Earnings call transcript: Telesat Q3 2025 reports net loss, stock falls

Telesat Corp reported a net loss for Q3 2025, surprising analysts with an earnings per share (EPS) of -$1.69, slightly below the forecast of -$1.64. The company’s revenue of $101 million missed year-over-year expectations, down $37 million. Following the announcement, Telesat’s stock price dropped by 4.44% to $29.72 in pre-market trading.

Key Takeaways

• Telesat reported a Q3 net loss of $121 million.
• Revenue decreased by $37 million year-over-year.
• Stock price fell 4.44% post-earnings announcement.
• Telesat is progressing with its Lightspeed LEO constellation project.
• The company reduced its debt by 36%.

Company Performance

Telesat experienced a challenging third quarter, with significant declines in both revenue and earnings compared to the previous year. The net loss of $121 million contrasts sharply with a $68 million net income in Q3 2024. The company’s strategic focus remains on its Lightspeed LEO constellation, anticipated to launch in late 2026.

Financial Highlights

• Revenue: $101 million, down $37 million year-over-year
• Adjusted EBITDA: $47 million, a decrease of $49 million
• EBITDA Margin: 46%
• Cash Position: $483 million
• Net Loss: $121 million, compared to $68 million net income in Q3 2024

Earnings vs. Forecast

Telesat’s EPS of -$1.69 was slightly below the forecasted -$1.64, representing a 3.05% surprise. Revenue came in at $101 million, missing the forecast by a narrow margin but showing a significant year-over-year decline.

Market Reaction

Following the earnings release, Telesat’s stock fell 4.44% to $29.72 in pre-market trading. The stock’s decline reflects investor concerns over the company’s financial performance and future profitability, especially given its 52-week high of $36.85.

Outlook & Guidance

Telesat projects full-year 2025 revenues between $405 million and $425 million, with adjusted EBITDA ranging from $170 million to $190 million. Capital expenditures are expected to be between $900 million and $1.1 billion, primarily driven by the Lightspeed project.

Executive Commentary

CEO Dan Goldberg emphasized the strategic importance of the Lightspeed constellation, stating, "We expect to enter global service by the end of 2027." He also highlighted the technological advancements, noting, "Every single one of our satellites is basically a flying computer processor."

Risks and Challenges

• Continued revenue decline poses a risk to financial stability.
• High capital expenditure for the Lightspeed project could strain resources.
• Market competition in the satellite broadband sector remains intense.
• Economic uncertainties may affect government and defense contracts.

Q&A

During the earnings call, analysts inquired about spectrum transactions and the potential for AI and data center opportunities. The company also addressed progress on its gateway ground network and manufacturing challenges related to tariffs.

Full transcript - Telesat Corp (TSAT) Q3 2025:

Jay Allen, Conference Call Moderator: Hello, and welcome to the Telesat third quarter 2025 financial results call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, again, press star one. I will now turn the conference over to James Ratcliffe. Please go ahead.

James Ratcliffe, Corporate Representative, Telesat: Thank you, Jay Allen. Good morning. Thank you for joining us today. Earlier this morning, we filed our quarterly report for the period ending September 30th, 2025, on Form 6-K with the SEC and on SEDAR+. Our remarks today may contain forward-looking statements. There are risks that Telesat’s actual results may differ materially from the results contemplated by the forward-looking statements as a result of known and unknown risks and uncertainties. For a discussion of known risks, please see Telesat’s annual report and updates filed with the SEC. Telesat assumes no responsibility to update or revise these forward-looking statements. I’d now like to turn the call over to Dan Goldberg, Telesat’s President and Chief Executive Officer.

Dan Goldberg, President and Chief Executive Officer, Telesat: Thanks, James, and good morning to everyone. Thanks for joining us this morning. Q3 was in line with our expectations, and I’m pleased with Telesat’s performance in the first nine months of this year in both our GEO and LEO segments. In GEO, our team continues to execute in a disciplined, focused manner as we work to maximize the cash flow from our existing satellite fleet. The biggest revenue headwind in the quarter when compared to the third quarter of 2024 was the Nimiq 5 renewal with DISH. As we’ve shared earlier, DISH renewed the Nimiq 5 contract, but at a lower rate and capacity that declines over the renewal period.

