Iridium Communications Inc.
For the period ended Jun 30, 2026. Filed Jul 22, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 22, 2026
IRDM$44.04+4.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-23.
0001418819-26-000026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-22.
0001418819-26-000045
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 105 previous paragraphs and 167 current paragraphs.
72 unchanged; 30 reworded; 51 added; 3 removed; 0 previous and 14 current paragraphs rearranged.
Tables are not compared: 6 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (51)
Current report
Aireon Acquisition
Current report
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”).
Current report
We now indirectly own all of the membership interests in Aireon Holdings and its subsidiary Aireon LLC (“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 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.
Current report
Anticipated Merger with Rocket Lab Corporation
Current report
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”).
Current report
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).
Current report
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.
Current report
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.
Current report
The Transaction is expected to be completed in mid-2027, subject to the satisfaction of customary closing conditions, including (i) the adoption of the Merger Agreement and the Transaction by the affirmative vote of the holders of a majority of our outstanding common stock; (ii) the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and consent of the U.S. Federal Communications Commission to the transfer of control of certain of our telecommunication authorizations; (iii) receipt of clearances or approvals under other specified foreign investment and satellite and telecommunications laws; (iv) 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; (v) there having not occurred a Company Material Adverse Effect or a Parent Material Adverse Effect, each as defined in the Merger Agreement; and (vi) the 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 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.
Current report
For more information regarding the Transaction and related arrangements, see the Current Report on Form 8-K that we filed on June 29, 2026.
Current report
•our ability to realize the expected benefits of our acquisition of Aireon Holdings and effectively integrate Aireon and its personnel with our existing operations;
Current report
•our ability to complete the Transaction on the anticipated timeline or at all;
Current report
•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;
Current report
•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
Current report
•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.
Current report
Subscriber equipment revenue increased by $1.3 million, or 7%, for the three months ended June 30, 2026, compared to the prior year period, primarily as a result of an increase in volume of L-band transceiver and Certus device sales offset in part by a decrease in volume of Short Burst Data® device sales. We continue to expect equipment revenue in 2026 to be in line with 2025.
Current report
Cost of services (exclusive of depreciation and amortization) decreased by $2.3 million, or 4%, for the three months ended June 30, 2026 from the prior year period, primarily as a result of decreased costs for network and satellite operations, maintenance and product support, as well as a decrease in work under commercial engineering contracts.
Current report
Selling, general and administrative expenses increased by $22.4 million, or 50%, for the three months ended June 30, 2026, compared to the prior year period, primarily due to increases in transaction costs totaling $14.3 million, associated with the Merger Agreement with Rocket Lab and the Aireon acquisition. The increase was also due to professional fees, including stock appreciation rights expense in the current year resulting from changes in our stock valuation, including the effect of the announcement of the Merger Agreement with Rocket Lab, between the years.
Current report
We expect our selling, general and administrative expenses to increase due to increases in professional and advisory fees during the pendency of the Transaction and in connection with the closing and integration of Aireon.
Current report
Interest expense, net decreased $3.5 million, or 15%, for the three months ended June 30, 2026, compared to the same period of the prior year. The decrease resulted primarily from a decrease in the average borrowing rate and the decrease in average outstanding debt balance in 2026 as compared to the prior year which had $50.0 million outstanding under the Revolving Facility. We expect interest expense to increase as a result of our drawing $100.0 million on July 1, 2026 under our Revolving Facility.
Current report
Revenue
Current report
Commercial Service Revenue
Current report
Government Service Revenue
Current report
Subscriber Equipment Revenue
Current report
Engineering and Support Service Revenue
Current report
Operating Expenses
Current report
Cost of Subscriber Equipment
Current report
Cost of subscriber equipment increased $2.3 million, or 10%, for the six months ended June 30, 2026, compared to the prior year period, primarily due to an increase in inventory component costs and product mix. The increase in equipment costs was partially offset by the decrease in equipment volume for the same period, as noted above.
Current report
Research and Development
Current report
Selling, General and Administrative
Current report
We expect our selling, general and administrative expenses to increase due to increases in professional and advisory fees during the pendency of the Transaction and and in connection with the closing and integration of Aireon.
