10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-33963  

Iridium Communications Inc.

(Exact name of registrant as specified in its charter)

DE	26-1344998
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1750 Tysons Boulevard, Suite 1400, McLean, VA 22102

(Address of principal executive offices, including zip code)

703-287-7400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.001 par value	IRDM	The Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large Accelerated Filer	x	Accelerated Filer	¨
Non-Accelerated Filer	¨	Smaller Reporting Company	¨
		Emerging Growth Company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  x

The number of shares of the registrant’s common stock, par value $0.001 per share, outstanding as of October 12, 2023 was 123,850,566.

IRIDIUM COMMUNICATIONS INC.

TABLE OF CONTENTS

Item No.		Page
Part I. Financial Information
	Financial Statements:
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
ITEM  2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
ITEM  3.	Quantitative and Qualitative Disclosures About Market Risk	28
ITEM  4.	Controls and Procedures	28
Part II. Other Information
ITEM  1.	Legal Proceedings	29
ITEM  1A.	Risk Factors	29
ITEM  2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
ITEM  3.	Defaults Upon Senior Securities	29
ITEM  4.	Mine Safety Disclosures	29
ITEM  5.	Other Information	29
ITEM  6.	Exhibits	30
	Signatures	31

2

PART I.

Iridium Communications Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

	September 30, 2023		December 31, 2022
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	67,877	$	168,770
Accounts receivable, net	100,718		82,273
Inventory	71,136		39,776
Prepaid expenses and other current assets	13,200		15,385
Total current assets	252,931		306,204
Property and equipment, net	2,229,188		2,433,305
Equity method investments	68,863		49,853
Other assets	113,325		122,072
Intangible assets, net	41,407		42,577
Total assets	$	2,705,714	$	2,954,011
Liabilities and stockholders’ equity
Current liabilities:
Short-term secured debt	$	11,250	$	16,500
Accounts payable	14,440		21,372
Accrued expenses and other current liabilities	59,235		67,963
Deferred revenue	34,078		35,742
Total current liabilities	119,003		141,577
Long-term secured debt, net	1,470,674		1,470,685
Deferred income tax liabilities, net	131,587		151,569
Deferred revenue, net of current portion	42,530		45,265
Other long-term liabilities	16,918		16,360
Total liabilities	1,780,712		1,825,456
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value, 300,000 shares authorized, 123,821 and 125,902 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	124		126
Additional paid-in capital	1,105,245		1,124,610
Accumulated deficit	(233,593)		(47,744)
Accumulated other comprehensive income, net of tax	53,226		51,563
Total stockholders’ equity	925,002		1,128,555
Total liabilities and stockholders’ equity	$	2,705,714	$	2,954,011

See notes to unaudited condensed consolidated financial statements.

3

Iridium Communications Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue:
Services	$	151,950	$	138,977	$	436,441	$	397,947
Subscriber equipment	20,422		27,959		89,474		95,462
Engineering and support services	25,230		17,124		70,068		33,789
Total revenue	197,602		184,060		595,983		527,198
Operating expenses:
Cost of services (exclusive of depreciation and amortization)	41,394		34,378		113,431		83,796
Cost of subscriber equipment	12,823		18,406		56,075		60,382
Research and development	5,037		4,865		14,541		10,470
Selling, general and administrative	33,368		32,140		109,391		86,905
Depreciation and amortization	76,825		76,397		267,213		227,739
Total operating expenses	169,447		166,186		560,651		469,292
Operating income	28,155		17,874		35,332		57,906
Other expense, net:
Interest expense, net	(34,660)		(17,632)		(71,273)		(46,989)
Other income (expense), net	343		(146)		981		(374)
Total other expense, net	(34,317)		(17,778)		(70,292)		(47,363)
Income (loss) before income taxes	(6,162)		96		(34,960)		10,543
Income tax benefit (expense)	6,009		2,053		16,673		(1,013)
Loss on equity method investments	(1,489)		—		(4,321)		—
Net income (loss)	$	(1,642)	$	2,149	$	(22,608)	$	9,530
Weighted average shares outstanding - basic	125,176		127,697		126,100		128,800
Weighted average shares outstanding - diluted	125,176		129,075		126,100		130,284
Net income (loss) attributable to common stockholders per share - basic and diluted	$	(0.01)	$	0.02	$	(0.18)	$	0.07
Comprehensive income (loss):
Net income (loss)	$	(1,642)	$	2,149	$	(22,608)	$	9,530
Foreign currency translation adjustments	(712)		(366)		(753)		115
Unrealized gain on cash flow hedges, net of tax (see Note 6)	2,011		25,537		2,416		63,971
Comprehensive income (loss)	$	(343)	$	27,320	$	(20,945)	$	73,616

See notes to unaudited condensed consolidated financial statements.

4

Iridium Communications Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended September 30, 2023											Three Months Ended September 30, 2022
	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders’ Equity		Common Stock			Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount										Shares	Amount
Balances at beginning of period	125,045	$	125	$	1,118,623	$	(170,482)	$	51,927	$	1,000,193	127,179	$	127	$	1,128,103	$	21,011	$	31,863	$	1,181,104
Stock-based compensation	—	—		17,654		—		—		17,654		—	—		15,573		—		—		15,573
Stock options exercised and awards vested	213	—		72		—		—		72		344	—		1,903		—		—		1,903
Stock withheld to cover employee taxes	(14)	—		(727)		—		—		(727)		(13)	—		(574)		—		—		(574)
Repurchases and retirements of common stock	(1,423)	(1)		(13,904)		(61,469)		—		(75,374)		(1,751)	(1)		(19,305)		(60,923)		—		(80,229)
Dividends	—	—		(16,473)		—		—		(16,473)		—	—		—		—		—		—
Cumulative translation adjustments	—	—		—		—		(712)		(712)		—	—		—		—		(366)		(366)
Unrealized gain on cash flow hedges, net of tax	—	—		—		—		2,011		2,011		—	—		—		—		25,537		25,537
Net income (loss)	—	—		—		(1,642)		—		(1,642)		—	—		—		2,149		—		2,149
Balances at end of period	123,821	$	124	$	1,105,245	$	(233,593)	$	53,226	$	925,002	125,759	$	126	$	1,125,700	$	(37,763)	$	57,034	$	1,145,097

	Nine Months Ended September 30, 2023											Nine Months Ended September 30, 2022
	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders’ Equity		Common Stock			Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
	Shares	Amount										Shares	Amount
Balances at beginning of period	125,902	$	126	$	1,124,610	$	(47,744)	$	51,563	$	1,128,555	131,342	$	131	$	1,154,058	$	140,810	$	(7,052)	$	1,287,947
Stock-based compensation	—	—		50,761		—		—		50,761		—	—		34,952		—		—		34,952
Stock options exercised and awards vested	1,485	1		3,749		—		—		3,750		1,080	1		2,572		—		—		2,573
Stock withheld to cover employee taxes	(144)	—		(8,644)		—		—		(8,644)		(117)	—		(4,598)		—		—		(4,598)
Repurchases and retirements of common stock	(3,422)	(3)		(31,895)		(163,241)		—		(195,139)		(6,546)	(6)		(61,284)		(188,103)		—		(249,393)
Dividends	—	—		(33,336)		—		—		(33,336)		—	—		—		—		—		—
Cumulative translation adjustments	—	—		—		—		(753)		(753)		—	—		—		—		115		115
Unrealized gain on cash flow hedges, net of tax	—	—		—		—		2,416		2,416		—	—		—		—		63,971		63,971
Net income (loss)	—	—		—		(22,608)		—		(22,608)		—	—		—		9,530		—		9,530
Balances at end of period	123,821	$	124	$	1,105,245	$	(233,593)	$	53,226	$	925,002	125,759	$	126	$	1,125,700	$	(37,763)	$	57,034	$	1,145,097

See notes to unaudited condensed consolidated financial statements.

5

Iridium Communications Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2023		2022
Cash flows from operating activities:
Net income (loss)	$	(22,608)	$	9,530
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Deferred income taxes	(20,753)		(286)
Depreciation and amortization	267,213		227,739
Stock-based compensation (net of amounts capitalized)	45,502		31,626
Amortization of deferred financing fees	3,142		3,488
All other items, net	4,705		450
Changes in operating assets and liabilities:
Accounts receivable	(18,675)		(23,109)
Inventory	(30,979)		(9,642)
Prepaid expenses and other current assets	1,869		(1,860)
Other assets	2,449		1,989
Accounts payable	(9,147)		13,071
Accrued expenses and other current liabilities	9,371		(598)
Deferred revenue	(3,122)		4,870
Other long-term liabilities	(1,861)		(2,810)
Net cash provided by operating activities	227,106		254,458
Cash flows from investing activities:
Capital expenditures	(57,285)		(44,756)
Investment in related party	(10,000)		(50,000)
Net cash used in investing activities	(67,285)		(94,756)
Cash flows from financing activities:
Borrowings under the Term Loan	63,940		—
Payments on the Term Loan	(72,315)		(12,375)
Repurchases of common stock	(195,139)		(249,393)
Payment of deferred financing fees	(1,164)		—
Proceeds from exercise of stock options	3,750		2,573
Tax payment upon settlement of stock awards	(8,644)		(4,598)
Payment of common stock dividends	(48,799)		—
Net cash used in financing activities	(258,371)		(263,793)
Effect of exchange rate changes on cash and cash equivalents, and restricted cash	(2,343)		1,940
Net decrease in cash and cash equivalents, and restricted cash	(100,893)		(102,151)
Cash, cash equivalents, and restricted cash, beginning of period	168,770		320,913
Cash, cash equivalents, and restricted cash, end of period	$	67,877	$	218,762
Supplemental cash flow information:
Interest paid, net of amounts capitalized	$	72,514	$	45,236
Income taxes paid, net	$	2,852	$	1,332
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment received but not paid	$	5,051	$	4,282
Dividends declared but not paid	$	1,087	$	—
Capitalized stock-based compensation	$	5,259	$	3,326

See notes to unaudited condensed consolidated financial statements.

6

Iridium Communications Inc.

Notes to Condensed Consolidated Financial Statements

1. Basis of Presentation and Principles of Consolidation

Iridium Communications Inc. (the “Company”) prepared its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company’s operations are primarily conducted through, and its operating assets are owned by, its principal operating subsidiary, Iridium Satellite LLC, Iridium Satellite LLC’s immediate parent, Iridium Holdings LLC, and their respective subsidiaries. The accompanying condensed consolidated financial statements include the accounts of (i) the Company, (ii) its wholly owned subsidiaries, and (iii) all less than wholly owned subsidiaries that the Company controls. All material intercompany transactions and balances have been eliminated.

In the opinion of management, the condensed consolidated financial statements reflect all normal recurring adjustments that the Company considers necessary for the fair presentation of its results of operations and cash flows for the interim periods covered, and of the financial position of the Company at the date of the interim condensed consolidated balance sheet. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to instructions, rules and regulations prescribed by the U.S. Securities and Exchange Commission (“SEC”). These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2022, as filed with the SEC on February 16, 2023.

2. Significant Accounting Policies

Fair Value Measurements

The Company evaluates assets and liabilities subject to fair value measurements on a recurring and non-recurring basis to determine the appropriate level to classify them for each reporting period. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value.

The fair value hierarchy consists of the following tiers:

•Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

•Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

•Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The fair value estimates are based upon certain market assumptions and information available to the Company. The carrying values of the following financial instruments approximated their fair values as of September 30, 2023 and December 31, 2022: (1) cash and cash equivalents, (2) prepaid expenses and other current assets, (3) accounts receivable, (4) accounts payable, and (5) accrued expenses and other current liabilities. Fair values approximate their carrying values because of their short-term nature. The Level 2 cash equivalents may include money market funds, commercial paper and short-term U.S. agency securities. The Company also classifies its derivative financial instruments as Level 2. The Company did not hold any Level 3 assets as of September 30, 2023 or December 31, 2022. In determining fair value, the Company uses a market approach utilizing valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets.

Leases

For new leases, the Company will determine if an arrangement is or contains a lease at inception. Leases are included as (1) right-of-use (“ROU”) assets within other assets, and (2) ROU liabilities within accrued expenses and other liabilities and are included within other long-term liabilities on the Company’s condensed consolidated balance sheets.

ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Certain leases contain variable contractual obligations as a result of future base rate escalations which are estimated based on observed trends and included within the measurement of present value. The Company’s leases do not provide an implicit rate. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU assets also include any lease payments made and exclude lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

7

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases, such as teleport network facilities, the Company elects the practical expedient to combine lease and non-lease components as a single lease component. Taxes assessed on leases in which the Company is either a lessor or lessee are excluded from contract consideration and variable payments when measuring new lease contracts or remeasuring existing lease contracts.

Inventory

Inventory consists primarily of finished goods and raw materials from third-party manufacturers. The Company outsources manufacturing of subscriber equipment to third-party manufacturers and purchases accessories from third-party suppliers. The Company’s cost of inventory includes an allocation of overhead, including payroll and payroll-related costs of employees directly involved in bringing inventory to its existing condition, and freight. Inventories are valued using the weighted average cost method and are carried at the lower of cost or net realizable value.

The Company has a manufacturing agreement with Benchmark Electronics Inc. (“Benchmark”) to manufacture most of its subscriber equipment. Pursuant to the agreement, the Company may be required to purchase excess materials at cost plus a contractual markup if the materials are not used in production within the periods specified in the agreement. Benchmark will then repurchase such materials from the Company at the same price paid by the Company, as required for the production of the subscriber equipment.

The following table summarizes the Company’s inventory balances:

	September 30, 2023		December 31, 2022
	(In thousands)
Finished goods	$	41,382	$	17,964
Raw materials	30,759		23,014
Inventory valuation reserve	(1,005)		(1,202)
Total	$	71,136	$	39,776

Property and Equipment

The Company assesses its long-lived assets for impairment when indicators of impairment are present. During the quarter ended June 30, 2023, the Company launched five of its remaining six ground spare satellites. Following completion of successful on-orbit testing of the five launched satellites, the Company has no plans to use, develop or launch the remaining ground spare. As the Company believed the construction-in-progress associated with the remaining ground spare satellite would no longer be used, the Company wrote off the full amount remaining in construction-in-progress for that satellite by recording accelerated depreciation expense of $37.5 million in the second quarter of 2023. This reflects the Company’s updated estimate of the useful life from 12.5 years to zero for the remaining ground spare. There were no similar write-offs in 2022.

Commitments

During 2022, the Company entered into agreements with Space Exploration Technology Corp. and Thales Alenia Space France for services in connection with the launch of the Company’s five ground spare satellites referenced above. The contract price under these agreements was approximately $40.0 million in the aggregate. As of September 30, 2023, the Company had made all payments related to these services, which costs were capitalized as construction in progress within property and equipment, net in the accompanying condensed consolidated balance sheets.

Derivative Financial Instruments

The Company uses derivatives to manage its exposure to fluctuating interest rate risk on variable rate debt. Its derivatives are measured at fair value and are recorded on the condensed consolidated balance sheets within other current liabilities and other assets. When the Company’s derivatives are designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in accumulated other comprehensive income within the Company’s condensed consolidated balance sheets and subsequently recognized in earnings when the hedged items impact earnings. Any ineffective portion of a derivative’s change in fair value will be recognized in earnings in the same period in which the hedged interest payments affect earnings. Within the condensed consolidated statements of operations and comprehensive income, the gains and losses related to cash flow hedges are recognized within interest income (expense), net, as this is the same financial statement line item used for any gains or losses associated with the hedged items. Cash flows from hedging activities are included in operating activities within the Company’s condensed consolidated statements of cash flows, which is the same category as the item being hedged. See Note 6 for further information.

8

3. Cash and Cash Equivalents

Cash and Cash Equivalents

The following table presents the Company’s cash and cash equivalents balances:

	September 30, 2023		December 31, 2022		Recurring Fair Value Measurement
	(In thousands)
Cash and cash equivalents:
Cash	$	15,676	$	16,247
Money market funds	52,201		152,523		Level 2
Total cash and cash equivalents	$	67,877	$	168,770

4. Leases

Lessor Arrangements

Operating leases in which the Company is a lessor consist primarily of hosting agreements with Aireon LLC (“Aireon”) (see Note 12) and L3Harris Technologies, Inc. (“L3Harris”) for space on the Company’s satellites. These agreements provide for a fee that will be recognized over the life of the satellites, currently estimated to be approximately 12.5 years from their respective in-service dates. Lease income related to these agreements was $5.4 million for each of the three months ended September 30, 2023 and 2022, and $16.1 million for each of the nine months ended September 30, 2023 and 2022. Lease income is recorded as hosted payload and other data service revenue within service revenue on the Company’s condensed consolidated statements of operations and comprehensive income.

Aireon has made payments to the Company pursuant to its hosting agreement, and the Company expects Aireon will continue to do so. L3Harris has prepaid all amounts owed to the Company pursuant to its hosting arrangement. The following table presents future income with respect to the Company’s operating leases in which it is the lessor existing at September 30, 2023, exclusive of the $16.1 million recognized during the nine months ended September 30, 2023, by year and in the aggregate:

Year Ending December 31,	Amount
	(In thousands)
2023	$	5,361
2024	21,445
2025	21,445
2026	21,445
2027	21,445
Thereafter	56,017
Total lease income	$	147,158

5. Debt

Term Loan and Revolving Facility

On September 20, 2023, pursuant to an amended and restated credit agreement (the “Credit Agreement”), the Company refinanced its previously existing term loan resulting in total borrowing of $1,500.0 million (as so amended and restated, the “Term Loan”) and an accompanying $100.0 million revolving loan (the “Revolving Facility”). The Term Loan was issued at a price equal to 99.75% of its face value and bears interest at an annual rate equal to the Secured Overnight Financing Rate (“SOFR”) plus 2.5%, with a 0.75% SOFR floor. The maturity date of the Term Loan is in September 2030. Interest is paid monthly on the last business day of the month. The Revolving Facility bears interest at the same rate (but without a SOFR floor) if and as drawn, with no original issue discount, a commitment fee of 0.5% per year on the undrawn amount, which will be reduced to 0.375% if the Company has a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of less than 3.5 to 1, and a maturity date in September 2028. Principal payments, payable quarterly, beginning with the quarter ending March 31, 2024, will be $15.0 million per annum (equal to one percent of the full principal amount of the Term Loan), with the remaining principal due upon maturity.

The Company paid $3.8 million of original issuance costs to refinance the Term Loan in September 2023, which were deferred and will be amortized over the extended term. Lenders making up approximately $16.8 million of the Term Loan did not participate in the refinancing. Those portions of the Term Loan were replaced by new or existing lenders. This resulted in an immaterial loss on extinguishment of debt during the three months ended September 30, 2023, as the Company wrote off the unamortized debt issuance costs related to the lenders who were fully repaid in exchange of principal. The Company deferred an additional $1.2 million of third-party fees associated with the refinancing of the Term Loan and the Revolving Facility.

