Q4 2024 Globalstar Inc Earnings Call

Yes.

Operator: Good day and thank you for standing by.

Good day, and thank you for standing by welcome to the Globalstar fourth quarter 'twenty 'twenty four earnings conference call.

Operator: Welcome to the Globostar fourth quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again.

At this time all participants are in a listen only mode.

After the speaker's presentation, there will be a question and answer session.

Ask a question during the session you will need to press the star one one on your telephone you will then hear an automated message advising your hand as rates.

To withdraw your question. Please press star one again.

Operator: Please be advised that today's conference is being recorded.

Please be advised that today's conference is being recorded.

Rebecca Clary: I would now like to hand the conference over to your first speaker today, Rebecca Clary, CFO. Please go ahead. Thank you, operator, and good afternoon, everyone. Before we begin, please note that today's call contains four 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 risk factors section of GlobalStar's SEC filings, including its most recent annual report on Form 10-K and its other SEC filings, as well as today's earnings release. Also note that management may reference EBITDA or adjusted EBITDA on this call, which are financial measures not recognized under U.S.

Speaker Change: I'd now like to hand, the conference over to your first speaker today.

Speaker Change: Bucket theory CFO. Please go ahead.

Speaker Change: Thank you operator, and good afternoon, everyone. Before we begin. Please note that today's call contains forward looking statements intended to fall within the Safe Harbor provided under the securities laws.

Speaker Change: Or is that could cause the results to differ materially are described in the risk factors section of Globalstar SEC filings.

Speaker Change: Its most recent annual report on Form 10-K, and its other SEC filings as well as today's earnings release.

Speaker Change: Also note that management may reference EBITDA or adjusted EBITA on this call, which are financial measures not recognized under U S. GAAP.

Rebecca Clary: GAAP. As required by SEC rules and regulations, these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in the earnings release, which is available on our website.

Speaker Change: As required by SEC rules and regulations. These non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in the earnings release, which is available on our website.

Rebecca Clary: I'll begin today by sharing our fourth quarter and full year 2024 results.

Speaker Change: I'll begin today by sharing our fourth quarter and full year 2024 results. I'll, then turn it over to Paul who will cover our key business updates.

Rebecca Clary: I'll then turn it over to Paul, who will cover key business updates.

Rebecca Clary: Before I get into the financials, I am pleased to share two strategic actions we have recently completed. In an effort to enhance our stock's liquidity and marketability, we successfully completed our uplifting to the NASDAQ Global Select market earlier this month. This milestone represents a natural evolution for Globalstar and aligns with our strategy to increase our visibility within the investment community. In connection with our transfer to NASDAQ, we implemented our planned 1 for 15 reverse stock split, which serves multiple strategic purposes. This action realigns our outstanding shares to more normalized levels relative to our peers and optimizes our trading fundamentals through improved liquidity.

Speaker Change: Before I get into the financials I am pleased to share two strategic actions, we have recently completed.

And in effort to enhance our stock's liquidity and marketability, we successfully completed our up listing to the NASDAQ global select market earlier this month.

Speaker Change: This milestone represents a natural evolution for globalstar and aligns with our strategy to increase our visibility within the investment community.

Speaker Change: In connection with our transfer to NASDAQ we implemented our planned one for 15 reverse stock split which serves multiple strategic purposes.

Speaker Change: This action realigned our outstanding shares to more normalized levels relative to our peers and optimizes, our trading fundamentals through improved liquidity.

Rebecca Clary: Importantly, our post split shares now meet institutional minimum stock price requirements, potentially broadening our investor base. For modeling purposes, our current common shares outstanding are approximately $126.4 million. Tomorrow, we plan to file new and amended registration statements to, among other things, reflect the impact of this split. You can also find more information related to the split in our February 7th 8K filing.

Speaker Change: Importantly, our post split shares now meet institutional minimum stock price requirements potentially broadening our investor base.

Speaker Change: For modeling purposes, our current common shares outstanding are approximately $126 4 million.

Speaker Change: Tomorrow, we plan to file new and amended registration statement to among other things reflects the impact of the split.

Speaker Change: You can also find more information related to this split in our February seven to 8-K filing.

Rebecca Clary: Now turning to our results, beginning with the fourth quarter. Total revenue increased 17% to $61.2 million, compared to the prior year period of $52.4 million. Service revenue increased 18% driven primarily by wholesale capacity revenue. Additionally, commercial IOT increased 8% during the quarter due to an increase in both average subscribers and our We are pleased to see continued adoption of our IoT services. Fourth quarter adjusted EBITDA increased 21% to $30.4 million compared to the prior year period of $25.1 million. Adjusted EBITDA margin also increased from the prior year period due to higher revenue of $8.8 million, which was offset partially by an increase in operating expenses of $3.5 million.

Speaker Change: Now turning to our results beginning with the fourth quarter.

Speaker Change: Total revenue increased 17% to 61.2 million compared to the prior year period of $52 4 million.

Speaker Change: Service revenue increased 18% driven primarily by wholesale capacity revenue.

Speaker Change: Generally commercial Iot increased 8% during the quarter due to an increase in both average subscribers and archive.

Speaker Change: We were pleased to see continued adoption of our Iot services.

Speaker Change: Fourth quarter, adjusted EBITDA increased 21% to $30 4 million compared to the prior year period of $25 1 million.

Speaker Change: EBITDA margin also increased from the prior year period due to higher revenue of $8 8 million, which was offset partially by an increase in operating expenses of $3 5 million.

Rebecca Clary: Turning to our full year results, total revenue for the year increased 12%, reaching a record $250.3 million and exceeding the top end of our guidance range. Service revenue increased 16% year over year, driven primarily by wholesale capacity and our second full year of providing service under this contract. Additionally, we saw record annual service revenue from our commercial IoT business in 2024, which is a testament to the growth that we are seeing with existing and new customers due to the wider variety of new use cases that have expanded our addressable market.

Speaker Change: Turning to our full year results total revenue for the year increased 12%, reaching a record at $253 million and exceeding the top end of our guidance range.

Speaker Change: Service revenue increased 16% year over year, driven primarily by wholesale capacity in our second full year of providing service under that contract.

Speaker Change: Additionally, we saw record annual service revenue from our commercial Iot business in 2024, which is a testament to the growth that we're seeing with existing and new customers due to the wider variety of new use cases and have expanded our addressable market.

Rebecca Clary: As Paul will discuss, we look forward to expansion of our product offerings this year with the long awaited launch of a two-way device as announced yesterday. In 2024, we achieved record annual adjusted EBITDA of $135.3 million, a 16% increase year over year. From a margin perspective, a Just Debits at Margin was 54% up 190 basis points from 52% in 2023.

Speaker Change: As Paul will discuss we look forward to expansion of our product offerings. This year with the long awaited launch and a two way device as announced yesterday.

Speaker Change: In 2024, we achieved record annual adjusted EBITDA of $135 3, million% to 16% increase year over year.

Speaker Change: From a margin perspective, adjusted EBITA margin was 54% up 190 basis points from 52% in 2023.

Rebecca Clary: Moving to our balance sheet, we ended the year with $391.2 million of cash on hand. cashflow from 2024 were impacted significantly by the updated services agreement. Since the closing of these agreements in November of 2024 through the end of the year, the company has received a total investment from its customer of $913 million, including cash payments totaling $689 million and certain in-kind asset contributions. The cash payments included the proceeds from the sale of 20% equity in the Globalstar FPE subsidiary, the proceeds from the current debt repayment that were used to pay off the 2023 13% notes and certain advanced service payments under the infrastructure prepayment.

Speaker Change: Moving to our balance sheet, we ended the year with 391.2 million of cash on hand.

Speaker Change: As far as from 'twenty to 'twenty four were impacted significantly by the updated services agreements.

Speaker Change: Since the closing of these agreements in November of 2024 through the end of the year. The company has received a total investment from its customer of 913 million, including cash payments totaling $689 million and certain in-kind asset contributions.

Speaker Change: The cash payments included the proceeds from the sale of 20% equity in the global start S. T E subsidiary there.

Speaker Change: Proceeds from the current debt repayment that were used to pay off the 2023, 13% notes.

Speaker Change: And certain advanced service payments under the infrastructure prepayment.

Rebecca Clary: A portion of the cash payments received was used to fund capital expenditures for the extended MSS network. The remaining amount of approximately $320 million was held in cash and cash equivalents as of December 31, 2024, and will be used in 2025 to fund infrastructure for the extended MSS network. We expect additional advanced service payments under the infrastructure prepayment to continue through the duration of the construction and launch of this new network.

Speaker Change: A portion of the cash payments received was used to fund capital expenditures for the extended M. S. S network.

Speaker Change: The remaining amount of approximately 320 million was held in cash and cash equivalents as of December 31, 2024, and will be used in 2025 to fund infrastructure for the extended NSS network.

Speaker Change: We expect additional advanced service payments under the infrastructure prepayment she continues or the duration of the construction and launch of this new network.

Rebecca Clary: This activity is more fully disclosed in our November 1st and 7th 8K filings and in our 10K, which we plan to file with the SEC tomorrow after the markets close.

