Iridium Communications Inc.
For the period ended Mar 31, 2025. Filed Apr 22, 2025.
View on SEC.govAbout this filing
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.
Mar 31, 2025 · Filed Apr 22, 2025
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 2024-09-30; filed 2024-10-17.
0001628280-24-042983
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-22.
0001628280-25-018712
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 129 previous paragraphs and 99 current paragraphs.
59 unchanged; 30 reworded; 10 added; 34 removed; 6 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 6 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 (10)
Current report
(1)Billable subscriber numbers shown are at the end of the respective period.
Current report
(1)Billable subscriber numbers shown are at the end of the respective period.
Current report
Depreciation and amortization expense increased by $1.9 million, or 4%, for the quarter ended March 31, 2025, compared to the prior year period, as some of the on-orbit spares launched in the second quarter of 2023 were placed in to service in the first quarter of 2025, and increased amortization related to customer relationships acquired from Satelles.
Current report
Interest expense, net increased $1.2 million, or 6%, for the three months ended March 31, 2025, compared to the prior year quarter primarily reflecting the higher average outstanding debt balance, offset in part by the $1.6 million in fees expensed in connection with the additional Term Loan amounts borrowed in the first quarter of 2024.
Current report
Other Income (Expense), net
Current report
Income Tax Expense
Current report
For the three months ended March 31, 2025, our income tax expense was $5.8 million, compared to $7.9 million for the prior year period. The decrease in income tax expense is primarily related to increased tax benefit from the deduction for foreign derived intangible income and U.S. tax credits, partially offset by decreased tax expense associated with stock compensation and nondeductible executive compensation.
Current report
Net Income
Current report
Net income was $30.4 million for the three months ended March 31, 2025, compared to $19.7 million for the prior year period. The $10.8 million improvement in net income was primarily the result of the increases in service and engineering and support services revenues, as described above.
Current report
Net cash provided by operating activities for the three months ended March 31, 2025 decreased by $10.3 million from the prior year period. Working capital decreased by approximately $17.5 million, primarily due to higher cash outflows associated with cash incentive, offset in part by inventory and timing of cash receipts, including accounts receivable and recognition of deferred revenue for projects and Satelles. These changes were offset in part by increased net income.
Removed paragraphs (34)
Previous report
Cost of subscriber equipment remained relatively flat for the three months ended September 30, 2024 compared to the prior year period primarily due to an increase in the volume of handset sales, offset in part by the decrease in Short Burst Data sales, which was in line with the change in equipment revenue for the same period, as described above. Subscriber equipment costs remained consistent, which did not align to the increase in subscriber equipment revenue primarily due to product mix and a decrease in inventory component costs.
Previous report
Depreciation and amortization expense decreased by $25.7 million, or 33%, for the quarter ended September 30, 2024 compared to the prior year period. In the fourth quarter of 2023, we updated our estimate of the satellites’ remaining useful lives based on the health of the constellation, resulting in an extension of the useful lives from 12.5 years to 17.5 years and a reduction of quarterly depreciation expense as compared to periods prior to the fourth quarter of 2023. As a result of this change in estimate, we expect depreciation expense to be approximately $83.3 million lower for the full year 2024 as compared to the full year 2023.
Previous report
Interest expense, net decreased $10.4 million, or 30%, for the three months ended September 30, 2024 compared to the prior year period. We incurred $14.7 million of fees in connection with our Term Loan refinancing in September 2023, compared to $2.2 million of fees that were incurred in connection with our increased Term Loan in the third quarter of 2024. These decreases were offset in part primarily by the increases in the average outstanding debt balance following the additional $200.0 million in Term Loan in July 2024 and $125.0 million in March 2024.
Previous report
Income Tax Benefit (Expense)
Previous report
For the three months ended September 30, 2024, our income tax expense was $6.0 million, compared to income tax benefit of $6.0 million for the prior year period. The increase in income tax expense was primarily related to the increase in pre-tax book income in 2024 as compared to 2023.
Previous report
Net Income (Loss)
Previous report
Net income was $24.4 million for the three months ended September 30, 2024, compared to a net loss of $1.6 million for the prior year period. The $26.1 million increase in net income was primarily the result of the $25.7 million decrease in depreciation expense, the $15.2 million increase in total revenue and the $10.4 million decrease in interest expense, net, offset in part by the $10.6 million increase in selling, general and administrative expense and the $12.0 million increase in income tax expense.
