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Globalstar (GSAT)

GSAT Q3 2024: $1.5B Financing Paves Way for 2025 Revenue Step-Up

Reported on Nov 7, 2024 (After Market Close)
Pre-Earnings Price$27.75Last close (Nov 7, 2024)
Post-Earnings Price$28.50Open (Nov 8, 2024)
Price Change
$0.75(+2.70%)
  • Revenue Acceleration: The revenue step-up expected in 2025 following the launch of the MDA satellites suggests strong future topline growth, with the new agreement not impacting these projections.
  • Advancing Technology Development: The progress from alpha stage testing to beta testing, anticipated in 1Q 2025, indicates expanding capabilities and technological innovation that can drive growth.
  • Robust Satellite Contract Pipeline: Ongoing discussions and steady progress in the satellite contracting process underline a healthy long-term cycle, reflecting confidence in sustained revenue generation from upcoming satellite networks.
  • Unclear progress on satellite contracting: Executives did not provide specifics on vendor deals or detailed progress, leaving uncertainty regarding the timeline for satellite deployment.
  • Extended and potentially unpredictable satellite cycle: The process is acknowledged to take a "reasonably long period" (typically 2-3 years), which could delay revenue benefits and complicate forecasting.
  • Revenue dependency on future satellite launches: Despite the new agreement, the expected revenue step-up in 2025 still hinges on the launch of replacement satellites, which introduces execution risk if delays occur.
  1. Deal Funding Impact
    Q: How do cash inflows support satellite spending?
    A: The deal delivers an aggregate of $1.5 billion—with $1.1 billion from prepayments and $400 million from an equity sale—providing rapid liquidity to fund CapEx over the coming years .

  2. Satellite Constellation & Customer Interest
    Q: When does new constellation generate customer interest?
    A: Management indicated early discussions are underway regarding the new constellation with technology enhancements, although detailed specifics remain forthcoming as launches progress on schedule .

  3. Revenue Guidance & One-Time Items
    Q: Is guidance raised due to one-time bonuses?
    A: While a $7.5 million one-time performance bonus contributed to the raised revenue guidance, it was only one of several factors influencing the updated outlook .

  4. Liquid Intelligent Partnership
    Q: When will the partner deal affect financials?
    A: Ongoing proof-of-concept engagements with Liquid Intelligent are expected to materialize soon, with management aiming to replicate this strategy in similar deep verticals .

  5. Retail Customer Progress
    Q: How is the global retail rollout progressing?
    A: The rollout is progressing well with recent capability upgrades, though the pace is awaiting final approvals through the customer’s internal processes .

  6. Hurricane Activity & Usage Locations
    Q: Can you quantify hurricane activity or usage distribution?
    A: Management noted a significant surge in satellite usage during the hurricanes but chose not to offer specific numbers or exact location details due to technical measurement challenges .

  7. Beta Testing Timeline
    Q: When does beta testing begin?
    A: The transition from alpha to beta testing for their system is expected to occur in 1Q 2025, marking a key step forward in customer trials .

Research analysts covering Globalstar.