VIASAT INC

Previous wording

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements are based on current expectations, estimates, forecasts and projections about the industries in which we operate and the beliefs and assumptions of our management. We use words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” variations of such words and similar expressions to identify forward-looking statements. In addition, statements regarding projections of earnings, revenue, costs or other financial items; anticipated trends in our business or key markets; growth opportunities; the ability to successfully compete in our target markets and durability or strengthening of competitive advantages; the construction, completion, testing, launch, commencement of commercial service, expected performance and benefits of satellites and satellite payloads (including satellites planned or under construction) and the timing thereof; the expected capacity, coverage, service speeds and other features of our satellites, and the cost, economics and benefits associated therewith; anticipated subscriber growth; introduction and integration of multi-orbit capabilities; future economic conditions; the development, customer acceptance and anticipated performance of our technologies, products or services; plans, objectives and strategies for future operations; ability to drive capital efficiency and improved resource utilization; the number of additional aircraft or vessels anticipated to be put into service with our connectivity systems; expected revenue from the Ligado settlement; and other characterizations of future events or circumstances, are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ materially include: our ability to realize the anticipated benefits of any existing or future satellite; unexpected expenses related to our satellite projects; risks associated with the construction, launch and operation of satellites, including the effect of any anomaly, launch, operational or deployment failure or degradation in satellite performance; capacity constraints in our business in the lead-up to the launch of services on new satellites; increasing levels of competition in our target markets; our ability to successfully implement our business plan on our anticipated timeline or at all; our ability to successfully develop, introduce and sell new technologies, products and services; audits by the U.S. Governme…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. These statements are based on current expectations, estimates, forecasts and projections about the industries in which we operate and the beliefs and assumptions of our management. We use words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” variations of such words and similar expressions to identify forward-looking statements. In addition, statements regarding projections of earnings, revenue, costs or other financial items; anticipated trends in our business or key markets; growth opportunities; the ability to successfully compete in our target markets and durability or strengthening of competitive advantages; the construction, completion, testing, launch, commencement of commercial service, expected performance and benefits of satellites and satellite payloads (including satellites planned or under construction) and the timing thereof; the expected capacity, coverage, service speeds and other features of our satellites, and the cost, economics and benefits associated therewith; anticipated subscriber growth; introduction and integration of multi-orbit capabilities; future economic conditions; the development, customer acceptance and anticipated performance of our technologies, products or services; plans, objectives and strategies for future operations; the expected formation of Equatys in collaboration with Space42, including anticipated contributions and the timing thereof; ability to drive capital efficiency and improved resource utilization; the number of additional aircraft or vessels anticipated to be put into service with our connectivity systems; expected revenue from the Ligado settlement; and other characterizations of future events or circumstances, are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ materially include: our ability to realize the anticipated benefits of any existing or future satellite; unexpected expenses related to our satellite projects; risks associated with the construction, launch and operation of satellites, including the effect of any anomaly, launch, operational or deployment failure or degradation in satellite performance; capacity constraints in our business in the lead-up to the launch of services on new satellites; increasing levels of competition in our target markets; our ability to successfully implement our business plan on our anticipated timeline or at all;…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Aviation, which includes industry-leading in-flight connectivity (IFC) services, narrowband safety operational data services and other complementary services and applications for commercial aircraft, business jets and unmanned aircraft. As of June 30, 2026, we had our IFC systems installed and in service on approximately 4,630 commercial aircraft, of which approximately 100 were inactive at quarter end (mostly due to standard aircraft maintenance), and approximately 2,080 business jets with Ka-band communication services. We anticipate that approximately 850 additional commercial aircraft will be put into service with our IFC systems under existing customer agreements with commercial airlines. However, due to the nature of commercial airline contracts and other factors, such as increased competition and original equipment manufacturer (OEM) delays, there can be no assurance that anticipated IFC services will be activated on all such additional commercial aircraft.

Current wording

Aviation, which includes industry-leading in-flight connectivity (IFC) services, narrowband safety operational data services and other complementary services and applications for commercial aircraft, business jets and unmanned aircraft. As of September 30, 2026, we had our IFC systems installed and in service on approximately 4,590 commercial aircraft (of which approximately 100 were inactive at quarter end, mostly due to standard aircraft maintenance) and approximately 2,080 business jets with Ka-band communication services. We anticipate that approximately 660 additional commercial aircraft will be put into service with our IFC systems under existing customer agreements with commercial airlines. However, due to the nature of commercial airline contracts and other factors, such as increased competition and original equipment manufacturer (OEM) delays, there can be no assurance that anticipated IFC services will be activated on all such additional commercial aircraft.

