Globalstar, Inc. (NYSE:GSAT) Q1 2024 Earnings Conference Call May 8, 2024 5:00 PM ET

Company Participants

Rebecca Clary - VP and CFO
Kyle Pickens - VP, Strategy
Jay Monroe - Executive Chairman

Conference Call Participants

Simon Flannery - Morgan Stanley
Mike Crawford - B. Riley Securities
George Sutton - Craig-Hallum
Charles Morris - Greenhouse
Lyman Delano - Beck Mack & Oliver

Operator

Good afternoon, ladies and gentlemen. And welcome to the Globalstar 1Q 2024 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Wednesday, May 8th, 2024.

I would like to turn the conference over to Rebecca Clary, CFO. Please go ahead.

Rebecca Clary

Thank you, operator. And good afternoon, everyone. After my prepared remarks, Jay Monroe, Executive Chairman; and Kyle Pickens, VP of Strategy, will join the question-and-answer session.

Please note that today's call contains forward-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 forward-looking statements and Risk Factors section of Globalstar's SEC filings, including its annual report on Form 10-K for the financial year ending 2023 and its other SEC filings, as well as today's earnings release.

To start, Paul is not able to join today's call. Unfortunately, his mother passed away yesterday and he is focusing on his family. We send our condolences to both the Jacob's family and also to the family of Board member, Mike Lovett, who unexpectedly passed away two weeks ago. We are extremely grateful for Mike's valuable contribution to our company during his time served on the Board. While it is a sad time for the Globalstar team on a personal level, business has been encouraging.

Today we are announcing our first quarter results and providing operational highlights. We included a substantial update in the earnings release, so we will keep the prepared remarks section of this call brief. First, we achieved two significant milestones during the quarter, one satellite and one terrestrial. We initiated a contract with a government services company to utilize our satellite network for mission critical applications.

The proof of concept phase is now underway. Assuming final go ahead after verification testing, the agreement has a five year term and contains annual minimum revenue commitments escalating to $20 million during the fifth year, with the potential for significant upside through the agreement's revenue share arrangement. This opportunity represents a creative use of our satellite and spectrum assets, which does not materially utilize capacity we will use for our other customers. On the terrestrial side, we shipped the first commercial units of our XCOM RAN last month, an enormous accomplishment for our team.