- Record annual revenue of $224 million, a year-over-year
increase of over 50%
- Recent operational achievements include:
- Receiving an order from a major retailer for multiple XCOM RAN
systems
- Generating revenue from a Band 53 deployment opportunity
through Nokia
- Executing a new government services contract
- Remaining on track for launch of new satellites in 2025
- Increased operating cash flows allow for investment in key
initiatives, such as XCOM technology commercialization, product
development and wholesale capacity utilization
Globalstar, Inc. (NYSE American: GSAT) today announced its
operating and financial results for the fourth quarter and year
ended December 31, 2023.
“Globalstar had a record year measured by several key
performance indicators, led by total revenue of $224 million, an
increase of over 50% from 2022. Revenue growth was driven primarily
by increases in wholesale capacity services and Commercial IoT.
Given the high margin nature of our revenue sources, operating
income and Adjusted EBITDA also improved significantly during
2023,” said Rebecca Clary, Chief Financial Officer. Clary
continued, “Today, we are issuing guidance for the full year 2024.
This guidance includes a revenue increase resulting from our recent
operational achievements and other expected growth in the
business.”
Dr. Paul E. Jacobs, Chief Executive Officer, said, “2023 was a
record year for Globalstar because we successfully executed our
business plan. Our execution and improved financial performance
have enabled us to fund our growth initiatives. We are working on
new products, services and solutions with significant revenue
opportunities across our four pillars of value: wholesale capacity,
legacy, IoT and terrestrial wireless solutions. With our recent
operational achievements, we are gaining traction on a number of
these initiatives from contracting with a government services
company to executing a new terrestrial spectrum agreement and
receiving the first commercial order from a major US retailer for
multiple XCOM RAN wireless systems. We have momentum and are
excited about the year ahead.”
OPERATIONAL HIGHLIGHTS
Terrestrial Spectrum Agreement
In 2023, we supported another deployment opportunity for our
Band 53 spectrum with Nokia. The end user for this multi-year
deployment is paying to reserve the spectrum in their operating
area prior to their planned build-out due to the critical nature of
their operations and the scarcity of licensed spectrum. This
agreement is expected to convert into a long-term lease
arrangement.
Network Services Agreement
Today, we are also excited to announce that we have executed an
agreement with a government services company to utilize our
satellite network for a mission critical service for government
applications. This agreement has been over five years in the making
and leverages our constellation in new and innovative ways. After a
one-year $2.5 million proof of concept phase that commenced in
February 2024, this agreement has a five-year term and, if the
project is implemented, contains annual minimum revenue commitments
escalating to $20 million during the fifth year, with potential for
significant upside through the agreement's revenue share
arrangement.
XCOM RAN System Deployment
We have received the first customer order for delivery of
multiple XCOM RAN systems to support warehouse automation for a
major U.S. retailer, validating the critical importance of the XCOM
wireless 5G technology in demanding environments. Beginning with
this initial $1.5 million customer order, this opportunity has the
potential for material commercial scale. Licensed by Globalstar in
2023, the XCOM technology enhances wireless performance, including
spectral efficiency, and expands our ability to develop commercial
applications utilizing Band 53.
FOURTH QUARTER FINANCIAL REVIEW
Total Revenue
Total revenue increased $11.1 million, or 27%, to $52.4 million
during the fourth quarter of 2023 compared to the fourth quarter of
2022 due to higher service revenue.
Service Revenue
Service revenue increased $12.6 million, or 35%, during the
fourth quarter of 2023 due primarily to higher wholesale capacity
service revenue. Wholesale capacity service revenue increased $13.4
million, or over 100%, due in large part to the launch of certain
of these services in the middle of the prior year's fourth
quarter.
We also recognized $0.6 million during the fourth quarter of
2023 associated with our spectrum manager lease agreement with
Nokia. This revenue represents an annual reservation fee in
anticipation of a long-term deployment of a Band 53 network.
With regards to our subscriber services, Commercial IoT service
revenue increased 17% due to growth in both subscribers and ARPU.
