Globalstar (GSAT) 8 May 242024 Q1 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to the Globalstar 1Q 2024 Earnings Conference Call. [Operator Instructions] This call is being recorded on Wednesday, May 8, 2024.I would now like to turn the conference over to Rebecca Clary, CFO. Please go ahead.

Thank you, operator, and good afternoon, everyone. After my prepared remarks, Jay Monroe, Executive Chairman; and Kyle Pickens, VP of Strategy, will join the question-and-answer session.Please note that today's call contains forward-looking statements intended to fall within the safe harbor provided under the securities laws. report the statements differ of call. XXXX and filings, is its to cause in are Globalstar's able and could for not earnings including forward-looking XX-K release.To filings the Risk annual as its that other results year today's as materially to described SEC the SEC Factors financial Form well ending today's on join Factors Paul section start, his focusing family. Unfortunately, passed on and away is he mother yesterday, his Jacobs X the of both and to also Lovett, family condolences our send the family Board to to We unexpectedly weeks Mike member, passed away ago.

extremely will phase brief.First, milestones section level, on contribution release, a highlights. to the remarks business update mission-critical Today, we has keep The government contract are so team our time our served prepared our with is for quarter, the substantial it Globalstar time sad been quarter underway. services operational We during achieved a encouraging. in his We we providing X Mike's announcing initiated X satellite results a and proof-of-concept to Board.While network for We are grateful personal company first a a valuable included the during our we for earnings now satellite terrestrial. the applications. utilize and call is X company this of significant on

our shipped our an first RAN capacity materially assets, spectrum terrestrial commercial units for side, the creative $XX upside share during a month, we a and significant contains term we agreements satellite which million revenue X-year the use and year annual the potential our after will last has commitments accomplishment team. opportunity go-ahead for arrangement. use customers.On agreement not final our revenue escalating utilize other the represents the enormous Assuming to XCOM of testing, verification with through minimum This for does fifth the of

retailers a As previously of critical the RAN largest one was announced, by world's for XCOM the deployment. chosen

only our fulfillment It's for subscriber to Also other our not noting service showing needs and service to financial of with believe deployments. small also RAN revenue of use the testing a larger customer over-the-air important million, included this cell the total X deployments $XX.X relationship that beginning but year's compared XX-megahertz of that to and X from powerful managed reported comparable prior services, first capacity this remember that team revenue hopeful similar channel is We a cases. customer, We XCOM management wholesale utilizing gains in quarter. has to revenue. meet with more are the We the turning the primarily many to up XCOM Band first from of a Xx certain results. generated are combination.Now the nonrecurring nXX slightly quarter this worth of

nonrecurring revenue by this Excluding X%. million, or item, $X.X increased would have service

For revenue continues commercial subscriber-driven sources, IoT to grow.

During revenue of was our for net high IoT.Moving commercial the was increased adjusting margin history shortages quarter by inventory from in other increase loss performance. and any in due larger device commercial and year's To to a of representing business, $XX.X certain adjusted that XXXX a for After financial for we company's primarily XX% availability. of from due spot XX%. subscriber EBITDA record down of both core result a quarter non-cash sales nonrecurring representative XXXX, items. driven was In the items point, product our of million, The of Subscriber aren't first timing and areas this of operating the spot these was first experienced prior service and the XXXX, to a IoT quarter $X.X recovered IoT the million higher ARPU higher sales. as equipment base. first and revenue quarter to illustrate

a adjusted sequential in and EBITDA well and year February. revenue Based on EBITDA adjusted and these guidance expectations, quarterly as of Importantly, reflecting to future revenue the compared both year. total basis we on full were the average issued today, variability revenue our the in as throughout higher reiterating during results quarter XXXX, first are

about even in more come yet the balance streamed and Jason are and via so Kyle, XXXX conferences presentation the weeks attending Bernstein I to has coming with West We about how started webcast. being is and be excited will year.Paul, of the what one East in Coast on the

turn to now we Q&A. speaking the you for So soon.I to look back operator again forward with the will call

[Operator the Simon line of from Instructions] Your from comes question first Flannery Morgan Stanley.

