# Viasat Inc: Form 10-Q for the period ended Dec 31, 2024 - Company: [Viasat Inc](/companies/vsat.md) (CIK 797721) - Form: 10-Q - Filed: 2025-02-10 - Accepted by EDGAR: Feb 10, 2025, 20:53 ET - Period: 2024-12-31 - Accession: 0000950170-25-016993 - Inline XBRL: yes - Main document: https://www.sec.gov/Archives/edgar/data/797721/000095017025016993/vsat-20241231.htm - All documents and exhibits: https://www.sec.gov/Archives/edgar/data/797721/000095017025016993/ ## Figures reported in this filing Standardized XBRL line items for the period ended 2024-12-31. | Line item | Period | Value | XBRL concept | | --- | --- | ---: | --- | | Revenue | 3 months, 2024-10-01 to 2024-12-31 | $1.12bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax | | Revenue | 9 months, 2024-04-01 to 2024-12-31 | $3.37bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax | | Research and development | 3 months, 2024-10-01 to 2024-12-31 | $36.7m | us-gaap:ResearchAndDevelopmentExpense | | Research and development | 9 months, 2024-04-01 to 2024-12-31 | $108.7m | us-gaap:ResearchAndDevelopmentExpense | | Selling, general and administrative | 3 months, 2024-10-01 to 2024-12-31 | $238.0m | us-gaap:SellingGeneralAndAdministrativeExpense | | Selling, general and administrative | 9 months, 2024-04-01 to 2024-12-31 | $761.6m | us-gaap:SellingGeneralAndAdministrativeExpense | | Operating income | 3 months, 2024-10-01 to 2024-12-31 | $21.2m | us-gaap:OperatingIncomeLoss | | Operating income | 9 months, 2024-04-01 to 2024-12-31 | $56.3m | us-gaap:OperatingIncomeLoss | | Interest expense | 3 months, 2024-10-01 to 2024-12-31 | $94.5m | us-gaap:InterestExpense | | Interest expense | 9 months, 2024-04-01 to 2024-12-31 | $315.6m | us-gaap:InterestExpense | | Income tax | 3 months, 2024-10-01 to 2024-12-31 | −$11.8m | us-gaap:IncomeTaxExpenseBenefit | | Income tax | 9 months, 2024-04-01 to 2024-12-31 | −$4.7m | us-gaap:IncomeTaxExpenseBenefit | | Net income | 3 months, 2024-10-01 to 2024-12-31 | −$158.4m | us-gaap:NetIncomeLoss | | Net income | 9 months, 2024-04-01 to 2024-12-31 | −$328.9m | us-gaap:NetIncomeLoss | | Diluted EPS | 3 months, 2024-10-01 to 2024-12-31 | −$1.23 | us-gaap:EarningsPerShareDiluted | | Diluted EPS | 9 months, 2024-04-01 to 2024-12-31 | −$2.57 | us-gaap:EarningsPerShareDiluted | | Basic EPS | 3 months, 2024-10-01 to 2024-12-31 | −$1.23 | us-gaap:EarningsPerShareBasic | | Basic EPS | 9 months, 2024-04-01 to 2024-12-31 | −$2.57 | us-gaap:EarningsPerShareBasic | | Diluted shares (weighted) | 3 months, 2024-10-01 to 2024-12-31 | 128,941,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding | | Diluted shares (weighted) | 9 months, 2024-04-01 to 2024-12-31 | 127,968,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding | | Operating cash flow | 9 months, 2024-04-01 to 2024-12-31 | $609.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities | | Cash and equivalents | at 2024-12-31 | $1.56bn | us-gaap:CashAndCashEquivalentsAtCarryingValue | | Current assets | at 2024-12-31 | $2.84bn | us-gaap:AssetsCurrent | | Total assets | at 2024-12-31 | $15.60bn | us-gaap:Assets | | Current liabilities | at 2024-12-31 | $1.58bn | us-gaap:LiabilitiesCurrent | | Total liabilities | at 2024-12-31 | $10.75bn | us-gaap:Liabilities | | Current portion of debt | at 2024-12-31 | $506.9m | us-gaap:LongTermDebtCurrent | | Shareholders' equity | at 2024-12-31 | $4.76bn | us-gaap:StockholdersEquity | ## Management's discussion and analysis As filed, 89,224 characters. ### Forward-Looking Statements This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements are based on current expectations, estimates, forecasts and projections about the industries in which we operate and the beliefs and assumptions of our management. We use words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” variations of such words and similar expressions to identify forward-looking statements. In addition, statements regarding projections of earnings, revenue, costs or other financial items; anticipated growth and trends in our business or key markets; future economic conditions and performance; the development, customer acceptance and anticipated performance of technologies, products or services; the construction, completion, testing, launch, commencement of commercial service, expected performance and benefits of satellites (including future satellites planned or under construction) and the timing thereof; the impact of anomalies on the ViaSat-3 F1 and Inmarsat-6 (I-6) F2 satellites including any potential insurance proceeds that may be recoverable in connection therewith; the expected capacity, coverage, service speeds and other features of our satellites, and the cost, economics and other benefits associated therewith; anticipated subscriber growth; plans, objectives and strategies for future operations; international growth opportunities; the number of additional aircraft under existing contracts with commercial airlines anticipated to be put into service with our in-flight connectivity (IFC) systems; plans to exit certain ground network infrastructure locations in the EMEA markets and associated impairment charges and liabilities; and other characterizations of future events or circumstances, are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ materially include: our ability to realize the anticipated benefits of any existing or future satellite; unexpected expenses related to our satellite projects; risks associated with the construction, launch and operation of satellites, including the effect of any anomaly, launch, operational or deployment failure or degradation in satellite performance; capacity constraints in our business in the lead-up to the commencement of service on new satellites; increasing levels of competition in our target markets; our ability to successfully implement our business plan on our anticipated timeline or at all; the ability to realize anticipated benefits and synergies of the Inmarsat Acquisition (as defined below) and our other acquisitions, including the expectation of enhancements to our products and services, greater revenue or growth opportunities, and the realization of operating efficiencies and cost savings (including the timing and amount thereof); our ability to successfully develop, introduce and sell new technologies, products and services; audits by the U.S. Government; changes in the global business environment and economic conditions; delays in approving U.S. Government budgets and cuts in government defense expenditures; our reliance on U.S. Government contracts, and on a small number of contracts which account for a significant percentage of our revenues; reduced demand for products and services as a result of continued constraints on capital spending by customers; changes in relationships with, or the financial condition of, key customers or suppliers; our reliance on a limited number of third parties to manufacture and supply our products; introduction of new technologies and other factors affecting the communications and defense industries generally; the effect of adverse regulatory changes (including changes affecting spectrum availability or permitted uses) on our ability to sell or deploy our products and services; changes in the way others use spectrum; our inability to access additional spectrum, use spectrum for additional purposes, and/or operate satellites at additional orbital locations; competing uses of the same spectrum or orbital locations that we utilize or seek to utilize; the effect of changes to global tax laws; our level of indebtedness and ability to comply with applicable debt covenants; our involvement in litigation, including intellectual property claims and litigation to protect our proprietary technology; our dependence on a limited number of key employees; and other factors identified under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 and under the heading “Risk Factors” in Part II, Item 1A of this report, elsewhere in this report and our other filings with the Securities and Exchange Commission (the SEC). Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason. ### Company Overview We are an innovative, global provider of communications technologies and services, focused on making connectivity accessible, available and secure for current and future customers worldwide. Our end-to-end multi-band platform of satellites, ground infrastructure and user terminals enables us to provide a wide array of cost-effective, high-quality broadband, narrowband and other connectivity solutions to aviation, maritime, enterprise, consumer, military and government users around the globe, whether on the ground, in the air or at sea. In addition, our government business includes a portfolio of communications gateways; situational awareness and command and control products and services; satellite communication products and services across various frequency bands; and cybersecurity and information assurance products and services. We believe that our diversification strategy — anchored in a broad portfolio of customer-centric products and services and supported by our fleet of broadband and narrowband satellites — our vertical integration and our ability to effectively cross-deploy technologies between government and commercial applications and segments as well as across different geographic markets, provide us with a strong foundation to sustain and enhance our leadership in advanced communications and networking technologies. In May 2024, certain organizational changes were made that impacted our internal reporting and reportable segments. Commencing with the first quarter of fiscal year 2025, we conduct our business through two reportable segments: communication services and defense and advanced technologies, which replaced our prior three reportable segments (see Note 11 — Segment Information to our condensed consolidated financial statements for additional information). This new segment reporting structure better reflects our strategy following the Inmarsat Acquisition, diverse global end markets, and certain organizational changes, that allow us to better assess the operational performance of and allocate resources to our multiple business lines. Viasat, Inc. (Viasat) was incorporated in California in 1986, and reincorporated as a Delaware corporation in 1996. ### Inmarsat Acquisition On May 30, 2023, we completed the acquisition of Connect Topco Limited, a private company limited by shares and incorporated in Guernsey (Inmarsat Holdings and, together with its subsidiaries, Inmarsat, and such acquisition, the Inmarsat Acquisition). The assets and results of operations of Inmarsat are included in our communication services segment for the period following the closing of the Inmarsat Acquisition on May 30, 2023. ### Communication Services Our communication services segment provides a wide range of broadband and narrowband communications solutions across government and commercial mobility markets, as well as for fixed and residential broadband customers. In addition, this segment includes the development and sale of a wide array of advanced satellite and wireless products and terminals that support or enable the provision of fixed and mobile broadband and narrowband services. We design, develop and produce space system solutions for multiple orbital regimes, including geostationary earth orbit (GEO), medium earth orbit (MEO) and low earth orbit (LEO). The following are the primary business lines in our communication services segment: - Aviation, which includes industry-leading IFC services and wireless