Why Satellite Communications Provider ViaSat's Shares Are Rising Today

ViaSat, Inc. VSAT expects to reach the inflection point of sustainable positive free cash flow during the first half of calendar 2025 rather than the second half, as previously announced.

Viasat expects to report more than $3 billion of liquidity as of September 30, 2023, including approximately $2.0 billion of cash, cash equivalents, and short-term investments with no near-term outstanding debt maturities.

The company continues to expect revenue growth in the high single-digits over FY2023 for the combined company (including Inmarsat historical results in FY2023 for comparative purposes) and slightly lower growth in Adjusted EBITDA over FY2023. 

Also Read: Viasat Pockets Inflight Connectivity Service Provider Deal In North Asia

In addition, Viasat expects to grow revenue and Adjusted EBITDA again in FY2025.

ViaSat said that the integration of the Inmarsat acquisition is proceeding well and is ahead of plan. 

Viasat synergy estimates of approximately $80 million in annual operating expenses and about $110 million in annual capital expenditures are now anticipated to be fully realized in FY25, versus over an approximate three-year period as initially planned.

In an interim update on VS-3 F1 Satellite Status, Viasat determined that while the satellite payload is functional, it expects to recover less than 10% of the planned throughput on ViaSat-3 F1. 

Viasat also confirmed that it has insurance coverage of $420 million in place for ViaSat-3 F1 and will finalize its claim before the end of the year. The company will not require a replacement satellite for ViaSat-3 F1.

Also See: Viasat Faces Another Satellite Malfunction Within A Month: What's Going On?

This apart, the company remains confident that it will meet its mobility customers' current and future needs. Additionally, it is well-positioned to achieve its financial growth objectives.

Following Viasat's determination that a replacement for ViaSat-3 F1 is not necessary, the majority of the capital expenditures related to the ViaSat-3 constellation have been completed. 

Viasat is forecasting capital expenditures in FY25 to decline from FY24 and to be in the range of $1.4 billion to $1.5 billion, including completion of the final stages of the ViaSat-3 constellation and the continued build of GX satellites. 

Price Action: VSAT shares are trading higher by 10.75% to $17.31 on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.