Q1 2025 Globalstar Inc Earnings Call

Yeah.

Operator: Good day and thank you for standing by.

Speaker Change: Good day and thank you for standing by welcome to the Globalstar first quarter 2025 earnings Conference call.

Operator: Welcome to the Globastar First Quarter 2025 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 session.

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

Speaker Change: After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone you will then hear an automated message advising your hand is raised.

Operator: To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Speaker Change: To withdraw your question. Please press star one again.

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

Speaker Change: 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.

Speaker Change: I would now like to hand, the conference over to your first speaker today, Rebecca Clary CFO. Please go ahead.

Rebecca Clary: Thank you operator, and good afternoon, everyone.

Rebecca Clary: 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 annual report on Form 10-K for the financial year ending 2024 and its other SEC filings, as well as today's earnings release. Also note that management may reference EBITDA, adjusted EBITDA, free cash flow, or adjusted free cash flow on this call, which are financial measures not recognized under U.S. 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.

Rebecca Clary: 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.

Rebecca Clary: Factors that could cause the results to differ materially are described in the risk factors section of Globalstar SEC filings, including its annual report on Form 10-K for the financial year, ending 2024, and its other SEC filings as well as today's earnings release.

Rebecca Clary: Also note that management may reference EBITDA adjusted EBITDA free cash flow, our adjusted free cash flow on this call. What's your financial measures not recognized under U S. GAAP.

and the Earnings release, which is available on our website.

Rebecca Clary: I'll begin with a review of our financials before touching on tariffs and our outlook.

Rebecca Clary: I'll begin with a review of our financials before touching on tariffs and our outlook. I'll then turn it over to Paul to cover key operational updates.

Rebecca Clary: I'll then turn it over to Paul to cover key operational updates. Total revenue increased 6% to $60 million compared to the prior year period of $56.5 million. service revenue increased 7% driven primarily by wholesale capacity services. Additionally, in commercial IoT, we are pleased to continue to see increases in the average number of subscribers, a high level of customer engagement, and the adoption of our IoT devices and service offerings. The increase in revenue contributed to higher adjusted EBITDA, which was up 3% to $30.4 million compared to the prior year's first quarter of $29.6 million. Partially offsetting the effect of the revenue increase were certain cost increases, including expenses incurred to continue to develop and enhance our XCOM RAND product offering.

Rebecca Clary: Total revenue increased 6% to $60 million compared to the prior year period of 56.5 million. Service revenue increased 7%, driven primarily by wholesale capacity services.

Rebecca Clary: Additionally, in commercial IOT, we are pleased to continue to see increases in the average number of subscribers, a high level of customer engagement, and the adoption of our IOT devices and service offerings.

Rebecca Clary: The increase in revenue contributed to higher adjusted EBITDA, which was up 3% to 30.4 million compared to the prior years first quarter of 29.6 million.

Rebecca Clary: Partially offsetting the effect of the revenue increase were certain cost increases, including expenses incurred to continue to develop and enhance our XCOM brand product offering.

Rebecca Clary: Higher cash costs to support EXCOMM negatively impacted the change in adjusted EBITDA by $1.3 million and adjusted EBITDA margin by approximately 200 basis points compared to the comparable prior year period.

Rebecca Clary: Higher cash costs to support XCOM, negatively impacted the change in adjusted EBITDA by 1.3 million and adjusted EBITDA margin by approximately 200 basis points compared to the comparable prior year period.

Rebecca Clary: While there are expected upfront investments to support this technology, we remain bullish that this business will be profitable and contribute meaningfully to Globalstar's future revenue.

Rebecca Clary: While there are expected upfront investments to support this technology, we remain bullish that this business will be profitable and contribute meaningfully to Globstar's future revenue.

Rebecca Clary: Moving to our balance sheet, we ended the year with $241.4 million in cash on hand. Net cash flows generated from operations in the quarter were $51.9 million and adjusted pre-cash flow after excluding reimbursable CapEx for the replacement satellites and extended MSS network. were $47.6 million compared to $19.9 million in the prior year's first quarter.

Rebecca Clary: Moving to our balance sheet, landed the year with $241.4 million in cash on hand.

Rebecca Clary: Net cash flows generated from operations in the quarter were $51.9 million and adjusted pre-cash flow after excluding re-inversible cat-backs for the replacement satellites and extended MSS network.