in-flight entertainment (W-IFE) services for commercial aircraft and business jets, narrowband safety services, and complementary aviation software services (such as cockpit, data safety and surveillance). As of December 31, 2024, we had our IFC systems installed and in service on approximately 4,030 commercial aircraft (of which approximately 80 were inactive at quarter end, mostly due to standard aircraft maintenance) and approximately 2,000 business jets with Ka-band communication services. We anticipate that approximately 1,570 additional commercial aircraft will be put into service with our IFC systems under existing customer agreements with commercial airlines. However, due to the nature of commercial airline contracts and other factors such as OEM delays, there can be no assurance that anticipated IFC services will be activated on all such additional commercial aircraft. - Government satcom, which includes various broadband and narrowband products and services for both fixed and mobile communications that provide military and government users with secure, high-speed, real-time broadband and multimedia connectivity in key regions of the world, as well as tactical line-of-sight and beyond-line-of-sight communications, Intelligence Surveillance and Reconnaissance (ISR) services and L-band Advanced Communications Element (LACE) terminals. - Maritime, which includes high-quality, resilient satellite-based broadband and narrowband communications services around the globe to commercial shipping fleets, offshore service vessel operators and commercial fishing companies, as well as NexusWave, a fully managed multi-layer connectivity service for merchant shipping companies. As of December 31, 2024, we provided Ka-band communication services to approximately 14,300 vessels. - Fixed services and other, which include high-speed, high-quality, reliable fixed broadband internet services to businesses and residential users (primarily in the United States as well as in various countries in Europe and Latin America), enterprise connectivity solutions, Internet-of-Things (IoT) and other narrowband services (such as L-band managed services that enable real-time machine-to-machine (M2M) position or high-value asset tracking), energy services, and prepaid internet services that provide innovative, affordable, satellite-based connectivity in communities that have little or no access to the internet. As of December 31, 2024, our U.S. fixed broadband business had approximately 205,000 subscribers with an average monthly revenue per user of $115. On December 18, 2024, we completed a divestiture of our energy services system integration business which was part of our communication services segment included in the fixed services and other business line. The energy services system integration business had minimal strategic synergies with our core growth businesses and was immaterial to our consolidated financial statements. ### Defense and Advanced Technologies Our defense and advanced technologies segment provides a diverse array of resilient, vertically integrated solutions to government and commercial customers, leveraging our core technical competencies in encryption, cyber security, tactical gateways, modems and waveforms. The following are the primary business lines in our defense and advanced technologies segment: - Information security and cyber defense, which comprise a variety of high-quality networking, cybersecurity and information assurance products and services that provide advanced, high-speed IP-based “Type 1” and High Assurance Internet Protocol Encryption (HAIPE®)-compliant encryption solutions that enable military and government users to communicate information securely, and that protect the integrity of data stored on computers and storage devices and include our MOJO expeditionary tactical gateway family of products. - Space and mission systems, which includes specialized design and technology services covering all aspects of satellite communication system architecture, networks and technology, including state-of-the-art government satellite communication systems, mobile and fixed broadband modems, ground and airborne terminals, antennas and gateways for terrestrial and satellite customer applications, Ka-band earth stations and other multi-band/multi-function antennas, as well as products designed for manpacks, aircraft, unmanned aerial vehicles, seagoing vessels, ground-mobile vehicles, space-based systems and fixed applications. Space and mission systems also includes the design and development of the architecture of high-capacity Ka-band GEO satellites and the associated satellite payload and antenna technologies (both for our own satellite fleet as well as for third parties), and special purpose LEO and MEO satellites and other small satellite platforms. - Tactical networking, including the provision of resilient communications designed for on-the-move or on-the-pause operations in a multi-domain battlespace with friendly force tracking and narrowband solutions. Tactical networking includes the products and services offered by TrellisWare. - Advanced technologies and other, which includes commercial communication satellite product development, orchestration of sovereign and multi-orbit solutions, products focused on emerging growth markets (such as direct-to-device) and intellectual property licensing revenues. ### Factors and Trends Affecting our Results of Operations For a summary of factors and trends affecting our results of operations, see Part II, Item 7, "Factors and Trends Affecting our Results of Operations" in our Annual Report on Form 10-K for the year ended March 31, 2024. ### Sources of Revenues Our communication services segment revenues are primarily derived from aviation services (including IFC services), government satcom services, maritime services (including narrowband and safety of communication capabilities), fixed broadband services, and energy services, as well as a wide array of advanced satellite and wireless products, networks and terminal solutions that support or enable the provision of fixed and mobile broadband and narrowband services. Our defense and advanced technologies segment revenues are primarily derived from our information security and cyber defense, space and mission systems, tactical networking, and advanced technologies and other, products and services, which are provided to government and commercial customers. Our revenues are primarily derived from two types of contracts: fixed-price and cost-reimbursement contracts. Fixed-price contracts (which require us to provide products and services under a contract at a specified price), comprised approximately 96% of our total revenues for both the three and nine months ended December 31, 2024, and approximately 96% and 95% of our total revenues for the three and nine months ended December 31, 2023, respectively, a majority of which are reported in our communication services segment. The remainder of our revenues for such periods was derived primarily from cost-reimbursement contracts (under which we are reimbursed for all actual costs incurred in performing the contract to the extent such costs are within the contract ceiling and allowable under the terms of the contract, plus a fee or profit), which contracts are mainly reported within our defense and advanced technologies segment. Historically, a significant portion of our revenues has been derived from customer contracts that include the development of products, mainly reported within the defense and advanced technologies segment. The development efforts are conducted in direct response to the customer’s specific requirements and, accordingly, expenditures related to such efforts are included in cost of sales when incurred and the related funding (which includes a profit component) is included in revenues. See Note 1 — Basis of Presentation to our condensed consolidated financial statements for additional information. To date, our ability to grow and maintain our revenues in each of communication services and defense and advanced technologies segments has depended on our ability to identify and target markets where the customer places a high priority on the technology solution, and our ability to obtain additional sizable contract awards. Due to the nature of this process, it is difficult to predict the probability and timing of obtaining awards in these markets. ### Critical Accounting Policies and Estimates Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We consider the policies discussed below to be critical to an understanding of our financial statements because their application places the most significant demands on management’s judgment, with financial reporting results relying on estimation about the effect of matters that are inherently uncertain. We describe the specific risks for these critical accounting policies in the following paragraphs. For all of these policies, we caution that future events rarely develop exactly as forecast, and even the best estimates routinely require adjustment. ### Revenue recognition We apply the five-step revenue recognition model under Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (commonly referred to as ASC 606) to our contracts with our customers. Under this model, we (1) identify the contract with the customer, (2) identify our performance obligations in the contract, (3) determine the transaction price for the contract, (4) allocate the transaction price to our performance obligations and (5) recognize revenue when or as we satisfy our performance obligations. These performance obligations generally include the purchase of services (including broadband capacity and the leasing of broadband equipment), the purchase of products, and the development and delivery of complex equipment built to customer specifications under long-term contracts. Taxes imposed by governmental authorities on our revenues, such as sales taxes and value added taxes, are excluded from net sales. The timing of satisfaction of performance obligations may require judgment. We derive a substantial portion of our revenues from contracts with customers for services, primarily consisting of connectivity services. These contracts typically require advance or recurring monthly payments by the customer. Our obligation to provide connectivity services is satisfied over time as the customer simultaneously receives and consumes the benefits provided. The measure of progress over time is based upon either a period of time (e.g., over the estimated contractual term) or usage (e.g., bandwidth used/bytes of data processed). We evaluate whether broadband equipment provided to our customers as part of the delivery of connectivity services represents a lease in accordance with the authoritative guidance for leases (Accounting Standards Codification (ASC) 842). As discussed in Note 1 — Basis of Presentation – Leases to our condensed consolidated financial statements, for broadband equipment leased to customers in conjunction with the delivery of connectivity services, we account for the lease and non-lease components of connectivity service arrangements as a single performance obligation as the connectivity services represent the predominant component. We also derive a portion of our revenues from contracts with customers to provide products. Performance obligations to provide products are satisfied at the point in time when control is transferred to the customer. These contracts typically require payment by the customer upon passage of control and determining the point at