Good day, and thank you for standing by. Welcome to the Globalstar Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised, that today's conference call is being recorded. I would now like to turn the conference over to Rebecca Clary, CFO. You may begin.

Thank you, operator. And good morning, everyone. Before we begin, 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. I will first cover our financial performance and outlook, then Paul will review our operational highlights. Globalstar had a strong second quarter, driven by a 10% year-over-year increase in total revenue, reaching a record high of $60.4 million. Service revenue increased 18%, offsetting a decline in equipment revenue, which was impacted by the timing of IoT sales. As we have discussed in the past, the operating leverage of our business leads to a much greater corresponding increase in EBITDA as service revenue grows. Supporting this point, adjusted EBITDA grew by 20% this quarter with a margin of 54%, up from 49% in the prior year's second quarter. Turning to the balance sheet, we ended the quarter with $64 million of cash on hand as we continue to build liquidity ahead of milestone payments due to our next-generation satellite vendors in the coming months. 95% of these costs are recovered over the lifetime of the satellites via contractual service fees. Importantly, these satellites remain on schedule with an expected first launch in 2025. Rounding out other balance sheet metrics, our leverage ratio remains healthy at three times. Our blended annual cash interest rate is favorable at around 6%, and we expect to pay minimal cash taxes due to our $1.9 billion NOL carry forward. As a reminder, our debt stack is comprised primarily of…

Thanks, Rebecca, and it's great to be with everyone today. I have to say I'm very proud of our strong second quarter performance. We exceeded expectations and the continued momentum is feeling very positive. This quarter really highlighted Globalstar's ability to enable new capabilities through our decades of operating experience and the flexibility of our network to reliably and rapidly support and deploy new technologies and services. It's been almost a year since I became CEO, so I thought it would be good to take the opportunity to discuss and update you on some of our strategic and organizational initiatives. I had hoped to provide some of this context last quarter, but of course I wasn't able to be with you, and I appreciate all those who sent kind thoughts and wishes to me. We've organized ourselves now into a few categories of business, all of which leverage the core asset of our spectrum position. And these categories are consumer wholesale, consumer retail, government, commercial IoT, XCOM RAN, and n53 licensing. We've really added some great new talent to augment the team that's built and operated the satellite business for so many years, and we're starting to ramp up our team in India even more to support the development and testing of new technologies and products. We're very pleased that our wholesale services are growing in both the government and consumer sectors, and we're making good progress through this proof-of-concept that commenced this year for a government services company. We strongly believe we'll be able to generate growth from government customers and have identified a bunch of different opportunities for doing so. We are making targeted investments in our consumer retail offerings, really recognizing that there's a window of opportunity to still generate some reasonable economic returns there. While this…

[Operator Instructions] And our first question will be coming from Mike Crawford of B. Riley Securities. Your line is open.

Thank you. Could you just elaborate a little bit more on the product development efforts the team is doing to incorporate XCOM RAN into your private wireless networking offerings?

Yes. So we're in the process - we have the first pass of the product. In working with our customer, they've asked for a few features to be added to the product, and we're in the process of doing that both on internal development and also some components of the system that we're working with third parties on as well. So there's a small amount of incremental innovation that's going on. It's mostly just product-oriented stuff. It's no science project. It's really just building out a few more features.

And do you expect to test using Band 53 as an anchor spectrum to really increase capacity of what the product can do?

Yes. So we're going to show - we expect to show before the end of the year some demonstrations around Band 53 and the XCOM RAN technology, and then we'll look to be bringing a product out that incorporates a broad range of frequency bands so we can tailor that to what the customers want. But look, when we talk to customers about private network, I mean, it's a huge differentiator not just to have the technology but to have the frequency band as an anchor and one that's guaranteed because on a standalone basis, XCOM Labs was able to use CBRS spectrum, but it's not 100% mission critical because military can come in or somebody higher up in the priority stack can come in, and then you don't get to use that spectrum. So if you're going private cellular, you definitely have a mission critical application. Otherwise, you'd just have used Wi-Fi. So we want to make sure that we can provide really the most reliable system, and that's very differentiated for us.

