Hello, and welcome to Viasat's fourth quarter and fiscal year 2020 earnings conference call. Your host for today is Rick Baldridge, President and CEO. Sir, you may proceed. Okay. Thanks for joining us today. Just wanna point out that we released our shareholder letter, shortly after market close, and it's available on our website. We'll be referring to it throughout the call. Joining me today on the call, Mark Dankberg, our Executive Chairman, our CFO, Shawn Duffy, Robert Blair, our General Counsel, and Paul Froelich, Corporate Development, Peter Lopez from Investor Relations. Today's call, we'll just go through a few brief opening remarks and follow that by Q&A. Before we get started, let's have Robert provide our safe harbor. Thanks, Rick. As you know, this discussion will contain forward-looking statements. This is a reminder that factors could cause actual results to differ materially. Additional information concerning these factors is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q. Copies are available from the SEC or from our website. Back to you, Rick. Okay, thanks, Robert. Fiscal 2022 was a great year for Viasat. We delivered the financial results that we had targeted and previously communicated to our investors, and we continued to execute on a number of very strategic and operational fronts. For the year, we achieved record revenue of $2.8 billion and record adjusted EBITDA of $611 million. For revenue, this was a 24% year-over-year increase, and for adjusted EBITDA, it was a 15% increase, which is consistent with our guidance of double-digit revenue growth and mid-teen EBITDA growth. We hit our goals for the year. While we outperformed in the first three quarters, we knew Q4 would be sequentially softer based on the factors we communicated in our last call. We had increased ground network costs for the upcoming ViaSat-3 Americas satellite, increased R&D investments, and changes in product mix, which were exacerbated by certain government secure product certification delays, as we described last quarter, as well as some sudden, but since resolved supply chain issues that impacted certain government product shipments. I'll touch on briefly on Satellite Services. As anticipated, we're seeing very good growth in, to date, our IFC business, both aircraft returning to service and additional aircraft from new and existing customers. We also had contributions from the recent RigNet and EBI acquisitions. Fixed Broadband growth was a little weaker as we managed our limited bandwidth supply in the U.S. in support of high-value data plans and growing IFC demand. At IFC, we're adding new customers and increasing the telcos with existing customers. We're very proud of our agreement with Southwest Airlines, which was announced subsequent to the end of the quarter. Although we continue to be hampered by bandwidth constraints in the U.S., which has resulted in continued subscriber decline, we're making steady progress in Fixed Broadband elsewhere. For example, just recently, we surpassed the 50,000 subscriber mark in Brazil after only having nationwide commercial service there for about 18 months. Lending confidence in our ability to successfully execute retail service launches in some of the new international markets we're going after. The letter does a good job covering our government and commercial segments, so let's move on to the ViaSat-3 constellation, where we've cleared several large risk reduction milestones in the last several months. The ViaSat-3 Americas satellite has completed vacuum and extreme temperature testing at Boeing, and we were pleased to see payload performance better than expected during testing. We should be complete with the vacuum chamber by the end of today, allowing us to move the spacecraft out and proceed with the rest of the integration effort. Alpha testing on the ViaSat-3 ground network has gone very well, and we're on track to have sufficient infrastructure in place to enable commercial services, which we were targeting for early in our fiscal fourth quarter, within a week or so of where we're planning last quarter. ViaSat-3 EMEA payload modules is now complete and is undergoing final testing at our Tempe, Arizona facility for shipment to Boeing, which is expected to occur in sometime this quarter. Based on our experience on the Americas satellite, this second payload was completed much faster with a more predictable schedule. The same is holding true for the third satellite, the Asia-Pacific satellite. Turning to Inmarsat, we're continuing to advance on various transaction milestones, and since the last quarterly update, we've completed an agreement with the U.K. government for certain economic undertakings, which demonstrates our long-term commitment to the U.K. We filed a definitive proxy statement with the SEC and set a date of June 21 for a special meeting of our shareholders regarding the transaction. Inmarsat just reported another quarter of solid financial operational results, which are highlighted on page 10 of the shareholder letter, and you can go to their website too, I believe. We're targeting to complete the transaction by the end of this calendar year, with the antitrust approval processes in the U.S. and U.K. being the pacing items, just because of the nature of their process. In March, we, Viasat, completed a term loan for $700 million of financing, which was used to pay down our revolver, with the remainder of the cash to be used to continue funding the ViaSat-3 constellation. I'll remind everyone that we have all the remaining transaction financing in place. This financing was fully committed at the time we signed our purchase agreements last November, and includes provisions that limit the impact of the current debt market volatility might have had on our ability to close the transaction or achieving our financial objectives post-closing. Turning to our outlook. The company-wide outlook remains strong. We continue to believe we'll achieve our standalone financial targets, including our average annual adjusted EBITDA growth in the mid-teens for FY 2023 relative to FY 2022, just as we achieved them for our last fiscal year. The quarterly revenue and EBITDA trajectory for this year, our