MDA Space (NYSE: MDA) posts 32% Q1 revenue jump and builds net cash
Rhea-AI Filing Summary
MDA Space Ltd. reported strong Q1 2026 growth and completed a major U.S. equity offering. Revenue rose to $464.1 million, up 32.2% from Q1 2025, with gross margin improving to 24.8%. Adjusted EBITDA increased to $90.6 million, while adjusted diluted EPS reached $0.38.
Net income was $29.6 million versus $32.9 million a year ago, mainly due to higher amortization of intangibles from acquisitions. Backlog was $3,692.7 million as the company continued converting orders into revenue. Cash climbed to $544.0 million and long‑term debt fell to $244.7 million.
During March 2026, MDA Space completed its initial public offering in the United States and NYSE listing, issuing 11,180,136 common shares at US$30.50 for net proceeds of $441.5 million. This helped move the company to a net cash position of $(299.3) million and a net debt to adjusted TTM EBITDA ratio of (0.9)x.
Positive
- Revenue and profitability growth: Q1 2026 revenue increased 32.2% year over year to $464.1 million, with gross margin improving to 24.8% and adjusted EBITDA rising to $90.6 million while maintaining a 19.5% adjusted EBITDA margin.
- Strengthened balance sheet: The U.S. IPO and NYSE listing generated net equity proceeds of $441.5 million, lifting cash to $544.0 million, reducing long-term debt to $244.7 million, and resulting in a net debt (cash) position of $(299.3) million and a net debt to adjusted TTM EBITDA ratio of (0.9)x.
Negative
- Backlog decline and lower bookings: Backlog decreased to $3,692.7 million from $4,838.4 million a year earlier, and Q1 2026 order bookings of $143.9 million were significantly below the $803.9 million recorded in Q1 2025.
- Softer reported net income: Despite higher revenue, net income declined to $29.6 million from $32.9 million in Q1 2025, mainly due to a substantial increase in amortization of intangible assets related to business combinations.
Insights
Strong top-line growth and de‑leveraging, with backlog drawing down as it converts to revenue.
MDA Space delivered Q1 2026 revenue of $464.1M, up 32.2% year over year, with gross margin improving to 24.8%. Adjusted EBITDA rose to $90.6M and adjusted diluted EPS reached $0.38, reflecting solid operating performance across Satellite Systems, Robotics & Space Operations, and Geointelligence.
Reported net income eased to $29.6M from $32.9M as amortization of acquired intangibles increased to $30.5M, largely tied to the SatixFy Communications acquisition. Backlog declined to $3,692.7M as the company executed larger programs, while Q1 2026 order bookings of $143.9M were below the prior year’s $803.9M.
Capital structure improved meaningfully. The U.S. IPO and NYSE listing raised net proceeds of $441.5M, lifting cash to $544.0M and reducing long‑term debt to $244.7M. Net debt (cash) was $(299.3)M with a net debt to adjusted TTM EBITDA ratio of (0.9)x. Subsequent filings may provide further clarity on order intake trends relative to this expanded capacity.
Key Figures
Key Terms
Adjusted EBITDA financial
Order Bookings financial
Net Debt (Cash) financial
Free Cash Flow financial
embedded derivative financial
IFRS 18 Presentation and Disclosure in Financial Statements regulatory
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report
of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16
of the Securities
Exchange Act of 1934
| For the month of | May | 2026 | |
| Commission File Number | 001-43190 |
| MDA SPACE LTD. |
| (Translation of registrant’s name into English) |
|
7500 Financial Drive Brampton, Ontario, Canada L6Y 6K7 |
| (Address of principal executive offices) |
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ¨ Form 40-F x
DOCUMENTS INCLUDED AS PART OF THIS REPORT
| Exhibit | |
| 99.1 | Interim Condensed Consolidated Financial Statements For the three months ended March 31, 2026 and 2025 |
| 99.2 | Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 |
| 99.3 | Form 52-109F2 Certification of Interim Filings - CEO |
| 99.4 | Form 52-109F2 Certification of Interim Filings - CFO |
Exhibits 99.1 and 99.2 of this Report on Form 6-K are incorporated by reference into the registration statement on Form F-10 (File No. 333-294179) of the registrant, as amended, and the registration statement on Form S-8 (File No. 333-294301) of the registrant, as amended.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| MDA Space Ltd. | |||||
| (Registrant) | |||||
| Date: | May 7, 2026 | By: | /s/ Guillaume Lavoie | ||
| Name: | Guillaume Lavoie | ||||
| Title: | Chief Financial Officer | ||||
Exhibit 99.1
MDA Space Ltd.
Interim Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(In millions of Canadian dollars)
MDA Space Ltd.
Unaudited Interim Condensed Consolidated Statement of Comprehensive Income
For the three months ended March 31, 2026 and 2025
(In millions of Canadian dollars except per share figures)
| Three months ended | Three months ended | ||||||||||
| Note | March 31, 2026 | March 31, 2025 | |||||||||
| Revenue | 4, 5 | $ | 464.1 | $ | 351.0 | ||||||
| Cost of revenue | |||||||||||
| Materials, labour and subcontractors | 6 | (333.9 | ) | (257.6 | ) | ||||||
| Depreciation and amortization of assets | 9, 10, 11 | (15.0 | ) | (13.7 | ) | ||||||
| Gross profit | 115.2 | 79.7 | |||||||||
| Operating expenses | |||||||||||
| Selling, general and administration | 6 | (30.2 | ) | (23.4 | ) | ||||||
| Research and development, net | 6 | (8.6 | ) | (5.5 | ) | ||||||
| Amortization of intangible assets | 11 | (30.5 | ) | (11.6 | ) | ||||||
| Share-based compensation | 13 | (5.8 | ) | (3.9 | ) | ||||||
| Operating income | 40.1 | 35.3 | |||||||||
| Other income (expenses) | |||||||||||
| Gain (loss) on financial instruments | (0.4 | ) | 0.1 | ||||||||
| Foreign exchange gain and other | 8.4 | 13.1 | |||||||||
| Finance income | 1.0 | 1.7 | |||||||||
| Finance costs | (6.4 | ) | (4.9 | ) | |||||||
| Share of loss of equity-accounted investee | (1.5 | ) | — | ||||||||
| Income before taxes | 41.2 | 45.3 | |||||||||
| Income tax expense | (11.6 | ) | (12.4 | ) | |||||||
| Net income | 29.6 | 32.9 | |||||||||
| Other comprehensive income | |||||||||||
| Gain (loss) on translation of foreign operations | 3.2 | (0.8 | ) | ||||||||
| Remeasurement loss on defined benefit plans | $ | (2.2 | ) | (2.0 | ) | ||||||
| Total comprehensive income | $ | 30.6 | $ | 30.1 | |||||||
| Earnings per share: | |||||||||||
| Basic | 17 | $ | 0.23 | $ | 0.27 | ||||||
| Diluted | 17 | 0.22 | 0.26 | ||||||||
| Weighted-average common shares outstanding: | |||||||||||
| Basic | 17 | 128,362,554 | 122,239,378 | ||||||||
| Diluted | 17 | 132,699,391 | 127,589,192 | ||||||||
The accompanying notes are an integral part of these interim condensed consolidated financial statements
F-2
MDA Space Ltd.
Unaudited Interim Condensed Consolidated Statement of Financial Position
March 31, 2026
(In millions of Canadian dollars)
| As at | Note | March 31, 2026 | December 31, 2025 | ||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash | $ | 544.0 | $ | 152.0 | |||||||
| Trade and other receivables | 149.0 | 145.3 | |||||||||
| Unbilled receivables | 207.4 | 187.5 | |||||||||
| Inventories | 7 | 37.0 | 23.5 | ||||||||
| Income taxes receivable | 56.4 | 52.9 | |||||||||
| Other current assets | 8 | 46.7 | 53.3 | ||||||||
| 1,040.5 | 614.5 | ||||||||||
| Non-current assets: | |||||||||||
| Property, plant and equipment | 9 | 666.0 | 649.6 | ||||||||
| Right-of-use assets | 10 | 111.1 | 114.5 | ||||||||
| Intangible assets | 11 | 872.7 | 876.7 | ||||||||
| Goodwill | 11 | 804.9 | 800.4 | ||||||||
| Equity-accounted investees | 9.8 | 11.3 | |||||||||
| Deferred income tax assets | 15.4 | 10.0 | |||||||||
| Other non-current assets | 8 | 275.9 | 279.2 | ||||||||
| 2,755.8 | 2,741.7 | ||||||||||
| Total assets | $ | 3,796.3 | $ | 3,356.2 | |||||||
| Liabilities and shareholders' equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued liabilities | $ | 458.6 | $ | 391.4 | |||||||
| Income taxes payable | 12.8 | 11.0 | |||||||||
| Contract liabilities | 710.7 | 798.9 | |||||||||
| Current portion of net employee benefit payable | 86.8 | 77.1 | |||||||||
| Current portion of lease liabilities | 10 | 19.8 | 20.2 | ||||||||
| Other current liabilities | 19.8 | 19.2 | |||||||||
| 1,308.5 | 1,317.8 | ||||||||||
| Non-current liabilities: | |||||||||||
| Net employee defined benefit payable | 23.2 | 23.4 | |||||||||
| Lease liabilities | 10 | 116.2 | 118.9 | ||||||||
| Long-term debt | 12 | 244.7 | 272.0 | ||||||||
| Deferred income tax liabilities | 233.7 | 245.7 | |||||||||
| Other non-current liabilities | 23.3 | 23.4 | |||||||||
| 641.1 | 683.4 | ||||||||||
| Total liabilities | 1,949.6 | 2,001.2 | |||||||||
| Shareholders' equity | |||||||||||
| Common shares | 1,501.9 | 1,042.7 | |||||||||
| Contributed surplus | 37.9 | 36.0 | |||||||||
| Accumulated other comprehensive income | 30.1 | 29.1 | |||||||||
| Retained earnings | 276.8 | 247.2 | |||||||||
| Total equity | 1,846.7 | 1,355.0 | |||||||||
| Total liabilities and equity | $ | 3,796.3 | $ | 3,356.2 | |||||||
The accompanying notes are an integral part of these interim condensed consolidated financial statements
F-3
MDA Space Ltd.
Unaudited Interim Condensed Consolidated Statement of Changes in Shareholders’ Equity
For the three months ended March 31, 2026 and 2025
(In millions of Canadian dollars)
| Common Shares | Contributed | Accumulated other comprehensive | Retained | Total shareholders' | |||||||||||||||||||||||
| Note | Number | Amount | Surplus | income | earnings | equity | |||||||||||||||||||||
| As at January 1, 2026 | 126,321,001 | $ | 1,042.7 | $ | 36.0 | $ | 29.1 | $ | 247.2 | $ | 1,355.0 | ||||||||||||||||
| Share capital issued, net of costs | 16 | 11,180,136 | 441.5 | — | — | — | 441.5 | ||||||||||||||||||||
| Share-based awards common shares issuance | 13 | 1,158,258 | 11.4 | (8.5 | ) | — | — | 2.9 | |||||||||||||||||||
| Net income | — | — | — | — | 29.6 | 29.6 | |||||||||||||||||||||
| Other comprehensive income | — | — | — | 1.0 | — | 1.0 | |||||||||||||||||||||
| Equity-settled share-based compensation | 13 | — | — | 4.3 | — | — | 4.3 | ||||||||||||||||||||
| Tax effect of costs on share capital issuance | — | 6.3 | 6.3 | ||||||||||||||||||||||||
| Tax effect of share-based compensation | — | — | 6.1 | — | — | 6.1 | |||||||||||||||||||||
| As at March 31, 2026 | 138,659,395 | $ | 1,501.9 | $ | 37.9 | $ | 30.1 | $ | 276.8 | $ | 1,846.7 | ||||||||||||||||
| As at January 1, 2025 | 121,531,699 | $ | 975.8 | $ | 38.0 | $ | 23.5 | $ | 138.7 | $ | 1,176.0 | ||||||||||||||||
| Share-based awards common shares issuance | 13 | 1,141,051 | 15.6 | (6.9 | ) | — | — | 8.7 | |||||||||||||||||||
| Net income | — | — | — | — | 32.9 | 32.9 | |||||||||||||||||||||
| Other comprehensive income | — | — | — | (2.8 | ) | — | (2.8 | ) | |||||||||||||||||||
| Equity-settled share-based compensation | 13 | — | — | 2.8 | — | — | 2.8 | ||||||||||||||||||||
| Tax effect of share-based compensation | — | — | (2.4 | ) | — | — | (2.4 | ) | |||||||||||||||||||
| As at March 31, 2025 | 122,672,750 | $ | 991.4 | $ | 31.5 | $ | 20.7 | $ | 171.6 | $ | 1,215.2 | ||||||||||||||||
The accompanying notes are an integral part of these interim condensed consolidated financial statements
F-4
MDA Space Ltd.
