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Item 7. Management’s Discussion and Analysis

2026-02-27 compared with 2025-02-28 · 169 added, 190 removed, 160 unchanged (69% of the section changed)

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The following information contains forward-looking statements, which are not guarantees of future performance and are not necessarily indicative of future results and are subject to risks and uncertainties.

Should one or more of these risks or uncertainties materialize, our actual results may differ from those expressed or implied by the forward-looking statements.

See “ Forward-Looking Statements ” at the beginning of this Report.

Should one or more of these risks or uncertainties materialize, our actual results may differ from those express or implied by the forward-looking statements.

See “ Cautionary Statement About Forward-Looking Statements ” at the beginning of this Report for further information.

This Item generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.

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Reverse Stock Split and Listing on the Nasdaq Stock Market LLC

On December 17, 2024, by written consent, following the approval and recommendation of the board of directors and its Strategic Review Committee, Thermo, which collectively owns a majority of our issued and outstanding shares of common stock, approved proposals to amend our certificate of incorporation to (i) conduct a reverse stock split of our issued and outstanding shares of common stock at a ratio between 1 for 10 and 1 for 25, and (ii) reduce the authorized number of shares of common stock that we can issue in proportion to the reverse stock split.

Effective following the close of trading on February 10, 2025, we voluntarily withdrew the listing of our common stock from the NYSE American, effected the reverse stock split at a ratio of 1 to 15 shares of common stock and amended our certificate of incorporation to reduce the number of authorized shares of common stock that we may issue from 2,150,000,000 shares to 143,333,334 shares of common stock.

Effective following the close of trading on February 10, 2025, we voluntarily withdrew the listing of our common stock from the NYSE American, effected a reverse stock split at a ratio of 1 to 15 shares of common stock and amended our certificate of incorporation to reduce the number of authorized shares of common stock that we may issue from 2,150,000,000 shares to 143,333,334 shares of common stock.

Effective at the start of trading on February 11, 2025, our common stock began trading on a post-split basis under the symbol “GSAT” on the Nasdaq Stock Market LLC.

No fractional shares were issued as a result of the reverse stock split and it did not impact the par value of our common stock.

Any fractional shares that would otherwise have resulted from the reverse stock split were rounded up to the next whole share, except that any fractional shares resulting from the reverse stock split for any outstanding awards adjustments pursuant to the terms and conditions of our 2006 Equity Incentive Plan and the award or agreement governing such awards were rounded down to the next whole share.

Neither the reverse stock split nor the related amendments to our certificate of incorporation had any impact on the number of shares of preferred stock we are authorized to issue under our certificate of incorporation or the number of issued and outstanding shares of our Series A Preferred Stock.

All shares of common stock, warrants, stock-based compensation awards and per share amounts included in the Consolidated Financial Statements and applicable notes thereto in Part II, Item 8 of this Report and elsewhere in this Report have been retrospectively restated to reflect the effect of the reverse stock split and related amendments to our certificate of incorporation.

All issued and outstanding common stock, warrants, stock-based compensation awards and per share amounts included in the Consolidated Financial Statements and applicable notes thereto in Part II, Item 8 of this Report and elsewhere in this Report have been retrospectively restated to reflect the change in capital structure for the periods prior to the completion of the reverse stock split, as applicable.

Performance Indicators

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Comparison of the Results of Operations for the years ended December 31, 2025 and 2024

Our revenue is categorized as service revenue and equipment revenue.

We provide MSS to customers using technology from the Globalstar System.

Equipment revenue is generated from the sale of MSS devices that work over the Globalstar System.

Our revenue is categorized as service revenue and subscriber equipment sales.

Service revenue is generated by the MSS services we provide to customers using the Globalstar System.

Subscriber equipment sales are generated from the sale of MSS devices that work over the Globalstar System.

We also generate service and equipment revenue from the sale of XCOM RAN systems and associated services that support such systems.

For the twelve months ended December 31, 2024, total revenue increased $26.5 million, or 12%, to $250.3 million from $223.8 million in 2023, which primarily relate to an increase in wholesale capacity services revenue, partially offset by a decline in subscriber services revenue and equipment sales revenue.

See below for a discussion of the main fluctuations in revenue.

The following table sets forth amounts and percentages of our revenue by type of service (dollars in thousands).

For the twelve months ended December 31, 2025, total revenue increased $22.6 million, or 9%, to $273.0 million from $250.3 million in 2024 primarily related to an increase in wholesale capacity services revenue and higher volume of Commercial IoT device sales, partially offset by a decline in SPOT and Duplex subscriber services revenue and equipment sales revenue.

The following table sets forth amounts and percentages of our revenue by type of service for customers using the Globalstar System (in thousands):

December 31, 2025

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$ 257,309 94 % (1) $ 237,689 95 % (1)

The following table sets forth our average number of subscribers and ARPU by type of revenue.

(1) The remaining 6% and 5% of our total revenue for the years ended December 31, 2025 and 2024, respectively, is attributable to subscriber equipment sales from the sale of MSS devices that work over the Globalstar System and equipment revenue from the sale of XCOM RAN systems.

The following table sets forth our average number of subscribers and ARPU by type of subscriber services revenue:

Average number of subscribers for the year ended:

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Duplex 61.39 62.14

We count "subscribers" based on the number of devices that are subject to agreements that entitle them to use our voice or data communications services rather than the number of persons or entities who own or lease those devices.

We count "subscribers" based on the number of devices that are subject to agreements that entitle them to use our data or voice communications services rather than the number of persons or entities who own or lease those devices.

Other providers of comparable services may count their subscribers differently.

Wholesale capacity services include revenue generated from satellite network access and related services.

Government and other services include revenue generated primarily from terrestrial spectrum and network solutions as well as governmental and engineering service contracts.

Wholesale capacity services revenue reflects revenue from providing satellite network access and related services to the Customer under the Updated Services Agreement.

Government and other services revenue includes revenue generated primarily from terrestrial spectrum and network solutions as well as governmental and engineering service contracts.

None of these service revenue items are subscriber driven.

Accordingly, we do not present ARPU for wholesale capacity services revenue or government and other services revenue reflected in the table above.

Accordingly, we do not present ARPU for wholesale capacity services revenue or government and other services revenue in the table above.

Service Revenue

Wholesale capacity service revenue increased 33% in 2024.

