Financial Analysis

5. Debt Term Loan and Revolving Facility Pursuant to a credit agreement (as amended to date, the Credit Agreement), the Company previously entered into a term loan totaling $1,500.0 million (as amended and restated, the Term Loan), issued at a price equal to 99.75% of its face value, and an accompanying $100.0 million revolving loan (the Revolving Facility). The maturities of the Term Loan and Revolving Facility are in September 2030 and September 2028, respectively. During the year ended December 31, 2024, the Company borrowed an additional $325.0 million under its Term Loan, comprised of $125.0 million on March 25, 2024, issued at a price equal to 99.875% of its face value, and $200.0 million on July 30, 2024, issued at 99.0% of its face value. The additional amounts borrowed are fungible with the original $1,500.0 million and have the same maturity date, interest rate, and other terms. The proceeds from the March 2024 Term Loan were used for the acquisition of Satelles, Inc. on April 1, 2024. In March 2025 and April 2025, the Company drew down $20.0 million and $30.0 million on its Revolving Facility, respectively, for general corporate purposes, all of which was repaid prior to December 31, 2025. On July 1, 2026, the Company drew down $100.0 million on its Revolving Facility, the proceeds of which were used for the acquisition of Aireon Holdings LLC (Aireon Holdings) (see Note 1 5 ). The Term Loan has been repriced on several occasions, most recently in June 2024, and cur …

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The following table summarizes the Companys services revenue: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) (In thousands) Commercial services revenue: Voice and data $ 58,387 $ 56,810 $ 115,820 $ 112,752 IoT data 47,071 44,741 93,037 88,596 Broadband 11,674 12,724 23,896 25,600 Hosted payload and other data 16,571 14,545 31,354 29,414 Total commercial services revenue 133,703 128,820 264,107 256,362 Government services revenue 27,625 26,750 55,250 53,500 Total services revenue $ 161,328 $ 155,570 $ 319,357 $ 309,862 …

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Stock-Based Compensation In May 2025, the Companys stockholders approved the amendment and restatement of the Companys 2015 Equity Incentive Plan (as so amended and restated, the Amended 2015 Plan). As of June 30, 2026, the aggregate number of shares remaining available for future grants under the Amended 2015 Plan was 10,640,033. The Amended 2015 Plan provides for the grant of stock-based awards, including nonqualified stock options, incentive stock options, restricted stock, RSUs, stock appreciation rights, and other equity securities to employees, consultants, and non-employee directors of the Company and its affiliated entities. The number of shares of common stock available for issuance under the Amended 2015 Plan is reduced by (i) one share for each share of common stock issued pursuant to an appreciation award, such as a stock option or stock appreciation right with an exercise or strike price of at least 100% of the fair market value of the underlying common stock on the date of grant, and (ii) 1.8 shares for each share of common stock issued pursuant to any stock award that is not an appreciation award, also known as a full value award. The Amended 2015 Plan allows the Company to utilize a broad array of equity incentives and performance cash incentives in order to secure and retain the services of its employees, directors and consultants, and to provide long-term incentives that align the interests of its employees, directors and consultants with the interests of th …

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Intangible Assets and Goodwill Intangible Assets The following tables present identifiable intangible assets: June 30, 2026 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 (12,070) 4,369 Patents 14 - 20 years 587 (270) 317 Customer relationships 12 years 57,000 (14,245) 42,755 Total 74,026 (26,585) 47,441 Total intangible assets $ 109,251 $ (26,585) $ 82,666 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 Amortization expense was $2.1 million and $1.0 million for the three months ended June 30, 2026 and June 30, 2025, respectively, and $4.2 million and $2.0 million for the six months ended June 30, 2026 and June 30, 2025, respectively. Goodwill At each of June 30, 2026 and December 31, 2025, the Companys goodwill balance was $98.9 million. The goodwill balance wa …

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Income Taxes Income before income taxes and loss on equity method investments was $14.3 million and $45.5 million for the three and six months ended June 30, 2026, respectively, while the income tax expense was $3.1 million and $12.0 million, respectively. The effective tax rate was 21.8% and 26.3% for the three and six months ended June 30, 2026, respectively, which differed from the federal statutory rate of 21%, primarily due to acquisition costs, discrete tax expense associated with stock compensation and nondeductible executive compensation, partially offset by tax benefit from the deduction for foreign derived deduction eligible income and U.S. tax credits. Income before income taxes and loss on equity method investments was $26.6 million and $63.5 million for the three and six months ended June 30, 2025, respectively, while the income tax expense was $3.8 million and $9.6 million, respectively. The effective tax rate was 14.3% and 15.2% for the three and six months ended June 30, 2025, respectively, which differed from the federal statutory rate of 21%, primarily due to a tax benefit from the deduction for foreign derived intangible income and U.S. tax credits, partially offset by discrete tax expense associated with stock compensation and nondeductible executive compensation.

