Viasat Announces New Reporting Segment Structure

Rhea-AI Summary

Viasat (NASDAQ: VSAT) has announced a new segment reporting structure starting from Q1 FY2025. The company will now report financial results based on two segments: Communication Services and Defense and Advanced Technologies. This change aims to provide investors with better insights into Viasat's diverse business lines and growth opportunities.

The Communication Services segment includes four business lines: Aviation, Government Satcom, Maritime, and Fixed and Other. It offers broadband and narrowband communications solutions across government and commercial mobility markets. The Defense and Advanced Technologies segment comprises Information Security and Cyber Defense, Space and Mission Systems, Tactical Networking, and Advanced Technologies and Other, providing resilient, vertically integrated solutions to government and commercial customers.

Positive

• New reporting structure provides better visibility into diverse business lines and growth opportunities
• Viasat offers a broad range of global, vertically integrated capabilities across LEO, MEO, and GEO communications
• Company has a long runway of growth opportunities in various satellite communication markets

Negative

• None.

Insights

Financial Analyst

Viasat's new reporting structure marks a significant shift in how the company presents its financial data, potentially impacting investor analysis and decision-making. The restructuring into two main segments - Communication Services and Defense and Advanced Technologies - offers a more granular view of Viasat's diverse operations.

The Communication Services segment, encompassing aviation, government satcom, maritime and fixed broadband, consolidates Viasat's core satellite communication services. This grouping may provide clearer insights into the company's performance in key markets, particularly the lucrative in-flight connectivity sector.

The Defense and Advanced Technologies segment highlights Viasat's strategic positioning in high-value, technology-driven markets. By separating this from communication services, investors can better assess the growth and profitability of Viasat's advanced technology offerings, including cybersecurity and space systems.

While this restructuring doesn't inherently change Viasat's financial performance, it does alter how investors will analyze the company moving forward. The new structure may make year-over-year comparisons challenging in the short term but should provide enhanced transparency in the long run.

Investors should pay close attention to the upcoming Q1 FY2025 results, which will be the first under this new structure. The recast historical financials provided by Viasat will be important for establishing new baselines and identifying trends within each segment.

Tech Expert

Viasat's segment restructuring reflects the company's evolution and diversification in the satellite communications industry. The new structure emphasizes Viasat's technological breadth, spanning from traditional satellite services to cutting-edge defense and space technologies.

The Communication Services segment underscores Viasat's strong position in providing connectivity solutions across various sectors. The inclusion of the NexusWave service for maritime communications and the emphasis on in-flight connectivity highlight Viasat's focus on high-growth mobility markets.

The Defense and Advanced Technologies segment is particularly intriguing from a technological standpoint. It showcases Viasat's capabilities in critical areas such as information security, cyber defense and space systems. The mention of 'direct-to-device' technology in the Advanced Technologies business line suggests Viasat is positioning itself for emerging markets in satellite-to-mobile communications.

Viasat's claim of being the only satellite operator with such a broad range of global, vertically integrated capabilities is noteworthy. This unique positioning could provide a competitive edge in securing contracts and developing innovative solutions across multiple orbits (LEO, MEO, GEO) and applications.

The restructuring may also indicate a strategic shift towards higher-margin, technology-driven services, potentially leading to improved profitability in the long term. Investors should monitor how this new structure translates into technological advancements and market share gains in key growth areas like cybersecurity and advanced space systems.

CARLSBAD, Calif., July 25, 2024 /PRNewswire/ -- Viasat, Inc. (NASDAQ: VSAT), a global leader in satellite communications, today outlined additional information about its new segment reporting structure commencing with the quarter ended June 30, 2024. The new segment reporting is designed to better reflect the diverse and attractive end markets the company serves and to provide investors greater insight into Viasat's business lines and growth opportunities.

Commencing with its first quarter of fiscal year 2025, the company will report its financial results based on two new reportable segments: Communication Services and Defense and Advanced Technologies.

