Q4 2022 Viasat Inc Earnings Call

Hello, and welcome to <unk> fourth quarter and fiscal year 2020 earnings conference call.

Your host for today.

It's Rick Baldry, President and CEO , Sir you May proceed.

Okay. Thanks for joining us today.

I want to point out that we released our shareholder letter shortly after market close.

It is available on our website, we will be referring to throughout the call.

Joining me today on the call.

Mark <unk>, our executive Chairman.

CFO Shawn Duffy.

Robert Blair, our general Counsel and Paul Carpenter.

Corporate development.

Peter Lopez from Investor Relations.

So todays call.

Just a.

A few brief opening remarks, followed by Q&A. So.

Before we get started with Sam Robert provide our safe Harbor.

Thanks, Rick as you know this discussion will contain forward looking statements. This is a reminder that factors could cause actual results to differ materially additional information concerning these factors is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q copies are available from the SEC or from our website. Thank you Rick.

Okay. Thanks Robert.

Fiscal 'twenty two.

Great year provided that we delivered.

Actual results that will be.

Targeted we had targeted and previously communicated to our investors.

We continued to execute on a number of very strategic and operational fronts.

For the year, we achieved record revenue of $2 8 billion and record adjusted EBITDA of $611 billion.

For revenue this was up 24% year over year increase in <unk>.

Adjusted EBITDA was a 15% increase which was consistent with our guidance of double digit revenue growth and mid teens adjusted EBITDA growth.

But our goals for the year, while we outperformed in the first three quarters, we knew Q4 would be sequentially softer based.

Based on the factors, we communicated in our last call we had increased ground network cost.

For the upcoming Viasat, three Americas satellite increased R&D investments.

And changes in product mix, which had which were exacerbated by certain government.

Secure product certification delays as we described last quarter.

As well as some.

Some sudden since resolve supply chain issues that impacted certain government product shipments.

Touching briefly on satellite services.

As anticipated, we're seeing very good growth and to date, our IFC business.

Aircraft return to service.

Actual aircrafts from new and existing customers.

We also had contributions from the recent rig net and <unk> acquisitions.

Thanks broadband growth was a little weaker than we as we manage our limited bandwidth supply in the U S and supportive high value data plans and growing IFC demands.

And IFC.

We're adding new customers and increase the telecast with existing customers.

We're very proud of our agreement with southwest Airlines, which was announced subsequent to the end of the quarter.

Although we continue to be hampered by bandwidth constraints in the U S, which has resulted in continued subscriber decline we're.

We're making steady progress in fixed broadband elsewhere for example.

Just recently, we surpassed the 50000 subscriber Mark in Brazil are currently having.

Nationwide commercial service there for about 18 months.

Maybe confidence our ability to successfully execute retail service launches and some of the new international markets for going after it.

The letter does a good job covering our government and commercial segments, let's move on to the Viasat three constellation.

Where we cleared several large risk reduction milestones in the last several months.

<unk> America satellite.

Completed vacuum extreme temperature testing at Boeing.

We were pleased to see payload performance better than expected during testing.

We shouldn't be complete with vacuum chambers by the end of today, allowing us to move the space capped out and proceed with the rest of integration effort.

Alpha testing of the Viasat three ground network has gone very well and we're on track.

Sufficient infrastructure in place to enable commercial services, which we were targeting for early in our fiscal fourth quarter.

Within a week or so we were planning last quarter.

<unk> had three EMEA payload module now complete and is undergoing final testing at our Tempe, Arizona saluted for shipments at Boeing which is expected to occur in.

Sometimes this quarter.

Based on our experience on the Americas, Mike The second payload was completed much faster with a more predictable schedule. The same is holding true for the third satellite Asia Pacific satellite.

So turning to <unk>, we're continuing to advance.

Various transaction milestones and since the last quarterly update.

We've completed an agreement with U K government for certain economic undertakings, which demonstrates our long term commitment to the UK.

We filed the definitive proxy statement with the SEC has set a date of June 21 for a special meeting of our shareholders regarding the transaction.

Hey, Mark just reported another quarter of solid financial and operational results, which are highlighted on page 10 in the shareholder letter.

And you can go to their website to I believe.

Targeting to complete the transaction by the end of this.

This calendar year.

Antitrust approval processes in the U S and the U K being the pacing items.

Because of their process.

And the nature of their process.

In March we.

Biotech can see the term loan for $700 million of financing, which was used to pay down our revolver with the remainder of the cash we used to continue funding the viasat three constellation.

And I'll remind everyone that we have all of the remaining transaction financing in place.

This financing was fully committed at the time, we signed a purchase agreements last November .

That includes provisions that limit the impact of the current debt market volatility.

<unk> had on our ability to close the transaction or achieving our financial objectives both of them.

Turning to our outlook the company wide outlook remains strong we continue to believe we will achieve our standalone financial targets, including our average annual adjusted EBITDA growth in the mid teens.

For FY 'twenty three relative to FY 'twenty two.

This as we achieved them for last fiscal year.

The last quarterly revenue.

Quarterly revenue and EBITDA trajectory.

For this year, our FY 'twenty three will be weighted towards the second half as we ramp up commercial airlines and service over the course of the year.

Anticipated 2400 sales.

Approximately.

As we begin commercial services on Viasat, three and our fourth.

Fiscal quarter.

Okay.

But 300 in our Q4 normal seasonality and near term certifications and supply chain issues. We described in our letter.

Longer term.

We also continue to believe that we're on track to achieve more than double digit adjusted EBITDA by FY 'twenty five relative to 2020 on a standalone basis.

Well of course, we're very excited about the upcoming Viasat three launch in March that acquisition, our strong operational financial performance demonstrates our teams continue to focus on solid execution.

The same can be said framework based on their results.

So with that.

Thank you for your questions.

Thank you.

Ladies and gentlemen to ask a question you will need to press Star then one on your telephone.

Withdraw your question press the pound key.

Again, Thats star one to ask the question.

Please standby, while we compile the Q&A roster.

Our first question comes from the line of blended Park with Morgan Stanley . Your line is open.

Great. Thanks for taking the questions everyone.

I'm wondering if you can just confirm in terms of the actual launch timing for the Viasat three satellite versus the late summer window that you had given last last quarter.

And then beyond that I am wondering if you can delve a little bit more into some of the mobility markets.

Maybe what youre seeing out there right now.

Seeing some some better demand in the oil and gas industry and maybe touch on your ambitions within the business aviation market and where youre at with your Esa development.

Okay.

On the Viasat three schedule.

It has slipped.

Since our last call.

Right now I think we were anticipating being in service by the end of the year and were.

Early bird.

Early into our fiscal fourth quarter. So in the January timeframe is what we're expecting now.

So it's been a it's been weeks.

<unk>.

And with what we have with our launch window, and so where we fall within that window.

Kind of could move it a little bit to the left here to the right.

But.

That's what we expect we have been able to vote.

Mitigated a little bit of physical slip up with delivery.

For launch just with the build out of our.

Ground network and ongoing testing so we're doing some of the testing that we would have normally done.

Orbit.

To do that with some of our existing satellites.

Ground network, so tried to mitigate a little bit of the impact.

Kind of how we get to us.

Early next year service launch.

So that's that part.

I'll talk about rig that is much more I want to talk about the last part.

Oil and gas rig that when we acquired rig that the.

The real the real price here is.

Is it really large growth in oil and gas side, it's really being able to.

Substitute bandwidth, which we really do need the viasat three satellites for how they were doing business and grow.

Types of offerings, we can make.

And their market segments.

So some of that growth really depends on us getting this constellation up and so what we've been doing the meantime.

Integration efforts with <unk>.

In March that helps with that as well some of the inmarsat assets that they have because big data as a customer of theirs as well so being able to do that integration is really what drives future value.

With the rig that businesses.

Can you size that in any way.

Well, yes, I think we.

It's kind of like.

It's not really what you don't want into these markets because we go in and replace what they are currently doing with something that's cheaper instead, what you wanted to enable is a lot more services that they would do if they had the bandwidth and so.

On a per site basis, it could be multiples of what they have as opposed to a 10 or 20% more.

Oh, yes.

And in terms of the synergy number.

And timing.

On on rig net.

Correct.

Most of the synergies on rig that we've achieved the cost synergies that we have.

As laid out in our initial objective most of the synergies with rigs that are.

And the ability to stop paying.

Ongoing fees to other satellite operators and replace that with their own capacity.

And so those will occur as we bring on these viasat three satellites.

Okay.

Okay.

Yes.

Yes.

<unk>.

<unk>.

That's been growing for us and going through most of that as well the main things that we've been focused on.

Working with Oems, because Oems are pretty straightforward.

Straightforward.

Way to get to.

Building onto aircrafts and trade service opportunities and then also.

Ian.

Working with fleet operators again, Thats, a good way to grow the business and then we're also increasing the ways in which we work with distributors to.

To make services more attractive.

The biggest thing.

Jen is getting more coverage with viasat two.

Having European coverage.

A fair amount of the market for us, but now it's viasat three comes out with EMR staff.

Richard is a combination of kind of their coverage and our capacities.

Literally it looks really promising in the market.

And your your assay development.

Yes, so from an Esa perspective.

We already did it.

Demo on that we did it on a business as the first one.

We're working on now is converting that into.

Commercial products for both kind of.

<unk>.

Probably the one of the main focus for US is our commercial market is having a follow on.

There thats kind of future proofing the orbit, but then we're also going to be able to apply the same technology into the business jet and to smaller chip market as well as Boeing commercial jet or regional.

Markets as well.

But the.

The main thing that we're doing right now with product timing will be demonstrated earlier.

Great. Thanks, very much Marty.

