FULLTEXT DEL 4 AV 4
10-K – 2026-05-29 – vsat-20260331.htm
The total fair value of shares vested related to RSUs during the fiscal years 2026, 2025 and 2024 wa s $ 47.3 million, $ 15.3 million and $ 34.1 million, respectively. Performance-based restricted stock units . Beginning fiscal year 2025, the Company granted performance-based restricted stock units with a market condition (such as stock price milestone) (market condition PSUs), performance-based restricted stock units with a performance condition (such as an operational milestone) (performance condition PSUs) and performance-based restricted stock units with a performance condition and TSR modifier (performance condition with TSR modifier PSUs) to executive officers and certain other high-level employees under the Equity Participation Plan and Inducement Plan. The Company’s PSUs have a one - or three-year performance-based vesting period and generally time-vest over approximately three years . The number of shares of PSUs that will become eligible to vest is somewhere in the range of 0 % to 200 % of the target number of PSUs based on either the comparison over the performan ce period of the Company’s TSR to the TSR of the companies included in an index and/or the Company's performance for a given fiscal year period against pre-established targets. PSUs must be vested under both the time-based vesting schedule and the performance-based vesting conditions in order to be issued. PSUs represent a right to receive shares of common stock at a future date determined in accordance with the participant’s award agreement and achievement of performance-based vesting conditions. There is no exercise price and no monetary payment required for receipt of PSUs or the shares issued in settlement of the award. Instead, consideration is furnished in the form of the participant’s services to the Company. The Company estimates the fair value of market condition PSUs at the grant date using a Monte Carlo simulation. The expense for market condition PSUs that vest is recognized regardless of the actual outcome achieved and is recognized on a graded-vesting basis. Compensation cost for performance condition PSUs is based on the fair value on the date of grant. Expense for performance condition PSUs that vest is recognized each period based on a probability assessment of the expected outcome of the performance targets with a final adjustment upon measurement at the end of the performance period and is recognized on a graded-vesting basis. During fiscal years 2026 and 2025, the Company recogniz ed $ 3.9 million and $ 5.1 million, respectively, in stock-based compensation expense related to PSUs . The per unit weighted average grant date fair value of PSUs granted during fiscal years 2026 and 2025 was $ 33.04 and $ 18.13 , respectively. A summary of PSU activity for fiscal year 2026 is presented below: Number of Shares (1) Weighted Average Grant Date Fair Value per Share Outstanding at March 31, 2025 609,738 $ 18.13 Awarded 308,460 33.04 Performance adjustment 156,620 16.09 Forfeited ( 215,171 ) 18.45 Vested ( 185,306 ) 16.09 Outstanding at March 31, 2026 674,341 $ 24.94 (1) Number of shares awarded is presented based on the target number of PSUs granted . Outstanding shares are adjusted when the final performance and/or market condition has been achieved. The total fair value of shares vested related to PSUs during the fiscal year 2026 was an insignificant amount. The weighted average assumptions (annualized percentages) used in the Monte Carlo simulation for market condition PSUs were as follows: PSUs Fiscal Year 2026 Fiscal Year 2025 Volatility 82.7 % 64.7 % Risk-free interest rate 3.7 % 4.3 % Dividend yield 0.0 % 0.0 % F- 44 VIASAT, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Note 9 — Shares Used In Computing Diluted Net Income (Loss) Per Share The weighted average number of shares used to calculate basic and diluted net loss per share attributable to Viasat, Inc. common stockholders was the same for fiscal years 2026, 2025 and 2024, as the Company incurred a net loss from continuing operations (excluding income (loss) from continuing operations attributable to the noncontrolling interest) for such periods and inclusion of potentially dilutive weighted average shares of common stock would be antidilutive. Potentially dilutive weighted average shares excluded from the calculation for fiscal years 2026, 2025 and 2024 consisted o