Telesat (TSAT) Q4 2024 earnings summary

Executive summary

• 2024 revenue was $571 million, down 19% year-over-year, with Adjusted EBITDA of $384 million, both exceeding guidance but reflecting industry pressures; net loss was $302 million versus net income of $583 million in 2023, mainly due to FX impacts, lower revenue, and higher impairments.

• Significant progress on the Lightspeed LEO constellation, including $2.54 billion in government loan financing secured and key design milestones achieved.

• Debt repurchases totaled $262 million in 2024, with cumulative repurchases since 2022 reaching $849 million principal at a cost of $459 million, reducing annualized interest expense by $78 million.

• Backlog at year-end was $1.1 billion (excluding Lightspeed), with fleet utilization at 72%.

• CFO Andrew Browne announced retirement; search for successor underway.

Financial highlights

• Full-year 2024 revenue was $571 million, Adjusted EBITDA $384 million (margin 67.2%), and cash from operations $62 million; year-end cash and equivalents were $552 million, down from $1.67 billion in 2023.

• Q4 2024 revenue was $128 million and Adjusted EBITDA $73 million, down 23% and 40% year-over-year, respectively.

• Net loss for 2024 was $302 million, mainly due to FX losses, lower revenues, and higher impairments.

• Interest expense decreased by $7 million in Q4 2024 due to debt repurchases.

• Operating expenses for 2024 rose 2% to $208 million, driven by higher LEO wages and professional fees.

Outlook and guidance

• 2025 revenue guidance is $405–$425 million, with consolidated Adjusted EBITDA expected between $170–$190 million, reflecting a 53% decrease at midpoint due to revenue declines and higher LEO operating expenses.

• LEO operating expenses projected at $110–$120 million, up $38–$48 million from 2024, mainly due to increased headcount and operational ramp-up.

• Capital expenditures for 2025 expected at $900 million–$1.1 billion, almost entirely for Lightspeed.

• Continued revenue pressure anticipated in GEO business, especially in DTH, enterprise, maritime, aero, and government segments due to competition and satellite retirements.

• Expects a 53% decrease in consolidated Adjusted EBITDA at the midpoint of 2025 guidance.