Mark D. Dankberg - ViaSat, Inc. Keven K. Lippert - ViaSat, Inc. Shawn Lynn Duffy - ViaSat, Inc. Richard A. Baldridge - ViaSat, Inc.

Mike Crawford - B. Riley & Co. LLC Rich F. Valera - Needham & Co. LLC Chris D. Quilty - Quilty Analytics, Inc. Ric H. Prentiss - Raymond James & Associates, Inc.

Good day, everyone. Welcome to ViaSat's Fiscal Year 2017 Second Quarter Earnings Conference Call. Your host for today's call is Mark Dankberg, Chairman and CEO. You may proceed, Mr. Dankberg. Mark D. Dankberg - ViaSat, Inc.: Okay. Thanks very much. Good afternoon, everybody, and welcome to our earnings call for our second quarter of fiscal year 2017. I'm Mark Dankberg, I'm the Chairman and CEO. And I've got with me this afternoon, Rick Baldridge, our President and Chief Operating Officer; Shawn Duffy, our Chief Financial Officer; and Keven Lippert, General Counsel; and Bruce Dirks, our Treasurer. And before we start, Keven will provide our Safe Harbor disclosure. Keven K. Lippert - ViaSat, Inc.: Thanks, Mark. As you know, this discussion contains 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, Mark. Mark D. Dankberg - ViaSat, Inc.: Okay. Thanks, Keven. So we've made lot of progress on several fronts since our last conference call. So we'll cover the main highlights on the financial results, and then we'll take some questions. Overall, we are really pleased with the company's financial performance. Our second quarter results in the Government segment were excellent, and our year-to-date results there are all records for new contract awards, revenue and earnings. We've got a lot of momentum in exciting growth areas in our Government Systems segment. Our Satellite Services segment continues to steadily grow ARPU, revenue, margins and adjusted EBITDA. That segment also continues to set records for financial performance. Long-term, we believe our global mobile broadband is an excellent application for us, one where we have competitive advantage in bandwidth economics, global coverage, flexibility and bandwidth allocation, the ability to focus, bandwidth on areas with high-demand density and high peak speeds, all address critically important end user needs. So we're really pleased with our recent success in the commercial in-flight Wi-Fi market. Since last quarter, we've added about 650 additional aircraft under contracts, with the largest chunk being to convert over 500 existing aircraft of the North American airline to our industry-leading Ka-Band Wi-Fi. They've requested that we not identify them yet, as they intend to make an announcement themselves. We think the upgrade speaks of volumes about the opportunities available to those airlines that embrace broadband Internet on behalf of their passengers, as well as the impact that passenger preferences for good connectivity has on choice of airlines. We believe our results reflect the value of bandwidth economics as a root source (02:45) of competitive advantage in multiple market segments; and we believe that the upcoming launch of ViaSat-2 and the progress on our ViaSat-3 class satellites creates the opportunity for even greater competitive advantage in our existing businesses, as well as operating expansion to new addressable vertical and geographic markets. And, finally, we've generated almost $200 million in cash flow from operations so far this year-to-date before investments in our new satellites. Earnings from our ongoing businesses continue to be the principal source of financing for our next three satellites under construction. So with that, I'll add a little color to each of these before Shawn goes into more detail on the financials. The results in our Government segment are pretty exceptional, given the defense market macro environment; and the second quarter was another very strong quarter for us. Compared to the same period last year, our revenues are up 21%, operating profit up 47%, adjusted EBITDA up 33%, and new awards were up 78%, helping create good opportunities for sustained growth. On a year-to-date basis, revenues are up 10%, operating profit up 32%, and adjusted EBITDA up 24%, all compared to first half of last year. New awards year-to-date are up 45%, also reinforcing our prospects for sustained growth. Results this quarter in the Government segment were boosted by strong order activity in multiple variants of tactical data link products, orders and shipments for several new recently certified IP network security devices, as well as continued good performance in government broadband mobility services. We believe we're seeing the cumulative effect of our sustained investments in new, high-impact information technology solutions that are contributing to near-term important operational requirements. Significantly, we're providing unique capabilities that can integrate IP network security, broadband satellite mobility, and resilient terrestrial data links to achieve urgent and timely mission requirement. Many of those capabilities continues to derive from our own R&D investments, well in advance of formal programs of record. For example, we're now seeing important opportunities to extend broadband satellite mobility to rotary wing aircraft, a large addressable market that can significantly improve the effectiveness with key elements of our fighting forces. We're also seeing significant recognition of the market share gains we're earning. We've moved up 12 spots in the latest defense news ranking of top 100 global defense companies. And we believe we're the only U.S.