Viasat — Key Risks
Crushing Debt Load After the Inmarsat Acquisition
As of March 31, 2026, Viasat carries $6.6 billion in total outstanding debt. This enormous debt burden means a large share of the company's cash flows must go toward interest and principal payments rather than investing in new satellites, technology, or growth. The company has previously violated covenants (the rules attached to its loans) and received waivers — there's no guarantee future violations would be forgiven, which could trigger demands for immediate full repayment.
Satellites Can Fail, and Insurance Won't Cover Everything
Viasat's business depends entirely on its satellites functioning in orbit, a harsh and unforgiving environment. Satellite anomalies (malfunctions) can shorten a satellite's life, reduce its capacity, or knock out service entirely — and insurance policies explicitly exclude lost profits, business interruptions, and fixed costs. If a satellite fails, replacement capacity may not be available on acceptable terms or timeline.
New Satellite Construction and Launches Carry Major Risks
Building and launching satellites is extraordinarily complex, and Viasat has already experienced construction issues that reduced output capabilities on past satellites. Delays push back the revenue these assets generate, and a failed launch means starting over — potentially years of delay — while the company still carries the debt incurred to build the satellite. The time from design to launch can exceed four years.
LEO Competition Is Disrupting Viasat's Core Business
The traditional GEO (geostationary) satellite broadband market Viasat built its business on is being disrupted by LEO (low-Earth orbit) services like Starlink, which offer lower latency and increasingly competitive speeds. Customers are migrating, and Viasat's response requires massive capital investment in next-generation satellites — investment that must be financed on top of already heavy existing debt.
Heavy Reliance on U.S. Government Contracts
U.S. Government revenue represents a significant share of total revenues, and those contracts can be terminated at the government's convenience with little or no penalty. Budget cuts, policy shifts, funding gaps (such as continuing resolutions), or a failed audit could reduce this revenue significantly. Viasat is also subject to strict government auditing standards, and an adverse finding could result in contract termination, fines, or even debarment from future bidding.
Top Five Contracts Represent a Concentrated Revenue Base
Viasat's five largest contracts generated approximately 19% of total revenues in fiscal year 2026. Losing even one of these relationships — whether through customer financial difficulties, contract non-renewal, or Viasat's own failure to meet performance milestones — could materially harm results.
Fixed-Price Contract Losses Are a Real and Recurring Risk
Approximately 11% of revenues come from development contracts, and the vast majority of all revenues come from fixed-price contracts, where Viasat bears the full financial risk of cost overruns. The company acknowledges it has experienced significant cost overruns and losses on such contracts in the past, and the complexity of the technologies involved makes future overruns a genuine ongoing risk.
Significant Exposure to Export Controls and International Compliance
With 32% of fiscal year 2026 revenues from international sales, Viasat must navigate a complex web of U.S. export laws (including ITAR for satellite hardware), sanctions rules, and anti-bribery laws across dozens of jurisdictions. A violation — even by a third-party distributor — can result in criminal penalties, loss of export licenses, and debarment, any of which could meaningfully impair the business.