Good morning, and welcome to the MDA Space Ltd. Conference Call and Webcast. This call is being recorded on March 4, 2026, at 8:30 a.m. Eastern Time. For those participating via webcast, please note that the company has included a presentation. Webcast participants can advance the slides by using the arrow seen in the presentation window. I would now like to turn the call over to Jim Floros, Vice President of Investor Relations at MDA Space. Please go ahead.

Thank you, Kel. Good morning, and welcome to MDA Space's Fourth Quarter and Full Year 2025 Earnings Call. Mike Greenley, our CEO; and Guillaume Lavoie, our CFO, will lead today's call and share some prepared remarks before taking your questions. A couple of housekeeping items before we begin. Today's call is accessible via webcast on our Investor Relations website. All our disclosures, including the press release, MD&A and financial statements are available from our Investor Relations website as well as SEDAR+. I would also like to remind you that today's call will include estimates and other forward-looking information, which may differ from actual results. Please review the cautionary language in today's press release and public filings regarding various factors, assumptions and risks that could cause actual results to differ. In addition, during this call, we will refer to certain non-IFRS financial measures. Although we believe these measures provide useful supplemental information about our financial performance, these measures do not have any standardized meaning under IFRS, and our approach in calculating these measures may differ from that of other issuers and therefore, may not be directly comparable. Please see the company's quarterly report and other public filings for more information about these measures, including reconciliations to the nearest IFRS measures. And with that, it's my pleasure to turn the call over to Mike.