Unaudited Interim Condensed Consolidated Statement of Cash Flows
For the three months ended March 31, 2026 and 2025
(In millions of Canadian dollars)
| Note | Three months ended March 31, 2026 | Three months ended March 31, 2025 | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net income | $ | 29.6 | $ | 32.9 | ||||||||
| Items not affecting cash: | ||||||||||||
| Income tax expense | 11.6 | 12.4 | ||||||||||
| Depreciation of property, plant, and equipment | 9 | 8.7 | 7.0 | |||||||||
| Depreciation of right-of-use assets | 10 | 3.7 | 3.3 | |||||||||
| Amortization of intangible assets | 11 | 33.8 | 15.0 | |||||||||
| Equity-settled share-based compensation | 13(a) | 4.3 | 2.8 | |||||||||
| Investment tax credits accrued | (10.6 | ) | (8.0 | ) | ||||||||
| Finance costs, net | 5.4 | 3.2 | ||||||||||
| Loss (gain) on financial instruments | 0.4 | (0.1 | ) | |||||||||
| Share of loss of equity-accounted investee | 15 | 1.5 | — | |||||||||
| Loss on buy-out of pension liability | 0.3 | — | ||||||||||
| Changes in operating assets and liabilities | 19 | (21.4 | ) | 195.8 | ||||||||
| 67.3 | 264.3 | |||||||||||
| Interest paid | (2.3 | ) | (2.3 | ) | ||||||||
| Income tax (paid) received, net | (4.1 | ) | 5.0 | |||||||||
| Net cash generated in operating activities | 60.9 | 267.0 | ||||||||||
| Cash flows from investing activities | ||||||||||||
| Purchases of property and equipment | 9 | (67.2 | ) | (39.8 | ) | |||||||
| Purchases/development of intangible assets | 11 | (21.3 | ) | (21.9 | ) | |||||||
| Proceeds from disposal of assets | — | 0.2 | ||||||||||
| Proceeds from disposal of equity securities | 9.4 | — | ||||||||||
| Net cash used in investing activities | (79.1 | ) | (61.5 | ) | ||||||||
| Cash flows from financing activities | ||||||||||||
| Proceeds from senior credit facility | 95.0 | — | ||||||||||
| Repayments of senior credit facility | (125.0 | ) | — | |||||||||
| Payment of lease liability (principal portion) | 10 | (3.0 | ) | (2.4 | ) | |||||||
| Proceeds from share issuance, net of transaction costs | 441.5 | — | ||||||||||
| Proceeds from stock options exercised | 2.9 | 8.7 | ||||||||||
| Net cash generated in financing activities | 411.4 | 6.3 | ||||||||||
| Net increase in cash | 393.2 | 211.8 | ||||||||||
| Net foreign exchange difference on cash | (3.9 | ) | (2.2 | ) | ||||||||
| Cash, beginning of period prior to restatement for IFRS 9 | ||||||||||||
| amendments | 152.0 | 166.7 | ||||||||||
| Adjustment on adoption of IFRS 9 amendments on January 1, 2026 | 3 | 2.7 | — | |||||||||
| Cash, end of period | $ | 544.0 | $ | 376.3 | ||||||||
The accompanying notes are an integral part of these interim condensed consolidated financial statements
F-5
MDA Space Ltd.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(Amounts in millions of Canadian dollars, except share-based compensation awards and per share amounts)
| 1. | Nature of operations |
MDA Space Ltd. and its subsidiaries (collectively “MDA Space” or the “Company”) is a trusted mission partner of leading-edge space missions. The Company’s recognized engineering capabilities, portfolio of space technologies, and space mission expertise make it a trusted partner of choice for a broad range of customers worldwide. The Company leverages its capabilities to enable next generation space exploration and infrastructure, space-based communication, and both earth and space observation missions. The Company’s space technology solutions and services enable governments and businesses to develop and operate critical space infrastructure used for exploration and space-based science, to research, develop and operate space-based communications supporting our connected world, and to monitor global activities including climate change, illegal and unregulated fishing, and detection of oil spills. The Company’s technologies and solutions are also deployed for defence and intelligence applications and space observation missions. MDA Space operates across three business areas: Satellite Systems, Robotics & Space Operations, and Geointelligence, with facilities and sites in Canada, United Kingdom, United States and Israel. The Company collaborates and partners with governments and space agencies, commercial space companies and defence and aerospace prime contractors in the space industry.
MDA Space Ltd. was incorporated pursuant to a series of legal entity restructuring. On April 8, 2020, Neptune Acquisition Inc. (“NAI”), an affiliate of Northern Private Capital Ltd. purchased 100% of the equity interest in MDA GP Holdings Ltd., MDA Systems Inc., and Maxar Technologies ULC from Maxar Technologies Inc. The consideration for this transaction was $1 billion. Immediately after closing, NAI amalgamated with Maxar Technologies ULC and changed its name to Neptune Operations Ltd. (“NOL”). On June 2, 2020, Neptune Acquisition Holdings Inc. (“NAHI”) was formed under the laws of the Province of Ontario and became the parent of its wholly owned subsidiary NOL. In March 2021, NAHI changed its name to MDA Ltd., and again to MDA Space Ltd. in April 2024.
MDA Space Ltd. is incorporated and domiciled in Canada, with its head office located at 7500 Financial Drive, Brampton, Ontario L6Y 6K7, Canada. MDA Space’s common shares are traded on the Toronto Stock Exchange and the New York Stock Exchange, both under the symbol “MDA”.
| 2. | Basis of preparation |
| (a) | Statement of compliance |
These accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with IAS 34, Interim Financial Reporting, using accounting policies consistent with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IASB”). The same accounting policies and methods of computation as those used in the preparation of the consolidated financial statements for the year ended December 31, 2025 were followed in the preparation of these interim condensed consolidated financial statements, except as described in note 3. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual consolidated financial statements and should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2025.
The unaudited interim condensed consolidated financial statements were approved by the Board of Directors of MDA Space on May 6, 2026.
| (b) | Basis of measurement |
The interim condensed consolidated financial statements are presented in Canadian dollars, the Company’s functional currency.
The interim condensed consolidated financial statements have been prepared on the historical cost basis except for pension plan assets and liabilities and the following assets and liabilities which are measured at fair value: financial instruments at fair value through profit or loss (“FVTPL”) or fair value through other comprehensive income (“FVOCI”), derivative financial instruments, and initial recognition of assets acquired and liabilities assumed in a business combination. Pension plan assets and liabilities are recognized as the present value of the defined benefit obligation net of the fair value of the plan assets.
F-6
MDA Space Ltd.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(Amounts in millions of Canadian dollars, except share-based compensation awards and per share amounts)
| (c) | Seasonality |
The Company’s operations historically have not experienced seasonality. However, the Company’s results period over period are affected by its stage in the work in progress in each of its long-term contracts. Therefore, the results of operations over a given interim period may not be indicative of full fiscal year results.
| (d) | Critical accounting estimates and judgments |
The preparation of the Company’s interim condensed consolidated financial statements requires management to make estimates, assumptions and judgments that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and expenses. Significant estimates and judgments used in preparation of the interim condensed consolidated financial statements are described in the Company’s consolidated financial statements for the year ended December 31, 2025.
| 3. | Changes in accounting policies and accounting pronouncements |
Amendments of IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures
IASB has amended IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures to clarify the timing in the recognition and derecognition of financial assets and the settlement of financial liabilities. These amendments change the timing of recognition or derecognition of financial assets or liabilities from the payment initiation date to the settlement date. Any derecognition of liability earlier than the settlement date would be subject to certain criteria being met, and only applicable to financial liabilities settled using an electronic payment system. These amendments are effective for annual reporting periods beginning on or after January 1, 2026. The application of these amendments resulted in a $2.7 increase in cash and increase in accounts payable and accrued liabilities at January 1, 2026 on the interim condensed consolidated statement of financial position.
Forthcoming Issuance of IFRS 18 Presentation and Disclosure in Financial Statements replacing IAS 1, Presentation of Financial Statements
IFRS 18 aims to achieve comparability of the financial performance of similar entities and will impact the presentation of primary financial statements and notes, including the statement of earnings where companies will be required to present separate categories of income and expense for operating, investing, and financing activities with prescribed subtotals for each new category. The standard will also require management-defined performance measures to be explained and included in a separate note within the interim condensed consolidated financial statements. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted. Management is currently assessing the impact of adopting IFRS 18.
| 4. | Revenue from contracts with customers |
Disaggregation of revenue from contracts with customers by business areas are presented in the table below:
| Three months ended March 31, | Three months ended March 31, | |||||||
| 2026 | 2025 | |||||||
| Business Areas | ||||||||
| Satellite systems | $ | 313.1 | $ | 222.0 | ||||
| Robotics and space operations | 91.6 | 77.3 | ||||||
| Geointelligence | 59.4 | 51.7 | ||||||
| $ | 464.1 | $ | 351.0 | |||||
F-7
MDA Space Ltd.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(Amounts in millions of Canadian dollars, except share-based compensation awards and per share amounts)
| 5. | Geographic information |
Segmented information is reported in a manner consistent with the internal reporting provided to the chief operating decision maker (“CODM”), and reflects the way the CODM evaluates performance of, and allocates resources within, the business. The Company operates substantially all its activities in one reportable segment, which includes the Geointelligence, Robotics and Space Operations and Satellite Systems operating segments. The reportable segment earns revenue by providing space solutions to customers in a similar market and is managed by the CODM.
Revenues are attributed to geographical regions based on the location of customers as follows:
| Three months ended March | Three months ended March | |||||||
| 31, 2026 | 31, 2025 | |||||||
| Revenue | ||||||||
| Canada | $ | 312.8 | $ | 232.5 | ||||
| United States | 125.9 | 96.6 | ||||||
| Europe | 18.4 | 12.9 | ||||||
| Asia and Middle East | 6.3 | 8.5 | ||||||
| Other | 0.7 | 0.5 | ||||||
| $ | 464.1 | $ | 351.0 | |||||
The Company’s property, plant and equipment, right-of-use assets, intangible assets and goodwill are attributed to geographical regions based on the location of the assets as follows:
| March 31, 2026 | December 31, 2025 | |||||||
| Canada | $ | 2,365.3 | $ | 2,357.7 | ||||
| Other | 89.4 | 83.5 | ||||||
| $ | 2,454.7 | $ | 2,441.2 | |||||
| 6. | Cost of revenue and operating expenses |
The following table shows the breakdown of materials, labour and subcontractors costs included in cost of revenue:
| Three Months Ended March | Three months ended March | |||||||
| 31, 2026 | 31, 2025 | |||||||
| Labour, materials and other | $ | 174.7 | $ | 135.9 | ||||
| Subcontractors | 167.0 | 129.9 | ||||||
| Investment tax credits recognized | (7.8 | ) | (8.2 | ) | ||||
| $ | 333.9 | $ | 257.6 | |||||
The following tables show the breakdowns of selling, general and administration expenses and research and development, net included in operating expenses:
| Three Months | Three months | |||||||
| Ended March | ended March | |||||||
| 31, 2026 | 31, 2025 | |||||||
| Selling, general and administration | ||||||||
| General and administration | $ | 18.4 | $ | 13.5 | ||||
| Selling and marketing | 11.8 | 9.9 | ||||||
| $ | 30.2 | $ | 23.4 | |||||
| Research and development, net | ||||||||
| Research and development expense | $ | 14.3 | $ | 9.6 | ||||
| Research and development expense recovery | (5.7 | ) | (4.1 | ) | ||||
| $ | 8.6 | $ | 5.5 | |||||
F-8
MDA Space Ltd.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(Amounts in millions of Canadian dollars, except share-based compensation awards and per share amounts)
| 7. | Inventories |
| March 31, 2026 | December 31, 2025 | |||||||
| Raw materials | $ | 17.4 | $ | 15.7 | ||||
| Work in progress | 16.9 | 6.4 | ||||||
| Finished goods | 3.7 | 2.4 | ||||||
| Provisions | (1.0 | ) | (1.0 | ) | ||||
| $ | 37.0 | $ | 23.5 | |||||
During the three months ended March 31, 2026 and 2025, no write-downs to net realizable value were recognized.
