Executive Summary / Key Takeaways

• Globalstar is undergoing a significant transformation, evolving from a traditional Mobile Satellite Services (MSS) provider into a diversified connectivity powerhouse, strategically leveraging its globally harmonized spectrum and bent-pipe architecture.
• A pivotal wholesale partnership, notably with Apple Inc. , is providing substantial funding for the development and deployment of Globalstar's next-generation C-3 satellite constellation and an expanded global ground infrastructure.
• The company is aggressively expanding into high-growth markets through its new two-way Commercial IoT module (RM200M) and the advanced XCOM RAN technology, which is poised to disrupt terrestrial 5G private networks.
• Globalstar demonstrated robust financial performance in 2024 and the first nine months of 2025, marked by record revenues and strong operating cash flow, which is being reinvested into strategic capital expenditures for future growth.
• Despite near-term margin compression due to significant investments, the long-range outlook projects substantial revenue doubling and margin expansion, underpinned by technological leadership and strategic market positioning in a rapidly converging communications industry.

Setting the Scene: A Global Connectivity Architect

Globalstar, Inc. stands at a strategic inflection point within the rapidly converging satellite and terrestrial communications industries. Founded in 1993, the company has a history marked by both pioneering innovation in Mobile Satellite Services (MSS) and the inherent challenges of a nascent market. Early on, Globalstar, much like other early satellite communication ventures, faced hurdles in commercializing voice and low-speed data, highlighting the niche nature of the demand at the time. However, its enduring commitment to building a global satellite network and securing globally harmonized spectrum has laid the foundation for its current strategic ascent.

Today, Globalstar operates a global low-Earth orbit (LEO) satellite constellation, providing essential voice and data communications to retail, business, and governmental customers, alongside critical wholesale capacity services. The overarching strategy is clear: to leverage its unique spectrum assets and established infrastructure to become a leading provider of resilient, secure, and reliable connectivity worldwide. This strategy is particularly pertinent in an industry increasingly driven by the demand for ubiquitous connectivity, direct-to-device (D2D) solutions, and the burgeoning needs of automation across various sectors.

The company's foundational strengths are rooted in its globally harmonized and licensed spectrum, which spans 16.5 MHz in S-band, nearly 9 MHz in L-band, and over 300 MHz in C-band. This extensive spectrum, coupled with its bent-pipe satellite architecture, offers a distinct competitive advantage. Unlike many competitors who may need to acquire disparate spectrum assets or deploy larger, more complex satellites, Globalstar's established portfolio provides global coverage and priority rights, enabling cost-effective and harmonized product deployment across diverse geographies. This positions Globalstar uniquely in the competitive landscape, where many new entrants are still grappling with spectrum acquisition and regulatory complexities.

Technological Edge: The Heart of Globalstar's Moat

Globalstar's competitive moat is significantly fortified by its differentiated technology across both its satellite and terrestrial offerings. The core of its MSS business relies on a LEO constellation utilizing a "bent-pipe" architecture. This design simplifies satellite operations by placing much of the complex processing on the ground, making maintenance and upgrades faster and more cost-effective. The tangible benefits for customers include reliable connectivity in remote or underserved areas, crucial for safety, emergency preparedness, and business continuity. This architecture, combined with Globalstar's globally harmonized spectrum, allows for efficient design and deployment of products and services worldwide, a critical advantage over solutions constrained by regional spectrum allocations.

In the realm of Internet of Things (IoT), Globalstar has made significant strides with its two-way satellite IoT solution, epitomized by the RM200M module, commercially rolled out in October 2025. This innovation moves beyond traditional one-way tracking to enable command and control systems, addressing a rising global demand for reliable, low-power, low-latency solutions in critical applications like fleet tracking, asset monitoring, and precision agriculture. The RM200M's easy integration and powerful two-way edge communications are positioning Globalstar for growth in multiple high-value sectors, allowing it to compete favorably in both price and functionality. Future enhancements envision additional processing capability built into the modem, enabling edge AI for intelligent asset monitoring, where remote assets can run local programs, send alerts on anomalies, and selectively transmit data, optimizing bandwidth and operational efficiency.

