Telesat Corp - Ordinary Shares (TSAT) Q2 Earnings call transcript Aug 14, 2024

In a recent earnings call, Telesat, a leading global satellite operator, reported its second quarter 2024 financial results, highlighting key achievements and future plans. The call, led by CEO Dan Goldberg and CFO Andrew Browne, provided insights into the company's performance and strategic initiatives.

Financial Overview

Telesat reported a consolidated revenue of $152 million and an adjusted EBITDA of $103 million for the second quarter of 2024. The company generated cash from operations of $66 million, ending the second quarter with $1.4 billion of cash. Despite a revenue decrease of $27 million compared to the same period in 2023, Telesat's adjusted EBITDA margin remained strong at 67.8%.

Lightspeed Program and GEO Activities

CEO Dan Goldberg emphasized the company's focus on the Lightspeed program, which is on track for execution and expected to bring significant value to both Telesat and its customers. The program is intended to deliver an extraordinary value proposition for customers and generate significant value creation for shareholders. Telesat is also focused on maximizing EBITDA and cash flow for its GEO activities, despite anticipated revenue declines.

Funding Agreements and Progress

Telesat is in advanced negotiations with the governments of Canada and Quebec to conclude funding agreements for the Lightspeed program. The company remains optimistic about achieving the expected timing and has engaged in good and sustained communication with government representatives. The conclusion of these agreements is a key priority for Telesat.

Looking Ahead

Telesat expects full-year revenues to be between $545 million and $565 million, with operating expenses excluding share-based compensation expected to be between $80 billion to $90 billion. The company's guidance assumes a Canadian dollar to U.S. dollar exchange rate of 1.35%.

Challenges and Opportunities

Telesat faces challenges, such as the restructuring of Xplore, a Canadian rural broadband provider, which has impacted the company's bad debt provision. However, the company is also exploring opportunities, including potential sales of non-core assets and the execution of the Lightspeed program.

Investor Engagement

During the call, analysts had the opportunity to ask questions about Telesat's progress, funding agreements, and future plans. The company provided detailed responses, offering insights into their strategic direction and financial outlook.

Conclusion

Telesat's second quarter 2024 financial results reflect a company focused on strategic initiatives, including the Lightspeed program and GEO activities. The company's optimism about the future, combined with its strategic direction, positions Telesat well for continued growth and innovation in the satellite communications industry. As Telesat moves forward, investors and stakeholders will be watching closely for updates on funding agreements, program execution, and financial performance.