Globalstar, Inc. Q1 FY2024 earnings call

• Achieved two significant milestones: initiated a 5-year contract with a government services company for mission-critical satellite applications (escalating to $20 million in revenue during the fifth year with revenue share potential) and shipped first commercial units of XCOM RAN for a global retailer, with over-the-air testing showing 4-5x gains vs other small cell deployments. - Financial results: Total revenue $56.5M, service revenue up excluding nonrecurring item, IoT service revenue up 24%, subscriber equipment revenue down due to timing, adjusted EBITDA $29.6M with 52% margin.

Total revenue for Globalstar in the first quarter was $56.5 million, generated primarily from subscriber and wholesale capacity services. Service revenue was slightly up from the prior year's first quarter, excluding a nonrecurring item, service revenue would have increased by $3.7 million, or 7%. Subscriber-driven revenue: commercial IoT service revenue increased 24% due to higher ARPU and a larger subscriber base. Subscriber equipment revenue was down $2.7 million from the prior year's quarter due to timing of commercial IoT and spot device sales. Adjusted EBITDA was $29.6 million, representing a margin of 52%.

Reiterating full-year revenue and adjusted EBITDA guidance issued in February. Variability in revenue due to new deals and transactions, with some timing and amount uncertainty, and will tighten the range as appropriate in coming months.

• FCC process related to spectrum, including potential challenges from other parties lobbying. However, confident in FCC relationship and ongoing operations as Globalstar's services are life-saving and have operated successfully with FCC for decades.

Q: Could you talk about the pipeline, proof of concept timeline, and constellation?

A: Constellation on schedule for 2025 launch. Proof of concept study/test can continue a few more months then convert to full contract. Pipeline includes XCOM RAN with global retailer, MFC opportunities, Band n53/Band 53 ecosystem work, and satellite business as usual.

Q: What parts of the balance sheet might be attacked first and development work on Band 53 and XCOM RAN?

A: Leverage under 4x, expected to decrease. XCOM RAN originally based on Baicells, team working on in-house technical work, POC equipment later this year, full commercial launch shortly after. Some past Band 53 opportunities moved forward, others not currently.

Q: Major causes of variance in revenue guidance?

A: Variability from new deals with some uncertain timing and amounts, transactions expected to impact revenues are included but range tightens as quarters progress.

Q: Thoughts on FCC petition and Mexican spectrum auction?

A: Comfortable with FCC relationship, process ongoing. Mexican spectrum auction process to be participated in, likely only party to do so for certain reasons.

Q: Inference on flat wholesale capacity services?

A: First quarter '23 included $6.5M out-of-period nonrecurring revenue, adjusting for that shows increase, variability in revenue accounts for this.