Globalstar Inc ((GSAT)) has held its Q1 earnings call. Read on for the main highlights of the call.
In the recent earnings call, Globalstar Inc. expressed a generally positive sentiment, highlighting robust revenue growth and significant advancements in satellite and IoT solutions. The company also discussed strategic leadership appointments and promising partnerships. However, these positives were tempered by increased costs affecting EBITDA and a prolonged sales cycle for a major customer. Despite these hurdles, Globalstar remains optimistic about its long-term growth prospects.
Revenue Growth
Globalstar reported a 6% increase in total revenue, reaching $60 million compared to $56.5 million in the previous year. This growth was primarily driven by a 7% rise in service revenue, largely attributed to wholesale capacity services.
Increase in Adjusted Free Cash Flow
The company saw a significant rise in adjusted free cash flow, which soared to $47.6 million from $19.9 million in the prior year’s first quarter. This improvement underscores Globalstar’s enhanced financial position.
Successful Launch of Two-Way Satellite IoT Solution
Globalstar launched a two-way satellite IoT solution, expanding its capabilities beyond traditional one-way tracking. This development marks a significant milestone in the company’s technological advancements.
New State-of-the-Art Satellite Operations Control Center
The opening of a new satellite operations control center in Covington, Louisiana, is set to enhance Globalstar’s satellite fleet management capabilities and improve network performance.
Strategic Leadership Appointments
Globalstar strengthened its leadership team with the appointments of Dr. Tamer Kadous and Daaman Hejmadi as Vice Presidents and General Managers of the Terrestrial Network and Wholesale Consumer Businesses, respectively.
Technological Breakthrough at Mobile World Congress
At the Mobile World Congress, Globalstar demonstrated its XCOM RAN technology using the n53 spectrum, achieving impressive speeds of 400 megabits per second. This showcases advancements in robotics, autonomous vehicles, and augmented reality.
Partnership with MDA Space
Globalstar signed a C$1.1 billion contract with MDA Space to build over 50 satellites for its next-generation LEO constellation, marking a significant milestone for the company’s extended MSS network plans.
Higher Costs Impacting EBITDA
The company faced higher cash costs to support its XCOM RAN product, negatively impacting adjusted EBITDA by $1.3 million and reducing the adjusted EBITDA margin by approximately 200 basis points compared to the previous year.
Long Sales Cycle for Major Customer
Globalstar is experiencing a prolonged sales cycle with a major customer, a large retailer, which is delaying potential revenue generation from the XCOM RAN business.
Forward-Looking Guidance
Globalstar reiterated its full-year 2025 revenue guidance of $260 million to $285 million, with an anticipated adjusted EBITDA margin of around 50%. The company ended the fiscal period with $241.4 million in cash, and net cash flows from operations were $51.9 million, reflecting a strong financial position.
In summary, Globalstar’s earnings call conveyed a positive outlook with strong revenue growth and strategic advancements in satellite and IoT solutions. Despite challenges such as increased costs and a prolonged sales cycle, the company remains confident in its long-term growth trajectory.