Telesat's Q2 2025 Earnings Call: Unraveling Contradictions in LEO Backlog, GEO Cash Flow, and Debt Restructuring

LEO backlog reporting and currency impact, GEO cash flow and new opportunities, debt restructuring timeline, Lightspeed user terminals and gateway availability are the key contradictions discussed in Telesat's latest 2025Q2 earnings call.



Revenue Decline in GEO Segment:
- Telesat's consolidated revenues decreased by $46 million to $106 million in Q2 2025 compared to the same quarter in 2024.
- The decline was primarily due to a lower rate on the renewal of a long-term agreement with a North American direct-to-home customer and reductions in services for certain enterprise customers, particularly in Indonesian rural broadband programs.

LEO Backlog and Pipeline:
- The backlog for Telesat Lightspeed was reported to be over $1 billion, slightly up from Q1, although adjusted for FX movements.
- The increase is due to strong interest from customers, particularly in aero and government segments, with a robust pipeline of opportunities at various stages of development.

Capital Expenditures and Debt Repurchase:
- Capital expenditures for the first half of 2025 were almost entirely related to Telesat Lightspeed, with investments totaling $413 million from a total of $547 million in cash.
- The company has repurchased $857 million of debt at a cost of $462 million, resulting in interest savings of approximately $53 million annually.

Guidance and Cash Management:
- For 2025, Telesat expects full-year revenues between $405 million and $425 million, with adjusted EBITDA between $170 million to $190 million.
- The guidance assumes a Canadian to U.S. dollar exchange rate of CAD 1.42, with capital expenditures anticipated between CAD 900 million to CAD 1.1 billion, nearly all related to Telesat Lightspeed.