x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||||||||
(Nasdaq Global Select Market) |
x | Accelerated Filer | ¨ | |||||||||||||||
Non-Accelerated Filer | ¨ | Smaller Reporting Company | ¨ | ||||||||||||||
Emerging Growth Company | ¨ |
Item No. | Page | |||||||||||||
ITEM 2. | ||||||||||||||
ITEM 3. | ||||||||||||||
ITEM 4. | ||||||||||||||
ITEM 1. | ||||||||||||||
ITEM 1A. | ||||||||||||||
ITEM 2. | ||||||||||||||
ITEM 3. | ||||||||||||||
ITEM 4. | ||||||||||||||
ITEM 5. | ||||||||||||||
ITEM 6. | ||||||||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
(Unaudited) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Inventory | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Equity method investments | |||||||||||
Other assets | |||||||||||
Intangible assets, net | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Short-term secured debt | $ | $ | |||||||||
Accounts payable | |||||||||||
Accrued expenses and other current liabilities | |||||||||||
Deferred revenue | |||||||||||
Total current liabilities | |||||||||||
Long-term secured debt, net | |||||||||||
Deferred income tax liabilities, net | |||||||||||
Deferred revenue, net of current portion | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock, $0.001 par value, 300,000 shares authorized, 121,643 and 122,776 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive income, net of tax | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Revenue: | ||||||||||||||
Services | $ | $ | ||||||||||||
Subscriber equipment | ||||||||||||||
Engineering and support services | ||||||||||||||
Total revenue | ||||||||||||||
Operating expenses: | ||||||||||||||
Cost of services (exclusive of depreciation and amortization) | ||||||||||||||
Cost of subscriber equipment | ||||||||||||||
Research and development | ||||||||||||||
Selling, general and administrative | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Total operating expenses | ||||||||||||||
Operating income | ||||||||||||||
Other income (expense), net: | ||||||||||||||
Interest expense, net | ( | ( | ||||||||||||
Other income, net | ||||||||||||||
Total other expense, net | ( | ( | ||||||||||||
Income before income taxes and loss on equity method investments | ||||||||||||||
Income tax benefit (expense) | ( | |||||||||||||
Loss on equity method investments | ( | ( | ||||||||||||
Net income | $ | $ | ||||||||||||
Weighted average shares outstanding - basic | ||||||||||||||
Weighted average shares outstanding - diluted | ||||||||||||||
Net income per share - basic and diluted | $ | $ | ||||||||||||
Comprehensive income: | ||||||||||||||
Net income | $ | $ | ||||||||||||
Foreign currency translation adjustments | ( | |||||||||||||
( | ||||||||||||||
Comprehensive income | $ | $ |
Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Stockholders’ Equity | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at beginning of period | $ | $ | $ | ( | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised and awards vested | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock withheld to cover employee taxes | ( | — | ( | — | — | ( | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchases and retirements of common stock | ( | ( | ( | ( | — | ( | ( | ( | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends | — | — | ( | — | — | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative translation adjustments | — | — | — | — | ( | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized gain (loss) on cash flow hedges, net of tax | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at end of period | $ | $ | $ | ( | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Deferred income taxes | ( | |||||||||||||
Depreciation and amortization | ||||||||||||||
Stock-based compensation (net of amounts capitalized) | ||||||||||||||
Amortization of deferred financing fees | ||||||||||||||
Loss on equity method investments | ||||||||||||||
All other items, net | ||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable | ( | ( | ||||||||||||
Inventory | ( | |||||||||||||
Prepaid expenses and other current assets | ( | |||||||||||||
Other assets | ||||||||||||||
Accounts payable | ( | |||||||||||||
Accrued expenses and other current liabilities | ( | ( | ||||||||||||
Deferred revenue | ( | ( | ||||||||||||
Other long-term liabilities | ( | ( | ||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities: | ||||||||||||||
Capital expenditures | ( | ( | ||||||||||||
Investment in related party | ( | |||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Cash flows from financing activities: | ||||||||||||||
Borrowings under the Term Loan | ||||||||||||||
Payments on the Term Loan | ( | ( | ||||||||||||
Repurchases of common stock | ( | ( | ||||||||||||
Payment of deferred financing fees | ( | |||||||||||||
Proceeds from exercise of stock options | ||||||||||||||
Tax payment upon settlement of stock awards | ( | ( | ||||||||||||
Payment of common stock dividends | ( | ( | ||||||||||||
Net cash provided by (used in) financing activities | ( | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents, and restricted cash | ( | ( | ||||||||||||
Net increase (decrease) in cash and cash equivalents, and restricted cash | ( | |||||||||||||
Cash, cash equivalents, and restricted cash, beginning of period | ||||||||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | $ | ||||||||||||
Supplemental cash flow information: | ||||||||||||||
