ViaSat Revenues Buoyed by In-Flight Internet Uptick
[Via Satellite 10-11-2016] ViaSat reported strong growth and increased revenues in its second quarter ended Sept. 30, 2016. In the second quarter of fiscal year 2017, ViaSat’s Satellite Services segment recorded its fifth consecutive quarter of revenue growth, up 11 percent year-over-year, with operating profit increasing 55 percent year-over-year to $32.6 million. Profitable growth was driven by expanded residential services offerings, which drove higher Average Revenue Per User (ARPU), as well as an increase in the number of commercial aircraft that have installed ViaSat’s in-flight internet system.
During the quarter, ViaSat served 686,000 residential subscribers at the close of the second quarter of fiscal year 2017, which was relatively flat compared to the 687,000 residential subscribers at the end of second quarter of fiscal year 2016. The company also expanded residential broadband service offerings, including new premium service plans and value-added service bundles, drove ARPU in the residential broadband internet business to a new record high of $61.55, up $5.31 per subscriber or 9 percent on a year-over-year basis.
ViaSat also signed new European contracts with Finnair and SAS during the quarter. At the close of the second quarter of fiscal year 2017, ViaSat’s in-flight internet service was deployed on 533 commercial aircraft.
“We had a very strong second fiscal quarter. Our government business showed exceptional growth, satellite services continued to steadily increase earnings and revenues driven by ARPU gains and growth in in-flight Wi-Fi services and our record new contract awards are indicative of sustained demand for both our products and services,” said Mark Dankberg, ViaSat chairman and CEO. “For the first six months, adjusted [Earnings Before Interest, Tax, Depreciation and Amortization] EBITDA grew twice the rate of revenue excluding the impact of [Research and Development] R&D expenses associated with the internal development of our next-generation ViaSat-3 class satellite payloads. Continued earnings and operating cash flow growth demonstrated the attractive economics of our network in the residential and aero markets, where we now have contracts with eight commercial airlines globally, and we maintained strong positioning in key government sectors including tactical data links, broadband mobility and IP network security. The ViaSat 2 satellite is expected to ship before calendar year-end, and we’re making exciting early progress on our ViaSat 3 platform, which will significantly expand our bandwidth resources, lower our costs, increase our geographic footprint and expand our addressable markets as we position to deliver abundant, cost-effective broadband access on a global scale.”