Globalstar (GSAT) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of $60.4 million, up 10% year-over-year, driven by wholesale capacity and IoT growth, despite a decline in equipment revenue due to IoT sales timing.

• Adjusted EBITDA increased 20% year-over-year to $32.6 million, with margin rising to 54% from 49% in the prior year.

• Net loss attributable to common shareholders was $12.3 million for Q2 2024, compared to a $2.6 million loss in Q2 2023, with higher operating expenses and FX losses impacting results.

• Raised full-year 2024 revenue guidance to $235 million–$250 million and Adjusted EBITDA margin to 53%.

• Commercial IoT service revenue hit a record $6.7 million, up 25% year-over-year, with strong subscriber and ARPU growth.

Financial highlights

• Q2 2024 service revenue increased 18% to $57.6 million, while equipment sales declined 57% to $2.8 million.

• Cash and cash equivalents rose to $64.3 million as of June 30, 2024, maintaining strong liquidity ahead of satellite milestone payments.

• Net loss for Q2 2024 was $9.7 million, with operating loss at $1.4 million due to higher network and stock-based compensation costs.

• Cash flow from operations for the first half of 2024 was $66.5 million, up from $43.0 million in 2023.

• Debt outstanding as of June 30, 2024: $425.8 million; Series A Preferred Stock: $105.3 million.

Outlook and guidance

• Full-year 2024 revenue guidance raised to $235 million–$250 million, with Adjusted EBITDA margin guidance increased to 53%.

• Next-generation satellites remain on schedule for first launch in the first half of 2025, supporting long-term service continuity.

• Management expects continued growth in IoT and wholesale capacity segments, with commercial IoT equipment sales expected to rebound in H2 2024.

• Wholesale capacity agreements, including with a government services company, provide multi-year revenue visibility.