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Item 8. Financial Statements and Supplementary Data

2026-02-12 compared with 2025-02-13 · 147 added, 200 removed, 897 unchanged (28% of the section changed)

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Changes in estimated useful lives of satellites

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Estimated useful lives of satellites

As discussed in Note 2 to the consolidated financial statements, the Company’s satellites are depreciated using the straight-line method over their respective estimated useful lives, which are currently estimated to be 17.5 years.

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As discussed in Note 4, as of December 31, 2025, the Company had recorded $1,766,052 thousand in total depreciable property and equipment, net of accumulated depreciation, which included its satellites.

We identified the evaluation of the determination of changes in estimated useful lives of satellites as a critical audit matter.

We identified the evaluation of the determination of estimated useful lives of satellites as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate the Company’s estimated useful lives of the satellites.

Specifically, assessing the factors used to determine the estimated useful lives required subjective auditor

judgment due to the degree of uncertainty associated with the outcome of uncertain future events which required forward looking assumptions.

Specifically, assessing the factors used to determine the estimated useful lives required subjective auditor judgment due to

the degree of uncertainty associated with the outcome of uncertain future events which required forward looking assumptions.

Changes to the estimated useful lives of satellites could have a significant impact on the timing of recognition of depreciation expense and hosted payload revenue.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of an internal control related to the Company’s process to determine changes in the estimated useful lives of its satellites.

We evaluated the design and tested the operating effectiveness of an internal control related to the Company’s process to determine the estimated useful lives of its satellites.

We evaluated the factors the Company used to determine the estimated useful lives of the satellites by:

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• evaluating the effect of changes, if any, in the Company’s long-term strategy for use of the assets on the useful life estimates.

Evaluation of acquisition-date fair value of customer relationships

As discussed in Note 12 to the consolidated financial statements, on April 1, 2024, the Company acquired the remaining 80.5% of the outstanding shares and voting interest of Satelles, Inc.

that was not previously owned by the Company for consideration totaling $125.5 million.

The Company accounted for the acquired business using the acquisition method of accounting by recording assets acquired and liabilities assumed at their respective fair values.

As part of the transaction, the Company acquired customer relationship intangible assets with an acquisition date fair value of $57 million, which was determined using the multi-period excess earnings method.

We identified the evaluation of the fair value of customer relationship intangible assets acquired in the Satelles, Inc.

transaction as a critical audit matter.

Subjective auditor judgment was involved in evaluating certain assumptions, including the forecasted revenue growth, forecasted revenue attributable to customer contracts, forecasted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins, and the discount rate used to value the customer relationships.

Changes in these assumptions used could have a significant impact on the acquisition-date fair value of this intangible asset.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition-date valuation process, including controls over the assumptions discussed above.

We evaluated the forecasted revenue growth, forecasted revenue attributable to customer contracts, and EBITDA margins used to value the customer relationships by comparing them to those of the Company’s peers and Satelles Inc.’s historical and forecasted results.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the Company’s discount rate used to value the customer relationships by comparing the Company’s inputs to the discount rate to publicly available data for comparable entities and assessing the resulting discount rate.

We have served as the Company’s auditor since 2022.

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Interest expense, net ( 88,252 ) ( 91,134 ) ( 90,387 )

Loss on extinguishment of debt — — ( 1,187 )

Other income, net 534 4,012 107

Other income (expense), net

( 2,915 ) 534 4,012

Total other expense ( 91,167 ) ( 90,600 ) ( 86,375 )

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Net income attributable to common stockholders per share - basic $ 1.07 $ 0.95 $ 0.12

Net income (loss) attributable to common stockholders per share - diluted

Net income attributable to common stockholders per share - diluted

$ 1.06 $ 0.94 $ 0.12

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Foreign currency translation adjustments 3,064 ( 3,143 ) ( 58 )

Unrealized (loss) gain on cash flow hedges, net of tax (see Note 7 )

Unrealized loss on cash flow hedges, net of tax (see Note 7 )

( 20,929 ) ( 12,493 ) ( 17,598 )

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Cumulative translation adjustments — — — ( 58 ) — ( 58 )

Unrealized gain on cash flow hedges, net of tax

Unrealized loss on cash flow hedges, net of tax

— — — ( 17,598 ) — ( 17,598 )

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Depreciation and amortization 210,207 203,127 320,000

Loss on extinguishment of debt — — 1,187

Stock-based compensation (net of amounts capitalized) 51,579 63,457 57,455

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Payments on the Term Loan ( 33,024 ) ( 114,194 ) ( 72,315 )

Borrowings under the Revolving Credit Facility

Payments on the Revolving Credit Facility

( 50,000 ) — —

Repurchases of common stock ( 186,475 ) ( 407,725 ) ( 247,019 )

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Iridium Communications Inc.

