Q1 2025 Viasat Inc Earnings Call

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Meg: Please stand by. Your program is about to begin. My name is Meg, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to ViaSat's first quarter fiscal year 2025 earnings results conference call. All lines have been placed on mute to prevent any background noise.

Unknown Executive: Please stand by. Your program is about to begin.

Meg: My name is Meg, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to ViaSat's first quarter fiscal year 2025 earnings results conference call. All lines have been phased on you to prevent any background noise.

Meg: Please stand by. Your program is about to begin. My name is Meg and I will be your conference facilitator this afternoon.

Speaker Change: At this time, I would like to welcome everyone to ViaSat's First Quarter Fiscal Year 2025 Earnings Results Conference Call. All lines have been phased on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session.

Meg: After the speaker's remarks, there will be a question-and-answer session.

Meg: I would now like to turn the call over to Ms. Lisa Curran, Vice President of Investor Relations. Ms. Curran, you may begin your conference.

Meg: After the speaker's remarks, there will be a question and answer session. I would now like to turn the call over to Ms. Lisa Koren, Vice President of Investor Relations. Ms. Koren, you may begin your conference.

Lisa Koren: I would now like to turn the call over to Ms. Lisa Koren, Vice President of Investor Relations. Ms. Koren, you may begin your conference.

Lisa Curran: Thanks, Meg. We will present certain non-gaft financial measures on today's poll. Information required by the SEC relating to these non-GAAP financial measures is available in our Q1 FY25 shareholder letter on the Investor Relations section of our website. Please note that to provide a more meaningful comparison of a result of operations year over year, results for the first quarter at FY 2025 are compared to give supplemental combined results for the prior year period. These supplemental combined results are based on the combination of ViaSat's historical reported results with in-reset historical reported results for periods prior to the acquisition, with adjustments to reflect purchase price accounting, the conversion of in-reset results from ISRS to gas, and conforming changes to reflect a by a set presentation of its results.

Lisa Koren: Thanks, Meg. We will present certain non-GAAP financial measures on today's call. Information required by the SEC relating to these non-GAAP financial measures is available in our Q1 FY25 shareholder letter on the Investor Relations section of our website. Please note that to provide a more meaningful comparison of our results of operations year over year, results for the first quarter of FY2025 are compared against supplemental combined results for the prior year period. These supplemental combined results are based on the combination of ViaSat's historical reported results with Inmersat's historical reported results for periods prior to the acquisition, with adjustments to reflect purchase price accounting, the conversion of Inmersat's results from IFRS to GAAP, and conforming changes to reflect ViaSat's presentation of its results.

Lisa Koren: Thanks Meg. We will present certain non-GAAP financial measures on today's call. Information required by the SEC relating to these non-GAAP financial measures is available in our Q1 FY25 shareholder letter on the Investor Relations section of our website.

Speaker Change: Please note that to provide a more meaningful comparison of our results of operations year over year, results for the first quarter of FY 2025 are compared against supplemental combined results for the prior year period.

These supplemental combined results are based on the combination of ViaSat's historical reported results with Inmarsat's historical reported results for periods prior to the acquisition, with adjustments to reflect purchase price accounting. The conversion of Inmarsat's results from IFRS to GAAP

Lisa Curran: The supplemental combined financial information was prepared to better illustrate or invest through the performance of our business following our acquisition of In-reset. Unless otherwise noted, the presented financial measures reflect year-over-year increases or decreases relative to the supplemental combined financial data in our Q1 FY25 shareholder letter on the Investor Relations section of our website. During the presentation, we will describe certain of the more significant factors that impacted year-over-year performance.

Lisa Koren: The supplemental combined financial information was prepared to better illustrate for investors the performance of our business following our acquisition of MRSAT. Unless otherwise noted, the presented financial measures reflect year-over-year increases or decreases relative to the supplemental combined financial data in our Q1 FY25 shareholder letter on the investor relations section of our website. During the presentation, we will describe certain of the more significant factors that impacted year-over-year performance.

and conforming changes to reflect BIOSAT's presentation of its results.

Speaker Change: The supplemental combined financial information was prepared to better illustrate for investors the performance of our business following our acquisition of MRSAT.

Speaker Change: Unless otherwise noted, the presented financial measures reflect year-over-year increases or decreases relative to the supplemental combined financial data in our Q1 FY25 shareholder letter on the Investor Relations section of our website.

During the presentation, we will describe certain of the more significant factors that impacted year-over-year performance. We will also make forward-looking statements within the meaning of the federal security laws, including statements regarding events or developments that we expect or anticipate will or may occur in the future.

Lisa Curran: We will also make forward-looking statements within the meaning of the federal security laws, including statements regarding events or developments that we expect to anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, and actual results might differ materially from many forward-looking statements that we make today. Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings and annual report on Form 10-K. These forward-looking statements speak only as of the date they are made, and we do not assume any obligation to update any forward-looking statements.

Lisa Koren: We will also make forward-looking statements within the meaning of the Federal Security Clause, including statements regarding events or developments that we expect or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, and actual results might differ materially from any forward-looking statements that we make today. Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings and annual report on Form 10-K. These forward-looking statements speak only as of the date they are made, and we do not assume any obligation to update any forward-looking statements. With that, I'll turn it over to Mark Dankberg, Chairman and CEO.

Speaker Change: These forward-looking statements are subject to a number of risks and uncertainties, and actual results might differ materially from any forward-looking statements that we make today.

Speaker Change: Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC Filings and Annual Report on Form 10-K .

Speaker Change: These forward-looking statements speak only as of the date they are made, and we do not assume any obligation to update any forward-looking statements. With that, I'll turn it over to Mark Dankberg, Chairman and CEO .

Mark Dankberg: With that, I'll turn it over to Mark Daper, Chairman and CEO.

Mark Dankberg: Good afternoon, and thanks for joining us today. With me, along with Lisa, we have Guru Gowrappan, our President, and Shawn Duffy, our CFO. We encourage you to read the shareholder letter and reference the slides we posted on our website earlier this afternoon for more details. I'll give a quick overview of the shareholder letter, Guru will cover the financial results and highlights and our growth outlook, and then we'll take, Our first quarter fiscal year 2025 results were a little better than expected in terms of year-over-year revenue and adjusted EBITDA growth on a combined basis, as described in the shareholder letter at

Mark Dankberg: Good afternoon, and thanks for joining us today.

Mark Dankberg: With me, along with Lisa, we have Guru Gaurapan, our president, and Sean Duffy, our CFO. We encourage reading the shareholder letter and referencing the slides we posted on our website earlier this afternoon for more details. I'll give a quick overview of the shareholder letter. Guru will cover the financial results and highlights, and our growth outlook, and then we'll think questions. Our first quarter of fiscal year 2025 results were a little better than expected in terms of year-to-year revenue and adjusted the EBITDA growth. On a combined basis, as described in the shareholder letter at slide. We also contribute to take actions to strengthen our capital structure while thoughtfully investing in positioning for a promising future.

Mark Dankberg: Good afternoon and thanks for joining us today. With me, along with Lisa, we have Guru Gowrappan, our President, and Shawn Duffy, our CFO .

Mark Dankberg: We encourage reading the shareholder letter and referencing the slides we posted on our website earlier this afternoon for more details.

Speaker Change: I'll give a quick overview of the shareholder letter, Guru will cover the financial results and highlights in our growth outlook, and then we'll take questions.

Speaker Change: Our first quarter fiscal year 2025 results were a little better than expected in terms of year-over-year revenue and adjusted EBITDA growth on a combined basis as described in the shareholder letter and slides.

Mark Dankberg: We also continue to take actions to strengthen our capital structure while thoughtfully investing in positioning for a promising future. Our ongoing services revenue, coupled with expected activations in aviation, defense, and advanced technology orders, existing and new backlog, and order pipeline, enable us to increase our outlook for fiscal year 2025. We're pleased with the financial results this quarter but remain focused on our agenda of both near and long-term goals, including overcoming the ViaSat 3.1 anomaly. We're making steady progress in supporting the improvements in our growth. Well, these points are all very important.

Guru Gowrappan: We also continue to take actions to strengthen our capital structure while thoughtfully investing in positioning for a promising future.

Mark Dankberg: Our ongoing services revenue, coupled with expected activations and aviation, could defense and advance technology orders, existing and new backlog and order pipeline, enable us to increase our outlook for a fiscal year 2025. We're pleased with the financial results of the sport but remain focused on our agenda about near and long-term goals, including overcoming the virus at three by one anomaly. We're making steady progress at supporting the improvements in our growth outlook, while these points are all very important. The headway we're making on multiple fronts creates optionality in the ways and sequences in which we address our challenges and opportunities.

Mark Dankberg: Our ongoing services revenue, coupled with expected activations in aviation, good defense and advanced technology orders, existing and new backlog, and order pipeline enable us to increase our outlook for fiscal year 2025.

Guru Gowrappan: We're pleased with the financial results this quarter, but remain focused on our agenda of both near and long-term goals, including overcoming the ViaSat 3.1 anomaly.

We're making steady progress at supporting the improvements in our growth outlook. While these points are all very important,

Mark Dankberg: The headway we're making on multiple fronts creates optionality in the ways and sequences in which we address our challenges and opportunities. So that list is first, get our satellites under construction into service, and holistically address our capital structure and trim our leverage ratios from current levels. We want to continue to groom our business portfolio to leverage the highest leverage satellite and network technologies that attract customers and partners and ultimately yield attractive recurring revenue.

Mark Dankberg: The headway we're making on multiple fronts creates optionality in the ways and sequences in which we address our challenges and opportunities.

Mark Dankberg: So this list is first: get our satellites under construction into service. And holistically address our capital structure and trim our leverages from current levels. We want to continue to groom our business portfolio to the highest hybrid satellite and network technologies that attract customers and partners and ultimately yield attractive recurring revenue. We want to continue the MERSAT integration to drive higher returns on our network and harmonize our services and operations and achieve our cash flow and collection objectives. We want to cultivate an enduring and economically a creative satellite operator partnership ecosystem to augment coverage and capacity and increase multi-orbit capability.

Speaker Change: So that list is first, get our satellites under construction into service.

Guru Gowrappan: and holistically address our capital structure and trim our leverage ratios from current levels.

Guru Gowrappan: We want to continue to groom our business portfolio to the highest leverage satellite and network technologies that attract customers and partners and ultimately yield attractive recurring revenue.

Mark Dankberg: We want to continue the InMarsat integration to drive higher returns on our network and harmonize our services and operations, and achieve our cash flow inflection objective. We want to cultivate an enduring and economically accretive satellite operator partnership ecosystem to augment coverage and capacity and increase multi-orbit capability. We want to continue to win and execute new defense and advanced technology programs with attractive growth potential and durable competitive advantages in technologies such as ground network, Unique Free Space Optical Applications, Mission-Specific Phased Array Terminals, Space-Based Cybersecurity, and others.

We want to continue the InMarsat integration to drive higher returns on our network and harmonize our services and operations and achieve our cash flow inflection objectives.

Guru Gowrappan: We want to cultivate an enduring and economically accretive satellite operator partnership ecosystem to augment coverage and capacity and increase multi-orbit capability.

Mark Dankberg: We want to continue to win and execute new defense and advanced technology programs with attractive growth potential and durable competitive advantages and technologies such as ground networks, unique free space optical applications, mission-specific phase-to-ray terminals, space-based cybersecurity, and others. We can leverage these technologies into recurring revenues for commercial and government customers, and we can use these technologies to help create and promote a competitive ecosystem of partners. And finally, we want to capture a leadership position in the emerging directive device services market by leveraging our substantial installed base of Arrow, Maritime, and mobile users, emerging 3GPP standards, open architectures, and our existing resources.

Speaker Change: We want to continue to win and execute new defense and advanced technology programs with attractive growth potential and durable competitive advantages in key technologies such as ground networks.

Speaker Change: unique reasespace optical applications mission specific phase to rate terminals space-based cybersecurity and others

Mark Dankberg: We can leverage these technologies into recurring revenues for commercial and government customers, and we can use these technologies to help create and promote a competitive ecosystem of partners. And finally, we want to capture a leadership position in the emerging direct-to-device services market by leveraging our substantial installed base of Aero, Maritime, and Mobile users, emerging 3GPP standards, Open Architectures, and our existing resources.

Guru Gowrappan: We can leverage these technologies into recurring revenues for commercial and government customers.

Guru Gowrappan: And we can use these technologies to help create and promote a competitive ecosystem of partners.

Guru Gowrappan: And finally, we want to capture a leadership position in the emerging directed device services market by leveraging our substantial installed base of Aero, Maritime, and Mobile users, emerging 3GPP standards,

Mark Dankberg: We want to foster innovative business models serving in extremely large-based satellite-enabled mobile devices and platforms, optimizing our mobile satellite services spectrum licenses and evolving L band to create value for the millions of people that depend on our services for safety, connectivity, and the air at sea and on land. Some of the near-term satellite milestones included by ISAT-3, Flight-3, completed thermal vacuum testing has an important integrated satellite testing milestone. We announced this week at ISAT-3, Flight-1 entered into commercial service over the winter. We've achieved the operational speeds well over 200 megabits per second to invite aircraft, and it's now in use for an iconic event.

Mark Dankberg: We want to foster innovative business models serving an extremely large base of satellite-enabled mobile devices and platforms, optimizing our mobile satellite services spectrum licenses and evolving L-Band to create value for the millions of people that depend on our services for safety and connectivity in the air, at sea, and on land. Some of the near-term satellite milestones include ViaSat-3 Flight 3, which completed thermal vacuum testing. That's an important integrated satellite testing milestone. We announced this week that ViaSat-3 Flight 1 entered into commercial service over the Americas.

Mark Dankberg: Open Architectures, and our existing resources.

Mark Dankberg: We want to foster innovative business models serving an extremely large base of satellite-enabled mobile devices and platforms.

Mark Dankberg: optimizing our mobile satellite services spectrum licenses and evolving L-Band to create value for the millions of people that depend on our services for safety and connectivity in the air, at sea, and on land.

Mark Dankberg: Some of the near-term satellite milestones include Biosat-3 Flight 3 completed thermal vacuum testing. That's an important integrated satellite testing milestone.

Mark Dankberg: We announce this week that ViaSat-3 Flight 1 entered into commercial service over the Americas.

Mark Dankberg: We've achieved operational speeds well over 200 megabits per second for in-flight connectivity, and it's now in use for in-flight connectivity. It will both cover new routes and enhance services on existing coverage. And we've been able to prove dynamic beamforming and terabit per second payload technology that it works. We expect our partner, EOSAT, to launch our two K-ABAM polar coverage payloads, GX10A and B, very shortly. They're expected to enter service in early to mid 2025.

Mark Dankberg: We've achieved operational speeds well over 200 megabits per second to in-flight aircraft and it's now in use for in-flight connectivity. It will both cover new routes and enhance services on existing coverage areas.

Mark Dankberg: He will both cover new routes and enhanced services on existing cover cherries. And we've been able to prove the dynamic beamforming and terrapid per second payload technology that it works. We expect our partner, Yusat, to launch our two KABAM polar-covered payloads, GX10A and B, very shortly. They're expected to enter service in early to mid 2025. As a reminder, our financial results have been reframed to give investors more insight into the business areas already yielding attractive growth, those with attractive potential, better concurrently challenged, and a place for emerging areas such as the direct device and other advanced technologies that we believe merit and best retention.

Mark Dankberg: And we've been able to prove dynamic beamforming and terabit per second payload technology that it works.

Mark Dankberg: We expect our partner, EOSAT, to launch our two K-ABAN polar coverage payloads, GX10 A and B, very shortly. They're expected to enter service in early to mid-2025.

Mark Dankberg: As a reminder, our financial results have been reframed to give investors more insight into the business areas already yielding attractive growth, those with attractive potential but are currently challenged, and a place for emerging areas such as direct-to-device and other advanced technologies that we believe merit investor attention. Guru will provide more detailed information on the composition of our new segments and the segment revenue breakouts that we have added to our quarterly performance updates.

Speaker Change: As a reminder, our financial results have been reframed to give investors more insight into the business areas already yielding attractive growth.

Mark Dankberg: Those with attractive potential that are currently challenged and a place for emerging areas such as the direct-to-device and other advanced technologies that we believe merit and fester attention.

Mark Dankberg: Google provides more detailed information on the composition of our new segments and a segment revenue breakouts that we've added for our quarterly performance updates.

Guru Gowrappan: Guru will provide more detailed information on the composition of our new segments and the segment revenue breakouts that we have added for our quarterly performance updates.

Mark Dankberg: While we're very focused on executing in the near term, Bias has always planned for the long term. That's enabled us to sustain growth for decades, build key franchise businesses, and evolve our technology, business models, and market segments to sustain competitive advantages. This is even in the presence of generational technology, evolutions, and consistently shifting playing fields in a competitive environment. We're balancing those near and long-term challenges and opportunities.

Mark Dankberg: While we're very focused on executing in the near term, ViaSat has always planned for the long term. That's enabled us to sustain growth for decades, build key franchise businesses, and evolve our technology, business models, and market segments to sustain competitive advantages, even in the presence of generational technological evolutions and consistently shifting playing fields in competitive environments. With that, I'll hand it over to Guru.

Guru Gowrappan: While we're very focused on executing in the near term, ViaSat's always...

Guru Gowrappan: Plan for the long term. That's enabled us to sustain growth for decades. Build key franchise businesses.

Guru Gowrappan: and above.

Guru Gowrappan: our technology business models and market segments to sustain

Mark Dankberg: Competitive advantages even in the presence of generational technology evolutions and consistently shifting playing fields in competitive environments.

Mark Dankberg: With that, I'll hand it over to Google.

Speaker Change: we're balancing those near and long-term challenges and opportunities with that 'm hand it over to buu

Guru Gowrappan: Great. Thanks, Mark.

Guru Gaurapan: Great. Thanks, Mark.

Guru Gaurapan: I will cover three topics. Financial performance, our new segment structure, and an update to our outlook. Why has had generated good financial performance during Q1 FY25? We earned combined revenue growth of 6% year over year, and combined with just a deeper doubt growth of 16% year over year driven by defense and advanced technologies and aviation. The positive operating leverage reflects strong revenue blow through from icy licensing and tactical networking and advanced technologies and the continued benefit from our acquisition-related operating synergies. Now some color on the financial results. Q1 FY25 revenue was 1.1 billion, up 44% compared to 780 million in Q1 FY24.

buu: Great. Thanks, Mark. I will cover three topics, financial performance, our new segment structure, and an update to our outlook.

Guru Gowrappan: I will cover three topics, financial performance, our new segment structure, and an update to our outlook. ViaSat generated good financial performance during Q1 FY25. We earned combined revenue growth of 6% year over year and combined adjusted EBITDA growth of 16% year over year driven by defense and advanced technologies and aviation. The positive operating leverage reflects strong revenue flow through from IP licensing and practical networking and advanced technologies and the continued benefit from our acquisition-related operating synergies. Now, some color on the financial results.

Speaker Change: ViaSat generated good financial performance during Q1 FY25. We earned combined revenue growth of 6% year-over-year and combined adjusted EBITDA growth of 16% year-over-year driven by defense and advanced technologies and aviation.

Speaker Change: The positive operating leverage reflects strong revenue flow-through from IP licensing and practical networking and advanced technologies and the continued benefit from our acquisition-related operating synergies.

Guru Gowrappan: Q1 FY25 revenue was $1.1 billion, up 44% compared to $780 million in Q1 FY24. Combined revenue was up 6% year-over-year, largely driven by growth in our defense and advanced technology segment and aviation. The net loss of $33 million for Q1 FY25 improved compared to the net loss of $77 million in Q1 FY24 primarily due to improved operating performance, which was partially offset by higher interest and tax expenses. Just a little bit, that increased by 16% year over year from the incremental revenue flow through in defense and advanced technologies, which more than offset expected declines in fixed broadband service revenue and higher R&D expenditure. Q1 FY25 capital expenditures declined 20% year-over-year to $301 million.

Speaker Change: Now some color on the financial results.

Speaker Change: Q1 FY25 revenue was $1.1 billion up 44% compared to $780 million in Q1 FY24.

Guru Gaurapan: Combined revenue was up 6% year over year, largely driven by growth in our defense and advanced technology segment and aviation. Net loss of 33 million for Q1 FY25 improved compared to the net loss of 77 million in Q1 FY24, primarily due to improved operating performance, which was partially offset by higher interest and tax expenses. Q1 FY25 with just a deeper doubt was 404 million in increase of 120% year over year. Just a deeper doubt increased by 16% year over year, from the incremental revenue flow through in defense and advanced technologies, which more than offset expected decline in fixed broadband service revenue and fire R&D expenditures.

Speaker Change: Combined revenue was up 6% year-over-year, largely driven by growth in our defense and advanced technology segment and aviation.

Speaker Change: Net loss of $33 million for Q1 FY25 improved compared to the net loss of $77 million in Q1 FY24, primarily due to improved operating performance, which was partially offset by higher interest and tax expenses.

Speaker Change: Q1 FY25 or just a little bit was $404 million, an increase of 120% year-over-year.

Speaker Change: Just to repeat, that increased by 16% year-over-year from the incremental revenue flow through in defense and advanced technologies, which more than offset expected declines in fixed broadband service revenue and higher R&D expenditures.

Guru Gaurapan: Q1 FY25, the capital expenditures declined 20% year over year to 301 million. Combined capital expenditures decreased 33% year over year, primarily due to lower satellite expenditures, customer premise equipment, and general infrastructure costs. Sequentially, net leverage declined 0.1 times to approximately 3.5 times LTM or just Cbidah as of Q1 at Y-25, which is substantially favorable to the plan at the time the more set acquisition was announced. We ended the quarter with 2.9 billion of liquidity, including 1.8 billion cash and cash equivalents at quarter-end, and we have a fully funded path to our positive free cash flow inflection by end of Q1 at Y-26.

Speaker Change: Q1 FY25 capital expenditures declined 20% year-over-year to $301 million. Combined capital expenditures decreased 33% year-over-year, primarily due to lower satellite expenditures, customer premise equipment, and general infrastructure costs.

