Telesat (TSAT) Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Consolidated Revenue: $79 million

Adjusted EBITDA: $22 million

Net Loss: $559 million, primarily due to a $475 million increase in the fair value of Telesat Lightspeed warrants and currency impacts on U.S. dollar-denominated debt.

GEO Segment Revenue: $78 million, down 26% year-over-year.

GEO Segment Adjusted EBITDA: $43 million, down $37 million from last year, impacted by lower revenue and higher refinancing costs.

Cash Position: Approximately $160 million at the end of Q2, with a new term loan of $120 million secured for general corporate purposes.

2Strategic Updates and Business Highlights

Lightspeed Constellation: Telesat signed a contract for the ESCAPE program with the Canadian Armed Forces, contributing to a $5.6 billion backlog.

Constellation Expansion: Contract signed with MDA for 69 additional satellites, increasing the total to 225, with expected global commercial availability by Q1 2028.

GEO Business Resilience: Despite revenue declines, the GEO backlog rose to $900 million due to contract extensions.

C-Band Spectrum: Telesat is set to receive $189 million in incentive payments from the FCC for clearing C-band spectrum, enhancing financial resources.

3Forward Guidance and Outlook

GEO Segment Guidance: Revenue expected between $300 million to $320 million and adjusted EBITDA of $210 million to $230 million for the year, excluding refinancing costs.

Lightspeed Investment Guidance: Increased total investment for 2026 to between CAD 1.3 billion and CAD 1.5 billion, reflecting accelerated constellation deployment.

4Bad News, Challenges, or Points of Concern

Declining GEO Revenue: Significant year-over-year decline in GEO revenue due to non-renewals and lower contract rates, particularly in the broadcast segment.

Satellite Retirements: Two GEO satellites reached the end of their useful lives, impacting future revenue and utilization rates.

Debt Refinancing Risks: Ongoing negotiations regarding debt maturities remain a concern, with potential implications for financial stability.

Market Competition: The satellite broadband market is expected to remain competitive, with pricing pressures anticipated.

5Notable Q&A Insights

Lightspeed Constellation Role: Telesat will serve as a subcontractor for the MEO component of the ESCAPE program, with opportunities for future contracts expected.

Space Relay Services: Telesat is optimistic about the potential for Space Relay revenue, leveraging the Lightspeed constellation for real-time data transmission from satellites.

D2D Opportunities: While focused on Lightspeed, Telesat is open to participating in D2D networks if it aligns with their strategic goals.

Ground Segment Development: Progress is being made on the ground segment, with multiple landing stations under development to support the Lightspeed constellation.

Financial Position: The new term loan provides additional liquidity, and Telesat is committed to achieving a consensual outcome regarding debt maturities. Overall, Telesat is positioned for growth with its Lightspeed initiative, despite facing challenges in its GEO segment and ongoing debt management issues.