which control is transferred may require judgment. To identify the point at which control is transferred to the customer, we consider indicators that include, but are not limited to, whether (1) we have the present right to payment for the asset, (2) the customer has legal title to the asset, (3) physical possession of the asset has been transferred to the customer, (4) the customer has the significant risks and rewards of ownership of the asset, and (5) the customer has accepted the asset. For product revenues, control generally passes to the customer upon delivery of goods to the customer. Our contracts with the U.S. Government typically are subject to the Federal Acquisition Regulation (FAR) and are priced based on estimated or actual costs of producing goods or providing services. The FAR provides guidance on the types of costs that are allowable in establishing prices for goods and services provided under U.S. Government contracts. The pricing for non-U.S. Government contracts is based on the specific negotiations with each customer. Under the typical payment terms of our U.S. Government fixed-price contracts, the customer pays us either performance-based payments (PBPs) or progress payments. PBPs are interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments are interim payments based on a percentage of the costs incurred as the work progresses. Because the customer can often retain a portion of the contract price until completion of the contract, our U.S. Government fixed-price contracts generally result in revenue recognized in excess of billings which we present as unbilled accounts receivable on the balance sheet. Amounts billed and due from our customers are classified as receivables on the balance sheet. The portion of the payments retained by the customer until final contract settlement is not considered a significant financing component because the intent is to protect the customer. For our U.S. Government cost-type contracts, the customer generally pays us for our actual costs incurred within a short period of time. For non-U.S. Government contracts, we typically receive interim payments as work progresses, although for some contracts, we may be entitled to receive an advance payment. We recognize a liability for these advance payments in excess of revenue recognized and present it as collections in excess of revenues and deferred revenues on the balance sheet. An advance payment is not typically considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract and to protect us from the other party failing to adequately complete some or all of its obligations under the contract. Performance obligations related to developing and delivering complex equipment built to customer specifications under long-term contracts are recognized over time as these performance obligations do not create assets with an alternative use to us and we have an enforceable right to payment for performance to date. To measure the transfer of control, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We generally use the cost-to-cost measure of progress for our contracts because that best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Estimating the total costs at completion of a performance obligation requires management to make estimates related to items such as subcontractor performance, material costs and availability, labor costs and productivity and the costs of overhead. When estimates of total costs to be incurred on a contract exceed total estimates of revenue to be earned, a provision for the entire loss on the contract is recognized in the period the loss is determined. A one percent variance in our future cost estimates on open fixed-price contracts as of December 31, 2024 would change our income (loss) before income taxes by an insignificant amount. The evaluation of transaction price, including the amounts allocated to performance obligations, may require significant judgments. Due to the nature of the work required to be performed on many of our performance obligations, the estimation of total revenue, and, where applicable, the cost at completion, is complex, subject to many variables and requires significant judgment. Our contracts may contain award fees, incentive fees, or other provisions, including the potential for significant financing components, that can either increase or decrease the transaction price. These amounts, which are sometimes variable, can be dictated by performance metrics, program milestones or cost targets, the timing of payments, and customer discretion. We estimate variable consideration at the amount to which we expect to be entitled. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. In the event an agreement includes embedded financing components, we recognize interest expense or interest income on the embedded financing components using the effective interest method. This methodology uses an implied interest rate which reflects the incremental borrowing rate which would be expected to be obtained in a separate financing transaction. We have elected the practical expedient not to adjust the promised amount of consideration for the effects of a significant financing component if we expect, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less. If a contract is separated into more than one performance obligation, the total transaction price is allocated to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. Estimating standalone selling prices may require judgment. When available, we utilize the observable price of a good or service when we sell that good or service separately in similar circumstances and to similar customers. If a standalone selling price is not directly observable, we estimate the standalone selling price by considering all information (including market conditions, specific factors, and information about the customer or class of customer) that is reasonably available. ### Property, equipment and satellites Property, equipment and satellites, net includes our owned and leased satellites and the associated earth stations and networking equipment, as well as the customer premise equipment units which are leased to customers as part of our communication services segment. Satellites and other property and equipment are recorded at cost or in the case of certain satellites and other property acquired, the fair value at the date of acquisition, net of accumulated depreciation. Capitalized satellite costs consist primarily of the costs of satellite construction and launch, including launch insurance and insurance during the period of in-orbit testing, the net present value of performance incentive payments expected to be payable to the satellite manufacturers (dependent on the continued satisfactory performance of the satellites), costs directly associated with the monitoring and support of satellite construction, and interest costs incurred during the period of satellite construction. We also construct earth stations, network operations systems and other assets to support our satellites, and those construction costs, including interest, are capitalized as incurred. At the time satellites are placed in commercial service, we estimate the useful life of our satellites for depreciation purposes based upon an analysis of each satellite’s performance against the original manufacturer’s orbital design life, estimated fuel levels and related consumption rates, as well as historical satellite operating trends. We periodically review the remaining estimated useful life of our satellites to determine if revisions to the estimated useful lives are necessary. ### Leases In accordance with ASC 842, we assess at contract inception whether the contract is, or contains, a lease. Generally, we determine that a lease exists when (1) the contract involves the use of a distinct identified asset, (2) we obtain the right to substantially all economic benefits from use of the asset, and (3) we have the right to direct the use of the asset. A lease is classified as a finance lease when one or more of the following criteria are met: (1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset, (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset or (5) the asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. A lease is classified as an operating lease if it does not meet any of these criteria. At the lease commencement date, we recognize a right-of-use asset and a lease liability for all leases, except short-term leases with an original term of 12 months or less. The right-of-use asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, less any lease incentives received. All right-of-use assets are periodically reviewed for impairment in accordance with standards that apply to long-lived assets. The lease liability is initially measured at the present value of the lease payments, discounted using an estimate of our incremental borrowing rate for a collateralized loan with the same term as the underlying leases. Lease payments included in the measurement of lease liabilities consist of (1) fixed lease payments for the noncancelable lease term, (2) fixed lease payments for optional renewal periods where it is reasonably certain the renewal option will be exercised, and (3) variable lease payments that depend on an underlying index or rate, based on the index or rate in effect at lease commencement. Certain of our real estate lease agreements require variable lease payments that do not depend on an underlying index or rate established at lease commencement. Such payments and changes in payments based on a rate or index are recognized in operating expenses when incurred. Lease expense for operating leases consists of the fixed lease payments recognized on a straight-line basis over the lease term plus variable lease payments as incurred. Lease expense for finance leases consists of the depreciation of assets obtained under finance leases on a straight-line basis over the lease term and interest expense on the lease liability based on the discount rate at lease commencement. For both operating and finance leases, lease payments are allocated between a reduction of the lease liability and interest expense. For broadband equipment leased to customers in conjunction with the delivery of connectivity services, we have made an accounting policy election not to separate the broadband equipment from the related connectivity services. The connectivity services are the predominant component of these arrangements. The connectivity services are accounted for in accordance ASC 606. We are also a lessor for certain insignificant communications equipment. These leases meet the criteria for operating lease classification. Lease income associated with these leases is not material. ### Business combinations The purchase price for business combinations is allocated to the estimated fair values of acquired tangible and intangible assets, and assumed liabilities, where applicable. Additionally, we recognize technology, contracts and customer relationships, orbital slots and spectrum assets, trade names and other as identifiable intangible assets, which are recorded at fair value as of the transaction date. Goodwill is recorded when consideration transferred exceeds the fair value of identifiable assets and liabilities. Measurement-period adjustments to assets acquired and liabilities assumed with a corresponding offset to goodwill are recorded in the period they occur, which may include up to one year from the acquisition date. Contingent consideration is recorded at fair value at the acquisition