f 111,663 shares, 220,095 shares and 242,973 shares, respectively, related to stock options, 1,930,376 shares, zero shares, and zero shares, respectively, related to PSOs and mark et condition PSUs, 2,699,376 shares, 5,539,871 shares and 2,066,973 shares, respectively, related to RSU s, 175,721 shares, 165,498 shares, and zero shares, respectively, related to performance condition PSUs, and 1,226,647 shares, 1,950,692 shares and 1,127,606 shares related to certain terms of the Viasat 401(k) Profit Sharing Plan and Employee Stock Purchase Plan. Note 10 — Income Taxes The components of income (loss) before income taxes by jurisdiction were as follows: Fiscal Years Ended March 31, 2026 March 31, 2025 March 31, 2024 (In thousands) United States $ ( 161,596 ) $ ( 329,591 ) $ ( 859,006 ) Foreign 266,397 ( 215,703 ) ( 334,940 ) $ 104,801 $ ( 545,294 ) $ ( 1,193,946 ) The (provision for) benefit from income taxes included the following: Fiscal Years Ended March 31, 2026 March 31, 2025 March 31, 2024 (In thousands) Current tax (provision) benefit: Federal $ ( 6,499 ) $ ( 28,247 ) $ ( 12,128 ) State ( 7,050 ) ( 2,661 ) ( 1,010 ) Foreign ( 56,735 ) ( 117,042 ) ( 27,028 ) ( 70,284 ) ( 147,950 ) ( 40,166 ) Deferred tax (provision) benefit: Federal ( 28,380 ) 16,770 74,404 State ( 937 ) ( 102 ) 5,166 Foreign ( 16,622 ) 132,223 100,070 ( 45,939 ) 148,891 179,640 Total (provision for) benefit from income taxes $ ( 116,223 ) $ 941 $ 139,474 F- 45 VIASAT, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Significant components of the Company’s net deferred tax assets were as follows: As of March 31, 2026 March 31, 2025 (In thousands) Deferred tax assets: Net operating loss carryforwards $ 388,035 $ 252,589 Tax credit carryforwards 178,366 159,806 Capitalized research and development costs 65,417 136,191 Operating lease liabilities 99,134 99,877 Interest carryforwards 34,260 105,182 Other 182,575 198,071 Valuation allowance ( 434,983 ) ( 430,501 ) Total deferred tax assets 512,804 521,215 Deferred tax liabilities: Intangible assets ( 533,515 ) ( 576,599 ) Property, equipment and satellites ( 776,440 ) ( 689,880 ) Operating lease assets ( 91,280 ) ( 88,083 ) Other ( 59,720 ) ( 75,918 ) Total deferred tax liabilities ( 1,460,955 ) ( 1,430,480 ) Net deferred tax assets (liabilities) $ ( 948,151 ) $ ( 909,265 ) F- 46 VIASAT, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) A reconciliation of the benefit from (provision for) income taxes to the amount computed by applying the statutory federal income tax rate to income (loss) before income taxes for the fiscal year ended March 31, 2026 is as follows: Fiscal Year Ended March 31, 2026 Dollar Percentage (In thousands) U.S. federal statutory tax rate $ ( 22,008 ) 21 % State and local income taxes, net of federal income tax effect (1) ( 6,532 ) 6 Foreign tax effects United Kingdom Statutory tax rate difference between United Kingdom and United States ( 5,053 ) 5 Interest on overpaid taxes, net of income tax effect 5,146 ( 5 ) Other 5,635 ( 5 ) Canada Statutory tax rate difference between Canada and United States 10,226 ( 10 ) Local provincial income taxes ( 20,332 ) 19 Capital gain partial exemption on sale of Navarino UK 12,605 ( 12 ) Tax audit adjustments ( 5,619 ) 5 Withholding taxes ( 8,993 ) 9 Other ( 3,050 ) 3 Other foreign jurisdictions ( 20,969 ) 20 Effect of changes in tax laws or rates enacted in the current period ( 10,061 ) 10 Effect of cross-border tax laws Global intangible low-taxed income (GILTI) ( 43,061 ) 41 Subpart F income ( 45,418 ) 43 Inclusion of foreign disregarded entities ( 3,451 ) 3 Other 1,324 ( 1 ) Tax credits Research and development tax credits 10,558 ( 10 ) Changes in valuation allowances 48,628 ( 46 ) Nontaxable or nondeductible Items Non-deductible compensation ( 3,594 ) 3 Other ( 8,507 ) 8 Changes in prior period worldwide unrecognized tax benefits 3,029 ( 3 ) Other adjustments Unremitted subsidiary gains ( 4,380 ) 4 Other ( 2,346 ) 2 Total $ ( 116,223 ) 111 % (1) State taxes in Virginia and Maryland made up the majority (greater than 50 percent) of the tax effect in this category. F- 47 VIASAT, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) A reconciliation of the benefit from (provision for) income taxes to the amount computed by applying the statutory federal income tax rate to income (loss) before income taxes for the fiscal years ended March 31, 2025 and 2024 is as follows: Fiscal Years Ended March 