Globalstar, Inc.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
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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.
Jun 30, 2026 · Filed Aug 6, 2026
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 2026-03-31; filed 2026-05-07.
0001366868-26-000029
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001366868-26-000039
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 114 previous paragraphs and 125 current paragraphs.
69 unchanged; 41 reworded; 14 added; 4 removed; 0 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 (14)
Current report
In February and May 2025, we received employee retention credits of $2.0 million and $1.9 million, respectively, under the provisions of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"). These credits were recognized as reductions to operating expenses during the first and second quarters of 2025, respectively, with $1.4 million and $1.3 million allocated to cost of services and $0.6 million for each period allocated to marketing, general and administrative expense, based on the employee costs during the eligible periods.
Current report
The increase in cost of services was also due to expenses to support XCOM technology development, which increased $0.6 million and $0.8 million, respectively, for the three and six months ended June 30, 2026 compared to the same periods in 2025, as well as the non-recurring employee retention credits received under the CARES Act during 2025 (discussed above).
Current report
Interest costs associated with the Infrastructure Prepayment and accelerated services fees paid pursuant to the Updated Services Agreements increased $12.1 million and $26.6 million, respectively, for the three and six months ended June 30, 2026, representing a non-cash significant financing component in accordance with ASC 606.
Current report
During the second quarter of 2026, additional interest was recorded in connection with a new debt discount associated with the 2024 Debt Repayment upon adoption of ASU 2025-07. Also in connection with the adoption of ASU 2025-07, the prior debt premium associated with the 2024 Debt Repayment was derecognized, resulting in an increase in expense when comparing 2026 to 2025. For the three and six months ended June 30, 2026, $11.8 million and $12.5 million, respectively, of interest recorded associated with these items was not present during 2025 and was eligible for capitalization.
Current report
Gain on Contingent Interest Feature Within the 2024 Debt Repayment
Current report
During the second quarter of 2026, we recorded a gain of $4.2 million representing the elimination of a portion of previously accrued interest associated with milestones achieved in connection with the 2024 Debt Repayment. The 2024 Debt Repayment contains an interest rate reduction mechanism whereby fees may be reduced or eliminated entirely if we meet certain defined milestones (as amended in April 2026) associated with the completion of the Extended MSS Network. Similar activity did not occur in 2025.
Current report
Derivative Gain and Other Income
Current report
During the three months ended June 30, 2026, there was no activity for derivative gain and other income compared to a gain of $6.7 million for the same period in 2025. For the six months ended June 30, 2026 derivative gain and other income fluctuated by $6.2 million to a gain of less than $0.1 million in 2026 from a gain of $6.3 million for the same period in 2025.
Current report
Upon adoption of ASU 2025-07 on January 1, 2026, the embedded derivative within the 2024 Debt Repayment no longer required mark-to-market adjustments. The $2.6 million loss recorded during the first quarter of 2026 was reclassified back to the derivative asset and was included in the cumulative retained earnings adjustment in connection with the adoption of this standard.
Current report
Income tax expense increased $5.7 million and $2.7 million, respectively, during the three and six months ended June 30, 2026, compared to the same periods in 2025. In both periods, the increase in tax expense is primarily due to state current tax expense, reflecting higher forecasted state taxable income and the corresponding utilization of state net operating loss carryforwards, which reduced the amount of losses available to offset current period state tax. The three months ended June 30, 2025 reflected additional tax benefits recognized to adjust year-to-date results with the estimated annual effective tax rate.
Current report
In connection with our financing arrangements, we review the features within the instruments to evaluate if they contain an embedded derivative. If an instrument contains an embedded derivative, the derivative is bifurcated from the debt host contract and initially recorded at fair value with the difference between the basis of the debt host contract and the fair value of the embedded derivative recorded as the carrying value of the host contract. The fair value of the embedded derivative is measured at fair value on a quarterly basis, or more often if deemed necessary, with gains or losses recognized in earnings. We determine the fair value of derivative instruments based on available market data and assumptions developed by management using appropriate valuation models.