Current report
Depreciation and Amortization
Current report
Other Expense
Current report
Interest Expense, Net
Current report
Other Expense, net
Current report
Income Tax Expense
Current report
Loss on Equity Method Investments
Current report
Net Income
Current report
Net income was $31.3 million for the six months ended June 30, 2026, compared to $52.4 million for the prior year period. The change primarily resulted from increases in total operating expense, primarily selling, general and administrative expenses and increased income tax expense, partially offset by the increases in commercial services revenue and a decrease in interest expense, as described above.
Current report
The Merger Agreement provides for the payment of a termination fee of $223.6 million by us to Rocket Lab upon termination of the Merger Agreement under specified circumstances, including if the Merger Agreement is terminated (i) by us to enter into a definitive agreement for an alternative acquisition proposal that constitutes a Superior Proposal (as defined in the Merger Agreement) or (ii) by Rocket Lab because our Board of Directors withdraws its recommendation to our stockholders to vote in favor of the adoption of the Merger Agreement and the Transaction or because we materially and intentionally breach the “no-shop” restrictions in the Merger Agreement. The termination fee is also payable by us to Rocket Lab if the Merger Agreement is terminated in specified circumstances and we either consummate an alternative acquisition transaction or enter into a definitive agreement providing for an alternative acquisition transaction within one year of such termination.
Showing the first 40 of 51 passages. Open the source sections for the rest.
Removed paragraphs (3)
Previous report
(1)Billable subscriber numbers shown are at the end of the respective period.
Previous report
(1)Billable subscriber numbers shown are at the end of the respective period.
Previous report
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.
Reworded paragraphs (30)
Previous wording
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.
Current wording
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 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.
Previous wording
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.
Current wording
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 320 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.
Previous wording
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.
Current wording
As of June 30, 2026, we had approximately 2,627,000 billable subscribers worldwide, an increase of 144,000, or 6%, from approximately 2,483,000 billable subscribers as of June 30, 2025. We have a diverse customer base, including end users in land mobile, Internet of Things (“IoT”), maritime, aviation and government.
Previous wording
•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
Current wording
•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;
Previous wording
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.
Current wording
For the three months ended June 30, 2026, total commercial services revenue increased $4.9 million, or 4%, from the prior year period primarily as a result of increases in IoT data, voice and data services and hosted payload and other data services. Commercial IoT revenue increased $2.3 million, or 5%, for the three months ended June 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. Hosted payload and other data service revenue increased $2.0 million, or 14%, compared to the prior year period, primarily due to increases in other data services contracts. Commercial voice and data revenue increased $1.6 million, or 3%, for the three months ended June 30, 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. The increases in commercial services were partially offset by a decrease in commercial broadband revenue of $1.0 million, or 8%, for the three months ended June 30, 2026, compared to the prior year period, due primarily to the decline in ARPU to $243 in the second quarter of 2026, as compared to $260 in the prior year period, reflecting the increased prevalence of use of lower-priced companion plans in the current year period.
Previous wording
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.
Current wording
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 June 30, 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, at the same rate. We have begun discussions with the U.S. government on a new EMSS contract, which we expect to enter into by March 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 customers, particularly the Department of War (“DoW”), which represent a significant portion of our revenue, are subject to termination and renewal” in our 2025 Form 10-K.
Previous wording
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.
Current wording
Cost of subscriber equipment increased by $2.2 million, or 19%, for the three months ended June 30, 2026, compared to the prior year period, primarily due to the net increase in volume of device sales, as noted above. The percentage increase in equipment revenue did not match the change in cost of subscriber equipment primarily related to increased costs.
Previous wording
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.
Current wording
Research and development expenses increased by $1.3 million, or 29%, for the three months ended June 30, 2026, compared to the prior year period based on increased spending on new products and device-related features and technology for our network.
Previous wording
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.
Current wording
Other expense, net, was $0.4 million for the three months ended June 30, 2026, compared to $0.9 million for the prior year period, primarily as the result of changes in foreign currency exchange rates.
Previous wording
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.
Current wording
For the three months ended June 30, 2026, our income tax expense was $3.1 million, compared to $3.8 million for the prior year period. The decrease in income tax expense is primarily related to 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.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
For the three months ended June 30, 2026, our loss on equity method investments was $1.5 million compared to a loss of $0.9 million in the prior year period. These amounts reflect the portion of losses recorded on our equity method investments.
Previous wording
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.