9

As of September 30, 2023 and December 31, 2022, the Company reported an aggregate of $1,500.0 million and $1,504.6 million in borrowings under the Term Loan, respectively. These amounts do not include $18.1 million and $17.4 million of net unamortized deferred financing costs as of September 30, 2023 and December 31, 2022, respectively. The net principal balance in borrowings in the accompanying consolidated balance sheets as of September 30, 2023 and December 31, 2022 amounted to $1,481.9 million and $1,487.2 million, respectively. As of September 30, 2023 and December 31, 2022, based upon recent trading prices (Level 2 - market approach), the fair value of the Company’s borrowings under the Term Loan was $1,499.1 million and $1,494.3 million, respectively.

The Credit Agreement restricts the Company’s ability to incur liens, engage in mergers or asset sales, pay dividends, repay subordinated indebtedness, incur indebtedness, make investments and loans, and engage in other transactions as specified in the Credit Agreement. The Credit Agreement provides for specified exceptions, including baskets measured as a percentage of trailing twelve months of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and unlimited exceptions in the case of incurring indebtedness and liens and making investments, dividend payments, and payments of subordinated indebtedness, based on achievement and maintenance of specified leverage ratios. The Credit Agreement also contains an annual mandatory prepayment sweep mechanism with respect to a portion of the Company’s excess cash flow (as defined in the Credit Agreement) in the event the Company’s net leverage ratio rises above 3.5 to 1. As of December 31, 2022, the Company was below the specified leverage ratio, and a mandatory prepayment sweep was therefore, not required. The Credit Agreement permits repayment, prepayment, and repricing transactions, subject, in the case of the Term Loan, to a 1% penalty in the event the Term Loan is prepaid or repriced within the first six months from the refinancing date.

The Credit Agreement contains no financial maintenance covenants with respect to the Term Loan. With respect to the Revolving Facility, the Credit Agreement requires the Company to maintain a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of no greater than 6.25 to 1 if more than 35% of the Revolving Facility has been drawn. The Credit Agreement contains other customary representations and warranties, affirmative and negative covenants, and events of default. The Company was in compliance with all covenants as of September 30, 2023.

Interest on Debt

Total interest incurred includes amortization of deferred financing fees and capitalized interest. The Company incurred third-party financing costs of $15.9 million in connection with the refinancing of the Term Loan in September 2023, of which $14.7 million was expensed. The amounts expensed are included within interest expense on the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2023. There were no such costs incurred during the three and nine months ended September 30, 2022. The following table presents the interest and amortization of deferred financing fees related to the Term Loan:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Total interest incurred	$	37,277	$	19,844	$	80,584	$	51,076
Amortization of deferred financing fees	$	1,087	$	1,211	$	3,327	$	3,593
Capitalized interest	$	1,121	$	725	$	3,847	$	1,589

As of September 30, 2023 and December 31, 2022, accrued interest on the Term Loan was $0.7 million and $0.3 million, respectively.

6. Derivative Financial Instruments

The Company is exposed to interest rate fluctuations related to its Term Loan. The Company has reduced its exposure to fluctuations in the cash flows associated with changes in the variable interest rate by entering into offsetting positions through the use of hedging instruments. This will reduce the negative impact of increases in the variable rate over the term of the derivative contracts. These contracts are not used for trading or other speculative purposes. Historically, the Company has not incurred, and does not expect to incur in the future, any losses as a result of counterparty default.

Interest Rate Cap

In July 2021, the Company entered into an interest rate cap contract (the “Cap”), which had an effective date of December 2021. The Cap manages the Company’s exposure to interest rate movements on a portion of the Term Loan through November 2026. In December 2022, the Company modified the Cap to replace the LIBOR base rate with SOFR, consistent with a prior amendment to the Term Loan. With the change from LIBOR to SOFR, the Company received a credit risk adjustment of 0.064%. The modified Cap now provides the Company with the right to receive payment from the counterparty if one-month SOFR exceeds 1.436%. Prior to the modification the Company received payment under the terms of the Cap if one-month LIBOR exceeded 1.5%. The Company pays a fixed monthly premium based on an annual rate of 0.31% for the Cap. The Cap carried a notional amount of $1.0 billion as of September 30, 2023 and December 31, 2022.

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The Cap, which was not affected by the refinancing of the Term Loan in September 2023, is designed to mirror the terms of the Term Loan and to offset the cash flows being hedged. The Company designated the Cap as a cash flow hedge of the variability of the SOFR-based interest payments on the Term Loan. The effective portion of the Cap’s change in fair value is recorded in accumulated other comprehensive income. Any ineffective portion of the Cap’s change in fair value is recorded in current earnings as interest expense.

Hedge effectiveness of the current interest rate cap contract is based on a long-haul hypothetical derivative methodology and includes all changes in value. The Company formally assesses, both at the hedge’s inception and on an ongoing quarterly basis, whether the designated derivative instruments are highly effective in offsetting changes in the cash flows of the hedged items. When the hedging instrument is sold, expires, is terminated, is exercised, no longer qualifies for hedge accounting, is de-designated, or is no longer probable, hedge accounting is discontinued prospectively.

Fair Value of Derivative Instruments

As of September 30, 2023 and December 31, 2022, the Company had an asset balance of $93.3 million and $92.3 million, respectively, for the fair value of the Cap and a liability balance of $9.0 million and $11.0 million, respectively, for the fair value of the Cap premium. Both the Cap and the Cap premium are recorded net within other assets.

During each of the three and nine months ended September 30, 2023 and September 30, 2022, the Company collectively incurred $0.8 million and $2.5 million, respectively, in interest expense for the Cap premium. Interest expense was reduced by $9.6 million for the three months ended September 30, 2023 and $26.3 million for the nine months ended September 30, 2023, and by $1.8 million for both the three and nine months ended September 30, 2022, for payments received related to the Cap.

Gains and losses resulting from fair value adjustments to the Cap are recorded within accumulated other comprehensive income within the Company’s condensed consolidated balance sheets and reclassified to interest expense on the dates that interest payments become due. Cash flows related to the derivative contracts are included in cash flows from operating activities on the condensed consolidated statements of cash flows. Over the next 12 months, the Company expects any gains or losses for cash flow hedges amortized from accumulated other comprehensive income into earnings to have an immaterial impact on the Company’s consolidated financial statements.

The following table presents the amount of unrealized gain or loss and related tax impact associated with the derivative instruments that the Company recorded in its condensed consolidated statements of operations and comprehensive income:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Unrealized gain, net of tax	$	2,011	$	25,537	$	2,416	$	63,971
Tax expense	$	621	$	7,740	$	761	$	19,392

7. Stock-Based Compensation

In May 2023, the Company’s stockholders approved the amendment and restatement of the Company’s 2015 Equity Incentive Plan (as so amended and restated, the “Amended 2015 Plan”). As of September 30, 2023, the remaining aggregate number of shares available for future grants under the Amended 2015 Plan was 13,030,297. The Amended 2015 Plan provides for the grant of stock-based awards, including nonqualified stock options, incentive stock options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights and other equity securities to employees, consultants and non-employee directors of the Company and its affiliated entities. The number of shares of common stock available for issuance under the Amended 2015 Plan is reduced by (i) one share for each share of common stock issued pursuant to an appreciation award, such as a stock option or stock appreciation right with an exercise or strike price of at least 100% of the fair market value of the underlying common stock on the date of grant, and (ii) 1.8 shares for each share of common stock issued pursuant to any stock award that is not an appreciation award, also 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 the Company’s stockholders. The Company accounts for stock-based compensation at fair value.

Restricted Stock Units

The RSUs granted to employees for service generally vest over four years, with 25% vesting on the first anniversary of the grant date and the remainder vesting ratably on a quarterly basis thereafter, subject to continued employment. Some RSUs granted to employees for performance vest upon the completion of defined performance goals, subject to continued employment. The RSUs granted to non-employee members of the Board of Directors generally vest in full on the first anniversary of the grant date. The RSUs granted to non-employee consultants generally vest 50% on the first anniversary of the grant date, with the remaining 50% vesting quarterly thereafter through the second anniversary of the grant date. The Company’s RSUs are classified as equity awards because the RSUs will be settled in the Company’s common stock upon

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vesting. The fair value of the RSUs is determined at the grant date based on the closing price of the Company’s common stock on the date of grant. The related compensation expense is recognized over the service period, or shorter periods based on the retirement eligibility of certain grantees, and is based on the grant date fair value of the Company’s common stock and the number of shares expected to vest. The fair value of the awards is not remeasured at the end of each reporting period. The RSUs do not carry voting rights until they are vested, but certain unvested RSUs are entitled to accrue dividends, and shares are issued upon settlement in accordance with the terms of the award.

RSU Summary

The following tables summarize the Company’s RSU activity:

	Shares Underlying RSUs	Weighted- Average Grant Date Fair Value Per RSU
	(In thousands)
Outstanding at December 31, 2022	2,970	$	31.60
Granted	1,102	59.20
Forfeited	(43)	44.15
Released	(999)	37.37
Outstanding at September 30, 2023	3,030	$	39.52
Vested and unreleased at September 30, 2023 (1)	793

	Shares Underlying RSUs	Weighted- Average Grant Date Fair Value Per RSU
	(In thousands)
Outstanding at December 31, 2021	2,550	$	25.80
Granted	1,491	40.02
Forfeited	(127)	31.85
Released	(766)	32.73
Outstanding at September 30, 2022	3,148	$	30.60
Vested and unreleased at September 30, 2022 (1)	885

(1)     These RSUs were granted to the Company’s Board of Directors as a part of their compensation for board and committee service, as detailed below, and had vested but had not yet settled, meaning that the underlying shares of common stock had not been issued and released pursuant to the terms of the applicable compensation program.

Service-Based RSUs

The majority of the annual compensation the Company provides to non-employee members of its Board of Directors is paid in the form of RSUs. In addition, some members of the Company’s Board of Directors may elect to receive the remainder of their annual compensation, or a portion thereof, in the form of RSUs. An aggregate amount of approximately 53,000 and 57,000 service-based RSUs were granted to the non-employee members of the Company’s Board of Directors as a result of these payments and elections during the nine months ended September 30, 2023 and 2022, respectively, with an estimated grant date fair value of $2.8 million and $2.2 million, respectively.

During the nine months ended September 30, 2023 and 2022, the Company granted approximately 667,000 and 1,012,000 service-based RSUs, respectively, to its employees, with an estimated aggregate grant date fair value of $39.9 million and $41.0 million, respectively.

Performance-Based RSUs

In March 2023 and 2022, the Company granted approximately 193,000 and 248,000 annual incentive, performance-based RSUs, respectively, to the Company’s executives and employees (the “Bonus RSUs”), with an estimated grant date fair value of $11.9 million and $9.7 million, respectively. Vesting of the Bonus RSUs is dependent upon the Company’s achievement of defined performance goals over the respective fiscal year. The Company records stock-based compensation expense related to performance-based RSUs when it is considered probable that the performance conditions will be met. Management believes it is probable that substantially all of the 2023 Bonus RSUs will vest. The level of achievement, if any, of performance goals will be determined by the compensation committee of the Company’s Board of Directors and, if such goals are achieved, the 2023

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Bonus RSUs will vest, subject to continued employment, in March 2024. Substantially all of the 2022 Bonus RSUs vested in March 2023 upon the determination of the level of achievement of the performance goals.

Additionally, in March 2023 and 2022, the Company granted approximately 134,000 and 167,000 long-term, performance-based RSUs, respectively, to the Company’s executives (the “Executive RSUs”). The estimated aggregate grant date fair value of the Executive RSUs for the 2023 and 2022 grants was $8.2 million and $6.5 million, respectively. Vesting of the Executive RSUs is dependent upon the Company’s achievement of defined performance goals over a two-year period. The vesting of Executive RSUs will ultimately range from 0% to 150% of the number of shares underlying the Executive RSUs granted based on the level of achievement of the performance goals. If the Company achieves the performance goals, 50% of the number of Executive RSUs earned based on performance will vest on the second anniversary of the grant date, and the remaining 50% will vest on the third anniversary of the grant date, in each case subject to the executive’s continued service as of the vesting date, which may be accelerated based on the retirement eligibility of certain grantees. During March 2023, the Company awarded approximately 55,000 additional shares related to performance-based RSUs granted to the Company’s executives in 2021 for over-achievement of performance targets for the performance period ended December 31, 2022. During March 2022, approximately 50,000 shares underlying performance-based RSUs granted to the Company’s executives in 2020 were forfeited due to performance targets not being fully achieved through the performance period ended December 31, 2021.

Stock Option Awards

The stock option awards granted to employees generally (i) have a term of ten years, (ii) vest over four years with 25% vesting after the first year of service and the remainder vesting ratably on a quarterly basis thereafter, (iii) are contingent upon employment on the vesting date, and (iv) have an exercise price equal to the fair market value of the underlying shares at the date of grant. The fair value of stock options was determined at the grant date using the Black-Scholes option pricing model. The Company historically granted stock options to newly hired and promoted employees but now exclusively utilizes RSUs. The Company did not grant any stock options during the three and nine months ended September 30, 2023 or 2022.

Option Summary

A summary of the activity of the Company’s stock options is as follows:

	Shares	Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
	(In thousands, except years and per share data)
Options outstanding at December 31, 2022	1,185	$	9.97	2.64	$	49,094
Cancelled or expired	(4)	10.25
Exercised	(486)	7.72			$	26,420
Options outstanding and exercisable at September 30, 2023	695	$	11.54	2.66	$	23,616

	Shares	Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
	(In thousands, except years and per share data)
Options outstanding at December 31, 2021	1,681	$	9.35	3.28	$	53,698
Exercised	(314)	7.78			$	11,244
Forfeited	(2)	14.24
Options outstanding at September 30, 2022	1,365	$	9.70	2.81	$	47,312
Options exercisable at September 30, 2022	1,345	$	9.52	2.76	$	46,855
Options exercisable and expected to vest at September 30, 2022	1,365	$	9.70	2.81	$	47,310

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8. Equity Transactions

Preferred Stock

The Company is authorized to issue 2.0 million shares of preferred stock with a par value of $0.0001 per share. The Company previously issued 1.5 million shares of preferred stock, all of which have converted to common stock. The remaining 0.5 million authorized shares of preferred stock remain undesignated and unissued as of September 30, 2023 and December 31, 2022. As of September 30, 2023 and December 31, 2022, there were no outstanding shares of preferred stock.

Dividends

Stockholders are entitled to receive, when and if declared by the Company’s Board of Directors from time to time, dividends and other distributions in cash, stock or property from the Company’s assets or funds legally and contractually available for such purposes. In each of December 2022, May 2023, and September 2023 the Company’s Board of Directors approved a dividend of $0.13 per share of common stock. The dividends, which were paid on March 30, 2023, June 30, 2023, and September 29, 2023 to stockholders of record as of March 15, 2023, June 15, 2023, and September 15, 2023, respectively, resulted in total payments of $48.8 million for the nine months ended September 30, 2023. The Company’s liability related to dividends on common shares underlying unvested RSUs was $1.1 million as of September 30, 2023.

Share Repurchases and Retirement

To date, the Board of Directors has authorized the repurchase of up to $1,000.0 million of the Company’s common stock through December 31, 2025. This timeframe can be extended or shortened by the Board of Directors. Repurchases may be made from time to time on the open market at prevailing prices or in negotiated transactions off the market. The Company records share repurchases at cost, which includes broker commissions and related excise taxes. All shares are immediately retired upon repurchase in accordance with the board-approved policy. When treasury shares are retired, the Company’s policy is to allocate the excess of the repurchase price over the par value of shares acquired first, to additional paid-in capital, and then to retained earnings/accumulated deficit. The portion to be allocated to additional paid-in capital is calculated by applying a percentage, determined by dividing the number of shares to be retired by the number of shares outstanding, to the balance of additional paid-in capital as of the date of retirement.

The Company repurchased and subsequently retired 1.4 million and 3.4 million shares of its common stock during the three and nine months ended September 30, 2023, respectively, for a total purchase price of $73.8 million and $193.0 million, respectively, exclusive of $0.7 million and $1.2 million of related taxes incurred in for the three and nine months ended September 2023, respectively. In addition, in September 2023, the Company purchased 22,000 shares for $0.9 million, which were settled and retired in October 2023. As such, these shares are recorded as treasury stock as of September 30, 2023. The Company repurchased and subsequently retired 1.8 million and 6.5 million shares of its common stock during the three and nine months ended September 30, 2022, respectively, for a total purchase price of $76.5 million and $245.7 million, respectively. As of September 30, 2023, $385.7 million remained available and authorized for repurchase under this program through December 31, 2025.

9. Revenue

The following table summarizes the Company’s services revenue:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Commercial services revenue:
Voice and data	$	56,188	$	50,256	$	163,593	$	143,621
IoT data	38,460		33,786		104,971		92,857
Broadband	15,782		13,589		43,258		37,200
Hosted payload and other data	15,020		14,846		45,119		44,769
Total commercial services revenue	125,450		112,477		356,941		318,447
Government services revenue	26,500		26,500		79,500		79,500
Total services revenue	$	151,950	$	138,977	$	436,441	$	397,947

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The following table summarizes the Company’s engineering and support services revenue:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Commercial	$	1,881	$	1,783	$	9,304	$	4,280
Government	23,349		15,341		60,764		29,509
Total engineering and support services revenue	$	25,230	$	17,124	$	70,068	$	33,789

Approximately 36% and 25% of the Company’s accounts receivable balance at September 30, 2023 and December 31, 2022, respectively, was due from prime contracts or subcontracts with agencies of the U.S. government.

The Company’s contracts with customers generally do not contain performance obligations with terms in excess of one year. As such, the Company does not disclose details related to the value of performance obligations that are unsatisfied as of the end of the reporting period. The total value of any performance obligations that extend beyond one year is immaterial to the financial statements.

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the condensed consolidated balance sheets. The Company bills amounts under its agreed-upon contractual terms at periodic intervals (for services), upon shipment (for equipment), or upon achievement of contractual milestones or as work progresses (for engineering and support services). Billing may occur subsequent to revenue recognition, resulting in unbilled accounts receivable (contract assets). The Company may also receive payments from customers before revenue is recognized, resulting in deferred revenue (contract liabilities). The Company recognized revenue that was previously recorded as deferred revenue in the amounts of $3.3 million and $5.5 million for the three months ended September 30, 2023 and 2022, respectively, and $25.1 million and $21.1 million for the nine months ended September 30, 2023 and 2022, respectively.

