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Item 7. Management’s Discussion and Analysis

2025-05-27 compared with 2024-05-29 · 224 added, 178 removed, 388 unchanged (51% of the section changed)

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We are an innovative, global provider of communications technologies and services, focused on making connectivity accessible, available and secure for current and future customers worldwide.

By leveraging our own satellite fleet and its 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.

Our end-to-end multi-band platform of satellites, ground infrastructure and user terminals enables us to provide a wide array of cost-effective, high-quality broadband, narrowband and other connectivity solutions to aviation, maritime, enterprise, consumer, military and government users around the globe, whether on the ground, in the air or at sea.

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We believe that our diversification strategy—anchored in a broad portfolio of customer-centric products and services and supported by our fleet of broadband and narrowband satellites—our vertical integration and our ability to effectively cross-deploy technologies between government and commercial applications and segments as well as across different geographic markets, provide us with a strong foundation to sustain and enhance our leadership in advanced communications and networking technologies.

We conduct our business through three segments:

satellite services, commercial networks and government systems.

In May 2024, certain organizational changes were made that are expected to impact our future internal reporting and reportable segments.

The new segment reporting structure is expected to better reflect our strategy following the Inmarsat Acquisition, diverse global end markets, and certain organizational and leadership changes, that allow us to better assess the operational performance of and allocate resources to our multiple product lines.

Commencing with the first quarter of fiscal year 2025 we will have two reportable segments:

We conduct our business through two segments:

communication services and defense and advanced technologies.

See Note 17 — Subsequent Event to our consolidated financial statements for additional information.

Satellite Services

Our satellite services segment provides a wide range of satellite-based broadband and narrowband services around the globe using our multi-band fleet of satellites in service as well as leased capacity on third party satellites.

The primary services offered by our satellite services segment include:

• Aviation services, including industry-leading IFC services, W-IFE services and narrowband safety services, as well as complementary aviation software services.

• Maritime services, which offer 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.

• Fixed broadband services, which offer high-speed, high-quality, reliable broadband internet services to businesses and residential users (primarily in the United States as well as in various countries in Europe and Latin America), as well as enterprise connectivity solutions.

• Energy services , which include secure, reliable networking and connectivity solutions for remote sites and operations, and industry-leading machine learning analytics.

• IoT and other narrowband services, including L-band managed services and analytics.

• Community internet services, which offer innovative, affordable internet services through satellite-based community hotspots in areas with little or no access to the internet.

We provide community internet services in Mexico and Brazil.

Commercial Networks

Our commercial networks segment develops and sells a wide array of advanced satellite and wireless products, antenna systems and network and terminal solutions that support or enable the provision of fixed and mobile broadband and narrowband services.

We design, develop and produce space system solutions for multiple orbital regimes, including GEO, HEO, MEO and LEO.

The primary products, systems, solutions and services offered by our commercial networks segment are comprised of:

• Mobile satellite communication systems, designed for use in aircraft, land-mobile and seagoing vessels.

• Fixed satellite communication systems, including next-generation satellite network infrastructure, ground terminals and design and implementation for customer telecommunication systems.

• Antenna systems, including state-of-the-art ground and airborne terminals, antennas and gateways for terrestrial and satellite customer applications, mobile satellite communication, Ka-band earth stations and other multi-band/multi-function antennas.

• Space systems design and satellite networking development, including the design and development of the architecture of high-capacity Ka-band geosynchronous satellites and the associated satellite payload and antenna technologies (both for our own satellite fleet as well as for third parties), and special purpose LEO and MEO satellites and other small satellite platforms, as well as semiconductor design for ASIC and MMIC chips.

Satellite networking development includes specialized design and technology services covering all aspects of satellite communication system architecture, networks and technology.

Government Systems

Our government systems segment offers a broad array of products and services, including:

• Government mobile broadband products and services, which provide military and government users with high-speed, real-time broadband and multimedia connectivity in key regions of the world, as well as LOS and BLOS Intelligence and ISR missions.

• Government narrowband products and services, which provide military and government users with L-band products and services such as L-TAC communications, L-band airborne ISR services and LACE terminals.

• Government satellite communication systems, which offer an array of portable, mobile and fixed broadband modems, terminals, network access control systems and antenna systems, and include products designed for manpacks, aircraft, UAVs, seagoing vessels, ground-mobile vehicles, space-based systems and fixed applications.

• Secure networking, cybersecurity and information assurance products and services, which provide advanced, high-speed IP-based “Type 1” and HAIPE-compliant encryption solutions that enable military and government users to communicate information securely, and that protect the integrity of data stored on computers and storage devices, and include our MOJO expeditionary tactical gateway family of products.

We changed our segment reporting structure at the beginning of fiscal year 2025, and accordingly our results of operations for fiscal years 2024 and 2023 have been recast to reflect this new reporting structure in this report.

Communication Services

Our communication services segment provides a wide range of broadband and narrowband communications solutions across government and commercial mobility markets, as well as for residential and enterprise fixed broadband customers.

In addition, this segment includes the development and sale of a wide array of advanced satellite and wireless products and terminals that support or enable the provision of fixed and mobile broadband and narrowband services.

We design, develop and produce space system solutions for multiple orbital regimes, including GEO, MEO and LEO.

The following are the primary business lines in our communication services segment:

• Aviation, which includes industry-leading IFC services, narrowband safety operational data services and other complementary services and applications for commercial aircraft, business jets and unmanned aircraft.

• Government satcom, which includes various broadband and narrowband products and services for both fixed and mobile communications that provide military and government users with secure, high-speed, real-time broadband and multimedia connectivity in key regions of the world, as well as tactical line-of-sight and beyond-line-of-sight communications, ISR services and LACE terminals.

• 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.

• 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, IoT and other narrowband services (such as L-band managed services that enable real-time M2M 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.

Defense and Advanced Technologies

Our defense and advanced technologies segment develops and offers a diverse array of resilient, vertically integrated solutions to government and commercial customers, leveraging our core technical competencies in encryption, cyber security, tactical gateways, modems and waveforms.

The following are the primary business lines in our defense and advanced technologies segment:

• Information security and cyber defense, which comprises a variety of high-quality networking, cybersecurity and information assurance products and services that provide advanced, high-speed IP-based “Type 1” and HAIPE®-compliant encryption solutions that enable military and government users to communicate information securely, and that protect the integrity of data stored on computers and storage devices.

Information security and cyber defense also includes our MOJO expeditionary tactical gateway family of products.

• Space and mission systems, which includes specialized design and technology services covering all aspects of satellite communication system architecture, networks and technology, including state-of-the-art government satellite communication systems, mobile and fixed broadband modems, ground and airborne terminals, antennas and gateways for terrestrial and satellite customer applications, Ka-band earth stations and other multi-band/multi-function antennas, as well as products designed for manpacks, aircraft, unmanned aerial vehicles, seagoing vessels, ground-mobile vehicles, space-based systems and fixed applications.

Space and mission systems also includes the design and development of the architecture of high-capacity Ka-band GEO satellites and the associated satellite payload and antenna technologies (both for our own satellite fleet as well as for third parties), and special purpose LEO and MEO satellites and other small satellite platforms.

• Tactical networking, which provides resilient communications designed for on-the-move or on-the-pause operations in a multi-domain battlespace with friendly force tracking and narrowband solutions.

Tactical networking includes the products and services offered by TrellisWare.

• Advanced technologies and other, which includes commercial communication satellite product development, orchestration of sovereign and multi-orbit solutions, products focused on emerging growth markets (such as direct-to-device) and intellectual property licensing revenues.

Factors and Trends Affecting our Results of Operations

We believe that the performance of our business and our results of operations in a given period are driven by various factors, including:

• the timing and impact of acquisitions and divestitures (such as the Inmarsat Acquisition) and transaction-related or integration costs and any incurrence or repayment of indebtedness in connection therewith;

• increasing levels of competition in the markets in which we compete;

• the extent and stage of our satellite design, construction and launch activities, the associated level of investment required, the impact of any construction or launch delays, operational or launch failures or satellite anomalies or deployment issues, and the impact of bringing newly launched satellites into commercial service and associated ramp-up activities and costs (see the discussion below under “Satellite-Related Activities”);

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• our ability to maintain the health, capacity, control and level of service of our satellite fleet, or the existence or occurrence of any malfunctions or anomalies in or other disruptions to our satellites;

• changes in the levels of our R&D spending, including the effects of associated tax credits;

• the uptake of our in-flight services by commercial airlines and number of aircraft retrofitted or installed with our IFC systems, and the rate of revenue growth in our IFC-related businesses in our satellite services and commercial networks segments, as well as the impact of the grounding or slowdown in manufacture of aircraft related to aircraft safety, maintenance or other issues;

• the availability of third-party satellite bandwidth and network infrastructure that we rely on to provide our services;

• the extent of growth in uptake of our in-flight services by commercial airlines and business jets, the number of aircraft retrofitted or installed with our IFC systems, and the rate of revenue growth in our IFC-related businesses in our communication services segment, as well as the impact of the grounding or slowdown in manufacture of aircraft related to aircraft safety, maintenance, OEM delays or other issues;

• the rate of growth in worldwide demand for mobile and fixed broadband connectivity, including growth in the number of aircraft and vessels in service, passengers, internet users, applications and connected devices;

• the rate of technological innovation and change in the industries in which we operate, and the introduction of new competing technologies, products and services by new and existing competitors;

• the global business environment and economic conditions, including changes in interest rates, credit conditions, debt levels, consumer confidence, discretionary spending levels, rates of inflation, unemployment rates, energy costs, geopolitical issues, tariffs and other macro-economic factors;

• changes in the levels of our R&D spending, including the effects of associated tax credits;

• seasonal effects related to the timing of contract awards, the timing and availability of U.S.

