Globalstar, an American based company that released its first quarter results of the year 2021 today. The first quarter of the year ends on 31st March, 2021. Dave Kagan, who is the Chief Executive Officer of Globalstar said that they were happy to see recent signs of recovery in their Commercial Internet of Things sales channel with both their service as well as their equipment revenue higher than expected as compared to the pre-pandemic times in the first quarter of the previous year, 2020. They expected to return to the pre-COVID sales level by the second half of 2021 and that expectation was matched by the company in a very efficient manner. The company’s sales pipeline remains strong as ever and diverse and they are excited to see this recent momentum after the crisis caused in the market by the COVID-19. Over the last several months the company has made multiple strategic decisions to align their overall business model with their expectations which would help their growth in the Commercial IoT space, they have made multiple organizational changes to network infrastructure upgrades and product development efforts, and they believe these changes are the reason for their success. He also added by saying that their Commercial IoT pipelines have grown exponentially in the last few weeks, including a large opportunity for the company, potentially giving them north of 100,000 units, that we are actively pursuing for remote monitoring in the alternative energy segment. If the company is able to secure it, this deployment would drive significant efficiencies in the customer’s operations and could serve as a useful asset for similar uses in future cases. Additionally, in the last month, the company shipped its first ever 10,000 Commercial IoT units for the animal tracking deployment with their Australian partner, Ceres Tag. They believe animal tracking is a significant opportunity for Globalstar given not only its market size and the industry’s need to improve food supply chain integrity, but also because their network is uniquely designed to fulfill this specific field at a device size and even the prices are unmatched in the satellite industry. Due to the Commercial IoT effort it is helping in progressing and showing increasing traction with its large customers. The company’s CEO is confident that his team is creating the right products for where that market is going. He believes the company will be able to offer its customers remote connectivity at a value that is hard for others to match.
Financial Review for the First Quarter
● Total Revenue
The Total revenue for the first quarter of this year had taken a dip of 16% from the previous first quarter in 2020; however, this decline was mainly due to the timing of engineering service revenue. The lower service revenue of the company was offset partially by an increase in revenue generated from subscriber equipment sales.
● Service Revenue
The Service revenue in the first quarter of 2021 had decreased over the previous year’s quarter resulting primarily from engineering service revenue recognized during the first quarter of 2020 related to a network feasibility study, which amounted to $4.0 million. This contract of the company will still have a variable impact on the financial statements based on the timing and amount of contract milestones that the company completes, the services that were completed by the company during the first quarter of 2021 generated revenue worth over $0.5 million.