Via Satellite’s financial quarterly wrap-up condenses all of our quarterly reporting of publicly traded companies into one convenient location, with additional insight and analysis for our premium subscribers.  

Fourth Quarter 2020 Overview

We’re certainly ordering and building satellites! We’re just not launching them on time! That’s mostly thanks to COVID-19 health restrictions and the pandemic’s overall impact on the speed of the global supply chain. But, there are other issues lingering beyond COVID that could continue to make things difficult for time-sensitive satellite operators. This is especially true for those with big GEO satellites waiting in the hangar.

Let’s start with the good news. Year-over-Year comparisons still really don’t matter. COVID still soaks up blame like a sponge.

Satellite manufacturers, overall, had a very good year in 2020. Customers (mostly the U.S. government) are still ordering satellites and payloads. Nearly all of the major manufacturers reported a significant increase in order intake, sales, or both! Even Boeing’s Defense, Space & Security division (which I’m sure has forbidden mentioning the 737 MAX jet by name) brought in a 14% YoY increase in revenue. Big contracts are still being awarded and satellites are still being ordered.

The satellite industry is also making big plans for the years ahead. Telesat awarded its big Lightspeed LEO constellation prime contract to Thales Alenia Space. Viasat, too, is signaling its intent to compete with SpaceX Starlink in the LEO market. Hughes and its fellow investors in OneWeb are investing in the future growth of its own LEO systems. Operators are also acquiring new technologies and services through partnerships and acquisitions. All of these moves signal confidence that the COVID economic slowdown will come to an end sooner, rather than later.

The satellite industry’s 2020 Fourth Quarter (Q4) results also revealed a stunning amount of major satellite delays. Five GEO satellites from the world’s largest satellite operators were pushed back. Four of these satellites — Hughes’ Jupiter 3, Viasat‘s Viasat-3, and Eutelsat‘s HOTBIRD 13G and KONNECT VHTS — were pushed way back in 2022.

Launch delays have always been an issue for GEO operators. In addition to COVID-19, a skyrocketing demand for constellation satellite launches and rideshares reduces supply and availability. That demand is only going to increase during the next few years. SpaceX, which is currently the world’s most prolific launcher, now builds and launches its own Starlink constellation satellites. It should surprise no one that the company will prioritize its own deadlines over a potential competitor.

Even big government satellites, which take forever to build, but are usually quicker to launch once ready, are experiencing longer delays. Arianespace’s launch of the United Arab Emirates’ Armed Forces’ FalconEye satellite was delayed for several months before its launch in December. United Launch Alliance‘s Atlas V 531 mission also launched after several delays.

We haven’t even started calculating how space congestion and debris could also create delays.

These trends suggest that we may see the full financial impact of COVID-19 in late 2021 financial results. Revenue from delayed satellites will be missing. This could be offset by increased government investments (rural broadband, 5G, infrastructure), a snapback of demand for mobile connectivity, and C-band 5G reallocation payments for those who meet the FCC‘s deadlines. Hopefully, the satellites that Intelsat and SES ordered to move customers off this C-band supply will launch on time!

-by Jeffrey Hill

Operators (in alphabetical order): 

EchoStar / Hughes — Hughes Jupiter 3 Launch Slips to Second Half 2022

• Second consecutive delay for Jupiter 3 due to COVID restrictions. The satellite was originally scheduled to launch in early 2021.
• A pair Tyvak-built S-band nanosatellites launched by EchoStar in Q3 experienced an anomaly related to the propulsion system.
• Hughes’ subscriber growth streak comes to an end, with 1,564,000 total broadband subscribers at the end of 2020 (down 16,000 from the prior quarter).
• FY 2020 revenues of $1.89 billion, nearly unchanged from 2019.
• Narrowed its FY net loss to $51.9 million, compared to $74.3 million in 2019.

Eutelsat (Q2) — Eutelsat Sees Revenue Take Slight Dip in H1, Pushes Back 3 Satellite Launches

• Three satellite launches pushed back: QUANTUM to Q2 of 2021; HOTBIRD 13G to H1 of 2022; KONNECT VHTS to H1 2022.
• H1 revenues were 628.5 million euros ($762.2 million), a 1.3% decrease YoY. Profits of 137.4 million euros, a 2.3% YoY decrease.
• H1 Mobile Connectivity revenues dropped 17.9% YoY to 33.9 million euros ($41.1 million). Broadcast revenues were flat.
• Raised the low end of its full year revenue objective to between 1.19 billion euros and 1.22 billion euros ($1.44 billion – $1.48 billion).
• Performance was largely in line with analysts’ expectations.

