MDA Space posts 34% revenue jump as satellite maker eyes opportunities in U.S., Europe

Mike Greenley, CEO of MDA Space, said the company has room to grow globally as countries look to shore up their sovereign space capabilities. Photo by HYUNGCHEOL PARK/Postmedia

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MDA Space Ltd. on Friday announced a 34 per cent revenue jump to $499 million in the quarter ended June 30, beating analyst estimates and boosted by higher volumes of work across its satellite, robotics and geointelligence business lines.

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The company’s net income grew nearly 13 per cent to $51.8 million from the same period last year. Adjusted earnings per share (EPS) was $0.36, just beating the forecast of $0.35.

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“We view the results positively, with a revenue beat across all segments, continued strength in profitability (and) a net cash position,” Benoit Poirier, analyst at Desjardins Group, wrote in a note on Friday.

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Poirier said the company’s “impressive” growth strategy was not reflected in its current valuation and that it continues to trade at a major discount to its space tech peers.

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Shares of MDA were trading mostly flat at $48.03 in midday trading in Toronto on Friday.

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The Brampton, Ont.-based company, which designs and makes satellites and robots for space, said that revenue from its core business line of satellite systems surged 44 per cent to $336 million. The increase was helped by an expanded contract with Telesat Corp. to build 27 new satellites for Telesat’s Lightspeed broadband network, an upgrade that was announced this week and adds $474 million to the record-breaking $2.1 billion deal first signed in 2023.

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Revenue from MDA’s robotics and space operations unit jumped 13 per cent in the quarter to $100 million due to additional work on the Canadian Space Agency’s Canadarm3 program. Geointelligence revenue also increased, rising 20 per cent to $63 million, driven by higher volumes of work on new programs including one for the Royal Canadian Navy.

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MDA’s backlog was up eight per cent from the first quarter to reach $4 billion, but down $565 million from the same time last year, with the decrease due to continued conversion of backlog into revenue.

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Analysts forecast more Canadian and global contracts ahead for MDA, particularly with its recent acquisitions. The company has made quick progress on its global push, buying American satellite and spacecraft component maker Blue Canyon Technologies Inc. for $874 million in June and acquiring a majority stake in French satellite and Earth observation tech provider Collecte Localisation Satellites SAS for $920 million in July.

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Both purchases will strengthen MDA’s ability to better compete for American and European defence opportunities, Beacon Securities analyst Russell Stanley wrote in a Tuesday note.

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“With … operations in Canada, the United Kingdom and now Europe … MDA’s multiple inroads to the European Space Agency expand the company’s participation potential in (the agency’s) projects,” Stanley added.

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MDA chief executive Mike Greenley said on an investor’s call Friday that the Blue Canyon acquisition positions the company to access the United States’ US$50 billion defence portfolio, but added that it will take more time to get there.