MDA Space (MDA) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached CAD 242 million, up 23% year-over-year, with record backlog of CAD 4.6 billion, a 318% increase, driven by major contract wins including CAD 1 billion for Canadarm3 and CAD 2.4 billion for Telesat Lightspeed.

• Adjusted EBITDA was CAD 48.7 million, up 21% year-over-year, with a margin of 20.1%, and adjusted net income rose 7% to CAD 23.4 million.

• Operating cash flow was strong at CAD 149 million, supporting deleveraging, growth investments, and a healthy balance sheet.

• Major contract wins included CAD 1 billion for Canadarm3, CAD 2.4 billion for Telesat Lightspeed, and a CAD 250 million ISS robotics extension.

• CFO transition announced, with Janet McEachern as interim CFO.

Financial highlights

• Q2 2024 revenue was CAD 242 million, a 23.5% increase year-over-year, with segment revenues: Satellite Systems CAD 108.8 million (+21.7%), Robotics & Space Operations CAD 78.3 million (+33.4%), Geointelligence CAD 54.9 million (+14.6%).

• Gross profit was CAD 66.2 million (+8% YoY); gross margin at 27.4% (down from 31.3% YoY) due to program mix and higher depreciation.

• Adjusted EBITDA: CAD 48.7 million (+21% YoY); Adjusted net income: CAD 23.4 million (+7% YoY); Adjusted diluted EPS: CAD 0.19 (+6%).

• Free cash flow of CAD 110 million in Q2, compared to negative CAD 6.8 million last year.

• Net debt to trailing 12-month adjusted EBITDA improved to 2.0x from 2.4x at year-end 2023.

Outlook and guidance

• 2024 revenue guidance raised to CAD 1.02–1.06 billion (from CAD 950 million–1.05 billion), ~30% YoY growth at midpoint.

• Adjusted EBITDA guidance narrowed to CAD 200–210 million (19–20% margin).

• CapEx guidance narrowed to CAD 200–220 million, focused on growth investments.

• Free cash flow expected to be positive in 2024, one year ahead of plan.

• Q3 2024 revenue expected at CAD 270–280 million as backlog conversion accelerates.