FY 2023, will be weighted towards the second half as we ramp up commercial airlines in service over the course of the year to an anticipated 2,400 tails approximately. As we begin commercial services on ViaSat-3 in our fourth fiscal quarter, in our Q4, normal seasonality and near-term certifications and supply chain issues we described in our letter. Longer term, we also continue to believe that we're on track to achieve more than double-digit adjusted EBITDA by FY 2025 relative to FY 2020 on a standalone basis. Of course, we're very excited about the upcoming ViaSat-3 launch and Inmarsat acquisition. Our strong operational financial performance demonstrates that our teams continue to focus on solid day-to-day execution. I think the same can be said for Inmarsat based on their results. With that, let's take your questions. Thank you. Ladies and gentlemen, to ask the question, you will need to press star then one on your telephone. To withdraw your question, press the pound key. Again, that's star one to ask the question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Landon Park with Morgan Stanley. Your line is open. Great. Thanks for taking the questions, everyone. I'm wondering if you can just, you know, confirm in terms of the actual launch timing for the ViaSat-3 satellite versus the late summer window that you had given last quarter? Beyond that, I'm wondering if you can, you know, delve a little bit more into some of the mobility markets, maybe what you're seeing out of the RigNet now that we're seeing some better demand in the oil and gas industry, and maybe touch on your ambitions within the business aviation market and where you're at with your ESA development. Okay. On the ViaSat-3 schedule, it has slipped weeks since our last call. Right now, I think we were anticipating being in service by the end of the year, and we're early into our fiscal fourth quarter, so in the January timeframe is what we're expecting now. It's been weeks. You know, I think what we have is a launch window, and so where we fall within that window, you know, could move it a little bit to the left or to the right. But you know, that's what we expect. We've been able to mitigate a little bit of the fiscal slip of the delivery for launch just with the build-out of our ground network and ongoing testing. We're doing some of the testing that we would have normally done on orbit. We're being able to do that with some of our existing satellites on our ground network. Trying to mitigate a little bit of the impact, and that's kinda how we get to a early next year service launch. That's that part. I'll talk about RigNet much more. I wanna talk about the last part. The oil and gas part in RigNet. When we acquired RigNet, the real prize here isn't really large growth in oil and gas side. It's really being able to substitute bandwidth, which we really do need the ViaSat-3 satellites for how they were doing business and grow the types of offerings we can make in their market segments. Some of that growth really depends on us getting this constellation up. What we've been doing in the meantime is integration efforts with RigNet. Inmarsat helps with that as well, with some of the Inmarsat assets that they have because RigNet is a customer of theirs as well. Being able to do that integration is really what drives future value with the RigNet businesses. Can you size that in any way? Well, yeah, I think it's kinda like. It's not really what you don't wanna do in these markets is go in and replace what they're currently doing with something that's cheaper. Instead, what you wanna enable is a lot more services that they would do if they had the bandwidth. You know, on a per site basis, it could be multiples from what they have, as opposed to 10% or 20% more. Okay. Yeah. In terms of the synergy number and timing? On RigNet? Correct. Correct. Most of the synergies on RigNet that we've achieved, the cost synergies that we had laid out in our initial objective. Most of the synergies with RigNet are in the ability to stop paying ongoing fees to other satellite operators and replace that with our own capacity. Those will occur as we bring on these ViaSat-3 satellites. Okay. Business jets. Yeah, business jets. You know, that's been growing for us, been growing for Inmarsat as well. The main things, you know, that we've been focused on are, you know, working on with OEMs because OEMs are pretty straightforward way to get built onto aircraft and create service opportunities. Then also in working with fleet operators, again, that's a good way to grow the business. Then we're also, you know, increasing the ways in which we work with distributors to make the services more attractive. You know, the biggest thing on business jets is getting more coverage with ViaSat-2 and having European coverage. That unlocked a fair amount of the market for us. Now as ViaSat-3 comes up with the Inmarsat merger, the combination of kind of their coverage and our capacity looks really, you know, promising in the market. Your ESA development? Oh, yeah. From an ESA perspective, you know, we already did a flight demo on that. We did it on a business jet. It was the first one. What we're working on now is converting that into commercial products for both kind of one of the main focus for us is our commercial market, is having a follow-on product there that's kind of future-proof in multi-orbit. We're also going to be able to apply the same technologies ultimately into the business jet and the smaller jet market as well, smaller commercial jet or regional markets as well. The main thing that we're doing right now is productizing what we demonstrated earlier. Great. Thanks very much, Mark. Is also directly applicable to our land mobile markets. Yeah. in the future. A lot of common elements to that product. Okay. Just some really quick ones for Shawn. I'm just wondering if you could provide some more details in terms of the types of rates that you're locked into on the financing and maybe just anything you can say on the CapEx outlook for the fiscal year. Yeah, sure. With respect to the rate, you know, we're not going to give all the details of the underlying agreements. The way I think you can think about it