Interest paid, net of amounts capitalized | $ | $ | ||||||||||||
Income taxes paid, net | $ | $ | ||||||||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||||
Property and equipment received but not paid | $ | $ | ||||||||||||
Dividends accrued on common stock | $ | $ | ||||||||||||
Capitalized stock-based compensation | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
(In thousands) | |||||||||||
Finished goods | $ | $ | |||||||||
Raw materials | |||||||||||
Inventory valuation reserve | ( | ( | |||||||||
Total | $ | $ |
March 31, 2024 | December 31, 2023 | Recurring Fair Value Measurement | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||
Cash | $ | $ | ||||||||||||||||||
Money market funds | Level 2 | |||||||||||||||||||
Total cash and cash equivalents | $ | $ |
Year Ending December 31, | Amount | |||||||
(In thousands) | ||||||||
2024 | $ | |||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
Thereafter | ||||||||
Total lease income | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands) | ||||||||||||||
Total interest incurred | $ | $ | ||||||||||||
Amortization of deferred financing fees | $ | $ | ||||||||||||
Capitalized interest | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands) | ||||||||||||||
Unrealized gain (loss), net of tax | $ | $ | ( | |||||||||||
Tax benefit (expense) | $ | ( | $ |
Shares Underlying RSUs | Weighted- Average Grant Date Fair Value Per RSU | |||||||||||||
(In thousands) | ||||||||||||||
Outstanding at December 31, 2023 | $ | |||||||||||||
Granted | ||||||||||||||
Forfeited | ( | |||||||||||||
Released | ( | |||||||||||||
Outstanding at March 31, 2024 | $ | |||||||||||||
Vested and unreleased at March 31, 2024 (1) |
Shares Underlying RSUs | Weighted- Average Grant Date Fair Value Per RSU | |||||||||||||
(In thousands) | ||||||||||||||
Outstanding at December 31, 2022 | $ | |||||||||||||
Granted | ||||||||||||||
Forfeited | ( | |||||||||||||
Released | ( | |||||||||||||
Outstanding at March 31, 2023 | $ | |||||||||||||
Vested and unreleased at March 31, 2023 (1) |
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, 2023 | $ | $ | ||||||||||||||||||||||||
Cancelled or expired | ( | |||||||||||||||||||||||||
Exercised | ( | $ | ||||||||||||||||||||||||
Options outstanding and exercisable at March 31, 2024 | $ | $ | ||||||||||||||||||||||||
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 | $ | $ | ||||||||||||||||||||||||
Cancelled or expired | ( | |||||||||||||||||||||||||
Exercised | ( | $ | ||||||||||||||||||||||||
Options outstanding and exercisable at March 31, 2023 | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands) | ||||||||||||||
Commercial services revenue: | ||||||||||||||
Voice and data | $ | $ | ||||||||||||
IoT data | ||||||||||||||
Broadband | ||||||||||||||
Hosted payload and other data | ||||||||||||||
Total commercial services revenue | ||||||||||||||
Government services revenue | ||||||||||||||
Total services revenue | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands) | ||||||||||||||
Commercial | $ | $ | ||||||||||||
Government | ||||||||||||||
Total engineering and support services revenue | $ | $ |
March 31, 2024 | December 31, 2023 | |||||||||||||
(In thousands) | ||||||||||||||
Contract Assets: | ||||||||||||||
Commissions | $ | $ | ||||||||||||
Other contract costs | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||
Numerator: | ||||||||||||||
Net income - basic and diluted | $ | $ | ||||||||||||
Denominator: | ||||||||||||||
Weighted average common shares — basic | ||||||||||||||
Dilutive effect of stock options | ||||||||||||||
Dilutive effect of RSUs | ||||||||||||||
Weighted average common shares — diluted | ||||||||||||||
Net income per share - basic and diluted | $ | $ | ||||||||||||
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
(In thousands) | ||||||||||||||
Service-based RSUs | ||||||||||||||
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||
2024 | % of Total Revenue | 2023 | % of Total Revenue | |||||||||||||||||||||||||||||||||||
($ in thousands) | Dollars | Percent | ||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||
Services | $ | 148,577 | 73 | % | $ | 139,349 | 68 | % | $ | 9,228 | 7 | % | ||||||||||||||||||||||||||
Subscriber equipment | 24,868 | 12 | % | 41,676 | 20 | % | (16,808) | (40) | % | |||||||||||||||||||||||||||||
Engineering and support services | 30,408 | 15 | % | 24,248 | 12 | % | 6,160 | 25 | % | |||||||||||||||||||||||||||||
Total revenue | 203,853 | 100 | % | 205,273 | 100 | % | (1,420) | (1) | % | |||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||||||||
Cost of services (exclusive of depreciation | ||||||||||||||||||||||||||||||||||||||
and amortization) | 46,449 | 23 | % | 36,605 | 18 | % | 9,844 | 27 | % | |||||||||||||||||||||||||||||
Cost of subscriber equipment | 13,880 | 7 | % | 27,139 | 13 | % | (13,259) | (49) | % | |||||||||||||||||||||||||||||
Research and development | 7,198 | 4 | % | 3,878 | 2 | % | 3,320 | 86 | % | |||||||||||||||||||||||||||||
Selling, general and administrative | 36,811 | 18 | % | 38,684 | 19 | % | (1,873) | (5) | % | |||||||||||||||||||||||||||||
Depreciation and amortization | 49,744 | 24 | % | 75,819 | 37 | % | (26,075) | (34) | % | |||||||||||||||||||||||||||||
Total operating expenses | 154,082 | 76 | % | 182,125 | 89 | % | (28,043) | (15) | % | |||||||||||||||||||||||||||||
Operating income | 49,771 | 24 | % | 23,148 | 11 | % | 26,623 | 115 | % | |||||||||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||||||||
