VSAT - Earnings call transcript Q4 2021

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Operator

Welcome to ViaSat’s FY 2021 Fourth Quarter Earnings Conference Call.

Your host for today’s call is Rick Baldridge, President and CEO.

You may proceed, Mr. Baldridge.

Rick Baldridge

Okay. today. us joining for Thanks We released open little before market earlier to Shareholder hope you Letter and a that. today have review the our all time had brief a On we’ll on Q&A. rest little opening time remarks bit of today’s the and do of call, the spend just But have provide Robert our Harbor disclosure. first, let’s to Safe

Robert Blair

Rick. Thanks,

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

report filings concerning Form these contained including website. our factors Form back our Copies XX-K on SEC you, said, to XX-Q. the recent information and Additional SEC from in most With is available that Rick. our from are or

Rick Baldridge

and quarter everybody call. Thanks, welcome to hello, and Robert, year-end our fourth Okay. and

our our IR, our Froelich right Lopez Executive Duffy; Paul to addition Development and with Corporate Shawn focusing Chairman; on Investor call addition In joining Dankberg, from CFO, from Robert, Investor joined us Peter the new Relations Relations and just team; Mark today now. is

the cover So Q&A before we’ll highlights. getting a just to few

that allowed than us finished operating a First then million year-over-year records really in stronger the $XXX COVID-XX prioritization alongside thing year, including year and cash fiscal right especially but of awards. hard with is, performance, had, of achieve hit adaptability, flexibility proud obviously decisive really fourth to A the note XXXX that year record QX in business with We really actions over in along XX% we employees cost financial companies really, our and achieved in from flow diversified early work EBITDA, of I’m what the mix sure our EBITDA. all associated quarter challenges, strong of the lot on results to us is of beginning. stellar combination adjusted that growth light normal we’re for adjusted year, note the for our and and very

we Services, going fixed strong segments ARPU Satellite XXXX. stable churn and with well record into with In saw are performing services. strong really business our momentum demand Our consumer

shipments. impacted improvements into footprint shipment beyond the government COVID the worth a date three of in business, added row systems but eminent, over year. ViaSat-X facility, XXX still in and the offsetting continues calendar severely today Our we’re business. wins Arizona steady currently Lines the to that’s milestones our – at impact is go saw payload year Tempe, one’s we venture, the we add business marking One with well that first leading the the execution. the we Systems targeted $X the in especially here on are the launch into business, half We acquisition payloads. But IFC Air of whole that patterns, the customer over IFC with commenced markets. them quarter our had on long-term with closed our first We partially Delta seen the our EBITDA ViaSat-X, since Government our specifically important milestone was the for the new had first strong The of – Airlines. Americas the one Commercial focus strategies global COVID-related third is year and and sets that mobile achieved travel Networks a of for antenna important travelers line XXX pre-pandemic of now in that another vertical awards eye in geographies if continued really had. new, our out business challenges KLM added by normal but reflect We expand track. preparing and other as installations customer joint Dutch the And press some a new trend integration sent Boeing, revenue grow numbers, opportunity that on already going early add our day. performance execution to with on kept had We’ve with a These our we business really, completing payload other terminal over the IFC The Royal XXXX another And area. of achievements under we level European by RigNet towards you we contract, noting. aircraft consumers a of what to backlog. making and performance, and beginning, but below we’re good COVID same our another very aircraft had new actually pandemic. which billion and in created release, in on each we remains and

long-term our we double Despite believe, EBITDA support ViaSat to on we’d more COVID-XX, than challenges XXXX. kept targets. financial double FY also We and revenue the by track

three We’re to two ViaSat-X still of free targeting, second turning after flow quarters satellite. positive cash the our launch

the question first So ahead with into jump go operator. let’s that, and

Operator

Ric [Operator from sir. with you, Prentiss is first question James. Our Instructions] Thank Raymond

line Your open. is

Ric Prentiss

morning. Hi, Good good everyone. afternoon,

Rick Baldridge

morning. Good

Ric Prentiss

Couple of questions.