Thank you, Jim. Good morning, and thank you to those joining us today to discuss our fourth quarter and full year 2025 financial results. Before we get into our update, I want to start by acknowledging and thanking the MDA Space team for delivering another exceptional year of performance, our best yet since the IPO. The level of growth we achieved this past year would not have been possible without your hard work, innovation, and total mission focus. Our talented teams around the world are the reason we continue to be a trusted mission partner and leader in the expanding space and defense industry. In 2025, we delivered record results for both revenue and adjusted EBITDA. We grew revenues to $1.6 billion, an increase of more than 50% year-over-year and expanded our adjusted EBITDA to $324 million, up almost 50% versus last year. In addition, we maintained solid adjusted EBITDA margin of approximately 20% for the full year 2025. Our financial performance enables us to continue investing in our business as we deployed $242 million in capital expenditures to support our growth initiatives while also generating positive free cash flow of $165 million. Taking a step back, 2025 built on MDA Space's track record of consistently delivering growth over the long term. Since 2020, our backlog has grown sevenfold to $4 billion, underpinning a revenue growth CAGR of 32% over the past five years, exceeding our stated goal of 20% to 30%. Importantly, this growth has been profitable with a demonstrated adjusted EBITDA margin of 20% yet again in 2025. A key driver of this profitable growth relates to the investments we've made to develop industry-leading products and capabilities. We have been deliberate in our focus on R&D as a differentiator for MDA Space. We were ranked 32nd within Canada's top 100 corporate R&D spenders this year. This is the third year in a row where MDA Space has been included in this ranking. In addition, MDA Space ranks within the top 20 Canadian companies when it comes to the overall size of our portfolio of patent families and within the top 10 Canadian companies when it comes to the annual patent filings in Canada over the last five years. We leverage our R&D investments to deliver value to our customers globally, and we combine this with disciplined operational execution to convert top line growth into profitable cash-generating operations, resulting in a robust balance sheet and a conservative leverage profile. This provides us with flexibility to continue investing in our business to capitalize on growth in our industry as evidenced by the investments we are making in developing commercial and dual-use products and services, expanding our manufacturing capacity and increasing our vertical integration such as the acquisition of SatixFy. Looking ahead, I'm pleased to introduce our 2026 financial outlook. Our backlog of $4 billion at the end of 2025 provides us with strong revenue visibility. And for the full year, we expect revenues to be $1.7 billion to $1.9 billion, representing year-over-year growth of approximately 10% at the midpoint. We expect full year adjusted EBITDA to be $320 million to $370 million, representing year-over-year growth of approximately 7% at the midpoint, with adjusted EBITDA margin of 18% to 20%, in line with our original IPO guidance. We expect capital expenditures to be $225 million to $275 million to continue to support our growth initiatives. And lastly, we expect free cash flow to be neutral to negative for the full year due to normal working capital fluctuations on our existing programs and continued investments in growth CapEx. As we think beyond 2026, the team is energized by the strong momentum and positive trends we are seeing in our end markets, and MDA Space has the right technology portfolio to capitalize on the opportunities ahead of us. We continue to expect to deliver significant revenue growth on average over the next several years. All over the world, governments, defense agencies, and corporations are finding new and valuable ways of using the capabilities of space with the benefits of space-based and dual-use solutions expected to grow significantly in the coming years. The space economy is estimated to have grown to USD 626 billion last year, according to Novaspace's Space Economy report, and is forecasted to surpass $1.8 trillion by 2035 according to the World Economic Forum projections. A tenfold reduction in launch costs over the past ten years, combined with more powerful satellite technologies supported a record 329 launch attempts in 2025 and 98% of those were successful. Demand for space-enabled global connectivity is expected to result in more than 43,000 satellites to be launched over a decade starting in 2025. Renewed interest in space exploration is expected to increase the number of missions by 185% over the next decade to 855 with a significant emphasis on establishing a sustained presence on the moon. And space is increasingly emerging as a mission-critical and essential military domain, complementing the traditional fields of air, land, and sea. Over the past year, we have observed defense spending on space by the world's leading powers surge to unprecedented levels as space has become critical to safeguarding national interest in an evolving geopolitical environment. In particular, the U.S. dedicated $175 billion to its Golden Dome space defense architecture, Germany pledged EUR 35 billion for next-generation satellite and space situational awareness capabilities. And here at home, Canada confirmed that space will be a core element of its current 2% of GDP NATO defense spending commitment with plans to increase this budget to 5% of GDP by fiscal year '35, '36. At 5% of GDP, this would translate to approximately $155 billion in annual spend for Canada, an increase of $90 billion compared to fiscal year '25, '26. And we expect a meaningful amount to be allocated to defense-related programs for which MDA Space is well positioned to deliver given our long-standing heritage as a trusted contractor for both space and defense opportunities with the Canadian government for decades. Recently, we have demonstrated that MDA Space is in a strong position to participate in defense opportunities through recent announcements such as the strategic partnership with the Government of Canada's Department of National Defense and Telesat to develop and deliver military satellite communication capabilities in the Arctic, a program valued at over $5 billion. In addition, we were awarded a contract on behalf of the Canadian Space Agency to procure long lead parts for the RADARSAT constellation mission replenishment satellite, part of the government's $1 billion RADARSAT+ initiative. We have also been selected as an approved supplier by the U.S. Missile Defense Agency, receiving an IDIQ contract related to the SHIELD program and established an MOU with Hanwha Systems to explore opportunities to collaborate on the development of South Korea's sovereign K-LEO defense constellation. Supplementing this will be opportunities to participate as a key supplier of satellite subsystems similar to contracts we were previously awarded to support U.S. Space Development Agency missions. Beyond space, we are also in a strong position to be Canada's national defense champion. Leveraging our deep mission experience and complex defense capability that has supported Canadian and allied operations for decades, we recently launched 49North, a dedicated defense organization exclusively focused on delivering secure multi-domain C5ISR and mission-critical capabilities for Canada's national defense priorities outside the space domain. This launch reflects increasing demand for sovereign defense capability across land, air, maritime, and joint domains. By bringing together proven defense and mission-critical systems expertise under a dedicated organization, we enhance focus, accountability, and disciplined program execution. 