Previous report
Revenue
Previous report
Commercial Service Revenue
Previous report
For the nine months ended September 30, 2024, total commercial services revenue increased $24.5 million, or 7%, from the prior year period primarily driven by increases in IoT and voice and data service revenue. Commercial IoT revenue increased $19.8 million, or 19%, for the nine months ended September 30, 2024, compared to the prior year period, driven by a 14% increase in IoT billable subscribers, largely due to strength in personal communication devices and a new contract with a large customer executed in the first quarter of 2024. Commercial voice and data revenue increased $5.5 million, or 3%, from the prior year period primarily due to an increase in billable subscribers. These increases were offset in part by a decrease of $0.5 million, or 1%, in broadband revenue compared to the prior year period and a decrease of $0.3 million, or 1%, in hosted payload and other data service revenue compared to the prior year period. The decrease in hosted payload and other data service revenue was primarily due to decreased hosted payload revenue recognition resulting from the change in the estimated useful lives of our satellites in the fourth quarter of 2023, offset in part by increases in other data service revenue including Satelles revenue.
Previous report
Government Service Revenue
Previous report
Subscriber Equipment Revenue
Previous report
Subscriber equipment revenue decreased $19.7 million, or 22%, for the nine months ended September 30, 2024, compared to the prior year period, primarily due to a decrease in the volume of handset sales, offset in part by an increase in Short Burst Data sales. As previously disclosed, we expect 2024 equipment sales to be lower than in 2023 and more in line with periods prior to 2022.
Previous report
Engineering and Support Service Revenue
Previous report
Engineering and support service revenue increased $16.9 million, or 24%, for the nine months ended September 30, 2024 compared to the prior year period, primarily due to increased work under certain government projects, including the SDA contract, offset in part by decreases in commercial engineering projects. As noted above, we expect engineering and support service revenue, as well as associated expenses, to be generally higher than in years prior to 2023 throughout the life of the SDA contract.
Previous report
Operating Expenses
Previous report
Cost of services (exclusive of depreciation and amortization) increased by $16.3 million, or 14%, for the nine months ended September 30, 2024, compared to the prior year period primarily as a result of an increase in work under certain government engineering contracts, including the SDA contract, as noted above, and higher satellite operation costs.
Previous report
Cost of Subscriber Equipment
Previous report
Research and Development
Previous report
Research and development expenses increased by $5.4 million, or 37%, for the nine months ended September 30, 2024, compared to the prior year period, due to increased spending on device-related features for our network, including Project Stardust, as noted above.
Previous report
Selling, General and Administrative
Previous report
Depreciation and Amortization
Previous report
Depreciation and amortization expense decreased by $115.5 million, or 43%, compared to the prior year period primarily due to the change in the estimate of the useful lives of our satellites in the fourth quarter of 2023. Additionally, we wrote off our remaining ground spare satellite in the second quarter of 2023 following completion of on-orbit testing, which resulted in accelerated depreciation expense of $37.5 million. No write-offs occurred during the nine months ended September 30, 2024.
Previous report
Other Expense
Previous report
Interest Expense, Net
Previous report
Interest expense, net decreased $2.6 million for the nine months ended September 30, 2024 compared to the prior year period, primarily related to the decrease in fees paid in connection with changes to the Term Loan. In September 2023, we paid $14.7 million of fees incurred in connection with our Term Loan refinancing. In 2024, we incurred $5.7 million of fees in connection with the additional debt and repricing, that are included in interest expense, net. These decreases in interest expense were offset in part by interest incurred on the increase in the average outstanding debt balance.
Previous report
Income Tax Benefit (Expense)
Previous report
For the nine months ended September 30, 2024, our income tax expense was $18.5 million, compared to income tax benefit of $16.7 million for the prior year period. The increase in income tax expense was primarily related to the impact of stock compensation tax expense and nondeductible executive compensation plus the increase in pre-tax book income in 2024 as compared to 2023.