On the terrestrial front, Globalstar's XCOM RAN technology, acquired through an Intellectual Property License Agreement with XCOM Labs (now Virewirx, Inc.), represents a critical entry point into the private wireless network market. This 5G-based system is engineered to deliver lower latency, enhanced spectral efficiency, ease of deployment, and dynamic spectrum sharing. Demonstrations at Mobile World Congress showcased impressive performance, achieving speeds of 400 megabits per second using just 10 megahertz of Globalstar's Band n53 spectrum. This breakthrough enables advanced applications such as robotics, autonomous vehicles, and augmented reality, offering partners a versatile, fully licensed channel for enhanced wireless connectivity. The XCOM RAN system is designed to outperform industrial Wi-Fi in performance, reliability, and mission-criticality, while also offering improved economics for large-area deployments due to proprietary, cost-reduced radio units. These technological differentiators are foundational to Globalstar's strategy, contributing to its competitive moat, enhancing its market positioning, and laying the groundwork for significant future revenue streams.

Strategic Initiatives & Operational Momentum

Globalstar's strategic initiatives are deeply intertwined with its wholesale capacity services, primarily driven by its partnership with Apple Inc. . The Updated Services Agreements, amended in November 2024, are transformational, providing significant funding for the Extended MSS Network, also known as the C-3 system. This includes an Infrastructure Prepayment of up to $1.1 billion and a $235 million debt repayment that retired previous notes. These prepayments are crucial for funding capital expenditures related to a new satellite constellation and expanded ground infrastructure. Globalstar has committed to acquiring at least 17 replacement satellites from MDA Space for its HIBLEO-4 system, with delivery expected in early 2026, and an additional 50+ third-generation satellites for the Extended MSS Network under a $775 million contract with MDA Space . The first launch of replacement satellites is anticipated in the first half of 2026, with a second launch in 2026.

The company is also undertaking a sweeping global expansion of its ground infrastructure to support the C-3 system, planning approximately 90 new tracking antennas across 35 ground stations in 25 countries, with installations underway in locations like Texas, Brazil, Alaska, Estonia, Greece, Singapore, Canada, and Japan. This expansion is designed to increase network capacity, resiliency, and reach, ensuring robust service continuity. Furthermore, Globalstar's HIBLEO XL-1 filing is a foundational step to expand operational frequency, preparing for its next satellite era with new satellites, orbital shells, and frequency bands to enable greater capacity and throughput.

In Commercial IoT, the launch of the RM200M two-way module is a key growth driver. While current growth is primarily from existing one-way systems, with average subscribers reaching 542,715 in Q3 2025, the two-way module is expected to significantly increase activations and market share by addressing new applications and attracting customers previously uninterested in one-way-only systems.

The government sector represents an expanding revenue source, with Globalstar securing early wins expected to yield $60 million. A significant partnership with Parsons Corporation has transitioned from a proof-of-concept to a commercial engagement, leveraging Globalstar's satellite network for mission-critical government applications. Additionally, a Cooperative Research and Development Agreement (CRADA) with the U.S. Army is evaluating satellite-enabled edge processing solutions for covert sensing and unmanned systems.

For terrestrial solutions, momentum is building for XCOM RAN. The system was expected to be available for commercial deployment in Q2 2025, and an initial order from a new customer for a next-generation robotics application signals its potential. Globalstar is expanding its sales force to push Band n53 and XCOM RAN into the market, targeting warehouse and factory automation, and exploring "Network as a Service" models for future high-margin annuity revenue.

