What Telesat (TSAT) Said on Its Q3 Earnings Call

Key Points

• Lightspeed’s global service target moved to the end of Q2 2028, although Telesat still expects to provide higher-latitude and Arctic coverage by Q1 2028. The first two satellites are planned for launch in mid-2027, with production launches beginning around September.
• Telesat’s Canadian defense agreement, valued at up to CAD 2.7 billion, helped lift its Lightspeed backlog to approximately CAD 5.6 billion. The company invested CAD 360 million in Lightspeed during Q3 and lowered its full-year spending forecast to CAD 1.1 billion–CAD 1.3 billion.
• GEO revenue continued to decline, falling 21% year over year to CAD 79 million in Q3, while Telesat reiterated its 2026 GEO revenue and adjusted EBITDA outlook. Refinancing GEO debt maturities remains a key priority, with CAD 814 million in cash and additional milestone payments expected.

Telesat NASDAQ: TSAT reported third-quarter results in line with its plan as it advanced development of its Lightspeed low Earth orbit, or LEO, satellite network and continued work on refinancing debt associated with its geostationary, or GEO, business.

Consolidated revenue was CAD 81 million in the third quarter of 2026, while adjusted EBITDA was CAD 12 million and net loss totaled CAD 157 million, Chief Financial Officer Donald Tremblay said. For the first nine months of the year, the company reported CAD 247 million in revenue, CAD 69 million in adjusted EBITDA and a net loss of CAD 867 million.

The results included CAD 25 million in debt-refinancing expenses during the quarter and CAD 46 million through the first nine months. The quarterly net loss also reflected a CAD 90 million increase in the fair value of Lightspeed financing warrants. Tremblay said the warrant valuation increase reflected the growing value of Lightspeed following the company’s Canadian defense agreement and further program progress.

Lightspeed Schedule Moves to Second Quarter 2028 for Global Service

President and CEO Dan Goldberg said Telesat expects its first two Lightspeed satellites to launch in mid-2027 as secondary payloads on a third-party Falcon 9 mission. The company plans to test the satellites and the end-to-end network for roughly two months before beginning its full deployment cadence, with 15 satellites planned for each Falcon 9 launch.

As a result, Telesat now expects full global Lightspeed service around the end of the second quarter of 2028, compared with its prior target of the end of the first quarter of 2028.

Goldberg said the company has adjusted its deployment approach to maintain service availability in higher latitudes by the end of the first quarter of 2028. That would allow Telesat to begin providing Arctic services to the Canadian military under its Enhanced Satellite Communications Project–Polar, or ESCP-P, program, along with northern rural broadband services, on the previously planned timetable.

The company expects to begin launching production satellites around September 2027 and to launch approximately every three weeks. Goldberg said roughly 45 satellites, or three launches, would be needed to support polar coverage. Telesat expects all 225 satellites to be in orbit by the end of 2028, although some may still be raising orbit or being inserted into the constellation. The original 156 satellites are expected to be providing service around the fourth quarter of 2028, with the additional 69 satellites associated with the Canadian defense program coming online afterward.

Goldberg said both satellite hardware and software work remain underway for the first two satellites, but Telesat expects them to be ready for the anticipated June 2027 launch opportunity.

Canadian Defense Contract Underpins LEO Backlog

Telesat highlighted its August agreement with Canada’s Defence Investment Agency, which is valued at CAD 2.7 billion including option periods. The agreement calls for high-performance, secure communications services using military Ka-band frequencies for the Canadian Armed Forces in the Arctic.

Goldberg described the agreement as Telesat’s first ESCP-P contract and said the company sees further opportunities under the program, as well as potential defense and sovereignty work outside the Arctic. He said governments and militaries have increased their focus on assured access to advanced LEO connectivity amid the conflict in Ukraine.

The company ended the quarter with approximately CAD 5.6 billion in LEO backlog. Tremblay said Telesat invested CAD 360 million in Lightspeed during the quarter, including CAD 344 million in capital expenditures and CAD 24 million in operating expenses. Through the first nine months, Lightspeed investment totaled CAD 705 million.

Telesat reduced its forecast for full-year Lightspeed spending to between CAD 1.1 billion and CAD 1.3 billion, from prior guidance of CAD 1.3 billion to CAD 1.5 billion.

Goldberg said some prospective customers want to test the operational network before making long-term commitments, while others have proceeded based on technical due diligence, factory visits and demonstrations using Telesat’s existing LEO satellite. The company is developing user terminals for fixed land, maritime, aeronautical and defense applications in parallel, he added.

GEO Revenue Declines as Company Reiterates 2026 Outlook

Telesat’s GEO segment generated CAD 79 million in third-quarter revenue, down 21% from a year earlier. Revenue for the first nine months was CAD 243 million, down 24%.

Tremblay attributed the decline primarily to the non-renewal of a broadcast contract in 2025, a reduction in contractual capacity for another broadcast customer in 2026, reduced service to a North American fixed-broadband customer and the removal of certain GEO satellites from service. GEO satellite utilization was approximately 59% at Sept. 30, while GEO backlog was about CAD 800 million.

GEO adjusted EBITDA was CAD 36 million in the third quarter, down 43% year over year. Excluding refinancing costs, GEO EBITDA would have been CAD 61 million, representing a 78% margin, Tremblay said. Operating expenses excluding refinancing costs declined 12% in the first nine months from the prior-year period.

The company reiterated its 2026 GEO outlook:

• Revenue of CAD 300 million to CAD 320 million.
• Adjusted EBITDA of CAD 210 million to CAD 230 million, excluding non-recurring refinancing costs.

Goldberg said Telesat expects further GEO revenue declines in 2027, though formal guidance will be issued early next year. He noted that a Nimiq 6 contract with Bell is scheduled for renewal in mid-2027 and said Telesat expects it to be renewed, likely at a lower rate.

Liquidity and Debt Refinancing Remain Key Focuses

At Sept. 30, Telesat had CAD 814 million in consolidated cash and cash equivalents. The company received CAD 510 million in ESCP-P milestone payments during the quarter and expects a further approximately CAD 1.5 billion in milestone payments as deployment benchmarks are achieved. It also had roughly CAD 1.5 billion available to draw under Lightspeed financing at quarter-end.

Tremblay said Telesat was in compliance with the financial covenants under both its GEO and Lightspeed financings as of the filing date.

Goldberg said refinancing the GEO debt, which begins to mature later in 2026, remains a priority. He said Telesat’s advisers are seeking good-faith engagement with debt holders and the company is evaluating alternatives, but he declined to provide additional details during the call.

About Telesat (NASDAQ:TSAT)

Telesat is a Canadian satellite communications operator that provides connectivity and related services to telecommunications companies, broadcasters, governments, enterprises and other organizations worldwide. The company operates a fleet of geostationary satellites and delivers satellite capacity for broadband communications, video distribution, enterprise networking, mobility and government applications.

In addition to its geostationary satellite services, Telesat is developing Telesat Lightspeed, a planned low Earth orbit satellite network designed to provide high-speed, low-latency broadband connectivity.

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