Current report
The terms of the 2024 Debt Repayment contain an interest reduction mechanism if we meet certain defined milestones (as amended in April 2026, refer to Note 2: The Merger Agreement to our consolidated financial statements for further discussion) associated with the completion of the Extended MSS Network. At issuance, this feature was identified as an embedded derivative and resulted in a debt premium being added to the principal amount of the 2024 Debt Repayment. Effective January 1, 2026, we adopted ASU 2025-07 on a modified retrospective basis, with the cumulative effect of adoption recorded as an adjustment to retained earnings as of the adoption date. The interest reduction mechanism within the 2024 Debt Repayment is an underlying to this agreement, which is now included in the scope exceptions permitted under ASC 815 and no longer requires bifurcation. Upon adoption, the previously recognized derivative asset and associated debt premium, net of accretion, was derecognized. Prior period financial statements are presented under the previously applicable guidance and are not directly comparable to the current period amounts.
Current report
Prior to adoption of ASU 2025-07, we amortized the debt premium as an offset to interest expense over the loan term using the effective interest rate method. When project milestones were achieved, we removed the associated future cash flows from the total interest savings projections used to fair value the embedded derivative. The majority of the present value of the cash flows removed from the derivative asset was recorded as a debt discount, while the remaining portion relieved the balance of accrued interest associated with that milestone on our consolidated balance sheet.
Current report
The fair value of this embedded derivative was valued using a discounted cash flow model. The most significant input used in the fair value measurement was the discount rate. As the discount yield used in the valuation process decreased, the fair value of the embedded derivative increased. Also impacting the fair value measurement was the length of time between the reporting period and the start of interest payments; as the length of time decreased, the present value of the projected interest savings increased, resulting in a higher derivative asset value. The most significant unobservable input that drove the cash flows used in the fair value measurement included the estimated achievement of project milestones. As the probability of reaching the relevant milestones increased, the fair value of the embedded derivative would also increase.
Removed paragraphs (4)
Previous report
Cost of services also increased during the first quarter of 2026 compared to the same period in 2025 due to nonrecurring Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") tax credit received in the prior year's first quarter totaling $1.4 million.
Previous report
Marketing, general and administrative expenses also increased during the first quarter of 2026 compared to the same period in 2025 due to nonrecurring CARES Act tax credit received in the prior year totaling $0.6 million.
Previous report
Derivative Gain (Loss) and Other Income (Expense)
Previous report
Income tax expense decreased $3.0 million during the three months ended March 31, 2026, compared to the same periods in 2025. In both periods, tax expense is being driven by state current tax on forecasted taxable income and the state tax impacts of uncertain tax positions in the United States. The decrease in tax expense is primarily attributable to a lower estimated annual effective tax rate in the current year, which reduces the proportional impact of state current tax expense and uncertain tax position expense relative to the prior year period.
Reworded paragraphs (41)
Previous wording
On April 13, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Amazon.com, Inc., a Delaware corporation (“Amazon”), Grapefruit Acquisition Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Amazon (“Acquisition Sub I”), and Grapefruit Acquisition Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Amazon (“Acquisition Sub II” and, together with Amazon and Acquisition Sub I, the “Buyer Parties”), pursuant to which and subject to the terms and conditions of the Merger Agreement, the Buyer Parties have agreed to acquire us (the "Mergers"). The Mergers are expected to close in 2027, subject to satisfaction of certain closing conditions in the Merger Agreement, including required regulatory approvals; however, no assurance can be given as to when, or if, the Mergers will occur. Refer to Note 14: Subsequent Events to our consolidated financial statements for further discussion on the Mergers.
Current wording
On April 13, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Amazon.com, Inc., a Delaware corporation (“Amazon”), Grapefruit Acquisition Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Amazon (“Acquisition Sub I”), and Grapefruit Acquisition Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Amazon (“Acquisition Sub II” and, together with Amazon and Acquisition Sub I, the “Buyer Parties”), pursuant to which and subject to the terms and conditions of the Merger Agreement, the Buyer Parties have agreed to acquire us (the "Mergers"). The Mergers are expected to close in 2027, subject to satisfaction of certain closing conditions in the Merger Agreement, including required regulatory approvals; however, no assurance can be given as to when, or if, the Mergers will occur. Refer to Note 2: The Merger Agreement to our consolidated financial statements for further discussion on the Mergers.