The Company has also recorded costs of obtaining contracts expected to be recovered in prepaid expenses and other current assets (contract assets or commissions), that are not separately disclosed on the condensed consolidated balance sheets. The commissions are recognized over the estimated usage period. The following table presents contract assets not separately disclosed:

	September 30, 2023		December 31, 2022
	(In thousands)
Contract Assets:
Commissions	$	883	$	1,258
Other contract costs	$	2,029	$	2,255

10. Income Taxes

Loss before income taxes was $6.2 million and $35.0 million for the three and nine months ended September 30, 2023, respectively, while the income tax benefit was $6.0 million and $16.7 million for the three and nine months ended September 30, 2023, respectively. The effective tax rate was 97.5% and 47.7% for the three and nine months ended September 30, 2023, respectively, which differed from the federal statutory rate of 21% primarily due to a discrete tax benefit associated with stock compensation and U.S. tax credits, which were partially offset by tax expense associated with nondeductible executive compensation.

Income before income taxes was $0.1 million and $10.5 million for the three and nine months ended September 30, 2022, respectively, while the income tax benefit was $2.1 million for the three months ended September 30, 2022, and the income tax expense was $1.0 million for the nine months ended September 30, 2022. The effective tax rate for the three and nine months ended September 30, 2022, differed from the federal statutory rate of 21% primarily due to U.S. tax credits, a discrete tax benefit associated with stock compensation and a discrete tax benefit from the U.S. provision-to-return adjustment in the current period, partially offset by tax expense associated with nondeductible executive compensation and non-creditable foreign taxes.

11. Net Income (Loss) Per Share

The Company calculates basic net income (loss) per share by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. In periods of net income, diluted net income per share takes into account the effect of potential dilutive common shares when the effect is dilutive. Potentially dilutive common shares include (i) shares of common stock issuable upon exercise of outstanding stock options and (ii) contingently issuable RSUs that are convertible into shares of common stock upon achievement of certain service and performance requirements. The effect of potentially dilutive common shares is computed using the treasury stock method.

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The following table summarizes the computations of basic and diluted net income (loss) per share:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands, except per share data)
Numerator:
Net income (loss) - basic and diluted	$	(1,642)	$	2,149	(22,608)		9,530
Denominator:
Weighted average common shares — basic	125,176		127,697		126,100		128,800
Dilutive effect of stock options	—		921		—		974
Dilutive effect of RSUs	—		457		—		510
Weighted average common shares — diluted	125,176		129,075		126,100		130,284
Net income (loss) per share - basic and diluted	$	(0.01)	$	0.02	$	(0.18)	$	0.07

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

	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
	(In thousands)		(In thousands)
Performance-based RSUs	82	—	168	—
Service-based RSUs	500	—	655	—
Stock options	443	—	543	—

12. Related Party Transactions

Aireon LLC and Aireon Holdings LLC

The Company’s satellite constellation hosts the Aireon® system, which provides a global air traffic surveillance service through a series of automatic dependent surveillance-broadcast (“ADS-B”) receivers. The Company formed Aireon in 2011, with subsequent investments from the air navigation service providers (“ANSPs”) of Canada, Italy, Denmark, Ireland and the United Kingdom, to develop and market this service. The Company and other Aireon investors hold their interests in Aireon Holdings LLC (“Aireon Holdings”) through an amended and restated LLC agreement (the “Aireon Holdings LLC Agreement”). Aireon Holdings holds 100% of the membership interests in Aireon, which is the operating entity.

In June 2022, the Company entered into a subscription agreement with Aireon Holdings and invested $50.0 million in exchange for an approximate 6% preferred membership interest. The Company’s investment in Aireon is accounted for as an equity method investment. The carrying value of the Company’s investment in Aireon was $45.7 million and $48.8 million at September 30, 2023 and December 31, 2022, respectively. The investments by the Company prior to June 2022 had previously been written down to a carrying value of zero.

At each of September 30, 2023 and December 31, 2022, the Company’s fully diluted ownership stake in Aireon Holdings was approximately 39.5%, which is subject to partial future redemption under provisions contained in the Aireon Holdings LLC Agreement.

Aireon has contracted to pay the Company a fee to host the ADS-B receivers on its constellation, as well as fees for power and data services in connection with the delivery of the air traffic surveillance data. Pursuant to an agreement with Aireon (the “Hosting Agreement”), Aireon will pay the Company fees of $200.0 million to host the ADS-B receivers, of which $86.5 million had been paid as of September 30, 2023. These fees will be recognized over the remaining useful life of the satellites, or approximately $16.0 million per year. Additionally, Aireon pays power fees of up to approximately $3.7 million per year. Aireon also pays data services fees of $19.8 million per year for the delivery of the air traffic surveillance data under a data transmission services agreement. Pursuant to ASU 2016-02, the Company considers the Hosting Agreement an operating lease. The Company recognized $4.0 million of hosting fee revenue for each of the three months ended September 30, 2023 and 2022 and $12.0 million for each of the nine months ended September 30, 2023 and 2022. Aireon receivables under the Hosting Agreement totaled $3.7 million as of September 30, 2023. There were no such receivables as of December 31, 2022. The Company recorded power and data service revenue from Aireon of $5.9 million for each of the three months ended September 30, 2023 and 2022 and $17.6 million for each of the nine months ended September 30, 2023 and 2022.

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Under two services agreements, the Company also provides Aireon with administrative services and support services, the fees for which are paid monthly. Aireon receivables due to the Company under these two agreements totaled $2.3 million and $2.2 million as of September 30, 2023 and December 31, 2022, respectively.

The Company and the other Aireon investors have agreed to participate pro-rata, based on their fully diluted ownership stakes, in funding an investor bridge loan to Aireon. The Company’s maximum funding commitment for the bridge loan is $10.7 million. No bridge loan amounts were outstanding as of September 30, 2023 or December 31, 2022.

Satelles

In the first quarter of 2023, the Company entered into a stock purchase agreement with Satelles, Inc. (“Satelles”) and invested $10.0 million, in addition to its previous equity investment in Satelles. The Company’s fully diluted ownership stake in Satelles was approximately 19.5% as of September 30, 2023, and the investment in Satelles is now accounted for as an equity method investment. The carrying value of the Company’s equity investment in Satelles was approximately $22.3 million as of September 30, 2023.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

You should read the following discussion along with our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed on February 16, 2023 with the Securities and Exchange Commission, or the SEC, as well as our condensed consolidated financial statements included in this Form 10-Q.

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Such forward-looking statements include those that express plans, anticipation, intent, contingencies, goals, targets or future development or otherwise are not statements of historical fact. Without limiting the foregoing, the words “believe,” “anticipate,” “plan,” “expect,” “intend” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on our current expectations and projections about future events, and they are subject to risks and uncertainties, known and unknown, that could cause actual results and developments to differ materially from those expressed or implied in such statements. The important factors described under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed on February 16, 2023, could cause actual results to differ materially from those indicated by forward-looking statements made herein. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview of Our Business

We are engaged primarily in providing mobile voice and data communications services using a constellation of orbiting satellites. We are the only commercial provider of communications services offering true global coverage, connecting people, organizations and assets to and from anywhere, in real time. Our low-earth orbit, L-band satellite network provides reliable, weather-resilient communications services to regions of the world where terrestrial wireless or wireline networks do not exist or are limited, including remote land areas, open ocean, airways, the polar regions and regions where the telecommunications infrastructure has been affected by political conflicts or natural disasters.

We provide voice and data communications services to businesses, the U.S. and foreign governments, non-governmental organizations and consumers via our satellite network, which has an architecture of 66 operational satellites with in-orbit spares and related ground infrastructure. We utilize an interlinked mesh architecture to route traffic across the satellite constellation using radio frequency crosslinks between satellites. This unique architecture minimizes the need for ground facilities to support the constellation, which facilitates the global reach of our services and allows us to offer services in countries and regions where we have no physical presence. In May 2023, we launched five of our remaining six ground spare satellites, bringing our total number of in-orbit spares to 14.

We sell our products and services to commercial end-users through a wholesale distribution network, encompassing approximately 100 service providers, 295 value-added resellers, or VARs, and 90 value-added manufacturers, or VAMs, who either sell directly to the end user or indirectly through other service providers, VARs or dealers. These distributors often integrate our products and services with other complementary hardware and software and have developed a broad suite of applications using our products and services targeting specific lines of business.

In January 2023, we announced that we entered into an agreement with Qualcomm Technologies, Inc. to enable satellite messaging and emergency services in smartphones powered by Qualcomm’s Snapdragon® Mobile Platforms. This agreement is aimed to support our satellite services in a variety of smartphone brands and has the potential to expand our services to other consumer devices in the future.

As of September 30, 2023, we had approximately 2,236,000 billable subscribers worldwide, representing an increase of 13% from approximately 1,973,000 billable subscribers as of September 30, 2022. We have a diverse customer base, with end users in the following lines of business: land mobile, Internet of Things, or IoT, maritime, aviation and government.

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Material Trends and Uncertainties

Our industry and customer base have historically grown as a result of:

•demand for remote and reliable mobile communications services;

•a growing number of new products and services and related applications;

•a broad wholesale distribution network with access to diverse and geographically dispersed niche markets;

•increased demand for communications services by disaster and relief agencies, and emergency first responders;

•improved data transmission speeds for mobile satellite service offerings;

•regulatory mandates requiring the use of mobile satellite services;

•a general reduction in prices of mobile satellite services and subscriber equipment; and

•geographic market expansion through the ability to offer our services in additional countries.

Nonetheless, we face a number of challenges and uncertainties in operating our business, including:

•our ability to maintain the health, capacity, control and level of service of our satellites;

•our ability to develop and launch new and innovative products and services;

•changes in general economic, business and industry conditions, including the effects of currency exchange rates;

•our reliance on a single primary commercial gateway and a primary satellite network operations center;

•competition from other mobile satellite service providers and, to a lesser extent, from the expansion of terrestrial-based cellular phone systems and related pricing pressures;

•market acceptance of our products;

•regulatory requirements in existing and new geographic markets;

•challenges associated with global operations, including as a result of conflicts in or affecting markets in which we operate;

•rapid and significant technological changes in the telecommunications industry;

•our ability to generate sufficient internal cash flows to repay our debt;

•reliance on our wholesale distribution network to market and sell our products, services and applications effectively;

•reliance on a global supply chain, including single-source suppliers for the manufacture of most of our subscriber equipment and for some of the components required in the manufacture of our end-user subscriber equipment and our ability to purchase component parts that are periodically subject to shortages resulting from surges in demand, natural disasters or other events; and

•reliance on a few significant customers, particularly agencies of the U.S. government, for a substantial portion of our revenue, as a result of which the loss or decline in business with any of these customers may negatively impact our revenue and collectability of related accounts receivable.

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Comparison of Our Results of Operations for the Three Months Ended September 30, 2023 and 2022

	Three Months Ended September 30,								Change
	2023		% of Total Revenue		2022		% of Total Revenue
($ in thousands)									Dollars		Percent
Revenue:
Services	$	151,950	77	%	$	138,977	76	%	$	12,973	9	%
Subscriber equipment	20,422		10	%	27,959		15	%	(7,537)		(27)	%
Engineering and support services	25,230		13	%	17,124		9	%	8,106		47	%
Total revenue	197,602		100	%	184,060		100	%	13,542		7	%
Operating expenses:
Cost of services (exclusive of depreciation
and amortization)	41,394		21	%	34,378		19	%	7,016		20	%
Cost of subscriber equipment	12,823		6	%	18,406		10	%	(5,583)		(30)	%
Research and development	5,037		3	%	4,865		3	%	172		4	%
Selling, general and administrative	33,368		17	%	32,140		16	%	1,228		4	%
Depreciation and amortization	76,825		39	%	76,397		42	%	428		1	%
Total operating expenses	169,447		86	%	166,186		90	%	3,261		2	%
Operating income	28,155		14	%	17,874		10	%	10,281		58	%
Other expense:
Interest expense, net	(34,660)		(17)	%	(17,632)		(10)	%	(17,028)		97	%
Other income (expense), net	343		—	%	(146)		—	%	489		(335)	%
Total other expense, net	(34,317)		(17)	%	(17,778)		(10)	%	(16,539)		93	%
Income (loss) before income taxes	(6,162)		(3)	%	96		—	%	(6,258)		(6,519)	%
Income tax benefit	6,009		3	%	2,053		1	%	3,956		193	%
Loss on equity method investments	(1,489)		(1)	%	—		—	%	(1,489)		100	%
Net income (loss)	$	(1,642)	(1)	%	$	2,149	1	%	$	(3,791)	(176)	%

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Revenue

Commercial Service Revenue 

	Three Months Ended September 30,
	2023					2022					Change
	Revenue		Billable Subscribers (1)	ARPU (2)		Revenue		Billable Subscribers (1)	ARPU (2)		Revenue		Billable Subscribers	ARPU
	(Revenue in millions and subscribers in thousands)
Commercial services:
Voice and data	$	56.2	410	$	46	$	50.3	401	$	42	$	5.9	9	$	4
IoT data	38.5		1,667	7.90		33.8		1,412	8.24		4.7		255	(0.34)
Broadband (3)	15.8		16.5	322		13.6		14.7	315		2.2		1.8	7
Hosted payload and other data	15.0		N/A			14.8		N/A			0.2		N/A
Total commercial services	$	125.5	2,094			$	112.5	1,828			$	13.0	266

(1)Billable subscriber numbers shown are at the end of the respective period.

(2)Average monthly revenue per unit, or ARPU, is calculated by dividing revenue in the respective period by the average of the number of billable subscribers at the beginning of the period and the number of billable subscribers at the end of the period and then dividing the result by the number of months in the period. Billable subscriber and ARPU data is not applicable for hosted payload and other data service revenue items.

(3)Commercial broadband service consists of Iridium OpenPort® and Iridium Certus® broadband services.

For the three months ended September 30, 2023, total commercial services revenue increased $13.0 million, or 12%, from the prior year period primarily as a result of increases in voice and data, IoT and broadband. These increases were driven primarily by increases in billable subscribers across all commercial service lines and higher ARPU in commercial voice and data. Commercial voice and data revenue increased $5.9 million, or 12%, for the three months ended September 30, 2023, compared to the same period of the prior year, primarily due to an increase in ARPU resulting from certain price increases in access fees and increased volume across postpaid voice and data services. Commercial IoT revenue increased $4.7 million, or 14%, for the three months ended September 30, 2023, compared to the same period of the prior year, driven by an 18% increase in IoT billable subscribers primarily due to continued growth in consumer personal communications devices. The effect on revenue of increased subscribers was partially offset by a 4% reduction in IoT ARPU, primarily due to the shifting mix of subscribers using lower ARPU plans, including personal communications subscribers. Commercial broadband revenue increased $2.2 million, or 16%, for the three months ended September 30, 2023, compared to the prior year period, primarily due to a customer arrangement which resulted in recognition of approximately $1.5 million of revenue in the quarter. The increase was also related to a 12% increase in broadband billable subscribers. Hosted payload and other data service revenue remained relatively flat compared to the prior year period.

Government Service Revenue 

	Three Months Ended September 30,
	2023			2022			Change
	Revenue		Billable Subscribers (1)	Revenue		Billable Subscribers (1)	Revenue		Billable Subscribers
	(Revenue in millions and subscribers in thousands)
Government services	$	26.5	142	$	26.5	145	$	—	(3)

(1)Billable subscriber numbers shown are at the end of the respective period.

We provide airtime and airtime support to U.S. government and other authorized customers pursuant to our Enhanced Mobile Satellite Services contract, or the EMSS Contract. Under the terms of this agreement, which we entered into in September 2019, authorized customers utilize specified Iridium® airtime services provided through the U.S. government’s dedicated gateway. The fee is not based on subscribers or usage, allowing an unlimited number of users access to these services. For the three months ended September 30, 2023, revenue was unchanged from the prior year period, in accordance with the contract.

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Subscriber Equipment Revenue

Subscriber equipment revenue decreased by $7.5 million, or 27%, for the three months ended September 30, 2023, compared to the prior year period, primarily due to a decrease in sales volume of handsets and Short Burst Data® devices, including chipsets. We now expect equipment sales for the full year 2023 to be below the record levels we experienced in 2022 and to continue to moderate toward historical levels.

Engineering and Support Service Revenue

	Three Months Ended September 30,
	2023		2022		Change
	(In millions)
Commercial engineering and support services	$	1.9	$	1.8	$	0.1
Government engineering and support services	23.3		15.3		8.0
Total engineering and support services	$	25.2	$	17.1	$	8.1

Engineering and support service revenue increased by $8.1 million, or 47%, for the three months ended September 30, 2023, compared to the prior year period, primarily due to increased work under certain government contracts, primarily the contract awarded by the Space Development Agency, or the SDA. Based on the SDA contract, we expect engineering and support service revenue, as well as associated expenses, to be higher than prior years for the full year 2023 and throughout the life of the SDA contract.

Operating Expenses

Cost of Services (exclusive of depreciation and amortization)

Cost of services (exclusive of depreciation and amortization) includes the cost of network engineering and operations staff, including contractors, software maintenance, product support services and cost of services for government and commercial engineering and support service revenue.

Cost of services (exclusive of depreciation and amortization) increased by $7.0 million, or 20%, for the three months ended September 30, 2023 from the prior year period, primarily as a result of the increase in work under certain government projects, including the SDA contract as noted above.

Cost of Subscriber Equipment

Cost of subscriber equipment includes the direct costs of equipment sold, which consist of manufacturing costs, allocation of overhead, and warranty costs.

Cost of subscriber equipment decreased by $5.6 million, or 30%, for the three months ended September 30, 2023, compared to the prior year period primarily due to the decrease in volume of device sales, as described above. The percentage decrease in subscriber equipment costs exceeded the percentage decrease in subscriber equipment revenue primarily due to a decrease in inventory component costs and product mix.

Research and Development

Research and development expenses increased by $0.2 million, or 4%, for the three months ended September 30, 2023, compared to the prior year period based on increased spending on device-related features for our network.

Selling, General and Administrative

Selling, general and administrative expenses that are not directly attributable to the sale of services or products include sales and marketing costs, as well as employee-related expenses (such as salaries, wages, and benefits), legal, finance, information technology, facilities, billing and customer care expenses.

Selling, general and administrative expenses increased by $1.2 million, or 4%, for the three months ended September 30, 2023, compared to the prior year period, primarily due to personnel costs from increased headcount and higher employee stock-based compensation expense and professional fees, offset in part by a decrease in stock appreciation rights expense in the current year resulting from changes in our stock valuation between the years. We expect selling, general and administrative expense for the full year 2023 to be approximately 20% higher than the prior year due to higher incentive costs, including equity compensation costs and a larger workforce.

Depreciation and Amortization

Depreciation and amortization expense increased by $0.4 million compared to the prior year period as some of the on-orbit spares launched in the second quarter of 2023 were placed in to service in the third quarter.

