ViaSat, Inc.

Please stand by, your program is about to begin. My name is Franz and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to Viasat's fourth quarter and fiscal year 2025 earnings results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be question and answer session. I would now like to turn the call over to Ms. Lisa Curran, Vice President of Investor Relations Ms. Curran, you may begin your conference. Thanks, France.

We will present certain non-GAAP financial measures on today's call. Information required by the SEC relating to these non-GAAP financial measures is available in our Q4 fiscal year 2025 shareholder letter and today's conference call slides that are available on the investor relations section of our website. During the presentation, we will describe certain of the more significant factors that impacted year-over-year performance. We will also make forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we expect or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, and actual results might differ materially from any forward-looking statements that we make today. Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC pilings and annual report on Form 10-K. These forward-looking statements speak only as of the date they are made, and we do not assume any obligation to update any forward-looking statements. With that, I'll turn it over to Mark Dangbrook, Chairman and CEO.

Good afternoon, and thanks for joining us today. With me, along with Lisa, We have Gary Chase, our Chief Financial Officer, and Sean Duffy, our Chief Accounting Officer. As always, we encourage reading the shareholder letter and referencing the slides we posted on our website earlier this afternoon for more details. Our fiscal 2025 was a pivotal year, creating the foundation for multi-year accelerated growth and sustained cash flow through increased earnings and decreasing capital intensity. We're pleased with our operational performance and very appreciative of the accomplishments of our team towards our strategic goals that we set for the year. We met or beat our guidance metrics, achieved record new contract awards growth, made significant progress on our capital structure, integrated the first Biosat-3, Biosat-1 into our global network, demonstrating the expected benefits to user experience and network efficiency. We completed critical milestones on our satellite roadmap, earned an inspiring reception to the new multi-orbit Nexus Wave maritime broadband service, introduced several network optimization innovations, delivering substantial efficiency and user experience gains. We reached new win-win third-party network agreements, including using LEO capacity to reduce latency for all mobility users while also enhancing capital efficiency. And we made organizational changes to further improve speed, agility, and greater structural optionality. We enhanced financial transparency with new reporting segments and accompanying disclosures. We're also bringing major innovations to our unique and valuable spectrum rights in the mobile satellite services market segment at LBAND and the new MSS service capabilities they enable for our customers. Working with the Mobile Satellite Services Association, or MSSA, We're laying the foundation for an open architecture, standards-based ecosystem for non-terrestrial networks, or NGN, extensions to the 5G and 6G networks of the future. Existing and emerging 3GPP standards foster interoperability for consumer mobile devices between terrestrial and a single individual satellite network. The MSSA's framework builds on those standards, enabling choice, scale, and substantially lower costs by creating an approach to NTN interoperability with and among all of the participating space networks. That approach, as adopted by space and terrestrial ecosystem participants, means mobile phones, cars, drones, and virtually any standard compliant device can use a much more cost-effective aggregation-coordinated satellite spectrum globally versus depending on a single capricious constellation. Piosat is focused on three major LBAN business objectives. First is substantially reducing capital and operating costs for mobile satellite services, non-terrestrial network, open architecture, and standards-based space systems. Second, supporting, transitioning, and evolving our critical government, maritime, and aeronautical safety services to the enhanced capabilities they'll need in the fully connected, autonomous, unmanned AI future by leveraging those next generation space assets. And third, transitioning our nascent, global, direct-to-device NTN business from the existing narrowband Internet of Things emergency and messaging standards to the emerging 5G new radio services market as new chips and devices enter and penetrate the market over the next few years. I can give a little color on a few key important topics before Gary goes into more detail on the financial and operational results. Of course, one of our highest priorities is getting FISAT 3 flights 2 and 3 into service and we've been maintaining status on our satellite roadmap. For Flight 2, the critical path has been corrective actions and testing the reflectors and integrating with the rest of the spacecraft. We are still planning to ship the spacecraft to the launch site this summer. We've adjusted the in-service date in the roadmap to better reflect various potential schedule uncertainties after we ship it. The F3's scheduled critical path goes through antenna subsystem integration, But that uses a different manufacturer design, not requiring any corrective actions. Our BISAT-3 Flight 1 usage has been scaling steadily, and we have really good results there. Even with the antenna anomaly, we have almost 2,000 planes that are served by that BISAT-3 Flight 1 satellite, tens of thousands of cumulative flights, and hundreds more every day. We commissioned a survey to compare our service on Hawaii routes, which is what that satellite is serving in particular, so we could benchmark user experience against the LEO competition. The results are very favorable and shown on page 10 of our online slides. They support our view that competition is primarily about delivering measurably reliable and consistent free Wi-Fi while also providing single interface for airlines. help manage monetize and integrate all the passenger entertainment and connectivity services we've been a leader in innovating delivering and measuring those services and are increasingly confident that the combination of our existing and planned satellite fleet with our third-party partners will compete very well in our target markets of course we can still improve by judiciously integrating Moraleo networks to both further optimize latency-sensitive traffic and improve economics, while meeting industry-leading service quality and reliability metrics. Nexus Wave, the multi-orbit maritime service, is already off to a good start. The terms of our Telesat Lightspeed Agreement, blended with our existing and forthcoming owned and third-party fleets, and our existing and planned user terminals and network capabilities can improve user experiences and extend market access for all our mobility customers, enhance our competitive position, and reduce capital intensity. Finally, we can't comment much on ongoing court proceedings related to the Logado bankruptcy. As you may know, Logado voluntarily dismissed its lawsuit against Inmarsat when faced with our motion to dismiss. While Legato subsequently refiled a similar case in New York, our position remains that Legato's case has no legal merit and is replete with unfounded allegations of fact that are directly contradicted by Legato's sworn statements to other courts, including the Bankruptcy Court. We'll continue to vigorously pursue our claims in the bankruptcy and defend against Legato's meritless lawsuit. Until then... Any future cash payments from Legato have been excluded from our financial outlook, and they remain as upside. We exit fiscal 2025 stronger than when we entered, as you can see by our healthy backlog, growing operating cash flow, moderating capital expenses, and continued awards growth in key businesses. And we believe that growth is durable. It's supported by market fruit points in our accompanying earnings presentation. including American Airlines selecting us to scale to free Wi-Fi, several very successful free Wi-Fi domestic trials, new global airline awards, and third-party survey data showing Biosat 3 delivering world-class passenger in-flight Wi-Fi experience and satisfaction on Biosat 3 Flight 1 flights between Hawaii and the U.S. Looking ahead, we know success in fiscal 2026 is more than just getting numbers. It's about accelerating growth and securing our future. We've got a comprehensive plan for reducing capital intensity, generating sustainable, compelling, operating in free cash flow, reinforcing our competitive positions, unlocking portfolio value, and driving returns and shareholder value. As we wrap up fiscal 25, fiscal 26 is a year to position for growth. We know there will be challenges, but we're playing to win.