| 8. | Other assets |
| Note | March 31, 2026 | December 31, 2025 | |||||||||
| Prepaid expenses and advances to suppliers | $ | 127.8 | $ | 125.2 | |||||||
| Investment tax credits receivable | 142.7 | 146.7 | |||||||||
| Investment in equity securities | 14 | 9.9 | 17.7 | ||||||||
| Derivative financial assets | 14 | 21.9 | 22.0 | ||||||||
| Pension plan assets | 10.7 | 15.4 | |||||||||
| Long-term unbilled receivable | 6.9 | 2.9 | |||||||||
| Other | 2.7 | 2.6 | |||||||||
| $ | 322.6 | $ | 332.5 | ||||||||
| Current portion | $ | 46.7 | $ | 53.3 | |||||||
| Non-current portion | $ | 275.9 | $ | 279.2 | |||||||
| 9. | Property, plant and equipment |
| Land, buildings and leasehold | Furniture, fixtures and computer | Capital in | ||||||||||||||||||
| improvements | Equipment | hardware | progress | Total | ||||||||||||||||
| Cost | ||||||||||||||||||||
| As at December 31, 2025 | $ | 200.7 | $ | 75.9 | $ | 52.2 | $ | 405.6 | $ | 734.4 | ||||||||||
| Additions | 1.8 | 1.9 | 2.5 | 18.9 | 25.1 | |||||||||||||||
| Transfers | 16.0 | 21.1 | 2.1 | (39.2 | ) | — | ||||||||||||||
| Effect of movements in exchange rates | — | — | — | — | — | |||||||||||||||
| As at March 31, 2026 | $ | 218.5 | $ | 98.9 | $ | 56.8 | $ | 385.3 | $ | 759.5 | ||||||||||
| Accumulated depreciation | ||||||||||||||||||||
| As at December 31, 2025 | $ | (28.7 | ) | $ | (30.0 | ) | $ | (26.1 | ) | — | $ | (84.8 | ) | |||||||
| Depreciation expense | (2.5 | ) | (3.6 | ) | (2.6 | ) | — | (8.7 | ) | |||||||||||
| As at March 31, 2026 | (31.2 | ) | (33.6 | ) | (28.7 | ) | — | (93.5 | ) | |||||||||||
| Net book value | ||||||||||||||||||||
| As at December 31, 2025 | $ | 172.0 | $ | 45.9 | $ | 26.1 | $ | 405.6 | $ | 649.6 | ||||||||||
| As at March 31, 2026 | $ | 187.3 | $ | 65.3 | $ | 28.1 | $ | 385.3 | $ | 666.0 | ||||||||||
Depreciation expense included in cost of revenue for the three months ended March 31, 2026 is $8.3 (three months ended March 31, 2025 - $7.0). Depreciation expense relating to all other property, plant and equipment of $0.4 (three months ended March 31, 2025 - nil) is included in operating expenses.
As at March 31, 2026, the Company is committed under legally enforceable agreements for purchases relating to property, plant and equipment of $65.8 in 2026 and $0.6 in 2027.
F-9
MDA Space Ltd.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(Amounts in millions of Canadian dollars, except share-based compensation awards and per share amounts)
| 10. | Leases |
The Company has lease contracts for buildings and equipment used in its operations. Leases of buildings generally have lease terms between 5 and 20 years, while equipment generally have lease terms between 1 and 5 years.
| (a) | Right-of-use assets |
Set out below are the carrying amounts of right-of-use assets recognized and the movements during the period:
| Buildings | Equipment | Total | ||||||||||
| As at December 31, 2025 | $ | 112.3 | $ | 2.2 | $ | 114.5 | ||||||
| Additions | 0.2 | — | 0.2 | |||||||||
| Depreciation expense | (3.3 | ) | (0.4 | ) | (3.7 | ) | ||||||
| Effect of movements in exchange rates | 0.1 | — | 0.1 | |||||||||
| As at March 31, 2026 | $ | 109.3 | $ | 1.8 | $ | 111.1 | ||||||
Depreciation expense included in cost of revenue for the three months ended March 31, 2026 is $3.3 (three months ended March 31, 2025 - $3.3). Depreciation expense of $0.4 is included operating expenses (three months ended March 31, 2025 - nil)
| (b) | Lease Liabilities |
Set out below are the carrying amounts of lease liabilities and the movements during the period:
| Lease liabilities | ||||
| As at December 31, 2025 | $ | 139.1 | ||
| Additions | 0.2 | |||
| Accretion of interest | 2.3 | |||
| Payments | (5.6 | ) | ||
| As at March 31, 2026 | $ | 136.0 | ||
Accretion of interest is included in finance costs in the interim condensed consolidated statement of comprehensive income.
F-10
MDA Space Ltd.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(Amounts in millions of Canadian dollars, except share-based compensation awards and per share amounts)
| 11. | Intangible assets and goodwill |
| Goodwill | Proprietary technologies | Contractual backlog | Customer relationships | MDA trademark | Software | Total | ||||||||||||||||||||||
| Cost | ||||||||||||||||||||||||||||
| As at December 31, 2025 | $ | 800.4 | $ | 672.4 | $ | 41.0 | $ | 458.5 | $ | 25.6 | $ | 55.1 | $ | 2,053.0 | ||||||||||||||
| Additions | — | $ | 25.5 | — | — | — | 1.0 | 26.5 | ||||||||||||||||||||
| Effect of movements in exchange rates | 4.5 | 4.0 | — | — | — | — | 8.5 | |||||||||||||||||||||
| As at March 31, 2026 | $ | 804.9 | $ | 701.9 | $ | 41.0 | $ | 458.5 | $ | 25.6 | $ | 56.1 | $ | 2,088.0 | ||||||||||||||
| Accumulated amortization | ||||||||||||||||||||||||||||
| As at December 31, 2025 | $ | — | $ | (106.2 | ) | $ | (41.0 | ) | $ | (186.3 | ) | $ | (7.3 | ) | $ | (35.1 | ) | $ | (375.9 | ) | ||||||||
| Amortization expense | — | (23.2 | ) | — | (8.1 | ) | (0.3 | ) | (2.2 | ) | (33.8 | ) | ||||||||||||||||
| Effect of movements in exchange rates | — | (0.7 | ) | — | — | — | — | (0.7 | ) | |||||||||||||||||||
| As at March 31, 2026 | $ | — | $ | (130.1 | ) | $ | (41.0 | ) | $ | (194.4 | ) | $ | (7.6 | ) | $ | (37.3 | ) | $ | (410.4 | ) | ||||||||
| Net book value | ||||||||||||||||||||||||||||
| As at December 31, 2025 | $ | 800.4 | $ | 566.2 | $ | — | $ | 272.2 | $ | 18.3 | $ | 20.0 | $ | 1,677.1 | ||||||||||||||
| As at March 31, 2026 | $ | 804.9 | $ | 571.8 | $ | — | $ | 264.1 | $ | 18.0 | $ | 18.8 | $ | 1,677.6 | ||||||||||||||
For the three months ended March 31, 2026, the amortization expense related to a portion of proprietary technologies and software of $3.4 (three months ended March 31, 2025 - $3.4) is included in cost of revenue. For the three months ended March 31, 2026, the amortization expense related to all other intangible assets of $30.5 (three months ended March 31, 2025 - $11.6) is included in operating expenses.
As at March 31, 2026, the Company is committed under legally enforceable agreements for purchases relating to intangible assets of $0.8 in 2026 and $0.1 in 2027.
| 12. | Long-term debt |
| (a) | Senior revolving credit facility |
As at March 31, 2026, the Company through its wholly owned subsidiary NOL had borrowings of nil (December 31, 2025 - $30.0) under the senior revolving credit facility. This facility bears interest at the bank’s prime rate or alternate base rate Canada plus an applicable margin of 45 to 150 basis points (“bps”) or CORRA plus an applicable margin of 145 to 250 bps, based on the Company’s total debt to EBITDA ratio.
The Company also had $0.7 letters of credit at March 31, 2026 (December 31, 2025 - $0.7), bearing an applicable margin of 97 bps plus a fronting fee of 25 bps.
| (b) | Senior unsecured notes |
The Company has senior unsecured notes (“Notes”), with an aggregate principal amount of $250.0 due December 23, 2030. The notes bear interest of 7.00% per annum, payable semi-annually in arrears. The Company has a number of early redemption options at various exercise prices ranging from 100% to 107%.
As at March 31, 2026, the notes are recorded at a carrying value of $244.7 on the interim condensed consolidated statement of financial position. The redemption options are bifurcated and recognized at fair value through profit loss and are separately discussed in note 14.
| (c) | Security and guarantees |
The senior revolving credit facility is guaranteed by all subsidiaries of NOL other than certain excluded subsidiaries (immaterial subsidiaries, non-wholly owned subsidiaries and minority shareholding entities) and secured by all of the present and future assets, property and undertakings of NOL and its subsidiary guarantors, as well as a limited recourse guarantee and pledge of NOL from the Company.
F-11
MDA Space Ltd.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(Amounts in millions of Canadian dollars, except share-based compensation awards and per share amounts)
The Company must satisfy certain financial covenants as defined by the credit agreement, including the following:
| • | The Company is required to maintain an interest coverage ratio of at least 3.0 to 1 at all times |
| • | The Company is required to maintain a specified total debt to EBITDA ratio of less than or equal to 4.0 to 1 at all times |
| • | The Company is required to maintain a senior secured leverage covenant of less 3.0 to 1 at all times |
The Investissement Québec Forgivable Loan (note 18) is guaranteed by the same security as noted above for the senior revolving credit facility, albeit on a subordinated basis. The Company must satisfy the same financial covenants as defined by the senior revolving credit facility.
As at March 31, 2026, the Company was in compliance with these covenants.
| (d) | Interest expense on long-term debt |
Interest expense on the Company’s long-term debt for the three months ended March 31, 2026 is $5.3 (three months ended March 31, 2025 - $0.1). This amount is included in finance costs in the interim condensed consolidated statement of comprehensive income.
Interest expense is net of the expense capitalized on certain qualifying assets that take a substantial period of time to prepare for their intended use. Capitalized interest is a component of both property, plant and equipment and intangible assets. The capitalization for the three months ended March 31, 2026 is $3.4 (three months ended March 31, 2025 - nil). The capitalization rate used to capitalize interest was 6.71% (three months ended March 31, 2025 - nil).
| 13. | Share-based compensation |
The Company has equity-settled and cash-settled share-based compensation plans.
| (a) | Equity-settled share-based compensation plans |
In 2021, the Company established an Omnibus Long-term Incentive Plan (“Omnibus Plan”). The Omnibus Plan is a share-based plan, under which the Company receives services from directors and employees as consideration for equity instruments of the Company. The Company can issue stock options, deferred share units (“DSUs”), restricted share units (“RSUs”), and performance share units (“PSUs”) pursuant to the terms and conditions of the Omnibus Plan and the related award agreements entered into thereunder.
Stock Options
The Company did not grant any stock options during the three months ended March 31, 2026. The existing granted stock options have graded vesting schedules ranging from 3 to 4 years from the grant date. Vesting is conditional on continuous employment from the grant date to the vesting date. The stock options have a maximum term of 10 years.
The stock options are measured at fair value using the Black-Scholes option pricing model on the grant date and subsequently expensed on a graded basis over the vesting period. The amount expensed for the three months ended March 31, 2026 was $0.1 (three months ended March 31, 2025 - $0.2).
DSUs
The Company has offered DSUs to its independent directors since 2022, entitling them to receive all or a portion of their annual compensation in the form of DSUs in place of cash. The DSUs vest immediately upon grant and are equity-settled, entitling participants to receive one common share for each DSU. The amount expensed for the three months ended March 31, 2026 is $0.4 (three months ended March 31, 2025 - $0.4).
RSUs and PSUs
The Company grants RSUs and PSUs to eligible employees. The RSUs vest over 1 to 3 years in annual installments from the grant date. Vesting is conditional on continuous employment from the grant date to the vesting date. The PSUs vest over 3 years from the grant date and vesting is conditional on meeting performance targets and continuous employment. The amounts expensed for the three months ended March 31, 2026 are $3.8 (three months ended March 31, 2025 - $2.2).
F-12
MDA Space Ltd.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(Amounts in millions of Canadian dollars, except share-based compensation awards and per share amounts)
Award units continuity - Stock Options, DSUs, RSUs and PSUs
The table below shows the movement in the award units outstanding over the three months ended March 31, 2026:
| Stock Options | DSUs | RSUs | PSUs | |||||||||||||
| As at January 1, 2026 | 3,482,557 | 305,129 | 998,587 | 550,787 | ||||||||||||
| Granted | — | 18,556 | 346,582 | 143,033 | ||||||||||||
| Forfeited/Cancelled | — | — | (20,147 | ) | — | |||||||||||
| Exercised/Converted | (280,892 | ) | — | (446,892 | ) | (215,237 | ) | |||||||||
| As at March 31, 2026 | 3,201,665 | 323,685 | 878,130 | 478,583 | ||||||||||||
| (b) | Cash-settled share-based compensation plan |
In 2024, the Company established an employee share purchase plan (“ESPP”). The ESPP is a cash-settled share- based payment plan whereby employees of the Company can acquire common shares through regular payroll deductions. Company-matched employee contributions, up to a maximum of five thousand dollars per annum, are restricted to a one-year holding period. The employees’ and Company’s contributions are remitted to an independent plan administrator, who is responsible for purchasing common shares on the market on behalf of the employees.
