Globalstar, Inc. (AMEX:GSAT) Q2 2023 Earnings Call Transcript August 3, 2023
Globalstar, Inc. misses on earnings expectations. Reported EPS is $-0.00145 EPS, expectations were $0.01.
Operator: Good morning, and welcome to the Globalstar Second Quarter 2023 Earnings Conference Call. I will now turn the call over to Jay Monroe.
James Monroe: Thanks, everybody, for joining today’s Globalstar’s Second Quarter 2023 Investor Call. In keeping with recent practice, I will make very brief opening remarks, and then we’ll move straight to Q&A. But first, please note that today’s call contains forward-looking statements intended to fall within the safe harbor provided under the securities laws. Factors that could cause the results to differ materially are described in the forward-looking statements and Risk Factors section of Globalstar’s SEC filings including its annual report on Form 10-K and for the financial year ending 2022 as well as this morning’s earnings release. As outlined in the release, Globalstar continued to see robust growth and a significant improvement in profitability, resulting in a 50% increase in revenue over the prior year’s quarter.
Adjusted EBITDA was up 86% over the same period. And for the first half of 2023, our revenue was up more than 60% to $113 million and EBITDA was almost $60 million, an increase of over 140%. Our liquidity ended the quarter with $65 million, more than double our cash balance at year-end. Service revenue, unrelated to our wholesale business increased, reflecting organic growth in our commercial IoT business. We expect this to continue, propelled by the launch of new 2-way device platform and services later this year. Average revenue per subscriber is expected to increase meaningfully after that introduction. As a result of these factors, we are increasing the low end of our 2023 revenue guidance from $185 million to $200 million and reiterating a forecasted adjusted EBITDA margin of approximately 55%, not including spectrum revenue.
A brief update on our Band 53 efforts. We are working on many fronts and engaged in engineering efforts with a wide range of companies which are working on Band 53 deployments. Our opportunity set is truly unique given, among other things, the installed base of devices capable of using Band 53 continues to grow. We expect it to be in hundreds of millions of devices by this time next year. And we are also making great progress with the strategic collaboration agreement we signed with Qualcomm earlier this year. This agreement increases the range of infrastructure available for Band 53 deployments and further drives device adoption. With Qualcomm and their system integrator partners, we are simplifying private wireless deployments, so Band 53 can be rolled out ubiquitously around the world.
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Industrial and security of critical infrastructure, our macro trends driving private wireless today and they’re driving it on a global basis. We are a great resource with the right ecosystem to deliver for this growing demand, specifically regarding the opportunities that we discussed during the first quarter call. We are in the midst of final engineering validation and are looking forward to sharing more detail about these shortly. We hope you understand that timing is not within our control. The engineering is driven by the technical demands of the individual projects, not by our public company reporting calendar. Finally, I want to reiterate my sentiment from last quarter. I do not believe the current market price of our stock reflects the company’s value.
When participating in multiple investment conferences this past quarter, we heard questions about whether our transformation and growth is sustainable. My simple answer is yes. Globalstar has invested over $1 billion during the past decade, rebuilding our satellite and ground network, innovating to bring Band 53 to market, delivering revolutionary satellite services which went operational in November and putting other resources in place to prepare for this moment. I am absolutely confident that we will continue to execute and deliver increasing revenue, EBITDA and shareholder value. Now we’ll open the call up to Q&A. We have today available to answer questions, Dave, Rebecca, Kyle and Tim. It would be helpful if you would direct your questions to whomever you prefer.
As a reminder, we are still not able to answer questions related to our wholesale partners’ activities or future plans in the direct to handset market. And we thank you in advance for focusing your questions on other parts of our business. And of course, our financial results. Operator, we can begin Q&A.
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