VSAT - Earnings call transcript Q1 2020

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Operator

Welcome to Viasat's FY20 First Quarter Earnings Conference Call.

Your host for today's call is Mark Dankberg, Chairman and CEO.

You may proceed, Mr. Dankberg.

Mark Dankberg

Okay, thanks. welcome quarter earnings of and our call everybody fiscal first XXXX. afternoon, to conference Viasat's for Good I'm Mark Operating Dankberg, Counsel; in with our me Corporate Chairman Robert Bruce and CEO, Baldridge, CFO; and President and Dirks, our Development. our and Paul our Chief Blair, Officer; Treasurer Duffy, Rick Shawn General I've Froelich got

Before Robert will we provide disclosure. start, our Safe Harbor

Robert Blair

Mark. Thanks,

that to will As forward-looking statements. reminder this differ a results actual discussion contain factors know, cause you is could materially. This

factors in Copies to XX-K or our these from including is most recent Form website. filings, you SEC concerning on our and information Additional Back contained from our the are SEC Mark. reports XX-Q. Form available

Mark Dankberg

Okay. Thanks, Robert.

overview, be So, provide discuss available slides will our the of and the referring consolidated are take and an color, financial additional that outlook I'll then to then we and results, and questions. segment Shawn web. will review over we'll our some with I'll start

fiscal over In-Flight and within and include quarter significant compared our allies. the grow in service, government we first with last a So, and growth expanding more to in momentum helping products markets year built a In-Flight Plus XX% see last drive with up compared higher all year. year-over-year of of that backlog growth sustained US planes orders ARPU and opportunities quarter residential close to our talked where diverse addressable a Connectivity Services, fiscal sources base Underlying ago. we were we our services results, and to has XXX%, revenue significantly momentum more carrying 'XX and EBITDA certainly adjusted a from base, 'XX about into connectivity

is satellite from offered last and by and network yielding revenue to long follow effective nature infrastructure at relatively the leverage. due X growth cycle, attractive That's the to potential about flow even De-levering enabled help our the ViaSat of to EBITDA on variable growth the X.Xx illustrate term services, derived lower margins first satellite longer de-levering typical and geographic also by low in investment net networks. quarter. Adjusted cash markets, launch Xx and of is investing cost constellation, the from end cost year free for down bandwidth

systems generating performance. and innovation and for gaining investing vertical to US in to to already the systems delivery panel. In government and begun business rate. geographic actionable markets. revenue, we to have in includes space each well investments corresponding a potential growth and with learn with expect ongoing We've for lot space, business adapting relationships persistence, market mid-term, maintain the reputation of most the Connectivity is effective EBITDA technology of net technology prudent and greatest refining, aim residential manufacturer That integration, on as debt vertical levels cost and new We're in We and a and and key as leverage. ViaSat a In-Flight and users, of markets unique end earned continuing new value most net be We characteristics that use bandwidth the existing the insights. growth grow in a we've time, innovate infrastructure, Over X of attractive direct broadband, in truly integrated purpose innovative in can leadership adjusted vertically but applications. vertical in defense including our total to Executing and the believe markets. We're element the strategy differentiated testing in constancy takes learned models market. ground and

transmission just customer satisfaction, in off approach. intimacy compared as growth, our wholesale, a believe earnings investments in pipe market We to are and paying

ViaSat generations learned new set each a decade new this of design lessons first an from more generation is incorporates broadband continue ViaSat bandwidth, the innovation of X. the shelf to of ViaSat new, and significantly a satellite space-ground It's multiple a delivering understand the X ViaSat satellite highly As and and components. speeds were generation. off network the X it's satellites, on well, to fundamentally X and architecture, X ViaSat on we of series construction, first prototypes. scalability. integrated greater higher payload payload emphasis of for X used flexibility spacecraft important the progress with go of to establishing space If just tools instance things and purpose designs. with in make a ViaSat creative X continued technology ground They relative and

to for, aiming in bandwidth tests industry date performance of the leading as superior well real as geographic coverage. been supports System flexibility productivity we've time

integration. technical any that architectures. satellite But construction ViaSat we we time. to payload regulatory and enough seen believe X and comparable most X similar the geosynchronous in believe device productivity are progress achieve X proposed payload as some designing even analyzing aggressive X, in trends could ViaSat is on begin that under and X architecture real did ViaSat better with haven't relative We follow-on, the There advances space. ViaSat or and now filings is scalable, made X architecture long-term We've or the innovative considering the their

coming performance more the budget As give and on more schedule trade-offs we'll information the we months, get detail that. around over

focused increasing are excited progress we the we're but future. we're and on advantage a space the in defining competitive X broadband our the very definitely executing in program, path the about on For ViaSat now, to

an year. time is and period into often broadband higher highlights results first as I'll of Networks a financial last higher over and last EBITDA growth. more in start to EBITDA backlog government good are in exceptional as $XX compared million, than little network on of operator. to compared depth satellite of which our to first a here. this a bit XX%, last down quarter, awards year million robust with the $XXX the last year. compared business, year, first the pleased result of and will the still just up XXX% Adjusted Total sources Shawn year Awards, the any go the the lumpy were up several was revenues quarter quarter quarter other ago on are touch We're than adjusted commercial very quarters. to are The same

