Iridium Communications Q3 2025 Earnings Call Transcript

Key Takeaways

  • Negative Sentiment: Iridium warns the proposed EchoStar spectrum acquisition by Starlink will be disruptive and bring meaningful D2D competition by the late 2020s/2030s, and the company says it will not pursue a standalone 5G broadband follow-on constellation without a spectrum/finance partner.
  • Neutral Sentiment: Third-quarter operational EBITDA rose 10% to $136.6 million and service revenue grew ~4%, but management tightened 2025 service revenue guidance to about 3% and said expected PNT revenue has been delayed into future periods.
  • Positive Sentiment: Management paused the share buyback program to preserve cash (~$50 million by year-end), keep the raised dividend, pursue targeted M&A and deleveraging, and expects $1.5–$1.8 billion of total cash flow from 2026–2030.
  • Positive Sentiment: Iridium is accelerating its PNT business with growing commercial and government traction (including T‑Mobile/DoT work), positioning PNT as a high‑value broadcast service with potential cybersecurity and identity-authentication revenue streams.
  • Positive Sentiment: Progress on Iridium NTN Direct continues — on‑air testing from live satellites, roaming MOUs with Deutsche Telekom and others, with standards-based chipsets expected in 2026 and a service rollout targeted later in 2026.
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Earnings Conference Call
Iridium Communications Q3 2025
00:00 / 00:00

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Operator

Good day and Iridium's third quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ken Levy, Vice President of Investor Relations. Please go ahead.

Ken Levy
Ken Levy
VP of Investor Relations at Iridium

Thanks, Chloe. Good morning and Iridium's third quarter 2025 earnings call. Joining me on today's call are our CEO Matt Desch and our CFO Vince O'Neill.

Ken Levy
Ken Levy
VP of Investor Relations at Iridium

Today's call will begin with a discussion of our third quarter results followed by Q&A. I trust you've had the opportunity to review this morning's earnings release, which is available on the Investor Relations section of Iridium's website. Before I turn things over to Matt, I'd like to caution all participants that our call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1985. Forward-looking statements are statements that are not historical fact and include statements about our future expectations, plans, and prospects. Such forward-looking statements are based upon our current beliefs and expectations and are subject to risks which could cause actual results to differ from forward-looking statements. Such risks are more fully discussed in our filings with the Securities and Exchange Commission. Our remarks today should be considered in light of such risks.

Ken Levy
Ken Levy
VP of Investor Relations at Iridium

Any forward-looking statements represent our views only as of today, and while we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views or expectations change during the call. We'll also be referring to certain non-GAAP financial measures including operational EBITDA, pro forma free cash flow, free cash flow yield, and free cash flow conversion. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. Please refer to today's earnings release and the Investor Relations section of our website for further explanation of these non-GAAP financial measures and in reconciliation to the most directly comparable GAAP measures. With that, I'd like to turn the call over to Matt.

Matt Desch
Matt Desch
CEO at Iridium

Good morning, everyone.

Matt Desch
Matt Desch
CEO at Iridium

We just finished another solid quarter, which puts us on track to meet our.

Matt Desch
Matt Desch
CEO at Iridium

OEBITDA growth expectations for the year.

Matt Desch
Matt Desch
CEO at Iridium

I'd like to use my time today.

Matt Desch
Matt Desch
CEO at Iridium

To share some broader thoughts about the satellite space and our plans to address.

Matt Desch
Matt Desch
CEO at Iridium

We capitalize on the changing landscape. Vince will then recap Iridium's quarterly performance in greater detail and highlight the trends.

Matt Desch
Matt Desch
CEO at Iridium

We have seen since our last earnings call, as you are well aware, the recent.

Matt Desch
Matt Desch
CEO at Iridium

Proposed acquisition of EchoStar spectrum by Starlink to build a global D2D.

Matt Desch
Matt Desch
CEO at Iridium

Capability is a significant event for the satellite industry.

Matt Desch
Matt Desch
CEO at Iridium

We believe this acquisition will likely be disruptive to the status quo and will hasten the introduction of a global service that over time will connect new smartphones configured to use the spectrum. It could also accelerate the adoption of IoT devices that better compete with our global IoT services, at least better than the current D2D efforts using.

Matt Desch
Matt Desch
CEO at Iridium

Cellular spectrum on a regional basis in a few countries around the world.

Matt Desch
Matt Desch
CEO at Iridium

We acknowledge that more competition is coming.

Matt Desch
Matt Desch
CEO at Iridium

To our corner of the satellite market.

Matt Desch
Matt Desch
CEO at Iridium

We take this increased competition seriously and believe that this development will affect us as early as the latter years of this decade and most certainly into the 2030s. That being said, we do have exciting prospects as well as an enviable position in established growing markets because of the quality and durability of our partnerships and satellite solutions. We have tremendous experience developing thousands of Iridium connected solutions that are already in the market. This knowledge and our knowledge and our.

Matt Desch
Matt Desch
CEO at Iridium

Network will serve us well in responding.

Matt Desch
Matt Desch
CEO at Iridium

To the changes taking place in the industry today, to be clear, we will be proactive and pivot to strengthen our position amid ongoing changes to the satellite market landscape. We have a long history of doing this.

Matt Desch
Matt Desch
CEO at Iridium

This, and I'm confident we will be.

Matt Desch
Matt Desch
CEO at Iridium

Successful and can continue to grow revenues as the market for satellite services evolves. Iridium has focused on providing unique, specialized services in the satellite industry. While we have some areas of overlap with other satellite providers, we have never sought to participate in price-driven commodity markets, and we don't plan to now. Our current development of Iridium NTN Direct is a great entry point into providing a new standards-based D2D service that will expose us to a new and potentially larger market opportunity. However, broadband D2D is still a nascent, unproven market, and absent a partner with spectrum and committed capital to support this.

Matt Desch
Matt Desch
CEO at Iridium

Type of buildout, we have no plans.

Matt Desch
Matt Desch
CEO at Iridium

To go it alone.

Matt Desch
Matt Desch
CEO at Iridium

As we think about our long-term future and think about the services we'd include in a follow-on constellation, we will look to opportunities that provide us with the greatest return on capital, and for now 5G broadband doesn't fit that profile for us. Instead, we plan to build on our market strengths and focus even more deeply on the areas we are uniquely qualified to deliver. This includes continuing to prudently invest in new growth areas around our unique industrial-grade IoT and PNT services and exploring acquisitions in adjacent areas that are complementary. We will focus on regulated applications where demand for safety services are growing and our unique global satellite capability can provide a critical solution, such as maritime and aviation cockpit safety services.

Matt Desch
Matt Desch
CEO at Iridium

In addition, we believe Iridium has a strong and defensible position in the growing autonomous systems market as a fail-safe connection for drones, crewless vessels, and other autonomous vehicles. These vehicles will need multiple redundant connections for safety and reliability and will also appreciate our PNT technology to protect their location and navigation. As I said before, we will continue with our investment in Iridium NTN Direct. Our development work with standards-based IoT continues to provide an exciting opportunity and is complementary to other D2D efforts in the industry. We are making strong progress on this new service, and we're now in the process of on-air testing from live satellites. We are getting good traction from mobile network operators.

Matt Desch
Matt Desch
CEO at Iridium

You likely saw our announcements with Deutsche Telekom.

Matt Desch
Matt Desch
CEO at Iridium

and Karrier One, and there are more announcements to come. We're finding demand from MNOs for a global Iridium service onto which their IoT customers can roam, and we believe Iridium NTN Direct will augment our already successful.

Matt Desch
Matt Desch
CEO at Iridium

Growing IoT portfolio and expand our.

Matt Desch
Matt Desch
CEO at Iridium

Addressable market into the broader terrestrial IoT space. We will also seek to build or acquire intellectual property and assets that provide Iridium other outlets for growing new revenue streams that won't compete directly with these new D2D services coming in a few years. For example, Iridium has a very unique platform with our powerful new PNT service, which has the ability to reshape security applications and fortify terrestrial networks. We're seeing a lot of traction in a number of commercial and government industries that need an alternative to GPS for critical infrastructure protection for their navigation systems and accurate in-building time sources in addition to other security uses. We are also developing a unique quantum-safe cybersecurity product using our PNT signal that can improve identity access management and provide authentication for high-value transactions, tapping into the $20 billion identity verification industry and creating a new revenue stream.

Matt Desch
Matt Desch
CEO at Iridium

Even capturing a small portion of this growing market would be meaningful to a company of our size. We are also continuing our focus on U.S. national security missions, building on our.

Matt Desch
Matt Desch
CEO at Iridium

Collaboration with the U.S. government over the last 25 years.

Matt Desch
Matt Desch
CEO at Iridium

Iridium's network is relied upon for primary and backup communications, secure transmissions, specialized IoT services, tactical radios, and much more. Many government agencies depend on Iridium service for critical data transfer, asset management, and situational awareness, to name a few. Our technology is embedded into so many applications and missions, so it is not easily replaced by other satellite systems or evolving D2D services. We continue to discuss our EMSS contract.

Matt Desch
Matt Desch
CEO at Iridium

Renewal with the U.S. government and expect.

Matt Desch
Matt Desch
CEO at Iridium

A positive and productive outcome in the next year as the U.S. government continues to.

Matt Desch
Matt Desch
CEO at Iridium

Rely more heavily on commercial satellite services like ours.

Matt Desch
Matt Desch
CEO at Iridium

Similarly, our contract with the Space Development Agency is another important touch point with the U.S. government. We see the work we're doing on building the ground entry points and operation centers for the SDA's new network has given us great visibility into the government's Golden Dome initiative and credibility to support its future needs. We are well positioned to expand the.

Matt Desch
Matt Desch
CEO at Iridium

Scope of our work with the government.

Matt Desch
Matt Desch
CEO at Iridium

Going forward as they invest heavily in Golden Dome, these are just a few areas for which we believe disciplined capital deployment can provide continued strong revenue and bottom line growth. We look forward to being able to share additional details as we execute on our vision beyond our valuable global L-band satellite spectrum and the growing number of partners and solutions we've.

Matt Desch
Matt Desch
CEO at Iridium

Developed over our three decades of operations.

Matt Desch
Matt Desch
CEO at Iridium

Iridium is unique in the satellite industry.

Matt Desch
Matt Desch
CEO at Iridium

In that, we generate strong cash flows.

