Globalstar Inc
For the period ended Mar 31, 2025. Filed May 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
GSAT$84.32+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001366868-24-000115
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001366868-25-000077
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 98 current paragraphs.
41 unchanged; 32 reworded; 24 added; 27 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
Satellite and Ground Network
Current report
Our satellites communicate with a network of gateways, each of which serves an area of approximately 700,000 to 1,000,000 square miles. A gateway must be within line-of-sight of a satellite and the satellite must be within line-of-sight of the subscriber to provide services. We have positioned our gateways to provide coverage over most of the Earth's land and human population and continue to evaluate and, as deemed necessary, expand our gateway footprint to optimize coverage.
Current report
We believe that the design of the Globalstar System enables faster and more cost-effective system maintenance and upgrades because the software and much of the hardware are located on the ground. Our multiple gateways allow us to reconfigure the Globalstar System quickly to extend another gateway's coverage to make up for lost coverage from a disabled gateway or to increase capacity resulting from surges in demand.
Current report
We retain 15% of our current and future network capacity to support our other customers, including our existing and future Commercial IoT, SPOT and Duplex subscribers. This capacity can support a substantial increase in our own subscriber base. This retained satellite capacity can be used by us directly or through additional wholesale customer opportunities.
Current report
As of March 31, 2025, we had approximately 778,000 subscribers worldwide. Our subscriber count only includes our MSS subscribers using devices sold and manufactured by Globalstar. For our subscriber driven revenue, the specialized needs of our global customers span many industries. The Globalstar System is able to offer our customers cost-effective communications solutions completely independent of cellular coverage. Although traditional users of wireless telephony and broadband data services have access to such services in developed locations, our MSS customers often operate, travel and/or live in remote regions or regions with under-developed telecommunications infrastructure where such services are not readily available or are not provided on a reliable basis.
Current report
Reverse Stock Split and Nasdaq Listing
Current report
Effective following the close of trading on February 10, 2025, we voluntarily withdrew the listing of our common stock from the NYSE American, effected the reverse stock split at a ratio of 1 to 15 shares of common stock and amended our certificate of incorporation to reduce the number of authorized shares of common stock that we may issue from 2,150,000,000 shares to 143,333,334 shares of common stock. Effective at the start of trading on February 11, 2025, our common stock began trading on a post-split basis under the symbol “GSAT” on the Nasdaq Stock Market LLC.
Current report
For additional information regarding the reverse stock split and Nasdaq listing, see Note 1: Basis of Presentation—Reverse Stock Split and Note 12: Common Stock to our consolidated financial statements.
Current report
Commercial IoT service revenue increased 2% for the three months ended March 31, 2025, compared to the same period in 2024. Average subscribers are up 4% from the prior year's first quarter due to higher subscriber activations. We also expect activations to increase following commercial sales of our two-way reference design module during the second quarter of 2025.
Current report
Duplex service revenue decreased 27% for the three months ended March 31, 2025, compared to the same period in 2024, due to (i) fewer average subscribers resulting in part from our decision to discontinue the manufacture and sale of Duplex devices to increase our focus on maximizing other sources of revenue and (ii) lower ARPU for these services due in part to foreign exchange rate changes.
Current report
Government and other services revenue increased 17% for the three months ended March 31, 2025, compared to the same period in 2024. This category includes fees earned from various governmental service contracts, including with Parsons Corporation, as well as services associated with XCOM RAN sales.
Current report
Total operating expenses were $68.5 million for the three months ended March 31, 2025, compared to $61.2 million during the same period in 2024. An increase in cost of services and marketing, general and administrative expenses were offset partially by a decrease in stock-based compensation. Higher operating expenses were also impacted by a loss on disposal of assets. The main contributors to the variances in operating expenses are explained in detail below.
Current report
Cost of services increased $1.9 million, or 11%, for the three months ended March 31, 2025, compared to the same period in 2024. This increase was due primarily to expenses totaling $1.7 million for the Support Services Agreement (the “SSA”) as well as other ancillary costs to support XCOM technology development. Costs to support new MSS product development also contributed to the increase in operating expenses during the quarter.
Current report
In February 2025, we received an employee retention credit as a result of our eligibility under the provisions of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") for the second quarter of 2021. The total refund of $2.0 million reduced operating expenses during the first quarter of 2025, of which $1.4 million was allocated to Cost of Services and $0.6 million was allocated to Marketing, General and Administrative expense, based on the employee costs incurred during the eligible period.
Current report
Marketing, General and Administrative
Current report
Marketing, general and administrative costs increased $0.9 million, or 9%, for the three months ended March 31, 2025, compared to the same period in 2024. This increase was due primarily to higher professional fees totaling $0.6 million, such as accounting and tax services, as well as legal fees associated with the Globalstar SPE; however, these fees are not expected to recur at this level in the future. Other smaller items, such as personnel costs, costs supporting XCOM (discussed above) as well as occupancy and tax expense, also contributed to the increase in expense from the prior year's quarter. These increases were offset by a portion of the employee retention credit received during the first quarter of 2025 (as discussed above).
