Globalstar (GSAT) 3 Aug 232023 Q2 Earnings call transcript

Good morning, and welcome to the Globalstar Second Quarter 2023 Earnings Conference Call. I will now turn the call over to Jay Monroe.

Thanks, everybody, for joining today's Globalstar's Second Quarter 2023 Investor Call.

In keeping with recent practice, I will make very brief opening remarks, and then we'll move straight to Q&A. But first, please note that today's call contains forward-looking statements intended to fall within the safe harbor provided under the securities laws. Factors that could cause the results to differ materially are described in the forward-looking statements and Risk Factors section of Globalstar's SEC filings including its annual report on Form 10-K and for the financial year ending 2022 as well as this morning's earnings release.

prior release, improvement to a in in over the and robust XX% in revenue significant a profitability, the outlined Globalstar see continued growth increase As quarter. year's resulting in up was same over Adjusted EBITDA XX% period. the

our XXX%. And more was and was than for an million, million up almost $XXX revenue $XX of to increase the half EBITDA first XXXX, XX% of over

increased, balance to with ended million, more business cash the our our unrelated revenue, quarter $XX organic our at liquidity in Service Our double year-end. business. growth commercial reflecting wholesale than IoT

of expect X-way this continue, We subscriber meaningfully to propelled this revenue introduction. Average platform by is later the services that launch to increase after new and expected per device year.

of million our revenue to efforts. not our $XXX million As approximately reiterating margin brief and from update XXXX on Band are a result of end factors, guidance $XXX these forecasted spectrum revenue. A XX%, we of XX adjusted a including EBITDA low increasing the

efforts engaged We are Band working engineering working are companies XX on wide and deployments. on many in of which range with fronts a

the set things, given, to is unique of using base XX among truly grow. capable other continues opportunity Band devices Our of installed

driving critical a With macro on deployments, basis. the rolled and driving range of adoption. around it infrastructure the we we in be infrastructure, expect of Qualcomm by system of out Band partners, wireless Qualcomm earlier be of progress and further global hundreds wireless with so deployments and today trends year. And device drives agreement can signed We time the this private their available our strategic security This they're private world. Industrial next are millions increases great are XX it to integrator making agreement also devices with we and Band simplifying collaboration year. ubiquitously XX this for

specifically call. a the during growing first are to that quarter the for right with we opportunities ecosystem the resource demand, deliver regarding great We discussed this

looking control. within are technical the understand public more about validation calendar. driven the not final the is detail individual hope in engineering of midst forward We these not our to shortly. The engineering reporting of and company projects, is by our are you timing demands by We sharing that

sentiment delivering Finally, has questions current the from the When operational transformation price about participating company's past resources our believe quarter. reiterate Band do Globalstar and not my is answer prepare stock yes. moment. I invested simple of bring to our during ground I to last whether rebuilding satellite XX market is to billion revolutionary quarter, decade, market, in and past to conferences sustainable. My investment services reflects heard we want place $X putting satellite for our which this and the growth network, in value. innovating this other multiple went November over in

I am execute we absolutely revenue, deliver increasing value. confident EBITDA and to will and shareholder continue that

Now Q&A. we'll open the call up to

available be questions We answer today It Kyle whomever you Dave, questions, to Rebecca, Tim. you to direct your helpful have prefer. if would and would

direct to questions business. still to your wholesale for plans our financial in of advance activities other handset partners' As future we not And the able results. course, reminder, And our are of you or related in on answer a thank parts market. we to questions our focusing

begin we Operator, can Q&A.

Flannery with comes question first Simon Our from Morgan Stanley.

normalize. how maybe year. think And the balance we you supply then new be of on you comment on satellite update and I timing milestones SPOT may where the and construction flows and the that payments ultimate launch about cash are the Any get but the This on could you, and if just just an on for and to wanted the sense through outlook just Jay, should the constellation. the how of chain

you if and SPOT. first the And question answer the to break then hopefully, of why us Simon, to just flow Rebecca, we funding cash Dave, the into about X that about Sure. asked. the that can Tim, different talk on tackle the people sources. implications would the don't you've status questions contract. you

Simon. Thanks, Sure.

working contract is been Rocket their the and And as has the the MDA delivering benefits payload, clear in the while leading on of the prime successful this subsystem of critical developer been per and acquisition it's that tirelessly Lab So long years program. schedule. of has developers integration proving

And just we're will complete satellite in acceptance originally XXXX. to the during take in pace the to X part of about review, a critical place design satellite as still launch and enter years We're scheduled through large the on contract to August.

