Globalstar(GSAT) - 2025 Q2 - Quarterly Results

Executive Summary This section provides an overview of Globalstar's Q2 2025 performance, strategic developments, and financial outlook Q2 2025 Performance Overview Globalstar reported strong financial results for Q2 2025, with an 11% increase in revenue to $67.1 million and a significant improvement in net income to $19.2 million from a prior-year loss. Adjusted EBITDA also grew to $35.8 million, reflecting a 53% margin Q2 2025 Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | | :----------------- | :-------- | :-------- | | Revenue | $67.1 million | $60.385 million | | Net Income (Loss) | $19.2 million | $(9.7) million | | Adjusted EBITDA | $35.8 million | $32.6 million | | Adjusted EBITDA Margin | 53% | - | - Revenue increase driven by higher wholesale capacity services and Commercial IoT revenue[5] Strategic Developments & Infrastructure Expansion The company made significant progress on its infrastructure expansion plan for the third-generation C-3 satellite system, including the first C-3 antenna live in Texas and construction underway globally. Key agreements include a launch services agreement with SpaceX and a collaboration with the government sector - First C-3 antenna now live in Texas, with construction underway at critical sites across North America, Asia, and Europe[3][6] - Entered into a launch services agreement with SpaceX for the second set of replacement satellites and an additional agreement for the final set of nine replacement satellites[3][5][6] - Growing collaboration with partners in the government sector, underscoring technology relevance across commercial, industrial, and government applications[3] Financial Outlook 2025 Globalstar reiterated its financial guidance for the full year 2025, expecting total revenue between $260 million and $285 million and an Adjusted EBITDA margin of approximately 50% Full Year 2025 Financial Outlook | Metric | Guidance | | :----------------- | :-------------------- | | Total Revenue | $260 million - $285 million | | Adjusted EBITDA Margin | Approximately 50% | Recent Operational Highlights This section details Globalstar's recent advancements in infrastructure, satellite system development, and strategic partnerships Infrastructure & Satellite System Development Globalstar advanced its C-3 satellite system with the installation of the first 6-meter tracking antenna in Texas and commenced construction of new gateway infrastructure in Japan and Canada. The company also signed an agreement to double its teleport footprint in Spain, part of a significant international expansion to enhance network capacity and global reach - Completed installation of the first 6-meter tracking antenna for the C-3 satellite system at its flagship ground station in Texas[6] - Commenced construction of new gateway infrastructure at ground stations in Japan and Canada, and signed an agreement to double its teleport footprint in Spain[6] - Entered into launch services agreements with SpaceX for Falcon 9 missions to deploy replacement satellites, with expected launches in 2025 and 2026[5][6] Strategic Partnerships & Collaborations Globalstar executed a commercial access agreement with Parsons Corporation following a successful proof of concept, integrating satellite capabilities with Parsons' software-defined communication technologies. Additionally, a Cooperative Research and Development Agreement (CRADA) was signed with the U.S. Army to evaluate edge-processing satellite solutions for defense applications - Parsons Corporation completed a successful proof of concept and executed a commercial access agreement for a joint solution integrating Globalstar's satellite capabilities[6] - Signed a CRADA with the U.S. Army to evaluate edge-processing satellite solutions in defense applications, highlighting the utility of low size, weight, and power devices[7] - The FCC Space Bureau accepted Globalstar's C-3 petition to advance its mobile satellite services (MSS) network expansion[5] Financial Review This section presents a comprehensive review of Globalstar's financial performance for Q2 and year-to-date 2025, including liquidity and debt analysis Second Quarter 2025 Financial Performance Globalstar's second quarter 2025 financial performance showed significant improvement, driven by increased revenue from wholesale capacity services and Commercial IoT, coupled with lower operating expenses due to reduced stock-based compensation and a CARES Act credit Revenue Analysis Analysis of Globalstar's Q2 2025 revenue performance by service category, highlighting key drivers and changes Q2 2025 Revenue Breakdown | Revenue Category | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change | | :----------------------- | :--------------------- | :--------------------- | :--------- | | Total Revenue | $67,148 | $60,385 | +11% | | Service Revenue | $63,216 | $57,635 | +10% | | - Wholesale Capacity Services | $42,385 | $34,075 | +24.4% | | - Commercial IoT Service | $7,051 | $6,716 | +5% | | - SPOT Service | $9,224 | $10,379 | -11.2% | | - Duplex Service | $3,677 | $4,965 | -25.9% | | Subscriber Equipment Sales | $3,932 | $2,750 | +43% | - Commercial IoT service revenue increased 5% due to an increase in the average number of subscribers, reaching the highest gross activations in company history[10] - Offsetting increases, Duplex and SPOT service revenue decreased due to subscriber churn[10] Operating Income & Expenses Overview of Globalstar's Q2 2025 operating income and expenses, detailing factors influencing changes Q2 2025 Operating Income (Loss) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :----------------------- | :--------------------- | :--------------------- | | Income (loss) from operations | $6,146 | $(1,422) | - Improvement in operating income was due to higher revenue and lower operating expenses, specifically lower stock-based compensation and MG&A expenses[12][13] - Operating expenses were favorably impacted by a $1.9 million employee retention credit received in May 2025 under the CARES Act[14][16] - Higher cost of services resulted from network operating costs for new/upgraded global ground infrastructure and increased personnel costs for product development[15] Net Income & Adjusted EBITDA Analysis of Globalstar's Q2 2025 net income and Adjusted EBITDA, including factors contributing to their changes Q2 2025 Net Income and Adjusted EBITDA | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :----------------- | :--------------------- | :--------------------- | | Net income (loss) | $19,208 | $(9,683) | | Adjusted EBITDA | $35,788 | $32,561 | - Net income improvement was primarily due to higher revenue, lower operating expenses, a non-cash gain on derivative asset mark-to-market adjustment, and favorable foreign currency fluctuations[18] - Adjusted EBITDA increased despite being unfavorably impacted by $1.9 million in costs (net of revenue) associated with XCOM RAN product and service offerings development[19][20] Year-to-Date 2025 Financial Performance For the first six months of 2025, Globalstar saw a 9% increase in total revenue to $127.2 million, driven by wholesale capacity services and Commercial IoT. The company significantly reduced its net loss, achieving a net income of $1.9 million compared to a $22.9 million loss in the prior year, and improved its Adjusted EBITDA Revenue Analysis Analysis of Globalstar's year-to-date 2025 revenue performance by service category, highlighting key drivers and changes YTD 2025 Revenue Breakdown | Revenue Category | YTD 2025 (in thousands) | YTD 2024 (in thousands) | YoY Change | | :----------------------- | :---------------------- | :---------------------- | :--------- | | Total Revenue | $127,180 | $116,865 | +9% | | Service Revenue | $120,283 | $111,100 | +8% | | - Wholesale Capacity Services | $79,094 | $65,287 | +21.1% | | - Commercial IoT Service | $13,631 | $13,153 | +3.6% | | Subscriber Equipment Sales | $6,897 | $5,765 | +39% | - Higher Commercial IoT subscribers contributed to a 4% increase in Commercial IoT service revenue, while a higher volume of Commercial IoT device sales increased subscriber equipment sales by 39%[22][23] Operating Loss Overview of Globalstar's year-to-date 2025 operating loss, detailing factors influencing changes YTD 2025 Operating Loss | Metric | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :----------------------- | :---------------------- | :---------------------- | | Loss from operations | $(2,355) | $(6,134) | - Operating loss improved due to higher revenue, partially offset by increased operating expenses, including costs for XCOM RAN development and a loss on disposal of assets[24][25][26] - Operating expenses were favorably impacted by $3.9 million in employee retention credits received in 2025 under the CARES Act[27] Net Income & Adjusted EBITDA Analysis of Globalstar's year-to-date 2025 net income and Adjusted EBITDA, including factors contributing to their changes YTD 2025 Net Income and Adjusted EBITDA | Metric | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :----------------- | :---------------------- | :---------------------- | | Net income (loss) | $1,877 | $(22,879) | | Adjusted EBITDA | $66,140 | $62,195 | - Net income improvement was driven by higher revenue, a non-cash gain on derivative asset mark-to-market adjustment, and favorable foreign currency gains, partially offset by higher operating and interest expenses[28] - Adjusted EBITDA increased, despite being unfavorably impacted by $3.2 million in costs (net of revenue) associated with XCOM RAN product and service offerings development[29][30] Liquidity & Debt As of June 30, 2025, Globalstar held $308.2 million in cash