-based company in the rankings to show double-digit organic growth, even while the overall revenues for the top 100 as a whole dropped for the fifth straight year. We also earned the number one ranking in the communication segment of the Frost & Sullivan annual report on the Department of Defense C4ISR market, that's command, control, computers, communication, intel, surveillance and reconnaissance. Frost & Sullivan defines communications as (06:05) communications that allow operational commanders and war fighters the ability to coordinate operations. Other companies on that top 10 list include Harris, Raytheon, Northrop Grumman, General Dynamics, Boeing, Thales and Rockwell Collins. And we were ranked first with $755 million of awards in that category in 2015. Awards and revenues in Government Systems are lumpy, but we believe our results in this segment are indicative of a sustainable growth trend based on our unique combination of skills, our ability to transfer state-of-the-art satellite, networking technology into the defense market and effective investments in impactful technology areas. Moving on to our Satellite Services segment, that continues to show steady growth in revenue, adjusted EBITDA and operating profit. Pending the upcoming launch of ViaSat-2, we're now focused on continuous operational improvement and market testing to help optimize the yield on our existing bandwidth assets. Both second quarter and year-to-date results put us at an annual revenue run rate over $600 million a year in this segment. Adjusted EBITDA margins have reached 47% with an annualized second quarter run rate just shy of $300 million a year. While net subscribers declined slightly in the second quarter, residential ARPU is up sharply year-over-year by about 9%; and that's what's driving our growth. As we've identified in the past, ARPU is growing as a result of strength in our retail distribution, which accounts for a growing proportion of the subscriber base, higher value, higher bandwidth service plans and, especially more recently, the introduction of value-added subscription features that aren't bandwidth dependent. Our Satellite Services segment also continues to reflect the growing number of commercial aircraft using our in-flight Wi-Fi services. Our market success there creates additional opportunities for sustained profitable growth in Satellite Services. We also see additional opportunities for growth in new vertical markets and new geographic markets with the launch of ViaSat-2. Our commercial in-flight Wi-Fi business continues to make steady gains with about 650 additional aircraft under contract. We're making significant progress in defining the ubiquitous broadband in-the-air experienced the passengers will come to expect on every flight, and can only be achieved with the type of bandwidth scale and economics that we're creating. We anticipate that our North American airline expansion will impact the industry in a way that's good for both the passengers and the airlines. And we believe it's becoming more evident that more passengers are expressing their preference for good connectivity when given the choice on competitive routes. We're also really pleased to be working with some of the most forward-looking airlines in the world through our partnership with Eutelsat reaching SAS Airlines, Finnair and EL AL in Europe and working with NBN and Qantas in Australia. We're now truly global, leveraging a combination of the most powerful regional Ka-Band broadband satellites with our proven Ka/Ku antennas for ocean coverage. Our progress on the global ViaSat-3 class satellites creates excellent opportunities for sustained growth, competitive advantage and market leadership in the emerging global in-flight connectivity market. The schedule on the ViaSat-3 satellites line-up increasingly well with the fleet expansion plans of a number of leading airlines around the world. And the business case for a third ViaSat-3 to complete the global constellation is starting to come into focus. So with that background, I'll turn it over to Shawn, and she'll go into more detail on the financial results. Shawn Lynn Duffy - ViaSat, Inc.: Thanks, Mark. As Mark discussed, we're seeing excellent top line results in our Satellite Services and Government Systems business segment. More importantly, the operating leverage of our residential broadband and commercial air Wi-Fi businesses along with growth in higher-margin Government Systems businesses such as government mobility services is driving strong increases in adjusted EBITDA and, ultimately, operating cash flow. This cash flow is supporting a large portion of our existing satellite capital programs and strengthening our overall liquidity position. So let's look at some more details of our financial results on slide seven, which shows revenue and adjusted EBITDA by segment for the second quarter of fiscal 2017 compared to the same period last year. Revenues were up $46 million or about 13% from the prior period, with strong gains in product revenues of 14%, coupled with continued service revenue growth of 12% up year-over-year to over $200 million for the quarter. Thus, our service businesses are pacing to a new high of over $800 million annually. In Satellite Services, revenues reached another record of $156 million due to a combination of higher ARPU in our residential subscription business and higher tail count (11:23) in commercial air. These growth drivers, along with the existing sale