Guru Gowrappan: Combined capital expenditures decreased 33% year-over-year, primarily due to lower satellite expenditures, customer premise equipment, and general infrastructure costs. Additionally, sequentially, net leverage declined 0.1 times to approximately 3.5 times LTM or just CBITDA as of Q1 FY25, which is substantially favorable to the plan at the time the Inmarsat acquisition was announced. We ended the quarter with $2.9 billion of liquidity, including $1.8 billion in cash and cash equivalents at quarter end, and we have a fully funded path to our positive free cash flow inflection by the end of Q1 FY26.

Mark Dankberg: Sequentially, net leverage declined 0.1 times to approximately 3.5 times LTM or just CBIDTA as of Q1 FY25, which is substantially favorable to the plan at the time the Inmarsat acquisition was announced.

Mark Dankberg: We ended the quarter with $2.9 billion of liquidity, including $1.8 billion cash and cash equivalents at quarter end. And we have a fully funded path to our positive free cash flow inflection by end of Q1 FY26.

Guru Gaurapan: And finally, subsequent to quarter-end, why has that deployed approximately 150 million of cash to repurchase 152 million principal amount of Inmarsat and Y-sat nodes in the open market? We opportunistically repurchased 102 million principal amount of Inmarsat 2026 secured nodes at an average price of 98.2 and 50 million principal amount of Y-sat 2025 and secured nodes at an average price of 99.2.

Guru Gowrappan: And finally, subsequent to quarter end, ViaSat deployed approximately $150 million of cash to repurchase 152 million principal amount of Inmarsat and ViaSat nodes in the open market. We opportunistically repurchased 102 million principal amount of Inmarsat 2026 secured nodes at an average price of 98.2 and 50 million principal amount of ViaSat 2025 unsecured nodes at an average price Before we go further, I want to provide a bit more color on our new section, Communication Services, and Defense and Advanced Technology. We initiated the new segment reporting structure to give additional insight into our portfolio and drivers of value.

Mark Dankberg: And finally, subsequent to quarter end, ViaSat deployed approximately $150 million of cash to repurchase $152 million principal amount of Inmarsat and ViaSat nodes in the open market.

Guru Gowrappan: Last month, we provided historical financials for the new segments and business leaders. Our communication services segment includes all the businesses using our satellite network for connectivity services. All the Inmarsat businesses are included in this segment. Communication Services is comprised of Aviation, Government.com, Maritime, and Fixed Services and Other, or FSNO. FSNO includes U.S. and international residential fixed broadband, energy, and enterprise.

Guru Gowrappan: The majority of this segment is recurring service revenue, and the product revenue is primarily related to terminal sales supporting services. The majority of our capex is for our satellite network, which includes space and ground, enabling these services. The Defense and Advanced Technology segment has four business units: Information Security and Cyber Defense, which sells our Type 1 encryption products; Space and Mission Systems, which includes antenna systems.

Mark Dankberg: We opportunistically repurchased 102 million principal amount of Inmarsat 2026 secured notes at an average price of 98.2 and 50 million principal amount of ViaSat 2025 unsecured notes at an average price of 99.2.

Guru Gaurapan: Before we go further, I want to provide a bit more color on our new set, Communication Services and Defense and Advanced Technologies. We initiated the new segment reporting structure to give additional insight into our portfolio and drivers of value. Last month, we provided historical financials for the new segments and business lines. Our communication services segment includes all the businesses using our satellite network for connectivity services. All the Inmarsat businesses are included in this segment. Communication Services is comprised of aviation, government fatcom, maritime, and fixed services and other, or FSNO. FSNO includes U.S. and international residential fixed broadband, energy, and enterprise.

Guru Gowrappan: Tactical Networking, which is mostly our Trellisware subsidiary, of which we own approximately 60%, and Advanced Technologies, another which includes IP licensing revenue. Most of the revenue in the segment is product revenue, which includes IP licensing and can be lumpy quarter to quarter. The service revenue in the segment is primarily warranty and support for the product. The defense and advanced technologies business lines have a low capital intensity.

Speaker Change: Before we go further, I want to provide a bit more color on our new sector, Communication Services and Defense and Advanced Technologies.

Mark Dankberg: We initiated the new segment reporting structure to give additional insight into our portfolio and drivers of value. Last month, we provided historical financials for the new segments and business lines.

Mark Dankberg: Our communications services segment includes all the businesses using our satellite network for connectivity services.

Mark Dankberg: All the Inmarsat businesses are included in this segment.

Mark Dankberg: Communication Services is comprised of Aviation, Government.com, Maritime, and Fixed Services and Other, or FSNO. FSNO includes U.S. and international residential fixed broadband, energy, and enterprise.

Guru Gaurapan: The majority of the segment is recurring service revenue. The product revenue is primarily related to terminal sales supporting services. The majority of our capital is for our satellite network, which includes space and ground enabling these services.

Mark Dankberg: The majority of this segment is recurring service revenue. The product revenue is primarily related to terminal sales supporting services. The majority of our capex is for our satellite network, which includes space and ground, enabling these services.

Guru Gaurapan: The defense and advanced technology segment has four business links. Information security and cyber defense, which sells our Type 1 encryption products; space and mission systems, which includes antenna systems; tactical networking, which is mostly our TrellisWare subsidiary, of which we own approximately 60 percent; and advanced technologies and other, which includes IP licensing revenue. Most of the revenue in this segment is product revenue, which includes IP licensing and can be lumpy quarter to quarter. The service revenue in this segment is primarily warranty and support for the products. The defense and advanced technologies business line have a low capital intensity.

Mark Dankberg: The Defense and Advanced Technologies segment has four business lines.

Mark Dankberg: Information Security and Cyber Defense, which sells our Type 1 encryption products.

Mark Dankberg: Space and Mission Systems, which includes Antenna Systems.

Mark Dankberg: Tactical Networking, which is mostly our Trellisware subsidiary, of which we own approximately 60%, and Advanced Technologies and others, which includes IP licensing revenue.

Mark Dankberg: Most of the revenue in the segment is product revenue, which includes IP licensing and can be lumpy quarter to quarter. The service revenue in the segment is primarily warranty and support for the products.

Mark Dankberg: The defense and advanced technology business lines have a low capital intensity.

Guru Gaurapan: And we appreciate the feedback investors provided in this process. It is an important step in raising the visibility of our valuable franchisees. We will continue to work to highlight and unlock the value that bias had is creating for its shareholders.

Mark Dankberg: And we appreciate the feedback investors provided in this process. It is an important step in raising the visibility of our valuable franchises. We will continue to work to highlight and unlock the value that ViaSat is creating for its shareholders.

Guru Gaurapan: Now, let's take a closer look at communication services performance during the quarter. Aviation continues to compete very well in the market. Commercial IFC ended the quarter with 3,750 aircraft in service, up about 16 percent year-over-year, with over 1,460 aircraft in contracted backlog. We're also in the contractual process of adding about 350 incremental aircraft to the backlog, including from six new airlines. We achieved mid-teens year-over-year growth in both the number of commercial and business aviation aircraft and service. And while we are confident in the year-over-year growth outlook and trajectory for aviation, it's worth noting that we expect four-door, four-door results to reflect continued OEM delays and some impact due to the effects of the recent global cybersecurity software outage impacting our customers.

Guru Gowrappan: And we appreciate the feedback investors provided in this process. It is an important step in raising the visibility of valuable franchisees. We will continue to work to highlight and unlock the value that ViaSat is creating for its shareholders. Now, let's take a closer look at communication services performance during the quarter. Aviation continues to compete very well in the market. Commercial IFC ended the quarter with 3,750 aircraft in service, up about 16% year-over-year, and over 1,460 aircraft in contracted backlog.

Speaker Change: Now let's take a closer look at communication services performance during the quarter.

Speaker Change: Aviation continues to compete very well in the market. Commercial IFC ended the quarter with 3,750 aircraft in service, up about 16% year-over-year, with over 1,460 aircraft in contracted backlog.

Guru Gowrappan: We're also in the contractual process of adding about 350 incremental aircraft to the backlog, including from six new airlines. We achieved mid-teens year-over-year growth in both the number of commercial and business aviation aircraft in service. And while we are confident in the year-over-year growth outlook and trajectory for aviation, it's worth noting that we expect quarter-over-quarter results to reflect continued OEM delays and some impact due to the effects of the recent global cybersecurity software outage impacting our customers. U.S. fixed broadband revenue declined as expected, driven by fewer residential subscribers. We continue to de-emphasize U.S. fixed broadband to support our rapid and higher-margin commercial IFC in aviation.

Speaker Change: We're also in the contractual process of adding about 350 incremental aircraft to the backlog, including from six new airlines.

Mark Dankberg: We achieved mid-teens year-over-year growth in both the number of commercial and business aviation aircraft in service.

Mark Dankberg: And while we are confident in the year-over-year growth outlook and trajectory for aviation, it's worth noting that we expect quarter-over-quarter results to reflect continued OEM delays and some impact due to the effects of the recent global cybersecurity software outage impacting our customers.

Guru Gaurapan: U.S. Big broadband revenue declined as expected, driven by fewer residential subscribers. We continue to de-emphasize U.S. Bigs broadband to support our rapid and higher-margin commercial IFC in aviation. Our government-sack-comp business line announced we are expanding work with Airbus Defence and Space to integrate via SAS dual-band broadband terminal, which is called the GAT-5530, into the Spanish TEMODES C-295 maritime patrol aircraft fleet to provide a highly flexible multi-band multi-orbit broadband SAT-comp capability to support missions utilizing next-generation pain-sack and G-satellites. We are excited because the Airbus C-295 aircraft is operated by 37 countries around the world with hundreds of aircraft in operation and hundreds more on order.

Meg: Please stand by. Your program is about to begin. My name is Meg and I will be your conference facilitator this afternoon.

Mark Dankberg: U.S. fixed broadband revenue declined as expected driven by fewer residential subscribers. We continue to de-emphasize U.S. fixed broadband to support our rapid and higher margin commercial IFC in aviation.

Meg: At this time, I would like to welcome everyone to ViaSat's first quarter fiscal year 2025 earnings results conference call. All lines have been phased on you to prevent any background noise. After the speaker's remarks, there will be a question and answer session.

Guru Gowrappan: Our government SATCOM business line announced that we are expanding work with Airbus Defense and Space to integrate ViaSat's dual-band broadband terminal, which is called the GAT5530, into the Spanish MOD's C295 maritime patrol aircraft fleet to provide a highly flexible multi-band, multi-orbit broadband SATCOM capability to support missions utilizing next-generation SpainSat NG satellites. We are excited because the Airbus C295 aircraft is operated by 37 countries around the world, with hundreds of aircraft in operation and hundreds more on order.

Mark Dankberg: Our government SATCOM business line announced we are expanding work with Airbus Defence and Space to integrate ViaSat's dual-band broadband terminal, which is called the GAT5530, into the Spanish CEMOD's C295 maritime patrol aircraft fleet to provide a highly flexible, multi-band, multi-orbit broadband SATCOM capability to support missions utilizing next-generation SpainSat NG satellites.

Lisa Curran: I would now like to turn the call over to Ms. Lisa Curran, Vice President of Investor Relations, Ms. Curran, you may begin your conference. Thanks, Meg. We will present certain non-gaft financial measures on today's poll. Information required by the SEC relating to these non-gaft financial measures is available in our Q1 FY25 shareholder letter on the Investor Relations section of our website. Please note that to provide a more meaningful comparison of a result of operations year over year, results for the first quarter at FY 2025 are compared to give supplemental combined results for the prior year period.

Mark Dankberg: We are excited because the Airbus C295 aircraft is operated by 37 countries around the world with hundreds of aircraft in operation and hundreds more on order.

Guru Gaurapan: We are seeing more international government products and service opportunities within Mars Lab. During the quarter, we began collaborating with UAVionics, a pioneer in certified avionics for crude and uncrewed aviation, to integrate via SAS wireless module into its compact multi-link airborne radio system. Wireless provides secure, resilient, broadband communications for commercial UAVs and enables real-time monitoring for beyond visual line of sight UAV operations. We believe broadband unmanned vehicles of all size are an exciting growth opportunity, especially as we modernize our broadband capabilities. Nexus Wave, maritime's new hybrid multi-orbit managed service targeting commercial shipping customers, brings global coverage, speed, capacity, security, and resilience to meet enterprise class operational needs and Kuwait Fair.

Guru Gowrappan: We are seeing more international government product and service opportunities within MARSAT. During the quarter, we began collaborating with UAvionics, a pioneer in certified avionics for crude and uncrude aviation, to integrate ViaSat's WellIRIS module into its compact, multi-linked airborne radio system. WellIRIS provides secure, resilient L-band communications for commercial UAVs and enables real-time monitoring for beyond the visual line off-site UAV operations.

Mark Dankberg: We are seeing more international government products and service opportunities within MARSAT.

Mark Dankberg: During the quarter, we began collaborating with U-Avionics, a pioneer in certified avionics for crude and uncrude aviation, to integrate ViaSat's WellIRIS module into its compact, multi-linked airborne radio system.

Lisa Curran: These supplemental combined results are based on the combination of viaSat's historical reported results with in-reset historical reported results for periods prior to the acquisition, with adjustments to reflect purchase price accounting, the conversion of in-reset results from ISRS to gas, and conforming changes to reflect by a set presentation of its results. The supplemental combined financial information was prepared to better illustrate or invest through the performance of our business following our acquisition of in-reset.

Mark Dankberg: WellIRIS provides secure, resilient LBAN communications for commercial UAVs and enables real-time monitoring for beyond-visual-line, off-site UAV operations.

Guru Gowrappan: We believe L-band unmanned vehicles of all sizes are an exciting growth opportunity, especially as we modernize our L-band capability. NexusWave, Maritime's new hybrid multi-orbit managed service targeting commercial shipping customers brings global coverage, speed, capacity, security, and resilience to meet enterprise class operational needs and crew welfare. Nexus Wave is building anticipation in the market, and we expect to launch the beta service during Q2 FY25. In Q1 FY25, communications services revenue was $827 million, up 48% compared to $560 million in Q1 FY24.

Mark Dankberg: We believe L-band unmanned vehicles of all sizes are an exciting growth opportunity, especially as we modernize our L-band capabilities.

Mark Dankberg: NexusWave, Maritime's new hybrid multi-orbit managed service targeting commercial shipping customers, brings global coverage, speed, capacity, security, and resilience to meet enterprise-class operational needs and crew welfare.

Lisa Curran: Unless otherwise noted, the presented financial measures reflect year over year increases or decreases relative to the supplemental combined financial data in our Q1 FY25 shareholder letter on the Investor Relations section of our website. During the presentation, we will describe certain of the more significant factors that impacted year over year performance. We will also make forward-looking statements within the meaning of the federal security laws, including statements regarding events or developments that we expect to anticipate will or may occur in the future.

Guru Gaurapan: Nexus Wave is building an anticipation in the market, and we expect to launch beta service during Q2 FY25. In Q1 FY25, communication services revenue was 827 million, up 48% compared to 560 million in Q1 FY24. Combined revenue was down 2% year over year, driven by the expected decline in US fixed broadband services and segment product revenue. Q1 FY25 communication services was 308 million, an increase of 98% year over year, combined with the expected decline, 4% year over year, primarily from lower revenue flow through from US fixed broadband in the FF and O business line and maritime services.

Mark Dankberg: Nexus Wave is building anticipation in the market and we expect to launch beta service during Q2 FY25.

Lisa Curran: These forward-looking statements are subject to a number of risks and uncertainties and actual results might differ materially from many forward-looking statements that we make today. Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC pylons and annual report on form 10K. These forward-looking statements speak only as of the date they are made, and we do not assume any obligation to update any forward-looking statements.

Mark Dankberg: In Q1 FY25 communications services revenue was $827 million, up 48% compared to $560 million in Q1 FY24.

Guru Gowrappan: Combined revenue was down 2% year over year, driven by the expected decline in U.S. fixed broadband services and segment product revenue. Q1 FY25 communication services electricity bid was $308 million, an increase of 98% year-over-year. Combined electricity bids declined 4% year-over-year, primarily from lower revenue flow-through from U.S. fixed broadband in the FSNL business line and maritime services.

Speaker Change: Combined revenue was down 2% year-over-year, driven by the expected decline in U.S. fixed broadband services and segment product revenue.

Speaker Change: Q1 FY25 communication services electricity bid was $308 million, an increase of 98% year-over-year. Combined electricity bid declined 4% year-over-year, primarily from lower revenue flow-through from U.S. fixed broadband in the FSNL business line and maritime services.

Mark Dankberg: With that, I'll turn it over to Mark Daper, Chairman, and CEO. Good afternoon, and thanks for joining us today. With me, along with Lisa, we have Guru Gaurapan, our president, and Sean Duffy, our CFO. We encourage reading the shareholder letter and referencing the slides we posted on our website earlier this afternoon for more details. I'll give a quick overview of the shareholder letter. Guru will cover the financial results and highlights, and our growth outlook, and then we'll think questions.

Guru Gaurapan: Now to defense and advance technologies performance during the Q4. Space and mission systems received awards of approximately 85 million related to multi-function space-story antennas, free space optics, and antenna systems infrastructure with supported services. Tactical networking received a tool for the loud activation of certain product upgrades. Once activated, we recognized IC licensing revenue on these products that had been sold over the prior few years. The business is expected to benefit from the ongoing sales, but with substantially fewer units per quarter than we recognized in Q1 FY25. Advanced technology is also benefited from strong IP licensing revenue.

Guru Gowrappan: Now to defense and advanced technologies performance during the quarter. Space and Mission Systems received awards of approximately $85 million related to multi-function spaced array antennas, free space optics, and antenna systems infrastructure with supported services. Tactical Networking received approvals that allowed the activation of certain product upgrades. Once activated, we recognized IC licensing revenue on these products that had been sold over the prior few years. The business is expected to benefit from the ongoing sales, but with substantially fewer units per quarter than we recognized in Q1 FY25.

Speaker Change: Now to defense and advanced technologies performance during the quarter.

Speaker Change: Space and Mission Systems received awards of approximately $85 million related to multi-function space-to-array antennas, free space optics, and antenna systems infrastructure with supported services.

Speaker Change: Tactical Networking received approvals that allowed activation of certain product upgrades. Once activated, we recognized IC licensing revenue on these products that had been sold over the prior few years.

Mark Dankberg: Our first quarter of fiscal year 2025 results were a little better than expected in terms of year-to-year revenue and adjusted the EBITDA growth. On a combined basis, as described in the shareholder letter at slide. We also contribute to take actions to strengthen our capital structure while thoughtfully investing in positioning for a promising future. Our ongoing services revenue coupled with expected activations and aviation could defense and advance technology orders, existing and new backlog and order pipeline enable us to increase our outlook for a fiscal year 2025.

Speaker Change: The business is expected to benefit from the ongoing sales, but with substantially fewer units per quarter than we recognized in Q1 FY25.

Guru Gowrappan: Advanced technology is also benefiting from strong IP licensing revenue. There are two components to the current licensing revenue, an annual fee, which typically occurs in Q1, as it did this quarter, and a per unit sold fee, which is distributed throughout the year.

Guru Gaurapan: There are two components to the current licensing revenue: an annual fee, which typically occurs in Q1, as it did this quarter, and a per-unit sold fee, which is distributed to our beer. During Q1 FY25, we benefited from both the annual license and the per-unit company. For remainder of FY25, we expected to generate revenue from the per-unit component only. Information security and cyber-defense won awards for type 1 encryption products totaling over 45 million, largely reflecting growing data-centered demand to unbibe the geographic expansion and AI applications. Q1 FY25 book-to-bill ratio was 1.2 times, with continued momentum into Q2 FY25.

Mark Dankberg: Advanced technologies also benefited from strong IP licensing revenue. There are two components to the current licensing revenue, an annual fee, which typically occurs in Q1, as it did this quarter, and a per-unit sold fee, which is distributed throughout the year.

Guru Gowrappan: During Q1 FY25, we benefited from both the annual license and the per-unit component. For the remainder of FY25, we expect to generate revenue from the per-unit component only. Information Security and Cyber Defense won awards for Type 1 encryption products, totaling over $45 million, largely reflecting growing data center demand driven by geographic expansion and AI applications.

Speaker Change: during q one at p twenty-five benefited from both the annual license and thedeper unit company and for remainder of at p twenty five we expect to genergrate revenue from deper unit conpetent on

Mark Dankberg: We're pleased with the financial results of the sport but remain focused on our agenda about near and long-term goals, including overcoming the virus at three by one anomaly. We're making steady progress at supporting the improvements in our growth outlook, while these points are all very important. The headway we're making on multiple fronts creates optionality in the ways and sequences in which we address our challenges and opportunities.

Speaker Change: Information Security and Cyber Defense won awards for Type I encryption products totaling over $45 million, largely reflecting growing data center demand driven by geographic expansion and AI applications.

Guru Gowrappan: QNF by 25 The book to bill ratio was 1.2 times, with continued momentum into Q2 FY25. In Q1 FY25, defense and advanced technologies revenue was $300 million, up 37% compared to $220 million in Q1 FY24. Product revenue was up 45% year over year, driven by the strong IP licensing revenue in tactical networks and advanced technology.

Mark Dankberg: Q1 FY25 book to bill ratio was 1.2 times with continued momentum into Q2 FY25.

Guru Gaurapan: In Q1, FY25 defense and advanced technologies revenue was 300 million, up 37 percent compared to 220 million in Q1 FY24. Product revenue was up 45 percent year or year, driven by the strong IP licensing revenue in tactical networks and advanced technologies. Q1 FY25 defense and technology statistic that was 96 million more than per-poke the year ago period reflecting the value of the technology portfolio. Strong operating leverage from revenue flow through in both tactical networks and advanced technologies drove exceptional performance.

Mark Dankberg: So that list is first, get our satellites under construction into service. And holistically address our capital structure and trim our leverages from current levels. We want to continue to groom our business portfolio to the highest hybrid satellite and network technologies that attract customers and partners and ultimately yield attractive recurring revenue. We want to continue the MERSAT integration to drive higher returns on our network and harmonize our services and operations and achieve our cash flow and collection objectives.

