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    Globalstar Inc (GSAT)

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

    Reported on May 8, 2025 (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%)

    What went well

    • 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.

    What went wrong

    • 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.

    Q&A Summary

    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 .

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