(the “Company”), a Delaware corporation, offers voice and data communications services and products to businesses, U.S.

and international government agencies and other customers on a global basis.

The Company is a provider of mobile voice and data communications services via a constellation of low earth orbiting satellites.

(the “Company”), a Delaware corporation, offers global voice, data and positioning, navigation and timing (“PNT”) satellite services to businesses, U.S.

and international government agencies and other customers.

The Company is a provider of its satellite services via a constellation of low earth orbiting satellites.

The Company holds various licenses and authorizations from the U.S.

Federal Communications Commission (the “FCC”) and from international and foreign regulatory bodies that permit the Company to conduct its business, including the operation of its satellite constellation.

As a result, there are no material differences between the information presented in these consolidated financial statements of the Company and the financial information of Iridium Holdings, Iridium Satellite and their subsidiaries, on a consolidated basis, other than as a result of tax provisions as a result of Iridium Holdings, Iridium Satellite and their subsidiaries being classified as flow-through entities for U.S.

federal income tax purposes.

The Company’s operations are conducted through, and its operating assets are owned by, its principal operating subsidiary, Iridium Satellite LLC (“Iridium Satellite”), Iridium Satellite’s immediate parent, Iridium Holdings LLC, and their subsidiaries, resulting in no material differences between the information presented in these consolidated financial statements and the financial information of Iridium Holdings, Iridium Satellite and their subsidiaries, on a consolidated basis.

Significant Accounting Policies and Basis of Presentation

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Adopted and Recently Issued Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

This guidance improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

During the year ended December 31, 2024, the Company adopted ASU 2023-07, as required, the effects of which are presented in Note 16 .

In December 2023, the FASB issued ASU No.

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The amendments in ASU 2023-09 address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

The Company intends to apply the new guidance effective for the year ending December 31, 2025, as required.

The Company is currently evaluating the effect ASU 2023-09 may have on its consolidated financial statements and related disclosures.

During the year ended December 31, 2025, the Company adopted ASU 2023-09, as required, the effects of which are presented in Note 12 .

Adoption of ASU 2023-09 affects only the Company’s disclosures and does not impact results of operations or financial condition.

Fair Value Measurements

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Translation adjustments are accumulated in a separate component of stockholders’ equity.

Transaction gains or losses are classified as other income (expense), net in the accompanying consolidated statements of operations and comprehensive income (loss).

Transaction gains or losses are classified as other income (expense), net in the accompanying consolidated statements of operations and comprehensive income.

In instances where the financial statements of a foreign entity in a highly inflationary economy are material, they are remeasured as if the functional currency were the reporting currency.

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The fair value of restricted stock units (“RSUs”) is equal to the closing price of the underlying common stock on the grant date.

The fair value of an award that is ultimately expected to vest is recognized on a straight-line basis over the requisite service or performance period and is classified in the consolidated statements of operations and comprehensive income (loss) in a manner consistent with the classification of the recipient’s compensation.

The fair value of an award that is ultimately expected to vest is recognized on a straight-line basis over the requisite service or performance period and is classified in the consolidated statements of operations and comprehensive income in a manner consistent with the classification of the recipient’s compensation.

The expected vesting of the Company’s performance-based RSUs is based upon the probability that the Company achieves the defined performance goals.

The level of achievement of performance goals, if any, is determined by the Compensation Committee.

Stock-based awards to non-employee consultants are expensed at their grant-date fair value as services are provided according to the terms of their agreements and are classified in selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income (loss).

The following table presents the classification of stock-based compensation by line item on the balance sheet and statement of operations:

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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 consolidated statements of operations and comprehensive income (loss), 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 associated with the hedged items.

Within the consolidated statements of operations and comprehensive income, the gains and losses related to cash flow hedges are recognized within interest expense, net, as this is the same financial statement line item associated with the hedged items.

Cash flows from hedging activities are included in operating activities within the Company’s consolidated statements of cash flows, which is the same category as the item being hedged.

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Any impairment loss would be measured as the excess of the assets’ carrying amount over their fair value.

Intangible Assets

Intangible Assets and Goodwill

The Company’s intangible assets with finite lives 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.

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The Company’s trade names, spectrum and licenses are expected to generate cash flows indefinitely.

Goodwill is the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired.

The Company’s goodwill is attributable primarily to expected synergies and the assembled workforce of Satelles, Inc.

Goodwill is not amortized, but is tested for impairment at the reporting unit level, at least annually, during the fourth quarter, or more frequently if indicators of potential impairment exist.

The Company operates in a single reporting unit, and the possibility of impairment is assessed by comparing the carrying amount of the reporting unit to its estimated fair value.

