MDA Space Stock Rises on $474 Million Contract to Expand Telesat's LEO Constellation

MDA Space Ltd. (TSX:MDA) shares rose on Tuesday after the company announced a $474 million contract expansion with Telesat to supply additional satellites for its Lightspeed low Earth orbit (LEO) constellation.

Contract Details

The agreement calls for MDA to manufacture an additional 27 of its AURORA satellites, bringing the total number being built for Telesat from 198 to 225. The deal also includes adding 500 MHz of military Ka-band spectrum to the satellites currently under construction, replacing an equivalent amount of commercial spectrum.

All satellites for the constellation will be assembled at MDA Space’s manufacturing facility in Montréal. The company stated that the majority of the contract's value will be added to its backlog in the third quarter of 2026, enhancing its future revenue visibility.

Strategic Government Partnership

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This contract is a key part of a broader Strategic Partnership Agreement announced last year between MDA Space, Telesat, and Canada's Department of National Defence. The collaboration is designed to provide secure satellite communications across the Canadian Arctic through the Enhanced Satellite Communications Project-Polar (ESCP-P) program.

In a related development, the Government of Canada also announced that MDA Space will act as the prime contractor for the ESCP-P program’s secure satellite constellation in Medium Earth Orbit, with Telesat serving as a subcontractor. This further solidifies MDA's central role in Canada's critical defense and communications infrastructure projects.

Market Impact

Investors responded positively to the announcement, with MDA Space shares climbing 4.6% during Tuesday's trading session. The contract reinforces the company's position as a critical supplier for major LEO satellite constellations and deepens its involvement in government defense programs, which are often valued by investors for providing stable, long-term revenue streams.