TSAT - Earnings call transcript Q2 2024

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Operator

Good morning, ladies and gentleman, and welcome to the conference call to report the second quarter 2024 financial result from 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. James Ratcliffe, Vice President of Investor Relations. Please go ahead, Mr. Ratcliffe.

James Ratcliffe

good and Paul, you, morning, everyone. Thank we ending June morning, SEC on filed X-K our period the and plus. for report SEDAR XX, the quarterly with This XXXX Form on

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

responsibility report to of to known and or the Telesat risks, and annual updates discussion Telesat's SEC. turn filed Executive a Chief forward-looking For assumes Dan these see no update revise now President statements. I the with please Officer. Goldberg, will Telesat's over call

Daniel Goldberg

expectations. and first morning this unfolded of Thanks, everyone. QX our have good X James, months and the year Okay. with to consistent

on are this summer. the that of separate definitive with key I'm concluded. us. reaffirming our government for are sustained agreements that Lightspeed obviously and once good our hosted indicated May, and to year Quebec result, make is timing. we of by to to focused the say were a representatives, We'll early we for end make priority happy our governments we've keeping remain engagement achieve a we had quarter This we guidance track meet funding announcement objectives. When As sure this seeking we with to Canada call the in and we're of and those the first we optimistic all a funding conclude agreements

Beyond the program. that, Lightspeed we're making progress strong on executing

nearly excellent the we suppliers headcount track full-year start Lightspeed on and MDA, call of of selected its XX% up making the execute is onboarded and last the the earnings increased since our prime to week, program, noted the now progress own contractor, on and for on year remain ramp-up Lightspeed, As they've XX% plan. on as they their program. our We've satellite team staff for the by

remains our today's As focus earnings in this release, we twofold. year noted

closing rigorously the on about is LEO, we're in well flow Andrew all that, maximizing elements key the for commercializing we areas. structure. And mitigate agreements, emphasis we as an all making and very We're the extraordinary doing prospects what in network, the over of the to activities, hand GEO our can customers, bullish infrastructure, our software by and the up, we're and cash verticals out all to on EBITDA ability look on our execution, forward For our focused to progress building managing any our of taking I'll and with those for on. I'm the significant cost declines revenue it's and to and including that value our the the hugely ground in our deliver proposition it need, pleased then shareholders. With market, various funding value satellite, Lightspeed creation staffing questions. anticipated as

Andrew Browne

and to on you, from of I release $XXX XXXX, of adjusted Thank highlights Telesat of Dan, second million the and million. morning, $XXX good this consolidated EBITDA revenues focus everyone. reported would quarter and now press like filings. In morning's

million in $XX from of second with billion The generated quarter cash $X.X the first ending XXXX, of months operations X company the cash.

in $X during as quarter offset of B. mainly as primarily the non-cash lower million of spot and dollar with XX, the Lightspeed. Interest $XXX quarter For on of quarter to and is interest $XX due the of consulting and operating to American same was quarter to quarter dollar, quarter compared rate, term XXXX. mobility $XX customer, December dollar decrease by for $XX expense of second by the $XXX The the EBITDA was second result million compared as revenues translation term as ended XXXX, impact in bad EBITDA the first and the to revenue XX.X% The revenues well Telesat to when million June associated the the a higher XXXX. The as million, million. XXXX, we to with XX.X% the in gain decreased certain facility. In of share-based reduction months rate $XX by loan period debt American in due rate services costs decreased and a a of strengthening of the million. of in adjusted foreign increase loan resulting the in and loss in to and benefits, increased lower primarily second expenses partially interest the X expense to margin XXXX, engineering with a decreased notes from repurchase compared increase XXXX, same to period unfavorable was on U.S. expense the due the a $X customers. The was to decrease the to million second offset 'XX the in recorded North denominated Latin adjusted and renewal in and higher compared This wages compared spot the agreement expense the in debt. was by U.S. our Canadian an expenses loss of by million, quarter, rate to exchange low of the primarily U.S. the contracts, long-term compensation million as associated by operating capitalized direct-to-home partially $XX