Matt Desch
Matt Desch
CEO at Iridium

With reasonable capital cycles, with a healthy, flexible, and still young satellite constellation, we won't need to spend on a new network until well into the 2030s, with bus and launch costs significantly less.

Matt Desch
Matt Desch
CEO at Iridium

Than we experienced with our second generation.

Matt Desch
Matt Desch
CEO at Iridium

System, we feel good about our options.

Matt Desch
Matt Desch
CEO at Iridium

For lower cost construction and launch.

Matt Desch
Matt Desch
CEO at Iridium

The time comes, including potentially as hosted.

Matt Desch
Matt Desch
CEO at Iridium

Payloads on another constellation system.

Matt Desch
Matt Desch
CEO at Iridium

Further, we have confidence that our strong cash flow should continue over the next five years and into the 2030s when a replacement system may be needed. Even with the increased uncertainty provided by a new satellite entrant, we still expect to generate at least $1.5 billion-$1.8 billion in total cash flows from 2026 through 2030, giving us a lot of flexibility as we enhance our business and focus on new growth opportunities. Given the increased focus on solidifying our competitive position, we have decided that we will pause our share repurchase program to emphasize strategic growth initiatives and continue our discipline in the deployment of capital. As we remain committed to deleveraging the balance sheet, we believe this is a prudent course for now even as we continue with our quarterly dividend program.

Matt Desch
Matt Desch
CEO at Iridium

As you can see by our earnings report today, we continue to grow revenue and subscribers and we expect to grow well into the future. Since the beginning of the year, we've signed up more than 70 new technology and distribution partners to the Iridium ecosystem to either build new solutions or license our technology for new Iridium-based products. These are indicative of the continuing value of our network and demonstrate the strong pipeline we have for continued growth. We are confident that Iridium's many product lines will continue to be relevant and we are excited to begin to invest in related technologies and businesses where we see meaningful growth potential. While the EchoStar spectrum sale is a major development, it does not come as a complete surprise to us. More D2D competition is coming, but we have time to respond as market reaction will be slow.

Matt Desch
Matt Desch
CEO at Iridium

We've seen this with a limited market reaction to Apple's D2D offerings and the response to the new T-Mobile satellite services, which have been underwhelming as well. We agree that the communications market is changing and new industries which hadn't previously seriously considered using satellite solutions are now beginning to explore or build applications that.

Matt Desch
Matt Desch
CEO at Iridium

Offer real value to their customers.

Matt Desch
Matt Desch
CEO at Iridium

This is an attractive environment for us, and we expect Iridium's opportunities will expand as we invest in new technologies and adjust our market focus. We know that our competitive advantage comes from focusing on specialized products and services for which high reliability and customized solutions remain key points of differentiation. With that, I'll now turn the call.

Matt Desch
Matt Desch
CEO at Iridium

Over to Vince to discuss our quarterly results and outlook. Vince?

Vince O'Neill
Vince O'Neill
CFO at Iridium

Thanks Matt. Good morning everyone. As Matt noted, I'll review Iridium's financial results for the third quarter. I'll also highlight some of the trends we're seeing across the industry and share details on Iridium's leveraging capital position. Operational EBITDA was up 10% in the third quarter to $136.6 million, driven by a combination of revenue from recurring services and engineering and support. On the commercial side of our business, service revenue was up 4% to $138.3 million, largely due to growth in commercial IoT, PNT, and voice and data. Voice and data revenue rose 4% from a year earlier to $59.9 million, largely reflecting price increases implemented in the beginning of July which drove a 4% increase in ARPU. Commercial IoT revenue totaled $46.7 million in the third quarter, up 7% from a year earlier.

Vince O'Neill
Vince O'Neill
CFO at Iridium

This increase continues to reflect broad-based growth of our IoT services for both consumer and commercial applications. Commercial broadband was down 17% from the year-ago period, though largely in line with our internal forecast. We anticipated the decline in broadband this quarter, which was largely attributable to a non-maritime contract from the prior year period that was not renewed. Excluding this $1.4 million take-or-pay contract, the decline in broadband this quarter was consistent with the trend we saw in the first half of the year. Hosting and other data services revenue was $18.7 million this quarter, up 14% from last year's comparable quarter, reflecting an increase in PNT accentuated by a discrete event associated with a customer contract. We are in the early days of PNT business development and see robust opportunity ahead for meaningful revenue growth.

Vince O'Neill
Vince O'Neill
CFO at Iridium

We are encouraged by the level of market interest in the service that spans sectors and solutions. There is an increasing need for resilient position and timing solutions, especially for civil and commercial applications to address jamming and spoofing and protect critical infrastructure. Government service revenue was up modestly in the third quarter to $26.9 million, reflecting the step up in our EMSS contract with the U.S. government in mid-September. This is the last price step up to our contract, which will yield $110.5 million during the final year of this September near term. I should note that the government has the option to extend the contract for a period of six months at the current rate, which they traditionally exercise. Our formal negotiations on a new EMSS contract with the government will commence in 2026 in earnest.

Vince O'Neill
Vince O'Neill
CFO at Iridium

We enter this process with a strong relationship built over 25 years and understand well their priorities, needs, and expectations. A good example of this is the integration of Iridium's technology in Qualcomm's new Snapdragon Mission Tactical Radio for U.S. government and allied users. Turning to subscriber equipment, sales were $21.5 million in the third quarter, down marginally from the prior year's quarter. We now forecast full year sales will modestly underrun last year's level. Engineering and Support revenue was $40.2 million in the third quarter as compared to $30.7 million in the prior year period. The strong increase from the prior year quarter continues to reflect Iridium's growing work with the Space Development Agency as well as new R&D and study contracts awarded in the prior year.

Vince O'Neill
Vince O'Neill
CFO at Iridium

For 2025, we are tightening our full year forecast for service revenue growth to approximately 3% and are narrowing our OEBITDA guidance between $495 million and $500 million, the higher end of our previously guided range. The primary driver of our adjustment to service revenue relates to the timing of PNT revenue as previewed during our second quarter call. PNT revenue that had initially been expected to come in 2025 will now be delayed and pushed into future periods, and existing large customers are working on a major deployment of PNT. Their investment is significant. However, the timing of implementation rests on factors outside of our control. We continue to work closely with this customer to support their rollout.

Vince O'Neill
Vince O'Neill
CFO at Iridium

This will result in hosted payload and other data services growth below trend in the fourth quarter and full year, with service revenue trending to the bottom end of our previously guided range. PNT remains a very attractive market for Iridium and will drive incremental revenue growth. We especially like the fact that it is a wide area broadcast service that supports an unlimited number of users while using minimal network resources. We've been happy to see Iridium PNT expand into a number of new applications like 5G networks. For example, you may have seen this week's announcement that T-Mobile is increasing their deployment of Iridium PNT for network resilience. Beyond this item, I would offer a couple of comments on trends we are seeing in our commercial lines of business as well as our ongoing work with the U.S. government.

Vince O'Neill
Vince O'Neill
CFO at Iridium

As I noted earlier, we initiated a price increase in our commercial voice and data business in July. Coincident with this rise in ARPU, we have seen a modest amount of subscriber deactivations tied to this pricing action. Going forward, we expect ARPU for our voice and data business to average $48 for the foreseeable future. Revenue and subscribers in IoT continue to grow. While we expect fourth quarter growth to increase from the 7% posted in Q3 due to contracted revenue with a large customer, we believe IoT revenue growth will now come in just below 10% for the full year. Our IoT business is running well and as Matt noted, we have a number of new partners that have joined Iridium's ecosystem that are building new applications and will help to drive future growth.

Vince O'Neill
Vince O'Neill
CFO at Iridium

As I mentioned earlier, the decline in our broadband revenue growth rate in the third quarter was abnormally high due to the impact of a non-maritime contract from the prior year period that was not renewed. We anticipate that the year-over-year decline in broadband revenue will continue into the fourth quarter and trend closer to 8%. A faster conversion of maritime vessels from primary to companion service this year is hastening a mix shift in our maritime business and will continue to be visible in our ARPU through the end of the year. Over time, we believe subscriber gains from the adoption of new Iridium Certus GMDSS Plans will help to offset these ARPU pressures and that Iridium will remain an important player in the maritime sector. Iridium's government business will generate $108 million in EMSS revenue from DoD this year.

Vince O'Neill
Vince O'Neill
CFO at Iridium

We also expect that the strong trends we've seen in engineering and support, primarily tied to our work with the SDA, will continue into the fourth quarter and support another year of record engineering revenue. Finally, with the tax legislation passed this summer, we expect an additional year of tax savings. We now expect Iridium to pay cash taxes of less than $10 million per year through 2027 and don't anticipate being a taxpayer at the full statutory rate until 2029. This updated tax profile will add further support to incremental cash generation. We hope this color is helpful as we enter the final quarter of the year. During the third quarter, Iridium retired approximately 1.9 million shares of common stock at an average price of $26.22.

Vince O'Neill
Vince O'Neill
CFO at Iridium

While Iridium stock trades at an attractive valuation, we believe it is prudent to enhance our incremental financial flexibility in the face of future changes to the competitive landscape. As Matt has already noted, we are pausing our share buybacks over the normal course. Pausing our repurchase program will add approximately $50 million to our cash position by the end of the year and drive our net leverage slightly lower. Given the free cash flow Iridium will continue to generate, we have the ability to delever and quickly reduce net leverage from today's 3.5x. This increased financial flexibility allows us to consider options such as potentially buying back some of our debt, which reduces ongoing carrying costs. Absent an acquisition, Iridium could quickly delever below 2x net leverage well in advance of our targeted timeline of 2030.

Vince O'Neill
Vince O'Neill
CFO at Iridium

Further financial flexibility supports our ability to pursue strategic initiatives including bolt-on M&A that bolsters our position in certain target markets. Moving to our capital position as of September 30, Iridium had a cash and cash equivalents balance of $88.5 million and ended the quarter with net leverage of 3.5x OEBITDA. On September 30, Iridium made a quarterly dividend payment of $0.15 per share to shareholders. This increase to the dividend rate results in full year growth rate of approximately 5% over 2024. We are committed to an active and growing dividend program as it augments long-term shareholder returns. Capital expenditures in the third quarter were $21.5 million. As we have noted previously, we anticipate higher capital expenditures in 2025 to support our work on Iridium NTN Direct and 5G standards.

