Core Insights - Telesat and Arabsat have signed a Term Sheet for a multi-Gbps capacity pool of Telesat Lightspeed connectivity services, marking a significant partnership in satellite communications [1][2][3] - The agreement builds on a previous Memorandum of Understanding (MoU) and aims to integrate Telesat Lightspeed LEO services into Arabsat's multi-orbit satellite ecosystem, enhancing broadband connectivity for various sectors [2][3] Company Overview - Telesat is recognized as one of the largest and most innovative satellite operators globally, focusing on delivering critical connectivity solutions [4] - Arabsat, established in 1976, is the first satellite service provider in the Arab world and is wholly owned by the Arab League, holding a prominent position among global satellite operators [6][9] Strategic Developments - The partnership is expected to enhance Arabsat's multi-orbit strategy, providing innovative capabilities and tailored connectivity solutions for enterprise, telecom, government, and mobility sectors [2][3] - The companies anticipate finalizing definitive agreements by December 2025, which will further solidify their collaboration [2] Technological Advancements - Telesat Lightspeed is a state-of-the-art Low Earth Orbit (LEO) satellite network designed to meet the rigorous connectivity demands of various industries, offering high-capacity, secure, and resilient links [5] - The integration of LEO and GEO services will enable Arabsat to deliver faster and more reliable connectivity, positioning it at the forefront of digital transformation [3] Market Reach - Arabsat provides services to over 260 encrypted television networks and HD channels, reaching tens of millions of households across more than 100 countries [8] - The partnership with Telesat is expected to enhance service offerings across the Middle East, Africa, Europe, and Central Asia [3]

Core Insights - Telesat reported a consolidated revenue of $117 million for Q1 2025, a decrease of 23% compared to Q1 2024, primarily due to lower renewal rates and reduced services for certain customers [2][4][19] - The company generated a 74% Adjusted EBITDA margin in its GEO segment, with a substantial contractual backlog of $1.0 billion [2][4][29] - Telesat's LEO backlog reached nearly $1.1 billion, with expectations that it will exceed the GEO segment backlog by year-end 2025 [2][8][29] Financial Performance - Operating expenses for Q1 2025 were $53 million, an increase of 13% from the previous year, driven by headcount growth and higher legal fees [3][19] - Adjusted EBITDA for the quarter was $67 million, a decrease of 39% from Q1 2024, resulting in an Adjusted EBITDA margin of 57.7% [4][24] - The net loss for the quarter was $51 million, slightly improved from a net loss of $52 million in the same period last year [5][19] Business Highlights - Telesat signed a multi-year agreement with Viasat for Telesat Lightspeed services, indicating strong market interest [8] - As of March 31, 2025, Telesat's fleet utilization was 66.5% [8] - The company expects full-year revenues for 2025 to be between $405 million and $425 million, with Adjusted EBITDA projected between $170 million and $190 million [7][16] Balance Sheet and Cash Flow - As of March 31, 2025, Telesat's total assets were approximately $7.13 billion, with cash and cash equivalents of $797 million [21][22] - The company reported net cash from operating activities of $138.9 million for the quarter, a significant increase from $76.7 million in Q1 2024 [23]

Core Viewpoint - Telesat, a leading satellite operator, is set to discuss its financial results for Q1 2025 in a conference call scheduled for May 6, 2025, at 10:30 a.m. EDT [1] Group 1: Financial Results Announcement - Telesat will release its financial results prior to the conference call on its website under the "Investors" section [2] - The conference call will be hosted by Telesat's President and CEO, Daniel S. Goldberg, and CFO, Andrew Browne [1] Group 2: Access Information - The teleconference can be accessed via a toll-free number for North America and a separate number for international callers, with an access code provided [2] - A webcast of the conference call will be available for listening, and a replay will be archived on Telesat's website [3] Group 3: Company Overview - Telesat is recognized for its engineering excellence and customer service, positioning itself as a major global satellite operator [5] - The company is focused on delivering connectivity solutions that address complex communication challenges, enhancing operational efficiency and profitability for its customers [5] Group 4: Innovation and Future Plans - Telesat Lightspeed, the company's advanced Low Earth Orbit satellite network, aims to provide high-capacity, secure, and resilient connectivity with speeds comparable to fiber [6] - The network is designed to meet the needs of various sectors, including telecom, government, maritime, and aeronautical customers [6]

