Telesat plunges 14% as Q2 net loss hits $559M, reversing 2024 gains

Ottawa-based satellite operator Telesat saw its stock drop nearly 14% on Thursday after reporting a $559 million net loss for the second quarter, a sharp reversal from the $76 million gain it posted a year earlier.

The company, which trades on the TSX and Nasdaq under TSAT, posted $79 million in consolidated revenue for the quarter, down 25% from the same period in 2024. The loss wiped out a portion of the stock's year-to-date rally, which still sits above 80%.

Telesat attributed the loss to non-cash charges tied to financing warrants for its Lightspeed satellite subsidiary and the weakening Canadian dollar, which inflated the Canadian-dollar value of its U.S. dollar-denominated debt.

On the earnings call, CEO Dan Goldberg said the value of the company's warrants has increased more than 50% after Telesat signed its largest-ever contract. "That's obviously a positive sign for the business," Goldberg said. "It's good news if you're a Canadian taxpayer because the Government of Canada and the Government of Quebec have warrants in the Lightspeed project."

Warrants grant the holder the right to buy or sell stock at a set price. For certain types, a rising share price requires the difference to be recorded as a loss. Telesat struck large loan agreements with Canada and Quebec in 2024, giving the governments warrants for 10% and 1.87% of Lightspeed's shares, respectively. Since those warrants were signed, Telesat's stock has roughly quadrupled, driven by rising interest in national space capabilities.

Telesat said its low-Earth orbit satellite backlog stands at $5.6 billion, including the recent Canadian government contract. Goldberg told analysts that global conflict has opened a window to address demand for defense and sovereign capabilities. He said he is "very bullish" on Telesat's ability to meaningfully grow its backlog by the end of next year.