Globalstar, Inc. (GSAT)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 revenue rose 11% year over year to $67.1M, with GAAP diluted EPS of $0.13 and Adjusted EBITDA of $35.8M (53% margin); management reiterated full-year guidance of $260–$285M revenue and ~50% Adjusted EBITDA margin .
• Strong wholesale capacity services (+$8.3M y/y) and continued Commercial IoT growth offset SPOT and Duplex churn; operating income swung to $6.1M from a loss of $1.4M y/y .
• Results beat S&P Global consensus on revenue ($67.1M vs $63.1M*) and Primary EPS (0.038 vs -0.05*); GAAP diluted EPS of $0.13 was also a positive surprise* *.
• Catalysts: SpaceX launch services agreement for replacement satellites, FCC Space Bureau acceptance of C-3 petition, and U.S. Army CRADA; ground infrastructure build-out (first C-3 antenna live) supports extended MSS expansion .

What Went Well and What Went Wrong

What Went Well

• Wholesale capacity services strength drove revenue growth (+$8.3M y/y); CFO: “Net income for the quarter was $19.2 million… Adjusted EBITDA… reflecting a margin of 53%” .
• Government traction: Parsons POC completed and commercial access agreement executed; U.S. Army CRADA for edge-processing solutions .
• Infrastructure milestones: first 6m C-3 antenna live; SpaceX launch agreement signed for the final nine replacement satellites .
• CEO tone: “We’re delivering on our promise to build a next generation mobile satellite network… confident in the strength of our strategic roadmap” .

What Went Wrong

• SPOT (-$1.2M y/y) and Duplex (-$1.3M y/y) service revenue declines due to subscriber churn; average subscribers down in both categories .
• Adjusted EBITDA headwind of ~$1.9M from XCOM RAN development costs ahead of revenue; higher cost of services to support ground infrastructure .
• Higher interest expense from non-cash imputed interest on the 2024 prepayment agreement; FX volatility noted, though Q2 impact was favorable .

Financial Results

Segment Revenue Breakdown

KPIs

Liquidity and Balance Sheet (selected)

• Cash and cash equivalents: $308.2M at 6/30/25 vs $391.2M at 12/31/24 .
• Principal debt: $400.2M at 6/30/25, down from $417.5M at 12/31/24 .
• Adjusted FCF (6M): $77.9M (includes $30.0M accelerated service payments) .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CFO Rebecca Clary: “Our second quarter results were strong with revenue increasing 11% to $67.1 million. Net income for the quarter was $19.2 million, while Adjusted EBITDA* was $35.8 million… margin of 53%… reiterating… revenue… $260 million to $285 million, and Adjusted EBITDA margin… ~50%” .
• CEO Dr. Paul E. Jacobs: “We’re delivering on our promise to build a next generation mobile satellite network that is global, resilient and scalable… confident in the strength of our strategic roadmap” .
• CFO on tariffs: “We believe Globalstar is well positioned to minimize any significant financial impact… ability to shift production… and pass through incremental costs… expect a relatively immaterial impact in the near term” .
• CEO on market traction: “RM200 2A module… over 50 partners currently testing… positioning us firmly for growth in multiple high value sectors” .

Q&A Highlights

• XCOM RAN commercialization and licensing: Management emphasized horizontal deployment opportunities, end-to-end ownership of software stack, and potential network-as-a-service models; licensing interest likely contingent on traction with MNOs .
• Terrestrial spectrum and international licensing: Progress continuing (e.g., Mexico); Spain n53 spectrum cited as differentiator enabling over-the-air demonstrations at MWC .
• Spectrum sharing feasibility: CEO highlighted technical constraints, regulator perspectives, and Globalstar’s track record; asserted confidence in spectrum position .
• Development/rollout with initial customer: Core technology “done,” incremental development for new verticals; cost savings expected from internal software stack .

Estimates Context

Values retrieved from S&P Global.*

Implications:

• Q2 2025 beat on revenue and Primary EPS versus consensus; expect upward revisions in near-term revenue models for wholesale capacity services and potentially higher FY revenue midpoint if H2 cadence holds .
• Adjusted EBITDA reported by the company ($35.8M) differs from standard EBITDA figures used in consensus; analysts should align definition before comparing profitability metrics .

Key Takeaways for Investors

• Strong top-line momentum from wholesale capacity services and Commercial IoT, coupled with a swing to positive operating income, supports near-term multiple expansion; reiteration of guidance de-risks H2 setup .
• Government vertical is emerging as a meaningful revenue contributor (Parsons commercial agreement; U.S. Army CRADA), providing diversified demand beyond consumer/SPOT .
• Infrastructure and launch milestones (C-3 ground build-out; SpaceX) underpin service continuity and capacity expansion; monitor launch timing updates as catalysts .
• Watch XCOM RAN investment pace: near-term EBITDA headwinds are intentional; proof-points around customer deployments and horizontal wins will be key to the terrestrial thesis .
• Subscriber mix shift continues (SPOT/Duplex churn vs IoT growth); ARPU stability in IoT suggests scalable unit economics, but SPOT pressure warrants caution .
• Tariff risk appears contained; global manufacturing/logistics flexibility and potential pass-through capability reduce macro sensitivity .
• For trading: beat on revenue/EPS, reaffirmed guidance, and regulatory/launch headlines are positive catalysts; sustained wholesale momentum and government contracts could drive estimate and sentiment upgrades near term .