Earnings call transcript Q2 2023

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Operator

Good morning, ladies and gentlemen. Welcome to the conference call to report the Second Quarter 2023 Financial Results for Telesat.

Our speakers today will be Dan Goldberg, President and Chief Executive Officer of Telesat; and Andrew Browne, Chief Financial Officer of Telesat.

I would now like to turn the meeting over to Mr. Michael Bolitho, Director of Treasury and Risk Management. Mr. ahead, go Please Bolitho.

Michael Bolitho

good Form morning, and X-K and quarterly on filed report on with morning. you, we This our SEDAR. Thank the SEC

risks and may today Telesat's forward-looking results statements remarks may result forward-looking and the There Our of uncertainties. a known contain contemplated by actual risks materially differ are results as from unknown the statements. that

these Telesat's SEDAR. For a update forward-looking SEC reports and Telesat filed no quarterly or discussion of statements. revise annual known with and risks, to assumes see responsibility the

will Executive to and I the Goldberg, Dan over now call Officer. turn Telesat's President Chief

Daniel Goldberg

Okay. then thoughts will an who Thanks, results open for up we'll hand Michael. update This our give Andrew, and morning, to speak I'll the call to then share and I'll over on questions. some the on numbers business. the detail, financial in

As $XXX in which balance earnings in of on repurchases year. we've sheet We're busy FCC strengthen additional meaningful a shareholders. value us our and allowed that and our to C-band the we debt our for had million validation first think guidance, the approximately received quarter half tracking completed some clearing create we noted release, recognize

make capabilities to disruptive reduce so revolutionary that while the of our Telesat by as the been going was it certainly, we've satellites; MDA But the this for CapEx in on maintaining we're able a network in, to Lightspeed investing leveraging the that, the think morning prime news announcement and project the billion, selected by advanced roughly and fully contractor $X market. they've we that the our successful big are technology

due funding provincial the government partners. number end and commitments could longer. subject the certain partners take the want of to by equity year, given delivery Canadian a to The government confirmatory our we're the that of including done Lightspeed federal vendor thank conclusion diligence a and I Lightspeed benefits own and flow government is support now service and our public global strong the to which conditions, consistent agreements, bit recognition financing interest of aggregate little aiming and from from of the manifold of fully completion for definitive contribution, get their financing of recognizing it are commitments funded company's project. their

to our engineers that approach I why felt MDA to was we at when beamformer we move The prototype capital first going is was evaluated great. a way that it back digital time say few technology That's pivoted the development Lightspeed beamformer. it why digital the risk when words about an technology made analog MDA want wasn't plan our build for but game-changing a beams formed We for developed. efficient ready much to But antennas original with to more build which too using ago we the the for considered has was why antennas MDA prime say forming here this then, antenna technology, the so selected options to the years and beam is MDA time. development and analog is ultimately some MDA.

and improvement the The to look to, that efficiencies given performance only conclusion we sufficiently beamformer were invest was exercise, as not but that at could took to delivers. we looking digital part We to to beamformer another game the to the that it the continued spoken has year in and Lightspeed analog one optimize MDA changing. years, few past relative design leverage overall late in previously. know entailed working dramatic. business mature the it the the our now last we which funding, Over an about I've digital case is had massive it, It's and close hard I came

serve the cover our analog can you vastly versus more we can number of it sense, which beams customers create triple the efficiently. To and the a roughly globe means give one,

So for forming and single to need the in This and of each antennas the same satellites the to satellite analog example, digital be antennas. less case still the two capacity pairs each pair the to certainly costly always and somewhat smaller of satellite ones effective capacity beamforming larger satellite have only required want. mean deliver a almost We allows have beam design way the old smaller as while that's satellites, that we here.

overall the terminal, earlier Lightspeed, a better The which beamformer In XX% were satellites MDA links, considering. the our inter-satellite dynamically network. between route size users' to efficiency earth, on will great performance the network. of the the of improves the roughly link also further the and resiliency digital and the also anywhere satellites the versions continue which emphasized we've case user is always and rapidly of creates are which traffic optical we The throughout of the to and have provides satellite four important

