Globalstar reiterates 2025 revenue target of $260M-$285M while accelerating IoT and XCOM RAN growth

Earnings Call Insights: Globalstar, Inc. (GSAT) Q3 2025

MANAGEMENT VIEW

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Rebecca Clary, CFO, reported "solid top line performance in the third quarter with total revenue of $73.8 million," highlighting this as a record quarterly amount. She attributed the improvement to "wholesale capacity services, and continued strength in Commercial IoT." Equipment revenue from Commercial IoT device sales was up 60% compared to the prior year's third quarter, with momentum expected to continue, especially following the launch of the two-way module.

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Clary stated, "Income from operations was $10.2 million in the quarter, up from $9.4 million in the prior year's third quarter," but noted net income was lower due to noncash items including higher interest expenses and foreign currency losses.

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Adjusted EBITDA margin was reported at 51% for the quarter and 52% year-to-date, even as investments were made in XCOM and next-generation products. "We continue to maintain healthy adjusted EBITDA margins... even while making substantial investments in XCOM and next-generation products."

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Clary emphasized strong cash flow: "We ended the third quarter with cash and cash equivalents of $346.3 million." Adjusted free cash flow for the nine-month period reached $133.3 million, up from $74.5 million in the prior year period.

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Paul Jacobs, CEO, stated, "Across every major part of our business, we're executing our strategy and delivering measurable progress that strengthens our position in the market." Jacobs described the company as being at a "strategic inflection point that could shape or reshape the future of a rapidly converging communications industry."

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Jacobs highlighted infrastructure expansion, noting "up to 90 new tracking antennas supporting Globalstar's C-3 satellite system" are being installed globally. He also announced the global availability of the two-way Commercial IoT module, the RM200M, now certified for worldwide deployment.

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On XCOM RAN, Jacobs noted, "During the quarter, we received an initial order from a new XCOM RAN customer," and stated the technology is positioned for growth in warehouse automation and other large area applications.

OUTLOOK

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Clary reiterated, "we are reiterating our full year 2025 outlook and continue to expect revenue in the range of $260 million to $285 million and an adjusted EBITDA margin of approximately 50%." No changes to guidance were mentioned from the previous quarter.

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Jacobs signaled continued focus on execution: "As we look to the close of the year, our focus remains on execution, including completing key infrastructure milestones, expanding enterprise and government deployments and continuing to drive adoption of our new technologies."

FINANCIAL RESULTS

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Total revenue for Q3 was $73.8 million. Equipment revenue from Commercial IoT device sales increased 60% year-over-year, driven by record activations and the rollout of the two-way module.

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Income from operations reached $10.2 million, up from $9.4 million in the prior year's quarter. Cash and cash equivalents were $346.3 million at quarter-end, while adjusted free cash flow for the first nine months was $133.3 million.

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Capital expenditures for the period were $485.9 million, primarily for network expansion and satellite construction. Total debt principal outstanding was $418.7 million as of September 30, 2025.

Q&A

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Michael Crawford, B. Riley Securities: Asked about the compatibility of ground segment improvements for both existing and new constellations. Paul Jacobs responded that "we put in antennas that are specific for the... C-3 system," and confirmed both existing and new systems are being supported.

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Crawford inquired about launch timing for replacement satellites. Jacobs stated, "We have not given any new indications on when the launches are going to occur," while Clary added they are working with SpaceX to confirm an updated launch window in the first half of 2026.

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Crawford requested clarification on spectrum holdings. Jacobs replied, "On the S-band, we have 16.5 megahertz. On the L-band, we have almost 9. On the C-band, we have over 300 megahertz."

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Crawford followed up about XCOM RAN performance versus industrial Wi-Fi. Jacobs stated, "It works much better than industrial Wi-Fi... In terms of performance benefits, it's dramatically better."

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Gregory R. Pendy: Asked about IoT acceleration and market share gains. Jacobs said growth is driven by both "taking share" and "new applications," with two-way system growth still in early stages.

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Pendy also inquired about wholesale growth. Jacobs replied, "the number of devices that are out there is just talking about the growth of the number of devices that actually have the satellite modem and radio capabilities in it."

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Logan W Lillehaug, Craig-Hallum Capital: Asked about XCOM RAN profitability. Jacobs explained, "the margins are good in that business... we expect to see growth not just from the existing customer... but from a new set of customers."

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Lillehaug also probed on early traction for the two-way module. Jacobs stated, "there was a set of customers that weren't very interested... when we were only one way, and now... we'll take share in a number of markets with the two-way system."

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Michael Ridgeway, Robertson Stephens: Asked about XCOM RAN's revenue model. Jacobs described an annuity component from software licensing and future Network as a Service opportunities.

SENTIMENT ANALYSIS

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Analysts raised questions on timing, adoption, and profitability, with a generally neutral tone, focused on details and strategy rather than skepticism. Questions centered on guidance, technology differentiation, and revenue drivers.

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Management maintained a confident and optimistic stance during remarks and Q&A, with Jacobs describing the period as a "strategic inflection point" and highlighting the company's "critical jigsaw pieces" for industry convergence. Clary emphasized continued confidence in guidance and financial health.

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Compared to the previous quarter, management's confidence remained steady, with slightly more focus on commercialization milestones, while analysts remained pragmatic and detail-oriented without expressing notable skepticism or concern.

QUARTER-OVER-QUARTER COMPARISON

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Guidance for 2025 revenue and adjusted EBITDA margin was reiterated at $260 million to $285 million and approximately 50%, unchanged from Q2.

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Infrastructure investments, equipment revenue growth, and the ramp of XCOM RAN and two-way IoT modules remained key focal points, with greater emphasis on commercial adoption and government engagement in Q3.

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Analysts in both quarters focused on technology differentiation, commercialization timing, and spectrum advantage. Management's tone was consistently confident; however, this quarter included more specifics on record revenue, device sales, and infrastructure build-out progress.

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No major shift in strategic priorities, but more concrete milestones were discussed, such as the global release of the RM200M module and initial XCOM RAN commercial orders.

RISKS AND CONCERNS

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Clary noted that net income was lower due to "higher interest expense from noncash imputed interest related to the 2024 prepayment agreement" and "net foreign currency losses."

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Ongoing investments in XCOM and next-generation products are currently impacting profitability, though management framed these as necessary for long-term growth.

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Management did not address media speculation regarding potential strategic transactions, with Jacobs stating, "we do not comment on press articles, rumors or market speculation."

FINAL TAKEAWAY

Globalstar management reiterated confidence in the company’s trajectory, underscoring record-setting revenue growth, robust IoT and equipment sales, and the successful rollout of new technologies like the two-way RM200M module and XCOM RAN. With strong liquidity, expanding infrastructure, and a diversified product pipeline, the company remains focused on executing its strategy and delivering on its 2025 financial targets while positioning itself as a critical player in the converging satellite and terrestrial connectivity landscape.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/gsat/earnings/transcripts]

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