Iridium Communications Inc.

02/12/2026 | Press release | Distributed by Public on 02/12/2026 06:02

Annual Report for Fiscal Year Ending 12/31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 13, 2025.
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, L-band satellite network provides 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 compromised by political conflicts or natural disasters.
We 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 unique 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.
In 2024, we acquired Satelles, Inc. (Satelles), a provider of highly secure, satellite-based PNT services that complement and protect GPS and other Global Navigation Satellite System reliant systems. Time synchronization and location data play an important role in the global economy, particularly for major industries supported by critical infrastructure, such as financial services, telecommunications, cybersecurity and transportation. We believe this acquisition has the potential to generate substantial growth in our service revenue, as well as incremental equipment and engineering services revenue over the coming years from both government and commercial customers.
We sell our products and services to commercial end users through a wholesale distribution network, encompassing approximately 120 service providers, 310 value-added resellers (VARs), and 90 value-added manufacturers (VAMs), which either sell directly to the end user or indirectly through other service providers, VARs or dealers. These distributors often
integrate our products and services with other complementary hardware and software and have developed a broad suite of applications for our products and services targeting specific lines of business.
At December 31, 2025, we had approximately 2,537,000 billable subscribers worldwide, an increase of 77,000, or 3%, from approximately 2,460,000 billable subscribers at December 31, 2024. We have a diverse customer base, including end users in land-mobile, Internet of Things (IoT), maritime, aviation and government.
We recognize revenue primarily from the provision of services and the sale of equipment. Service revenue represented 73% and 74% of total revenue for the years ended December 31, 2025 and 2024, respectively. Voice and data, IoT data and broadband service revenues have historically generated higher margins than subscriber equipment revenue, and we expect this trend to continue. We also recognize revenue from our hosted payloads, principally from Aireon, including fees for hosting the payloads and fees for transmitting data from the payloads over our network, as well as revenue from other services, such as satellite time and location services.
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 and emergency first responders;
•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 recently announced plans to acquire a significant amount of spectrum enabling global 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 announced plans for 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, including a global pandemic; 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.
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). 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.
The accounting policies we believe to be most critical to understanding our financial results and condition and that require complex and subjective management judgments are discussed below. Our accounting policies are more fully described in Note 2to the consolidated financial statements included in this report.
Income Taxes
We account for income taxes using the asset and liability approach. This approach requires that we recognize deferred tax assets
and liabilities based on differences between the financial statement bases and tax bases of our assets and liabilities. Deferred tax
assets and liabilities are recorded based upon enacted tax rates for the period in which the deferred tax items are expected to
reverse. Changes in tax laws or tax rates in various jurisdictions are reflected in the period of change. Significant judgment is
required in the calculation of our tax provision and the resulting tax liabilities as well as our ability to realize our deferred tax
assets. Our estimates of future taxable income and any changes to such estimates can significantly impact our tax provision in a
given period. Significant judgment is required in determining our ability to realize our deferred tax assets related to federal,
state and foreign tax attributes within their carryforward periods including estimating the amount and timing of the future
reversal of deferred tax items in our projections of future taxable income. A valuation allowance is established to reduce
deferred tax assets to the amounts we expect to realize in the future. We also recognize tax benefits related to uncertain tax
positions only when we estimate that it is "more likely than not" that the position will be sustainable based on its technical
merits. If actual results are not consistent with our estimates and assumptions, this may result in material changes to our income
tax provision.
Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation and amortization. Property and equipment are depreciated or amortized over their estimated useful lives. We apply judgment in determining the useful lives based on factors such as engineering data, our long-term strategy for using the assets, the manufacturer's estimated design life for the assets, laws and regulations that could impact the useful lives of the assets and other economic factors. In evaluating the useful lives of our satellites, we assess the current estimated operational life of the satellites, including the potential impact of environmental factors on the satellites, ongoing operational enhancements and software upgrades. Additionally, we review engineering data relating to the operation and performance of our satellite network.