of our consumer service business, allowed us to convert 75% of our year-over-year top line growth straight into adjusted EBITDA, with Q2 segment adjusted EBITDA margins now reaching over 47%. Our Government Systems segment also achieved record revenues of $177 million, a 21% increase from the prior year period. Contributors to growth were broad-based, with contributions across our data links and cybersecurity product line along with higher service revenues from ViaSat Wireless Services and government mobility services. And again, our adjusted EBITDA grew even faster reaching a new record high and increasing 33% from the prior period. Slightly higher product margins, coupled with continued gains in our higher-margin service base, were the primary contributors to this outsized adjusted EBITDA performance. In Commercial Networks, revenues were essentially flat from the prior period, but our adjusted EBITDA loss widened disproportionally due to a $10 million increase in research and development investment and lower product margins due to the mix between our more mature fixed networking platform products versus our emerging mobility products. The increase in R&D was associated with our next-generation consumer and mobility offering, as well as our advanced payload technologies. We expect the second half of the year to be a bit heavier as we accelerate FCC activities in support of the recent commercial air wins and ramp our payload development activities. So, overall, we are very pleased with our Q2 results. Looking at slide eight, we see revenue and adjusted EBITDA performance for our fiscal 2017 year-to-date period compared to the same period last year. I won't spend too much time on this slide as the MD&A in our 10-Q summarizes the key drivers, many of which are similar to the second quarter results I just discussed. I would like to highlight that the top line revenue had a year-to-date record of $762 million, up 9% over the same period last year. Our six months adjusted EBITDA also achieved a new record, up 6% year-over-year and up 19%, again, if we exclude the increase in R&D investment. Turning to slide nine, our income from operations for the quarter and year-to-date was up based on the overall increase in adjusted EBITDA, partially offset by a slightly higher depreciation and other non-cash expenses. And the highlight, if you back out the roughly $20 million first half increases in R&D, our year-to-date income from operations generation actually doubled year-over-year. Q2 GAAP and non-GAAP net income also increased from the prior year with our higher operating income, lower interest expense and an improved tax rate related to the federal R&D tax credit, which was not reinstated until Q3 of last year. These factors drove our non-GAAP income up 37% over last year; and our non-GAAP EPS to $0.40 per share, a 33% year-over-year increase. Regarding our cash flows, our year-to-date cash from operations had a new record high of $192 million, reflecting growth of $84 million from the prior period due to positive working capital changes, higher depreciation add-backs, and higher net income. Year-to-date capital expenditures were also up, approximately $125 million from the prior period, with our satellite expenditures for the first six months nearly totaling all above we spent for satellites in FY 2016. As I noted earlier, our operating cash inflows have been strong this year funding both the ViaSet-3 satellites under construction and our higher payments on ViaSat-2 satellite and gateways as we ready ourself for the upcoming launch of ViaSat-2. In terms of liquidity and leverage, we ended the quarter with $225 million outstanding on our revolver and $264 million drawn on our $387 million loan commitment from Ex-Im Bank. Overall, net leverage was 3.1 times trailing 12-month adjusted EBITDA, and that was essentially flat compared to the immediately preceding quarter. So our liquidity remains very strong. And combined availability of $670 million on the revolver and Ex-Im loan commitment and $51 million of cash on balance sheet. So with that, I'll turn it back over to you, Mark. Mark D. Dankberg - ViaSat, Inc.: Okay. Thanks, Shawn. So last month, October, was the fifth anniversary of the launch of the ViaStat-1 satellite, and that's a good time to take a look back and see how our Satellite Services business has evolved and how our thinking has evolved as well. So remember, when we started the ViaSat-1 project in 2008, we had a clear technology vision and a good grasp of the economic value of the bandwidth productivity, but we didn't have a retail go-to-market capability. Pretty much out of necessity, at that time we envisioned a wholesale-only business model with pricing and positioning that would be motivated by anticipated partnership with direct-to-home satellite TV providers. And our acquisition of WildBlue at the end of 2009 gave us the infrastructure and know-how to serve retail customers. But in October 2011, about five years ago, when ViaSat-1 was launched, WildBlue subscriber base was still about half wholesale and ARPU was only $44. So at that time, our view of the residential market was still very influenced by the direct-to-home perspective and then current views of retail positioning of satellite compared to, say, telco DSL. But as we really intended to do, we were able to demonstrate that the bandwidth economics of ViaStat-1 was transformational, and our consumer satellite business could go from being a service of last