The Company determines the estimated fair value of the reporting unit based on a combination of the market approach using comparable public companies (guideline company method) and the income approach using discounted cash flows.

These valuation techniques involve the use of estimates and assumptions.

The Company can use a qualitative test, known as “Step 0,” or a quantitative method to determine whether impairment has occurred.

Under the Step 0 test, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value.

Qualitative factors may include, but are not limited to, economic conditions, industry and market considerations, cost factors, overall financial performance of the reporting unit and other entity and reporting unit specific events.

If after assessing these qualitative factors, the Company determines it is “more-likely-than-not” that the fair value of the reporting unit is less than the carrying value, then performing the Step 1 quantitative test is necessary.

In 2025, the Company elected to implement Step 0 and was not required to conduct the quantitative analysis.

As noted, goodwill was recorded in 2024, upon the acquisition of Satelles, Inc.

No impairment was recorded during 2025 or 2024.

Revenue Recognition

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Revenue for fixed-per-user access fees is billed monthly in advance and generally recognized over the month, or related usage period, in which the services are provided to the end user.

The Company sells prepaid services in the form of e-vouchers and prepaid cards.

Company sells prepaid services in the form of e-vouchers and prepaid cards.

A liability is established equal to the cash paid upon purchase for the e-voucher or prepaid card.

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government’s dedicated gateway.

These services include unlimited global standard and secure voice, low and high-speed data, paging, broadcast and Distributed Tactical Communications Services (“DTCS”) services for an unlimited number of Department of Defense (“DoD”) and other federal subscribers.

Under this contract, revenue is based on the annual fee for the fixed-price contract with unlimited subscribers and is recognized on a straight-line basis over each contractual year, with equal payments submitted monthly.

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The effect of potentially dilutive common shares from the conversion of outstanding convertible preferred securities was computed using the as-if converted method at the stated conversion rate.

The Company’s unvested RSUs awarded to the board of directors contain non-forfeitable rights to dividends and therefore are considered to be participating securities in periods of net income.

The calculation of basic and diluted net income per share excludes net income attributable to these unvested RSUs from the numerator and excludes the impact of these unvested RSUs from the denominator.

Cash and Cash Equivalents

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Ground system 20,610 12,402

Building and leasehold improvements

Total other construction-in-process $ 158,623 $ 99,015

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Intellectual property 20 years 16,439 ( 11,420 ) 5,019

Assembled workforce 7 years 5,678 ( 5,678 ) —

Patents 14 - 20 years 587 ( 169 ) 418

14 - 20 years 587 ( 209 ) 378

Customer Relationships

57,000 ( 6,745 ) 50,255

Total 74,026 ( 18,374 ) 55,652

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Total estimated future amortization expense $ 51,703

During the year ended December 31, 2024, the Company acquired Satelles, Inc.

(see Note 12 ), resulting in a goodwill balance of $ 98.2 million as of December 31, 2024.

There was no goodwill balance as of December 31, 2023.

As of December 31, 2025 and 2024, the Company's goodwill balance was $ 98.9 million and $ 98.2 million, respectively.

The goodwill balance was a result of the acquisition of Satelles, Inc.

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 so 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 maturity of the Term Loan is in September 2030.

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 and $ 200.0 million on July 30, 2024.

The maturity 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 additional $125.0 million was issued at a price equal to 99.875 % of its face value, while the additional $200.0 million was issued at 99.0 % of its face value.

The proceeds from the March 2024 additional Term Loan were used for the acquisition of Satelles, Inc.

(see Note 12 ) on April 1, 2024.

The proceeds from the March 2024 Term Loan were used for the acquisition of Satelles, Inc.

on April 1, 2024.

In April 2024, the Company drew down $50.0 million on its Revolving Facility for general corporate purposes, including the funding of repurchases of its 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 repurchases of common stock.

The remaining proceeds from the July 2024 additional Term Loan were used for general corporate purposes, including repurchases of common stock.

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.

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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.

The Revolving Facility bears interest at the same rate (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 the Company has a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of less than 3.5 to 1, and a maturity date in September 2028.

The Company paid fees 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 were expensed as incurred.

The amounts expensed are included within interest expense.

In September 2023, the Company paid $ 3.8 million of issuance costs to refinance the Term Loan, which costs were deferred and will be amortized through the term of the loan.

Lenders making up approximately $ 16.8 million of the Term Loan did not participate in the refinancing.

Those portions of the Term Loan were replaced by new or existing lenders.

This resulted in an immaterial loss on extinguishment of debt, as the Company wrote off the unamortized debt issuance costs related to the lenders who were fully repaid in an exchange of principal.

The Company deferred an additional $ 1.2 million of third-party fees associated with the refinancing of the Term Loan and the Revolving Facility in September 2023.