The amount expensed for the three months ended March 31, 2026 is $1.5 (three months ended March 31, 2025 - $1.1).
| 14. | Financial instruments and fair value disclosures |
| (a) | The classification of financial instruments and their carrying amounts are as follows: |
| March 31, 2026 | December 31, 2025 | |||||||
| Financial assets (liabilities) measured at FVTPL | ||||||||
| Derivative financial assets | $ | 21.9 | $ | 22.0 | ||||
| Derivative financial liabilities | (5.0 | ) | (2.2 | ) | ||||
| Investment in equity securities | 9.9 | 17.7 | ||||||
| Financial assets (liabilities) measured at amortized cost | ||||||||
| Cash | $ | 544.0 | $ | 152.0 | ||||
| Trade and other receivables | 149.0 | 145.3 | ||||||
| Unbilled receivables | 207.4 | 187.5 | ||||||
| Accounts payable and accrued liabilities | (458.6 | ) | (391.4 | ) | ||||
| Long-term debt | (244.7 | ) | (272.0 | ) | ||||
Derivative assets and investment in equity securities are included in other assets on the interim condensed consolidated statement of financial position, as presented in note 8. Derivative liabilities are included in other liabilities.
| (b) | Fair value of financial instruments: |
The table below shows the fair values of financial instruments along with their levels in the fair value hierarchy. It does not include fair values of those financial instruments measured at amortized cost for which the carrying amount is a reasonable approximation of fair value, which includes cash, trade and other receivables, unbilled receivables, accounts payable and accrued liabilities, and non-trade payables.
F-13
MDA Space Ltd.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(Amounts in millions of Canadian dollars, except share-based compensation awards and per share amounts)
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||||
| Derivative financial instruments | $ | — | $ | 20.0 | $ | 1.9 | $ | 21.9 | $ | — | $ | 21.1 | $ | 0.9 | $ | 22.0 | ||||||||||||||||
| Investment in equity securities | — | 9.9 | — | 9.9 | 7.9 | 9.8 | — | 17.7 | ||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||
| Derivative financial instruments | $ | 3.0 | $ | 2.0 | $ | — | $ | 5.0 | $ | 0.1 | $ | 2.1 | $ | — | $ | 2.2 | ||||||||||||||||
| Long-term debt | $ | — | $ | 258.8 | $ | — | $ | 258.8 | $ | — | $ | 280.0 | $ | — | $ | 280.0 | ||||||||||||||||
Over the three months ended March 31, 2026, no transfers occurred between levels of the fair value hierarchy.
Level 1:
The Company mitigates its foreign exchange risk by reducing mismatches between currencies in its foreign currency revenue contracts and the related purchase contracts to create natural economic hedges. The Company also utilizes foreign exchange forward contracts to supplement its natural hedge strategy, where needed, to further reduce the exposure arising from expected foreign currency denominated cash flows. The term of the foreign exchange forward contracts can range from less than one month to several years. At March 31, 2026, the Company had outstanding foreign exchange forward contracts reported in level 1 derivative financial instruments. The Company does not enter into foreign exchange forward contracts for trading or speculative purposes and does not have any qualifying hedges for accounting purposes.
Level 2:
Level 2 derivative financial instruments comprise foreign exchange embedded derivatives within revenue and purchase contracts. The Company determines the fair value of its derivative financial instruments based on management estimates and observable market-based inputs. Management estimates include assumptions concerning the amount and timing of estimated future cash flows. Observable market-based inputs are sourced from third parties and include currency spot and forward rates.
Level 2 investment in equity securities comprise a 0.8% equity ownership in a private foreign company purchased in USD. The Company determines the fair value based on the value per share of the same class of shares issued to investors as this company is still in its growth phase. Market-based inputs include currency spot rates, and non- market-based inputs are sourced from the investee.
Level 2 long-term debt comprise the senior credit facility and senior unsecured notes discussed in note 12. The fair value of the senior credit facility approximates its book value and is determined using a present value of future cash flows model. The fair value of the senior unsecured notes is determined using the quoted prices of an identical asset in an inactive market.
F-14
MDA Space Ltd.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(Amounts in millions of Canadian dollars, except share-based compensation awards and per share amounts)
Level 3:
The embedded derivative redemption feature as part of the senior unsecured notes is classified as a Level 3 security. The fair value change on this instrument was recorded in the interim condensed consolidated statement of comprehensive income. Below is the reconciliation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy:
| Embedded derivative | ||||
| asset (Level 3) | ||||
| As at January 1, 2025 | $ | — | ||
| Additions | 0.8 | |||
| Unrealized gain on financial instruments | 0.1 | |||
| As at December 31, 2025 | $ | 0.9 | ||
| Unrealized gain on financial instruments | 1.0 | |||
| As at March 31, 2026 | $ | 1.9 | ||
The significant unobservable inputs used in the fair value measurements categorized within Level 3 of the fair value hierarchy, together with a quantitative sensitivity analysis as at March 31, 2026 and December 31, 2025 are shown below:
| Security | Valuation technique |
Significant unobservable |
Input | Amount | ||||
| Embedded derivative asset | Income approach - Callable bond model | Credit spread | March 31, 2026: 3.56% | March 31, 2026: 0.25% increase or decrease in the credit spread would result in a decrease of fair value by $0.4, and an increase of fair value by $0.5, respectively. | ||||
| Credit spread | December 31, 2025: 3.96% | December 31, 2025: 0.25% increase or decrease in the credit spread would result in a decrease of fair value by $0.2, and an increase of fair value by $0.3, respectively. |
| 15. | Equity-accounted investees |
The below table shows a breakdown of equity-accounted investees:
| March 31, 2026 | December 31, 2025 | |||||||
| Interest in Maritime Launch Services Inc. | 8.5 | 10.0 | ||||||
| Interest in Jet Talk Limited | 1.3 | 1.3 | ||||||
| $ | 9.8 | $ | 11.3 | |||||
On November 3rd, 2025, the Company made an investment of $10.0 in Maritime Launch Services Inc. (“Maritime Launch”). The Company owns less than 20% of the equity interests and voting rights, but the Company has determined that it has significant influence due to meaningful representation on the Board of Directors of the associate. Consequently, the investment in Maritime Launch is accounted for in accordance with the equity method under IAS 28, Investments in Associates and Joint Ventures (“IAS 28”). The total comprehensive loss proportionate to the Company’s ownership of $1.5 has been recognized into share of loss of equity-accounted investee in the statement of interim condensed consolidated statement of comprehensive income. Maritime Launch reported no other comprehensive income or loss for the period.
The Company has a 51% ownership interest in Jet Talk Limited joint venture (“Jet Talk”), but no unilateral influence over all of the investee’s most relevant operations and hence the Company has no control over the investee. Consequently, the investment in Jet Talk is accounted for in accordance with the equity method under IAS 28. There is no amount of total comprehensive income to be recognized for the period.
F-15
MDA Space Ltd.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(Amounts in millions of Canadian dollars, except share-based compensation awards and per share amounts)
| 16. | Share Capital |
In March 2026, the Company completed its initial public offering in the United States and listing of its Common Shares on the New York Stock Exchange. A total of 9,836,065 common shares were issued and sold at a price of US$30.50 per share. The underwriters further exercised their over-allotment option to purchase an additional 1,344,071 common shares for the same price per share. Total proceeds of $466.5 were received prior to transaction costs. Transaction costs of $25.0 were incurred and have been recorded as a reduction of Common Shares, for net proceeds of $441.5.
The Company also issued shares in conversion of share-based awards to common shares described in note 13.
All issued common shares are fully paid.
| 17. | Earnings per share |
The following table reflects the net income and share data used in the basic and diluted earnings per share calculations:
| Three months ended March 31, 2026 | Three months ended March 31, 2025 | |||||||
| Net income | $ | 29.6 | $ | 32.9 | ||||
| Weighted average shares outstanding – basic | 128,362,554 | 122,239,378 | ||||||
| Adjustments for | ||||||||
| Employee stock options | 2,305,033 | 3,922,305 | ||||||
| Trustee shares | — | 18,004 | ||||||
| DSUs | 307,288 | 266,146 | ||||||
| RSUs and PSUs | 1,724,516 | 1,143,359 | ||||||
| Weighted average shares outstanding – diluted | 132,699,391 | 127,589,192 | ||||||
| Basic earnings per share | $ | 0.23 | $ | 0.27 | ||||
| Diluted earnings per share | 0.22 | 0.26 | ||||||
At March 31, 2026, 517,138 RSUs and PSUs (March 31, 2025 - no material items) were excluded from the diluted weighted average number of ordinary shares calculation because their effect would have been anti-dilutive.
| 18. | Government assistance |
| (a) | Investment tax credits |
During the three months ended March 31, 2026, the Company recognized investment tax credits of $10.6 (three months ended March 31, 2025 - $8.4) as a reduction in cost of materials, labour and subcontractors, and research and development, net, on the interim condensed consolidated statement of comprehensive income.
As at March 31, 2026, the Company has investment tax credits of approximately $188.4 million available to offset future Canadian Federal and Provincial income taxes payable which expire between 2030 and 2046. Investment tax credits are only recognized in the interim condensed consolidated financial statements when the recognition criteria have been met as described in note 3(q) of the Company’s consolidated financial statements for the year ended December 31, 2025. Investment tax credits that are expected to be realized within 12 months are classified as current; investment tax credits that are expected to be realized beyond 12 months are classified as non-current.
| (b) | Long-Term Economic Benefits to Province of Ontario Grant (the “Ontario Grant”): |
The Ontario Grant was awarded to the Company in March 2022 by the Minister of Economic Development, Job Creation and Trade to encourage investment in Ontario, which will benefit Ontario’s economic growth. Under this grant agreement, the Ontario Government will fund 24.74% of eligible spending to a maximum of $25.0, conditional on the Company investing a minimum of $101.0 in eligible project expenditures. The Company uses the funding received under the grant towards the building of its centre of control and excellence in Brampton, Ontario, as well as development of proprietary technology. For the three months ended March 31, 2026, the Company has not recorded any recoveries and has not received any proceeds related to this grant (three months ended March 31, 2025 - nil).
F-16
MDA Space Ltd.
Notes to the Unaudited Interim Condensed Consolidated Financial Statements
For the three months ended March 31, 2026 and 2025
(Amounts in millions of Canadian dollars, except share-based compensation awards and per share amounts)
| (c) | Investissement Québec Forgivable Loan (the “IQ Loan”): |
The Company entered into a definitive agreement with Investissement Québec in respect of the IQ Loan in February 2025. The forgivable loan, in an amount up to $75.0 is intended to support with infrastructure projects and the expansion of development capabilities to design and produce satellites at the Company's facilities in Québec. The loan will be forgiven if certain requirements related to these projects are met. For the three months ended March 31, 2026, the Company has recorded recoveries of $0.7 against cost of revenues, $1.1 against long-term assets and has not received any proceeds in connection with the IQ Loan (three months ended March 31, 2025 - nil).
| 19. | Supplementary cash flow information |
The table below provides changes in operating assets and liabilities:
| Three months ended March | Three months ended March | |||||||
| 31, 2026 | 31, 2025 | |||||||
| Trade and other receivables | $ | 0.1 | $ | (3.1 | ) | |||
| Unbilled receivables | (23.9 | ) | (18.6 | ) | ||||
| Inventories | (13.5 | ) | (4.3 | ) | ||||
| Prepaid expenses and advances to suppliers | (2.9 | ) | 16.1 | |||||
| Other assets | 3.0 | (10.2 | ) | |||||
| Trade and other payables | 96.6 | 34.3 | ||||||
| Contract liabilities | (88.2 | ) | 177.0 | |||||
| Employee benefits | 11.0 | 5.7 | ||||||
| Other liabilities | (3.6 | ) | (1.1 | ) | ||||
| $ | (21.4 | ) | $ | 195.8 | ||||
F-17
Exhibit 99.2
MDA Space Ltd.
