Good morning, ladies and gentlemen, and welcome to the conference call to report the first quarter 2024 financial results for Telesat. Our speakers today will be Daniel Goldberg, President and Chief Executive Officer of Telesat, and Andrew Browne, Chief Financial Officer of Telesat. I would now like to turn the meeting over to Mr. Michael Bolitho, Director of Treasury and Risk Management. Please go ahead, Mr. Bolitho.

Thank you and good morning. This morning, we filed our quarterly report for the period ending March 31, 2024, on Form 6-K to the SEC and on SEDAR+. Our remarks today may contain forward-looking statements. There are risks that Telesat's actual results may differ materially from the results contemplated by the forward-looking statements, as a result of known and unknown risks and uncertainties. For a discussion of known risks, please see Telesat's annual report and update filed with the SEC. Telesat assumes no responsibility to update or revise these forward-looking statements. I will now turn the call over to Dan Goldberg, Telesat's President and Chief Executive Officer.

Hey, thanks, Michael. My opening remarks were quite short this morning. Given we hosted an earnings call just six weeks ago, when we released our Q4 and full year numbers. I really just wanted to note that we're tracking to the 2024 guidance we gave earlier, and we're moving out as quickly as we can on Telesat Lightspeed. Now that we have understandings in place for all the financing, we need for our first 156 satellites. Our CapEx guidance, this year is for between CAD1 billion and CAD1.4 billion or around USD750 million to USD1 billion, which is pretty much entirely for Lightspeed. And you'll see that unfold as we report our results throughout the year. So with that, I'll hand over to Andrew and then I'll speak to the -- who will speak to the Q1 numbers in more detail, and then we'll open the call up to questions.

Thank you, Dan, and good morning, everyone. I would now like to focus on highlights from this morning's press releases and filings. In the fourth quarter of 2024 Telesat reported consolidated revenues of $152 million, adjusted EBITDA of $111 million and generated cash from operations of $76 million and ended the quarter with $1.8 billion of cash. But fourth quarter of 2024 compared to the same period in 2023 revenues decreased by $31 million to $152 million. Operating expenses decreased by $6 million to $47 million and adjusted EBITDA decreased by $28 million to $111 million. The adjusted EBITDA margin was 72.8% as compared to 75.7% in 2023. The revenue decrease for the quarter was primarily due to reduction in services and a low rate on the renewal of a long-term agreement with a North American direct to home customer, as well as lower revenues from certain mobility and Latin American customers and lower equipment sales to Canadian government customers. Looking at OpEx, the decrease in OpEx is primarily due to lower noncash share-based compensation and higher capitalized engineering expenses relative to the prior period. Interest expense decreased by $4 million during the fourth quarter when compared to the same period in 2023. The decrease in interest expense was primarily due to the repurchase of notes and term loan B. This was particularly offset by an increase in interest rates on the US dollar term Loan B facility itself. In the fourth quarter, we recorded a loss on foreign exchange of $68 million as compared to a gain of $10 million in Q4 2023. The loss for the three months ended March 31, '24, was mainly the result of a stronger US dollar Canadian dollar spot rate March 31, '24, as compared to the spot rate as of December 31,…

[Operator Instructions]. The first question is from Edison Yu from Scotiabank.

Hey, good morning and thank you for taking our questions, mainly just some housekeeping ones. On the cash flow is quite strong in the quarter despite the EBITDA declining. Were there any one-time benefits here? And how do you think this can trends for the rest of the year?

And now, I think our cash flows, I think underscore the high margins that we've got. If you look at our GEO business margins are approximately 80%. And I think some of the great things over existing business, notwithstanding the fact that indeed we've identified that we will see, you know, drops this year, but that's the underlying cash flow.

As I said, and then appreciate the -- obviously the breakdown of GEO and LEO, and you've got some consulting revenue in the LEO side is the 1Q a good run rate to take for the rest of the year, the contribution from some LEO consulting?

