Globalstar (GSAT) 2 Nov 232023 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Globalstar 3Q 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Globalstar CEO, Paul Jacobs. Please go ahead.

Thank you very much, and welcome, everyone, to my first quarterly call as CEO of Globalstar. start Rebecca Finance, CFO, and spend Business our of by our Tim Kyle the today brief VP of some time VP Operations Strategy. I'll your bulk joined of Clary, then getting and our Taylor, Pickens, comments, our I'm and making to we'll questions. by and Strategy; first, note that the intended the within fall provided please today's under statements But safe laws. securities to call contains harbor forward-looking in to including and Factors statements the the on that described the earnings materially of forward-looking filings, ending results as Risk SEC differ Form this morning's could its release. section Factors XXXX for as financial year and are cause well report XX-K Globalstar's and annual

my community here the week. posted I'm to So know analysts conferences we'll of and to basic is looking shareholders, we to more most of upcoming stakeholders events, more you will our approach forward know of this to communication investment who earlier and several the me keep be to and lines from getting getting open. out end, to remember that Qualcomm

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Globalstar's that as wireless job spectrum and that the fits feel So great with Band of team to a Globalstar I technology Labs because one already resource differentiation you platform, I heading. and the structural XCOM vision connectivity to The address throughput of CEO why provides come mission-critical where back business rightsized took Globalstar? combining efficiency is has logic was Labs over with my I did spectral Globalstar enhance significant with assets XX. -- working XCOM of on applications. And know many we strategic

might in New City discussing You last Day initiatives. at those me have seen Investor the York

the So the had over this row seat a the I've conversations ensued to summer front last lot And a successfully. of that earlier year. transformation concluded

us who've history. XCOM So the the And we other here Globalstar's for chapters. energized are with to a at bottom Labs of be knew next number along folks line, joined Globalstar, really

in best a spectrum been with Labs, saving monetizing quick they our meeting performance first ongoing our seeing my our its quarter. team Globalstar considering exon multiple were on our has spectrum-related services spectrum experience deploying services. products, I and IoT the for weekly evolving and enhancing XCOM partnerships to around and on current lives, both Qualcomm, customers I'm ever-increasing has Globalstar people we're of key business, high satellites capitalize how which and to dollars that by excited opportunities. open provide in our of created billions new goal ability has For legacy as industry satellite at world. to basis. A reviewing Amidst humbling XX constellation, opportunities including such decades, scale and partners and on at And and our that satellite The and initiatives growing plays XG initiatives almost private areas reviewing of see how run led a of it's networks around in with determining well assets. been days, last how transactions have large wireless spent our and assets, value a others. We've creation. Partnerships prior those all many network to the Globalstar Globalstar hype align our the to with role stories of the level number

in the its growth record of improvement a revenue our during up XX%. by Globalstar sustain XXX%. growth driven a XXXX outlined revenue. EBITDA we're third IoT total results XX% significant as continued Commercial and We release, this the to And result, was with guidance. from low in As increase end quarter, the profitability year adjusted increasing increased in saw Service in

So we success, through R&D for to on my do Growing in of portfolio focus and investing our differentiating offerings be strategically and which can all will us position innovation. the opportunistically. whole

capacity the competitive and the just beginning globally, year deliver believe to cost. In last transformation our conclusion, current scale performance We solutions at efforts. I reflects the the date over to at customers of have to and

with We expect in to world. elevate around Globalstar conversations customers the

underway expanding new online. satellites Band XX new and We and have products capable ecosystem coming

to assets, leadership to proprietary our create ourselves now So team's in operator for markets. And and looking to back like space plan terrestrial unique it is industry hand these value Q&A. our technologies to forward, and differentiate I'd the the and our leverage

from [Operator with And Simon Instructions] our Stanley. first Flannery Morgan question comes

on to be does hit Great. potential large on be just Or few board, in we from get to here? next touch pipeline of of more that management how I to secondly, quarters? of longer-term where then the just had time a some little you the constellation, and on could the before us pretty think Difficulty] timing sense some if latest are color the more in deals this team a we because is talking a the wonder you significant, process? the And pipeline even was And line in It'd opportunity? [Technical pretty about bit just these the great the build I expecting on give see are how look came

question. take Paul, do of if for the issues, to thanks constellation. new not sure audio you we're the timing but I'm want me having Simon, the

Rebecca. Yes. you, can I Yes. hear Sure,

Perfect... Okay.

hear Can you guys sorry. I'm me? not

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the myself apparently. to only question, I hear hear Did to unable my you I'm you Are me? but Okay, speech. sorry, answered

Okay.