Vince O'Neill
Vince O'Neill
CFO at Iridium

Turning to our pro forma free cash flow, we present a description of our cash flow metrics along with the reconciliation to GAAP measures in a supplemental presentation under the Events tab on our Investor Relations website. In those materials we project pro forma free cash flow of about $304 million for 2025, with a conversion rate of OEBITDA to free cash flow of 61% in 2025 and a yield approaching 18%. As Matt has previously noted, we expect that the spectrum deals announced this year will bring more competition to the MSS industry over time. To ensure we are providing the most relevant guidance, we continue to guide service revenue on a year-by-year basis, but are withdrawing our 2030 service revenue outlook. Iridium has a durable and resilient business that will continue to generate significant cash flow over the long term.

Vince O'Neill
Vince O'Neill
CFO at Iridium

That strength is driven in part by Iridium connected solutions that are not easily displaced and drive our recurring revenue quarter after quarter and year after year. We anticipate that even in the evolving competitive environment, Iridium has the capacity to generate at least $1.5 billion-$1.8 billion of free cash flow over the balance of this decade. I'd remind investors that Iridium is currently generating about $300 million per year of pro forma free cash flow. Just maintaining this run rate generates $1.5 billion through the end of the decade. Iridium occupies a unique position in the satellite market today. We have great assets, strong cash flow, and many opportunities for incremental growth. While we acknowledge that the competitive dynamics in the satellite industry are likely to move at a faster pace, we remain very excited about our prospects and the durability of our existing business.

Vince O'Neill
Vince O'Neill
CFO at Iridium

With that, I'll turn things back to the operator and look forward to your questions.

Operator

We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Edison Yu with Deutsche Bank. Please go ahead.

Edison Yu
Edison Yu
Analyst at Deutsche Bank

Hey, good morning. Thanks for taking our questions. I want to follow up on the strategic options that the team has mentioned and maybe take it from two angles. First, you mentioned M&A several times. I'm wondering what the timeline maybe is for some of these actions, and that's in the context of is this a case where you had a bunch of M&A in the pipeline already and you're speeding it up, or are you now looking for different types of targets post all the events that have occurred in the last couple months?

Matt Desch
Matt Desch
CEO at Iridium

Yeah.

Matt Desch
Matt Desch
CEO at Iridium

We haven't been a big acquisition company.

Matt Desch
Matt Desch
CEO at Iridium

Obviously, we did Satelles a few years ago, but hadn't done any since. We have been looking at some areas.

Matt Desch
Matt Desch
CEO at Iridium

That are complementary to what we're doing.

Matt Desch
Matt Desch
CEO at Iridium

We're looking at some now. I can't really comment on any specific.

Matt Desch
Matt Desch
CEO at Iridium

Timing, because it's not completely within our control.

Matt Desch
Matt Desch
CEO at Iridium

I did want to signal to you that.

Matt Desch
Matt Desch
CEO at Iridium

Will be a bigger focus for us.

Matt Desch
Matt Desch
CEO at Iridium

Going forward, for obvious reasons.

Matt Desch
Matt Desch
CEO at Iridium

I mean, there are things we can.

Matt Desch
Matt Desch
CEO at Iridium

To accelerate revenues and growth, that.

Matt Desch
Matt Desch
CEO at Iridium

Are complementary to the specific areas we've targeted.

Matt Desch
Matt Desch
CEO at Iridium

We're going to focus on those a bit more heavily.

Matt Desch
Matt Desch
CEO at Iridium

There's not lots of targets.

Matt Desch
Matt Desch
CEO at Iridium

We're obviously not going to, you know.

Matt Desch
Matt Desch
CEO at Iridium

Do many at the time.

Matt Desch
Matt Desch
CEO at Iridium

We will focus on that more.

Edison Yu
Edison Yu
Analyst at Deutsche Bank

Understood. I want to take a look at the M&A angle from, I guess, the opposite side. Does it make sense to you for Iridium to be part, whether directly or indirectly, of some type of other solution, whether it's another big tech company trying to get into D2D in some way? Do you think that is a sensible thing after what's happened, kind of transpired in the last couple months?

Matt Desch
Matt Desch
CEO at Iridium

It is only sensible based upon the value that that would create for shareholders, which, you know, is our job to maximize. Clearly, we'd be open to those who have that desire. I don't know for.

Matt Desch
Matt Desch
CEO at Iridium

Sure, I wouldn't say that.

Matt Desch
Matt Desch
CEO at Iridium

Recent news of a spectrum purchase of that size, and given the still uncertainty of the market, will attract.

Matt Desch
Matt Desch
CEO at Iridium

More to the market.

Matt Desch
Matt Desch
CEO at Iridium

There might be less.

Matt Desch
Matt Desch
CEO at Iridium

There's only so many of us that do have spectrum. We obviously have an important position there.

Matt Desch
Matt Desch
CEO at Iridium

If someone really wanted to.

Matt Desch
Matt Desch
CEO at Iridium

Do it globally, we could obviously be part of that.

Matt Desch
Matt Desch
CEO at Iridium

That's not really for us to decide. That's not really something we can plan and execute on.

Matt Desch
Matt Desch
CEO at Iridium

That's for others to decide.

Matt Desch
Matt Desch
CEO at Iridium

We will do what's in.

Matt Desch
Matt Desch
CEO at Iridium

The best interest of the long term, you know, value that we can create.

Edison Yu
Edison Yu
Analyst at Deutsche Bank

Great. Thank you so much.

Matt Desch
Matt Desch
CEO at Iridium

Thanks.

Operator

The next question comes from Ric Prentiss with Raymond James. Please go ahead.

Ric Prentiss
Ric Prentiss
Managing Director at Raymond James

Hey, good morning, everyone. Thanks for taking the questions and appreciate the commentary on the competitive environment. At a high level, which of your business lines do you think are totally insulated from the competitive risk, where you don't think about it at all, really? Which business lines are maybe mostly insulated? Which business lines do you think are most potentially exposed?

Matt Desch
Matt Desch
CEO at Iridium

That's a very detailed question.

Matt Desch
Matt Desch
CEO at Iridium

Here, no business is completely insulated.

Matt Desch
Matt Desch
CEO at Iridium

You know, we've largely.

Matt Desch
Matt Desch
CEO at Iridium

Been extremely competitive in the areas that we serve because.

Matt Desch
Matt Desch
CEO at Iridium

Of our global network, because.

Matt Desch
Matt Desch
CEO at Iridium

Of our L-band spectrum, because we're.

Matt Desch
Matt Desch
CEO at Iridium

Able to be a regulated provider when others can't. You know, there's a lot of hurdles.

Matt Desch
Matt Desch
CEO at Iridium

People have to overcome to compete, say in the cockpit safety services or maritime safety services. Others have tried to do that, and it's taken years and years. Those kind of areas are always going to be pretty insulated from services.

Matt Desch
Matt Desch
CEO at Iridium

Some things like PNT, for example, you.

Matt Desch
Matt Desch
CEO at Iridium

Given the 15 year head start.

Matt Desch
Matt Desch
CEO at Iridium

Given the fact that it would.

Matt Desch
Matt Desch
CEO at Iridium

Be very, very difficult to kind of recreate a service like that. Those are going to be pretty well protected services.

Matt Desch
Matt Desch
CEO at Iridium

Industrial IoT, you know, really in many.

Matt Desch
Matt Desch
CEO at Iridium

Ways that's protected by just the massive.

Matt Desch
Matt Desch
CEO at Iridium

Ecosystem and solutions that we've provided.

Matt Desch
Matt Desch
CEO at Iridium

We do have a wide variety.

Matt Desch
Matt Desch
CEO at Iridium

Of both proprietary and soon to be.

Matt Desch
Matt Desch
CEO at Iridium

Standards-based services, which also make that, you know, an attractive service. That's, you know, in a business, in an area of which there's going to be multiple suppliers, it's not going to.

Matt Desch
Matt Desch
CEO at Iridium

Always be.

Matt Desch
Matt Desch
CEO at Iridium

Direct head-on-head competition.

Matt Desch
Matt Desch
CEO at Iridium

It's going to be actually multiple solutions in many things. For example, in the autonomous areas, we're.

Matt Desch
Matt Desch
CEO at Iridium

find ourselves being put on with terrestrial and even kind of broadband capabilities into autonomous solutions.

Matt Desch
Matt Desch
CEO at Iridium

I think that covers a lot of area.

Matt Desch
Matt Desch
CEO at Iridium

The government is another area that, after.

Matt Desch
Matt Desch
CEO at Iridium

25 years and being embedded into so many areas, having such high credibility in terms of what we can do and what our experience has led, which SDA.

Matt Desch
Matt Desch
CEO at Iridium

Is a good example of.

Matt Desch
Matt Desch
CEO at Iridium

As we're lining up around Golden Dome, which potentially could be $175 billion, we.

Matt Desch
Matt Desch
CEO at Iridium

Find there's an awful lot of business.

Matt Desch
Matt Desch
CEO at Iridium

That we can address, and we're mature.

Matt Desch
Matt Desch
CEO at Iridium

Enough as an organization to now go.

Matt Desch
Matt Desch
CEO at Iridium

After that business where we couldn't have before.

Matt Desch
Matt Desch
CEO at Iridium

So.

Matt Desch
Matt Desch
CEO at Iridium

I would say, you know, we.

Matt Desch
Matt Desch
CEO at Iridium

First of all, we have a lot of sustaining strength in the.

Matt Desch
Matt Desch
CEO at Iridium

Existing businesses, a lot of momentum for.

Matt Desch
Matt Desch
CEO at Iridium

You know, in the coming years.

Matt Desch
Matt Desch
CEO at Iridium

You know, long term, as you look.

Matt Desch
Matt Desch
CEO at Iridium

Over 10 years, I think our business.

Matt Desch
Matt Desch
CEO at Iridium

Will evolve, you know, a bit, and that's why we're going to be more aggressive about evolving it ourselves into it.

Matt Desch
Matt Desch
CEO at Iridium

I think that's why.

Matt Desch
Matt Desch
CEO at Iridium

We feel very strongly about the cash flows we're going to be generating over the next five years and can really kind of reiterate those.

Ric Prentiss
Ric Prentiss
Managing Director at Raymond James

Okay, great, appreciate all that detail. To take a big broad question and make it a little more specific, if we look at the voice and data segment, can you give us a rough breakdown of what percent of your base are more leisure or casual users versus what portion are maybe more industrial types or users that really need that more robust device and service that might be at less risk?

