Viasat (VSAT) 17 May 232023 Q4 Earnings call transcript

Hello, and welcome to Viasat's Q4 Fiscal Year 2023 Earnings Conference Call.

Your host for today's call is Mark Dankberg, Chairman and CEO.

You may proceed, Mr. Dankberg.

Thanks. everybody. afternoon, Good us joining call today. Thanks for for our after released on afternoon, this shareholder our shortly our letter market and close We website. it's still available We'll referring to this be on call.

our the Duffy, Lopez Shawn Chief from and well. Paul Financial our as are So Froelich our Blair, our call Robert Investor Counsel; me Kevin Harkerider; Relations on Guru joining Peter Graben, General new Officer; from President, COO; Development; today and Corporate

before harbor So start, guidance. provide Robert safe our we will

Thanks, Mark.

will contain that discussion statements. This actual As to reminder this you forward-looking is a factors results know, cause could differ materially.

concerning is are XX-K these and Additional from from our information Form most Copies XX-Q. or factors available SEC our filings, website. including Form on the in reports recent SEC contained our

Mark. you, Back to

Thanks.

Okay.

try business Graben. Guru questions. up I'll to I'd recap also and start, it and highlights then to to introduce new the like for we'll open So briefly our financial And President, to

greatly the of can our has testing, bandwidth But us, it we up for final the to in biggest service deployments. and network. complete coverage Viasat that that its our it's its and orbit in at So location, can arrived Americas beginning is satellite we and our all stunned, highlight ViaSat-X around satellite mid-summer, start services to that's going aiming grow to provide and We're bringing be expand businesses. orbital

almost calendar just coverage. then dedication. this got whole launching the Pacific I for this year to want with Middle We've for few to and global commitment again, by Asia team, Africa been Europe, an enormous and our and satellite one, satellite, undertaking It's thank everybody more later complete first their East, go a steps

combination dollar satellite believe in coverage, and with Boeing. capital global the unique Pacific mobile especially of demand per ability test [indiscernible]. useful the the the to and final invested to valuable Asia to integration virtually now markets. amount will prove be the global We bandwidth is of the that are bandwidth places and move greatest in dynamically satellites the to with These The

and this transaction We We a our two better the the on lower more Inmarsat and We and U.K. can now to adjusted have go. transaction have will approval provide XX to months services reached Both basis in to month. cash flow received believe global free in Inmarsat closing agreement. both to anticipate only Viasat share cost. customers be accretive mobile EBITDA the the help companies continued at grow we our since per businesses and steps

to website. and we more their most think and results, I you also we their continue that direct-to-device Internet evolving reported especially And on markets. of just Things recent expect can and together, well, business as their growth Inmarsat find rapidly bring L-band to can them the innovations important

for our XX standalone basis well business in basis Early combined our close the $X.X on we quarter, liquidity a fourth our Link reduced sale as significantly leverage as with billion. our TDL That and increased Inmarsat. of did on a prospectively

performance quickly in reduces cause, operating in that period the also TDL prior we rate, We presented the the rate rightsize the about run costs financial $XX to did company we annual which our new Post letter by million. TDL Link of total it. terms our that in XX owned of XX in including continuing excludes business operations Link operations periods results and run

for at billion, TDL quarters prior $X.X EBITDA $XXX and continuing new year on of in XXXX records $X.X operations achieved was and billion respectively. operations Continuing Adjusted from EBITDA total three operations the was go-forward We fiscal for and the with provides QX sales, results results to for context year. basis. $XXX adjusted million from awards continuing a million, revenue

million, EBITDA momentum 'XX. from grew XX% which million operations basis $XXX good XX% year-over-year $XXX and was continuing QX going revenue up were adjusted provide was to a continuing into on from and fiscal results continued year-over-year. operations QX

In year-over-year fleet that significant in the demand a partner, that expanded growth had of Systems, aircraft. Airways We accruing quarter. drove in been certification Wi-Fi to some Government airline X,XXX Etihad and pent-up initiative. connectivity commercial products, Airlines revenue service in-flight cleared as added our key products and We new cryptographic free the we grew our Delta

per new market of continued higher and ViaSat-X and We testing fixed plans, more significant analysis speeds offering of broadband era a bandwidth subscriber.

strong into investing deploy operator. range leading We've capital-intensive very global models, a technology to satellite from and been of working years a develop in transform and several player phase business for services and a

flow includes generate see can but to from people, we only of and very from That free the those own evidence cash returns investments. assets tangible areas, complementary our pieces resources real not the the Inmarsat. opportunity Now and coming together business

now elements, all And his President, operating he's us introduce and to for we to leadership Given calls. really done for I'd Vice briefly like that member scale. as of and in who end, need we our to Gurugram, those all our new a execute joins team, Baldridge, Chairman, thank Rick to us want

With support Internet AOL, division included and global is partnerships. Verizon was brands. platforms Guru other previous and to special will a CEO on Yahoo, Post, media He in with at large the operations, leader and very of Chairman. board will Techcrunch technology remain our that Rick operating creating integrating as experience accomplished Guru's Huffington scaled powerful Vice projects here, continue Media position as former media

please. yourself, introduce Guru, So

us Thank on of you thanks first today to you, joining Mark. all earnings And my call.

