Viasat (VSAT) Q4 2026 Earnings Transcript

Image source: The Motley Fool.

Date

Thursday, May 28, 2026 at 5:30 p.m. ET

Call participants

Chairman and Chief Executive Officer — Mark D. Dankberg
Chief Financial Officer — Garrett L. Chase
Chief Enterprise and Strategy Officer — Lisa Curran

Takeaways

Record Contract Awards -- New contract awards reached $1.3 billion, up 9% driven by maritime, government SATCOM, and aviation segments.
Backlog -- Ended at a record $4.1 billion, up 15%, with double-digit growth in both Communication Services and Defense and Advanced Technologies (DAT).
Revenue -- Total revenue was $1.2 billion, up 2%, with 12% growth in DAT offset by a 2% decline in Communication Services.
Net Income -- Net income was $59 million, an improvement of $305 million, mainly due to the gain from the sale of Navarino, lower G&A, and decreased interest expense.
Adjusted EBITDA -- Adjusted EBITDA was $370 million, down 1%, primarily because of higher R&D investment and the impact of the U.S. government shutdown.
Free Cash Flow -- Generated $24 million in free cash flow in the quarter, despite $298 million in capital expenditures, marking the highest CapEx quarter of the year.
Navarino Divestiture -- Sold the Navarino stake for $203 million, and Navarino results previously contributed to adjusted EBITDA.
Net Debt and Leverage -- Net debt stands at $4.8 billion with a leverage ratio of 3.1x, down from the prior year, enabled by $743 million in debt reduction.
Communication Services Segment -- Segment revenue was $810 million, down 2%, as growth in aviation and government SATCOM could not offset the 24% decline in fixed broadband and other services.
Aviation Performance -- Aviation revenue grew 11%; aircraft in service increased 10% to 4,450, with a current backlog of 1,000 units.
Government SATCOM Growth -- Government SATCOM revenue rose 5% and awards plus backlog grew 18% year over year, reflecting international and U.S. government demand.
Maritime Segment -- Maritime revenue fell 1% as vessels in service declined to about 1,350, though backlog holds 1,500 vessels.
DAT Segment (Defense and Advanced Technologies) -- DAT revenue was $361 million, up 12%; InfoSec and Cyber product revenues rose 24% and space and mission systems grew 16%.
Full-Year Results -- Fiscal year revenue reached $4.6 billion; GAAP net loss was $34 million; full-year adjusted EBITDA was $1.55 billion.
Cash Flow and Capital Expenditures -- Operating cash flow was $1.6 billion (or $1.2 billion excluding Ligado payment); full-year CapEx was just under $1 billion; free cash flow was $597 million or $177 million excluding the Ligado lump sum.
ViaSat-3 Program Update -- All deployments on Flight 2 are completed, pending FCC authorization; Flight 3 launched successfully and is expected to enter service in August or September covering Asia-Pacific.
Equitās Initiative -- Viasat expects to generate significant revenue as technology provider for Equitās, a shared satellite infrastructure entity with Space42, targeting 2029 service entry and aiming for capital efficiency and multi-operator participation.
Fiscal 2027 Outlook -- Guidance is for mid-single-digit total revenue growth with low-single-digit Communication Services growth and mid-teens DAT growth; adjusted EBITDA expected to be flat to slightly up and back loaded within the year.
Capital Expenditure Guidance -- Fiscal 2027 CapEx projected at $950 million to $1 billion, with cash CapEx increasing to about $850 million and reductions in capitalized interest alleviating some prior period pressure.
Strategic Initiatives -- Ongoing fleet expansion expected to triple bandwidth inventory; expanding adaptive beamforming and multi-orbit capabilities to drive growth in aviation, maritime, and government SATCOM.
Backlog Growth in DAT -- DAT backlog up 23% year over year, driven by large program wins, including selection as one of two IDIQ awardees for the US Space Force's Protected Tactical SATCOM Global (PTSG) program.
Board Appointments and Governance -- Shekhar Ayer and Jenny Yoon were added to the board and appointed to the strategic review committee, signaling ongoing engagement with Carronade Capital Management.

Need a quote from a Motley Fool analyst? Email [email protected]

Risks

Communication Services revenue declined 2% as "Fixed services and other revenue was down 24%" due to continued U.S. fixed broadband subscriber losses.
Adjusted EBITDA decreased by 1%, attributed to "incremental R and D related to growth initiatives and higher than expected impact from the government shutdown."
Maritime revenue did not return to growth, with revenue down 1% and vessel count in service falling, as management noted, "We did not quite hit our objective of returning maritime revenue to growth."
Ongoing declines are expected in fixed broadband until ViaSat-3 enters service, and growth moderation is anticipated in aviation services due to rising competition.

Summary

Viasat (VSAT 7.66%) reported new records in contract awards and backlog, underpinned by strong order flow in communication services and continued momentum in the Defense and Advanced Technologies segment. The sale of Navarino and Ligado proceeds enabled a reduction in net debt and improved leverage, while positive free cash flow was achieved for the fifth quarter in a row, demonstrating strengthened capital discipline. Management highlighted the completion and launch progress of the ViaSat-3 constellation as a near-term catalyst, with Flight 3 on track to serve Asia-Pacific later this year. The company outlined significant strategic opportunities with the Equitās shared satellite infrastructure venture and signaled optimism on capturing revenue growth through multi-orbit, multi-band capabilities and the upcoming PTSG contract. Guidance points to continued revenue growth concentrated in defense and tech, although EBITDA headwinds are anticipated from the removal of Navarino and decreasing IP settlement benefits.

Chairman Dankberg said, "our ongoing fleet expansion is expected to roughly triple bandwidth inventory," providing capacity to support commercial and government growth initiatives.
CFO Chase disclosed, "we generated almost $180 million with positive free cash flow in each of the last 5 quarters," illustrating consistent operational cash generation.
Management plans to offer further details on Equitās' capital structure and partner roles in a dedicated investor event following finalization of outstanding agreements.
Signed backlog includes 1,000 aircraft for aviation systems, with higher average revenue per aircraft, indicating durability in installation-led revenue streams despite intensified competition.
Space and Mission Systems are benefiting from demand for both commercial and government applications, with tangible opportunities flagged in encrypted communication and lunar relay (Moonlight program), supporting a diverse growth pipeline.

Industry glossary

DAT (Defense and Advanced Technologies): Viasat’s business segment covering defense technology, secure communications, and advanced mission systems.
PTSG (Protected Tactical SATCOM Global): U.S. Space Force program for resilient, secure, dual-band tactical satellite communications systems.
Equitās: A multi-operator, shared satellite infrastructure initiative led by Viasat and Space42 to provide global, capital-efficient L- and S-band satellite services.
3GPP: Standards body specifying global wireless and satellite network interoperability, relevant to direct-to-device and non-terrestrial network services.
NexusWave: Viasat’s new maritime connectivity platform, referenced in the context of installed vessels and backlog.

Full Conference Call Transcript

Mark D. Dankberg: Good afternoon, and thanks for joining us today. I am Mark Dankberg, CEO and Chairman of ISAT. With me, along with Lisa, we have Gary Chase, our Chief Financial Officer As always, we encourage reading the shareholder letter and referencing the slides we posted on our website earlier this afternoon for more details. I will start with 3 areas upfront. Then Gary will review our fiscal year 2026 and fourth quarter results and a preliminary outlook for fiscal year 2027. Then we will take questions. I will cover an update on our strategic perspective, including the cooperation agreement with Carronade Capital Management and updates on ViaSat-3 flights 2 and 3.

Our top level financial year 2026 results and our near term objectives and operational and strategic initiatives. First, I would like to welcome Shekhar Ayer, and Jenny Yoon to our Board of Directors. Shekhar is a seasoned technology executive. With deep operating experience at scale across enterprise software, cloud, networking, and communications infrastructure. Significant public company experience, business strategy, and M&A. His board experience includes seeing Altair through its $10+ billion sale to Siemens. Ginny brings strong financial governance and capital allocation experience to the board.

Advising on and structuring billions of dollars in public debt issuances and working extensively with executive teams on strategic transactions and risk management including as a member of Innosat's board through the completion of its sale to SES. Both Shekhar and Jenny have been appointed to our board's strategic review committee. Earlier this month, we also announced an agreement with Carronade, We have appreciated the constructive dialogue with Carenade over the past year and are pleased with this agreement. Which we believe is in the best interest of ViaSat and its shareholders. On the ViaSat-3 front, subsequent to quarter end, we successfully completed all deployments on flight 2, including the reflectors and boom.

Service entry is pending authorization from the FCC. Also subsequent to quarter end, ViaSat-3 flight 3 launched successfully on April 29. Since then, radiator and solar array deployments have been successfully completed. And orbit raising is underway. Flight 3 is expected to cover the Asia Pacific region arrive on station in about a month, and have service entry expected in August or September of this calendar year. Our ongoing fleet expansion support key growth initiatives in aviation, maritime, fixed services, and government SATCOM businesses. It also introduces important new capabilities including new forms of resilience for our government and commercial customers.

We believe that the ViaSat-3 satellites are the most advanced commercial satellites in the world in terms of adaptive beam forming for cost efficiencies, user performance improvements, and resilience to interference. We also believe they set new commercial standards for solar power generation and thermal dissipation Both those capabilities are among the foundational technology challenges for developing economical data centers in space. Switching to fiscal year 26 results, those financial results were largely consistent with our expectations and plans entering the year. Despite headwinds from the U. S. Government shutdown during the back half of the fiscal year. Gary will go through the financial results in greater detail.

But some highlights include record new contract awards and backlog, along with modest growth in revenue and adjusted EBITDA, that are also both at record levels. Our cash generation is a clear standout. As we generated nearly $600 million in free cash flow and about $180 million excluding the lump sum Ligado. We have also had positive free cash flow in each of the last 5 quarters. We have achieved this while still investing for our future. And our strong cash performance has contributed to strengthening our capital structure. Including very substantial progress towards our target leverage ratio of below 3.0.

So switching to near term operational strategic initiatives, as I shared last quarter, we have 3 key near term focus areas to drive growth in fiscal 27 and beyond. First, our ongoing fleet expansion is expected to roughly triple bandwidth inventory. An increasing adaptive beam forming flexibility is an additional boost to the fleet's effective capacity. Offering higher speeds on both forward and return links. We will also expand our fleet wide multi orbit capabilities in maritime. By augmenting our existing LEO and GEO resources. We are making steady progress on our ERA Ka band multi orbit terminal for in flight communications which has already entered the line fifth certification process for all Boeing commercial airliners.

