Good afternoon, ladies and gentlemen, and welcome to the Globalstar 1Q 2024 earnings conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, May 8, 2024. I would now like to turn the conference over to Rebecca Clary, CFO. Please go ahead. Thank you, operator, and good afternoon, everyone. After my prepared remarks, Jay Monroe, Executive Chairman, and Kyle Pickens, VP of Strategy, will join the question-and-answer session. Please note that today's call contains forward-looking statements intended to fall within the safe harbor provided under the securities laws. Factors that could cause the results to differ materially are described in the forward-looking statements and risk factors section of Globalstar's SEC filings, including its annual report on Form 10-K for the financial year ending 2023 and its other SEC filings, as well as today's earnings release. To start, Paul is not able to join today's call. Unfortunately, his mother passed away yesterday, and he is focusing on his family. We send our condolences to both the Jacobs family and also to the family of board member Mike Lovett, who unexpectedly passed away two weeks ago. We are extremely grateful for Mike's valuable contribution to our company during his time served on the board. While it is a sad time for the Globalstar team on a personal level, business has been encouraging. Today, we are announcing our first quarter results and providing operational highlights. We included a substantial update in the earnings release, so we will keep the prepared remarks section of this call brief. First, we achieved two significant milestones during the quarter: one satellite and one terrestrial. We initiated a contract with a government services company to utilize our satellite network for mission-critical applications. The proof of concept phase is now underway. Assuming final go-ahead after verification testing, the agreement has a five-year term and contains annual minimum revenue commitments escalating to $20 million during the fifth year, with the potential for significant upside through the agreement's revenue share arrangement. This opportunity represents a creative use of our satellite and spectrum assets, which does not materially utilize capacity we will use for our other customers. On the terrestrial side, we shipped the first commercial units of our XCOM RAN last month, an enormous accomplishment for our team. As previously announced, the XCOM RAN was chosen by one of the world's largest retailers for a critical deployment. We are hopeful that this is not only the beginning of a larger relationship with this customer but also the first of many more deployments for similar fulfillment management use cases. Also worth noting that the XCOM team has managed to meet the needs of this customer in over-the-air testing utilizing a 10 MHz channel, showing gains of four-five times compared to other small-cell deployments. We believe Band n53 and XCOM RAN are a powerful combination. Now turning to our financial results. We reported total revenue of $56.5 million, generated primarily from subscriber and wholesale capacity services, with service revenue up slightly from the prior year's first quarter. It's important to remember that the comparable quarter included certain non-recurring service revenue. Excluding this non-recurring item, service revenue would have increased by $3.7 million, or 7%. For subscriber-driven revenue sources, commercial IoT continues to grow. During the first quarter of 2024, IoT service revenue increased 24% due to higher ARPU and a larger subscriber base. Subscriber equipment revenue was down $2.7 million from the prior year's quarter due to the timing of commercial IoT and spot device sales. In 2023, we recovered from inventory shortages and experienced higher sales as a result of product availability. To illustrate this point, the first quarter of 2023 was a record high for any first quarter in the company's history for both spot and commercial IoT. Moving to other areas of our financial performance, the increase in net loss was driven primarily by non-cash items. After adjusting for these and certain non-recurring items that aren't representative of our core operating business, adjusted EBITDA was $29.6 million, representing a margin of 52%. Importantly, both total revenue and adjusted EBITDA during the first quarter were higher on a sequential basis as well as compared to the quarterly average of 2023, reflecting variability in revenue throughout the year. Based on these results and future expectations, today we are reiterating our full-year revenue and adjusted EBITDA guidance issued in February. We are excited about how 2024 has started and even more so about what is yet to come in the balance of the year. Paul, Kyle, Jason Bernstein, and I will be attending conferences on the East and West Coast in the coming weeks, with one presentation being streamed via webcast. So we look forward to speaking with you again soon. I will now turn the call back to the operator for Q&A. We will now begin the question-and-answer session. Should you have a question, please press star followed by one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. Your first question comes from the line of Simon Flannery from Morgan Stanley. Your line is open. Thank you very much. Good morning or good evening. Our condolences to Paul's family and to Paul. I wonder, Jay, could you talk a little bit about the pipeline, just