Iridium Communications Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Edison Yu - Deutsche Bank AG - Analyst : Hey, good morning. Thanks for taking our questions. I want to follow up on the strategic options that the team has mentioned and maybe take it from two angles. First, you mentioned M&A several times, I'm wondering what the time line maybe is for some of these actions and that's in the context stuff, is this a case where you had a bunch of M&A in the pipeline already and you're speeding it up? Or are you now looking for different types of targets post all the events that have occurred in the last couple of months?

Question: Edison Yu - Deutsche Bank AG - Analyst : Understood. And then when I take a look at the M&A angle from, I guess, the opposite side, does it make sense to you for Iridium to be part whether directly or indirectly of some type of other solution, whether it's another big tech company trying to get into [DTD] in some way? Do you think that is a sensible thing after what's happened and transpired in the last couple of months?

Question: Edison Yu - Deutsche Bank AG - Analyst : Great. Thank you so much.

Question: Brent Penter - Raymond James - Analyst : Hey, good morning everyone. Thanks for taking the questions and appreciate the commentary on the competitive environment. So at a high level, which of your business lines do you think are totally insulated from the competitive risk where you don't think about it at all really? Which business lines are maybe mostly insulated and which business lines do you think are most potentially exposed?

Question: Brent Penter - Raymond James - Analyst : Okay. Great. I appreciate all that detail. And so to take a big broad question and make it a little more specific. If we look at the voice and data segment, what -- can you give us a rough breakdown of what percent of your base there are more leisure or casual users versus what portion are maybe more industrial types or users that really need that more robust device and service that might be at less risk?

Question: Brent Penter - Raymond James - Analyst : Yeah. Very helpful color. And so my last question would just be kind of take a similar question with the IoT business. Can you all update us on what portion of that base is personal communication kind of or consumer users? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 12:30PM, IRDM.OQ - Q3 2025 Iridium Communications Inc Earnings Call

Question: Brent Penter - Raymond James - Analyst : Okay, great. Appreciate all the detail, guys. Thanks.

Question: Mathieu Robilliard - Barclays Services Corp - Analyst : Yes, good morning and thank you for the presentation. If I could dive in some of the verticals a bit more. In terms of the broadband, one, you mentioned that there was a one-off kind of a contract that was not renewed. But I was wondering if you were still seeing an impact from the loss of core connectivity services that you had in the past, but I thought would be down by the end of last year or beginning of this year. So I just wanted to make sure what was the exposure still to connectivity service on the maritime. And then on the IoT and clearly, I think from what you've said, this is potentially the area where D2D could become the biggest competitor. At the same time, you are developing your home, D2D IoT or NTN IoT solution. And I think you signed the deal with Deutsche Telekom recently, and I wanted to clarify what exactly it is? Because my understanding is that your services are not yet commercially available. And so if you could clarify exactly the nature of what you signed with Deutsche Telekom. And also, which is another way to look at the threat of D2D or the opportunity. Clearly, when we look at pure mobile terrestrial IoT ARPUs, we're talking about less than a $1 or low single-digit dollar per month per user, which is not the case in your IoT business, and I understand there's lots of different price points. But is your D2D initiative, is that something that could protect you to some extent, but also just bring lower ARPU for the same amount of subscribers? Thank you.

Question: Mathieu Robilliard - Barclays Services Corp - Analyst : No, that's very clear. I guess what I understand in terms of the agreement you signed with Deutsche is not -- this is based on your existing satellite IoT solutions. You're just signing a new partner, which is great in itself, but it has nothing to do with you are --

Question: Mathieu Robilliard - Barclays Services Corp - Analyst : Okay, that's very clear now. Thank you.

Question: Colin Canfield - Cantor Fitzgerald LP - Analyst : Hey, thank you for the question. Following up with that and maybe just asking it a little bit more directly, but as we think about kind of take on value on kind of Iridium and maybe the process, typically, if we think about it maybe starting today and the cost starting now, is it fair to assume that like 9 to 12 months could be a kind of potential time line to realizing that the full value of Iridium? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 12:30PM, IRDM.OQ - Q3 2025 Iridium Communications Inc Earnings Call And if you think about kind of the key value within Iridium's kind of constellation RF network downstream devices, where do you think kind of are the key things that other partners might want to take out of the business or kind of integrate it into their wholesale back? I mean like there's a lot of, obviously, big dollars that are flowing around and like, yeah, you can make the argument that the space equity market probably continues to drift higher from here. But it's just one of those things where it's tough to get public market credit for such an enduring and valuable asset.

Question: Colin Canfield - Cantor Fitzgerald LP - Analyst : Got it. Definitely agree. But as we think of like rank order of partners, right? Like the EchoStar SpaceX deal, I think you're talking about a pretty clear indication that the SpaceX plans to go after a handset, right? And so within that construct, kind of the big competitors that are read-on have substantial ecosystems are probably one-in-one alone and as a third company, right? So as we think of kind of that construct, is there a rank order of folks that you probably have a great relationship, someone like Paul Jacobs a global star or kind of some of the Amazon folks? Like how do you rank order the potential teammates that you would probably want to work with in the future?

Question: Colin Canfield - Cantor Fitzgerald LP - Analyst : Got it. No, definitely agree. Appreciate the color as always now. Thank you.

