MAXR - Earnings call transcript Q1 2018

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Operator

Welcome to Maxar Technologies Ltd’s Q1 2018 Conference Call. We would like to remind you that part of today's discussions, including responses to various questions, may contain forward-looking statements which represent the Company's estimates, future plans, objectives and expected performance as of today's date. These statements are based on current assumptions that the Company believes are reasonable, but are subject to a wide range of uncertainties and risks that could cause actual results to differ materially from the forward-looking information.

You are referred to the advisory regarding forward-looking statements contained in the first quarter earnings news release and in the Company's most recent Management's Discussion and Analysis and Annual Information Form, which are available on the company's SEDAR profile at www.sedar.com under the Company’s EDGAR profile at www.sec.gov or on the Company’s website at www.maxar.com.

As we begin the discussion we ask that you refer to the accompanying slides for today’s call, they can be found on our Maxar website under Investor Events and Presentation Q1, 2018 event details. to discussion like to would now turn over the Mr. I Lance. Howard ahead, Please go sir.

Howard Lance

morning to and you. everyone Thank Good welcome our call.

We us in as the entire results have QX. to take you our would team to Company. to accomplishments quarter thank opportunity the key and are first some for like across I Maxar the we pleased review from join their contribution

the creation. to focus organization continue growth value on We and long-term

our U.S are commercial proud mission deliver international customers. global We and critical solutions, government, allies the to

If Slide presentation. you X, in please turn would to the webcast

first today’s and on detailed, As release we press of number exceeded had expectations a internal strong quarter our metrics. we a

details review but due revenues GEO RCM declined upfront. in results the on Communications a depth X% the year-over-year QX. will in and business, let little over pro is improved you but call, give and This QX forma basis. later declines our sequentially Satellite level revenues of slightly Total We me a to company in high year-over-year expected lines the

Company value from More diversification. have fundamentals the our well and of over increased XX% XXXX roughly of strong of quarter very the portfolio revenues Services first and remainder importantly rest the the quarter. year-over-year demonstrating as the expectations the across of our strong the our businesses revenue segments as Imagery exceeding in

ago in of $X.XX a up credits. timing certain tax EPS also led basis synergies period. $X.XX operational year-over-year Space Government by the This to MD&A form As points EBITDA a basis the acquisition adjusted share U.S. increased and in Systems and across year did XXX of Sats, by Small of pro forma revenues realization in Canada. pro performance, per margin investment driven on forma

U.S. above continued draw with Our X.X off enhanced in despite and on course the the the is new segment. down the quarterly contract year government imagery in book-to-bill quarter XX this just was

international and the the segment driven above business. defense and by imagery strength services contract from commercial this X.X our book-to-bill was our portions Excluding in of

quarter As expected, in the we Constellation. consume timing of the $XX flow million spending this and and We WorldView affirmed ramp EBITDA in receipts on for the year. guidance Legion cash due to flow revenue, our cash free the

satellite coming and the off EPS leader brands chain across Please Slide we X. turn the and space recent value is new and Canada in increased grow and space DigitalGlobe optical innovations leading accelerating a develops and space services, momentum I positioned economy economy. facets our and strong geospatial the radar global global leveraging large one guidance a space evolves. by combines where believe QX end-to-end into new by markets will and solutions the uniquely it small creates our design year. With and infrastructure A company manufacturing acquisition of its for four be in the in to all of the to economy and imaging, demand the capabilities Maxar across as and space U.S.,

the Company agencies scale government customers. a government As credibility international and and with have combined we more U.S.

view, of both use. This while diversifying our markets human streams, products customers an marketing. quarter their P&Ls, information strategies focus we and previously we this the increase customers, Key With grow achieve Please able of to are the In have and share to as adjacent of synergies. stated. larger We resources, that the the a model run to Each $X finance X. our the end we by to wide set turn in distributed model better roughly existing markets, economics. our ones. revenue data end and rate their and Slide will scale in own but and million EBITDA us now services geospatial operating synergies more and recognize enterprise of by driver our first predictable they are million XXXX $XX systems, allow will $XXX Year-to-date supported services in in capabilities cost million operating in accounting, success added brings at offerings. and their companies scale be and procurement benefits

So a good turn X. to were off to start. Slide Please

spending operating We national from the As of recent driven XXXX our a in funding days pleased that Appropriations in requires spending the resolution This Consolidated and conferences the with were we persistence which investor well defense year-to-date in we needed illustrated at military very and uptick above largest an act U.S. threat international global over Act and environment a a positive and security. raises space-based by resiliency are assets. passage environment with U.S. in tailwind. on DOD decade. representing high space increase XXXX, base nation's for the the XX%, much funding budget of provides is levels,

these capabilities, AI for developments advances by Our X. by and are demand aided and turn are vehicles, GEOINT commercial agriculture in markets location-based learning. especially Please growing to mapping, Slide climate applications also driven services, of telecom all machine autonomous

