Globalstar, Inc. (GSAT)

How it makes money

Two streams. The dominant one is wholesale capacity: a contracted arrangement under which the handset customer pays Globalstar for satellite capacity and for network build-out, plus a service fee, under the 'Updated Services Agreements'. The rest is retail subscription: subscribers pay an activation fee and then recurring monthly or annual fees for voice minutes, messaging plans, or IoT data, and separately buy the hardware — SPOT devices, satellite phones, IoT modules — which shows up as subscriber equipment sales. In fiscal 2025 services were $257.3m and equipment $15.7m of $273.0m total, so roughly 94% of revenue is recurring service fees and only about 6% is hardware. Hardware is essentially a way to put more paying subscribers on the network rather than a profit centre in itself.

Revenue by segment

What Globalstar really owns is licences and orbital assets, not a brand or a customer lock-in. It holds mobile satellite service spectrum authorisations and terrestrial spectrum licences in about a dozen countries, covering roughly 12 billion MHz-POPs, and a LEO constellation with ground gateways that would cost billions and many years to duplicate. That combination is genuinely hard to replicate and it is why a large handset maker chose Globalstar rather than building its own network. But it is narrow, not wide: the filing itself notes that the customer is not prevented from using competing satellite networks, and it names Starlink, AST SpaceMobile, Iridium, Viasat/Inmarsat and others as competitors moving into direct-to-device connectivity. The advantage protects a position today; it does not obviously protect pricing a decade out.

The revenue mix cuts both ways. Most of the money is recurring subscription or contracted wholesale capacity, which does not switch off in a downturn — a phone maker embedding satellite SOS keeps paying, and an IoT tracker on a container stays activated. That is defensive. But the edges are not: SPOT devices are a discretionary outdoor purchase and subscriptions can lapse, equipment sales depend on industrial and logistics capital budgets, and Commercial IoT growth tracks freight and energy activity. The company itself frames demand as something that must increase for the plan to work, rather than as a stable base. Practically, expect the wholesale line to behave like a contract and the retail lines to breathe with the consumer and industrial cycle.

Key risks

• One customer is most of the revenue — The company states plainly that revenue under the Updated Services Agreements is the majority of its current revenue and that there is no assurance it will receive the revenue expected. The services are terminable by the customer on advance notice or on a force majeure event, and by either party on certain events of default. The filing also notes the customer is not prevented from using competing satellite networks.
• Satellites may not last as long as assumed — The filing warns that the actual orbital lives of its satellites may be shorter than anticipated, which could force it to reduce available capacity. The second-generation satellites carry a 15-year design life with no assurance they reach it, and after an initial six-month period the constellation is uninsured against in-orbit failures.
• Replacement satellites may be late or fail at launch — Globalstar discloses that it may not be able to launch satellites successfully or on time, including because of construction and delivery delays, which would put at risk the service periods it has committed to. Replacement satellite delivery has already been delayed; seventeen replacement satellites were expected during 2026 and more than fifty third-generation satellites are planned for the extended network. A launch failure could be a catastrophic loss that insurance would not fully cover.
• Ground infrastructure is a single point of failure — The company flags that disruption at its gateways or operations centres would leave it unable to serve customers. Control centres sit at three locations for redundancy, but gateways are exposed to natural disasters, extreme weather, equipment failure and terrorist attack, and material operational changes need prior FCC approval.
• Space hazards outside the company's control — The filing describes exposure to collisions with space debris and other LEO satellites, and to extreme space weather, noting that some debris cannot even be tracked and that a severe event could cause temporary or indefinite loss of service.
• The business plan depends on demand that has to materialise — Globalstar states that its plan depends on increased demand for satellite and terrestrial mobile broadband services, both existing and new, and separately warns that misjudging its capacity needs — or failing to obtain capacity — would hurt the business.
• Spectrum rights can be cut, shared or revoked — Among the regulatory risks the company lists are a reduction of its spectrum allocation, mandatory additional spectrum-sharing arrangements, and the revocation, modification or non-renewal of its licences. It also depends on third parties to monetise the terrestrial spectrum.
• Capital needs and debt covenants — The company lists among its risks the ability to raise adequate capital on reasonable terms and the reduced flexibility imposed by its financing arrangements and their restrictive covenants — relevant for a business that must keep replacing a satellite fleet.
• Technology moves fast in satellite communications — The filing warns that rapid and significant technological change in the industry, and its own ability to service, upgrade and replace equipment when needed, could impair its competitive position and require significant capital expenditure.
• Dependence on suppliers — Risks disclosed include the availability and cost of equipment, component parts and other materials, and reliance on key suppliers — a constraint for a company whose satellites and user devices are built by third parties.

Top customers account for 63% of revenue

Extreme, and disclosed as such. One customer — Apple Inc., referred to in the filing as 'the Customer' — accounted for 63% of total revenue in fiscal 2025, up from 58% in 2024 and 49% in 2023. No other customer exceeded 10% of revenue in any of those years. The dependence is therefore both very large and still increasing, and the agreement can be terminated by that customer on advance notice. Everything else — SPOT, IoT, Duplex, government — together makes up the remaining third, spread across a large number of small subscribers.