Previous report
Gain (Loss) on Equity Method Investments
Previous report
For the nine months ended September 30, 2024, our gain on equity method investments was $15.7 million, primarily as a result of the acquisition of Satelles, as we recorded a $19.8 million gain on our previous equity method investment in Satelles, offset in part by the portion of losses recorded on other equity method investments. For the nine months ended September 30, 2023, our loss on equity method investments was $4.3 million, reflecting the portion of losses recorded on equity method investments, including Satelles, during the period.
Previous report
Net Income (Loss)
Previous report
Net income was $76.4 million for the nine months ended September 30, 2024, compared to a net loss of $22.6 million for the prior year period. The $99.0 million improvement primarily resulted from the $115.5 million decrease in depreciation expense, the $21.7 million increase in total revenue and the $20.0 million increase in gain on equity method investments, primarily as a result of the acquisition of Satelles as described above. These improvements were offset in part by the $35.2 million increase in income tax expense and the $24.3 million increase in other operating expenses.
Previous report
We entered into an interest rate cap contract, or the Cap, which had an effective date of December 2021. The Cap manages our exposure to interest rate movements on a portion of the Term Loan through November 2026. The Cap, as modified to date, currently provides us with the right to receive payment from the counterparty if one-month SOFR exceeds 1.436%, and carried a notional amount of $1.0 billion as of September 30, 2024 and December 31, 2023.
Previous report
Net cash provided by operating activities for the nine months ended September 30, 2024 increased by $44.1 million from the prior year period, primarily due to an increase in working capital of approximately $40.6 million. This increase was mainly the result of changes in inventory, offset by corresponding decreases in accounts payable and accrued expenses. In 2023, we replenished finished goods and component inventory, including last time buys.
Reworded paragraphs (30)
Previous wording
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking statements include those that express plans, anticipation, intent, contingencies, goals, targets or future development or otherwise are not statements of historical fact. Without limiting the foregoing, the words “believe,” “anticipate,” “plan,” “expect,” “intend” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on our current expectations and projections about future events, and they are subject to risks and uncertainties, known and unknown, that could cause actual results and developments to differ materially from those expressed or implied in such statements. The important factors described under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed on February 15, 2024, as updated and supplemented by this Form 10-Q, could cause actual results to differ materially from those indicated by forward-looking statements made herein. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Current wording
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking statements include those that express plans, anticipation, intent, contingencies, goals, targets or future development or otherwise are not statements of historical fact. Without limiting the foregoing, the words “believe,” “anticipate,” “plan,” “expect,” “intend” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on our current expectations and projections about future events, and they are subject to risks and uncertainties, known and unknown, that could cause actual results and developments to differ materially from those expressed or implied in such statements. The important factors described under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed on February 13, 2025, could cause actual results to differ materially from those indicated by forward-looking statements made herein. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Previous wording
On April 1, 2024, we acquired Satelles, Inc., or Satelles, a provider of satellite-based time and location services that complement and protect GPS and other GNSS systems. This acquisition is intended to support our long-term business objectives.
Current wording
In the second quarter of 2024, we acquired Satelles, Inc., or Satelles, a provider of highly secure, satellite-based position, navigation and timing (PNT) services that complement and protect GPS and other Global Navigation Satellite System, or GNSS, reliant systems. Time synchronization and location data play an important role in the global economy, particularly for major industries supported by critical infrastructure, such as financial services, telecommunications, cyber-security and transportation. We believe the acquisition of Satelles’s business could generate substantial growth in our service revenue, as well as incremental equipment and engineering services revenue over the coming years from both government and commercial customers.
Previous wording
We sell our products and services to commercial end-users through a wholesale distribution network, encompassing approximately 110 service providers, 305 value-added resellers, or VARs, and 85 value-added manufacturers, or VAMs, who either sell 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 targeting specific lines of business.
Current wording
We sell our products and services to commercial end-users through a wholesale distribution network, encompassing approximately 110 service providers, 300 value-added resellers, or VARs, and 85 value-added manufacturers, or VAMs, who either sell 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 targeting specific lines of business.
Previous wording
At September 30, 2024, we had approximately 2,482,000 billable subscribers worldwide, an increase of 246,000, or 11%, from approximately 2,236,000 billable subscribers as of September 30, 2023. We have a diverse customer base, with end users in land mobile, Internet of Things, or IoT, maritime, aviation and government.
