Globalstar (GSAT) 28 Feb 242023 Q4 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Globalstar Q4 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, Paul Jacobs, CEO. Please go ahead.

Thank you. thanks us and everyone, morning, for today. joining Good

could call that contains the are forward-looking we Factors harbor begin, intended described call note please that laws. statements securities within Before in the this SEC in XXXX, statements the ending which earnings differ and today's to will file Risk Globalstar's its report year filings, Factors under section as the results forward-looking on financial annual cause course to provided as following release. this due including morning's of materially Form well safe XX-K fall for we

review year. recognize operational highlights Globalstar's we had performance and to partners financial and We like our for I'd Before performance, employees in our successful our very some XXXX. outlook. a

time know Labs by the in and was to I the place and of spoke, at in days that augmented quite thanks was organization to Since XCOM XX all then, gotten Globalstar resources already job. is you. Last we impressive. the expertise I've barely So now

from has of While a expertise, which and be to execution major XCOM new terrestrial the us ones. This with transfer first U.S. on the in and of pillars of that and our much forward partnership retailer for cycle million new system. initiatives. Since each and fund say services will initial we revenue expect enables businesses the traction innovation responsible spectrum bring performance their company, a commercial growth new already are with $X gaining at number growth RAN are is new combined performance cross-fertilization we shoots started, magnitude areas cycle early to Even my new for create wireless a this financial the that multiple new a this stage, of of victories new will initiatives, the already virtuous company, bearing existing years into have of own to such ahead. to these the differentiation. that our excited teams knowledge impact nurturing already arrival, I'm we for improvements we lease between create and green greater look and and in a to these the XXXX, roughly has improved talent, order our its government group innovations

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we business. effectively our and feel we grow confident compete can wholesale So that

a the At products. legacy partners. played on our supporting same we emphasis time, to significant Turning our wholesale

operating, of mind investing to. lives term something peace over legacy sustainable Creating businesses they provide teams and the are in save to continue consumer long and is our aspire differentiation to We worldwide. our competitive to consumers continue

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in consumer Intelligence, TAM, billion XXXX, $XX.X The and at than is to easily revenues or scale very expected over addressable our average is is With annually subscriber the to is for higher-value GSMA even today, more record According BXB bigger than both business IoT create XX%, lower to commercial businesses, IoT. ways total with commercial commercial we're but possibly year IoT IoT by XXXX. our for a commercial up revenue to grow market, solutions. the TAM, IoT looking consumer. different, for much Next,

we So there's here. see opportunity an

not opportunities for underestimated benefits and be benefits open system that might turns the It size I Globalstar, to that are our otherwise of coming out that device there served. Before one-way cost, in power IoT. up

tracking Engineering, GSAT in value-added Global tools as low-cost on rugged commercial near assets the enables that underway these One the leverage software partnership device consumer-customers their those. small serve benefit give by increasing the -- of of to or on well. Addressable our of customers is the XCOM, our can devices you tools IoT the also We wireless and maximize to these and to new solar customers GSE, practical tracking technologies XG same efforts Satellite resellers tracking real Band with an operating we'll we number solution value time. update and and have the XX

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our supported latent is the we multiyear partnership long-term and our Nokia. user due XXXX, mission-critical Band for available of this that expected to spectrum with the license XX for opportunity has into During through their deployment. the to The operations nature deployment convert but yet paid to to their end a deployment scarcity reserve lease their network, arrangement of on a The and spectrum band are geography. deal deploy designated

and of systems. delivery over traditional first we have systems announced sold technology of our the more last because game-changing initial XCOM order for customer These advantage the performance week, competing we multiple RAN were have hard of mention, received As deal talent addition pandemic. work, and Their extremely I'm perseverance to to to in congratulate with having sheer our I talented team not to development really systems. world-class belief the proud of.

that customer have currently innovations reason of make where material for disemployment, fair a a in order this technology technology. This RAN warehouse advance XCOM industry complex them valuable it's portfolio. as million a situations yet the Globalstar, the XCOM be channel to U.S.-based we to supports continually The to the initial reliability enabled $X.X I the be to is of a RAN communications leveraging from due expected is architecture demanding that deliver with is the that us changing our the by of fundamental portion fulfilled wireless deal very but in additional had Open Open XXXX and but and our by main wireless systems spectrum environment CBRS think in a applications, can this and retailer now could say One to the largely achievement wireless mission-critical. The on government deal we our large such where on validates to automation, was potential XG the differentiation RAN development most year's to last U.S. impact. succeed forward has prior opportunity in for look focus work run may the until support initiative most I commercial to represents enable of agreement efforts innovative scale. how XX Band which been the RAN, biased,

fruit. bear real Globalstar. We at as a are continue we XXXX had And initiatives to initiatives a have on traction. our great our So existing gaining lot new going

So stay tuned.