-- all of thrilled a as success so you to joined know company rich I'll have Viasat history with I'm innovation. and provide

team. has as advantage we over foundational we delivered are and Our healthy poised time exciting incredible which for an continue growth as technology a future

global connectivity my now yet. embarking dedicated BXB fostering am and I carrier telecommunications, on and my products consumer tech including key mission biggest Having interactivity across to

know, point as with satellite. you Americas joined the at inflection I've an of ViaSat-X Viasat our launch Moreover,

with than ViaSat-X the globally. and billion expanding times and The move our three flexibility more expected first network the our into increase to step to to scale all coverage the in service locations of constellations than placing more of while satellite X capacity bandwidth is assets of combined eight ViaSat-X high-demand

it's delivering want they also to environmentally sustainability all important our and me a manner that to need our technology space in priority services and grow customers where here. the sustainable is network globally We through and inclusive a And intend innovation. are,

of be will for the and our global our growth mobility products acquisition and as accelerate great our that Inmarsat will expansion all and for our Finally, well-suited in stakeholders it closing Areas are solutions. government.

is our our free legacy Inmarsat to achieve double as us compared also cash it to and the will about sustainability. our we flow expected help And of in expand growth also the for collectively. per growth and the IoT, Internet direct-to-device cycles that to inclusive I'm enormously for space goals number deal has CapEx customers potential wane, and share Viasat. achieve can standalone personally as excited BXB L-Band, is individual the potential of very global Things, relationships

growth And a earlier, at said with record team quarter want their Inmarsat entire all as I businesses. to do congratulate Mark the for team of and the Tony across Rajeev,

hard world. financial customers, extraordinary. shareholders. brighter Now build products, coupled here this Rick, to Viasat, drive impact for that five and Robert to performance teamwork, on all maximizing the are here with And eager we I goal And our our is stakeholders. our future entire just that, Shawn, while our am the a can because collaborate always humbled alongside work And with having be and the innovation business I team. endeavor this partners, been throughout areas relentless execution, and on connections of And my incredible in I technology culture, making society, customers and on focused and am employment and at rewarding humility believe I'll and excellent key to for with impactful to team Mark, do opportunities career,

Mark. And I'll to that, with hand back you, over it

Guru. Thanks, Good.

and to Viasat. thanks welcome So

So with it up for that, questions. open

[Operator Raymond Instructions] Please of from first Ric go Prentiss And James. comes the ahead. your question line with

Thanks. afternoon, Good everybody.

Ric. Hi,

to Inmarsat Can as the you what's debt closer update transaction? closer for to being is the with as get able that close terms? you the package? Are see What to deal. happening far us Good line any to Hi. there are the the getting finish as changes

Hi, This Shawn. Ric. is

I -- finish go as line looking moving as lot are I really things here. -- we of So head a there's think lot mean, there's parts. the good to still the to we a

look that way intentions the at that economics. those is, signed on the back we that and are our the the And timing. have we pulled package it think reflects I the execute elements market transaction deal that at we secured when of

and way it -- best shape up. I think to that's the So

Okay. obviously the what was Can that great. be you different just a package that us remind the in terms us were in moment would just remind time what terms But were.

we we But -- aren't public more they today. think Yes, than are favorable obviously those Ric. are I didn't

Sure.

of The got have integration that said Although Help -- a a I items. welcome, us you mentioned with how remember of line, should times it. technology I following first about Guru, the understand, can't first. you've lot couple along

like? wat's help us Inmarsat, to of As top And you be at are there, segment what this any look timeline priorities could be changes? reporting going Viasat and there integration understand your the

markets top one we those markets, are business are main the our participate. broadband we've as maritime global in One - in basis, are the to -- said, mobile jets is ones. grow intending the both really of of a there priorities in-flight, we're we open are on which and So are. sort in markets really which are, government, And commercial

sales. we you That companies, -- is are main to both the go-to-market going of the requires do one best Viasat that's gives experience. technical lower -- support, has our really And of get I direct tended of margins, to if customer the kind more at What companies. to more the a primarily between us think aiming be it's to take is differences control priorities look of little delivers

want They On global each an the are service there we primarily good. combine. that wholesale. network. think very techniques And to other business be Inmarsat's of have attributes are and delivery models we tend hand, to company's margins very, They existing

