Globalstar(GSAT) - 2024 Q1 - Quarterly Results

Globalstar First Quarter 2024 Financial Results Financial & Operational Highlights Globalstar exceeded Q1 2024 financial expectations with sequential and prior-year revenue growth, reaffirmed full-year guidance, and advanced new government contracts and XCOM RAN product shipments - CFO Rebecca Clary noted that Q1 financial results generally exceeded expectations, with revenue higher sequentially and versus the prior year's quarterly average, and the company reiterated its full-year 2024 guidance[3] - CEO Dr. Paul E. Jacobs highlighted significant progress in new initiatives expected to drive future growth, including a new government contract, testing new technology on the satellite constellation, and commencing commercial shipments of XCOM RAN products[3] Q1 2024 Key Financial Metrics vs. Q1 2023 | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $56.5 million | $58.6 million | -3.7% | | Net Loss | ($13.2 million) | ($3.5 million) | +277.6% | | Adjusted EBITDA | $29.6 million | $32.6 million | -9.2% | | EPS (Diluted) | ($0.01) | ($0.00) | - | Operational Review Globalstar advanced key operational initiatives, including a new government contract POC, securing a major XCOM RAN customer, demonstrating significant performance gains, and progressing FCC approval for a replacement satellite constellation and Band n53 spectrum business - Initiated a proof-of-concept (POC) phase for a government services contract, which, if successful, will become a five-year agreement with minimum revenue commitments escalating to $20 million in the fifth year, plus a revenue share[5][7] - Secured a customer win with one of the world's largest retailers for its XCOM RAN product to be deployed in Micro Fulfillment Centers (MFCs), with commercial deliveries began in April 2024[5] - Conducted over-the-air testing for XCOM RAN, demonstrating capacity gains of 4x to 5x compared to traditional small cell implementations[5] - The company's application with the FCC for a replacement satellite constellation has completed its public comment cycle, and authorization is expected soon, with the FCC reaffirming Globalstar's exclusive license in its portion of the Big LEO band[12] - Globalstar aims to generate recurring revenue from its Band n53 terrestrial spectrum, which it believes is a unique offering with a thriving ecosystem supported by Qualcomm chipsets[12] Financial Review Q1 2024 saw total revenue decrease to $56.5 million due to lower equipment sales, resulting in an operating loss of $4.7 million, a widened net loss of $13.2 million, and a decline in Adjusted EBITDA to $29.6 million, while cash remained stable at $59.3 million Revenue Analysis Total revenue for Q1 2024 decreased to $56.5 million from $58.6 million in Q1 2023, as growth in service revenue, particularly Commercial IoT, was offset by a significant decline in subscriber equipment sales Q1 Revenue Breakdown (in thousands) | Revenue Type | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Service Revenue | $53,465 | $52,954 | +1.0% | | Subscriber Equipment Sales | $3,015 | $5,690 | -47.0% | | Total Revenue | $56,480 | $58,644 | -3.7% | - Excluding a nonrecurring revenue item in Q1 2023, service revenue increased by $3.7 million, or 7%, year-over-year[6] - Commercial IoT service revenue increased 24% from Q1 2023, driven by growth in both ARPU and the subscriber base[8] - Subscriber equipment sales were down $2.7 million YoY, as the prior-year quarter was a record high for SPOT and Commercial IoT sales due to inventory replenishment following supply chain disruptions[10] Profitability Analysis Q1 2024 saw a shift to an operating loss of $4.7 million from a $7.2 million income, with net loss widening to $13.2 million and Adjusted EBITDA declining to $29.6 million, primarily due to lower equipment revenue and increased operating expenses Q1 Profitability Metrics (in thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | (Loss) Income from Operations | ($4,712) | $7,191 | | Net Loss | ($13,196) | ($3,480) | | Adjusted EBITDA | $29,634 | $32,574 | - The shift to an operating loss was driven by higher operating expenses and lower equipment revenue[11] - Operating expenses increased due to higher stock-based compensation, gateway operating costs (maintenance, security, IT), and increased legal and professional fees[11][13] Liquidity and Cash Flow As of March 31, 2024, Globalstar maintained $59.3 million in cash, with $29.8 million net cash from operations and $27.1 million from financing activities primarily funding $54.2 million in capital expenditures for network upgrades and satellite procurement Key Liquidity and Cash Flow Data (Q1 2024) | Metric | Amount (in millions) | | :--- | :--- | | Cash and Cash Equivalents (End of Period) | $59.3 | | Net Cash from Operations | $29.8 | | Capital Expenditures | $54.2 | - Investing outflows were largely for network upgrades, including milestone work for new satellites with MDA and launch services with SpaceX[17] Financial Outlook Globalstar reiterated its full-year 2024 financial guidance, projecting total revenue between $225 million and $250 million with an Adjusted EBITDA margin of approximately 50% Full Year 2024 Financial Outlook | Metric | Guidance | | :--- | :--- | | Total Revenue | $225 million to $250 million | | Adjusted EBITDA Margin | Approximately 50% | Financial Statements This section presents the unaudited condensed consolidated financial statements for Q1 2024, including the Statement of Operations, Balance Sheet, Adjusted EBITDA reconciliation, and selected operating metrics Condensed Consolidated Statements of Operations Condensed Consolidated Statements of Operations (In thousands, except per share data) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | 2024 | 2023 | | Revenue: | | | | Service revenue | $53,465 | $52,954 | | Subscriber equipment sales | $3,015 | $5,690 | | Total revenue | $56,480 | $58,644 | | Total operating expenses | $61,192 | $51,453 | | (Loss) income from operations | ($4,712) | $7,191 | | Total other expenses | ($8,476) | ($10,627) | | Net loss | ($13,196) | ($3,480) | | Net loss per common share (Basic & Diluted) | ($0.01) | ($0.00) | Consolidated Balance Sheets Consolidated Balance Sheets (In thousands) | | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | $59,282 | $56,744 | | Total current assets | $135,977 | $142,653 | | Total assets | $917,006 | $924,309 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Total current liabilities | $135,682 | $175,908 | | Long-term debt | $364,123 | $325,700 | | Total liabilities | $539,952 | $545,330 | | Total stockholders' equity | $377,054 | $378,979 | Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA Reconciliation to Adjusted EBITDA (In thousands) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | 2024 | 2023 | | Net loss | ($13,196) | ($3,480) | | Interest income and expense, net | $3,785 | $2,032 | | Depreciation, amortization, and accretion | $22,097 | $21,933 | | EBITDA | $13,647 | $20,529 | | Non-cash compensation | $9,227 | $3,760 | | Loss on extinguishment of debt | $0 | $10,403 | | Adjusted EBITDA | $29,634 | $32,574 | Schedule of Selected Operating Metrics Q1 2024 vs Q1 2023 Operating Metrics | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Average Subscribers | | | | Duplex | 29,257 | 36,616 | | SPOT | 249,640 | 266,067 | | Commercial IoT | 502,915 | 462,077 | | Total Subscribers | 782,126 | 765,160 | | ARPU | | | | Duplex | $54.18 | $52.35 | | SPOT | $13.68 | $14.17 | | Commercial IoT | $4.27 | $3.74 |