Iridium (NASDAQ: IRDM) Q1 2026 income slips as costs rise
Filing Impact
Filing Sentiment
Form Type
10-Q
Iridium Communications reported Q1 2026 revenue of $219.1M, up slightly from $214.9M a year earlier, as higher services and government engineering work offset weaker equipment sales. Services revenue rose to $158.0M, led by IoT and voice and data, while engineering and support services reached $40.8M.
Net income declined to $21.6M from $30.4M as selling, general and administrative expenses increased and the tax rate moved higher, producing diluted EPS of $0.20 versus $0.27. The company generated $71.6M in operating cash flow, ended the quarter with $111.6M in cash and a Term Loan balance of about $1.8B, and paid a quarterly dividend of $0.15 per share. Total billable subscribers grew 5% year over year to approximately 2.56 million.
Positive
- None.
Negative
- None.
Key Figures
Total revenue: $219.1M
Net income: $21.6M
Diluted EPS: $0.20
+5 more
8 metrics
Total revenue
$219.1M
Q1 2026 vs $214.9M in Q1 2025 (+2%)
Net income
$21.6M
Q1 2026 vs $30.4M in Q1 2025 (-29%)
Diluted EPS
$0.20
Q1 2026 vs $0.27 in Q1 2025
Operating cash flow
$71.6M
Q1 2026 vs $61.1M in Q1 2025
Cash and cash equivalents
$111.6M
Balance at March 31, 2026
Term Loan borrowings
$1.77B
Gross principal outstanding at March 31, 2026
Billable subscribers
2.56M
As of March 31, 2026; up 5% year over year
Quarterly dividend
$0.15/share
Paid in Q1 2026; total $16.5M
Key Terms
Enhanced Mobile Satellite Services, Term Loan, Secured Overnight Financing Rate (SOFR), cash flow hedge, +1 more
5 terms
Enhanced Mobile Satellite Services financial
"We provide airtime and airtime support to U.S. government and other authorized customers pursuant to our Enhanced Mobile Satellite Services (“EMSS”) contract."
Term Loan financial
"we previously entered into a term loan totaling $1,500.0 million (the “Term Loan”), issued at a price equal to 99.75%"
A term loan is a type of loan that is borrowed for a set period of time, with a fixed schedule for repaying the money, usually in regular payments. It matters to investors because it represents a company's borrowing costs and financial stability; reliable repayment of these loans can indicate strong financial health, while difficulties may signal potential risks.
Secured Overnight Financing Rate (SOFR) financial
"bears interest at an annual rate equal to the Secured Overnight Financing Rate (“SOFR”) plus 2.25%, with a 0.75% SOFR floor."
A secured overnight financing rate (SOFR) is the interest rate on very short, one‑day loans that are backed by high‑quality collateral (like government bonds), so lenders face less risk. Investors care because SOFR is a widely used benchmark that sets the cost of borrowing and the pricing of loans, bonds and derivatives; think of it as a trusted yardstick for short‑term interest costs that influences returns and valuations across markets.
cash flow hedge financial
"The Company designated the Cap as a cash flow hedge of the variability of the SOFR-based interest payments on the Term Loan."
A cash flow hedge is an accounting label for a contract or arrangement used to offset expected future swings in a company’s cash payments or receipts — for example from variable-rate interest, foreign currency sales, or forecasted purchases. It matters to investors because it aims to smooth future cash and earnings volatility: gains or losses on the hedge are held out of current profit and reported separately until the underlying transaction affects results, much like buying insurance to steady future bills.
Restricted Stock Units (RSUs) financial
"The Company’s RSUs are classified as equity awards because the RSUs will be settled in the Company’s common stock upon vesting."
Restricted stock units (RSUs) are a type of company promise to give employees shares of stock in the future, usually after certain conditions like working for a set time. They are like a gift promised today that you receive later, which can become valuable if the company's stock price goes up. RSUs matter because they are a way companies reward employees and can be a significant part of compensation.
Earnings Snapshot
Total revenue: $219.1M
Q1 2026
Total revenue
$219.1M
+2% YoY
Services revenue
$158.0M
+2% YoY
Engineering and support services revenue
$40.8M
+9% YoY
Subscriber equipment revenue
$20.2M
-13% YoY
Operating income
$50.7M
-16% YoY
Net income
$21.6M
-29% YoY
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the quarterly period ended March 31, 2026
or
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the transition period from ____ to ____
Commission File Number 001-33963
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) | |||||||||||||
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| x | Accelerated Filer | ¨ | |||||||||||||||
| Non-Accelerated Filer | ¨ | Smaller Reporting Company | ¨ | ||||||||||||||
| Emerging Growth Company | ¨ | ||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
The number of shares of the registrant’s common stock, par value $0.001 per share, outstanding as of April 16, 2026 was 105,727,744 .
IRIDIUM COMMUNICATIONS INC.
TABLE OF CONTENTS
| Item No. | Page | |||||||||||||
Part I. Financial Information | ||||||||||||||
| ITEM 1. | Financial Statements: | |||||||||||||
Condensed Consolidated Balance Sheets | 3 | |||||||||||||
Condensed Consolidated Statements of Operations and Comprehensive Income | 4 | |||||||||||||
Condensed Consolidated Statements of Changes in Stockholders’ Equity | 5 | |||||||||||||
Condensed Consolidated Statements of Cash Flows | 6 | |||||||||||||
Notes to Condensed Consolidated Financial Statements | 7 | |||||||||||||
| ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 | ||||||||||||
| ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk | 25 | ||||||||||||
| ITEM 4. | Controls and Procedures | 26 | ||||||||||||
Part II. Other Information | ||||||||||||||
| ITEM 1. | Legal Proceedings | 27 | ||||||||||||
| ITEM 1A. | Risk Factors | 27 | ||||||||||||
| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 27 | ||||||||||||
| ITEM 3. | Defaults Upon Senior Securities | 27 | ||||||||||||
| ITEM 4. | Mine Safety Disclosures | 27 | ||||||||||||
| ITEM 5. | Other Information | 27 | ||||||||||||
| ITEM 6. | Exhibits | 28 | ||||||||||||
Signatures | 29 | |||||||||||||
2
PART I.
Iridium Communications Inc.
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
| March 31, 2026 | December 31, 2025 | ||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Inventory | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Equity method investments | |||||||||||
| Other assets | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and stockholders’ equity | |||||||||||
| Current liabilities: | |||||||||||
| Short-term secured debt | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Deferred revenue | |||||||||||
| Total current liabilities | |||||||||||
| Long-term secured debt, net | |||||||||||
| Deferred income tax liabilities, net | |||||||||||
| Deferred revenue, net of current portion | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ equity: | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive income (loss), net of tax | ( | ||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See notes to unaudited condensed consolidated financial statements.
3
Iridium Communications Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Revenue: | ||||||||||||||
| Services | $ | $ | ||||||||||||
| Subscriber equipment | ||||||||||||||
| Engineering and support services | ||||||||||||||
| Total revenue | ||||||||||||||
| Operating expenses: | ||||||||||||||
| Cost of services (exclusive of depreciation and amortization) | ||||||||||||||
| Cost of subscriber equipment | ||||||||||||||
| Research and development | ||||||||||||||
| Selling, general and administrative | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Total operating expenses | ||||||||||||||
| Operating income | ||||||||||||||
Other expense, net: | ||||||||||||||
| Interest expense, net | ( | ( | ||||||||||||
Other expense, net | ( | ( | ||||||||||||
| Total other expense, net | ( | ( | ||||||||||||
Income before income taxes and loss on equity method investments | ||||||||||||||
Income tax expense | ( | ( | ||||||||||||
Loss on equity method investments | ( | ( | ||||||||||||
Net income | $ | $ | ||||||||||||
| Weighted average shares outstanding - basic | ||||||||||||||
| Weighted average shares outstanding - diluted | ||||||||||||||
| Net income per share - basic | $ | $ | ||||||||||||
| Net income per share - diluted | $ | $ | ||||||||||||
Comprehensive income: | ||||||||||||||
Net income | $ | $ | ||||||||||||
| Foreign currency translation adjustments | ||||||||||||||
Unrealized loss on cash flow hedges, net of tax (see Note 6) | ( | ( | ||||||||||||
Comprehensive income | $ | $ | ||||||||||||
See notes to unaudited condensed consolidated financial statements.
