Iridium Communications Inc.
For the period ended Sep 30, 2026. Filed Oct 20, 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.
Sep 30, 2026 · Filed Oct 20, 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 2026-06-30; filed 2026-07-22.
0001418819-26-000045
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-20.
0001418819-26-000052
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 167 previous paragraphs and 169 current paragraphs.
106 unchanged; 44 reworded; 18 added; 15 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 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 (18)
Current report
The waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”), related to the Transaction expired on August 12, 2026 and, on September 24, 2026, our stockholders approved the Transaction at a special meeting of stockholders (the “Special Meeting”). The expiration of the HSR waiting period and stockholder approval were each closing conditions to the Transaction.
Current report
On September 15, 2026, we entered into the fourth amendment to the credit agreement (the “Fourth Amendment”), which, among other things, provides that the Transaction shall not constitute a change of control under the credit agreement. The term loan in an original aggregate principal amount equal to $1,500.0 million (the “September 2023 Term Loan”), an additional aggregate $325.0 million in term loans, comprised of $125.0 million on March 25, 2024 (the “March 2024 Term Loan”), and $200.0 million on July 30, 2024 (the “July 2024 Term Loan” together with the September 2023 Term Loan and March 2024 Term Loan, the “Term Loan”) and the $100.0 million revolving credit facility (the “Revolving Facility”) are permitted to remain outstanding after the closing of the Transaction. Rocket Lab has stated that through a combination of equity raised through an at-the-market offering, available liquidity and assumption of the Term Loan, that it has sufficient cash to fully fund the Transaction.
Current report
Cost of services (exclusive of depreciation and amortization) increased by $9.9 million, or 20%, for the three months ended September 30, 2026 from the prior year period, primarily as a result of $10.1 million in costs due to the Aireon acquisition.
Current report
Research and development expenses remained relatively flat compared to the prior year period.
Current report
Interest expense, net increased $4.2 million, or 19%, for the three months ended September 30, 2026, compared to the same period of the prior year. The increase was primarily due to $6.5 million in interest expense associated with the Aireon Loans, partially offset by lower interest rates compared to the prior year period.
Current report
Other Income, net
Current report
Other income, net, was $0.4 million for the three months ended September 30, 2026, and September 30, 2025, respectively, primarily driven by foreign currency exchange rates.
Current report
Gain (Loss) on Equity Method Investments, Net of Tax
Current report
For the three months ended September 30, 2026, our after tax gain on equity method investments was $103.9 million compared to a loss of $0.7 million in the prior year period. Prior to our acquisition of Aireon in July 2026, we held a 39.5% equity interest in Aireon Holdings, which was classified as an equity method investment. Upon the closing of the acquisition of Aireon, we recorded a gain of $135.3 million, equal to the difference between the fair value and net book value of the equity method investment. The impact of this gain on net income was partially offset by $31.4 million in taxes related to the remeasurement.
Current report
Depreciation and amortization expense increased by $12.2 million, or 8%, for the nine months ended September 30, 2026, compared to the prior year period, primarily related to a $4.5 million increase in depreciation due to the Aireon acquisition, $3.8 million in amortization of intangible assets recognized related to the Aireon acquisition, amortization of customer relationships related to the Satelles acquisition in 2024 and depreciation on satellites placed into service in 2025.
Current report
Interest expense, net decreased $1.8 million for the nine months ended September 30, 2026 compared to the prior year period. The decrease was primarily due to lower interest expense related to lower average debt levels, excluding the Aireon Loans, and interest rates and higher capitalized interest, offset by $6.5 million in interest expense associated with the Aireon Loans.
Current report
Gain (Loss) on Equity Method Investments, Net of Tax
Current report
For the nine months ended September 30, 2026, our after tax gain on equity method investments was $101.6 million, primarily as a result of the acquisition of Aireon, upon which we recorded a $135.3 million gain on our previously held equity method investment, as noted above. The impact of this gain on net income was partially offset by $31.4 million in taxes related to the remeasurement. For the nine months ended September 30, 2025 our loss on equity method investments was $2.2 million, reflecting the portion of losses recorded on equity method investments, including Aireon, during the period.
