Eutelsat's EUR 12.1 Billion Backlog Masks a First-Quarter Revenue Dip
Published on 10/30/2026 at 15:11 | Editorial boerse-global.de
Eutelsat has entered the construction phase of Europe's IRIS² satellite constellation, lifting its order book to EUR 12.1 billion as of September 30 — a figure that transforms the company's long-term revenue visibility but does nothing to close the earnings gap it faces today. Investors punished the stock anyway, sending shares down 7.1% as first-quarter revenue for fiscal 2026/27 came in below analyst expectations.
Total revenue for the quarter reached EUR 286 million, a reported decline of 2.4% year on year, or 0.9% on a like-for-like basis. Management left full-year guidance untouched, but the market found little comfort in the confirmation.
A Backlog Built on Construction, Not Services
The EUR 8.9 billion added to the order book stems from future IRIS² development and construction revenue, the bulk of which is expected to be booked between 2027 and 2031. That figure should not be confused with the commercial service income Eutelsat anticipates later: the company projects more than EUR 10 billion in cumulative service revenue from commercial IRIS² offerings between 2032 and 2040 — a total for the period, not an annual run rate.
The distinction matters because construction revenue arrives with very thin margins at the outset. Order-book size alone tells investors little about near-term profitability. First satellite launches for IRIS² are slated for 2029, with initial services expected from 2030. Bridging that timeline requires capital: Eutelsat has earmarked EUR 3.39 billion of investment in shared and commercial IRIS² infrastructure across 2027 to 2034.
Should investors sell immediately? Or is it worth buying Eutelsat?
Video Drags as Connectivity Pushes Forward
Beneath the modest headline decline, the revenue mix is pulling in two directions. Video fell 17.8% on a like-for-like basis to EUR 110 million, hit by customer capacity reductions and the expiry of contracts for Russian satellites. The company expects that decline to taper gradually.
Connectivity, by contrast, advanced 11.9% on a comparable basis. The LEO business generated EUR 70.9 million in revenue, up 30.1% like-for-like, and remains the central growth engine behind the confirmed targets. Fixed Connectivity, however, was held back by a limited number of available terminals.
For group revenue to return to growth, the expanding segments must outpace the contraction elsewhere — a threshold the first quarter did not yet clear.
Guidance Holds, but the Bar Rises
Eutelsat continues to expect a slight increase in revenue across its four operating segments for the current fiscal year, with an EBITDA margin roughly in line with the prior year. LEO revenue growth is guided above 30%, and gross capital expenditure is seen at around EUR 1.2 billion. Looking further out, the fiscal 2028–29 targets remain operating revenue of EUR 1.5–1.7 billion and an EBITDA margin above 60%.
Those numbers demand a stronger operating performance than the opening quarter delivered. Deutsche Bank and Stifel are keeping their distance, both rating the stock "Hold" with price targets of EUR 2.10 and EUR 2.00 respectively.
The next test for Eutelsat is not simply winning more contracts. It is whether the company can convert the backlog it already holds into revenue while hitting its full-year sales and margin objectives. The IRIS² construction awards strengthen the long-term picture; they are no substitute for proof of operational improvement.
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