Iridium Communications Inc
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Item 1. Business
Business Overview
Iridium Communications Inc. (“we,” “us,” or “Iridium”) is a leading provider of global voice, data, and positioning, navigation and timing (PNT) satellite services. We are the only commercial provider of communications services offering true global coverage, connecting people, organizations and assets to and from anywhere, in real time. Our low-Earth orbit (LEO), L-band network provides specialized, reliable, weather-resilient communications services to regions of the world where terrestrial wireless or wireline networks do not exist or are limited, including remote land areas, open ocean, airways, the polar regions, and regions where the telecommunications infrastructure has been affected by political conflicts or natural disasters. In addition, our satellites have additional payloads to host specific additional services for other customers like Aireon LLC. We also utilize our long history operating a commercial LEO satellite system to provide a growing array of engineering and operational services to government customers and government network operators such as the U.S. Space Force.
Our primary business is to provide voice and data communications services to businesses, U.S. and foreign governments, non-governmental organizations, and consumers via our satellite network, which has an architecture of 66 operational satellites with in-orbit spares and related ground infrastructure. We utilize an interlinked mesh architecture in space to route traffic across our satellite constellation using radio frequency crosslinks between satellites. This architecture minimizes the need for local ground facilities to support the constellation, which facilitates the global reach of our services and allows us to offer services in countries and regions where we have no physical presence.
We primarily sell our products and services to commercial end users by recruiting and expanding a global wholesale distribution network, currently encompassing approximately 120 service providers, approximately 310 value-added resellers (VARs), and approximately 90 value-added manufacturers (VAMs), which create and sell technology that uses the Iridium network either directly to the end user or indirectly through other service providers, VARs or dealers. These distributors often integrate our products and services with other complementary hardware and software and have developed a broad suite of applications using our products and services to target specific industries or business areas. We expect that demand for our services will increase as more applications are developed and deployed that utilize our technology.
Our commercial business, which we view as our primary source of long-term growth, is diverse and serves markets such as emergency services, maritime, aviation, government, utilities, oil and gas, mining, recreation, forestry, heavy equipment, construction, railways and other transportation. Many of our end users view our products and services as critical to their daily operations and integral to their communications and business infrastructure. For example, multinational corporations in various sectors use our services for business telephony, email and data transfer, including telematics and personal location tracking, and to provide mobile communications services for employees in areas inadequately served by other telecommunications networks. Commercial enterprises use our services to track and control assets in remote areas and provide telematics information such as location and engine diagnostics. IoT (Internet of Things) VARs integrate our products and services into diverse solutions including asset tracking, environmental monitoring, condition-based monitoring and security and alerting solutions, which are used across industries. Ship crews and passengers use our services for ship-to-shore calling, as well as to send and receive email and data files, and to receive electronic media, weather reports, emergency bulletins, and electronic charts. Shipping operators use our services to manage operations on board ships and to transmit data, such as course, speed, fuel, weather, and other navigation service data, as well as for emergency services, as one of only two networks currently approved to provide Global Maritime Distress and Safety System (GMDSS) services. Increasingly, ships utilize Iridium terminals with integrated data and safety capabilities to complement and backup higher speed broadband services from other satellite operators that are subject to service outages, interference during rain, and geographic regulatory restrictions. Aviation end users use our services for air-to-ground telephony and data communications for position reporting, flight following, emergency tracking, weather information, electronic flight bag updates, and airline operational communications. Recreational users rely on our services as a safety and critical personal communications lifeline to remain in contact with friends and family, as well as for emergency distress signals.
We have also seen growing adoption of our services to support autonomous systems, for which Iridium is used for command and control, image transmission and environmental data gathering via unmanned aerial, underwater and surface vehicles. Iridium Certus® provides a platform for our partners to develop specialized broadband and midband (a term we use to describe services between our legacy 2.4 Kbps narrowband and our 128 Kbps and higher speed broadband offerings) applications on our network. In 2024, we introduced additional Iridium Certus offerings featuring Iridium Messaging Transport® (IMT®) that enable IoT applications to send more data, with greater security and natively delivered via cloud infrastructure. Throughout 2025, our VAM and VAR partners continued to innovate around our Certus IoT technology platform, developing and certifying new products and applications across industrial IoT, machine-to-machine and remote personnel use cases. With broadband
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services provided for the maritime, land-mobile and aviation industries and a midband service designed for maximum mobility, Iridium Certus offers flexibility to scale device speeds, sizes, and power requirements both up and down based on the needs of the end-user. We expect that these and future Iridium Certus service offerings will continue to drive growth opportunities in our commercial business.
We are developing a new service called Iridium NTN DirectSM, which we expect to commercially launch from our existing satellite constellation in 2026. Iridium NTN Direct is a 3GPP (3rd Generation Partnership Project) standards-based service that will provide Narrowband Internet of Things (NB-IoT) and direct-to-device (D2D) connectivity across the globe when fully deployed. 3GPP is an international collaboration that develops and maintains technical specifications for mobile communications technologies, enabling global interoperability of mobile networks and devices. Iridium frequencies and technology were accepted as part of 3GPP Release 19, which allows Iridium NTN Direct to be accessible via cellular chipsets designed to 3GPP standards.