question, First on to schedule. want the just I talk

XXXX stuff. for You calendar lay issues an mentioned can in-service? track APAC early on And over year Americas that with you EMEA and launching XC COVID-XX over kind are of the on out Any over on the thoughts launch. supply the then XD the for ViaSat-X track when chains, construction

Rick Baldridge

the pretty were one. bus They that – let everything’s chain, mean, schedule, there coordinated, impacts. of speak that’s, the got of we themselves, I ready. guys Well, I I’ll Boeing, hit most has those won’t supply first that there for speaking, is confidence. we’ve for last the predict But lot but most this any understand a pretty payload. I us well be definitely that generally year other hard mean, COVID it can’t on

if it anything happened. So, we anything, don’t expect but,

the about behind as second range behind, like six months to up. one thing is be now, before, a only right behind which second is happened payload, second one. in payload year to we’ve first The third The the the one. is said six- the here moved It’s that’s used a nine-month more

current the that’s So, schedule.

Ric Prentiss

in-service long about think into Great. dates? And orbit? versus we should it’s launch How how long risen

Rick Baldridge

officially think don’t I providers varies them, for Well, launch each our of launch one we’ve provider. and it by announced

closer we and terms of, idea after second a is than it as one. to one we’ll little a on in bit you a that’s the has different probably we get test the about The probably a launch better the same, get So, one profile. first because each longer orbit the and third raising orbit give for is little for

Ric Prentiss

your government, those of billion are or your a you those sense. a someone and you like partners that competitors about awards, big when think guys many Makes with many on are you bidding who for think you those about Obviously, a else board? in ever solo bidding, bid? How joint are putting awards the how awards on up in, going year keep and bigger in contracts the

Rick Baldridge

Well, we’re the cases, prime. in most

do So, sense. other where we We We’ve to partner We with other. a done. and we’ll product it to we and them with do case, our obviously have people, to supplier partnership partner so that components mixed there provide makes we’ve, Harris Australian on contract, work us. business in

are So, most but of A them prime. we’re lot competitive. our awards of

Rockwell. Data we’re we bid we so as with as joint and and Link other venture between with Solutions against is, BAE compete well So, other compete the drivers BAE, thing obviously the the competing big

– Small Tactical competing. every So really that’s not don’t Terminal, on we competitive cycle. we’re

product. we’re solution alternative potentially We’re the or way an with but that ones competing do alternative it, in only any case to with an

invested non-development item, our So, with money and the own that. we’d develop

has that’s we’re profile and didn’t old XX JTRS, really through of old JTRS filled it’s, we it a the where and really fixed piece competitive then ours it terminal Link BATS-D. the airborne And So, products was like the handheld make the that competes. else with nobody maritime the don’t, terminal

these there can we’re F-XX, prime go it’s from sole so into F-XX If not ultimate this I but the contractor. So product they’re in a that’s lot us. of out we’re the the cases, procuring source, and source or

Ric Prentiss

what that me for April Rick made RigNet And with revenue month sense. on it Makes How think you now JV. far you acquisitions it last a European just for called as additive as we had systems them the and going the EBITDA out and that once I was now. the added fold XX, about should you you’ve into about, your means one think

Shawn Duffy

line think on top EBITDA contributing in about or And the $XX Ric, I million Yes, hey year, so. combined another million. I be $XXX that. may probably on can line jump next maybe about

Ric Prentiss

Okay. And that’s for like XX months on.

Shawn Duffy

Around that. Yes.

Rick Baldridge

looking are the other there to about year, but year. we’re synergies at one The much them of first each fiscal way each pretty of costs kind offset and integration there’s is, and these transactions, in getting costs, in this thing think an the implementation other’s of also

Ric Prentiss

between guys they go some Right. going it’s report? Right. different there or And – Services the into is Sat are mix that you segments then to

Shawn Duffy

RigNet from There’s to go going Commercial. The bit majority product into of into go that on a the side Services. Sat over is or

to If XX% around it less than, is, or XX% of number. that you of think the

Ric Prentiss

guys. Thanks. Appreciate Perfect. I’ll you well. say,

Rick Baldridge

Thanks, Ric.