I don't think so and it's not a big part of our business at this stage, obviously not until LEO sort of you know, up and in service, late 2027, are we going to see meaningful revenue up until then there might be some more kind of incidental stuff. We're doing some work with the US government that's sort of lumpy in nature. And I think this came from a contract that we have with NASA that we've talked about before, where we're demonstrating some features on Leo's ability to communicate with other in-orbit spacecraft. So it's kind of a low to no margin stuff to. It's a good thing for us to be doing to be demonstrating capabilities and tightening the relationship with the important US government user. But yeah, it's not kind of going to be a big driver of our top line results or certainly our adjusted EBITDA for the year.

The next question is from Arun Seshadri from BNP Paribas.

Yes, hi. Just a couple from me. First, just wanted to understand. So that government of Canada is planning to take senior equity, I guess, above lenders and shareholders. Is that right? Like so they're equity in LEO is going to be structurally senior equity ahead of existing lenders and shareholders?

So maybe a couple of things. I mean there, what we announced six weeks ago it is that the government of Canada, we reached terms with the government of Canada on a roughly CAD2.1 billion loan and we disclosed. But the terms of that are 15 years. It picks during construction, it's gotta carries a rate of core plus 475 basis points. So it's fundamentally a loan and the government of Canada will be the funded, you know, alongside the government of Quebec and our vendor financing that we're getting, it will be the sort of senior secured lender in connection with Lightspeed constellation and in the unrestricted group where we're building Lightspeed. So that's kind of number one. But yes, as part of the deal, there is kind of an equity feature. The government of Canada is getting a 10 warrants are covering 10% of the equity in the Lightspeed project. And those warrants are struck at an equity value of $3 billion US up for the Lightspeed project. So can you I'm just trying to be responsive to your question about senior equity. It's kind of a form of equity participation in the Lightspeed project itself as opposed to the common shares of Telesat Corpation. So effective, Thank you for that, Dan. That was kind of [indiscernible] what you say is that it is effectively equity that's first preference on Lightspeed and then residual equity would be what flows through the equity of -- Yeah, I wouldn't think about it is first preference. I think about it that right now, you know, Telesat owns 100% of Lightspeed. And in the future, if the government can exercise these warrants, they would be an equity participant alongside of Telesat.

Okay. You're saying that it's non-structurally senior equity then?

No.

Alongside whatever equity there is --

That's right. Yes, that's exactly right.

Are there any I mean, I guess, like is there anything specific either direction. As you finish of the financing would you from the government of Canada's perspective would it make sense for them to have the entire Telesat cash flow also be as credit support or that financing or is, you know, I guess on the flip side would be insist that Lightspeed be separated from Telesat in order to sort of finish of the financing and I guess if the latter in the case how would you manage solvency requirements to make sure that it happens?

So maybe I'll start answering this and so first of all, and just so everyone understands how this work. The government of Canada is lending us money. It's going to be in the unrestricted group and the cash that Telesat Lightspeed generates is going to be used to support the borrowings in that unrestricted group. And so again, we've mentioned that our funding sources beyond our own $1.6 billion equity contribution is going to be borrowings from the government of Canada, the government of Québec and some vendor financing and so those borrowings are going to be supported and secured in and were secured by our Lightspeed activities. And so yeah, so could we in the future -- a could in the future, others potentially be behind the government of Canada in terms of being supported by Lightspeed cash flows or good with the government consent something differently than you have on for right now. That's that's kind of how it's set up. I think we've always been pretty clear about how Lightspeed's getting financed and the fact that we've got a restricted group and an unrestricted group. And I mean, it's fundamentally it's been project finance and our financing sources are government of Canada, the government of Québec, some vendor financing and then again, our own meaningful equity contribution. So I hope that's helpful. And then we should probably move on.

Yes, I think that's very helpful. Like can I ask one last thing and that is notice that the restricted payment hasn't fully been made yet. Just would you, I guess the expectation is that restriction would be made and then once that's done. Are there any other things that need to be done to put a blow on, I guess what else needs to be done from the timing standpoint to put a blow on the all of the financial requirements? Thanks.

