Telesat to focus on Lightspeed project in 2024 as it announces first-quarter net loss

Dan Goldberg telesat
Dan Goldberg is CEO of Ottawa-based Telesat. File photo

Managing costs related to its geostationary activities and accelerating implementation of its Lightspeed satellite project will be the focus for Ottawa-based Telesat in 2024.

The telecommunications equipment provider’s president and CEO Dan Goldberg made the comments Friday in announcing the company’s first-quarter earnings.

“We believe Telesat Lightspeed, our state-of-the-art, low-Earth-orbit (LEO) global broadband constellation, will revolutionize broadband connectivity for enterprise and government users and represents a highly compelling growth and value creation opportunity for Telesat and its stakeholders,” said Goldberg in a news release.

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In April, Telesat announced that the federal government had agreed to lend it $2.14 billion to help finance the LEO satellite constellation. The deal, which is subject to Telesat reaching agreements with other lenders, marked the culmination of years of negotiations between Telesat and the federal government. 

Also in April, Telesat said it was close to finalizing a lease on a new facility in Gatineau that will employ more than 300 people and serve as the operations centre for its Lightspeed project. Goldberg told Techopia at the time that Telesat had zeroed in on a location across the Ottawa River from its Elgin Street headquarters. Telesat will be the sole occupant of the space, which will operate 24 hours a day as the control hub for the LEO satellite network.

In March, Telesat announced that it expects to boost its workforce by nearly 50 per cent, or about 240 workers, in 2024 as it ramps up production of Lightspeed.

Net loss for the first quarter

For the quarter ended March 31, 2024, Telesat reported consolidated revenue of $152 million, down 17 per cent compared to the same period in 2023. The company said the decrease was primarily due to a reduction of services and lower rate on the renewal of a long-term agreement with a North American direct-to-home customer, as well as lower revenue from certain mobility and Latin American customers and lower equipment sales to Canadian government customers. 

Operating expenses for the quarter were $47 million, down 12 per cent from 2023. The decrease was primarily due to lower non-cash share-based compensation and higher capitalized engineering expense, the company said. 

Adjusted EBITDA for the quarter was $111 million, down 20 per cent. The adjusted EBITDA margin was 72.8 per cent, compared to 75.7 per cent in the same period in 2023. 

Telesat incurred a net loss for the quarter of $52 million, compared to net income of $28 million for the same period in the prior year. The change was primarily due to a negative variation in foreign exchange, the company said. 

“I am pleased with our financial and operating performance for the first quarter,” said Goldberg Friday. “We remain on track to meet our 2024 guidance and, as a result of our continued disciplined execution, delivered industry-leading adjusted EBITDA margins, high capacity utilization, a substantial contractual backlog of $1.2 billion, and a cash balance of $1.8 billion.” 

The company’s 2024 outlook includes revenues for the full year of $545 million to $565 million; adjusted EBITDA of between $340 million and $360 million, reflecting Lightspeed operating expenses of $80 million to $90 million; and cash flows used in investing activities in the range of $1 billion to $1.4 billion, nearly all related to Lightspeed capital expenditures.

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