Core Insights - Telesat Government Solutions has appointed Ronald Thompson Jr. as Vice President of Growth, focusing on expanding the government user community for the Telesat Lightspeed Low Earth Orbit (LEO) satellite network [1][3] Company Overview - Telesat Government Solutions is a wholly-owned subsidiary of Telesat, providing secure global communications networks essential for the U.S. Government and its allies [4] - Telesat is recognized as one of the largest and most innovative global satellite operators, delivering critical connectivity solutions to address complex communication challenges [5] Leadership and Expertise - Ronald Thompson brings nearly four decades of experience, including 26 years in the U.S. Air Force, and has held senior roles in space operations and acquisition [2] - Prior to joining Telesat, Thompson was Vice President of Business Development at LinQuest Corp, where he developed growth strategies for various markets [2] Strategic Goals - The company aims to enhance its mission-critical LEO SATCOM solutions for government partners, focusing on military, intelligence, and civil agencies [3] - Telesat Lightspeed is designed to provide high-capacity, secure, and resilient satellite connectivity with fiber-like speeds, catering to telecom, government, maritime, and aeronautical customers [6]

Core Insights - Satellites have played a crucial role in telecommunications since the launch of Sputnik in 1957, enabling various services such as media streaming and electronic communication [1] Industry Overview - Recent advancements in satellite technology are enhancing capabilities in monitoring, photography, and data transmission, which could lead to new investment opportunities in the satellite industry [1]

Company Overview - Telesat is a global satellite operator, previously known as Telesat Canada, providing connectivity solutions to governments, enterprises, and other organizations through its satellite fleet [1] Leadership and Expertise - Michael (Mike) Dion is an expert in FP&A, Corporate Finance, and Small Business, with 12 years of experience in Fortune 100 companies and various industries including Telecom, Media and Entertainment, Hospitality, and Construction [1] Investment Approach - The investment strategy focuses on identifying value opportunities where investors may overreact to negative news or underreact to positive news, emphasizing strong fundamentals and a preference for dividend-paying stocks [1] - The importance of cash flow is highlighted, indicating it is critical for both companies and investors at all levels [1]

Core Insights - Telesat has secured a significant multi-year contract with Viasat Inc. for its Lightspeed Low Earth Orbit (LEO) services, which will be integrated into Viasat's offerings for various markets including aviation, maritime, enterprise, and defense [1][2] Company Overview - Telesat is recognized as one of the largest and most innovative satellite operators globally, focusing on delivering critical connectivity solutions to address complex communication challenges [5][6] - The Telesat Lightspeed network is designed to meet the rigorous requirements of telecom, government, maritime, and aeronautical customers, promising high-capacity, secure, and resilient links with fiber-like speeds [6] Contract Details - Viasat plans to utilize Telesat Lightspeed to enhance its broadband connectivity services, particularly in the commercial aviation sector, where it is already the largest provider [2] - The integration will allow thousands of aircraft equipped with Viasat's GM-40 antenna to access the Telesat Lightspeed network starting in late 2027 [2] Service Capabilities - Telesat Lightspeed offers high-speed, low-latency broadband globally, ensuring quality connectivity for passengers on flights, including over polar regions, backed by enterprise-grade Service Level Agreements (SLAs) [3] - The network is built to government cybersecurity standards and employs a Zero-Trust Network Access architecture, making it suitable for defense communications [4]

