Why Hedge Fund Davide Leone Bets on SES's Defense Pivot

Paul Allen

19 Nov 2025 • 6 min read

Satellite companies like SES face a global market saturated with commercial clients, driving down traditional growth avenues. Hedge fund manager Davide Leone increased his stake in SES SA in 2025, betting on the company's strategic pivot toward defense markets despite recent earnings disappointments.

This shift isn't just a rebranding; it's a fundamental constraint repositioning that aims to unlock long-term value beyond volatile commercial satellite revenues. 'Defense sectors offer enduring systemic leverage that commercial markets fail to provide,' an investor close to the matter noted.

Challenging Commercial Satellite Growth Assumptions

Conventional wisdom sees commercial satellite firms as growth engines riding telecom demand. Yet this ignores rising competition from low-orbit constellations and terrestrial networks saturating commercial geographies. SES’s pivot reveals the limits of traditional satellite economics, where overcapacity and price wars cap margins.

Unlike competitors doubling down on broadband consumer markets, SES targets defense customers who demand high-reliability communications and integrated system capabilities. This is a constraint repositioning where the traditional revenue model is replaced by durable, high-barrier contracts.

Why Droneshield Says Defense Tech Cycles Are Obsolete and Euro Zone Debt Surges As Defence Spending Quietly Fuels Growth explain broader systemic shifts making this pivot strategic rather than reactionary.

How SES Unlocks Leverage Through Defense Pivot

SES leverages its extensive satellite network to provide secure, resilient communication tailored to defense needs. Unlike commercial-focused rivals, its new contracts involve multiyear agreements with higher switching costs and integration complexity.

For example, defense contracts reduce customer churn and widen margins, enabling SES to amortize spacecraft development costs more predictably. Competitors focusing solely on consumer broadband face constant pricing pressure and infrastructure redundancy.

This shift creates scalable leverage by embedding SES into defense ecosystems, where partnerships with governments and prime contractors form durable revenue streams unavailable to purely commercial satellite providers.

How BRICS Quietly Reshapes Global Economic Leverage In 2025 illustrates geographic defense spending trends that reinforce SES’s positioning.

Why This Matters for Investors and Operators

The constraint repositioned here is the revenue source—from cyclical commercial markets to stable defense sectors with higher leverage per contract. Operators should watch how SES translates this into network and platform integration advantages that work without constant sales churning.

For investors like Davide Leone, this means backing a company whose core system benefits compound over years, immune to short-term earnings noise. Countries expanding defense budgets, including in Europe and emerging markets, can replicate this model by developing satellite systems tailored for security and resilience.

Pivoting revenue constraints builds lasting advantage in satellite markets where scale alone no longer suffices.

Investors and operators navigating strategic shifts like SES's defense pivot need insightful, data-driven sales intelligence to identify opportunity and build lasting connections. Apollo offers B2B sales teams powerful prospecting and engagement tools that align with the article’s theme of leveraging durable contracts and systemic advantage in complex markets. Learn more about Apollo →

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Frequently Asked Questions

Why are satellite companies like SES shifting focus to defense markets?

Companies such as SES are pivoting toward defense markets due to saturation and intense competition in commercial satellite sectors, which drive down growth and margins. Defense contracts offer stable, high-barrier revenue streams with multiyear agreements that reduce customer churn.

How do defense contracts benefit satellite companies compared to commercial contracts?

Defense contracts typically involve durable multiyear agreements with higher switching costs and integration complexity. This reduces customer churn and allows companies like SES to amortize spacecraft development costs predictably, improving scalable leverage and margins compared to volatile commercial satellite revenues.

What challenges do commercial satellite companies face in growth?

Commercial satellite firms confront increasing competition from low-orbit constellations and terrestrial networks saturating their commercial geographies. Overcapacity and price wars in these markets cap margins and limit growth potential, prompting some companies to reposition away from purely commercial models.

Davide Leone is a hedge fund manager who increased his stake in SES SA in 2025, betting on the company's strategic shift toward defense markets. His strategy focuses on backing SES's pivot to durable, high-leverage contracts that compound long-term value despite short-term earnings disappointments.

How does SES's defense pivot create systemic leverage?

By embedding SES into defense ecosystems via partnerships and integrated system contracts, the company secures durable revenue streams with higher barriers to entry. This model leverages SES's extensive satellite network for secure, resilient communications tailored to defense needs.

What geographic trends support SES's defensive pivot?

Rising defense budgets in Europe and emerging markets, alongside trends detailed in analyses like the BRICS economic leverage shift, support SES's positioning. These trends reflect increased geographic defense spending that can replicate SES's satellite system model built for security and resilience.

Why is the defense sector considered more stable for satellite operators?

The defense sector offers stable demand with multiyear high-barrier contracts, reducing revenue volatility seen in commercial markets. Operators gain integration advantages and durable customer relationships, which contrast with the pricing pressure and redundancy challenges typical in consumer broadband.

What role do tools like Apollo play for investors and operators amid strategic shifts?

Sales intelligence platforms like Apollo help B2B teams prospect and engage more effectively by aligning with themes of leveraging durable contracts and systemic advantage. These tools support identifying opportunities and building lasting connections in complex markets undergoing strategic defense pivots.