He is also directly applicable to our land mobile markets in the future. So.

A lot of common.

A lot of cover all of them.

That product.

Okay.

And just some really quick ones for Sean I'm, just wondering if you could provide some more details in terms of the types of rates.

Locked into on the financing.

And maybe just.

Anything you can say on the Capex outlook for the fiscal year.

Yes, sure so with respect to that rate.

Now can you give all the details on your line.

Yes.

You can think about it.

Because these were kind of UK I'll deal.

Overall, the financing that we put in place.

And so the rate.

These returns are kind of condition to the market back in November .

And so that gives me a little bit at that kind of a framework with respect to that.

Protection from Santander and that gives us that upper limit.

Benefit.

Relative to the market.

Yes.

And then I'm, sorry, you asked about Capex as well.

Thank you can see that our capex for this year was a little bit lighter than what we are targeting.

So next year, you can think of it as we're getting into that part of the program.

Thank you our next year, so I think next year thinking about.

Around 350, or so per quarter is a good range might be a little quicker in the last couple of quarters The Africa range.

Great. Thanks, Shawn thanks, everyone.

Yes. Thanks.

Yes.

Thank you.

Our next question comes from the line of Ric Prentiss with Raymond James Your line is open.

Hi, everyone. This is Brent on for Rick.

Good afternoon, a few question.

First I appreciate the updates on the device that three <unk>.

Line I'm also wondering what are the current expected timelines for launch as well as in service for the EMEA and APAC satellites.

Well, we've said for a while but they're kind of six month centers from the other one but I would say.

The second one hasn't slipped.

When we've had these last weeks so it could come in and just inside that.

By the end of by the end of <unk>.

Calendar 2003.

Our third launches right around that year end Mark.

I mean, it's possible flips into early 'twenty for calendar 'twenty, four or stays in <unk> III.

Some of that schedule it could be a little earlier.

Okay. That's helpful.

Talked about increasing spending as you get ready for that on the Opex side.

How much did you spend in <unk> really specific to the.

The ground system and buys that through any opex side, and what's the magnitude and pacing.

Opex related to Viasat three.

Preparation from here forward.

Yes.

This is Sean so as you are the number one.

$78 million and not getting Steve increasing sequentially quarter to quarter into next year. So you can think of next year.

Full year, probably across the fleet somewhere around 16.

Great got it and then.

You also talked about R&D spending.

Citing projects on the government in mobility side, you mentioned, a few projects there which of these projects should we be most excited about as far as near term midterm and long term opportunity.

Okay.

Probably the ones with the closest timelines that are going to be the government loans.

Because they represent.

Opportunities are integrated onto new types of aircraft or two.

To extend our.

Basically extending our reach.

Certain types of existing customers.

Kind of.

The long term one.

Really.

Both favorable payer mobility on demand mobility or the kind of the two big ones. The herbal stuff we think.

The market is still pretty lightly penetrated and there's 30000 commercial aircraft go into 40000.

The commercial air mobility markets.

So it really really exciting one.

Going into the general aviation markets right now are in kind.

Kind of largest objected to being able to move down to the mid tier and even lower jet packs, a really exciting market the one that.

That we're just getting into and we put some of our investments are going are in land mobile as well.

And mobile is.

Yes.

We can see a lot of similarities to the.

<unk> mobility market a lot of them are driven by.

People and passengers, but there's also some really interesting kind of broadband Iot markets.

That one I think is going to be.

Again, a good market, but what we're really looking to do is to make sure that we have presence in all of those mobility market that we have out.

And in our total addressable market things that add up to Trulia and have I think it's.

One of the things.

That we see is really important is serving a broad range of those markets driving bandwidth consumption.

Jack.

<unk> revenue from from that enables us to keep moving down the learning curve.

The bandwidth productivity.

It's made this possible so far so I think it's kind of all of those aggregate markets.

Okay and last one for me.

Yes, that's helpful and last one for me on the Inmarsat timeline.

Do you think would cause you to.

Exceed or meet the timeline of year end and what's your biggest concern right now.

Well it really is just.

The process of.

The antitrust reviews so.

In the UK, it's the CMA and here's the Doj.

We're producing.

Tens of thousands of documents.

Those reviews and so it's just.

And.

It really just is a process, we don't see any issues of BEC, it's been going quite well.

The discussions have been.

We went into this thing.

Kind of understanding what.

All the questions would be we think we've got a pretty good case.

And they're two totally different processes, so they work differently.

And we've made very good progress the undertakings as an example in the U K with that group, we've made really good progress in multi countries for working through the hurdles.

And.

So we don't really see anything.

Anticipate anything negative haven't seen any indication of that.

Really just.

There is a way in which they go about your some metals and then questions and their responses in that review cycle. So.

If that goes slower that can push us.

<unk>.

One request goes into another question Thats another delay.

That's what guidance the thing I think what we've.

We still feel good about.

Nine to 18 months guideline that we gave out.

Okay, Thanks, everyone stay well.

Thank you.

Our next question comes from the line of Ryan <unk> with Needham <unk> Company. Your line is open.

Our next question.

Our questions have been answered, but I wonder if you could give us a ballpark on kind of <unk>.

Magnitude of the slowdown in revenue in the government systems side from the NSA approvals and such would be helpful. Thank you.

Yes.

At least.

And one of the things I can get totally aligned.

So we talked about last quarter that we saw these pressures can keep pouring into the early Garen I think.

That's exactly what we're seeing.

The other thing is.

Q1 is seasonally our lightest quarter and that government you got to keep all of those things in play.

I think that can be when you think about the potential that that will be the highlight.

So Q.

Just last time, we've talked about these delays and certifications.

Moving out of lashed out of.

We actually had expected him at R. R.

Our.

December quarter, and then we said it wasn't going to happen in Q4.

Could happen in Q1 or Q2 of our FY 'twenty three so June or September .

We don't see it occurring in Q1, we think it's going to move into the September quarter.

Which means you won't start really getting deliveries of those products until Q3 and Q4.

So we've said that we haven't seen any reduction in demand. These are really just getting this to the certification process of that can be delivered.

So we don't see an overall reduction in terms of what the value of those are going to be it's just delayed.

Got it.

We also passed on we also had some part shortages that have occurred in the last couple of quarters couple of products that we're resolving.

That has been resolved for right now that should start shipping.

But like John said, we.

Another sequentially down quarter in.

Our June quarter versus the March quarter overall.

Until that starts to come back.

Got it.

Very helpful. Thanks, so much.

Thanks, Ron.

Thank you.

Our next question comes from the line of Louis Dipalma with William Blair. Your line is open.

Rick.

Good afternoon.

Okay.

Yes.

What.

The sequential decrease in <unk>.

Satellite services revenue wasn't.

Entirely driven by lower subscribers on the consumer broadband side you did that.

Capacity shift towards.

Mobility or were there any like one time items in the quarter that drove that decrease.

At this time.

Primarily we did have a little better.

<unk> and pressure on yet.

AD growth in La and the other thing is there is a little bit of seasonality that we see in Q4 from Q3, and the IFC business as well.

And keep in mind.

Sounds good.

With me.

Expected launch of <unk>.

And entry into service of Viasat, three I think he said for January .

That lead to a stabilization for <unk>.

Residential broadband revenue.

Or do you expect.

Residential broadband revenue.

Continued to decline.

Sure.

Fiscal 2023 and for that to be more than offset by increases in the aviation Rocky gap.

So overall in 'twenty three.

In the first three quarters, we expect residential to continue to decline as we allocate more of the bandwidth to to the employee.

Yes.

We've talked about the number of airplanes that we expect to activate and Thats really whats going to drive.

In the residential subscriber count for the fourth quarter.

We're expecting that to turnaround and start growing again, and we do have expectations of growing the residential.

Subscriber count in the U S as well as internationally going forward from there.

So what you should see first is it stabilized a little bit and then start to grow.

Yes.

One thing I would just like to comment on about this is remember when the IFC business got hit with Covid.

We put a lot of resources towards offsetting that in the residential side.

And then what.

Alright, see coming back that Youre seeing residential contract.

As we allocate bandwidth again, so that's one of the things we like about having multi.

Multiples of these businesses so that we can.

Allocate resources and real time.

Around those market areas.

Great. So ultimately you expect both U S and consumer broadband subscribers.

Potentially.

Our <unk> two to increase.

Beginning I think towards.

At the end of.

Fiscal 2023.

Yes, yes.

Essential basis, we expect subscribers to start growing.

In the fourth quarter as we get as we get capacity I think of an RPM perspective.

Yeah.

We will then we're going to we're going to look at what the market is.

What are the things that has driven our offer up to the fact that we didn't have very much bandwidth. So we have a lot more bandwidth then we'll probably be able to grow in multiple segments of the market not just the way we've been growing which is through hierarchy.

I think we will have.

Better plans that are more valuable play in some of those will be higher priced. So what we have now I think we'll also be able to introduce play et cetera, lower price than what we have now because we have to go out for.

A lot more bandwidth inventory to work with so I think our food trajectory.

We'll have more clarity on that probably once we start going to market with those services.

Sounds good.

Really.

Mark.

Are there any plans to develop a K a band antenna that would be compatible with Paul.

The Viasat and.

The inmarsat.

Network side.

Such that when you're bidding on.

<unk>.

Aircraft right now.

And when you click.

Aircraft over the next two.

Two years.

And they would be compatible with that.

Either a network. So there is increased redundancy.

Yes.

Yes.

So as a matter of fact right now.

One of the things that we've done is we've tried to make our ku band terminals compatible with large number of different K band satellites. So for instance.

