Eutelsat’s Strategic Pivot Gains Momentum with Low-Earth Orbit Segment

Eutelsat FR0010221234

The latest half-year financial results for the 2025-26 period reveal a company in the midst of a profound strategic shift. Eutelsat, the French satellite operator, is successfully navigating a transition where its legacy television business continues to contract while a new segment emerges as a powerful growth engine. This reorientation is underscored by a significantly strengthened balance sheet following a substantial debt reduction.

Key financial highlights from the report include:

• Segment Growth: Revenue from the Low-Earth Orbit (LEO) segment, driven by the OneWeb constellation, surged by nearly 60% on a constant currency basis.
• Strengthened Finances: The company's net debt was more than halved, thanks to a successful capital increase.
• Improved Bottom Line: Eutelsat drastically reduced its net loss to 236.5 million euros, a marked improvement from the 873.2 million euro loss recorded in the prior-year period.

The figures for the first half of the fiscal year (July to December 2025) paint a clear picture of this ongoing transformation. On a constant currency basis, total group revenue remained stable. This stability was achieved despite persistent challenges in the traditional video segment, which faces structural market shifts and the impact of sanctions. The weakness in this legacy area was fully offset by the rapid expansion of the LEO business, which now contributes approximately 20% of the group's total revenue.

This shift in the revenue mix has had a temporary impact on profitability. As the LEO segment is still in its investment and ramp-up phase, the adjusted EBITDA margin contracted from 55.2% to 52.1%. Nevertheless, Eutelsat managed to sharply curtail its net loss. This improvement was largely due to the absence of the substantial goodwill impairments that had weighed heavily on the previous year's results.

A Restructured Balance Sheet Provides Stability

Alongside operational changes, a major financial restructuring has been a focal point. In December 2025, Eutelsat completed a capital increase of over 1.5 billion euros. This move reduced net debt to 1.3 billion euros and improved the leverage ratio (net debt/EBITDA) from a critical 3.92x to a more solid 2.00x.

This newfound financial flexibility proved crucial when a planned asset sale fell through. The company's agreement to sell its passive ground infrastructure to EQT for 550 million euros was vetoed by the French government in January 2026. To bridge this funding gap, Eutelsat secured a new, state-guaranteed export credit facility of close to one billion euros. Finalized on February 11, this financing ensures the continued procurement of satellites from Airbus.

Management Confirms Forward Trajectory

Operationally, Eutelsat is taking steps to secure the future of its OneWeb constellation. Management has increased satellite orders to 440 units to guarantee continuity of service. Furthermore, a recently announced partnership with media service provider Viewsat for the Egyptian market demonstrates that the company continues to nurture its traditional business in select niche markets.

The leadership team has reaffirmed its outlook for the current fiscal year. It anticipates LEO-related revenues to grow by approximately 50%, while overall capital expenditures are expected to decrease slightly to 900 million euros. Looking further ahead, Eutelsat has set a long-term target for the 2028-29 fiscal year: achieving revenue between 1.5 and 1.7 billion euros with an EBITDA margin of at least 65%.