The following is a summary of the Telesat Corporation (TSAT) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Telesat reported Q2 2024 consolidated revenues of $152 million, a decrease from the previous year by $27 million.

• Adjusted EBITDA for Q2 2024 was $103 million, down by $35 million compared to the same period last year, with an adjusted EBITDA margin of 67.8%.

• Operating expenses increased by $556 million primarily due to higher wages, benefits, and consulting costs, partially offset by non-cash share-based compensation and capitalized engineering expenses.

• Net income for Q2 2024 was $129 million, a significant increase from $19 million in the same period of 2023, primarily due to one-time recognition of C-band clearing income and the impacts of foreign exchange losses.

Business Progress:

• Telesat is making progress on its Lightspeed program, with MDA, the prime contractor, onboarding 90% of suppliers and sticking to the full-year ramp-up plan.

• The company has increased headcount by nearly 20% since the start of the year to support the Lightspeed project.

• Telesat is close to concluding funding agreements with the governments of Canada and Quebec, expected to finalize in the coming weeks.

Opportunities:

• Lightspeed program development continues with strong execution, showing promising prospects in commercializing the network across key verticals.

• Anticipated significant capital expenditures between $1 billion and $1.4 billion for 2024 related to Lightspeed are indicative of the strategic importance and scale of the project.

Risks:

• The reduction in service revenues and renewal rates, notably with a North American direct-to-home customer, forecasts potential revenue declines.

• Ongoing negotiations and uncertain outcomes with major clients, like EchoStar's contractual renewal, pose financial risk.

• Foreign exchange losses impacted by the strengthening US dollar indicate currency risk exposure.

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