SEC Filing | Viasat, Inc.

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10-Q

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 September 30, 2023.


☐		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)

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 October 27, 2023 was 124,507,277.

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		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		40
Item 3. Quantitative and Qualitative Disclosures About Market Risk		60
Item 4. Controls and Procedures		61
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		61
Item 1A. Risk Factors		61
Item 5. Other Information		61
Item 6. Exhibits		63
Signatures		65

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

VIASAT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	As of September 30, 2023			As of March 31, 2023
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	1,961,583		$	1,348,854
Restricted cash		7,184			30,532
Accounts receivable, net		664,482			419,934
Inventories		345,602			268,563
Prepaid expenses and other current assets		1,080,343			176,629
Total current assets		4,059,194			2,244,512

Property, equipment and satellites, net		7,708,056			4,378,283
Operating lease right-of-use assets		422,959			281,757
Other acquired intangible assets, net		2,771,837			201,205
Goodwill		1,375,542			158,542
Other assets		734,456			466,038
Total assets	$	17,072,044		$	7,730,337
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	388,582		$	271,548
Accrued and other liabilities		1,098,184			647,232
Current portion of long-term debt		62,630			37,939
Total current liabilities		1,549,396			956,719

Senior notes		4,333,129			1,689,186
Other long-term debt		2,895,200			732,315
Non-current operating lease liabilities		397,494			273,006
Other liabilities		2,669,122			218,542
Total liabilities		11,844,341			3,869,768
Commitments and contingencies (Note 10)
Equity:
Viasat, Inc. stockholders’ equity
Common stock		13			8
Paid-in capital		4,752,694			2,540,679
Retained earnings		474,094			1,318,336
Accumulated other comprehensive income (loss)		(36,835	)		(34,713	)
Total Viasat, Inc. stockholders’ equity		5,189,966			3,824,310
Noncontrolling interest in subsidiary		37,737			36,259
Total equity		5,227,703			3,860,569
Total liabilities and equity	$	17,072,044		$	7,730,337

See accompanying notes to the condensed consolidated financial statements.

VIASAT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)


	Three Months Ended						Six Months Ended
	September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
	(In thousands, except per share data)
Revenues:
Product revenues	$	401,729		$	260,959		$	638,101		$	433,454
Service revenues		823,686			402,600			1,367,105			805,161
Total revenues		1,225,415			663,559			2,005,206			1,238,615
Operating expenses:
Cost of product revenues		254,020			174,185			451,098			323,301
Cost of service revenues		512,270			267,703			860,103			536,368
Selling, general and administrative (including satellite impairment and related charges, net – see Note 1 – Basis of Presentation - Property, equipment and satellites)		1,148,989			177,191			1,368,570			348,816
Independent research and development		33,429			32,416			62,433			67,181
Amortization of acquired intangible assets		81,374			7,379			109,185			14,902
Income (loss) from operations		(804,667	)		4,685			(846,183	)		(51,953	)
Other income (expense):
Interest income		32,486			6,809			51,675			6,932
Interest expense		(86,157	)		(4,638	)		(142,096	)		(10,511	)
Other income, net		—			87			—			1,098
Income (loss) from continuing operations before income taxes		(858,338	)		6,943			(936,604	)		(54,434	)
(Provision for) benefit from income taxes from continuing operations		93,077			(76,646	)		93,610			(53,833	)
Equity in income (loss) of unconsolidated affiliate, net		(502	)		(40	)		329			(40	)
Net income (loss) from continuing operations		(765,763	)		(69,743	)		(842,665	)		(108,307	)
Net income (loss) from discontinued operations, net of tax		—			22,187			—			39,712
Net income (loss)		(765,763	)		(47,556	)		(842,665	)		(68,595	)
Less: net income (loss) attributable to noncontrolling interest, net of tax		1,475			684			1,577			1,209
Net income (loss) attributable to Viasat, Inc.	$	(767,238	)	$	(48,240	)	$	(844,242	)	$	(69,804	)
Income (loss) per share attributable to Viasat, Inc. common stockholders - basic:
Continuing operations	$	(6.16	)	$	(0.93	)	$	(7.75	)	$	(1.45	)
Discontinued operations		—			0.29			—			0.53
Income (loss)	$	(6.16	)	$	(0.64	)	$	(7.75	)	$	(0.93	)
Income (loss) per share attributable to Viasat, Inc. common stockholders - diluted
Continuing operations	$	(6.16	)	$	(0.93	)	$	(7.75	)	$	(1.45	)
Discontinued operations		—			0.29			—			0.53
Income (loss)	$	(6.16	)	$	(0.64	)	$	(7.75	)	$	(0.93	)
Shares used in computing basic net income (loss) per share		124,529			75,758			108,903			75,313
Shares used in computing diluted net income (loss) per share		124,529			75,758			108,903			75,313
Comprehensive income (loss):
Net income (loss)	$	(765,763	)	$	(47,556	)	$	(842,665	)	$	(68,595	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax		(12,107	)		(21,995	)		(3,580	)		(42,336	)
Unrealized gain (loss) on hedging, net of tax		(4,839	)		—			1,458			—
Other comprehensive income (loss), net of tax		(16,946	)		(21,995	)		(2,122	)		(42,336	)
Comprehensive income (loss)		(782,709	)		(69,551	)		(844,787	)		(110,931	)
Less: comprehensive income (loss) attributable to noncontrolling interest, net of tax		1,475			684			1,577			1,209
Comprehensive income (loss) attributable to Viasat, Inc.	$	(784,184	)	$	(70,235	)	$	(846,364	)	$	(112,140	)

