Telesat Reports Results for the Quarter and Twelve Months Ended December 31, 2024

Ottawa, Canada, March 27, 2025– Satellite operator Telesat (NASDAQ and TSX: TSAT) today announced its financial results for the three and twelve-month periods ended December 31, 2024. For the year ended December 31, 2024, Telesat had a net loss of CDN$ 302 million compared to net income of CDN$ 583 million for the prior year. The negative variation of $886 million was principally due to the impact of shifts in foreign exchange rates on the Canadian dollar value of our U.S. dollar denominated debt, the recognition of C-band proceeds in 2023, higher impairment charges on our orbital slots and certain satellites, and reduced revenue.

All amounts are in Canadian dollars and reported under IFRS® Accounting Standards unless otherwise noted.

“Telesat achieved a great deal in 2024 and I’m pleased with our financial performance and, more importantly in terms of our future, the tremendous progress we made in moving Telesat Lightspeed, our advanced Low Earth Orbit (LEO) satellite program, forward,” commented Dan Goldberg, Telesat’s President and CEO. “Our financial results reflect our continued disciplined execution, delivering revenue and Adjusted EBITDA¹ above our 2024 guidance as well as industry-leading Adjusted EBITDA margins1, a substantial GEO backlog² of $1.1 billion, and significant cash flow.”

Goldberg added: “Certainly the biggest development for Telesat last year was concluding our agreements with the Governments of Canada and Quebec for $2.54 billion in loan financing for Telesat Lightspeed. The Governments of Canada and Quebec see strong benefits associated with Telesat Lightspeed given the substantial investment, high quality job creation, and intellectual property development taking place in Canada as well as Telesat Lightspeed’s ability to bridge the digital divide and advance important sovereignty and security objectives of Canada and its allies, including in the Arctic. The Telesat Lightspeed program is making strong progress, with the successful completion of the Preliminary Design Review in December an important milestone in the development process. Our recent announcement of strategic partnerships with Space Norway, Orange, and ADN Telecom are evidence of the strong interest we’re seeing from customers for Telesat Lightspeed services.”

Goldberg noted: “For 2025, our guidance reflects our expectation of continued reduction in revenues from our North American direct-to-home (DTH) satellite video customers due to the full year impact of reductions from the Nimiq 5 renewal secured with Dish last year as well as the Anik F2 and F3 satellites reaching the end of their station-kept lives. In addition, we anticipate reduced revenues from customers in the maritime and, to a lesser extent, aero markets, principally due to LEO competition; from an Indonesian government-supported rural broadband program due to services moving to a new Indonesian satellite; from reduced LEO consulting and demonstration projects for certain U.S. government agencies; and from the impact of the sale of our wholly-owned Infosat subsidiary last fall. At the same time, we expect meaningful increases in Telesat Lightspeed operating expenditures and continued capital investment as we execute the program. The reduction in revenue and increase in operating expenditures are expected to result in a substantial decrease in consolidated Adjusted EBITDA^₁ relative to 2024, down 53% at the mid-point of our 2025 guidance range. Our emphasis this year will be on focused execution in our GEO business to mitigate the anticipated revenue declines, building and commercializing Telesat Lightspeed, and refinancing our restricted group debt.”

Goldberg concluded: “I also want to highlight the decision by Andrew Browne, our CFO, to retire later this year after more than five years at Telesat and over forty years in the computer chip and satellite communications industries. We are initiating a search for a successor and Andrew will ensure a smooth transition and handover. Andrew is a consummate professional and a great colleague and friend. On behalf of the Telesat team and our Board of Directors, I thank Andrew for all of his outstanding contributions and wish him the very best as he readies to take this very well-deserved next step.”

For the year ended December 31, 2024, Telesat reported consolidated revenue of $571 million, a decrease of 19% ($133 million) compared to the prior year. When adjusted for changes in foreign exchange rates, revenue declined 20% ($138 million) compared to 2023. The decrease was due to rate and capacity reductions by our North American DTH customers combined with lower enterprise revenues from customers in the aero and maritime markets, Latin America, and the Canadian and United States governments.

