Viasat (NASDAQ: VSAT) beat on the bottom line in fiscal Q2. Non-GAAP diluted loss per share came in at $0.32, against the consensus forecast of -$0.42. The GAAP figure was uglier: net loss widened to $0.93 per share from $0.45 a year ago, dragged by higher tax provisions, R&D spend, and stock comp.
Revenue of $1.18 billion, up 3% year-over-year, missed the $1.20 billion estimate by a hair. Small miss. The number that actually moves the stock is free cash flow.
Viasat generated $78 million in FCF this quarter, up 14% YoY. Over the trailing twelve months, that figure hits $198 million excluding one-offs. Management lifted full-year FCF guidance to "more than $225 million," implying a sharp second-half pickup. The driver: capex is falling. Full-year capital expenditure now sits between $850 million and $900 million, down from prior ranges. The company stated plainly that the VS-3 construction phase is finished.
The Defense & Advanced Technologies segment carried the quarter. Revenue surged 20% to $365 million. Segment EBITDA jumped 57% to $76 million. Backlog hit a record $1.4 billion, also up 20%. The breadth was striking: information security and cyber defense products reached $121 million, a record. Tactical networking products climbed 31% to $97 million. Space and mission systems added 4%. Management raised full-year DAT revenue growth guidance to mid-to-high teens, up from prior expectations.
Communication Services told a different story. Revenue slipped 3% to $815 million. Segment EBITDA fell 13% to $294 million. Fixed services and other revenue collapsed 23%. Maritime dropped 8%. Aviation services grew 8%, and government satcom rose 4%, but these couldn't plug the hole left by fixed broadband's structural decline and the Navarino equity sale. Full-year CS revenue guidance is now "flattish," down from "modest growth."
Both VS-3 Flight 2 and Flight 3 are now in service and performing to spec. The task shifts from building to filling: utilization and customer adoption become the metrics that matter. Whether the $6.6 billion debt load and years of heavy capex convert to operating leverage hinges on execution here. The Equatys joint venture with Space42, targeting direct-to-device, sits further out on the risk curve and will need more capital.
Net leverage improved to 3.2x from 3.5x, helped by the Ligado lump sum, the Navarino sale, and FCF generation. Liquidity stands at $2.9 billion, including $1.76 billion in cash. The balance sheet has stabilized. With $6.6 billion in total debt, the emphasis on deleveraging makes sense.
The FCF guide raise is the clearest signal management has sent that the transition is underway. They maintained full-year revenue growth guidance at mid-single digits but now expect Adjusted EBITDA roughly flat YoY. Margin expansion remains a future chapter. The back half of the fiscal year will show whether DAT's momentum and VS-3 monetization can outrun the fixed services drag.