In the fourth quarter of 2022, the Company elected to prepay $ 100.0 million of principal on the Term Loan.

This resulted in a $ 1.2 million loss on extinguishment of debt, as the Company wrote off the unamortized debt issuance costs related to this prepayment.

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 the Company has a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of less than 3.5 to 1.

As of December 31, 2025 and 2024, the Company reported an aggregate of $ 1,774.7 million and $ 1,807.7 million in borrowings under the Term Loan, respectively.

These amounts do not include $ 14.2 million and $ 16.9 million of net unamortized deferred financing costs as of December 31, 2025 and 2024, respectively.

The net principal balance in borrowings in the accompanying consolidated balance sheets as of December 31, 2024 and 2023 amounted to $ 1,790.9 million and $ 1,482.5 million, respectively.

The net principal balance in borrowings

in the accompanying consolidated balance sheets as of December 31, 2025 and 2024 amounted to $ 1,760.6 million and $ 1,790.9 million, respectively.

As of December 31, 2025 and 2024, based upon over-the-counter bid levels (Level 2 - market approach), the fair value of the borrowings under the Term Loan was $ 1,734.8 million and $ 1,802.1 million, respectively.

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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 will be paid in 2025 and will be applied to the Company’s required quarterly principal payments.

As such, it was classified under current short-term secured debt in the Company’s consolidated balance sheet as of December 31, 2024.

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.

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.

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Total interest incurred includes amortization of deferred financing fees and capitalized interest.

The Company incurred third-party financing costs of $ 15.9 million in connection with the refinancing of the Term Loan in September 2023, of which $ 14.7 million was expensed.

All third-party financing costs incurred during the years ended December 31, 2024 and 2023 were expensed.

All amounts expensed are included within interest expense on the consolidated statements of operations and comprehensive income (loss).

The Company 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 were expensed as incurred.

The Company also incurred $ 15.9 million in connection with the refinancing of the Term Loan in September 2023, of which $ 14.7 million was expensed.

All amounts expensed are included within interest expense on the consolidated statements of operations and comprehensive income.

There were no such expenses in 2025.

The following table presents the interest and amortization of deferred financing fees related to the Term Loan:

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Capitalized interest $ 4,599 $ 5,042 $ 5,086

As of December 31, 2024 and 2023, accrued interest under the Term Loan was $ 0.3 million and $ 1.0 million, respectively.

The following table presents future minimum principal repayments with respect to the Term Loan existing at December 31, 2024, by year and in the aggregate:

Accrued interest under the Term Loan was $ 0.3 million as of each of December 31, 2025 and 2024.

The following table presents future minimum principal repayments with respect to the Term Loan existing at December 31, 2025, by year:

Year ending December 31, Amount

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Total long-term debt, net $ 1,757,124

The table above includes only the cash flow sweep amount payable in 2025 with respect to 2024 excess cash.

The table above reflects the cash flow sweep amount paid in 2025 with respect to 2024 excess cash, covering partial payments through a portion of 2026.

The schedule excludes future amounts that may be required to be prepaid pursuant to the excess cash flow sweep provision of the Credit Agreement, as those amounts are not determinable in advance.

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Over the next 12 months, the Company expects any gains or losses for cash flow hedges amortized from accumulated other comprehensive income (loss) 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 consolidated statements of operations and comprehensive income (loss):

Year Ended December 31,

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(In thousands)

Unrealized (loss) gain, net of tax $ ( 12,493 ) $ ( 17,598 ) $ 58,668

Tax benefit (expense)

Unrealized loss, net of tax

$ ( 20,929 ) $ ( 12,493 ) $ ( 17,598 )

$ 6,308 $ 3,688 $ 5,379

Equity Transactions

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In December 2022, the Company’s Board of Directors initiated a quarterly dividend.

The Company paid dividends of $ 0.13 per share of common stock for each quarter of 2023 and for the first quarter of 2024.

The Company paid dividends of $ 0.14 per share of common stock for each of the quarters ended June 30, September 30 and December 31, 2024.

The Company paid dividends of $ 0.13 per share of common stock for the first quarter of 2024.

The Company paid dividends of $ 0.14 per share of common stock for each of the quarters ended June 30, September 30 and December 31, 2024 and March 31 and June 30, 2025.

The Company paid dividends of $ 0.15 per share of common stock for each of the quarters ended September 30, and December 31, 2025.

The dividends resulted in total payments of $ 62.9 million and $ 64.7 million during the years ended 2025 and 2024, respectively.

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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.

The Company repurchased and subsequently retired 14.0 million, 4.8 million and 6.8 million shares of its common stock during the years ended December 31, 2024, 2023 and 2022, respectively, for a total purchase price of $ 403.8 million, $ 244.6 million and $ 257.0 million, respectively, exclusive of $ 3.6 million and $1.4 million of excise taxes incurred in the year ended December 31, 2024 and 2023, respectively, with no such taxes incurred in the year ended December 31, 2022.

