Telesat Corporation Q4 FY2025 earnings call

1. Geo business: Faced structural challenges but optimized cost structure to maximize cash flow, came in ahead of adjusted EBITDA guidance. 2. Lightspeed: Significant progress made on development, first satellites scheduled to launch end of 2025, but commercial service now expected end of Q1 2028 due to ASIC chip delivery delay. MDA's acquisition of Satix5 helps. 3. Market opportunities: Lightspeed has opportunities in commercial (e.g., broadband to commercial airlines) and government defense markets. Signed agreements with Viasat, US SHIELD program, Korea MOU, and Canada's ESCAPE project. Optimized Lightspeed for defense by adding MIL-KA spectrum. 4. 2026 priorities: Laser-focused on deploying Lightspeed and expanding backlog in LEO, maximizing revenue and managing costs in Geo, and working on refinancing Telesat Canada debt.

Telesat ended 2025 with reported revenue of $418 million, adjusted EBITDA of $213 million, and $510 million in cash. In Q4 2025, LSAT reported revenue of $94 million and adjusted EBDA of $40 million. Geo business segment EBITDA in 2025 totaled $284 million, or $317 million excluding $33 million of expense, with a margin of 77% down from 80% in 2024. LEO's loss before interest, tax depreciation and amortization for 2025 was $67 million. For 2026, Geo is expected to have revenue between $300 million and $320 million, with adjusted EBITDA between $210 and $220 million. LEO is expected to spend between $1 billion and $1.2 billion on Telesat Lightspeed in 2026.

1. Geo revenue expected between $300 million and $320 million in 2026, a year-on-year decline of $90 to $110 million. 2. Geo segment adjusted EBITDA expected between $210 and $220 million in 2026, excluding debt refinancing expense. 3. LEO expected to invest between $1 billion and $1.2 billion in 2026 on Telesat Lightspeed, including operating costs, capitalized labor, and interest.

There are risks that actual results may differ materially from forward-looking statements. Known risks to be found in TELUSAT's annual report and updates filed with the SEC, such as schedule risks related to LSAT program like chip delivery issues.

Q: David McPhagen asked about the decision to put Lightspeed capacity on military KA band and deal with Canadian Armed Forces.

A: Dan replied they announced ESCAPE in December but not under contract yet, focused on getting it done soon.

Q: Caleb Henry asked about launch schedule delay and MIL-KA user terminals.

A: Dan said initial launch still towards end of 2025, gateway unaffected, MIL-KA user terminals available when in service.

Q: Edison Yu asked about Canadian Arctic military communication constellation backlog potentials.

A: Dan said pipeline for Lightspeed is robust, expect to grow backlog this year.

Q: Walter Piasik asked about spectrum change.

A: Dan explained MIL-KA is adjacent to commercial KA band, easy modification compared to previous spectrum addition for other bands.