is because these were kind of U.K. style deals overall, the financing that we put in place, it was committed, as Rick mentioned. The rates and the major terms were kind of conditioned to the market back in November. That gives you a little bit of a kind of a framework with respect to the kind of the protections that are built in there. That gives us that upper limit benefit, you know, relative to the outlook. Then, oh, sorry, you asked about CapEx as well. I think you can see that our CapEx for this year was a little bit lighter than what we were targeting. Next year, you can think of it as we're getting into the big part of the program, both this year and next year. I think next year, thinking about around $350 or so per quarter is a good range. Might be a little thicker in the last couple of quarters, but that's a good range. Great. Thanks, Shawn. Thanks, everyone. Yeah. Thanks, Will. Thank you. Our next question comes from the line of Ric Prentiss with Raymond James. Your line is open. Hey, everyone. This is Brent on for Rick. Good afternoon. A few questions. First, I appreciate the updates on the ViaSat-3 timeline. I'm also wondering what are the current expected timelines for launch as well as in-service for the EMEA and APAC satellites? Well, we've said for a while that they're kind of six months behind the other one, but I'd say the second one hasn't slipped when we've had these last weeks slip. It could be coming in just inside that. By the end of calendar 2023, our third launch is right around that year-end mark. I mean, it's possible it slips into early 2024, calendar 2024, or stays in calendar 2023. Kind of on that schedule. Could be a little earlier. Okay. That's helpful. You talked about increasing spending as you get ready for that on the OpEx side. How much did you spend in 4Q really specific to the ground systems and ViaSat-3 on the OpEx side? What's the magnitude and pacing of OpEx related to ViaSat-3 preparation from here forward? This is Shawn. In Q4, the number was, say, 7 million-8 million, and that's going to keep increasing sequentially, you know, quarter to quarter to next year. You can think of next year full year, probably across the fleet, somewhere around 60. Great. Got it. Then, you also talked about R&D spending and some exciting projects on the government and mobility side, and mentioned a few projects there. Which of these projects should we be most excited about as far as near-term, midterm, and long-term opportunities? Well, probably the ones with the closest timelines are gonna be the government ones, because they represent opportunities to get integrated onto new types of aircraft or to extend our, you know, basically to extend our reach within with certain types of existing customers. But the kind of the long-term ones are really both air mobility and land mobility are the kind of the two big ones. The air mobile stuff we think, you know, the market is still pretty lightly penetrated. You know, there's 30,000 commercial aircraft going to 40,000. We think the commercial air mobility markets is still a really, really exciting one. Going into the general aviation markets right now, we're kind of the largest jets, but being able to move down to the mid-tier and even lower jets, that's a really exciting market. The one that we're just getting into, and where part of some of our investments are going, are in land mobile as well. Land mobile is, you know. We can see a lot of similarities to the air mobility markets. A lot of them are driven by people and passengers, but there's also some really interesting kind of broadband IoT markets. That one, I think, is. That's gonna be, again, a good market. What we're really looking to do is to make sure that we have presence in all those mobility markets that we've outlined in our total addressable market, the things that add up to that $1.5 trillion. I think it's, you know, one of the things that's that we see as really important is serving a broad range of those markets, driving bandwidth consumption, and that will getting the revenue from that enables us to keep moving down the learning curve on the bandwidth productivity. That's what's made this possible so far. I think it's kind of that all those aggregate markets. Yeah. That's helpful. Last one for me on the Inmarsat timeline. What do you think would cause you to exceed or miss the timeline of year-end, and what's your biggest concerns right now? It really is just the process on the antitrust reviews. In the U.K., it's the CMA, and here, it's the DOJ. You know, we're producing tens of thousands of documents for those reviews. It's just, you know, it really just is a process. We don't see any issues with that. It's been going quite well, the discussions have been. You know, we went into this thing kind of understanding what, you know, all the questions would be. We think we've got a very good case. They're two totally different processes, so they work differently. We've made very good progress. The undertakings is an example in the U.K. That, we've made really good progress in multiple countries for, you know, working through the hurdles and. We don't really see anything, anticipate anything negative. Haven't seen any indication of that. It's really just, there's a way in which they go about your submittals and then questions and your responses and their review cycles. If that goes slower, that could push us. If one request goes into another request, then that's another delay. That's what guides us. We still feel good about the 9-18-month guideline that we gave out. Okay. Thanks, everyone. Stay well. Thank you. Our next question comes from the line of Ryan Koontz with Needham & Company. Your line is open. Hi. Thanks for the question. Most of my questions have been answered, but I wonder if you could give us a ballpark on, you know, the magnitude of the slippage on revenue in the government systems side from these NSA approvals and such. It'd be helpful. Thank you. Yeah. Hey, I can try to give you at least a feel for what we're thinking. I mean, one of the things I think it's really important to keep in mind, we talked about last quarter that we saw these pressures coming Q4 and into the early year, and I think