A month has gone by since the last earnings report for ViaSat (VSAT). Shares have lost about 0.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is ViaSat due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Viasat Reports Y/Y Wider Q3 Loss Despite Solid Revenues

Viasat reported higher revenues year over year, backed by healthy demand trends. Growth in commercial air IFC services, rising shipments and installments of mobility terminals, and growing demand for information assurance products supported the top line during the quarter. However, the decline in fixed broadband subscribers partially reversed this trend.

Net Income

The company incurred a net loss of $124.4 million or a loss of 99 cents per share compared with a net loss of $48.2 million or a loss of 64 cents per share in the prior-year quarter. High interest expenses owing to the debt incurred for the Inmarsat acquisition adversely impacted the bottom line during the quarter. The bottom line was wider than the Zacks Consensus Estimate of a loss of 14 cents.

Excluding non-recurring items, Viasat recorded a non-GAAP net income of $29.7 million or 24 cents per share against a net loss of $10.9 million or a loss of 14 cents per share in the prior-year period.

Revenues

Revenues surged 58% to $1.1 billion, driven by solid growth in product and service revenues. The top line surpassed the consensus estimate by 9 million.

Product revenues were $303.1 million, up from $249.3 million in the year-ago quarter. Net sales from Service more than doubled to $825.5 million from $402.1 million in the year-ago quarter.

Revenues from Satellite Services improved to $581.4 million from $302.4 million in the year-ago quarter. The nearly two-fold rise was driven by healthy demand for commercial air IFC services and incremental contribution from the Inmarsat buyout. The segment’s adjusted EBITDA more than tripled to $288.5 million from $90.4 million, backed by higher commercial air IFC service activations and a full quarter contribution from Inmarsat.

Revenues from Commercial Networks remained relatively flat at $166.4 million as lower revenues from commercial air IFC terminal deliveries were offset by incremental contribution from Inmarsat. Adjusted EBITDA came in at a loss of $35.1 million compared with a loss of $19.2 million a year ago.

The Government Systems segment registered revenues of $380.8 million from continuing operations, up 109% year over year, driven by solid Inmarsat contribution. The segment’s adjusted EBITDA from continuing operations was $129.7 million, up from $50.9 million, backed by the contribution from Inmarsat and solid product revenues.

Other Details

In the December quarter, the company reported an operating loss of $156.5 million compared with an operating loss of $39.5 million in the prior-year quarter. Adjusted EBITDA was $383.1 million, up from $138.9 million in the year-ago quarter.

Cash Flow & Liquidity

During the third quarter of fiscal 2024, Viasat generated an operating cash flow of $134 million compared with $89 million in the prior-year period. As of Dec 31, 2023, the company has $1.6 billion in cash and cash equivalents, with a net debt of $5.9 billion.

Outlook

For fiscal 2024, management expects revenues to increase by high single-digit year over year in the range of $4.1-$4.25 billion. Adjusted EBITDA from continuing operations is predicted to increase by mid-single digit. Viasat anticipates strong growth in Government Systems and Commercial Network segments with a relatively modest year-over-year growth in Satellite Services.