We don't we don't use all these compatibilities, yet, but just talking about our own network right. Now for instance, we work on Nbn satellites in Australia, we were commenting Brazilian televised satellite in Brazil, we work on deals that satellites. We work on other third party satellites in Europe , and we can work on it.

Asia.

Via tenant systems can work on putting all of those.

With respect to Inmarsat satellite.

Particular, all of our antennas are are capable of working on the Inmarsat satellite. The inmarsat terminals are capable of working on our satellites there may be net.

Network or modem compatibility that will have to work out either an individual airplanes or.

Okay.

Do those things within the network gateways, which satisfies all of these things have connecting to those gateways.

Quite a bit of maneuvering room to.

To be able to get that but our objective is really to be able to get.

Global.

Coverage pretty much immediately between the two between the two fleets and to have that additional redundancy that you're referring to.

With our own satellites and interest as well.

Yes.

We think thats going to be a really attractive feature for our customers.

Just thinking of it as a bogey to roam onto that works.

Yes.

Alright.

Could roam on ours or vice versa.

Thanks.

One final question.

A rough estimate.

Your backlog for.

Aviation My commercial aircraft under under contract I know you said that you have.

1830 online and expect to have.

2400 online by the end of fiscal 2023, how much.

Any more planes will you have.

In backlog.

In coffee and or like right now are like at the end of fiscal 2023 to <unk>.

Future.

So really right now we have just under 1000.

And you can think of and just just to be clear that doesn't.

This outlet.

Partner.

Yes.

Okay.

Yes, so a very healthy backlog.

And for that.

Bob.

It seems interesting that I think two years ago or three years ago, you announced an order for United Airlines 737 Max.

And I think thats for small.

Our quantity, but I think they have like a very large order of.

Max aircraft and they have a lot of like options and a lot of your customers like Delta.

Options with.

The <unk> hundred 21 neo.

And I think American airlines as options with the <unk> hundred 20 Neo.

Sure.

Yes.

Does your backlog.

Pain like options or are they just for like firm orders for aircraft.

It's just the firm orders that they've made today problems in our backlog some of those orders include aircraft.

Those customers for instance for southwest water includes aircraft that southwest that are yet to be delivered to southwest so.

Some of these are on new aircraft that they've got orders for for example.

<unk>.

But.

In the cases of those.

Our goal is.

To be kind of the best provider to each one of these guys. So that when they do order new aircrafts.

They are coming with our service.

And that's our mission is to make those customers very happy to provide the best available.

Connectivity and value to the airline customers so that all of our future orders have already.

That's plan a.

That's pretty much.

That's pretty much where today.

The other thing the other part of this because we do get questions on that as well.

Well, we want to do is make it so that the surface on the planes that are equipped with ours.

So good that they are motivated to update there.

Existing fleet, as well and Thats kind of wells.

Those are the ways in which we continued to grow orders with existing customers.

I think that the.

Although the pictures.

Pretty much all of the airlines that we serve now.

Can I ask another question actually.

On this topic for a lot of your airline contracts.

Have you contemplated the.

Potential transition.

Free Wifi.

Like are you able to.

At a high level.

SME, but would be.

<unk> impact.

Average revenue per aircraft and that type of return.

<unk>.

Yes.

So yes, yes to both of those.

I think that one of the things that.

Here's the kind of I think the way that I would but what's going on in the airline industry. The last couple of years.

For a while there was a focus on.

Connecting individuals named let's take an individual claim filed out of route show me. What you can do on that point I think what.

What has happened.

Happen is as people are airlines see.

Value and utility of Wi Fi.

And they realize that they get.

Customer satisfaction from passengers that use the connectivity the notion.

Making it for years it has become more important and then when they make it free and the usage grows what they find is that.

But the real issue is less connecting individual pain and more making that service reliable for their fleet as a whole, especially in the places that their items, where there would be the most claims so that's where the that's where the focus has gone and what that means is that when airlines make Wi Fi.

Purchase decisions.

Issue about.

What would it look like for us to go free we want that as an option and what could that mean for connectivity at our hub cities, what does that mean for service level agreements.

<unk> becomes a part of the negotiation.

And I.

I think that from our perspective.

Yes, it's good it's good for us.

Gets more usage.

One of the things we are working with the airlines to make sure that it's good for them as well.

To fix that go with it.

The way in which they do it would have some impact on the specific revenue numbers of the ARPA.

Average revenue per airplane that we would get but.

The upshot is.

It's certainly going to be good for us to get more usage.

We think it will be good for them as well.

That's what we're aiming inventory one of the reasons why.

Not as essentially sometimes is transparent to some of the competition on some of this is because it's important to our airline customers.

They communicate what their strategy is and we followed them sometimes.

Sometimes it might be easier for us to describe it as like I said some of our competition has.

But we've found that to the extent that we're allowing them to communicate their strategy.

That's a better partnership for us with them.

Sounds good thanks.

The secret cleared nature.

And our backlog that I gave you coming out of here and just under 1000 aircraft that definitely does not include anything from southwest does not.

Okay.

Okay. So with.

There might be like 1400 or so.

Yes, there are different.

Different estimates out there about what sounds like it.

Purchase plans are for new claims, which is what which are covered under the agreement and so probably the thing to do would be to look at estimates.

As for what southwest deliveries would be.

I think we have a good shot to capturing all of those.

Sure.

Yeah, you didn't you didn't use any any qualified or are you just said.

Future aircraft from southwest.

That's a pretty long timeline.

Yes.

737.

Theyre going to the Max.

Yes perfect.

Okay.

That's a contributor.

Great. Thanks, Thanks, Shawn for the clarification and thanks Rick.

Mark.

Yep.

Thank you.

Our next question comes from the line of Chris.

Quilty with Quilty analytics your line is open.

Thanks, I know you just said that its better that your customers communicate their strategy, but one notable aspect of that southwest announcement as they've historically been all ku. So do you see this as a.

Permanent forward shift by southwest to Ku band system.

But I really think it's an issue of <unk> or Ku I think it's an issue.

Southwest.

Our job right now is to go make southwest.

The planes that fly on our network with southwest such a good quality of service that they want to go the rest of their fleet I mean, that's the challenge.

It's their job to go figure out what.

To the extent that they are going to do that or do they have another supplier.

I'd like to tie both slipped that play out.

I think that.

And truly thought about <unk>.

Look what I would say.

If you designed satellites and space systems to take advantage of that.

Things that you could do a K band back they don't come out and adequate typically use case that they come from having some of the features that we have in our satellites and especially in Viasat three.

That should give us the ability to deliver better service, that's what we're aiming for and we think.

So they should and want to do the best they can with the service that they have now, but that's going to happen.

To give them the option to do to do better so what we really what.

Chris is there is this.

Concept of purchase and test correct somebody buys and what's the probability of a fly on you again within the next year.

To the extent that we can positively impact purchase intent.

By having our service award that's really our mission.

Yes.

Great.

Shifting gears in the commercial network segment.

And then on fire on the ground and tenant segment.

I'm just looking out to the next fiscal year and should we expect that trend to continue or.

Should we see it level off a bit and can you maybe detail. What you see is the factors that have been driving that growth.

Yes sure Craig.

Thank you.

Do you think about next year.

A couple of pieces right.

One is part of our growth.

This year was IFC terminal delivery.

And I was going to be a big part of our growth next year tail.

Sure I think we delivered.

And we're going to do.

600 next year.

Think about that.

But a little bit lower in Q4.

So it really ties to our customer demand.

Okay pleasure of meeting our schedule Oscar.

Aircraft deliveries.

Also type certification to completions, but those are the those are the kind of indicating drivers and then.

Also on the revenue kind of business.

Fantastic I mean they had.

Significant wins, and I think that theyre going to continue to grow into next year.

And Chris I think.

Your question just sort of highlights the point, which is we have kind of.

We tend to get business hidden lumps, whether its government contracts for some of these biggest tenant contracts where airline wins.

So the timing of growth and a lot of those businesses is really dependent on the timing of those things. The one business that we have that's really not subject to that which is the U S residential business. It was.

Actually the one that we're using to feed the <unk> business. So that's what's really.

Really contributing to the Lumpiness that.

You're seeing it.

Over to you.

In Q4 and going into wanting to move away.

Fiscal year 'twenty three will play out.

The good thing is that we have most of the lumps.

And the pipeline now.

But that's those are the things that drive the rate of growth on an annual basis pretty good on a quarterly basis. It can be it can be unpredictable event.

Got you and on the ground equipment side was it mostly earth observation driven.

Yes.

Yes, great.

The other thing on that.

Syed I think one of the things.

In November one.

Yes.

With that is that.

This CSP.

CSP Communications Services Project Award that we got from NASA, which is really intended to kind of leverage.

The combination of the ground antenna business that we have with space really for both commercial and government customers I think that those two things are pretty synergistic and it's worth.

I think that as it relates to kind of the future prospects of our Grand at the end of this.

<unk>.

Got you.

Keith I hate to keep asking antenna questions, but.

Where have you made any progress or do you have any prognostication on your electronically steered flat panel antenna when that should be in the market and where specifically you are looking to position that relative to what dozen or more competitive products that are coming to market.

Okay. So.

While it remains our main objective and we think this should be what our customer's main objective.

For those antennas is to deliver services most cost effectively.

That that's what I think that's what's going to differentiate our antennas.

In order to do that you may need.

Our network capabilities, but some.

One of the things that we're building in a little bit unique to our networks. So a lot more focused on.

Our intent is.

Delivery mechanism for our service that we are tenants as a standalone product and that causes us to look at.

Some of the features or.

Specifications as some of these competing products.

Leave and somebody who is just in the market for an antenna Mike. Okay. So that's kind of a guiding principle for us.

Some of those things really impact your ability to make a connection but the flexibility that you have and scheduling. These connections among all the different services that we have.