MDA a in And satellites credit, integrated and In year, that's because global to industry transitions star focused former. has using. the is competitive been Lightspeed satellite opportunity already high-volume funding tightly to winning doing the that has satellites. constellation opportunity world-class they're beamformer, beam also quite that as digital is the prime business highly Apple see digital addition been been all they've to prime, heavily is to this won in as to and for why process more digital LEO going with be build be LEO they a the contractor investing winning the MDA has big the why they processor their capabilities heavily a a and last which MDA successful, Apple on direction. building manufacturing and the

started. MDA many already other suppliers of our has work with and The

meet mid-XXXX, to we We presented late will Investor launch XXXX. is greater investors and service that number our total conferences we insight several for and plan, global expect if the And $X.X revenue that near our project an in we to a and Lightspeed our enter place first can in multiples organize the expect of take plans. grow in XX%. give of Day by into EBITDA The We'll the adjusted achieve on IRR term so and billion. roughly CapEx approximately an

that we overstate how forward. would long compelling anticipated enterprise pleased that the COVID to arrangements focused chain market in others. and be been are we've place longer much out said we in and with a investors we certainly a I broadband hard than But opportunity laser the put inflation constraints and for global It supply and path It's the real are with always brought huge obstacles. there most were representing Lightspeed see finding we on COVID and we've the longer get much with how we keen road, to customers, than anticipated,

well Given been where landed, the it's we've wait. worth

but on requirements. we're just to privilege in most executing to their deep Lightspeed want and dedication here innovation XX-year the a of world-class think I commercial, the recent our just and adapt I every alongside It's key Throughout always hitting and is customers' what we've professionals colleagues that. been absolute example discipline, ingenuity at thank my our dynamic history, to always leveraged world-class regulatory, and legal, team market XXX% me an all home focused for now here. our the mission-critical real into meet work Telesat, Telesat leaned for technical, engineering finance, is genuinely run plan. ever-evolving expertise and resilience, in a

look to So may you forward addressing have. any with questions that, I'll and Andrew, hand then over to

Andrew Browne

morning, focus and highlights filings. like good Dan, Thank press release this from on I morning's everyone. would to now and you,

program. announcement our However, been in obviously, road long our with we move a excited said, and position has as so Dan to it's forward are a Lightspeed, with on be to

EBITDA on focusing reported the million, we generated financial we million, for have adjusted our billion Now the cash the Telesat performance sheet. quarter second And of of and $X.X in $XXX cash of operations ended six XX, months of XXXX, million. of from June on balance $XXX revenues $XXX XXXX,

to revenues In the same million, $X of million. decreased $XXX $X quarter expenses million $XXX by period adjusted by by $XX XXXX, decreased in to million compared million. $X to XXXX, Operating the and EBITDA to decreased second million when

was adjusted rate by a million. $X rates, foreign changes and the XXXX margin revenues, expenses impact million to impact XX.X% and a dollar XX.X% positive $X of decreased Between EBITDA XXXX. $X million compared expenses decreased negative EBITDA in by $X EBITDA. positive adjusted of adjusted changes operating decreased operating exchange adjusted million exchange in by had in $XX on XXXX, million, of in U.S. in and When a $XX revenues million impact for The

This The combined customer was was required to increased satellite-to-satellite in associated a procurement offset customers. mainly termination to overhead. related certain and offset with partially a to expenses lower we networks. by the customer NASA noncash the operating from communications one primarily American costs revenue revenues work to decrease from satellite a is by due from in of third-party North capacity are revenue service DTH American decrease South in of our The reduction with lower share-based partially compensation due higher support performing by

million of in by U.S. the the our the in on swaps the with This rates impact by during second an rate increased dollar-denominated the September impact facility with was was combined compared exchange repurchase foreign maturity in Interest XXXX notes interest of term lease increase expense of quarter The of same interest last expense. impact the XXXX. to year. our of period offset in interest U.S. partially due loan increase $XX to the in combined

quarter loss of favorable compared of In the U.S. translation The XXXX. of of result resulting on U.S. recorded a gain XX the foreign months second Canadian and the quarter, the second exchange we weaker our of dollar, million three the as a ended a on the the $XX mainly debt. gain was $XX June dollar-denominated impact dollar, in with million for to

second income to million loss prior $XXX $X year. a net the million was Our of for compared quarter of in the XXXX

recognized exchange dollars due This our the a debt tax partially of interest of offset higher million. The in debt positive into the of quarter by CADXXX clearing variation and combined gain to and on with was in was Canadian expense. C-band million higher and of repurchase $XXX foreign proceeds variation the CADXXX conversion expense million, principally of

inflows XX, For the million, from $XX ended the cash activities $XXX cash investing June and operating flows activities in were were months six million. the used

they capital of to the orbit were primarily satellite. Anik incurred, and lower FX related acquired terms expenditures constellation Lightspeed newly a In

the exchange continues you will adjusted and have and maintain million to million. as previously of dollar release guidance. full assumes rate be year dollar Guidance, pleased earnings $XXX guidance that The to are CADX.XX. to our U.S. revenue very to this revenues our between provided morning, XXXX Telesat EBITDA of expect noted XXXX Canadian $XXX in we

range provide any will our flows we at million, QX be activities cash time in and to of used expect of further in EBITDA, to continues our $XXX our to a of expected now capital expect Lightspeed as terms result In million. now million adjusted announcement, to we $XXX XXXX Telesat between $XXX of the investing to respect expenditures, update $XXX In call. million the

cash approximately interest Looking expected cash. next as payments XX at capital expenditures, credit the of billion and and investments To of revolving facilities. we at $XXX months, March meet well $X.X our as including for requirements end short-term available cash borrowings under approximately of million the have

held $X Approximately in subsidiaries. billion unrestricted was in cash our

addition, amount was significant from end we ongoing covenants complied of of has our fourth and facilities At to our quarter, generate X. with in all indenture. agreement senior activities. leverage the the to credit calculated of an the cash terms the credit In X.XX under times Telesat continue our amended secured as

have a way the million. million $XXX.X second aggregate quarter, market also at subsequent the debt by cost principal and period, has with Dan of purchases $XXX a we open indicated of in of including amount As reported