Management’s Discussion and Analysis
For the First Quarters Ended
March 31, 2026
and 2025
Table of Contents
| CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION | 3 |
| NON-IFRS FINANCIAL MEASURES | 4 |
| COMPANY OVERVIEW | 6 |
| INDUSTRY OVERVIEW AND TRENDS | 7 |
| COMPETITIVE STRENGTHS | 7 |
| GROWTH STRATEGIES | 7 |
| QUARTERLY HIGHLIGHTS | 8 |
| FINANCIAL OVERVIEW | 9 |
| RESULTS OF OPERATIONS | 11 |
| FINANCIAL CONDITION, LIQUIDITY & CAPITAL RESOURCES | 14 |
| FINANCIAL INSTRUMENTS | 16 |
| OFF-BALANCE SHEET ARRANGEMENTS | 16 |
| TRANSACTIONS BETWEEN RELATED PARTIES | 16 |
| SIGNIFICANT ACCOUNTING POLICIES, ESTIMATES, AND JUDGMENTS | 16 |
| RECENT ACCOUNTING PRONOUNCEMENTS | 17 |
| SUMMARY OF QUARTERLY RESULTS | 18 |
| CONTROLS AND PROCEDURES | 18 |
| RISK FACTORS | 19 |
| OUTSTANDING SHARE INFORMATION | 19 |
| ADDITIONAL INFORMATION | 19 |
| GLOSSARY OF TERMS | 20 |
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-2 |
Management’s Discussion and Analysis
The following Management’s Discussion and Analysis (MD&A) provides information management believes is relevant to an assessment and understanding of the consolidated financial condition of MDA Space Ltd. (the “Company”, “we”, “MDA Space” or “MDA”) as at March 31, 2026 and its consolidated operating results for the first quarters ended March 31, 2026 and 2025. The MD&A should be read in conjunction with the cautionary statement regarding forward- looking information below, as well as the audited consolidated financial statements of the Company for the years ended December 31, 2025 and 2024 (2025 Audited Financial Statements) filed on SEDAR+ at www.sedarplus.ca. All dollar amounts are expressed in Canadian Dollars (CAD) except where otherwise specified and all numbers are in millions, unless otherwise specified or for per share amounts or ratios. References to “Q1 2026” or “this quarter” are to the fiscal quarter ended March 31, 2026 and references to “Q1 2025” are to the fiscal quarter ended March 31, 2025. The MD&A is current to May 6, 2026, unless otherwise noted.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This MD&A contains “forward-looking information” within the meaning of applicable Canadian and U.S. securities laws. Such forward-looking information includes, but is not limited to, information with respect to the Company’s objectives and strategies to achieve these objectives, as well as information with respect to the Company’s beliefs, plans, expectations, anticipations, estimates, intentions and views of future events. Discussions containing forward-looking information may be found, among other places, under the headings “Industry Trends”, “Outlook”, “Growth Strategies” and “Financial Overview” in this MD&A. In some cases, forward-looking information can be identified by words or phrases such as “forecast”, “target”, “goal”, “may”, “might”, “will”, “expect”, “anticipate”, “estimate”, “intend”, “plan”, “indicate”, “seek”, “believe”, “predict”, or “likely”, or the negative of these terms, or other similar expressions intended to identify forward- looking information. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward- looking information are not historical facts. The Company has based the forward-looking information on its current expectations and projections about future events and financial trends that it believes might affect its financial condition, results of operations, business strategy and financial needs.
Statements containing forward-looking information are based on certain assumptions and analyses made by the Company in light of management’s experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate and are subject to risks and uncertainties. These assumptions include, among others, our ability to maintain and expand the scope of our business; our ability to execute on our growth strategies; assumptions relating to government support and funding levels for space programs and missions; continued and accelerated growth in the global space economy; the impact of competition; our ability to retain key personnel; our ability to obtain and maintain existing financing on acceptable terms; changes and trends in our industry or the global economy; currency exchange and interest rates; and changes in laws, rules, regulations.
Although the Company believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect and there can be no assurance that actual results will be consistent with the forward-looking information. Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors. For additional information with respect to certain of these risks or factors, reference should be made to those described in this MD&A and to the 2025 Audited Consolidated Financial Statements, together with those described and listed under the heading “Risk Factors” in the Company’s Annual Information Form (AIF) available on SEDAR+ at www.sedarplus.ca.
The Company cautions investors that statements containing forward-looking information are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which it operates may differ materially from those made in or suggested by the forward-looking information contained in this MD&A. In addition, even if the Company’s results of operations, financial condition and liquidity and the development of the industry in which it operates are consistent with the forward-looking information contained in this MD&A, those results or developments may not be indicative of results or developments in subsequent periods.
Given these risks and uncertainties, investors are cautioned not to place undue reliance on the forward-looking information. Any forward-looking information that is made in this MD&A speaks only as of the date of such statement, and the Company undertakes no obligation to update any forward-looking information or to publicly announce the results of any revisions to any of those statements to reflect future events or developments, except as required by applicable securities laws. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-3 |
NON-IFRS FINANCIAL MEASURES
This MD&A refers to certain non-IFRS measures. These measures are not recognized measures under IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS), do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, the measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures, including EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Earnings per Share, Order Bookings, Net Debt and Free Cash Flow to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors, and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation.
EBITDA, Adjusted EBITDA and Adjusted EBITDA margin
EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are supplemental measures used by management and other users of our financial statements including our lenders and investors, to assess the financial performance of our business without regard to financing methods or capital structure. Adjusted EBITDA is also a key metric that management uses to assess the impact of potential strategic investment or financing opportunities. For example, management uses Adjusted EBITDA as a measure in determining the value of acquisitions, expansion opportunities, and dispositions. In addition, Adjusted EBITDA is used by financial institutions to measure borrowing capacity.
We define EBITDA as net income (loss) before i) depreciation and amortization expenses, ii) provision for (recovery of) income taxes, and iii) finance costs. Adjusted EBITDA is calculated by adding to and deducting from EBITDA, as applicable, certain expenses, costs, charges or benefits incurred which in management’s view are either not indicative of underlying business performance or impact the ability to assess the operating performance of our business, including i) unrealized foreign exchange gain or loss, ii) unrealized gain or loss on financial instruments, iii) share-based compensation expenses, iv) share of profit or loss of equity-accounted investees, and v) other items that may arise from time to time. We use Adjusted EBITDA to facilitate a comparison of our operating performance on a consistent basis reflecting factors and trends affecting our business.
Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue. We use Adjusted EBITDA margin to facilitate a comparison of the operating performance on a consistent basis reflecting factors and trends affecting our business.
For a reconciliation of Adjusted EBITDA to the most directly comparable measure calculated in accordance with IFRS see the section entitled “Reconciliation of Non-IFRS Measures”.
Adjusted Net Income and Adjusted Earnings per Share
Adjusted Net Income and Adjusted Earnings per Share (Adjusted EPS) are supplemental measures used by management and other users of our financial statements to assess the financial performance of our business adding to and deducting from net income, as applicable, certain expenses, costs, charges or benefits incurred which in management’s view are either not indicative of underlying business performance or impact the ability to assess the operating performance of our business, including i) amortization of intangible assets related to business combinations, ii) unrealized foreign exchange gain or loss, iii) unrealized gain or loss on financial instruments, iv) share-based compensation expenses, v) share of profit or loss of equity-accounted investees, and vi) other items that may arise from time to time.
For a reconciliation of Adjusted Net Income to the most directly comparable measure calculated in accordance with IFRS see the section entitled “Results of Operations”.
Adjusted Earnings per Share represents Adjusted Net Income divided by the weighted average number of shares outstanding.
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-4 |
Order Bookings
Order Bookings is the dollar sum of contract values of firm customer contracts. Order Bookings is indicative of firm future revenues; however, it does not provide a guarantee of future net income and provides no information about the timing of future revenue.
Net Debt (Cash)
Net Debt (Cash) is the total carrying amount of long-term debt including current portions, as presented in the Q1 2026 Financial Statements, less cash and excluding any lease liabilities. Net Debt is a liquidity metric used to determine how well the Company can pay its debt obligations if they were due immediately.
Free Cash Flow
Free Cash Flow is a supplemental measure used by management and other users of our financial statements to monitor the availability of discretionary cash generated, and available to the Company to repay debt, make strategic investments, and meet other payment obligations. We define Free Cash Flow as operating cash flows less net capital expenditures.
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-5 |
COMPANY OVERVIEW
We are a trusted mission partner for the world’s most advanced space programs, delivering a suite of dual-use technology and services to civil, commercial, defence and national security customers. Our deep engineering expertise, broad portfolio of space system capabilities, and end-to-end mission experience make us the partner of choice for government and private-sector clients. We leverage these capabilities to enable next-generation space-based communications that empower our hyper-connected world; to build and operate critical space infrastructure for exploration, scientific research and on-orbit servicing; and to develop, operate and deliver data and analytic services from both Earth and space observation satellites and ground infrastructure. In an era where industries, technologies, people, and places are impacted every day by space technology, our mission is to build the space between proven and possible and to provide the space economy with our trusted flight-tested, and human-rated solutions.
We have three business areas: Satellite Systems, Robotics & Space Operations, and Geointelligence. Our diversified portfolio of solutions positions our customers to achieve mission success. We are differentiated by factors including:
| · | our long track record of mission success and innovation in space spanning over 55 plus years and more than 450 successful space missions; |
| · | our global reach, with operations and significant customer base in Canada and the United States and expanding customer base in the United Kingdom, and other markets; |
| · | our profitable operations, strong liquidity and disciplined capital structure that enables pursuit of market growth opportunities; |
| · | the breadth of our customer relationships, with a diversified civil government, defence and commercial customer base; |
| · | our experienced team of over 4,000 colleagues, comprised of experienced space engineers, scientists, technicians, business and space industry leaders which includes approximately 2,000 engineers; |
| · | our extensive portfolio of intellectual property and technologies including over 60 trademarks and over 700 patents which underpin our development capabilities and products, systems and services; |
| · | consistent investment in research and development (R&D) and innovation, ranking us in the top 35 corporate R&D investors in Canada; and |
| · | some of the most advanced equipment and facilities in the industry. |
In Satellite Systems, we partner on or prime space communication missions across low Earth orbit (LEO), medium Earth orbit (MEO), and geosynchronous equatorial orbit (GEO), in addition to providing a range of satellite subsystems and communication systems for human rated spacecraft. These missions span a growing number of applications including broadband access, direct-to-device satellite communication, and Internet of Things (IoT) connectivity across the full communication frequency spectrum. In Robotics & Space Operations, we partner on space infrastructure missions to facilitate the exploration and development of space. We provide autonomous robotics and rover solutions along with proximity operation sensors that are used to operate in orbit and on the surface of the Moon and Mars, as well as operational services to plan, support and operate these missions remotely. In Geointelligence, we develop, build and operate Earth observation (EO) and space observation missions, as well as providing key products in the areas of EO synthetic aperture radar (SAR) data and services, EO ground stations and multi-sensor fusion-based analytics products and services. All of these activities serve a wide range of use cases, including in the areas of national security, maritime surveillance, and climate change monitoring. Also within Geointelligence, our capabilities include non-space defence applications focusing on C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance) solutions. A more in-depth description of our individual business areas can be found in the Company’s most recent AIF, which is available on SEDAR+ at www.sedarplus.ca.
Our established position as a trusted mission partner can be traced to our investment in our people as well as our broad suite of technology and full life-cycle services. We work collaboratively with our customers in the early engineering phases of product and program development and provide services throughout a mission’s life, including engineering, manufacturing, integration, mission operation, and ongoing maintenance services, enabling valuable customer intimacy that drives repeat revenue opportunities.
Our market position allows us to serve a broad range of customers, including governments and space agencies, commercial space companies and defence and aerospace prime contractors in the space industry. Our long and proven track record enables us to compete successfully for major space projects globally and to continue to grow our customer base beyond Canada. As an independent supplier of space technology products, we are also able to pursue a larger set of opportunities with U.S. prime contractors, which we believe can meaningfully enhance our revenue potential from U.S. government space programs.
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-6 |
INDUSTRY OVERVIEW AND TRENDS
All over the world, governments, defence agencies and corporations are finding new and valuable ways of using the capabilities of space to make the world a safer, healthier and more connected place. The benefits of space-based solutions are expected to grow significantly in the coming years, driven by continuous government and commercial investment in the increasing capabilities enabled by a burgeoning space economy. The space economy reached US$6261 billion in 2025 and is projected to surpass US$1.82 trillion by 2035. This growth is driven by a confluence of factors, including significant commercial and government investment, private sector innovation, and a profound transformation in the global economic and geopolitical landscape. As the world becomes increasingly interconnected and reliant on data-driven technologies, the strategic importance of space is intensifying.
