Telesat (TSAT) Q3 2024 earnings summary

Executive summary

• Q3 and the first nine months of 2024 were in line with expectations, with updated guidance for revenues at the upper end and Adjusted EBITDA at or above the top end of the range.

• Secured $2.54 billion in funding from Canadian and Quebec governments for Telesat Lightspeed LEO constellation, enabling full project financing.

• Achieved net income of $68 million for Q3 2024, reversing a net loss of $4 million in Q3 2023, mainly due to foreign exchange gains on US dollar debt.

• Revenue declined 20.9% year-over-year to $138 million in Q3 2024, primarily from contract renewals at lower rates and non-renewals.

• Adjusted EBITDA margin in the GEO segment reached 80%, with a total contractual backlog of $1.0 billion.

Financial highlights

• Q3 2024 consolidated revenues were $138 million, down 20.9% year-over-year; Adjusted EBITDA was $96 million, down 27.5%.

• Adjusted EBITDA margin was 69.5% in Q3 2024, down from 75.9% in Q3 2023.

• Net income for Q3 was $68 million, compared to a net loss of $4 million in Q3 2023, mainly due to a $36 million FX gain.

• Cash from operations for the first nine months was $64 million; quarter-end cash and equivalents were $1.08 billion.

• Capital expenditures for the first nine months were $661 million, nearly all for Lightspeed.

Outlook and guidance

• 2024 full-year revenues expected at the upper end of $545–$565 million guidance.

• Adjusted EBITDA now expected at or above $340–$360 million guidance range.

• 2024 capital expenditures projected at $1–1.4 billion, almost entirely for Lightspeed.

• Operating expenses for Lightspeed revised down to $65–70 million for 2024.