Government funding, and the timing of product deliveries and customer acceptance in our government systems segment, as well as increased demand for IFC services from airline passengers during peak holiday and summer travel periods and subscriber activity for our fixed broadband services related to traditional retail selling periods in our satellite services segment;

Government funding, and the timing of product deliveries and customer acceptance, as well as increased demand for IFC services from airline passengers during peak holiday and summer travel periods and subscriber activity for our fixed broadband services related to traditional retail selling periods in our communication services segment;

• the marketing and pricing strategies of our competitors with respect to competing technologies, products and services;

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• the timing, quantity and mix of products and services sold in each of our segments;

• the complex and lengthy procurement process for most of our commercial networks and government systems customers and potential customers, the impact of a failure to receive an expected order or a deferral of an order to a later period, and the timing of or effect of delays in obtaining government product certifications;

• the complex and lengthy procurement process for many of our customers, particularly in our government satcom business and defense and advanced technologies segment, the impact of a failure to receive an expected order or a deferral of an order to a later period, and the timing of or effect of delays in obtaining government product certifications;

• the difficulty in estimating costs over the life of a contract, which may require adjustment in future periods, and the impact of cost overruns (due to inflation or otherwise) on fixed-price development contracts;

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• our reliance on a global supply chain, including contract manufacturers and single-source or limited groups of suppliers;

the impact of supply chain bottlenecks, and our ability to purchase component parts that are periodically subject to shortages or supply chain disruptions resulting from surges in demand, natural disasters, wars and other conflicts or other events;

the impact of supply chain bottlenecks, and our ability to purchase or favorably price component parts that are periodically subject to shortages or supply chain disruptions resulting from surges in demand, natural disasters, tariffs, wars and other conflicts or other events;

• varying subscriber addition, churn and average revenue per user (ARPU) rates for our fixed broadband businesses and mix of wholesale and retail subscribers;

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• our ability to generate sufficient cash flows to repay our indebtedness;

• the impact of public health crises, such as the COVID-19 pandemic, general economic and political conditions, and other trends that affect the industries in which we operate, and the return to normalization after associated disruptions, such as the timing of return to normalization of government acquisition processes and pre-pandemic global airline traffic levels following COVID-19-related disruptions.

• the impact of public health crises, such as the COVID-19 pandemic, and the return to normalization after associated disruptions, such as the timing of return to normalization of government acquisition processes and pre-pandemic global airline traffic levels following COVID-19-related disruptions.

We may see some negative impacts on revenues and operating cash flows from our aviation businesses in fiscal year 2026 and potentially beyond, as a result of the impacts of regulatory oversight, approvals for new model aircraft and lingering global supply chain issues on the timely deliveries of aircraft to our commercial airline customers.

The extent of global economic challenges (including lingering impacts of the COVID-19 pandemic) on our business in fiscal year 2025 and potentially beyond will depend on many factors, including the extent of effects on important global, regional and local supply chains, overall supply and demand, global air travel, consumer confidence, discretionary spending levels and levels of economic activity.

See also “Business–Segments” in Part I, Item 1 of this report for a discussion of what we believe to be key drivers for future growth in each of our segments.

Inmarsat Acquisition

On May 30, 2023, we purchased all of the issued and outstanding shares of Connect Topco Limited, a private company limited by shares and incorporated in Guernsey (Inmarsat Holdings and, together with its subsidiaries, Inmarsat), in exchange for approximately $550.7 million in cash and 46.36 million shares of our common stock (the Inmarsat Acquisition).

In connection with the closing of the Inmarsat Acquisition, we entered into the 2023 Term Loan Facility and Bridge Facility, which were fully drawn at closing.

On September 28, 2023, we replaced the Bridge Facility with the 2031 Notes, in the same principal amount and at the same interest rate.

The assets and results of operations of Inmarsat's commercial business are primarily included in our satellite services segment (with an insignificant amount included in our commercial networks segment) and Inmarsat's government business included in our government systems segment for the period following the closing of the Inmarsat Acquisition on May 30, 2023.

Other Transactions

On May 30, 2023, we completed the acquisition of Connect Topco Limited, a private company limited by shares and incorporated in Guernsey (Inmarsat Holdings and, together with its subsidiaries, Inmarsat), in exchange for approximately $550.7 million in cash and 46.36 million shares of our common stock (the Inmarsat Acquisition).

The assets and results of operations of Inmarsat are included in our communication services segment for the period following the closing of the Inmarsat Acquisition on May 30, 2023.

Sale of Link-16 TDL Business

On January 3, 2023, we completed the sale of certain assets and assigned certain liabilities comprising our Link-16 TDL Business to L3Harris in exchange for approximately $1.96 billion in cash, subject to certain adjustments.

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See Note 5 — Discontinued Operations to our consolidated financial statements for additional information.

On April 30, 2021, we completed our acquisition of the remaining 51% interest in EBI, a satellite broadband internet service provider in EMEA, from Eutelsat.

We paid approximately $167.0 million in cash, net of approximately $22.0 million of purchase price consideration received during the second quarter of fiscal year 2024 and $121.7 million of EBI’s cash on hand, resulting in a cash outlay of approximately $29.0 million.

On April 30, 2021, we completed our acquisition of RigNet, a leading provider of ultra-secure, intelligent networking solutions and specialized applications.

In connection with the acquisition, we issued approximately 4.0 million shares of our common stock to RigNet former shareholders, paid down $107.3 million of outstanding borrowings of RigNet’s revolving credit facility, and retained approximately $20.6 million of RigNet’s cash on hand.

The assets and results of operations of EBI and RigNet are primarily included in our satellite services segment, with insignificant amounts included in our commercial networks segment.

Satellite-Related Activities

We launched the first of our third-generation ViaSat-3 class satellites, ViaSat-3 F1, into orbit on April 30, 2023.

On July 12, 2023, we reported a reflector deployment issue that materially impacted the performance of the ViaSat-3 F1 satellite, and on August 24, 2023, we reported the I-6 F2 satellite (which was launched prior to the closing of the Inmarsat Acquisition) suffered a power subsystem anomaly during its orbit raising phase and concluded that the satellite would not operate as intended (see Note 1 — The Company and a Summary of Its Significant Accounting Policies — Property, equipment and satellites to our consolidated financial statements for more information).

We currently have ten GEO and HEO satellites under development:

two additional high-capacity Ka-band GEO satellites (ViaSat-3 F2 ViaSat-3 F3), three additional adaptive Ka-band GEO satellites (Inmarsat GX 7, GX 8 and GX 9), two Ka-band HEO satellite payloads intended to provide polar coverage (Inmarsat GX 10a and GX 10b) and three Inmarsat-8 L-band GEO safety service satellites.

The ViaSat-3 F1 satellite is expected to enter into commercial service in mid calendar year 2024.

The ViaSat-3 F2 satellite is anticipated to be placed into commercial service by late calendar year 2025, with the ViaSat-3 F3 satellite expected to go into commercial service mid to late calendar year 2025.

Our complementary fleet of 23 in service or operational satellites spans the Ka-, L- and S-bands, enabling 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.

We launched the first of our third-generation ViaSat-3 class satellites, ViaSat-3 F1, into orbit on April 30, 2023, and on July 12, 2023, we reported a reflector deployment issue that materially impacted the performance of the ViaSat-3 F1 satellite.

On August 24, 2023, we reported that the I-6 F2 satellite, which was launched in February 2023, suffered a power subsystem anomaly during its orbit raising phase, and concluded that the satellite would not operate as intended.

See Note 1 — The Company and a Summary of Its Significant Accounting Policies — Property, equipment and satellites to our consolidated financial statements for more information.

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 GSO and NGSO 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.

As we continue to build and expand our global network and satellite fleet, from time to time we enter into satellite construction agreements for the construction and purchase of additional satellites and (depending on the satellite design) the integration of our payload and technologies into the satellites.