Matt Desch
Matt Desch
CEO at Iridium

When you talk about voice and.

Matt Desch
Matt Desch
CEO at Iridium

Data, you're mostly talking about satellite phones.

Matt Desch
Matt Desch
CEO at Iridium

PTT devices and the like.

Matt Desch
Matt Desch
CEO at Iridium

I don't think there's a whole lot of leisure in there.

Matt Desch
Matt Desch
CEO at Iridium

Almost everything that we supply is.

Matt Desch
Matt Desch
CEO at Iridium

I would call for kind of a security, industrial kind of use, NGOs first.

Matt Desch
Matt Desch
CEO at Iridium

Responders, militaries, and the like.

Matt Desch
Matt Desch
CEO at Iridium

I don't see a lot of people.

Matt Desch
Matt Desch
CEO at Iridium

Who are talking about the fact that they have a satellite phone.

Matt Desch
Matt Desch
CEO at Iridium

For fun or use a push-to.

Matt Desch
Matt Desch
CEO at Iridium

Talk device for roaming with family. I think very little of that.

Matt Desch
Matt Desch
CEO at Iridium

is really, I would call, consumer grade kind of things. It is another reason why, by the way, there is a little bit in terms of subscribers. You can see we are seeing.

Matt Desch
Matt Desch
CEO at Iridium

A difference in subscribers. As I was looking through and talking to the team about where.

Matt Desch
Matt Desch
CEO at Iridium

That kind of year-over-year sort.

Matt Desch
Matt Desch
CEO at Iridium

Of subscriber, it's still small, but where?

Matt Desch
Matt Desch
CEO at Iridium

Is it coming from?

Matt Desch
Matt Desch
CEO at Iridium

It's all in kind of industrial areas. For example, you know, the DOGE funding with USAID, there were some, you know.

Matt Desch
Matt Desch
CEO at Iridium

We're talking all these are, by the way.

Matt Desch
Matt Desch
CEO at Iridium

Way, pretty small effects.

Matt Desch
Matt Desch
CEO at Iridium

There was the USAID, the U.N. for.

Matt Desch
Matt Desch
CEO at Iridium

Example has some funding issues.

Matt Desch
Matt Desch
CEO at Iridium

You know, kind of NGOs in general.

Matt Desch
Matt Desch
CEO at Iridium

Of course. We did have a small price increase this year, and I see some small impact.

Matt Desch
Matt Desch
CEO at Iridium

It seems like with some people.

Matt Desch
Matt Desch
CEO at Iridium

Maybe looking, I'd say again.

Matt Desch
Matt Desch
CEO at Iridium

Maybe.

Matt Desch
Matt Desch
CEO at Iridium

These are governmental agencies that decide they can use a few less.

Matt Desch
Matt Desch
CEO at Iridium

You know, given the price.

Matt Desch
Matt Desch
CEO at Iridium

I would say tariffs have had a small, small impact.

Matt Desch
Matt Desch
CEO at Iridium

Really stretching a little bit.

Matt Desch
Matt Desch
CEO at Iridium

Drawback, the troop drawdown in Gaza, hurricanes.

Matt Desch
Matt Desch
CEO at Iridium

This has been one of the quietest hurricane seasons.

Matt Desch
Matt Desch
CEO at Iridium

All these things have a small impact. You could say is D2D an impact. The fact that you can do it with a smartphone and it must be a small impact, but it really is given all those other kind of quantifiable issues. I can't see a real big impact really right now from D2D on that business.

Matt Desch
Matt Desch
CEO at Iridium

I would say kind of the.

Matt Desch
Matt Desch
CEO at Iridium

The implications of your question are those.

Matt Desch
Matt Desch
CEO at Iridium

Kind of consumer users and not industrial.

Matt Desch
Matt Desch
CEO at Iridium

NGO, you know, first responder safety.

Matt Desch
Matt Desch
CEO at Iridium

Security kind of applications.

Matt Desch
Matt Desch
CEO at Iridium

I hope that helps answer kind.

Matt Desch
Matt Desch
CEO at Iridium

Of where we see that business.

Ric Prentiss
Ric Prentiss
Managing Director at Raymond James

Yeah, very helpful color. My last question would just be kind of take the similar question with the IoT business. Can you all update us on what portion of that base is personal communication kind of or consumer users?

Vince O'Neill
Vince O'Neill
CFO at Iridium

It's about Brent. There's about 900,000 of the IoT subscribers.

Vince O'Neill
Vince O'Neill
CFO at Iridium

Base, roughly about 900,000 or personal subscriber users.

Matt Desch
Matt Desch
CEO at Iridium

Those are low ARPU users for the most part. As you can see, that business continues.

Matt Desch
Matt Desch
CEO at Iridium

To grow and still expands in terms.

Matt Desch
Matt Desch
CEO at Iridium

Of number of devices and users.

Matt Desch
Matt Desch
CEO at Iridium

Most of that business, though, is still.

Matt Desch
Matt Desch
CEO at Iridium

As we can tell, not just everyday users who use this occasionally now.

Matt Desch
Matt Desch
CEO at Iridium

I think D2D is going. You know, these are users.

Matt Desch
Matt Desch
CEO at Iridium

That need a rugged, purpose-built device.

Matt Desch
Matt Desch
CEO at Iridium

For trekking or these again are a lot of first responders and those sort of people as well. I think over half.

Matt Desch
Matt Desch
CEO at Iridium

Which is our higher margin business, is the broader industrial IoT area. That's the area that kind of continues to grow at pretty traditional rates right now.

Ric Prentiss
Ric Prentiss
Managing Director at Raymond James

Okay, great. Appreciate all the detail, guys. Thanks, thanks.

Operator

The next question comes from Mathieu Robilliard with Barclays. Please go ahead.

Mathieu Robilliard
Mathieu Robilliard
Analyst at Barclays

Yes, good morning and thank you for the presentation. If I could dive in some of the verticals a bit more in terms of the broadband one. You mentioned that there was a one-off kind of contract that was not renewed. I was wondering if you were still seeing an impact from the loss of pure connectivity services that you had in the past. I thought would be down by the end of last year or beginning of this year. I just wanted to make sure what was the exposure still to connectivity service on the maritime and then on the IoT. Clearly I think from what you said, this is potentially the area where D2D could become the biggest competitor. At the same time you are developing your own D2D IoT or NTN IoT solution.

Mathieu Robilliard
Mathieu Robilliard
Analyst at Barclays

I think you signed the deal with Deutsche Telekom recently and I wanted to clarify what exactly it is because my understanding is that your services are not yet commercially available. If you could clarify exactly the nature of what you signed with Deutsche Telekom and also which is another way to look at the threat of D2D or the opportunity. Clearly when we look at pure mobile terrestrial IoT ARPUs, we're talking about less than $1 or low single-digit dollar per month per user, which is not the case in your IoT business. I understand there's lots of different price points. Is your D2D initiative, is that something that could protect you to some extent but also just bring lower ARPU for the same amount of subscribers? Thank you.

Matt Desch
Matt Desch
CEO at Iridium

Okay, yeah, a couple there.

Matt Desch
Matt Desch
CEO at Iridium

Matthieu, I think you started with broadband.

Matt Desch
Matt Desch
CEO at Iridium

I want to make sure you understand that that one time, which sort of distorts this quarter, was actually revenue we had to recognize a year ago when the contract was terminated. That wasn't the maritime contract it happened to.

Matt Desch
Matt Desch
CEO at Iridium

Be kind of a little bit larger one-time kind of event than when.

Matt Desch
Matt Desch
CEO at Iridium

You normalize that we continue to sort of change the mix, if you will.

Matt Desch
Matt Desch
CEO at Iridium

In the maritime industry.

Matt Desch
Matt Desch
CEO at Iridium

I'm expecting that will eventually turn around. You can see the new products that are coming out.

Matt Desch
Matt Desch
CEO at Iridium

We've had some announced even in the last month. Intellian, which is a really important supplier in the maritime space, got approval for their combined backup GMDSS terminal that I.

Matt Desch
Matt Desch
CEO at Iridium

Think will be very attractive, and we.

Matt Desch
Matt Desch
CEO at Iridium

have some more in the market coming. I think broadband will eventually kind of flatten out, and we're not seeing.

Matt Desch
Matt Desch
CEO at Iridium

Any new trends in that area in terms of IoT? Yeah, the contract.

Matt Desch
Matt Desch
CEO at Iridium

The announcement with DT.

Matt Desch
Matt Desch
CEO at Iridium

The others that I think you'll.

Matt Desch
Matt Desch
CEO at Iridium

Soon be seeing are really kind of roaming arrangements.

Matt Desch
Matt Desch
CEO at Iridium

Those are MOUs.

Matt Desch
Matt Desch
CEO at Iridium

These are that relate to their agreements to allow their customers to roam onto.

Matt Desch
Matt Desch
CEO at Iridium

Our network, their terrestrial customers.

Matt Desch
Matt Desch
CEO at Iridium

As I said before, we're getting a.

Matt Desch
Matt Desch
CEO at Iridium

Lot of interest, in fact, even growing interest there.

Matt Desch
Matt Desch
CEO at Iridium

The D2D market is not.

Matt Desch
Matt Desch
CEO at Iridium

A one player wins all. What we're hearing from the mobile network operators is that they want multiple partners.

Matt Desch
Matt Desch
CEO at Iridium

Even the ones that have invested in.

Matt Desch
Matt Desch
CEO at Iridium

People I think you're going to see are going to roam onto our network as well.

Matt Desch
Matt Desch
CEO at Iridium

They appreciate the robustness of our network.

Matt Desch
Matt Desch
CEO at Iridium

The availability of it.

Matt Desch
Matt Desch
CEO at Iridium

I mean it won't be long before.

Matt Desch
Matt Desch
CEO at Iridium

We deliver that service and the revenues, you're right. I think we'll be probably lower ARPU.

Matt Desch
Matt Desch
CEO at Iridium

Overall, there'll be an expansion of.

Matt Desch
Matt Desch
CEO at Iridium

A market as opposed to necessarily, they'll.

Matt Desch
Matt Desch
CEO at Iridium

Be going after applications that we wouldn't be able to address today with our proprietary solution.

Matt Desch
Matt Desch
CEO at Iridium

For example, we can't.

