SES Faces Investor Backlash After Intelsat Merger

Debt concerns and modest forecasts weigh on satellite firm

SES, the Luxembourg-based satellite operator, has reported financial guidance for 2025 that fell short of market expectations, prompting a sharp decline in its share price. The company raised its annual earnings and revenue forecasts following its $3.1 billion acquisition of Intelsat, but the increase was more conservative than anticipated. Third-quarter core profit missed analyst estimates, largely due to integration costs associated with the merger. Shares dropped 13.5% in Paris trading, marking the steepest single-day fall since June 2023.

Financial Forecasts and Market Reaction

SES now expects 2025 revenue between €2.6 billion and €2.7 billion, with the midpoint landing 3% below internal consensus figures. Adjusted EBITDA is projected to range from €1.17 billion to €1.21 billion, implying a margin of 44.9%—240 basis points below current market expectations. The company attributed the modest guidance to delayed public contract renewals in the U.S., which have been pushed into next year due to the government shutdown. Finance chief Elisabeth Pataki (pictured) acknowledged the impact during a post-earnings call, noting that revenue timing remains uncertain.

Despite early gains from the merger, SES faces skepticism from investors who had anticipated more aggressive growth. The subdued outlook has raised questions about the company’s ability to absorb Intelsat’s operations while maintaining profitability. Analysts have pointed to integration costs and macroeconomic pressures as key factors behind the weaker-than-expected performance. The selloff reflects broader concerns about the satellite industry’s ability to scale amid rising competition and regulatory complexity.

Debt Load and Spending Cuts

Following the acquisition, SES’s adjusted net debt surged to €6 billion at the end of Q3, up from €1.1 billion a year earlier. Cash reserves were significantly depleted, falling to €965 million from €4.3 billion in the previous quarter. In response, the company has announced plans to reduce capital expenditures, targeting €600–700 million in spending this year compared to €900 million in 2024. Cost-cutting measures also include workforce reductions and the decision not to replace certain satellites.

The financial strain underscores the challenges of executing a large-scale merger while maintaining operational flexibility. SES aims to position itself as a European alternative to Starlink and Project Kuiper, but the path forward will require disciplined investment and strategic prioritization. The company’s efforts to streamline spending reflect a broader industry trend toward consolidation and efficiency. Long-term success may hinge on SES’s ability to balance innovation with fiscal responsibility.

Strategic Positioning and Industry Outlook

SES’s acquisition of Intelsat was intended to create a multi-orbit satellite operator with expanded capabilities and global reach. The move aligns SES with competitors like Eutelsat, which are also pursuing scale to compete with newer entrants in the satellite broadband market. CEO Adel Al-Saleh has emphasized the strategic value of the merger, citing enhanced coverage and spectrum assets. However, the immediate financial impact has tempered investor enthusiasm.