49North will be focused on building a strong pipeline in non-space defense, actively partnering with domestic and global industry, and investing in the capabilities required to support Canada's national defense priorities. All this activity bodes well for the continued growth of MDA Space as we are pleased to announce today that as a result of our annual pipeline review and strong market and customer demand, our pipeline contains $40 billion in cumulative opportunities over the next five years. Within this pipeline, $10 billion includes either opportunities with government customers that have downselected MDA Space or follow-on opportunities with existing customers. For opportunities where we have been downselected, this means we are now part of a narrow list of candidates who have moved on to the next stage with the contract award process. In addition, our pipeline is well distributed between government and defense and commercial opportunities. The geographic distribution is balanced between significant opportunities here at home in Canada and the United States with growing opportunities within Europe and other parts of the world, including Southeast Asia. This pipeline should allow us to continue to diversify our customer base and international footprint and combined with our backlog provides us with confidence to continue to drive profitable and stable revenue growth for years to come. I'll now spend a few minutes on each of our business areas. In Satellite Systems, we continue to see good momentum in the market with our teams working to advance multiple requests for communication satellite solutions and a growing number of constellation projects, both for commercial and government applications. We are also seeing strong activity levels from customers and our opportunity pipeline remains robust. Over the past year, our Satellite Systems business delivered year-over-year growth of 85%, a remarkable achievement. On Telesat the Lightspeed program, we continue preparations for the program's engineering and manufacturing development and continue to make progress on completing the final critical design review. We expect to begin delivering a small number of satellites in 2026 with deliveries ramping up in 2027. The team continues to work on the Globalstar next-generation LEO constellation. We achieved a significant milestone with the completion of the critical design review. Work is being carried out through development activities on life testing of equipment and procurement activities are advancing with equipment deliveries taking place. We have also begun assembly and integration activities of the first satellites. In addition, we continue to advance work on the initial Globalstar program, where MDA Space is the prime contractor to enhance Globalstar's LEO constellation through the addition of 17 satellites, which support SOS features and direct-to-device communication on certain Apple products. In Q4, the team continued to progress flight hardware production and advanced satellite integration and test work with 15 satellites currently on the shop floor in our facility with 8 satellites successfully completing functional acceptance testing. After experiencing some delays last year, we are tracking towards the revised timeline established in Q4 for deliveries this year. We are also making great progress with our Montreal facility expansion, which will add 185,000 square feet to our existing satellite production facility. The manufacturing and engineering group that will support the new production lines have moved into new office space, and the new facility now contains printed circuit board production lines and is capable of producing flight hardware. Once complete, this facility will be one of the world's largest high-volume manufacturing facilities in its satellite class. Finally, we have entered into a termination agreement with EchoStar following the cancellation of the contract they awarded us last year, and we are turning our focus to the other opportunities we are pursuing within our pipeline. Moving to our Robotics and Space Operations business. We continue to see good traction and activity levels on both the government and commercial fronts. As the world leader in on-orbit space robotic operations and decades of experience in building and maintaining the current international space station, we continue to engage with commercial LEO destination companies to provide inputs to their design concepts for SKYMAKER robotics compatibility. MDA SKYMAKER is our commercial suite of robotics products specifically designed to be configured to suit a variety of mission applications, including space station assembly and servicing. While the International Space Station is currently slated to be retired by 2030, NASA is supporting the development of commercially owned and operated space stations in low earth orbit, which the agency, along with other customers can purchase services and stimulate the growth of commercial activities in microgravity. We expect NASA to release the procurement call for the next phase of CLD development in the coming months, and we look forward to continuing to support the CLD candidates in their system development and bids to NASA. This past December, we successfully demonstrated our autonomous lunar logistics capabilities through a prototype vehicle developed for the CSA's lunar utility rover. Using the CSA's analog train in Saint-Hubert, Quebec, the demonstration showed our capability to autonomously transport large cargo elements from a landing site to a habitat, robotically manipulate smaller payloads, and have multiple autonomous vehicles coordinate motion and work together on tasks. These are key logistics capabilities pivotal to humanity's return to the moon, and we are proving that we can deliver. Lastly, our team continued to make progress on executing Phase C of the Canadarm3 program while ramping down on Phase B activities, conducting closeout activities throughout Q4. Moving to our Geointelligence business. In Q4, we were pleased to have been awarded a $45 million authorization to proceed contract by the Canadian Space Agency for critical long lead parts that are required to build a replenishment satellite for the RADARSAT constellation mission as part of the government's $1 billion RADARSAT+ initiative. Alongside this ATP contract, the CSA also announced its intention to further contract MDA Space to build, test and launch this replenishment satellite. In Q4, the team also continued to progress work on CHORUS. Our spacecraft electrical integration and testing activities progressed well through the end of the year and made solid progress in testing the full SAR antenna, which was well characterized on our near field test range. We started to validate some of our flight control procedures related to the ground segment and construction work continued for the new mission control center, and we continue to track to our launch window in late 2026. Before I hand it to Guillaume, I want to mention that Alison Alfers has resigned from the Board of Directors due to unexpected family circumstances effective March 3, 2026. Ms. Alfers has been a valued member of the Board since 2022, supporting MDA Space during this exceptional period of growth. We are grateful for her contributions and extend our sincere thanks and best wishes to her and her family. With that, I'll hand it over to Guillaume.