Operator

Simon Stanley. Flannery Morgan Our next with question is from

line Your is open.

Simon Flannery

you – we so be terms is In the of little bit but your Thank is you recurring satellites point? or how of pretty come the revenue growth backlog color service much about it talked that moving ViaSat-X ramp Shareholder going enter circled a Great. much. opportunity us this what or service. in of on Letter, across, a think that to where constellation as as you traffic, revenues on in more service recurring significant give and So, do in Could about the sort how you that visibility sales in conversations three firmly at about opportunity?

Rick Baldridge

stuff guys unlike instance, not was of that before platform don’t we with, small comes but do for get and ground in done fixed XCI for we go. I contracts bandwidth an of with out launch, and in it’s Mostly a up as subscribers that connectivity before service we’re signing meaning mean, vehicles, from that not not the they what I them, maritime lot example in-flight operators, satellite [ph] we and their business getting that. do previously, those We’ve space, this consumer Canada subscribers that. Telesat,other and Simon, So this sell with it’s arrow, subscribers don’t getting mean, that some Telesat markets but

direct. we in most We’re are – cases

the As and we increase we something as demand think than they’re better in might this wholesale some U.S. the where can a sell areas parts in in there’s, market where be these area quite though some to and will market see we before. by demand we we where areas there bit we capacity, what share get built deals, that’s there outside see a marketplace, and where one bringing be satellites make of are, so the we with but

So like, they operators, do. presale before the going not they I’m their what but launched not satellite it, ever it’s two-thirds may we other does to not mention of

Mark Dankberg

[indiscernible] hand, that the we X,XXX have On of sign-off, government do other have contracts. one thing we

as here lot as a far helps that So capture of that fairly to growth where that’s we’re is predictable do are forecast and difficult us will those the looking be. revenue to already

Simon Flannery

that Yes, that you of those timeline of of makes you sense. a planes Delta, what’s will guess, and do today with have to part sort it, see online? you I you do coming think IFC added backlog

Rick Baldridge

next over the so what XXX think, those XX we I over months. aircraft of deliver about

Shawn Duffy

Yes.

Rick Baldridge

that Yes, of something aircraft. like the Delta

Simon Flannery

Okay, and then after? year balance the

Rick Baldridge

Yes.

Simon Flannery

And to latest improve. We any better got our many heard lot on, about and we Great. in see of talking the data. things continue a color March TSA perhaps companies then

is So this continuing the say QX? through from IFC current to that activity to fair is levels it accelerate of in quarter

Rick Baldridge

that the of, remarks the number and right not very is my seeing are that increase now. of they’re number flying. consumer. by opening a of – aircraft slow kind they’re that business They’re in of definitely, in I – actually month-to-month return seeing in in passengers travelers Yes. But most service it I’ve we’re are given there,

Simon Flannery

that take bandwidths seeing more use you rates the more evidence are in to Rick, past? than higher consumers to are have Right. maybe starting

Rick Baldridge

rates seeing seen. than similar We’re take what we’ve

a if percentage people leisure you also. for passengers, think that the remember Just of travel business of

they’re for mean traveling So, traveling. while they’re doing business not just not they’re it’s because business. Doesn’t

Simon Flannery

Yes.

Okay. Great. Many thanks.

Rick Baldridge

Okay.

Operator

question the JPMorgan. line next from Our Phil is Cusick with of

Your open. line is

Phil Cusick

thanks. Hey guys,

first With about year? remind how the CapEx two shipping think us the next ViaSat-X toward payload of in soon, the should getting completion, we and next the

Shawn Duffy

Sure. that one. I take

year had just right, this couple trying the a things, capital a shift say one little schedule. that up to against one that, purposely bit our is not would I of we to remember So,

then I that’s we’re So, And think thing in last in year before one launch. to that mind. keep

rate it’s to on capital million, that’s I backup, the $XXX to So up start quarterly the good range. as a think in probably but XXXX, going key about around