Speaker Change: This activity as more fully disclosed in our November 1st and seventh 8-K filings and in our 10-K, which we plan to file with the SEC tomorrow after the markets close.

Rebecca Clary: Now turning to our guidance, which we announced at our Analyst and Investor Day on December 12. For 2025, we are expecting revenue to be between $260 million and $285 million, representing 9% year-over-year growth at the midpoint and an adjusted EBITDA margin around 50%. Our forecasted adjusted EBITDA margin reflects short-term compression driven by strategic investments to support long-term growth initiatives, primarily relating to further development of our EXCON RAND terrestrial solution and expansion of our MSS product portfolio. During the analyst day, we also reiterated a long range forecast reflecting the updated services agreement. During the first full year of service provided over the extended MSS network, we expect total revenue to double the 2024 amount, reaching $500 million, and to generate robust margins in excess of 54%.

Speaker Change: Now turning to our guidance, which we announced at our analyst and Investor Day on December 12.

Speaker Change: For 2025, we are expecting revenue to be between $260 million and 285 million, representing 9% year over year growth at the mid point and an adjusted EBITDA margin around 50%.

Speaker Change: Our forecasted adjusted EBITDA margin reflects short term compression driven by strategic investments to support long term growth initiatives, primarily relating to further development of our ex con ran terrestrial solution and expansion of our M SaaS product portfolio.

Speaker Change: During the analyst day, we also reiterated a long range forecast, reflecting the updated services agreements.

Speaker Change: During the first full year of service provided over the extended MSS network. We expect total revenue to double the 'twenty 'twenty, four amount, reaching $500 million and to generate robust margins in excess of 54%.

Rebecca Clary: This forecast excludes certain key growth opportunities that are too difficult to forecast with precision, such as large terrestrial spectrum and XCOM RAN deployments, however, this in no way means we are not confident in our future contributions. I want to emphasize that these targets factor in our expectations regarding market position, growth drivers, and operational capabilities.

Speaker Change: This forecast excludes certain key growth opportunities that are too difficult to forecast with precision such as large terrestrial spectrum and ex com ran deployment. However, this in no way means we were not confident in our future contributions.

Speaker Change: I want to emphasize that these targets factor in our expectations regarding market position gross drivers and operational capabilities.

Rebecca Clary: In just over two years, our Wholesale Capacity Partnership has transformed Globstar with a series of significant planned network investments. These investments provide us with a foundation to deliver sustainable increased earnings while we position the company for future growth. We believe we have the right strategy and execution capability to deliver on these commitments while creating sustainable long-term shareholder value.

Speaker Change: And just over two years, our wholesale capacity partnership has transformed globalstar with a series of significant planned network investments. These investments provide us with a foundation to deliver sustainable increased earnings while we position the company for future growth.

Speaker Change: We believe we have the right strategy and execution capability to deliver on these commitments, while creating sustainable long term shareholder value.

Rebecca Clary: Additionally, this outlook underscores several key themes. First, our ability to consistently deliver strong top line growth while maintaining healthy margins. Second, our disciplined approach to balancing growth investments. And finally, our confidence in the expanding market opportunities ahead of us.

Speaker Change: Additionally, this outlook underscore several key themes first our ability to consistently deliver strong topline growth, while maintaining healthy margins.

Speaker Change: Our disciplined approach to balancing growth investments.

Speaker Change: And finally, our confidence in the expanding market opportunities ahead of us.

Paul Jacobs: With that, I'd like to turn the call over to Paul. Thanks, Rebecca. It's great to be on the call with all of you today. I'm very pleased with our strong performance in 2024 and the recent progress we've made on commercial and operational basis. So I'll start off with a high level review and then update on those topics before providing an overview of our expectations.

Paul: With that I'd like to turn the call over to Paul.

Paul: Thanks, Rebecca it's great to be on the call with all of you today.

Paul: I'm very pleased with our strong performance in 2024 and the recent progress we've made on commercial and operational basis.

Paul: So I'll start off with a high level review and then update on those topics before providing an overview of our expectations for 2025.

Paul Jacobs: First, I'll just say it was great to be back at NASDAQ a few weeks ago to ring the opening bell, and, you know, it really signifies a new stage for Globstar. Obviously, I've been there and experienced many milestones at NASDAQ. actually shown by pictures on the walls and some innovations that are been involved in developing and that's now in the museum and we added a Global Star Satellite model into the NASDAQ museum.

Paul: First of all I'll, just say it was it's great to be back at NASDAQ a few weeks ago to ring the opening bell and that's really signifies a new stage for globalstar.

Paul: Obviously, you've been there and experienced any milestones Nasdaq.

Paul: Actually shown by pictures on the walls and some innovations that are.

Paul: Involved in developing and Thats now in the museum and we added a globalstar satellite model into the NASDAQ Museum.

Paul Jacobs: And so this event really marked another moment that our team can be proud of. It's clear to me that Globastar is very well positioned in both the satellite and terrestrial connectivity markets, both of which present significant growth opportunities for the company. We've invested billions of dollars in the satellite business, and we're happy to say that hundreds of millions of devices can connect to our satellites. And that number continues to grow both for our wholesale and our direct For more information, visit www.nasa.gov Until now. Globstar's 500,000 plus deployed active have only been able to support one-way tracking and telemetry applications.

Paul: And so this event really marked another moment that our team can be proud of.

Paul: It's clear to me that Globalstar is very well positioned in both the satellite and terrestrial connectivity markets, both of which presents significant growth opportunities for the company.

Paul: We've invested billions of dollars in the satellite business and we're happy to say that hundreds of millions of devices connected back to our satellite and.

Paul: That number continues to grow both for our wholesale and our direct businesses.

Paul: Until now.

Paul: Globalstar is 500000 plus deployed active units.

Paul: I've only been able to support one way tracking and telemetry applications. So we could do tracking around the world very well, but lack the ability to communicate back to the device for command applications.

Paul Jacobs: So we could do tracking around the world very well, but lack the ability to communicate back to the device for command app. And I'm proud that our refocused product development team. This hard work under new leadership has enabled us to deliver the full two-way satellite commercial IoT. We have an extremely low cost structure, which leverages the investments in our wholesale. And with our time-tested Uplink and our new state-of-the-art Downlink, we intend to aggressively compete for subscribers in markets that already exist and are right We believe that our globally licensed L&S bands offer a unique asset to anyone looking to deliver content.

Paul: And I'm proud that our refocused product development team, whose hard work under new leadership has enabled us to deliver the full two way satellite commercial Iot solutions.

Paul: We have an extremely low cost structure, which leverages the investments in our wholesale business.

Paul: And with our time tested uplink and our new state of the art downlink, we intend to aggressively compete for subscribers in markets that already exist and are right for disruption.

We believe that our global you licensed Ellen S bands offer unique asset to anyone looking to deliver productivity.

Paul Jacobs: Our dedicated spectrum resource, which is almost 4x that of any other D2D player currently, and our bent pipe architecture differentiate. Everyone else has to borrow spectrum or put up more larger satellites to match where we are.

Paul: Our dedicated spectrum resource, which is almost forex that of any other DD player currently and our bent pipe architecture differentiate global store.

Paul: Everyone else has to borrow spectrum or put up more larger satellites to match, where we already are and we're not standing still.

Paul Jacobs: and we're not standing. It's an exciting time in D2D. We've been a leader in the space with our transformational deal and we'll continue to innovate.

Paul: It's an exciting time at <unk>, we've been a leader in the space with our transformational deal and we will continue to innovate.

Paul Jacobs: And of course, with any new technology that's rapidly evolving comes a lot of speculation. So I just want to take the opportunity to address a few inquiries. First of all, we've been in development with our wholesale customer since long before other providers made their direct-to-sell announcements. We enabled the first commercial D2D service years ago, and we've been successfully operating it since that time with progressively improved. We believe that speculation about the capabilities of other services has been overstated. No other direct to cellular service provider is currently supporting hundreds of millions of devices with years of experience operating at commercial scale, and none of deployed outside the US across While it's early days for others, we're in development for our next constellation.

Paul: And of course with any new technology. This rapidly evolving comes a lot of speculation. So I just wanted to take the opportunity.

Paul: Address a few inquiries we've received.

Paul: First of all we've been in development with our wholesale customer since long before other providers made their direct to sell announcements we enable the first commercial <unk> service years ago, we've been successfully operating at since that time with progressively improved features.

Paul: We believe that speculation about the capabilities of other services has been overstated no. Other direct to cellular service provider is currently supporting hundreds of millions of devices with years of experience operating at commercial scale and deploy it outside the U S across contiguous fans.

Paul: Well, it's early days for others. We are in development for our next constellation we've extended our initial contract with a customer funding of significant investment for new and improved satellite constellations.

Paul Jacobs: We've extended our initial contract with our customer, funding a significant investment for new and improved satellite. Structure of our relationship is one in which we pre-sold certain capacity and our revenues are unaffected by utilization. except of course the extent that additional satellites may be needed to provide increased capacity or capabilities.

Paul: The structure of our relationship is one in which we pre sold certain capacity and our revenues are unaffected by utilization.