Calix is also progressing with the launch of its first pathfinder high-speed LEO satellites scheduled this year and initial global service plan for late next year. While the market for broadband satellite services is very competitive, is also growing rapidly, and we believe we have a good opportunity to grow with it. Our second key area, developing and deploying shared, multi-tenant, multi-orbit L- and S-band shared infrastructure delivering next generation mobile satellite services. Including for global aero and maritime safety as well as next generation air, ground, and maritime vehicle autonomy along with mobile direct-to-device opportunities with a focus on lowering capital intensity.

While we are aiming for services in 2029, we are targeting significant revenue from our role as the technology provider for Equitās. The space infrastructure entity we are forming along with Space42. And third, we also intend to sustain the rapid growth rate in our DAT segment for both defense and commercial markets building on our dual use advanced technology. The DAT segment is the first place that new technology developments like we are doing for Equitās, would be recognized. The Equitās initiative for next-generation L and S bands space and ground infrastructure is anticipated to be an important contributor for broadband services. Mobile L and S band services, and DAT.

We continue to work closely with Space 42 and other potential partners as co-founders of the new shared infrastructure entity that is intended to substantially improve capital productivity for L and S band satellite mobility services. Equitus infrastructure is intended to enable 3GPP standards for interoperable non terrestrial network services through both satellite specific and terrestrial frequencies. The shared tower infrastructure model can enable greater spectrum efficiency as well as reduce infrastructure costs for all participating parties. As with terrestrial shared tower infrastructure, the spectrum rights and obligations remain with the participating licensees which are initially Viasat and Space42 but with potential to grow through additional partners. ViaSat is expected to participate as the initial technology prime contractor for Equitus.

Space based L and S band beam forming technology is at the heart of the NTN direct to device opportunity and our technology solution both benefits from and advances our long history of advanced l band and k band broadband space based phase array technology. The foundational Equitās satellite and phased array technologies are also designed to support multi orbit broadband such as Ka band services, at both GEO and LEO orbits. The near term market for commercial and government broadband satellite services remains both highly competitive and rapidly growing. ViaSat has recently seen double digit revenue earnings growth in aviation, offset by declines in fixed residential services and maritime.

In fiscal 27, we anticipate financial results in fixed and residential services will improve but increased competition will reduce our growth rate in aviation services. However, we are seeing accelerated growth opportunities in our DAT segment. That in combination with our communication services segment creates opportunities for accelerating company-wide revenue growth ahead. The space sector is poised to benefit from a number of exciting new defense, commercial, and scientific initiatives and we believe ViaSat is well positioned to participate in a number of those. We believe our relatively unique position as both a leading space technology innovator and a leading satellite services company, helps differentiate us from competitors that are, in most cases, not vertically integrated across those markets.

In the near term, many of those opportunities will first be captured in our DAT segment, I would like to point out a few opportunities that generally involve innovations in business models as well as technology. 1 key opportunity was just announced last week, and subsequent to the end of Q4, we received a follow on award to our initial phase of the PTSG or Protected Tactical Satcom Global contract for a first delivery of a small low cost maneuverable dual band, geosynchronous orbit US government tactical satellite.

We believe that PTSG is an excellent opportunity to grow our participation in government tactical space system technologies and services and an opportunity to use technology innovation to substantially increase the effectiveness and resilience of U.S. Tac-Broadband satellite communications. Helping address potential threats to other orbits and systems. PTSG is closely related to the existing WGS or wideband global system. US tactical satellite network, through which The US has a significant range of international partnerships and coalition interoperability relationships. So there is also a meaningful international opportunity. There are also substantial follow on opportunities in related dual use broadband space technology and services.

Our low cost L and S band multi orbit proliferated LEO and low cost broadband maneuverable GEO satellites share important technology foundations and are evidence of the value of our vertical integration dual use multi orbit multiband assets, resources, and capabilities. We believe this is a key differentiator for us to provide resilient, and highly valuable services to our government and commercial customers across bands and orbits. Recently, the 3 major US mobile carriers, announced plans to create a joint venture around direct to device non terrestrial network services. As a reminder, there are D2D opportunities using both license satellite spectrum and supplemental satellite use of terrestrial spectrum. Each offering distinct use cases.

Terrestrial spectrum used via space towers can extend coverage into places where no terrestrial coverage exists. Satellite spectrum can do that and can also be used via space towers as overlays to perfect service gaps in places where there already is coverage through terrestrial towers or access points. The Equitus business model is organized to support a full service business where ViaSat could compete to deliver standard interoperable direct to device non terrestrial network services using licensed satellite L- or S-band spectrum. Or a JV for the individual global network operators can simply contract for shared space tower infrastructure to support those mobile network operators already own terrestrial spectrum in locations where that is appropriate.

Think of Equitus as a unique player offering unbundled space infrastructure, ground infrastructure, and or shared network operations as well as being a platform for satellite operators such as BioSat or Space 42 or other global or regional satellite operators to offer direct to device services using their own licensed spectrum. The US mobile network operator joint venture for D2D NTN is an example of an application that we see as good growth opportunity for Viasat as both a service provider and as the initial Equitus technology provider in supporting mobile network operators in applying satellite to best augment their terrestrial networks. Another area driving innovation and growth in satellite technology is the potential for space data centers.

While launch is certainly a key enabling technology, there are several other areas that overlap key enabling satellite communications technologies. Such as solar power generation, thermal dissipation, radiation hardening or tolerance for advanced digital computing, space to ground and space to space broadband communications including both RF and optical, and orchestration and coordination of congested orbital spectrum and spatial resources. We believe we have state of the art expertise and technology in a number of these areas and have a number of avenues available for research and partnerships. On our target list of debt growth opportunities, taking advantage of our multi-orbit, dual-use vertically integrated technology base.

We have several of these significant DAT opportunities pending and we will update our fiscal year 27 outlook as those opportunities mature over the first half of this fiscal year. So in summary, our performance over fiscal year 26 illustrates our ability to translate strategy into attractive financial results with cash flow and net leverage improvements key indicators, and to balance near term execution with long term strategic positioning and also the resilience and commitment of our team to meet the challenges associated with cutting edge space technology. We are highly focused on a critical few strategic initiatives to ensure we can participate in rapidly evolving markets, technologies and business models while maintaining top tier competitive positions.

We have optionality in our longer term plans building on reduced capital intensity and improving return on invested capital. With key levers available to realize shareholder value. So with that, I will turn it over to Gary for more information on our fourth quarter financial results and our outlook for fiscal 27.

Garrett L. Chase: Thank you, Mark. And more importantly, thank you to the ViaSat team for the hard work you put into making fiscal 26 a success. We are going to need your continued dedication to ensure fiscal 27 is also a success. Our financial journey breaks into the 3 pillars you have heard me talk about: building our franchises, generating cash and reducing our leverage. Using this lens, I will start with a discussion of 4Q results, I will then recap fiscal 26, then we will move on to the outlook for the current year.

All my statements that follow in this section will reference the fourth quarter of fiscal 2026 compared to the prior year period, the fourth quarter of fiscal year 2025. Awards were about $1.3 billion up 9%, led by communication services with maritime government satcom and aviation, the drivers of the growth in the quarter. Backlog was a record at approximately $4.1 billion up 15% with double digit growth in both communication services and DAP. Revenue was $1.2 billion up approximately 2%, reflecting 12% growth in DAP, partially offset by a 2% decline in Communication Services.

Net income was $59 million an improvement of $305 million principally due to a gain from the sale of our equity investment in Navarino lower G and A expense mainly from last year's impairment charge, and lower interest expense. Adjusted EBITDA was $370 million down 1%, primarily reflecting incremental R and D related to growth initiatives and higher than expected impact from the government shutdown. Capital expenditures rose to $298 million up 20% as we invested in the completion of our ViaSat-3 system. Importantly, we generated $24 million of positive free cash flow in the quarter despite the CapEx noted above, which was the highest CapEx quarter of the year.

In March, we completed the divestiture of our interest in Navarino. Navarino's results previously flowed through the equity and income line item on our income statement and into the adjusted EBITDA we report. We received gross proceeds from the sale of $203 million in the quarter. Our net debt relative to trailing adjusted EBITDA sits at 3.1x, improved sequentially and substantially versus the prior year period. Now let's turn to some segment highlights. In Communication Services, awards of $877 million increased 13% driven by strength in maritime, government satcom and aviation. Revenue was $810 million down 2%. Growth in aviation and government satcom was more than offset by a decline in residential fixed broadband.

Aviation revenue grew 11%, ending with 4.45 thousand commercial aircraft in service. a 10% increase year over year combined with higher average revenue per aircraft. With units flowing in and out of our aircraft unit backlog each quarter, on a net basis, this quarter's new aircraft awards were positive. We had healthy number of installations. At quarter end, the net of these factors left our commercial aircraft unit backlog at 1 thousand. We expect these units to be put in service with our IFC systems under existing customer agreements. Our government SATCOM revenue grew 5%. Reflecting good growth with U. S. And international governments. Government awards and backlog were up 18% year-over-year.

We drove revenue out of IDIQ contracts in place. We did not quite hit our objective of returning maritime revenue to growth. Revenue declined 1% as vessels in service were down. We ended the quarter with about 1.35 thousand NexusWave vessels in service, 1.5 thousand more in backlog. Demand for NexusWave remains strong, and we have more work to do to accelerate installation. I will talk more about the outlook in a few minutes. Fixed services and other revenue was down 24% as U.S. Fixed broadband subs continued to decline. We ended the quarter with 130 thousand subscribers and 113 average revenue per user.

Communication Services adjusted EBITDA was 287 million down 6%, primarily driven by the decline in fixed services and other, in combination with higher investments in R and D, including multi orbit aviation terminals. Let me turn now to Defense and Advanced Technologies performance during the quarter. Our DAT segment awards of $403 million increased 2% driven by growth in InfoSec and CyberDefense. Award growth can vary quarter to quarter. And we continue to see a very strong growth environment for our DAT business. DAT revenue was $361 million up 12%, driven by strong growth in InfoSec and Cyber and Space and Mission Systems. Infosec and Cyber product revenues were up 24%, driven by growth in our high assurance encryption products.