Previous wording

Maritime, which includes high-quality, resilient satellite-based broadband and narrowband communications services around the globe to commercial shipping fleets, offshore service vessel operators and commercial fishing companies, as well as NexusWave, a fully managed multi-layer connectivity service for merchant shipping companies. As of June 30, 2026, we provided Ka-band communication services to approximately 12,900 vessels.

Current wording

Maritime, which includes high-quality, resilient satellite-based broadband and narrowband communications services around the globe to commercial shipping fleets, offshore service vessel operators and commercial fishing companies, as well as NexusWave, a fully managed multi-layer connectivity service for merchant shipping companies. As of September 30, 2026, we provided Ka-band communication services to approximately 12,600 vessels.

Previous wording

Fixed services and other, which includes high-speed, high-quality, reliable fixed broadband internet services to businesses and residential users (primarily in the United States as well as in various countries in Europe and Latin America), enterprise connectivity solutions, Internet-of-Things and other narrowband services (such as L-band managed services that enable real-time machine-to-machine position or high-value asset tracking), energy services, and prepaid internet services that provide innovative, affordable, satellite-based connectivity in communities that have little or no access to the internet. As of June 30, 2026, our U.S. fixed broadband business had approximately 115,000 subscribers with an average monthly revenue per user of $111.

Current wording

Fixed services and other, which includes high-speed, high-quality, reliable fixed broadband internet services to businesses and residential users (primarily in the United States as well as in various countries in Europe and Latin America), enterprise connectivity solutions, Internet-of-Things and other narrowband services (such as L-band managed services that enable real-time machine-to-machine position or high-value asset tracking), energy services, and prepaid internet services that provide innovative, affordable, satellite-based connectivity in communities that have little or no access to the internet. As of September 30, 2026, our U.S. fixed broadband business had approximately 100,000 subscribers with an average monthly revenue per user of $111.

Previous wording

Satellites and other property and equipment are recorded at cost or in the case of certain satellites and other property acquired, the fair value at the date of acquisition, net of accumulated depreciation. Capitalized satellite costs consist primarily of the costs of satellite construction and launch, including launch insurance and insurance during the period of in-orbit testing, the net present value of performance incentive payments expected to be payable to the satellite manufacturers (dependent on the continued satisfactory performance of the satellites), costs directly associated with the monitoring and support of satellite construction, and interest costs incurred during the period of satellite construction. We also construct earth stations, network operations systems and other assets to support our satellites, and those construction costs, including interest, are capitalized as incurred. At the time satellites are placed in commercial service, we estimate the useful life of our satellites for depreciation purposes based upon an analysis of each satellite’s performance against the original manufacturer’s orbital design life, estimated fuel levels and related consumption rates, as well as historical satellite operating trends. We periodically review the remaining estimated useful life of our satellites to determine if revisions to the estimated useful lives are necessary.

Current wording

Satellites and other property and equipment, including internally developed software, are recorded at cost or in the case of certain satellites and other property acquired, the fair value at the date of acquisition, net of accumulated depreciation. Capitalized satellite costs consist primarily of the costs of satellite construction and launch, including launch insurance and insurance during the period of in-orbit testing, the net present value of performance incentive payments expected to be payable to the satellite manufacturers (dependent on the continued satisfactory performance of the satellites), costs directly associated with the monitoring and support of satellite construction, and interest costs incurred during the period of satellite construction. We also construct earth stations, network operations systems and other assets to support our satellites, and those construction costs, including interest, are capitalized as incurred. At the time satellites are placed in commercial service, we estimate the useful life of our satellites for depreciation purposes based upon an analysis of each satellite’s performance against the original manufacturer’s orbital design life, estimated fuel levels and related consumption rates, as well as historical satellite operating trends. We periodically review the remaining estimated useful life of our satellites to determine if revisions to the estimated useful lives are necessary.

Previous wording

In accordance with the authoritative guidance for impairment or disposal of long-lived assets (ASC 360), we assess potential impairments to our long-lived assets, including property, equipment and satellites and other assets, when there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable. We recognize an impairment loss when the undiscounted cash flows expected to be generated by an asset (or group of assets) are less than the asset’s carrying value. Any required impairment loss would be measured as the amount by which the asset’s carrying value exceeds its fair value, and would be recorded as a reduction in the carrying value of the related asset and charged to results of operations. No material impairments were recorded for the three months ended June 30, 2026 and 2025.