Build on Athene.

Very focused on productivity measures some of which comes from high capacity satellite some of it comes from our ability to move bandwidth around it.

And deliver.

On the service level agreements reliably.

Really efficiently. So some of the features that we built it just makes the scheduling with data.

More efficient or the ability to use.

Multiple orbits really efficiently that's the other thing that we're putting in some of the first applications that youll see for that may be in land mobile applications using some of.

The.

Give us some more color.

Copies of the antennas that we followed since year.

In business aviation.

But what are the main products that we have in Asia is the commercial aviation market and we'll talk about that more as we get closer to it and give our customers an opportunity to weigh in on.

The specifics that we focused in on.

Let me ask a question Mark.

Just to try to clarify.

One way to approach this would be youre building that tenants for mass market called the lowest common denominator approach none of it is.

We were biased.

They have the features that we wanted but they don't so talk a little bit about that okay. So did.

You said that nobody could.

So I think just to build on Rick's point, which is an important one is a lot of times when people buy antennas as a product one of the things to look at is what is the worst case performance of that under particular combination.

Look angles or satellites that youre using.

I look at sort of what's the worst case performance because if they go off and buy service from a third party they are not quite sure what.

Attributes of the satellite to deliver that service will be.

For us knowing that we have.

Pretty big fleet.

Very unique capabilities, what makes a lot of sense for us to come up with a with an antenna specification that delivers the best weighted average performance under all operating conditions for those customers. So EBIT. So as an example.

We had a worst case performance specification.

That condition rose only a very small fraction of the time and still allow us to reliably meet our service level agreement, we would choose that.

Yes.

At acceptable criteria if it what it did was it enabled way.

Way better performance most of the time under the operating conditions that we expect for that customer. So there is a difference between sort of expected a weighted average and worst case could have a really big impact on you.

Your choice of antenna technology, when Youre, just selling third party antennas customers might rationally choose a different one.

So.

We're not doing these things so we can be able to sell a bunch of independents and make money on tenants in the best markets.

Really to enable the type of services where covenant.

In the markets that we're addressing.

Jeff.

Makes sense.

Yes got you so youre designing an antenna that's optimized for your service.

Yes.

Ultimately involves not just our own satellites, but a whole bunch of partner satellites as well, including a number of partners that havent yet.

But we think there is going to be really valuable in the future and a multi orbit right.

Yes.

Greg you want to elaborate on our multi orbit strategy.

No other than to say, we think that the.

What we're trying to do with the multi orbit strategy is to get the best of each of each orbitz attributes right. So.

For the <unk> satellites, what we've got is really we think really really low cost bandwidth and the ability to deliver a lot of bandwidth in these very congested places like splitting example would be another example, so you'd want to use that could.

To the extent that you have traffic that debt.

Benefits from our lower propagation delay have lower latency than you're going to use.

Non geo for that or if you want to.

Coverage in places that the Geo doesn't reach as well.

Non geo for that.

And also depending on what customers you get traffic evolves. We also can have.

Hotspots in an area that we didn't expect and so to the extent that we can use partner satellites to serve those back and let us get customers that we wouldn't otherwise be able to get because we can fill in those hotspots. So those are the main reasons for using.

Multiple satellite partners as well as not with not Geos.

Being one one set of those partners.

Gotcha so.

Till next quarter. So you can tell us who is non non GMO.

The feedback.

Okay, Alright, thanks, guys. Thanks, Chris.

Thank you.

Our final question comes from the line of London part of Morgan Stanley with a follow up your lines.

Great. Thanks for taking the follow up guys. I was just wondering if you could elaborate on.

U S residential terrestrial competition that you talked about.

In the letter.

And then just one quick one for you Sean.

Just taking the 700 million EBITA guidance with the one four.

Capex guidance.

Should we be thinking about cash burn in the $700 million range or are there other working capital or other considerations to think about.

I would think.

One thing to keep in mind.

We're going to be growing and we're going to be working.

Working to kind of keep the channel for that credit to ahead of Viasat three.

I just had a little better working capital burden there.

On a year over year basis, I think following up on the.

Kind of ex Pat Thanks, there's leverage to be around four and a half martell.

See some places to triangulate around.

Okay.

Alright.

Okay, and then on the residential market probably.

No.

Kind of a longer term.

Biggest factors are probably going to be government subsidies.

And kind of build out fiber and cable terrestrial networks.

Bats.

What we're really looking at is what impact that has on the addressable market I think others have talked about that too we think the addressable market will go down.

We think it creates opportunities that may be different price points than what we've operated at now and.

If you look at kind of.

Long term.

I think a couple of years ago, We gave pie chart that showed our expectations of what our satellite services market total market could be at FY 'twenty five.

That that FY 'twenty five.

Pad.

It showed.

Modest growth in the U S residential market as a whole, but a much larger fraction of our total business coming from these international mobility market. That's still the way we see it taking into account what's going on in the.

What's going on in the build out of subsidy in the U S market I think we are.

We have room to grow by.

Hundreds of thousands were not talking about talking about growing by millions of subscribers in the U S market.

We will be able to dramatically increase our addressable market and planned type of that but that was a much smaller share anymore.

Of our addressable market.

That's what we're anticipating.

Okay.

Are you as you start testing those new plans before.

Hi, Zachary actually enter service or yes, yes, we are and you'll see what we're doing right now I would say one of our most promising plans is really around higher quality and more video streaming and thats gone really really well but at scale.

Words of subscribers that were testing.

But that has gotten really really well that'll be one of the things that we do with with Viasat three youll see US also begin testing.

Higher speed plans and we have now we topped out at 100 Megabits a second we'll probably go to meaningfully higher.

I think what you'll see is us kind of moving in both directions.

Plan better.

Better premium more premium than what we have now and then others that are more value based which could involve improvements in performance, but also could be a little lower price points. The other the other point I would make.

Subsidies is one of the ways in which the government is using subsidies.

With AT&T.

ACP program, which is basically a way it's like a voucher program for lower income fixed broadband subscribers and that is available to satellite service providers as well and so that's something that we're just going to be adopting kind of at the end of it.

Sometimes this quarter and that will that will.

Help with.

Our kind of markets that are more price sensitive or economically stressed.

That we've had before.

You didn't participate in the EBV program.

Yes, ATP program I think is going to be.

More significant than that.

It's pretty it's a pretty straightforward program people qualify they get like a ticket type $30 a month.

That's a pretty pretty meaningful I think thats the one I think.

<unk>.

I think we are the ABB will but I think the ACP. What we think is going to be probably more impactful and it does appear that that will continue on its a pretty popular program.

Right.

Talk about fiber and cable are you seeing fixed wireless at all.

We do I mean, we see each of those I think that.

It's kind of like a T mobile version of mid band is probably.

Probably going to be more representative of.

Because our feeling is that its a fixed wireless that rides on mobile service, that's probably going to be more impactful than dedicated fixed wireless okay.

Probably the long term thing, but if you look at the way.

T. Mobile has done is they've got to subordinate to the intermodal surface. So that is going to have an impact on geographically, where it can roll out the extent to which you can roll out and.

Kind of a long term duration of that but that's probably the.

Kind of the.

Most.

The biggest potential I think one of the things that's really going to that we see.

Repeatedly is.

People are coming and going, especially when they're economically economically stressful times people just go into a mobile plan and not having a fixed payment at all and we actually think theres some opportunity.

Around augmenting some of that stuff as well so we think.

We never wanted to think its always business as usual using the same tools and different markets. So.

Whenever there is change there is opportunity, but I think our.

The main.

So the biggest theme for us.

Play out in the.

In the fourth quarter, one of the statistics that we put in.

Weather was I think in the fourth quarter.

FY 'twenty, 239% of our satellite services revenue came from local and international compared to 16% in the second quarter a year ago. So that that's the that's the long term trend I think we definitely we're not it's not like we're.

Abandoning or going away in the residential market. We think the real growth is in the mobility market and a lot of growth internationally, where some of those factors.

And on the U S are happening.

Unlikely to happen.

Okay. Thank you everyone.

Thanks, Good evening.

Sure.

Thanks.

I would now like to turn the call back over to Mr. Bonawitz for closing remarks.

Okay. Thanks, So first of all let's say thank you guys for showing up we know there were a bunch of complex right now.

We couldn't make it because of the publics, but we appreciate it.

All the good questions and you guys before.

Listening to the call.

Mike a couple of points before we just finished one is that.

Like we did in Q4 and this year, we constantly balance investments in EBITDA to <unk>.

Try to.

Make sure we're hitting the targets that we put out there and make sure that.

We can borrow the money we're trying to borrow finished the viasat three constellation and get it up and to the extent, we are a little bit more room there.

To accelerate our own some of the things we think are valuable and to the extent that we don't kind of constrains out and so we're constantly doing that.

You guys have been around for a while.

And I'm really excited.

Because of the upcoming Viasat three launch.

And our site.

So we are excited about that so just.

Mark and me and the rest of the team.

Thank you guys for being on the call. So another really good year, we think our operational momentum.

Really strong and very positive on top of that.

Getting to that first Viasat, three launch, which we've been waiting for.

What's the capacity, we sorely needed.

Regionally and allow us to improve our service offerings.

What we've been waiting for and what gives us the global capabilities and opportunities to enhance our.

Expanding mobile focus.

Global basis, we're excited about that.

And at the same time, our teams here remain hyper focused on.

Executing the plan until.

It enables us to expand the business so Dod.

Hesitate to contact Peter or the rest of our team. If you have more questions on our results or other topics today.

Forward to updating you.

Next quarter. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now.

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Yes.

Hello, and welcome to <unk> fourth quarter and fiscal year 2020 earnings conference call.