Rebecca Clary: for $47.6 million compared to 19.9 million in the prior year's first quarter.

Rebecca Clary: Before turning to our outlook, I'd like to spend a minute walking through our assessment of the fluid tariff situation and its potential impact on Globestar. Our team has worked closely with our partners globally to identify exposure and available levers to offset or mitigate impact. Based on current available information, we believe that we are well positioned to minimize any financial impact given our existing relationships with manufacturing and warehousing partners situation situated around the globe. Should we see any escalation or further shifts in the trade environment, we have several tools at our disposal to help manage through it.

Rebecca Clary: Before turning to our outlook, I'd like to spend a minute walking through our assessment of the fluid terror situation and its potential impact on global star.

Rebecca Clary: Our team has worked closely with our partners globally to identify exposure and available levers to offset or mitigate impacts.

Rebecca Clary: Based on current available information, we believe that we are well positioned to minimize any financial impact given our existing relationships with the manufacturing and warehousing partners situated around the globe.

Rebecca Clary: Should we see any escalation or further shifts in the trade environment, we have several tools at our disposal to help manage through it.

Rebecca Clary: First, we have longstanding contract manufacturing relationships that give us the ability to quickly shift production and control costs without disrupting our supply chain. Second, our international third party logistics partners provide flexibility and our global footprint allows us to buy and sell in certain jurisdictions with little to no tariff impact. And finally, we believe we have the ability to pass through increased costs in areas where we are affected the most without impacting the competitiveness of our product. These measures, along with others, provide us with flexibility to ensure that we can navigate through the global trade challenges.

Rebecca Clary: First, we have long-standing contract manufacturing relationships that give us the ability to quickly shift production and control cost without disrupting our supply chain.

Rebecca Clary: Second, our International Third Party Logistics Partners provide flexibility, and our Global Footprint allows us to buy and sell in certain jurisdictions with little to no tariff impact.

Rebecca Clary: And finally, we believe we have the ability to pass through increased costs in areas where we are affected the most without impacting the competitiveness of our products.

Rebecca Clary: These measures, along with others, provide us with flexibility to ensure that we can navigate through the global trade challenges.

Rebecca Clary: Therefore, we expect a relatively immaterial impact in the near term.

Rebecca Clary: Therefore, we expect a relatively immaterial impact in the near term.

Rebecca Clary: To that end, we are reiterating our full year 2025 outlook and continue to expect revenue in the range of $260 million to $285 million. And we anticipate adjusted EBITDA margin of approximately 50%.

Rebecca Clary: To that end, we are reiterating our full year 2025 outlook and continue to expect revenue in the range of 260 million to 285 million, and we anticipate Adjusted Dept. margin of approximately 50 percent.

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, and I'm pleased to share our progress to start the year. I feel like we executed our plan well. So we continue to see demand for our suite of products and services with new customers and use cases starting to come online. We've been working hard over the last several quarters to build a strategy and go-to-market approach to capture the opportunities and drive sustainable long-term growth. This has included the launch of an investment in foundational assets with new and expanded partnerships and resulting in innovative products and services.

Rebecca Clary: 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 and I'm pleased to share our progress to start the years, feel like we executed our plan well.

Paul: So we continue to see demand for our suite of products and services with new customers and use cases starting to come online. We've been working hard over the last several quarters to build a strategy and go to market approach to capture the opportunities and drive sustainable long-term growth.

Paul: This has included the launch of an investment in foundational assets with new and expanded partnerships and resulting in innovative products and solutions.

Paul Jacobs: We're continuing to bring in new team members with deep expertise in scaling businesses and progressing our wholesale business. We successfully launched our two-way satellite IoT solution via Globastar's low-Earth orbiting satellite Constellation. This marks a significant expansion beyond our traditional one way tracking capabilities and addresses the rising global demand for reliable, low power, low latency command and control systems across critical applications, including fleet tracking, asset monitoring and precision agriculture. This milestone reflects the success of our refocused product development team who has streamlined priorities and accelerated innovation while leveraging our existing network infrastructure, low-cost platform, and new state-of-the-art downlinks to deliver competitive commercial IoT solutions to the market quickly.

Paul: We're continuing to bring in new team members with deep expertise in scaling businesses and progressing our wholesale business forward.

Paul: We successfully launched our two-way satellite IoT solution, Vehicle, Globstar, as low-worth orbiting satellite constellation.

Paul: This marks a significant expansion beyond our traditional one-way tracking capabilities.

