MDA Space (MDA) Jefferies Global Industrial Conference summary

Industry trends and growth outlook

• Space sector is forecasted to grow from $600 billion annually to $1.8 trillion by 2035, driven by lower launch costs and expanding commercial opportunities.

• Key growth drivers include global connectivity, commercial space stations, pharmaceutical and material science research, and increased defense presence in space.

• On-orbit industrialization is accelerating, with new markets emerging for in-orbit manufacturing, power stations, and mining.

• Regulatory changes are tightening, especially around debris mitigation and satellite end-of-life management, increasing demand for on-orbit servicing and robotics.

• Market consolidation is expected as some new entrants lose momentum and larger players consider divesting non-core assets.

Business performance and financials

• Revenue has doubled since 2020, with 2024 forecasted to exceed CAD 1 billion and a backlog of over CAD 4.5 billion.

• Sustained annual revenue growth of 25%-30% is expected for the next three to five years, with EBITDA margins of 19%-20%.

• Operating cash flow is strong, with 75%-80% of EBITDA converted to cash, supporting self-funded growth and rapid deleveraging.

• Net cash positive status is anticipated by end of 2024, with leverage ratio expected to fall below 1 and debt-free status targeted for 2025.

• Capital expenditures peaked at CAD 200 million annually for growth investments, expected to normalize to CAD 100 million by 2027.

Strategic focus and business areas

• Three main business areas: Geointelligence (Earth observation), Satellite Systems (communications), and Robotics & Space Operations (infrastructure and servicing).

• Largest near-term growth is in Satellite Systems, especially LEO and MEO constellations, followed by Robotics, with Geointelligence expected to surge in a few years.

• Major contracts include Telesat Lightspeed (CAD 2.4 billion) and a CAD 1 billion robotics contract for lunar operations.

• Product innovation includes CHORUS (next-gen Earth observation), MDA Aurora (software-defined satellites), and MDA Skymaker (commercial robotics).

• Strong pipeline of over CAD 20 billion in opportunities, with most growth expected from satellite systems.