For contract activity its metrics. XXth some of the on delivering at month required consecutive stellar marking government continued above order the details line U.S on the accomplishments execution or inventory in In QX. performance business key the EnhancedView

continue. geospatial intelligence manage to Office We the that this we and has expect partner in to the may future discussion the be contract commercial agency, continue for EnhancedView mission There been years. Reconnaissance fully the National relationship national

we to and forward. So with GEO actively are going the and NRO both data to our continuity imagery access working of NGA ensure the

and are the Our global accuracy marketplace. high commercial in imagery precise unmatched resolution distribution location speed

national see capabilities ongoing we a are Our DigitalGlobe to complement our as to serve the systems. honored business to commercial mission, the is affirming value of government U.S NRO and excited

million, the funding the on to to and U.S GEOINT of and civil customers Symposium program their scheduled Rapid in cloud-based accurate announced while images highest resolution secure defense imagery access EGD the additional received from renewal You funding Also years, that constellation. access submitted service. government of direct launch have collections for is connecting the quarter, highest value. This and want of highest going received on the than U.S. it international easier forward. committed customers with to collection fiscal priority the is our revenue providing the military, more markets, customers product additional assured. and this We That know data interested and contract satellite world's At pipeline it the the commercial consistent foreign bringing build against we satellite nation's In XX designed intelligence that been XXXX prior we current our intelligence. year. design constellation. delivering over they Global Access streams the to and exceptional the the means last with our to for month, for This from further intelligence trusted we mission-critical continue that and believe most level, This will interest drive program agencies, and the DigitalGlobe a a organizations imagery partner are customer actionable partners secure imagery and during that flexible potential to efficient is as time we of taxpayer important available countries intimacy government give customers with for two platform, makes $XX Program. region program resolution seamlessly

commercial, imagery platform And broad now, This launching technology another be driver. Company's of SecureWatch, a comparable targeted signed capabilities extension customers to and the customers over for used commercial to powerful And announced expand we the of we imagery. customers. offerings quarter intelligence very of the program an will defense Also later to use two continue the of be with multiyear with is world conclusion year in this that also at growth geospatial cloud-based later and WorldView-X globally. and expansion commercial during customers RADARSAT-X we the agreements and product summer. being expect online now a major by We this we is easy this XX set over

make extended agreements regularly imagery will all major providers, for HERE commercial navigation from XX one largest of contract DigitalGlobe's produce cloud increase which capabilities with satellite within by their the our mass informational visually enabling vehicles. powered DigitalGlobe, platforms. and (Ph) them multimillion world. U.S. and building ever. HERE their cities use accurate annual have utilize updated now car consistent for signed proprietary, unprecedented allow enable contract to to will using and of business will maps also most open intelligence This partnership Corporation feature company to will and systems Utopia QX with multiyear artificial our computing contract location also create Tech is the algorithms the Utopia DigitalGlobe partnership in structures the which products, interest, building to footprints. DigitalGlobe to HERE efficiency. [HERE] extend definition customers the current customers to and leading maps of around provide footprints dollar multiyear, in These speed decisions DigitalGlobe cm a the contract a have platform of By areas to autonomous the with create imagery DigitalGlobe's values. experience our new One that within announced high best

be product of use markets number a by to expect vertical this We our overtime.

provides printing Space have Systems, most products. access, access on and it's design this corporate successfully distribution, leading in performing technological network operator North complex including built multiple several and carries Spain have and launched Moving advances satellite well in Advanced satellite other XXW-X Hispasat Africa we including largest on to orbit. for date built broadband a It tower customers using the Americas. to services, to the telecommunications we XD applications Europe, the antenna television

on be Networks per advances that unprecedented costs. Development will continues work orbit performance, continues programs for and targeted flexibility several broadband deliver and X the capacity from focus Hughes to to Jupiter gigabit for construction groundbreaking satellite primary and regions. technological satellite Our cost GEO improve provide

