Globalstar Q2 2026 earnings: Higher costs drive an operating loss

Globalstar (NASDAQ: GSAT) reported Q2 2026 revenue of $64.8 million, down about 4% from $67.1 million a year earlier, while diluted EPS was -$0.23 versus $0.13. Higher transaction, network and technology-development costs pushed operations into a loss, while adjusted EBITDA declined to $26.0 million.

Core financial results

Service revenue declined by $3.2 million, partly because Q2 2025 included $6.6 million of out-of-period wholesale capacity revenue. Subscriber equipment revenue increased by $0.8 million, supported primarily by higher Commercial IoT device sales and, to a lesser extent, XCOM RAN system sales.

Operating expenses increased to $69.5 million from $61.0 million. This more than offset the quarter’s revenue and resulted in a $4.8 million operating loss, compared with operating income of $6.1 million a year earlier.

Historical per-share figures reflect the 1-for-15 reverse stock split completed on February 10, 2025. Adjusted EBITDA is a non-GAAP measure.

Business and segment performance

Commercial IoT remained Globalstar’s primary subscriber growth business, while SPOT and Duplex continued to contract. Wholesale capacity services remained the largest revenue source but faced an unfavorable comparison with the prior-year accounting item.

Average Commercial IoT subscribers increased to 580,427 from 534,505, and the company reported record quarterly activations. Gross Commercial IoT activations increased by more than 20% on a trailing-12-month basis. Because Commercial IoT ARPU declined to $4.31 from $4.40, subscriber expansion—not higher revenue per user—was the principal driver of the service revenue increase.

SPOT and Duplex revenue fell alongside subscriber churn. Average SPOT subscribers declined to 207,606 from 224,885, while average Duplex subscribers fell to 15,755 from 21,841. Commercial IoT growth was sufficient to lift total average subscribers to 803,980 from 781,470, but it did not fully offset the lost revenue from higher-ARPU legacy services.

Prior-year revenue timing masks growth, but costs still weakened margins

Excluding the $6.6 million of out-of-period wholesale capacity revenue recorded in Q2 2025, Globalstar said Q2 2026 service revenue would have increased by $3.4 million. The headline revenue decline therefore overstates the deterioration in the underlying service comparison.

Profitability nevertheless weakened beyond that timing effect. Adjusted EBITDA excludes transaction costs and certain other noncash or nonrecurring items, but it still declined by $9.8 million. Its implied margin fell to approximately 40% from 53%, showing that ongoing network and product-development spending also weighed on operating performance.

Profitability, cash flow and balance sheet

Marketing, general and administrative expenses increased to $23.0 million from $9.7 million, primarily because of legal and professional fees associated with the pending Amazon transaction. The adjusted EBITDA reconciliation identified $10.3 million of Q2 transaction costs.

Cost of services rose to $23.6 million from $19.5 million. Globalstar attributed the increase to next-generation ground-network construction, higher XCOM development spending and the absence of employee retention credits recognized in Q2 2025. Lower stock-based compensation and depreciation provided only a partial offset.

The net loss also reflected factors below the operating line. Net interest expense increased to $20.7 million from $7.4 million, partly because of noncash imputed interest related to the 2024 Prepayment Agreement. Globalstar also recorded a $1.4 million foreign-currency loss after an $12.0 million gain a year earlier. A $4.2 million noncash gain related to the contingent interest feature within the 2024 Debt Repayment partially offset those items.

Cash-flow figures were provided for the first six months of 2026 rather than the quarter alone. They show substantial investment in satellite and network infrastructure.

First-half operating cash flow included $104.8 million from the Infrastructure Prepayment and $15.0 million of accelerated service fees. Capital expenditures were primarily connected with replacement satellites and the Extended MSS Network.

Adjusted free cash flow is a company-defined non-GAAP measure that excludes infrastructure prepayments and reimbursable network capital expenditures. Its decline was primarily related to lower accelerated service-fee receipts and the timing of reimbursements for network costs.

Amazon transaction and satellite deployment

The waiting period under the Hart-Scott-Rodino Act expired on July 17, 2026, but the proposed Amazon transaction still requires other approvals, including from the FCC and certain international authorities. Closing is expected in 2027 and also depends on Globalstar meeting specified HIBLEO-4 replacement-satellite milestones.

Globalstar rescheduled the launch of its first group of replacement satellites for later in August 2026. It also continued developing third-generation satellites and constructing ground stations across North and South America, Europe and Asia. These projects are intended to increase network resilience, capacity and service capabilities under the Updated Services Agreements.

While the Amazon transaction remains pending, Globalstar does not intend to provide forward-looking guidance updates or hold future earnings conference calls.

Recent insider transactions

The supplied six-month insider data showed 46,710 shares purchased through 11 transactions and 14,387 shares sold through 10 transactions, resulting in net purchases of 32,323 shares. Individual grants without reported share quantities are excluded below, and the transactions do not by themselves establish insiders’ views of the company’s prospects.

Risks investors should monitor

• Spending is running ahead of some newer revenue streams. Globalstar is incurring network and XCOM development costs before those investments generate significant revenue, placing pressure on operating and adjusted EBITDA margins.
• Legacy subscriber churn remains a drag. Continued declines in SPOT and Duplex subscribers could offset part of the growth from Commercial IoT, particularly because Duplex carries substantially higher ARPU.
• Satellite and transaction milestones are connected. The Amazon transaction remains subject to regulatory approvals and specified replacement-satellite milestones, increasing the importance of launch and deployment execution.
• Infrastructure investment is absorbing cash. First-half capital expenditures exceeded reported operating cash flow, cash balances declined and debt principal increased, although some network spending is reimbursable under customer agreements.
• Interest and currency movements can materially affect net results. Higher imputed interest expense and the reversal from a foreign-currency gain to a loss contributed significantly to the Q2 net-loss swing.

Summary

Globalstar’s Q2 revenue decline was partly caused by an unfavorable comparison with out-of-period revenue recorded in 2025, while Commercial IoT subscriptions and equipment sales continued to grow. The more consequential change was the rise in network, XCOM and transaction-related expenses, which pushed operations into a loss and reduced adjusted EBITDA. The main items to monitor are whether Commercial IoT can outweigh legacy subscriber churn, whether spending begins to generate additional revenue, and whether satellite deployment and Amazon transaction milestones remain on track.

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