Mark Dankberg: In Q1 FY25, defense and advanced technologies revenue was $300 million, up 37% compared to $220 million in Q1 FY24.

Mark Dankberg: Product revenue was up 45% year-over-year driven by the strong IP licensing revenue in tactical networks and advanced technologies.

Guru Gowrappan: Q1 FY25 Defense and Technology Statistics that was $96 million, more than triple the year-ago period, reflecting the value of the technology portfolio. Strong operating leverage from revenue flow through in both practical network and advanced technologies drove exceptional performance. Overall, it was a good quarter and a strong start to FY25.

Mark Dankberg: Q1 FY25 Defence and Technology Statistics that was 96 million, more than triple the year-ago period reflecting the value of the technology portfolio.

Mark Dankberg: We want to cultivate and enduring and economically a creative satellite operator partnership ecosystem to augment coverage and capacity and increase multi-orbid capability. We want to continue to win and execute new defense and advanced technology programs with attractive growth potential and durable competitive advantages and technologies such as ground networks, unique free space optical applications, mission-specific phase-to-ray terminals, space-based cybersecurity and others. We can leverage these technologies into recurring revenues for commercial and government customers and we can use these technologies to help create and promote a competitive ecosystem of partners.

Mark Dankberg: Strong operating leverage from revenue flow through in both practical network and advanced technologies drove exceptional performance.

Guru Gaurapan: Overall, it was a good quarter and a strong start to FY25. Next, we are raising our outlook slightly to reflect strong Q1 results, confidence in our market competitive positions in pipeline, and despite continued aircraft OEM delivery has. Our first quarter financial performance reflects our competitive solutions and strong execution in our aviation and defense businesses. Within our defense and advanced technology segment, we generated high flow through IP revenue in two businesses. A tactical networking business benefited from a couple of years of retroactive product upgrades in the quarter. We expected business to continue to benefit from upgraded product sales going forward at a normalized level.

Speaker Change: Overall, it was a good quarter and a strong start to FY25.

Guru Gowrappan: Next, we are raising our outlook slightly to reflect strong Q1 results, confidence in our market competitive positions and pipeline, and despite continued aircraft OEM delivery. Our first quarter financial performance reflects our competitive solutions and strong execution in our aviation and defense business. Within our defense and advanced technology segment, we generated high flow-through IP revenue in two businesses. Our tactical networking business benefited from a couple of years of retroactive product upgrades during the quarter. We expect the business to continue to benefit from upgraded product sales going forward at a normalized level. Advanced Technologies also benefited from annual licenses during the course.

Mark Dankberg: Next, we are raising our outlook slightly to reflect strong Q1 results, confidence in our market, competitive positions, and pipeline, and despite continued aircraft OEM delivery ahead.

Mark Dankberg: Our first quarter financial performance reflects our competitive solutions and strong execution in our aviation and defense businesses.

Speaker Change: Within our defense and advanced technology segment, we generated high flow-through IP revenue in two businesses. Our tactical networking business benefited from a couple of years of retroactive product upgrades in the quarter. We expect the business to continue to benefit from upgraded product sales going forward at a normalized level.

Guru Gaurapan: Advanced technologies benefited from annual licenses in the quarter. So, out of the year, we expect more modest per-unit licensing revenue. Finally, because this is only the first quarter of FY25, we are raising the low end of our FY25 revenue just a little bit down and maintaining our view of FY26. For comparison purposes, we remove the 95 million revenue and 86 million our just a little bit that catch up benefit from the litigation settlement from FY24 reference results. Therefore, our guidance is based on FY24 revenue of approximately 4.5 billion and our just a little bit down of approximately 1.5 billion.

Mark Dankberg: And finally, we want to capture a leadership position in the emerging directive device services market by leveraging our substantial installed base of Arrow, Maritime and mobile users, emerging 3GPP standards, open architectures and our existing resources. We want to foster innovative business models serving in extremely large-based satellite-enabled mobile devices and platforms, optimizing our mobile satellite services spectrum licenses and evolving L band to create value for the millions of people that depend on our services for safety, connectivity, and the air at sea and on land.

Guru Gowrappan: Throughout the year, we expect more modest per unit licensing revenue. Finally, because this is only the first quarter of FY25, we are raising the low end of our FY25 revenue estimates and are just a little bit doubtful in maintaining our view of FY26. For comparison purposes, we remove the $95 million revenue and $86 million Adjusted EBITDA cash-up benefit from the litigation settlement from FY24 reference results.

Mark Dankberg: Advanced technologies benefited from annual licenses in the court.

Mark Dankberg: Throughout the year, we expect more modest per-unit licensing revenue.

Mark Dankberg: Finally, because this is only the first quarter of FY25, we are raising the low end of our FY25 revenue and are just a little bit doubtful in maintaining our view of FY26.

Mark Dankberg: For comparison purposes, we remove the $95 million revenue and $86 million participative cash-out benefit from the litigation settlement from FY24 reference results.

Guru Gowrappan: Therefore, our guidance is based on FY24 revenue of approximately $4.5 billion and Adjusted EBITDA of approximately $1.5 billion. We now expect FY25 revenue to be flat to slightly up year-over-year, with year-over-year adjusted EBITDA growth in the mid-single digits. We believe FY25 revenue growth, excluding an expected decline in U.S. fixed broadband associated with the ViaSat-3F1 anomaly, would have been up mid-single digits. We have also provided additional segment-level details in the Outlook section of our shareholder letter. We remain prudent with our top-line guides given uncertainties with delayed OEM commercial aircraft deliveries and airline overcapacity. For FY25, we expect capital expenditures to decline to a range of $1.4 billion to $1.5 billion.

Mark Dankberg: Therefore, our guidance is based on FY24 revenue of approximately $4.5 billion and adjusted EBITDA of approximately $1.5 billion.

Guru Gaurapan: We now expect F-25 revenue to be flat to slightly up year-over-year, with year-over-year adjusted EBITDA growth in the mid-single digits. We believe F-25 revenue growth, excluding and expected decline in U.S. fixed-broad band associated with device at 3F-1 anomaly, would have been up mid-single visits. We have also provided additional segment level details in the outlook section of our shareholder letter. We remain prudent with our top-line guide given uncertainties with delayed OEM commercial aircraft deliveries and airline overall capacity. In F-25, we expect capital expenditures to decline to a range of 1.4 billion to 1.5 billion. We include capitalized interest in our capex guidance, which is approximately 200 million per year, but will decline in future years as we place satellites into service.

Mark Dankberg: Some of the near-term satellite milestones included by ISAT-3, Flight-3, completed thermal vacuum testing has an important integrated satellite testing milestone. We announced this week at ISAT-3, Flight-1, entered into commercial service over the winter. We've achieved the operational speeds well over 200 megabits per second to invite aircraft and it's now in use for an iconic event. He will both cover new routes and enhanced services on existing cover cherries. And we've been able to prove the dynamic beamforming and terrapid per second payload technology that it works.

Speaker Change: We now expect FY25 revenue to be flat to slightly up year-over-year, with year-over-year adjusted EBITDA growth in the mid-single digits.

Speaker Change: We believe FY25 revenue growth, excluding an expected decline in U.S. fixed broadband associated with the ViaSat-3F1 anomaly, would have been up mid-single digits.

Speaker Change: We have also provided additional segment-level details in the Outlook section of our shareholder letter. We remain prudent with our top-line guides given uncertainties with delayed OEM commercial aircraft deliveries and airline overcapacity.

Mark Dankberg: We expect our partner, Yusat, to launch our two KABAM polar-covered payloads, GX10A and B very shortly. They're expected to enter service in early to mid 2025. As a reminder, our financial results have been reframed to give investors more insight into the business areas already yielding attractive growth, those with attractive potential, better concurrently challenged, and a place for emerging areas such as the direct device and other advanced technologies that we believe merit and best retention.

Mark Dankberg: In FY25, we expect capital expenditures to decline to a range of $1.4 billion to $1.5 billion. We include capitalized interest in our CAPEX guidance, which is approximately $200 million per year, but will decline in future years as we place satellites into service.

Guru Gowrappan: We include capitalized interest in our CAPEX guidance, which is approximately $200 million per year but will decline in future years as we place satellites into service. We continue to expect our investments in our satellite network projects and success-based CapEx to exceed two-thirds of our total capital spend, with less than one-third associated with our maintenance and general CapEx activities. Looking forward, we expect our investments in Gold CapEx to continue to decline and generate an improving pre-cash flow trend.

Guru Gaurapan: We continue to expect our investments in our satellite network projects and success-based capex feed to third of our total capital sand with less than 1.3 associated with our maintenance and general capex activities. Looking forward, we expect our investments in growth capex to continue to decline and generate an improving pre-cast flow trend. In F-26, we continue to expect to grow revenue and adjust to EBITDA relative to F-25 as the majority of our 3.4 billion assets and reconstruction go into commercial service. Capital expenditures for F-26 are expected to decline to a range of 1.1 billion to 1.2 billion.

Mark Dankberg: We continue to expect our investments in our satellite network projects and success-based CAPEX to exceed two-thirds of our total capital spend, with less than one-third associated with our maintenance and general CAPEX activities.

Mark Dankberg: Google provides more detailed information on the composition of our new segments and a segment revenue breakouts that we've added for our quarterly performance updates. While we're very focused on executing in the near term, bias has always planned for the long term. That's enabled us to sustain growth for decades, build key franchise businesses, and evolve our technology, business models and market segments to sustain competitive advantages. This is even in the presence of generational technology, evolutions, and consistently shifting playing fields in competitive environment. We're balancing those near and long-term challenges and opportunities.

Mark Dankberg: Looking forward, we expect our investments in Gold CapEx to continue to decline and generate an improving pre-cash flow trend.

Guru Gowrappan: In FY26, we continue to expect to grow revenue and adjust to EBITDA relative to FY25 as the majority of our $3.4 billion assets under construction go into commercial sales. Capital expenditures for FY26 are expected to decline to a range of $1.1 billion to $1.2 billion.

Mark Dankberg: In FY26, we continue to expect to grow revenue and are just a little bit dull relative to FY25, as the majority of our $3.4 billion assets under construction go into commercial service.

Mark Dankberg: Capital expenditures for FY26 are expected to decline to a range of $1.1 billion to $1.2 billion.

Guru Gaurapan: We believe F-25 provides the foundation for multi-year accelerated growth in revenue and adjust to EBITDA growth and continue to step down in capex in F-26. As Mark mentioned, we are making study progress on multiple fronts in support of the improvements in our growth outage. We continue to expect an inflection point in positive pre-cast flow by end of first quarter F-26. Our path to positive pre-cast flow is expected to be driven by double-digit operating cash flow growth and continued declines in capex expenditures as the normalized capex expenditure is in line with satellites going into commercial service.

Speaker Change: We believe FY25 provides the foundation for multi-year accelerated growth in revenue and artistry product growth and continued step-down in CapEx in FY26.

Guru Gowrappan: We believe FY25 provides the foundation for multi-year accelerated growth in revenue and artistry product growth and a continued step down in CapEx in FY26. As Mark mentioned, we are making steady progress on multiple fronts in support of the improvements in our growth outcomes. We continue to expect an inflection point in positive free cash flow by the end of the first quarter FY26. Our path to positive free cash flow is expected to be driven by double-digit operating cash flow growth and continued declines in capital expenditures as we normalize capital expenditures in line with satellites going into commercial service. Before closing, let me provide an additional update.

Speaker Change: As Mark mentioned, we are making steady progress on multiple fronts in support of the improvements in our growth outlook.

Guru Gaurapan: With that, I'll hand it over to Google. Great. Thanks, Mark.

Guru Gaurapan: I will cover three topics. Financial performance, our new segment structure, and an update to our outlook. Why has had generated good financial performance during Q1 FY25? We earned combined revenue growth of 6% year over year, and combined with just a deeper doubt growth of 16% year over year driven by defense and advanced technologies and aviation. The positive operating leverage reflects strong revenue blow through from icy licensing and tactical networking and advanced technologies and the continued benefit from our acquisition related operating synergies.

Mark Dankberg: We continue to expect an inflection point in positive free cash flow by end of first quarter FY26.

Mark Dankberg: Our path to positive free cash flow is expected to be driven by double-digit operating cash flow growth and continued declines in capital expenditures as we normalize capital expenditure in line with satellites going into commercial service.

Guru Gaurapan: Before closing, let me provide an additional update. As we discussed earlier in our prepared remarks, our new reporting segment structure was designed to better reflect the diverse and attractive nature of the end markets that the company serves, as well as introduce greater visibility into our performance and value drivers. As part of our initiative to provide additional transparency into our business, we will be holding a webcast teach-in on October 17, focusing on the defense and advanced technology segment, which houses our information security and cyber defense, space and mission systems, tactical networking, and advanced technologies business life.

Guru Gowrappan: As discussed earlier in our prepared remarks, our new reporting segment structure was designed to better reflect the diverse and attractive nature of the end market that the company serves, as well as introduce greater visibility into our performance and value drivers. As part of our initiative to provide additional transparency into our business, we will be holding a webcast, teach-in, on October 17th, focusing on the defense and advanced technology segment, which houses our information security and cyber defense, space and mission systems, tactical networking, and advanced technologies business lines.

Mark Dankberg: Before closing, let me provide an additional update. As we discussed earlier in our prepared remarks, our new reporting segment structure was designed to better reflect the diverse and attractive nature of the end market that the company serves, as well as introduce greater visibility into our performance and value drivers.

Guru Gaurapan: Now some color on the financial results. Q1 FY25 revenue was 1.1 billion up, 44% compared to 780 million in Q1 FY24. Combined revenue was up 6% year over year, largely driven by growth in our defense and advanced technology segment and aviation. Net loss of 33 million for Q1 FY25 improved compared to the net loss of 77 million in Q1 FY24 primarily due to improved operating performance, which was partially offset by higher interest and tax expenses.

Mark Dankberg: As part of our initiative to provide additional transparency into our business, we will be holding a webcast teach-in on October 17, focusing on the defense and advanced technology segment, which houses our information security and cyber defense.

Speaker Change: Space and Mission Systems, Tactical Networking, and Advanced Technologies Business Labs.

Guru Gaurapan: The feedback was all well that you want to learn more about this valuable part of our portfolio. We plan to cover the breadth of our technology product and services in the segment, its unique business model, the market and competitive dynamics, and expected future growth. As Mark mentioned, we believe we have a proven, differentiated, and enduring competitive advantages with our attractive growth assets within this portfolio. Our objective is to help you become better equipped to value how our various businesses are contributing to ViaSat's overall growth and profit profile. We hope that all of you will be able to join us via webcast.

Guru Gowrappan: The feedback was overwhelming that you want to learn more about this valuable part of our portfolio. We plan to cover the breadth of our technology, products, and services in this segment, its unique business model, the market and competitive dynamics, and expected future growth drivers. As Mark mentioned, we believe we have proven, differentiated, and enduring competitive advantages with our attractive growth assets within this portfolio. Our objective is to help you become better equipped to value how our various businesses are contributing to ViaSat's overall growth and profit profile. We hope that all of you will be able to join us via webcast. More details will follow later.

Speaker Change: The feedback was overwhelming that you want to learn more about this valuable part of our portfolio. We plan to cover the breadth of our technology, products and services in this segment, its unique business model, the market and competitive dynamics, and expected future growth drivers.

Guru Gaurapan: Q1 FY25 with just a deeper doubt was 404 million in increase of 120% year over year. Just a deeper doubt increased by 16% year over year, from the incremental revenue flow through in defense and advanced technologies, which more than offset expected decline in fixed broadband service revenue and fire R&D expenditures. Q1 FY25 the capital expenditures declined 20% year over year to 301 million. Combined capital expenditures decreased, 33% year over year, primarily due to lower satellite expenditures, customer premise equipment and general infrastructure costs.

Mark Dankberg: As Mark mentioned, we believe we have a proven, differentiated, and enduring competitive advantages with our attractive growth assets within this portfolio.

Mark Dankberg: Our objective is to help you become better equipped to value how our various businesses are contributing to ViaSat's overall growth and profit profile.

Guru Gaurapan: More details to follow later.

Mark Dankberg: we hope that all of you will be able to join us by a webcast

Guru Gaurapan: In closing, Q1 FY25 operation performance was very good. We are capturing our share of large and growing markets and are focused on improving operational and capital productivity, which is yielding positive operating leverage. While IP revenue and tactical networking and advanced technologies was stronger in Q1 than we expected to be in becoming quarters, we raised the low end of guidance to reflect the Q1R performance and underlying strength of our recurring aviation and governments at businesses. Towards the rest of FY25, we expect to continue to make significant progress on our satellite roadmap and towards positive free cash flow with good increases in operating cash flow and moderated capital.

Guru Gowrappan: In closing Q1 FY25, operational performance was very good. We are capturing our share of large and growing markets and are focused on improving operational and capital productivity, which is yielding positive operating leverage. While IP revenue in tactical networking and advanced technologies was stronger in Q1 than we expected it to be in the coming quarters, we raised the low end of guidance to reflect the Q1 outperformance and underlying strength of our recurring aviation and government SATCOM business models.

Mark Dankberg: More details to follow later.

Speaker Change: In closing, Q1 FY25 operational performance was very good. We are capturing our share of large and growing markets and are focused on improving operational and capital productivity, which is yielding positive operating leverage.

Guru Gaurapan: Sequentially, net leverage declined 0.1 times to approximately 3.5 times LTM or just Cbidah as of Q1 at Y-25, which is substantially favorable to the plan at the time the more set acquisition was announced. We ended the quarter with 2.9 billion of liquidity, including 1.8 billion cash and cash equivalents at quarter-end and we have a fully funded path to our positive free cash flow inflection by end of Q1 at Y-26. And finally, subsequent to quarter-end, why has that deployed approximately 150 million of cash to repurchase 152 million principal amount of in-marsat and Y-sat nodes in the open market? We opportunistically repurchased 102 million principal amount of in-marsat 2026 secured nodes at an average price of 98.2 and 50 million principal amount of Y-sat 2025 and secured nodes at an average price of 99.2.

Speaker Change: While IP revenue in tactical networking and advanced technologies was stronger in Q1 than we expected to be in the coming quarters, we raised the low end of guidance to reflect the Q1 outperformance and underlying strength of our recurring aviation and government SATCOM businesses.

Guru Gowrappan: Toward the rest of FY25, we expect to continue to make significant progress on our satellite roadmap and towards positive free cash flow with good increases in operating cash flow and moderated capital. With that, I would like to hand it back over to Mark. Thanks, Drew.

Speaker Change: Toward the rest of FY25, we expect to continue to make significant progress on our satellite roadmap and towards positive free cash flow with good increases in operating cash flow and moderated capex.

Mark Dankberg: With that, I would like to hand it back over to Mark.

Mark Dankberg: Thanks, Drew. We feel we are off to a pretty good start for this fiscal year. Thanks to the Global BiESAT team for all the work so far.

Mark Dankberg: With that, I would like to hand it back over to Mark.

Mark Dankberg: We feel we're off to a pretty good start for this fiscal year, thanks to the global ViaSat team for all the work so far. There's been a lot of work on integration with MRSAT and to overcome the ViaSat-3 Flight 1 issue, but we've made really good progress, especially in bringing that satellite into service and proving out the technology. We also believe that progress on multiple fronts is building the bridges for the opportunities in front of us. Okay, Meg, let's open it up for questions now.

Mark Dankberg: Thank you.

Mark Dankberg: We feel we're off to a pretty good start for this fiscal year. Thanks to the global ViaSat team for all the work so far. There's been a lot of work on integration with Inmarsat and to overcome the ViaSat-3 Flight 1 issue, but we've made really good progress, especially in bringing that satellite into service and proving out the technology.

Mark Dankberg: There has been a lot of work on integration within March that and to overcome the ViESAT 3 fight. One issue that we have made really good progress, especially in bringing that satellite into service and proving out the technology. We also believe that progress with multiple fronts is building the bridges for the opportunities in front of us.

Guru Gaurapan: Before we go further, I want to provide a bit more color on our new set, communication services and defense and advanced technologies. We initiated the new segment reporting structure to give additional insight into our portfolio and drivers of value. Last month, we provided historical financials for the new segments and business lines. Our communication services segment includes all the businesses using our satellite network for connectivity services. All the in-marsat businesses are included in this segment.

Mark Dankberg: We also believe that progress on multiple fronts is building the bridges for the opportunities in front of us.

Meg: Okay, Meg, let's open it up for questions now. Thanks. Thank you.

Mark Dankberg: Okay, Meg, let's open it up for questions now. Thanks.

Meg: Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to redraw your question, simply press star one again. If you are called upon to add your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Your first line comes from the line of Sebastiano Petty with JP Morgan. Please go ahead.

Meg: The floor is now open for questions. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to redraw your question, simply press star one again.

Meg: Thank you. The floor is now open for questions.

Speaker Change: If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.

Meg: If you are called upon to add your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Guru Gaurapan: Communication Services is comprised of aviation, government fatcom, maritime and fixed services and other, or FSNO. FSNO includes U.S, and international residential fixed broadband, energy and enterprise. The majority of the segment is recurring service revenue. The product revenue is primarily related to terminal sales supporting services. The majority of our capital is for our satellite network, which includes space and ground enabling these services.

Speaker Change: If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Sebastiano Petti: Your first line comes from the line of your first question comes from the line of Sebastiano Petty with JP Morgan. Please go ahead.

Speaker Change: Your first line comes from the line of your first question comes from the line of Sebastiano Petty with JP Morgan. Please go ahead.

Sebastiano Petti: Hi, thank you for taking the question. I just wanted to touch on, I think there's a comment in the shareholder letter just, yeah, and I think you touched on as well, Mark, and you prepared remarks, but working on, working to strengthen the capital structure through cash flow, debt maturity, extensions, and non-core portfolio monetization. I was wondering if you could perhaps elaborate on that.

Mark Dankberg: Hi, thank you for taking the question. Just wanted to touch on, I think there's a comment in the shareholder letter, just yeah, and I think you touched on as well, Mark, in your prepared remarks, but working to strengthen the capital structure through cash flow, debt maturity extensions, and non-core portfolio monetization. I was wondering if you could perhaps elaborate on that. Is this a shift in tone, or is this perhaps just a reflection of or related to some of the changes in segment reporting? And I think perhaps giving some visibility into non-satellite KPIs and businesses that I think is, you know, looks pretty good on the surface. Maybe it was underappreciated.

