Viasat Shareholder Letter: Q4 and Fiscal Year 2024 Financial Results

Q4

FY24

SHAREHOLDER LETTER

Fellow Shareholders,

Our Fiscal Year 2024 results reflect continued revenue and Adjusted EBITDA1 growth, above the high end of our guidance, driven by our mobility and government businesses. FY2024 was a defining year. We achieved our near-term business priorities while strengthening our capital structure and investing for profitable, sustainable growth:

1. Build operational momentum and financial performance of core businesses. For FY2024, net loss2 from continuing operations increased to $1.058 billion primarily reflecting satellite anomalies and acquisition and integration costs associated with the Inmarsat transaction. Supplemental adjusted combined ("Combined")3 revenue, excluding the non-recurring "catch-up"portion of the litigation settlement, grew 9% (reported revenue from continuing operations grew 68% YoY) and Combined Adjusted EBITDA (likewise adjusted to exclude "catch-up"portion from prior years in the litigation settlement) grew 6% YoY (reported Adjusted EBITDA from continuing operations grew 181%) YoY. We achieved these results through focused execution and continued strength in awards. Importantly, we generated solid operating cash flow despite some pressure from one-timeitems and meaningfully extended approximately $2.5 billion of our debt maturities. Nearly one year ago, we brought together two companies with complementary businesses and strategic and operational strengths. We are harnessing the best of each, bringing legacy Viasat's regional technology and business models globally to augment legacy Inmarsat's global broadband and L-bandcoverage with greater bandwidth density and productivity; developing international partnerships in fixed broadband; combining internal technology capabilities with external suppliers; using a strategic blend of direct and indirect distribution; and refreshing and evolving narrowband services.
2. Execute on synergy and strategic opportunities through methodical Inmarsat integration. As a reminder, we integrated and reorganized the company to facilitate greater efficiency using common infrastructure, operational, go-to-market,and engineering resources for delivering our services. We accelerated realization of the planned $100 million in annualized cash operating savings by addressing redundancies, and through productivity improvements. That yielded approximately $25 million of cost savings in Q4 FY2024. Capital synergies and productivity gains reduced our FY2024 capex from $1.7 billion to $1.5 billion or approximately $175 million below our outlook even while we approach deployment of five new state-of-the-artbroadband satellites, two polar coverage satellites, and three replenishment L-bandsatellites. We are building a leadership team that will support our ambitions for disciplined growth, instilling more operational and business rigor, and sharpening our focus on cash flows as we capture further capital synergies. In tandem, we are continuously refining our operating model building on the early integration work to ensure relentless focus on effective, agile delivery.
3. Sustain and improve mobility business growth while advancing inflection to positive free cash flow. We are proud of the businesses and trusted reputation we've built with our customers. Our communication services portfolio enjoys a strong right to win, high margin profile and long-termattractive growth in mobility focused markets. We are bolstering our competitive advantages by expanding coverage and capacity, steadily improving service level agreements, introducing multi-orbitoptionality, and developing a growing ecosystem of services and partners. We are well-positionedfor profitable growth through business model innovation, higher-performancesatellites supporting faster speeds and more throughput globally and especially in highest demand locations, and partnerships with other spectrum rights holders. We are making steady progress and consistent to prior guidance, we have a clear line of sight towards positive free cash flow by the end of Q1 FY2026.

We will remain focused during FY2025 on building a solid foundation for sustained growth. We see attractive opportunities in large and expanding defense and enterprise global mobility markets that are driven by the benefits of constant connectivity in an environment of steadily compounding increases in bandwidth demand. And we are strategically established, as satellite is the best alternative for mobile platforms where wired connections are simply not possible, and terrestrial wireless is out of reach, and/or inadequate. Our near-term growth plan centers around four key initiatives:

• Integrate the first ViaSat-3 satellite (VS3-F1) into our global network in the Americas - capitalizing on its dynamic beam-formingcapability in the mobile environment. We've already demonstrated 200 Mbps links to aircraft, and the satellite has the ability to focus its bandwidth only where it's needed in real time. That makes its capacity much more effective than satellites, or individual satellite beams, that see only sporadic usage. We continue to expect VS3-F1to enter revenue generating service in Q1 FY2025, i.e. mid-calendaryear 2024. Corrective actions on VS3-F2are being implemented to prevent the cause of the VS3-F1anomaly, or to enable the antennas to deploy correctly even if a similar cause were to happen. Our network integration experience with VS3-F1may also provide schedule margin for bringing VS3-F2and VS3-F3into service.