In million the item, is and products GSA IDIQ contract, contract a awards, mechanism addition to government non-developmental we timely $XXX many which received our new purchasing a firm for of services.

to quarter, contract not the of first revenue. and of As included into we the un-awarded That's in convert end IDIQ our $X billion value over had in we expect option that backlog. well

non-developmental our Delivery business believe grows, in item options good facilitate are without quantity showing Indefinite contracts in or Indefinite IDIQ up the first revenue, indicators We our IDIQs -- As and necessarily a can anticipate we those backlog. volume of demand. government these contract of greater

to Shawn. that backdrop, with it I'll So, over turn

Shawn Duffy

Thanks, Mark.

which services the XX%, up and lower our XXXX increased revenues But, off and government led very of XX%-plus product of is Our deliveries more segment, effects the XX%. million ramp were $XX all comer revenues million or good Service up to in by with expect trends start, $XXX growth supporting while terminal beyond. than year-over-year solid down growth offset satellite or $XX Commercial [ph] QX fiscal anticipated XX% revenues a segment. fiscal XXXX, million in percent we year-over-year, both in systems were Networks

X businesses. last upon reflecting for doubled to year-over-year XX%, as despite leverage period more Adjusted we at First margins nearly points investments fixed and operating the quarter the the us. percentage were million, we to our EBITDA mobile EBITDA that same growing made $XX opportunities adjusted expand compared than service internationally, year, in our underpins broadband

over strongly strong strong of point million of from strong revenue Service mobile growth. systems saw broadband each period, very deliveries adjusted at including represented segment we This our government XX% unchanged handheld percentage Tactical sells X% product as but year-over-year. terminals. of were XX% the record EBITDA margins also up growth $XX and result many in BATS-D small SG&A, systems, drive of EBITDA of in last grew predominantly higher largely a adjusted Datalink year-over-year, our of at X a helped a our shipments radio across XX increase the decline Looking service million, $XX Government Gross revenue, prior Segment revenues offerings. year. of government a from QX Link businesses, percent of was

$XXX Segment were million. awards QX in

our over to $XXX which under the backlog options backlog awards As looking segment billion systems TTM it's last or portfolio in higher his AMSS XX% numbers. we've opening million, the and in IDIQ remarks. On to at alluded period Mark the government year, nearly And can in government contract, $XXX billion just figure year-over-year. our a be in than somewhat TTM lumpy, $X unordered quarterly outstanding million this approximately said same as basis, million $X.X past, awards increased excludes which company's were $XXX the under service is ceilings up

saw mostly shipments. terminal commercial shipments compared a program. of the to American mobility of to a this for shipments declined Also, of as Airlines Turning result pace by revenues negatively impacted networks; quarterly extent, MAX last terminal grounding the XXX but to we XX%, the year, aircraft lower continued lesser year's accelerated our

this in deliveries as unresolved, believe segment, a as situation a in well point, satellite long terminal this remains continuing XXX we forward, as impact as quarter's Looking low a represents revenue services. MAX there but be could

pipeline Stepping strong back, the is business the growing. and is

IFC to additional sequentially. expect increase, existing X% terminals contracts, We a install was XXX under which approximately

solutions, business, a segment increase which remainder and is as EBITDA last antenna brought point percentage about X it's of the with for Networks slight been the years. improvement XX% and quarter gross whined in fixed highest was X Awards associated adjusted For that to offset somewhat quarter, $XXX record was and terminal. for integrated in investment, margins. loss expense commercial for million, than R&D $XX and million, were higher the which commercial the more SG&A This in airborne the backlog a networking a

Finally see mentioned ramp I growth, good activities growth we adjusted to continue stronger Services, and in even revenue despite EBITDA in earlier. international Satellite the

broadband of sequential bulk over our the and also the Both Xth record consumer and $XXX year-over-year. half record the highs, up of was of fixed just business broadband, representing QX quarter million, hit This the XX% a IFC remainder. accounting the quarter IFC with for high revenue businesses of and consumer commercial growth growth,

of trend continue, year. from this ARPU a number verticals. increase a even expect the year-over-year growth more coming in We last compared growing increase future broadband new service from with our as to XX% subscribers, in Pemex, consumer slight to premium benefited average as revenues of well from Fixed

commercial a and, service revenue In in increase to extent, driven of number growth lesser XX% an air, ARPA. a by the increase primarily in [indiscernible] year-over-year was

service in Our that are X,XXX excludes ending but aircraft enabled, account currently to MAX services XXX Viasat and grounded. Boeing, already have that was XX

flight to revenues in pressure which the overall earnings the In number $X year related impact, terms based and service to on a of is could fiscal return million in result financial delay year million a in range, reduced the installs of $XX calendar timeframe. end in

there service. to considerable when continues planes on be return will these uncertainty However, to

