Viasat (NASDAQ:VSAT) reported first-quarter fiscal 2027 results that included positive free cash flow, rising government satellite communications revenue and record awards and backlog in its Defense & Advanced Technologies segment, while legacy fixed broadband and maritime businesses remained under pressure.
Revenue totaled $1.2 billion, down about 1% from the prior-year quarter. Adjusted EBITDA was $381 million, down 7%, while net loss improved by $5 million to $52 million, principally because of lower interest expense, Chief Financial Officer Gary Chase said. The company maintained its fiscal 2027 outlook for mid-single-digit revenue growth, adjusted EBITDA ranging from flat to slightly higher, and approximately $180 million in free cash flow.
Cash flow and leverage improve
Viasat generated $72 million in free cash flow during the quarter, excluding roughly $30 million in cash taxes related to the Navarino sale. The result represented a 19% increase from the previous year and was supported by operating cash flow of $291 million, up 13%. Capital expenditures rose 11% to $219 million.
“The first quarter is typically our toughest cash quarter given annual bonus payments,” Chase said, adding that he was pleased with the company’s cash generation.
Net debt relative to trailing EBITDA was approximately 3.2 times, improving 0.4 turns from the prior-year period. Chase also said Viasat moved an additional $100 million in cash from Inmarsat to Viasat during the quarter, bringing the cumulative amount transferred to $450 million.
For the full fiscal year, the company expects consolidated capital expenditures of $950 million to $1 billion. That includes about $400 million of maintenance spending, more than $150 million of capitalized interest, approximately $50 million related to ViaSat-3, up to $150 million of success-based spending, and $225 million to $250 million in growth capital expenditures.
Defense awards and government SATCOM growth
Company-wide awards rose 10% to about $1.3 billion, while backlog increased nearly 19% to $4.2 billion. Defense & Advanced Technologies, or DAT, awards increased 22% to $524 million, led by Space and Mission Systems and Tactical Networking. DAT backlog rose 32% from the previous year.
Chairman and Chief Executive Officer Mark Dankberg highlighted the company’s win for the next phase of the Protected Tactical SATCOM-Global program. He said the award reflected demand for multi-orbit national security capabilities and Viasat’s ability to combine space technology, mission systems and dual-use satellite services.
DAT revenue declined 4% to $331 million, primarily due to lower IP licensing revenue and declines in Space and Mission Systems. However, Tactical Networking revenue rose 36%, driven by tactical communications products and TrellisWare international product sales. Chase said Viasat expects strong fiscal-year growth in encryption, Space and Mission Systems, and Tactical Networking despite first-quarter timing issues.
Government SATCOM services revenue within Communication Services increased 10%, supported by greater usage from U.S. and international government customers. Dankberg said the company expects technology development and operational demonstration contracts in DAT to create opportunities for both government and commercial recurring satellite services over time.
Communication Services shows mixed performance
Communication Services revenue was flat at $825 million, as growth in aviation and government SATCOM offset declines in residential fixed broadband and maritime. Segment adjusted EBITDA declined 3% to $311 million, reflecting weakness in Fixed Services and Other, maritime pressure and the absence of Navarino’s prior-year contribution.
Aviation revenue increased 11%. Viasat ended the quarter with about 4,530 commercial aircraft in service, up 10% year over year, and approximately 850 commercial aircraft in its in-flight connectivity backlog. The company expects aviation revenue growth to continue as more customers adopt full fast free offerings, raising average revenue per aircraft, although aircraft unit counts are expected to remain near the first-quarter ending level.
Maritime revenue declined 7% as vessels in service fell. Viasat had more than 1,700 NexusWave vessels in service and an order book exceeding 1,400 vessels. Management said it is working to improve installation rates and distribution arrangements, while expecting the NexusWave installed base to grow significantly.
Fixed Services and Other revenue fell 27% as U.S. fixed-broadband subscribers continued to decline. Viasat ended the quarter with 115,000 subscribers and average revenue per user of $111. Chase said the company expects fixed broadband declines to continue until after ViaSat-3 Flight 2 enters service.
ViaSat-3 deployments advance
Dankberg said Viasat completed all bus deployment and in-orbit testing activities for ViaSat-3 Flight 2. Subsequent to quarter-end, the company completed reflector and boom deployment for ViaSat-3 Flight 3, which entered in-orbit testing ahead of anticipated Asia-Pacific service entry in late August or early September.
The new Ka-band satellites are intended to support broadband connectivity in aviation, maritime, government mobility and fixed markets. Dankberg said the company expects growth in aviation and government markets to be driven by both a rising number of connected platforms and greater bandwidth consumption per platform.
Management also discussed its Equatys initiative, saying the next major disclosure is expected to concern funding for an initial satellite constellation. Dankberg said the L- and S-band constellation could materially expand capacity for mobile satellite services applications, including direct-to-device, government, unmanned vehicle and safety-related uses.
Viasat said its strategic review remains ongoing. Dankberg said management is evaluating how to maximize shareholder value from its DAT business and spectrum assets, but does not want to make a premature separation decision while competitive and geopolitical conditions continue to evolve.
About Viasat (NASDAQ:VSAT)
Viasat, Inc (NASDAQ: VSAT) provides high?capacity satellite broadband and wireless communications services to consumer, commercial and government customers worldwide. The company designs and operates satellite systems and network infrastructure to deliver secure, high-speed connectivity across remote and underserved regions, as well as managed networking solutions for enterprises and public sector agencies.
Viasat’s product offerings include residential and enterprise satellite internet services, in-flight connectivity for commercial airlines and business jets, and secure networking platforms tailored to defense and intelligence users.