Thank you, Mike, and good morning, everyone. Overall, both Q4 and full year 2025 delivered record results with solid growth in revenue and profitability, combined with strong free cash flow generation and a solid backlog to end the year, positioning us well for 2026 and beyond. Total revenues for the fourth quarter were a record $499 million. This represents $153 million or a 44% increase over the same period last year. The year-over-year increase is driven by higher revenues from our Satellite Systems business, including the impact of the EchoStar termination agreement. On a full year basis, total revenues were also a record, coming in at $1.63 billion, an increase of 51% over 2024. The year-over-year increase in revenues was primarily driven by higher volumes of work performed, again, primarily in our Satellite Systems business. By business area, revenues in Satellite Systems of $371 million in the fourth quarter of 2025 were $137 million or 58% higher compared to the same quarter in 2024. The strong showing was driven by the increase in volume of work on the Telesat Lightspeed program, the Globalstar next-generation LEO constellation program and the impact of the closure of the EchoStar agreement. On a full year basis, revenues for Satellite Systems increased to $1.1 billion, which represents an increase of more than $500 million or 85%, which is remarkable from the same period in 2024. In Robotics & Space Operations, revenue of $66 million in the latest quarter was in line with the levels seen in Q4 2024 and in line with our expectations for this quarter due to the timing of revenue recognition on nonlabor costs. For the full year 2025, revenues were $309 million, translating into a year-over-year increase of $29 million or 11%. This increase is primarily driven by the higher volume of work performed on the Canadarm3 program as volume of work on Phase C activity increased throughout the year. Revenues in our Geointelligence business of $62 million in the latest quarter represents an increase of $15 million or 31% year-over-year due to volume of work on programs. For the full year 2025, revenues for Geointelligence were $214 million, representing a $12 million or 6% increase compared to 2024. Moving to gross profit. For Q4 2025, gross profit was $127 million, representing a $45 million or 55% increase over the same period last year. Gross margin in the latest quarter was 25.5% and compares to 23.6% for the same period in 2024. For the year, gross profit was $410 million, representing $128 million or a 45% increase over 2024. Gross margin for the year was 25.1%, which compares to gross margin of 26.1% in 2024. The year-over-year change in gross margin is driven by evolving program mix. Adjusted EBITDA in the quarter was a record $96 million compared to $71 million in Q4 2024, driven by higher volumes of work as we continue to convert our backlog. Adjusted EBITDA margin was 19.3% in Q4, and the slight decline in margins compared to Q4 of last year is attributable to our evolving program mix. On a full year basis, adjusted EBITDA was also a record, coming in at $324 million, up from 2024 levels of $217 million, representing a $107 million or 49% year-over-year increase. Adjusted EBITDA margin of 19.8% for the full year 2025 compares to 20.1% for 2024 and is driven by, again, an evolving program mix. Adjusted net income in the quarter was $59 million compared with $35 million in Q4 2024, and the year-over-year increase of $23 million or 67% was primarily driven by higher operating income. Full year adjusted net income of $190 million was up 71% year-over-year, also largely driven by higher operating income. And finally, adjusted diluted earnings per share of $0.45 in Q4 and $1.46 for the year were up 61% and 66%, respectively, versus the same period last year. Moving to our backlog. We ended the quarter with a solid $4 billion backlog, which is slightly below December 31, 2024, driven by continued conversion of our backlog into revenue. This is normal and is to be expected due to the order level in 2025, which will vary from one year to another. We continue to expect that MDA Space will be a growing company, supported by our pipeline containing $40 billion in cumulative opportunities over the next 5 years. As mentioned by Mike, within this pipeline, $10 billion includes either opportunities with government customers that have downselected MDA Space or follow-on opportunities with existing customers. Moving to CapEx. We remain focused on making the right investments in the business to support our strategic growth initiatives. In Q4 2025, we spent $70 million on capital expenditures, up $61 million from last year. We continue to be on track with setting up production lines to ramp up high-volume satellite production, and we have virtually completed our investment in MDA CHORUS. In addition, we have started to capitalize work related to our space-grade chip following the acquisition of SatixFy. On a full year basis, our capital expenditure was $242 million compared to $198 million in 2024. We demonstrated once again this year that we can execute our investment plan to deliver sustainable and profitable growth in the future. Cash from operations during the quarter generated $51 million compared to $376 million in Q4 2024. The year-over-year decrease is primarily driven by normal program-related working capital fluctuations in the quarter. Free cash flow was slightly negative at minus $20 million in the quarter versus positive $315 million in the prior year. For the full year, cash from operations generated $407 million compared to a cash generation of $813 million in 2024. The year-over-year decrease in operating cash flow, again was driven by normal program-related working capital fluctuations, including higher advanced payments received in 2024. Free cash flow was a healthy $165 million in 2025, in line with our guidance of neutral to positive free cash flow for the full year and compares to prior year free cash flow of $615 million. Moving to our balance sheet. We ended the quarter with a strong financial position with net cash of $152 million, available liquidity of $669 million under our credit facility and total available liquidity of $821 million. Our net debt to trailing 12-month adjusted EBITDA ratio was a healthy 0.4x. In the quarter, we strategically evolved our capital structure through the issuance of $250 million in senior unsecured notes due 2030 and with an amendment of our senior revolving credit facility of $700 million, extending the maturity to 2030 and also allowing for a $150 million accordion feature. Our strong balance sheet position provides flexibility and liquidity, allowing us to deploy capital on the right strategic opportunities to support our strong growth profile. In summary, this was a strong quarter to wrap up fiscal 2025, and we continue to be encouraged by the positive momentum we are seeing across our businesses. I also want to take the time here to recognize the work, dedication, and passion of the MDA Space team. Without each employee's contribution, these outstanding results would not have been possible. Now let me turn to our 2026 outlook. As Mike noted, we are introducing our 2026 financial outlook, and we are well positioned to capitalize on strong customer demand and robust market activity, given our diverse and proven technology, including our product offerings. For the full year, we expect revenues to be between $1.7 billion to $1.9 billion, representing a year-over-year growth of approximately 10% at the midpoint of the guidance. This is off the back of extraordinary growth in 2025. When comparing the revenue growth between 2020 and the midpoint of our guidance for 2026, this represents a CAGR of close to 30%, which approaches the high end of our stated goal of 20% to 30% CAGR for the business. We expect full year adjusted EBITDA to be between $320 million and $370 million, representing a year-over-year growth of approximately 7% at the midpoint of the guidance and adjusted EBITDA margin of 18% to 20%. The adjusted EBITDA range is to provide flexibility for us to strategically scale up the business for future growth, particularly in R&D and in SG&A and aligns with our historical goal since the IPO and continues to represent very solid profitability. We expect capital expenditures to be between $225 million and $275 million in 2026 to support another year of investments related to expanding production at our Montreal facility, investments in chip development, and investments to support commercial growth initiatives. Although we continue to invest in our future, our capital intensity as a percentage of revenues is reducing from an average of over 20% between 2021 and 2024 to now less than 15% in 2025 and 2026 at the midpoint of our guidance. Finally, we expect full year free cash flow to be neutral to negative, driven by normal program working capital fluctuations, combined with the CapEx required to support future growth. With this outlook, MDA Space is positioned to once again deliver a strong year of profitable growth with the vast majority of revenue for 2026 contained within our solid backlog. Looking beyond 2026, we are excited about the opportunities ahead, supported by our $40 billion pipeline. On our mission to grow the business, the team is focused on executing customer commitments and leveraging our capabilities and technology to win new business pursuits while remaining disciplined in delivering sustainable profitable growth. With that, operator, we are ready for questions.