So prior million at a repurchases we an $XXX.X of combining $XXX amount total cost million. repurchased have in of aggregate with done XXXX, now

also this addition, results In approximately savings annually. million of $XX in interest

million our since loan, XXXX, $XXX our For end add been of -- approximately approximately the overall term when of reduced Telesat by and to debt just XX%. has repaid

and A provided report this financial our morning. filed reconciliation calculations in financial between statements we covenant the is

the consolidating in condensed result Our are subsidiaries shown The Non-Guaranter with NDA. provides the interim unaudited minor differences. essentially X-K the unrestricted financial information

for now have. I that, that, I'll the with prepared will back answer any And may our conclude operator. turn you call. I'm to remarks the So to with questions very happy

Operator

Thank you.

Instructions] from ahead. [Operator now Mike take Please will go question Pace the questions lines. from Morgan. from first The JP is telephone We

Michael Pace

out for really smart here Thanks on morning. different good getting questions. some just of technology. I so you're all appreciate aren't that to Dan, us NDA But and of and commentary earlier guess, HI, be on before. satellite that the for taking the I clear than the color contract what

than have network less? the I will I same anything, getting, follow-ups. or $X other have You the this And of confirm the billion to roughly then then are a few amount same what that. in you just network. prior not And for capacity want spending if

Daniel Goldberg

said, of we going least we as beamformer, a We it's it's were mean, market They Europe. I needs, effect for. to settle do, understanding, more We've advanced constellation No, of this capacity. Mike. by thanks, No, customers Yes. on need not looking concentrate the we this are digital at good around really got the what capacity leveraging the got that. dynamically what think our same to

so didn't this. is And which the any we that, beauty trade of off of

So landing is around of have which stations. ability world scope ISOs, throughout we and the resiliency traffic we've our and in still said four route important of terms dynamically terms in lot have gives us a always rolling out more to the network greater

this a I And had part were good contractors it all. thing MDA prime program. we've going build. working schedule, been about having big that about they on in program compromised satellite the that to didn't talk at antenna with the The so of even already the remarks, mean with I always my MDA with working as schedule they

So beavering and engaging the mean like what we've the doing of I can yes, mean and investors I business about case sorts we equity that with close really incremental we've in explicitly on I all like. been things you? contributions some away to the look, talked I tell mean, no, background. been of

We were [indiscernible] ways network. a the that also And we hit little there. optimize we said really maybe at the more elliptically constellation, looking ultimately, to other

here, doesn't. the transmitted with elevations So yes, all lower of the link to it. beamformer. in of antenna with terminal and and how kind my it's CTO, when no, equally the -- analog capable. my above more better the and Wendling is user digital Dave with at can about remarks, kind that digital this improves the just terms terminal Dave anyway, has it's one at beamformer it as I and spacecraft between grade squint works. in And of talk anyway said the The is me digital pay our But sitting that link. And we're the user And too,

Michael Pace

But just just as just And too. in the in anything getting? didn't... to is that be a there starting not month, well, works no clear super you're answer here, But simple

Daniel Goldberg

a I a you mean mean, on think anything, just satellite, the technology years I perspective, we've And But face got X a perspective. yes times gaining no and I the capability It's from each with simple flexibility we're beans if from stuff, so I earth. the to look, we embracing at looked on much know not route risk we more around. of scope -- traffic most ago. this the mean Telesat. We're organization

but leaning, don't get forward we're think we I overly aggressive.

it. not I The and took reason mean kept we're I the schedule that of we on which all they're high. leveraging any event, the beamformer, in there's on So some MDA did another pass of But thermals hit. why were mean work a they taking is kinds any too analog investing, stuff.

a So yes, home no, just it's run.

Michael Pace

for take here. Got me gaps funding just then maybe one, some know folks wants don't to who I'm it. And I can hoping some bridge but this

So often to But in bit. will moved that math rounded you then that We how date. us over. $X.X on I'm wondering has billion proceeds wondering, assuming and moving fill rough over additional total, $X.X I'm C-band couraged. there can just money give fund you do help can if billion little much a money I'm and Telesat that number equity.

