Iridium Communications Inc.

1. Basis of Presentation and Principles of Consolidation

Iridium Communications Inc. (the “Company”) prepared its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company’s operations are primarily conducted through, and its operating assets are owned by, its principal operating subsidiary, Iridium Satellite LLC, Iridium Satellite LLC’s immediate parent, Iridium Holdings LLC, and their respective subsidiaries. The accompanying condensed consolidated financial statements include the accounts of (i) the Company, (ii) its wholly owned subsidiaries, and (iii) all less than wholly owned subsidiaries that the Company controls. All material intercompany transactions and balances have been eliminated.

In the opinion of management, the condensed consolidated financial statements reflect all normal recurring adjustments that the Company’s management considers necessary for the fair presentation of its results of operations and cash flows for the interim periods covered, and of the financial position of the Company at the date of the interim condensed consolidated balance sheet. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to instructions, rules, and regulations prescribed by the U.S. Securities and Exchange Commission (the “SEC”). These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025, as filed with the SEC on February 12, 2026.

2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to revenue recognition, the useful lives and recoverability of long-lived and intangible assets, goodwill, income taxes, stock-based compensation, the incremental borrowing rate for its leases, and contingencies, among others. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses. Actual results could differ materially from those estimates.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). This guidance requires detailed disaggregation of certain expense captions presented on the face of the income statement, through enhanced disclosures about types of expenses within the footnotes to the financial statements. ASU 2024-03 is effective for public entities for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption is permitted. The ASU is required to be adopted prospectively; however, public entities are permitted to apply the ASU retrospectively. The Company is currently evaluating the effect ASU 2024-03 may have on its footnotes; however, the standard will not have an impact on the Company’s consolidated financial position, results of operations or cash flows.

Fair Value Measurements

The Company evaluates assets and liabilities subject to fair value measurements on a recurring and non-recurring basis to determine the appropriate level to classify them for each reporting period. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value.

The fair value hierarchy consists of the following tiers:

•Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

•Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

•Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The fair value estimates are based upon certain market assumptions and information available to the Company. The carrying values of the following financial instruments approximated their fair values as of September 30, 2026 and December 31, 2025: (1) cash and cash equivalents, (2) prepaid expenses and other current assets, (3) accounts receivable, (4) accounts payable, and (5) accrued expenses and other current liabilities. Fair values approximate their carrying values because of their short-term nature. The Level 2 cash equivalents include money market funds, commercial paper and short-term U.S. agency securities. The Company also classifies its derivative financial instruments as Level 2. In determining fair value of Level 2 assets, the Company uses a market approach utilizing valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. The Company did not hold any Level 3 assets as of September 30, 2026 or December 31, 2025.

Leases

For new leases, the Company determines if an arrangement is or contains a lease at inception. Leases are included as right-of-use (“ROU”) assets within other assets and ROU liabilities within accrued expenses and other liabilities and within other long-term liabilities on the Company’s condensed consolidated balance sheets.

ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Certain leases contain variable contractual obligations as a result of future base rate escalations which are estimated based on observed trends and included within the measurement of present value. The Company’s leases do not provide an implicit rate. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. ROU assets also include any lease payments made and exclude lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases, such as teleport network facilities, the Company elects the practical expedient to combine lease and non-lease components as a single lease component. Taxes assessed on leases in which the Company is either a lessor or lessee are excluded from contract consideration and variable payments when measuring new lease contracts or remeasuring existing lease contracts.

Inventory

Inventory consists primarily of finished goods and raw materials from third-party manufacturers. The Company outsources manufacturing of subscriber equipment to a third-party manufacturer and purchases accessories from third-party suppliers. The Company’s cost of inventory includes an allocation of overhead, including payroll and payroll-related costs of employees directly involved in bringing inventory to its existing condition, and freight. Inventories are valued using the average cost method and are carried at the lower of cost or net realizable value.

The Company has a manufacturing agreement with Benchmark Electronics Inc. (“Benchmark”) to manufacture most of its subscriber equipment. Pursuant to the agreement, the Company may be required to purchase excess materials at cost plus a contractual markup if the materials are not used in production within the periods specified in the agreement. Benchmark will then repurchase such materials from the Company at the same price paid by the Company, as required for the production of the subscriber equipment.

