Telesat (TSAT) Q2 2024 earnings summary

Executive summary

• Q2 and first half 2024 results were in line with expectations, with Q2 revenue at CAD 152 million (down 15% year-over-year) and Adjusted EBITDA margin at 67.8%, despite a 25% decrease in Adjusted EBITDA to CAD 103 million.

• 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 foreign exchange losses.

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

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

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

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; margin was 67.8%.

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

• Six-month Adjusted EBITDA was CAD 214 million, down 23% year-over-year, with a margin of 70.3%.

• Cash from operations in the first half was CAD 66 million; quarter-end cash balance was CAD 1.4 billion.

Outlook and guidance

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

• Adjusted EBITDA expected between CAD 340–360 million for the year, including CAD 80–90 million in Lightspeed opex.

• 2024 CapEx guidance remains CAD 1–1.4 billion, nearly all for Lightspeed.