date. ### Impairment of long-lived and other long-term assets (property, equipment and satellites, and other assets, including goodwill) In accordance with the authoritative guidance for impairment or disposal of long-lived assets (ASC 360), we assess potential impairments to our long-lived assets, including property, equipment and satellites and other assets, when there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable. We recognize an impairment loss when the undiscounted cash flows expected to be generated by an asset (or group of assets) are less than the asset’s carrying value. Any required impairment loss would be measured as the amount by which the asset’s carrying value exceeds its fair value, and would be recorded as a reduction in the carrying value of the related asset and charged to results of operations. Except for the impairment related to certain of our satellites under construction and satellite programs (discussed in Note 1 — Basis of Presentation – Property, equipment and satellites above), no material impairments were recorded for the three and nine months ended December 31, 2024 and 2023. We account for our goodwill under the authoritative guidance for goodwill and other intangible assets (ASC 350). Current authoritative guidance allows us to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If, after completing the qualitative assessment, we determine that it is more likely than not that the estimated fair value is greater than the carrying value, we conclude that no impairment exists. Alternatively, if we determine in the qualitative assessment that it is more likely than not that the fair value is less than its carrying value, then we perform a quantitative goodwill impairment test to identify both the existence of an impairment and the amount of impairment loss, by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the estimated fair value of the reporting unit is less than the carrying value, then a goodwill impairment charge will be recognized in the amount by which the carrying amount exceeds the fair value, limited to the total amount of goodwill allocated to that reporting unit. We test goodwill for impairment during the fourth quarter every fiscal year and when an event occurs or circumstances change such that it is reasonably possible that an impairment may exist. In accordance with ASC 350, we assess qualitative factors to determine whether goodwill is impaired. The qualitative analysis includes assessing the impact of changes in certain factors including: (1) changes in forecasted operating results and comparing actual results to projections, (2) changes in the industry or our competitive environment since the acquisition date, (3) changes in the overall economy, our market share and market interest rates since the acquisition date, (4) trends in the stock price and related market capitalization and enterprise values, (5) trends in peer companies’ total enterprise value metrics, and (6) additional factors such as management turnover, changes in regulation and changes in litigation matters. Based on our qualitative assessment performed during the fourth quarter of fiscal year 2024, we concluded that it was more likely than not that the estimated fair value of each of our reporting units exceeded their related carrying value as of March 31, 2024. ### Income taxes and valuation allowance on deferred tax assets Management evaluates the realizability of our deferred tax assets and assesses the need for a valuation allowance on a quarterly basis to determine if the weight of available evidence suggests that an additional valuation allowance is needed. In accordance with the authoritative guidance for income taxes (ASC 740), net deferred tax assets are reduced by a valuation allowance if, based on all the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the event that our estimate of taxable income is less than that required to utilize the full amount of any deferred tax asset, a valuation allowance is established, which would cause a decrease to income in the period such determination is made. Our analysis of the need for a valuation allowance on deferred tax assets considered historical as well as forecasted future operating results, the reversal of temporary differences, taxable income in prior carryback years (if permitted), and the availability of tax planning strategies. Additionally, in our analysis, we also considered the fact that ASC 740 places more weight on the objectively verifiable evidence of current pre-tax losses and recent events than forecasts of future profitability. Accruals for uncertain tax positions are provided for in accordance with ASC 740. Under the authoritative guidance, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The authoritative guidance addresses the derecognition of income tax assets and liabilities, classification of deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. We are subject to income taxes in the United States and numerous foreign jurisdictions. In the ordinary course of business, there are calculations and transactions where the ultimate tax determination is uncertain. In addition, changes in tax laws and regulations as well as adverse judicial rulings could adversely affect the income tax provision. We believe we have adequately provided for income tax issues not yet resolved with federal, state and foreign tax authorities. However, if these provided amounts prove to be more than what is necessary, the reversal of the reserves would result in tax benefits being recognized in the period in which we determine that provision for the liabilities is no longer necessary. If an ultimate tax assessment exceeds our estimate of tax liabilities, an additional charge to expense would result. ### Results of Operations The following table presents, as a percentage of total revenues, income statement data for the periods indicated: | | Three Months Ended December 31, 2024 | December 31, 2023 | Nine Months Ended December 31, 2024 | December 31, 2023 | | --- | ---: | ---: | ---: | ---: | | Revenues: | 100% | 100% | 100% | 100% | | Service revenues | 72 | 73 | 72 | 70 | | Product revenues | 28 | 27 | 28 | 30 | | Operating expenses: | | | | | | Cost of service revenues | 47 | 46 | 47 | 44 | | Cost of product revenues | 21 | 22 | 20 | 22 | | Selling, general and administrative | 21 | 24 | 23 | 52 | | Independent research and development | 3 | 4 | 3 | 3 | | Amortization of acquired intangible assets | 6 | 8 | 6 | 6 | | Income (loss) from operations | 2 | (4) | 2 | (28) | | Interest (expense) income, net | (7) | (10) | (7) | (6) | | Income (loss) before income taxes | (14) | (14) | (9) | (35) | | (Provision for) benefit from income taxes | 1 | 3 | — | 4 | | Net income (loss) | (13) | (11) | (9) | (31) | | Net income (loss) attributable to Viasat, Inc. | (14) | (11) | (10) | (31) | ### Three Months Ended December 31, 2024 vs. Three Months Ended December 31, 2023 #### Revenues *(In millions, except percentages)* | | Three Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Service revenues | $809.4 | $825.5 | $(16.1) | (2)% | | Product revenues | 314.4 | 303.1 | 11.3 | 4% | | Total revenues | $1,123.8 | $1,128.5 | $(4.8) | —% | Our total revenues decreased by $4.8 million as a result of a $16.1 million decrease in service revenues, partially offset by a $11.3 million increase in product revenues. The decrease in service revenues was driven by decreases of $13.4 million in our communication services segment and $2.7 million in our defense and advanced technologies segment. The increase in product revenues was driven by a $52.5 million increase in our defense and advanced technologies segment, partially offset by a $41.1 million decrease in our communication services segment. #### Cost of revenues *(In millions, except percentages)* | | Three Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Cost of service revenues | $527.7 | $514.8 | $13.0 | 3% | | Cost of product revenues | 234.2 | 252.5 | (18.3) | (7)% | | Total cost of revenues | $761.9 | $767.3 | $(5.3) | (1)% | Cost of revenues decreased by $5.3 million due to a decrease of $18.3 million in cost of product revenues, partially offset by an increase of $13.0 million in cost of service revenues. The decrease in cost of product revenues was primarily driven by higher margins primarily in our defense and advanced technologies segment due to a higher mix of our product revenues associated with our royalty and licensing agreements versus hardware and other product related revenues. The increase in cost of service revenues was primarily attributable to lower margins, partially offset by a decrease in cost of service revenues of $10.0 million on a constant margin basis as a result of lower service revenues, both of which were mainly in our communication services segment. #### Selling, general and administrative expenses *(In millions, except percentages)* | | Three Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Selling, general and administrative | $238.0 | $271.7 | $(33.7) | (12)% | The $33.7 million decrease in selling, general and administrative (SG&A) expenses was primarily due to lower support costs of $17.5 million and lower selling costs of $8.9 million, both of which were mainly in our communication services segment. The decrease in support costs reflects a reduction in our global workforce in November 2023 and related one-time costs included in the prior year period as we continue to integrate our business post-Inmarsat Acquisition and streamline our global operations. SG&A expenses are comprised primarily of personnel costs and expenses for business development, marketing and sales, bid and proposal, acquisition and transaction related expenses, facilities, finance, contract administration and general management. #### Independent research and development *(In millions, except percentages)* | | Three Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Independent research and development | $36.7 | $41.7 | $(5.0) | (12)% | The $5.0 million decrease in independent research and development (IR&D) expenses was due to a $7.3 million decrease in our communication services segment (primarily related to narrowband and safety of communication capabilities), partially offset by a $2.3 million increase in our defense and advanced technologies segment (primarily related to advanced technologies and other). #### Amortization of acquired intangible assets We amortize our acquired intangible assets from prior acquisitions over their estimated useful lives, which range from two to 20 years. The $25.9 million decrease in amortization of acquired intangible assets in the third quarter of fiscal year 2025 compared to the prior year period was primarily related to the final valuation of certain acquired intangible assets completed in the first quarter of fiscal year 2025, within one year of the closing of the Inmarsat Acquisition as additional information was obtained. #### Interest income The $3.2 million decrease in interest income for the three months ended December 31, 2024 compared to the prior year period was primarily due to lower interest earned as a result of a lower average invested balance in combination with lower interest rates. #### Interest expense The $39.1 million decrease in interest expense for the three months ended December 31, 2024 compared to the prior year period was primarily attributable to an increase in the amount of interest capitalized in the current year period. #### Income taxes For the three months ended December 31, 2024, we recorded an income tax benefit of $11.8 million, resulting