MDA Space (TSE:MDA) reported second-quarter revenue growth of 34% and raised the midpoint of its 2026 revenue and adjusted EBITDA outlook, citing broad-based demand across its satellite systems, robotics and space operations, and geointelligence businesses.
Revenue for the quarter ended June 30 was CAD 499 million, compared with the prior-year period, while adjusted EBITDA increased 26% to CAD 96 million. Adjusted EBITDA margin was 19.3%. Adjusted net income rose 13% to CAD 52 million, although adjusted diluted earnings per share remained flat at CAD 0.36 because of a higher diluted share count following an equity issuance in March.
Guidance Raised Following Strong First Half
Chief Executive Officer Mike Greenley said the company’s first-half performance reflected growth across all three business areas and supported a higher full-year outlook. MDA Space now expects 2026 revenue of CAD 1.8 billion to CAD 1.9 billion, compared with a prior range of CAD 1.7 billion to CAD 1.9 billion. The updated midpoint of CAD 1.85 billion implies approximately 13% year-over-year growth.
The company also raised the bottom end of its adjusted EBITDA outlook, now projecting CAD 330 million to CAD 370 million, versus a previous range of CAD 320 million to CAD 370 million. MDA Space maintained its adjusted EBITDA margin outlook of 18% to 20%, capital expenditure expectations of CAD 225 million to CAD 275 million, and guidance for neutral to negative free cash flow.
“This meet or beat performance year to date has resulted in us now raising the midpoint of both our full-year revenue and adjusted EBITDA expectations,” Greenley said.
Chief Financial Officer Guillaume Lavoie said the company’s expected second-half revenue pace reflects normal program execution rather than manufacturing constraints. He pointed to work on the Globalstar next-generation low-Earth-orbit constellation, where deliveries of components and subsystems are expected to moderate as the program transitions toward assembly, integration and testing.
Orders Lift Backlog and Support Future Growth
MDA Space ended the quarter with CAD 4 billion in backlog, up about CAD 300 million from the first quarter. Net order bookings exceeded CAD 800 million, producing a book-to-bill ratio of 1.6 times.
After quarter-end, Telesat expanded MDA Space’s scope of work on the Lightspeed low-Earth-orbit constellation, adding 27 MDA AURORA satellites to the previously announced 198. Greenley said the added scope increased the total contract value by CAD 474 million, including the new satellites, military Ka-band capabilities and long-lead items. Lavoie said the expansion would add approximately CAD 400 million to backlog, bringing pro forma second-quarter backlog to CAD 4.4 billion.
The company expects the Telesat expansion to have a limited effect in 2026 but to contribute more than CAD 150 million in revenue during 2027, with a similarly sizable contribution in 2028 before the work is completed in 2029, according to Lavoie.
Other recently announced awards included a follow-on Canadian Space Agency contract worth more than CAD 600 million for an advanced synthetic aperture radar satellite to operate as a fourth spacecraft in the RADARSAT Constellation Mission. MDA Space also cited contracts involving Mitsubishi Electric for Japan’s next-generation defense communications satellite program, BAE Systems for U.S. missile-warning and tracking satellites, and OHB for lunar landing sensors supporting the European Space Agency’s Argonaut mission.
Greenley said the company’s opportunity pipeline totals CAD 40 billion, including CAD 10 billion in down-selected or follow-on opportunities.
Acquisitions Target U.S. Defense and Geointelligence Markets
MDA Space is pursuing two acquisitions expected to broaden its geographic reach and expand its recurring-revenue businesses. The company agreed in June to acquire Colorado-based Blue Canyon Technologies, a spacecraft and satellite-component manufacturer that derives 75% of its revenue from defense applications. The transaction is expected to close in the fourth quarter of 2026, subject to approvals.
Greenley said Blue Canyon has launched more than 85 spacecraft and has more than 3,500 products on orbit. MDA Space expects the acquisition to add roughly CAD 5 billion to its opportunity pipeline after closing and provide a pathway to classified U.S. government programs through Blue Canyon’s facility security clearance.
The company also announced an agreement to acquire a majority interest in CLS, a geointelligence and Earth-observation analytics provider serving more than 14,000 customers in approximately 150 countries. That deal is targeted to close between the fourth quarter of 2026 and the first quarter of 2027.
MDA Space said CLS would double its recurring revenue base and provide a direct sales channel for the company’s MDA CHORUS Earth-observation constellation, which remains targeted for launch later this year. Greenley said MDA CHORUS has completed full integration of its main C-band spacecraft, while its smaller X-band satellite completed a pre-shipment review. The program is entering environmental and vibration testing.
Together, the acquisitions are expected to cost about CAD 2 billion, including transaction and other fees. MDA Space raised CAD 1.15 billion through an upsized bought-deal equity offering and CAD 600 million through senior unsecured notes, with the balance expected to be funded through existing cash and a term loan facility.
Lavoie said the financing structure is expected to keep net debt to last-12-month adjusted EBITDA within the company’s targeted 1.5-times to 2.5-times range after both deals close.
Cash Flow and Pro Forma Outlook
Operating cash flow was negative CAD 33 million in the first half, compared with positive CAD 320 million a year earlier, due mainly to working-capital fluctuations on major contracts. Higher capital expenditures also pushed first-half free cash flow to negative CAD 178 million, versus positive CAD 222 million in the prior-year period.
MDA Space ended the quarter with net cash of CAD 153 million and total available liquidity of CAD 1.1 billion, including nearly CAD 400 million of cash and approximately CAD 700 million of available credit-facility liquidity.
Based on the midpoint of its revised guidance, MDA Space said its standalone 2026 revenue would be about CAD 1.85 billion. Blue Canyon would add approximately CAD 225 million and CLS about CAD 465 million, bringing pro forma 2026 revenue to roughly CAD 2.5 billion. The company said both acquired businesses are profitable and are expected to support its 18% to 20% adjusted EBITDA margin range.
About MDA Space (TSE:MDA)
Building the space between proven and possible, MDA Space (TSX:MDA; NYSE:MDA) is a trusted mission partner to the global defence and space industry. A robotics, satellite systems and geointelligence pioneer with a 55-year+ story of world firsts and more than 450 missions, MDA Space is a global leader in communications satellites, Earth and space observation, and space exploration and infrastructure. The global MDA Space team of more than 4,000 space experts has the knowledge and know-how to turn an audacious customer vision into an achievable mission – bringing to bear a one-of-a-kind mix of experience, engineering excellence and wide-eyed wonder that’s been in our DNA since day one.