with period second XXXX, exchange of quarter income earlier. prior loss, year. was income of the change million C-band I foreign due was recognition primarily the the same to the net The $XXX $XXX as Our of the mentioned impact million quarter in compared to in net had clearing the income one-time the of for for along a second

subsequently increase related payables inflows used and the accrued. capital quarter $XXX activities capital This ended expenditures and the trade same from million, million operating $XXX quarter were X in Telesat expenditures $XX X which is months of almost to of were and year, Lightspeed. Actual end. Guidance. reflected June the the investment were XXXX, activities months For cash the first XX, in at in cash were in late all million other the second was incurred in certain in period,

this earnings our to we assumes X.XX%. dollar have release Canadian guidance. As in U.S. dollar you reaffirmed of guidance morning, will also exchange Canadian a rate This our have noted XXXX

XXXX, $XXX Telesat its million. full-year $XXX to expects million revenues still be between and For

expenses, to still terms excluding we to share-based of compensation, In attributed $XX $XXX still between spend million to $XXX are Lightspeed. Adjusted operating looking to Telesat be to billion $XX EBITDA, billion, between million. Telesat expects

of meet facility. Approximately investments cash approximately unrestricted next billion end and quarter. cash promised, Telesat to statements range the X expect our to the expenditures, filed related under at months, the CapEx. To for in $X.X borrowing in activities payments interest USD as also million including the end expected separately, be billion, investing to GEO LEO we of as available we to the all well and cash requirements was of to X-K. In XX our and Lightspeed billion used Form as continue in $X Note is cash reflected in short-term billion capital at showing a capital subsidiaries XXX expected financial revolving we of expected respect of approximately $X.X As credit have results June, expenditures, in are our flows which our held our $X.X capacity of in XXXX on nearly

under secured the a continue as senior the quarter, compliance second [ In amount total indentures. to terms the in our calculated of from generate cash addition, agreements of operating was ongoing leverage credit with our Telesat the ]. credit of activities. At ratio is end amended all X.XXx significant in we facilities and the covenants

includes interest provided also savings reduced XXX calculations and of we in including our debt the by of after report accrued of end. billion. A year-to-date repurchases, million terms USD million, now approximately USD total debt a term amount been an XX XXX morning. XX% USD our quarter the of of XXX has filed amount of XXXX interest. B, USD the repurchased of this repurchased reconciliation annually. Including financial a we've In This This million million and overall million cost Combined accrued is XXXX principal approximately an in at USD of our repayment statements debt XXXX, USD amount interest. million covenant with in of completed XXX a cost now of financial $XX at $X.X repurchases million, purchased including XXX we in between approximately loan results

in differences. provides interim consolidated non-guarantor X-K unaudited the minor unrestricted condensed information The subsidiary MD&A. shown financial Our with are subsidiary essentially

] a [ questions you concludes call, and be very remarks that for would I answer to prepared So the may any happy have.

thank So the turn with back answer question for I and you. session, the that, to and operator will

Operator

from Instructions] have question Deutsche first Bank. a Edison Yu [Operator We from

Xin Yu

of on to couple just of it the that timeline? your the First, kind the Are conclude of based on weeks basically track. clarify negotiations end next in that want are will summer saying you

Daniel Goldberg

Yes, right. that's effectively

we weeks separate of expectation about make that announcement in the that. couple next the agreements Our conclude and a is will

Xin Yu

still is the that out? I signatures? kind to And this anything guess, got Or the make right people needs right to of be there anything worked is sort there outstanding? more is of Or

Daniel Goldberg

funding my as Government in agreements a the good Yes, are government Canada of all of I no, prepared of that with are These There remarks, the representatives from really representatives. engagement arrangements. this document in significant of time, coming impediments see features concluded getting point don't there's order the -- or I to done in need At different obstacles the this the in get weeks. we've said the good and had Government to Quebec. any number in

and just nothing, we're it's remains there's funding working get big -- we're And done. kind agreements just so, to through all extraordinary a yes, But multiple arrangement of with about what that. yes,

Xin Yu

obviously step think to end And at to the we range. to on $X guidance close billion? switching Just billion, close to $X.X the low-end sort what substantial determines drive the pretty up, of what how a if even I you do delta? guess, up about implies CapEx

Daniel Goldberg

you want take do to Andrew, that?