Sebastiano Petty: I thank you for taking the question just wanted to touch on I think there's a comment in in the shareholder letter just

Mark Dankberg: Yeah, and I think you touched on it as well, Mark, in your prepared remarks, but working to strengthen the capital structure through cash flow, debt maturity, extensions, and

Guru Gaurapan: The defense and advanced technology segment has four business links. Information security and cyber defense, which sells our Type 1 encryption products, space and mission systems, which includes antenna systems, tactical networking, which is mostly our trellisware subsidiary of which we own approximately 60 percent and advanced technologies and other, which includes IP licensing revenue. Most of the revenue in this segment is product revenue, which includes IP licensing and can be lumpy quarter to quarter.

Speaker Change: non-core portfolio monetization. I was wondering if you could perhaps elaborate on that. Is this a shift in tone or is this perhaps just...

Sebastiano Petti: Is this a shift in tone, or is this perhaps just a reflection related to some of the changes that segment reporting, and I think perhaps giving some visibility into non-satellite KPIs and businesses that I think looks pretty good on the surface and maybe was underappreciated. And then just a housekeeping question: in terms of the aircraft online, are we still on track to reach the 4200 goal, I think, exiting fiscal 2025? Obviously, recent developments. Are those having any bearing on you hitting that target? Just, yeah. When considering, I guess, the healthy backlog that you have as well.

Speaker Change: You know, a reflection of or related to, you know, some of the, you know, the change in segment reporting, and I think, you know, perhaps giving some visibility into non-satellite KPIs and businesses that I think is, you know,

Mark Dankberg: And then just a housekeeping question. In terms of the aircraft online, are we still on track to reach the 4200 goal, I think, by exiting fiscal 2025? Obviously, recent developments. Are those having any bearing on you hitting that target when considering, I guess, the healthy backlog that you have as well? Thank you. Okay. So I'm a thanks for the question. And I'm the

Speaker Change: And then just a housekeeping question. In terms of the aircraft online, are we still on track to reach the 4200 goal, I think, exiting fiscal 2025? Obviously, recent developments.

Guru Gaurapan: The service revenue in this segment is primarily warranty and support for the products. The defense and advanced technologies business line have a low capital intensity. And we appreciate the feedback investors provided in this process. It is an important step in raising the visibility of our valuable franchisees. We will continue to work to highlight and unlock the value that bias had is creating for its shareholders.

Speaker Change: Are those having any bearing on you hitting that target when considering, I guess, the healthy backlog that you have as well? Thank you.

Sebastiano Petti: Thank you.

Mark Dankberg: Okay, so thanks for the question.

Mark Dankberg: Okay, so thanks for the question. And on the first point, really, we just wanted to make sure that investors know we're going to take a holistic view of how we address our capital structure. And so in doing that, we just wanted to let people understand that we're looking across the board. And also, the fact that we're taking a broad view gives us options in terms of the way that we know that we should address it.

Mark Dankberg: And on the first, on the first point, really, we just wanted to make sure that investors know we're going to take a holistic view of how we address our capital structure. And so, in doing that, we just wanted to let people understand that. We're looking across the board. And also, the fact that we're taking a broad view gives us options in terms of the way that we, you know, that we address it. And certainly, you know, we're going to, you know, we're focused on creating durable, competitive advantage in building shareholder value. But we're going to, we're going to take a holistic view.

Speaker Change: Okay, so thanks for the question. And on the first point, really we just wanted to make sure that investors know we're going to take a holistic view of how we address our capital structure.

Guru Gaurapan: Now, let's take closer look at communication services performance during the quarter. Aviation continues to compete very well in the market. Commercial IFC ended the quarter with 3750 aircraft in service up about 16 percent year-over-year with over 1,460 aircraft in contracted backlog. We're also in the contractual process of adding about 350 incremental aircraft to the backlog, including from six new airlines. We achieved mid-teens year-over-year growth in both the number of commercial and business aviation aircraft and service.

Speaker Change: And so in doing that, we just wanted to let people understand that we're looking across the board. And also the fact that we're taking a broad view gives us options in terms of the way that we, you know, that we address it. And certainly, you know, we're going to.

Mark Dankberg: And certainly, you know, we're going to We're going to be focused on creating durable competitive advantage and building shareholder value, but we're going to we're going to take a holistic view. And I think it's really more just to remind investors that we're taking that view as opposed to a change in the way we're approaching the problem. On inflight, yes, we still have our target of 4200 aircraft in service at the end of FY25.

Mark Dankberg: We're focused on creating durable competitive advantage and building shareholder value. We're going to take a holistic view, and I think it's really more just...

Mark Dankberg: And I think it's really more just to remind, remind, you know, investors that we're taking that view as opposed to a change in the way we're approaching the problem.

Guru Gaurapan: And while we are confident in the year-over-year growth outlook and trajectory for aviation, it's worth noting that we expect four-door, four-door results to reflect continued OEM delays and some impact due to the effects of the recent global cybersecurity software outage impacting our customers. U.S. Big broadband revenue declined as expected, driven by fewer residential subscribers. We continue to de-emphasize U.S. Bigs broadband to support our rapid and higher-margin commercial IFC in aviation. Our government-sack-comp business line announced we are expanding work with Airbus Defence and Space to integrate via SAS dual-band broadband terminal, which is called the GAT-5530 into the Spanish TEMODES C-295 maritime patrol aircraft fleet to provide a highly flexible multi-band multi-orbit broadband SAT-comp capability to support missions utilizing next-generation pain-sack and G-satellites.

Mark Dankberg: to remind investors that we're taking that view as opposed to a change in the way we're approaching the problem.

Mark Dankberg: I'm on the invite. Yes, we still have our target of 4,200 aircraft in service at the end of FY 25.

Speaker Change: On the in-flight, yes, we still have our target of 4,200 aircraft in service at the end of FY25.

Speaker Change: Thank you.

Unknown Executive: Thank you. Your next question comes from the line of Griffin Boss with B Riley Securities. Please go ahead.

Unknown Executive: Your next question comes from the line of grief and loss would be Riley Securities.

Speaker Change: Thank you. Your next question comes from the line of Griffin Boss with B Riley Securities. Please go ahead.

Unknown Executive: Please go ahead. Hi, yes.

Mark Dankberg: Hi, yes, thanks for taking my question. So, first, for me, I'm curious to hear your thoughts on that, if you have any thoughts on the viability of putting 12 small satellites in one geo-orbital slot, like what Astranis is talking about. And then also, along with that, could you compare the service levels that ViaSat could bring to market versus what Astranis reportedly is talking about with perhaps up to 50 gigabits per second per Omega satellite?

Unknown Executive: Thanks for taking my question. So first for me, I'm curious to hear your thoughts on the, if you have any thoughts on the viability of putting 12 small satellites in one geo orbital slot, like what a strand is talking about. And then also along with that, could you compare the service levels that Via that could bring the market versus what a strand as reportedly is talking about with perhaps up to 50 gigabits per second per Omega satellite.

Griffin Boss: Hi, yes, thanks for taking my question. So first for me, I'm curious to hear your thoughts on, if you have any thoughts on the viability of putting 12 small satellites in one geo-orbital slot, like what Astranis is talking about, and then also along with that, could you compare

Guru Gaurapan: We are excited because the Airbus C-295 aircraft is operated by 37 countries around the world with hundreds of aircraft in operation and hundreds more on order. We are seeing more international government products and service opportunities within Mars Lab. During the quarter, we began collaborating with UAVionics, a pioneer in certified AVionics for crude and uncrewed aviation to integrate via SAS wireless module into its compact multi-link airborne radio system. Wireless provides secure, resilient, broadband communications for commercial UAVs and enables real-time monitoring for beyond visual lines of site UAV operations.

Speaker Change: The service levels that ViaSat could bring to market versus what Astranis reportedly is talking about with perhaps up to 50 gigabits per second per Omega satellite.

Mark Dankberg: Okay, so I don't really understand exactly what the astronomers' strategy is. So it's a little bit hard to comment on it. The one thing I would say is that there are that so definitions of what a slot consists of can vary from organization to organization. There are ITU guidelines, you know, there are regulations, but there are guidelines and regulations that are intended to preserve safety, right, and safety and to avoid collisions.

Mark Dankberg: Okay. So I don't really understand exactly what the strongest strategy is. So it's a little bit hard to comment on it. The one thing I would say is that there are. So definitions of what a slot consists of can vary from organization to organization. There are ITU guidelines, the regulations, but there are guidelines and regulations that do are intended to preserve safety. So that would be an example of consideration of anybody would have to deal with depending on what they mean by a spot. I think that, you know, I think there's multiple strategies to trying to compete in space where we tend to be very open-minded between big and hard satellites.

Speaker Change: Okay, so I don't really understand exactly what the astronomers strategy is so it's a little bit hard to to comment on it. The one thing I would say is that there are so

Speaker Change: Definitions of what a slot consists of can vary from

Guru Gaurapan: We believe broadband unmanned vehicles of all size are an exciting growth opportunity, especially as we modernize our broadband capabilities. Nexus Wave, maritime's new hybrid multi-orbit managed service targeting commercial shipping customers brings global coverage, speed, capacity, security, and resilience to meet enterprise class, operational needs, and Kuwait Fair. Nexus Wave is building an anticipation in the market and we expect to launch beta service during Q2 FY25. In Q1 FY25 communication services revenue was 827 million, up 48% compared to 560 million in Q1 FY24.

Speaker Change: organization to organization. There are ITU guidelines, you know, there are regulations, but there are guidelines and regulations that

Speaker Change: are intended to preserve safety and to avoid collisions. So that would be an example of a consideration that anybody would have to deal with, depending on what they mean by a spot. I think that...

Mark Dankberg: So that would be an example of a consideration that anybody would have to deal with, depending on what they mean by a spot. I think that there are multiple strategies for trying to compete in space, where we tend to be very open-minded between big and large satellites. And I think, depending on what the competitive environment is, access to capital, and what technologies you have in mind, different people will have different preferences.

Speaker Change: I think there's multiple strategies to trying to compete in space. We're, we tend to be very open minded between big and large satellites. And I think depending on what the competitive environment is, access to capital, what technologies you have in mind.

Mark Dankberg: And I think depending on what the better environment is, access to capital or technologies you have in mind, different people will have different preferences. I can tell you we really like our strategies so far that our strategies are really based each time on a kind of a current assessment of the incremental value of any assets we put in space in the context of our whole fleet and market.

Mark Dankberg: I can tell you we really like our strategies so far, and our strategies are really based each time on a kind of current assessment of the incremental value of any assets we put in space in the context of our whole fleet and the markets that we're serving. Those are more of the measures we're using. One of the things I think you can sort of tell from our letter is that, as we've grown, we've evolved our metrics of capital efficiency to reflect the performance of entire fleets, including those parts that we lease from others as opposed to just looking at the capital efficiency of an individual satellite.

Speaker Change: You know different people will have different preferences. I can tell you we really like our strategies so far and our strategies are really based each time on a kind of a current assessment of

Guru Gaurapan: Combined revenue was down 2% year over year, driven by the expected decline in US fixed broadband services and segment product revenue. Q1 FY25 communication services was 308 million, an increase of 98% year over year, combined with the expected decline, 4% year over year, primarily from lower revenue flow through from US fixed broadband in the FF and O business line and maritime services.

Mark Dankberg: The incremental value of any assets we put in space in the context of our whole fleet and the markets that we're serving. Those are more of the measures we're using. One of the things I think you can sort of tell from our letter is

Mark Dankberg: Okay. that we're sharing. Those are more of the measures we're using. One of the things I think we can sort of tell from our letter is, as we've grown, you know, we've followed our metrics of capital efficiency to reflect the performance of entire fleets, including those parts that we release from others, as opposed to just looking at the capital efficiency of an individual satellite. And the theory is that by using it or fleet, you can make individual satellites more effective than they would be on their own. And we're seeing that effect as we integrate more of the MRSAT and third-party assets.

Mark Dankberg: As we've grown, you know, we've evolved our...

Guru Gaurapan: Now to defense and advance technologies performance during the Q4. Space and mission systems received awards of approximately 85 million related to multi-function space-story antennas, free space optics, and antenna systems infrastructure with supported services. Tactical networking received a tool for the loud activation of certain product upgrades. Once activated, we recognized IC licensing revenue on these products that had been sold over the prior few years. The business is expected to benefit from the ongoing sales, but with substantially fewer units per quarter than we recognized in Q1 FY25.

Mark Dankberg: metrics of capital efficiency to reflect the performance of entire fleets including that those

Mark Dankberg: Parts that we lease from others as opposed to just looking at the capital efficiency of an individual satellite and the theory is

Mark Dankberg: And the theory is that by using it in a fleet, it makes individual satellites more effective than they would be on their own. And we're seeing that effect as we integrate more of the NMARSAT and third-party satellites. Hopefully, that answers that part.

Mark Dankberg: is that by using it in a fleet, it can make individual satellites more effective than they would be on their own, and we're seeing that effect as we integrate more of the NMARSAT and third-party assets.

Unknown Executive: Hopefully, that answers that part.

Mark Dankberg: Next for me, could you compare and contrast ViaSat's L-band spectrum holdings with other competitors and relate it to what the company has planned for its small Geo L-band satellites that are currently ordered with Swiss 212 and the HummingSats that are slated to launch in 2026?

Unknown Executive: Yeah, no, that was great.

Unknown Executive: I appreciate the color mark. Thanks.

Speaker Change: Hopefully that answers that part. Yeah, no, that was great. I appreciate the color, Mark. Thanks. And then, so, next for me, could you…

Mark Dankberg: And then so next for me, could you compare and contrast ViaSAT's L band spectrum holdings with other competitors and related just what the company has planned for. ViaSAT's small geo L band satellites that are currently ordered with Swiss to 12 and the humming sats that are slated to launch in 2026. Okay, yes, when we’ve put a few things on our website in the past, including when we first announced the MRSAT acquisition that kind of listed all our L band assets, spectrum assets. And we are in a pretty strong position, which is really an artifact of the mission that MRSAT serves of aeronautical and maritime safety.

Guru Gaurapan: Advanced technology is also benefited from strong IP licensing revenue. There are two components to the current licensing revenue, an annual fee, which typically occurs in Q1 as a did this quarter, and a per-unit sold fee, which is distributed to our beer. During Q1 FY25, we benefited from both the annual license and the per-unit company. For remainder of FY25, we expected to generate revenue from the per-unit component only. Information security and cyber-defense won awards for type 1 encryption products totaling over 45 million, largely reflecting growing data-centered demand to unbibe the geographic expansion and AI applications.

Speaker Change: Compare and contrast ViaSat's L-band spectrum holdings with other competitors and related just what the company has planned for ViaSat's small GEO L-band satellites that are currently ordered with Swiss 212 and the HummingSats that are slated to launch in 2026.

Mark Dankberg: Okay, yes. When we, we've put a few things on our website in the past, including when we first announced the Inmarsat acquisition, that kind of listed all of our L band assets, spectrum assets, and we're not, we are in a pretty strong position, which is really an artifact of the mission that Inmarsat serves of aeronautical and maritime safety. So we have a pretty significant inventory of L band spectrum assets that we use right now. We have a variety of assets that we use in space in MarSat.

Speaker Change: Okay, yes, when we, we've put a few things on our website in the past, including when we first announced the Inmarsat acquisition.

Speaker Change: that kind of listed all of our L-band assets.

Guru Gaurapan: Q1 FY25 book to bill ratio was 1.2 times, with continued momentum into Q2 FY25. In Q1, FY25 defense and advanced technologies revenue was 300 million up 37 percent compared to 220 million in Q1 FY24. Product revenue was up 45 percent year or year driven by the strong IP licensing revenue in tactical networks and advanced technologies. Q1 FY25 defense and technology statistic that was 96 million more than per-poke the year ago period reflecting the value of the technology portfolio. Strong operating leverage from revenue flow through in both tactical networks and advanced technologies drove exceptional performance.

Speaker Change: spectrum assets and we're not we are in a pretty strong position it which is really an artifact of the mission that Inmarsat serves of aeronautical and maritime safety so we have we have a

Mark Dankberg: So we have a pretty significant inventory of L band spectrum assets. We use, right now we have a variety of assets that we use in space in MRSAT prior to the vice at acquisition acquired their most recent one was three mini satellites from about Swiss to 12 that make up our IDI 8 portion of the constellation. You know, since that acquisition and I think based on sort of what's going on in the market for direct and device open architecture solutions for space and these emerging 3G PV standards. You know, one of the things we've talked about is raising our sites on L band modernization for existing customers and to be able to get into the direct and device market, which is estimated to be pretty substantial.

Mark Dankberg: A pretty significant inventory of L-band spectrum assets. We use, right now we have a...

Mark Dankberg: Prior to the ViaSat acquisition, acquired their most recent one was three. Based on sort of what's going on in the market for directed devices, open architecture, Solutions for Space, and these emerging 3GPP standards, you know, one of the things we've talked about is raising our sights on LBAN modernization for existing customers and to be able to get into the direct-to-device market, which is estimated to be pretty substantial. So we are, the one thing is we will be adding to our L-Ban Fleet Strategy; we just haven't yet disclosed how we'll do that. I think on the IH, just to be sure, we're expecting those to be in service in 2028.

Mark Dankberg: variety of assets that we use in space in MarSat prior to the ViaSat acquisition acquired their most recent one was three

Mark Dankberg: Mini-satellites from a company called SWISCA-12 that make up the I-8 portion of the constellation. You know, since that acquisition, and I think based on...

Guru Gaurapan: Overall, it was a good quarter and a strong start to FY25. Next, we are raising our outlook slightly to reflect strong Q1 results, confidence in our market competitive positions in pipeline and despite continued aircraft OEM delivery has. Our first quarter financial performance reflects our competitive solutions and strong execution in our aviation and defense businesses. Within our defense and advanced technology segment, we generated high flow through IP revenue in two businesses, a tactical networking business benefited from a couple of years of retroactive product upgrades in the quarter.

Mark Dankberg: Based on sort of what's going on in the...

Mark Dankberg: Market for Direct-to-Device, Open Architecture,

Mark Dankberg: solutions for space and these emerging 3GPP standards.

Mark Dankberg: One of the things we've talked about is raising our sights on LBAN modernization for existing customers and to be able to get into the direct-to-device market, which is estimated to be pretty substantial.

Mark Dankberg: So we are the one thing is we will be adding to our L band fleet strategy. We just haven't yet disclosed how we'll do that.

Mark Dankberg: So we are, the one thing is, we will be adding to our LBAN Fleet Strategy, we just haven't yet disclosed how we'll do that. I think on the IH, just to be sure, we're expecting those to be in service in 2028.

Mark Dankberg: I think on the IH just to be sure we're expecting those to be in service in 2028. Great.

Guru Gaurapan: We expected business to continue to benefit from upgraded product sales going forward at a normalized level. Advanced technologies benefited from annual licenses in the quarter. So out of the year, we expect more modest per-unit licensing revenue. Finally, because this is only the first quarter of FY25, we are raising the low end of our FY25 revenue in our just a little bit down and maintaining our view of FY26. For comparison purposes, we remove the 95 million revenue and 86 million our just a little bit that catch up benefit from the litigation settlement from FY24 reference results.

Mark Dankberg: Great. Thanks for all that color, Mark.

Unknown Executive: Thanks for all that color mark. Appreciate it.

Unknown Executive: I'll pass it off, and thanks for taking my questions. Welcome.

Speaker Change: Great. Thanks for all that color, Mark. Appreciate it. I'll pass it off and thanks for taking my questions.

Mark Dankberg: I'll pass it off, and thanks for taking my question. You're welcome. Thank you.

Unknown Executive: Thank you.

Ryan Koontz: Your next question comes from the line up, Ryan Coons, from Leave on the company.

Unknown Executive: Your next question comes from the line of Ryan Koontz from Eden & Company. Please go ahead.

Ryan Koontz: Please go ahead. Great, thanks. You know, really nice progress on the IFC market there and lots of commentary about slowing OEM deliveries.

Mark Dankberg: Your next question comes from the line of Ryan Koontz from Edelman Company. Please go ahead.

Mark Dankberg: Great, thanks. You know, really nice progress on the IFC market there. And lots of commentary about slowing OEM deliveries. And I'm wondering, to what effect you've already seen that impact on your current growth rates? Or do you think that growth for that business will slow because of unexpected, you know, further problems and in turning up and receiving new aircraft?

Ryan Koontz: Thanks, really nice progress on the IFC market there and lots of commentary about slowing OEM deliveries. And I'm wondering to what effect you've already seen that impact in your current growth rates, or do you think that

Ryan Koontz: And I'm wondering to what effect you've already seen that impact in your current growth rates, or do you think that the growth rate for that business slows because of expected, you know, further problems in in turning it and receiving new aircraft? Yeah, okay. Good question. The, you know, the real catalyst for the OEM deliveries have been around for quite a while. I mean, so we're already seeing those effects. We have for at least a couple of quarters. And we haven't really seen that, that the delivery rates have been diminished over the last couple of months.

Guru Gaurapan: Therefore, our guidance is based on FY24 revenue of approximately 4.5 billion and our just a little bit down of approximately 1.5 billion. We now expect F-25 revenue to be flat to slightly up year-over-year, with year-over-year adjusted EBITDA growth in the mid-single visits. We believe F-25 revenue growth, excluding and expected decline in U.S, fixed-broad band associated with device at 3F-1 anomaly, would have been up mid-single visits. We have also provided additional segment level details in the outlook section of our shareholder letter.

Speaker Change: The growth rate for that business slows because of expected further problems in receiving new aircraft.

Mark Dankberg: Okay, good question. The real catalysts for the OEM deliveries have been around for quite a while, so we're already seeing those effects. We have for at least a couple of quarters.

