Globalstar (GSAT)

Business Overview

Globalstar is a low earth orbit (LEO) connectivity operator whose economics are dominated by one customer: Apple's wholesale capacity contract. Revenue rose 9% to $273.0M from $250.3M in FY2024, and adjusted EBITDA reached $136.1M on a 50% margin. That combination, positive EBITDA against a GAAP net loss of $8.7M ($8,651K in the 10-K), is typical of the space sector's more mature names. The stock priced at $80.61 on 128.1M shares as of 10 June 2026.

Apple, under its Updated Services Agreements, accounted for 63% of total revenue. That is concentration in a single commercial counterparty, and the recompete risk that follows looks nothing like a US defence re-bid cycle. Deferred revenue totalled $869M ($62.0M current plus $806.9M non-current), largely Apple prepayments that fund constellation spend.

Legacy mobile satellite services (MSS) still matter alongside the Apple contract: subscribers stood at 791,000 at end of period, averaging 782,736 across FY2025. Average revenue per user (ARPU) varies sharply by service, from IoT at $4.21 a month to SPOT at $13.97 and Duplex at $61.39. The business models guide contrasts Globalstar's wholesale Apple leg with Iridium's more diversified subscriber mix.

How the Numbers Read

Capex ran to $550.4M in FY2025, 201% of revenue, the most extreme ratio the constellation capex guide records for the industry's build phase (>50% of revenue). Unlike an equity-funded pre-profit constellation, this build leans on Apple prepayments, and $869M of deferred revenue is the balance-sheet trace of that funding.

Globalstar is EBITDA-positive at $136M on $273M revenue, one of the peer cases the EV/sales guide screens. The next contract cycle turns on constellation capacity and how long the Apple contract runs. FY2025 earnings matter less.

OCF-based runway screens do not apply here, because Globalstar is already OCF positive at the operating level. What matters is how prepayment amortisation and capex timing track Apple's volume.

Valuation Framework

Reading Globalstar means reading contract accounting alongside any revenue multiple. Deferred revenue is multi-year Apple obligations already paid for, so EPS moves mostly on revenue-recognition pace and the contract's take-or-pay mechanics, well ahead of subscriber growth on the legacy MSS base.

Globalstar's Apple share is the highest single-customer revenue concentration in the six-company peer set, well past Iridium (29% government revenue, post-build capex ~11.5%) or Planet (subscription backlog $503.7M, with no single customer near Globalstar's level).

What to Watch in the Financials

Apple revenue share and deferred balance. Apple is 63% of revenue and sits behind $869M of deferred revenue. Any change to agreement terms, volume tiers or prepayment schedules moves revenue and capex funding at the same time, because the two are the same contract.

Capex versus prepayments. At $550.4M, 201% of revenue, build spend is financed through Apple prepayments. If capex outruns deferred inflows, the gap needs equity or debt, whatever the headline EBITDA margin.

MSS subscriber ARPU mix. Legacy mobile satellite service subscribers, 791K of them, still generate real cash: IoT customers pay $4.21 a month, Duplex customers $61.39. That base funds the network while Apple wholesale scales alongside it.

Adjusted EBITDA margin at 50%. The $136M print holds only if Apple's margin contribution keeps offsetting depreciation as new satellites enter service.

Key Risks

Apple concentration at 63%. A contract reset or volume cut is a majority-revenue event.

Prepayment-funded capex cliff. The 201% capex intensity is manageable only while prepayments keep pace with build spend. Let capital deployed outrun deferred revenue release and free cash flow compresses fast.

A small revenue base carrying a large build plan. Constellation capacity and Apple-contract volumes in the build plan run well ahead of $273M FY2025 revenue. Execution delays or service-quality issues bite harder against a base this size than they would at a larger operator.