Daniel Goldberg

after case then fully to release. still satellites. often things, right going it of in. Let a to clear now, this funded fill but And if which folks are I the be and for to about the are is gaps, finance the we questions to couple me there We're in tried try respond -- XXX

that right billion this is now, satellites. the to that including Oh, deal $X.X the XXX have, The I satellites. the the the with expecting in we've we for that note invested cash announced we've soon proceeds here. real cash should get XXX is already MDA for So that But with and project. we're C-band

up that with cash the and proceeds C-band we've With federal that have partners. lined we the that money with coming in are our provincial Canadian the

some as our as equity we've which government financing, mentioned contribution got contributions. is that not or vendor significant We've the own

satellites, enough money. kind for how we in that's money, funded with built roll. of of contingency there XXX of got fully We're nontrivial a because amount that So all we've plus we

the years' us satellites, satellites in XX really good, that a in few high-performing gets a for using and gives cash another global gives for current once the existing Lightspeed up we've XXX But that coverage Lightspeed us enough So which MDA money committed the full time. of we'll fund constellation. is plan to running flows

So the plan. that's

And so math work. then the should

So clear billion. $X.X the is cost XXX constellation the about program billion total the satellite for here, $X.X the to CapEx, satellites. is just about XXX CapEx The be for real

that's I from at when you about $X.X Telesat. billion, mentioned. is else equity billion contribution funding, look And the there's that CapEx everything contingency $X.X plus plus So some about then

just And the And outside is we've that I for mentioned, of government then that covers about already coming into then the all the clear, billion. $X.X be the that that's in, to proceeds there's that And some cash put project. LEO, are contributions vendor Cash that as restricted as billion. C-band are well. already financing group $X available

So there. that's gets what us

Michael Pace

the of financing Has give Can or the I'm up last same government the from you and asking? pieces? us -- that time what of is is break one the government anything those Is changed? Canada vendor

Daniel Goldberg

that the CADXXX committed do Previously, Well, billion. I billion that CADX.X the to we at of CADX.XX so had about government current exchange approximately it's about Canadian contribution. is mean, is which Quebec, $X we've million of math, if you Canada what said rates billion, said contribution,

million advanced our that about. $XXX government partners been with discussions incremental in an there's we've So there

So government that's kind the of piece.

different then It's exactly in our to of MDA. vendor able but that down time. millions about hundreds obligations this how confidentiality to not suppliers. some much I that we more future. with more but break right And the free not we're from to is subject the specific than be talk say the can't be will we're of we'll it's And sources, now dollars, at financing, coming

is they'll MDA ours, sure their holding think, get call asked. shortly I'm and after I

MDA because we didn't financing and of but So -- prime, leaning in chose vendor a be LEO they're them technology, because select in to got great we this they hard commitments. wanting building in

Michael Pace

bringing Is still into future, think in funded, everything this the And thought? then built is back to in And might together. unrestricted be quick answer, the clarity, just the I know consider I going subsidiaries. that still you

Daniel Goldberg

about changed We've -- where how future nothing mean, I the in this. We're that. that yes, we and it or future, announcement happens separately. of anything could But those that. some of we're come in Yes, They're changes terms there -- could finance unrestricted terms together group saying funding nothing in all at continue group? of not about to has what any point back in versus today's restricted the activities there's

Michael Pace

Thank you.

Daniel Goldberg

Mike. Thanks, Okay.

Operator

LightShed. from Thank The is you. Piecyk from question go ahead. Please next Walter

Walter Piecyk

that just This Dan, revenue Thanks. piece to the incremental is puzzle commitments confirm of is... that not the government right? exist,

Daniel Goldberg

those to No, government doubled ISPs We've the in federal XX-year about It's things five and when CADXXX and amounts think before, this we've CADXXX commitment no, amounts to from the separate. a again, over we capacity into separate are term. But I the structured, million a funding those commitment Canada no, enter And got of year the a agreements a with that's million Ontario, capacity arrangements way that no here talked we've subject from over and pool are that's mean, those of got get essentially government take no, that term. like. Canada. of are we the going

Walter Piecyk

we government to but disclose going I can't as then, million I from saw the really respect you obviously, CADXXX Canada? that as understand of this So cost-wise, attractive look what it is it,

Daniel Goldberg

question. great a that's So

everyone it's of $X due subject update all government be completion definitive to for said diligence place. So work billion with confirmatory continue this the to fresh agree we'll we on of funding, attractive to approximately it's going and need to getting but financing, going that. to to terms that. in government I agreements of believe the We're

So yes.