moons. state-of-the-art Dragonfly very were including or the to become develop the contentious Broadcasting in engineering future for satellites. that related Corporation acquisition services In We selected quarter XXXX a quarter. customer. ahead that to missions in SSL of required leading Satellite computer a for our our during for greater East. This reach video steerable the one Space commercial goal interface critical System band both space. schedule NDAs systems, leadership of and L broadband from areas and there satellite servicing system complex reality. miniature airworthiness, Tokyo the satisfied aerial data will centric of during MDA training, department offer system awarded humankind’s the systems capabilities by of missions security believe from new Israeli spacecraft RSGS, deliver pleased GEO repeat design capabilities Canada between Olympics. to We deliver AMOS-X robotics remote Japan, maintenance an broadcast XXXX to of includes with will maritime surveillance flexible B-SAT orders that Jupiter's KA we broadcast, various to Restore capabilities space U.S build in also thermal operations. and most and broad its hotspot and communications support systems. and will to utilizes all aircraft government to with success, will legacy includes AMOS-X signed contract national of sensors and defense were endorsement training, the This years. aircraft and for development. Propulsion Middle the is solve flight over disruptive SSL services and capabilities our This definition addition, to and new distribution unit, a enhanced loads to logistics, challenges. satellite provide operations. the and This enable equipment Africa build build selected control will orbit West high-power support extending two the maritime to band satellite. systems, NASA to communication Spacecom and will report customers contract the options continuing in helping and unmanned servicing of also value-added enable SSL high to the capabilities unmanned within spacecraft. contract also chain, of the turnkey Europa Laboratory believe and equipment end-to-end in contracts satellite explore supporting projects, infrastructure, capabilities KU includes Systems ultra it unmanned a to defense number flight pay launched SSL's SSL services. international of MDA signed technologies we advance support, This antennas and is Jet television demonstrate will SSL Europe, unnamed exceptional NASA provide X attitude critical will services, direct-to-home demonstrates Contract the operator the of the hospital mission including furthers and Spacecom ensure or operator provide contracts the B-SAT our November similar the customers. missions, supply no additional in degree satellite a and

was of the year announce on the proud the Radiant I'm list. in the top named Solutions to services, workplaces second defense for Bay contractor that to was consecutive Turning only area the Tampa one and

includes Our geospatial a and scientists team customers data analysts, and U.S. Key the skilled included Force variety during in which contract Tampa agency provide socio-cultural geospatial than within million of imagery of developers at will wins to more from national valuable MacDill highly Florida with Air one extract scale. quarter support software analysts, Base. objects the a resolution be the can at information machine labeled used this satellite accelerate intelligence and learning algorithms, to high imagery development services

and business option engineering extends directly at pipeline providing high environment with software The activity a to programs disaster our and the aid to and set days and identified imagery. Geospatial Solutions’ relief opportunity And investor humanitarian robust. resolution Center like a to provide I bid remote for access enhance critical a to over the terminal the services further our for of level RGT program meetings. Anil the program. quarter. development provision ground their allowing is the discussion including by and Army also CFO, systems with remains that in for company, This program Radiant missions couple for military of information to of a commercial This We long-term things hand Wirasekara our contract would timely signed high follow-on

Anil Wirasekara

everyone. morning Howard and good you Thank

to on get want EBITDA your separate started, intersegment bring eliminating lines I the I segment income activities gross are reporting basis attention revenues a now we to and and statement. of that Before on

the release a in We these have XXXX basis XXXX. figures the for table restate on provided supplemental earnings and that at years quarterly

weakness you as also transparency data will QX of a in pro merger award XXXX segment than XXXX low to the The continued XXX. have Space to the in during as comparison QX provide was completed quarter. is Geo our turn I revenue significantly all flow and more suggested segment growth; activities XXXX provide Howard we imagery line than that actual Systems ions comparing current with forma review, value in to and XXXX but peers as and this this in a greater provided expect a alert comparison through to Please as the quarter into quarter, if the services our this insights Company. revenues to more declines since by Slide provide strong turn appropriate This is Slide market We ramp however, consistency as declined actuals statutory of Please total operations better present one much to where expectations. the requirement. step we earlier made for year-to-year one my downing will our up X, would which coming company compares year-over-year provide years. recorded the like in I to over with revenue quarter results in where concept and be first more results the to should X, more the and health financial with the We quarter. the intercompany to believe offset continue our also

over increased experience EBITDA our the space as also of timing in business credit the reserve and Overall, of RCM business. tax and imaginary by strong of adjusted consolidated quarter planned activity our driven the government. XXX margins a level for in We our Canadian program certain recognition performance lowered project this of and expected points

times to revenues, utilization longer and of customers by U.S volatility. margins it quarterly evaluated is to year-over-year points previously, revenues increase EBITDA asset the over higher a to defense Slide Please were for to Adjusted international the strong is nature XXX up and contract segment needs intelligence segment period that X. the Imaginary by subject with business the and and of X% As driven many mix a WorldView-X year-over-year expander turn such mentioned by government. our XX.X% be synergies. space our it basis growth

commercial with we mention customers defense waves and key that the Howard and As growth. international the had to contributed in market several earlier, intelligence