and cash equivalents. The company generated $209.7 million in net cash from operations, with capital expenditures of $271.8 million primarily for network expansion. Adjusted free cash flow significantly increased to $77.9 million, and total debt outstanding decreased to $400.2 million YTD 2025 Liquidity and Debt Highlights | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents | $308,226 | $391,164 | | Net cash from operating activities (YTD) | $209,741 | $66,486 | | Capital expenditures (YTD) | $271,800 | - | | Adjusted free cash flow (YTD) | $77,940 | $51,944 | | Principal amount of debt outstanding | $400,200 | $417,500 | - The net decrease in cash and cash equivalents was primarily due to capital expenditures for Updated Services Agreements, partially offset by $124.7 million funding from Infrastructure Prepayment[31] - Adjusted free cash flow increased due to $30.0 million in accelerated service payments received under the Updated Services Agreements[33] Company Information & Disclosures This section provides details on Globalstar's conference call, company profile, and important disclosures regarding forward-looking statements and non-GAAP measures Conference Call Information Globalstar hosted a conference call on August 7, 2025, to discuss its second quarter 2025 results, with webcast and teleconference options available for participants - Conference call held on August 7, 2025, at 5:00 p.m. ET to discuss Q2 2025 results[37] About Globalstar Globalstar is an international telecom infrastructure provider offering reliable satellite and terrestrial connectivity services. Its LEO satellite constellation provides secure data transmission, while its Band 53/n53 terrestrial spectrum and XCOM RAN product enhance wireless connectivity. The company also offers next-generation IoT hardware and software for asset tracking and data management - Provides reliable satellite and terrestrial connectivity services as an international telecom infrastructure provider[38] - Operates a low Earth orbit (LEO) satellite constellation for secure data transmission and offers Band 53/n53 terrestrial spectrum for private networks[38] - Offers XCOM RAN product for capacity gains in dense wireless deployments and next-generation IoT hardware and software for asset tracking and data analytics[38] Forward-Looking Statements & Non-GAAP Measures The report includes forward-looking statements subject to risks and uncertainties, and utilizes non-GAAP financial measures such as EBITDA, Adjusted EBITDA, and Adjusted free cash flow, which are reconciled to GAAP measures where feasible - Statements regarding future revenue, financial performance, and business plans are forward-looking and subject to risks outlined in SEC filings[41] - Non-GAAP measures like EBITDA, Adjusted EBITDA, and Adjusted free cash flow are used, with reconciliations provided, but forward-looking Adjusted EBITDA margin cannot be reconciled to GAAP without unreasonable effort[42] Financial Statements & Operating Metrics This section includes Globalstar's condensed consolidated financial statements and key operating metrics for the periods presented Condensed Consolidated Statements of Operations The condensed consolidated statements of operations provide a detailed breakdown of Globalstar's revenues, operating expenses, and net income (loss) for the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Operations (Unaudited, in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Service revenue | $63,216 | $57,635 | $120,283 | $111,100 | | Subscriber equipment sales | 3,932 | 2,750 | 6,897 | 5,765 | | Total revenue | 67,148 | 60,385 | 127,180 | 116,865 | | Cost of services | 19,479 | 18,114 | 38,104 | 34,873 | | Cost of subscriber equipment sales | 2,881 | 2,066 | 4,928 | 4,224 | | Marketing, general and administrative | 9,683 | 10,353 | 21,272 | 20,999 | | Stock-based compensation | 5,949 | 9,164 | 12,906 | 18,391 | | Reduction in the value and disposal of long-lived assets | — | — | 7,038 | 305 | | Depreciation, amortization, and accretion | 23,010 | 22,110 | 45,287 | 44,207 | | Total operating expenses | 61,002 | 61,807 | 129,535 | 122,999 | | Income (loss) from operations | 6,146 | (1,422) | (2,355) | (6,134) | | Interest income and expense, net | (7,428) | (3,644) | (15,373) | (7,429) | | Foreign currency gain (loss) | 11,966 | (4,493) | 16,072 | (8,335) | | Derivative and other | 6,697 | 58 | 6,284 | (791) | | Total other income (expense) | 11,235 | (8,079) | 6,983 | (16,555) | | Income (loss) before income taxes | 17,381 | (9,501) | 4,628 | (22,689) | | Income tax (benefit) expense | (1,827) | 182 | 2,751 | 190 | | Net income (loss) | $19,208 | $(9,683) | $1,877 | $(22,879) | | Net income (loss) per common share: Basic | $0.13 | $(0.10) | $(0.03) | $(0.22) | | Net income (loss) per common share: Diluted | $0.13 | $(0.10) | $(0.03) | $(0.22) | Consolidated