Current wording
Net income was $9.7 million for the three months ended June 30, 2026, compared to $22.0 million for the prior year period. The $12.3 million decrease in net income was primarily the result of the increases in total operating expense, primarily selling, general and administrative expenses, partially offset by the increases in commercial services revenue, as described above and decreased interest expense.
Previous wording
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.
Current wording
Subscriber equipment revenue decreased $1.6 million, or 4%, for the six months ended June 30, 2026, compared to the prior year period, primarily as a result of a decrease in volume of handset, L-band transceiver and Short Burst Data device sales, offset in part by an increase in the volume of Certus device sales. We continue to expect equipment revenue in 2026 to be in line with 2025.
Previous wording
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.
Current wording
Engineering and support service revenue increased $4.6 million, or 6%, for the six months ended June 30, 2026 compared to the prior year period due to increased work under certain government projects, predominantly the contract with the Space Development Agency (“SDA”). We expect engineering and support service revenue to be higher in 2026 than in 2025.
Previous wording
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.
Current wording
Cost of services (exclusive of depreciation and amortization) decreased by $1.4 million, or 1%, for the six months ended June 30, 2026 from the prior year period, primarily as a result of decreased costs for network operations, maintenance and product support, as well as a decrease in work under commercial engineering contracts, offset in part by an increase in work under certain government engineering contracts, including the SDA contract, as noted above.
Previous wording
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.
Current wording
Selling, general and administrative expenses increased by $32.4 million, or 40%, for the six months ended June 30, 2026 compared to the prior year period, primarily due to primarily due to increases in transaction costs totaling $15.0 million, associated with the Merger Agreement with Rocket Lab and the Aireon acquisition. The increase was also due to professional fees, including stock appreciation rights expense in the current year resulting from changes in our stock valuation, including the effect of the announcement of the Merger Agreement with Rocket Lab, between the years, and increases associated with the timing of headcount costs and related benefits allocated to programs.
Previous wording
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.
Current wording
Depreciation and amortization expense increased by $3.1 million, or 3%, for the six months ended June 30, 2026, compared to the prior year period, primarily related to intangible asset amortization and depreciation on satellites placed into service during the prior year.
Previous wording
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.
Current wording
Interest expense, net decreased $6.0 million for the six months ended June 30, 2026 compared to the prior year period. The decrease resulted primarily from a decrease in the average borrowing rate and the decrease in average outstanding debt balance in 2026 as compared to the prior year which had $50.0 million outstanding under the Revolving Facility. We expect interest expense to increase as a result of our drawing $100.0 million on July 1, 2026 under our Revolving Facility.
Previous wording
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.
Current wording
Our primary sources of liquidity are cash provided by operations, cash and cash equivalents and our Revolving Facility. As of June 30, 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 had $100.0 million of additional borrowing available to us under our Revolving Facility as of June 30, 2026, which was subsequently fully drawn on July 1, 2026, to fund the acquisition of Aireon Holdings. 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 $12.5 million, and, based on the current interest rate, approximately $90.0 million, respectively in the next 12 months, (ii) capital expenditures, (iii) working capital, (iv) anticipated cash dividend payments to holders of our common stock and (v) required principal and interest on the Aireon Term Loans and the Credit and Guaranty Agreement associated with the Aireon Closing.
Previous wording
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.
Current wording
As of June 30, 2026, our total cash and cash equivalents balance was $184.2 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.
Previous wording
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.
Current wording
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
Previous wording
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 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.
Current wording
As of June 30, 2026, we reported an aggregate balance of $1,774.7 million in borrowings under the Term Loan before $12.8 million of net unamortized deferred financing costs for a net principal balance of $1,761.9 million outstanding in our condensed consolidated balance sheet. In the first half of 2025, we drew $50.0 million under our Revolving Facility for general corporate purposes, all of which was repaid in December 2025, and there were no amounts outstanding as of June 30, 2026 or December 31, 2025. On July 1, 2026, we drew down $100.0 million on our Revolving Facility, the proceeds of which were used for the acquisition of Aireon Holdings.
Previous wording
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.
Current wording
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 quarters ended March 31, 2026 and June 30, 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.
Previous wording
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.
Current wording
As of June 30, 2026, we had non-cancelable purchase obligations of approximately $11.5 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.
Previous wording
We also have contractual obligations in the short and long term related to the Term Loan (see Note 5) and leases.
Current wording
As of June 30, 2026, we also had contractual obligations in the short and long term related to the Term Loan (see Note 5) and leases.
