Telesat Q1 2025 Earnings Call Transcript

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May 6, 2025

There are 9 speakers on the call.

Operator

please continue to stand by. The conference will begin momentarily. Once again, please continue to stand by.

Operator

This conference is being recorded. All

Speaker 1

participants please stand by. Your conference is ready to begin. Good morning, and gentlemen. Welcome to the conference call to report the First Quarter twenty twenty five Financial Results for Teleset. Our speakers today will be Dan Goldberg, President and Chief Executive Officer of Teleset and Andrew Brown, Chief Financial Officer of Telesat.

Speaker 1

I would now like to turn the meeting over to Mr. James Ratliff, Vice President of Investor Relations. Please go ahead, sir.

Speaker 2

Thank you, Mode. Good morning, everyone, and thank you for joining us today. Earlier this morning, we filed our quarterly report for the period ending 03/31/2025, on Form six ks with the SEC and on SEDAR plus Our remarks today may contain forward looking statements. There are risks that Telesat's actual results may differ materially from the results contemplated by the forward looking statements as a result of known and unknown risks and uncertainties. For a discussion of known risks, please see Telesat's annual report and updates filed with the SEC.

Speaker 2

Telesat assumes no responsibility to update or revise these forward looking statements. I would now like to turn the call over to Dan Goldberg, Telesat's President and Chief Executive Officer.

Speaker 3

Okay. Thanks, James, and thank you all for joining us this morning. My opening remarks today are going to be quite short given we hosted an earnings call just six weeks ago when we released our Q4 and full year numbers. I'm pleased with Telesat's performance in the first quarter in both our GEO and our LEO segments. In GEO, the team continues to demonstrate disciplined execution in a challenging market environment.

Speaker 3

And in LEO, we're making excellent progress with Telesat Lightspeed on both the technical and commercial fronts. In addition to the agreements with Orange and ADN that we announced earlier and the term sheet with Space Norway announced in March, we signed a significant multi year agreement with ViaSat in April, just last month. ViaSat is a sophisticated satellite operator and service provider and is today the largest provider of in flight broadband connectivity services to the commercial airline industry and an important provider for defense applications, including to the US government. As such, the meaningful commitment to Telesat Lightspeed that they've made is a powerful and concrete testimony to the capabilities of the Lightspeed constellation and the huge opportunity we have in the fast growing enterprise and government service markets. The last time we spoke, I said we believed our LEO backlog at the end of twenty twenty five would eclipse the CAD 1,100,000,000.0 of GEO backlog that we reported at the end of twenty twenty four, assuming foreign exchange is more or less stable.

Speaker 3

We're at nearly CAD 1,100,000,000.0 in LEO backlog today, and I'm optimistic we'll be able to secure additional commitments over the balance of this year, which would allow us to achieve our LEO backlog expectations. We have a robust pipeline of opportunities and strong momentum and are very focused on closing additional deals. So with that, I'll hand over to Andrew, who will speak to the numbers in more detail, and then we'll open the call up to questions.

Speaker 4

Thank you, Dan. Good morning, everyone. I would now like to focus on highlights from this morning's press release and filings. In the fourth quarter of twenty twenty five, Telesat reported consolidated revenues of 117,000,000 adjusted EBITDA of $67,000,000 and generated cash from operations of $139,000,000 We ended the quarter with $797,000,000 of cash. For the first quarter of twenty twenty five, revenues decreased by $35,000,000 to $117,000,000 from the first quarter of twenty twenty four.

Speaker 4

Operating expenses increased by $6,000,000 to $53,000,000 and adjusted EBITDA decreased by $43,000,000 to 67,000,000 The adjusted EBITDA margin was 57.7%. I would note that the margin in our GEO segment was approximately 74%. The revenue decrease for the quarter was primarily due to a lower rate on the renewal of a long term agreement with a North American direct to home customer. Other factors included reductions in services for certain enterprise customers, particularly in Indonesian rural broadband program and lower equipment sales to Canadian government customers. The increase in operating expenses was primarily due to increased headcount at Telesat Lightspeed along with higher legal and professional fees, partially offset by an increase in capitalized engineering costs and lower share based compensation.