Previous wording
We provide certain services to Apple Inc. (the "Customer") pursuant to a service agreement and certain related ancillary agreements (collectively, the "Service Agreements"). In October 2024, we agreed to make certain amendments to the Service Agreements and entered into other related agreements with the Customer (the Service Agreements, 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"). The Updated Services Agreements generally require us to allocate network capacity to support the services we provide 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 our services. For additional information about the Updated Services Agreements, including the recent SOW Amendment, see Note 2: Special Purpose Entity and Note 14: Subsequent Events to our condensed consolidated financial statements.
Current wording
We provide certain services to Apple Inc. (the "Customer") pursuant to a service agreement and certain related ancillary agreements (collectively, the "Service Agreements"). In October 2024, we agreed to make certain amendments to the Service Agreements and entered into other related agreements with the Customer (the Service Agreements, 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"). The Updated Services Agreements generally require us to allocate network capacity to support the services we provide 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 our services. For additional information about the Updated Services Agreements, including the SOW Amendment, see Note 2: The Merger Agreement and Note 3: Special Purpose Entity to our condensed consolidated financial statements.
Previous wording
For the three months ended March 31, 2026 and 2025, the Customer under the Updated Services Agreements was responsible for 66% and 61%, respectively, of our total revenue. No other customer was responsible for more than 10% of our revenue. The loss of the Customer may have an adverse impact on our financial condition, results of operations and cash flows.
Current wording
For the six months ended June 30, 2026 and 2025, the Customer under the Updated Services Agreements was responsible for 64% and 62%, respectively, of our total revenue. No other customer was responsible for more than 10% of our revenue. The loss of the Customer may have an adverse impact on our financial condition, results of operations and cash flows.
Previous wording
As of March 31, 2026, we had approximately 797,000 MSS subscribers worldwide. Our subscriber count only includes our MSS subscribers who have an active Globalstar contract. 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.
Current wording
As of June 30, 2026, we had approximately 811,000 MSS subscribers worldwide. Our subscriber count only includes our MSS subscribers who have an active Globalstar contract. 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 compete aggressively on price and strive to differentiate the products and 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. In October 2025, we released the RM200M two-way module, designed to integrate into IoT and industrial solutions. 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 with satellite only and multimode capabilities.
Current wording
We compete aggressively on price and strive to differentiate the products and 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.
Previous wording
We have terrestrial licenses in 12 countries, resulting in approximately 12.0 billion MHz-POPs (megahertz of our terrestrial spectrum authority in each country multiplied by a total population of approximately 967 million over the covered area) as of March 31, 2026. 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 portfolio of terrestrial spectrum represents a substantial opportunity for us. The Updated Services Agreements significantly enhanced 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 12.1 billion MHz-POPs (megahertz of our terrestrial spectrum authority in each country multiplied by a total population of approximately 968 million over the covered area) as of June 30, 2026. 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 portfolio of terrestrial spectrum represents a substantial opportunity for us. The Updated Services Agreements significantly enhanced the device ecosystem for Band 53/n53 by enabling access to our terrestrial spectrum band in certain of the Customer's devices.
Previous wording
In 2022, we entered into a satellite procurement agreement with Macdonald, Dettwiler and Associates Corporation ("MDA Space") pursuant to which we expect to acquire 17 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 first set of replacement satellites was delivered in April 2026 and we currently expect the second set to be delivered in mid-2026. 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 Space pursuant to which we expect to acquire more than 50 third-generation C-3 System (defined below) 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 Space") pursuant to which we expect to acquire 17 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 first set of replacement satellites was delivered in April 2026 and after certain repairs redelivered in July 2026. The second set is scheduled for delivery later in 2026. 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 Space pursuant to which we expect to acquire more than 50 third-generation C-3 System (defined below) satellites related to the Extended MSS Network.
Previous 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 two launches of the replacement satellites that we are acquiring pursuant to the 2022 satellite procurement agreement with MDA Space. We currently expect to complete both launches during 2026, with the launch of the first set of replacement satellites scheduled for May 2026 and the launch of the second set of replacement satellites expected to occur during the second half of 2026. In October 2024, we entered into agreements with SpaceX for the launch of the new C-3 System third-generation satellites to support 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 two launches of the replacement satellites that we are acquiring pursuant to the 2022 satellite procurement agreement with MDA Space. We currently expect to complete both launches during 2026, with the launch of the first set of replacement satellites scheduled for August 2026 and the launch of the second set of replacement satellites expected to occur later in 2026. In October 2024, we entered into agreements with SpaceX for the launch of the new C-3 System third-generation satellites to support the Extended MSS Network.