So, a Service we're monitoring adjusted from the of variable Satellite doubled, On $XX and on mobile EBITDA of XX%, spending to the to XXXX situation million in our revenue the flowthrough was low emerging EBITDA, segment. incremental nature segment carefully. cost nearly opportunities. This broadband for the reflects of a over sequential this the current basis, represents which quarter. million to fixed increased in EBITDA revenue to XX% due of closer Adjusted adjusted impact QX conversion to $XX increasing international

lots year. increase reflected we Company X, of $XXX our whole, and two for income same good last plus and with businesses, last quarter, the position In cash years. momentum On our which of leverage is trends the a to very net period the see backlog our million debt the flows across billion, quarter Slide $X.XX total in for a

net $XX.X while line, with our improvement see reflects of The credits. income R&D the was non-GAAP associated million a the operating and EBITDA net a current benefit net we with performance, of net QX in loss, a GAAP our along the reduced result lower On income year million. tax income increased adjusted $X.X loss

was operations large quarter, an flow, our cash increase a the increase business. support Most in at million growth we of working substantially capital higher working offset to product this $XX generated of unit inventory in EBITDA this the year-over-year the from with Looking change capital. government by adjusted comparison reflecting

year the In the expenditures value about lower sequential constellation, a year-over-year ground inventory reduction activities Although we inventory dollar due increased we on last turnover by basis, by expenditures period. to our saw million ViaSat-X was of investments year-over-year basically network our during investments. $XX CPE this partially ViaSat-X the on CapEx, higher in offset on increased completed unchanged plus

to no our matched Consistent material So and impact adoption growth as found to debt, balance or with in can to previous quarters, noted impacts our Form various XX-Q sheet information our previous ASC FY FY for leases. filed the I XXX for of ratios additional the the QX accounting our XXXX the income QX XXXX in be leverage measures on SEC. discussions regarding of the had related adoption be our

In Xx QX compared right, see can the last lower of on net to from same to the leverage that there X.Xx sequential time improved fiscal year. a And dramatically was from you also position chart improvement our down XXXX. slight the

hover plus We minus expect X.Xx to of area, half-turn the leverage throughout the around year. net our a the or remainder

Finally, position our be strong. continues to liquidity very

million, $XXX our facility. balance $XXX the credit on revolving plus includes under which Our the cash million availability sheet

So, with Mark. that, it back turn over I'll to you,

Mark Dankberg

the growth X its our given One, entry years which bandwidth XXXX. and was lower XXXX. XX-month geographic quarters entering of shows benefits us little trade-offs innovations coverage with growth I'll color were possible catalyzed design when We've natural residential X of the segment in important quarter revenue the some Shawn. left ViaSat-X the fiscal productivity, U.S. that trailing made chart long-term service the fiscal areas. we've back we prior on X had a of by and the for Thanks, chart program give sequential first progress technical the ViaSat-X in Satellite ending business in points. illustrates flexibility. on of Okay. our market straight began Services The and steady application the period The and over year

growth was been also of revenue long-term on acquisition And world. now U.S. our led satellite ViaSat-X regional to design natural operators was Wildblue ViaSat-X the the technology residential first Second, market and then by fleet. Connectivity a the the models, the enabled the product you which the to trade steady of X and architecture growth base of productivity growth innovative U.S. with the and In-Flight follow markets the in services in augmented market, network broadband is satellite and revenues, ViaSat-X sustained leveraging our satellite that the each bandwidth got spaces see a by by and total global regional U.S. of diversification business that's plus services enabled by with around area long-term consistent

driven modest Connectivity In-Flight first was period growth airplanes results, by higher quarter value, XX% revenue service residential strong gains. the on growth by and the service Then in year-ago Focusing a along yielding largely increased higher with as to plans bandwidth segment a growth compared was also some subscriber ARPU revenue to U.S. contributor in compared Services XX% last year.

competitors. markets So to our gains satellite benefit both of from those bandwidth productivity compared