a on say, condolences X And are there's talk of little I any from could to next Certainly wonder, months the bit to great, and constellation getting that phase? into it results finally, pipeline, what's would proof Jay, Paul's having here. and final Paul. constellation. timeline where then some then updates next the seems progress the be the ago? move the concept, on good the And to about you just we Our family versus, today like

as glad I'm will. Simon, remains launching the reverse do if you to it in Great. previously. constellation conveyed anticipate Take We we've XXXX this. order, The schedule. on in

those like up fundamentally a renew any of convert it, last it that in then convert will before. on else that is is doing they longer. the more It about contract. test they parties collectively, a the we're months, can But then that study party of of it talked been service to can getting for work few both time the a contracts, the X-year it where end that ought term.Anything they So proof X believe almost initially into all convert that concept, as can a can service set and that X-year Simon? the it that has period, that and full the to be.In and terms they're and either can At that so way go on can is we that or for that subjects, debugged

component don't there know that, saying even can to you're if service the think of No, any think the more be share I I that's us. there's that can say that sort larger And I that. revenue to if of you help a can fine. million make $XX is

much much say varied we that more additional of it's yes, that lot of the It service they'll reasons. are about use a to the that But can't But pretty ways.So provided share we it lot this substantial. that's because we're say service is. -- say we whom number the it actual that, will optimistic that provided us. optimistic is is are revenue optimistic can't that of being a for structured and produce in revenue of was We we way the component can -- what a what for being

the then just activity? Right. the general level pipeline, of on And

do mute? that you Kyle, to are Yes. Kyle, want pipeline? take you on

hear you Can now? me

Yes.

you. we hear Yes, can

That I then was it switched. and on my home plan

that. yes, So, sorry about

components talk them, several there's if referring about of don't to the of pipeline. pipeline, satellite, you're the but I RAN all or XCOM I'll to know or on So I XX just to different Band guess.

first talked the working about, for could XCOM RAN, with they we're quite on pretty So some customer keep retailer busy time. that the that we've us this global

that a think I So alone pipeline. is very substantial

in potential opportunities would time, amount Fulfillment which of other decent have much quite where market. than spending it's actually we're on even a I Center The Micro the it's thought this larger large, MFC, is

XCOM the shows So we've doing their trying to RAN trade be various and to been talking going deployments.We're where to pretty that could and to that companies are in the beneficial out active think of where work are areas RF on focus to mean, you other with continuing with situations where, have I one the difficult to around. I environments automated machinery opportunities also moving is that large explore

will focus like one for of on and looking And that. focusing, like things shipyards we've on think the be spending XG others infrastructure Nokia kind think we're places opportunities. to with ecosystems already time good we're and with work of Band active high-value nXX ports and and we opportunities where working areas progress we're areas radios, more types I logistics XX, is similar I there's I there.On infrastructure, critical So us the good that, growing Band and are building making opportunities, to on that getting where broader very Qualcomm for again. which It's of various continue we're mines, been ports where deployments think,

think more we're I satellite the is on don't new up do. highlight I as products I to usual. So then they that. pipeline the on And is team into it's business the market -- anything -- for the there. But always will of open have the that kind driving really mean, as market side, working

Your next Securities. question comes Riley from from the line of B. Mike Crawford

cash Can you sheet Is and be XCOM talk especially Band your does in, you success licensing? balance come looking about flows attack on what might it with to free accelerate your RAN XX parts first? of

under So on as balance from I'm agreements. you to what that's you're perspective, leverage improvement, that's, so sheet mostly assuming our service a know, referring

brought down or which we quarter. about we the XXXX agreement, service have funding million is $X.X that recouped a So fees against earn

