Globalstar Reiterates 2025 Outlook: Understated or Playing Safe?

Globalstar GSAT reiterated its 2025 revenue outlook of $260-$285 million and expects adjusted EBITDA margins around 50% on the last earnings call. In the second quarter, revenues were $67.1 million, up 11% year over year, while adjusted EBITDA increased to $35.8 million from $32.6 million. The reiteration of the guidance signals confidence in Globalstar’s momentum, particularly in wholesale capacity services and commercial IoT. Commercial IoT is witnessing an increase in the average number of subscribers, underpinned by robust growth in gross activations in the trailing 12 months.

That said, the outlook may seem understated given the number of catalysts at play. GSAT is also advancing new innovative platforms, such as the RM200 two-way module and XCOM RAN, which could drive the top line further. RM200M module is witnessing growing traction across verticals like oil & gas, defense and MVNOs, and has been tested by more than 50 partners.

With XCOM RAN, GSAT is eyeing entry into terrestrial wireless markets, significantly broadening its total addressable market. The platform will also enable next-gen hybrid satellite-terrestrial network architectures, thereby further expanding business opportunities.

GSAT is witnessing growing traction in the government, especially U.S. federal agencies and defense markets, which present another big growth opportunity amid increasing defense budgets. The company is also investing heavily in comprehensive infrastructure upgrades and recently launched its global ground infrastructure program for the next-generation Extended MSS Network, or the C-3 system. Under this program, it will add about 90 antennas across 35 ground stations in 25 countries, which will significantly boost network capacity and resiliency. Each of these initiatives carries the potential to accelerate revenues beyond current guidance.

While C-3 strengthens Globalstar’s current foundation, the HIBLEO-XL-1 filing signals a move toward next-generation MSS capabilities. Filed through France, HIBLEO-XL-1 expands the potential by adding more satellites, new orbital shells and a broader frequency spectrum, surpassing its existing L, S and C-band frequencies to include additional MSS bands for mobile uplink and downlink, as well as feeder-link spectrum enhancements. 

Intense Competition Concerning

However, the satellite and communication industry is fiercely competitive, characterized by swift technological advancements and the rising number of new entrants alongside the incumbents. This could impact GSAT’s revenue trajectory if execution is patchy. Players like Iridium Communications IRDM and Israel-based Gilat Satellite Networks GILT are eyeing significant expansion of their addressable markets amid the increasing demand for global connectivity.

A major step in Iridium's diversification was the acquisition of Satelles, a company specializing in highly secure satellite-based time and location services. This new business line, known as Iridium Satellite Time and Location (“STL”), is a Positioning, Navigation and Timing (“PNT”) service that offers a resilient alternative to GPS and other GNSS systems, which can be vulnerable to jamming or spoofing. Interest in this solution has grown significantly, and the STL business is targeted to generate more than $100 million in service revenue per year by 2030. The company expects to generate about $1 billion in service revenues by 2030. To achieve this long-term goal, management is focused on developing several services, including Direct-to-Device (Iridium NTN Direct), IoT (Iridium Certus IoT products) and satellite-based personal communication devices in addition to STL.

While the company maintained the long-term outlook, it lowered the full-year 2025 service revenue growth guidance from 5-7% to 3-5%. The decrease is mainly due to three factors: the transition of maritime broadband to a companion service, voice subscriber losses related to canceled USAID funding noted in the first quarter and a delay in PNT revenues, now expected in 2026. However, it continues to forecast OEBITDA at $490 million to $500 million, up from $470.6 million in 2024.

Gilat Satellite Networks is focused on the defense and in-flight connectivity (“IFC”) businesses to drive top-line expansion. The company’s Defense unit is gaining healthy momentum, driven by increased global investment in secure, mission-critical SATCOM technologies. The Israeli Ministry of Defense placed orders exceeding $8 million for Gilat DataPath systems in the second quarter. In addition, Gilat DataPath systems also secured a contract to provide field and technical services to the U.S. Army, starting with an initial order of more than $7 million. The program includes an option to extend for up to five years, with a potential total value of approximately $70 million. The acquisition of Stellar Blu is aiding in expanding its IFC business.

Revenues are now expected to be in the range of $435 million to $455 million, up from the previous forecast of $415 million to $455 million. Adjusted EBITDA is anticipated between $50 million and $53 million compared with the earlier range of $47 million to $53 million.

GSAT’s Price Performance, Valuation and Estimates

GSAT’s shares have gained 36.9% in the past month compared with the Zacks Satellite and Communication industry's growth of 80.1%.

GSAT stock is trading at a substantial premium, with a forward 12-month price/sales of 15.35X compared with the industry’s 1.37X.

GSAT’s estimates are on an upward trajectory at present. The consensus mark for 2025 earnings has been revised up 77.1% to a loss of 8 cents per share over the past 60 days and the same for 2026 has moved north 200% to 1 cent.

At present, GSAT sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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