How Does Viasat Make Money?

Viasat has three main sources of revenue: Government Contracts, Commercial Networks and Satellite Services. Each division has a specific profit or loss level in any given year. In 2021 Viasat generated $2.3 Billion in revenues, which was a 2% decrease over Fiscal Year 2020. In the order of their contribution to overall corporate revenue here’s a look at each division of the company.

Government Contracts drove 48% of the company overall revenues in Fiscal Year 2021. It is by far the largest income contributor. Viasat generated $1.1 Billion in government contracts in 2021, a 6% decrease from the previous year. The Government Contracts division generates high “backlog revenue” of $1.1 Billion. Backlog revenue are monies it expects to realize over the remining life of the awarded signed contracts. Viasat received $1.2 Billion in new contract commitments in 2021, the third year in a row where such volumes exceeded $1 Billion. Product sales were down by 12% for the period over the previous year and Service sales were up 14% year over year. The company opened new Network Operations and Cyber Security Centers in the United Kingdom to support government and commercial services.

Satellite Services contribute 38% of overall revenues for Viasat. However, its Satellite Services generated $869 Million in 2021, a 5% increase year over year. Within this division, Viasat has 590,000 U.S. fixed broadband subscribers. By comparison, Starlink currently has 250,000 subscribers globally.

Commercial Networks account for 14% of total revenue in Fiscal Year 2021. Revenues for this division were $321 Million in 2021, down 7% year over year. This period included decreased commercial activity during the height of the pandemic. Viasat has satellite service in 1,480 commercial aircraft, which is a 6% increase over the previous year. In 2021 Viasat was awarded $637 million in new commercial contracts and this represented a 52% increase over the previous year.

According to financial analysts, the majority of Viasat’s shares (VSAT) are held by long-term investors in institutions and mutual funds and 4% are held by insiders. Viasat was early to the satellite internet business and now is competing with Starlink from SpaceX and Project Kuiper form Amazon – two competitors withe vast financial resources. Viasat’s government contracts are a strong source of revenue currently and in the future and it will likely look to build its Commercial Networks capacity going forward. Demand for internet is massive and will remain so and indeed being able to deliver larger capacity to customers will be important. It’s a dynamic and competitive arena.