Globalstar — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue for the second quarter of 2026 was $64.8 million, compared to $67.1 million in the prior year's second quarter.
• Service revenue was $60.0 million, a 5% decrease year-over-year, primarily due to timing of wholesale capacity service fees and subscriber churn in Duplex and SPOT segments; excluding $6.6 million in out-of-period revenue from Q2 2025, service revenue would have increased 6%.
• Revenue from subscriber equipment sales was $4.8 million, a 21% increase year-over-year, driven by higher Commercial IoT device sales and XCOM RAN systems.
• Loss from operations was $4.8 million for the quarter, compared to income from operations of $6.1 million in the prior year period.
• Net loss was $26.5 million for the quarter, compared to net income of $19.2 million in the prior year period.
• Adjusted EBITDA was $26.0 million for the quarter, down from $35.8 million in the prior year period.
• For the first six months of 2026, total revenue was $134.8 million, up from $127.2 million in the same period of 2025.
• Income from operations was $3.4 million for the first six months of 2026, compared to a loss of $2.4 million in the prior year period.
• Net loss was $41.4 million for the first six months of 2026, compared to net income of $1.9 million in the prior year period.
• Adjusted EBITDA was $59.4 million for the first six months of 2026, down from $66.1 million in the prior year period.
• Cash and cash equivalents were $409.8 million as of June 30, 2026, compared to $447.5 million as of December 31, 2025.
• Net cash flows from operations were approximately $159.7 million for the first six months of 2026.
• Capital expenditures were $208.3 million for the first six months of 2026.
• Adjusted free cash flow was $43.5 million for the first six months of 2026, down from $77.9 million in the prior year period.
• Principal debt was $423.7 million at June 30, 2026, compared to $410.0 million at December 31, 2025.
• Deferred revenue (current and non-current combined) was $1,085.5 million at June 30, 2026, compared to $868.9 million at December 31, 2025.

Guidance and Future Outlook

• Globalstar has suspended all financial outlook and forward-looking guidance updates.
• The company does not intend to hold future earnings conference calls.
• The proposed merger with Amazon is expected to close in 2027, subject to regulatory approvals and satellite milestones.
• The HSR Act waiting period expired on July 17, 2026, with the company actively engaged with remaining regulatory authorities including the FCC.

Business Segments and Product Lines

• Commercial IoT subscriber activations reached record highs in the second quarter of 2026, contributing to a 20% increase in gross activations on a last twelve-month basis.
• Commercial IoT service revenue increased, offsetting declines in other segments.
• Wholesale capacity services revenue decreased due to the timing of service fees associated with the reimbursement of network-related costs.
• SPOT and Duplex service revenues declined due to subscriber churn over the last twelve months.
• Government and defense market opportunities continued to expand.
• First set of replacement satellites for the current-generation LEO constellation is rescheduled for launch later in the month of the report.
• Development of third-generation satellites and ground infrastructure continues, with active construction projects in North and South America, Europe, and Asia.
• The company is expanding its international network of ground stations to support the third-generation C-3 satellite system.
• Customer interest remains in the RM200M satellite communications module.
• The service agreement with Parsons Corporation moved beyond the proof of concept phase into the first year of service.

Market and Competitive Landscape

• The company continues to execute on its next-generation satellite constellation initiatives to enhance network resilience, capacity, and service capabilities.
• The company maintains a focus on mission-critical connectivity solutions and terrestrial and satellite offerings.

Risks and Challenges

• The merger with Amazon remains subject to the satisfaction of closing conditions, including outstanding regulatory approvals and achievement of HIBLEO-4 replacement satellite milestones.
• Potential risks include disruptions from the merger, such as customer contract terminations or amendments upon change of control.
• Risks include the potential for litigation related to the merger and adverse reactions from business relationships.
• The company faces the risk of failing to meet milestones under agreements with customers, which could impact merger consideration.
• Operating expenses increased due to higher legal and professional fees related to the Amazon transaction and network build-out costs.
• Net loss was impacted by unfavorable foreign currency changes and higher interest expense from non-cash imputed interest on the 2024 Prepayment Agreement.

Management Commentary and Tone

• CEO Dr. Paul E. Jacobs stated the company remained focused on disciplined execution while investing in technologies and infrastructure supporting the long-term strategy.
• Management expressed pride in the team's execution and commitment to delivering innovative connectivity solutions.
• The tone indicates continued progress across product, network, and commercial initiatives despite financial headwinds in the quarter.

Other Key Points

• The adoption of ASU 2025-07 resulted in the cessation of quarterly noncash mark-to-market adjustments for the embedded derivative associated with the 2024 Debt Repayment.
• A noncash gain of $4.181 million was recognized on the contingent interest feature within the 2024 Debt Repayment due to the achievement of certain milestones.
• Employee retention credits received in the second quarter of 2025 did not recur in 2026, contributing to higher operating expenses.
• A noncash disposal of assets recognized in the first quarter of 2025 did not recur in 2026.
• Cash flows from operations included $104.8 million from the Infrastructure Prepayment and $15.0 million in accelerated service fee payments from a customer.
• Financing activities reflected a draw under the 2023 Funding Agreement totaling $19.9 million, offset by a $6.3 million recoupment under the 2021 Funding Agreement.
• Preferred stock dividend payments were made during the first six months of 2026.