4
Iridium Communications Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Stockholders’ Equity | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at beginning of period | $ | $ | $ | ( | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock options exercised and awards vested | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock withheld to cover employee taxes | ( | — | ( | — | — | ( | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchases and retirements of common stock | — | ( | ( | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends | — | — | ( | — | — | ( | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cumulative translation adjustments | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on cash flow hedges, net of tax | — | — | — | — | ( | ( | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at end of period | $ | $ | $ | ( | $ | ( | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
See notes to unaudited condensed consolidated financial statements.
5
Iridium Communications Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Deferred income taxes | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Stock-based compensation (net of amounts capitalized) | ||||||||||||||
| Amortization of deferred financing fees | ||||||||||||||
Loss on equity method investments | ||||||||||||||
| All other items, net | ||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
| Accounts receivable | ( | ( | ||||||||||||
| Inventory | ||||||||||||||
| Prepaid expenses and other current assets | ( | ( | ||||||||||||
| Other assets | ||||||||||||||
| Accounts payable | ( | ( | ||||||||||||
| Accrued expenses and other current liabilities | ( | |||||||||||||
| Deferred revenue | ( | ( | ||||||||||||
| Other long-term liabilities | ( | ( | ||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Payments on the Term Loan | ( | |||||||||||||
| Borrowings under the Revolving Credit Facility | ||||||||||||||
| Repurchases of common stock | ( | |||||||||||||
| Proceeds from exercise of stock options | ||||||||||||||
| Tax payment upon settlement of stock awards | ( | ( | ||||||||||||
| Payment of common stock dividends | ( | ( | ||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents, and restricted cash | ( | |||||||||||||
Net increase (decrease) in cash and cash equivalents, and restricted cash | ( | |||||||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | ||||||||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | $ | ||||||||||||
| Supplemental cash flow information: | ||||||||||||||
| Interest paid, net of amounts capitalized | $ | $ | ||||||||||||
| Income taxes paid, net | $ | $ | ||||||||||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||
| Property and equipment received but not paid | $ | $ | ||||||||||||
Dividends accrued on common stock | $ | $ | ||||||||||||
| Capitalized stock-based compensation | $ | $ | ||||||||||||
See notes to unaudited condensed consolidated financial statements.
6
Iridium Communications Inc.
Notes to Condensed Consolidated Financial Statements
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 which prioritizes and ranks the level of observability of inputs used in measuring fair value.
7
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.
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. The ROU asset also includes any lease payments made and excludes 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:
| March 31, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
| Finished goods | $ | $ | |||||||||
| Raw materials | |||||||||||
| Inventory valuation reserve | ( | ( | |||||||||
| Total | $ | $ | |||||||||
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
8
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 (customer relationships, patents 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.
3. Cash and Cash Equivalents
The following table presents the Company’s cash and cash equivalents:
| March 31, 2026 | December 31, 2025 | Recurring Fair Value Measurement | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Cash and cash equivalents: | ||||||||||||||||||||
| Cash | $ | $ | ||||||||||||||||||
| Money market funds | Level 2 | |||||||||||||||||||
| Total cash and cash equivalents | $ | $ | ||||||||||||||||||
4. Intangible Assets and Goodwill
Intangible Assets
The following tables present identifiable intangible assets:
| March 31, 2026 | ||||||||||||||||||||||||||
| Useful Life | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | |||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||
| Indefinite life intangible assets: | ||||||||||||||||||||||||||
| Trade names | Indefinite | $ | 21,195 | $ | — | $ | ||||||||||||||||||||
| Spectrum and licenses | Indefinite | 14,030 | — | |||||||||||||||||||||||
| Total | 35,225 | — | ||||||||||||||||||||||||
| Definite life intangible assets: | ||||||||||||||||||||||||||
| Intellectual property | 20 years | ( | ||||||||||||||||||||||||
| Patents | 14 - 20 years | ( | ||||||||||||||||||||||||
| Customer relationships | 12 years | ( | ||||||||||||||||||||||||
| Total | ( | |||||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | ||||||||||||||||||||||
9
| December 31, 2025 | ||||||||||||||||||||||||||
| Useful Life | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | |||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||
| Indefinite life intangible assets: | ||||||||||||||||||||||||||
| Trade names | Indefinite | $ | 21,195 | $ | — | $ | ||||||||||||||||||||
| Spectrum and licenses | Indefinite | 14,030 | — | |||||||||||||||||||||||
| Total | 35,225 | — | ||||||||||||||||||||||||
| Definite life intangible assets: | ||||||||||||||||||||||||||
| Intellectual property | 20 years | ( | ||||||||||||||||||||||||
| Patents | 14 - 20 years | ( | ||||||||||||||||||||||||
| Customer relationships | 12 years | ( | ||||||||||||||||||||||||
| Total | ( | |||||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | ||||||||||||||||||||||
Amortization expense was $2.1 million and $1.0 million for the three months ended March 31, 2026 and March 31, 2025, respectively.
Goodwill
5. Debt
Term Loan and Revolving Facility
Pursuant to a credit agreement (as amended to date, the “Credit Agreement”), the Company previously entered into a term loan totaling $1,500.0 million (as amended and restated, the “Term Loan”), issued at a price equal to 99.75 % of its face value, and an accompanying $100.0 million revolving loan (the “Revolving Facility”). The maturities of the Term Loan and Revolving Facility are in September 2030 and September 2028, respectively. During the year ended December 31, 2024, the Company borrowed an additional $325.0 million under its Term Loan, comprised of $125.0 million on March 25, 2024, issued at a price equal to 99.875 % of its face value, and $200.0 million on July 30, 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.
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.
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. 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.
As of each of March 31, 2026 and December 31, 2025, the Company reported an aggregate of $1,774.7 13.5 million and $14.2 million of net unamortized deferred financing costs as of March 31, 2026 and December 31, 2025, respectively. The net principal balance in borrowings in the accompanying consolidated balance sheets as of March 31, 2026 and December 31, 2025 amounted to $1,761.2 million and $1,760.6 million, respectively. As of March 31, 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 $1,737.0 million and $1,734.8 million, respectively.
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
10
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 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. 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 last three quarters of 2025, and no quarterly principal payment will be required for the first three quarters 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 permits repayment, prepayment, and repricing transactions.
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 if more than 35 % of the Revolving Facility has been drawn. The Credit Agreement contains other customary representations and warranties, affirmative and negative covenants, and events of default. The Company complied with all covenants as of March 31, 2026.
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:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (In thousands) | ||||||||||||||
| Total interest incurred | $ | $ | ||||||||||||
| Amortization of deferred financing fees | $ | $ | ||||||||||||
| Capitalized interest | $ | $ | ||||||||||||
At each of March 31, 2026 and December 31, 2025, accrued interest on the Term Loan was $0.3
6. Derivative Financial Instruments
The Company is exposed to interest rate fluctuations related to the Term Loan. The Company has reduced its exposure to fluctuations in the cash flows associated with changes in the variable interest rate by entering into offsetting positions through the use of interest rate hedges. This will reduce the negative impact of increases in the variable rate over the term of the derivative contracts. These contracts are not used for trading or other speculative purposes. The Company has not incurred, and does not expect to incur, any losses as a result of counterparty default.
Interest Rate Cap
In July 2021, the Company entered into an interest rate cap contract (the “Cap”), which had an effective date of December 2021. The Cap manages the Company’s exposure to interest rate movements on a portion of the Term Loan through November 2026. The Cap, as modified to date, currently provides the Company with the right to receive payment from the counterparty if one-month SOFR exceeds 1.436 %. The Company pays a fixed monthly premium based on an annual rate of 0.31 % for the Cap. The Cap carried a notional amount of $1.0
The Cap, which was not affected by the expansion or the repricing of the Term Loan, is designed to mirror the terms of the Term Loan and to offset the cash flows being hedged. The Company designated the Cap as a cash flow hedge of the variability of the SOFR-based interest payments on the Term Loan. The effective portion of the Cap’s change in fair value is recorded in accumulated other comprehensive income. Any ineffective portion of the Cap’s change in fair value will be recorded in current earnings as interest expense.