Current wording
At March 31, 2025, we had approximately 2,443,000 billable subscribers worldwide, an increase of 110,000, or 5%, from approximately 2,333,000 billable subscribers as of March 31, 2024. We have a diverse customer base, with end users in land mobile, Internet of Things, or IoT, maritime, aviation and government.
Previous wording
•reliance on a global supply chain, including single-source suppliers for the manufacture of most of our subscriber equipment and for some of the components required in the manufacture of our end-user subscriber equipment and our ability to purchase component parts that are periodically subject to shortages resulting from surges in demand, natural disasters or other events, including a global pandemic; and
Current wording
•reliance on a global supply chain, including single-source suppliers for the manufacture of most of our subscriber equipment and for some of the components required in the manufacture of our end-user subscriber equipment and our ability to purchase component parts that are periodically subject to shortages resulting from surges in demand, natural disasters or other events, including global pandemics and the imposition of tariffs; and
Previous wording
For the three months ended September 30, 2024, total commercial services revenue increased $7.8 million, or 6%, from the prior year period primarily as a result of increases in IoT, voice and data, and hosted payload and other data service revenue. Commercial IoT revenue increased $5.2 million, or 14%, for the three months ended September 30, 2024, compared to the same period of the prior year, primarily driven by a 14% increase in billable subscribers, largely due to strength in personal communication devices. Commercial voice and data revenue increased $1.5 million, or 3%, for the three months ended September 30, 2024, compared to the same period of the prior year, due primarily to an increase in billable subscribers. Hosted payload and other data service revenue also contributed with an increase of $1.4 million, or 9%, primarily due to increases in other data service revenue, including Satelles revenue, that was not present in the prior year, offset in part by decreased hosted payload revenue recognition resulting from the change in the estimated useful lives of our satellites in the fourth quarter of 2023.
Current wording
For the three months ended March 31, 2025, total commercial services revenue increased $5.4 million, or 4%, from the prior year period primarily as a result of increases in IoT, voice and data service revenue and hosted payload and other data revenue. Commercial IoT revenue increased $4.4 million, or 11%, for the three months ended March 31, 2025, compared to the same period of the prior year, driven by a 7% increase in billable subscribers primarily in users of personal communications devices, and an increase in the contract with a large customer that was executed in the first quarter of 2024. Commercial voice and data revenue increased $0.9 million, or 2%, for the three months ended March 31, 2025, compared to the same period of the prior year, primarily due to an increase in billable subscribers. Hosted payload and other data service revenue increased $0.9 million, or 7%, compared to the prior year period, primarily due to increases in other data service revenue, including Satelles revenue, which increased as a result of the acquisition after the first quarter of 2024. Commercial broadband revenue decreased $0.8 million, or 6%, for the three months ended March 31, 2025, compared to the prior year period, primarily due to a decrease ARPU reflecting the increased prevalence of usage of our service as a companion service and the conversion of customers to other plans.
Previous wording
We provide airtime and airtime support to the U.S. government and other authorized customers pursuant to our Enhanced Mobile Satellite Services, or 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 fee is not based on subscribers or usage, allowing an unlimited number of users access to these services. For the three months ended September 30, 2024, revenue was $26.5 million, consistent with the prior year. On September 15, 2024, the annual rate increased reflecting a contractual step up in the EMSS contract.
Current wording
We provide airtime and airtime support to U.S. government and other authorized customers pursuant to our Enhanced Mobile Satellite Services, or 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 fee is not based on subscribers or usage, allowing an unlimited number of users access to these services. For the three months ended March 31, 2025, revenue increased slightly, reflecting a contractual step up in the EMSS contract on September 15, 2024.
Previous wording
Subscriber equipment revenue increased by $1.7 million, or 9%, for the three months ended September 30, 2024, compared to the prior year period, primarily due to an increase in the volume of handset sales, offset in part by a decrease in Short Burst Data® sales. As previously disclosed, we expect 2024 equipment sales to be lower than in 2023 and more in line with periods prior to 2022.
Current wording
Subscriber equipment revenue decreased by $1.7 million, or 7%, for the three months ended March 31, 2025, compared to the prior year period, primarily due to a decrease in volume of Short Burst Data® devices.