Shareholder Letter | Q4 Fiscal Year 2024

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• Efficiently augment our organic broadband global capacity with operational productivity enhancements and select 3rd-party partnerships. Viasat has a leading reputation for measurable, reliable service delivery. We achieve that by efficiently forecasting and matching customer demand with bandwidth in the right place, at the right time - even in the highest demand locations. By taking advantage of our fleet of organic and partner satellites, and the dynamic beam-formingof our newest ones, we can derive substantially more value from already on-orbitresources - yielding capex synergies. We have executed an agreement with a LEO broadband network to support hybrid multi-orbitservices that, when efficiently integrated with our network, can improve service and support low latency applications. We expect to continue integrating hybrid multi-orbitinto all of our enterprise mobility services.
• Expand value-added services delivering measurable economic value to our enterprise customers. Our customers are in capital intensive businesses, so cost efficiency and monetization opportunities are key to their business models and their own competitive advantage.
• Deliver industry-leading utilization and improve capital efficiency. We have five new state-of-the-artadaptive broadband satellites and two polar coverage satellites planned to enter service over about the next 3 years that will multiply our bandwidth resources at very competitive fulfillment costs - improving service delivery and enabling growth. With most of those costs already incurred, we are already on a path to steadily reduce annual capital investments. We are dedicated to being a dynamic competitor in global mobile broadband and narrowband communications for the long run. We will continue scaling our mobile broadband services and are adding multi-orbitcomponents to compete most effectively in our primary enterprise and defense target markets. The VS3-F1antenna deployment anomaly is motivating us to reduce the cost and schedule for future satellites via design improvements that benefit ROIC, and further drive down bandwidth fulfillment costs while also improving service quality.

We are committed to providing enhanced financial transparency into our key initiatives and portfolio of businesses. Effective with our Q4 FY2024 earnings, we will be providing more insight into our satellite roadmap, development progress, and anticipated service entry dates (see page 10). In May 2024, beginning with the first quarter of fiscal year 2025, we initiated a new segment reporting structure to better reflect our global mobility strategy and diverse end markets. Following this re-segmentation, Viasat will have two reportable segments: "Communication Services" and "Defense and Advanced Technologies". This new segment reporting will also include revenue data for each of the major business units within each segment. All historical segment financial information will be recast in our next Form 10-Q filing to conform to this new reporting structure in our financial statements and accompanying notes.

Our long-term view of this evolution of the satellite ecosystem is one of the motivations of the Viasat - Inmarsat merger. Viasat has a long history of both technology and business model innovation. Inmarsat was formed at about the same time as a United Nations (UN) initiative for global cooperation to enable maritime, and then aeronautical, safety. We recently helped create the Mobile Satellite Services Association (MSSA) to facilitate the adoption of new open technology standards and open network architectures that can bring innovations that are compatible with emerging Non-Terrestrial Networks (NTN), integrating Mobile Satellite Services into the global Mobile Network Operator (MNO) environment. We envision new open ecosystems will emerge in the broadband networks marketplace as well. We see great opportunity to increase the scale and adoption of satellite services, driven by a vision of global cooperation, technically advanced standards, open architectures, and especially innovative business models and services.