Fair Value of Derivative Instruments
As of March 31, 2026 and December 31, 2025, the Company had an asset balance of $13.4 million and $17.0 million, respectively, for the fair value of the Cap and a liability balance of $1.9 million and $2.6 million, respectively, for the fair value of the Cap premium. Both the Cap and the Cap premium are recorded net within other assets on the condensed consolidated balance sheet.
During each of the three months ended March 31, 2026 and 2025, the Company incurred $0.8 5.6 million and $7.2 million for the three months ended March 31, 2026 and 2025, respectively, for payments received related to the Cap. Gains and losses resulting from fair value adjustments to the Cap are recorded within accumulated other comprehensive income within the Company’s condensed consolidated balance sheets and reclassified to interest expense on the dates that interest payments become due. Cash flows related to the derivative
11
contracts are included in cash flows from operating activities on the condensed consolidated statements of cash flows. Over the next 12 months, the Company expects any gains or losses for cash flow hedges amortized from accumulated other comprehensive income into earnings to have an immaterial impact on the Company’s consolidated financial statements.
The following table presents the amount of unrealized gain or loss and related tax impact associated with the derivative instruments that the Company recorded in its condensed consolidated statements of operations and comprehensive income:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (In thousands) | ||||||||||||||
Unrealized loss, net of tax | $ | ( | $ | ( | ||||||||||
Tax benefit | $ | $ | ||||||||||||
7. Equity Transactions
Preferred Stock
The Company is authorized to issue 2.0 million shares of preferred stock with a par value of $0.0001 per share. The Company previously issued 1.5 million shares of preferred stock, all of which have been converted to common stock. The remaining 0.5
Dividends
Stockholders are entitled to receive, when and if declared by the Company’s Board of Directors from time to time, dividends and other distributions in cash, stock or property from the Company’s assets or funds legally and contractually available for such purposes. In December 2022, the Company’s Board of Directors initiated a quarterly dividend. The Company paid dividends of $0.15 and $0.14 per share of common stock for the three months ended March 31, 2026 and 2025, respectively. These dividends resulted in total payments of $16.5 million and $15.7 million for the three months ended March 31, 2026 and 2025, respectively. The Company’s liability related to dividends on common shares underlying unvested restricted stock units (“RSUs”) was $3.2 million and $3.5 million as of March 31, 2026 and December 31, 2025, respectively.
Share Repurchase Program
Since February 2021, the Company’s Board of Directors has authorized the repurchase of up to $1,500.0 million of the Company’s common stock, including the most recent approval in September 2024 of $500.0 million through December 31, 2027. This timeframe can be extended or shortened by the Board of Directors. Repurchases may be made from time to time on the open market at prevailing prices or in negotiated transactions off the market. The Company records share repurchases at cost, which includes broker commissions and related excise taxes. All shares are immediately retired upon repurchase in accordance with the board-approved policy. When treasury shares are retired, the Company’s policy is to allocate the excess of the repurchase price over the par value of shares acquired first, to additional paid-in capital, and then to retained earnings/accumulated deficit. The portion to be allocated to additional paid-in capital is calculated by applying a percentage, determined by dividing the number of shares to be retired by the number of shares outstanding, to the balance of additional paid-in capital as of the date of retirement.
12
8. Revenue
The following table summarizes the Company’s services revenue:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (In thousands) | ||||||||||||||
| Commercial services revenue: | ||||||||||||||
| Voice and data | $ | $ | ||||||||||||
| IoT data | ||||||||||||||
| Broadband | ||||||||||||||
| Hosted payload and other data | ||||||||||||||
| Total commercial services revenue | ||||||||||||||
| Government services revenue | ||||||||||||||
| Total services revenue | $ | $ | ||||||||||||
The following table summarizes the Company’s engineering and support services revenue:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (In thousands) | ||||||||||||||
| Commercial | $ | $ | ||||||||||||
| Government | ||||||||||||||
| Total engineering and support services revenue | $ | $ | ||||||||||||
Approximately 45 % and 46 % of the Company’s accounts receivable balance at March 31, 2026 and December 31, 2025, respectively, were due from prime contracts or subcontracts with agencies of the U.S. government.
The Company’s contracts with customers generally do not contain performance obligations with terms in excess of one year. As such, the Company does not disclose details related to the value of performance obligations that are unsatisfied as of the end of the reporting period. The total value of any performance obligations that extend beyond one year is immaterial to the financial statements.
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the condensed consolidated balance sheets. The Company bills amounts under its agreed-upon contractual terms at periodic intervals (for services), upon shipment (for equipment), or upon achievement of contractual milestones or as work progresses (for engineering and support services). Billing may occur subsequent to revenue recognition, resulting in unbilled accounts receivable (contract assets). The Company may also receive payments from customers before revenue is recognized, resulting in deferred revenue (contract liabilities). The Company recognized revenue that was previously recorded as deferred revenue in the amounts of $15.4 million and $16.2 million for the three months ended March 31, 2026 and 2025, respectively.
The Company has also recorded costs of obtaining contracts expected to be recovered in prepaid expenses and other current assets (contract assets or commissions), that are not separately disclosed on the condensed consolidated balance sheets. The commissions are recognized over the estimated usage period. The following table presents contract assets not separately disclosed:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| (In thousands) | ||||||||||||||
| Contract Assets: | ||||||||||||||
| Commissions | $ | $ | ||||||||||||
| Other contract costs | $ | $ | ||||||||||||
13
9. Leases
Operating leases in which the Company is a lessor consist primarily of hosting agreements with Aireon LLC (“Aireon”) (see Note 12) and L3Harris Technologies, Inc. (“L3Harris”) for space on the Company’s satellites. These agreements provide for a fee that will be recognized over the estimated useful lives of the satellites, currently estimated to be approximately 17.5 years from their respective in-service dates. Lease income related to these agreements was $3.1
Aireon has made payments to the Company pursuant to its hosting agreement (the “Aireon Hosting Agreement”), and the Company expects Aireon will continue to do so. L3Harris has prepaid all amounts owed to the Company pursuant to its hosting arrangement. The following table presents future income with respect to the Company’s operating leases in which it is the lessor existing at March 31, 2026, exclusive of the $3.1 million recognized during the three months ended March 31, 2026, by year and in the aggregate:
| Year Ending December 31, | Amount | |||||||
| (In thousands) | ||||||||
2026 | $ | |||||||
2027 | ||||||||
2028 | ||||||||
2029 | ||||||||
2030 | ||||||||
| Thereafter | ||||||||
| Total lease income | $ | |||||||
10. Stock-Based Compensation
In May 2025, the Company’s stockholders approved the amendment and restatement of the Company’s 2015 Equity Incentive Plan (as so amended and restated, the “Amended 2015 Plan”). As of March 31, 2026, the aggregate number of shares remaining available for future grants under the Amended 2015 Plan was 5,717,686 . The Amended 2015 Plan provides for the grant of stock-based awards, including nonqualified stock options, incentive stock options, restricted stock, RSUs, stock appreciation rights, and other equity securities to employees, consultants, and non-employee directors of the Company and its affiliated entities. The number of shares of common stock available for issuance under the Amended 2015 Plan is reduced by (i) one share for each share of common stock issued pursuant to an appreciation award, such as a stock option or stock appreciation right with an exercise or strike price of at least 100 % of the fair market value of the underlying common stock on the date of grant, and (ii) 1.8 shares for each share of common stock issued pursuant to any stock award that is not an appreciation award, also known as a “full value award.” The Amended 2015 Plan allows the Company to utilize a broad array of equity incentives and performance cash incentives in order to secure and retain the services of its employees, directors and consultants, and to provide long-term incentives that align the interests of its employees, directors and consultants with the interests of the Company’s stockholders. The Company accounts for stock-based compensation at fair value.