In addition, in

December 2023, the Company repurchased 26,000 shares for $ 1.0 million, which were settled and retired in January 2024.

The Company repurchased and subsequently retired 6.8 million, 14.0 million and 4.8 million shares of its common stock during the years ended December 31, 2025, 2024 and 2023, respectively, for a total purchase price of $ 185.0 million, $ 403.8 million and $ 244.6 million, respectively, exclusive of $ 1.5 million, $3.6 million, and $1.4 million of excise taxes incurred in the year

ended December 31, 2025, 2024 and 2023, respectively.

In addition, in December 2023, the Company repurchased 26,000 shares for $ 1.0 million, which were settled and retired in January 2024.

As such, these shares were recorded as treasury stock as of December 31, 2023.

As of December 31, 2025, $ 245.3 million remained available and authorized for repurchase under this program.

During the fourth quarter of 2025, the Company paused share repurchases to increase financial flexibility.

The following table summarizes the Company’s services revenue:

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During the years ended December 31, 2025, 2024 and 2023, the Company incurred lease expense of $ 5.7 million, $ 6.0 million and $ 5.2 million, respectively.

A portion of lease expense during these comparable periods was derived from leases that were not included within the ROU asset and liability balances shown above as they had terms shorter than twelve months and were therefore excluded from balance sheet recognition under ASU 2016-02.

The following table presents future payment obligations with respect to the Company’s operating leases in which it was the lessee at December 31, 2025, by year and in the aggregate:

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Total lease payments 45,094

Less effects of discounting

Discounted lease liability

Lessor Arrangements

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Lease income related to these agreements for the years ended December 31, 2025, 2024 and 2023 was $ 12.4 million, $ 12.4 million and $ 19.2 million, respectively.

The decreases in 2024 and 2023 as compared to 2022 were solely the result of the timing of the change in estimated useful life of the satellites.

Lease income is recorded as hosted payload and other data service revenue within service revenue on the Company’s consolidated statements of operations and comprehensive income (loss).

The decrease in 2024 and 2025 as compared to 2023 was solely the result of the timing of the change in estimated useful life of the satellites.

Lease income is recorded as hosted payload and other data service revenue within service revenue on the Company’s consolidated statements of operations and comprehensive income.

The following table presents future income, after giving effect to the extension of estimated useful lives of the satellites, with respect to the Company’s operating leases in which it was the lessor at December 31, 2025, by year and in the aggregate:

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(In thousands)

2025 $ 12,391

Thereafter 57,693

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Outstanding at December 31, 2022

2,970 $ 31.60

Granted 1,184 $ 57.85

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Outstanding at December 31, 2023

2,795 $ 40.24

Granted 2,613 $ 30.05

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Outstanding at December 31, 2024

3,870 $ 32.56

Granted 2,350 $ 29.77

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If the Company achieves the performance goals for the Executive RSUs at the end of the two-year performance period, 50 % of the number of Executive RSUs earned based on performance will then vest on the second anniversary of the grant date, and the remaining 50 % will then vest on the third anniversary of the grant date, in each case subject to the executive’s continued service as of the vesting date.

In March 2025, approximately 23,000 shares underlying Executive RSUs granted in March 2023 were forfeited as a result of performance targets not being fully achieved for the performance period ended December 31, 2024.

In March 2024 and 2023, the Company awarded approximately 83,000 and 55,000 additional shares related to performance-based RSUs granted to the Company’s executives for over-achievement of performance targets for the Executive RSUs with a performance period that ended December 31, 2023 and 2022, respectively.

In March 2022, the Company cancelled approximately 50,000 shares related to performance-based RSUs granted to the Company’s executives for under-achievement of performance targets for the performance period that ended December 31, 2021.

Stock Option Awards

The Company last granted stock options in 2019.

The stock option awards granted to employees generally (i) have a term of ten years, (ii) vest over four years with 25% vesting after the first year of service and the remainder vesting ratably on a quarterly basis thereafter, (iii) are contingent upon employment on the vesting date, and (iv) have an exercise price equal to the fair market value of the underlying shares at the date of grant.

The fair value of stock options was determined at the grant date using the Black-Scholes-Merton option pricing model.

