ViaSat Inc. (NASDAQ:VSAT) Q3 2018 Earnings Conference Call - Final Transcript
Feb 08, 2018 • 05:00 pm ET
Welcome to ViaSat's Fiscal Year 2018 Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session and instruction will follow at that time. (Operator Instructions) And as a reminder, this conference call is being recorded.
And I would now like to introduce your host for today's call, Mr. Mark Dankberg, Chairman and CEO. You may proceed, Mr. Dankberg.
Hey, thanks. Good afternoon, everybody, and welcome to ViaSat's earnings (inaudible) third fiscal quarter of 2018.
So I'm Mark Dankberg, Chairman and CEO, and I've got with me Rick Baldridge, our President and Chief Operating Officer; Shawn Duffy, our Chief Financial Officer; Robert Blair, General Counsel; Bruce Dirks, our Treasurer; and Paul Froelich in Corporate Development.
So, before we start, Robert will provide our Safe Harbor disclosure.
Thanks, Mark. (Forward-Looking Cautionary Statements)
That said, back to you, Mark.
Okay. So we'll be referring to slides that are available over the web, and I'll start with some highlights, and then Shawn will discuss the consolidated and segment of our financial results. Then I'll come back and go into some depth on our residential, broadband, in-flight and government businesses. And we'll review our outlook and take questions.
So the first highlight is that ViaSat-2 is ready for service. We anticipate launching service region by region, starting as early as next week, with national coverage planned for the end of this month. We'll feature unlimited plans nationwide, with the highest speeds available in high-demand markets.
Test marketing of the unlimited plans has gone well, and I'll discuss that in some more detail later. We've been anticipating a significant ramp in, in-flight connectivity, and that's under way. In the third quarter, we entered production service with Qantas in Australia, using our second-generation platform, and we began testing service on both new and retrofit aircraft with American Airlines.
We've signed contracts for 92 additional aircraft from existing airline customers during the third quarter, and that brought our total of in-service and under-contract airplanes to just over 1,500. Then today, we announced a new direct contract with United Airlines for over 70 additional aircraft, including their new 737 MAX fleet. And just to be sure, those new aircraft are in addition to the 92 planes that were signed during the third quarter, so that puts us closer to 1,600 total now. And that's also significant because United was the only other airline, besides JetBlue, where we were originally in a subcontract situation. Now we're really pleased to be working directly with both JetBlue and United.
And we had another very strong quarter in Government Systems. Revenue is up 9% and adjusted EBITDA was up 20% in the third quarter on a year-over-year basis. Orders were strong at about $200 million in the third quarter, and that also drove backlog to a record for Government Systems at just over $700 million. We see good growth prospects across all the government major product lines, which, as a reminder, were enabled