Previous wording
Engineering and support service revenue increased by $5.5 million, or 22%, for the three months ended September 30, 2024 compared to the prior year period, primarily due to increased work under certain government contracts, predominantly the contract awarded by the Space Development Agency, or the SDA. Based on the SDA contract, we expect engineering and support service revenue, as well as associated expenses, to be generally higher than in years prior to 2023 throughout the life of the SDA contract.
Current wording
Engineering and support service revenue increased by $7.0 million, or 23%, for the three months ended March 31, 2025, compared to the prior year period, primarily due to increased work under certain government contracts.
Previous wording
Cost of services (exclusive of depreciation and amortization) increased by $2.5 million, or 6%, for the three months ended September 30, 2024 compared to the prior year period, primarily as a result of the increase in work under certain government projects, including the SDA contract, as noted above.
Current wording
Cost of services (exclusive of depreciation and amortization) increased by $2.3 million, or 5%, for the three months ended March 31, 2025 from the prior year period, primarily as a result of the increase in work under certain government projects, as noted above.
Previous wording
Cost of subscriber equipment decreased by $15.5 million, or 28%, for the nine months ended September 30, 2024, compared to the prior year period, primarily due to the decrease in volume of handset sales, offset in part by an increase in Short Burst Data sales, which was in line with the change and expectations in equipment revenue for the same period, as noted above, and decreased inventory component costs.
Current wording
Cost of subscriber equipment decreased by $1.0 million, or 7%, for the three months ended March 31, 2025, compared to the prior year period primarily due to the decrease in volume of Short Burst Data device sales, as described above.
Previous wording
Research and development expenses increased by $1.2 million, or 23%, for the three months ended September 30, 2024 compared to the prior year period, due to increased spending on device-related features for our network, including Project Stardust, which is our multi-year project to develop Iridium NTN Direct SM, our standards-based Narrowband-Internet of Things (NB-IoT) and Non-Terrestrial Network (NB-NTN) messaging and SOS capabilities for smartphones, tablets, cars and related consumer applications.
Current wording
Research and development expenses decreased by $1.8 million, or 25%, for the three months ended March 31, 2025, compared to the prior year period based on lower spending on device-related features for our network, including our multi-year project to develop standards-based Narrowband-Internet of Things (NB-IoT) and Non-Terrestrial Network (NB-NTN) messaging and SOS capabilities for smartphones, tablets, cars and related consumer applications.
Previous wording
Selling, general and administrative expenses increased by $18.1 million, or 17%, for the nine months ended September 30, 2024, compared to the prior year period, primarily due to higher headcount-related expenses, including equity compensation costs, as well as costs related to the acquisition of Satelles and certain costs that were previously recorded in cost of services, offset in part by a decrease in stock appreciation rights expense in the current year resulting from changes in our stock valuation between the years and decreased spending related to our channel partner conference which was held in the first quarter of the prior year.
Current wording
Selling, general and administrative expenses decreased by $1.1 million, or 3%, for the three months ended March 31, 2025, compared to the prior year period, primarily due to decreases in headcount costs, including equity compensation costs and in professional fees, including acquisition costs for Satelles in the prior year. These decreases were offset in part by the increased spend related to our channel partner conference held in March 2025 and an increase in stock appreciation rights expense in the current year resulting from changes in our stock valuation between the years.
Previous wording
Other expense, net, was $0.3 million for the nine months ended September 30, 2024, compared to other income, net, of $1.0 million for the prior year period. The variation was primarily the result of changes in foreign currency exchange rates.
Current wording
Other expense, net, was $1.7 million for the three months ended March 31, 2025, compared to immaterial other income, net, for the prior year period, primarily as the result of changes in foreign currency exchange rates.
Previous wording
For the three months ended September 30, 2024, our realized net loss on equity method investments was $0.5 million, compared to a loss of $1.5 million in the prior year period. These reflect the portion of losses recorded on our equity method investments.
Current wording
For the three months ended March 31, 2025, our loss on equity method investments was $0.6 million, compared to $1.6 million in the prior year period. These reflect the portion of losses recorded on our equity method investments, which included Satelles prior to the acquisition on April 1, 2024.