That renewal, combined with the non-renewal by DISH of our Anik F3 satellite, which reached the end of its station kept life, so it could no longer support direct-to-home video services, accounts for nearly half of the total revenue decline year over year. In LEO, we continue to make strong progress on the development of the satellites, ground infrastructure, and the software for the network. As a reminder, our first launch is planned to take place late next year. I’m very pleased with all the good work that’s taking place on the program. And on the commercial side, we’re seeing strong interest in Telesat Lightspeed across our target segments, particularly at this time with AERO and government users. We remain very focused on concluding customer agreements and adding to our contractual backlog.

In addition to our progress in the GEO and LEO businesses, we took an important step in the quarter to optimize the company’s capital structure and enhance our financing options. In September, we distributed 62% of the equity in Telesat Lightspeed to a wholly owned indirect subsidiary of Telesat Corporation. I’m also pleased to say that our advisors are engaging with the advisors to the major holders of our GEO debt with the objective of finding the best path forward to addressing that debt. Finally, and as we announced earlier this year, Andrew Browne will be retiring from Telesat after six years as the company’s CFO. We found a worthy successor to Andrew and Donald Tremblay, who started with the company on October 20th. Donald has 35 years of leadership experience in finance and is very well suited to lead our finance team going forward.

So a big welcome to Donald, who’s here with me this morning. As Andrew is in the process of transitioning responsibilities over to Donald, we’ve asked Andrew to run you through the numbers one last time before his official retirement later this month. So with that, over to you, Andrew.

Andrew Browne, Chief Financial Officer (Outgoing), Telesat: Thank you, Dan. Good morning, everyone. I would now like to focus on highlights from this morning’s press release and filings. In the third quarter of 2025, Telesat reported consolidated revenues of $101 million, adjusted EBITDA of $47 million and generated cash from operations of $97 million year to date, thus ending the quarter with $483 million in cash. For the third quarter, revenues decreased by $37 million to $101 million. Operating expenses increased by $12 million to $58 million, and adjusted EBITDA decreased by $49 million to $47 million. The adjusted EBITDA margin was 46%. I would note that the margin in our GEO segment was approximately 62%. The revenue decrease for the quarter was primarily due to a lower rate on the renewal of a long-term agreement with a North American direct-to-home customer and the expiration of a separate agreement with that customer.

Other factors included reductions in services for certain enterprise customers, particularly an Indonesian rural broadband program, and a reduction in services for another North American direct-to-home customer. The increase in operating expenses was primarily due to higher Telesat Lightspeed headcount growth, along with higher legal and professional fees and offset by higher capitalized engineering costs. As usual, we break out the performance of our LEO and GEO segments separately in Note 4 of our financial statements filed on Form 6-K. Interest expense in the third quarter decreased by $5 million during the quarter compared to the same period in 2024. To note, our cumulative principal amount of debt we purchased is $857 million, of which cost $450 million, an average price of $0.53. This also results in interest savings of approximately $53 million annually.

Combined with the previous repayment of $356 million of term loan B, our overall debt has been reduced by approximately 36%. In the third quarter, we recorded a loss in foreign exchange of $32 million as compared to a gain of $36 million in the third quarter of 2024. In the third quarter, we incurred a $121 million net loss in the quarter compared to a net income of $68 million in the third quarter of 2024. The variance was due to lower revenues, the foreign exchange loss I just mentioned, a loss related to the change in the fair value of financial instruments, and the non-recurrence of a gain on the repurchase of debt recorded in the third quarter of 2024. For the first nine months of 2025, cash inflows from operating activities were $97 million, and cash flows used by investing activities were $540 million.

