Telesat Corporation Q3 FY2025 earnings call

• GEO: Team executes to maximize cash flow from existing satellite fleet, with Nimiq 5 renewal and Anik F3 nonrenewal impacting revenue. - LEO: Strong progress on satellite, ground infrastructure, and software development; first launch planned late next year; strong commercial interest in Telesat Lightspeed from aero and government users. - Capital structure: In September, distributed 62% of equity in Telesat Lightspeed to a wholly owned indirect subsidiary; engaging with advisers to major holders of GEO debt. - CFO change: Andrew Brown retiring after 6 years, Donald Tremblay started on October 20 with 35 years of finance leadership experience. - Financials: Q3 2025 consolidated revenues $101 million, adjusted EBITDA $47 million, cash from operations $97 million YTD; full-year 2025 revenue expected $405 - $425 million, adjusted EBITDA $170 - $190 million, capital expenditures $900 million - $1.1 billion mostly related to LEO.

In GEO, the biggest revenue headwind in Q3 compared to Q3 2024 was the Nimiq 5 renewal with DISH at a lower rate and declining capacity over the period, and the nonrenewal of Anik F3 which accounted for nearly half of the total revenue decline year-over-year. In LEO, strong progress is being made on satellite development, ground infrastructure, and network software; first launch planned for late next year; strong interest in Telesat Lightspeed from aero and government users. GEO segment margin was approximately 62%.

• Reiterated 2025 guidance for revenues ($405 - $425 million), adjusted EBITDA ($170 - $190 million), and capital expenditures ($900 million - $1.1 billion). - Guidance assumes Canadian dollar to U.S. dollar exchange rate of $1.42. - Reflects higher capitalized engineering and hiring timing for Telesat Lightspeed. - At end of Q3, cash and short-term investments $480 million, $2 billion available under funding agreements with Canada and Quebec; total leverage ratio 8.676x, compliant with credit agreement covenants.

• Actual results may differ materially from forward-looking statements due to known and unknown risks and uncertainties. - Uncertainties related to debt negotiations with GEO debt holders. - Potential risks from supply chain tariffs affecting satellite component sourcing.

Q: Follow-up on Canadian government $60 million a year for 10 years?

A: $60 million is for rural broadband connectivity, commitments for defense purposes would be above this.

Q: Thoughts on space-based data centers for AI with Lightspeed?

A: Bullish on leveraging AI for network efficiency, AI drives broadband usage, but not contemplating Lightspeed for space-based data centers specifically.

Q: Gateway ground network progress?

A: Making good progress, deals with Orange and Vocus, building teleports in Canada, RFP for landing station locations, Intellian under contract for gateway antennas.

Q: India market plan?

A: Engaged with partners, need market access and customer authorizations, Lightspeed can offer broadband connectivity to help India's public policy objectives.

Q: Interoperability with SpaceX at optical level?

A: Technically possible, but need to reflect on benefits for Telesat, SpaceX, and user community.