This category includes revenue from the Customer under the Updated Services Agreements.

The majority of the increase during 2024 is due to fees related to expanded services that began in 2024.

Revenue also increased due to performance bonuses received during 2024 as well as higher network costs, which are both drivers of the consideration earned under this agreement.

Commercial IoT service revenue increased 15% in 2024 due to higher average subscribers and ARPU.

Average subscribers are up 6% year over year due to gross activation momentum experienced over the last year.

Importantly, gross subscriber activations are up over 30% on a consecutive quarter basis, with the fourth quarter producing the highest gross subscriber activations of any quarter during 2024.

The increase in ARPU was due to higher usage on the network as well as an improvement in the mix of subscribers on various rate plans.

SPOT service revenue decreased 7% in 2024 due to fewer subscribers resulting from competitive pressure.

Product engineering efforts are underway to develop a new consumer SPOT device, which we expect to stabilize or increase demand for such services from our subscribers.

Duplex service revenue decreased 22% in 2024 due primarily to fewer average subscribers resulting from churn exceeding gross activations over the last twelve months as we no longer manufacture and sell Duplex devices in favor of other use cases for the Globalstar System, including wholesale capacity services.

Government and other services revenue increased 126% in 2024.

This category includes fees earned from various governmental service contracts as well as services associated with XCOM RAN sales.

We signed an agreement in the first quarter of 2024 with Parsons Corporation, a leading technology provider in the national security and global infrastructure markets, to utilize the Globalstar System for a mission critical service for government applications.

The $2.5 million proof of concept phase commenced in February 2024 and is progressing as planned with completion expected in mid-2025.

This agreement has a five-year term, if the project is implemented, and contains annual minimum revenue commitments escalating annually to $20 million during the fifth year, with potential for further upside through the agreement's revenue share arrangement.

Wholesale capacity services revenue increased $27.4 million (or 19%) in 2025.

Wholesale capacity services revenue reflects revenue from the Customer under the Updated Services Agreements.

The majority of the increase during 2025 related to the timing and amount of service fees associated with the reimbursement of network-related costs as well as for fees related to certain expanded services.

Commercial IoT service revenue increased $1.0 million (or 4%) in 2025 due to a 6% increase in average subscribers offset partially by a slight decrease in ARPU.

Gross subscriber activations were up over 50% year over year, reaching a record high for annual gross activations since our Commercial IoT devices were first introduced.

We expect activations to continue to increase in 2026 due to commercial sales of our recently-launched two-way reference design module.

SPOT service revenue decreased $3.8 million in 2025 due to fewer subscribers, and to a lesser extent, a slight decrease in ARPU.

The decline in average subscribers is due to continued competitive pressure;

however, product engineering efforts are underway to develop a new consumer SPOT device, which we believe could potentially increase demand for such services from our subscribers.

Duplex service revenue decreased $4.9 million in 2025 due to fewer average subscribers resulting from our decision to discontinue the manufacture and sale of Duplex devices to increase our focus on maximizing other sources of revenue.

Government and other services revenue decreased 2% in 2025.

Government and other services revenue includes fees earned from various governmental service contracts as well as services associated with XCOM RAN sales.

We have a network services agreement with Parsons Corporation, a leading technology provider in the national security and global infrastructure markets, to utilize our satellite network for a mission critical service for government applications.

Revenue associated with this agreement increased in 2025 as we moved from the proof of concept phase into the first year of services provided under the agreement.

This increase was more than offset by a decrease in revenue associated with the timing of XCOM RAN system sales.

Subscriber Equipment Sales

Revenue generated from subscriber equipment sales decreased $7.0 million due primarily to the timing of Commercial IoT and SPOT device sales.

During 2023, we recovered from inventory shortages that impacted both device categories and experienced higher sales as a result of improved product availability.

Additionally, during 2023 we shipped a large volume of SmartOne Solar devices to a single value added reseller ("VAR"), roughly half of the decrease in Commercial IoT device revenue year over was due to this one customer.

We are currently developing new MSS subscriber devices, which we expect will increase equipment sales in the future.

Revenue generated from subscriber equipment sales increased $3.0 million during 2025 due to a 50% increase in Commercial IoT device sales compared to 2024.

Operating Expenses :

Total operating expenses increased 12% to $251.3 million in 2024 from $224.0 million in 2023, which is primarily related to an increase in cost of services and stock-based compensation, partially offset by reduced cost of subscriber equipment sales.

Total operating expenses increased 6% to $265.6 million in 2025 from $251.3 million in 2024, which is primarily related to an increase in cost of services and marketing, general and administrative expenses, offset partially by lower stock-based compensation.

A noncash loss on disposal of assets also contributed to the increase in operating expenses during 2025.

The main contributors to the variances in operating expenses are explained in detail below.

In February 2025, we were notified that we will receive an employee retention credit as a result of our eligibility under the provisions of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") for the second quarter of 2021.

We expect to receive this refund, totaling $2.0 million, in the near future.

When received, this refund will reduce operating expenses and will be allocated between Cost of Services and MG&A (defined below), based on the employee costs incurred during the eligible period.

During 2025, we received employee retention credits as a result of our eligibility under the provisions of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") for the second and third quarters of 2021.

The refunds totaled $3.9 million and reduced operating expenses in 2025 compared to 2024.

Based on the employee costs incurred during the eligible periods, $2.7 million was allocated to cost of services and $1.2 million was allocated to marketing, general and administrative expense.

Cost of Services

Cost of services increased $10.0 million, or 14%, to $83.2 million in 2025 from $73.2 million in 2024.

This increase was due primarily to network expansion in connection with services provided under the Service Agreements;

a substantial portion of network-related costs are reimbursed thereunder and this consideration is recognized as revenue in accordance with the terms of the Updated Services Agreements.

As expected with our new and upgraded ground infrastructure, gateway operating costs, such as maintenance and personnel costs, increased $11.0 million.

We do not expect the operating costs that support existing services under the Updated Services Agreements during the Phase 1 Service Period to increase meaningfully beyond current levels.

We expect that over the next few years in anticipation of the Services provided over the Extended MSS Network, costs to support the Updated Services Agreements will increase substantially.

Special Purpose Entity to our Consolidated Financial Statements for a description of the different phases of services under the Updated Services Agreements.