Interest expense, net | (20,663) | (10) | % | (17,890) | (8) | % | (2,773) | 16 | % | |||||||||||||||||||||||||||||
Other income, net | 43 | — | % | 219 | — | % | (176) | (80) | % | |||||||||||||||||||||||||||||
Total other expense, net | (20,620) | (10) | % | (17,671) | (8) | % | (2,949) | 17 | % | |||||||||||||||||||||||||||||
Income before income taxes and loss on equity method investments | 29,151 | 14 | % | 5,477 | 3 | % | 23,674 | 432 | % | |||||||||||||||||||||||||||||
Income tax benefit (expense) | (7,931) | (3) | % | 5,453 | 3 | % | (13,384) | (245) | % | |||||||||||||||||||||||||||||
Loss on equity method investments | (1,567) | (1) | % | (1,155) | (1) | % | (412) | 36 | % | |||||||||||||||||||||||||||||
Net income | $ | 19,653 | 10 | % | $ | 9,775 | 5 | % | $ | 9,878 | 101 | % |
Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | 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 | $ | 55.0 | 405 | $ | 45 | $ | 52.4 | 395 | $ | 44 | $ | 2.6 | 10 | $ | 1 | |||||||||||||||||||||||||||||||||||||||||
IoT data | 39.4 | 1,766 | 7.57 | 32.0 | 1,501 | 7.22 | 7.4 | 265 | 0.35 | |||||||||||||||||||||||||||||||||||||||||||||||
Broadband (3) | 13.7 | 16.6 | 274 | 13.4 | 15.5 | 294 | 0.3 | 1.1 | (20) | |||||||||||||||||||||||||||||||||||||||||||||||
Hosted payload and other data | 14.0 | N/A | 15.0 | N/A | (1.0) | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total commercial services | $ | 122.1 | 2,188 | $ | 112.8 | 1,912 | $ | 9.3 | 276 |
Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||
2024 | 2023 | Change | ||||||||||||||||||||||||||||||||||||
Revenue | Billable Subscribers (1) | Revenue | Billable Subscribers (1) | Revenue | Billable Subscribers | |||||||||||||||||||||||||||||||||
(Revenue in millions and subscribers in thousands) | ||||||||||||||||||||||||||||||||||||||
Government services | $ | 26.5 | 145 | $ | 26.5 | 139 | $ | — | 6 |
Three Months Ended March 31, | ||||||||||||||||||||
2024 | 2023 | Change | ||||||||||||||||||
(In millions) | ||||||||||||||||||||
Commercial engineering and support services | $ | 1.1 | $ | 5.7 | $ | (4.6) | ||||||||||||||
Government engineering and support services | 29.3 | 18.5 | 10.8 | |||||||||||||||||
Total engineering and support services | $ | 30.4 | $ | 24.2 | $ | 6.2 |
Three Months Ended March 31, | ||||||||||||||||||||
2024 | 2023 | Change | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Cash provided by operating activities | $ | 71,426 | $ | 68,942 | $ | 2,484 | ||||||||||||||
Cash used in investing activities | $ | (14,564) | $ | (32,905) | $ | 18,341 | ||||||||||||||
Cash provided by (used in) financing activities | $ | 45,524 | $ | (77,961) | $ | 123,485 |
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 | ||||||||||||||||||||||
January 1-31 | 277,848 | $38.00 | 277,848 | $323.5 million | ||||||||||||||||||||||
February 1-29 | 332,701 | $31.70 | 332,701 | $312.9 million | ||||||||||||||||||||||
March 1-31 | 1,252,135 | $28.38 | 1,252,135 | $277.4 million | ||||||||||||||||||||||
Total | 1,862,684 | $30.41 | 1,862,684 | — |
Type of Trading Arrangement | ||||||||||||||||||||||||||||||||||||||||||||
Name and Position | Action | Adoption/Termination Date | Rule 10b5-1* | Non-Rule 10b5-1** | Total Shares of Common Stock to be Sold*** | Total Shares of Common Stock to be Purchased | Expiration Date | |||||||||||||||||||||||||||||||||||||
Thomas J. Fitzpatrick, Chief Financial Officer and Chief Administrative Officer | Adoption | March 15, 2024 | X | 49,570(1) | — | January 31, 2025(1) |
Exhibit | Description | |||||||
10.1 | ||||||||
10.2 | ||||||||
10.3 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1* | ||||||||
101 | The following financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed with the Securities and Exchange Commission on April 18, 2024, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at March 31, 2024 and December 31, 2023; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2024 and 2023; (iii) Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2024 and 2023; (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023; 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. |
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) |
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: April 18, 2024 | /s/ Matthew J. Desch | ||||
Matthew J. Desch | |||||
Chief Executive Officer (principal executive officer) |
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: April 18, 2024 | /s/ Thomas J. Fitzpatrick | ||||
Thomas J. Fitzpatrick | |||||
Chief Financial Officer (principal financial officer) |
1. | The Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, 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. |
/s/ Matthew J. Desch | /s/ Thomas J. Fitzpatrick | |||||||
Matthew J. Desch | Thomas J. Fitzpatrick | |||||||
Chief Executive Officer | Chief Financial Officer |
Condensed Consolidated Balance Sheets (Parenthetical) - Common Stock, Shares [Member] - $ / shares |
Mar. 31, 2024 |
Dec. 31, 2023 |
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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) | 121,643,000 | 122,776,000 |
Common stock, shares outstanding (in shares) | 121,643,000 | 122,776,000 |
Basis of Presentation and Principles of Consolidation |
3 Months Ended |
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Mar. 31, 2024 | |
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, 2023, as filed with the SEC on February 15, 2024.
