Telesat NASDAQ: TSAT reported first-quarter 2026 results that management said were in line with expectations for its legacy geostationary (GEO) business while continuing to advance development and commercialization efforts for its Telesat LightSpeed low Earth orbit (LEO) constellation.
LightSpeed development and timeline
President and CEO Dan Goldberg said the company “made significant strides” in developing and commercializing LightSpeed during the quarter, citing progress not only on satellite development but also on user terminals, software development, and the deployment of the ground station network.
Goldberg reiterated the expected timing for service readiness, saying the company continues to expect “full global commercial service around the end of the first quarter of 2028.”
Commercial momentum and government interest in Mil-Ka
On the commercial front, Goldberg highlighted a LightSpeed agreement signed last month with Northwestel to provide broadband connectivity to communities across Nunavut. CFO Donald Tremblay noted that LightSpeed backlog totaled approximately CAD 1.1 billion at the end of the first quarter, adding that the backlog figure “does not include the recently signed agreement with Northwestel.”
Goldberg also emphasized increasing interest from allied government customers after Telesat incorporated military Ka-band (Mil-Ka) capacity into LightSpeed. He said the company is seeing “a very positive response” from allied governments that want secure, resilient LEO satellite services on Ka-band frequencies used for mission-critical operations.
During the Q&A, Goldberg said several governments are evaluating how to secure military Ka-band capability in LEO and that Telesat is engaging with those potential customers. In response to questions about the market impact of allocating capacity to Mil-Ka, Goldberg said the company believes “the market that the Mil-Ka addresses is a very large market,” and he described the ESCAPE opportunity as “meaningfully accretive,” assuming contractual arrangements are finalized.
ESCAPE program discussions and potential forecast updates
Goldberg discussed ongoing work with the Canadian government following its selection of Telesat and MDA late last year to deliver the Enhanced Satellite Communications Project – Polar (ESCAPE) for the Canadian Armed Forces in the Arctic. He said the company has been engaged with the government to finalize contractual arrangements for a significant portion of the program and anticipates these could be concluded “in the coming months,” while cautioning that “there can be no assurance an agreement will ultimately be reached.”
If the arrangements are finalized, Goldberg said Telesat intends to update investors on the expected financial impact. “Our intention is to update our financial projections at that time so that investors can take into account the expected impact on our business,” he said. Later in the Q&A, Goldberg told analysts the company would update annual guidance if ESCAPE affects the current year and would also update LightSpeed financial projections previously provided to the market if ESCAPE incorporates LightSpeed capabilities.
Goldberg added that one ESCAPE requirement is military Ka-band capacity in the Arctic, along with UHF and X-band. He also said he does not “connect the CAD 2 billion loan to future business with the Government of Canada,” describing government procurement as centered on value for taxpayers.
Quarterly financial results and segment performance
Tremblay reported consolidated revenue of CAD 87 million and adjusted EBITDA of CAD 35 million for the first quarter. The company posted a consolidated net loss of CAD 151 million, compared to a CAD 51 million loss in the prior-year quarter. Tremblay attributed most of the CAD 100 million negative swing to “non-cash impairments of goodwill” and lower adjusted EBITDA in the GEO business.
Interest expense totaled CAD 50 million, down from CAD 57 million a year earlier, which Tremblay said reflected a lower interest rate on floating-rate debt and a stronger Canadian dollar’s impact on U.S.-dollar denominated debt. He added that interest related to LightSpeed of CAD 14 million was capitalized to the project during the quarter, up from CAD 3.5 million last year as LightSpeed financing amounts outstanding increased.
In the GEO segment, Tremblay said revenue was CAD 86 million, down 26% year-over-year. The decline was driven primarily by broadcast, reflecting the expiration of contracts on the Nimiq 4 and Anik F3 satellites in 2025 and lower capacity and pricing tied to a renewal on Nimiq 5. In enterprise, he said lower revenue was mainly due to the October 2025 renewal of the Xplore contract, which he said did not materially impact operating cash flow because it was “mostly prepaid at inception.” The declines were partially offset by aviation contracts added in 2025.
Additional GEO metrics provided on the call included:
- Satellite utilization of 55% at the end of the first quarter
- GEO backlog “just below CAD 800 million” at the end of March
- GEO adjusted EBITDA of CAD 55 million, down 37% year-over-year
Tremblay said the quarter included approximately CAD 7 million of costs related to the GEO debt refinancing process, about CAD 3 million higher than the prior year. Excluding refinancing expenses, GEO adjusted EBITDA would have been CAD 52 million for the period.
Goldberg noted that while GEO is “a largely fixed cost business,” the company is focused on reducing costs, and he pointed to adjusted operating expenses (excluding debt refinancing costs) that were down 11% year-over-year.
Telesat reiterated full-year 2026 guidance for the GEO segment, with Tremblay reaffirming revenue of CAD 300 million to CAD 320 million and adjusted EBITDA of CAD 210 million to CAD 230 million, excluding debt refinancing expenditures. The company also reiterated expectations for total 2026 LightSpeed investment and said it remains focused on refinancing Telesat GEO debt that begins to mature in December.
Funding, terminals, and competitive positioning
On liquidity, Tremblay said the GEO segment ended the quarter with just over CAD 200 million in cash, “largely unchanged” from the end of 2025, and that the company believes GEO cash and 2026 cash flow will be sufficient to meet obligations prior to the December debt maturity. For the LEO segment, he said Telesat ended the quarter with nearly CAD 300 million in cash, and that this cash, combined with CAD 1.72 billion of availability under LightSpeed financing and $325 million of vendor financing, is expected to be sufficient to fund LightSpeed until global commercial service begins around the end of Q1 2028. He also said the company is in compliance with all covenants in its credit agreement and indenture.
Goldberg said Telesat has been watching industry developments related to terminals and believes the company is “in an excellent spot” on its terminal strategy, which he said is centered on flat-panel antennas tailored by vertical (including maritime, aeronautical, government, and fixed broadband). He referenced cooperation with Intellian, as well as relationships with Kymeta and Farcast, and said the network is open, allowing government users to certify their own desired terminals.
In discussing competition, Goldberg described Starlink as “far ahead of everyone else” and said it has become a benchmark for users. He said Amazon’s LEO effort is “coming” and that Telesat is hearing Amazon in the market. Goldberg said Telesat’s approach is to compete on “some mix of quality of service, price, and customer support,” while also emphasizing LightSpeed’s Layer 2 service and APIs designed to integrate with telecom operators’ networks. He added that because Telesat is not pursuing a direct-to-consumer model, it is “not seen as a competitor” to incumbents in the same way as providers that also target consumer subscribers.
Separately, Goldberg noted that the company recently changed the name of its GEO operating subsidiary from Telesat Canada to Telesat GEO Inc. to reduce confusion with the public parent company, Telesat Corporation.
About Telesat NASDAQ: TSAT
Telesat is a leading global satellite operator that designs, builds and delivers high-performance satellite communications solutions across multiple markets. The company operates a fleet of geostationary satellites to provide video distribution, data networking and managed broadband services to media companies, network operators, governments and enterprise customers. Telesat's infrastructure supports television distribution, cellular backhaul, rural broadband and corporate network applications.
In addition to its geostationary offerings, Telesat is developing a low Earth orbit (LEO) satellite constellation known as Lightspeed.
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