In terms of capital expenditures incurred, almost all were related to Telesat Lightspeed. During the third quarter, we completed our third draw on our financing facilities with the Government of Canada and the Government of Quebec. Just receiving $65 million as of September 30, we had drawn a total of $405 million from the facilities. Subsequent to the quarter end, we had drawn a further $135 million at the end of October, thus having a total cumulative draw of $540 million. Guidance, as you will also have noted in our earnings release this morning, we reiterated our guidance for 2025 for revenues, Adjusted EBITDA, and capital expenditure. The guidance assumes a Canadian dollar to US dollar exchange rate of 1.42. For 2025, we continue to expect full year revenues to be between $405 million and $425 million.

In terms of operating expenses, excluding share-based compensation, we expect spending to be approximately between $75 million and $85 million on Telesat Lightspeed this year. This guidance reflects higher capitalized engineering and the timing of hiring as we continue to ramp up the Telesat Lightspeed team. We continue to expect total Adjusted EBITDA to be between $170 million to $190 million and also reflects provisions we’ve made for advisory legal professional fees related to the work in respect to GEO DEN. In respect to capital expenditures, we continue to expect our 2025 expenditures to be in the range of $900 million to $1.1 billion, which is nearly all related to Telesat Lightspeed.

To meet our expected cash requirements for the next 12 months, including interest payments and capital expenditures, we have approximately $480 million of cash and short-term investments at the end of September, as well as $2 billion available under our funding agreements with the Government of Canada and the Government of Quebec. At the end of the third quarter, the total leverage ratio calculated under the terms of the amended senior secured credit facilities was 8.676 times. Telesat’s compliance with all the covenants in our credit agreement and indentures. A reconciliation between our financial statements and financial covenant calculations is provided in the report we filed this morning. Our 6K provides the unaudited interim condensed consolidated financial information on the MD&A. The non-guarantor subsidiaries shown are essentially the unrestricted subsidiaries with minor differences.

This concludes our prepared remarks for the call, and very happy to turn back to the operator and address any questions you may have. Thank you very much.

Jay Allen, Conference Call Moderator: Thank you. Again, if you have a question, please press star one on your telephone keypad to join the queue. If you wish to remove yourself from the queue, simply press star one again. One moment for your first question. Your first question comes from line of David McFadden of Cormark Securities. Your line is open.

Hi, great. Yeah, so first of all, I just want to say congratulations to Andrew on his retirement. Hope you have a nice retirement there. So a couple of questions.

Andrew Browne, Chief Financial Officer (Outgoing), Telesat: Thank you.

Yeah, I’ll just start first of all on the debt negotiations. I was wondering, could you just, maybe give us an idea of, do you think you’re far apart in terms of what the debt holders want, or do you think you might be pretty close? Just kind of wondering where things stand with respect to that.

Dan Goldberg, President and Chief Executive Officer, Telesat: Hey, David, it’s Dan. So, it’s too early to say. We’ve started engagement, and we’ll just have to take it from there. So, yeah, too early to say.

Okay. So then a question on the guidance. So you left your EBITDA guidance unchanged, but yet you dropped your spend on the LEO. So that would imply a higher or sorry, a lower EBITDA being generated from GEO, but you didn’t change your revenue outlook on GEO. So just kind of. Just kind of wondering how you square those off because if the revenue hasn’t changed on GEO, it shouldn’t really change the EBITDA.

Maybe I’ll take the first crack at this. So, relative to guidance, we’ve underspent some, mostly related to LEO headcount. And that’s been two things. One, we’ve capitalized more kind of engineering expense than we originally assumed. So that’s number one. And number two, our hiring feels like at the end of the day, it’s going to be sort of more backloaded than what the budget assumed. And so in any event, so that explains the kind of underspend on the LEO OpEx. But it’s been offset by greater spending than anticipated around professional fees. And that’s pretty much entirely around the refinancing exercise and the transaction where we spun out the equity stake in Telesat LEO. So in any event, I mean, that’s kind of how it’s played out.

So yeah, so at the end of the day, OpEx down on LEO headcount because of capitalized engineering and just a slower ramp. But offset by increased professional fees, mostly around the transaction that we announced spinning out LEO.