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Significant Accounting Policies |
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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 March 31, 2024 and December 31, 2023: (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 include money market funds, commercial paper and short-term U.S. agency securities. The Company also classifies its derivative financial instruments as Level 2. In determining fair value of Level 2 assets, the Company uses a market approach utilizing valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. The Company did not hold any Level 3 assets as of March 31, 2024 or December 31, 2023. 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 asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases, such as teleport network facilities, the Company 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 a third-party manufacturer and purchases accessories from third-party suppliers. The Company’s cost of inventory includes an allocation of overhead, including payroll and payroll-related costs of employees directly involved in bringing inventory to its existing condition, and freight. Inventories are valued using the average cost method and are carried at the lower of cost or net realizable value. The Company 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:
Property and Equipment The Company assesses its long-lived assets for impairment when indicators of impairment are present. During the fourth quarter of 2023, the Company updated its estimate of the satellites’ remaining useful lives based on the health of the constellation and related engineering data. As a result, the estimated useful lives of the satellites were extended by five years, from 12.5 years to 17.5 years. This change will result in lower depreciation expense and hosted payload revenue for each of the first three quarters of 2024, compared to the corresponding quarter of the prior year. 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 assets and other current liabilities. When the Company’s derivatives are designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in accumulated other comprehensive income 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 |
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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:
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Leases |
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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 estimated useful lives of the satellites, currently estimated to be approximately 17.5 years from their respective in-service dates. Lease income related to these agreements was $3.1 million and $5.4 million for the three months ended March 31, 2024 and 2023, respectively. The decrease for the quarter ended March 31, 2024 as compared to March 31, 2023 was solely the result of the change in estimated useful life of the satellites, which was made in the fourth quarter of 2023. 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 March 31, 2024, exclusive of the $3.1 million recognized during the three months ended March 31, 2024, by year and in the aggregate:
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Term Loan and Revolving Facility Pursuant to a credit agreement (as amended to date, the “Credit Agreement”), the Company previously entered into a term loan totaling $1,500.0 million (as so amended and restated, the “Term Loan”) and an accompanying $100.0 million revolving loan (the “Revolving Facility”). The Term Loan has been repriced on multiple occasions. 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 Company typically selects a one-month interest period, with the result that interest is calculated using one-month SOFR. Interest is paid monthly on the last business day of the month. The Revolving Facility bears interest at the same rate (but without a SOFR floor) if and as drawn, with no original issue discount, and a commitment fee of 0.5% per year on the undrawn amount, which was reduced to 0.375% in the first quarter of 2024 because the Company had a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of less than 3.5 to 1. The maturity date of the Term Loan is in September 2030. The Revolving Facility has a maturity date in September 2028. On March 25, 2024, the Company closed on an additional $125.0 million under its Term Loan. On April 1, 2024, the Company used these proceeds, together with cash on hand, to complete the acquisition of Satelles, Inc. (see Note 13). The additional amount borrowed is fungible with the original $1,500.0 million, and has the same maturity date, interest rate and other terms, but was issued at a price equal to 99.875% of its face value. The Company paid $0.2 million of original issuance costs related to the expansion of the Term Loan, which, was deferred and will be amortized over the remaining term of the loan. Principal payments, payable quarterly, are equal to approximately $16.3 million per annum (one percent of the full principal amount of the Term Loan following the March 2024 increase), with the remaining principal due upon maturity. The Company had not borrowed under the Revolving Facility as of March 31, 2024. As of March 31, 2024 and December 31, 2023, the Company reported an aggregate of $1,620.9 million and $1,500.0 million in borrowings under the Term Loan, respectively. These amounts do not include $17.1 million and $17.5 million of net unamortized deferred financing costs as of March 31, 2024 and December 31, 2023, respectively. The net principal balance in borrowings in the accompanying consolidated balance sheets as of March 31, 2024 and December 31, 2023 amounted to $1,603.8 million and $1,482.5 million, respectively. As of March 31, 2024 and December 31, 2023, based upon recent trading prices (Level 2 - market approach), the fair value of the Company’s borrowings under the Term Loan was $1,622.0 million and $1,506.6 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, 2023, 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. 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 March 31, 2024. Interest on Debt Total interest incurred includes amortization of deferred financing fees and capitalized interest. The Company incurred third-party financing costs of $1.6 million in connection with the expansion of the Term Loan in March 2024, materially all of which was expensed. The amounts expensed are included within interest expense on the condensed consolidated statement of operations and comprehensive income. The following table presents the interest and amortization of deferred financing fees related to the Term Loan:
As of March 31, 2024 and December 31, 2023, accrued interest on the Term Loan was $1.1 million and $1.0 million, respectively.