31, 2025 March 31, 2024 (In thousands) Tax (provision) benefit at federal statutory rate $ 114,512 $ 250,728 State tax provision, net of federal benefit 8,908 28,621 Tax credits 16,004 28,574 Change in federal valuation allowances ( 49,566 ) ( 105,968 ) Change in state valuation allowances ( 10,880 ) ( 27,251 ) Non-deductible compensation ( 2,459 ) ( 5,240 ) Non-deductible transaction costs ( 40 ) ( 18,911 ) Non-deductible meals and entertainment ( 1,112 ) ( 1,077 ) Stock-based compensation ( 12,932 ) ( 12,182 ) Change in state effective tax rate ( 452 ) 292 Base Erosion and Anti-Abuse Tax (BEAT) ( 30,448 ) — Foreign effective tax rate differential, net of valuation allowance ( 9,185 ) 6,199 Unremitted subsidiary gains ( 7,043 ) ( 1,586 ) Withholding taxes ( 6,852 ) ( 4,981 ) Other ( 7,514 ) 2,256 Total (provision for) benefit from income taxes $ 941 $ 139,474 As of March 31, 2026 , the Company had federal and state R&D tax credit carryforwards of $ 157.3 million and $ 217.6 million, respectively, which begin to expire in fiscal year 2040 and fiscal year 2027 , respectively. As of March 31, 2026 , the Company had federal and state net operating loss carryforwards of $ 1,296.2 million and $ 673.0 million, respectively, which begin to expire in fiscal year 2029 and fiscal year 2027 , respectively. However, the majority of the federal net operating loss carryforwards do not expire. As of March 31, 2026 , the Company's deferred tax assets for net operating loss carryforwards included $ 64.2 million of UK capital loss carryforwards, which can only be offset against future UK capital gains. A full valuation allowance has been established against the capital loss carryforwards, as no capital gains are expected. With limited exceptions, the Company's foreign net operating loss and interest carryforwards do not expire. However, certain transactions or material changes to the Company's global financing arrangements could limit the Company's right to use its foreign deferred tax assets and make netting against deferred tax liabilities inappropriate, resulting in an increase to the valuation allowance and income tax expense. In accordance with ASC 740, net deferred tax assets are reduced by a valuation allowance if, based on all the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Future realization of existing deferred tax assets ultimately depends on future profitability and the existence of sufficient taxable income of appropriate character (for example, ordinary income versus capital gains) within the carryforward period available under tax law. In the event that the Company’s estimate of taxable income is less than that required to utilize the full amount of any deferred tax asset, a valuation allowance is established, which would cause a decrease to income in the period such determination is made. A valuation allowance of $ 435.0 million at March 31, 2026 and $ 430.5 million at March 31, 2025 has been established relating to carryforwards of federal, state and foreign net operating losses, federal and state R&D tax credits, and foreign tax credits, and to other federal and state net deferred tax assets for cumulative timing differences that, based on management’s estimate of future taxable income attributable to such jurisdictions and generation of additional research credits, are considered more likely than not to expire unused. F- 48 VIASAT, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) In July 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S. The OBBBA includes a broad range of material business tax reforms, such as 100% bonus depreciation, expensing of U.S.-based research and development, modification of the interest expense limitation, and modification of various U.S. international tax provisions. For fiscal year 2026, the tax law changes resulted in approximately $ 10.7 million of incremental non-cash tax expense to increase the Company’s U.S. valuation allowance due to material changes in the Company’s mix of gross deferred tax assets and liabilities. Additionally, the tax law changes decreased cash paid for income taxes in fiscal year 2026 associated with the Company's majority-owned subsidiary primarily due to the accelerated amortization of research and development expenses that were previously capitalized for tax purposes. During the fourth quarter of fiscal year 2025, the Company released $ 10.3 million of valuation allowance previously recorded