Rebecca to financial like Now walk through I'd to over the to hand it results.

recap and focus color management records hit provide XXXX with start, perspective, was Paul, respects. From every financial Globalstar good we an Today, you, exceptional so a Thank To on year morning, our I results that last for and year team. guidance. and from in XXXX will many everyone. KPI we on the

held We have investor provided starting had for when first analyst and conference our quarters, financial to time. few and many firsts in guidance community first investor over late the the XXXX the we last

you experienced support. coverage we all increase then, of thank a and have significant company your since engagement the in We and for

primarily launch reaching November of revenue our of the million during over midpoint a increase XXXX. increase the of the year due XXXX. $XX.X following bringing wholesale was Now services total a basis, fourth higher turning XX% financial revenue guidance. prior service to full our during year $XXX review our revenue reported capacity total of in a the quarter, The We million on of to and revenue to performance

commercial continues and IoT to fourth both periods service a focused service to Our ARPU year and year. both revenue quarter increasing be for revenue subscribers in generally and subscriber high the full equal XX% growth on the in due revenue record story reaching with

subscriber compared subscribers rate among steady mix and more unlimited have customers to XXXX up on XX experienced our gross months. ARPU higher activations quarterly over in favorable the selected basis due the both year have growth last on usage subscribers to as the X% or with plans full network. increased We IoT otherwise of plans a

that provide to IoT the of working expand resellers to of the sales opportunities are needs address to our products growing pipeline space in to order the continue in a customers. capabilities and devices our also our We pursue meaningful the of

Beyond revenue network recognition wholesale XXXX reflected our also for services. terrestrial and subscriber services,

and of to in last short-term gains impacted also was years, the of long-lived by of areas of primarily our financial during million net core our equity adjusted performance. debt assets, our items the to generate to in EBITDA their technology by respective sources. our operating financial year technology, our capital that illustrate with continue period, reflecting with sheet XXXX, and XCOM balance and has noncash contract that bit. From announced license year XX% has base year-over-year $XX.X year. profitability comes in a drive the operating just over which our following that cost products, the believe perspective, ended these this in in year, While which forward critical cash exploiting guidance, a this changes making revenue favorable margin asset. Leading other and of planned investment of early our nonrecurring investing EBITDA profitability under we our is look of we value, which revenue XXX% people. of of and network representative was significant license believe sources, customer this improvement XCOM to periods. X not material million, residential and from XXXX, of the We line synergies leverage a as resulted and critical that's $XXX growth. utilization long-term last our for investment This in assets can our part macro new The issuance loss of during on current XX%. With losses the is business, continuing aren't net intended the compared A was changes other decrease we our our XXXX. increase during items Xx, beyond to complementary but of margin over invest capital impairment for increased our potential particularly adjusting support the significant time, With decrease lower due during margin a extinguishment we an will this during perspective impact, XX%. and to enabled was with structure a our for This was a with generally full increase to the After structure margin

our Our and financial drive new outlook. giving record financial to sheet to are performance ability us balance invest strength initiatives future. Switching the our to in

we million confidence $XXX company continue $XXX approximately plan while our the changed Our XX%. conclusion, ability revenue total business our to The the licensing technology for execute as that EBITDA positioning and on margin for momentum strategic transformative the million it and leverage company came build for past in changes health XXXX financial and several by the continue fundamentally our includes quarters, between changes company. making in growth. In and business this XXXX. guidance our of to forecast adjusted on executive we to the launched of of This built XCOM that the an future have we decisions reflects the with

the now and supported technologists call for for new are the by truly a the that, focus on while expand operator Our XXXX support company's key our stream, existing to and to also dedicated initiatives and innovation I back unique revenue will of team exploiting execution. With and turn designed Q&A. both assets and

from [Operator Mike question Instructions] comes line B. Crawford first of of Securities. the Our Riley

deployment with initial U.S.-based so back we start for you CBRSs. If XXXX, retailer, in the talked major about could this Paul,

exact your to great to anchor that think really work. spectrum was but was I you spectrum that have, quote super make needed

just would entail to in future. the on potentially Band elaborate Globalstar? you alluded this that Can of what deployment So for you and becoming of part that just kind XX

just a at get And that unit technical It's we developing yet Yes. XCOM radio really not that Labs. big have multi-band. It's lift. that's we weren't the to

for we've So initiative year. that made this

And the band. so capability we'll have to support that

be link around. to the I because mercy server when band that telling go don't you a you So the at is something the it's the mission-critical where super private application want for important down, have to your SaaS you you said, communication great. of you're telling have it CBRS, robust But you that -- like or can't move while

sure that the to customers. bring have good that we Band that I'm is in a knowing position we'll sell on So XX private board, capability be And a anchor opportunity. as to we network great

the How deployments, that of value a kind would pop. kind talking back little spectrum? envelope sell look mechanism breaks you bit. per megahertz as targeted as down value of And the you're when very broadly, people But spectrum analogy a about of

your the should of spectrum creating think how your value the about from terrestrial will that be we you value So spectrum? and