In connection with the August 2023 License Agreement with XCOM, we entered into a Support Services Agreement (the “SSA”).

During 2024, we recognized $3.1 million in expense associated with the SSA and other ancillary costs, of which the majority were noncash.

Costs to support new product development totaling $2.5 million also contributed to the increase in operating expenses during 2024.

We continue to incur higher network operating costs relating to our new and upgraded global ground infrastructure and network-related personnel.

In connection with services provided under the Updated Services Agreements, a substantial portion of these costs are reimbursed thereunder and such consideration is recognized as revenue in accordance with the terms of the Updated Services Agreements.

During 2025, personnel costs that support the Globalstar System increased $4.9 million.

Ground network costs, such as occupancy and maintenance charges, increased $2.7 million during 2025.

During 2025, the increase in cost of services was also due to expenses to support XCOM technology development, including the amortization of certain non-cash costs beginning in May 2024.

XCOM-related costs increased $3.0 million during 2025.

Costs to support new MSS product development, including research and development as well as personnel, also contributed to the increase in operating expenses during 2025.

These expense increases were partially offset by the CARES Act tax credits discussed above.

Cost of Subscriber Equipment Sales

Cost of subscriber equipment sales decreased 42% in 2024.

This cost decrease is generally consistent with the decrease in revenue generated from subscriber equipment sales during the year;

however, it is also related to margin improvement due to the mix of products sold in each period as well as the cost improvement from moving our manufacturing from China to Vietnam, which reduced tariffs incurred for U.S.

imports during a portion of 2024.

Cost of subscriber equipment sales increased 39% in 2025.

During the fourth quarter of 2025, we recognized $1.1 million in expense associated with tariffs on equipment imported by our U.S.

entity and re-exported to our foreign subsidiaries that were previously recorded recoverable duty drawbacks but are no longer deemed probable of being refunded.

The remaining increase in expense is generally consistent with the increase in revenue generated from subscriber equipment sales during the year.

Marketing, General and Administrative

Marketing, general and administrative expenses increased $8.0 million, or 18%, to $51.4 million in 2025 from $43.4 million in 2024.

During 2025, higher personnel costs of $2.1 million and franchise taxes of $0.6 million associated with the Globalstar SPE (as defined herein) increased operating expenses.

Costs for legal and professional fees increased by $3.8 million during the year.

Other smaller items, such as higher advertising costs, XCOM administrative expenses and sales commissions, also increased expenses during 2025.

These expense increases were partially offset by the CARES Act tax credits discussed above.

Stock-Based Compensation

Stock-based compensation expense increased $13.0 million to $35.5 million in 2024 from $22.5 million in 2023.

The increase was due primarily to restricted stock units ("RSUs") granted to certain executives in connection with the License Agreement in August 2023, the majority of the cost of which was recognized in 2024.

Stock-based compensation expense decreased $12.1 million to $23.4 million in 2025 from $35.5 million in 2024.

The decrease was due primarily to restricted stock units ("RSUs") granted to certain executives in connection with the License Agreement in 2023, the majority of the cost of which was recognized in 2024.

During 2023, we granted 3.0 million RSUs, which are earned over a four-year performance period and vest upon Globalstar common stock trading at various price levels throughout the performance period.

The total fair value of the RSUs was $39.5 million and is being recognized over the derived service period of 2.6 years;

with nearly 60% of the compensation cost for these RSUs is being recognized during 2024.

with 17%, 59% and 23% of the compensation cost for these RSUs being recognized during 2023, 2024 and 2025, respectively.

Reduction in Value and Loss on Disposal of Assets

During the first quarter of 2025, we recorded a loss on disposal of assets totaling $7.0 million, which is the net book value of one of our second-generation satellites that experienced a power control anomaly which rendered the satellite inoperable.

Based on our recent and historical testing, we currently believe that our constellation of other second-generation satellites will generally operate free of similar anomalies during their projected remaining useful lives.

Similar activity did not occur at this level during 2024.

Other (Expense) Income:

(Loss) gain on extinguishment of debt

Loss on extinguishment of debt

We recorded a loss on extinguishment of debt of $27.4 million during 2024.

In November 2024, we refinanced the 2023 13% Notes, resulting in a loss on extinguishment of debt due to the unamortized debt discount and deferred financing costs remaining prior to extinguishment as well as the make-whole fees at pay down.

In 2023, w e recorded a loss on extinguishment of debt of $10.4 million following the full pay-off of the 2019 Facility Agreement.

The extinguishment loss was recognized due to the remaining deferred financing costs and debt discount associated with the instrument at the time of repayment.

Loss on equity issuance

Loss on equity issuance was $5.0 million for 2023.

In connection with Thermo's guarantee of the 2023 Funding Agreement, we issued a warrant to purchase shares of our common stock to Thermo, a portion of which vested upon the effectiveness of the guarantee and occurred in December 2023.

The portion of the fair value associated with the credit enhancement, as recorded pursuant to applicable accounting guidance, was recorded as a loss on equity issuance.

Similar activity did not occur in 2024.

Similar activity did not recur in 2025.

Interest Income and Expense

Interest income and expense, net, decreased $1.0 million to $13.6 million for 2024 compared to $14.6 million for 2023 due to higher capitalized interest (which decreases interest expense) of $8.3 million.

As we continue to capitalize costs associated with upgrades to our network, our average CIP balance increases, which results in higher interest capitalized.

Higher interest income of $2.1 million also decreased "interest income and expense, net" during 2024.

These factors were offset partially by higher gross interest costs of $9.3 million due primarily to the average balance outstanding under the 2023 Funding Agreement

and the Current Debt Repayment during the respective periods, as well as interest expense associated with a significant financing component related to proceeds funded under the 2024 Prepayment Agreement.

Foreign currency (loss) gain

Interest income and expense, net, increased $27.3 million to $40.9 million for 2025 compared to $13.6 million for 2024.

The primary items increasing interest income and expense, net, during 2025 are discussed below:

• Infrastructure Prepayment:

Interest costs increased due primarily to a non-cash significant financing component ($40.6 million) in accordance with ASC 606 and, to a lesser extent, accrued fees on a portion (up to $225.0 million) of the Infrastructure Prepayment.