The following table summarizes the Company’s inventory balances:

Derivative Financial Instruments

The Company uses derivatives to manage its exposure to fluctuating interest rate risk on variable rate debt. Its derivatives are measured at fair value and are recorded on the condensed consolidated balance sheets within other assets and other current liabilities. When the Company’s derivatives are designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in accumulated other comprehensive income within the Company’s condensed consolidated balance sheets and subsequently recognized in earnings when the hedged items impact earnings. Any ineffective portion of a derivative’s change in fair value will be recognized in earnings in the same period in which the hedged interest payments affect earnings. Within the condensed consolidated statements of operations and comprehensive income, the gains and losses related to cash flow hedges are recognized within interest income (expense), net, as this is the same financial statement line item used for any gains or losses associated with the hedged items. Cash flows from hedging activities are included in operating activities within the Company’s condensed consolidated statements of cash flows, which is the same category as the item being hedged. See Note 6 for further information.

Intangible Assets and Goodwill

The Company’s other intangible assets that have finite lives (e.g., customer relationships, patents, developed technology, the Aireon trade name and other intellectual property) are amortized over their useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If any such indicators are present, the Company tests for recoverability by comparing the carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset. If those net undiscounted cash flows do not exceed the carrying amount (i.e., the asset is not recoverable), the Company would perform the next step, which is to determine the fair value of the asset and record an impairment loss, if any. The Company evaluates the useful lives for these intangible assets each reporting period to determine whether events and circumstances warrant a revision in their remaining useful lives.

The Company’s intangible assets with indefinite lives (spectrum, regulatory authorizations, and trade names) are not amortized but are tested for impairment annually, or more frequently if events or changes in circumstances indicate the asset may be impaired. The Company’s trade names, spectrum and licenses are expected to generate cash flows indefinitely.

Goodwill is recorded when the cost of an acquired business exceeds the amounts assigned to the assets acquired and liabilities assumed. The net assets and results of operations of an acquired entity are included in the Company’s consolidated financial statements from the acquisition date. Goodwill is not amortized but is tested for impairment annually or upon the occurrence of certain events.

Business Combinations

The results of businesses acquired in a business combination are included in our consolidated financial statements from the closing date of the acquisition. The Company uses the acquisition method of accounting for business combinations and the purchase price for business combinations is allocated to the assets acquired, including tangible and intangible assets, and assumed liabilities, where applicable, based on their respective fair values at the acquisition date. Determining the fair value of assets acquired, and liabilities assumed requires us to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates and selection of comparable companies. The Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with assets acquired and liabilities assumed in a business combination. Acquisition-related costs are expensed as incurred. For acquisitions achieved in stages, the previously held equity interests are remeasured to fair value at the acquisition date, with any resulting gain or loss recognized in earnings.

3. Cash and Cash Equivalents

The following table presents the Company’s cash and cash equivalents:

4. Intangible Assets and Goodwill

Intangible Assets

The following tables present identifiable intangible assets:

Amortization expense was $6.0 million and $1.0 million for the three months ended September 30, 2026 and September 30, 2025, respectively, and $10.2 million and $3.0 million for the nine months ended September 30, 2026 and September 30, 2025, respectively. The increases to amortization expense during the three and nine months ended September 30, 2026 were due to the acquisition of Aireon Holdings LLC (“Aireon Holdings”) (see Note 11), resulting in $285.1 million of definite life intangible assets.

Goodwill

During the nine months ended September 30, 2026, the Company acquired Aireon Holdings (see Note 11), resulting in additional goodwill of $167.2 million. The Company’s goodwill balance as of September 30, 2026 and December 31, 2025 was $266.1 million and $98.9 million, respectively.

5. Debt

Term Loan and Revolving Facility

Pursuant to the Amended and Restated Credit Agreement, dated as of September 20, 2023, by and among Iridium Holdings LLC, the Company 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”) the Company obtained a term loan in an original aggregate principal amount equal to $1,500.0 million on September 20, 2023 (the “September 2023 Term Loan”), issued at a price equal to 99.75% of its face value. The Credit Agreement also provides for a $100.0 million revolving credit facility (the “Revolving Facility”). The Term Loan (as defined below) and the Revolving Facility mature in September 2030 and September 2028, respectively. During the year ended December 31, 2024, the Company borrowed an additional aggregate $325.0 million in term loans, comprised of $125.0 million on March 25, 2024 (the “March 2024 Term Loan”), issued at a price equal to 99.875% of its face value, and $200.0 million on July 30, 2024 (the “July 2024 Term Loan,” together with the September 2023 Term Loan and the March 2024 Term Loan, the “Term Loan”), issued at 99.0% of its face value. The additional amounts borrowed are fungible with the September 2023 Term Loan and have the same maturity date, interest rate, and other terms as the September 2023 Term Loan.