Restricted Stock Units
The Company’s RSUs are classified as equity awards because the RSUs will be settled in the Company’s common stock upon vesting. The fair value of the RSUs is determined at the grant date based on the closing price of the Company’s common stock on the date of grant. The related compensation expense is recognized over the service period, or shorter periods based on the retirement eligibility of certain grantees, based on the grant date fair value of the Company’s common stock and the number of shares expected to vest. The fair value of the awards is not remeasured at the end of each reporting period. RSUs do not carry voting rights until the RSUs are vested, although certain unvested RSUs and vested but unsettled RSUs granted to non-employee directors are entitled to accrue dividend equivalent rights, and shares (including additional shares issuable upon satisfaction of any accrued dividend equivalent rights) are issued upon settlement in accordance with the terms of the award.
14
The following tables summarize the Company’s RSU activity:
| Shares Underlying RSUs | Weighted- Average Grant Date Fair Value Per RSU | |||||||||||||
| (In thousands) | ||||||||||||||
| Outstanding at December 31, 2025 | $ | |||||||||||||
| Granted | ||||||||||||||
| Forfeited | ( | |||||||||||||
| Released | ( | |||||||||||||
| Outstanding at March 31, 2026 | $ | |||||||||||||
Vested and unreleased at March 31, 2026 (1) | ||||||||||||||
| Shares Underlying RSUs | Weighted- Average Grant Date Fair Value Per RSU | |||||||||||||
| (In thousands) | ||||||||||||||
| Outstanding at December 31, 2024 | $ | |||||||||||||
| Granted | ||||||||||||||
| Forfeited | ( | |||||||||||||
| Released | ( | |||||||||||||
| Outstanding at March 31, 2025 | $ | |||||||||||||
Vested and unreleased at March 31, 2025 (1) | ||||||||||||||
(1) These RSUs were granted to the Company’s Board of Directors as a part of their compensation for board and committee service and had vested but had not yet settled, meaning that the underlying shares of common stock had not been issued and released.
Service-Based RSUs
The majority of the annual compensation the Company provides to non-employee members of its Board of Directors is paid in the form of RSUs. In addition, some members of the Company’s Board of Directors may elect to receive their cash retainers, or a portion thereof, in the form of RSUs. An aggregate amount of approximately 127,000 and 68,000 service-based RSUs were granted to the non-employee members of the Company’s Board of Directors as a result of these payments and elections during the three months ended March 31, 2026 and 2025, respectively, with an estimated grant date fair value of $2.4 million and $2.0 million, respectively.
During the three months ended March 31, 2026 and 2025, the Company granted approximately 1,860,000 and 1,068,000 service-based RSUs, respectively, to its employees, with an estimated aggregate grant date fair value of $44.5 million and $33.7 million, respectively. The increase in service-based RSUs to employees resulted primarily from a change in executive compensation, a portion of which was previously granted in performance-based RSUs.
In 2026, the RSUs granted to executives were entirely for service and vest over five years , with 20 % vesting on the first anniversary of the grant date and the remainder vesting ratably on a quarterly basis thereafter, subject to continued employment. Since 2024, the RSUs granted to employees for service, except for executive employees in 2026, generally vest over three years 34 % vesting on the first anniversary of the grant date and the remainder vesting ratably on a quarterly basis thereafter, subject to continued employment. RSUs granted prior to March 2024 generally vest over four years , with 25 % vesting on the first anniversary of the grant date and the remainder vesting ratably on a quarterly basis thereafter, subject to continued employment. The RSUs granted to non-employee members of the Board of Directors generally vest in full on the first anniversary of the grant date. The RSUs granted to non-employee consultants generally vest 50 % on the first anniversary of the grant date, with the remaining 50 % vesting quarterly thereafter through the second anniversary of the grant date.
Performance-Based RSUs
In March 2025, the Company granted approximately 534,000 annual incentive, performance-based RSUs to the Company’s executives and employees (the “Bonus RSUs”), with an estimated grant date fair value of $16.9 million. Vesting of the Bonus RSUs was dependent upon the Company’s achievement of defined performance goals over the fiscal year. The Company records stock-based compensation expense related to performance-based RSUs when it is considered probable that the performance conditions will be met. The level of achievement of performance goals was determined by the compensation
15
committee of the Company’s Board of Directors and substantially all of the Bonus RSUs granted in March 2025 vested in March 2026.
11. Income Taxes
Income before income taxes and loss on equity method investments was $31.2 million for the three months ended March 31, 2026, while the income tax expense was $8.8 million. The effective tax rate was 28.3 % for the three months ended March 31, 2026, which differed from the federal statutory rate of 21 %, primarily due to state and local taxes and a discrete tax expense associated with stock compensation and nondeductible executive compensation, partially offset by tax benefit from the deduction for foreign derived deduction eligible income and U.S. tax credits.
Income before income taxes and loss on equity method investments was $36.9 million for the three months ended March 31, 2025, while the income tax expense was $5.8 million. The effective tax rate was 15.8 % for the three months ended March 31, 2025, which differed from the federal statutory rate of 21 %, primarily due to tax benefit from the deduction for foreign derived intangible income and U.S. tax credits, partially offset by discrete tax expense associated with stock compensation, and nondeductible executive compensation.
12. Related Party Transactions
Aireon LLC and Aireon Holdings LLC
The Company’s satellite constellation hosts the Aireon® system. The Aireon system was developed by Aireon LLC, which the Company formed in 2011 and which received subsequent investments from several air navigation service providers (“ANSPs”) to provide a global air traffic surveillance service through a series of automatic dependent surveillance-broadcast (“ADS-B”) receivers on the Company’s satellites. Aireon has contracted to offer this service to ANSPs, which use the service to provide improved air traffic control services over the oceans, as well as polar and remote regions. Aireon also markets its data and services to airlines and other commercial users. The Company and the other Aireon investors hold their interests in Aireon Holdings LLC (“Aireon Holdings”) through an amended and restated LLC agreement (the “Aireon Holdings LLC Agreement”). Aireon Holdings holds 100% of the membership interests in Aireon LLC, which is the operating entity.
In June 2022, the Company entered into a subscription agreement with Aireon Holdings and invested $50.0 million in exchange for an approximate 6 % preferred membership interest in Aireon Holdings. The Company’s investment in Aireon Holdings is accounted for as an equity method investment. The carrying value of the Company’s investment in Aireon Holdings was $37.9 million and $38.5 million as of March 31, 2026 and December 31, 2025, respectively. The investments by the Company prior to June 2022 had previously been written down to a carrying value of zero.
At each of March 31, 2026 and December 31, 2025, the Company’s fully diluted ownership stake in Aireon Holdings was approximately 39.5
Under agreements with Aireon, Aireon will pay the Company fees of $200.0 million to host the ADS-B receivers, of which $126.5 million had been paid as of March 31, 2026. These fees are recognized over the estimated useful life of the satellites, which is expected to result in revenue of approximately $9.3 million per year. The Company recognized hosting fee revenue under the Aireon Hosting Agreement of $2.3
Additionally, Aireon pays power and data services fees of approximately $23.5 million per year, in the aggregate, for the delivery of air traffic surveillance data over the Iridium system. The Company recorded power and data service fee revenue from Aireon of $5.9 2.0
16
Under two services agreements, the Company also provides Aireon with administrative services and support services, the fees for which are paid monthly. Aireon receivables due to the Company under these two agreements totaled $0.8 million and $0.3 million at each of March 31, 2026 and December 31, 2025.
The Company and the other Aireon investors have agreed to participate pro rata, based on their fully diluted ownership stakes, in funding an investor bridge loan to Aireon. The Company’s maximum funding commitment for the bridge loan is $11.9 million. No
13. Net Income Per Share
The Company calculates basic net income per share by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. In periods of net income, diluted net income per share takes into account the effect of potentially dilutive common shares when the effect is dilutive. Potentially dilutive common shares include (i) shares of common stock issuable upon exercise of outstanding stock options and (ii) shares underlying RSUs that are contingently issuable upon achievement of certain service and performance requirements. The effect of potentially dilutive common shares is computed using the treasury stock method.