And your first question comes from Doug Taylor from Canaccord Genuity.

Congrats on a great close to 2025 and the outlook for '26. You've given more color to the pipeline, $40 billion. It's a staggering number and a big expansion from the last number you provided. Is it fair to characterize the expansion here as being more defense and intelligence related versus commercial communications? Would you provide some further color as to where you're seeing the most growth and opportunity?

Yes, for sure, we can do that. This is like our annual update to the pipeline. We're going to try to make sure that we gave the numbers last year and carried it through the year, and we've scrubbed all the numbers at the start of every year and updated the pipeline expectations. So that's what we're doing here now. The growth in terms of the size of the pipeline has certainly been based on opportunities we collected through the year. There are a number of them, yes, that are defense and intelligence related, defense-related, both in the space sector in addition to the non-space sector with the announcement of 49North and the focus there. The 49North also creates opportunities for us to, through 49North, take on some new non-space things. And so yes, both domestically and internationally, the defense side has some of the chunkier growth in the pipeline.

Would you quantify just because you mentioned the 49North pipeline as being material within the context of this larger number?

I don't know what the materiality number would be, but it's early days with 49North, but with the initiation of it as we started the year, it has immediately picked up some media opportunities as a defense prime in Canada.

Okay. And then I'll just ask one more question on the pipeline as it relates to your guidance here, and you get this question every year at this time. So I guess what I'm asking here is the degree of coverage of the guidance you're providing for '26 that you're taking out of backlog. And I guess, I assume it's relatively high. And the flip side of that question was the amount of pipeline conversion that is baked into that guidance versus supporting '27 and beyond.

Yes, like certainly, '26 is, as I said, is a year of very high visibility on revenue from backlog. So we're executing a lot of backlog as we go through '26. We do expect some orders in the guidance that's been given. The pipeline is a 5-year pipeline. So it's from now through the next 5 years of specific named opportunities that we are pursuing. The pace at which those can come in is often based on customer activity. And some of that customer activity is in areas that are newly emergent such as the Canadian government's new defense industrial strategy, the creation of the new Defense Investment Agency. So we have a lot of new policy and new processes around an expanding defense budget, which assures opportunities in the pipeline, which are great, but there's a little less insight in terms of exactly how fast those things can move. And so we are definitely seeing procurements moving faster, especially strategic procurements in the sovereign defense capability areas identified in the Canadian defense industrial strategy. And so that's really great to see. But in terms of exactly how those will play out, we have to be a little bit cautious until we actually see some more examples of how these things are going to flow through the modified procurement processes. So they're there. Things can happen, both government and commercially as we go through the year, but the pace of those will be based on outside forces.

Your next question comes from Justin Lang from Morgan Stanley.

Mike, you're quite bullish towards the end of the last year that we could see potentially another sizable commercial constellation order announced here in '26. Just curious if you're still hopeful that we could see a large order like that this year? Any color there would be great.

Yes, it's still possible for sure. Like I say, that's all based on commercial customer activity as well and when and how they decide to move out on different opportunities. So we're still actively engaged, actively quoting people in the pipeline on the commercial side of things. So there's absolutely potential that, that could happen, but we'll wait and see how it rolls. But we still are behaving in a way that we are feeding customers with inputs to assure that they're comfortable to move forward.

Okay. Great. And then maybe just on the CapEx guide for the year. If we could just maybe put a finer point on where the investment is going in terms of what exactly is left to build out in Montreal and how much you'll be spending on this chip development effort? And then should we think about CapEx sort of stepping down materially from here into '27? Or is it more of a smoother downward glide path from here?

