Globalstar, Inc. Q4 FY2024 earnings call

• Completed uplifting to NASDAQ Global Select Market and implemented a 1-for-15 reverse stock split to enhance stock liquidity and meet institutional requirements.
• Q4 2024 total revenue up 17%, service revenue up 18%; full year 2024 total revenue at record $250.3M, up 12%, adjusted EBITDA at $135.3M, up 16% with 54% margin.
• Progress on MSS network: updated services agreement with wholesale customer, partnership with Parsons Corporation demonstrating software-defined satellite communication, successful 5G data call on Band n53 spectrum, and 15-year FCC mobile earth terminal authorization renewal.
• Commercial IoT: achieved 2-way satellite solutions after long development, expanding addressable market.
• XCOM RAN and Band n53: advancing technologies with expanding sales force to push these solutions.

In the fourth quarter of 2024, total revenue increased 17% to $61.2 million compared to the prior year period of $52.4 million. Service revenue rose 18%, driven by wholesale capacity revenue and an 8% increase in commercial IoT due to more subscribers and ARPU. Fourth quarter adjusted EBITDA was $30.4 million, up 21%. For the full year 2024, total revenue reached a record $250.3 million, a 12% increase, and adjusted EBITDA was $135.3 million, a 16% increase, with an adjusted EBITDA margin of 54% (up 190 basis points from 2023).

For 2025, revenue is expected to be between $260 million and $285 million (9% year-over-year growth midpoint) with an adjusted EBITDA margin around 50%. Long-range forecast for extended MSS network first full year service: revenue doubling to $500M with margins over 54%, excluding certain hard-to-forecast growth opportunities like large terrestrial spectrum and XCOM RAN deployments.

• Speculation around capabilities of other direct-to-cellular services.
• Regulatory landscape and potential spectrum sharing issues.
• Uncertainty in consumer demand for new satellite services beyond safety and security uses.
• Timing challenges in satellite launch deployments and ground infrastructure setup.

Q: Can you explain the beam forming capabilities of the Aurora satellites and update on their launch timing?

A: Aurora satellites have beam forming capabilities, but no update on launch timing yet.

Q: What's the update on XCOM RAN progress and potential customers?

A: XCOM RAN is advancing, focused on cost reduction to be competitive, with beta testing ongoing and hoping for ramp in 2025.

Q: How will CapEx and free cash flow look in 2025?

A: Phase 2 satellite CapEx split 50-50 with customer, with ~$150M remaining for first satellite launch, and timing of service payments affecting free cash flow.

Q: What are new innovative features of the extended MSS network satellites and their usage?

A: Satellites have new capabilities, but usage focus on safety/security with unknown consumer demand for additional features.

Q: Explain the relationship between MDA satellites and the existing constellation, and Germany ITU filing?

A: Aurora satellites are part of a new constellation working with existing ones, and Germany ITU filing provides optionality for future larger constellations.

Q: Examples of 2-way IoT use cases and Parsons partnership use cases?

A: 2-way IoT allows commanding devices, Parsons partnership focuses on resilient communication in RF challenged environments, leveraging their channels for market entry.