Yes.

that will large I be probably specific across in are it. we're a think about geography. The we lot there's multiple ways that because monetize area. is there's for able very talking a there I be It's more pop geographies. to where with cases a that it'll not mean deployment and an broad one of application Nokia very targeted a

for number it's be number will the times. up But So a whether of that it customers, to the fee use many I can subject fee, end stations, based way are that we ways that on fee think, do be There's it on it's doing different it, we of based negotiation. ways can a base particular there done.

that value the into have. we any And not sales of will so along locked also sales the that we're we XCOM having fact show that it's breaks that -- have a other one differentiator that in think spectrum like competitive RAN we I way. And don't particular the

So spectrum, it's other capabilities of think, create that, plus gets can the I us that we the it's all not really about to bring about lot excited but just the spectrum value. a to opportunity bear

that. Maybe one if more comment just on tried I

is couple one seize hardware thing, or to -- customer you with of there I opportunity If what any way is mean overall? -- like warehouses for a sales that of million $X.X but the

has [ ]. of Yes, a that customer sites lot

have is a going it to We're system. the that that are not these that's was Labs why this game-changing initial around from to competitive here, very, just to just that and Band obviously, what licensed not number. technology better from this that of that. I we But over real making without XX really we've say differentiator. a number this a million, deployment that, as part very what $X.X competitive it here performance of -- It's even we course, a is. having and is are our deal XCOM won than large the worked that itself. large that's showed the aspiration. It the portfolio significant system build having mean is intended So really be a traction But we without business

So behind this and a that spectrum there's between Globalstar logic the the technology, the than we the the with technology having deal was of having two did and has. the synergy industrial incredible really that that of combination the spectrum

Okay. out. I'll hop

you in comp comp stock as One, think significant, Just the outsized how QX, XXXX to become revenue quick in should going how spectrum report SG&A? And if that? financial kind about stock two we are then just questions. in two, lease of what

Thanks Mike. Sure, the for question.

to your that. so will assume I other statements. comp be revenues. it financial out reflected you we'll report not the be question, it's on the And service item required will material, line think first, under And question. on answers I stock the at your obviously then move I'll we mean on roles. how to point, it the If material, that's So in extent that presentation becomes SEC how this in it break it

Yes, yes.

Okay. Great.

comp previously, We kind just statements in see that is in was broke G&A. the XXXX. financial recorded elevated users it to stock So out of because it amount of for

as price. that are it the restricted will elevated performance said, we Those the the is you in tied XCOM like stock to and So costs noncash. certain recognize as know, important I based, be issued to it's but compensation XXXX stock next it's associated because It we for X varies, units years with executives.

a will recognized over that, kind the average period. So is way the of X-year works accounting be weighted that

Our Lightshed next the Walter line from comes question of Instructions] [Operator Partners. of Piecyk

Or using of terms any you I XCOM particular more know Are it using XCOM happening? they're assume full there Nokia the termed any where stuff? this equipment mission-critical. in that color geographic depth bandwidth not you've in delivered? type usage on Also, is in give of limited thing, as that's getting Can radios, the you I Paul, is there? area terrestrial the

So lease, the Nokia, terrestrial yes, when Nokia deploying Nokia. stuff? you you're talking spectrum Are our talking their about will be that We're retailer through so the about that's doing that's stuff.

one. Yes, the Nokia one. Yes, the Nokia

Yes, yes, is a not customer. mission-critical side, then environment. yes, -- haven't on And bandwidth-constrained -- Nokia's we it the that's we're not

of massive the them. robots data So we're be definitely not the there pushing lots and is can uplink throughput come case there there's where like video for off

future more the being with So that it reliable there's carrying -- metal benefit actually But it's even end in system that capacity. a X-dimensional structure super where stuff provide metal fact key that of expand around. could is to environment up the would a that way metal and an regions it's in we robots no the handoff that

So complex the RF the all time. changing and environment quite is

structures. our extremely share well and so shine of in moving And out system That's metal are chillers these handles much that like doesn't and where and robots really the of freezers and that things a lot. technology some

spectral on there. as So we're not focused efficiency the

Although, mean, as like higher. said, and robots, off the even coming telemetry I then future, to is more we'll I data throughput the push more in start and the

