Eutelsat’s Strategic Pivot to Low‑Earth Orbit Drives Robust First‑Half Performance
Eutelsat Communications S.A., the French satellite operator listed on NYSE and Euronext Paris, has delivered a clear signal that its radical restructuring is beginning to bear fruit. In the first half of the 2025/26 fiscal year, the company reported a mixed picture: the classic GEO‑based video‑broadcast segment continued its decline, yet the newly expanded Low‑Earth Orbit (LEO) business generated a sharp uptick in revenue, offsetting losses in traditional markets and setting a new trajectory for growth.
LEO Growth Outpaces Traditional GEO
The company’s earnings call on 13 February underscored a “crystal‑clear” surge in LEO revenues, driven largely by the OneWeb constellation. This satellite network, of which Eutelsat is a principal owner, has begun to deliver a steady stream of services across Europe, the Middle East, Africa, and the Americas. The revenue boost from OneWeb, highlighted in multiple market reports, has been sufficient to push the company’s total operating income higher than analysts had expected, despite the continued contraction of the video‑broadcast arm.
Cancellation of the FlexSat GEO Order
In a decisive move that signals a strategic realignment, Eutelsat announced the cancellation of its pending GEO FlexSat order. The decision, disclosed on 13 February, reflects the company’s assessment that the LEO platform offers superior flexibility and cost‑efficiency for both corporate and consumer connectivity. By reallocating capital that would have supported the FlexSat launch, Eutelsat has freed up resources to invest further in LEO infrastructure and market expansion.
State Support and Competitive Positioning
French authorities have confirmed that they are backing Eutelsat’s transition, providing a stable policy environment that mitigates regulatory risk. This support comes at a time when the European Union is actively pursuing alternatives to SpaceX’s Starlink, seeking to reduce dependence on U.S.‑based satellite services. Eutelsat’s LEO focus positions it as a credible, sovereign alternative in the burgeoning high‑speed satellite broadband market.
Forward‑Looking Outlook
With the LEO segment now generating a substantial portion of its revenue, Eutelsat’s guidance for the remaining half‑year indicates a continued emphasis on satellite‑based connectivity services. The company is expected to roll out additional LEO payloads, expand into under‑served regions, and deepen its partnership with OneWeb. Management has signaled that the GEO business will be maintained at a “sustainable” level, focusing on niche markets where it still holds competitive advantages.
Given the company’s market capitalization of roughly €2.6 billion, the 52‑week high of €9.30, and a recent closing price of €2.24, investors are witnessing a period of significant volatility. Yet the fundamental shift toward LEO, coupled with state endorsement and a robust revenue stream from OneWeb, suggests that the company is on a credible path to restoring profitability and generating long‑term shareholder value.
