Globalstar Announces Second Quarter 2023 Results
- Globalstar sees robust growth in Q2 2023 with a 50% increase in revenue and an 86% increase in Adjusted EBITDA. Ending liquidity is $65 million. The company tightens its 2023 revenue guidance to $200 million.
- None.
“Globalstar continued to see robust growth during the second quarter, with a significant improvement in profitability resulting from a
Dave Kagan, Chief Executive Officer, commented, “This quarter’s results further attest to the initiatives we embarked on to transform the Company along our four pillars – wholesale, legacy, IoT and terrestrial spectrum. We have laid a solid foundation in each to capture the significant opportunities on the horizon, armed with a unique portfolio of assets. We are all very proud and humbled by the lifesaving impact Globalstar is enabling around the world, and we are nowhere near finished.”
FINANCIAL REVIEW
Total Revenue
Total revenue increased
Service Revenue
Service revenue increased
The primary highlight of our subscriber driven revenue sources continues to be growth in Commercial IoT, which saw a revenue increase of
Regarding our legacy services, SPOT was down due to fewer average subscribers. Equipment sales and gross activations over the last twelve months were impacted for several quarters by inventory shortages and back orders of two of our core SPOT products. Second quarter 2023 was the first full quarter of normal production of these devices and we have seen a correlated increase in activations during this timeframe. Duplex service revenue declined at an expected rate due to attrition in the subscriber base, offset partially by an ARPU increase.
Subscriber Equipment Sales
Subscriber equipment sales increased
Commercial IoT equipment sales revenue increased more than
SPOT equipment revenue increased
Income (Loss) from Operations
Income from operations was
Cost of services was higher due primarily to expenses associated with new gateway sites as we expanded and upgraded our global ground network to support wholesale capacity services. A significant portion of these costs are reimbursed to us in connection with our Service Agreements, and this consideration is recognized as revenue. Higher information technology and software maintenance costs associated with enhanced cyber and physical security and our recently launched ERP platform also contributed to the increase in costs quarter over quarter.
The increase in cost of subscriber equipment sales is in line with the increase in equipment revenue; margin percentages were down slightly due to the mix of products sold in each respective quarter.
Management, general and administrative costs (MG&A) costs were higher during the second quarter of 2023 due primarily to stock-based compensation costs incurred from performance-based grants over the past twelve months. Higher legal and professional fees also increased during the second quarter of 2023 due to various efforts, including increased regulatory work, government relations and negotiations of new commercial arrangements.
Net Income (Loss)
Net income was less than
Adjusted EBITDA
Adjusted EBITDA was
Liquidity
As of June 30, 2023, we held cash and cash equivalents of
FINANCIAL OUTLOOK
We update our previously issued financial guidance for full year 2023 with anticipated results included below. Note that this outlook excludes revenue from terrestrial spectrum opportunities.
◦Total revenue between
◦ Adjusted EBITDA margin of approximately
CONFERENCE CALL INFORMATION
As previously announced, the Company will host a conference call to discuss its results at 9:00 a.m. Eastern Time (ET) on Thursday, August 3, 2023. Details are as follows:
Earnings
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The earnings call will be available via webcast from the following link.
Webcast Link: https://edge.media-server.com/mmc/p/69gz3m5f
If you would like to participate in the live question and answer session following the Company’s conference call, please dial 1 (800) 715-9871 (US and
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Audio
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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.