that's important points. And our so one of most

clear, on have relationships has. we place to the we that be distribution -- great value Inmarsat Just

connectivity, their our some to partners. ways able we augment than we other in range by expect services distribution to do. greater But a of partners some -- which deliver of be to in may we We provide of services cases, distribution continue the

kind of list. is the of capture issue best that on both our So high

two is want attractions the Another one the the that Inmarsat of to that both integrating we cases is that networks. we of combination really real and one and networks, Viasat operate emphasize

synergy to over make networks. we time, -- And being important the some able of by each platforms the really across support work so opportunities there's that that

network, we've that and the be work get with instantly will we services us we'll I to But Inmarsat to done think of satellites, much, our -- global on next be basis. in successfully the that global the obviously, so some that and much the satellites. ViaSat-X a allow the before greater, even two U.S. will with ViaSat-X coverage So depth extend

at here priorities. are of L-band L-band two developing the is market the lot then I'd ultimately, the is Viasat the apply So we that markets. the in really of things down see we top And air if can next the into can done using some those of same what in -- excited Because drive are one we've say a technologies probably those those to been some are offer to that same prices. really of that do increase the increase markets opportunities bandwidth some speed, and about the Ka-band technologies, We're there. the of the time we which amount opportunity we've

kind our are those three say of I'd priorities. top So

we if plan I and would about And very deal you thanks can good the are companies, when individual for to things including is, the the lot on results from of I integration, we you comment Inmarsat of we as if a latest performance Ric, place the as Mark in closed. top that last earlier. have of don't add. beat on it, there miss say are And sure for when focus and quarter. Mark want gets What And think you working things, those at saw make said, well, look a

plan So to good these to to, that sure a start and as place make maintain Mark we executing and we at we and incremental things, least then have on talked it. want thinking

need Is device this final opportunity, one on for spectrum? there the you take how place device? have the off as directed category? business do well opportunity And third this the just And to what wrap S-band besides in an that to up And me in L-band. directed for

people direct on think, satellite networks, networks. really to be what I are intended direct-to-device, when is on for referring directly to the by that also that a but are can about device to primarily opportunity, times operate devices work driven lot -- we terrestrial our the talk So going of

those And terrestrial especially there that easy there that are, includes S-band. those it. What approaches into to frequencies for so are -- opportunities And the and different L and integrate big are devices. to both

terrestrial spectrum do that, the big and One things to geographic for get biggest that, poor to locations, of terrestrial address that us through operate of many that shadowing, the the networks will is areas MSS a those a dedicated allow using within of able but think And that just of with are on. of we territory device things. to being reasons, is variety That's cell appear these be of geographic all we MSS of with think to the of that locations devices that those frequencies placements licensed tractions a towers, service spectrum. will poor kinds one advantage spectrum

of for things those be growth of the to in rate capabilities that One these going challenge a that's is devices. are the new

can get market. faster serving for than the any So scale than scale those those devices market market faster can't the devices to

having businesses also attractive without same is attractive the terrestrial a provide and -- be And will thing, see better But not ramp-up things make we we devices we about it's for that think it's objective services a than available market services. our to we our market growth our the period. objectives can We having us the evolve one MSS the really existing us. can as That's big can much but both that on is to is. the techniques for of that think going interesting an what the a existing L-band that of and devices. will attractive expand other Inmarsat hand, really that one That's just

it. Appreciate Great.

stay well. You

Thanks Ric.

comes go Simon of Next question Morgan Stanley. from Your line Flannery Please with ahead. the

Could again. about talk for IFC to very you much. minute. a connect you Great, evening Guru with we and good thank Good

that of continuing aircraft are in seeing you solution First, color constellations. those the to on like win outlook backlog, there, additional they to so and geo these opening terms something the the exploring or adding of really it they the been Is any aircraft consider and you've the for that some are in of what's volume sounds terms what on competitive LEO of landscape, prefer the now? airlines growing

Okay.

business our been implied one, So good. really really, has

got I we've think a of claims. X,XXX over backlog

rate, at though we've it's a high even an we've So been been great. rate, at installing even higher winning

which things think find [indiscernible] way I megabits reason I your the a the simplest that been think are like speed airplane that's and of is capabilities you want successful airlines, is highlighting put we've to three, to we've that been the -- kind four the years it on around airline if impressing show then you and if in-flight ago, connectivity -- you good. megabits and wanted XXX an them with XXX or an the of

hard airlines at the really come is serving really what airports demands airline think have airports, I to only appreciate as have not busiest traffic be peak demand port of but that what's those that the the is really cities It's think are other I issue. that well. challenging especially traffic. most are maritime to traffic going There geographic concentration the with is on

the the airlines And is good from connectivity, passengers our stored the their only hearing their but closely not intertwined with and live we're what entertainment entertainment. they both offers is that connectivity options solution a from perspective, want pretty

course, to services passengers LEO, affordably. that whatever of yes, them want their deliver GEO open to the allow And will they're

think open to I that's going be they're what to.

