Iridium Communications Inc. 10-K

Item 8. Financial Statements and Supplementary Data Page Iridium Communications Inc.: Report of KPMG LLP, Independent Registered Public Accounting Firm (PCAOB ID: 185 ) 57 Consolidated Balance Sheets 59 Consolidated Statements of Operations and Comprehensive Income (Loss) 60 Consolidated Statements of Changes in Stockholders’ Equity 61 Consolidated Statements of Cash Flows 62 Notes to Consolidated Financial Statements 63 56 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors Iridium Communications Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Iridium Communications Inc. and subsidiaries (the Company) as of December 31, 2025 and December 31, 2024, the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and December 31, 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 12, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. 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. The Company applied judgment in determining the useful lives based on factors such as engineering data relating to the operation and performance of its satellite network, the Company’s long-term strategy for using the assets, and the manufacturer’s estimated design life for the assets. 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 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 57 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 the estimated useful lives of its satellites. We evaluated the factors the Company used to determine the estimated useful lives of the satellites by: • comparing the Company’s useful life estimates to the manufacturer’s estimated design life, the Company’s longevity assessment for the satellites, and the lives of its first-generation satellite constellation • reading publicly available information on the estimated useful lives of similar assets • inquiring of operations and engineering management personnel regarding satellite operation and performance • evaluating the effect of changes, if any, in the Company’s long-term strategy for use of the assets on the useful life estimates. /s/ KPMG LLP We have served as the Company’s auditor since 2022. McLean, Virginia February 12, 2026 58 Iridium Communications Inc. Consolidated Balance Sheets (In thousands, except per share data) December 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 96,501 $ 93,526 Accounts receivable, net 93,772 98,803 Inventory 73,764 81,283 Prepaid expenses and other current assets 12,466 19,118 Total current assets 276,503 292,730 Property and equipment, net 1,978,153 2,080,544 Equity method investments 39,773 42,516 Other assets 50,710 66,618 Intangible assets, net 86,928 90,877 Goodwill 98,942 98,186 Total assets $ 2,531,009 $ 2,671,471 Liabilities and stockholders’ equity Current liabilities: Short-term secured debt 3,402 33,118 Accounts payable 17,676 19,715 Accrued expenses and other current liabilities 49,465 64,811 Deferred revenue 41,127 51,570 Total current liabilities 111,670 169,214 Long-term secured debt, net 1,757,124 1,757,767 Deferred income tax liabilities, net 130,529 114,140 Deferred revenue, net of current portion 40,316 38,259 Other long-term liabilities 28,770 15,454 Total liabilities 2,068,409 2,094,834 Commitments and contingencies Stockholders’ equity: Common stock, $0.001 par value, 300,000 shares authorized, 104,918 and 110,357 shares issued and outstanding at December 31, 2025 and 2024, respectively 105 110 Additional paid-in capital 880,643 964,348 Accumulated deficit ( 418,554 ) ( 406,092 ) Accumulated other comprehensive income, net of tax 406 18,271 Total stockholders’ equity 462,600 576,637 Total liabilities and stockholders’ equity $ 2,531,009 $ 2,671,471 See notes to consolidated financial statements 59 Iridium Communications Inc. Consolidated Statements of Operations and Comprehensive Income (Loss) (In thousands, except per share amounts) Year Ended December 31, 2025 2024 2023 Revenue: Services $ 633,958 $ 614,914 $ 584,454 Subscriber equipment 81,109 91,416 105,136 Engineering and support services 156,592 124,352 101,133 Total revenue 871,659 830,682 790,723 Operating expenses: Cost of services (exclusive of depreciation and amortization) 197,577 178,140 158,710 Cost of subscriber equipment 50,426 52,427 66,410 Research and development 19,758 28,422 20,269 Selling, general and administrative 157,711 168,182 143,706 Depreciation and amortization 210,207 203,127 320,000 Total operating expenses 635,679 630,298 709,095 Operating income 235,980 200,384 81,628 Other income (expense): Interest expense, net ( 88,252 ) ( 91,134 ) ( 90,387 ) Other income (expense), net ( 2,915 ) 534 4,012 Total other expense ( 91,167 ) ( 90,600 ) ( 86,375 ) Income (loss) before income taxes and equity in net earnings of affiliates 144,813 109,784 ( 4,747 ) Income tax (expense) benefit ( 27,618 ) ( 12,259 ) 26,251 Gain (loss) on equity method investments ( 2,823 ) 15,251 ( 6,089 ) Net income 114,372 112,776 15,415 Weighted average shares outstanding - basic 107,240 118,566 125,598 Weighted average shares outstanding - diluted 107,837 119,792 127,215 Net income attributable to common stockholders per share - basic $ 1.07 $ 0.95 $ 0.12 Net income attributable to common stockholders per share - diluted $ 1.06 $ 0.94 $ 0.12 Comprehensive income (loss): Net income $ 114,372 $ 112,776 $ 15,415 Foreign currency translation adjustments 3,064 ( 3,143 ) ( 58 ) Unrealized loss on cash flow hedges, net of tax (see Note 7 ) ( 20,929 ) ( 12,493 ) ( 17,598 ) Comprehensive income (loss) $ 96,507 $ 97,140 $ ( 2,241 ) See notes to consolidated financial statements 60 Iridium Communications Inc. Consolidated Statements of Changes in Stockholders’ Equity (In thousands) Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity Common Stock Shares Amount Balance at December 31, 2022 125,902 $ 126 $ 1,124,610 $ 51,563 $ ( 47,744 ) $ 1,128,555 Stock-based compensation — — 64,139 — — 64,139 Stock options exercised and awards vested 1,788 2 3,956 — — 3,958 Stock withheld to cover employee taxes ( 162 ) — ( 9,680 ) — — ( 9,680 ) Repurchases and retirements of common stock ( 4,752 ) ( 5 ) ( 43,946 ) — ( 203,068 ) ( 247,019 ) Net income — — — — 15,415 15,415 Dividends declared — — ( 49,613 ) — — (49,613) Cumulative translation adjustments — — — ( 58 ) — ( 58 ) Unrealized loss on cash flow hedges, net of tax — — — ( 17,598 ) — ( 17,598 ) Balance at December 31, 2023 122,776 123 1,089,466 33,907 ( 235,397 ) 888,099 Stock-based compensation — — 68,327 — — 68,327 Stock options exercised and awards vested 1,761 1 3,440 — — 3,441 Stock withheld to cover employee taxes ( 194 ) — ( 6,702 ) — — ( 6,702 ) Repurchases and retirements of common stock ( 13,986 ) ( 14 ) ( 124,240 ) — ( 283,471 ) ( 407,725 ) Net income — — — — 112,776 112,776 Dividends declared — — ( 65,943 ) — — ( 65,943 ) Cumulative translation adjustments — — — ( 3,143 ) — ( 3,143 ) Unrealized loss on cash flow hedges, net of tax — — — ( 12,493 ) — ( 12,493 ) Balance at December 31, 2024 110,357 110 964,348 18,271 ( 406,092 ) 576,637 Stock-based compensation — — 57,261 — — 57,261 Stock options exercised and awards vested 2,063 2 1,124 — — 1,126 Stock withheld to cover employee taxes ( 668 ) — ( 18,683 ) — — ( 18,683 ) Repurchases and retirements of common stock ( 6,834 ) ( 7 ) ( 59,634 ) — ( 126,834 ) ( 186,475 ) Net income — — — — 114,372 114,372 Dividends declared — — ( 63,773 ) — — ( 63,773 ) Cumulative translation adjustments — — — 3,064 — 3,064 Unrealized loss on cash flow hedges, net of tax — — — ( 20,929 ) — ( 20,929 ) Balance at December 31, 2025 104,918 $ 105 $ 880,643 $ 406 $ ( 418,554 ) $ 462,600 See notes to consolidated financial statements 61 Iridium Communications Inc. Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net income $ 114,372 $ 112,776 $ 15,415 Adjustments to reconcile net income to net cash provided by operating activities: Deferred income taxes 22,167 6,560 ( 31,828 ) Depreciation and amortization 210,207 203,127 320,000 Stock-based compensation (net of amounts capitalized) 51,579 63,457 57,455 Amortization of deferred financing fees 2,784 2,523 3,739 (Gain) loss on equity method investments 2,823 ( 15,251 ) 6,089 All other items, net 3,829 715 732 Changes in operating assets and liabilities: Accounts receivable 5,577 ( 6,366 ) ( 9,538 ) Inventory 4,706 9,822 ( 50,958 ) Prepaid expenses and other current assets 7,368 ( 2,985 ) ( 1,153 ) Other assets 6,379 5,543 3,019 Accounts payable ( 4,705 ) ( 18,808 ) 2,759 Accrued expenses and other current liabilities ( 12,173 ) 9,790 4,899 Deferred revenue ( 10,238 ) 6,845 ( 2,961 ) Other long-term liabilities ( 4,602 ) ( 1,793 ) ( 2,756 ) Net cash provided by operating activities 400,073 375,955 314,913 Cash flows from investing activities: Capital expenditures ( 100,280 ) ( 69,890 ) ( 73,487 ) Investment in related parties — — ( 10,000 ) Acquisition of Satelles, Inc., net of cash acquired — ( 110,713 ) — Net cash used in investing activities ( 100,280 ) ( 180,603 ) ( 83,487 ) Cash flows from financing activities: Borrowings under the Term Loan — 419,783 63,940 Payments on the Term Loan ( 33,024 ) ( 114,194 ) ( 72,315 ) Borrowings under the Revolving Credit Facility 50,000 — — Payments on the Revolving