Speaker Change: Okay, good question. The real catalysts for the OEM deliveries have been around for

Speaker Change: Quite a while. I mean, so those so we're already seeing those effects We have for at least a couple of quarters and we haven't really seen

Mark Dankberg: And we haven't really seen... that delivery rates have been diminished over the last couple of months. So it's really more a projection of what we're seeing so far absent, you know, absent a change in the OEM delivery, really didn't. There are a few issues with 737s. There are some issues with a couple of the wide bodies, and then there are engine issues associated with Airbus planes. So those are really the dominant issues that have affected it. And they're not getting worse, but they're persistent.

Guru Gaurapan: We remain prudent with our top-line guide given uncertainties with delayed OEM commercial aircraft deliveries and airline overall capacity. In F-25, we expect capital expenditures to decline to a range of 1.4 billion to 1.5 billion. We include capitalized interest in our capex guidance, which is approximately 200 million per year, but will decline in future years as we place satellites into service. We continue to expect our investments in our satellite network projects and success-based capex feed to third of our total capital sand with less than 1.3 associated with our maintenance and general capex activities.

Mark Dankberg: that the delivery rates have been diminished over the last couple of months. So it's really more a projection of what we're seeing so far absent a change in the OEM delivery environment.

Ryan Koontz: So it's really more a projection of what we're seeing so far, absent, you know, absent a change in the OEM delivery department. Really didn't. You know, there's a few issues on 737s. There are some issues; there's also a couple of the wide bodies, and then there've been engine issues associated with the Airbus plane. So those are really the dominant issues that have affected it, and they're not getting worse, but they're persisting.

Speaker Change: really didn't know that there's

Speaker Change: A few issues on...

Mark Dankberg: 737s, there are some issues, also going to be a couple of widebodies, and then there have been engine issues.

Speaker Change: associated with Airbus planes. Those are really the dominant issues that have affected it and they're not getting worse, but they're persisting.

Shawn Duffy: You know, and maybe add on to that microquick Ryan, you know, I think is more good thing. We, you know, a little bit, we've talked about is our, you know, deliveries to be a little bit more back-weighted, but I think just to keep in contact from the quarter of a quarter performance, just from Q1 to Q2, you know, I just wanted to kind of put a couple things out there for very big kind of keep in mind. And from Q1, you know, this quarter we had some really, you know, two unique royalty and licensing agreements.

Shawn Duffy: And maybe to add to that, Mark, real quick, Ryan, I think as Mark was saying, a little bit we've talked about is our, you know, deliveries to be a little bit more back-weighted, but I think just to keep in contact with the quarter over quarter performance, just from Q1 to Q2, you know, I just wanted to kind of put a couple things out there for everybody to kind of keep in mind. From Q1, you know, this quarter we had some really, you know, two unique royalty and licensing agreements.

Ryan Koontz: And maybe to add on to that, Mark, real quick, Ryan, I think as Mark was saying, a little bit we've talked about is our deliveries to be a little bit more back-weighted, but I think just to keep in context from the quarter-over-quarter performance, just from Q1 to Q2.

Guru Gaurapan: Looking forward, we expect our investments in growth capex to continue to decline and generate an improving pre-cast flow trend. In F-26, we continue to expect to grow revenue and adjust to EBITDA relative to F-25 as the majority of our 3.4 billion assets and reconstruction go into commercial service. Capital expenditures for F-26 are expected to decline to a range of 1.1 billion to 1.2 billion. We believe F-25 provides the foundation for multi-year accelerated growth in revenue and adjust to EBITDA growth and continue to step down in capex in F-26.

Ryan Koontz: You know, I just wanted to kind of put a couple things out there for everybody to kind of keep in mind.

Speaker Change: And from Q1, you know, this quarter we had some.

Mark Dankberg: really, you know, two unique royalty and

Shawn Duffy: Our portfolio there is extending. More of that in our portfolio, but we did get a little bit of an uptick in this quarter. So next quarter we'll see that tick down, but we will start to see benefits as some of the product revenues grow from Q1 to Q2, offsetting some of that. And then we'll see, you know, a bit of additional R&D expenses, but kind of net big picture is we'll see our revenues take down from 40 million dollars quarter of a quarter, just related to that royalty component. And 50 million dollars on the EBITDA, but we're going to continue to see growth in our IFC and we'll see our product revenues and IFCs start to tick up as well, but more back-weighted in the year.

Mark Dankberg: Licensing Agreement. Our portfolio there is extending more of that in our portfolio but we did get a little bit of an uptick in this quarter.

Shawn Duffy: Our portfolio there is extending more of that in our portfolio, but we did get a little bit of an uptick in this quarter. So next quarter, we'll see that tick down, but we will start to see benefits as some of the product revenues grow from Q1 to Q2, offsetting some of that. And then we'll see, you know, a bit of additional R&D expenses, but the kind of net big picture is we'll see our revenues tick down from $40 million quarter over quarter, just related to that royalty component, and $50 million on EBITDA, but we're going to continue to see growth in our IFC, and we'll see our product revenues and IFC start to tick up as well, but more back-weighted in the

Mark Dankberg: So next quarter, we'll see that tick down, but we will start to see benefits.

Guru Gaurapan: As Mark mentioned, we are making study progress on multiple fronts in support of the improvements in our growth outage. We continue to expect an inflection point in positive pre-cast flow by end of first quarter F-26. Our path to positive pre-cast flow is expected to be driven by double-digit operating cash flow growth and continued declines in capex expenditures as the normalized capex expenditure in line with satellites going into commercial service.

Mark Dankberg: as some of the product revenues grow.

Mark Dankberg: from Q1 to Q2, offsetting some of that.

Mark Dankberg: And then we'll see, you know, a bit of additional R&D expenses, but kind of net big picture is we'll see our revenues take down from $40 million, quarter of a quarter, just related to that royalty component.

Mark Dankberg: and $50 million on the EBITDA, but we're going to continue to see growth in our IFC and we'll see our product revenues in IFC start to tick up as well, but more back-weighted in the year.

Guru Gaurapan: Before closing, let me provide an additional update. As we discussed earlier in our prepared remarks, our new reporting segment structure was designed to better reflect the diverse and attractive nature of the end markets that the company serves, as well as introduce greater visibility into our performance and value drivers.

Ryan Koontz: Great, that makes sense, Sean. I interpret that, but that's great clarification.

Unknown Executive: Great. That makes sense, Shawn. I interpreted that, but that's great clarification. Thank you.

Unknown Executive: Thank you.

Mark Dankberg: Another question for Mark, just on kind of this integrated service offering. I know you talked about it historically when you announced with Inmarsat having kind of a unified service offering and then now your hybrid offering with Leo Partners. You know, what sort of technical challenges? Obviously, I think there's business demand out there. What sort of technical challenge do you have with a truly unified offering to roll that out across your customer base, across both Inmarsat and ViaSat, as well as third parties? Thanks.

Mark Dankberg: Another question from Mark, just on kind of this integrated service offering. I know you've talked about historically when you now in Marsat, having kind of a unified service offering and then now you're hybrid offering with Leo Partners. What sort of technical challenges, obviously there, I think there's business demand out there. What sort of technical challenges do you have with a truly unified offering? to roll that out across your customer base across, but in Marcia and by-sat as well as third parties. Thanks. Okay. Yeah. There to one thing is we are aiming to harmonize the offerings and then also to be able to extend them to the legacy in Marcia and then kind of upgrade what the by-sat.

Mark Dankberg: Great. That makes sense, Shawn. I interpreted that, but that's great clarification. Thank you. Another question for Mark, just on kind of this integrated service offering. I know you've talked about historically when you announced with Inmarsat having kind of a unified

Guru Gaurapan: As part of our initiative to provide additional transparency into our business, we will be holding a webcast teach-in on October 17, focusing on the defense and advanced technology segment, which houses our information security and cyber defense, space and mission systems, tactical networking, and advanced technologies business life. The feedback was all well that you want to learn more about this valuable part of our portfolio. We plan to cover the breadth of our technology product and services in the segment, its unique business model, the market and competitive dynamics, and expected future growth As Mark mentioned, we believe we have a proven, differentiated, and enduring competitive advantages with our attractive growth assets within this portfolio. Our objective is to help you become better equipped to value how our various businesses are contributing to ViaSat's overall growth and profit profile.

Speaker Change: service offering and and then now your hybrid offering with Leo Partners. You know, what sort of technical challenges? Obviously there, I think there's business demand out there. What sort of technical challenge do you have with a truly unified offering?

Mark Dankberg: to roll that out across your customer base, across both InmarSat and ViaSat, as well as third parties. Thanks.

Mark Dankberg: Yeah, the one thing we are aiming to harmonize the offerings and then also to be able to extend them to the legacy Inmarsat fleet and then kind of upgrade what the ViaSat services are. Probably the single biggest one we have is that they were originally two different networks. There's the Global Express network, a K-band network for Inmarsat, and ViaSat had its own network.

Speaker Change: Okay, yeah, there, uh, so one thing is we are aiming to harmonize the offerings and then also to

Mark Dankberg: to be able to extend them to the legacy in MARSAT fleet.

Mark Dankberg: What services are probably the single biggest one we have is that they were, you know, they originally were two different networks. There's the Global Express network, a K band for in Marcia and by-sat had its own network. So that's what we're working on. There are intermediate things that we can do to improve, especially the legacy GX services. Short of that, but that that harmonization is probably going to occur over the next one or two years.

Speaker Change: and then kind of upgrade what the ViaSat services are. Probably the single biggest one we have is that they were, you know, they originally were two different networks. There was the Global Express Network, a K-band for Inmarsat, and ViaSat had its own network.

Mark Dankberg: So that's what we're working on. There are intermediate things that we can do to improve, especially the legacy GX services, short of that. But that harmonization is probably going to occur over the next one or two years. It's a little bit harder in the aviation space because any type of changes have to go through FAA flight worthiness certifications. So that kind of extends that timeline. On the maritime front, we have a little more flexibility in implementing multi-terminal solutions. So that's one of the reasons that we can start harmonizing some of the maritime stuff, which we think will drive some improvement sooner, as early as next quarter, when we'll see.

Guru Gaurapan: We hope that all of you will be able to join us via webcast.

Guru Gaurapan: More details to follow later.

Mark Dankberg: So that's what we're working on. There are intermediate things that we can do to...

Guru Gaurapan: In closing, Q1 FY25 operation performance was very good. We are capturing our share of large and growing markets and are focused on improving operational and capital productivity which is yielding positive operating leverage. While IP revenue and tactical networking and advanced technologies was stronger in Q1 than we expected to be in becoming quarters, we raised the low end of guidance to reflect the Q1R performance and underlying strength of our recurring aviation and governments at businesses. Towards the rest of FY25, we expect to continue to make significant progress on our satellite roadmap and towards positive free cash flow with good increases in operating cash flow and moderated capital.

Mark Dankberg: To improve.

Mark Dankberg: especially the legacy GX services.

Mark Dankberg: short of that, but that

Mark Dankberg: That harmonization is probably going to occur over that.

Mark Dankberg: It's a little bit harder in the aviation space because any type of changes have to go through FAA flightworthiness certifications. So that kind of extends that timeline. In the maritime front, we have a little more flexibility in implementing multi-term solutions. So that's one of the reasons that we can start harmonizing some of the maritime staff, which we think will drive some improvement sooner, as early as X-quarters when we'll start that. That's super helpful. Thanks for that.

Mark Dankberg: Next one or two years. It's a little bit

Mark Dankberg: Mark Dankberg, Unknown Executive, Robert Blair, Mark Dankberg, Kumara Gowrappan

Mark Dankberg: So that's one of the reasons that we can start harmonizing some of the maritime stuff, which we think will drive some improvement sooner, as early as next quarter is when we'll start that.

Unknown Executive: That's super helpful. Thanks for that.

Mark Dankberg: With that, I would like to hand it back over to Mark. Thanks, Drew. We feel we are off to a pretty good start for this fiscal year. Thanks to the Global BiESAT team for all the work so far.

Mark Dankberg: And just follow on to that. Do you look at things like wind optimization and, you know, ESA and tennis and these sorts of things as part of that solution for multi-erubism. Yes, and there are really two parts to it. One part is how we harmonize all the existing fleet, whether it's aviation or maritime or government. So that because there's a large installed base, we're very focused on doing that, bringing up the level of service across the existing fleet. And then we have another roadmap, which is what we're going to do for new installs. And there we work with customers.

Speaker Change: That's super helpful. Thanks for that and just follow on to that. Do you look at things like WAN optimization and you know ESA antennas and these sorts of things as part of that solution for?

Mark Dankberg: There has been a lot of work on integration within March that and to overcome the ViESAT 3 fight one issue that we have made really good progress, especially in bringing that satellite into service and proving out the technology. We also believe that progress with multiple fronts is building the bridges for the opportunities in front of us.

Mark Dankberg: And just follow on to that. Do you look at things like time optimization and, you know, ESA antennas and these sorts of things as part of that solution for multi-office and multi- Yes, and I want to make sense of that there are, you know, there's really two parts to it. One part is how we harmonize all the existing fleets, whether it's aviation, maritime, or government. So there, because there's a large installed base, you know, we're very focused on doing that, bringing up the level of service across the existing fleet.

Speaker Change: Yeah, yeah.

Speaker Change: Yes, and I want to make the distinction though that there are, you know, there's really two parts to it. One part is how we harmonize all the existing fleet, whether it's aviation or maritime or government.

Meg: Okay, Meg, let's open it up for questions now. Thanks. Thank you.

Mark Dankberg: So there, because there's a large installed base, you know, we're very focused on doing that, bringing up the level of service across the existing fleet, and then we have another roadmap, which is what we're going to do for new installs.

Mark Dankberg: And then we have another roadmap, which is what we're going to do for new installations. And there, we work with customers. We have a lot more, you know, a lot of new installations, for instance, in the aviation market or line kit. So that gives us a roadmap for when we can install terminals that use things like phased arrays, like you just mentioned. But we also have the ability to upgrade the existing fleet with things like multi-orbit. On many of the platforms, just taking advantage of the equipment that's on there already.

Meg: The floor is now open for questions. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to redraw your question, simply press star one again. If you are called upon to add your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Mark Dankberg: We have a lot more, you know, a lot of new installs, for instance, in the aviation market or mindset. So that gives us a roadmap for when we can install terminals that use things like case to race, like you just mentioned. But we also have the ability to upgrade the existing fleet with things like multi orbit on many of the platforms, just taking advantage of the equipment that's on there already for you. We're using both of those. Okay.

Mark Dankberg: And there we work with customers. We have a lot more, you know, a lot of new installs, for instance, in the aviation market or line sales.

Mark Dankberg: So that gives us a road map for when we can install terminals that use things like phased arrays like you just mentioned. But we also have the ability to upgrade the existing fleet with things like multi-orbit.

Sebastiano Petti: Your first line comes from the line of your first question comes from the line of Sebastiano Petty with JP Morgan. Please go ahead. Hi, thank you for taking the question. I just wanted to touch on, I think there's a comment in the shareholder letter just, yeah, and I think you touched on as well, Mark, and you prepared remarks, but working on, working to strengthen the capital structure through cash flow, debt maturity, extensions, and non-core portfolio monetization.

Mark Dankberg: We're using both of those. Great. Thanks, Mark. Appreciate the insight. Yeah.

Mark Dankberg: On many of the platforms, just taking advantage of the equipment that's on there already. We're using both of those.

Unknown Executive: Great.

Unknown Executive: Thanks, Mark. Appreciate insights.

Unknown Executive: That's different. Yeah.

Speaker Change: Okay, great. Thanks, Mark. Appreciate the insights. That's it for me. Yeah, thank you.

Unknown Executive: Thank you. Your next question comes from the line of Rick Prentiss with Ringman James. Please go ahead.

Rick Frontiers: The next question comes from the line of Rick Frontiers with Raymond James. Please go ahead.

Speaker Change: Thank you. Your next question comes from the line of Rick Prentiss with Raymond James. Please go ahead.

Unknown Executive: Thanks. Good afternoon, everybody, on a very busy earnings day.

Rick Frontiers: Thanks for that.

Rick Frontiers: Everybody on a very busy on his day. Yep.

Rick Prentiss: thanks good afternoon everybody on a very busy earnings day

Unknown Executive: Yep. Hi Ray. Thanks for joining us.

Sebastiano Petti: I was wondering if you could perhaps elaborate on that. Is this a shift in tone, or is this perhaps just a reflection related to some of the changes that segment reporting, and I think perhaps giving some visibility into non-satellite KPIs and businesses that I think looks pretty good on the surface and maybe was underappreciated. And then just a housekeeping question, in terms of the aircraft online, are we still on track to reach the 4200 goal, I think, exiting fiscal 2025? Obviously, recent developments. Are those having any bearing on you hitting that target? Just, yeah, when considering, I guess, the healthy backlog that you have as well. Thank you. Okay, so thanks for the question.

Rick Frontiers: Thanks for joining. Hey, you betcha.

Unknown Executive: You betcha. A couple of ones.

Rick Frontiers: A couple of ones. I want to follow. I think you said the royalty, but I wasn't sure if that was the royalty and the licensing.

Speaker Change: Thanks for joining. Hey, you betcha.

Rick Prentiss: A couple of ones. I want to follow up. Shawn, I think you said the...

Shawn Duffy: How about 40 million revenue, 50 million adjusted e-books that were kind of more almost out of period stuff that we should think about dropping off? Was that for both the items that Guru mentioned. Royalty and then the licensing.

Rick Prentiss: The Royalty, but I wasn't sure if that was the Royalty and the Licensing, had about 40 million revenue, 15 million adjusted EBITDA that were kind of more almost out of period stuff that we should think about dropping off. Was that for both the items that Guru mentioned, the

Unknown Executive: I want to follow up. Shawn, I think you said the royalty, but I wasn't sure if that was the royalty and the licensing had about $40 million revenue, $15 million adjusted EBITDA that were kind of more almost out of period stuff that we should think about dropping off. Was that for both the items that Guru mentioned, the royalty and then the licensing?

Shawn Duffy: Let me clarify that for you. So in Q1, we had kind of a combination, some that showed up in our tactical networking and some that showed up in advanced technologies. In total, that was about 60. And then what I wanted people to kind of understand on a sequential basis, offsetting that as we go from Q1 into Q2, we'll see some other product revenue growth. Thank you. Coming in, so the net revenue impact is 40 from Q1 to Q2. Hopefully, that helped shape it up a little bit better.

Shawn Duffy: Yeah, Rakesh, let me clarify that for you. So in Q1, we had kind of a combination both of them that showed up in our talk to phone networking and some that showed up in advance technologies. In total, that was about 60. And then what I wanted people to kind of understand is, from a sequential basis, offsetting that as we go from Q1 into Q2. We'll see some other product revenue growth coming in. So the net revenue impact is 40 from Q1 to Q2. Hopefully that helps shape it up a little bit better. That does. And the EBITDA effect was 50 million then compared to the 40 revenues, all right?

Speaker Change: Royalty and then the licensing.

Rick Prentiss: Yep. Yeah, Rick.

Speaker Change: Let me, let me clarify that for you. So in Q1, we had kind of a combination, both some that showed up in our topical networking and some that showed up in advanced technologies.

Speaker Change: In total, that was about 60, and then what I wanted people to kind of understand is from a sequential basis, offsetting that as we go from Q1 into Q2, we'll see some other product revenue growth.

Mark Dankberg: And on the first, on the first point, really, we just wanted to make sure that investors know we're going to take a holistic view of how we address our capital structure. And so in doing that, we just wanted to let people understand that. We're looking across the board. And also, the fact that we're taking a broad view gives us options in terms of the way that we, you know, that we address it.

Mark Dankberg: Coming in, so the net revenue impact is 40 from Q1 to Q2.

Shawn Duffy: That does. And the EBITDA effect was $50 million then compared to $40 million. Is that right?

Mark Dankberg: Hopefully that helps shape it up a little bit better.

Speaker Change: That does. And the EBITDA effect was $50 million then compared to the $40 million, is that right?

Shawn Duffy: Yes, and we kind of see the flow through of that plus a little bit of incremental R&D, you could shape the EBITDA impact net about 50.

Shawn Duffy: Yeah, then we kind of the flow through of that plus a little bit of incremental R&D. You could shape the EBITDA impact net about 50. Sure.

Speaker Change: Yeah, then we kind of the flow through of that plus a little bit of incremental R&D, you could shape the EBITDA impact net about 50.

Mark Dankberg: Okay, that helps. And then on the non-core question from earlier, and then the letter, what would be considered non-core? Is it something that's not integrated in? Is it something that's not really using satellite capacity? Which is trying to think of how would you slice up what you have right now as far as broad strokes? What's kind of core versus non-core?

Mark Dankberg: Okay, that helps. And then on the non-core question from earlier, and then the latter: What would be considered non-core? Is it something that's not integrated in? Is it something that's not really using satellite capacity? Which is trying to think of how would you slice up what you have right now as far as broad strokes? What's kind of core versus non-core?

Mark Dankberg: And certainly, you know, we're going to, you know, we're going to, we're focused on creating durable, competitive advantage in building shareholder value. But we're going to, we're going to take a holistic view. And I think it's really more just to remind, remind, you know, investors that we're taking that view as opposed to a change in the way we're approaching the problem. I'm on the invite.

Speaker Change: Sure.

Speaker Change: Okay, that helps. And then on the non-core question from earlier, and then the latter,

Speaker Change: What would be considered non-core? Is it something that's not integrated in? Is it something that's not really using satellite capacity? I'm just trying to think of how would you slice up what you have right now, as far as broad strokes, what's kind of core versus non-core?

Mark Dankberg: Well, the things that we really focus on are the mobility markets and the government markets, especially government mobility. So the main things we're looking for are our technologies, and this is what we've cultivated. So it's not like we have a lot of divergence in where we are now. Well, what we've cultivated are technologies that, as an example, government customers might want, or in some cases, commercial customers might pay us to develop that enhance our ability to deliver those services. So a lot of those are; there can be ground technology and tenant technology. Some of it might have to do some of the things we're doing that pays the raise, up to the feeder length.

Mark Dankberg: Well, the things that we're really focused on are the mobility markets and the government markets, especially government mobility. So the main things we're looking for are our technologies, and this is what we've cultivated. So it's not like we have a lot of divergence in where we are now, but what we've cultivated are... Technologies that, https://www.ncbi.nlm.nih.gov.au So a lot of those are. There can be ground technology, antenna technology, some of it might have to do, you know, some of the things we're doing with phased arrays.