Paul: Of course, the extent that additional satellites may be needed to provide increased capacity or capabilities in the future.

Paul Jacobs: As for the speculation around the regulatory landscape and the potential for sharing our spectrum, I just want to say that we've been at this for a long time. Globstar has worked successfully with various administrations for over 25 years, and these systems take years to plan and operate for decades. And there are now hundreds of millions of consumers globally who have access to life-saving and convenient connectivity through our constellation. Our spectrum is being actively used to provide these and other important services available globally. And that's what regulators want to see. And the regulatory landscape has fostered a wave of innovation in the satellite As recent announcements have shown, there is no lack of competition in the provision of direct cellular.

Paul: As for the speculation around the regulatory landscape and the potential for sure in our spectrum just wanted to say that we've been at this for a long time a couple of starts worked successfully with various administrations for over 25 years.

Paul: Systems take years to plan and operate for decades, and there are now hundreds of millions of consumers globally without access to lifesaving and convenient connectivity through our constellation our spectrum is being actively used to provide these and other important services available globally.

Paul: What regulators want to see in the regulated regulatory landscape.

Paul: As fostered a wave of innovation in the satellite industry.

Paul: As recent announcements have shown there is no lack of competition in the provision of direct cellular services.

Paul Jacobs: We provide mission-critical connectivity that saves lives, and we continue to launch new technologies using our spectrum. Our bent pipe satellite architecture is uniquely suited to enable the rapid deployment of new innovation, and the certainty of our spectrum position for over 30 years has enabled us and our customers to make billions of dollars of investments in satellites, ground networks, and research and development. We believe we're well-positioned with our arrangement, with our wholesale capacity customer, and with the current and future growth opportunities. Our unique financial arrangement provides network funding enabling us to create valuable capacity. at a very competitive Even with our spectrum advantage and wholesale agreements, we do remain considerably smaller than certain of our direct competitors.

Paul: We provide mission critical connectivity that save lives and we continue to launch new technologies using our spectrum.

Paul: Our bent pipe satellite architecture is uniquely suited to enable the rapid deployment of new innovations and the certainty of our spectrum position for over 30 years has enabled us and our customers to make billions of dollars of investments in satellite ground networks in research and development.

Paul: We believe we're well positioned with our arrangement with our wholesale capacity customer and with current and future growth opportunities.

Paul: Our unique financial arrangement provides network funding, enabling us to create valuable capacity solutions.

Paul: Very competitive price point.

Paul: Even with our spectrum van German wholesale agreements.

Paul: We do remain considerably smaller than certain of our direct competitors and we're working to close that gap and are now well positioned to do so aggressively.

Paul Jacobs: And we're working to close that gap and are now well positioned to do so.

Paul Jacobs: Now the terrestrial side of it. Globstar's BAND N53 and XCOM RAN capabilities present partners with valuable mission-critical applications and connectivity solutions that are high-performance and reliable. The XCOM RAN team has met every technical milestone put in front of them and have continued to develop technologies that will allow us to better serve our customers. We're believers in the future of automation in both consumer industrial enterprise and defense environment, and all benefit from connectivity. that we are well suited. Also, the Band 53 ecosystem has advanced with XCOM RAND and other technologies and ready to generate. We're expanding the sales force both internally and externally to push both Band and 53 and Xcom ran out into the world and expect to make tangible progress.

Paul: Now the terrestrial side of the business Globalstar band 53, and XCOM ran capabilities present partners with valuable mission critical applications and connectivity solutions that are high performance and reliable.

Paul: <unk> Com ran team has met every technical milestone put in front of them and have continued to develop technologies that will allow us to better serve our customers. We're believers in the future of automation in both consumer industrial enterprise and defense environment, and all benefit from connectivity solutions.

Paul: We are well suited to deliver.

Paul: Also the band 53 ecosystem has advanced with ex Com ran and other technologies and are ready to generate cash we're expanding our sales force both internally and externally to push both band 53, and X com ran out into the world and I expect to make tangible progress this year.

Paul Jacobs: Now to update on some of the projects we've First and very importantly, we detailed in our November 1st Form 8K an updated service agreement with our wholesale customer, which demonstrates continued investment in support of product and service development. While there are other options, our team and our assets continue to be the chosen. Under these updated agreements, we'll maintain 100% of all terrestrial MSS and other revenue while continuing to allocate 85% of our network capacity for satellite services to the customer across both existing and new satellites. The remaining 15% capacity will continue serving our direct MSS customers, ensuring we maintain our commitment to our diverse and growing Further, we've achieved a major milestone in our partnership with Parsons Corporation, successfully demonstrating our software-defined satellite communication solution using our low-Earth orbit constellation.

Paul: Now to update on some of the projects we have discussed.

Paul: First and very importantly, we detailed in our November 1st form 8-K, and updated service agreement with our wholesale customer demonstrates continued investment in support of product and service development.

Paul: While there are other options our team and our assets continue to be the chosen partner under these updated agreements will maintain a 100% of our terrestrial MSS and other revenue, while continuing to allocate 85% of our network capacity for satellite services to the customer across both existing and new satellites remaining 15% capacity will continue serving our direct MSS.

Paul: Customers, ensuring we maintain our commitment to our diverse and growing customer base.

Paul: Further we've achieved a major milestone in our partnership with Parsons Corporation successfully demonstrating our software defined satellite communication solution using our lowest orbit constellation.

Paul Jacobs: This first-of-its-kind demonstration in North America represents a breakthrough in providing mission-critical solutions for RF congested environments, particularly in the public sector and defense applications.

Paul: This first of its kind demonstration North America represents a breakthrough in providing mission critical solutions for RF congested environments, particularly in the public sector and defense applications. The proof of concept initiated in early 2024 is advancing towards commercial service.

Paul Jacobs: Proof of Concept initiated in early 2024 is advancing towards commercial service, positioning us to capture significant opportunities in these high value As we have said, this opportunity has the potential to be a significant annual contributor to revenue and cash flow, and our confidence in it remains Thank you. Thank you.

Paul: Joining us to capture significant opportunities in these high value markets.

Paul: As we have said this opportunity has the potential to be a significant annual contributor to revenue and cash flow and are confident in our covenant and it remains high.

Paul Jacobs: Our technology leadership continues to strengthen as evidenced by our successful completion of the first 5G data call on our band N53 spectrum, achieving impressive speeds of 100 megabits per second download and 60 megabits per second upload in 10 megahertz. This breakthrough enables advanced applications such as robotics, autonomous vehicles, and augmented reality, while offering our partners a versatile, fully licensed channel for enhanced wireless For more information, visit www.fema.gov On the regulatory front, we enhanced our long-term operational foundation with a 15-year renewal of our blanket mobile earth terminal authorization from the FCC, ensuring continued authority to operate our mobile earth terminals with satellites throughout the United States and its territory.

Paul: Our technology leadership continues to strengthen as evidenced by our successful completion of the first five G data call on our band 53 spectrum, achieving impressive speeds of 100 Megabits per second download and 60 Megabits per second upload and 10 megahertz of spectrum.

Paul: This breakthrough enables advanced applications, such as robotics autonomous vehicles augmented reality, while offering our partners a versatile fully licensed channel for enhanced wireless connectivity.

Paul: Regulatory front, we enhanced our long term operational foundation with a 15 year renewal of our blanket bubble Earth terminal authorization from the FCC, ensuring continued authority to operate or mobile terminals with satellite throughout the United States and its territories.

Paul Jacobs: This builds upon the company winning terrestrial authority in Mexico earlier in the year.

Paul: Built upon the company winning terrestrial authority in Mexico early earlier in the first quarter.

Paul Jacobs: Collectively, these developments reinforce our position as a leader in satellite communications and innovative spectrum solutions, while expanding our market reach and strengthening revenue potential across multiple In summary, we believe we're well positioned to continue to execute on our long-term growth strategy. We're seeing results from investments we've made so far and are excited for 2025 and the years ahead. We've spent a significant amount of time identifying markets that we can grow in and designing proprietary solutions to address the need of customers for years ahead.

Paul: Collectively these developments reinforce our position as a leader in satellite communications and innovative spectrum solution, while expanding our market reach and strengthening revenue potential across multiple sectors.

Paul: In summary, we believe we're well positioned to continue to execute on our long term growth strategy. We're seeing results from investments. We've made so far and are excited for 2025 in the years ahead. We've spent a significant amount of time identifying markets that we can grow in and design and proprietary solutions to address the need of customers for years ahead further to this we have been increasing.

Paul Jacobs: Further to this, we've been increasing our team at Globestar with professionals that know how to win, grow, and scale businesses, and I could not be more excited about our And finally, I just want to thank all my colleagues at Globastar for their dedication and hard work in 2024.

Paul: Our team at Globalstar with professionals that know how to win and grow in scale businesses and I cannot be more excited about our future.

Paul: And finally I just wanted to thank all my colleagues at Globalstar for their dedication and hard work in 2024, So I will turn the call back to the operator for Q&A.

Operator: So, I'll turn the call back to the operator for a Q&A, and thanks everybody. Thank you.

Paul: Thanks, everybody.

