Globalstar, Inc.
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
View on SEC.govAbout this filing
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.
Jun 30, 2025 · Filed Aug 7, 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 2025-03-31; filed 2025-05-08.
0001366868-25-000077
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001366868-25-000104
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 98 previous paragraphs and 103 current paragraphs.
56 unchanged; 39 reworded; 8 added; 3 removed; 0 previous and 0 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 (8)
Current report
In June 2025, the FCC Space Bureau accepted our third-generation C-3 satellite system (the "C-3 System") petition for filing and published it for comment. The C-3 System is expected to support the Extended MSS Network.
Current report
Wholesale Satellite Capacity Services
Current report
Government Services
Current report
We have an exclusive partnership with Parsons Corporation, a governmental services company, to utilize the Globalstar System to provide an innovative solution design to enhance resilience against disrupted communication pathways. We also provide engineering services to assist certain governmental and other customers in developing new applications to operate on our network and to enhance our ground network. These services include hardware and software designs to develop specific applications operating over our satellite network, as well as the installation of gateways and antennas.
Current report
Recent Regulatory Change
Current report
See Note 15: Subsequent Events for more information regarding the One Big Beautiful Bill Act (“OBBBA”) was enacted on July 4, 2025. The Company is reviewing the impact of the OBBBA, but does not expect it to have a material impact on the Company’s 2025 results.
Current report
Marketing, general and administrative expenses decreased $0.7 million and increased $0.3 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024. For both periods, the portion of the employee retention credits received during the first and second quarters of 2025 (as discussed above) offset expenses. For the six month period ended June 30, 2025, as expected, certain costs, including higher professional fees associated with the Globalstar SPE exceeded such offset of expenses; however, these costs decreased during the second quarter of 2025 and are not expected to recur at the higher level over the second half of 2025.
Current report
For the three month period, the forecasted 2025 tax provision, as estimated at June 30, 2025, remained relatively consistent with that estimated in the first quarter 2025 despite various jurisdictional fluctuations in forecasted pre-tax income/loss as result of second quarter unrealized foreign currency gains. This resulted in a corresponding change in the annualized effective tax rate during the three months ended June 30, 2025. The effective tax rate for the three months ended June 30, 2025 reflects additional tax benefits to adjust prior quarters' results to the annual effective tax rate. For the six month period, the increase was primarily driven by current state tax expense as a result of increased forecasted taxable income and state tax impacts of a new uncertain tax position in the US.
Removed paragraphs (3)
Previous report
Wholesale Satellite Capacity
Previous 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.
Previous 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).
Reworded paragraphs (39)
Previous 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.
Current wording
Through its global satellite network, Globalstar, Inc. ("we", "us" or the "Company") provides Mobile Satellite Services (“MSS”), including voice and data communications services to retail, business and governmental customers as well as wholesale capacity services. 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 global mobile satellite communications services, we aim to meet our customers' increasing desire for connectivity.
Previous 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.
Current wording
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
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 wording
Our satellites communicate with a global network of gateways, each of which serves an area of up 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 locate our gateways to maximize coverage over most of the Earth's land and human population and provide redundancy in the unlikely event that a tracking antenna or gateway is offline for any reason. We constantly evaluate and, as deemed necessary, expand our global network of gateways to meet market demand and optimize coverage and service quality. We have announced plans to expand various ground networks to support the Extended MSS Network with construction underway at critical sites in North America, Asia and Europe. This global expansion initiative is expected to include approximately 90 new antennas across 35 ground stations in 25 countries.
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") 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.
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 17 satellites with an option to procure an additional nine satellites to replace our HIBLEO-4 U.S.-licensed system. In August 2024, the Federal Communications Commission (the "FCC") Space Bureau granted our application to replace our HIBLEO-4 U.S.-licensed system with up to 26 satellites and operate them under a renewed 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 HIBLEO-4 replacement satellites by 2025. These replacement satellites are expected to complement our existing second-generation constellation to ensure continuous service delivery. 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
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.
Current wording
In each of August 2023 and June 2025, we entered into a Launch Services Agreement with Space Exploration Technologies Corp. (“SpaceX”) and certain related ancillary agreements (collectively, the “Launch Services Agreements”), providing for the launch of the first set of 8 replacement satellites expected in the fourth quarter of 2025 and second set of 9 replacement satellites expected in 2026, respectively, that the Company is acquiring pursuant to the 2022 satellite procurement agreement with MDA. In October 2024, we entered into additional agreements with SpaceX for the launch of the new C-3 System (defined below) satellites to support the Extended MSS Network.
Previous 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.
Current wording
Our competitive advantages are leveraged through our ability to deliver wholesale satellite capacity services, 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 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.
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 the 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 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
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.