We have experienced steady growth in Commercial IoT subscribers,
with gross subscriber activations up 8% over the last twelve
months. The ARPU increase was due to the mix of subscriber rate
plans resulting from more customers selecting unlimited plans
coupled with higher usage on the network.
Service revenue associated with legacy services was down 11%
from the prior year's fourth quarter due to fewer subscribers. SPOT
subscribers were lower due to inventory shortages and back orders
during 2022 and the first part of 2023, which negatively impacted
both equipment sales and gross activations. SPOT gross activations
were up nearly 18% during the fourth quarter of 2023 compared to
the same period in 2022.
Subscriber Equipment Sales
Revenue generated from subscriber equipment sales decreased 30%
in the fourth quarter of 2023 compared to the fourth quarter of
2022. This decrease was due to a lower volume of Commercial IoT
equipment as the fourth quarter of 2022 was the first full quarter
we were producing equipment in normal course for these products,
resulting in a large backlog of equipment orders fulfilled during
this period.
Consistent with the growth in SPOT subscriber activations, we
also experienced an increase in the volume of equipment sales
during the fourth quarter as sales volume increased over 90% from
the fourth quarter of 2022. All SPOT products are now being
manufactured in the ordinary course of business.
Loss from Operations
Loss from operations increased 29%, or $2.7 million, during the
fourth quarter of 2023 compared to the prior year's quarter. Loss
from operations was burdened by higher operating expenses,
including primarily stock-based compensation, cost of services and
marketing, general and administrative (MG&A) expenses. Higher
revenue (for the reasons previously discussed) partially offset the
increase in expense.
Stock-based compensation increased from the prior year's fourth
quarter due primarily to restricted stock units granted in
connection with the XCOM License Agreement.
Cost of services increased as a result of higher gateway
operating costs, such as lease, maintenance, security, IT and
personnel expenses, which have increased in line with our new and
upgraded global ground infrastructure. A significant portion of
these costs are reimbursed to us and this consideration is
recognized as revenue when earned. Cost of services also increased
due to non-cash costs associated with the Support Services
Agreement (the “SSA”) we entered into in August 2023 in connection
with the XCOM License Agreement.
MG&A costs were higher during the fourth quarter of 2023 due
to expenses associated with the SSA, legal and professional fees to
support regulatory work, government relations and negotiations of
new commercial arrangements as well as higher personnel costs
following the hiring of certain XCOM executives.
Net Loss
Net loss was $15.1 million for the fourth quarter of 2023
compared to $5.3 million for the fourth quarter of 2022. In
addition to the items discussed above, net loss was also impacted
by a gain on extinguishment of debt recorded in the prior year that
did not recur, higher income tax expense, unfavorable changes in
exchange rates, and a loss on equity issuance associated with
warrants issued during the fourth quarter of 2023, offset partially
by lower interest expense.
Adjusted EBITDA
Adjusted EBITDA increased 37% to $25.1 million for the fourth
quarter of 2023 from $18.3 million for the same period in 2022.
Higher revenue of $11.4 million was offset partially by a $4.6
million increase in operating expenses (both excluding adjustments
for non-cash or non-recurring items).
ANNUAL FINANCIAL REVIEW
Total Revenue
During the twelve months ended December 31, 2023, total revenue
increased $75.3 million, or 51%, to $223.8 million from $148.5
million in 2022. The increase in total revenue was driven by higher
service revenue of $72.1 million as well as higher revenue
generated from subscriber equipment sales of $3.2 million.
Service Revenue
The improvement in service revenue during 2023 was due primarily
to wholesale capacity services, which increased $74.2 million year
over year. Revenue from wholesale capacity services increased in
2023 following the launch of services in November 2022.
Consideration under this agreement includes network-related service
fees, continued performance associated with the construction of
additional satellites, gateway site improvements and the
achievement of other certain milestones. In connection with the
amendment of the Service Agreements in early 2023, we recognized
nonrecurring revenue totaling $6.5 million related to performance
obligations completed in prior periods.
Also contributing to the increase in service revenue year over
year was higher Commercial IoT service revenue of $3.4 million, or
17%, due to increases in average subscribers and ARPU.
