VSAT - Viasat stock slumps as Q3 results hurt by weakness in Link-16 TDL business

Viasat ( NASDAQ: VSAT ) shares dropped 11% on Wednesday after the satellite communications firm reported third quarter results that was adversely impacted by weakness in its Link-16 TDL business.

Q3 revenue was slightly down Y/Y to $714M, while revenue from continuing operations increased 4% Y/Y to $651M.

Government Systems revenue from continuing operations grew 3% Y/Y driven by 10% Y/Y growth from service revenue despite ongoing certification delays and supply chain issues.

Satellite Services revenue was slightly down compared to prior year quarter, with fewer residential subscribers in the U.S.

The company incurred a net loss of $42M in the quarter, primarily due to lower adj. EBITDA and higher income tax and interest expense. Losses increased by $36M over the prior year quarter. Adj. EBITDA declined by 15% Y/Y to $139M.

Viasat ( VSAT ) generated $89M in operating cash flow during the quarter - a decrease of 44% Y/Y and 53% sequentially. Net debt also increased $220M sequentially to $2.8B.

Looking ahead, the firm expects full year FY23 adj. EBITDA from continuing to remain roughly flat Y/Y, with Q4 bearing increased ViaSat-3 ground network operating expenses in preparation for ViaSat-3 Americas service launch and some IFC terminal deliveries shifting to the right due to delays in new aircraft deliveries to our airline customers.

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