Operator: At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster.

Speaker Change: Thank you at this time, we will conduct a question and answer session.

As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Please standby, while we compile the Q&A roster.

Michael Crawford: First question comes from the line of Mike Crawford with B. Reilly Securities. Go ahead, Mike. Your line is open. Thank you. We did see the constellation details for the extended MSS network constellation with Over 50 software-defined aurora satellites that have, I believe, what you refer to as state-of-the-art downlink, where you're requesting to have alternating levels of power that you can put down. Is that correct?

Speaker Change: First question comes from the line of Mike Crawford with B Riley Securities Go ahead, Mike Your line is open.

Speaker Change: Thank you we did see the constellation details for the extended MSS network for installation with <unk>.

Speaker Change: Over 50 software defined Aurora satellites.

Speaker Change: That have.

I believe what you referred to as the state of the art, John Linker, you're requesting to have.

Speaker Change: Alternating levels of power that you can put down can you.

Paul Jacobs: And can you help explain what that attribute brings? I mean, so those Aurora satellites have beamforming capabilities. And obviously, yeah, we've been able to control power. And it's a digital satellite, digital satellite. So there's the processing that can be done is minimal, but it does allow us to direct signals to different antenna elements.

Speaker Change: Is that correct and can you.

Speaker Change: Explain what that attribute brains.

Speaker Change: So those Aurora satellites have.

Speaker Change: Beam forming capabilities.

Speaker Change: And obviously, we've been able to control power.

Speaker Change: And it's a digital satellite.

Speaker Change: Digital satellite so there is.

Speaker Change: The processing that can be done is minimal, but it does allow us to direct signals to different antenna elements.

Michael Crawford: Okay, thank you. And then what...

Speaker Change: Mhm, Okay. Thank you and then.

Speaker Change: What.

Michael Crawford: Is there any update you can give on the timing of when these satellites might start to launch or be fully deployed? We do know now that there's been, you know, design of the architecture for almost a year and a half now, I think. So any update on timing of when these could potentially launch?

Speaker Change: Is there any update you can give on the timing of when.

Speaker Change: These satellites might start to launch will be fully deployed we do know now that.

Speaker Change: There has been.

Speaker Change: Design.

Speaker Change: The architecture.

Speaker Change: Almost a year and a half now I think.

Speaker Change: So any update on timing of when these could potentially launch.

Paul Jacobs: Yeah, we haven't we haven't given an update on that yet. And then related, there's a number of new ground infrastructure and gateways you'll be putting in place. Is that something that's going to be occurring this year? That's all underway. We're, you know, there's a lot of stuff that has to be done for gateways, particularly when they're greenfield. So, you know, Starts with finding the right place and acquiring the land if it's a, you know, from the ground up, built from ground up or finding the right teleport. just a lot of a lot of stuff that needs to be done.

Speaker Change: We haven't we haven't given an update on that yet.

Speaker Change: Unfortunately.

Speaker Change: And then related.

Speaker Change: A number of new ground.

Speaker Change: Infrastructure and gateways, you'll be putting in place or is that something thats going to be occurring.

Speaker Change: This year.

Speaker Change: That's all underway.

Speaker Change: A lot of stuff.

Speaker Change: Stuff that has to be done for gateways, particularly when there are greenfield.

Speaker Change: So.

Speaker Change: Starts with finding the right place and acquiring.

Speaker Change: Land.

Speaker Change:

Speaker Change: From a ground up build from ground up or finding the right teleports.

Speaker Change: Just a lot of lot of stuff that needs to be done and then there's all the issues of getting the right amount of connectivity and redundancy and resiliency all those things so that processes fairly long term so.

Paul Jacobs: And then there's all the issues of getting the right amount of connectivity and redundancy and resilience. all those things. So that process is fairly long term. So yeah, so that's all that stuff.

Speaker Change: Yes, so that's all that stuff is underway.

Michael Crawford: Okay, thank you.

Michael Crawford: I'll just ask one more switching gears to XCOM, Rand. We do know that initially that you were designing that to work with unlicensed CBRS spectrum. Now, I believe you're done incorporating band N53 into the solution more natively, but is there any progress on your one?

Speaker Change: Okay. Thank you I'll just ask one more switching gears to <unk> com brand so.

Speaker Change: We do know that initially that you we're designing that to work with unlicensed CBR spectrum.

Speaker Change: Now I believe you're done incorporating band 53 into this solution.

Speaker Change: Natively, but is there any.

Speaker Change: Hi, guys.

Paul Jacobs: Large retail customer or other customers that we could look to or maybe hold forth as some guideposts to look for accomplishments that we can measure you against in this year. Yeah, I mean, it's like I've said before, and I experienced this in Qualcomm, too, like you have a lead customer for a new technology, you keep building, it's a great tailwind, but you, you know, you're subject to the customer's decision on when they decide to push the button and roll out. And it doesn't necessarily have to do with just the communication system. So we're in the place where we've done tremendous amount of work, we've built out the to the technical requirements, and actually now, what a bunch of the team is working on is being able to cost reduce, come down the cost curve so that we can be even more effective and more competitive with other potential solutions.

Speaker Change: Your one.

Speaker Change: Our large retail customer or other customers.

Speaker Change: But we could.

Speaker Change: Look two or maybe hold for it is.

Guidepost for accomplishments that we can measure you against this year.

Yes.

Speaker Change: It's like I've said before and I experienced this and Qualcomm to like you have a lead customer for our new technology.

Speaker Change: Building, it's a great tailwind, but you you're subject to the customers' decision on when they decided to push the button and roll out and it doesn't necessarily have to do with just the communication system. So we're in the place where we've done tremendous amount of work we do.

Built out to the technical requirements and actually now.

Speaker Change: What a bunch of the team is working on is being able to cost reduce come down the cost curve. So that we can be even more effective and more competitive with other potential solutions. So we don't have to just be at the high end of the market, but also kind of a cross being competitive with Wi Fi or <unk>.

Paul Jacobs: So we don't have to just be at the high end of the market, but also kind of across, you know, being competitive with Wi-Fi or mesh Wi-Fi solutions that that we see or other 5G small cell kind of solutions. And so we're really focused in on that as we sort of wait for the customer to make their own decisions about rollout. And then, of course, we're also working on kind of the pipeline of other opportunities as well.

Speaker Change: <unk> Wi Fi solutions that.

Speaker Change: That we see or other <unk>.

Speaker Change: Small cell solution so.

Speaker Change: We're really focused in on that as we sort of wait for the customer to make their own decisions about rollout and then of course, we're also working on.

Speaker Change: Kind of a pipeline of other opportunities as well.

Michael Crawford: All right.

Speaker Change: Okay.

Michael Crawford: Thank you very much.

Speaker Change: Alright, Thank you very much thank.

Operator: Thank you.

Operator: One moment for our next question.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Simon Flannery: The next question comes from the line of Simon Flannery with Morgan Stanley. Go ahead. Your line is open. Right, thank you very much. Good evening. Rebecca, you talked about EBITDA margins facing some short term pressures, and you have the long term guidance of getting back to the sort of mid 50s or so.

Speaker Change: The next question comes from the line of Simon Flannery with Morgan Stanley Go ahead. Your line is open.

Speaker Change: Alright. Thank you very much good evening, Rebecca you talked about EBITDA margins facing some short term pressures.

Speaker Change: Do you have the long term guidance of getting back to the sort of mid <unk> or so.

Simon Flannery: So should we think about 25 being the trough on EBITDA margins and then gradually improving or is it more it'll sort of stay here until you get the extended MSS?

Speaker Change: So should we think about 25 being the trough on EBITDA margins, and then gradually improving or is it more it will sort of stay here until you get the extended time I met MSS.

Rebecca Clary: and related to that and any color you can give us on CAPEX free cash flow for 25 And then a second one for Paul, just on the expanded MSS, you obviously have the MDA deal publicly, it'd just be really helpful if you could give us any color on what the timeline looks like, you know, is three years, a kind of a reasonable estimate of, you know, from from kind of signing the contract to when we start to see the constellation get launched and deployed. Thanks. Thanks for the question, Simon. So on the first one, for the margin compression, I would say it's in the 12 to 18 month timeline.

Speaker Change: And related to that any color you can give us on capex free cash flow for 25.

Speaker Change: And then second one for Paul just on the expanded MSS you, obviously have the MTA deal publicly it just be really helpful. If you could give us any color on what the timeline looks like three.

Speaker Change: Three years of kind of a reasonable.

Speaker Change: Estimate of.

Speaker Change: From kind of signing the contract when we start to see the the constellation got launched and deployed thanks.

Speaker Change: Yeah.

Speaker Change: Thanks for the question Simon So on the first one for the margin compression I would say it's in the 12 to 18 month timeline, so certainly not waiting on the extended MSS networks city.

Rebecca Clary: So certainly not waiting on the extended MSS network to be deployed since the, the, the investments are more related to XCOM RAN and MSS product development. So those we expect to generate revenue in the, you know, kind of shorter timeframe.

Speaker Change: <unk> since the <unk>.

Speaker Change: The investments are more related to extra Moran and MSS product development.