that's exactly what we're seeing. The other thing is, you know, Q1 is seasonally our lightest quarter in that government segment. You gotta keep both of those things in play. I think that's gonna be, when you think about the sequential performance, that will be the highlight. Q, just last time, we talked about these delays in certifications moving out of. We actually had expected them in our December quarter, and then we said it wasn't gonna happen in Q4, happen in Q1 or Q2 of our FY 2023, so June or September. We don't see it occurring in Q1. We think it's gonna move into the September quarter, which means you won't start really getting deliveries of those products till Q3 and Q4. We've said that we haven't seen any reduction in demand. These are really just getting this through the certification process so they can be delivered. We don't see an overall reduction in terms of what the value of those are gonna be. It's just delayed. Got it. We also had- Thanks for that comment. We also had some part shortages that have occurred in the last couple of quarters of those products that we're resolving, that have been resolved for right now. That should start shipping. Like Shawn said, we expect another sequentially down quarter in our June quarter versus the March quarter overall, until that starts to come back. Got it. Very helpful. Thanks so much. Yeah. Thanks, Travis. Thank you. Our next question comes from the line of Louie DiPalma with William Blair. Your line is open. Rick and Mark, good afternoon. Hey, Louie. Hey, Louie. What drove the sequential decrease in satellite services revenue? Was it, like, entirely driven by, like, lower subscribers on the consumer broadband side due to the capacity shift towards mobility, or were there any, like, one-time items in the quarter that drove that decrease? Hey, Louie, it's Shawn. You know, primarily you know, we did have a little bit of Fixed Broadband pressure in the U.S. that was offset from some growth in Latam. The other thing is there is a little bit of seasonality that you see in Q4 from Q3 in the IFC business as well. It's something to keep in mind. Sounds good. With the expected launch of an entry into service of ViaSat-3, I think you said for January, should that lead to a stabilization for the residential broadband revenue, or do you expect residential broadband revenue to continue to decline in fiscal 2023 and for that to be, like, more than offset by increases in the aviation revenue? Overall, in 2023, in the first three quarters, we expect residential to continue to decline as we allocate more of the bandwidth to the in-flight. You know, we've talked about the number of airplanes that we expect to activate, and that's really what's gonna drive the decline in the residential subscriber count. In the fourth quarter, we're expecting that to turn around and start growing again. We do have expectations of growing the residential subscriber count in the U.S. as well as internationally going forward from there. What you should see first is it stabilize a little bit and then start to grow. You know, one thing I'd just like to comment on about this is, remember when the IFC business got hit with COVID, then we put a lot of resources towards offsetting that in the residential side. With IFC coming back, now you're seeing residential contracting as we allocate bandwidth again. That's one of the things we like about having multiples of these businesses so that we can allocate resources, you know, in real-time, around those market areas. Great. Ultimately, you expect both U.S. like consumer broadband subscribers and like potentially like ARPU to increase beginning I think towards the end of fiscal 2023? Yeah. Yeah. On a sequential basis, we expect subscribers to start growing in the fourth quarter as we get capacity. I think from an ARPU perspective, you know, we're gonna look at what the market is, but one of the things that has driven our ARPU up is the fact that we didn't have very much bandwidth. If we have a lot more bandwidth, then we'll probably be able to grow in multiple segments of the market, not just the way we've been growing, which is through higher ARPU. I think we'll have better plans that are more, you know, more valuable plans. Some of those will be higher priced than what we have now. I think we'll also be able to introduce plans that are lower priced than what we have now because we'll have a lot more bandwidth inventory to work with. I think ARPU trajectory, you know, we'll have more clarity on that probably once we start going to market with those services. Sounds good. Related to Inmarsat, are there any plans to develop a Ka-band antenna that would be compatible with both the Viasat and the Inmarsat network? Such that, when you're, like, bidding on, like, international aircraft right now, and, like, when you equip aircraft over the next two years that, you know, they would be compatible with either network, so there's, like, increased redundancy. Yes. As a matter of fact, right now, one of the things that we've done is we've tried to make our Ka-band terminals compatible with a large number of different Ka-band satellites. For instance, we don't use all these compatibilities yet, but just talking about our own network right now, for instance, you know, we work on NBN satellites in Australia. We work on Brazilian Telebras satellite in Brazil. We work on Inmarsat satellites. We work on other third-party satellites in Europe, and we can work on satellites in Asia. The antenna systems can work on all those. With respect to Inmarsat satellites in particular, all of our antennas are capable of working on the Inmarsat satellite. The Inmarsat terminals are capable of working on our satellites. There may be network or modem compatibilities that we'll have to work out, either on individual airplanes or we also can do those things within the network gateways, which then apply to all the airplanes that's connected to those gateways. We have quite a bit of maneuvering room to be able to get that. Our objective is really to be able to get global coverage pretty much immediately between the two fleets and to have that additional redundancy that you're referring to with our own satellites and