Current wording
In October 2024, we agreed to make certain amendments to the then-existing service agreements and entered into other related agreements with the Customer (as amended, collectively, the "Updated Services Agreements") 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 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.
Current wording
For the six months ended June 30, 2025 and 2024, the Customer, under the Updated Services Agreements, was responsible for 62% and 56%, 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 on our financial condition, results of operations and cash flows.
Previous wording
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 wording
As of June 30, 2025, we had approximately 784,000 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 telephone 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.
Previous 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.
Current wording
We have terrestrial licenses in 12 countries, resulting in approximately 12.0 billion MHz-POPs (megahertz of our spectrum authority in each country multiplied by a total population of approximately 961 million over the covered area) as of June 30, 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
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 wording
Effective following the close of trading on February 10, 2025, we voluntarily withdrew the listing of our common stock from the NYSE American, effected a reverse stock split at a ratio of 1 to 15 shares of our common stock and amended our certificate of incorporation to reduce the number of authorized shares of our 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.
Previous wording
Comparison of the Results of Operations for the three months ended March 31, 2025 and 2024
Current wording
Comparison of the Results of Operations for the three and six months ended June 30, 2025 and 2024
Previous 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.
Current wording
Our revenue is categorized as service revenue and subscriber equipment sales. Service revenue is generated by the MSS services we provide to customers using the Globalstar System. Subscriber equipment sales are 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 June 30, 2025, total revenue increased 11% to $67.1 million from $60.4 million for the same period in 2024. For the six months ended June 30, 2025, total revenue increased 9% to $127.2 million from $116.9 million for the same period in 2024. The increases in revenue for both the three and six month periods ended June 30, 2025 resulted primarily from higher wholesale capacity services. 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 service revenue.
Current wording
The following table sets forth our average number of subscribers and ARPU by type of subscriber services revenue.
Previous 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.
Current wording
Wholesale capacity services revenue includes revenue generated from providing satellite network access and related services, including revenue from the Customer under the Updated Services Agreement. 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 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.
Current wording
Wholesale capacity services revenue increased 24% and 21%, respectively, for the three and six months ended June 30, 2025, compared to the same periods in 2024. This type of service includes revenue from the Customer under the Updated Services Agreements. The majority of the increase during the second quarter of 2025 related to the timing of service fees associated with the reimbursement of network-related costs. Additionally, for the six months ended June 30, 2025, revenue increased for fees related to certain 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 the Updated Services Agreements.
Previous wording
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 wording
Commercial IoT service revenue increased 5% and 4%, respectively, for the three and six months ended June 30, 2025, compared to the same periods in 2024. Average subscribers increased 5% and 4% respectively, for the three and six months ended June 30, 2025, compared to the same periods in 2024, due to higher subscriber activations on a last twelve month basis. We also expect activations to increase following commercial sales of our two-way reference design module now expected later this year.
Previous 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.
Current wording
SPOT service revenue decreased $1.2 million and $2.0 million, respectively, for the three and six months ended June 30, 2025, compared to the same periods in 2024, due principally to fewer subscribers. The decline in average subscribers is due to continued competitive pressure; however, product engineering efforts continue to be 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
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 wording
Duplex service revenue decreased $1.3 million and $2.6 million, respectively, for the three and six months ended June 30, 2025, compared to the same periods in 2024, due to fewer average subscribers resulting from our decision to discontinue the manufacture and sale of Duplex devices to increase our focus on maximizing other sources of revenue.
Previous wording
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 wording
Total operating expenses decreased to $61.0 million from $61.8 million and increased to $129.5 million from $123.0 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024. In both periods, stock-based compensation was lower and costs to support XCOM were higher. Additionally, for the six months ended June 30, 2025, 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.
Previous wording
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 wording
In February 2025 and May 2025, we received employee retention credits as a result of our eligibility under the provisions of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") for the second and third quarters of 2021. During the first and second quarters of 2025, the refunds of $2.0 million and $1.9 million, respectively, reduced operating expenses. Based on the employee costs incurred during the eligible periods, for the first and second quarters of 2025, $1.4 million and $1.3 million, respectively, was allocated to cost of services and $0.6 million for each period was allocated to marketing, general and administrative expense.
Previous 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.
Current wording
Cost of services increased $1.4 million and $3.2 million for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024. We continue to incur higher network operating costs relating to our new and upgraded global ground infrastructure. In connection with services provided under the Updated Services Agreements, a substantial portion of these costs are reimbursed thereunder and this consideration is recognized as revenue in accordance with the terms of the Updated Services Agreements. For the three and six months ended June 30, 2025, personnel costs that support the Globalstar System increased $1.0 million and $1.8 million, respectively. Ground network costs, such as occupancy and maintenance charges, increased $0.4 million for both the three and six months ended June 30, 2025 compared to the same periods in 2024.