Credit Facility ( 50,000 ) — — Repurchases of common stock ( 186,475 ) ( 407,725 ) ( 247,019 ) Payment of deferred financing fees — ( 345 ) ( 1,162 ) Proceeds from exercise of stock options 1,126 3,441 3,958 Tax payments upon settlement of stock awards ( 18,683 ) ( 6,702 ) ( 9,680 ) Payment of common stock dividends ( 62,854 ) ( 64,739 ) ( 64,774 ) Net cash used in financing activities ( 299,910 ) ( 170,481 ) ( 327,052 ) Effect of exchange rate changes on cash and cash equivalents 3,092 ( 3,215 ) ( 1,274 ) Net increase (decrease) in cash and cash equivalents and restricted cash 2,975 21,656 ( 96,900 ) Cash, cash equivalents and restricted cash, beginning of period 93,526 71,870 168,770 Cash, cash equivalents and restricted cash, end of period $ 96,501 $ 93,526 $ 71,870 See notes to consolidated financial statements Iridium Communications Inc. Consolidated Statements of Cash Flows, continued (In thousands) Year Ended December 31, 2025 2024 2023 Supplemental cash flow information: Interest paid, net of amounts capitalized $ 90,157 $ 95,311 $ 91,936 Income taxes paid, net $ 7,007 $ 5,248 $ 4,225 Supplemental disclosure of non-cash investing and financing activities: Property and equipment received but not paid for yet $ 10,945 $ 13,169 $ 7,070 Capitalized stock-based compensation $ 5,682 $ 4,870 $ 6,684 Dividends accrued on common stock $ 3,454 $ 2,535 $ 1,315 See notes to consolidated financial statements 62 Iridium Communications Inc. Notes to Consolidated Financial Statements December 31, 2025 1. Organization and Business Iridium Communications Inc. (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. 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. 2. Significant Accounting Policies and Basis of Presentation Principles of Consolidation and Basis of Presentation The Company has prepared the consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The accompanying consolidated financial statements include the accounts of (i) the Company, (ii) its wholly owned subsidiaries, and (iii) all less than wholly owned subsidiaries that the Company controls. All material intercompany transactions and balances have been eliminated. The Company has reclassified certain items in the consolidated financial statements for the prior periods to be comparable with the classification for the year ended December 31, 2025. These reclassifications had no effect on previously reported net income. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to revenue recognition, the useful lives and recoverability of long-lived and intangible assets, income taxes, stock-based compensation, the incremental borrowing rate for its leases, and contingencies, among others. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses. Actual results could differ materially from those estimates. Adopted and Recently Issued Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). 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. 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 The Company evaluates assets and liabilities subject to fair value measurements on a recurring and non-recurring basis to determine the appropriate level to classify them for each reporting period. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. 63 The fair value hierarchy consists of the following tiers: • Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; • Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The fair value estimates are based upon certain market assumptions and information available to the Company. The carrying values of the following financial instruments approximated their fair values as of December 31, 2025 and 2024: cash and cash equivalents, prepaid expenses and other current assets, accounts receivable, accounts payable, and accrued expenses and other current liabilities. Fair values approximate their carrying values because of their short-term nature. The Level 2 cash equivalents include money market funds, commercial paper and short-term U.S. agency securities. The Company also classifies its derivative financial instruments as Level 2. In determining fair value of Level 2 assets, the Company uses a market approach utilizing valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. Leases For new leases, the Company determines if an arrangement is or contains a lease at inception. Leases are included as right-of-use (“ROU”) assets within other assets and ROU liabilities within accrued expenses and other liabilities and within other long-term liabilities on the Company’s consolidated balance sheets. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Certain leases contain variable contractual obligations as a result of future base rate escalations which are estimated based on observed trends and included within the measurement of present value. The Company’s leases do not provide an implicit rate. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases, such as teleport network facilities, the Company elected the practical expedient to combine lease and non-lease components as a single lease component. Taxes assessed on leases in which the Company is either a lessor or lessee are excluded from contract consideration and variable payments when measuring new lease contracts or remeasuring existing lease contracts. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and receivables. The majority of cash is invested into a money market fund with U.S. treasuries, agency mortgage-backed securities and/or U.S. government guaranteed debt. While the Company maintains its cash and cash equivalents with financial institutions with high credit ratings, it often maintains those deposits in federally insured financial institutions in excess of federally insured limits. The Company performs credit evaluations of its customers’ financial condition and records reserves to provide for estimated credit losses. Accounts receivable are due from both domestic and international customers. 64 Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of ninety days or less to be cash equivalents. These investments, along with cash deposited in institutional money market funds, regular interest bearing depository accounts and non-interest bearing depository accounts, are classified as cash and cash equivalents on the accompanying consolidated balance sheets. Investments Investments where the Company has the ability to exercise significant influence, but does not control, are accounted for under the equity method of accounting and are included in Equity Method Investments on the Company’s consolidated balance sheets. Significant influence typically exists if the Company has a 20% to 50% ownership interest in the investee. Under this method of accounting, the Company’s share of the net earnings (losses) of the investee is included in loss on equity method investments on the consolidated statement of operations and comprehensive income (loss). Investments where the Company has less than 20% ownership interest in the investee and lacks the ability to exercise significant influence are accounted for under ASC 321-10-35, Investments - Equity Securities. Under this topic, the Company’s investment equals its cost, less impairment, if any. For investments without a readily determinable fair value, the Company performs a qualitative assessment to determine if any impairment indicator is present. If an indicator is present, the Company determines whether fair value was less than the investment’s carrying value. If the fair value is less than its carrying value or if there is an observable price change through a similar security from the same issuer, the Company would record an impairment charge. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and are subject to late fee penalties. Management develops its estimate of an allowance for uncollectible receivables based on the Company’s experience with specific customers, aging of outstanding invoices, its understanding of customers’ current economic circumstances and its own judgment as to the likelihood that the Company will ultimately receive payment. The Company writes off its accounts receivable when balances ultimately are deemed uncollectible. The allowance for doubtful accounts was not material as of December 31, 2025 and 2024. Foreign Currencies Generally, the functional currency of the Company’s foreign consolidated subsidiaries is the local currency. Assets and liabilities of its foreign subsidiaries are translated to U.S. dollars based on exchange rates at the end of the reporting period. Income and expense items are translated at the weighted-average exchange rates prevailing during the reporting period. 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. 