Paul: and addresses the rise in global demand for reliable low power, low latency command and control systems across critical applications, including fleet tracking, asset monitoring and precision agriculture.

Paul: This milestone reflects the success of our refocus product development team who has streamlined priorities and accelerated innovation while leveraging our existing network infrastructure, low cost platform, and new state-of-the-art downlinks to deliver competitive commercial IoT solutions to the market quickly.

Paul Jacobs: I'm excited by the growth opportunities that we're aggressively pursuing on the space side of our business. Now that we have removed the constraints that Globalstar's IoT business has been operating under for quite some time. Additionally, in the first quarter, we opened a new state-of-the-art Satellite Operations Control Center at our Covington, Louisiana headquarters. This facility significantly enhances our satellite fleet management capabilities, improves network performance, and positions us for future next generation constellations. The grand opening event took place on March 17th and was attended by distinguished guests including U.S. House Majority Leader Steve Scalise and FCC Chairman Brendan Carr, underscoring the facility's strategic importance to our company, to the country, and to the global telecommunications industry as a whole.

Speaker Change: I am excited by the growth opportunities that we are aggressively pursuing on the space side of our business. We have removed the constraints that Globstar's IOT business has been operating under for quite some time.

Speaker Change: Additionally, in the first quarter we opened a new state-of-the-art Satellite Operations Control Center at our Covington, Louisiana headquarters. This facility significantly enhances our satellite fleet management capabilities, improves network performance, and positions us for future next generation constellation deployments.

Speaker Change: The grand opening event took place on March 17th and was attended by distinguished guests including U.S. House Majority Leader Steve Scoise and FCC Chairman Brendan Carr, underscoring the facility's strategic importance to our company, to the country and to the global telecommunications industry as a whole.

Paul Jacobs: This investment reinforces Globestar's leadership in global satellite communications and demonstrates our commitment to economic growth.

Speaker Change: This investment reinforces Globstar's leadership and global satellite communications and demonstrates our commitment to economic growth.

Paul Jacobs: Turning to some important leadership updates, I'm excited to announce the appointment of two seasoned executives who will drive growth in key business segments. Dr. Tamer Quddus has been promoted to Vice President and General Manager of Terrestrial Network Business, where he will lead our private wireless network initiatives, leveraging Globestar's XCOM RAN and BAND N53X. He brings over two decades of experience in wireless communications, having previously served as Vice President of Wireless Engineering at XCOM Labs, Senior Director of Engineering at Qualcomm. Tamer led the team which developed and standardized the utilization of cellular technology over the unlicensed bands, which is an area with significant potential for global I'm sure those of you who attended our Analysts and Investors Day in December remember.

Speaker Change: Turning to some important leadership updates, I'm excited to announce the appointment of two season executives who will drive growth in key business segments.

Speaker Change: Dr. Tamer Caduce has been promoted to Vice President and General Manager of Terrestrial Network Business, where he will lead our private wireless network initiatives, leveraging Globstar's ex-com ran and banned N53 assets.

Speaker Change: He brings over two decades of experience in wireless communications, having previously served as vice president of wireless engineering at XCOM Labs, senior director of engineering at Qualcomm.

Speaker Change: Tamer led the team which developed and standardized utilization of cellular technology over the unlicensed bands, which is an area with significant potential for global star. Sure, those of you who attended our analyst and investor day in December remember Tamer.

Paul Jacobs: We have also appointed Daman Hejmadi as the Vice President and General Manager of our Wholesale Consumer Business, where he will focus on expanding access to Globestar's satellite solutions through strategic wholesale partners. Prior to joining us, Domin held various executive positions, including Vice President of Engineering at Qualcomm, where he transformed the Bangalore Design Center from a small team into a roughly 4,000 person engineering powerhouse, contributing approximately $12 billion in revenue. He also served as Corporate Vice President at Intel, where he managed 10,000 engineers across more than 30 sites to advance Intel's process technology leadership.

Speaker Change: We have also appointed Domin Hedgebody as the vice president and general manager of our wholesale consumer business, where he will focus on expanding access to global star satellite solutions through strategic wholesale partnerships.

Speaker Change: Prior to joining us, Domin Hill at various executive positions, including Vice President of Engineering at Qualcomm, where he transformed the Bangalore Design Center from a small team into a roughly 4,000-person engineering powerhouse, contributing approximately $12 billion in revenue.

