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 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 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 120 service providers, approximately 310 value-added resellers (“VARs”), and approximately 90 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 March 31, 2026, we had approximately 2,555,000 billable subscribers worldwide, an increase of 112,000, or 5%, from approximately 2,443,000 billable subscribers as of March 31, 2025. We have a diverse customer base including end users in land-mobile, Internet of Things (“IoT”), maritime, aviation, and government.
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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; and
•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.
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Comparison of Our Results of Operations for the Three Months Ended March 31, 2026 and 2025
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||
| 2026 | % of Total Revenue | 2025 | % of Total Revenue | |||||||||||||||||||||||||||||||||
| ($ in thousands) | Dollars | Percent | ||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||
| Services | $ | 158,029 | 72 | % | $ | 154,292 | 72 | % | $ | 3,737 | 2 | % | ||||||||||||||||||||||||
| Subscriber equipment | 20,219 | 9 | % | 23,121 | 11 | % | (2,902) | (13) | % | |||||||||||||||||||||||||||
| Engineering and support services | 40,809 | 19 | % | 37,465 | 17 | % | 3,344 | 9 | % | |||||||||||||||||||||||||||
| Total revenue | 219,057 | 100 | % | 214,878 | 100 | % | 4,179 | 2 | % | |||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||
| Cost of services (exclusive of depreciation | ||||||||||||||||||||||||||||||||||||
| and amortization) | 49,636 | 23 | % | 48,787 | 23 | % | 849 | 2 | % | |||||||||||||||||||||||||||
| Cost of subscriber equipment | 13,014 | 6 | % | 12,867 | 6 | % | 147 | 1 | % | |||||||||||||||||||||||||||
| Research and development | 6,174 | 3 | % | 5,417 | 3 | % | 757 | 14 | % | |||||||||||||||||||||||||||
| Selling, general and administrative | 45,779 | 21 | % | 35,752 | 16 | % | 10,027 | 28 | % | |||||||||||||||||||||||||||
| Depreciation and amortization | 53,741 | 24 | % | 51,667 | 24 | % | 2,074 | 4 | % | |||||||||||||||||||||||||||
| Total operating expenses | 168,344 | 77 | % | 154,490 | 72 | % | 13,854 | 9 | % | |||||||||||||||||||||||||||
Operating income | 50,713 | 23 | % | 60,388 | 28 | % | (9,675) | (16) | % | |||||||||||||||||||||||||||
Other expense: | ||||||||||||||||||||||||||||||||||||
| Interest expense, net | (19,366) | (9) | % | (21,824) | (10) | % | 2,458 | (11) | % | |||||||||||||||||||||||||||
Other expense, net | (194) | — | % | (1,685) | (1) | % | 1,491 | (88) | % | |||||||||||||||||||||||||||
Total other expense | (19,560) | (9) | % | (23,509) | (11) | % | 3,949 | (17) | % | |||||||||||||||||||||||||||
Income before income taxes and loss on equity method investments | 31,153 | 14 | % | 36,879 | 17 | % | (5,726) | (16) | % | |||||||||||||||||||||||||||
Income tax expense | (8,827) | (4) | % | (5,819) | (3) | % | (3,008) | 52 | % | |||||||||||||||||||||||||||
Loss on equity method investments | (732) | — | % | (648) | — | % | (84) | 13 | % | |||||||||||||||||||||||||||
Net income | $ | 21,594 | 10 | % | $ | 30,412 | 14 | % | $ | (8,818) | (29) | % | ||||||||||||||||||||||||
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Revenue
Commercial Service Revenue
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 | $ | 57.4 | 399 | $ | 48 | $ | 55.9 | 409 | $ | 45 | $ | 1.5 | (10) | $ | 3 | ||||||||||||||||||||||||||||||||||||||||
| IoT data | 46.0 | 2,019 | 7.63 | 43.8 | 1,885 | 7.75 | 2.2 | 134 | (0.12) | ||||||||||||||||||||||||||||||||||||||||||||||
Broadband (3) | 12.2 | 16.1 | 254 | 12.9 | 16.3 | 261 | (0.7) | (0.2) | (7) | ||||||||||||||||||||||||||||||||||||||||||||||
| Hosted payload and other data | 14.8 | N/A | 14.9 | N/A | (0.1) | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial services | $ | 130.4 | 2,434 | $ | 127.5 | 2,310 | $ | 2.9 | 124 | ||||||||||||||||||||||||||||||||||||||||||||||