• 2024 Debt Repayment:

Interest costs increased by $9.4 million due to accrued fees ($20.3 million) offset partially by debt premium amortization (net of debt discount) ($10.9 million).

• Capitalized Interest:

Capitalized interest costs were lower by $11.4 million due in part to the decrease in interest costs eligible for capitalization, which increased "interest income and expense, net".

The primary items partially offsetting the increase in interest income and expense, net, during 2025 are discussed below:

• 2023 13% Notes:

Interest costs decreased by $25.5 million following the retirement of these notes in November 2024.

• Interest Income:

Interest income increased by $6.7 million due to a higher cash balance.

Foreign Currency Gain (Loss)

Changes in foreign currency gains and losses are driven by the remeasurement of financial statement items, which are denominated in various currencies, at the end of each reporting period.

We recorded foreign currency losses of $16.6 million in 2024.

We recorded foreign currency gains of $15.7 million in 2025.

We recorded foreign currency losses of $16.6 million in 2024.

Many of our foreign subsidiaries have USD-denominated intercompany payable balances, which impact the foreign currency gains and losses recorded each reporting period.

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dollar strengthening relative to other currencies.

Derivative Gain (Loss) and Other Income (Expense)

During 2025, derivative gain (loss) and other income (expense) fluctuated by $17.5 million to a gain of $15.0 million in 2025 from a loss of $2.5 million in 2024.

Derivative gains and losses primarily include the mark-to-market adjustments associated with the embedded derivative within the 2024 Debt Repayment.

The fluctuation in the value of this embedded derivative is due to certain significant inputs used in the fair value measurement, specifically the discount yield and the estimated achievement of project milestones.

As the discount yield used in the valuation process decreases, the fair value of the embedded derivative increases.

Similarly, as the length of time between the reporting date and the start date of the interest payments decreases, the present value of the projected interest savings increases, resulting in a higher derivative asset value.

Also, as the probability of reaching the relevant milestones increases, the fair value of the embedded derivative also increases.

Income Tax Expense (Benefit)

Income tax expense (benefit) fluctuated by $3.8 million to an expense of $5.9 million in 2025 from an expense of $2.1 million in 2024.

The increase during 2024 was due primarily to $1.0 million in expense for uncertain tax positions associated with interest on withholding tax related to the Canadian tax audit.

In both periods, income tax was recorded due to withholding tax expense associated with our global transfer pricing allocations in certain foreign jurisdictions.

The increase was primarily driven by $1.4 million of state current tax expense as a result of increased taxable income, $2.0 million related to state tax impacts of a new uncertain tax position in the U.S.

and $1.1 million of tax expense associated with income from operations of our Mexican subsidiary.

The tax expense in 2024 was primarily due to an uncertain tax position associated with interest and withholdings tax related to the Canadian audit.

Taxes to our Consolidated Financial Statements for further information on the Canadian tax audit.

Liquidity and Capital Resources

Our principal sources of liquidity include cash on hand, cash flows from operations and proceeds from the 2023 Funding Agreement and 2024 Prepayment Agreement (each term defined below).

These liquidity sources are expected to meet our short-term and long-term liquidity needs for funding our operating costs, capital expenditures, including related to the Extended MSS Network and other growth opportunities, and financing obligations, including scheduled recoupments under the 2021 and 2023 Funding Agreements and 2024 Prepayment Agreement as well as dividends on our perpetual preferred stock.

In addition, we have issued warrants to the Customer exercisable in accordance with the Updated Services Agreements and to Thermo in connection with its guarantee of the 2023 Funding Agreement.

Our principal sources of liquidity include cash on hand, cash flows from operations and proceeds from the 2023 Funding Agreement and Infrastructure Prepayment (each term defined below).

We expect these liquidity sources to meet our short-term and long-term liquidity needs for funding our operating costs, capital expenditures, including related to the Extended MSS Network and other growth opportunities, and financing obligations, including scheduled recoupments under the 2021 and 2023 Funding Agreements and 2024 Debt Repayment as well as dividends on our Series A Preferred Stock.

In addition, we have issued warrants to the Customer that are exercisable in accordance with the Updated Services Agreements and to Thermo in connection with its guarantee of the 2023 Funding Agreement.

These warrants would become a source of liquidity if exercised.

As of December 31, 2025 and December 31, 2024, we held cash and cash equivalents of $447.5 million and $391.2 million, respectively.

This increase was due primarily to amounts funded under the Updated Services Agreements, including $278 million under the Infrastructure Prepayment and $176 million from the sale of Customer Class B Units;

a portion of these proceeds was used to fund capital expenditures for the Extended MSS Network;

the remaining portion was held in cash and cash equivalents as of December 31, 2024 and will be used to fund capital expenditures in 2025.

Refer to Note 2:

Special Purpose Entity to our Consolidated Financial Statements for further discussion.

This increase in cash and cash equivalents during 2025 was due primarily to cash received pursuant to the Infrastructure Prepayment of $430.6 million (of which $131.0 million was received during the fourth quarter) and pursuant to the 2023 Funding Agreement of $27.1 million, offset by capital expenditures associated with our commitments under the Updated Services Agreements, including network expansion and upgrades.

The principal amount of our debt outstanding was $410.0 million at December 31, 2025, compared to $417.5 million at December 31, 2024.

This increase was due to the following (more detailed discussion and defined terms are below):

• PIK interest payments made during 2024 to the lenders of the 2023 13% Notes prior to their payoff of $13.6 million;

• Issuance of debt under the 2023 Funding Agreement totaling $37.7 million;

• Issuance of debt under the Current Debt Repayment totaling $221.6 million;

• Recoupment under the 2021 Funding Agreement totaling $34.6 million;

• Payoff of the remaining balance of $219.6 million outstanding under the 2023 13% Notes.

This decrease was due to scheduled recoupments of $34.6 million under the 2021 Funding Agreement offset by the issuance of debt under the 2023 Funding Agreement totaling $27.1 million during the third quarter 2025.

Cash Flows for the years ended December 31, 2025, 2024 and 2023

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Year Ended December 31,

Statements of Cash Flows 2024 2023 2022

2025 2024 2023

Net cash provided by operating activities $ 621,650 $ 439,192 $ 74,341

Net cash used in investing activities (550,383) (260,570) (175,612)

Net cash provided by (used in) financing activities

Net cash (used in) provided by financing activities

(16,180) 157,181 125,793

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Cash Flows Provided by Operating Activities

Net cash provided by operations includes primarily cash received from our customers from the sale of products and services, including the performance of wholesale capacity services as well as cash received from subscribers related to the purchase of equipment and satellite voice and data services.