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Other Expense

Interest Expense, Net

Interest expense, net increased $17.0 million, or 97%, for the three months ended September 30, 2023, compared to the prior year quarter. The increase resulted primarily from $14.7 million of fees incurred in connection with our Term Loan refinancing in September 2023.

Income Taxes

For the three months ended September 30, 2023, our income tax benefit was $6.0 million, compared to an income tax benefit of $2.1 million for the prior year period. The increase in income tax benefit is primarily related to a pre-tax book loss in 2023 compared to the prior year pre-tax book income, partially offset by decreased stock compensation tax benefit.

Loss on Equity Method Investments

For the three months ended September 30, 2023, our loss on equity method investments was $1.5 million. We did not record any gains or losses in the prior year period. The increase in loss reflects the portion of losses recorded on our equity method investments.

Net Income (Loss)

Net loss was $1.6 million for the three months ended September 30, 2023, compared to net income of $2.1 million for the prior year period. The change was primarily the result of the increase in interest expense for the repricing fees paid, as noted above.

Comparison of Our Results of Operations for the Nine Months Ended September 30, 2023 and 2022

	Nine Months Ended September 30,								Change
	2023		% of Total Revenue		2022		% of Total Revenue
($ in thousands)									Dollars		Percent
Revenue:
Services	$	436,441	73	%	$	397,947	76	%	$	38,494	10	%
Subscriber equipment	89,474		15	%	95,462		18	%	(5,988)		(6)	%
Engineering and support services	70,068		12	%	33,789		6	%	36,279		107	%
Total revenue	595,983		100	%	527,198		100	%	68,785		13	%
Operating expenses:
Cost of services (exclusive of depreciation
and amortization)	113,431		19	%	83,796		16	%	29,635		35	%
Cost of subscriber equipment	56,075		9	%	60,382		11	%	(4,307)		(7)	%
Research and development	14,541		2	%	10,470		2	%	4,071		39	%
Selling, general and administrative	109,391		19	%	86,905		17	%	22,486		26	%
Depreciation and amortization	267,213		45	%	227,739		43	%	39,474		17	%
Total operating expenses	560,651		94	%	469,292		89	%	91,359		19	%
Operating income	35,332		6	%	57,906		11	%	(22,574)		(39)	%
Other expense:
Interest expense, net	(71,273)		(12)	%	(46,989)		(9)	%	(24,284)		52	%
Other income (expense), net	981		—	%	(374)		—	%	1,355		(362)	%
Total other expense, net	(70,292)		(12)	%	(47,363)		(9)	%	(22,929)		48	%
Income (loss) before income taxes	(34,960)		(6)	%	10,543		2	%	(45,503)		(432)	%
Income tax benefit (expense)	16,673		3	%	(1,013)		—	%	17,686		(1,746)	%
Loss on equity method investments	(4,321)		(1)	%	—		—	%	(4,321)		100	%
Net income (loss)	$	(22,608)	(4)	%	$	9,530	2	%	$	(32,138)	(337)	%

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Revenue

Commercial Service Revenue 

	Nine Months Ended September 30,
	2023					2022					Change
	Revenue		Billable Subscribers (1)	ARPU (2)		Revenue		Billable Subscribers (1)	ARPU (2)		Revenue		Billable Subscribers	ARPU
	(Revenue in millions and subscribers in thousands)
Commercial services:
Voice and data	$	163.6	410	$	45	$	143.6	401	$	41	$	20.0	9	$	4
IoT data	105.0		1,667	7.49		92.8		1,412	7.92		12.2		255	(0.43)
Broadband (3)	43.2		16.5	305		37.2		14.7	297		6.0		1.8	8
Hosted payload and other data	45.1		N/A			44.8		N/A			0.3		N/A
Total commercial services	$	356.9	2,094			$	318.4	1,828			$	38.5	266

(1)Billable subscriber numbers shown are at the end of the respective period.

(2)ARPU is calculated by dividing revenue in the respective period by the average of the number of billable subscribers at the beginning of the period and the number of billable subscribers at the end of the period and then dividing the result by the number of months in the period. Billable subscriber and ARPU data is not applicable for hosted payload and other data service revenue items.

(3)Commercial broadband service consists of Iridium OpenPort and Iridium Certus broadband services.

For the nine months ended September 30, 2023, total commercial services revenue increased $38.5 million, or 12%, from the prior year period primarily driven by increases in billable subscribers in voice and data, IoT and broadband. Commercial voice and data revenue increased $20.0 million, or 14%, from the prior year period primarily due to an increase in ARPU resulting from certain price increases in access fees and an increase in volume across all voice and data services. Commercial IoT revenue increased $12.2 million, or 13%, for the nine months ended September 30, 2023, compared to the prior year period, driven by an 18% increase in IoT billable subscribers primarily due to continued growth in consumer personal communications devices. The subscriber increase effect on revenue was partially offset by a 5% reduction in IoT ARPU, primarily due to the shifting mix of subscribers using lower ARPU plans, including personal communication subscribers. Commercial broadband revenue increased $6.0 million, or 16%, for the nine months ended September 30, 2023, compared to the prior year period, primarily due to the increase in broadband billable subscribers. Hosted payload and other data service revenue remained relatively flat compared to the prior year period.

Government Service Revenue 

	Nine Months Ended September 30,
	2023			2022			Change
	Revenue		Billable Subscribers (1)	Revenue		Billable Subscribers (1)	Revenue		Billable Subscribers
	(Revenue in millions and subscribers in thousands)
Government services	$	79.5	142	$	79.5	145	$	—	(3)

(1)Billable subscriber numbers shown are at the end of the respective period.

We provide airtime and airtime support to the U.S. government and other authorized customers pursuant to our EMSS Contract. Under the terms of this agreement, which we entered into in September 2019, authorized customers utilize specified Iridium airtime services provided through the U.S. government’s dedicated gateway. The fee is not based on subscribers or usage, allowing an unlimited number of users access to these services. For the nine months ended September 30, 2023, revenue was unchanged from the prior year period, in accordance with the EMSS Contract.

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Subscriber Equipment Revenue

Subscriber equipment revenue decreased $6.0 million, or 6%, for the nine months ended September 30, 2023, compared to the prior year period, primarily due to a decrease in sales volume of Short Burst Data devices, including chipsets, offset in part by an increase in sales volume of handset devices. We now expect equipment sales for the full year 2023 to be below the record levels we experienced in 2022 and to continue to moderate toward historical levels.

Engineering and Support Service Revenue

	Nine Months Ended September 30,
	2023		2022		Change
	(In millions)
Commercial engineering and support services	$	9.3	$	4.3	$	5.0
Government engineering and support services	60.8		29.5		31.3
Total engineering and support services	$	70.1	$	33.8	$	36.3

Engineering and support service revenue increased $36.3 million, or 107%, for the nine months ended September 30, 2023 compared to the prior year period primarily due to increased work under certain government projects, including the SDA contract noted above. As noted above, we expect engineering and support service revenue, as well as associated expenses, to be generally higher than prior years for the full year 2023 and throughout the life of the SDA contract.

Operating Expenses

Cost of Services (exclusive of depreciation and amortization)

Cost of services (exclusive of depreciation and amortization) increased by $29.6 million, or 35%, for the nine months ended September 30, 2023 from the prior year period, primarily as a result of an increase in work under certain government engineering contracts, as noted above, and higher satellite operation costs.

Cost of Subscriber Equipment

Cost of subscriber equipment decreased $4.3 million, or 7%, for the nine months ended September 30, 2023, compared to the prior year period, which was in line with the change in equipment revenue for the same period.

Research and Development

Research and development expenses increased by $4.1 million, or 39%, for the nine months ended September 30, 2023 compared to the prior year period based on increased spending on device-related features for our network.

Selling, General and Administrative

Selling, general and administrative expenses increased by $22.5 million, or 26%, for the nine months ended September 30, 2023 compared to the prior year period, primarily due to higher management incentive, including equity compensation costs and an increase in headcount and professional fees. As noted above, we expect selling, general and administrative expense to increase by approximately 20% in 2023 compared to 2022, due primarily to stock-based compensation costs.

Depreciation and Amortization

Depreciation and amortization expense increased by $39.5 million, or 17%, compared to the prior year period primarily related to the write-off of the remaining ground spare satellite in the second quarter of 2023 following completion of on-orbit testing, which resulted in accelerated depreciation expense of $37.5 million.

Other Expense

Interest Expense, Net

Interest expense, net increased $24.3 million for the nine months ended September 30, 2023 compared to the prior year period. The increase resulted primarily from the fees paid to refinance our Term Loan in September 2023, as noted above, and an increase in the base rate of our Term Loan compared to the prior year period.

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Income Taxes

For the nine months ended September 30, 2023, our income tax benefit was $16.7 million, compared to income tax expense of $1.0 million for the prior year period. The increase in income tax benefit is primarily related to a pre-tax book loss in 2023 compared to the prior year pre-tax book income, and the net impact of increased stock compensation tax benefit partially offset by tax expense from increased nondeductible executive compensation.

Loss on Equity Method Investments

For the nine months ended September 30, 2023, our loss on equity method investments was $4.3 million. We did not record any gains or losses in the prior year period. The increase in loss reflects the portion of losses recorded on equity method investments.

Net Income (Loss)

Net loss was $22.6 million for the nine months ended September 30, 2023, compared to net income of $9.5 million for the prior year period. The change primarily resulted from the increase in depreciation expense related to the write-off of the remaining ground spare, as noted above, and an increase in interest expense related to the fees paid for the refinancing of the Term Loan and the increased interest rate. These were offset in part by the income tax benefit and increases in revenues, as noted above.

Liquidity and Capital Resources

Our primary sources of liquidity are cash provided by operations, cash and cash equivalents on hand and our Revolving Facility described below. These sources are expected to meet our short-term and long-term liquidity needs for (i) required principal and interest on the Term Loan, (ii) capital expenditures, (iii) working capital, (iv) share repurchases under the program authorized by our Board of Directors, and (v) anticipated cash dividend payments to holders of our common stock.

As of September 30, 2023, our total cash and cash equivalents balance was $67.9 million, down from $168.8 million as of December 31, 2022, principally as a result of the $195.1 million in repurchases of our common stock, $57.3 million in capital expenditures and $48.8 million in dividends paid during the nine months ended September 30, 2023, offset by internally generated cash flows from operations.

Term Loan

On September 20, 2023, pursuant to an amended and restated credit agreement, or the Credit Agreement, we refinanced our previously existing Term Loan for a total borrowing of $1,500.0 million, and an accompanying $100.0 million revolving loan, or the Revolving Facility. The refinanced Term Loan was issued at a price equal to 99.75% of its face value and bears interest at an annual rate equal to the Secured Overnight Financing Rate, or SOFR, plus 2.5%, with a 0.75% SOFR floor. The maturity date of the Term Loan is in September 2030. Interest is paid monthly on the last business day of the month. The Revolving Facility bears interest at the same rate (but without a SOFR floor) if and as drawn, with no original issue discount, a commitment fee of 0.5% per year on the undrawn amount, which will be reduced to 0.375% if we have a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of less than 3.5 to 1, and a maturity date in September 2028. Principal payments, payable quarterly, beginning with the quarter ending March 31, 2024, will equal $15.0 million per annum (equal to one percent of the full principal amount of the Term Loan), with the remaining principal due upon maturity.

We paid $3.8 million of original issuance costs to refinance the Term Loan in September 2023, which costs were deferred and will be amortized over the extended term. Lenders making up approximately $16.8 million of the Term Loan did not participate in the refinancing. Those portions of the Term Loan were replaced by new or existing lenders. This resulted in an immaterial loss on extinguishment of debt during the three months ended September 30, 2023, as we wrote off the unamortized debt issuance costs related to the lenders who were fully repaid in exchange of principal. We deferred an additional $1.2 million of third-party fees associated with the refinancing of the Term Loan and the Revolving Facility.

As of September 30, 2023 and December 31, 2022, we reported an aggregate of $1,500.0 million and $1,504.6 million in borrowings under the Term Loan, respectively. These amounts do not include $18.1 million and $17.4 million of net unamortized deferred financing costs as of September 30, 2023 and December 31, 2022, respectively. The net principal balance in borrowings in the accompanying consolidated balance sheets as of September 30, 2023 and December 31, 2022 amounted to $1,481.9 million and $1,487.2 million, respectively. We have not drawn on our Revolving Facility.

The Credit Agreement contains no financial maintenance covenants, with respect to the Term Loan. With respect to the Revolving Facility, the Credit Agreement requires us to maintain a consolidated first lien net leverage ratio, as defined by the Credit Agreement, of no greater than 6.25 to 1 if more than 35% of the Revolving Facility has been drawn. The Credit Agreement contains other customary representations and warranties, affirmative and negative covenants, and events of default. We were in compliance with all covenants under the Credit Agreement as of September 30, 2023.

The Credit Agreement restricts our ability to incur liens, engage in mergers or asset sales, pay dividends, repay subordinated indebtedness, incur indebtedness, make investments and loans, and engage in other transactions as specified in the Credit Agreement. The Credit Agreement provides for specified exceptions, including baskets measured as a percentage of trailing

26

twelve months of earnings before interest, taxes, depreciation and amortization, or EBITDA, and unlimited exceptions in the case of incurring indebtedness and liens and making investments, dividend payments, and payments of subordinated indebtedness, based on achievement and maintenance of specified leverage ratios. The Credit Agreement permits repayment, prepayment, and repricing transactions, subject, in the case of the Term Loan, to a 1% penalty in the event the Term Loan is prepaid or repriced within the first six months from the refinancing date. The Credit Agreement also contains an annual mandatory prepayment sweep mechanism with respect to a portion of our excess cash flow (as defined in the Credit Agreement) in the event our net leverage ratio rises above 3.5 to 1.

Contractual Obligations

As of September 30, 2023, we had non-cancelable purchase obligations of approximately $28.4 million for inventory purchases with Benchmark, our primary third-party equipment supplier. Our purchase obligations, all of which are due during 2023, decreased $28.5 million from the end of 2022 primarily due to recovery from supply chain constraints.

Our only material long-term cash requirement is the repayment of our Term Loan upon its maturity in 2030, which is expected to be $1,402.5 million. We expect to refinance this amount at or prior to maturity.

Dividends

On December 8, 2022, our Board of Directors initiated a quarterly dividend. In each of December 2022, May 2023, and September 2023, our Board of Directors declared a quarterly cash dividend in the amount of $0.13 per share of common stock, which were paid in March, June, and September 2023. Total dividends paid through September 30, 2023 were $48.8 million. While we expect to continue regular cash dividends, any future dividends declared will be at the discretion of our Board of Directors and will depend, among other factors, upon our results of operations, financial condition and cash requirements, as well as such other factors our Board of Directors deems relevant.

Cash Flows

The following table summarizes our cash flows:

	Nine Months Ended September 30,
	2023		2022		Change
	(In thousands)
Cash provided by operating activities	$	227,106	$	254,458	$	(27,352)
Cash used in investing activities	$	(67,285)	$	(94,756)	$	27,471
Cash used in financing activities	$	(258,371)	$	(263,793)	$	5,422

Cash Flows Provided by Operating Activities

Net cash provided by operating activities for the nine months ended September 30, 2023 decreased by $27.4 million from the prior year period. Cash flows from working capital decreased by approximately $32.0 million, primarily due to a decrease in cash flows related to inventory and accounts payable. This was partially offset by an increase in non-cash adjustments to net income (loss). We now expect our inventory balance to grow to approximately $90.0 million by the end of 2023 to replenish our inventory levels, including last-time buys. We expect inventory will moderate over the next few years to historical levels.

Cash Flows Used in Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2023 decreased by $27.5 million as compared to the prior year period, primarily as a result of our $50.0 million investment in Aireon Holdings in 2022, compared to our $10.0 million in Satelles in 2023, offset in part by increased capital expenditures of $12.5 million, primarily related to payments for the launched ground spares. We currently expect our capital expenditures to average approximately $50.0 million to $60.0 million per year through 2030, excluding costs in connection with the launch of ground spare satellites.

Cash Flows Used in Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2023 decreased by $5.4 million compared to the prior year period primarily due to a decrease in repurchases of our common stock and a net decrease in principal payments associated with the terms under the refinancing of our Term Loan, offset in part by the common stock dividends paid in 2023, as described above.

27

Seasonality

Our results of operations have been subject to seasonal usage changes for commercial customers, and we expect that our results will be affected by similar seasonality going forward. March through October are typically the peak months for commercial voice services revenue and related subscriber equipment sales. U.S. government revenue and commercial IoT revenue have been less subject to seasonal usage changes.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The preparation of these financial statements requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, useful lives of property and equipment, long-lived assets and other intangible assets, deferred financing costs, income taxes, stock-based compensation, and other estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. There have been no changes to our critical accounting policies and estimates from those described in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 16, 2023.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We had an outstanding aggregate balance of $1,500.0 million under the Term Loan as of September 30, 2023. Under our Term Loan, we pay interest at an annual rate equal to SOFR, plus 2.5%, with a 0.75% SOFR floor. Accordingly, we have been and continue to be subject to interest rate fluctuations. For every SOFR increase of 25 basis points above the level of the Cap, we expect our annual interest expense to increase by an additional $1.25 million related to the unhedged portion of the Term Loan.

We have not borrowed under our Revolving Facility. Accordingly, although the Revolving Facility bears interest at SOFR plus 2.5%, without a SOFR floor, if and as drawn, we are not currently exposed to fluctuations in interest rates with respect to our Revolving Facility.

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, as well as accounts receivable. We maintain our cash and cash equivalents with financial institutions with high credit ratings and maintain deposits in excess of federally insured limits. The majority of our cash is invested into a money market fund invested in U.S. treasuries, agency mortgage-backed securities and/or U.S. government-guaranteed debt. Accounts receivable are due from both domestic and international customers. We perform credit evaluations of our customers’ financial condition and record reserves to provide for estimated credit losses. Accounts payable are owed to both domestic and international vendors.

ITEM 4.    CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer, who is our principal executive officer, and our chief financial officer, who is our principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered by this report. In evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected.

Based on this evaluation, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

During the quarter ended September 30, 2023, there were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

28

PART II.

OTHER INFORMATION 

ITEM 1.    LEGAL PROCEEDINGS.

There are no material pending legal proceedings, other than routine litigation incidental to our business.

ITEM 1A.     RISK FACTORS.

Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. In addition to the other information set forth in this quarterly report on Form 10-Q, you should carefully consider the factors described in “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on February 16, 2023.

There have been no material changes from the risk factors described in the Annual Report.

ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Issuer Purchases of Equity Securities

Period	(a) Total number of shares purchased	(b) Average price paid per share	(c) Total number of shares purchased as part of publicly announced plans or programs	(d) Maximum dollar value of shares that may yet be purchased under the plans or programs
July 1-31	856,391	$53.20	856,391	$414.8 million
August 1-31	369,436	$50.41	369,436	$396.2 million
September 1-30	219,540	$48.04	219,540	$385.7 million
Total	1,445,367	$51.71	1,445,367	—

In February 2021, our Board of Directors approved the repurchase of up to $300.0 million of our common stock through December 31, 2022. In March 2022, our board of directors approved the repurchase of up to an additional $300.0 million of our common stock through December 31, 2023. In July 2023, the Board of Directors approved a share repurchase program of up to an additional $400.0 million of our common stock through December 31, 2025, in addition to its previously announced share repurchase programs. All shares listed above were purchased under these authorizations in open market transactions.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES.

None. 

ITEM 4.     MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5.     OTHER INFORMATION.

None. 

29

ITEM 6.     EXHIBITS.

The following list of exhibits includes exhibits submitted with this Form 10-Q as filed with the Securities and Exchange Commission.

Exhibit	Description
10.1	Amendment and Restatement Agreement, dated September 20, 2023, among Iridium Holdings LLC, Iridium Communications Inc., Iridium Satellite LLC, Various Lenders, and Deutsche Bank AG New York Branch, as Administrative Agent and Collateral Agent, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on September 20, 2023.
31.1	Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to section 302 of The Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to section 302 of The Sarbanes-Oxley Act of 2002.
32.1*	Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(b) and 15d-14(b) promulgated under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to section 906 of The Sarbanes-Oxley Act of 2002.
101	The following financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, filed with the Securities and Exchange Commission on October 19, 2023, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2023 and 2022; (iii) Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022; (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022; and (iv) Notes to Condensed Consolidated Financial Statements.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

30

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

IRIDIUM COMMUNICATIONS INC.
By:	/s/ Thomas J. Fitzpatrick
	Thomas J. Fitzpatrick
	Chief Financial Officer (as duly authorized officer and as principal financial officer of the registrant)

 Date: October 19, 2023

31

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002

I, Matthew J. Desch, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Iridium Communications Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 19, 2023	/s/ Matthew J. Desch
	Matthew J. Desch
	Chief Executive Officer (principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002

I, Thomas J. Fitzpatrick, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Iridium Communications Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 19, 2023	/s/ Thomas J. Fitzpatrick
	Thomas J. Fitzpatrick
	Chief Financial Officer (principal financial officer)

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF

PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the Chief Executive Officer and the Chief Financial Officer of Iridium Communications Inc. (the “Company”) each hereby certifies that, to the best of his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, to which this Certification is attached as Exhibit 32.1 (the “Quarterly Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Quarterly Report and results of operations of the Company for the periods covered in the financial statements in the Quarterly Report.

Dated:  October 19, 2023

/s/ Matthew J. Desch	/s/ Thomas J. Fitzpatrick
Matthew J. Desch	Thomas J. Fitzpatrick
Chief Executive Officer	Chief Financial Officer

This certification accompanies the Quarterly Report and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

XML

Document And Entity Information - $ / shares	9 Months Ended
	Sep. 30, 2023	Oct. 12, 2023	Dec. 31, 2022
Document Information [Line Items]
Entity Registrant Name	Iridium Communications Inc.
Entity Central Index Key	0001418819
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Trading Symbol	IRDM
Entity Current Reporting Status	Yes
Document Quarterly Report	true
Document Type	10-Q
Amendment Flag	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Entity Address, Address Line One	1750 Tysons Boulevard
Entity Address, City or Town	McLean
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	22102
Document Transition Report	false
City Area Code	703
Local Phone Number	703-287-7400
Entity File Number	001-33963
Entity Incorporation, State or Country Code	DE
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock, $0.001 par value
Entity Common Stock, Shares Outstanding (in shares)		123,850,566
Entity Tax Identification Number	26-1344998
NASDAQ/NGS (GLOBAL SELECT MARKET) [Member]
Document Information [Line Items]
Security Exchange Name	NASDAQ
Common Stock, Shares [Member]
Document Information [Line Items]
Common Stock, Par or Stated Value Per Share	$ 0.001		$ 0.001

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 67,877	$ 168,770
Accounts receivable, net	100,718	82,273
Inventory	71,136	39,776
Prepaid expenses and other current assets	13,200	15,385
Total current assets	252,931	306,204
Property and equipment, net	2,229,188	2,433,305
Equity Method Investments	68,863	49,853
Other assets	113,325	122,072
Intangible assets, net	41,407	42,577
Total assets	2,705,714	2,954,011
Current liabilities:
Short-term secured debt	11,250	16,500
Accounts payable	14,440	21,372
Accrued expenses and other current liabilities	59,235	67,963
Deferred revenue	34,078	35,742
Total current liabilities	119,003	141,577
Long-term secured debt, net	1,470,674	1,470,685
Deferred income tax liabilities, net	131,587	151,569
Deferred revenue, net of current portion	42,530	45,265
Other long-term liabilities	16,918	16,360
Total liabilities	1,780,712	1,825,456
Commitments and contingencies
Stockholders’ equity:
Additional paid-in capital	1,105,245	1,124,610
Accumulated deficit	(233,593)	(47,744)
Accumulated other comprehensive income, net of tax	53,226	51,563
Total stockholders’ equity	925,002	1,128,555
Total liabilities and stockholders’ equity	2,705,714	2,954,011
Common Stock, Shares [Member]
Stockholders’ equity:
Common stock, $0.001 par value, 300,000 shares authorized, 123,821 and 125,902 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	$ 124	$ 126

XML

Condensed Consolidated Balance Sheets (Parenthetical) - Common Stock, Shares [Member] - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	300,000,000	300,000,000
Common stock, shares issued (in shares)	123,821,000	125,902,000
Common stock, shares outstanding (in shares)	123,821,000	125,902,000

XML

Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue:
Total revenue	$ 197,602	$ 184,060	$ 595,983	$ 527,198
Operating expenses:
Research and development	5,037	4,865	14,541	10,470
Selling, general and administrative	33,368	32,140	109,391	86,905
Depreciation and amortization	76,825	76,397	267,213	227,739
Total operating expenses	169,447	166,186	560,651	469,292
Operating income	28,155	17,874	35,332	57,906
Other expense, net:
Interest expense, net	(34,660)	(17,632)	(71,273)	(46,989)
Other income (expense), net	343	(146)	981	(374)
Total other expense, net	(34,317)	(17,778)	(70,292)	(47,363)
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	(6,162)	96	(34,960)	10,543
Income tax benefit (expense)	6,009	2,053	16,673	(1,013)
Loss on equity method investments	(1,489)	0	(4,321)	0
Net income (loss)	$ (1,642)	$ 2,149	$ (22,608)	$ 9,530
Weighted Average Number of Shares Outstanding, Basic	125,176	127,697	126,100	128,800
Weighted Average Number of Shares Outstanding, Diluted	125,176	129,075	126,100	130,284
Earnings Per Share, Basic and Diluted	$ (0.01)	$ 0.02	$ (0.18)	$ 0.07
Comprehensive income (loss):
Net income (loss)	$ (1,642)	$ 2,149	$ (22,608)	$ 9,530
Foreign currency translation adjustments	(712)	(366)	(753)	115
Unrealized Gain on Cash Flow Hedging, net of tax	2,011	25,537	2,416	63,971
Comprehensive income (loss)	$ (343)	$ 27,320	(20,945)	73,616
Earnings Per Share, Diluted	$ (0.01)	$ 0.02
Services
Revenue:
Total revenue	$ 151,950	$ 138,977	436,441	397,947
Operating expenses:
Cost of Goods and Services Sold	41,394	34,378	113,431	83,796
Subscriber equipment
Revenue:
Total revenue	20,422	27,959	89,474	95,462
Operating expenses:
Cost of Goods and Services Sold	12,823	18,406	56,075	60,382
Engineering and support services
Revenue:
Total revenue	$ 25,230	$ 17,124	$ 70,068	$ 33,789

XML

Consolidated Statements of Changes in Stockholders' Equity Statement - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock, Shares [Member]	Common Stock, Amount	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]
Beginning Balance (in shares) at Dec. 31, 2021		131,342
Stock options exercised and awards vested (in shares)		1,080
Stock withheld to cover employee taxes (in shares)		(117)
Repurchases and retirements of common stock (in shares)		(6,546)
Ending Balance (in shares) at Sep. 30, 2022		125,759
Beginning Balance at Dec. 31, 2021	$ 1,287,947		$ 131	$ 1,154,058	$ (7,052)	$ 140,810
Stock-based compensation	34,952			34,952
Stock options exercised and awards vested	2,573		1	2,572
Stock withheld to cover employee taxes	(4,598)			(4,598)
Repurchases and retirements of common stock	(249,393)		(6)	(61,284)		(188,103)
Dividends	0			0
Cumulative translation adjustment	115				115
Unrealized Gain on Cash Flow Hedging, net of tax	63,971				63,971
Net income (loss)	9,530					9,530
Ending Balance at Sep. 30, 2022	1,145,097		126	1,125,700	57,034	(37,763)
Beginning Balance (in shares) at Jun. 30, 2022		127,179
Stock options exercised and awards vested (in shares)		344
Stock withheld to cover employee taxes (in shares)		(13)
Repurchases and retirements of common stock (in shares)		(1,751)
Ending Balance (in shares) at Sep. 30, 2022		125,759
Beginning Balance at Jun. 30, 2022	1,181,104		127	1,128,103	31,863	21,011
Stock-based compensation	15,573			15,573
Stock options exercised and awards vested	1,903		0	1,903
Stock withheld to cover employee taxes	(574)			(574)
Repurchases and retirements of common stock	(80,229)		(1)	(19,305)		(60,923)
Dividends	0			0
Cumulative translation adjustment	(366)				(366)
Unrealized Gain on Cash Flow Hedging, net of tax	25,537				25,537
Net income (loss)	2,149					2,149
Ending Balance at Sep. 30, 2022	1,145,097		126	1,125,700	57,034	(37,763)
Beginning Balance (in shares) at Dec. 31, 2022		125,902
Stock options exercised and awards vested (in shares)		1,485
Stock withheld to cover employee taxes (in shares)		(144)
Repurchases and retirements of common stock (in shares)		(3,422)
Ending Balance (in shares) at Sep. 30, 2023		123,821
Beginning Balance at Dec. 31, 2022	1,128,555		126	1,124,610	51,563	(47,744)
Stock-based compensation	50,761			50,761
Stock options exercised and awards vested	3,750		1	3,749
Stock withheld to cover employee taxes	(8,644)			(8,644)
Repurchases and retirements of common stock	(195,139)		(3)	(31,895)		(163,241)
Dividends	33,336			33,336
Cumulative translation adjustment	(753)				(753)
Unrealized Gain on Cash Flow Hedging, net of tax	2,416				2,416
Net income (loss)	(22,608)					(22,608)
Ending Balance at Sep. 30, 2023	925,002		124	1,105,245	53,226	(233,593)
Beginning Balance (in shares) at Jun. 30, 2023		125,045
Stock options exercised and awards vested (in shares)		213
Stock withheld to cover employee taxes (in shares)		(14)
Repurchases and retirements of common stock (in shares)		(1,423)
Ending Balance (in shares) at Sep. 30, 2023		123,821
Beginning Balance at Jun. 30, 2023	1,000,193		125	1,118,623	51,927	(170,482)
Stock-based compensation	17,654			17,654
Stock options exercised and awards vested	72		0	72
Stock withheld to cover employee taxes	(727)			(727)
Repurchases and retirements of common stock	(75,374)		(1)	(13,904)		(61,469)
Dividends	16,473			16,473
Cumulative translation adjustment	(712)				(712)
Unrealized Gain on Cash Flow Hedging, net of tax	2,011				2,011
Net income (loss)	(1,642)					(1,642)
Ending Balance at Sep. 30, 2023	$ 925,002		$ 124	$ 1,105,245	$ 53,226	$ (233,593)

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net income (loss)	$ (22,608)	$ 9,530
Deferred income taxes	(20,753)	(286)
Depreciation and amortization	267,213	227,739
Stock-based compensation (net of amounts capitalized)	45,502	31,626
Amortization of deferred financing fees	3,142	3,488
All other items, net	4,705	450
Accounts receivable	(18,675)	(23,109)
Inventory	(30,979)	(9,642)
Prepaid expenses and other current assets	1,869	(1,860)
Other assets	2,449	1,989
Accounts payable	(9,147)	13,071
Accrued expenses and other current liabilities	9,371	(598)
Deferred revenue	(3,122)	4,870
Other long-term liabilities	(1,861)	(2,810)
Net cash provided by operating activities	227,106	254,458
Cash flows from investing activities:
Capital expenditures	(57,285)	(44,756)
Payments to Acquire Equity Method Investments	(10,000)	(50,000)
Net cash used in investing activities	(67,285)	(94,756)
Cash flows from financing activities:
Borrowings under the Term Loan	63,940	0
Payments on the Term Loan	(72,315)	(12,375)
Repurchases of common stock	(195,139)	(249,393)
Payments of Debt Issuance Costs	(1,164)	0
Proceeds from exercise of stock options	3,750	2,573
Tax payment upon settlement of stock awards	8,644	4,598
Payments of Ordinary Dividends, Common Stock	(48,799)	0
Net cash used in financing activities	(258,371)	(263,793)
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	(2,343)	1,940
Net decrease in cash and cash equivalents, and restricted cash	(100,893)	(102,151)
Cash, cash equivalents, and restricted cash, beginning of period	168,770	320,913
Cash, cash equivalents, and restricted cash, end of period	67,877	218,762
Supplemental cash flow information:
Interest paid, net of amounts capitalized	72,514	45,236
Income taxes paid, net	2,852	1,332
Supplemental disclosure of non-cash investing activities:
Property and equipment received but not paid	5,051	4,282
Dividends declared but not paid	1,087	0
Capitalized stock-based compensation	$ 5,259	$ 3,326

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Basis of Presentation and Principles of Consolidation

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

Iridium Communications Inc. (the “Company”) prepared its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The Company’s operations are primarily conducted through, and its operating assets are owned by, its principal operating subsidiary, Iridium Satellite LLC, Iridium Satellite LLC’s immediate parent, Iridium Holdings LLC, and their respective subsidiaries. The accompanying condensed consolidated financial statements include the accounts of (i) the Company, (ii) its wholly owned subsidiaries, and (iii) all less than wholly owned subsidiaries that the Company controls. All material intercompany transactions and balances have been eliminated.

In the opinion of management, the condensed consolidated financial statements reflect all normal recurring adjustments that the Company considers necessary for the fair presentation of its results of operations and cash flows for the interim periods covered, and of the financial position of the Company at the date of the interim condensed consolidated balance sheet. The operating results for interim periods are not necessarily indicative of the operating results for the entire year. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to instructions, rules and regulations prescribed by the U.S. Securities and Exchange Commission (“SEC”). These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2022, as filed with the SEC on February 16, 2023.

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Fair Value Measurements

The Company evaluates assets and liabilities subject to fair value measurements on a recurring and non-recurring basis to determine the appropriate level to classify them for each reporting period. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value.

The fair value hierarchy consists of the following tiers:

•Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

•Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

•Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The fair value estimates are based upon certain market assumptions and information available to the Company. The carrying values of the following financial instruments approximated their fair values as of September 30, 2023 and December 31, 2022: (1) cash and cash equivalents, (2) prepaid expenses and other current assets, (3) accounts receivable, (4) accounts payable, and (5) accrued expenses and other current liabilities. Fair values approximate their carrying values because of their short-term nature. The Level 2 cash equivalents may include money market funds, commercial paper and short-term U.S. agency securities. The Company also classifies its derivative financial instruments as Level 2. The Company did not hold any Level 3 assets as of September 30, 2023 or December 31, 2022. In determining fair value, the Company uses a market approach utilizing valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets.

Leases

For new leases, the Company will determine if an arrangement is or contains a lease at inception. Leases are included as (1) right-of-use (“ROU”) assets within other assets, and (2) ROU liabilities within accrued expenses and other liabilities and are included within other long-term liabilities on the Company’s condensed consolidated balance sheets.

ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Certain leases contain variable contractual obligations as a result of future base rate escalations which are estimated based on observed trends and included within the measurement of present value. The Company’s leases do not provide an implicit rate. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU assets also include any lease payments made and exclude lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases, such as teleport network facilities, the Company elects the practical expedient to combine lease and non-lease components as a single lease component. Taxes assessed on leases in which the Company is either a lessor or lessee are excluded from contract consideration and variable payments when measuring new lease contracts or remeasuring existing lease contracts.

Inventory

Inventory consists primarily of finished goods and raw materials from third-party manufacturers. The Company outsources manufacturing of subscriber equipment to third-party manufacturers and purchases accessories from third-party suppliers. The Company’s cost of inventory includes an allocation of overhead, including payroll and payroll-related costs of employees directly involved in bringing inventory to its existing condition, and freight. Inventories are valued using the weighted average cost method and are carried at the lower of cost or net realizable value.

The Company has a manufacturing agreement with Benchmark Electronics Inc. (“Benchmark”) to manufacture most of its subscriber equipment. Pursuant to the agreement, the Company may be required to purchase excess materials at cost plus a contractual markup if the materials are not used in production within the periods specified in the agreement. Benchmark will then repurchase such materials from the Company at the same price paid by the Company, as required for the production of the subscriber equipment.

The following table summarizes the Company’s inventory balances:

	September 30, 2023		December 31, 2022
	(In thousands)
Finished goods	$	41,382	$	17,964
Raw materials	30,759		23,014
Inventory valuation reserve	(1,005)		(1,202)
Total	$	71,136	$	39,776

Property and Equipment

The Company assesses its long-lived assets for impairment when indicators of impairment are present. During the quarter ended June 30, 2023, the Company launched five of its remaining six ground spare satellites. Following completion of successful on-orbit testing of the five launched satellites, the Company has no plans to use, develop or launch the remaining ground spare. As the Company believed the construction-in-progress associated with the remaining ground spare satellite would no longer be used, the Company wrote off the full amount remaining in construction-in-progress for that satellite by recording accelerated depreciation expense of $37.5 million in the second quarter of 2023. This reflects the Company’s updated estimate of the useful life from 12.5 years to zero for the remaining ground spare. There were no similar write-offs in 2022.

Commitments

During 2022, the Company entered into agreements with Space Exploration Technology Corp. and Thales Alenia Space France for services in connection with the launch of the Company’s five ground spare satellites referenced above. The contract price under these agreements was approximately $40.0 million in the aggregate. As of September 30, 2023, the Company had made all payments related to these services, which costs were capitalized as construction in progress within property and equipment, net in the accompanying condensed consolidated balance sheets.