See Note 14 — Commitments to our consolidated financial statements for information as of March 31, 2024 regarding our future minimum payments under our satellite construction contracts and other satellite-related purchase commitments (including satellite performance incentive obligations relating to the ViaSat-1 and ViaSat-2 satellites) for the next five fiscal years and thereafter.

See Note 14 — Commitments to our consolidated financial statements for information as of March 31, 2025 regarding our future minimum payments under our satellite construction contracts and other satellite-related purchase commitments (including satellite performance incentive obligations) for the next five fiscal years and thereafter .

The total project cost to bring a new satellite into service will depend, among other things, on the scope and timing of the earth station infrastructure roll-out and the method used to procure fiber or other access to the earth station infrastructure.

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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 in our satellite services segment during the ramp-up period prior to service launch and in the fiscal year following service launch.

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.

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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 satellite services segment, and any such gains may also be offset by investments in our global business.

In addition, in fiscal years 2024 and 2023 we experienced (and we may in the future experience) capacity constraints on our existing satellites in the lead-up to the commencement of commercial service on new satellites.

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.

Sources of Revenues

Our satellite services segment revenues are primarily derived from our in-flight services, fixed broadband services, maritime services (including narrowband and safety of communication capabilities primarily acquired through the Inmarsat Acquisition) and energy services.

Revenues in our commercial networks and government systems segments are primarily derived from three types of contracts:

fixed-price contracts (which require us to provide products and services under a contract at a specified price), cost-reimbursement contracts (under which we are reimbursed for all actual costs incurred in performing the contract to the extent such costs are within the contract ceiling and allowable under the terms of the contract, plus a fee or profit), and time-and-materials contracts (which reimburse us for the number of labor hours expended at an established hourly rate negotiated in the contract, plus the cost of materials utilized in providing such products or services).

Historically, a significant portion of our revenues in our commercial networks and government systems segments has been derived from customer contracts that include the development of products.

Our communication services segment revenues are primarily derived from our aviation services (including IFC services), government satcom services, maritime services (including narrowband and safety of communication capabilities), fixed broadband services, and energy services, as well as a wide array of advanced satellite and wireless products, networks and terminal solutions that support or enable the provision of fixed and mobile broadband and narrowband services.

Our defense and advanced technologies segment revenues are primarily derived from our information security and cyber defense, space and mission systems, tactical networking, and advanced technologies and other, products and services, which are provided to government and commercial customers.

Our revenues are primarily derived from two types of contracts:

fixed-price and cost-reimbursement contracts.

Fixed-price contracts (which require us to provide products and services under a contract at a specified price) comprised approximately 96%, 95% and 93% of our total revenues for fiscal years 2025, 2024 and 2023, respectively, a majority of which were reported in our communication services segment.

The remainder of our revenues for such periods was derived primarily from cost-reimbursement contracts (under which we are reimbursed for all actual costs incurred in performing the contract to the extent such costs are within the contract ceiling and allowable under the terms of the contract, plus a fee or profit), which contracts were mainly reported within our defense and advanced technologies segment.

Historically, a portion of our revenues has been derived from customer contracts that include the development of products, mainly reported within the defense and advanced technologies segment.

The development efforts are conducted in direct response to the customer’s specific requirements and, accordingly, expenditures related to such efforts are included in cost of sales when incurred and the related funding (which includes a profit component) is included in revenues.

See Note 1 — The Company and a Summary of Its Significant Accounting Policies to our consolidated financial statements for additional information.

To date, our ability to grow and maintain our revenues in our commercial networks and government systems segments has depended on our ability to identify and target markets where the customer places a high priority on the technology solution, and our ability to obtain additional sizable contract awards.

To date, our ability to grow and maintain our revenues in each of our communication services and defense and advanced technologies segments has depended on our ability to identify and target markets where the customer places a high priority on the technology solution, and our ability to obtain additional sizable contract awards.

Due to the nature of this process, it is difficult to predict the probability and timing of obtaining awards in these markets.

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These contracts typically require advance or recurring monthly payments by the customer.

Our obligation to provide connectivity services

is satisfied over time as the customer simultaneously receives and consumes the benefits provided.

Our obligation to provide connectivity services is satisfied over time as the customer simultaneously receives and consumes the benefits provided.

The measure of progress over time is based upon either a period of time (e.g., over the estimated contractual term) or usage (e.g., bandwidth used/bytes of data processed).

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ASC 340-40 also requires the recognition of an asset from the costs incurred to fulfill a contract when (1) the costs relate directly to a contract or to an anticipated contract that we can specifically identify, (2) the costs generate or enhance our resources that will be used in satisfying (or in continuing to satisfy) performance obligations in the future, and (3) the costs are expected to be recovered.

We recognize an asset related to commission costs incurred primarily in our satellite services segment and recognize an asset related to costs incurred to fulfill contracts.

We recognize an asset related to commission costs incurred primarily in our communication services segment and recognize an asset related to costs incurred to fulfill contracts.

Costs to acquire customer contracts are amortized over the estimated customer contract life.

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Property, equipment and satellites

Property, equipment and satellites, net includes our owned and leased satellites and the associated earth stations and networking equipment, as well as the customer premise equipment units which are leased to customers as part of our satellite services segment.

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.

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A lease is classified as a finance lease when one or more of the following criteria are met:

present value of the lease payments equals or exceeds substantially all of the fair value of the asset or (5) the asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.

(1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset, (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset or (5) the asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.

A lease is classified as an operating lease if it does not meet any of these criteria.

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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.

Except for the impairment related to certain of our satellites under construction and satellite programs (discussed in Note 1 — The Company and a Summary of Its Significant Accounting Policies — Property, equipment and satellites below) in the second and third quarters of fiscal year 2024 and the impairment of certain right-of-use assets in the fourth quarter of fiscal year 2023, no other material impairments were recorded by us for fiscal years 2024, 2023 and 2022.

Except for the impairment related to our exit from certain locations in EMEA markets, disposal of certain related assets and termination of certain related long-term contracts in the fourth quarter of fiscal year 2025, the impairment related to certain of our satellites under construction and satellite programs in the second and third quarters of fiscal year 2024 (as discussed in Note 1 — The Company and a Summary of Its Significant Accounting Policies — Property, equipment and satellites below), and the impairment of certain right-of-use assets in the fourth quarter of fiscal year 2023, no other material impairments were recorded by us for fiscal years 2025, 2024 and 2023.

See Note 7 — Leases to our consolidated financial statements for additional information.

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(1) changes in forecasted operating results and comparing actual results to projections, (2) changes in the industry or our competitive environment since the acquisition date, (3) changes in the overall economy, our market share and market interest rates since the acquisition date, (4) trends in the stock price and related market capitalization and enterprise values, (5) trends in peer companies’ total enterprise value metrics, and (6) additional factors such as management turnover, changes in regulation and changes in litigation matters.

Based on our qualitative assessment performed during the fourth quarter of fiscal year 2024, we concluded that it was more likely than not that the estimated fair value of each of our reporting units exceeded their related carrying value as of March 31, 2024.

Furthermore, in addition to qualitative analysis, we believe it is appropriate to conduct a quantitative analysis periodically as a prudent review of our reporting unit goodwill fair values.

Our quantitative analysis estimates the fair values of the reporting units using discounted cash flows and other indicators of fair value.

The forecast of future cash flow is based on our best estimate of each reporting unit’s future revenue and operating costs, based primarily on existing firm orders, expected future orders, contracts with suppliers, labor resources, general market conditions, successful launch of our satellites currently under construction and other relevant factors.

Based on a quantitative analysis for fiscal year 2025, we concluded that estimated fair values of our reporting units exceed their respective carrying values.

Based on our qualitative and quantitative assessment performed during the fourth quarter of fiscal year 2025, we concluded that it was more likely than not that the estimated fair value of each of our reporting units exceeded their related carrying value as of March 31, 2025.

Income taxes and valuation allowance on deferred tax assets

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Additionally, in our analysis, we also considered the fact that ASC 740 places more weight on the objectively verifiable evidence of current pre-tax losses and recent events than forecasts of future profitability.

Accruals for uncertain tax positions are provided for in accordance with the authoritative guidance for accounting for uncertainty in income taxes (ASC 740).

Accruals for uncertain tax positions are provided for in accordance with ASC 740.

Under the authoritative guidance, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

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Fiscal Years Ended

Product revenues

Service revenues

Product revenues

Operating expenses:

Cost of product revenues

Cost of service revenues

Selling, general and administrative (including satellite impairment and related charges, net — see Note 1 — The Company and a Summary of Its Significant Accounting Policies — Property, equipment and satellites to our consolidated financial statements)

Cost of product revenues

Selling, general and administrative (including ground network (FY25), satellite (FY24) impairment and related charges, net — see Note 1)

Independent research and development

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Interest (expense) income, net

(Loss) gain on extinguishment of debt, net (see Note 8)

Income (loss) from continuing operations before income taxes

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(In millions, except percentages)

Product revenues

Service revenues

Product revenues

Total revenues

Our total revenues grew by $1,727.6 million as a result of a $1,402.6 million increase in service revenues and a $325.0 million increase in product revenues, which increases reflect ten months of contribution from the Inmarsat Acquisition in fiscal year 2024.