Okay. Thank you, Paul. Just maybe one or two more. What should we be looking for next with this potential government customer?

Yes. So we're in the process of doing the proof-of-concept with them. When they are done with that, then you'll see us move into sort of the operational phase of it and full deployment. But what's really nice is a new set of technology runs over our network. The satellites are bent-pipe, so all of the technology innovation happens on the ground, so it's very easy for us to upgrade. We're doing things to make sure that performance is what was expected, that all the compatibility between this new technology and all of the other things that we're running over the network are there, and everything's been going quite well so far. So we have high expectations for that and see no reason why we wouldn't continue to move forward.

Okay. Thank you. And then last question is just on the replacement satellites. When do you expect to have your first launch window for the new satellites?

Yes. So it will be in the first half of next year that we look to launch. And the satellites are being built. The progress is being made there. Having great discussions with FCC. And, yes, so that's all moving ahead.

All right. Great. Thank you very much.

Thank you.

Thank you. [Operator Instructions] And the next question today will be coming from Logan Lillehaug of Craig-Hallum. Your line is open.

Hi, good morning, guys. This is Logan on for George. Maybe if we could just start with that government services contract. Obviously, you guys have said you're in the proof-of-concept. Just wondering if you guys are able to kind of move through that. Do you think it makes it easier to sell to maybe some other government services companies? Like, is that a necessary hurdle to maybe expand that offering?

Actually, so we're having good engagement with government across the board. We have this project that we're working on with XCOM RAN right now. But the thing that's actually quite exciting is that as we've gotten closer with our government services partner, this company, together we've been brainstorming other opportunities together, and there's quite a good pipeline of that. So in some sense, yes, we want to get through this first project together, make sure we work well together. But we see an excellent opportunity going forward. And then for sure there's other potential with other companies that are government contractors. And I'm sure you know it's, working with the government, building that channel takes time. So the idea of partnering with companies that have been added for a while really is a great go-to-market path for us.

Got it. And then maybe just one kind of quick follow-up for you Paul. Just any commentary on the AST FCC approval earlier this week? I mean, I know I think they still have a few steps to go in terms of actual cellular use, but I'm just wondering if you have any comments on the competitive environment, whether or not you think it's changing.

Yes, I don't think that particularly changes things. It's five satellites out of I think they were looking for 250 to run the service. And obviously, it takes a lot of effort. We know well we've been running a network for decades. And we are still the only ones running commercial direct smartphone services. So, yes, as I've said many times that business model is an unproven business model up to this point. Providing full cellular services outside of cellular coverage areas, Globalstar and Iridium went bankrupt doing that 20 years ago. And for sure cellular networks have grown since then. So, yes, there is an opportunity for connectivity. Obviously, we're showing that right now for connectivity outside of cell coverage. Question is, what's the incremental opportunity beyond what's being provided now? And so that business model, it needs to be proven. And I think for us, we're just going to continue to focus on where we've found the opportunities to generate real profitability and real revenue streams from this direct-to-cell business. And we keep track of everything that's going on. I've got a great team of engineers, lots and lots of experience in building new wireless technologies. So we're on it. We're definitely watching it. But like I said, it's really about proving that there's a business model there.

Yes, that's all for me. Appreciate it, guys.

[Operator Instructions] And at this time, there are no more questions in the queue. I would like to turn the call back over to Paul for closing remarks. Please go ahead.

Thanks, everybody, again, for joining us. Like I said, when I started, great quarter, made a lot of progress in a lot of different areas. It's been an excellent year so far, lots of things to learn, lots of new areas to push on, lots of ways to augment the team that we have. But it's a very exciting time for us. And as we look at all the different areas that I talked about the different business segments, we see great opportunities to drive growth in all of them. And so appreciate your support and look forward to continuing to have a lot of progress going forward. So thanks, everybody.

Thank you for joining today's conference call. This concludes today's meeting. You may disconnect.