(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 March 31, 2026, total commercial services revenue increased $2.9 million, or 2%, from the prior year period, primarily as a result of increases in IoT data and voice and data services, partially offset by decreases in commercial broadband revenue and hosted payload and other data services. Commercial IoT revenue increased $2.2 million, or 5%, for the three months ended March 31, 2026, compared to the same period of the prior year, primarily driven by a 7% increase in billable subscribers, offset in part by a decline in ARPU. Commercial voice and data revenue increased $1.5 million, or 3%, for the three months ended March 31, 2026, compared to the same period of the prior year, primarily due to increased ARPU from price increases implemented during the second half of the prior year. Commercial broadband revenue decreased $0.7 million, or 5%, for the three months ended March 31, 2026, compared to the prior year period, due primarily to the decline in ARPU to $254 in the first quarter of 2026, as compared to $261 in the prior year period, reflecting the increased prevalence of use of lower-priced companion plans in the current year period. Hosted payload and other data service revenue remained relatively flat compared to the prior year period.
Government Service Revenue
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||
| 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 | $ | 26.8 | 133 | $ | 0.8 | (12) | ||||||||||||||||||||||||||||
(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 agreement, 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 March 31, 2026 increased slightly reflecting the contractual step ups in the EMSS contract. The EMSS contract expires in September 2026, although based on federal acquisition regulations, the government has the ability to unilaterally extend for an additional six months. We have begun discussions with the U.S. government on a new EMSS contract, which we expect to enter into later in 2026 or in 2027, prior to expiration of the existing EMSS contract. For more on risks associated with the EMSS contract expiration, see the risk factor captioned “-Our agreements with U.S. government customer, particularly the DoW, which represent a significant portion of our revenue, are subject to termination and renewal” in our 2025 Form 10-K.
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Subscriber Equipment Revenue
Subscriber equipment revenue decreased $2.9 million, or 13%, to $20.2 million for the three months ended March 31, 2026, compared to the prior year period, primarily as a result of a decrease in volume of handset and L-band transceiver device sales. Notwithstanding this decrease for the three months ended March 31, 2026, we expect equipment revenue in 2026 to be in line with 2025.
Engineering and Support Service Revenue
| Three Months Ended March 31, | |||||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||||
| (In millions) | |||||||||||||||||||
| Commercial engineering and support services | $ | 1.3 | $ | 1.6 | $ | (0.3) | |||||||||||||
| Government engineering and support services | 39.5 | 35.8 | 3.7 | ||||||||||||||||
| Total engineering and support services | $ | 40.8 | $ | 37.4 | $ | 3.4 | |||||||||||||
Engineering and support service revenue increased by $3.4 million, or 9%, for the three months ended March 31, 2026, compared to the prior year period, primarily due to increased work under certain government contracts, predominantly the contract with the Space Development Agency (“SDA”). 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 $0.8 million, or 2%, for the three months ended March 31, 2026 from the prior year period, primarily as a result of the increase in work under certain government projects, including the SDA contract, as noted above.
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 increased by $0.1 million, or 1%, for the three months ended March 31, 2026, compared to the prior year period. The percentage decrease in equipment revenue did not match the change in cost of subscriber equipment primarily related to increased costs including tariffs.