Speaker Change: He also served as Corporate Vice President at Intel, where he managed 10,000 engineers across more than 30 sites to advance Intel's process technology leadership. These strategic appointments strengthen our management team and position us to accelerate growth in our key business areas.

Paul Jacobs: These strategic appointments strengthen our management team and position us to accelerate growth in our key business areas. Moving to some project updates and beginning our terrestrial business, we continue to see encouraging progress. In March, we participated at the Mobile World Congress Conference in Barcelona, where we demonstrated our XCOM RAN technology and showcased its performance enhancements. This full-scale over-the-air demonstration using our licensed N53 spectrum delivered speeds of 400 megabits per second using just 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 communication.

Speaker Change: Moving to some project updates and beginning of our terrestrial business, we continue to see encouraging progress. In March, we participated at the Mobile World Congress conference in Barcelona, where we demonstrated our ex-com ran technology and showcased its performance enhancements.

Speaker Change: This full scale over the air demonstration using our licensed N53 spectrum delivered speeds of 400 megabits per second using just 10 megahertz of spectrum.

Speaker Change: 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 connectivity.

Paul Jacobs: These demonstrations were conducted in our 20-by-30-foot booth using a highly dense ad hoc installation of eight of our newly developed XCOM RAN radios and third-party state-of-the-art 5G modules, and highlighted the simplicity of deployment of XCOM RAN and the utility of having our own queer band N53 spectrum, in this case, in Spain.

Speaker Change: These demonstrations were conducted in our 20 by 30-foot booth using a highly dense ad hoc installation of eight of our newly-developed XCOM ran radios and third-party state-of-the-art 5G modules.

Speaker Change: and highlighted the simplicity of deployment of XCOM RAN and the utility of having our own queer band N-53 spectrum in this case in Spain.

Paul Jacobs: Our technological and spectrum assets are highly differentiated, and we expect this system to be available for commercial deployment next quarter.

Speaker Change: Our technological and spectrum assets are highly differentiated, and we expect this system to be available for commercial deployment next quarter.

Paul Jacobs: Moving to our Wholesale Capacity business, we reached a significant milestone with MDA Space during the quarter. As announced in February, MDA Space will be building more than 50 satellites for Globestar's next-generation LEO Constellation under a $1.1 billion Canadian dollar contract. They will base the Constellation on their new reprogrammable Aurora platform, which recently passed preliminary design review for their anchor customer Telesat's Lightspeed Network. This development is an important step in the execution of our extended MSS network plans announced in November as part of the $1.5 billion updated expansion agreement with our wholesale. We are also excited about the 2025 launch of the first set of replacement satellites manufactured by MDA under our 2022 agreement.

Speaker Change: Moving to our wholesale capacity business, we reached a significant milestone with MDA Space during the quarter. As announced in February , MDA Space will be building more than 50 satellites for Globstar's next-generation Leo Constellation under a $1.1 billion Canadian contract.

Speaker Change: They will base the constellation on their new reprogrammed Aurora platform, which recently passed preliminary design review for their anchor customer telescopes like Speed Network.

Speaker Change: This development is an important step in the execution of our extended MSS network plans announced in November as part of the $1.5 billion

Speaker Change: We are also excited about the 2025 launch of the first set of replacement satellites manufactured by MDA under our 2022 agreement. We expect to announce more details our expected launch dates in.

Paul Jacobs: I expect to announce more details on our expected launch date.

Paul Jacobs: Before I turn the call back over to the operator, I know Rebecca provided some details on tariffs, but I want to emphasize that we've established a world-class management team that gives us confidence to navigate a dynamic global trade environment and any unexpected headwinds that may arise. We remain very well positioned to execute on our long-term growth. As announced yesterday, our executives will be attending several conferences over the next two months where we expect to meet investors, and also we are undertaking initiatives to educate our stakeholders directly and broaden our analyst We certainly feel that Globestar is an underappreciated story.

Speaker Change: Before I turn the call back over to the operator, I know Rebecca provided some details on tariffs, but I want to emphasize that we've established a world class management team that gives us confidence to navigate a dynamic global trade environment and any unexpected headwinds that may arise.

Speaker Change: we remain very well positioned to execute on our long-term growth plans.

Speaker Change: As announced yesterday, our executives will be attending several conferences over the next two months where we expect to meet investors. And also we're undertaking initiatives to educate our stakeholders directly and broaden our analyst coverage.

