ViaSat Inc. (NASDAQ:VSAT) Q4 2019 Earnings Conference Call - Final Transcript

May 23, 2019 • 05:00 pm ET


ViaSat Inc. (NASDAQ:VSAT) Q4 2019 Earnings Conference Call - Final Transcript


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Mark Dankberg

we worked hard to fulfill heavy near-term demand for government products. Q1 is typically a seasonally low period for our defense business and the strength of Q4 but increase that effect, but strong government backlog of 1.3 to 1 fiscal '19 book to bill plus the IDIQ contracts and contract options are all indicative of long term growth in defense, quarterly lumpiness notwithstanding. So we see tremendous opportunities throughout the business to build on our momentum in fiscal '20. When we think about the business trajectory during the year though, there's a couple of factors to keep in mind.

Relative to the first quarter, I've noted the usual seasonality in our government business. Additionally, the grounding of the 737 MAX Aircraft will be a growth drag for us in the first half of the year, with the first quarter now already impacted by lost service revenue and aircraft delivery delays. In Satellite Services, we've had good opportunities for long-term margin expansion, as we scale and we've demonstrated that in fiscal '19. While we'll continue to drive scale benefits from our existing services, we'll also be investing in opportunities that will temper satellite services margin expansion this year and those include the build out of ViaSat-2 enabled services in Mexico and Central America, expansion of services in Brazil, via our partnership with Telebras, support for our China opportunity and our Ku/Ka systems capabilities that will drive new opportunities on long-haul fleet to existing customers and potential new airline customers. Overall, as a result of these and other factors we discussed today, we anticipate our fiscal '20 growth to be weighted towards the second half of the fiscal year, similar to what we saw in fiscal 2019.

So wrapping up the term inflection points often never used, but we think it's a fitting description for our fiscal '19. We've got strong competitive positions in attractive growing markets. We've got unique skills on both the bandwidth supply and end user application delivery side and we've shown we can execute to capitalize investments, when the products of those investments reach the market. Our fourth quarter revenue exceeded that of all our satellite data network operator peers on a more diversified base with every one of our segments, achieving double-digit growth. We think we've got the assets, the technology, the employee talent and the end-to-end distribution expertise in the best growth markets to extend our lead even further. So we are enthusiastic about the opportunities before us and we're looking forward to an exciting fiscal '20.

So with that, we'll take -- we'll open it up for questions.