Speaker Change: So those we expect to generate revenue.

Speaker Change: Kind of shorter timeframe.

Rebecca Clary: And then your second question, sorry, I'm pre-cash flow. Yeah, just any color you could give us on how CapEx free cash might look like this year. Okay, so the, so operating cash, it was really strong in 2024. And you'll see more details of that when we file the 10k tomorrow. But we did have a little bit of color in the earnings release. As we you know, there's kind of each phase of the wholesale arrangement has its own nuances. So for phase two, some of that capex is funded out front and shows up in financing, and then it'll get reimbursed over time.

Speaker Change: And then your second question, sorry on free cash flow.

Speaker Change: Yes, just any color you could give us on how capex free cash might look like this year.

Speaker Change: Okay. So.

Speaker Change: The.

Speaker Change: So operating cash it was really strong in 2024, and you'll see more details of that when we file the 10-K tomorrow, but we do we did have a little bit of color in the earnings release.

Speaker Change: As we kind of each phase of the wholesale arrangement has its own nuances. So for phase two some of that Capex is funded upfront and shows up in financing and then it will get reimbursed over time.

Rebecca Clary: And then for the extended MSS network, we have funding that we're receiving today, a lot of that is hitting operating cash flow, because it's deferred revenue. So advanced service payments that will earn over the course of the satellite's life. So it's very much a timing issue and kind of how you think about reimbursable capex when you're computing free cash flow. Hopefully that's a helpful color. I know it's not very... I'm just trying to think about the modeling aspect of it, yeah. I know there's a lot of moving parts. Yeah. Right, so, yeah, sorry, I thought you were done.

Speaker Change: And then for the <unk>.

Speaker Change: Extended MSS network, we have funding that we're receiving today a lot of that is hitting.

Speaker Change: Operating cash flow, because it's deferred revenues or that service payments that will earn over the course of the satellites life. So it's very much a timing issue and kind of how you think about reimbursable capex. When you are computing, our free cash flow.

Speaker Change: Hopefully yes.

Brian: Thanks, Brian.

Speaker Change: The modeling also from Dr. <unk> Yang.

Speaker Change: So lot of moving parts, yes.

Speaker Change: Alright so.

Paul Jacobs: Go ahead, Paul. No, I was just going to talk to the next one. No, I was just going to give a little bit more color, Simon. So, we've incurred about $250 million to date under the Phase II satellites, and $155 million of that has been funded by our customer, that number, and the balance by us, and, you know, through operating cash flow, and the objective through that funding agreement is to pay for the upfront CapEx 50-50, right? So, we've probably got another $150 million to get through that first launch of the satellites, and again, that will be split evenly.

Speaker Change: Yes, sorry go.

Speaker Change: Go ahead Rob.

Rob: No I was just going to talk to the next question. So.

Speaker Change: Sure.

Speaker Change: No I was just going to get a little more color Simon so we've.

Speaker Change: Incurred about $250 million.

Speaker Change: To date under the phase two satellites and.

Speaker Change: $155 million of that has been funded by our customer that number in the balanced by us and through operating cash flow and the objectives that funding agreement is to pay for the upfront Capex 50, 50, right. So we've probably got another $150 million.

Speaker Change: Got through that first launch of the satellites.

Speaker Change: And again that will be split evenly hopefully that's helpful with the launch still expected to happen in <unk>.

Simon Flannery: Hopefully, that's helpful with the launch still expected to happen in 2025. Okay, thank you.

Speaker Change: 25.

Speaker Change: Okay.

Paul Jacobs: All right, then on the MSS timeline, like I said to Mike, I mean, we can't really we haven't updated that and announced that and certainly customers that work with us are sensitive to the timing of their service launches. So yeah, I can't really Okay, understood. Thank you.

Speaker Change: Thank you.

Mike Crawford: Alright, and then on the MSS timeline like I said to Mike.

Mike Crawford: I cant really we haven't updated that.

Speaker Change: Certainly customers that worked with us are sensitive to the timing of their service launches. So.

Mike Crawford: I can't really comment too much firmer.

Speaker Change: Okay understood. Thank you.

Simon Flannery: Maybe just one more on the the two-way IOT. It was nice to see that coming through and it sounds like there's a nice opportunity there. When does that become material to the numbers? Is that something we'll see in 25? Or is it still going to be small for a couple of years until that scale? I mean, we're expecting to start. I mean, we're in beta right now. So as we went into beta with customer We were looking for customers that could rapidly turn on, but I would say this year, I think it's the beginning of the ramp.

Speaker Change: Maybe just one more on the two way your Iot It was nice to see that coming through and it sounds like there is.

Speaker Change: Nice opportunity there when does that become material to the numbers is that something we'll see in 'twenty five or is it still going to be small for a couple of years until that scales.

Speaker Change: I mean were expecting at the start.

Okay.

Speaker Change: Sorry go ahead Paul.

Speaker Change: I mean, we're in beta right now so as we went into beta with customers we were looking for our customers.

Speaker Change: Rapidly turn on but I would say this year I think at the beginning of the ramp.

Paul Jacobs: And then I would say next year, we would expect to get. very well into the deployment of it. But, you know, if it turns out that somebody's got something that hits, you know, we're, we are set up for manufacturing, and that's, you know, that will be ready to go. It's a little bit dependent on our partners building out their particular applications with it. Obviously, some of our customers that we're talking to have two-way based devices already. So in some cases, relatively easy for them to swap a modem in. And so we're hopeful that some of those can come to market sooner, but I can't commit to that at this point.

And then I would say next year, we would expect to get.

Speaker Change: Very well into the deployment of it but if it turns out that somebody who has got something that hits.

Speaker Change: We are setup for manufacturing and that's that will be ready to go into a little bit dependent on our partners building out their particular applications with it obviously some of our customers that we're talking to have two way based devices already so in some cases realm.

Speaker Change: We easy for them to swap a modem and and so we're hopeful that some of those can come to market sooner, but I can't commit to that at this point, it's really demand seems like youre getting good feedback from the field.

Paul Jacobs: It's really dependent. It seems like you're getting good feedback from the field. We are definitely getting good feedback, which is good. We spent a lot of time. hammering on this thing. It is beta, so every so often there's something, but we were able to turn those around when somebody has an issue with something or, you know, a feature request for the future, that kind of stuff. So it's been actually quite a good beta process for us. And obviously having some customers that know, you know, they've been banging on the downlink, which we haven't been able to supply in the past.

Speaker Change: We are definitely getting good feedback, which is good we spent a lot of time hammering on this thing. It is data. So every so often that or something but we were able to turn those those.

Speaker Change: Around when somebody has an issue with something or a feature request for the future that kind of stuff. So it's been actually quite a good data process for us.

Speaker Change: And obviously, having some customers that know they have been banging on the downlink, which we haven't been able to supply.

Paul Jacobs: So it's really good to see, you know, packets flying over that part of the network too.

Speaker Change: In the past so it's really good to see packaged flying over that part of the network too.

Speaker Change: Thanks, a lot.

Operator: One moment for our next question.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Walter Piecyk: Next question comes from the line of Walter Piecyk with LightShed Partners. Go ahead. Your line is open. Thanks. In the filing or petition that you made to the FCC. Recently, you referenced Basically, this new satellite, this new constellation, providing the essential quote, the essential foundation for a variety of new Innovative Directed Device Satellite features on supported devices. Can you just kind of provide a little bit more color on what some of those new innovative features might be? It's kind of the same answer I gave before. So obviously we have a customer that, or even set of customers that are sensitive to kind of their feature roadmap or service launch timing and so forth.

Walter: Next question comes from the line of Walter <unk> with Light shed partners go ahead. Your line is open.

Walter: Thanks.

Speaker Change: The filing a petition that you made to the FCC.

Walter: Recently you referenced.

Walter: Basically this new satellite constellation.

Walter: Providing the essential quote the central foundation for a variety of new <unk>.

Walter: Innovative directed device satellite features on supported devices can you just kind of provide.

Walter: A little bit more color on.

Walter: Some of those new innovative features might be.

Walter: It's kind of the same answer I gave before so obviously, we have a customer thats.

Walter: Or even set of customers that are sensitive to kind of there.

Walter: Future roadmap or service launch timing and so forth so.

Paul Jacobs: So the only thing that I think, you know, I could point to is just that the satellites do have some new capabilities to them. And so I would expect that, you know, those will be used by our customers. Is there a way to when you kind of conceptualize the market user demand? The what that what those new innovative features address in terms of number of years before the consumer demands more and you know, does that how many years do you think I basically does that get you before you go to maybe constellation for with potentially even greater and new features.

Walter: The only thing that I think I.

Walter: I could point to is just that the satellite.

Walter: We do have some new capabilities to them.

Walter: So I would.

Walter: Those will be used by our customers.

Walter: Is there a way to.

Walter: When you kind of conceptualize the market user demand.

Walter: The what that what those new innovative features address.

Walter: In terms of number of years before the consumer demands more.

Walter: Does that how many years do you think I basically does that get you before you got maybe constellation for.

Walter: With potentially even greater.

Walter: Our new.

