The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: <_ALACRA_META_ABSTRACT>So without further ado, I thought maybe you could start by -- just in case we have anyone in the audience that's new to the
Iridium story, just start with a few minute kind of brief summary of the company's history, the nature and scale of your network,
and then where you participate in the market.
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Okay. Great. That's a great introduction. So the company's roots are, from way back now, are in voice, but you've really been
leaning into IoT. So can you talk about the dynamic in the Commercial voice and data business, which I think is still the largest
product sub-segment, and then the Commercial IoT data segment, which I think is catching up.
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Okay. And then so I have my numbers correct, I hope. You have about 2 million IoT devices currently?
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: And so what's the growth outlook for that?
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: So what are the most impactful applications that you foresee for this?
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Okay. What is this going to do to ARPU, like sort of ARPU per device?
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Okay. Okay, so we -- on your most recent earnings call, the company addressed the question of Starlink competition, and this
was after the announcement of the planned EchoStar spectrum acquisition or the agreement there. So in direct-to-device,
right, and I think the company acknowledged that there's going to be likely increased competitive intensity, both in smartphones
and in IoT, but cited the impact is several years out.
So could you just overall recap your view on this? And I know it's early days and it was only maybe about a month ago, but
have there been any subsequent refinements to how you're thinking about the impact?
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Okay. So you have a Government Services business. If you could talk about what the scale of that business and the outlook.
And then I think it's come up in some of your meetings. There's a contract up for renewal with the DoD in '26, it's about $110
million annual contract. Any color you can provide on what that process will be?
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Okay. That's good. So I'm going to switch over to some of the financial questions now. And we can double back on some of
a few other topics if we have time.
But for 2025, the service revenue growth guidance is 3% to 5%, but I think you said you're now expecting towards the lower
end of that. But the higher end of the original EBITDA guidance it's $490 million to $500 million. So what's the dynamic where
you're still able to hit the high end of the margin?
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Okay. Company has very solid EBITDA margins, close to 60%, within telecom industry, very strong, second only to towers,
but more complicated than a tower business. But so how should we think about incremental margins and future revenue
growth?
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Okay. And then on free cash flow. So the 2025 free cash flow outlook is $300 million, and then you've got 2026 to '30
cumulative free cash flow outlook of $1.5 billion to $1.8 billion. So given this, why did you recently pause the share repurchases?
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Are you planning to pay down debt or just to build the cash balance so you -- so as the net improves, but you still have the
cash on the balance sheet for flexibility?
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Okay. Great. So just a little bit of time left. So I welcome you to any closing comments or anything important that we didn't
touch on or --
Question: Ana Goshko - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Okay. Vince, thanks so much for being with us. We really appreciate it. Thank you.
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DECEMBER 02, 2025 / NTS, IRDM.OQ - Iridium Communications Inc at Bank of America Leveraged Finance
Conference
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