We service for which mid-term of continue our residential to near carefully ViaSat-X. to balance growth using we're finance offerings in cash generation, earnings part U.S. to

boosting reducing lowering We and churn satisfaction. are capital expenditures, customer CPE

those We of continue to work on X areas. each improvements in

bandwidth fits a bandwidth the invest ARPU We growth continuing and of high-speed believe This context We're new a a on innovative demand for technologies. more high-value our leader. for that network continued terms ISPs too. plans of and higher market-facing in total also is in and strategy of speed per to good for focus terrestrial speeds bandwidth $X end-user productivity satellite landscape

latency to and our gaming expected For in those we With U.S. tests are for to expand instance, increase the instance, that low aiming meaningfully systems to for internationally. more also customers market for comparable success, addressable U.S. suitable that this Leo could technologies continued year. markets fiscal offer

anticipate early new increase but enterprise contributions MAX ViaSat-X diversification. this and aircraft planes excluding the extent would step connectivity and delayed be increase commercial QX. these while otherwise is Wi-Fi, planes in for are the that are it a into new also service. Community X,XXX growth likely timeframe. fine to new got markets fiscal that service we've some We mentioned, planes also as yield think significant to and when geographic returns of some this Shawn effect at XX The means we in about end to that our XXX year as inhibiting little grounded can MAX markets So, our grounded are in-flight contributing remain entries to growth of the

sovereign Our market adapting and infrastructure, and and national defining integrating distribution to testing local environments. widely national varying national with regulatory support plans, to early building regional networks, entry include testing service objectives and adaptations regimes

Telebras facilities range early schools high markets. and of us reaching and work, a executed After court of government a connected on goal a obtained with strong we XXXX. with Court the Telebras already broader in partnership Brazilian agreement, end with We've speed remote year and have calendar of the we've by established Internet of thousands approval year sites the work XXXX. around enables XX,XXX applications to approval for

component our on It's technology, in terminal important and In-Flight of user an segment. of of geographic the focusing design, in a our it's example integrated terms Services models. in great business So, Satellite coverage, and of strategy system innovation in Space growth Connectivity, operational vertically expertise network power

strong us impact in are with Australia and focused distinctive fraction global drive laying It than very and only affordably But in are haul our an contribute is a for the leverage more earned for airline ways opportunity We've the and the intercontinental on can growth. customer positions passenger that network regional uses growth experience We're U.S. should making in growth obvious expansion partners to overall Wi-Fi satisfaction geographic Europe routes. of our groundwork share. no in small both long airline airline that ViaSat-X fast for market passengers if earnings leveraging by helping meaningfully be enhance it. and approaching

increase making innovative leading growing business to still this with our We're airlines continue cabin even while working we're models. So fastest to enable engagement markets, progress. passenger remains one closely of and

need ruining about conversely the Recently great commenting for than In-Flight fight. Free risk experience multimedia about years on in on of conversation and to music networks, of is Connectivity, importance our are web cloud-based through JetBlue connectivity. the been put good growing and to otherwise and that abundant, services a a publicly point a bandwidth; lot and of of promise the more video Connectivity poor or to Airlines as aren't an streaming resources. continues affordable Wi-Fi messaging passenger airlines and well within Continuing of the operational that's a more adoption We've of to airlines There bandwidth now. going ever. as on also in just social growing awareness rapidly focus for going delivering benefits is delivering supply of the growing on affordable need the they're of bandwidth productivity. broadband spotlight large

for affordable in high-bandwidth Australia regional high-speed, earned America, for believe the reputation within best now delivering We the and connections and Atlantic. we've sites North over Europe

that on the compete the are everywhere. Now ViaSat-X aircraft, lining launches first schedules of platform more making with our new up as global opportunities, delivery service can industry-leading we available parts

pursuing early recently the suited aircraft introduced either retrofit ViaSat-X and well initiatives. generation Ka-band Ku wide-body before terminal, cycle. are long dual-band in X haul We or We global or for on for market the new new our deliveries

we've to service new of Second, existing our and ViaSat-X and customers the America, expand agreement long airline engaged over with coverage and with regional intercontinental Latin Telebras. haul leveraging

engaging in aircraft are Ka-band satellite the our for engaging Satcom FY timeframe, China connectivity for year, fourth, airlines deployment leveraging globally calendar And XX, now partnership and for the Third, ViaSat-X the constellation. on global on and XXXX around we're network SAT we XXXX with broadband planning the China new with services deliveries for China leading market. beginning

with under first existing aircraft over anticipated XXX the quarter contracts. additional exited we So just