We at two the on made Legion our key the Conference Constellation development work announcements also GEOINT last month. continued and product

government EBITDA working in in project We Please particular Sat the the to Canada to U.S. segment and SecureWatch in implemented strategy demonstrates year-over-year Canadian tax the RCM and by U.S growth winds issues Slide Com revenues Communications margins is and businesses the work margins the reserves as XX Sat offset that forward. year-over-year by than by expect drivers XX% timing in program will related program X. this imaginary program. that Satellite turn on decline of to Please revenue the point’s business in were product variety of government in growth. GEO provisions. Geo market increase expanded to a this for Systems turn the be and both Space of of credits, in driven and RCM winding XXXX decline diversification contract stabilizes Small The Access the and Rapid recognition XX.X%. the increase return XX. the going key the Adjusted XXXX Slide to down once to XX% our a our segment down experience QX business the should our Reported more

Our a of largely driven pro timing versus services business modifications. the posted contract government increase QX by XX% U.S. revenues, XXXX forma

for machine demonstrated the to NDA particularly with as analytics solid, and margins of to the wins basis mix the our services by like U.S. to and largely X% contracts. by for Customer we range our fixed-price cost learning the recent and things reimbursable to remains geospatial of demand year-over-year forward, predictive XX% XX Going our to closer points moderate for driven EBITDA year. levels XX.X%, declined expect revenue guided growth Adjusted

cash in generated inflow roughly opening cash in have Going its we we $XX to XXXX XX. in strong this segment flow across forward, massive QX Slide a The where to cash capability long-term had QX. we continues Please our heels million growth. This set to XXX it consistent a on and be adjusted positive of turn to pipeline flow. the generated expect is in a million contributor Company

operations. closely going in of to quarterly discontinue As business. This role report of a and cash should the in four have flow will more flows the we and part three and operations fluctuations forward, from we will past, represent the cash

define cash flow during as securitization As a slides this less, flow orbital excludes be the reminder, and A we using call. the integration are costs. interest It items cash in of operating adjusted the can found receivable accompanying appendix of payment. we these reconciliation

the in R&D. During invested XX.X we and million capitalized quarter, capital

at billion on from debt first Going primarily forward, for guidance flow cash working year. us with modestly quarter our of we up drivers interest XX. allow Please two to the expect fourth achieve the X.XXXX focus other made finish program milestones quarter XXXX. our payment We quarter a and capital the in net to on the consolidated target keen of driven and XXXX of of cash the quarters turn Slide

Our well is however leverage the ratio times declined sequentially covenant at X.X range. ended quarter our within and

no maturities debt have material We XXXX. until

March, the from limited a to Day Investor our Constellation we near-term continue belt. As to on delevering we work Legion reminder, as occur expect in

as remains to debt However, done to generate paying hand presentation to team possible. concludes the management and my and flows I The significant debt soon we Company allows levels reduction fully committed back as free in That for once down cash Holly. expect it will to leverage. streams

Howard Lance

believe are off our Anil. XX, in updated outlook XXXX, and you, $X.XX the Slide our and by start are to bottom Please good turn guidance. a the on increasing EPS We the we expense, much depreciation guidance versus And and modest range. by expectations a interest and a our by increase top driven of amortization. for lower expectation but in offset this is previous end Thank

early and our EBITDA growth, revenue, and will conversion still believe allow for drive but objectives synergies year, this unchanged in to our cost at flow outlook remains achieve Our XXXX. cash cash and point the goals efforts us our to we during are

thanking gross Systems at Space Anil revenue outlook no move outlook change that Company. the note to the for the There in for than segment the the please up corporation. their would our to is revenue areas of the again across level. raised efforts for to reflect revenue segment employees net indicated, the wrap net As revenue our rather drive for performance all to we by I like reporting

operator our growth will convinced take to help Maxar I will long-term line With the to questions. and we be increase your glad I’m shareholder their execution of strategies, deliver that, the to going With and value. the remain and open both ask

Operator

at Instructions] Suisse. [Operator sir. Please go will And first you be question your Credit ahead. Rob Thank

Robert Spingarn

things. the statement and here, in given Good of just going net might be but adjustment XXXX that gross, to morning. the little had a some we the the A on revenue couple comment lease I and revenue Howard back versus of should the growth line. have rates, confused

Howard Lance

our XXXX, presented of and have quarter basis. for we XXXX, guidance same forma a actual Well and pro XXXX, the the on first course,

considering segment as being separate is So Rob Valley. reporting activity better we Systems think which represents factories we the Primarily and a Canada intersegment eliminations gross across Silicon the activity. Space gross we are the work line reporting and done are a and issue in this the

Robert Spingarn

don’t XX might year or XXXX was I Space factor of changes. revenue by about revenues last Okay, growth figured for rate into up I that and version I just that million, Systems think went these noticed million another which and the recall I the somehow XX