So the restricted payment, I think it's $125 million.

And yet there's a remaining restricted payment of $120 million to be made under the $150 million general basket

Yeah. And we expect that will get done in the coming days. Yes. Correct. And then beyond that, again, we'll have at this point in time. We've got all of the financing lined up for the 156 satellites. We do need to conclude definitive funding agreements with those sources that I've described Government of Canada back then and the vendor financing. But we've already kind of started down that road and are highly confident that we're going to get there. So that's I'd say the final bow that needs to be tied on, but we are moving forward. As we said in our remarks, I mean, we've got meaningful cash on our balance sheet at this point in time, and we're going to start spending that money so that we can move this program forward as quickly as we can because we are hugely bullish on the opportunities that are out there in the market and we want to come to market and get in service as quickly as we can.

The next question is from Chris Quilty from Quilty Space.

Thank you. So Dan, just to follow up and I'm not going to hold you to it, but on the government of Canada, Quebec and the vendor, is that something that, you know in the next three to six months, sort of --

Yeah, Chris. No, we believe that should get done before the end of the summer. And hopefully, yeah, we've got a lot of momentum with the government of Canada as you can imagine and the government of Quebec, which are the big contributors here. So yeah, we're talking about the coming months.

So I was going to say the summer ends in October in four of them --

Well, I'm working on a auto with summer, which are a little bit earlier. There are some. Yeah, anyway, spring hasn't really even shown up yet. So anyway, yeah.

So and also the CapEx in Q1, I mean, obviously, you just closed the financing deal, but CapEx in Q1 was a little bit lower than I was expecting. Is it fair to assume you're probably more towards the $1 billion and the $1.4 billion? And Andrew, typically in these large-scale long-term programs, is it fair to assume, you know, year one, 30% year two, 40% year three, 30% type of how it falls out in timing or should we look at this is sort of a longer slower climb. It's just general framework of how you expect to pay that?

Yeah, I think, Chris, that given the nature of the program, you know, it's a supply chain and getting everything sort of moving forward. So I think in this year that we in our guidance $1 billion to $1.4 billion, we think that's a solid number and so by implication, that means we'll see kind of more payments upfront as we get all of the suppliers in place. So that's probably the best way I would characterize it and then thereafter, as we go through the different milestones of the next two to three years, it would be more of a kind of a flow tied to the contract and the PLD operational milestones.

Great. And one other question for you, Andrew. The you had given the expected OpEx for the Lightspeed program, I'm assuming that is OpEx that's running through the P&L and stripped out whatever is getting capitalized then can you give us a sense of what is getting capitalized in as part of the program? And is that again, if and as the construction goes and more gets capitalized, do we see that Telesat OpEx staying flat because everything gets rolled into capitalization? Or do you expect it to grow in the out years. I mean, it's going to grow in the out years.

But yeah. So in terms of the sources and uses, we tried to make it a little bit clear in terms of the CapEx spend is third-party CapEx spend, so with vendors. So labor is in the operational uses, whether it's capitalized or not, just so you can see the outflow of funds and what the purpose of the outflow of funds is. So in that regard and you know, the capitalized costs are there yet in terms of the overall level of effort, the amount of capitalized stuff we build up, we ramp up our staffing infrastructure quite rapidly and therefore you get to sort of a constant state relatively quick into Pro in terms of de-levering.

I understand. I had another question. You've predicted the data side of the business being down about $75 million as some of those contracts roll off. Have you programmed in being able to resell some of that capacity? And what sort of lock have you seen on the data side and reselling?

Yeah, for sure. We assume that there's some capacity that has come back in inventory that will resell. And I suspect we've already resold some of that on and the guidance that we gave for this year will have kind of captured our assumptions at least about all of that. And was there another part to your question, Chris?

No, that was it was.

Okay.

