Telesat (NASDAQ:TSAT) executives highlighted progress on the company’s Lightspeed low Earth orbit (LEO) satellite program and discussed ongoing pressure in its legacy geostationary (GEO) business during an earnings call covering 2025 results and 2026 expectations.
Chief Executive Officer Dan Goldberg said the company was “pleased” with 2025 results, noting it finished ahead of adjusted EBITDA guidance despite what he described as “structural challenges” in GEO. Goldberg said management has focused on optimizing the GEO cost structure to maximize cash flow, while prioritizing Lightspeed deployment and commercial traction.
Lightspeed timeline shifts modestly due to chip readiness
The delay is tied to the readiness of application-specific integrated circuits (ASICs) used in Lightspeed satellites’ onboard processors and phased-array antennas. Goldberg said these chips were being developed by SatixFy, which was acquired by MDA last year. He called chip delivery a key schedule risk for the program and said Telesat is tracking development “pretty forensically.” Based on assurances from MDA—Lightspeed’s prime satellite contractor—Goldberg said the company believes the chips will be available in time to support the updated schedule.
In response to a question about deployment cadence, Goldberg said the company expects testing after the initial two satellites, with the heavy launch schedule beginning around mid-2027. He said about 96 satellites are needed for full global coverage and that Telesat expects at least 96 satellites in orbit by the end of 2027, followed by continued launches thereafter.
Defense opportunity drives Mil-Ka spectrum addition
Goldberg emphasized government and defense as a key near-term commercial opportunity for Lightspeed, citing rising defense investments by allied countries and increased focus on “mission-critical, resilient, reliable, high throughput, and low latency” satellite communications. He pointed to Canada’s defense industrial strategy, which identified satellite communications as a critical sovereign capability with an emphasis on Arctic coverage.
Telesat also outlined steps to tailor Lightspeed more directly to defense needs. Goldberg said the company will add military Ka-band spectrum (Mil-Ka) capability across its initial 156 Lightspeed satellites, dedicating 500 MHz—or 25% of the total spectrum Lightspeed will operate on—to Mil-Ka. The change replaces an equivalent amount of commercial Ka-band spectrum on the user link (between satellites and user terminals), while leaving the gateway link (between satellites and gateways) unchanged.
Goldberg said the spectrum plan adjustment is straightforward because Mil-Ka is adjacent to commercial Ka-band, resulting in “no adverse schedule impact” and a “modest cost impact” of about $25 million, which he said is less than 0.5% of the total program cost for the initial constellation.
Asked why the company can add Mil-Ka at this stage after previously describing other spectrum additions as difficult, Goldberg said prior questions largely concerned direct-to-device spectrum bands (such as L-, S-, or C-band) that would require a different payload and a larger satellite. In contrast, he said Mil-Ka is contiguous with commercial Ka-band, enabling what he described as a frequency plan shift of 500 MHz.
Goldberg added that user terminal partners already developing flat-panel antennas and modem solutions for Lightspeed can accommodate the Mil-Ka addition, and he said Mil-Ka-capable terminals—including for platforms such as ships, planes, drones, and manpacks—are expected to be available when the system enters service. He also noted parabolic antennas will remain available for certain applications.
On specific defense-related opportunities, Goldberg cited:
- An IDIQ contract award to Telesat Government Solutions under the U.S. SHIELD program, which he said makes the company an approved supplier for the “over $150 billion Golden Dome project.”
- A recently signed memorandum of understanding with Hanwha Systems in South Korea focused on leveraging Lightspeed and developing compatible user terminals.
- Selection of Telesat and MDA by the government of Canada to develop and deploy the Enhanced Satellite Communication Project – Polar (ESCP-P) platform to support Canadian Armed Forces connectivity in the far north.
Regarding ESCP-P, Goldberg said the program was announced in December but is not yet under contract. He said Telesat and MDA are engaged with the Canadian government and are focused on completing a contract “certainly before the end of this year,” but he declined to provide details on what the constellation will ultimately look like while negotiations continue. He described ESCP-P as involving multiple frequency bands, including Mil-Ka, X-band, and UHF, but said it is “premature” to speculate on whether additional constellations beyond Lightspeed might be developed to support those bands.
2025 results: EBITDA above guidance; net loss widens
Chief Financial Officer Donald, participating in his first earnings call since joining Telesat in October, reviewed full-year financial results and 2026 guidance. Telesat reported 2025 revenue of CAD 418 million and adjusted EBITDA of CAD 213 million, ending the year with CAD 150 million of cash on the balance sheet, according to prepared remarks. For the fourth quarter, revenue was CAD 94 million and adjusted EBITDA was CAD 40 million.