We depreciate our satellites over the shorter of their potential operational life or the period of their expected use. The appropriateness of the useful lives is evaluated on a quarterly basis or as events occur that require additional assessment. The upgraded satellites that have been placed into service are depreciated using the straight-line method over their respective estimated useful lives. If the estimated useful lives of our upgraded satellites change, it could have a material impact on the timing of the recognition of depreciation expense and hosted payload revenue.
In the fourth quarter of 2023, we updated our estimate of the satellites' remaining useful lives based on the health of the constellation, resulting in an extension from 12.5 years to 17.5 years. If our actual operational results are not consistent with our estimates and assumptions, however, we may experience further changes in depreciation and amortization expense that could be material to our results of operations. See Note 2to the consolidated financial statements included in this report for further detail on the impact of this change.
Comparison of Our Results of Operations for the Years Ended December 31, 2025 and 2024
Year Ended December 31,
% of Total
Revenue 		% of Total
Revenue 		Change
($ In thousands) 2025 2024 Dollars Percent
Revenue:
Service revenue
Commercial $ 525,923 60 % $ 508,618 61 % $ 17,305 3 %
Government 108,035 13 % 106,296 13 % 1,739 2 %
Total service revenue 633,958 73 % 614,914 74 % 19,044 3 %
Subscriber equipment 81,109 9 % 91,416 11 % (10,307) (11) %
Engineering and support services 156,592 18 % 124,352 15 % 32,240 26 %
Total revenue 871,659 100 % 830,682 100 % 40,977 5 %
Operating expenses:
Cost of services (exclusive of depreciation
and amortization) 197,577 23 % 178,140 22 % 19,437 11 %
Cost of subscriber equipment 50,426 6 % 52,427 6 % (2,001) (4) %
Research and development 19,758 2 % 28,422 3 % (8,664) (30) %
Selling, general and administrative 157,711 18 % 168,182 20 % (10,471) (6) %
Depreciation and amortization 210,207 24 % 203,127 25 % 7,080 3 %
Total operating expenses 635,679 73 % 630,298 76 % 5,381 1 %
Operating income 235,980 27 % 200,384 24 % 35,596 18 %
Other expense:
Interest expense, net (88,252) (10) % (91,134) (11) % 2,882 (3) %
Other income (expense), net
(2,915) 0 % 534 0 % (3,449) (646) %
Total other expense (91,167) (10) % (90,600) (11) % (567) 1 %
Income before income taxes and equity in net earnings of affiliates
144,813 17 % 109,784 13 % 35,029 32 %
Income tax expense
(27,618) (4) % (12,259) (1) % (15,359) 125 %
Gain (loss) on equity method investments (2,823) 0 % 15,251 2 % (18,074) (119) %
Net income
$ 114,372 13 % $ 112,776 14 % $ 1,596 1 %
Commercial Service Revenue
Year Ended December 31,
2025 2024 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 $ 232.2 402 $ 47 $ 226.1 415 $ 46 $ 6.1 (13) $ 1
IoT data 181.4 1,998 $ 7.78 166.2 1,887 $ 7.70 15.2 111 $ 0.08
Broadband(3)
50.7 16.1 $ 259 56.1 16.6 $ 282 (5.4) (0.5) $ (23)
Hosted payload and other data 61.6 N/A 60.2 N/A 1.4 N/A
Total commercial services $ 525.9 2,416 $ 508.6 2,319 $ 17.3 97
(1)Billable subscriber numbers are shown as of 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 consists of Iridium OpenPort and Iridium Certus broadband services.
For the year ended December 31, 2025, total commercial service revenue increased $17.3 million, or 3%, primarily as a result of increases in IoT data, voice and data and hosted payload and other data service revenue, offset in part by a decrease in broadband. Commercial IoT revenue increased $15.2 million, or 9%, compared to the prior year, driven primarily by a 6% increase in IoT billable subscribers and an increase in a contract with a large customer previously executed in the first quarter of 2024. Commercial voice and data revenue increased $6.1 million, or 3%, from the prior year, primarily due to increased ARPU from price increases in the third quarter of 2025. Hosted payload and other service revenue increased $1.4 million, or 2%, compared to the prior year, primarily due to increases in PNT and other broadcast data revenue, partially offset by decreases in other data service contracts. These increases were offset in part by a decrease in commercial broadband revenue of $5.4 million, or 10%, compared to the prior year, primarily due to a decrease in ARPU reflecting the increased prevalence of use of lower-priced companion plans in the current year period and non-recurring revenue recognition of $1.4 million in the prior year period.