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. In these instances, the financial statements of those entities are remeasured into the reporting currency. A highly inflationary economy is one that has cumulative inflation of approximately 100 % or more over a three-year period. Deferred Financing Costs Direct and incremental costs incurred in connection with securing debt financing are deferred and are amortized as additional interest expense using the effective interest method over the term of the related debt. Capitalized Interest During the development and construction periods of a project, such as the financing of the Company’s current satellite constellation, the Company capitalizes interest. Capitalization ceases when the asset is ready for its intended use or when these activities are substantially suspended. If some portions of a project are substantially complete and ready for use and other portions have not yet reached that stage, the Company ceases capitalizing costs on the completed portion of the project but continues to capitalize for the incomplete portion of the project. 65 Inventory Inventory consists primarily of finished goods, although the Company also maintains an inventory of raw materials from third-party manufacturers. The Company outsources manufacturing of subscriber equipment to a third-party manufacturer and purchases accessories from third-party suppliers. The Company’s cost of inventory includes an allocation of overhead, including payroll and payroll-related costs of employees directly involved in bringing inventory to its existing condition, and freight. Inventories are valued using the average cost method and are carried at the lower of cost or net realizable value. The Company’s expense for excess and obsolete inventory was not material during the years ended December 31, 2025, 2024 or 2023. The Company has a manufacturing agreement with Benchmark Electronics Inc. (“Benchmark”) to manufacture most of its subscriber equipment. Pursuant to the agreement, the Company may be required to purchase excess materials at cost plus a contractual markup if the materials are not used in production within the periods specified in the agreement. Benchmark will then repurchase such materials from the Company at the same price paid by the Company, as required for the production of the subscriber equipment. The following table summarizes the Company’s inventory balance: December 31, 2025 2024 (In thousands) Finished goods $ 52,352 $ 52,496 Raw materials 22,431 29,605 Inventory valuation reserve ( 1,019 ) ( 818 ) Total $ 73,764 $ 81,283 The Company’s raw materials balance includes $ 19.6 million and $ 21.2 million at December 31, 2025 and December 31, 2024, respectively, of inventory held on consignment at third-party manufacturers. Stock-Based Compensation The Company accounts for stock-based compensation at estimated fair value. The fair value of stock options is determined at the grant date using the Black-Scholes-Merton option pricing model. 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 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. The following table presents the classification of stock-based compensation by line item on the balance sheet and statement of operations: As of and For Year Ended December 31, 2025 2024 (In thousands) Property and equipment, net $ 5,221 $ 4,393 Inventory 461 477 Cost of subscriber equipment 25 35 Cost of services (exclusive of depreciation and amortization) 20,387 16,122 Research and development 1,809 1,664 Selling, general and administrative 29,358 45,636 Total stock-based compensation $ 57,261 $ 68,327 66 Property and Equipment Property and equipment is carried at cost less accumulated depreciation. The Company calculates depreciation expense using the straight-line method over the useful lives of each asset. The Company applies judgment in determining the useful lives based on factors such as engineering data, 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. The Company assesses the current estimated operational life of the satellites, including the potential impact of environmental factors on the satellites, ongoing operational enhancements and software upgrades when evaluating the useful lives of its satellites. Additionally, the Company reviews engineering data relating to the operation and performance of its satellite network. During the fourth quarter of 2023, the Company updated its estimate of the satellites’ remaining useful lives based on the health of the constellation and related engineering data. As a result, the estimated useful lives of the satellites were extended by five years, from 12.5 years to 17.5 years. The impact of this change for the year ended December 31, 2023 was a decrease in depreciation expense of approximately $ 27.8 million and a decrease in hosted payload and other service revenue of approximately $ 2.3 million. For the year ended December 31, 2023, the impact of the change in useful lives of the satellites resulted in an increase in basic and diluted net income per share of $ 0.21 and $ 0.20 , respectively. During the quarter ended June 30, 2023, the Company launched five of its remaining six ground spare satellites. Following completion of successful on-orbit testing of the five launched satellites, the Company has no plans to use, develop or launch the remaining ground spare. As the Company believed the construction-in-progress associated with the remaining ground spare satellite would no longer be used, the Company wrote off the full amount remaining in construction-in-progress for that satellite by recording accelerated depreciation expense of $ 37.5 million, which more than offset the decrease in depreciation expense related to the increase in estimated useful lives of the satellites described above. Repairs and maintenance costs are expensed as incurred. Derivative Financial Instruments The Company uses derivatives to manage its exposure to fluctuating interest rate risk on variable rate debt. Its derivatives are measured at fair value and are recorded on the consolidated balance sheets within other assets and other current liabilities. When the Company’s derivatives are designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in accumulated other comprehensive income (loss) within the Company’s consolidated balance sheets and subsequently recognized in earnings when the hedged items impact earnings. Any ineffective portion of a derivative’s change in fair value will be recognized in earnings in the same period in which the hedged interest payments affect earnings. Within the 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. See Note 7 for further information. Long-Lived Assets The Company assesses its long-lived assets for impairment when indicators of impairment exist. Recoverability of assets is measured by comparing the carrying amounts of the assets to the future undiscounted cash flows expected to be generated by the assets. Any impairment loss would be measured as the excess of the assets’ carrying amount over their fair value. 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. If any indicators were present, the Company would test for recoverability by comparing the carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset. If those net undiscounted cash flows do not exceed the carrying amount (i.e., the asset is not recoverable), the Company would perform the next step, which is to determine the fair value of the asset and record an impairment loss, if any. The Company evaluates the useful lives for these intangible assets each reporting period to determine whether events and circumstances warrant a revision in their remaining useful lives. The Company’s intangible assets with indefinite lives are not amortized but are tested for impairment annually, or more frequently if events or changes in circumstances indicate the asset may be impaired. The Company’s trade names, spectrum and licenses are expected to generate cash flows indefinitely. 67 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 The Company derives its revenue primarily as a wholesaler of satellite communications products and services. The primary types of revenue include (i) service revenue (access and usage-based airtime fees), (ii) subscriber equipment revenue, and (iii) revenue generated by providing engineering and support services to commercial and government customers. In addition to the discussion immediately below, see Note 9 for further discussion of the Company’s revenue recognition. Wholesaler of satellite communications products and services Pursuant to wholesale agreements, the Company sells its products and services to service providers and recognizes revenue as it fulfills its performance obligations to the service providers, based on amounts that reflect the consideration to which it expects to be entitled to in exchange for those products and services. The service providers, in turn, sell the products and services to other distributors or directly to the end users. The Company recognizes revenue when an arrangement exists, services or equipment are transferred, the transaction price is determined, the arrangement has commercial substance, and collection of consideration is probable. Contracts with multiple performance obligations At times, the Company sells services and equipment through arrangements that bundle equipment, airtime and other services. For these revenue arrangements, when the Company sells services and equipment in bundled arrangements and determines that it has separate distinct performance obligations, the Company allocates the bundled contract price among the various performance obligations based on each deliverable’s stand-alone selling price. If the stand-alone selling price is not directly observable, the Company estimates the amount to be allocated for each performance obligation based on observable market transactions or the residual approach. When the Company determines the performance obligations are not distinct, the Company recognizes revenue on a combined basis. To the extent the Company’s contracts include variable consideration, the transaction price includes both fixed and variable consideration. The variable consideration contained within the Company’s contracts with customers may include discounts, credits and other similar items. When a contract includes variable consideration, the Company evaluates the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, the Company includes the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration estimates are updated at the end of each quarter. Service revenue sold on a stand-alone basis Service revenue is generated from the Company’s service providers through usage of its satellite system and through fixed monthly access fees per user charged to service providers. Revenue for usage is recognized when usage occurs and is billed in arrears with payments generally submitted within 30 days. 