Previous wording
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.
Current wording
In December 2022, our Board of Directors initiated a quarterly dividend. Total dividends paid during the six months ended June 30, 2026 and June 30, 2025 were $32.7 million and $30.8 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.
Previous wording
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.
Current wording
Net cash provided by operating activities for the six months ended June 30, 2026 decreased by $4.9 million from the prior year period. The changes in operating cash relate primarily to the decreased net income from increased transaction costs incurred. These changes were offset in part by a working capital decrease of approximately $11.6 million, primarily due timing of customer and vendor payments and related accruals and changes in inventory.
Previous wording
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.
Current wording
Net cash used in investing activities for the six months ended June 30, 2026 increased by $6.5 million as compared to the prior year period, as a result of the change in spending on capital expenditures.
Previous wording
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.
Current wording
Net cash used in financing activities for the six months ended June 30, 2026 decreased by $115.7 million compared to the prior year period. Cash flows used in the prior year were higher primarily due to share repurchases and the mandatory excess cash flow payment, offset in part by the $50.0 million draw down on the revolver.
Rearranged current paragraphs (14)
Current report — wording carried from elsewhere
Engineering and support service revenue increased by $1.3 million, or 3%, for the three months ended June 30, 2026, compared to the prior year period, primarily due to increased work under certain government contracts. We expect engineering and support service revenue to be higher in 2026 than in 2025.
Current report — wording carried from elsewhere
Depreciation and amortization expense increased by $1.0 million, or 2%, for the quarter ended June 30, 2026, compared to the prior year period, primarily related to intangible asset amortization.
Current report — wording carried from elsewhere
Comparison of Our Results of Operations for the Six Months Ended June 30, 2026 and 2025
Current report — wording carried from elsewhere
(2)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.
Current report — wording carried from elsewhere
(3)Commercial broadband service consists of Iridium OpenPort and Iridium Certus broadband services.
Current report — wording carried from elsewhere
For the six months ended June 30, 2026, total commercial services revenue increased $7.7 million, or 3%, from the prior year period primarily driven by increases in IoT data, voice and data and hosted payload and other data services revenue. Commercial IoT revenue increased $4.4 million, or 5%, for the six months ended June 30, 2026, compared to the prior year period, driven by a 9% increase in IoT billable subscribers, offset in part by a decline in ARPU. Commercial voice and data revenue increased $3.0 million, or 3%, from the prior year period, primarily due to increased ARPU from price increases implemented during the second half of the prior year. Hosted payload and other data service revenue increased $2.0 million, or 7%, compared to the prior year period, primarily due to increases in other data services contracts. Commercial broadband revenue decreased $1.7 million, or 7%, for the six months ended June 30, 2026, compared to the prior year period, primarily due to a decrease in ARPU to $248 in the second quarter of 2026, as compared to $260 in the prior year period, reflecting the increased prevalence of use of lower-priced companion plans in the current year period.
Current report — wording carried from elsewhere
We provide airtime and airtime support to the U.S. government and other authorized customers pursuant to our 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 six months ended June 30, 2026 increased $1.8 million 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, at the same rate. We have begun discussions with the U.S. government on a new EMSS contract, which we expect to enter into by March 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 customers, particularly the DoW, which represent a significant portion of our revenue, are subject to termination and renewal” in our 2025 Form 10-K.
Current report — wording carried from elsewhere
Cost of Services (exclusive of depreciation and amortization)
Current report — wording carried from elsewhere
Research and development expenses increased by $2.0 million, or 21%, for the six months ended June 30, 2026 compared to the prior year period based on increased spending on device-related features and technology for our network.
Current report — wording carried from elsewhere
Other expense, net, was $0.6 million for the six months ended June 30, 2026, compared to $2.6 million for the prior year period, primarily as the result of changes in foreign currency exchange rates.
Current report — wording carried from elsewhere
For the six months ended June 30, 2026, our income tax expense was $12.0 million, compared to $9.6 million for the prior year period. The increase in income tax expense is primarily related to decreased tax benefit from the deduction for foreign derived deduction eligible income and tax expense from acquisition costs.
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
For the six months ended June 30, 2026, our loss on equity method investments was $2.2 million, compared to a loss of $1.5 million for the prior year period. These amounts reflect the portion of losses recorded on our equity method investments.
Current report — wording carried from elsewhere
$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.