Thank you, Justin. I'll take that one. So really, the focus this year will be on the Lightspeed and Globalstar production line equipment. That's really the focus for us. We also have to continue to invest in office space and things like parking. I mean, we've been growing a lot. Our factory there in Montreal is virtually completed, like the building is complete, but we need a bit more investments to make sure that everybody can come to work comfortably. The facility has been expanding quite a bit. In terms of chip development, for sure, now we started to capitalize the work that we're doing there. It's intangible assets for the most part. And that's important within the midpoint of $250 million, but it's ramping up essentially in 2026. And finally, we have some commercial sort of opportunities where we see that we need to invest a little bit ahead of getting the business. And so those are really the areas of focus for us. I think if we look beyond 2026, I feel like we're going to still have a good year of spending in 2027. Too early to say if it will be lower than the midpoint we're guiding to this year in 2026. But beyond that, and when looking at the business for the future, I feel like a number of $150 million to $200 million would be a reasonable long-term number to assume now. We've been indicating in the past a bit lower than that. But really, the big driver here is that now we have chip capabilities. And so we're going to have to continue to invest on that front, but that's obviously strategic, and it has a lot of value for us.

And your next question comes from Konark Gupta from Scotiabank.

Regarding the pipeline, the $40 billion figure is impressive. Have you determined what the incremental advantage might be? You've mentioned that defense is a key factor in that. Are the new opportunities primarily in the satellite sector for making satellites, or are they more related to the services side, such as geo intelligence or other areas?

I would say there is solid expansion in the satellite sector, particularly in communication and earth observation satellites. We are seeing significant growth in the contracting and delivery of satellites. There are also new capabilities being introduced in space, which could impact robotics and space operations as the space market continues to grow. These developments have been encouraging. Those are the main areas driving growth. Additionally, there has been some progress in the non-space defense sector with the formation of 49North, which improves our ability to handle defense prime contracts.

Okay. Regarding the $10 billion pipeline, it seems there are opportunities on the horizon since you've been shortlisted by the governments and expect some follow-ups. When it comes to timing, do you anticipate that some of these $10 billion in opportunities might turn into contracts this year or next year, or are they more likely to come in later?

I believe many of the shorter list opportunities have a chance to materialize over the next 24 months. Some of these are related to government initiatives, so their progress will depend on the government's new defense procurement strategies. However, not all are tied to the government; some follow standard procurement processes. There are certainly possibilities for contracts to be awarded this year, with more expected next year.

And last one for me before I turn over. In terms of RFPs, I mean, your business has grown a lot. Your opportunity pipeline is expanding. Are you expecting to fill a lot of RFPs this year? Like can you provide some context historically, like how many RFPs typically you fill in a year?

I don't have that number in my head. That's a new good one for me to get in my head, how many bids do we write a year. So I'll have to go and work on that. But it's steady. Let me just say that. For sure, our new business teams are very active. Constantly responding to requests for quotations and request for proposals. So RFQs and RFPs in the system, it is a constant activity. So we will definitely be responding to a number of those as we go through the year for sure.

Your next question comes from Ken Herbert from RBC Capital Markets.

Maybe, Guillaume, I wanted to see on the adjusted EBITDA guide for the year, a bit of a wider range than we would typically see, and I can appreciate some of your comments around the higher R&D spend. But can you give any more detail on maybe some of the puts and takes between the upper end or the lower end of the adjusted EBITDA outlook and maybe any more specifics on the areas of focus for R&D and other investments.

Thank you, Ken. Ultimately, we wanted to allow for some flexibility here. Depending on when we make the investments we are considering for our strategic growth, there may be an effect on the EBITDA margin. We are still aiming for a range of 18% to 20%. We intend to be strategic with these investments, which will also relate to how we recognize revenue. If our top line performs very well, we might increase our investments. Conversely, if the situation differs, we may adopt a more cautious approach. What’s important to highlight is that we are coming off a very strong growth year. We are now projecting to be a $1.8 billion company, whereas we were just a $400 million company not too long ago. Mike and I have reflected on this due to our investments in our facilities, but it is crucial to maintain our technological leadership. Hence, we see the need for continued investments in R&D. We also need to scale other aspects of the business, whether it’s enhancing our AI capabilities or improving our functions in finance, legal, HR, and IT. We will manage this carefully, and we are committed to being disciplined. However, we believe it’s essential to have the right flexibility to achieve another successful year in 2026.

Great. Guill, I appreciate all the detail. And then maybe, Mike, we think about your defense exposure today as maybe mid-teens of the business. If you're successful on some of these pipeline opportunities as you've leaned into this opportunity on the defense and national security side, what could defense broadly represent maybe of the revenue mix exiting '26 or into 2027? I mean, can you maybe just frame that opportunity for us?

I believe that exiting 2026, we won't see a significant shift. However, in 2027, if we begin to finalize contracts in various areas of our pipeline during 2026, we could begin to experience a revenue increase from the defense sector, with even more potential in 2028. Many of these programs are quite large, so they will require time to develop and scale up. The impact on your mid-teen revenue estimate will depend on the developments in the commercial sector as well, which remains an important aspect of our pipeline. Nevertheless, we anticipate an increase in the defense contribution over the next two years.

And your next question comes from Russell Stanley from Beacon Company.

Congratulations on the quarter. I would like to follow up on the last question regarding your revenue mix expectations. How should we consider the gross margins over the midterm? Many people might generally think that defense-related work comes with lower margins. Are you experiencing that, or do you expect it? Or do you anticipate that gross margins will remain stable compared to the work you see on the commercial side?

