MDA Space books $809 million in Q2 orders

MDA Space (TSX: MDA) (NYSE: MDA) reported its Q2 2026 results on Friday, posting revenue of $498.6 million, up 33.6% year-over-year, and for the first time in a year a backlog that grew instead of shrinking. The company raised its full-year financial forecast and detailed how it is paying for its recently announced approximate $2.0 billion in acquisitions using a mix of equity, debt, and cash.

The backlog turns

For the past year MDA Space has been going through its order book faster than it has been refilling it. That is not necessarily a bad thing. Backlog is simply the value of signed work the company has not yet delivered, and converting it into revenue is the point. But it does raise the question of what comes next. When SpaceQ covered the first quarter, backlog had fallen to $3.7 billion from $4.8 billion a year earlier, and the open question was how fast new orders would replace what was being delivered.

The second quarter went the other way. MDA Space booked $808.9 million in new orders while recognizing $498.6 million in revenue, a book-to-bill ratio of 1.6, roughly $1.60 of new work signed for every dollar delivered. Backlog closed at $4.0 billion, up $310 million from March, though still 12% below the $4.6 billion of a year ago.

The orders behind that number were mostly government and defence. The Canadian Space Agency awarded a $688 million follow-on contract for a fourth synthetic aperture radar satellite to join the RADARSAT Constellation Mission, including launch, ground control enhancements and data management. Mitsubishi Electric contracted MDA Space to build the digital payload, antennas and subsystems for Japan’s next-generation defence communications satellite in geostationary orbit with the anti-jamming beamforming payload coming from the company’s UK operation and the antennas from Montreal. BAE Systems selected MDA Space for antennas and antenna control electronics on the U.S. Space Systems Command’s MEO Epoch 2 missile-warning constellation. The U.S. Air Force renewed a contract with MDA’s 49North subsidiary worth up to $43 million through 2031, and OHB issued a pre-authorization to proceed on lunar landing sensors for the European Space Agency’s Argonaut mission.

Not everything went in the same direction. The company did note one slight drag on its numbers: its total new orders were trimmed because the customer scaled back the contract for the River-class Destroyer program, though the company didn’t say by how much

Since the quarter ended, Telesat has expanded MDA Space’s scope on the Lightspeed constellation by 27 MDA Aurora satellites, raising the total contract value by $474 million and bringing the fully funded constellation to 225 spacecraft. The expansion builds on the $2.1 billion contract the two companies signed in 2023, still the largest in MDA Space’s history, and lifts pro forma (an estimates of what the order book looks like today with those post-quarter deals added in) backlog to roughly $4.4 billion. Chief financial officer Guillaume Lavoie told analysts the expansion adds little to 2026 but should contribute “in excess of $150 million” of incremental revenue in each of 2027 and 2028.

Also since quarter-end, Canada’s Defence Investment Agency (DIA) officially funded the Enhanced Satellite Communications Project-Polar (ESCP-P), a major Arctic military satellite communication program, with an initial $2.3 billion contract awarded to Telesat. MDA Space, as the prime for the Telesat Lightspeed constellation was awarded $474 million contract expansion to build 27 more Lightspeed satellites. Separately, but in the same DIS announcement, the government selected MDA Space to act as the prime contractor for the next phase of the project, a medium-Earth orbit (MEO) constellation operating on secure military frequencies, with Telesat as the subcontractor. While the government has chosen MDA Space for this role, the contract is still being negotiated. MDA CEO Mike Greenley teased that this is just the beginning, telling analysts: “There’s still lots to come and then other programs in the future as part of all those programs with a defence industrial strategy that guides Canada to build with Canadian firms in the space domain.”

Two acquisitions, and how they get paid for

The larger story of the quarter sits outside the financial statements. In June MDA Space agreed to buy Blue Canyon Technologies, a Colorado spacecraft and satellite component manufacturer with 18 years of flight heritage and roughly $225 million in annual revenue, three-quarters of it defence. In early July it agreed to acquire a majority interest in Collecte Localisation Satellites (CLS), the Toulouse-based maritime and Earth observation intelligence company, which adds about $465 million in revenue and Greenley said, doubles MDA’s recurring revenue base.