in an effective tax rate of 7%. The effective tax rate for the period differed from the U.S. statutory rate primarily due to a U.S. valuation allowance, foreign tax rate differences, and decreases in our unrecognized tax benefits. For the three months ended December 31, 2023, we recorded an income tax benefit of $34.5 million, resulting in an effective tax rate of 22%. The effective tax rate for the period did not differ significantly from the U.S. statutory rate despite a valuation allowance recorded against our U.S. net deferred tax assets primarily due to the impacts of purchase price allocation adjustments with respect to the Inmarsat Acquisition recorded in the quarter. ### Segment Results for the Three Months Ended December 31, 2024 vs. Three Months Ended December 31, 2023 ### Communication services segment #### Revenues *(In millions, except percentages)* | | Three Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Segment service revenues | $759.0 | $772.4 | $(13.4) | (2)% | | Segment product revenues | 61.4 | 102.5 | (41.1) | (40)% | | Total segment revenues | $820.3 | $874.9 | $(54.5) | (6)% | Our communication services segment revenues decreased by $54.5 million due to a $41.1 million decrease in product revenues and a $13.4 million decrease in service revenues. The decrease in segment product revenues was primarily due to decreases of $27.4 million in aviation products due to accelerated IFC terminal deliveries in the prior year period, $11.4 million in government satcom products and $3.1 million in fixed services and other products, mainly driven by enterprise and energy. The decrease in segment service revenues was primarily due to a $48.8 million decrease in fixed services and other (primarily related to fixed broadband services) and a $11.2 million decrease in maritime services. The decrease in segment service revenues was partially offset by a $27.9 million increase in aviation services and a $18.7 million increase in government satcom services. The IFC service revenue increase was driven primarily by the increase in the number of commercial aircraft and business jets receiving our in-flight services through our IFC systems, with our IFC systems installed and in service on approximately 4,030 commercial aircraft (of which approximately 80 were inactive at quarter end, mostly due to standard aircraft maintenance) and approximately 2,000 business jets as of December 31, 2024, compared to approximately 3,540 commercial aircraft (of which approximately 40 were inactive at quarter end, mostly due to standard aircraft maintenance) and approximately 1,700 business jets as of December 31, 2023. We continue to allocate a greater proportion of our bandwidth to our IFC business in preference to our U.S. fixed services business due to bandwidth constraints. #### Segment operating profit (loss) *(In millions, except percentages)* | | Three Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Segment operating profit (loss) | $44.4 | $36.0 | $8.3 | 23% | | Percentage of segment revenues | 5% | 4% | | | The increase in our communication services segment operating profit was primarily due to lower SG&A expenses of $26.1 million (mostly related to support costs) and lower IR&D expenses of $7.3 million (primarily related to narrowband and safety of communication capabilities), partially offset by lower earnings contributions of $30.7 million driven by the decrease in segment revenues. ### Defense and advanced technologies segment #### Revenues *(In millions, except percentages)* | | Three Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Segment service revenues | $50.4 | $53.1 | $(2.7) | (5)% | | Segment product revenues | 253.0 | 200.6 | 52.5 | 26% | | Total segment revenues | $303.4 | $253.7 | $49.7 | 20% | Our defense and advanced technologies segment revenues increased by $49.7 million due to a $52.5 million increase in product revenues, partially offset by a $2.7 million decrease in service revenues. The increase in segment product revenues was primarily driven by a $20.9 million increase in tactical networking products (mostly related to tactical terrestrial networking products), in addition to a $17.4 million increase in information security and cyber defense and a $12.6 million increase in space and mission systems. The decrease in segment service revenues was primarily driven by a $5.9 million decrease in tactical networking services (mostly related to government satellite communication systems), partially offset by an increase of $2.6 million in advanced technologies and other and an increase of $2.3 million in space and mission systems. #### Segment operating profit (loss) *(In millions, except percentages)* | | Three Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Segment operating profit (loss) | $42.7 | $11.8 | $31.0 | 264% | | Percentage of segment revenues | 14% | 5% | | | The increase in our defense and advanced technologies segment operating profit was primarily due to higher earnings contributions of $31.2 million, primarily driven by increased revenues and improved margins in tactical networking products (mostly related to tactical terrestrial networking products) with a higher mix of our product revenues associated with our royalty and licensing agreements versus hardware and other product related revenues, and lower SG&A expenses of $2.0 million (mostly related to selling, and bid and proposal costs), partially offset by higher IR&D expenses of $2.3 million (primarily related to other advanced technologies). ### Nine Months Ended December 31, 2024 vs. Nine Months Ended December 31, 2023 #### Revenues *(In millions, except percentages)* | | Nine Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Service revenues | $2,428.4 | $2,192.6 | $235.8 | 11% | | Product revenues | 944.1 | 941.2 | 2.9 | —% | | Total revenues | $3,372.5 | $3,133.7 | $238.7 | 8% | Our total revenues increased by $238.7 million as a result of a $235.8 million increase in service revenues and a $2.9 million increase in product revenues. The increase in service revenues was due to a $236.6 million increase in our communication services segment, partially offset by a $0.8 million decrease in our defense and advanced technologies segment. The increase in product revenues was due to a $47.7 million increase in our defense and advanced technologies segment, partially offset by a $44.7 million decrease in our communication services segment. #### Cost of revenues *(In millions, except percentages)* | | Nine Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Cost of service revenues | $1,576.0 | $1,374.9 | $201.1 | 15% | | Cost of product revenues | 671.9 | 703.6 | (31.7) | (5)% | | Total cost of revenues | $2,247.9 | $2,078.5 | $169.4 | 8% | Cost of revenues increased by $169.4 million due to a $201.1 million increase in cost of service revenues, partially offset by a $31.7 million decrease in cost of product revenues. The increase in cost of service revenues was primarily attributable to increased service revenues, resulting in a $147.9 million increase in cost of service revenues on a constant margin basis and also lower margins, both of which were mainly in our communication services segment. The decrease in cost of product revenues was primarily driven by higher margins primarily in our defense and advanced technologies segment due to a higher mix of our product revenues associated with our royalty and licensing agreements versus hardware and other product related revenues. #### Selling, general and administrative expenses *(In millions, except percentages)* | | Nine Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Selling, general and administrative | $761.6 | $1,640.3 | $(878.7) | (54)% | The $878.7 million decrease in SG&A expenses was primarily due to a net loss of $905.5 million related to satellite impairment, including liabilities associated with the termination of certain subcontractor agreements, net of estimated insurance claim receivables recorded in our communication services segment in the prior year period. The decrease in SG&A expenses was further driven by lower selling costs of $13.1 million, partially offset by higher support costs of $41.2 million, both of which were mainly in our communication services segment. #### Independent research and development *(In millions, except percentages)* | | Nine Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Independent research and development | $108.7 | $104.2 | $4.5 | 4% | The $4.5 million increase in IR&D expenses was mainly due to an increase of $8.8 million in our defense and advanced technologies segment (primarily related to tactical terrestrial networking and other advanced technologies), partially offset by a $4.3 million decrease in our communication services segment (primarily related to next-generation consumer broadband integrated networking technologies). #### Amortization of acquired intangible assets We amortize our acquired intangible assets from prior acquisitions over their estimated useful lives, which range from two to 20 years. The $2.8 million decrease in amortization of acquired intangible assets in the first nine months of fiscal year 2025 compared to the prior year period was primarily due to the final valuation of certain acquired intangible assets completed in the first quarter of fiscal year 2025, within one year of the closing of the Inmarsat Acquisition as additional information was obtained. #### Interest income The $8.2 million decrease in interest income for the nine months ended December 31, 2024 compared to the prior year period was primarily due to lower interest earned as a result of lower average invested balance in combination with lower interest rates, in addition to interest income received from a litigation settlement in the prior year period (see Note 9 — Commitments and Contingencies to our condensed consolidated financial statements for more information). #### Interest expense The $40.0 million increase in interest expense for the nine months ended December 31, 2024 compared to the prior year period was primarily the result of the effects of increased interest expense arising from our increased level of indebtedness following the closing of the Inmarsat Acquisition in May 2023 and the refinancing of certain debt at a higher interest rate. #### Income taxes For the nine months ended December 31, 2024, we recorded an income tax benefit of $4.7 million, resulting in an effective tax rate of 2%. The effective tax rate for the period differed from the U.S. statutory rate primarily due to a U.S. valuation allowance, foreign tax rate differences, and decreases in our unrecognized tax benefits. For the nine months ended December 31, 2023, we recorded an income tax benefit of $128.1 million, resulting in an effective tax rate of 12%. The effective tax rate for the period differed from the U.S. statutory rate primarily due to a valuation allowance recorded against our U.S. net deferred tax assets. ### Segment Results for the Nine Months Ended December 31, 2024 vs. Nine Months Ended December 31, 2023 ### Communication services segment #### Revenues *(In millions, except percentages)* | | Nine Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Segment service revenues | $2,273.5 | $2,036.9 | $236.6 | 12% | | Segment product revenues | 200.0 | 244.8 | (44.7) | (18)% | | Total segment revenues | $2,473.5 | $2,281.7 | $191.8 | 8% | Our communication services segment revenues increased by $191.8 million due to a $236.6 million increase in service revenues, partially offset by a $44.7 million decrease in product revenues. The