Viasat Inc (0LPE.L) Q3 2024 Earnings Report

Viasat delivered a Q3 FY2024 revenue of USD 1.1238 billion, essentially flat year-over-year (YoY) and modestly up quarter-over-quarter (QoQ). The gross margin stood at 32.2%, and operating income reached USD 21.2 million for an operating margin of 1.9%, reflecting disciplined cost control in a challenging revenue environment. Despite a positive operating profit, the company posted a net loss of USD 158.4 million driven by high finance charges and non-operating items; earnings per share were negative USD 1.23. Free cash flow was negative USD 33.2 million, even as operating cash flow was positive at USD 219.5 million, underscoring the capex-intensive nature of the business and ongoing deleveraging needs.

Balance sheet leverage remains a central investment consideration. Viasat reported total debt of USD 7.52 billion and net debt of USD 5.96 billion against cash and cash equivalents of USD 1.56 billion. A substantial debt repayment of about USD 1.99 billion occurred in the quarter, contributing to a liquidity and leverage challenge even as the firm generates positive operating cash flow. Intangible assets and goodwill, totaling roughly USD 4.33 billion, reflect the ongoing importance of IP, satellite design, and related assets to the business and potential impairment risk if growth assumptions slow. Near-term profitability hinges on revenue growth, successful deleveraging, and the realization of scale efficiencies in the Satellite Services and Commercial Networks segments amid competitive dynamics in the satellite broadband arena.

Overall, the QQ3 2024 results illustrate a resilient but debt-heavy pathway to profitability. The company exhibits meaningful cash generation from operations, but the combination of high interest expense, non-operating charges, and meaningful capital expenditure creates a delicate balance between liquidity and leverage. The investment thesis will hinge on how effectively Viasat can accelerate revenue growth, manage costs, and reduce net debt while navigating competitive pressures and evolving demand for satellite connectivity.