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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2023.

OR

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to .

Commission File Number (000-21767)

 

https://cdn.kscope.io/45c42aad59542f105e2a90258b661831-img243681759_0.jpg 

VIASAT, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

33-0174996

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

6155 El Camino Real

Carlsbad, California 92009

(760) 476-2200

(Address of principal executive offices and telephone number)

Securities registered pursuant to Section 12(b) of the Act:

 

(Title of Each Class)

 

(Trading Symbol)

 

(Name of Each Exchange on which Registered)

Common Stock, par value $0.0001 per share

 

VSAT

 

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

The number of shares outstanding of the registrant’s common stock, $0.0001 par value, as of July 21, 2023 was 124,054,755.

 

 

 


 

VIASAT, INC.

TABLE OF CONTENTS

 

Page

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements (Unaudited)

 

3

Condensed Consolidated Balance Sheets

 

3

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

 

4

Condensed Consolidated Statements of Cash Flows

 

5

Condensed Consolidated Statements of Equity

 

6

Notes to the Condensed Consolidated Financial Statements

 

7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

37

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

54

Item 4. Controls and Procedures

 

55

PART II. OTHER INFORMATION

 

 

Item 1. Legal Proceedings

 

56

Item 1A. Risk Factors

 

56

Item 5. Other Information

 

61

Item 6. Exhibits

 

62

Signatures

 

64

 

2


 

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

VIASAT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

As of
 June 30, 2023

 

 

As of
 March 31, 2023

 

 

 

(In thousands)

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,958,506

 

 

$

1,348,854

 

Restricted cash

 

 

33,964

 

 

 

30,532

 

Short-term investments

 

 

134,266

 

 

 

 

Accounts receivable, net

 

 

630,530

 

 

 

419,934

 

Inventories

 

 

335,561

 

 

 

268,563

 

Prepaid expenses and other current assets

 

 

333,642

 

 

 

176,629

 

Total current assets

 

 

3,426,469

 

 

 

2,244,512

 

 

 

 

 

 

 

Property, equipment and satellites, net

 

 

9,162,891

 

 

 

4,378,283

 

Operating lease right-of-use assets

 

 

442,654

 

 

 

281,757

 

Other acquired intangible assets, net

 

 

2,546,130

 

 

 

201,205

 

Goodwill

 

 

1,592,057

 

 

 

158,542

 

Other assets

 

 

727,405

 

 

 

466,038

 

Total assets

 

$

17,897,606

 

 

$

7,730,337

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

377,638

 

 

$

271,548

 

Accrued and other liabilities

 

 

1,034,065

 

 

 

647,232

 

Current portion of long-term debt

 

 

59,757

 

 

 

37,939

 

Total current liabilities

 

 

1,471,460

 

 

 

956,719

 

 

 

 

 

 

 

Senior notes

 

 

3,610,544

 

 

 

1,689,186

 

Other long-term debt

 

 

3,607,750

 

 

 

732,315

 

Non-current operating lease liabilities

 

 

419,888

 

 

 

273,006

 

Other liabilities

 

 

2,812,092

 

 

 

218,542

 

Total liabilities

 

 

11,921,734

 

 

 

3,869,768

 

Commitments and contingencies (Note 10)

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Viasat, Inc. stockholders’ equity

 

 

 

 

 

 

Common stock

 

 

13

 

 

 

8

 

Paid-in capital

 

 

4,718,054

 

 

 

2,540,679

 

Retained earnings

 

 

1,241,332

 

 

 

1,318,336

 

Accumulated other comprehensive income (loss)

 

 

(19,889

)

 

 

(34,713

)

Total Viasat, Inc. stockholders’ equity

 

 

5,939,510

 

 

 

3,824,310

 

Noncontrolling interest in subsidiary

 

 

36,362

 

 

 

36,259

 

Total equity

 

 

5,975,872

 

 

 

3,860,569

 

Total liabilities and equity

 

$

17,897,606

 

 

$

7,730,337

 

 

See accompanying notes to the condensed consolidated financial statements.