where we are today versus, say, three months ago? Certainly seems like there's some good progress here. And then on the proof of concept, what's the timeline to getting final results from that and having it move into the next phase? And then finally, any updates on the constellation would be great, the next constellation. Great. Hey, Simon. I'm glad to do this. Let's take it in the reverse order, if you will. The constellation remains on schedule. We anticipate launching in 2025, as we've conveyed previously. So that is all where it ought to be. In terms of the work that we're doing for the proof of concept, that is a study and test that can go on for a few more months, and then it will convert into the full contract. It can convert almost any time that they believe that the service that they're getting has been debugged in a way that they like it, and then they can convert to that service that we talked about before. At the end of that five-year period, either party can or collectively, both parties can renew the contract so it can last longer. But it is set up fundamentally and initially as a five-year term. Anything else on those two subjects, Simon? No, I think that's fine. I think the $20 million you're sort of saying that that can be even larger if there is a revenue share component to that. I don't know if there's any more you can say about the nature of the service to help us visualize? No, we can't say much about what the actual service is. But what we can say is that we are optimistic that the revenue share component of it is substantial. It was structured this way for a number of reasons. But we are optimistic that because of the service that's being provided and to whom it's being provided, that they'll use it a lot more in a lot of varied ways. So we're pretty optimistic that that will produce additional revenue for us. Right. And then on the pipeline, just any other general level of activity? Yeah. Kyle, do you want to take the pipeline? Kyle, are you on mute? Can you hear me now? Yes. Yes, we can hear you. Okay. Sorry about that. I was on my HomePod, and then it switched. So yeah, sorry about that. So on the pipeline, there's several different components of the pipeline. I don't know if you're referring to XCOM RAN or to Band 53 or to satellite, but I'll just talk about all of them, I guess. So on the XCOM RAN, the first customer that we're working with, this global retailer that we've talked about, they could keep us pretty busy for quite some time. So I think that alone is a very substantial pipeline. The other opportunities in MFC, which is this micro fulfillment center where we're spending a decent amount of time, it's actually quite large. It's much larger than I would have even thought on the potential market. So we've been pretty active in going out to various trade shows and talking to the companies that are doing that and trying to explore where XCOM RAN could be beneficial to their deployments. We're also continuing to work with other situations where I mean, I think one of the areas to focus on is where you have opportunities that are difficult RF environments with large automated machinery moving around. So think ports where we're already active with Band 53. Think kind of shipyards and various logistics areas are very good opportunities for us to focus on, and we're spending time there. On broader Band n53 opportunities, we continue to work with the ecosystem like Qualcomm and Nokia and others, looking for opportunities. It's similar types of areas where we're focusing, places where there's critical infrastructure, high-value deployments like mines, infrastructure, ports again. That, I think, will be growing and building. One of the things that we've been working on is getting more 5G radios, which we're making good progress on that. So I think that will open up the market for that. And then on the satellite side, the pipeline is I mean, it's more kind of business as usual. I don't really have anything to highlight there, but the team is working on driving new products into the market, as they always do. Great. Thanks a lot for the color. Thanks. Your next question comes from the line of Mike Crawford from B. Riley Securities. Your line is open. Thank you. Can you talk about what parts of your balance sheet you might be looking to attack first as your free cash flows come in, especially as they accelerate with success on XCOM RAN and Band 53 licensing? So from a leverage perspective, I'm assuming that's what you're referring to on balance sheet improvement. So that's, as you know, mostly under our service agreements. So we have the 2021 funding agreement, which is recouped or brought down against service fees that we earn about $8.6 million a quarter. And so that's steadily reducing. I think the principal outstanding is about $66 million in that range. And then there's the 2023 funding agreement, which is about 50% of the total CapEx of our next-gen satellites that's funded over time. And that will be recouped in a similar way to the 2021 funding agreement. And so those are classified as debt under GAAP because of the terms of the agreements, but kind of substantively treated as deferred revenue in terms of prepayment for service, just in terms of how they get brought down, the principal balance gets brought down. Then the third tranche is true third-party debt in our 13% notes. I don't think we have any immediate plans to address