The following table summarizes the computations of basic and diluted net income per share:
| Three Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (In thousands, except per share data) | ||||||||||||||
| Numerator: | ||||||||||||||
Net income - basic and diluted | $ | $ | ||||||||||||
| Denominator: | ||||||||||||||
| Weighted average common shares — basic | ||||||||||||||
| Dilutive effect of stock options | ||||||||||||||
| Dilutive effect of RSUs | ||||||||||||||
| Weighted average common shares — diluted | ||||||||||||||
| Net income per share - basic | $ | $ | ||||||||||||
| Net income per share - diluted | $ | $ | ||||||||||||
17
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. | ||||
You should read the following discussion along with our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed on February 12, 2026 (our “2025 Form 10-K”) with the SEC, as well as our condensed consolidated financial statements included in this Form 10-Q.
This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking statements include those that express plans, anticipation, intent, contingencies, strategies, goals, targets or future developments, market trends, expected competition or otherwise are not statements of historical fact. Without limiting the foregoing, the words “believe,” “anticipate,” “plan,” “expect,” “intend” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on our current expectations and projections about future events, and they are subject to risks and uncertainties, known and unknown, that could cause actual results and developments to differ materially from those expressed or implied in such statements. The important factors described under the caption “Risk Factors” in our 2025 Form 10-K, as updated and supplemented by this Form 10-Q, could cause actual results to differ materially from those indicated by forward-looking statements made herein. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Overview of Our Business
We are a leading provider of global voice, data and positioning, navigation and timing (“PNT”) satellite services and are the only commercial provider of communications services offering true global coverage, connecting people, organizations, and assets to and from anywhere, in real time. Our low-earth orbit (“LEO”), L-band network provides specialized, reliable, weather-resilient communications services to regions of the world where terrestrial wireless or wireline networks do not exist or are limited, including remote land areas, open ocean, airways, the polar regions and regions where the telecommunications infrastructure has been affected by political conflicts or natural disasters. In addition, our satellites have additional payloads to host specific additional services for other customers like Aireon LLC. We also utilize our long history operating a commercial LEO satellite system to provide a growing array of engineering and operational services to government customers and government network operators such as the U.S. Space Force.
Our primary business is to provide voice and data communications services to businesses, U.S. and foreign governments, non-governmental organizations and consumers via our satellite network, which has an architecture of 66 operational satellites with in-orbit spares and related ground infrastructure. We utilize an interlinked mesh architecture to route traffic across the satellite constellation using radio frequency crosslinks between satellites. This architecture minimizes the need for ground facilities to support the constellation, which facilitates the global reach of our services and allows us to offer services in countries and regions where we have no physical presence.
We primarily sell our products and services to commercial end users by recruiting and expanding a global wholesale distribution network, currently encompassing approximately 120 service providers, approximately 310 value-added resellers (“VARs”), and approximately 90 value-added manufacturers, which create and sell technology that uses the Iridium network either directly to the end user or indirectly through other service providers, VARs or dealers. These distributors often integrate our products and services with other complementary hardware and software and have developed a broad suite of applications using our products and services to target specific industries or business areas. We expect that demand for our services will increase as more applications are developed and deployed that utilize our technology.
As of March 31, 2026, we had approximately 2,555,000 billable subscribers worldwide, an increase of 112,000, or 5%, from approximately 2,443,000 billable subscribers as of March 31, 2025. We have a diverse customer base including end users in land-mobile, Internet of Things (“IoT”), maritime, aviation, and government.
18
Material Trends and Uncertainties
Our industry and customer base have historically grown as a result of:
•demand for remote and reliable mobile communications services;
•a growing number of new products and services and related applications;
•a broad wholesale distribution network with access to diverse and geographically dispersed niche markets;
•increased demand for communications services by disaster and relief agencies, emergency first responders, businesses and consumers;
•improved data transmission speeds for mobile satellite service offerings;
•regulatory mandates requiring the use of mobile satellite services;
•a general reduction in prices of mobile satellite services and subscriber equipment; and
•geographic market expansion through the ability to offer our services in additional countries.
Nonetheless, we face a number of challenges and uncertainties in operating our business, including:
•our ability to maintain the health, capacity, control, and level of service of our satellites;
•our ability to develop and launch new and innovative products and services;
•changes in general economic, business, and industry conditions, including the effects of currency exchange rates;
•our reliance on a single primary commercial gateway and a primary satellite network operations center;
•increased competition or potential competition from other satellite service providers, including SpaceX following its announced plans to acquire a significant amount of spectrum enabling global direct-to-device (“D2D”) services, and, to a lesser extent, from the expansion of terrestrial-based cellular phone systems and related pricing pressures;
•market acceptance of our products;
•regulatory requirements in existing and new geographic markets;
•challenges associated with global operations, including as a result of conflicts in or affecting markets in which we operate;
•rapid and significant technological changes in the telecommunications industry, including global satellite D2D broadband services;
•our ability to generate sufficient internal cash flows to repay our debt;
•reliance on our wholesale distribution network to market and sell our products, services, and applications effectively;
•reliance on a global supply chain, including single-source suppliers for the manufacture of most of our subscriber equipment and for some of the components required in the manufacture of our end-user subscriber equipment and our ability to purchase component parts that are periodically subject to shortages resulting from surges in demand, natural disasters or other events, such as a global pandemic and the imposition of tariffs; and
•reliance on a few significant customers, particularly agencies of the U.S. government, for a substantial portion of our revenue, as a result of which the loss or decline in business with any of these customers may negatively impact our revenue and collectability of related accounts receivable, including as a result of an extended government shutdown or the use of continuing resolutions.