Subscriber Equipment Sales
Revenue generated from subscriber equipment sales increased 19%
during 2023, due to higher sales volume of Commercial IoT and SPOT
products of 17% and 77%, respectively. We expect an increase in
gross subscriber additions as these units are activated on the
network.
Loss from Operations
Loss from operations improved to $0.2 million during 2023
compared to $221.0 million during 2022 due to non-cash impairment
charges recorded in 2022. Excluding these non-cash charges, loss
from operations improved due to higher revenue offset partially by
higher operating expenses.
Increases in cost of services, stock-based compensation,
MG&A and cost of subscriber equipment were offset slightly by a
reduction in depreciation, amortization and accretion. The drivers
of the increases in cost of services and MG&A are in line with
the items discussed in the quarterly section above. Stock-based
compensation was higher due to the items discussed above as well as
the modification of certain awards. Cost of subscriber equipment
sales were higher consistent with the increase in revenue generated
from subscriber equipment sales, with margins narrowing slightly
due to the mix of products sold in each respective year.
Net Loss
Net loss was $24.7 million for 2023 compared to $256.9 million
for 2022. This variance was due primarily to an improvement in loss
from operations (discussed above), coupled with lower interest
expense and a favorable fluctuation in foreign currency exchange
rates. Interest expense was lower during 2023 due to the payoff of
the 2019 Facility Agreement during the first quarter of 2023, as
well as higher capitalized interest (which reduces interest
expense) due to an increase in capital expenditures as we complete
work related to our new satellites. Favorable fluctuations in
exchange rates also improved net loss during 2023. Offsetting these
favorable items was a loss on extinguishment of debt following the
payoff of the 2019 Facility Agreement in the first quarter of 2023
as well as a loss on equity issuance resulting from warrants issued
during the fourth quarter of 2023.
Adjusted EBITDA
Adjusted EBITDA increased $59.3 million, or 103%, to $116.7
million in 2023 due to a $75.3 million increase in total revenue
(for reasons previously discussed) offset partially by a $16.0
million increase in operating expenses (both excluding adjustments
for non-cash or non-recurring items).
Liquidity
Cash and cash equivalents were $56.7 million as of December 31,
2023 compared to $32.1 million as of December 31, 2022. During
2023, net cash flows generated from operations of $74.3 million and
net cash flows from financing activities of $125.8 million were
used to fund capital expenditures of $175.6 million.
Operating cash flows include cash receipts from the performance
of wholesale capacity services as well as cash received from
subscribers related to the purchase of equipment and satellite
voice and data services. We use cash in operating activities
primarily for network costs, personnel costs, inventory purchases
and other general corporate expenditures. Investing outflows
largely relate to network upgrades associated with the Service
Agreements, including milestone work under the satellite
procurement agreement with MDA and the launch services agreement
with SpaceX. Financing inflows related to proceeds from the 2023
Funding Agreement as well as the issuance of the 13% Notes. We used
proceeds from the issuance of the 13% Notes to pay down the
remaining principal amount of the 2019 Facility Agreement.
During 2024, our sources of cash are also expected to include
operating cash flows generated from the business and proceeds under
the 2023 Funding Agreement. These sources of cash will be used to
pay capital expenditures associated with the new satellites as well
as debt service costs.
The total principal amount of our debt was $398.7 million at
December 31, 2023, compared to a total outstanding amount of debt
and vendor financing of $202.8 million at December 31, 2022. This
increase is due to previously-disclosed changes in our capital
structure, including proceeds under the 2023 Funding Agreement,
changes in the classification of the 2021 Funding Agreement and
issuance of the 13% Notes, offset by the payoff of the 2019
Facility Agreement and vendor financing amounts.
FINANCIAL OUTLOOK
Our financial outlook for 2024 is:
- Total revenue between $225 million and $250 million
- Adjusted EBITDA margin of approximately 50%
CONFERENCE CALL INFORMATION
The Company will host a conference call to discuss its results
at 9:00 a.m. Eastern Time (ET) on Wednesday, February 28, 2024.
Details are as follows:
Earnings Call:
The earnings call will be available via
webcast from the following link.