Financial Performance: A Trajectory of Growth and Investment

Globalstar's financial performance in recent periods underscores its strategic transformation and significant investment phase. For the third quarter of 2025, total revenue reached a record $73.8 million, a 2% increase year-over-year. Year-to-date through September 30, 2025, total revenue grew 6% to $201 million, building on a record $250.3 million in 2024. This growth was primarily fueled by wholesale capacity services, which saw an 8% increase in Q3 2025 and a 16% increase year-to-date, largely due to the timing of service fees for network-related cost reimbursements and expanded services. Commercial IoT also contributed positively, with service revenue up 3% in Q3 2025 and 4% year-to-date, driven by a 6% increase in average subscribers for the quarter. Notably, equipment revenue from Commercial IoT device sales surged 60% in Q3 2025. Conversely, SPOT and Duplex service revenues declined due to competitive pressures and a strategic decision to discontinue Duplex device manufacturing, respectively.

Profitability metrics reflect the company's investment strategy. Income from operations for Q3 2025 was $10.2 million, an increase from $9.4 million in the prior year, despite higher operating expenses. Adjusted EBITDA margins remained healthy at 51% for Q3 2025 and 52% year-to-date, following a record 54% in fiscal year 2024. However, these margins are experiencing short-term compression due to strategic investments, particularly in XCOM RAN development, which negatively impacted adjusted EBITDA by approximately $1.9 million and 300 basis points in Q2 2025. Net income was lower in Q3 2025, primarily due to non-cash items such as higher imputed interest expense from the 2024 Prepayment Agreement and foreign currency losses.

Liquidity remains robust, with cash and cash equivalents totaling $346.3 million as of September 30, 2025. Operating cash flow for the nine months ended September 30, 2025, was a strong $445.8 million, significantly up from $98.5 million in the prior year, largely driven by $299.6 million received from the Infrastructure Prepayment and $37.5 million in accelerated service payments. These cash inflows are critical for funding substantial capital expenditures, which reached $485.9 million year-to-date through Q3 2025, primarily for network expansion, upgrades, and satellite construction under the Updated Services Agreements. Milestone payments to MDA Space and SpaceX for the Extended MSS Network alone totaled $315.8 million and $19 million, respectively. The company's deferred revenue, net, stood at $734.4 million, with the majority expected to be recognized over more than five years, providing a long-term revenue pipeline.

Competitive Positioning: A Differentiated Path

Globalstar occupies a unique and increasingly valuable position in the satellite communications landscape, distinguishing itself from both direct and indirect competitors. Direct competitors like Iridium Communications , Viasat , and Orbcomm operate in overlapping segments, but Globalstar's core differentiators provide a distinct edge.

Compared to Iridium Communications , which is known for its robust global network and strong government focus, Globalstar's globally harmonized spectrum (16.5 MHz S-band, nearly 9 MHz L-band, over 300 MHz C-band) offers a foundational advantage. This extensive, high-priority spectrum, coupled with its bent-pipe architecture, allows for more cost-effective and harmonized product deployment globally, a benefit that other D2D players often lack. While Iridium Communications (IRDM) has a broader network, Globalstar's established D2D experience and bent-pipe design enable rapid innovation and cost-effective IoT solutions, allowing it to aggressively compete and gain market share in specific niches.

Against Viasat , a leader in high-speed broadband, Globalstar's strength lies in its specialized, cost-effective IoT and emergency communication solutions. While Viasat (VSAT) excels in data-intensive applications, Globalstar's RM200M two-way module offers superior price and functionality for command and control systems, targeting markets where high-bandwidth is less critical than reliability and low power consumption.

In the industrial IoT space, where Orbcomm is a significant player, Globalstar's two-way IoT offerings and its XCOM RAN technology provide a differentiated approach. XCOM RAN's ability to deliver dramatically better performance, reliability, and mission-criticality over industrial Wi-Fi, coupled with improved economics for large-area deployments, positions Globalstar to take market share. The company's focus on cost reduction for its XCOM RAN radios also aims to make it competitive across various market segments, not just the high-end.

Indirect competitors, including terrestrial cellular providers and emerging LEO constellations like SpaceX's Starlink, present alternative connectivity solutions. While Starlink may offer more accessible remote broadband, Globalstar's long-standing regulatory relationships and high-priority spectrum for MSS and D2D services provide a stable foundation. Globalstar's management has expressed skepticism about the proven business model for high-cost D2D broadband services, drawing lessons from past industry challenges, and instead focuses on proven demand for safety and security.