• Communication Services is comprised of four primary business lines: Aviation, Government Satcom, Maritime, and Fixed and Other.
  • The 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. These solutions include nose-to-tail connectivity for commercial airlines and business jet customers, including our market-leading passenger Wi-Fi services. In commercial maritime, marketed under the Inmarsat Maritime brand, solutions support vessel operation, navigation, crew connectivity and safety services, and include the new NexusWave fully managed connectivity service. In the government market, Viasat offers highly trusted and secure interconnectivity solutions for defense and civilian government customers. Additionally, within this segment Viasat develops and offers a wide array of advanced satellite and wireless products, and networks and terminal solutions that support or enable the provision of fixed and mobile broadband and narrowband services.
• Defense and Advanced Technologies is comprised of four primary business lines: Information Security and Cyber Defense, Space and Mission Systems, Tactical Networking, and Advanced Technologies and Other.
  • The Defense and Advanced Technologies segment provides a diverse set of resilient, vertically integrated solutions, leveraging core technical competencies in encryption, cyber security, tactical gateways, modems and waveforms, to government and commercial customers. The Information Security and Cyber Defense business line offers high-quality encryption products that ensure data security, whether at rest or traveling through a network. The Space and Mission Systems business line builds technologies for use on the ground (antennas, modems and gateways) or in space (space-based communication systems and payloads). The Tactical Networking group provides resilient communications designed for on-the-move or on-the-pause operations in a multi-domain battlespace with friendly force tracking and narrowband solutions. The Advanced Technologies and Other business line focuses on commercial communication satellite product development, orchestration of sovereign and multi-orbit solutions and emerging growth markets, including direct-to-device.

Viasat previously announced its intention to introduce a new segment reporting structure commencing with the first quarter of fiscal year 2025 at the time of reporting its Q4 FY2024 results, on May 21, 2024.  The previous reporting structure (for periods through March 31, 2024 – FY2024) reported financial results in three segments: Government Systems, Satellite Services and Commercial Networks.  [Link here for Q4 FY24 shareholder letter.]

"We are pleased to share our new reporting structure which helps communicate our markets and value drivers and provides greater insight into our progress in each portion of our business portfolio," said Mark Dankberg, Chairman of the Board and Chief Executive Officer, Viasat, Inc.

"Viasat is a leading provider of space and ground network technologies and service solutions for a broad range of commercial and government customers with a long heritage serving narrowband and broadband low earth orbit (LEO), broadband mid earth orbit (MEO), and broadband and narrowband geostationary orbit (GEO) communications and earth observation applications. We believe we are the only satellite operator with this broad range of global, vertically integrated capabilities and are well positioned with a long runway of growth opportunities."

Viasat has prepared unaudited illustrations of the company's financial reports for Fiscal Year 2023 and 2024 to reflect the company's results based on the new segment reporting, which can be found on Viasat's IR site.

About Viasat
Viasat is a global communications company that believes everyone and everything in the world can be connected. With offices in 24 countries around the world, our mission shapes how consumers, businesses, governments and militaries around the world communicate and connect. Viasat is developing the ultimate global communications network to power high-quality, reliable, secure, affordable, fast connections to positively impact people's lives anywhere they are—on the ground, in the air or at sea, while building a sustainable future in space. In May 2023, Viasat completed its acquisition of Inmarsat, combining the teams, technologies and resources of the two companies to create a new global communications partner. Learn more at www.viasat.com, the Viasat News Room or follow us on Facebook, Instagram, LinkedIn, X or YouTube.

Copyright © 2024 Viasat, Inc. All rights reserved. Viasat, the Viasat logo and the Viasat Signal are registered in the U.S and in other countries to Viasat, Inc. All other product or company names mentioned are used for identification purposes only and may be trademarks of their respective owners.

View original content:https://www.prnewswire.com/news-releases/viasat-announces-new-reporting-segment-structure-302207191.html

SOURCE Viasat, Inc.

FAQ

What are Viasat's new reporting segments starting Q1 FY2025?

Viasat's new reporting segments starting Q1 FY2025 are Communication Services and Defense and Advanced Technologies.

What business lines are included in Viasat's Communication Services segment?

Viasat's Communication Services segment includes four business lines: Aviation, Government Satcom, Maritime, and Fixed and Other.

What solutions does Viasat offer in its Defense and Advanced Technologies segment?

Viasat's Defense and Advanced Technologies segment offers resilient, vertically integrated solutions in Information Security and Cyber Defense, Space and Mission Systems, Tactical Networking, and Advanced Technologies and Other.

When will Viasat (VSAT) implement its new segment reporting structure?

Viasat will implement its new segment reporting structure starting with the quarter ended June 30, 2024, which is the first quarter of its fiscal year 2025.