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Derivatives |
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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 the Term Loan. The Company has reduced its exposure to fluctuations in the cash flows associated with changes in the variable interest rate by entering into offsetting positions through the use of interest rate hedges. This will reduce the negative impact of increases in the variable rate over the term of the derivative contracts. These contracts are not used for trading or other speculative purposes. Historically, the Company has not incurred, and does not expect to incur in the future, any losses as a result of counterparty default. 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 March 31, 2024 and December 31, 2023. The Cap, which was not affected by the expansion of the Term Loan in March 2024, 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 will be 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 March 31, 2024 and December 31, 2023, the Company had an asset balance of $74.8 million and $66.5 million, respectively, for the fair value of the Cap and a liability balance of $7.7 million and $8.4 million, respectively, for the fair value of the Cap premium. Both the Cap and the Cap premium are recorded net within other assets on the condensed consolidated balance sheet. During each of the three months ended March 31, 2024 and March 31, 2023, the Company collectively incurred $0.8 million in interest expense for the Cap premium. Interest expense was reduced by $9.9 million and $7.7 million for the three months ended March 31, 2024 and 2023, respectively, for payments received related to the Cap. Gains and losses resulting from fair value adjustments to the Cap are recorded within accumulated other comprehensive income within the Company’s 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:
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Stock-Based Compensation |
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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 March 31, 2024, the remaining aggregate number of shares available for future grants under the Amended 2015 Plan was 9,421,592. 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 Beginning in 2024, the RSUs granted to employees for service vest over three years, with 34% vesting on the first anniversary of the grant date and the remainder vesting ratably on a quarterly basis thereafter, subject to continued employment. RSUs granted prior to March 2024 generally 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 the 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. RSUs do not carry voting rights until they are vested, although certain unvested RSUs are entitled to accrue dividends equivalent rights, and shares (including additional shares issuable upon satisfaction of any accrued dividend equivalent rights) are issued upon settlement in accordance with the terms of the award. RSU Summary The following tables summarize the Company’s RSU activity:
(1) These RSUs were granted to the Company’s Board of Directors as a part of their compensation for board and committee service and had vested but had not yet settled, meaning that the underlying shares of common stock had not been issued and released. 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. 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 51,000 and 44,000 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 three months ended March 31, 2024 and 2023, respectively, with an estimated grant date fair value of $2.0 million and $2.3 million, respectively. During the three months ended March 31, 2024 and 2023, the Company granted approximately 1,086,000 and 563,000 service-based RSUs, respectively, to its employees, with an estimated aggregate grant date fair value of $32.3 million and $34.0 million, respectively. Performance-Based RSUs In March 2024 and 2023, the Company granted approximately 461,000 and 193,000 annual incentive, performance-based RSUs, respectively, to the Company’s executives and employees (the “Bonus RSUs”), with an estimated grant date fair value of $13.7 million and $11.9 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 2024 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 2024 Bonus RSUs will vest, subject to continued employment, in March 2025. Substantially all of the 2023 Bonus RSUs vested in March 2024 upon the determination of the level of achievement of the performance goals. Additionally, in March 2024 and 2023, the Company granted approximately 278,000 and 134,000 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 grants was $8.2 million in both 2024 and 2023. Vesting of the Executive RSUs is dependent upon the Company’s achievement of defined performance goals over a two-year period. The vesting of the March 2023 Executive RSUs will ultimately range from 0% to 150% of the number of shares underlying the Executive RSUs granted, and the vesting of the March 2024 Executive RSUs will ultimately range from 0% to 200% of the number of shares underlying the Executive RSUs granted, in each case 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 the grantees. During March 2024 and 2023, the Company awarded approximately 83,000 and 55,000 additional shares, respectively, related to long-term, performance-based RSUs granted to the Company’s executives in 2022 and 2021, respectively, for over-achievement of performance targets for the performance periods ended December 31, 2023 and 2022, respectively. Stock Option Awards 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. Option Summary A summary of the activity of the Company’s stock options is as follows:
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Equity Transactions |
3 Months Ended |
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Mar. 31, 2023 | |