Key trends that are impacting the space industry include:
| · | Lower costs and new technologies are driving the commercialization of space; |
| · | Space is enabling global connectivity; |
| · | Space is critical to national defence and security; |
| · | Robotics and on-orbit infrastructure is critical to the expanding Earth to Moon economy and future of space; |
| · | Earth observation is critical to improving global sustainability and economic productivity; and |
| · | Space exploration is becoming interplanetary. |
COMPETITIVE STRENGTHS
While the markets we serve are competitive, we believe that we are well positioned to provide differentiated solutions to customers, driven by the following competitive strengths:
| · | A trusted mission partner with a track record of execution; |
| · | Specific expertise and technological resources tailored for the new space economy; |
| · | Agility and scale position us to serve customers of all levels of size and experience; |
| · | Deep team with a winning culture; and |
| · | Entrepreneurial go-to-market strategy. |
GROWTH STRATEGIES
With established industry leadership in diverse space markets, we are currently executing specific strategies that will allow us to capitalize on the multiple waves of growth in the expanding space market. The primary pillars of our strategy include:
| · | Investing in next generation space technology and services; |
| · | Expanding our presence in attractive markets and geographies; |
| · | Scaling and expanding operations, skills and talent; |
| · | Leveraging strategic mergers, acquisitions and partnerships to complement organic growth; and |
| · | Incumbent position as Canada’s national defence and space champion and a trusted supplier to partners and allies globally. |
1 Source: Global Space Economy Reaches $626 Billion, Marking a New Phase of Growth, Spacenews, January 29, 2026
2 Source: World Economic Forum: The $1.8 Trillion Opportunity for Global Economic Growth, April 8, 2024
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-7 |
QUARTERLY HIGHLIGHTS
| · | Backlog of $3.7 billion at quarter-end provides revenue visibility for 2026 and beyond. This compares to $4.8 billion as of Q1 2025 with the reduction year-over-year driven by strong conversion of backlog into revenue. |
| · | Revenues of $464.1 million in Q1 2026 were up 32.2% year-over-year driven by higher volumes across all business areas in the quarter. |
| · | Adjusted EBITDA of $90.6 million in Q1 2026 increased 32.1% year-over-year driven by higher volumes of work. Adjusted EBITDA margin of 19.5% in Q1 2026 is consistent with the Company’s full year margin guidance of 18%-20%. |
| · | Net income of $29.6 million in Q1 2026 was down 10.0% year-over-year and diluted earnings per share were $0.22 in Q1 2026, a decrease of 11.5% year-over-year driven primarily by the increase in amortization of intangible expenses related to the SatixFy Communications Ltd. acquisition in Q3 2025. |
| · | Adjusted net income in Q1 2026 was $50.7 million increasing 32.0% year-over-year driven by the higher gross margin, partially offset by investments in SG&A and R&D. Adjusted diluted earnings per share of $0.38 in Q1 2026 increased 26.9% year-over-year as a result of the higher adjusted net income, partially offset by higher average diluted shares outstanding due to recent equity issuance related to the US IPO. |
| · | Operating cash flow of $60.9 million in Q1 2026 compared with $267.0 million in Q1 2025. The year-over-year decrease in operating cash flow was primarily due to working capital fluctuations. |
| · | Free cash flow of $(27.6) million in Q1 2026 compared to $205.3 million in Q1 2025. The year-over-year decrease was driven by reduced operating cash flow as a result of the aforementioned lower working capital contributions as well as higher capital expenditures. |
| · | Net cash position of $299.3 million at the end of Q1 2026 represented a (0.9)x net debt to adjusted EBITDA ratio and compares to a net debt position of $120.0 million as of December 31, 2025, which represented a 0.4x net debt to adjusted EBITDA ratio. The improved net cash position was largely driven by net proceeds received through an initial public offering in the United States, which was completed in Q1 2026. |
| · | In the first quarter, notable activities included the following: |
| ° | Received an indefinite deliver/indefinite quantity (IDIQ) contract from the Missile Defense Agency for the U.S. Scalable Homeland Innovative Enterprise Layered Defense (SHIELD) program. This contract award positions MDA Space to bid on future tasks and services that support the expansive U.S. defence initiative, which covers a broad range of work to strengthen defence against threats from land, sea, air, cyberspace and space. |
| ° | Announced the signing of a Memorandum of Understanding (MOU) with Hanwha Systems Co., Ltd. (Hanwha), a global leader in smart technologies and aerospace solutions. Through this MOU, MDA Space and Hanwha will explore opportunities to collaborate on the development of Korea's sovereign Low Earth Orbit (K-LEO) defence constellation, leveraging MDA's AURORA™ software-defined digital satellites. |
| ° | Announced the launch of 49North to deliver secure, multi-domain C4ISR and mission critical capabilities for Canada’s national defence priorities outside the space domain. |
| ° | Completed a marketed public offering of common shares in the United States and Canada, representing MDA Space’s initial public offering in the United States and the listing of its common shares on the New York Stock Exchange. Including the overallotment exercised by the underwriters, a total of 11,180,136 common shares were issued for total gross proceeds of approximately US$341 million. |
| ° | Awarded a contract by Canada's Defence Investment Agency to deliver three Ground-Based Optical (GBO) observatories as part of the Surveillance of Space 2 space domain awareness program to the Department of National Defence. Valued at approximately $32 million, as part of the contract MDA Space will also operate and provide in-service support to ensure long-term sustainment of the ground stations. |
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-8 |
| · | Subsequent to quarter-end, notable activities include the following: |
| ° | Announced MDA MIDNIGHT™, a space control platform for defence organizations to defend and protect the space domain. MDA MIDNIGHT™ is a maneuverable spacecraft that employs high- reliability rendezvous and proximity operations to detect, identify, counter and deter threats to critical space assets and orbits. The spacecraft can also be used to augment existing military missions through on-orbit surveillance, asset relocation and satellite refueling. Designed to address emerging customer requirements, MDA MIDNIGHT™ also leverages recent advancements and investments in MDA Space’s diverse product suite, including MDA SKYMAKER™ commercial robotics and MDA AURORA™ satellite bus platform. |
FINANCIAL OVERVIEW
KEY INDICATORS SUMMARY
| First Quarters Ended March 31, | ||||||||
| (in millions of Canadian dollars, except per share data) | 2026 | 2025 | ||||||
| Revenues | $ | 464.1 | $ | 351.0 | ||||
| Gross profit | 115.2 | 79.7 | ||||||
| Gross margin | 24.8 | % | 22.7 | % | ||||
| Adjusted EBITDA | 90.6 | 68.6 | ||||||
| Adjusted EBITDA Margin | 19.5 | % | 19.5 | % | ||||
| Adjusted Net Income | 50.7 | 38.4 | ||||||
| Adjusted Diluted EPS | $ | 0.38 | $ | 0.30 | ||||
| As at | ||||||||
| (in millions of Canadian dollars, except for ratios) | March 31, 2026 | December 31, 2025 | ||||||
| Backlog | $ | 3,692.7 | $ | 4,012.9 | ||||
| Net debt to Adjusted TTM EBITDA ratio | (0.9 | )x | 0.4 | x | ||||
REVENUES BY BUSINESS AREA
| First Quarters Ended March 31, | ||||||||
| (in millions of Canadian dollars) | 2026 | 2025 | ||||||
| Satellite Systems | $ | 313.1 | $ | 222.0 | ||||
| Robotics & Space Operations | 91.6 | 77.3 | ||||||
| Geointelligence | 59.4 | 51.7 | ||||||
| Consolidated revenues | $ | 464.1 | $ | 351.0 | ||||
Revenues
Consolidated revenues for the first quarter of 2026 were $464.1 million, representing an increase of $113.1 million (or 32.2%) from the first quarter of 2025. The year-over-year increase in revenues was driven by higher volumes of work performed across all business areas in quarter.
By business area, revenues in Satellite Systems for the first quarter of 2026 were $313.1 million, which represents an increase of $91.1 million (or 41.0%) from the same period in 2025 driven by the increase in volume of work on the Telesat Lightspeed program and the Globalstar next generation LEO constellation program. Revenues in Robotics & Space Operations for the first quarter of 2026 were $91.6 million, which represents an increase of $14.3 million (or 18.5%) from the same period in 2025 driven by the increase in volume of work on the Canadarm3 program. Revenues in Geointelligence for the first quarter of 2026 were $59.4 million, which represents an increase of $7.7 million (or 14.9%) from the same period in 2025 due to higher volume of work on various programs.
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-9 |
Gross Profit and Gross Margin
Gross profit reflects our revenues less cost of revenues. Q1 2026 gross profit of $115.2 million represents a $35.5 million (or 44.5%) increase over Q1 2025 driven by higher volumes of work performed across all business areas. Gross margin in Q1 2026 was 24.8% and compares to a gross margin of 22.7% in Q1 2025 driven by program mix.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA for the first quarter of 2026 was $90.6 million compared with $68.6 million for the first quarter of 2025, representing an increase of $22.0 million (or 32.1%) year-over-year driven by higher work volumes as we continue to convert our backlog. Adjusted EBITDA margin was 19.5% in the first quarter of 2026 compared to 19.5% adjusted EBITDA margin reported in the first quarter of 2025.
Adjusted Net Income
Adjusted net income for the first quarter of 2026 was $50.7 million compared with $38.4 million for the first quarter of 2025, representing an increase of $12.3 million (or 32.0%) year-over-year primarily driven by higher operating income.
Backlog
Backlog is comprised of our remaining performance obligations which represents the transaction price of firm orders less inception to date revenue recognized and excludes unexercised contract options and indefinite delivery or indefinite quantity contracts. Backlog as at March 31, 2026 was $3,692.7 million, a decrease of $1,145.7 million compared with the backlog at March 31, 2025 driven by continued conversion of our backlog into revenue. The following table shows the build up of backlog for the three months ended March 31, 2026 as compared with the same period in 2025.
| First Quarters Ended March 31, | ||||||||
| (in millions of Canadian dollars) | 2026 | 2025 | ||||||
| Opening Backlog | $ | 4,012.9 | $ | 4,385.5 | ||||
| Less: Revenue recognized | (464.1 | ) | (351.0 | ) | ||||
| Add: Order Bookings | 143.9 | 803.9 | ||||||
| Ending Backlog | 3,692.7 | 4,838.4 | ||||||
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-10 |
RESULTS OF OPERATIONS
| First Quarters Ended March 31, | ||||||||
| (in millions of Canadian dollars, except per share data) | 2026 | 2025 | ||||||
| Revenues | $ | 464.1 | $ | 351.0 | ||||
| Materials, labour and subcontractors costs | (333.9 | ) | (257.6 | ) | ||||
| Depreciation and amortization of assets | (15.0 | ) | (13.7 | ) | ||||
| Gross profit | 115.2 | 79.7 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administration | (30.2 | ) | (23.4 | ) | ||||
| Research and development, net | (8.6 | ) | (5.5 | ) | ||||
| Amortization of intangible assets | (30.5 | ) | (11.6 | ) | ||||
| Share-based compensation | (5.8 | ) | (3.9 | ) | ||||
| Operating income | 40.1 | 35.3 | ||||||
| Other income | 8.0 | 13.2 | ||||||
| Finance income | 1.0 | 1.7 | ||||||
| Finance costs | (6.4 | ) | (4.9 | ) | ||||
| Share of loss of equity-accounted investee | (1.5 | ) | — | |||||
| Income before income taxes | 41.2 | 45.3 | ||||||
| Income tax expense | (11.6 | ) | (12.4 | ) | ||||
| Net income | 29.6 | 32.9 | ||||||
| Basic earnings per share | $ | 0.23 | $ | 0.27 | ||||
| Diluted earnings per share | 0.22 | 0.26 | ||||||
Revenues
Consolidated revenues for the first quarter of 2026 were $464.1 million, representing an increase of $113.1 million (or 32.2%) compared with the first quarter of 2025. Please refer to ‘Financial Overview’ for a detailed discussion of revenue drivers for the first quarter ended March 31, 2026.
Materials, labour and subcontractors costs
Materials, labour and subcontractor costs for the first quarter of 2026 were $333.9 million, representing a $76.3 million (or 29.6%) increase compared to the same quarter of 2025. The increase is due to higher volume of work performed as we execute on our backlog.
Depreciation and amortization of assets
Included in this line item are the depreciation and amortization costs of those assets directly used to support our revenues. These assets are depreciated and amortized on a straight-line basis over their useful lives. First quarter costs of $15.0 million represent an increase of $1.3 million (or 9.5%) compared with the first quarter of 2025. The year-over- year increase is due to the depreciation and amortization of assets placed into service since Q1 2025.
Selling, general and administration (SG&A)
SG&A expenses include administrative support functions, as well as business development and bids and proposals costs. In addition, audit fees, public company expenses, recruitment, consulting fees and costs related to M&A or other corporate projects costs are included in this line item. SG&A expenses for the first quarter of 2026 were $30.2 million, representing an increase of $6.8 million (or 29.1%) over the same quarter in 2025. The increase in SG&A expenses in Q1 2026 mainly reflects an expansion of our SG&A functions and the addition of SG&A costs attributable to the acquisition of SatixFy Communications Ltd. in Q3 2025.
