GuruFocus -
- Revenue: $282 million, up 38% year over year.
- Adjusted EBITDA: $55.5 million, up 30% year over year.
- Adjusted EBITDA Margin: 19.7%.
- Operating Cash Flow: $259 million.
- Backlog: $4.6 billion, close to 50% increase year over year.
- Net Debt: $155 million.
- Available Liquidity: $535 million.
- Leverage Ratio: 0.8x.
- Capital Expenditures: $53 million in Q3.
- Free Cash Flow: $205 million in Q3.
- Satellite Systems Revenue: $168 million, up 77.5% year over year.
- Robotics and Space Operations Revenue: $66.5 million, up 7.4% year over year.
- Geointelligence Revenue: $48 million, flat year over year.
- Gross Profit: $76 million, up 31% year over year.
- Gross Margin: 26.8%.
- Adjusted Net Income: $35 million, up from $22 million year over year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MDA Space Ltd (MDALF) reported a 38% year-over-year increase in Q3 revenues, totaling $282 million.
- The company achieved a 30% increase in adjusted EBITDA, reaching $55.5 million, with a solid EBITDA margin of 19.7%.
- Operating cash flow was strong at $259 million, contributing to a healthy balance sheet and a declining leverage ratio.
- The backlog at the end of the quarter was $4.6 billion, providing good revenue visibility for 2025 and beyond.
- MDA Space Ltd (MDALF) is expanding its satellite systems facility in Quebec, which will enhance manufacturing capacity significantly.
- The launch of the MDA CHORUS program has been delayed to mid-2026 due to additional security enhancements.
- Gross margin decreased to 26.8% from 28.2% year-over-year, influenced by evolving program mix and higher depreciation expenses.
- The company remains unable to disclose the identity of its unnamed customer, causing some uncertainty.
- Revenues in the geointelligence business were flat year-over-year, indicating a lack of growth in this segment.
- There is a potential gap in the backlog target for the end of 2024, requiring additional contract announcements to meet expectations.
A: Mike Greenley, CEO: We're not in a position to comment on our unnamed customer or the nature of it. We have a strong business, growing 25% to 30% a year, with a healthy backlog and a strong pipeline, especially in satellite systems for low earth orbit constellations. It's a $13 billion to $15 billion pipeline. We will identify the customer as soon as legally allowed.
Q: Can you remind us of the timetable for the completion of the current work with Globalstar and whether they've exercised any options?
A: Mike Greenley, CEO: We are executing on the original 17 satellites, to be delivered through 2025. The option for 9 more has not been activated yet. Globalstar has not disclosed features of their next generation network, so we will have to wait and see.
Q: Can you speak about the level of visibility you have regarding the Lightspeed (TSX:LSPD) program and its implications for 2025 and 2026?
A: Mike Greenley, CEO: We have a strong contract and project management is well in hand. Over 95% of suppliers are under contract, providing us with good insight into 2025. We expect to provide guidance on 2025 expectations in our next earnings call in March.
Q: What are the drivers behind the CHORUS launch delay to mid-2026?
A: Mike Greenley, CEO: The delay is our choice, not related to SpaceX. We want to incorporate additional security features into the satellite. RADARSAT-2 remains healthy, allowing us to take the time for these enhancements.
Q: Can you confirm that the ATP constellation will enable direct-to-device connectivity?
A: Mike Greenley, CEO: I can only confirm that it's an NGSO constellation. Further details will be disclosed once the full contract is finalized.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.