Speaker 4

As usual, we break out the performance of our LEO and GEO segments separately in Note four of our financial statements filed on our Form six ks this morning. Interest expense decreased by $8,000,000 during the fourth quarter when compared to the same periods of 2024. The decrease in interest expense was primarily due to the impact of our debt repurchases, along with the impact of lower market rates on our floating rate term loan. And just to note, our cumulative principal amount of debt repurchases to date is USD $849,000,000 at a cost of USD $459,000,000, an average price of just under $0.53 This also results in interest savings of approximately USD 54,000,000 annually.

Speaker 5

In the first quarter, we recorded a gain on foreign exchange of 2,000,000 as compared to

Speaker 4

a loss of $68,000,000 in the fourth quarter of twenty twenty four. Our net loss for the fourth quarter was $51,000,000 compared to a net loss of $52,000,000 for the same period in the prior year. The variance was due to lower revenues, a loss related to a change in the fair value of financial instruments and offset with the impact of the year on year foreign exchange improvement, as I mentioned. For quarter one twenty twenty five, the cash inflows from operating activities were $139,000,000 and the cash flows used by investing activities were $235,000,000 In terms of capital expenditures incurred, almost all related to Telescience Lightspeed. Also during the quarter, we completed the first two draws on our financing facilities the governments of Canada and Quebec, thus receiving C340 million dollars Guidance, as you will also have noticed in our earnings release this morning, we have reiterated our guidance for 2025.

Speaker 4

The guidance assumes a Canadian dollar to U. S. Dollar exchange rate of CAD1.42. For 2025, we continue to expect full year revenues to be between $4.00 5,000,000 to $425,000,000 In terms of operating expenses, excluding share based compensation, we expect to spend approximately $110,000,000 to $120,000,000 on Telesat Lightspeed this year as compared to $72,000,000 in 2024. In terms of total adjusted EBITDA, we expect to be between $170,000,000 to $190,000,000 on a consolidated basis.

Speaker 4

In respect to capital expenditures and as previously disclosed and discussed, we continue to expect our 25 capital expenditures to be in the range of CAD 900,000,000 to CAD 1,100,000,000.0, which is practically all related to Telesat Lightspeed. To meet our expected cash requirements for the next twelve months, including interest payments and capital expenditures, we have approximately $800,000,000 of cash and short term investments and at the March, as well as $2,200,000,000 available under our funding agreements with the governments of Canada and Quebec. At the end of the fourth quarter, the total leverage ratio is calculated under the terms of the amended senior secured credit facilities of 7.24x. Telesat is in compliance with all the covenants in our credit agreement and indentures. A reconciliation between our financial statements and financial covenant calculations is provided in the report we filed this morning.

Speaker 4

Our six ks provides the unaudited interim condensed consolidated financial information in the MD and A, The non guarantor subsidiaries shown are essentially the unrestricted subsidiaries with minor differences. So this concludes our prepared remarks for the call. I'm very happy now to turn back to the operator and address any questions you may have. Thank you very much.

Speaker 1

Thank you. We will now take questions from the telephone questions. Our first question will be from Addison Yu from Deutsche Bank. Please go ahead.

Speaker 5

Hey, this is Laura on for Addison. Thank you. Thanks for taking my question. And actually my question is about LiveSpeed outlook. So back in late twenty twenty three, I think you put out some revenue EBITDA targets for LiveSpeed, including like $600,000,000 revenue in 2028 and April EBITDA, and also like more than like $3,000,000,000 revenue in 02/1932 and $2,700,000,000 EBITDA.

