Viasat reported a jump in quarterly revenue Wednesday, as the company continues to investigate its recent satellite malfunction and explores options to make up for some of the service it expected to add this year.
The company, which reported fiscal 2024 first-quarter results, wrote in a letter to shareholders that the problem with the ViaSat-3 Americas communications satellite disclosed last month “creates unanticipated challenges that we are already addressing.”
“We are currently working closely with our antenna supplier to assess the status of the antenna,” Viasat Chairman and CEO Mark Dankberg and President K. Guru Gowrappan wrote in the letter.
Dankberg added on the company’s earnings call that Viasat expects to give an update on “corrective actions” for the the satellite at the end of its second quarter. Viasat has approximately $420 million in insurance on the malfunctioning satellite, “which is nearly half of the net book value” of ViaSat-3 Americas, putting its value at about $750 million.
Viasat stock rose about 3% in after-hours trading from its close at $28.20 a share.
Viasat brought in $780 million in revenue during the quarter, a 36% increase compared to the same period last year.
It reported a net loss of $77 million for the quarter, wider than a net loss of $21.6 million a year ago. It cited higher interest expenses, as well as costs related to its acquisition of Inmarsat. As of the end of quarter, Viasat had $5.5 billion in net debt, with about $2 billion in cash and equivalents.
Viasat said it is investigating the root cause of the ViaSat-3 Americas problem to determine how to avoid the issue on its upcoming ViaSat-3 EMEA (Europe, the Middle East, and Africa) satellite. Beyond a problematic reflector, which appears to have been made by Northrop Grumman, Viasat said the Americas satellite’s other systems “are performing as expected, or better.”
The company said it expects “to gain additional bandwidth from the existing in-orbit fleet” through improvements to its ground network. After its acquisition of Inmarsat, Viasat has 22 satellites in space.
“We believe these augmentations will allow us to provide the high-quality experience our mobility customers have come to expect and allow us to support our near- and intermediate-term growth objectives,” Viasat said.
While broadband service to U.S. residential customers makes up about 13% of Viasat’s current revenue, the company expects “that percentage will decline” after the satellite malfunction. Part of Viasat’s mitigation strategy is to “assure service” to high demand and key customers, as growth in VIasat’s fixed broadband business is expected to be delayed.
Despite the issues, Viasat forecast that revenue will grow further in fiscal year 2025.