So sorry. -- yes,

Let apologize for that. question. me answer the I

Okay.

me So for design anything the we constellation, actually announced and guys timing. whether help have you process the publicly we're in in on and

on our expectations particularly and track. those MDA talked And recently on the where the contracts we milestones is most for are timing have. and for launch SpaceX XXXX We about

in Okay. Spectrum of terms And deals. then the

So came that when I spectrum to in, the has including underway, initiatives started Globalstar the I all at of just had assets. look

So point. update we this don't have at any

that that color point something Okay. should next few investing million ramp? Or on And this any your to you're about as continue to OpEx more that allocate how R&D. revenues going we in more Is of a about year opportunity? think

Yes.

associated looking technology, which of the the OpEx. evolution be additional then can other Labs ways licensed. these things we new And to to on the investing have XCOM already in underway with products, we're done R&D and that we're at initiatives the and impact build was So also minimize

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

sentiments characterizes included NRE annual some And substantial potential a to to revenue. or two I which license be Globalstar. terrestrial end have one pipeline, of may in back near talked if company changed? wondering company what the consistent license I'm Turning before think statements remain spectrum or those have tens Previously, about apparently were of the by monetization even of of millions thought deals resulting that the

said, Globalstar got had in here. the sort underway So that at I looking initiatives process, we before of like the I are of all

spectrum Obviously, would my have terrestrial networks use include XCOM that And focus today lot a Labs we with licensing and more private assets how joining. the of those. technology and team and we'll the with on the so me

experience, use in that our sure So my we trying we I and as optimal fashion, comments spectrum lot to spectrum we're of make a monetizing really in in an assets. reading said, assets have

So anything over I time, working the we we'll next that, period to on our as you point, update we'll on well. but -- don't and at make have decisions are that this on of

was to As say to could be a least from my was in of spectrum would Is to an be need company's wouldn't kind be the with that for at that not fashion. of potentially was that I high-value deals used cellular with someone a it assets another necessarily site tracked one fair the interfere these global any that asset understanding -- follow-up, case? Paul, enterprise far holistic ability that maintain that

of number I came. initiatives underway were a There's Yes. when that

looking we're they whether can are with so of kinds the all that those. existing at. the or not the on both at satellite things And side, looking those services, we're And coexist obviously, terrestrial and

a then good differentiator And but with -- the companies given potential be important how on I that including, like Or when that of about XX a IP. can utilization go to market XCOM is that don't know Okay. it, fivefold deal, let's a networks, -- say, a an increase talking do Is might actually to time XCOM private ought there to integrate a XCOM to you're frame solution when IP in still spectrum deal, you not into is see that call out? but months maybe just IP that we something you with.

Yes.

XCOM customers working productizing to in the was they'd who networks WiFi. that combination people spectrum. applications. CBRS And was and interested reasons That working the for on Labs are use of with If Globalstar cellular use So one was they using pilots licensing the that private want on was wasn't technology -- mission-critical technology. and of in the weren't, the

using been also. come and CBRS go we've can CBRS, So but

a availability can that extremely for network private XX have the a application. asset it's differentiating wants and to of a So we the who to Band spectrum, customer which mission-critical guarantee

underway. So that is

has that predict I the of date to go the hard to next it's we when We're button with that proceeding know adopting customer is is is press to introducing customer always year. when this exactly start button But people Now happy the happen going are been at is and my technology And timing a don't new said, very Qualcomm, expectation life is we've willing the new will when somebody on that start who as technology. with desire how but I new when date saw the that, you're to our be. deals, in some technology, little difficult have it's because the trials, and say within to a to go. pushed the

I final then question. have And Okay. just one

$XX any that range $XX is what fourth guidance million for revenue? to to Given a licensing potential be excludes million. quarter would million spectrum your Why $XX there revenue

answer I'll that. let Rebecca

the Paul. Yes. Mike. for question, Thanks Sure,

not like feel variability that have fee that closed seasonality, there's we've the predominantly. So the we've contract quarters seen variable arrangement. elements gap do we've before, in as under may unknown a source. year. fixed appropriate our bonus exceed in that at or sales X it's is the There's timing wholesale the certain due past kind in core the is to revenue about there's and We based is that, based our the may timing, range, the precise revenue And components the throughout achievement the to equipment a but capacity quarters now range is completion as talked just we of which milestone of very given of balance of get year, just

follow Rebecca, drop just what to equipment quarter. I happen service $XX just maybe even to sales, were somewhat would to Okay. in on, for if have revenue just for draconian mean, pretty get million down X drastically would scenario? that to have to the And -- there the