Walter Piecyk

is revenue Fine. the flow even to It number need it pump then you full XXX And relative don't of was initial going. definitely get just But constellation? that to uses, outlined you've launch overall sources overall lower the for your seems and terms the to the the cash like in the operating CapEx to even then what recognize numbers. the helpful

Daniel Goldberg

the the another XXX, $X.X we're fund need the don't billion fully for we vehicles. $XXX the plus to need launch cash the plus to Listen, operating roughly going Walter, XX contingency incremental to flow, fund but million get to satellites

Walter Piecyk

$X.X I billion for that But is why billion... $X.X $X you billion right? plus the just if So take XXX, said

Daniel Goldberg

for the for $X.X Hold no, CapEx, about program billion no. the $X.X total No, Wait. cost. on. billion

Andrew Browne

As yes. contingencies, all, this is

Daniel Goldberg

is total the It's cost a roughly for the little program to the CapEx XXX equivalent for confusing because the XXX.

Andrew Browne

the The numbers are same.

Walter Piecyk

question first way. in I'm the going JPMorgan different a Okay. to ask the -- dude's

You decrease the on we're helpful your a we Just look that TAM? does had it talked that to in than the as I it kind TAM was later sizing little bit Does about of of billion the TAM, these a percentages. might broke first that. growing of terms forecasting XXXX? you size date be TAM? presentations very thoughts market, I kind constellation, TAM how at and and in hit new that in back changed what increased commercial $XXX assume of terms it that of relative were down to this you Has anything

Daniel Goldberg

Yes.

said it's dissect prior said planning you time magnitude, I under the the the that of thoughts are amount allows we size constellation about order XXXX we've in billion, $XXX have us that market that been the share think, past, designed of think we about do take do we in market, adjustable I of market the we have addressable Again, frame. our deliberately out unchanged. So the the we what can a about to in everything to -- the market, plan, mean, if

services focused focused half $XXX of not of is kind we're on direct-to-consumer, on. the that market. billion we've market clear, and which that we're always real We've the Roughly, the is government about said enterprise been

TAM. which that will of other said we that think kind most the of of X% perspective half don't business get is So be We've our we that ambitious plan. hitting that's roughly the if

thinking And around so our that...

Walter Piecyk

I'm reaffirmed to vendor line a calling been is the a see markets delay, consumer think of a follow-on that the $XXX conversation time about his I as have although There's are glad I I like that. Ergon you've on But lot financed. more there's you they're maybe what's and have that. people is billion is direct-to-device the I new thing. sat-Dish a more talking not about, -- guess, S-band, was what mean, had on call

I Is you going access got you've one think extent the that XXXX? some on with and perhaps to you partner for can these Ligado players billion this broader spectrum. additional at I address what's to of market that identified don't constellation know other opportunity the to an Viasat. there get $XXX modify spectrum

Daniel Goldberg

here's say that. So about what I'd

include do I design, optimized out optimized have In watt billion to we prior connectivity is like know it direct-to-handset of DISH power sized satellite the satellites, and off, our been just wouldn't for make throughput $XXX that we've change for the And that now the Frankly, of which on. But any we've sense. optimized. market. what they're really doesn't just these the to enterprise the it squeezed is to market, high directed mission. order market, them mission, First focused every and right some satellites broadband have

we've us some laser-focused been stay this front Lightspeed for although that huge antennas on But yes, quite the we or to could that. do if engaging got look something that, out had different, well that's or with that we've just leverage might the S-band spectrum right we antennas, we know to could about that been customers process years we the now, time. L-band having bus, potentially like spectrum, serving for of access Now potentially we market the said in there

So our Walter, that's focus.

Now could bit... little a TAM the be

Walter Piecyk

a out dead L-band S-band an is And drop with work you'd there or date to have an when owner... something

Daniel Goldberg

almost around routing if the just with adjacent We're to would of not and leverage might great look, We're that some moving it opportunity capital, But, yes. then like here that off on Lightspeed spectrum third-party this. kind terms whatnot. and MDA forward in there's bringing with already some an of be We're some network -- traffic races.

about... You just think

Walter Piecyk

commitments talked get and your for ability to terms of TELUS We've we waiting ECA this signature. the and that stuff in impacted that about were rev before get to that when it the

that disclosure spigot. going incremental assume constellation, on Are to of up a quarterly I the how in new is commitments you -- updating get do individual you for to... envision terms get press revenue kind how of this So do open releases, that basis, you as we

Daniel Goldberg

Yes.

All have of how about is. folks we're be deals will understand that will that the important transparent We that visibility. that signing so

Walter Piecyk

you. Thank Awesome.

Daniel Goldberg

Okay. Thanks.

Operator

Arun you. from go next Seshadri BNP question Please is Thank from ahead. The Paribas.

