Christopher Quilty

Chris Quilty of Quilty Space asked if government satellite inclination requirements are complementary to the commercial constellation or if separate orbits are needed. He also inquired if U.S. government contracts preclude deals with other Five Eyes nations and if a government-specific satellite block was being considered.

Answer

Founder, Chairman & CEO Abel Avellan stated there is significant interest in dual-use of the satellites but could not comment on specific orbits. He confirmed there is no exclusion from working with Five Eyes nations, though the current focus is the U.S. He also noted that government capabilities are already designed into the current satellites, with necessary features incorporated over a year ago.

Christopher Quilty of Quilty Space followed up on the operational status of the first Block 2 satellite, the transition to ASICs, the composition of the H2 revenue guidance, and the profitability of gateway sales.

Answer

CEO Abel Avellan confirmed the first Block 2 satellite is a fully operational production unit, not a pathfinder, and that the initial batches use FPGAs before a shift to ASICs. Executive Scott Wisniewski detailed that the H2 revenue guidance is a balance of milestone-based government contracts and commercial revenue from gateways and initial service. CFO Andy Johnson clarified that gateways are sold at a low margin, not as a loss leader, and that the quarterly guidance has potential upside.

Christopher Quilty of Quilty Space sought clarification on whether the potential 'hundreds of millions' in government revenue would be from hardware or services. He also asked if the government would require a bespoke ground system or could use existing infrastructure.

Answer

Executive Scott Wisniewski clarified that the revenue figure represents a long-term potential for what would be primarily services contracts, stemming from the four contract awards to date. Chairman and CEO Abel Avellan added that the U.S. ground infrastructure is largely built and that the government has been testing and using their satellites via a dual-use setup, sharing the commercial infrastructure for government applications.

Chris Quilty requested a long-term update on the plans for the Hughes business, specifically addressing downturns in VSAT and consumer broadband, growth in IFC, and potential organic or non-organic growth strategies, including key market focuses.

Answer

Hamid Akhavan, President and CEO of EchoStar Capital, detailed Hughes' multi-year transition from a consumer to an enterprise-focused business, expecting enterprise revenue to exceed 50% next year. He highlighted significant progress in areas like aero and Hughes' position as a Gartner Leader Quadrant company. Akhavan also mentioned that EchoStar Capital would seek M&A opportunities in domains like aero, space, enterprise services, defense, and domestic manufacturing to enhance Hughes' position.

Chris Quilty requested a long-term update on Hughes' plans, addressing downturns in VSAT and consumer broadband, growth in IFC, and potential organic or inorganic growth strategies in specific focused markets.

Answer

Hamid Akhavan, President and CEO of EchoStar Capital, detailed Hughes' multi-year transition from a consumer to an enterprise-focused business, aiming for over 50% enterprise revenue next year. He highlighted significant progress in aero and Hughes' leadership in the Gartner Leader Quadrant for its industry. He also mentioned that EchoStar Capital would seek M&A opportunities in domains like aero, space, enterprise services, defense, and domestic manufacturing to enhance Hughes' position.

Christopher Quilty asked why EchoStar opted not to join the ViaSat-led MSSA spectrum-pooling initiative and inquired about the go-to-market strategy for its direct-to-device technology, particularly how it plans to achieve chipset adoption where others have failed.

Answer

President and CEO Hamid Akhavan stated that EchoStar has no need to join the MSSA as it possesses adequate, globally available S-band spectrum rights of its own. For direct-to-device, he explained the strategy is to adhere strictly to 3GPP standards (5G Release 17/18), which allows chipset makers to leverage the scale and economics of the mainstream mobile industry, making adoption more logical and economically viable than a proprietary approach.

Chris Quilty asked about the scale of the T-Mobile D2D announcement, specifically the volume of units and penetration needed for the market. He also inquired about Iridium's long-term go-to-market approach for PNT, the revenue opportunity mix (service/license vs. hardware), why the UAV market isn't booming, and Iridium's view on the Viasat and Space42 Equatys joint venture.