Andrew Browne

our in it's about at look of you or $XXX second CapEx if quarter, million approximately so. That sure. Yes, flow the

of kind a X, to by from multiply mathematical billion actually get perspective. you if $X So get, you that

where feel with the we why that's So range. pretty we comfortable are

Daniel Goldberg

who's track. just it's that they've add of They're the great And prepared year is as would placing orders job beneficiary suppliers sign we going and and is of them so a maybe to. their online. on getting and to much out of I our spending exactly prime be that, this the next, I they're a MDA remarks Yes. would capital again mentioned that in my the program all moving done like

guidance. we've they a yes, and And be there our to is payments achieve we the Andrew the to sort milestones that unlock as showing will spend said, seeing budgeted for. so, felt and everything in that of was that we're achieve And going us in to the good big tracking we're suppliers QX need tells seeing we're progress everything order

Operator

is from from question Securities. next Cormark David McFadgen The

David McFadgen

fall. this just questions. the ] an give that respect for to with stand couple you one contract us Dan where I of [ is Can up on a renewal think negotiating customer? you update DTH

Daniel Goldberg

Thanks, Yes. David.

everyone's for EchoStar. calls, we've that just with and we've Nimiq comes up that satellite engaged been think, our with on X on I a renewal early So our X that said benefit, in last got October, EchoStar ] we've [

So done I've not know before, we're well. yet. mentioned EchoStar we

We have We've good for with time. a very long them. a business relationship with done them

we've we're but yet. certainly exchanges, not a number of done So had

So point time we call, do we'll my months' in this renewal Certainly, But around in X landed. still to of lot pretty resolution landing that able we discussions a soon. having at about our expectation, be them. where QX this up be obviously, the I coming think we'll on provide time, time, a detail with with by

David McFadgen

And Lightspeed. on maybe questions of couple a

that the Canada. definitive Canada you end I you So in by were the of saying Because of both in agreements, to the were with expect you the terms Government Is of Government and sign primarily Quebec? think referring that past Government have the to of summer. of them

David McFadgen

of had it's why our numbers. of because them. of it we Yes, put And that we're while. Government is Quebec. again, little the envisioned no, our with a months Again, the taken it's QX ago it's is that out we tracking Canada, few it both it'll expectation Government timeframe a the when But be

this have also financing. We vendor

two, yes, kind special were, little longer commercial -- a it's funding there of done, so funding, of one, bit than purely consideration. if it all with of it yes, are, syndicate. these that And there government takes a kind just get needs And to

in be the that So that it Government it to over get in I'm the the it'll yes, going to confident weeks. lawyer, the direction. I highly all a it's but Government till of over, Quebec. it's have moving ain't say, there of we're we're feels just with former with right Canada, And like coming because

David McFadgen

on us update on you can date then And to total spend your Lightspeed?

Daniel Goldberg

Andrew?

Andrew Browne

see in to been looking we that reflected on spent the And year, as the total, the half cash in has indeed And for was which said, the $XXX balance balance up payable we've accounts we million $XXX. of sheet.

Daniel Goldberg

just. are Canadian dollars, those right, And Andrew,

Andrew Browne

Canadian Yes, correct. dollars. Correct.

David McFadgen

$X.X ] [ So that's Well, is the budget U.S. I the number. think Lightspeed billion. for

so project? spent All XXX on million so in? CAD far that's -- you And so the

Andrew Browne

Yes.