Research and Development
Research and development expenses increased by $0.8 million, or 14%, for the three months ended March 31, 2026, compared to the prior year period based on increased spending on new products and device-related features and technology for our network.
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 $10.0 million, or 28%, for the three months ended March 31, 2026, compared to the prior year period, primarily due to increases associated with the timing of headcount costs and related benefits allocated to programs, and increases in professional fees, including stock appreciation rights expense in the current year resulting from changes in our stock valuation between the years. We expect selling, general and administrative expense to moderate from the first quarter 2026 growth rate to a low double-digit rate for the full year 2026.
Depreciation and Amortization
Depreciation and amortization expense increased by $2.1 million, or 4%, for the quarter ended March 31, 2026, compared to the prior year period, primarily related to satellites placed into service during the prior year and intangible asset amortization.
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Other Income (Expense), net
Interest Expense, Net
Interest expense, net decreased $2.5 million, or 11%, for the three months ended March 31, 2026, compared to the prior year period. The decrease resulted primarily from a decrease in the average borrowing rate.
Other Expense, net
Other expense, net, was $0.2 million for the three months ended March 31, 2026, compared to $1.7 million for the prior year period, primarily as the result of changes in foreign currency exchange rates.
Income Tax Expense
For the three months ended March 31, 2026, our income tax expense was $8.8 million, compared to income tax expense of $5.8 million for the prior year period. The increase in income tax expense is primarily related to increased tax expense associated with stock compensation and nondeductible executive compensation, and decreased tax benefit from the deduction for foreign derived deduction eligible income and U.S. tax credits.
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 the Company 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.
Loss on Equity Method Investments
For the three months ended March 31, 2026, our loss on equity method investments was $0.7 million compared to a loss of $0.6 million in the prior year period. These amounts reflect the portion of losses recorded on our equity method investments.
Net Income
Net income was $21.6 million for the three months ended March 31, 2026, compared to $30.4 million for the prior year period. The $8.8 million decrease in net income was primarily the result of the increase in selling, general and administrative expenses and increased income tax expense, partially offset by the increase in engineering and support services revenue and commercial services revenue, as described above.
Liquidity and Capital Resources
Our primary sources of liquidity are cash provided by operations, cash and cash equivalents and our Revolving Facility. As of March 31, 2026, we had approximately $1.8 billion of indebtedness, consisting of amounts outstanding under the Term Loan, the terms of which are described below. We have $100.0 million of additional borrowing available to us under our Revolving Facility as of March 31, 2026. These sources are expected to meet our short-term and long-term liquidity needs, including annual payments for (i) required principal and interest on the Term Loan, which we expect to be $3.4 million, and, based on the current interest rate, approximately $85.0 million, respectively in 2026, (ii) capital expenditures (consistent with 2025), (iii) working capital, (iv) potential share repurchases, and (v) anticipated cash dividend payments to holders of our common stock.
As of March 31, 2026, our total cash and cash equivalents balance was $111.6 million, up from $96.5 million as of December 31, 2025. While we generated cash flows from operations and used less for share repurchases in 2026 than in 2025, these factors were offset in part by increased capital expenditures.
Term Loan and Revolving Facility
Pursuant to a credit agreement (as amended and restated to date, the “Credit Agreement”), we previously entered into a term loan totaling $1,500.0 million (the “Term Loan”), issued at a price equal to 99.75%, and an accompanying $100.0 million revolving loan (the “Revolving Facility”). The maturity of the Term Loan and Revolving Facility are in September 2030 and September 2028, respectively. During 2024, we borrowed an additional $325.0 million under the Term Loan, comprised of $125.0 million in March 2024, issued at a price equal to 99.875% of its face value, and $200.0 million in July 2024, issued at 99.0% of its face value. The additional amounts borrowed are fungible with the original $1,500.0 million, and have the same maturity date, interest rate, and other terms.