resort into a much more competitive offering that was superior to other technologies in certain underserved markets. And that became even more true as over-the-top video became an increasingly important component of broadband Internet. So in the last five years, we've been engaged in kind of a steady march-up market. The chart shows that we've grown ARPU to over $60. That's a compounded annual growth rate of 7%. And with the addition of only about 300,000 net additional subscribers, we grew revenue by almost a factor of three and we increased adjusted EBITDA by over a factor of four; and through the combination of scale and better market positioning, increased our adjusted EBITDA margins from about 30% to 47%. So we still place great value on our wholesale distribution partners, but now our ability to more effectively translate superior bandwidth economics into economically attractive consumer services is helping to create a virtuous circle where constantly improving satellite technology represents attractive growth opportunities on both the wholesale and the retail basis. And we believe our march-up market has been good for our customers, good for our distribution partners, good for our employees, good for our suppliers and good for our shareholders. We're really focused on – we're focused on something, hold on a second – really focused on improving our competitive position and the economic results for all of our stakeholders. Right now, we've got a little under 1% of the U.S. residential broadband market. Our approach to attractive economic growth is simple, we want to improve our service more productively than other alternatives in the places that we compete and more productively; meaning, yielding greater speeds and bandwidths per dollar of capital invested than competing alternatives, whether those alternatives are other satellite networks or terrestrial technologies. We're confident that ViaSat-2 and the following ViaSat-3 satellites accomplishes that goal. So while we're harvesting the benefits of ViaSat-1, we're simultaneously investing in new assets that we anticipate will both support our move-up market and increase our addressable market. Still the very little unit bandwidth cost and expanded geographic coverage of our new-generation satellites do create very interesting opportunities for us at the low ends of the market. So we're experimenting with new service offerings, and that could allow us to profitably serve many, many more subscribers at much lower ARPUs. So given that what we're investing on, let's take a look at what we're accomplishing with those investments in new-generations of satellite technology. The ViaSat-2 spacecraft is essentially complete. Boeing's completed functional performance testing and environmental testing. The satellite should be ready to ship next month, and the current nominal launch window with Arianespace is March and April of 2017. We've also completed our planned space/ground system integration testing to exercise the unique capabilities of that ViaSat-2 architecture. Test results have all been within plan, and we believe we've got good – have some upside potential relative to capacity and bandwidth economics. Our economic improvements come not only from the throughput of the satellite itself, but also by substantially reducing the size, cost and deployment expenses of the associated ground infrastructure. The image on the lower right is a two-scale representation of the teleport infrastructure required as we've progressed from the WildBlue era, to ViaSat-1 and then ViaSat-2. ViaSat-3 gateway teleports are on the far right. And that is a very important aspect of the ViaSat-2 and ViaSat-3 architectures because the number of teleports that you need to scale with the capacity of the satellites. We've not only reduced the size and cost, but we've made that gateway teleport infrastructure much more capable to deliver higher speeds with greater geographic coverage, greater bandwidth allocation flexibility, lower operating cost and higher end user liability than any other satellite. ViaSat-2 is expected to deliver bandwidth economics that are twice as good as ViaSat-1 and peak user speeds that can be more than double. We expect the ViaSat-3 class satellites to improve bandwidth economics, and peak speeds are almost a factor of four compared to ViaSat-2; and that means close to in order of magnitude compared to ViaSat-1. Each of the first three ViaSat class satellites is also designed to have visible earth coverage, which means about a third of the world. Each one would have about 100 times bandwidth of current state-of-the-art satellites designed for global coverage. Because the ViaSat-3 technology is substantially different from existing broadband satellites, we began investing in it several years prior to the actual start of the construction contract about a year ago. Since then, we've significantly ramped up our efforts and we've made great progress. We have pre-flight hardware for the payload electronics undergoing tests in our lab and preliminary results were consistent with our design objectives. The Boeing spacecraft bus is also proceeding according to plan. Integration between the payload and bus is proceeding with a complete preliminary design view planned for next week. So we're still maintaining our schedule for launch of the first spacecraft in 2019 with the second one about six months later. We've made concurrent progress on the corresponding ground infrastructure. We're