increase in segment service revenues was primarily due to the Inmarsat Acquisition in May 2023. The Inmarsat Acquisition contributed approximately $321.7 million to the increase in service revenues in our communication services segment, as a result of three full quarters of contribution compared to only seven months in the prior year period coupled with higher revenues contributed by Inmarsat in the current year period. The inclusion of three full quarters from Inmarsat, the Inmarsat revenue increase and growth in our aviation services were partially offset by an expected decrease in revenues from fixed services and other as we continued to allocate a greater proportion of our bandwidth to our IFC business in preference to our U.S. fixed services business due to bandwidth constraints. The IFC service revenue increase was driven primarily by the increase in the number of commercial aircraft and business jets receiving our in-flight services through our IFC systems, with our IFC systems installed and in service on approximately 4,030 commercial aircraft (of which approximately 80 were inactive at quarter end, mostly due to standard aircraft maintenance) and approximately 2,000 business jets as of December 31, 2024, compared to approximately 3,540 commercial aircraft (of which approximately 40 were inactive at quarter end mostly due to standard aircraft maintenance) and approximately 1,700 business jets as of December 31, 2023. The decrease in segment product revenues was primarily driven by a $41.6 million decrease in aviation products due to accelerated IFC terminal deliveries in the prior year period and a $14.2 million decrease in government satcom products, partially offset by a $10.6 million increase in fixed and other products, mainly driven by enterprise and energy. #### Segment operating profit (loss) *(In millions, except percentages)* | | Nine Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Segment operating profit (loss) | $85.8 | $(805.1) | $890.9 | 111% | | Percentage of segment revenues | 3% | (35)% | | | The change in our communication services segment operating loss to an operating profit was primarily due to the recording of satellite impairment and related charges, net of estimated insurance claim receivables of approximately $905.5 million in the prior year period, as described above, as well as higher earnings contributions of $16.6 million, mainly due to increased service revenues as a result of the Inmarsat Acquisition. The change in our communication services segment operating loss to an operating profit was also attributable to lower IR&D expenses of $4.3 million (primarily related to next-generation consumer broadband integrated networking technologies), partially offset by an increase of $35.5 million in SG&A expenses (reflecting the inclusion of three full quarters of Inmarsat SG&A costs in the current year period compared to only seven months of SG&A costs in the prior year period). ### Defense and advanced technologies segment #### Revenues *(In millions, except percentages)* | | Nine Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Segment service revenues | $154.9 | $155.7 | $(0.8) | —% | | Segment product revenues | 744.1 | 696.4 | 47.7 | 7% | | Total segment revenues | $899.0 | $852.1 | $46.9 | 6% | 55 Our defense and advanced technologies segment revenues increased by $46.9 million due to a $47.7 million increase in product revenues, partially offset by a $0.8 million decrease in service revenues. The increase in segment product revenues was primarily due to a $92.5 million increase in tactical networking products (mostly related to tactical terrestrial networking products), as well as a $17.4 million increase in information security and cyber defense. The increase in segment product revenues was partially offset by lower contributions from certain licensing agreements in advanced technologies and other in the current year period (see Note 9 — Commitments and Contingencies to our condensed consolidated financial statements for more information). The decrease in segment service revenues was primarily due to a $5.5 million decrease in information security and cyber defense, partially offset by a $4.1 million increase in space and mission systems. #### Segment operating profit (loss) *(In millions, except percentages)* | | Nine Months Ended December 31, 2024 | December 31, 2023 | Dollar Increase (Decrease) | Percentage Increase (Decrease) | | --- | ---: | ---: | ---: | ---: | | Segment operating profit (loss) | $168.6 | $115.9 | $52.7 | 45% | | Percentage of segment revenues | 19% | 14% | | | The increase in our defense and advanced technologies segment operating profit was primarily due to higher earnings contributions of $52.8 million, primarily driven by increased revenues and improved margins in tactical networking products (mostly related to tactical terrestrial networking products) with a higher mix of our product revenues associated with our royalty and licensing agreements versus hardware and other product related revenues, as well as lower SG&A costs of $8.7 million. The increase in operating profit was partially offset by a $8.8 million increase in IR&D expenses (primarily related to tactical terrestrial networking and other advanced technologies products). ### Backlog Our firm and funded backlog as of December 31, 2024 is reflected in the table below. *(In millions)* | Firm backlog | As of December 31, 2024 | | --- | ---: | | Communication services | $2,616.2 | | Defense and advanced technologies | 925.0 | | Total | $3,541.2 | | **Funded backlog** | | | Communication services | $2,587.5 | | Defense and advanced technologies | 782.6 | | Total | $3,370.1 | The firm backlog does not include contract options. As of December 31, 2024, approximately half of the firm backlog is expected to be delivered during the next 12 months, with the balance delivered thereafter. We include in our backlog only those orders for which we have accepted purchase orders, and not anticipated purchase orders and requests. In our communication services segment, our backlog includes fixed broadband service revenues under our subscriber agreements, but does not include future recurring IFC service revenues under our agreements with commercial airlines. As of December 31, 2024, our IFC systems were installed and in service on approximately 4,030 commercial aircraft (of which approximately 80 were inactive at quarter end, mostly due to standard aircraft maintenance). We anticipate that approximately 1,570 additional commercial aircraft will be put into service with our IFC systems under existing customer agreements with commercial airlines. Due to the nature of commercial airline contracts and other factors such as OEM delays, there can be no assurance that all anticipated purchase orders and requests will be placed or that anticipated IFC services will be activated on all such additional commercial aircraft. Our total new awards which exclude future revenue under recurring consumer commitment arrangements were approximately $1.1 billion and $3.5 billion for the three and nine months ended December 31, 2024, respectively, compared to approximately $1.2 billion and $3.0 billion for the three and nine months ended December 31, 2023, respectively. Backlog is not necessarily indicative of future sales. A majority of our contracts can be terminated at the convenience of the customer. Orders are often made substantially in advance of delivery, and our contracts typically provide that orders may be terminated with limited or no penalties. In addition, purchase orders may present product specifications that would require us to complete additional product development. A failure to develop products meeting such specifications could lead to a termination of the related contract. Firm backlog amounts are comprised of funded and unfunded components. Funded backlog represents the sum of contract amounts for which funds have been specifically obligated by customers to contracts. Unfunded backlog represents future amounts that customers may obligate over the specified contract performance periods. Our customers allocate funds for expenditures on long-term contracts on a periodic basis. Our ability to realize revenues from contracts in backlog is dependent upon adequate funding for such contracts. Although we do not control the funding of our contracts, our experience indicates that actual contract funding has ultimately been approximately equal to the aggregate amounts of the contracts. ### Liquidity and Capital Resources ### Overview We have financed our operations to date primarily with cash flows from operations, bank line of credit financing, debt financing, export credit agency financing and equity financing. At December 31, 2024, we had $1.6 billion in cash and cash equivalents, $1.3 billion in working capital, no outstanding borrowings and borrowing availability of $585.5 million under our $647.5 million revolving credit facility (the Viasat Revolving Credit Facility), and no outstanding borrowings and borrowing availability of $550.0 million under Inmarsat's $550.0 million revolving line of credit (the Inmarsat Revolving Credit Facility, and together with the Viasat Revolving Credit Facility, the Revolving Credit Facilities). At March 31, 2024, we had $1.9 billion in cash and cash equivalents, $2.2 billion in working capital, no outstanding borrowings and borrowing availability of $591.5 million under the Viasat Revolving Credit Facility, and no outstanding borrowings and borrowing availability of $550.0 million under the Inmarsat Revolving Credit Facility. We invest our cash in excess of current operating requirements in short-term, highly liquid bank money market funds primarily investing in U.S. government-backed securities and treasuries. The general cash needs of our business can vary significantly and our future capital requirements will depend upon many factors, including cash required for our satellite projects and any future broadband satellite projects we may engage in, expansion of our IR&D and marketing efforts, and the nature and timing of orders. In particular: - The cash needs of our communication services segment tend to be driven by the timing and amount of capital expenditures (e.g., payments under satellite construction and launch contracts and investments in ground infrastructure roll-out), the timing and amount of investments in IR&D activities (including with respect to next-generation satellite payload technologies), investments in joint ventures, strategic partnering arrangements, network expansion activities, investments to obtain Supplemental Type Certificates to enable the retrofit installation of our IFC and W-IFE equipment and investments in platforms and software to support services and entry into new markets, as well as the quality of customer, type of contract, mix of contracts in backlog and payment terms, and timing and amount of recoveries under satellite insurance claims. - In our defense and advanced technologies segment, the primary factors determining cash needs tend to be the type and mix of contracts in backlog (e.g., product or service, development or production), timing of payments and payment terms (including restrictions on the timing of cash payments under U.S. Government procurement regulations), as well as contract duration and program performance. For example, if a program is performing well and meeting its contractual requirements, then its cash flow requirements are usually lower. Additionally, from time to time, we evaluate possible acquisitions of, or investments