Viasat's Q2 Earnings and Strategic Momentum in Defense and Aerospace: A Case for Re-Rating

Viasat, Inc. (VSAT) has long been a rollercoaster for investors, but its recent strategic moves and government contract wins could finally tip the scales in favor of a re-rating. While Q2 2025 earnings showed a 1% year-over-year revenue decline to $1.12 billion and adjusted EBITDA fell 6% to $375 million Yahoo Finance Earnings Call, the company's pipeline of defense and aerospace innovations-coupled with a $4 billion IDIQ contract from the U.S. Space Force-suggests the market may be underestimating its long-term potential. Let's break down why this could be a pivotal moment for Viasat.

Government Contracts: A $4 Billion Bet on Viasat's Resilience

The most significant development for Viasat in 2025 is its selection as a prime contractor for the U.S. Space Force's Protected Tactical SATCOM-Global (PTS-G) program Yahoo Finance Space Force Contract. This IDIQ (Indefinite-Delivery/Indefinite-Quantity) contract, aimed at building a secure, anti-jam satellite constellation, is a testament to the company's technological edge in defense communications. While the contract won't immediately fix Viasat's near-term cash flow issues, it positions the firm as a critical player in the U.S. government's push for resilient, next-generation satellite infrastructure.

Additionally, Viasat's recent win to develop a high-assurance data encryptor for classified government cloud centers Sharewise Zacks Earnings underscores its growing role in cybersecurity. These contracts, combined with its existing $1.3 billion in record awards for FY2025 Yahoo Finance Earnings Call, create a backlog that could stabilize revenue streams over the next 3–5 years.

ViaSat-3 and HaloNet: The Satellite Revolution Gains Altitude

The ViaSat-3 satellite program remains a cornerstone of Viasat's growth story. The company's Flight 2 satellite, delayed by a technical issue with the Atlas V551 rocket, is now expected to launch within a week Investing.com Earnings Call Transcript. Once operational, this satellite will expand Viasat's global coverage and capacity, particularly in defense and aviation.

But the real game-changer is HaloNet, Viasat's new modular network that integrates space and terrestrial systems into a unified platform. This innovation enables low-latency, secure communication for critical applications like Telemetry, Tracking, and Command (TT&C) data relay via L-band Sharewise Zacks Earnings. HaloNet isn't just a satellite network-it's a bridge between space and ground, offering use cases that span military operations, aviation, and even 5G backhaul.

Valuation and Analyst Sentiment: Is the Market Missing the Forest for the Trees?

Despite Viasat's strategic momentum, the stock remains under pressure. Analysts project a 62-cent-per-share loss for Q2 2025 Reuters Earnings Preview, with a "hold" rating dominating the consensus. However, forward-looking metrics tell a different story. Viasat's future P/E ratio is expected to rise from 13.0x to 14.1x by 2025 Reuters Earnings Preview, reflecting growing confidence in its ability to monetize its satellite infrastructure.

The Zacks Consensus Estimate for Q2 2026 revenue is $1.14 billion Sharewise Zacks Earnings, aligning with the company's focus on capital discipline and multi-orbit competitiveness. While short-term profitability is a concern, the long-term value of contracts like PTS-G and the scalability of HaloNet could justify a higher multiple.

The Bottom Line: A Re-Rating Awaits Execution

Viasat's Q2 earnings may not dazzle, but its strategic positioning in defense and aerospace is formidable. The company is not just selling satellites-it's building a platform for secure, global connectivity in an era where data is the new oil. The key risk is execution: delays in ViaSat-3 launches or cost overruns in government contracts could derail momentum.

However, for investors with a 3–5 year horizon, Viasat's current valuation appears to underprice its potential. The stock's recent "hold" rating may be a buying opportunity for those willing to bet on the company's ability to capitalize on its government partnerships and technological edge.