Maybe I take that one, Russ, and give you some insights here. So 2026, 18% to 20%. We're very confident about that range for the business. We don't expect that to change in the near term. So I would expect that we could continue to deliver within that range for 2027. And then what's going to happen is two things. First, as we increase our production in Montreal, we might see some margin opportunities in terms of margin expansion in the future. Now with that said, when we look at defense contracts, they do typically come with lower EBITDA margin. It's too early to tell like what will our mix be. Today, it's about 70% commercial, 30% government and defense. And so we'll see how that evolves. But one thing to keep in mind is that we are seeing very, very large opportunities coming for us, given everything that we've been saying this morning. And so at the end of the day, if we would be in a position in a number of years where we would see a lot of big defense opportunity coming to us, we might see a bit of compression on the EBITDA margin. But at the end of the day, we don't take margin to the bank, right? And from my perspective, this would be still very good for our business because we would increase our earnings per share and absolute EBITDA number. But that's all the color that I guess we can give at this stage, and we'll continue to provide updates as things evolve over the next few years here.

That's great color. And maybe my follow-up just around the backlog and given the pipeline and the huge growth you've seen there, this is a bit of a hood problem question, but how do you think about managing the backlog as a multiple of revenue, balancing wanting to keep the backlog as healthy as possible while managing delivery timelines and expectations for customers with a $40 million pipeline at some point, that might be a nice problem to have, but I'd love to hear how you're thinking about it right now.

Yes, I'll begin. Mike and I are in different locations today; he’s in Europe while I’m here in Toronto. That's a great question, Russ. From our perspective, we have a solid situation because we’ve invested in a new center of excellence in Brampton, Ontario, allowing us to handle significantly more work. As I mentioned earlier, we are nearing the completion of a world-class high-volume satellite manufacturing facility in Montreal, capable of producing up to 400 satellites each year. We’ve made all these investments and are now positioned to convert more opportunities from our pipeline into our backlog and continue executing to drive revenue growth. We aim for a book-to-bill ratio above one each year relative to our revenue. This year, we fell slightly below that, but in the past two years, we exceeded that target. It comes down to timing; converting pipeline opportunities into orders takes a bit of time in our business. However, we are well-equipped from an infrastructure and footprint standpoint to take on a lot more business. Mike, feel free to add anything.

No, I think that's great.

And your next question comes from David McFadgen from ATF Cormark.

A couple of questions. Maybe I'll ask one on the pipeline as well. So we've seen it double since Q3, and you now disclosed that $10 billion of the $40 billion is for follow-on orders or defense or I guess, a combination of both. Can you confirm that Apple Globalstar follow-on order would be in that $10 billion pipeline?

We don't discuss specific opportunities in our pipeline. However, we aim to update the pipeline annually and include it in our guidance for the year. We'll maintain this pipeline number throughout the year, but we won't provide quarter-by-quarter adjustments. Our order development and cycle are structured so that our focus should be on annual considerations rather than quarterly ones. We will continue working on the pipeline throughout this year and provide an update at the same time next year. There hasn't been any significant change in just the last three months; the pipeline has been gradually building as we move through '25, influenced by market changes and adjustments to our position. However, I'm unable to comment on specific opportunities.

Okay. Do you know when NASA is going to announce the award for the over 4 billion USD RMS contract for the manned lunar terrain vehicle? It has been delayed for over a year now.

Yes. People have been anticipating this announcement every month for many months. It seems that the process was delayed in the fall when the new NASA administrator, Jared Isaacman, began his role, requiring confirmation of priorities. This likely caused some slowdown. Recently, there has been renewed emphasis on returning to the lunar surface amidst the ongoing space competition, particularly between the United States and China, focusing on human missions and establishing habitats on the moon. As the new administrator settles in, the sequence of program announcements and priorities may have been reorganized. Nevertheless, there is a consistent expectation that this program could be announced at any time, as the community has been waiting a while for this news.

Okay. And then just on Lightspeed, can you confirm that the critical design review is complete and you started construction of those satellites?

The critical design review has been conducted, and there are still a few follow-up actions ongoing, which is typical in these reviews. Regarding the construction of satellites, that is progressing, as we have a couple of satellites due this year for Telesat. We are focusing on that.

Okay. And then was the EchoStar payment, was that anything material in the quarter?

So maybe I'll take that one, David. So that contract termination process with EchoStar is now completed. We've received payments for all termination amounts that we were entitled to receive under the terms of the original contract. And the terms of that agreement with EchoStar, the termination agreement are confidential. And we are precluded from sharing details of the agreement, including the dollar amount that we were compensated for. But this is behind us. We're moving forward. We have a strong pipeline, and we're glad that this was completed in the fourth quarter.

And your next question comes from Thanos Moschopoulos from BMO Capital Markets.

With respect to Telesat and Globalstar, can you remind us when the first deliveries happen? Is that kind of Q3 time frame? Or when would that be?

Globalstar from that first contract for 17 satellites, there will be deliveries through the first half of the year. And then with Telesat with Lightspeed, there'll be some deliveries near the end of the year.

Okay. And then for the second Globalstar contract, would there also be deliveries towards the end of the year?

I think I have to check on that in terms of the latest status for that in terms of whether it's late in the year or early in the next, but I'd have to check on that. There's lots of moving parts still on that program.

I think that's a good way to put it, Mike. We're very advanced with that contract. We started the construction. As Mike said, we have completed the CDR. And so it's just a matter of working with the customer here. We've always said that we would have some ramp-ups mostly in 2026 with a more significant year of production and delivery in 2027. But as Mike said, there's a lot of moving parts with the second contract here. So we expect that we'll start delivering either at the end of 2026 or in 2027.

Great. And then, Mike, with respect to 49North, what would be some of the, I guess, more meaningful areas of opportunity that you call out? Clearly, you have a broad range of capabilities. You're already getting a lot of non-space work with the service combatants. But what would be some of the near-term or larger opportunities or buckets within non-space that you would hope for within the defense sector in Canada?

Yes. One of the key areas where we have a strong track record is in autonomous systems. We lead with the Canadian forces in the deployment and operation of autonomous air systems, such as military drones. Another strong area for us is sensors; for example, we are responsible for integrating the electronic warfare suite and sensors on the River-class destroyer, the Canadian Surface Combatant. Additionally, we have notable strengths in submarine command training, which will become increasingly relevant as Canada acquires new submarines, a responsibility we currently hold. Furthermore, there are significant upcoming programs related to integrated command control communications with sensors, where our expertise in secure systems integration will be instrumental in leading various initiatives.

And your next question comes from Greg MacDonald from Stifel.

Mike, I know you prefer not to discuss specifics about the pipeline, but regarding the Golden Dome, I think most of us see it as having a different risk profile compared to some of your other opportunities. Can you share if there's anything related to the Golden Dome in the pipeline?

I believe there are potential opportunities related to that. Recently, we announced a contract signature with the SHIELD program through the U.S. Missile Defense Agency, which positions us to participate in bidding processes. This creates certain opportunities. Additionally, there are prospects in Canada tied to Arctic Defense initiatives, such as Arctic Defense Communication and Arctic Defense Surveillance, which could qualify under the scope of Golden Dome. I must acknowledge that these initiatives would primarily be Canadian programs. In the U.S., we will continue discussions with stakeholders who could utilize our space capabilities as they advance their solutions for Golden Dome. Over the past few years, we have been providing satellite technology to all the satellite primes within the SDA LEO constellations, and we have a proven track record of delivering to U.S. primes as their programs progress.

That's helpful. I have a quick question about 49North. Regarding hardware, we know you excel in sensors and systems integration. When you mention systems integration, does that also include software, particularly command and control integration and AI prediction, or is that outside the range of what you're focusing on?

No, it could definitely include those types of things. We're strong in systems integration. That can include hardware and software integration to deliver a system for sure. And we have past performances of that in the 49North team. So we have strong capability there. So yes, that can definitely be part of that. In terms of AI, that's going to depend on the systems. These days, when you have sensors that are delivering data into an integrated system that you then need to determine what the current situation is and evaluate alternative courses of action from that information you're receiving. Of course, our artificial intelligence-related system elements can be logically part of that. And we see that on all of our programs, including our space programs these days. As you look at the road maps for the evolution of these technologies, AI has more and more of an opportunity all the time. And so that can definitely come up as part of a systems integration solution.

And your next question comes from Michael Kypreos from Desjardins Securities.

I'll be quick here. Just any updates on capital allocation and how the M&A pipeline is these days?

The pipeline is good. So I was just going to say from a pipeline perspective, the pipeline is good. So we keep an eye on all the same areas we ever talked about M&A. We talk about vertical integration. We talk about geographic expansion to open up bigger pipelines for ourselves around the world. Those types of thought processes absolutely continue, and we continue to look at and focus on targets, but I'll let Guillaume talk to capital allocation.

Thank you, Mike. Michael, so yes, I mean, focus for us is to continue to look for targets so we can expand geographically. And then obviously, the second priority is to execute our growth organic plan. And again, you saw the guidance this morning for this year. We're going to spend at the midpoint, $250 million into CapEx. And so those are really the two priorities, potentially doing some acquisitions and then focus on delivering on our investments that we need to support our growth. We're not thinking of introducing any dividends at this point or share buybacks or things like that. We're very focused on continuing to grow the company.

And there are no further questions at this time. Mr. Mike Greenley, you may proceed with the call.

Okay. Well, thanks, everybody. I appreciate all the questions and the discussion, and we will get back at it and look forward to talking to you again in the next quarter. Thanks a lot.

This does conclude your conference call for today. Thank you very much for your participation. You may now disconnect. Have a great day.