And And nonrecurring Well, rate. I in year-to-date months. X September, that some right? the the see run components, gets the in fourth those I necessarily you months by XxXX kinds recur you're we there's after to decline think a nature you do it through revenue so the take we've if answer. X said variable probably make that let's is adjustments, From divided in just first to of But mean, you first as say, and at that right? perceivable items a of fourth those a looking revenue, quarter, components, aren't of before, yes, quarter expected

some in variability service it's allowing So inherent for of our just revenue. that's that

Craig-Hallum next Capital. George Instructions] comes from Our [Operator with Sutton question

you because Paul, that that vision it Is fits you meant connectivity Globalstar a terrestrial wondered satellite statement? your curious you plus that Just that. mentioned context statement? a mean? of in of the where I by you is with direct-to-device Is joined could what headed. put if you connectivity the what more

Yes.

Labs, excited by terrestrial assets XCOM that the definitely I'm and of on by see tracking. be some of terrestrial side, opportunities the which enhanced at have we the were and space-based the we opportunities So focused combination space to can the on

example is transportation great and that. logistics of So a

the to I and and network what intending that's say. So both the terrestrial satellite private networks. It's about convergence between was

device X-way when you. update beta give of an sits expect you you the Got to Could terms potential might where us general have on availability in customers there?

and the resources that we underway as and things that's of development review is this in from XCOM is one -- that Labs I don't update some I don't with Yes. been as that that came technology an other have well. projects of on engineering to I've underway, focused point, at process is but those on highly the

update point. on at So we an this that don't have

Our LightShed. next question comes from Joe Galone with

it's industry. LightShed. so -- past Paul, from Piecyk wireless has in actually mean been the the I dramatic a clearly XX Walt years change

of happen a a you in guy on we the kind get XX this fall functionality of put curious it right of been where terms be along is end going You've And of game this? of undersized time that And change. just frame the revenue specifically would like what some terms of can to market, in does key affecting great there. accomplished opportunity obviously, a the next is gave What a I'm here? that given years, to in of it are other with if capable going What were LEOs can you are what You ultimate and be the X frame to? some doing? seems existed. technology just if Because of have of but seeing we time market people terms want, can and we that functionality, that has it that direct-to-device perhaps in the like lot years? the off be

Yes.

maybe that space-based obviously, that of way coverage, but there's necessarily pitching of rolled question don't area more when that, And people coverage, sort certainly places in if that a I there's think niche an reason, in don't just was have you that cellular more will that the right? to to the I original main world, kind Globalstar, you're providing but for the the the And across that then as plenty way not and coverage, even on going when. think can has people and be the out there's back you You're expectation access. And idea a coverage. is, lot more good access. out of and it a whatever technologies shadowing reasons cellular as focused traffic says became why direct-to-device that more that's market. technologies. of market get it have well technologies of lot of and as world you're in for I obviously, -- believe The infill for an or there's be other geographical satellite of as, where go

geographical of we coverage, where cellular plenty networks of very but coverage. have population have We there's world great parts the don't have

was have Now trucks roads, we satellite even much And didn't to pretty incremental in provide business the had you they a started that enough satellite lesson moved lot for by that at we when Qualcomm cellular the system system OmniTRACS had terrestrial didn't of coverage. there. long-haul a value. because But main even the end, out,

-- point, try the are where over saying that necessarily a that the will you're believe to going infill. already so there might seeing we I it get and we're even improve already. that, satellite that traffic So to can excellent people people point going of and at lot don't cases cellular believe has do where to this that these have I continue things direct-to-device do is but It use And there. functionality the

I do I plans in locations. say happen my to a metro are CapEx heard There's of not ever gaps neighbors any coverage mean, see based in of on development. live trying back market, to on of don't going certain far I of out we're and telco their it. what of lots type the I've coverage to what terms to hold think

reasonable map? I these than that understand, expand more hence, of messaging I road the in -- to locations be the think revenue obviously messaging can terms in and opportunity? just target able Is that So will I initial get

Yes.