Current report
Reduction in Value and Loss on Disposal of Assets
Current report
During the first quarter of 2025, we recorded a loss on disposal of assets totaling $7.0 million, which is the net book value of one of our second-generation satellites that experienced a power control anomaly which rendered the satellite inoperable. Based on our recent and historical testing, we currently do not believe that our other second-generation satellites will experience a similar anomaly during their projected remaining useful lives. Similar activity did not occur at this level in the first quarter of 2024.
Current report
Interest income and expense, net, increased $4.2 million during the three months ended March 31, 2025, compared to the same period in 2024, due to higher interest costs associated with the 2024 Prepayment Agreement totaling $11.5 million, inclusive of a non-cash significant financing component ($8.0 million) in accordance with ASC 606 as well as accrued fees ($7.5 million) offset by debt premium amortization ($4.0 million). During 2024, we paid down the principal balance of the 2023 13% Notes, which reduced interest expense by $7.3 million when comparing the first quarter of 2024 to the first quarter of 2025. Capitalized interest decreased $3.4 million (due in part to the decrease in interest costs eligible for capitalization), which increased "interest income and expense, net" during the first quarter of 2025. Interest income increased $2.7 million (due to a higher cash balance), which decreased "interest income and expense, net" during the first quarter of 2025.
Current report
Income tax expense increased $4.6 million during the three months ended March 31, 2025, compared to the same period in 2024. The increase was driven by current state tax expense as a result of (i) increased forecasted taxable income, (ii) net operating loss utilization in various states and (iii) an increase in the provision for uncertain tax positions.
Current report
Net cash provided by operating activities during the three months ended March 31, 2025 was $51.9 million, compared to $29.8 million during the same period in 2024. This improvement was due to favorable working capital changes resulting primarily from accelerated services fees paid to us totaling $22.5 million associated with the Updated Services Agreements, which increased deferred revenue during the first quarter of 2025. Lower net income, after adjusting for noncash items, partially offset the favorable working capital changes during the period.
Current report
Indebtedness and Other Financing Arrangements
Current report
At March 31, 2025, the principal amount of our debt totaled $408.8 million, which accrues fees at a weighted average stated rate up to 9%.
Current report
At March 31, 2025, our deferred revenue, net totaled $380.1 million, of which the majority is expected to be earned over a period in excess of five years as we perform services to support the Updated Services Agreements.
Removed paragraphs (27)
Previous report
Our ground network includes our ground equipment, which uses technology permitting communication to multiple satellites. Our system architecture provides full frequency re-use. This maximizes satellite diversity (which maximizes quality) and network capacity as we can reuse the assigned spectrum in every satellite beam in every satellite.
Previous report
As of September 30, 2024, we had approximately 778,000 subscribers worldwide. For our subscriber driven revenue, the specialized needs of our global customers span many industries. The number of Commercial IoT devices on our network has increased 7% over the last twelve months. Satellite IoT connectivity has become more critical to a growing number of sectors and use cases, and we plan to continue to evolve and develop our IoT products and services.
Previous report
We also have an agreement with a government services company to utilize the Globalstar System for a mission critical service for government applications.
Previous report
Duplex service revenue decreased $2.0 million, or 25%, and $4.4 million, or 22%, respectively, for the three and nine month periods ended September 30, 2024, compared to the same periods in 2023. For both periods, the decrease in revenue was due to fewer average subscribers resulting from churn exceeding gross activations over the last twelve months as we no longer manufacture and sell Duplex devices in favor of other use cases for the Globalstar System, including wholesale capacity services.
Previous report
SPOT service revenue decreased 8%, for both the three and nine months ended September 30, 2024, compared to the same periods in 2023. For both periods, the decrease in revenue resulted from fewer average subscribers due to competitive pressure.
Previous report
Commercial IoT service revenue increased 5% and 17%, respectively, for the three and nine months ended September 30, 2024 compared to the same periods in 2023. For both periods, the increase in revenue was due to higher average subscribers. For the nine month period, higher ARPU also contributed to the increase in revenue. Average subscribers are up 7% year over year, due to gross activation momentum experienced over the last year. The increase in ARPU was due to higher usage on the network as well as an improvement in the mix of subscribers on various rate plans.
Previous report
Government and other services revenue includes fees earned from various service contracts. We signed an agreement in the first quarter of 2024 with a government services company to utilize the Globalstar System for a mission critical service for government applications. The $2.5 million proof of concept phase commenced in February 2024 and is progressing as planned. This agreement has a five-year term, if the project is implemented, and contains annual minimum revenue commitments escalating to $20 million during the fifth year, with potential for further upside through the agreement's revenue share arrangement.
Previous report
Subscriber Equipment Sales
Previous report
Revenue generated from subscriber equipment sales decreased $7.0 million due primarily to the timing of Commercial IoT sales. Our pipeline for Commercial IoT opportunities remains strong, evidenced by a 14% increase in equipment sales volume on a consecutive quarter basis.