The following table summarizes the Company’s stock option award activity:

Shares Weighted-

Exercise Price

Per Share Weighted-

Term (Years) Aggregate

(In thousands, except years and per share data)

Options outstanding at December 31, 2021 1,681 $ 9.35 3.28 $ 53,698

Cancelled or expired ( 1 ) 8.28

Exercised ( 494 ) 7.83 $ 18,992

Forfeited ( 1 ) 18.35

Options outstanding at December 31, 2022 1,185 $ 9.97 2.64 $ 49,094

Cancelled or expired ( 4 ) 10.25

Exercised ( 505 ) 7.84 $ 26,928

Options outstanding at December 31, 2023 676 $ 11.55 2.39 $ 20,036

Cancelled or expired — —

Exercised ( 357 ) 9.60 $ 6,678

Options outstanding and exercisable at December 31, 2024 319 $ 13.74 2.45 $ 4,881

The total fair value of the shares underlying stock options that vested during the years ended December 31, 2024 and 2023 was immaterial.

Acquisition of Satelles

On April 1, 2024, the Company acquired Satelles, Inc., a provider of satellite-based time and location services that complement and protect GPS and other GNSS systems.

This acquisition is intended to support the Company’s long-term business objectives.

The acquisition date fair value of the consideration paid to acquire the remaining 80.5 % of the outstanding shares and voting interest of Satelles that was not previously owned by the Company was approximately $ 125.5 million.

The Company accounted for the acquired business using the acquisition method of accounting by recording assets acquired and liabilities assumed at their respective fair values.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:

April 1, 2024

Fair Value Useful Life

(In thousands)

Cash $ 14,738

Other current assets 1,901

Customer relationships 57,000 12 years

Other noncurrent assets 7,188

Goodwill 98,186

Total identifiable assets acquired 179,013

Liabilities assumed ( 13,821 )

Net identifiable assets acquired $ 165,192

The Company acquired customer relationship intangible assets with an acquisition date fair value of $57.0 million, which was determined using the multi-period excess earnings method.

The Company included the following assumptions:

the forecasted revenue growth, forecasted revenue attributable to customer contracts, forecasted capital expenditures, forecasted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins, and the discount rate used to value the customer relationships.

Changes in these assumptions used could have a significant impact on the acquisition-date fair value of this intangible asset.

The customer relationships recognized were determined to have a useful life of 12 years.

The Company will amortize the customer relationships over their useful lives, utilizing the economic benefit model.

The goodwill recognized is attributable primarily to expected synergies and the assembled workforce of Satelles.

None of the goodwill is expected to be deductible for income tax purposes.

During the period ended December 31, 2024, the Company updated its estimate related to deferred taxes, which resulted in a decrease in goodwill and an increase to deferred tax assets of $2.1 million.

These updates are reflected in the table above.

The Company incurred $ 3.1 million of acquisition related costs that were expensed in the year ended December 31, 2024.

These costs are included within selling, general, and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss).

The amounts of revenue and earnings of Satelles included in the Company’s condensed consolidated statements of operations and comprehensive income (loss), excluding the impact of the Company’s remeasurement of its prior equity interest in Satelles, are as follows:

Three Months Ended

December 31, 2024 Period from Acquisition Date to

December 31, 2024

(In thousands) (In thousands)

Revenue $ 4,710 $ 12,637

Net loss ( 5,230 ) ( 12,758 )

The following unaudited pro forma data summarizes the combined company’s results of operations for the periods indicated as if the acquisition of Satelles had been completed as of the beginning of the comparable prior annual reporting period.

The unaudited pro forma data gives effect to actual operating results prior to the acquisition, adjusted to include the pro forma effect of amortization of intangibles and the elimination of intercompany sales and acquisition costs.

These pro forma amounts are not intended to be indicative of the results that would have actually been obtained if the acquisition had occurred as of the beginning of the comparable prior annual reporting period or that may be obtained in the future.

Three Months Ended December 31, Twelve Months Ended December 31,

2024 2023 2024 2023

(In thousands) (In thousands)

Revenue $ 212,990 $ 197,231 $ 832,553 $ 801,199

Net income (loss) 37,617 32,680 96,314 ( 11,379 )

Prior to the acquisition date, the Company accounted for its 19.5 % interest in Satelles as an equity-method investment.

The acquisition date fair value of the previous equity interest was $ 39.7 million and was included in the measurement of the consideration transferred.

The Company recognized a gain of $ 19.8 million as a result of remeasuring its prior equity interest in Satelles held before the business combination.

The gain is included within gain (loss) from equity method investments in the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2024.

The following table presents U.S.

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The following table presents a reconciliation of the U.S.

federal statutory income tax expense to the Company’s effective income tax provision.

federal statutory income tax expense to the Company’s effective income tax provision after the adoption of ASU 2023-09.

Any amounts that do not have a meaningful impact on this reconciliation are not separately disclosed.