Walter: Features.

Paul Jacobs: uh gosh you know projecting what the consumer is going to demand and what the price points are going to be is kind of hard to do i mean you know i've I've already talked, you know, a lot about the fact that kind of the field of dreams and the expectation that consumers will demand these services and they'll be willing to spend. Significant amounts of incremental dollars. I mean, as you know, you know, back in Qualcomm, we built a video service in 3G days called MediaFlow, and it was an incremental cost to your service. And limo drivers in Vegas loved it, but not that many other people were willing to pay extra for that kind of an incremental service.

Walter: Sure.

Walter: Gotcha.

Walter: Projecting what the consumer is going to demand and what the price points are going to be kind of hard to do I mean.

Walter: I've already talked.

Walter: What about the fact that.

Walter: There isn't a proven business model for broadband.

Walter: Kind of Netflix in the mountains broadband out of coverage. Most people are in coverage spend very little time out of coverage, except for maybe dead zones or something like that so I think understanding that is something everybody is watching carefully certainly there is.

Walter: Some companies that are building.

Walter: The field of dreams.

Walter: The expectation that consumers will demand it services and there would be willing to spend.

Walter: Significant amounts of incremental dollars.

Speaker Change: As you know back in Qualcomm, we built a video service in three days called media flow and it was an incremental cost to your service and limo drivers in Vegas loved it but not that many other people are willing to pay extra for that kind of an incremental service.

Paul Jacobs: So, you know, maybe it's a little bit like that. How much will you pay for? Video Service Outside of Coverage. I don't think that we've seen that that model is proven at all. So until we see that, we see other kinds of demand, I think it's, you know, it's unknown. Obviously, there are there are investors who believe heavily in this and are investing heavily in this. But you know, you and I have been through a number of these technology cycles. So it's not clear which ones take off and which ones don't. And I think what is proven is that there's clear benefit for safety and security.

Walter: Maybe it's a little bit like that how much will you pay for.

Speaker Change: Video service outside of coverage.

Walter: I don't think that we've seen that that model.

Walter: His proven at all so until we see that we see other kinds of demand I think it's yes. It is.

Walter: Unknown, obviously, there are there are investors who bought.

Walter: <unk> heavily in this and are investing heavily in this but.

Walter: And I have been through a number of these technology cycles. So.

Walter: It's not clear, which ones to take off and which ones.

Walter: And I think what is proven is that there's clear benefit for safety and security.

Paul Jacobs: And it's being used, it's saving lives. That's good. Whether there's people are willing to pay incremental dollars for more multimedia in their messaging, not known yet. Obviously, want to be able to, you know, serve those kinds of things if necessary. And beyond that, you know, and Iridium went bankrupt decades ago trying to do voice and relatively low speed data outside of cellular coverage. Now admitted that was with a separate device, but still the demand. You know, it was fairly niche. So I think that that's a cautionary tale. And we've been through it as a company in the past.

Walter: It's being used at saving lives.

Walter: Good weather there is people are willing to pay incremental dollars for more multimedia in their messaging.

Walter: Not known yet obviously want to be able to.

Walter: Those kinds of things if necessary.

Walter: And beyond that.

Walter: Globalstar and Iridium went bankrupt decades ago trying to do voice and relatively low speed data outside of cellular coverage now admitted that was with a separate device, but still the demand.

Walter: It was fairly niche.

Walter: So I think that's a cautionary tale and we've been through it as a company in the past. So I would say that we are quite focused on finding those parts of the business that are able to generate.

Paul Jacobs: So I would say that we are quite focused on finding those parts of the business that are able to generate. You know, revenues and profitability that can fund constellations. Fortunately, we have the wholesale business, which does a very good job of funding the constellation. Others, I think, have to prove that their business model will do that. I know it's still early, but is there any indication in terms of location of usage on the direct-to-device stuff, meaning that You know that the often used examples is the stranded hiker in the middle of Utah, but where I'm using it is in Westchester County, and it's helping me text on locations where NIMIs have kept cell sites.

Walter: Revenues and profitability that can fund constellations.

Walter: Fortunately, we have the wholesale business, which does a very good job of funding the constellation of others I think have to prove that their business model will do that.

Walter: I know, it's still early but is there any indication in terms of location of usage.

Walter: On the direct to device.

Walter: <unk>, meaning that.

Walter: The often used examples is the stranded hike or in the middle of Utah, but where I'm using it is in Westchester County.

Walter: Helping me taxed on.

Walter: Locations, where NIM you have kept cell sites do you have any any even if it's anecdotal indication where the product can use so far since being activated.

Paul Jacobs: Do you have any, any, even if it's anecdotal indication where where the product can use so far since being activated? I mean, the ones that the anecdotes you hear are often around something where there's been a natural event or something where the cell service has gone down over a wide area. And that makes sense, because that's where there's a lot of people like even cellular dead zones are relatively small geographic. Region. And certainly uncovered areas are uncovered because not that many people go there. So you're not going to generate massive usage through that. You will provide peace of mind to people.

Walter: I mean, the ones that.

Walter: Anecdotes you hear are often around something where theres been a natural event or something where the self service has gone down over a wide area.

Walter: That makes sense, because thats, where theres a lot of people like even cellular dead zones are relatively small geographic region. So.

Walter: Certainly uncovered areas are uncovered because not that many people go there so youre not going to generate massive usage through that you will provide peace of mind to people I think thats Super important, but then when you have a sort of a.

Paul Jacobs: I think that's super important. But then when you have a sort of a natural event, fire or some weather event, that's where you can see large numbers of people wanting to have some connectivity. But obviously, that's, you know, very, very infrequent and in, you know, and relatively constrained geographical areas.

Walter: Natural event fire or some weather event.

That's where you can see large numbers of people wanting to have some connectivity.

Walter: But obviously that's.

Walter: Very very infrequent.

Walter: And then.

Walter: And relative Royal typically constrained geographical areas.

Paul Jacobs: Maybe I'll ask the question in a different way. I don't disagree in terms of but the consumer might be willing to spend for that infrequent use at that time it's in that location, I guess, has have you is and again, maybe you just don't see this data. But has there been usage? that has extended beyond just in the desert and beyond perhaps the pings that I've been hitting here. I mean, is it being used in multiple locations? Or is it only being used in situations where there's been, you know, kind of like a power outage, you know, whatever it is, you know, national security?

Walter: Maybe I'll ask the question a different way I don't disagree in terms of but the consumer might be willing.

Walter: The spend for that infrequent use at that time, it's in that location I guess have you and again, maybe you could just don't see this data.

Walter: Has there been usage.

Walter: Debt.

Walter: <unk> has extended beyond just in the desert and beyond perhaps the pains that I've been.

Walter: Been hitting here I mean is it being used in multiple locations or is it only being used in situations, where there has been kind of like a power outage whatever it is.

Paul Jacobs: Oh, no, sorry, I didn't mean to say that it was only being used there. I think you know, we have, we have examples of people that got rescued from, you know, being in the mountains and things like that. So I think there, you know, there is usage and look I think that the opportunity to charge a lot to somebody who's in need exists. I don't know whether it's the nicest thing to do, but, you know, kind of a one-time usage thing.

Speaker Change: National Security.

Speaker Change: No sorry, I didn't mean to say that it was only being used there I think we have we have examples of people that.

Speaker Change: Got rescued from being in the mountains and things like that so I think there is usage.

Speaker Change: I think that the opportunity to charge a lot to somebody who is in need exists I don't know whether its a nice thing to do but.

Speaker Change: Kind of a onetime usage thing, but the question is does that build a business model that supports billions of dollars of satellite constellation investment.

Paul Jacobs: But the question is, does that build a business model that supports billions of dollars of satellite constellation investment?

Paul Jacobs: So the way that I- One last one. Yeah, yeah, sorry. I was just gonna say, I mean, the model that seems clear to me for any handset manufacturer is, you know, if they can reduce the replacement cycle time on a large volume, you know, large installed base, that's real money, like small changes in the replacement cycle time. So it's really, I think the business model around having new features and a roadmap of new features is- kind of a proven one, that can that certainly can work. Obviously, the T mobile advertisement was the Super Bowl ad was, you know, talking about providing service to customers of other cellular networks.

Speaker Change: So one.

Speaker Change: One last one yes, sorry.

Speaker Change: I was just going to say I mean, the model that seems clear to me for any handset manufacturer.

Speaker Change: As if they can reduce the replacement cycle time on a large volume.

Speaker Change: Large.

Speaker Change: Installed base, that's real money like small changes in the placement cycle time. So it's really I think the business model around having new features on our roadmap of new features is.

And have a proven one.

Speaker Change: That certainly can work obviously the T mobile advertisement was.

Speaker Change: Super Bowl AD was talking about providing service to.

Speaker Change: Customers of other cellular networks.

Paul Jacobs: So there's, you know, clearly they're looking to try and create some churn, whether that actually is something that can create churn, I I don't know that remains to be seen, but I'm personally a little skeptical of that. sort of given the fact that there are hundreds of millions of people that already have connectivity over our constellation. So, yeah, all these things really do remain to be seen. There's some lessons that we can draw from history and you and I have been at this long enough that, you know, we can draw those lessons.