Daniel Goldberg

far making board. that's Wait. that's for kind of -- the the year. past what including investment No, this no. development, with investments user but across no, engineering We so program a in lot few Yes, the providers, done just of payments made, we've the terminal gotten years, we've just been launch nonrecurring

Andrew, that. more want about say So to anything I know don't you if

Andrew Browne

Yes, no, I can.

today. back go you If to spent to of that what we are done it's Canadian all have is on dollar XXXX to the doing all get looking CapEx have work about at development, a we way the basis, and back we $XXX million CapEx, where the

Daniel Goldberg

currency? And

Andrew Browne

Canadian [ dollar. On ]

Operator

question is Quilty next from from The Space. Chris

Christopher Quilty

So congratulations.

full but begets guidance. expecting for was maintain You the up put you I results year better QX, question, than that

pulled so And question. just Maybe into first anything forward was you QX? that did see

Daniel Goldberg

like No. unfolded, expected. No. The yes, we quarter

Christopher Quilty

you kind perhaps kind issues therefore down large other identified the sort the of model are better roll any I as Maritime to already have I guidance. contract base had Or X, I the Latin much back look you've the getting aside other business, America, midpoint at of accounted half of Nimiq which of and stay when should So of those for, worse? as didn't at are Putting or there the the offs?

Daniel Goldberg

way been did. in renewals the takes. we like they're were some we didn't always guidance that some going we year things later. out little roll off off we to think Look, that think. they're were are a rolling that what going There in get, the equally, I year, year, bit gave expected. the we some things would There that thought. than timeframe. worse are but and a a outset still probably there played were then And roll We main, at the of thought think in certain has like off, In to puts we we any unfolding that's there

of we is its fiber. mix flag Xplore with year. things And debt a which I'd the a them what note, of serves is wireless satellite, result, trimming a bad right X-K, rest of bumped through our is that terrestrial, One the in Canadian customers restructuring and as process the going expectations in now. and we'll for broadband rural our we're for the we Xplore, provision it up customer a and quarter our with this do provider

one that's So the in we that year of as next and that of I'd that was well. anticipate year didn't a potentially our half of we bit the when gave something be say guidance outset at the headwind second But a year. the will

Christopher Quilty

and X And Viasat because and remind in all the X. Canadian Hughes they Dan, was, Viasat bought payloads for that you,

correctly. a guys say, were contract, You the in can if involved of that I sort I as middleman if remember deal, through

that. So contribution I wasn't on expecting margin revenue there was or a huge

Daniel Goldberg

no, Yes, really. not

-- So right. but you're

Viasat no, the a for middleman and the we sorry, with and any We that. from But we Hughes. long-term own of that direct Xplore You're a in payload. Xplore X, act deals payload flow our that Viasat sense capacity, so Canadian I'm deal Viasat for didn't their they uses with right capacity and other use to satellite did the that but Telesat, their doesn't as payload, for did through Hughes P&L. own

Andrew Browne

If the for big of people a small can to does building question to the that of MDA in half Telesat, year spending of supplier How you stuff of flow government, back other we and the that side? -- chunk not $X Andrew. terms revenue of as much think in guess, are how base [Indiscernible] Second contribution for feat billion the should I for money, and the on but the a no is at prepayments clearly rate. that's that through

Daniel Goldberg

months. forget, or So maybe, which X mean, and They're I them built satellites we're means those are this now, the don't suppliers in be I the coming to speak recognition, about Chris, talk one, to but that now. won't that, I'll equipment launching I ordering take our satellites right mean, years MDA's to revenue getting from going need money.

sitting name Dave, it, ordering, so CTO. me solar mean. arrays. you with And my out, they're I Help I'm here

David Wendling

the the that... of various components all So on spacecraft

Daniel Goldberg

People...