Webcast Link:
https://edge.media-server.com/mmc/p/wmykc7an
To participate in the earnings call via
teleconference or to participate in the live Q&A session,
participants should register at the following link to receive an
email containing the dial-in number and unique passcode.
Participant Teleconference Registration
Link:
https://register.vevent.com/register/BI4278f818741f4629a5509ede176b0a4d
Audio Replay:
For those unable to participate in the
live call, a replay of the webcast will be available in the
Investor Relations section of the Company's website.
About Globalstar, Inc.
Globalstar empowers its customers to connect, transmit, and
communicate in smarter ways – easily, quickly, securely, and
affordably – offering reliable satellite and terrestrial
connectivity services as an international telecom infrastructure
provider. The Company’s LEO satellite constellation assures secure
data transmission for connecting and protecting assets,
transmitting critical operational data, and saving lives for
consumers, businesses, and government agencies across the globe.
Globalstar’s terrestrial spectrum, Band 53, and its 5G variant,
n53, offers carriers, cable companies, and system integrators a
versatile, fully licensed channel for private networks with a
growing ecosystem to improve customer wireless connectivity, while
Globalstar’s XCOM RAN product offers significant capacity gains in
dense wireless deployments. In addition to SPOT GPS messengers,
Globalstar offers next-generation IoT hardware and software
products for efficiently tracking and monitoring assets, processing
smart data at the edge, and managing analytics with cloud-based
telematics solutions to drive safety, productivity, and
profitability.
Note that all SPOT products described in this press release are
the products of SPOT LLC, which is not affiliated in any manner
with Spot Image of Toulouse, France or Spot Image Corporation of
Chantilly, Virginia.
For more information, visit www.globalstar.com.
Safe Harbor Language for Globalstar Releases
This press release contains certain statements that are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations and assumptions that
are subject to risks and uncertainties which may cause actual
results to differ materially from the forward-looking statements.
Forward-looking statements, such as the statements regarding our
ability to identify and realize opportunities and to generate the
expected revenues and other benefits of the XCOM license agreement,
our ability to integrate the licensed technology into our current
line of business, the ability of Dr. Jacobs and other new employees
to drive innovation and growth, our expectations with respect to
the pursuit of terrestrial spectrum authorities globally, the
success of current and potential future applications for our
terrestrial spectrum, future increases in our revenue and
profitability, our ability to meet our obligations under, and
profit from, the Service Agreements, and other statements contained
in this release regarding matters that are not historical facts,
involve predictions. Any forward-looking statements made in this
press release are believed to be accurate as of the date made and
are not guarantees of future performance. Actual results or
developments may differ materially from the expectations expressed
or implied in the forward-looking statements, and we undertake no
obligation to update any such statements. Additional information on
factors that could influence our financial results is included in
our filings with the Securities and Exchange Commission, including
our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K.
GLOBALSTAR, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share
data)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
Revenue:
Service revenue
$
48,951
$
36,375
$
204,196
$
132,068
Subscriber equipment sales
3,458
4,931
19,612
16,436
Total revenue
52,409
41,306
223,808
148,504
Operating expenses:
Cost of services (exclusive of
depreciation, amortization and accretion shown separately
below)
15,561
10,587
53,499
43,370
Cost of subscriber equipment sales
2,544
3,944
15,973
13,097
Cost of subscriber equipment sales -
reduction in the value of inventory
—
—
—
8,553
Marketing, general and administrative
11,615
8,182
43,458
33,349
Stock-based compensation
11,851
6,180
22,489
10,754
Reduction in the value of long-lived
assets
328
—
363
166,526
Depreciation, amortization and
accretion
22,503
21,733
88,191
93,884
Total operating expenses
64,402
50,626
223,973
369,533
Loss from operations
(11,993
)
(9,320
)
(165
)
(221,029
)
Other (expense) income:
Gain (loss) on extinguishment of debt
—
2,790
(10,403
)
2,790
Loss on equity issuance
(5,010
)
—
(5,010
)
—
Interest income and expense, net of
amounts capitalized
(3,562
)
(5,868
)
(14,609
)
(30,168
)
Foreign currency gain (loss)
5,068
6,705
4,862
(6,592
)
Derivative gain (loss) and other
1,357
380
1,730
(1,843
)
Total other (expense) income
(2,147
)
4,007
(23,430
)
(35,813
)
Loss before income taxes
(14,140
)
(5,313
)
(23,595
)
(256,842
)
Income tax expense
938
22
1,123
73
Net loss
$
(15,078
)
$
(5,335
)
$
(24,718
)
$
(256,915
)
Net loss attributable to common
shareholders
$
(17,751
)
$
(6,672
)
$
(35,323
)
$
(258,252
)
Loss per common share:
Basic
$
(0.01
)
$
0.00
$
(0.02
)
$
(0.14
)
Diluted
$
(0.01
)
$
0.00
(0.02
)
(0.14
)
Weighted-average shares outstanding:
Basic
1,877,806
1,805,162
1,835,005
1,800,825
Diluted
1,877,806
1,805,162
1,835,005
1,800,825
GLOBALSTAR, INC.