In 2024, we acquired Satelles, Inc. (Satelles), a provider of highly secure, satellite-based PNT services that complement and protect Global Positioning System (GPS) and other Global Navigation Satellite System (GNSS) reliant systems. Time synchronization and location data play an important role in the global economy, particularly for major industries supported by critical infrastructure, such as financial services, telecommunications, cybersecurity, shipping, and transportation. In 2026, we are introducing an Application Specific Integrated Chip (ASIC) to allow partners to more cost effectively integrate our PNT services into their diverse applications using less power and space. We believe the acquisition of Satelles and our growing portfolio of PNT applications and distribution partnerships could generate substantial growth in our service revenue, as well as incremental growth in our equipment and engineering services revenue over the coming years, from both government and commercial customers. We also believe that Iridium PNT technology and services have application and business potential in other industries, like cybersecurity identity management by providing a trusted, authenticated location for data and financial transactions.
The U.S. government, directly and indirectly, has been and continues to be our largest single customer, generating $257.0 million in revenue, representing 29% of our total revenue, for the year ended December 31, 2025. This does not include revenue from the sale of equipment that may ultimately be purchased by U.S. or non-U.S. government agencies through third-party distributors, or airtime services purchased by U.S. or non-U.S. government agencies that are provided through our commercial gateway, as we lack specific visibility into these activities and the related revenue. We operate primarily under a multi-year, fixed-price contract with the U.S. government, which we refer to as our Enhanced Mobile Satellite Services (EMSS) contract to provide specified satellite airtime services for an unlimited number of U.S. Department of War (DoW) (previously referred to as the Department of Defense) and other federal government subscribers. At signing in September 2019, the EMSS contract had a total value of $738.5 million over its seven-year term ending in September 2026. The current fixed-price annual rate of the EMSS contract is $110.5 million through September 2026, with one six-month extension option, exercisable at the election of the U.S. government, at the end of that period. We provide other services, such as Iridium Certus and Iridium PNT, to the U.S. government under separate arrangements for an additional fee.
The U.S. government owns and operates a dedicated gateway that is only compatible with our satellite network, and for which we provide certain maintenance services, and technology development engineering and support services, under contracts managed by the U.S. Space Force. The U.S. armed services, State Department, Department of Homeland Security, Federal Emergency Management Agency (FEMA), Customs and Border Protection, and other U.S. government agencies, as well as other nations’ governmental agencies, use our voice and data services for a wide variety of applications. Our voice and data products are used for numerous primary and backup communications solutions, including logistical, administrative, morale and welfare, tactical, and emergency communications. In addition, our products are installed in ground vehicles, ships, and rotary- and fixed-wing aircraft and are used for command-and-control and situational awareness purposes. Our satellite network provides increased network security to the U.S. government because traffic is routed across our satellite constellation before being brought down to earth through the dedicated, secure U.S. government gateway. The U.S. government has made, and continues to make, significant investments to maintain and upgrade its dedicated gateway, to purchase our voice and data devices, and to invest directly and indirectly in research and development and implementation support for additional services on our network, such as Distributed Tactical Communications Services (DTCS), Iridium Managed Access-Distributed Tactical Communication System NEXT (MA-DNX) and Iridium Certus.
We also provide engineering and support services to the U.S. government under a contract awarded by the Space Development Agency (SDA) in May 2022 to General Dynamics Mission Systems, with Iridium as a subcontractor, which we refer to as the SDA contract. Under this contract, General Dynamics Mission Systems and Iridium are building ground entry points and operations centers for the DoW’s Proliferated Warfighter Space Architecture (PWSA) and will provide network operations and systems integration services for the SDA’s next tranche of proliferated low-Earth orbit satellites.
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At December 31, 2025, we had approximately 2,537,000 billable subscribers worldwide, representing a 3% increase compared to December 31, 2024. Total revenue increased from $830.7 million in 2024 to $871.7 million in 2025, representing a 5% increase.
Industry
We compete primarily in the mobile satellite services sector of the global communications industry. Mobile satellite services operators provide voice and data services to people and machines using a network of satellites and ground facilities, and utilize licensed radio frequency spectrum in what is called the L- or S-bands that are ideal for (among other things) consumer devices, small antennas, and battery powered devices. Satellite based L- and S-band frequencies were fully allocated by the International Telecommunications Union (ITU) in the early 1990s and are utilized by a limited number of mobile satellite operators like Iridium. Mobile satellite services are intended to meet users’ needs for connectivity in all locations where terrestrial wireless and wireline communications networks do not exist, do not provide sufficient coverage, or are impaired, including rural and developing areas that lack adequate wireless or wireline networks, airways, ocean and polar regions where few alternatives exist, and regions where the telecommunications infrastructure has been affected by political conflicts or natural disasters.
Government organizations, including military and disaster response agencies, non-governmental organizations, and industrial operations and support teams depend on mobile and fixed voice and data satellite communications services on a regular basis. Businesses with global operations require reliable communications services when operating in remote locations around the world. Mobile satellite services users span many sectors, including emergency services, maritime, aviation, government, utilities, oil and gas, mining, recreation, forestry, heavy equipment, construction, railways and other transportation, among others. Many of our customers view satellite communications services as critical to their daily operations.
While traditionally requiring purpose built, proprietary devices and terminals to connect satellites to end users, increasingly, mobile satellite spectrum is being utilized for providing voice and data services from satellites directly to standards-based consumer devices like smartphones and watches. L- and S-band spectrum like Iridium’s is ideal for this application compared to other satellite frequencies due to propagation characteristics, the proximity to GPS and cellular frequencies for common antennas and other Radio frequency components, and growing cellular standardization activities through 3GPP that include these frequencies in the latest 5G standards (often referred to as Non-Terrestrial Networks or NTN). Initial applications include emergency and text messaging, but expectations are that additional data and voice services will be available over time on a regional or more global basis. Iridium’s NTN Direct service is an example of a standards-based service for messaging, emergency access, and IoT transmissions.