Matt Desch
Matt Desch
CEO at Iridium

Address the smart meter market. There's many agricultural sensor markets we can't address today.

Matt Desch
Matt Desch
CEO at Iridium

Our network will be perfectly suited for those applications. When we deliver a service, there'll be a lot of mobile network operator.

Matt Desch
Matt Desch
CEO at Iridium

Applications and those space which they would.

Matt Desch
Matt Desch
CEO at Iridium

Find attractive to allow to roam onto our network.

Matt Desch
Matt Desch
CEO at Iridium

We see that as a net.

Matt Desch
Matt Desch
CEO at Iridium

Positive and an important growth area.

Matt Desch
Matt Desch
CEO at Iridium

For us.

Matt Desch
Matt Desch
CEO at Iridium

I think that covered all of them, but let me know if I didn't.

Matt Desch
Matt Desch
CEO at Iridium

Matthieu.

Mathieu Robilliard
Mathieu Robilliard
Analyst at Barclays

No, that's very clear. I guess what I understand in terms of the agreement you signed with Deutsche Telekom is that this is based on your existing satellite IoT solutions. You're just signing a new partner, which is great in itself, but it has nothing to do with your.

Matt Desch
Matt Desch
CEO at Iridium

That's not true, Matthieu.

Matt Desch
Matt Desch
CEO at Iridium

With DT was for Iridium NTN Direct. Whenever you hear the term Iridium NTN.

Matt Desch
Matt Desch
CEO at Iridium

Direct, that's our service name for our new narrowband IoT standards-based solution based on 3GPP Release 19 standards and the new chipsets and all that sort of thing. That's what we're testing right now actually. It's actually starting to really do initial testing on live satellites. It's going to evolve into a service.

Matt Desch
Matt Desch
CEO at Iridium

That we think will be ready next.

Matt Desch
Matt Desch
CEO at Iridium

Year and will generate new solutions in devices that can both handle terrestrial and satellite communications.

Mathieu Robilliard
Mathieu Robilliard
Analyst at Barclays

Okay, that's very clear now. Thank you.

Operator

The next question comes from Colin Canfield of Cantor. Please go ahead.

Colin Canfield
Colin Canfield
Equity Analyst at Cantor

Thank you for the question. Following up to Addison and maybe just asking it a little bit more directly. As we think about kind of the potential takeoff value on Iridium and maybe the process, typically, if we think about it maybe as starting today and the clock starting now, is it fair to assume that like nine month to 12 months could be a kind of potential timeline to realizing the full value of Iridium? As you think about kind of the key value within Iridium's constellation RF network downstream devices, where do you think are the key things that other partners might want to take out of the business or integrate into their wholesale back?

Colin Canfield
Colin Canfield
Equity Analyst at Cantor

There are a lot of obviously big dollars that are floating around and you can make the argument that the space equity market probably continues to drift higher from here, but it's just one of those things where it's tough to get public market credit for such an enduring and valuable asset.

Matt Desch
Matt Desch
CEO at Iridium

Yeah, that's a good question and a difficult one to answer. I think our value is in the breadth of an experience and the ecosystem that we've had, and all the solutions and growing market segments we have.

Matt Desch
Matt Desch
CEO at Iridium

I mentioned a number of really.

Matt Desch
Matt Desch
CEO at Iridium

Think important and enduring assets that we have, whether it's the U.S. government business.

Matt Desch
Matt Desch
CEO at Iridium

Our PNT technology, which is quite unique, the breadth. I mean, we've been the winner in IoT satellite services for a while now, and that isn't slowing down, you know, what we can do in other markets. You know.

Matt Desch
Matt Desch
CEO at Iridium

I look at others right now, yes, with a little jealousy of people who have no revenues and only long.

Matt Desch
Matt Desch
CEO at Iridium

Term kind of growth prospects.

Matt Desch
Matt Desch
CEO at Iridium

Obviously, the market isn't appreciating that.

Matt Desch
Matt Desch
CEO at Iridium

That's why I think this sort of announcement of a bit of pivot and more investment into longer term growth.

Matt Desch
Matt Desch
CEO at Iridium

Areas, which is clearly what people are appreciating now as opposed to, you know.

Matt Desch
Matt Desch
CEO at Iridium

Return of capital and that sort of thing, I think, is prudent right now. I'm not sure if that completely.

Matt Desch
Matt Desch
CEO at Iridium

Answered your question, but hopefully, you know.

Matt Desch
Matt Desch
CEO at Iridium

I do think that there is some.

Matt Desch
Matt Desch
CEO at Iridium

Underappreciated.

Matt Desch
Matt Desch
CEO at Iridium

Assets of value.

Matt Desch
Matt Desch
CEO at Iridium

Perhaps we've been more underappreciated than some right now.

Matt Desch
Matt Desch
CEO at Iridium

I think a lot of that has to do with people who have not really sustained a business as much, but they do have larger spectrum assets than perhaps we have.

Matt Desch
Matt Desch
CEO at Iridium

Perhaps that's of interest to some.

Matt Desch
Matt Desch
CEO at Iridium

Ours are valuable spectrum assets.

Matt Desch
Matt Desch
CEO at Iridium

We haven't chosen to market them to others.

Matt Desch
Matt Desch
CEO at Iridium

Clearly, people believe that maybe there's been a rerating of the value of.

Matt Desch
Matt Desch
CEO at Iridium

Satellite spectrum in the mobile satellite services.

Matt Desch
Matt Desch
CEO at Iridium

Ban, and we haven't promoted that. We still have value regardless. It's just we're not out there pumping.

Matt Desch
Matt Desch
CEO at Iridium

That as being what the future of our company is. I believe that we can still create.

Matt Desch
Matt Desch
CEO at Iridium

Excess, large growth, going long term. I think that will be proven.

Colin Canfield
Colin Canfield
Equity Analyst at Cantor

Got it, got it. Definitely agree. As we think of like rank order of partners, right, like the EchoStar-SpaceX deal, I think is probably a pretty clear indication that SpaceX plans to go after a handset.

Colin Canfield
Colin Canfield
Equity Analyst at Cantor

Right.

Colin Canfield
Colin Canfield
Equity Analyst at Cantor

Within that construct, the big competitors that are real and have substantial ecosystems are probably one and one alone, and that's the fruit company, right. As we think of that construct, is there a rank order of folks that you probably have a great relationship with, someone like Paul Jacobs, Globalstar, or some of the Amazon folks? How do you rank order the potential teammates that you would probably want to work with in the future?

Matt Desch
Matt Desch
CEO at Iridium

Yeah, that's a tricky question to answer.

Matt Desch
Matt Desch
CEO at Iridium

I mean, that is leading.

Matt Desch
Matt Desch
CEO at Iridium

To possible partnerships and aspects.

Matt Desch
Matt Desch
CEO at Iridium

That I don't really want to signal.

Matt Desch
Matt Desch
CEO at Iridium

I've said in the past, especially having been here almost 19 years.

Matt Desch
Matt Desch
CEO at Iridium

Now, I do know everybody. I have talked to everybody and I will say.

Matt Desch
Matt Desch
CEO at Iridium

This is a very active time.

Matt Desch
Matt Desch
CEO at Iridium

The industry where there are a lot.

Matt Desch
Matt Desch
CEO at Iridium

Of discussions going on, not necessarily.

Matt Desch
Matt Desch
CEO at Iridium

I don't want to try to indicate this there are imminent deals or things underway.

Matt Desch
Matt Desch
CEO at Iridium

I think that would be inappropriate, even.

Matt Desch
Matt Desch
CEO at Iridium

If they were to talk about that right now.

Matt Desch
Matt Desch
CEO at Iridium

There are larger players in our industry that weren't there.

Matt Desch
Matt Desch
CEO at Iridium

Five, 10, certainly when I joined.

Matt Desch
Matt Desch
CEO at Iridium

Industry, and you mentioned people like Amazon,

Matt Desch
Matt Desch
CEO at Iridium

Kuiper and Apple and certainly there wasn't.

Matt Desch
Matt Desch
CEO at Iridium

A SpaceX Starlink in those days. Those are kind of people with.

Matt Desch
Matt Desch
CEO at Iridium

The assets and strategic ability to go kind of anywhere they want to go.

Matt Desch
Matt Desch
CEO at Iridium

Which is a new thing for our industry.

Matt Desch
Matt Desch
CEO at Iridium

I think that will be an interesting development.

Matt Desch
Matt Desch
CEO at Iridium

I think we can exist within.

Matt Desch
Matt Desch
CEO at Iridium

That environment very well, and possibly even take advantage of that.

Colin Canfield
Colin Canfield
Equity Analyst at Cantor

Got it.

Colin Canfield
Colin Canfield
Equity Analyst at Cantor

Definitely agree and appreciate the color as always, Matt. Thank you.

Matt Desch
Matt Desch
CEO at Iridium

Yeah, thanks.

Operator

The next question comes from Tim Horan with Oppenheimer. Please go ahead.

Tim Horan
Tim Horan
Managing Director at Oppenheimer

Thanks, guys. Matt, just following up on that question on the spectrum front. Do you have a sense of what percentage of the world EchoStar spectrum covers at this point? I believe you and Globalstar are the only ones with really global spectrum coverage. If you can just elaborate on that, would be great.

Matt Desch
Matt Desch
CEO at Iridium

Yeah, it's a complicated question.

Matt Desch
Matt Desch
CEO at Iridium

The way spectrum works is that the ITU provides, you know, think of it almost there's a directory at the ITU on a country by country.

Matt Desch
Matt Desch
CEO at Iridium

Basis of who has priority. We do have.

Matt Desch
Matt Desch
CEO at Iridium

Like the number one priority with our network in many countries developed over 30 years, we're in a lot of places probably that Starlink will never be today.

Matt Desch
Matt Desch
CEO at Iridium

Because those countries can make decisions now as EchoStar spectrum is kind of applied.

Matt Desch
Matt Desch
CEO at Iridium

For them to decide whether they want them to be there or not.

Matt Desch
Matt Desch
CEO at Iridium

It's hard to say they're a certain place or not. They certainly can support the oceans now that they couldn't before.

Matt Desch
Matt Desch
CEO at Iridium

It could do markets that really don't have a strong regulatory environment.

Matt Desch
Matt Desch
CEO at Iridium

There are probably some markets that are.

Matt Desch
Matt Desch
CEO at Iridium

Going to say no to them, and that is not an easily describable position.