19
Comparison of Our Results of Operations for the Three Months Ended March 31, 2026 and 2025
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
| 2026 | % of Total Revenue | 2025 | % of Total Revenue | |||||||||||||||||||||||||||||||||||
| ($ in thousands) | Dollars | Percent | ||||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||||
| Services | $ | 158,029 | 72 | % | $ | 154,292 | 72 | % | $ | 3,737 | 2 | % | ||||||||||||||||||||||||||
| Subscriber equipment | 20,219 | 9 | % | 23,121 | 11 | % | (2,902) | (13) | % | |||||||||||||||||||||||||||||
| Engineering and support services | 40,809 | 19 | % | 37,465 | 17 | % | 3,344 | 9 | % | |||||||||||||||||||||||||||||
| Total revenue | 219,057 | 100 | % | 214,878 | 100 | % | 4,179 | 2 | % | |||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||||
| Cost of services (exclusive of depreciation | ||||||||||||||||||||||||||||||||||||||
| and amortization) | 49,636 | 23 | % | 48,787 | 23 | % | 849 | 2 | % | |||||||||||||||||||||||||||||
| Cost of subscriber equipment | 13,014 | 6 | % | 12,867 | 6 | % | 147 | 1 | % | |||||||||||||||||||||||||||||
| Research and development | 6,174 | 3 | % | 5,417 | 3 | % | 757 | 14 | % | |||||||||||||||||||||||||||||
| Selling, general and administrative | 45,779 | 21 | % | 35,752 | 16 | % | 10,027 | 28 | % | |||||||||||||||||||||||||||||
| Depreciation and amortization | 53,741 | 24 | % | 51,667 | 24 | % | 2,074 | 4 | % | |||||||||||||||||||||||||||||
| Total operating expenses | 168,344 | 77 | % | 154,490 | 72 | % | 13,854 | 9 | % | |||||||||||||||||||||||||||||
Operating income | 50,713 | 23 | % | 60,388 | 28 | % | (9,675) | (16) | % | |||||||||||||||||||||||||||||
Other expense: | ||||||||||||||||||||||||||||||||||||||
| Interest expense, net | (19,366) | (9) | % | (21,824) | (10) | % | 2,458 | (11) | % | |||||||||||||||||||||||||||||
Other expense, net | (194) | — | % | (1,685) | (1) | % | 1,491 | (88) | % | |||||||||||||||||||||||||||||
Total other expense | (19,560) | (9) | % | (23,509) | (11) | % | 3,949 | (17) | % | |||||||||||||||||||||||||||||
Income before income taxes and loss on equity method investments | 31,153 | 14 | % | 36,879 | 17 | % | (5,726) | (16) | % | |||||||||||||||||||||||||||||
Income tax expense | (8,827) | (4) | % | (5,819) | (3) | % | (3,008) | 52 | % | |||||||||||||||||||||||||||||
Loss on equity method investments | (732) | — | % | (648) | — | % | (84) | 13 | % | |||||||||||||||||||||||||||||
Net income | $ | 21,594 | 10 | % | $ | 30,412 | 14 | % | $ | (8,818) | (29) | % | ||||||||||||||||||||||||||
20
Revenue
Commercial Service Revenue
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | Billable Subscribers (1) | ARPU (2) | Revenue | Billable Subscribers (1) | ARPU (2) | Revenue | Billable Subscribers | ARPU | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Revenue in millions and subscribers in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial services: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Voice and data | $ | 57.4 | 399 | $ | 48 | $ | 55.9 | 409 | $ | 45 | $ | 1.5 | (10) | $ | 3 | |||||||||||||||||||||||||||||||||||||||||
| IoT data | 46.0 | 2,019 | 7.63 | 43.8 | 1,885 | 7.75 | 2.2 | 134 | (0.12) | |||||||||||||||||||||||||||||||||||||||||||||||
Broadband (3) | 12.2 | 16.1 | 254 | 12.9 | 16.3 | 261 | (0.7) | (0.2) | (7) | |||||||||||||||||||||||||||||||||||||||||||||||
| Hosted payload and other data | 14.8 | N/A | 14.9 | N/A | (0.1) | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial services | $ | 130.4 | 2,434 | $ | 127.5 | 2,310 | $ | 2.9 | 124 | |||||||||||||||||||||||||||||||||||||||||||||||
(1)Billable subscriber numbers shown are at the end of the respective period.
(2)Average monthly revenue per unit (“ARPU”) is calculated by dividing revenue in the respective period by the average of the number of billable subscribers at the beginning of the period and the number of billable subscribers at the end of the period and then dividing the result by the number of months in the period. Billable subscriber and ARPU data is not applicable for hosted payload and other data service revenue items.
(3)Commercial broadband service consists of Iridium OpenPort and Iridium Certus broadband services.
For the three months ended March 31, 2026, total commercial services revenue increased $2.9 million, or 2%, from the prior year period, primarily as a result of increases in IoT data and voice and data services, partially offset by decreases in commercial broadband revenue and hosted payload and other data services. Commercial IoT revenue increased $2.2 million, or 5%, for the three months ended March 31, 2026, compared to the same period of the prior year, primarily driven by a 7% increase in billable subscribers, offset in part by a decline in ARPU. Commercial voice and data revenue increased $1.5 million, or 3%, for the three months ended March 31, 2026, compared to the same period of the prior year, primarily due to increased ARPU from price increases implemented during the second half of the prior year. Commercial broadband revenue decreased $0.7 million, or 5%, for the three months ended March 31, 2026, compared to the prior year period, due primarily to the decline in ARPU to $254 in the first quarter of 2026, as compared to $261 in the prior year period, reflecting the increased prevalence of use of lower-priced companion plans in the current year period. Hosted payload and other data service revenue remained relatively flat compared to the prior year period.
Government Service Revenue
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||||||||||||||||||||
| Revenue | Billable Subscribers (1) | Revenue | Billable Subscribers (1) | Revenue | Billable Subscribers | |||||||||||||||||||||||||||||||||
| (Revenue in millions and subscribers in thousands) | ||||||||||||||||||||||||||||||||||||||
| Government services | $ | 27.6 | 121 | $ | 26.8 | 133 | $ | 0.8 | (12) | |||||||||||||||||||||||||||||
(1)Billable subscriber numbers shown are at the end of the respective period.
We provide airtime and airtime support to U.S. government and other authorized customers pursuant to our Enhanced Mobile Satellite Services (“EMSS”) contract. Under the terms of this agreement, which we entered into in September 2019, authorized customers utilize specified Iridium airtime services provided through the U.S. government’s dedicated gateway. The service fee under the EMSS contract is fixed at $110.5 million per year for the remainder of the term and is not based on subscribers or usage, allowing an unlimited number of users access to these services. Revenue for the three months ended March 31, 2026 increased slightly reflecting the contractual step ups in the EMSS contract. The EMSS contract expires in September 2026, although based on federal acquisition regulations, the government has the ability to unilaterally extend for an additional six months. We have begun discussions with the U.S. government on a new EMSS contract, which we expect to enter into later in 2026 or in 2027, prior to expiration of the existing EMSS contract. For more on risks associated with the EMSS contract expiration, see the risk factor captioned “-Our agreements with U.S. government customer, particularly the DoW, which represent a significant portion of our revenue, are subject to termination and renewal” in our 2025 Form 10-K.
21
Subscriber Equipment Revenue
Subscriber equipment revenue decreased $2.9 million, or 13%, to $20.2 million for the three months ended March 31, 2026, compared to the prior year period, primarily as a result of a decrease in volume of handset and L-band transceiver device sales. Notwithstanding this decrease for the three months ended March 31, 2026, we expect equipment revenue in 2026 to be in line with 2025.
Engineering and Support Service Revenue
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||
| (In millions) | ||||||||||||||||||||
| Commercial engineering and support services | $ | 1.3 | $ | 1.6 | $ | (0.3) | ||||||||||||||
| Government engineering and support services | 39.5 | 35.8 | 3.7 | |||||||||||||||||
| Total engineering and support services | $ | 40.8 | $ | 37.4 | $ | 3.4 | ||||||||||||||
Engineering and support service revenue increased by $3.4 million, or 9%, for the three months ended March 31, 2026, compared to the prior year period, primarily due to increased work under certain government contracts, predominantly the contract with the Space Development Agency (“SDA”). We expect engineering and support service revenue to be higher in 2026 than in 2025.
Operating Expenses
Cost of Services (exclusive of depreciation and amortization)
Cost of services (exclusive of depreciation and amortization) includes the cost of network engineering and operations staff, including contractors, software maintenance, product support services and cost of services for government and commercial engineering and support service revenue.
Cost of services (exclusive of depreciation and amortization) increased by $0.8 million, or 2%, for the three months ended March 31, 2026 from the prior year period, primarily as a result of the increase in work under certain government projects, including the SDA contract, as noted above.
Cost of Subscriber Equipment
Cost of subscriber equipment includes the direct costs of equipment sold, which consist of manufacturing costs, allocation of overhead, and warranty costs.
Cost of subscriber equipment increased by $0.1 million, or 1%, for the three months ended March 31, 2026, compared to the prior year period. The percentage decrease in equipment revenue did not match the change in cost of subscriber equipment primarily related to increased costs including tariffs.
Research and Development
Research and development expenses increased by $0.8 million, or 14%, for the three months ended March 31, 2026, compared to the prior year period based on increased spending on new products and device-related features and technology for our network.
Selling, General and Administrative
Selling, general and administrative expenses that are not directly attributable to the sale of services or products include sales and marketing costs, as well as employee-related expenses (such as salaries, wages, and benefits), legal, finance, information technology, facilities, billing, and customer care expenses.
Selling, general and administrative expenses increased by $10.0 million, or 28%, for the three months ended March 31, 2026, compared to the prior year period, primarily due to increases associated with the timing of headcount costs and related benefits allocated to programs, and increases in professional fees, including stock appreciation rights expense in the current year resulting from changes in our stock valuation between the years. We expect selling, general and administrative expense to moderate from the first quarter 2026 growth rate to a low double-digit rate for the full year 2026.