Your host for today, Thank you Rick.

Break-bulk rich president and CEO .

Sir you May proceed.

Okay. Thanks for joining us today.

I just want to point out that we released our shareholder letter shortly after market close.

Available on our website, we will be referring to throughout the call.

Joining me today on the call.

Mark Thank Berg, our executive chairman.

CFO Shawn Duffy.

Robert Blair, our general Counsel and Paul Froelich corporate development.

Lopez from Investor Relations.

So todays call.

I'll just go through a few brief opening remarks, followed by Q&A. So.

Before we get started with have Robert provide our safe Harbor.

Thanks, Craig as you know this discussion will contain forward looking statements. This is a reminder that factors could cause actual results to differ materially.

Information concerning these factors is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q copies are available from the SEC or from our website.

Okay. Thanks Robert.

Fiscal 'twenty two.

Great year provided that we delivered.

Actual results that we targeted we had targeted and previously communicated to our investors.

We continued to execute on a number of various strategic and operational fronts.

For the year, we achieved record revenue of $2 8 billion and record adjusted EBITDA of $611 million.

For revenue this was up 24% year over year increase in <unk>.

Adjusted EBITDA was a 15% increase which was consistent with our guidance of double digit revenue growth and mid teens adjusted EBITDA growth.

We hit our goals for the year, while we outperformed in the first three quarters. We knew Q4 would be sequentially softer based on the factors. We've communicated in our last call. We had increased ground network cost.

For the upcoming Viasat, three Americas satellite increased R&D investments.

And changes in product.

<unk> mix, which had which were exacerbated by certain government.

Secure product certification delays as we described last quarter.

As well as some.

Sudden since resolved supply chain issues that impacted certain government product shipments.

Touching briefly on satellite services as anticipated, we're seeing very good growth.

Our IFC business.

Aircraft, returning to service and additional aircraft from new and existing customers.

He also had contributions from the recent rig net and <unk> acquisitions.

Fixed broadband growth was a little weaker than we as we manage our limited bandwidth supply in the U S. In support of high value data plans and growing IFC demand.

At IFC.

We're adding new customers and increasing the tail accounts with existing customers.

We're very proud of our agreement with southwest Airlines, which was announced subsequent to the end of the quarter.

Although we continue to be hampered by bandwidth constraints in the U S.

This resulted in continued subscriber decline.

We're making steady progress in fixed broadband elsewhere for example, with <unk>.

Recently, we surpassed the 50000 subscriber mark in Brazil, apparently haven't nation.

Nationwide commercial service there for about 18 months.

Lindy confidence our ability to successfully execute retail service launches and some of the new international markets, we're going after.

The letter does a good job covering our government and commercial segments. So let's move on to the Viasat three constellation.

Where we cleared several large risk reduction milestones in the last several months.

<unk> America satellite.

Completed vacuum extreme temperature testing at Boeing.

We were pleased to see payload performance better than expected during testing.

We should be complete with the vacuum chamber by the end of today, allowing us to move the space Scott Stout and proceed with the rest of the integration effort.

Alpha testing on the Viasat three ground network has gone very well and we're on track.

Sufficient infrastructure in place to enable commercial services.

Which we were targeting for early in our fiscal fourth quarter.

Okay.

Is that a week or so we were planning last quarter.

<unk> had three EMEA payload module now complete and is undergoing final testing at our Tempe, Arizona saluted for shipment to Boeing which is expected to occur in.

Sometimes this quarter.

Thanks, a lot our experience on the Americas and unlike the second payloads completed much faster with a more predictable schedule. The same is holding true for the third Asia Pacific satellite.

So turning to MRC that we're continuing to advance.

Various transaction milestones and since the last quarterly update.

We've completed an agreement with the UK government for certain economic undertakings. This demonstrates our long term commitment in the U K.

Filed a definitive proxy statement with the SEC and set a date of June 21 for a special meeting of our shareholders regarding the transaction.

Hey, Mark just reported another quarter of solid financial and operational results, which are highlighted on page 10 in the shareholder letter.

And you can go to their website to I believe.

Getting to complete the transaction by the end of <unk>.

This calendar year.

Antitrust approval processes in the U S and the UK being the pacing items.

Because of their process.

And the nature of the process.

In March we.

<unk> seen a term loan for $700 million of financing, which was used to pay down our revolver with the remainder of the cash we used to continue funding the viasat three constellation.

And I'll remind everyone that we have all of the remaining transaction financing in place.

This financing was fully committed at the time, we signed a purchase agreements last November and includes provisions that limit the impact of the current debt market volatility.

<unk> had on our ability to close transaction or achieving our financial objectives plus clothing.

Turning to our outlook our company wide outlook remains strong we continue to believe we will achieve our standalone financial targets, including our average annual adjusted EBITDA growth in the mid teens.

Our FY 'twenty three relative to FY 'twenty two.

Just as we achieve them for our last fiscal year.

Our last quarterly revenue.

Quarterly revenue and EBITDA trajectory for this year, our FY 'twenty three will be weighted towards the second half as we ramp up commercial airlines and service over the course of the year to an anticipated 2400 <unk> approx.

Approximately.

As we begin commercial services on Viasat three in our in our court.

Fiscal quarter.

Alright.

300, and our Q4 normal seasonality and near term certifications and supply chain issues. We described in our letter.

Longer term.

We also continue to believe that we're on track to achieve more than double digit adjusted EBITDA by FY 'twenty five relative to 2020 on a standalone basis.

Of course, we're very excited about the upcoming Viasat three launch Mr's at acquisition are stronger operational and financial performance demonstrates that our teams continue to focus on solid execution.

The same can be said framework based on their results.

Let's take your questions.

Thank you.

Ladies and gentlemen to ask a question you will need to press Star then one on your telephone.

Withdraw your question press the pound key.

Again, Thats star one to ask a question please.

These standby, while we compile the Q&A roster.

Our first question comes from the line of blended Park with Morgan Stanley . Your line is open.

Great. Thanks for taking the questions everyone.

I'm wondering if you can just confirm in terms of the actual launch timing for the Viasat three satellite versus the late summer window that you had given last last quarter.

And then beyond that I am wondering if you can delve a little bit more into some of the mobility markets.

Maybe what youre seeing out there right now that we're.

We're seeing some some better demand in the oil and gas industry and maybe touch on your ambitions within the business aviation market and where youre at with your Esa development.

Okay.

On the Viasat three schedule.

<unk>.

It has slipped.

Since our last call right.

Right now I think we were anticipating being being in service by the end of the year and we're early early into the quarter our fiscal fourth quarter. So in the January timeframe is what we're expecting now.

So it's been it's been weeks.

I think.

The what we have is our launch window, and so where we fall within that window.

It was kind of to move it a little bit to the left to the right.

But.

That's what we expect we have been able to book.

Mitigated a little bit of.

Physical slip of the delivery.

For launch just with the build out of our ground network and ongoing testing. So we're doing some of the testing that we would have normally done.

On orbit.

We'll do that with some of our existing satellites.

So trying to mitigate a little bit of the impact.

Kind of how we get to us.

Early next year service launch.

So that's that part.

Hello.

I'll talk about rig that is much more I want to talk about the last part.

Oil and gas part of arena, when we acquired rig that the real the real price here is.

Isn't really large growth in oil and gas side, it's really being able to.

Substitute bandwidth, which we really do need the viasat three satellites for how they were doing business and grow.

Types of offerings, we can make.

And their market segments.

So some of that growth really depends on us getting this constellation up and so what we've been doing the meantime.

Integration efforts with <unk>.

MRC that helps with that as well some of the inmarsat assets that they have because really it is a customer of theirs as well so being able to do that integration is really what drives future value.

With the rig that businesses.

Can you size that in any way.

Yes.

It's kind of like.

It's not really what you don't want into these markets because we go in and replace what they are currently doing with something that's cheaper than what you wanted to enable theres a lot more services that they would do if they had the bandwidth and so.

On a per site basis, it could be multiples of what they have as opposed to a 10 or 20% more.

So yes.

And in terms of the synergy number.

And timing.

On on rig net.

Correct.

Most of the synergies on rig that we've achieved the cost synergies that we have.

As laid out in our initial objective most of the synergies with rigs that are.

And the ability to stop paying.

Ongoing fees to other satellite operators and replace that with our own capacity.

And so those will occur as we bring on these viasat three satellites.

Okay.

Okay.

Yes.

No.

That's been growing for us and growing very much that as well the main things that we've been focused on are.

Working with Oems because Oems are pretty.

Straightforward way to get to get built onto aircrafts and creates service opportunities and then also in.

Working with fleet operators again, Thats, a good way to grow the business and then we're also increasing the ways in which we work with distributors to make.

Maintenance services more attractive.

The biggest thing.

Business jet is getting more coverage with viasat, two and having European coverage that a.

A fair amount of the market for us, but now with Viasat three comes out with EMR staff.

Richard is a combination of kind of their coverage and our capacities.

Literally it looks really promising in the market.

And your your assay development.

Yes, so from an Esa perspective.

We already did a demo on that we did it on business jet.

First one what we're working on now is converting that into.

Commercial products for both kind of.

Pick up a bit.

Private one of the main focus for US is our commercial market is having a follow on.

There thats kind of future proofing the orbit, but then we're also going to be able to apply those same technologies ultimately into the business jet and a smaller chip market as well.

Commercial jet or regional.

Markets as well.

But the technology of the main thing that we're doing right now with product timing will be demonstrated earlier.

Great. Thanks, very much mark.

Also directly applicable to our land mobile markets.

Future so.

A lot of comments.

So a lot of cover all of them.

That product.

Okay.