Answer

CEO Matt Desch clarified that the T-Mobile contract demonstrated PNT's value for macro base stations, with potential for deployment to thousands of cell sites and adoption by other companies, indicating a big market. For PNT, Iridium will not go direct but will expand the market through new technology and partners integrating solutions. He confirmed a hardware component for PNT, but the primary goal is global service revenue. Mr. Desch noted UAV market growth is primarily in IoT, with PNT becoming important, and expansion tied to emerging BVLOS regulations. Regarding Equatys, he found it a complicated vision, not interested in investing, and views the broadband D2D market as uncertain, preferring to observe its development.

Chris Quilty of Quilty Analytics asked if new Certus mid-band products would contribute to IoT growth in the second half. He also inquired about the PNT customer acquisition model, the expected revenue split between commercial and government PNT users, and the reason for the decline in government voice subscribers.

Answer

CEO Matthew Desch confirmed that new Certus products are part of the expected H2 IoT growth. For PNT, he described an evolving pricing model and a customer adoption cycle that starts with trials before scaling, noting the government could be at least half of the PNT business. He attributed the government voice subscriber decline to an internal billing transition between DISA and the Space Force, clarifying it doesn't reflect the service's strategic value.

Christopher Quilty from Quilty Space asked about the margin profile shift in engineering contracts from build-out to service, the company's high inventory levels, the long-term impact of NTN Direct on the hardware business model, and opportunities to accelerate adoption of new maritime and aero safety services.

Answer

CEO Matt Desch explained that engineering margins are fixed and consistent, regardless of the shift from build-out to service. CFO Vince O'Neill noted that existing inventory helps mitigate near-term tariff impacts. Matt Desch added that while NTN Direct will reduce hardware revenue over time, this aligns with their strategy of using low-margin hardware to drive high-margin service revenue. He also hinted at early-stage ideas to accelerate safety service adoption but declined to provide public details yet.

Christopher Quilty of Quilty Space inquired about the maritime market, asking if Starlink's growth is creating new backup service opportunities for Iridium. He also asked about the 2025 growth drivers for the commercial voice business and the status of securing the FAA as a customer for Aireon.

Answer

CEO Matt Desch explained that Starlink could be expanding the total addressable market for maritime connectivity, and Iridium's GMDSS service is also expanding to smaller vessels. He identified push-to-talk as the primary driver for the seasonal voice business. Regarding Aireon, he noted renewed interest from the U.S. government in modernizing air traffic control, which could create new opportunities with the FAA.

Chris Quilty asked about the timing of aviation safety service certification and partner product releases. He also questioned the maritime market dynamics for GMDSS given the rise of LEO competitors like Starlink and sought an explanation for the sequential change in maritime Certus subscribers and ARPU.

Answer

CEO Matt Desch confirmed aviation certification is on track for this year, with partner products starting to be advertised and installations expected in 2025. He positioned Iridium Certus as the preferred companion service for maritime, even for Starlink users, due to its reliability and new integrated GMDSS terminals. CFO Tom Fitzpatrick attributed the maritime subscriber and ARPU dynamics to channel instability during a market transition, combined with seasonality.

Chris Quilty of Quilty Space asked about the Stellar Blue order pipeline, particularly with Panasonic, the impact of the SES/Intelsat merger on order flow, dynamics in the cellular backhaul market, the pricing and margin impact of the virtualized SkyEdge Four platform, and progress on the WaveStream NGSO order.

Answer

CEO Adi Sfadia stated that certification with Panasonic is nearly complete and orders are expected soon. He acknowledged a slowdown in cellular backhaul but highlighted the virtual platform's agility, with a significant margin impact expected around 2027. CFO Gil Benyamini confirmed software-only pricing is similar to the hardware model but with superior margins. Sfadia also noted the WaveStream NGSO order is progressing with ongoing deliveries and more orders anticipated.

Christopher Quilty asked a series of questions covering the basis for expected Sidewinder orders, details on a UAV terminal sale, balance sheet changes post-Stellar Blu acquisition, amortization guidance, the status of LEO gateway orders, and clarification on the full-year EBITDA guidance.

