Third quarter fiscal year 2020 marked another quarter of strong performance: revenues totaled $588.2 million, net income and non-GAAP net income increased to $6.5 million and $24.7 million, respectively, and Adjusted EBITDA reached an all-time high of $122.3 million on a 13% year-over-year increase

Awards grew 29% to $577.4 million for the quarter, reflecting continued momentum across the Company’s government, U.S. fixed broadband and commercial aviation businesses

Both the Satellite Services and Government Systems segments posted impressive quarterly and year-to-date revenue gains, with Satellite Services reaching a quarterly revenue record of $211.7 million and Government Systems delivering $291.8 million, a year-over-year increase of 19% and 17%, respectively

(In millions, except per share data)

Revenues

Net income (loss)¹

Non-GAAP net income (loss)¹

Adjusted EBITDA

Diluted per share net income (loss)¹

Non-GAAP diluted per share net income (loss)¹

Fully diluted weighted average shares²

New contract awards³

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(In millions)

Satellite Services

New contract awards³

Revenues

Operating profit (loss)⁵

Adjusted EBITDA

Commercial Networks

New contract awards

Revenues

Operating loss⁵

Adjusted EBITDA

Government Systems

New contract awards

Revenues

Operating profit⁵

Adjusted EBITDA

Attributable to Viasat, Inc. common stockholders.

As the three months ended December 31, 2018 and nine months ended December 31, 2019 and 2018 financial information resulted in a net loss, the weighted average number of shares used to calculate basic and diluted net loss per share is the same, as diluted shares would be anti-dilutive. However, as the non-GAAP financial information for the nine months ended December 31, 2019 resulted in a non-GAAP net income, 62.8 million diluted weighted average number of shares were used instead to calculate non-GAAP diluted net income per share.

Awards exclude future revenue under recurring consumer commitment arrangements.

Amounts include certain backlog adjustments due to contract changes and amendments. Our backlog includes contracts with subscribers for fixed broadband services in our satellite services segment. Backlog does not include anticipated purchase orders and requests for the installation of in-flight connectivity systems or future recurring in-flight internet service revenues under our commercial in-flight internet agreements in our Commercial Networks and Satellite Services segments, respectively.

Before corporate and amortization of acquired intangible assets.

Percentage not meaningful.

Viasat named to Glassdoor’s 2020 Best Places to Work for U.S. large employers

At the 2019 World Radiocommunication Conference, International Telecommunication Union Member States agreed to expand Ka-band spectrum availability for satellite broadband mobility services, enabling Viasat to expand its global mobility broadband offerings

Viasat, in cooperation with the Government Business Council, released the first-ever ‘State of Military Communications’ study which highlighted military technology improvement tactics to alleviate mission risks

Following the close of third quarter fiscal year 2020, Viasat announced the appointment of Dr. Theresa Wise, former chief information officer of Delta Air Lines and Northwest Airlines, to the Company’s Board of Directors

Revenues reached a new high of $211.7 million, a 19% increase year-over-year and a 3% increase sequentially, marking the eighth sequential quarter of revenue gains

New contract awards increased 14% year-over-year to $210.7 million

Segment operating income was $3.6 million, compared to a $10.2 million operating loss in the prior year period, while Adjusted EBITDA increased by 33% year-over-year to $75.1 million as fixed and mobile broadband revenues continued to scale on the ViaSat-2 satellite system. Excluding the $4.0 million ViaSat-2 insurance gain in the same period last year, segment Adjusted EBITDA increased 43%

U.S. fixed broadband subscriber average revenue per user (ARPU) reached a record $89.71, an increase of 15% year-over-year on approximately flat subscriber growth, as new subscribers continued to embrace Viasat’s premium broadband service plans

In Mexico, Viasat continued to diversify its broadband service offerings and launched residential service; while consumer engagement on Community Wi-Fi internet hotspots grew on a sequential quarter basis

In Brazil, Viasat’s participation in the Governo Eletrônico - Serviço de Atendimento ao Cidadão (GESAC) initiative continued to ramp, with over 1,500 new sites deployed in the quarter

In Business Aviation, Viasat’s next-generation Ka-band In-Flight Connectivity (IFC) system was approved for Gulfstream G280 aircraft and received Type Certification for Embraer Praetor 600 aircraft; Viasat’s dual-band business aviation IFC system also received Supplemental Type Certificate for the Bombardier Global 5000/6000/GEX family

In Commercial Aviation, IFC service was active on 1,379 commercial aircraft – up 23% year-over-year with a gross annual passenger opportunity reaching over 250 million people

As reported during Viasat’s prior earnings call, in early third quarter of fiscal year 2020, Viasat was selected by Brazil’s Azul Airlines to install IFC equipment/service on more than 100 combined Airbus A320neo and Embraer E195-E2 aircraft; additionally EL AL Israel Airlines committed to go full fleet with Viasat, adding Viasat’s latest equipment to its new Boeing 777 widebody and remaining Boeing 737 narrowbody fleet

Following the close of third quarter fiscal year 2020, Viasat:

Expects to install its IFC equipment on over 690 additional commercial aircraft under existing contracts, with rising momentum seen in international aviation markets as passengers increasingly value an ‘at home’ internet experience while in-flight

Announced expansion of its third-party platform engagement program, with the addition of fuboTV, one of the first live TV and sports streaming services to expand distribution to the U.S. aviation market

Fiscal year-to-date, Satellite Services segment reached record revenue levels with operating profit and Adjusted EBITDA performance increases compared to the same period last year reflecting year-over-year impacts similar to those seen in the third quarter of fiscal year 2020