As of March 31, 2026, we reported an aggregate balance of $1,774.7 million in borrowings under the Term Loan, before $13.5 million of net unamortized deferred financing costs for a net principal balance of $1,761.2 million outstanding in our condensed consolidated balance sheet. In the first quarter of 2025, we drew $20.0 million under our Revolving Facility for
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general corporate purposes, all of which was repaid in December 2025, and there were no amounts outstanding as of March 31, 2026 or December 31, 2025.
The Term Loan has been repriced on several occasions, most recently in June 2024, and currently bears interest at an annual rate equal to the SOFR, plus 2.25%, with a 0.75% SOFR floor. We typically select a one-month interest period, with the result that interest is calculated using one-month SOFR. Interest is paid monthly on the last business day of the month. Principal payments, payable quarterly, equal $18.3 million per annum (one percent of the full principal amount of the Term Loan following the additional amount Term Loan amounts borrowed in 2024), with the remaining principal due upon maturity. As noted below, no quarterly principal payment has been made after the first quarter in 2025 as a result of the excess cash flow payment made in May 2025.
The Revolving Facility bears interest at an annual rate equal to SOFR plus 2.5% (but without a SOFR floor) if and as drawn, with no original issue discount, a commitment fee of 0.5% per year on the undrawn amount, which was reduced to 0.375% in the first quarter of 2026 because we had a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of less than 3.5 to 1.
The Term Loan contains no financial maintenance covenants. With respect to the Revolving Facility, we are required to maintain a consolidated first lien net leverage ratio of no greater than 6.25 to 1 if more than 35% of the Revolving Facility has been drawn, or subject to letter of credit exposure. The Credit Agreement contains other customary representations and warranties, affirmative and negative covenants, and events of default. We complied with all covenants under the Credit Agreement as of March 31, 2026.
The Credit Agreement restricts our ability to incur liens, engage in mergers or asset sales, pay dividends, repay subordinated indebtedness, incur indebtedness, make investments and loans, and engage in other transactions as specified in the Credit Agreement. The Credit Agreement provides for specified exceptions, including baskets measured as a percentage of trailing twelve months of earnings before interest, taxes, depreciation and amortization, and unlimited exceptions in the case of incurring indebtedness and liens and making investments, dividend payments, and payments of subordinated indebtedness, based on achievement and maintenance of specified leverage ratios. The Credit Agreement permits repayment, prepayment, and repricing transactions. The Credit Agreement also contains a mandatory prepayment sweep mechanism with respect to a portion of our excess cash flow (as defined in the Credit Agreement) in the event our consolidated first lien net leverage ratio rises above 3.5 to 1. Our mandatory excess cash flow prepayment, as specified in the Credit Agreement, was $28.6 million as of December 31, 2024. This amount was paid in May 2025. As a result, no quarterly principal payment was required for the quarter ended March 31, 2026, and no quarterly principal payment will be required until the fourth quarter of 2026. As of December 31, 2025, our first lien net leverage ratio was below the specified leverage ratio and therefore the mandatory prepayment sweep was not required.
U.S. Government
A significant portion of our revenues and cash flow are derived from U.S. government contracts. During 2025, we did not experience delays in receiving payments from U.S. government agencies despite the U.S. government shutdown during the fourth quarter. While none of our contracts were impacted as a result, an extended government shutdown could result in a delay or suspension of funding for our U.S. government contracts and disrupt our cash flows and delay new contract awards.
Contractual Obligations
As of March 31, 2026, we had non-cancelable purchase obligations of approximately $8.1 million for inventory purchases with Benchmark, our primary third-party equipment supplier. Our purchase obligations, all of which are due during the next twelve months, did not change materially from the end of 2025.
We also have contractual obligations in the short and long term related to the Term Loan (see Note 5) and leases.
Dividends
In December 2022, our Board of Directors initiated a quarterly dividend. Total dividends paid during the three months ended March 31, 2026 and March 31, 2025 were $16.5 million and $15.7 million, respectively. We currently expect that comparable cash dividends will continue to be paid in the future, although future dividends will depend on our earnings, capital requirements, financial conditions and other factors that our Board of Directors deems relevant.
