Eutelsat reported full-year 2025/2026 revenue of €1.24 billion, down 0.6% on a reported basis but up 3% like-for-like, as rapid growth in low-Earth-orbit, or LEO, connectivity services helped offset continued declines in its legacy video business.
Chief Executive Officer Jean-François Fallacher said LEO revenue increased nearly 70% year over year to €297 million, exceeding the company’s expectations. LEO now represents 25% of group revenue and more than 40% of connectivity revenue, he said.
Connectivity Growth Offsets Video Decline
Revenue from Eutelsat’s four operating verticals totaled €1.20 billion, increasing 1.8% on a like-for-like basis. The company’s connectivity business generated €677.9 million in revenue, up 9.7% on a reported basis and 16.4% like-for-like.
- Video: Revenue fell 13.1% to €519 million, representing 43% of group revenue. Fallacher attributed the decline to underlying market conditions, sanctions affecting Russian channels, and the termination of capacity contracts on the Express-81 and Express-82 satellites.
- Fixed connectivity: Revenue rose 15.6% to €270 million, supported by LEO-enabled services, partly offset by more challenging conditions for GEO-enabled offerings.
- Government services: Revenue increased 17.7% to €235.5 million, aided by revenue recognition tied to the CENTAURE call-off contract under France’s NEXUS framework and services delivered in Ukraine through the LEO constellation.
- Mobile connectivity: Revenue advanced 15.9% to €172 million, led by aviation connectivity across LEO and GEO services. Maritime LEO growth was partly offset by softer GEO maritime trends.
Fourth-quarter connectivity revenue rose 24.7% like-for-like and 30% sequentially to €214.9 million. The company said this included catch-up revenue recognition related to the NEXUS framework agreement with the French Ministry of the Armed Forces.
Fallacher cautioned that the fourth-quarter government-services contribution from CENTAURE was exceptional because it included recognition for usage earlier in the year after the contract was signed in June.
Profitability and Investment Spending
Adjusted EBITDA was €632 million for the year ended June 30, compared with €666 million a year earlier. The figure declined 6.5% on a reported basis and 3.1% like-for-like. The adjusted EBITDA margin declined to 51.2% from 54.4%.
Chief Financial Officer Sébastien Rouge said operating expenses rose €36 million to €604 million, mainly due to higher costs of goods sold for the LEO business. He said the group remains in a transition period in which LEO services are less profitable than its established GEO operations because of customer-acquisition and equipment costs.
The group reported a net loss attributable to shareholders of €457 million, improving from a €1.1 billion loss in the preceding year. Rouge said the improvement reflected lower other operating expenses, although the year still included €720 million in goodwill and satellite impairments. Net financial expense rose to €232 million from €201 million, primarily because of higher interest costs.
Capital expenditure totaled €594 million, compared with €450 million in the prior year and below Eutelsat’s earlier expectation of €900 million. Rouge said the lower spending reflected changes in project milestone timing and controls on GEO and ground-related investment. He added that the lower figure should not be extrapolated, as fiscal 2026/2027 capital expenditure is expected to be about €1.2 billion.
Eutelsat reaffirmed plans for approximately €4 billion in cumulative capital expenditure between fiscal 2026 and fiscal 2029, covering OneWeb constellation replenishment and early IRIS² investment. Net debt stood at €1.46 billion as of June 30, down €1.2 billion from a year earlier, while net debt to EBITDA improved to 2.32 times from 3.9 times.
Defense Contract, IRIS² and FCC Payment
The company highlighted a €350 million, eight-year CENTAURE call-off contract with France’s defense procurement agency under the NEXUS framework. The agreement includes a firm commitment of €138 million over its first four years and provides secure LEO connectivity for the French armed forces.
Fallacher said the contract bridges the period before deployment of Europe’s IRIS² sovereign connectivity program. During the presentation, he said the European Commission had communicated the closure of IRIS²’s first “Rendez-vous 1” milestone, allowing the SpaceRISE consortium to move from project design into an operational phase involving contracts with key subcontractors.
The CEO said IRIS² will include a multi-orbit LEO and MEO constellation, inter-satellite links and 5G non-terrestrial-network technology. Eutelsat expects its existing OneWeb constellation to remain operational through 2034, with commercial customers beginning to migrate to IRIS² capacity from mid-2032.
Eutelsat also expects to receive a pre-tax incentive payment of $504 million, or €443 million, in 2031 following the U.S. Federal Communications Commission’s upper C-band transition order. Costs related to the transition are eligible for reimbursement separately, the company said.
Outlook
For the fiscal year ending June 2027, Eutelsat expects LEO revenue growth of more than 30%. The company said that growth should offset further declines in GEO revenue, particularly video, resulting in slight growth in revenue across its four operating verticals and an EBITDA margin broadly stable from the 2025/2026 level.
Eutelsat maintained its fiscal 2029 revenue target of €1.5 billion to €1.7 billion and expects adjusted EBITDA margin to exceed 60% by that point. Fallacher said video revenue is expected to face another difficult year in fiscal 2027 before its rate of decline moderates in fiscal 2028.
The group’s backlog stood at €3.4 billion at June 30, compared with €3.5 billion a year earlier. Connectivity accounted for 61% of backlog, up from 57%, although Eutelsat noted that LEO contracts generally have shorter durations than legacy GEO agreements and that pay-as-you-go LEO arrangements are not included in backlog.
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