Mike Raffert

Mike Raffert asked about the HaloNet system, inquiring about its timeline for deployment and its various applications, such as launch telemetry and relaying sensor data or command and control for LEO satellites. He also questioned the impact of quantum computing on Viasat's cryptographic and encryption franchises. Additionally, Raffert sought clarification on the accounting treatment for the $420 million cash received on Halloween and the additional $100 million expected on March 31.

Answer

Chairman and CEO Mark Dankberg explained that HaloNet targets several markets, including launch telemetry and space relay for LEO to GEO data transfer, aiming to reduce latency for Earth observation and relay tasking/command for satellites, as well as supporting space vehicles where government assets are constrained. Regarding quantum computing, Dankberg stated that its advent drives demand for quantum-resistant cryptography, necessitating a significant refresh in secure systems globally. He also noted that computationally intensive applications like AI and quantum computing increase demand for data center cryptos with specific requirements for networking flexibility, high speeds, low power, and quantum resistance. Chief Accounting Officer Shawn Duffy clarified that most of the lump sum proceeds from Legato would be allocated to deferred revenue and recognized over the contract's life, with the interest portion recognized as interest income, which is EBITDA neutral. CFO Gary Chase added that a portion would also be reflected in operating cash flow.