those. They're paid half in PIK, half in cash and second lien, so market rate, at least at the time that we entered into them. So leverage is pretty good right now at under four times at the balance sheet date, and I think it's expected to go down over the next couple of years. So it's a pretty healthy level. I don't know if that's helpful, Mike, or if you have follow-up. Sure. I mean, those 13% notes are callable at PAR, I believe, next March. But we'll see. And then getting back to incorporating Band 53 into XCOM RAN, what development work remains to be done there, and when will that be a unified solution you can offer to the market? Yeah. As far as the exact technical work that needs to be done, I would defer to Paul. We can do a call with him later on. Originally, the XCOM RAN was based on a radio vendor called Baicells. We're taking more of that in-house. And so there's some technical work that the team needs to do. They are working on that right now. We think that we'll have some POC-type equipment later this year and then kind of a more full commercial launch shortly after that. Okay. Thanks, Kyle. And then just going back a couple of years now, there's been instances in the past where you've talked about prospective Band 53 customers or deployments. Have those other opportunities gone away, or are they still in negotiation, or? Yep. So that's a good question. So when we brought Paul and team on, one of the reasons that I mean, I can say that I think they're the greatest wireless engineering team that anybody could have. And so obviously, when we bring them on, we want to use their strengths and have them look at all the opportunities that we have. And not only are they great wireless engineering minds, they're also great business minds. I mean, Paul and team built Qualcomm into a very, very substantial company. And so we wanted them to look at all the opportunities, and it's Paul's company to drive going forward and decide how he wanted to move forward. And so he looked at all of the opportunities. There was, I think, two that we've talked about in the past. One of them, we have moved forward on. They are paying us and will be deploying Band 53. The other one, we have not moved forward with yet. We could potentially in the future, but we are not moving forward with them at this moment. We have instead focused on the project like Jay was talking about with the government service project. That's very substantial. And then things like the global retailer that we've talked about. So there's lots of opportunities ahead of us. We're very, as Rebecca's and her prepared remarks on, we're very excited about where we're going. But again, we had to defer to looking at all these opportunities and then high-grading the ones that we think have the greatest long-term potential for the company overall. Okay. Thank you. And then final question just relates to the guidance. So what would be the major causes of variance between the low-end and the high-end range of revenue that you've indicated? And are any spectrum license revenues contemplated in that guidance you gave? The answer is yes to the terrestrial piece, though other things obviously could solidify, right, in the coming months. We're still somewhat early. That could make a difference. But as we sit here today, the transactions that we expect to impact revenues are included. And so the variability is just that, right? I mean, we're talking about a lot of new deals and transactions, some of which we have a lot of certainty around the timing and the amounts. Others, we don't have as much, right? So as we move into the quarters like we did last year, we'll tighten that range as appropriate and guide toward or guide towards a particular part of the range. Excellent. Thank you. Thank you. Your next question comes from the line of George Sutton from Craig-Hallum. Your line is open. Thank you. Your deal with the retailer that you've mentioned you're working on certain micro fulfillment centers, that retailer obviously has substantially more facilities. I'm curious, what kinds of things need to be done to move them to a much broader footprint? Yeah. So hey, George. There's a couple of things. There's several internal things that they need to get through on some of their development issues. And then as far as our process is concerned, I think they're really kind of focused on some reliability work. But there's nothing that in our minds, I mean, we're very confident about the service and product. I think they just need to see it work for longer and get more comfortable with it. But again, all the signs are encouraging so far. Qualcomm's come up a couple of times on the call, and we had talked several months ago about Qualcomm creating a solution that they would take to market inclusive of Band 53. Can you give us any updates on if there's progress there? Yeah. There's definitely progress there. As a lot of you guys are, I mean, we're impatient and obviously trying to push things as fast as we can. But in the end, we're still a relatively small company working with a lot of really large companies. So it's progress, and we keep pushing them constantly. And they've been very, very supportive. So definitely progress, and we'll keep driving. Not too much more. Okay. And then lastly, a geeky question, which, Kyle, you would be perfect for, I think. OTA testing using 10 MHz gets you 4x-5x gains. Can you just explain what that means? So the