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Globalstar, Inc. (GSAT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $60.0M (+6% YoY) with Adjusted EBITDA of $30.4M (51% margin), while GAAP diluted EPS was $(0.16); management reiterated FY25 guidance of $260–$285M revenue and ~50% Adjusted EBITDA margin .
  • Versus Wall Street consensus (S&P Global), Q1 2025 missed on revenue ($60.0M vs $63.8M*) and Primary EPS (−$0.094 vs −$0.03*), driven by higher cost of services (XCOM RAN, network costs) and MG&A, plus non-cash interest; wholesale capacity remained the core revenue driver .
  • Strategic catalysts: commercial two-way satellite IoT launch with mass production in Q2 2025, SOCC opening to enhance fleet operations, and leadership hires to scale terrestrial spectrum and wholesale capacity initiatives .
  • Near-term stock narrative drivers: progress toward XCOM RAN commercialization “next quarter,” step-up in service fees when replacement satellites become operational, and sustained wholesale capacity revenue under updated agreements .

What Went Well and What Went Wrong

  • What Went Well
    • Wholesale capacity services drove 7% YoY service revenue growth; Adjusted EBITDA increased to $30.4M with a 51% margin .
    • Two-way satellite IoT solution launched via Globalstar’s LEO constellation; management expects stronger activations following commercial sales in Q2 2025 .
    • SOCC opened in Covington to enhance satellite fleet management and readiness for next-gen deployments; attended by senior U.S. officials, underscoring strategic importance .
    • CEO: “We successfully launched our 2-way satellite IoT solution... addressing the rising global demand for reliable, low-power, low-latency command and control...” .
  • What Went Wrong
    • GAAP net loss widened to $(17.3)M due to higher cost of services (XCOM SSA, product development, network ops), MG&A, and loss on asset disposal; non-cash imputed interest also weighed on results .
    • Subscriber churn in legacy Duplex and SPOT offset Commercial IoT growth (average subscribers +4%); SPOT and Duplex service revenue declined YoY .
    • Relative to consensus, Q1 revenue and EPS missed; adjusted EBITDA faced a ~200 bp headwind from upfront XCOM RAN support costs net of revenue .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$72.307 $61.177 $60.032
Net Loss ($USD Millions)$(6.169) $(50.219) $(17.331)
Diluted EPS ($USD, GAAP)N/A$(0.42) $(0.16)
Adjusted EBITDA ($USD Millions)$42.805 $30.375 $30.352
Adjusted EBITDA Margin (%)59% N/A51%

Segment revenue breakdown

Service Revenue Component ($USD Millions)Q3 2024Q4 2024Q1 2025
Wholesale capacity services$43.861 $36.150 $36.709
Commercial IoT$6.650 $6.442 $6.580
SPOT$10.444 $10.074 $9.371
Duplex$5.955 $4.481 $3.452
Government & other$1.998 $0.534 $0.955
Total Service Revenue$68.908 $57.681 $57.067
Subscriber equipment sales$3.399 $3.495 $2.965
Total Revenue$72.307 $61.176 $60.032

KPIs

KPIQ3 2024Q4 2024Q1 2025
Avg subscribers – Commercial IoT512,260 514,918 523,349
Avg subscribers – SPOT242,134 235,785 229,512
Avg subscribers – Duplex26,535 24,853 23,189
ARPU – Commercial IoT ($)$4.33 $4.17 $4.19
ARPU – SPOT ($)$14.38 $14.24 $13.61
ARPU – Duplex ($)$74.81 $60.10 $49.62

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Millions)FY 2025$260–$285 $260–$285 Maintained
Adjusted EBITDA Margin (%)FY 2025~50% ~50% Maintained
Tariff impact assumptionFY 2025Minimal Minimal Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
XCOM RAN commercializationBuilding pipeline; n53 integration underway; VAR partnerships (Liquid Intelligent) Demonstrated 5G data call (n53); margin compression expected near-term from investment Commercial availability targeted “next quarter”; upfront costs impacting Q1 Adjusted EBITDA by ~$1.3M Improving commercialization readiness
Two-way satellite IoTAlpha→beta testing planned Q1’25 Beta ramp, de minimis revenue in ’25; stronger in ’26 Launched; mass production expected Q2’25; boosts activations Launch achieved; scaling
Regulatory/legalFCC renewed HIBLEO-4; Mexico terrestrial authority win 15-year FCC blanket mobile earth terminal renewal SOCC opening with FCC Chairman attendance Positive regulatory momentum
Wholesale capacity/Extended MSSUpdated services agreements; performance bonuses driving Q3 Extended MSS network with >50 satellites (MDA contract); service fee step-up on replacements Fees continue under Updated Services Agreements; replacement satellites trigger fee step-up once operational Scaling and monetization visibility
Tariffs/macroNot a focusMonitoring; minimal impact expected Exposure limited to SPOT/IoT devices; multiple mitigation levers Managed risk
Terrestrial spectrum (Band 53/n53)Band 53 ecosystem expansion First 5G data call on n53 MWC demo: 400 Mbps using 10 MHz; anchor spectrum importance vs CBRS variability Strengthening differentiation