Net cash provided by operating activities includes primarily cash received from our customers from the sale of products and services, including the performance of wholesale capacity services as well as related to the purchase of equipment and satellite voice and data services.

We use cash in operating activities primarily for network costs, personnel costs, inventory purchases and other general corporate expenditures.

Net cash provided by operating activities was $621.7 million during 2025 compared to $439.2 million during 2024.

This improvement was due to favorable working capital changes resulting primarily from cash received for the Infrastructure Prepayment of $278 million during 2024;

when cash is received pursuant to this agreement, it is recorded as deferred revenue (refer to Note 2:

Special Purpose Entity to our Consolidated Financial Statements for further discussion on this arrangement).

Cash received for the Infrastructure Prepayment will be used to fund capital expenditures to support the Extended MSS Network.

Other favorable changes in working capital reflect the timing of accounts receivable under the Updated Services Agreements.

An improvement in net income, after adjusting for noncash items, also contributed to the increase in cash flows provided by operating activities.

This improvement was due primarily to favorable working capital changes, specifically resulting from receipts pursuant to the Infrastructure Prepayment of $430.6 million during 2025 compared to $278.0 million during 2024;

these receipts are recorded as deferred revenue and used to fund capital expenditures for the Extended MSS Network, typically in the quarter following the receipt of funds.

During 2025, $45.0 million in accelerated fees were paid to us pursuant to the Updated Services Agreements, which also increased deferred revenue.

Other smaller items, such as higher net income, after adjusting for noncash items, was offset by other unfavorable working capital changes during the period.

Cash Flows Used in Investing Activities

Net cash used in investing activities was $550.4 million during 2025, compared to $260.6 million during 2024.

Net cash used in investing activities during both periods primarily included network upgrades associated with the Updated Services Agreements and payments of capitalized interest.

The increase from 2023 to 2024 was due primarily to the timing of payments made to MDA and SpaceX, including particularly amounts paid pursuant to the agreement entered into with SpaceX in October 2024 as discussed below in "Contractual Obligations and Commitments".

Cash Flows Provided by Financing Activities

Net cash provided by financing activities was $157.2 million in 2024 compared to net cash provided by financing activities of $125.8 million in 2023.

Net cash used in investing activities during both periods included primarily network upgrades associated with the Updated Services Agreements.

The increase during 2025 was principally due to milestone payments made to MDA Space and SpaceX totaling $316.2 million and $33.0 million, respectively, associated with the Extended MSS Network;

no payments associated with the Extended MSS Network were made to MDA Space in 2024 and $129.6 million were paid to SpaceX in 2024.

Other vendor payments associated with the Extended MSS Network ground network build out also increased cash used in investing activities during 2025.

Cash Flows (Used in) Provided by Financing Activities

Net cash used in financing activities was $16.2 million in 2025 compared to net cash provided by financing activities of $157.2 million in 2024.

In February 2024 and August 2025, we received proceeds from the 2023 Funding Agreement totaling $37.7 million and $27.1 million, respectively, which was used to pay amounts owed to vendors for network purchases pursuant to the Updated Services Agreements.

During 2025 and 2024, we made payments for the scheduled recoupments pursuant to the terms of the 2021 Funding Agreement and also paid cash dividends to holders of the Series A Preferred Stock.

During 2024, we received cash to fund the paydown of the outstanding principal balance (including a make-whole payment at paydown) due under the 2023 13% Notes of $234.9 million.

We also received cash of $176 million for the sale of the Customer Class B Units in the Globalstar SPE;

We also received cash of $176.0 million for the sale of the Customer Class B Units in the Globalstar SPE (as defined herein);

a portion of these funds was used (and the remaining amount will be used) to fund capital expenditures for the Extended MSS Network.

During 2023, we received proceeds from the sale of the 2023 13% Notes, which were used to pay the remaining principal amount due under the 2019 Facility Agreement and financing costs.

During 2024 and 2023, we received proceeds from the 2023 Funding Agreement totaling $37.7 million and $117.3 million, respectively, which were used to pay amounts owed to MDA.

Pursuant to the terms of the 2021 Funding Agreement, scheduled recoupment payments began in the third quarter of 2023 and totaled $34.6 million and $12.5 million during 2024 and 2023, respectively.

We also paid cash dividends in respect to our Series A Preferred Stock totaling $10.6 million and $11.9 million during 2024 and 2023, respectively.

Below is a summary description of our debt and other financing arrangements as of December 31, 2024.

For more information, see Note 7:

Long-Term Debt and Other Financing Arrangements to our Consolidated Financial Statements.

2024 Prepayment Agreement (including Current Debt Repayment)

The Updated Services Agreements provide that the Customer will make cash prepayments to us, including for approved capital expenditures in connection with the Extended MSS Network.

These prepayments consist of:

(1) an infrastructure prepayment (the “Infrastructure Prepayment”) of up to $1.1 billion, which is to be funded over the construction period on a quarterly basis, the proceeds of which the Globalstar SPE will use, together with the proceeds from the sale of the Customer Class B Units, to pay amounts due for the Extended MSS Network (including, but not limited to, construction and launch costs) and (2) the amount necessary for us to retire our 2023 13% Notes (the "Current Debt Repayment").

The 2023 13% Notes were repurchased in full on the Closing Date.

The terms of the Infrastructure Prepayment and the Current Debt Repayment are contained within one prepayment agreement (the “2024 Prepayment Agreement”).

The outstanding balance of the Current Debt Repayment was $222 million as of December 31, 2024.

Additionally, through December 31, 2024, we have received $278 million under the Infrastructure Prepayment.

As we receive proceeds from the Infrastructure Prepayment, we record a contract liability on our balance sheet for our obligation to perform future services to the Customer.

As we provide these services, we will receive additional service fees and use these fees to fully reduce the Infrastructure Prepayment liability as well as to repurchase or redeem all Customer Class B Units.

This period is expected to begin at the commencement of the Services provided over the Extended MSS Network and be completed within the design useful life of the new satellites.