Depreciation and Amortization
Depreciation and amortization expense increased by $2.1 million, or 4%, for the quarter ended March 31, 2026, compared to the prior year period, primarily related to satellites placed into service during the prior year and intangible asset amortization.
22
Other Income (Expense), net
Interest Expense, Net
Interest expense, net decreased $2.5 million, or 11%, for the three months ended March 31, 2026, compared to the prior year period. The decrease resulted primarily from a decrease in the average borrowing rate.
Other Expense, net
Other expense, net, was $0.2 million for the three months ended March 31, 2026, compared to $1.7 million for the prior year period, primarily as the result of changes in foreign currency exchange rates.
Income Tax Expense
For the three months ended March 31, 2026, our income tax expense was $8.8 million, compared to income tax expense of $5.8 million for the prior year period. The increase in income tax expense is primarily related to increased tax expense associated with stock compensation and nondeductible executive compensation, and decreased tax benefit from the deduction for foreign derived deduction eligible income and U.S. tax credits.
The Organisation for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenue and profits above certain thresholds (referred to as Pillar 2). Although the U.S. has not enacted legislation to implement Pillar 2, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar 2. Pillar 2 is applicable to the Company beginning in 2026. However based on the guidance issued to date, we do not expect it to have a material impact on our effective tax rate or our results of operation and financial position.
Loss on Equity Method Investments
For the three months ended March 31, 2026, our loss on equity method investments was $0.7 million compared to a loss of $0.6 million in the prior year period. These amounts reflect the portion of losses recorded on our equity method investments.
Net Income
Net income was $21.6 million for the three months ended March 31, 2026, compared to $30.4 million for the prior year period. The $8.8 million decrease in net income was primarily the result of the increase in selling, general and administrative expenses and increased income tax expense, partially offset by the increase in engineering and support services revenue and commercial services revenue, as described above.
Liquidity and Capital Resources
Our primary sources of liquidity are cash provided by operations, cash and cash equivalents and our Revolving Facility. As of March 31, 2026, we had approximately $1.8 billion of indebtedness, consisting of amounts outstanding under the Term Loan, the terms of which are described below. We have $100.0 million of additional borrowing available to us under our Revolving Facility as of March 31, 2026. These sources are expected to meet our short-term and long-term liquidity needs, including annual payments for (i) required principal and interest on the Term Loan, which we expect to be $3.4 million, and, based on the current interest rate, approximately $85.0 million, respectively in 2026, (ii) capital expenditures (consistent with 2025), (iii) working capital, (iv) potential share repurchases, and (v) anticipated cash dividend payments to holders of our common stock.
As of March 31, 2026, our total cash and cash equivalents balance was $111.6 million, up from $96.5 million as of December 31, 2025. While we generated cash flows from operations and used less for share repurchases in 2026 than in 2025, these factors were offset in part by increased capital expenditures.
Term Loan and Revolving Facility
Pursuant to a credit agreement (as amended and restated to date, the “Credit Agreement”), we previously entered into a term loan totaling $1,500.0 million (the “Term Loan”), issued at a price equal to 99.75%, and an accompanying $100.0 million revolving loan (the “Revolving Facility”). The maturity of the Term Loan and Revolving Facility are in September 2030 and September 2028, respectively. During 2024, we borrowed an additional $325.0 million under the Term Loan, comprised of $125.0 million in March 2024, issued at a price equal to 99.875% of its face value, and $200.0 million in July 2024, issued at 99.0% of its face value. The additional amounts borrowed are fungible with the original $1,500.0 million, and have the same maturity date, interest rate, and other terms.
As of March 31, 2026, we reported an aggregate balance of $1,774.7 million in borrowings under the Term Loan, before $13.5 million of net unamortized deferred financing costs for a net principal balance of $1,761.2 million outstanding in our condensed consolidated balance sheet. In the first quarter of 2025, we drew $20.0 million under our Revolving Facility for
23
general corporate purposes, all of which was repaid in December 2025, and there were no amounts outstanding as of March 31, 2026 or December 31, 2025.
The Term Loan has been repriced on several occasions, most recently in June 2024, and currently bears interest at an annual rate equal to the SOFR, plus 2.25%, with a 0.75% SOFR floor. We typically select a one-month interest period, with the result that interest is calculated using one-month SOFR. Interest is paid monthly on the last business day of the month. Principal payments, payable quarterly, equal $18.3 million per annum (one percent of the full principal amount of the Term Loan following the additional amount Term Loan amounts borrowed in 2024), with the remaining principal due upon maturity. As noted below, no quarterly principal payment has been made after the first quarter in 2025 as a result of the excess cash flow payment made in May 2025.
The Revolving Facility bears interest at an annual rate equal to SOFR plus 2.5% (but without a SOFR floor) if and as drawn, with no original issue discount, a commitment fee of 0.5% per year on the undrawn amount, which was reduced to 0.375% in the first quarter of 2026 because we had a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of less than 3.5 to 1.
The Term Loan contains no financial maintenance covenants. With respect to the Revolving Facility, we are required to maintain a consolidated first lien net leverage ratio of no greater than 6.25 to 1 if more than 35% of the Revolving Facility has been drawn, or subject to letter of credit exposure. The Credit Agreement contains other customary representations and warranties, affirmative and negative covenants, and events of default. We complied with all covenants under the Credit Agreement as of March 31, 2026.
The Credit Agreement restricts our ability to incur liens, engage in mergers or asset sales, pay dividends, repay subordinated indebtedness, incur indebtedness, make investments and loans, and engage in other transactions as specified in the Credit Agreement. The Credit Agreement provides for specified exceptions, including baskets measured as a percentage of trailing twelve months of earnings before interest, taxes, depreciation and amortization, and unlimited exceptions in the case of incurring indebtedness and liens and making investments, dividend payments, and payments of subordinated indebtedness, based on achievement and maintenance of specified leverage ratios. The Credit Agreement permits repayment, prepayment, and repricing transactions. The Credit Agreement also contains a mandatory prepayment sweep mechanism with respect to a portion of our excess cash flow (as defined in the Credit Agreement) in the event our consolidated first lien net leverage ratio rises above 3.5 to 1. Our mandatory excess cash flow prepayment, as specified in the Credit Agreement, was $28.6 million as of December 31, 2024. This amount was paid in May 2025. As a result, no quarterly principal payment was required for the quarter ended March 31, 2026, and no quarterly principal payment will be required until the fourth quarter of 2026. As of December 31, 2025, our first lien net leverage ratio was below the specified leverage ratio and therefore the mandatory prepayment sweep was not required.
U.S. Government
A significant portion of our revenues and cash flow are derived from U.S. government contracts. During 2025, we did not experience delays in receiving payments from U.S. government agencies despite the U.S. government shutdown during the fourth quarter. While none of our contracts were impacted as a result, an extended government shutdown could result in a delay or suspension of funding for our U.S. government contracts and disrupt our cash flows and delay new contract awards.
Contractual Obligations
As of March 31, 2026, we had non-cancelable purchase obligations of approximately $8.1 million for inventory purchases with Benchmark, our primary third-party equipment supplier. Our purchase obligations, all of which are due during the next twelve months, did not change materially from the end of 2025.
We also have contractual obligations in the short and long term related to the Term Loan (see Note 5) and leases.
Dividends
In December 2022, our Board of Directors initiated a quarterly dividend. Total dividends paid during the three months ended March 31, 2026 and March 31, 2025 were $16.5 million and $15.7 million, respectively. We currently expect that comparable cash dividends will continue to be paid in the future, although future dividends will depend on our earnings, capital requirements, financial conditions and other factors that our Board of Directors deems relevant.
Share Repurchases
As of March 31, 2026, $245.3 million remained available and authorized for repurchase under this program through December 31, 2027. Effective October 1, 2025, we paused share repurchases to increase financial flexibility. We will continue to evaluate the amount and timing of share repurchases under our share repurchase program, considering, among other factors, general market conditions, capital allocation priorities, general business conditions, and other investment opportunities. The repurchase program does not obligate us to repurchase any specific amount of common stock and may be modified, suspended, or discontinued at any time without notice at the discretion of our Board of Directors.