Balance Sheets The consolidated balance sheets present Globalstar's financial position as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and stockholders' equity Consolidated Balance Sheets (Unaudited, in thousands) | ASSETS | June 30, 2025 | December 31, 2024 | | :---------------------------------------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $308,226 | $391,164 | | Accounts receivable, net | 24,775 | 26,952 | | Inventory | 11,485 | 10,741 | | Prepaid expenses and other current assets | 18,905 | 18,714 | | Total current assets | 363,391 | 447,571 | | Property and equipment, net | 900,842 | 673,632 | | Operating lease right of use assets, net | 60,483 | 31,835 | | Prepaid network costs | 324,139 | 312,342 | | Derivative asset | 117,184 | 108,799 | | Intangible and other assets, net | 143,110 | 136,058 | | Total assets | $1,909,149 | $1,710,237 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Current portion of long-term debt | $22,708 | $34,600 | | Accounts payable and accrued expenses | 38,996 | 29,677 | | Accrued network construction costs | 15,989 | 15,613 | | Payables to affiliates | 315 | 394 | | Deferred revenue, net | 51,232 | 61,201 | | Total current liabilities | 129,240 | 141,485 | | Long-term debt | 468,799 | 476,822 | | Operating lease liabilities | 51,406 | 26,256 | | Deferred revenue, net | 473,306 | 288,171 | | Other non-current liabilities | 425,518 | 418,620 | | Total non-current liabilities | 1,419,029 | 1,209,869 | | Total liabilities | 1,548,269 | 1,351,354 | | Total stockholders' equity | 360,880 | 358,883 | | Total liabilities and stockholders' equity | $1,909,149 | $1,710,237 | Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA This section provides a reconciliation of GAAP net income (loss) to non-GAAP Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024, detailing adjustments for non-cash and non-recurring items Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA (Unaudited, in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $19,208 | $(9,683) | $1,877 | $(22,879) | | Interest income and expense, net | 7,428 | 3,644 | 15,373 | 7,429 | | Derivative (gain) loss | (6,332) | 26 | (5,905) | 979 | | Income tax (benefit) expense | (1,827) | 182 | 2,751 | 190 | | Depreciation, amortization, and accretion | 23,010 | 22,110 | 45,287 | 44,207 | | EBITDA | 41,487 | 16,279 | 59,383 | 29,926 | | Non-cash compensation | 5,949 | 9,164 | 12,906 | 18,391 | | Foreign exchange gains and losses and other | (12,386) | 4,410 | (16,506) | 8,148 | | Reduction in the value and disposal of long-lived assets | — | — | 7,038 | 305 | | Non-cash expenses associated with the License Agreement | 738 | 2,178 | 2,617 | 3,570 | | Transaction costs in connection with the Updated Services Agreements | — | 530 | 702 | 1,855 | | Adjusted EBITDA | $35,788 | $32,561 | $66,140 | $62,195 | Schedule of Selected Operating Metrics This schedule provides key operating metrics, including service revenue breakdown by category, subscriber numbers, and Average Revenue Per User (ARPU) for Commercial IoT, SPOT, and Duplex services for the three and six months ended June 30, 2025, and 2024 Schedule of Selected Operating Metrics (Unaudited, in thousands, except subscriber and ARPU data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Service revenue: | | | | | | Wholesale capacity services | $42,385 | $34,075 | $79,094 | $65,287 | | Commercial IoT | 7,051 | 6,716 | 13,631 | 13,153 | | SPOT | 9,224 | 10,379 | 18,595 | 20,622 | | Duplex | 3,677 | 4,965 | 7,129 | 9,720 | | Government and other services | 879 | 1,500 | 1,834 | 2,318 | | Total service revenue | 63,216 | 57,635 | 120,283 | 111,100 | | Subscriber equipment sales | 3,932 | 2,750 | 6,897 | 5,765 | | Total revenue | $67,148 | $60,385 | $127,180 | $116,865 | | Average subscribers: | | | | | | Commercial IoT | 534,505 | 508,518 | 528,869 | 506,793 | | SPOT | 224,885 | 246,182 | 227,546 | 248,329 | | Duplex | 21,841 | 27,893 | 22,638 | 28,715 | | Other | 239 | 302 | 248 | 306 | | Total | 781,470 | 782,895 | 779,301 | 784,143 | | ARPU: | | | | | | Commercial IoT | $4.40 | $4.40 | $4.30 | $4.33 | | SPOT | $13.67 | $14.05 | $13.62 | $13.84 | | Duplex | $56.12 | $59.33 | $52.49 | $56.42 | Reconciliation of Non-GAAP Adjusted Free Cash Flow This section reconciles net cash provided by operating activities to non-GAAP Adjusted Free Cash Flow for the six months ended June 30, 2025, and 2024, adjusting for infrastructure prepayment and certain capital expenditures Reconciliation of Non-GAAP Adjusted Free Cash Flow (Unaudited, in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $209,741 | $66,486 | | Less: payments received pursuant to the Infrastructure Prepayment | (124,690) | — | | Less: capital expenditures, excluding reimbursable network purchases | (7,111) | (14,542) | | Adjusted free cash flow | $77,940 | $51,944 |