We believe growth in the terrestrial wireless industry has increased awareness of the need and higher expectations for reliable mobile voice and data communications services. In addition, despite significant penetration and competition, terrestrial wireless systems do not cover a large majority of the earth’s surface and are focused mainly in those areas where people live, excluding oceans and other remote regions where ships, airplanes and other remote assets may be. By offering proprietary or standards-based mobile communications services with global voice and data coverage, mobile satellite service providers address the demand from businesses, governments and individuals for connectivity and reliability in locations not consistently served by wireline and wireless terrestrial networks.
The mobile satellite services sector of the global telecommunications industry also benefits from the continued development of innovative, lower-cost technology and applications integrating mobile satellite products and services, including the continued advancement of IoT. We believe that growth in demand for mobile satellite services is driven in large part by the declining cost of these services, the diminishing size and lower costs of voice, data and IoT devices, the rollout of new applications tailored to the specific needs of customers across a variety of markets, the convergence of standards between satellite and cellular industries and the increasing availability of dual mode cellular and terrestrial technology, and expansion into new international markets.
Communications industry sectors include:
•mobile satellite services, which provide customers with voice and data connectivity to mobile and fixed devices using ground facilities and networks of geostationary Earth orbit (GEO) satellites operating in licensed L-band or S-band frequencies, which are located approximately 22,300 miles above the equator, medium Earth orbit satellites, which orbit between approximately 6,400 and 10,000 miles above the earth’s surface, or low Earth orbit (LEO) satellites, such as those in our constellation, which orbit between approximately 300 and 1,000 miles above the earth’s surface;
•very small aperture terminal (VSAT) satellite services (previously referred to as fixed satellite services), which typically use GEO or LEO satellites operating in licensed Ka-band or Ku-band frequencies to provide customers with broadband communications links between fixed or moving points on or above the earth’s surface; and
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•terrestrial services, which use a network of land-based equipment, including switching centers and radio base stations, to provide wireless or wireline connectivity and are complementary to satellite services.
Within the two major satellite sectors, VSAT services and mobile satellite services, the products that operators offer differ from each other with respect to size of antenna and types of services that the products can offer.
•VSAT services providers, such as Eutelsat Communications S.A. (Eutelsat) and SES S.A., are characterized by large, often stationary ground terminals that send and receive high-bandwidth signals to and from the satellite network for video and high-speed data customers and international telephone markets. Newer entrants’ primary offerings, such as Starlink broadband from Space Exploration Technology Corp. (SpaceX) and Eutelsat’s OneWeb Holdings Limited, are based on a LEO network, but due to their K-band higher-broadband offerings, they are more similar to VSAT services requiring larger-antennas and power.
•By contrast, mobile satellite services providers, such as us, focus more on voice and data services, where mobility and small-sized terminals are essential. Other mobile satellite service providers include Globalstar, Inc., ORBCOMM Inc., portions of Viasat Inc.’s businesses (following its acquisition of Inmarsat Global Limited). New entrants are emerging as well such as Starlink’s D2D offerings, which currently utilizes terrestrial cellular frequencies that extend cellular coverage within defined, limited markets, but has plans for a global service in the future utilizing spectrum purchased from EchoStar in 2025.
LEO systems, such as the one we operate, generally have lower transmission delays, or latency, than GEO systems, due to the shorter distance signals have to travel. Additionally, our L-band solutions enable the use of smaller antennas on mobile devices. Our L-band spectrum is also more resistant to weather interference than K-band spectrum. We believe the unique interlinked mesh architecture of our constellation, combined with the global footprint of our satellites, distinguishes us from regional LEO mobile satellite services (MSS) operators such as Globalstar and ORBCOMM by allowing us to route voice and data transmissions to and from anywhere on the earth’s surface without the need for local ground infrastructure. As a result, we are the only mobile satellite services operator offering real-time, weather-resilient, low-latency services with true global coverage, including full coverage of the polar regions.
Our Competitive Strengths
•Our Constellation.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
You should read the following discussion along with our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed on February 12, 2026 (our “2025 Form 10-K”) with the SEC, as well as our condensed consolidated financial statements included in this Form 10-Q.
This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking statements include those that express plans, anticipation, intent, contingencies, strategies, goals, targets or future developments, market trends, expected competition or otherwise are not statements of historical fact. Without limiting the foregoing, the words “believe,” “anticipate,” “plan,” “expect,” “intend” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on our current expectations and projections about future events, and they are subject to risks and uncertainties, known and unknown, that could cause actual results and developments to differ materially from those expressed or implied in such statements. The important factors described under the caption “Risk Factors” in our 2025 Form 10-K, as updated and supplemented by this Form 10-Q, could cause actual results to differ materially from those indicated by forward-looking statements made herein. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Overview of Our Business
We are a leading provider of global voice, data and positioning, navigation and timing (“PNT”) satellite services and are the only commercial provider of communications services offering true global coverage, connecting people, organizations, and assets to and from anywhere, in real time. Our low-Earth orbit (“LEO”), L-band network provides specialized, reliable, weather-resilient communications services to regions of the world where terrestrial wireless or wireline networks do not exist or are limited, including remote land areas, open ocean, airways, the polar regions and regions where the telecommunications infrastructure has been affected by political conflicts or natural disasters. In addition, our satellites have other payloads that facilitate specific additional services for customers, such as our subsidiary Aireon LLC’s (“Aireon’s”) space-based air traffic surveillance system. We also utilize our long history operating a commercial LEO satellite system to provide a growing array of engineering and operational services to government customers and government network operators such as the U.S. Space Force.