Mark Dankberg: Yes, we still have our target of 4,200 aircraft in service at the end of FY 25. Thank you.

Speaker Change: this

Speaker Change: Well, the things that, you know, we're really focused on are the mobility markets and the transportation markets.

Speaker Change: And the government markets, especially government mobility.

Speaker Change: So...

Speaker Change: The main things we're looking for are...

Mark Dankberg: Our technologies and this is what we've cultivated so so it's it's not like we have a lot of divergence in where we are now but what we've cultivated is our

Mark Dankberg: Your next question comes from the line of grief and loss would be Riley securities. Please go ahead. Hi, yes. Thanks for taking my question. So first for me, I'm curious to hear your thoughts on the, if you have any thoughts on the viability of putting 12 small satellites in one geo orbital slot, like what a strand is is talking about. And then also along with that, could you compare the service levels that via that could bring the market versus what a strand as reportedly is talking about with perhaps up to 50 gigabits per second per omega satellite.

Mark Dankberg: technologies that, as an example, government customers might want, or in some cases commercial customers, might pay us to develop that enhance our ability to deliver those services.

Mark Dankberg: So a lot of those are.

Mark Dankberg: There can be ground technology, antenna technology.

Mark Dankberg: Peter Link, all those things are pretty valuable, especially, for instance, as cyber security becomes more of an issue in space. Things that bear on what you can do for cyber defenses may become more strategic and have synergies with our services business. But over time, other technologies or other capabilities that we have may recede in importance. And so the main point I was just trying to make is that we're constantly evaluating those technologies and that we're not going to do things just because we did it that way in the past. That's all. As I mentioned when the question first came up, it's really more just a reminder of the way we think and less a signal of the way we think.

Mark Dankberg: Some of it might have to do, you know, some of the things we're doing with phased arrays, optical feeder link, all those things are pretty valuable. Even

Mark Dankberg: All those things are pretty valuable, even especially, for instance, as cyber security becomes more of an issue in space. Things that are there on what you can do for cyber defenses may become more strategic and have synergies with our services business. But over time, some other technologies or other capabilities that we have may recede in importance. And so the main point I was just trying to make is that we're constantly evaluating those technologies. And now we're not going to do things just because we didn't that way in the past. That's all.

Mark Dankberg: especially, for instance, as

Mark Dankberg: Cybersecurity becomes more of an issue in space. Things that bear on what you can do for cyber defenses may become more strategic and have synergies with our services business.

Mark Dankberg: Okay. So I don't really understand exactly what the strongest strategy is. So it's a little bit hard to comment on it. The one thing I would say is that there are. So definitions of what a slot consists of can vary from from organization to organization. There are ITU guidelines, the regulations, but there are guidelines and regulations that do are intended to preserve safety. So that would be an example of consideration of anybody would have to deal with depending on what they mean by a spot.

Mark Dankberg: But over time, you know, other technologies or other capabilities that we have.

Speaker Change: may recede in importance. And so the main point I was just trying to make is that we're constantly evaluating those technologies and that we're not going to do things just because

Mark Dankberg: As I mentioned, when the question first came up, it's really more just a reminder of the way we think and less a signal that the way we're thinking is changing. Just open-minded and always watching, but core right now, at least, is mobility in government. Yes. And technology is that for enhance our ability to compete there. And one of the things we just, from our own perspective, I mean, one of the things that we're excited about in the growth in the defense and advanced technology area is a fair amount of that. We're winning on technologies that, in our view, are going to be really important in both the defense and the commercial markets, including in low-Earth orbits, medium-Earth orbits, or geosynchronous orbits.

Mark Dankberg: Because we did it that way in the past, that's all. As I mentioned, when the question first came up, it's really more just a reminder of the way we think, and less a signal that the way we're thinking is changing.

Mark Dankberg: Just open-minded and always watching, but the core right now, at least, is mobility and government.

Mark Dankberg: just open-minded and always watching, but core right now at least is mobility and government.

Mark Dankberg: Yes, yep, and technologies that will enhance our ability to compete there, and one of the things we're really excited about in the growth in the defense and advanced technology area is a fair amount of that we're winning on technologies that, in our view, are going to be really important in both the defense and the commercial markets, including in low-Earth orbits or medium-Earth orbits or geosynchronous orbits. We have new technology initiatives in all of those areas, and the fact that they're getting funded has always been one of the best indicators that the technology is competitive and valuable.

Mark Dankberg: I think that, you know, I think there's multiple strategies to trying to compete in space where we tend to be very open minded between big and hard satellites. And I think depending on what the better environment is, access to capital or technologies you have in mind, different people will have different preferences. I can tell you we really like our strategies so far that our strategies are really based each time on a kind of a current assessment of the incremental value of any assets we put in space in the context of our whole fleet and market.

Mark Dankberg: Yes, yep, and technologies that that will enhance our ability to compete there and one of the things we

Speaker Change: Just from our own perspective, I mean, one of the things that we're excited about in the growth in the defense and advanced technology area is a fair amount of that we're winning on technologies that, in our view, are going to be really important.

Speaker Change: in both the defense and the commercial markets including in in lower orbits or medium orthorofbits or sho sinkers sort we have new technology initiatives and all of those areas

Mark Dankberg: We have new technology initiatives in all of those areas. And the fact that they're getting funded has always been one of the best indicators that the technology is competitive and valuable. Makes sense.

Mark Dankberg: Okay, that we're sharing. Those are more of the measures we're using. One of the things I think we can sort of tell from our letter is as we've grown, you know, we've followed our metrics of capital efficiency to reflect the performance of entire fleets, including those parts that we release from others as opposed to just looking at the capital efficiency of an individual satellite. And the theory is that by using it or fleet, you can make individual satellites more effective than they would be on their own. And we're seeing that effect as we integrate more of the MRSAT and third party assets.

Mark Dankberg: And the fact that they're getting funded has always been one of the best indicators that the technology is competitive and valuable.

Mark Dankberg: Makes sense. Apologize if this was asked earlier, but what on flight one, what capacity would you kind of earmark that you're actually able to get off of that one, and is there an update as far as where flight two will eventually cover, and flight three would cover? Just wanted to get an update on that one, but again, I'm joining in progress.

Mark Dankberg: I apologize if this was asked earlier, but what on the flight one, what capacity would you kind of earmark that you're actually able to get out of that one? And is there an update as far as where flight two will eventually cover? Flight three would cover just want to get an update on that one. But again, I'm joining in progress. Yeah, okay. When we first encounter the anomaly a little over a year ago, we estimated that we would might be able to get as much as up to 10% of the capacity. And things haven't changed.

Speaker Change: makes sense apologize that this was asked earlier but what on the flight one what capacity

Speaker Change: Would you kind of earmark that you're actually able to get out of that one?

Speaker Change: And is there an update as far as where Flight 2 will eventually cover, Flight 3 would cover? Just wanted to get an update on that one, but again, I'm joining in progress.

Mark Dankberg: When we first encountered the anomaly a little over a year ago, we estimated that we might be able to get as much as 10% of the capacity. And things haven't changed.

Speaker Change: When we first encountered the anomaly a little over a year ago, we estimated that we might be able to get as much as up to 10%.

Mark Dankberg: I think that we've been able to validate some of those assumptions. That's what we're working on. You know, some of that we've also reminded investors that we may need to make additional information. Investments in ground equipment need to get to those levels. So that that's pretty much it that that what we expect is the outlook. The other thing is that is important is even though the end, you know, we had an antenna deployment anomaly that where we are now validates the rest of the payload technology. So that's really important; that'll help us bring the new assets into service faster.

Mark Dankberg: Hopefully that answers that part. Yeah, no, that was great. I appreciate the color mark. Thanks. And then so next for me, could you compare and contrast, ViaSAT's L band spectrum holdings with with other competitors and related just what the company has planned for. ViaSAT's small geo L band satellites that are that are currently ordered with with Swiss to 12 and the the humming sats that are slated to launch in 2026. Okay, yes, when we, we've put a few things on our website in the past, including when we first announced the MRSAT acquisition that kind of listed all our L band assets, spectrum assets.

Speaker Change: Unknown Executive, Robert Blair, Mark Dankberg, Kumara Gowrappan

Mark Dankberg: I think that we've been able to validate some of those assumptions. That's what we're working on. You know, some of that We've also reminded investors that we may need to make additional investments in ground equipment to get to those levels. So that's pretty much it; that's what we expect as the outlook. The other thing that is important is even though we had an intended deployment anomaly, where we are now validates the rest of the payload technology.

Speaker Change: So that's pretty much it. That's what we expect as the outlook. The other thing that is important is...

Speaker Change: Even though we had an intended deployment anomaly, that where we are now validates the rest.

Speaker Change: to the payload technology. So that's really important. That'll help us bring the new assets into service faster. And it's also, we believe, a good indication that when those new satellites do get launched, we're going to get great value out of them.

Mark Dankberg: No, it's also we believe a good indication that when those new satellites do get launched, we're going to get a good value out of them in terms of where they're going to go. So probably the places where they will deliver the most value, the remaining two satellites are over the Americas and in Asia Pacific. And it's most likely that the existing satellite will the impaired one will end up over the Amea region, your Middle East Africa.

Mark Dankberg: So that's really important. That'll help us bring the new assets into service faster. And it's also, we believe, a good indication that when those new satellites do get launched, we're going to get great value out of them. In terms of where they're going to go, probably the places where they will deliver the most value, the remaining two satellites are over the Americas and in Asia-Pacific, and it's most likely that the existing satellite, the impaired one, will end up over the EMEA region here in the Middle East and Africa.

Mark Dankberg: And we are in a pretty strong position, which is really an artifact of the mission that MRSAT serves of aeronautical and maritime safety. So we have a pretty significant inventory of L band spectrum assets. We use, right now we have a variety of assets that we use in space in MRSAT prior to the vice at acquisition acquired their most recent one was three mini satellites from about Swiss to 12 that make up our IDI 8 portion of the constellation.

Speaker Change: In terms of where they're going to go...

Speaker Change: probably the places where they will deliver the most value. The remaining two satellites are over the Americas and in Asia-Pacific and it's most likely that the existing satellite

Speaker Change: The impaired one will end up over the EMEA region here in Middle East Africa.

Unknown Executive: Okay, that helps. And as we think about the margins in the communication services business, are we seeing kind of the third-party supply affect those margins since Flight 1 was capacity constrained? We'll move some capacity over to the Americas at some point, but the third-party usage, is that impacting margins to a noticeable extent on comm services?

Shawn Duffy: Okay, that helps. And as we think about the margins in the communication services business, are we seeing kind of the third party supply affect those margins since flight one was capacity constrainable moves and capacity over to the Americas at some point, but the third party usage is that impacting margins to a noticeable amount on conservices. Yeah, yeah, go ahead. Yeah, I think I mean the main thing, one of the things that I just want to emphasize in very focused on return on capital. That's one of the things investors have emphasized with us, and until one of the ways in which we can enhance return on capital is by leasing. It's not buying; what we're doing is we are doing that very judiciously.

Speaker Change: okay that helps and as we think about the margins in the communication services business

Speaker Change: Are we seeing kind of the third-party supply affect those margins since...

Speaker Change: Flight 1 was capacity constrained. We'll move some capacity.

Speaker Change: over to the Americas at some point. But the third party usage, is that impacting margins to a noticeable amount on comm services?

Mark Dankberg: You know, since that acquisition and I think based on based on sort of what's going on in the market for direct and device open architecture solutions for space and these emerging 3G PV standards. You know, one of the things we've talked about is raising our sites on L band modernization for existing customers and to be able to get into the direct and device market, which is estimated to be pretty substantial. So we are the one thing is we will be adding to our L band fleet strategy.

Mark Dankberg: Yeah, go ahead. Yeah, I think, I mean, the main thing, one of the things that I just want to emphasize, and I'm very focused on return on capital, that's one of the things investors have highlighted with us. And one of the ways in which we can enhance return on capital is by leasing, not buying. What we're doing is we are doing that very judiciously, right? And one of the things that we've emphasized a lot, which we think is worth investor and analyst attention, especially in the mobility markets, is understanding those demand patterns and where there is bandwidth demand.

Speaker Change: I just want to emphasize that we've been very focused on return on capital. That's one of the things investors have emphasized with us.

Speaker Change: And so one of the ways in which we can enhance return on capital is by leasing and not buying.

Shawn Duffy: Right, and one of the things that we've emphasized a lot, we think is worth investor and analyst attention is especially in the mobility market is understanding those demand patterns and where there's been with demand. What's really interesting is different. This is actually a pretty interesting, but I was different operators with different customer bases will have different views of where those demands are. So by if the operators trade with each other in ways where I've got a surplus here, but you've got that I demand there and you have complimentary things, it can be a win-win situation.

Speaker Change: What we're doing is we are doing that very judiciously, and one of the things that we've emphasized a lot, we think is worth investor and analyst attention is, especially in the mobility markets, is understanding those demand patterns and where there's bandwidth demand. What's really interesting is...

Mark Dankberg: We just haven't yet disclosed how we'll do that. I think on the IH just to be sure we're expecting those to be in service in 2028. Great. Thanks for all that color mark. Appreciate it. I'll pass it off and thanks for taking my questions. Welcome. Thank you.

Mark Dankberg: What's really interesting is that different operators with different customer bases will have different views of where those demands are. So if the operators trade with each other in ways where, hey, I've got a surplus here, but you've got, but I've demand there, and you have complementary things, it can be a win-win situation. So one of the things we're really looking at is tools, tools that let us, I would say, strategically, it's not, I mean, the fact that we don't have all the bandwidth we expected That is a big issue for us. We are firing more, do that, but also I think that there's a need to do it as well.

Speaker Change: Different, this is actually a pretty interesting phenomenon, different operators with different customer bases will have different views of where those demands are.

Speaker Change: So if the operators trade with each other in ways where, hey, I've got a surplus here, but I have demand there, and you have complementary things, it can be a win-win situation.

Ryan Koontz: Your next question comes from the line up Ryan Coons from leave on the company. Please go ahead. Great, thanks. You know, really nice progress on the IFC market there and lots of commentary about slowing OEM deliveries. And I'm wondering to what effect you've already seen that impact in your current growth rates or do you think that the growth rate for that business slows because of expected, you know, further problems in in turning it and receiving new aircraft?

Shawn Duffy: So, one of the things we're really looking at is tools that led up. Lee's bandwidth, I would say strategically, it's not, I mean, the fact that we're, that we don't have all the bandwidth we expected with ISAT 351, that is a big issue for us. We are, we are far and more bandwidth to do that, but also I think that there's a strategic value to it as well. Yeah, and Rick, if I was to add on to that real quickly, I think, you know, big sector is that our growth size is, you know, more than offset that impact; it's been all factored into our outlook, which one make sure that's clear.

Mark Dankberg: So, one of the things we're really looking at is tools, tools that let us...

Lee: Lee's bandwidth, I would say strategically it's not I mean the fact that we're

Speaker Change: That we don't have all the bandwidth we expected with ViaSat 3.1, that is a big issue for us. We are firing more bandwidth.

Mark Dankberg: to do that, but also I think that there's a strategic value to it as well.

Shawn Duffy: And Rick, if I was to add on to that real quickly, I think, you know, the big picture is that our growth upsize is, you know, more than offsets that impact. It's all factored into our outlook. I just want to make sure that's clear.

Ryan Koontz: Yeah, okay. Good question. The, you know, the real catalyst for the OEM deliveries have been around for quite a while. I mean, so we're already seeing those effects. We have for at least a couple of quarters. And we haven't really seen that, that the delivery rates have been diminished over the last couple of months. So it's really more a projection of what we're seeing so far, absent, you know, absent a change in the OEM delivery department.

Mark Dankberg: Yeah, and Rick, if I was to add on to that real quickly, I think, you know, big picture is that our growth size is, you know, more than offset that impact. It's been all factored into our outlook. Just want to make sure that's clear. Yes.

Mark Dankberg: Yes, that makes sense, and one quick one if I can squeeze more more in there, earlier question about the L band, but what about the S band, and maybe frame out when do you think directed device becomes already for prime time noticeable material. So our spectrum, our spectrum holdings are primarily in L band. We do have S band in Europe that right now we use for the European aviation network. One of the things that, one of the things that we have led is creation of the mobile satellite services association, which is, we really encourage people to look into, but the underlying premise there is that what's going to be most important in really scaling the direct device market is the amount of bandwidth that's available in the aggregate.

Mark Dankberg: That makes sense. And one quick one, if I can squeeze one more in there, earlier question about the L band, but what about the S band? And maybe frame out when do you think direct-to-device will become a ready-for-prime-time noticeable material type of item?

Rick Prentiss: That makes sense. And one quick one, if I can squeeze one more in there, earlier question about the L band, but what about the S band? And maybe frame out when do you think direct-to-device becomes a ready-for-prime-time noticeable material type of item?

Mark Dankberg: Okay, so our spectrum holdings are primarily in the L-band. We do have S-band in Europe that right now we use for the European Aviation Network. One of the things that we have left is the creation of the Mobile Satellite Services Association, which is.

Ryan Koontz: Really didn't, you know, there's a few issues on 737s. There are some issues, there's also a couple of the wide bodies, and then there've been engine issues associated with the Airbus plane. So those are really the dominant issues that have affected it, and they're, they're not getting worse, but they're persisting. You know, and maybe add on to that microquick Ryan, you know, I think is more good thing.

Speaker Change: Okay, so our spectrum holdings are primarily in L-band. We do have S-band in Europe that right now we use for the European Aviation Network.

Speaker Change: One of the things that, one of the things that we have read

Speaker Change: is a creation of the Mobile Satellite Services Association, which is...

Mark Dankberg: We'd really encourage people to look into it, but the underlying premise there is that what's going to be most important in really scaling the direct device market is the amount of bandwidth that's available in the aggregate. And so what we are creating, and have created, is an industry association to try to leverage Spectrum Holdings from different spectrum holders, including L and SAMHSA, to use that in a common way, that is, with common standards and open architecture, in a way that benefits all operators in meeting customer demand at affordable prices.

Speaker Change: We'd really encourage people to look into, but the underlying...

Speaker Change: premise there is that what's going to be most important

Ryan Koontz: We, you know, a little bit, we've talked about is our, you know, deliveries to be a little bit more back-weighted, but I think just to keep in contact from the quarter of a quarter performance, just from Q1 to Q2, you know, I just wanted to kind of put a couple things out there for very big kind of keep in mind. And from Q1, you know, this quarter we had some really, you know, two unique royalty and licensing agreements.

Speaker Change: In really scaling the direct device market is the amount of bandwidth that's available in the aggregate. And so what we are creating, have created, is an industry association to try to leverage

Mark Dankberg: And so what we are creating have created is an industry association to try to leverage spectrum holdings from different spectrum holders, including L and S band, to use that in a common way, that is with common standards open architecture in a way that benefits all operators in meeting customer demand. And at affordable prices, and also going back to one of your other points, it creates opportunities for shared space and ground infrastructure that can support multiple spectrum holdings.

Mark Dankberg: Spectrum Holdings from different Spectrum Holders including L and S Band.

Mark Dankberg: to use that in a common way, that is, with common standards, open architecture, in a way that benefits

Ryan Koontz: Our portfolio there is extending. More of that in our portfolio, but we did get a little bit of an uptick in this quarter. So next quarter we'll see that tick down, but we will start to see benefits as some of the product revenues grow from Q1 to Q2 offsetting some of that. And then we'll see, you know, a bit of additional R&D expenses, but kind of net big picture is we'll see our revenues take down from 40 million dollars quarter of a quarter, just related to that royalty component.

Mark Dankberg: And also going back to one of your other points, it creates opportunities for shared space and ground infrastructure that can support multiple spectrums. So that ties a little bit together into our strategy for how do we evolve into this market in a very capital efficient way, meet our capital objectives, but still grow when does that market arrive?

Mark Dankberg: all operators in meeting customer demand at affordable prices and also going back to one of your other points it creates opportunities for shared space and ground infrastructure that can support multiple spectrum buildings.

Mark Dankberg: So that ties a little bit together into our strategy for how do we evolve into this market in a very capital-efficient way, meet our capital objectives, but still grow on the when does that market arrive. One of the things that is exciting is it's already starting to happen, and that is there are devices being deployed; some have been deployed already, others will really start scaling this fall, which will have chips in them with the, you know, 3GPP is called narrow band IoT standard. And that standard will support things like SOS services, but also messaging, like notifications that you can get on devices.

Mark Dankberg: So, that ties a little bit together into our strategy for how do we evolve into this market in a very capital efficient way, meet our capital objectives, but still grow.

Mark Dankberg: One of the things that is exciting is it's already starting to happen. And that is, there are devices being deployed. Some have already been deployed.

Ryan Koontz: And 50 million dollars on the EBITDA, but we're going to continue to see growth in our IFC and we'll see our product revenues and IFCs start to tick up as well, but more back-weighted in the year. Great, that makes sense, Sean. I interpret that, but that's great clarification. Thank you.

Mark Dankberg: On when does that market arrive, one of the things that is exciting is it's already starting to happen and that is there are

Mark Dankberg: Others will really start scaling this fall, which will have chips in them with the 3GPP, it's called narrowband IOT scan. And that standard will support things like SOS services, but also messaging, and notifications that you can get on devices. So one of the things we talked about starting six or nine months ago was forming a partnership to support those devices starting in the U.S. And that's happening. We already are supporting them. Right now, they're:

Mark Dankberg: Devices being deployed. Some have been deployed already. Others will really start scaling this fall.

Mark Dankberg: Another question from Mark, just on kind of this integrated service offering, I know you've talked about historically when you now in Marsat, having kind of a unified service offering and then now you're hybrid offering with Leo Partners. What sort of technical challenges, obviously there, I think there's business demand out there. What sort of technical challenges do you have with a truly unified offering? to roll that out across your customer base across, but in Marcia and by-sat as well as third parties.

Mark Dankberg: which will have chips in them with the, you know, 3GPP, it's called narrowband IOT standard, and that standard will support things like SOS services, but also messaging.