David Wendling

system, propulsion that. of solar the Mechanical, all controls, arrays, attitude

Daniel Goldberg

All supply before up. spending spending money. they And money. to big They're building think us all People is They're my would that want as XXX%. much stuff. ramping building are everyone do, great tell chain wants money companies the stuff. like a I as favor. In to start these that, experience,

me would out. And weren't And other know moving next is, hitting that's we're of our then and funds. flow building and we're people again, somebody over be industry, we schedule, the reality money, lot to squeamish months because I'm that is schedule reality credible. the buying that the on. the that's exactly spending worry XX this people the and they're and wouldn't of money a the are The So be, and to money, is going what's spending here it yes, but always stuff stuff, spending about if

Christopher Quilty

of speaking the returns question Tesat And on the have and performance sort you Mynaric that a to of involved of optical terminal, with critical around company, technology is Station, expect. ask of stuff, your I an selection absolutely economic Space I and think to couple obviously also you DARPA industry your for but phases were

soliloquy So on can the you perhaps us give process little a there?

Daniel Goldberg

Yes.

with So you take sitting Dave, is I'll CTO, come world in the But class and around. this, long first our room the and standing at Wendling, me. Dave crack can

to reliability trying key heritage intersatellite antennas, the we're constellation, antennas, between these the and the digital or for that's choice whether part links, the these And and right optical on kind a cost optical make onboard of everything whatnot. always capability processor, the yes, links are constellation. So of the

lot good space. We with of forward in now are right that technology the coming making So we are optical MDA a -- had worked with folks and there in selection.

determination was So all And note MDA. because box the they of is we variables, else performance, that. kind different those cost, between reliability, I'd of Telesat that's reality a kind effort, joint most schedule, the and something check this on Tesat of joint on landed

So Tesat making competitive the against day, not black end that a there Tesat has good was mark the of process. was at optical for here. end the at out And have MDA of links. At link. heritage They of we the that any day, are capable optical the it judged it. It's a good, the vendor other companies best a very

felt -- day, of a of a the the we for we but like I have number We the alternatives, got anything Dave, at had else. line us. And good end if over there's know don't Tesat

David Wendling

I analysis No, Dan, I And and end, in top final you well, note tough process came think out Tesat as disciplined that on said in you very was said, down the a selection process. a just it selection very so.

Christopher Quilty

you're And them, of MDA but like be Is top but I'm grown satellites very the ramping have a final the are up but happen exert of priority. they're you? tends Do book speculating, question, someone lead year, they're to the that's X,XXX other ramping growing of these a heap I to for up. Again, business you listening know things government have would capacity believe turning anything we've a a before. there concerns? to they which clearly, a to new it undisclosed inside This the day, apparently customer, call customer of might with quickly. sort any seen

Daniel Goldberg

us, an So away a MDA and about is no. down street hour the short from answer half We the know from us. well. right They're

former We've employees couple probably teams Telesat of employees here. side. got MDA lot well-integrated. their are former have on of They a Our a

relationship kind whatnot, years. at really antenna with have principally satellites and levels, prime, decades, organizations. building they've years different satellite good our the side not with worked a the of a as MDA been throughout on although for actually MDA We working for We've all and

ramp-up right we myself, don't like something successful. we're complacent. game, a keep us mean, is have them. both a cadence, going to no, on This where it's close so the regular closely. program But about in they including like. a and We're ramp-up with the in that they but which good It's them I very, huge program us. any that we'll say about of feel I And on So of the We, need relaxed feel dynamic for let meet supply differently we now concern. monitoring have if that as I you how is this as they teams where program them staff, no, engaging we are Both for no, contact not in and that, to know. with lot our very the chain. skin ramp-up a be huge we're their to are

Operator

from is question from Piecyk next The Walter LightShed.

