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Revenue | 9 Months Ended
--- | ---
Sep. 30, 2023
Revenue from Contract with Customer [Abstract] |
Revenue | 3. REVENUE Disaggregation of Revenue The following table discloses revenue disaggregated by type of product and service (amounts in thousands):
| Three Months Ended |  | Nine Months Ended
| September 30, 2023 |  | September 30, 2022 |  | September 30, 2023 |  | September 30, 2022
Service revenue: |  |  |  |  |  |  |
Subscriber services |  |  |  |  |  |  |
Duplex | $ | 7,978 |  |  | $ | 9,021 |  |  | $ | 20,088 |  |  | $ | 22,103 |
SPOT | 11,350 |  |  | 11,753 |  |  | 33,703 |  |  | 34,544 |
Commercial IoT | 6,347 |  |  | 4,673 |  |  | 16,881 |  |  | 14,381 |
Wholesale capacity services | 27,517 |  |  | 6,972 |  |  | 83,406 |  |  | 22,640 |
Engineering and other services | 451 |  |  | 882 |  |  | 1,167 |  |  | 2,025 |
Total service revenue | 53,643 |  |  | 33,301 |  |  | 155,245 |  |  | 95,693 |
Subscriber equipment sales: |  |  |  |  |  |  |
SPOT | 1,746 |  |  | 1,558 |  |  | 6,185 |  |  | 4,707 |
Commercial IoT | 2,262 |  |  | 2,713 |  |  | 9,975 |  |  | 6,427 |
Other | 32 |  |  | 54 |  |  | (6) |  |  | 371 |
Total subscriber equipment sales | 4,040 |  |  | 4,325 |  |  | 16,154 |  |  | 11,505 |
Total revenue | $ | 57,683 |  |  | $ | 37,626 |  |  | $ | 171,399 |  |  | $ | 107,198 |
The Company is the operator for certain satellite-enabled services offered by Apple ("Partner") (the "Services") pursuant to the agreement (the “Service Agreement”) and certain related ancillary agreements (such agreements, together with the Service Agreement, the “Service Agreements”). The Service Agreements generally require Globalstar to allocate network capacity to support the Services, which launched in November 2022. Revenue associated with the Service Agreements is included in "Wholesale capacity services" in the table above. As consideration for the services provided by Globalstar under the Service Agreements, payments include a recurring service fee, payments relating to certain service-related operating expenses and capital expenditures, and potential bonus payments subject to satisfaction of certain licensing, service and other related criteria. During the third quarter of 2023, revenue recognized in connection with the Service Agreements included approximately $4.4 million for a bonus earned for the maintenance of the Company's global MSS authorizations. During the first quarter of 2023, revenue recognized included $6.5 million received in connection with the amendment of the Service Agreements in February 2023 as consideration related to performance obligations completed in prior periods. Accounts Receivable The Company records trade accounts receivable from its customers, including MSS subscribers and its wholesale capacity customer, when it has a contractual right to receive payment either on demand or on fixed or determinable dates in the future. In addition to receivables arising from the sale of goods or services, the Company also has certain arrangements whereby it acts as an agent to procure goods and perform services under the Service Agreements. Receivables are included in "Accounts receivable, net of allowance for credit losses," on the Company's consolidated balance sheets except for the long-term portion of the wholesale capacity accounts receivable, which is included in "Prepaid satellite costs and customer receivable." The Company's receivable balances by type and classification are presented in the table below net of allowance for credit losses and may include amounts related to earned but unbilled receivables (amounts in thousands).
|  | As of:
|  | September 30, 2023 |  | December 31, 2022
Accounts receivable, net of allowance for credit losses |  |  |  |
Subscriber accounts receivable |  | $ | 20,203 |  |  | $ | 14,850 |
Wholesale capacity accounts receivable |  | 21,322 |  |  | 7,234 |
Agency agreement accounts receivable |  | 1,693 |  |  | 4,245 |
Total accounts receivable, net of allowance for credit losses |  | $ | 43,218 |  |  | $ | 26,329 |
Long-term wholesale capacity accounts receivable |  | — |  |  | 16,100 |
Total accounts receivable (short-term and long-term), net of allowance for credit losses |  | $ | 43,218 |  |  | $ | 42,429 |
During the third quarter of 2023, the Company reclassified $16.1 million of accounts receivable associated with the Service Agreements from long-term accounts receivable to short-term accounts receivable. This balance is associated with amounts that are contractually owed to the Company for meeting performance obligations related to the next-generation satellite constellation prior to the Phase 2 Service Period. The Company expects that this amount will be paid during the next twelve months. In February 2022, the Company entered into an agreement for the purchase of new satellites that will replenish the Company's HIBLEO-4 U.S.-licensed system under the satellite procurement agreement, as amended, with Macdonald, Dettwiler and Associates Corporation ("MDA") and certain other costs incurred for the new satellites; these payments are expected to be paid to the Company on a straight-line basis commencing with the launch of these satellites through their estimated useful life ("Phase 2 Service Period"). Based on construction in progress incurred by Globalstar, amounts expected to be billed by the Company associated with this phase of the Service Agreements wer e $177.7 million a s of September 30, 2023. In prior year filings, the Company recorded a long-term unbilled receivable and related long-term deferred revenue reflecting its Partner’s obligation to fund certain construction costs to the Company associated with the satellites that are being constructed to provide service during the Phase 2 Service Period. During 2023, the Company revised this presentation and applied this change to its December 31, 2022 balance sheet. This change in accounting presentation has no impact on Partner’s obligation to provide funding for the satellite construction costs nor the expected revenue the Company will recognize during the Phase 2 Service Period. Contract Liabilities Contract liabilities, which are included in deferred revenue on the Company’s consolidated balance sheet, represent the Company’s obligation to transfer service or equipment to a customer from whom it has previously received consideration. Contract liabilities reflect balances from its customers, including MSS subscribers and its wholesale capacity customer under the Service Agreements. The Company's contract liabilities by type and classification are presented in the table below (amounts in thousands).
