LEO Momentum Helps Eutelsat as Video Headwinds Persist

Eutelsat FR0010221234

Eutelsat reported a mixed first half of fiscal year 2025/26, with strength in its LEO-driven connectivity business offsetting continued pressure in the core video segment. Overall revenue held steady, and the balance sheet strengthened versus a year earlier. The question remains whether LEO can sustain a structural counterweight to the traditional video downturn.

• Total revenue: 591,6 Mio. ? (like-for-like: +0,1%, stable)
• LEO revenues: 110,5 Mio. ? (+59,7%) and thus around 20% of total revenue
• Video revenues: 266,5 Mio. ? (-12,3%)
• Net loss: 236,5 Mio. ? (Prior year: 873,2 Mio. ?)
• Net debt/Adjusted EBITDA: 2,0x (Prior year: 3,92x)

For the six months ended 31 December, the operating segments generated 573,8 Mio. ? in revenue, versus a like-for-like decline of 0,6%. The key stabilizer was the Connectivity segment, which grew to 307,3 Mio. ?, up 11,8%.

The standout performer within the portfolio is the LEO division, which climbed nearly 60% to 110,5 Mio. ?. This has made LEO a meaningful revenue pillar. Growth was broad-based: fixed connectivity (+17,2%), government services (+7,7%), and mobile connectivity (+8,5%).

In contrast, the Video business continued to slide, with revenue down 12,3% to 266,5 Mio. ?. Eutelsat points to sanctions against Russian broadcasters and a ongoing structural decline in the broadcasting market.

Margins soften as mix shifts; leverage improves

The earnings mix reflects the shift toward LEO. Adjusted EBITDA declined by 8% to 308,2 Mio. ?, and the EBITDA margin fell to 52,1% from 55,2% a year earlier. Eutelsat attributes the softer profitability to the expansion of LEO activities coupled with headwinds in the video segment.

On the other hand, the bottom line improved sharply: net loss narrowed to 236,5 Mio. ? from 873,2 Mio. ? in the prior-year period. The improvement was supported by a capital increase and near??1 billion in export credit financing. Consequently, Moody?s and Fitch raised their ratings. Net debt declined to 1,3 Mrd. ?, and the leverage ratio (net debt to adjusted EBITDA) improved to 2,0x.

Outlook reaffirmed ? 440 new LEO satellites planned

For the current financial year, Eutelsat reaffirmed its targets: revenues from operating verticals expected to be at prior-year levels, with LEO revenues anticipated to grow by roughly 50%. The strategy centering on connectivity is underscored by the plan to procure 440 new LEO satellites for the OneWeb constellation. Following the earnings release, investors reacted positively, and the shares rose markedly after the disclosure.