Debt

12 Months Ended

Dec. 31, 2024

Debt Disclosure [Abstract]

Debt

6. Debt

Term Loan and Revolving Facility

Pursuant to a credit agreement (as amended to date, the “Credit Agreement”), the Company previously entered into a term loan totaling $1,500.0 million (as so amended and restated, the “Term Loan”), issued at a price equal to 99.75% of its face value, and an accompanying $100.0 million revolving loan (the “Revolving Facility”). The maturity of the Term Loan is in September 2030. During the year ended December 31, 2024, the Company borrowed an additional $325.0 million under its Term Loan, comprised of $125.0 million on March 25, 2024 and $200.0 million on July 30, 2024. The additional amounts borrowed are fungible with the original $1,500.0 million and have the same maturity date, interest rate and other terms. The additional $125.0 million was issued at a price equal to 99.875% of its face value, while the additional $200.0 million was issued at 99.0% of its face value.

The proceeds from the March 2024 additional Term Loan were used for the acquisition of Satelles, Inc. (see Note 12) on April 1, 2024. In April 2024, the Company drew down $50.0 million on its Revolving Facility for general corporate purposes, including the funding of repurchases of its common stock. This amount was repaid with the expansion of the Term Loan in July 2024, and there were no amounts outstanding under the Revolving Facility as of December 31, 2024. The remaining proceeds from the July 2024 additional Term Loan have been used for general corporate purposes, including repurchases of common stock.

The Term Loan has been repriced on several occasions, most recently in June 2024, and currently bears interest at an annual rate equal to the Secured Overnight Financing Rate (“SOFR”) plus 2.25%, with a 0.75% SOFR floor. The Company typically selects a one-month interest period, with the result that interest is calculated using one-month SOFR. Interest is paid monthly on the last business day of the month. Principal payments, payable quarterly, equal $18.3 million per annum (one percent of the full principal amount of the Term Loan following the additional Term Loan amounts borrowed in 2024), with the remaining principal due upon maturity.

The Revolving Facility bears interest at the same rate (but without a SOFR floor) if and as drawn, with no original issue discount, a commitment fee of 0.5% per year on the undrawn amount, which is reduced to 0.375% if the Company has a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of less than 3.5 to 1, and a maturity date in September 2028.

The Company paid fees of $2.3 million in connection with the expansion of the Term Loan in July 2024, $1.9 million related to the repricing of the Term Loan in June 2024 and $1.6 million in connection with the expansion of the Term Loan in March 2024, substantially all of which were expensed as incurred. The amounts expensed are included within interest expense.

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

In the fourth quarter of 2022, the Company elected to prepay $100.0 million of principal on the Term Loan. This resulted in a $1.2 million loss on extinguishment of debt, as the Company wrote off the unamortized debt issuance costs related to this prepayment.

As of December 31, 2024 and 2023, the Company reported an aggregate of $1,807.7 million and $1,500.0 million in borrowings under the Term Loan, respectively. These amounts do not include $16.9 million and $17.5 million of net unamortized deferred financing costs as of December 31, 2024 and 2023, respectively. The net principal balance in borrowings in the accompanying consolidated balance sheets as of December 31, 2024 and 2023 amounted to $1,790.9 million and $1,482.5 million, respectively. As of December 31, 2024 and 2023, based upon over-the-counter bid levels (Level 2 - market approach), the fair value of the borrowings under the Term Loan was $1,802.1 million and $1,506.6 million, respectively. The Company had no outstanding borrowings under the Revolving Facility as of December 31, 2024 or 2023.

The Credit Agreement restricts the Company’s ability to incur liens, engage in mergers or asset sales, pay dividends, repay subordinated indebtedness, incur indebtedness, make investments and loans, and engage in other transactions as specified in the Credit Agreement. The Credit Agreement provides for specified exceptions, including baskets measured as a percentage of trailing twelve months of earnings before interest, taxes, depreciation and amortization (“EBITDA”) and unlimited exceptions in the case of incurring indebtedness and liens and making investments, dividend payments, and payments of subordinated indebtedness, based on achievement and maintenance of specified leverage ratios. The Credit Agreement also contains an annual mandatory prepayment sweep mechanism with respect to a portion of the Company’s excess cash flow (as defined in the Credit Agreement) in the event the Company’s net leverage ratio rises above 3.5 to 1. The Company’s mandatory excess cash flow prepayment, as specified in the Credit Agreement, was $28.6 million as of December 31, 2024. This amount will be paid in 2025 and will be applied to the Company’s required quarterly principal payments. As such, it was classified under current short-term secured debt in the Company’s consolidated balance sheet as of December 31, 2024. The Credit Agreement permits repayment, prepayment and repricing transactions, subject, in the case of the Term Loan, to a 1% penalty in the event the Term Loan is prepaid or repriced within the first six months from the refinancing date.

The Credit Agreement contains no financial maintenance covenants with respect to the Term Loan. With respect to the Revolving Facility, the Credit Agreement requires the Company to maintain a consolidated first lien net leverage ratio (as defined in the Credit Agreement) of no greater than 6.25 to 1 if more than 35% of the Revolving Facility has been drawn. The Credit Agreement contains other customary representations and warranties, affirmative and negative covenants, and events of default. The Company was in compliance with all covenants as of December 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 $15.9 million in connection with the refinancing of the Term Loan in September 2023, of which $14.7 million was expensed. All third-party financing costs incurred during the years ended December 31, 2024 and 2023 were expensed. All amounts expensed are included within interest expense on the consolidated statements of operations and comprehensive income (loss).

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

	Year Ended December 31,
	2024		2023		2022
	(In thousands)
Total interest incurred	$	102,758	$	102,321	$	72,090
Amortization of deferred financing fees	$	2,660	$	3,958	$	4,760
Capitalized interest	$	5,042	$	5,086	$	2,590

As of December 31, 2024 and 2023, accrued interest under the Term Loan was $0.3 million and $1.0 million, respectively.

Total Debt

The following table presents future minimum principal repayments with respect to the Term Loan existing at December 31, 2024, by year and in the aggregate:

Year ending December 31,	Amount
	(In thousands)
2025	$	33,118
2026	3,402
2027	18,260
2028	18,260
2029	18,260
Thereafter	1,716,445
Total debt commitments	1,807,745
Less: Original issuance discount	16,860
Less: Total short-term debt	33,118
Total long-term debt, net	$	1,757,767

The table above includes only the cash flow sweep amount payable in 2025 with respect to 2024 excess cash. The schedule excludes future amounts that may be required to be prepaid pursuant to the excess cash flow sweep provision of the Credit Agreement, as those amounts are not determinable in advance.