Our primary business is to provide voice and data communications services to businesses, U.S. and foreign governments, non-governmental organizations and consumers via our satellite network, which has an architecture of 66 operational satellites with in-orbit spares and related ground infrastructure. We utilize an interlinked mesh architecture to route traffic across the satellite constellation using radio frequency crosslinks between satellites. This architecture minimizes the need for ground facilities to support the constellation, which facilitates the global reach of our services and allows us to offer services in countries and regions where we have no physical presence.
We primarily sell our products and services to commercial end users by recruiting and expanding a global wholesale distribution network, currently encompassing approximately 130 service providers, approximately 300 value-added resellers (“VARs”), and approximately 100 value-added manufacturers, which create and sell technology that uses the Iridium network either directly to the end user or indirectly through other service providers, VARs or dealers. These distributors often integrate our products and services with other complementary hardware and software and have developed a broad suite of applications using our products and services to target specific industries or business areas. We expect that demand for our services will increase as more applications are developed and deployed that utilize our technology.
As of September 30, 2026, we had approximately 2,696,000 billable subscribers worldwide, an increase of 154,000, or 6%, from approximately 2,542,000 billable subscribers as of September 30, 2025. We have a diverse customer base, including end users in land mobile, Internet of Things (“IoT”), maritime, aviation and government.
Aireon Acquisition
On May 13, 2026, we entered into a Securities Purchase Agreement with NAV CANADA, the Irish Air Navigation Service, ENAV S.P.A., Naviair Surveillance A/S, NATS (Services) Limited, and certain of their affiliated entities (the “Sellers”), pursuant to which, on July 2, 2026 (the “Aireon Closing Date”), we, through our wholly owned subsidiary, Iridium Monitor Holdings LLC (“Iridium Monitor Holdings”), closed our acquisition of Aireon Holdings LLC (“Aireon Holdings”), acquiring the remaining 60.5% of equity interests in Aireon Holdings that we did not already own (the “Aireon Closing”).
We now indirectly own all of the membership interests in Aireon Holdings and Aireon, which is the operator of the world’s only space-based ADS-B air traffic surveillance system. We acquired the additional equity interest for an aggregate contractual purchase price of approximately $366.7 million, 50% in cash and 50% deferred and in the form of a loan by the Sellers, payable one year following the Aireon Closing pursuant to a Credit and Guaranty Agreement. We view this acquisition as a defining step toward achieving our long-term business objective to provide the foundational architecture for global aviation safety, bringing space-based surveillance, safety communications, PNT, and operational data together on a single network.
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Anticipated Merger with Rocket Lab Corporation
On June 28, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Rocket Lab Corporation (“Rocket Lab”), pursuant to which we agreed to be acquired by Rocket Lab (the “Transaction”).
Subject to the terms and conditions set forth in the Merger Agreement, each issued and outstanding share of our common stock, other than as specified in the Merger Agreement, will be converted into the right to receive (i) $27.00 in cash and (ii) a number of shares of Rocket Lab’s common stock equal to the Exchange Ratio (as defined below). The “Exchange Ratio” will be the following: (i) if the Rocket Lab Common Stock Price (as defined below) is equal to or less than $67.50, then the Exchange Ratio will be 0.4000; (ii) if the Rocket Lab Common Stock Price is greater than $67.50 but less than $112.50, then the Exchange Ratio will be the quotient obtained by dividing $27.00 by the Rocket Lab Common Stock Price, rounded to four decimal places; and (iii) if the Rocket Lab Common Stock Price is equal to or greater than $112.50, then the Exchange Ratio will be 0.2400. “Rocket Lab Common Stock Price” is defined as the volume weighted average price per share of Rocket Lab’s common stock on the Nasdaq Global Select Market for the period of the ten consecutive trading days ending on and including the second full trading day prior to the First Effective Time (as defined in the Merger Agreement).
The Merger Agreement provides each of us and Rocket Lab with certain termination rights and, under certain circumstances, may require us to pay a $223.6 million termination fee.
Our Board of Directors unanimously approved the Merger Agreement and resolved to recommend that our stockholders approve the adoption of the Merger Agreement and the Transaction. In addition, each of our directors holding shares of our common stock has entered into a voting agreement to support the Transaction.
The Transaction is expected to be completed by mid-2027, subject to the satisfaction of remaining customary closing conditions, including (i) consent of the U.S. Federal Communications Commission to the transfer of control of certain of our telecommunication authorizations; (ii) receipt of clearances or approvals under other specified foreign investment and satellite and telecommunications laws; (iii) the absence of any order or law issued, enforced or enacted by a governmental authority in certain specified jurisdictions that prevents, makes illegal or enjoins the consummation of the Transaction; (iv) there having not occurred a Company Material Adverse Effect or a Parent Material Adverse Effect, each as defined in the Merger Agreement; and (v) the continued effectiveness of a registration statement on Form S-4 with respect to shares of Rocket Lab Common Stock to be issued in the Transaction and approval of such shares for listing on the Nasdaq Global Select Market.
The waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”), related to the Transaction expired on August 12, 2026 and, on September 24, 2026, our stockholders approved the Transaction at a special meeting of stockholders (the “Special Meeting”). The expiration of the HSR waiting period and stockholder approval were each closing conditions to the Transaction.
On September 15, 2026, we entered into the fourth amendment to the credit agreement (the “Fourth Amendment”), which, among other things, provides that the Transaction shall not constitute a change of control under the credit agreement. The term loan in an original aggregate principal amount equal to $1,500.0 million (the “September 2023 Term Loan”), an additional aggregate $325.0 million in term loans, comprised of $125.0 million on March 25, 2024 (the “March 2024 Term Loan”), and $200.0 million on July 30, 2024 (the “July 2024 Term Loan” together with the September 2023 Term Loan and March 2024 Term Loan, the “Term Loan”) and the $100.0 million revolving credit facility (the “Revolving Facility”) are permitted to remain outstanding after the closing of the Transaction. Rocket Lab has stated that through a combination of equity raised through an at-the-market offering, available liquidity and assumption of the Term Loan, that it has sufficient cash to fully fund the Transaction.
The Merger Agreement also subjects us to interim operating covenants that generally require us to conduct our business in the ordinary course consistent with past practice and preserve our business organization, key personnel, customer and business relationships, and material assets, and restrict us from or limit us in taking certain actions, including amending our organizational documents; issuing or repurchasing equity securities; declaring dividends or distributions; pursuing acquisitions, dispositions or significant investments; incurring material indebtedness or capital expenditures; entering into, terminating or materially modifying certain significant contracts; taking certain actions with respect to employee compensation and benefit arrangements, accounting, and tax matters; settling material litigation; and taking certain actions affecting our satellite operations, telecommunications permits, or other material assets.
For more information regarding the Transaction and related arrangements, see the definitive merger proxy statement related to the Special Meeting that we filed on August 26, 2026 and the Current Reports on Form 8-K that we filed on June 29, 2026, September 15, 2026, September 18, 2026, and September 24, 2026.
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Material Trends and Uncertainties
Our industry and customer base have historically grown as a result of:
•demand for remote and reliable mobile communications services;
•a growing number of new products and services and related applications;
•a broad wholesale distribution network with access to diverse and geographically dispersed niche markets;
•increased demand for communications services by disaster and relief agencies, emergency first responders, businesses and consumers;
•improved data transmission speeds for mobile satellite service offerings;
•regulatory mandates requiring the use of mobile satellite services;
•a general reduction in prices of mobile satellite services and subscriber equipment; and
•geographic market expansion through the ability to offer our services in additional countries.
Nonetheless, we face a number of challenges and uncertainties in operating our business, including:
•our ability to maintain the health, capacity, control, and level of service of our satellites;
•our ability to develop and launch new and innovative products and services;
•changes in general economic, business, and industry conditions, including the effects of currency exchange rates;
•our reliance on a single primary commercial gateway and a primary satellite network operations center;
•increased competition or potential competition from other satellite service providers, including SpaceX following its announced plans to acquire a significant amount of spectrum enabling global direct-to-device (“D2D”) services, and, to a lesser extent, from the expansion of terrestrial-based cellular phone systems and related pricing pressures;
•market acceptance of our products;
•regulatory requirements in existing and new geographic markets;
•challenges associated with global operations, including as a result of conflicts in or affecting markets in which we operate;
•rapid and significant technological changes in the telecommunications industry, including global satellite D2D broadband services;
•our ability to generate sufficient internal cash flows to repay our debt;
•reliance on our wholesale distribution network to market and sell our products, services, and applications effectively;
•reliance on a global supply chain, including single-source suppliers for the manufacture of most of our subscriber equipment and for some of the components required in the manufacture of our end-user subscriber equipment and our ability to purchase component parts that are periodically subject to shortages resulting from surges in demand, natural disasters or other events, such as a global pandemic and the imposition of tariffs;
•reliance on a few significant customers, particularly agencies of the U.S. government, for a substantial portion of our revenue, as a result of which the loss or decline in business with any of these customers may negatively impact our revenue and collectability of related accounts receivable, including as a result of an extended government shutdown or the use of continuing resolutions;
•our ability to realize the expected benefits of our acquisition of Aireon Holdings and effectively integrate Aireon and its personnel with our existing operations;
•our ability to complete the Transaction on the anticipated timeline or at all;
•the occurrence of any event, change or other circumstance that could give rise to the right of one or both of Rocket Lab or us to terminate the Merger Agreement;
•disruption to our business as a result of the announcement and pendency of the Transaction, including due to diversion of management’s attention and time and restrictions in the Merger Agreement that could affect our ability to pursue business opportunities or execute business strategies; and
•the possibility that the Transaction may be more expensive to complete than anticipated; and the reputational risk and adverse reactions of customers, suppliers, employees, or other business partners resulting from the announcement of the Transaction.