Current wording

In accordance with the authoritative guidance for impairment or disposal of long-lived assets (ASC 360), we assess potential impairments to our long-lived assets, including property, equipment and satellites and other assets, when there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable. We recognize an impairment loss when the undiscounted cash flows expected to be generated by an asset (or group of assets) are less than the asset’s carrying value. Any required impairment loss would be measured as the amount by which the asset’s carrying value exceeds its fair value, and would be recorded as a reduction in the carrying value of the related asset and charged to results of operations. No material impairments were recorded for the three and six months ended September 30, 2026 and 2025.

Previous wording

Our total revenues decreased by $14.5 million as a result of a $20.6 million decrease in product revenues, partially offset by a $6.1 million increase in service revenues. The decrease in product revenues was primarily driven by a $22.4 million decrease in our defense and advanced technologies segment, partially offset by a $1.9 million increase in our communication services segment. The increase in service revenues was primarily driven by a $10.2 million increase in our defense and advanced technologies segment, partially offset by a $4.2 million decrease in our communication services segment.

Current wording

Our total revenues increased by $39.1 million as a result of a $40.0 million increase in product revenues, partially offset by a $0.9 million decrease in service revenues. The increase in product revenues was driven by a $50.5 million increase in our defense and advanced technologies segment, partially offset by a $10.4 million decrease in our communication services segment. The decrease in service revenues was driven by a decrease of $11.7 million in our communication services segment, partially offset by an increase of $10.8 million in our defense and advanced technologies segment.

Previous wording

The $7.8 million decrease in selling, general and administrative (SG&A) expenses was primarily driven by an $8.9 million decrease in support costs, mainly in our communication services segment. SG&A expenses consisted primarily of personnel costs and expenses for business development, marketing and sales, bid and proposal, acquisition and transaction related expenses, facilities, finance, contract administration and general management.

Current wording

The $5.2 million increase in selling, general and administrative (SG&A) expenses was primarily driven by a $5.6 million increase in support costs, mainly in our communication services segment. SG&A expenses are comprised primarily of personnel costs and expenses for business development, marketing and sales, bid and proposal, acquisition and transaction related expenses, facilities, finance, contract administration and general management.

Previous wording

The $11.3 million increase in independent research and development (IR&D) expenses was primarily a result of increased IR&D efforts supporting multi-orbit initiatives in our communication services segment.

Current wording

The $17.5 million increase in independent research and development (IR&D) expenses was primarily a result of increased IR&D efforts supporting multi-orbit initiatives in our communication services segment and IR&D efforts in space and mission systems in our defense and advanced technologies segment.

Previous wording

The $18.1 million decrease in interest expense for the three months ended June 30, 2026 compared to the prior year period was primarily a result of our decreased level of indebtedness compared to the prior year period, as the aggregate principal amount of our total outstanding indebtedness was $6.6 billion as of June 30, 2026 compared to $6.7 billion as of June 30, 2025 (see Note 6 — Senior Notes and Other Long-Term Debt to our condensed consolidated financial statements for further information), in addition to the increase in capitalized interest.

Current wording

The $8.5 million increase in interest expense for the three months ended September 30, 2026 compared to the prior year period was primarily a result of a decrease in capitalized interest, as we ceased capitalizing the interest expense relating to the debt incurred for the construction of ViaSat-3 F2 and F3 and the related gateway and networking equipment once the satellites entered commercial service, offset by our decreased level of indebtedness compared to the prior year period, as the aggregate principal amount of our total outstanding indebtedness was $6.6 billion as of September 30, 2026 compared to $6.7 billion as of September 30, 2025. See Note 6 — Senior Notes and Other Long-Term Debt to our condensed consolidated financial statements for further information.

Previous wording

For the three months ended June 30, 2026, we recorded an income tax provision of $23.1 million, resulting in an effective tax rate of negative 116%. The effective tax rate for the period differed from the U.S. statutory rate primarily due to a U.S. valuation allowance, foreign tax rate differences and foreign tax audit adjustments.

Current wording

For the three months ended September 30, 2026, we recorded an income tax provision of $40.8 million, resulting in an effective tax rate of negative 51%. The effective tax rate for the period differed from the U.S. statutory rate primarily due to a U.S. valuation allowance, foreign tax rate differences and foreign tax audit adjustments (totaling approximately $29.0 million).

Previous wording

For the three months ended June 30, 2025, we recorded an income tax provision of $6.6 million, resulting in an effective tax rate of negative 15%. The effective tax rate for the period differed from the U.S. statutory rate primarily due to a U.S. valuation allowance and foreign tax rate differences.

Current wording

For the three months ended September 30, 2025, we recorded an income tax provision of $10.9 million, resulting in an effective tax rate of negative 24%. The effective tax rate for the period differed from the U.S. statutory rate primarily due to a U.S. valuation allowance and foreign tax rate differences.

