Telesat (TSAT) Q4 2024 earnings summary

Executive summary

• 2024 revenue and Adjusted EBITDA exceeded guidance, driven by disciplined execution in the GEO business and significant progress on the Lightspeed LEO constellation, including $2.54B in government loan financing and key design milestones.

• Secured full financing for Lightspeed from Canadian and Quebec governments, investing over CAD 1 billion in development and achieving key milestones.

• Debt repurchases strengthened the financial position, with a focus on refinancing Restricted Group debt in 2025.

Financial highlights

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

• Q4 2024 revenues were CAD 128 million and Adjusted EBITDA CAD 73 million (margin 57.4%), both down year-over-year.

• Net loss for 2024 was $302 million, compared to a gain of $583 million in 2023, mainly due to foreign exchange losses, lower revenues, and higher impairments.

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

Outlook and guidance

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

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

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

• Continued revenue pressure anticipated in GEO business, especially in DTH and enterprise segments.