And agreement network dumb the $XXX fifth whatever the any then to the today. numbers? talked agreement associated satellites services million kind if million, the $XX whatever about $XX this question, you upside with CapEx into within network given larger it. with first million a a probably capacity up Got including turns incremental minimum that customer, the is new success, allocation it but there million, growing constellation, services if of $XX ends that up satellites, going you significant of being huge year announced are

can way constellation, it we it we that have. capacity served it's the No. The up, that from have the way satellite that the with be set

limits example bent-pipe capacity, and can big pushing and make it's So system, not It's we're services launch perfect constellation that and are the having on without with CapEx. not pushing the the the of architecture have, we're a we impactful to new how super the on great. we limits

example. a really So it's nice

huge, wholesale weighted? having been from over there largest equally Obviously, years legacy, now, terrestrial, just your know? these they XX there IoT, The be what pillars? a can are of opportunity? time, from among X like, upcoming look, which are X may X just pillars you while, those is don't right you years But about you now, value, optimistic a Or a one pick Or years. sense most change is the things now of are

we -- mean the about pretty I excited from. side came I'm obviously, where terrestrial is

growth So super IoT, on opportunity, side the about other existing services the good businesses, leasing commercial and that -- the side. equipment the on. and But of excited both the we've seen

We before. from that where that value can we up path of to services way we've that It's the to solutions. selling I solutions work selling we and can better of probably a you way. how generate something remember, our stack, similar kind did provide of OmniTRACS done went bits we have significant ideas make and that kind

So And technologies I'm value new can definitely lots that. there's to apply of excited create there. we about

scales has platform. great that's but now. think platform grow think But great has them, company, a I great. to we got the be going been So created company shown. a will I like to The wholesale for And transformative one I continue valuable, we've business the many think is the The value then everybody, to too. drive that that is IoT so a I in one of just we're good the we one, where make devices and business. And spectrum like said, there's going super business out the solutions where can lot

a lives. I a legacy I people's are, along that think, obviously, and business, to working lot. It like for the time. those truck long So The we've been save on that areas continues

it, some the most would investing in are We I say focused. I'm that's not where but the place

do guess be or to that that Just separate the initial true, deployments, trials convince opportunity but have I going an me additional get is but the might if rights I'm outside provide of that's perhaps terrestrial -- I Or wrong, this, to back perhaps along? completely these to trials a these to if misremembering regulators opportunity terrestrial. process? move guess, U.S. the think I not Correct though, question global you I

economic why if having kind points regulators and create terrestrial that are are to new I will the valuable you of mean opportunity, interested great in a that rights can show outcome. proof always point that's

is yes, think being So have valuable. points to I proof that's able super

a to FCC The using of last exclusion cellular question. It like existing have everyone as just expected ground. certainly some terms some then about whatever zones documents spectrum. And would sat came there's in looks out

initial Just by market? in thoughts you on the FCC any the least proposal that the have or at original

On using terrestrial spectrum? the

the yes, spectrum Elon that ] to others cellular Using, license and [ guess? AST I use, hope and would

mean, I to new that's Yes. obviously, gets going it provide if services done.

And watching have that great relationships so we're and, with operators. cellular obviously,

talked to the we support lot things go that to really the opportunities so where direct about them competitive like of that So most a one to the far. are been are the responses shows Obviously, of using we and forefront we've But doing devices. the to also the satellites going what spectrum is of in and be.

all be you're going plays the we Globalstar, whereas building federate those one mobile as nice go how around network kind one-stop I a shop. interesting it's operator a out. of with have to yes, think see and we thing different around Obviously, and things, world, So network you spectrum if around world it's got that to is spectrum, to the

and go it, to to obviously, definitely and and there's FCC. the So pluses talk minuses in

innovators set already They be up there's competition what good opportunities is While It's about. there's lot see do U.S. a well. well. existing to for the of for to that's they interested spectrum, network operators and service creating in satellite the also mobile a marketplace mobile in are as support that going all

to expect innovate. we So

time. remarks. it like right. at Jacobs back All turn would no further to questions to this now am I for showing closing I Paul

everybody. sets as are well. thoughtful financials was we some such Thanks, fruit. in initiatives. again, great XXXX. We're and have looking can us are for the initiatives company it bearing I And Hopefully, new position once investing yes, in it better. a said, new we're that a the that, already see forward you up new good to satellites And launching really And about like and future well to those

the coming So the built along about with about we're on and for years months initiatives we we've look sharing more has going coming excited to to date, in existing and that ahead. what's company future, the forward and where the been and what weeks

and you So thanks, talking support, to look forward your everybody, to for time. we next

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

You disconnect. may now