Financial Data and Key Metrics Changes - Telesat reported revenues of $571 million for the full year 2024, with adjusted EBITDA of $384 million and cash from operations of $62 million, outperforming guidance [21] - In Q4 2024, revenues were $128 million and adjusted EBITDA was $73 million, down $38 million and $50 million respectively from Q4 2023 [22] - The adjusted EBITDA margin decreased to 57.4% in Q4 2024 from 74.3% in Q4 2023, with the GEO segment adjusted EBITDA margin at 78% compared to 82.2% in the same period [22][23] - A net loss of $447 million was recorded in Q4 2024, compared to a net income of $39 million in Q4 2023, primarily due to foreign exchange impacts [25] Business Line Data and Key Metrics Changes - The GEO business is expected to face continued revenue pressure in 2025, with a forecasted decline of approximately $155 million, largely due to lower rates from the DTH business and the end of service contracts [9][10] - The enterprise and consulting activities are also expected to contribute to revenue decline, particularly from maritime and aero markets due to competition from Starlink [10][11] - Operating expenses for Lightspeed are anticipated to increase by approximately $40 million in 2025, driven by investments in engineering and operations [11] Market Data and Key Metrics Changes - The enterprise business has seen significant revenue declines, with a drop of $93 million in 2024, attributed to competition from Starlink and the sale of the Infosat business [72][80] - The company expects continued headwinds in the enterprise space in 2025, with a shift from GEO to LEO impacting revenues [80] Company Strategy and Development Direction - Telesat is focused on disciplined execution in both GEO and LEO markets, with a strong emphasis on building out and commercializing the Lightspeed constellation [12][15] - The company has secured funding from the governments of Canada and Quebec for Lightspeed, investing over $1 billion in development and deployment in 2024 [7][21] - Telesat is optimistic about the market for commercial services, particularly in light of geopolitical shifts increasing demand for sovereign national security requirements [14][15] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging operating environment for the GEO business to persist in 2025, with a focus on mitigating market pressures [8][12] - The company is optimistic about the potential for Lightspeed, expecting to launch the first batch of satellites in late 2025 and seeing strong traction with prospective customers [13][14] - Management highlighted the importance of refinancing restricted group debt as a priority for the year [15][58] Other Important Information - Telesat ended 2024 with $552 million in cash on the balance sheet and a total leverage ratio of 6.68 times [21][31] - The company repurchased $262 million in debt during 2024, resulting in annual interest savings of approximately $54 million [27] Q&A Session Summary Question: Can you provide insight on the geopolitical shifts affecting discussions? - Management noted that discussions have accelerated due to a greater focus on sovereign customers needing access to advanced LEO networks, particularly in Canada [36][42] Question: What is the current backlog for Lightspeed? - Management indicated that the LEO backlog is around $600 million, including a significant agreement with the government of Canada, and expects it to grow significantly by the end of the year [44][50] Question: What is the update on debt restructuring? - Management confirmed that refinancing restricted group debt is a priority and is expected to be tackled sooner rather than later [56][58] Question: How does the GEO revenue decline look for 2026? - Management has not projected far into 2026 but noted that the GEO business is predictable, with visibility on major contract renewals [60][62] Question: What is the state of the enterprise business? - Management acknowledged challenges in the enterprise segment due to competition and the aging satellite fleet, but remains optimistic about future opportunities with Lightspeed [80][112]

Core Insights - Telesat reported a significant decrease in revenue and net loss for the year ended December 31, 2024, primarily due to reduced demand from North American direct-to-home satellite video customers and other market challenges [2][6][12]. Financial Performance - For the year 2024, Telesat's consolidated revenue was $571 million, a decrease of 19% ($133 million) compared to 2023, with a 20% decline when adjusted for foreign exchange rates [2][6]. - Operating expenses for 2024 were $208 million, an increase of 2% ($3 million) from 2023, attributed to higher wages and professional fees [3]. - Adjusted EBITDA for 2024 was $384 million, down 28% ($150 million) from the previous year, with an Adjusted EBITDA margin of 67.2%, compared to 75.8% in 2023 [4][5]. - Telesat reported a net loss of $302 million for 2024, a significant decline from a net income of $583 million in 2023, largely due to foreign exchange impacts and higher impairment charges [6][10]. Quarterly Results - For Q4 2024, Telesat's consolidated revenue was $128 million, a decrease of 23% ($38 million) compared to Q4 2023, driven by contract renewals and lower enterprise revenues [7]. - Operating expenses for Q4 were $58 million, an increase of 17% ($9 million) from the same period in 2023 [8]. - Adjusted EBITDA for Q4 was $73 million, a decrease of 40% ($50 million), with an Adjusted EBITDA margin of 57.4%, down from 74.3% in Q4 2023 [9]. Future Outlook - For 2025, Telesat expects revenues between $405 million and $425 million, reflecting anticipated declines in various customer segments and increased operating expenditures related to the Telesat Lightspeed program [12][19]. - The company has secured $2.54 billion in loan financing from the Governments of Canada and Quebec to support the Telesat Lightspeed project, which aims to enhance connectivity and create jobs in Canada [2][13]. Strategic Developments - Telesat completed the Preliminary Design Review for the Telesat Lightspeed program in December 2024, marking a key milestone in its development [2][13]. - The company has established strategic partnerships with Space Norway, Orange, and ADN Telecom, indicating strong customer interest in Telesat Lightspeed services [2]. Management Changes - Telesat's CFO Andrew Browne announced plans to retire later in 2025, with a search for his successor already underway [2][13].