Derivative Financial Instruments

The Company uses derivatives to manage its exposure to fluctuating interest rate risk on variable rate debt. Its derivatives are measured at fair value and are recorded on the condensed consolidated balance sheets within other current liabilities and other assets. When the Company’s derivatives are designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in accumulated other comprehensive income within the Company’s condensed consolidated balance sheets and subsequently recognized in earnings when the hedged items impact earnings. Any ineffective portion of a derivative’s change in fair value will be recognized in earnings in the same period in which the hedged interest payments affect earnings. Within the condensed consolidated statements of operations and comprehensive income, the gains and losses related to cash flow hedges are recognized within interest income (expense), net, as this is the same financial statement line item used for any gains or losses associated with the hedged items. Cash flows from hedging activities are included in operating activities within the Company’s condensed consolidated statements of cash flows, which is the same category as the item being hedged. See Note 6 for further information.

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Cash and Cash Equivalents, Restricted Cash and Marketable Securities

9 Months Ended

Sep. 30, 2023

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents, Restricted Cash and Marketable Securities

Cash and Cash Equivalents

Cash and Cash Equivalents

The following table presents the Company’s cash and cash equivalents balances:

	September 30, 2023		December 31, 2022		Recurring Fair Value Measurement
	(In thousands)
Cash and cash equivalents:
Cash	$	15,676	$	16,247
Money market funds	52,201		152,523		Level 2
Total cash and cash equivalents	$	67,877	$	168,770

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Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Lessor, Operating Leases [Text Block]

Leases

Lessor Arrangements

Operating leases in which the Company is a lessor consist primarily of hosting agreements with Aireon LLC (“Aireon”) (see Note 12) and L3Harris Technologies, Inc. (“L3Harris”) for space on the Company’s satellites. These agreements provide for a fee that will be recognized over the life of the satellites, currently estimated to be approximately 12.5 years from their respective in-service dates. Lease income related to these agreements was $5.4 million for each of the three months ended September 30, 2023 and 2022, and $16.1 million for each of the nine months ended September 30, 2023 and 2022. Lease income is recorded as hosted payload and other data service revenue within service revenue on the Company’s condensed consolidated statements of operations and comprehensive income.

Aireon has made payments to the Company pursuant to its hosting agreement, and the Company expects Aireon will continue to do so. L3Harris has prepaid all amounts owed to the Company pursuant to its hosting arrangement. The following table presents future income with respect to the Company’s operating leases in which it is the lessor existing at September 30, 2023, exclusive of the $16.1 million recognized during the nine months ended September 30, 2023, by year and in the aggregate:

Year Ending December 31,	Amount
	(In thousands)
2023	$	5,361
2024	21,445
2025	21,445
2026	21,445
2027	21,445
Thereafter	56,017
Total lease income	$	147,158

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Debt

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Debt

Debt

Term Loan and Revolving Facility

On September 20, 2023, pursuant to an amended and restated credit agreement (the “Credit Agreement”), the Company refinanced its previously existing term loan resulting in total borrowing of $1,500.0 million (as so amended and restated, the “Term Loan”) and an accompanying $100.0 million revolving loan (the “Revolving Facility”). The Term Loan was issued at a price equal to 99.75% of its face value and bears interest at an annual rate equal to the Secured Overnight Financing Rate (“SOFR”) plus 2.5%, with a 0.75% SOFR floor. The maturity date of the Term Loan is in September 2030. Interest is paid monthly on the last business day of the month. The Revolving Facility bears interest at the same rate (but without a SOFR floor) if and as drawn, with no original issue discount, a commitment fee of 0.5% per year on the undrawn amount, which will be reduced to 0.375% if the Company has a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of less than 3.5 to 1, and a maturity date in September 2028. Principal payments, payable quarterly, beginning with the quarter ending March 31, 2024, will be $15.0 million per annum (equal to one percent of the full principal amount of the Term Loan), with the remaining principal due upon maturity.

The Company paid $3.8 million of original issuance costs to refinance the Term Loan in September 2023, which were deferred and will be amortized over the extended term. Lenders making up approximately $16.8 million of the Term Loan did not participate in the refinancing. Those portions of the Term Loan were replaced by new or existing lenders. This resulted in an immaterial loss on extinguishment of debt during the three months ended September 30, 2023, as the Company wrote off the unamortized debt issuance costs related to the lenders who were fully repaid in exchange of principal. The Company deferred an additional $1.2 million of third-party fees associated with the refinancing of the Term Loan and the Revolving Facility.

As of September 30, 2023 and December 31, 2022, the Company reported an aggregate of $1,500.0 million and $1,504.6 million in borrowings under the Term Loan, respectively. These amounts do not include $18.1 million and $17.4 million of net unamortized deferred financing costs as of September 30, 2023 and December 31, 2022, respectively. The net principal balance in borrowings in the accompanying consolidated balance sheets as of September 30, 2023 and December 31, 2022 amounted to $1,481.9 million and $1,487.2 million, respectively. As of September 30, 2023 and December 31, 2022, based upon recent trading prices (Level 2 - market approach), the fair value of the Company’s borrowings under the Term Loan was $1,499.1 million and $1,494.3 million, respectively.

The Credit Agreement restricts the Company’s ability to incur liens, engage in mergers or asset sales, pay dividends, repay subordinated indebtedness, incur indebtedness, make investments and loans, and engage in other transactions as specified in the Credit Agreement. The Credit Agreement provides for specified exceptions, including baskets measured as a percentage of trailing twelve months of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and unlimited exceptions in the case of incurring indebtedness and liens and making investments, dividend payments, and payments of subordinated indebtedness, based on achievement and maintenance of specified leverage ratios. The Credit Agreement also contains an annual mandatory prepayment sweep mechanism with respect to a portion of the Company’s excess cash flow (as defined in the Credit Agreement) in the event the Company’s net leverage ratio rises above 3.5 to 1. As of December 31, 2022, the Company was below the specified leverage ratio, and a mandatory prepayment sweep was therefore, not required. The Credit Agreement permits repayment, prepayment, and repricing transactions, subject, in the case of the Term Loan, to a 1% penalty in the event the Term Loan is prepaid or repriced within the first six months from the refinancing date.

The Credit Agreement contains no financial maintenance covenants with respect to the Term Loan. With respect to the Revolving Facility, the Credit Agreement requires the Company to maintain a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of no greater than 6.25 to 1 if more than 35% of the Revolving Facility has been drawn. The Credit Agreement contains other customary representations and warranties, affirmative and negative covenants, and events of default. The Company was in compliance with all covenants as of September 30, 2023.

Interest on Debt

Total interest incurred includes amortization of deferred financing fees and capitalized interest. The Company incurred third-party financing costs of $15.9 million in connection with the refinancing of the Term Loan in September 2023, of which $14.7 million was expensed. The amounts expensed are included within interest expense on the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2023. There were no such costs incurred during the three and nine months ended September 30, 2022. The following table presents the interest and amortization of deferred financing fees related to the Term Loan:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Total interest incurred	$	37,277	$	19,844	$	80,584	$	51,076
Amortization of deferred financing fees	$	1,087	$	1,211	$	3,327	$	3,593
Capitalized interest	$	1,121	$	725	$	3,847	$	1,589

As of September 30, 2023 and December 31, 2022, accrued interest on the Term Loan was $0.7 million and $0.3 million, respectively.

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Derivatives

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Derivative Financial Instruments

The Company is exposed to interest rate fluctuations related to its Term Loan. The Company has reduced its exposure to fluctuations in the cash flows associated with changes in the variable interest rate by entering into offsetting positions through the use of hedging instruments. This will reduce the negative impact of increases in the variable rate over the term of the derivative contracts. These contracts are not used for trading or other speculative purposes. Historically, the Company has not incurred, and does not expect to incur in the future, any losses as a result of counterparty default.

Interest Rate Cap

In July 2021, the Company entered into an interest rate cap contract (the “Cap”), which had an effective date of December 2021. The Cap manages the Company’s exposure to interest rate movements on a portion of the Term Loan through November 2026. In December 2022, the Company modified the Cap to replace the LIBOR base rate with SOFR, consistent with a prior amendment to the Term Loan. With the change from LIBOR to SOFR, the Company received a credit risk adjustment of 0.064%. The modified Cap now provides the Company with the right to receive payment from the counterparty if one-month SOFR exceeds 1.436%. Prior to the modification the Company received payment under the terms of the Cap if one-month LIBOR exceeded 1.5%. The Company pays a fixed monthly premium based on an annual rate of 0.31% for the Cap. The Cap carried a notional amount of $1.0 billion as of September 30, 2023 and December 31, 2022.

The Cap, which was not affected by the refinancing of the Term Loan in September 2023, is designed to mirror the terms of the Term Loan and to offset the cash flows being hedged. The Company designated the Cap as a cash flow hedge of the variability of the SOFR-based interest payments on the Term Loan. The effective portion of the Cap’s change in fair value is recorded in accumulated other comprehensive income. Any ineffective portion of the Cap’s change in fair value is recorded in current earnings as interest expense.

Hedge effectiveness of the current interest rate cap contract is based on a long-haul hypothetical derivative methodology and includes all changes in value. The Company formally assesses, both at the hedge’s inception and on an ongoing quarterly basis, whether the designated derivative instruments are highly effective in offsetting changes in the cash flows of the hedged items. When the hedging instrument is sold, expires, is terminated, is exercised, no longer qualifies for hedge accounting, is de-designated, or is no longer probable, hedge accounting is discontinued prospectively.

Fair Value of Derivative Instruments

As of September 30, 2023 and December 31, 2022, the Company had an asset balance of $93.3 million and $92.3 million, respectively, for the fair value of the Cap and a liability balance of $9.0 million and $11.0 million, respectively, for the fair value of the Cap premium. Both the Cap and the Cap premium are recorded net within other assets.

During each of the three and nine months ended September 30, 2023 and September 30, 2022, the Company collectively incurred $0.8 million and $2.5 million, respectively, in interest expense for the Cap premium. Interest expense was reduced by $9.6 million for the three months ended September 30, 2023 and $26.3 million for the nine months ended September 30, 2023, and by $1.8 million for both the three and nine months ended September 30, 2022, for payments received related to the Cap.

Gains and losses resulting from fair value adjustments to the Cap are recorded within accumulated other comprehensive income within the Company’s condensed consolidated balance sheets and reclassified to interest expense on the dates that interest payments become due. Cash flows related to the derivative contracts are included in cash flows from operating activities on the condensed consolidated statements of cash flows. Over the next 12 months, the Company expects any gains or losses for cash flow hedges amortized from accumulated other comprehensive income into earnings to have an immaterial impact on the Company’s consolidated financial statements.

The following table presents the amount of unrealized gain or loss and related tax impact associated with the derivative instruments that the Company recorded in its condensed consolidated statements of operations and comprehensive income:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Unrealized gain, net of tax	$	2,011	$	25,537	$	2,416	$	63,971
Tax expense	$	621	$	7,740	$	761	$	19,392

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

In May 2023, the Company’s stockholders approved the amendment and restatement of the Company’s 2015 Equity Incentive Plan (as so amended and restated, the “Amended 2015 Plan”). As of September 30, 2023, the remaining aggregate number of shares available for future grants under the Amended 2015 Plan was 13,030,297. The Amended 2015 Plan provides for the grant of stock-based awards, including nonqualified stock options, incentive stock options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights and other equity securities to employees, consultants and non-employee directors of the Company and its affiliated entities. The number of shares of common stock available for issuance under the Amended 2015 Plan is reduced by (i) one share for each share of common stock issued pursuant to an appreciation award, such as a stock option or stock appreciation right with an exercise or strike price of at least 100% of the fair market value of the underlying common stock on the date of grant, and (ii) 1.8 shares for each share of common stock issued pursuant to any stock award that is not an appreciation award, also 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 the Company’s stockholders. The Company accounts for stock-based compensation at fair value.

Restricted Stock Units

The RSUs granted to employees for service generally vest over four years, with 25% vesting on the first anniversary of the grant date and the remainder vesting ratably on a quarterly basis thereafter, subject to continued employment. Some RSUs granted to employees for performance vest upon the completion of defined performance goals, subject to continued employment. The RSUs granted to non-employee members of the Board of Directors generally vest in full on the first anniversary of the grant date. The RSUs granted to non-employee consultants generally vest 50% on the first anniversary of the grant date, with the remaining 50% vesting quarterly thereafter through the second anniversary of the grant date. The Company’s RSUs are classified as equity awards because the RSUs will be settled in the Company’s common stock upon

vesting. The fair value of the RSUs is determined at the grant date based on the closing price of the Company’s common stock on the date of grant. The related compensation expense is recognized over the service period, or shorter periods based on the retirement eligibility of certain grantees, and is based on the grant date fair value of the Company’s common stock and the number of shares expected to vest. The fair value of the awards is not remeasured at the end of each reporting period. The RSUs do not carry voting rights until they are vested, but certain unvested RSUs are entitled to accrue dividends, and shares are issued upon settlement in accordance with the terms of the award.

RSU Summary

The following tables summarize the Company’s RSU activity:

	Shares Underlying RSUs	Weighted- Average Grant Date Fair Value Per RSU
	(In thousands)
Outstanding at December 31, 2022	2,970	$	31.60
Granted	1,102	59.20
Forfeited	(43)	44.15
Released	(999)	37.37
Outstanding at September 30, 2023	3,030	$	39.52
Vested and unreleased at September 30, 2023 (1)	793

	Shares Underlying RSUs	Weighted- Average Grant Date Fair Value Per RSU
	(In thousands)
Outstanding at December 31, 2021	2,550	$	25.80
Granted	1,491	40.02
Forfeited	(127)	31.85
Released	(766)	32.73
Outstanding at September 30, 2022	3,148	$	30.60
Vested and unreleased at September 30, 2022 (1)	885

(1)     These RSUs were granted to the Company’s Board of Directors as a part of their compensation for board and committee service, as detailed below, and had vested but had not yet settled, meaning that the underlying shares of common stock had not been issued and released pursuant to the terms of the applicable compensation program.

Service-Based RSUs

The majority of the annual compensation the Company provides to non-employee members of its Board of Directors is paid in the form of RSUs. In addition, some members of the Company’s Board of Directors may elect to receive the remainder of their annual compensation, or a portion thereof, in the form of RSUs. An aggregate amount of approximately 53,000 and 57,000 service-based RSUs were granted to the non-employee members of the Company’s Board of Directors as a result of these payments and elections during the nine months ended September 30, 2023 and 2022, respectively, with an estimated grant date fair value of $2.8 million and $2.2 million, respectively.

During the nine months ended September 30, 2023 and 2022, the Company granted approximately 667,000 and 1,012,000 service-based RSUs, respectively, to its employees, with an estimated aggregate grant date fair value of $39.9 million and $41.0 million, respectively.

Performance-Based RSUs

In March 2023 and 2022, the Company granted approximately 193,000 and 248,000 annual incentive, performance-based RSUs, respectively, to the Company’s executives and employees (the “Bonus RSUs”), with an estimated grant date fair value of $11.9 million and $9.7 million, respectively. Vesting of the Bonus RSUs is dependent upon the Company’s achievement of defined performance goals over the respective fiscal year. The Company records stock-based compensation expense related to performance-based RSUs when it is considered probable that the performance conditions will be met. Management believes it is probable that substantially all of the 2023 Bonus RSUs will vest. The level of achievement, if any, of performance goals will be determined by the compensation committee of the Company’s Board of Directors and, if such goals are achieved, the 2023

Bonus RSUs will vest, subject to continued employment, in March 2024. Substantially all of the 2022 Bonus RSUs vested in March 2023 upon the determination of the level of achievement of the performance goals.

Additionally, in March 2023 and 2022, the Company granted approximately 134,000 and 167,000 long-term, performance-based RSUs, respectively, to the Company’s executives (the “Executive RSUs”). The estimated aggregate grant date fair value of the Executive RSUs for the 2023 and 2022 grants was $8.2 million and $6.5 million, respectively. Vesting of the Executive RSUs is dependent upon the Company’s achievement of defined performance goals over a two-year period. The vesting of Executive RSUs will ultimately range from 0% to 150% of the number of shares underlying the Executive RSUs granted based on the level of achievement of the performance goals. If the Company achieves the performance goals, 50% of the number of Executive RSUs earned based on performance will vest on the second anniversary of the grant date, and the remaining 50% will vest on the third anniversary of the grant date, in each case subject to the executive’s continued service as of the vesting date, which may be accelerated based on the retirement eligibility of certain grantees. During March 2023, the Company awarded approximately 55,000 additional shares related to performance-based RSUs granted to the Company’s executives in 2021 for over-achievement of performance targets for the performance period ended December 31, 2022. During March 2022, approximately 50,000 shares underlying performance-based RSUs granted to the Company’s executives in 2020 were forfeited due to performance targets not being fully achieved through the performance period ended December 31, 2021.

Stock Option Awards

The stock option awards granted to employees generally (i) have a term of ten years, (ii) vest over four years with 25% vesting after the first year of service and the remainder vesting ratably on a quarterly basis thereafter, (iii) are contingent upon employment on the vesting date, and (iv) have an exercise price equal to the fair market value of the underlying shares at the date of grant. The fair value of stock options was determined at the grant date using the Black-Scholes option pricing model. The Company historically granted stock options to newly hired and promoted employees but now exclusively utilizes RSUs. The Company did not grant any stock options during the three and nine months ended September 30, 2023 or 2022.

Option Summary

A summary of the activity of the Company’s stock options is as follows:

	Shares	Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
	(In thousands, except years and per share data)
Options outstanding at December 31, 2022	1,185	$	9.97	2.64	$	49,094
Cancelled or expired	(4)	10.25
Exercised	(486)	7.72			$	26,420
Options outstanding and exercisable at September 30, 2023	695	$	11.54	2.66	$	23,616

	Shares	Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
	(In thousands, except years and per share data)
Options outstanding at December 31, 2021	1,681	$	9.35	3.28	$	53,698
Exercised	(314)	7.78			$	11,244
Forfeited	(2)	14.24
Options outstanding at September 30, 2022	1,365	$	9.70	2.81	$	47,312
Options exercisable at September 30, 2022	1,345	$	9.52	2.76	$	46,855
Options exercisable and expected to vest at September 30, 2022	1,365	$	9.70	2.81	$	47,310

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Equity Transactions

9 Months Ended

Sep. 30, 2022

Stockholders' Equity Note [Abstract]

Equity Transactions

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 converted to common stock. The remaining 0.5 million authorized shares of preferred stock remain undesignated and unissued as of September 30, 2023 and December 31, 2022. As of September 30, 2023 and December 31, 2022, there were no outstanding shares of preferred stock.

Dividends

Stockholders are entitled to receive, when and if declared by the Company’s Board of Directors from time to time, dividends and other distributions in cash, stock or property from the Company’s assets or funds legally and contractually available for such purposes. In each of December 2022, May 2023, and September 2023 the Company’s Board of Directors approved a dividend of $0.13 per share of common stock. The dividends, which were paid on March 30, 2023, June 30, 2023, and September 29, 2023 to stockholders of record as of March 15, 2023, June 15, 2023, and September 15, 2023, respectively, resulted in total payments of $48.8 million for the nine months ended September 30, 2023. The Company’s liability related to dividends on common shares underlying unvested RSUs was $1.1 million as of September 30, 2023.