Current report
Net income was $138.2 million for the nine months ended September 30, 2026, compared to $89.5 million for the prior year period. The change primarily resulted from the gain related to the acquisition of Aireon, as described above.
Current report
Pursuant to the Amended and Restated Credit Agreement, dated as of September 20, 2023, by and among Iridium Holdings LLC, we solely with respect to Section 10.12 thereof, Iridium Satellite LLC, the lenders party thereto from time to time, and Deutsche Bank AG New York Branch, as the administrative agent and the collateral agent (as amended to date, the “Credit Agreement”), we borrowed the Term Loan and obtained the Revolving Credit Facility. The maturities of the Term Loan and Revolving Facility are in September 2030 and September 2028, respectively.
Current report
On September 15, 2026, we entered into the Fourth Amendment that, among other things, (i) provides that the Transaction shall not constitute a change of control under the Credit Agreement, (ii) provides for a downstream guarantee of the obligations under the Credit Agreement by Rocket Lab USA, Inc., at the closing of the Transaction, (iii) solely from and after the closing of the Transaction, increases the interest rate applicable to the Term Loan to a per annum rate of (a) SOFR plus an interest rate margin that ranges from 2.50% to 3.00% or (b) base rate plus an interest rate margin that ranges from 1.50% to 2.00%, in each case, based on our credit ratings, (iv) solely from and after the closing of the Transaction, provides for a prepayment premium, applicable only in the case of a repricing transaction (and in any event, not in the case of a change of control or transformative transaction), in an amount equal to 1.00% of the Term Loan subject to such repricing transaction, (v) solely from and after the closing of the Transaction, provides for an exit fee, which applies after the first anniversary of the closing of the Transaction, in an amount equal to 1.00% of the Term Loan prepaid and (vi) makes certain other amendments, which other amendments shall only take effect after the consummation of the Transaction. The Term Loan and the Revolving Facility are permitted to remain outstanding after the closing of the Transaction. Rocket Lab has stated that through a combination of equity raised through an at-the-market offering, available liquidity and assumption of the Term Loan, it has sufficient cash to fully fund the Transaction.
Current report
Aireon Term Loan and Credit Facility
Current report
In connection with the Aireon acquisition, we applied the acquisition method of accounting, which requires significant estimates and judgments in determining the fair values of assets acquired, liabilities assumed and our previously held equity interest. Significant estimates primarily relate to the valuation of acquired intangible assets, including projected future cash flows, growth rates and discount rates. The purchase price allocation remains preliminary and is subject to adjustment during the measurement period. See Note 11 to the financial statements for additional information.
Removed paragraphs (15)
Previous 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.
Previous report
Loss on Equity Method Investments
Previous report
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 report
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 report
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 report
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 report
Other Expense, net
Previous report
Loss on Equity Method Investments
Previous report
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.
Previous 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.
Previous report
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 report
$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.
Previous report
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 report
Aireon Term Loans and Credit Facility
Previous report
Aireon Holdings and, subject to certain exceptions, substantially all of Aireon’s existing and future direct and indirect wholly owned subsidiaries are required to guarantee the repayment of Aireon’s obligations under the Aireon Credit Agreement. The obligations of Aireon and each of the Aireon Guarantors with respect to the Aireon Credit Agreement are secured by a pledge of substantially all assets of Aireon and each Aireon Guarantor.
Reworded paragraphs (44)
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 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.
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 (“Aireon’s”) space-based air traffic surveillance system. We also utilize our long history operating a commercial LEO satellite system to provide a growing array of engineering and operational services to government customers and government network operators such as the U.S. Space Force.
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 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.
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 130 service providers, approximately 300 value-added resellers (“VARs”), and approximately 100 value-added manufacturers, which create and sell technology that uses the Iridium network either directly to the end user or indirectly through other service providers, VARs or dealers. These distributors often integrate our products and services with other complementary hardware and software and have developed a broad suite of applications using our products and services to target specific industries or business areas. We expect that demand for our services will increase as more applications are developed and deployed that utilize our technology.