Speaker 5

So I think without a doubt, a lot has happened since then. So I guess my question is how are you feeling about those targets and the assumptions and opinion them? And also, do you think there are any variables that are much different than expected? And also, when you might consider updating this framework?

Speaker 3

Okay. Thanks for the question. It's Dan. I'm not sure I heard everything, but I think I got the gist of it. So we have published some projections for light speed, revenue, EBITDA, CapEx and the like as part of an investor presentation that we did.

Speaker 3

That's available on our website. And yes, that's still very much our plan, our current thinking in terms of our expected performance. In terms of variables, I'd say that things are still very much intact in terms of our outlook regarding our performance. Certainly, the build out of the constellation is going to plan and our partners are executing well across all the various work streams that we have and things are from a budgetary perspective, a schedule perspective are proceeding consistent with our expectations. And then the market itself, I think if anything, we've probably referred to this in recent calls, from our perspective, everything we're seeing out there in the market reinforces our conviction that LEO is sort of ascendant in the market.

Speaker 3

And I think I said on our last call that in addition to the verticals that we're focused on, backhaul for terrestrial wireless operators, maritime, aviation, aero, probably the one vertical that we're even more bullish on than we were when we put the plan together. It's probably around our government services, particularly in light of some of the geopolitical shifts that we've seen over the last six months or so. And so, yeah, I think our thesis remains intact. And while there are always changes out there in the environment, I think on balance, if anything, we have greater conviction about our ability to deliver on our plans and our projections.

Speaker 5

Okay, got you. Yeah, I appreciate the color.

Speaker 3

Thank you.

Speaker 1

Thank you. Our following question is from Chris Quilty from Quilty Space. Please go ahead.

Speaker 6

Thanks, Dan. Just wanted to follow-up on that government question. You've had a couple of recent hires in that area. Can you just perhaps outline for us what your government go to market strategy looks like and where you expect to focus those efforts domestically,

Speaker 7

internationally?

Speaker 3

Thanks Chris. So with respect to government, our focus naturally is with allied governments. That's certainly the focus. In Canada, we're a Canadian company. We've engaged with the government of Canada for decades and decades.

Speaker 3

So that's kind of a very much of a direct kind of go to market activity. In The US, there again, we've been providing services to the US government for decades as well. We do have our own kind of foreign mitigated entity down there as a Canadian company to do business directly with the US government. There are advantages to setting up a kind of a proxy company, a foreign mitigated entity that has its own board to mitigate any kind of foreign influence. We have that in place and we made, I think, an announcement maybe just last week about a new senior addition to the team there.

Speaker 3

We have, I think really good leadership, that's running that organization and a good, board of directors that provides supervision. So there, with the US government market, we're positioned and have taken the steps to do business directly with the US government. But we'll gladly work with all of the longtime service providers and US government integrators that we've worked with for decades. And so, whether it's the proliferated LEO RFP that's out there, We think that Lightspeed is really well architected to meet the needs of governments, including the US government. And so we're very open to working with partners, long standing partners, new partners as well to serve the US government.

Speaker 3

And then I'd say around the rest of the world, it's kind of the same. There are many allied governments that we've done business directly with over the years. For sure, it'll be the case that there are domestic players in each of those markets that will be great partners for us. And here again, we think that LightSpeed brings something compelling to the government services market. Anyway, Chris, that's how we're thinking about it.

Speaker 6

And I'm assuming it's a combination of both direct and partnering in terms of the go to market with the government customers?

Speaker 3

Yep. That's exactly right.

Speaker 6

On Lightspeed, I think we're still on track for first satellite deliveries in the next year. But what are the next major well, maybe one or two major milestones we should be watching for?

Speaker 3

Yes. Well, to be clear, we're expecting our first launch to be toward the end of next year. So the first satellite delivery will technically be earlier than that. So we've got a critical design review with NDA in a couple of months. Six months.

Speaker 3

Six months time. So towards the end of this year, that's something that is an important milestone. We feel good about it. What else? Pay attention to landing station announcements.

