Globalstar Announces First Quarter 2022 Results
Globalstar, Inc. (GSAT) reported its Q1 2022 results, showcasing a 22% increase in total revenue to $31.9 million, driven by a significant rise in service revenue and a 8% growth in Commercial IoT revenue. The company faced supply chain challenges, affecting subscriber equipment sales, which decreased by $0.4 million. Despite a net loss of $13.7 million, improved from $19.3 million in Q1 2021, adjusted EBITDA rose by 72% to $10.3 million. Globalstar aims to enhance its satellite capabilities and advance its Commercial IoT ecosystem amid ongoing procurements and deployments.
- Total revenue increased 22% year-over-year to $31.9 million.
- Commercial IoT revenue rose 8% despite component shortages.
- Adjusted EBITDA improved by 72% to $10.3 million.
- Net loss decreased from $19.3 million to $13.7 million.
- Strong demand for Commercial IoT products, with several thousand units on back-order.
- Subscriber equipment sales decreased by $0.4 million due to component shortages.
- The company experienced a decrease in Duplex service revenue due to subscriber attrition.
- SPOT equipment sales revenue declined by 23% due to inventory shortages.
We also made meaningful progress towards building our Commercial IoT ecosystem. We have multiple projects underway that will ultimately deliver more robust products that offer a best-in-class enablement suite and operate on upgraded gateway base stations. These deliverables provide the fundamentals that will allow us to effectively pursue sales opportunities with carriers, enterprises and large resellers. While we expect to expand materially with these new offerings, in the meantime, we have continued to grow our Commercial IoT revenue with existing products and functionality. Despite the headwinds caused by component part shortages, Commercial IoT revenue increased
Our other types of revenue rounded out nicely during the first quarter with SPOT subscribers continuing to increase on a YOY basis and engineering services generating significant revenue."
Our wholesale satellite capacity pillar with the potential customer continues to be a major focus for the Company. It should be clear to the market that we will continue to invest in and expand our satellite business for many decades and are motivated to put all of our satellite resources to use.
The Commercial IoT effort has been accelerated by building out the team who we expect to drive growth while building the foundation to take advantage of our new products and platform. The team’s strong relationships are already opening doors and keeping them open through partnerships and sales efforts. We are ready to offer customers high quality one-way services at a price point that makes their decisions easy. We are also involved with many potential customers designing two-way services for specific applications. Lastly, we are working with our module vendor partner to create solutions that work over both satellite and cellular, including Band 53, further expanding the use cases for IoT.
Terrestrial spectrum opportunities continue to mature. We have signed a term sheet with a large, global customer to begin deploying Band 53 in the US and beyond. This is a significant opportunity that will take time but signs point towards success; we will share more information when we are allowed. We are also active in several international opportunities in the mining, transportation and logistics sectors, any of which would be meaningful if concluded.
The terrestrial ecosystem also continues to develop with new radio vendors and end user products making it even easier for us to offer solutions to customers. Finally, we continue to pursue MSS and terrestrial regulatory approvals around the world to further add to the Company's potential."
FINANCIAL REVIEW
Revenue
Total Revenue
Total revenue for the first quarter of 2022 increased
Service Revenue
Higher service revenue of
Subscriber driven revenue was generally flat from the prior year's first quarter.
The decrease in Duplex service revenue was expected as we continue to see attrition in our subscriber base. Given the shift in demand across the industry from full voice and data services to IoT-enabled devices, we have decided to no longer support Duplex hardware sales given excess costs and the amount of capacity consumed by Duplex service.