Previous 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.
Current wording
As of September 30, 2026, we had approximately 2,696,000 billable subscribers worldwide, an increase of 154,000, or 6%, from approximately 2,542,000 billable subscribers as of September 30, 2025. We have a diverse customer base, including end users in land mobile, Internet of Things (“IoT”), maritime, aviation and government.
Previous wording
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 wording
We now indirectly own all of the membership interests in Aireon Holdings and Aireon, which is the operator of the world’s only space-based ADS-B air traffic surveillance system. We acquired the additional equity interest for an aggregate contractual purchase price of approximately $366.7 million, 50% in cash and 50% deferred and in the form of a loan by the Sellers, payable one year following the Aireon Closing pursuant to a Credit and Guaranty Agreement. We view this acquisition as a defining step toward achieving our long-term business objective to provide the foundational architecture for global aviation safety, bringing space-based surveillance, safety communications, PNT, and operational data together on a single network.
Previous wording
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 wording
The Transaction is expected to be completed by mid-2027, subject to the satisfaction of remaining customary closing conditions, including (i) consent of the U.S. Federal Communications Commission to the transfer of control of certain of our telecommunication authorizations; (ii) receipt of clearances or approvals under other specified foreign investment and satellite and telecommunications laws; (iii) the absence of any order or law issued, enforced or enacted by a governmental authority in certain specified jurisdictions that prevents, makes illegal or enjoins the consummation of the Transaction; (iv) there having not occurred a Company Material Adverse Effect or a Parent Material Adverse Effect, each as defined in the Merger Agreement; and (v) the continued effectiveness of a registration statement on Form S-4 with respect to shares of Rocket Lab Common Stock to be issued in the Transaction and approval of such shares for listing on the Nasdaq Global Select Market.
Previous wording
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 wording
For more information regarding the Transaction and related arrangements, see the definitive merger proxy statement related to the Special Meeting that we filed on August 26, 2026 and the Current Reports on Form 8-K that we filed on June 29, 2026, September 15, 2026, September 18, 2026, and September 24, 2026.
Previous 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.
Current wording
For the three months ended September 30, 2026, total commercial services revenue increased $21.6 million, or 16%, from the prior year period primarily as a result of increases in hosted payload and other data services and IoT data. Hosted payload and other data service revenue increased $22.7 million, or 121%, compared to the prior year period, primarily due to the inclusion of Aireon revenue totaling $26.3 million, partially offset by decreases in PNT revenue including non-recurring revenue recognition in the prior year period. Commercial IoT revenue increased $2.0 million, or 4%, for the three months ended September 30, 2026, compared to the same period of the prior year, driven by a 9% increase in billable subscribers, offset in part by a decline in ARPU. The increases in commercial services were partially offset by decreases in voice and data and broadband. Commercial voice and data revenue decreased $1.9 million, or 3%, for the three months ended September 30, 2026, compared to the same period of the prior year, primarily due to decreased billable subscribers. Commercial broadband revenue decreased $1.2 million, or 9%, for the three months ended September 30, 2026, compared to the prior year period, due primarily to the decline in ARPU to $246 in the third quarter of 2026, as compared to $265 in the prior year period, reflecting the increased prevalence of use of lower-priced companion plans in the current year period.
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 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.
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 September 30, 2026 increased slightly reflecting the contractual step ups in the EMSS contract. On September 11, 2026, the U.S. Space Force exercised its option to extend the EMSS Contract with us through March 2027, at the same contractual rate. We continue to expect a renewal of the EMSS Contract in 2027. For more on risks associated with the EMSS contract expiration, see the risk factor captioned “—Our agreements with U.S. government customers, particularly the Department of War (the “DoW”), which represent a significant portion of our revenue, are subject to termination and renewal” in our 2025 Form 10-K.
