Telesat said its revenues and EBITDA for fiscal 2024 will likely hit the top of their estimated range in the wake of an already announced funded agreement to build out its new Lightspeed constellation for a launch in 2026.
CEO Dan Goldberg made the announcement Thursday (Nov. 14) during a quarterly call with investors for the third-quarter results ending Sept. 30. “I’m happy to say that we’re making excellent progress, so far executing the program, and are pleased with the work and good collaboration we’re having with our key suppliers,” he said, adding Telesat continues to increase its headcount to meet the growing needs of Lightspeed.
Lightspeed was delayed, and its number of satellites reduced, due to numerous factors including the pandemic delaying shipment of key parts and the inflation that has affected aerospace providers around the world. Telesat then had to switch suppliers (from Thales Alenia Space to the current manufacturer, MDA Space) and seek additional government funding under the adjusted plan, which it says will still meet the current needs of its anticipated business and military-facing customers. (The new number of satellites will be 198, down from 298, in large part due to cost considerations.)
That funding was at last confirmed in September, with $2.54 billion in agreements with the governments of Canada and Quebec. This fully finances the constellation for its expected launch in 2026, and the company’s workforce has also increased by about 33 percent in the 12 months before the September announcement.
Goldberg said Telesat remains “bullish” on Lightspeed. “It’s just going to be transformative in terms of what users are going to be able to do.” He pointed to the growing use of Starlink, a competitor low-Earth orbit constellation by SpaceX with more than 6,000 individual satellites and growing, for the consumer and business market. “But users want competitive alternatives as well, and Lightspeed is going to be a very competitive alternative,” Goldberg added.
Telesat plans to be competitive with regard to its quality of service and perhaps on the autonomy customers have, to present an alternative to SpaceX that would be appealing to the enterprise market in particular. “We think that those will all be important features,” Goldberg said, and added that having a funded commitment is helping to get more serious discussion from potential customers.
Telesat reported a nearly 21% decline in quarterly year-over-year revenue to $138 million, due to non-renewals or lower renewal rates from a North American direct-to-home television customer and some Latin American customers.
Operating expenses decreased to $46 million (from $50 million), mostly due to “lower non-cash share-based compensation and higher capitalized engineering related to Telesat Lightspeed,” company officials said. Adjusted EBITDA fell 27.5 percent to $96 million, with net income reported at $68 million (compared to a net loss of $4 million in the same period last year.)
Revenue for the fiscal year is at the upper end of the previous guidance, between $545 million and $565 million, and adjusted EBITDA will be at the upper end of the range between $340 million and $360 million. Telesat’s backlog of contracts stands at $1 billion.