But I will ask you a difficult question, which is the elephant in the room question, Intelsat SES panel, you probably have Lightspeed on order before the regulators get done with that, but what are your general thoughts on that transaction and how it impacts you?

Yeah. Well, first off, I mean, we all know that those were conversations that have been taking place between SES and Intelsat some time ago, and they both confirmed that there had been discussions and then they both have each announced that those discussions had come to an end. But yeah, I was never persuaded that you know that was the end of it. So it wasn't a big surprise to us. I'd say that they made the announcement they did recently. And I think it's that announcement, I think fits within them kind of the same framework that we've been talking about for a little while, which is to say the industry is changing quickly. There are these new entrants in the StarLink and the future hyper that are on impacting the industry and we all believe that industry consolidation would be a response to that. And we've seen some already with ViaSat and Inmarsat and Eutelsat and OneWeb. And now this big transaction as companies kind of organize themselves, too. We remain competitive in this changing landscape. For us on I don't think it's going to have any real impact in terms of how we compete in the market, but the prospects of Lightspeed and the like are we've been competing against each of them, you know, for decades now. And they each, they're hitting each meaningfully larger than Telesat coming together. Obviously, they'll be larger still, but I don't think there's anything that should be too dramatically different in the combined competitive profile versus us competing against each of them individually. So yeah, all the say, we weren't surprised if it fits with our expectation that consolidation would happen in the industry. It's probably not the last deal of certainly there will be there are fewer players as more consolidation takes place, but I suspect that there could be more consolidation still in the future. So anyway, that's how we think about it. And again, I mean, where, you know, actions speak louder than words, you know, our vision is that I don't think it's vision anymore. I think we're all watching it real time. There is a transition that's taking place in the industry right now as particularly what we think of as enterprise users, which is to say, non-video it's in the process of transitioning off of GEO and down to LEO and for good reason, something that, you know, we saw coming something that we think that we're well organized for with our friends for Lightspeed. So anyway, that's where our focus is right now, just making sure that we execute well on Lightspeed and bring to the market. We're convinced our addressable market is focused on. So our enterprise customers, government customers and the aero and maritime customers there, they're wanting, affordable, high throughput, low latency, distributed, resilient kind of seamlessly connected connectivity, and we'll be able to deliver that in Lightspeed.

The next question is from Marcello Chermisqui from Ares Management.

Hey, guys, thanks for taking the question. You said earlier in response to a question that you will be making a CAD120 million restricted payment in the coming days, given that you already have such a significant amount of cash at the LEO entity and are waiting to spend the money until once you finalize terms later this summer, what is the rush to make the cash transfer so soon?

So hey, Marshall, thanks for the question. First off, I think the I mean --

It's USD150 million -- it's USD120 million.

And then as far as urgency on look, we're moving forward with Lightspeed in advance and by moving forward Lightspeed, I mean, we are going to be spending meaningful amounts of money this year. You've heard the CapEx guidance that we've given up in advance of completing these definitive agreements. We have a sufficiently high level of confidence on the one hand that will conclude those definitive agreements. And on the other hand kind of a strategic urgency to get going with the Lightspeed program. So we're moving out and when we talk about the CapEx spending that we've guided to this year that like we're opening the spigots now and MDA is going to be and our other vendors are contracting with the supply chain, ordering parts, hiring people, we're moving out here. So that's that some that's the plan. That's what we'll be doing.

That makes sense. And in terms of discussions, regarding an extension on your revolving line of credit. I know it's due later this year. I know today you're in compliance with the revolver covenants, but if I roll forward your leverage ratio at year end based on the guidance and I understand the guidance -- and I understand you're not tested today since there's no revolver usage, but I think the company may not be in compliance by year end, but do you think that could impact it like the revolver? Do you think it's fine without having a revolver? How are you thinking about discussions.

Yes, Marcello. It's certainly something that we look at that we review, we have a business that generates our GEO businesses, which I talked about earlier a few minutes ago is still generating cash, in terms of a revolver in 17 years, I believe we have drawn our revolver once.

