Maxar Technologies Inc.

Consolidated Q3 revenue was approximately $436 million, essentially flat year over year. Adjusted EBITDA was $115 million, excluding a $5 million foreign exchange loss; net loss was $4 million and net loss per share was $0.05. Earth Intelligence revenue increased 1% year over year, while Space Infrastructure revenue increased 3% year over year. On a year-to-date basis, total company revenue decreased 2% and adjusted EBITDA margin expanded 50 basis points, including $7 million of FX charges. For full-year 2022, Earth Intelligence revenue guidance was reduced by $50 million, consolidated adjusted EBITDA guidance was lowered by about $10 million, operating cash flow guidance was tightened around a midpoint of $340 million, and CapEx guidance was increased slightly to $330 million. Earth Intelligence adjusted EBITDA guidance was set at $500 million to $530 million, Space Infrastructure adjusted EBITDA guidance at $80 million to $95 million, and management reiterated 2023 targets of $570 million adjusted EBITDA and $290 million free cash flow. Management said the first two Legion satellites are expected to ship in December for January launch, with launch cadence thereafter roughly every two to three months.

Dan Jablonsky struck a confident but cautious tone. He emphasized that Maxar is making progress on its 2022 priorities, seeing strong traction in high-margin products and 3D capabilities, and expects Legion capacity to drive a stronger cash generation period once it comes online. At the same time, he acknowledged Earth Intelligence revenue was lighter than expected because the lower-margin services business lagged on award cadence and staffing, but said those issues are being corrected.

Biggs Porter focused on the math behind the quarter and the guide. He cited Q3 net loss of $4 million, adjusted EBITDA of $115 million excluding $5 million of FX losses, $124 million of operating cash flow from continuing operations, $75 million of CapEx, and roughly $379 million of liquidity at quarter-end; net debt fell $44 million. He said the Earth Intelligence guide was cut because services are down roughly $30 million year-to-date and some imagery transactions slipped, while 2022 consolidated EBITDA guidance fell about $10 million due to FX; he also reiterated 2023 targets of $570 million adjusted EBITDA and $290 million free cash flow.

Analysts focused on the Legion software delay, the 3D business ramp, the 2023 EBITDA bridge, and the services shortfall. Management said Legion’s issue was slower-than-expected verification and validation software progress, but that most of the work is now complete and shipping is still expected in December for January launch. On 3D, Jablonsky said the Army One World Terrain program is already an over-$50 million annual program and that Maxar expects more growth from enterprise uses such as mapping, navigation, simulation, gaming, and media; Porter added that fourth-quarter Earth Intelligence margins should step up as product revenue, not services, drives mix. On services, Jablonsky said the shortfall reflects both delayed customer awards and staffing challenges, especially for U.S. government customers, but backlog is growing and book-to-bill for services was 1.4x year to date.