The PanGeo Alliance of operators of Earth observation satellites has been a source of revenue for UrtheCast and ultimately may feature one or more M&A transactions as small operators consolidate. Credit: PanGeo Alliance   The PanGeo Alliance of operators of Earth observation satellites has been a source of revenue for UrtheCast and ultimately may feature one or more M&A transactions as small operators consolidate. Credit: PanGeo Alliance


PARIS — Satellite geospatial imagery and services provider UrtheCast on March 28 said revenue doubled in 2016 and the company turned EBITDA-positive on the strength of its ownership of two Spanish satellites and an alliance with other small Earth imagery providers.

Canada-based UrtheCast is nonetheless walking a tightrope as it transitions from a failed effort to develop a business using International Space Station-based cameras into a company that now operates two revenue-generating satellites and is designing two separate constellations of optical and radar observation spacecraft.

In a conference call with investors, UrtheCast officials declined to forecast 2017 revenue or disclose details of key milestones expected this year.

Chief Executive Wade Larson said the company had converted one of three MoUs with prospective investor partners in the future OptiSAR constellation of eight optical and eight synthetic-aperture L- and X-band radar satellites.

He declined to name the customer, but said the commitment was valued at $180 million. UrtheCast said the agreement was pending “the customer obtaining funding on or before Dec. 31, 2017.”

Kazakhstan the 1st investor/partner in OptiSAR?

The government of Kazakhstan has said in recent months that it had agreed to invest in OptiSAR and would own one radar and one optical sensor.

The Kazakh government on March 1 reiterated its partnership with UrtheCast but said a formal agreement required a final OK from the government’s KazKosmos space agency.

UrtheCast has hired Surrey Satellite Technology Ltd. (SSTL) of Britain to build the OptiSAR satellites, but the commercial commitment so far is limited to design studies. Hardware production would not start until UrtheCast has sufficient commitments from partners.

Larson said he was optimistic that two other MoUs would be converted into contracts this year. He declined to say whether these two would then enable hardware construction to begin.

Until the OptiSAR and a sister constellation, the all-optical UrtheDaily, are fully financed, UrtheCast is counting on the Deimos-1 and higher-resolution Deimos-2 satellites. The satellites were owned Deimos Imaging of Spain before UrtheCast purchased Deimos, for $84.5 million, in July 2015.

The purchase date meant 2016 was the first full year of Deimos revenue for UrtheCast. The company did not break out Deimos’ contribution in its annual accounts.

UrtheCast reported revenue of 111.3 million Canadian dollars ($82.6 million) in 2016, about triple the figure for 2015.

But inside that figure is 61.3 million Canadian dollars in non-cash revenue coming from the value of the company’s two cameras aboard the International Space Station (ISS).

UrtheCast-Energia on the space station: Unhappy marriage, now a divorce

UrtheCast’s ISS camera story with partner RSC Energia of Russia began badly, with a poorly done camera mounting on board the orbital complex, and ended badly.

UrtheCast said the agreement with Energia on operations and maintenance of the cameras was supposed to last until ISS’s retirement, now planned for 2024.

Instead, Energia informed UrtheCast in November that the arrangement would terminate on Dec. 31, 2016. It is not clear whether Russia’s incursion into Ukraine — Canada has a large Ukrainian-origin population — added to the problems in the UrtheCast-Energia relationship.

In any event, UrtheCast booked an impairment charge of 10.9 million Canadian dollars in 2016 and is now trying to sell the cameras or lease them to some other company. A lease arrangement would require substantial assistance from Energia.

Setting aside the ISS-related non-cash portion of the financial results, UrtheCast still doubled its revenue in 2016, to 49.9 million Canadian dollars. Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, was 5.6 million Canadian dollars, compared to a loss of 12.9 million Canadian dollars in 2015.

UrtheCast reported 8.1 million Canadian dollars in cash as of Dec. 31 and said contractual obligations in 2017 totaled 28.1 million Canadian dollars.

The company in early 2017 received a loan from the Canadian government and issued new stock, generating 18.2 million Canadian dollars in proceeds, and negotiated a credit facility of 10 million Canadian dollars with the Royal Bank of Canada.

UrtheCast said in a filing to the Toronto Stock Exchange that it had sufficient liquidity to meet its obligations in 2017.

M&A potential inside PanGeo Alliance

UrtheCast has joined an consortium of companies with Earth imaging satellites called the PanGeo Alliance.

The company said “a material portion” of its 2016 Earth observation revenue came from distributing other companies’ imagery and providing value-added services to these partners.

Larson hinted that one or more transactions might occur within the PanGeo Alliance as part of the Earth imagery sector’s current dynamism. He specifically said the acquisition of U.S. optical imagery and service provider DIgitalGlobe by Canada’s MDA Corp., which operates radar satellites, is an endorsement of UrtheCast’s strategy of combing optical and radar imagery.

“This is a sector that is consolidating now — not in retrenchment, but in expansion — because people believe the opportunities are so interesting,” especially for constellations of satellites, Larson said. He added that many RFPs from prospective customers now specifically call for multi-company solutions.

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Peter B. de Selding
Peter B. de Selding
Peter de Selding is a Co-Founder and editor for He started SpaceIntelReport in 2017 after 26 years as the Paris Bureau Chief for SpaceNews where he covered the commercial satellite, launch and the international space businesses. He is widely considered the preeminent reporter in the space industry and is a must read for space executives. Follow Peter @pbdes