against U.S. deferred tax assets. The Company evaluated both the positive and negative evidence and released valuation allowance equal to the expected benefit from the deferred tax liabilities recorded for legacy Inmarsat U.S. entities in connection with a tax planning strategy to file a consolidated U.S. federal tax return. During the second quarter of fiscal year 2024, in evaluating the Company’s ability to realize its U.S. net deferred tax assets, the Company considered all available positive and negative evidence, including but not limited to operating results, forecasted ranges of future taxable income, and its recent satellite anomalies. ASC 740 places more weight on the objectively verifiable evidence of current pre-tax losses and recent events than forecasts of future profitability. Therefore, the Company determined it is more likely than not that its U.S. net deferred tax assets will not be realized, excluding its deferred tax assets and liabilities related to the separate U.S. tax return filings of TrellisWare and the legacy Inmarsat entities. As a result, the Company’s tax benefit for fiscal year 2024 was reduced by a valuation allowance recorded against such U.S. deferred tax assets. The following table summarizes the activity related to the Company’s unrecognized tax benefits: As of March 31, 2026 March 31, 2025 March 31, 2024 (In thousands) Balance, beginning of fiscal year $ 188,186 $ 185,595 $ 129,738 Increase related to prior year tax positions 1,200 1,571 2,728 Decrease related to prior year tax positions ( 265 ) ( 253 ) ( 190 ) Increase related to current year tax positions 49,117 14,017 15,608 Increase related to business combinations — — 54,193 Expiration of the statute of limitations for the assessment of taxes ( 11,054 ) ( 12,744 ) ( 16,482 ) Balance, end of fiscal year $ 227,184 $ 188,186 $ 185,595 Of the total unrecognized tax benefits at March 31, 2026 , $ 13.6 million would reduce the Company’s annual effective tax rate if recognized, based on the Company's valuation allowance position at March 31, 2026. The Company’s policy is to recognize interest and penalties related to income tax matters as a component of income tax expense. As of March 31, 2026 and 2025 , the Company had accrued interest expense and penalties of approximately $ 9.0 million and $ 14.4 million, respectively. The Company recognized a tax benefit of $ 5.5 million for fiscal year 2026 and an insignificant amount for each of fiscal years 2025 and 2024 for reductions of interest expense and penalties in income tax expense. In addition, as of March 31, 2026 and 2025 , the Company had accrued interest income of approximately $ 7.1 million and an insignificant amount, respectively. The Company recognized a tax benefit of $ 4.6 million for fiscal year 2026 and an insignificant amount for each of fiscal years 2025 and 2024 for interest income in income tax expense. F- 49 VIASAT, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The Company is subject to periodic audits by domestic and foreign tax authorities. By statute, the Company’s U.S. federal and state income tax returns are subject to examination by the tax authorities for fiscal years 2023 and thereafter . Additionally, net operating loss and R&D tax credit carryovers that were generated in prior years may also be subject to examination. The Company’s U.S. federal income tax return for fiscal year 2024 is currently under examination by the Internal Revenue Service. Calendar years 2014 and thereafter remain open in Norway for certain entities currently under examination. Calendar years 2018 and thereafter remain open in Canada for certain entities currently under examination. With few exceptions, fiscal years 2022 and thereafter remain open by statute to examination by other foreign tax authorities. The Company believes that it has appropriate support for the income tax positions taken on its tax returns and its accruals for tax liabilities are adequate based on an assessment of many factors, including experience and interpretations. The income taxes paid, net of refunds received, for the fiscal year ended March 31, 2026 was as follows: Fiscal Year Ended March 31, 2026 (In thousands) Federal $ 10,103 State 1,472 Foreign United Kingdom 49,443 Brazil 5,928 Other foreign jurisdictions 13,755 Total cash paid for income taxes, net $ 80,701 Note 11 — Employee Benefits The Company is a sponsor of a voluntary deferred compensation