Space and Mission Systems revenues were up 16% led by growth in restricted payloads. Tactical networking revenues were up 4% year-over-year. Adjusted EBITDA was $83 million, up 20% driven by revenue growth and positive operating leverage partially offset by incremental R and D investments. Let me now make a few observations about our performance across the year. All my statements in this section will reference full year fiscal 26 as compared to full year fiscal 2025. For fiscal 26, we delivered revenue of $4.6 billion a GAAP net loss of $34 million and adjusted EBITDA of 1.55 billion Cash flow from operations was $1.6 billion or $1.2 billion excluding the lump sum payment from Legato.

With CapEx of just under $1 billion resulting in free cash flow of $597 million or 177 million excluding the lump sum payment last quarter. We achieved our financial guidance for the year, but for Viasat fiscal 26 was about more than making the numbers. We needed to position ourselves for future growth. We did not get as far as we initially hoped in some areas, but made solid progress in a number of We did not quite turn the corner on maritime revenue as we hoped we might. We came close, but now believe it will take until later in fiscal 2027 see that inflection point sustain. More impactful we did not see stabilization in our fixed broadband business.

But we made great progress on getting our satellites launched and successfully advancing towards service entry readiness. Aviation and government SATCOM had another strong year, while our DAT team delivered an excellent year of revenue growth and also landed critical awards that underpin continued growth in the years ahead. From a cash flow point of view, our teams delivered in a big way. Not only did we succeed in not burning cash, we generated almost $180 million with positive free cash flow in each of the last 5 quarters. We also delivered on the third pillar of reducing leverage.

Cash generation, when combined with inflows from Ligado and the sale of Navarino, allowed us to pay down $743 million in debt while growing our available cash balance, bringing net debt to $4.8 billion and our net leverage ratio down to 3.1x. We have made remarkable progress on our goal of less than 3x leverage, and I want to specifically thank the ViaSat team for delivering on that mission and reducing our financial risk so profoundly. Now let's turn to the outlook for fiscal 2027. We expect revenue to grow mid single digits with communication services growth of low single digits and DAT growth in the mid-teens.

We expect our adjusted EBITDA to be flat to up slightly and back loaded within the year. 2 things of note, our declining impact from the intellectual property settlement of a few years ago in our advanced technologies and other business, and the removal of Navarino EBITDA following the recent sale. In combination, these items are headwinds to fiscal 27 EBITDA with impact of about 2 percentage points versus fiscal 26. Let me add some additional segment color starting with communication services. Within aviation, we expect revenue growth as ARPA expands with more of our customer base migrating to full, fast, free offerings. As Mark said, however, we expect the rate of that growth to moderate.

We expect maritime vessels to decline modestly, but expect significant growth in the NexusWave installed base that offers customers more value and drives higher ARPAs. We expect stabilization of our fixed broadband business to occur as ViaSat-3 enters service, but expect continued declines until that time. We expect another year of growth within Government SATCOM. Given the secular growth in defense and our position in key markets combined with our technology leadership, we are looking for very good growth across DAT. We expect another year of strong revenue growth from encryption, and accelerated growth from space and mission systems and tactical networking.

The teams delivered some big wins in fiscal 2020, which has driven backlog up 23% year-over-year with even more wins very recently As Mark highlighted, just last week, we were selected as 1 of 2 IDIQ awardees by the US Space Force Space Systems Command to deliver space vehicles and support of the Protected Technical Satellite Global or PTSG program. This is a very exciting program and the win is indicative of our ability to compete for and earn the business of our customers in the most important high growth markets.

We expect fiscal 27 reported CapEx of $950 million to $1 billion with a modest increase in our cash CapEx from $760 million in fiscal 2026 to about $850 million The balance will be in capitalized interest, which will decline more than $200 million in fiscal 2026 to 125 to a 150 in fiscal 27. Please note the reduction in capitalized interest will be part of a migration of cash interest out of CapEx and into operating cash flow. This change does not affect cash flow, but it is a headwind to our cash from operations versus the prior year. Our CapEx excluding the capitalized interest noted above for fiscal 2027 breaks down as follows when compared to fiscal 2026.

Maintenance is flat at about $400 million ViaSat-3 is down $150 million to about $50 million Success based is expected to increase from $50 million to $150 million. And about $225 million to $250 million is for growth CapEx with an emphasis on future satellites other than ViaSat-3 as well as the DAT segment and government satcom. Inmarsat CapEx is expected to be $325 million and is embedded within the consolidated numbers I have just guided to. The year over year changes are driven by an approximate $100 million reduction in ViaSat-3 spend offset by higher success based spend, that comes primarily from Maritime and NexusWave along with higher growth spend in DAT.

We have decisively turned the corner on free cash flow and expect another year of similar free cash flow of about $180 million In terms of leverage, while we made great progress on our goals, have more work ahead of us. The delevering we have achieved this year has meaningfully improved our credit profile. We have seen a strong response in the credit markets to that improvement. And we are evaluating the possibility beginning to reshape our capital structure.

We made a lot of progress in fiscal 2026, which turned the corner on free cash flow, brought leverage down meaningfully and expect that we will soon bring a lot of ViaSat-3 capacity and capabilities to market will help us deliver for our customers in key growth markets. As we will soon transition a lot more capital from unproductive to productive, we are working on driving our returns on capital higher. Returns on capital have always been at the heart of our financial journey that you keep hearing about. Franchise and earnings growth drive the numerator of that equation or returns higher Free cash flow and asset sales reduce invested capital and improve the denominator.

We know we have a lot of hard work in front of us to get our earnings onto a higher growth trajectory. We achieved a lot in fiscal 2026, and we will continue to build on that foundation fiscal 27. We are excited for the opportunities ahead and focused on doing right by our customers. The ViaSat team is up to the challenge, and we thank you for your continued support as we work to make fiscal 27 an even better year. With that, I would like to hand the call back to Mark.

Mark D. Dankberg: Thanks, Gary. So, operator, I think now we would be happy to take some time with some questions.

Operator: Thank you. We will now begin the question and answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please standby while we compile the Q and A roster. Our first question comes from Edison Yu from Deutsche Bank. Your line is now open. Please go ahead.

Analyst (Edison Yu): Hi, good afternoon. Thank you for taking our questions. I wanted to ask first on Equitus. Can you remind us how do we think about the value capture you are looking to provide, and what are you really seeking from some of the partner discussions you are having? And an example would be, are you looking for someone to provide the satellite bus? Are you looking simply for customers? Just trying to get an idea of what the role of all the various parties here are.

Mark D. Dankberg: Okay. So first of all, the basic idea on Equitus is shared infrastructure which is really carried over from the terrestrial mobile networks. Environment where you know, originally, for terrestrial operators, they each had their own tower networks, but they were all doing the same thing. Single tower could support spectrum from multiple operators that reduced costs and it really did not affect the operator's ability to differentiate since they were using the same network.

So the fundamental idea of Equitus is to share network infrastructure and then to think of it as Viasat and Space 42, each as mobile satellite services operators rather than each having their own satellites each of which only lights up relatively small amount of spectrum, we can have common satellites that light up both of our spectrums, and then we can each perform our deliver our services with a lower cost basis, makes it less capital intensive good for investors lower costs we can pass on to our customers, good for customers too. So that is the basic idea.

The other thing that is interesting about it is given that what we are partnering on is a low Earth orbit or LEO version of it. Remember, the satellites are you know, roughly think of it as roughly evenly distributed around the world. So 1 of the opportunities to further improve cost efficiency and cost savings would be to invite other partners who may be regional operator. Viasat is global, Space42 is not quite global, but it covers a lot of the world. But there are also a number of regional players where if they had their own LEO system, only a small portion of the satellites would be over that. That region.

So if they share ours, it just reinforces the cost savings that we can achieve otherwise And the other opportunity is to coordinate spectrum in a way that allows more spectrum to be brought into use. So those are the fundamental reasons to create an entity like Equitus which is think that is part of what the name is intended to imply is that it is an unbiased shared common infrastructure similar to what you would see in the in the terrestrial business. So that so the 1 set of partners think of it as the multisided market.

1 set of partners that were talking to are other regional operators They could have terrestrial spectrum or they could have satellite spectrum. That would benefit from sharing in that shared infrastructure. Because they have other parts of the value chain themselves. So that is 1 set of partners that we are looking for. We also are looking to make sure that the infrastructure that we are building, think of the space infrastructure, is as cost effective as can be. So Viasat is really providing the lead network payload technology. Most of all, you know, all of the networking being forming those things And we are we are open to partners for other parts of the infrastructure value chain.

That could include launch, buses, those are probably 2 of the primary ones. It also could include potential low cost manufacturers or manufacturers who are associated with given geographic regions and would be preferred by certain by their regional spectrum holders or service providers. Those are the Those are the flavors. We are also We also think that Equitus as a standalone company is going to be a good investment. It should have really good opportunities for growth as we add partners and the market for these for these services grow due to things like autonomous vehicles, whether land, sea, or air, direct to device, as well as the traditional mobile satellite services that we each provide now.

Does that help?

Analyst (Edison Yu): Yeah, just 1 follow-up. I appreciate all the color I believe in the shareholder letter, you did mention that you are aiming to deploy services in 2029. So I guess for the bus and for the launch, when do you start needing to actually need to nail those items down, like selecting a bus provider, getting a launch, getting and the launch benefits because you know, the guys out there are pretty full. So when do those decisions, those kind of big decisions on those 2 things need to be made by?

Mark D. Dankberg: They are being made now. And I think what, as Space42 is recently disclosed and we support that is there should be follow on follow on our investor conference that we will have that will just focus on Equitus. So that we can answer these more detailed questions. But we are we are just waiting for to finalize all of the associated basic agreements before we do that. Before we disclose those details. But we do have, but obviously, I think your point is, yes, if we are going be in service in 29, we need to have those things in the works now, and we are aware of that. We will give more detail.

As soon as those agreements are concluded.

Operator: Our next question comes from Brent Penter with Raymond James. Your line is now open. Please go ahead.

Analyst (Brent Penter): Hey, good afternoon, everyone. Thanks for taking the questions. A lot of detail in the letter and opening remarks You talked, about how you stand to benefit from vertical integration and DAT's role as a technology provider, including having a role in Equitus. Can you update us on where the strategic review of the DAT business stands?

Mark D. Dankberg: And how those benefits could be maintained should you decide to go down the path of a split Okay. Yes. I mean, I think first of all, we have had lots of good input and evaluation about the potential for a spin off. I think that the let's say that core you know, core element of that is that the hit that there is a good growth opportunity in defense and these advanced technologies The real issue is, is it an appreciating asset? it is an appreciating asset and it is going to grow, it is going to have value, either within the company or without. There may be a little bit of it.