Speaker 3

We've announced one or two so far, but there will certainly be more of those throughout the course of this year. And next year, we've made some announcements around user terminal development, and we'll update folks on that. And then I'm just trying to think. I mean, those will be the things that will be obvious kind of from the outside looking in. Yeah, I'd say those are things.

Speaker 3

And then obviously, once we get into next year, we'll be taking satellite deliveries and then we'll have a launch. So we're not that far off. My colleague, Michel Farre, our CTO is pointing out we're building pretty close to our headquarters here across the river in Quebec, a facility where we'll do satellite flight ops. NOC will be there. We'll have a data center there.

Speaker 3

There'll be a cyber facility there. So anyway, and that's expected to come online toward the end of this year. So anyway, we're super busy but making really good progress across all the different important work streams. So yeah, it's very gratifying.

Speaker 6

Great. You mentioned on the user terminal and maybe just to focus on the IFC portion of that. I think right now you've got two solutions in ViaSat with their existing terminal and Fincom, which is the Airbus solution that are both electromechanical, how important do you think it is to have all electronic Ka market or do you think eventually we'll see a combination? Again, maybe your thought on LEO only versus multi orbit, just in terms of architecture that airlines will adopt.

Speaker 3

Yeah, listen, I think it's a positive for sure that many of the existing antennas that are out there are kind of backwards compatible with light speed. It just makes it so much easier for us to hit the ground running with our partners because all of these planes today that have, you mentioned the Thincom antenna, there's the ViaSat antenna, those are light speed compatible. So it's kind of a built in addressable market from day one. That's great. ViaSat announced that they're making their own ESA, which is going to be light speed compatible.

Speaker 3

It's going to be a multi orbit antenna from what I understand. We announced, I think earlier this year, maybe it was late last year that we're working with KEST for an all ESA, electronically steerable antenna for the aero market. There are other players out there as well that are building ESA antennas for the aero market for both commercial and for private jets. So long as some of those are Ka band and some of them are Ka band, those should be fully compatible with light speed. And I think it's important that those antennas exist.

Speaker 3

I think the airlines are attracted to them because they're lighter weight. They can have a lower profile, which makes them more fuel efficient and the like. And so the airlines like those. And then with respect to multi orbit versus LEO only, I mean, the end of the day, the airlines will decide what meets their interest best. And different players are taking different approaches to this.

Speaker 3

So we're gonna see it play out real time, ViaSat. And we're very pleased with the agreement that we announced with ViaSat last month. That'll be a multi orbit offering. Clearly, ViaSat's the largest provider of in flight connectivity services to the commercial market today. And they're on the front lines there and it's clear a lot of their customers are excited about having a multi orbit solution.

Speaker 3

Equally, there are others that are turning to Starlink, which is obviously a LEO only solution. And so I think for Lightspeed, we're happy if Lightspeed is leveraged in a LEO only way. I've heard integrators and some airlines talking about LEO LEO solutions. So they would work potentially with two LEO providers just for the incremental resiliency and redundancy and the like. So we'll see how it plays out.

Speaker 3

But again, I think from Telesat's perspective, whether it's multi orbit, whether it's LEO only and for sure, we think there are real advantages. We think LEO is a great value prop for the aeronautical market and for some of the other verticals too. But we think we're well positioned in either setting multi orbit, LEO only. And we've really designed Lightspeed to provide really compelling service for the Aero segment. And yes, so we're pretty bullish around that.

Speaker 2

Great. And if I

Speaker 6

can, a final question. I mean, the LEO backlog went up $600,000,000 sequentially. If I assume 80% is ViaSat, it's a $05,000,000,000 deal. Are there other customers out there of that scale? Or do you think obviously, I guess we should assume ViaSat was the biggest potential customer since they're the largest IFC provider.

Speaker 6

But what should we think about in terms of other customers? Are there out there are there customers out there that are 9 figure customers? Are we looking at higher group of deals that you expect to announce?