Previous wording

Our communication services segment revenues decreased by $2.3 million due to a $4.2 million decrease in segment service revenues, partially offset by a $1.9 million increase in segment product revenues. The decrease in segment service revenues was primarily due to a $47.3 million decrease in fixed services and other and an $8.3 million decrease in maritime, mostly offset by a $31.5 million increase in aviation and a $20.0 million increase in government satcom. We continued to allocate a greater proportion of our bandwidth to our IFC business in preference to our U.S. fixed services business due to bandwidth constraints. Additionally, the IFC service revenue increase was driven primarily by the increase in the number of commercial aircraft receiving our in-flight services through our IFC systems, with our IFC systems installed and in service on approximately 4,630 commercial aircraft (of which approximately 100 were inactive mostly due to standard aircraft maintenance) as of June 30, 2026, compared to approximately 4,230 commercial aircraft (of which approximately 100 were inactive mostly due to standard aircraft maintenance) as of June 30, 2025.

Current wording

Our communication services segment revenues decreased by $22.1 million as a result of an $11.7 million decrease in segment service revenues and a $10.4 million decrease in segment product revenues. The decrease in segment service revenues was due to an expected decrease in revenues of $35.2 million from fixed services and other and an $8.9 million decrease in maritime, partially offset by a $25.1 million increase in aviation services and a $7.3 million increase in government satcom services. Through most of the quarter ended September 30, 2026, we continued to allocate a greater proportion of our bandwidth to our IFC business in preference to our U.S. fixed services business due to bandwidth constraints. Additionally, the IFC service revenues increase was driven primarily by the increase in the number of commercial aircraft receiving our in-flight services through our IFC systems, with our IFC systems installed and in service on approximately 4,590 commercial aircraft (of which approximately 100 were inactive at quarter end, mostly due to standard aircraft maintenance) as of September 30, 2026, compared to approximately 4,370 commercial aircraft (of which approximately 120 were inactive at quarter end, mostly due to standard aircraft maintenance) as of September 30, 2025.

Previous wording

Cost of revenues decreased by $17.9 million due to decreases of $15.1 million in cost of service revenues and $2.8 million in cost of product revenues. The decrease in cost of service revenues was primarily driven by improved margins, mainly in our communication services segment. The decrease in cost of product revenues was due to product revenue decline, partially offset by a change in margins, mainly in our defense and advanced technologies segment, as product revenues in this segment included a higher percentage of intellectual property licensing and royalty-based revenues in the prior year period, which had relatively low costs of product revenues.

Current wording

Cost of revenues increased by $27.1 million due to an increase of $30.9 million in cost of product revenues, partially offset by a decrease of $3.8 million in cost of service revenues. The increase in cost of product revenues correlated to product revenue growth in our defense and advanced technologies segment and by a change in margins as product revenues in this segment included a higher percentage of intellectual property licensing and royalty-based revenues in the prior year period, which had relatively low costs of product revenues. The decrease in cost of service revenues was primarily driven by improved margins, mainly in our defense and advanced technologies segment.

Previous wording

Our defense and advanced technologies segment revenues decreased by $12.2 million due to a $22.4 million decrease in segment product revenues, partially offset by a $10.2 million increase in segment service revenues. The decrease in segment product revenues was primarily driven by decreases of $21.1 million in space and mission systems, $17.5 million in advanced technologies and other and $8.2 million in information security and cyber defense, partially offset by a $24.3 million increase in tactical networking. The increase in segment service revenues was primarily driven by an increase of $5.4 million in space and mission systems.

Current wording

Our defense and advanced technologies segment revenues increased by $49.0 million due to increases of $28.0 million in segment product revenues and $21.0 million in segment service revenues. The increase in segment product revenues was driven by a $47.1 million increase in tactical networking and a $17.4 million increase in information security and cyber defense, partially offset by an $18.5 million decrease in advanced technologies and other and an $18.0 million decrease in space and mission systems. The increase in segment service revenues was primarily driven by an increase of $11.7 million in space and mission systems and a $5.5 million increase in tactical networking.

Previous wording

The firm backlog does not include contract options. As of June 30, 2026, approximately half of the firm backlog is expected to be delivered during the next 12 months, with the balance delivered thereafter. We include in our backlog only those orders for which we have accepted purchase orders, and not anticipated purchase orders and requests. In our communication services segment, our backlog includes fixed broadband service revenues under our subscriber agreements, but does not include future recurring IFC service revenues under our agreements with commercial airlines. As of June 30, 2026, our IFC systems were installed and in service on approximately 4,630 commercial aircraft, of which approximately 100 were inactive at quarter end (mostly due to standard aircraft maintenance). We anticipate that approximately 850 additional commercial aircraft will be put into service with our IFC systems under existing customer agreements with commercial airlines. Due to the nature of commercial airline contracts and other factors such as OEM delays, there can be no assurance that all anticipated purchase orders and requests will be placed or that anticipated IFC services will be activated on all such additional commercial aircraft.

