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VIASAT INC (VSAT)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY2026 revenue was $1.141B (+2% YoY), Adjusted EBITDA $385M (+3% YoY), and non-GAAP diluted EPS $0.09; GAAP net loss improved to $(61)M due to favorable mix and lower D&A/SG&A .
  • Versus Wall Street consensus (S&P Global), revenue modestly missed ($1.141B vs $1.150B*) while EPS was a significant beat ($0.09 vs $(0.06)*); Q1 had been a beat on both, Q4 FY25 a revenue beat/EPS miss (see tables) (*Values retrieved from S&P Global).
  • Communication Services awards set a record (> $1.0B, +35% YoY) on aviation and government SATCOM; DAT backlog hit a record $1.2B (+31% YoY) with book-to-bill 1.5x, underpinning growth .
  • Cash flow execution continued: operating cash flow $282M (+18% YoY), CapEx $214M, FCF $69M; post-quarter $420M Ligado lump sum received, with plans to repay $300M Term Loan B and save ~$23M annual interest, tightening leverage trajectory .
  • Near-term catalysts: ViaSat-3 F2 launched Nov 14 with initial signals acquired, service entry early 2026 (capacity expected to double the existing fleet), supporting aviation/free Wi‑Fi, maritime NexusWave, and government demand .

What Went Well and What Went Wrong

What Went Well

  • Awards and backlog momentum: total quarterly awards $1.498B (+17% YoY); CS awards >$1.0B (+35% YoY) and DAT backlog $1.209B (+31% YoY), supporting multi-year growth .
  • Aviation strength: aviation service revenue +15% YoY with 4,250 commercial and 2,080 business aircraft in service; CS Adjusted EBITDA +6% YoY to $337M on mix and cost control .
  • Capital structure progress: received $436M from Ligado/AST ($16M in Sep, $420M in Oct post-quarter), intend to repay remaining $300M Inmarsat Term Loan B, saving ~$23M cash interest annually .
    • “We intend to take the first step soon and repay the remaining $300 million under the original Inmarsat Terminal B facility. This move will save about $23 million in cash interest payments annually.” — CFO Gary Chase .

What Went Wrong

  • DAT Adjusted EBITDA declined 15% YoY to $48M on lower Space & Mission Systems and higher segment R&D, despite InfoSec/Cyber strength .
  • Fixed services in the U.S. continued to decline; subscribers ended Q2 at ~157k with ARPU $113, weighing CS service mix (management mentioned ~150k on the call; shareholder letter lists ~157k—small discrepancy) .
  • Q3 risk: management flagged U.S. government shutdown could delay up to ~$100M of DAT awards and impact DAT EBITDA by up to ~$20M; they do not expect material full-year impact but Q3 could be affected .

Financial Results

Core metrics vs prior quarter, prior year, and estimates

MetricQ4 FY2025 (Oldest)Q1 FY2026Q2 FY2026 (Newest)
Revenue ($USD Billions)$1.147 $1.171 $1.141
Adjusted EBITDA ($USD Millions)$374.8 $408.5 $384.7
GAAP Diluted EPS ($)$(1.89) $(0.43) $(0.45)
Non-GAAP Diluted EPS ($)$(0.02) $0.17 $0.09
Revenue Consensus Mean ($USD Billions)*$1.131$1.126$1.150
Primary EPS Consensus Mean ($)*$0.0425$(0.01)$(0.06)
  • Q2 FY2026: Revenue missed consensus (–$0.009B); EPS beat materially (+$0.15). Q1 FY2026: revenue and EPS beats. Q4 FY2025: revenue beat; EPS miss. Bolded narrative: EPS beat/Revenue miss for Q2.
  • *Values retrieved from S&P Global.

Segment breakdown (Q2 FY2026)

SegmentRevenue ($USD Millions)Adjusted EBITDA ($USD Millions)
Communication Services$836.7 $336.5
Defense & Advanced Technologies$304.2 $48.2
Total$1,140.9 $384.7

KPIs (Q2 FY2026)

KPIValue
Commercial aircraft in service~4,250
Business aircraft in service~2,080
Maritime vessels in service~13,650
U.S. fixed broadband subscribers~157,000
U.S. fixed ARPU ($)$113

Cash Flow and Leverage (Q2 FY2026)

MetricQ4 FY2025Q1 FY2026Q2 FY2026
Operating Cash Flow ($USD Millions)$298 $258 $282
Capital Expenditures ($USD Millions)$248 $198 $214
Free Cash Flow ($USD Millions)$51 $60 $69
Net Debt ($USD Billions)$5.59 $5.56 $5.50

Guidance Changes

MetricPeriodPrevious Guidance (Q1 FY2026)Current Guidance (Q2 FY2026)Change
Revenue growth YoYFY2026Low single digits Low single digits Maintained
Adjusted EBITDA YoYFY2026Flattish Flattish Maintained
Net debt / LTM EBITDAFY2026 year-endIncrease modestly Decrease modestly Raised (improved leverage outlook)
Capital ExpendituresFY2026~$1.2B (incl. ~$400M Inmarsat) ~$1.2B (incl. ~$400M Inmarsat) Maintained
Operating cash flowFY2026Double-digit growth Double-digit growth; timing concentrated 2H Maintained (timing clarified)
Free cash flowFY2026/FY2027H2 FY26 positive FCF inflection Expect negative FCF in 2H FY26 due to ~$200M VS-3 completion; positive FCF in FY2027 Lowered FY26 (timing), reiterated FY27 positive
Segment revenueFY2026CS ~flat; DAT mid-teens growth CS ~flat; DAT mid-teens growth Maintained
Potential Q3 headwindQ3 FY2026n/aUS gov’t shutdown may delay ~$100M DAT awards; up to ~$20M DAT EBITDA impact; not material to year New risk disclosure