way that the system works, and as Jay and I tell people all the time, we're often confused for engineers, but we actually aren't. But the way that the system works is it effectively is allowing you to get the full capacity of all the radios that you can see in an area. And so a lot of times, as you add density not a lot of times. In other situations, when you add density of radios, you're increasing the overlapping cells, and then you're so you're therefore increasing the noise and capacity as a function of signal-to-noise ratio. And so effectively, what they're saying is that with a 10 MHz channel and multiple RRUs that you can see, you're getting all of the capacity of all the RRUs or not all, but you're getting that kind of linear gain in capacity as you're adding RRUs. And that's basically what it is. That was a very geeky answer. Thank you very much. Thanks. Again, if you have questions, please press star followed by one on your touch-tone phone. Should you wish to decline from the polling process, please press star followed by two. Your next question comes from the line of Jeffrey Goodfellow. Your line is open. Hi, Jay. Jeff Goodfellow here. I'm wondering if I could get some colorful thoughts on two areas. One is the request for comments for the petition of rulemaking by your next constellation launch provider, SpaceX, who wants to share Globalstar's spectrum, apparently along with some other people, companies. And second no, we'll just go with that. Thank you. Jeff, there's always a process going on at the FCC. This service that we offer today is now in the hands of millions and millions of users globally. It provides lifesaving services daily. So we are extremely comfortable with where we are at the FCC. There's always going to be a little noise in the background there. But the fact is that we've operated for decades with their help, and we'll continue doing what we do today with the help of the FCC. That's flying satellites, providing MSS services, and saving lives. They know that. Our partner knows that. We're very, very comfortable in that working relationship. So we don't expect any changes to the regime that we live with. Great. Thank you so much. Thank you, Jeff. Your next question comes from the line of Charles Morris from Greenhouse. Your line is open. Thank you. Good afternoon. Wholesale capacity services were relatively flat year-over-year. What should I infer about that as we look to growth going forward? Yes. Thanks for the question, Charles. So we have disclosed before, the first quarter 2023 included $6.5 million of out-of-period revenue. About half of that was non-recurring in nature. So if you adjust for that, we're up quite a bit. But that's where a lot of the variability that I referred to in my remarks comes into play as far as revenue. That was all in wholesale capacity services, that $6 million? Yes. Got it. Yes. Okay. Yeah. Appreciate that. Yeah, thank you. Appreciate that. That's it for me. Okay. Thanks for the question. Your next question comes from the line of Lyman Delano from Beck Mack & Oliver. Your line is open. Good afternoon, gentlemen. My question was related to the decline by the FCC of SpaceX's license application for authority in your L and S band that was turned down at the end of March. Someone just addressed that a couple of minutes ago. I was wondering if you could elaborate as to whether it is likely that SpaceX will continue to lobby and line up support for going back again to the FCC. Jay, you said you were confident about your relationship, but I just would love it if you could reiterate that. Then one small question afterwards related to either a rumor or a report that the Mexican government some months back was putting up for auction your L and S band in Mexico. I haven't heard anything more about that, and I wonder if you could elaborate. Lyman, let's take the second one first. It would probably make some sense to check in with Barbee at one point or another on that process. But the process is effectively one that we are in the middle of and will participate in. And we're likely the only party that will do that for a number of reasons. But Barbee can give you, of course, a lot more detail on that when the time is right for you. On the question about people continuing to augur at the FCC for things, that's, as I said, gone on forever. And there are things that hang around the FCC for long, long periods of time, and nothing ever moves on them. So I wouldn't be troubled about that. I would go up to 30,000 feet and look down. Given the services that we provide and now to the millions of users that we provide it to and then recognize that it's a lifesaving service, we are very comfortable that the FCC will continue to do what it has done for Globalstar for decades, which is permit us to continue to operate our services, expand it as we have in the last years when we did our wholesale arrangement, as we're doing now with that government services thing that we've talked about. And again, they'll just let us give us the room that we need in order to fly satellites and save lives. I just think that's the thrust of it. There can always be stuff in the background, but I don't think it's going to dissuade the FCC from the path that they've been on with us for decades. Thank you. Thank you. No further questions at this time. Thank you, ladies and gentlemen, for participating. This concludes today's call. You may now disconnect.