Globalstar (GSAT) Q3 2026 earnings review
Globalstar advances its Amazon sale, but network costs cut profit
Globalstar cleared key satellite and regulatory hurdles for its buyout by Amazon, while network build costs weighed on quarterly results. Revenue fell 4% from a year ago to $71 million as wholesale capacity fees dipped on reimbursement timing and older consumer satellite phones lost users. Operating profit dropped by a quarter to $8 million because the satellite operator spent more on ground stations, wireless engineers, and merger lawyers. Chief executive Paul Jacobs highlighted the launch of the first replacement satellites and US regulatory approval to transfer its satellite licences to Amazon.
| Revenue | $70.9M -4% from a year ago |
|---|---|
| Operating income | $7.6M $10.2M a year ago |
| Commercial IoT equipment sales | $5.5M +31% from a year ago |
| Financial outlook | Suspended pending Amazon buyout in 2027 |
⚖️ Verdict: 🟢 Bullish
The story got better because the company knocked down two major conditions for closing its sale to Amazon in 2027. Launching the first replacement satellites and winning Federal Communications Commission approval reduces the risk that missed milestones will trigger a penalty of up to $110 million on the buyout price. One caution: standalone profit margins fell well below the 50% level management targeted before suspending its outlook, as private wireless hiring and network operating costs outpaced sales.
The question now is whether Globalstar completes its remaining replacement satellite milestones and foreign regulatory approvals on time to close the Amazon deal at the full price. If the second satellite batch launches on schedule, the buyout stays on track for 2027 without a price cut; if delays occur, shareholders face a lower payout. Future regulatory filings and launch updates will settle it.
🐂 Bull Case
Satellite Launch and FCC Approval Advance Amazon Deal
Globalstar is a satellite communications provider that agreed in April 2026 to sell itself to Amazon. The buyout requires regulatory sign-offs and the launch of HIBLEO-4 satellites, which are replacement spacecraft for its existing mobile satellite network. If the company misses its operational milestones, Amazon can cut the buyout price by up to $110 million.
Chief executive Paul Jacobs said the group "made significant progress during the third quarter, highlighted by the successful launch of the first set of our replacement satellites". In October, the Federal Communications Commission (FCC) Space Bureau approved Amazon's application to take over Globalstar's satellite spectrum licences. The company also received US and German authorisations for its next-generation C-3 satellite constellation and finished ground station upgrades in the US, Canada, and Greece.
These steps matter because they clear two of the biggest hurdles to closing the sale in 2027 and avoiding the price penalty. By our math, the satellite operator spent $205.9 million on capital projects in the third quarter alone to keep the network build on schedule.
What to watch: the launch of the second batch of HIBLEO-4 replacement satellites, which was previously scheduled for the second half of 2026. Completing that launch will satisfy the remaining spacecraft milestone tied to the merger price.
Commercial IoT Subscribers and Equipment Sales Accelerated
Commercial IoT, Globalstar's business of connecting industrial sensors and asset trackers by satellite, is the company's fastest-growing commercial line. It sells both the tracking hardware and the monthly satellite connection.
In the third quarter, the satellite operator "achieved record high Commercial IoT subscriber activations on a last twelve-months basis, resulting in a 25% increase in gross activations over the same period". That lifted average subscribers 8.9% from a year ago to 591,114, while monthly revenue per user edged up 2.8% to $4.34. Commercial IoT service revenue rose 12.0% to $7.7 million, and equipment sales climbed 31.0% to $5.5 million.
Because businesses buy the tracking devices before they activate monthly service plans, the 31.0% jump in hardware sales points to steady subscriber additions in coming quarters.
What to watch: net new Commercial IoT subscribers in the fourth quarter, after the group added 10,687 average subscribers from last quarter by our math. A larger increase would show that record device sales and the new two-way module are converting into recurring service fees.
🐻 Bear Case
Network Build and Wireless Spending Cut Operating Profit
Before suspending its financial outlook earlier this year, management forecast a full-year Adjusted EBITDA margin (earnings before interest, taxes, depreciation, and one-offs) of about 50%. Meanwhile, the company is spending heavily to develop XCOM RAN, its private 5G wireless system for warehouses and venues.
Globalstar noted that it has incurred XCOM personnel costs "in advance of significant revenue". Alongside ground network operating costs and $2.3 million of Amazon merger fees, that spending pushed third-quarter operating profit down 25.1% from a year ago to $7.6 million.