The proceeds from the March 2024 Term Loan were used for the acquisition of Satelles, Inc. on April 1, 2024. In March 2025 and April 2025, the Company drew down $20.0 million and $30.0 million on its Revolving Facility, respectively, for general corporate purposes, all of which was repaid prior to December 31, 2025. On July 1, 2026, the Company drew down $100.0 million on its Revolving Facility, the proceeds of which were used for the acquisition of Aireon Holdings (see Note 11). During the third quarter of 2026, the Company repaid $50.0 million on the Revolving Facility and $50.0 million remained outstanding as of September 30, 2026.

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 Secured Overnight Financing Rate (“SOFR”) plus 2.25%, with a 0.75% SOFR floor. If the Transaction (as defined in Note 15) closes, solely from and after the closing of the Transaction, the Term Loan will again be repriced, as further described below. The Company typically selects 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 approximately $18.3 million per annum (one percent of the full principal amount of the Term Loan following the additional Term Loan amounts borrowed in 2024), 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.

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 the Company had a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of less than 3.5 to 1.0.

The Credit Agreement restricts the Company’s 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 the Company’s excess cash flow (as defined in the Credit Agreement) in the event the Company’s net leverage ratio rises above 3.5 to 1.0. The Company’s 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, the Company was below the specified leverage ratio and therefore the mandatory prepayment sweep was not required.

The Credit Agreement contains no financial maintenance covenants with respect to the Term Loan. With respect to the Revolving Facility, the Credit Agreement requires the Company to maintain a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of no greater than 6.25 to 1.00 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, the Company was in compliance with all covenants.

On September 15, 2026, the Company entered into an amendment (the “Fourth Amendment”) to the Credit Agreement that, among other things, (i) provides that the Transaction (as defined in Note 15) 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 loans outstanding under the Credit Agreement 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 the Company’s 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 Term Loan prepaid, and (vi) makes certain other amendments that 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 (as defined below) 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.

Aireon Term Loan and Credit and Guaranty Agreement

On May 13, 2026, the Company 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”), the Company, through its wholly owned subsidiary, Iridium Monitor Holdings LLC (“Iridium Monitor Holdings”), closed its acquisition of Aireon Holdings, acquiring the remaining 60.5% of equity interests in Aireon Holdings that the Company did not already own (the “Aireon Closing”).

In connection with the Aireon Closing, on July 2, 2026, the Company entered into a Parent Guaranty Agreement (the “Parent Guaranty”), pursuant to which the Company 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”). The Aireon Credit Agreement provides for a term loan in an aggregate original principal amount equal to $175 million (the “Aireon Term Loan”), which bears interest at a per annum rate equal to, at Aireon’s option, either (i) SOFR plus a margin of 6.25% or (ii) 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 (x) 3.00% of the aggregate principal amount of Aireon Term Loan 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 Loan 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 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 on October 10, 2028 with the balance due.

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.

Additionally, 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 (the “Aireon Closing Loan” and together with the Aireon Term Loan, the “Aireon Loans”), bearing no interest, and maturing one year following the Aireon Closing Date, to fund the deferred portion of the purchase price. The Aireon Closing Loan is secured by a first priority lien on the equity interests of Aireon Holdings and other intermediate holding company entities. The Aireon Closing Loan was recorded at $172.8 million, net of $10.6 million of original issue discount to be amortized through the maturity date.

As of each of September 30, 2026 and December 31, 2025, the Company reported an aggregate of $2,109.5 million and $1,774.7 million, respectively, in borrowings under the Term Loan and the Aireon Loans. This amount does not include $20.1 million and $14.2 million of net unamortized deferred financing costs as of September 30, 2026 and December 31, 2025, respectively. The net principal balance in borrowings in the accompanying consolidated balance sheets as of September 30, 2026 and December 31, 2025 amounted to $2,089.3 million and $1,760.6 million, respectively. As of September 30, 2026 and December 31, 2025, based upon recent trading prices (Level 2 - market approach), the fair value of the Company’s borrowings under the Term Loan was $1,771.4 million and $1,734.8 million, respectively.

Interest on Debt

Total interest incurred includes amortization of deferred financing fees and capitalized interest. The following table presents the interest and amortization of deferred financing fees related to the Term Loan and Aireon Loans:

At each of September 30, 2026 and December 31, 2025, accrued interest on the Term Loan was $0.3 million.