excited and encouraged by the work to-date, and I've been able to share some of our progress with prospective partners and customers. The implications for competitive advantages are compelling. And as I mentioned before, the business case for the third satellite is starting to come into focus. Okay. So with that, I'll talk a little bit about our outlook. From a strategic perspective, the top level view of our outlook hasn't really changed very much. Of course, the strong orders and backlog refill year-to-date lend confidence in our revenue growth prospects both near-term and in the longer run. The chart that we have here is very similar to last quarters and is divided among our three reporting segments and into pre and post ViaSat-2 perspectives. In the near-term, pre-ViaSat-2, we anticipate that recent trends in Satellite Services revenue, ARPU and adjusted EBITDA would continue. With ViaSat-2 in service, we'd expect faster subscriber growth and correspondingly higher SAC expenses. We also anticipate starting to increase our activation rate of new commercial aircraft. In our Commercial Networks segment, we still anticipate growth in R&D expenses in the second half of this fiscal year on ViaSat-3 payloads, as well as to support the STCs for the growing number of commercial aircraft types we'll be supporting. And we've been anticipating growth in revenue and earnings in our Government segment, and this quarter's new awards performance lends confidence to that. And as we've said in the past, new awards in our Government business can be lumpy and timing can be difficult to predict. But our recent results are encouraging, not just for the contracts that we've already received, but also for the reasons underlying those awards, as well as the market acceptance we're gaining in broadband mobility, new tactical data links terminals and application and in IP network security. So that completes our prepared remarks, and we'd be happy to take questions.

Our first question comes from the line of Mike Crawford from B. Riley & Company. Your line is open. Mike Crawford - B. Riley & Co. LLC: Thank you. How would you characterize your ability to protect data at rest and data on-the-move in your ViaSat-1 network and in your forthcoming ViaSat-2 and ViaSat-3 networks? Mark D. Dankberg - ViaSat, Inc.: We'll divide that into two parts. One is on Government contracts. We have government-certified products that we use that we think are as secure as is possible basically. On Commercial Networks what we do is we can apply those same at rest or on-the-move security products that we think could provide – or we'd consider to be industry-leading processes and procedures to do the same thing. Mike Crawford - B. Riley & Co. LLC: Okay. So some of the recent waveform and other wins you have in the Government Systems segment, that may be applicable to traffic that in the future could be carried over at one of your commercial satellites, but not necessarily something that you could apply to your commercial services themselves? Mark D. Dankberg - ViaSat, Inc.: Yeah. I think you might be referring to a program that we announced – particularly a protected waveform demonstration. And those protected waveforms are really intended to deal with jamming environment, so you'd have a warfare environment with intentional jamming. And essentially, you (27:41) give you resilient (27:44) robustness to the jamming in exchange for essentially using more resources than you'd otherwise use. And in those situations, the jamming situations don't really arrive in the commercial applications. There's other threats that you describe as more cyber threats, and we were doing a bunch there, but it's really separate from those waveforms. Mike Crawford - B. Riley & Co. LLC: And then, just final question on that track. On the cyber threats (28:20) intentional or otherwise for your satellites? What can you use for that? Mark D. Dankberg - ViaSat, Inc.: Literally use for the cyber threats? Mike Crawford - B. Riley & Co. LLC: Yes. It's very much inside of your satellite networks for, say, RF interference or and the like? Mark D. Dankberg - ViaSat, Inc.: We could do that ourselves. Yeah. We have our own capabilities for that. Mike Crawford - B. Riley & Co. LLC: Okay. And then the last question is just on your Government Systems, which is now looking to be over $700 million business in and of itself this year, how do you see the mix of that revenue broken out between these components of data links, and information assurance, and mobility and anything else? Mark D. Dankberg - ViaSat, Inc.: It fluctuates a little bit, but the broadband mobility with a combination of services and products has really been the fastest growth for us, and that's now our single largest. The tactical data links has been second. And that one's really undergone a growth surge over the last year or two, and we see really a good growth in that area. It's been number two; it's still number two. And then the third one after that is the IP network security area. But again that one's undergone a pretty good growth spur as well, mostly because we've introduced this whole new series of products, but just recently during this fiscal year got government certification. And I'll put them in that border, but they're all growing at good rates; and a lot of growth rates can vary on a quarter-to-quarter basis. Mike Crawford - B. Riley & Co. LLC: Okay. Great. Thank you very much. Mark D. Dankberg - ViaSat, Inc.: Thank you, Mike.

