Filtronic signs stellar deal with Elon Musk's Space X to boost orders

Satellite communications innovator Filtronic has struck a multimillion-dollar partnership with Elon Musk's rocket company SpaceX.

The Sedgefield and Leeds-based telecoms firm has landed an initial £15.8m ($19.7m) deal to supply the Californian spacecraft maker that is part of a wider agreement worth at least £48m ($60m) that could eventually see SpaceX subscribe to 10% of Filtronic's shares. It means the Northern firm's solid state power amplifiers (SSPA) and other technology will be used within SpaceX's Starlink constellation of low Earth orbit satellites which are used to deliver broadband internet around the world.

The first order of Filtronic's E-band SSPA modules, which convert low power radio frequency into a higher power one, is due to be delivered to SpaceX in 2025, with further shipments expected to follow. As part of the deal, Filtronic is issuing 21,712,109 warrants that will allow SpaceX to acquire up to 10% of the firm's existing share capital once £48m of orders have been placed by Mr Musk's firm.

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Richard Gibbs, chief executive officer of Filtronic, said: "We are delighted to enter into this important strategic agreement with SpaceX, a market leader in LEO satellite constellations. This milestone development in our SpaceX partnership underlines our core value proposition of high-quality engineering and operational excellence. It also provides Filtronic with the opportunity to scale manufacturing, build capability and execute our technology roadmap.

"The team at Filtronic are excited to formalise and develop our existing relationship with SpaceX and secure the ongoing supply of E-band SSPAs. We also look forward to working alongside the SpaceX engineering team to develop new products for use in the Starlink system."

Mike Nicolls, SpaceX's vice president of Starlink Engineering, added: "Filtronic has been an outstanding supplier for Starlink. They have matched our rate ramp and increasing demand for high-quality parts. Their strong engineering teams have taken ownership of their production process to meet our needs, taking their designs from wafer to functional unit, and are delivering quality parts in E-band which will enable the Starlink network to continue to grow and connect millions of more people around the world with high-speed, low-latency broadband internet."

In a separate update to investors on the London Stock Exchange, Filtronic bosses said performance was likely to exceed current market expectations this year and next. Boosts have come from a number of significant contract wins across the first half of its 2024 financial year which will allow the firm to scale up production leading, it said, to full year revenue marginally ahead of expectations and EBITDA significantly ahead of expectations.

In interim results posted earlier this year, Filtronic swung to an operating loss of £400,000 in the six months to the end of November as revenue reached £8.5m.