Howard Lance

correct. is That

and toward the remember, fourth WorldView we began quarter, So illumination. an construction that's intercompany Legion, of

gross within level. at and segment the revenue the in corporate represented be would it and System So Spaces eliminated SSL

Robert Spingarn

about Systems the EBITDA. we credits underlying of December. the don't last I if wanted to do up A sequentially and very sort from in business the year's I’m and strong or we Systems I QX were QX this don’t compare to But performing, for questions. how if ex-out obviously understand is talk could just couple QX if at of significantly apples-to-apples was Space to know is an quarter QX the contribution credits those I the you One margins the and Okay, or and tax for see Anil. Space to know also

Howard Lance

in for you that the tax let credits remind nature. saw roll the our million Got spending than year-over-year. QX in achieved year of that The the were QX in those year, programs contributing Last it, QX. in more milestones total expectations segment me approximately are R&D so the year. through expecting QX. seeing so are overall we operational R&D with we and direct so offset to has when started EBITDA this last are for $XX same QX and is and This off recognizable, year these year, these believe we credits but same year, to in that to year various about and for do they timing first those that credits therefore this as year, Last become the

So if four and normalized think million around that said in number XX would divide have the had have you been it round X.X might XX million. of quarter or by X and you flat million we first

in Space XX maybe makes quarter. might that of you in extraordinary future of and get segment of the I the in terms thinking what the the million $XX in since of about have XX around quarter I'm throughout all year XX quarters million came normalized then sense. call Systems earnings well in as million So lower the hope it first will which

Robert Spingarn

is that's static. Yes, full-year for margin why the so your guidance

Howard Lance

talked ramp growth optimistic remain have year-over-year we quarters our remain of we the in nor the increase encouraged the from that going not to by the as QX. flatten space rest conclude see this of the in we quarter this of out XXXX. Yes, segments posting business up of in numbers about throughout is business RCM at as we of and contribution so We the know have the impact fourth to the we hopefully and start bottoming very ITC and element, performance GEO as Investor the Day, underlying underlying launch you double-digit the the in business, business view

materially warranted it start changing started that this reason at gives felt me some year time. not So is was the but guidance to off and to a good optimistic, feel that we getting

Robert Spingarn

have customers. not then a I Okay interest disappears think payments filings and I and customer Legion, advance we change previously. for ones Then Anil. interest about this then cost and of - in In expense how what capitalized that guess just on finance are do this my the aligned is but borrowing quick some this from increase any couple question Is CapEx. quarter, of from and expense but extent today net of the you in in a to for it's this some is understand kind on final capitalized to expense past. capitalizing is there the you what cost relative the

Anil Wirasekara

no. the criteria answer that second your pretty me question R&D let they what And the in in had So always and have first. have that to is following the capitalize past. There are on criteria's you we are same

is that we you securitize paid we on the orbital get to So no program I have have are and there different. will is interest that because we those that think it certainly that's nothing is, different. back What I think securitization orbital re-clarify some I you referring what to it of that is but paid if

Robert Spingarn

Okay. Alright, thank you both.

Operator

you. Thank

will RBC. go from be Steve Please question Next ahead. at

Steve Arthur

much. Great, thanks very

a questions. of Just couple

talked developing Day, follow-up and in being the and have you series large should Investor to see about pipeline timeline what the just mind, opportunities, that on generally of or for things of little at expectation kind has want removed that how to just investors of either bit long-term the First, decided. anything a list a made was some

Howard Lance

in them all expect of of this the nothing be major through in virtually the question changed programs list off the Yes. checked XXXX and various been we Investor presentations, program-by-program the some hasn't so announcement. I terms The Thanks to monetized that. won't really Several at in months, XXXX. on in for couple way over the of has went in list last We Steve. Day rest repeat of

most short-term view, Investor keep next we that discuss at expect that's pipeline did but to why we XXXX, So Day. of within try but certainly would them be this in and be to a relatively them to not years, wanted the of couple

solid. remain view the So

every pursue large on these continue As so program you point. this list, very are off of nothing noted come opportunities has several to and we at the

Steve Arthur

and items flow just secondly to XXXX, levels. debt balance great sheet couple and cash the a of change outlook. on the Okay, No

chart Looking the thinking to by in targeting three beyond order and in XXXX repayments times of that change the had that and deleveraging XXXX. on Investor you Day, something that any more the strong

Howard Lance

Anil.