Thank you. Our next question comes from the line of Rich Valera from Needham & Company. Your line is open. Rich F. Valera - Needham & Co. LLC: Thank you. And, Mark, I want to ask you about the CAGR of your service ARPU, which is obviously quite impressive since you've launched ViaSat-1. I think it is 7% CAGR on that ARPU since then over that five-year period. How should we think about that going forward? I guess, you probably won't have quite as much benefit from the significant shift you see in retail, but still presumably have ways to continue to grow that. So just wondering how we should think about that as we look out over the next couple of years? Mark D. Dankberg - ViaSat, Inc.: Yeah. It's a good question. I mean, one is obviously as you get a bigger and bigger subscriber base, it's more and more challenging to maintain that growth rate. What we think is, there have been different drivers for that growth rate over different periods of time. And it looks like a pretty smooth march upwards, but it's really been due to different factors being introduced at different times. Differences, one, early on was the shift from half wholesale, half retail, to a greater proportion of retail. And you saw that kind of take effect probably for the first year or two of ViaSat-1 going in service. Probably over the last two or three years, one of the big factors has been us realizing that people really want more bandwidth. And so, we've introduced these higher value plans that was – then that has been a driver. The other things that we've done in addition to that have been to introduce some of these features that are less bandwidth-dependent, and those would be things like VoIP, speed boost, being able to buy a 25-megabit per second version; and then things like Wi-Fi services and, I'd say, premium customer care options. So I would say that last set of things has more running room. As we improve those and add more variety to those, that has more running rooms. Once ViaSat-2 lunches, I think the service plans, speed, pricing will give us some (32:41) there. The counterbalance to that is – I wouldn't be surprised to see an up-tick in wholesale services. That's definitely possible when ViaSat-2 goes into service. We'd have to balance that. It's a little bit hard for us to predict what the exact numbers will be, but I think if you go back and tease out those effects, you can build models around those. Rich F. Valera - Needham & Co. LLC: Got it. And then, similarly in terms of sort of looking back at ViaSat-1 as potentially any gauge here, you mentioned first ViaSat-2 that you expect I think roughly similar churn to what you're seeing, and I wanted to make sure I don't put words in your mouth, plus some incremental migrations. And I'm wondering, one, is the churn level you're referring to there kind of consistent with what you've been seeing which has been around 2.5%. And then as far as incremental sort of migrations, do you think it would be instructive to look back at what happened when you went from WildBlue to ViaSat-1 in terms of how those migrations might trend or might things be different at this time? Mark D. Dankberg - ViaSat, Inc.: Okay. Yeah. Those are good questions. So on the churn, I think what we think we're doing with – we're aiming to do with ViaSat-2 is on the service plans to introduce – I'd say, we're trying to introduce elements that should improve churn. Well, so again, churn comes in two flavors for us, voluntary and involuntary churn. The involuntary churn, we think, is really a little bit of a macroeconomic effect and also a little bit due to the attractiveness of our service plans where we can attract people who otherwise couldn't keep their, say, cable plan, they wouldn't have switched satellite now. I think some of the people do still sometimes struggle to pay their bills on time. So the involuntary element of churn probably won't move that much as a result of the service improvement. But we'd like to draw the voluntary component down, but we'll have to get data on that. On the migrations, overall, I think migrations should be less pronounced when we go from ViaSat-1 to ViaSat-2, than when we went from WildBlue to ViaSat-1. And the reasons for that are, number one, instead of looking at like a 20x improvement in satellite capacity and the 10x improvement in service plans. Now we're like a 2x improvement in satellite capacity, which means that our ability to fulfill those plans (35:35) satellite is higher. And so, the need to migrate people is lower. So I think migrations would probably be less pronounced than in the past. Rich F. Valera - Needham & Co. LLC: Got it. Thank you. And I was wondering if there was any color or guidance you're willing to give either for the rest of this year and/or 2018. Sounds like, one, bit of guidance you gave that you're expecting I think investment – I'm not sure if that's just the R&D line – to be higher in the back half as you ramp up some investment there. But is there anything you won't say about fiscal 2017 as a whole in terms of EBITDA and/or investment, any guidance there would be helpful? Mark D. Dankberg - ViaSat, Inc.: No. I don't think we're going to give anything anymore explicit. I think what we would say that is, based on the order, the new award activity, you can think we probably do higher revenues, but then that will be – just to Shawn's point, that will be offset to I think an extent by larger investments. Rich F. Valera - Needham & Co. LLC: Okay. We'll work with that. Okay. Thank you. Mark D. Dankberg - ViaSat, Inc.: Thanks, Rich.