Previous wording
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 wording
Subscriber equipment revenue decreased by $2.5 million, or 11%, for the three months ended September 30, 2026, compared to the prior year period, primarily as a result of a decrease in volume of handset and L-band transceiver device sales offset in part by an increase in volume of Short Burst Data® device sales. We continue to expect equipment revenue in 2026 to be in line with 2025.
Previous wording
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 wording
Engineering and support service revenue decreased by $1.0 million, or 2%, for the three months ended September 30, 2026, compared to the prior year period, primarily due to the Aireon acquisition. We expect engineering and support service revenue to be higher in 2026 than in 2025.
Previous 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.
Current wording
Cost of subscriber equipment decreased by $1.1 million, or 8%, for the three months ended September 30, 2026, compared to the prior year period, primarily due to the net decrease in volume of device sales, as noted above.
Previous 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.
Current wording
Selling, general and administrative expenses increased by $39.4 million, or 111%, for the three months ended September 30, 2026, compared to the prior year period, primarily due to increases in transaction costs totaling $21.3 million associated with the Transaction and the Aireon acquisition. The increase was also due to $10.6 million higher employee costs, including stock-based compensation expenses, $4.8 million in costs due to the Aireon acquisition, $2.1 million in professional fees, and $1.2 million of stock appreciation rights expense.
Previous wording
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 wording
We expect our selling, general and administrative expenses to moderate from the current quarter as we expect transaction costs to decrease during the pendency of the Transaction and in connection with the closing.
Previous wording
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 wording
Depreciation and amortization expense increased by $9.1 million, or 17%, for the quarter ended September 30, 2026, compared to the prior year period, primarily related to a $4.5 million increase in depreciation due to the Aireon acquisition and a $3.8 million increase in amortization of intangible assets recognized related to the Aireon acquisition.
Previous 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.
Current wording
For the three months ended September 30, 2026, our income tax expense was $2.2 million, compared to $10.0 million for the prior year period. The decrease in income tax expense is primarily related to decreased pre-tax book income in 2026 compared to 2025 and decreased tax expense associated with stock compensation and nondeductible executive compensation, partially offset by decreased tax benefit from the deduction for foreign derived deduction eligible income and tax expense from acquisition costs.
Previous 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.
Current wording
Net income was $106.9 million for the three months ended September 30, 2026, compared to net income of $37.1 million for the prior year period. The $69.8 million increase in net income was primarily the result of the gain related to the acquisition of Aireon as described above.
Previous wording
Comparison of Our Results of Operations for the Six Months Ended June 30, 2026 and 2025
Current wording
Comparison of Our Results of Operations for the Nine Months Ended September 30, 2026 and 2025
Previous wording
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 wording
For the nine months ended September 30, 2026, total commercial services revenue increased $29.3 million, or 7%, from the prior year period primarily driven by increases in hosted payload and other data services, IoT data, and voice and data revenue. Hosted payload and other data service revenue increased $24.7 million, or 51%, compared to the prior year period, primarily due to the inclusion of Aireon revenue totaling $26.3 million, partially offset by decreases in PNT revenue, including non-recurring revenue recognition in the prior year. Commercial IoT revenue increased $6.4 million, or 5%, for the nine months ended September 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 $1.1 million, or 1%, from the prior year period, primarily due to increased ARPU from price increases implemented during the second half of the prior year. Commercial broadband revenue decreased $2.9 million, or 8%, for the nine months ended September 30, 2026, compared to the prior year period, primarily due to a decrease in ARPU to $248 in the third 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.
Previous wording
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 wording
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 nine months ended September 30, 2026 increased $2.4 million reflecting the contractual step ups in the EMSS contract. On September 11, 2026, the U.S. Space Force exercised its option to extend the EMSS Contract with us through March 2027, at the same contractual rate. We continue to expect a renewal of the EMSS Contract in 2027. For more on risks associated with the EMSS contract expiration, see the risk factor captioned “—Our agreements with U.S. government customers, particularly the DoW, which represent a significant portion of our revenue, are subject to termination and renewal” in our 2025 Form 10-K.