Share Repurchases
As of March 31, 2026, $245.3 million remained available and authorized for repurchase under this program through December 31, 2027. Effective October 1, 2025, we paused share repurchases to increase financial flexibility. We will continue to evaluate the amount and timing of share repurchases under our share repurchase program, considering, among other factors, general market conditions, capital allocation priorities, general business conditions, and other investment opportunities. The repurchase program does not obligate us to repurchase any specific amount of common stock and may be modified, suspended, or discontinued at any time without notice at the discretion of our Board of Directors.
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Cash Flows
The following table summarizes our cash flows:
| Three Months Ended March 31, | |||||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||||
| (In thousands) | |||||||||||||||||||
| Cash provided by operating activities | $ | 71,615 | $ | 61,081 | $ | 10,534 | |||||||||||||
| Cash used in investing activities | $ | (29,955) | $ | (24,546) | $ | (5,409) | |||||||||||||
Cash used in financing activities | $ | (26,343) | $ | (81,063) | $ | 54,720 | |||||||||||||
Cash Flows Provided by Operating Activities
Net cash provided by operating activities for the three months ended March 31, 2026 increased by $10.5 million from the prior year period. The changes in operating cash relate to a working capital increase of approximately $14.1 million, primarily due to changes in employee and vendor related accruals, the recognition of deferred revenue, and the timing of customer and vendor payments.
Cash Flows Used in Investing Activities
Net cash used in investing activities for the three months ended March 31, 2026 increased by $5.4 million as compared to the prior year period, as a result of the increase in spending on capital expenditures.
Cash Flows Used in Financing Activities
Net cash used in financing activities for the three months ended March 31, 2026 decreased by $54.7 million as compared to the prior year period. Cash flows used in the prior year were higher primarily due to share repurchases, offset in part by the $20.0 million draw down on the revolver.
U.S. Tax Regulation Update
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA permanently extends certain expiring provisions of the Tax Cuts and Jobs Act, modifies the international tax framework, and restores certain favorable business tax provisions, among other changes. The legislation has multiple effective dates, with certain provisions effective in 2025 and others to be implemented through 2027. We have incorporated the impact of the new legislation into our year-to-date effective tax rate and continue to assess the impact on our consolidated financial statements.
Seasonality
Our results of operations have been subject to seasonal usage changes for commercial customers, and we expect that our results will be affected by similar seasonality going forward. March through October are typically the peak months for commercial voice services revenue and related subscriber equipment sales. U.S. government revenue and commercial IoT revenue have been less subject to seasonal usage changes.
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, income taxes, useful lives of property and equipment, loss contingencies, and other estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
There have been no changes to our critical accounting policies and estimates from those described in our 2025 Form 10-K.
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-04-06 | Kapalka Timothy | CAO Iridium Satellite LLC | Sell | -2,043 | $33.00 | -$67,419 |
| 2026-04-02 | Kapalka Timothy | CAO Iridium Satellite LLC | Sell | -3,790 | $31.00 | -$117,490 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-07-23 10-Q expected by 2026-08-10 (in 24 days)
- ~2026-10-22 10-Q expected by 2026-11-09 (in 115 days)
- ~2027-02-11 10-K expected by 2027-02-25 (in 227 days)
- ~2027-04-22 10-Q expected by 2027-05-10 (in 297 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 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
- 2026-02-12 8-K Earnings Release; Financial Statements and Exhibits
- 2025-12-04 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-10-23 10-Q Quarterly Report
- 2025-10-23 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-24 10-Q Quarterly Report
- 2025-07-24 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-06-17 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-05-14 8-K Officer/Director Change; Bylaws/Articles Amended; Shareholder Vote Results; Regulation FD Disclosure; Financial Statements and Exhibits