Executive Summary / Key Takeaways

• Strategic Transformation Underway: Globalstar is executing a multi-faceted growth strategy, leveraging its unique globally harmonized spectrum and bent-pipe satellite architecture to expand its core Mobile Satellite Services (MSS), launch a next-generation Extended MSS Network, and penetrate terrestrial wireless markets with its XCOM RAN technology.
• Robust Wholesale Partnership Fuels Investment: A significant wholesale agreement, accounting for 62% of H1 2025 revenue, provides substantial funding for network upgrades and new constellations, enabling ambitious capital expenditures without relying heavily on traditional debt or equity markets.
• Diversified Growth Engines Emerge: Beyond its foundational wholesale business, Globalstar is seeing promising traction in 2-way Commercial IoT (RM200 module) and securing early commercial and government wins for its high-performance XCOM RAN and satellite solutions, positioning for future revenue diversification.
• Near-Term Profitability for Long-Term Gain: While strategic investments in XCOM RAN and MSS product development are expected to cause short-term adjusted EBITDA margin compression (around 50% for 2025), management projects a significant rebound to over 54% and a doubling of revenue to $500 million once the Extended MSS Network is fully operational.
• Competitive Moat and Regulatory Clarity: Globalstar's dedicated spectrum (4x that of other D2D players) and proven operational history provide a strong competitive advantage, reinforced by recent FCC reauthorization and ongoing global ground infrastructure expansion.

Globalstar's Resurgence and Strategic Foundation

Globalstar, Inc. operates at the nexus of satellite and terrestrial communications, providing essential Mobile Satellite Services (MSS) alongside innovative terrestrial spectrum and network solutions. Founded in 1993, the company has a history marked by both pioneering spirit and significant challenges, including an early bankruptcy that underscored the complexities of the nascent satellite communications market. This experience has profoundly shaped its current strategy, emphasizing resilience, diversified revenue streams, and leveraging its core assets. Today, Globalstar is undergoing a significant transformation, moving beyond its traditional one-way tracking capabilities to embrace a future of two-way, mission-critical connectivity.

The company's overarching strategy is to capitalize on its globally harmonized and licensed spectrum, a foundational strength that sets it apart in the industry. This spectrum, particularly Band 53/n53, is a critical asset for both its satellite and terrestrial ambitions. Globalstar's bent-pipe satellite architecture further enhances its competitive position, uniquely enabling the rapid deployment of new innovations and offering a cost-effective platform for diverse applications. The broader industry is witnessing increasing demand for reliable connectivity in remote and underserved areas, mission-critical communications for government and enterprise, and advanced automation solutions, all of which align with Globalstar's strategic focus.

Technological Edge: The Power of Proprietary Spectrum and Innovation

Globalstar's core differentiated technology lies in its Low Earth Orbit (LEO) satellite constellation, complemented by its globally harmonized and licensed spectrum. This dedicated spectrum resource is notably robust, boasting "almost 4x that of any other D2D player currently," and holds the "highest priority when it comes to coordination" with other systems. This provides a significant competitive moat, ensuring clear and reliable communication channels for its services. The company's bent-pipe architecture, a design where satellites act as relays rather than processing data onboard, is "uniquely suited to enable the rapid deployment of new innovation." This allows for ground-based software upgrades and flexibility, translating into faster service enhancements and lower operational costs.

Recent technological advancements underscore Globalstar's commitment to innovation. Its XCOM RAN platform, a critical entry point into terrestrial wireless markets, demonstrated impressive performance at Mobile World Congress, achieving "speeds of 400 megabits per second using just 10 megahertz of spectrum" over its licensed n53 band in Spain. This technology is "engineered to deliver lower latency, enhanced spectral efficiency, ease of deployment and dynamic spectrum sharing," positioning Globalstar to enable future hybrid satellite-terrestrial network architectures. The company is also developing its own software stack components for XCOM RAN, aiming for cost savings and greater control.

In its MSS segment, Globalstar successfully launched the RM200 2-way module, a significant expansion beyond its traditional one-way tracking. This module addresses the rising global demand for "reliable low power, low latency command and control systems" across critical applications. It features "easy integration and powerful 2-way edge communications," with over 50 partners currently testing it for diverse uses, including oil and gas asset management and military communications. The company is also investing in its next-generation Extended MSS Network, or C-3 system, which will feature over 50 Aurora satellites from MDA and a sweeping global ground infrastructure program involving "approximately 90 new antennas across 35 ground stations in 25 countries." These initiatives are designed to "increase network capacity, resiliency and reach, ensuring robust service continuity." For investors, these technological differentiators translate into a stronger competitive position, potential for higher average selling prices (ASPs) or lower costs, and a clear roadmap for long-term growth by addressing high-value, underserved markets.

