Telesat (TSAT) Q2 2024 earnings summary

Executive summary

• Q2 and H1 2024 results were in line with expectations, with Q2 revenue at CAD 152 million (down 15% year-over-year) and Adjusted EBITDA at CAD 103 million, margin 67.8%.

• Net income for Q2 was CAD 129 million, down from CAD 519 million last year, reflecting the absence of prior C-band clearing income and FX losses.

• Progress continues on the Lightspeed LEO program, with funding agreements with Canadian and Quebec governments expected to conclude soon.

• Focus remains on maximizing GEO EBITDA and cash flow while executing on LEO buildout and commercialization.

• Contracted backlog stood at CAD 1.1 billion, with a cash balance of CAD 1.4 billion and fleet utilization at 75%.

Financial highlights

• Q2 2024 consolidated revenue was CAD 152 million, down CAD 27 million or 15% year-over-year.

• Adjusted EBITDA for Q2 was CAD 103 million, down CAD 35 million or 25% year-over-year, with a margin of 67.8%.

• Net income for Q2 was CAD 129 million, compared to CAD 51.9 million in Q2 2023, impacted by prior year C-Band clearing income and current FX losses.

• Six-month revenue was CAD 305 million, down 16% year-over-year, mainly from reduced services and lower equipment sales.

• Cash from operations in the first half was CAD 66 million; capital expenditures were CAD 334 million, mostly for Lightspeed.

Outlook and guidance

• 2024 revenue guidance reaffirmed at CAD 545–565 million.

• Adjusted EBITDA expected between CAD 340–360 million; OpEx (excl. share-based comp) for Lightspeed at CAD 80–90 million.

• 2024 investing cash outflows expected at CAD 1–1.4 billion, nearly all for Lightspeed.

• CapEx guidance reflects ongoing ramp-up and supplier milestone payments.