See accompanying notes to the condensed consolidated financial statements.

VIASAT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months Ended
	September 30, 2023			September 30, 2022
Cash Flows from Continuing and Discontinued Operations	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	(842,665	)	$	(68,595	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		368,572			204,599
Amortization of intangible assets		139,772			43,888
Stock-based compensation expense		43,470			43,806
Satellite impairment and disposition of fixed assets losses, net		835,900			25,406
Deferred income taxes and other non-cash adjustments		(86,749	)		65,250
Increase (decrease) in cash resulting from changes in operating assets and liabilities, net of effect of acquisition:
Accounts receivable		(44,050	)		(42,625	)
Inventories		(45,707	)		(40,190	)
Other assets		(13,277	)		8,382
Accounts payable		36,175			13,222
Accrued liabilities		(7,242	)		3,299
Other liabilities		(61,557	)		(28,310	)
Net cash provided by (used in) operating activities		322,642			228,132
Cash flows from investing activities:
Purchase of property, equipment and satellites, and other assets		(740,664	)		(554,813	)
Payment related to acquisition of a business, net of cash acquired		(342,621	)		—
Proceeds from sale of short-term investments		134,266			—
Payments to acquire short-term investments		(52,000	)		—
Net cash provided by (used in) investing activities		(1,001,019	)		(554,813	)
Cash flows from financing activities:
Proceeds from debt borrowings		1,334,683			275,000
Payments on debt borrowings		(27,979	)		(82,348	)
Payments of debt issuance costs		(47,963	)		(1,511	)
Proceeds from issuance of common stock under equity plans		10,130			9,626
Purchase of common stock in treasury (immediately retired) related to tax withholdings for stock-based compensation		(2,565	)		(832	)
Repurchase of shares by majority-owned subsidiary		—			(30,000	)
Other financing activities		2,186			(1,540	)
Net cash provided by (used in) financing activities		1,268,492			168,395
Effect of exchange rate changes on cash		(734	)		(3,001	)
Net increase (decrease) in cash and cash equivalents and restricted cash		589,381			(161,287	)
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	$	1,968,767		$	149,172
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
Right-of-use assets obtained in exchange for operating lease liabilities	$	13,848		$	3,499
Capital expenditures not paid for during the period	$	6,369		$	45,688
Debt issuance costs not paid for	$	2,151		$	—

See accompanying notes to the condensed consolidated financial statements.

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 September 30, 2023
Balance at June 30, 2023		124,054,755	$	13	$	4,718,054		$	1,241,332		$	(19,889	)	$	36,362		$	5,975,872
Issuance of stock under Employee Stock Purchase Plan		382,062		—		10,048			—			—			—			10,048
Stock-based compensation		—		—		24,945			—			—			—			24,945
RSU awards vesting, net of shares withheld for taxes which have been retired		44,476		—		(353	)		—			—			—			(353	)
Other noncontrolling interest activity		—		—		—			—			—			(100	)		(100	)
Net income (loss)		—		—		—			(767,238	)		—			1,475			(765,763	)
Other comprehensive income (loss), net of tax		—		—		—			—			(16,946	)		—			(16,946	)
Balance at September 30, 2023		124,481,293	$	13	$	4,752,694		$	474,094		$	(36,835	)	$	37,737		$	5,227,703

For the Three Months Ended September 30, 2022
Balance at June 30, 2022		75,551,823	$	8	$	2,482,847		$	211,966		$	(41,962	)	$	49,253		$	2,702,112
Stock-based compensation		—		—		26,046			—			—			—			26,046
RSU awards vesting, net of shares withheld for taxes which have been retired		33,398		—		(327	)		—			—			—			(327	)
Other noncontrolling interest activity		—				(11,783	)		—			—			(18,306	)		(30,089	)
Net income (loss)		—