Speaker 3

It's a great question, Chris. I think it's going to be a mix. I think the ViaSat contract is a very meaningful contract. I think that there will be other commercial players out there that will sign significant deals. Maybe they'll be they won't quite be at the ViaSat level, but they could be still in kind of that nine figure kind of zip code.

Speaker 3

When I think about conversations that we're having and what the pipeline looks like. And then there's the government segment. And I think that there could be meaningful commitments around there too. Government opportunities are always a little bit harder wait just because you're dealing with governments. And so there's always more complexity there.

Speaker 3

But we know that the government requirements are significant. We know that the US government, that the allies the US government are all talking about increasing their defense spending to meet their NATO commitments. We know that space is kind of front of mind for so many of these allies as they've seen, for instance, the conflict play out in The Ukraine. And so we think that there could be some very meaningful opportunities for Lightspeed in the government services market, kind of being specific around the timing of those, the quantum of those is always a little bit hard. But for the avoidance of doubt, we're very bullish on our opportunities there and think that that's going to be a meaningful part of the Lightspeed business, including kind of prelaunch business.

Speaker 3

So anyway, tuned.

Speaker 6

Very good. Thanks, Dan.

Speaker 3

Okay. Thank you.

Speaker 1

Thank you. Our following question is from David McFadden from Cormark Securities. Please go ahead.

Speaker 7

Great. Thank you. A couple of questions. So I was just looking at the LEO EBITDA loss in the quarter. It's definitely lower than what I was expecting.

Speaker 7

I thought that 110,000,000 to $120,000,000 number would sort of be even throughout the year. So I was wondering if you can give us an update on sort of the cadence where you that you would expect to get to that 110,000,000 to 120

Speaker 3

Andrew, do want to take that?

Speaker 4

Yeah, I think David, we're pretty consistent. I mean, it's a lot of timing and we're hiring, ramping up staff, etcetera. So it's really about that. We feel pretty comfortable with the guidance that we have given. Because this is a it's a big program that we're developing.

Speaker 4

So obviously, between one quarter and another quarter, you may have things that shift slightly. But overall, net net, we feel pretty comfortable with where we are at the guidance.

Speaker 3

I can tell you so much of it is headcount driven.

Speaker 8

Totally.

Speaker 3

And we are adding a lot of new colleagues around here. I think you know no. I have the data somewhere here. But but but we we for instance, we've got 60 new colleagues that'll be joining us. So they've already accepted their offers.

Speaker 3

They haven't shown up yet. Since the, you know, q one ended, we added, you know, a whole lot new people. So, anyway, you'll you'll see it in our numbers. We are, yeah, we're ramping up our spending as as we execute on the program. Yep.

Speaker 7

Okay. And then just a question on ViaSat. So, you know, in the press release, it says that, they're gonna use like speed for aviation, maritime, enterprise, and defense. Is there a vertical that ViaSat services today that they're not planning to use like before?

Speaker 3

I don't think so. I mean, it's a better question for Viasat, but certainly, if you looked at the press release that we issued and they issued at the time, I think it covers pretty much all of their verticals. I think the main focus probably coming out of the gate will be commercial aero business. But no, my expectation is that they, at a minimum, want to have the ability to leverage Lightspeed for all the different verticals that they're participating in. So that's my expectation.

Speaker 3

Someone's pointing out to me to the extent that they're doing direct to consumer internet, that's not the focus. But for aero, defense applications, maritime, they've got a business kind of a rural broadband business. All of that I think is fair game for how they think about multi orbit and leveraging Lightspeed.

Speaker 7

Okay. So, I mean, it's my view that probably every geo operator will probably want to license Lightspeed. Have you entered into any other discussions with other GEO operators right now?