Previous wording
Comparison of the Results of Operations for the three months ended March 31, 2026 and 2025
Current wording
Comparison of the Results of Operations for the three and six months ended June 30, 2026 and 2025
Previous 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 March 31, 2026, total revenue increased 17% to $70.1 million from $60.0 million for the same period in 2025. The increase in revenue for the three months ended March 31, 2026 resulted primarily from higher wholesale capacity services. 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, 2026, total revenue decreased 3% to $64.8 million from $67.1 million for the same period in 2025. For the six months ended June 30, 2026, total revenue increased 6% to $134.8 million from $127.2 million for the same period in 2025. Both the decrease and increase in total revenue for the three and six month periods ended June 30, 2026 resulted primarily from the variability in revenue from wholesale capacity services. See below for a discussion of the main drivers of the revenue variances.
Previous wording
(1)The remaining 4% and 5% of our total revenue for the three months ended March 31, 2026 and 2025, respectively, is attributable to subscriber equipment sales from the sale of MSS devices that work over the Globalstar System.
Current wording
(1)The remaining portion of our total revenue for the three and six months ended June 30, 2026 and 2025, respectively, is attributable to subscriber equipment sales from the sale of MSS devices that work over the Globalstar System and equipment revenue from the sale of XCOM RAN systems.
Previous wording
Wholesale capacity services revenue increased 26% for the three months ended March 31, 2026, compared to the same period in 2025. Wholesale capacity services revenue reflects revenue from the Customer under the Updated Services Agreements. The majority of the increase during the first quarter of 2026 related to the timing and amount of service fees associated with the reimbursement of network-related costs.
Current wording
Wholesale capacity services revenue decreased 5% and increased 9%, respectively, for the three and six months ended June 30, 2026, compared to the same periods in 2025. Wholesale capacity services revenue reflects revenue from the Customer under the Updated Services Agreements. The fluctuations in revenue during these three and six month periods related primarily to the timing and amount of service fees associated with the reimbursement of network-related costs.
Previous wording
Commercial IoT service revenue increased 13% for the three months ended March 31, 2026, compared to the same period in 2025. Average subscribers increased 8% for the three months ended March 31, 2026, compared to the same period in 2025, due to higher subscriber activations on a last twelve month basis. We also expect activations to continue to increase in 2026 due to commercial sales of our recently-launched two-way reference design module.
Current wording
Commercial IoT service revenue increased 7% and 10%, respectively, for the three and six months ended June 30, 2026, compared to the same periods in 2025. Average subscribers increased 9% in both the three and six months ended June 30, 2026, compared to the same periods in 2025, due to higher subscriber activations on a last twelve month basis, including record high quarterly subscribers activations during the second quarter of 2026.
Previous wording
SPOT service revenue decreased $0.7 million for the three months ended March 31, 2026, compared to the same period in 2025, due 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 potentially increase demand for such services from our subscribers.
Current wording
SPOT service revenue decreased 7% for both the three and six months ended June 30, 2026, compared to the same periods in 2025, due to fewer subscribers. The decline in average subscribers is due to continued competitive pressure.
Previous wording
Duplex service revenue decreased $0.9 million for the three months ended March 31, 2026, compared to the same period in 2025 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.
Current wording
Duplex service revenue decreased 26% for both the three and six months ended June 30, 2026, compared to the same periods in 2025, 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
Government and other services revenue increased 84% for the three months ended March 31, 2026, compared to the same period in 2025. Government and other services revenue includes fees earned from various governmental service contracts as well as services associated with XCOM RAN sales. We have a network services agreement with Parsons Corporation, a leading technology provider in the national security and global infrastructure markets, to utilize our satellite network for a mission critical service for government applications. Revenue associated with this agreement increased during the third quarter of 2025 as we moved from the proof of concept phase into the first year of services provided under the agreement. The increase in government and other services revenue during the first quarter of 2026 compared to the same period in 2025 was primarily due to revenue associated with the contract with Parsons.