Earnings Call Themes & Trends

TopicQ4 FY2025 (Previous)Q1 FY2026 (Prior)Q2 FY2026 (Current)Trend
AI/Tech Initiatives (Encryption/Quantum)Emphasized next‑gen encryption and cyber for space; MSSA standards work DAT growth drivers: InfoSec/Cyber awards +225%; quantum‑resistant refresh cycle Ongoing growth in InfoSec/Cyber; data center crypto demand; quantum resistance highlighted Strengthening
Multi‑orbit Product Performance (Amara/NexusWave)Amara introduced; NexusWave ramp; LEO partnerships (Telesat) NexusWave surpasses 1,000 orders; sequential maritime growth NexusWave installs +40% seq.; maritime YoY growth expected by year‑end Improving
Spectrum/MSS Strategy & Equatys (Space42)MSSA, open architecture, shared infrastructure; D2D path Shared infrastructure model; avoid $5B capex, aggregate spectrum Equatys plan; >100 MHz harmonized MSS combined; focus on shared infra economics Advancing
Capital Structure & DeleveragingReduce capital intensity; refinancing roadmap Target ≤3x leverage; redeem 2025 notes; plan to repay $300M Term Loan B Ligado cash received; plan $300M term loan repayment; save ~$23M interest Positive
Macro (Tariffs/OEM Deliveries)Cited OEM delivery delays; tariff exposure ~$25M annual OEM delivery delays, grounded aircraft pressure in aviation Government shutdown may delay DAT awards ($100M) and EBITDA ($20M) in Q3 Headwinds episodic
HaloNet/Space RelayMoonlight & space relay initiatives n/aHaloNet targeted for launch telemetry; LEO‑to‑GEO relay paths Building

Management Commentary

  • “Adjusted EBITDA reached $385 million…Cash flow from operations was $282 million…CapEx of $214 million resulting in free cash flow of $69 million in the quarter.” — CFO Gary Chase .
  • “Each of the new Viasat 3 satellites is designed to enable more bandwidth capacity than our entire existing fleet…to grow in each of our franchise businesses.” — CEO Mark Dankberg .
  • “Backlog increased to a record of $1.2 billion, up 31% year-over-year…book-to-bill on DAT was 1.5x overall.” — CFO Gary Chase .
  • “We intend to…repay the remaining $300 million…This move will save about $23 million in cash interest payments annually.” — CFO Gary Chase .
  • “We estimate the [U.S. government] shutdown in the third quarter may delay DAT awards of up to $100 million and impact DAT adjusted EBITDA by up to $20 million…do not see material impacts to the year.” — CFO Gary Chase .

Q&A Highlights

  • Spectrum valuation and Equatys: management emphasized global, well‑coordinated MSS spectrum, openness to shared infrastructure with regional operators; economics and capex specifics to come as structure is defined .
  • Capital structure: target ≤3x net debt/Adj. EBITDA; plan immediate repayment of $300M Term Loan B using Ligado proceeds to reduce interest expense; longer‑term debt optimization to follow .
  • Accounting for $420M Ligado lump sum: majority to deferred revenue recognized over life of contract; interest portion flows to interest income; details to be updated in Q3 .
  • Aviation dynamics: rising free Wi‑Fi adoption and bandwidth consumption; differentiate via monetization tools and service‑level execution; OEM delivery delays and grounded aircraft noted earlier in year .
  • HaloNet: near‑term use cases in launch telemetry and space relay; architecture supports LEO‑GEO data relay and tasking to reduce latency and bottlenecks .

Estimates Context

  • Q2 FY2026: revenue $1.141B vs $1.150B consensus* (miss); non-GAAP EPS $0.09 vs $(0.06) consensus* (beat).
  • Q1 FY2026: revenue $1.171B vs $1.126B consensus* (beat); non-GAAP EPS $0.17 vs $(0.01) consensus* (beat).
  • Q4 FY2025: revenue $1.147B vs $1.131B consensus* (beat); non-GAAP EPS $(0.02) vs $0.0425 consensus* (miss).
  • Implications: EPS beat in Q2 despite revenue softness suggests estimate dispersion may tighten and move upward for EPS; management’s Q3 shutdown caveat could temper near‑term DAT expectations.
  • *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Q2 delivered an EPS beat and continued FCF generation; CS mix and cost discipline offset DAT margin pressure as backlog and awards build multi‑year visibility .
  • The ViaSat‑3 F2 launch (service entry early 2026) is a major capacity catalyst expected to materially improve network economics and support aviation/free Wi‑Fi, maritime NexusWave, and government SATCOM use cases .
  • Near‑term leverage reduction looks credible: Ligado cash received; $300M debt repayment with ~$23M annual interest savings; liquidity $2.4B (cash $1.2B; undrawn RCFs $1.15B) .
  • Watch Q3 DAT awards timing due to U.S. government shutdown; management does not expect material full‑year impact, but Q3 results may reflect delays and ~$20M EBITDA headwind .
  • Maritime trajectory improving: installations up 40% seq.; orders strong; year‑over‑year revenue growth expected to resume by year‑end as NexusWave scales .
  • Strategic spectrum monetization via Equatys and shared infrastructure could reduce capital intensity and unlock MSS/D2D economics without outsized capex, supporting medium‑term valuation .
  • FY2026 guide maintained (low single‑digit revenue growth; flattish EBITDA), but leverage outlook improved; FCF to turn positive in FY2027 as VS‑3 completion payments roll off .