MDA Space Ltd.

Welcome to MDA Space Limited conference call and webcast. This call is being recorded on November 15, 2024 at 8.30 a.m. Eastern Time. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has difficulties hearing the conference, please press star followed by zero for operator assistance at any time. I'd now like to turn the call over to Shireen Sahawi, head of investor relations at MDA Space.

Thank you, operator. Good morning and welcome to MDA Space third quarter 2024 earnings call. Mike Greenlee, our CEO, and Guillaume Lavoie, our newly appointed CFO, will lead today's call and share some prepared remarks before taking your questions. Before we begin, I'd like to remind you that today's call will include estimates and other forward-looking information which may differ from actual results. Please review the cautionary language in today's press release and public filings regarding various factors, assumptions, and risks that could cause actual results to differ. In addition, during this call, we will refer to certain non-IFRS financial measures. Although we believe these measures provide useful supplemental information about our financial performance, These measures do not have any standardized meaning under IFRS, and our approach in calculating these measures may differ from that of other issuers and thereby may not be directly comparable. Please see the company's quarterly report and other public filings for more information about these measures, including reconciliations to the nearest IFRS measures. And with that, it's my pleasure to turn the call over to Mike.

Thank you, Shireen. Good morning, everyone. And thank you to Joel for joining us today to discuss our third quarter 2024 financial results. The MDA Space team delivered another strong quarter in Q3, driven by solid execution, as we continue to convert our backlog and meet our customer commitments. Our Q3 revenues totaled $282 million, up 38% year over year. Adjusted EBITDA was $55.5 million, up 30% versus last year, and adjusted EBITDA margin was a solid 19.7%. Operating cash flow was strong at $259 million, and we ended the quarter with a healthy balance sheet as our leverage ratio continued to decline. Our backlog of $4.6 billion at quarter end provides us with good revenue visibility for 2025 and beyond. Given the solid year-to-date performance, we are updating our full-year 2024 financial outlook. We are raising our revenue guidance, narrowing our adjusted EBITDA guidance, and reaffirming our CapEx guidance. Consistent with our comments last quarter, we expect free cash flow to be positive this year, given favorable operating cash flow dynamics. Q3 and the subsequent period was a busy one for MDA space. We broke ground on our satellite systems facility expansion in Quebec, which will add 185,000 square feet of advanced manufacturing capacity capable of delivering two MDA Aurora digital satellites per day. On our major programs, the MDA Space Team successfully conducted the preliminary design review for the Canadarm3 program, a key milestone for the program. We also continue to advance the manufacturing of MDA Chorus, our next generation Earth observation constellation. And in our satellite systems business, the team made solid progress advancing the engineering work for the Telesatellite Speed Program. None of this, of course, would be possible without the hard work and dedication of the entire MDA Space Team, who I'd like to thank and acknowledge. I'd also like to welcome Guillaume Lavois to the MDA Space Team. Last week, we announced that Guillaume had been appointed to the role of Chief Financial Officer at MDA Space. Guillaume is a seasoned financial executive with over 20 years of experience covering the full range of financial and business functions at both public and private companies. I look forward to working with him to support our long-term growth plans and help us deliver successfully for our customers and shareholders. As he's come in, Guillaume has dug right in and is truly understanding our business and is an excellent fit amongst our executive leadership team. I also want to extend my sincere thanks to Janet McEachern for stepping in as our interim CFO during this transitional period. Janet has done an exceptional job leading our finance function during this time. On behalf of the entire executive leadership team, I want to recognize Janet for her commitment and dedication. We will continue to draw on Janet's deep financial expertise in her ongoing role as Vice President of Finance. I'll now give you a view of the industry, an update on our three business areas, and then pass it to Guillaume for a deep dive on the financials. As we have seen in previous quarters, the broader space market continues to expand, mature, and gain momentum. There are a few items worth highlighting. Starting in Canada, in September, MDA Space hosted multiple federal and provincial senior government officials, including the Prime Minister of Canada and the Premier of Quebec, at our satellite manufacturing facility in Montreal to mark the finalization of government funding for the Telesat Lightspeed Low Earth Orbit Satellite Constellation, and MDA Spaces expansion in the province. The Telesatellite Speed Constellation will utilize our innovative MDA Aurora digital satellites to provide high-speed internet access across Canada and globally and help bridge the digital divide. South of the border, notable commercial activities include Global Star's recent announcement that it has secured additional funding from its customer, Apple, to deliver expanded direct-to-device services over a new mobile satellite services network, which will include a new satellite constellation. This development further reinforces the expanded role that space infrastructure is expected to play in the communications market, as we see closer integration of terrestrial and satellite assets helping drive continued growth in the satellite constellation market. Additionally, in early October, SpaceX conducted the fifth test flight of its Starship rocket, successfully flying the rocket booster back to its launch site and securely catching it in the air with two mechanical arms as it descended. This marks another important milestone for the development of Starship, a fully reusable super heavy lift launch vehicle, which once operational will help further reduce launch costs, making space more accessible and driving increased commercialization in our industry. Globally, we continue to see increased interest in space exploration. with the Dominican Republic, Estonia, Cyprus, and Chile being the latest countries to sign on to NASA's Artemis Accords, signaling their commitment to safe, long-term, and ethical space exploration. The latest entries bring the group size to 47 nations now, as we continue to see steady interest from non-traditional spacefaring nations, which are now building their own national space programs, a development that bodes well for the broader space market into the future. Now I'll turn to our three business areas. In satellite systems, we continue to see good momentum in this market with our teams working to advance multiple requests for communication satellite solutions and a growing number of constellation projects. We are also seeing good activity levels from customers and our opportunity funnel remains strong. In Q3, we received a contract from SWISTA 12. to provide antenna systems for three of the company's HummingSat satellites for geostationary orbit. The satellites will be deployed as part of the Inmarsat-8 program to