Donald said revenue was in line with expectations and guidance, while adjusted EBITDA came in “well above” the company’s prior CAD 170 million to CAD 190 million target. He attributed the outperformance to higher-than-anticipated capitalized labor for Lightspeed, slower headcount growth, and lower operating expenses in the legacy GEO segment, excluding costs tied to an equity distribution and debt refinancing efforts.
He said adjusted EBITDA included CAD 33 million of expense relating to the Lightspeed equity distribution in the third quarter and the company’s debt refinancing process.
Interest expense totaled CAD 218 million in 2025, down from CAD 240 million in 2024 and CAD 270 million in 2023, which Donald said reflected a buyback of $857 million of Telesat Canada debt. He added that CAD 29 million of non-cash interest expense related to Lightspeed financing was capitalized in 2025.
Net loss for the year was CAD 530 million compared with CAD 302 million in 2024. Donald attributed the year-over-year change primarily to reduced revenue and EBITDA, a goodwill impairment tied to the GEO business, and an increase in derivative liability related to the Lightspeed financing warrant, which he said was driven by an increased valuation of the project as development progresses. He said those items were partially offset by a foreign exchange gain from a stronger Canadian dollar on U.S. dollar-denominated debt.
For the GEO segment, Donald said EBITDA totaled CAD 284 million (or CAD 317 million excluding the CAD 33 million of distribution and refinancing-related costs), representing a 77% margin compared with 80% in 2024. For LEO, he said loss before interest, tax, depreciation, and amortization was CAD 67 million, driven by CAD 72 million of operating expense.
Capital expenditures for 2025 on an accrued basis were CAD 708 million, nearly all related to Lightspeed, below prior guidance of CAD 900 million to CAD 1.1 billion. Donald said the shortfall was mainly due to a milestone payment to MDA that was expected in 2025 but will be made in 2026.
2026 guidance: GEO declines continue; Lightspeed investment ramps
Telesat updated its approach to guidance, providing revenue and adjusted EBITDA expectations for the legacy GEO segment and a total Lightspeed investment figure for the LEO segment.
For 2026, the company expects GEO revenue of CAD 300 million to CAD 320 million, representing a year-over-year decline of CAD 90 million to CAD 110 million, which Donald said is roughly evenly split between broadcast and enterprise. In broadcast, Donald cited expected declines from DISH due to reduced usage of Nimiq 5 and the end of the Anik F3 contract in April 2025, as well as declines from Bell following expiration of its Nimiq 4 contract in October 2025. In enterprise, Donald said the largest impacts include declining revenue under a restructured contract with Xplore (which he said is “vast majority” non-cash) and Telstar 14R reaching end of life.
GEO segment adjusted EBITDA is expected to be CAD 210 million to CAD 220 million in 2026, excluding any debt refinancing expenses.
For Lightspeed, Telesat expects to spend CAD 1.0 billion to CAD 1.2 billion in 2026, including operating costs, capitalized labor and interest, and capital expenditures with vendors and suppliers. Donald said the guidance assumes an average exchange rate of 1.38 Canadian dollars per U.S. dollar. On a question about LEO EBITDA losses, management said it did not provide specific EBITDA guidance in part because the capitalization versus expensing of labor can be difficult to forecast; however, executives suggested Lightspeed operating expense could be roughly CAD 90 million to CAD 110 million in 2026 depending on capitalization.
On liquidity, Donald said the GEO business ended 2025 with approximately CAD 206 million of cash and continued to generate “healthy cash flow,” which the company expects will be sufficient to meet obligations ahead of Telesat Canada debt maturities. He also referenced enhanced liquidity disclosures given the need to refinance $1.7 billion of Telesat Canada debt coming due in December 2026.
For the LEO segment, he said Telesat ended 2025 with CAD 337 million in cash, and that this amount—together with CAD 1.82 billion available under Lightspeed financing and $325 million available from vendor financing—is expected to be sufficient to fully fund Lightspeed through global commercial service.
Donald also said the company was in compliance with all covenants in its credit agreement and indenture.
About Telesat (NASDAQ:TSAT)
Telesat is a leading global satellite operator that designs, builds and delivers high-performance satellite communications solutions across multiple markets. The company operates a fleet of geostationary satellites to provide video distribution, data networking and managed broadband services to media companies, network operators, governments and enterprise customers. Telesat’s infrastructure supports television distribution, cellular backhaul, rural broadband and corporate network applications.
In addition to its geostationary offerings, Telesat is developing a low Earth orbit (LEO) satellite constellation known as Lightspeed.
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