Walter Piecyk

X guidance. with one just a you some first, the the on in revenue their regard together -- Are Dan, that with is kind a they quick cash of year in work Chris's first your as for associated you basically of probability through there terms this quarter EchoStar numbers? have half to strength issues? put quick relative fourth follow-up of questions guidance a the Is assuming you of that to when

Daniel Goldberg

and guidance, before, we EchoStar, any our together of put what with range we outcomes outcomes be. of in terms when could captured assumptions of of it range a changed those we said and those Well, haven't this

service reality guess, I So going where to the thinking all business when The has in a hasn't outset other enjoy find cash of we've EchoStar, no. by something Because what's to EchoStar extent the to obviously of Nimiq for from it renew expectation continue or still new that EchoStar. cash generating to with the they'll flow. being their going fully thinking thing to that satellite their about year date, I'd is, then and the is yes, will infrastructure, gave is, distribution that our the on back on DTH of a amount X is that. that of we important what's the us, learned way EchoStar. including pay track direct-to-home say with be we X they customers deteriorated guidance. And changed still and at of the and Nimiq provide reflection we significant at date, an part to the fully, is my because used continue sector, flow To The it's important benefit is half about a they that year the stood

And make they're to is way they'll paying sure expectation my find us. so that a

pausing still just Are I'm So here. Okay, online? we sorry.

I line. lost Our sure if the wasn't had we here. screen was flickering

Walter Piecyk

mean, mean, I switch -- in and agree. why to then they cash I and can't let a just flow of to to lower X, business if element got some for their look, I have level a a get generate gun them then of off the Nimiq not you the one free they not just off hook put head renewal?

Daniel Goldberg

Well, look, way yes, win-win best things of with can. I a frame try in of mean, all a you kind customers, you our as to,

don't because still or work years we good Shaw, to to We've XX them whether this North millions get try business we've with, have headwinds. We try there rely nearly is all and or always there. satellite about EchoStar work Bell it's now working with that them. secular before. that on been You EchoStar America facing across with with it. are a business services. We talked those The real But for sustain relationship direct-to-home to households of know

yes... so And

Walter Piecyk

this years from many feel of X lower, this subs just be, one. is renewal, going a like your be In they're like you're could nice relationship. the words, as years sounding itself, not them be to the last year nice million XX this, on it it's stat to like like in to last then other want it's going the also be you negotiation they're to to negotiation. now, if couple of however this I as you maybe longevity

can? squeezing everything you like not, why So just for

Daniel Goldberg

we long, Yes, time. for customers the I this long our been don't not market. how doing We've in a know. It's approach

so another so update in tuned. be months on that one we'll stay able And discussions going time. then way or and an to a to with provide conclude anyway, couple We're renewal our them

Walter Piecyk

forward. Apple this enterprise the LEO, in wondering seemingly additional size, the now project's what felt that side? the Has on of market if presales more years end, of have phone, you back rethinking of done the this directed got obviously, it not device? there again, recent I any but know terms confidence that the directed that think in the MDA that but market getting is still enterprise, that to want, the opened a market the talking is up mean, terms beyond It's the in in I in Maybe moving this kind I any device, obviously of I exists. phone. to seems had launch more any I an market the coverage Skylo in new stuff. using with is a couple on announcement to kind be been about there's been realize whole commitment. And the you is target Globalstar yesterday and I've great Globalstar It additional developing. of the pixel out,

changed to attack trying in that Just curious terms market. has your thought process of if

Daniel Goldberg

on spectrum broadband smartphone, but and connection great they're is are to cave question, serve They're Lightspeed's are market. the really The connection, for not verticals focused for broadband us. growing. ideal large, reality is the a it it's we're market serve on no, fast opportunities And great believe providing the that device we that market. And they're well-suited operating deep, optimized that that the It's handheld constellation even The direct so. airband ideal to frequencies we've hasn't. that spectrum but for the a a to an connectivity,

mean, don't And activities, anyone MDA and that. up staff forward. I presales but what then so, far no, say, I any we're moving is and is as about ramping forward. obviously Yes, spending questions mean, all that I money. I still remains know going our we're Lightspeed to has mean, if Lightspeed's the as stuff focus. And ordering

that. well understands customer the engaged people development different world around We've the running know think business with these in community that we the all customers salespeople I got and verticals.