Arun Seshadri

Thanks question of program gentlemen. skeptics, Hello, funded, hats for definitely my of and a Lightspeed taking on getting reconstituted and a first all, off. so congrats lots

a down to on nail of the wanted Just couple funding, details the equity side.

somewhere $X.X cash in balance make So just right about of the billion. have right, is probably existing range that you to now sure I got the my math

proceeds of so in order operating funding? the that You're to flows fair another to contribute or billion, so get million you getting $X.X from either it $X.X of that your from equity close equity another to $XXX $XXX cash million say to C-band you billion that gets the additional have you to need is

Andrew Browne

This is Andrew. that. I'll take

our billion clearly the out time. million. during I in we say, very in totally you Dan the that comprised over there got of, think the as we C-band laid also of currently development we've we investing is program, And that the the But been coming are cash funded, as have proceeds have course $X.X today. is already CADXXX

altogether, And so yes, we're funding. that shape. in good think think includes number I that also, So I

something for fully But key to funded. we're today in for us cash the fully think point, in we're I today, Any we say is don't for come need cash more to funded. that comes the any future. today

Arun Seshadri

given authorizations. fair to to used Thank it. terms haven't sort funded, debt of future you're it laid Is generating And flow then fair that of be to out cash buybacks? you're future you any fully likely that debt it is I noticed Andrew. buyback still say that for Got -- in is the you, say operating

Daniel Goldberg

create And build a it's a that balance doing that it restricted shareholders. to repurchasing just we at to amount don't thought good just and smart to higher was So we it a what thing time. and fair equity use it sense ton sheet -- with attractive earnings trading the of us we our a think be And made have in value a release. of back would debt the and we look, we way at to the that that strengthen it's have than been up I we haven't that to rather really highlighted in the value cash been for values, as we've entity, debt repurchases, say, do had for

And all going we of debt -- be that going opportunity debt Andrew? it. the uses we that about other about cash would depending would say for in then forward, forward, the or go But And say, some we've for to and is cash, had the it we the repurchases pragmatic more If that if to we consider value as would be that -- to continues I it's trading we on good If like. we we're forward. don't is long highest consider but just attractive answer, suffice going I done building debt feel satellite past. know, pragmatic be that. about just we'll kind just a repurchases use, geo other then where the

Andrew Browne

$XXX as confirm gain on XX%. the that the and million our to overall just But I And end why focused going that's value back, today's has reduced in million. since said, threw overall That's absolutely correct. by repurchased mentioned, No, of we've debt debt. to we're of XXXX, that $XXX Yes. we very gives back what Dan

very activities the responsible So in have the addition today. We're to we focused future on Lightspeed the the very, of about company. on getting debt of going, all

Arun Seshadri

last Thank it. you. Got for question me. And then

so -- of of you work have to do lot a agreements, terms finalize obviously, et the In to cetera.

this at other at the of you One two the beyond anticipate topics. I do -- of getting to So the that this, dependencies what financing, is or all you then structure all up point? I subsidiary? sorted beyond remaining million $XXX the risks out, remaining the are keeps do secondly, other, agreements be at in And guess, you night guess, Lightspeed what

Daniel Goldberg

to plan, government on unrestricted that plan. So side, LEO, of we and all be, the that was it expect the always the funding will yes, the over be continues

more keeps look, get of that, with but engagement with way. to work government partners. of we've bunch we'll people a got confident to to timely big the going to our done. be got And whole As it's we hiring I'm done then funding the night, at else do customers. a what got with and moving it's far that got as We're us get to to We're our up ton do. and up achieve MDA close we've and going ramping our sales team ramping marketing staff in heavy up out a as be highly

that and day-to-day I got that the we're to eye our business running that. on ball take off mean and all it's we've never our

liberating mean the after partners. I we with to anyway, it's we're just fully to our be funding have so mean, be we so this a to When are when lined rest to get can and So excited MDA of we just about finally all have the way, I up going great our stop going? plan and on time talking can funded?

this from it's forward, point just all So execution. focused really about

Arun Seshadri

all best. and Congrats the

Daniel Goldberg

you. Thank Okay.

Operator

you. go Thank The question Raghav ahead. from Garg Please DoubleLine. from next is

Raghav Garg

question. Can your for they're of smaller? you of talk the life Does taking of consideration? that Thank the these the about given satellites slightly sort you impact Yes. duration

Daniel Goldberg

in That's years. with past. others a comparable contract plan, past, MDA, XX it's from a go prior of longer, which it's same spec Do the meet maybe perspective, effectively But absolutely from experience in we been we've lifetime to our question. to to their the specifications years. performance satellites our say, good a the capability that the for yes. experience perspective, expect the XX I is think expected and No, It's them

Raghav Garg

on Got you. you've estimate, color the -- given And it. you've Thank any CapEx. an IRR given

So out can because can EBITDA throw billion you number is the my billion, given math, I just to of some duration, you've input about an to, presuming talk get that on you $X to unreasonable? $X sort

Daniel Goldberg

some high-level provide past building But quickly to unreasonable. not move to kind We've blocks. tried we're that. of It's going

end information looks So the where and more presenting of with investors share like. about Investor at We business whole to before case we lot plan Day scheduled a mentioned we'll the that what one-on-one can definitely year. more the we an be meet conferences

Raghav Garg

Okay. Thank you.

