Eutelsat rides Ukraine and government deals to beat revenue projections

French-based satellite operator Eutelsat has reported a modest increase in revenue for the year to June 30, beating forecasts due to solid demand mainly from governments.

This comes as both corporate clients and European governments are also looking at other options outside US service providers like Starlink.

The Paris-listed company generated €1.23 billion in revenue in the year under review, a modest 0.8% increase on the previous year. Analysts had forecast €1.21 billion, according to a company-compiled consensus.

Eutelsat targets high-margin sectors like governments

Much of the uplift came from the firm’s expanding presence in low Earth orbit (LEO) operations. Revenues from these services surged by 84.1% year-on-year to €187 million, now accounting for around 15% of total income.

“We are seeing real momentum in LEO,” said CEO Jean-François Fallacher.

“This is a transformative period for the satellite industry, and Eutelsat is positioned to lead the development of Europe’s sovereign space infrastructure.”

~ Fallacher

Fallacher added that the framework agreement with the French military also attests to this, while the recently announced €1.5 billion capital increase would give the satellite company the necessary financing to implement its strategic roadmap.

While Elon Musk’s Starlink and Amazon’s Kuiper continue to dominate the consumer satellite broadband space, Eutelsat is targeting more specialized markets.

Fallacher said the firm does not intend to compete directly with these giants for household customers. Instead, Eutelsat is focusing on high-margin sectors such as government services, in-flight connectivity and maritime coverage.

A significant portion of recent revenue came from government contracts, including expanded services in Ukraine. The German government has reportedly been covering Ukraine’s access costs to Eutelsat’s network for the past year.

Fallacher also pointed to increased demand from governments outside the US, notably Taiwan.

LEO revenue is expected to grow by a further 50% next year, the company said, although this will not yet fully offset losses in its traditional video broadcasting business, which continues to decline amid Russian sanctions and shifting market dynamics.

Eutelsat has attracted attention from European governments as they look at creating a home-grown solution and an alternative to the Elon Musk-owned Starlink.

Legacy business weighs on bottom line

Despite the revenue boost, Eutelsat reported a net loss of €1.1 billion for the year. It attributed the loss to impairments mainly related to the company’s geostationary satellites assets (GEO).

Apart from the 600 LEO satellites managed by the British-based firm OneWeb it merged with two years ago, Eutelsat also runs 34 GEO satellites, which are used mainly for television broadcasting and fixed satellite internet.

The satellite operator is undergoing significant restructuring. Alongside Fallacher’s recent appointment as CEO, a new chairman has been installed, and a €1.5 billion capital injection is being led by the French and UK governments, along with other key stakeholders.

The capital raise will help finance Eutelsat’s transition strategy, which hinges on dual GEO-LEO operations and a growing role in Europe’s sovereign satellite plans.

Fallacher said the company is well placed to serve both public and private sectors, citing a recently signed framework agreement with the French military as an example of how Eutelsat’s offering fits into wider national security and space ambitions.

“Thanks to its differentiated GEO-LEO positioning and global coverage, Eutelsat is positioned to be a key player in the development of the European sovereign space of tomorrow,” he said.

Eutelsat’s investors are also upbeat. Its shares jumped 1.2% during early trading and have soared by 30% on a year to date basis.

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