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 68 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. The Company recognizes revenue from (i) the prepaid services upon the use of the e-voucher or prepaid card by the customer and (ii) the estimated pattern of use. The Company does not offer refunds for unused prepaid services. Services sold to the U.S. government The Company provides airtime and airtime support to U.S. government and other authorized customers pursuant to the Enhanced Mobile Satellite Services (“EMSS”) contract. Under the terms of this agreement, authorized customers continue to utilize airtime services, provided through the U.S. 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 War (“DoW”) (previously referred to as Department of Defense) 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. The U.S. government purchases its subscriber equipment from third-party distributors and not directly from the Company. Subscriber equipment sold on a stand-alone basis The Company recognizes subscriber equipment sales and the related costs when title to the equipment (and the risks and rewards of ownership) passes to the customer, typically upon shipment. Customers are billed when inventory is shipped, and payment is generally due within 30 days. Customers do not have rights of return without prior consent from the Company. Government engineering and support services The Company provides maintenance services to the U.S. government’s dedicated gateway. This revenue is recognized ratably over the periods in which the services are provided; the related costs are expensed as incurred. Other government and commercial engineering and support services The Company also provides engineering services to assist customers in developing new technologies for use on the Company’s satellite system. Fees to customers under these agreements are generally based on milestones, and payments are submitted as milestones are achieved. The revenue associated with fixed-fee contracts is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying its performance obligation. The Company does not include purchases of goods from a third party in its evaluation of costs incurred. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. The revenue associated with cost-plus-fixed-fee contracts is recognized to the extent of estimated costs incurred plus the applicable fees earned. The Company considers fixed fees under cost-plus-fixed-fee contracts to be earned in proportion to the allowable costs incurred in performance of the contract. Research and Development Research and development costs are charged to expense in the period in which they are incurred. Advertising Costs Costs associated with advertising and promotions are expensed as incurred. Advertising expenses were $ 1.4 million, $ 1.3 million and $ 1.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. Income Taxes The Company accounts for income taxes using the asset and liability approach, which requires the recognition of tax benefits or expenses for temporary differences between the financial reporting and tax bases of assets and liabilities. A valuation allowance is established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company also recognizes a tax benefit from uncertain tax positions only if it is “more likely than not” that the position is sustainable based on its technical merits. The Company’s policy is to recognize interest and penalties on uncertain tax positions as a component of income tax expense. 69 Net Income Per Share The Company calculates basic net income per share by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share takes into account the effect of potentially dilutive common shares when the effect is dilutive. The effect of potentially dilutive common shares, including common stock issuable upon exercise of outstanding stock options, is computed using the treasury stock method. 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. 3. Cash and Cash Equivalents Cash and Cash Equivalents The following table summarizes the Company’s cash and cash equivalents: December 31, Recurring Fair Value Measurement 2025 2024 (In thousands) Cash and cash equivalents: Cash $ 24,260 $ 16,913 Money market funds 72,241 76,613 Level 2 Total cash and cash equivalents $ 96,501 $ 93,526 4. Property and Equipment The following table presents the composition of property and equipment: December 31, Useful Life 2025 2024 (In thousands) Satellite system 17.5 years $ 3,379,167 $ 3,242,845 Ground system 5-7 years 83,935 76,994 Equipment 3-5 years 58,144 55,041 Internally developed software and purchased software 3-7 years 401,479 369,080 Building and leasehold improvements 5-39 years 39,049 39,157 Total depreciable property and equipment 3,961,774 3,783,117 Less: accumulated depreciation ( 2,195,722 ) ( 1,991,387 ) Total depreciable property and equipment, net of accumulated depreciation 1,766,052 1,791,730 Land 8,037 8,037 Construction-in-process: Spare satellites 45,441 181,762 Other construction-in-process 158,623 99,015 Total property and equipment, net of accumulated depreciation $ 1,978,153 $ 2,080,544 70 Other construction-in-process consisted of the following: December 31, 2025 2024 (In thousands) Internally developed and purchased software $ 123,844 $ 80,665 Equipment 3,684 5,896 Ground system 20,610 12,402 Building and leasehold improvements 10,485 52 Total other construction-in-process $ 158,623 $ 99,015 Depreciation expense was $ 206.3 million, $ 195.9 million and $ 318.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. See “Property and Equipment” in Note 2 above for more information with respect to changes in depreciation expense incurred. 5. Intangible Assets and Goodwill Intangible Assets The following table presents identifiable intangible assets: December 31, 2025 Useful Life Gross Carrying Value Accumulated Amortization Net Carrying Value (In thousands) Indefinite life intangible assets: Trade names Indefinite $ 21,195 $ — $ 21,195 Spectrum and licenses Indefinite 14,030 — 14,030 Total 35,225 — 35,225 Definite life intangible assets: Intellectual property 20 years 16,439 ( 11,854 ) 4,585 Patents 14 - 20 years 587 ( 249 ) 338 Customer Relationships 12 years 57,000 ( 10,220 ) 46,780 Total 74,026 ( 22,323 ) 51,703 Total intangible assets $ 109,251 $ ( 22,323 ) $ 86,928 December 31, 2024 Useful Life Gross Carrying Value Accumulated Amortization Net Carrying Value (In thousands) Indefinite life intangible assets: Trade names Indefinite $ 21,195 $ — $ 21,195 Spectrum and licenses Indefinite 14,030 — 14,030 Total 35,225 — 35,225 Definite life intangible assets: Intellectual property 20 years 16,439 ( 11,420 ) 5,019 Patents 14 - 20 years 587 ( 209 ) 378 Customer Relationships 12 years 57,000 ( 6,745 ) 50,255 Total 74,026 ( 18,374 ) 55,652 Total intangible assets $ 109,251 $ ( 18,374 ) $ 90,877 71 Amortization expense was $ 3.9 million, $ 7.2 million and $ 1.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. The following table presents future amortization expense with respect to intangible assets existing at December 31, 2025, by year and in the aggregate: Year ending December 31, Amount (In thousands) 2026 $ 8,523 2027 6,815 2028 7,252 2029 5,988 2030 5,153 Thereafter 17,972 Total estimated future amortization expense $ 51,703 Goodwill 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. 