Volatile stock to watch: ViaSat, Inc. (NASDAQ: VSAT)

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ViaSat, Inc. (NASDAQ: VSAT) stock surged over 13.24% on May 26th, 2020 but lost over 5.7% in the pre-market session of May 27th, 2020 (Source: Google finance).

For fourth quarter of FY 20, Viasat has generated a record $437 million in operating cash flow in FY2020 driven by strong earnings performance. This was an increase of $109 million over the same period last year. Capital expenditures were higher by $74 million year-over-year driven mainly due to higher ViaSat-3 satellite program construction costs, cash paid for other long term assets and capitalized software costs, which was partially offset by lower customer premise equipment (CPE) investment on lower gross subscriber additions as churn rates improved plus an increased rate of refurbished CPE redeployments.  On a sequential basis Q4 FY2020 capital expenditures were $70 million lower. In Q4 FY2020, the net leverage ratio declined slightly sequentially to 3.4x. The company had ended the quarter with $304 million in cash and cash equivalents after $280 million of net draws on the revolving credit facility to allow for additional flexibility as the company continues to manage the impact of the COVID-19 pandemic, and the liquidity remained strong at nearly $600 million, including borrowing availability of $293 million under the revolver.

VSAT in the fourth quarter of FY 20 has reported the adjusted earnings per share of 3 cents, while reported percent fall in the adjusted revenue to $591.7 million in the fourth quarter of FY 20. Q4 Adjusted EBITDA margins as a % of revenue had expanded about 90 basis points compared to last year. Without the transient and IFC impacts of COVID-19, the margins would have expanded about 400 basis points.

Moreover, some Government Systems shipments were delayed out of Q4 FY2020 due to shelter-in-place process delays with some U.S. Department of Defense (DoD) customers. The Government Systems’ revenues grew 4% in Q4 FY2020 and 19% for FY2020, compared to the prior periods, surpassing $1 billion for the first time. Satellite Services achieved the revenue growth of 12% in Q4 FY2020 year-over-year.  Adjusted EBITDA grew 8% year over-year from a diversified service portfolio. For in-flight services, the company saw continued growth, with Q4 2020 revenue up 13% year-over-year, even with the impact of the COVID-19 pandemic late in the quarter. The company had ended the year with 1,390 commercial aircraft in service.

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