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Comparison of Our Results of Operations for the Three Months Ended September 30, 2026 and 2025
| Three Months Ended September 30, | Change | |||||||||||||||||||||||||||||||||||
| 2026 | % of Total Revenue | 2025 | % of Total Revenue | |||||||||||||||||||||||||||||||||
| ($ in thousands) | Dollars | Percent | ||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||
| Services | $ | 187,498 | 76 | % | $ | 165,243 | 73 | % | $ | 22,255 | 13 | % | ||||||||||||||||||||||||
| Subscriber equipment | 19,045 | 8 | % | 21,507 | 9 | % | (2,462) | (11) | % | |||||||||||||||||||||||||||
| Engineering and support services | 39,190 | 16 | % | 40,185 | 18 | % | (995) | (2) | % | |||||||||||||||||||||||||||
| Total revenue | 245,733 | 100 | % | 226,935 | 100 | % | 18,798 | 8 | % | |||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||
| Cost of services (exclusive of depreciation | ||||||||||||||||||||||||||||||||||||
| and amortization) | 60,666 | 25 | % | 50,762 | 22 | % | 9,904 | 20 | % | |||||||||||||||||||||||||||
| Cost of subscriber equipment | 11,609 | 5 | % | 12,661 | 6 | % | (1,052) | (8) | % | |||||||||||||||||||||||||||
| Research and development | 4,810 | 2 | % | 4,944 | 2 | % | (134) | (3) | % | |||||||||||||||||||||||||||
| Selling, general and administrative | 74,936 | 30 | % | 35,508 | 16 | % | 39,428 | 111 | % | |||||||||||||||||||||||||||
| Depreciation and amortization | 62,094 | 25 | % | 52,975 | 23 | % | 9,119 | 17 | % | |||||||||||||||||||||||||||
| Total operating expenses | 214,115 | 87 | % | 156,850 | 69 | % | 57,265 | 37 | % | |||||||||||||||||||||||||||
Operating income | 31,618 | 13 | % | 70,085 | 31 | % | (38,467) | (55) | % | |||||||||||||||||||||||||||
Other expense: | ||||||||||||||||||||||||||||||||||||
| Interest expense, net | (26,788) | (11) | % | (22,593) | (10) | % | (4,195) | 19 | % | |||||||||||||||||||||||||||
Other income, net | 384 | — | % | 372 | — | % | 12 | 3 | % | |||||||||||||||||||||||||||
| Total other expense, net | (26,404) | (11) | % | (22,221) | (10) | % | (4,183) | 19 | % | |||||||||||||||||||||||||||
| Income before income taxes and gain (loss) on equity method investments, net | 5,214 | 2 | % | 47,864 | 21 | % | (42,650) | (89) | % | |||||||||||||||||||||||||||
Income tax expense | (2,186) | (1) | % | (10,003) | (4) | % | 7,817 | (78) | % | |||||||||||||||||||||||||||
| Gain (loss) on equity method investments, net | 103,868 | 42 | % | (734) | — | % | 104,602 | (14,251) | % | |||||||||||||||||||||||||||
Net income | $ | 106,896 | 44 | % | $ | 37,127 | 17 | % | $ | 69,769 | 188 | % | ||||||||||||||||||||||||
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Revenue
Commercial Service Revenue
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | Billable Subscribers (1) | ARPU (2) | Revenue | Billable Subscribers (1) | ARPU (2) | Revenue | Billable Subscribers | ARPU | |||||||||||||||||||||||||||||||||||||||||||||||
| (Revenue in millions and subscribers in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial services: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Voice and data | $ | 58.0 | 396 | $ | 48 | $ | 59.9 | 411 | $ | 48 | $ | (1.9) | (15) | $ | — | ||||||||||||||||||||||||||||||||||||||||
| IoT data | 48.7 | 2,163 | 7.63 | 46.7 | 1,991 | 7.95 | 2.0 | 172 | (0.32) | ||||||||||||||||||||||||||||||||||||||||||||||
Broadband (3) | 11.8 | 16.0 | 246 | 13.0 | 16.3 | 265 | (1.2) | (0.3) | (19) | ||||||||||||||||||||||||||||||||||||||||||||||
| Hosted payload and other data | 41.4 | N/A | 18.7 | N/A | 22.7 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial services | $ | 159.9 | 2,575 | $ | 138.3 | 2,418 | $ | 21.6 | 157 | ||||||||||||||||||||||||||||||||||||||||||||||
(1)Billable subscriber numbers shown are at the end of the respective period.
(2)Average monthly revenue per unit (“ARPU”) is calculated by dividing revenue in the respective period by the average of the number of billable subscribers at the beginning of the period and the number of billable subscribers at the end of the period and then dividing the result by the number of months in the period. Billable subscriber and ARPU data is not applicable for hosted payload and other data service revenue items.
(3)Commercial broadband service consists of Iridium OpenPort and Iridium Certus broadband services.
For the three months ended September 30, 2026, total commercial services revenue increased $21.6 million, or 16%, from the prior year period primarily as a result of increases in hosted payload and other data services and IoT data. Hosted payload and other data service revenue increased $22.7 million, or 121%, compared to the prior year period, primarily due to the inclusion of Aireon revenue totaling $26.3 million, partially offset by decreases in PNT revenue including non-recurring revenue recognition in the prior year period. Commercial IoT revenue increased $2.0 million, or 4%, for the three months ended September 30, 2026, compared to the same period of the prior year, driven by a 9% increase in billable subscribers, offset in part by a decline in ARPU. The increases in commercial services were partially offset by decreases in voice and data and broadband. Commercial voice and data revenue decreased $1.9 million, or 3%, for the three months ended September 30, 2026, compared to the same period of the prior year, primarily due to decreased billable subscribers. Commercial broadband revenue decreased $1.2 million, or 9%, for the three months ended September 30, 2026, compared to the prior year period, due primarily to the decline in ARPU to $246 in the third quarter of 2026, as compared to $265 in the prior year period, reflecting the increased prevalence of use of lower-priced companion plans in the current year period.