Anil Wirasekara

we delevering committed are totally No, Steve that. to

I don't we to presentation, As the expect in in delever mentioned short-term. my

to committed that, we in as on number. But to is is fast ensuring committed said done we is continue Legion XXXX amount still to can. Day I top Constellation. the delever priority firmly once Our we think Having delever that priority that some the that to and our Invested are bid on as

you can down to leverage first are interest continue us but see and in blow and quarter, quite our aggressively times capital. cash still that bucket expense slightly our for get we a was reduce we it certainly different four because our into As manage we our and working we material our when brought will

Howard Lance

additional continue higher We drive create turned EBITDA is other activities into opportunities. that that our be balance sheet driving at free the of both flow. including we to and denominator underway is orbitals can cash the looking that Steve cash are Day on the whether and higher that's monetized at levers securitization reiterate of Investor other today, it talked various assets deleveraging. One or and that

end were all by as and to working achieve the X.X our goal So clear is said times XXXX. very leverage is of of those Anil

Steve Arthur

other one and great Okay, follow-up.

so years. next same and that targets synergy that's on, million million guess achieved talked XX being of is question $X of still sounds and over kind tracking the integrations so well. about years far. like the I Just of couple million you the first in to it And of businesses XXX that’s secondly, the terms targeting

Just should think business growth that's that's changes we the other in that? how from wondering and how different and measured, how normal about

Howard Lance

We our remain XX convinced between been range synergies. expected action said line range scale is end we be upper then of the to in synergies of very cost back of the top is revenue be that the XXX the to and million the that run the addition, and million of XXXX. as from by That's announcement opportunity have end economics dating would merger consistent of the contribution end by contributed lower the EBITDA rate to

$XX all number of quarter still have corporate track little we to well a of different that reduced segments quarter in expense a delivery little primarily on that million rest be as that XX million across the as in consistent of million. ran We our different first provided over different for targeting to segments, of to XX corporate and and the throughout attributed in we cuts XXXX X in that the higher XX did number first for last legal are are the and corporate quarter We QX. we activities the number of with that the FY the guidance expect that it for expense year a a of we We million expense million indicated on have expense.

step So down that suggest that’s going to QX QX. through

Steve Arthur

forward and candidate And are you just profile slightly and season search how one before to just final that. sense entire the are sense CFO so golf know asked something the or impact of a been topic, timing, have looking progressing. likely any targeting of on to different the wondering of just is Any

Howard Lance

that on I'm aware of an impact handicap. Yes, very

I you public only are retired we either predict than next We are that will won't tell that of interested candidates. and year CFOs companies. try I time and in when exact an we we in very recently very have number predict just anymore actively I can can looking a I say the or reiterate the make qualified the can current at announcement, that search of order, the a but

expect to me. future, be experienced for qualified, well near remains very it we in priority top So a CFO and appointing a the

Steve Arthur

Thanks that. appreciate very I much.

Anil Wirasekara

QX, have was to imputed entry the want through for had QX. expense, concern I to Steve handicap, Rob's my one just notes question. I what I that think on it make do we my referring accounting we That’s your to an imputed have appreciate just you the looked you have and we about clarification I interest didn't interest just that. but EnhancedView we in contract. it Thank were in

compare where there QX wouldn't it it in So didn’t I when have a I actuals-to-actuals you QX have you little and confused. you but but XXXX. it but you it in QX was XXXX if sequentially have thought that's said it you XXXX, that, not was got do we compare

that's So what referring to. were I think you

So I that. wanted o just clarify

Operator

from coming now Scotia be Steep Please will next Your Paul Capital. question of ahead. go

Paul Steep

for that the a guidance year making little markets morning. and additional the implies about could should in then about Sat in what bit number you Good thinking Com wins this Howard, the of maybe for talk terms how year. we bookings

Howard Lance

overall have to plus typically change that XX, estimate we suggest here XX% and around don't on awards we to industry or would point eight run at minus. previous see was Our this anything

four far. roughly made I have So say of suggest that will which thus to would total been awards two three

Paul Steep

Thank you.

terms just are to The in do second we of efficiency Alto. guys that be one Palo you at at were of efforts going some the now where would

Legion obviously In got what coming at terms we that, there, have the to are end of there. in left tail adjusting be volumes of is you done

Howard Lance

No.

every has including be for labor the and GEO government. a work U.S. done been the the direct the quarter align try to continue by of in or customers, either part Small We our for commercial DigitalGlobe, with decline market factory, Sat to work for up work in picked

have We the launched. are finishing continue and satellites to factory also number in remain to of that will that be a up

we a and for it is Again, the investor resources. every can we sustained And with on longer-term there so opportunity level other look at day lower in said those we that be market also of will as GEO at to rationalization cost our look orders. align ways quarter believe we continue of better what I further

said the continued but going year we today, work continued further to to of and you new have the to expect before, to the in bottom lots nothing work adjustments continue and cycle. as do line the as on, continue costs with and that our So and orders keep profitable successful of be factory we to try in progresses work announce see to at should with and