The service revenue increase was due to increases of $931.0 million in our satellite services segment, $461.8 million in our government systems segment, and $9.7 million in our commercial networks segment.

The increase in product revenue was driven primarily by a $169.5 million increase in our government systems segment and a $155.5 million increase in our commercial networks segment.

Our total revenues increased by $235.8 million as a result of a $221.2 million increase in service revenues and a $14.6 million increase in product revenues.

The increase in service revenues was primarily due to a $223.8 million increase in our communication services segment.

The increase in product revenues was due to an increase of $81.5 million in our defense and advanced technologies segment, partially offset by a $66.9 million decrease in our communication services segment.

Cost of revenues

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(In millions, except percentages)

Cost of product revenues

Cost of service revenues

Cost of product revenues

Total cost of revenues

Cost of revenues increased by $1,067.3 million due to an increase of $830.4 million in cost of service revenues and $236.9 million in cost of product revenues.

The cost of service revenues increase was primarily due to increased service

revenues across each of our segments, causing a $961.6 million increase in cost of service revenues on a constant margin basis.

The increase in cost of service revenues was partially offset by higher margins, primarily driven by our government systems and satellite services segments.

The cost of product revenue increase was primarily due to increased product revenues, mainly from our government systems and commercial networks segments, causing a $230.3 million increase in cost of product revenues on a constant margin basis, prior to the effects of product revenues related to the Acacia litigation (see Note 15 — Contingencies to our consolidated financial statements for more information).

The increase in cost of product revenues was further increased by lower margins, primarily driven by our government systems and commercial networks segments.

Cost of revenues increased by $127.5 million due to a $163.0 million increase in cost of service revenues, partially offset by a $35.5 million decrease in cost of product revenues.

The increase in cost of service revenues was primarily due to increased service revenues, mainly driven by our communication services segment, resulting in a $142.0 million increase in cost of service revenues on a constant margin basis, as well as lower margins primarily in our defense and advanced technologies segment.

The cost of product revenue decrease was primarily attributable to higher margins, mainly in our defense and advanced technologies segment, due to a higher mix of our product revenues associated with royalty and licensing agreements versus hardware and other product related revenues.

Selling, general and administrative expenses

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Selling, general and administrative

The $1,175.0 million increase in selling, general and administrative (SG&A) expenses was driven primarily by a net loss of approximately $905.5 million related to satellite impairment, including liabilities associated with the termination of certain subcontractor agreements, net of estimated insurance claim receivables recorded in our satellite service segment, and also reflected acquisition and integration costs associated with the Inmarsat Acquisition.

See Note 1 — The Company and a Summary of Its Significant Accounting Policies — Property, equipment and satellites to our consolidated financial statements for more information.

Additionally, we experienced an increase in support costs of $212.6 million, reflected across all three of our segments, which reflects the inclusion of ten months of support costs relating to the Inmarsat business for the period following the Inmarsat Acquisition.

The increase in SG&A expenses was also driven by $59.5 million in higher selling costs, reflected primarily in our satellite services and government systems segments.

We experienced net losses of $905.5 million related to satellite impairment, including liabilities associated with the termination of certain subcontractor agreements, net of estimated insurance claim receivables in fiscal year 2024, and $169.4 million impairment related to ground network as a result of our exit activities from certain locations in EMEA markets in fiscal year 2025, which were recorded in our communication services segment for both periods.

After excluding these net losses, selling, general and administrative (SG&A) expenses increased by $23.5 million, primarily driven by a $50.2 million increase in support costs and partially offset by a $24.7 million decrease in sales and marketing costs, both of which were 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.

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Independent research and development

The $21.7 million increase in IR&D expenses was mainly the result of a $17.1 million increase in our government systems segment (primarily related to the inclusion of IR&D expenses relating to the Inmarsat business for the period following the Inmarsat Acquisition, tactical satcom radio products and information assurance projects).

The increase in our government systems segment was partially offset by a decrease in IR&D expenses related to advancement of integrated government satellite communications platforms.

This overall increase in IR&D expenses was also due to a $4.6 million increase in our commercial networks segment (primarily related to the inclusion of IR&D expenses relating to the Inmarsat business for the period following the Inmarsat Acquisition, mobile satellite communication systems for commercial airline platforms and antenna systems).

The increase in our commercial networks segment was partially offset by a decrease in IR&D expenses related to next-generation consumer broadband integrated technologies and next-generation satellite payload technologies.

The $8.3 million decrease in IR&D expenses was primarily attributable to a $21.5 million decrease in our communication services segment (primarily related to next-generation consumer broadband integrated networking technologies), partially offset by a $13.3 million increase in our defense and advanced technologies segment (primarily related to other advanced technologies).

Amortization of acquired intangible assets

We amortize our acquired intangible assets from prior acquisitions over their estimated useful lives, which range from two to 12 years.

The $197.4 million increase in amortization of acquired intangible assets in fiscal year 2024 compared to the prior fiscal year was primarily related to the amortization of new intangibles acquired as a result of the Inmarsat Acquisition in May 2023.

The $36.8 million increase in amortization of acquired intangible assets in fiscal year 2025 compared to the prior fiscal year was primarily related to a full year of amortization of acquired intangibles as a result of the Inmarsat Acquisition in May 2023, compared to only ten months in the prior year period.

Expected amortization expense for acquired intangible assets for each of the following periods is as follows:

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Interest income

The $76.7 million increase in interest income for fiscal year 2024 compared to fiscal year 2023 was primarily due to the interest earned on the invested portion of the cash related to proceeds of approximately $1.96 billion received from L3Harris in the Link-16 TDL Sale as well as cash acquired as part of the Inmarsat Acquisition.

The $12.3 million decrease in interest income for fiscal year 2025 compared to fiscal year 2024 was primarily due to the interest income received from a litigation settlement in the prior year period (see Note 15 — Contingencies to our consolidated financial statements) and the lower interest earned as a result of lower average invested balance in combination with lower interest rate.

Interest expense

The $373.6 million increase in interest expense in fiscal year 2024 compared to fiscal year 2023 was primarily the result of the effects of increased interest expense arising from our increased level of indebtedness following the closing of the Inmarsat Acquisition on May 30, 2023.

The increase in interest expense was partially offset by an increase in the amount of interest capitalized during fiscal year 2024 compared to the prior year period.

The $21.5 million increase in interest expense in fiscal year 2025 compared to fiscal year 2024 was primarily the result of the effects of increased interest expense arising from our increased level of indebtedness following the closing of the Inmarsat Acquisition in May 2023 and the refinancing of certain debt at a higher interest rate.

The income tax benefit in fiscal year 2025 primarily reflected the tax benefit from our loss before income taxes, partially offset by a valuation allowance recorded against our U.S.

net deferred tax assets.

The income tax provision in fiscal year 2023 primarily reflected the establishment of a valuation allowance on the deferred tax asset for California R&D tax credits and the expense for tax deficiencies upon settlement of stock-based compensation during the period, partially offset by the benefit of federal R&D tax credits.

The income tax benefit in fiscal year 2024 primarily reflected the tax benefit from our loss before income taxes, partially offset by a valuation allowance recorded against our U.S.

net deferred tax assets.

Our valuation allowance against deferred tax assets increased from $353.6 million at March 31, 2024 to $430.5 million at March 31, 2025.

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Segment Results for Fiscal Year 2025 Compared to Fiscal Year 2024

Satellite services segment

Communication Services Segment

Fiscal Years Ended

(In millions, except percentages)

Segment product revenues

Segment service revenues

Segment product revenues

Total segment revenues

The increase of $931.0 million in our satellite services segment revenues for fiscal year 2024 compared to the prior fiscal year was primarily due to ten months of contribution from the Inmarsat Acquisition in fiscal year 2024 and an increase in revenues from our in-flight services business compared to the prior fiscal year.

The Inmarsat Acquisition contributed approximately $932.3 million of service revenues (nearly half from maritime services), while our in-flight services business service revenue increased $147.0 million as the number of commercial aircraft receiving our in-flight services through IFC systems and passenger air traffic both continued to increase.

The increase in our satellite services segment revenues was partially offset by lower fixed broadband revenues in the United States as we continued to allocate a greater proportion of our bandwidth to our IFC business due to bandwidth constraints.

Our communication services segment revenues increased by $156.9 million due to a $223.8 million increase in service revenues, partially offset by a $66.9 million decrease in product revenues.

The Inmarsat Acquisition contributed approximately $329.6 million to the increase in service revenues in our communication services segment, as a result of a full year of contribution compared to only ten months in the prior year period coupled with higher revenues contributed by Inmarsat in the current year period.