Okay. I think most people would have viewed those as one time and wouldn’t hit EBITDA by that. But anyways, at least we know what’s going on.

Yeah, yeah, yeah. I mean, fair point. I mean, just to be transparent about it, that’s what it was.

Right. Okay. So you called out the two sectors where you’re seeing, I guess, stronger interest than others, AERO and government. Are you seeing a really increased demand? Say from the defense sector that defense could be kind of viewed as its own?

Yeah. You know what? That’s a great question because when we work with government, a lot of that is around rural broadband programs. But what I was referring to in my opening comments is much more on the defense side. So we know that the current Government of Canada has committed to meet Canada’s NATO spending obligations, and other allies have made similar commitments. The Government of Canada is announcing a budget today, and I don’t know, based on everything we’re reading and based on everything we’re seeing, we expect there’ll be a meaningful uptick in defense spending. Lightspeed, we’ve talked about this before, sort of a dual-use infrastructure. It’s designed for rural broadband connectivity, for commercial aero, for maritime services, for cellular backhaul, and the like. But it also has great utility for defense use cases as well.

And given what Canada is saying about the importance of Arctic sovereignty, given the amount of spending that Canada will be doing with its allies to meet its defense obligations, and I think an expectation from the government that when it’s spending a lot of money with its allies, there’s some expectation that the allies will, in turn, reciprocally, be contracting with Canadian providers. All of those things gives us a great deal of optimism about us to grow our business and leverage Lightspeed for those defense requirements, both with the government of Canada and Canada’s allies.

So just following up on that comment, the Canadian government has committed to a minimum revenue commitment of $60 million a year for 10 years. I would have thought that most of that $60 million was not defense. Can you confirm that?

Yeah, correct. That’s going to be used for rural broadband connectivity. And you’ll recall the way that agreement works is we basically create a pool of capacity that we’ve then agreed to sell to rural Canadian ISPs at sort of below market rates. So that $60 million a year for 10 years should the pool of capacity that underpins that, we expect incremental revenue when that capacity is made available to those rural ISPs. And then, yes. Any commitments from the Government of Canada for defense purposes would be above and beyond that.

Okay. Okay. So there’s a potential for that to be significantly greater. So you also said that the first launch for satellites is planned late next year. I thought that the satellites were going to start to be launched in Q3 2026.

Nope. Nope. I think for many, many quarters now we’ve been talking about late next year.

Okay. All right. I guess I was incorrect on that one. Okay. I mean, you have a book of SpaceX, right? So can you give us an idea of what month you expect the satellites to start to go out?

It’ll be late, as I expect. I mean, we’re probably looking at a December launch with a couple of Pathfinder satellites that we’ll use to do testing and validation and start to do that for our own purposes and make it available to meaningful customers as well to do their own testing and the like. And then 2027 should be a very busy launch cadence for us as we launch really all the rest of the satellites in the constellation.

Jay Allen, Conference Call Moderator: Thanks, David. I think we’ll move on to the next question, please.

Dan Goldberg, President and Chief Executive Officer, Telesat: David, do you have one more?

I did have one more. Sorry, I don’t want to move off the call. You’re still expecting to start to generate revenue on Lightspeed in the fourth quarter of 2027, correct?

Yep. That’s exactly right. We expect to enter global service. By the end of 2027. So that’s right.

Okay. All right. Thanks, guys.

Okay. Thank you.

Jay Allen, Conference Call Moderator: Your next question comes from Edison Yu of Deutsche Bank. Your line is open.

Edison Yu, Analyst, Deutsche Bank: Hey, thank you for taking our questions. So firstly, just want to come back to the carve-out of the LEO equity. Could you walk us through the main rationale behind this move? And would you contemplate raising more equity for Lightspeed or potentially using it as a sort of currency as part of other transactions?

Dan Goldberg, President and Chief Executive Officer, Telesat: So I mean, the rationale is really around just trying to optimize the capital structure and to enhance our ability to do kind of more, raise more funds in the future. I mean, the notion is by getting that controlling interest into an entity that’s separate from where the debt sits for our geo activities, it just gives us yeah, more scope, more flexibility, more optionality around using that stake to if we need to, to secure incremental funding. So that’s the primary purpose of doing that transaction. As far as issuing more equity at this time, and that’s not a current plan.