Speaker Change: We certainly feel that Globstar is an underappreciated story. We have assets in space and on the ground that are differentiated and create a platform for innovation.

Paul Jacobs: We have assets in space and on the ground that are differentiated and create a platform for innovation. Our complementary services offer exciting growth potential that we're uniquely equipped to capture. After investing billions in our satellite infrastructure over the years, we've created a powerful network that now supports connectivity for hundreds of millions of devices worldwide. We're seeing this device ecosystem expand consistently with promising growth trajectories in our wholesale partnerships and our IoT and terrestrial network business. We remain exceptionally well-positioned to execute on a long-term grid.

Speaker Change: Our complimentary services offer exciting growth potential that were uniquely equipped to capture. After investing billions in our satellite infrastructure over the years, we've created a powerful network that now supports connectivity for hundreds of millions of devices worldwide.

Speaker Change: We're seeing this device ecosystem expand consistently with promising growth trajectories in our host cell partnerships and our IoT and terrestrial network business lines.

Speaker Change: We remain exceptionally well positioned to execute on our long-term growth plans. I'm pleased with the way we started out the year and I look forward to continuing to execute on our initiatives this year.

Paul Jacobs: I'm pleased with the way we started out the year, and I look forward to continuing to execute on our initiatives this year.

Paul Jacobs: I'll now turn the call back to the operator for Q&A. Thank you.

Speaker Change: I'll now turn the call back to the operator for Q&A.

Operator: At this time, we will conduct the question and answer session. And 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 118. Please stand by while we compile the Q&A roster.

Speaker Change: Thank you. At this time, we will conduct the question and answer session. And then as a reminder, to ask a question you will need to press star 1-1 on your telephone and wait for your name to be announced.

To withdraw your question, please press star one one again.

Please stand by what would compile the Q&A roster.

Michael Crawford: Our first question comes from Mike Crawford of B. Reilly Securities. Your line is now open. Um, thank you. I'm glad to hear you're looking to launch. Xcom ran commercially next quarter and you remain bullish that that's going to be profitable.

Thank you. Thank you.

Speaker Change: Our first question comes from Mike Crawford of B. Riley Securities. Your line is now open.

Speaker Change: Thank you. I'm glad to hear you're looking to launch XCOM ran commercially next quarter and you remain bullish. That's going to be profitable. Can you just walk us through any more of economics or assumptions regarding this business? I'm glad to hear you're looking to launch XCOM. I'm glad to hear you're looking to launch XCOM.

Paul Jacobs: Can you just walk us through any more of economics or assumptions regarding this business? In terms of what, in terms of, I mean, we haven't made any announcements on forward-looking. Revenues or so forth. I mean, you know, the issue with this is as, as we've talked about, we are primary initial customer is a very large retailer. And, you know, we're very engaged with them. But the sales cycle is, as you know, long in these kinds of things.

Speaker Change: in terms of what, in terms of, I mean, we haven't made announcements on forward-looking...

Revenues, or...

Speaker Change: So forth. I mean, you know, the issue with this is, as we've talked about, we are primary initial customer.

Speaker Change: is a very large retailer and we're very engaged with them but the cell cycle is as you know along in these kinds of things and um...

Paul Jacobs: And, um, I think we're very confident on moving forward, but even in my Qualcomm days, like you never knew when a customer was going to push the button to launch it. often for factors that are completely outside of our control. So we are very engaged with them. Things are moving along. The system's working extremely well. And now we're kind of looking forward to that next step. We have expanded our direct sales capability in this area too. So we are looking for opportunities beyond the warehouse automation customer that we have right now. And we have gotten some initial contract on the government side as well on this stuff too.

Speaker Change: I think, you know, we're very confident on moving forward, but even in my Qualcomm days, like you never knew when a customer was going to push the button to launch it.

Speaker Change: Often for factors that are completely outside of our control. So we are very engaged with them. Things are moving along. The system is working extremely well. And now we're kind of looking forward to.

Speaker Change: that next step. We have expanded our direct sales capability in this area, too, so we are looking for opportunities beyond warehouse automation customer that we have right now.

Speaker Change: We have gotten some initial contract on the government side as well on this stuff too, so hopefully that turns into something larger as well.

Paul Jacobs: So hopefully that turns into something larger as well.