Speaker 3

Yes, have. It's a great question. I don't expect everyone who is a GEO operator today to go out and build their own And yet everyone, I think, sees where the market is going. So for sure, particularly with a lot of the regional GEO operators around the world and many of these companies tell us that has supported through our consulting business for years. So we have good relations with these different companies around the world.

Speaker 3

So yeah, how those discussions play out at the end of the day, stay tuned. But I think that, I mean, just to answer your question, David, yes, we're engaged with pretty wide range of regional geo operators that are interested in finding a compelling LEO solution so that they can continue to meet the needs of their existing customers, including quite oftentimes their own domestic governments.

Speaker 7

Okay. And then I noticed you talked about Space Norway, you expect to conclude that deal in the latter half of this year. I was wondering if you could give us an idea of the magnitude of that deal. Like, would it be 50% of ISR, 100% of ISR? Just any sort

Speaker 3

of Yeah. It's a little premature. And it and look, you know, a a deal isn't closed until a deal is closed. And And I think that having that done by year end feels like that's pretty reasonable. But here again, Space Norway is the government of Norway.

Speaker 3

Back to my comments about how deals with governments can sometimes take a little bit longer. That could take a little bit longer. And then in terms of quantum, yeah, I'd say stay tuned on that one too. Space Norway is old Telenor space business. On the one hand, they've got a lot of purely commercial requirements, much like Telesat has in our business.

Speaker 3

And then they have their own government requirements for Norway, and and, you know, I I I think they have close relations with the other Scandinavian governments and and whatnot, and and, of course, their allies. So, anyway, so hard hard to say, just right now what that will look like in terms of Quantum. My expectation is it should be a pretty meaningful agreement, but we're still working with them on, figuring that all out.

Speaker 7

Okay. And two more if I may. So, I believe Taiwan wanted to make or was planning to make a decision about whether they were gonna license Lightspeed or not this year. So I don't know, can you provide us with any update there?

Speaker 3

Well, we've always been pretty clear. I don't think we've ever confirmed that we're in discussions with any particular government. Space Norway is different because we signed and announced a term sheet there. So we are, as I said, David, Lightspeed has been specifically architected to meet a lot of the pretty rigorous requirements that governments have in terms of constellation capabilities, cyber kind of standards, other standards that government users have in terms of resiliency and some other features that are important to government. So anyway, all I would say is we've had multiple conversations with various governments around the world as governments more and more think about leveraging LEO to meet their growing space requirements.

Speaker 3

And I think that's really all we can say. As we have deals to announce, we'll announce them. And that's pretty much all I can say. And again, with that caveat that government procurement, even with your own domestic government, let alone foreign governments, it's always a process that's a bit opaque with lots of moving parts and variables. And so it's always a bit of a mudd's game to make too many specific predictions around how those things play out.

Speaker 7

Okay, and then just lastly, have you entered into negotiations yet with the debt holders?

Speaker 3

So there, I would say, and we said this when we released our full year numbers, we've got a number of important corporate priorities this year and seeking to refinance the restricted group balance sheet with the kind of geo lenders. That's an important corporate priority for us. So In answer to the question, no, we haven't really fully engaged with the restricted group lenders at this point in time. Back to the comments around, it's an important corporate priority for us to try to make progress on that this year. The expectation is that that's something that we will be doing sooner than later.

Speaker 3

And so that's our plan.

Speaker 7

Okay. All right. Thank you.

Speaker 3

Okay. Thank you.

Speaker 1

Thank you. Our last question is from Please go ahead.

Speaker 8

Hi, all. This is Joe on for Walt. I noticed in the filing that there's a table that shows the pace of anticipated drawdowns for the build out of Lightspeed. Is that pretty locked in at this point? Or what would cause that schedule to change around the margin other than like 4x, kind of like an Andrew question?

Speaker 3

This is Dan. Maybe I'll take it in the first instance and Andrew can chime in. So basically, ability to draw down from the facilities that we have with the government of Canada and the government of Quebec are mostly tied to milestones with our vendors. And so think so long as the vendors are executing the plan, then we're probably consistent with whatever schedule that we filed. What could cause it to move to the right is if our key vendors and look, the big one is MDA.