Operator

next is Suisse. (ph) The from question from Credit Mr. [Rattenburg]

Unidentified Participant

and question taking announcement my on MDA. for Hi. congratulations with Thank the

was couple loop I more. Some of a I my did here, asked questions have to have already here. hoping been in but

the of gave On helpful. question One very proceeds. remaining between to of you I information close the I part, been math uses guess, trying bit little mean, some definitely has have, just do gap the I a

be? reconcile CADX.X pretty like like I that big the that at over satellites. initial for puzzle, mix? a the the trying So just would I Is a trying numbers seems and above XXX I there with seems kind I'm probably significant contingency guess, you least what part to it's announced it delta another to... contract there there's vendor in there. so billion another MDA mean, the mean, mean, specified and I the of it of is mean I just

Daniel Goldberg

up, It's -- Yes, systems in that's that's It's up yes. all some it. some and add I get operate We've you development, parts. it's to launch it global user IT for building all money the infrastructure kind There's of it too to the rigorous that the we terminal And upgrades put further what case, in business when make into. there it we've of need got mean the many to of need satellites. place. been terms moving order this kind some No. aren't comes our vehicles. It's at in -- constellation. facilities that global here ground

it. have covers would that we that funding mean, And some do don't seems We because just be we spend in budgeted mentioned, nice, really as for plan then, to it. I contingency the hope thing do. it nontrivial but be our and to yes, we prudent we the

Andrew Browne

build-out all very elements of and the think I We that at itself. been contract at in that funding we've in just proper of looking NDA the prudent terms contingencies not and got the just we've outlined

Unidentified Participant

to structure parts an the related moving previously, And relationship? But the, understand are guess, there. it. financing. had as I had of with I just, the contingencies Canada and some you've I of two guess, the in the then think place, I that sheet there's status ECA clarify MOA and with respectively, as probably Quebec, some I revised terms of Got that Government term mean, far to you able

just wondering, ECA I I key disclosures mean, the forthcoming guess or of documents with So some be structures? gone, those will financing there guess I I'm

Daniel Goldberg

some say, information Yes. partners, from the who No, the absolutely. of Lightspeed. I always mean, to agreements -- commitments But as already funding they've like. they've confirmatory that we material will then definitive to got of we lots got mentioned, finish the due I do to the that's and they've we've relating it's got got supportive strongly now -- these spent of project time been available. place around structure And we've government to I diligence got MDA path. their confirmatory mean get some diligence quite the when have to that because in all provide understanding

so in to focused short And very getting we're that all done order.

MDA project. always more whole people, MDA, really a Canada. that I whole And which here government the bigger in is for of out also I'd means a X.X IP have say supportive taking big when thing role times that a partners, the other our lot now much at greater has more which building federal facilities certainly roughly on with company program. think facility And guess say in their footprint it's MDA, the in government government, provincial I Canada to our Quebec, the And a now in Canadian is been a here got that more contract a and is lot I development and -- hiring

export platform, more world, We're exports. so now new MDA's the like the digital satellite they driving anchor for to hope around which

strongly if think supportive our new got old we the path, partners of like all government to that Canadian the guess this that partners, Just of I with point government is our them be even And they're I LEO picked We do MDA because high-volume didn't more they're constellations. there'll world-class still. MDA satellite to a we because Canadian. emphasize, genuinely want supportive path, for pick prime were

That's it Globalstar either won Canadian. they're Apple contract, they hurt the Apple doesn't but contract, why that

in so So it. once how of think clarity anyway, we'll that's on But provide about government that lots place. we it's funding

Unidentified Participant

in you LEO the with And last to project your final that. question, back maturities probably an mean operational XXXX. the Appreciate relative I of line XXXX time debt anticipated in

thought given that might structural you as on any curious growing side capitalize as the kind that LEO Just to place potential backlog in if to on refinancing? of far prior you've to changes put

Daniel Goldberg

fully today, under guess I announced we that consistent mean, I'd schedule I the with that say schedule it's the plan. we prior had that the

there, timing the MDA with up of it out maturities easier kind we've that. and really fully been these our with plans when cognizant any debt that these still repurchases about of We're some the in coming new of nothing that years It's terms alter maturities. making all we've of been doing. of there's are obviously, think still So

develop. got So anyway, certainly Lightspeed I business our some expectation mean, our to we've is time, is going

Our GEO to as whole well. landscape The is business evolve. will continue evolve continuing to

we a you're event, This thinking you're a how Lightspeed. with think, that's certainly matter way today already alters company. the about in certainly, strong only we And what But I So mean place case announced so about or forward. I puts speak in in nothing And any there's efficient. think capital much -- that lens that business It's forward going that business better got case any overall it. that -- we'll more going had strength more in thinking a no I business. just, the updated the about us really

Unidentified Participant

Appreciate that. again. Thanks

Daniel Goldberg

Thanks. Okay.

