Satellite communications company Viasat (VSAT -6.70%) posted an unexpected quarterly loss, though the company's free cash flow was significantly better than expected.

Investors are focused on the headline number, sending Viasat shares down as much as 8% at the open and down 3% as of 10:15 a.m. ET.

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A work in progress

Viasat lost $0.02 per share in its fiscal fourth quarter, ended March 31, on revenue of $1.15 billion, compared to Wall Street's expectations for a $0.04-per-share profit on slightly lower revenue. The company's $246 million net loss included a $169 million noncash write-down related to Viasat's Europe and Middle Eastern ground network.

Defense sales grew by 11% in the quarter, but Viasat's communications services sector saw sales fall by 4%. Viasat did post a positive $51 million in free cash flow in the period, much better than the $75 million negative free cash flow that Wall street had expected.

Is Viasat stock a buy?

The big news from the report is a slight delay in Viasat's plan to deploy its latest generation of satellites. The first of these VS3 satellites is already in service, but satellite two has been pushed back to early 2026 from late 2025.

There are a lot of moving parts here, including a $5 billion pile of debt offset by $1.61 billion in cash and another $1.14 billion in borrowing capacity. Viasat expects about $1.3 billion in capital expenditures in its new fiscal year, implying a slight cash burn is likely in 2026. There is also new competition in the sky from the likes of SpaceX's Starlink and others.

The bull case from here is Viasat uses the current fiscal year to ramp up its business while continuing to manage its debt, putting it in place for positive free cash flow by 2027.

If that plays out the stock can likely take on additional altitude as well. But investors need to understand a lot can go wrong, and keep Viasat to a small part of a diversified portfolio if they decide to buy in.