Year Ended December 31,

(In thousands)

federal statutory tax rate

$ 30,411 21.0 %

State & local taxes, net of federal income tax effect (1)

Foreign tax effects

Effect of cross-border tax

Foreign-derived intangible income ( 4,027 ) ( 2.8 ) %

Research and development tax credits ( 5,470 ) ( 3.8 ) %

Foreign tax credits ( 2,408 ) ( 1.7 ) %

Nontaxable/Nondeductible items

Unrecognized Tax Benefits (UTBs) 493 0.3 %

Other adjustments

Equity compensation 2,414 1.7 %

Other 463 0.4 %

Total income tax expense (benefit)

$ 27,618 19.1 %

(1) For 2025, state taxes in Virginia made up the majority (greater than 50%) of the tax effect in this category.

The following table presents a reconciliation of the U.S.

federal statutory income tax expense to the Company’s effective income tax provision prior to the adoption of ASU 2023-09.

Any amounts that do not have a meaningful impact on this reconciliation are not separately disclosed.

Year Ended December 31,

(In thousands)

1 unchanged sentence

federal statutory tax rate $ 23,054 $ ( 997 )

$ 23,054 $ ( 997 ) $ 1,893

State tax expense (benefit), net of federal effect ( 1,999 ) 927

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Net deferred income tax liabilities $ ( 128,474 ) $ ( 112,302 )

Pursuant to ASC 740, the Company nets deferred tax assets and liabilities within the same jurisdiction.

Pursuant to ASC 740, Income Taxes, the Company nets deferred tax assets and liabilities within the same jurisdiction.

As of December 31, 2025, the Company had a net deferred tax asset of $ 2.1 million that is included in other assets on the balance sheet and a net deferred tax liability of $ 130.5 million.

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federal net operating loss carryforwards for 2018 and thereafter and interest expense carryforwards do not expire.

The Company had deferred tax assets related to the state net operating loss carryforwards of

approximately $ 55.9 million and $ 59.2 million as of December 31, 2024 and 2023, respectively.

The Company had deferred tax assets related to the state net operating loss carryforwards of approximately $ 50.7 million and $ 55.9 million as of December 31, 2025 and 2024, respectively.

The Company does not expect to fully utilize all of its state net operating losses within the respective carryforward periods and as such reflects a partial valuation allowance of $ 32.6 million and $ 32.8 million as of December 31, 2025 and 2024, respectively, against these deferred tax assets on its consolidated balance sheets.

The Company had deferred tax assets related to the foreign net operating loss carryforwards of approximately $ 0.4 million and $ 0.5 million, as of December 31, 2024 and 2023, respectively.

The Company had deferred tax assets related to the foreign net operating loss carryforwards of approximately $ 0.4 million for each of December 31, 2025 and 2024.

The Company does not expect to fully utilize all of its foreign net operating losses within the carryforward periods.

As such, the Company had recorded a partial valuation allowance of $ 0.1 million and $ 0.2 million as of December 31, 2024 and 2023, respectively, against these deferred tax assets on its consolidated balance sheets.

As such, the Company had recorded a partial valuation allowance of $ 0.1 million for each of December 31, 2025 and 2024, against these deferred tax assets on its consolidated balance sheets.

The timing and manner in which the Company will utilize the net operating loss carryforwards in any year, or in total, may be limited in the future as a result of changes in the Company’s ownership and any limitations imposed by the jurisdictions in which the Company operates.

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The Company had approximately $ 7.0 million and $ 7.9 million of deferred tax assets related to foreign tax credits as of December 31, 2025 and 2024, respectively, that expire in various amounts through 2035.

There is no valuation allowance on foreign tax credits as of December 31, 2024 and 2023.

There was no valuation allowance on foreign tax credits as of December 31, 2025 and 2024.

The Company has provided for U.S.

income taxes on all undistributed earnings of its significant foreign subsidiaries since the

Company does not indefinitely reinvest these undistributed earnings.

income taxes on all undistributed earnings of its significant foreign subsidiaries since the Company does not indefinitely reinvest these undistributed earnings.

The Company measures deferred tax assets and liabilities

using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be

recovered or settled.

The Company recognizes the effect on deferred tax assets and liabilities of a change in tax rates in income

in the period that includes the enactment date.

using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The Company recognizes the effect on deferred tax assets and liabilities of a change in tax rates in income in the period that includes the enactment date.

The following table presents the actual cash taxes paid by the Company after the adoption of ASU 2023-09.

Year Ended December 31,

2025 2024 2023

(In thousands)

Federal Income Taxes Paid $ 2,190 $ 800 $ —

State Income Taxes Paid

Illinois 531 304 *

Maine 521 * 266

Virginia 838 845 537

Other jurisdictions 469 926 661

Total State Income Taxes Paid 2,769 2,075 1,464

Foreign Income Taxes Paid

Brazil 1,494 1,160 1,875

Russia 470 1,092 646

Other foreign jurisdictions 84 121 240

Total Foreign Income Taxes Paid 2,048 2,373 2,761

Total Income Taxes Paid/Refund $ 7,007 $ 5,248 $ 4,225

*The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.