Lightspeed for the first 156 satellites, which is what we need to launch a compelling, fully global network, is fully funded with the commitments that we have from the Government of Canada in Quebec to loan us money with our own equity contribution, with the $300 million of vendor financing that we have. So we’re in good shape there. So yeah, that’s how we think about it.

Edison Yu, Analyst, Deutsche Bank: Okay. Gotcha. And also about. We have seen some spectrum transactions in the industry recently. Just curious about your thoughts on that, the spectrum supply-demand landscape, how you see it playing out for the longer term. And also, would Telesat potentially have a role to play in this D2D market?

Dan Goldberg, President and Chief Executive Officer, Telesat: So, the spectrum, I mean, the big spectrum transaction was obviously SpaceX acquiring the S-band rights of EchoStar, and to your point, that was all about having spectrum for D2D. We certainly see rumors that there could be more of those transactions contemplated. We’ve got no insight on that. Our focus, as we’ve said before, is really on deploying Lightspeed, which is not a direct-to-device constellation, but instead an advanced global broadband constellation, so that’s where our focus is right now. I mean, we certainly have the wherewithal and the expertise to launch a direct-to-device network. We don’t have the spectrum for it other than the C-band spectrum that we still have following the decision by the U.S. and the Canadian regulators to repurpose about three-fifths of that spectrum for 5G. But we still have the other two-fifths.

But it’s not our focus at this point to pursue a direct-to-device network. I would note that the FCC recently issued, I think, a notice of proposed rulemaking or a notice of inquiry about potentially using the rest of the C-band that the satellite industry continues to make use of, using the rest of that spectrum for 5G, so that’s certainly something that Telesat will be paying close attention to. We have satellites that have C-band coverage and capacity over the U.S. and, of course, over Canada as well, so we participated in the last proceeding when the FCC reallocated that C-band spectrum, and if that’s something they do again, we’ll follow that and participate in that actively again.

Edison Yu, Analyst, Deutsche Bank: Okay. Gotcha. Appreciate the caller.

Dan Goldberg, President and Chief Executive Officer, Telesat: Thank you.

Jay Allen, Conference Call Moderator: Your next question comes from Caleb Henry of Quilty Space. Your line is open.

Hi. Thanks for taking the questions. Follow-up on the launch side of things. You mentioned first launching some Pathfinders and then serial launches. Are you planning a gap between those two? And if so, can you quantify how much time would be in between the first launch and the second? And if you’re anticipating any design changes or upgrades or tweaks that might come from that learning period?

Dan Goldberg, President and Chief Executive Officer, Telesat: Thanks, Caleb, for the question. So it’s always been our plan to launch the Pathfinder satellites. We can do an enormous amount of testing on the ground, which we will do. But there’s nothing quite like gaining the confidence of testing the satellites in orbit, in space, real conditions. So we’ll do that. It’s probably going to be, I don’t know, two, three, four months. When we launch those satellites, we need to do some orbit raising. We’re going to want to put them sort of fully through their paces, test out just everything, the onboard processors, the inner satellite links, the handoff of traffic from satellite to satellite on the ground. So anyway, we’ll do all that. And again, we’ll be doing some of that ourselves alongside of MDA and then with customers as well.

And we know that the customer community is keen to engage in a variety of tests with us as well. So that’s the plan, but so we have a comprehensive testing plan. Our expectation, particularly after all the testing we’ll have done on the ground, is that it should be, it’s more confirmatory in nature, I would say. So we’re not expecting, yeah, we’re expecting to confirm the findings of the testing that we’ve done on the ground once the birds are up in space.

Okay. I also thought this morning Telesat announced the partnership and investment in Farcast. Can you share how that fits into the planned user terminal portfolio for Lightspeed?