Speaker 3

If they were to get late and the milestones that are kind of tied to those drawdowns, if those milestones were to shift out to the right, then our drawdowns will shift down to the right. And and and look, you know, you put yourself in the company's shoes. As soon as we draw down, then, you know, the interest starts, kicking on those drawdowns. So we certainly don't wanna draw down any earlier than we need to. So I think the schedule that you see is kind of our best approximation of when we anticipate we'll need to make those drawdowns tied to the milestones that we have with our various vendors.

Speaker 3

And here again, if they're late on those milestones, then we'll draw down a little bit later than what's there.

Speaker 4

Yeah, I think that covers it very clearly. We're all over the cash, very focused. We've got these milestones that are all related to the progress of the program and we're in good shape right now. So yeah. And

Speaker 8

then like a follow-up on the interest associated with Lightspeed. That my understanding is that gets capitalized.

Speaker 4

Yep.

Speaker 8

And when when does that become p and l interest expense, I guess, as opposed to being capitalized?

Speaker 4

At the end of the program.

Speaker 8

So when when when all when the whole constellation is up? Or is it does it does it change over time as as birds go up in the air?

Speaker 4

Well, one fifty six satellites.

Speaker 8

Okay. And then just the last one back to to Viasat. It's more just a a general question. On the user terminals, what's the status of some of the antennas with, I guess, getting regulatory approval? And how long does that process usually take?

Speaker 8

Just get a general sense.

Speaker 3

Yeah, Joe, thanks for that. That's definitely a better question to put device out than us. We have a decent understanding of the certifications that are, you know, required and a decent understanding of that process. But that that will principally be looking at my general counsel as I say this. Principally, that'll be Viasat's responsibility.

Speaker 3

We'll certainly be working with them to make sure that the modem, the user terminal, of more broadly speaking, the antenna and whatnot, are compatible with Lightspeed, and we'll support them as as they get, the approvals that they need. But yeah, I would say what we need to do is well understood. Viasat, again, being the largest provider of in flight connectivity services is about as probably more experienced than anyone in obtaining those certifications. So anyway, us, that's not something that is a worry for us in terms of when we'll be able to start serving ViaSat and supporting them with their end user customer.

Speaker 8

Okay. Thanks.

Speaker 1

Thank you. That concludes the question and answer session. I would now like to turn the meeting back over to Mr. Goldberg.

Speaker 3

Okay. Operator, well, thank you very much. Thank you everyone for joining us this morning. And we look forward to speaking again when we release our second quarter numbers. So thank you again.

Speaker 3

Thank you very much. Thank

Speaker 1

you. The conference has now ended. Please disconnect your lines at this time and we thank you for your participation.

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Key Takeaways

  • In Q1 FY2025, Telesat reported consolidated revenues of $117 million, adjusted EBITDA of $67 million, generated $139 million of operating cash and ended the quarter with $797 million in cash.
  • The GEO segment maintained a disciplined execution with a ~74% margin, though consolidated revenues fell by $35 million YoY due to lower renewal rates, reduced enterprise services and fewer government equipment sales.
  • Telesat Lightspeed’s LEO backlog neared CAD 1.1 billion, bolstered by multi-year deals with Orange, ADN and ViaSat, plus a term sheet with Space Norway, underscoring strong commercial and government interest.
  • For FY2025, Telesat reaffirmed guidance of $405–425 million in revenues, $170–190 million in consolidated adjusted EBITDA and CAD 900–1.1 billion in capital expenditures, supported by $800 million cash and $2.2 billion in government financing.
  • Telesat has repurchased USD 849 million of debt at an average 53¢ price, generating approximately USD 54 million in annual interest savings and maintaining a 7.24x leverage ratio in compliance with its credit covenants.
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Earnings Conference Call
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