3


 

VIASAT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

 

 

 

Three Months Ended

 

 

 

June 30, 2023

 

 

June 30, 2022

 

 

 

(In thousands, except per share data)

 

Revenues:

 

 

 

 

 

 

Product revenues

 

$

236,372

 

 

$

172,495

 

Service revenues

 

 

543,419

 

 

 

402,561

 

Total revenues

 

 

779,791

 

 

 

575,056

 

Operating expenses:

 

 

 

 

 

 

Cost of product revenues

 

 

197,078

 

 

 

149,116

 

Cost of service revenues

 

 

347,833

 

 

 

268,665

 

Selling, general and administrative

 

 

219,581

 

 

 

171,625

 

Independent research and development

 

 

29,004

 

 

 

34,765

 

Amortization of acquired intangible assets

 

 

27,811

 

 

 

7,523

 

Income (loss) from operations

 

 

(41,516

)

 

 

(56,638

)

Other income (expense):

 

 

 

 

 

 

Interest income

 

 

19,189

 

 

 

123

 

Interest expense

 

 

(55,939

)

 

 

(5,873

)

Other income, net

 

 

 

 

 

1,011

 

Income (loss) from continuing operations before income taxes

 

 

(78,266

)

 

 

(61,377

)

(Provision for) benefit from income taxes from continuing operations

 

 

533

 

 

 

22,813

 

Equity in income (loss) of unconsolidated affiliate, net

 

 

831

 

 

 

 

Net income (loss) from continuing operations

 

 

(76,902

)

 

 

(38,564

)

Net income (loss) from discontinued operations, net of tax

 

 

 

 

 

17,525

 

Net income (loss)

 

 

(76,902

)

 

 

(21,039

)

Less: net income (loss) attributable to
   noncontrolling interest, net of tax

 

 

102

 

 

 

525

 

Net income (loss) attributable to Viasat, Inc.

 

$

(77,004

)

 

$

(21,564

)

Income (loss) per share attributable
   to Viasat, Inc. common stockholders - basic:

 

 

 

 

 

 

Continuing operations

 

$

(0.83

)

 

$

(0.52

)

Discontinued operations

 

 

 

 

 

0.23

 

Income (loss)

 

$

(0.83

)

 

$

(0.29

)

Income (loss) per share attributable
   to Viasat, Inc. common stockholders - diluted:

 

 

 

 

 

 

Continuing operations

 

$

(0.83

)

 

$

(0.52

)

Discontinued operations

 

 

 

 

 

0.23

 

Income (loss)

 

$

(0.83

)

 

$

(0.29

)

Shares used in computing basic net
   income (loss) per share

 

 

93,106

 

 

 

74,863

 

Shares used in computing diluted net
   income (loss) per share

 

 

93,106

 

 

 

74,863

 

Comprehensive income (loss):

 

 

 

 

 

 

Net income (loss)

 

$

(76,902

)

 

$

(21,039

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

Foreign currency translation adjustments, net
   of tax

 

 

8,527

 

 

 

(20,341

)

Unrealized gain (loss) on hedging, net of tax

 

 

6,297

 

 

 

 

Other comprehensive income (loss), net of tax

 

 

14,824

 

 

 

(20,341

)

Comprehensive income (loss)

 

 

(62,078

)

 

 

(41,380

)

Less: comprehensive income (loss) attributable
   to noncontrolling interest, net of tax

 

 

102

 

 

 

525

 

Comprehensive income (loss) attributable to
   Viasat, Inc.

 

$

(62,180

)

 

$

(41,905

)

See accompanying notes to the condensed consolidated financial statements.

4


 

VIASAT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

Three Months Ended

 

 

 

June 30, 2023

 

 

June 30, 2022

 

Cash Flows from Continuing and Discontinued Operations

 

(In thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income (loss)

 

$

(76,902

)

 

$

(21,039

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation

 

 

132,011

 

 

 

102,353

 

Amortization of intangible assets

 

 

42,568

 

 

 

21,734

 

Stock-based compensation expense

 

 

21,752

 

 

 

21,232

 

Loss on disposition of fixed assets

 

 

9,729

 

 

 

11,150

 

Deferred income taxes and other non-cash adjustments

 

 

(24,203

)

 

 

(7,569

)

Increase (decrease) in cash resulting from changes in operating
   assets and liabilities, net of effect of acquisition:

 

 

 

 

 

 

Accounts receivable

 

 

(739

)

 

 

(27,102

)

Inventories

 

 

(34,684

)

 

 

(20,563

)

Other assets

 

 

(39,564

)

 

 

9,148

 

Accounts payable

 

 

41,509

 

 

 

16,912

 

Accrued liabilities

 

 

(58,969

)

 

 

(50,195

)

Other liabilities

 

 

91,158

 

 

 

(16,424

)

Net cash provided by (used in) operating activities

 

 

103,666

 

 

 

39,637

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property, equipment and satellites, and other assets

 