Government Service Revenue
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||||||||||||||||||||||
| Revenue | Billable Subscribers (1) | Revenue | Billable Subscribers (1) | Revenue | Billable Subscribers | ||||||||||||||||||||||||||||||||
| (Revenue in millions and subscribers in thousands) | |||||||||||||||||||||||||||||||||||||
| Government services | $ | 27.6 | 121 | $ | 26.9 | 124 | $ | 0.7 | (3) | ||||||||||||||||||||||||||||
(1)Billable subscriber numbers shown are at the end of the respective period.
We provide airtime and airtime support to U.S. government and other authorized customers pursuant to our Enhanced Mobile Satellite Services (“EMSS”) contract. Under the terms of this EMSS contract, which we entered into in September 2019, authorized customers utilize specified Iridium airtime services provided through the U.S. government’s dedicated gateway. The service fee under the EMSS contract is fixed at $110.5 million per year for the remainder of the term and is not based on subscribers or usage, allowing an unlimited number of users access to these services. Revenue for the three months ended September 30, 2026 increased slightly reflecting the contractual step ups in the EMSS contract. On September 11, 2026, the U.S. Space Force exercised its option to extend the EMSS Contract with us through March 2027, at the same contractual rate. We continue to expect a renewal of the EMSS Contract in 2027. For more on risks associated with the EMSS contract expiration, see the risk factor captioned “—Our agreements with U.S. government customers, particularly the Department of War (the “DoW”), which represent a significant portion of our revenue, are subject to termination and renewal” in our 2025 Form 10-K.
26
Subscriber Equipment Revenue
Subscriber equipment revenue decreased by $2.5 million, or 11%, for the three months ended September 30, 2026, compared to the prior year period, primarily as a result of a decrease in volume of handset and L-band transceiver device sales offset in part by an increase in volume of Short Burst Data® device sales. We continue to expect equipment revenue in 2026 to be in line with 2025.
Engineering and Support Service Revenue
| Three Months Ended September 30, | |||||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||||
| (In millions) | |||||||||||||||||||
| Commercial engineering and support services | $ | 0.3 | $ | 1.9 | $ | (1.6) | |||||||||||||
| Government engineering and support services | 38.9 | 38.3 | 0.6 | ||||||||||||||||
| Total engineering and support services | $ | 39.2 | $ | 40.2 | $ | (1.0) | |||||||||||||
Engineering and support service revenue decreased by $1.0 million, or 2%, for the three months ended September 30, 2026, compared to the prior year period, primarily due to the Aireon acquisition. We expect engineering and support service revenue to be higher in 2026 than in 2025.
Operating Expenses
Cost of Services (exclusive of depreciation and amortization)
Cost of services (exclusive of depreciation and amortization) includes the cost of network engineering and operations staff, including contractors, software maintenance, product support services and cost of services for government and commercial engineering and support service revenue.
Cost of services (exclusive of depreciation and amortization) increased by $9.9 million, or 20%, for the three months ended September 30, 2026 from the prior year period, primarily as a result of $10.1 million in costs due to the Aireon acquisition.
Cost of Subscriber Equipment
Cost of subscriber equipment includes the direct costs of equipment sold, which consist of manufacturing costs, allocation of overhead, and warranty costs.
Cost of subscriber equipment decreased by $1.1 million, or 8%, for the three months ended September 30, 2026, compared to the prior year period, primarily due to the net decrease in volume of device sales, as noted above.
Research and Development
Research and development expenses remained relatively flat compared to the prior year period.
Selling, General and Administrative
Selling, general and administrative expenses that are not directly attributable to the sale of services or products include sales and marketing costs, as well as employee-related expenses (such as salaries, wages, and benefits), legal, finance, information technology, facilities, billing and customer care expenses.
Selling, general and administrative expenses increased by $39.4 million, or 111%, for the three months ended September 30, 2026, compared to the prior year period, primarily due to increases in transaction costs totaling $21.3 million associated with the Transaction and the Aireon acquisition. The increase was also due to $10.6 million higher employee costs, including stock-based compensation expenses, $4.8 million in costs due to the Aireon acquisition, $2.1 million in professional fees, and $1.2 million of stock appreciation rights expense.
We expect our selling, general and administrative expenses to moderate from the current quarter as we expect transaction costs to decrease during the pendency of the Transaction and in connection with the closing.
Depreciation and Amortization
Depreciation and amortization expense increased by $9.1 million, or 17%, for the quarter ended September 30, 2026, compared to the prior year period, primarily related to a $4.5 million increase in depreciation due to the Aireon acquisition and a $3.8 million increase in amortization of intangible assets recognized related to the Aireon acquisition.
27
Other Income (Expense), net
Interest Expense, Net
Interest expense, net increased $4.2 million, or 19%, for the three months ended September 30, 2026, compared to the same period of the prior year. The increase was primarily due to $6.5 million in interest expense associated with the Aireon Loans, partially offset by lower interest rates compared to the prior year period.
Other Income, net
Other income, net, was $0.4 million for the three months ended September 30, 2026, and September 30, 2025, respectively, primarily driven by foreign currency exchange rates.