SPOT service revenue increased, which was driven by higher average subscribers offset partially by lower ARPU. We continue to see gross subscriber activations increasing, including an
Commercial IoT service revenue increased driven by higher average subscribers. Gross subscriber activations increased nearly
Subscriber Equipment Sales
Subscriber equipment sales decreased
SPOT equipment sales revenue was down
Commercial IoT equipment sales revenue increased
Loss from Operations
Loss from operations was
Cost of services and MG&A were elevated partially due to nonrecurring personnel costs of
Net Loss
Net loss improved by
Adjusted EBITDA
Adjusted EBITDA was
Liquidity
As of
About
Note that all SPOT products described in this press release are the products of
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 expectations with respect to the pursuit of terrestrial spectrum authorities globally, future increases in our revenue and profitability, the impact on our business due to unexpected events such as the COVID-19 coronavirus, 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) |
|||||||
|
Three Months Ended |
||||||
|
|
||||||
|
2022 |
|
2021 |
||||
Revenue: |
|
|
|
||||
Service revenue |
$ |
29,344 |
|
|
$ |
23,086 |
|
Subscriber equipment sales |
|
3,428 |
|
|
|
3,843 |
|
Total revenue |
|
32,772 |
|
|
|
26,929 |
|
Operating expenses: |
|
|
|
||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) |
|
10,794 |
|
|
|
9,077 |
|
Cost of subscriber equipment sales |
|
2,566 |
|
|
|
2,899 |
|
Marketing, general and administrative |
|
9,341 |
|
|
|
10,097 |
|
Depreciation, amortization, and accretion |
|
23,783 |
|
|
|
24,116 |
|
Total operating expenses |
|
46,484 |
|
|
|
46,189 |
|
Loss from operations |
|
(13,712 |
) |
|
|
(19,260 |
) |
Other (expense) income: |
|
|
|
||||
Interest income and expense, net of amounts capitalized |
|
(9,530 |
) |
|
|
(11,574 |
) |
Derivative loss |
|
(486 |
) |
|
|
(1,129 |
) |
Foreign currency gain (loss) |
|
3,232 |
|
|
|
(4,315 |
) |
Other |
|
117 |
|
|
|
22 |
|
Total other (expense) income |
|
(6,667 |
) |
|
|
(16,996 |
) |
Loss before income taxes |
|
(20,379 |
) |
|
|
(36,256 |
) |
Income tax expense |
|
83 |
|
|
|
77 |
|
Net loss |
$ |
(20,462 |
) |
|
$ |
(36,333 |
) |
|
|
|
|
||||
Net loss per common share: |
|
|
|
||||
Basic |
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
Diluted |
|
(0.01 |
) |
|
|
(0.02 |
) |
Weighted-average shares outstanding: |
|
|
|
||||
Basic |
|
1,797,671 |
|
|
|
1,679,754 |
|
Diluted |
|
1,797,671 |
|
|
|
1,679,754 |
|
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA (In thousands) (Unaudited) |
|||||||||
|
|
|
Three Months Ended |
||||||
|
|
|
|
||||||
|
|
|
2022 |
|
2021 |
||||
Net loss |
|
$ |
(20,462 |
) |
|
$ |
(36,333 |
) |
|
|
|
|
|
|
|
||||
|
Interest income and expense, net |
|
|
9,530 |
|
|
|
11,574 |
|
|
Derivative loss |
|
|
486 |
|
|
|
1,129 |
|
|
Income tax expense |
|
|
83 |
|
|
|
77 |
|
|
Depreciation, amortization, and accretion |
|
|
23,783 |
|
|
|
24,116 |
|
EBITDA |
|
|
13,420 |
|
|
|
563 |
|
|
|
|
|
|
|
|
||||
|
Non-cash compensation |
|
|
1,233 |
|
|
|
1,137 |
|
|
Foreign exchange and other |
|
|
(3,349 |
) |
|
|
4,294 |
|
|
Shareholder litigation cost recovery |
|
|
(1,000 |
) |
|
|
— |
|
Adjusted EBITDA (1) |
|
$ |
10,304 |
|
|
$ |
5,994 |
|
(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 and inventory, foreign exchange (gains)/losses and certain other 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 revenue and operating profit, to measure operating performance. |
SCHEDULE OF SELECTED OPERATING METRICS (In thousands, except subscriber and ARPU data) (Unaudited) |
|||||||||||||
|
|
|
Three Months Ended |
||||||||||
|
|
|
|
||||||||||
|
|
|
2022 |
|
2021 |
||||||||
|
|
|
Service |
|
Equipment |
|
Service |
|
Equipment |
||||
Revenue |
|
|
|
|
|
|
|
|
|||||
|
Duplex |
|
$ |
6,146 |
|
$ |
130 |
|
$ |
6,655 |
|
$ |
293 |
|
SPOT |
|
|
11,255 |
|
|
1,475 |
|
|
10,984 |
|
|
1,915 |
|
Commercial IoT |
|
|
4,670 |
|
|
1,806 |
|
|
4,481 |
|
|
1,521 |
|
Engineering and other |
|
|
7,273 |
|
|
17 |
|
|
966 |
|
|
114 |
|
Total revenue |
|
$ |
29,344 |
|
$ |
3,428 |
|
$ |
23,086 |
|
$ |
3,843 |
|
|
|
|
|
|
|
|
|
|
||||
Average subscribers |
|
|
|
|
|
|
|
|
|||||
|
Duplex |
|
|
43,565 |
|
|
|
|
45,687 |
|
|
||
|
SPOT |
|
|
276,863 |
|
|
|
|
261,171 |
|
|
||
|
Commercial IoT |
|
|
423,519 |
|
|
|
|
409,089 |
|
|
||
|
Other |
|
|
13,346 |
|
|
|
|
27,487 |
|
|
||
|
Total average subscribers |
|
|
757,293 |
|
|
|
|
743,434 |
|
|
||
|
|
|
|
|
|
|
|
|
|
||||
ARPU (1) |
|
|
|
|
|
|
|
|
|||||
|
Duplex |
|
$ |
47.03 |
|
|
|
$ |
48.56 |
|
|
||
|
SPOT |
|
|
13.55 |
|
|
|
|
14.02 |
|
|
||
|
Commercial IoT |
|
|
3.68 |
|
|
|
|
3.65 |
|
|
(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/20220505006056/en/
Investor Contact Information:
investorrelations@globalstar.com
Source:
FAQ
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