Share Repurchases and Retirement

To date, the Board of Directors has authorized the repurchase of up to $1,000.0 million of the Company’s common stock through December 31, 2025. This timeframe can be extended or shortened by the Board of Directors. Repurchases may be made from time to time on the open market at prevailing prices or in negotiated transactions off the market. The Company records share repurchases at cost, which includes broker commissions and related excise taxes. All shares are immediately retired upon repurchase in accordance with the board-approved policy. When treasury shares are retired, the Company’s policy is to allocate the excess of the repurchase price over the par value of shares acquired first, to additional paid-in capital, and then to retained earnings/accumulated deficit. The portion to be allocated to additional paid-in capital is calculated by applying a percentage, determined by dividing the number of shares to be retired by the number of shares outstanding, to the balance of additional paid-in capital as of the date of retirement.

The Company repurchased and subsequently retired 1.4 million and 3.4 million shares of its common stock during the three and nine months ended September 30, 2023, respectively, for a total purchase price of $73.8 million and $193.0 million, respectively, exclusive of $0.7 million and $1.2 million of related taxes incurred in for the three and nine months ended September 2023, respectively. In addition, in September 2023, the Company purchased 22,000 shares for $0.9 million, which were settled and retired in October 2023. As such, these shares are recorded as treasury stock as of September 30, 2023. The Company repurchased and subsequently retired 1.8 million and 6.5 million shares of its common stock during the three and nine months ended September 30, 2022, respectively, for a total purchase price of $76.5 million and $245.7 million, respectively. As of September 30, 2023, $385.7 million remained available and authorized for repurchase under this program through December 31, 2025.

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Revenue

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

The following table summarizes the Company’s services revenue:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Commercial services revenue:
Voice and data	$	56,188	$	50,256	$	163,593	$	143,621
IoT data	38,460		33,786		104,971		92,857
Broadband	15,782		13,589		43,258		37,200
Hosted payload and other data	15,020		14,846		45,119		44,769
Total commercial services revenue	125,450		112,477		356,941		318,447
Government services revenue	26,500		26,500		79,500		79,500
Total services revenue	$	151,950	$	138,977	$	436,441	$	397,947

The following table summarizes the Company’s engineering and support services revenue:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Commercial	$	1,881	$	1,783	$	9,304	$	4,280
Government	23,349		15,341		60,764		29,509
Total engineering and support services revenue	$	25,230	$	17,124	$	70,068	$	33,789

Approximately 36% and 25% of the Company’s accounts receivable balance at September 30, 2023 and December 31, 2022, respectively, was due from prime contracts or subcontracts with agencies of the U.S. government.

The Company’s contracts with customers generally do not contain performance obligations with terms in excess of one year. As such, the Company does not disclose details related to the value of performance obligations that are unsatisfied as of the end of the reporting period. The total value of any performance obligations that extend beyond one year is immaterial to the financial statements.

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the condensed consolidated balance sheets. The Company bills amounts under its agreed-upon contractual terms at periodic intervals (for services), upon shipment (for equipment), or upon achievement of contractual milestones or as work progresses (for engineering and support services). Billing may occur subsequent to revenue recognition, resulting in unbilled accounts receivable (contract assets). The Company may also receive payments from customers before revenue is recognized, resulting in deferred revenue (contract liabilities). The Company recognized revenue that was previously recorded as deferred revenue in the amounts of $3.3 million and $5.5 million for the three months ended September 30, 2023 and 2022, respectively, and $25.1 million and $21.1 million for the nine months ended September 30, 2023 and 2022, respectively.

The Company has also recorded costs of obtaining contracts expected to be recovered in prepaid expenses and other current assets (contract assets or commissions), that are not separately disclosed on the condensed consolidated balance sheets. The commissions are recognized over the estimated usage period. The following table presents contract assets not separately disclosed:

	September 30, 2023		December 31, 2022
	(In thousands)
Contract Assets:
Commissions	$	883	$	1,258
Other contract costs	$	2,029	$	2,255

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Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Tax Disclosure

Income Taxes

Loss before income taxes was $6.2 million and $35.0 million for the three and nine months ended September 30, 2023, respectively, while the income tax benefit was $6.0 million and $16.7 million for the three and nine months ended September 30, 2023, respectively. The effective tax rate was 97.5% and 47.7% for the three and nine months ended September 30, 2023, respectively, which differed from the federal statutory rate of 21% primarily due to a discrete tax benefit associated with stock compensation and U.S. tax credits, which were partially offset by tax expense associated with nondeductible executive compensation.

Income before income taxes was $0.1 million and $10.5 million for the three and nine months ended September 30, 2022, respectively, while the income tax benefit was $2.1 million for the three months ended September 30, 2022, and the income tax expense was $1.0 million for the nine months ended September 30, 2022. The effective tax rate for the three and nine months ended September 30, 2022, differed from the federal statutory rate of 21% primarily due to U.S. tax credits, a discrete tax benefit associated with stock compensation and a discrete tax benefit from the U.S. provision-to-return adjustment in the current period, partially offset by tax expense associated with nondeductible executive compensation and non-creditable foreign taxes.

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Net Income (Loss) Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

Net Income (Loss) Per ShareThe Company calculates basic net income (loss) per share by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. In periods of net income, diluted net income per share takes into account the effect of potential dilutive common shares when the effect is dilutive. Potentially dilutive common shares include (i) shares of common stock issuable upon exercise of outstanding stock options and (ii) contingently issuable RSUs that are convertible into shares of common stock upon achievement of certain service and performance requirements. The effect of potentially dilutive common shares is computed using the treasury stock method.

The following table summarizes the computations of basic and diluted net income (loss) per share:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands, except per share data)
Numerator:
Net income (loss) - basic and diluted	$	(1,642)	$	2,149	(22,608)		9,530
Denominator:
Weighted average common shares — basic	125,176		127,697		126,100		128,800
Dilutive effect of stock options	—		921		—		974
Dilutive effect of RSUs	—		457		—		510
Weighted average common shares — diluted	125,176		129,075		126,100		130,284
Net income (loss) per share - basic and diluted	$	(0.01)	$	0.02	$	(0.18)	$	0.07

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

	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
	(In thousands)		(In thousands)
Performance-based RSUs	82	—	168	—
Service-based RSUs	500	—	655	—
Stock options	443	—	543	—

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Related Party Transactions

9 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

Related Party Transactions Disclosure

12. Related Party Transactions

Aireon LLC and Aireon Holdings LLC

The Company’s satellite constellation hosts the Aireon® system, which provides a global air traffic surveillance service through a series of automatic dependent surveillance-broadcast (“ADS-B”) receivers. The Company formed Aireon in 2011, with subsequent investments from the air navigation service providers (“ANSPs”) of Canada, Italy, Denmark, Ireland and the United Kingdom, to develop and market this service. The Company and other Aireon investors hold their interests in Aireon Holdings LLC (“Aireon Holdings”) through an amended and restated LLC agreement (the “Aireon Holdings LLC Agreement”). Aireon Holdings holds 100% of the membership interests in Aireon, which is the operating entity.

In June 2022, the Company entered into a subscription agreement with Aireon Holdings and invested $50.0 million in exchange for an approximate 6% preferred membership interest. The Company’s investment in Aireon is accounted for as an equity method investment. The carrying value of the Company’s investment in Aireon was $45.7 million and $48.8 million at September 30, 2023 and December 31, 2022, respectively. The investments by the Company prior to June 2022 had previously been written down to a carrying value of zero.

At each of September 30, 2023 and December 31, 2022, the Company’s fully diluted ownership stake in Aireon Holdings was approximately 39.5%, which is subject to partial future redemption under provisions contained in the Aireon Holdings LLC Agreement.

Aireon has contracted to pay the Company a fee to host the ADS-B receivers on its constellation, as well as fees for power and data services in connection with the delivery of the air traffic surveillance data. Pursuant to an agreement with Aireon (the “Hosting Agreement”), Aireon will pay the Company fees of $200.0 million to host the ADS-B receivers, of which $86.5 million had been paid as of September 30, 2023. These fees will be recognized over the remaining useful life of the satellites, or approximately $16.0 million per year. Additionally, Aireon pays power fees of up to approximately $3.7 million per year. Aireon also pays data services fees of $19.8 million per year for the delivery of the air traffic surveillance data under a data transmission services agreement. Pursuant to ASU 2016-02, the Company considers the Hosting Agreement an operating lease. The Company recognized $4.0 million of hosting fee revenue for each of the three months ended September 30, 2023 and 2022 and $12.0 million for each of the nine months ended September 30, 2023 and 2022. Aireon receivables under the Hosting Agreement totaled $3.7 million as of September 30, 2023. There were no such receivables as of December 31, 2022. The Company recorded power and data service revenue from Aireon of $5.9 million for each of the three months ended September 30, 2023 and 2022 and $17.6 million for each of the nine months ended September 30, 2023 and 2022.

Under two services agreements, the Company also provides Aireon with administrative services and support services, the fees for which are paid monthly. Aireon receivables due to the Company under these two agreements totaled $2.3 million and $2.2 million as of September 30, 2023 and December 31, 2022, respectively.

The Company and the other Aireon investors have agreed to participate pro-rata, based on their fully diluted ownership stakes, in funding an investor bridge loan to Aireon. The Company’s maximum funding commitment for the bridge loan is $10.7 million. No bridge loan amounts were outstanding as of September 30, 2023 or December 31, 2022.

Satelles

In the first quarter of 2023, the Company entered into a stock purchase agreement with Satelles, Inc. (“Satelles”) and invested $10.0 million, in addition to its previous equity investment in Satelles. The Company’s fully diluted ownership stake in Satelles was approximately 19.5% as of September 30, 2023, and the investment in Satelles is now accounted for as an equity method investment. The carrying value of the Company’s equity investment in Satelles was approximately $22.3 million as of September 30, 2023.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurements

The Company evaluates assets and liabilities subject to fair value measurements on a recurring and non-recurring basis to determine the appropriate level to classify them for each reporting period. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value.

The fair value hierarchy consists of the following tiers:

•Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

•Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

•Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The fair value estimates are based upon certain market assumptions and information available to the Company. The carrying values of the following financial instruments approximated their fair values as of September 30, 2023 and December 31, 2022: (1) cash and cash equivalents, (2) prepaid expenses and other current assets, (3) accounts receivable, (4) accounts payable, and (5) accrued expenses and other current liabilities. Fair values approximate their carrying values because of their short-term nature. The Level 2 cash equivalents may include money market funds, commercial paper and short-term U.S. agency securities. The Company also classifies its derivative financial instruments as Level 2. The Company did not hold any Level 3 assets as of September 30, 2023 or December 31, 2022. In determining fair value, the Company uses a market approach utilizing valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets.

Lessee, Leases [Policy Text Block]

Leases

For new leases, the Company will determine if an arrangement is or contains a lease at inception. Leases are included as (1) right-of-use (“ROU”) assets within other assets, and (2) ROU liabilities within accrued expenses and other liabilities and are included within other long-term liabilities on the Company’s condensed consolidated balance sheets.

ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Certain leases contain variable contractual obligations as a result of future base rate escalations which are estimated based on observed trends and included within the measurement of present value. The Company’s leases do not provide an implicit rate. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU assets also include any lease payments made and exclude lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases, such as teleport network facilities, the Company elects the practical expedient to combine lease and non-lease components as a single lease component. Taxes assessed on leases in which the Company is either a lessor or lessee are excluded from contract consideration and variable payments when measuring new lease contracts or remeasuring existing lease contracts.

Inventory, Policy [Policy Text Block]

Inventory

Inventory consists primarily of finished goods and raw materials from third-party manufacturers. The Company outsources manufacturing of subscriber equipment to third-party manufacturers and purchases accessories from third-party suppliers. The Company’s cost of inventory includes an allocation of overhead, including payroll and payroll-related costs of employees directly involved in bringing inventory to its existing condition, and freight. Inventories are valued using the weighted average cost method and are carried at the lower of cost or net realizable value.

The Company has a manufacturing agreement with Benchmark Electronics Inc. (“Benchmark”) to manufacture most of its subscriber equipment. Pursuant to the agreement, the Company may be required to purchase excess materials at cost plus a contractual markup if the materials are not used in production within the periods specified in the agreement. Benchmark will then repurchase such materials from the Company at the same price paid by the Company, as required for the production of the subscriber equipment.

Property, Plant and Equipment, Policy

Property and Equipment

The Company assesses its long-lived assets for impairment when indicators of impairment are present. During the quarter ended June 30, 2023, the Company launched five of its remaining six ground spare satellites. Following completion of successful on-orbit testing of the five launched satellites, the Company has no plans to use, develop or launch the remaining ground spare. As the Company believed the construction-in-progress associated with the remaining ground spare satellite would no longer be used, the Company wrote off the full amount remaining in construction-in-progress for that satellite by recording accelerated depreciation expense of $37.5 million in the second quarter of 2023. This reflects the Company’s updated estimate of the useful life from 12.5 years to zero for the remaining ground spare. There were no similar write-offs in 2022.

Commitments and Contingencies, Policy

Commitments

During 2022, the Company entered into agreements with Space Exploration Technology Corp. and Thales Alenia Space France for services in connection with the launch of the Company’s five ground spare satellites referenced above. The contract price under these agreements was approximately $40.0 million in the aggregate. As of September 30, 2023, the Company had made all payments related to these services, which costs were capitalized as construction in progress within property and equipment, net in the accompanying condensed consolidated balance sheets.

Derivatives, Policy [Policy Text Block]

Derivative Financial Instruments

The Company uses derivatives to manage its exposure to fluctuating interest rate risk on variable rate debt. Its derivatives are measured at fair value and are recorded on the condensed consolidated balance sheets within other current liabilities and other assets. When the Company’s derivatives are designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in accumulated other comprehensive income within the Company’s condensed consolidated balance sheets and subsequently recognized in earnings when the hedged items impact earnings. Any ineffective portion of a derivative’s change in fair value will be recognized in earnings in the same period in which the hedged interest payments affect earnings. Within the condensed consolidated statements of operations and comprehensive income, the gains and losses related to cash flow hedges are recognized within interest income (expense), net, as this is the same financial statement line item used for any gains or losses associated with the hedged items. Cash flows from hedging activities are included in operating activities within the Company’s condensed consolidated statements of cash flows, which is the same category as the item being hedged. See Note 6 for further information.

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Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of Inventory, Current

The following table summarizes the Company’s inventory balances:

	September 30, 2023		December 31, 2022
	(In thousands)
Finished goods	$	41,382	$	17,964
Raw materials	30,759		23,014
Inventory valuation reserve	(1,005)		(1,202)
Total	$	71,136	$	39,776

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Cash and Cash Equivalents, Restricted Cash and Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2023

Cash and Cash Equivalents [Abstract]

Summary of Company's Cash and Cash Equivalents

The following table presents the Company’s cash and cash equivalents balances:

	September 30, 2023		December 31, 2022		Recurring Fair Value Measurement
	(In thousands)
Cash and cash equivalents:
Cash	$	15,676	$	16,247
Money market funds	52,201		152,523		Level 2
Total cash and cash equivalents	$	67,877	$	168,770

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Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Operating Lease, Lease Income [Table Text Block]

The following table presents future income with respect to the Company’s operating leases in which it is the lessor existing at September 30, 2023, exclusive of the $16.1 million recognized during the nine months ended September 30, 2023, by year and in the aggregate:

Year Ending December 31,	Amount
	(In thousands)
2023	$	5,361
2024	21,445
2025	21,445
2026	21,445
2027	21,445
Thereafter	56,017
Total lease income	$	147,158

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Debt (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Interest incurred

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Total interest incurred	$	37,277	$	19,844	$	80,584	$	51,076
Amortization of deferred financing fees	$	1,087	$	1,211	$	3,327	$	3,593
Capitalized interest	$	1,121	$	725	$	3,847	$	1,589

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Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments, Gain (Loss)

The following table presents the amount of unrealized gain or loss and related tax impact associated with the derivative instruments that the Company recorded in its condensed consolidated statements of operations and comprehensive income:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Unrealized gain, net of tax	$	2,011	$	25,537	$	2,416	$	63,971
Tax expense	$	621	$	7,740	$	761	$	19,392

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Share-based Payment Arrangement, Restricted Stock and Restricted Stock Unit, Activity

The following tables summarize the Company’s RSU activity:

	Shares Underlying RSUs	Weighted- Average Grant Date Fair Value Per RSU
	(In thousands)
Outstanding at December 31, 2022	2,970	$	31.60
Granted	1,102	59.20
Forfeited	(43)	44.15
Released	(999)	37.37
Outstanding at September 30, 2023	3,030	$	39.52
Vested and unreleased at September 30, 2023 (1)	793

	Shares Underlying RSUs	Weighted- Average Grant Date Fair Value Per RSU
	(In thousands)
Outstanding at December 31, 2021	2,550	$	25.80
Granted	1,491	40.02
Forfeited	(127)	31.85
Released	(766)	32.73
Outstanding at September 30, 2022	3,148	$	30.60
Vested and unreleased at September 30, 2022 (1)	885

Share-based Payment Arrangement, Option, Activity

Option Summary

A summary of the activity of the Company’s stock options is as follows:

	Shares	Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
	(In thousands, except years and per share data)
Options outstanding at December 31, 2022	1,185	$	9.97	2.64	$	49,094
Cancelled or expired	(4)	10.25
Exercised	(486)	7.72			$	26,420
Options outstanding and exercisable at September 30, 2023	695	$	11.54	2.66	$	23,616

	Shares	Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
	(In thousands, except years and per share data)
Options outstanding at December 31, 2021	1,681	$	9.35	3.28	$	53,698
Exercised	(314)	7.78			$	11,244
Forfeited	(2)	14.24
Options outstanding at September 30, 2022	1,365	$	9.70	2.81	$	47,312
Options exercisable at September 30, 2022	1,345	$	9.52	2.76	$	46,855
Options exercisable and expected to vest at September 30, 2022	1,365	$	9.70	2.81	$	47,310

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Revenue (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Summary of Company's service revenue

The following table summarizes the Company’s services revenue:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Commercial services revenue:
Voice and data	$	56,188	$	50,256	$	163,593	$	143,621
IoT data	38,460		33,786		104,971		92,857
Broadband	15,782		13,589		43,258		37,200
Hosted payload and other data	15,020		14,846		45,119		44,769
Total commercial services revenue	125,450		112,477		356,941		318,447
Government services revenue	26,500		26,500		79,500		79,500
Total services revenue	$	151,950	$	138,977	$	436,441	$	397,947

Summary of Company's Engineering and Support Services Revenue [Table Text Block]