And so reducing. that's steadily

about agreement, is range. $XX outstanding that's CapEx in And funding then about of of the which principal is total time. the funded XX% million there's satellites our that next-gen over think the I XXXX

and will funding so similar And agreement. that to the recouped in be -- a way XXXX

in or third we in principal I and third-party get XX% as paid immediate deferred half agreements, plans brought treated have of our terms is they are those just as lien. how think brought of cash the so pick terms balance and tranche debt prepayment any because GAAP down.And but service, of classified kind in under And true the those don't the the of address And for down, of notes. gets second then terms debt revenue substantively half to in

at we entered at time rate, the least market that them. So into

expected down balance couple over -- now sheet right the Xx years. that's leverage at the good is at go it's I So to next date, and pretty of think under

you level.I a Mike, it's helpful, a if that's if follow-up. know healthy have So don't pretty or

but RAN. Sure. market? be those when I to to into development there? next there that incorporating can the see. you callable notes believe, a will work unified then Is March, at be Band par, offer remains back XX I XCOM getting are And solution done to XX% -- mean, what we'll And

Yes.

we as far taking Originally, exact radio a vendor to based to them a with done, RAN more As do on. be technical defer would later that Baicells. Paul, of can We're XCOM on was that call the needs called I in-house. the work

launch And some have shortly needs full of POC that that type team commercial later now. year to kind that and We we'll after technical on some more think are a work that. the They there's right so do. this then equipment working

a XX -- then opportunities other just the past which couple customers instances talked or have where away, negotiation years about prospective are in still or there's now, in you've of gone back And or... going been Okay. deployments, those Band they

Yes.

good So a that's question.

brought greatest have. that reasons team than engineering I could we that think Paul when wireless anybody -- and one can the team mean, I I the -- on, we're -- of So say the they're

all company. at into And opportunities to use they the very, look on, only want strengths so obviously, minds. engineering built not also we have. have when we wireless and are a and team business very mean, bring great substantial mind, them I that we Qualcomm they're their great them Paul And

And at so he opportunities. to wanted of think, to we decide the at so drive There about move how we've And to he forward.And was, X them company in it's wanted and going forward Paul's look the talked I past. opportunities. all the that looked all

paying One are and they of them, we XX. Band be have moved we'll deploying forward -- on us

other The future, them could not not with the moment. are yet. but potentially moved forward have we We at moving one, this in forward with we

high-grading retailer in at the we're as that projects looking there's to global project Rebecca that very going. opportunities of that's ones for we we're where remarks, about.So with ahead government -- us. long-term very company substantial. think overall. the talking instead all the was we of these -- And service But focused commented We're Jay the about to had prepared on lots greatest about opportunities excited talked we've then again, then like have very and defer things We the potential the her have like there's

then final guidance. to relates just question And Okay. the

license you've and So guidance low variance in And would be revenues the gave? spectrum the that of of revenue end the would what any between indicated? range that contemplated you high major -- causes end of

other impact though could That in to things make included. here months, is somewhat answer early. could today, transactions the the as we solidify sit yes right, expect difference. we're still to But obviously the piece, are revenues The a that terrestrial coming we

So as right? a year, that or of like don't lot have quarters right? And variability range. much, did and as guide the part of as move last transactions, range just tighten is timing the deals have a so we amounts. mean, and lot into particular we'll Others, new towards we're a some the and we appropriate about the guide we of that, talking -- towards the around which of certainty we I

the Sutton Your Craig-Hallum. from next George question comes line of from

done on more I'm with certain curious retailer you've footprint? mentioned has that of move substantially be what working things the them you're obviously Fulfillment Micro kinds Your broader that much a need to retailer Centers, deal facilities. to to

Yes.

There's a of there's far to George, as of there's development focused minds their they're they work. I But confident of very we're is need And several couple So service mean, internal that our on some the issues. product. and things. get then I kind process on -- nothing our things reliability really concerned, as that in some through about think

see it get far. the for more are encouraging it. work I signs and think they But so comfortable need again, longer just to with all

they solution of call, XX. So and talked up on if Qualcomm several take any of we updates to times market inclusive give that has a months had progress come Can on a about you there's there? Band the us ago creating would Qualcomm couple

progress I lot and there. a a trying push still of lot -- -- end, really not in company as the relatively can. a of mean, companies. working It's with are large definitely things as to you we're there's we But obviously small we're we're as guys Yes, impatient fast

them it's And supportive. So been they've very very, constantly. keep we and pushing progress,

