Corrected Transcript 03-May-2021 Maxar Technologies, Inc. (MAXR.CA) Q1 2021 Earnings Call Total Pages: 22 1-877-FACTSET www.callstreet.com Copyright © 2001-2021 FactSet CallStreet, LLC Maxar Technologies, Inc. (MAXR.CA) Corrected Transcript Q1 2021 Earnings Call 03-May-2021 CORPORATE PARTICIPANTS Jason Gursky Biggs C. Porter Vice President-Investor Relations and Corporate Treasurer, Chief Financial Officer & Executive Vice President, Maxar Technologies, Maxar Technologies, Inc. Inc. Daniel L. Jablonsky President, Chief Executive Officer & Director, Maxar Technologies, Inc. ...................................................................................................................................................................................................................................................... OTHER PARTICIPANTS Ken Herbert Robert Spingarn Analyst, Canaccord Genuity LLC Analyst, Credit Suisse Securities (USA) LLC Tim James Michael Ciarmoli Analyst, TD Securities, Inc. Analyst, Truist Securities, Inc. Thanos Moschopoulos Chris Quilty Analyst, BMO Capital Markets Corp. (Canada) Founder & Partner, Quilty Analytics LLC Seth M. Seifman Analyst, JPMorgan Securities LLC ...................................................................................................................................................................................................................................................... MANAGEMENT DISCUSSION SECTION Operator: Greetings. Thank you for standing by and welcome to the Maxar Technologies First Quarter and 2021 Investor Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Jason Gursky, Vice President of Investor Relations. Please go ahead. ...................................................................................................................................................................................................................................................... Jason Gursky Vice President-Investor Relations and Corporate Treasurer, Maxar Technologies, Inc. Yeah, good afternoon. Thanks, operator. Welcome to Maxar first quarter 2021 earnings conference call. I'm joined today by the company's Chief Executive Officer, Dan Jablonsky; and its Chief Financial Officer, Biggs Porter. Both will make some opening remarks, after which we're going to open up the line for your questions. We're shooting to wrap up the call in about an hour. Before we get started, I'd like to refer listeners to the accompanying slides for today's presentation, which can be found on the company's website at maxar.com in the Investor, Events and Presentations section of the site. Once there, please turn to slide 2, where I'd like to remind you that part of today's discussion, including responses to various questions, may contain forward-looking statements which represent the company's estimates, future plans, objectives, and expected performance at today's date. These statements are based on current 2 1-877-FACTSET www.callstreet.com Copyright © 2001-2021 FactSet CallStreet, LLC Maxar Technologies, Inc. (MAXR.CA) Corrected Transcript Q1 2021 Earnings Call 03-May-2021 assumptions that the company believes are reasonable, but are subject to a wide range of uncertainties and risks that could lead actual results to differ materially from the forward-looking information. You can refer to the advisory regarding forward-looking statements contained in our quarterly earnings releases, earnings call slide decks, and the company's most recent MD&A section found in our Form 10-Q, which is available online under the company's SEDAR profile at sedar.com, under the company's EDGAR profile at sec.gov, or on the company's website at maxar.com. As we get started, I'll ask you to turn to slide 3. And then with that, I'll turn the call over to Dan. Dan, go ahead. ...................................................................................................................................................................................................................................................... Daniel L. Jablonsky President, Chief Executive Officer & Director, Maxar Technologies, Inc. Thanks, Jason. Good afternoon everyone. We had another busy quarter at Maxar, good progress with the business, and continued traction on our customer relationships and winning new programs. We're really encouraged by the pace that the vaccines are rolling out. And we started returning people back to work sites to join approximately a quarter to a third of our people that all along have continued powering through on-site to serve critical customer missions over the past year. Today, I'd like to run through key highlights from the quarter, update you on the progress we're making on our 2021 priorities, provide a view on the demand environment pipeline, and then do a double-click on some of the technologies we're working on with our space technologies that we believe will help us drive growth in the future. So with that, please turn to slide 3 of the accompanying presentation. We generated 12% revenue and 40%-plus adjusted EBITDA growth year-over-year without the effects of the EnhancedView deferred revenue, despite charges related to the SiriusXM satellite program. Biggs will go into the details later. But without these charges, growth for both metrics would have been even higher. Importantly, work on Sirius-XM8 has completed and the satellite is en route to the launch facility. We're looking forward to launch in a few weeks. Well, I'm definitely not pleased with these rearview looking charges. Putting it in context, I'm really encouraged with the underlying growth we generated across both the Intelligence and Space segment this quarter. They're both a strong proof-point that all the work our teams have been doing to drive sustained growth at Maxar now and into the future are on the right path to continue creating shareholder value. One of our most important metrics, free cash flow trends have continued to improve as well. Our trailing 12-month consumption near breakeven this quarter. We continue to expect capital expenditures to trend significantly lower beyond 2021, driving strong cash generation. That will give us even more flexibility on both debt reduction and those investments that will drive growth in the business. Bookings trends also remained positive with trailing 12- month book-to-bill at roughly 1.1 times. Biggs will go into more details later but on guidance excluding the XM7 charge, we've increased the outlook for cash flow, maintained it for adjusted EBITDA, and modestly decreased it for revenue. Overall, a pretty good quarter and start to the year but for the charges on the SiriusXM satellite program. Please turn to slide 4 for a view of the progress we're making, our 2021 priorities. We remain focused on winning in Earth Intelligence which means driving bookings growth including for capacity on WorldView Legion, growing our 3D capabilities and extending the EnhancedView Program. Key wins in the quarter included several renewals with international allies and large technology companies. Some of the large customers have started adding 3D data and point cloud capabilities to their renewals, including a key US ally last week for over $10 million, highlighting and validating the decision we made to acquire Vricon last year. 3 1-877-FACTSET www.callstreet.com Copyright © 2001-2021 FactSet CallStreet, LLC Maxar Technologies, Inc. (MAXR.CA) Corrected Transcript Q1 2021 Earnings Call 03-May-2021 Additionally, we signed contracts with the US Army and the National Geospatial Intelligence Agency this quarter to support training, mapping, intelligence and operational missions. We also signed our first deal with a drone delivery service. On WorldView Legion, I'm pleased to announce that we've signed contracts with four international allies to upgrade their direct access facilities to our 3.0 architecture so that they're ready for Legion when the constellation comes online. This is an important step in the deployment of these assets and the eventual ramp in revenue we'll expect in Earth Intelligence over the next several years. On the EnhancedView Contract Follow-On program, our customer continues its work on extending the program beyond 2023. It's always tough to predict exact dates but it now appears possible that this award is likely to occur later in 2021. If that's the case, we'll expect a renewal of our existing contract in Q3 like we've seen every year for the past decade. So from an execution perspective it was a good quarter with the team generating solid adjusted EBITDA margin that's tracking in line with our full-year guidance range. On the WorldView Legion program we continue to progress and I'm really excited about the capabilities these satellites, this entire constellation will soon be providing to our customers. All that said, it's a complex program as anything this exquisite is expected to be and work continues. Software and engineering teams are getting back into workspaces this week to again be in proximity to the teams that have been conducting the build work and that's really good to see. And it's really impressive to see the morale and energy on these teams. At this point we're tracking a few critical items that could impact