Furthermore, with respect to segment service revenues, the inclusion of a full year of contribution from Inmarsat, the Inmarsat service revenue increase year-over-year and growth in our aviation services were partially offset by an expected decrease in service revenues from fixed services and other as 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.

The IFC service revenue increase was driven primarily by the increase in the number of commercial aircraft and business jets receiving our in-flight services through our IFC systems, with our IFC systems installed and in service on approximately 4,120 commercial aircraft (of which approximately 90 were inactive mostly due to standard aircraft maintenance) and approximately 2,000 business jets as of March 31, 2025, compared to approximately 3,720 commercial aircraft (of which approximately 70 were inactive at quarter end mostly due to standard aircraft maintenance) and approximately 1,800 business jets as of March 31, 2024.

The decrease in segment product revenues was primarily driven by a $56.0 million decrease in aviation products, due to accelerated IFC terminal deliveries in the prior year period, and a $16.4 million decrease in government satcom.

Segment operating profit (loss)

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Percentage of segment revenues

The increase in our satellite services segment operating loss is primarily due to the recording of satellite impairment and related charges, net of estimated insurance claim receivables of approximately $905.5 million in fiscal year 2024, as well as higher SG&A costs of $131.4 million, mostly related to the Inmarsat Acquisition, partially offset by increased earnings contributions of $306.1 million, mainly due to ten months of revenue contribution from the Inmarsat Acquisition in fiscal year 2024 and improved margins from our in-flight services business as it continued to scale.

Commercial networks segment

The decrease in our communication services segment operating loss was primarily due to the recording of satellite impairment and related charges, net of estimated insurance claim receivables of approximately $905.5 million in the prior year period, as described above, and higher earnings contributions of $40.7 million, mainly due to increased service revenues as a result of the Inmarsat Acquisition.

We also experienced a $21.5 million decrease in IR&D expenses (primarily related to next-generation consumer broadband integrated networking technologies).

The decrease in segment operating loss was partially offset by a $169.4 million impairment related to ground network as a result of our exit activities from certain locations in EMEA markets, recorded in the fourth quarter of fiscal year 2025, as well as an increase of $31.5 million in SG&A expenses (reflecting the inclusion of a full year of Inmarsat SG&A costs in the current year period compared to only ten months of Inmarsat SG&A costs in the prior year period).

Defense and advanced technologies segment

Fiscal Years Ended

(In millions, except percentages)

Segment product revenues

Segment service revenues

Segment product revenues

Total segment revenues

Our commercial networks segment revenues increased by $165.2 million, due to a $155.5 million increase in product revenues and a $9.7 million increase in service revenues.

The increase in product revenues was primarily the result of an increase in revenues recognized as a result of settlement payments from the Acacia litigation (see Note 15 — Contingencies to our consolidated financial statements for more information).

The increase in product revenues was also driven by increases of $52.1 million in mobile satellite communication systems products related to higher IFC terminal shipments, $30.5 million in antenna systems products, $20.3 million in satellite payload technology development programs, and $6.6 million in fixed satellite networks.

The increase in service revenues was primarily driven by increases in mobile satellite communication systems services.

Our defense and advanced technologies segment revenues increased by $78.9 million due to an $81.5 million increase in product revenues, partially offset by a $2.7 million decrease in service revenues.

The increase in segment product revenues was primarily due to a $117.5 million increase in tactical networking (mostly related to tactical terrestrial networking), and a $23.4 million increase in information security and cyber defense.

The increase in segment product revenues was partially offset by $58.2 million of lower contributions from certain licensing agreements related to a litigation settlement, in advanced technologies and other in the current year period (see Note 15 — Contingencies to our consolidated financial statements for more information).

The decrease in segment service revenues was primarily due to a $6.6 million decrease in information security and cyber defense, partially offset by a $3.9 million increase in space and mission systems.

Segment operating profit (loss)

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Percentage of segment revenues

The $10.4 million decrease in our commercial networks segment operating loss was driven primarily by an increase in earnings contributions of $43.3 million, partially offset by higher SG&A costs of $28.4 million and an increase of $4.6 million in IR&D expenses (primarily related to the inclusion of IR&D expenses relating to the Inmarsat business for the period following the Inmarsat Acquisition, mobile satellite communication systems for commercial airline platforms and antenna systems, partially offset by a decrease in IR&D expenses related to next-generation consumer broadband integrated technologies and next-generation satellite payload technologies.

Government systems segment

The increase in our defense and advanced technologies segment operating profit was primarily due to higher earnings contributions of $67.6 million, mainly driven by increased revenues and improved margins in tactical networking products, with a higher mix of our tactical terrestrial networking product revenues associated with royalty and licensing agreements versus hardware and other product related revenues, as well as lower SG&A costs of $8.0 million.

The increase in operating profit was partially offset by a $13.3 million increase in IR&D expenses (primarily related to other advanced technologies products).

Fiscal Year 2024 Compared to Fiscal Year 2023

Fiscal Years Ended

(In millions, except percentages)

Service revenues

Product revenues

Total revenues

Our total revenues grew by $1,727.6 million as a result of a $1,402.6 million increase in service revenues and a $325.0 million increase in product revenues, which increases reflected ten months of contribution from the Inmarsat Acquisition in fiscal year 2024.

The service revenue increase was due to increases of $1,362.9 million in our communication services segment and $39.7 million in our defense and advanced technologies segment.

The increase in product revenues was driven primarily by increases of $251.1 million in our defense and advanced technologies segment and $73.9 million in our communication services segment.

Cost of revenues

Fiscal Years Ended

(In millions, except percentages)

Cost of service revenues

Cost of product revenues

Total cost of revenues

Cost of revenues increased by $1,067.3 million due to an increase of $830.4 million in cost of service revenues and $236.9 million in cost of product revenues.

The cost of service revenues increase was primarily due to increased service revenues, mainly in our communication services segment, causing a $961.6 million increase in cost of service revenues on a constant margin basis.

The increase in cost of service revenues was partially offset by higher margins, primarily driven by our communication services segment.

The cost of product revenue increase was primarily due to increased product revenues, mainly from our defense and advanced technologies segment, causing a $230.3 million increase in cost of product revenues on a constant margin basis, prior to the effects of product revenues related to the one-time benefit from a litigation settlement (see Note 15 — Contingencies to our consolidated financial statements for more information).

The increase in cost of product revenues was further increased by lower margins, primarily driven by our communication services segment.

Selling, general and administrative expenses

Fiscal Years Ended

(In millions, except percentages)

Selling, general and administrative

The $1,175.0 million increase in SG&A expenses was driven primarily by a net loss of approximately $905.5 million related to satellite impairment, including liabilities associated with the termination of certain subcontractor agreements, net of estimated insurance claim receivables recorded in our communication services segment, and also reflected acquisition and integration costs associated with the Inmarsat Acquisition.

See Note 1 — The Company and a Summary of Its Significant Accounting Policies — Property, equipment and satellites to our consolidated financial statements for more information.

Additionally, we experienced an increase in support costs of $212.6 million, primarily in our communication services segment, which reflected the inclusion of ten months of support costs relating to the Inmarsat business for the period following the Inmarsat Acquisition.

The increase in SG&A expenses was also driven by $59.5 million in higher selling costs, reflected primarily in our communication services segment.

Independent research and development

Fiscal Years Ended

(In millions, except percentages)

Independent research and development

The $21.7 million increase in IR&D expenses was mainly the result of a $16.3 million increase in our defense and advanced technologies segment (primarily related to tactical satcom radio products and information assurance projects) and a $5.4 million increase in our communication services segment (primarily related to the inclusion of IR&D expenses relating to the Inmarsat business for the period following the Inmarsat Acquisition).

Amortization of acquired intangible assets

The $197.4 million increase in amortization of acquired intangible assets in fiscal year 2024 compared to the prior fiscal year was primarily related to the amortization of acquired intangibles as a result of the Inmarsat Acquisition in May 2023.

Interest income

Interest expense

The increase in interest expense was partially offset by an increase in the amount of interest capitalized during fiscal year 2024 compared to the prior year period.

The income tax benefit in fiscal year 2024 primarily reflected the tax benefit from our loss before income taxes, partially offset by a valuation allowance recorded against our U.S.

net deferred tax assets.

Our valuation allowance against deferred tax assets increased from $150.0 million at March 31, 2023 to $353.6 million at March 31, 2024.

The valuation allowance relates to federal, state, and foreign net operating loss carryforwards, federal and state R&D tax credit carryforwards and foreign tax credit carryforwards.

Segment Results for Fiscal Year 2024 Compared to Fiscal Year 2023

Communication services segment

Fiscal Years Ended

(In millions, except percentages)

Segment service revenues

Segment product revenues

Total segment revenues

Our communication services segment revenues increased by $1,436.8 million due to a $1,362.9 million increase in service revenues and a $73.9 million increase in product revenues.