Simon, it's Rebecca.

of payment on things. So load side the

under we've will million balance $XXX be with million, $XXX due. paid we've $XXX the of So MDA about roughly million. when The contract incurred the million $XXX paid

our track them, funded through that own Tim will XXXX XX% paid flow. remaining cash mentioned we're the just partner, there, through will on milestones the by and So with as our of of agreement funding be operating be under XX% and paid agreement

payments completed milestones will them in So agreement. with as and due, are are those line we that pay

So another of or the in you design you'll payment. be payments, review critical due will due -- be then once done, that's other that to make

right. That's

Simon, this Yes. is Dave.

all supply chain issues of the are mid-April, now of behind As us.

We we're stock. And full fact, safety production. are in building in

the stock on Our We're products. months the of each build well that. goal of for is safety to path X doing of main

to point. ordering box at is refill still see SPOT that They're on It's continued all which satisfied healthy a robust. the we retail pretty REI, and success West Marine. underway the up Cabela's, bit retailers, we Pro, a also We're Bass chain, our the is business. this process and are Demand of little big where

reacceleration So we QX, in see QX? a should

to We of advance, that see already course. pick Yes. And in up. orders see the we're starting

also SPOT in they an the saves And summer so that our making well. all seeing, are And we're with period as increase given we're there. products

about been we has feel and everything So where are. normalized, good we

Great. maybe clarification. And one just

driven commercial say? that of you're by the said the think Is the end revenues, largely trying you you excitement you're on guidance And to service I about because you think of confident what raising. I low said your were trajectory IT.

Simon. tackle Absolutely, you maybe can of well as And for correct. answer Dave, the the X-way SPOT question. That's

yes. Absolutely,

This is just the to infrastructure gateway a every messages proven at making is XX%. not product So successful. we as Half processed that side, an uptick infrastructure already of progress. launch. the great needed on launch. We're is platform that very be X-way unique And in to has a we also This entire be. are much as seeing significant

and The with the the tests, need second beta infrastructure speak, all good to half is product. on we of we of into getting lot worked a being milestones year end the the that hitting of come as the by we're

first what's are able boards network. which be And the just We those also brought received initial build, Board. known the as on to the up XX is

And so as well. again, we're hitting the milestones there

the in we So year we'll by believe be entire with do with the the the and product end key of ecosystem. customers beta

Our question George Sutton comes with next Craig-Hallum. from

I'll address this question to Jay.

And you IoT a where Your breadth can broader sense a curve give curious Was you seeing growth modeled. demand specifically or effectively that of if are large change? activation had us of is growth we I'm double that implementation a what was the from? coming

George, down I all that answer the think involved those sales the best the He's one way CEO. funnel. in is to to discussions Dave,

George's answer you question, can please? Dave, So

obviously, issues dealing our broad the customers. seeing one in seem absolutely. their the is with It's into verticals significant And other lot some a different well all is Sure, of of customer in any chain with those the in all gas, particular be of breadth and oil build our all their it rebounding end of across supply that to not folks demand Yes. modules our because products. customers as markets transportation, of we're

continue glad about. we're which broad, year. it's and think go to robust very a And as I we so pipeline And just the see through we strong

address you. I Got sustainability point think And growth. Jay's of that on helps the

sort country Band a on can of focused just XX, So not to, I'm for give sense question, address One it expectations? many updates who how other on we right of time to us or and sure now frame opportunities you are but any the

asking Sure, countries licenses developments or within about the already in. new have countries we you're

New presence. countries to expand our

Yes.