Financial Performance - For the year ended December 31, 2024, Telesat reported consolidated revenue of $571 million, a decrease of 19% ($133 million) compared to the prior year[2]. - Adjusted EBITDA for the full year 2024 was $384 million, a decrease of 28% ($150 million), with an Adjusted EBITDA margin of 67.2%, down from 75.8% in 2023[4]. - Telesat had a net loss of $302 million for the year, compared to net income of $583 million for the prior year, primarily due to foreign exchange impacts and higher impairment charges[5]. - For the quarter ended December 31, 2024, consolidated revenue was $128 million, a decrease of 23% ($38 million) compared to the same period in 2023[6]. - Adjusted EBITDA for the quarter was $73 million, a decrease of 40% ($50 million), with an Adjusted EBITDA margin of 57.4%, down from 74.3% in the same period in 2023[8]. - Revenue for Q4 2024 was $127,995,000, a decrease of 22.8% from $165,901,000 in Q4 2023[22]. - Operating income for Q4 2024 was $(227,528,000), compared to $(9,668,000) in Q4 2023, indicating a significant decline[22]. - Net loss attributable to Telesat Corporation shareholders for the year 2024 was $(126,311,000), compared to a profit of $10,465,000 in 2023[22]. - Adjusted EBITDA for the year 2024 was $383,737,000, down from $533,702,000 in 2023, reflecting a decrease of 28.0%[27]. - Adjusted EBITDA margin for Q4 2024 was 57.4%, compared to 74.3% in Q4 2023, showing a decline in profitability[27]. Future Projections - For 2025, Telesat expects revenue between $405 million and $425 million, with Adjusted EBITDA projected between $170 million and $190 million[18]. - Telesat anticipates a substantial decrease in consolidated Adjusted EBITDA for 2025, down 53% at the mid-point of guidance compared to 2024[2]. Financial Position - Total assets increased to $6,945,179,000 in 2024 from $6,313,368,000 in 2023, representing a growth of 10.0%[23]. - Cash and cash equivalents decreased significantly to $552,064,000 in 2024 from $1,669,089,000 in 2023, a decline of 66.9%[24]. - Long-term indebtedness decreased to $3,096,615,000 in 2024 from $3,197,019,000 in 2023, a reduction of 3.1%[23]. - Total liabilities increased to $4,448,474,000 in 2024 from $3,914,385,000 in 2023, an increase of 13.6%[23]. - Telesat Corporation's total shareholders' equity rose to $2,496,705,000 in 2024 from $2,398,983,000 in 2023, an increase of 4.1%[23]. Contracted Revenue Backlog - Telesat's contracted backlog for future services was approximately $1.1 billion as of December 31, 2024[10]. - The contracted revenue backlog represents Telesat's expected future revenue from existing service contracts, primarily from satellite capacity agreements[29]. - The majority of Telesat's contracted revenue backlog is derived from contractual agreements for satellite capacity[29]. - The backlog calculation adheres to revenue recognition policies under IFRS 15, without discounting for present value[29]. Financial Metrics and Definitions - Telesat utilizes Adjusted EBITDA and Adjusted EBITDA margin to enhance understanding of operating results and facilitate comparisons with competitors[29]. - Adjusted EBITDA and Adjusted EBITDA margin are not substitutes for cash flows from operations or net income as indicators of liquidity and operating performance, respectively[29]. - Severance payments and special compensation for executives and employees are included in the financial metrics[29].