The industry's high barriers to entry, including significant capital requirements for satellite launches and complex regulatory approvals, naturally protect Globalstar's established position. However, Globalstar acknowledges being "considerably smaller" than some direct competitors and is actively working to close that gap through strategic investments and aggressive market penetration, particularly with its new two-way IoT and XCOM RAN offerings. The company's customer concentration, with Apple Inc. accounting for 63% of revenue in the nine months ended September 30, 2025, highlights a key dynamic, but the partnership's funding mechanism also de-risks significant capital expenditures.

Outlook and Risks: Charting the Future

Globalstar's outlook for 2025 reflects a period of strategic investment aimed at long-term growth. The company has reiterated its full-year 2025 guidance, projecting total revenue in the range of $260 million to $285 million, representing approximately 9% year-over-year growth at the midpoint. Adjusted EBITDA margin is anticipated to be around 50%, a short-term compression from 2024's 54% margin, primarily due to increased operating expenses associated with the development and enhancement of XCOM RAN and the expansion of its MSS product portfolio. Management views these as critical investments expected to yield meaningful margin expansion as new revenue streams scale in the future.

Beyond 2025, the long-range forecast is ambitious, with expectations for total revenue to double the 2024 amount, reaching $500 million, and adjusted EBITDA margins to exceed 54% during the first full year of service from the Extended MSS Network. This robust outlook is underpinned by several key assumptions: continued strong growth in Commercial IoT, driven by the adoption of the two-way RM200M module; expanding revenue contributions from government contracts, such as the Parsons Corporation (PSN) partnership; and the successful execution of its extensive infrastructure build-out for the C-3 system. The company also anticipates an immaterial impact from evolving tariff environments, leveraging its global manufacturing and logistics flexibility.

However, the investment thesis is not without its risks. Customer concentration, particularly with Apple Inc. (AAPL), remains a significant factor, as the loss of this customer could materially impact financial performance. Delays in satellite delivery from MDA Space (MDA) or launch timing with SpaceX could affect the commencement of new services and associated revenue streams. The regulatory landscape, especially concerning speculation around spectrum sharing, poses an ongoing risk, although Globalstar emphasizes its long-standing relationships with regulators and the high priority of its spectrum. The commercial adoption of new technologies like XCOM RAN, particularly in enterprise markets, is subject to long sales cycles and customer-specific deployment timelines, introducing uncertainty in revenue ramp-up. Furthermore, the broader market demand for high-bandwidth D2D services, beyond safety and security, remains unproven, as highlighted by management's cautious stance on consumer willingness to pay for incremental multimedia services.

Conclusion

Globalstar is in the midst of a profound transformation, strategically leveraging its unique global spectrum assets and bent-pipe satellite architecture to ascend as a formidable player in the converging satellite and terrestrial communications ecosystem. The company's history, marked by resilience and innovation, has culminated in a period of significant investment and expansion, largely de-risked by a foundational wholesale partnership. This strategic funding is propelling the deployment of a next-generation satellite constellation and a vast global ground infrastructure, while simultaneously fueling aggressive expansion into two-way Commercial IoT and the promising terrestrial 5G private network market with XCOM RAN.

While near-term profitability reflects these substantial growth investments, Globalstar's robust operating cash flow and clear long-range financial targets underscore a compelling trajectory for revenue doubling and margin expansion. The company's technological differentiators, from its efficient bent-pipe design to the advanced capabilities of XCOM RAN, are not merely technical specifications but critical enablers of its competitive moat and future market leadership. For discerning investors, Globalstar represents an opportunity to participate in a company that is not only executing on a clear strategic roadmap but is also uniquely positioned to capitalize on the evolving demands for resilient, ubiquitous connectivity across industrial, government, and consumer markets. The successful realization of its technological roadmap and market penetration in these high-growth segments will be key indicators of its continued ascent.