|  | As of:
|  | September 30, 2023 |  | December 31, 2022
Short-term contract liabilities |  |  |  |
Subscriber contract liabilities |  | $ | 24,281 |  |  | $ | 21,987 |
Wholesale capacity contract liabilities |  | 33,810 |  |  | 52,652 |
Total short-term contract liabilities |  | $ | 58,091 |  |  | $ | 74,639 |
Long-term contract liabilities |  |  |  |
Subscriber contract liabilities |  | $ | 1,605 |  |  | $ | 1,704 |
Wholesale capacity contract liabilities, net of contract asset |  | 415 |  |  | 61,173 |
Total long-term contract liabilities |  | $ | 2,020 |  |  | $ | 62,877 |
Total contract liabilities |  | $ | 60,111 |  |  | $ | 137,516 |
For subscriber contract liabilities, the amount of revenue recognized during the nine months ended September 30, 2023 and 2022 from performance obligations included in the contract liability balance at the beginning of these periods was $18.9 million and $22.8 million, respectively. For wholesale capacity contract liabilities, the amount of revenue recognized during the nine months ended September 30, 2023 and 2022 from performance obligations included in the contract liability balance at the beginning of these periods was $41.6 million and less than $0.1 million, respectively. The duration of the Company’s contracts with subscribers is generally one year or less. As of September 30, 2023, the Company expects to recognize $24.3 million of its remaining performance obligations to its subscribers during the next twelve months. The Service Agreements have no expiration date; therefore, the related contract liabilities may be recognized into revenue over various periods driven by the expected related service or recoupment periods. As of September 30, 2023, the Company expects to recognize $33.8 million of its remaining performance obligations during the next twelve months. The components of wholesale capacity contract liabilities are presented in the table below (amounts in thousands).
|  | As of:
|  | September 30, 2023 |  | December 31, 2022
Wholesale capacity contract liabilities, net: |  |  |  |
Advanced payments for services expected to be performed with the second-generation satellite constellation during Phase 1 (2) |  | $ | 6,079 |  |  | $ | 99,671 |
Additional consideration associated with the 2021 and 2023 Funding Agreements (3) |  | 13,921 |  |  | — |
Advanced payments for services expected to be performed with the ground spare satellite launched in June 2022 during Phases 1 and 2 |  | 24,113 |  |  | 25,438 |
Advanced payments contractually owed for services expected to be performed with the next-generation satellite constellation prior to the Phase 2 Service Period |  | 15,700 |  |  | 22,540 |
Advanced payments for the Phase 1 service fee and service-related operating expenses and capital expenditures |  | 20,496 |  |  | 18,872 |
Contract asset (1) |  | (46,084) |  |  | (52,696) |
Wholesale capacity contract liabilities, net |  | $ | 34,225 |  |  | $ | 113,825 |
(1)In November 2022, the Company issued warrants to Partner (the "Warrants"). The initial fair value of the Warrants at the time of issuance was $48.3 million and recorded in equity with an offset to a contract asset on the Company's consolidated balance sheets. The fair value of the Warrants is recorded as a reduction to revenue over the period in which the Company performs its performance obligations through the estimated completion of the contract term, consistent with the period in which the customer benefits from the services provided. (2)During 2021, the Company received payments from Partner totaling $94.2 million (the "2021 Funding Agreement"). In February 2023, the Service Agreements were amended. This amendment, which was effective in April 2023, changed certain terms in the 2021 Funding Agreement, resulting in $88.0 million previously recorded as deferred revenue being re-characterized as debt. See further discussion in Note 6: Long-Term Debt and Other Financing Arrangements. (3)In connection with the Company recording the fair value of its financial obligations in the amended 2021 and 2023 Funding Agreements, it recorded a debt discount of $11.6 million and $4.5 million, respectively, representing the difference between the present value of the future principal payments discounted using the prevailing market rate at the date of issuance of the debt and the effective rate. The offset was recorded to deferred revenue and is being recognized into revenue over the Phase 1 and 2 Service Periods, respectively.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org//606/tableOfContent + Details
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