Phil Cusick

seen we you’ve And and about second, Okay. that you last in and headwinds if talk then seeing sales can business defense year, over the government can those take start the the really easing are off? business that

Rick Baldridge

lot People things. or were those them related they types or simple get of couldn’t the happened now precautions. needed you have been and to like of been contracts to mean to you of people that No, an to what’s if saying utilize, time and now issue given given out most to accept the they vaccinated that have has CDC I a review And, networks come access And of and were, physical that have contracts adequate some to don’t that they’re vaccinated. they have those their things. fully

returning would over next things we are remainder to of months. That’s expect that the normal So, few certainly year. the the

seeing got but difficult periods it we over awards see in still was of We’re – than a we’ve bit more a billion, quite for $X previous obviously, sure.

Phil Cusick

in next it I been seems logistics and not down just know but headwind, toward the but yet, normal of like signing contracts normal months? there. few big That’s Right. quite it’s a getting

Rick Baldridge

good I characterization. think that’s the

Phil Cusick

things sort it’s to gradual? of go, picking we up, next or to quarter this need backlog ready that that more real going is to that and a there of signed is quarter, or whether are be be see And

Rick Baldridge

are government expect would reports pretty lumpy. The that’s always to I going continue.

was look contract if this So, ready timing, orders were you those year, just area. to there good some front have in go. end really we that Because things at

continued I it be think so see to lumpy. we’ll And

Phil Cusick

that a And the pretty Can for business synergies defense you Thank civilian last there you Okay. single aren’t on about recently having a was clearly one, that in help then getting do or under you. business you government makes can you consider the roof? multiple of headline think the splitting a selling deserve. us that market business may and or anything what businesses the sense the are the how

Mark Dankberg

is might a be your of both these complicated different synergies services, companies in the of government, of that really can where they bandwidth low, in having a because in a form commercial types significant There’s contract, use that very to need. Yes. and government they And amount blend One user are broadband the multiple factors. is business. all a if your in to you look, you concentrated really and utilization – have they I of have but you certain efficient want with contracts, have if move have areas, fulfill that doing the still don’t bandwidth available places that total get of large And fraction you’re resources. around of will good you have is demand fix it’s to government and lot a to commercial easier large base of

you own one contracts are the license. seen as we effects same of get with sources use the over ones we’ll and that’s the primarily the – of and over that have we So in absurdity and when our in the that government bandwidth go Americas which already have, ViaSat-X, that

down often that that, way you was The especially really satellite important that’s other augmentation an networks if at evolving. are is area the networks are look in Government terrestrially.

really this used plus that the having terrestrial both. opportunity important to networks are So optimize interesting networks satellite tactical alongside land gives out an us those it of

us the compete market. of do. the got who antennas capabilities combination for do an someone organic Then capabilities access good really more trends to and we that a way to it’s in broadband So effectively

So, in we those, market. find in the anything

Rick Baldridge

like have the those lot is, we this, And our we don’t add Only, other business and would I think think we’ve there government I had like been I times it of it, credit a transitory. I like are thing for there’s when get don’t it’s times seems transitory. when there but

Phil Cusick

Thanks Okay. guys.

Operator

line Securities. with B. from is Our Crawford next the question of Riley Mike

Your open. line is

Mike Crawford

you. Thank

in be where of On extension saw Services in you your for Nigeria. looking landing got What rights rights about the the progress other globally? we we regions, should landing Satellite that side, continued

Rick Baldridge

about that? talk to want you Mark,

Mark Dankberg

times we’re partner tele we’re in So using now, basis is what a global lot bandwidth markets. doing of on right

Nigeria, example where up that. And the so is a specific that network one for set we in

won’t – also landing the get on ViaSat-X. I think so in ViaSat-X in us always with probably announcements will Americas the that areas that that, we some drive And make we’re place, can depending that be those factor own some you’ll will because rights really, that’s landing in partner of see main is the getting specific be we more rights Also, market. the to as those around going this coverage that areas that coming. areas, do of our first the not