Current wording
Government and other services revenue increased 20% and 53%, respectively, for the three and six months ended June 30, 2026, compared to the same periods in 2025. Government and other services revenue includes fees earned from various governmental service contracts as well as services associated with XCOM RAN sales. We have a network services agreement with Parsons Corporation, a leading technology provider in the national security and global infrastructure markets, to utilize our satellite network for a mission critical service for government applications. Revenue associated with this agreement increased during the third quarter of 2025 as we moved from the proof of concept phase into the first year of services provided under the agreement. The increase in government and other services revenue during both the three and six months ended June 30, 2026 compared to the same periods in 2025 was primarily due in part to revenue associated with the contract with Parsons as we moved beyond the proof of concept phase and into the first year of service.
Previous wording
Revenue generated from subscriber equipment sales increased $0.4 million for the three months ended March 31, 2026, compared to the same period in 2025 due to increase in volume of both SPOT and Commercial IoT device sales.
Current wording
Revenue generated from subscriber equipment sales increased $0.8 million and $1.2 million, respectively, for the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily due to an increase in the volume of Commercial IoT device sales.
Previous wording
Total operating expenses decreased to $61.9 million from $68.5 million for the three months ended March 31, 2026, compared to the same period in 2025. This decrease was primarily due to a noncash loss on disposal of assets recorded during the first quarter of 2025 that did not recur in 2026. The main contributors to the variances in operating expenses are explained in detail below.
Current wording
Total operating expenses increased to $69.5 million from $61.0 million and increased to $131.4 million from $129.5 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. For both periods, higher cost of services and marketing, general and administrative expenses were partially offset by lower stock-based compensation and depreciation, amortization and accretion expense. For the six months ended June 30, 2026, the change in total operating expenses was also impacted by a noncash loss on disposal of assets recorded during the first quarter of 2025 that did not recur in 2026. The main contributors to the variances in operating expenses are explained in detail below.
Previous wording
Cost of services increased $4.8 million for the three months ended March 31, 2026 compared to the same period in 2025. We continue to incur higher network operating costs relating to our new and upgraded global ground infrastructure and network-related personnel. 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 months ended March 31, 2026, personnel costs that support the Globalstar System increased $1.7 million. Ground network costs, such as occupancy and maintenance charges increased $1.2 million for the three months ended March 31, 2026 compared to the same period in 2025.
Current wording
Cost of services increased $4.1 million and $8.9 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. We continue to incur higher network operating costs relating to our new and upgraded global ground infrastructure and network-related personnel. 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, 2026, personnel costs that support the Globalstar System increased $1.1 million and $2.9 million, respectively. Ground network costs, such as occupancy and maintenance charges increased $0.6 million and $1.9 million, respectively, and IT costs increased $0.8 million and $1.4 million, respectively, for the three and six months ended June 30, 2026 compared to the same periods in 2025.
Previous wording
Cost of subscriber equipment sales increased 21% for the three months ended March 31, 2026 compared to the same period in 2025. This increase is generally consistent with the increase in revenue generated from subscriber equipment sales during the period.
Current wording
Cost of subscriber equipment sales increased 18% and 19% for the three and six months ended June 30, 2026 compared to the same periods in 2025. This increase is generally consistent with the increase in revenue generated from subscriber equipment sales during the periods.
Previous wording
Marketing, general and administrative expenses increased $3.2 million for the three months ended March 31, 2026, compared to the same period in 2025. This increase was due to higher personnel costs as well as higher legal and professional fees. Personnel costs increased $1.2 million primarily due to additional fringe costs for employee taxes associated with nonrecurring equity vestings during the first quarter of 2026. Legal and professional fees increased $1.4 million during the three months ended March 31, 2026 compared to the same period in 2025 due primarily to transaction costs related to the Mergers, totaling $3.2 million; these costs were partially offset by nonrecurring costs associated with the Globalstar SPE that were incurred during the first quarter of 2025.
Current wording
Marketing, general and administrative ("MG&A") expenses increased $13.3 million and $16.6 million for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. This increase was due to higher legal and professional fees as well as higher personnel costs. For the three and six months ended June 30, 2026 compared to the same periods in 2025, legal and professional fees increased $10.4 million and $11.7 million, respectively, due primarily to transaction costs related to the Mergers; for the six month period, these costs were partially offset by nonrecurring costs associated with the Globalstar SPE that were incurred during the first quarter of 2025. Personnel costs increased $1.8 million and $3.0 million, respectively, for the three and six months ended June 30, 2026 compared to the same periods in 2025 due primarily to additional fringe costs for employee taxes associated with equity vestings during 2026 as well as the non-recurring employee retention credits received under the CARES Act during 2025 (discussed above).