CONSOLIDATED BALANCE
SHEETS
(In thousands, except par value
and share data)
(unaudited)
December 31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
56,744
$
32,082
Accounts receivable, net of allowance for
credit losses of $2,312 and $2,892, respectively
48,743
26,329
Inventory
14,582
9,264
Prepaid expenses and other current
assets
22,584
13,569
Total current assets
142,653
81,244
Property and equipment, net
624,002
560,371
Operating lease right of use assets,
net
34,164
30,859
Prepaid satellite costs and customer
receivable
12,443
27,570
Intangible and other assets, net of
accumulated amortization of $12,385 and $10,908, respectively
111,047
38,425
Total assets
$
924,309
$
738,469
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Current portion of long-term debt
$
34,600
$
—
Accounts payable
2,027
3,843
Vendor financing
—
59,575
Accrued expenses
26,958
22,554
Accrued satellite construction costs
58,187
36,139
Payables to affiliates
459
326
Deferred revenue, net
53,677
74,639
Total current liabilities
175,908
197,076
Long-term debt
325,700
132,115
Operating lease liabilities
29,244
27,635
Deferred revenue, net
3,213
62,877
Other non-current liabilities
11,265
3,995
Total non-current liabilities
369,422
226,622
Stockholders’ equity:
Preferred Stock of $0.0001 par value;
99,700,000 shares authorized and none issued and outstanding at
December 31, 2023 and 2022, respectively
—
—
Series A Perpetual Preferred Stock of
$0.0001 par value; 300,000 shares authorized and 149,425 issued and
outstanding at December 31, 2023 and December 31, 2022,
respectively
—
—
Voting Common Stock of $0.0001 par value;
2,150,000,000 shares authorized; 1,881,194,682 and 1,811,074,696
shares issued and outstanding at December 31, 2023 and 2022,
respectively
188
181
Additional paid-in capital
2,438,703
2,345,612
Accumulated other comprehensive income
5,070
9,242
Retained deficit
(2,064,982
)
(2,040,264
)
Total stockholders’ equity
378,979
314,771
Total liabilities and stockholders’
equity
$
924,309
$
738,469
GLOBALSTAR, INC.
