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Viasat Joins Microsoft Azure to Offer Direct Cloud Connect

Zacks Equity Research

Viasat, Inc. VSAT recently announced plans for a new business Internet service — Direct Cloud Connect. The move will give its customers greater options for accessing enterprise-grade cloud services. The company’s Direct Cloud Connect, which will first offer services to Microsoft Corporation’s MSFT Azure through Azure ExpressRoute, is expected to be launched in the second half of calendar year 2019.

Viasat has been known to provide high-speed and quality satellite broadband solutions to businesses and commercial entities worldwide. The Viasat and Microsoft Azure ExpressRoute collaboration will initially focus on the United States, with an opportunity to expand globally.

Markedly, the Viasat Direct Cloud Connect service will enable its business customers to optimize their network infrastructure and cloud investments. By partnering with Microsoft, Viasat’s customers will gain significantly, from maintaining the network performance of their satellite-based business services to extending their data center capabilities with a scalable cloud-based infrastructure.

As a new Microsoft Azure ExpressRoute partner, Viasat will offer a secure network connection to Azure. Azure ExpressRoute creates a high-speed, low-latency, private link between a customer’s on-premises infrastructure or colocation facility and Azure cloud regions.

This direct connection ensures Viasat's business customers can take advantage of Azure's cloud services including computing, database, analytics, networking and storage. The private connection also ensures that remote facilities remain central to a business’ cloud networking plans.

Azure ExpressRoute will open up a variety of next-gen cloud-based service options for Viasat’s business customers, giving them the ability to rapidly transfer business-critical cloud data and take advantage of the intelligence of Microsoft’s cloud services over a reliable direct network connection.

In the last earnings report, the company’s total revenues increased 22.4% year over year to $537 million. The rise was driven by above 20% growth in both satellite services and government systems segment, which more than offset lower Phonetic terminal deliveries in commercial networks segment. While product revenues totaled $263.6 million, up 20.9% year over year, service revenues grew 23.9% to $273.4 million.

Courtesy of compelling growth outlook for products and services with robust new contracts and delivery order agreements, shares of Viasat have added 34.7% compared with the industry’s growth of 16.3% in the year-to-date period. The company beat earnings estimates in each of the trailing four quarters, with an average surprise of 230.6%.




Zacks Rank & Other Stocks to Consider

Viasat currently carries a Zacks Rank #2 (Buy). A couple of other top-ranked stocks in the industry are Ubiquiti Inc. UI and Nokia Corp. NOK, both carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ubiquiti has long-term earnings growth expectation of 9%.

Nokia surpassed earnings estimates thrice in the trailing four quarters, the average positive surprise being 89.3%.

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