Competitive Arena: Differentiated Strategy in a Crowded Sky

Globalstar operates in a competitive landscape with both direct and indirect rivals. Direct competitors include Iridium Communications (IRDM), Viasat (VSAT), and Orbcomm (ORBC), each with distinct strengths. Globalstar differentiates itself from Iridium by focusing on cost-effective IoT and consumer-centric devices like SPOT, while Iridium targets broader enterprise and government solutions. While Iridium boasts greater network scale and reliability, Globalstar's proprietary spectrum, which is "almost 4x that of any other D2D player currently," provides a unique advantage in spectral efficiency. Financially, Globalstar's TTM EBITDA margin of 45.59% is robust, exceeding Iridium's 24% (2024 annual), yet its operating profit margin (1.09% TTM) and negative net profit margin (-14.73% TTM) trail Iridium's 24% and 14% respectively, reflecting Globalstar's significant depreciation, amortization, and interest expenses tied to its capital-intensive network build-out.

Against Viasat, a player focused on high-bandwidth aviation and broadband services, Globalstar carves out a niche in remote IoT and personal safety. Globalstar's 5G alliances and cost-sensitive approach contrast with Viasat's premium, bandwidth-heavy services, potentially offering lower entry costs for customers. In the IoT market, Globalstar and Orbcomm both compete, but Globalstar's offerings span broader consumer and emergency services, while Orbcomm specializes in industrial applications. Globalstar's hybrid satellite-terrestrial solutions offer a unique value proposition, though Orbcomm currently holds a stronger market share in industrial IoT.

Indirect competitors, such as terrestrial 5G networks and Starlink, exert pressure by offering more accessible connectivity in urban areas. However, Globalstar's Band 53/n53 spectrum provides a crucial advantage for mission-critical private networks, where terrestrial alternatives like CBRS have shown "less-than-expected" growth and lack guaranteed availability. The complexity and inefficiency of the NTN (Non-Terrestrial Networks) cellular standard, which requires substantial overhead for chip manufacturers, further highlight the differentiation of Globalstar's proprietary solutions. Globalstar acknowledges it remains "considerably smaller" than some direct competitors, but its strategy is to aggressively close this gap by leveraging its unique spectrum, bent-pipe architecture, and strategic partnerships. Its customer concentration, with Apple Inc. (AAPL) accounting for 62% of H1 2025 revenue, represents both a significant funding source and a key vulnerability, which the company manages through its long-term agreements and diversified growth initiatives.

Financial Performance: A Growth Trajectory Fueled by Strategic Investments

Globalstar's recent financial performance reflects a company in a significant investment phase, strategically positioning for future growth. For the second quarter of 2025, total revenue increased 11% year-over-year to $67.1 million, contributing to a 9% increase for the first six months of 2025, reaching $127.2 million. This growth was primarily driven by wholesale capacity services, which surged 24% in Q2 2025 and 21% in H1 2025, reaching $42.4 million and $79.1 million respectively. This increase was attributed to the timing of service fees related to network-related cost reimbursements and expanded services that commenced in March 2024.

The company's largest customer, Apple Inc. , was responsible for 62% of total revenue for the first six months of 2025, underscoring the importance of this strategic partnership. Commercial IoT service revenue also showed positive momentum, increasing 5% in Q2 2025 and 4% in H1 2025, driven by higher subscriber activations. The average number of Commercial IoT subscribers reached 534,505 in Q2 2025, with a stable monthly ARPU of $4.40. In contrast, SPOT service revenue declined 11.1% in Q2 2025 and 9.8% in H1 2025 due to competitive pressures and fewer subscribers (224,885 in Q2 2025), though new product development is underway. Duplex service revenue also decreased significantly, down 25.9% in Q2 2025 and 26.7% in H1 2025, as the company strategically discontinued device sales to focus on other revenue streams. Subscriber equipment sales, however, saw a robust increase of 43% in Q2 2025 and 19.6% in H1 2025.