theirs as well. We think that's gonna be a really attractive feature for our customers. Just think of it as the ability to roam onto networks. Yeah. Right. Great. Great. Great. Inmarsat airplanes could roam on ours or vice versa. Thanks. One final question. Do you have a rough estimate of your backlog for aviation, like commercial aircraft under contract? I know you said that you have 1,830 online, and you expect to have 2,400 online by the end of fiscal 2023. How many more planes will you have in backlog, like, at the end or, like, right now or, like, at the end of fiscal 2023 to install in the future? Louie, right now we have just under 1,000. Just to be clear, that does include the Southwest order. Okay. A little wide. Yeah. A good, healthy backlog. For that backlog, it seems interesting in that I think two years ago or three years ago, like, you announced, like, an order for United Airlines 737 MAX. I think it was for, like, a small quantity, but I think they have, like, a very large order of MAX aircraft, and they have a lot of, like, options. A lot of your customers, like Delta, have options with the A321neo, and I think American Airlines has options with the A321neo. Does your backlog contain, like, options, or are they just for, like, firm orders for aircraft? It's just the firm orders that they've made to date. It's all those in our backlog. Some of those orders include aircraft that those customers have. For instance, the Southwest order includes aircraft at Southwest that are yet to be delivered to Southwest. It's not. You know, some of these are on new aircraft that they've got orders for example. In the cases of the other ones, you know, what our goal is to be kind of the best provider to each one of these guys so that when they do order new aircraft, those are coming with our service. That's our mission, is to make those customers very happy, provide the best available connectivity and value to the airline customers so that all their future orders have already booked. That's plan A. That and that's pretty much worked. So far that's pretty much worked to date. The other thing, the other part of this, because we do get questions on that as well, you know, what we wanna do is make it so that the service on the planes that are equipped with ours is so good that they're motivated to update their, you know, their existing fleet as well. That's gone well as also. Those are the ways in which we've continued to grow orders with existing customers. You know, I think all those effects are in play with pretty much all of the airlines that we serve now. Can I ask another question actually on this topic? For a lot of your airline contracts, have you contemplated the potential transition to free Wi-Fi? Like, are you able to, like, at a high level, like, estimate what would be, like, the potential impact to, like, average revenue per aircraft in that type of transition? Yes. Okay, yes to both of those. I think that one of the things that you know, here's kind of, I think, the way that I would put it, what's gone on in the airline industry in the last couple of years is, you know, for a while, there was a focus on connecting individual planes. Let's take an individual plane, fly it on a route, show me what you can do on that plane. I think what has happened is as airlines see, you know, the value and utility of Wi-Fi, and they realize that they get some kind of customer satisfaction from passengers that use the connectivity, the notion of making it free has become more important. When they make it free and the usage grows, what they find is that the real issue is less connecting individual planes and more making that service reliable for their fleet as a whole, especially in the places at their hubs, where there would be the most planes. That's where the focus has gone. What that means is that when airlines make Wi-Fi purchase decisions, that issue about, okay, what would it look like for us to go free? We want that as an option. What does that mean for connectivity at our hub cities? What does that mean for service level agreements? That becomes a part of the negotiation. You know, I think that from our perspective, you know, yes, it's good. It's good for us that it gets more usage. You know, one of the things we're working with airlines is to make sure that it's good for them as well. Those are the two things that go with it. The way in which they do it would have some impact on the specific, you know, the revenue numbers or the output number, average revenue per airplane that we would get. The upside is it's certainly going to be good for us, to get more usage, and we think it'll be good for the airlines as well. That's what we're aiming for. Well, one of the reasons why we're not as potentially sometimes as transparent as some of the competition on some of this is because it's important to our airline customers that they communicate what their strategy is and that we follow that. Whereas sometimes it might be easier and for us to describe it as, like I said, some of our competition has. We found that to the extent that we're allowing them to communicate their strategy, that's a better partnership for us with them. Sounds good. Thanks. Just to be super clear and make sure it was clear what I said, and our backlog that I gave you coming out of the year, just under 1,000 aircraft. That's this definitely does not include anything from Southwest. Does not include it. Yeah. Right. Okay. With Southwest, it might be, like, 1,400 or so? No comment. Yeah. There are different estimates out there about what Southwest's purchase plans are for new planes, which is what's covered under the agreement. Probably the thing to do would be to look at estimates, you know, airline estimates for what Southwest deliveries would be. You know, I think we have a good shot at capturing all those. Yeah, you didn't use any qualifier. You just said all, like, future aircraft from Southwest. That's a pretty long timeline, you know? Well, I mean, so yeah, their 737 clean, they're going to the MAX version. Yeah. The opportunity is still there. We just feel we have to continue to earn it. That's right. That's great. Thanks. Thanks, Shawn, for the clarification. Thanks, Rick and