Yeah. We’ve made a couple of announcements already. We will have a suite of different user terminals for each of the different verticals that we’re focused on. I think to date, we announced a collaboration with KASS around aeronautical FPAs. We’ve announced a collaboration with Intellium on both flat panel antennas and a dual parabolic antenna, which for certain applications can still make sense, and then the one today with Farcast. Farcast is a very innovative company with a very innovative technology where they interleave the transmit and receive elements of one of these flat panel antennas, and there are real advantages that you get from that.

I mean, basically, you get a smaller user terminal that’s still highly capable, and we’ve been working with Farcast for some years now, and feel, yeah, very optimistic about the progress that they’ve made and the advantages that leveraging their technology can give us and our customers across a whole range of different verticals, and I’d say we’re not the only satellite operator out there that’s enthusiastic about the technology that they’re developing, so that’s our approach. It’s very much, I’d say, an open ecosystem in many ways in terms of the user terminals that can be used. We’ll have a modem that can be integrated into these various flat panel and dual parabolic antennas. Our constellation can also operate in a transparent mode, so in some circumstances, customers can bring their own waveforms and their own modems. There’s some segment of customers where that might be attractive.

We’ve always said that the trajectory of the technology development around these flat panel antennas is moving in a very favorable way, and this announcement with Farcast, I’d say, is just a manifestation of that. We’re excited about it.

If not, have you announced a modem supplier? I assume it’s one single company.

Michelle, do you want to say something about the modems?

Yeah. So for the modem, the user terminal, this is a development that we took on ourselves. We are partnering with some vendors to do the detailed design that Telesat will own. And we’re also partnering with a Canadian contract manufacturer for the volume production here in Canada to be announced at a later time.

Okay. Thanks. And then just last question. We’ve seen a decent amount in the news about LEO constellations or tech companies that are excited about the idea of space-based data centers for AI. I’ve seen Musk and Bezos and Starlink and NVIDIA. Is this something that Telesat will be interested in doing as well? And can it be done with the baseline Lightspeed constellation, or would that require some sort of upgrade?

Caleb, you broke up a little bit there. Would you just mind repeating the question?

Sure. Sorry. I was asking if Telesat has interest in space-based data centers for AI because of the amount of enthusiasm we’re seeing between kind of other players like Musk and Bezos and if that can be done with the existing Lightspeed architecture or if that requires any changes.

So, maybe a couple of thoughts on that. One, we’re bullish about leveraging AI to improve the efficiency of the network in terms of managing traffic and the like. So that’s number one. Number two. AI is going to just drive a lot of broadband usage. And so that is accretive to what we’re doing too. Three, every single one of our satellites is basically a flying computer processor. And so we see it absolutely playing a role in the kind of larger global digital infrastructure, including in connection with AI. But I don’t think that we’ll be leveraging Lightspeed so much for kind of space-based data centers. That, I see lots of advantages and benefits from the development of AI in terms of how our constellation will be operated and used. But we’re not contemplating Lightspeed per se to be used as kind of in-space data centers.

I think that’s a little bit different.

Got it. Okay. Thank you very much.

Thank you.

Jay Allen, Conference Call Moderator: Your next question is from Chris Quilty of Quilty Space. Your line is open.

Chris Quilty, Analyst, Quilty Space: Thanks, Dan. I think you said you’re still targeting end of 2027 for service. I just wanted to clarify. Do you need all 198 for launch and initial service, or can you launch with a subset of that?

Dan Goldberg, President and Chief Executive Officer, Telesat: We expect to have - so we’re starting with 156 satellites. We expect those will be in orbit by the end of 2027. We can start global service with -

96 satellites.

Yeah, with 96 satellites and we’ll do that. The balance, the other 60, I guess, will follow on very quickly from that, but yeah, that remains the plan.

Chris Quilty, Analyst, Quilty Space: So 96 would give you geographic coverage, but not the capacity.

Dan Goldberg, President and Chief Executive Officer, Telesat: Well, I mean, I think we can actually—we’ll start customers up on 96. And we’ve got a lot of folks that are very keen to have Lightspeed in service and to start leveraging it. But we’ll go from 96 to 156 in a matter of a couple of months.