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 March 31, 2024 and December 31, 2023. As of March 31, 2024 and December 31, 2023, there were no outstanding shares of preferred stock, as all previously designated and issued preferred stock was converted into common stock in prior periods. Dividends Stockholders are entitled to receive, when and if declared by the Company’s Board of Directors from time to time, dividends and other distributions in cash, stock or property from the Company’s assets or funds legally and contractually available for such purposes. In December 2022, the Company’s Board of Directors initiated a quarterly dividend. For the three months ended March 31, 2024 and 2023, the Company paid dividends of $0.13 per share of common stock, on March 28, 2024 and March 30, 2023, to stockholders of record as of March 15, 2024 and 2023. These dividends resulted in total payments of $16.1 million and $16.4 million for the three months ended March 31, 2024 and 2023, respectively. The Company’s liability related to dividends on common shares underlying unvested RSUs was $1.6 million and $1.3 million as of March 31, 2024 and December 31, 2023, respectively. The Board of Directors plans to increase the quarterly dividend to $0.14 per share starting with the second quarter 2024 dividend. Share Repurchase Program Since February 2021, the Company’s 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. During the three months ended March 31, 2024 and 2023, the Company repurchased and subsequently retired 1.8 million and 0.9 million shares of its common stock, respectively, for a total purchase price of $55.6 million and $53.1 million, respectively. During the three months ended March 31, 2024, the Company incurred $0.6 million of related taxes, which are not included in the total purchase price. The Company did not incur taxes on repurchases during the three months ended March 31, 2023. In addition, in March 2024, the Company purchased 40,000 shares for $1.0 million, which were settled and retired in April 2024. As such, these shares are recorded as treasury stock as of March 31, 2024. As of March 31, 2024, $277.4 million remained available and authorized for repurchase under this program.
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Revenue |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue The following table summarizes the Company’s services revenue:
The following table summarizes the Company’s engineering and support services revenue:
Approximately 43% and 46% of the Company’s accounts receivable balance at March 31, 2024 and December 31, 2023, 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 $11.4 million and $14.3 million for the three months ended March 31, 2024 and 2023, 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:
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Income Taxes |
3 Months Ended |
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Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure | Income Taxes Income before income taxes and loss on equity method investments was $29.2 million for the three months ended March 31, 2024, while the income tax expense was $7.9 million. The effective tax rate was 27.2% for the three months ended March 31, 2024, which differed from the federal statutory rate of 21%, primarily due to the discrete tax expense associated with stock compensation and nondeductible executive compensation partially offset by the deduction for foreign derived intangible income. Income before income taxes and loss on equity method investments was $5.5 million for the three months ended March 31, 2023, while the income tax benefit was $5.5 million. The effective tax rate was (99.6)%, which differed from the federal statutory rate of 21%, primarily due to the discrete tax benefit associated with stock compensation, partially offset by tax expense associated with nondeductible executive compensation.
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Net Income (Loss) Per Share |
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Net Income (Loss) Per Share | Net Income Per Share The Company calculates basic net income per share by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. 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 per share:
The following table presents the incremental number of shares underlying stock options and RSUs outstanding with anti-dilutive effects:
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Related Party Transactions |
3 Months Ended |
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Mar. 31, 2024 | |
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. The Aireon system was developed by Aireon LLC, which the Company formed in 2011 and which received subsequent investments from several air navigation service providers (“ANSPs”) to provide a global air traffic surveillance service through a series of automatic dependent surveillance-broadcast (“ADS-B”) receivers on the Company’s satellites. Aireon has contracted to offer this service to ANSPs, which use the service to provide improved air traffic control services over the oceans, as well as polar and remote regions. Aireon also markets its data and services to airlines and other commercial users. The Company and the other Aireon investors hold their interests in Aireon Holdings LLC (“Aireon Holdings”) through an amended and restated LLC agreement (“Aireon Holdings LLC Agreement”). Aireon Holdings holds 100% of the membership interests in Aireon, which is the operating entity. In June 2022, the Company entered into a subscription agreement with Aireon Holdings and invested $50.0 million in exchange for an approximately 6% preferred membership interest. The Company’s investment in Aireon Holdings is accounted for as an equity method investment. The carrying value of the Company’s investment in Aireon was $43.6 million and $44.6 million as of March 31, 2024 and December 31, 2023, respectively. The investments by the Company prior to June 2022 had previously been written down to a carrying value of zero. At each of March 31, 2024 and December 31, 2023, the Company’s fully diluted ownership stake in Aireon Holdings was approximately 39.5%, which is subject to partial future redemption under provisions contained in the Aireon Holdings LLC Agreement. Under the agreements with Aireon, Aireon will pay the Company fees of $200.0 million to host the ADS-B receivers, of which $94.5 million had been paid as of March 31, 2024. These fees are recognized over the estimated useful life of the satellites, which is expected to result in revenue of approximately $9.3 million per year, following the change in estimate of the useful lives of the satellites that occurred in the fourth quarter of 2023. The Company recognized $2.3 million and $4.0 million of hosting fee revenue under the Hosting Agreement for the three months ended March 31, 2024 and 2023, respectively. Additionally, Aireon pays power and data services fees of approximately $23.5 million per year, in the aggregate for the delivery of air traffic surveillance data over the Iridium® system. The Company recorded $5.9 million of power and data service fee revenue from Aireon for each of the three months ended March 31, 2024 and 2023. 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 $2.2 million at each of March 31, 2024 and December 31, 2023. 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 $11.9 million. No bridge loan amounts were outstanding as of March 31, 2024 or December 31, 2023. 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% at each of March 31, 2024 and December 31, 2023. The Company’s investment in Satelles was accounted for as an equity method investment and had a carrying value of approximately $21.2 million and $21.8 million as of March 31, 2024 and December 31, 2023, respectively.