Revenues were $84.7 million, a 33% decrease year-over-year, reflecting the year-ago period’s accelerated IFC equipment installations for American Airlines; on a sequential quarter basis IFC terminal deliveries were up despite the continued grounding of the Boeing 737 MAX aircraft

New contract awards were at $134.2 million, a 25% year-over-year increase

Segment operating loss was 50% higher and Adjusted EBITDA was 80% lower compared to the same period last year due to expected reductions in IFC terminal deliveries and higher research and development costs associated with the ViaSat-3 space and ground segments

Continued progress made on the ViaSat-3 program with multiple project milestones being achieved including critical unit deliveries; integration and test activities on both the ViaSat-3 (Americas) and ViaSat-3 (Europe, Middle East, Africa) satellites; and successful completion of the Preliminary Design Review (PDR) for the third ViaSat-3 (Asia Pacific) satellite

Began deployment of the U.S. and European ground networks for the first two ViaSat-3 satellites and initiated siting work for the Asia-Pacific ground network

Completed successful over-the-air test antenna switching on Viasat’s second-generation hybrid Ku-/Ka-band aviation antenna, highlighting antenna readiness for global aviation opportunities

Fiscal year-to-date, Commercial Networks segment revenue was lower, operating loss was higher and

Revenues were $291.8 million, an increase of 17% year-over-year led by expanding positions in the Company’s satellite communications (SATCOM), mobile networking solutions and tactical data links products

New contract awards were up 49% year-over-year to $232.5 million securing a positive book-to-bill ratio performance for the year-to-date period

Operating profit increased 18% year-over-year to $59.1 million while Adjusted EBITDA increased 13% to $77.8 million

Fiscal year 2020 U.S. Appropriations legislation signed into law; created new opportunities for Viasat in IFC and cybersecurity, as additional government defense funds were released

Viasat’s Multi-Mission Terminal began the UK Skynet SATCOM assurance and certification process; allowing the UK Ministry of Defence to access secure, resilient, high-speed, multi-orbit, multi-frequency band and multi-network SATCOM architectures

Viasat expanded its presence in Australia and established two maintenance, test and integration facilities to enhance in-country sovereign defense capabilities

Viasat made third-party government terminal modification kits available, enabling U.S. Department of Defense and coalition forces to use existing SATCOM terminals to access high-capacity, secure and resilient networks, without needing to completely replace the entire set of terminal equipment

Fiscal year-to-date, Government Systems segment revenue, operating profit and Adjusted EBITDA performance for the segment were higher compared to the same period last year reflecting strong performance across the segment’s product lines, especially SATCOM, tactical data links products, information assurance and global mobility/intelligence surveillance and reconnaissance offerings.

DATE/TIME:

Thursday, February 6, 2020 at 5:00 p.m. Eastern Time

DIAL-IN:

(877) 640-9809 in the U.S.; (914) 495-8528 international

WEBCAST:

investors.viasat.com.

REPLAY:

Available from 8:00 p.m. Eastern Time on Thursday, February 6 until 11:59 p.m. Eastern Time on Friday, February 7 by dialing (855) 859-2056 for U.S. callers and (404) 537-3406 for international callers; conference ID 9295872.

Revenues:

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Total revenues

Operating expenses:

Cost of product revenues

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Selling, general and administrative

Independent research and development

Amortization of acquired intangible assets

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Equity in income of unconsolidated affiliate, net

Net income (loss)

Less: net income (loss) attributable to noncontrolling interests, net of tax

Net income (loss) attributable to Viasat Inc.

Diluted net income (loss) per share attributable to Viasat Inc. common stockholders

Diluted common equivalent shares ⁽²⁾

GAAP net income (loss) attributable to Viasat Inc.

Amortization of acquired intangible assets

Stock-based compensation expense

Income tax effect ⁽¹⁾

Non-GAAP net income (loss) attributable to Viasat Inc.

Non-GAAP diluted net income (loss) per share attributable to Viasat Inc. common stockholders

Diluted common equivalent shares ⁽²⁾

The income tax effect is calculated using the tax rate applicable for the non-GAAP adjustments.

As the three months ended December 31, 2018 and nine months ended December 31, 2019 and 2018 financial information resulted in a net loss, the weighted average number of shares used to calculate basic and diluted net loss per share is the same, as diluted shares would be anti-dilutive. However, as the non-GAAP financial information for the nine months ended December 31, 2019 resulted in a non-GAAP net income, diluted weighted average number of shares were used instead to calculate non-GAAP diluted net income per share.

GAAP net income (loss) attributable to Viasat Inc.

(Benefit from) provision for income taxes

Interest expense, net

Depreciation and amortization

Stock-based compensation expense

Adjusted EBITDA

Segment operating profit (loss) before corporate and amortization of acquired intangible assets

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Stock-based compensation expense

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Equity in income of unconsolidated affiliate, net

Noncontrolling interests

Adjusted EBITDA

Segment operating profit (loss) before corporate and amortization of acquired intangible assets

Depreciation ⁽³⁾

Stock-based compensation expense

Other amortization

Equity in income of unconsolidated affiliate, net

Noncontrolling interests

Adjusted EBITDA

Depreciation expenses not specifically recorded in a particular segment have been allocated based on other indirect allocable costs, which management believes is a reasonable method.

The balances as of December 31, 2019 reflect the Company’s adoption of Accounting Standards Update 2016-02, Leases, commonly referred to as ASC 842.