progress, keep definitely So driving. and we'll

you what a lastly, Can be then think. that OTA megahertz testing you XX which And perfect X means? Understand. I you geeky gets Kyle, question, explain using just gains. Xx to would for,

the confused the get the So actually the way you all and all capacity we're and as system But it see system but the for that full people time, of is to that engineers, works we I the the you an way works, aren't. effectively is area. that often Jay allowing can tell radios in

therefore overlapping lot not as density, signal-to-noise you -- a noise, of of the times, add your then in is so add cells and you're lot increasing ratio. radios, And and the when a a increasing of you're you density other times, of capacity so function situations,

the is saying And XX so it channel as you're kind that megahertz of can what effectively, of capacity the linear in you and all RRUs. not capacity RRUs but getting And you're see, what the they're multiple the is. that of certainly all, all that's with gain adding that RRUs, you're getting basically

a answer. was That very geeky

Your the next of line Jeffrey question comes from Goodfellow.

the just wants next on of rulemaking here. to spectrum Jeff And if I'm areas. comments second One Goodfellow request the who Jay, SpaceX, some -- with for thoughts wondering X that. Thank I share provider, for get launch could petition with you. apparently is Globalstar's your no, some constellation colorful go companies. we'll by along other people,

and a Jeff, of it And the we daily. service there's always of today offer millions at process FCC. now that And in life-saving this the going millions globally. provides hands is services users on

we we'll the little with with FCC. where going at our the and the They there. in we And and background of So services saving today very that that, extremely lives. comfortable very, partner the always we what with help, we're doing are for and FCC. know satellites, But flying be providing comfortable that's And do that, to MSS a are there's decades continue working that help operated their fact relationship. in knows the noise we've is

we expect with. don't that we changes So the any to regime live

comes Your the Charles next Morris from line from Greenhouse. question of

as that going -- infer relatively were the Wholesale What year-on-year. capacity about we should I what forward? growth to is services flat look

Yes. the question, Thanks for Charles.

first out-of-period $X.X million that nonrecurring half disclosed nature. have the included before in So was we about quarter of revenue, of 'XX

where a in bit. as to into variability remarks you if the quite But a that, as play we're lot I that comes revenue. my for So far up adjust of that's referred

million? wholesale And on capacity that that services, $X was

Yes.

the line comes from & from Oliver. question Beck Lyman of Mack next Delano Your

the was FCC March. authority your license related of question down application was SpaceX's My the that at turned band by to for of decline end in L&S the

So about that love relationship. it again months heard And up But either report Mexico. But afterwards auction is to I addressed if elaborate. just it or more minutes whether -- were you ago. couple just you likely continue you would and rumor you lobby Jay, line that was FCC. your your that a Mexican question small government you support going back the of someone as confident to L&S putting -- was band to said that, a I will could that.And for any one and to some for about a elaborate could I back up related wonder reiterate then the could SpaceX if wondering I in you and haven't if

on you, gone sense reasons. another the can the for detail is FCC effectively are let's for time we're and long, Lyman, of And the give one second party for Barbee things But them. the participate point the right periods question on of middle do That's, forever. we would at process time that process. of said, only I the of with on a Barbee take we'll things. for the at check continuing on as to in around more one you.On in probably course, are there the auger people long will lot that moves FCC But hang that or about and and number a ever that nothing likely that that when some It make first. one is to in,

have services we talked fly the the we us of it's done it for they'll to life-saving they've with we've decades, just permit continue stuff we're operate -- what it. for in the that as to Globalstar XX,XXX that to of we been FCC expand millions to wholesale the years FCC and lives. to And there that us our in but and us So about do I I that feet last path provide background, down. need provided And I very when recognize give has decades. from government that that's it's services, in which the arrangement the dissuade save go it we that. about. thrust on us think that And the then wouldn't that going as the room is be think did to now I don't for always be troubled to are and and thing wouldn't service, users comfortable we up just to a given let services now can we the look will doing our satellites order again, the with continue

ladies today's call. at for questions and concludes time.Thank participating. further No this This gentlemen, you,

may You disconnect. now