Our next question comes from the line of Chris Quilty from Quilty Analytics. Your line is open. Chris D. Quilty - Quilty Analytics, Inc.: Thanks. Mark, a quick question on Government business, really impressive results, but obviously we've got a continuing resolution in place I mean, and every year is a continuing resolution. But do you see any particular headwinds from that that you expect? And is this worse than CRs in the past or just sort of a repeat of what of what you've dealt with every fall? Mark D. Dankberg - ViaSat, Inc.: I think it's more a repeat of what we've been dealing with. I think there's always uncertainty when it comes to new budgets and changes in administration. I think we've got a – so one thing is you can look at perhaps a combination of programs of record and sort of commercial type programs that we've created. I think we've gotten pretty good at understanding what the funding mechanisms will be and how to navigate that. So we're not expecting a dramatic departure from what you've seen in the past. There's some cyclicality to our orders in the Government business that you can sort of see on a year-to-year basis. And I think that grossly you would be consistent with that. Chris D. Quilty - Quilty Analytics, Inc.: And are there any big programs we should focus on over the next 12 to 24 months that you think are particularly attractive? Mark D. Dankberg - ViaSat, Inc.: I think that a lot of the growth opportunities that we're seeing are really somewhat unique due to the things that we're doing that aren't programs of record, and some of them had some, we think, really exciting opportunities. We've talked about some of those in the past, things like Handheld Link 16, as an example. But those are the kind of things where the timing is unpredictable because they're not necessarily programs of record. Chris D. Quilty - Quilty Analytics, Inc.: Got you. And I know you don't yet have a launch date for ViaSat-2, but when you get that date, can you remind us what's the expected time to orbit – or sorry, basically to bring the satellite in service and the orbit raising. I think this is an electric propulsion for orbit raising or is it chemical? Mark D. Dankberg - ViaSat, Inc.: It's a blend of the two. So it's not as long as purely a electric propulsion orbit raise would be. The only thing that's really changed what we've been talking about is kind of the first quarter launch and a midyear-ish service launch. So the only thing that's really changed is, over the summer, one of Ariane's launch customers satellite was damaged in transport, and that, probably in about the September-October timeframe, kind of led to about a three-week delay in Ariane manifest. So our launch window, which was March, has sort of shifted to last week of March, first three weeks of April. And so, you'd sort of think of shifting things kind of by that. Nothing else has really changed. Chris D. Quilty - Quilty Analytics, Inc.: Okay. And on the thrusters, tell me you're not using the same vendor that supplied for the Intelsat 33e and the MUOS-5. Mark D. Dankberg - ViaSat, Inc.: That is correct. We're not using the same thrusters. Chris D. Quilty - Quilty Analytics, Inc.: Okay. And final question. I know your new aviation customer hasn't yet been announced, but can you give us a sense of timing of when you expect that program to kick-in? And what provisions you need to undertake in order to be able to service that many aircraft? I mean, is this a 12-month rollout or a two-year rollout? Mark D. Dankberg - ViaSat, Inc.: I think we've said in the release that the installs will begin about the middle of 2017... Richard A. Baldridge - ViaSat, Inc.: Yeah. Next summer. Mark D. Dankberg - ViaSat, Inc.: Yeah. Right. It's about a year-and-a-half? Richard A. Baldridge - ViaSat, Inc.: Yeah. Year-and-a-half to two years. Mark D. Dankberg - ViaSat, Inc.: Yeah, in that range. And I think we've sort of seen really good market reception for what we've been doing. So one of the things we've been working on are basically getting ready for these STCs type certificates, especially both retrofits and linefits. So we still have a bunch of work to do, but that's probably the single biggest element. Richard A. Baldridge - ViaSat, Inc.: And our network already is scale (41:31) and I think we had 60,000 flights in the last 30 days. I mean we're managing a pretty broad diverse set of airplanes every day (41:42). Mark D. Dankberg - ViaSat, Inc.: I think the other thing that you're going to see and I think we're well prepared for, that you'll see with a lot one of these newer customers and new rollouts is different user interface, user experience that I think will feature more of our capability and technology. I think that