6. Debt Term Loan and Revolving Facility Pursuant to a credit agreement (as amended to date, the “Credit Agreement”), the Company previously entered into a term loan totaling $ 1,500.0 million (as 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 and Revolving Facility are in September 2030 and September 2028, respectively. During the year ended December 31, 2024, the Company borrowed an additional $325.0 million under its Term Loan, comprised of $ 125.0 million on March 25, 2024, issued at a price equal to 99.875 % of its face value, and $ 200.0 million on July 30, 2024, issued at 99.0 % of its face value. The additional amounts borrowed are fungible with the original $1,500.0 million and have the same maturity date, interest rate and other terms. The proceeds from the March 2024 Term Loan were used for the acquisition of Satelles, Inc. on April 1, 2024. In 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 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. The Company typically selects a one-month interest period, with the result that interest is calculated using one-month SOFR. Interest is paid monthly on the last business day of the month. Principal payments, payable quarterly, equal $ 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 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 72 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. The Company had no outstanding borrowings under the Revolving Facility as of December 31, 2025 or 2024. The Credit Agreement restricts the Company’s ability to incur liens, engage in mergers or asset sales, pay dividends, repay subordinated indebtedness, incur indebtedness, make investments and loans, and engage in other transactions as specified in the Credit Agreement. The Credit Agreement provides for specified exceptions, including baskets measured as a percentage of trailing twelve months of earnings before interest, taxes, depreciation and amortization (“EBITDA”) and unlimited exceptions in the case of incurring indebtedness and liens and making investments, dividend payments, and payments of subordinated indebtedness, based on achievement and maintenance of specified leverage ratios. The Credit Agreement also contains an annual mandatory prepayment sweep mechanism with respect to a portion of the Company’s excess cash flow (as defined in the Credit Agreement) in the event the Company’s net leverage ratio rises above 3.5 to 1. The Company’s mandatory excess cash flow prepayment, as specified in the Credit Agreement, was $ 28.6 million as of December 31, 2024. This amount was paid in May 2025. As a result, no quarterly principal payment was required for the last three quarters of 2025, and no quarterly principal payment will be required for the first three quarters of 2026. As of December 31, 2025, the Company was below the specified leverage ratio and therefore the mandatory prepayment sweep was not required. The Credit Agreement permits repayment, prepayment and repricing transactions. The Credit Agreement contains no financial maintenance covenants with respect to the Term Loan. With respect to the Revolving Facility, the Credit Agreement requires the Company to maintain a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of no greater than 6.25 to 1 if more than 35 % of the Revolving Facility has been drawn. The Credit Agreement contains other customary representations and warranties, affirmative and negative covenants, and events of default. The Company was in compliance with all covenants as of December 31, 2025. Interest on Debt Total interest incurred includes amortization of deferred financing fees and capitalized interest. 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: Year Ended December 31, 2025 2024 2023 (In thousands) Total interest incurred $ 98,128 $ 102,758 $ 102,321 Amortization of deferred financing fees $ 2,922 $ 2,660 $ 3,958 Capitalized interest $ 4,599 $ 5,042 $ 5,086 Accrued interest under the Term Loan was $ 0.3 million as of each of December 31, 2025 and 2024. 73 Total Debt 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 (In thousands) 2026 $ 3,402 2027 18,260 2028 18,260 2029 18,260 2030 1,716,538 Total debt commitments 1,774,720 Less: Original issuance discount 14,194 Less: Total short-term debt 3,402 Total long-term debt, net $ 1,757,124 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. 7. Derivative Financial Instruments The Company is exposed to interest rate fluctuations related to its Term Loan. The Company has reduced its exposure to fluctuations in the cash flows associated with changes in the variable interest rate by entering into offsetting positions through the use of interest rate hedges. This will reduce the negative impact of increases in the variable rate over the term of the derivative contracts. These contracts are not used for trading or other speculative purposes. Historically, the Company has not incurred, and does not expect to incur in the future, any losses as a result of counterparty default. Hedge effectiveness of the current interest rate cap agreement (the “Cap”) is based on a long-haul hypothetical derivative methodology and includes all changes in value. The Company formally assesses, both at the hedge’s inception and on an ongoing quarterly basis, whether the designated derivative instruments are highly effective in offsetting changes in the cash flows of the hedged items. When the hedging instrument is sold, expires, is terminated, is exercised, no longer qualifies for hedge accounting, is de-designated, or is no longer probable, hedge accounting is discontinued prospectively. Interest Rate Cap In July 2021, the Company entered into the Cap, which had an effective date of December 2021. The Cap manages the Company’s exposure to interest rate movements on a portion of the Term Loan through November 2026. The Cap, as modified to date, currently provides the Company with the right to receive payment from the counterparty if one-month SOFR exceeds 1.436 %. The Company pays a fixed monthly premium based on an annual rate of 0.31 % for the Cap. The Cap carried a notional amount of $ 1.0 billion as of December 31, 2025 and 2024. The Cap, which was not affected by the expansion of the Term Loan in July 2024 and March 2024 or the repricing of the Term Loan in June 2024 and September 2023, is designed to mirror the terms of the Term Loan and to offset the cash flows being hedged. The Company designated the Cap as a cash flow hedge of the variability of the SOFR-based rate interest payments on the Term Loan. The effective portion of the Cap’s change in fair value will be recorded in accumulated other comprehensive income (loss). Any ineffective portion of the Cap’s change in fair value will be recorded in current earnings as interest expense. Fair Value of Derivative Instruments As of December 31, 2025 and 2024, the Company had an asset balance of $ 17.0 million and $ 47.3 million, respectively, for the fair value of the Cap, and a liability balance of $ 2.6 million and $ 5.6 million, respectively, for the fair value of the Cap premium. Both the Cap and the Cap premium are recorded within other assets on the consolidated balance sheet. 74 During each of the years ended December 31, 2025, 2024 and 2023 the Company collectively incurred $ 3.3 million in net interest expense for the cost of the interest rate hedges. Interest expense was reduced by $ 28.5 million, $ 38.2 million and $ 36.2 million for the years ended December 31, 2025, 2024 and 2023, respectively, for payments received related to the Cap. Gains and losses resulting from fair value adjustments to the Cap are recorded within accumulated other comprehensive income within the Company’s consolidated balance sheet and reclassified to interest expense on the dates that interest payments become due. Cash flows related to the derivative contracts are included in cash flows from operating activities on the consolidated statements of cash flows. Over the next 12 months, the Company expects any gains or losses for cash flow hedges amortized from accumulated other comprehensive income (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: Year Ended December 31, 2025 2024 2023 (In thousands) Unrealized loss, net of tax $ ( 20,929 ) $ ( 12,493 ) $ ( 17,598 ) Tax benefit $ 6,308 $ 3,688 $ 5,379 8. Equity Transactions Preferred Stock The Company is authorized to issue 2.0 million shares of preferred stock with a par value of $ 0.0001 per share. The Company previously issued 1.5 million shares of preferred stock. The remaining 0.5 million authorized shares of preferred stock remain undesignated and unissued as of December 31, 2025 and 2024. As of December 31, 2025 and 2024, there were no outstanding shares of preferred stock, as all previously designated and issued preferred stock was converted into common stock in prior periods. Dividends Stockholders are entitled to receive, when and if declared by the Company’s Board of Directors from time to time, such dividends and other distributions in cash, stock or property from the Company’s assets or funds legally and contractually available for such purposes. In December 2022, the Company’s Board of Directors initiated a quarterly dividend. The Company paid dividends of $ 0.13 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. The Company’s liability related to dividends on common stock was $ 3.5 million and $ 2.5 million as of December 31, 2025 and 2024, respectively. Share Repurchase Program Since February 2021, the Company’s Board of Directors has authorized the repurchase of up to $ 1,500.0 million of the Company’s common stock, including the most recent approval in September 2024 of $500.0 million through December 31, 2027. This time frame can be extended or shortened by the Board of Directors. Repurchases may be made from time to time on the open market at prevailing prices or in negotiated transactions off the market. The Company records share repurchases at cost, which includes broker commissions and related excise taxes. All shares are immediately retired upon repurchase in accordance with the board-approved policy. When treasury shares are retired, the Company’s policy is to allocate the excess of the repurchase price over the par value of shares acquired first, to additional paid-in capital, and then to retained earnings/accumulated deficit. The portion to be allocated to additional paid-in capital is calculated by applying a percentage, determined by dividing the number of shares to be retired by the number of shares outstanding, to the balance of additional paid-in capital as of the date of retirement. 