Current wording

The firm backlog does not include contract options. As of September 30, 2026, approximately half of the firm backlog is expected to be delivered during the next 12 months, with the balance delivered thereafter. We include in our backlog only those orders for which we have accepted purchase orders, and not anticipated purchase orders and requests. In our communication services segment, our backlog includes fixed broadband service revenues under our subscriber agreements, but does not include future recurring IFC service revenues under our agreements with commercial airlines. As of September 30, 2026, our IFC systems were installed and in service on approximately 4,590 commercial aircraft (of which approximately 100 were inactive at quarter end, mostly due to standard aircraft maintenance). We anticipate that approximately 660 additional commercial aircraft will be put into service with our IFC systems under existing customer agreements with commercial airlines. Due to the nature of commercial airline contracts and other factors such as increased competition and OEM delays, there can be no assurance that all anticipated purchase orders and requests will be placed or that anticipated IFC services will be activated on all such additional commercial aircraft.

Previous wording

Our total new awards, which exclude future revenue under recurring consumer commitment arrangements, were approximately $1.3 billion and $1.2 billion for the three months ended June 30, 2026 and 2025, respectively.

Current wording

Our total new awards (which exclude future revenue under recurring consumer commitment arrangements) were approximately $1.1 billion and $2.4 billion for the three and six months ended September 30, 2026, respectively, compared to approximately $1.5 billion and $2.7 billion for the three and six months ended September 30, 2025, respectively.

Previous wording

We have financed our operations to date primarily with cash flows from operations, bank line of credit financing, debt financing, export credit agency financing and equity financing. At June 30, 2026, we had $1.7 billion in cash and cash equivalents, $1.3 billion in working capital, no outstanding borrowings and borrowing availability of $600.3 million under our $647.5 million revolving credit facility (the Viasat Revolving Credit Facility), and no outstanding borrowings and borrowing availability of $550.0 million under Inmarsat's $550.0 million revolving line of credit (the Inmarsat Revolving Credit Facility, and together with the Viasat Revolving Credit Facility, the Revolving Credit Facilities). At March 31, 2026, we had $1.7 billion in cash and cash equivalents, $1.8 billion in working capital, no outstanding borrowings and borrowing availability of $598.2 million under the Viasat Revolving Credit Facility, and no outstanding borrowings and borrowing availability of $550.0 million under the Inmarsat Revolving Credit Facility. We invest our cash in excess of current operating requirements in short-term, highly liquid bank money market funds primarily investing in U.S. government-backed securities and treasuries.

Current wording

We have financed our operations to date primarily with cash flows from operations, bank line of credit financing, debt financing, export credit agency financing and equity financing. At September 30, 2026, we had $1.8 billion in cash and cash equivalents, $1.2 billion in working capital, no outstanding borrowings and borrowing availability of $598.4 million under our $647.5 million revolving credit facility (the Viasat Revolving Credit Facility), and no outstanding borrowings and borrowing availability of $550.0 million under Inmarsat's $550.0 million revolving line of credit (the Inmarsat Revolving Credit Facility, and together with the Viasat Revolving Credit Facility, the Revolving Credit Facilities). At March 31, 2026, we had $1.7 billion in cash and cash equivalents, $1.8 billion in working capital, no outstanding borrowings and borrowing availability of $598.2 million under the Viasat Revolving Credit Facility, and no outstanding borrowings and borrowing availability of $550.0 million under the Inmarsat Revolving Credit Facility. We invest our cash in excess of current operating requirements in short-term, highly liquid bank money market funds primarily investing in U.S. government-backed securities and treasuries.

Previous wording

In June 2025, Inmarsat agreed to a binding term sheet with Ligado Networks (Ligado) and AST & Science, LLC to settle Inmarsat's opposition to Ligado’s planned restructuring. Under the conditions set forth in the term sheet, we expected to receive an aggregate of $568 million from Ligado in fiscal year 2026, consisting of (i) a $420 million lump sum payment which was received in October 2025, (ii) a $100 million lump sum payment that was due in March 2026 that remains outstanding pending resolution of certain matters, and (iii) a resumption of quarterly payments of approximately $16 million, which started on September 30, 2025, with an annual escalator of 3% for the life of the contract (through 2107).