Certainly could be a little bit of a difference or some difference based on whether a standalone equity or part of a larger company. But the core issue is it a is, is it an appreciating asset?? And right now, we are in an environment where dual use is really important from a commercial and military perspective. But so is the element of both having the technology and the services component that goes with it. And it is interesting that both teams, that 1 on PTSG, do have the ability to both operate as well as develop the technology.

And what we see, if you look at what the long term goals are for PTSG, it would be a substantially larger fleet of much smaller agile satellites. And so there is certainly this element of both the dual use and the vertical integration between technology and services And it is a big potential franchise. I mean, that is a multibillion dollar opportunity. So at least as long as we can see that we are going to be better positioned in this element of space and mission systems by keeping it within the company, then I think we will do that for some period of time.

But it needs so think of it as spin off as more of a 1 way door while we have it and it is growing. It still gives us optionality. Okay.

Analyst (Brent Penter): Okay. Thanks, Mark. And then another kind of strategic question. The letter in your opening remarks talk about how spectrum holders like ViaSat and Space 42 will maintain their spectrum licenses and obligations in Equitus. We have seen some very high valuations for Spectrum recently. So I just wanna make sure if the opportunity arises for some higher shareholder value use of your spectrum, what kind of flexibility does Equities give you, and how would you approach those opportunities?

Mark D. Dankberg: Okay. From the BioSat perspective, the core issue is the value from developing the spectrum or bringing the spectrum to market greater than or equal to the value of transacting the spectrum? So, in order for us to have, you know, to have a good sense of what the alternative value is, What we are looking for is a vehicle to bring it to market. And that Equitus represents that. it is and we think it is very capital efficient because Equitus does not solely depend on us bringing it to market. it is basically going to serve multiple different spectrum holders I think that makes it attractive as well.

And it also makes it attractive to us as a cost way to be able to bring it to market The other thing is because the spectrum resides with us, you know, we have the opportunity to think of it as it does not have to be binary. We do not have to sell all of it. Nor do we have to bring all of it to market. We can look at either different geographies can look at different market segments, and make sure that we are getting the best value for our shareholders through some think of it as some combination of transacting and developing which could be all of either 1, but does not have to be.

And I guess the other point I would make is it is a very dynamic market. And things are playing out. But right now, it seems and it and we can see this both from looking at transactions in the market and looking at what the demands are that we can be really well positioned to develop it. So as long we see that we can continue down that path and still have optionality.

Operator: Our next question comes from Sebastiano Petti with JPMorgan.

Analyst (Sebastiano Petti): Your line is now open. Please go ahead. Hi, thank you very much for taking the question. Maybe going back to Equitus real quick, following up on Edison's question. So Mark, is there anything you can perhaps share about the capital structure or the funding mechanism? And what Viasat may, you know, help us to think about the contribution perhaps or the investment that Viasat might make above and beyond spectrum because that is kind of a little bit of a debate out there in the market. As we think about the value unlocked from Equitus.

Are you bringing the spectrum to market Are you bringing the spectrum to the JV and some of the expertise from a technology perspective, but should we also consider perhaps yeah, contribution from a, you know, capital perspective as well coming from AdviseAd balance sheet? And then the thing is, maybe shifting gears to Aviation for a second, you talked about the growth slowing because of competition. Any help in terms of is that fully on the commercial aviation side? What are you also seeing on the BA side? And Gary, I think in your prepared remarks, talked about the backlog is going to be installed from existing commercial agreements.

Us think about, you know, what is the posture of current RFPs in the market now and, you know, your expert expectation for jump balls, I guess, from here? Thank you.

Mark D. Dankberg: Okay. Good. Let's cover both. Yeah. We will cover both of those. First, on the Equitās side, we will discuss the cap structure more in detail when we conclude the agreements and we think that Equitus will be you know, ultimately, be financed through some combination of equity debt. We will talk about that what our plans are, what we think the overall infrastructure, you know, sort of the range of budget will be when we conclude the agreement. And that should not be that far. Far away. The other thing I would like to just clarify is not going to be contributing spectrum to Equitus. We will We will we can play our spectrum through Equitus.

We will play some of our spectrum through our existing and expanding GEO fleet as well. So think of it, Equitās, but really Equitās' value proposition is to investors, including us, you know, to the extent we participate in the cap structure is its value proposition is that it is lowest cost way for anybody that wants to play spectrum through space. It should be the lowest cost way for them to do that. And there is an opportunity to grow the initial constellation substantially to meet the demand as it materializes in these mobile satellite services and D2D markets. So we will we will give more clarity on that when we do the follow-up discussion.

On the aviation side, think of it as there are several factors at play. First on commercial aviation. What we are seeing is more and more of the airlines that do have in flight connectivity are opting for some form of free model or third party paid model which greatly increases the take rate right, or user penetration And so that tends to lift the average revenue per plane On the other hand, what we are seeing is with increased penetration, and increased penetration and increased usage on a per-passenger basis, takes a lot more bandwidth to play. So I think that, you know, getting the ViaSat-3's in service certainly makes us way more way more competitive. On that front.

The other thing that we are seeing is that in flight connectivity is a really popular feature among passengers. It influences passenger preference for airlines. So the number of planes that are being outfitted is growing relatively rapidly. So those are the 3 factors. I think that what we what we are anticipating is that just what we said that we will see net good growth but probably at a growth rate that was lower than it had been going into this year. Partly through more planes and there will be some we will find out what the market price is. Through competition through this combination of increased penetration, increased per capita use. Those are the factors.

Garrett L. Chase: So Sebastian, I think you also had a question on backlog. But before we get to it, just to clarify on equity, We are obviously still in an active discussion. We do not wanna be negotiating that in public. What we have said is you know, we also want to avoid reading too much into snippets when, you know, as Mark described, when we are when we are ready, we will provide a full picture that will give you a good sense of it. What we have said in the interim is that the impacts will be consistent with know, the financial journey that we keep talking about. So you know, that part we can say now.

You, I think, had a question on that blog. I do not know.

Mark D. Dankberg: I was going to just talk about the general aviation part of it. On the general aviation part, I think that what we are expecting is overall the opportunity is while the high end segments of the general aviation market are pretty well penetrated. That would be certainly global, like global long haul large jets. I think that we will see greater penetration among lower tier jets But again, it is going to be a more competitive market than it has been. We think we still think there is growth opportunity. But there is just gonna be more competitors involved. I think those are the main dynamics there.

Operator: Our next question comes from Franz P. Kleyboldt with New Street Research. Please go ahead.

Analyst: Yes. Thank you very much. Yes. Good afternoon. Yes, Mark. So thank you. Another question if possible, please, on Equitus. Can you give us an update on your thinking on how much of your existing L band spectrum you actually think you can use through Equitus for D2D services without kind of affecting your existing operating business?

Mark D. Dankberg: So that is to be determined. There are a couple of factors that are involved. 1 is with you know, when we augment our geo satellites with lower earth orbit satellites, we will be able to achieve much higher power flux densities on the ground. These higher power levels will let us get much more bandwidth through than we can now So we could deliver the same services with using only a fraction of the bandwidth we currently have. What we are expecting is that in some cases, people the market will grow as a result of the ability to deliver higher speeds and more bandwidth for unit price.

And so we will just have to see how that plays out. In the market. But from our perspective, these mobile satellite services, a, it is it is part of our public's interest obligation, so we are certainly gonna prioritize them, and it is a good use of ours. Of our spectrum and our Good it is a good return for shareholders. And customers, so we are likely to prioritize that However, the total bandwidth comp consumption in the D2D market could be could be very, very large. And so we see that as a way to bring all of our bandwidth into play.

The other factors, I am sure you are probably aware of, is depending on the final 3GPP specifications and the spectrum chunks that the that the mobile devices support will end up with you know, as an example right now people are looking at spectrum in contiguous 5 by 5 megabits chunks. So that may turn out to be a way that we segregate the spectrum. We are the amount that goes into spectrum fragments that are consistent with the with the device specifications goes towards D2D, and but all the rest of the spectrum certainly can be used for the mobile satellite services. that is another way for us to allocate it.

But ultimately, it will be driven by market demand Got it. And actually, we are following up on that point and continue on Spectrum. I would love to just hear your thoughts on the announced announcement yesterday out of the EC with regards to the S band. Do you, would you like to kind of reapply for those spectrum rights beyond 2027? I think you are now gonna be limited to 10 megahertz in the S-band. Would you bid for the maximum you can get there? Or do you think there is now actually kind of increased scarcity in the L-band?

So maybe it does not actually make sense to re apply in the S-band and you can maximize more value through the larger contiguous channel you have got in the L-band. So right now, you know, 1 of the things that we think is a strength for us is you know, through the Inmarsat acquisition, we have S band in Europe for what is called the European Aviation Network. 1 of the good things is that brought that to market. Right? That what we have actually followed through, built the infrastructure, operate the service, with what the application was, it is on. it is it is on hundreds of airplanes now.

It is a good fit for the short haul market in Europe with smaller with a lot of smaller planes. Compared to some of the higher frequency bands The main thing that we are seeing now is that network would benefit from being modernized, that is being able to support the same things that we described are going on in aviation in general. More passengers per plane, more bandwidth per passenger. And so that is really good application where the Equitus you know, the Equitās constellation could modernize that. So we absolutely will be applying to extend it. I think the just to be clear, the currently, the spectrum is divided into 2 holders. Each with 15 by 15.

They described holders having 10 by 10 or 5 by 5, some combination of those chunks. So we will apply. I think we because we are operating the service now with European partners, I think we have a good chance of being extended. As, you know, for I think I think the guidelines suggested an increment of another 7 years. I think that certainly there is going to be a public benefit component to their decision. I think we are going to be a good candidate from that perspective.

Operator: Our next question comes from Justin Lang with Morgan Stanley. Please go ahead.

Analyst (Justin Lang): Yes. Hi. Thanks for taking my questions. Just 1 on DAT. I think you called out a few potentially significant opportunities that could, mature in the first half of your fiscal year. Can you just talk a little bit about what those opportunities are and what we should watch for? And then I was just to clarify, was the suggestion earlier that orbital data centers could represent 1 of those opportunity areas, or is that really longer term? Thanks.