Answer

CEO Adi Sfadia and CFO Gil Benyamini addressed the questions. They confirmed Sidewinder orders are based on business already won by their service provider customers. Gil Benyamini explained the balance sheet changes resulted from acquisition accounting and guided to roughly $3.5 million in quarterly amortization. Adi Sfadia noted LEO gateway decisions are delayed but reiterated the full-year guidance is based on the reported $7.6 million Q1 adjusted EBITDA, not the organic figure.

Christopher Quilty asked for a breakdown of the 2025 guidance, seeking clarity on growth drivers versus headwinds from Russia and Peru. He also inquired about NGSO power amplifier opportunities, Stellar Blu customer acquisition progress, Peru's profitability, defense R&D spending, the outlook for the commercial SkyEdge IV business, and IFC antenna technology trends.

Answer

CFO Gil Benyamini identified IFC and defense as the primary growth drivers for 2025, with some headwinds in Peru. He confirmed the company is pursuing large NGSO power amplifier opportunities. CEO Adi Sfadia stated they aim to secure new large customers for Stellar Blu in 2025. On R&D, both executives noted a significant investment increase in defense for new modems and features. Sfadia described the core SkyEdge IV network market as flattish pending new satellite launches but sees opportunity in cloud-based solutions. He also positioned Stellar Blu's single-beam antenna as the leading current technology.

Christopher Quilty asked about the revenue timeline for the Iris² program, its relation to Gilat's cloud virtualization efforts, the current state of the cellular backhaul market, and the progress of the SES mPOWER rollout.

Answer

CEO Adi Sfadia projected that Iris² would be a 3-4 year development project with mostly NRE revenue initially. He confirmed that the SkyEdge IV cloud virtualization effort is happening in parallel. He characterized the cellular backhaul market as seeing projects shift to the right with no major new initiatives. Regarding SES mPOWER, he stated Gilat is well-positioned, supporting the launch and expecting more growth as SES expands its satellite deployment.

Chris Quilty of Quilty Space asked about several key operational metrics, including Starlink terminal activations, the use of the AgilePlans program for OneWeb, and the customer profile for OneWeb versus Starlink. He also inquired about the service margin outlook given the LEO/GEO mix, the status of the Starlink data pool renewal, the impact of new access fees, and the attachment rate for the Commvox gateway. Finally, he questioned the impact of broader macroeconomic shipping trends on demand.

Answer

CFO Anthony Pike provided details on Starlink additions, noting the total was just short of 4,000 including hybrids, and explained that AgilePlans are used more for higher-cost OneWeb terminals due to their price. CEO Brent Bruun added that OneWeb customers often seek service diversity from Starlink. Pike clarified that GEO costs are fixed annually but had a temporary dip in Q2, and that service margins should remain in the 35-40% range as growing LEO margins offset pressure on the legacy GEO business. Bruun confirmed renewal discussions with Starlink are underway and will incorporate a new monthly terminal access charge. He also clarified Commvox subscribers were closer to 600-700 and stated the company has not seen an impact from global shipping trends on demand.

The analyst inquired about Starlink terminal activation numbers, the use of the AgilePlans program for OneWeb and Starlink, differences between OneWeb and Starlink customers, projected GEO costs, service margin outlook, details of the upcoming Starlink renewal, Commvox attachment rates, and the impact of end-market trends on demand.

Answer

The company provided Starlink subscriber numbers, explaining that AgilePlans are primarily used for the more expensive OneWeb terminals. They noted OneWeb customers seek diversity from Starlink. GEO costs are expected to be stable for the year despite a Q2 dip. Service margins are projected to remain in the 35-40% range, supported by LEO growth. The new Starlink deal will incorporate a monthly terminal access charge. Commvox subscribers are around 600-700 with an expected increase in attachment rates. The company has not observed any significant impact from global shipping trends or tariffs on customer demand.

Christopher Quilty of Quilty Space inquired about the composition of LEO service margins, the optimization of Starlink plans, the rationale behind new access charges, and the sustainability of record terminal shipment growth. He also asked about the company's strategy for land-based market expansion, the financial impact timeline of the U.S. Coast Guard contract loss, and plans for the stock buyback program.