in complementary businesses, products and technologies which may require the use of cash or additional financing. In November 2023, we announced an important milestone in our integration program following our Inmarsat Acquisition. As part of our ongoing strategy to streamline operations and better serve our growing customer base, we completed our work on the rationalization of roles in our global business, which is intended to achieve both operational and cost efficiencies. As part of the role rationalization, we reduced our global workforce by approximately 800 positions, or approximately 10%, and recorded total costs (primarily related to employee severance payments, benefits and related termination costs) of approximately $45 million during the three and nine months ended December 31, 2023. These one-time costs were recorded within operating expenses in our condensed consolidated statements of operations across our segments. To further enhance our liquidity position or to finance the construction and launch of future satellites, acquisitions, strategic partnering arrangements, joint ventures or other business investment initiatives, we may obtain additional financing, which could consist of debt, convertible debt or equity financing from public and/or private credit and capital markets. From time to time, we file universal shelf registration statements with the SEC for the future sale of an unlimited amount of common stock, preferred stock, debt securities, depositary shares and warrants, which securities may be offered from time to time, separately or together, directly by us, by selling security holders, or through underwriters, dealers or agents at amounts, prices, interest rates and other terms to be determined at the time of the offering. Additionally, we consider strategic divestitures from time to time, such as the sale of our Link-16 tactical data link business that was completed in January 2023 for approximately $1.96 billion in cash, as well as divestitures of non-core assets or businesses. We may, from time to time, seek to retire, prepay or repurchase our outstanding debt (including some or all of the Viasat's 5.625% Senior Notes due 2025 (the 2025 Notes)) through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. During the second quarter of fiscal year 2025, we repurchased $359.2 million in aggregate principal amount of our outstanding notes in open market transactions, consisting of approximately $101.7 million of Inmarsat's 6.750% Senior Secured Notes due 2026 (the Inmarsat 2026 Notes) and $257.5 million of 2025 Notes. During the third quarter of fiscal year 2025, we redeemed the remaining Inmarsat 2026 Notes in full. As a result, we recorded a net loss on extinguishment of debt of approximately $96.6 million and $99.8 million in (loss) gain on extinguishment of debt, net in the condensed consolidated statement of operations, for the three and nine months ended December 31, 2024, respectively, mainly related to the redemption of the Inmarsat 2026 Notes (attributable to the related unamortized fair value adjustment made in purchase accounting). If any of the 2025 Notes are not repurchased, we intend to repay the remaining 2025 Notes at maturity in September 2025. Although we can give no assurances concerning our future liquidity, we believe that we have adequate sources of funding to meet our anticipated operating requirements for the next 12 months, which include, but are not limited to, cash on hand, borrowing capacity, and cash expected to be provided by operating activities. ### Cash flows Cash provided by operating activities for the first nine months of fiscal year 2025 was $609.7 million compared to $456.2 million in the prior year period. This $153.5 million increase was driven by our operating results (net income (loss) adjusted for depreciation, amortization and other non-cash charges) which resulted in $165.4 million of higher cash provided by operating activities year-over-year, partially offset by a $11.9 million year-over-year increase in cash used to fund net operating assets. The increase in cash used to fund net operating assets during the first nine months of fiscal year 2025 when compared to the prior year period was primarily due to the timing of deferred revenue recognized under certain long-term contracts (including acquired through the Inmarsat Acquisition) in our communication services segment. Cash paid for income taxes, net, during the first nine months of fiscal year 2025 and 2024 were $174.6 million and $176.4 million, respectively. Cash paid for interest (net of amounts capitalized) during the first nine months of fiscal year 2025 and 2024 were $271.0 million and $179.9 million, respectively. Cash used in investing activities for the first nine months of fiscal year 2025 was approximately $524.9 million compared to $1.5 billion in the prior year period. This $927.0 million decrease in cash used in investing activities year-over-year reflects decreases of $379.0 million in cash used for capital expenditures, $342.6 million in cash (net of cash acquired) used for the Inmarsat Acquisition in the first quarter of fiscal year 2024 and $240.0 million of cash receipts related to satellite insurance claim proceeds received during the first nine months of fiscal year 2025. Cash used in financing activities for the first nine months of fiscal year 2025 was approximately $435.9 million compared to cash provided by financing activities of $1.2 billion for the prior year period. Cash used in financing activities in the first nine months of fiscal year 2025 was primarily comprised of debt repayments of $2.4 billion, partially offset by proceeds from debt borrowings of $2.0 billion (which primarily related to the repurchase and refinancing of the Inmarsat 2026 Notes). Cash provided by financing activities in the first nine months of fiscal year 2024 was primarily comprised of proceeds from debt borrowings of approximately $1.3 billion incurred in connection with the Inmarsat Acquisition. See Note 7 — Senior Notes and Other Long-Term Debt for further information. ### Satellite-related activities Our complementary fleet of 21 in service or operational satellites spans the Ka-, L- and S- bands, with 11 Ka-band satellites, eight high-availability L-band satellites (three of which are contingency L-band satellites that are operational but not currently in commercial service), an S-band satellite that supports the European Aviation Network to provide IFC services to commercial airlines in Europe, and an I-6 class hybrid Ka-/L-band satellite (the I-6 F1 satellite). In late July 2024, the ViaSat-3 F1 satellite completed in-orbit testing and was integrated into our existing satellite fleet covering the Americas. In August 2024, we launched two Ka-band highly-elliptical earth orbit satellite payloads intended to provide polar coverage (the Inmarsat GX 10A and GX 10B satellites). Furthermore, we have eight additional GEO satellites under development: two additional high-capacity Ka-band GEO satellites (ViaSat-3 F2 and ViaSat-3 F3), three additional adaptive Ka-band GEO satellites (GX 7, GX 8 and GX 9) and three Inmarsat-8 L-band GEO safety service satellites. Our extensive satellite fleet enables us to provide a wide array of high-quality broadband and narrowband services with near global coverage (including strong oceanic coverage) with greater redundancy and resiliency. We launched the first of our third-generation ViaSat-3 class satellites, ViaSat-3 F1, into orbit on April 30, 2023. On July 12, 2023, we reported a reflector deployment issue that materially impacted the performance of the ViaSat-3 F1 satellite, and on August 24, 2023, we reported the I-6 F2 satellite suffered a power subsystem anomaly during its orbit raising phase, and concluded that the satellite would not operate as intended (see Note 1 — Basis of Presentation – Property, equipment and satellites to our condensed consolidated financial statements for more information). We expect to continue to invest in IR&D as we continue our focus on leadership and innovation in satellite and space technologies, including for the development of any new generation satellite designs and next-generation satellite network solutions. The level of our investment in a given fiscal year will depend on a variety of factors, including the stage of development of our satellite projects, new market opportunities and our overall operating performance. As we continue to build and expand our global network and satellite fleet, from time to time we enter into satellite construction agreements for the construction and purchase of additional satellites and (depending on the satellite design) the integration of our payload and technologies into the satellites. See Note 14 — Commitments to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2024 for information regarding our future minimum payments under our satellite construction contracts and other satellite-related purchase commitments (including satellite performance incentive obligations) for the next five fiscal years and thereafter, as well as purchase commitments including satellite-related agreements under the contractual obligations table below. The total project cost to bring a new satellite into service will depend, among other things, on the scope and timing of the earth station infrastructure roll-out and the method used to procure fiber or other access to the earth station infrastructure. Our total cash funding of a satellite project may be reduced through third-party agreements, such as potential joint service offerings and other strategic partnering arrangements. In connection with the launch of any new satellite and the commencement of commercial service on the satellite, we expect to incur additional operating costs that negatively impact our financial results. For example, when ViaSat-2 was placed in commercial service in the fourth quarter of fiscal year 2018, this resulted in additional operating costs during the ramp-up period prior to service launch and in the fiscal year following service launch. These increased operating costs included depreciation, amortization of capitalized software development, earth station connectivity, marketing and advertising costs, logistics, customer care and various support systems. In addition, interest expense increased during fiscal year 2019 as we no longer capitalized the interest expense relating to the debt incurred for the construction of ViaSat-2 and the related gateway and networking equipment once the satellite was in commercial service. As services using the new satellite scaled, however, our revenue base for broadband services expanded and we gained operating cost efficiencies, which together yielded incremental segment earnings contributions. We anticipate that we will incur a similar cycle of increased operating costs and constrained bandwidth supply as we prepare for and launch commercial services on future satellites, including our ViaSat-3 constellation, followed by increases in revenue base and in scale. However, there can be no assurance that we will be successful in significantly increasing revenues or achieving or maintaining operating profit in our communication services segment, and any such gains may also be offset by investments in our global business. In addition, we may experience capacity constraints on our existing satellites in the lead-up to the commencement of commercial service on new satellites, such as the capacity constraints we have been experiencing since fiscal year 2023 pending our ViaSat-3 constellation entering