The Current Debt Repayment and $225 million of the Infrastructure Prepayment may accrue fees (while the remaining amount of the Infrastructure Prepayment does not accrue fees).

Such fees payable to the Customer will be reduced or eliminated entirely if we meet certain defined milestones, at which time prior accruals will be reduced or eliminated.

Special Purpose Entity to our Consolidated Financial Statements for discussion of the different phases of services under the Updated Services Agreements, and Note 7:

Long-Term Debt and Other Financing Arrangements and Note 11:

Accrued Expenses and Other Non-Current Liabilities for discussion of the accrual of fees.

2021 and 2023 Funding Agreements

The Updated Services Agreements provide for, among other things, payment of up to $252 million to us (the “2023 Funding Agreement”) which we have used and intend to use in the future to fund 50% of amounts due under the 2022 satellite procurement agreement with MDA, as well as launch, insurance and ancillary costs incurred in connection with the construction and launch of these satellites.

The remaining amount of the satellite costs is expected to be funded from our operating cash flows.

During 2024, payments received under the 2023 Funding Agreement totaled $37.7 million.

The outstanding balance under the 2023 Funding Agreement was $155.0 million as of December 31, 2024.

Indebtedness and Other Financing Arrangements

At December 31, 2025, the principal amount of our debt totaled $410.0 million, which accrues fees at a weighted average stated rate up to 9%.

At December 31, 2025, our deferred revenue, net, totaled $869.0 million, of which the majority is expected to be earned over a period in excess of five years as we perform services under the Updated Services Agreements.

For more information regarding our 2024 Debt Repayment, 2021 and 2023 Funding Agreements, dividends paid to holders of the Series A Preferred Stock and Infrastructure Prepayment, see Note 7:

Long-Term Debt and Other Financing Arrangements and Note 2:

Accrued Expenses and Other Non-Current Liabilities for discussion of the accrual of the fees

The amount of the 2023 Funding Agreement and related fees are expected to be recouped from amounts payable for services provided by us under the Updated Services Agreements in installments for a period of 16 quarters beginning in the third quarter of 2026 (as amended).

For as long as any portion of the 2023 Funding Agreement is outstanding, we will be subject to certain covenants (as amended in the Updated Services Agreements) including (i) a minimum cash balance of $30 million, (ii) interest coverage and leverage ratios, and (iii) limitations on certain asset transfers, expenditures and investments.

During 2021, we received payments totaling $94.2 million (the "2021 Funding Agreement"), which are being recouped as services are performed by us over the Phase 1 Service Period with the last recoupment to be made in the first quarter of 2026.

During 2024, a total of $34.6 million was recouped.

The outstanding balance under the 2021 Funding Agreement was $40.9 million as of December 31, 2024.

No interest accrues on amounts outstanding under the 2021 Funding Agreement.

Our repayment obligations under the Funding Agreements are secured by a first-priority lien on substantially all of our assets.

Thermo has agreed to provide support for certain of our obligations under the 2023 Funding Agreement and the Updated Services Agreements.

As consideration for Thermo's guarantee, we issued to Thermo a warrant to purchase 667,000 shares (10.0 million shares prior to the reverse stock split) of Globalstar common stock at an exercise price equal to $30.00 per share (as calculated pursuant to the agreement) ($2.00 per share prior to the reverse stock split).

The right to purchase 333,000 shares under the warrant (5.0 million shares prior to the reverse stock split) vested upon effectiveness of Thermo's guarantee in December 2023, and the remaining 333,000 shares (5.0 million shares prior to the reverse stock split) may vest if and when Thermo advances aggregate funds of $25.0 million or more.

The warrant expires in December 2028.

2023 13% Notes

In March 2023, we sold $200.0 million in aggregate principal amount of non-convertible 13% Senior Notes due 2029 (the "2023 13% Notes").

In November 2024, the outstanding principal balance of the 2023 13% Notes was paid off with cash from the 2024 Prepayment Agreement and no amounts remain outstanding as of December 31, 2024 following such refinancing transactions.

For additional information, see Note 7:

Long-Term Debt and Other Financing Arrangements to our Consolidated Financial Statements

Series A Preferred Stock

In 2022, we issued 149,425 shares of 7.0% Perpetual Preferred Stock, Series A, with a liquidation preference of $1,000 per share (the “Series A Preferred Stock”) and a total fair value of $105.3 million.

Holders of Series A Preferred Stock are entitled to receive, when, as and if declared by our Board of Directors, cumulative cash dividends based on the liquidation preference of the Series A Preferred Stock, at a fixed rate equal to 7.00% per annum, payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year.

During 2024, we paid dividends, which were approved by our Board of Directors, totaling $10.6 million.

The shares of Series A Preferred Stock do not possess voting rights, other than certain matters specifically affecting their rights and obligations.

Series A Preferred Stock may be redeemed by us, in whole or in part, at any time.

The holders of the Series A Preferred Stock do not have any rights to convert or require us to redeem such stock.

Special Purpose Entity to our Consolidated Financial Statements.

Contractual Obligations and Commitments

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Leases to our Consolidated Financial Statements for further discussion).

For further discussion of the satellite procurement agreements and launch services agreements, refer to Note 10:

Commitments and Contingencies to our Consolidated Financial Statements.

Satellite Procurement Agreements

We have a satellite procurement agreement with MDA pursuant to which we expect to acquire at least 17 satellites (and up to 26 satellites) that are intended to replenish our HIBLEO-4 U.S.-licensed system and ensure long-term continuity of our MSS.

The satellite procurement agreement requires delivery of the initial 17 satellites during 2025.

The amended contract price for these satellites is $329.3 million, and we have the option to purchase up to nine additional satellites at a lower per unit cost, subject to certain conditions.

In addition, MDA will procure equipment to be incorporated into a satellite operations control center ("SOCC") totaling $5.0 million as well as other equipment for $4.2 million.

To date, the parties have accepted milestones totaling $224.3 million associated with the new satellites and related infrastructure.

We paid to MDA $14.0 million, $135.9 million and $67.1 million during 2022, 2023 and 2024, respectively.

We expect to continue to fund a portion of the future milestone payments using the 2023 Funding Agreement.

In February 2025, we entered into another agreement with MDA pursuant to which we expect to acquire more than 50 satellites related to the Extended MSS Network.