Operating expenses for the full year 2024 were $208 million, an increase of 2% ($3 million) from 2023. When adjusted for changes in foreign exchange rates, operating expenses increased by 2% ($5 million) compared to 2023. The increase was primarily due to higher wages and benefits in LEO, higher professional fees in LEO and GEO, and higher bad debt expense in GEO, offset by lower compensation expense in GEO, higher capitalized engineering in LEO, and lower equipment sales in GEO.

Adjusted EBITDA for the full-year 2024 was $384 million, a decrease of 28% ($150 million) or, when adjusted for foreign exchange rates, a decrease of 29% ($156 million). The Adjusted EBITDA margin1 was 67.2%, compared to 75.8% in the same period in 2023. The GEO segment Adjusted EBITDA margin, which excludes Telesat Lightspeed investment, was 80%, down from 83.2% in 2023.

For the year ended December 31, 2024, Telesat had a net loss of $302 million compared to net income of $583 million for the prior year. The negative variation of $886 million was principally due to the impact of shifts in foreign exchange rates on the Canadian dollar value of our U.S. dollar denominated debt, the recognition of C-band proceeds in 2023, higher impairment charges on our orbital slots and certain satellites, and reduced revenue.

For the quarter ended December 31, 2024, Telesat reported consolidated revenue of $128 million, a decrease of 23% ($38 million) compared to the same period in 2023. The decrease was primarily due to a rate and capacity reduction on the Nimiq 5 Dish contract renewal, lower enterprise revenues, and the sale of the company’s Infosat business.

Operating expenses for the quarter were $58 million, an increase of 17% ($9 million) from the same period in 2023. The increase was primarily due to higher compensation costs for LEO, partially offset by higher capitalized engineering expense.

Adjusted EBITDA¹ for the quarter was $73 million, a decrease of 40% ($50 million). The Adjusted EBITDA margin1 was 57.4%, compared to 74.3% in the same period in 2023. The GEO segment Adjusted EBITDA margin, which excludes Telesat Lightspeed investment, was 78%, compared to 82.2% in the same period of 2023.

Telesat net loss for the quarter was $447 million compared to net income of $39 million for the same period in the prior year, with the variation principally due to the impact of shifts in foreign exchange rates on the Canadian dollar value of our U.S. dollar denominated debt and higher impairment charges on our orbital slots and satellites.

Business Highlights

• Government of Canada and Government of Quebec Financing:

  • On September 13, 2024, Telesat announced that Telesat LEO Inc. (a wholly-owned unrestricted subsidiary) had completed funding agreements with the Government of Canada and the Government of Quebec for $2.54 billion in loans to support the Telesat Lightspeed project.

• • On December 13, 2024, Telesat made the first request for funds under the funding agreement, and the funds were received in January 2025.

• Telesat Lightspeed Construction Process:

  • On December 4, 2024, Telesat and MDA Space announced the successful completion of the spacecraft Preliminary Design Review, an important milestone in the Telesat Lightspeed program.

• At December 31, 2024:

  • Telesat had contracted backlog² for future services of approximately $1.1 billion (excluding commitments associated with Telesat Lightspeed).

• • Fleet utilization was 72%.

• Debt Repurchase:

• • Telesat repurchased US$262 million of debt for an aggregate price of US$119 million (including US$5 million in accrued interest). Combined with the debt repurchases completed in 2022 and 2023, Telesat has repurchased a cumulative principal amount of US$849 million for an aggregate cost of US$459 million (including US$12 million in accrued interest).

• CFO Andrew Browne Retirement:

  • Telesat CFO Andrew Browne has announced plans to retire later this year. Telesat is initiating a search process to identify its next Chief Financial Officer. Mr. Browne will continue as Chief Financial Officer until a successor is appointed and will assist with the process to allow for a seamless transition.

