Viasat (VSAT) Reports Q1 Loss Despite Higher Revenues
Viasat, Inc. VSAT reported soft first-quarter fiscal 2024 results, with both the bottom line and top line missing the respective Zacks Consensus Estimate. The company reported higher revenues year over year, backed by healthy demand trends in all verticals. Growth in commercial air IFC services, rising shipments and installments of mobility terminals, and growing demand for information assurance products supported the top line during the quarter. However, the decline in fixed broadband subscribers partially reversed this trend.
Net Income
The company reported a net loss of $77 million or a loss of 83 cents per share compared with a net loss of $21.6 million or a loss of 29 cents per share in the prior-year quarter. High interest expenses and non-recurring acquisition-related costs impacted the bottom line during the quarter. From continuing operations, Viasat incurred a net loss of $76.9 million compared with a net loss of $38.6 million in the prior-year period. The bottom line missed the Zacks Consensus Estimate of an earnings of 22 cents.
Viasat Inc. Price, Consensus and EPS Surprise
Viasat Inc. price-consensus-eps-surprise-chart | Viasat Inc. Quote
Revenues
Revenues were up 36% to $779.8 million driven by growth in product and service revenues. However, the top line missed the Zacks Consensus Estimate of $1,064 million.
Product revenues were $236.4 million, up from $172.5 million in the year-ago quarter. Net sales from Service rose to $543.4 million from $402.6 million in the year-ago quarter.
Revenues from Satellite Services improved to $398 million from $312 million in the year-ago quarter. The 28% year-over-year growth was driven by healthy demand for commercial air IFC services. The Inmarsat buyout strengthened the company’s mobility and enterprise service businesses during the quarter. The segment’s adjusted EBITDA recorded a sharp increase of 51% year over year, backed by higher commercial air IFC service activations, the contribution from Inmarsat and greater U.S. fixed broadband ARPU.
Commercial network contributed $149 million to revenues, up 32% year over year. Solid demand for Antenna system products and positive momentum of IFC orders supported the gain from this vertical. Adjusted EBITDA came in at a loss of $28 million during the quarter.
The Government segment registered revenues of $233 million from continuing operations, up 55% year over year. Higher information assurance product deliveries supported the top line. The company signed a three-and-a-half-year extension with the DoD (Department of Defense) on an existing contract. During the quarter, it also secured a deal from Australia and New Zealand for Southern Positioning Augmentation Network satellite service. The segment’s adjusted EBITDA from continuing operations was $58 million, up from $24 million, backed by the contribution from Inmarsat and solid product revenues.
Other Details
In the June quarter, the company reported an operating loss of $41.5 million compared with an operating loss of $27.1 million in the prior-year quarter. Adjusted EBITDA was reported at $183.3 million, up from $131.8 million in the year-ago quarter.
Cash Flow & Liquidity
During the first quarter of fiscal 2024, Viasat generated $104 million in operating cash flow compared with $40 million in the prior-year period. As of Jun 30, 2023, the company has $1,958.5 million in cash and cash equivalents, with $3,607.8 other long-term debt.
Outlook
For fiscal 2024, management expects revenues to increase high single digit year over year. Adjusted EBITDA from continuing operations is expected to increase between high single-digit to low double-digit. Viasat anticipates strong growth in Government Systems with relatively modest year-over-year growth in Satellite Services and Commercial Network.
Zacks Rank & Stocks to Consider
Viasat currently has a Zacks Rank #3 (Hold).
Motorola Solutions, Inc MSI, carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 5.62%, on average, in the trailing four quarters. In the last reported quarter, it pulled off an earnings surprise of 5.58%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It provides services and solutions to government segments and public safety programs, along with large enterprises and wireless infrastructure service providers. It develops and services both analog and digital two-way radio, voice and data communications products and systems for private networks, wireless broadband systems and end-to-end enterprise mobility solutions to a wide range of enterprise markets.
Workday Inc. WDAY, sporting a Zacks Rank #1, delivered an earnings surprise of 13.05%, on average, in the trailing four quarters. In the last reported quarter, it pulled off an earnings surprise of 18.02%.
Workday is a 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 that makes it easier for organizations to provide analytical insights and decision support.
Meta Platforms Inc. META, carrying a Zacks Rank #2, delivered an earnings surprise of 18.99%, on average, in the trailing four quarters. Meta is the world’s largest social media platform. The company’s portfolio offering evolved from a single Facebook app to multiple apps like the photo and video-sharing app, Instagram, and the WhatsApp messaging app, owing to acquisitions.
Meta is considered to have pioneered the concept of social networking, which is why it enjoys a first-mover advantage in this market. As developed regions mature, Meta undertakes measures to drive penetration in emerging markets of South East Asia, Latin America and Africa.
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