will also help a lot. And I think we're well prepared on that as well. And the other area – and you've seen this on our Virgin America rollout and I think this is another area that we will reinforce – is the integration of in-flight entertainment with the connectivity. So that's another element that you'll see across these. Again, we talked about our investments, R&D investments; it's really in support of these kinds of (42:36) rollouts. Chris D. Quilty - Quilty Analytics, Inc.: So this is basically you creating your own wireless IFE platform or hardware to provide a fully bundled solution? Mark D. Dankberg - ViaSat, Inc.: Yeah. So there is a two parts to it. One would be where you do IFE fully wirelessly. The other part is like we did on Virgin America, where there is an existing seatback entertainment supplier; and we then can feed that seatback entertainment with either stored or live content. So we're looking at all those mixes. Chris D. Quilty - Quilty Analytics, Inc.: But you're not getting into the content side, are you? Mark D. Dankberg - ViaSat, Inc.: No, we are not the content provider. We do facilitate content availability to the airlines. So, for instance, with Virgin America, we help to range a content contract that Virgin could use and that then we can source. We're not going to go up and acquire content. We don't intend to do that, but we'll certainly help the airlines present content they would like. Chris D. Quilty - Quilty Analytics, Inc.: Got you. Thanks. Mark D. Dankberg - ViaSat, Inc.: Thank you, Chris.

Thank you. Our next question comes from the line of Ric Prentiss from Raymond James. Your line is open. Ric H. Prentiss - Raymond James & Associates, Inc.: Thanks. Good afternoon. Mark D. Dankberg - ViaSat, Inc.: Hey, Ric. Ric H. Prentiss - Raymond James & Associates, Inc.: Hey. Couple of questions. I know you mentioned lumpy a couple of times with the Government, but it was an impressive quarter for Government and the awards are impressive too. How should we think about this quarter run rating and the timing of those awards and backlog? Mark D. Dankberg - ViaSat, Inc.: So, yeah, awards are lumpy. I wish we could do this (44:20) like this every quarter, but we probably won't. I think if you look at DoD, let's say, contract awards across our space, I think you'll see they tend for many of the contracts, (44:39). When you look at the types of awards that those contractors got, they tend to be higher in the September quarter, but ours were pretty – they were really strong for that class of business, for that area. We're in the C4ISR area. But that September quarter is an exceptional quarter. That's why I mentioned before that if you look at sort of our cyclicality that you can get more of a sense of what's probably likely for the year as a whole. But we do feel like it represents kind of a step-up in where we've been in the last year or two in Government business. Richard A. Baldridge - ViaSat, Inc.: I think the way you put it (45:26), Mark, was that, our outlook for year – our view of the year hasn't really changed materially, but our confidence in achieving that has gone up. Mark D. Dankberg - ViaSat, Inc.: Yeah. Ric H. Prentiss - Raymond James & Associates, Inc.: Okay. So seasonality still there, cyclicality, a step-up from where you're at, but this gives you confidence. Okay. And then on the aviation customer, what's involved with the installs from the financial side? Is there CapEx? How are you going to book the items as far as are they going to be purchasing the equipment or is it coming through service. Just trying to think how we want to prepare the model for that large install that will start happening in mid-2017? Mark D. Dankberg - ViaSat, Inc.: We can't comment on this one in particular, but what has happened with us in the past in general as a model is that there is an equipment sale component of it and there is a recurring services revenue component; and that those would be the two main things. And then the other thing that we've talked about is the R&D expenses that are associated with type certificates or new capabilities that we're bringing to market like IFE/IFC integration. So I think those will be the three ways to think about it. Ric H. Prentiss - Raymond James & Associates, Inc.: Okay. Thanks so much. Mark D. Dankberg - ViaSat, Inc.: Thank you, Rick.

Mark D. Dankberg - ViaSat, Inc.: Okay. Actually I think we've pretty much covered everything and we really appreciate everybody's attendance and time, and look forward to speaking again next quarter.

Ladies and gentlemen, thank you again for your participation in today's conference call. This now concludes the program and you may all disconnect at this time. Everyone, have a great day.