Answer

CEO Brent Bruun and CFO Anthony Pike addressed the questions. Pike confirmed that strong LEO margins are primarily driven by the underlying bandwidth, not just value-added services. Bruun explained that while current Starlink plans are optimized, KVH will implement a terminal access charge later in the year, following Starlink's lead to manage network load. He also stated that while the record pace of terminal sales may not continue indefinitely, the addressable market has expanded significantly, mitigating saturation risk. Regarding land-based expansion, the existing sales team is handling it without new hires for now. On the Coast Guard contract, executives clarified the revenue impact of approximately $2.5 million per quarter will create a negative year-over-year variance through Q3. Finally, Bruun noted that the company is actively buying back shares daily and expects a larger buyback amount to be reported in the next quarter.

Inquired about the OneWeb service, specifically terminal pricing and customer motivation. Also asked about the competitive positioning of the CommBox product, the rate of VSAT churn and associated cost management, base CapEx, and the outlook for free cash flow in 2025.

Answer

The company stated that OneWeb customers value network diversity, justifying the higher terminal cost (2x Starlink). They believe their CommBox product is competitive, with new security features planned, and is applicable to new land markets. VSAT churn has stabilized, and costs are being managed through reduced bandwidth commitments and using refurbished hardware, leading to lower CapEx. They are aiming for positive free cash flow in 2025.

Christopher Quilty of Quilty Space inquired about the dynamics of vessel growth, specifically the mix between new Starlink activations and existing VSAT units, and the impact of the company's bundling strategy. He also asked about the Starlink sales pipeline, its potential to expand the total market, the rationale for entering the land-based market, the runoff timeline for the prepaid Starlink commitment, rising inventory levels, the future R&D spending run rate, and the go-to-market strategy for the new OneWeb service.

Answer

CEO Brent Bruun clarified that the company is not simply "shedding" VSAT units; rather, more than half of commercial Starlink terminals are being bundled with VSATs in a hybrid solution. He confirmed the shift in reporting from terminals to vessels to reflect this hybrid reality. Bruun stated the Starlink pipeline is robust, expanding the addressable market, and that entering the adjacent land market was a simple strategic step given existing infrastructure. He anticipates the prepaid Starlink commitment will run off mostly in 2025. Executive Anthony Pike explained that the inventory increase was driven by raw materials for a final manufacturing build-out and a nearly $2 million increase in Starlink inventory. Both executives indicated that the current R&D and operating expense levels are sustainable, with a focus on further efficiencies. Regarding OneWeb, Bruun described it as "early days," positioning it as another potential component in a hybrid network solution rather than a direct competitor to Starlink.

Chris Quilty of Quilty Space addressed the news about potential cuts to the NRO's EOCL program, asking for any insight into the situation and its potential impact on Planet.

Answer

CEO Will Marshall acknowledged the situation was analogous to the NASA budget discussion, emphasizing Planet's strong partnership with the NRO and NGA. He stated that the administration's broader push to leverage commercial services is a positive trend and that, while specifics are in flux, he believes the opportunities in Washington D.C. outweigh the risks for Planet.

Christopher Quilty sought to clarify the potential revenue impact from the expected increase in NOAA soundings, asking if revenue would scale proportionally. He also asked about the primary growth drivers for 2025 and 2026 post-Maritime sale and questioned if Spire would consider vertical integration for its Space Services business.

Answer

CEO Theresa Condor explained that while revenue will increase with more soundings, the price per sounding is subject to negotiation, though she expects the government to pay a reasonable price. She identified sales to government customers and the space reconnaissance (RF geolocation) business as key growth drivers. Condor stated that the company is currently focused on organic growth and execution, not vertical integration.

Christopher Quilty asked for details on the Canadian wildfire deal, clarification on revenue recognition under the new Space Services accounting, whether the Q4 revenue figure is a blip or a new baseline, and the commercial strategy for the new OISL technology.

Answer

Chairman Peter Platzer described the Canadian deal as a prime contract for Spire with OroraTech as a payload subcontractor. CFO Leo Basola explained the new accounting is cash-flow neutral during the build phase but defers revenue recognition until data delivery begins. Basola confirmed Q4 is a 'blip' and that growth will resume from that point, with the baseline resetting at a potentially higher growth rate post-maritime sale. Platzer acknowledged the OISL question's foresight but did not detail a commercial strategy.