Current wording

In June 2025, Inmarsat agreed to a binding term sheet with Ligado Networks (Ligado) and AST & Science, LLC to settle Inmarsat's opposition to Ligado’s planned restructuring. Under the conditions set forth in the term sheet, we expected to receive $568 million from Ligado in fiscal year 2026, consisting of (i) a $420 million lump sum payment which we received in October 2025, (ii) a $100 million lump sum payment that was due in March 2026 that remains outstanding pending resolution of certain matters, and (iii) a resumption of quarterly payments of approximately $16 million, which started on September 30, 2025, with an annual escalator of 3% for the life of the contract (through 2107).

Previous wording

We may, from time to time, seek to retire, prepay or repurchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Current wording

We may, from time to time, seek to retire, prepay or repurchase our outstanding debt, including through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Previous wording

Cash provided by operating activities for the first three months of fiscal year 2027 was $260.6 million compared to $258.5 million in the prior year period. This $2.1 million increase was driven by a $53.5 million year-over-year decrease in cash used to fund net operating assets, partially offset by our operating results (net income (loss) adjusted for depreciation, amortization and other non-cash charges) which resulted in $51.4 million of lower cash provided by operating activities year-over-year. The decrease in cash used to fund net operating assets during the first three months of fiscal year 2027 when compared to the prior year period was primarily due to the timing of payments related to our income taxes. Cash paid for income taxes, net, during the first three months of fiscal years 2027 and 2026 was $32.5 million and $34.5 million, respectively. Cash paid for interest (net of amounts capitalized) during the first three months of fiscal years 2027 and 2026 was $36.5 million and $59.3 million, respectively.

Current wording

Cash provided by operating activities for the first six months of fiscal year 2027 was $545.5 million compared to $540.7 million in the prior year period. This $4.8 million increase was driven by a $61.7 million year-over-year decrease in cash used to fund net operating assets and liabilities, partially offset by operating results (net income (loss) adjusted for depreciation, amortization and other non-cash charges), which resulted in $56.9 million of lower cash provided by operating activities year-over-year. The decrease in cash used to fund net operating assets and liabilities year-over-year was primarily due to the timing of deferred revenue recognized under certain long-term contracts in space and mission systems. Cash paid for income taxes, net, during the first six months of fiscal years 2027 and 2026 were $47.4 million and $70.1 million, respectively. Cash paid for interest (net of amounts capitalized) during the first six months of fiscal years 2027 and 2026 were $153.4 million and $177.1 million, respectively.

Previous wording

Cash used in investing activities for the first three months of fiscal year 2027 was approximately $218.9 million compared to $176.0 million in the prior year period. This $43.0 million increase in cash used in investing activities year-over-year reflected an increase of $20.9 million in cash used for capital expenditures.

Current wording

Cash used in investing activities for the first six months of fiscal year 2027 was approximately $425.6 million compared to $389.6 million in the prior year period. This $36.0 million increase reflected an increase of $13.9 million in cash used for capital expenditures.

Previous wording

Cash used in financing activities for the first three months of fiscal year 2027 was approximately $50.2 million compared to $513.8 million for the prior year period. This $463.6 million decrease in cash used in financing activities year-over-year was primarily due to the redemption of the remaining $442.6 million in principal amount of Viasat's 5.625% Senior Notes due 2025 in the prior year period.

Current wording

Cash used in financing activities for the first six months of fiscal year 2027 was approximately $104.3 million compared to $533.7 million in the prior year period. The $429.5 million decrease in cash used in financing activities year-over-year was primarily due to the redemption of the remaining $442.6 million in principal amount of Viasat's 5.625% Senior Notes due 2025 in the prior year period.

Previous wording

As of June 30, 2026, our complementary fleet of 23 in service or operational satellites spanned the Ka-, L- and S- bands, with 13 Ka-band satellites, eight L-band satellites (three of which are contingency L-band satellites that are operational but not currently in commercial service), an S-band satellite that supports the European Aviation Network to provide IFC services to commercial airlines in Europe, and an Inmarsat-6 class hybrid Ka-/L-band satellite. The second ViaSat-3 class satellite, ViaSat-3 F2, was launched into orbit in November 2025 with commercial service expected to commence in September 2026. The third ViaSat-3 class satellite, ViaSat-3 F3, was launched into orbit in April 2026, with commercial service expected to commence by late summer 2026. Furthermore, as of June 30, 2026, we had seven additional GEO satellites under development: three adaptive Ka-band GEO satellites (GX7, GX8 and GX9) and four Inmarsat-8 L-band GEO safety service satellites. Our extensive satellite fleet enables us to provide a wide array of high-quality broadband and narrowband services with near global coverage (including strong oceanic coverage) with greater redundancy and resiliency.