Yes, totally makes sense. And then just one last question on utilization that have declined so much sequentially. I know there's an interplay between utilization and then just like what your pricing per transponder and can you talk about just linked to how we think about utilization? Like are you targeting a certain utilization? Or how do you think about where utilization is worth versus where you want to be?

Yes, I will take it. We target a 110% utilization, to be honest with you. I mean, that's that's where we'd like to be probably everyone does, but barely anyone really gets there. I still think even with the decline in utilization that we've had, we still probably have one of the highest asset utilization numbers in the sector right now, it concluded this quarter at 77%, but it is down meaningfully from where we ended Q4, which was up at around own 85% and -- what's driven that the biggest culprit has been the business we've lost in the maritime space. Fundamentally, we talked about that on our last call that there was some renewals that we did not secure, particularly in the maritime space that has moved that have moved mostly as far as we can tell you over to StarLink. And so we're -- I'm not going to guide right now on what we think utilization will be in the future. But we're focused on remarketing that capacity. From a pricing perspective, there's been downward rate pressure in the industry for years now. And the kind of the slope of that decline has varied throughout those years. So we were -- we've seen significant downward pricing pressure. I'm looking at one of my colleagues probably 5 or 6 years ago, it moderated. There's still downward price pressure, but the extent of it had moderated some and again, I'm speaking as if we're living in a margin as world. It really varies by region on. And we had noted before that probably where we were seeing the steepest declines were in Africa, in Latin America. But again, things started to moderate a little bit right, I'd say on is the slope of the downward pressure is probably picking up a little bit again, but not dramatically. So anyway, so but look, I mean, the laws of supply and demand are alive and well in our industry, like in others, and so on. So yes, but that that's what has accounted for the decline in utilization. It's mostly been in the maritime space. There is some downward pricing pressure, but I'm not what I would describe as sort of extreme at this at this point.

The next question is from Matt Lapides from ABRY Partners.

Hey, guys. Thanks for all the color here. I wanted to follow up on the maritime comments. Can you talk about what type of maritime customers you've been diesel or the cruise lines are the large global shipping companies and both for the personal in our large yacht segment, any color you can provide on the type of maritime customers producing the most defection mentioned?

Yes, the biggest has been in the crude space and in particular probably for us in the Caribbean, we just had a meaningful amount of capacity there. So I'd say that it accounts for the lion's share of the losses on crews in Caribbean. And then there's probably on the margins. There's been some erosion. I don't know, maybe maritime transport and stuff like that, but the driver has been crews.

Okay. And then can you talk about how much of that business. And if you look back three years ago, how much of that is now gone? And it is it more of it to come really well on trying to get at?

Yes, we've been staring at that, I'll ask my colleague, John. We've swapped a lot of the head. John, do you want to offer any thoughts around that?

If you go back three years. That's probably not the right time to go back to because in the past two years, we had some pretty significant increases in maritime but closed. But from the past two years to this year, we're expecting roughly half revenue revenue declined by roughly half from where we were from where we were over the past couple of years.

That's helpful. And then just one follow-up to the earlier question about the yield on government of Canada as our equity position in video. I just wanted to make sure I understand the flow of funds, if 5, 6 years from now might speed up whatever the hotel would be in terms of generating lots of cash and in the LEO subsidiary business, if there's excess cash flow after servicing the debt, we have $1 of excess cash flow. Thers's a dollar of excess cash flow JVs that we export the first dollar due to does it go to the equity holder that would go to the equity holders of the India subsidiary or is it shared ratably amongst on up into the ultimate holding company? Is such that all stakeholders would get their pro rata share of that?

There something in the contemplated definitive documents that we're talking about that would radically share that between the equity holders at Telesat Corporation and Telesat. LEO? No.

The next question is from Evan McFadden from Cormark Securities.

