Telesat Corporation

Good morning, ladies and gentlemen. Welcome to the conference call to report the third quarter 2024 financial results for Telesat. Our speakers today will be Dan Goldberg, President and Chief Executive Officer of Telesat, and Angie Brown, Chief Financial Officer of Telesat. I would now like to turn the meeting over to Mr. James Redquist, Vice President of Investor Relations. Please go ahead, Mr. Redquist.

Thank you, LaTanya, and good morning, everyone. This morning, we filed our quarterly report for the period ending September 30th, 2024 on 4 and 6K with the SEC and on CDAR+. Our remarks today may contain forward-looking statements. There are risks that TELUSAP's actual results may differ materially from the results contemplated by the forward-looking statements as a result of known and unknown risks and uncertainties. For a discussion of known risks, please see TELUSAP's annual report and updates filed with the SEC. TELUSAT assumes no responsibility to update or revise these forward-looking statements. I will now turn the call over to Dan Goldberg, TELUSAT's President and Chief Executive Officer.

Okay, thanks James, and thank you all for joining us this morning. Q3 and the first nine months of this year have unfolded largely consistent with our expectations. And as we noted in our earnings release, we've updated our guidance for revenues to be at the upper end of the range and for adjusted EBITDA to be at or above the top end of the range. Q3 was eventful with our biggest news that we closed the funding for Lightspeed towards the end of the quarter. We indicated on our Q2 call that closing was on track and we're pleased to get the announcement done shortly thereafter. I'm happy to say that we're making excellent progress so far executing the program and are pleased with the work and good collaboration we're having with our key suppliers. I'm also happy to see all the very talented new people we're bringing into Telesat as we staff up for this important program. In addition to the good progress we're making on the technical front, I've been very pleased to see the level of engagement we're having with the customer community now that the program is fully funded. It's increasingly plain that satellite users in each of the verticals we're focused on see the significant benefits of LEO and have an appreciation as well that Lightspeed, with its highly advanced and capable design, can meet their growing connectivity requirements. Securing customer commitments for Lightspeed is obviously a very high priority for us and will keep the market apprised of our progress as we move forward. Switching gears to our geo activities, I'm pleased to say that we entered into a renewal agreement with Echostar last month for NMIC 5, a renewal that we've spoken about on our prior calls. It's a five-year renewal that will see DISH ramping down its capacity over roughly the course of the first year to half the capacity they're using today. On a cash basis, we'll be receiving a little less than a third of what we used to. We plan to use the MIMIC 5 capacity we have coming back to us to support certain customer requirements in Canada that we don't expect it to fully replace the lost revenue from DISH. We mentioned on our Q2 call that we were contemplating selling a wholly-owned subsidiary that was generating roughly $10 million a year top line but with minimal EBITDA contribution. We did enter into an agreement last quarter to sell that business called InfoSat for proceeds in the low single-digit millions of dollars, so nothing very material there. The last thing I'll mention about developments in the quarter on the geo business is that we restructured our contract with Canadian ISP Explorer, something we also discussed on our last call. Explore has gone through a financial restructuring, and as part of that, we took an incremental bad debt provision last quarter to reflect that situation. On our Q2 call, we noted that Explore accounted for about $40 million of backlog and that roughly one-third of that was a prepayment that we recognized as deferred revenue each quarter. In light of Explore's financial challenges, we restructured the contract which will now expire at the end of Q3 next year, a little more than a year earlier than originally anticipated. Following the restructuring, we expect revenue from Explore to be down around $4 million next year relative to this year, but effectively flat at the EBITDA line. In sum, it was a busy quarter, and we're performing well relative to our guidance as we get closer to year end. We're very pleased to have Lightspeed fully funded for global service and are making strong progress to date on program execution. We remain very bullish on Lightspeed's prospects in the market, as well as our ability to deliver an extraordinary value proposition to our customers and significant value creation for stakeholders. So with that, I'll hand over to Andrew and then look forward to addressing any questions.