Airlines JetBlue compelling customers. throughout was fiscal that our announced of XXXX. enabled year in order show just orders at and to press relationship airline gains release. with described share is the the us Excellent our our lumpy always expansion The our execution and flow market earnings United of new convenience Excluding pretty of

of new globally. got robust, XXX means first deliveries position really we've strong are Growth in and of quarter so service. opportunities we close Airlines MAX because growth active for the to accelerating in planes out our successful quarters the we've good as and excited during not we're as the because American more got in couple very quite to was order last compete about we begin partly temporarily partly XX pipeline But planes in our

year-over-year out $XXX robust steady, Our very services in that's and market of both $XX can adjusted led profitable growth Revenue an point business in to gains. flow government by XX% always increasingly to sales that defense to government very million EBITDA innovation. XX% to continues have million steady disruptive the and year-over-year systems strong receptive a need business We be grew product lumpy. increased

new quarters. comparable it the the quarter strong XX% awards in last ending first quarter had quarter year driven this of by than still year, order While few million is higher value $XXX was contract time the last million first were our fiscal backlog sustained of at of the high over $XXX we below exceptionally flow XXXX

inventory million also revenue pointing delivery our IDIQ increased orders. announced values until that It's We to over in contract just that to billion. convert awarded firm we previously contract first worth value to $XXX don't of out expect the $X IDIQ include TSA receive award IDIQ our backlog on we quarter our in

enable is are customers, So for $X billion because that our important a and purchases timely figure. the included backlog services. item, unique our non-development they especially of million products not number in $XXX for IDIQs

this from revenue with these as higher non-development proportion a BATS-D and we such as contracting revenue grow, Link of As XX in derive vehicles. could the chart radio continue associated those to shown items anticipate

our here, earth capabilities. satellite small first or real Link Force ever to mention payload satellite. won previously low of this our want concept also spacecraft for an would I XX based announced the for on competition We award Air proof orbit capable

systems, is satellite growing diverse global payload an in potential and and significance illustrate satellites. program, There this XX lot and leveraging convergence strength such portfolio. in satellite technology Our constellation work remaining government capabilities make service winning and that product terminals the synergies of of rapidly our design and non-geosynchronous systems further prospect of small Link so a of Leo happen Link exciting of base creates to a the helps our in XX

in still in to believe our our very stages expanding market from the mainstream and radio we're of allies. be near, into government growth security the services products U.S. and the enthusiastic and networks long-term systems. about forces we continue with attractive areas adopters for in cyber and a in growth number are of -- opportunities the space, our terrestrial and to high-performance our early early presence Overall, including We grow mid next-generation,

Okay.

very So, to quarter, showed the for result of was very, and as we finally, is fiscal what this last which that of similar slide outlook XXXX. over at key course execution drivers time a our

thing similarity last performing plan. a to means good The much across areas quarter it are business pretty is our because according we

We have continued growth fleet momentum for the fiscal offers commercial EBITDA XXXX as ongoing That adjusted we Satellite services XXXX. our build growth of our opportunities. groundings. on more revenue Connectivity step XXXX what In-Flight pressure XXX attractive in up when In could we rate expanded MAX accomplished the portfolio a -- Services, adjusted XX in to fiscal to net and revenue $XX revenue XX% we anticipate per flight. of active is And year The million year-over-year, return as run that fiscal quarterly much in grounding as opportunities But gain occur. plane. $X on ongoing million does adjusted and EBITDA also when range creates they EBITDA year-over-year depending

value higher ARPU modesty U.S. XX% a subscriber broadband is fixed base. larger the down than year-ago on

have jumped revenue high operating good model and Our services backlog significantly satellite of convert margins. our revenue value $X year-over-year fixed Government in growth earnings year contract for over quarter time. inventory a as good and prospects than to fiscal variable this revenue to we the adjusted IDIQ un-awarded through year billion-plus first we flow to cost low for ago, XXXX Plus expanding that higher EBITDA XX% expect leverage at this a cost to supporting whole. our broadband opportunities time a is

But commercial -- opportunities mindful comparable is our target an growth, fiscal in and success-based that adjusted and EBITDA XXXX adjusted expectations top-level leveraged XXXX intact. and ongoing takeaway revenue, success XXXX expanding growth back both so attractive basis. EBITDA investments our investments the fiscal main on for margin remain and We we're of markets growth government for capital in and revenue presents large R&D strong our in Our in markets. into

our So to that's this at time it we're for And prepared remarks. take questions. happy

Operator

will [Operator of from line And Raymond Prentiss first question the Instructions] our from come James. Ric

may begin. You

Ric Prentiss

start I Mark. afternoon. with to good Thanks, just, want actually

are a launch on how important think You constellations with and your lineup could you're to. looking nice you touched couple have remind diversified service vehicles Can you aircraft. X ViaSat really us of at? of dates the that launch And the the some timing and just times, I

on I what's wanted current XA, thoughts just XC? to ViaSat the XB, the So know

Mark Dankberg

That hasn't talked it. last about changed since we

So the are much we orbit with uncertainty of we previously calendar in first bit little always so about have planned that the And new is there allow talk things probably early services, into the talking launch a date the XXXX that it's part going of then for as satellite that a executed did But raising launch architecture. a agreements main the we about are period. us shorter one.