Previous report
Total operating expenses increased to $62.9 million from $55.7 million and to $185.9 million from $159.6 million for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The main contributors to the variances in operating expenses are explained in detail below.
Previous report
Loss on Extinguishment of Debt
Previous report
We recorded a loss on extinguishment of debt of $10.4 million during the first quarter of 2023 following the full pay-off of the 2019 Facility Agreement in March 2023. The extinguishment loss was recognized due to the remaining deferred financing costs and debt discount associated with the instrument at the time of repayment.
Previous report
Interest income and expense, net, decreased $1.1 million and decreased $0.7 million, respectively, during the three and nine months ended September 30, 2024 compared to the same periods in 2023. For the three and nine month periods, higher capitalized interest (which decreases interest expense) of $2.5 million and $7.8 million, respectively, was partially offset by higher gross interest costs of $1.4 million and $7.8 million, respectively. Higher interest income also decreased "interest income and expense, net" for the nine month period.
Previous report
Income tax expense increased $1.6 million and $1.7 million, respectively, during the three and nine months ended September 30, 2024 compared to the same periods in 2023. As discussed in Note 5: Commitments and Contingencies in our condensed consolidated financial statements, we recorded $1.0 million in expense for uncertain tax positions associated with interest on withholding tax related to the Canadian tax audits.
Previous report
•PIK interest payment to the lenders of the 2023 13% Notes (as defined below) of $13.6 million; and
Previous report
•Issuance of debt under the 2023 Funding Agreement (as defined below) totaling $37.7 million; offset by
Previous report
•Recoupment under the 2021 Funding Agreement (as defined below) totaling $26.0 million.
Previous report
For discussion of the Updated Services Agreements and the 2024 Prepay Agreement, see Note 8: Subsequent Events to our condensed consolidated financial statements.
Previous report
Net cash provided by operating activities during the nine months ended September 30, 2024 was $98.5 million compared to $68.6 million during the same period in 2023. This improvement was due to favorable working capital changes primarily as a result of the timing of accounts receivable under the Service Agreements, specifically related to the timing of receipt and the amount of service fees. An improvement in net income, after adjusting for noncash items, also contributed to the increase in cash flows provided by operating activities.
Previous report
Indebtedness
Previous report
Funding Agreements
Previous report
The Service Agreements provide for, among other things, payment of up to $252 million to us (the “2023 Funding Agreement”) which we intend to use to fund 50% of amounts due under the satellite procurement agreement with MDA, as well as launch, insurance and ancillary costs incurred in connection with the construction and launch of these satellites. The remaining amount of the satellite costs is expected to be funded from our operating cash flows. The outstanding balance under the 2023 Funding Agreement was $155.0 million as of September 30, 2024.
Previous report
The amount of the Funding Agreement and fees payable thereon are expected to be recouped from amounts payable for services provided by us under the Service Agreements in installments for a period of 16 quarters beginning no later than the third quarter of 2025.
Previous report
During 2021, we received payments totaling $94.2 million (the "2021 Funding Agreement"), which are being recouped as services are performed by us over the Phase 1 Service Period with the last recoupment to be made in the first quarter of 2026. During the first nine months September 30, 2024, a total of $26.0 million has been recouped. The outstanding balance under the 2021 Funding Agreement was $49.5 million as of September 30, 2024.
Previous report
2023 13% Notes
Previous report
In 2023, we completed the sale of $200.0 million in aggregate principal amount of non-convertible 13% Senior Notes due 2029 (the "2023 13% Notes"). The 2023 13% Notes are our senior, unsecured obligations and have a stated maturity of September 15, 2029. The 2023 13% Notes were sold at an issue price of 95% of the principal amount and bear interest at a rate of 13.00% per annum payable semi-annually in arrears. We have agreed under the Service Agreements to pay cash interest on the 2023 13% Notes at a rate of 6.5% per annum and PIK interest at a rate of 6.5% per annum. The Indenture includes customary terms and covenants. The outstanding balance under the 2023 13% Notes was $219.6 million as of September 30, 2024. Pursuant to the transaction described in Note 8: Subsequent Events to our condensed consolidated financial statements, we redeemed these notes on November 5, 2024.
Previous report
Series A Preferred Stock
Reworded paragraphs (32)
Previous wording
We provide wireless communications services across the globe in order to meet our customers' increasing desire for connectivity. In addition to supporting Internet of Things ("IoT") data transmissions in a variety of applications, we provide reliable connectivity in areas not served or underserved by terrestrial wireless and wireline networks and in circumstances where terrestrial networks are not operational due to natural or man-made disasters.
