Telesat Plunges 10.15% on Earnings, LEO Costs

Telesat's stock price dropped 10.15% in pre-market trading on March 27, 2025, reflecting significant financial challenges and strategic shifts within the company.

Telesat reported a 19% decline in revenue for 2024, totaling C$571 million, and a 28% decrease in Adjusted EBITDA to C$384 million. The company posted a net loss of C$302 million for the year, marking a substantial downturn from the previous year's profit of C$583 million. Key factors contributing to this decline include reduced revenues from North American DTH customers, maritime markets, and increased LEO operating expenses.

Despite these challenges, Telesat secured C$2.54 billion in loan financing from the Canadian and Quebec governments for its Lightspeed LEO satellite program. The company also completed the Preliminary Design Review for Lightspeed, indicating progress in its development. However, the transition to LEO technology is proving costly, with projected increases in operating expenditures and capital investments for 2025.

Telesat's financial outlook for 2025 is grim, with projected revenue between C$405-425 million and Adjusted EBITDA of C$170-190 million, representing a 53% decline at the midpoint. The company faces intense competition from other LEO providers and has lost significant contracts, including an Indonesian government-supported rural broadband program. Additionally, the retirement of CFO Andrew Browne adds leadership uncertainty during this critical transition period.