plan under Section 401(k) of the Internal Revenue Code. Under the plan, the Company may make discretionary contributions to the plan which vest over three years. The Company’s discretionary matching contributions to the plan are based on the amount of employee contributions and can be made in cash or the Company’s common stock at the Company’s election. Subsequent to the fiscal year ended March 31, 2026, the Company elected to settle the discretionary contributions liability in shares of the Company’s common stock, consistent with fiscal year 2025. Based on the closing price of the Company’s common stock on March 31, 2026 , the Company would issue approximately 622,271 shares of common stock at this time. Discretionary contributions accrued by the Company as of March 31, 2026 and 2025 amounted to $ 28.5 million an d $ 27.5 million, respectively. Note 12 — Related-Party Transactions In the normal course of business, the Company engages in transactions with its equity method investments (Navarino UK and JSAT Mobile), which are considered related-party transactions. In March 2026, the Company sold all of its interests in Navarino UK (see Note 1 — The Company and a Summary of Its Significant Accounting Policies — Principles of consolidation for more information). The Company recognized revenue from Navarino UK and JSAT Mobile in the amounts of $ 63.6 million, $ 65.7 million and $ 64.4 million during fiscal years 2026, 2025 and 2024 , respectively. The Company received cash of $ 63.6 million, $ 68.8 million and $ 61.1 million from Navarino UK and JSAT Mobile during fiscal years 2026, 2025 and 2024, respectively. As of March 31, 2026, accounts recei vable from JSAT Mobile was $ 2.5 million. As of March 31, 2025 , accounts receivable from Navarino UK and JSAT Mobile was $ 8.5 million. F- 50 VIASAT, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Note 13 — Commitments From time to time, the Company enters into satellite constructi on agreements as well as various other satellite-related purchase commitments, including with respect to the provision of launch services, operation of its satellites and satellite insurance. As of March 31, 2026, future minimum payments under the Company’s satellite construction contracts and other satellite-related purchase commitments for the next five fiscal years and thereafter were as follows: Fiscal Years Ending (In thousands) 2027 $ 97,789 2028 104,623 2029 79,251 2030 6,161 2031 3,173 Thereafter 376 $ 291,373 The Company’s contracts with satellite manufacturers require the Company to make monthly in-orbit satellite performance incentive payments with respect to certain satellites in commercial service, including interest, through fiscal year 2028, subject to the continued satisfactory performance of the applicable satellites. The Company records the net present value of these expected future payments as a liability and as a component of the cost of the satellites. As of March 31, 2026, the Company’s estimated satellite performance incentive obligations and accrued interest for the applicable satellites were approximately $ 6.1 million, of which $ 5.2 million and an insignificant amount have been classified as current in accrued liabilities and non-current in other liabilities, respectively. Under these satellite construction contracts, the Company may incur up to $ 6.1 million in total costs for satellite performance incentive obligations and related interest earned with potential future minimum payme nts of $ 4.7 million and an insignificant amount in fiscal years 2027 and 2028, respectively, with no commitments thereafter. The Company has various other purchase commitments under satellite capacity agreements which are used to provide satellite networking services to its customers for future minimum payments, which as of March 31, 2026 were approximately $ 103.1 million, $ 73.5 million, $ 182.1 million, $ 147.1 million and $ 4.0 million in fiscal years 2027, 2028, 2029, 2030 and 2031 , respectively, and an insignificant amount of further minimum payments thereafter. Note 14 — Contingencies Periodically, the Company is involved in a variety of claims, suits, investigations and proceedings arising in the ordinary course of business, including government investigations and claims, and other claims and proceedings with respect to intellectual property, breach of contract, labor and employment, tax and other matters. Such matters could result in