Mike Crawford

years, goanna versus say ViaSat-X for bit then Okay, more? about how how the broadband this satellite the thank is of Networks, that’s then that would there, of you payloads XXXX this next shift current you. And and to couple on your satellite much a equipment to others can so dominate talk Commercial fiscal like and antennas own year, and starts users once or for Web be over One little

Mark Dankberg

biggest strong essentially year see the this areas ground really antennas, full a last Earth satellites. which we we motion One observation forms continuing where of segment different for and is of had in awards are

that – space, a new So to things of its space communications observation. Paramount lot new in with of does that work, Earth is a and that relate it

So there’s demand a for more the ground for that. networks lot

types custom received And so of products. is that orders that we’ve for of those some

Another it’s growing none pretty are area well government, but components that little used a of two in growth and Commercial there this systems, there that’s there for the simply opportunities that's both space there are connectivity, of that in bit coming been swap such well. equipment is are Networks, government growing as those parts year contributed But are to well. in-flight the commercial in – as fastest

Rick Baldridge

the And ViaSat-X well, next two over of that say, that’s the segment overall from going through segment, ground years, occur standpoint, next But an that’s employment, standpoint. from I’d that, to years, can at and you the is Mark’s, a half related payloads external Mike over right. over look cost few it just

Mike Crawford

that said But more. synergies offset are quantify couple this a year? this going costs to for One, can back the just then RigNet, And of integration year. you. you Thank kind you Okay. to

Shawn Duffy

Yes.

about, are you longer what think as opportunities, get we free and bandwidth that I I would out, look some So, think device forth, further so there constellation. as

what it’s all On traditional would really the of be those associate to kind with, the costs, term, company near elements in I going public G&A.

Rick Baldridge

to the on range. million $XX Probably, million $XX

Shawn Duffy

range. that’s Yes, good

Rick Baldridge

Mike.

Mike Crawford

generated of carved data at and then, Government today from order one that was with all what Government of is, for revenue if like that potentially a Thanks. magnitude business the as profitability not question you looked I be would me, your links could last was in think just Systems Systems is that Okay. whole. if mostly, In case And compared out? which do be business,

Rick Baldridge

I set a goal.

now, think Mark plan that, utilizes have we that business that we’re right that an not, of So, after integrated all I like said, stuff.

So, having we’ve that about or talked third of business and and modems security little like our a area, then close And a bit something and rest then before, pretty roughly cyber area, to, a area. in third we’re that of to that kind our higher in satellite, and kind stuff. the services the and of stuff

like But disclose of So don’t really pieces. that. it’s kind split, the

Mike Crawford

Okay, all right. you Thank very much.

Rick Baldridge

Mike. Thanks,

Operator

[Operator Instructions]

Rick Baldridge

call take don’t more more – Okay. We’ll take question. one why yes, – one and we – one more

Operator

Thank you, sir.

from last line Quilty the of Quilty with is Chris Our Analytics. question

line Your is open.

Chris Quilty

on were couple that or to commentary the in of wanted points follow I just Thanks. of a couple up commentary.

with One margins will expect should end of as down we of towards pressuring them you or to the the margins year, associated that the indicated around before pressured quarter of see be the business then? back some that the start fourth roll mostly we out should services Shawn, in costs the ViaSat-X, the likely

Shawn Duffy

ViaSat-X, curve those tend costs as think is I to bring do the scale When Yes. up but for that network. is coming or on they ramp costs the we the about startup

right, the get, in kind and so – bit on a they of you’re heavier they’re then trickle backend. get And yes, little earlier

Rick Baldridge

yes, they’ve it’s it’s think Shawn they’ve So, I a started, right it like started, and described already like ramp. exactly already

accelerates biggest that quarter the and quarter fourth certainly the by so will timeframe. be And in far

will of quarter will other launching But ramp second as we we fourth As closer the and the land but and already satellites way rings heavier tests, we just up fiber that to we’re up wait quarters. got in, than start, the putting be we’re go nodes last to we’ve running throughout till and can’t satellite we’ve and get going, some lining access definitely and year. the the started,