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 75 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. 9. Revenue The following table summarizes the Company’s services revenue: Year Ended December 31, 2025 2024 2023 (In thousands) Commercial services: Voice and data $ 232,237 $ 226,197 $ 219,242 IoT data 181,380 166,166 141,036 Broadband 50,720 56,095 57,878 Hosted payload and other data (1) 61,586 60,160 60,298 Total commercial services 525,923 508,618 478,454 Government services 108,035 106,296 106,000 Total services $ 633,958 $ 614,914 $ 584,454 (1) Includes immaterial revenue related to the Company’s operating leases in which it is a lessor (see Note 10 for additional information). The following table summarizes the Company’s engineering and support services revenue: Year Ended December 31, 2025 2024 2023 (In thousands) Commercial $ 7,597 $ 7,307 $ 11,050 Government 148,995 117,045 90,083 Total $ 156,592 $ 124,352 $ 101,133 The Company’s contracts with customers generally do not contain performance obligations with terms in excess of one year. As such, the Company does not disclose details related to the value of performance obligations that are unsatisfied as of the end of the reporting period. The total value of any performance obligations that extend beyond a year is immaterial to the financial statements. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the consolidated balance sheets. The Company bills amounts under its agreed-upon contractual terms at periodic intervals (for services), upon shipment (for equipment), or upon achievement of contractual milestones or as work progresses (for engineering and support services). Billing may occur subsequent to revenue recognition, resulting in unbilled accounts receivable (contract assets). The Company may also receive payments from customers before revenue is recognized, resulting in deferred revenue (contract liabilities). The Company recognized revenue that was previously recorded as deferred revenue in the amounts of $ 52.1 million, $ 36.9 million and $ 31.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. 76 The Company has also recorded costs of obtaining contracts expected to be recovered in prepaid expenses and other current assets (contract assets or commissions), that are not separately disclosed on the consolidated balance sheets. The commissions are recognized over the estimated usage period. The following table presents contract assets not separately disclosed: Year Ended December 31, 2025 2024 (In thousands) Contract Assets: Commissions $ 1,603 $ 1,058 Other contract costs $ 1,626 $ 1,798 10. Leases The Company has operating leases for land, office space, satellite network operations center (“SNOC”) facilities, system gateway facilities, a warehouse and a distribution center. The Company also has operations and maintenance (“O&M”) agreements that include leases associated with two teleport network facilities. Some of the Company’s leases include options to extend the leases for up to 12 years. The Company does not include term extension options as part of its present value calculation of lease liabilities unless it is reasonably certain to exercise those options. As of December 31, 2025, the Company’s weighted-average remaining lease term relating to its operating leases was 9.6 years, and the weighted-average discount rate used to calculate the operating lease liability payment was 6.8 %. The following table summarizes the Company’s lease-related assets and liabilities: Leases Classification December 31, 2025 December 31, 2024 (In thousands) Operating lease assets Noncurrent Other assets $ 27,147 $ 14,285 Total lease assets $ 27,147 $ 14,285 Operating lease liabilities Current Accrued expenses and other current liabilities $ 4,069 $ 5,043 Noncurrent Other long-term liabilities $ 26,333 11,059 Total lease liabilities $ 30,402 $ 16,102 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, Leases. 77 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: Year Ending December 31, Amount (In thousands) 2026 $ 4,648 2027 3,915 2028 4,202 2029 4,962 2030 4,162 Thereafter 23,205 Total lease payments 45,094 Less effects of discounting ( 14,692 ) Discounted lease liability $ 30,402 Lessor Arrangements Operating leases in which the Company is a lessor consist primarily of hosting agreements with Aireon LLC (“Aireon”) (see Note 13 ) and L3Harris Technologies, Inc. (“L3Harris”) for space on the Company’s satellites. These agreements provide for a fee that will be recognized over the estimated useful lives of the satellites, which is now approximately 17.5 years, prospectively from the change in estimated useful lives of the satellites that occurred in the fourth quarter of 2023. 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 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: Year Ending December 31, Amount (In thousands) 2026 $ 12,391 2027 12,391 2028 12,391 2029 12,391 2030 12,391 Thereafter 57,693 Total lease income $ 119,648 78 11. Stock-Based Compensation In May 2023, the Company’s stockholders approved the amendment and restatement of the Company’s 2015 Equity Incentive Plan (as so amended and restated, the “Amended 2015 Plan”). As of December 31, 2025, the remaining aggregate number of shares of the Company’s common stock available for future grants under the Amended 2015 Plan was 9,068,350 . The Amended 2015 Plan provides for the grant of stock-based awards, including nonqualified stock options, incentive stock options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights and other equity securities to employees, consultants and non-employee directors of the Company and its affiliated entities. The number of shares of common stock available for issuance under the Amended 2015 Plan is reduced by (i) one share for each share of common stock issued pursuant to an appreciation award, such as a stock option or stock appreciation right with an exercise or strike price of at least 100 % of the fair market value of the underlying common stock on the date of grant, and (ii) 1.8 shares for each share of common stock issued pursuant to any stock award that is not an appreciation award, also referred to as a “full value award.” The Amended 2015 Plan allows the Company to utilize a broad array of equity incentives and performance cash incentives in order to secure and retain the services of its employees, directors and consultants, and to provide long-term incentives that align the interests of its employees, directors and consultants with the interests of the Company’s stockholders. The Company accounts for stock-based compensation at estimated fair value. Restricted Stock Units Beginning in March 2024, the RSUs granted to employees for service generally vest over three years , with 34 % vesting on the first anniversary of the grant date and the remainder vesting ratably on a quarterly basis thereafter, subject to continued employment. RSUs granted prior to March 2024 generally vested over four years , with 25 % vesting on the first anniversary of the grant date and the remainder vesting ratably on a quarterly basis thereafter, subject to continued employment. Some RSUs granted to employees for performance vest upon the completion of defined performance goals, subject to continued employment. The RSUs granted to non-employee directors generally vest in full on the first anniversary of the grant date. The RSUs granted to non-employee consultants generally vest 50 % on the first anniversary of the grant date, with the remaining 50 % vesting quarterly thereafter through the second anniversary of the grant date. The Company’s RSUs are classified as equity awards because the RSUs will be settled in the Company’s common stock upon vesting. The fair value of RSUs is determined at the grant date based on the closing price of the Company’s common stock on the date of grant. The related compensation expense is recognized over the service period, or shorter periods based on the retirement eligibility of certain grantees, based on the grant date fair value of the Company’s common stock and the number of shares expected to vest. The fair value of the awards is not remeasured at the end of each reporting period. RSUs do not carry voting rights until the RSUs are vested, although unvested RSUs and vested but unsettled RSUs granted to non-employee directors are entitled to accrue dividend equivalent rights, and shares (including additional shares issuable upon satisfaction of any accrued dividend equivalent rights) are issued upon settlement in accordance with the terms of the award. 