make to that. That's sure going help And this transaction we're that is driving competitive going think what's we're So us. do Inmarsat to I us really there.

sorry, to Simon, great reconnect.

said, products would great what The win. Mark I other just point in the end, say

experience why well. the superior backlog winning have think how is the we've been and we much and as a I what product that's customers

that and core So technology. to our speaks product

up that the some it consumer We've on against households? How product strides then you your TAM What commercialize obviously of And there. X% seen is? for Starlink years capacity Great. do you've ViaSat-X? as been does stack make the we on broadband, Is several now. constrained think U.S.

Yes. Sure.

the if define a where satellite terrestrial That's deliver -- can for what market best the homes I'd if it's -- satellite is, we broadly, be option. broadband define think and I -- you get from you to industry can addressable service than that a how those lead say, they it. can we

to is don't deliver can say can to competitive. down five years streaming to X XXX to you the million is by million the rise. go that's So XX is What may XX, million build-out infrastructure per hurdle of end today meet we're that has But roughly probably to generally fruition. what homes. that bandwidth megabits continued and sufficient deliver needs, comes XX you that for the people X of to going to anticipating that's as allow to it million contemplated to the with XX, their second, homes be doing if think And decade, currently

we are and And broadband. for market. a that's that are that, version growth moderate heading. objectives I'd So of modest that reasonably then think, where the think of reasonable, to conservative is where we reasonably market portion market, we capture a I think say, kind that both share Yes, really that of our

Great. All right, thanks.

Thanks, Simon.

next question comes Please ahead. Crawford Mike of with [Operator Instructions] Your B. from go line Riley. the

you. Thank

to first to need Just past from two Is you that had some the -- that public agreement question extended return you about through it's to was place would renegotiate the was now? of -- to I disclosure close there thought debt. weeks that the in potentially something in May. if end

Shawn. is this Mike,

to at were it again, milestones think close I So parts. still some I we've expected lots really But agree parts. within our had think I moving of way I frames. of is, I said, moving as and lots the there time look we're good But trying

component. was of there So May not an end

The time have frame did it. a to Absolutely. financing

originally the bit far beyond original a stretched it date. So

right a it's time. around is think I So period good that time

approach direct-to-handset technology-neutral connectivity. to that SEC's addition then for systems participate non-geostationary topic. network conversion for Viasat's to in with your in and supplemental in The systems enables change And space you. single a Thank future Okay. argument NPRM comments, GSO

to FCC handicap proposed, here? the GSO get that that And rules in care when going order to by is likelihood we final you the the so the time way include aren't report a do

devices fine. One be customers So that service geosynchronous to points be and capable those availability the U.S. both price networks, they're of is, to that if demonstrate right? services thing the completely And globally level, that with to the on used the restriction closing Okay. bring and there's both and can going networks work want, those then links to underway market. already are the with no there's in geosynchronous

and markets we and think going we direct-to-device it being But regulatory a this complicated the that narrow of for as well up as environment. geosynchronous little broad said bit markets is is a is a both is of kind think, satellites. this think of What solution and non-geosynchronous that we've combination to we end

be not demand, One to concentration issues is in use conserve oceans great there direct-to-device the in nearly will because in this centers, biggest of as that an licensed of in demand environment populated market, is populated can of going over have be those the all the these the or where in dedicated market as areas, amount geographic will the especially it direct-to-device black areas be spectrum of kind spots. you especially population and those ticking

but So area, don't I going it's any to orbit. to dynamic that reason we any it's see a think particular exclusive be

Thank that manufacturer. desire Okay. merchant And to the And with used capability a for being think retain a online Link-XX. the -- Link-XX led question satellite you Viasat were and last consider our site separate one you, just then the I is, building previously, but the Mark. sales satellite test me that

Okay.

space go interesting Link-XX customers. One TDL other We around around the did are contracts with other there's that still had than radio things. working Link-XX terrific LX tactical for L-band in with relationships But also that two sale. and have is to So in programs Link-XX link the has. we

it the continuing that. are of some unique market of direct-to-device of really is work Link-XX outside defense are open we And that does that's to L-band that attractions opportunities on area. So one

are still we working So those. on

tell just where ancillary been this? waveform all into And us to that has just

It certainly could. That's possible.

Okay, thank you.

Thanks, Mike.

questions turn Mark at And I will call to no back there further are the Dankberg. time. this

for to forward everybody, we'll us quarter. this joining much, again And look next very thanks time. speaking Well, you with Okay.

call. conference for Thank today's concludes This you joining.

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