2025 Financial Outlook

(assumes an average foreign exchange rate of US$1=C$1.42)

For 2025, Telesat expects full year:

• Revenues to be between $405 million and $425 million;

• Adjusted EBITDA¹ to be between $170 million and $190 million on a consolidated basis. This reflects LEO operating expenses of between $110 million and $120 million, an increase from 2024 of between $38 million and $48 million; and

• Capital expenditures (including both cash paid and accrued) to be in the range of $900 million to $1,100 million, virtually all of which is related to Telesat Lightspeed.

Telesat’s annual report on Form 20-F for the year ended December 31, 2024, has been filed with the United States Securities and Exchange Commission (SEC) and the Canadian securities regulatory authorities, and may be accessed on the SEC’s website at www.sec.gov and on the System for Electronic Document Analysis and Retrieval+ (SEDAR) website at www.sedarplus.ca.

Telesat Corporation

Consolidated Statements of Income (Loss)

For the periods ended December 31

Telesat Corporation

Consolidated Balance Sheets

Telesat Corporation

Consolidated Statements of Cash Flows

For the years ended December 31

Telesat’s Adjusted EBITDA margin(¹):

The following table provides a quantitative reconciliation of net income to Adjusted EBITDA and Adjusted EBITDA margin, each of which are non-IFRS Accounting Standards measures.

End Notes

1. Non-IFRS Accounting Standards Measures – Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS Accounting Standards measures. EBITDA is defined as “Earnings Before Interest, Taxes, Depreciation and Amortization.” Adjusted EBITDA is used to measure Telesat’s financial performance. Adjusted EBITDA is defined as operating income (less certain operating expenses such as share-based compensation expenses and unusual and non-recurring items, including restructuring related expenses) before interest expense, taxes, depreciation and amortization. Adjusted EBITDA margin is used to measure Telesat’s operating performance. Adjusted EBITDA margin is defined as the ratio of Adjusted EBITDA to revenue. Adjusted EBITDA and Adjusted EBITDA margin are not standardized financial measures under IFRS Accounting Standards and might not be comparable to similar financial measures disclosed by other issuers. Adjusted EBITDA allows investors and Telesat to compare Telesat’s operating results with that of competitors exclusive of depreciation and amortization, interest and investment income, interest expense, taxes and certain other expenses. Financial results of competitors in the satellite services industry have significant variations that can result from timing of capital expenditures, the amount of intangible assets recorded, the differences in assets’ lives, the timing and amount of investments, the effects of other income (expense), and unusual and non-recurring items. The use of Adjusted EBITDA assists investors and Telesat to compare operating results exclusive of these items. Competitors in the satellite services industry have significantly different capital structures. Telesat believes that the use of Adjusted EBITDA improves comparability of performance by excluding interest expense. Telesat believes that the use of Adjusted EBITDA and the Adjusted EBITDA margin along with IFRS Accounting Standards measures enhances the understanding of our operating results and is useful to investors and us in comparing performance with competitors, estimating enterprise value and making investment decisions. Adjusted EBITDA and Adjusted EBITDA margin as used here may not be the same as similarly titled measures reported by competitors. Adjusted EBITDA and Adjusted EBITDA margin should be used in conjunction with IFRS Accounting Standards measures and are not presented as a substitute for cash flows from operations as a measure of our liquidity or as a substitute for net income (loss) as an indicator of our operating performance.

2. Remaining performance obligations, which Telesat refers to as contracted revenue backlog (‘backlog’), represents Telesat’s expected future revenue from existing service contracts (without discounting for present value) including any deferred revenue that Telesat will recognize in the future in respect of cash already received. The calculation of the backlog reflects the revenue recognition policies adopted under IFRS 15. The majority of Telesat’s contracted revenue backlog is generated from contractual agreements for satellite capacity.

3. Includes severance payments and special compensation and benefits for executives and employees.