Chris Quilty

at layoff people of as Understand of on back people be a also it. the going the And also you a to think had start bringing you’re business presumably I couple some hundred side, scales. of the COVID, IFC those

into play compression? also that the does so And margin

Rick Baldridge

No, well hit, not I never that’s left area were half We that I’d the administrative think were because mean, the say, only gets in functions. employees so. I just don’t area. over one that that

in So, much the appropriately, preserve XX%. the as we as operating like well And it possible. try to people was are actually space more was it that

The add we back we’re employees, definitely But areas would efficient can. us won’t definitely those as adding be the to, we forward business. as that plan be go we the will in to lag get hiring. So, to but

Chris Quilty

know. to good That’s

some On play Link of us comments pretty you’re give favorable proliferated the the in terms Force government has developments? Can side, at that the the XX program eventually is kind Space role around STA that an of in LEO. where will new made whole in timing on or other you update

Mark Dankberg

things, question? the Other developments is around that

Chris Quilty

Yes.

LEO XX, STAs plans? be Link the the might Specifically fit how into and that effort

Mark Dankberg

Yes, different there’s kind can the as is capability, of Link are the And is really organizations that applications and the them communications, perspective, for for general seen I into horizon see to be add a, XX as long XX, or are demand. on that the part XX in Link so bring up other connectivity new just more you’ve portfolio. parts, side, short incorporating of of transition think used applications links applications. just and From also Link with opposed that the There a either multiple is over to especially perspectives haul be specific DoD transmission dried recognition forward from the in throughout which team looking like the which it. usual STA interesting

for there’s innovation portfolio or space sides connectivity the that than relay and just So, I’d with, say determined. on side broader definitely working both where to application the be and on one we’re more of just the that, element opportunities

is that past and a the talk as the well team in participants really have we like a interesting a it’s rapid like I as is about those about team things is and number, aircraft. four sensors include point growth weapons, in think [indiscernible]

of had we XX Link participants I and it do I in ops answer there’s And there. good creates, I broader driving participants array So, for hope applications space. interesting question? think haven’t at each your a

Chris Quilty

to number. me a give you wanted I Yes.

Mark Dankberg

No.

Chris Quilty

being I’m honest. just

Okay.

ask So, guess quarter. ViaSat-X is which my question in is, onto final I I new hardware And services $XX need Ku-band or think a most that had of I question, the ArcLight commentary record million migrate online. once stuff from around, that contract you do network also one was the is, ArcLight vehicle government let me ViaSat-X a revenue, to big do And new you aircraft the today driver comes is think some you at Ku-band put legacy new KA. being a

Mark Dankberg

A of the over [indiscernible] years, customers that lot understand the brings. forward couple that KA that than last that, with won I of programs think the we our especially global look No. capability and

to migration most So, in some hardware hardware contemplate of explicitly those the included [indiscernible] include already components, contracts contracts well. of – all get them as those some

I’d So, say that paint customer for roads, well the that for base. the

Chris Quilty

Intelsat calling on Inmarsat call. it. Mark, Got connection. I because you a bad you’re ViaSat-X a assume It’s a like And or not in got network,

Mark Dankberg

Not about talk to that.

Chris Quilty

No problem.

Mark Dankberg

names. name to going not I’m

Chris Quilty

Thank All you. right.

Mark Dankberg

Chris. Thanks

Rick Baldridge

And last I the call. was guess that

year. So the definitely people it. Again, our We we proud this thanks performance everybody appreciate for and joining. of had

fantastic I may think are job, and over we’re tough is accelerating. to that did than have lot a everybody year been team obvious things really, the higher and really

we’re getting and confident fiscal at satellites the launch. in and So, XXXX our these we really year both a of year look outlook in and growth achieving

quarter. So, you we’ll see next

Operator

for gentlemen, Ladies and concludes this call. Thank joining. conference you today’s

You may Have day and safe. disconnect. now great a be

Viasat (VSAT) 26 May 212021 Q4 Earnings call transcript