And just some really quick ones for Sean I'm, just wondering if you could provide some more details in terms of the types of rates.

Locked into on the financing.

And maybe just.

The thing you can say on the Capex outlook for the fiscal year.

Yes, sure so with respect to that rate.

Not going to give all of the detail on your line.

You can think about it.

Is because these were kind of UK I'll deal.

Overall, the financing that we put in place.

And so the rate and a major turn.

And a condition to the market back in November .

And so that gives me a little bit about that.

Our framework with respect to that.

Protections that are built in there and that gives us that upper limit.

Benefit.

Relative to the market.

Yes.

And then Scott yes.

Capex as well.

Thank you can see that our capex for this year was a little bit lighter than what we are targeting.

So next year, you can think of it as we're getting into that part of the program.

Thank you our next year, so I think next year thinking about.

Around 350, or so per quarter is a good range might be a little quicker in the last couple of quarters, but after that thanks.

Great. Thanks, Shawn thanks, everyone.

Yes, Thanks, Bob.

Thank you.

Our next question comes from the line of Ric Prentiss with Raymond James Your line is open.

Hey, everyone. This is Brent on for Rick.

Good afternoon, a few question.

First I appreciate the updates on the device that three timeline I'm also wondering what are the current expected timelines for launch as well as in service for the EMEA and APAC satellite.

Well, we've said for a while if they're kind of six month centers from the other one but I would say.

The second one hasn't slipped.

These last weeks so it could come in and just inside that.

By the end of by the end of.

<unk>.

Calendar 'twenty three are.

Our third launches right around that year end, Mark So I mean, it's possible flips into early 'twenty for calendar 'twenty four or stays in calendar 'twenty, three but kind of on that.

There could be a little earlier.

Okay. That's helpful and you talked about increasing spending as you get ready for that on the Opex side.

How much did you spend in <unk> really specific to the ground system and buys that through any opex side.

What's the magnitude and pacing.

Opex related to Viasat three.

Preparation from here forward.

Yes, Sir.

This is Sean so as you are the number one.

Seven 8 million and last I think Steve increasing sequentially.

It's harder into next year. So you can think of next year.

All of the air probably across the fleet somewhere around 16.

Great got it and then you.

You also talked about R&D spending.

Citing projects on the government and mobility side and you mentioned a few projects there what do these projects should we be most excited about as far as near term midterm and long term opportunity.

Okay.

Probably the ones with the closest timelines that are going to be the government volumes.

They represent.

<unk> opportunity is integrated onto new types of aircraft or.

To extend our.

Basically extending our reach.

Certain types of existing customers.

Kind of.

The long term one.

Really.

Both favorable to air mobility on demand mobility or that kind of at the two big ones. The herbal stuff we think.

The market is still pretty lightly penetrated.

30000 commercial aircraft go into 40000.

Commercial air mobility markets.

So it really really exciting one.

Going into the general aviation market right now, we're in kind of largest jets, but being able to move down to the mid tier and even lower that's a really exciting market. The one that's.

We're just getting into and we've heard some of our investments are going are in land mobile as well.

And mobile is.

Yes.

We can see a lot of similarities to the.

Air mobility markets a lot of them are driven by.

People and passengers, but there's also some really interesting kind of broadband Iot markets.

That one I think that's going to be.

Again, a good market, but what we're really looking to do is to make sure that we have presence in all of those mobility market that we would have.

Behind our total addressable market things that add up to <unk> trillion and a half I think it's.

One of the things Thats.

That we see is really important is serving a broad range of those markets driving bandwidth consumption.

<unk>.

<unk> revenue from from that enables us to keep moving down the learning curve.

The bandwidth productivity.

<unk> made this possible so far so I think it's kind of all of those aggregate markets.

Okay and last one for me.

Yes, that's helpful and last one for me on the Inmarsat timeline.

Do you think would cause you to.

Exceed or meet the timeline of yearend and what's your biggest concern right now.

Well it really is just.

The process on the.

The anti.

Antitrust reviews so.

In the UK, it's the CMA and here's the Doj.

And.

Yes.

Seeing.

Tens of thousands of documents.

Of those reviews and so it's just.

And.

It really just in the process, we don't see any.

The issues are that it's been going quite well.

The discussions have been.

We went into this thing.

Understanding what.

All the questions would be we think we've got a pretty good case.

And they're two totally different processes, so they work differently.

And we've made very good progress the undertakings as an example in the UK, but.

We've made really good progress in multi countries for.

Working through the hurdles.

So we don't really see anything.

Anticipate anything negative haven't seen any indication of that.

It's really just.

There is a there is a way in which they go about your some metals and then questions and their responses in that review cycle. So.

If that goes slower that can push us.

<unk>.

One request goes into another question Thats another delay.

And that's what guidance the thing I think what we've.

We still feel good about.

Nine to 18 month guideline that we gave out.

Okay, Thanks, everyone stay well.

Thank you.

Our next question comes from the line of Ryan <unk> with Needham <unk> Company. Your line is open.

Our next question.

My questions have been answered, but wondering if you could give us a ballpark on the magnitude of the slipped out on revenue in the government systems side from these NSA approvals and such would be helpful. Thank you.

Yeah, Hey, I can give you at least a sale.

One of the things I can get totally aligned.

So we talked about last quarter that we saw these pressures kind of keep pouring into the early Garen I think.

That's exactly what we're seeing.

The other thing is.

Q1 is seasonally our lightest quarter and that government you got to keep all of those things in play.

I think that can be when you think about that.

That will be the highlight.

So Q.

Just last time, we talked about these delays and certifications.

Moving out of lashed out of.

We actually had expected him at <unk>.

And our.

December quarter, and then we said it wasn't going to happen in Q4.

Good afternoon in Q1 or Q2 of our FY 'twenty three so June or September .

We don't see it occurring in Q1, we think it's going to move into the September quarter.

Which means you won't start really getting deliveries of those products until Q3 and Q4.

So we've said that we haven't seen any reduction in demand. These are really just getting this through the certification process. So they can be delivered.

So we don't see an overall reduction in terms of what the value of those are going to be it's just delayed.

Got it.

Also passed on.

Also has in part shortages that have occurred in the last couple of quarters couple of products that we're resolving.

That has been resolved for right now that should start shipping.

But like John said.

We expect another sequentially down quarter in.

Our June quarter versus the March quarter overall.

Until that starts to come back.

Got it.

Very helpful. Thanks, so much.

Thanks, Rob.

Thank you.

Our next question comes from the line of Louis Dipalma with William Blair. Your line is open.

Rick.

Good afternoon.

Okay.

Right.

What.

The sequential decrease in <unk>.

Satellite services revenue was.

Entirely driven by.

Lower subscribers on the consumer broadband side you did thank you.

Capacity shift towards.

Mobility or were there any like one time item.

That drove that decrease.

At this time.

Primarily we did have a little better.

And pressure on yet.

Yes.

And accuracy, but the other thing is there is a little bit of seasonality that we see in Q4 from Q3, and the IFC business as well.

Keep in mind.

Sounds good.

We'll see.

The expected launch of <unk>.

Entry into service of Viasat, three I think you said for January .

<unk> lead to.

Stabilization for <unk>.

Residential broadband revenue or do you expect.

Residential broadband revenue.

<unk>.

Continued to decline.

Fiscal 2023 and for that to be like.

More than offset by increases.

The aviation Ross.

So overall in 'twenty three.

Yes.

In the first three quarters, we expect residential to continue to decline as we allocate more of the bandwidth to to the employee.

Yes.

We've talked about the number of airplanes that we expect to activate and Thats really whats going to drive.

In the residential subscriber counts for the fourth quarter, we're expecting that to turnaround and start growing again, and we do have expectations of growing the residential.

Subscriber count in the U S as well as internationally going forward from there.

So you should see first as it stabilizes a little bit and then start to grow.

One thing I'd just like to comment on about this is remember when the IFC business got hit with Covid.

We put a lot of resources towards offsetting the residential side.

And then with.

Alright see coming back that you see in residential contract.

Allocate bandwidth again, so that's one of the things we like about having multi.

Multiples of these businesses so that we can.

Allocate resources and real time.

In those market areas.

Great.

Currently you expect both.

U S consumer broadband subscribers.

Potentially.

Our <unk> to increase.

Beginning I think towards.

At the end of <unk>.

2023.

Yes, yes.

On a sequential basis, we expect subscribers to start growing.

In the fourth quarter as we as we get capacity I think from an RPM perspective.

We will then we're going to we're going to look at what the market is.

One of the things that has driven our offer up to the fact that we didn't have very much bandwidth. So we have a lot more bandwidth then we will probably be able to grow in multiple segments of the market not just the way we've been growing which is through hierarchy.

I think we will have.

Better plans that are moving to a more valuable plan some of those will be higher priced than what we have now I think we'll also be able to introduce plans that are lower price and what we have now because we have a lot more.

More bandwidth inventory to work with so I think our food trajectory.

We'll have more clarity on that probably once we start going to market with those services.

Sounds good.

Really.

And Marci.

Are there any plans to develop a K a band antenna that would be compatible with Paul.

The Viasat and.

The inmarsat.

Network.

But.

When you're bidding on.

International <unk>.

Aircraft right now.

Like when you are clear.

Aircraft over the next two years.

And they would be compatible with <unk>.

Either network.

So there is increased redundancy.

Yes.

So as a matter of fact right now.

One of the things that we've done is we've tried to make our keybank terminals compatible with large number of different K band satellites. So for instance.

We don't we don't use all of these compatibilities, yet, but just talking about our own network right. Now for instance that we work on MDM satellites in Australia, we work on Brazilian Telegraph satellite in Brazil, We work on Eutelsat satellites, we work on other third party satellites in Europe , and we can work on Saturdays.