79 The following table summarizes the Company’s RSU activity: RSUs Weighted- Average Grant Date Fair Value Per RSU (In thousands) Outstanding at December 31, 2022 2,970 $ 31.60 Granted 1,184 $ 57.85 Forfeited ( 76 ) $ 46.02 Released ( 1,283 ) $ 36.02 Outstanding at December 31, 2023 2,795 $ 40.24 Granted 2,613 $ 30.05 Forfeited ( 134 ) $ 36.85 Released ( 1,404 ) $ 42.72 Outstanding at December 31, 2024 3,870 $ 32.56 Granted 2,350 $ 29.77 Forfeited ( 222 ) $ 36.77 Released ( 1,949 ) $ 35.19 Outstanding at December 31, 2025 4,049 $ 29.45 Vested and unreleased at December 31, 2025 (1) 564 (1) These RSUs were granted to the Company’s Board of Directors as a part of their compensation for board and committee service and had vested but had not yet settled, meaning that the underlying shares of common stock had not been issued and released. As of December 31, 2025, the total unrecognized cost related to non-vested RSUs was approximately $ 38.9 million. This cost is expected to be recognized over a weighted-average period of 0.9 years. The Company recognized $ 51.6 million, $ 63.5 million and $ 57.5 million of stock-based compensation expense related to RSUs in the years ended December 31, 2025, 2024 and 2023, respectively. Service-Based RSUs The majority of the annual compensation the Company provides to non-employee members of its Board of Directors is paid in the form of RSUs. In addition, some members of the Company’s Board of Directors elect to receive their cash retainers, or a portion thereof, in the form of RSUs. An aggregate amount of approximately 89,000 , 60,000 and 55,000 service-based RSUs were granted to the Company’s non-employee directors as a result of these payments and elections during the years ended December 31, 2025, 2024 and 2023, respectively, with an estimated grant date fair value of $ 2.5 million, $ 1.9 million and $ 2.9 million, respectively. During the years ended December 31, 2025, 2024 and 2023, the Company granted approximately 1,448,000 , 1,691,000 and 746,000 service-based RSUs, respectively, to its employees, with an estimated aggregate grant date fair value of $ 41.7 million, $ 49.9 million and $ 43.0 million, respectively. During the years ended December 31, 2025, 2024 and 2023, the Company granted approximately 9,000 , 14,000 and 1,000 service-based RSUs, respectively, to non-employee consultants, with an estimated grant date fair value of $ 0.2 million, $ 0.8 million and $ 0.1 million, respectively. Performance-Based RSUs In March 2025, 2024 and 2023, the Company awarded approximately 534,000 , 461,000 and 193,000 performance-based RSUs, respectively, to the Company’s executives and employees (the “Bonus RSUs”), with an estimated grant date fair value of $ 16.9 million, $ 13.7 million and $ 11.9 million, respectively. Vesting of the Bonus RSUs is and was dependent upon the Company’s achievement of defined performance goals for the respective fiscal year in which the Bonus RSUs were granted. The Company records stock-based compensation expense related to performance-based RSUs when it is considered probable that the 80 performance conditions will be met. Management believes it is probable that substantially all of the 2025 Bonus RSUs will vest. The level of achievement, if any, of performance goals will be determined by the compensation committee of the Company’s Board of Directors and, if such goals are achieved, the 2025 Bonus RSUs will vest, subject to continued employment, in March 2026. Substantially all of the Bonus RSUs awarded in 2024 and 2023 vested in March 2025 and March 2024, respectively, upon the determination of the level of achievement of the respective performance goals. Additionally, during 2025, 2024 and 2023, the Company awarded approximately 269,000 , 303,000 and 134,000 performance-based RSUs, respectively, to the Company’s executives (the “Executive RSUs”). The estimated aggregate grant date fair value of the Executive RSUs for the 2025, 2024 and 2023 grants was $ 8.5 million, $ 9.0 million and $ 8.2 million, respectively. Vesting of the Executive RSUs is dependent upon the Company’s achievement of defined performance goals over a two-year period (the year of grant and the following year). The vesting of Executive RSUs will ultimately range from 0 % to 200 % of the number of shares underlying the Executive RSUs granted based on the level of achievement of the performance goals. 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. 12. Income Taxes The following table presents U.S. and foreign components of income (loss) before income taxes: Year Ended December 31, 2025 2024 2023 (In thousands) U.S. income (loss) $ 143,779 $ 106,340 $ ( 10,596 ) Foreign income 1,034 3,444 5,849 Total income (loss) before income taxes $ 144,813 $ 109,784 $ ( 4,747 ) The following table summarizes the components of the Company’s income tax provision: Year Ended December 31, 2025 2024 2023 (In thousands) Current taxes: Federal tax expense $ 1,372 $ 1,128 $ — State tax expense 2,104 1,731 1,032 Foreign tax expense 1,975 2,840 4,545 Total current tax expense 5,451 5,699 5,577 Deferred taxes: Federal tax expense (benefit) 20,603 10,524 ( 31,311 ) State tax expense (benefit) 1,339 ( 3,542 ) ( 226 ) Foreign tax expense (benefit) 225 ( 422 ) ( 291 ) Total deferred tax expense (benefit) 22,167 6,560 ( 31,828 ) Total income tax expense (benefit) $ 27,618 $ 12,259 $ ( 26,251 ) 81 The following table presents a reconciliation of the U.S. 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, 2025 (In thousands) Amount Rate U.S. federal statutory tax rate $ 30,411 21.0 % State & local taxes, net of federal income tax effect (1) 3,001 2.1 % Foreign tax effects 2,352 1.6 % Effect of cross-border tax Foreign-derived intangible income ( 4,027 ) ( 2.8 ) % Tax credits Research and development tax credits ( 5,470 ) ( 3.8 ) % Foreign tax credits ( 2,408 ) ( 1.7 ) % Nontaxable/Nondeductible items 389 0.3 % 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, 2024 2023 (In thousands) Expected tax expense (benefit) at U.S. federal statutory tax rate $ 23,054 $ ( 997 ) State tax expense (benefit), net of federal effect ( 1,999 ) 927 State tax valuation allowance ( 175 ) ( 338 ) Equity-based compensation 2,876 ( 10,234 ) Limitation on executive compensation deduction 3,535 4,011 Other nondeductible items 430 114 Tax credits ( 13,321 ) ( 21,817 ) Foreign taxes 2,563 3,570 Foreign derived intangible income ( 5,240 ) — Other adjustments 536 ( 1,487 ) Total income tax expense (benefit) $ 12,259 $ ( 26,251 ) 82 The following table presents the components of deferred tax assets and liabilities: December 31, 2025 2024 (In thousands) Deferred tax assets Long-term contracts $ 50,415 $ 50,878 Federal, state and foreign net operating losses, other carryforwards and tax credits 256,875 306,701 Other 29,536 27,107 Total deferred tax assets 336,826 384,686 Valuation allowance ( 32,941 ) ( 32,882 ) Net deferred tax assets 303,885 351,804 Deferred tax liabilities Fixed assets, intangibles and research and development expenditures ( 366,322 ) ( 385,972 ) Investment in joint venture ( 54,913 ) ( 64,071 ) Other ( 11,124 ) ( 14,063 ) Total deferred tax liabilities ( 432,359 ) ( 464,106 ) Net deferred income tax liabilities $ ( 128,474 ) $ ( 112,302 ) 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. The Company recognizes valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. In assessing the likelihood of realization, management considers: (i) future reversals of existing taxable temporary differences; (ii) future taxable income exclusive of reversing temporary differences and carryforwards; (iii) taxable income in prior carryback year(s) if carryback is permitted under applicable tax law; and (iv) tax planning strategies. The Company had deferred tax assets related to cumulative U.S. federal net operating loss carryforwards and interest expense carryforwards of approximately $ 155.7 million and $ 209.9 million as of December 31, 2025 and 2024, respectively. The 2017 U.S. federal net operating loss carryforward, if not utilized, will expire in 2037. The Company believes that the 2017 U.S. federal net operating losses will be utilized before the expiration date and, as such, no valuation allowance has been established for this deferred tax asset. U.S. 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 $ 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 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 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. The Company had approximately $ 45.3 million and $ 42.3 million of deferred tax assets related to research and development tax credits as of December 31, 2025 and 2024, respectively, that expire in various amounts from 2034 through 2045. As of December 31, 2025 and 2024, the Company established a reserve of approximately $ 3.9 million and $ 3.5 million on its estimate of R&D credits, respectively. 