Operator

Thank ahead. Ares. Marcello go you. next The question Chermisqui from is from Please

Marcello Chermisqui

had funded Congrats caller. from parse, guys. now. Hi, the just the language of maybe fully debt prior you a question, some Dan, buybacks on I gave a to on

you You but the consider. attractive uses would be value cash, opportunity said be there may cash for highest to of that that other continues if that it

at cash the other alternative flow business? of do what uses consider you GEO So

Daniel Goldberg

business, No, It's use all cash. value I mean, that, creating think about customers. all our the I about and the how say look, shareholders providing mean of for strengthening to business, to it's strengthening the just service it's we always about like great

turns some a looking and grow in satellite is, ways be out GEO prudent. smart always we time. business hope, we're for our So haven't way I to to that ordered It the a case in that quite

and business cash use operating we we disciplined of always we've run our about whatnot. been terms how CapEx think margins of the how high think with and and I in very our

new want be a I on That investments But talked those business -- the I we future, opportunity to it opportunistic some we We has just open-minded don't the something that we're in want good date, come something be that be GEO all that, we and to the group. going know going we strengthen the the just we've trying which opportunity to can to We're plate mislead could cash debt. would repurchase do, do and be the that satellite. say. to to is To restricted don't make all be that's and but used with that's to nothing why that, could don't were meet our objectives in a else foreclose clear all there across the could cash. folks about. that's

Marcello Chermisqui

That are makes part satellites that said the sense. you not the XX XXX respect cash. million, And out to operating that of with of comes

you were those? finance in what or run will Is the point at is to that years So you operating rated it... have cash when five fully

Daniel Goldberg

Andrew, to do assumptions you there? timing want the talk of about our

Andrew Browne

Yes, indeed.

customers, external answered that actually being generating flows, need models now. our financing we be any You able we're show That's fully is conservative that be will don't from our right cash fund that we where from that's coming on global indeed, That will we to we cash Lightspeed Lightspeed and pretty coverage, actually. off itself. why whatsoever question feel the when with yourself,

Marcello Chermisqui

And then what that And is before that? option? I for timing look would option, the XXX around the guess what Understood. you exercising

Daniel Goldberg

there I it demand-driven. mean, network will to a in be lot capabilities scale totally -- Yes. our Well, built up listen, we've over of time

And built our we so the also the if ability it, business we've a the the in think don't contract order have got to up case rights, there rights to We've smart do into satellites to thing it's our to. additional MDA we regulatory constellation. scale have to really

the function capable massively to looks have future to that multiple terabits network and at will users. deliver but constellation, XXX satellites, be can with purely of optionality grow And the we environment continue XXX so that then like a is time about this satellites capacity demand all to of what the a

getting up, is taken now Our focus satellites and ordering expanding. incremental right and about that then think we'll

Marcello Chermisqui

warrants with split But be And business? government. of lastly, is might I there they negotiating do you you're debt between the I I financing take still might terms the know the in in that the rest guess, think similar? more And and that that preferred, the guess, still of the

Daniel Goldberg

think, really the something of we is entrusted all supporters I project. need always strong capital the It's constructive. We with our work tried table. We, that well. know everyone government of that's with think custodians through to around here partners. been to We're other us. We They've be the each good

through all with work all the to that with market. government, those got we've So share details the we'll and then

Marcello Chermisqui

for taking much questions. so you Thank the

Daniel Goldberg

you. Thank

I think we've more got time question. maybe one for

Operator

from Thank Wise] go Perfect. [Bill next you. The (ph) is question Invesco. Please ahead.

Unidentified Participant

Thanks very much today. and congratulations announcement the on

you Telesat's any DISH-EchoStar or on and questions of merger on but is on the you. forward? going thoughts renewals been any Just answered, impact the -- have there of business Thank most more my update DISH have

Daniel Goldberg

has it closely. with impact DISH and EchoStar. we situation with no that that the We've obviously work do think on followed I

them. good don't we think that, that changes really with we a any I work with that think But the DISH do EchoStar. in relationship have with we way no, combination

Unidentified Participant

you. Thank That’s it.

Daniel Goldberg

listen, everyone's thank we look wishes. appreciate QX today. all to we forward for with all time and good you. We you Well, your thank Okay. issue our really numbers, And speaking and when time again you the

very So much. thank you

Andrew Browne

Thank you very much.

Operator

at Please ended. now has and your Thank conference lines you. participation. this you The thank for time, we disconnect your

Telesat (TSAT) 11 Aug 232023 Q2 Earnings call transcript