Management Commentary

  • CFO: “Revenue increased 6% to $60.0 million… Adjusted EBITDA was $30.4 million… we are reiterating… revenue $260–$285 million and Adjusted EBITDA margin ~50%” .
  • CEO: “We successfully launched our 2-way satellite IoT solution… This marks a significant expansion beyond our traditional one-way tracking capabilities…” .
  • CFO on tariffs: “We expect a relatively immaterial impact in the near-term… reiterating our full year 2025 outlook” .
  • CEO on Band 53 anchor: “Having a global band of spectrum… is a very differentiated position relative to other players” .
  • CFO on service fee step-up: “Fees tied to CapEx for replacement satellites will start being funded once the first batch is operational” .

Q&A Highlights

  • XCOM RAN economics and customer pipeline: Management emphasized a long sales cycle with a large retail lead customer, expanding direct sales, and initial government contracts; commercialization targeted for next quarter .
  • Band 53 as anchor spectrum: CBRS has underwhelmed for mission-critical private networks; Globalstar’s n53 provides reliability and global applicability for industrial IoT use cases .
  • Replacement satellites and revenue timing: Service fees step up when the first batch becomes operational; two launches expected for the 17 replacements, with timing updates forthcoming .
  • Two-way IoT ramp: Beta underway; revenue impact gradual in ’25 with broader deployment anticipated in ’26 as partners integrate modules .

Estimates Context

MetricQ3 2024Q4 2024Q1 2025
Revenue Consensus Mean ($USD)$60.491M*$60.240M*$63.827M*
Revenue Actual ($USD)$72.307M*$61.177M*$60.032M*
Primary EPS Consensus Mean ($USD)$0.000*$0.0033*$(0.030)*
Primary EPS Actual ($USD)$0.0615*$(0.0670)*$(0.0936)*
  • Q3 2024: Revenue and EPS beat. Q4 2024: Revenue beat but EPS missed. Q1 2025: Revenue and EPS missed.
  • Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Wholesale capacity remains the growth engine; updated agreements provide visibility to sustained revenue, with fee step-ups as replacement satellites enter service .
  • Two-way satellite IoT is now launched; mass production in Q2 ’25 should accelerate Commercial IoT activations, aiding subscriber growth despite SPOT/Duplex churn .
  • XCOM RAN commercialization near-term is a key catalyst; expect mix shift toward terrestrial spectrum solutions with n53 differentiation and potential government deployments .
  • Short-term margin pressure from strategic investments is planned; FY25 Adjusted EBITDA margin guided at ~50%, with long-term margin expansion targeted beyond the investment phase .
  • Risk management around tariffs appears robust; direct exposure limited and multiple mitigation levers in place (supply chain diversification, re-shoring, pricing) .
  • Operational readiness improved via SOCC; supports execution on next-gen constellations and network performance, a positive for reliability and future capacity .
  • Near-term trading implications: watch for XCOM RAN commercialization updates, two-way IoT customer wins, and replacement satellite operational milestones that trigger fee step-ups; medium-term thesis anchored in scaling wholesale, IoT growth, and differentiated terrestrial spectrum assets .

Additional Data Points and Reconciliations

  • Liquidity: Cash and equivalents $241.4M; operating cash flow $51.9M; CapEx $190.6M (extended MSS commitments); principal debt $408.8M (down from $417.5M) .
  • Adjusted free cash flow: $47.6M, aided by $22.5M accelerated service payments under updated agreements .
  • Non-GAAP impacts: Adjusted EBITDA excludes non-cash compensation, FX, asset reductions, and XCOM-related non-cash items; see reconciliation for details .

Relevant Q1 2025 Press Releases

  • Earnings release: reiteration of FY25 guidance; operational highlights and detailed financial review .
  • SOCC opening in Covington: enhanced fleet management and next-gen readiness .
  • GCT partnership: development of two-way satellite/cellular Band 53 IoT modules; showcased at MWC Barcelona .