Intelsat — Did not report its 4Q and FY results at the time this was written. We will add these figures once published.

Iridium — Iridium Reports Record Revenue in 2020, Initiates Share Buyback

• Generated a record FY revenue of $583.4 million in 2020.
• $146.5 million in Q4 revenue, a 5% YoY increase. Net loss was $7.9 million for Q4 2020, compared to net loss of $107.9 million for Q4 2019.
• Ended the quarter with 1,476,000 total billable subscribers, a growth of 14% YoY.
• Commercial Internet of Things (IoT) subscriptions grew 20% in Q4 2020 compared to Q4 2019, to 962,000 customers.
• Initiated a $300 million share repurchase program to reward shareholders.

SES — SES Revenue Slips 3% in 2020, but Networks Growth on Horizon 

• SES Networks’ business reached 759 million euros ($922.4 million) in FY 2020 revenues, marking 5% YoY growth and 27% growth since 2017.
• The Video business continued its expected decline – down 8% YoY to 2019 at 1.1 billion euros ($1.34 billion)
• CEO Steve Collar: “[2021] will see us realize the first $1 billion from C-band repurposing.”
• Backlog of $740 million for SES-17 and O3b mPOWER ahead of launch in the second half of 2021.
• Extended its capacity agreement with Sky UK adding $109.4 million in secured backlog.

Telesat — Telesat Reports Full-Year Revenue Decline, Forecasts $356B Addressable Market with Lightspeed  

• Finally made the Lightspeed LEO constellation announcement! Thales Alenia Space will be prime contractor for $5 billion project.
• Reported consolidated revenue of $820 million Canadian dollars ($648 million) — A 10% YoY decline.
• Much of the decline was due to the non-renewal of North American Direct-to-Home (DTH) customer Shaw Direct.
• Net income for the year was CA$246 million ($194 million) compared to net income of CA$187 million ($148 million) for 2019.
• Backlog CA$2.7 billion ($2.1 billion), and fleet utilization 81%.

Viasat (Q3) — Viasat Pushes ViaSat-3 Satellite Launch to 2022

• Pushed back the launch of its first ViaSat-3 satellite from 2021 to early 2022.
• Reported 596,000 subscribers, down from 603,000 at the end of the prior quarter.
• Generated $576 million in revenue in Q3 2021, a 2% decrease from the same quarter in 2020, but up from $554 million in the previous quarter.
• Government Systems revenue down 9% YoY, Satellite Services revenue up 4% YoY, Commercial Networks review up 6% YoY.
• Reached an agreement to acquire RigNet, and the remainder of the wholesale broadband joint venture in Europe.
• Entered into a service broadband partnership with SKY Brasil and an deal with Delta Air Lines.

Manufacturers:

Airbus Defence and Space — Airbus Defence and Space Order Intake Gain in 2020 a Bright Spot in Tough Year

• Defence and Space reported 10.5 billion euros ($12.7 billion) of revenue for 2020, down 4% from 2019.
• Defence and Space net order intake in 2020 reached 11.9 billion euro ($14.4 billion), a 39% increase from 2019.
• Most of the order intake, however, was from major contract wins with military aircraft.
• Overall company sets 2021 targets: EBIT Adjusted of 2 billion euros; and breakeven free cash flow by end of year.

Boeing Defense, Space & Security —Boeing’s Space Business Delivers the Only Good News in a Grim FY 2020 Report

• Boeing Defense, Space & Security was the only division to post a 2020 Q4 revenue increase (14% YoY).
• Completed design review for Wideband Global SATCOM-11+ (WGS) and the upper stage for NASA‘s Space Launch System.
• Segment backlog at end of FY 2020 was $61 billion, with 32% of that total from customers outside of the United States.
• The entire Boeing company continues to feel the drag from its 737 MAX aircraft issues. The overall company lost $11.9 billion in 2020.