then we test go it condensed satellite from around probably and orbit be for will before one service. So that part into just months part has month has to that -- the

Ric Prentiss

like XC, into how EMEA? Okay. And about XB, you look as

Mark Dankberg

the Europe-Africa-Middle the the we Americas then of We've one East that haven't to the we've end from the been roughly calendar Those looking third of before interval be said launch one launch the of XXXX. changed. X-month at expect one. to And

Ric Prentiss

out you then that thought X or bandwidth? demand there fourth Okay. look what's that Would for XC X the getting you're already come you that rough And Viasat is or might Viasat you at as working start mentioned the X. excited on of be have to a kind XA, timing exciting that ViaSat on after XB, the

Mark Dankberg

is now I But pretty I we think schedule, performance, the the to another through, significant right as what we're and have series. going to ViaSat-X improvement give -- cost. what on trade-offs mentioned, going not for We're to relative expect we're aiming

ViaSat-X an of had building we've it Think that natural So on because X. of as embellishment of really technology. it's a kind extension ViaSat

we big -- $X, in don't be where definition. You we'll mean had what all be get that much not returns and our X, what of think we except significantly complete the ground that objectives through and main it But R&D per versus about March to its deploy a the compatible this extension talk We'll of year have schedule solution went reduced an the of about more improvements of level be will capacity later to I will with more -- as productivity. with Viasat probably that work.

Ric Prentiss

funded? And little we new mean, out are be LEOs opine you maybe you of over top what some just them or of get in there XX constellations few the that Space, the That's potential out of got probably these LEO work next to bit mentioned Link get playing with the a one space-club collaborate the they with on that the planned are some What questions then, see from years. able how you also and might investors, you've will there? does intended, billionaire mean? So pun it LEOs,

Mark Dankberg

We that are. lot can to makes the have deliver We've understand orbit on dollar per most best we a that like those most invested it It's approach, examining the we've really for what do their view reinforce investments allows I bandwidth our we think spent satellites, us because into filings. them. think the to the and those. think approaches a that earth time capital we got places demand and really what of We difficult the with

won't say Some we a them innovative of I'd them to extent. mean of It better payload is probably that ours really deployed still some have investment. doesn't some architecture. think be some

satellites, and, things latency this possibly lower cases, terrestrial the geosynchronous they're actively satellite We're deliver of our either infrastructure with of that if some combining working hybrid experience. One we've lower some times LEO GeoLEO satellites. available with latency is in to with the multiple mentioned

to to for a bandwidth which it's I think that they technically we economics, and overall, time be of same the in space, type you more it's lower volume look be the we very I going these to would low bandwidth hard be means at wants bandwidth. think systems would if think complex think be expensive. point subject really deliver same significantly LEO caps We market either generally and cost the really would the but

Ric Prentiss

ViaSat CAF back funding, your how relate terrestrial All constellation? to might right. with low II there you the some it And latency the comment set on Link and X got of

Mark Dankberg

but building What networks that optimally hybrid low that communications. high-bandwidth, geosynchronous satellite-based by is a satellite of this is kind user's to, alluded with fast as are and bandwidth. No, no. the of that That's all the combine effect has testing a terrestrial them bandwidth II that The those two, year. It's essentially in as in about we what terrestrial, to of we've satellite, allows early some Alpha latency we CAF putting testing combining router funding on home expand based our to really create we're to lower with latency aiming not purely high-speed, and refers service. can now

Ric Prentiss

thanks. Great,

Operator

Simon Stanley. Morgan of next from you. Thank from Flannery line the our And question comes

You may begin.

Simon Flannery

Is there? we rather see potentially very Can to sense are or usage two, average Mark, pure customers the the thanks you a on potential going usage business. that Good ViaSat or And seeing as How over you the grows? Great, and the report you're the going Thanks. that trends evening. where talked about are buying moderates over, ARPU lot the give product? year fleet the online year you Ka/Ku not be something revenues, appetite American or that, for IFC waiting aircraft and much to approach? then X in continues two for more what the much. seeing IFC aircraft Ka/Ku interested as with per with on upside us -- are next migrating in there a in revenue in next the for

Mark Dankberg

Simon. Thanks, Okay.

to On of in band expectations some would as them, of those for are, some service is time, a new of where in on a activities those any do we other large the seat get already to also that where KU engage the have the continuity Because, I Ku/Ka, service and and areas fraction there, and there we same Ka things different aircraft on planes markets, mile on this are there retrofit of the where number Ku/Ka their it with for of the in Ka/Ku you depending as now. that are level is airlines depending candidates kind there several what are now wanted opportunity of interesting. areas. global good mentioned, that are delivery think routes. date service provides where was Then in basically And Ku from are

