Viasat Posts Record Backlog, Positive Free Cash Flow in Fiscal 2026; Execs Detail Satellite Expansion and Defense Growth

Viasat (NASDAQ:VSAT) closed fiscal 2026 with a record backlog, modest revenue growth, and positive free cash flow, as executives detailed plans to drive expansion through newly deployed satellite capacity, defense technology programs, and a planned shared space infrastructure venture.

On the company’s fourth-quarter earnings call, Chairman and CEO Mark Dankberg said fiscal 2026 results were “largely consistent” with expectations, despite headwinds from a U.S. government shutdown in the second half of the year. He highlighted record new contract awards and backlog, record revenue and adjusted EBITDA, and “nearly $600 million in free cash flow,” including a one-time lump-sum payment from Ligado.

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Chief Financial Officer Gary Chase reported fiscal 2026 revenue of $4.6 billion, a GAAP net loss of $34 million, and adjusted EBITDA of $1.55 billion. Operating cash flow reached $1.6 billion, or $1.2 billion excluding the Ligado payment, while capital expenditures came in just under $1 billion. Free cash flow totaled $597 million, or $177 million excluding the Ligado payment.

“From a cash flow point of view, our teams delivered in a big way,” Chase said, noting that Viasat has generated positive free cash flow in each of the past five quarters.

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For the fiscal fourth quarter, awards were roughly $1.3 billion, up 9% from a year earlier, driven by growth in communication services for maritime, government SATCOM, and aviation. Backlog hit approximately $4.1 billion, a 15% gain, with double-digit growth in both communication services and the defense and advanced technologies (DAT) segment.

Quarterly revenue came in at $1.2 billion, up about 2%, as 12% growth in DAT was partially offset by a 2% decline in communication services. Net income swung to $59 million, an improvement of $305 million, which Chase attributed largely to a gain from the sale of Viasat’s equity stake in Navarino, along with lower general and administrative expenses and lower interest costs. Adjusted EBITDA of $370 million slipped 1%, reflecting higher R&D spending and a larger-than-expected impact from the government shutdown.

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Viasat completed the divestiture of its Navarino interest in March, receiving gross proceeds of $203 million. Net debt to trailing adjusted EBITDA improved to 3.1 times, and the company paid down $743 million of debt during the year while boosting available cash.

Within communication services, quarterly awards rose 13% to $877 million, but revenue slipped 2% to $810 million. Aviation revenue increased 11%, with about 4,450 commercial aircraft in service at quarter-end, up 10% year over year, and higher average revenue per aircraft. The commercial aircraft unit backlog stood at 1,000 units.

Government SATCOM revenue grew 5%, supported by demand from U.S. and international government customers. Government awards and backlog each rose 18% year over year. Maritime revenue edged down 1% as vessels in service declined, though demand for NexusWave remained strong — about 1,350 vessels were in service and 1,500 more were in backlog.

Fixed services and other revenue dropped 24% as U.S. fixed broadband subscribers continued to fall. Viasat ended the quarter with 130,000 subscribers and an average revenue per user of $113.

In the DAT segment, quarterly awards increased 2% to $403 million, driven by growth in information security and cyber defense. Revenue jumped 12% to $361 million, including 24% growth in information security and cyber product revenue and 16% growth in space and mission systems. DAT adjusted EBITDA rose 20% to $83 million.

For fiscal 2027, Chase expects mid-single-digit revenue growth, with low-single-digit growth in communication services and mid-teens growth in DAT. Adjusted EBITDA is projected to be flat to slightly up, weighted toward the second half of the year.

Chase noted that EBITDA comparisons will face headwinds from a declining contribution from an intellectual property settlement in advanced technologies and the removal of Navarino EBITDA following the sale. Together, those items represent roughly a two-percentage-point drag versus fiscal 2026.

Viasat anticipates fiscal 2027 capital expenditures of $950 million to $1 billion, including about $850 million in cash CapEx. Free cash flow is expected to be similar to fiscal 2026 levels excluding Ligado, or about $180 million.

Within communication services, aviation revenue should grow as average revenue per aircraft increases, though at a moderating pace. Maritime vessels are expected to decline modestly, but the NexusWave installed base is set to expand significantly. Fixed broadband will likely keep declining until ViaSat-3 enters service, after which stabilization is expected. Government SATCOM is seen returning to growth.

Dankberg said Viasat successfully completed all deployments on ViaSat-3 Flight 2 after the quarter ended, with service entry pending FCC authorization. ViaSat-3 Flight 3 launched successfully on April 29, with radiator and solar array deployments completed and orbit raising underway. Flight 3, which will cover the Asia-Pacific region, is expected to arrive on station in about a month and enter service in August or September.

The fleet expansion is expected to roughly triple bandwidth inventory, supporting growth in aviation, maritime, fixed services, and government SATCOM.

Executives also discussed Equitas, a shared multi-tenant, multi-orbit L- and S-band infrastructure entity being formed with Space42. Dankberg likened Equitas to terrestrial shared tower infrastructure, allowing multiple spectrum holders to use common space and ground infrastructure. Viasat expects to serve as the initial technology prime contractor and targets services in 2029.

In response to analyst questions, Dankberg said Viasat is not contributing spectrum to Equitas but could use its spectrum through the infrastructure. More details are expected after finalizing related agreements.

Dankberg noted that Viasat recently received a follow-on award tied to the Protected Tactical SATCOM-Global (PTSG) program for delivery of a small, low-cost, maneuverable dual-band geosynchronous orbit U.S. government tactical satellite. He described PTSG as an opportunity to expand Viasat’s role in government tactical space systems and services.

Asked about the strategic review of the DAT business and a potential spin-off, Dankberg said the core question is whether DAT is an “appreciating asset.” For now, Viasat sees value in keeping dual-use technology and services together, particularly in areas such as PTSG, while retaining optionality.

Viasat also announced board additions during the call. Dankberg welcomed Shekar Ayyar and Jinhy Yoon, both appointed to the Board Strategic Review Committee. He also noted a cooperation agreement with Carronade Capital Management, saying the agreement is in the best interest of the company and its shareholders.

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.

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The article "Viasat Q4 Earnings Call Highlights" was originally published by MarketBeat.

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