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events On April 1, 2024, the Company closed its acquisition of Satelles, Inc., a provider of satellite-based time and location services that complement and protect GPS and other GNSS systems. This acquisition supports Iridium’s long-term business objectives. Subject to the terms and conditions of the Merger Agreement, Satelles was merged with a subsidiary of the Company, with Satelles as the surviving entity, now a direct and indirect wholly owned subsidiary of the Company. The Company paid approximately $124.5 million in cash to the shareholders of Satelles to acquire the remaining 80.5% of the outstanding shares of Satelles that it did not previously own.
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Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2024 | |
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 March 31, 2024 and December 31, 2023: (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 include money market funds, commercial paper and short-term U.S. agency securities. The Company also classifies its derivative financial instruments as Level 2. In determining fair value of Level 2 assets, the Company uses a market approach utilizing valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. The Company did not hold any Level 3 assets as of March 31, 2024 or December 31, 2023.
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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 asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain leases, such as teleport network facilities, the Company 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.
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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 a third-party manufacturer and purchases accessories from third-party suppliers. The Company’s cost of inventory includes an allocation of overhead, including payroll and payroll-related costs of employees directly involved in bringing inventory to its existing condition, and freight. Inventories are valued using the average cost method and are carried at the lower of cost or net realizable value. The Company 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.
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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 fourth quarter of 2023, the Company updated its estimate of the satellites’ remaining useful lives based on the health of the constellation and related engineering data. As a result, the estimated useful lives of the satellites were extended by five years, from 12.5 years to 17.5 years. This change will result in lower depreciation expense and hosted payload revenue for each of the first three quarters of 2024, compared to the corresponding quarter of the prior year.
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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 assets and other current liabilities. When the Company’s derivatives are designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives are recorded in accumulated other comprehensive income 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) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Inventory, Current | The following table summarizes the Company’s inventory balances:
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Cash and Cash Equivalents, Restricted Cash and Marketable Securities (Tables) |
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Summary of Company's Cash and Cash Equivalents | The following table presents the Company’s cash and cash equivalents:
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Leases (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 March 31, 2024, exclusive of the $3.1 million recognized during the three months ended March 31, 2024, by year and in the aggregate:
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Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest incurred | The following table presents the interest and amortization of deferred financing fees related to the Term Loan:
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Derivative Instruments and Hedging Activities (Tables) |
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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:
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Stock-Based Compensation (Tables) |
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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:
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Share-based Payment Arrangement, Option, Activity | Option Summary A summary of the activity of the Company’s stock options is as follows:
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Revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Company's service revenue | The following table summarizes the Company’s services revenue:
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Summary of Company's Engineering and Support Services Revenue [Table Text Block] | The following table summarizes the Company’s engineering and support services revenue:
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Schedule of recognized contract costs | The following table presents contract assets not separately disclosed:
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Net Income (Loss) Per Share (Tables) |
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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 per share:
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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:
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Significant Accounting Policies - Schedule of Inventory (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
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Accounting Policies [Abstract] | ||
Finished goods | $ 47,952 | $ 48,698 |
Raw materials | 45,410 | 43,599 |
Inventory valuation reserve | (824) | (1,162) |
Inventory | $ 92,538 | $ 91,135 |
Significant Accounting Policies (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
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Mar. 31, 2024 |
Jun. 30, 2023 |
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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 | $ 0.0 |