XX you the that the conversation as really are product We're timeframe. number of on have but takers brought to today, in aircraft or the announcements network, terminal. having ViaSat we into with us of to seeing the some make deliveries of And, alluded, timeframe the associated that, airplane delivery has Ku/Ka their Type in, Ku/Ka of saying, small, have and a on who, given hybrid just will go, also, say, then interesting that any the airlines progress and led okay". don't new then, delivery taking fact certifications And that we're at the "well, XX airlines we the when they interest our with uncertainty we'll basically making okay, maybe with also for gaps that. And good discussions X look that

we're of So, think on yes, to in on-board In because then or next bandwidth the are each. using just in of trends reflecting general more those use We're media using are we'll music just to and that deals. if, hopeful seeing embedded utilization, so, on people More social streaming Then talk about that it, interested the be global the a some quarter and are some in more in seeing the able media as tending websites. I it that the we're of usage there And basis. are explicitly also, Internet airplanes. is services. think in bandwidth, more video voice those internet

That if that aircrafts agreements and and United, JetBlue more comes prime agreements responsibilities some and us of delivering expanded contractor. seeing each more. seeing a and contractor from you we're at more of being a to us So, also involve converted instance, And, with contractor. look so our more for that prime being the services, being of increases We're those those revenue. prime us our

like on free as American that finally, like revenue for and those American well, per are Music. add Apple some on TV, done the aircraft. then Apple innovative services broadcast we All airlines have we've And these arrangement which coming you'll and in Airlines with of then as services that see we IFE, additional wireless contributing to growth

plus Connectivity of or aircraft driving that's In-Flight what's So that, number revenues. the our

Simon Flannery

lot. a thanks Great,

Mark Dankberg

Thank you.

Operator

Thank you. of next the JP line Phil from comes our from question Morgan. And Cusick

You may begin.

Philip Cusick

and level, amazing this like a these and been categories. Is that different strength backlog especially think to assume starting back forward? is there with better there a really reason is a look again here, drops level lumpiness this all to that trend, going Government lower to a recognizing has to norm

Mark Dankberg

been like over could we low growth double-digit, the wish so every percentage We've the years. lumpy. that, It's I last XX-ish growth few do Well, minus pretty in quarter. a plus or consistent XX%

probably for a safer think that's outlook us. I

backlog IDIQs more say change, things good we number. these As confidence, grow double-digit, and think that probably and get a that, safe if but I we'll that's

Philip Cusick

Should about ago? now pretty how are was digits And thinking right. years think should X Double it. more where about overtime? that ramp levels up look back to it for this generation; big, Got Viasat the R&D we're couple we to a of we the

Mark Dankberg

No, going X% is, then ground and using next about that the one say Rick budget there In and think of generation to at the with side but I deviate lot before this in we the those a came X and new Shawn is ahead. both associated we're think quarter, trough, was of the I think of we'll tools. next that's in X% you I range the something, things much this side. space point should is made from that constellation revenue our way ViaSat probably and going R&D, it stuff at quarter, involve saw the really at mentioned a of that a that If we're about to generation the less

And are of we think good, thing in LEO like some what's lot of think take you we these think just to that going think the up endpoint, it if really The measure would an to in there these with LEO that growth is of and you as next-generation ViaSat with. some think We've is to people think and systems contrast it's get the LEOs, as work if a we point at, across so it's X get ours and across. the really Viasat architecture. to on at that do, we itself most to constellation first of productivity, we coming in really using keep to main doing X and performance a trade-off. of thing, done constellation that's LEO actually scalable, not what We that that And payout of we're make point series, already. wanted of I contrast that's the look a or some look a a it and wanted and that

Philip Cusick

can? if I Great. more one And

Robert Blair

up is it's a first impact ViaSat Mark, thing big one the there. government gets today X; have when on how looking you're government going believe side Just our thing at ViaSat the government. about X We going to

Mark Dankberg

Go true. that's Yes, ahead.

Philip Cusick

And it. then if can. I one, Got last

sort had we release discussion about You What put Thanks. in XX-inch press already? of of the you the market target conversations antenna. a have should the satellite what there think and

Mark Dankberg

Okay. is by can and Basically, We aircraft, there peak government larger aperture get basically is application higher for those which supported of costs. aircrafts. better speeds with a airtime range the

the reason so that's it. for And dominant

in types it of that. for jet those rotary applications. would the business makes then larger the the are or market. some of them And kind economics of So, Those for wing just applications aircraft and for the the hybrid market be better

Philip Cusick

Thanks, guys.

Mark Dankberg

Thank you.

