10-QPeriod: Q3 FY2023

Globalstar, Inc. Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 2, 2023For Securities:GSAT

Summary

Globalstar, Inc. reported a significant increase in total revenue for the nine months ended September 30, 2023, reaching $171.4 million, a 60% jump from $107.2 million in the prior year period. This growth was primarily driven by a substantial increase in wholesale capacity services revenue, largely attributable to the Service Agreements initiated in November 2022. Service revenue constitutes the majority of total revenue, accounting for 91% in the nine-month period. Despite the strong revenue growth, the company's profitability remains a concern, as it continued to report net losses, though the net loss for the nine months ended September 30, 2023, narrowed considerably to $9.6 million from $251.6 million in the same period last year. This improvement in net loss is a positive signal, but sustained profitability will be key. The company's balance sheet shows an increase in cash and cash equivalents to $64.1 million from $32.1 million, supported by increased operating cash flows and new financing arrangements. However, long-term debt also rose significantly due to new note issuances and funding agreements.

Financial Highlights

40 data points
Beta

Revenue

$57.68M

Net Income

-$6.17M

-10.7% Net Margin

EPS (Diluted)

$0.00

Total Assets

$910.61M

Cash & Equivalents

$64.14M

Free Cash Flow

$25.56M

Financial Statements
Beta
Revenue$57.68M
SG&A Expenses$12.09M
Operating Expenses$55.67M
Operating Income$2.02M
Net Income-$6.17M
Shares Outstanding (Basic)122.42M
Shares Outstanding (Diluted)122.42M

Key Highlights

  • 1Total revenue increased by 60% year-over-year for the nine months ended September 30, 2023, reaching $171.4 million.
  • 2Wholesale capacity services revenue surged, driven by the Service Agreements, contributing 49% of total revenue for the nine-month period.
  • 3Net loss narrowed significantly to $9.6 million for the nine months ended September 30, 2023, compared to $251.6 million in the prior year period.
  • 4Cash and cash equivalents increased to $64.1 million as of September 30, 2023, up from $32.1 million at the end of 2022.
  • 5Long-term debt and vendor financing increased to $375.4 million from $202.8 million, primarily due to the issuance of the 2023 13% Notes and new funding agreements.
  • 6The company completed an Intellectual Property License Agreement with XCOM Labs in August 2023, including the acquisition of intellectual property and the appointment of Dr. Paul E. Jacobs as CEO.
  • 7Operating expenses decreased year-over-year for both the three and nine month periods, primarily due to the absence of a large reduction in the value of long-lived assets seen in the prior year.

Frequently Asked Questions

Globalstar's revenue has been significantly boosted by its wholesale capacity services, which saw a substantial increase due to the Service Agreements initiated in November 2022. These agreements, particularly with a major partner, have driven growth in this segment, which now represents a significant portion of the company's overall revenue.

While Globalstar has not yet achieved profitability, its net loss has narrowed considerably. For the nine months ended September 30, 2023, the net loss was $9.6 million, a significant improvement compared to the $251.6 million loss reported in the same period of 2022. This suggests a positive trend towards reduced losses, driven by increased revenue and improved cost management.

The acquisition of intellectual property from XCOM Labs in August 2023 involved the issuance of Globalstar common stock valued at approximately $70.4 million. This transaction also led to the recognition of goodwill of $30.6 million and intangible assets of $27.9 million. While it represents a strategic investment, its full financial impact will unfold as the company integrates the acquired technologies and leverages new leadership.

Globalstar's total debt and vendor financing has increased significantly, rising from $202.8 million at the end of 2022 to $375.4 million as of September 30, 2023. This increase is primarily due to the issuance of $200 million in 13% Senior Notes in March 2023, and new funding agreements like the 2023 Funding Agreement. While this new financing provides liquidity, it also increases the company's leverage and future interest obligations.