Telesat’s revenues fell 20 per cent in 2024 compared with the previous year, the Ottawa-based company reported Thursday, but CEO Dan Goldberg says he’s “more bullish than ever” on his firm’s low-Earth-orbit satellites as “tectonic shifts in the geopolitical environment” push governments to boost defence spending and diversify the providers they work with. Goldberg told […]
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Telesat’s revenues fell 20 per cent in 2024 compared with the previous year, the Ottawa-based company reported Thursday, but CEO Dan Goldberg says he’s “more bullish than ever” on his firm’s low-Earth-orbit satellites as “tectonic shifts in the geopolitical environment” push governments to boost defence spending and diversify the providers they work with.
Goldberg told analysts Thursday Telesat is making “strong progress” on its US$3.5-billion LEO satellite constellation and expects to launch the first batch of satellites late next year.
National defence issues are taking centre stage in Canada and other countries as politicians such as newly elected Liberal Leader Mark Carney vow to increase spending on national security amid pressure from U.S. President Donald Trump.
As the need to hit NATO spending targets becomes more urgent and issues such as arctic sovereignty take on greater importance, Goldberg said Telesat’s solutions could become even more attractive to governments looking for secure, high-speed communications technology.
“There’s just a much greater focus, it feels like, with sovereign customers in thinking about their need to have access to an advanced LEO network,” he said during a conference call to discuss the company’s fiscal 2024 financial results.
Goldberg said governments are also stepping up efforts to “bridge the digital divide” in regions that don’t have easy access to high-speed internet service. That’s a market he believes Telesat’s LEO satellite, dubbed Lightspeed, will be well-equipped to capitalize on.
“We were always optimistic about how Telesat Lightspeed can deliver on all those sorts of objectives,” he explained.
“But it just seems so much more concrete now, so much more tangible. There’s just a greater immediacy, I would say. That just gives us greater confidence that the things that we believed were going to happen are going to happen – and maybe sooner rather than later.”
Telesat is banking on Lightspeed to make it a major player in the emerging market for lower-latency LEO satellites that can deliver faster and more reliable internet service to remote regions and users in harder-to-reach locations such as aircraft and cruise ships.
Other well-heeled competitors, including Elon Musk’s Starlink, have already entered the market. Goldberg acknowledged that has created headwinds for companies like Telesat that still use traditional higher-orbit geostationary (GEO) satellites.
“Starlink has been ramping up, and there have been some impacts to the GEO operators, Telesat included,” he said.
“There’s been some pressure there, but it feels like we’re seeing a good number of renewals and some new business opportunities there. (The satellite service) market continues to grow quickly – the question is who’s going to capture it. But we’re kind of holding our own there.”
Telesat has recently announced a couple of deals with telecommunications providers in Europe and Asia that plan to sign on to Lightspeed once it’s in orbit. But Goldberg said he expects the volume of contract wins to pick up as Telesat’s LEO constellation gets closer to going into orbit.
The Ottawa firm is currently in “advanced discussions” with a number of potential customers for Lightspeed, Goldberg said, adding he expects to see “more meaningful contributions” to Telesat’s order backlog by the end of the year.
“The market just feels like it’s moving in our direction. But we’ve got to close these deals,” Goldberg said, later adding: “I think we’re going to see massive acceleration once Lightspeed gets into service.”
Telesat’s 2024 balance sheet took a hit as the company continued to shift its focus from traditional GEO satellite services to the Lightspeed project.
Overall revenues were $571 million, above the company’s high-end projected guidance of $565 million but still 20 per cent lower than a year earlier. Adjusted EBITDA was $384 million, down 28 per cent from 2023.
Telesat said the drop was due to rate and capacity reductions from its North American direct-to-home satellite customers, as well as lower enterprise revenues from customers in the aero and maritime markets, Latin America and the Canadian and U.S. governments.
The company posted a net loss of $302 million in 2024, compared with a profit of $583 million the year before. Telesat attributed the swing to several factors, including shifts in foreign exchange rates on the Canadian-dollar value of its U.S.-dollar-denominated debt, higher impairment charges on its orbital slots and certain satellites, and reduced revenue.
Telesat is projecting revenues of between $405 million and $425 million in 2025 as it phases out some of its aging GEO satellites and existing enterprise customers migrate to competitors such as Starlink.
Still, Goldberg sounded an optimistic tone Thursday, saying he believes the company’s long-term future remains bright.
“I’d say we’re more bullish than ever, given what we’re hearing from customers and seeing in the market.”
Telesat shares were up 67 cents, or about 2.3 per cent, to $29.69 in late-afternoon trading on the Toronto Stock Exchange.