Operator

from from will Riley. line Crawford our Thank of B. come the next you. question Mike And

begin. may You

Mike Crawford

you. Thank when ones. Communications judge couple If shot riffle got timeline quick of Cassia given against $XX extended add [ph] million to infringement? you've this litigation could you maybe I a of Do for just jury award. a the nice award period might have time One, that, the your of the in

Mark Dankberg

be but There still going a to, there appeals. litigate by don't gratified Okay. happen. but we like We some post-trial we by jury decision, is probably need the when will there both we're things motions litigation, and to bunch of like we sides feel be to

that sequence like I think had it's early but So, matter. to felt the be, certainly case too indication a what we will the happen in next strong really what year, about good speculate will we it's a

Mike Crawford

that company Trevesware and Regarding Board doing is can IP and have and how of a comment on [ph], investment prospects? is of another they're has lot with the you're there Mark, their you waveforms business that anything on

Mark Dankberg

Yes.

provider years, army, really really the is ours, So, the pleased the subsidiary they've a really next majority-owned prospects the on it's into there in defense based the a good they've mostly and of Trevesware some of essentially, But will we're on in radios. done made we're community. of that in what terrestrial special out they responder progress pretty Hopefully, rapidly radios, Charles, majority that That [ph], specialty of early with been bring in. in with what's have couple play we larger but that over growth pleased going growing are technology the operations owner there.

Mike Crawford

just certainly or then Does XX still that one from was both saw award And on thanks. can record on funding those these Army Okay, -- but for like STTs. you that's a mean of program But July STT of those. get we non-developmental for just or? items the sources

Mark Dankberg

of you'll we consider Yes, things what's will operational be see record. official a own state, that of When means it DOD happened that the needs. then achieved something what customization an or we on once that that they'll with often it product a basically, happens, there that What or those non-development platforms call specific -- and number two our develop be product there is, one for applications is item may the product. nomenclature program underlying our that funds. a of of specific Then,

a Tactical end while, Radio production, So, called that's form ago, the you small in small really adopted radio which what is up and, didn't as was you've leading become It's the for there STT. program but remember to happened called, a a factor System quite around while Joint with a that. primary that been form there factor was

form was product. that essentially there would and is happened, small end radio we the up our of One what's sitting targets that's that in factor

become that's happened our with that's record items. non-development now applications, of several of of in So, program a number a

well. or works in think the as happening is I BATS-D the it's with

of those of things of But and real our those think and is, this we'll contracts own factor I have the when on some form Link so, XX. of see happen, program leader that in types you'll is a for it small record what less be reliant the will sign success really that's IDIQ product good And market awards. that customers

Mike Crawford

ViaSat-X would you and earth, scale new the then to revenue And future real-time opportunities? be, on with installations, your main service to offloading the Leo you. these thank architecture, how data, to beam-them-up just through specialized and final relates locations. the Okay, then other, of a as would into versus where these related constellation, And ISR one X.X ground that like that factor down addition ground versus back put station ViaSat-X that

Mark Dankberg

Okay. Yes, question. I good a it's mean,

connectivity once time a with the the with step they're these hours later. think and a basically When big both opportunity the later information proliferated test of that bullish can at lot think at right one at earth general, days provide to opportunities everywhere instead that satellites can exactly is back. in get or the because you seeing to is the it's of other about taking to see Then, with so once, in small of I observation satellite, the more we're a of real satellites market right everywhere lot you looking place, come the sensors.

that. network you at for what's a sensing each would relatively small, satellites, total happening, the of tend system is if of creativity there dominate to earth but lot look a for in inexpensive building ground cost So, those

and the at to ground ocean whole so limited, to of business. ultimately a that and going ways if first two limited about stations, into probably it, but way be two areas. there's this to half least especially go may real-time So, lot it's but about do years, is over a have turning One a is the easiest

to and satellites. is is what's high relays from orbiting in one been quite while, do other that a space the for in government done the The defense

it, real-time to is players. you is we that it some of want So, the be relay ways, especially other as best of thing satellite the sensing are some bandwidth, to to and you earth technology looking some if is at, network We're world, that relationships one ultimately, other includes ground the as own, satellite doing then, is able get do build anywhere ground operations, way as around with which in system, we're it a really in that our geosynchronous mentioned, the things are the relationships real-time high multiple well to through one systems doing really world. the provider with of a to thing And on with think.

we're This a is is working we a So think testing entries both. trends. in consistent long-term of that we way, and what the market way but is example a with good prudent think us

having it's think worth noting I There do. that it. is we're doing to still

Mike Crawford

right. Thank much. all Okay, you very

Mark Dankberg

Mike. appreciate a questions. Thanks Really your lot,

our next questions. for quarter. forward joining Thanks a call So, it speaking we for everybody and to again I that's think look lot

Operator

may conference. thank conclude does have day. in gentlemen, all today's great This Ladies participating and Everyone and you the a you disconnect. program for

Viasat (VSAT) 9 Aug 192020 Q1 Earnings call transcript