Chris Quilty, Analyst, Quilty Space: Gotcha. And in order to launch service, you need the gateway ground network. Where are we at in that process?

Dan Goldberg, President and Chief Executive Officer, Telesat: Yeah. We’re making good progress there. I think we’ve already announced a deal with Orange for a European teleport. We’ve made some announcements, I think, with Vocus for teleports in Australia. We ourselves are building out three or four teleports, four teleports here in Canada, and we’ve procured the land and the like to be building those out, and we’re in the midst of an RFP right now lining up landing station locations: U.S., Latin America, Asia, and I’d say we’re well advanced in site selection and the like. Intellium is under contract to build all of the gateway antennas, and they’re making good progress there, so anyway, we’re absolutely where we need to be in terms of the rollout of our landing station infrastructure.

Chris Quilty, Analyst, Quilty Space: Gotcha. And obviously, higher altitude helps with siting. But do you anticipate any areas or regions where it’s more difficult and you might have to actually have fiber laid more than just setting up at an existing teleport facility?

Dan Goldberg, President and Chief Executive Officer, Telesat: I don’t think so. We’ve got good candidate locations in all the geographies where we need it. Now, of course, I mean, all these gateways are going to be fibered up, and they’ll be connected to POPs at kind of strategic locations around the world, but no, I mean, that’s proceeding in a good way, and remember also the constellation has inner satellite links will be rolling out initially about 25 landing stations around the world and then adding to those, and then our customers can have their own landing stations as well, but having the inner satellite links gives us greater flexibility in terms of and minimizes in some ways the number of landing stations we need in order to have a fully connected global network.

Chris Quilty, Analyst, Quilty Space: Gotcha. Follow up on just the constellation build. I know it’s a fixed-price contract, but. So more of MDA’s issue. But are you seeing any challenges related to the tariff situation, which seems to change on a weekly basis?

Dan Goldberg, President and Chief Executive Officer, Telesat: Not yet. And we’re in contact, as you can imagine, with MDA all the time. To date. And so what’s happening is MDA’s building the satellites at their factory outside of Montreal. They’re sourcing some of the components from here in Canada. They’re sourcing components from Europe. They’re sourcing components from the U.S. Sure, there are components coming from other parts of the world as well. And so it’s really where MDA could potentially be at risk is if they’re importing components, say, from the U.S. and Canada implements retaliatory tariffs, which they haven’t done to date. That’s where there would be more risk. But so far, Canada hasn’t implemented retaliatory tariffs. And as far as we can tell from MDA, they’re not being adversely impacted by the tariffs that are out there.

Chris Quilty, Analyst, Quilty Space: Great. Looks like SpaceX and OneWeb may actually get into India sometime next year. Not this year as I had thought. But with that market opening up, do you have a specific plan for that market? I think you had an announcement with NELCO some years ago. Is that still the partner and have you evolved the strategy?

Dan Goldberg, President and Chief Executive Officer, Telesat: We’re engaged with a number of parties that will be good partners for us in India. We’ll need to get market access from a satellite perspective. And then our customers will need their own authorizations to be service providers and provide service to their customers in India. So in any event, we’ve been following closely the developments in that market from a GEO perspective. It’s a market that I’ve certainly been active in that market for decades. So it’s a market that we know well. We think that Lightspeed can offer a lot to users in India and help the government achieve some of their public policy objectives around broadband connectivity and the like. So yeah, we’ve got a plan there.

Chris Quilty, Analyst, Quilty Space: Gotcha. SpaceX got its first customer for its plug-and-placer capability, which is really acting as a transport layer for other satellite operators. Is that a consideration for Lightspeed? And how would that be implemented in the future?