Operating expenses in Q2 2025 decreased, but for the first six months of 2025, they increased, influenced by higher costs for XCOM RAN development and a $7.0 million loss on disposal of an inoperable second-generation satellite. These increases were partially offset by employee retention credits totaling $3.9 million in H1 2025. Interest expense, net, rose due to the 2024 Prepayment Agreement and lower capitalized interest, though this was mitigated by the retirement of the 2023 13% Notes in November 2024.

From a liquidity perspective, cash and cash equivalents decreased from $391.2 million at December 31, 2024, to $308.2 million at June 30, 2025. This was primarily due to substantial capital expenditures for the Updated Services Agreements, including $203.1 million in milestone payments to MDA for the Extended MSS Network, partially offset by $124.7 million received from the Infrastructure Prepayment.

Net cash provided by operating activities significantly improved to $209.7 million for H1 2025, up from $66.5 million in the prior year period, largely due to favorable working capital changes from the Infrastructure Prepayment and $30.0 million in accelerated service fees. Adjusted free cash flow for H1 2025 was $77.9 million, compared to $51.9 million in the prior year. The company's debt principal stood at $400.2 million at June 30, 2025, with significant portions being repaid through future customer payments.

Outlook and Strategic Imperatives: Charting a Course for Future Value

Globalstar has reiterated its full-year 2025 outlook, projecting revenue in the range of $260 million to $285 million and an adjusted EBITDA margin of approximately 50%. This anticipated short-term compression in EBITDA margin is a direct consequence of strategic investments in the XCOM RAN terrestrial solution and the expansion of its MSS product portfolio, including the 2-way module. Management views these as "foundational investments" with a 12- to 18-month timeline for revenue generation, expecting them to drive long-term value. The company also anticipates a "relatively immaterial impact in the near term" from evolving tariffs, citing its global manufacturing and logistics flexibility.

Looking further ahead, Globalstar's long-range forecast is ambitious and transformative. Upon the first full year of service over the Extended MSS Network, the company expects total revenue to double the 2024 amount, reaching $500 million, and to generate robust EBITDA margins exceeding 54%. This forecast, notably, excludes potential contributions from large terrestrial spectrum and XCOM RAN deployments, signaling confidence in these additional growth vectors.

Key strategic initiatives underpinning this outlook include:

• Network Expansion: A sweeping global ground infrastructure program is underway, with approximately 90 new antennas across 35 ground stations in 25 countries, in preparation for the C-3 system.
• Satellite Launches: The first batch of replacement satellites (from the 2022 MDA agreement) is expected to launch in Q4 2025, with a second batch in 2026. Over 50 Aurora satellites for the Extended MSS Network are also in development with MDA.
• Government Sector Growth: The partnership with Parsons Corporation (PSN) has moved to a commercial phase, and a Cooperative R&D Agreement with the U.S. Army is evaluating satellite-enabled edge processing. These are expected to yield "significant revenue contribution."
• XCOM RAN Commercialization: The XCOM RAN system is anticipated to be available for commercial deployment in Q3 2025, supported by a new distribution partnership with Liquid Intelligent Technologies for Africa, the Middle East, and Gulf regions.
• 2-way IoT Ramp-up: The RM200 2-way module is in beta testing, with management expecting "the beginning of the ramp" in 2025 and "very well into the deployment" in 2026.

These initiatives collectively position Globalstar to leverage its unique assets and strategic partnerships to achieve sustainable growth across diverse high-value markets.

Conclusion

Globalstar stands at a pivotal juncture, transforming from a niche satellite communications provider into a diversified player poised for significant growth. The core investment thesis hinges on its unique, globally harmonized spectrum and bent-pipe satellite architecture, which provide a differentiated foundation for both its expanding wholesale MSS business and its emerging terrestrial wireless and 2-way IoT solutions. While the company's financial performance in the near term reflects strategic investments, particularly in XCOM RAN and new MSS products, these are calculated moves designed to unlock substantial long-term value.

The wholesale partnership, a powerful engine of funding and revenue, underpins ambitious network expansions and new satellite constellations, setting the stage for a projected doubling of revenue and robust EBITDA margins once the Extended MSS Network is fully operational. Globalstar's technological leadership, demonstrated by its high-performance XCOM RAN and innovative 2-way IoT module, coupled with its strategic inroads into the government sector, positions it to compete effectively in a dynamic market. Despite customer concentration and the capital-intensive nature of its business, Globalstar's clear strategic roadmap, regulatory clarity, and disciplined execution capabilities suggest a compelling trajectory for investors seeking exposure to a company leveraging unique assets to redefine connectivity.