Mark D. Dankberg: Yeah. Okay. So the DAT the debt opportunities we that we have are really relatively big opportunities across the board in the 3 main areas that we report. That would be the cryptographic security issue area, space emission systems, and tactical data networks. We are seeing opportunities across each of those. Tactical data networks, a lot of it is international opportunities as well as opportunities to apply those ground networks to autonomous drones and autonomous vehicles. Those are 2 of the good opportunities there.

1 of the things that we pointed out in the past is that there is kind of an accelerated program in the US government to upgrade its cryptographic infrastructure communications encryption infrastructure, The big issue there is whether or not we can beat the schedule and we think we are doing well at that. Clearly there is demand in that area. And then the third area is Space and Mission Systems, and the big opportunities we are seeing there are dual use applications of the commercial systems that we have and are adding to our fleet, and then also the government specific programs that we are seeing in the in areas where we compete well.

Like for instance, PTSG is a really good opportunity. Then finally, the other area that we do put in that as well would be new technology development or technology sales that can cover commercial or scientific missions. And so 1 of the programs we have talked about in the past that still is seems to be a really good opportunity for us is the Moonlight program, which is the lunar relay program. Certainly, interest in the moon is definitely increasing both in The US and in Europe. And then another 1 would be commercial satellite programs that would use a new generation technology. That includes at L and S band as well as at Ka-band. it is a target.

Describe it as a target rich environment for us across the board of those areas.

Operator: Our next question comes from Mike Crawford with B.

Analyst (Michael Crawford): Riley Securities. Please go ahead. Thank you. I would like to turn back to some of the technologies and areas of expertise that you say you have that can help enable data centers? I mean, solar power, thermal, radiation hardening. Obviously, with your, with your ability to do the beamforming and reuse the spectrum, you are good on the last 2 orchestration and broadband comms. But I am not aware that you have, like, solar power IP. Like, for instance, something that could help enable getting a 200 kilowatt satellite for only a million dollars. This is what some people think is required for computing in space. Can you maybe flush out some more of these capabilities you have?

Mark D. Dankberg: Okay. Good. Yeah. And then, yes. And just to cap off the last question because I did not address it, we are not going to be building space data centers ourselves. The real opportunity for us is on these overlap technologies. And so pretty sure that ViaSat-3 at 25 kW of end of life that is end of life power generation that I think is the largest commercial satellite ever. And the big and it is actually so far at the beginning of life, well, in excess of that specification. Some of this issue about what the peak power will be is gonna depend on beginning of life versus end of life and how long the life.

Is, but that is that is a big solar structure and you know, the there is different parts to it. 1 part is yeah, just having a large structure. Another part is building space vehicles that you can stabilize and still maneuver when you have these very large structures attached to them. So that has implications not just for the solar generation itself, but for any certainly for any other deployables on the spacecraft and the overall structural approach to the spacecraft So we do have good experience there. We basically did virtually all of the thermal dissipation issues on that satellite and that is probably, that again is 1 of the most challenging aspects of it.

So the opportunities for us are really to work with partners who are probably more interested in operating the data centers but are willing are interested and willing to develop technology that we can then deploy into space to prove these things on communication satellites. that is a big opportunity for us. So we are seeing opportunities from both government and commercial organizations that are interested in that. 1 of the good points on the put in for working with Space42 or their parent organization is G42, which is an AI. Company. So there is there is real interest among in that community for some of these enabling technologies that we will be able to advance.

Operator: This concludes the question and answer portion.

Mark D. Dankberg: I will now turn the call back to Mark Dankberg for closing remarks. Okay. So I know that we covered a lot. Thank you, everybody, for your attention. And stay tuned for follow-up as we described as soon as we can once we get all the Equitus agreements wrapped up, which we expect to be relatively near term. Then we will follow through on that. we will have a follow-on conversation just focused on Equitās. Thanks again for joining.

Operator: This concludes today's call. Thank you for attending. You may now disconnect. Please stand by. Your program is about to begin. My name is Jericho, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to the Viasat's Fourth Quarter and Fiscal Year 26 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I would now like to turn the call over to Ms. Lisa Curran, chief enterprise and strategy officer. Miss Curran, you may begin the conference.

Lisa Curran: Thank you, Jericho. We will present certain non GAAP financial measures on today's call. Information required by the SEC relating to these non GAAP financial measures is available in our Q4 fiscal year 26 shareholder letter on the Investor Relations section of our website. During the presentation, we will describe certain of the more significant factors that impacted year over year performance. We will also make forward looking statements within the meaning of the federal securities laws including statements regarding events or developments that we expect or anticipate will, or may occur in the future.

These forward looking statements are subject to a number of risks and uncertainties, and actual results might differ materially from any forward looking statements that we make today. Information regarding these factors that may cause actual results to differ materially from these forward looking statements is available in our SEC filings and annual report on Form 10 ks. These forward looking statements speak only as of the date they are made, and we do not assume any obligation to update any forward looking statements. With that, I will turn it over to Mark Dankberg, Chairman and CEO.

Mark D. Dankberg: Good afternoon, and thanks for joining us today. I am Mark Dankberg, CEO and Chairman of ISAT. With me, along with Lisa, we have Gary Chase, our Chief Financial Officer. As always, we encourage reading the shareholder letter and referencing the slides we posted on our website earlier this afternoon for more details. I will start with 3 areas upfront. Then Gary will review our fiscal year 2026 and fourth quarter results and a preliminary outlook for fiscal year 2027. Then we will take questions. I will cover an update on our strategic perspective, including the cooperation agreement with Carronade Capital Management and updates on ViaSat-3 flights 2 and 3.

Our top level financial year 2026 results and our near term objectives and operational and strategic initiatives. First, I would like to welcome Shekhar Ayer, and Jenny Yoon to our Board of Directors. Shekhar is a seasoned technology executive with deep operating experience at scale across enterprise software, cloud, networking, and communications infrastructure. Significant public company experience, including business strategy, and M&A. His board experience includes seeing Altair through its $10+ billion sale to Siemens. Ginny brings strong financial governance, and capital allocation experience to the board.

Advising on and structuring billions of dollars in public debt issuances and working extensively with executive teams on strategic transactions and risk management including as a member of Innosat's board through the completion of its sale to SES. Both Shekhar and Jenny have been appointed to our Board's strategic review committee. Earlier this month, we also announced a cooperation agreement with Carronade, We have appreciated the constructive dialogue with Carenade over the past year and are pleased with this agreement. Which we believe is in the best interest of ViaSat and its shareholders. On the ViaSat-3 front, subsequent to quarter end, we successfully completed all deployments on flight 2, including the reflectors and boom.

Service entry is pending authorization from the FCC. Also subsequent to quarter end, ViaSat-3 launched successfully on April 29. Since then, radiator and solar array deployments have been successfully completed. And orbit raising is underway. Flight 3 is expected to cover the Asia Pacific region arrive on station in about a month, and have service entry expected in August or September of this calendar year. Our ongoing fleet expansion support key growth initiatives in aviation, maritime, fixed services, and government SATCOM businesses. It also introduces important new capabilities including new forms of resilience for our government and commercial customers.

We believe that the ViaSat-3 satellite are the most advanced commercial satellites in the world in terms of adaptive beam forming for cost efficiencies, user performance improvements, and resilience to interference. We also believe they set new commercial standards for solar power generation and thermal dissipation. Both those capabilities are among the foundational technology challenges for developing economical data center space. Flicking to fiscal year 26 results, those financial results were largely consistent with our expectations in plans entering the year despite headwinds from the U. S. Government shutdown during the back half of the fiscal year. Gary will go through the financial results in greater detail.

So switching to near term operational and strategic initiatives, as I shared last quarter, we have 3 key near term focus areas to drive growth in fiscal 27 and beyond. First, our ongoing fleet expansion is expected to roughly triple bandwidth inventory. An increasing adaptive beam forming flexibility is an additional boost to the fleet's effective capacity. Offering higher speeds on both forward and return links. We will also expand our fleet wide multi orbit capabilities in maritime. By augmenting our existing LEO and GEO resources. We are making steady progress on our ERA Ka band multi orbit terminal for in flight communications which has already entered the line fifth certification process for all Boeing commercial airliners.

Calix is also progressing with the launch of its first Pathfinder high speed LEO satellites scheduled this year and initial global service plan for late next year. While the market for broadband satellite services is very competitive, TONSIL growing rapidly, and we believe we have a good opportunity to grow with it. Our second key area is developing and deploying shared, multi-tenant, multi-orbit L- and S-band shared infrastructure delivering next generation mobile satellite services. Including for global aero and maritime safety as well as next generation air, ground, and maritime vehicle autonomy along with mobile direct-to-device opportunities with a focus on lowering capital intensity.

While we are aiming for services in 2029, we are targeting significant revenue from our role as the technology provider for Equitās. The space infrastructure entity we are forming along with Space42. And third, we also intend to sustain the rapid growth rate in our DAT segment. For both defense and commercial markets building on our dual use advanced technology. That segment is the first place that new technology developments we are doing for Equitus, would be recognized The Equitus Initiative for Next Generation L and S band space and ground infrastructure is anticipated to be an important contributor for broadband services. Mobile L and S band services, and DAT.

We continue to work closely with Space 42 and other potential partners as co-founders of the new shared entity, that is intended to substantially improve capital productivity for L and S band satellite mobility services. Equitus infrastructure is intended to enable 3GPP standards for interoperable non terrestrial network services through both satellite specific and terrestrial frequencies. The shared tower infrastructure model can enable greater spectrum efficiency as well as reduce infrastructure costs for all participating parties. As with terrestrial shared tower infrastructure, the spectrum rights and obligations remain with the participating licensees. Which are initially Viasat and space 42 but with potential to grow through additional partners. Viasat is expected to participate as the initial technology prime contractor for Equitus.

Space based L and S band beam forming technology is at the heart of the NTN direct to device opportunity and our technology solution both benefits from and advances our long history of advanced L band and K band broadband space based phase array technology. The foundational Equitās satellite and phased array technologies are also designed to support multi orbit broadband such as Ka band services, at both GEO and LEO orbits. The near term market for commercial and government broadband satellites services remains both highly competitive and rapidly growing. ViaSat has recently seen double digit revenue and earnings growth in aviation, offset by declines in fixed residential services and maritime.