fines; penalties, compensatory, treble or other damages; or non-monetary relief. A violation of government contract laws and regulations could also result in the termination of its government contracts or debarment from bidding on future government contracts. Although claims, suits, investigations and proceedings are inherently uncertain and their results cannot be predicted with certainty, the Company believes that the resolution of its current pending matters will not have a material adverse effect on its business, financial condition, results of operations or liquidity. F- 51 VIASAT, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The Company has contracts with various U.S. Government agencies. Accordingly, the Company is routinely subject to audit and review by the DCMA, the DCAA and other U.S. Government agencies of its performance on government contracts, indirect rates and pricing practices, accounting and management internal control business systems, and compliance with applicable contracting and procurement laws, regulations and standards. An adverse outcome to a review or audit or other failure to comply with applicable contracting and procurement laws, regulations and standards could result in material civil and criminal penalties and administrative sanctions being imposed on the Company, which may include termination of contracts, forfeiture of profits, triggering of price reduction clauses, suspension of payments, significant customer refunds, fines and suspension, or a prohibition on doing business with U.S. Government agencies. In addition, if the Company fails to obtain an “adequate” determination of its various accounting and management internal control business systems from applicable U.S. Government agencies or if allegations of impropriety are made against it, the Company could suffer serious harm to its business or its reputation, including its ability to bid on new contracts or receive contract renewals and its competitive position in the bidding process. As of March 31, 2026, the DCMA had approved the Company’s incurred costs through fiscal year 2022. The DCAA is currently auditing the Company's fiscal year 2025 recurring incurred cost submission. The Company's cost accounting practices are examined for compliance with the applicable CAS. Although the Company has recorded contract revenues subsequent to fiscal year 2022 based upon an estimate of costs that the Company believes will be approved upon final audit or review, the Company does not know the outcome of any ongoing or future audits or reviews and adjustments and if future adjustments exceed the Company’s estimates, its profitability would be adversely affected. As of March 31, 2026 and 2025, the Company had $ 15.1 million and $ 14.8 million, respectively, in contract-related reserves for its estimate of potential refunds to customers for potential cost adjustments on several multi-year U.S. Government cost reimbursable contracts. This reserve is classified as either an element of accrued liabilities or as a reduction of unbilled accounts receivable based on the status of the related contracts. Certain matters resolved during fiscal years 2026 and 2024 In June 2025, Inmarsat agreed to a binding term sheet with Liga do Networks (Ligado) and AST & Science, LLC to settle Inmarsat's opposition to Ligado’s planned restructuring. Under the conditions set forth in the term sheet, the Company expected to receive an aggregate of $ 568 million from Ligado in fiscal year 2026, consisting of (i) a $ 420 million lump sum payment which was received in October 2025, (ii) a $ 100 million lump sum payment that was due in March 2026 that remains outstanding pending resolution of certain matters, and (iii) a resumption of quarterly payments of approximately $ 16 million, which started on September 30, 2025, with an annual escalator of 3 % for the life of the contract (through 2107). Upon resolution of certain conditions, in the first nine months of fiscal year 2026, related to the $ 420.0 million lump sum payment, the Company allocated and recognized $ 267.5 million as deferred revenue and allocated and recognized $ 152.5 million as interest income on the deferral of Ligado's previous quarterly fees, which were received as part of the lump sum payment. In July 2022 and September 2023, the Company settled certain pending litigation. Under the terms of the settlement and licensing agreement, the Company receives