year, reflecting declines in fixed broadband and product revenue within Communication Services. This was offset by strong growth in Aviation and Information Security, Space and Mission systems and tactical networking in the Defense and Advanced Technologies segment.
Net Income
Viasat incurred a net loss of $158.4 million or a loss of $1.23 per share compared with a net loss of $124.4 million or a loss of 99 cents per share in the prior-year quarter. Higher debt impairment charges negatively impacted the bottom line during the quarter. The bottom line was wider than the Zacks Consensus Estimate of a loss of 91 cents.
Excluding non-recurring items, Viasat recorded a non-GAAP net income of $14.7 million or 11 cents per share compared with $29.7 million or 24 cents per share in the prior-year period.
Viasat Inc. Price, Consensus and EPS Surprise
Viasat Inc. price-consensus-eps-surprise-chart | Viasat Inc. Quote
Revenues
Revenues remained almost flat at $1.12 billion, missing the consensus estimate by 2 million.
Product revenues were $314.4 million, up from $303.1 million in the year-ago quarter. Net sales from Service decreased to $809.4 million from $825.5 million a year ago.
Revenues from the Communication Services segment were $820.3 million, down 6% from $874.9 million in the year-ago quarter, owing to a decline in the company’s U.S. fixed broadband services and products, partially offset by strong growth in aviation and government SATCOM. The segment’s adjusted EBITDA declined to $329.6 million from $333.1 million.
Revenues from the Defense and Advanced Technologies (DAT) segment were $303.4 million, up 20% year over year. The uptick was primarily driven by solid traction across information security and cyber defense, space and mission systems and tactical networking products. Adjusted EBITDA improved to $63.6 million from $50 million in the year-ago quarter, backed by the strong revenue growth across the segment.
Other Details
In the December quarter, the company reported an operating income of $21.2 million against an operating loss of $43.9 million in the prior-year quarter. Adjusted EBITDA was $393.3 million, up from $383.1 million in the year-ago quarter. The 3% growth was primarily driven by growth in the DAT segment.
Cash Flow & Liquidity
During the third quarter of fiscal 2025, Viasat generated an operating cash flow of $219 million compared with $134 million in the prior-year period. The improvement was primarily driven by decreased working capital and lower cash taxes. As of Dec. 31, 2024, the company has $1.56 billion in cash and cash equivalents, with a net debt of $5.66 billion. Capital expenditures declined 40% year over year to $253 million, primarily due to lower satellite expenditures and ground infrastructure costs.
Outlook
For fiscal 2025, the company expects revenues to be flat to slightly up year over year. Adjusted EBITDA from continuing operations is predicted to increase by mid-single digit. Capital expenditures are predicted to decline approximately $1.1 billion.
For fiscal 2026, management expects a year-over-year revenue growth and modest adjusted EBITDA growth.
VSAT’s Zacks Rank
Viasat currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Zillow Group, Inc. (ZG - Free Report) is scheduled to release fourth-quarter earnings on Feb. 11. The Zacks Consensus Estimate for earnings is pegged at 34 cents per share, indicating growth of 50% from the year-ago figure.
Keysight Technologies, Inc. (KEYS - Free Report) is scheduled to release first-quarter fiscal 2025 earnings on Feb. 25. The Zacks Consensus Estimate for earnings is pegged at $1.69 per share, indicating growth of 3.68% from the year-ago figure.
Light and Wonder (LNW - Free Report) is scheduled to release fourth-quarter earnings on Feb. 25. The Zacks Consensus Estimate for earnings is pegged at $1.08 per share, indicating growth of 47.95% from the year-ago figure.