Income Tax Expense
For the three months ended September 30, 2026, our income tax expense was $2.2 million, compared to $10.0 million for the prior year period. The decrease in income tax expense is primarily related to decreased pre-tax book income in 2026 compared to 2025 and decreased tax expense associated with stock compensation and nondeductible executive compensation, partially offset by decreased tax benefit from the deduction for foreign derived deduction eligible income and tax expense from acquisition costs.
The Organisation for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenue and profits above certain thresholds (referred to as Pillar 2). Although the U.S. has not enacted legislation to implement Pillar 2, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar 2. Pillar 2 is applicable to us beginning in 2026. However, based on the guidance issued to date, we do not expect it to have a material impact on our effective tax rate or our results of operation and financial position.
Gain (Loss) on Equity Method Investments, Net of Tax
For the three months ended September 30, 2026, our after tax gain on equity method investments was $103.9 million compared to a loss of $0.7 million in the prior year period. Prior to our acquisition of Aireon in July 2026, we held a 39.5% equity interest in Aireon Holdings, which was classified as an equity method investment. Upon the closing of the acquisition of Aireon, we recorded a gain of $135.3 million, equal to the difference between the fair value and net book value of the equity method investment. The impact of this gain on net income was partially offset by $31.4 million in taxes related to the remeasurement.
Net Income
Net income was $106.9 million for the three months ended September 30, 2026, compared to net income of $37.1 million for the prior year period. The $69.8 million increase in net income was primarily the result of the gain related to the acquisition of Aireon as described above.
28
Comparison of Our Results of Operations for the Nine Months Ended September 30, 2026 and 2025
| Nine Months Ended September 30, | Change | |||||||||||||||||||||||||||||||||||
| 2026 | % of Total Revenue | 2025 | % of Total Revenue | |||||||||||||||||||||||||||||||||
| ($ in thousands) | Dollars | Percent | ||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||
| Services | $ | 506,855 | 73 | % | $ | 475,105 | 72 | % | $ | 31,750 | 7 | % | ||||||||||||||||||||||||
| Subscriber equipment | 60,031 | 9 | % | 64,083 | 10 | % | (4,052) | (6) | % | |||||||||||||||||||||||||||
| Engineering and support services | 123,141 | 18 | % | 119,531 | 18 | % | 3,610 | 3 | % | |||||||||||||||||||||||||||
| Total revenue | 690,027 | 100 | % | 658,719 | 100 | % | 31,308 | 5 | % | |||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||
| Cost of services (exclusive of depreciation | ||||||||||||||||||||||||||||||||||||
| and amortization) | 161,616 | 23 | % | 153,152 | 23 | % | 8,464 | 6 | % | |||||||||||||||||||||||||||
| Cost of subscriber equipment | 38,101 | 6 | % | 36,830 | 6 | % | 1,271 | 3 | % | |||||||||||||||||||||||||||
| Research and development | 16,514 | 2 | % | 14,640 | 2 | % | ||||||||||||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-09-15 | Last Timothy James | EVP, Sales & Marketing | Sell | -5,769 | $46.35 | -$267,393 |
| 2026-09-03 | Last Timothy James | EVP, Sales & Marketing | Sell | -2,013 | $47.36 | -$95,336 |
| 2026-08-17 | Olson Eric T | Director | Sell | -8,000 | $50.61 | -$404,880 |
| 2026-08-17 | Morgan Kathleen A. | Chief Legal Officer | Sell | -33,192 ×2 | $50.35 | -$1,671,163 |
| 2026-08-17 | McBride Suzanne E. | Chief Operations Officer | Sell | -85,454 | $50.28 | -$4,296,627 |
| 2026-08-17 | Kapalka Timothy | CAO Iridium Satellite LLC | Sell | -13,473 | $50.51 | -$680,521 |
| 2026-08-17 | Last Timothy James | EVP, Sales & Marketing | Sell | -19,521 ×2 | $50.34 | -$982,767 |
| 2026-08-18 | FITZPATRICK THOMAS | Director | Sell | -15,046 | $49.20 | -$740,263 |
| 2026-08-17 | FITZPATRICK THOMAS | Director | Sell | -209,233 | $50.22 | -$10,507,681 |
Source: SEC Form 4 filings.
Next expected filings
- ~2027-02-11 10-K expected by 2027-02-25 (in 88 days)
- ~2027-04-22 10-Q expected by 2027-05-10 (in 158 days)
- ~2027-07-21 10-Q expected by 2027-08-08 (in 248 days)
- ~2027-10-19 10-Q expected by 2027-11-06 (in 338 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-10-20 8-K Earnings Release; Financial Statements and Exhibits
- 2026-10-20 10-Q Quarterly Report
- 2026-09-24 8-K Shareholder Vote Results; Other Events; Financial Statements and Exhibits
- 2026-09-18 8-K Other Events
- 2026-09-15 8-K Material Agreement Entered; Financial Statements and Exhibits
- 2026-07-22 8-K Earnings Release; Financial Statements and Exhibits
- 2026-07-22 10-Q Quarterly Report
- 2026-07-07 8-K Material Agreement Entered; Material Financial Obligation; Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-06-29 8-K Material Agreement Entered; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-05-20 8-K Officer/Director Change; Shareholder Vote Results; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-05-14 8-K Material Agreement Entered; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-04-23 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-23 10-Q Quarterly Report
- 2026-02-27 8-K Officer/Director Change
- 2026-02-12 10-K Annual Report