Government Service Revenue
Year Ended December 31,
2025 2024 Change
Revenue
Billable
Subscribers (1)
Revenue
Billable
Subscribers (1)
Revenue Billable
Subscribers
(Revenue in millions and subscribers in thousands)
Government service revenue $ 108.0 121 $ 106.3 141 $ 1.7 (20)
(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 year ended December 31, 2025 increased slightly reflecting 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.
Subscriber Equipment Revenue
Subscriber equipment revenue decreased $10.3 million, or 11%, to $81.1 million for the year ended December 31, 2025 compared to the prior year, primarily due to a decrease in the volume of handset sales and in Short Burst Data device sales, offset in part by an increase in Certus device sales. We expect equipment revenue in 2026 to be in line with 2025.
Engineering and Support Service Revenue
Year Ended December 31,
2025 2024 Change
(In millions)
Commercial $ 7.6 $ 7.3 $ 0.3
Government 149.0 117.0 32.0
Total $ 156.6 $ 124.3 $ 32.3
Engineering and support service revenue increased by $32.3 million, or 26%, for the year ended December 31, 2025 compared to the prior year, primarily due to the increased work under certain government projects, predominantly the contract awarded by 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 $19.4 million, or 11%, for the year ended December 31, 2025 compared to the prior year, primarily as a result of increased 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 decreased $2.0 million, or 4%, for the year ended December 31, 2025 compared to the prior year period, primarily due to the decrease in volume of device sales, as described above, offset in part by an increase in inventory reserves associated with revaluation and obsolescence.
Research and Development
Research and development expenses decreased by $8.7 million, or 30%, for the year ended December 31, 2025 compared to the prior year period based on decreased spending on device-related features 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 decreased by $10.5 million, or 6%, for the year ended December 31, 2025, primarily due to lower equity compensation costs, partially offset by increased professional fees and spend related to our channel partner conference held in March 2025.
Depreciation and Amortization
Depreciation and amortization expense increased by $7.1 million, or 3%, for the year ended December 31, 2025, compared to the prior year, due to increased depreciation resulting from on-orbit spares launched in the second quarter of 2023 being placed into service in 2025 and being depreciated.
Other Expense
Interest Expense, net
Interest expense, net, for the year ended December 31, 2025 was $88.3 million, compared to $91.1 million for the prior year. The decrease resulted primarily from a decrease in the average borrowing rate and the refinancing fees expensed in the prior year that did not recur in 2025, offset in part by the increased average outstanding debt balance in 2025 as compared to the prior year.
Other Income (Expense), net
Other expense, net, was $2.9 million for the year ended December 31, 2025, compared to other income, net of $0.5 million for the prior year, primarily as the result of changes in foreign currency exchange rates.
Income Tax Expense
For the year ended December 31, 2025, our income tax expense was $27.6 million, compared to $12.3 million for the prior year. Our effective tax rate was approximately 19.1% for the year ended December 31, 2025 compared to 11.2% for the prior year. The increase in income tax expense is primarily related to the net impact of (i) an increase in pre-tax book income in the current year compared to the prior year, (ii) a decrease in estimated research and development credits, (iii) an increase in state deferred tax expense, (iv) a decrease in tax benefit from the Foreign Derived Intangible Income deduction, and (v) a decrease in tax expense from nondeductible executive compensation. If our current estimates change in future periods, the impact on the deferred tax assets and liabilities may change correspondingly. See Note 12to our consolidated financial statements for more detail on the individual items impacting our effective tax rate for the years.
