Eutelsat's Strategic Pivot Gains Momentum in H1 Results

Eutelsat's H1 2025/26 report shows a strategic shift: explosive 60% LEO revenue growth and €60M+ annual interest savings from debt refinancing fuel its €2B revenue target.

The first half of the 2025/26 fiscal year offers compelling evidence that Eutelsat's costly corporate transformation is beginning to yield results. The satellite operator's latest financial report, covering the period ending December 31, 2025, reveals a company in transition, successfully managing legacy challenges while aggressively cultivating a high-growth new segment. The central question for investors is whether this marks a definitive shift toward sustainable, profitable expansion.

Financial Restructuring Delivers Substantial Savings

A fundamental improvement in the company's financial health is becoming apparent. Eutelsat has completed a significant refinancing initiative, securing €2.5 billion, including funds from export credit agencies. Management is strategically using this capital to retire expensive legacy debt, notably a high-yield bond carrying a 9.75% coupon.

The impact is direct and material: the company is now positioned to save over €60 million in annual interest payments. This deleveraging effort has reduced net debt to approximately twice the company's EBITDA (earnings before interest, taxes, depreciation, and amortization). These strengthened financial metrics have already prompted credit rating upgrades from agencies Moody's and Fitch.

Diverging Performance Across Business Units

A closer look at the revenue figures reveals a tale of two businesses. On a comparable basis, total group revenue remained essentially flat, posting a negligible 0.1% increase to €591.6 million. However, this headline number masks a powerful underlying shift in the revenue mix.

The Low Earth Orbit (LEO) segment, built on the foundation of the OneWeb acquisition, is experiencing explosive growth. Revenue here surged by 59.7% to €110.5 million. This burgeoning division now contributes 20% of total group revenue, effectively offsetting continued softness in the company's traditional satellite operations.

Sustained Profitability and Strategic Investments

Despite the strategic investments, Eutelsat has maintained robust operational profitability. The company reported an adjusted EBITDA of €308 million, representing a healthy margin exceeding 52%.

To fuel its ambitious target of reaching €2 billion in revenue by 2027, Eutelsat is committing heavily to infrastructure. In January, the company awarded a major contract to Airbus for the manufacture of 340 new LEO satellites. This order, combined with existing commitments, expands the pipeline to 440 next-generation satellites, with deliveries scheduled to commence by the end of this year.

Government Contract Provides Long-Term Foundation

Strategic support for this growth comes in the form of a significant government partnership. A ten-year contract secured with the French government in the summer of 2025, valued at one billion euros, guarantees long-term revenue and firmly embeds Eutelsat within European security infrastructure.

This powerful combination—long-term government backing, declining financing costs, and a rapidly scaling LEO business—buttresses management's ambition to establish Eutelsat as a formidable, long-term alternative to competitors like Starlink. The H1 2025/26 results suggest the strategic blueprint is not just on paper, but actively translating into improved financial performance.