Previous 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.
Current wording
Subscriber equipment revenue decreased $4.1 million, or 6%, for the nine months ended September 30, 2026, compared to the prior year period, primarily as a result of a decrease in volume of handset and L-band transceiver device sales, offset in part by an increase in 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 $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.
Current wording
Engineering and support service revenue increased $3.6 million, or 3%, for the nine months ended September 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) 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 wording
Cost of services (exclusive of depreciation and amortization) increased by $8.5 million, or 6%, for the nine months ended September 30, 2026 from the prior year period, primarily as a result of $10.1 million in costs due to the Aireon acquisition, offset in part by decreased costs for network and satellite operations, maintenance and product support, as well as a decrease in work under commercial engineering contracts.
Previous wording
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 wording
Cost of subscriber equipment increased $1.3 million, or 3%, for the nine months ended September 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.
Previous wording
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 wording
Research and development expenses increased by $1.9 million, or 13%, for the nine months ended September 30, 2026 compared to the prior year period based on increased spending on device-related features and technology for our network.
Previous wording
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 wording
Selling, general and administrative expenses increased by $71.9 million, or 62%, for the nine months ended September 30, 2026 compared to the prior year period, primarily due to increases in transaction costs totaling $36.3 million associated with the Transaction and the Aireon acquisition. The increase was also due to $16.1 million higher employee costs including stock-based compensation expenses, $6.3 million of stock appreciation rights expense in the current year resulting from changes in our stock valuation between the years, including changes resulting from the announcement of the Transaction, $4.8 million in costs due to the Aireon acquisition, and $4.0 million in professional fees.
Previous 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.
Current wording
Other expense, net, was $0.3 million for the nine months ended September 30, 2026, compared to $2.2 million for the prior year period, primarily as the result of changes in foreign currency exchange rates.
Previous wording
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 wording
For the nine months ended September 30, 2026, our income tax expense was $14.1 million, compared to $19.6 million for the prior year period. The decrease in income tax expense is primarily related to decreased pre-tax book income in 2026 compared to 2025 and decreased tax expense associated with stock compensation and nondeductible executive compensation, partially offset by decreased tax benefit from the deduction for foreign derived deduction eligible income and tax expense from acquisition costs.
Previous 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.
Current wording
Our primary sources of liquidity are cash provided by operations, cash and cash equivalents and our Revolving Facility. As of September 30, 2026, we had approximately $2.1 billion of indebtedness, consisting of the Term Loan, and the term loan that we assumed in connection with the acquisition of Aireon in an aggregate original principal amount equal to $175 million (the “Aireon Term Loan”), and amounts outstanding under the Credit and Guaranty Agreement related to the Aireon Closing (the “Aireon Closing Loan” and together with the Aireon Term Loan, the “Aireon Loans”), the terms of which are described below. On July 1, 2026, we drew down $100.0 million on our Revolving Facility to fund the acquisition of Aireon Holdings. During the quarter ended September 30, 2026, we repaid $50.0 million and $50.0 million remained outstanding as of September 30, 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 and Aireon Loans in the next 12 months, (ii) capital expenditures, (iii) working capital, and (iv) anticipated cash dividend payments to holders of our common stock.
Previous 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.
Current wording
As of September 30, 2026, our total cash and cash equivalents balance was $97.9 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 by our acquisition of Aireon in the third quarter of 2026.
Previous wording
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.
Current wording
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 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.
Previous wording
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.
Current wording
The Term Loan has been repriced on several occasions, most recently in June 2024, and currently bears interest at an annual rate equal to SOFR, plus 2.25%, with a 0.75% SOFR floor. If the Transaction closes, solely from and after the closing of the Transaction, the Term Loan will again be repriced, as further described below. 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), with the remaining principal due upon maturity. As further detailed 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.
Previous wording
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.
Current wording
The Revolving Facility bears interest at an annual rate of SOFR plus 2.5% (but without a SOFR floor) if and as drawn, with no original issue discount, and 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 1.0.
