Justin Lang

Justin Lang inquired about the merits of a strategic structure where the U.S. government acts as an equity investor in a defense prime's IPO, in the context of Viasat's strategic review. He also sought clarification on the revised CapEx outlook, specifically whether the reduction reflects a push-out of investments into 2027 or efficiency gains.

Answer

Mark Dankberg, Chairman and CEO, commented that structures involving government equity investment are interesting if they improve competitive position and shareholder value, especially if such opportunities are available internationally, and these are considered in Viasat's fundamental strategic capital structure evaluations. Gary Chase, CFO, clarified that while $40 million of ViaSat-3 spend is indeed pushed into fiscal year 2027, the remaining CapEx reduction is primarily driven by efficiency gains, not cuts.

Justin Lang from Morgan Stanley inquired if the strong growth in government satcom would continue in fiscal 2026 and asked how to reconcile the deleveraging priority with the forecast for a modest uptick in leverage.

Answer

Chief Financial Officer Garrett Chase responded that government satcom growth is expected to taper but will still be up slightly, remaining a significant high-margin contributor. He explained that while leverage may tick up slightly in fiscal 2026 due to the timing of major capital expenditures, the company will be on a much different deleveraging path in subsequent years as it achieves sustained free cash flow and the large ViaSat-3 spending cycle concludes.

Justin Lang asked for general parameters on Iridium's acquisition pipeline, specifically whether the company is looking at a series of smaller deals for toeholds in new markets or weighing something more transformational.

Answer

CEO Matt Desch indicated he would lean towards more transformational deals, given the effort involved, rather than very small ones. He clarified that Iridium is not looking to radically change its business model and will likely remain wholesale, focusing on complementary business areas to take a bigger part of the value chain and use its network in new ways.

Justin M. Lang asked for general parameters regarding Iridium's acquisition pipeline, specifically whether the company is looking at a series of smaller deals or something more transformational.

Answer

CEO Matthew J. Desch indicated a lean towards more transformational deals, given the effort involved, but clarified that Iridium is not looking to radically change its business model. He stated that the goal is to take a bigger part of the value chain in complementary business areas, using the network in new ways, and that Iridium is likely to remain wholesale.

Justin Lang of Morgan Stanley inquired about Iridium's addressable opportunity within the government's Golden Dome initiative and asked for an updated expectation on the impact of potential tariffs.

Answer

CEO Matthew Desch identified Golden Dome as an opportunity where Iridium can contribute, particularly with PNT, and confirmed discussions are underway. He highlighted the Space Development Agency contract as a key relationship-builder. Regarding tariffs, he stated the impact for 2025 is now expected to be minimal (less than $1 million) due to delays and mitigation efforts, making it more of a potential issue for 2026.

Justin Wang from Morgan Stanley requested more detail on payer conversations for TearCare, including their reaction to the 24-month SAHARA data and the cost-utility analysis, as well as the potential target reimbursement level.

Answer

CFO Ali Bauerlein characterized payer discussions as positive, with high respect for the company's clinical and health economic data, although the final payment rate is still uncertain. CEO Paul Badawi emphasized that the SAHARA trial was specifically designed for payers, demonstrating superiority over the standard of care and long-term durability, which he believes provides a compelling case for coverage.

Justin Lang from Morgan Stanley asked if the economics for the U.S. large reactor opportunity would be similar to those in Eastern Europe and requested elaboration on the company's opportunities in the drone market.

Answer

President, CEO & Chair Lynn Bamford stated that she expects the economics for domestic and European large reactor projects to be similar. On drones, she highlighted Curtiss-Wright's long history and broad portfolio of compute options for various UAV sizes, as well as the significant opportunity in the growing counter-UAS market.

Justin Wang of Morgan Stanley asked why STERIS's ethylene oxide (EO) facilities were not granted regulatory relief from NESHAP compliance and how this development affects the competitive environment.

Answer

Daniel Carestio, President & CEO, stated that STERIS did not apply for the two-year extension because it is not needed. He explained that the company has been proactively upgrading its facilities for four years and is confident in its ability to meet compliance deadlines. He views the relief for competitors as not materially impacting the competitive landscape.

Justin Lang asked for clarification on the drivers behind the change in CapEx guidance, the reason for a sequential decrease in HDX shipments, and more details on the mentioned delays in MilGov contract awards.

Answer

CFO Zachary Cotner explained the CapEx guidance change was due to accelerating some fully reimbursed spending for the FCC 'rip and replace' program into 2025, with no impact on the net figure. CEO Christopher Moore stated the HDX shipment decline was anticipated, as 2025 is a 'build year' focused on STC development ahead of the 2026 commercial ramp. Regarding MilGov, Moore attributed award delays to the slow nature of government contracting cycles but noted strong international growth and an expected pickup in Q4.

Justin Lang asked for more detail on emerging near-term opportunities and trends in the Military/Government business, citing rising defense spending in the U.S. and Europe.

Answer

CEO Christopher Moore confirmed the company is seeing increased demand, particularly from overseas markets in Europe and Southeast Asia seeking more sovereign control over their networks. He noted the DoD is focused on a tech refresh away from legacy narrowband systems. Moore stated Gogo's strategy is to leverage its easy-to-install commercial platforms like HDX and FDX to provide cost-effective, high-performance solutions to this growing market, expressing strong optimism for the segment.

Justin Wang, on for Patrick, asked for early surgeon feedback on the NOP Access platform and how it integrates with the broader NOP ecosystem.

Answer

CEO Waleed Hassanein described early user feedback on NOP Access as "off the chart." He clarified that NOP Access is the customer-facing portal of a single, seamless digital ecosystem that includes the NOP Connect back-end and integrated logistics and mapping functions.