Matt Desch
Matt Desch
CEO at Iridium

It's going to take some time. First of all, that spectrum is geostationary spectrum, so that requires that to be reallocated and reapproved.

Matt Desch
Matt Desch
CEO at Iridium

There'll be other people that will try to move ahead of them in line.

Matt Desch
Matt Desch
CEO at Iridium

Might even be us in some cases.

Matt Desch
Matt Desch
CEO at Iridium

It'll take some time for.

Matt Desch
Matt Desch
CEO at Iridium

That kind of needs to be reallocated and reapproved. I want to say.

Matt Desch
Matt Desch
CEO at Iridium

I wanted to make it clear.

Matt Desch
Matt Desch
CEO at Iridium

Didn't want to spend all the time of how hard it will be for them to create a system. I wanted to be sure that investors understood that in no way are we in kind of denial of the potential of that solution. Certainly their ability to create a much more global system, for example, than EchoStar.

Matt Desch
Matt Desch
CEO at Iridium

Could have done that on their own. Frankly, they have rockets and satellites and other things that others don't have.

Matt Desch
Matt Desch
CEO at Iridium

It's going to be faster than.

Matt Desch
Matt Desch
CEO at Iridium

We were anticipating a network would have been deployed.

Matt Desch
Matt Desch
CEO at Iridium

We were always expecting a network would be deployed that could do.

Matt Desch
Matt Desch
CEO at Iridium

This over the long term.

Matt Desch
Matt Desch
CEO at Iridium

Just thought it would probably be 2035.

Matt Desch
Matt Desch
CEO at Iridium

Instead of 2029 or whatever it turns out to be. I hope that's clear.

Matt Desch
Matt Desch
CEO at Iridium

Even when it is, I really.

Matt Desch
Matt Desch
CEO at Iridium

Think as you kind of imply there.

Matt Desch
Matt Desch
CEO at Iridium

will be lots of holds. They probably still won't be as global as we will.

Matt Desch
Matt Desch
CEO at Iridium

I wanted to make it clear our goal isn't to go straight at them and compete.

Matt Desch
Matt Desch
CEO at Iridium

It's to be complementary to them doing things like Iridium NTN Direct, which we think has enduring value regardless of really what happens here.

Tim Horan
Tim Horan
Managing Director at Oppenheimer

That's really helpful. On PNT, it seems like the opportunity now is much larger than it even was two or three years ago. I guess you still think you can hit those revenue targets on PNT, and, you know, what does it kind of take to do that?

Matt Desch
Matt Desch
CEO at Iridium

Yeah, we do. I'm as bullish about, actually more bullish about PNT than I've ever been. I will say it's a little lumpy as the business gets off the ground. There are some really big opportunities that we see ahead of us.

Matt Desch
Matt Desch
CEO at Iridium

It's just the timing of those.

Matt Desch
Matt Desch
CEO at Iridium

Are unclear. I think you're going to see a.

Matt Desch
Matt Desch
CEO at Iridium

Number of announcements in the future, which.

Matt Desch
Matt Desch
CEO at Iridium

Will give you a bit more clear.

Matt Desch
Matt Desch
CEO at Iridium

Understanding of why we're as confident as.

Matt Desch
Matt Desch
CEO at Iridium

We are about that. There are a lot of trials going on.

Matt Desch
Matt Desch
CEO at Iridium

You know, we really do see we.

Matt Desch
Matt Desch
CEO at Iridium

Have a significant competitive advantage.

Matt Desch
Matt Desch
CEO at Iridium

I think you saw the Department of.

Matt Desch
Matt Desch
CEO at Iridium

Transportation announcement this week with T-Mobile. I mean, that's just a small fraction of the potential even in that market.

Matt Desch
Matt Desch
CEO at Iridium

We are really seeing that the technology.

Matt Desch
Matt Desch
CEO at Iridium

Is very complementary to our IoT business.

Matt Desch
Matt Desch
CEO at Iridium

There's a lot of business, for example, in autonomous vehicles of all types that really need a really reliable.

Matt Desch
Matt Desch
CEO at Iridium

Timing and location signal to make sure that what they're depending on in GPS or any other GNSS, the system can be relied on.

Matt Desch
Matt Desch
CEO at Iridium

I think we have a.

Matt Desch
Matt Desch
CEO at Iridium

Tremendous head start and a great opportunity. I did tease out an opportunity that we're building.

Matt Desch
Matt Desch
CEO at Iridium

On top of that, I don't really want to go too.

Matt Desch
Matt Desch
CEO at Iridium

Much more into the cyber security applications. Again, it's things that we can.

Matt Desch
Matt Desch
CEO at Iridium

Do on that platform that others can't.

Matt Desch
Matt Desch
CEO at Iridium

We think that could create interesting new revenue streams, potentially even above and beyond the projections we provided before.

Tim Horan
Tim Horan
Managing Director at Oppenheimer

The next few years you're not going to really see any increased competition. Can you give us a sense of the revenue growth? Will it be better than this year? Are there any, you know, just some of the tailwinds or headwinds? I mean, are we thinking mid single digit revenue growth or, you know, any kind of color given, you know, you pulled some longer term guidance would be really helpful.

Matt Desch
Matt Desch
CEO at Iridium

Yeah, I mean, I'd really like to focus more on providing that in February. I agree with you.

Matt Desch
Matt Desch
CEO at Iridium

I don't think that there's sort of a near-term direct competitive change.

Matt Desch
Matt Desch
CEO at Iridium

I don't think we're getting any benefits from providing really long-term guidance in a changing competitive environment. I'd really like to get.

Matt Desch
Matt Desch
CEO at Iridium

Back at least for some of the guidance. We'll always be probably a much longer term guider than anybody else. I just think everyone should be providing.

Matt Desch
Matt Desch
CEO at Iridium

As much long-term guidance as they.

Matt Desch
Matt Desch
CEO at Iridium

Can, and we're not going to completely.

Matt Desch
Matt Desch
CEO at Iridium

I just would rather not kind of pull off of that.

Matt Desch
Matt Desch
CEO at Iridium

You know, try to lead you to some specific number over the, the.

Matt Desch
Matt Desch
CEO at Iridium

Next two or three years, as you can tell, you know.

Matt Desch
Matt Desch
CEO at Iridium

We're still pretty bullish on our cash flow projection.

Matt Desch
Matt Desch
CEO at Iridium

I think you can back into it.

Matt Desch
Matt Desch
CEO at Iridium

It's that we're not really coming off any kind of general trends here.

Tim Horan
Tim Horan
Managing Director at Oppenheimer

Thank you.

Operator

The next question comes from Greg Mesniaeff with Kingswood Capital Partners. Please go ahead.

Greg Mesniaeff
Managing Director and Senior Technology Analyst at Kingswood Capital Partners

Yes, thank you. Hi, Matt.

Greg Mesniaeff
Managing Director and Senior Technology Analyst at Kingswood Capital Partners

You mentioned that you guys picked up about 70 new distribution partners have been signed. Can you talk about any changes in the terms with these third party resellers in terms of revenue split or economics?

Greg Mesniaeff
Managing Director and Senior Technology Analyst at Kingswood Capital Partners

How is that trending as you.

Greg Mesniaeff
Managing Director and Senior Technology Analyst at Kingswood Capital Partners

Pick up new distribution partners?

Greg Mesniaeff
Managing Director and Senior Technology Analyst at Kingswood Capital Partners

Thanks.

Matt Desch
Matt Desch
CEO at Iridium

Yeah, I mean when we pick up.

Matt Desch
Matt Desch
CEO at Iridium

A new partner, and we describe someone who, say, wants to integrate us into their drone systems or put us on a new ocean sensor or, you know, whatever it might be. I mean, there's a lot of new potential companies.

Matt Desch
Matt Desch
CEO at Iridium

Those are typically kind of, we license their ability to deploy our technology. They're.

Matt Desch
Matt Desch
CEO at Iridium

Allowed to integrate us into maybe their chipset, maybe their end-to-end system, and they can provision and turn on.

Matt Desch
Matt Desch
CEO at Iridium

There is typically a pricing schedule.

Matt Desch
Matt Desch
CEO at Iridium

With that, that really varies.

Matt Desch
Matt Desch
CEO at Iridium

That hasn't really changed in the 25 years, each one.

Matt Desch
Matt Desch
CEO at Iridium

Taps into a fairly consistent, but flexible pricing system that allows them.

Matt Desch
Matt Desch
CEO at Iridium

To provide a service to their customers at competitive rates.

Matt Desch
Matt Desch
CEO at Iridium

The terms aren't changing.

Matt Desch
Matt Desch
CEO at Iridium

I do think that there are some big new opportunities, particularly as.

Matt Desch
Matt Desch
CEO at Iridium

We get into the PNT.

Matt Desch
Matt Desch
CEO at Iridium

Area where pricing is evolving.

Matt Desch
Matt Desch
CEO at Iridium

For example, some people would like to.

Matt Desch
Matt Desch
CEO at Iridium

Build in five to 10 years.

Matt Desch
Matt Desch
CEO at Iridium

PNT per tier protection into a service in a sort of a capital model. We're open to doing that.

Matt Desch
Matt Desch
CEO at Iridium

Someone to kind of pay as they.

Matt Desch
Matt Desch
CEO at Iridium

Use it or by region.

Matt Desch
Matt Desch
CEO at Iridium

We're open to that. You know, those get built into.

Matt Desch
Matt Desch
CEO at Iridium

The specific pricing contracts with a new partner, I don't think that's any different.

Matt Desch
Matt Desch
CEO at Iridium

Now than it would have been in years past.

Greg Mesniaeff
Managing Director and Senior Technology Analyst at Kingswood Capital Partners

Gotcha. Okay, thank you for that.

Operator

Next question comes from Chris Quilty with Quilty Analytics. Please go ahead.

Chris Quilty
Founder and Partner at Quilty Analytics

Thanks, Matt. I wanted to follow up on the T-Mobile D2D announcement. You mentioned, you know, a fraction of the sites, I think it was 90 for the announcement. Can you give us a sense, I mean, of the sort of volume of units? Just if you look at, you know, specifically the cellular market or took it out to the data center market, what sort of penetration do they need? Do they need it in every site or a portion of the sites based upon the operations? I'm just trying to get a scale for how big that might be.