So that's it.

So agree infill. it's you, cellular with I

where be but what whatever So be you might it's reason. areas for would coverage coverage don't of normally a network, have in you actually

that do So you per resources data Globalstar voice, yes. And at as you're The call higher do then was system up sure, much in terms required of is to to rates. set connecting space being able the voice. question for originally connected how

people things their low using right can are from that but we their rates, a isn't is for bandwidth more days, for over people bandwidth. now phones provide. to space voice phones do lot these fairly expensive are really And Now consume data that using relatively what

as you are with obviously lived constellations. through They've so then that now some are know, providing well. are see to we high large people And mega looking of right using OneWeb these And build it providing people as that antennas. very speed

and for and that so the use and So what's question the that affordability forth. on mobile so what's of is, of viability

So these I a space a and high next resources that better takes at say high serve just lot We'll bandwidth, those to throughput. years. But phone things are over play to it the better. understand going would few of out

that so terrestrial-based it's those cost cost. trade-offs just and better that's build connect And whether better will a believe that those will And to device turn going versus operators then become to widespread. whether services I more when it's satellite into that make -- to to a would or out

that they their is So Obviously, can higher for for is ARPU. on cost capacity. point, guiding pay that that return they're more what assuming constellation customers get a the last on a year. charging every to Everyone

coverage, of Again, one mean the service need game is the Or coverage doesn't that going would or to there have works that does that assuming I going context own town to ever I whatever uploading get for get If me that in their are the that that where than CapEx operator. demand plan. the is at given you neighbor operators any that cost like again, in now to because anything value there's the of be the that picture to that that significantly cost have that of seemly here of right either data capacity, constellations in higher my I'm areas multiple do my end going can't I the in that capacity And look location, could constellation? the exist. where

root is of the Like guess X? to is be X, one terms can number winner service ultimate question in be Is this? -- what one is, here that constellation going I that constellations in So endgame there to the going demand? of there can

Yes.

companies right in there's constellation fixed to Obviously, are this access one providing trying that's I wireless mega look, there's compete plenty think, now. of space. that

providing the ubiquitous, it actually that that of So going we've sort is is to cheap the try past yes, kind as system is, seen of to like of can the it. been for capability economics all end are serving remains can I that's people on and lot The of low system. What out, in is question of the and think whether of we've and we users a that work which time. of focused is Globalstar what created be serve of what a to widespread do is at necessarily consumer don't through at the market, the the you space-based kind what value lot enterprise or an a the users incremental one ways to users a use to need goes because of very be said, proven pay cost that for because willing to and

that the necessarily so is And not but what's throughput, important. providing connectivity that connectivity just but

out So that if and would step given some back. And focus need on device of more be information to the next kind of data then you in can get it, it. that of get

think, consumer be through connections to seen. satellite And So remains very willingness that, to depend data going think to high having it's on for a in pay rate summary, I I connection.

spectrum question in the being the or one Just devices utilized being in the The spectrum terrestrial satellites? you satellite cell foresee phones already Do better that's on themselves. stuff achieved that. that the placed last in being through

a mobile on good it the obviously, I band frequency I depends band. has devices. mean, frequency for mean Globalstar

think you've but so ones little the a has combination, But what some low-band been -- are of other been it's harder. Some seen most of I spectrum.

spectrum using allocated trying that's was licensed already are And people for technology. cellular that like us are for been Some satellites. others spectrum

the regime mobile are and how use. is much what bands as so what not it's are conducive So really they license the to

is band saying? what low prefers Which you're

Yes. I seem quite we good. are mean the where bands

So...

remarks. like to time. I'm this back Paul would questions turn showing no to I further now it for at closing

the on of the for everybody, company. in in quarter I underway to I us working at and IoT Globalstar private working also there's and satellites, for We're the the it. at work to thank work great obviously, and new new space, the new questions the and and about the wholesale, team legacy space Like for of great happy We're for revenues, we we're our on Thanks, our Band the Great. network build now. in Globalstar. capabilities at just systems the on joining excited a all got lot said, results. expanding I'm out wanted here and members XX. And Globalstar both all products really interest so a on to right the the be this and hard of Globalstar, their lot pillars

earnings thank very you and talking you at to much, to next So call. forward look the

your Thank in program. you today's conclude participation the for conference. This does

now may You disconnect.