with have good. they come the started global couple And Very for now. more countries is on different of a expect right to we out notices, things near those continuing. term. and in in Europe, regulators number Okay. of discussions and a notices those in a That basis, put of We're in

in countries have one also it process. other comes very are through. far couple We which until the identify of never along We a that

complete that of we course, answer and in process, for advance. be do that and by Europe, in months after broad receive you? we be now their or hope happened will EU but country ones few it's the process. country, Spain have but into went And implemented deep through apologize are But of to I that others. kind frequently you now we country. that announce we one, at Is in a able there each other that the that a we'll coming to countries more technical happen the are least to in have for something believe,

comes at next question And from Crawford Riley Securities. our Mike B.

in I'm not million last But generate XX-month for one Kyle specific than NRE and replicable the on was blanks XX on if the this you, NRE on that And being just period. there signed licensing be those deal it is sure I'm critical opportunities that was related LTE that to for your maybe or said, more to this that maybe call, like detail going went but an you to Band Jay, infrastructure could if engineering of in you another fill into over changed. private frame wondering expected has works. $XX was deal for seems signed issues? and near including time others

hoped, looks well. bit to about to in it ago are throes the but are Sure, take quarter XX was a it's said that talked chime they We I days, longer. But a that last that been be can. like done to that ones of I in little Kyle ones done. final work when as the technical it Mike, had of the And in course, would just have needs we I the moment going referring

one won't day. those or the wanted every the and them look both But the project XX single it and we at might to of day, and bit That million we have an to $XX a the longer to on it announcement referred with is about. infrastructure are just mean, than associated project that that we another wait little you NRE applies them single that one taking critical deals work where I work imagine every of as both to to days technical other that these have of Both talked announce. hope you had we is

Yes.

I think that's most it. of

Mike, The to about, very, are other think these very thing long-term deals. I mean,

important for them XX And because to we that once get right in years. them They're we deploy it's exactly very these. going so place into XX

well feel like ecosystem these Kyle's that remarks, that Qualcomm because as in has the to that discussions either piece band. And of have a that and as well, that chipset, infrastructure, any with are to are talking in thing we're But as is device service which through it close well now prepared they're test part, can channel add doing of sells. both Qualcomm the proceeded integrator short starting lot point, or mentioned as component other we those individual we another as I'll the the proliferated basically they're ton companies of other Qualcomm, one has I into a testing do which which Mike, the the Qualcomm because for the about of additional ongoing, is we push and engineering quickly. that through X my

of private part be the will these and implementation. broadens of users it the available, So the on network that interest

of So we are critical testing. licensed other from maturing. We're what We're having bullish where distribution totally looking spectrum future of the are centers which types are those people at particularly at like. infrastructure, benefits all looking infrastructure, looks opportunities and extremely on

a I ecosystem evolved safe say on that now But well to with think rapidly it's that them whole that companies as easier handset that want these the so side conversations entertain to have it's infrastructure lot the now. the side to as on has

for believe the half Globalstar a final variable, component question in have and then second Okay. $XX is would have that of raised some of which hit of your given And the the to is, I end of revenue to lower only wholesale just to million large recognize revenue, what fixed a guidance? you year happen partner now

Mike. question, the Yes. for Thanks

So guidance. of lower the take rate I we mean, the the are you you now, to run where if get end just right

sit that of So the think exactly followed on results early tighten question. as August, if and We based enough just we balance to I'm sense. that makes midway the sure year-to-date know I not the I through year But in range. the about year, here the it

the in the of the year. Okay. revenue of company $XXX.X million I first thought had half

nonrecurring. Some of that is

just talked quarter, from the contract. last about guess, example. I just about kind revenue And in lumpiness, talked $X that the and variability just that we million quarter. that's about that also As the million recognized the of or recognized the first we We've and $X one under results

So replaces to while that So soon there to be recurring, the it. if might be a on it's might something remove But rate, item else precise numbers the forecasting. you be particular get that not from right? we're that, you too little that run that

If questions, further will over the for there I no turn back Jay call remarks. Monroe are closing to

everyone, a Otherwise, on the Have we'll to great who obviously results any with Thank look attention again for and of continuing the like you results the you. joining very from XX time. and the and on anticipate time to, day. call Thanks, in very, growing and forward those whether to days. or to reconvene would you're opportunity an are to webcast. appreciate talk today, the We pleased phone financial

now This meeting concluded. is

disconnect. may now You