Previous wording
Our primary sources of liquidity are cash provided by operations, cash and cash equivalents and our Revolving Facility. These sources are expected to meet our short-term and long-term liquidity needs for (i) required principal and interest on the Term Loan and Revolving Facility, (ii) capital expenditures, (iii) working capital, (iv) share repurchases under the program authorized by our Board of Directors, and (v) anticipated cash dividend payments to holders of our common stock.
Current wording
Our primary sources of liquidity are cash provided by operations, cash and cash equivalents and our Revolving Facility. These sources are expected to meet our short-term and long-term liquidity needs, including payments for (i) required principal and interest on the Term Loan, which we expect to be $28.6 million of principal, inclusive of the mandatory excess cash flow prepayment in 2025, and based on the current interest rate, approximately $95.0 million in interest, (ii) capital expenditures of approximately $90.0 million in 2025, which we expect to moderate through the end of the decade, (iii) working capital, (iv) potential share repurchases, and (v) anticipated cash dividend payments to holders of our common stock.
Previous wording
As of September 30, 2024, our total cash and cash equivalents balance was $159.6 million, up from $71.9 million as of December 31, 2023. While we borrowed an additional $325.0 million under the Term Loan during the nine months ended September 30, 2024, and generated cash flows from operations, we used cash to complete the acquisition of Satelles, repurchased $284.6 million in our common stock (including related taxes), paid dividends of $49.1 million, and invested $45.6 million in capital expenditures during the nine months ended September 30, 2024.
Current wording
As of March 31, 2025, our total cash and cash equivalents balance was $50.9 million, down from $93.5 million as of December 31, 2024. While we borrowed $20.0 million under the Revolving Facility during the three months ended March 31, 2025, and generated cash flows from operations, we used cash of $70.5 million to repurchase shares of our common stock, $15.7 million to pay dividends, and $24.5 million for capital expenditures.
Previous wording
Pursuant to a credit agreement, as amended to date, or the Credit Agreement, we previously entered into a term loan totaling $1,500.0 million, or the Term Loan, issued at a price equal to 99.75%, and an accompanying $100.0 million revolving loan, or the Revolving Facility. The maturity date of the Term Loan is in September 2030. We borrowed an additional $125.0 million under the Term Loan on March 25, 2024 and $200.0 million on July 30, 2024. The additional amounts borrowed are fungible with the original $1,500.0 million, and have the same maturity date, interest rate and other terms. The additional $125.0 million was issued at a price equal to 99.875% of its face value, while the additional $200.0 million was issued at a price equal to 99.0% of its face value.
Current wording
Pursuant to a credit agreement, as amended and restated to date, or the Credit Agreement, we previously entered into a term loan totaling $1,500.0 million, or the Term Loan, issued at a price equal to 99.75%, and an accompanying $100.0 million revolving loan, or the Revolving Facility. The maturity date of the Term Loan is in September 2030. We borrowed an additional $125.0 million under the Term Loan in March 2024 and $200.0 million in July 2024. The additional amounts borrowed are fungible with the original $1,500.0 million, and have the same maturity date, interest rate and other terms. The additional $125.0 million was issued at a price equal to 99.875% of its face value, while the additional $200.0 million was issued at a price equal to 99.0% of its face value.
Previous wording
The March 2024 additional Term Loan borrowings were used to complete the acquisition of Satelles, Inc. on April 1, 2024. In April 2024, we drew $50.0 million under our Revolving Facility for general corporate purposes, including the funding of repurchases of our common stock. This amount was repaid with the expansion of the Term Loan in July 2024, and no amounts were outstanding under the Revolving Facility as of September 30, 2024. The remaining proceeds of the Term Loan expansion in 2024 have been and are expected to be used for general corporate purposes, including share repurchases.
Current wording
The March 2024 additional Term Loan borrowings were used to complete the acquisition of Satelles, Inc. on April 1, 2024. In April 2024, we drew $50.0 million under our Revolving Facility for general corporate purposes, including the funding of repurchases of our common stock. This amount was repaid with the expansion of the Term Loan in July 2024. The remaining proceeds of the Term Loan expansion in 2024 were used for general corporate purposes, including share repurchases. In March 2025, we drew $20.0 million under our Revolving Facility for general corporate purposes, which amount remained outstanding as of March 31, 2025.