Current wording
Through its global satellite network, Globalstar, Inc. ("we", "us" or the "Company") provides Mobile Satellite Services (“MSS”), including wholesale capacity services to the Customer (defined below) and voice and data communications services to retail, business and governmental customers. We offer these services over our network of in-orbit satellites and ground stations (“gateways”), pursuant to our spectrum licenses, which we refer to collectively as the Globalstar System. In addition to supporting Internet of Things ("IoT") data transmissions in a variety of applications, we provide reliable connectivity in areas not served or underserved by terrestrial wireless and wireline networks and in circumstances where terrestrial networks are not operational due to natural or man-made disasters. By providing wireless communications services across the globe, we meet our customers' increasing desire for connectivity.
Previous wording
Our constellation of Low Earth Orbit ("LEO") satellites was designed to maximize the probability that at least one satellite is visible from any point on the Earth's surface between the latitudes 70° north and 70° south. Our goal is to provide service levels and call or message success rates equal to or better than our MSS competitors so our products and services are attractive to potential customers.
Current wording
Our constellation of Low Earth Orbit ("LEO") satellites is designed to maximize the probability that at least one satellite is visible from any point on the Earth's surface between the latitudes 70° north and 70° south. Our goal is to provide service levels and call or message success rates equal to or better than our MSS competitors so our products and services are attractive to potential customers.
Previous wording
In 2022, we entered into a satellite procurement agreement with Macdonald, Dettwiler and Associates Corporation ("MDA") pursuant to which we expect to acquire at least 17 and up to 26 satellites. In August 2024, the Federal Communications Commission (the "FCC") issued an order granting our application to replenish our HIBLEO-4 U.S.-licensed system with up to 26 satellites and operate them under an additional fifteen-year license term to provide long-term continuity of our MSS. The technical specifications and design of these replacement satellites are similar to our current satellites. The satellite procurement agreement requires delivery of the first 17 new satellites by 2025. In 2023, we entered into a Launch Services Agreement with Space Exploration Technologies Corp. (“SpaceX”) and certain related ancillary agreements (the “Launch Services Agreements”), providing for the launch of the first set of new satellites during 2025. Under the Service Agreements, subject to certain terms and conditions, we expect to receive payments equal to 95% of the approved capital expenditures under the satellite procurement agreement and Launch Services Agreements (to be paid on a straight-line basis over the design life of the satellites) beginning with the commencement of the Phase 2 Service Period (the "Approved Capital Expenditure Payments").
Current wording
In 2022, we entered into a satellite procurement agreement with Macdonald, Dettwiler and Associates Corporation ("MDA") pursuant to which we expect to acquire at least 17 and up to 26 satellites. In August 2024, the Federal Communications Commission (the "FCC") Space Bureau issued an order granting our application to replenish our HIBLEO-4 U.S.-licensed system with up to 26 satellites and operate them under an additional 15-year license term to provide long-term continuity of our MSS. The technical specifications and design of these replacement satellites are similar to our current satellites. The satellite procurement agreement requires delivery of the 17 new satellites by 2025. In February 2025, we entered into another agreement with MDA pursuant to which we expect to acquire more than 50 satellites related to the Extended MSS Network.
Previous wording
Our competitive advantages are leveraged through our ability to successfully deliver wholesale satellite capacity, communications products and services, and terrestrial spectrum and network solutions.
Current wording
Our competitive advantages are leveraged through our ability to deliver wholesale satellite capacity, communications products and services, government services, and terrestrial spectrum and network solutions. These core competencies are outlined below.
Previous wording
Wholesale satellite capacity services include satellite network access and related services using the Globalstar System. For instance, we provide certain services to Customer’s end users pursuant to the Service Agreements. The Service Agreements generally require us to allocate network capacity to support the Services and also for Customer to enable Band 53/n53 for use in cellular-enabled devices designated by Customer for use with the Services. As consideration for the Services provided by us, payments to us include a fixed service fee, payments relating to certain service-related operating expenses and capital expenditures, additional fees related to expanded services, and potential bonus payments subject to satisfaction of certain licensing, service and related criteria.
Current wording
Wholesale satellite capacity services include satellite network access and related services over the Globalstar System. We provide certain services to Apple, Inc. (the "Customer") pursuant to certain Updated Services Agreements (as defined below). The Updated Services Agreements generally require us to allocate network capacity to support the services provided to the Customer and also for the Customer to enable Band 53/n53 for use in cellular-enabled devices designated by the Customer for use with the services. As consideration for the services provided by us, payments to us include a fixed service fee, fees relating to certain service-related operating expenses and capital expenditures, additional fees related to expanded services, and potential bonus payments subject to satisfaction of certain licensing, service and related criteria.
Previous wording
On October 29, 2024, we entered into the Updated Services Agreements with Customer to deliver expanded services over a new MSS network, including a new satellite constellation, expanded ground infrastructure, and increased global MSS licensing (the "Expanded MSS Network"). As consideration for the additional services, payments to us will include incremental service fees tied to the cost of the Extended MSS Network, fees for providing additional related services, fees tied to expenses incurred for the provision of such services, and performance bonuses. For additional information about the Updated Services Agreements, see Note 8: Subsequent Events to our condensed consolidated financial statements.