to nothing announce so, now, And but... right

Walter Piecyk

like, whether maybe contracts, significant out comment have there [Indiscernible] you only incremental you they're been call but And least bookings announced, that at I material know could not enough to

Daniel Goldberg

No, no, I mean... no,

Walter Piecyk

since other any than last the earnings But call? booking

Daniel Goldberg

users Arrow prospective since we'd good that putting there market be expectation But wasn't that The clear anything We're QX we're validation expectation a any. would on, out having we're receptive are building. good focused customer our numbers. There's no. it It that in really our wasn't LEO. about government Users it. enterprise. excited the what No, engagement the announcing knows is my highly key to Maritime, verticals that be with community

see to is market. You think we something we're bringing that traction the getting that compelling and really Starlink the

backlog pay So orders not X.X we're transparent anyway, we'll that be got stay and the And [ take now CAD the talk ] and earnings and report million that. is we've about apart the tuned. And -- we billion we we report wins the have when or we the backlog Lightspeed do on getting. commitments we'll we'll of as The about include like. $XXX it about that very which talk release. on Right Lightspeed, in moves, about we'll that from separate

Operator

The America. next of Bank question is from Sean Mahoney from

Unknown Analyst

capital a working outflow noticed in I a the for large for restricted the capital quarter. working group benefit First, group large and unrestricted the

offset? any the investment Or that So largely that just would wondering, as you did just unsub call? last it those you you use intercompany numbers the capacity flows? Or is a on coincidence does reflect remaining indicated

Andrew Browne

Yes.

timing down from Telesat down operations. next perspective, showing it from top investment see So quarter Canada it's But unrestricted up And group. an the a in investment just you'll into that's in. as the

Unknown Analyst

-- you you was we run OpEX, higher Xplore professional more expect think for to some or professional GEO higher with then debt like for with QX? like with do seems time? look debt to as GEO higher Should expense And up the about at OpEx? to incur mentioned expense bad continue fees. should to least rate fees part we the sequentially. due Xplore It that How well Or of QX bad as associated that was

Andrew Browne

business in you still is look we which we on pretty expecting out actual GEO contained plans actually is our pretty, now. EBITDA GEO said to call pretty be the if our OpEx what at our we'll overall, were point guidance that's X% that's within to high, down sticking and last And are margin And XX%, we our significant. and

$X the I just bad debt, bad is million the to amount about On delta shared $X million. debt

and and material. are Dan we as and of and of in But scale we had we it's judicious spending grand spend as the OpEx a said money, call, how on what money good. to alluded sort that last is So which on pretty in do not we terms

That's So GEO our as said I review what a say, of OpEx. on that's call. we

Unknown Analyst

the on looks Yes, quarter. that up it debt mentioned. you million went like bad like then $X.X And expense in the

it and just call Xplore kind expense? So Are $X.X a from million that you of bad recognizing debt still with offsetting revenues month.

Andrew Browne

currently we partial making at Yes, Xplore. are revenue They're payments. recognizing

revenue what recognize we to their continue plan forth. more is we So till know go about

Unknown Analyst

their like includes remaining quantify under you contract? can much how the your are I what remaining Xplore backlog obligations of the -- guess the Like And what obligations?

Daniel Goldberg

you Yes, we'll help there. out

John, So, out remind it until? me, goes

Unknown Executive

XXXX. January

Daniel Goldberg

Yes.

magnitude CAD it be probably million billion. of XX backlog in and of It's So CAD X.X order 'XX. about would that that's 'XX

prepayment. a about know You of should also that X/X that was

And deferred Xplore so when we recognize noncash just each a from quarter, is of about revenue. revenue X/X it

that's is, but Sean. it what So --

Unknown Analyst

on just the have one try And then more the few so time one, last a guidance. I know I'll asked, people

revenues at $XXX just the about So -- $XX half remember you've million million, a of did there's I of $XX you I million the lost of declines you end guidance about year. low EchoStar like that million I the least, north business steep still month second understand can't of of XXX% month. if But rest know or even million implies think, some the it half. birds said about the you're those in of that I are half which with EchoStar in DTH year. pretty seems contract, the of assuming per Could the that second And up, comes in $XX you drop us guess this less. the but be help first or like be past, would more, renewal could in just that be $XXX of wondering off September, could a the if October, the