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 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. The Company measures deferred tax assets and liabilities 83 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 California 410 * * 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 The Company is subject to income taxes in the U.S. 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. 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 $ 3.9 million as of December 31, 2025 primarily due to U.S. tax credits from prior periods. There were unrecognized tax benefits of approximately $ 3.5 million as of December 31, 2024. Any changes in the next twelve months are not anticipated to have a significant impact on the results of operations, financial position or cash flows of the Company. The Company has elected an accounting policy to classify interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2025 and 2024, there were no interest and penalties on unrecognized tax benefits. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits which includes related interest and penalties: Year Ended December 31, 2025 2024 (In thousands) Balance at January 1, $ 3,454 $ 2,398 Change attributable to tax positions taken in a prior period 30 500 Change attributable to tax positions taken in the current period 463 556 Balance at December 31, $ 3,947 $ 3,454 The Company is subject to tax audits in all jurisdictions for which it files tax returns. Tax audits by their very nature are often complex and can require several years to complete. Currently, there are no U.S. federal, state or foreign jurisdiction tax audits 84 pending. The Company’s corporate U.S. federal and state tax returns from 2011 to 2024 remain subject to examination by tax authorities and the Company’s foreign tax returns from 2016 to 2024 remain subject to examination by tax authorities. 13. Related Party Transactions Aireon LLC and Aireon Holdings LLC The Company’s satellite constellation hosts the Aireon ® system. The Aireon system was developed by Aireon LLC, which the Company formed in 2011 and which received subsequent investments from several air navigation service providers (“ANSPs”) to provide a global air traffic surveillance service through a series of automatic dependent surveillance-broadcast (“ADS-B”) receivers on the Company’s satellites. Aireon has contracted to offer this service to ANSPs, which use the service to provide improved air traffic control services over the oceans, as well as polar and remote regions. Aireon also markets its data and services to airlines and other commercial users. The Company and the other Aireon investors hold their interests in Aireon Holdings LLC (“Aireon Holdings”) through an amended and restated LLC agreement (the “Aireon Holdings LLC Agreement”). Aireon Holdings holds 100% of the membership interests in Aireon, which is the operating entity. In June 2022, the Company entered into a subscription agreement with Aireon Holdings and invested $ 50.0 million in exchange for an approximately 6 % preferred membership interest. The Company’s investment in Aireon Holdings is accounted for as an equity method investment. The carrying value of the Company’s investment in Aireon Holdings was $ 38.5 million and $ 41.5 million as of December 31, 2025 and 2024, respectively. The investments by the Company prior to June 2022 had previously been written down to a carrying value of zero. At each of December 31, 2025 and 2024, the Company’s fully diluted ownership stake in Aireon Holdings was approximately 39.5 %, which is subject to partial future redemption under provisions contained in the Aireon Holdings LLC Agreement. Under the agreements with Aireon, Aireon will pay the Company fees of $ 200.0 million to host the ADS-B receivers, of which $ 126.5 million had been paid as of December 31, 2025. These fees are recognized over the estimated useful lives of the satellites, which is expected to result in revenue of approximately $9.3 million per year, following the change in estimate of the useful lives of the satellites that occurred in the fourth quarter of 2023. The Company recognized hosting fee revenue of $ 9.3 million, $ 9.3 million and $ 14.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. There were no receivables due from Aireon for hosting fees as of December 31, 2025 and 2024. Additionally, Aireon pays power and data services fees of approximately $23.5 million per year, in the aggregate, for the delivery of the air traffic surveillance data over the Iridium system. 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, 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. Aireon receivables due to the Company under these two agreements totaled $ 0.3 million and $ 1.7 million for the years ended December 31, 2025 and 2024, respectively. The Company and the other Aireon investors have agreed to participate pro rata, based on their respective fully diluted ownership stakes, in funding an investor bridge loan to Aireon. The Company’s maximum commitment under the investor bridge loan is $ 11.9 million. No bridge loan amounts were outstanding as of December 31, 2025 or 2024. 14. Net Income Per Share The Company calculates basic net income per common share by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. In periods of net income, diluted net income per share takes into account the effect of potentially dilutive common shares when the effect is dilutive. Potentially dilutive common shares include (i) shares of common stock issuable upon exercise of outstanding stock options and (ii) shares underlying RSUs that are contingently issuable upon achievement of certain service and performance requirements. The effect of potentially dilutive common shares is computed using the treasury stock method. 85 The following table summarizes the computations of basic and diluted net income per common share: Year Ended December 31, 2025 2024 2023 (In thousands, except per share data) Numerator: Net income attributable to common stockholders - basic and diluted $ 114,372 $ 112,776 $ 15,415 Denominator: Weighted average common shares - basic 107,240 118,566 125,598 Weighted average common shares - diluted 107,837 119,792 127,215 Net income attributable to common stockholders per share - basic $ 1.07 $ 0.95 $ 0.12 Net income attributable to common stockholders per share - diluted $ 1.06 $ 0.94 $ 0.12 15. Segments, Significant Customers, Supplier and Service Providers and Geographic Information The Company’s operations are primarily located in the United States and the Company operates in one business segment, providing global satellite communications services and products. Its Chief Executive Officer has been determined to be the Chief Operating Decision Maker (“CODM”) to make key operating decisions and assess performance. 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, 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 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. Approximately 46 % and 51 % of the Company’s accounts receivable balance at December 31, 2025 and 2024, respectively, was due from prime contracts or subcontracts with agencies of the U.S. government. As of December 31, 2025 and 2024, no single commercial customer accounted for more than 10 % of the Company’s total accounts receivable balance. 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. The following table summarizes net property and equipment by geographic area: December 31, 2025 2024 (In thousands) United States $ 369,337 $ 449,012 Satellites in orbit 1,607,403 1,630,121 All others 1,413 1,411 Total $ 1,978,153 $ 2,080,544 86 The following table summarizes revenue by geographic area: Year Ended December 31, 2025 2024 2023 (In thousands) United States $ 479,039 $ 437,984 $ 431,476 Canada 84,114 88,386 65,772 Other countries (1) 308,506 304,312 293,475 Total $ 871,659 $ 830,682 $ 790,723 (1) No single country in this group represented more than 10 % of revenue. Revenue is attributed to geographic area based on the billing address of the distributor. Service location and the billing address are often not the same. The Company’s distributors sell services directly or indirectly to end users, who may be located or use the Company’s products and services elsewhere. The Company does not know the geographical distribution of end users because it does not contract directly with them. The Company is exposed to foreign currency exchange fluctuations from sales made and costs incurred in foreign currencies. 16. Employee Benefit Plan The Company sponsors a defined-contribution 401(k) retirement plan (the “Plan”) that covers all employees. Employees are eligible to participate in the Plan on the first day of the month following the date of hire, and participants are 100 % vested from the date of eligibility. The Company matches employees’ contributions equal to 100 % of the salary deferral contributions up to 5 % of the employees’ eligible compensation each pay period. The Company’s expenses related to matching under the Plan were $ 6.2 million, $ 5.9 million and $ 4.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. 87 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.