Current wording

As of September 30, 2026, our complementary fleet of 24 in service or operational satellites spanned the Ka-, L- and S- bands, with 14 Ka-band satellites, eight L-band satellites (three of which are contingency L-band satellites that are operational but not currently in commercial service), an S-band satellite that supports the European Aviation Network to provide IFC services to commercial airlines in Europe, and an Inmarsat-6 class hybrid Ka-/L-band satellite. In September 2026, the second ViaSat-3 class satellite, ViaSat-3 F2, completed in-orbit testing and was integrated into the Company's existing satellite fleet covering the Americas. In August 2026, the third ViaSat-3 class satellite, ViaSat-3 F3, entered service covering the Asia-Pacific region. As of September 30, 2026, we had seven additional GEO satellites under development: three adaptive Ka-band GEO satellites (GX7, GX8 and GX9) and four Inmarsat-8 L-band GEO safety service satellites. Our extensive satellite fleet enables us to provide a wide array of high-quality broadband and narrowband services with near global coverage (including strong oceanic coverage) with greater redundancy and resiliency.

Previous wording

We expect to continue to invest in IR&D as we continue our focus on leadership and innovation in satellite and space technologies, including for the development of any new generation satellite designs and next-generation satellite network solutions. The level of our investment in a given fiscal year will depend on a variety of factors, including the stage of development of our satellite projects, new market opportunities and our overall operating performance. By leveraging our own satellite fleet and its unique advantages, existing national operator partnerships, plus coverage and capacity from leading third-party satellites and constellations, our services are designed to provide customers with the essential capacity density, market access, speed, bandwidth and responsiveness they need. Importantly, we have continued to innovate advanced multi-orbit resource management techniques to reduce costs and expand geographic coverage to better serve the unique needs of each mobility and defense customer. In forming key partnerships with multiple geostationary orbit and non-geostationary orbit operators, we are well-positioned to support delivery of Viasat’s next-generation services, achieve industry-leading resource utilization, and drive capital efficiency. In parallel, we are working to ensure equitable access to finite space resources and support regulatory certainty enabling multi-orbit solutions and related infrastructure to thrive in a shared and sustainable way.

Current wording

We expect to continue to invest in IR&D as we continue our focus on leadership and innovation in satellite, space and network technologies, including for the development of any new generation satellite designs and next-generation network solutions. The level of our investment in a given fiscal year will depend on a variety of factors, including the stage of development of our satellite projects, new market opportunities and our overall operating performance. By leveraging our own satellite fleet and its unique advantages, existing national operator partnerships, plus coverage and capacity from leading third-party satellites and constellations, our services are designed to provide customers with the essential capacity density, market access, speed, bandwidth and responsiveness they need. Importantly, we have continued to innovate advanced multi-orbit resource management techniques to reduce costs and expand geographic coverage to better serve the unique needs of each mobility and defense customer. In forming key partnerships with multiple geostationary orbit and non-geostationary orbit operators, we are well-positioned to support delivery of Viasat’s next-generation services, achieve industry-leading resource utilization, and drive capital efficiency. In parallel, we are working to ensure equitable access to finite space resources and support regulatory certainty enabling multi-orbit solutions and related infrastructure to thrive in a shared and sustainable way.

Previous wording

In connection with the launch of any new satellite and the commencement of commercial service on the satellite, we expect to incur additional operating costs that negatively impact our financial results. For example, when ViaSat-2 was placed in commercial service in the fourth quarter of fiscal year 2018, this resulted in additional operating costs during the ramp-up period prior to service launch and in the fiscal year following service launch. These increased operating costs included depreciation, amortization of capitalized software development, earth station connectivity, marketing and advertising costs, logistics, customer care and various support systems. In addition, interest expense increased during fiscal year 2019 as we no longer capitalized the interest expense relating to the debt incurred for the construction of ViaSat-2 and the related gateway and networking equipment once the satellite was in commercial service. As services using the new satellite scaled, however, our revenue base for broadband services expanded and we gained operating cost efficiencies, which together yielded incremental segment earnings contributions. We anticipate that we will incur a similar cycle of increased operating costs and constrained bandwidth supply as we prepare for and launch commercial services on future satellites, including our ViaSat-3 constellation, followed by increases in revenue base and in scale. However, there can be no assurance that we will be successful in significantly increasing revenues or achieving or maintaining operating profit in our communication services segment, and any such gains may also be offset by investments in our global business. In addition, we may experience capacity constraints on our existing satellites in the lead-up to the commencement of commercial service on new satellites, such as the capacity constraints we have been experiencing since fiscal year 2023 pending our ViaSat-3 constellation entering commercial service.