RECONCILIATION OF GAAP NET
INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA
(In thousands)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
Net loss
$
(15,078
)
$
(5,335
)
$
(24,718
)
$
(256,915
)
Interest income and expense, net
3,562
5,868
14,609
30,168
Derivative (gain) loss
(1,345
)
(261
)
(1,588
)
805
Income tax expense
938
22
1,123
73
Depreciation, amortization, and
accretion
22,503
21,733
88,191
93,884
EBITDA
10,580
22,027
77,617
(131,985
)
Non-cash compensation
11,851
6,180
22,489
10,754
Non-cash consideration under SSA (2)
2,178
—
3,070
—
Foreign exchange and other
(5,080
)
(7,116
)
(5,314
)
5,837
Reduction in value of inventory and
long-lived assets
328
—
363
175,079
License Agreement transaction costs
228
—
3,079
—
Loss on equity issuance
5,010
—
5,010
—
Loss on extinguishment of debt
—
(2,790
)
10,403
(2,790
)
Non-cash settlement of pension plan
—
—
—
1,501
Shareholder litigation cost recovery
—
—
—
(1,000
)
Adjusted EBITDA (1)
$
25,095
$
18,301
$
116,717
$
57,396
(1)
EBITDA represents earnings before
interest, income taxes, depreciation, amortization, accretion and
derivative (gains)/losses. Adjusted EBITDA excludes non-cash
compensation expense, reduction in the value of assets, foreign
exchange (gains)/losses, and certain other non-cash or
non-recurring charges as applicable. Management uses Adjusted
EBITDA in order to manage the Company's business and to compare its
results more closely to the results of its peers. EBITDA and
Adjusted EBITDA do not represent and should not be considered as
alternatives to GAAP measurements, such as net income/(loss). These
terms, as defined by us, may not be comparable to similarly titled
measures used by other companies.
The Company uses Adjusted EBITDA
as a supplemental measurement of its operating performance. The
Company believes it best reflects changes across time in the
Company's performance, including the effects of pricing, cost
control and other operational decisions. The Company's management
uses Adjusted EBITDA for planning purposes, including the
preparation of its annual operating budget. The Company believes
that Adjusted EBITDA also is useful to investors because it is
frequently used by securities analysts, investors and other
interested parties in their evaluation of companies in similar
industries. As indicated, Adjusted EBITDA does not include interest
expense on borrowed money or depreciation expense on our capital
assets or the payment of income taxes, which are necessary elements
of the Company's operations. Because Adjusted EBITDA does not
account for these expenses, its utility as a measure of the
Company's operating performance has material limitations. Because
of these limitations, the Company's management does not view
Adjusted EBITDA in isolation and also uses other measurements, such
as revenues and operating profit, to measure operating
performance.
(2)
In connection with the License
Agreement with XCOM, the Company entered into a Support Services
Agreement (the “SSA”) with XCOM. Fees payable by Globalstar
pursuant to the SSA were paid in shares of its common stock.
GLOBALSTAR, INC.
SCHEDULE OF SELECTED OPERATING
METRICS
(In thousands, except subscriber
and ARPU data)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
Service
Equipment
Service
Equipment
Service
Equipment
Service
Equipment
Revenue
Subscriber
Duplex
$
5,844
$
—
$
7,119
$
—
$
25,932
$
—
$
29,222
$
—
SPOT
10,481
1,539
11,126
1,181
44,184
7,724
45,670
5,888
Commercial IoT
5,986
1,891
5,135
3,705
22,867
11,866
19,516
10,132
Wholesale capacity
25,661
—
12,273
—
109,067
—
34,913
—
Engineering and Other
979
29
722
45
2,146
22
2,747
416
$
48,951
$
3,459
$
36,375
$
4,931
$
204,196
$
19,612
$
132,068
$
16,436
Average Subscribers
Duplex
31,338
38,822
33,884
40,913
SPOT
254,464
271,658
260,141
272,088
Commercial IoT
492,143
454,805
481,859
442,060
Other
345
417
364
13,330
ARPU (1)
Duplex
$
62.16
$
61.13
$
63.78
$
59.52
SPOT
13.73
13.65
14.15
13.99
Commercial IoT
4.05
3.76
3.95
3.68
(1)
Average monthly revenue per user
(ARPU) measures service revenues per month divided by the average
number of subscribers during that month. Average monthly revenue
per user as so defined may not be similar to average monthly
revenue per unit as defined by other companies in the Company's
industry, is not a measurement under GAAP and should be considered
in addition to, but not as a substitute for, the information
contained in the Company's statement of operations. The Company
believes that average monthly revenue per user provides useful
information concerning the appeal of its rate plans and service
offerings and its performance in attracting and retaining high
value customers.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228230199/en/
Investor Contact Information: Email:
investorrelations@globalstar.com
Grafico Azioni Globalstar (AMEX:GSAT)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Globalstar (AMEX:GSAT)
Storico
Da Apr 2023 a Apr 2024