Previous wording
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 wording
For the six months ended June 30, 2025, higher cost of services was also due to expenses totaling $2.0 million for the Support Services Agreement (the “SSA”) (terminated in the second quarter of 2025) as well as other ancillary costs to support XCOM technology development, some of which are due to the timing of the incurrence of certain amortized non-cash costs beginning in May 2024. Costs to support new MSS product development also contributed to the increase in operating expenses during the six months ended June 30, 2025.
Previous 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.
Current wording
Stock-based compensation expense decreased $3.2 million and $5.5 million, respectively, for the three and six months ended June 30, 2025, compared to the same periods 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
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 wording
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 believe that our constellation of other second-generation satellites will generally operate free of similar anomalies during their projected remaining useful lives. Similar activity did not occur at this level during 2024.
Previous wording
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 wording
Interest expense, net, increased $3.8 million and $7.9 million, respectively, during the three and six months ended June 30, 2025, compared to the same periods in 2024, due to: (1) higher interest costs associated with the 2024 Prepayment Agreement of $12.1 million and $23.6 million, respectively, which were inclusive of a non-cash significant financing component ($8.6 million and $16.6 million, respectively) in accordance with ASC 606 and accrued fees ($7.5 million and $15.0 million, respectively) offset by debt premium amortization ($4.0 million and $8.0 million, respectively), and (2) lower capitalized interest of $1.6 million and $4.9 million, respectively (due in part to the decrease in interest costs eligible for capitalization), which increased "interest income and expense, net" during 2025, offset by: (i) lower interest costs of $7.5 million and $14.8 million, respectively, following the retirement of our 2023 13% Notes in November 2024, and (ii) an increase in interest income of $1.5 million and $4.2 million, respectively, due to a higher cash balance.
Previous 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.
Current wording
We recorded foreign currency gains of $12.0 million and $16.1 million, respectively, during the three and six months ended June 30, 2025, compared to foreign currency losses of $4.5 million and $8.3 million during the three and six months ended June 30, 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
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 wording
Income tax expense decreased $2.0 million and increased $2.6 million, respectively, during the three and six months ended June 30, 2025, compared to the same periods in 2024. Overall, the changes in income tax expense were 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.
Previous 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.
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 Series A 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 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.
Current wording
As of June 30, 2025 and December 31, 2024, we held cash and cash equivalents of $308.2 million and $391.2 million, respectively. The decrease in cash and cash equivalents during 2025 was due primarily to capital expenditures associated with our commitments under the Updated Services Agreements, including network expansion and upgrades, offset partially by $124.7 million in cash received pursuant to the Infrastructure Prepayment.
Previous 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).
Current wording
The principal amount of our debt outstanding was $400.2 million at June 30, 2025, compared to $417.5 million at December 31, 2024. This decrease was due to our scheduled recoupment of $17.3 million under the 2021 Funding Agreement (more detailed discussion and defined terms below).
Previous wording
Cash Flows for the three months ended March 31, 2025 and 2024
Current wording
Cash Flows for the six months ended June 30, 2025 and 2024
Previous wording
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 wording
Net cash provided by operating activities during the six months ended June 30, 2025 was $209.7 million, compared to net cash provided by operating activities of $66.5 million during the same period in 2024. This improvement was due primarily to favorable working capital changes, specifically resulting from the receipt of $124.7 million during the second quarter of 2025 pursuant to the Infrastructure Prepayment, which was recorded as deferred revenue and will be used to fund capital expenditure purchases in the near future. During 2025, $30.0 million in accelerated fees were paid to us pursuant to the Updated Services Agreements, which also increased deferred revenue. Other smaller items, such as higher net income, after adjusting for noncash items, was offset by other unfavorable working capital changes during the period.
Previous 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.
Current wording
Net cash used in investing activities was $271.8 million for the six months ended June 30, 2025, compared to $74.5 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. The increase during 2025 was principally due to $203.1 million in milestone payments to MDA associated with the Extended MSS Network contract executed in February 2025.
Previous 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.
Current wording
Net cash used in financing activities was $22.0 million during the six month period ended June 30, 2025, compared to net cash provided by financing activities of $16.2 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
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 wording
At June 30, 2025, the principal amount of our debt totaled $400.2 million, which accrues fees at a weighted average stated rate up to 9%.
Previous wording
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.
Current wording
At June 30, 2025, our deferred revenue, net, totaled $524.5 million, of which the majority is expected to be earned over a period in excess of five years as we perform services under the Updated Services Agreements.
Previous 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.
Current wording
During the six month period ended June 30, 2025, we paid dividends totaling $5.3 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.