Speaker Change: Clearly, they're looking to try and create some churn whether that actually is something that can create churn.

Speaker Change: I don't know that remains to be seen but I'm personally a little skeptical of that.

Speaker Change: Just sort of given the fact that there are hundreds of millions of people that already have connectivity over our constellation so.

Speaker Change: Yes, all these things really do remain to be seen there is some lessons that we can draw from history.

Speaker Change: You and I have been at this long enough that we can drive those lessons.

Paul Jacobs: This one last one just kind of drawing upon your You know, long history. And as you pointed out my history as well, thanks for that. You know, Iridium talked about, you know, having their technology now that they've actually finally gone to 3GPP standard, it goes into the chip and You know, theoretically, that makes it easier for the Android world, Samsung, I guess, specifically, to, you know, do for Samsung, what you have effectively done for Apple, is it as easy as it I don't want to put it on them that they describe it, that I think is expected, meaning that, okay, We've got this standard Qualcomm sticks it in the chip, you know, it's available, Samsung says yay or nay, and they just light it up and there's no very little incremental cost and that they can implement relatively quickly to get galaxies with the same functionality that Apple has been able to achieve with you guys.

Speaker Change: Just one last one just kind of drawing upon your.

Speaker Change: Long history in.

Speaker Change: As you pointed out my history as well thanks for that.

Speaker Change: Eric.

Speaker Change: <unk> talked about.

Speaker Change: Having their technology now that they are actually finally go into the <unk> standard it goes into the chip in.

Speaker Change: Theoretically that makes it easier for the Android World, Samsung I guess specifically.

Speaker Change: So to.

Speaker Change: Due for Samsung what you are effectively done for Apple is it as easy as it.

Speaker Change: I don't want to put it on them that they describe it that I think as expected meaning that okay.

Speaker Change: You've got this standard Qualcomm sticks at in the chip.

Speaker Change: Now it's available Samsung says yea or nay and they just light it up and there is no very little incremental cost to them that they can implement relatively quickly to get galaxies with the same functionality that apple has been able to achieve with you guys.

Paul Jacobs: I guess I don't, you know, obviously don't know exactly what they're what they've done. I guess I would say NTN, so the cellular standard is somewhat complex. It's certainly not as efficient, because it was intended to extend off of existing protocols and existing chipset designs and so forth. So, you know, we've been looking at that quite carefully in terms of what, how much overhead You know, it gets added by that and it's substantial. So that will then possibly require some additional follow-on changes to the standard to make that work better. And then I would also say that there's people out there talking about doing geo-based NTN services already.

Speaker Change: I guess.

Obviously, you don't know exactly what their what they've done I guess I would say.

Speaker Change: NTN so the cellular standard.

Speaker Change: It is somewhat complex.

Speaker Change: Certainly not as efficient because it was intended to extend off of existing protocols and existing chipset designs and so forth.

Speaker Change: So we've been looking at that quite carefully in terms of what how much overhead.

Speaker Change: It gets added by that and it's substantial so that will then possibly require some additional follow on changes to the standard.

Speaker Change: Make that work better and then I would also say that it was.

Speaker Change: People out there talking about doing.

Speaker Change: Oh based MTN services already so.

Paul Jacobs: So I think... actually have not looked at it specifically, but that's what I believe the claim is for the the Google Pixels, that they have satellite capability from Geo. So they're, you know, going to a LEO is actually takes some additional effort that was put into some later parts of the standard. The chip manufacturers that we've had some discussions with about that, you know, there there was extra work to be done. So it wasn't just a very simple thing to implement in the in the chips for to go from Geo to LEO also, because, yeah, the movement and so.

Speaker Change: Actually I have not looked at it specifically, but that's what I believe the claim is for the.

Speaker Change: The Google pixel is that they have satellite capability from Geo.

Speaker Change: So they're.

Speaker Change: Going to a Leo is actually takes some additional effort that was put into some later parts of the standard.

Speaker Change: The chip manufacturers that we've had some discussions with about that.

Speaker Change: There was extra work to be done so it wasn't just a very simple thing to implement in the and the chips for to go from Geo Leo also because you have the movement and so forth.

Operator: Got it. Thank you. One moment for our next question.

Speaker Change: Got it thank you.

Speaker Change: Thank you.

Speaker Change: One moment, Sir our next question.

Chris Quilty: The next question comes from the line of Chris Quilty with Quilty Space. Go ahead. Your line is open. Um Yeah, I mean, I think it's relatively simple that there's there are certain providers who have a spectrum solution which is less than optimal, particularly those that are using mobile network operator spectrum. And you know, there's all sorts of opportunity cost issues and potential interference issues, because the beams are wide, and they can overlap terrestrial networks, and so forth. So I think that there's just efforts by some, some other operators to find spectrum, and we're in a good position.

Speaker Change: The next question comes from the line of Chris Quilty with Quilty Space Go ahead. Your line is open.

Speaker Change: Thanks, Paul can you explain to us what's going on with the Big Leo MSS spectrum and some of the filings in deliberations there.

Speaker Change: Yes.

Speaker Change: I think it's relatively simple that theirs.

Speaker Change: There are certain providers too.

Speaker Change: Have a spectrum solution, which is less than optimal particularly those that are.

Speaker Change: Using.

Speaker Change: Mobile network operators spectrum.

Speaker Change: And there's all sorts of opportunity cost issues and potential interference issues because of the beams are wide and they can overlap terrestrial networks and so forth. So I think theres just efforts.

Speaker Change: By some.

Speaker Change: Some other operators to find spectrum and we're in a good position we've been here for 30 years using the spectrum our spectrum has.

Paul Jacobs: You know, we've been here for 30 years, using the spectrum, our spectrum has sort of the highest priority when it comes to coordination. And so I think we're in a good position, but there are those who see this position that have come in to this market later, and they're trying to find any way that they could potentially get access to spectrum.

Speaker Change: Sort of the highest priority when it comes to coordination.

Speaker Change: And so I think we're in a good position, but there are those who see this disposition that have come in to this market later and they're trying to find any way that they could potentially get access to spectrum.

Chris Quilty: Thanks, that was perfectly clear, even in type. Thank you. Thanks.

Speaker Change: Thanks that was perfectly clear even in type.

Speaker Change: Thank you thanks.

Operator: One moment for our next question.

Speaker Change: One moment for our next question.

Lyman Delano: Last question comes from Lyman Delano with Beck, Mack, and Oliver. Go ahead. Your line is open. Good afternoon. I have three questions sort of related to the upcoming launch. And, you know, you have 17 satellites coming from MDA beginning this year, I think with a right to nine additional satellites. And all of that was to upgrade the current existing constellation. And then on February, earlier this month, you announced the new contract with NDA for the 50 Aurora satellite. And I'm just sort of wondering, are these satellites, are they related to the existing constellation, or would you say it's more of a new constellation?

Speaker Change: Last question comes from Lyman Delano with Beck Mack and Oliver go ahead. Your line is open.

Lyman Delano: Good afternoon.

Speaker Change: I have Corey <unk>.

And just sort of related to the upcoming launches.

Speaker Change: You have 17 satellites coming from MDA beginning this year I think it was the right to nine additional satellites and all of that was to upgrade the current existing constellation.

Speaker Change: And then on.

Speaker Change: In February earlier, this month, you announced a new contract with the NDA for the 50 Aurora satellites and.

Speaker Change: Sort of wondering is are these satellites are they related to the existing constellation or would you say, it's more of a new constellation and then my final question is if you could update us.

Paul Jacobs: And then my final question is, if you could update us. on the application made in Germany back with the ITU in December of 2020. Now it's, you know, over four years ago, and that was later registered in May of 22. And the constellation was for 3080 satellites and 10 orbital planes at 500-700 kilometers. And can you give us any color on what that is all about?

Speaker Change: The application made in Germany back with the ITU in December of 2020 now.

Speaker Change: Over four years ago.

Speaker Change: And that was later registered in May of 'twenty, two and the constellation was four three.

Speaker Change: 3080 satellites and 10 orbital planes.

Speaker Change: 500, 700 kilometers and can you give us any color on what that is all about.

Paul Jacobs: Okay, so the first question just about the Aurora satellites. Yeah, so that's a... I guess you can say that it's a new constellation. but it is in the same altitude using the same spectrum and it works together with the satellites that are already out there. So, you know, there's ways that these satellites can. Interoperate or cooperate with with each other and that's because we're controlling the We're controlling the, you know, both sets of satellites and we can run the content. We can run the technologies over them. They're both bent pipe style satellites. So that allows us to do a lot of a lot of stuff.

Speaker Change: Okay.

Speaker Change: Okay. So the first question just about the.

Speaker Change: Aurora satellites, yes, so thats.

Speaker Change: I guess, you can say that it is.

Speaker Change: Our new constellation.

Speaker Change:

Speaker Change: But it is in the same altitude using.

Speaker Change: Using the same spectrum.

Works together with the.

Speaker Change: The satellites that are out there so.

Speaker Change: There is ways that these satellites can.

Speaker Change: Okay.