Previous wording
Stock-based compensation expense decreased $4.3 million for the three months ended March 31, 2026, compared to the same period in 2025. The decrease was due primarily to restricted stock units ("RSUs") granted to certain executives in connection with the License Agreement in 2023. During 2023, we granted 3.0 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; with 17%, 59%, 23% and 1% of the compensation cost for these RSUs being recognized during 2023, 2024, 2025 and 2026, respectively. This award will be fully recognized by the end of the second quarter of 2026.
Current wording
Stock-based compensation expense decreased $3.2 million and $7.5 million, respectively, for the three and six months ended June 30, 2026, compared to the same periods in 2025. The decrease was due primarily to restricted stock units ("RSUs") granted to certain executives in connection with the License Agreement in 2023. During 2023, we granted 3.0 million performance-based RSUs ("PSUs"), 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 PSUs was $39.5 million and was being recognized over the derived service period of 2.6 years; with 17%, 59%, 23% and 1% of the compensation cost for these PSUs being recognized during 2023, 2024, 2025 and 2026, respectively. This award was fully recognized at the end of the second quarter of 2026.
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 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 2026.
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 testing conducted in 2025 and historical testing, we 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 2026.
Previous wording
Depreciation, amortization and accretion expense decreased $3.9 million for the three months ended March 31, 2026, compared to the same period in 2025. During the years 2010 through 2013, we launched our second-generation satellites. The estimated useful lives of these satellites is 15 years; accordingly, during the past twelve months, several of these satellites were fully depreciated, resulting in a decrease in depreciation expense during the first quarter of 2026.
Current wording
Depreciation, amortization and accretion expense decreased $6.2 million and $10.1 million, respectively, for the three and six months ended June 30, 2026, compared to the same periods in 2025. During the years 2010 through 2013, we launched our second-generation satellites. The estimated useful lives of these satellites is 15 years; accordingly, during the past twelve months, several of these satellites were fully depreciated, resulting in a decrease in depreciation expense during the three and six months ended June 30, 2026.
Previous wording
Interest income and expense, net, increased $11.9 million during the three months ended March 31, 2026, compared to the same period in 2025.
Current wording
Interest income and expense, net, increased $13.2 million and $25.1 million, respectively, during the three and six months ended June 30, 2026, compared to the same periods in 2025.
Previous wording
Interest costs associated with the Infrastructure Prepayment increased $14.5 million, representing a non-cash significant financing component in accordance with ASC 606. Capitalized interest costs were higher by $1.9 million due in part to the fluctuation in interest costs eligible for capitalization, which decreased "interest income and expense, net". Other smaller items contributed to the remaining variance for the period.
Current wording
Capitalized interest costs were higher by $13.8 million and $15.7 million, respectively, for the three and six months ended June 30, 2026, due to higher gross interest costs eligible for capitalization, which decreased "interest income and expense, net". Other smaller items contributed to the remaining variance for the period.
Previous wording
We recorded foreign currency losses of $1.6 million during the three months ended March 31, 2026, compared to foreign currency gains of $4.1 million and during the three months ended March 31, 2025. 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 losses of $1.4 million and $3.0 million, respectively, during the three and six months ended June 30, 2026, compared to foreign currency gains of $12.0 million and $16.1 million during the three and six months ended June 30, 2025. 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
During the first quarter of 2026, derivative gain (loss) and other income (expense) fluctuated by $2.1 million to a loss of $2.6 million 2026 from a loss of $0.4 million for the same period in 2025. Derivative gains and losses primarily include the mark-to-market adjustments associated with the embedded derivative within the 2024 Debt Repayment. The fluctuation in the value of this embedded derivative is due to certain significant inputs used in the fair value measurement, specifically the discount yield and the estimated achievement of project milestones (as amended in April 2026). As the discount yield used in the valuation process increases, the fair value of the embedded derivative decreases. Similarly, as the length of time between the reporting date and the start date of the interest payments decreases, the present value of the projected interest savings increases, resulting in a higher derivative asset value. Also, as the probability of reaching the relevant milestones increases, the fair value of the embedded derivative also increases.