Viasat has evolved very successfully through several transformational stages over our history. As we pursue this next phase of evolution, we see a dynamically changing landscape, coupled with immense opportunity. This past year we've faced challenges and embraced a major acquisition. We've had to take some difficult measures, maintained our focus, met our near-term business objectives, and achieved results above the high end of our guidance for the fiscal year. As we meet rising expectations for service quality and certainty, we are capturing more and more real world data on how, when, and where our customers, and their customers, use satellite connectivity. We leverage that knowledge to help our customers compete and win, dynamically manage our own network ecosystem, and shape our future space system architecture and service portfolio. We are focused on serving our customers, our employees and partners, and, of course, our shareholders. We are energized by the pace of change. We know we have work to do. We are up to the challenge.

Shareholder Letter | Q4 Fiscal Year 2024

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FY2024 Year in Review

Financial Highlights

›	Established record awards of $4.2 billion driven
	by a 10-month contribution from the Inmarsat
	acquisition, an increase of 47% YoY
›	Delivered record revenue of $4.3 billion, a 68%
	increase from $2.6 billion a year ago; Combined

AWARDSBACKLOG

$ in billions$ in billions

Reported Continuing Ops

Reported Continuing Ops

	revenue, excluding the non-recurring contribution
	from the litigation settlement, increased 9% YoY to
	$4.5 billion
›	Realized $1.1 billion net loss due primarily to
	approximately $905 million of net write-down
	charges related to VS3-F1,Inmarsat-6 F2 and VS4
›	Achieved $1.4 billion in Adjusted EBITDA from
	continuing operations, a 181% YoY increase;
	Combined Adjusted EBITDA, excluding the
	non-recurring contribution from the litigation
	settlement, grew 6% YoY to $1.5 billion
›	Generated $688 million in operating cash flow;
	excluding the net impact of one-time items,
	operating cash flow was approximately $850 million

$4.2

$2.8

$2.3

FY22 FY23 FY24

REVENUE

$ in billions

Combined

Reported Continuing Ops

$3.7

$1.6 $1.7

FY22 FY23 FY24

ADJ. EBITDA1

$ in millions

Combined

Reported Continuing Ops

› Net leverage4 decreased to 3.6x from 3.9x in Q1

$3.9 $4.2

$4.6

FY2024, the first quarter post-Inmarsat acquisition,

reflecting the strategic integration actions

translating to strong Adjusted EBITDA performance

and successful collection of satellite insurance

proceeds to date of approximately $500 million

$1,302 $1,452 $1,575

Business Highlights

• Closed the transformational acquisition of Inmarsat on May 30, 2023, re-aligned our organization and accelerated $100 million in annualized cash operating savings
• Completed the VS3-F1 spacecraft handover and expect commercial in-service to commence in Q1 FY2025
• Provided Ka-band connectivity services for approximately 19,770 vessels and aircraft at the end of Q4 FY2024
• Diversified our business portfolio into the fastest growing verticals, Satellite Services generated over 76% of FY2024 segment revenue from aviation, maritime and enterprise customers

$2.4 $2.6 $4.3

FY22 FY23 FY24

OPERATING INCOME (LOSS)

$ in millions

Reported Continuing Ops

($113.1) ($156.0)

($889.8)

FY22 FY23 FY24

$476 $501 $1,410

FY22 FY23 FY24

NET INCOME (LOSS)2

$ in millions

Reported Continuing Ops

($114.7)

($217.6)

($1,058.5)

FY22 FY23 FY24

Shareholder Letter | Q4 Fiscal Year 2024

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Q4 FY2024 Financial Results

• Revenue of $1.2 billion in Q4 FY2024 increased 73% compared to revenue of $666 million in Q4 FY2023 driven by the contribution from Inmarsat. Combined revenue grew 5% YoY from strength in encryption products and aviation services and products
• Net loss from continuing operations of $90 million for Q4 FY2024 increased compared to the net loss of $62 million in the prior year period primarily due to increased interest expense associated with indebtedness incurred in connection with the Inmarsat acquisition, which was partially offset by improved operating performance and increased tax benefit
• Q4 FY2024 Adjusted EBITDA from continuing operations was $358 million, an increase of 188% YoY driven by the contribution from Inmarsat. Combined Adjusted EBITDA decreased by 3% YoY reflecting an expected decline in fixed broadband service revenue and higher