Speaker Change: Inter operate or cooperate with each other and that's because we're controlling the <unk>.

Speaker Change: We're controlling the <unk>.

Speaker Change: All sets of satellites.

Speaker Change: We can run.

Speaker Change: We can run the.

Speaker Change: Technologies over them Theyre, both bent pipe.

Speaker Change: Style satellites, so that allows us to do a lot of a.

Paul Jacobs: So, you know, in terms of the filing in Germany, you know, as we know, Filings are something that a lot of people make. It gives us some optionality, obviously, for larger constellations and so forth. And, you know, our head of regulatory, Barbie Ponder, you know, can, if you want, you know, can follow up with you and give you a little bit more detail. But it's really, it's a question of just giving us optionality for the future. Great, thanks. Great. One moment for we do have one more question.

Speaker Change: A lot of stuff so.

Speaker Change: In terms of the.

Speaker Change: Filing in Germany.

Speaker Change: As we know.

Speaker Change: Filings are something that are a lot of people make.

Speaker Change: It gives us some optionality, obviously for larger constellation and so forth.

Speaker Change: Our head of regulatory Barbie ponder.

Speaker Change: <unk>.

Speaker Change: Ken if you want can follow up with you and give you a little bit more detail, but it was really it's a question I was just giving us optionality for the future.

Speaker Change: Okay, great. Thank you.

Speaker Change: Great.

Speaker Change: One moment in time, we do have one more question.

George Sutton: The next question comes from George Sutton with Craig Halum. Go ahead. Your line is open. Thank you. Very nice to see the move forward with the two way device. So can you just talk about and what we might see there. Yeah, so the I mean, the main thing for the two way is now that you can do commanding down so we can actually control things. And if it turned out you need to turn a valve or you need to, you know, make something respond. So if you're controlling something that's a remote asset, you can do that.

Speaker Change: Okay.

Speaker Change: The next question comes from George Sutton with Craig Hallum. Your line is open.

Speaker Change: Thank you very nice to see the move forward with a two way device. So can you just talk about.

Speaker Change: Examples of two way use cases, and what we might see there.

Speaker Change: Yes, so I mean.

Speaker Change: The main thing for the two way is now that you can do commanding.

Speaker Change: So we can actually control things I mean, if it turned out you need to turn a valve where you need to.

Speaker Change: Make something.

Speaker Change: Respond so if you're controlling something that's a remote asset.

George Sutton: Now, it's not a real time thing. It's still the same kind of packet delivery, we can get a little more throughput through it. And then as I look to the future, because we put additional processing capability built into the modem, one of the things that I like a lot is that you can imagine a remote asset out in the field, running a local program that's monitoring that asset, maybe some AI, you know, on the edge, and it could send an alert if it sees something out of normal operating parameters, and then the system could then or the company that's running that asset or monitoring that asset could then send back, okay, we need to know more, you know, send us data on this or send us data on that and so forth.

You can do that now it's not a real time thing it's still the same kind of packet delivery, we can get a little more throughput through it.

Speaker Change: And then as I look to the future because we put additional processing capability built into the modem one of the things that I like a lot is that you can imagine a remote at asset out in the field running a local program.

Speaker Change: That's monitoring that asset maybe some AI on the edge.

Speaker Change: And it could send an alert if it sees something out of.

Speaker Change: Normal operating parameters and then.

The system could then or the the company thats running that asset or monitoring that asset could then sent back okay, we need to know more sand.

Speaker Change: Send us data on this or send us data on that and so forth. So you can sort of control. It. So that you can not have all asset sending all of their information their sensor data back you can just have it that the one that actually needs to be talked to incentive sensor data back can send it back but most of the work can be done on.

George Sutton: So you can sort of control it so that you can not have all assets sending all of their information, their sensor data back, you can just have it that the one that actually needs to be talked to and send the sensor data back, can send it back, but most of the work can be done on the local processing.

George Sutton: And that's an area that I'm super excited about going forward. Gotcha.

Speaker Change: The local processing and that's an area that I'm Super excited about going forward.

George Sutton: And then I was certainly enthused by the presentation you had with Parsons at your analyst day. Can you, again, in the same kind of light, give us some sense of what kind of use cases they may be deploying with you? And how exactly will that go to market work? Okay, so the go to market is, you know, it's through their channels. And obviously, we haven't been much of a government service provider in the past. And so we don't have all the same depth of relationships that somebody who's been in that area for a long time has.

Speaker Change: Got you and then.

Speaker Change: I was certainly in dues by the presentation, you had with Parsons at your <unk>.

Speaker Change: Analyst day.

Speaker Change: Can you again in the same kind of like give us some sense of what kind of use cases they may be.

Speaker Change: <unk> with you and.

Speaker Change: And how exactly will that go to market work.

Speaker Change: Okay. So the go to market is.

Speaker Change: Through their channels are obviously, we havent been much of a gotcha government service provider in the past.

Speaker Change: So we don't have all the same depth of relationships that somebody who has been in that area for a long time has.

George Sutton: So they are building a pipeline and they're, you know, they have their people that can do field support and so forth. So that's Great go-to-market strategy for us. another company that could come in, put their technology on the constellation because it's a bent pipe and bring that to market. And we provide certain capabilities to them that they then leverage. And the use case, I can't say the specific things because I think we're actually finding more and more things, but I can't say what the first one that they came in with was, but it is specifically to provide resilience of communication in RF challenged environments, which seems quite clear why the government would be interested in that kind of a capability.

Speaker Change: So they are building a pipeline and there. They have there are people that can do field support and so forth. So thats.

Speaker Change: A great go to market strategy for us.

Speaker Change: Another company that could come in and put their technology on the <unk>.

Speaker Change: On the constellation because its a bent pipe.

Speaker Change: And bring that to market.

Speaker Change: We provide certain capabilities to them that they then leverage and the use case I can't say the specific things because I think there, we're actually finding more and more things, but I can't say, what the first one that they came in with was.

Speaker Change: But it is specifically to provide resilience of communication and RF challenged environments, which seems quite clear why the government would be interested in that kind of a capability. So we're quite excited about it. The initial tests went off extremely well it was quite easy for them.

George Sutton: So, we're quite excited about it. The initial tests went off extremely well. It was quite easy for them to get their technology up and running. You know, really very short period of time that we did a lot of testing. And the process now is to be doing some of that work in other markets at this point. So all all, you know, kind of moving ahead very well.

Speaker Change: To get their technology up and running.

Speaker Change: Very short period of time than we did a lot of testing in the process now is to be doing some of that work.

Speaker Change: In other markets at this point so.

Speaker Change: I'll.

Operator: And I think the relationship Super, thank you for the details. Welcome. Thank you.

Speaker Change: Kind of moving ahead, very well and I think the relationship between the companies is extremely strong.

Speaker Change: Super Thank you for the details.

Speaker Change: Youre welcome. Thank you.

Operator: This concludes the question and answer session.

This concludes our question and answer session I would now like to turn it back to Paul for closing remarks.

Paul Jacobs: I would now like to turn it back to Paul for closing remarks. So thanks everybody again for joining us and for the support. I think it's been a great year, a lot of growth and a lot of innovation. I think this year was really one where we got our execution going well. Obviously we've been doing a good job on executing for the wholesale consumer business and that was evidenced in the fact that that relationship continues to expand. But I'm also super happy about the product organization bringing the two-way to market after quite a long period of time.

Paul: So thanks, everybody again for joining us and for the support I think it's been a.

Paul: Great great year, a lot of growth and a lot of.

Paul: A lot of innovation.

Paul: Think this year was really one where we got our execution going well, obviously, we've been doing a good job on executing for the.

Paul: Wholesale consumer business and that was evidenced in the fact that that relationship continues to expand but I am also super happy about the product organization.

Paul: The two way to market after quite a long period.

And I think between the new leadership and other system engineers that we brought in with XCOM being able to look at the system and so forth, that really helped. And then we've also been able to make a lot of progress on some other areas on our product business and we'll look forward to updating you on those things as those make their way into commercial service. So a lot of good opportunities there and then we have some exciting stuff we're working on on the XCOM RAN side. And I look forward to the time when people look at Globastar and they don't see a satellite company only they see a company that's executing well to provide mission critical connectivity in space but on the ground too.

A time and I think between the new leadership and other.

Paul: System Engineers that we brought in with with ex Con being able to look at the system and so forth that really helped and then we've also been able to make a lot of progress on some other areas on our product business and we will look forward to updating you on those things as those.

Paul: Those make their way into commercial service so lot of good opportunities. There and then we have some exciting stuff we're working on on the ex Com brand side.

Paul: I look forward to the time when people look at Globalstar and they don't see a satellite company only they see a company thats executing well to provide mission critical connectivity in space, but on the ground to so look forward to.

So look forward to updating you more on that journey and appreciate your support as we head there. So thanks very much.

Paul: Updating you more on that journey and appreciate your support as we head there. So thanks very much everyone.

Paul: Okay.

Paul: [music].

Paul: Okay.

Paul: Okay.

Paul: Yes.

Paul: Yes.

[music].

Paul: Okay.

Paul: [music].