Current wording
In October 2024, we agreed to make certain amendments to the then-existing service agreements and entered into other agreements with the Customer (as amended, collectively, the "Updated Services Agreements") with the Customer to deliver expanded services over a new MSS network, including a new satellite constellation, expanded ground infrastructure, and increased global MSS licensing (collectively the "Extended MSS Network"). As consideration for the additional services, payments to us will include incremental service fees tied to the cost of the Extended MSS Network, fees for providing additional related services, fees tied to expenses incurred for the provision of such services, and performance bonuses (if earned). For additional information about the Updated Services Agreements, see Note 2: Special Purpose Entity to our condensed consolidated financial statements.
Previous wording
For the nine months ended September 30, 2024 and 2023, our Customer under the Service Agreements was responsible for 57% and 49%, respectively, of our total revenue; except for this customer, no other customer was responsible for more than 10% of our revenue.
Current wording
For the three months ended March 31, 2025 and 2024, the Customer under the Updated Services Agreements was responsible for 61% and 55%, respectively, of our total revenue. No other customer was responsible for more than 10% of our revenue. The loss of the Customer would likely have a material adverse impact to our financial condition, results of operations and cash flows.
Previous wording
We currently provide the following communications products and services to our subscribers:
Current wording
We currently provide the following communications products and services to our MSS subscribers:
Previous wording
We compete aggressively on price and strive for differentiation in the solutions that we offer to our customers. As technological advancements are made, we continue to explore opportunities to develop new products and provide new services over the Globalstar System to meet the needs of our existing and prospective customers.
Current wording
We compete aggressively on price and strive to differentiate the solutions that we offer to our customers. As technological advancements are made, we continue to explore opportunities to develop new products and provide new services over the Globalstar System to meet the needs of our existing and prospective customers. Our current initiatives are focused in part on further investment and development of Commercial IoT-enabled devices, including a two-way reference design module and finished products.
Previous wording
We have terrestrial licenses in 11 countries, resulting in approximately 10.4 billion MHz-POPs (megahertz of our spectrum authority in each country multiplied by a total population of approximately 823.4 million over the covered area) as of September 30, 2024. Prospective spectrum partners, including cable companies, wireless carriers, system integrators, utilities and other infrastructure operators, are able to benefit from access to uniform and increasingly “borderless” spectrum working across geographies. Our expanding portfolio of terrestrial spectrum represents a substantial opportunity for us. The Service Agreements significantly enhance the device ecosystem for Band 53/n53 by enabling access to our terrestrial spectrum band in certain of our customer's devices.
Current wording
We have terrestrial licenses in 12 countries, resulting in approximately 11.9 billion MHz-POPs (megahertz of our spectrum authority in each country multiplied by a total population of approximately 959 million over the covered area) as of March 31, 2025. Prospective spectrum partners, including cable companies, wireless carriers, system integrators, utilities and other infrastructure operators, are able to benefit from access to uniform and increasingly “borderless” spectrum working across geographies. We believe our expanding portfolio of terrestrial spectrum represents a substantial opportunity for us. The Updated Services Agreements significantly enhance the device ecosystem for Band 53/n53 by enabling access to our terrestrial spectrum band in certain of the Customer's devices.
Previous wording
We have an Intellectual Property License Agreement (the “License Agreement”) with Virewirx, Inc. (formerly XCOM Labs, Inc.) (“Licensor” or “XCOM”). Under the License Agreement, we purchased an exclusive right and license (the “License”) as well as certain Intellectual Property Assets (as defined in the License Agreement) relating to the development and commercialization of XCOM’s key novel technologies for wireless spectrum innovations, including XCOM Radio Access Network (XCOM RAN) systems, XCOM’s commercially available coordinated multi-point radio system. We believe bringing together Globalstar’s terrestrial spectrum and relationships with leading partners around the world with XCOM’s differentiated technology creates a significant opportunity to deliver private network for mission critical needs of customers.
Current wording
We have an Intellectual Property License Agreement (the “License Agreement”) with XCOM Labs, Inc. (now known as Virewirx, Inc.) (“Licensor” or “XCOM”). Under the License Agreement, we purchased an exclusive right and license (the “License”) as well as certain intellectual property assets relating to the development and commercialization of XCOM’s key novel technologies for wireless spectrum innovations, including XCOM RAN systems, which is XCOM’s commercially available coordinated multi-point radio system. XCOM RAN systems deliver substantial capacity gains in dense, complex, challenging wireless environments in sub 7 GHz spectrum. We also gained exclusive access to XCOM’s peer-to-peer connectivity technologies that could have applications across cellular and satellite devices. As part of the License Agreement, certain XCOM employees, including engineering, test, product and R&D professionals, who helped develop the licensed technologies, have continued to further commercialize the technology on behalf of Globalstar as either employees or contractors. We believe bringing together Globalstar’s terrestrial spectrum and relationships with leading partners around the world with XCOM’s differentiated technology creates a significant opportunity to deliver private networks for mission-critical needs of customers.
