Iridium(IRDM) - 2025 Q1 - Quarterly Report

Revenue and Income - Total revenue for the three months ended March 31, 2025, was $214.878 million, an increase of$ 11.025 million, or 5%, compared to $203.853 million in the same period of 2024[101] - Net income for the three months ended March 31, 2025, was$ 30.412 million, a 55% increase from $19.653 million in the same period of 2024[101] - Operating income increased by$ 10.617 million, or 21%, to $60.388 million for the three months ended March 31, 2025, compared to$ 49.771 million in the prior year[101] - Net income was $30.4 million for the three months ended March 31, 2025, compared to$ 19.7 million for the prior year period, reflecting a $10.8 million improvement[116] Subscriber and Service Revenue - The number of billable subscribers increased by 110,000, or 5%, to approximately 2,443,000 as of March 31, 2025, up from 2,333,000 a year earlier[99] - Commercial IoT revenue rose by$ 4.4 million, or 11%, driven by a 7% increase in billable subscribers and a new contract with a large customer[102] - Engineering and support service revenue increased by $7.0 million, or 23%, for the three months ended March 31, 2025, primarily due to increased work under government contracts[104] - Government service revenue slightly increased, reflecting a contractual step up in the EMSS contract on September 15, 2024[103] Costs and Expenses - Cost of services (exclusive of depreciation and amortization) increased by$ 2.3 million, or 5%, primarily due to increased work under government projects[106] - Subscriber equipment revenue decreased by $1.7 million, or 7%, for the three months ended March 31, 2025, primarily due to a decrease in the volume of Short Burst Data devices[104] - Cost of subscriber equipment decreased by$ 1.0 million, or 7%, for the three months ended March 31, 2025, primarily due to a decrease in volume of Short Burst Data device sales[107] - Research and development expenses decreased by $1.8 million, or 25%, for the three months ended March 31, 2025, due to lower spending on device-related features[108] - Selling, general and administrative expenses decreased by$ 1.1 million, or 3%, for the three months ended March 31, 2025, primarily due to decreases in headcount costs and professional fees[110] Cash Flow and Capital Expenditures - Cash provided by operating activities decreased by $10.3 million to$ 61.1 million for the three months ended March 31, 2025[130] - Cash used in investing activities increased by $10.0 million to$ 24.5 million for the three months ended March 31, 2025, primarily due to increased capital expenditures[132] - The company expects capital expenditures of approximately $90.0 million in 2025, which are anticipated to moderate through the end of the decade[117] Debt and Financial Instruments - The Term Loan has an outstanding aggregate balance of$ 1,803.2 million as of March 31, 2025, with interest at an annual rate equal to SOFR plus 2.25%[136] - SOFR increased by 25 basis points, leading to an expected annual interest expense increase of less than $0.1 million related to the Revolving Facility[138] Credit Risk Management - Financial instruments subject to credit risk include cash and cash equivalents, and accounts receivable, with cash primarily invested in a money market fund[139] - The company maintains cash deposits in excess of federally insured limits to mitigate credit risk[139] - Accounts receivable are due from both domestic and international customers, with credit evaluations performed to assess financial conditions[139] - Reserves are recorded to provide for estimated credit losses on accounts receivable[139] - Accounts payable are owed to both domestic and international vendors, indicating a diverse supplier base[139] Acquisition Impact - The acquisition of Satelles, Inc. is expected to generate substantial growth in service revenue and incremental equipment and engineering services revenue over the coming years[97]