Mark Dankberg: So we one of the things we talked about starting six or nine months ago was forming a partnership. to support those devices starting in the U.S. And that's happening. We already are supporting devices. Right now they're, they're more like an emergency location and signaling devices, but the same chips that support that into the same infrastructure are coming in handsets. We expect just within the next few months. So I think that's the way you'll see it start. The next big step is what's called the 5G New Radio version of those chip standards. Those standards are still being defined.

Speaker Change: Are you good?

Mark Dankberg: Notifications that you can get on devices.

Speaker Change: So we, one of the things we talked about starting six or nine months ago was forming a partnership.

Mark Dankberg: To support those devices starting in the U.S. and that's happening. We already are supporting devices. Right now they're

Mark Dankberg: Thanks. Okay. Yeah. There to one thing is we are aiming to harmonize the offerings and then also to be able to extend them to the legacy in Marcia and then kind of upgrade what the by-sat. What services are probably the single biggest one we have is that they were, you know, they originally were two different networks. There's the Global Express network, a K band for in Marcia and by-sat had its own network.

Mark Dankberg: They're more like emergency location and signaling devices, but the same chips that support that on the same infrastructure are coming in handsets, we expect just within the next few months. So I think I think that's the way you'll see it start. The next big step is what's called the 5G new radio version of those chip standards. However, those standards are still being defined. Probably will start being deployed at the end of twenty five or twenty six. What we think is the number of devices, and basic functions is going to start scaling fairly soon. The number of the the Great, it sounds like return on capital and is positive.

Speaker Change: They're more like emergency location and signaling devices, but the same chips that support that into the same infrastructure are coming in handsets, we expect, just within the next few months.

Speaker Change: So I think that's the way you'll see it start. The next big step is what's called the 5G New Radio version of those chip standards. Those standards are still being defined, probably will start being deployed end of 2025, 2026.

Mark Dankberg: So that's what we're working on. There are intermediate things that we can do to improve, especially the legacy GX services. Short of that, but that that harmonization is probably going to occur over the next one or two years. It's a little bit harder in the aviation space because every any type of changes have to go through FAA flatworthiness certifications. So that kind of extends that timeline. In the maritime front, we have a little more flexibility in implementing multi-term solutions.

Mark Dankberg: Probably will start being deployed end of 2526. What we think is that the number of devices that the basics functions is going to start scaling fairly soon. The number of the quality of the services of speed and number of devices that be supported will start scaling as these new chips come online and more of the spectrum in space is allocated to that function.

Mark Dankberg: What we think is that the number of devices that...

Speaker Change: Basic Functions is going to start scaling fairly soon.

Mark Dankberg: The quality of the services of the speed and number of devices that can be supported will start scaling as these new chips come online and more of the spectrum in space is allocated to that function.

Unknown Executive: Great. Sounds like we're turned on capital and positive free cash or the mantra, so appreciate all that extra info. Thanks.

Unknown Executive: Great, it sounds like return on capital and positive free cash flow are the mantras. I so appreciate all that extra info.

Mark Dankberg: So that's one of the reasons that we can start harmonizing some of the maritime staff, which we think will will drive some improvement sooner as early as X-quarters when we'll start that. That's super helpful. Thanks for that.

Speaker Change: Great, it sounds like return on capital and positive free cash flow are the mantras, so appreciate all that extra info.

Chris Quilty: Your next question comes from the line of Chris Quilty with Quilty's Place. Please go ahead.

Unknown Executive: Your next question comes from the line of Chris Quilty with Quilty's Place. Please go ahead.

Mark Dankberg: Your next question comes from the line of Chris Quilty with Quilty's Place. Please go ahead.

Chris Quilty: Thanks. And thanks for all the additional disclosure and putting out the prior financials or the restated financials prior to the quarter. That was helpful. Quick question on the maritime business. It looks like the terminal count continues to go up, but revenues are going down. Is that our compression primarily happening on the legacy L band side, or are you seeing some on the GX? And can you talk about what you're seeing with starling competition in the market. Yeah, so the majority of the revenue decline is not in K band; it's basically said it's certain it's certain of the L band services.

Unknown Executive: Thanks. And thanks for all the additional disclosure and for putting out the prior financials or the restated financials prior to the quarter. That was helpful.

Mark Dankberg: And just follow on to that. Do you look at things like wind optimization and, you know, ESA and tennis and these sorts of things as part of that solution for multi-erubism. Yes, and there are really two parts to it. One part is how we harmonize all the existing fleet, whether it's aviation or maritime or government. So that because there's a large installed base, we're very focused on doing that, bringing up the level of service across the existing fleet.

Chris Quilty: Thanks and thanks for all the additional disclosure and putting out the prior financials or the restated financials prior to the quarter that was helpful. Quick question on the maritime business. It looks like the the terminal count continues to go up but revenues are going down.

Mark Dankberg: Quick question on the maritime business. It looks like the terminal count continues to go up, but revenues are going down. Is that ARPU compression primarily happening on the legacy L band side, or are you seeing some on the GX? And can you talk about what you're seeing with Starlink competition in the market?

Mark Dankberg: Is that ARPU compression primarily happening on the legacy L-band side or are you seeing some on the GX?

Speaker Change: And can you talk about what you're seeing with Starlink competition in the market?

Mark Dankberg: Yeah, so the majority of the revenue decline is not in K-band, as I basically said, it's certain L-band services. We have a pretty, we have multiple different L-band services, and different services are seeing different effects. The one that is seeing the largest decline, and this has gone on for several years, is what's called Fleet Broadband, which is really the L-band broadband service, and we, Inmarsat, have known that that's going to be in decline, and so that accounts for the bulk of the revenue.

Speaker Change: Yeah, so the majority of the revenue decline is not in K-Band. This is basically said, it's certain of the L-Band services. We have a pretty, we have multiple different L-Band services. Different services are seeing different effects.

Mark Dankberg: And then we have another roadmap, which is what we're going to do for new installs. And there we work with customers. We have a lot more, you know, a lot of new installs, for instance, in the aviation market or mindset. So that gives us a roadmap for when we can install terminals that use things like case to race, like you just mentioned. But we also have the ability to upgrade the existing fleet with things like multi orbit on many of the platforms just taking advantage of the equipment that's on there already for you. We're using both of those. Okay. Great. Thanks Mark. Appreciate insights. That's different. Yeah. Thank you.

Chris Quilty: We have a pretty we have we have multiple different L band services. Different services are seeing different effects. The one that is seeing the largest decline, and this has gone on for several years, is what's called sweet broadband, which is really the L band broadband service. And that that is, you know, we in March that has known that that's going to be in decline. And so that is that that accounts for the bulk of the revenue. So actually, some of the L band services may grow. Different L band services may grow on the K band; that's still growing, but not as fast as we'd like it.

Speaker Change: The one that is seeing the largest decline, and this has gone on for several years,

Speaker Change: is

Speaker Change: What's called Fleet Broadband, which is really the LBAN broadband service.

Speaker Change: And that, uh...

Speaker Change: That is, you know, we, INMARSAT has known that that's going to be in decline, and so that is, that accounts for the bulk of the revenue.

Mark Dankberg: Actually, some of the L-Band services may grow, different L-Band services may grow on the K-A-Band, that's still growing, but not as fast as we'd like it, and we have some work to do to turn that around. I think that the Nexus wave is really the most obvious thing, the near-term thing, to do that, and then followed by the ViaSat-3 bandwidth after that. So those are the things we're doing there.

Speaker Change: Actually, some of the L-Band services may grow, different L-Band services may grow on the K-A-Band, that is still growing.

Mark Dankberg: The next question comes from the line of Rick frontiers with Raymond James. Please go ahead. Thanks for that. Everybody on a very busy on his day. Yep. Thanks for joining. Hey, you betcha. A couple of ones. I want to follow. I think you said the royalty, but I wasn't sure if that was the royalty and the licensing. How about 40 million revenue, 50 million adjusted e-books that were kind of more almost out of period stuff that we should think about dropping off was that for both the items that Guru mentioned.

Mark Dankberg: And we need some. We have some work to do to turn that around. I think that the next this way is really the most obvious thing near near term thing to do that and then followed by the vice at three bandwidth after that. So those are things we're doing there, and I think the other thing I just want to emphasize is the things that we do to position us for direct device. We expect to have a pretty transformative impact and beneficial impact on all of our L band services, but it's really going to take a refresh in the space segment.

Speaker Change: But not as fast as we'd like it, and we have some work to do to turn that around. I think that the nexus wave is really the most obvious.

Speaker Change: Near-term thing to do that and then followed by the ViaSat 3 bandwidth after that.

Mark Dankberg: And I think the other thing I just want to emphasize is the things that we do to position... For a directed device, we expect it to have a pretty transformative impact and beneficial impact on all of our L-band services, but it's really going to take a refresh in the space segment. But all those things we're trying to do at LBAN are aligned; they'll all benefit from the same investments and the same types of agreements that we're looking to make, building on these, Open Standards and Open Art.

Speaker Change: So those are the things we're doing there. And I think the other thing I just want to emphasize is...

Speaker Change: The things that we do to position us for a directed device, we expect are going to have a pretty transformative impact and beneficial impact on all of our LBAN services, but it's really going to take a refresh in the space segment to do that.

Mark Dankberg: Royalty and then the licensing. Yeah, Rakesh, let me clarify that for you. So in Q1, we had kind of a combination both of them that showed up in our talk to phone networking and some that showed up in advance technologies. In total, that was about 60. And then what I wanted people to kind of understand is from a sequential basis, offsetting that as we go from Q1 into Q2. We'll see some other product revenue growth coming in.

Mark Dankberg: to do that. But all those, all the things we're trying to do at Albany are aligned. Oh, benefit from the same investments and the same types of agreements that we're looking to make, building on these open standards and open our potential. Because I thought that is a one-time item. Yeah. Gotcha.

Speaker Change: But all those, all the things we're trying to do at LBAN are aligned, they'll all benefit from the same investments and the same types of agreements that we're looking to make building on these open standards and open architecture.

Mark Dankberg: And then Chris, I just want to also note real quick before we move up there, just from a comparative perspective, when you're looking at last year, it was about $6 million of a take or pay benefit that came into revenue. So just wanted to make sure you guys had that as a one-time item.

Mark Dankberg: And then Chris, I just want to also note real quick before we move up there, just from a comparative perspective, when you're looking to last year, there was about $6 million of a take or pay benefit that came into revenue. So just wanted to make sure you guys had that as a one-time item.

Mark Dankberg: So the net revenue impact is 40 from Q1 to Q2. Hopefully that helps shape it up a little bit better. That does. And the EBITDA effect was 50 million then compared to the 40 revenues, all right? Yeah, then we kind of the flow through of that plus a little bit of incremental R&D. You could shape the EBITDA impact net about 50. Sure. Okay, that helps. And then on the non-core question from earlier and then the letter, what would be considered non-core?

Shawn Duffy: Gotcha. And is NexusWave intended to be, I know it's multi-orbit, but is it multi-frequency? And what are you thinking about, you know, partnerships on KA non-geo?

Mark Dankberg: And is Nexus wave intended to be, I know it's multi-orbit, but is it multi-frequency? And what are you thinking about, you know, partnerships on K a non geo? So yes, it is at Maritime. And there are a couple of other places where multi-orbit can be done at multi-band. So, so we're forming a partnership around that. We definitely want to take advantage of that. Others are going to be are going to perform way better and simpler with K a only. So we're working on that as well. So we do expect to have K band multi-orbit partnerships as well.

Chris Quilty: Gotcha. And is NexusWave intended to be, I know it's multi-orbit, but is it multi-frequency? And what are you thinking about, you know, partnerships on KA non-geo?

Mark Dankberg: So yes, it is maritime. And there are a couple of other places where multi-orbit can be done at multiband. So, we're forming a partnership around that. We definitely want to take advantage of that. Others are going to be, are going to perform way better and simpler with KA only. So we're working on that as well. So we do expect to have KA band multi-orbit partnerships as well, and actually, we do in some cases. What we're really looking to do, I should say, is to expand it more broadly.

Mark Dankberg: Is it something that's not integrated in? Is it something that's not really using satellite capacity? Which is trying to think of how would you slice up what you have right now as far as broad strokes? What's kind of core versus non-core? Well, the things that we really focus on are the mobility markets and the government markets, especially government mobility. So the main things we're looking for are our technologies and this is what we've cultivated.

Speaker Change: So, yes, it is maritime and there are a couple of other places where multi-orbit can be done at multi-band. So...

Speaker Change: So we're forming a partnership around that. We definitely want to take advantage of that. Others are going to be...

Speaker Change: are going to perform way better and simpler with KA only. So we're working on that as well. So we do expect to have KA band multi-orbit partnerships as well.

Mark Dankberg: And actually, we do already, in some cases. What we're really looking to expand is it more broadly. Gotcha.

Speaker Change: And actually, we do already, in some cases, what we're really looking to do. I should, what I would say is we're looking to expand it more broadly.

Mark Dankberg: So it's not like we have a lot of divergence in where we are now. Well, what we've cultivated are technologies that, as an example, government customers might want or in some cases commercial customers might pay us to develop that enhance our ability to deliver those services. So a lot of those are, there can be ground technology and tenant technology. Some of it might have to do some of the things we're doing that pays the raise, up to the feeder length.

Mark Dankberg: Gotcha. And that, I guess, brings us to the flat panel antenna or the ESA. Are you designing one for both maritime and aviation services?

Mark Dankberg: And that, I guess, brings us to the flat panel antenna or the ESA. Are you designing one for both maritime and aviation services? So we, one of the things, one of the things we keep saying is we don't have to do everything ourselves. So we have some really good flat panel technology, which we can use. Basically, one of the things that I think people are discovering is that, you know, face the rays of technology, it's not necessarily a product and that the products need to be adapted to different market segments. It's like different from maritime versus arrow versus ground and then different in different types of platforms in each of those market segments.

Mark Dankberg: All those things are pretty valuable, even especially, for instance, as cyber security becomes more of an issue in space, things that are there on what you can do for cyber defenses may become more strategic and have synergies with our services business. But over time, some other technologies or other capabilities that we have may recede in importance. And so the main point I was just trying to make is that we're constantly evaluating those technologies.

Speaker Change: Gotcha and that I guess brings us to the flat panel antenna or the ESA. Are you designing one for both maritime and and aviation services?

Mark Dankberg: One of the things we keep saying is we don't have to do everything ourselves. So we have some really good flat panel technology which we can use. Basically, one of the things I think people are discovering is that phased arrays and technology are not necessarily a product and that the products need to be adapted to different market segments. It's like different for maritime versus aero versus ground, and then different for different types of platforms in each of those market segments.

Speaker Change: So we...

Speaker Change: One of the things we keep saying is, we don't have to do everything ourselves. So we have some really good flat panel technology, which we can use.

Speaker Change: Basically, one of the things I think people are discovering is that phased arrays and technology is not necessarily a product, and that the products need to be adapted to different market segments.

Speaker Change: It's like different for maritime versus aero versus ground and then different in different types of platforms in each of those market segments.

Mark Dankberg: So we will do some ourselves. We think we have really good for technology. It is one of the areas where we're winning government contracts and name commercial contracts on product, but we're also working with supplier partners who also been working on face the rays. And so what we expect is to have a mix of our own technology and third-party technology, probably segmented by application band and platform.

Mark Dankberg: So we will do some ourselves. We think we have really good core technology. It is one of the areas where we're winning government contracts and commercial contracts on products, but we're also working with supplier partners who have also been working on phased arrays. And so what we expect is to have a mix of our own technology and third-party technology, probably segmented by application band and platform. Last question.

Speaker Change: So we will do some ourselves. We think we have really good core technology. It is one of the areas where we're winning our government contracts.

Speaker Change: and commercial contracts on product but we're also working with supplier partners who also have been working on phased arrays and so what we expect is to have a mix of our own technology and third-party technology probably segmented by application band and platform.

Mark Dankberg: And now we're not going to do things just because we didn't that way in the past. That's all. As I mentioned, when the question first came up, it's really more just a reminder of the way we think and less a signal that the way we're thinking is changing. Just open-minded and always watching, but core right now, at least, is mobility in government. Yes. And technology is that for enhance our ability to compete there.

Mark Dankberg: And if I can, the final question, what are you doing in Free Space Optics?

Mark Dankberg: And if I can, final question: what are you doing in free space optics? We're not going to talk about it too much, but I would say is what we are doing is different than the, I've got princess. We're not going to go in and compete with the FDA's interoperable standard for inter satellite optical crossings. We have some other pretty interesting applications, and actually it's an area we've worked on for a while and have had support from the European Space Agency, and now we're getting more support from the U.S. as well. We think it's a really interesting application, but prefer not to talk about it right now.

Speaker Change: And if I can, final question, what are you doing in Free Space Optics?

Mark Dankberg: We're not going to talk about it too much, but I would say what we are doing is different than, for instance, we're not going to go in and compete with the SDA's interoperable standard for inter-satellite obstacle crossings. We have some other, pretty interesting applications, and actually it's an area we've worked on for a while and have had support from. European Space Agency, and now we're getting more support from the U.S. as well. We think it's a really interesting application, but we prefer not to talk about it right now.

Speaker Change: ah

Speaker Change: We're not going to talk about it too much, but I would say is what we are doing is different

Mark Dankberg: then the

Mark Dankberg: And one of the things we just, from our own perspective, I mean, one of the things that we're excited about in the growth in the defense and advanced technology area is a fair amount of that. We're winning on technologies that, in our view, are going to be really important in both the defense and the commercial markets, including in low-earth orbits or medium-earth orbits or geosikers orbits. We have new technology initiatives in all of those areas.

Prentiss: I thought, Prentiss, we're not going to go in and compete with the SBA's interoperable standard for inter-satellite optical crosslinks.

Speaker Change: We have some other pretty interesting applications and actually it's an area we've worked on for a while and have had support from

Mark Dankberg: European Space Agency, and now we're getting more support from the U.S. as well. We think it's a really interesting application, but we prefer not to talk about it right now.

Mark Dankberg: Okay, but these are space space applications and not terrestrial applications. We have both actually the technology base that we're working from as both terrestrial and space space applications. Great.

Mark Dankberg: But these are space-based applications. We have both, actually, the technology base that we're working from.

Mark Dankberg: And the fact that they're getting funded has always been one of the best indicators that the technology is competitive and valuable. Makes sense. I apologize if this was asked earlier, but what on the flight one, what capacity would you kind of earmark that you're actually able to get out of that one? And is there an update as far as where flight two will eventually cover flight three would cover just want to get an update on that one.

Speaker Change: Okay, but these are space-based applications and not terrestrial.

Mark Dankberg: We have both, actually. The technology base that we're working from has both terrestrial and space-based applications.

Speaker Change: Thank you for watching. Please like, comment, and subscribe.

Speaker Change: We have both, actually. The technology base that we're working from has both terrestrial and space-based applications.

Unknown Executive: Thanks, everybody. Thanks for that.

Mark Dankberg: Great.

Mark Dankberg: Thanks, everybody.

Louis Dipalma: Your next question comes from the line of Louis DiPalma with William Blair. Please go ahead.

Unknown Executive: Your next question comes from the line of Louis DiPalma with William Blair. Please go ahead.

Chris Quilty: Thanks Chris.

Speaker Change: Your next question comes from the line of Louis DiPalma with William Blair. Please go ahead.

Mark Dankberg: But again, I'm joining in progress. Yeah, okay. When we first encounter the anomaly a little over a year ago, we estimated that we would might be able to get as much as up to 10% of the capacity. And things haven't changed. I think that we've been able to validate some of those assumptions. That's what we're working on. You know, some of that we've also reminded investors that we may need to make additional information.

Louis Dipalma: Good afternoon. Hi. Geopolitical conflicts have contributed to satellite broadband growth and tactical systems hardware growth for you and many others in the industry.

Unknown Executive: Good afternoon, every Hi, Geopolitical conflicts have contributed to satellite broadband growth and tactical systems hardware growth for you and many others in the industry. What is the revenue exposure?

Louis Dipalma: Good afternoon.

Chris Quilty: and everyone else. Thank you. Thank you.

Louis Dipalma: Hi. Geopolitical conflicts have contributed to satellite broadband growth and tactical systems hardware growth for you and many others in the industry. What is the revenue exposure

Mark Dankberg: What are you going to do? This is the revenue exposure if U.S. Funding were to subside under a new administration for weapons systems or communication systems for some of the ongoing conflicts. Is that a risk for ViaSat? Yes, so there's lots of risks. I think that there's competitive risks. There's program risks. There can be changes, risk due to changes in administration or policy. So we always have those risks. We try to factor them into our outlet. And I think I would say that our outlet reflects our view of the likely go forward business in each of those areas.

Mark Dankberg: If U.S. funding were to subside under a new administration for weapons systems or communication systems for some of the ongoing conflicts, with that. Is that a risk for ViaSat?

Speaker Change: If U.S. funding were to subside under a new administration for

Mark Dankberg: Investments in ground equipment need to get to those levels. So that that's pretty much it that that what we expect is the outlook. The other thing is that is important is even though the end, you know, we had an antenna deployment anomaly that where we are now validates the rest of the payload technology. So that's really important that'll help us bring the new assets into service faster. No, it's also we believe a good indication that when those new satellites do get launched, we're going to get a good value out of them in terms of where they're going to go.

Speaker Change: weapons systems or communication systems for some of the ongoing conflicts. Is that a risk for ViaSat?

Mark Dankberg: But... Yes, so there's lots of risks. I think that, I would look, there's competitive risks, there's program risks. There can be changes, risks due to changes in administration or policy. So we always have those risks. We try to factor them in to our outlook. And I think I would say that our outlook reflects our view of the likely future business in each of those areas.

Speaker Change: But.

Speaker Change: Yes, so there's lots of risks. I think that, uh...

Speaker Change: I would, look, there's competitive risks, there's program risks.

Speaker Change: There can be changes, risk-due-to-changes.

Speaker Change: in administration or policy.

Speaker Change: so

Mark Dankberg: We always have those risks. We try to factor them into our outlook, and I think I would say that our outlook reflects our view of the likely go-forward business in each of those areas.

