Globalstar Inc ((GSAT)) has held its Q4 earnings call. Read on for the main highlights of the call.
Globalstar Inc. recently held its earnings call, showcasing a largely positive sentiment driven by significant revenue growth, strategic uplisting to NASDAQ, and strong adjusted EBITDA performance. While there were concerns about increased operating expenses and short-term EBITDA margin compression due to strategic investments, the overall financial performance and strategic initiatives were highlighted as outweighing these challenges.
Revenue Growth
Globalstar reported a robust 17% increase in total revenue for Q4 2024, reaching $61.2 million. For the full year, the company achieved a record $250.3 million in revenue, marking a 12% increase. This growth underscores the company’s strong market position and successful execution of its business strategies.
Service Revenue Increase
The company experienced an 18% rise in service revenue during Q4 2024, primarily driven by wholesale capacity revenue. Over the year, service revenue grew by 16%, reflecting Globalstar’s expanding customer base and enhanced service offerings.
Adjusted EBITDA Growth
Globalstar’s adjusted EBITDA saw a 21% increase in Q4 2024, reaching $30.4 million. For the full year, adjusted EBITDA hit a record $135.3 million, a 16% year-over-year increase, highlighting the company’s operational efficiency and profitability.
Significant Cash Position
The company ended the year with a substantial cash position of $391.2 million, bolstered by a total investment of $913 million from a customer in 2024. This strong cash reserve provides Globalstar with the financial flexibility to pursue strategic investments and growth opportunities.
Expansion in Commercial IoT
Globalstar’s Commercial IoT business achieved record annual service revenue in 2024, driven by growth with both existing and new customers. This expansion reflects the company’s successful penetration into the IoT market and its ability to capitalize on emerging opportunities.
NASDAQ Uplisting
The company successfully completed its uplisting to the NASDAQ Global Select Market, accompanied by a 1 for 15 reverse stock split to enhance stock liquidity. This strategic move is expected to increase the company’s visibility and attract a broader investor base.
Operating Expenses Increase
Operating expenses rose by $3.5 million in Q4 2024, partially offsetting the revenue gains. This increase is attributed to strategic investments aimed at supporting the company’s long-term growth objectives.
EBITDA Margin Compression
Globalstar forecasts an adjusted EBITDA margin of around 50% for 2025, indicating short-term compression due to strategic investments. This reflects the company’s commitment to investing in future growth, despite the temporary impact on margins.
Forward-Looking Guidance
For 2025, Globalstar expects revenue between $260 million and $285 million, representing a 9% year-over-year growth at the midpoint. The company anticipates an adjusted EBITDA margin of around 50%, reflecting strategic investments in the XCOM RAN terrestrial solution and MSS product portfolio expansion. Looking further ahead, Globalstar projects that in the first full year of service over the extended MSS network, total revenue could double to $500 million, with robust margins exceeding 54%.
In conclusion, Globalstar Inc.’s earnings call painted a positive picture of the company’s financial health and strategic direction. Despite some concerns over rising operating expenses and short-term margin compression, the company’s strong revenue growth, strategic uplisting, and promising forward-looking guidance underscore its potential for continued success and market expansion.