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 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.
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 also contains customary representations and warranties, affirmative covenants and events of default. Additionally, the Credit Agreement contains an annual mandatory prepayment sweep mechanism with respect to a portion of our excess cash flow (as defined in the Credit Agreement) in the event our net leverage ratio rises above 3.5 to 1.0. 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, June 30, 2026, and September 30, 2026, and no quarterly principal payment will be required until the fourth quarter of 2026. As of December 31, 2025, we were below the specified leverage ratio and therefore the mandatory prepayment sweep was not required.
Previous wording
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 June 30, 2026.
Current wording
The Credit Agreement contains no financial maintenance covenants with respect to the Term Loan. With respect to the Revolving Facility, the Credit Agreement requires us to maintain a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of no greater than 6.25 to 1.0 if more than 35% of the Revolving Facility has been drawn, which was the case as of September 30, 2026. As of September 30, 2026, we were in compliance with all covenants.
Previous wording
In connection with the Aireon Closing, the aggregate purchase price payable to the Sellers was approximately $366.7 million, paid in two installments: (i) 50% in cash at the Aireon Closing; and (ii) 50% deferred and in the form of a loan by the Sellers. In connection with the deferred portion of the purchase price, on the Aireon Closing Date, Iridium Monitor Holdings, as borrower, and the Sellers entered into a Credit and Guaranty Agreement (the “Credit and Guaranty Agreement”) pursuant to which the Sellers provided Iridium Monitor Holdings with a $183.4 million term loan, bearing no interest, and maturing one year following the Aireon Closing Date, to fund the deferred portion of the purchase price. The loan is secured by a first priority lien on the equity interests of Aireon Holdings and other intermediate holding company entities.
Current wording
In connection with the Aireon Closing, the aggregate purchase price payable to the Sellers was approximately $366.7 million, paid in two installments: (i) 50% in cash at the Aireon Closing; and (ii) 50% deferred and in the form of a loan by the Sellers. In connection with the deferred portion of the purchase price, on the Aireon Closing Date, Iridium Monitor Holdings, as borrower, and the Sellers entered into the Credit and Guaranty Agreement, pursuant to which the Sellers provided Iridium Monitor Holdings the Aireon Closing Loan, bearing no interest, and maturing one year following the Aireon Closing Date, to fund the deferred portion of the purchase price. The loan is secured by a first priority lien on the equity interests of Aireon Holdings and other intermediate holding company entities.
Previous wording
As a result of the Aireon Closing, on a going forward basis, Aireon’s previously existing credit facility will be consolidated with our financial position and results of operations. That credit facility provides for secured term loans in the original aggregate principal amount of $175 million (the “Aireon Term Loans”) with a scheduled maturity date of October 10, 2028, and is reflected in a Credit and Guaranty Agreement, dated as of October 10, 2023, as amended by the First Amendment to Credit and Guaranty Agreement, dated as of July 2, 2026, by and among Aireon as borrower, Aireon Holdings and other subsidiaries of Aireon Holdings from time to time party thereto as guarantors (together with Aireon Holdings, the “Aireon Guarantors”), GLAS USA LLC, as administrative agent, GLAS Americas LLC, as collateral agent, and the lenders from time to time party thereto (the “Aireon Credit Agreement”). As of the filing date of this Form 10-Q, the aggregate principal balance of the Aireon Term Loans is $154.7 million.
Current wording
As a result of the Aireon Closing, the Parent Guaranty Agreement (the “Parent Guaranty”), pursuant to which we provided an unsecured guarantee of the repayment of Aireon’s obligations under the Credit and Guaranty Agreement, dated as of October 10, 2023, by and among Aireon as borrower, Aireon Holdings and other subsidiaries of Aireon Holdings from time to time party thereto as guarantors, GLAS USA LLC, as administrative agent, GLAS Americas LLC, as collateral agent, and the lenders from time to time party thereto (as amended to date, the “Aireon Credit Agreement”) is consolidated with our financial position and results of operations. The Aireon Term Loan has a scheduled maturity date of October 10, 2028, and is reflected in the Aireon Credit Agreement.