Matt Desch
Matt Desch
CEO at Iridium

Yeah, I mean it's a global market.

Matt Desch
Matt Desch
CEO at Iridium

To protect cellular infrastructure from jamming, it's still starting to be recognized.

Matt Desch
Matt Desch
CEO at Iridium

I mean this specific contract.

Matt Desch
Matt Desch
CEO at Iridium

Just to be more clear, the Department of Transportation is the agency within the.

Matt Desch
Matt Desch
CEO at Iridium

U.S.

Matt Desch
Matt Desch
CEO at Iridium

Government that is tasked with protecting.

Matt Desch
Matt Desch
CEO at Iridium

Critical infrastructure like GPS.

Matt Desch
Matt Desch
CEO at Iridium

They look at the issue in the U.S. market and the potential for terrorism and other activities and are trying to find what are the solutions that.

Matt Desch
Matt Desch
CEO at Iridium

Are out there that can.

Matt Desch
Matt Desch
CEO at Iridium

They provided money to a number of different organizations.

Matt Desch
Matt Desch
CEO at Iridium

We were kind of.

Matt Desch
Matt Desch
CEO at Iridium

Told and indicated that our with T.

Matt Desch
Matt Desch
CEO at Iridium

Mobile, we were one of the most ready and available today, and the only really global solution that could be kind of attack this problem overall, specifically with T-Mobile.

Matt Desch
Matt Desch
CEO at Iridium

We had already been doing some work with them on some of their in.

Matt Desch
Matt Desch
CEO at Iridium

Building systems, but you know this was.

Matt Desch
Matt Desch
CEO at Iridium

A goal to demonstrate the value of.

Matt Desch
Matt Desch
CEO at Iridium

Our technology to protect macro base station sites.

Matt Desch
Matt Desch
CEO at Iridium

It has kind of doubled the number of applications. Really, as it's successful and demonstrated here, if there's any kind of issues, I could see this being deployed much more widely to thousands and thousands of cell sites. I think you could also see other cell phone companies that aren't protected today realize that this is a very cost-effective way to add a layer.

Matt Desch
Matt Desch
CEO at Iridium

Protection to what is critical infrastructure. Our cell phones, our ability to operate terrestrially, are really critical. Critical.

Matt Desch
Matt Desch
CEO at Iridium

It is a big market

Chris Quilty
Founder and Partner at Quilty Analytics

and real.

Chris Quilty
Founder and Partner at Quilty Analytics

Quickly, I mean, in your core business, you're wholly focused on the wholesale market, obviously having acquired to tell us they had a direct and indirect approach to the market. What's your go-to-market approach long.

Chris Quilty
Founder and Partner at Quilty Analytics

Term there

Matt Desch
Matt Desch
CEO at Iridium

in PNT directly or in that specific market?

Chris Quilty
Founder and Partner at Quilty Analytics

No, in PNT, direct generally, yeah.

Matt Desch
Matt Desch
CEO at Iridium

Lots of new partner discussions, a lot of new areas. We're not necessarily going to go direct as well. I don't think there'll be many opportunities for that.

Matt Desch
Matt Desch
CEO at Iridium

We are developing new technology. I think you'll hear about that shortly. I think that will expand the market tremendously.

Matt Desch
Matt Desch
CEO at Iridium

We've had some talk about putting our algorithms into their systems directly, but it will really be similar to the way we go to market in a two-way communication solution, but it will be a much larger expanded base.

Matt Desch
Matt Desch
CEO at Iridium

Companies that will want to embed us into their solution. It will not be direct still.

Matt Desch
Matt Desch
CEO at Iridium

It will be companies who, like the ones today who are experts in the timing market or in the PNT.

Matt Desch
Matt Desch
CEO at Iridium

The market, but it'll be a lot.

Matt Desch
Matt Desch
CEO at Iridium

Of new companies as well.

Matt Desch
Matt Desch
CEO at Iridium

Will.

Matt Desch
Matt Desch
CEO at Iridium

Want to integrate us into their solutions.

Chris Quilty
Founder and Partner at Quilty Analytics

To be clear, the revenue opportunity, is that fully service and license revenue or is there a hardware component, and what does that mix look like over time?

Matt Desch
Matt Desch
CEO at Iridium

There's a hardware component to it, potentially.

Matt Desch
Matt Desch
CEO at Iridium

We make margins on that as anything else.

Matt Desch
Matt Desch
CEO at Iridium

If there's a high volume, which this.

Matt Desch
Matt Desch
CEO at Iridium

Is something that could become a high.

Matt Desch
Matt Desch
CEO at Iridium

Volume business, that will be high volume of kind of low margin hardware equipment. What we really want is service revenue, global service revenue. Whether that's baked into our partner's product, or it's something we offer on a regional basis, or something that's really developing right now.

Chris Quilty
Founder and Partner at Quilty Analytics

Gotcha.

Chris Quilty
Founder and Partner at Quilty Analytics

On the UAV market, you talked about it before, but ostensibly you've got two opportunities. TTNC capability, you know, with like a Certus device, but also PNT or all PNT. Why is that market not booming given, you know, the hundreds or thousands of long-range UAVs flying around Europe and Middle East nowadays?

Matt Desch
Matt Desch
CEO at Iridium

It is in our IoT business primarily. There's a number of partners who have.

Matt Desch
Matt Desch
CEO at Iridium

Put us into all kinds of drones.

Matt Desch
Matt Desch
CEO at Iridium

I think that's expanding as the drone world.

Matt Desch
Matt Desch
CEO at Iridium

I mean, that's obviously more the defense space.

Matt Desch
Matt Desch
CEO at Iridium

I think we are being used in that space. I do think PNT is still fairly new to that and will become an important, important part of that. Things where that market really expands, whether it's delivery drones or the urban air mobility market or just a lot of other drone applications.

Matt Desch
Matt Desch
CEO at Iridium

I think I have other issues with beyond.

Matt Desch
Matt Desch
CEO at Iridium

Visual line of sight regulations, which are just now coming to fore, which we've been part of.

Matt Desch
Matt Desch
CEO at Iridium

We're starting to see those getting clear.

Matt Desch
Matt Desch
CEO at Iridium

We will be a big part of that as the BVLOS standards emerge, and I think that will make the market.

Matt Desch
Matt Desch
CEO at Iridium

Expand quite more broadly.

Matt Desch
Matt Desch
CEO at Iridium

Everything today is almost being done on waiver or on, you know, trials or prototypes and that sort of thing. I think that's going to change in the coming years.

Chris Quilty
Founder and Partner at Quilty Analytics

Gotcha. If I can, one final Viasat and Space42 came out with their Equatys whatever announcement for the new joint venture company. Still no Iridium mentioned in any of these announcements. Can you talk about how you view that effort? Is it something that you view as competitive or something you could contribute to? Can you contribute your spectrum to the pool there without causing interference or other issues with your network? What's your current thinking?

Matt Desch
Matt Desch
CEO at Iridium

It's hard to tell what that really is yet.

Matt Desch
Matt Desch
CEO at Iridium

I mean, it's an interesting idea. I've talked to Mark Dankberg, the CEO of Viasat, about it. I mean, he tried to explain sort of the vision that they have for that.

Matt Desch
Matt Desch
CEO at Iridium

It's a very complicated vision.

Matt Desch
Matt Desch
CEO at Iridium

It requires a lot of new technology, new development, and a lot of investment. I'm not really interested in investing in.

Matt Desch
Matt Desch
CEO at Iridium

The opportunity, and perhaps they're not even looking for that.

Matt Desch
Matt Desch
CEO at Iridium

This concept has certainly not only.

Matt Desch
Matt Desch
CEO at Iridium

Not been tried, but it's going to.

Matt Desch
Matt Desch
CEO at Iridium

Be a very complicated business model to implement, and you're going to be competing.

Matt Desch
Matt Desch
CEO at Iridium

Competing with potentially some other well-funded.

Matt Desch
Matt Desch
CEO at Iridium

Deep pocketed.

Matt Desch
Matt Desch
CEO at Iridium

Companies.

Matt Desch
Matt Desch
CEO at Iridium

As I said in my remarks, it's not really clear how big the broadband D2D market is. I mean, I'm sure that there will be a market for the service, but how well the service will work, what people will pay for it, what the assets in space that you really have to cover to provide a long-term value.

Matt Desch
Matt Desch
CEO at Iridium

It isn't going to replace terrestrial communications.

Matt Desch
Matt Desch
CEO at Iridium

It's going to really be an.

Matt Desch
Matt Desch
CEO at Iridium

Augmented field kind of application.

Matt Desch
Matt Desch
CEO at Iridium

I know that there's really high valuations with some people that are still projected to even be in that business. Until we see how global those services are, what the value propositions are, I'm not interested in kind of necessarily jumping into that, but could we be part of that long term?

Matt Desch
Matt Desch
CEO at Iridium

I've been given the opportunity, certainly.

Matt Desch
Matt Desch
CEO at Iridium

If that does develop, you know it's going to be many years for it to develop into something that we could.

Matt Desch
Matt Desch
CEO at Iridium

Even think to participate in.

Matt Desch
Matt Desch
CEO at Iridium

I'll just keep an eye on it and see what the market thinks about it. Right now, I think you would probably.

Matt Desch
Matt Desch
CEO at Iridium

Agree with me that the investment world.

Matt Desch
Matt Desch
CEO at Iridium

Isn't, you know, dying to throw money at new players right now. I think that was really more demonstrated with, you know, Lynk and Omnispace.

Matt Desch
Matt Desch
CEO at Iridium

Getting together this week as well.

Chris Quilty
Founder and Partner at Quilty Analytics

Got it.

Chris Quilty
Founder and Partner at Quilty Analytics

Thanks for the color.

Matt Desch
Matt Desch
CEO at Iridium

Okay, thanks.

Operator

The next question comes from Hamed Khorsand with BWS. Please go ahead.

Hamed Khorsand
Principal and Director of Research at BWS

Hi.

Hamed Khorsand
Principal and Director of Research at BWS

Thanks for taking the question. Just one.

Hamed Khorsand
Principal and Director of Research at BWS

On the consumer IoT side, are you able to differentiate the gains in the quarter coming from your partners that are not on a fixed contract with you?

Matt Desch
Matt Desch
CEO at Iridium

You mean some smaller partners like Zoleo, Bivy, everywhere, and somewhere.