In fiscal 27, we anticipate financial results in fixed and residential services will improve but increased competition will reduce our growth rate in aviation services. However, we are seeing accelerated growth opportunities in our DAT segment. That in combination with our communication services segment creates opportunities for accelerating company wide revenue growth ahead. The space sector is poised to benefit from a number of exciting new defense, commercial, and scientific initiatives and we believe ViaSat is well positioned to participate in a number of those. We believe our relatively unique position as both a leading space technology innovator and a leading satellite services company helps differentiate us from competitors that are, in most cases, not vertically integrated across those markets.

In the near term, many of those opportunities will first be captured in our DAT segment, I would like to point out a few opportunities that generally involve innovations in business models as well as technology. 1 key opportunity was just announced last week when subsequent to the end of Q4, we received a follow on award to our initial phase of the PTSG or protected Tactical Satellite Global contract for a first delivery of a small low cost maneuverable dual band, geosynchronous orbit US government tactical satellite.

We believe that PTSG is an excellent opportunity to grow our participation in government tactical space system technologies and services and an opportunity to use technology innovation to substantially increase the effectiveness and resilience of U.S. Tac-Broadband satellite communications while helping address potential threats to other orbits and systems. PTSG is closely related to the existing WGS or wideband global system. US tactical satellite network, through which The US has a significant range of international partnerships and coalition interoperability relationships. So there is also a meaningful international opportunity. There are also substantial follow on opportunities in related dual use broadband space technology and services. Our low cost L and S band multi orbit proliferated LEO and low cost broadband maneuverable.

GEO satellites share important technology foundations and are evidence of the value of our vertical integration dual use multi orbit multiband assets, resources, and capabilities. We believe this is a key differentiator for us to provide resilient, and highly valuable services to our government and commercial customers across bands and orbits. Recently, the 3 major US mobile carriers, announced plans to create a joint venture around direct to device non terrestrial network services. As a reminder, there are D2D opportunities using both license satellite spectrum and supplemental satellite use of terrestrial spectrum each offering distinct use cases. Terrestrial spectrum used to be a space towers can extend coverage into places where no terrestrial coverage exists.

Satellite spectrum can do that and can also be used via space towers as overlays to perfect service gaps in places where there already is coverage through terrestrial towers or access points. The Equitus business model is organized to support a full service business where ViaSat could compete to deliver standard interoperable direct to device non terrestrial network services using licensed satellite L- or S-band spectrum. Or a JV for the individual global network operators can simply contract for shared space tower infrastructure to support those mobile network operators already own terrestrial spectrum in locations where that is appropriate.

Think of Equitus as a unique player offering unbundled space infrastructure, ground infrastructure, and or shared network operations as well as being a platform for satellite operators such as BioSat or Space 42 or other global or regional satellite operators to offer direct to device services using their own high subspectrum. The US mobile network operator joint venture for D2D NTN is an example of an application that we see as a good growth opportunity for Viasat as both a service provider and as the initial Equitus technology provider in supporting mobile network operators in applying satellite to best augment their terrestrial networks. Another area driving innovation and growth in satellite technology is the potential for space data centers.

While launch is certainly a key enabling technology, there are several other areas that overlap key enabling satellite communications technologies. Such as solar power generation, thermal dissipation, radiation hardening, tolerance for advanced digital computing, space to ground and space to space broadband communications including both RF and optical, and orchestration and coordination of congested orbital and spatial resources. We believe we have state of the art expertise and technology in a number of these areas and have a number of avenues available for research and partnerships. On our target list of DAT growth opportunities, taking advantage of our multi orbit dual use, vertically integrated technology base.

We have several of these significant DAT opportunities pending and we will update our fiscal year 27 outlook as those opportunities mature over the first half of this fiscal year. So in summary, our performance over fiscal year 26 illustrates our ability to translate strategy into attractive financial results with cash flow and net leverage improvements as key indicators, and to balance near term execution with long term strategic positioning and also the resilience and commitment of our team to meet the challenges associated with cutting edge space technology. We are highly focused on a critical few strategic initiatives to ensure we can participate in rapidly evolving markets, technologies and business models while maintaining top tier competitive positions.

We have optionality in our longer term plans building on reduced capital intensity and improving return on invested capital. With key levers available to realize shareholder value So with that, I will turn it over to Gary for more information on our fourth quarter financial results and our outlook for fiscal 27.

Garrett L. Chase: Thank you, Mark. And more importantly, thank you to the ViaSat team for the hard work you put into making fiscal 26 a success. We are going to need your continued dedication to ensure fiscal 27 is also a success. Our financial journey breaks into the 3 pillars you have heard me talk about building our franchises, generating cash and reducing our leverage. Using this lens, I will start with a discussion of 4Q results, I will then recap fiscal 26, then we will move on to the outlook for the current year.

All my statements that follow in this section will reference the fourth quarter of fiscal 2026 compared to the prior year period, the fourth quarter of fiscal year 25. Awards were about $1.3 billion up 9%, led by communication services with maritime government satcom and aviation, the drivers of the growth in the quarter. Backlog was a record at approximately $4.1 billion up 15% with double digit growth in both communication services and DAP. Revenue was $1.2 billion up approximately 2%, reflecting 12% growth in DAP, partially offset by a 2% decline in Communication Services.

Net income was $59 million an improvement of $305 million principally due to a gain from the sale of our equity investment in Navarino lower G and A expense mainly from last year's impairment charge, and lower interest expense. Adjusted EBITDA was $370 million down 1% or primarily reflecting incremental R and D related to growth initiatives and higher than expected impact from the government shutdown. Capital expenditures rose to $298 million up 20% as we invested in the completion of our ViaSat-3 system. Importantly, we generated $24 million of positive free cash flow in the quarter despite the CapEx noted above, which was the highest CapEx quarter of the year.

In March, we completed the divestiture of our interest in Navarino. Navarino's results previously flowed through the equity and income line item on our end, statement and into the adjusted EBITDA we report. We received gross proceeds from the sale of $203 million in the quarter. Our net debt relative to trailing adjusted EBITDA sits 3.1 times improved sequentially and substantially versus the prior year period. Now let's turn to some segment highlights. In Communication Services, awards of $877 million increased 13% driven by strength in maritime, government satcom and aviation. Revenue was $810 million down 2%. Growth in aviation and government satcom was more than offset by a decline in residential fixed broadband.

We drove revenue out of IDIQ contracts in place. We did not quite hit our objective of returning maritime revenue to growth. Revenue declined 1% as vessels in service were down. We ended the quarter with about 1.35 thousand NexusWave vessels in service, 1.5 thousand more in backlog. Demand for NexusWave remains strong, and we have more work to do to accelerate installation. I will talk more about the outlook in a few minutes. Fixed services and other revenue was down 24% as U.S.S fixed broadband saw continued to decline. We ended the quarter with 130 thousand subscribers and 113 average revenue per user.

Communication Services adjusted EBITDA was 287 million down 6%, primarily driven by the decline in fixed services and other in combination with higher investments in R and D, including multi orbit aviation terminals. Let me turn now to Defense and Advanced Technologies performance during the quarter. Our DAT segment awards of $403 million increased 2%, driven by growth in InfoSec and CyberDefense. Award growth can vary quarter to quarter. And we continue to see a very strong growth environment for our DAT business. DAT revenue was $361 million up 12%, driven by strong growth in InfoSec and Cyber and Space and Mission Systems. Infosec and Cyber product revenues were up 24% driven by growth in our high assurance encryption products.

Space and Mission Systems revenues were up 16% led by growth in restricted payloads. Tactical networking revenues were up 4% year-over-year. Adjusted EBITDA was $83 million, up 20% driven by revenue growth and positive operating leverage, partially offset by incremental R and D investments. Let me now make a few observations about our performance across the year. All my statements in this section will reference full year fiscal 26 as compared to full year fiscal 25. For fiscal 26, we delivered revenue of $4.6 billion a GAAP net loss of $34 million and adjusted EBITDA of $1.55 billion. Cash flow from operations was $1.6 billion or 1.2 billion excluding the lump sum payment from Legato.

With CapEx of just under $1 billion resulting in free cash flow of $597 million or $177 million excluding the lump sum payment last quarter. We achieved our financial guidance for the year, but for Viasat fiscal 26 was about more than making the numbers. We needed to position ourselves for future growth. We did not get as far as we initially hoped in some areas, but made solid progress in a number of others. We did not quite turn the corner on maritime revenue as we hoped we might. We came close, but now believe it will take until later in fiscal 2027 to see that inflection point sustain.

More impactful we did not see stabilization in our fixed broadband business. But we made great progress on getting our satellites launched and successfully advancing towards service entry readiness. Aviation and government SATCOM had another strong year while our dev team delivered an excellent year of revenue growth and also landed critical awards that underpin continued growth in the years ahead. From a cash flow point of view, our teams delivered in a big way. Not only did we succeed in not burning cash we generated almost $180 million with positive free cash flow in each of the last 5 quarters. We also delivered on the third pillar of reducing leverage.

Cash generation, when combined with inflows from Legato and the sale of Navarino, allowed us to pay down $743 million in debt while growing our available cash balance, bringing net debt to $4.8 billion and our net leverage ratio down to 3.1x. We have made remarkable progress on our goal of less than 3x leverage, and I wanna specifically thank the ViaSat team for delivering on that mission and reducing our financial risk so profoundly. Now let's turn to the outlook for fiscal 2027. We expect revenue to grow mid single digits with Communication Services growth of low single digits and DAT growth in the mid-teens.

We expect our adjusted EBITDA to be flat to up slightly and back loaded within the year. 2 things of note, our declining impact from the NLX intellectual property settlement of a few years ago in our advanced technologies and other business and the removal of Navarino EBITDA following the recent sale. In combination, these items are headwinds to fiscal 27 EBITDA with impact of about 2 percentage points versus fiscal 2026. Let me add some additional segment color starting with communication services. Within aviation, we expect revenue growth as ARPA expands with more of our customer base migrating a full fast free offerings. As Mark said, however, we expect the rate of that growth to moderate.

We expect maritime vessels to decline modestly, but expect significant growth in the NexusWave installed base that offers customers more value and drives higher ARPAs. Expect stabilization of our fixed broadband business to occur as ViaSat-3 enters service, but expect continued declines until that time. We expect another year of growth within government SATCOM. Given the secular growth in defense and our position in key markets combined with our technology leadership, we are looking for very good growth across DAT. We expect another year of strong revenue growth from encryption, and accelerated growth from space and mission systems and tactical networking.