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-11 |
Research and development (R&D)
R&D expenses are comprised of costs incurred on R&D activities that are expensed to the statement of comprehensive income in the period, offset by funding received on certain R&D programs. The Company expenses research costs as they are incurred. Development costs are expensed when they do not meet the asset capitalization criteria (e.g. when technical feasibility and/or a market has not yet been established), or the costs are not directly attributable to developing the asset.
Net R&D expense for the first quarter of 2026 was $8.6 million, representing an increase of $3.1 million (or 56.4%) from the same quarter in 2025 primarily driven by incremental R&D activities in our Satellite Systems segment, including the increase in expense related to the acquisition of SatixFy Communications Ltd.
Amortization of intangible assets
This line item includes the straight-line amortization of intangible assets recognized as part of acquisitions. Intangible assets are comprised of contractual backlog, customer relationships, proprietary technologies, software and the MDA trademark. These intangible assets are amortized over their useful lives, ranging from 2 to 20 years. The amount expensed in the first quarter of 2026 was $30.5 million, representing an increase of $18.9 million (or 162.9%) compared with the first quarter of 2025. The year-over-year increase is attributable to the acquisition of SatixFy Communications Ltd., with associated intangibles being amortized over 2 to 5 years.
Share-based compensation
In April 2021, the Company established an Omnibus Long-term Incentive Plan (Omnibus Plan). The Omnibus Plan is a share-based plan, under which the Company can issue stock options, deferred share units (DSUs), restricted share units (RSUs), and performance share units (PSUs) to directors and employees.
Further, in the second quarter of 2024, the Company established an employee share purchase plan (ESPP). The ESPP is a cash-settled share-based payment plan whereby employees of the Company can acquire common shares through regular payroll deductions. The Company-matched employee contributions, up to a maximum of five thousand dollars per annum, are restricted to a one-year holding period.
Share-based compensation expense represents the vesting of the Company’s share-based awards on a graded basis over the awards’ respective vesting periods.
Share-based compensation expense for the first quarter of 2026 was $5.8 million, which represents an increase of $1.9 million (or 48.7%) over the first quarter of 2025. This increase is mainly due to an increase in RSUs and PSUs compensation expense.
Other income
Other income includes amounts related to foreign exchange gains (losses), gains (losses) on financial instruments, and other financial adjustments not related to our core business practices.
During the first quarter of 2026, other income was $8.0 million, comprising of $8.4 million of mainly foreign exchange gain, and $0.4 million loss on financial instruments. The foreign exchange gain is due to the depreciation of Canadian dollar compared to the US dollar in Q1 2025. The loss on financial instruments is due to a change in fair value of foreign exchange forward contracts partially offset by a gain on disposal of the investment in equity securities, and the change in fair value of an embedded derivative. During the first quarter of 2025, other income was $13.2 million, comprising mainly of $13.1 million in foreign exchange gain.
Finance income
Finance income represents the interest income earned on deposits, tax interest income and interest income on assets of defined benefit pension plans.
Finance income for the first quarter of 2026 was $1.0 million, compared to $1.7 million for the first quarter of 2025, mainly reflecting the impact of a decrease in cash interest.
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-12 |
Finance costs
The Company’s finance costs may include interest expense, interest on lease liabilities, net interest accrual on interest rate swaps, borrowing fees, and gains or losses on modifications of debt facilities, net of capitalized interest expense on certain qualifying capital assets under internal development.
Finance costs for the first quarter of 2026 were $6.4 million, net of $3.4 million of capitalized interest expense. Finance costs for the first quarter of 2025 were $4.9 million. The year-over-year increase of $1.5 million is driven primarily by interest on senior unsecured notes issued in Q4 2025, offset by increase in capitalized interest cost.
Share of loss of equity-accounted investee
The Company recognized the total comprehensive loss proportionate to the Company’s ownership of $1.5 on an equity- accounted investee purchased in 2025 Q4.
Income tax expense
Income tax expense represents current and deferred taxes. For the first quarter of 2026, the Company recognized an income tax expense of $11.6 million on income before income taxes of $41.2 million representing an effective tax rate of 28.1%. For the first quarter of 2025, income tax expense was $12.4 million recorded on income before income taxes of $45.3 million, representing an effective tax rate of 27.4%. The effective tax rate for the first quarter of 2026 was comparable to the first quarter of 2025.
Net income
Net income for the first quarter of 2026 was $29.6 million compared to $32.9 million of net income reported in the first quarter of 2025. The year-over-year decrease of $3.3 million (or 10.0%) in Q1 2026 was driven primarily by the increase in amortization of intangible expenses related to the SatixFy Communications Ltd. acquisition in Q3 2025.
RECONCILIATION OF NON-IFRS MEASURES
The following tables provide a reconciliation of net income to EBITDA, adjusted EBITDA, and adjusted net income:
| First Quarters Ended March 31, | ||||||||
| (in millions of Canadian dollars) | 2026 | 2025 | ||||||
| Net income | $ | 29.6 | $ | 32.9 | ||||
| Depreciation and amortization of assets | 15.7 | 13.7 | ||||||
| Amortization of intangible assets related to business combination | 30.5 | 11.6 | ||||||
| Income tax expense | 11.6 | 12.4 | ||||||
| Finance income | (1.0 | ) | (1.7 | ) | ||||
| Finance costs | 6.4 | 4.9 | ||||||
| EBITDA | 92.8 | 73.8 | ||||||
| Unrealized foreign exchange gain | (9.7 | ) | (11.4 | ) | ||||
| Loss (gain) on financial instruments | 0.4 | (0.1 | ) | |||||
| Loss on buy-out of pension liability | 0.3 | — | ||||||
| Acquisition, integration and reorganization costs | 1.0 | 3.5 | ||||||
| Equity-settled share-based compensation | 4.3 | 2.8 | ||||||
| Share of loss of equity-accounted investee | 1.5 | — | ||||||
| Adjusted EBITDA | $ | 90.6 | $ | 68.6 | ||||
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-13 |
| First Quarters Ended March 31, | ||||||||
| (in millions of Canadian dollars except for adjusted earnings per share) | 2026 | 2025 | ||||||
| Net income | $ | 29.6 | $ | 32.9 | ||||
| Amortization of intangible assets related to business combination | 30.5 | 11.6 | ||||||
| Acquisition, integration and reorganization costs | 1.0 | 3.5 | ||||||
| Loss on buy-out of pension liability | 0.3 | — | ||||||
| Loss (gain) on financial instruments | 0.4 | (0.1 | ) | |||||
| Unrealized foreign exchange gain | (9.7 | ) | (11.4 | ) | ||||
| Embedded derivative effects | 1.0 | 1.1 | ||||||
| Equity-settled share-based compensation | 4.3 | 2.8 | ||||||
| Share of loss of equity-accounted investee | 1.5 | — | ||||||
| Income taxes related to the above items (1) | (8.2 | ) | (2.0 | ) | ||||
| Adjusted net income | 50.7 | 38.4 | ||||||
| Weighted average number of shares outstanding - diluted | 132,699,391 | 127,589,192 | ||||||
| Adjusted earnings per share - diluted | $ | 0.38 | $ | 0.30 | ||||
(1) Adjusted effective tax rate applied starting 2026 to reflect the Company’s actual tax burden and provide a comprehensive view of underlying profitability, consistent with the tax expense reflected Statement of Comprehensive Income, versus the statutory income tax rate applied previously.
FINANCIAL CONDITION, LIQUIDITY & CAPITAL RESOURCES
Financial Condition
Total assets of the Company as at March 31, 2026 were $3,796.3 million, representing a $440.1 million increase from $3,356.2 million as at December 31, 2025. The increase in asset balances primarily reflects the increase in our cash balance in quarter as a result of completing our public offering of common shares in the quarter.
Total liabilities as at March 31, 2026 of $1,949.6 million decreased by $51.6 million compared with $2,001.2 million as at December 31, 2025 primarily driven by the decrease in our contract liabilities as we execute on our contracts and the decrease in our long-term debt, offset partially by increased accounts payable and employee related liabilities.
The following table represents our working capital position as at March 31, 2026 and December 31, 2025:
| As at | ||||||||
| (in millions of Canadian dollars) | March 31, 2026 | December 31, 2025 | ||||||
| Non-cash current assets | $ | 496.5 | $ | 462.5 | ||||
| Current liabilities | 1,308.5 | 1,317.8 | ||||||
| Net Working Capital | $ | (812.0 | ) | $ | (855.3 | ) | ||
Our Net Working Capital increased by $43.3 million from December 31, 2025 to March 31, 2026. This increase is largely due to the decrease in contract liabilities, and increase in unbilled receivables and inventory, offset partially by an increase in accounts payable and employee-related liabilities at March 31, 2026 relative to December 31, 2025.
Management monitors net working capital levels on a continuous basis, to ensure the Company has sufficient liquidity to fund its short-term usages of cash necessary in the normal course of operations.
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-14 |
Cash Flows
The Company’s consolidated cash flows are summarized in the table below.
| First Quarters Ended March 31, | ||||||||
| (in millions of Canadian dollars) | 2026 | 2025 | ||||||
| Cash, beginning of period | $ | 152.0 | $ | 166.7 | ||||
| Total cash provided by (used in): | ||||||||
| Operating activities | 60.9 | 267.0 | ||||||
| Investing activities | (79.1 | ) | (61.5 | ) | ||||
| Financing activities | 411.4 | 6.3 | ||||||
| Net foreign exchange difference | (3.9 | ) | (2.2 | ) | ||||
| Net Increase in cash | 389.3 | 209.6 | ||||||
| Adjustment on adoption of IFRS 9 amendments on January 1, 2026 | 2.7 | — | ||||||
| Cash, end of period | $ | 544.0 | $ | 376.3 | ||||
For the first quarter of 2026, the net increase in cash was $389.3 million compared to $209.6 million for Q1 2025. Operating activities in the latest quarter generated $60.9 million of cash compared to $267.0 million in Q1 2025. The year-over-year decrease in operating cash flow is primarily driven by lower working capital contributions in the latest quarter. Cash used in investing activities was $79.1 million in Q1 2026 comprised of $88.5 million related to capital expenditures offset by a $9.4 million inflow related to the sale of equity securities in the quarter. In Q1 2025, cash used in investing activities was $61.5 million, mainly related to capital expenditures. Cash outflows from financing activities in the latest quarter were $411.4 million which mainly reflects net proceeds from our issuance of common shares partially offset by net repayments made to our senior credit facility. In Q1 2025, cash inflows from financing activities were $6.3 million mainly driven by payments received from stock options exercised.
Capital Management
The Company defines its capital as the aggregate of long-term debt and shareholder’s equity. The Company’s primary capital management objectives are to provide an appropriate return to shareholders, safeguard working capital over the annual operating cycle, provide financial resources to grow operations to meet long-term customer demand, and comply with financial covenants under credit facilities.
The Company’s strategy to manage its capital structure is to utilize its borrowing arrangements to obtain operating credit facilities in support of its working capital and planned capital expenditures. When needed, the Company also has access to capital markets to raise equity financing. At March 31, 2026, the Company’s outstanding debt stood at $244.7 million, compared to $272.0 at December 31, 2025.
As at March 31, 2026, the Company’s net debt (cash) was $(299.3) million representing a net debt to adjusted trailing twelve month (TTM) EBITDA ratio of (0.9)x, compared with 0.4x as at December 31, 2025.
| As at | ||||||||
| (in millions of Canadian dollars, except for ratios) | March 31, 2026 | December 31, 2025 | ||||||
| Long-term debt | $ | 244.7 | $ | 272.0 | ||||
| Less: Cash | (544.0 | ) | (152.0 | ) | ||||
| Net Debt (Cash) | (299.3 | ) | 120.0 | |||||
| Adjusted TTM EBITDA | $ | 345.9 | $ | 323.9 | ||||
| Net Debt to Adjusted TTM EBITDA | (0.9 | )x | 0.4 | x | ||||
As at March 31, 2026, the Company had total liquidity of $1,243.3 million, which includes cash of $544.0 million, and $699.3 million of available liquidity under its revolving credit facility, net of outstanding letters of credit. The Company continually assesses the adequacy of its capital structure and capacity and makes adjustments within the context of the Company’s strategy, economic conditions, and the risk characteristics of the business. The Company has ample liquidity to fund working capital requirements of its operations, capital expenditures, debt service costs, and general corporate costs.
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-15 |
As at March 31, 2026, the Company was in compliance with the financial covenants under the Company’s credit facilities.
Equity was $1,846.7 million as at March 31, 2026 compared with $1,355.0 million as at December 31, 2025 mainly due to the completion of our public offering of common shares in the quarter.
As at March 31, 2026, the Company had commitments of $67.3 million (December 31, 2025 – $95.6 million) relating to purchase of property, plant and equipment, and intangible assets.