R&D expenditures in the quarter, largely offset by significant growth in demand for aviation services

• Government Systems revenue increased 77% YoY due to the addition of Inmarsat. Combined revenue was up 7% over the prior year period from growth in encryption products and tactical satcom networks
• Satellite Services revenue grew 95% YoY due to the addition of Inmarsat. Combined revenue was up 2% over the prior year period with growth from aviation services more than offsetting declines in fixed broadband services
• Awards for the quarter were $1.1 billion, an increase of 59% YoY due to the full quarter contribution from the acquisition of Inmarsat, energy products and antenna system products
• Net leverage decreased sequentially to approximately 3.6x of estimated combined LTM Adjusted EBITDA

AWARDS	AWARDSREVENUE	OPERATING INCOME (LOSS)
$ in millions	$ in millions	$ in millions
	Combined
Reported Continuing Ops	Reported Continuing Ops
Reported Continuing Ops

$803

$1,019

$1,218

$1,114

$1,091

$1,061

$1,225

$1,129

$1,150

$0.3

$699

($41.5)

($43.9)

($72.7)

$666

$780

($804.7)

Q4

Q1

Q2

Q3

Q4

Q4

Q1

Q2

Q3

Q4

Q4

Q1

Q2

Q3

Q4

FY23

FY24

FY24

FY24

FY24

FY23

FY24

FY24

FY24

FY24

FY23

FY24

FY24

FY24

FY24

AWARDSBACKLOG	ADJ. EBITDA1	NET INCOME (LOSS)2
$ in millions	$ in millions	$ in millions
						Combined
		Reported Continuing Ops				Reported Continuing Ops			Reported Continuing Ops

$3,849

$3,644

$3,722

$3,696

$486

$368

$383

$1,659

$347

$358

($61.5) ($77.0)

($124.4)($89.8)

$124

$183

($767.2)

Q4

Q1

Q2

Q3

Q4

Q4

Q1

Q2

Q3

Q4

Q4

Q1

Q2

Q3

Q4

FY23

FY24

FY24

FY24

FY24

FY23

FY24

FY24

FY24

FY24

FY23

FY24

FY24

FY24

FY24

Shareholder Letter | Q4 Fiscal Year 2024

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AWARDS, REVENUE AND ADJ. EBITDA1

$ in millions

Combined

Reported Continuing Ops

$386 $361 $386

$183		$121	$117
	$218	$58
Awards	Revenue Adj. EBITDA
	Q4 FY23	Q4 FY24

BACKLOG AND UNAWARDED IDIQ

$ in millions

Reported Continuing Ops

		$6,361
		$2,535
$493	$1,316
Backlog	Unawarded IDIQ
	Q4 FY23	Q4 FY24

Government

Systems

Segment Highlights

• Partnering with Rocket Lab to enable on-demand,low-latency data relay services for LEO satellites in support of NASA's Communications Services Project program, which is evaluating commercial satellite communications services and technologies to support near-Earth communications requirements
• Awarded a contract from Northrop Grumman to support the U.S. Air Force Research Laboratory initiative called the Defense Experimentation Using Commercial Space Internet program; our ViaSat-3 Satellite Communications Network will enable military users to easily access high-bandwidth satellite internet connectivity from existing USAF aircraft or ground vehicles
• Named the winner of the Government Mobile Innovation category in the Mobile Satellite User Association's 2024 Satellite Mobile Innovation Awards for our InCommand solution, which enables commanding and telemetry on-demand for space assets operating below geostationary orbit

Awards

Q4 FY2024 Government Systems awards more than doubled YoY to $386 million. The main contributors to the YoY growth were the full quarter impact from Inmarsat and tactical satcom networks offset by lower awards from government mobile broadband. Q4 FY2024 backlog of $1.3 billion was an increase of 167% YoY and also driven by the addition of Inmarsat. Unawarded IDIQ contract value at the end of Q4 FY2024 was $6.4 billion.

