Telesat’s latest results emphasized the need to keep pushing ahead with its new low Earth orbit constellation – Lightspeed – during tougher times in the geostationary market.
Lightspeed is expected to launch in 2026 after a complex set of delays brought about during the pandemic, including switching its key supplier to MDA Space and successfully obtaining $2.54 billion in government loan financing for the project after inflation costs arose. (The number of initial satellites was also reduced to contain costs, but there is more than enough capacity for customers, Telesat has said.)
In an analyst call with investors on Thursday (March 27), CEO Dan Goldberg noted Telesat is poised for eventual growth with Lightspeed. With Telesat’s financial results coming during a federal election, he emphasized both the Conservative and Liberal defence policies have strategies in the Arctic. That is also a key area for Lightspeed, which is meant to bring better connectivity to government, enterprise and military customers in remote areas.
Arctic sovereignty and Arctic communications may have more meaning in the coming months to Canadian governments and business during “these geopolitical shifts”, Goldberg noted. He did offer specifics, but countries such as the United States and Russia are reportedly interested in Canada’s northern resources.
Meanwhile, Lightspeed completed its preliminary design review in December, and Telesat recently announced strategic partnerships with Space Norway, Orange, and ADN Telecom related to the project. Unusually, Telesat disclosed it is in “advanced negotiations” with Viasat for in-flight connectivity and commercial aerospace opportunities given Viasat was comfortable disclosing that information to its own customers and analysts, Goldberg said.
“My expectation is by the end of this year, the Lightspeed backlog will very likely eclipse what our GEO backlog was at the end of last year, that $1.1 billion Canadian,” Goldberg said, adding, “It’s going to shape up, but we’ve got to close these deals. Hopefully we’ll be making some announcements about that throughout the course of this year.”
Goldberg emphasized Telesat is working to contain costs on the geostationary business and his team tries to get the best value with every customer renewal. The market is pivoting to low Earth orbit solutions and that is why the company has been working on Lightspeed for so long, he told analysts. That said, geostationary is not going away: “I still think there might be another opportunity or two for a new Geo satellite in the future,” he said.
Telesat’s 2025 full-year guidance includes revenues of between $405 million and $425 million, adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) between $170 million and $190 million on a consolidated basis, and capital expenditures – principally on Lightspeed – between $900 million and $1.1 billion.
The 2025 guidance is meant to reflect ongoing revenue reductions from North American direct-to-home customers, as Aniks F2 and F3 reach their end of expected lives and reductions from Dish’s Nimiq 5 renewal are fully realized, Telesat officials stated. Lower revenues are expected from various other renewals due to factors such as low Earth orbit competition, reduced spending by some U.S. government agencies and the sale of Telesat’s wholly owned Infosat subsidiary.
While the company expects Lightspeed will end up being a boon for Telesat in the long run, the focus for 2025 will be looking for more business on the existing geostationary satellites, refinancing restricted group debt and continuing to build and commercialize Lightspeed.
Telesat’s fiscal year ending Dec. 31, 2024 was down 19 percent from the same period in 2023, with revenue of $571 million compared with $133 million the year before. Officials said the decline came as direct-to-home customers in North America reduced their rate and capacity, and due to lower enterprise revenues from various customers in Latin America, the Canadian and United States governments, and the aerospace and maritime markets.
Operating expenses stayed relatively flat at $208 million, up $3 million from the year before. Adjusted EBITDA fell 28% to $384 million (from $534 million), and the net loss was $302 million (compared with income of $583 million in 2024.) The loss was largely due to changes in foreign exchange rates on the Canadian dollar value of Telesat’s debt, which is in U.S. dollars, along with accounting of C-band proceeds in 2023, higher impairment charges on orbital slots and some satellites, and lower revenue.
The fourth quarter also saw reductions. Telesat’s consolidated revenue was $128 million (down 23% or $38 million from the same quarter in 2023). Nimiq 5 Dish’s contract renewal was performed at a lower rate and capacity, Telesat officials said, with other contributing factors including the sale of Infosat and lower enterprise revenues.
Adjusted EBIDTA fell $50 million or 40% to $73 million, while the company posted a net loss of $447 million (compared with a net income of $39 million last year.) Foreign exchange shifts on the debt, along with higher impairment charges on the orbital slots and satellites, contributed to the loss.