Previous wording
In connection with the Aireon Closing, on July 2, 2026, we entered into a Parent Guaranty Agreement (the “Parent Guaranty”), pursuant to which we provided an unsecured guarantee of the repayment of Aireon’s obligations under the Aireon Credit Agreement.
Current wording
In connection with the Aireon Closing, on July 2, 2026, we entered into the Parent Guaranty, pursuant to which we provided an unsecured guarantee of the repayment of Aireon’s obligations under the Aireon Credit Agreement.
Previous wording
The Aireon Term Loans bear interest at a per annum rate equal to, at Aireon’s option, either (i) a SOFR-based rate plus a margin of 6.25% or (ii) a base rate plus a margin of 5.25%. In the event of a prepayment of all or a portion of the Aireon Term Loans, subject to certain exceptions, Aireon is required to pay a prepayment premium equal to (x) 3.00% of the aggregate principal amount of Aireon Term Loans so prepaid, if such prepayment is made on or prior to October 10, 2026, and (y) 1.00% of the aggregate principal amount of Aireon Term Loans so prepaid, if such prepayment is made after October 10, 2026 and on or prior to October 10, 2027. The Aireon Credit Agreement currently requires quarterly amortization payments equal to 1.875% of the original principal amount of the Aireon Term Loans, with such quarterly amortization payments increasing to 3.125% of the original principal amount of the Aireon Term Loans beginning with the quarter ending December 31, 2026 and each quarter thereafter until maturity.
Current wording
The Aireon Term Loan bears interest at a per annum rate equal to, at Aireon’s option, either (i) a SOFR-based rate plus a margin of 6.25% or (ii) a base rate plus a margin of 5.25%. In the event of a prepayment of all or a portion of the Aireon Term Loan, subject to certain exceptions, Aireon is required to pay a prepayment premium equal to 1.00% of the aggregate principal amount of Aireon Term Loan so prepaid if such prepayment is made on or prior to October 10, 2027. The Aireon Credit Agreement currently requires quarterly amortization payments equal to 1.875% of the original principal amount of the Aireon Term Loan, with such quarterly amortization payments increasing to 3.125% of the original principal amount of the Aireon Term Loan beginning with the quarter ending December 31, 2026 and each quarter thereafter until maturity.
Previous wording
The Aireon Credit Agreement contains customary representations and warranties and affirmative and negative covenants applicable to Aireon Holdings and its subsidiaries, including limitations on the ability of Aireon Holdings and its subsidiaries to incur debt, permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, pay junior indebtedness and enter into affiliate transactions, in each case, subject to certain exceptions. In addition, the Aireon Credit Agreement contains a financial covenant requiring Aireon Holdings and its subsidiaries to maintain, on a consolidated basis as of the last day of each quarterly period, a consolidated total leverage ratio, as defined in the Aireon Credit Agreement, of not more than 5.0 to 1.0. The Aireon Credit Agreement also includes events of default customary for facilities of this type. Upon the occurrence of an event of default, among other things, all outstanding Aireon Term Loans may be accelerated and collateral remedies may be exercised.
Current wording
The Aireon Credit Agreement contains customary representations and warranties, events of default and affirmative and negative covenants applicable to Aireon Holdings and its subsidiaries, including limitations on the ability of Aireon Holdings and its subsidiaries to incur debt, permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, pay junior indebtedness and enter into affiliate transactions, in each case, subject to certain exceptions. In addition, the Aireon Credit Agreement contains a financial covenant requiring Aireon Holdings and its subsidiaries to maintain, on a consolidated basis as of the last day of each quarterly period, a consolidated total leverage ratio, as defined in the Aireon Credit Agreement, of not more than 5.00 to 1.00.
Previous 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.
Current wording
As of September 30, 2026, we had non-cancelable purchase obligations of approximately $14.3 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.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
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 report — wording carried 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.