certain payments, which may vary based on sales of licensed products. The Company received payments and recognized $ 30.8 million, $ 41.7 million and $ 99.9 million as product revenues within the Company's defense and advanced technologies segment during fiscal years 2026, 2025 and 2024, respectively, and recognized $ 7.2 million as interest income during fiscal year 2024. Note 15 — Discontinued Operations In October 2022, the Company entered into an Asset Purchase Agreement to sell the Link-16 TDL Business in its defense and advanced technologies segment to L3Harris in exchange for approximately $ 1.96 billion in cash, subject to adjustments. In accordance with ASC 205-20, the Company determined that the Link-16 TDL Business met held-for sale and discontinued operations accounting criteria at the end of the second quarter of fiscal year 2023. In January 2023, the Company completed the Link-16 TDL Sale, and accordingly the Company classified the results of the Link-16 TDL Business as discontinued operations in its consolidated statements of operations for periods prior to the closing of the Link-16 TDL Sale in fiscal year 2023. For the fiscal year ended March 31, 2024, net income (loss) from discontinued operations, net of tax, was a loss of $ 10.4 million, which resulted from an adjustment. F- 52 VIASAT, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Note 16 — Segment Information The Company reports its results in two separate segments consisting of communication services and defense and advanced technologies. The Company's segments are determined consistent with the way management currently organizes and evaluates financial information internally for making operating decisions and assessing performance. The Company’s reportable segments (communication services and defense and advanced technologies) have been determined based upon their market and economic characteristics while also giving consideration to the structure and management of various business lines. The reportable segments are primarily determined based upon industry categories and core competencies relating to product or service end market distribution, operations, and servicing and distinguished by the type of customer and, to a lesser extent, the related contractual requirements. The Company’s 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. The Company’s communication services segment revenues are primarily derived from the Company’s 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. The Company’s defense and advanced technologies segment develops and offers a diverse array of resilient, vertically integrated solutions to government and commercial customers, leveraging the Company’s technical competencies in encryption, cyber security, tactical gateways, modems and waveforms. The more regulated government environment for defense, encryption and other products is subject to unique contractual requirements and possesses economic characteristics that differ from the communication services segment. The Company’s defense and advanced technologies segment revenues are primarily derived from products and services in the Company’s information security and cyber defense, space and mission systems, tactical networking, and advanced technologies and other business lines, which are provided to government and commercial customers. The Company's Chief Operating Decision Maker (CODM) is the Company's Chairman of the Board and Chief Executive Officer . Segment operating profits (losses) are the primary measure used by the Company's CODM to evaluate segment operating performance. The CODM regularly reviews budget-to-actual variances of segment operating profits (losses) when evaluating segment performance and allocating resources to each segment. F- 53 VIASAT, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) Segment revenues, expenses and operating profits (losses) for the fiscal years ended March 31, 2026, 2025 and 2024 were as follows: Fiscal Years Ended March 31, 2026 March 31, 2025 March 31, 2024 (In thousands) Revenues: Communication services Aviation services $ 1,191,426 $ 1,048,225 $ 864,834 Government satcom services 795,043 754,552 596,826 Maritime services 463,061 477,968 430,090 Fixed services and other services 607,693 741,601 906,762 Total services 3,057,223 3,022,346 2,798,512 Total products 242,428 276,139 343,028 Total communication services revenues 3,299,651 3,298,485 3,141,540 