Daniel Goldberg

lower thought rate. if we be Andrew, take renews, at I it'll Yes, about how materially Certainly, expect even looking that at maybe the this. guess, I'm year. I'll a this we -- we

we outcomes We've dish that issue captured see land we've of with on explain that. different with Xplore. part this the We'll got decline. where So

giving things non-core we and of that. I'd a own selling our periodically. kind at in take We're near-term. a potentially activities done that all it's business there's, note could also like that business we of consideration the So get of to look kind

this for EBITDA we that impactful whole least. revenue, be the lot to were It doesn't But that, top-line to would somewhat on it if us. year. it So of contributes contribute at would do a weigh

things. And we do of There's add end a want to range. kinds those range. yes, yes. mean, there's all a And, right? you it's the then, Andrew, anything? of So I gave a range, end high the low of

Andrew Browne

Yes, indeed.

know, we're we as people. OpEx, the at -- Dan look we're said you hiring as If

in investment for to OpEx LEO perspective, or will our is So the LEO, indeed increase. people going in

operating at was to million. And million. for and $XX months X LEO was look expenses segmentation, you for about $XX.X our $XX is guidance million our between the If OpEx given

the also as increase in half will first versus of increase overall half. potential second kind that -- what in OpEx in to So play

in And do. down the we are So in will to well. as that as what I prudent plays right EBITDA we say well adjusted

Daniel Goldberg

we've we And separately, and the and revenue of was pointing contract is that But maybe now year. kind nonlinear out to James chunky of It all easier had. that and see. thing the guys broken LEO that you GEO recognized That we for the half first LEO for one consulting other out that's numbers it's in to -- me revenue. our

was think I the year in NASA, is front which more there the this recognition the that of than in there's one part. revenue part back with

impact not Here the lot top-line. of a EBITDA, contributing again, it'll it's whole but

anything those that to that's going all There's Xplore second there's that's year where about year gave way shaping That's different of this it's about were we things, the don't of year nothing second but So the we kind the going the anyway, outset guidance. the on, know other we thinking our how than when Sean, is half really restructuring certainly of land. at of than nothing the half the up.

Andrew Browne

if we and you the in segmentation particularly actually And the at can revenues OpEx three to useful the very breakout are numbers about transparent, see mentioned I months. sort LEO, we've of is the think first you the just we just very and issues and look pertaining clearly the which done, that quite

Unknown Analyst

group? then us a order sell for? is magnitude are what or give we restricted on And one what's of for me, $XXX And you or based can that your from in that that you you million you of that asset sense million any non-core $XX like the said, expect X Is what just to talking that last mentioned, [Indiscernible]

Daniel Goldberg

Yes.

not, of neutral So it's top-line us. terms in material the CAD And it's perspective contribution mentioned, EBITDA million EBITDA It's -- because pretty in it's group. of one, restricted in of is the much kind then from an magnitude, for top-line. contribution order certainly as not I XX plus it

So get to But but have that's group. anything what terms it proceeds, material. to really say in it's looks that the can't we like. And that yet, into we do not going sell any restricting activity, if be share it, of proceeds we then we because yet from will don't come

Operator

will There are no Goldberg. further registered time. questions this the Dan at call I back to turn

Daniel Goldberg

operator, Okay, forward and we And again we us you when you joining QX to for all numbers. much thank chatting with release thank very morning. you this look our

much. very you thank So

Andrew Browne

very you Cheerio. much. Thank

Operator

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

Telesat (TSAT) 14 Aug 242024 Q2 Earnings call transcript