In 2022, we entered into a satellite procurement agreement with MDA Space pursuant to which we expect to acquire at least 17 satellites to replace our HIBLEO-4 U.S.-licensed system with an amended contract price of $329.3 million for 17 of the replacement satellites.

In addition, MDA Space will provide a satellite operations control center for $5.0 million as well as other equipment for $4.2 million.

The projected delivery dates in 2026 are later than the dates specified in the satellite procurement agreement.

We are contractually entitled to receive liquidated damages from MDA Space based upon the terms of the satellite procurement agreement due to MDA Space's failure to meet delivery milestones and the parties are discussing this matter.

Any damages would reduce amounts owed to MDA Space when realized or realizable.

Pursuant to the 2022 satellite procurement agreement, as of December 31, 2025, the parties have accepted milestones totaling $258.3 million associated with the new satellites and related infrastructure.

We have paid to MDA Space a total of $236.5 million under the 2022 satellite procurement agreement, of which $19.5 million was paid in 2025.

We expect to continue to fund a portion of the future milestone payments under the 2022 satellite procurement agreement using the 2023 Funding Agreement.

In February 2025, we entered into another satellite procurement agreement with MDA Space pursuant to which we will acquire more than 50 third-generation satellites related to the Extended MSS Network.

The total contract price for these satellites is $775.0 million.

The satellite procurement agreements with MDA contains customary termination provisions including our right to terminate the contract for convenience at any time, subject to certain conditions and payment obligations.

Pursuant to the 2025 satellite procurement agreement, to date, the parties have accepted milestones totaling $470.5 million.

During 2025, we paid to MDA Space a total of $316.2 million under the 2025 satellite procurement agreement.

We expect to continue to fund future milestone payments under the 2025 satellite procurement agreement using the Infrastructure Prepayment.

The 2022 and 2025 satellite procurement agreements with MDA Space contain customary termination provisions including our right to terminate the contract for convenience at any time, subject to certain conditions and payment obligations.

Launch Services Agreements

As more fully described in our Current Report on Form 8-K filed with the SEC on August 31, 2023, we have a Launch Services Agreement and certain related ancillary agreements with SpaceX, providing for the launch of the first set of the satellites we are acquiring pursuant to the satellite procurement agreement with MDA.

The Launch Services Agreements provide a launch window from April to September 2025.

To date, the parties have accepted milestones totaling $23.6 million associated with this agreement.

We paid to SpaceX $9.6 million and $29.7 million during 2023 and 2024, respectively.

In October 2024, we entered into another agreement with SpaceX for the launch of satellites related to the Extended MSS Network.

In each of August 2023 and June 2025, we entered into a Launch Services Agreement with SpaceX and certain related ancillary agreements (collectively, the “Launch Services Agreements”), providing for the launch of the first and second sets, respectively, of the 17 replacement satellites we are acquiring pursuant to the 2022 satellite procurement agreement with MDA Space.

As a result of the delivery delays of the replacement satellites (discussed above), Globalstar and SpaceX are working to establish an updated launch window for the first set of replacement satellites.

Globalstar expects the launch of the first and second sets of satellites during the first half and second half of 2026, respectively.

As of December 31, 2025, the parties have accepted milestones totaling $72.9 million associated with the Launch Services Agreements.

We have paid to SpaceX a total of $108.5 million under the Launch Services Agreements, of which $69.2 million was paid in 2025.

In October 2024, we entered into a separate agreement with SpaceX for the launch of third-generation satellites related to the Extended MSS Network.

To date, the parties have accepted milestones totaling $85.6 million associated with this agreement.

During 2024, we paid $129.6 million to SpaceX under this agreement, including $112 million as a long-term prepaid for future milestones.

The Launch Services Agreements with SpaceX contains customary termination provisions including our right to terminate the contract for convenience at any time, subject to certain conditions, including SpaceX retaining certain amounts of the contract value.

We paid to SpaceX a total of $162.6 million to SpaceX under this agreement, of which $33.0 million was paid in 2025.

A portion of the amounts paid to SpaceX were prepayment for future milestones, totaling $77.0 million.

The Launch Services Agreements and the October 2024 agreement with SpaceX contain customary termination provisions including our right to terminate the contract for convenience at any time, subject to certain conditions, including SpaceX retaining certain amounts of the contract value.

Funding for Phase 2 Service Period Asset Procurement

Under the Service Agreements, subject to certain terms and conditions, we expect to receive payments equal to 95% of the approved capital expenditures under the satellite procurement agreement for the HIBLEO-4 satellites and Launch Services Agreements for such satellites (to be paid on a straight-line basis over the design life of the satellites) beginning with the commencement of the Phase 2 Service Period.

The Phase 2 Service Period is expected to begin when the new satellites are successfully utilized to provide Services.

Under the Service Agreements, subject to certain terms and conditions, we expect to receive payments equal to 95% of the approved capital expenditures under the satellite procurement agreement for the replacement satellites, launch services agreements for such replacement satellites and other ancillary equipment and costs (to be paid on a straight-line basis over the design life of such replacement satellites) beginning with the commencement of the Phase 2 Service Period.

Funding for Extended MSS Network Asset Procurement

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Special Purpose Entity to our Consolidated Financial Statements, the Updated Services Agreements provide for prepayments from the Customer for approved capital expenditures associated with the Extended MSS Network.

As of December 31, 2024, we have outstanding purchase orders for this project totaling $290 million to vendors for various satellite and ground components of the Extended MSS Network.

These costs will continue until the construction period is complete.

As of December 31, 2025, we have incurred $708.6 million of the $1.5 billion projected spend for the Extended MSS Network, all of which to date has been funded with prepayments from the Customer.

We will continue to incur these costs until we complete construction and begin providing services over the Extended MSS Network.

Recently Issued Accounting Pronouncements

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Summary of Significant Accounting Policies in our Consolidated Financial Statements contains a description of the accounting policies used in the preparation of our financial statements as well as the consideration of recently issued accounting standards and the estimated impact these standards will have on our financial statements.

We evaluate our estimates on an ongoing basis, including those related to revenue recognition;

property and equipment;

and income taxes.

We evaluate our estimates on an ongoing basis, including those related to revenue recognition, property and equipment, income taxes and the valuation of the embedded derivative associated with the 2024 Debt Repayment.