Okay. Thank you. And now a couple of questions on. So if I understand right, I think you said that you expect to conclude a definitive agreements with the government and it could take as long as till the end of the summer. Is that correct?

Yes. Again, I mean, we're dealing with the government of Canada here. So I can't be too precise about the timing on when exactly it will come to a close, but that's our expectation given the momentum that we have and what an extensive blueprint we have in terms of what the terms are. And yes, we think that having this done by the end of the summer is a realistic timeline.

Okay. And so even though you may not have those agreements concluded until the end of the summer, you're still going to spend one to $1.5 billion. I guess you can do that because you have all that cash and nonrestricted says, is that is that what gives you the confidence to just spend where you are?

It gives us what I mean what gives us the confidence to spend that money before having the definitive agreements concluded is just a lot of conviction that we'll get those definitive agreements done, given all the good work that we've done with these funding sources and how much these funding sources wanted to see this project move forward. And then as I said on the other hand, we had to get go and we've got pricing locked in with our suppliers, and we've got a great opportunity out there in the market. Our customers are wanting us to have this service available to them as quickly as we can if they had their way, we'd have it available like now. So we've got to move and waiting around for another three or four months knowing as we do and we believe that again a high degree of confidence that we're going to get all this funding that we need. It just doesn't seem to be on balance the right thing to sit on our hands and go through a process that we're pretty, have a lot of conviction about where we're going to land with these funding sources. We so yes, we've decided to move forward and move forward with speed.

Okay. And so I would imagine that the vast majority of that spend on Lightspeed will be on satellite build and design or anything like that?

The most significant portion of the CapEx that we'll be investing this year is yes, it's going to go towards satellites. There'll be some launch payments. There'll be some other stuff for user terminals and landing stations. But with the big E will be, our friends at MDA, giving them the cash that they need to turn on their supply chain and move forward.

Right, so because MDA's prime contract, all that money is going through MDA right?

I wouldn't say all of it, but I'd say a very meaningful portion of it.

Right. Okay. And then just on just a question on your on the fact that you lost some business to maritime, it's kind of styling. It's my understanding that StarLink doesn't offer any SLAs and you and when you have like enough, you would offer SLAs. So wouldn't that give you a competitive advantage?

Yes. We think it will, but we need or want to be constellation to deliver the service so that that's why we're bullish about our prospects to take the market share that we need in order for that project to be successful. I think there are a number of features of the Lightspeed constellation that will it gives us a good competitive advantage and allow us to present a tremendous value proposition to the customer community, the ability to provide SLAs and CIR and give our customers an enormous amount of autonomy to manage the bandwidth that there will be our contracting from us. I think all of those things will allow us to be successful. But yes, that's one of the features for sure we'll be offering our customers SLAs on and we think that's important to some subset of them.

The next question is from Alex Nolan from Invesco.

Thanks. My question was answered. I wasn't able to take myself out of the queue.

Thank you.

The next question is from Walter Piecyk from LightShed.

I apologize if this is kind of a redundant question, but I've kind of heard this and we'll make sure that this is put to bed. This MDA will start constructing these satellites prior to you finalizing the agreements with the government of Canada, correct?

Correct.

And then in terms of the overall market, now that you've seen a little bit more of what StarLink has been doing different verticals, they've got they've gone into Russia, many people into at least initially expected them to have to go from maritime. I know that there were some of your peers that were claiming they couldn't do airplanes that are on airplanes. Just curious when you look at the market opportunity for your LEO constellation, has it changed at all or as you kind of approach construction now?

