Viasat Revises 2023 Financial Target as ViaSat-3 Launch Pushed to 2023
Viasat’s first ViaSat-3 satellite launch has slipped to 2023, and the operator adjusted its 2023 fiscal outlook due to the delay. The company announced this week in its financial results that the satellite is now expected to launch in the first quarter of calendar year 2023, “with a target of earlier in that period.”
The ViaSat-3 Americas satellite has been delayed numerous times, and was most recently expected to launch by the end of this year.
The company said the satellite has been fully integrated and completed launch environmental testing, as well as ground testing of deployable subsystems. The satellite is expected to be ready for shipment to the launch site in December. “The specific date will be driven by the timing of high priority U.S. national missions operating out of the same launch pad,” Viasat said in a letter to shareholders.
Viasat is currently in the second quarter of its 2023 fiscal year. WIth the ViaSat-3 delay, the company now anticipates mid-single digit revenue and adjusted EBITDA growth in FY2023 compared to FY2022, which is slightly lower than its previous guidance.
“Our fiscal year 2023 outlook is revised ultimate reflecting the cumulative effect of the ViaSat-3 launch days, combined with the infrastructure network activations, delays to some portions of new aircraft activations due to those delayed deliveries to the airline customers, constraints on residential broadband and some supply chain impacts,” CEO Mark Dankberg said on a Nov. 8 call.
COO Kevin Harkenrider added that the number of supply chain issues is declining quarter-on-quarter, but “unfortunately, when you have a component shortage, you have to get 100% of them in.” An 80% improvement is positive, but still not enough to deliver, he said.
Viasat is expecting “strong” growth in Commercial Networks for the fiscal year due to in-flight connectivity (IFC) mobility terminal deliveries and the backlog in ground antenna systems.
Revenue for the second quarter increased 6% year-over-year to $745 million. Viasat had a net loss of $48 million because of tax credit valuation because of the Link-16 business line sale to L3Harris.
Satellite Services Q2 FY2023 revenue was $301 million, nearly in line with Q2 in the prior year. Visat said commercial air IFC services grew year over year with 20% more aircraft in service compared to last year. However, this was largely offset by a decline in U.S. fixed broadband revenue due to capacity allocations and fewer residential subscribers. The company expects continued pressure on the U.S. broadband business until ViaSat-3 enters service. There is growth in the Latin America international fixed broadband business.
Government Systems Q2 FY2023 revenue was $264 million, roughly in line with the same time last year. Viasat reported strong services revenue from government satcom systems, despite a decrease in product revenues. This segment is experiencing certification delays and spot supply chain issues
Commercial Networks Q2 FY2023 revenue was $180 million, an increase of 34% compared to the same time last year. During the quarter, Viasat received a $62 million payment related to the intellectual property litigation that Viasat won over Acacia Communications. This payment increased Commercial Networks product revenue for the quarter by $56 million.