Mark Dankberg: So probably the places where they will deliver the most value, the remaining two satellites are over the Americas and in Asia Pacific. And it's most likely that the existing satellite will the impaired one will end up over the amea region, your Middle East Africa. Okay, that helps. And as we think about the margins in the communication services business, are we seeing kind of the third party supply affect those margins since flight one was capacity constrainable moves and capacity over to the Americas at some point, but the third party usage is that impacting margins to a noticeable amount on conservices.

Mark Dankberg: That makes sense.

Mark Dankberg: That makes sense. Thanks. And Mark, you just hinted at a potential direct-to-device implementation in the US, perhaps in the second half of the year. In terms of ViaSat's go-to market, Will, you need a roaming partnership with one of the big three. U.S. wireless carriers, or will your implementation look similar to what Apple has with GlobalStar and ViaSat will get paid by either the handset OEM or a chip manufacturer?

Louis Dipalma: Thanks.

Louis Dipalma: And Mark, you just hinted at a potential direct-to-device implementation in the U.S. Perhaps in the second half of the year. In terms of ViaSat's go-do market, will you need a roaming partnership with one of the big three U.S.? Wireless carriers? Or will your implementation look similar to what Apple has with Globalstar? And ViaSat will get paid by either the handset OEI or a chip manufacturer? Okay.

Speaker Change: That makes sense. Thanks.

Speaker Change: hinted at a potential direct-to-device implementation in the U.S. perhaps in the second half of the year. In terms of ViaSat's go-to market,

Speaker Change: Will, you need a roaming partnership with one of the big three...

Speaker Change: U.S. wireless carriers, or will your implementation look similar to what Apple has with GlobalStar and ViaSat will get paid by either the handset OEM or a chip manufacturer?

Mark Dankberg: Yeah, yeah, go ahead. Yeah, I think I mean the main thing one of the things that I just want to emphasize in very focused on return on capital. That's one of the things investors have emphasized with us and until one of the ways in which we can enhance return on capital is by leasing it's not buying what we're doing is we are doing that very judiciously. Right, and one of the things that we've emphasized a lot, we think is worth investor and analyst attention is especially in the mobility market is understanding those demand patterns and where where there's been with demand what's really interesting is different.

Mark Dankberg: Okay, no, so first of all, that's a really good question. The first thing I'm going to say is we're the last ones to ask what Apple is going to do. So I can't comment on that.

Louis Dipalma: No, so first of all, that's a really good question.

Mark Dankberg: I'm going to first thing I'm going to say is we're the last ones to ask what Apple is going to do. So I can't comment on that. But what our perspective is, is that ultimately these will be roaming agreements between carriers. And likely what we expect is just like roaming. For instance, if you look at the way roaming works terrestrially now, you take your AT&T or Verizon T-Mobile plan and you go to Europe. There's a whole list of roaming partners at each one of those. So what we expect is that probably the services will be relatively standardized and the big characters will have roaming agreements with pretty much everybody who can fulfill them.

Will: Okay, no, so first of all, that's a really good question, I'm gonna, first thing I'm going to say is we're the last ones to ask what Apple's going to do, so I can't comment on that, but what our perspective is, is that ultimately these will be roaming agreements.

Mark Dankberg: But what our perspective is that, ultimately, this will be roaming between carriers, and likely, what we expect is just like roaming. Like, for instance, if you look at the way roaming works terrestrially now, you take your AT&T or Verizon T-Mobile plan and you go to Europe, there's a whole list of roaming partners at each one of those. So what we expect is that probably the services will be relatively standardized, and the big carriers will have roaming agreements with pretty much everybody who can fulfill them, and we think that's a good environment. So that's kind of what we're working towards, anticipating that that will be the business arrangement.

Mark Dankberg: between

Mark Dankberg: carriers and likely what we expect is just like roaming like for instance if you look at the way roaming works terrestrially now you take your AT&T or Verizon T-Mobile plan and you go to Europe there's a whole list of roaming partners that each one of those has.

Mark Dankberg: This is actually a pretty interesting, but I was different operators with different customer bases will have different views of where those demands are so by if the operators trade with each other in ways where I've got a surplus here, but you've got that I demand there and you have complimentary things it can be a win-win situation. So, one of the things we're really looking at is tools that led up. Lee's bandwidth, I would say strategically, it's not, I mean, the fact that we're, that we don't have all the bandwidth we expected with ISAT 351 that is a big issue for us, we are, we are far and more bandwidth to do that, but also I think that there's a strategic value to it as well.

Mark Dankberg: So what we expect is that probably the services will be relatively standardized and the

Mark Dankberg: And the big characters will have roaming agreements with pretty much everybody who can fulfill them.

Mark Dankberg: And we think that's a good environment for us. So that's kind of what we're working towards: anticipating that that will be the business arrangements.

Mark Dankberg: and we think that's a good environment for us.

Mark Dankberg: So that's kind of what we're working towards, is anticipating that that will be the business arrangements.

Mark Dankberg: Great.

Mark Dankberg: Great, and do you already have a roaming partnership with one of the big three wireless carriers, or how is your implementation going to be implemented in the second half of the year?

Mark Dankberg: And do you already have a roaming partnership with one of the big three wireless carriers, or how is your implement, how is your setup going to be implemented in the second half of the year. What we expect is that when there are devices in the market that are supported by those carriers, that they will have. That they will be curious, so I put it right now as to what services can be delivered with what quality and what places at what prices, and that'll determine kind of what those roaming agreements are. And so that is still a little bit up in the air, partly because none of the major device makers have yet announced their devices with this capability and whether it's enabled.

Speaker Change: Great, and do you already have a roaming partnership with one of the big three wireless carriers or how is your setup going to be implemented in the second half of the year?

Mark Dankberg: Uh, what we expect is that when there are devices in the market that are supported by those carriers, they will have, and that's the way I'd put it, right now, as to what services can be delivered, with what quality, in what places, at what prices. And that'll determine the kind of what those roaming agreements are. And so that is still, that is still a little bit up in the air, partly because none of the major device makers have yet announced.

Mark Dankberg: Yeah, and Rick, if I was to add on to that real quickly, I think, you know, big sector is that our growth size is, you know, more than offset that impact, it's been all factored into our outlook, which one make sure that's clear. Yes, that makes sense, and one quick one if I can squeeze more more in there, earlier question about the L band, but what about the S band, and maybe frame out when do you think directed device becomes already for prime time noticeable material.

Speaker Change: What we expect...

Speaker Change: is that when there are devices in the market that are supported by those carriers that

Speaker Change: They will have...

Speaker Change: They will be curious, that's the way I'd put it, right now, as to what services can be delivered, with what quality, in what places, at what prices.

Speaker Change: and that'll determine kind of what those roaming agreements are. And so that is still...

Mark Dankberg: So our spectrum, our spectrum holdings are primarily in L band, we do have S band in Europe that right now we use for the European aviation network. One of the things that, one of the things that we have led is creation of the mobile satellite services association, which is, we really encourage people to look into, but the underlying premise there is that what's going to be most important in really scaling the direct device market is the amount of bandwidth that's available in the aggregate.

Speaker Change: That is still a little bit up in the air, partly because none of the major device makers have yet announced.

Mark Dankberg: Their devices with this capability and whether it's enabled. So that's kind of a gating item. There will probably be announcements on that front, you know, over the next couple of weeks to months. I think that that will open up, or maybe sort of drive to closure, the potential for roaming agreements with carriers.

Mark Dankberg: So that's kind of a gating item. There will probably be an announcement on that front, you know, over the next could be weeks to months. I think that that will open up or maybe sort of drive to closure the potential for roaming agreements with carriers.

Mark Dankberg: Their devices with this capability and whether it's enabled. So that's kind of a gating item there'll probably be Announcements on that front, you know over the next could be weeks to months

Mark Dankberg: I think that that will open up or maybe sort of drive to closure the potential for roaming agreements with carriers.

Mark Dankberg: Thanks.

Mark Dankberg: Thanks, and one final one. And I may have missed this from earlier, but what is the full year forecast for the IP licensing revenue? I know you said that there were two different components. One had the annual fee, and then there was the per device fee. But what should we model for the general fund?

Louis Dipalma: And one final one, and I may have missed this from earlier, but what is the full year forecast for the IP licensing revenue? I know you said that there was two different components. One had the annual fee, and then there was the per device, but what should we model for the general full year revenue? Well, one thing I'd say, and then Sean can add on, is what we have is our different, we have different forms of licensing agreements. Some of some of the licensing agreements we get revenue on and things like integrating a capability into it into a device that's sold that being example.

Speaker Change: Thanks and one one final one.

Mark Dankberg: And so what we are creating have created is an industry association to try to leverage spectrum holdings from different spectrum holders, including L and S band to use that in a common way, that is with common standards open architecture in a way that benefits all operators in meeting customer demand. And at affordable prices and also going back to one of your other points, it creates opportunities for shared space and ground infrastructure that can support multiple spectrum holdings.

Speaker Change: And I may have missed this from earlier, but what is the full year?

Speaker Change: forecast for the IP licensing revenue. I know you said that there was two different components.

Speaker Change: One had the annual fee.

Speaker Change: And then there was the per device fee, but what should we model for the general full year revenue?

Mark Dankberg: Well, one thing I'd say, and then Shawn can add on, is that we have different forms of license. Some of the licensing agreements we get revenue on are for things like integrating a capability into a device that's sold. That'd be an example.

Mark Dankberg: Well, one thing I'd say, and then Shawn can add on, is, you know, what we have is our different, we have different forms of licensing agreements.

Speaker Change: Unknown Executive, Robert Blair, Mark Dankberg, Kumara Gowrappan

Mark Dankberg: Some of it would be annual fees, and then right now, the parts that are really going to drive what happens the rest of the year are shipment-based licenses. So as units are shipped or activated, we get a recurring fee.

Mark Dankberg: So that ties a little bit together into our strategy for how do we evolve into this market in a very capital efficient way, meet our capital objectives, but still grow on the when does that market arrive. One of the things that is exciting is it's already starting to happen and that is there are devices being deployed, some have been deployed already others will really start scaling this fall, which will have chips in them with the, you know, 3GPP is called narrow band IOT standard.

Mark Dankberg: Some of it would be annual fees. And then right now, the parts that are really going to drive what happens the rest of the year are ship-in-based licenses. So, as units are shipped, they're activated. We get a recurring fee. And so there's some uncertainty on that. We have forecast work. I don't know that we're going to say what exactly what those forecasts are, but Sean, you can, if you want to add anything to what I just said. Yeah, I can get a little bit of additional color. I think, you know, as Mark said, we have a lot of different agreements.

Speaker Change: that are really going to drive what happens the rest of the year are shipment-based licenses. So as units are shipped or activated, we get a recurring fee.

Mark Dankberg: And that standard will support things like SOS services, but also messaging, like notifications that you can get on devices. So we one of the things we talked about starting six or nine months ago was forming a partnership, to support those devices starting in the U.S, and that's happening. We already are supporting devices. Right now they're, they're more like a emergency location and signaling devices, but the same chips that support that into the same infrastructure are coming in handsets.

Shawn Duffy: And so there's some uncertainty about that. We have forecasts for it. I don't know that we're going to say exactly what those forecasts are. But Shawn, do you want to add anything to what I just said? Yeah, I can give a little bit of additional color.

Speaker Change: and so there's some uncertainty on that. We have forecasts for it. I don't know that we're going to say what exactly what those forecasts are, but Shawn, you can...

Shawn Duffy: As Mark said, we have a lot of different agreements, and even the ones that come in a little lumpier do have longer-term, multi-year recurring streams that may have lumpy timing. But I would say, kind of going forward, over the next few quarters, I'd expect that kind of a quarterly rate to be more like ticking down to like an annual rate of like $20 million for four quarters.

Shawn Duffy: Do you want to add anything to what I just said? Yeah, I can get a little bit of additional color. I think, you know, as Mark said, we have a lot of different agreements.

Shawn Duffy: And even the ones that come in a little lumpier do have longer term multi-year recurring streams that may have lumpy timing, but I would say kind of going forward over the next few quarters. I'd expect that, you know, kind of a quarterly rate to be more like, you know, taking down to like an annual rate of like 20 million, you know, for four quarters. And it's both in our beyond technologies and others as well as in our topical networking.

Shawn Duffy: And even the ones that come in a little lumpier do have longer term multi-year recurring streams that may have lumpy timing, but I would say kind of going forward over the next few quarters.

Speaker Change: I'd expect that, you know, kind of a quarterly rate to be more like, you know, ticking down to like an annual rate of like $20 million, you know, for four quarters. And it's both in our advanced technologies and others as well as in our tactical networking.

Unknown Executive: And it's both in our advanced technologies and others as well as in our tactical networking. Great. That is helpful. Thanks.

Louis Dipalma: Great, that is helpful.

Unknown Executive: Great. That is helpful. Thanks, Shawn. And thanks, Mark, and Guru.

Louis Dipalma: Thanks, Shawn, and thanks, Mark and Drew.

Speaker Change: Great. That is helpful. Thanks, Shawn. And thanks, Mark and Guru.

Mark Dankberg: Thank you very much. Welcome.

Speaker Change: Thank you.

Mark Dankberg: Since there are no more questions, I will now turn the conference back over to Mr. Mark Dankberg, Chairman and CEO, for closing remarks. Please go ahead. Okay, so thanks everybody. Again, for joining our talk.

Mark Dankberg: Since there are no more questions, I will now turn the conference back over to Mr. Mark Dankberg, Chairman and CEO, for closing remarks. Please go ahead.

Speaker Change: Please see the complete disclaimer at https://sites.google.com

Speaker Change: Since there are no more questions, I will now turn the conference back over to Mr. Mark Dankberg, Chairman and CEO , for closing remarks. Please go ahead.

Mark Dankberg: We expect just within the next few months. So I think that's the way you'll see it start. The next big step is what's called the 5G new radio version of those chip standards. Those standards are still being defined. Probably will start being deployed end of 2526. What we think is that the number of devices that the basics functions is going to start scaling fairly soon. The number of the quality of the services of speed and number of devices that be supported will start scaling as these new chips come online and more of the spectrum in space is allocated to that function. Great. Sounds like we're turned on capital and positive free cash or the mantra so appreciate all that extra info. Thanks.

Mark Dankberg: Okay, so thank everybody again for joining our call. We look forward to speaking again next quarter.

Mark Dankberg: We look forward to speaking again next quarter.

Mark Dankberg: Okay, so thanks everybody again for joining our call. We look forward to speaking again next quarter.

Meg: Ladies and gentlemen, that concludes today's call. Thank you all for joining.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining us. You may now disconnect.

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Rick Prentiss: Your next question comes from the line of Chris Quilty with Quilty's place. Please go ahead. Thanks. And thanks for all the additional disclosure and putting out the prior financials or the restated financials prior to the quarter that was helpful. Quick question on the maritime business. It looks like the terminal count continues to go up, but revenues are going down. Is that our compression primarily happening on the legacy L band side or are you seeing some on the GX.

Rick Prentiss: And can you talk about what you're seeing with starling competition in the market. Yeah, so the majority of the revenue decline is not in K band is basically said it's certain it's certain of the L band services. We have a pretty we have we have multiple different L band services different services are seeing different effects. The one that is seeing the largest decline and this has gone on for several years is what's called sweet broadband, which is really the L band broadband service.

Rick Prentiss: And that that is, you know, we we in March that has known that that's going to be in decline. And so that is that that accounts for the bulk of the revenue. So actually some of the L band services may grow different L band services may grow on the K band that's still that is still growing but not as fast as we'd like it. And we need some we have some work to do to turn that around.

Rick Prentiss: I think that the next this way is really the most obvious thing near near term thing to do that and then followed by the vice at three bandwidth after that. So those are things we're doing there and I think the other thing I just want to emphasize is the things that we do to position us for direct device. We expect to have a pretty transformative impact and beneficial impact on all of our L band services, but it's really going to take refresh in the space segment, to do that.

Rick Prentiss: But all those, all the things we're trying to do at Albany are aligned. Oh, benefit from the same investments and the same types of agreements that we're looking to make building on these open standards and open our potential. Because I thought that is a one time item. Yeah. Gotcha. And is Nexus wave intended to be, I know it's multi orbit, but is it multi frequency? And what are you thinking about, you know, partnerships on K a non geo?

Rick Prentiss: So yes, it is at maritime. And there are a couple of other places where multi orbit can be done at multi band. So, so we're forming a partnership around that. We definitely want to take advantage of that. Others are going to be are going to perform way better and simpler with K a only. So we're working on that as well. So we do expect to have K band multi orbit partnerships as well.

Rick Prentiss: And actually, we do already in some cases, what we're really looking to expand it more broadly. Gotcha. And that, I guess, brings us to the flat panel antenna or the ESA, are you designing one for both maritime and and aviation services? So we, one of the things, one of the things we keep saying is we don't have to do everything ourselves. So we have some really good flat panel technology, which we can use.

Rick Prentiss: Basically, one of the things that I think people are discovering is that, you know, face the rays of technology, it's not necessarily a product and that the products need to be adapted to different market segments. It's like different from maritime versus arrow versus ground and then different in different types of platforms in each of those market segments. So we will do some ourselves. We think we have really good for technology. It is one of the areas where we're winning government contracts and name commercial contracts on product, but we're also working with supplier partners who also been working on face the rays. And so what we expect is to have a mix of of our own technology and third party technology, probably segmented by application band and platform.

Mark Dankberg: And if I can, final question, what are you doing in free space optics? We're not going to talk about it too much, but I would say is what we are doing is different than the, I've got princess, we're not going to go in and compete with the FDA's interoperable standard for inter satellite optical crossings. We have some other pretty interesting applications and actually it's an area we've worked on for a while and have had support from European Space Agency, and now we're getting more support from the U.S, as well.

Mark Dankberg: We think it's a really interesting application, but prefer not to talk about it right now. Okay, but these are space space applications and not terrestrial applications. We have both actually the technology base that we're working from as both terrestrial and space space applications.

Mark Dankberg: Great.

Unknown Executive: Thanks everybody. Thanks for that.

Michael DiPalma: Your next question comes from the line of Louis DiPalma with William Blair. Please go ahead. Good afternoon. Hi. Geopolitical conflicts have contributed to satellite broadband growth and tactical systems hardware growth for you and many others in the industry. What are you going to do? This is the revenue exposure if U.S, funding were to subside under a new administration for weapons systems or communication systems for some of the ongoing conflicts. Is that a risk for ViaSat?

Michael DiPalma: Yes, so there's lots of risks. I think that there's competitive risks. There's program risks. There can be changes, risk due to changes in administration or policy. So we always have those risks. We try to factor them in to our outlet. And I think I would say that our outlet reflects our view of the likely go forward business in each of those areas. That makes sense.

Michael DiPalma: Thanks.

Michael DiPalma: And Mark, you just hinted at a potential direct to device implementation in the U.S, perhaps in the second half of the year. In terms of ViaSat's go-do market, will you need a roaming partnership with one of the big three U.S, wireless carriers? Or will your implementation look similar to what Apple has with global star? And ViaSat will get paid by either the handset OEI or a chip manufacturer? Okay. No, so first of all, that's a really good question.

Michael DiPalma: I'm going to first thing I'm going to say is we're the last ones to ask what Apple is going to do. So I can't comment on that. But what our perspective is is that ultimately these will be roaming agreements between carriers. And likely what we expect is just like roaming. For instance, if you look at the way roaming works terrestrially now, you take your AT&T or Verizon T-Mobile plan and you go to Europe.

Michael DiPalma: There's a whole list of roaming partners at each one of those. So what we expect is that probably the services will be relatively standardized and the big characters will have roaming agreements with pretty much everybody who can fulfill them. And we think that's a good environment for us. So that's kind of what we're working towards is anticipating that that will be the business arrangements. Great. And do you already have a roaming partnership with one of the big three wireless carriers or how is your implement, how is your setup going to be implemented in the second half of the year.

Michael DiPalma: What we expect is that when there are devices in the market that are supported by those carriers that they will have. That they will be curious so I put it right now as to what services can be delivered with what quality and what places at what prices and that'll determine kind of what those roaming agreements are. And so that is still a little bit up in the air, partly because the none of the major device makers have yet announced their devices with this capability and whether it's enabled.

Michael DiPalma: So that's kind of a gating item. There will probably be a announcement on that front, you know, over the next could be weeks to months. I think that that will open up or maybe sort of drive to closure the potential for roaming agreements with carriers.

Michael DiPalma: Thanks. And one final one, and I may have missed this from earlier, but what is the full year forecast for the IP licensing revenue? I know you said that there was two different components. One had the annual fee, and then there was the per device, but what should we model for the general full year revenue? Well, one thing I'd say, and then Sean can add on is what we have is our different, we have different forms of licensing agreements.

Michael DiPalma: Some of some of the licensing agreements we get revenue on and things like integrating a capability into it into a device that's sold that being example. Some of it would be annual fees. And then right now, the parts that are really going to drive what happens the rest of the year are ship-in-based licenses. So as units are shipped, they're activated. We get a recurring fee. And so there's some uncertainty on that.

Michael DiPalma: We have forecast work. I don't know that we're going to say what exactly what those forecasts are, but Sean, you can if you want to add anything to what I just said. Yeah, I can get a little bit of additional color. I think, you know, as Mark said, we have a lot of different agreements. And even the ones that come in a little lumpier do have longer term multi-year recurring streams that may have lumpy timing, but I would say kind of going forward over the next few quarters.

Michael DiPalma: I'd expect that, you know, kind of a quarterly rate to be more like, you know, taking down to like an annual rate of like 20 million, you know, for four quarters. And it's both in our beyond technologies and others as well as in our topical networking. Great, that is helpful. Thanks, Shawn, and thanks, Mark and Drew.

Unknown Executive: Thank you very much, welcome.

Mark Dankberg: Since there are no more questions, I will now turn the conference back over to Mr. Mark Dankberg, Chairman and CEO for closing remarks. Please go ahead. Okay, so thanks everybody. Again, for joining our talk. We look forward to speaking again next quarter.

Meg: Ladies and gentlemen, that concludes today's call. Thank you all for joining.

Meg: You may now disconnect. Thank you.