Shares in Eutelsat Communications (LSE:ETL) moved lower on Wednesday after the satellite operator posted a decline in third-quarter revenue, with ongoing weakness in its Video division outweighing continued expansion across its Connectivity activities.
Group revenue for the quarter ended March 31, 2026 came in at €293 million, compared with €299.8 million in the same period a year earlier, representing a reported decline of 2.3%. On a like-for-like basis, however, revenue increased by 3.1%.
Revenue generated by the company’s four core operating segments — Video, Government Services, Mobile Connectivity and Fixed Connectivity — declined 5.6% on a reported basis to €283.7 million, although it recorded like-for-like growth of 0.9%.
Video segment hit by Russian sanctions and satellite contract losses
Revenue from the Video business, which represented 45% of total group revenue, fell to €128.0 million from €151.7 million a year earlier. The decline was largely linked to sanctions affecting Russian television channels and the end of capacity agreements tied to the Express AT1 and AT2 satellites.
The company said sanctions affecting Russian channels had an annualised impact of around €16 million, while the termination of Express satellite contracts is expected to create an additional low single-digit million euro impact during fiscal 2025-26 beginning in March 2026.
Connectivity business continues to expand
Connectivity revenue rose to €155.7 million from €148.9 million and accounted for 55% of total group revenue during the quarter.
Within the division, Low Earth Orbit (LEO) revenue increased 65.0% on a like-for-like basis to €62.2 million from €42.3 million a year earlier. By contrast, Geostationary revenue declined 4.3% to €93.5 million from €106.7 million.
Government Services revenue climbed 11.8% on a like-for-like basis to €50.4 million, while Mobile Connectivity revenue advanced 27.0% to €45.0 million.
Fixed Connectivity revenue rose 10.6% on a like-for-like basis to €60.3 million. However, the company noted that revenue in the segment fell 12.9% compared with the previous quarter because of one-off upfront revenue recognition linked to a capacity contract recorded during the second quarter.
Other revenue and backlog remain supportive
Other revenue totaled €9.4 million, compared with negative €0.7 million in the prior-year period, supported by revenue recognition related to the IRIS2 programme as well as a positive hedging impact of €0.3 million.
For the first nine months of fiscal 2025-26, total revenue decreased 2.4% on a reported basis to €884.7 million, although it increased 1.1% at constant currency rates. Over the same period, LEO revenue rose 61.6% on a like-for-like basis to €172.7 million.
At March 31, 2026, Eutelsat’s contract backlog stood at €3.4 billion, equivalent to 2.8 times fiscal 2024-25 revenue, with Connectivity accounting for 58% of the total backlog.
Financing completed as company maintains guidance
Eutelsat said it completed a €1.50 billion senior notes offering on March 5, representing the final phase of an approximately €5 billion combined equity and debt financing programme.
The group expects net debt-to-EBITDA to stand at around 2.7 times by the end of fiscal 2025-26.
The company also reaffirmed its guidance for fiscal 2025-26, including expectations for operating vertical revenue to remain broadly in line with fiscal 2024-25 levels, LEO revenue growth of 50% year-on-year and an adjusted EBITDA margin slightly below the prior-year figure. Gross capital expenditure is forecast at approximately €900 million.
Eutelsat further reiterated its medium-term targets for fiscal 2028-29, including operating vertical revenue between €1.50 billion and €1.70 billion and an EBITDA margin of at least 65%, based on an assumed euro-to-dollar exchange rate of 1.12.
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