Eutelsat's Landmark Year: LEO Revenue Surges to €297M, CEO Argues Company Is 'Extremely Undervalued' Compared to SpaceX

Eutelsat Communications (EPA: ETL) reported its full-year results for fiscal year 2025/2026 on August 7, 2026, revealing a company in the midst of a decisive strategic transition. While total group revenue held broadly steady, the numbers confirmed that low-Earth orbit (LEO) connectivity has become the primary growth engine, driven by the OneWeb constellation. CEO Jean-François Fallacher used the investor call to make a bold valuation argument against Starlink, while also detailing key wins in defense and sovereign European infrastructure.

Financial Results: LEO Drives Growth as Legacy Video Fades

Eutelsat's headline figures for FY 2025/2026 tell a story of stable top-line performance masking a significant shift in business mix.

• Total Group Revenue: €1,235.9 million, down 0.6% on a reported basis but up 3.0% like-for-like when adjusting for currency effects .
• LEO Revenue: €297.0 million, an increase of 69.5% on a like-for-like basis. This represents 25% of total group revenue, up from approximately 15% a year earlier . Within the Connectivity vertical, LEO now accounts for roughly 45% of revenue .
• Revenue by Vertical: The Connectivity segment was the clear growth driver. This was offset by continued decline in the legacy Video business, which fell 13.1% to €519 million . Government Services revenue also grew strongly, reaching €235.5 million, up 17.7% year-on-year, partly due to revenue recognition from the CENTAURE contract .
• Balance Sheet: The company successfully completed a €5 billion refinancing package during the fiscal year to support future investments .
• Adjusted EBITDA: Stood at €632.4 million, with the margin falling to 51.2% from 54.4% like-for-like, reflecting pressure from the business mix shift towards lower-margin LEO services and higher investment costs .

CEO's Valuation Argument: 'Undervalued' vs. SpaceX

On the earnings call following the results, CEO Jean-François Fallacher argued that the market is significantly mispricing Eutelsat relative to Starlink, especially in light of SpaceX’s stock market debut in June 2026 .

Fallacher’s central thesis is built on what he sees as a key vulnerability for Starlink: customer concentration. He pointed to SpaceX’s IPO disclosures, which revealed that nearly 25% of Starlink’s revenue comes from a single U.S. government client, referred to as 'Client A' . This creates a dependency risk that Eutelsat, with its more diversified multi-orbit asset base spanning LEO (OneWeb) and GEO, and a balanced government/commercial customer mix, does not face.

"When we look at the valuation of Starlink, we believe we are undervalued as a company, looking at the asset we are currently running and operating," Fallacher said during the call . He highlighted Eutelsat's competitive LEO assets and its role in building European sovereign infrastructure as factors the market may be overlooking .

CENTAURE Defense Contract: A Multi-Orbit Win for France

A major highlight of the year was the signing of the CENTAURE contract with the French Ministry of the Armed Forces. This deal serves as both a source of revenue and a validation of Eutelsat's sovereign capabilities.

• Contract Value: Up to €350 million over a duration of 8 years .
• Structure: It is the first call-off contract under the wider €1 billion NEXUS framework agreement signed in June 2025. The contract is structured with a firm 4-year tranche worth €138 million, with options to extend .
• Scope: The contract provides secure LEO and multi-orbit satellite capacity for French military operations, leveraging the OneWeb constellation to provide low-latency connectivity . The DGA (Direction Générale de l'Armement) is the contracting authority .

IRIS² Sovereign Constellation: Eutelsat Takes the LEO Lead

The most significant strategic announcement was the signing of the implementation agreement for the EU's IRIS² (Infrastructure for Resilience, Interconnectivity and Security by Satellite) program, pushing it from planning into full-scale deployment .

• Role Confirmed: Eutelsat was confirmed as the LEO segment lead for the SpaceRISE consortium, which also includes Hispasat and SES .
• Investment Commitment: Eutelsat will allocate a total of €3.39 billion between 2027 and 2034. This is split between €2.23 billion for the shared infrastructure and €1.16 billion for the commercial layer (including Ku-band payload and ground infrastructure) .
• Constellation Specs: The IRIS² system was expanded. It will be a multi-orbital system of 290 satellites in the concession contract, with an additional 66 satellites added for defense, security, and emergency services, bringing the total to 348 . The core LEO segment consists of 264 dual Mil-Ka/Ku band satellites and the 66 additional Mil-Ka band satellites . The system is designed around 5G non-terrestrial network (5G NTN) standards .
• Timeline: The Rendez-vous 1 implementation agreement was signed on August 7, 2026. Initial services are targeted for 2029–2030, with full constellation deployment expected by 2034 .

FY 2026/2027 Outlook: Continued LEO Growth, Higher Capex

Based on the earnings call and company guidance, Eutelsat provided the following outlook for the fiscal year 2026/2027 :

• LEO Revenue Growth: The company guided for over 30% LEO revenue growth, driven by the ramp-up of government contracts (including CENTAURE) and expanding enterprise connectivity solutions .
• Capital Expenditure: Capex is expected to rise significantly to approximately €1.2 billion. This reflects heavy investment in the replenishment of the OneWeb LEO constellation and the initial investment phases of the IRIS² deployment .
• Total Revenue: Eutelsat expects higher overall revenue in FY 2027 as the rapid growth in LEO more than compensates for the continued erosion of legacy video services .

Caveat: The precise "over 30% LEO growth" and "~€1.2 billion capex" figures are drawn from the earnings call and Reuters summary of the outlook provided on August 7, 2026. The official guidance document confirms the trajectory, but investors should cross-check exact percentages and capex numbers against the final published FY 2026/2027 guidance page in Eutelsat’s investor presentation for precise figures .