Previous wording
•average monthly revenue per user, or ARPU, which is an indicator of our pricing and ability to obtain effectively long-term, high-value customers. We calculate ARPU separately for each type of our subscriber-driven revenue, including Duplex, Commercial IoT and SPOT;
Current wording
•average monthly revenue per user, or ARPU, which is an indicator of our pricing and ability to obtain effectively long-term, high-value customers. We calculate ARPU separately for each type of our subscriber-driven revenue, including Commercial IoT, SPOT and Duplex;
Previous wording
Comparison of the Results of Operations for the three and nine months ended September 30, 2024 and 2023
Current wording
Comparison of the Results of Operations for the three months ended March 31, 2025 and 2024
Previous wording
Our revenue is categorized as service revenue and equipment revenue. We provide MSS services to customers using technology from the Globalstar System and equipment revenue is generated from the sale of MSS devices that work over the Globalstar System. We also generate service and equipment revenue from the sale of XCOM RAN systems and associated services that support the systems. For the three months ended September 30, 2024, total revenue increased 26% to $72.3 million from $57.7 million for the same period in 2023. For the nine months ended September 30, 2024, total revenue increased 10% to $189.2 million from $171.4 million for the same period in 2023. See below for a discussion of the main fluctuations in revenue.
Current wording
Our revenue is categorized as service revenue and equipment revenue. We provide MSS services to customers using the Globalstar System. Equipment revenue is generated from the sale of MSS devices that work over the Globalstar System. We also generate service and equipment revenue from the sale of XCOM RAN systems and associated services that support such systems. For the three months ended March 31, 2025, total revenue increased 6% to $60.0 million from $56.5 million for the same period in 2024, resulting primarily from higher wholesale capacity services, offset partially by a decline in subscriber services revenue. See below for a discussion of the main fluctuations in revenue.
Previous wording
The following table sets forth our average number of subscribers and ARPU by type of revenue.
Current wording
The following table sets forth our average number of subscribers and ARPU by type of service revenue.
Previous wording
Wholesale capacity services includes revenue generated from satellite network access and related services. Government and other services includes revenue generated primarily from terrestrial spectrum and network solutions as well as certain governmental and engineering service contracts. None of these service revenue items are subscriber driven. Accordingly, we do not present ARPU for wholesale capacity services revenue and government or other services revenue reflected in the table above.
Current wording
Wholesale capacity services revenue includes revenue generated from satellite network access and related services. Government and other services revenue includes revenue generated primarily from terrestrial spectrum and network solutions as well as governmental and engineering service contracts. None of these service revenue items are subscriber driven. Accordingly, we do not present ARPU for wholesale capacity services revenue or government and other services revenue in the table above.
Previous wording
Wholesale capacity services revenue increased 59% and 31%, respectively, for the three and nine months ended September 30, 2024 compared to the same periods in 2023. This category includes only revenue from our customer under the Service Agreements. The majority of the increase during 2024 is due to fees related to expanded services that began in 2024. Additionally, in connection with the execution of the Updated Services Agreements, Customer agreed to pay earned bonuses associated with our performance under the Service Agreements, including an out of period amount of $5.0 million associated with 2023 performance.
Current wording
Wholesale capacity services revenue increased 18% for the three months ended March 31, 2025, compared to the same period in 2024. This category includes revenue from the Customer under the Updated Services Agreements. The majority of the increase during the first quarter of 2025 was due to fees related to expanded services that began in March 2024 as well as revenue associated with higher network costs, which is a driver of the revenue earned under these agreements.
Previous wording
Product engineering efforts are underway to develop a new consumer SPOT device, which we expect to stabilize or increase demand from our customers.
Current wording
SPOT service revenue decreased 9% for the three months ended March 31, 2025, compared to the same period in 2024, due principally to fewer subscribers. The decline in average subscribers is due to continued competitive pressure; however, product engineering efforts are underway to develop a new consumer SPOT device, which we believe could stabilize or even increase demand for such services from our subscribers.
Previous wording
Cost of services increased $5.3 million and $16.1 million, respectively, for the three and nine months ended September 30, 2024 compared to the same periods in 2023. These increases are due primarily to network expansion in connection with services provided under the Service Agreements; a substantial portion of network-related costs are reimbursed thereunder and this consideration is recognized as revenue in accordance with the terms of the Service Agreements. As expected with our new and upgraded ground infrastructure, for the three and nine month periods, gateway operating costs, such as maintenance and personnel costs, increased $2.6 million and $8.9 million, respectively. We do not expect the operating costs that support existing services under the Service Agreements during the Phase 1 Service Period to increase meaningfully beyond current levels. In connection with the August 2023 License Agreement with XCOM, we entered into a Support Services Agreement (the “SSA”). During the three and nine months ended September 30, 2024, we recognized $0.5 million and $3.3 million, respectively, in expense associated with the SSA and other ancillary costs, of which the majority were noncash. Costs to support new product development also contributed to the increase in the three and nine months ended September 30, 2024.