Current wording
Prior to the adoption of ASU 2025-07, derivative gains and losses primarily included the mark-to-market adjustments associated with the embedded derivative within the 2024 Debt Repayment. The fluctuation in the value of this embedded derivative was due to certain significant inputs used in the fair value measurement, specifically the discount yield and the estimated achievement of project milestones (as amended in April 2026). As the discount yield used in the valuation process increased, the fair value of the embedded derivative decreased. Similarly, as the length of time between the reporting date and the start date of the interest payments decreased, the present value of the projected interest savings increased, resulting in a higher derivative asset value. Also, as the probability of reaching the relevant milestones increased, the fair value of the embedded derivative also increased.
Previous wording
As of March 31, 2026 and December 31, 2025, we held cash and cash equivalents of $358.4 million and $447.5 million, respectively. The decrease in cash and cash equivalents during the first quarter of 2026 was due primarily to capital expenditures associated with our commitments under the Updated Services Agreements, including network expansion and upgrades, and the timing of proceeds under the Infrastructure Prepayment and the 2023 Funding Agreement. No funds were received under these agreements during the first quarter of 2026.
Current wording
As of June 30, 2026 and December 31, 2025, we held cash and cash equivalents of $409.8 million and $447.5 million, respectively. Capital expenditures associated with our commitments under the Updated Services Agreements, including network expansion and upgrades, more than offset cash received during the first half of 2026, including the receipt of $104.8 million pursuant to the Infrastructure Prepayment and $19.9 million pursuant to the 2023 Funding Agreement.
Previous wording
The principal amount of our debt outstanding was $403.8 million at March 31, 2026, compared to $410.0 million at December 31, 2025. This decrease was due to the final scheduled recoupment of $6.3 million under the 2021 Funding Agreement.
Current wording
The principal amount of our debt outstanding was $423.7 million at June 30, 2026, compared to $410.0 million at December 31, 2025. This increase was due to the issuance of debt under the 2023 Funding Agreement totaling $19.9 million during the second quarter of 2026 offset by the final scheduled recoupment of $6.3 million under the 2021 Funding Agreement.
Previous wording
Refer to Note 14: Subsequent Events to our consolidated financial statements for discussion of the Mergers and (i) the related amendment to the 2024 Prepayment Agreement, (ii) related amendments to the warrants issued to the Customer and to Thermo to provide for the automatic cashless exercise of any vested and unexercised warrants immediately prior to the consummation of the Mergers, and (iii) the proposed cancellation of the Series A Preferred Stock in exchange for the liquidation preference upon consummation of the Mergers.
Current wording
Refer to Note 2: The Merger Agreement to our consolidated financial statements for discussion of the Mergers and (i) the related amendment to the 2024 Prepayment Agreement, (ii) related amendments to the warrants issued to the Customer and to Thermo to provide for the automatic cashless exercise of any vested and unexercised warrants immediately prior to the consummation of the Mergers, and (iii) the proposed cancellation of the Series A Preferred Stock in exchange for the liquidation preference upon consummation of the Mergers.
Previous wording
Cash Flows for the three months ended March 31, 2026 and 2025
Current wording
Cash Flows for the six months ended June 30, 2026 and 2025
Previous wording
Net cash provided by operating activities during the three months ended March 31, 2026 was $35.2 million, compared to net cash provided by operating activities of $51.9 million during the same period in 2025. Unfavorable working capital changes, specifically resulting from the timing of cash receipts pursuant to the Updated Services Agreements, contributed to the decrease in cash flows provided by operating activities. During the first quarter of 2026, $7.5 million in accelerated fees were paid to us pursuant to the Updated Services Agreement compared to $22.5 million paid during the first quarter of 2025. Other unfavorable working capital changes were generally offset by higher net income, after adjusting for noncash items.
