MDA Space Ltd., based in Brampton, Ontario, reported a 32% year-over-year increase in first-quarter revenue to $464.1 million, surpassing analyst expectations, driven primarily by a 41% surge in its satellite business, the company announced on Thursday.
Satellite Business Drives Growth
Canada's largest space company saw satellite revenue reach $313 million in the quarter, fueled by work on its $2.1-billion deal with Telesat Corp. and a $1.1-billion agreement with Globalstar Inc. to build and deliver low-earth orbit satellites. The robotics segment posted an 18% revenue increase to $92 million, while geointelligence revenue grew 15% to $59 million.
Profit Decline and Acquisition Impact
Despite the revenue beat, net profit fell 10% to $29.6 million from a year earlier, largely due to expenses related to the acquisition of a satellite chip company in the third quarter of last year. Adjusted earnings per share (EPS) came in at 38 cents, above the consensus estimate of 32 cents, while diluted EPS dropped 11.5% year over year to 22 cents.
Market Reaction and Analyst Views
Shares of MDA rose approximately 5% on Thursday morning and have gained about 90% over the past 12 months. Desjardins Group analyst Benoit Poirier described the results positively, citing a strong revenue beat, solid profitability, and a net cash position. He expressed minimal concern over softer bookings and a decline in backlog to $3.69 billion from $4 billion in the prior quarter.
Outlook and Strategic Moves
MDA maintained its 2026 guidance, projecting full-year revenue between $1.7 billion and $1.9 billion. The company is pursuing acquisitions in the United States and Europe to expand its global footprint. It reported a net cash position of $299 million, compared to $120 million of net debt in the previous quarter, largely due to proceeds from its initial public offering on the New York Stock Exchange in March.
Analysts expect MDA to benefit from Canada's increased defence spending and the $6.6-billion Defence Industrial Strategy, which aims to support domestic industry. The company launched a defence-focused subsidiary earlier this year and recently secured a contract to build ground-based observatories for the Department of National Defence's space monitoring activities.
"We continue to see the speed at which defence spending and demand for new space capability is shaping the market," CEO Mike Greenley said in a statement.