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Recently Issued Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (FASB) issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (ASU 2024-03). This guidance requires detailed disaggregation of certain expense captions presented on the face of the income statement, through enhanced disclosures about types of expenses within the footnotes to the financial statements. ASU 2024-03 is effective for public entities for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The ASU is required to be adopted prospectively; however, public entities are permitted to apply the ASU retrospectively. The Company is currently evaluating the effect ASU 2024-03 may have on its footnotes; however, the standard will not have an impact on the Companys consolidated financial position, results of operations or cash flows. …

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"12. Related Party Transactions Aireon LLC and Aireon Holdings LLC The Companys satellite constellation hosts the Aireon system. The Aireon system was developed by Aireon, 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 Companys satellites. Aireon is the operator of the world's only space-based ADS-B air traffic surveillance system. 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. As of June 30, 2026, the Company and the other Aireon investors held their interests in 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 approximate 6% preferred membership interest in Aireon Holdings. The Companys investment in Aireon Holdings is accounted for as an equity method investment. The carrying value of the Companys investment in Aireon Holdings was $36.3 million and $38.5 million as of Jun …

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Revenue The following table summarizes the Companys services revenue: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) (In thousands) Commercial services revenue: Voice and data $ 58,387 $ 56,810 $ 115,820 $ 112,752 IoT data 47,071 44,741 93,037 88,596 Broadband 11,674 12,724 23,896 25,600 Hosted payload and other data 16,571 14,545 31,354 29,414 Total commercial services revenue 133,703 128,820 264,107 256,362 Government services revenue 27,625 26,750 55,250 53,500 Total services revenue $ 161,328 $ 155,570 $ 319,357 $ 309,862 The following table summarizes the Companys engineering and support services revenue: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands) (In thousands) Commercial $ 1,689 $ 2,404 $ 3,032 $ 4,041 Government 41,453 39,477 80,919 75,305 Total engineering and support services revenue $ 43,142 $ 41,881 $ 83,951 $ 79,346 Approximately 44% and 46% of the Companys accounts receivable balance at June 30, 2026 and December 31, 2025, respectively, were due from prime contracts or subcontracts with agencies of the U.S. government. The Companys contracts with customers generally do not contain performance obligations with terms in excess of one year. As such, the Company does not disclose details related to the value of performance obligations that are unsatisfied as of the end of the reporting period. The total value of any performance obligations that extend beyond one year is immateria …

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Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to revenue recognition, the useful lives and recoverability of long-lived and intangible assets, goodwill, income taxes, stock-based compensation, the incremental borrowing rate for its leases, and contingencies, among others. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenues and expenses. Actual results could differ materially from those estimates. Recently Issued Accounting Pronouncements In November 2024, the Financial Accounting Standards Board (FASB) issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (ASU 2024-03). This guidance requires detailed disaggregation of certain expense captions presented on the face of the income statement, through enha …

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Equity Transactions Preferred Stock The Company is authorized to issue 2.0 million shares of preferred stock with a par value of $0.0001 per share. The Company previously issued 1.5 million shares of preferred stock, all of which have been converted to common stock. The remaining 0.5 million authorized shares of preferred stock remained undesignated and unissued as of June 30, 2026 and December 31, 2025. As of June 30, 2026 and December 31, 2025, 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 Companys Board of Directors from time to time, dividends and other distributions in cash, stock or property from the Companys assets or funds legally and contractually available for such purposes. In December 2022, the Companys Board of Directors initiated a quarterly dividend. The Company paid dividends of $0.15 per share of common stock for each of the three months ended March 31 and June 30, 2026, resulting in total payments to stockholders of $32.7 million for the six months ended June 30, 2026. The Company paid dividends of $0.14 per share of common stock for each of the three months ended March 31 and June 30, 2025, resulting in total dividend payments for the six months ended June 30, 2025 of $30.8 million. The Companys liability related to dividends on common shares underlying unvested restricte …

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15. Subsequent Events On July 2, 2026, the Company, through its wholly owned subsidiary Iridium Monitor Holdings LLC (Iridium Monitor Holdings), completed its previously announced acquisition of the remaining 60.5% of equity interests in Aireon Holdings that the Company did not already own pursuant to a Securities Purchase Agreement with NAV CANADA, the Irish Air Navigation Service, ENAV S.P.A., Naviair Surveillance A/S, NATS (Services) Limited, and certain of their affiliated entities (collectively, the Sellers). The Company now indirectly owns all of the membership interests in Aireon Holdings and its subsidiary Aireon. The aggregate purchase price payable to the Sellers was approximately $366.7 million, of which 50% was paid in cash at the closing of the acquisition (the Aireon Closing) and the remaining 50% was deferred in the form of a loan by the Sellers, payable one year following the Aireon Closing pursuant to a Credit and Guaranty Agreement. Prior to the acquisition, on July 1, 2026, the Company drew down $100.0 million on its Revolving Facility as a source for cash paid at the Aireon Closing. As a result of the acquisition, the Company's debt obligations have increased, incorporating a $183.4 million one-year, non-interest-bearing loan from the sellers and the consolidation of Aireon's existing term loans, which had an outstanding balance of $154.7 million at the closing date. …

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