Paul Jacobs: Okay, Paul, Mitch, thank you. Maybe I know you've been working to bring more vendors into the ecosystem, like maybe some lower cost radios, maybe to reduce overall bill of materials that could maybe be something that attracts more interest, including from the large retail customer or others. Is that? Unknown Speaker Yeah, I mean, we absolutely we so what we demoed at Mobile World Congress was on our Ability to use Band 53 as a sort of an anchor channel for that as well. And now we're talking about much larger bandwidths that we could conceivably coordinate and use for customers.

Speaker Change: Okay, Paul, Nick, thank you. Maybe I know you've been working to...

Speaker Change: bringing more vendors into the ecosystem, like maybe some lower-cost radios, maybe to reduce overall bill materials that could maybe be something that attracts more interest, including from the large retail customer or others, is that?

Speaker Change: That's the progress there? Yeah, I mean we absolutely, so what we demoed at Mobile World Congress was on our

Speaker Change: You know, on our new radios that we're working or that we've built and now we will be commercially deploying and um...

Speaker Change: Yeah, so that not only has it lower cost, but it also gives us a lot of flexibility.

Speaker Change: in terms of the bands that we can cover, so those, the ones that we showed off at MWC were...

Speaker Change: Band 53 and CBRS, but as I mentioned in my script, we're super interested in the unlicensed cellular opportunities as well and the ability to use Band 53 as a...

Speaker Change: sort of an anchor channel for that as well. And now we're talking about much larger bandwidths that we could conceivably coordinate and use for customers. So all these things are, you know, there's both cost and performance benefits out of having our own radios. [inaudible]

Paul Jacobs: So all of these things are, you know, there's both cost and performance benefits out of having our own radio. And then there's Using band 53 or N53 as the anchor. Spectrum become any more or less important given some potential changes in the CBRS band itself is coordinated with the U.S. Department of Defense.

Yenem Thum,

Cheers.

Speaker Change: using band 53 or N53 as the anchor spectrum become any more or less important given some potential changes in the CBRS band itself is coordinated with the US Department of Defense.

Paul Jacobs: Yeah, I think, you know, what's happened with CBRS is that it, you know, people thought it was going to really kick off the private network, cellular network business, and it's been less than expected. And so that's why we feel like having band 53 is, is so important that we have something that we can guarantee is available for mission critical applications. And, you know, what I've said about private network, I mean, if you decide to use cellular, it's because you have a mission critical application. Otherwise, you would just use Wi Fi. But when you use it on CBRS, it's still not quite mission critical quality.

Speaker Change: Yeah, I think, you know, what's happened with CBRS is that it, you know, people thought it was going to really kick off the private network.

Celia, Network Business, and it's been less...

Speaker Change: than expected. And so that's why we feel like having band 53 is so important that we have something we can guarantee is available for mission critical applications.

Speaker Change: and what I've said about private network. I mean, if you decide to use cellular, it's because you have a mission critical application. Otherwise, you would have just used Wi-Fi.

Speaker Change: But when you use it on CBRS, it's still not quite mission-critical quality. I mean, it's better than Wi-Fi, but it can come and go depending on whatever happens. So yeah, I think some of those changes may make it more...

Paul Jacobs: I mean, it's better than Wi Fi, but it can come and go depending on whatever happens. So, yeah, I think some of those changes may make it more, more available. But I think that, you know, we're in a really good position having, you know, a global band of spectrum that can be used as an anchor, like, that's a, that's a very differentiated position relative to other players in the market, and particularly when you're thinking about IoT applications, which are global. And so that's, yeah, we're super excited about all those, those kinds of opportunities, both on the space and the, and the terrestrial side.

Speaker Change: More available, but I think that we're in a really good position having a global band of spectrum that can be used as an anchor. That's a very differentiated position relative to other players in the market, particularly when you're thinking about

Speaker Change: IOT applications, which are global. And so that's, yeah, we're super excited about all those, those kinds of opportunities, both on the space and the, and the terrestrial side.

Michael Crawford: Okay, thank you. Just one last question for me as well. It's really two parts. One, Repunishment Constellation. So it's great to hear that first anticipated launches later this year. When would you expect that to be completed and thus triggering reimbursement of the CapEx that you've incurred to replenish your existing constellation? And then the second part would be when we might have these 50 Aurora satellites launched in the extended MSS network into operation. Thank you. NASA Jet Propulsion Laboratory, California Institute of Technology Yeah, so we haven't announced when we're launching the launch in the 50. So Stay tuned.

