MDA Space struck a reassuring note with investors during its quarterly results call Thursday (May 8) in the wake of news that the Trump administration wants to remove a key space station with which the company’s Canadarm3 is affiliated.
On May 2, the White House’s “skinny budget” proposed to cut NASA’s overall funding by roughly 25% or $6 billion USD ($8.33 billion CAD). While the focus was meant to put the agency on moon and Mars exploration, among the proposed cuts is the NASA-led Gateway space station orbiting the moon in support of the Artemis moon program.
Removing Gateway takes away the immediate platform for Canadarm3, funded by the Canadian Space Agency (CSA) and in production by MDA, which received a $1 billion contract in June 2024 for the multi-year build phase representing Phase C (final design) and Phase D (construction, system assembly, integration and test).
Other international partners in Gateway would be affected, too, as well as possible astronaut seats that were brokered for their contributions. (Canadarm3 is meant to support Jeremy Hansen’s seat on the moon-orbiting Artemis 2 in 2026, as well as future Gateway missions at the least.)
MDA CEO Mike Greenley, however, emphasized in his comments that Canadarm3 is an agreement his company has with the CSA – not with NASA. Additionally, he said, the “skinny budget” is just the first step in a months-long budget process that will also see consultations with stakeholders, and negotiations with the U.S. House and Senate.
“There has been no change to any MDA space contract as a result of these U.S budget recommendations. We’re in discussion with the CSA and the Government of Canada officials with respect to government-to-government dialogue on this matter,” Greenley said. He framed the White House proposal as an “input” to the budget process and emphasized that all conversations with CSA so far have been business as usual. “We just continue to do our work.”
He also reminded investors that Canadarm3’s technology was never meant to be limited to the space station; although he did not mention it directly, Axiom Space has contracts to use the technology for commercial space stations. As such, Greenley said, “The Canadarm3 contract serves multiple purposes, including both space agency and commercial opportunities. Irrespective of the Gateway project, NASA’s increasing commercial orientation bodes well for MDA Space.”
On the off-chance that Gateway does not go forward, however, Greenley said he heard the heads of all the space agencies continue to speak with each other about how best to shift the partner contributions. In such a case, he said, the conversations about Canadarm3, modules and other pieces of international contributions would then focus on “where can [we] use all these different elements to do good things on the moon, and make sure that everyone’s contributions are recognized and useful.”
The length of the budget negotiation process means that MDA would continue to work on Canadarm3 in the same way at least through the end of fiscal 2025, he said, as well as “significant work beyond that.” For future years, he said again, given Canada would be participating in repurposing the Gateway elements for other lunar exploration, “we are a very, very long way away from talking about any changes to our contract structure.”
For the first quarter of 2025, MDA reported backlog of $4.8 billion – 46% higher than the same quarter last year), due to new order bookings including the Globalstar next-generation LEO constellation award.
MDA also reported revenues of $351 million (up 68% year-over-year, with satellite systems a strong contributor.) Adjusted EBITDA soared 63% to nearly $69 million, while adjusted net income was up more than 100% to $37.2 million – representing adjusted diluted earnings per share of $0.29. Its net cash position was $376.3 million by the quarter’s end.
Operating cash flow was up to $267 million in Q1 2025, an increase of $24.7 million from last year. The Globalstar deal, as well as MDA’s ongoing work on the Telesat Lightspeed LEO constellation set to launch in 2026, was largely responsible for that. (MDA offered no further commentary on Lightspeed in the call, but Telesat officials said during their earnings earlier in the week that the current construction schedule remains on track.)
MDA also highlighted its definitive agreement to acquire SatixFy Communications in a bid to enhance its next generation digital satellite communications offer to customers. The deal saw MDA agree to acquire all outstanding shares of SatixFy in an all-cash transaction, for US$2.10 per share, representing an equity value for SatixFy of US$193 million ($278 million CAD at the time the deal was announced April 1.)
“SatixFy’s technology enables satellite broadband and direct-to-device constellations with its radiation hardened digital beamformers enabling them to generate hundreds of beams, designed to significantly improve satellite performance and decrease cost,” MDA officials stated on April 1.
MDA maintained its outlook for fiscal 2025: full-year revenues between $1.5 billion and $1.6 billion, full-year adjusted EBITDA of $290 million to $320 million and capital expenditures of $210 million to $240 million. The second quarter of 2025 should have revenues between $360 million and $380 million. Greenley noted in the call that tariffs should not materially impact the forecast. “Our current assessment is that potential tariff exposure is manageable,” he said, adding that MDA Space can if necessary “work with our customers to identify solutions, and explore potential mitigation strategies.”