- Cost of services (running the satellite and ground network): 35.2% of revenue, up 5.1 percentage points from a year ago by our math
- Marketing, general and administrative (overhead and legal fees): 20.8% of revenue, up 5.5 percentage points from a year ago by our math
- Overhead excluding merger fees: 17.5% of revenue, still up 2.2 percentage points by our math
- Adjusted EBITDA margin: 42.7%, down from 50.9% a year ago by our math
This matters because even after stripping out merger costs and non-cash items, profitability sits more than 7 percentage points below the 50% level management previously targeted. XCOM RAN is still adding payroll without bringing in matching sales.
What to watch: cost of services and overhead excluding merger fees in the fourth-quarter report. Another quarter above 50% of combined revenue would confirm that network expansion and wireless hiring have permanently lowered the standalone profit margin.
Wholesale Fee Timing Pulled Total Revenue Down
Wholesale capacity services, where Globalstar leases satellite network capacity to a major direct-to-device partner and gets reimbursed for network upgrades, brings in nearly two-thirds of total sales. In the third quarter, wholesale revenue fell 5.8% from a year ago to $44.6 million, pulling total revenue down 4.0% to $70.9 million.
The company blamed the drop on the "timing of incurring network-related costs and receipt of the associated service fees for the reimbursement of such costs". Because Globalstar books operating costs as it builds ground stations but records the reimbursement fees on a contract schedule, quarterly wholesale revenue can swing even while the underlying partner contract expands.
What to watch: fourth-quarter wholesale capacity revenue against last year's fourth quarter, which included performance bonuses. That comparison will show whether recurring capacity fees can grow when reimbursement timing evens out.
Legacy Consumer Devices Keep Losing Subscribers
Before shifting toward wholesale capacity and industrial trackers, Globalstar relied on SPOT, its personal satellite safety messengers, and Duplex, its legacy two-way satellite phones. Both consumer lines have been shrinking as users cancel service.
In the third quarter, SPOT service revenue fell 9.1% from a year ago to $8.6 million as average subscribers dropped 8.0% to 202,952. Duplex service revenue fell 30.5% to $3.3 million as its subscriber base shrank 27.4% to 14,673. Together, the two legacy lines lost $2.3 million of quarterly sales from a year ago, more than wiping out the $0.8 million gain in Commercial IoT service revenue.
What to watch: combined SPOT and Duplex revenue in the fourth quarter. As long as legacy cancellations outpace industrial IoT additions in dollar terms, overall retail subscriber service revenue will keep shrinking.
👓 Other Themes
Prepayment Accounting Drove the Net Loss
Globalstar swung to a net loss of $15.7 million from a $1.1 million profit a year ago. Net interest expense more than doubled to $23.9 million because accounting rules require the company to record non-cash imputed interest on the infrastructure prepayments it receives from its wholesale partner. An accounting standard adopted this year also ended the quarterly derivative gains that helped last year's third quarter by $3.6 million.
💲 Other KPIs
Total deferred revenue — cash customers have paid upfront for satellite capacity and network services not yet delivered — rose 65.1% from a year ago and 11.7% from last quarter by our math. The increase came from $209.6 million of infrastructure prepayments received during the first nine months of 2026 to fund the next-generation network.
Cash and equivalents fell from $409.8 million last quarter and $447.5 million at year-end. By our math, Globalstar spent $205.9 million on capital projects in the third quarter ($414.2 million over nine months), mostly for replacement satellites and ground stations, which outpaced the $137.1 million of operating cash flow generated in the quarter.
Principal debt stepped down from $423.7 million at the end of the second quarter, though it stays slightly above the $410.0 million balance at year-end. During the third quarter, the satellite operator made its first scheduled $9.0 million repayment under its 2023 Funding Agreement, after finishing repayments on its 2021 agreement in the first quarter.
❓ Key Questions
When will the second HIBLEO-4 satellite batch launch?
The company launched the first set of HIBLEO-4 replacement satellites in the third quarter, and the Amazon merger price depends on hitting HIBLEO-4 milestones. Management did not say whether the second batch is still on track to launch before the end of 2026.
Which international regulatory approvals remain for the Amazon merger?
The US antitrust waiting period expired in July and the FCC Space Bureau approved the licence transfer in October. Investors need to know which foreign satellite or merger authorities still must sign off before the 2027 closing.
Is XCOM RAN generating meaningful revenue yet?
Globalstar again said it is paying XCOM wireless staff ahead of significant revenue, and it suspended earnings calls and financial outlooks. Without a revenue breakdown, outsiders cannot tell if earlier trials with Boingo and Parsons have turned into commercial orders.
How much did wholesale reimbursement timing hold back Q3 revenue?
Wholesale capacity sales fell 5.8% from a year ago because network build costs and reimbursement fee receipts did not line up in the quarter. Management did not disclose the dollar size of the timing gap or when those fees will arrive.