Globalstar, Inc. (GSAT)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 delivered record revenue of $73.8M, driven by wholesale capacity services and strong Commercial IoT equipment sales; adjusted EBITDA of $37.6M reflected deliberate growth investments, especially XCOM .
• vs Wall Street: Revenue beat consensus by ~$4.9M and EPS beat by ~$0.02; sequentially, revenue grew ~10% vs Q2 2025 and ~2% YoY vs Q3 2024; adjusted EBITDA down YoY due to higher operating investments .
• Guidance reiterated: FY 2025 revenue $260M–$285M and adjusted EBITDA margin ~50% (unchanged from prior quarters), with minimal expected tariff impact .
• Strategic catalysts: accelerated ground infrastructure build (up to 90 tracking antennas) and HIBLEO-XL-1 filing to expand operational frequencies; CEO referenced media reports of a potential strategic transaction but declined to comment, a potential stock narrative driver .

What Went Well and What Went Wrong

What Went Well

• Record quarterly revenue ($73.8M) with service revenue $69.6M and equipment sales $4.2M; Commercial IoT equipment revenue +60% YoY; average Commercial IoT subscribers ~543K (+6% YoY) .
• Wholesale capacity services strengthened, aided by timing of service fees reimbursing network-related costs; adjusted EBITDA margin remained healthy while investing in XCOM and next-gen products (51% in Q3, 52% YTD) .
• Strategic execution: RM200M two-way module reached global availability; progress toward C3 constellation and global ground expansion (Brazil +8 antennas; plan for up to 90 tracking antennas) .

Quote: “We delivered solid top-line performance… total revenue of $73.8 million… driven by wholesale capacity services and continued strength in commercial IoT” — Rebecca Clary, CFO .

What Went Wrong

• Adjusted EBITDA ($37.6M) declined YoY vs $42.8M; operating expenses higher due to growth investments (XCOM, personnel, network operations) .
• Net income fell to $1.1M vs $9.9M YoY, primarily due to non-cash imputed interest from the 2024 prepayment agreement and FX losses; EPS to common shareholders was -$0.01 .
• Ongoing SPOT and Duplex subscriber churn continued to partially offset service revenue gains in IoT; ARPU trends were mixed (Commercial IoT ARPU down modestly YoY) .

Financial Results

Core Metrics (quarterly trend)

Q3 YoY and Sequential Reference

Segment Revenue Breakdown

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We delivered solid top-line performance… record quarterly amount… driven by wholesale capacity services and continued strength in commercial IoT… equipment revenue up 60% YoY… adjusted EBITDA margins: 51% in the quarter and 52% year-to-date” — Rebecca Clary, CFO .
• “There are now over half a billion devices capable of utilizing our network… global ground expansion includes up to 90 new tracking antennas… Hiblio XL1 filing designed to expand operational frequencies for greater capacity and throughput” — Paul Jacobs, CEO .
• “We received an initial order from a new XCOM RAN customer advancing next-generation robotics; expanding beyond warehouse automation to high-density environments like convention centers, airports, stadiums” — Paul Jacobs, CEO .

Q&A Highlights

• Launches: Replacement satellites targeted for first half of 2026; no new timing provided for extended MSS network; antennas for C3 are specific and rolling out (sites ~30 under construction) .
• Spectrum: Globalstar’s harmonized spectrum—16.5 MHz S-band, ~9 MHz L-band, >300 MHz C-band; potential use of portions for unlicensed NR (5G) .
• XCOM RAN vs industrial Wi-Fi: materially better reliability and economics; clustering yields capacity of entire system; margins are solid; medium-term goal for “network-as-a-service” annuity revenues .
• IoT acceleration: share gains and new applications driving growth; current momentum is on existing one-way systems, with two-way ramp expected as customers integrate RM200M .
• Strategic transaction chatter: management will not comment on press rumors/speculation .

Estimates Context

Values retrieved from S&P Global.*

Implications:

• Q3 delivered a clear beat on both revenue and EPS, likely requiring upward revisions to Q4/FY revenue trajectories tied to wholesale capacity services and Commercial IoT momentum; adjusted EBITDA’s YoY decline reflects proactive growth investments (not structural margin degradation) .

Key Takeaways for Investors

• Q3 print was strong: revenue beat consensus by ~7% and EPS beat by ~$0.02; sequential revenue up ~10%, YoY up ~2% .
• Adjusted EBITDA down YoY reflects front-loaded investments (XCOM, network operations); margins remain ~50% with management reiterating FY guide, suggesting near-term profitability resilience .
• Wholesale capacity services strength is tied to reimbursed network-related costs timing—a favorable tailwind as infrastructure scales; Commercial IoT equipment sales are inflecting, with RM200M two-way module now globally available .
• Ground infrastructure acceleration (Brazil expansion; up to 90 antennas) and HIBLEO-XL-1 filing expand capacity options, supporting D2D and next-gen services—strategically important for valuation narrative .
• XCOM RAN is moving from pilots to initial commercial orders with attractive margin profile and potential subscription-like software licensing; revenue contribution ramps in 2026+ .
• Satellite replacement launches: working toward H1 2026 windows; provides operational visibility and service continuity, an underpinning for multi-year infrastructure thesis .
• Near-term trading: potential upside on estimate revisions and any incremental infrastructure/partnership news; watch sentiment around strategic transaction speculation (management no-comment), which could act as a catalyst .