Eutelsat's LEO Momentum and Africa Push Face Market's Heavy Hand

Eutelsat's LEO revenue surges 65% as connectivity overtakes video, but shares drop 24% amid transformation cost concerns. Financing secured through 2029.

The satellite operator is making clear strides in its LEO strategy, from a 65% surge in low-earth-orbit revenue to a new broadband partnership in Madagascar. Yet shares have been hammered over the past week, dropping 24% as investors reassess the cost of transformation.

Eutelsat deepened its ties with Airtel Madagascar, deploying OneWeb's LEO constellation to deliver high-speed internet to remote parts of the island nation. The system operates at altitudes between 160 and 2,000 kilometers, cutting latency to around 70 milliseconds — far closer to terrestrial networks than traditional geostationary satellites. The hybrid network is designed to complement existing 4G and fiber infrastructure, making it attractive for businesses, healthcare providers and public institutions in areas with unreliable ground connections. Recent mobile broadband tests on moving trains demonstrated stable download speeds of up to 100 Mbit/s, validating the technology's potential for high-demand mobile applications.

The operational push comes as Eutelsat's quarterly numbers confirm the structural shift underway. In the third quarter of its 2025/26 fiscal year, group revenue reached €293 million, up 3.1% after adjusting for currency effects. The headline figure masks deep divergence: video revenue tumbled 13.3% to €128 million, while connectivity revenue rose 15.3% to €155.7 million. Within connectivity, LEO sales jumped 65% to €62.2 million. For the first time, connectivity accounted for 55% of quarterly revenue, leaving video at 45%.

The order book reinforces the trend. At the end of March, Eutelsat reported a backlog of €3.4 billion — 2.8 times the 2024/25 annual revenue — with connectivity representing 58% of that total. These are contracted capacity and service agreements, lending tangible support to the growth narrative. The company is simultaneously pressing its commercial offensive at two industry trade shows this week: the Mexican oil congress in Boca del Río and the Posidonia shipping fair in Athens, hunting for energy, offshore and maritime deals to sustain the LEO trajectory.

Financing appears secured for the medium term. A refinancing program worth roughly €5 billion, including a €1.5 billion bond as the final piece, is intended to cover investment needs through 2029. For the current fiscal year, management reaffirmed LEO revenue growth of 50%, gross capital expenditure of around €900 million, and net debt at about 2.7 times EBITDA by year-end.

Despite these operational milestones, the stock has been punished. On Wednesday, Eutelsat shares closed at €3.24, down 6.92% on the day and 24.28% lower over the past week. The price now sits 29% below the 52-week high of €4.62 recorded in mid-May. The annualized 30-day volatility has surged past 100%, marking the shares as a high-risk bet. Still, the year-to-date gain remains substantial at 81%, a reminder of the rally that preceded the pullback. The primary article noted a nearly 83% advance since the start of the year and a 27% decline in the previous seven-day period, illustrating the stock's extreme swings.

Analysts largely remain on the sidelines, weighing the growing backlog in government and maritime connectivity against the heavy capital demands of the LEO buildout. The next hard data point comes in August, when Eutelsat publishes fourth-quarter results. By then, the industry contacts made in Mexico and Athens may have translated into concrete revenue contracts — or the market's patience with this capital-intensive transformation story may be further tested.