The increase in segment service revenues was primarily attributable to the Inmarsat Acquisition in May 2023 (which contributed to a $1,363.4 million increase in segment service revenues) and a $160.5 million increase in aviation service revenues (reflecting a continued increase in both the number of commercial aircraft receiving our in-flight services through IFC systems and passenger air traffic), partially offset by an expected decrease in revenues from fixed services and other as we continued to allocate a greater proportion of our bandwidth to our IFC business in preference to our U.S.

services business due to bandwidth constraints.

The increase in segment product revenues was primarily attributable to a $72.5 million contribution from the Inmarsat Acquisition.

Segment operating profit (loss)

Fiscal Years Ended

(In millions, except percentages)

Segment operating profit (loss)

Percentage of segment revenues

The increase in our communication services segment operating loss was primarily due to the recording of satellite impairment and related charges, net of estimated insurance claim receivables of approximately $905.5 million in fiscal year 2024, as described above, as well as a $239.4 million increase in SG&A costs and a $5.4 million increase in IR&D expenses (primarily related to the inclusion of expenses related to the Inmarsat business for the period following the Inmarsat Acquisition).

The increase in our segment operating loss was partially offset by higher earnings contributions of $522.7 million, mainly due to an increase in segment service revenues as a result of the Inmarsat Acquisition and improved margins in our aviation services as they continued to scale.

Defense and advanced technologies segment

Fiscal Years Ended

(In millions, except percentages)

Segment service revenues

Segment product revenues

Total segment revenues

Our government systems segment revenues increased by $631.4 million due to increases of $461.8 million in service revenues, and $169.5 million in product revenues.

The service revenue increase was primarily due to ten months of contribution from the Inmarsat Acquisition in fiscal year 2024 and increases of $15.8 million in government mobile broadband services and $4.4 million in tactical satcom radio services.

The Inmarsat Acquisition contributed approximately $431.1 million of service revenues in our government systems segment following the closing of the acquisition.

The product revenue increase was primarily driven by a $113.1 million increase in cybersecurity and information assurance products, a $50.2 million increase due to the Inmarsat Acquisition, and a $17.1 million increase in tactical satcom radio products.

Our defense and advanced technologies segment revenues increased by $290.8 million due to a $251.1 million increase in product revenues and a $39.7 million increase in service revenues.

The increase in segment product revenues was primarily due to increases of $120.5 million in information security and cyber defense, $57.7 million in advanced technologies and other, mainly related to higher contributions from certain licensing agreements in advanced technologies and other in fiscal year 2024 compared to fiscal year 2023 (see Note 15 — Contingencies to our consolidated financial statements for more information), $50.0 million in space and mission systems, $23.0 million in tactical networking.

The increase in segment service revenues was primarily driven by increases of $18.7 million in space and mission systems, $7.4 million in tactical networking, $7.0 million in advanced technologies and other and $6.5 million in information security and cyber defense.

Segment operating profit (loss)

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Percentage of segment revenues

The $183.0 million increase in our government systems segment operating profit was primarily driven by higher earnings contributions of $310.9 million, primarily due to increased revenues due to ten months of contribution from the Inmarsat Acquisition in fiscal year 2024.

The increase in operating profit was partially offset by a $110.7 million increase in SG&A costs, of which $93.3 million related to the Inmarsat Acquisition, and a $17.1 million increase in IR&D expenses (primarily related to the inclusion of IR&D expenses relating to the Inmarsat business for the period following the Inmarsat Acquisition, tactical satcom radio products and information assurance projects partially offset by a decrease in IR&D expenses related to advancement of integrated government satellite communications platforms).

Fiscal Year 2023 Compared to Fiscal Year 2022

For a discussion of our results of operations for fiscal year 2023 as compared to fiscal year 2022, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

The increase in our defense and advanced technologies segment operating profit was primarily due to higher earnings contributions of $137.5 million, mainly due to an increase in segment product revenues.

The increase in our segment operating profit was partially offset by a $30.1 million increase in SG&A costs and a $16.3 million increase in IR&D expenses (primarily related to tactical satcom radio products and information assurance projects).

Our firm and funded backlog as of March 31, 2025 is reflected in the table below.

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(In millions)

Satellite services segment

Commercial networks segment

Government systems segment

Communication services

Defense and advanced technologies

Funded backlog

Satellite services segment

Commercial networks segment

Government systems segment

Communication services

Defense and advanced technologies

The firm backlog does not include contract options.

As of March 31, 2024, a little less than 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 satellite 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 March 31, 2025, 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 March 31, 2025, our IFC systems were installed and in service on approximately 4,120 commercial aircraft, of which approximately 90 were inactive at fiscal year end (mostly due to standard aircraft maintenance).

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Due to the nature of commercial airline contracts, 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.

Our total new awards which exclude future revenue under recurring consumer commitment arrangements were approximately $4.2 billion for fiscal year 2024 and $3.2 billion (of which $384.4 million was attributable to discontinued operations related to the Link-16 TDL Business) for fiscal year 2023.

Our total new awards which exclude future revenue under recurring consumer commitment arrangements were approximately $4.7 billion for fiscal year 2025 and $4.2 billion for fiscal year 2024.

Backlog is not necessarily indicative of future sales.

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At March 31, 2025, we had $1.6 billion in cash and cash equivalents, $1.2 billion in working capital, no outstanding borrowings and borrowing availability of $593.3 million under the Viasat Revolving Credit Facility and no outstanding borrowings and borrowing availability of $550.0 million under the Inmarsat Revolving Credit Facility.

At March 31, 2023, we had $1.4 billion in cash and cash equivalents and restricted cash, $1.3 billion in working capital, and no outstanding borrowings and borrowing availability of $657.4 million under the Viasat Revolving Credit Facility.

At March 31, 2024, we had $1.9 billion in cash and cash equivalents, $2.2 billion in working capital, no outstanding borrowings and borrowing availability of $591.5 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.

The general cash needs of our satellite services, commercial networks and government systems segments can vary significantly and our future capital requirements will depend upon many factors, including cash required for our satellite projects and any future broadband satellite projects we may engage in, expansion of our IR&D and marketing efforts, and the nature and timing of orders.

The general cash needs of our business can vary significantly and our future capital requirements will depend upon many factors, including cash required for our satellite projects and any future broadband satellite projects we may engage in, expansion of our IR&D and marketing efforts, and the nature and timing of orders.

In particular:

• The cash needs of our satellite services segment tend to be driven by the timing and amount of capital expenditures (e.g., payments under satellite construction and launch contracts and investments in ground infrastructure roll-out), investments in joint ventures, strategic partnering arrangements, network expansion activities, investments to obtain STCs to enable the retrofit installation of our IFC and W-IFE equipment and investments in platforms and software to support our services and entry into new markets, as well as the quality of customer, type of contract and payment terms, and timing and amount of recoveries under satellite insurance claims.

• In our commercial networks segment, cash needs tend to be driven primarily by the type and mix of contracts in backlog, the nature and quality of customers, the timing and amount of investments in IR&D activities (including with respect to next-generation satellite payload technologies) and the payment terms of customers (including whether advance payments are made or customer financing is required).

• In our government systems segment, the primary factors determining cash needs tend to be the type and mix of contracts in backlog (e.g., product or service, development or production) and timing of payments (including restrictions on the timing of cash payments under U.S.

Government procurement regulations).

Other factors affecting the cash needs of our commercial networks and government systems segments include contract

duration and program performance.

• The cash needs of our communication services segment tend to be driven by the timing and amount of capital expenditures (e.g., payments under satellite construction and launch contracts and investments in ground infrastructure roll-out), the timing and amount of investments in IR&D activities (including with respect to next-generation satellite payload technologies), investments in joint ventures, strategic partnering arrangements, network expansion activities, investments to obtain STCs to enable the retrofit installation of our IFC and W-IFE equipment and investments in platforms and software to support our services and entry into new markets, as well as the quality of customer, type of contract and payment terms, and timing and amount of recoveries under satellite insurance claims.

• In our defense and advanced technologies segment, the primary factors determining cash needs tend to be the type and mix of contracts in backlog (e.g., product or service, development or production), timing of payments and payment terms (including restrictions on the timing of cash payments under U.S.

Government procurement regulations), as well as contract duration and program performance.

For example, if a program is performing well and meeting its contractual requirements, then its cash flow requirements are usually lower.

Additionally, we will continue to evaluate other possible acquisitions of, or investments in complementary businesses, products and technologies which may require the use of cash or additional financing.

As a result of the divestiture of the Link-16 TDL Business, we have taken measures to mitigate the impact of stranded costs and to right-size our remaining businesses by reducing discretionary spending and by undertaking cost-reduction measures, including reducing our real estate footprint and workforce, which measures resulted in approximately $40 million of expenses during the fourth quarter of fiscal year 2023, primarily recorded in our SG&A.

