Defense Momentum Grows;  Multi-Billion ESCaPe Hatch on the Horizon?
 
Topline erosion. Q1 revenue declined 25% to $87M, pressured by broadcast contract expirations on Nimiq 4 and Anik F3, lower renewal rates on Nimiq 5. Enterprise weakness (-14% y/y) was partly offset by aviation contribution, likely tied to a temp capacity bridge agreement with Panasonic Avionics.
Profit pressure. Q1 AEBITDA halved to $35M as GEO weakness and $7M of refinancing costs weighed on earnings. Opex remained broadly flat despite the 25% revenue decline, highlighting negative operating leverage. Margins compressed 17 pp to 40.4%- lowest in five years.
Backlogs remained flat at $1.9B, though management highlighted rising government interest following the integration of military Ka-band capacity into Lightspeed. Early response from defense customers is positive.