Defense and advanced technologies Total services 217,200 203,430 206,082 Information security and cyber defense products 414,482 325,439 302,056 Space and mission systems products 330,867 304,870 309,253 Tactical networking products 329,417 319,577 202,094 Advanced technologies and other products 48,663 67,770 122,733 Total products 1,123,429 1,017,656 936,136 Total defense and advanced technologies revenues 1,340,629 1,221,086 1,142,218 Elimination of intersegment revenues — — — Total revenues $ 4,640,280 $ 4,519,571 $ 4,283,758 Expenses: Communication services Depreciation $ 990,147 $ 988,447 $ 825,788 Stock-based compensation expense 48,685 48,760 52,662 Other than acquired intangible assets amortization (1) 37,321 41,373 50,718 Acquisition and transaction related expenses 19,691 50,807 114,113 Ground network (FY25), satellite (FY24) impairment and related charges, net — 169,400 905,496 Other segment items (2) 2,051,254 2,049,920 2,009,817 Total communication services expenses (3) 3,147,098 3,348,707 3,958,594 Defense and advanced technologies Depreciation 48,368 48,020 41,853 Stock-based compensation expense 32,385 31,625 30,969 Other than acquired intangible assets amortization (1) 22,611 19,034 12,000 Acquisition and transaction related expenses 4,701 13,660 43,466 Other segment items (2) 1,016,280 892,072 859,517 Total defense and advanced technologies expenses (3) 1,124,345 1,004,411 987,805 Total expenses $ 4,271,443 $ 4,353,118 $ 4,946,399 Operating profits (losses): Communication services $ 152,553 $ ( 50,222 ) $ ( 817,054 ) Defense and advanced technologies 216,284 216,675 154,413 Elimination of intersegment operating profits (losses) — — — Segment operating profit (loss) before corporate and amortization of acquired intangible assets 368,837 166,453 ( 662,641 ) Corporate: Amortization of acquired intangible assets ( 260,712 ) ( 263,933 ) ( 227,165 ) Interest income 205,849 83,920 96,258 Interest expense ( 360,250 ) ( 421,944 ) ( 400,398 ) (Loss) gain on extinguishment of debt, net ( 11,935 ) ( 99,814 ) — Other income (expense), net 163,012 ( 9,976 ) — Income (loss) from continuing operations before income taxes $ 104,801 $ ( 545,294 ) $ ( 1,193,946 ) F- 54 VIASAT, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (1) Including amortization of capitalized cloud computing implementation costs. (2) Other segment items include operating expenses such as cost of service and product revenues, selling, general and administrative expenses, IR&D expenses and related activities excluding allocable portion of depreciation, other than acquired intangibles amortization, stock-based compensation, and certain significant items that are disclosed under each segment. (3) For fiscal years 2026, 2025, and 2024, IR&D expense and related activities, including allocable depreciation, stock-based compensation and other expense s were $ 93.1 million, $ 83.4 million and $ 105.0 million, respectively, for the communication services segment, and $ 71.8 million, $ 59.0 million and $ 45.7 million, respectively, for the defense and advanced technologies segment. The CODM is not regularly provided assets on a segment basis, therefore, such information is not presented. The Company distinguishes revenues from external customers by geographic area based on customer location. Revenues by geographic area for the fiscal years ended March 31, 2026, 2025 and 2024 were as follows: Fiscal Years Ended March 31, 2026 March 31, 2025 March 31, 2024 (In thousands) U.S. customers $ 3,161,146 $ 3,117,233 $ 3,029,303 Non U.S. customers (each country individually insignificant) 1,479,134 1,402,338 1,254,455 Total revenues $ 4,640,280 $ 4,519,571 $ 4,283,758 As of both March 31, 2026 and March 31, 2025, the net book value of long-lived assets located outside the United States was approxim ately $ 1.7 billion , including a net book value of long-lived assets located in the United Kingdom of $ 1.2 billion . F- 55 SCHEDU LE II VALUATION AND QUALIFYING ACCOUNTS For the Three Fiscal Years Ended March 31, 2026 Deferred Tax Asset Valuation Allowance (In thousands) Balance, March 31, 2023 $ 150,047 Charged to costs and expenses 139,687 Charged to goodwill* 63,908 Deductions — Balance, March 31, 2024 353,642 Charged to costs and expenses 76,859 Deductions — Balance, March 31, 2025 430,501 Charged to costs and expenses 4,482 Deductions — Balance, March 31, 2026 $ 434,983 * Related to the acquisition of Inmarsat II- 1