Previous wording
As of September 30, 2024 and December 31, 2023, we had aggregate borrowings of $1,812.3 million and $1,500.0 million, respectively, under the Term Loan. These amounts do not give effect to $17.5 million of net unamortized deferred financing costs at the end of each period. The principal balance in borrowings, net of the unamortized deferred financing costs, as of September 30, 2024 and December 31, 2023 amounted to $1,794.8 million and $1,482.5 million, respectively. As of September 30, 2024 and December 31, 2023, based upon recent trading prices (Level 2 - market approach), the fair value of our net borrowings under the Term Loan was $1,782.9 million and $1,506.6 million, respectively.
Current wording
As of March 31, 2025 and December 31, 2024, we reported an aggregate of $1,803.2 million and $1,807.7 million in borrowings under the Term Loan, respectively. These amounts do not include $16.2 million and $16.9 million of net unamortized deferred financing costs as of March 31, 2025 and December 31, 2024, respectively. The net principal balance in borrowings in the accompanying consolidated balance sheets as of March 31, 2025 and December 31, 2024 amounted to $1,787.0 million and $1,790.9 million, respectively. As of March 31, 2025 and December 31, 2024, the fair value of our borrowings under the Term Loan was $1,779.5 million and $1,802.1 million, respectively.
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, and a commitment fee of 0.5% per annum on the undrawn amount, which was reduced to 0.375% in the first quarter of 2024 because we had a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of less than 3.5 to 1. The Revolving Facility has a maturity date in September 2028.
Current 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 may be reduced to 0.375% if we have a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of less than 3.5 to 1. The Revolving Facility has a maturity date in September 2028.
Previous 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 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. As of September 30, 2024, the aggregate exposure under the Revolving Facility was less than 35%. The Credit Agreement contains other customary representations and warranties, affirmative and negative covenants, and events of default. We were in compliance with all financial covenants as of September 30, 2024.
Current wording
The Credit Agreement contains no financial maintenance covenants, with respect to the Term Loan. 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. As of March 31, 2025, the aggregate exposure under the Revolving Facility was less than 35%. The Credit Agreement contains other customary representations and warranties, affirmative and negative covenants, and events of default. We were in compliance with all covenants under the Credit Agreement as of March 31, 2025.
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, or EBITDA, 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 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 consolidated first lien net leverage ratio rises above 3.5 to 1 as of the end of our fiscal year. As of December 31, 2023, we were below the specified leverage ratio, and a mandatory prepayment sweep was therefore not required. The Credit Agreement permits repayment, prepayment, and repricing transactions.
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, or EBITDA, 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 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. Our mandatory excess cash flow prepayment, as specified in the Credit Agreement, was $28.6 million as of December 31, 2024. This amount will be paid in the second quarter of 2025 and will be applied to our required quarterly principal payments. As such, it was classified as short-term secured debt on our condensed consolidated balance sheet as of March 31, 2025.
Previous wording
As of September 30, 2024, we had non-cancelable purchase obligations of approximately $10.9 million for inventory purchases with Benchmark, our primary third-party equipment supplier, which was a decrease of $10.6 million from the end of 2023 primarily due to recovery from supply chain constraints in prior years. These purchase obligations to Benchmark are due within the next twelve months.
Current wording
As of March 31, 2025, we had non-cancelable purchase obligations of approximately $12.0 million for inventory purchases with Benchmark, our primary third-party equipment supplier. Our purchase obligations, all of which are due during 2025, did not change materially from the end of 2024.
Previous wording
Our only material long-term contractual cash requirement is the repayment of the remaining principal amount under the Term Loan upon its maturity in 2030, which is expected to be $1,711.9 million. We plan to refinance this amount at or prior to maturity.
Current wording
Our only material long-term cash requirement is the repayment of the remaining principal amount under the Term Loan upon its maturity in 2030, which is expected to be $1,702.8 million. We expect to refinance this amount at or prior to maturity.
Previous wording
Total dividends paid during the nine months ended September 30, 2024 were $49.1 million. While we expect to continue regular cash dividends, which began in 2023, any future dividends declared will be at the discretion of our Board of Directors and will depend upon our results of operations, financial condition and cash requirements, as well as such other factors our Board of Directors deems relevant.