Question: Tim Horan - Oppenheimer - Analyst : Thanks guys. Matt, just following up on that question. On the spectrum front, do you have a sense of what percentage of the world EchoStar Spectrum covers at this point? And I believe you and Globalstar are the only ones with really global spectrum coverage. If you can just elaborate on that, that would be great.

Question: Tim Horan - Oppenheimer - Analyst : That's really helpful. So on PNT, it seems like the opportunity now is much larger than it even was two or three years ago. I guess do you still think you can hit those revenue targets on PNT. And what does it kind of take to do that?

Question: Tim Horan - Oppenheimer - Analyst : So the next few years, you're not going to really see any increased competition. Can you give us a sense of the revenue growth. Will it be better than this year? Are there any just some of the tailwinds or headwinds? I mean are we thinking mid-single-digit revenue growth? Any kind of color given you pull some of the longer-term guidance would be really helpful.

Question: Tim Horan - Oppenheimer - Analyst : Thank you.

Question: Greg Mesniaeff - Kingswood Capital Partners LLC - Analyst : Yes, thank you. Hi, Matt. Matt, you mentioned that you guys picked up about 70 new distribution partners have been signed. Can you talk about any changes in the terms with these third-party resellers in terms of revenue split or economics? And how is that trending as you pick up new distribution partners? Thanks.

Question: Tim Horan - Oppenheimer - Analyst : Got you. Okay. Thank you for that.

Question: Chris Quilty - Quilty Analytics LLC - Analyst : Thanks, Matt. I want to follow up on the T-Mobile DOT announcement. You mentioned a fraction of the sites. I think it was 90% for the announcement. Can you give us a sense, I mean, of the sort of volume of units, just if you look at specifically the cellular market or took it out to the data center market, what sort of penetration do they need? Do they need in every site or a portion of the sites based upon the operations? And I'm just trying to get a scale for how big that might be?

Question: Chris Quilty - Quilty Analytics LLC - Analyst : And real quickly, I mean, in your core business, you're wholly focused on the wholesale market. Obviously, having acquired Satelles, they had a

Question: Chris Quilty - Quilty Analytics LLC - Analyst : No, in PNT Direct generally.

Question: Chris Quilty - Quilty Analytics LLC - Analyst : And to be clear, the revenue opportunity is that all the service and license revenue? Or is there a hardware component? And what does that mix look like over time?

Question: Chris Quilty - Quilty Analytics LLC - Analyst : Got you. And on the UAV market, you talked about it before, but ostensibly, you've got two opportunities, TT&C capability with like a Certus device, but also a PNT or all PNT, why is that market not booming, given the hundreds or thousands of long-range UAVs flying around Europe and the Middle East nowadays?

Question: Chris Quilty - Quilty Analytics LLC - Analyst : Got you. And if I can, one final ViaSat and Space42 came out with their Equatys whatever announcement for the joint venture company, still no Iridium mentioned in any of these announcements. But can you talk about how you view that effort? Is it something that you view as competitive or something you could contribute to? Can you contribute your spectrum to a pool there without causing interference or other issues with your network? What's your current thinking?

Question: Chris Quilty - Quilty Analytics LLC - Analyst : Got it. Thanks for the color.

Question: Hamed Khorsand - BWS Financial Inc - Analyst : Hi, thanks for taking the question. Just one, on the consumer IoT side, are you able to differentiate the gains in the quarter coming from your partners that are not on a fixed contract with you?

Question: Hamed Khorsand - BWS Financial Inc - Analyst : Yeah, versus your large customer that's on a fixed contract.

Question: Hamed Khorsand - BWS Financial Inc - Analyst : So they grew in the quarter?

Question: Hamed Khorsand - BWS Financial Inc - Analyst : Okay. All right. That was it for me. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2025 / 12:30PM, IRDM.OQ - Q3 2025 Iridium Communications Inc Earnings Call

Question: Louie DiPalma - William Blair Capital Partners - Analyst : Matt, Vincent and Ken, good morning.

Question: Louie DiPalma - William Blair Capital Partners - Analyst : I missed the earlier part of the call, but caught some of the Q&A. Given the rapidly changing industry dynamics, Matt, did you indicate that you plan on exploring strategic options? Or is the message just that your phone line is open?

Question: Louie DiPalma - William Blair Capital Partners - Analyst : Sounds good. And has there been any discussion on Aireon being part of the FAA's air traffic control modernization?

Question: Louie DiPalma - William Blair Capital Partners - Analyst : And final one for your narrowband non terrestrial network solution, will the chipsets be available next year? And what's the general timing of the -- like the Deutsche Telekom roaming partnership going live?

Question: Louie DiPalma - William Blair Capital Partners - Analyst : Okay, and will those chipsets be different from like mass market like smartphone chipsets? And is there a timing on when like your spectrum band would be included in like mass market chipsets?

Question: Louie DiPalma - William Blair Capital Partners - Analyst : Thanks, Matt. Thanks, Vincent. Thanks, Ken.

Question: Justin Lang - Morgan Stanley - Analyst : Hi, thanks for squeezing me in. I'll just stick to one here. Matt, just coming back to the acquisition pipeline, my apologies if I missed this, but curious if you could just generally size some of the opportunities you're looking at or just give us some general parameters. Is this more about a series of smaller deals that give you to hold in new markets? Or are you really weighing something transformational, and that's the message we should take away? Thanks.

Question: Justin Lang - Morgan Stanley - Analyst : Okay, makes sense.