Current wording
We also continue to incur higher costs following network expansion and upgrades. In connection with services provided under the Updated Services Agreements, a substantial portion of network-related costs are reimbursed thereunder and this consideration is recognized as revenue in accordance with the terms of the Updated Services Agreements. Personnel costs that support the Globalstar System increased $0.8 million from the prior year's first quarter, including $0.3 million related to annual cash bonuses paid in March 2025.
Previous wording
Stock-based compensation expense increased $3.9 million and $16.0 million, respectively, for the three and nine months ended September 30, 2024 compared to the same periods in 2023. These increases were due primarily to restricted stock units ("RSUs") granted to certain executives in connection with the License Agreement in August 2023. We granted 44.5 million RSUs, which are earned over a four-year performance period and vest upon Globalstar common stock trading at various price levels throughout the performance period. The total fair value of the RSUs was $39.5 million and is being recognized over the derived service period of 2.6 years; nearly 60% of the compensation cost for these RSU's is being recognized during 2024.
Current wording
Stock-based compensation expense decreased $2.3 million for the three months ended March 31, 2025, compared to the same period in 2024. The decrease was due primarily to restricted stock units ("RSUs") granted to certain executives in connection with the License Agreement in August 2023, the majority of the cost of which was recognized in 2024.
Previous wording
We recorded foreign currency gains of $4.9 million and losses of $3.4 million, respectively, during the three and nine months ended September 30, 2024. We recorded foreign currency losses of $4.2 million and $0.2 million, respectively, during the three and nine months ended September 30, 2023. Many of our foreign subsidiaries have USD-denominated intercompany payable balances, which impact the foreign currency gains and losses recorded each reporting period. In this instance, foreign currency gains result from other currencies strengthening relative to the U.S. dollar; inversely, foreign currency losses result from the U.S. dollar strengthening relative to other currencies.
Current wording
We recorded foreign currency gains of $4.1 million during the three months ended March 31, 2025, compared to foreign currency losses of $3.8 million during the three months ended March 31, 2024. Many of our foreign subsidiaries have USD-denominated intercompany payable balances, which impact the foreign currency gains and losses recorded each reporting period. In these instances, foreign currency gains result from other currencies strengthening relative to the U.S. dollar; inversely, foreign currency losses result from the U.S. dollar strengthening relative to other currencies.
Previous wording
Our principal sources of liquidity include cash on hand, cash flows from operations and proceeds from the funding agreements described in Note 4: Long-Term Debt and Other Financing Arrangements in our condensed consolidated financial statements. These liquidity sources are expected to meet our short-term and long-term liquidity needs for funding our operating costs, capital expenditures and financing obligations, including scheduled recoupments under the 2021 Funding Agreement (defined below), interest on our 13% Notes (defined below), and dividends on our perpetual preferred stock. In addition, we have issued warrants under the Service Agreements and to Thermo in connection with its guaranty of the 2023 Funding Agreement (defined below). These warrants could become a source of liquidity if exercised.
Current wording
Our principal sources of liquidity include cash on hand, cash flows from operations and proceeds from the 2023 Funding Agreement and Infrastructure Prepayment (each term defined below). We expect these liquidity sources to meet our short-term and long-term liquidity needs for funding our operating costs, capital expenditures, including related to the Extended MSS Network and other growth opportunities, and financing obligations, including scheduled recoupments under the 2021 and 2023 Funding Agreements and 2024 Prepayment Agreement as well as dividends on our perpetual preferred stock. In addition, we have issued warrants to the Customer that are exercisable in accordance with the Updated Services Agreements and to Thermo in connection with its guarantee of the 2023 Funding Agreement. These warrants would become a source of liquidity if exercised.
Previous wording
As of September 30, 2024 and December 31, 2023, we held cash and cash equivalents of $51.9 million and $56.7 million, respectively.
Current wording
As of March 31, 2025 and December 31, 2024, we held cash and cash equivalents of $241.4 million and $391.2 million, respectively. The decrease in cash and cash equivalents during the first quarter of 2025 was due primarily to capital expenditures associated with our commitments under the Updated Services Agreements.
Previous wording
The principal amount of our debt outstanding was $424.1 million at September 30, 2024, compared to $398.7 million at December 31, 2023. This increase was due to the following:
Current wording
The principal amount of our debt outstanding was $408.8 million at March 31, 2025, compared to $417.5 million at December 31, 2024. This decrease was due to our scheduled recoupment of $8.7 million under the 2021 Funding Agreement (more detailed discussion and defined terms below).
Previous wording
Cash Flows for the nine months ended September 30, 2024 and 2023
Current wording
Cash Flows for the three months ended March 31, 2025 and 2024
Previous wording
Net cash provided by operations includes primarily cash received from the performance of wholesale capacity services as well as cash received from subscribers related to the purchase of equipment and satellite voice and data services. We use cash in operating activities primarily for network costs, personnel costs, inventory purchases and other general corporate expenditures.
