ViaSat Inc. (NASDAQ:VSAT) Q2 2019 Earnings Conference Call - Final Transcript

Nov 01, 2018 • 01:00 pm ET

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ViaSat Inc. (NASDAQ:VSAT) Q2 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to Viasat Fiscal Year 2019 Second Quarter Earnings Conference Call. Your host for today's call is Mark Dankberg, Chairman and CEO. You may proceed, Mr. Dankberg.

Executive
Mark Dankberg

Okay, thanks. Hello, everybody, and welcome to Viasat's earnings conference call for our second fiscal quarter of 2019. I'm Mark Dankberg, Chairman and CEO, and I've got with me; Rick Baldridge, our President and COO; Shawn Duffy, our CFO; Robert Blair, General Counsel; Bruce Dirks, our Treasurer; and Paul Froelich in Corporate Development.

Before we start, Robert will provide our Safe Harbor disclosure.

Executive
Robert Blair

Thanks, Mark. (Forward-Looking Cautionary Statements) With that said, I'll turn it back over to Mark.

Executive
Mark Dankberg

Okay, thanks. I'll start with highlights and then after that Shawn will go into more depth on the financial results and then I'll come back and give more detail on this quarter's results in fixed broadband, in-flight connectivity, and our government segment. And after that, I'm going to discuss our overall satellite broadband strategy, especially on the main growth drivers. And we'll show how some of the data we've already been disclosing gives more visibility into the factors that are driving our growth and how those factors affect our near and long-term outlooks.

Remember, during fiscal 2017 and 2018, we invested a lot for growth in in-flight connectivity and government products and services with growth we're aiming to achieve in the years here and it's gaining momentum. Second quarter revenues were up 32% year-over-year to a record $517 million and up 24% year-to-date to a record of $956 million. There is strong growth in all our segments. As expected, in-flight connectivity is leading the way with equipment sales in the commercial network segment and the recurring services from those sales in the satellite services segment. Government Systems is doing exceptionally well, delivering excellent revenue and earnings growth due to our satellite mobility services and growth in other product areas. The US fixed broadband portion of satellite services segment revenue is running at a record rate, also contributing to satellite services segment growth and sequential earnings growth.

Forward momentum is exceptionally strong with record second quarter orders of nearly $740 million, that's up 92% year-over-year. Year-to-date, book-to-bill company-wide is over 130% and record backlog of about $1.9 billion lends confidence to continued growth opportunities for the balance of the fiscal year and into the next. We are executing on our orders and converting revenue growth into adjusted EBITDA, which is up 72% sequentially quarter-over-quarter and up 25% year-over-year. Sequentially, over 50% of satellite services segment revenue growth flowed through to adjusted EBITDA. There are comparable effects in the government satellite services. Government and in-flight connectivity services can also carry additional revenues such as technical support, equipment maintenance, in-flight entertainment, cyber security, or others and so they amplify the pure bandwidth sales.

We're really happy with execution so far this year. We began with a strong order book in the in-flight connectivity and government that have been focused on product shipments, activating aircraft, and delivering on services. It's