Paul Steep

I pursue where situation more made government you my if changes. in think of from terms we have would staff trying you side at pipeline. know that about are the satellite sort looking you one guess the of there, awards are Last to U.S. business Great. Again, where is

Howard Lance

a speech think positioned Maxar a opportunities award going desire dollars, Systems couple we the but closely We of single more our growing, that for pipeline we the companies which capabilities in announcement commercial that something puts is try ultimately we big are in clear, be of are about pipeline. and the that occur The absolutely is we good will award, but might that position, yet work We like won millions a those it Space announcements. but in wins call a of quarter, optimistic, very the with within. in you to with believe what not hundreds to have after is talks compete. very proof and remain call well and the or and talked announced about we in speech We technology future government's believe won’t to quarter

Paul Steep

Fair enough. Thanks guys.

Operator

Thank you.

question Next Please will Tim ahead. TD. from be at go

Timothy Andrews

a Good Howard, can moving contracting you Maybe to that their you with considerations speak from you hearing what terms I’m for new the customers of GEO morning. seeing the GEO for are a regarding the signs in wondering are in if forward market. Sat. specifically bottom

Howard Lance

direct-to-home their are an the video see reach capabilities Well what provide on of going both video one and order booked to that for focus customers Those Amber calling are replacement we current such Tim. as customer to for satellites satellite, one their Brazil the to broadband situations Telstar, We that as increased end-of-life. we in hybrid satellites are direct-to-home capability a little are data. every which providers have big continue different and

So, looking those rather are slightly kinds than we complexities a have of customers more so satellites, think at little higher prices. less those more

lowest Leo remote it point all provide as profitable offering forward customers that is gigabit example the go probably that our continue satellites be a would those useful figure try lower to At X the to just from same So is can again, more we deliver absolute the think have of and good interest dollar concept the satellites satellites. satellite way what of high-speed mobile for of data of awards of going various filled. Constellations we being kinds cost. and or then out going most where forward to for accomplish of the applications number Obviously a time, large any Jupiter to continues to ever per it's in applications. you potential cost I

of that being So the with next just and on go randomly but continues pricing the and side, demand up, thoughtful satellite. I kind to of customers continues go to the CEOs very CFOs as our are down terrestrial data data think before and replacing

be a ecosystem per satellite provides be in continue can play and important at can that where probably important XX% about that that will cost in nominal hopefully role We more an color. XXXX bit reduced communications play of say would believe we little the even in let's So this role, technologies as a they of to gigabit XX at we this remain are but awards. level around view market its forward

Timothy Andrews

orbit? or if opportunities that’s on come is Okay. My operating very at much, you that any visibility wondering have I'm point RCM thoughts Thank on very you question, this once second revenue helpful. could

Howard Lance

of not do capacity. will we using rights that all Defense So Constellation, Department National have data Canada to RCM be the of the

defense RADARSAT-X international to are both business to really DigitalGlobe are continue year utilizing and this sales channels that, optimistic our the commercial because grow and imagery customers. we So for about we we now

in what would to Canada additional for future as go continue in program our by commercial satellite, review capacity strategy what of to of provide they available also with satellite We RCM use maybe And radar on commercial the which we government forward. call Continuity finally, discussions continue which satellites Radar could Maxar. additional follow-on some years, be be we

Timothy Andrews

my for a I'm caused what and DNA final It’s just of housekeeping question, a XXXX. you thank wondering question. in the decrease bit Okay, expected

Howard Lance

do to with. has It

is typical major in the fair and fairly in price purchase I case satellites valuations what orbit. life as think our on adjustments and merger, which a of value

expected the assets we assets. the the where that reduced orbit modestly, of pass guidance was on annual continued depreciation previous the those and quarter point with on life into associated which our work So provided increased

Timothy Andrews

Thank Howard. Great. much you very

Howard Lance

Thank you.

Operator

you. Thank

ahead. at Next question Thanos Please from BMO. will go be

Thanos Moschopoulos

said now? that strong morning. you the on that How think timing be the and think Howard last would course or about earnings is the of the second performance, we tax of given is good Hi the through the should half credits weighted the call different year, the QX case I probably seasonality the

Howard Lance

think will half at the fact not it’s now than $XX just half. Well, in and first looking for bigger QX guidance, range given I be in second posting a looking like our the

Although reflect that wouldn’t our we currently. hopeful, are guidance but always

more we quarters have three go. to So

You of think in than lower of know, to absence reflected major upward, of a that’s that we earnings line trend realization is this our in business QX. Again, or tax to guidance. quarter still be in the the would so think not I little QX factor tilting credits other generally speaking, related another we expect three some the

revenue know incentive programs that as much contribution because that's it guidance of DigitalGlobe completion for consistent more any used be, can of of accounting are how business, about within you are are hopefully give a us. we talked thinking to negative about practical tax the you we rest we given really color quarterly give, the little as very you tight positive ranges move sense year. and just predicting not in comments you is liquidated reserves, the about than damages quarterly earnings, a of or easier a It’s when risk probably those you and there percent the So have credits in because but changes, have