Uncertain Income Tax Positions

1 unchanged sentence

and various state and foreign jurisdictions.

Significant judgment is required

in evaluating tax positions and determining the provision for income taxes.

The Company establishes liabilities for tax-related

uncertainties based on estimates of whether, and the extent to which, additional taxes may be due.

These liabilities are

established when the Company believes that certain positions might be challenged despite its belief that its tax return positions

are fully supportable.

Significant judgment is required in evaluating tax positions and determining the provision for income taxes.

The Company establishes liabilities for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes may be due.

These liabilities are established when the Company believes that certain positions might be challenged despite its belief that its tax return positions are fully supportable.

The Company adjusts these liabilities in light of changing facts and circumstances, such as the outcome of a tax audit.

The provision for income taxes includes the impact of changes to these liabilities.

The Company had unrecognized tax benefits of approximately $ 3.5 million as of December 31, 2024 primarily due to additional U.S.

The Company had unrecognized tax benefits of approximately $ 3.9 million as of December 31, 2025 primarily due to U.S.

tax credits from prior periods.

13 unchanged sentences

Currently, there are no U.S.

federal, state or foreign jurisdiction tax audits pending.

federal, state or foreign jurisdiction tax audits

The Company’s corporate U.S.

19 unchanged sentences

The Company recorded $ 23.5 million of power and data service fee revenue from Aireon for each of the years ended December 31, 2025, 2024 and 2023.

Receivables due from Aireon under this agreement totaled $2.0 million as of December 31, 2024.

There were no receivables due under this agreement as of December 31, 2023.

Receivables due from Aireon under this agreement totaled $2.0 million as of December 31, 2025 and 2024.

Under two services agreements, the Company also provides Aireon with administrative services and support services, the fees for which are paid monthly.

17 unchanged sentences

Net income attributable to common stockholders per share - diluted $ 1.06 $ 0.94 $ 0.12

For the year ended December 31, 2022, 0.2 million unvested service-based RSUs were excluded from the computation of basic net income per share and not included in the computation of diluted net income per share, as the effect would be anti-dilutive, and 0.2 million unvested performance-based RSUs were not included in the computation of basic and diluted net income per share, as certain performance criteria have not been satisfied.

There were no such shares for the years ended December 31, 2024 or 2023.

The following table presents the incremental number of shares underlying stock options and RSUs outstanding with anti-dilutive effects:

Year Ended December 31,

2024 2023 2022

(In thousands)

Performance-based RSUs — — 210

Segments, Significant Customers, Supplier and Service Providers and Geographic Information

2 unchanged sentences

The CODM evaluates the segment operating performance based on consolidated net income and reviews components of cost of services, including certain costs related to delivering engineering and other support services, which is considered a significant expense.

Costs to support engineering and other support services, included within cost of services in the accompanying consolidated statements of operations and comprehensive income (loss), were $93.7 million, $77.6 million and $35.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Costs to support engineering and other support services, included within cost of services in the accompanying consolidated statements of operations and comprehensive income, were $110.1 million, $93.7 million and $77.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The CODM considers budget-to-actual forecast and prior view-to-current view variances on a monthly and quarterly basis for evaluating performance and making decisions about allocating capital and other resources on a consolidated basis.

The Company derived approximately 27 %, 25 % and 21 % of its total revenue in the years ended December 31, 2024, 2023 and 2022, respectively, from prime contracts or subcontracts with agencies of the U.S.

The Company derived approximately 29 %, 28 % and 25 % of its total revenue in the years ended December 31, 2025, 2024 and 2023, respectively, from prime contracts with the U.S.

government or subcontracts with prime contractors with U.S.

government contracts.

For the years ended December 31, 2025, 2024 and 2023, no single commercial customer accounted for more than 10% of the Company’s total revenue.

2 unchanged sentences

The Company contracts for the manufacture of its subscriber equipment primarily from a limited number of manufacturers and utilizes other sole source suppliers for certain component parts of its devices.

Should events or circumstances prevent the manufacturer or the suppliers from producing the equipment or component parts, the Company’s business could be adversely

affected until the Company is able to move production to other facilities of the manufacturer or secure a replacement manufacturer or an alternative supplier for such component parts.

Should events or circumstances prevent the manufacturer or the suppliers from producing the equipment or component parts, the Company’s business could be adversely affected until the Company is able to move production to other facilities of the manufacturer or secure a replacement manufacturer or an alternative supplier for such component parts.

The following table summarizes net property and equipment by geographic area:

26 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data