Revenue

In Q4 FY2024, Government Systems revenue was $386 million, a 77% increase compared to the prior year period due to the addition of Inmarsat. Combined revenue was up 7% YoY. The largest drivers of the YoY growth were from increased demand for high-speed network encryption products and tactical satcom networks. Offsetting the growth was lower revenue from government mobile broadband products and Inmarsat government services.

Adjusted EBITDA

Government Systems Q4 FY2024 Adjusted EBITDA increased by 104% YoY to $117 million driven by Inmarsat. Combined Adjusted EBITDA declined 3% YoY from lower revenue flow through in government mobile broadband, increased program costs and higher R&D expenditures.

Shareholder Letter | Q4 Fiscal Year 2024

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AWARDS, REVENUE AND ADJ. EBITDA1

$ in millions

Combined

Reported Continuing Ops

$509	$564	$577
$292			$266	$282
		$296	$85
Awards		Revenue Adj. EBITDA
	Q4 FY23	Q4 FY24

REVENUE MIX

Annual and Quarterly Trends

Reported Continuing Ops

		35%	45%	76%
23%	12%
FY20	FY21	FY22	FY23	FY24
50%	65%	77%	79%	81%
Q4	Q1	Q2	Q3	Q4
FY23	FY24	FY24	FY24	FY24
U.S. Fixed	Aviation / Maritime
Broadband	/ Enterprise / Other

SERVICE METRICS - KA BAND ONLY

End of period vessels and aircraft

19,550 19,770

2,510
Q4 FY23	Q3 FY24	Q4 FY24
Commercial	Business	Maritime
Aviation	Aviation

Satellite Services

Segment Highlights

• Reached 81% of Q4 FY2024 segment revenue driven by aviation, maritime, enterprise and other services primarily from the full quarter impact from Inmarsat and continuing growth in commercial aviation IFC services
• Selected by several commercial aviation customers to enable or expand their IFC solutions including Royal Jordanian Airlines' selection to install IFC equipment on 40+ aircraft, expansion of our relationship with Icelandair to equip their new Airbus fleet and an additional 40 widebody aircraft for Korean Air
• Enabled our first airline partner, easyJet, to enter commercial service on the ground-breaking Iris program, an initiative led by the European Space Agency and Viasat to leverage the latest generation of satellite technology to help modernize air traffic management
• Developed a hybrid, multi-layer managed service for Maritime customers: NexusWave, launched in Q1 FY2025 and available for installation from Q2 FY2025, is a scalable, bonded network solution providing global coverage, speed, capacity, and resilience to meet the needs of the global shipping industry

Revenue

In Q4 FY2024, Satellite Services revenue increased 95% YoY to $577 million driven by the Inmarsat acquisition. Combined revenue increased 2% compared to Q4 FY2023. The YoY increase was due to the substantial growth from both commercial and business aviation aircraft in service, which offset the decline in U.S. fixed broadband. Momentum continues in our combined fleet of commercial and business aviation aircraft, with both growing YoY and sequentially. We continue to win new airline relationships alongside executing on our existing aircraft backlog. Commercial and business aviation ended the quarter with approximately 3,650 and 1,780 aircraft in service, respectively.

Adjusted EBITDA

Satellite Services Q4 FY2024 Adjusted EBITDA more than tripled YoY to $282 million due to the contribution from Inmarsat. Combined Adjusted EBITDA grew 6% YoY as a result of the aviation services incremental revenue flow through and focus on cost management of SG&A expenditures. These growth drivers more than offset YoY declines in U.S. fixed broadband services. Q4 FY2024 Adjusted EBITDA margin of 49% expanded approximately 170 basis points compared to Combined Adjusted EBITDA margin in the prior year period.

