ViaSat Beats Expectations, Exceeds US US$ 100 mil. Revenues in 2Q 2014
Carlsbad, Calif., Nov. 12, 2013 — Satellite and wireless networking systems provider ViaSat Inc. has reported a turnaround to profit in the second quarter fiscal 2014 after recording double-digit revenue increases across all business segments and notable gains in its defense, Internet and commercial satellite equipment businesses.
ViaSat said revenue increased 25 percent compared to the same period last year to a record $353.9 million. Adjusted EBITDA also hit record levels and grew 22 percent year-over-year to US$ 54.4 million for the second quarter.
ViaSat's second-quarter profit was US $1.9 million or $0.04 per share, compared to a loss of US$ 7.9 million or $0.18 per share last year. Adjusted earnings for the three-month period was $9.3 million or $0.20 per share, compared to a loss of $1.9 million or $0.04 per share last year. Revenue for the quarter grew to US$ 353.9 million from US$ 282.8 million a year ago.
ViaSat’s fiscal year-to-date performance also outpaced prior year levels. Revenue increased 29 percent to $675.0 million, Adjusted EBITDA grew 44 percent to US$ 107.1 million and net income attributable to ViaSat common stockholders increased to $0.30 per share on a non-GAAP diluted basis, or $0.00 per share on a diluted GAAP basis - compared to the prior year period losses of $0.22 and $0.51 per share, respectively.
Wall Street analysts on average predicted adjusted net income of 8 cents a share on revenue of $330.8 million.
“Our fiscal second quarter again showed sustained strong growth,” said Mark Dankberg, chairman and CEO of ViaSat. “Continued steady net subscriber additions for our Exede service on ViaSat-1 are leading the way, but we also achieved double-digit revenue increases across all of our business segments, including Government Systems.”
He added the revenue growth is yielding strong EBITDA growth, even as the company increases its discretionary spending to extend and protect its technology advantages. “New order flow this quarter was solid and helps sustain an exciting blend of current and emerging products and services. We are especially looking forward to the approaching initiation of commercial in-flight Wi-Fi services over ViaSat-1 with our launch partner JetBlue,” he said.
ViaSat’s Satellite Services segment reported revenues of $100.4 million for the second quarter of fiscal year 2014, an increase of 49 percent year-over-year, pushing Satellite Services revenues to US$ 186.2 million year-to-date.
ViaSat also ended the quarter with over 590,000 consumer broadband subscribers and performed over 100,000 installations. Its quarter-over-quarter ARPU for its retail and wholesale subscribers also continued to rise, reaching a record level of over US$ 50.70 per month, up nearly 6 percent from the same quarter last year with its expanded retail subscriber base and increased service offerings.
Satellite Services segment second quarter Adjusted EBITDA was $18.5 million, which more than doubled the amount reported for the same period last year. On a year-to-date basis, segment Adjusted EBITDA grew by 175 percent, totaling $35.9 million for the first half of fiscal year 2014.
ViaSat’s commercial networks segment generated $110.2 million in revenues during the second quarter of fiscal year 2014, an increase of $23.7 million, or 27 percent, compared to the same period last year. Year-to-date revenues increased by US$ 44.9 million, or 28 percent, to $207.6 million reflecting continuing progress in ViaSat’s international Ka-band infrastructure projects, growth in aeronautical mobile broadband product sales, and development progress on a Ka-band satellite payload contract.
However, analyst Raymond James & Associates said although ViaSat hit its long-targeted goal of 25,000 to 30,000 gross quarterly additions, this achievement came at a high price as churn spiked above 3 percent from a historical level of 2 to 2.5 percent.
“All other issues aside, we expect higher churn to weigh on ViaSat’s growth and profitability for the next several quarters, putting downward pressure on the stock,” Raymond James said. The analyst reiterated its “Underperform Rating” on ViaSat.
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