Evaluating the Sustained Growth Potential of Satellite Communications Firms Amid Record Revenue Outliers

The satellite communications sector has long been a niche but critical component of global infrastructure. However, 2025 has marked a turning point, with record revenue outliers, strategic institutional bets, and technological breakthroughs reshaping the landscape. This article examines whether satellite firms can sustain their momentum by contrasting institutional investment behavior with earnings resilience, using case studies of Globalstar, Essex's strategic stake, and HBL Engineering's profit surge.

Institutional Investment: A Surge in Strategic Bets

Institutional confidence in satellite communications has reached a fever pitch. Essex Investment Management's $7.1 million stake in Globalstar-a 1.1% position in its U.S. equity holdings-exemplifies this trend, as a Nasdaq report noted. Essex's rationale is clear: Globalstar sits at an inflection point, with commercial IoT device sales surging 60% year-over-year and average subscribers rising to 543,000, according to a Globalstar Q3 2025 earnings call. Similarly, VEON's partnership with Starlink to expand mobile internet in Kazakhstan reflects a broader institutional push to leverage satellite tech for infrastructure gaps in remote regions, as a UA news report noted. These moves suggest that investors are not merely reacting to revenue spikes but are betting on long-term structural demand for connectivity.

Yet, not all institutional activity is equally transparent. HBL Engineering's satellite subsidiaries, despite a 343% year-over-year net profit surge, as a Business Standard report noted, lack detailed public data on institutional holdings. While foreign institutional investor (FII/FPI) stakes in HBL Engineering rose from 4.83% to 7.10% in Q3 2025, as a Trendlyne report noted, the absence of granular data on satellite-specific subsidiaries leaves room for uncertainty. This opacity contrasts with the clarity of Essex's Globalstar investment, highlighting a spectrum of institutional engagement across the sector.

Earnings Resilience: Can the Outliers Sustain?

The earnings resilience of satellite firms in 2025 is nothing short of extraordinary. Globalstar's Q3 revenue of $73.8 million, driven by wholesale capacity services and IoT growth, underscores its ability to monetize emerging demand, as a Globalstar investor release noted. However, net income declined due to non-cash items like interest expenses and foreign currency losses, as the same Globalstar release noted, raising questions about the durability of its margins.

HBL Engineering, meanwhile, offers a more robust case. Its operating profit margin (OPM) jumped to 44.49% in Q3 2025, up from 20.84% the prior year, as the Business Standard report noted, while sales surged 134.74% to INR 12,229 million. This resilience is partly attributable to its diversified satellite-enabled services, which include secure communications and real-time data transfer for mission-critical industries, as a Space42 press release noted. Yet, even here, technical challenges in the sector-such as United Launch Alliance's (ULA) repeated delays in launching a ViaSat-3 satellite due to oxygen tank valve issues, as a MyNews13 report noted-highlight operational risks that could erode margins if not managed.

Contrasting Capital Flows and Earnings: A Tug-of-War?

The interplay between institutional inflows and earnings resilience reveals a nuanced picture. On one hand, Essex's strategic stake in Globalstar and the broader institutional push into satellite infrastructure suggest confidence in the sector's long-term value. On the other, earnings metrics like Globalstar's declining net income and ULA's technical setbacks indicate that capital alone cannot insulate firms from operational headwinds.

HBL Engineering's case is instructive. Its profit surge and improved OPM demonstrate that satellite firms can achieve resilience through operational efficiency and diversified revenue streams. However, the lack of detailed institutional investment data for its satellite subsidiaries, as a Trendlyne report noted, raises questions about whether such performance can attract sustained capital inflows. This disconnect between earnings strength and institutional visibility may deter risk-averse investors, even as growth-oriented funds double down.

The Road Ahead: Sustaining Momentum

For satellite communications firms to maintain their 2025 momentum, they must address two critical challenges: scaling operational reliability and translating institutional interest into long-term capital allocation.

1. Operational Reliability: Technical setbacks like ULA's Atlas V issues, as a MyNews13 report noted, underscore the need for redundancy and innovation in satellite deployment. Firms that can reduce launch costs and improve hardware reliability-such as Space42's Thuraya-4 satellite, which operates on the L-band spectrum for mission-critical coordination, as a Space42 press release noted-will likely outperform peers.
2. Capital Allocation Transparency: While Essex's stake in Globalstar, as a Nasdaq report noted, and HBL Engineering's profit surge, as a Business Standard report noted, are promising, institutional investors require clearer visibility into satellite-specific subsidiaries. Without this, capital may flow to high-profile names (e.g., Starlink partners) at the expense of smaller but resilient players.

Conclusion

The satellite communications sector in 2025 is a study in contrasts: record revenue outliers coexist with operational fragility, and institutional enthusiasm clashes with earnings volatility. Firms like Globalstar and HBL Engineering demonstrate that earnings resilience is achievable, but sustaining it will require balancing technological innovation with financial discipline. As capital inflows evolve, the sector's ability to align institutional confidence with operational excellence will determine whether 2025's momentum becomes a lasting trend.