Dan Goldberg, President and Chief Executive Officer, Telesat: So, it’s interesting, this question of making the constellations interoperable at the optical level. Our optical terminals are coming from Tesat. We were deliberate in selecting an optical terminal that was compatible with the U.S. government’s standard that came from the Space Development Agency, I believe. So we will be interoperable with other constellations that are also meeting the SDA’s standards. So, that’s one. And then, with respect to SpaceX, we’ve given some thought to how we could make Lightspeed interoperable with SpaceX at the optical level. Technically, there’s a relatively straightforward path to get that done. So then, it’s the old, "You can do it." And then the next question is, "Should you do it?" Are there benefits to Telesat, SpaceX, and importantly, the user community for us to be interoperable?

And I’d say that’s still something that I think we all need to reflect on a little bit more. But there’s certainly a path there to get that done.

Chris Quilty, Analyst, Quilty Space: Gotcha. Final question. You’re like the only space company that hasn’t mentioned Golden Dome on their conference call. For the obvious reason. But as you mentioned, you are SDA compliant on the terminal side. Is there a path forward and any discussions that you expect around potentially working on that program or contributing?

Dan Goldberg, President and Chief Executive Officer, Telesat: I’d say in all honesty, I haven’t mentioned Golden Dome on this call, but I’m guilty of mentioning it in prior calls. I mean, and what we’ve said on those prior calls is yes, Lightspeed I think could make excellent contributions to a Golden Dome network. I mean, from what I know of Golden Dome, and there’s still a lot there that needs to be fleshed out in terms of what Golden Dome is exactly, but it’s basically a collection of different networks that are going to be interoperable with one another. Some of those network layers will be space-based. Others will be ground-based. And they’re all going to need to talk to each other.

We certainly believe that there’s a role that Lightspeed could play because of our optical inner satellite links, because of the orbits that we’re flying in, which are additive, I think, and would add resiliency to what some of the other constellations are. I think Canada has expressed an openness to participating with the U.S. in Golden Dome. Certainly, Canada and the U.S. through NORAD have a long history of cooperating to protect sovereignty and the defense of North America. Certainly, it’s the case that Space Force and the Pentagon and DOD, sort of more broadly, are well aware of the capabilities of Lightspeed and I think very interested in the capabilities that we could offer. So yes, we think of Golden Dome as another one of those defense opportunities that could be very accretive to the broader Lightspeed business case.

Chris Quilty, Analyst, Quilty Space: Great. Thanks a bunch, gentlemen.

Dan Goldberg, President and Chief Executive Officer, Telesat: Okay. Thank you.

Jay Allen, Conference Call Moderator: This concludes the Q&A session. I’ll now turn the call over to CEO Dan Goldberg for closing remarks.

Dan Goldberg, President and Chief Executive Officer, Telesat: Okay, well, thank you all for joining us this morning. I do want to take just a moment. It is Andrew’s last earnings call with us, and Andrew and I have worked together for, I think, 27 years now, and before signing off here, I just wanted to acknowledge what a brilliant career Andrew has had, certainly in the satellite industry. He served as CFO for, I think, at least four or five publicly traded satellite companies and had a great career in the tech world even before joining the satellite sector, so in any event, just to say to Andrew, thank you for being such a great colleague and being such a great CFO. Thank you for all of your contributions to Telesat over the last six years. We deeply appreciate it, and we wish you well, and so with that, I’ll sign off.

Maybe Andrew has a word, but I’ll sign off and just say to everyone, thank you for joining the call, and we look forward to speaking with you again when we issue our full year numbers, but over to Andrew.

James Ratcliffe, Corporate Representative, Telesat: And look, Dan, thank you so much for your kind words. And indeed, a friendship partnership over many years and six years here at Telesat. And welcome, Donald, coming. He’ll do a great job. And just to say personally, I feel very proud of what we’ve collectively achieved to date and what a great future ahead. And also, sincerely, we’d like to thank all my colleagues around this table and people that we’ve worked very closely together over the years and thank the board. And so that’s it. I will miss our quarterly calls. And with that, thank you very much. And thank you, Dan, again.

Dan Goldberg, President and Chief Executive Officer, Telesat: Okay. Thank you all.

Jay Allen, Conference Call Moderator: This concludes today’s conference call. You may now disconnect.

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