L3Harris — L3Harris Sees Boost In FY 2020 from Post-Merger Gains

• Space and Airborne Systems reported $1.3 billion in revenue for Q4 — mostly from airborne systems.
• Significant space awards: $100 million for classified imaging payloads and a $137 million award for digital navigation payloads on GPS III vehicles 13 to 16.
• Space and Airborne Systems: $4.9 billion in FY revenue, up 14% from 2019, primarily due to the post-merger inclusion of L3 operations in the results.
• Communications Systems reported $4.4 billion in sales, a 33% increase over 2019 due to the post-merger inclusion of L3 operations in results.

Lockheed Martin — Lockheed Martin Space Sales See Double-Digit Boost in Q4 

• Increased Space Segment sales streak continues – $401 million in net Space sales in Q4 of 2020 — a 14% increase over Q4 2019.
• FY Space net sales were $11.9 billion — a 9% increase over 2019.
• Equity earnings from United Launch Alliance (ULA) were $135 million for 2020, compared to $145 million in 2019.
• Operating profit decreased in 2020 by about $42 million, or 4% compared to 2019.
• Government satellite programs, including Next Gen OPIR, continue to drive growth.

Maxar Technologies — Maxar Boosts Revenue and Backlog in 2020

• Reports its third consecutive quarter of revenue growth — from $410 million in Q4 2019 to $467 million in Q4 2020. (FY revenues up 3% YoY)
• Minor offsets: Space Infrastructure segment FY revenues are up $15 million, while Earth Intelligence segment FY revenues are down $4 million.
• Ends 2020 with a total order backlog of $1.9 billion — a 17% YoY increase from 2019.
• Acquired licensing rights to IP at recently acquired Vricon for consumer and commercial markets, which increased Maxar’s long-term growth outlook.

Northrop Grumman Space Systems — Northrop Grumman Space Systems Sees Biggest Boost in Strong FY 20 

• Space Systems leads company in Q4 sales with $2.6 billion — a 31% increase over the same quarter in 2019. FY sales were $8.7 billion — an 18% increase over 2019.
• Space sales were driven by higher volume on restricted programs and the Next Gen Overhead Persistent Infrared (OPIR) and NASA Artemis programs.
• Received $9 billion in restricted programs awards, and $1.9 billion for Next Gen OPIR awards in 2020.
• Operating income increased to $794 million in 2020, a 12% increase over 2019.
• Reported backlog of $81 billion, including $0.4 billion for Commercial Resupply Service Extension missions.

Compare these results with our Third Quarter 2020 Wrap-up: A Tough, But Not Terrible Quarter

Other Items of Interest:

Gogo — Gogo’s In-Flight Business Begins to Bounce Back from a Brutal Year

• In-Flight Connectivity revenues are trickling back! Gogo sees a 17% revenue increase between Q3 and Q4 2020.
• Gogo completed the sale of its commercial aviation business to Intelsat for $400 million in December.
• CFO Barry Rowan said sale to Intelsat provided significant financial relief and lowered the company’s net debt level.
• 2020 FY service revenues only dropped 4% compared to 2019.

RigNet (*about to be acquired by Viasat)— RigNet Continues to Feel the Pain of a Weak Energy Sector in FY2020 Results

• FY2020 revenues decrease 14.4% compared to 2019, with 4Q revenue decreasing $17.0 million, or 26.6% YoY.
• Losses were mostly due to oil and gas rig-stacking, which decreases the total number of rigs RigNet has to service, as well as non-recurring service installation revenue from LTE network expansions in the Gulf of Mexico.
• Some signs of life and small growth in its Apps & IoT (Intelie subsidiary) and Systems Integration (SI) businesses.
• Viasat reached an agreement to acquire RigNet in December. The takeover is expected to close mid-2021.

SPACs — There could be a lot more companies on this list very soon!

• Rocket Lab sets $4.1 billion valuation at 5.4 times 2025 expected revenue of $749 million.
• Spire Global sets $1.6 billion valuation at 5.4 times 2023 expected revenue of $227 million.
• BlackSky sets $1.1 billion valuation, forecasts $546 million in revenue in 2025.
• Astra sets $2.1 billion valuation at 3.1 times 2025 expected adjusted EBITDA of $649 million.
• AST SpaceMobile sets $1.4 billion valuation at 1.4 times 2024 expected EBITDA of $1 billion.
• Momentus sets $1.2 billion valuation, at expected EBITDA in 2025. Founding CEO Mikhail Kokorich later resigned over regulatory concerns over the deal.
• SpaceX‘s Elon Musk: Starlink going public? Not until we make money.