I don't believe so. Listen, StarLink is having a big impact on the market and they're having an impact on our business, which, I don't love. But what I do love is it is, I think 100% validated the strategic direction that we took Telesat in going some years back and you're right there, there were folks that doubted whether they penetrate the maritime market and the backhaul market and doubts about the aero market. We were convinced that a LEO architecture was not only a good infrastructure to support those services, but but one that would have a significant competitive advantage and StarLink is demonstrating that in real time. And so but no -- our are market plalns and business plan, it's intact. Yes, we're seeing, yes, here again for me. It's just reinforced everything our customers know now that LEO is the best way to address so many of these requirements, they are taking services from StarLink and it provides a pretty good service, but it doesn't give everything -- everyone -- everything that they want. And we've talked about, the SLAs. We've talked about their ability to manage their own bandwidth pools and whatnot. So it doesn't give enterprise users, everything they need number one. Number two, the customers don't want to put all of their requirements with one supplier. They don't do that with all sorts of of their enterprise infrastructure, whether it's cloud or, you know, Internet connectivity kind of writ large, whether it's satellite or not. So they want multiple providers. Yes, there's huge opportunity here. So there's nothing that we've seen in StarLink that causes us to question the various assumptions that we made when we got ourselves on this Lightspeed path, if anything, all of our thinking around the intensity of the opportunity and why LEO will have a competitive advantage, capturing those requirements has been validated by everything we've witnessed over the last 12 plus months.

In past calls I've talked about or you talked about the ability to sign up. People want to know pre reserve capacity, right? And existing enterprise customers from anyone saying, hey, we're going to take part. And that's and I think the issue was getting to that point of finalization and that once that occurred, we might be able to see some of those press releases start to hit. Understand that things on finance or actually be finalized. If you're if you started the construction, isn't that sending a message to these customers that we can start seeing some releases from you guys are some indications of enterprises signing up for capacity on the new constellation?

Yes, listen. You're right. I think, you know, calls like this one and we're in a small industry. So when this supply chain all gets under contract that that will ripple through the industry if anyone had any doubts about whether or not Telesat was going to proceed with this program, those those should be put to rest -- they haven't already been put to rest. I think they should be put to rest in the coming days and weeks. So I think that it will be a great sign to the customer community that, Lightspeed is common and look for only about our two years away from launching our first satellite. So right, it isn't that far away on and we are going to be very focused on trying to secure customers and making those announcements and reporting backlogs so that, all sorts of different audiences can track the progress we're making up. My own expectation is it will still be closer to in-service when we're able to make more of those announcements. But but I still have an expectation that we'll be able to announce, our commitments in advance of being in service. And you can imagine that with all of my colleagues here on the commercial side, we're very focused and we're very engaged with the customer community right now, and they're excited about Lightspeed. So yes, I'd say there is stay tuned. We're very focused on that, and we'll be very transparent about the commitments that we get.

If I can just one last one on EchoStar. I mean, they're facing some financial distress, particularly as they approach at the end of the year, which is I think the time for renewal, have you had any preliminary discussions? Any thought on that made how that may play out?

Well, you know, we talked about on one of the headwinds that we're facing this year is an expectation that they use the renewal that we have coming up. It comes up in October is on our Nimiq-5 satellite, which on which they use do the exclusive user of that satellite. And so the guidance that we gave for this year, captures all sorts of different outcomes that we might get there. And on the last call, we had said that we've started the conversation with EchoStar about their thoughts about whether they're going to want to renew or not on. But we haven't on advanced IT that much since we had our last call just six weeks ago on. And so it's not clear to me where we'll end up. I think, regardless of the scenario. And we're going to see a meaningful reduction in the amount of revenue that we recognize from Nimiq-5 post renewal date in October. But whether they renew all of it some of it or not of it on. It's still not clear to us at this point in time. And we've got a great relationship with EchoStar. We've worked with them for it years. We know that Nimiq-5 is being used to distribute content today that their subscriber base. We know that they do have a lot of other things that they're focused on and saving cash is pretty high on that list. So anyway, all the say that, yes, we'll give an update once we have won. But right now, we don't have an update from the call that we had just six weeks ago.

Thank you. At this time we will turn the call back over to Mr. Gober. Please go ahead.

Well, operator, thank you very much and everyone. Thank you for joining us this morning, and we look forward to chatting with you when we release our Q2 results. So thank you all, and have a nice weekend.

Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.