Viasat’s crystal ball was a bit cloudy on Tuesday, as the company predicted annual revenue below Wall Street’s expectations due to a slowdown in its satellite services business, causing its shares to nosedive more than 11% after hours.
Anticipating a dip in U.S. fixed broadband revenue, Viasat blamed fiercer competition from wireless carriers like T-Mobile US (NASDAQ:TMUS) with their budget-friendly plans. To stay afloat, Viasat is pivoting from fixed broadband to mobility services, focusing on satellite-based connectivity solutions for governments.
Last year, Viasat acquired British rival Inmarsat for $7.3 billion to diversify its satellite and land-based communications. However, economic uncertainties and stiff competition from Starlink have put pressure on the company. Viasat President Guru Gowrappan mentioned that governments prefer multiple partners to avoid over-reliance, appreciating options in their connectivity solutions.
In the government systems segment, Viasat competes with the likes of Intelsat, L3Harris Technologies (NYSE:LHX), and EchoStar. Despite the challenges, this segment’s revenue jumped 77% to $385.8 million, surpassing analyst expectations of $340 million.
For fiscal 2025, Viasat expects revenue to remain flat, contrasting sharply with analysts’ nearly 7% growth forecast to $4.57 billion. Fourth-quarter revenue was $1.15 billion, just above the anticipated $1.09 billion. However, the company posted a loss of 80 cents per share, a stark contrast to the previous year’s $15.56 per share profit, with a net loss from continuing operations rising to $90 million due to higher interest expenses from the Inmarsat deal.