Current wording
Net cash provided by operating activities during the six months ended June 30, 2026 was approximately $159.7 million, compared to net cash provided by operating activities of $209.7 million during the same period in 2025. This decrease was due to working capital changes, specifically resulting from receipts pursuant to the Infrastructure Prepayment of $104.8 million during the first six months of 2026 compared to $124.7 million during the same period in 2025; these receipts are recorded as deferred revenue and used to fund capital expenditures for the Extended MSS Network, typically in the quarter following the receipt of funds. The timing of cash receipts pursuant to the Updated Services Agreements contributed to the decrease in cash flows provided by operating activities. During the six months ended June 30, 2026, $15.0 million in accelerated fees were paid to us pursuant to the Updated Services Agreement compared to $30.0 million paid during the same period in 2025. Finally, lower net income, after adjusting for noncash items, also contributed to the decrease.
Previous wording
Net cash used in investing activities was $116.4 million for the three months ended March 31, 2026, compared to $190.6 million for the same period in 2025. Net cash used in investing activities during both periods included primarily network upgrades associated with the Updated Services Agreements. The decrease during the first quarter of 2026 was due primarily to the timing of milestone payments made to MDA Space and SpaceX.
Current wording
Net cash used in investing activities was $208.3 million for the six months ended June 30, 2026, compared to $271.8 million for the same period in 2025. Net cash used in investing activities during both periods included primarily network upgrades associated with the Updated Services Agreements. The decrease during the first six months of 2026 compared to the same period in 2025 was due primarily to the timing of milestone payments made to MDA Space and SpaceX.
Previous wording
Cash Flows Used in Financing Activities
Current wording
Cash Flows Provided by (Used in) Financing Activities
Previous wording
Net cash used in financing activities was $8.0 million during the three month period ended March 31, 2026, compared to $11.4 million for the same period in 2025. During both periods, we made payments for the scheduled recoupments pursuant to the terms of the 2021 Funding Agreement and paid cash dividends to holders of the Series A Preferred Stock. The final scheduled recoupment pursuant to the terms of the 2021 Funding Agreement was made in March 2026.
Current wording
Net cash provided by financing activities was $10.6 million during the six month period ended June 30, 2026, compared to net cash used in financing activities of $22.0 million for the same period in 2025. In June 2026, we received proceeds from the 2023 Funding Agreement totaling $19.9 million, which were used to pay amounts owed to vendors for network purchases pursuant to the Updated Services Agreements. During both periods, we paid cash dividends to holders of the Series A Preferred Stock. Additionally, during both periods, we made payments for the scheduled recoupments pursuant to the terms of the 2021 Funding Agreement, with the final recoupment made in March 2026.
Previous wording
At March 31, 2026, the principal amount of our debt totaled $403.8 million, which accrues fees at a weighted average stated rate up to 9%.
Current wording
At June 30, 2026, the principal amount of our debt totaled $423.7 million, which accrues fees at a weighted average stated rate up to 9%.
Previous wording
At March 31, 2026, our deferred revenue, net, totaled $891.7 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.
Current wording
At June 30, 2026, our deferred revenue, net, totaled $1.1 billion, 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
For more information regarding our 2024 Debt Repayment, 2023 Funding Agreement, Infrastructure Prepayment and dividends paid to holders of the Series A Preferred Stock, see Note 6: Long-Term Debt and Other Financing Arrangements and Note 2: Special Purpose Entity to our condensed consolidated financial statements. For more information regarding the amendments to certain of these agreements in connection with the Mergers, refer to Note 14: Subsequent Events to our consolidated financial statements.
Current wording
For more information regarding our 2024 Debt Repayment, 2023 Funding Agreement, Infrastructure Prepayment and dividends paid to holders of the Series A Preferred Stock, see Note 7: Long-Term Debt and Other Financing Arrangements and Note 3: Special Purpose Entity to our condensed consolidated financial statements. For more information regarding the amendments to certain of these agreements in connection with the Mergers, refer to Note 2: The Merger Agreement to our consolidated financial statements.
Previous wording
For a discussion of recent accounting guidance and the expected impact that the guidance could have on our condensed consolidated financial statements, see Recently Issued Accounting Pronouncements in Note 1: Basis of Presentation to our condensed consolidated financial statements in Part I, Item 1 of this Report.
Current wording
For a discussion of recent accounting guidance and the expected impact that the guidance could have on our condensed consolidated financial statements, see Recently Issued Accounting Pronouncement in Note 1: Basis of Presentation to our condensed consolidated financial statements in Part I, Item 1 of this Report.
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Current report — wording carried from elsewhere
Embedded Derivative within the 2024 Debt Repayment