Cash and Cash Equivalents, Restricted Cash and Marketable Securities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
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Cash and cash equivalents: | ||
Total cash and cash equivalents | $ 174,025 | $ 71,870 |
Cash | ||
Cash and cash equivalents: | ||
Cash | 11,513 | 32,526 |
Money Market Funds | Fair Value, Inputs, Level 2 [Member] | ||
Cash and cash equivalents: | ||
Money market funds | $ 162,512 | $ 39,344 |
Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Lessor, Lease, Description [Line Items] | ||
Operating Lease, Lease Income | $ 3,100 | $ 5,400 |
2022 (Remainder of Fiscal Year) | 9,293 | |
2025 | 12,391 | |
2026 | 12,391 | |
2027 | 12,391 | |
2028 | 12,391 | |
Thereafter | 82,106 | |
Total lease income | $ 140,963 | |
Next Generation Satellites | ||
Lessor, Lease, Description [Line Items] | ||
Property, Plant and Equipment, Useful Life | 17 years 6 months |
Debt - Interest Incurred (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Debt Disclosure [Abstract] | ||
Interest Costs Incurred | $ 23,185 | $ 21,336 |
Amortization of Debt Issuance Costs and Discounts | 623 | 1,111 |
Interest Costs Capitalized | $ 1,058 | $ 1,330 |
Derivatives (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
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Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
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Interest Rate Swap [Line Items] | |||
Derivative, Gain on Derivative | $ 9,900 | $ 7,700 | |
Interest Costs Incurred | $ 23,185 | $ 21,336 | |
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% | |
Derivative, Notional Amount | $ 1,000,000 | $ 1,000,000 | |
Interest Rate Cash Flow Hedge Asset at Fair Value | 74,800 | 66,500 | |
Interest Rate Cash Flow Hedge Liability at Fair Value | $ 7,700 | $ 8,400 | |
Debt Instrument, Basis Spread on Variable Rate | 0.064% | 0.064% | |
Interest Costs Incurred | $ 800 | $ 800 | |
Derivative, Cap Interest Rate | 1.436% | 1.50% |
Derivatives - Summary of Unrealized Gains and Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Unrealized gain (loss), net of tax | $ 6,733 | $ (9,656) |
Tax benefit (expense) | $ (2,346) | $ 2,936 |
Stock-Based Compensation Outstanding RSUs (Details) - Outstanding Restricted Stock Units - $ / shares shares in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Shares Underlying RSUs | ||
Outstanding - restricted stock units | 2,795 | 2,970 |
Granted - restricted stock units | 1,959 | 989 |
Forfeited - restricted stock units | (16) | (20) |
Released - restricted stock units | (643) | (656) |
Outstanding - restricted stock units | 4,095 | 3,283 |
Vested and unreleased restricted stock units | 736 | 793 |
Weighted- Average Grant Date Fair Value Per RSU | ||
Outstanding - weighted average grant date fair value per RSU | $ 40.24 | $ 31.60 |
Granted - weighted average grant date fair value per RSU | 30.35 | 59.47 |
Forfeited - weighted average grant date fair value per RSU | 49.49 | 38.59 |
Released - weighted average grant date fair value per RSU | 50.08 | 37.09 |
Outstanding - weighted average grant date fair value per RSU | $ 33.92 | $ 38.85 |
Equity Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | ||||
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Mar. 31, 2024 |
Sep. 30, 2023 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2016 |
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Class of Stock [Line Items] | |||||
Total Authorized Preferred Stock, Number | 2,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | ||||
Preferred stock, shares issued (in shares) | 1,500,000 | ||||
Shares of preferred stock, undesignated and unissued (in shares) | 500,000 | 500,000 | |||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||
Common Stock, Dividends, Per Share, Declared | $ 0.13 | $ 0.13 | |||
Dividends accrued on common stock | $ 1,556 | $ 401 | |||
Treasury Stock, Shares, Retired | 1,800,000 | 900,000 | |||
Treasury Stock, Retired, Cost Method, Amount | $ 55,600 | $ 53,100 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | 277,400 | ||||
Treasury Stock, Value | 1,000 | ||||
Treasury Stock, Value, tax | $ 600 |
Revenue - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
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Concentration Risk [Line Items] | ||
Liability, revenue recognized | $ 11.4 | $ 14.3 |
Accounts Receivable [Member] | Customer Concentration Risk | Prime Contracts with the US Government [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 43.00% | 46.00% |
Revenue - Summary of Contract Costs (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
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Commissions | ||
Capitalized Contract Cost [Line Items] | ||
Contract Assets | $ 964 | $ 1,114 |
Other contract costs | ||
Capitalized Contract Cost [Line Items] | ||
Contract Assets | $ 1,927 | $ 1,970 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | $ 29,151 | $ 5,477 |
Income tax benefit (expense) | $ (7,931) | $ 5,453 |
Effective Income Tax Rate Reconciliation, Percent | 27.20% | (99.60%) |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% |
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 | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net income (loss) - diluted | $ 19,653 | $ 9,775 |
Weighted Average Number of Shares Outstanding, Basic | 123,151 | 127,058 |
Weighted Average Number of Shares Outstanding, Diluted | 123,993 | 128,738 |
Earnings Per Share, Basic and Diluted | $ 0.16 | $ 0.08 |
Earnings Per Share, Diluted | $ 0.16 | $ 0.08 |
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 | 337 | 698 |
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 | 505 | 982 |
Net Income (Loss) Per Share - Anti-Dilutive Shares (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of diluted earnings per share | 0 | 102 |
Subsequent Events (Details) - Subsequent Event - Satelles Inc. $ in Millions |
Apr. 01, 2024
USD ($)
Rate
|
---|---|
Subsequent Event [Line Items] | |
Payments to Acquire Businesses, Gross | $ 124.5 |
Business Acquisition, Percentage of Voting Interests Acquired | Rate | 80.50% |
Payments to Acquire Businesses, Gross | $ 124.5 |
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