Mark. Yeah. Thank you. Our next question comes from the line of Chris Quilty with Quilty Analytics. Your line is open. Thanks. I know you just said that it's better that your customers communicate their strategy, but one notable aspect of that Southwest announcement is they've historically been all KU. So do you see this as a you know permanent forward shift by Southwest to a Ka-band system? I don't really think it's an issue of KA or KU. I think it's an issue of Southwest. You know, our job right now is to go make Southwest the planes that fly on our network with Southwest such a good quality of service that they want it on the rest of their fleet. I mean, that's the challenge. It's their job to go figure out what to the extent that they're gonna do that, or do they have another supplier that they're happy with. We'll let that play out. You know, I think that it's really not about KA or KU. Well, look, what I would say is, you know, if you design satellites and space systems to take advantage of the things that you can do with Ka-band, that they don't come automatically just because you use Ka-band, right? Right. They come from having some of the features that we have in our satellites, and especially in ViaSat-3, that, you know, that should give us the ability to deliver a better service. Like, that's what we're aiming for. We think that, you know, they should and want to do the best they can with the service, that they have now. It's our job is to give them the option to do better. What we really want, Chris, is there's this concept of purchase intent, right? Somebody flies, and what's the probability they're gonna fly on you again within the next year? To the extent that we can positively impact purchase intent by having our service aboard, that's really our mission. For every airline. Great. Shifting gears in the commercial network segment, you've been on fire on the ground antenna segment, and I'm just looking out to the next fiscal year. Should we expect that trend to continue, or should we see it level off a bit? Can you maybe detail, you know, what you see as the factors that have been driving that growth? Yeah, sure, Chris. I think, when you think about next year, it's a couple pieces, right? One is part of our growth, a big part of our growth this year was IFC terminal delivery, and that's gonna be a big part of our growth next year too. This year, I think we delivered, oh, 450, and we're gonna do plus 600 next year. We're pretty excited about that. Keep in mind. A little lower in Q4 and Q1. Yeah. It's really tied to our customer demands and, you know, we're meeting their schedule. Yeah. Aircraft deliveries and also type certification completions. Yeah. Right. Those are the kind of the gating drivers. Also on the big ground antenna business. It's fantastic. I mean, they had some significant wins, and I think that they're gonna continue to grow into next year too. Yeah. Chris, you know, I think your question just sort of highlights a point, which is, you know, we tend to get business in lumps, you know, whether it's government contracts or some of these big antenna contracts or airline wins. The timing of growth in a lot of those businesses is really dependent on the timing of those things. The one business that we have that is really not subject to that, which is the U.S. residential business, is actually the one that we're using to feed the in-flight business. That's what's really contributing to the lumpiness that you're seeing, you know, say for in Q4 and going into one and two, and the way that fiscal year 2023 will play out. The good thing is that we have most of the lumps in, you know, in the pipeline now, those are the things that drive the rate of growth. On an annual basis, it's pretty good. On a quarterly basis, it can be, you know, it can be unpredictable a little bit. Gotcha. On the ground equipment side, was it mostly earth observation driven? Yes. Yes. Great. You know, the other thing, on that side, I think one of the things that in the long run will help with that is that this CSP, Communications Services Project award that we got from NASA, which is really intended to kind of leverage the combination of the ground antenna business that we have with space relay for both commercial and government customers. I think that those two things are pretty synergistic, and it's pretty worth highlighting that as it relates to kind of the future prospects of our ground antenna business. Gotcha. Hate to keep asking antenna questions, but have you made any progress, or do you have any prognostication on your electronically steered flat panel antenna, when that should be in the market, and where specifically you're looking to position it relative to a dozen or more competitive products that are coming to market? Okay. Our main objective, and we think this should be what our customer's main objective is for those antennas, is to deliver services most cost effectively. That, that's what I think that's what's gonna differentiate our antennas. Now, in order to do that, you may need our network capability. Some of the things that we're building in are a little bit unique to our networks. We're a lot more focused on our antennas as the delivery mechanism for our service than we are as antennas as a standalone product. That causes us to look at some of the features or, you know, specifications of some of these competing products differently than somebody who's just in the market for an antenna might. Okay. That's kind of the guiding principle for us. Some of those things really impact not your ability to make a connection, but the flexibility that you have in scheduling these connections among all the different services that we have. Just to build on a theme, you know, that we're very focused on this productivity measure, some of which comes from high-capacity satellites, some of it comes from our ability to move bandwidth around and deliver on these service level agreements reliably, but really efficiently. Some of the features that we build in just make scheduling the bandwidth a lot more efficient or the ability to use multiple orbits really efficiently. That's the other thing that we're putting in. Some of the first applications