Thanos Moschopoulos

potential NRO, is any the nature [indiscernible]. Thanks or administrative contract regarding commentary transfer NGA the you helpful expand change of to for thank prior you. could that the and the And Howard ramifications have from that the the could EnhancedView on just of your structure contract

Howard Lance

any NRO it are requirements the of Yes, allied U.S. closely relates have The serving I have to this comments both always at all don't imagery government and very Thanos. NGA worked customers. point which for other together and as

close that believe national planning will believe the is we meet can that imagery And for only a capabilities. their varying We forward. involvement assets the more it the coordination NRO's U.S. government commercial company missions for the we and that going because the between of only are provide positive, our use even continue to

those We areas of ground are image our many already interest It significantly increase capacity the that over accuracy time will to have are we and and over revisit those XX global between customers. continuing high stations. times, of ability world unmatched to our to reminder invest we resolution with meaning highly will WorldView speed as a our the Legion, the important locations most double

able the deliver else. much to quickly anyone were image to more process So than

of relationship confident So U.S. with long-term remain is agency. very regardless the our the contracting government who in we

Thanos Moschopoulos

not it clarify Great. Is a as possibility And to are to as just having be discussions new development. point rights, there? on - the this you be then the far your still at and comments there RCM appear will a data since finally rights deal would that that some or done is

Howard Lance

to clear, never be Well we we first of all rights. have said data have the

been initially it's contract the discussed, encompass believes will for constellation Remember access. that basically negotiated funded and include something but demands radar and that’s the build not been imagery all they did their to So three there satellites, government six be constellation data the only that of capabilities. supposed rights no so was to

continue made Continuity play discussions, of most going Radar we the RCM to several role, work around governments, three have a how are but We today forward enabling could beyond we those there proposals, satellites. revolve ongoing with these in

Thanos Moschopoulos

enough. Fair Okay.

Operator

Thank you.

Next James. Steven at Please from question go Raymond ahead. is

Steven Li

in DigitalGlobe the highlighted which strength of part business surprise Howard, Thank that you you? you.

Howard Lance

future demand. really very selling demand -to-end much on business and with create those and products Especially our high lot that increasingly, a and think combination year-over-year really all both simply capability strategy now customers with the value capabilities vehicles, sequentially. were and capability artificial XD seen you put that's using capability put strong really our had a then we both use sit along for insights, relationship case the and top and our when intelligence with services into international analytics the providing revisit increased we how with excited and our out I'm you applications end see developing global both driving I defense more and intelligence of in have for are if we along and I are very, selling that and is. other customers analytics you very more Well, customers. we products growth is commercial What more commercial is And imagery, that fulsome several build the that, evolving what about impressed autonomous of and of quarters these strong and will from that's in more data our with network pixels XG where to rates a resolution future help imagery where of higher for the for quarters

spend orders RADARSAT commercial Really good to additional again the give kudos dollars willing and and coming imagery us. are DigitalGlobe our and as well. they teams international channel additional growth in and to utilizing so with both And imagery us

Steven Li

grows look the the Great year, from for and base QX the last expect here. so we QX it that was year should I same if the Howard, with quarter lowest this at - at EBITDA

Howard Lance

We of a revenue the margins. quarterly imagery and a good are you new based new of back based of did distribution, talked the Steven this know, about. with provided the quarter signing with to on want changes wouldn’t I on minutes to of have that off about good comment specifically I the up history but were EBITDA premerger DigitalGlobe you revenue more consumption say quarter start. fair range to quarter plus look contract through if the and contracts a But we certainly HERE there on and

Steven Li

couple today visibility announced then talk said At Howard fiscal Sat those since level, for day the have place. XX% XX% had are visibility is a Okay in one what and about one. that’s last EGD Com investor you Is now? funding you wins that help you XXXX, you

Howard Lance

I but a Company not quarter, the as the progress. first Again, XX%. had able important numbers to will announce are we is be higher year. some good we way we providing very go but wins for that are say the will and quarters we have guidance The to its hopeful think I just than print long for, across only the encouraging pipeline

Steven Li

Thank Alright. you.

Howard Lance

you talking us all we and thank quarter. the call on Okay, again, look today for to next you joining forward to

Operator

lines. Thank conference day. you do a Have your that attending. great At you, today. does sir. you yourself Ladies for again please we this the ask Once conclude for and disconnect gentleman this thank time, call

Maxar (MAXR) 9 May 182018 Q1 Earnings call transcript