 

(374,926

)

 

 

(270,857

)

Payment related to acquisition of business, net of cash acquired

 

 

(342,621

)

 

 

 

Payments to acquire short-term investments

 

 

(52,000

)

 

 

 

Net cash provided by (used in) investing activities

 

 

(769,547

)

 

 

(270,857

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from debt borrowings

 

 

1,334,683

 

 

 

150,000

 

Payments on debt borrowings

 

 

(18,868

)

 

 

(12,693

)

Payments of debt issuance costs

 

 

(34,558

)

 

 

(1,511

)

Proceeds from issuance of common stock under equity plans

 

 

82

 

 

 

9,626

 

Purchase of common stock in treasury (immediately retired) related
   to tax withholdings for stock-based compensation

 

 

(2,212

)

 

 

(505

)

Other financing activities

 

 

(779

)

 

 

(706

)

Net cash provided by (used in) financing activities

 

 

1,278,348

 

 

 

144,211

 

Effect of exchange rate changes on cash

 

 

617

 

 

 

(1,930

)

Net increase (decrease) in cash and cash equivalents and restricted cash

 

 

613,084

 

 

 

(88,939

)

Cash and cash equivalents and restricted cash at beginning of period

 

 

1,379,386

 

 

 

310,459

 

Cash and cash equivalents and restricted cash at end of period

 

$

1,992,470

 

 

$

221,520

 

Non-cash investing and financing activities:

 

 

 

 

 

 

Issuance of common stock in connection with acquisition

 

$

2,123,455

 

 

$

 

Issuance of common stock in satisfaction of certain accrued compensation liabilities

 

$

31,173

 

 

$

27,619

 

Debt issuance costs not paid for

 

$

6,649

 

 

$

 

Right-of-use assets obtained in exchange for operating lease liabilities

 

$

5,241

 

 

$

3,750

 

Capital expenditures not paid for during the period

 

$

 

 

$

17,944

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the condensed consolidated financial statements.

5


 

VIASAT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

 

 

 

Viasat, Inc. Stockholders

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares
Issued

 

 

Amount

 

 

Paid-in
Capital

 

 

Retained
Earnings

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Noncontrolling
Interest in
Subsidiary

 

 

Total

 

 

 

(In thousands, except share data)

 

For the Three Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2023

 

 

76,912,016

 

 

$

8

 

 

$

2,540,679

 

 

$

1,318,336

 

 

$

(34,713

)

 

$

36,259

 

 

$

3,860,569

 

Exercise of stock options

 

 

2,633

 

 

 

 

 

 

82

 

 

 

 

 

 

 

 

 

 

 

 

82

 

Stock-based compensation

 

 

 

 

 

 

 

 

24,882

 

 

 

 

 

 

 

 

 

 

 

 

24,882

 

Shares issued in settlement of certain accrued
   employee compensation liabilities

 

 

687,851

 

 

 

 

 

 

31,173

 

 

 

 

 

 

 

 

 

 

 

 

31,173

 

RSU awards vesting, net of shares withheld for taxes
   which have been retired

 

 

88,619

 

 

 

 

 

 

(2,212

)

 

 

 

 

 

 

 

 

 

 

 

(2,212

)

Shares issued in connection with acquisition of business, net of issuance costs

 

 

46,363,636

 

 

 

5

 

 

 

2,123,450

 

 

 

 

 

 

 

 

 

 

 

 

2,123,455

 

Other noncontrolling interest activity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

1

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

(77,004

)

 

 

 

 

 

102

 

 

 

(76,902

)

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,824

 

 

 

 

 

 

14,824

 

Balance at June 30, 2023

 

 

124,054,755

 

 

$

13

 

 

$

4,718,054

 

 

$

1,241,332

 

 

$

(19,889

)

 

$

36,362

 

 

$

5,975,872

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2022

 

 

74,428,816

 

 

$

7

 

 

$

2,421,950

 

 

$

233,530

 

 

$

(21,621

)

 

$

48,728

 

 

$

2,682,594

 

Issuance of stock under Employee Stock Purchase
   Plan

 

 

369,712

 

 

 

 

 

 

9,626

 

 

 

 

 

 

 

 

 

 

 

 

9,626

 

Stock-based compensation

 

 

 

 

 

 

 

 

24,158

 

 

 

 

 

 

 

 

 

 

 

 

24,158

 

Shares issued in settlement of certain accrued
   employee compensation liabilities

 

 

719,989

 

 

 

1

 

 

 

27,618