Shareholder Letter | Q4 Fiscal Year 2024

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AWARDS, REVENUE AND ADJ. EBITDA1

$ in millions

Combined

Reported Continuing Ops

$223 $219	$188
	$167
	$153		($18)
			($19) ($41)
Awards	Revenue	Adj. EBITDA
	Q4 FY23	Q4 FY24

Commercial

Networks

Segment Highlights

• Completed the VS3-F1 spacecraft handover process in Q4 FY2024 with Viasat's satellite control center operating the spacecraft and commercial in-service expected in Q1 FY2025 or mid calendar 2024
• For VS3-F2, we continue to expect to complete extensive testing and spacecraft integration placing the satellite into commercial service by late calendar 2025. VS3-F3 remains on track to go into commercial service mid to late calendar 2025
• Started receiving insurance claims in Q4 FY2024 for both Inmarsat-6 F2 and VS3-F1. At the close of the quarter, we received approximately 65% of our anticipated $770 million of insurance claims

Awards

Commercial Networks Q4 FY2024 awards decreased 2% YoY to $219 million due to the timing of orders for commercial air IFC terminals, which experienced significant order demand from the prior year quarter. Offsetting the YoY decline was growth from antenna systems' government program wins and strong awards from energy product solutions. Backlog was $648 million at the end of Q4 FY2024, a 16% decline YoY as we worked through the backlog of IFC terminal deliveries throughout the year.

Revenue

In Q4 FY2024, Commercial Networks revenue was $188 million, a 23% increase YoY. Combined revenue increased 12% YoY driven primarily by commercial air IFC terminal deliveries. The Combined YoY increase was partially offset by decreases in maritime and enterprise products. At the end of Q4 FY2024, we had over 1,360 commercial aircraft anticipating installation of IFC equipment under existing customer agreements, which gives us momentum to continue increasing our installation base heading into FY2025.

Adjusted EBITDA

Q4 FY2024 Commercial Networks Adjusted EBITDA was a $41 million loss, an increase compared to an $18 million loss in Q4 FY2023. Combined Adjusted EBITDA loss increased 122% compared to a $19 million loss in Q4 FY2023 driven by lower contributions from aviation, maritime and enterprise products alongside higher R&D expenditures.

Shareholder Letter | Q4 Fiscal Year 2024

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OPERATING CASH FLOW

$ in millions

Reported Continuing Ops

		$219		$232
	$104		$134
$50
Q4	Q1	Q2	Q3	Q4
FY23	FY24	FY24	FY24	FY24

CAPITAL EXPENDITURE

$ in millions

Combined

Reported Continuing Ops

$442 $449 $366 $421 $378

$314	$375
Q4	Q1	Q2	Q3	Q4
FY23	FY24	FY24	FY24	FY24

NET DEBT & NET LEVERAGE RATIO4

$ in billions (except net leverage)

3.9x

3.7x

3.8x

3.6x

2.0x

$5.5

$5.6

$5.9

$5.6

$1.1

Q4

Q1

Q2

Q3

Q4

FY23

FY24

FY24

FY24

FY24

Balance Sheet, Cash Flows and Liquidity

Operating Cash Flow

Viasat generated $232 million in operating cash flow during Q4 FY2024 and $688 million for FY2024. The fiscal year operating cash flow includes the contribution of ten months of operating results from our Inmarsat acquisition and reflects several one-time items that negatively impacted operating cash flow generation. It included approximately $165 million in cash payments primarily related to acquisition and integration activities, taxes payable on the gain from the divestiture of the Link-16 TDL business, partially offset by cash received from the litigation settlement catch-up payments. Excluding those items, operating cash flow would have been approximately $850 million.

Capital Expenditure

Q4 FY2024 capital expenditures were $378 million, an increase of 21% YoY and a decline of 10% sequentially. Combined capital expenditures declined 15% YoY. The Combined decline was primarily related to lower capital expenditure from customer premise equipment and other infrastructure costs. Sequentially, the decrease primarily reflects timing of satellite-related expenditure and lower general infrastructure costs.

Debt and Leverage

Viasat ended Q4 FY2024 with $3.0 billion in available liquidity, which consisted of $1.9 billion in cash and cash equivalents and $1.1 billion of combined borrowing ability under our two undrawn revolving credit facilities. Net debt of the combined companies was $5.6 billion and our net leverage ratio declined sequentially to 3.6x of estimated combined LTM Adjusted EBITDA.