Current wording
Net cash provided by operating activities includes primarily cash received from our customers from the sale of products and services, including the performance of wholesale capacity services as well as related to the purchase of equipment and satellite voice and data services. We use cash in operating activities primarily for network costs, personnel costs, inventory purchases and other general corporate expenditures.
Previous wording
Net cash used in investing activities was $107.7 million for the nine months ended September 30, 2024 compared to $142.4 million for the same period in 2023. Net cash used in investing activities during both periods primarily included network upgrades associated with the Service Agreements and payments of capitalized interest. The timing of milestone payments made to our next-generation satellite vendors was the primary driver of the decrease in cash used during 2024.
Current wording
Net cash used in investing activities was $190.6 million for the three months ended March 31, 2025, compared to $54.2 million for the same period in 2024. Net cash used in investing activities during both periods included primarily network upgrades associated with the Updated Services Agreements and, during 2024, payments of capitalized interest. The increase in net cash flow used in investing activities was due primarily to an increase in network upgrades during 2025, principally due to $143.6 million in milestone payments to MDA associated with the Extended MSS Network contract executed in February 2025.
Previous wording
Cash Flows Provided by Financing Activities
Current wording
Cash Flows (Used in) Provided by Financing Activities
Previous wording
Net cash provided by financing activities was $4.9 million during the nine month period ended September 30, 2024 compared to net cash provided by financing activities of $105.9 million for the same period in 2023. In February 2024 and April 2023, we received proceeds from the 2023 Funding Agreement totaling $37.7 million and $87.7 million, respectively, which were used to pay amounts owed to MDA. Pursuant to the terms of the 2021 Funding Agreement, scheduled recoupment payments began in the third quarter of 2023 and totaled $26.0 million and $6.3 million during the nine-months ended September 30, 2024 and 2023, respectively. During the first quarter of 2023, we received proceeds from the sale of the 2023 13% Notes, which were used to pay the remaining principal amount due under the 2019 Facility Agreement and financing costs. Finally, during both 2024 and 2023, we paid cash dividends to our preferred equity holders.
Current wording
Net cash used in financing activities was $11.4 million during the three month period ended March 31, 2025, compared to net cash provided by financing activities of $27.1 million for the same period in 2024. In February 2024, we received proceeds from the 2023 Funding Agreement totaling $37.7 million, which was used to pay amounts owed to MDA. During both 2025 and 2024, we made payments for the scheduled recoupments pursuant to the terms of the 2021 Funding Agreement and also paid cash dividends to our preferred equity holders.
Previous wording
In 2022, we issued 149,425 shares of 7.0% Perpetual Preferred Stock, Series A, with a liquidation preference of $1,000 per share (the “Series A Preferred Stock”) and a total fair value of $105.3 million. Holders of Series A Preferred Stock are entitled to receive, when, as and if declared by our Board of Directors, cumulative cash dividends based on the liquidation preference of the Series A Preferred Stock, at a fixed rate equal to 7.00% per annum, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year. Through September 30, 2024, we paid dividends totaling $8.0 million.
Current wording
During the first quarter of 2025, we paid dividends totaling $2.6 million to holders of the Series A Preferred Stock. Holders of the Series A Preferred Stock are entitled to receive, when, as and if declared by the Board, cumulative cash dividends based on the liquidation preference of the Series A Preferred Stock, at a fixed rate equal to 7.00% per annum.
Previous wording
Below is a summary description of our debt and other financing arrangements at September 30, 2024. For more information, see Note 4: Long-Term Debt and Other Financing Arrangements and Note 8: Subsequent Events to our condensed consolidated financial statements.
Current wording
For more information regarding our 2024 Debt Repayment, 2021 and 2023 Funding Agreements, Series A Preferred Stock and Infrastructure Payments, see Note 5: Long-Term Debt and Other Financing Arrangements and Note 2: Special Purpose Entity to our condensed consolidated financial statements.
Previous wording
There have been no material changes in our Critical Accounting Policies and Estimates from the information provided in the "Critical Accounting Policies and Estimates" section of "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2023 Annual Report.
Current wording
There have been no material changes in our Critical Accounting Policies and Estimates from the information provided in the "Critical Accounting Policies and Estimates" section of Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 Annual Report.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
In 2023, we entered into a Launch Services Agreement with Space Exploration Technologies Corp. (“SpaceX”) and certain related ancillary agreements (the “Launch Services Agreements”), providing for the launch of the first set of these satellites. In October 2024, we entered into another agreement with SpaceX for the launch of the new satellites related to the Extended MSS Network.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Globalstar, Inc. ("we", "us" or the "Company") provides Mobile Satellite Services (“MSS”) including voice and data communications services as well as wholesale capacity services through its global satellite network. We offer these services over our network of in-orbit satellites and ground stations (“gateways”), pursuant to our spectrum licenses, which we refer to collectively as the Globalstar System.