MDA announced their financial results for the second quarter of 2023. In contrast to the recent downward trend of some other space sector counterparts, MDA saw significant growth.
MDA CEO Mike Greenley said in its investor conference call that “the team delivered another strong quarter in Q2″ and that “…we’re off to a solid start.” According to MDA’s release, their reported second quarter revenues of $196 million were up 26.7% year-over-year, from $154.7M in 2022. Revenues over the last six months were up YoY from $283.1M to $397.9M. Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization) was $40.4M. EBITDA margin was down slightly YoY to 20.6% from 22.4%, which MDA’s release said was “in line with the variance in gross margin year over year.” EBITDA for the past two quarters was $89.3M.
In fact, revenues in all business areas were up YoY. There was a $1M increase in Geointelligence revenue, a $10M increase in Robotics and Space Operations revenue—credited to their work on Canadarm3 for the Lunar Gateway—and a solid $30.5M increase in Satellite Systems revenue.
The company said in its release that it had a “strong operating cash flow” of $38.9M. In the call, Greenley it was “reinvested in the business.” There was also a “healthy backlog” of $1.1B, thanks to what Greenley described as “healthy demand trends, driving expanded opportunity in the space sector.”
In particular, Greenley highlighted the new $2.1 billion contract that MDA signed with Telesat to act as its prime satellite contractor for Telesat’s Lightspeed constellation, which SpaceQ editor-in-chief Marc Boucher called “the single largest contract in its history” in his coverage in SpaceQ last week. Notably, Boucher reported that Telesat has the option of adding 100 more satellites to their order, meaning that the “healthy demand” Greenley pointed to may end up being significantly higher.
Several questions were raised as to Telesat’s financial situation during the call; Greenley replied to these questions by saying that “Telesat’s a strong operating business”, and that MDA “believes in [Telesat’s] funding sources.”
Greenley also highlighted MDA’s agreement with Globalstar to produce 17 LEO satellites to replenish their smartphone-to-satellite constellation, and their work with the American Space Development Agency on their satellites, both which are reflected in these numbers. The Telesat contract, however, was not reflected in these second-quarter numbers.
Greenley said that they have “robust demand” in Geointelligence and Earth Observation. He said they’re seeing significant interest in their upcoming CHORUS Synthetic Aperture Radar(SAR) satellite constellation, which (as described in previous SpaceQ coverage) will employ paired C- and X-band satellites and an orbit that allows for more frequent imaging of the “Canadian core area.”
When asked about the development of CHORUS during the call, Greenley said that they were “a little bit past the midpoint of the spend on CHORUS”, that the “project was doing well and within expectations”, and that they’ll have more news to share soon.
In short, MDA appears strongly positioned for the coming quarters.