MDA Space Ltd.

Welcome to MBA Space Limited conference call and webcast. This call is being recorded on May 8, 2025 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. For those viewers listening via webcast, please note that the company will be using a presentation. Webcast viewers can advance the slides by using the arrow seen in the presentation window. If anyone has difficulties hearing the conference, please press star followed by zero for the operator at any time. I would now like to turn the call over to Shirin Sahawi, Head of Investor Relations at MDA Space. Please go ahead, ma'am.

Thank you, John. Good morning and welcome to MDA Space first quarter 2025 earnings call. Mike Greenlee, our CEO, and Guillaume Lebois, our CFO, will lead today's call and share some prepared remarks before taking your questions. A couple of housekeeping items before we begin. Today's call is accessible via webcast on our investor relations website. All our disclosures, including the press release, MD&A, and financial statements are available from our investor relations website and from CDAR+. I would also 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 therefore 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. Before my remarks this morning, I just want to speak to my quality of voice. So a nasty cold has caught me in the last week, and as a result, my voice is seeming a little bit weird today. In addition, I may break into an enthusiastic coughing burst from time to time. If that does happen, I will go on mute for a few seconds, and then I will come back. So good morning, everybody, and thank you to those for joining us today to discuss our first quarter 2025 financial results. The MDA Space team delivered another strong quarter in Q1, driven by solid execution as we continue to convert our backlog and meet our customer commitments. Our Q1 revenues totaled $351 million, up 68% year over year. Adjusted EBITDA was $69 million, up 63% versus last year, and adjusted EBITDA margin was a solid 19.5%. Operating cash flow was strong at $267 million, and we ended the quarter with no debt and a net cash position of $376 million. Our backlog of $4.8 billion at quarter end provides us with good revenue visibility for 2025 and beyond. The strength of our backlog was significantly enhanced in February when we announced the MDA space has been awarded a $1.1 billion follow-on contract from GlobalStar to manufacture its next generation low Earth orbit constellation which will include over 50 MDA Aurora digital satellites. This is our third LEO Constellation contract in three years and second Constellation with Global Start, further highlighting the continued momentum we are seeing in our satellite systems business driven by strong customer demand for our innovative technology. With a solid start to the year, we are reaffirming our previous 2025 full-year financial outlook, which we provided... which we provided with our Q4 2024 earnings release. We remain confident and continue to expect revenues to be between $1.5 billion to $1.65 billion, representing year-over-year growth of approximately 45% at the midpoint of guidance. We expect full-year adjusted EBITDA to be between $290 million to $320 million. representing year-over-year growth of approximately 40% at the midpoint of guidance and approximately 19% to 20% adjusted EBITDA margin rates. We continue to expect capital expenditures to be between $210 million to $240 million as we invest in our growth initiatives. We also expect free cash flow to be neutral to positive for the full year. Q1 and the subsequent period was a busy one for MDA space. Throughout the quarter, our teams have continued to execute on our existing programs, including major programs like Telesat Lightspeed, as well as both low Earth orbit constellations for Global Star. We also continue to execute on the development of our Canadarm3 robotic program and MDA Chorus, our next generation Earth observation constellation. And subsequent to quarter end, we announced that MDA Space has entered into a definitive agreement to acquire all outstanding shares of SatexFi Communications Limited in an all-cash transaction of U.S. $2.10 per share. The transaction, which represents an equity value for SatexFi of approximately U.S. $193 million, is expected to further enhance the end-to-end satellite system's offering of MDA space as demand for next-generation digital satellite communications continues to accelerate. The transaction represents a total cash consideration of approximately US$269 million after accounting for Statix V's existing debt, which MDA Space plans to retire immediately upon closing. We expect the transaction to close in the third quarter of 2025, subject to customary closing conditions and required regulatory approvals. As always, our strong performance in Q1 would not have been possible without the hard work and continued dedication of the entire MDA Space team. we'd like to thank and acknowledge. As we look to the balance of 2025, the team is energized by the solid momentum we are seeing in our end markets and MBA space has the right technology portfolio to capitalize on the opportunities ahead of us.