Shareholder Letter | Q4 Fiscal Year 2024

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Outlook

We view FY2025 as a springboard to our multi-year transformation enabling accelerated revenue growth, Adjusted EBITDA growth, and a continued step down in capital expenditures in FY2026. We are incorporating the schedules for service entry of new satellites (including VS3-F2 and VS3-F3) into our financial outlooks. We expect none of those will impact FY2025, but VS3-F3 and VS3-F2 will begin to impact FY2026, as noted in our satellite roadmap (see next page) which provides a full view of development progress and anticipated service entry dates. Effective with this letter, we will focus on in-service dates as these are the most critical milestones for our customers and the most relevant to our valued shareholders and are what best inform our growth outlook.

As a reminder, we closed the acquisition of Inmarsat on May 30, 2023. To facilitate comparability, Inmarsat's financial results for the period prior to the acquisition are included with Viasat's on a Combined basis in our YoY comparisons below.

• For FY2025 we expect roughly flat YoY revenue growth excluding the one-timecatch-up benefits from the litigation settlement of $95 million in Q2 FY2024.
• For FY2025 we expect low to mid-single-digit YoY Adjusted EBITDA growth excluding the one-time benefits from the litigation settlement of $86 million in Q2 FY2024.
• Satellite Services revenue is expected to decline low to mid-single digits in FY2025 compared to FY2024 reflecting an expected decline in U.S. fixed broadband revenue as we continue to prioritize capacity to our higher margin mobility businesses. The fixed broadband decline will be mostly offset by growth in mobility services revenue, taking into account substantially lower expected OEM deliveries of new aircraft to our customers.
• Government Systems revenue is expected to achieve high-single digit YoY growth in FY2025, driven by increasing demand for equipment including encryption products, partially offset by a decline in tactical networking. Government Systems revenue visibility for FY2025 is supported by backlog of over $1.3 billion, alongside growing recurring government service revenue contributions from Inmarsat.
• Commercial Networks revenue is expected to grow mid-single digits in FY2025 compared to FY2024 excluding the catch-up impacts of the FY2024 litigation settlement driven by the recurring contributions under certain licensing agreements and in advanced technologies solutions. Commercial Networks revenues associated with aviation terminal sales are also expected to be impacted by substantially lower anticipated OEM aircraft deliveries in FY2025.
• We continue to expect net leverage to increase modestly by the end of FY2025 given the current year benefit from accelerated insurance payments, reaching peak levels prior to our turn to free cash flow in the first half of calendar 2025.
• In FY2025 we continue to expect capital expenditures to decline to a range of $1.4 billion to $1.5 billion (range includes approximately $450 million for Inmarsat related capital expenditures), building on approximately $175 million of benefits achieved in FY2024 relative to our prior outlook. The FY2025 range excludes the benefit from insurance recoveries, as capitalized software and network synergies offset a portion of the FY2024 satellite expenditures that moved into FY2025.

A preliminary view of FY2026 indicates we expect to grow revenue and Adjusted EBITDA again in FY2026 relative to FY2025 as a majority of our $3.3 billion assets under construction go into commercial service. Capital expenditures for FY2026 are expected to continue to decline to a range of $1.1 billion to $1.2 billion.

Consistent to prior guidance, we expect an inflection to positive free cash flow by the end of Q1 FY2026 driven by double-digit operating cash flow growth and accelerating declines in capital expenditures as we work toward more normalized capital expenditure levels in line with satellites going into commercial service.

Together we built a strong foundation of unique space and ground assets to serve vast and growing markets. We will carry forward our innovative spirit, customer focus, and passion to connect a world on the move.

Our team is poised to realize our full potential with disciplined agility and a renewed commitment to serve our customers and shareholders.

Sincerely,

Mark Dankberg

Guru Gowrappan

Shareholder Letter | Q4 Fiscal Year 2024

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