Christopher Quilty asked about the nature of Gen-3 investments, the steady-state operating expenses post-LeoStella, the reason for a sequential decline in Imagery & Analytics revenue, and the rationale for the Q4 commercial launch of Gen-3.

Answer

CEO Brian O'Toole and CFO Henry Dubois clarified that investments are mainly R&D, and Q1 OpEx is a good run-rate. The revenue dip was attributed to timing and customers awaiting Gen-3. O'Toole explained the Gen-3 rollout includes an early access program in the summer, with full commercial availability in Q4 to ensure sufficient capacity and infrastructure.

Christopher Quilty asked for details on how revenue from the EOCL contract will ramp with Gen-3 deployment, whether it's on a per-satellite basis or through larger step-ups. He also inquired about potential exposure to government budget cuts and if any other major cost increases are expected in 2025.

Answer

CEO Brian O'Toole clarified that EOCL revenue is not tied to individual satellites but is based on layered subscription services for the entire constellation. He expects a revenue step-up later in the year as the government adds new service packages for Gen-3 capacity on top of the existing Gen-2 contract. Regarding costs, O'Toole stated that no other large step-ups are anticipated, and the company will maintain its discipline of keeping costs relatively flat compared to revenue growth.

Christopher Quilty of Quilty Space asked for details on Telesat's government go-to-market strategy, the next major development milestones for the Lightspeed constellation, and the strategic importance of having electronically steerable antennas (ESAs) for the in-flight connectivity market. He also questioned the potential scale of future LEO backlog agreements compared to the significant Viasat deal.

Answer

President and CEO Daniel Goldberg detailed a multi-pronged government strategy focused on allied nations, utilizing direct engagement in Canada and a foreign-mitigated entity in the U.S., while also partnering with established integrators. Key upcoming milestones include a critical design review, more landing station announcements, and the launch of a new satellite operations facility by year-end. Regarding the backlog, Goldberg acknowledged the Viasat contract is very significant but expressed optimism for securing other nine-figure deals with commercial players and meaningful commitments from government customers.

Christopher Quilty of Quilty Space asked for clarification on the future trajectory of the enterprise GEO business decline, the profile of remaining customers, and the drawdown schedule for government debt related to Lightspeed.

Answer

President and CEO Daniel Goldberg explained that the enterprise business will continue to face headwinds from LEO competition, particularly in maritime, as well as the end-of-life of certain satellites like Anik F2 and F3. He noted that the overall shift from GEO to LEO will persist. Executive Andrew Browne clarified that the government debt would be drawn down in line with capital expenditures for the Lightspeed program.

Christopher Quilty asked about management's primary focus now that financing is complete, the reasons for Q3's cost variability, and the confidence level in avoiding ground segment delays similar to those experienced by competitors.

Answer

CEO Dan Goldberg stated that with financing secured, management's time is now fully dedicated to program execution, customer engagement, and hiring. The Q3 cost variability was attributed to the lumpy nature of a NASA contract and the timing of capitalized engineering expenses. Goldberg expressed high confidence in the ground segment rollout, noting that major contracts are in place and that the initial 5-6 landing stations needed for testing within two years are on schedule, distinguishing their situation from competitors.

Christopher Quilty from Quilty Space requested an explanation of the current regulatory landscape and recent filings related to the big LEO MSS spectrum.

Answer

CEO Paul Jacobs explained that competitors with less optimal spectrum solutions are actively seeking access to new spectrum. He asserted that Globalstar is in a strong position due to its 30-year history of active spectrum use and its high-priority status in coordination matters, which provides a significant advantage against these competitive efforts.

Christopher Quilty of Quilty Space sought clarification on the 'multi-tenant' satellite concept, the customer pipeline for the 'condo sat' model, and whether any United Airlines aircraft had been removed from Viasat's order backlog.

Answer

Chairman and CEO Mark Dankberg distinguished between a true multi-tenant model for the standards-driven D2D market and a 'condosat' model for GEO broadband, which Viasat has successfully used with partners before. He confirmed they have more such partnerships in the works. Regarding the backlog, he stated it would be presumptive to remove aircraft and that Viasat's forecasts reflect their understanding of all customer plans.