We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances.

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Revenue Recognition

Our primary types of revenue include (i) wholesale capacity service revenue from providing satellite network access and related services over the Globalstar System, (ii) service revenue from MSS voice communications and data transmissions, (iii) subscriber equipment revenue from the sale of devices as well as other products and accessories and (iv) service revenue from providing engineering and communication services using our MSS and terrestrial spectrum licenses.

The complexities or judgements involved in revenue recognition are discussed below.

Our primary types of revenue include (i) wholesale capacity service revenue from providing satellite network access and related services over the Globalstar System, (ii) service revenue from MSS data transmissions and voice communications, (iii) subscriber equipment revenue from the sale of devices as well as other products and accessories and (iv) service revenue from providing engineering and communication services using our MSS and terrestrial spectrum licenses.

The complexities or judgments involved in revenue recognition are discussed below.

If a contract includes more than one performance obligation, such as under the Updated Services Agreements or when subscriber equipment is bundled with services in a multiple-element arrangement, we allocate the transaction price to each performance obligation in proportion to their standalone selling prices at contract inception and recognize them when, or as, each performance obligation is satisfied.

Determination of the relative stand-alone selling prices is complex and involves judgement, as prices may vary based on many factors, such as promotions, customer, volume and/or type of equipment sold.

Determination of the relative stand-alone selling prices is complex and involves judgment, as prices may vary based on many factors, such as promotions, customer, volume and/or type of equipment sold.

Service revenue is generally recognized over a period of time (consistent with the customer's receipt and consumption of the benefits of our performance) and revenue from the sale of subscriber equipment is recognized at a point in time (consistent with the transfer of risks and rewards of ownership of the product).

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For certain payments made under the Updated Services Agreements, the length of time between receipt of payment and the transfer of services by us is greater than twelve months.

Accordingly, these payments include a significant financing component.

Accordingly, such payments include a significant financing component.

For Duplex service revenue, we recognize revenue for monthly access fees in the period services are rendered.

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All other subscriber acquisitions costs are expensed at the time of the related sale.

For wholesale capacity services, we capitalize costs to fulfill a contract to the extent we expect to recover them and we also capitalize noncash consideration issued under the Updated Services Agreements.

Costs to fulfill a contract may include certain expenses incurred by us prior to the customer benefiting from the service, such as personnel and contractor costs and other operating expenses.

Under the Updated Services Agreements, we issued warrants to purchase shares of Globalstar common

stock, which were recorded at the estimated fair value of the consideration granted based on a Black-Scholes pricing model.

The fair value of the warrants was capitalized as a contract asset and is being recognized as a reduction of the transaction price over the estimated term of the Updated Services Agreements.

As considerations for services provided by us pursuant to the Updated Services Agreements, payments include a fixed service fee, fees relating to certain service-related operating expenses and capital expenditures, additional fees related to expanded services, and potential bonus payments subject to satisfaction of certain licensing, service and other related criteria.

The recognition of revenue associated with certain payments involves judgment, including variable consideration associated with the reimbursement of network-related costs as well the recognition of bonus payments.

The reimbursement of network-related costs is recorded as revenue as the costs are incurred by us and the receipt of bonus payments are generally recognized as payments are received, unless there is historical data to support recognition of revenue over the period in which the bonus is earned.

Under the Updated Services Agreements, we issued warrants to purchase shares of Globalstar common stock, which were recorded at the estimated fair value of the consideration granted based on a Black-Scholes pricing model.

The fair value of the warrants was capitalized as a contract asset and is being recognized as a reduction of the transaction price over the estimated term of the Phase 1 Service Period and Phase 2 Service Period under the Updated Services Agreements.

Property and Equipment

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We also capitalize costs associated with the design, manufacture and test of our gateways and other capital assets.

We track capitalized costs associated with our gateways and other capital assets by fixed asset category and allocate them to each asset as it comes into service.

For assets that are sold or retired, including satellites that are de-orbited and no longer providing services, we remove the estimated cost and accumulated depreciation.

We recognize a loss from an in-orbit failure of a satellite equal to its net book value, if any, in the period it is determined that the satellite is not recoverable.

Estimating the useful life of our assets is complex and involves judgement.

Estimating the useful life of our assets is complex and involves judgment.

We evaluate the appropriateness of estimated depreciable lives assigned to our property and equipment and revise such lives to the extent warranted by changing facts and circumstances.

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These strategies would be a source of additional positive evidence supporting the realization of deferred tax assets.

Embedded Derivative within the 2024 Debt Repayment

In connection with our financing arrangements, we review the features within the instruments to evaluate if they contain an embedded derivative.

If an instrument contains an embedded derivative, the derivative is bifurcated from the debt host contract and initially recorded at fair value with the difference between the basis of the debt host contract and the fair value of the embedded derivative recorded as the carrying value of the host contract.

The fair value of the embedded derivative is measured at fair value on a quarterly basis, or more often if deemed necessary, with gains or losses recognized in earnings.

We determine the fair value of derivative instruments based on available market data and assumptions developed by management using appropriate valuation models.

The terms of the 2024 Debt Repayment contain an interest reduction mechanism if we meet certain defined milestones associated with the completion of the Extended MSS Network.

At issuance, this feature was identified as an embedded derivative and resulted in a debt premium being added to the principal amount of the 2024 Debt Repayment.

We are amortizing the debt premium as an offset to interest expense over the loan term using the effective interest rate method.

When project milestones are achieved, the Company removes associated future cash flows from the total interest savings projections used to fair value the embedded derivative.

The majority of the present value of the cash flows removed from the derivative asset is recorded as a debt discount, while the remaining portion relieves the balance of accrued interest associated with that milestone on the Company's consolidated balance sheet.

The fair value of this embedded derivative is valued using a discounted cash flow model.

The most significant input used in the fair value measurement is the discount rate.

As the discount yield used in the valuation process decreases, the fair value of the embedded derivative increases.

Also impacting the fair value measurement is the length of time between the reporting period and the start of interest payments;

as the length of time decreases, the present value of the projected interest savings increases, resulting in a higher derivative asset value.

The most significant unobservable input that drives the cash flows used in the fair value measurement includes the estimated achievement of project milestones.

As the probability of reaching the relevant milestones increases, the fair value of the embedded derivative would also increase.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis