VIASAT INC

Viasat Inc. is an innovative, global provider of communications technologies and services, focused on making connectivity accessible, available and secure for current and future customers worldwide. The company conducts its business through two reportable segments: communication services and defense and advanced technologies. The communication services segment provides broadband and narrowband communications solutions across government and commercial mobility markets, as well as for residential and enterprise fixed broadband customers, and includes the development and sale of advanced satellite and wireless products. The defense and advanced technologies segment develops and offers resilient, vertically integrated solutions to government and commercial customers, leveraging core technical competencies in encryption, cyber security, tactical gateways, modems and waveforms.

As of March 31, 2026, Viasat’s complementary fleet consisted of 23 in service or operational satellites spanning the Ka-, L- and S- bands, with 13 Ka-band satellites, eight L-band satellites (three of which were contingency L-band satellites that were operational but not in commercial service), an S-band satellite, and a hybrid Ka-/L-band satellite. The company’s second ViaSat-3 class satellite, ViaSat-3 F2, was launched into orbit in November 2025. As of March 31, 2026, Viasat had eight additional GEO satellites under development or in preparation for launch: a high-capacity Ka-band GEO satellite (ViaSat-3 F3), three adaptive Ka-band GEO satellites (GX7, GX8 and GX9) and four Inmarsat-8 L-band GEO safety service satellites. Subsequent to fiscal year 2026, in April 2026, the company launched the third ViaSat-3 class satellite, ViaSat-3 F3, into orbit with commercial service expected to commence by late summer 2026.

Within the communication services segment, the aviation business line had IFC systems installed and in service on approximately 4,580 commercial aircraft (of which approximately 130 were inactive at quarter end, mostly due to standard aircraft maintenance) and approximately 2,100 business jets with Ka-band communication services as of March 31, 2026. The company anticipates that approximately 1,000 additional commercial aircraft will be put into service with its IFC systems under existing customer agreements with commercial airlines. The maritime business line provided Ka-band communication services to approximately 13,200 vessels as of March 31, 2026. The U.S. fixed broadband business had approximately 130,000 subscribers with an average monthly revenue per user of $113 as of March 31, 2026.

In the defense and advanced technologies segment, total new awards (excluding awards relating to the Link-16 Tactical Data Links business sold to L3Harris in January 2023) grew from approximately $0.6 billion in fiscal year 2018 to $1.6 billion in fiscal year 2026. Revenues from the U.S. Government as an individual customer comprised approximately 16% of total revenues for fiscal year 2026. The company incurred $164.9 million on independent research and development expenses during fiscal year 2026. As of March 31, 2026, Viasat employed approximately 7,000 individuals worldwide, with 66% of its workforce located in the United States.

Management’s discussion of the company’s outlook focuses on several key growth vectors. In the communication services segment, growth is expected to be driven by continued demand for global mobility services, such as aviation and maritime services, reflecting expected continued increases in the number of aircraft and maritime vessels in service, passenger volumes, internet users, applications and connected devices and platforms worldwide, as well as expansion in government satcom services. The company believes that commercial global mobility services continue to represent a very large and fast-growing addressable market and are at the core of its growth strategy in the communication services business. In the defense and advanced technologies segment, growth is expected to be driven by increasing reliance on space-based assets for military operations, continued increases in demand for resilient communications in multi-domain operations, growing demand for digitization of military infrastructure and increased integration of commercial and defense technologies.

Regarding margin trajectory and cost structure, the company states it is hyper-focused on maximizing the useful bandwidth per total lifetime capital cost of each satellite, referring to this as “bandwidth productivity” and seeing this metric as a key factor in determining return on satellite investment. The company intends to continue to drive efficiencies in its businesses through vertical integration and other strategies and increasing scale as it moves into new and adjacent geographic, product and service markets. The company also intends to continue to focus on strategic research and development to bring more efficient, effective and customer-centric high-quality broadband and narrowband communications to the global market.

In terms of capital allocation, the company states it may continue to evaluate acquisitions of, or investments in, complementary companies, businesses, products or technologies to supplement its internal growth. The company also notes it actively seeks strategic relationships and joint ventures with companies whose financial, marketing, operational or technological resources may accelerate the introduction of new technologies, service offerings and/or the penetration of new markets. The company’s strategy includes driving capital efficiencies by delivering the most productive satellite systems and driving efficiencies of scale and operations.

The filing identifies numerous material risks. The company faces significant operational risks related to its satellites, including the potential for satellite failures, degradations in satellite performance, or shortened satellite useful life due to malfunctions, anomalies, or the harsh space environment, which could result in a reduction of revenues or an impairment loss. New or proposed satellites are subject to significant risks related to construction, launch and orbit raising that could limit the company’s ability to utilize these satellites, including construction delays, manufacturer error, cost overruns, launch failure, and improper orbital placement. The company also faces intense competition in its markets, noting that many competitors are larger and have significant competitive advantages, including greater financial and management resources, and that the traditional GEO satellite communications industry is experiencing significant disruption from customers' increasing adoption of LEO services, including Starlink. The company’s success depends on the investment in, and development and market acceptance of, new broadband technologies and advanced communications systems, and there is no assurance that new technology, product or service offerings will be successful or achieve market acceptance. The company is subject to regulatory risks, including the need to comply with laws and regulations of national and local authorities regarding the use of radio-frequency spectrum, and changes in the terms and conditions for access to and use of spectrum could have a material adverse effect on its business. As a government contractor, the company is routinely subject to audit and review by the Defense Contract Management Agency and the Defense Contract Audit Agency, and an adverse outcome could result in material civil and criminal penalties and administrative sanctions. The company’s level of indebtedness and ability to comply with applicable debt covenants is also identified as a risk factor.

The tone of management’s message to shareholders, as conveyed through the business overview and strategy sections of the filing, is forward-looking and focused on leveraging the company’s multi-band satellite fleet and vertical integration to capture growth in global mobility and defense markets. Management emphasizes a strategy of driving capital efficiencies, focusing on relentless execution, continuing to expand into new markets and geographies, prioritizing the end-user, and managing for the long term. The two or three strategic priorities most heavily emphasized are: delivering the most productive satellite systems and driving efficiencies of scale and operations; maintaining focus on technology leadership and following a path of proven performance; and entering and disrupting new and adjacent markets through technology innovation while targeting international expansion. Management does not provide specific numerical guidance ranges for future revenue or earnings in the filing.