Telesat Corporation Q2 FY2025 earnings call

• GEO: Team executing disciplinedly, with Nimiq 5 renewal with DISH being a top line headwind year-over-year. - LEO: Steady progress on satellite development, ground infrastructure, and software; strong interest from aero and government users. - Refinancing: Focused on refinancing restricted group debt due in December next year, expecting to engage with lenders soon. - CFO Search: Progressing with search for new CFO as Andrew plans to retire, expecting clarity soon.

In the second quarter, for the GEO segment, revenue was affected by renewals like DISH's Nimiq 5 and other North American direct-to-home customer changes, with a margin of approximately 70%. For the LEO segment, Telesat Lightspeed has a backlog above CAD 1 billion at the end of Q2, up slightly from Q1, driven by strong interest from aero and government users and a robust pipeline of opportunities.

• 2025 Revenue: Expected between $405 million and $425 million. - Operating Expenses: Excluding share-based compensation, expect $110 million to $120 million on Telesat Lightspeed. - Adjusted EBITDA: Expected between $170 million to $190 million. - Capital Expenditures: CAD 900 million to CAD 1.1 billion, nearly all for Telesat Lightspeed. - Leverage Ratio: Total leverage ratio was 7.51x at end of Q2, in compliance with credit covenants.

• Forward-Looking Statements: Actual results may differ from forward-looking statements due to known and unknown risks. - Debt Refinancing: Uncertainties around timing and success of refinancing restricted group debt.

Q: On LEO backlog, clarification on increase from Q1 A: Backlog in CAD, mix of currencies; Canadian dollar strength and small incremental contract led to slight increase.

Q: Debt negotiations progress A: Haven't started engaging with restricted group debt holders yet, but expect to soon, with possibility of completing by end of 2025.

Q: GEO revenue decline drivers and future outlook A: Decline due to DISH renewal, Shaw/Rogers change, Indonesian broadband program, and NASA consulting. DISH renewal was biggest headwind, Nimiq 4 with Bell to be next headwind.

Q: OpEx for Lightspeed in 2026 A: Ramping, driven by headcount, with technical staff growth and commercial team scaling accelerating in 2026.

Q: User terminals availability A: Mechanically steered antennas available now; flat panel antennas in development with QEST and others, available in advance of commercial service.

Q: Lightspeed pricing and usage dynamics A: Pricing per megabit varies by vertical, with aero and government showing most traction; volumes exceeding expectations.

Q: Maritime market for Lightspeed A: Will pursue maritime, addressing cruise, transport, yachts, offshore energy,看好其前景.

Q: GEO cash generation A: GEO is cash generative now, with low CapEx, likely to remain cash flow positive in foreseeable future.

Q: Kuiper competition A: Kuiper is a competitor in same verticals, pitching in RFPs, but Telesat focused on core enterprise broadband.

Q: Spectrum for additional connectivity A: Focused on Lightspeed, not distracted by direct-to-device spectrum, operating on C-band in North America.