Gain (Loss) on Equity Method Investments
For the year ended December 31, 2025, our loss on equity method investments was $2.8 million, compared to a gain of $15.3 million in the prior year. The change is primarily the result of the acquisition of Satelles in 2024, upon which we recorded a $19.8 million gain on our pre-acquisition equity method investment in Satelles, offset in part by the portion of losses recorded on other equity method investments.
Net Income
Net income was $114.4 million for the year ended December 31, 2025, compared to $112.8 million during the prior year. The change in net income primarily resulted from the increase in operating income, primarily driven by increased revenues, offset in part by the change in the equity method investments and an increase in income taxes, as noted above.
Liquidity and Capital Resources
Our primary sources of liquidity are cash provided by operations, cash and cash equivalents and our Revolving Facility. At December 31, 2025, 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 at December 31, 2025. 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, (ii) capital expenditures in 2026 will be consistent with 2025, (iii) working capital, (iv) potential share repurchases, and (v) anticipated cash dividend payments to holders of our common stock.
As of December 31, 2025, our total cash and cash equivalents balance was $96.5 million, up from $93.5 million as of December 31, 2024. While we generated greater cash flows from operations, and used less cash for share repurchases in 2025 than in 2024, these factors were offset in part by increased capital expenditures.
Term Loan and Revolving Facility
Pursuant to a credit agreement (as amended 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 the year ended December 31, 2024, we borrowed an additional $325.0 million under our 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.
As of December 31, 2025, we reported an aggregate balance of $1,774.7 million in borrowings under the Term Loan, before $14.2 million of net deferred financing costs, for a net principal balance of $1,760.5 million outstanding in our consolidated balance sheet. In the first half of 2025, we drew $50.0 million under our Revolving Facility for general corporate purposes, all of which was repaid in December 2025, and there were no amounts outstanding as of December 31, 2025.
The proceeds from the March 2024 additional Term Loan were used for the acquisition of Satelles on April 1, 2024. In April 2024, we drew $50.0 million on our Revolving Facility for general corporate purposes, including the funding of repurchases of our common stock. This amount was repaid with the expansion of the Term Loan in July 2024, and there were no amounts outstanding under the Revolving Facility as of December 31, 2024. The remaining proceeds from the July 2024 additional Term Loan have been used for general corporate purposes, including share repurchases. In March 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. 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 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 of 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 is reduced to 0.375% if we have a consolidated first lien net leverage ratio, as defined in the Credit Agreement, of less than 3.5 to 1.
Our 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. The Company was in compliance with all covenants as of December 31, 2025.
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 (EBITDA), and unlimited exceptions in the case of incurring indebtedness and liens and making investments, dividend payments, and payments of subordinated indebtedness, based on achievement and maintenance of specified leverage ratios. The Credit Agreement permits repayment, prepayment, and repricing transactions, subject, in the case of the Term Loan, to a 1% penalty in the event the Term Loan is prepaid or repriced within the first six months from the refinancing date. 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. 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. We were in compliance with all covenants under the Credit Agreement as of December 31, 2025. See Note 6to
the consolidated financial statements included in this annual report for further discussion of our Term Loan and Revolving Facility.
Derivative Financial Instruments
In July 2021, we entered into an interest rate cap agreement ("Cap") that began in December 2021. The Cap manages our exposure to interest rate movements on a portion of the Term Loan through November 2026. The Cap, which was not affected by the refinancing of the Term Loan in September 2023 or the 2024 increases and repricing, is designed to mirror the terms of the Term Loan and to offset the cash flows being hedged. We 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 (loss) and reclassified into earnings during the period in which the hedged transaction affects earnings.
The Cap provides us the right to receive payment from the counterparty if one-month SOFR exceeds 1.436%. We began paying a fixed monthly premium based on an annual rate of 0.31% for the Cap in December 2021. The Cap carried a notional amount of $1.0 billion as of December 31, 2025 and 2024.
See Note 7to our consolidated financial statements included in this report for further discussion of our derivative financial instruments.