The following table summarizes the Company’s engineering and support services revenue:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)				(In thousands)
Commercial	$	1,881	$	1,783	$	9,304	$	4,280
Government	23,349		15,341		60,764		29,509
Total engineering and support services revenue	$	25,230	$	17,124	$	70,068	$	33,789

Schedule of recognized contract costs

The following table presents contract assets not separately disclosed:

	September 30, 2023		December 31, 2022
	(In thousands)
Contract Assets:
Commissions	$	883	$	1,258
Other contract costs	$	2,029	$	2,255

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Net Income (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Computations of Basic and Diluted Net Income Per Share

The following table summarizes the computations of basic and diluted net income (loss) per share:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands, except per share data)
Numerator:
Net income (loss) - basic and diluted	$	(1,642)	$	2,149	(22,608)		9,530
Denominator:
Weighted average common shares — basic	125,176		127,697		126,100		128,800
Dilutive effect of stock options	—		921		—		974
Dilutive effect of RSUs	—		457		—		510
Weighted average common shares — diluted	125,176		129,075		126,100		130,284
Net income (loss) per share - basic and diluted	$	(0.01)	$	0.02	$	(0.18)	$	0.07

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

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

	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
	(In thousands)		(In thousands)
Performance-based RSUs	82	—	168	—
Service-based RSUs	500	—	655	—
Stock options	443	—	543	—

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Significant Accounting Policies - Schedule of Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Finished goods	$ 41,382	$ 17,964
Raw materials	30,759	23,014
Inventory valuation reserve	(1,005)	(1,202)
Inventory	$ 71,136	$ 39,776

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Significant Accounting Policies (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2023	Sep. 30, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Launch Service Costs		$ 40.0
Property, Plant and Equipment [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3		$ 0.0	$ 0.0
Satellites
Property, Plant and Equipment [Line Items]
Impairment of Long-Lived Assets to be Disposed of	$ 37.5		$ 0.0

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Cash and Cash Equivalents, Restricted Cash and Marketable Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Cash and cash equivalents:
Total cash and cash equivalents	$ 67,877	$ 168,770
Cash
Cash and cash equivalents:
Cash	15,676	16,247
Money Market Funds | Fair Value, Inputs, Level 2 [Member]
Cash and cash equivalents:
Money market funds	$ 52,201	$ 152,523

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Leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Lessor, Lease, Description [Line Items]
Operating Lease, Lease Income	$ 5,400	$ 5,400	$ 16,100	$ 16,100
2022 (Remainder of Fiscal Year)	5,361		5,361
2024	21,445		21,445
2025	21,445		21,445
2026	21,445		21,445
2027	21,445		21,445
Thereafter	56,017		56,017
Total lease income	$ 147,158		$ 147,158
Next Generation Satellites
Lessor, Lease, Description [Line Items]
Property, Plant and Equipment, Useful Life	12 years 6 months		12 years 6 months

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Debt - Narrative (Details) $ in Thousands		9 Months Ended
	Sep. 20, 2023 USD ($) Rate	Sep. 30, 2023 USD ($) Rate	Dec. 31, 2022 USD ($)
Line of Credit Facility [Line Items]
Interest Payable		$ 700	$ 300
Payments of Financing Costs		15,900
Interest Expense		$ 14,700
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Long-term Debt, Gross	$ 100,000
Debt Instrument, Basis Spread on Variable Rate | Rate		2.50%
Debt Instrument, Fee		0.5
Debt Issuance Costs, Gross	$ 1,200
First Lien Net Leverage Ratio	6.25
Credit Facility Drawdown Floor for Application of First Lien Net Leverage Ratio | Rate	35.00%
Revolving Credit Facility [Member] | Minimum
Line of Credit Facility [Line Items]
Debt Instrument, Fee		0.375
Refinanced Term Loan B
Line of Credit Facility [Line Items]
Long-term Debt, Gross	$ 1,500,000
Discount on Debt Issuance [Line Items] | Rate	99.75%
Debt Instrument, Basis Spread on Variable Rate | Rate		2.50%
Debt Instrument, Periodic Payment, Principal	$ 15,000
Debt Issuance Costs, Gross	3,800
Extinguishment of Debt, Amount	$ 16,800
Debt instrument face amount		$ 1,500,000	1,504,600
Unamortized Deferred Financing Costs		(18,100)	17,400
Long-term Debt		1,481,900	1,487,200
Long-term Debt, Fair Value		$ 1,499,100	$ 1,494,300
Interest Rate Floor [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate | Rate		0.00%
Interest Rate Floor [Member] | Refinanced Term Loan B
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate | Rate		0.75%

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Debt - Interest Incurred (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Debt Disclosure [Abstract]
Interest Costs Incurred	$ 37,277	$ 19,844	$ 80,584	$ 51,076
Amortization of Debt Issuance Costs and Discounts	1,087	1,211	3,327	3,593
Interest Costs Capitalized	$ 1,121	$ 725	$ 3,847	$ 1,589

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Derivatives (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Interest Rate Swap [Line Items]
Derivative, Gain on Derivative	$ 9,600,000		$ 1,800,000	$ 26,300,000	$ 1,800,000
Interest Costs Incurred	$ 37,277,000		19,844,000	$ 80,584,000	51,076,000
Refinanced Term Loan B
Interest Rate Swap [Line Items]
Debt Instrument, Basis Spread on Variable Rate				2.50%
Interest Rate Cap
Interest Rate Swap [Line Items]
Derivative, Fixed Interest Rate	0.31%			0.31%		0.31%
Derivative, Notional Amount	$ 1,000,000,000			$ 1,000,000,000		$ 1,000,000,000
Interest Rate Cash Flow Hedge Asset at Fair Value	93,300,000			93,300,000		92,300,000
Interest Rate Cash Flow Hedge Liability at Fair Value	9,000,000			9,000,000		$ 11,000,000
Interest Costs Incurred	$ 800,000		$ 800,000	$ 2,500,000	$ 2,500,000
Derivative, Cap Interest Rate	1.436%			1.436%		1.50%
Interest Rate Cap | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Interest Rate Swap [Line Items]
Debt Instrument, Basis Spread on Variable Rate		0.064%		0.064%

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Derivatives - Summary of Unrealized Gains and Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Unrealized gain, net of tax	$ 2,011	$ 25,537		$ 63,971
Tax expense	$ 621	$ 7,740	$ 761	$ 19,392

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Stock-Based Compensation Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, number of shares available for grant (in shares)			13,030,297
Share-based compensation, reduction in shares available for issuance by shares issued pursuant to any appreciation award (in shares)			1
Share-based compensation, strike price as a percentage of the fair market value of the underlying stock on the date of grant			100.00%
Share-based compensation, reduction in shares available for issuance by shares issued pursuant to any stock award that is not an appreciation award (in shares)			1.8
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period			4 years	4 years
Stock Option Contractual Term			10 years	10 years
Employee Stock Option | Vesting on first anniversary of grant date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting percentage, year one			25.00%	25.00%
Employee Stock Option | Share-based Payment Arrangement, Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, grant date fair value of stock options			$ 0.0	$ 0.0
Share-based compensation, options granted (in shares)			0	0
Employee Stock Option | Share-based Payment Arrangement, Employee [Member] | Vesting on the last day of each calendar quarter
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting percentage, year one			6.25%	6.25%
Service Based RSU
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted - restricted stock units			667,000	1,012,000
Share-based compensation, grant date fair value of stock options			$ 39.9	$ 41.0
Service Based RSU | Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted - restricted stock units			53,000	57,000
Share-based compensation, grant date fair value of stock options			$ 2.8	$ 2.2
Restricted Stock Units (RSUs) [Member] | Vesting on the last day of each calendar quarter | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting percentage, year one			150.00%	150.00%
Restricted Stock Units (RSUs) [Member] | Share-based Payment Arrangement, Nonemployee [Member] | Vesting on first anniversary of grant date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting percentage, year one			50.00%	50.00%
Restricted Stock Units (RSUs) [Member] | Share-based Payment Arrangement, Nonemployee [Member] | Vesting on the last day of each calendar quarter
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting percentage, year one			12.50%	12.50%
Restricted Stock Units (RSUs) [Member] | Share-based Payment Arrangement, Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period			4 years	4 years
Restricted Stock Units (RSUs) [Member] | Share-based Payment Arrangement, Employee [Member] | Vesting on first anniversary of grant date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting percentage, year one			25.00%	25.00%
Restricted Stock Units (RSUs) [Member] | Share-based Payment Arrangement, Employee [Member] | Vesting on the last day of each calendar quarter
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting percentage, year one			6.25%	6.25%
Restricted Stock Units (RSUs) [Member] | Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Ratably Vest After			100.00%	100.00%
Restricted Stock Units (RSUs) [Member] | Director | Share-based Payment Arrangement, Nonemployee [Member] | Vesting on the last day of each calendar quarter
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting percentage, year one			100.00%	100.00%
Performance Based RSU
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period			1 year	1 year
Granted - restricted stock units			193,000	248,000
Share-based compensation, grant date fair value of stock options			$ 11.9	$ 9.7
Performance Based RSU | Executives
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period			3 years	3 years
Granted - restricted stock units			134,000	167,000
Share-based compensation, grant date fair value of stock options			$ 8.2	$ 6.5
Share-based Compensation Arrangement by Share-based Payment Award, Other Share Increase (Decrease)	55,000	50,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Performance Period			2 years	2 years
Performance Based RSU | Executives | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting percentage, year one			0.00%	0.00%
Performance Based RSU | Executives | Vesting on first anniversary of grant date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting percentage, year one			50.00%	50.00%
Performance Based RSU | Executives | Vesting on the last day of each calendar quarter
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting percentage, year one			50.00%	50.00%
Outstanding Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted - restricted stock units			1,102,000	1,491,000

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Stock-Based Compensation Outstanding RSUs (Details) - Outstanding Restricted Stock Units - $ / shares shares in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Shares Underlying RSUs
Outstanding - restricted stock units	2,970	2,550
Granted - restricted stock units	1,102	1,491
Forfeited - restricted stock units	(43)	(127)
Released - restricted stock units	(999)	(766)
Outstanding - restricted stock units	3,030	3,148
Vested and unreleased restricted stock units	793	885
Weighted- Average Grant Date Fair Value Per RSU
Outstanding - weighted average grant date fair value per RSU	$ 31.60	$ 25.80
Granted - weighted average grant date fair value per RSU	59.20	40.02
Forfeited - weighted average grant date fair value per RSU	44.15	31.85
Released - weighted average grant date fair value per RSU	37.37	32.73
Outstanding - weighted average grant date fair value per RSU	$ 39.52	$ 30.60

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Stock-Based Compensation Activity of Company's Common Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended	6 Months Ended	9 Months Ended
	Mar. 31, 2022	Jun. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding
Options outstanding, beginning of period (in shares)	1,681	1,185	1,185	1,681
Cancelled or Expired (Shares)			(4)
Exercised (Shares)			(486)	(314)
Forfeited (Shares)				(2)
Options outstanding, end of period (in shares)			695	1,365
Options exercisable, end of period (in shares)				1,345
Options exercisable and expected to vest, end of period (in shares)				1,365
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Options outstanding, beginning of period - weighted average exercise price per share	$ 9.35	$ 9.97	$ 9.97	$ 9.35
Options cancelled or expired - weighted average exercise price per share			10.25
Options exercised - weighted average exercise price per share			7.72	7.78
Options forfeited - weighted average exercise price per share				14.24
Options outstanding, end of period - weighted average exercise price per share			$ 11.54	9.70
Options exercisable, end of period - weighted average exercise price per share				9.52
Options exercisable, end of period - weighted average exercise price per share				$ 9.70
Options outstanding, end of period - weighted average remaining contractual term (years)	3 years 3 months 10 days	2 years 7 months 20 days	2 years 7 months 28 days	2 years 9 months 21 days
Options exercisable, end of period - weighted average remaining contractual term (years)				2 years 9 months 3 days
Options exercisable and expected to vest, end of period - Weighted Average Remaining Contractual Term (Years)				2 years 9 months 21 days
Aggregate Intrinsic Value
Options outstanding, end of period - aggregate intrinsic value			$ 23,616	$ 47,312	$ 49,094	$ 53,698
Exercised (Dollar Value)			$ 26,420	11,244
Options exercisable, end of period - aggregate intrinsic value				46,855
Options exercisable and expected to vest, end of period - aggregate intrinsic value				$ 47,310

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Equity Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Mar. 03, 2022	Feb. 05, 2021	Dec. 31, 2015
Class of Stock [Line Items]
Total Authorized Preferred Stock, Number	2,000,000			2,000,000
Preferred stock, par value (in dollars per share)	$ 0.0001			$ 0.0001
Preferred stock, shares issued (in shares)									1,500,000
Shares of preferred stock, undesignated and unissued (in shares)	500,000			500,000		500,000
Preferred stock, shares outstanding (in shares)	0			0		0
Common Stock, Dividends, Per Share, Declared	$ 0.13	$ 0.13
Payments of Ordinary Dividends				$ 48,800
Dividends declared but not paid	$ 1,087		$ 0	$ 1,087	$ 0
Stock Repurchase Program, Authorized Amount							$ 300,000	$ 300,000
Treasury Stock, Shares, Retired	1,400,000		1,800,000	3,400,000	6,500,000
Treasury Stock, Retired, Cost Method, Amount	$ 73,800		$ 76,500	$ 193,000	$ 245,700
Stock Repurchase Program, Remaining Authorized Repurchase Amount	385,700			385,700
Treasury Stock, Value	$ 900			900
Treasury Stock, Shares, Acquired	22,000
Treasury Stock, Value, tax	$ 700			$ 1,200

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Revenue - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Concentration Risk [Line Items]
Liability, revenue recognized	$ 3.3	$ 5.5	$ 25.1	$ 21.1
Accounts Receivable [Member] | Customer Concentration Risk | Prime Contracts with the US Government [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage			36.00%	25.00%

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Revenue - Summary of Service Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 197,602	$ 184,060	$ 595,983	$ 527,198
Voice and data
Disaggregation of Revenue [Line Items]
Revenue	56,188	50,256	163,593	143,621
IoT data
Disaggregation of Revenue [Line Items]
Revenue	38,460	33,786	104,971	92,857
Commercial Broadband Services [Member]
Disaggregation of Revenue [Line Items]
Revenue	15,782	13,589	43,258	37,200
Hosted payload and other data
Disaggregation of Revenue [Line Items]
Revenue	15,020	14,846	45,119	44,769
Services
Disaggregation of Revenue [Line Items]
Revenue	151,950	138,977	436,441	397,947
Services | Commercial
Disaggregation of Revenue [Line Items]
Revenue	125,450	112,477	356,941	318,447
Services | US Government [Member]
Disaggregation of Revenue [Line Items]
Revenue	26,500	26,500	79,500	79,500
Engineering and support services
Disaggregation of Revenue [Line Items]
Revenue	25,230	17,124	70,068	33,789
Engineering and support services | Commercial
Disaggregation of Revenue [Line Items]
Revenue	1,881	1,783	9,304	4,280
Engineering and support services | US Government [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 23,349	$ 15,341	$ 60,764	$ 29,509

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Revenue - Summary of Contract Costs (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Commissions
Capitalized Contract Cost [Line Items]
Contract Assets	$ 883	$ 1,258
Other contract costs
Capitalized Contract Cost [Line Items]
Contract Assets	$ 2,029	$ 2,255

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	$ (6,162)	$ 96	$ (34,960)	$ 10,543
Income tax benefit (expense)	$ 6,009	$ 2,053	$ 16,673	$ (1,013)
Effective Income Tax Rate Reconciliation, Percent	97.50%		47.70%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%	21.00%	21.00%

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Net Income (Loss) Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income (loss) - diluted	$ (1,642)	$ 2,149	$ (22,608)	$ 9,530
Weighted Average Number of Shares Outstanding, Basic	125,176	127,697	126,100	128,800
Weighted Average Number of Shares Outstanding, Diluted	125,176	129,075	126,100	130,284
Earnings Per Share, Basic and Diluted	$ (0.01)	$ 0.02	$ (0.18)	$ 0.07
Earnings Per Share, Diluted	$ (0.01)	$ 0.02
Employee Stock Option
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units	0	921	0	974
Restricted Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units	0	457	0	510

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Net Income (Loss) Per Share - Anti-Dilutive Shares (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Performance Based RSU
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted earnings per share	82	0	168	0
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted earnings per share	500	0	655	0
Employee Stock Option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted earnings per share	443	0	543	0

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Related Party Transactions Related Party Transactions (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Equity Method Investments	$ 68,863,000		$ 68,863,000		$ 49,853,000
Increase (Decrease) in Due from Related Parties, Current	3,700,000
Nonconsolidated Investees, Other
Related Party Transaction [Line Items]
Ownership stake					39.50%
Aireon 2022 Preferred Equity Investment
Related Party Transaction [Line Items]
Payments for (Proceeds from) Investments			50,000,000
Equity Method Investments	$ 45,700,000		$ 45,700,000		$ 48,800,000
Aireon 2022 Preferred Equity Investment | Nonconsolidated Investees, Other
Related Party Transaction [Line Items]
Ownership stake	6.00%		6.00%
Hosting Agreement | Equity Method Investee
Related Party Transaction [Line Items]
Revenues	$ 4,000,000	$ 4,000,000.0	$ 12,000,000	$ 12,000,000.0
Service Agreements [Member] | Equity Method Investee
Related Party Transaction [Line Items]
Revenues	5,900,000	$ 5,900,000	17,600,000	$ 11,700,000
Administrative and support agreement accounts receivable | Equity Method Investee
Related Party Transaction [Line Items]
Nontrade Receivables	2,300,000		2,300,000		2,200,000
Aireon Investor Bridge Loan
Related Party Transaction [Line Items]
Bridge Loan	0		0		0
Investor Bridge Loan Commitment	10,700,000		10,700,000		$ 10,700,000
Satelles Equity Investment
Related Party Transaction [Line Items]
Payments for (Proceeds from) Investments			10,000,000
Equity Method Investments	$ 22,300,000		$ 22,300,000
Satelles Equity Investment | Nonconsolidated Investees, Other
Related Party Transaction [Line Items]
Ownership stake	19.50%		19.50%
Maximum [Member] | Hosting Agreement | Equity Method Investee
Related Party Transaction [Line Items]
Revenues			$ 200,000,000
Maximum [Member] | Power Agreement [Member] | Equity Method Investee
Related Party Transaction [Line Items]
Revenues			3,700,000
Maximum [Member] | Service Agreements [Member] | Equity Method Investee
Related Party Transaction [Line Items]
Revenues			19,800,000
Minimum [Member] | Hosting Agreement | Equity Method Investee
Related Party Transaction [Line Items]
Revenues			$ 86,500,000