Eutelsat executives told investors that the company’s first half of fiscal 2025-2026 was “pivotal,” highlighting rapid growth in low Earth orbit (LEO) connectivity revenues, progress on refinancing, and steps to ensure continuity of the OneWeb constellation. Management said first-half performance was in line with expectations and reiterated full-year objectives.
First-half results: LEO growth offsets pressure in Video
CEO Jean-François Fallacher said operating verticals were “almost stable” in the first half, with LEO revenues up nearly 60% and rising across all three connectivity verticals. Total revenue for the semester was EUR 592 million, which Fallacher described as stable on a like-for-like basis and down 2.4% on a reported basis. Revenues from the four operating verticals were EUR 574 million, down 0.6% like-for-like, excluding a EUR 20 million negative currency impact.
- Video: EUR 266 million, down 12% (46% of revenue)
- Fixed Connectivity: up 17% (23% of revenue)
- Government Services: up 8% (17% of revenue)
- Mobility: up 8.5% (13% of revenue)
“Other revenues” were EUR 18 million, reflecting revenue recognition related to the IRIS² project and an EUR 8 million positive impact from hedging operations, Fallacher said.
Video revenue declined 12.3% to EUR 260 million, which the company attributed to further sanctions imposed on Russia. Fallacher said the sanctions impact was expected to be about EUR 16 million for full-year 2025-2026, on top of underlying trends in what he described as a mature business. Despite the pressure, management pointed to renewals including beIN for DTH distribution across the MENA region at the 7/8 degrees west neighborhood, and a multi-year, multi-transponder renewal with Polsat at HOTBIRD.
Connectivity: Strong LEO momentum, mixed GEO trends
Eutelsat’s total connectivity revenues were EUR 307 million, up 11.8% in the first half. Within that, GEO connectivity revenues were EUR 196.8 million, down 4.5%, while LEO revenues rose nearly 60% to EUR 110.5 million, more than offsetting the GEO decline.
In the second quarter, connectivity revenue was EUR 157.9 million, up 15% year-on-year and 5.8% quarter-on-quarter. LEO revenues were up 50% to EUR 56.4 million, while GEO revenues were described as stable at EUR 101.5 million.
Fixed Connectivity revenue totaled EUR 132 million, up 17.2%, driven by growth in connectivity solutions and a one-off circa EUR 7 million impact from upfront revenue recognition related to a GEO capacity contract. Commercially, management cited an LEO distribution agreement with MSTelcom in Angola and a multi-million, multi-year agreement with Paratus across Southern Africa.
Government Services revenues were EUR 99 million, up 7.7%, reflecting growth in LEO-enabled solutions including services delivered in Ukraine and increased demand from other governments. Second-quarter government revenue was EUR 46 million, down 2.2%, which management attributed to softer revenues from the U.S. and lower terminal sales in Q2 versus Q1. On the call, executives referenced support for the Indian Army’s relief operations with Airtel and the approval of the first military-grade OneWeb “Manpack” terminal developed with Intelligent Technologies.
Mobility revenue was EUR 77 million, up 8.5%, reflecting activation of contracts with aero mobility customers. Eutelsat said it had “almost 600” certified antenna installations on planes, with a backlog of over 1,500 aircraft, compared with 100 certified antennas and a backlog of 1,000 a year earlier. Second-quarter mobility revenue was EUR 42 million, up 34% year-on-year and 21% quarter-on-quarter. The company also pointed to a multi-year maritime deal involving CMA CGM Group, closed with Marlink, and a rail passenger Wi-Fi agreement with Transgabonais in partnership with Airtel Gabon.
Profitability, net loss improvement, and a lower CapEx outlook
New CFO Sébastien Rouge said adjusted EBITDA was EUR 308 million for the half year, down from EUR 335 million a year earlier (down 6.1% like-for-like). Operating costs were EUR 283 million, up EUR 12 million, reflecting higher cost of goods sold associated with the LEO business. Adjusted EBITDA margin was 52.1%, down from 55.2% a year earlier, driven by sanction-related Video losses and the product mix effect from ramping LEO revenues.
The net result was a loss of EUR 236 million, sharply reduced from a loss of EUR 873 million a year earlier. Rouge said the prior year period included EUR 650 million of goodwill and satellite impairments. He also noted lower depreciation and amortization at EUR 357 million versus 434 million previously, reflecting the end of amortization of certain intangible assets, as well as a favorable currency impact.
Gross CapEx was EUR 292 million for the half year, up from 175 million, which Rouge said reflected the timing of key LEO milestones and should not be extrapolated. The company revised its full-year gross CapEx expectation to around EUR 900 million, from a prior range of EUR 1.0 billion to EUR 1.1 billion, citing phasing of LEO programs and increased vigilance on GEO spending. Eutelsat also canceled procurement of the “FlexSat Americas” GEO satellite after reviewing its business case, which management said will deliver future CapEx savings of over EUR 100 million.
Refinancing progress, ECA financing, and the ground segment deal
Fallacher highlighted a EUR 1.5 billion capital raise completed in December, which he said was followed by rating upgrades from Moody’s (to Ba3) and Fitch (to BB, stable outlook). Eutelsat also announced it had secured almost EUR 1 billion in export credit agency (ECA) financing, and management said it intends to build on improved financial fundamentals to refinance upcoming bond maturities.
Rouge reported net debt of EUR 1.3 billion at December 31, 2025, down EUR 1.3 billion versus the end of June 2025 due to the capital increase proceeds. Net debt to adjusted EBITDA was 2.0x versus 3.9x at the end of June, though Rouge cautioned leverage would rise by year-end due to second-half CapEx phasing. Average cost of debt after hedging was 4.2%, down from 4.8% in the prior year’s first half, and total liquidity (cash plus undrawn credit lines) was about EUR 2.1 billion.
Management also addressed the halted disposal of its passive ground segment asset, saying the transaction did not proceed because conditions precedent—specifically approval of the French state—were not met. Fallacher said the non-completion does not affect the company’s ability to fund its strategy, but it does change year-end net debt to EBITDA expectations to around 2.7x from 2.5x previously. He added the impact on EBITDA margin is positive by up to “roughly 5 points,” as the company will not pay planned leases of about EUR 75 million to EUR 80 million per year to the acquirer.
OneWeb continuity, IRIS² work, and Q&A takeaways
Fallacher said Eutelsat has procured 341 OneWeb satellites on top of a prior order of 100, bringing the total to 440, with technology enhancements intended to ensure operational continuity as early satellite batches reach end of life. He also said the satellites may support hosted payloads, which could open new business opportunities. Eutelsat signed a multi-launch agreement starting in 2027 with MaiaSpace, a French launcher, to diversify access to space.
On IRIS², management said the company has been working with suppliers through calendar 2025 to solidify the constellation plan and is entering a “rendezvous one” phase with the European Commission during the current semester, described as a key period to finalize consortium commitments.
During Q&A, executives said the second-quarter softness in Government Services was influenced by mix effects, as Q4 of the prior year and Q1 of the current year had higher equipment sales. Management also pointed to strong progress in aviation, noting distributor momentum as global coverage improved. On refinancing, Rouge said a bond issuance to refinance near-term maturities is being prepared and is “clearly on the radar,” while the company is also reviewing the 9.75% bond as a candidate for early redemption.
Separately, management said U.S. Department of Defense revenues are now “less than 50%” of the Government Services mix and are expected to keep declining as business grows with other governments, including via the French defense framework agreement. On GEO strategy, Fallacher said Eutelsat still has a GEO satellite project with Thaicom in Asia and expects future GEO investment for Video over the longer term, though not in the near term.
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