24
Cash Flows
The following table summarizes our cash flows:
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | Change | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Cash provided by operating activities | $ | 71,615 | $ | 61,081 | $ | 10,534 | ||||||||||||||
| Cash used in investing activities | $ | (29,955) | $ | (24,546) | $ | (5,409) | ||||||||||||||
Cash used in financing activities | $ | (26,343) | $ | (81,063) | $ | 54,720 | ||||||||||||||
Cash Flows Provided by Operating Activities
Net cash provided by operating activities for the three months ended March 31, 2026 increased by $10.5 million from the prior year period. The changes in operating cash relate to a working capital increase of approximately $14.1 million, primarily due to changes in employee and vendor related accruals, the recognition of deferred revenue, and the timing of customer and vendor payments.
Cash Flows Used in Investing Activities
Net cash used in investing activities for the three months ended March 31, 2026 increased by $5.4 million as compared to the prior year period, as a result of the increase in spending on capital expenditures.
Cash Flows Used in Financing Activities
Net cash used in financing activities for the three months ended March 31, 2026 decreased by $54.7 million as compared to the prior year period. Cash flows used in the prior year were higher primarily due to share repurchases, offset in part by the $20.0 million draw down on the revolver.
U.S. Tax Regulation Update
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA permanently extends certain expiring provisions of the Tax Cuts and Jobs Act, modifies the international tax framework, and restores certain favorable business tax provisions, among other changes. The legislation has multiple effective dates, with certain provisions effective in 2025 and others to be implemented through 2027. We have incorporated the impact of the new legislation into our year-to-date effective tax rate and continue to assess the impact on our consolidated financial statements.
Seasonality
Our results of operations have been subject to seasonal usage changes for commercial customers, and we expect that our results will be affected by similar seasonality going forward. March through October are typically the peak months for commercial voice services revenue and related subscriber equipment sales. U.S. government revenue and commercial IoT revenue have been less subject to seasonal usage changes.
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, income taxes, useful lives of property and equipment, loss contingencies, and other estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
There have been no changes to our critical accounting policies and estimates from those described in our 2025 Form 10-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We had an outstanding aggregate balance of $1,774.7 million under the Term Loan as of March 31, 2026. Under the Term Loan, we pay interest at an annual rate equal to SOFR, plus 2.25%, with a 0.75% SOFR floor. Accordingly, we have been and continue to be subject to interest rate fluctuations. The Cap began in December 2021 and manages our exposure to interest rate movements on a notional amount of $1.0 billion of the Term Loan through November 2026. The Cap provides the right for us to receive payment from the counterparty if one-month SOFR exceeds 1.436%. The interest rate was above the level of the Cap for the three months ended March 31, 2026 and for the full year 2025. For every SOFR increase of 25 basis points above the level of the Cap, we expect our annual interest expense to increase by an additional $1.9 million related to the unhedged portion of the Term Loan.
25
As of March 31, 2026, the Revolving Facility was undrawn. Accordingly, although the Revolving Facility bears interest at SOFR plus 2.5%, without a SOFR floor, if and as drawn, we are currently not exposed to fluctuations in interest rates with respect to the Revolving Facility.
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, as well as accounts receivable. We maintain our cash and cash equivalents with financial institutions with high credit ratings and maintain deposits in excess of federally insured limits. The majority of our cash is invested into a money market fund invested in U.S. treasuries, agency mortgage-backed securities and/or U.S. government-guaranteed debt. Accounts receivable are due from both domestic and international customers. We perform credit evaluations of our customers’ financial condition and record reserves to provide for estimated credit losses. Accounts payable are owed to both domestic and international vendors.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our chief executive officer, who is our principal executive officer, and our chief financial officer, who is our principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (, or the “Exchange Act”, as of the end of the period covered by this Form 10-Q. In evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected.
Based on this evaluation, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.
Changes in Internal Control Over Financial Reporting
During the quarter ended March 31, 2026, there were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
26
PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings, other than routine litigation incidental to our business.
ITEM 1A. RISK FACTORS.
Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. In addition to the other information set forth in this report, you should carefully consider the factors described in “Part I, Item 1A. Risk Factors” of our 2025 Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Issuer Purchases of Equity Securities
| Period | (a) Total number of shares purchased | (b) Average price paid per share | (c) Total number of shares purchased as part of publicly announced plans or programs | (d) Maximum dollar value of shares that may yet be purchased under the plans or programs | ||||||||||||||||||||||
| January 1-31 | — | $— | — | $245.3 million | ||||||||||||||||||||||
| February 1-28 | — | $— | — | $245.3 million | ||||||||||||||||||||||
| March 1-31 | — | $— | — | $245.3 million | ||||||||||||||||||||||
| Total | — | $— | — | — | ||||||||||||||||||||||
Since initiating share repurchases in February 2021, our Board of Directors has authorized the repurchase of up to $1,500.0 million of our common stock, including the September 2024 authorization to repurchase up to $500.0 million through December 31, 2027. During the fourth quarter of 2025, we paused share repurchases to increase financial flexibility.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
Insider trading arrangements and policies
During the three months ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended) adopted terminated
27
ITEM 6. EXHIBITS.
The following list of exhibits includes exhibits submitted with this Form 10-Q as filed with the Securities and Exchange Commission.
| Exhibit | Description | |||||||
10.1* | Iridium Communications Inc. Annual Performance Bonus Plan | |||||||
10.2* | Form of RSU Award Grant Notice and Agreement for use in connection with the Iridium Communications Inc. Annual Performance Bonus Plan | |||||||
10.3* | Iridium Communications Inc. Executive Severance Plan | |||||||
| 31.1 | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to section 302 of The Sarbanes-Oxley Act of 2002. | |||||||
| 31.2 | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to section 302 of The Sarbanes-Oxley Act of 2002. | |||||||
32.1 | Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(b) and 15d-14(b) promulgated under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to section 906 of The Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document). | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents. | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |||||||
* | Denotes management contract or compensatory plan or arrangement. | ||||
28
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| IRIDIUM COMMUNICATIONS INC. | ||||||||
| By: | /s/ Vincent J. O’Neill | |||||||
| Vincent J. O’Neill | ||||||||
Chief Financial Officer | ||||||||
Date: April 23, 2026
29
FAQ
How did Iridium (IRDM) perform financially in Q1 2026?
Iridium generated $219.1 million in Q1 2026 revenue, up from $214.9 million a year earlier. Net income was $21.6 million versus $30.4 million, as higher operating and tax expenses offset modest revenue growth.
What was Iridium (IRDM) earnings per share in Q1 2026?
Iridium reported diluted EPS of $0.20 in Q1 2026, compared with $0.27 in Q1 2025. The decline reflects higher selling, general and administrative costs and a higher effective tax rate despite slightly higher total revenue.
How fast is Iridium (IRDM) growing its subscriber base?
Iridium ended Q1 2026 with about 2.56 million billable subscribers, up roughly 112,000 or 5% from Q1 2025. Growth was driven mainly by Internet of Things connections and other commercial services across land-mobile, maritime, aviation and government markets.
What is the status of Iridium’s (IRDM) debt and interest costs?
Iridium had about $1.77 billion outstanding on its Term Loan at March 31, 2026, with net carrying value of $1.76 billion. Q1 2026 interest expense, net, was $19.4 million, lower than Q1 2025 due to a reduced average borrowing rate and active hedging.
Did Iridium (IRDM) return cash to shareholders in Q1 2026?
Iridium paid a quarterly dividend of $0.15 per share, totaling about $16.5 million, in Q1 2026. The company paused share repurchases in late 2025 but still has $245.3 million remaining under its board-authorized buyback program through December 2027.
How much cash did Iridium (IRDM) generate from operations in Q1 2026?
Iridium produced $71.6 million of operating cash flow in Q1 2026, up from $61.1 million a year earlier. The improvement mainly reflects working capital movements, including accruals and deferred revenue recognition, helping support capital spending and shareholder dividends.