Current wording

These increased operating costs include depreciation, amortization of capitalized software development, earth station connectivity, marketing and advertising costs, logistics, customer care and various support systems. In addition, interest expense will increase during the fiscal year of the satellites' launch as we ceased capitalizing the interest expense relating to the debt incurred for the construction of ViaSat-3 F2 and F3 and the related gateway and networking equipment once the satellites entered commercial service. As services using the new satellites scale, however, we anticipate that our revenue base for broadband services will expand and we will gain operating cost efficiencies, which together are expected to yield incremental segment earnings contributions. We anticipate that we will incur a similar cycle of increased operating costs and constrained bandwidth supply as we prepare for and launch commercial services on future satellites, followed by increases in revenue base and in scale. However, there can be no assurance that we will be successful in significantly increasing revenues or achieving or maintaining operating profit in our communication services segment, and any such gains may also be offset by investments in our global business. In addition, we may experience capacity constraints on our existing satellites in the lead-up to the commencement of commercial service on any new satellites, such as the capacity constraints we experienced during the fiscal years leading up to the entry into commercial service of the ViaSat-3 constellation.

Previous wording

As of June 30, 2026, the aggregate principal amount of our total outstanding indebtedness was $6.6 billion, which was comprised of (1) $600.0 million in aggregate principal amount of Viasat's 5.625% Senior Secured Notes due 2027, $400.0 million in aggregate principal amount of Viasat's 6.500% Senior Notes due 2028, $1.975 billion in aggregate principal amount of Inmarsat's 9.000% Senior Secured Notes due 2029 and $733.4 million in aggregate principal amount of Viasat's 7.500% Senior Notes due 2031, (2) $672.0 million in principal amount of outstanding borrowings under Viasat's $700.0 million senior secured term loan facility (the 2022 Term Loan Facility), $599.7 million in principal amount of outstanding borrowings under Viasat's $616.7 million senior secured term loan facility (the 2023 Term Loan Facility), $1.3 billion in aggregate principal amount of outstanding borrowings under Inmarsat's senior secured term loan facility (the Inmarsat Term Loan Facility), no outstanding borrowings under the Revolving Credit Facilities, and $176.9 million in principal amount of outstanding borrowings under Viasat's direct loan facility with the Export-Import Bank of the United States (the Ex-Im Credit Facility), and (3) $142.7 million of finance lease obligations. For information regarding our outstanding indebtedness, refer to Note 6 — Senior Notes and Other Long-Term Debt to our condensed consolidated financial statements.

Current wording

As of September 30, 2026, the aggregate principal amount of our total outstanding indebtedness was $6.6 billion, which was comprised of (1) $600.0 million in aggregate principal amount of Viasat's 5.625% Senior Secured Notes due 2027, $400.0 million in aggregate principal amount of Viasat's 6.500% Senior Notes due 2028, $1.975 billion in aggregate principal amount of Inmarsat's 9.000% Senior Secured Notes due 2029, and $733.4 million in aggregate principal amount of Viasat's 7.500% Senior Notes due 2031, (2) $670.3 million in principal amount of outstanding borrowings under Viasat's $700.0 million senior secured term loan facility (the 2022 Term Loan Facility), $598.2 million in principal amount of outstanding borrowings under Viasat's $616.7 million senior secured term loan facility (the 2023 Term Loan Facility), $1.3 billion in aggregate principal amount of outstanding borrowings under Inmarsat's senior secured term loan facility (the Inmarsat Term Loan Facility), no outstanding borrowings under the Revolving Credit Facilities, and $176.9 million in principal amount of outstanding borrowings under Viasat's direct loan facility with the Export-Import Bank of the United States (the Ex-Im Credit Facility), and (3) $138.4 million of finance lease obligations. For information regarding our outstanding indebtedness, refer to Note 6 — Senior Notes and Other Long-Term Debt to our condensed consolidated financial statements.

Previous wording

For a discussion of our capital expenditures and IR&D investments, see Part II, Item 7, “Liquidity and Capital Resources – Capital Expenditures and IR&D Investments” in our Annual Report on Form 10-K for the year ended March 31, 2026 for more information.

Current wording

For a discussion of our capital expenditures and IR&D investments, see Part II, Item 7, “Liquidity and Capital Resources — Capital Expenditures and IR&D Investments” in our Annual Report on Form 10-K for the year ended March 31, 2026.