As a result of the divestiture of the Link-16 TDL Business, we took measures to mitigate the impact of stranded costs and to right-size our remaining businesses by reducing discretionary spending and by undertaking cost-reduction measures, including reducing our real estate footprint and workforce, which measures resulted in approximately $40 million of expenses during the fourth quarter of fiscal year 2023, primarily recorded in our SG&A.

In November 2023, we announced an important milestone in our integration program following our Inmarsat Acquisition.

As part of our ongoing strategy to streamline operations and better serve our growing customer base, we completed our work on the rationalization of roles in our global business, which is intended to achieve both operational and cost efficiencies.

As part of our ongoing strategy to streamline operations and better serve our growing customer base, we completed our work on the rationalization of roles in our global business, which was intended to achieve both operational and cost efficiencies.

As part of the role rationalization, we reduced our global workforce by approximately 800 positions, or approximately 10%, and recorded total costs (primarily related to employee severance payments, benefits and related termination costs) of approximately $48 million during fiscal year 2024.

These one-time costs were recorded within operating expenses in our consolidated statements of operations across all three of our segments, with insignificant amounts remaining to be incurred and paid.

These one-time costs were recorded within operating expenses in our consolidated statements of operations and comprehensive income (loss) in both of our segments.

To further enhance our liquidity position or to finance the construction and launch of any future satellites, acquisitions, strategic partnering arrangements, joint ventures or other business investment initiatives, we may obtain additional financing, which could consist of debt, convertible debt or equity financing from public and/or private credit and capital markets.

From time to time, we file universal shelf registration statements with the SEC for the future sale of an unlimited amount of common stock, preferred stock, debt securities, depositary shares and warrants, which securities may be offered from time to time, separately or together, directly by us, by selling security holders, or through underwriters, dealers or agents at amounts, prices, interest rates and other terms to be determined at the time of the offering.

Additionally, we consider strategic divestitures from time to time, such as the Link-16 TDL Sale that was completed in January 2023 for approximately $1.96 billion in cash, subject to adjustments.

Additionally, we consider strategic divestitures from time to time, such as the Link-16 TDL Sale that was completed in January 2023 for approximately $1.96 billion in cash, subject to adjustments, as well as divestitures of non-core assets or businesses, such as the divestiture of our energy services system integration business in December 2024.

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.

During fiscal year 2025, we repurchased $257.5 million in aggregate principal amount of Viasat’s 5.625% Senior Notes due 2025 (the 2025 Notes)) in open market transactions and redeemed the Inmarsat 2026 Notes in full.

As a result, in fiscal year 2025, we recorded a net loss on extinguishment of debt of approximately $99.8 million in (loss) gain on extinguishment of debt, net, mainly related to the redemption of the Inmarsat 2026 Notes (attributable to the related unamortized fair value adjustment made in purchase accounting).

Subsequent to fiscal year end, we redeemed all remaining 2025 Notes in full.

Although we can give no assurances concerning our future liquidity, we believe that we have adequate sources of funding to meet our anticipated operating requirements for the next 12 months, which include, but are not limited to, cash on hand, borrowing capacity, and cash expected to be provided by operating activities.

Cash provided by operating activities for fiscal year 2025 was $908.2 million compared to $688.2 million for fiscal year 2024.

This $320.3 million increase was driven by our operating results (net income (loss) adjusted for depreciation, amortization and other non-cash charges) which resulted in $648.1 million of higher cash provided by operating activities year-over-year, partially offset by a $327.7 million year-over-year increase in cash used to fund net operating assets.

The increase in cash used to fund net operating assets during fiscal year 2024 when compared to the prior year period was primarily due to timing of payments related to our accrued liabilities and accounts payables, and the timing of deferred revenue recognized under certain long-term contracts acquired through the Inmarsat Acquisition in our satellite services segment.

Cash used in investing activities for fiscal year 2024 was $1.3 billion compared to cash provided by investing activities for fiscal year 2023 of $768.0 million.

Cash used in investing activities for fiscal year 2024 reflects approximately $719 million in cash (net of cash acquired) used for the Inmarsat Acquisition in the first quarter of fiscal year 2024 and cash used for Inmarsat capital expenditures following the date of acquisition, partially offset by $508.6 million of cash receipts related to satellite insurance claim proceeds received during fiscal year 2024.

Cash provided by investing activities for fiscal year 2023 reflected $1.9 billion recorded as cash proceeds in our consolidated statement of cash flows for fiscal year 2023 received from the Link-16 TDL Sale in the fourth quarter of fiscal year 2023.

The remaining cash used for capital expenditures (excluding cash used for Inmarsat capital expenditures following the date of acquisition) remained relatively flat year-over-year.

Cash provided by financing activities for fiscal year 2024 was $1.1 billion compared to cash used in financing activities of $66.1 million for fiscal year 2023.

Cash provided by financing activities for fiscal year 2024 was primarily comprised of proceeds from debt borrowings of approximately $1.3 billion incurred in connection with the Inmarsat Acquisition, partially offset by approximately $139 million in debt repayments.

Cash used in financing activities for fiscal year 2023 was primarily comprised of debt repayments of $576.5 million and a payment of $30.0 million by our majority-owned subsidiary, TrellisWare Technologies, Inc., to repurchase shares of its common stock from its stockholders in the second quarter of fiscal year 2023 (see Note 1 — The Company and a Summary of Its Significant Accounting Policies — Noncontrolling interests to our consolidated financial statements for further information), partially offset by proceeds from debt borrowings of $540.0 million.

This $220.0 million increase was driven by a $211.7 million year-over-year decrease in cash used to fund net operating assets and our operating results (net income (loss) adjusted for depreciation, amortization and other non-cash charges) which resulted in $8.3 million of higher cash provided by operating activities year-over-year.

The decrease in cash used to fund net operating assets during fiscal year 2025 when compared to the prior year period was primarily due to timing of payments related to our income tax payables, accrued liabilities and accounts payable.

Cash paid for income taxes, net, during fiscal years 2025 and 2024 was $196.3 million and $200.6 million, respectively.

Cash paid for interest (net of amounts capitalized) during fiscal years 2025 and 2024 was $390.0 million and $229.0 million, respectively.

Cash used in investing activities for fiscal year 2025 was $758.4 million compared to $1.3 billion for fiscal year 2024.

This $532.8 million decrease in cash used in investing activities year-over-year reflected a decrease of $509.2 million in cash used for capital expenditures as well as the $342.6 million in cash (net of cash acquired) used for the Inmarsat Acquisition in fiscal year 2024, partially offset by a $257.1 million decrease in cash receipts related to satellite insurance claim proceeds year-over-year.

Cash used in financing activities for fiscal year 2025 was $442.6 million compared to cash provided by financing activities of $1.1 billion for fiscal year 2024.

Cash used in financing activities in fiscal year 2025 was primarily comprised of debt repayments of $2.4 billion, partially offset by proceeds from debt borrowings of $2.0 billion (which primarily related to the repurchase and refinancing of the Inmarsat 2026 Notes).

Cash provided by financing activities in fiscal year 2024 was primarily comprised of proceeds from debt borrowings of approximately $1.7 billion primarily incurred in connection with the Inmarsat Acquisition, partially offset by debt repayments of $567.0 million.

See Note 8 — Senior Notes and Other Long-Term Debt for further information.

Capital Expenditures and IR&D Investments

Capital expenditures in fiscal year 2024 of $1.5 billion were 32% higher than fiscal year 2023, primarily due to the inclusion of Inmarsat's expenditures for the period following the closing of the Inmarsat Acquisition.

Our total capital expenditures in fiscal year 2025 are expected to decline compared to fiscal year 2024 as the majority of the capital expenditures related to the ViaSat-3 constellation have been completed.

We remain committed to meaningfully reducing aggregate capital expenditures as part of our Inmarsat integration strategy and as satellites currently under construction are completed.

Capital expenditures in fiscal year 2025 of $1.0 billion were 33% lower than fiscal year 2024, reflecting efforts to continue to optimize our capital expenditures as we integrate our businesses and prioritize our investments.

Our total capital expenditures in fiscal year 2026 may be slightly higher compared to fiscal year 2025, due to timing, however we expect to continue to manage investments in our business as a whole and remain committed to meaningfully reducing aggregate capital expenditures as part of our Inmarsat integration strategy and as satellites currently under construction are completed.