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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, delivering key operational data, and saving lives – from any location – for consumers, businesses, and government agencies across the globe. Globalstar’s terrestrial spectrum, Band 53/n53, offers carriers, cable companies, and system integrators a versatile, fully licensed channel with a growing ecosystem to improve customer wireless connectivity. 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
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 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. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) |
|||||||
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Three Months Ended |
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June 30, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Revenue: |
|
|
|
||||
Service revenue |
$ |
48,648 |
|
|
$ |
33,048 |
|
Subscriber equipment sales |
|
6,424 |
|
|
|
3,752 |
|
Total revenue |
|
55,072 |
|
|
|
36,800 |
|
Operating expenses: |
|
|
|
||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) |
|
12,246 |
|
|
|
10,695 |
|
Cost of subscriber equipment sales |
|
5,662 |
|
|
|
3,113 |
|
Marketing, general and administrative |
|
12,654 |
|
|
|
9,693 |
|
Reduction in the value of long-lived assets |
|
— |
|
|
|
525 |
|
Depreciation, amortization, and accretion |
|
21,890 |
|
|
|
24,130 |
|
Total operating expenses |
|
52,452 |
|
|
|
48,156 |
|
Income (loss) from operations |
|
2,620 |
|
|
|
(11,356 |
) |
Other (expense) income: |
|
|
|
||||
Interest income and expense, net of amounts capitalized |
|
(5,070 |
) |
|
|
(7,187 |
) |
Derivative gain (loss) |
|
299 |
|
|
|
(1,242 |
) |
Foreign currency gain (loss) |
|
2,038 |
|
|
|
(7,123 |
) |
Other |
|
148 |
|
|
|
272 |
|
Total other expenses |
|
(2,585 |
) |
|
|
(15,280 |
) |
Income (loss) before income taxes |
|
35 |
|
|
|
(26,636 |
) |
Income tax expense |
|
26 |
|
|
|
121 |
|
Net income (loss) |
$ |
9 |
|
|
$ |
(26,757 |
) |
|
|
|
|
||||
Net loss attributable to common shareholders |
|
(2,635 |
) |
|
|
(26,757 |
) |
Net loss per common share: |
|
|
|
||||
Basic |
$ |
0.00 |
|
|
$ |
(0.01 |
) |
Diluted |
|
0.00 |
|
|
|
(0.01 |
) |
Weighted-average shares outstanding: |
|
|
|
||||
Basic |
|
1,813,393 |
|
|
|
1,799,886 |
|
Diluted |
|
1,813,393 |
|
|
|
1,799,886 |
|
GLOBALSTAR, INC. RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA (In thousands) (Unaudited) |
||||||||
|
|
Three Months Ended |
||||||
|
|
June 30, |
||||||
|
|
|
2023 |
|
|
|
2022 |
|
Net income (loss) |
|
$ |
9 |
|
|
$ |
(26,757 |
) |
|
|
|
|
|
||||
Interest income and expense, net |
|
|
5,070 |
|
|
|
7,187 |
|
Derivative (gain) loss |
|
|
(299 |
) |
|
|
1,242 |
|
Income tax expense |
|
|
26 |
|
|
|
121 |
|
Depreciation, amortization, and accretion |
|
|
21,890 |
|
|
|
24,130 |
|
EBITDA |
|
|
26,696 |
|
|
|
5,923 |
|
|
|
|
|
|
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Non-cash compensation |
|
|
2,532 |
|
|
|
1,241 |
|
Foreign exchange gain and other |
|
|
(2,186 |
) |
|
|
6,851 |
|
Reduction in value of inventory and long-lived assets |
|
|
— |
|
|
|
541 |
|
Adjusted EBITDA (1) |
|
$ |
27,042 |
|
|
$ |
14,556 |
|
(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 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. |
GLOBALSTAR, INC. SCHEDULE OF SELECTED OPERATING METRICS (In thousands, except subscriber and ARPU data) (Unaudited) |
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|
|
Three Months Ended |
||||||||||||
|
|
June 30, |
||||||||||||
|
|
2023 |
|
2022 |
||||||||||
|
|
Service |
|
Equipment |
|
Service |
|
Equipment |
||||||
Revenue |
|
|
|
|
|
|
|
|
||||||
Subscriber |
|
|
|
|
|
|
|
|
||||||
Duplex |
|
$ |
6,359 |
|
$ |
17 |
|
|
$ |
6,936 |
|
$ |
143 |
|
SPOT |
|
|
11,039 |
|
|
2,513 |
|
|
|
11,536 |
|
|
1,674 |
|
Commercial IoT |
|
|
5,356 |
|
|
3,901 |
|
|
|
5,038 |
|
|
1,908 |
|
Wholesale capacity services |
|
|
25,478 |
|
|
— |
|
|
|
8,825 |
|
|
— |
|
Engineering and other |
|
|
416 |
|
|
(7 |
) |
|
|
713 |
|
|
27 |
|
Total revenue |
|
$ |
48,648 |
|
$ |
6,424 |
|
|
$ |
33,048 |
|
$ |
3,752 |
|
|
|
|
|
|
|
|
|
|
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Average subscribers |
|
|
|
|
|
|
|
|
||||||
Duplex |
|
|
34,974 |
|
|
|
|
42,723 |
|
|
||||
SPOT |
|
|
261,734 |
|
|
|
|
277,815 |
|
|
||||
Commercial IoT |
|
|
466,609 |
|
|
|
|
433,578 |
|
|
||||
Other |
|
|
385 |
|
|
|
|
437 |
|
|
||||
Total average subscribers |
|
|
763,702 |
|
|
|
|
754,553 |
|
|
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|
|
|
|
|
|
|
|
|
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ARPU (1) |
|
|
|
|
|
|
|
|
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Duplex |
|
$ |
60.61 |
|
|
|
$ |
54.12 |
|
|
||||
SPOT |
|
|
14.06 |
|
|
|
|
13.84 |
|
|
||||
Commercial IoT |
|
|
3.83 |
|
|
|
|
3.87 |
|
|
(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/20230803184394/en/
Investor Contact Information:
investorrelations@globalstar.com
Source: Globalstar, Inc.
FAQ
What were Globalstar's Q2 2023 financial results?
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