A rendering of the ViaSat-3 constellation. Photo: Viasat

Viasat’s long-awaited Viasat-3 satellite is set to launch the week of April 8, the operator announced Tuesday. The satellite has completed construction and testing after what Visat described as a “long, painstaking process.” 

Viasat shared its third quarter fiscal year 2023 financial results on Tuesday, and a forecast for future revenue with the upcoming launch of its Viasat-3 satellite, alongside the cash boost from its Link-16 business sale to L3Harris. 

“When we decided to undertake the ViaSat-3 program we understood there were cost and schedule risks. Existing technology, or fewer than three satellites, could not unlock the opportunities in global mobility. We’ve faced technical, manufacturing and unprecedented pandemic challenges along the way, as did our spacecraft manufacturer,” Viasat said in a letter to shareholders. 

Repeated delays in finalizing the first satellite have pushed back Viasat’s growth projections, but the operator said it expects to achieve the stand-alone fiscal year 2025 target of doubling revenue and more than doubling adjusted EBITDA relative to fiscal year 2020 (pro forma for the Link-16 TDL sale). 

Viasat’s stock fell 14% after its financial release, as investment firm William Blair downgraded the company, citing its competition from SpaceX Starlink and Amazon Kuiper.

For the third quarter of fiscal year 2023, revenue dipped slightly, about 1% compared to Q3 in FY2022. The Commercial Networks and Government Systems segments grew revenue, while Satellite Services decreased. Overall revenue in Q3 was $714 million compared to $720 in the same time last year. 

Viasat concluded the sale of its Link-16 business for $1.96 right after the quarter ended. The sale reduces its continuing operations revenue and earnings outlook, but the revenue from the sale will make 2023 by far its most profitable in history. 

“While it reduces our continuing operations revenue and earnings outlook, we believe we are positioned to achieve our ongoing growth objectives via a greater focus on the satellite services opportunities enabled by ViaSat-3,” the company said. 

The upcoming Viasat-3 constellation will add capacity to support Viasat’s mobility and broadband areas, two key areas the company has highlighted. Visat reports increased demand and revenue from In-Flight Connectivity (IFC) across business lines. 

In Q3, Viasat said Commercial Networks revenue increased 20% year-over-year and 35% sequentially to $167 million, driven by strong orders from commercial air IFC terminals, antenna systems programs and energy products.

At the same time, Commercial Networks also grew new business awards 62% year over year to $145 million in Q3 FY2023, from continued demand for commercial air IFC terminal orders. 

In the Satellite Services segment, Viasat reported strong commercial air IFC service growth, offset by a decline in U.S. fixed broadband subscribers. Viasat expects continued declines in U.S. fixed broadband subscribers until it scales commercial service on ViaSat-3 Americas in early summer of calendar 2023. Q3 FY2023 Satellite Services revenue was $302 million, a 2% decrease year-over-year and a 1% increase sequentially. 

Viasat said the delay in its first satellite meant the bandwidth supply in the U.S. could not keep pace with rapid IFC growth, and Viasat reallocated bandwidth from residential to IFC. The new Viasat-3 Americas satellite will give the company needed capacity to grow residential broadband. 

“Bringing that satellite into service addresses our most immediate challenge, which is bandwidth constraints. In the U.S. that has caused us to steadily downsize our residential business to support the strong growth we’ve had in in-flight connectivity. ViaSat-3, we’ll be able to serve areas that are currently full and to introduce updated plans with higher speeds, more bandwidth, and greater value,” CEO Mark Dankberg said on Tuesday’s call with investors. 

Dankberg said he believes Viasat-3 will make the company more competitive in residential broadband to support streaming, which is not speed-intensive, but is bandwidth-intensive. 

The next satellite in the ViaSat-3 constellation, which will serve EMEA, Europe, Middle East, and Africa, is planned for launch by ULA in September. 

Viasat is also going through regulatory approval to acquire U.K.-based satellite operator Inmarsat. The operator said it will have more information from an ongoing U.K. Competition and Markets Authority Phase 2 review at the end of March. If the review is favorable, then Viasat may be able to close quickly, depending on European Commission approval as well.