MDA Space has concluded “another strong year” with a rise of revenues and EBITDA margin year-over-year, according to an announcement from the company this morning, with a similar expectation of growth in 2025.
Mike Greenley, CEO of MDA Space, gave comments during an earnings call earlier this morning and in a press release. He pointed to strong demand as key to the company’s growth, with a “solid backlog” and a “robust opportunity funnel” that has allowed them to “capitalize on growing market demand”.
By and large, this was a continuation of their situation last quarter. As before, they pointed to work on the Telesat Lightspeed LEO (low Earth orbit) satellite constellation, their own Chorus Earth observation constellation, and the Canadarm3 robotic arm for NASA’s Lunar Gateway space station.
This quarter, they also pointed to Globalstar as a key driver. In particular, Greenley noted that MDA was awarded a $1.1 billion post quarter-end contract with Globalstar to manufacture its next generation LEO constellation, “which will include 50+ MDA AURORA digital satellites”. He said that “this award marks our third LEO constellation contract in three years and our second constellation with Globalstar”, and that it is “highlighting the continued momentum we are seeing in our Satellite Systems business” owing to “strong customer demand for our differentiated technology.”
MDA’s strong quarter and strong year
The numbers were generally strong for both the last quarter and the last year, with growth across all three business areas over the course of 2024.
For the quarter, their revenues of $346.6 million were up 69.1% year-over-year, “driven by strong contributions from Satellite Systems business” according to MDA’s release. The adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was $70.9 million, up 68.4% year-over-year, with an adjusted EBITDA margin of 20.5% that was in line with the margin reported in Q4 2023.
Net income was $25.1 million, up 85.9% year-over-year, and “driven by higher operating income” according to MDA, with a diluted earnings per share of $0.20 that was up 81.8% year-over-year. Adjusted net income was $35.1 million, up 26.3% year-over-year, with an adjusted diluted earnings per share of $0.28. Operating cash flow was $383.1 million, driven by “positive working capital contributions primarily related to the Telesat Lightspeed program and the Globalstar Authorization to Proceed (ATP) contract” according to MDA.
Broken down by business area, this largely reflected growth in the Satellite Systems area, which rose year-over-year $90.2 million in Q4 2023 to $234.5 million in Q4 2024. MDA credited this growth to “the ramp of the Telesat Lightspeed program and contributions from the Globalstar ATP which was awarded in Q4 2023.” Robotics & Space Operations revenue was largely stable, at $64.9 million in Q4 2023 and $64.7 million in Q4 2024. Geointelligence revenue actually dipped slightly, to $47.4 million in Q4 2024 from $49.9 million in Q4 2023, which MDA attributed to “timing of programs”.
For the full year, the overall improvement in the numbers was similar. Backlog was $4.4 billion at quarter’s end, up 41.6% year-over-year, and order bookings totalled $2.4 billion, which MDA said was “largely driven by awards in our Robotics & Space Operations and Satellite Systems businesses”. Full-year revenues were $1,080.1 million, up 33.7% year-over-year, which exceeded MDA’s revenue guidance of $ 1,045- $1,065 million. MDA credited this to “execution on our backlog”, highlighting the Satellite Systems and Robotics & Space Operations business areas as key to revenue growth.
Full-year adjusted EBITDA of $217.1 million was up 24.6% year-over-year, while the adjusted EBITDA margin of 20.1% was, MDA said, “consistent with the Company’s full year margin guidance of 19%-20% and compares to 21.6% in 2023.” Full-year net income of $79.4 million is up 62.7% year-over-year, “due to higher operating income”, with diluted earnings per share of $0.63 in 2024—up 57.5% compared to 2023.
This growth in 2024 was reflected in all three of their main business areas. Geointelligence revenue grew slightly year-over-year, from $197.5 million in 2023 to $202.1 million in 2024, which MDA credited to a “steady volume of work”. Robotics and Space Operations grew from $248.4 million to $279.8 million, which MDA said was “primarily driven by the higher volume of work performed on the Canadarm3 program”. The largest growth was in Satellite Systems revenue, however, rising from $361.7 million to $598.2 million. MDA said that this was, again, “driven by the ramp up of the Telesat Lightspeed and contributions from the Globalstar ATP.”
Outlook on 2025
MDA said that their expected full year revenues for 2025 to be $1.5 billion to $1.65 billion, “representing year-over-year growth of approximately 45% at the mid-point of guidance.” Full year adjusted EBITDA is expected to be $290 – $320 million, a 40% increase YoY at midpoint of guidance, with an EBITDA margin that continues to be approximately 19% – 20%.
Capital expenditures will be somewhere between $210 – $240 million, “comprising of growth investments to support the previously outlined growth initiatives” according to MDA’s announcement, and they “expect full year free cash flow to be neutral to positive in 2025.”
For Q1, MDA added, “we expect revenues to be $315 – $335 million as we continue to execute on our backlog.”
The question of tariffs
Greenley did, however, raise the question of tariffs. The United States has imposed 25% tariffs on Canadian goods, with Canada imposing targeted tariffs on American goods in return. While the American tariffs have been repeatedly delayed, with another delay to April on some goods after the negative U.S. market effects of the March tariffs announcements, companies across North America have had to grapple with the potential for a serious price hike.
Greenley said that their “tariff exposure is manageable”. Both the backlog and their supply chain are generally located outside the United States, he said, limiting their exposure to the tariffs. Greenley said that they’re working with partners in the United States to resolve any potential issues, and added in the earnings call that MDA is “encouraged by our customers’ collaborative approach to finding solutions”.
Greenley said in the earnings call that their opportunity pipeline “remains strong”, while MDA said in the announcement that the company will “continue to closely monitor developments and may elect to update its financial outlook if deemed necessary.”
In the Q&A, the tariff regime also stood out as a key topic. When asked about how they were going to be handling it, Greenley repeated that “it is a manageable situation”, and that they “don’t see a concern at this time”. “There’s no slowdown in our enthusiasm” or in their pipeline, Greenley said, adding that “our new business activity remains robust”.
Greenley repeated his earlier comments that the large majority of their backlog (Greenley said 90%) of their backlog is located outside of the United States, adding that only 25% of their supply comes from the United States. He said that MDA is in close communication with customers and suppliers that largely agree with this assessment that their exposure to tariffs is “manageable”.
When asked for details, he said that the key takeaway is that there is “no bad news” that would affect the 2025 financial predictions. In the call, MDA CFO Guillaume Lavoie also said that Canada’s focused counter-tariffs do not currently appear to affect MDA’s business.
In fact, Greenley said, the current geopolitical situation has led to a “surge in enthusiasm” from potential customers outside the United States—ones that are interested in developing their own sovereign capabilities. “We are definitely getting involved in a lot more discussions about how MDA Space could show up to be able to participate”, Greenley said.
These new inquiries are in the “pre-pipeline phase”, focused on exploring potential solutions and approaches, but “enthusiasm is high”.