commercial service. ### Long-term debt As of December 31, 2024, the aggregate principal amount of our total outstanding indebtedness was $7.2 billion, which was comprised of (1) $442.6 million in aggregate principal amount of the 2025 Notes, $600.0 million in aggregate principal amount of Viasat's 5.625% Senior Secured Notes due 2027, $400.0 million in aggregate principal amount of Viasat's 6.500% Senior Notes due 2028, $1.975 billion in aggregate principal amount of Inmarsat's 9.000% Senior Secured Notes due 2029, $733.4 million in aggregate principal amount of Viasat's 7.500% Senior Notes due 2031, (2) $682.5 million in principal amount of outstanding borrowings under Viasat's $700.0 million senior secured term loan facility (the 2022 Term Loan Facility), $610.5 million in principal amount of outstanding borrowings under Viasat's $616.7 million senior secured term loan facility (the 2023 Term Loan Facility), $1.6 billion in aggregate principal amount of outstanding borrowings under Inmarsat's $1.6 billion senior secured term loan facilities (the Inmarsat Term Loan Facilities), no outstanding borrowings under the Revolving Credit Facilities, and $19.7 million in principal amount of outstanding borrowings under Viasat's direct loan facility with the Export-Import Bank of the United States (the Ex-Im Credit Facility), and (3) $164.4 million of finance lease obligations. For information regarding our outstanding indebtedness, refer to Note 7 — Senior Notes and Other Long-Term Debt to our condensed consolidated financial statements. ### Capital Expenditures and IR&D Investments For a discussion of our capital expenditures and IR&D investments, see Part II, Item 7, “Liquidity and Capital Resources — Capital Expenditures and IR&D Investments” in our Annual Report on Form 10-K for the year ended March 31, 2024, as well as Note 4 — Acquisition, related to the Inmarsat Acquisition, and Note 1 — Basis of Presentation – Property, equipment and satellites, related to satellite impairment, to our condensed consolidated financial statements for more information. ### Contractual Obligations The following table sets forth a summary of certain material cash requirements for known contractual obligations and commitments at December 31, 2024: *(In thousands, including interest where applicable)* | | Next 12 months | Thereafter | | --- | ---: | ---: | | Operating leases | $93,556 | $584,703 | | Senior notes and other long-term debt (1) | 1,096,530 | 8,868,027 | | Purchase commitments including satellite-related agreements | 1,090,360 | 970,300 | | Total | $2,280,446 | $10,423,030 | (1) To the extent that the interest rate on any long-term debt is variable, amounts reflected represent estimated interest payments on the applicable current outstanding balance based on the interest rate at December 31, 2024 until the applicable maturity date, net of interest rate cap contracts (maturing at the end of February 2025) set up to hedge the variable interest rates under the Inmarsat Term Loan Facilities. The interest rate cap contracts provide protection from Compound SOFR rates over 2% and covered the total nominal amount of the Inmarsat Term Loan Facilities of $1.6 billion. We purchase components from a variety of suppliers and use several subcontractors and contract manufacturers to provide design and manufacturing services for our products. During the normal course of business, we enter into agreements with subcontractors, contract manufacturers and suppliers that either allow them to procure inventory based upon criteria defined by us or that establish the parameters defining our requirements. We also enter into agreements and purchase commitments with suppliers for the construction, launch, and operation of our satellites. In certain instances, these agreements allow us the option to cancel, reschedule and adjust our requirements based on our business needs prior to firm orders being placed. Consequently, only a portion of our reported purchase commitments arising from these agreements are firm, non-cancelable and unconditional commitments. We may also cancel, reschedule or adjust our requirements based on business needs after firm orders are placed at a cost, which may be material. Our condensed consolidated balance sheets included $2.2 billion and $2.5 billion of “other liabilities” as of December 31, 2024 and March 31, 2024, respectively, which primarily consisted of deferred income taxes and the long-term portion of deferred revenues. These remaining liabilities have been excluded from the above table as the timing and/or the amount of any cash payment is uncertain. ### Off-Balance Sheet Arrangements We had no material off-balance sheet arrangements at December 31, 2024 as defined in Regulation S-K Item 303(b) other than as discussed under “Contractual Obligations” above or disclosed in the notes to our condensed consolidated financial statements included in this report or in our Annual Report on Form 10-K for the year ended March 31, 2024. ### Recent Authoritative Guidance For information regarding recently adopted and issued accounting pronouncements, see Note 1 — Basis of Presentation to our condensed consolidated financial statements. ## Market risk As filed, 5,266 characters. ### Interest Rate Risk Our financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and short-term and long-term obligations (including Viasat’s and Inmarsat’s senior secured credit facilities (collectively, the Credit Facilities) and our senior unsecured and senior secured notes (collectively, the Notes)), and interest rate cap contracts. We consider investments in highly liquid instruments purchased with a remaining maturity of three months or less at the date of purchase to be cash equivalents. Our indebtedness for borrowed money comprises borrowings under our Credit Facilities and the aggregate principal amount outstanding under our Notes. The Notes and borrowings under our Ex-Im Credit Facility bear interest at a fixed rate and therefore our exposure to market risk for changes in interest rates relates primarily to borrowings under our remaining Credit Facilities, cash equivalents and short-term obligations. The primary objectives of our investment activities are to preserve principal and maximize the income we receive from our investments without significantly increasing risk. To minimize this risk, we maintain a significant amount of our cash balance in money market accounts, with a significant portion held in U.S. government-backed securities and treasuries. In general, money market accounts are not subject to interest rate risk because the interest paid on such funds fluctuates with the prevailing interest rate. Our cash and cash equivalents earn interest at variable rates. Our interest income has been and may continue to be negatively impacted by low market interest rates. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Because our investment policy restricts us to invest in conservative, interest-bearing investments and because our business strategy does not rely on generating material returns from our investment portfolio, we do not expect our market risk exposure on our investment portfolio to be material. Due to the short-term nature of our investment portfolio, we do not believe an immediate 10% increase or decrease in interest rates would have a material effect on the fair market value of our portfolio. We therefore do not expect our operating results or cash flows to be materially affected by a sudden change in market interest rates. Our primary interest rate under our variable rate Credit Facilities is the forward-looking term SOFR rate plus an applicable margin. As of December 31, 2024, the effective interest rate on our outstanding borrowings under the 2022 Term Loan Facility was 9.51%, and under the 2023 Term Loan Facility was 10.05%. As of December 31, 2024, the weighted average effective interest rate under the Inmarsat Term Loan Facilities was approximately 9.31%. As of December 31, 2024, the effective interest rate that would have been applied to any new SOFR-based borrowings under the Viasat Revolving Credit Facility was approximately 7.53%, and under the Inmarsat Revolving Credit Facility was approximately 7.08%. As of December 31, 2024, we had no outstanding borrowings under our Revolving Credit Facilities. Accordingly, assuming the outstanding balance under the 2022 Term Loan Facility, the 2023 Term Loan Facility and the Inmarsat Term Loan Facilities remained constant over a year and we continued to have no outstanding borrowings under the Revolving Credit Facilities, a 10% increase in the interest rates would increase interest incurred, prior to effects of capitalized interest but taking into account Inmarsat's interest rate cap contracts with respect to the Inmarsat Term Loan Facilities (which mature at the end of February 2025), by approximately $23.7 million over a 12-month period. We have entered into interest rate cap contracts to hedge the variable interest rates under the Inmarsat Term Loan Facilities. The interest rate cap contracts provide protection from Compound SOFR rates over 2% and covered the total nominal amount of the Inmarsat Term Loan Facilities of $1.6 billion. As of December 31, 2024, a 100 basis point increase or decrease in interest rates would increase or decrease the carrying and fair values of the interest rate cap contract by approximately $2.5 million. ### Foreign Exchange Risk We generally conduct our business in U.S. dollars. However, as our international business is conducted in a variety of foreign currencies, we are exposed to fluctuations in foreign currency exchange rates. A five percent variance in foreign currencies in which our international business is conducted would change our income (loss) before income taxes by an insignificant amount for each of the three and nine months ended December 31, 2024 and 2023. Our objective in managing our exposure to foreign currency risk is to reduce earnings and cash flow volatility associated with foreign exchange rate fluctuations. Accordingly, from time to time, we may enter into foreign currency forward contracts to mitigate risks associated with foreign currency denominated assets, liabilities, commitments and anticipated foreign currency transactions. ## Controls and procedures As filed, 1,660 characters. We maintain disclosure controls and procedures designed to provide reasonable assurance of achieving the objective that information in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified and pursuant to the requirements of the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. As required by SEC Rule 13a-15(b), we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of December 31, 2024, the end of the period covered by this report. Based upon the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2024. During the period covered by this report, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ## Risk factors As filed, 795 characters. In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, which factors could materially affect our business, financial condition, liquidity or future results. There have been no material changes to the risk factors described in the "Risk Factors" section in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024. The risks described in our report on Forms 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, liquidity or future results. Filed Feb 10, 2025. Source: SEC EDGAR, the filing index for accession 0000950170-25-016993. Last ingested by Listed: Oct 24, 2026, 14:57 ET. No prices; not investment advice.