Total Interest on Debt
Total interest incurred includes amortization of deferred financing fees and capitalized interest. We incurred third-party financing costs of $2.3 million in connection with the expansion of the Term Loan in July 2024, $1.9 million related to the repricing of the Term Loan in June 2024 and $1.6 million in connection with the expansion of the Term Loan in March 2024, substantially all of which we expensed as incurred. Due to the refinancing of the Term Loan in 2023, we incurred third-party financing costs of $15.9 million, of which $14.7 million was expensed. These costs are included within interest expense on the consolidated statements of operations and comprehensive income.
Total interest incurred (net of the Cap) during the years ended December 31, 2025, 2024 and 2023 was $98.1 million, $102.8 million and $102.3 million, respectively. Interest incurred includes amortization of deferred financing fees of $2.9 million, $2.7 million and $4.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. Interest capitalized during the years ended December 31, 2025, 2024 and 2023 was $4.6 million, $5.0 million and $5.1 million, respectively. As of December 31, 2025 and 2024, accrued interest on the Term Loan was $0.3 million and $1.0 million, respectively.
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 December 31, 2025, we held non-cancelable purchase obligations of approximately $8.4 million for inventory purchases with Benchmark, our primary third-party equipment supplier. Our purchase obligations, all of which are due during 2026, remained relatively consistent, decreasing $0.9 million from the end of 2024.
We also have contractual obligations in the short and long term related to our Term Loan and leases. See Note 6and Note 10for more information on these payment obligations by year.
Dividends
On December 8, 2022, our Board of Directors initiated a quarterly dividend. For each quarter through March 2024, our Board of Directors declared and paid a quarterly cash dividend in the amount of $0.13 per share of common stock. The Board of Directors increased the quarterly cash dividend to $0.14 per share of common stock beginning in the second quarter of 2024 and to $0.15 per share of common stock beginning in the third quarter of 2025. Total dividends paid in 2025 were $62.9 million, compared to total dividends in 2024 of $64.7 million. 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 considered relevant by the Board.
Share Repurchases

During the year ended December 31, 2025, we repurchased and subsequently retired 6.8 million shares of our common stock under our previously announced share repurchase program at a total purchase price of approximately $185.0 million. As of December 31, 2025, $245.3 million remained available and authorized for repurchase under this program through December 31, 2027. Effective October 1, 2025, we have paused share repurchases to increase financial flexibility and 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.
Cash Flows - Comparison of the Years Ended December 31, 2025 and 2024
The following table shows our consolidated cash flows:
Year Ended December 31,
Statement of Cash Flows 2025 2024 Change
(in thousands)
Net cash provided by operating activities $ 400,073 $ 375,955 $ 24,118
Net cash used in investing activities $ (100,280) $ (180,603) $ 80,323
Net cash used in financing activities $ (299,910) $ (170,481) $ (129,429)
Cash Flows from Operating Activities
Net cash provided by operating activities for the year ended December 31, 2025 increased $24.1 million from the prior year. The changes in operating cash relate primarily to increased net income, as adjusted for non-cash activities, which increased by $33.9 million over the prior year due to a decrease in non-cash income from equity method investments, including the gain on the acquisition of Satelles, and an increase in deferred income taxes. These changes were partially offset by a decrease in working capital of approximately $9.7 million, primarily as a result of timing associated with changes in deferred revenue, accounts receivable and payable.
Cash Flows from Investing Activities
Net cash used in investing activities for the year ended December 31, 2025 decreased $80.3 million from the prior year period primarily as a result of our acquisition of Satelles in 2024, offset in part by an increase in capital expenditures, including costs associated with Iridium NTN Direct, compared to the prior year. We expect our capital expenditures to be comparable to 2025 levels in 2026.
Cash Flows from Financing Activities
Net cash used in financing activities for the year ended December 31, 2025 increased $129.4 million compared to the prior year period, primarily due to the additional $325.0 million in borrowings under the Term Loan in the prior year, offset in part by decreased repurchases of our common stock in the current year.
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.
Iridium Communications Inc. published this content on February 12, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 12, 2026 at 12:02 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]