FINANCIAL INSTRUMENTS
The Company’s financial assets include cash, trade and other receivables, investments in equity securities, and derivative assets. Financial liabilities include accounts payable and accrued liabilities, long-term debt, and derivative liabilities.
The Company's activities expose its financial instruments to a variety of risks: interest rate risk, liquidity risk, foreign exchange risk, and credit risk. Risk management is carried out by the Company by identifying and evaluating the financial risks inherent within its operations. The Company's overall risk management activities seek to minimize potential adverse effects on the Company's financial performance.
Descriptions of financial instrument risks along with how they are managed are disclosed in the Company’s MD&A for the year ended December 31, 2025 as well as in note 22 of the 2025 Audited Financial Statements. There were no significant changes to financial instrument risks in the first quarter of 2026.
OFF-BALANCE SHEET ARRANGEMENTS
The Company has off-balance sheet arrangements in the form of standby letters of credit used mainly in connection with obligations relating to performance and payment guarantees of customer contracts. As at March 31, 2026, the aggregate gross potential liability related to the Company’s letters of credit was approximately $0.7 million (December 31, 2025 – $0.7 million).
As at March 31, 2026 and December 31, 2025, the Company had no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
TRANSACTIONS BETWEEN RELATED PARTIES
The Company’s related parties are its key management personnel. Key management personnel have authority and responsibility for overseeing, planning, directing, and controlling its activities and consist of the members of the board and the senior members of the management team. For the three months ended March 31, 2026, the nature and extent of related party transactions were not materially different from those disclosed in note 30 of the 2025 Audited Financial Statements.
SIGNIFICANT ACCOUNTING POLICIES, ESTIMATES, AND JUDGMENTS
The Company’s three months ended on March 31, 2026 Financial Statements have been prepared in accordance with IAS 34 Interim Financial Reporting, using accounting policies consistent with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IASB”). The same accounting policies and methods of computation as those used in the preparation of the 2025 Audited Financial Statements were followed in the preparation of the Q1 2026 Financial Statements.
A summary of the Company’s material accounting policies is disclosed in note 3 of the 2025 Audited Financial Statements.
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-16 |
Critical accounting estimates and judgments
The preparation of the consolidated financial statements in conformity with IFRS Accounting Standards requires management to make estimates and judgments that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Information about critical judgments in applying accounting policies that have the most material effects on the amounts recognized in the consolidated financial statements is disclosed in note 2 & 3(m) of the 2025 Audited Financial Statements.
RECENT ACCOUNTING PRONOUNCEMENTS
Amendments of IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures
IASB has amended IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures to clarify the timing in the recognition and derecognition of financial assets and the settlement of financial liabilities. These amendments change the timing of recognition or derecognition of financial assets or liabilities from the payment initiation date to the settlement date. Any derecognition of liability earlier than the settlement date would be subject to certain criteria being met, and only applicable to financial liabilities settled using an electronic payment system. These amendments are effective for annual reporting periods beginning on or after January 1, 2026, with earlier application permitted. The application of these amendments resulted in a $2.7 increase in cash and increase in accounts payable and accrued liabilities at January 1, 2026 on the interim condensed consolidated statement of financial position
Forthcoming Issuance of IFRS 18 Presentation and Disclosure in Financial Statements replacing IAS 1, Presentation of Financial Statements
IFRS 18 aims to achieve comparability of the financial performance of similar entities and will impact the presentation of primary financial statements and notes, including the statement of earnings where companies will be required to present separate categories of income and expense for operating, investing, and financing activities with prescribed subtotals for each new category. The standard will also require management-defined performance measures to be explained and included in a separate note within the consolidated financial statements. IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, with earlier application permitted. Management is currently assessing the impact of adopting IFRS 18.
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-17 |
SUMMARY OF QUARTERLY RESULTS
The following table provides select unaudited quarterly financial results for the eight most recently completed quarters.
| (in millions of Canadian dollars, except per share |
2026 | 2025 | 2024 | |||||||||||||||||||||||||||||
| data) | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | ||||||||||||||||||||||||
| Backlog | $ | 3,692.7 | $ | 4,012.9 | $ | 4,392.8 | $ | 4,567.9 | $ | 4,838.4 | $ | 4,385.5 | $ | 4,578.1 | $ | 4,596.0 | ||||||||||||||||
| Revenues | 464.1 | 499.1 | 409.8 | 373.3 | 351.0 | 346.6 | 282.4 | 242.0 | ||||||||||||||||||||||||
| Gross profit | 115.2 | 127.1 | 108.1 | 94.8 | 79.7 | 81.9 | 75.7 | 66.2 | ||||||||||||||||||||||||
| EBITDA | 92.8 | 81.7 | 85.9 | 60.8 | 73.8 | 66.9 | 64.0 | 44.2 | ||||||||||||||||||||||||
| Adjusted EBITDA | 90.6 | 96.2 | 82.8 | 76.3 | 68.6 | 70.9 | 55.5 | 48.7 | ||||||||||||||||||||||||
| Net income | 29.6 | 24.0 | 24.4 | 27.2 | 32.9 | 25.1 | 29.5 | 11.0 | ||||||||||||||||||||||||
| Earnings per share | ||||||||||||||||||||||||||||||||
| Basic | 0.23 | 0.19 | 0.19 | 0.22 | 0.27 | 0.21 | 0.25 | 0.09 | ||||||||||||||||||||||||
| Diluted | 0.22 | 0.18 | 0.19 | 0.21 | 0.26 | 0.20 | 0.24 | 0.09 | ||||||||||||||||||||||||
| Adjusted net income | 50.7 | 57.0 | 45.3 | 45.9 | 38.4 | 38.9 | 32.1 | 23.8 | ||||||||||||||||||||||||
| Adjusted earnings per share | ||||||||||||||||||||||||||||||||
| Basic | $ | 0.39 | $ | 0.45 | $ | 0.36 | $ | 0.37 | $ | 0.31 | $ | 0.32 | $ | 0.27 | $ | 0.20 | ||||||||||||||||
| Diluted | 0.38 | 0.44 | 0.35 | 0.36 | 0.30 | 0.31 | 0.26 | 0.19 | ||||||||||||||||||||||||
The Company’s operations historically have not experienced seasonality. The Company’s revenues, gross profit, EBITDA, adjusted EBITDA, net income and adjusted net income period over period are affected by the stages of work on its programs and timing of backlog execution.
CONTROLS AND PROCEDURES
The Company’s CEO and CFO are responsible for establishing and maintaining Disclosure Controls and Procedures (DC&P) and have caused them to be designed under their supervision to provide reasonable assurance that information required to be disclosed by the Company in annual filings, interim filings or other reports filed or submitted under applicable securities legislation is recorded, processed, summarized and reported within the time periods specified in such securities legislation. DC&P are designed to ensure that information required to be disclosed is accumulated and communicated to the CEO and CFO to allow timely decisions regarding required disclosure.
At March 31, 2026, the CEO and CFO, have limited the scope of their design and operation of the Company’s DC&P to exclude controls, policies and procedures of SatixFy Communications Ltd. This company was acquired on July 2nd, 2025, for total purchase consideration of $448.3 million. The scope of limitation is primarily based on the time required to assess the acquired business’s DC&P and control over financial reporting in a manner consistent with the Company’s other operations. Further details related to the summary of financial information of this acquisition is disclosed in note 5 of the 2025 Audited Financial Statements. Except for the preceding change, based on investigation and advice of those under their supervision, the CEO and CFO have concluded that the design and operation of the Company’s DC&P were effective and that material information relating to the Company, was made known to them and was recorded, processed, summarized, and reported within the time periods specified under applicable securities legislation.
The Company’s CEO and CFO are also responsible for establishing and maintaining Internal Control over Financial Reporting (ICFR) and have caused ICFR to be designed under their supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Our ICFR includes policies and procedures that pertain to the maintenance of records that provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with IFRS. In completing the design, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its 2013 version of Internal Control – Integrated Framework.
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-18 |
At March 31, 2026, the CEO and CFO, based on investigation and advice of those under their supervision, have concluded that the design and operation of the Company’s ICFR were effective. The CEO and CFO have also evaluated the Company’s ICFR, or caused it to be evaluated by those under their supervision, and concluded that there were no changes to the Company’s ICFR during the year-ended March 31, 2026 that have materially affected, or reasonably likely to materially affect the Company’s ICFR.
Due to the inherent limitations of DC&P and ICFR, no evaluations of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Accordingly, management does not expect that DC&P and ICFR can prevent or detect all errors or fraud.
RISK FACTORS
We believe our performance and future success depend on a number of factors that present significant opportunities for us. These factors are also subject to a number of inherent risks and special considerations. For additional information with respect to certain of these risks or factors, reference should be made to those described and listed under the heading “Risk Factors” in the Company’s most recent AIF, which has been filed with Canadian securities regulators and is available on SEDAR+ at www.sedarplus.ca. Each of the risk factors set out in the Company’s AIF are incorporated by reference into this MD&A.
OUTSTANDING SHARE INFORMATION
The Company’s common shares are traded on the Toronto Stock Exchange and the New York Stock Exchange, both under the symbol “MDA”. The Company is authorized to issue an unlimited number of common shares. At May 5, 2026, the Company had 138,750,977 common shares outstanding. At March 31, 2026, the details of the outstanding number of units of each type of instruments are as follows:
| March 31, 2026 | ||||
| Common shares outstanding | 138,659,395 | |||
| Outstanding instruments convertible into common shares: | ||||
| Stock options | 3,201,665 | |||
| Restricted share units | 878,130 | |||
| Performance share units | 478,583 | |||
| Deferred share units | 323,685 | |||
ADDITIONAL INFORMATION
Additional information about the Company is available on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov.
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-19 |
GLOSSARY OF TERMS
This glossary defines certain business, industry, technical and legal terms used in this MD&A for the convenience of the reader. It is not a comprehensive list of all defined terms used in this MD&A.
All references to the “Company”, “MDA Space”, “MDA”, “we”, “us” or “our” refer to MDA Space Ltd. together with its subsidiaries or its predecessors, as the context requires.
"Backlog" means the dollar sum of revenue that is expected to be recognized from firm customer contracts and carries the same meaning as remaining performance obligations that is disclosed in note 7 of our 2025 Audited Financial Statements
"EO" means Earth observation
"Free Cash Flow" means operating cash flows less net capital expenditures
"GEO" means geosynchronous orbit
"ICFR" means Internal Control over Financial Reporting
"IFRS" means IFRS Accounting Standards as issued by the International Accounting Standards Board
"IoT" means Internet of Things
"LEO" means low Earth orbit
"MD&A" means Management's Discussion and Analysis
"MDA Space" means MDA Space Ltd., its subsidiaries or its predecessors, as the context requires
"MEO" means medium Earth orbit
"Net Debt" means the sum of the total carrying amount of long-term debt including current portions, as presented on the consolidated statement of financial position, less cash and excluding any lease liabilities
"Omnibus Plan" means the MDA Space omnibus equity incentive plan, pursuant to which MDA Space may grant long- term incentives consisting of stock options, performance share units and/or restricted share units to its executive officers and employees
"Operating Income” means the gross profit less operating expenses
"Order Bookings” means the dollar sum of contract values of firm customer contracts
"R&D" means research and development
"SAR" means Synthetic Aperture Radar
"TTM" means trailing twelve months
| MDA Space Ltd. — Management’s Discussion and Analysis For the First Quarters Ended March 31, 2026 and 2025 | M-20 |
Exhibit 99.3
FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
I, Michael Greenley, Chief Executive Officer of MDA Space, certify the following:
1. Review: I have reviewed the interim financial statements and interim MD&A (together, the “interim filings”) of MDA Space (the “issuer”) for the interim period ended March 31, 2026.
2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
| 1. | designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that |
| 1. | material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and |
| 2. | information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
| 2. | designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. |
5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission.
5.2 ICFR – material weakness relating to design: N/A
5.3 Limitation on scope of design: N/A
6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2026 and ended on March 31, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
Date: May 7, 2026
| /s/ Michael Greenley | |
| Michael Greenley | |
| Chief Executive Officer |
Exhibit 99.4
FORM 52-109F2
CERTIFICATION OF INTERIM FILINGS
FULL CERTIFICATE
I, Guillaume Lavoie, Chief Financial Officer of MDA Space, certify the following:
1. Review: I have reviewed the interim financial statements and interim MD&A (together, the “interim filings”) of MDA Space (the “issuer”) for the interim period ended March 31, 2026.
2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
| 1. | designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that |
| 1. | material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and |
| 2. | information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
| 2. | designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. |
5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission.
5.2 ICFR – material weakness relating to design: N/A
5.3 Limitation on scope of design: N/A
6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2026 and ended on March 31, 2026 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
Date: May 7, 2026
| /s/ Guillaume Lavoie | |
| Guillaume Lavoie | |
| Chief Financial Officer |