that you'll see for that may be in land mobile applications using some of the you know some more copies of the antennas that we've flown for instance in business aviation. One of the main products that we have it aimed for is the commercial aviation market. We'll talk about that more as we get closer to it and give our customers an opportunity to weigh in on the specifics that we focused in on. Let me ask you a question, Mark, just to try to clarify it because one way to approach this would be You're building antennas for a mass market. I call it the lowest common denominator approach. Yeah. Another one is we would buy antennas if they had the features that we wanted, right? But they don't. Talk a little bit about that. Yeah. You said that. Yeah, no. Yeah, Chris. Yeah. I think just to build on Rick's point, which is an important one, is a lot of times when people buy antennas as a product, one of the things they'll look at is what is the worst case performance of that under particular combination of, you know, of look angles or satellites that you're using. They'll look at sort of what's the worst case performance. Because if they go off and buy service from a third party, they're not quite sure what the attributes of the satellite that deliver that service will be. For us, knowing that we have a pretty big fleet with some very unique capabilities, what makes a lot of sense is for us to come up with with an antenna specification that delivers the best weighted average performance under all operating conditions for those customers. So even if. As an example, if we had a worst case performance specification, but that condition arose only a very small fraction of the time, and still it allowed us to reliably meet our service level agreement, we would choose that as an acceptable criteria if what it did was it enabled way better performance most of the time under the operating conditions that we expect for that customer. This difference between sort of expected or weighted average and worst case can have a really big impact on your choice of antenna technology. When you're just selling third-party antennas, customers might rationally choose a different one. Yeah. We're not doing these things so we can be able to sell a bunch of antennas and make money on antennas in mass markets. They're really to enable the type of services that we're trying to own in the markets that we're addressing. Yeah. Does that make sense? Yeah. Gotcha. You're designing an antenna that's optimized for your service. Yeah. Which ultimately involves not just our own satellites, but a whole bunch of partner satellites as well. Yeah. Including a number of partners that, you know, haven't yet discussed, but we think are gonna be really valuable in the future. Multi-orbit. Yeah. Right. Great. Do you wanna elaborate on that multi-orbit strategy? No. Other than to say, you know, we think that, you know, what we're trying to do with a multi-orbit strategy is get the best of each orbit's attributes, right? For the geostationary satellites, what we've got is we think really low cost bandwidth and the ability to deliver a lot of bandwidth in these very congested places like airline hubs was one example. Ports would be another example. So you'd want to use that. If to the extent that you have traffic that benefits from a lower propagation delay or lower latency, then you'd like to use a non-geo for that. Or if you want coverage in places that the geo doesn't reach as well, you'd want non-geo for that. Also, you know, depending on, you know, what customers you get and how traffic evolves, we also can have, you know, hotspots in areas that we didn't expect. To the extent that we can use partner satellites to serve those, that can let us get customers that we wouldn't otherwise be able to get because we can fill in those hotspots. Those are the main reasons for using multiple satellite partners as well as with non-GEO being one set of those partners. Gotcha. I'll wait till next quarter, so you can tell us who's non-GEO. Okay. Okay. I appreciate the feedback. Yep. Okay. All right. Thanks, guys. Thanks, Chris. Thank you. Our final question comes from the line of Landon Park of Morgan Stanley with a follow-up. Your line is open. Great. Thanks for taking the follow-up, guys. I was just wondering if you could elaborate on the U.S. residential terrestrial competition that you talked about in the letter. Just one quick one for you, Shawn. Just taking the $700 million EBITDA guidance with the $1.4 billion CapEx guidance, should we be thinking about cash burn in the $700 million range, or are there other working capital or other considerations to think about? Yeah. I would think, you know, one thing to keep in mind, just to hit that one first is, you know, we're gonna be growing and working to kind of see the channel for that growth too ahead of ViaSat-3. I put a little bit of working capital burn in there, you know, relative on a year-over-year basis. I think what we've also said is we kind of expect next year's leverage to be around the 4.5 mark. That kind of gives you some places to triangulate around. Okay. Okay. You know, the residential market, probably, you know, the kind of the longer term biggest factors are probably gonna be government subsidies, and kind of build out of fiber and cable terrestrial networks. That's, you know, that. What we're really looking at is what impact that has on the addressable market. I think others have talked about that too. We think the addressable market will go down. You know, we think it creates opportunities at maybe different price points than what we've operated at now. If you look at kind of the long-term. I think a couple years ago, we gave a pie chart that showed our expectations of what our satellite services markets or total markets would be in FY 25. That, you know, that FY 25 had, you know, it showed sort of modest growth in the U.S. residential market as a whole, but a much larger fraction of our total business coming from these international mobility markets. That's still the way we see it, taking into account what's going on in the build-out and subsidy in the U.S. market. I think, you know, we have room to grow by hundreds of thousands. I'm