The teams delivered some big wins in fiscal 2020, which has driven backlog up 23% year-over-year with even more wins very recently. As Mark highlighted, just last week, we were selected as 1 of 2 IDIQ awardees by the US Space Force Space Systems Command to deliver space vehicles in support of the Protected Tactical Satellite Global or PTSG program. This is a very exciting program, and the wind's indicative of our ability to compete for and earn the business of our customers in the most important high growth markets.

We expect fiscal 27 reported CapEx of $950 million to $1 billion with a modest increase in our cash CapEx from $760 million in fiscal 2026 to about $850 million The balance will be in capitalized interest, which will decline from more than $200 million in fiscal 2026 to 125 to 150 in fiscal 27. Please note the reduction in capitalized interest will be part of a migration of cash interest out of CapEx and into operating cash flow. This change does not affect cash flow, but it is a headwind to our cash from operations versus the prior year. Our CapEx excluding the capitalized interest noted above for fiscal 2027 breaks down as follows when compared to fiscal 2026.

Maintenance is flat at about $400 million ViaSat-3 is down $150 million to about $50 million Success based is expected to increase from $50 million 150 million and about $225 million to $250 million is for growth CapEx. With an emphasis on future satellites other than ViaSat-3 as well as the DAT segment and government satcom. In marked SAT CapEx is expected to be $325 million and is embedded within the consolidated numbers I have just guided to. The year over year changes are driven by an approximate $100 million reduction in ViaSat-3 spend, offset by higher success base spend that comes primarily from Maritime and NexusWave along with higher growth spend in DAT.

We have decisively turned the corner on free cash flow in expect another year of similar free cash flow or about $180 million In terms of leverage, while we made great progress on our goals, we have more work ahead of us. The delevering we have achieved this year has meaningfully improved our credit profile. We have seen a strong response in the credit markets to that improvement. And we are evaluating the possibility beginning to reshape our capital structure.

We made a lot of progress in fiscal 2026, which turned the corner on free cash flow, brought leverage down meaningfully and expect that we will soon bring a lot of ViaSat-3 capacity and capabilities to market that will help us deliver for our customers in key growth markets. As we will soon transition a lot more capital from unproductive to productive, we are working on driving our returns on capital higher. Returns on capital have always been at the heart of our financial journey that you keep hearing about. Franchise and earnings growth drive the numerator of that equation or returns, higher. Free cash flow and asset sales reduce invested capital and improve the denominator.

We know we have a lot of hard work in front of us to get our earnings onto a higher growth trajectory. We achieved a lot in fiscal 2026, and we will continue to build on that foundation in fiscal 27. We are excited for the opportunities ahead and focused on doing right by our The ViaSat team is up to the challenge, and we thank you for your continued support as we work to make fiscal 2027 an even better year. With that, I would like to hand the call back to Mark.

Mark D. Dankberg: Thanks, Gary. So, operator, I think now we would be happy to take some time with some questions.

Mark D. Dankberg: Okay. So first of all, the basic idea on Equitus is shared infrastructure which is really carried over from the terrestrial mobile networks environment where you know, originally, for terrestrial operators, they each had their own tower networks, but they were all doing the same thing. Single tower could support spectrum from multiple operators that reduced costs and it really did not affect the operator's ability to differentiate since they were using the same network.

So the fundamental idea of Equitus is to share network infrastructure and then to think of it as Viasat and Space 42, each as mobile satellite services operators rather than each having their own satellites each of which only lights up relatively small amount of spectrum, we can have common satellites that light up both of our spectrums, and then we can each perform our you know, or deliver our services with a lower cost basis, makes it less capital intensive good for investors, lower costs we can pass on to our customers, good for customers too. So that is the basic idea.

The other thing that is interesting about it is given that what we are partnering on is a low Earth orbit or LEO version of it. Remember, the satellites are you know, roughly think of it as roughly evenly distributed around the world. So 1 of the opportunities to further improve cost efficiency and cost savings would be to invite other partners who may be regional operator. Viasat is global, Space42 is not quite global, but they cover a lot of the world. But there are also a number of regional players where they had their own LEO system only a small portion of the satellites would be over that. That region.

So if they share ours, it just reinforces the cost savings that we can achieve otherwise And the other opportunity is to coordinate spectrum in a way that allows more spectrum to be brought into use. So those are the fundamental reasons to create an entity like Equitus which is think that is part of what the name is intended to apply is that it is an unbiased shared common infrastructure similar to what you would see in the in the terrestrial business. So that so the 1 set of partners think of it as the multisided market.

1 set of partners that were talking to are other regional operators They could have terrestrial spectrum or they could have satellite spectrum. That would benefit from sharing in that shared infrastructure. Because they have other parts of the value chain themselves. So that is 1 set of partners that we are looking for. We also are looking to make sure that the infrastructure that we are building, think of the space infrastructure, is as cost effective as can be. So VSAT is really providing the lead network payload technology. Most of all, you know, all of the networking being forming those things And we are we are open to partners for other parts of the infrastructure value chain.

That could include launch, buses, those are probably 2 of the primary ones. It also could include potential low cost manufacturers or manufacturers who are associated with given geographic regions and would be preferred by certain their regional spectrum holders or service providers. Those are the flavors. We are also think that Equitus as a standalone company is going to be a good investment. It should have really good opportunities for growth as we add partners and the market for these services grow due to things like autonomous vehicles, whether land, sea, or air, direct to device, as well as the traditional mobile satellite services that we each provide now. That help?

Analyst (Edison Yu): Yeah, just 1 follow-up. I appreciate all the color. I believe in the shareholder letter, did mention that you are aiming to deploy services in 2029. So I guess for the bus and for the launch, when do you start needing to actually need to nail those items down, like selecting a bus provider, getting launch, getting and the launch benefits because you know, the guys out there are pretty full. So when do those decisions, those kind of big decisions on those things need to be made by?

Mark D. Dankberg: They are being made now. And I think what, as Phase 42 is recently disclosed, and we support that, is there should be follow on follow on our investor conference that we will have that will just focus on Equitus. So that we can answer these more detailed questions. But we are just waiting for to finalize all of the associated basic agreements before we do that. Before we disclose those details. But we do have but obviously, I think your point is, yes, if we are going to be in service in 29, we need to have those things in the works now, and we are aware of that.

We will give more detail as soon as those agreements are concluded.

Operator: Our next question comes from Brent Penter with Raymond James. Your line is now open. Please go ahead.

Analyst: Hey, good afternoon, everyone. Thanks for taking the questions. A lot of detail in the letter and opening remarks. You talked, about how you stand to benefit from vertical integration and DAT's role as a technology provider, having a role in Equitas? Can you update us on where the strategic review of the DAT business stands? And how those benefits could be maintained should you decide to go down the path of a split Okay.

Mark D. Dankberg: Yes. I mean, I think first of all, we have had lots of good input and evaluation about the potential for a spin off. I think that, you know, the let's say that for you know, core element of that is that the hit that there is a good growth opportunity in defense and these advanced technologies The real issue is, is it an appreciating asset? it is an appreciating asset and it is going to grow, it is going to have value, either within the company or without. There may be a little bit of it.

There certainly could be a little bit of a difference or some difference based on whether it is a standalone equity or part of a larger company But the core issue is it a is, is it an appreciating asset?? And right now, we are in an environment where dual use is really important from a commercial and military perspective. But so is the element of both having the technology and the services component that goes with it. And it is interesting that both teams, that 1 on PTSG, do have the ability to both operate as well as develop the technology.

And what we see, if you look at what the long term goals are for PTSG it would be a substantially larger fleet of much smaller agile satellites. And so there is certainly this element of both the dual use and the vertical integration between technology and services And it is a big potential franchise. Mean that is it is a multibillion dollar opportunity. So at least as long as we can see that we are going to be better positioned in this element of space and mission systems by you know, by keeping it within the company, then I think we will do that for some period of time.

But it needs so think of it as spin off as more of a 1 way door while we have it and it is growing, though it still gives us optionality. Okay. Thanks, Mark. And then another kind of strategic question. The letter in your opening remarks talk about how spectrum holders like ViaSat Space 42 will maintain their spectrum licenses and obligations in Equitus. We have seen some very high valuations for Spectrum recently. So I just wanna make sure if the opportunity arises for some higher shareholder value use of your spectrum, what kind of flexibility does Equities give you, and how would you approach those opportunities? Okay.

From the BioSat perspective, the core issue is the value from developing the spectrum or bringing the spectrum to market greater than or equal to the value of transacting the spectrum? So in order for us to have you know, you to have a good sense of what the alternative value is, What we are looking for is a vehicle to bring it to market. And that Equitus represents that. it is in we think it is very capital efficient because Equitus does not solely depend on us bringing to market. it is basically going to serve multiple different spectrum holders I think that makes it attractive as well.

And it also makes it attractive to us as a cost effective way to be able to bring it to market The other thing is because the spectrum resides with us, you know, we have the opportunity to think of it as it does not have to be binary. We do not have to sell all of it. Nor do we have to bring all of it to market. We can look at either different geographies, can look at different market segments, and make sure that we are getting the best value for our shareholders through some think of it as some combination of transacting and developing which could be all of either 1, but does not have to be.

And I just see other point I would make is it is a very dynamic market. And things are playing out. But right now, it seems and it and we can see this both from looking at transactions in the market and looking at what the demands are, we can be really well positioned to develop it. So as we see that we can continue down that path and still have optionality.

Operator: Our next question comes from Sebastiano Petti with JPMorgan.

Analyst (Sebastiano Petti): Your line is now open. Please go ahead. Hi, thank you very much for taking the question. Maybe going back to Equitus real quick, following up on Edison's question. So Mark, is there anything you can perhaps share about the capital structure or funding mechanism and what Viasat may, you know, help us to think about the contribution perhaps or the investment that Viasat might make above and beyond spectrum because that is kind of a little bit of a debate out there in the market as we think about the value unlocked from Equitus. Are you bringing the spectrum to market Are you bringing the spectrum to the JV and some of the expertise from a technology perspective?

But should we also consider perhaps yeah, contribution from a, you know, capital perspective as well coming from the Viasat balance sheet. And then the thing, maybe shifting gears to Aviation for a second, you talked about the growth slowing because of competition. Any help in terms of is that fully on the commercial aviation side? What are you also seeing on the BA side? And Gary, I think in your prepared remarks, talked about the backlog is going to be installed from existing commercial agreements. Think about, you know, what is the posture of current RFPs in the market now and, you your expectation for jump balls, I guess, from here? Thank you.