Asia.

The antenna systems to work on those.

Those.

With respect to Inmarsat satellites in particular all of ours.

Antennas or are capable of working on the Inmarsat satellite the inmarsat terminals are capable of working on our satellites.

It may be.

Network or modem Compatibilities that we'll have to work out either an individual airplanes or we also can work.

Do those things within the network gateways, which satisfies all these things have to connect to those gateways.

We have quite a bit of maneuvering room.

To be able to get that but our objective is really to be able to get.

Global.

Coverage pretty much immediately between the two between the two fleets and to have that additional redundancy that you're referring to.

With our own satellites and metrics as well.

Yes.

We think thats going to be really attractive feature for our customers.

Just think of it as an ability to run one.

That works.

Yes, hi.

So.

Could roam on ours or vice versa.

Okay. Thanks, and then one final question here.

A rough estimate.

Your backlog for.

Aviation My commercial aircraft under under contract I know you said that.

1830 online.

Expect to have.

2400 online by the end of this.

2023, how much how.

How many more planes will you have.

<unk> backlog.

<unk>.

Or like right now are like at the end of fiscal 2023 to <unk>.

In the future.

So right now we have Jeff.

Albert.

And you can think of it Jeff.

Just to be clear that does include this outlet.

Partner.

Okay.

Yes.

Backlog.

And for that.

Backlog.

It seems interesting that I think two years ago or three years ago, you announced an order for United Airlines 737 Max.

And I think thats for small quantity, but I think they have a very large order of <unk>.

Max aircrafts and they have a lot of like options and a lot of your customers like delta have options.

<unk> hundred 21 neo.

And I think American airlines as options with the <unk> hundred 20 Neo.

Dan.

Does your backlog.

Contain like options or are they just for like firm orders for aircraft.

Alright.

Just the firm orders that they have made to date problems in our backlog some of those orders include aircraft.

Those customers have a preference for southwest water.

Aircraft at southwest that are yet to be delivered to southwest so.

Some of these are on new aircrafts that takeout orders for for example.

But in the in.

In the cases of that.

Our goal is.

To be kind of the best provider to each one of these guys. So that when they do order new aircrafts.

Those are coming with our service.

And that's our mission is to make both customers very happy to provide the best available.

Connectivity and value to the airline customers so that all of our future orders have already booked.

That's clarity.

That's pretty much work.

That's pretty much worked.

The other thing the other part of this because we do get questions about that as well.

Well, we want to do is make it so that the surface on that.

Claims that are equipped with ours.

So good that they are that they are motivated to update there.

An existing fleet as well and Thats current wells.

Those are the ways in which we continued to grow orders with existing customers.

I think that.

Although the fixtures and play with pretty much all of the airlines that we serve down.

Can I ask another question actually on <unk>.

On this topic for a lot of your airline contracts.

Have you contemplated.

The potential transition.

To free Wifi.

Like are you able to at a high level.

Thanks, Destiny, but would be.

Impact.

Average revenue per aircraft and that type of transition.

Transition.

Yeah.

So yes, yes to both of those I think that one of the things that.

Here's the kind of I think the way that I would but what's going on in the airline industry. The last couple of years.

For a while there was a focus on.

Connecting individual names.

Individual claim filed out of route show me what you can do on that claim I think what what has had.

Happen is as people as airlines see that.

Value and utility of Wi Fi.

And they realize that they get.

Customer satisfaction from passengers that use the connectivity the notion.

Making it free has become more important and then when they make it free and the usage grows what they find is that.

But the real issue is less connecting individual claims and more making that service reliable for their fleet as a whole, especially in the places that their items, where where there would be the most claims so that's where the that's where the focus has gone and what that means is that when airlines make Wi Fi.

Purchase decisions.

The issue about.

What would it look like for us to go free we want that as an option and what does that mean or connectivity at our hub cities, what does that mean for service level agreements.

<unk> becomes a part of the negotiation.

I think I think that from our perspective.

<unk>.

Yes, it's good it's good for us.

Gets more usage.

What are the things you are working with airlines to make sure that it's good for them as well.

Those are the two things that go with it.

The way in which they do it would have some impact on the specific revenue numbers or the number average revenue per airplane that we would get but the upshot is it serve.

We are going to be good for us to get more usage.

We think it will get you there as well.

That's what we're aiming inventory one of the reasons why.

Not as essentially sometimes is transparent to some of the competition.

Some of this is because it is important to our airline customers.

They communicate what their strategy is and what we've followed them somehow.

Times it might be easier.

And for us to describe it as like I said some of our competition has.

But we've found that to the extent that we're allowing them to communicate their strategy.

That's a better partnership for us with them.

Sounds good thanks.

The secret cleared nature.

And our backlog at IAG coming out of the year and just under 1000 aircraft that definitely does not include anything from southwest does not.

Yes.

Okay, so with southwest there might be like 1400 or so.

Okay.

Okay.

There are different estimates out there about southwest Airlines purchase plan to offer new rates, which is what what is covered under the agreement.

Probably the thing to do would be to look at estimates.

I mean, it's for what southwest deliveries would be.

I think we have a good shot of capturing all of those.

Thanks.

Yes.

Didn't use any any qualified or are you just not fewer.

Future aircraft from southwest.

That's a pretty long timeline.

What was that.

There are 737%.

They are going to the Max.

Yes.

Okay.

We have to continue to Eric.

Okay.

Great. Thanks, Thanks for the clarification and thanks Rick.

Mark.

Yep.

Thank you.

Our next question comes from the line of Chris Quilty with Quilty analytics. Your line is open.

Thanks, I know you just said that its better that your customers communicate their strategy, but one notable aspect of that southwest announcement as they've historically been all K used so do you see this as a.

Permanent forward shift by southwest to Ku band system.

But I really think it's an issue of K or Ku I think it's an issue.

Southwest.

Our job right now is to go make southwest.

The planes that fly on our network with southwest such a good quality of service that they want to know the rest of their fleet I mean thats the challenge.

It's their job to go figure out what.

To the extent that they're going to do that or do they have another supplier if they're happy with it.

I will let that play out.

I think that.

And truly it out about <unk>.

Look what I would say.

Designed satellites and space systems to take advantage of that.

Things that you can do a K band back they don't come automatically typically use case right.

From having some of the features that we have in our satellites in the specialty Viasat three.

That should give us the ability to deliver a better service category in Florida, and we think that.

So they should and want to do the best they can with the service that they have now.

Competent.

To give them the option to do to do better so what we really what.

This is Scott.

The concept of purchase intent right somebody buys and what's the probability of a fly on you again within the next year and to the extent that we can positively impact purchase intent.

By having our service award that's really our mission.

Okay.

Great.

Shifting gears in the commercial network segment, you've been on fire on the ground and tenant segment.

Just looking out to the next fiscal year should we expect that trend to continue or.

Should we see it level off a bit and can you maybe detail. What you see is the factors that have been driving that growth.

Yes sure Craig.

Thank you.

Do you think about next year.

A couple of pieces right.

One is part of our growth.

This year was IFC terminal delivery.

And I was going to be a big part of our growth next year.

This concludes the lever of Clark.

Betsy.

And we're going to deal.

600 next year.

Sorry about that thanks.

But a little lower.

A little lower in Q4.

Yes, it's really tied to our customer demand.

Nevertheless, we are meeting our schedule Oscar.

Aircraft deliveries and also type certification completions right. Those are the those are kind of indicating drivers and then.

Also on the ground and antenna business, yes.

They had.

Significant wins, and I think that theyre going to continue to grow into next year count.

And Chris.

I think your question to sort of highlights the point, which is we have kind of.

We tend to get business hidden lumps, whether its government contracts are so big and pennant contracts or airline wins.

And so the timing of growth and a lot of those businesses is really dependent on the timing of those things the one business.

We have that thats really not subject to that which is the U S. Residential business. It was actually the one that we're using to feed the <unk> business. So.

That's what's really contributing to the lumpiness that.

You're seeing it.

In Q4, and going into one and two and underway.

Fiscal year 'twenty three will play out so the good thing is that we have most of the lumps.

In the pipeline now.

But that's those are the things that drive the rate of growth on an annual basis pretty good on a quarterly basis. It can be it can be unpredictable.

Got you and on the ground equipment side was it mostly earth observation driven.

Yes.

Yes, great.

The other thing on that.

Syed I think one of the things that.

In November and Dod.

Hello.

So with that is that.

This.

CSP Communications Services Project Award that we got from NASA, which is really intended to kind of leverage.

The combination of the ground antenna business that we have with space really for both commercial and government customers and I think that those two things are pretty synergistic and it's worth adding that.

As it relates to kind of the future prospects of our granite business.

Got you and Keith I hate to keep asking antenna questions but.

Where have you made any progress or do you have any prognostication on your electronically steered flat panel antenna when it should be in the market and where specifically you are looking to position that relative to dozen or more competitive products that are coming to market.

Okay. So.

While our main on our main objective and we think this should be what our customer's main objective is for those antennas.

Liver services most cost effectively.

So that that's what I think that's what's going to differentiate our antennas.

In order to do that you may need.

Our network capabilities, but some of the things that we're building in a little bit unique to our networks. So we're a lot more focused on our antennas.

The delivery mechanism for our service that we are kind of as a standalone product.

<unk> causes us to look at.

Some of the features or.

Specifications as some of these competing products differently than somebody who is just in the market for an antenna might okay. So that's kind of a guiding principle for us.

And some of those things really impact your ability to make a connection but the flexibility that you have in scheduling. These connections among all the different services that we have just to build on the theme. We're very focused on this productivity measures some of which comes from high capacity satellite some of it comes from.