not talking about growing by millions of subscribers in the U.S. market. You would say we will be able to dramatically increase our addressable market and plan type in that, but have a much smaller share of the market, of our addressable market. That's what we're anticipating. When are you guys gonna start testing those new plans before? Yes. ViaSat-3 actually enters service or? Yes. Yes, we are. You'll see, you know, Right now, I would say, you know, one of our most promising plans is really around higher quality and more video streaming, and that's gone really, really well. It's, you know, hundreds of subscribers that we're testing that on. That's gone really, really well. That'll be one of the things that we do with ViaSat-3. You'll see us also begin testing on higher speed plans than we have now. Right now, we top out at 100 Mbps. We'll probably go to meaningfully higher speed plans. I think what you'll see is us kind of moving in both directions, both the plans that are better premium, more premium than what we have now, and then others that are more value-based, which could involve improvements in performance, but also could be at lower price points. The other point I would make on the subsidies is one of the ways in which the government is using subsidies is with what they call the ACP program, which is basically a way. It's like a voucher program for lower income fixed broadband subscribers. That is available to satellite service providers as well. That's something that we're just going to be adopting kind of at the end of, so sometime this quarter. That will, you know, help with our kind of markets that are more price sensitive or economically stressed than we've had before. You didn't participate in the EBB program? Yeah. The ACP program, I think, is going to be more significant than that. It's a pretty straightforward program. People qualify, they get, like, I think it's like $30 a month. Right. which is pretty meaningful. I think that's the one. I think I'm not sure, but I think we are part of the EBB one. We are. I think the ACP one we think is gonna be probably more impactful. It does appear that that will continue on. It's a pretty popular program. Right. You talked about fiber and cable. Are you seeing fixed wireless at all? Well, we do. I mean, we see each of those. I think that, you know, it's kind of like a T-Mobile version. Mid-band is probably gonna be more representative of a, you know, fixed. It's a fixed wireless that rides on a mobile service. That's probably gonna be more impactful than dedicated fixed wireless. I think that's probably the long-term thing. But if you look at the way T-Mobile has done it, is they've done it subordinate to their mobile service. So that is gonna have an impact on geographically where it can roll out, the extent to which it can roll out, and the kind of the long-term duration of that. But that's probably the, kind of the most, you know, the biggest potential impact. I think one of the things that's really gonna, you know, that we see repeatedly is people coming and going, especially when they're in economically stressful times, people just going to a mobile plan and not having a fixed plan at all. We actually think there's some opportunity around augmenting some of that stuff as well. We think, you know, we never wanna think it's always business as usual, and we're only using the same tools in different markets. You know, whenever there's a change, there's opportunity. I think our the main, you know, the, I'd say the biggest theme for us, and it did play out in the, you know, in the fourth quarter, one of the statistics that we put in our letter was, I think in the fourth quarter of FY 2022, 39% of our satellite services revenue came from mobile and international compared to 16% in the same quarter a year ago. That that's the long-term trend. I think we definitely you know, we're not it's not like we're abandoning or it's going away in the residential market, but we think the real growth is in the mobility markets and a lot of growth internationally, where some of those factors that are impinging on the U.S. aren't happening and are unlikely to happen. Okay. Thanks, everyone. Thanks, Landon. I would now like to turn the call back over to Mr. Baldridge for closing remarks. Okay, thanks. First of all, I say thank you guys for showing up. We know there were a bunch of conflicts right now, and there were a couple of people who couldn't make it because of those conflicts, but we appreciate all the good questions and you guys for listening to the call. I make a couple points before we just finish. One is that like we did in Q4 and this year, we constantly balance investments and EBITDA to try to, you know, make sure we're hitting the targets that we put out there and make sure that, you know, we can borrow the money we're trying to borrow, finish the ViaSat-3 constellation, get it up. To the extent we have a little bit more room, we can put the accelerator on some of the things we think are valuable, and to the extent that we don't, we kind of constrain that. We're constantly doing that. I think you guys that have been around for a while know that about us. Getting really excited because of the upcoming ViaSat-3 launch. It's kind of in our sights and so we're getting excited about that. Just, you know, for Mark and me and the rest of the team, just wanna thank you guys for being on the call. Been another really good year, we think. Our operational momentum is really strong and very positive. On top of that, getting to that first ViaSat-3 launch, which we've been waiting for, give us the capacity we sorely need regionally and allow us to improve our service offerings. This is what we've been waiting for. While Inmarsat gives us the global capabilities and opportunities to enhance our expanding mobile focus, on a global basis, we're excited about that. At the same time, our teams here remain hyper-focused on executing the plan so that that enables us to go expand the business. Don't hesitate to contact Peter or the rest of our team if you have more questions on our results or other topics today. We look forward to updating you next quarter. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.