Telesat Corporation

This conference is being recorded. All participants, please stand by. Your meeting is ready to begin. Good morning, ladies and gentlemen. Welcome to the conference call to report the fourth quarter 2024 financial results for Telesat. Our speakers today will be Dan Goldberg, President and Chief Executive Officer of Telesat, and Andrew Brown, 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. Radcliffe.

Thank you, Giselle, and good morning, everyone. This morning, we filed our annual report for the period ending December 31st, 2024 on Form 20F with the SEC and on CDAR+. Our remarks today may contain forward-looking statements. There are risks that tell us that 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 TELUSAT's annual report filed with the FDC. TELUSAT assumes no responsibility to update or revise these forward-looking statements. I'll 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. I'll say a few words about our performance in 2024 and then talk about our key objectives and expectations for 2025. I'll then hand over to Andrew to speak to the numbers in more detail, and then we'll open the call up to questions. 2024 was a pivotal and productive year for Telesat, and I'm very pleased with what we accomplished. We delivered focused, disciplined execution in our geo business, resulting in revenue and adjusted EBITDA that were above our guidance. And we deployed a portion of the healthy cash flows the geo business generates to make some additional debt repurchases which we believe strengthen our financial position and are accretive for stakeholders. In addition, we made major strides forward with Telesat Lightspeed. In September, we closed our financing arrangements for the governments of Canada and Quebec, securing the funding we need for full global service. We also made strong progress on the development and deployment of Lightspeed, investing more than a billion dollars over the course of last year and completing some important development milestones. We continued to build out the LEO team on both the engineering and commercial fronts, and importantly, got strong traction with prospective customers. Turning to this year, 2025, we expect the difficult operating environment in our geo business to continue, which is reflected in our guidance for the year. We anticipate revenue to be down approximately $155 million Canadian dollars, at the midpoint of our guidance with pressure on both the video and enterprise portions of our business. Half the anticipated decline comes from our DTH business, primarily from the full run rate impact of the lower rates associated with the renewal last year of the NMIC 5 agreement with DISH. We also marked the end of service with Shaw last year on our ANAC F2 satellite And early this year, we'll reach the expiration of our ANAC F3 contract with DISH. ANAC F3 has come to the end of its station-kept life and so is being put into inclined orbit and will be used for customer requirements that can be supported on an inclined orbit satellite. The other half of our forecasted revenue decline is expected to come from our enterprise and consulting activities. Roughly 20% of that is coming from customers serving the maritime and, to a lesser extent, the aero markets, principally owing to competition from Starlink. Other meaningful contributors are reduced revenues from an Indonesian government-funded broadband program, where a new Indonesian-owned satellite is replacing some of the services we provided, lower revenues from LEO-related consulting and demonstration projects, with U.S. government agencies NASA and DARPA, as well as reduced consulting revenues in our geo business too, and lower revenues owing to the sale of our wholly owned subsidiary Infosat that we announced last year. On the OPEX front, we're expecting Lightspeed OPEX to increase by approximately 40 million Canadian at the midpoint of guidance with increased investments in engineering operations and commercial resources, mostly headcount driven, as we continue to ramp up and execute the program. We'll run our geo business in a very focused, disciplined way. We'll continue to do that in an effort to mitigate as much as possible the pressures we're seeing in the market. On a consolidated basis, with the forecast top line declines and the incremental OPEX for light speed, we're expecting consolidated adjusted EBITDA to be down approximately 200 million Canadian at the midpoint of guidance. For my colleagues and I, 2025 will be all about focused execution on both GEO and LEO, mitigating as best we can the headwinds we're facing in GEO and building out and commercializing light speed on the LEO front. We're making strong progress across all aspects of developing the light speed constellation, the satellites, the landing stations, user terminals, software development, and expect to launch our first batch of satellites late next year. On the commercial front for Lightspeed, I'd say we're more bullish than ever, given what we're hearing from customers and seeing in the market. We've announced a handful of customer contracts over the past few weeks and are optimistic that we'll have more material contract announcements over the course of this year. Announcements that will translate into more significant Lightspeed contractual backlog which in turn will provide greater revenue and cash flow visibility for the project. We've spoken for some time about the huge opportunity we see in the market for commercial services, something that's becoming much more concrete as we get closer to launch and as the market's embrace of the LEO value proposition accelerates across all verticals. We'd also note that the recent fairly tectonic shifts and the geopolitical environment are making us even more bullish on sovereign national security requirements. Requirements we always believed were significant but now expect will provide an even stronger tailwind as countries increase their defense spending and look to diversify the allied governments and service providers they work with to protect and advance their national security interests. Lastly, I'd note that refinancing our restricted group debt remains an important priority for the company this year. In sum, we made an enormous amount of progress in 2024, and we have a clear plan and huge opportunity as we go forward. Given the progress we've made and the opportunities we see in the market at this time, we're more bullish than ever on our ability to deliver the services and solutions the market is demanding from while delivering highly attractive returns to our shareholders. As I hand over to Andrew, you may have seen in our release this morning that after more than five years at Telesat and well over 40 years in the computer chip and satellite communications industries, Andrew has decided to retire. We'll be instituting a search for his successor shortly. and Andrew will ensure a smooth transition and handover. I've known and worked with Andrew for over a quarter century, and while we'll still be working together for the next little while, I can't thank him enough for his exemplary work and contributions and for his warm collegiality and friendship over the years. I wish him a heartfelt congratulations and all the very best as he gets ready to take this very well-deserved next step. So with that, Over to you, Andrew.