or better … The Art of Calling a 30% Drop “Strong Progress”

Telesat has just delivered a masterclass in corporate optimism. Revenue in the second quarter fell from $152 million to $106 million, but the CEO is “pleased with our performance” and touting “disciplined execution.” That’s one way of describing a third of your top line vanishing.

The magic phrase “Lightspeed backlog” appears like a life raft in a storm, set at over $1 billion. What isn’t said loudly is that backlog means future contracts, not cash now, and those contracts will trickle in over years while costs are sprinting ahead today.

The GEO business, once the reliable breadwinner, is in open decline. Price cuts on renewed contracts, shrinking demand from direct-to-home TV, and an Indonesian broadband program winding down have all taken bites out of revenue. LEO consulting revenue is also down, because apparently even the side gigs aren’t covering the rent anymore.

Margins tell the real story. Adjusted EBITDA margin has fallen from 67.8% to 55.3% in just one year. The drop is disguised by conveniently capitalizing more engineering costs and cutting consulting expenses, less “operational efficiency” and more “moving the furniture around the living room to make it look bigger.” Net income is down to $76 million from $129 million, cushioned by a huge foreign exchange gain. Without that FX tailwind, it would be a rougher read.

The balance sheet shows $547 million in cash, which sounds comforting until you notice trade receivables have collapsed from $159 million to $51 million. That’s either customers paying unusually fast or fewer customers to bill in the first place. Meanwhile, capital expenditures are expected to reach up to $1.1 billion this year, almost entirely for Lightspeed. That’s like maxing out every credit card in the hope that a startup gamble pays off before the bills arrive.

The partnership with Viasat is played up as a major win. In reality, Viasat is still digesting its Inmarsat acquisition and has its own financial balancing act to manage. Conveniently absent from the conversation are the names Starlink, Amazon Kuiper, and OneWeb, all players already selling what Telesat is still building. If you don’t acknowledge them, maybe investors will pretend they aren’t there either.

What this earnings release does best is frame a structural decline as a strategic transition. The revenue fall is reframed as a short-term adjustment, the backlog is treated like a bank account, and the enormous capex burn is pitched as an inevitable investment in the future.

The numbers tell you a business under pressure.
The language tells you to relax.
Whether Lightspeed arrives in time is the question hanging over every line.