Together the two cost approximately $2 billion. MDA Space financed them with a bought deal of 23 million shares, upsized from 20 million, raising $1.15 billion gross, plus $600 million in senior unsecured notes, with the balance from cash on hand and a term loan. Lavoie said the mix should leave leverage inside the company’s target range of 1.5 to 2.5 times net debt to trailing adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) once both close.

Blue Canyon’s facility security clearance is the strategic point of that deal: it gives MDA Space a route into classified U.S. programs it cannot currently bid. CLS brings a 100-person direct sales network that becomes a distribution channel for MDA CHORUS, the Earth observation constellation the company still expects to launch before the end of this year.

Neither transaction is in guidance. Both remain subject to regulatory approval, with Blue Canyon expected to close in the fourth quarter and CLS between Q4 2026 and Q1 2027. On a pro forma basis including both, Greenley put 2026 revenue at about $2.5 billion against the $1.85 billion midpoint MDA Space is guiding to on its own, and said 2027 should be around 50% higher than what the company reports for 2026, with more than a third of revenue recurring.

Greenley used an unusually long set of prepared remarks to set out what he thinks the company is becoming. “MDA Space is a financially strong industrial company that specializes in space,” he told analysts, describing a business “emerging into a global full spectrum space company” positioned against growth in space, defence, sovereignty and AI. It is a pitch aimed at investors who tend to value space companies on growth rather than on profits, and it leans on what separates MDA Space from most of its listed peers: since returning to the public markets in 2021, the company has been consistently, and increasingly, profitable.

Cash flow went the other way

MDA Space used $93.4 million in cash for operations this quarter, down from a positive $52.8 million last year. This is a normal timing issue: multi-year satellite payments are tied to milestone dates that fall unevenly throughout the year. At the same time, MDA is investing heavily in its future, spending $145 million in the first half of 2026 to double its Montreal satellite factory and design its own space-grade microchips

Even with the cash outflow, MDA’s balance sheet is in good shape. Backed by its March U.S. IPO, the company ended the quarter with $152.8 million in net cash, completely erasing the $120 million in debt it carried at the end of last year. In total, MDA has $1.1 billion in liquidity and available credit, not counting the $1.75 billion raised in August to fund its upcoming acquisitions

While overall profits grew slightly to $27.9 million, profit-per-share fell nearly 10% to $0.20. This dip is purely paper math: the March IPO added millions of new shares to the market, spreading the profit a bit thinner. Adjusted earnings per share held flat at $0.36. Finally, profit margins dipped slightly to 19.3% because MDA intentionally increased business spending by 51% (to $45.1 million) and doubled R&D (to $13.0 million) to scale up for its massive backlogs

Guidance narrowed upward

MDA Space now expects 2026 revenue of $1.8 billion to $1.9 billion, up from $1.7 billion to $1.9 billion, implying roughly 13% growth at the midpoint against 10% previously. Adjusted EBITDA guidance moved to $330 million to $370 million from $320 million to $370 million. Adjusted EBITDA margin of 18% to 20%, capital expenditures of $225 million to $275 million and neutral-to-negative free cash flow were all reaffirmed.

The midpoint implies second-half revenue growth of only about 2%. Asked by an analyst whether that reflected capacity limits, Lavoie said: “absolutely no capacity issues of any kind.” He pointed instead to the Globalstar next-generation LEO constellation moving from component deliveries into a testing phase, and cautioned that the second half should not be read as a run rate for 2027.

On the robotics side, the company said the Canadian Space Agency has confirmed plans to repurpose Canadarm3 investments toward the lunar surface under Artemis, with teams continuing to work within the same financial scope and timelines while the contractual framework is settled.

Separately on Friday, MDA Space appointed two directors: John Farrell, executive vice-president and chief operating officer of Magna International, and Stephen Spengler, the former chief executive of Intelsat, who joins the audit committee. Greenley welcomed the additions, stating that their deep manufacturing and telecommunications expertise will “sharpen how we operate and achieve our mission” as the company continues to rapidly scale up its global footprint

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