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Eutelsat Misses Forecasts as Weak Video Sales Offset Growth in Government Services

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Eutelsat (ETL.PA), the French satellite operator and rival to Elon Musk’s Starlink, reported disappointing first-quarter results on Tuesday as a sharp drop in its video broadcasting division overshadowed solid growth in government contracts, particularly in Ukraine.

Revenue for the quarter ending in September fell 1.2% year-on-year to €283 million ($330 million) on a comparable basis, missing analyst expectations of €295 million, according to company data.

The company’s video segment, which still represents 47% of total revenue and reaches over a billion global viewers, declined 10.5%, reflecting a prolonged slump in satellite TV demand and the continued fallout from European sanctions on Russian broadcasters. French regulators recently ordered Eutelsat to halt transmissions of two Russian channels tied to sanctioned entities — a move the company said would cost around €16 million this year.

Eutelsat’s other major division, government services, was the standout performer, rising 18.5% year-on-year to €52.4 million, driven by defense and connectivity contracts in Eastern Europe. Chief Financial Officer Christophe Caudrelier told analysts that while demand for satellite broadband is growing rapidly, Starlink continues to dominate the B2C market, challenging Eutelsat’s growth trajectory.

Through its subsidiary OneWeb, Eutelsat operates more than 600 Low Earth Orbit (LEO) satellites, giving it the only LEO constellation besides Starlink — a key part of Europe’s push for independent satellite infrastructure. A €1.5 billion capital infusion led by France and the UK is expected to close by the end of 2025 to help bolster competitiveness.

Despite the weak quarter, Eutelsat maintained its full-year and long-term targets, betting that its diversification into broadband and government services will offset the gradual decline of its legacy video operations.

Eutelsat Meets Revenue Forecasts as OneWeb Gains Government Clients Amid Geopolitical Shifts

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Eutelsat reported €300 million in third-quarter revenue for its 2024–25 fiscal year, slightly below last year’s figure but in line with analyst expectations. The French satellite operator, which owns OneWeb, the world’s second-largest low-Earth orbit (LEO) satellite constellation, is seeing a rise in government demand for secure, non-American and non-Chinese satellite services.

Key Financials:

  • Q3 revenue fell 1.9% year-on-year

  • Analyst consensus was €302 million, with estimates ranging from €294 million to €307 million

  • Government services revenue rose 10.2%, the fastest-growing segment, fueled by geopolitical demand for independent satellite connectivity

Strategic Positioning:

Eutelsat’s OneWeb network, with over 600 LEO satellites, offers secure broadband services to governments and militaries at approximately 1,200 km altitude. This positions it as a European alternative to SpaceX’s Starlink, which has over 7,000 satellites and deep traction with commercial clients.

Eutelsat CFO Christophe Caudrelier emphasized the strategic importance of non-U.S. and non-Chinese alternatives in satellite communication:

“With the current geopolitics, there is interest from many countries… Many non-aligned countries are seeking alternative, non-American, non-Chinese solutions,” he stated.

Challenges & Developments:

  • The company experienced a drop in its U.S. Department of Defense contract renewal rate to 50%, citing structural changes in U.S. spending under President Donald Trump’s administration. Without that one-off, the renewal rate would have been closer to 70%.

  • Eutelsat also took a €16 million revenue hit due to EU sanctions requiring the cessation of Russian channel broadcasts.

  • The firm is actively seeking new capital investors to support its future financing needs.

Despite the recent CEO replacement, Eutelsat reaffirmed its full-year outlook, signaling stability in operations as it navigates market transitions and growing demand for secure satellite services from non-aligned nations.