Telesat's Q1 2025 Earnings: Navigating Challenges in a Satellite Market Shift

Telesat, a leading global satellite operator, is set to host its first quarter 2025 earnings conference call on May 6, 2025, at 10:30 a.m. EDT. The event, led by CEO Daniel S. Goldberg and CFO Andrew Browne, will provide critical insights into the company’s financial health and strategic progress amid a challenging market environment. With revenue declines, soaring LEO investments, and shifting industry dynamics, investors will scrutinize how Telesat balances short-term pressures with long-term ambitions.

Financial Outlook: A Year of Transition

Telesat’s full-year 2025 guidance paints a stark picture of near-term challenges. Revenue is projected to drop to $405–425 million, a 26% decline from 2024’s $571 million. This reflects:
- Declines in DTH video services: Reduced rates from the Nimiq 5 renewal with Dish and the end-of-life phases of aging satellites like Anik F2/F3.
- LEO competition: Pressure from rivals like Starlink in maritime/aero markets.
- Strategic exits: The 2024 sale of Infosat, a wholly-owned subsidiary, further reduced top-line growth.

Adjusted EBITDA is expected to fall to $170–190 million, a 53% drop from 2024’s $384 million. The squeeze stems from $110–120 million in LEO operating expenses, up sharply from prior years, as Telesat invests heavily in its Telesat Lightspeed LEO satellite network.

The Lightspeed Pivot: High Risk, High Reward

The Telesat Lightspeed program remains the company’s crown jewel—and its largest financial burden. With a $2.54 billion loan from Canadian and Quebec governments secured in late 2024, the project aims to deliver fiber-like connectivity to telecom, government, maritime, and aeronautical sectors. Key milestones include:
- Preliminary Design Review (PDR) completed in December 2024, marking readiness for full-scale development.
- Strategic partnerships: Agreements with Space Norway, Orange, and ADN Telecom signal growing commercial traction.

While Lightspeed’s potential is undeniable, its $900–1.1 billion 2025 capital expenditure allocation highlights the financial toll of transitioning from legacy GEO satellites to cutting-edge LEO systems. Investors will watch for updates on satellite deployment timelines, cost controls, and customer adoption rates.

Risks and Uncertainties

• Foreign exchange volatility: A weaker Canadian dollar (assuming a 2025 USD/CAD rate of 1.42) could amplify losses, as Telesat’s USD-denominated debt remains a liability.
• CFO succession: Andrew Browne’s planned retirement introduces leadership uncertainty, though the search for a successor is underway.
• Market competition: LEO providers like Starlink are eroding Telesat’s traditional revenue streams, requiring rapid innovation to retain market share.

Conclusion: A Pivotal Quarter for Long-Term Vision

Telesat’s Q1 2025 results will underscore its dual focus: managing near-term financial headwinds while advancing Lightspeed’s potential. With revenue projected to fall 26% year-over-year and Adjusted EBITDA declining 53%, the quarter will likely reflect the pain of strategic pivots. However, progress on Lightspeed’s technical milestones and partnerships could position Telesat for future growth.

Investors should weigh two key questions:
1. Execution Risk: Can Telesat deliver Lightspeed on time and within budget, given its $1.1 billion CapEx target?
2. Market Resilience: Will the company stabilize legacy GEO revenues (backlog of $1.1 billion) while securing LEO contracts to offset declines?

If Telesat can demonstrate disciplined spending, partnership momentum, and CFO continuity, its stock (TSAT) could rebound. Conversely, delays or cost overruns in Lightspeed may prolong financial strain. With a 2025 net loss expected (based on 2024’s $302 million deficit), patience—and a long-term view—are critical for shareholders.

As the May 6 call approaches, the stakes are clear: Telesat’s ability to navigate this transition will determine whether it emerges as a leader in the next era of satellite connectivity—or becomes a casualty of its ambition.