Speaker Change: Okay. Thank you. Just one last question for me as well. It's really two parts one.

Speaker Change: replenishment constellation. So it's great to hear that first anticipated launches later this year. When would you expect that to be completed and thus triggering reimbursement of the CapEx that you've incurred to replenish your existing constellation? And then the second part would be.

Speaker Change: when we might have these 50 award satellites launched in the extended MSS network into operation. Thank you.

Paul Jacobs: Obviously that. has uh we have other partners that are involved in making that that decision.

Stay tuned, obviously that.

Speaker Change: as we have other partners that are involved in making that decision. And the first one was, when will the service fees?

Rebecca Clary: And the first one was, when will the service fees?

Rebecca Clary: Rebecca, you wanted to... Talk to the financial application. Sure.

Rebecca, you want to just...

Rebecca Clary: The service fees will step up. The fees that are tied to the CapEx for those replacement satellites will start being funded once that first batch is operational, so once they're providing service. and that when all 17 might be launched, I imagine that's going to be, you know, three or four launches to get them all up there.

Talk to the financial applications.

Speaker Change: Sure, the service fees will step up, the fees that are tied to the capex for those replacement satellites will start being funded once that first batch is operational, so once they're providing service.

Speaker Change: And when all 17 might be launched, I imagine that's going to be three or four lunches to get them all out there.

Rebecca Clary: We're expecting to in the second launch has not been contracted yet, so more details to come on that. All right.

Speaker Change: We're expecting to, and the second launch has not been contracted yet, so more details to come on that.

Michael Crawford: Thank you very much.

Operator: Thanks, Mike. Thank you.

All right, thank you very much

Thanks Mike. Thanks Mike.

Operator: As a reminder, to ask a question, you will need to press star 11. One moment.

Speaker Change: Thank you. As a reminder to ask a question, you'll need to press star 11.

One moment please.

Operator: Okay, I am showing no further questions at this time.

Paul Jacobs: I would now like to turn it back to Paul Jacobs, CEO, for closing remarks. Well, yeah, I think we understood that today's earnings call was So it's a very different world. We're really sort of impacted in terms of attendance by other earnings calls. It's a busy season right now. But we are going to be at a number of conferences coming up. So we'll get a good opportunity to interact with the investors and analysts then. And appreciate Mike, your your comments and questions. And we'll see you soon.

Speaker Change: Okay, I'm showing no further questions at this time. I would now like to turn it back to Paul Jacobs' CEO for causing remarks.

Paul Jacobs: Well, yeah, I think we understood that today's earnings call was...

Paul Jacobs: Conferences coming up, so we'll get a good opportunity to interact with the investors and analysts.

Van and appreciate your comments and questions.

Paul Jacobs: And I think just to close, you know, we really do have a differentiated position. I'm even more excited about it than I have been in the past. The fact that we were able to run over the air at Mobile World Congress was super exciting on the terrestrial side, because that's an extremely contested environment. A lot of companies, they're all trying to do stuff. And generally nobody is able to do anything over the air. That's significant. And we really were able to do that. And that garnered a lot of attention for us. So that's why we also are excited to sort of step up our direct sales there.

and we'll see you soon.

and I think just to close...

You know, we really do have a differentiated position. I'm...

Paul Jacobs: even more excited about it than I have been in the past, the...

Paul Jacobs: Um, the fact that we were able to run over the air at Mobile World Congress was

Paul Jacobs: super exciting on the terrestrial side because that's an extremely contested environment. A lot of companies are there all trying to do stuff and

Generally, nobody is able to do anything over the air.

Paul Jacobs: That's significant and we really were able to do that and that garnered a lot of attention for us so...

Paul Jacobs: That's why we also are excited to sort of step up our direct sales there.

Paul Jacobs: So, yeah, it's going to be an interesting year ahead. A lot of opportunities and we'll execute. And also, you know, For our wholesale partner, too. So stay tuned and we'll continue to deliver on all these initiatives. Thanks very much, everyone.

Paul Jacobs: So, yeah, it's going to be an interesting year ahead, a lot of opportunities, and well execute, and also, you know, teams very focused on building up a network for our whole sale partner, too.

Paul Jacobs: Stay tuned and we'll continue to deliver on all these initiatives. Thanks very much everyone.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Thanks for watching!

Paul Jacobs: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Paul Jacobs: [music].