Current wording
Total dividends paid during the three months ended March 31, 2025 and March 31, 2024 were $15.7 million and $16.1 million, respectively. While we expect to continue regular cash dividends, any future dividends declared will be at the discretion of our Board of Directors and will depend, among other factors, upon our results of operations, financial condition and cash requirements, as well as such other factors our Board of Directors deems relevant. The Board of Directors plans to increase the quarterly dividend to $0.15 per share starting with the third quarter 2025 dividend.
Previous wording
Net cash used in investing activities for the nine months ended September 30, 2024 increased by $89.1 million as compared to the prior year period, primarily as a result of our acquisition of Satelles on April 1, 2024, offset in part by a decrease in capital expenditures compared to the prior year. We expect our capital expenditures to average approximately $60.0 million per year through 2030.
Current wording
Net cash used in investing activities for the three months ended March 31, 2025 increased by $10.0 million as compared to the prior year period, primarily as a result of increased capital expenditures, including costs associated with NB-IoT, which we expect to continue for the remainder of 2025.
Previous wording
Cash Flows Used in Financing Activities
Current wording
Cash Flows Provided by (Used in) Financing Activities
Previous wording
Net cash used in financing activities for the nine months ended September 30, 2024 decreased by $232.2 million compared to the prior year period primarily due to the additional $325.0 million in borrowings under the Term Loan, offset in part by increased repurchases of our common stock.
Current wording
Net cash used in financing activities for the three months ended March 31, 2025 increased by $126.6 million compared to the prior year period primarily due to the additional borrowings under the Term Loan of $125.0 million in the prior year period compared to a draw of $20.0 million on the Revolving Credit Facility in 2025 and increased spend on share repurchases in the first quarter of 2025 as compared to 2024.
Previous wording
Our results of operations have been subject to seasonal usage changes for commercial customers, and we expect that our results will be affected by similar seasonality going forward. March through October are typically the peak months for commercial voice services revenue and related subscriber equipment sales. U.S. government revenue and commercial IoT revenue have been less subject to seasonal usage changes.
Current wording
Our results of operations have been subject to seasonal usage changes for commercial customers, and we expect that our results will be affected by similar seasonality going forward. March through October are typically the peak months for commercial voice services revenue and related subscriber equipment sales. In December 2024, a large IoT customer began to phase out its annual retail pricing plans. As a result, that customer’s annual billable subscribers will move to monthly plans, which we expect to increase seasonality in billable subscribers. We expect revenue to remain unaffected due to the fixed-price nature of our contract with this customer for 2025. U.S. government revenue and commercial IoT revenue have been less subject to seasonal usage changes.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Selling, general and administrative expenses increased by $10.6 million, or 32%, for the three months ended September 30, 2024 compared to the prior year period, due primarily to costs related to the acquisition of Satelles, increased professional fees including stock appreciation rights expense in the current year resulting from changes in our stock valuation between the years, higher headcount costs, including equity compensation costs, and certain costs that were previously recorded in cost of services.
Previous report — wording carried elsewhere
Comparison of Our Results of Operations for the Nine Months Ended September 30, 2024 and 2023
Previous report — wording carried elsewhere
(2)ARPU is calculated by dividing revenue in the respective period by the average of the number of billable subscribers at the beginning of the period and the number of billable subscribers at the end of the period and then dividing the result by the number of months in the period. Billable subscriber and ARPU data is not applicable for hosted payload and other data service revenue items.
Previous report — wording carried elsewhere
(3)Commercial broadband service consists of Iridium OpenPort and Iridium Certus broadband services.
Previous report — wording carried elsewhere
We provide airtime and airtime support to the U.S. government and other authorized customers pursuant to our EMSS contract. Under the terms of this agreement, which we entered into in September 2019, authorized customers utilize specified Iridium airtime services provided through the U.S. government’s dedicated gateway. The fee is not based on subscribers or usage, allowing an unlimited number of users access to these services. For the nine months ended September 30, 2024, revenue remained consistent with the prior year period. As noted above, the annual rate increased on September 15, 2024, reflecting a contractual step up in accordance with the EMSS contract.
Previous report — wording carried elsewhere
Cost of Services (exclusive of depreciation and amortization)