Matt Desch
Matt Desch
CEO at Iridium

A number of others that provide consumer IoT services?

Hamed Khorsand
Principal and Director of Research at BWS

Yeah.

Hamed Khorsand
Principal and Director of Research at BWS

Versus your large customer that's on a fixed contract?

Matt Desch
Matt Desch
CEO at Iridium

Yes, we know how many subscribers they are. It's a small part of our overall IoT business. They also are continuing to. We're not seeing any real impact. If the implication is, what are they seeing, say, from D2D? They're not really seeing.

Matt Desch
Matt Desch
CEO at Iridium

They grew in the quarter.

Matt Desch
Matt Desch
CEO at Iridium

I don't have that information at my, you know, there's different things going on with each of those. I'd really.

Matt Desch
Matt Desch
CEO at Iridium

You'd have to ask each of them where they're at. I mean, we don't usually speak to any specific partners.

Hamed Khorsand
Principal and Director of Research at BWS

Okay. All right.

Hamed Khorsand
Principal and Director of Research at BWS

That was it for me.

Hamed Khorsand
Principal and Director of Research at BWS

Thank you.

Matt Desch
Matt Desch
CEO at Iridium

Okay.

Matt Desch
Matt Desch
CEO at Iridium

Thanks, Hamed.

Operator

The next question comes from Louis DiPalma with William Blair. Please go ahead.

Louie DiPalma
Louie DiPalma
Aerospace & Defense, Smart Cities Equity Research Analyst at William Blair

Vincent and Ken, good morning.

Vince O'Neill
Vince O'Neill
CFO at Iridium

Hey, Louis.

Louie DiPalma
Louie DiPalma
Aerospace & Defense, Smart Cities Equity Research Analyst at William Blair

I missed the earlier part of the call, but caught some of the Q&A given the rapidly changing industry dynamics. Matt, did you indicate that you plan on exploring strategic options, or is the message just that your phone line is open?

Matt Desch
Matt Desch
CEO at Iridium

I think what I said was that we recognize that competition long term is in our business and that we will be pivoting to do more, using our growing cash flow to acquire and.

Matt Desch
Matt Desch
CEO at Iridium

Make additional investments in areas which are.

Matt Desch
Matt Desch
CEO at Iridium

Unique and for which we can protect and for which we can provide value. That gives us confidence in our.

Matt Desch
Matt Desch
CEO at Iridium

Ability to continue to grow and compete long term. That's a brief summary, but you probably.

Matt Desch
Matt Desch
CEO at Iridium

Should go through my comments in more detail, because I think I was very specific about addressing the overall changing global.

Matt Desch
Matt Desch
CEO at Iridium

Marketplace and what our intentions were.

Louie DiPalma
Louie DiPalma
Aerospace & Defense, Smart Cities Equity Research Analyst at William Blair

Sounds good. Has there been any discussion on Aireon being part of the FAA's air traffic control modernization?

Matt Desch
Matt Desch
CEO at Iridium

Yeah, I've talked to Don and of.

Matt Desch
Matt Desch
CEO at Iridium

course we're on the board, and so we get a lot of visibility to that.

Matt Desch
Matt Desch
CEO at Iridium

The big new air traffic control system for which they're funding.

Matt Desch
Matt Desch
CEO at Iridium

There is some discussion in there about.

Matt Desch
Matt Desch
CEO at Iridium

About things that Iridium would be particularly capable at, things like in Alaska, the Caribbean, and some areas.

Matt Desch
Matt Desch
CEO at Iridium

There's no discussions about oceanic right now in terms of the.

Matt Desch
Matt Desch
CEO at Iridium

Which is really where I think Iridium would excel and for which there's a.

Matt Desch
Matt Desch
CEO at Iridium

Lot of airspace they could provide service.

Matt Desch
Matt Desch
CEO at Iridium

There have been discussions, I think.

Matt Desch
Matt Desch
CEO at Iridium

Continuing discussions with the FAA and Aireon about serving those areas long term.

Matt Desch
Matt Desch
CEO at Iridium

Aireon's pretty confident that long term they'll be supplying that service as well.

Matt Desch
Matt Desch
CEO at Iridium

I think there's opportunities there for Aireon, definitely.

Louie DiPalma
Louie DiPalma
Aerospace & Defense, Smart Cities Equity Research Analyst at William Blair

For your narrowband non-terrestrial network solution, will the chipsets be available next year, and what's the general timing of the Deutsche Telekom roaming partnership going live?

Matt Desch
Matt Desch
CEO at Iridium

Yeah, the chipsets will be available next year.

Matt Desch
Matt Desch
CEO at Iridium

In fact, we have prototype chipsets today. We're in discussions for more chipsets.

Matt Desch
Matt Desch
CEO at Iridium

You'll see that over time with other manufacturers making those available as well.

Matt Desch
Matt Desch
CEO at Iridium

Not a lot of changes to that.

Matt Desch
Matt Desch
CEO at Iridium

Have to make to accommodate us, but those will be available in the 2026 time frame.

Matt Desch
Matt Desch
CEO at Iridium

We do plan on having the.

Matt Desch
Matt Desch
CEO at Iridium

Service available, you know, in 2026 at some point. A lot of testing to go, probably more the latter half instead of the former half, but there will be chipsets.

Matt Desch
Matt Desch
CEO at Iridium

Available to support that.

Louie DiPalma
Louie DiPalma
Aerospace & Defense, Smart Cities Equity Research Analyst at William Blair

Will those chipsets be different from mass market, like smartphone chipsets? Is there timing on when your spectrum band would be included in mass market chipsets?

Matt Desch
Matt Desch
CEO at Iridium

No, those are mass market chipsets.

Matt Desch
Matt Desch
CEO at Iridium

These are the chipsets that these suppliers that we'll be talking about.

Matt Desch
Matt Desch
CEO at Iridium

The first that we've announced is Nordic. You know, that is a standard Nordic chipset that will have our capability in it along with all the many others.

Matt Desch
Matt Desch
CEO at Iridium

That they have in that same chipset.

Matt Desch
Matt Desch
CEO at Iridium

The terrestrial spectrum as well as satellite.

Matt Desch
Matt Desch
CEO at Iridium

Spectrums that would be in there.

Matt Desch
Matt Desch
CEO at Iridium

If someone implements that, they can roam under our network.

Louie DiPalma
Louie DiPalma
Aerospace & Defense, Smart Cities Equity Research Analyst at William Blair

Thanks, Matt. Thanks, Vincent. Thanks, Ken.

Matt Desch
Matt Desch
CEO at Iridium

Thanks, Louis.

Operator

The last question comes from Justin Lang with Morgan Stanley. Please go ahead.

Justin Lang
Justin Lang
VP at Morgan Stanley

Hi. Thanks for squeezing me in. I'll just stick to one here. Matt, just coming back to the acquisition pipeline. Apologies if I missed this, but curious if you could just generally size some of the opportunities you're looking at or just give us some general parameters. Is this more about a series of smaller deals that give you toeholds in new markets or are you really weighing something transformational and that's the message we should take away. Thanks.

Matt Desch
Matt Desch
CEO at Iridium

I don't want to guide to either one of those necessarily. There are companies in both those categories. I would say I would lean towards more transformational deals as opposed to, given the effort involved, with very small things.

Matt Desch
Matt Desch
CEO at Iridium

We're not looking to radically change our business model. We're not. I think I'm not going to.

Matt Desch
Matt Desch
CEO at Iridium

Be that different in terms of what we're looking at, as to what I've told you in.

Matt Desch
Matt Desch
CEO at Iridium

The past.

Matt Desch
Matt Desch
CEO at Iridium

Our goal isn't to go retail, for example. I mean, we're probably likely to stay wholesale.

Matt Desch
Matt Desch
CEO at Iridium

There are some business areas that.

Matt Desch
Matt Desch
CEO at Iridium

Are complementary for which we can take.

Matt Desch
Matt Desch
CEO at Iridium

A bigger part of the value chain.

Matt Desch
Matt Desch
CEO at Iridium

For which would lead us into using.

Matt Desch
Matt Desch
CEO at Iridium

Our network in new ways.

Matt Desch
Matt Desch
CEO at Iridium

Some of those are big and some.

Matt Desch
Matt Desch
CEO at Iridium

Those are small, you know. We'll let you know when we get a bit more specific about those things.

Justin Lang
Justin Lang
VP at Morgan Stanley

Okay, makes sense. Thanks.

Operator

This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks.

Matt Desch
Matt Desch
CEO at Iridium

Yeah, I know this is a bit longer.

Matt Desch
Matt Desch
CEO at Iridium

I just wanted to.

Matt Desch
Matt Desch
CEO at Iridium

There were a lot of questions, and I wanted to give everybody a chance to talk about it.

Matt Desch
Matt Desch
CEO at Iridium

Given the changing nature of the industry and some of the things we talked about today, I hope you sensed our continued enthusiasm and confidence.

Matt Desch
Matt Desch
CEO at Iridium

I mean, these are.

Matt Desch
Matt Desch
CEO at Iridium

It was a big announcement recently.

Matt Desch
Matt Desch
CEO at Iridium

I know the market reacted to it, but I really think we have a.

Matt Desch
Matt Desch
CEO at Iridium

Strong potential and strong future ahead.

Matt Desch
Matt Desch
CEO at Iridium

Us and a lot of opportunity ahead.

Matt Desch
Matt Desch
CEO at Iridium

We're looking forward to talking to you, I guess, in the meantime and certainly at our next quarterly call.

Matt Desch
Matt Desch
CEO at Iridium

Thanks for joining us.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Analysts
    • Vince O'Neill
      CFO at Iridium
    • Justin Lang
    • Mathieu Robilliard
      Analyst at Barclays
    • Hamed Khorsand
      Principal and Director of Research at BWS
    • Edison Yu
      Analyst at Deutsche Bank
    • Tim Horan
      Managing Director at Oppenheimer
    • Ken Levy
      VP of Investor Relations at Iridium
    • Matt Desch
      CEO at Iridium
    • Chris Quilty
      Founder and Partner at Quilty Analytics
    • Greg Mesniaeff
      Managing Director and Senior Technology Analyst at Kingswood Capital Partners
    • Louie DiPalma
      Aerospace & Defense, Smart Cities Equity Research Analyst at William Blair
    • Colin Canfield
      Equity Analyst at Cantor
    • Ric Prentiss
      Managing Director at Raymond James