Eutelsat forecasts revenue uptick on OneWeb growth, shares slide on margins

Eutelsat has projected a modest increase in operating revenue for the 2026/27 fiscal year, powered by the rapid expansion of its OneWeb low-Earth orbit (LEO) satellite business. However, the company's profit margins are expected to remain broadly flat, a forecast that disappointed investors and sent shares down as much as 8% on Friday.

The French satellite operator reported a 3% rise in full-year revenue on a like-for-like basis, reaching €1.24 billion. The growth was largely driven by a 69.5% surge in LEO revenue, which now accounts for a quarter of total group sales. Despite this top-line growth, adjusted core earnings fell to €632.4 million, with the profit margin contracting to 51.2%—below the 52.4% average analysts had anticipated.

Chief Financial Officer Sebastien Rouge explained that the company is still in a transitional phase where the fast-growing LEO segment generates thinner margins than its established geostationary business. Analysts at Bernstein, led by Aleksander Peterc, attributed the market's negative reaction to the weak guidance, even though the fourth quarter itself was strong.

Eutelsat operates the only global LEO satellite network outside of Elon Musk's Starlink, positioning it as a key player in Europe's push to reduce dependence on American satellite providers. Chief Executive Jean-Francois Fallacher argued that the market is undervaluing Eutelsat, particularly in light of SpaceX's stock market debut in June. "When we look at the valuation of Starlink we believe we are undervalued as a company, looking at the asset we are currently running and operating," Fallacher said.

He also noted that SpaceX's public disclosures revealed the extent of Starlink's reliance on U.S. government revenue, a detail that came as a surprise to many in the industry.