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Long-Term Debt

As of March 31, 2024, the aggregate principal amount of our total outstanding indebtedness was $7.5 billion, which was comprised of (1) $700.0 million in aggregate principal amount of Viasat's 5.625% Senior Notes due 2025 (the 2025 Notes), $600.0 million in aggregate principal amount of Viasat's 5.625% Senior Secured Notes due 2027 (the 2027 Notes), $400.0 million in aggregate principal amount of Viasat's 6.500% Senior Notes due 2028 (the 2028 Notes), $733.4 million in aggregate principal amount of Viasat's 7.500% Senior Secured Notes due 2031 (the 2031 Notes) and $2.08 billion in aggregate principal amount of Inmarsat's 6.750% Senior Secured Notes due 2026 (the Inmarsat 2026 Notes), (2) $687.8 million in principal amount of outstanding borrowings under Viasat's $700.0 million senior secured term loan facility (the 2022 Term Loan Facility), $613.6 million in principal amount of outstanding borrowings under Viasat's $616.7 million senior secured term loan facility (the 2023 Term Loan Facility), $1.6 billion in principal amount of outstanding borrowings under Inmarsat's $1.6 billion senior secured term loan facilities (the Inmarsat Term Loan Facilities and, together with the Inmarsat Revolving Credit Facility, the Inmarsat Secured Credit Facilities), no outstanding borrowings under our Revolving Credit Facilities, and $39.3 million in principal amount of outstanding borrowings under the Ex-Im Credit Facility, and (3) $26.8 million of finance lease obligations.

As of March 31, 2025, the aggregate principal amount of our total outstanding indebtedness was $7.2 billion, which was comprised of (1) $442.6 million in aggregate principal amount of the 2025 Notes (which were redeemed in full subsequent to fiscal year end), $600.0 million in aggregate principal amount of Viasat's 5.625% Senior Secured Notes due 2027 (the 2027 Notes), $400.0 million in aggregate principal amount of Viasat's 6.500% Senior Notes due 2028 (the 2028 Notes), $1.975 billion in aggregate principal amount of Inmarsat's 9.000% Senior Secured Notes due 2029 (the Inmarsat 2029 Notes) and $733.4 million in aggregate principal amount of Viasat's 7.500% Senior Notes due 2031 (the 2031 Notes), (2) $680.8 million in principal amount of outstanding borrowings under Viasat's $700.0 million senior secured term loan facility (the 2022 Term Loan Facility), $607.5 million in principal amount of outstanding borrowings under Viasat's $616.7 million senior secured term loan facility (the 2023 Term Loan Facility), $1.6 billion in principal amount of outstanding borrowings under Inmarsat's $1.6 billion senior secured term loan facilities (the Inmarsat Term Loan Facilities), no outstanding borrowings under our Revolving Credit Facilities, and $19.7 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) $158.5 million of finance lease obligations.

For information regarding our outstanding indebtedness, refer to Note 8 — Senior Notes and Other Long-Term Debt to our consolidated financial statements.

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Senior notes and other long-term debt (1)(2)

Purchase commitments including satellite-

related agreements

(1) To the extent that the interest rate on any long-term debt is variable, amounts reflected represent estimated interest payments on the applicable current outstanding balance based on the interest rate at March 31, 2024 until the applicable maturity date, net of interest rate cap contracts (maturing in February 2025) set up to hedge the variable interest rates under the Inmarsat Term Loan Facilities.

The interest rate cap contracts provide protection from Compound SOFR rates over 2% and covered the total nominal amount of the Inmarsat Term Loan Facilities of $1.6 billion.

Purchase commitments including satellite-related agreements

(2) Includes the 2025 Notes, which were redeemed in full subsequent to fiscal year end.

We purchase components from a variety of suppliers and use several subcontractors and contract manufacturers to provide design and manufacturing services for our products.

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We may also cancel, reschedule or adjust our requirements based on business needs after firm orders are placed at a cost, which may be material.

Our consolidated balance sheets included $2.5 billion and $218.5 million of “other liabilities” as of March 31, 2024 and March 31, 2023, respectively, which primarily consisted of deferred income taxes and the long-term portion of deferred revenues.

Our consolidated balance sheets included $2.2 billion and $2.5 billion of “other liabilities” as of March 31, 2025 and March 31, 2024, respectively, which primarily consisted of deferred income taxes and the long-term portion of deferred revenues.

These remaining liabilities have been excluded from the above table as the timing and/or the amount of any cash payment is uncertain.

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Interest Rate Risk

Our financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and short-term and long-term obligations (including the Credit Facilities and the Notes), and interest rate cap contracts.

We consider investments in highly liquid instruments purchased with a remaining maturity of three months or less at the date of purchase to be cash equivalents.

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To minimize this risk, we maintain a significant amount of our cash balance in money market accounts, with a significant portion held in U.S.

government-backed qualified money-market securities.

government-backed securities and treasuries.

In general, money market accounts are not subject to interest rate risk because the interest paid on such funds fluctuates with the prevailing interest rate.

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As of March 31, 2025, we had no outstanding borrowings under our Revolving Credit Facilities.

Accordingly, assuming the outstanding balance under the 2022 Term Loan Facility, the 2023 Term Loan Facility and the Inmarsat Term Loan Facilities remained constant over a year and we continued to have no outstanding borrowings under the Revolving Credit Facilities, a 10% increase in the interest rates would increase interest incurred, prior to effects of capitalized interest but taking into account Inmarsat's interest rate cap contracts with respect to the Inmarsat Term Loan Facilities, by approximately $13.0 million over a 12-month period.

We have entered into interest rate cap contracts to hedge the variable interest rates under the Inmarsat Term Loan Facilities.

The interest rate cap contracts provide protection from Compound SOFR rates over 2% and covered the total nominal amount of the Inmarsat Term Loan Facilities of $1.6 billion.

As of March 31, 2024, a 100 basis point increase or decrease in interest rates would increase or decrease the carrying and fair values of the interest rate cap contract by approximately $14.6 million.

Accordingly, assuming the outstanding balance under the 2022 Term Loan Facility, the 2023 Term Loan Facility and the Inmarsat Term Loan Facilities remained constant over a year and we continued to have no outstanding borrowings under the Revolving Credit Facilities, a 10% increase in the interest rates would increase interest incurred, prior to effects of capitalized interest, by approximately $25.5 million over a 12-month period.

Foreign Exchange Risk

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However, as our international business is conducted in a variety of foreign currencies, we are exposed to fluctuations in foreign currency exchange rates.

A five percent variance in foreign currencies in which our international business is conducted would change our income (loss) before income taxes by an insignificant amount and $1.8 million for the fiscal years ended March 31, 2024 and 2023, respectively.

A five percent variance in foreign currencies in which our international business is conducted would change our income (loss) before income taxes by an insignificant amount for each of the fiscal years ended March 31, 2025 and 2024.

Our objective in managing our exposure to foreign currency risk is to reduce earnings and cash flow volatility associated with foreign exchange rate fluctuations.

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Income (loss)

* Certain prior period quarterly amounts have been adjusted by an insignificant amount from the amounts previously reported in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, due to the determination that certain contracts could not be novated in connection with the closing of the Link-16 TDL Sale.

In the second quarter of fiscal year 2024 and second quarter of fiscal year 2023, we recorded a one-time benefit from a litigation settlement of $95.3 million and $55.8 million, respectively, in revenues.

See Note 15 — Contingencies to our consolidated financial statements for more information.

In the fourth quarter of fiscal year 2025, we recorded $169.4 million in impairment charges and other liabilities related to the exit from certain locations in EMEA markets, in selling, general and administrative expenses (see Note 1 — The Company and a Summary of Its Significant Accounting Policies to our consolidated financial statements for more information).

In the second quarter of fiscal year 2024, we recorded a one-time benefit from a litigation settlement of $95.3 million in revenues (see Note 15 — Contingencies to our consolidated financial statements for more information).

Additionally, in the second quarter of fiscal year 2024, we recorded a reduction to the carrying value of satellites under construction of approximately $1.67 billion, which was partially offset by total insurance claim receivables of approximately $770.0 million, resulting in a net loss of approximately $905.5 million recorded in selling, general and administrative expenses (see Note 1 — The Company and a Summary of Its Significant Accounting Policies to our consolidated financial statements for more information).

The summarized quarterly data above includes the operating results of Inmarsat from the date of acquisition on May 30, 2023.

Therefore the first quarter of fiscal year 2024 only includes one month of Inmarsat's operating results, whereas the remaining quarters of fiscal year 2024 include a full quarter of Inmarsat's operating results.

On January 3, 2023, we completed the Link-16 TDL Sale, and as a result the fourth quarter of fiscal year 2023 included the impact of the gain of approximately $1.66 billion (net of costs to sell of $40.8 million) within net income (loss) from discontinued operations, net of tax on the consolidated statements of operations and comprehensive income (loss) for fiscal year 2023.

Therefore, the first quarter of fiscal year 2024 only included one month of Inmarsat's operating results, whereas the remaining quarters of fiscal year 2024 included a full quarter of Inmarsat's operating results.

Basic and diluted net income (loss) per share are computed independently for each of the quarters presented.

Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted net income per share.

Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted net income (loss) per share.

CHANGES IN AND DISAGREEMENTS WITH ACCOU NTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis