MDA Space Soars on Record Revenue, Backlog Signals Continued Growth
Event summary
- MDA Space reported record revenues of $1.63 billion for fiscal 2025, up 51% year-over-year.
- The company’s backlog stands at $4.0 billion, providing visibility into 2026, though down from $4.4 billion in 2024.
- Adjusted EBITDA reached $324 million in 2025, a 49% increase year-over-year, with a margin of 19.8%.
- MDA Space anticipates revenues of $1.7 - $1.9 billion and adjusted EBITDA of $320 - $370 million in 2026.
- The company launched 49North, a dedicated defence tech organization focused on Canada's national defence priorities.
The big picture
MDA Space's strong performance reflects the broader trend of increased global investment in space technology, particularly driven by defense spending. The acquisition of SatixFy Communications and the expansion into defense tech through 49North signal a strategic pivot towards higher-margin, government-backed contracts. However, the company's reliance on a concentrated customer base and the potential for geopolitical shifts pose significant risks to its long-term growth trajectory.
What we're watching
- Backlog Conversion
- The decrease in backlog compared to the prior year, despite record revenue, warrants scrutiny; the ability to consistently convert backlog into revenue will be crucial for sustaining growth.
- Free Cash Flow
- The projected neutral to negative free cash flow in 2026, coupled with increased capital expenditures, suggests potential liquidity constraints and requires close monitoring of working capital management.
- Defense Dependence
- MDA Space's increasing reliance on defense contracts, as evidenced by the 49North launch and Arctic communications agreement, exposes the company to geopolitical risks and potential shifts in government priorities.
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