Viasat to Recover Just 10% of ViaSat-3, No Plans for a Replacement Satellite

A rendering of the ViaSat-3 constellation. Photo: Viasat

Viasat gave an update on the status of its ViaSat-3 satellite on Thursday, sharing that although it expects to recover less than 10% of the throughput of the satellite, the company will not require a replacement satellite to meet its growth goals. 

This update comes after the flagship ViaSat-3 satellite had a mechanical deployment issue with its reflector array after the satellite launched in late April. Viasat had staked its growth plans on the added capacity of the satellite, particularly for residential broadband and in-flight connectivity. It is the first in a trio of ViaSat-3 high-capacity satellites to blanket the globe. 

Viasat also confirmed it is finalizing insurance claims for both ViaSat-3 and the Inmarsat-6 F2, which suffered an anomaly with its power subsystem. Viasat has insurance coverage of $420 million for ViaSat-3, and $348 million for the I6 F2 satellite. The operator plans to finalize both claims before the end of the year.

The company’s stock fell precipitously after disclosing the issue in July. Pre-launch it was trading around $35. After the launch it was trading around $45 — and now it’s trading around $16. The stock closed at $16.80 on Thursday, up 7.5% from the prior day. 

Viasat had a positive financial update on Thursday, reporting that it plans to reach positive free cash flow earlier than planned. Since the anomaly, Viasat has been conducting a review of its operating cost structure and capital allocation strategy. It now expects positive free cash flow during the first half of calendar 2025, rather than the second half. This excludes the positive impact of satellite insurance proceeds.

The company confirmed its outlook for fiscal year 2024, as CEO Mark Dankberg previously told investors it won’t impact this year’s financials. 

Viasat continues to expect revenue growth in the high single-digits over fiscal year 2023 for the combined company with Inmarsat, including Inmarsat’s historical results for comparison. The company also expects to grow revenue again in fiscal year 2025.

As part of the review, Viasat believes it can meet its customer commitments with its current fleet with the Inmarsat acquisition, without a replacement ViaSat-3. 

“With the flexibility and agility of its integrated satellite fleet, the limited ViaSat-3 F1 capacity, the addition of the next two ViaSat-3 generation satellites, ground network mitigations, and third-party bandwidth commitments, the company remains confident that it will meet the current and future needs of its mobility customers and is well-positioned to achieve its financial growth objectives,” Viasat said in the Thursday statement. 

Viasat also said the integration with Inmarsat post-acquisition is going “ahead of plan.” ahead of plan. It estimates $80 million synergy in annual operating expenses and approximately $110 million in annual capital expenditures to be realized in fiscal year 25, versus previous projections of a three-year period.