provide crucial safety services and support advances in emergency tracking. MDA Space will design and build high-performance L-band navigation antennas and will also design and configure the innovative packaging concepts that are required on the GeoSmallSat platform. This is MDA's second contract in the geosmallsat market with SWISTA 12. On the operational front, our teams were busy advancing work on a number of programs. On the Telesat Lightspeed program, as I mentioned earlier, we are progressing the design work and our teams are preparing for the program's engineering and manufacturing phases of development. We also continued to onboard suppliers for the program, with all critical subsystem suppliers now under contract as of the end of October. setting the stage for work volumes to accelerate in 2025, consistent with our program plans. We are also making good progress on the engineering and program procurement activities for the non-geostationary orbit satellite constellation we announced in Q4 2023, our unnamed customer. Originally awarded under a $180 million authorization to proceed contract, and subsequently increased to $300 million to accommodate additional work scopes. The full constellation, valued at a minimum of $750 million, is expected to include a minimum of 36 MDA Aurora digital satellites. The definitive contact for the full constellation, for which MDA would be the prime contractor, is expected this year, as previously mentioned. We also continue to advance work on the GlobalSTAR program. In Q3, the team progressed flight hardware production and flat-sat testing of the bus and payload systems and successfully conducted the spacecraft integration readiness review. The team has started the integration of the first satellite. As you know, MDA Space is the satellite prime contractor to enhance Global Star's LEO constellation through the addition of 17 satellites which support SOS features and direct-to-device communication on certain Apple products. This quarter, we announced that construction is underway on a 185,000 square foot expansion to our satellite production facility in St. Anne de Bellevue, Quebec. The building foundation has been laid and the steel structure is currently being assembled. Once complete, it will be the world's largest high-volume manufacturing facility in its satellite class, with capacity to deliver two MDA Aurora digital satellites a day. The production line is expected to be operational in the second half of 2025. Moving to our geo-intelligence business, customer demand for Earth observation offering remains robust, and we are seeing increased recognition of the role that commercial Earth observation satellites can play to provide near-real-time data and analytics to governments and private enterprise. In Q3, MDA Space was selected by NASA as one of eight companies for a new award to help acquire Earth observation data and provide related services for the agency. This award represents our first direct contract with NASA for Earth Observation Services. The Commercial Small Sat Data Acquisition Program has a maximum value of $476 million, cumulative among all selected contractors, and the performance period that runs through 2028. We will be providing synthetic aperture radar, or SAR data, to aid NASA's efforts to better understand climate change impacts and to support other Earth science applications. During the quarter, we also continued to advance work on MDA Chorus. The MDA space team completed the assembly of the main structure of the spacecraft, completed the flight software. We also commenced integration and testing of the spacecraft. In response to evolving market dynamics, the team is incorporating additional spacecraft security enhancements for MDA Chorus. As a result of these enhancements, and to provide some additional time for testing, we are now targeting a mid-2026 launch for MDA Chorus. Overall, we are very pleased with the progress to date on MDA Chorus. Over the last year, we achieved a number of key milestones, including successfully completing the critical design review for the payload and all unit levels, completing the deployment testing of the engineering model SAR intended deployment structure, and conducting multiple ground segment operations demonstrations. We are seeing strong interest in MDA Chorus from both existing and new prospective end users, and business development with potential Chorus customers continues to accelerate, with approximately three dozen customers having signed letters of interest for future Chorus data and services. This is excellent. we are confident that MDA Chorus will deliver enhanced functionality to all of our current and future customers. In terms of other geo-intelligence programs, work on the Canadian Surface Combatant Program, one of our long-term government programs, is progressing. The team continues to meet our technical milestones, including a recent successful critical design review of the laser warning and countermeasures capability. MDA is responsible for the design and integration of the electronic warfare system for the ships to help protect the men and women of the Royal Canadian Navy. Moving to our robotics and space operations business, we continue to see good traction and activity levels on both the government and commercial fronts. In Q3, we successfully conducted the preliminary design review for the Canadarm3 program, which we were awarded in early 2022 from the Canadian Space Agency. This marks the final milestone for Phase B of the Canadarm3 program, In parallel, we are ramping up work volumes on Phase C, which we were awarded together with Phase D in June of 2024. Phase C will see us completing the final design, whereas Phase D covers the construction, system assembly, integration and test of the full robotic system as well as the ground segment for command and control. MDA Space will support commissioning of the Canadarm3 robotic system once in orbit from our new mission control facility at our global headquarters and Space Robotics Center of Excellence in Brampton, Ontario. The contract also includes planning and personnel training in preparation for on-orbit mission operations. On the commercial side, we continue to explore opportunities to incorporate our robotic technology on applications to support space exploration and lunar mobility. During the quarter, we received a contract from Lunar Outpost to integrate our MDA SkyMaker robotic technology into its lunar terrain vehicle concept as part of a year-long feasibility study for NASA. The agency is partnering with industry to develop a system that meets NASA's requirements for a lunar terrain vehicle that Artemis astronauts will use to travel around the lunar surface, a rover for the moon. Shifting to operations, we continued our hiring efforts to support the growth we see in our business, adding approximately 900 new hires over the last year. With more than 3,000 highly skilled MDA space staff today, we have the people and the talent to help propel our growth and give us the scale to execute on the market opportunities we see emerging. To recap, we are pleased with our performance this quarter and the momentum we are seeing in our markets. The team is energized, and we remain laser-focused on our priorities, a strong focus on execution, converting opportunities in our funnel, and expanding our leadership in core markets while maintaining strong profitability and a healthy balance sheet to help fund our growth initiatives. With that, I'll hand it over to Guillaume to walk us through the detailed financials.