Mark D. Dankberg: Okay. Good. Let's cover both. Yeah. We will cover both of those. First, on the Equitās side, we will discuss the cap structure more in detail when we conclude the agreements and we think that Equitus will be, ultimately, will be financed through some combination of equity debt. We will talk about that what our plans are, what we think overall infrastructure you know, sort of the range of budget will be. When we conclude the agreements. And that should not be that far. Far away. The other thing I would like to just clarify is not going to be contributing spectrum to Equitus.

We will We can play our spectrum through Equitus We will play some of our spectrum through our existing and expanding geo fleet. As well. So think of it, Equitās, but really Equitās' value proposition is to investors, including us, you know, to the extent we participate in the cap structure is its value proposition is that it is lowest cost way for anybody that wants to play spectrum through space. It should be the lowest cost way for them to do that. And there is an opportunity to grow the initial constellation substantially to meet the demand as it materializes in these mobile satellite services and D2D markets.

So we will we will give more clarity on that when we do the follow-up discussion. On the aviation side, think of it as there is several factors at play. First on commercial aviation. What we are seeing is more and more of the airlines that do have in flight connectivity are opting for some form of free model or third party paid model which greatly increases the take rate right, or user penetration And so that tends to lift the average revenue per plane On the other hand, what we are seeing is with increased penetration, and increased penetration and increased usage on approved. Passenger basis takes a lot more bandwidth to play.

So I think that, you know, getting the ViaSat-3's in service certainly makes us way more competitive. On that front. The other thing that we are seeing is that in flight connectivity is a really popular feature among passengers. It influences pass passenger preference for airlines. So the number of planes that are being outfitted is growing relatively rapidly. So those are the 3 factors. I think that what we what we are anticipating is that just what we said that we will see NET good growth but probably at a growth rate that was lower than it had been going into this year.

Partly through more planes and there will be some we will find out what the market price is. Through competition through this combination of increased penetration, increased per capita use. Those are the factors.

Garrett L. Chase: So Sebastian, I think you also had a question on backlog. But before we get to it, just to clarify on equity, we are obviously still in an active discussion. We do not want to be negotiating that in public. What we have said is you know, we also want to avoid reading too much into snippets when, you know, as Mark described, when we are when we are ready, we will provide a full picture that will give you a good sense of it. What we have said in the interim is that the impacts will be consistent with you know, the financial journey that we keep talking about. So that part we can say now.

You, I think, had a question on Oh, blog. I do not know.

Mark D. Dankberg: I was going to just talk about the general aviation part of it. On the general aviation part, I think that what we are expecting is overall the opportunity is while the high end segments of the general aviation market are pretty well penetrated. That would be certainly global, like global long haul large jets. I think that we will see greater penetration among lower tier jets But, again, it is gonna be it is gonna be a more competitive market than it has been. We think we still think there is growth opportunity. But there is just gonna be more competitors involved. I think those are the main dynamics there.

Operator: Our next question comes from Franz P. Kleyboldt with New Street Research. Please go ahead.

Analyst: Yes. Thank you very much. Yes. Good afternoon. Yes, Mark. So thank you Another question possible, please, on Equitus. Can you give us an update on your thinking on how much of your existing L band spectrum you actually think you can use through Equitus for D2D services without kind of affecting your existing operating business?

Mark D. Dankberg: that is to be determined. There are a couple of factors that are involved. 1 is with you know, when we augment our geo satellites with lower orbit satellites, we will be able to achieve much higher power flux densities on the ground. These higher power levels will let us get much more bandwidth through than we can now So we could deliver the same services with using only a fraction of the bandwidth we currently have.

What we are expecting is that in some cases, people the market will grow as a result of the ability to deliver higher speeds and more bandwidth for unit price and so we will just have to see how that plays out in the market. But from our perspective, these mobile satellite services, a, it is it is part of our public's interest obligation, so we are certainly gonna prioritize them. And it is a good use of ours. Of our spectrum and our assets. Good it is a good return for shareholders. And customers, so we are likely to prioritize that However, the total bandwidth comp consumption in the D2D market could be could be very, very large.

And so we see that as a way to bring all of our bandwidth into play. The other factors, which you are probably aware of, is depending on the final 3GPP specifications and the spectrum chunks that the mobile devices support will end up with you know, as an example, right now people are looking at spectrum in contiguous 5 by 5 Mhz chunks. So that may turn out to be a way that we segregate the spectrum.

We are the amount that goes into spectrum fragments that are consistent with the with device specifications goes towards D2D, and but the other rest of the spectrum certainly can be used for the mobile satellite services. that is another way for us to allocate it. But ultimately, it will be driven by market demand Got it. And actually, we are following up on that point and continue on spectrum, I would love to just hear your thoughts on the announcement yesterday out of the EC with regards to the S band.

Do you, would you like to kind of reapply for those spectrum rights beyond 20 I think you are now gonna be limited to 10 megahertz in the s band. You know, would you bid for the maximum you can get there? Or do you think there is now actually kind of increased scarcity in the L band So maybe it does not actually make sense to reapply in the s band, and you can max maximize more value through the larger contiguous channel you have got in the L-band.

So right now, you know, 1 of the things that we think is a strength for us is you know, through the Inmarsat acquisition, we have S band in Europe for what is called the European Aviation Network. 1 of the good things is that brought that to market. Right? That what we have actually followed through, built the infrastructure, operate the service, with what the application was, it is on. it is it is on hundreds of airplanes now. It is a good fit for the short haul market in Europe with smaller with a lot of smaller planes. Compared to some of the higher frequency bands.

The main thing that we are seeing now is that network would benefit from being modernized, that is being able to support the same things that we described are going on in aviation in general. More passengers per plane, more bandwidth per passenger. And so that is really good application where the Equitus you know, the ex the Equitus constellation could modernize that. So we absolutely will be applying to extend it. I think the just to be clear, the currently, the spectrum is divided into 2 holders. Each with 15 by 15. They described holders having 10 by 10 or 5 by 5, some combination of those chunks. So we will apply.

I think we because we are operating the service now with European partners, I think we have a good chance of being extended. As, you know, for I think the I think the guidelines suggested an increment of another 7 years I think that certainly there is going to be a public benefit component to their decision. I think we are going to be a good candidate from that perspective.

Operator: Our next question comes from Justin Lang with Morgan Stanley. Please go ahead.

Analyst (Justin Lang): Yes. Hi. Thanks for taking my questions. Just 1 on debt, I think you called out a few potentially significant opportunities that could, mature in the first half of your fiscal year. Can you just talk a little bit about what those opportunities are and what we should watch for? And then I was just to clarify, was the suggestion earlier that, orbital data centers could represent 1 of those opportunity areas, or is that really longer term? Thanks.

Mark D. Dankberg: Yeah. Okay. So the DAT the debt opportunities we that we have are really relatively big opportunities across the board in the 3 main areas that we report. That would be the cryptographics security area, space emission systems and tactical data networks. We are seeing opportunities across each of those. Tactical data networks, a lot of it is international opportunities as well as opportunities to apply those ground networks to autonomous drones and autonomous vehicles. Those are 2 of the good opportunities there.

1 of the things that we pointed out in the past is that there is kind of an accelerated program in the US government to upgrade its cryptographic infrastructure communications encryption infrastructure, The big issue there is whether or not we can meet the schedule and we think we are doing well at that. Clearly there is demand in that area. And then the third area is Space and Mission Systems, and the big opportunities we are seeing there are dual use applications of the commercial systems that we have and are adding to our fleet and then also the government specific programs that we are seeing in the in areas where we compete well.

Like for instance, PTSG is a really good opportunity And then finally, the other area that we do put in that as well would be new technology development or technology sales that can cover commercial or scientific missions. And so 1 of the programs we have talked about in the past that still is seems to be a really good opportunity for us is Moonlight program which is the relay program, Certainly, interest in the moon is definitely increasing both in The US and in Europe.

And then another 1 would be the commercial satellite programs that would use a new generation of generation of and that includes at L and S band as well as at KA band. it is a target. I describe it as a target rich environment for us across the board of those areas.

Operator: Our next question comes from Mike Crawford with B.

Analyst (Michael Crawford): Riley Securities. Please go ahead. Thank you. I would like to turn back to some of the technologies and areas of expertise that you say you have that can help enable data centers? I mean, solar power, thermal, radiation hardening. Obviously, with your, with your ability to do the beamforming and reuse the spectrum, you are you are you are good on the last 2 orchestration and broadband comms. But I am not aware that you have, like, solar power IP. Like, for instance, something that could help enable getting a 200 kilowatt satellite for only a million dollars. This is what some people think is required for computing space.

And just maybe flush out some more of these capabilities you have?

Mark D. Dankberg: Okay. Good. Yeah. And then, yes. And just to cap off the last question because I did not address it, we are not going to be building SACE data sets ourselves. The real opportunity for us is on these overlap technologies. And so I am pretty sure that ViaSat-3 at 25 kW of end of life that is end of life power generation that I think is the largest commercial satellite ever. And the big and it is actually so far at the beginning of life, well, in excess of that specification.

Some of this issue about what the peak power will be is gonna depend on beginning of life or end of life and how long the life is, but that is that is a big solar structure. And you know, the there is different parts to it. 1 part is just having a large structure. Another part is building space vehicles that you can stabilize and still maneuver when you have these very large structures attached to them. So that has implications not just for the solar generation itself but for any certainly for any other deployables on the spacecraft and the overall structural approach to the spacecraft So we do have good experience there.

We basically did virtually all of the thermal dissipation issues on that satellite and that is probably, that again is 1 of the most challenging aspects of it. So the opportunities for us are really to work with partners who are probably more interested in operating the data centers but are willing are interested and willing to develop technology that we can then deploy into space to prove these things on communication satellites. that is a big opportunity for us. So we are seeing opportunities from both government and commercial organizations that are interested in that.

And 1 of the good points on the put in for working with Space 42 where their parent organization is G42, which is an AI. Company. So there is there is real interest among in that community for some of these enabling technologies that we will be able to advance.

Operator: This concludes the question and portion.

Mark D. Dankberg: I will now turn the call back to Mark Dankberg for closing remarks. Okay. So I know that we covered a lot, everybody for your attention. And stay tuned for follow-up as we described as soon as we can once we get all the Equitus agreements wrapped up, which we expect to be relatively near term. And we will follow through on that. We will have a follow on not a conversation just focused on equ Equitus. Thanks again for joining.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.