Our ability to move bandwidth around it.

Deliver.

On the service level agreements reliably really efficiently. So some of the features that we built it just makes the scheduling with bandwidth.

A lot more efficient or the ability to use more.

Multiple orbits really efficiently that's the other thing that we're putting in some of the first applications that youll see for that may be in land mobile applications using sort of.

The.

Give us some more.

Copies of the antennas that we flowed for instance.

In business aviation.

But what are the main products that we have an aim for is the commercial aviation market.

We'll talk about that more as we get closer to it and give our customers an opportunity to weigh in on.

The specifics that would definitely focused in on that.

Let me ask a question Mark.

Just to try to clarify.

One way to approach this would be Youre building antennas for mass market call. It the lowest common denominator approach.

One is.

We would buy it if they have the features that we wanted right, but they don't want to talk a little bit about that okay. So you.

You said that could.

So I think just to build on Rick's point, which is an important one is a lot of times when people buy antennas as a product one of the things that we look at is what is the worst case performance of that under particular combination.

Sure.

Look angles or satellites that youre using there.

Don't look at sort of what's the worst case performance because if they go off and buy service from a third party, they're not quite sure what.

Okay attributes of the satellites to deliver that service would be.

For us knowing that we have.

Pretty big fleet with some very unique capabilities, what makes a lot of sense for us to come up with a with an antenna specification that delivers the best weighted average performance under all operating conditions for those customers. So EBIT. So as an example.

We had a worst case performance specification.

At that condition of rose only a very small fraction of the time and still allow us to reliably meet our service level agreement, we would choose that.

Yes.

At acceptable criteria if it what it did was it enabled way.

Way better performance most of the time under the operating conditions that we expect for that customer.

Difference between sort of expected or weighted average and worst case can have a really big impact on your choice of antenna technology. When Youre, just selling third party antennas customers might rationally choose a different one.

So.

We're not doing these things so we can be able to sell a bunch of independents and make money on tenants in those markets.

Really to enable and type of services from a covenant.

And the markets that we're addressing.

That makes sense.

Yes got you so youre designing an antenna that's optimized for your service.

Yes.

Ultimately, it's not just our own satellites, but a whole bunch of partner satellites as well.

<unk> a number of partners.

Yes.

<unk> discussed, but we think theyre going to be really valuable in the future and a multi orbit.

Right.

Greg you want to elaborate on that multi orbit strategy.

No other than to tell you, though we think that the.

What we're trying to do with the multi orbit strategy is get the best of each of each orbit that attributes right. So.

The <unk> satellites, what we've got is really we think really really low cost bandwidth and the ability to deliver a lot of bandwidth in these very congested places like Airlines split example.

That would be another example, so you'd want to use that if to the extent that you have traffic that debt.

<unk> from a lower propagation delay a little bit of agency that you guys use.

Non geo for that or if you are.

Coverage in places that midyear doesn't reach as well.

Non geo for that.

It also depending on what customers you get traffic evolves. We also can have.

Hotspots in an area that we didn't expect and so to the extent that we can use partner satellites to serve those that converted customers have we wouldn't otherwise be able to get because we can filling those hotspots. So those are the main reasons for using.

Multiple satellite partners as well as not with not Geos.

Being one one set of those partners.

Gotcha, So I'll wait till next quarter. So you can tell us who is non Dod.

Okay I appreciate that.

Feedback.

Alright, Thanks, guys. Thanks, Chris.

Thank you.

Our final question comes from the line of London Park, Morgan Stanley with a follow up your lines.

Sure.

Great. Thanks for taking the follow up guys. I was just wondering if you could elaborate on.

U S residential terrestrial competition that you've talked about in the letter.

And then just one quick one for you Sean.

Just taking the $700 million EBITDA guidance with the $1 four.

Trillion Capex guidance, so should we be thinking about cash burn in the $700 million range or are there other working capital or other considerations to think about.

I would think.

One thing to keep in mind that stay at that one.

We're going to be growing our Ami and are working to kind of see the channel for that credit to ahead of Viasat three.

Is that a little better working capital burden there.

Relative on a year over year basis, I think I'll leave all of them.

Thanks, there's leverage to be around that four and a half bar Kal.

You can see some places to triangulate around.

Okay Alright.

Alright.

Okay, and then on the residential market probably.

Okay.

The longer term.

These factors are probably going to be government subsidies.

And kind of build out fiber and cable terrestrial networks. So.

You bet.

Yes.

What we're really looking at is what impact that has on the addressable market I think others have talked about that too we think the addressable market will go down.

Sure.

We think it creates opportunities that may be different price points than what we've operated at now.

And if you look at kind of.

Long term.

I think a couple of years ago, We gave pie chart that showed our expectations of what our satellite services markets total markets would be FY 'twenty five.

That that FY 'twenty five.

Pat.

It showed.

Sort of modest growth in the U S residential market as a whole, but a much larger fraction of our total business coming from these international and mobility market that still the way we see it taking into account what's going on in the.

What's going on in the build out of subsidy in the U S market I think we have room to grow by.

Like hundreds of thousands were not.

Spending on talking about growing by millions of subscribers in the U S market you would say we.

We will be able to dramatically increase our addressable market and planned tight on that.

Much smaller share of the market.

Of our addressable market.

So that's what we're anticipating.

Okay.

Are you guys you guys are testing those new plans before.

Yes, Hi, Zachary actually enter service or yes, yes, we are and you'll see what we're doing right now I would say one of our most promising plans is really around higher quality and more video streaming and Thats gone really really well.

Hundreds of subscribers that were testing.

That's gone really really well that'll be one of the things that we do it with Viasat three youll see US also began testing.

Higher speed plans than we have now we topped out at 100 Megabits per second will probably go to meaningfully higher and higher speeds.

I think what Youll see is us kind of moving in both directions.

Clinton better.

Better premium more premium than what we have now and then others that are more value based which could involve improvements in performance, but also could be a little bit lower price points or the other.

The other point I would make.

Subsidies is one of the ways in which the government is using subsidies is.

I think on the 18th.

ACP program to basically.

It's like.

About your program for lower income fixed broadband subscribers and that is available to satellite service providers as well and so that's something that we're just going to be adopting kind of at the end of <unk>.

So sometime this quarter.

That will.

Cope with.

Our kind of markets that are more price sensitive or economically stressed.

That we've had before.

So you didn't participate in the EBV program.

Yes, the ACP program I think is going to be more.

More significant than that.

It's pretty it's a pretty straightforward program people qualify they get like a ticket type $30 a month.

That's a pretty pretty meaningful I think thats the one I think.

I'm not sure I think we are <unk>, but I think the ACP. One we think is going to be probably more impactful and it does appear that that will continue on its a pretty popular program.

And you talked about fiber and cable are you seeing fixed wireless at all.

We.

We do I mean, we see each of those I think that.

It's kind of like the T mobile version of mid band is probably.

Probably going to be more representative of.

You got a few on fixed is that its a fixed wireless that rides on mobile service, that's probably going to be more impactful than dedicated fixed wireless I think.

Probably the long term thing, but if you look at the way.

T. Mobile has done is they've got to subordinate to the intermodal surface. So that is going to have an impact on geographically, where it can roll out the extent to which you can roll out and.

Kind of a long term duration of that but that's probably the kind of the <unk>.

Most.

The biggest potential I think one of the things that's really going to.

We see.

Repeatedly is.

People are coming and going, especially when they're economically economically stressful times people just go into a mobile plan and not having a fixed line at all and we actually think Theres some opportunity.

Around augmenting some of that stuff as well so we think.

We never wanted to think it's all in business as usual way using the same tools and different markets. So.

Whenever there's a change there is opportunity, but I think our.

The main.

The biggest theme for us.

Play out in the.

In the fourth quarter, one of the statistics that we put in.

Well it was I think in the fourth quarter.

FY 'twenty, 239% of our satellite services revenue came from local and international compared to 16% in the same quarter a year ago. So that that's the that's the long term trend I think we definitely we're not it's not like we're.

Abandoning or it's going away in the residential market. We think the real growth is in the mobility market and a lot of growth internationally, where some of those factors pattern hinging on the U S Army are happening.

Unlikely to happen.

Okay. Thank you everyone.

Thanks Randy.

Thanks.

I would now like to turn the call back over to Mr. Bonawitz for closing remarks.

Okay. Thanks, So first of all let's say thank you guys for showing up we know there were a bunch of complex right now.

We couldn't make it because of the most complex, but we appreciate it.

All the good questions and you guys for.

Listening to the call.

Make a couple of points before we just finished one is that.

Like we did in Q4 and this year, we constantly balance investments in the EBITDA.

Try to make sure we're hitting the targets that we put out there and make sure that.

We can borrow the money we're trying to borrow finished the viasat three constellation and get it up and to the extent, we are a little bit more room to accelerate on some of the things we think are valuable.

We don't kind of constrained. So we're constantly doing that I think you guys have been around for a while.

And I'm really excited.

Because of the upcoming Viasat three launch.

And our site.

So we are excited about that so just.

For Mark and me and the rest of the team I just wanted to thank you guys for us generally.

On the call another really good year, we think our operational momentum is.

Really strong and very positive on top of that.

Getting to that first Viasat, three launch, which we've been waiting for.

Yes, the capacity, we sorely needed.

Regionally and allow us to improve our service offerings.

While we've been waiting for.

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It gives us the global capabilities and opportunities to enhance our expanding mobile focus.

Global basis, we're excited about that.

And at the same time, our teams here remain hyper focused on.

Executing the plan so.

It enables us to expand the business, so don't hesitate to contact Peter or the rest of our team. If you have more questions on our results or other topics today and look forward to updating you.

Next quarter. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now.